13th Parliament · 1st Session
Mr. Speaker (Hon. G. H. Mackay) took the chair at10.30 a.m., and read prayers.
– Will the Prime Minister inform me whether the conference being held in Canberra to-day, between the Dairy Produce Export Control Board and the Cabinet subcommittee,has been arranged as the result of pressure brought to bear by the British Government on the Australian Resident Minister in London?
– The conference is being held in consequence of representations that have been made by the British Government through the Australian Resident Minister in London. The whole subject is to be open for consideration. In the circumstances the Government feels that the board, which was called into consultation previously, should again be consulted before Cabinet reaches a final decision.
-Is it a fact that the British Government, officially or otherwise, has requested the Australian Government to restrict the exports of Australian butter to the United Kingdom ?
– The British Government has placed certain facts before the Commonwealth Resident Minister in London (Mr Bruce) and these are receiving consideration by this Government. The restriction of the export of butter is involved; but it has been made perfectly clear by the British Government that there can be no such restriction within the next three years without the approval of theAustralian Government, for, under the Ottawa agreement, our butter must have free entry into Great Britain during that period. But, in view of the prevailing circumstances, the British Government has deemed it desirable to place certain information before the Commonwealth Government regarding the possible effect of a restriction of exports upon the future of the industry, both here and in the United Kingdom. In order that the subject might be exhaustively discussed, and a determination arrived at, the Government has convened a conference of those concerned, and it will be held this morning.
– Would it be practicable for the Prime Minister to advise honorable members and the country of the reasons which have actuated the British Government in making the suggestions to which he has referred? These suggestions need some explanation, seeing that there are 2,500,000 unemployed in the United Kingdom on a low rate of sustenance and in need of foodstuffs.
– In view of the fact, that the conference which I have mentioned is now sitting, it is wiser that the information which is being conveyed to that conference should not be the subject of simultaneous discussion in this chamber.
– Will the Minister for Commerce inform me whether the Government has taken any steps to impose a quota on Austruiian egg exports?
– No suggestion of that description has been made.
– Can the Prime Minister inform me whether, during his visit to the electric bulb manufacturing works in my electorate, he was informed that on account of the dumping of cheap Japanese bulbs in Australia, the local output had been diminished by 1,000,000 bulbs a year?
-I was furnished with a great deal of information during my visit as to the necessity for protecting this industry, but I have no recollection of the particular matter referred to by the honorable member. I remember clearly, of course, that those interested in the industry made definite references to the injury that would be done to the Australian enterprise by the importation of these products from low-wage countries, but that was from the stand-point of the industry generally.
– Is the Minister for Commerce able to inform me whether forms of application for bounty on superphosphates used by farmers for other than wheat-growing, are yet available?
– I shall make inquiries and let the honorable member know.
– Will the Minister also intimate at the same time whether such forms will be available at postoffices ?
– Since replying to the honorable member for Barker (Mr. Cameron), I have ascertained that application forms will be available at postoffices next week.
Inspection of Files - Food Re lief.
– Will the Prime Minister instruct the Pensions Department to permit members of Parliament to inspect the files of pensioners if they are authorized to do so by the pensioners concerned?
– Most emphatically, no. Neither members of Parliament nor private citizens will be allowed to inspect these files.
– The Repatriation Department, allows it.
– It would be impossible properly to administer our pensions legislation if members of Parliament or private citizens were permitted to do as the honorable member desires.
– Will the Prime Minister give an undertaking that pending the introduction of the proposed amendments of out invalid and old-age pensions legislation, an instruction will be issued to the pensions department that food relief is not to be taken into account in determining the rate of pensions. Seeing that the Government has intimated that it was never intended that food relief should be taken into account, will retrospective refunds of such deductions be made to the pensioners?
– The Government has not stated that it was never intended that food relief should be taken into account. We have said very definitely - and there was no necessity for the honorable member to raise this question after I had given an assurance on the point - that the Government had decided not to take food relief into consideration for the future, and that it would anticipate parliamentary approval of that action. I emphasize the fact that that statement has already been very clearly made.
– Will the Minister for Trade and Customs inform me whether, in giving effect to the provisions of the Ottawa agreement for preferences to Great Britain by putting up the duties on foreign goods rather than by reducing the duties on British goods, the Government has been advised by the Tariff Board or has consulted the Tariff Board, and also whether it is proceeding in conformity with the terms of the Ottawa agreement?
– The Government has acted in accordancewith the agreement. The honorable member must realize that to carry out the adjustment formula prescribed by the agreement in the case of British goods which were admitted free, it was necessary to raise the foreign duties. There was no other way in which the adjustment could be made.
– Will the Minister for the Interior inform the House how much money is available for housing loans in Canberra, and what terms and conditions will apply to the advances?
– Cabinet decided a few weeks ago to revive the old housing scheme, which came into operation originally in 1927, and under the same conditions, namely, that an advance of 90 per cent. would be made on the valuation. The rate of interest is to be reviewed. Under the old arrangement it was seven and one-quarter per cent. An amount of £50,000 is being provided, of which £30,000 will be for the construction of new buildings and £20,000 for the purchase of existing buildings. Arrangements in regard to the matter are now being completed between the Department of the Interior and the Treasury.
– Will the Government consider the advisability of restoring the cuts made in the superannuation payments to ex-federal public servants who were subject to extremely harsh, if not unjust, treatment by the provisions of the Financial Emergency Act of 1931?
– That is a matter of Government policy which I cannot deal with in answer to a question. When the Government has considered its financial proposals for the coming year, its intentions will be clearly indicated to honorable members.
– In the course of his speech last night, the AttorneyGeneral said that no agreement was made prior to the last federal election between the United Australia Party and the Country party. I ask him whether it is not a fact that such an agreement was made, and was subsequently ratified by the executives of the two organisations in New South Wales? Is it not also a fact that the right honorable gentleman was congratulated by his own party on the magnificent work he had doneto bring about unity?
– The subject-matter of the honorable member’s question does not affect the administration of any of the departments with which I am concerned. There are many matters to which Ministers and members refer in their speeches which are quite separate from the administration of public departments.
It is true, however, that on occasions I have been congratulated by the members of my party. I hope that may happen again. The statements I made last night were entirely accurate.
Clothing and Blankets - -MILITARY Camps.
– Seeing that the Prime Minister, on Wednesday last, expressed sympathy with the unemployed, I desire to know whether the Government will make available a special grant of money for the purchase of clothing and blankets to tide the unemployed over the coming winter ?
– The provision of unemployment relief is a subject which has been regularly considered at the various conferences ‘between the Governments of the Commonwealth and the States, and a definite policy as to the expenditure over the twelve months has been adopted. In considering methods of relieving unemployment, the Commonwealth and State Governments have had to determine what amount of money is available and can profitably be expended during the financial year. As yet, no adequate reason has been advanced for supplementing the sums to be expended.
– Will the Acting Minister for Defence consider re-opening the Rutherford military camp for the purpose of housing the unemployed during the coming winter ? He will recollect that that camp was used for such a purpose last year, and that its temporary occupants were evicted because the Government wished .to use the camp for military training.
– I desire to make it clear that the Defence Department did not evict any unemployed person from the Rutherford military camp: a mutual arrangement was made between the Commonwealth and the State Governments to the satisfaction of all concerned, including the unemployed who were affected. The request of the honorable member will receive consideration.
– Has the attention of the Postmaster-General been drawn to the fact that thousands of wireless sets in the country districts, particularly of New South Wales, are rendered useless through interference by local electric light and other similar plants, and that, despite numerous complaints, the experts of the Postal Department are taking no action to overcome the trouble? Will he bring under the notice of those experts the necessity of trying to cope with this menace to listeners in country districts?
– My knowledge of the post office administration leads me to consider that there are two inaccuracies in the statement of the honorable member. There are not thousands of wireless sets being rendered useless because of local electrical interference ; and the department is not oblivious of the desirability of remedying such trouble where it exists. Specific cases that are brought to the notice of the department will be promptly attended to.
– Although many thousands are subscribing to the Commonwealth revenue by taking out wireless licences, they are not receiving anything like an adequate service from the Australian Broadcasting Commission, particularly in the western districts of New South Wales. Will the PostmasterGeneral hasten a decision regarding the establishment of a regional station in those districts?
– I have already indicated that every effort is being made to expedite this matter. Certain districts in Australia are affected by fading, but I am under the impression that that does not happen in the western districts of New South Wales, where, I believe, wireless signals are better received than in practically any other part of the State. However, I shall have the fullest inquiry made into the matter.
– As there is interference with radio reception in many thousands of cases, .both in the cities and the country, will the Minister consider the advisability of introducing legislation making it compulsory for users of electric power to install the inexpensive appliance which is necessary to prevent it?
– So far it has not been found necessary to adopt that course; ‘but should it become desirable, the honorable member’s suggestion will certainly be taken into consideration.
– Will the Prime Minister consider the desirability of following the lead of the UnitedStates of America by indulging in a safeguarded form of inflation, designed to give relief to our employment problem?
– I believe that the honorable member would be the last person to ask this, or any other Government of this country whose interests he desired to preserve, to take the United States of America as a pattern upon which to model its monetary policy.
– Hasthe Minister for Commerce noticed that, as a result of the further restrictions of importations from Japan, that country is negotiating for the establishment of meat works in Buenos Aires? Does he not consider that such a step would be most detrimental to our trade with the East, and to the Australian meat industry?
– I have not noticed any reference to the matter to which the honorable member called attention, but I shall be pleased to give the subject consideration.
-Great dissatisfaction exists in. South Australia because the amount of space granted to South Australia this season for the conveyance of refrigerated fruit to Europe is grossly unfair. Space for 18,000 cases of pears is required, yet South Australia is allowed only space for 5,620 cases, while Victoria is scheduled to ship 350,000 cases. Putting Victoria’s forecast even at 500,000 cases, South Australia, on an equitable basis, is entitled to space for at least 12,500 cases.
– Order ! Questions must elicit, not give, information.
– I ask the Minister for Commerce what steps have been taken to overcome the difficulties experienced by South Australian fruit-growers ?
– There has been an interchange of correspondence between the department, the shipping companies, and other interested parties on this matter. I shall institute inquiries this morning, and advise the honorable member of the result before the House rises to-day.
– Will the Prime Minister advise whether the negotiations between the Resident Minister in London and the British shipping company which purchased the Australian Common wealth Line of Steamers are nearing completion ? If so, when can this House expect a statement on the subject?
– I have stated time and again that so soon as I am in a position to make a declaration on this matter, I shall do so. I am as anxious to make such a statement as are honorable members to hear it. Meanwhile it is futile and unnecessary to ask for information on the subject.
– I should like to know from the Prime Minister, for the guidance of honorable members, whether in regard to statements affecting Parliament, we are to be informed by him of what is happening, for instance, in connexion with such matters as the negotiations about the payment for the vessels of the Australian Commonwealth Line of Steamers. I mention this because of the many questions that we have asked respecting the insurance money on the Ferndale, which was lost at sea, to which no reply has been given. Are we to rely on the press statement which was issued bythe White Star Line, or are we to be informed in this House whether the Commonwealth has received the insurance money?
– The Commonwealth is to receive the insurance money paid upon the loss of the Ferndale. With reference to the settlement generally, I cannot give any information until the negotiations have been completed, but no time will be lost in giving the information when it is available.
– Will the Minister for the Interior lay on the table the papers relating to action taken by the administration in connexion with the settlersWest and Walker, at Katherine and Birdum, whose land the Government has taken possession of and sold?
– I shall give the matter consideration.
– Has the attention of the Prime Minister been drawn to a paragraph in this morning’s press in which it is stated that Mr. Hartigan, the Chief Railways Commissioner of New South Wales, said before the Millions Club yesterday that he deeply regretted the dismissal of 1,400 men, and that further dismissals would take place? If so, will the Prime Minister use his influence with Mr. Stevens, the Premier of New South Wales, to prevent further dismissals from the State railway service ?
– This Government will not interfere with the administration of a State Government, but I suggest that the honorable member himself, being a resident of New South Wales, if he feels that he has a case to submit, might bring his influence to bear upon the Premier of that. State.
– I have received from the honorable member for Gwydir (Mr. Abbott) an intimation that he desires to move the adjournment of the House this morning to discuss a definite matter of urgent public importance, namely, “ The serious position of the wool industry of the Commonwealth.”
Five honorable members having risen in support of the motion,
– I wish at the outset to say that I move this motion, not in any hostile spirit, but with the desire to bring under the notice of the House the serious position of Australia’s greatest and most important industry. It is customary to apologize for taking up the time of the House in the discussion of motions such as this, but I am sure that honorable members will not resent having to give consideration for two hours to the serious position of wool growing, an industry which has probably played the chief part in the development and populating of this eountry, and in making it what it is to-day. For over 100 years the wool-growers have pioneered in lonely places, and have been the first settlers in what are now prosperous districts. No doubt Australia’s yield of gold contributed largely to her progress; but the value of our exports of wool has been almost three times that of our exports of gold. According to the Commonwealth Statistician, the gold exported from Australia from 1850 to 1932 was valued at £640,353,000, but the value of the wool produced during the same period was £1,846,915,000, which is a great deal more than the present national debt of Australia, and justifies the appellation which has been applied to us of the “ land of the Golden Fleece.” Of the primary industries of Australia, wool growing alone has up to the present stood absolutely on its own feet. It has kept going for over 100 years without Government assistance of any kind. The industry has sold its products on the markets of the world ; it has never asked for the fixation of internal prices; it has increased the yield of the sheep, and is still increasing its production to try to compensate in a small degree for the tremendous fall in the price of wool that has occurred during the last, four years. During that time the woolgrowers throughout the Commonwealth have been producing their wool at a loss. Taking exchange into consideration, the average price that we have been receiving for our wool has been a little over 8d. per lb., and the bedrock cost of production is now about10d. per lb. The difference of 2d. per lb. represents costs over which the woolgrowershave no control whatever. In the past four years, the wool-growers have reduced the costs of production inside their paddock fences by about1d. per lb. of wool sold. I think that the present Government has realized the straits of the industry, but I warn it that unless prompt action is taken the result may be a dire catastrophe. In the last two days, the adjournment of the House has twice been moved to discuss matters of urgency, one of these being the relief of ohe unemployed, and the other the treatment of old-age pensioners, two problems which have arisen out of the difficult financial position of this country. I believe that the hardships which were then referred to cannot be lightened, or the existing difficulties relieved, until the great wool industry is again upon a sound basis. Therefore I urge the Government to expedite the solution of its problems, because time is of the essence of the contract. During the last four years there has been a remarkable run of good seasons, but under the law of averages dry times must be expected, and, in the case of New South Wales aud Queensland, three months of dry weather now would entirely change the whole position of our pastoral properties. There have been good rains in those States, but not general rains. The showers have fallen over scattered areas, and with a dry spell the position of the pastoral industry could easily become serious. At present Australia is greatly overstocked with sheep. There has been no market for old sheep, wool-growers have had to stock their lands beyond the limit of safety, and in addition, the country is menaced with the greatest invasion of rabbits known for year3. A great deal of the areas on which these sheep are carried is deteriorating. The men on the land are unable to keep up their improvements because of lack of funds, and nature is taking back the lands won from her. Life on the land is a ceaseless war against overgrowing timber, pests and noxious weeds, and any lessening of the effort means inferior country. In Australia at present, there are no fewer than 110,000,000 sheep, whereas in 1921. the number was 86,000,000. The flocks are not by any means held by large land-holders. According to the report of the committee which recently reported on the wool industry, there are SO. 000 flocks in Australia. Of these, 50.000 flocks consist of less than 500 sheep, 1(3,000 under 1,000 sheep, 10.000 under 2,000 sheep, 7,000 under 5,000 sheep, making a total of 83.000 flocks each consisting of 5,000 sheep and under, out of a total of 89,000 flocks. Those figures show that a great many small men are struggling to obtain a livelihood in this industry. The committee warned the Government of the acuteness of the position. In its report it said that a general collapse must result unless the position of the industry could be relieved. It also said that those engaged in the. industry should not be discouraged by the continuance of the heavy burdens that they are asked, to carry. The burden that is being carried by the wool-growers of Australia to-day is too heavy for their to bear on their own shoulders. The industry has been carried on in these last years by the private efforts of the men and women engaged in it, and at the supreme cost of mortgaging their future.
Let me briefly give the House some particulars of the burden that these people are carrying. I have taken Queensland figures, because I consider that the cost of production there is low, and certainly lower than in New South Wales. In Queensland the average grower has not the heavy burden of capital expenditure in the purchase of freehold land. In a report presented to the Queensland Government as long ago as 1927, which I understand was prepared by Mr. W. L. Payne, who was a member of the Wool Committee appointed by this Government, a table of production costs is given for the twelve months ending 1911, and the twelve months ending 1925. The production costs were 5.39d. per lb. in 1911, and 12.43d. per lb. in 1925, an increase of 7.04d. per lb. In 1911, although the price was S.71d. per lb., the return to the grower was 3.32d. per lb., and, in 1925, when the price was 15.26d. per lb., the return to the grower was 2.83d. per lb. Honorable members can realize from, those figures how dismal is the present position of the growers. In the report of the Queensland Department for Public Lands, for 1929, it was stated that for every 90s. of gross profit received by the grazier, he himself received 20s., Federal and State taxation absorbed 18s., and payments to workers and others associated with the industry absorbed 52s. It was also pointed out that the debts carried by the Queensland graziers ranged from 10s. to £2 10s. per sheep, and that on grazing farms the interest burden amounted to at least 2s. 3d. per sheep. These costs have now increased, and the return to the grazier would not be a great deal more than 5s. or 6s. per head of sheep.
The Minister for Commerce (Mr. Stewart) convened a conference of woolgrowers and others in Sydney on the 9th January last. In his address he said-
The third conclusion is that to ensure our economic stability both at home and abroad, it is essential that all organizations and persons associated with the wool industry should co-operate and strive to ensure that the volume of production should continue at its present high level. Our seasonal good fortune may not continue, and every incentive must be given to continued or even increased production on the part of the Australian wool-grower
That is an excellent suggestion, and I hope that the Government will give it every consideration. The wool committee met on the 17th August of last year, and delivered its report on the 26th October. It warned the Government that there was need for urgent and immediate action. The Minister for Commerce called a conference upon the 8th January last, and the points brought forward there were deferred for consideration at the Premiers Conference which met early in February; but with the exception of a reduction of land tax by one-third, no relief has been given to the wool industry. It is necessary to reduce land taxation, but any relief in that direction would . apply only to a certain number of graziers. After all, the total amount collected in land tax is about £2,500,000 ; therefore a reduction of one-third would not be a very great concession. At the same time, I appreciate the action and courage of the Government in reducing the tax. It has been urged that the Government should adopt schemes of stabilization and price fixation in order to assist the “wool industry. While prices ruling in other primary industries have fallen below pre-war level, those ruling in the wool industry, including exchange, have reverted to the level at which they have always been maintaine’d dur-ing the history of the wool industry, except during the war years. I do not think that even the best men who have considered the stabilization of, wool prices - ;men like Sir John Higgins and others - have ever thought of- a price in, excess of 8d. per lb., That price we are already, obtaining for our wool, and, in my opinion, Australian wool-growers are not likely to receive more for quite a lengthy period. Notwithstanding that, of all commodities, wool is, perhaps, the most keenly sought by the people of every nation ; the world’s purchasing power has diminished, and we cannot hope for a rise in wool prices. Although Australia is a big producer of wool, I cannot see how we in this country can influence the price of that commodity. Possibly something could be done if there were perfect co-ordination between the woolproducing countries of the world but, as honorable members know, both South Africa and New Zealand are not in favour of price fixation. I do not think that we in Australia can fix a price above what the world is prepared to pay. France is the biggest purchaser of wool, followed by Great Britain, Japan and Germany, in that order.
Since we cannot hope to alter wool prices in the world’s markets, we must tackle the question of internal costs. A gap of 2d. per lb. must be bridged. There is a great chance of stabilizing this greatest of our primary industries, if only we tackle courageously the question of internal costs. These costs are not within the control of the graziers themselves.. Inside their own paddock fences, as I have said, they have reduced costs to the extent of, probably, Id. per lb. of wool; but still there is a gap of 2d. per lb. to be bridged, representing costs under the headings of tariff, taxation, transport and interest. These are matters in which governments’ are concerned.
Let me deal first with the subject of interest, which is one of the biggest factors of the internal cost. I am convinced that the majority of the graziers of Aus-, tralia- are unable to meet their commitments. They incurred indebtedness at times when prices were high and land expensive, but since then, prices have fallen considerably, and now they cannot pay their way. For the majority of’ the men on the land the interest rate on advances is about 6 per cent. With a full sense of responsibility I now say from my place in this House, that between 70 per cent, and 80 per cent, of the graziers of Australia cannot .continue to stagger under the burden of interest, taxes and other costs which they are called upon to bear.
Transport charges make a heavy toll on every grazier’s wool receipts; for instance, the Railways Department of New South Wales takes over 50 per cent, of the gross proceeds of every truck of sheep sent to the seaboard from the Moree district.
– The honorable member should speak to Mr. Bruxner about that.
– Transport is not only the carriage of live-stock and wool within the Commonwealth ; there is also transport overseas, and to that extent, at least, transport is a federal concern. At the moment I am concerned with the interest burden, which is the chief difficulty which the graziers have to face. In urging that this matter be seriously considered, I do not suggest anything in the nature of repudiation: but it is well that this National Parliament should know the facts, and face them. It is clear from the Wool Committee’s report, and from other sources, that those engaged in this important, industry cannot carry on much longer under present conditions. I estimate that the advances that have been made to graziers by various financial institutions total £150,000,000. It is imperative that an industry in which so much capital has been invested be placed on a stable basis, and for that reason it is the duty of the Government to consider the vital question of interest. I do not urge that arbitrary action be taken; but I suggest that much may be done by negotiation. These difficulties cannot be surmounted on the floor of this House, or in conferences; they are too big to be dealt with in that way. I suggest that six men who thoroughly understand the pastoral industry, be appointed to represent that industry in negotiations with the representatives of the banks and financial institutions of this country, in an endeavour to come to an agreement by which interest rates can be reduced and the burden on the graziers eased. In stressing the necessity for doing something to relieve those who are engaged in this great industry, I assure the Government and the House that I have not exaggerated the seriousness of the position. There are many things that
I do not know; but I claim to know the wool industry from top to bottom. I am of the third generation of a family of wool-growers in Australia, and I also know the position of those among my constituents who are engaged in the industry.
– The honorable member’s time has expired.
.- In rising to support the motion which has been moved by the honorable member for Gwydir (Mr. Abbott), I desire to impress on the House the serious condition of the wool industry. As the honorable member for Gwydir has stated, the world fall in price levels is responsible for that condition. I agree with him that we in Australia have very little chance of controlling the price of wool or other commodities in the world’s markets, and that we are not likely to receive more than 8d. per lb. for our wool for many years to come. That price is much lower than was received for our wool some years ago. In 1925-26 the average price of Australian wool was about 18d. per lb. The high prices then received induced pastoralists and others to develop - perhaps to over-develop^- - their holdings, and to incur liabilities which now are causing them embarrass- ment. Since there is little prospect of affecting external prices, it behoves us to do our best to reduce internal costs.
That the Federal Government is aware of the serious position of this industry is shown by its appointment of a committee to investigate the industry with a view to making recommendations as to the best means of assisting it. That committee’s report, which is now in the hands of the ‘ Government, deals exhaustively with various phases of the industry, and contains recommendations, some of which can be given effect. The committee has dealt with the four chief items of cost - the tariff, taxation, transport and interest. In this House a debate on the tariff has been inaugurated, and, consequently, I do not wish at this stage to deal with the effect of the tariff on the wool industry, except to say that, during the last decade, high duties have undoubtedly increased the cost of the materials and articles which are used by those engaged in the wool industry. It should be the aim of the Government to reduce those costs by lowering the duties on the items concerned. Fencing wire is still used in large quantities by sheep-growers. It may be contended that the fencing of paddocks is a capital expenditure, and that fencing wire is not a commodity that is consumed ; but every month large quantities of this material are needed either for new fences or for repairs. Fencing wire has increased in cost by 108 per cent, since 1914, and I suggest, therefore, that it is an article the duty on which might well be investigated with a view to giving some relief to the users of wire. Although the duty on fencing wire is not high, it is a factor in keeping up costs.
The subject of transport is not primarily one for attention by the Federal Government, but it may interest honorable members if I place before them a few figures to show how railway freights have increased during recent years. Since 1914 railway freights on wool have increased by 44 per cent, in New South Wales. The percentage increase in Queensland is 54, in Victoria 51, in South Australia 50, and in Western Australia 5. The lower rate of increase in Western Australia is due to a recent reduction of 30 per cent, made by the State Government in order to assist the industry. I suggest that the example set. by the Government of Western Australia is worthy of emulation by the other State governments.
A substantial proportion of the costs incurred by pastoralists is represented by interest charges. The Wool Committee’s report sets down that cost as from £d. to Id. per lb. of wool produced for every 1 per cent, of interest paid on overdrafts and mortgages. On that basis, it is clear that a reduction of interest rates would be most acceptable to the wool-growers. I am aware that the’ items which I have mentioned are, in themselves, small; but we cannot afford to overlook any item which might assist to bridge the existing gap between costs and selling prices. A reduction of 1 per cent. in. interest charges means approximately fd. on every lb. of wool produced. This is a matter which, together with the other items mentioned by the honorable member for Gwydir, should be considered by the Federal Government. The super tax on incomes from property seriously increases the interest burden, and it should be possible for this Government to make remissions of that tax at least on incomes received by way of interest on overdrafts or mortgages with respect to pastoral or agricultural holdings. I put that suggestion forward believing that it could be adopted, and I urge the Government to consider it.
The subject of marketing has been of great concern to many of us, and suggestions have frequently emanated from various sections and individuals, some of whom have had undoubted experience in the marketing of wool ; but I say definitely that the industry does not require the artificial fixation of prices. We have had the examples of the results of the operation of this principle in regard to other industries from time to time, and I have yet to learn of one instance in which a scheme, having as its basis the artificial fixation of prices, has been permanently successful. While some of these schemes have had .beneficial effects temporarily, they have ultimately proved to be a failure, and have acted detrimentally to the interests of the industry proposed to be assisted. I suggest that at the present time Australia has the best system for the marketing of wool that obtains in any part of the world. Even in these depressed times, this system has proved efficaceous in enabling the wool clip to be disposed of. During the last four years, the quality of the wool grown in Australia has been above the average. It has been disposed of, and the wool has gone into consumption, though not, at prices satisfactory to the grower.
– The honorable member’s time ha3 expired.
.- The honorable member for Gwydir (Mr. Abbott) has initiated a discussion upon the position of a most important industry, which aU honorable members realize is now in a parlous condition. I think that he did well to stress the fact that the heaviest burden that the industry is bearing to-day is that of interest, the rates of which are very high. It is true that he laid emphasis on a number of other disabilities of the industry, but that is undoubtedly the heaviest burden. In the course of its report, the Commonwealth Wool Inquiry Committee states -
Many small growers have heavy interest burdens amounting to as ninny pence per pound of wool us the figures per cent, of interest they pay. Interest at 0$ per cent, may cost them (id. per 11). of wool. -
Considering that the price they are receiving for their wool is about Sd. per lb., one realizes what a staggering burden interest charges represent. The last speaker pointed out that at present values, interest at 1 per cent, would average id. per lb. of wool. The committee says that-
Interest rates have fallen very slowly - and reluctantly - in Australia.
That is very true. It is suggested by the honorable member for Gwydir that consultations between the representatives of the wool growers aud of the financial institutions could meet the position ; but in my opinion, that would not contribute to any great extent to the solution of the problem.
– There must also be a reduction of taxation.
– I shall say something about that. The Commonwealth Government and the governments of the six States together discussed the subject of interest before the Premiers plan was adopted. We were not then content to propose merely the cutting down of the interest rates on government stock; we insisted that the reduction of interest should apply generally. But the general reduction of interest could be brought about only by State legislation. Some of the States have done more in this regard than others, which have been most reluctant to take action ; yet none has gone to the lengths necessary to relieve the people from the great burden of high interest rates on mortgages. I suggest to the Minister in charge of the House that the present Commonwealth Government should lake this matter up again with the State authorities, with a view to the passing of uniform legislation for the reduction of interest rates on mortgages, to keep in touch with the progressive^ decline in values. Already there have been considerable reductions of the bank deposit rates of interest.
The honorable member for Gwydir (Mr. Abbott) states that the .wool-growers are groaning to-day under an interest load of over 6 per cent., which, I think is an absolute scandal, having regard to the bank interest rate. But we shall not make any progress in this matter merely by negotiation with the banks and other financial institutions. In another part of its report, the Wool Committee states -
In 1910, the pre-war value of a typical improved freehold property was £3 5s. per sheep area. If stock and plant be added, a reasonable value at that time would be £3 15s. per sheep area. At S lb. of wool per sheep and 5 per cent, interest, this ‘capital required 5£d. per lb. of wool to cover interest.
Those figures are fairly conservative, because we know that laud values have risen considerably in comparison with pre-war prices. One of the difficulties of the pastoral industry is overcapitalization, and the excessive values which have been placed on land. This is a fact that should be specially stressed.
– The interest rates spoken of by the honorable member for Gwydir are charged on leaseholds.
– But they are based on the value of stock, plant, and so on. Even on pre-war figures, the interest represents o-Jd. per lb. of wool.
Much has been made of the relief which this Government is said to have given by the reduction of the land tax. While I objected to that reduction, I did not oppose the giving of consideration to those who could be shown to be losing money upon the land. There was no justification at, all for the reduction of the tax on city properties, and the big institutions which benefited by it are still paying high dividends. Relief should, however, be given generously in cases of hardship, where no profit is being made, hut concessions ought not to be made to wealthy land-owners or to institutions which are paying high dividends. The relief given to the pastoral industry by the reduction of land tax has been much exaggerated. Figures are quoted to show that land tax represents 2s. 6d. a sheep; but the report of the committee shows that there are 108.000,000 shee” in Australia, of which only 45.000,000, or 41 per cent., are on land subject to taxation. The total tax levied on these areas amounts to £650,000, ranging from Id. to 2s. 6d. per sheep, if we take £4 per sheep area, which would be very much higher than the pre-war unimproved value, and an exaggerated figure, 2s. 6d. in land tax would represent 7-^d. in the £1. But the federal land tax rate does not reach 6d. in the £1 until the unimproved value of the land upon which it is levied has risen to £75,000. Thousands of wool-growers pay no federal land tax, and therefore receive no benefit from the reduction of the tax. It would be much better if benefits were given in some direct way to the wool- growers, instead of reducing land taxation, and thus making a present to wealthy city land-holders.
– I received an answer from the Government that the relief on the cost of wool was less than id. in the lb.
– The total tax paid by the wool areas was £650,000. A levy of that amount on 996,000,000 lb. of wool would average less than £d. per lb. on the whole clip. But 60 per cent, of the area on which wool is grown is not taxed. Stress has been laid on the burden imposed upon the industry by the tariff, which this report says costs approximately 2d. per lb. over the whole area. I do not accept that figure, but I cannot discuss it now. The report shows that 2d. per lb. is the tariff cost,, but exchange gives a subsidy of 4d. per lb.
– Exchange is less than 2d. per lb.
– In the difference between the Australian pound and sterling there is a benefit of 2d., and there is a benefit of 2d. more in the difference between sterling and gold. A matter to which the report of the committee draws attention is that the wool-selling houses should have been enabled to reduce their handling charges to the growers much more than they have done, owing to the reduction of wages. These charges have not been reduced to any appreciable extent. In some cases the reduction has been 5 per cent., and in others up to 10 per cent. Mr. Grayndler, who furnished a minority report, mentioned that one witness pointed out that assuming sheep cut 3 bales to the 100, 29s. 3d. per 100 was paid to the shearer. But the handling charges amount to 38s., so it costs more to sell the wool than to shear it.
– I do not propose to take up much time at this stage, but it is refreshing to hear keen advocacy from the corner party of the reduction of interest rates. A couple of years ago it would have been regarded as a violation of the sanctity of the financial relations between lenders and borrowers to talk in that strain, but to-day there has been a great change, and now in the most conservative quarters there is a demand that this problem should be tackled earnestly. The unfortunate feature of the whole matter is that many pastoralists have already suffered severely for the last two and a half years, whereas if those who now advocate the reduction in interest rates had previously seen the position in the proper light a number of these pastoralists would probably not have been in the predicament in which- they now find themselves. They have gone down, and their future is black. The longer this problem remains unsolved the greater the number that will go to the wall. The mover of this motion gave interesting data in connexion with the wool industry. The facts are well known to the men engaged in it, and the reiteration of them will not satisfy them. They demand action, and they have reached a stage at which they have lost entire confidence in the men who have been in the forefront as the alleged representatives of the graziers. Take the northwest wool committee organization which has recently been very active in this matter. It has spread its activities into the electorate of the honorable member for Darling Downs (Sir Littleton Groom). The growers have reached a point where they are sick and tired of conferences, and this eternal wrangling over the subject. As a matter of fact, they have expressed themselves in the strongest terms against the Wool Inquiry Committee set up by the Commonwealth Government. Resolutions have been carried stating that they anticipate no useful results from the inquiry, because the majority of those comprising the committee are interested in international combines engaged in the disposal of wool, and in banking and other financial institutions. These members of the committee pretend to be serving the interests of the graziers, but are actually more concerned with those of ,the banking and financial institutions which have forced the graziers into their present position. We must get rid of hypocrisy of this form. Honorable members opposite must not think they have a monopoly of sympathy with the graziers. Most of us on this side of the House have friends engaged in primary production, and we are just as concerned about the stabilization of the wool industry as any one else could be. We are mindful of the fact that the success of the industrial movement depends upon equal success .being attained by the primary industries. We are, therefore, willing to help those industries in every way possible.
-The section which the honorable member has been quoting does not represent the industry.
– The New South Wales Graziers Association has a membership of over 8,000, and the .executive of this body includes everything from directors of big financial companies to shearing contractors, &c, and in many cases a vote is not taken for their election or on any important matter, but they blandly state what, they consider the graziers want. There are over 30,000 graziers in New South Wales alone, and the executive can not speak for the graziers as a whole. Therefore, why not take a referendum of all the graziers on the stabilization issue?
– The resolutions referred to by the honorable member come from a biased source.
– They come from the heart of the honorable member’s own electorate.
– Yes, that is why I know all about it.
– It is evident that the graziers are not satisfied with what is being done. These’ gentlemen, Messrs. Wardell, Allen, Tout, and Manchee, who are such active members of the Wool Inquiry Committee, do not represent the graziers in the same way as does the North-West Wool Committee. If the graziers’ representatives in parliament are not prepared to fight -their battle for them, they themselves are prepared to take action, even to the extent of withholding’ .supplies, ‘because they a-re. in a desperate position. Their leaders have failed them. The men to whom I have referred have had every opportunity of doing something for the industry. Instead of that, they have contented themselves with talking about what has been done in the past. We must face the position as it exists to-day. The woolgrowers must have markets, and there is no local market for the wool, because the* people of Australia have no purchasing power. Even those on relief work are unable to help the graziers, because the amount they receive is only sufficient for sustenance, and leaves nothing over with which to buy clothes. If the workers had their purchasing power restored to them, they would be able to help the graziers by purchasing supplies of woollen clothing. Nothing can ‘be achieved hy holding conferences and talking about the matter. The people all over Australia are tired of such proceedings. To-day it is impossible to arouse any enthusiasm among the people for parliaments or conferences. I admit that the same lack of enthusiasm exists in Labour circles. Every one is inclined to scoff when one speaks of Parliament.
– The honorable member’s time has expired.
– I wish to address myself to one aspect of the subject, namely, that of interest rates, and the practicability of obtaining money at a lower rate of interest on the security of land used for agricultural and pastoral purposes. Interest rates on mortgages have been reduced by State legislation in accordance with the Premiers plan. In Victoria, when the term of the mortgage expired, and the mortgagee would normally have been free to make a fresh contract or invest his money elsewhere, he has been compelled to extend the term of the mortgage. These are temporary expedients, and the same problem will arise again when the extended period expires. When a mortgagee is free to invest his money elsewhere, and believes that he can make a better bargain :by putting it into some other form of security, the man on the land may not- be able to obtain money at . all. It is possible for legislatures to fix the rate .of interest, ‘but it is a different matter for the man on the land to obtain money at a given, rate.
There is one certain means, and one only, of making money available to primary producers at rates closely approximating those payable on gilt-edged securities, and that is to remove, or substantially diminish, the disparity between the taxation on the income derived from bonds, and that on income derived from mortgages on broad acres. On 12th October last, I submitted in this House a table, showing how great was that disparity in taxation. Bonds are the investor’s measuring stick. If he holds government bonds bearing the rate of interest of 4 per cent., he pays only one tax - the ordinary federal income tax. If he holds mortgages instead of bonds, he pays five taxes instead of one, namely, the ordinary federal income tax, the federal super tax of 2s. in the fi, the ordinary State income tax, and, in Vie. toria ar any rate, a special State income tax, and on top of that the State unemployment tax. A man with an income of £2,000 a year can obtain in actual income from 4 per cent, government bonds slightly more than 3-i per cent, after paying income tax; but he must receive 5? per cent, or 6 per cent, on money lent on mortgage to be as well off. The difference in the interest return is swallowed up in the greater taxation on mortgages as compared with that on bonds. Until this disparity in taxation is removed or reduced, the difference between interest rates on bonds and on mortgages must obtain.
If we are to bring the rates closer together, it must be done either by increasing the taxation on income from bonds or by reducing it on the other form of income. We can dismiss at once the possibility of increasing taxation on income from bonds; even if the honorable member for West Sydney (Mr. Beasley) were Prime Minister, with all the supporters he wished, he could not increase taxation on income from bonds, because, apart from the prospectus issued when the conversion loan was before the public, this taxation cannot be increased without the consent of the seven governments of Australia. The arrangement is similar to the financial agreement. Probably there is no form of investment so safeguarded from increase in taxation as investment in Commonwealth bonds. We must, therefore, turn our attention to t]ie second alternative, that of reducing taxation on forms of investment other than government bonds. In October last, I submitted that, in regard to income obtained from money lent on land used for agricultural or pastoral purposes, the Commonwealth Government should immediately abolish the special tax of 2s. in the £1, and that it should confer with the State governments with the object of reducing very substantially the remaining income tax, Commonwealth and State, provided the rate of interest charged on the mortgage was not more than a certain agreed-upon amount. I believe that money could be freely obtained at 4 per cent, if the rate of taxation were no greater than that on income obtained from bonds. I know that revenue considerations come into the matter, but what is the use of attempting to increase revenue from one source while destroying an industry which should be another substantial source of revenue.
I hope that the Minister and the Government will give some consideration to this matter. We read in the press recently that one great insurance company had made an offer to the Government to lend money on land at 4 per cent, if the income so obtained were freed from taxation. I do not suggest that no taxation should be levied, but I do suggest that if money were made available at from 4 per cent, to 4i per cent, the Government should abolish the 2s. in the £1 super tax on income so obtained and that it should confer with the States with a view to having other forms of taxation also reduced. This would, I believe, almost immediately have the effect of bringing about a reduction of interest on mortgages, until the rate of interest very nearly approximated thatpayable on gilt-edged securities.
.- An examination of the causes of the existing depression will show that these are twofold. In the first place, Australia is suffering by the cessation of borrowing and the introduction of loan money and, secondly, from the disastrous fall in the world’s prices of its primary products. It is obvious, therefore, that if the country is to recover, special attention must be directed to the improvement of the position of our primary producers. The continuance of overseas borrowing to-day on the scale of a few years ago is neither possible nor desirable. The prices of our surplus primary products are governed by the competition in the markets of the world, and as nothing can be done by us to increase them, the only course available is so to reduce costs in our primary industries as to enable those engaged in them to carry on at a profit. On this point the wool committee, on page 2 of its report, makes the following comment : -
Excluding thu monetary gold exported as not representing production, the value of all exports except wool fell in the four years from f72.0OO.00O gold to £(15.000,000 Australian. While wool fell £34,000,000, all other exports full £7,000,000. The crisis in wool is, therefore, a prime cause of the economic depression prevailing throughout Australia to-day.
These comments emphasize the importance of the subject, and point the urgent need for governments to remove, as early as possible, the burden of taxation and other charges from the backs of those engaged in pastoral pursuits. Until recent years, our governments and people did not appreciate fully the advantages that accrue to this country from the production of wool. Although it has been said that Australia rides on the sheep’s back it is only now coming to be realized that the burden imposed on the sheep has become too heavy to be carried. The wool-growers, however^ have a traditional horror of becoming mendicants for government favours. They will not surrender their independence, nor yield to the demoralizing influences which have caused some other sections of industry to seek government assistance Even now, when the situation is so bad, I doubt that there is any concerted move on the part of our wool-growers to look for government relief in the form of subsidies, and in any event, assistance in such a form is impossible, because, of the immensity of the operations of the industry. Their policy, therefore, is to endeavour to bring about its rehabilitation by urging the Government to reduce the tariff and other charges that have been laid upon it. These burdens include heavy general taxation in the way of high interest on mortgages, high customs duties on the requirements of the primary producer, and the awards of the Arbitration Court. But what is, possibly, the greatest of all these burdens is the interest rates. The taxation burden is associated with the financial position, of governments, which need revenue, but it should be possible for this Parliament to give real assistance to the wool industry by supporting a move for the reduction of tariffs. According to the wool committee, the existing tariff charges represent 18 per cent, of production costs in primary industries. Whether or not thi3 view is acceptable to honorable members, it cannot be disputed that the pastoral industry gets only world’s parity in the disposal of its surplus products, and that those engaged in it are at a disadvantage in that they are obliged to purchase all their requirements in the highly protected local market.
I am not one of those who believe in a wholesale scaling down of tariffs by the arbitrary act of either Ministers or governments. Such action would very seriously disorganize the community. But I consider that the first act of this Government should have been to refer to the Tariff Board the duties on those items which so seriously increase costs in our primary industries, and the board’s reports should have been presented to this House, as early as possible, for the consideration of honorable members.
The honorable member for Gippsland (Mr. Paterson) this morning directed attention to the burden of interest, and emphasized the unfair incidence of taxation on government bonds as distinct from mortgages or other forms of investment. If I remember aright, the difference between taxation on interest received from a Commonwealth 4 per cent, bond, and income from other forms of property, including mortgages, is so great as to render it impossible for mortgage rates to be lowered without loss to the investor. For example, a 4 per cent. bond,, under existing taxation charges, returns to the investor 3.75 per cent. whereas the nut return from a mortgage for . which interest is charged at 5 per cent, is only about 3.69 per cent., that is, less than the .net return from an investment in Commonwealth bonds.
– That is the return from an investment bringing in £1,000 per annum. The position becomes worse with larger amounts.
– I understand that to be so. The return from a 6 per cent. mortgage, in similar circumstances, is actually only 4.48 per cent. These figures show definitely that there can be no real reduction in interest rates on mortgages, unless some portion of this taxation is reduced. . The right honorable the Leader of the Opposition (Mr. Scullin) suggested that relief from high interest rates might be given to our primary producersby government intervention. That would be a decidedly risky way of tackling the problem. The two foundation stones underlying our economic system are security of property and sanctity of contract. If either is damaged in any way the welfare of the nation must be imperilled. Any attempt to interfere with the sanctity of contract, and any action which would diminish the value of the security, must -tend to raise interest rates still higher. Therefore, I cannot endorse any proposal to bring down interest rates by governmental action. The proper, and the only safe course, is to remove those charges which, as the honorable member for Gippsland (Mr. Paterson) showed this morning, are responsible for high interest rates on property income other than that invested in government stock. Other factors which are responsible in part for the relatively higher costs of production in primary industries, such as railway freight charges, warehousing and overseas transport charges, are largely within the control of the State Governments and of private interests; but even in respect of some of these charges. Unduly high tariffs play their part. I suggest that this Government should get in close touch with State Governments and the different interests concerned, with a view to bringing down all - those charges which are bearing so heavily upon the industry.
– The honorable member’s time has expired.
.- I regret that in the limited time at my disposal it will be impossible for me to deal in any detail with, the various phases of the wool industry, which was the subject of a report recently by a committee appointed by the Government. Members of the Country party, and members of the party to which I belong, believe that the Government should give relief tothe industry on the lines suggested by that committee. High interest rates play an important part in production costs. The average rate is about 5 per cent. No person engaged in the wool industry can carry on profitably under such a burden. The honorable member for West Sydney (Mr. Beasley) has told us that the committee was not representative of the small wool-growers, who really control the majorityof the flocks in this country. The statistics of the industry show that 50,749 wool-growers have flocks of 500 and under, and a total of over 9,660,000 sheep ; 16,361 growers have flocks of over 500 and under 1,000, and control 11,473,000 sheep; 10,896 have flocks of 1,000 and under 2,000, and control 15,17 0,000 sheep; 7,260 have flocks of 2,000 and under 5,000, and a total of 22,042,000 sheep; 2,265 have flocks of 5,000 and under 10,000, and control 15,575,000 sheep. 1,056 have flocks of 10,000 and under 20,000. and a total of 14,584,000 sheep. 376 have flocks of 20,000 and under 50,000, and control 10,959,000 sheep. There are only 54 owners of flocks above 50,000, and they control only 3,924,000 sheep. These figures indicate clearly that the smaller graziers had practically no representation on the committee appointed by the Government.
– Mr. Cole was their representative.
-I direct the honorable member’s attention to a report, which appeared in the Queensland Grazier of the 16th February, of the discussion at a meeting of the Queensland graziers, representing over 250,000 sheep. The report of the Wool Committee was fully discussed at that meeting, and the committee’s constitution was severely criticized on the ground that the big wool-growers had all the representation, to the detriment of the smaller men. The committee should have beenconstituted on lines similar to those of the committee of inquiry which sat in Queensland recently. Mr. Payne and Mr. Melville, who made the investigation, obtained valuable evidence from the smaller growers in that State. They suggested means by which the Government could help the pastoral industry. Those who have stated the case for the wool-grower have urged that the cost of production must be reduced and that therefore wages must be lowered. They ignore the fact that wages in this industry have already fallen over 30 per cent. A similar howl is not raised against the banking and financial institutions. We have only to study the Pastoral Review to learn how prosperous are the balancesheets of the companies that are handling the wool produced by the pastoralists. The agitation against wages reminds me of a man who was out shooting with an aboriginal. They shot a turkey and a crow. The white man said, “I take the turkey and you take the crow. Or, if you prefer, you take the crow, and I take the turkey”. The nigger replied, “Boss, I get crow all time”. It seems to me that the banks and financial institutions are passing the crow to the worker and the wool-grower all the time. But those who are the protagonists of the pastoral industry are not game to fight its greatest enemies. Amongst them is the shipping combine. An outcry is raised against the freights charged on the railways. I admit that if the present freights were fair during the period of high prices, they should be reduced now in proportion to the decline in wool values. But that contention applies also to the charges made by private shipping companies.
– The Labour Government in Queensland increased the railway freights on wool recently.
– That is so, but whereas in New South Wales the minimum charge is for carriage over 300 miles, in Queensland the minimum charge, although slightly higher, is for carriage over 400 miles. If the two sets of rates are compared, they will be found to be not greater in Queensland than in New South Wales in which a Nationalist Government rules. Mr. Clark, who was a member of the wool committee, does not seem to have urged a reduction in shipping charges, although in 1931 he drew the attention of the Government to the freights charged by the shipping companies. Those burdened will not be lightened by a mere motion for the adjournment of the House. This Parliament should compel the private banks to reduce the interest rate. The Government can control the position through the Commonwealth Bank. It has a majority in both Houses, and if it really desired to assist the pastoral industry it could do something effective within the next 24 hours to reduce interest charges.
– Order ! The honorable member’s time has expired.
– I regret that this matter has been raised this morning only because in another part of the building a special conference relating to another important rural industry is now in session. My regret is, however, tempered by the fact that this synchronization of the two discussions has enabled the Government to indicate its real concern for the wool industry, because, despite the importance of this morning’s conference, the Prime Minister (Mr. Lyons) asked me to remain in the chamber during this discussion. Ordinarily, a motion for the adjournment of the House necessitates a defensive reply by the Minister concerned. But no such reply to the statements of the honorable member for Gwydir (Mr. Abbott) is required. On such motions we are accustomed to listen to unreasoning propaganda, but I am glad to be able to compliment the honorable member for Gwydir upon his temperate statement of his case. The Government does not need to be convinced of the importance of the wool industry to the national economy. The Wool Committee correctly stated that the crisis in wool is the prime cause of the economic depression in Australia. A study of Commonwealth statistics impresses upon us the real importance of the wool industry to Commonwealth trade and finance. In 1.927-28, the export of wool was valued at £66,000,000, and represented 47 per cent. of the total exports of the Commonwealth. In 1930-31 and in 1931-32, owing to the serious decline in prices, the aggregate value had declined to £32,000,000 in each year, but the proportion of the wool export to the total export trade was 33 per cent, in the former year, and 35 per cent, last year. Those figures indicate what a serious position would he created by any action or inaction which menaced the ascendancy of the wool industry. The present Commonwealth Government has given tangible evidence of its interest in and concern for the wool industry. Within a few mouths of its accession to office, it complied with a request for the appointment of a Commonwealth Wool Committee, and that body made a valuable study of the industry. Its report was forwarded to the Government in October last, and its outstanding conclusion, as has been emphasized this morning, is that we need not expect a rise in prices, but should concentrate on a reduction in the cost of production. The committee recommended that a conference of the parties interested in the extraneous costs of wool production - those which are incurred after the wool leaves the station - should be convened. Such a conference was convened, and despite the attempt to belittle it this morning^ I, as the Minister who presided over it, can testify that it was a responsible and representative gathering. Regret has been expressed that something more tangible towards the reduction of production costs did not issue from the conference, but the fruits of the discussion have not yet been gathered ; the negotiations and deliberations are continuing. The Wool Committee, in its report, categorically set down twelve items of cost which, it considered, should be investigated. Of those, only five directly concern the Commonwealth Government. The first of these was rail freights. The Commonwealth controls railway freights in only a minor degree, but has already arranged for a substantial reduction of the freights on wool over the Commonwealth system. It has also urged the State authorities to do likewise. Doubtless, honorable members will say that it is easy for the Commonwealth to mako concessions on its two-penny halfpenny system and expect the States to follow suit, but the Commonwealth Government was responsible for arranging an interview between members of the Wool Committee and the State Premiers after the last meeting of the Loan Council in Melbourne. As a result of that discussion, promises of sympathetic consideration were obtained from the State Governments.
The second item mentioned by the Wool Committee was the Commonwealth Land Tax. During the closing stages of the last series of sittings, Parliament, on the initiative of the Government, appreciably reduced the land tax. That concession has been belittled. The Leader of. the Opposition (Mr. Scullin) stated that the benefits of the remission passed entirely over the heads of many, if not most of the small, wool growers. That is true. But when the right honorable gentleman analysed the effect of the remission per pound of wool, he did not exclude the production of the small man, but, spreading the reduction over the whole output of the Commonwealth, calculated that the gain to the producer was worth not more than one-sixth of a penny per lb. He would have been more fair and correct had he limited his calcinations to the product of those graziers who really secured the benefit. It is a fact that the maximum benefit of the remission is being enjoyed by the stud sheep grower, who is an important factor in this industry.
A third cost in’ regard to which, an investigation is suggested is light dues. Doubtless it is true that the high overseas freights are due in some measure to the collection of heavy light, harbour and port dues. The Commonwealth has no concern with harbour and port dues, but it is responsible for the light dues. For the lighthouse service along the huge Australian coastline, we collected last year £193,000, ‘ but the administration of the department cost the Government £218,000, or £25,000 in excess of the revenue. Yet, despite this, the Government has already taken steps to give effect to the recommendation of the Wool Committee in respect to federal light dues. We hope that by doing so we may induce the State Governments to give much- more appreciable assistance by reducing their harbour dues.
One other item mentioned by the Wool Committee is the property super tax. The Government has already given relief in this regard ; but it has been suggested by certain honorable gentlemen this morning that the tax should be totally remitted. Whether this can be done will depend, of course, upon the budgetary position ; but I assure honorable members that every effort will be made by the Government to give the maximum relief possible from this impost, nol only to the wool-growers, but to all the other burdened taxpayers in the community.
The next item referred to by the Wool Committee is the interest burden. Like the honorable member for Gwydir (Mr. Abbott), I believe that this is the crux of the whole position. The Wool Committee, in its report, suggested that 1¾d per lb. of wool represented the burden of interest to this industry in respect of the borrowed money used in carrying on the enterprise. We know full well that if the whole of the investments in this industry were taken into account in this calculation - and they should bc, for there is no reason why we should limit the calculation to borrowed money - the interest burden would amount to about 4d. per lb. of wool produced. It has been quite correctly said here this morning that a remission of 1 per cent, in interest rates would give the substantial relief of about Id. per lb. in the cost of producing wool. 1 give my assurance to the mover of the motion that his suggestion that there should be collaboration between those who are- able to make a remission in interest rates will be given -very sympathetic consideration by the Government.
But the Government has acted in other directions in seeking to assist this industry. In the closing stages of our business last year we provided £2,000,000 for the relief of wheat-growers. I do not think it will be denied that a good deal of that, money lias gone into the pockets of persons who are engaged in both wool production and wheat-growing. To that extent I am sure it will be admitted that substantial assistance has been given to those who are suffering, not only because of the serious decline in their returns from wheat-growing, but also from the serious depression that has overtaken the wool industry. We have also provided £250,000 for the payment of a bounty on fertilizers. A considerable amount of that money will provide relief for wool-growers. Substantial remissions were also made in primage duty, particularly in the interests of primary producers, including wool-growers. At the same time, the Government made considerable reductions in sales taxation. I notice, by the way, that (Mie of the first items in the proclamation relating to the remission of sales taxation is woolpacks, and one of the last is wool presses. That is characteristic of the whole list.
As I am anxious to spend as much time as possible at the Dairy Industry Conference, I shall not detain honorable members any further. I have indicated that the Government has done a good deal to give relief to the wool industry along the lines suggested by the mover of the motion. I assure him that we appreciate the value of this industry to the Commonwealth, and are alive to the desperate situation of many of the wool-growers. We shall do -our very utmost to ease their burdens, not only by direct action through federal instrumentalities, but by seeking the’ co-operation and collaboration of other interests which are capable of assisting the industry. We hope to have the assistance not only of the members of this Parliament, but also of the members of other legislatures in the Commonwealth, and of the representatives of business and financial interests in the Commonwealth who can be expected to render assistance of the kind desired.
.- The honorable member for Gwydir (Mr. Abbott) deserves our hearty thanks for introducing this discussion on Australia’s greatest industry. I agree with him that the time at our disposal for the discussion of this industry, taking into account the serious position in which it finds itself, is far too short. Towards the close of last year I took out figures for the last ten years to show the amount of money that came into Australia annually through the export of wool and wool products. I find that, after providing our own people with the finest wool in the world, we exported during the past ten years £508,046,SSS worth of wool. When we add to this amount the value of our wheat and flour exports, we get a total of £747,889,000. The Minister has properly pointed out the percentage of primary exports to the total exports of this country. In view of the importance of this industry to Australia, and the fact that neither State nor Federal Governments have helped it in the past, hut, on the contrary, by the legislative policy which they have pursued, have, from time to time, laid heavy burdens upon it, the time has come when assistance should be given to it. When the price of wool was high the industry was probably able to bear the burdens laid upon it, but now that the price of wool has fallen to its present 1 deplorably low figure, the Commonwealth and State Governments should co-operate with the object of removing from the industry many of the burdens which properly do not belong to it at all.
Interest charges are, of course, the biggest burden that now rests upon the man on the land. When it is realized that years ago a man could borrow £100 at 6 per cent, and pay his interest bill with six sheep, because sheep were then worth approximately £1 a head, while to-day he would need eighteen sheep to pay the same bill, the crushing weight of the interest burden is understood. The depreciation in the price of wool and live-stock has also brought about depreciation in the value of land, but in spite of this fact the interest rate continues at, virtually, the old figure. We have been thankful for some small reductions, but, in relation to the fall in revenue, these are totally out of proportion. The land tax which has been placed upon this industry iS; as was indicated clearly to the Prime Minister at a deputation last July, a capital tax. It was imposed, I believe, mainly because our city centralization policy had caused quite a wrong idea to develop in the public mind respecting the position of the man on the land and his capacity to pay taxes. It is satisfactory to know that the Prime Minister has been converted, in his later years, to a true view of the facts. When the effect of land taxation on woolgrowers was indicated to the right honorable gentleman at the deputation to which I have already referred, he made the following statement: -
Federal land tax was imposed in the first instance with the object of breaking up big estates, and increasing employment and production. I think experience has taught us that, while you cannot tax land into production, you can tax it out of production. Therefore, recognizing that fact, and recognizing, also, that unless primary production in this country is profitable the country cannot be prosperous and the people cannot be employed, then we have to recognize that it is essential that we work towards the abolition of this tax, which is a burden upon you and the whole community through you.
I submit that, holding those views, the Prime Minister and his Government are not acting with sufficient promptitude. A minor reduction of land tax has been made, but the incubus upon the people on the land still exists, and the right honorable gentleman is in a position to have it removed. I know what all those other burdens mean, which have resulted in increased costs to the wool-grower. If the prices of wire-netting and fencing wire were brought more within the reach of the man on the land, he could buy those necessaries, and more men would be employed in manufacturing and erecting it. Because price levels are excessively high, these men cannot buy what they need to improve their properties, and, consequently, factories are in distress, and things generally are at sixes and sevens.
I hope that the Government will pay greater attention to the findings of the commissions and committees which it appoints. Had it more closely observed the finding of the Wool Committee some help would have ‘been given to that industry. It is not help that the wool industry needs so much as the removal of the grievous burdens imposed on it, which, it asks, should be removed so that the industry may save itself, and, save also, Australia.
.- I congratulate the honorable member for Gwydir (Mr. Abbott) on the capable manner, in which he placed this important matter before the House. He touched upon the main troubles when he mentioned tariff, taxation, freights, and interest. I appreciate the efforts of the Government in endeavouring to handle those problems, but feel that a good deal more must be done if a great industry is to be saved from collapse.
The matter of interest ‘is extremely important. As was pointed out by the honorable member for Gippsland (Mr. Paterson), an appreciable reduction is necessary if those engaged in our rural industries are to carry on. I know of a man holding big mortgages over station properties who twice voluntarily reduced rates of interest to his mortgagors. Just after he had done that for the second time he received a request for a further reduction. He replied, “ Let the banks and other financial institutions do their part in reducing interest, and I will immediately reduce the rate on all my mortgages to 3 per cent.” That was a very fine gesture from one who had -already done so much to help the man on the land. The honorable member for Gwydir stated that the graziers themselves had done much to reduce costs within their own boundaries, and had mortgaged themselves heavily in Order to retain their property, with the result that they and their children willbe burdened for many years. Many of these properties were acquired during times of high prices, because of the progressive spirit of great hearted men who desired to produce the raw products which our country needed, and assist to create additional national wealth. Through no fault of theirs, prices fell throughout the world, and they were left “to carry on with heavy mortgages, and no chance of recovery. Because of that it is imperative that interest rates on mortgages should be reduced. For years these unfortunate individuals have paid high rates of interest, and their equity in the property has long since vanished, while that of the mortgagee remains intact, because he has either received interest during these difficult times or repossessed himself of the property.
It is pleasing to have the assurance of the Minister foi’ Commerce (Mr. -Stewart) that the Government will endeavour to bring about a reduction of interest rates. Subsidies, bonuses, bounties and similar assistance are merely palliatives. The time has come when they must all be abolished and costs reduced by a reduction of taxation, freights and other transport charges, and rates of interest, in an endeavour to” make production profitable at present prices which, we may safely assume, will continue for a number of years. Graziers and farmers have cut their costs in every possible way and have denied themselves pleasures which they enjoyed in the past. Unfortunately, they have, even been compelled reluctantly ‘to dispense with the services of old and valued employees. Such is the position of the man on the land.’ I add mv support to the claims advanced by previous speakers, and again express my appreciation of the promise of the Government to assist further in stabilizing this great industry.
– I desire to .offer my congratulations to the honorable member for Gwydir (Mr. Abbott) for bringing up this most important national matter. We are all fully aware of the limitations that are placed on governments generally in their endeavours to help industries of any kind, no matter how important they may be. I feel that this debate will justify itself if it does no more than again bring before the people of the Commonwealth the immense national importance of the wool industry, and the desperate straits in which it now is. The earnestness and sincerity that have characterized the speeches of honorable members on both sides during this debate should in themselves be a valuable contribution towards winning the sympathy of the people of Australia, and enable them better to understand the immense problems confronting ‘the wool industry.
It is well on an occasion such as this for honorable members to be made aware of just what has been done by ^governments of all political colours to give assistance to this most important industry. I have endeavoured to make a list of the aids that have been granted to the wool-growers and other primary producers by the Government of New South Wales and the Commonwealth Government. First of all, the New South Wales Government has .granted a rebate of 10 per cent, in freights on wool carried on the railway of that State. “While that is not a large reduction, still it is “an appreciable one, and has been of considerable assistance to the growers. It is to the’ credit of the Lang Government that a measure was passed by the State Parliament providing for the reappraisement by local land boards of lands in process of purchase from the Crown. Previously, those lands were appraised on the value of other lands sold in the district, but now their value is fixed in accordance with their earning’ capacity or productivity. ‘ That is a ‘tremendous concession to graziers who ‘have not completed the purchase of their holdings. In addition, the Agricultural Lessees Relief Act was passed to give relief to settlers who are leasing land from private owners. This act enables the lessee to apply to the local land board for a reduction of rent, and for some continuity of tenure, should he desire an extension of his lease to enable him to make up for losses that he may have suffered. The Rent Reduction Act, which ‘ was introduced by Mr. Lang, when Premier of New South Wales, has also been of great assistance to the graziers’. Brokers have reduced their brokerage charges on wool to the extent of 10 per cent. The wages of shearers, shed hands, and station hands, and others directly engaged in agricultural pursuits have been reduced during the past two or three years by approximately 25 per cent, or 30- per cent. Graziers who own motor lorries have been granted a rebate of 50 per cent, of the registration fee. Then, again, the present Government of New South Wale3 has made available to woolgrowers and other primary producers advances to a maximum amount of £300 ro enable them to carry out necessary improvements, such as clearing and fencing. That money is available at the interest rate of 3 per cent. The advances are of great benefit to the growers, enabling them to carry out necessary improvements to their properties and to earn for themselves something like a reasonable living. In addition, the Government of New South Wales proposes to make available £500.000 to graziers and others for the eradication of rabbits in that State. If that is done, the settlers will be able to improve the productivity of their holdings, and to reduce production costs. No matter how critical we may be of governments in general, we must admit that the State of New South Wale3 has not overlooked the immense importance of encouraging the wool-growers, and protecting them to a considerable . extent from the effects of the depression. The Minister for Commerce (Mr. Stewart) has already enumerated the activities of the Commonwealth in the direction of benefiting those engaged in the wool industry. We have to remember that the
Commonwealth Bank, which is an instrumentality of the Commonwealth Government, has maintained the exchange rate at about 25 per cent., in the face of the opposition of highly-organized sections of the community. The maintenance of that high exchange rate has added a bonus of something like 25 per cent. ‘ to the prices received by the wool-growers for their products. The Minister also referred to the reduction of 30 per cent, in the land tax, and that, of course, has given some relief. Reductions in the sales tax and primage duty have benefited the primary producers to the extent, of £400,000 per annum, and, of course, the wool-grower3 have shared in those con cessions.
I come now to the subject of interest rates. While I agree with the honorable member for Gwydir (Mr. Abbott) and other honorable members that there is still pressing need for the reduction of interest rates, I realize that the Commonwealth Bank has taken a lead in this matter, and has done all that could be reasonably expected of it in this time of depression to bring about such a reduction. From inquiry this morning, I ascertained that the overdraft interest rate at the Commonwealth Bank was, to-day, in the vicinity of 5 per cent., whereas, previously, it was 6-J per cent, or 7 per cent. I do not dispute the statement of the honorable member for Gwydir that the average grazier is paying interest at the rate of 6 per cent, on money that he has borrowed.
-The honorable member’s time has expired.
.- I regret that the limited time available to discuss this motion may preclude some honorable members from speaking on behalf of the wool-growers generally, and I shall therefore condense my remarks as much as possible. I am not in favour of governments making up deficiencies iti any industry. It is not the responsibility of the Government to make any industry pay, and I am opposed to bounties as a general principal. But there are times when it has been proved that the burden inflicted by the Government upon a particular industry has caused great loss to those engaged in if. That is the position in respect of the wool industry. It has been clearly demonstrated by the DeputyLeader of the Country party (Mr. Paterson) that the taxation which has been imposed by various’ governments has been mainly responsible for the prevailing high rate of interest. The honorable member for Macquarie (Mr. John Lawson) referred to the fact that the Commonwealth Bank had reduced its interest rate on overdrafts from 6½ per cent. to 5 per cent., but I would point our that the Commonwealth Bank is on a footing quite different from that of other banks in this country. It has no taxation to pay, and therefore it is not fair to compare its position with that of other banks. The other banks cannot reduce their rates unless they are given some relief from taxation.
Motion (by Mr. Ward) agreed to -
Thatthe questionbe now put.
Original question - put. The House divided. (Mr. Speaker - Hon. G. H. Mackay.)
Majority .. … 31
Question so resolved in the negative.
The following papers were presented : -
Seat of Government Acceptance Act and Seat of Government (Administration) Act -
Nurses Registration Ordinance - Regulations.
Ordinance of 1933- No. 4- Seat of Government (Administration ) .
In Committee of Ways and Means Consideration resumed from the 9 th March (vide page 131) on motion by Sir Henry Gullett (vide page 1167, Vol. 135-
That after the words “ United Kingdom “ the following words be inserted: - “and that the Govern merit without delay submit a further schedule which will carry out the terms and the spirit of the Ottawa agreement with respect to increased preference to British goods ill the following manner: -
Duties against British goods to he reduced to the levelof the 1921-1930 tariff in all eases where they have been raised above that level without report by the Tariff Board”.
And on motion by Mr. White (vide page 29)-
.- I support the amendment moved by the honorable member for Gippsland (Mr. Paterson) ; but I wish, in the first place, to extend my congratulations to the Minister for Trade and Customs (Mr. White) for the manner inwhich he explained the schedule which he has introduced. I also wish to endorse most heartily the sentiments expressed by him in his speech, for they show a broad national outlook. I only wish that the schedule which the Minister laid on the table were in conformity with those sentiments. It is very largely the work of others, and I hope that, as time goes on, the Minister will apply those sentiments to the improvement and development of a schedule which will be in conformity with them. Probably the most positive of my congratulations is as to the manner in which he has managed to arrange the schedule in groups. I have done a good deal of tariff work in the way of examining schedules at one time and another, and I freely acknowledge that I have never previously been able to get the comprehensive picture of the tariff which I now obtain, owing to its analysis into groups, as now arranged. I think that it is that frank analysis which we owe to the p resent Minister which makes plain the hopelessness of the position in regard to industrial costs in Australia; and it is a recognition of the hopeless outlook in the direction of getting relief for the primary producers through tariff revision along the lines which have been pursued by the present Government, which leads me to support the amendment. I recognize the veiled generalization which it implies, and which has been criticized by the Attorney-General (Mr. Latham) ; hut what we need in Australia to-day is men who are game to do something in regard to the tariff. We are suffering from the presence of flabby individuals who try to stagger along avoiding trouble. “ Even though there may be some risk attached to a ‘real revision of the tariff to-day, when our great industries are sinking deeper into debt, difficulty and liquidation, and, what is worse than all, complete moral disintegration, what we need most is men who are prepared to apply the principles they profess, and to do something definite that will tend to set matters on the mend. I do not suggest that the problems of the primary-producing industries in . Australia can be solved easily or quickly through the reduction of industrial costs alone, and in expressing the need for urgent action, I am not impugning the honesty or integrity of members of the present Government; but we find that when in office they are not able to give more than a very slight instalment of what we were led to hope for when they were in opposition. I realize that sentiments expressed in opposition are generally ideals which people hope they may be able to obtain, and in this life we have to take what we can get ; but I should like to see a more vigorous effort made to attain the ideate to which expression was given when in opposition.
I propose to quote from remarks made by the right honorable the AttorneyGeneral during the general tariff debate in April, 1931. 1 do not know many men who equal him for straightforwardness and mental sincerity and honesty. Nor do 1 know many men who are freer of the almost universal weakness of believing that what is convenient to them or their side is right. There are any number of persons who would not do anything they believed to be wrong; but, at the same time, they almost invariably believe that what they want is right. The AttorneyGeneral is one of the exceptions, for he has not that almost universal human frailty. Yet his expressions of opinion, when he led us in opposition, and his achievement as expressed in his speech last night, are lamentably divergent. For instance, during the general tariff debate he said -
Careful consideration, therefore, ought to be given to the placing of duties on machinery, and articles of this character, for which the local demand is relatively small, and when they can only be made locally at great cost, whereas they can be made overseas relatively cheaply, and particularly when the use of the Australian article which costs a great deal more than the imported article imposes overhead costs in the shape of interest and sinking fund for an indefinite term of years upon Australian industries generally. There are also many smaller articles which are really machines to be used in production. And here again we should be careful before imposing duties on articles for which the demand in Australia is relatively small, but which it is most important should be made cheaply available to producing industries. . . .
Wool, I am glad to say, has improved, but it is essential to the continuance of Australia as a producing country that we should be able to produce our leading primary products at a profit. …
We are unable to change world prices; we must accept them, although by co-operative marketing schemes we may possibly improve our chances of getting the best prices. The costs of production represent the other end of the problem, and they are to a considerable extent within our own control.
I draw particular attention to that statement -
Whether we like it or not, the cost of production of wool and wheat must be brought down if we are to continue to live at anything like our present standard. . . .
I agree that from time to time special help must be afforded to meet particular circumstances of distress, but if prices remain substantially where they are to-day, there must be a reconsideration of our whole economic structure.
It was in. the hope of such reconstruction, such really radical assistance in the matter of the reduction of production costs, that the primary industries and the country districts supported the present Government so strongly at the last election, and States like Western Australia, South Australia, and possibly Tasmania, gave overwhelming returns in favour of it. With a ‘ brilliant dialectic, the Attorney-General, speaking, I believe, for the whole of the Government, condoned what really amounts to inaction - the choice of the middle way. Instead of reconsidering the whole economic structure, he simply held out an ideal, in order to avoid trouble and disturbance. I submit that that is a very feeble attitude to assume. We are drifting in one place after another. The outstanding weakness of the last Government, and the one which, in my opinion, mainly contributed to its destruction, was its idea that it was in office to avoid trouble, and not to go through with its policy, whether it was right or wrong. It did not really falter in the expression of its policy, but it was very feeble in the way it pursued that policy. If we are to be cursed in the future in this direction it is a poor lookout for Australia. The proposition that there must be a careful revision of the tariff is absolutely unanswerable in the abstract, and I believe the AttorneyGeneral was speaking on abstract lines. He has not had the opportunity or the time to get into touch with the facts, and to see where the revision has led us. It has led us practically nowhere; we have almost stood still. There are some industries - the Minister himself quoted the manufacture of electrical storage batteries - in which, undoubtedly, a great improvement has occurred from the consumers’ point of view, because certain local industries have given good service at a fair price. There are other industries in which there is strong local competition, and good articles are being produced here at a price which does not compare unfavorably with that at which similar goods could be imported. The woollen industry is one of them. In this there is keen local competition ; but, with all its natural advantages, the prices of a great many woollen goods, although not much higher than the prices at which they could be imported, even if there were no tariffs, are still much, above those at which people in other parts of the world are able to procure them. Those higher prices are keeping up the costs of other industries which are less favorably situated.
I have, before me some figures issued by the Tariff Board in a supplementary report dated the 8th December last, . in which it contrasts the prices of similar goods in Great Britain and Australia. For instance, 8-oz. tweed, 36 inches wide, is available in England at 2s. lid. a yard, and the price in Australia is 5s. 4d. a yard. Those figures are not exactly comparable, ‘because one price is no doubt expressed in sterling currency, and the other in Australian currency. The price of 6*.6-oz. tweed, 54 inches wide, is given as 4s. 2d. a yard in England and 5s. a yard in Australia. That is the only case in which the prices are practically identical. In other instances the prices in Australia are considerably higher than those in. other countries. But this is not a serious increase. Most Australians, I think, are pleased to pay a little extra in order to establish in this country an industry which has a good prospect of becoming a strong, self-supporting, and, probably, exporting industry. If that were the only consideration, we should be well content to put up with the additional cost; but in many other industries the extra cost of the Australian-manuf actured article is very great. There are the industries referred to by the AttorneyGeneral, in which the tariff, in some instances, has had the effect of cheapening the price to the Australian consumer, and I am sure that everybody in the House is glad to give assistance to start such industries ; but they are more than offset, in the aggregate, by the large number of industries which receive shelter from the tariff which enables them, to avoid the reconstruction which, through lower prices, is being forced on our primary industries, and on the manufacturers of woollen goods and the smaller electrical goods by internal competition.
There is no satisfactory way of comparing prices in Australia of manufactured articles with those of primary products. The best we can do is to take the Melbourne wholesale price index. It’ is a long way from complete, but gives a rough guide to price movements in regard to some of. the smaller secondary products and a certain number of primary products. By a comparison of the price movements shown in that index, we can get an idea of the extent to which this shelter, which secondary industries will continue to receive, is enabling them to avoid the reconstruction which they really should be facing, Such as getting rid of dead capital and things like that. This means that the advantage which should follow from the very considerable reduction of wages is being received by these industries shirking reconstruction rather than cheapening the cost of their goods. Let me take the Melbourne wholesale price index-number in 1911 at 1,000, and apply it to four industrial groups, including the manufacture of metals, building materials, chemicals, and some others. Textiles are not included in the published figures. The figures which were made available by tlie Commonwealth Statistician on the 1st March cany us up to December, 1932. The price index-number for secondary products was 3,825 in 1929. Then the prices rose until 1931, when they were at the peak of 1,953. During the early part of last year they fell slightly to l’,926. In November they were down to 1,919, and in December they had started to rise again. The metal group and the building materials group were the two that were rising. There we have a clear indication that the shelter provided by the tariff is preventing the consumers in Australia from deriving the benefit which they should be receiving on account of the sacrifices being made by the wage-earners in those industries. That is the worst handicap which the tariff is putting on Australia to-day. Primary industries, on the other hand, which include a u umber of the primary industries which produce for the local market, and which have not suffered the tremendous falls which have occurred in overseas prices, have fallen from the peak of 1,862 in 1929 to 1,145, as compared with the increase of the secondary industries .to 1,920. While in the case of secondary products there was a fall in prices from the peak of 1 per cent., the fall from the peak in the case of primary products, which include a certain number of goods produced for the local market, was 38$ per cent. That illustrates why so many people are out of work. When the hurden falls with so much greater force on one section of the community than on another, the people so suffering cannot purchase what they formerly used to purchase.
– Do not those figures indicate a world and not only a local condition ?
– That is a fair interjection. The prices of manufactured articles are always much more stable than are the prices of primary products. Manufacturers, whose output is made so much to order, meet a depression by shortening time and holding up prices, although that course tends to prolong the depression, because men without employment have diminished purchasing power for primary commodities, the production of which cannot be regulated as in the case of secondary products.
Employees in some industries have suffered a reduction in wages of 25 per cent, or 30 per cent., and debentureholders have been obliged to accept a reduction of up to 22-J per cent, in interest returns. A great many of these industries have not yet reduced their prices in conformity with the changed economic outlook. Let me instance one in order to make my meaning clear to honorable members. The other day I had occasion to buy some fencing wire. I mention this, not because I suggest that fencing wire is uniquely important, but it happened to be an article which I had occasion to buy, so l know the facts concerning it. In normal times the price is £1 9 a ton ; it is now down 25s. a ton - a reduction of about 7 per cent, at the most. This percentage reduction is not fair to the nien employed in the industry, because they have had a heavier cut in wages. Nor is it fair to the debenture-holders who have suffered interest reduction to a much greater extent. As a matter of fact, I believe that the great steel industry is one of our most efficient industrial concerns, and that the management has done its utmost to keep costs down. So I am not. citing it as an example of an industry that should be criticized or held in obloquy. All I wish to convey to honorable members is, that even that progressive industry, under the shelter of the existing tariff, finds it difficult to go through the process of reorganization which would enable it to give reasonable service at a cost which would permit our primary producers to carry on profitably in competition with producers in other parts of the world.
We have now before us a small new schedule dealing with 50 items, most of them of relatively minor importance. The rates fixed in respect of some of them look like substantial paper reductions. The former specific duty on socks and stockings has been reduced by about one.half but the duties are still prohibitive, the former rate being so enormously high that even the reduced duty of 15s. a dozen on some of the cheaper lines is equivalent to a protection of 300 per cent., 400 per cent, and 500 per cent. I am not anxious to see heavy importations of goods from overseas if we can possibly obtain the goods locally, but the value of such commodities to the Australian consumers is not that they get a good article from overseas, but that competition from outside provides a cheek on the extent to which a privileged section is able noi; to exploit by any improper mean’s but to avoid that reduction of costs which, as the Attorney-General (Mr. Latham) said when in Opposition, is so necessary if our primary industries’ are to pay their way and if we are to maintain our living standards in Australia.
Personally, I should have preferred the amendment moved by the honorable member for Gippsland (Mr. Paterson) to specify a reduction of duties all round by stages. I suggest that we should give our secondary industries warning that, after a certain date, they would be expected so to re-organize as to be able to produce more cheaply than at the present time. We should not spring drastic tariff changes on them too suddenly. If the course which I have suggested were adopted, the goods which they purchase from one another should be obtainable more cheaply as the result of the re-organization of industry made itself felt, and it should thus be possible to reduce the tariff and prices by progressive stages. But as this has not been proposed, I intend to support the amendment moved by the honorable member for Gippsland.
Let us now examine the way in which the cost of goods, protected in one industry, affects costs in other protected industries which, but for this high protection in the first industry, would probably be able to carry on and render good service to the community without being a burden on any other industry. The Tariff Board, in its report on motive power machinery and appliances, presented on the 11th October, 1932, made the following comments : -
Certain machinery in these groups can be produced in Australia at prices competitive on a duty free basis with imported costs, but the evidence showed that much has, in the past, been made in Australia at prices which equal or exceed the landed duty paid costs of imported plant. . . .
Dealing with this point, Mr. Aird, a director of Thompson’s Engineering and Pipe Company Limited, Castlemaine, a. good and efficient firm, stated -
In the years 1925-31, we (Thompson’s Engineering and Pipe Company Limited) manufactured machinery to the approximate value of £400.000 which would come under this item, and we would point out that, most of this machinery was supplied to government departments, from which we received, in most cases, a preference above the duty-paid price. What we are making out in our evidence is that if you go through the business we did we got it from government departments, and in practically every case we got at least a 10 per cent, preference.
The Tariff Board’s comment on this statement was as follows : -
If the position as revealed by Mr. Aird he taken as typical of this group of machinery, then it is very plain that the excess cost of this type of plant has, indeed, been a serious charge, and must have had considerable influence in increasing costs of other goods and services. In justice to Mr. Aird and the engineering industry generally, it may he mentioned that the high cost of local manufacture can bo traced largely to high costs in Australia of labour and material.
It is a fact that, although the cost of labour in Australia is now down, the cost of industrial goods is not down, largely because the existing tariff enables those interested in secondary production to escape the sacrifices which have been imposed on other sections of the community. The right honorable the Attorney-General dealt with the revenue position last night, and the honorable member for Corangamite (Mr. Gibson) offered the opinion that a reduction of the tariff would not necessarily mean reduced revenue. The Attorney-General rather scoffed at that suggestion. On this point, let me remind the committee of the view expressed by the right honorable gentleman when he was in Opposition -
I aw satisfied that the reduction of some of the duties would represent increased revenue, and it is important that that should be borne in mind by the Government during the discussion of these individual items.
I do not suggest that the tariff can be altered holus bolus without regard to the effect upon the revenue. But in many instances lower rates of duty will not increase the volume of imports; some of the imports will be admitted at a relatively high rate of duty, instead of only those coming in which at present are subject to lower rates, whilst others are excluded entirely by almost prohibitive duties.
I am depressed by this schedule, because it offers very little scope for further revision in ‘ the manner promised by the Government in its policy speech. There are 535 items in Group A which are still on the Pratten tariff level ; amongst them are certain types of wire, agricultural implements, and mining machinery, the duties upon which will, I hope, be revised downward. Group 3 consists of 31 items which have been dealt’ with by the committee, and Group 4 of 93 revenue items. In Group 5 are 194 items amended by the Scullin Government in accordance with the Tariff Board’s reports. There is another group of 158 items which have been altered by the present Government in accordance with such reports. Then there is a big group of 416 miscellaneous items, most of which are merely defining goods previously admitted under by-law. That means that there are 1,427 items which, in the opinion of the Government, have been already adequately treated. There are 240 which are on the Pratten tariff level, except that they have been amended by the application of the formula, or are subject .to specific duties in accordance with the Ottawa- agreement. The remarks of Ministers suggest that these items are expected to remain at their present level, together with the 535 items which are identical with those in the Pratten tariff. There are left only 107 items, which were altered by the Scullin Government, and have not yet been dealt with by the Tariff Board. The revision so far has led us to a point where industrial costs, measured by wholesale price lists, are on the rise. There are only 107 items that the Government is avowedly going to revise. Therefore we cannot expect to make much progress in the downward revision of the tariff. The alternatives are not pleasant. The first would be to bring about a change of government, but that does not appeal to me. The present ministerial team is strong and capable of doing a great deal of good. I regret that it does not include representatives of the Country party, but as there appears no immediate prospect of that arrangement being brought about, I shall not discuss it,’ beyond saying that if such representation were given, we might expect a more rigorous implementing of the fiscal principles which I have always believed to be advocated by the party to which I belong. The Minister for Trade and Customs stated that the Tariff Board had glanced hurriedly through 214 reports it had made during the last three years, and had expressed the opinion that 201 of its recommendations were in conformity with articles 9 to 12 of the Ottawa agreement. If that is so, we cannot look for a very great revision of the tariff. The other alternative open to us is to give doles to the hungry in order to offset the doles to the greedy. That is a rotten policy, which I do not care to advocate; two wrongs cannot make a right. The other courses open to us are not very encouraging. The dominant interests talk flap-doodle about “a national- outlook,” but their own outlook is bounded , by Collins-street and
Sassafras-road. The future of Australia, the continuance of the White Australia policy, an.d the maintenance of our standards of living depend upon the holding and development of the Northern Territory, the north-west of Western Australia and the big empty spaces of this continent; but these tariff proposals enable a privileged section in the localities favorably situated in regard to coal sup-= plies or having good facilities for distribution to avoid the disabilities which are crushing settlement in the distant places. There is also the danger from within, the danger of disintegration. One honorable member, who has interjected, has not been prepared to defend Australia in the past, and is opposed to the expenditure o£ money to train ‘men for its defence in the future; but we have a great country, and we had good prospects of founding a powerful nation characterized by resource, initiative, public spirit, and fair play. We seem to be losing the virtue of fairplay, and the schedule now before us is a charter to continue the sheltering of privileged sections. In the present state of the world, the shelter given to one section means the placing of additional burdens on others and subjecting to crushing inequalities whole communities and States which depend upon their export industries. By such a schedule as this they are compelled to buy most of their requisites from privileged, sheltered industries which profess all sorts of flapdoodle about their national outlook, but are particularly well able to look after their own interests. The failure to give redress to the unsheltered sections is subjecting the Commonwealth to the risk of disintegration by secession. I hope sincerely, that the people of Western Australia will grin and bear their injustices until they can be rectified in the ordinary constitutional way. The Commonwealth cannot afford their secession, and I believe they will best serve their own interests in the long run by remaining in a federation which has a real chance of defending itself, maintaining its standards, and proving a vital force in the Pacific. But, if we continue to take this magnificent middle way - a sort of government of the feeble for the greedy - we shall give the very people who are suffering iniquities, hardship, and ruin - and thereare thousands of them in the rural districts of States like Western Australia - no other alternative but to cut adrift. I hope that, when the schedule is- in committee, the Government will consent to some amendments which will be much more effective in the giving of relief than the mere talking of Ministers or the dialectics of the right honorable the AttorneyGeneral as to the soundness of certain abstract principles. Action such as I have suggested will be much more effective in drawing together the different sections of our people, in cementing the nation in friendship by common sacrifice, and in helping us to get over our depression and go forward to become the leading country of the Pacific.
– One cannot help but be struck by the despondent note in the speecheswhich honorable members of the Country party have delivered in this debate. I agree with those honorable gentlemen who have 3aid that the primary producers of Australia have passed through, and are still passing through, a very serious time. But it strikes me as very unfortunate that these gentlemen should conclude their speeches and arguments in the hopeless tone that they have sounded. There was the same ring of despondency in their speeches on the wool industry this morning. The same arguments were used twoyears ago; and again twelve months ago. Since then, however, costs have been cut to the bone, but the position has become worse. One felt that, even if all their proposals were adopted, the position of that industry would still be hopeless. I think the time has come when we must all recognize that the tariff is bound up with our monetary system, exchange, currency, and so on. I trust, therefore, Mr. Chairman, that you will bear with honorable members if, in seeking to discuss the tariff, they appear to stray a little from the subject. It is being realized in the parliaments of all the countries of the world to-day that we cannot discuss tariff questions without touching, in passing, these other associated subjects. Just as in dealing with one branch of science it is necessary to touch upon other branches, so in dealing with the tariff it is necessary to touch upon other aspects of fiscal policy. It is extraordinary to me that the AttorneyGeneral (Mr. Latham), the honorable member for Wakefield (Mr. Hawker), the honorable member for Gippsland (Mr. Paterson), and the honorable member for Gwydir (Mr. Abbott), who are much more capable of dealing with matters connected with primary industries than I am, should, even when coining phrases like “government of the feeble for the greedy, which was used by the previous speaker, take very good care to avoid putting their finger upon the people whom we should be most justified in calling greedy. That reluctance was clearly shown in this morning’s debate on the wool industry. I am not now referring to any group of people in this country, but to those people who are really responsible for placing upon us the artificially enhanced interest burden which we now cany, and which is commonly agreed to be our heaviest burden. I’ regard this as an immoral burden, yet the parliaments of this country have not, so far, had the courage to reject.it. The primary producers of Australia, and all other sections in this country, are suffering to-day, not because of the burden of internal interest, but because of the burden of external interest. The honorable member for Gwydir surely made thi3 clear in his speech this morning, as he did last year when he showed, with the aid of certain balance-sheets, that even if the wool-growers of Australia were relieved of every penny of internal interest they would still not be able to produce wool for export at a profit, because of the external interest that has to be paid. I do not think any one in the House is more capable of diagnosing the position of the pastoralists of this country than the honorable member who introduced the discussion on the wool industry this morning, and he made it abundantly clear that our outstanding trouble was our interest burden. But I repeat that if we deal only with the interest payable in Australia, we shall not get at the root of the matter. It is our external interest burden which is breaking down all our standards, starving our industries and our people. The Government has been charged with imposing taxes, and also with failing to remit them as *ist as they should be remitted ; but everybody knows by this time that our troubles are due to two steps taken overseas some time ago, because of which the people of Australia, and of every other country, are being taxed in order to meet an immoral burden of interest payments which should never have been imposed upon them.
– The honorable member is departing somewhat from the subject before the Chair.
– I shall link it up with the subject of tariffs in two or three sentences. We all know that our low price levels are partially responsible for our difficulties. Nobody asks why prices are so low and how we can stop them falling lower. There is no hope of adjusting price levels until we can increase the demand for wool and our other primary and secondary products. The plain fact is that prices have been forced down to such an extent that it now takes two bales of wool to meet an obligation that one bale of wool would have met a few years ago. Why do not we say frankly that the people who forced upon us this deflation of prices are the real culprits ?
– Who arc they?
– It is very well known that certain interests in Europe met at Brussels for the purpose of giving effect, to a carefully and scientifically prepared scheme of deflation. These interests told the world that prices must revert to the 1914 levels. This was done in 1920. Following upon this, the same people, by cornering the gold supply, further increased the old burden upon us. It is the people who deflated prices, values, wage standard and everything else from the 1928-29 levels, who have imposed upon the primary producers of Australia and other countries the sufferings which they are now bearing. Statements of this kind are being made commonly by British statesmen in the House of Commons, but the statesmen of Australia have not the courage to say these things. Mr. Winston Churchill, for instance, in the budget debate in the House of Commons last year, said, in referring to the tremendous increase in the price of gold -
Look at the enormous extra hurden that is imposed upon the creditor countries, such as Australia, which have been compelled to execute their contracts upon this irrationally enhanced scale. Look at the enormously increased volume of commodities which have to be produced to pay off the same debt or loan. It means that a debt of £15,000,000 becomes a debt of about £30,000,000. Minor fluctuations can. be ignored, but I say that such an enormous excess burden is intolerable and cannot be continued.
Why have not our statesmen the courage to say these things? In my opinion we cannot properly and scientifically discuss the adjustment of our tariff barriers without first dealing with the fundamental basis of our troubles. These people, having deflated prices and then cornered the gold supply - though gold was a commodity which few believed could be cornered - next refused to re-lend the gold which had come into their hands. If they had re-lent the gold they held so that it could have been distributed in the same proportion as formerly among the different countries of the world, we should now be able to overcome our difficulties; but the trouble is that they have put it into cold storage, where the value of it has increased by 70 per cent, or 80 per cent. I am sure that the honorable member for Corio (Mr. Casey) will agree with this statement. Gold has always been regarded as a measure and should, like other measures, have remained always the same; but it has been artificially stretched. For every 1 per cent, that the value of this gold went up the prices of our wool, wheat and other primary products went down 1 per cent. Because of this, contracts which were entered into by the representatives of Australia overseas before prices were deflated, and which had to be met by the shipment of our wool and wheat, cannot now be met, except by our paying nearly twice as much as we bargained to pay. I believe that we should be hypersensitive about our honour and dignity, and repay every penny that we legitimately owe, but we do not owe this additional 70 per cent., and should not be afraid to say so.
– Suppose the position had gone the other way?
– I agree that it can cut both ‘ways, but those who manage these fluctuations generally see that it goes the right, way.
– Who are these people?
– International financiers, representatives of the greatfinancial groups in Europe, who met at a special financial conference at Brussels, at which 46 nations were represented.
– They were nominated by their governments.
– No, they were not government representatives, but representatives of the great financial group” in Europe. They invited one or two government representatives to come along as advisers, also two or three financial experts, including Professor Gustav Cassel. It was at that conference that they decided upon the policy of deflation to which I have referred. They achieved their object. I do not think that any one will deny that France and the United States of America cornered sufficient gold to cause its value to increase by from 70 per cent, to SO per cent. Those two acts are responsible for making Australia poor.
It is obviously right that we should pay back only one sovereign for each sovereign of the commitments which we entered into in the years, say, 1926-27, and 1928. If it. then took one bale of wool to pay off a sovereign of our indebtedness, one bale of wool should be sufficient now to repay each sovereign that we owe. But that is not so.
Many reputable persons in Great Britain, including prominent statesmen, recognize the immorality of the increased burden which is claimed from people who, having incurred obligations, now find it impossible to carry out their contracts on an enhanced and unnatural basis; they have publicly declared that such a state of affairs cannot continue. I agree that the exportation of wool, wheat, and other important primary products affords the means by which we meet our overseas commitments. The value of those commodities is supposed to be measured by the value of gold, of which the measuring rod was supposed to remain constant. But, instead of remaining 12 inches to the foot, it is now 23 inches to the foot! I say that the time has now arrived when the Prime Minister of Australia, acting for the members of this Parliament, should come to the rescue of the Australian people, and fell our overseas creditors that we are prepared to repay every farthing that we borrowed when the existing contract was made on the basis of the contract then entered into, but that we shall not continue to do what Mr. Winston Churchill and Sir Robert Horne declare is impossible - send overseas money to meet commitments which by artificial juggling have increased by from 70 per cent, to SO per cent. Our duty is clear. We must refuse to ruin further our Australian standards by forcing upon our people this unjust burden.
The basis of all our trouble is that the price of our wool, wheat and other commodities has been squeezed down while the price of gold has been pushed up. Every honorable member knows that that has been done by artificial juggling. The honorable member for Gwydir knows that I am touching upon the real trouble behind all his arguments this morning, based on just and reasonable grounds; unless an adjustment i3 made in the measuring rod of values between Australia and other countries, the price of wool, wheat, and other commodities will not increase. That, at any rate, is the point that appeals to me. While I desire with other honorable members to readjust our fiscal policy to meet the requirements of all sections in the country, I contend that it cannot be done properly unless a monetary reform is effected.
Last night, the honorable member for Gippsland (Mr. Paterson) made an excellent speech, choosing his words and marshalling his facts admirably. But, as usual, he had a dig at the Scullin Government. He said that that administration had juggled with the tariff and gambled with all sorts of extraordinary prohibitions and embargoes under the plea of readjusting, our international trade balance. I remind the honorable gentleman that the Scullin Government achieved its object, and I urge him and others not to let politics obtrude in such matters, but to recognize merit where it is due. No one will deny that our overseas trade balance was in a precarious state when the Scullin Government took office, and that its so-called extraordinary action enabled us to get back to an even keel in that respect; for it converted an adverse trade balance of £30,000,000 into a favorable -trade balance of a similar amount. It did that with the clear understanding that those so-called extraordinary fiscal anomalies should be removed as quickly as possible. The honorable member for Gippsland charged the Scullin Government with having done these things without consulting the Tariff Board. From his point of view, that may be a legitimate complaint - it has been raised hundreds of times in this chamber - but in his speech last night, not only did he blame the Scullin Government for ignoring the Tariff Board ; he also made a vicious attack, in a pleasant way, upon this Government, blaming it for not ignoring the Tariff Board. The honorable gentleman cannot have it both ways. One method must have been wrong.
When the Ottawa agreement was first submitted to this Parliament, I said that it was interfering with the sovereignty of Australia and, from a fiscal point of view, reducing the Commonwealth Government to the level of a Crown Colony. I repeat that statement. We have done something in connexion with the Ottawa agreement which the British Government itself did not dare to do. That Government appointed an advisory board of expert, reputable gentlemen, similar to many available to this Government, to collect and tabulate evidence for its guidance. That was a wise thing to do, something that would be done by a group of employers or any other body which wanted to keep up to date, and preserve a proper perspective of affairs. But the Commonwealth Government has not done this; it has handed over the whole making of our tariff to the Tariff Board itself. That the board appointed by the British Government acted merely in an advisory capacity is proved by the fact that on several occasions major recommendations which it submitted were set aside by the Government and Parliament.’ The Ottawa agreement binds us body and soul, and makes us subject to the recommendations of the Tariff Board, plus the advice of our direct competitors overseas, Surely we are not safeguarding Australian industries when we bind ourselves to accept the recommendations of a Tariff Board which may call to its assistance, in arriving at these recommendations, the representatives of industries which are in direct competition with us. Surely that is a childish way of treating this fundamental question, which should really be subject to the decision of Parliament itself. I quite agree that the Tariff Board should exist as an advisory body to this Parliament, but the power which it now exercises is out of all reason. Then we hear from representatives of the Country party that they are fearful of developing and fostering inside Australia monopolies which may fleece the public. I prefer to have a monopoly inside our own country whose profits can be taxed by this Parliament, rather than an outside monopoly which is beyond our control.
– There are many monopolies already in Australia.
– I am not denying that, but I prefer to have them here so that this Parliament can legitimately tax their profits.
– What about the hig oil companies ?
– Had the Government the courage to use its taxation powers, it could tax the profits of monopolies in this country. The Country party representatives are afraid of monopolies inside Australia, but they have no fear whatever of those outside Australia. There are hugh monopolies within and outside the British Empire. They develop, naturally. Some of the British monopolies are largely financed with international capital, and only a percentage of the work in the manufacturing of their articles is performed in England itself. This Government has frequently had to guard carefully against the importation under preferential duties of goods which were not manufactured in Great Britain at all, but only re-shipped from there. I know that in past administrations the customs officers had great difficulty in determining whether certain imported articles were made in Great Britain. The country of origin was so well hidden that it took years before the concealed, words “ Made in Germany,” or “ Made in Belgium “ were discovered. I have no doubt that articles which have not been1 manufactured in Great Britain are still being imported into Australia under preferential duties, although the percentage of British workmanship in them is not sufficient to warrant their preferential treatment. There is more danger to-day in competing with outside countries than there has been since Australia became a nation. All manufacturing countries have gorged themselves with surplus commodities which they are prepared to dump elsewhere when suitable opportunities arise. Manufacturers in Great Britain who are largely financed by international capital and, therefore, assisted by international agencies, financiers, efficiency experts, directors and managers, can profitably dump articles in Australia at cost price or even below it.
– The Industries Preservation Act enables this Government to prevent the dumping of foreign goods into this country.
– I know that, but still dumping takes place. I hope that the Minister” will not allow it. There is still grave danger of dumping. Mr. White. - The Government realizes that.
– This is a period of falling prices. In the report of the Preparatory Conference which was referred to by the Attorney-General (Mr. Latham) last night when speaking of the forthcoming International Labour Conference, it is stated that, because of the lost demand for goods and services, 30,000,000 white people, excluding those who never work and Asiatics, who previously were engaged in industry, are now totally unemployed, and that the lost value to world trade because of the loss of the consuming power of these 30,000,000 people, calculating wages at one dollar a day, which is much below the average basic wage in Europe, is £4,000,000,000 a year. The expert committee advising the Preparatory Conference, which is to make it’s report to the conference to be held in May next, suggested that the crux of the trouble is the lost demand ‘ for goods and services. It said that that was where the finger could be placed on the pulse of the situation. The restoration of that lost demand is the only means of raising the price of wool or that of any other commodity. Two or three honorable members who spoke this morning considered that the position was so hopeless that nothing could be done in Australia to remedy it. I suggest that we’ have adopted that attitude too long, and that it is time we made a move. Mr. Basil Blackett, who is a director of the Bank of England, and was for many years Chancellor of the Exchequer in India, should know something of this subject. He said that if the world is waiting for an international conference to work out these problems and automatically to start operations on a new basis, it is waiting for a miracle which will never happen. He suggested that if the British Empire would establish its own internal monetary system in an endeavour to rehabilitate its own price levels, other countries would follow its lead, and that a country like Australia, which is more or less self-contained, should not hesitate to take a step in that direction, in order to rehabilitate itself. Two years ago the representatives of the Country party complained of the position of the primary industries because of the operation of the tariff and the high wages then ruling, which they said made it impossible for those industries to carry on at a profit. A year ago, when they recognized that prices and costs had fallen all round, their proposals were not nearly so drastic as those which they put forward to-day. They admitted that there had been a fall in the costs of production. That is why there is to-day a hopeless ring to the case which the Country party’s representatives are putting up on behalf of the primary producers. They have admitted that costs of labour and other things incidental to production have fallen. The honorable member for Gwydir (Mr. Abbott) said that the producers had reduced the cost of production inside their own paddocks to the extent of Id. per lb. of wool, but that they are still 2d. per lb. on the wrong side of the ledger. Even if the requests of the Country party were agreed to, that gap of 2d. per lb. could not be bridged. Two years ago the position of the producers was hopeless. One year ago it was still hopeless. To-day it is still hopeless. Because, as costs of production have come down, they have pushed prices down. It is an inexorable economic law that once wages are reduced, prices follow. The Commonwealth Arbitration Court, in making awards, is asked not to reduce prices, but on every occasion it has reduced wages it has automatically further reduced prices.
Every time wages are cut the purchasing power of the community is reduced. There is a lessened demand, and, as a result, prices fall still further. The court, by lowering wages, makes it impossible to raise prices.
– But the cost of living does not come down accordingly.
– Every time wages are reduced, the cost of living is supposed to come down, and wages are again cut.
– How would the honorable member replenish the wages fund?
– I shall come to that presently. Leaders of thought the world over have said what Mr. Bruce has said from London, that the only way to begin to restore things is to stop the descent of prices, and cause them to rise again. In no other way will confidence be restored. Men in business know that if their competitors can buy goods more cheaply than they can, they will be able to sell more cheaply, and thereby attract custom. Consequently, they are afraid to buy more than they need at the moment. Addressing the Association for the Advancement of Science in London, in September last, Mr. J. R. Bellarby Professor of Economics at the Liverpool University, spoke in the following strain : -
Because of the falling prices, and because there is no attempt to arrest them, there is going on all over the world a spenders’ strike.
The honorable member for Wakefield (Mr. Hawker) referred to that matter this morning, when he said that some people who derived an advantage from falling wages put the money away as a reserve because they feared to spend it. Every one is rushing for cover, and the more they do so the les3 cover is left for them, and the more panicky they become. We are not’ travelling in the circle as we once did, hoping that the period of deflation will be followed by one of boom ; we are slipping down a chute, always going the one way - the way which end3 in absolute poverty. I am not ashamed to say these things. I have said them for years. As I have listened to the debates in this House, I have become more and more convinced that’ what the leaders of the Country party ask for will not avail. They have asked for them before, and obtained them, and yet conditions have not improved. Unfortunately, the primary producers of this country are in grave difficulties; numbers of them are passing through the insolvency court because of the fall in prices. But not by smashing other industries will our primary industries be saved. The more the primary producers attempt to save themselves and their industry by injuring secondary industries, the worse will become their own position, because the destruction of the secondary industries means the loss of the home market. I do not say that the primary producers are doing these things consciously; but I do say that the only hope for them, and, indeed, for any section of industry in Australia, lies in a rise of prices; and the only way to bring about that rise is to create a new demand. In the House of Commons a few months ago, Sir Robert Horne spoke somewhat as follows: -
Wehave left this question of currency for 100 years to the banking experts, because we have thought that it was a matter foreign to the average layman or politician. We have thought that it was something outside the control of ordinary business men. But I have come to realize that this question is one which concerns our domestic affairs more than anything else. It sits down at every breakfast table in the country, whether in the cottage or the castle. Money was not made by nature, but by law. In this House we make laws; here we determine what is legal tender; we decide its efficacy; we decide when and by how much the fiduciary note issue shall be increased ordecreased. We in this House manage the currency through the agency of the Chancellor of theExchequer, using as his instrument the Bank of England.
The only way that we in Australia can save our industries is by doing what Sir Robert Horne suggested - what, indeed, they did in England. We in this House can determine the efficacy of money; we can fix our own internal currency policy; we can do, through the Treasurer and the Commonwealth Bank, what Sir Robert Horne suggested could be done in England through the Bank of England. Although the Bank of England is a private institution, it is utilized by the British Parliament in times of crisis to accomplish its purposes. We have not to work through a private bank, because the Commonwealth Bank belongs to the people of Australia. That bank is the only instrument which can do the things that have been done in Britain. It is useless to talk of relieving one section of the community from taxes by imposing’ further taxes on other sections. The primary producers of this country, who claim that theyare not repudiationists, and desire to meet their obligations, also say that the people should not be taxed to raise money to send overseas, because to do so would be to ruin those engaged in primary production. They cannot have it both ways. In my opinion, we should repudiate that portion of our overseas indebtedness which is more than we bargained to pay. That is our duty to Australia. We mu3t meet every penny that we contracted to pay on the date that it becomes due; but we should not any longer meet that extra 70 per cent. or 80 per cent. which has been imposed on us by those who have established a corner in gold.
– Is that the policy of your party ?
– I have expressed merely my own private opinion, not that of the party to which I belong. It is not immoral to refuse to pay something which has been immorally imposed on us. I stand for meeting all my private obligations. I have always done so, and I hope to continue to do so. I am thankful that I owe no man a penny. But some turn of fortune’s wheel, which has given power to a group of men in other parts of the world, should not compel us to pay nearly double what we contracted to pay.
– We bargained to pay in gold.
– Other countries are not paying in gold, but, we are trying to do so. We should not continue the attempt any longer because it is not fair to our people. We in Australia are supersensitive in this matter. We in this Parliament will not be playing our part if we do not tell the people of Britain that we desire negotiations to be opened on that basis.
Secession Vote in Western Australia - Invalid and Old- Age Pensions - Half-Castes in North Australia - Tobacco Crop in New England.
Motion (by Mr. Lyons) proposed -
That the House do now adjourn.
– I have received a telegram from the Dominion League of Western Australia which reads -
Hope you will strongly resent Federal Government interfering secession referendum. Think it unwarranted and unprecedented to attempt to prejudice referendum authorized by our Parliament. Has Federal Government authority spend money this purpose V
The disabilities suffered by Western Australia under federation have become more and more evident during the 31 years of federation. I hope that the Federal Government will not attempt to prejudice the vote to be taken in Western Australia by any undue interference. The referendum is a domestic matter which has been authorized by both Houses of the Western Australian Parliament. Should the ministerial delegation proceed to Western Australia for the purpose named, I hope at least that its expenses will not be a charge on the general taxpayers.
.- This morning I asked the Prime Minister (Mr. Lyons) if he was prepared to allow honorable members to examine the files in cases in which applicants for pensions claim that the department has given unjust decisions. The right honorable gentleman replied that the request could not be acceded to on the ground that it would make the administration of the department impossible. Judging by the attitude adopted by the Repatriation Department, I cannot accept that as the real reason for the Prime Minister’s refusal. I know of one case in which the Pensions Department acted on allegations contained in an anonymous letter. The information supplied to me is that the United Australia Party, of which the Prime Minister is a member, employs many of its members acting as pimps upon these unfortunate people. They supply information to the Pensions Department, and many pensioners, because of their Labour activities, have been deprived of their pensions. I did not accept’ that information at its face value, but I was desirous of investigating the charge and of ascertaining upon what ground one lady had been deprived of her pension. In order to show upon what flimsy pretext the department is prepared to act, I shall quote this case. The lady was informed that her pension had been cancelled because she was no longer totally and permanently incapacitated. She informed me that she had not recently undergone a medical examination, and I was surprised to learn that her pension had been cancelled on the ground stated. I went to the Deputy Commissioner of Pensions in Sydney, and inquired about the matter. He admitted to me that the reason advanced by the department was not the real reason why the pension was cancelled, but that it had been done because of certain information supplied to the department. I asked him how he could justify his action in cancelling the pension if the action of the department was challenged. He replied, “We can easily rectify that by sending the pensioner for medical examination “. Evidently, therefore, when the Government desires a medical officer to give a particular decision it can rely upon the officer acceding to its wishes. I desired to see the pensioner’s file, but the Prime Minister has stated that it would make the administration, of the department impossible to permit that to be done. No one wants the fight to inspect the file of every pensioner or applicant who might approach a member of Parliament, but when a pensioner or applicant makes a definite charge against the administration, the file should be available. When I approached the department in Sydney for the file, the Deputy Commissioner said that he would get it, and read out particular extracts to me. We were both sitting in the same room, and he was prepared to go that distance to meet me, but the file would not be put into my hands. Has the Government something to hide that’ it will not permit files to be made available? I do not mind if it should he stipulated that an application has to be made through the Government for access to a particular file. No difficulty is made in this connexion in the Repatriation Department. All one has to do is to obtain an authority from the pensioner concerned, present it to the officer in charge, and the file is made available. If that can be done in the Repatriation Department, why can it not be done in the Invalid and Old-age Pensions Department?
.- The honorable member for East Sydney (Mr.
Ward) told us that he wanted to see the file of a pensioner who, he had been informed, had been deprived of a pension because of the receipt by the department of an anonymous letter. I do not deny that thai; was a serious allegation, and if it could be shown to have any foundation it was the honorable member’s duty to take the matter before the Minister. I want to know, however, who was the informant who told the honorable member that the department had received an anonymous letter in connexion with the matter. Was this informant anonymous also?
– The man is a government servant with access to the files, but I cannot divulge his name, because it might prejudice his position.
.- I desire to refer to the matter raised by the honorable member for Forrest (Mr. Prowse) in regard to the activities of the secession party in Western Australia. I am not a secessionist, but I realize, as perhaps tho majority of members of this House do not, the seriousness of the secession movement in that State. It is a real and earnest movement, and one which is liable to extend to other parts of Australia unless something is done to satisfy the demands of Western Australia. The Government. is sending two Ministers to the west, and is issuing certain manifestos. Unless the Government can give some definite promise of relief, no manifesto and no delegation of Ministers will influence a single vote in Western Australia. If, however, some specific assurance can be given the Government delegation will be listened to with respect. Previous votes have shown that there is no more loyal section of the people of Australia than those in the west. At the present time, however, they feel that their interests are being overlooked. They are desperate, and have resorted to this means in order to bring their case before the people of Australia.
– I desire to make an appeal on behalf of a most unfortunate section of the community - the half-castes of North Australia. I know, of course, the difficulties surrounding the situation; I know that there are some half-castes who never emerge from the environment of the aboriginal camps ; but there are others who take up the white man’s burden, and who become efficient and responsible citizens. Some have acquired stations* and are highly respected in their districts. Others hold responsible positions in the commercial world, but because they have coloured blood in their veins, the law of the country denies them the full right of citzenship. We shall probably be told that the laws are administered sympathetically, but those whose duty it is to administer the laws must take them as they find them. Men occupying high positions have recently been declared half-castes, with the result that they have been deprived of control over their own property. I have here a definition of a half-caste which was supplied to me by the Minister in answer to a question. It states -
The Aboriginals Ordinance 1918-1930 defines a half-caste as “ any person who is the offspring of parents, one but not both of whom is an aboriginal, and includes any person, one of whose parents is a half-caste.”
The definition supplied by the Minister was not, however, quite complete. In a definition previously supplied to me, the following passage occurs: -
The Government Resident, in reply, has invited attention to the provisions of section 49 of the Aboriginals Ordinance, which prohibits the sale of intoxicating liquor to aboriginals and half-castes. He referred to section 3 of the Aboriginals Ordinance which defines “ half-caste “ to mean any person who is the offspring of parents, one but not both of whom is an aboriginal, and to include any person one of whose parents is a half-caste. A person with one aboriginal grandparent is therefore, by the terms of this definition, a half-caste.
Therefore, even if only a grandparent were an aboriginal, the man is still regarded as a half-caste, and may be treated as such, so that the department may at any time take from him the management of his own affairs. We spend thousands of pounds every year trying to uplift the half-castes; but we must give them some incentive to rise by assuring them eventually of the rights of citizenship. A half-caste who succeeds in life should be allowed to become a free man, with the right of controlling his own property. The Government should establish a tribunal, to which a half-caste could apply to have his status defined, and his citizenship confirmed. I know one man who occupied a trusted position, with a number of others under his control, in a large pastoral and butchering business in the north. Because of some misdemeanour committed by his brother, he has now been declared an aboriginal, though he has little aboriginal blood in his veins. He has never been before the court, nor come under the unfavorable notice of the police. He is a married man with a family, yet now he is to be dragged back to the level of the aboriginals. It is cruel and inhuman. I know another man who owns thousands of stock, a man to whom one would go for advice on any matter. His whole life is an example to others. He is partly aboriginal; but surely he is entitled to all the rights of citizenship! Another man, the son of a Malay father and an English mother, served with distinction in the war, and after his return married an English girl. He now has a family growing up. He has been occupying various positions under licence, but was recently declared ineligible. It is unfair that this stigma should be placed upon him and his family. I again appeal to the Government to establish a tribunal such as I have mentioned, before which deserving half-castes may establish their right to citizenship.
Mr. THOMPSON (New England) [3.55 . - I wish to bring under the notice of the Minister for Trade and Customs (Mr. White) the very serious discrimination that has- been made against the district which I represent by the tobacco combine of Australia. So serious has the position become that I cannot remain silent any longer. I have obtained figures to show that, of last season’s crop, 30,000,000 lb. has been purchased by the manufacturers, principally the BritishAustralasian Tobacco Company, and that 2,500,000 lb. is still on the growers’ hands. Of this latter quantity, 1,500,000 lb. is in the Tamworth district, in the electorate of New England. No buyers have yet appeared in that district, which embraces practically the whole of northern New South Wales, and includes the Manilla, Scone, and various other tobacco-growing areas in the north-west of the electorate of Gwydir. I unhesitatingly say that the tobacco combine has deliberately singled out the electorate which I represent for victimization, for various reasons. One is that I happen to represent it in this House. I have been informed by growers that when they have asked buyers why they have not been operating in their district, the reply given has been, “ Well, you can blame your federal member for it “. I have had many such assurances from’ growers. I also allege that the district has been victimized by the New South Wales tobacco expert because he was censured by the organized growers for his continual neglect of their interests. I am informed that this expert goes around with the buyers, who act mainly on his recommendation, so it is largely in his power to determine whether a crop is bought or left on the grower’s hands. I allege, further, that this combine is victimizing the Tamworth district because it is the original tobacco-growing area in Australia - tobacco has been grown there for the last 40 years - and it is the district whence all the fight against the combine emanated for many years, and long before I took up the cudgels on behalf of the growers. I consider, and I am prepared to substantiate my statement if I get a chance, that it is, and has been for many years, the deliberate intention of this combine to wipe out tobaccogrowing in the Tamworth district, because it is regarded as the storm centre of tobacco agitation in Australia. I conclude by asking the Minister to send an officer of his department to meet the growers personally and investigate the extremely serious position of several hundreds of them. If an officer is sent to the district to meet the growers, and if he is not intercepted by a representative of the combine, I am certain that his report will be of such a nature as to open the eyes of the Minister.
– The question raised by the honorable member for East Sydney (Mr. Ward) with reference to the examination of the files in the Department of Repatriation is one of very great importance. The suggestion made by the honorable gentleman has never yet been approved as a principle. The files in the department contain information from the battle front and from Australian sources, and as the information is confidential, it has never been made available to the public; but the Bruce-Page Government, the Scullin Administration, and the present Government have made the files available to advocates for the men appearing before the Assessment or Entitlement Tribunal, in order that they may make out the best case possible for the men concerned.
– That is all that we are asking for.
– No; the honorable gentleman is asking for a general authority to examine the files.
– I think the House will agree that the practice which I have mentioned is as far as any government can go. Every government has endeavoured to help ex-soldiers by allowing their advocates to examine the relevant files.
– Replying to the honorable member for New England (Mr. Thompson), it is true that there is a quantity of last year’s tobacco crop still unsold in the New England district, but I do not agree with the honorable member’s reasons for the position that obtains there. It is not the Government’s business to see to the sale of the tobacco crop in Australia; but last year, because of the inordinately high tariff on foreign tobacco, a large number of persons turned their attention to tobaccogrowing in Australia, with the result that the production rose from 2,000,000 lb. to 13.700,000 lb., and, as is well known to honorable! members, the Government, acting in the interests of the growers, opened up negotiations with the manufacturers for the purchase of the crop. They will also, no doubt, recall the objections raised by the honorable member for New England, who declared that the growers would be ruined. After several consultations with the manufacturers the Government arranged with them to purchase 7.260,000 lb. at 2s. 3d. a lb. As a matter of fact the manufacturers bought 10,000,000 lb. at the price; but it cannot be expected that any business organization will buy everything submitted to it. The manufacturers contend that they have bought the whole of the Australian crop thai; was of any use to them.
– It would be more satisfactory if the Minister could confirm that statement.
– As I said in answer to a question in the House yesterday, the Government is as much concerned as any one else with the position of our growers, but I accept the explanation of the manufacturers that the quality of the tobacco remaining on the growers’ hands prevents its sale. The manufacturers claim that they have bought the whole of the prime quality tobacco available in Australia - the bright mahogany and the grades upward - and the honorable member for New England, who took an active part in the debate in the House last year, expressed his great pleasure at the successful outcome of the negotiation. This is what the honorable gentleman said -
Although a number of individual growers were dissatisfied for various reasons, the great majority of the growers were satisfied with the price they had received. They were perfectly satisfied with the position.
– Had the buyers been through the honorable member’s district then ?
– I do not know. I understand that the honorable member for New England has, on various occasions, endeavoured to get an independent opinion as to the quality of the tobacco grown in the Tamworth district, and I believe that he has been told, more than once, that it is unsuitable.
– Is it not extraordinary that, although tobacco has been grown in that district for so many years, it is only now declared to he unsatisfactory?
– If honorable members and all those interested in tobaccogrowing, read the treatize on tobacco cultivation written by the Commonwealth expert, they will discover that tobacco-growing is not a matter of chance. There must be the right climate, with the necessary humidity and the right soil conditions. That these are essential conditions is obvious from the fact that in the immense area of the United States of America there is only one region ideal for tobacco culture. It is unreasonable to think that it can be grown anywhere in Australia from Hobart to Cape York. lt is true that it has been grown in the Tamworth district for many years. I understand that some portion of the crop grown in past years by Chinese is of inferior quality, and is used for sheep dip. The average smoker likes” to exercise his own choice of the tobacco which he uses.
– The honorable member for New England did not say whether he smoked the New England tobacco. .
– No; he said nothing about its quality. His complaint was that so much of the crop was unsold. If the tobacco grown about Tamworth is of high quality, why should the manufacturers boycott the district? The payment of a duty of 3s. per lb. on tobacco leaf overseas would be commercially unsound, if it were true that millions of pounds weight of suitable tobacco were available in the Tamworth district, at probably any price from 3d. per lb. upwards. A grower in that district has written to me stating that he had been urged by the honorable member for New England (Mr. Thompson) and other members of the Country party to grow tobacco. Those honorable members are misleading the people. Tobacco is a difficult plant to rear; it requires special conditions of soil and climate, and is subject to disease. Honorable members would be better advised if they did not urge people to engage indiscriminately in its cultivation, and intending growers should study tobacco culture, and produce only the high grades. The manufacturers have assured me that they will purchase the whole of the high-grade tobacco leaf produced this year. The growers in the Mareeba district have stated that this year they will refuse even 2s. 3d. per lb., ‘because they know that their tobacco is the best produced in Australia.
– In view of the law which prevents people from using inferior tobacco leaf for any other purpose, should not the Minister make inquiries into the circumstances which prevent the marketing of large quantities of tobacco grown in one district?
– I shall never hesitate to have inquiry made into any matter affecting my department. But the tobacco industry has become a political, as much as an economic, subject. However, if another visit by a departmental expert to the Tamworth district will do any good, I shall arrange it.
and the honorable member for Forrest (Mr. Prowse) have referred to the proposed participation of Commonwealth Ministers in the secession referendum campaign in Western Australia. The Commonwealth Government represents the federation, and, above all other bodies, has a responsibility and a duty to the people to defend and maintain the union. That is the first responsibility that devolves upon us as representatives of the Australian people, and as many Commonwealth Ministers as can be spared will go to Western Australia to participate in the campaign - not unfairly or with prejudice, but for the sole purpose of placing before the people facts which may induce them to continue within the federation, and have their grievances remedied by the Australian Parliament. Although I am a representative of the smallest State in the Commonwealth, I am primarily a federalist, and I believe that secession offers no relief to either Tasmania or Western Australia. Whilst as a State representative I shall be prepared1 at all times to endeavour to remove the disabilities which the less-populous States suffer, as a Federal Minister I shall do everything in my power to defend the federation and discourage any agitation for secession. The Government will do what it can to induce the people of Western Australia to register a negative vote in the forthcoming referendum.
The honorable member for East Sydney (Mr. Ward), on an earlier occasion, asked the Government to make available to honorable members the files of pensioners. I replied on that occasion that, if honorable members could at their own sweet will browse through the files in the department, administration would be impossible. The honorable member has suggested to-day that he was merely asking for an extension of the principle applied by the Repatriation Commission ; but even by that body the files are made available only to the advocates of pensioners in appeal cases. There is no reason why officers of the Pensions Department should not in special circumstances make files available to honorable members if that can be done without involving a breach of confidence; but the practice cannot be permitted indiscriminately. Unfortunately, the honorable member for East Sydney is unable to ask even a simple question without indulging in party insinuations. If he is to be judged as he judges others, I would not care to allow him to peruse the files of the unfortunate old-age pensioners and others, and possibly make political capital of what he discovered in them. In special circumstances honorable members will he permitted to peruse the files of pensioners, as is done in the Repatriation Commission, and every assistance will be extended to them when they are prosecuting inquiries on behalf of pensioners.
I assure the honorable member for Northern Territory (Mr. Nelson) that the important matter of the status of halfcastes in his electorate will be considered by the Government.
Question resolved in the affirmative.
House adjourned at 4.11 p.m.
The following answers to questions were circulated: -
s asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
e. - Information is being obtained in reply to questions asked, upon notice, by the honorable member for Maribyrnong (Mr.Fenton) in regard to the importation of Russian timber.
n asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
r asked the Minister for the Interior, upon notice-
– Tho work to which the honorable member refers was not an unemployment relief work. It was the subject of a requisition received from the Department of Defence, and in accordance with the policy of the Government, quotations were obtained for the carrying out of the work. It is not proposed to alter this practice.
Invalid and Old-age Pensions.
s. - Information is being ohtained, and will be furnished as soon as possible to the honorable member for Dalley (Mr. Rosevear) in reply to questions asked, upon notice, regarding the value of food relief in the assessment of invalid and old-age pensions.
asked the Treasurer, upon notice -
s. - The answers to the honorable member’s questions are as follow : -
son asked the Prime Minister, upon notice -
Will he seriously consider the question of allowing the electors of the Commonwealth the opportunity of expressing their opinion on the constitutional alteration necessary to establisha basic wage and hour standard throughout the Commonwealth?
– The honorable member’s question raises a matter of policy, and it is not the practice to deal with such matters in answer to questions.
Cite as: Australia, House of Representatives, Debates, 10 March 1933, viewed 22 October 2017, <http://historichansard.net/hofreps/1933/19330310_reps_13_138/>.