House of Representatives
31 March 1933
13th Parliament · 1st Session
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- QUESTION
- BANKING AND CURRENCY
- PAPERS
- TARIFF BOARD REPORTS
- QUESTION
- ADJOURNMENT
- ANSWERS TO QUESTIONS
Mr. Speaker (Hon. G. H. Mackay) took the chair at 10.30 a.m., and read prayers.
page 747
QUESTION
PARLIAMENTARY APPOINTMENTS
Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936
– Will you, Mr. Speaker, inform me whether it is a fact that appointments have recently been made, or are about to be made, to Hansard or other parliamentary departments, and that the persons to be appointed are to come from Melbourne? If so, will you see that residents of Brisbane have an equal opportunity of appointment to future vacancies?
Mr SPEAKER:
– The only recent additions to the parliamentary staffs are the usual appointments of temporary typists for work on Hansard, of whom four have been re-engaged, one from Melbourne, onefrom Sydney, and two from Canberra. It is not anticipated that additional appointments will be made to the parliamentary staffs.
page 747
QUESTION
BUILDING TRADES
Effect of Sales Taxation
Mr GABB:
ANGAS, SOUTH AUSTRALIA
– Is the Acting Leader of the Government aware of the retarding effect of sales taxation on building operations? If so, will he give more than ordinary consideration to the possibility of the removal of sales taxation from the principal building materials, in order that more employment may be provided in this industry ?
Mr LATHAM:
Attorney-General · KOOYONG, VICTORIA · UAP
– The Government is aware that sales taxation has increased the price of goods, and also the burden of taxation generally, and that this is having a retarding effect to a certain extent upon industries of various descriptions. That ill effect of the tax is, unfortunately, not confined to the building trade. But it is not proposed to make any adjustments of taxation until the Government is more assured of the financial position than at present, although I assure the honorable member that his request will be taken into account when the programme for next year is being considered.
page 747
QUESTION
ANGLO-RUSSIAN TRADE AGREEMENT
Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND
– Is the Acting Leader of the House able to inform honorable members whether it is the intention of Great Britain to continue the negotiations for a commercial agreement with the Union of Socialist Soviet Republics to replace the agreement dated the 16th April, 1930, which, with the months of grace, will expire in a few weeks’ time, and which in its protocol provided for the granting of credits by the United Kingdom to facilitate trade? Will the Government suggest to Great Britain the possibility of taking advantage of the present opportunity as a means of relieving Australia and New Zealand of the necessity to reduce their butter exports by relieving the British market of imports of that commodity from Russia, which,in 1932, amounted to 16,000 tons - enough to satisfy the suggested dominions quota reduction.
Mr LATHAM:
UAP
– The position with respect to the Anglo-Russian trade agreement is that in October the Government of the United Kingdom gave notice of the denunciation of this agreement, and it will therefore expire within a few days. This action was taken because, by the first article of the agreement, Russian products were to enjoy in the United Kingdom as favorable treatment as that accorded to the products of any other foreign country, and the Government of the United Kingdom wished to free itself of that obligation in order to have complete freedom of action in the negotiation of commercial agreements. The agreement of 1930 assured Australian goods of most favoured nation treatment in Russia so long as Russian goods were accorded most favoured nation treatment in Australia. When the Government of the United Kingdom gave notice of the denunciation of that agreement it announced its readiness to enter upon negotiations for a fresh agreement, and a meeting with that object was held in December. As the result of the arrest of members of the Metro-Vickers personnel, the Government of the United Kingdom has discontinued those negotiations, and I have received information that it is’ probable that an important piece of legislation dealing with this subject may be introduced into the British Parliament to-day - or it may have been introduced yesterday. If it should be determined to proceed with that legislation, the result will be that events should move in the direction which the latter part of the honorable member’s question indicated would be desirable in Australia’s interests.
page 748
QUESTION
MOTION PICTURE INDUSTRY
Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA
-Will the. Minister for Trade and Customs give me a brief explanation of the real effect of the amendment agreed to last night in rela-‘ tion to the tariff item dealing with picture films?
Mr WHITE:
Minister for Trade and Customs · BALACLAVA, VICTORIA · UAP
– A debate preceded the passing of that amendment, and I thought that all honorable members would, therefore, understand what was being done. It was found some time ago that films brought into Australia were being used as negatives for the printing of other positives, and that in consequen’ce the Commonwealth Government was losing a certain amount of duty. An amendment to the appropriate tariff item was. tabled on the 8th March, with the object of preventing this loss. It is thought, however, that certain films will still be able to enter Australia and be used for printing purposes. It has been found that prints can be made from either positive or negative films. The amendment made last night covered negatives or any other films from which it was intended to print films. The result of the amendment should be beneficial to the local film printing industry, which should now receive more work. It should also emphasize the preference to British films, which are admitted free.
page 748
QUESTION
PLAIN AND SHEET GLASS
Mr RILEY:
COOK, NEW SOUTH WALES
– Is the Minister for Trade and Customs able to inform me when the report of the Tariff Board on plain and sheet glass will be tabled?
Mr WHITE:
UAP
– The report has been received, and is being considered by the
Government. It will be tabled before , the item of the schedule to which it relates is reached.
page 748
QUESTION
PROPOSED CONSTITUTIONAL . CONVENTION
Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA · NAT; UAP from 1931
– Is the Acting Leader of the House able to make good the deficiencies in the press reports of the Prime Minister’s statement in Western Australia in regard to the proposed convention on the Constitution? Will the right honorable gentleman give us some, outline of the proposals of the Government respecting this convention which the Prime Minister has announced that he will ask the States to participate in ? Is it intended that the representation of the States shall be equal, and that the delegates to the convention shall be appointed by the State Parliaments,, or will they be elected by the people of the respective States?
Mr LATHAM:
UAP
– The subject-matter of the Prime Minister’s statement was considered by Cabinet’ before the Prime Minister went to Western Australia, and I have no doubt that the right honorable gentleman’s statement was in accord with the decision of Cabinet. This Parliament has no power to legislate for the election of representatives to a convention, although, of course, the Government may invite representatives of the States or of any other bodies to meet for the purpose of considering constitutional alterations. Nor is there power in the parliaments of Australia to give legal effect to the decisions of a convention. Such decisions could only come as recommendations to this Parliament, which, if it adopted them, could subsequently submit them to the people by referendum. What the Prime Minister said, I have no doubt, was, that the Government was prepared to take part in the summoning of a convention, not only df requested by the parliaments of’ the States to do so, but also if there were a general desire that it should seek to elicit information on the subject. In such circumstances we should be prepared to take action by mentioning the matter ito the governments of the States. If there were a general desire on the part of the parliaments of the States that a convention should be summoned, the Commonwealth Government would be ready te assist in the summoning of it. It is obvious that any such action would ib dependent upon any agreement among the States as to ‘the constitution and character of the convention.
page 749
QUESTION
WORKMEN’S COMPENSATION IN FEDERAL CAPITAL TERRITORY
Mr BLAKELEY:
DARLING, NEW SOUTH WALES
– Is the Minister for the Interior aware that when the Lyons Government took office a workmen’s compensation ordinance had been drafted and was ready for gazettal? Will he explain why such extraordinary delay has taken place in the gazettal of the ordinance ?
Mr PERKINS:
Minister for the Interior · EDEN-MONARO, NEW SOUTH WALES · UAP
– It is true that when the Scullin Government left office an ordinance had been drafted, but it was found to be quite impossible to put it into operation. In a sense it was not legal. The matter has been under consideration several times since then, but it is not quite so easy to draft such an ordinance as the honorable member would have us believe it to be. I hoped that it would be possible to submit the proposed ordinance to Cabinet this week, but the pressure of
Other more important business has prevented this from being done. The proposed ordinance has passed many times between my department and the AttorneyGeneral’s Department with the object of bringing it into conformity with the legists tion of the various States.
page 749
QUESTION
MATCH INDUSTRY
Mr GREGORY:
SWAN, WESTERN AUSTRALIA
– I ask the Acting Leader of the House whether he will have prepared an estimate of the losses of revenue sustained by the Commonwealth in consequence of the proclamation of an embargo on the importation of matches in 1922, and the subsequent embargo of about three years ago? I realize, of course, that any such estimate would be only approximate.
Mr LATHAM:
UAP
– As the honorable member has suggested, any such estimate would necessarily be of a rather speculative nature. Certain information on this subject was contained in the recently circulated report of the Tariff Board on matches. I shall consider his .request, but as at present advised, I do not think that the Government is in a position to add any useful information to thai contained in the board’s report on the subject.
page 749
QUESTION
PUBLIC SERVANTS
Sale of MELBOURNE Properties
Mr FENTON:
MARIBYRNONG, VICTORIA
– In the Melbourne Age, dated 30th March, the following statement appears: - ‘
Under instructions from the Common-wealth of Australia, owing to the removal of public servants to Canberra, Sydney Arnold, Best and Company sold by auction yesterday No. 3 Staughton-road, South Camber-well, comprising a weatherboard villa, of five rooms and conveniences, on land 50 feet by 165 feet 7 inches. The price paid was £850. Other properties will be submitted by this firm next week, when terms up to 25 years will be given.
Will the Minister for the Interior state whether these -terms will be given to every purchaser, and whether the payments of interest and principal are to be collected by the auctioneer effecting the sale, or by the officers of his department?
Mr PERKINS:
UAP
– I regret that I am not able to give a complete reply to the honorable member’s question, but the conditions of sale are exactly the same as those under which were sold the properties of those public servants who have already been transferred to Canberra.
page 749
QUESTION
WINE INDUSTRY
Mr GABB:
– Will the Minister for Trade and Customs state whether the newspaper report is correct that Mr. Buring is to conduct an inquiry into the wine industry? If so, how is it that an interested person has been chosen for. this duty, when the Government has at its disposal an independent report - the Gunn-Gollan report - on the industry?
Mr WHITE:
UAP
– The honorable member is well aware that there are complex problems associated with the wine industry, and he has attended some of the conferences I have held with various interests. The Gunn-Gollan report is in the possession of the department. Mr. Gollan who, at the time of the making of that report was an officer of the department, is not now available, as he is in private employ and absent from the Commonwealth, so that it has been necessary to obtain outside advice. The Government was so anxious to assist the wine industry to regain prosperity that it looked about for a man who would be able to furnish it with a report of value, and I am sure the honorable member could not name a better man than theGovernment has chosen. He has been asked to furnish a report upon which the Government can take action to improve the conditions of the industry.
page 750
BANKING AND CURRENCY
Formal Motion fob Adjournment.
Mr SPEAKER:
– I have received from the right honorable the Leader of the Opposition (Mr. Scullin) an intimation that he desires to move the adjournment of the House this morning for the purpose of discussing a definite matter of urgent public importance, namely, “ The necessity for an inquiry into banking operations, and their effect upon Australia’s economic position “.
Five honorable members having risen in support of the motion,
Mr SCULLIN:
Yarra
.- I move -
That the House do now adjourn.
At the outset I wish to emphasize that the investigation which I propose is not suggested because of any apprehension about the safety of the banks in Australia. The business of banking is based on credit, which is confidence, and I do not desire, nor do my colleagues, even to hint at any thing, which might shake the confidence of the public. Parliament, however, owes it to the nation to use its power over banking conferred by the Constitution, and to enable us to do that effectively we should inquire into all the ramifications of banking and currency. The Commonwealth Bank has proved a bulwark to the financial stability of this nation during the present economic crisis,, just as it did during the war. A tribute was recently paid to it by the Prime Minister (Mr. Lyons), who is reported in the Sydney Morning Herald of 30th March to have stated, when speaking in Western Australia - ‘
But for the assistance of the Commonwealth Bank the “trading banks must have failed during the depression.
The Commonwealth Bank has done great service to Australia, although in recent years its operations have been seriously restricted by government policy. It is my firm conviction that those restrictions should be removed, so that the Commonwealth Bank might be free to extend its operations. An investigation into banking would bring forth such facts as would convince the public and this Parliament of the desirability pf removing the restrictions from the Commonwealth Bank.
It is recognized that the crisis through which every nation is now passing is mainly monetary. The monetary machine has failed to meet the requirements of the people in almost every country, including Australia. Monetary reform is imperative if we are to return to a measure of prosperity in the near future. The part that the Australian banks have- played in creating a boom and in accentuating depression, first by the expansion of credit, and then by its contraction, should be thoroughly examined. Mere denials by representatives of the banking institutions are not sufficient; the public to-day wants the facts. Credit is the life blood of every industry, and those who have the power of expanding and contracting credit hold in their hands enormous power over every industry in the country and, to a very large extent, control also governments and policies. That is too great a power to - be left in the hands of institutions whose principal aim is profit. It is my opinion - and I think is increasingly held throughout Australia - that banking should be under complete national control, and to that end the powers and activities of the Commonwealth Bank should be extended.
Macleod, who is recognized by bankers as a great banking authority, and whose writings are regarded by them as textbooks, has said -
A bank is a manufactory of credit. The very essence and nature of a bank is to create and issue credits payable on demand, and this credit is intended to circulate and perform all the purposes of money.
The control of the note issue and coinage has been reserved to the nation, but the creation of credits is still in the hands of private banks. Power to create credit i3 power to create money, and for the use of this created money the banks charge 5 or 6 per cent., or even more, to the borrower. In good times the banks inflate credits in order to make larger profits; then, when the wheel of fortune turns, and signs of depression are seen on the horizon, they begin to deflate in order to cover themselves. In that way they first create a boom, which is unhealthy, and then accentuate the succeeding depression, with consequent injury to industry and employment. Overdrafts are withdrawn just at the time when the borrowers . need them most. Thus we have a circle of inflation, followed by deflation, depression and industrial and commercial stagnation.
Investigations are made by the Tariff Board into every industry in Australia that is receiving protection. Why should not an investigation be made into banking, which affects all industry, and which is the greatest and most powerful factor to-day in the industrial and commercial life of the nation? The privileges which banks enjoy in the community are infinitely greater than those enjoyed by the most highly protected manufacturing industry in this or any other country. Without the slightest hesitation we agree te the fullest investigation into the details of the business of any manufacturer who seeks protection to establish an industry which will give employment. We are, therefore, justified in seeking a similar investigation into the operations of banking, with particular relation to the effect on our whole economic position. For too long have the people of Australia accepted the protestations of the bankers themselves that they are rendering a great service at very little cost. Their recently published statements to that effect, and their resentment of even the mildest and most honest criticism, show that they do not wish to have the spotlight turned on their activities. They are conducting a campaign of advertising in the newspapers to prove that they are working for paltry profits, and this despite the record of their enormous profits revealed - to say nothing of those which have not been revealed. Those advertisements, press statements and references in their own official publications are a challenge to this Parliament to hold an impartial investigation to ascertain the facts. That is what I ask for.
The cost of the banks’ services to the community can only ,be measured by a full disclosure of the rates’ levied on industry by bankers, and by a full disclosure of the profits made, including dividends, profits placed to reserve and hidden reserves. The latest Commonwealth Year-Book gives some information on this point, but not all. It shows that the paid-up capital of the trading banks of Australia is £39,450,000; that the reserve profits amount to £31,930,000, and that for the the year ended the 30th June, 1931 - the latest for which the returns are recorded in the Year-Book - the undistributed profits totalled £5,867,000. That was not a most profitable year; it was, on the contrary, a year during which almost every industry in Australia was hard pressed, and when unemployment had almost doubled.
Banks control interest rates, and interest, as every one knows, is to-day a crushing burden. Some reduction has been made, but it is evident that industry cannot continue to bear the present rates of interest. Unless relief is given, industries will go to the wall, both primary and secondary, but particularly the primary industries. They are not able to carry the burden they are asked to carry. The banks claim special credit for themselves because they have given assistance to governments during the last three years. Everything they have done has been freely acknowledged. The treasury bills they took up in order to finance government activities were probably the most profitable investments they could make, because they were able to use a large amount of their cash reserves for thu purpose. Moreover, they did not take up the bills unless they had received an assurance that the Commonwealth Bank would re-discount them at any moment. Therefore, it was really the Commonwealth Bank that carried the whole of the risk for the accommodation given to governments during that period. I do not deny that they rendered some assistance in spreading the liabilities over a wider area; but the real risk was taken by the Commonwealth Bank, while they shared in the profits. Moreover, while claiming so much credit for what they have done towards enabling governments to carry on and pay their way, they should also remember . that had those governments defaulted they .would have crashed. Selfpreservation demanded that they assist the Governments of Australia through a critical period. Those Governments, however, also played their part. If the banks are able to establish the claim that they are constantly making, they should welcome the inquiry that I have suggested. Credit, in reality, is public confidence. Yet the Governments of Australia, which represent the public, have to borrow from the private banks what really belongs to the public, and to pay interest upon it. It is time that that position was reviewed. I am not one who believes that credit can be created ad libitum; I know that there are limitations which have to be observed. But those limitations would be fewer in the case of a national than in that of a private institution, because of the greater degree of confidence that the public would have in their own concern. That is apparent to-day in regard to the Commonwealth Bank.
I have not been enamoured of royal commissions in the past, because, in the majority of cases, they have fulfilled no useful purpose and have been appointed merely with the object of side-tracking proposals that have been advanced. If that were likely to happen in this case, I should not urge this inquiry. I wish to have the matter tackled earnestly, and a proper investigation made, because this is the outstanding question of the day. We need to ascertain the part that the banks have played in creating or accentuating the crisis, and the extent to which a change in banking control would rectify the position. We also need to. learn what toll is levied upon industry by the banks in comparison with the services that they render, and what practical steps ought to be taken to advance the scope and the powers of the Commonwealth Bank until it has obtained complete national control. That would be a most useful investigation, out of which should emerge a most valuable report.
I make no apology for having raised this question, despite the criticism that has been levelled against me because I have done so. The weakness of the- case of those who defend the private banks lies in the fact that their only answer to any criticism that I have made has been personal attack. Let them answer the facts. Let them come right into the open, and reveal everything. Let them make plain to the people of this country the service that has been rendered by the private banks, and the price that the people have had to pay for it. Let the facts be disclosed so that we may learn whether a better service may be substituted for the existing one, at a less cost. There is a sound reason for the desire that exists to-day for banking and monetary reform. We see all round us the degradation of unemployment. We see thousands of families in want while Australia is teeming with wealth. Workers are unemployed, farmers are facing ruin, not because the land is infertile, not because the seasons have been unfavorable, but because the monetary machine has failed us in our hour of need. That failure, it is true, is worldwide; and it is the big problem that has to be tackled. President Roosevelt. in his inaugural address to Congress, made striking references to banks and bankers. I cull from his remarks one phrase - not the strongest, because I do not wish to associate with this motion some of the language that he used. He said -
Plenty is at our doorstep, but the generous use of it languishes in the very sight of supply. Primarily, this is because the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and incompetence.
That is a striking indictment by the newly-elected president of one of the biggest nations in the world. It may be argued that banking in the United States of America is a different proposition from banking in Australia. That is true in relation to numbers of their banks, but it does not apply to all of them. Having that in mind, I have refrained from quoting the strongest language used by President Roosevelt concerning those who have had control of the monetary position in that great country.
It may be said that we are looking for monetary reform on an international basis, and that the Ottawa Conference carried a resolution affirming that the British Empire should give a lead to the other nations of the world. It may also be urged that we should await the outcome of the financial and economic conference that is to be held shortly. I contend, however, that while any practical, proposals that may emanate from that conference will be welcome, we cannot afford idly to wait for reform on an international scale, but must proceed immediately to set our own house in order. Consequently, as a preliminary step, I urge the appointment of an impartial and a competent royal commission to inquire into every phase of banking and currency in Australia.
Mr LATHAM:
AttorneyGeneral · Kooyong · UAP
– The right honorable the Leader of the Opposition (Mr. Scullin) began his speech with the assurance that he did not desire either to say or to do anything that might shake the confidence of the people of Australia in the banking institutions of this country. Indeed, it appeared that the right honorable gentleman was prepared to concede that the banks as a whole, including the Commonwealth Bank, had rendered a real service to Australia during the crisis through which we have been passing within recent years. But he has urged that an inquiry should be held into the operations of the banks and their effect upon Australia’s economic position, and has expressed the belief that such an investigation might lead to the development of a policy that would be of substantial assistance in dealing with the problems of unemployment and of low prices which are pressing so heavily upon all the countries of the world at the present time. The right honorable gentleman went so far as to say that the trouble of the world to-day was monetary in character, and that a change in the monetary system would remove it.
It appears to me that the holding of an inquiry of the nature suggested would not be at all conducive to the maintenance of that confidence which, I am glad to say, the people of Australia have in their general banking system. The objective of the right honorable gentleman, as he has frankly admitted, is the complete national control of banks.
Opposition Members. - Hear hear !
Mr LATHAM:
-r-Of that there is no doubt The suggested inquiry would be the first step towards obtaining material upon which a policy for the nationalization of banking might be founded. Consequently the motion must be regarded from that point of view.
At the present time the management and control of banking, subject to legis lative regulation, is in non-political hands. This Government stands for the retention of the control of banking, whether through the Commonwealth Bank or through other banks, in nonpolitical hands, and for the exclusion of what the right honorable gentleman has referred to in the rather appealing phrase, “ complete national control.” In other words, those who sit on this side of the House are opposed to the nationalization - and, if there be a distinction, the socialization - of banking, in ‘ which the right honorable gentleman and his supporters believe.
This matter may be regarded in the first place from an Australian point of view, and in the second place from a world point of view. First we must remember that we are in Australia, and not in the United States of America. Oar banking position is sound, while for some years past thousands of small private banks have failed every year in the United States of America. Those of us who have studied the matter are aware that-even some of the large banks in that country have been associated with what are described as trust companies, which are speculative investing companies, and that generally American banking has been conducted on an unsound foundation. The banking system of Australia is entirely different from the American system. In fact, the people of this country have complete confidence in Australian banking. That is shown by the increase in the deposits during the difficult period that we have recently experienced. At December, 1930, the deposits bearing interest amounted to £193,385,000. By December, 1932, they had grown to £216,531,000. During that period, there was an increase also in the deposits not bearing interest. The advances made by the banks, including those made to Australian Governments, Commonwealth and State, increased from £281,436,000 in December, 1930, to £295,370,000 in December, 1932; although, as is well known, the general volume of business gravely declined during that period.
One of the most important elements in the consideration of the question that hai been raised by the Leader of the Opposition is, of course, the interest rate - the pi-ice of money. The prices of everything else have come down, those of primary products to a much greater extent on the whole than those of secondary products. But the tendency has been for the price of money to remain bigh, and out of relation to other prices, partly on account .of the long-term contracts under which money has been borrowed. In Australia a definite policy has been followed by the* Commonwealth Government in co-operation with the banks of this country with the object of bringing down the price of money. But the price of money will not be brought down by any form of direct action; that is one of the most certain ways of raising it, because the effect is to destroy the confidence of the people, and to make investors less willing to lend. What has happened in connexion with the price of money in Australia within recent years? On the 1st January, 1931, the overdraft rate at the Commonwealth Bank waa per cent.- At the present time it is 4-J per cent. The rate for rural credits advances was 6 per cent, on the 1st January, 1931, and is now 41 per cent. The fixed deposit rate for twelve months was 5 per cent, on the 1st January, 1931, and to-day it is 2f per cent., the rates for -24 months being respectively, 5£ and 3 per cent. The treasury bill discount rate at the 1st January, 1931, was 6 per cent., and at present is 2 per cent. The Com- . monwealth Savings Bank deposit rate was 4 per cent, on the first date, and is now 24 per cent. Accordingly, the Commonwealth Bank, with such assistance as the Commonwealth Government has been able to give to it, has been pursuing a definite policy designed to cheapen money by the reduction of interest rates. The figures that I have quoted conclusively demonstrate that that is the case. Similar figures are not available in the case of the private banks. But it is well known that overdraft rates have been reduced. By some banks they have been reduced very substantially indeed; others not so much ; but a reduction has occurred in all banks, and a condition of further reduction is the maintenance of confidence and a feeling of security. There are few things which at present, apart from legislation directed absolutely against the banks, could undermine that sense of con- fidence and security more than to hold a general inquiry, to overhaul and rake the whole of the banking system as the first stage of the nationalization of currency and credit. It has been said in many places that the banks are making enormous profits. Those allegations have been investigated. While I am not pretending that I have worked out for myself the figures that I am about to quote, I believe the information to be correct. It is well known that the dividends of the private banks have diminished corresponding to the reductions in connexion with other forms of finance. In 1928 the profits shown in the balance-sheets of the leading banks of Australia, of which there are eleven, I think, although nine are covered by my figures, amounted to 7.93 per cent, of capital and reserves, and 1928 was the highest year for bank earnings.
Mr Scullin:
– That is the profit on the paid up capital, but the reserves are accumulated profits.
Mr LATHAM:
– Everybody knows that the reserves are largely the accumulated profits. Although the profits 011 capital and reserves amounted to 7.93 per cent, in 1928, they represented only 2.75 per cent, in 1932.
Mr Scullin:
– There are also undisclosed reserves.
Mr LATHAM:
– Does the right honorable gentleman say that the figures I have quoted are inaccurate? The important thing is to take the same basis for the purpose of comparison at the beginning and the end of the period. I am speaking of the profits, and am showing that there has been a large reduction.
In recent years a good deal of controversy has been roused over banking subjects, and many persons’ who have not been recognized hitherto as great authorities in the world of banking and high finance, have declared that they are able to solve the problems of to-day by the nationalization of credit. It surely ought to be obvious enough that under whatever control credit is, it is the manner in which credit, if it continues to exist, is utilized that is important. Merely to say we shall nationalize credit gives no guarantee of an improvement in any direction at all. We have seen in recent years that in direct proportion to the extent and strength of propaganda for the national control of credit, the national credit has gone down, and when that propaganda has diminished or ceased, or has been defeated upon the political arena, national credit has risen.
I refer honorable members to the report of the Commonwealth Bank of Australia, which was laid on the table of this House yesterday. They will notice that it i3 stated there that ‘the 5 J per cent. New South Wales stock falling due in London in November, 1932, was quoted in 1931 at £63, although £100 was repayable in the following year. The interest rate of 5£ per cent, on £63 is equivalent to about 8£ per cent., and between £63 and £100 there is a difference by way of profit of £37. That is an interest rate of something over 40 per cent. That rate obtained at the time when the movement in Australia for governmental control of banking had attained its maximum momentum. However, after that propaganda had been defeated, and after the Government which stood for it had been beaten in various arenas, and the administration of the affairs of the Commonwealth and of New South Wales were in the hands of governments opposed to what is described as the national control -of credit, this stock was converted at an effective interest rate of £4 ls. 2d. The 4 per cent, stock which was placed on the London market only the other day now stands at £101 lis. 3d., according to the reports received this week. So the position is that as the propaganda in its various forms for the national control of credit increases, so does the price of money go up - interest rates rise and values fall. On the 28th September, 1931, the Commonwealth 5 per cent, stocks maturing on the London market in 1945 to 1975, stood at £55 15s. That is what people thought £100 of Australian stock was worth at a time when there was a very strong movement in New South Wales for the governmental control of banking. On the 27th March, 1933, this stock had risen to £106 18s. 9d.
Not only has the existing banking system of Australia - the Commonwealth, and the other banks - maintained and improved Australian credit in a most remarkable fashion in recent years, but as the right honorable gentleman has indeed acknowledged, the banks have also given a very great deal of assistance to the governments of the country. The short term accommodation provided by the banks to assist the governments of Australia now amounts to the large sum - taking London and Australia together- of £86,470,000. In that instance there has been an extension of credit which is very real. The financial institutions of Australia are of various kinds. Some are wise and benevolent; some are not. On the whole - there are, undoubtedly, exceptions - they have behaved very fairly towards the people of Australia, because they have recognized that in the long run their own interests are bound up with those of the people. I read the other day that last year in Iowa, United States of America, no fewer than 61,000 farmers had been sold up under their mortgages. We all know that many farmers and many other people are mortgaged in Australia, and some mortgagors have had their properties sold. But anybody with any knowledge of private finance in Australia at present, whether managed by banks or other large investment institutions, is aware that mortgagors all over the country are being carried, and that the policy of the Australian institutions has been just the opposite of that in America, to which I have referred. . That has been to. the advantage of the community as a whole, and, ultimately, I think, will prove advantageous to the financial institutions themselves. Accordingly, it appears to me that not only have no facts been adduced which indicate the desirability of an inquiry into banking operations in Australia, upon the supposition that something is wrong with our present system, but, on the contrary, the facts show that it would be very wise at the present time to let well alone, and to allow the development in the reduction of interest rates along sound lines to proceed further as it is taking place to-day. [Leave to continue given.]
I have spoken of the position in Australia. So far as the world situation is concerned, I can refer to it only in a most summary manner. If honorable members turn to the Macmillan report, paragraphs 205 to 210, they will find there an examination of the statement that the world crisis is due to monetary conditions, and they will read the considered judgment of the commission that’ it is wrong to say that this crisis is due exclusively to monetary factors, but that it is due to. intractable nonmonetary economic phenomena to which no monetary system is equal. A world economic conference will be held shortly, at which consideration will be given by probably the greatest experts in the world to the following subjects -
- Monetary and credit policy;
- Prices;
- Resumption of the movement of capital;
- Restrictions on international trade;
- Tariff and treaty policy;
- Organization of production and trade.
An examination of monetary and credit policy will, therefore, be made by a most highly skilled body of men at the coming conference. We will do well to await their report.
The Government hopes at an early stage to consider the desirability of some degree of re-organization of the Commonwealth Bank, in order ito clothe it formally and fully with all the attributes of a central bank. We propose to consider the separation of the central bank from the trading bank at present conducted by the Commonwealth Bank. The resistance to political interference with the banking system has been a wonderful thing for Australia in recent years, and I suggest to the House that it will be wise to .continue that policy. To speak of the nationalization of credit is to tread on very dangerous ground. If we nationalized wheat or boots they would at least remain wheat and boots; but, if we nationalized credit, we would not be at all sure that any credit would remain. The nationalization of credit would, I believe, mean the destruction of credit, and the ruin of values. Therefore, I put it to the House that any action now that would arouse apprehension and fear would be particularly ill-timed. We should run the risk of destroying confidence by holding what the facts show would be an unnecessary inquiry.
Mr PATERSON:
Gippsland
– I believe that good would result from an inquiry carried out by a thoroughly competent and unbiased body. If the banks are doing everything that can reasonably be expected of them in the public interest, they have nothing to fear from such an inquiry; but if, on the other hand, the present banking practice can be improved in the public interest, that, improvement may possibly be brought about by such an inquiry. The Acting Leader ‘ of the House (Mr. Latham) said that the Commonwealth Bank and the trading banks had rendered good service to governments in this country in their time of difficulty. That cannot be gainsaid. The Leader of the Opposition (Mr. Scullin), himself, who only recently had the responsibility of government on his shoulders, will, I think, admit the great help which the banks rendered to the various governments of Australia during the recent difficult years. There are, however, many in the community who consider that the banks should do more than they are doing for individuals. The Commonwealth Bank has a great advantage over the trading banks in .that it escapes from the taxation which they have to pay. When we are contrasting the rates ‘of interest and other charges of the trading banks with the rates charged by the Commonwealth Bank, it is only fair that we should take that factor into consideration. The trading banks have to meet the taxation imposed on ordinary business concerns, while the Commonwealth Bank escapes these levies. One feature of the present time is . the extraordinary number of amateur financial and currency experts throughout the world, ranging from geniuses, on the one hand, to cranks, on the other. There are probably more of the latter than of the former. To a number of these cranks I have granted interviews. I have sat patiently while they have expounded many and varied schemes for correcting all the ills from which, not only Australia, but other countries, also, are suffering. They remind me of that class of person which rushes in where angels fear to tread. It i3, indeed, surprising how many people are prepared to follow such leaders. In difficult times like the present, more than at other times, we should beware of persons who advocate rash experiments. Perhaps the best way of safeguarding ourselves from reckless changes would be to disarm the critics by proving, either that the present methods are the soundest that could be devised, or, alternatively, that the existing system can be improved upon. I speak for every member of the Country party, when I say that I “am opposed to any kind of political control of banking. If an inquiry did nothing else than convince those people who are inclined to hanker after the political control of banking that that control is fraught with danger, it would be justified.
The Acting Leader of the House alluded to the price of money, and said that a reduction could not be brought about satisfactorily by direct action. I agree with him ; but I believe that interest rates could be lowered automatically, by removing the tremendous disparity in taxation which exists between income earned from gilt-edged securities and income derived from other forms of investment. That, it appears to me, is the . only means of bringing down the interest rates which ordinary enterprises have to meet to something more closely approaching the rates charged in respect of gilt-edged securities. The wide margin between these rates to-day is due almost entirely to the difference in taxation on incomes from bonds and that on incomes from property investments other than bonds. A man whose money is invested in bonds pays one tax, but another man who has invested his money in other forms of enterprise may pay five income taxes, namely, the ordinary Commonwealth tax, the 2s. super tax, the State income tax, the State special tax, and the State unemployment tax - from the last four of which the bondholder escapes. In my opinion, to reduce taxation is the only means of bringing down interest rates. We cannot do this by passing legislation to reduce rates compulsorily. . I am not prepared to support the motion for the adjournment of the House, and thereby take the business out of the hands of the Government; but I should welcome the appointment of a thoroughly competent and unbiased body to inquire into presentday banking practice in Australia.
Mr CASEY:
Corio
.- 1 presume that this is the first official shot in the battle that we shall hear a good deal about in the future. There is no necessity to camouflage the position. I take it that the real reason for the motion is that the’ Labour party sees in it the quickest road to universal socialization in this country, which we may call the high-level ‘bridge by which the various factions in the Labour movement are to come together. The Leader of the Opposition (Mr. Scullin) enlarged the scope of his motion in his opening sentence, by referring to the ramifications of banking and currency, which, apparently, he wished to be investigated, as well as banking practice itself. If he had had time, he would probably have gone on to cover the necessity for the control of prices, and from that the many other questions that have occupied the attention of economists who have sought the real reasons for the depression.
Mr Blakeley:
– The honorable gentleman has a vivid imagination.
Mr CASEY:
– All of those points were touched on by the Leader of the Opposition. In paying a tribute to the Commonwealth Bank, he said that, unfortunately, it was restricted in its activities. He urged that all bars to its free working should be removed, and that the Commonwealth Bank should function as a central bank. One remembers the efforts of his Government to produce what it was pleased to call a proper central bank. In spite of Mr. Theodore’s protestations in December, 1931, that, if returned to power, a Labour government would inaugurate a proper central bank along the lines of the Macmillan report, that report was diametrically opposed to State control of banking. The Leader of the House has criticized the assumption of the Leader of the Opposition that monetary reasons alone have caused the depression.
Mr Scullin:
– I did not say that; I said that they were the main causes of the depression..
Mr CASEY:
– The right honorable member stressed that point to such an extent that it overshadowed his other remarks. In any case, it is debatable whether monetary reasons are even the main causes of the depression. Many attempts have been made to thresh out this subject. The Leader of the House dealt with the causes of the depression other than the monetary causes. The principal argument of the Leader of the Opposition was that the banks create a boom in good times by undue lending, and that they contract or deflate their operations in bad times. That charge has not been proved by the right honorable gentleman or, indeed, by any one else. It is a fallacy which has been repeated from mouth to mouth for many years by those who want to create an anti-banking complex. The advances made by banks are regulated by the ratio between cash and deposits. That ratio is at the maximum a short time after a bank has been created. Thereafter advances are increased only by the acceptance of additional cash or deposits. It is due to the people of Australia that the right honorable gentleman should adduce some evidence in support of his statements, which are given prominence in the press, and influence people who are unacquainted with the facts. I challenge him to produce facts in support of his main contention. We are told that the banks claim credit for. the assistance they have given to governments in recent years. The Leader of the Opposition said that the trading banks accepted treasury-bills in large numbers, and he scourged them with whips because they asked for the right of discounting them with the Commonwealth Bank. Apparently, that was a grievous sin. I ask the right honorable gentleman to tell us how many of those treasury-bills have been so presented for re-discounting.
Mr Scullin:
– The right to re-discount them is the greatest security held by the banks. They will not ask to re-discount them until danger threatens.
Mr CASEY:
– I disagree with the right honorable gentleman. Not until prosperity begins to return will the banks ask for any of these bills to be re-discounted, if then, while things are bad they will continue to hold them. The banks have acted’ magnificently during this depression, yet the right honorable gentleman saw fit to criticize them unmercifully. The banks have canalized the savings of the people into the service of the governments to the utmost limit of safety, and they deserve more magnanimous thanks than the Leader of the Opposition has thought fit to extend to them. The Leader of the Opposition said that the measure of credit- is the measure of public confidence, and that credit should be made available on much easier terms than is now the case. Was he referring to private credit or to public credit? It must be one or the other, or both. I take it that, in respect of private credit, he would not ask for a private loan without offering collateral security for it. If the security were sound, he would be given credit. That, in my opinion, is the principle which must be followed in all banking operations ; any more liberal method would be ruinous folly. In respect of government credit, the right honorable gentleman wants the Government to have less restricted access to the sources of public credit than it has now. In my opinion, it would be a catastrophe if the necessity for living within its income were removed from any government and it had unrestricted, or less restricted, access to the sources of public credit. The right honorable member quoted from a” statement by the recently elected President of the United States of America in which he said that the monetary machine had failed in that country’s hour of need. That was merely a rhetorical expression which gets us nowhere - a platitudinous indictment of the monetary system which, I suggest, proves nothing. Occasionally during his speech the mover of the motion looked into the larger field of price level control, a legitimate field of inquiry and research which, I submit, will not be advanced by a limited inquiry into banking in this country. The right honorable gentleman referred to banking operations as if they were confined to banks, whereas they are also carried on by many other institutions in this country, among these being prominent pastoral houses, savings banks, insurance companies, trustee companies, and’ building societies. All of these institutions accept deposits and make advances, and any inquiry into banking should cover their operations as well as those of the banks. I am concerned to know of what value an inquiry into banking in Australia would be in view of the Macmillan report, which dealt with the whole range of banking and financial operations in England. It was the most thorough investigation into this form of business activity that the world has ever known, and as there is no essential difference between the banking systems of Britain and Australia - both are modelled on the same historical precedents - recommendations of the Macmillan Commission may be applied with equal force to banking in this country. It is, however, true to say that the Australian banks are inclined to a more liberal policy in that they make advances on a slightly wider range’ of securities than is the case in Great Britain; but, on the other hand, they are slightly more restricted in their operations by the non-existence of what is normally known as a money market in Australia.
I doubt that the people of Australia will be misled by this attempt to insert the thin end of the wedge into our banking system with a view to its ultimate socialization. The lessons of the past have not been wasted on them. They remember, in particular, the complete and dramatic failure of Mr. Theodore, during his leadership of the Queensland Government, to make a success of his manifold socialization schemes, backed though they were by the whole financial resources of the State. Those lessons, I repeat, will not be wasted on the people of this country. They will, doubtless, remember also that, if ever Labour gets back to power in the Commonwealth, Mr. Theodore will be the directing force of Labour’s monetary policy.
Mr SPEAKER:
-The honorable member’s time has expired.
Mr JAMES:
Hunter
.- I agree with the right honorable the Leader of the Opposition (Mr. Scullin), -that an inquiry into the operations of the trading banks of this country is long overdue. One could not expect the Acting Leader of the House (Mr. Latham) to approve of the motion, because, naturally enough, he prefers the continuance of the existing system. He declares that the nationalization of banking would be a dangerous departure from the existing system. He does not deny that, in time of war, the credit resources of the nation are brought under national control. This being so, we contend that in peace, also, it is the right policy to adopt, so that credit may be made available for the employment of our people.
I am in agreement with the Leader of the Opposition in this matter, and I regret very much that, when he was in power he did not take advantage of the opportunity then open to him to make the inquiry which he now declares to be necessary into the ramifications of banking in this country. His timidity in this matter when he was in power was really responsible for the destruction of the Labour party in this House, and furnished the reason for the separation of the group to which I belong from the Federal Labour Party, because in season and out of season we have been advocating the socialization of banking.
Mr Scullin:
– The honorable member forgets that we did bring down legislation, but it was defeated in the Senate.
Mr JAMES:
– The right honorable gentleman is always offering the excuse that the Senate was the stumbling block to the adoption of the Labour party’s monetary policy. But he had his remedy. He could have sent his financial proposals up to the Senate a second time. “We fought out this issue in the party room.. The right honorable gentleman was urged to make monetary reform a vital issue. He admitted that while he and others, including myself, would be returned, he feared there would be too many casualties in the ranks of the party, and he was applauded by the majority of the party for saying that. So he cannot now deny that he was asked to fight the Senate on that issue.
The trading banks of this country dictate government policy. The Scullin Ministry had a very bitter experience in this regard, because, apart from the defeat of its banking proposals in the Senate, and the subsequent disintegration of the Labour party in this House, we also had the spectacle, at the Premiers Conference, of governments going cap in hand, to the associated banks for financial assistance, which was made available on the distinct understanding that governmental expenditure would be adjusted in conformity with the bankers’ ideas. So we see that the hanks of this country dictate the policies of all governments, Labour or Nationalist. Following the adoption of the Premiers plan, we had cuts in wages and salaries, interference with the conditions of the workers, and drastic curtailment of social services and pension payments - all at. the dictation of the money power. Where is our Christianity when we allow this money power to exert its soulless sovereignty over human beings, working such havoc and causing such widespread misery and distress? Although we live in an age of plenty, it is not possible for hundreds of thousands of our people to obtain the things essential to their comfort. The present state of affairs is directly due to the fact that control of the money power is in the hands of the few, who have a stranglehold over the rest of the human race. Governments are powerless. We had ample evidence of this at the Premiers Conference, which evolved the Premiers plan. On that occasion governments had to apply to the associated banks for assistance. This credit, which actually belongs to the people, is released or contracted at the will of those in control of the trading banks, in order that they may make greater profits out of the people.
According to the summary of Australian Statistics, issued in December, 1930, the actual amount of legal currency in Australia does not exceed £65,000,000. The associated banks’ holdings of legal tender, by which is meant currency, implemented by government Commonwealth notes and gold, silver and copper coins, was £47,581,000. Against this, they held deposits at call, in current accounts, to the extent of £96,012,013, and fixed deposits amounting to £208,950,686, making a total deposit liability of £304,962,749. If their legal currency holdings be deducted from the volume of their deposits, we find that £257,381,749 of Australian bank deposits in that year were bank-created currency, or, in other words, illegal cheque pounds. When a Labour government gave effect to its banking policy in 1912 by inaugurating the Commonwealth Bank for the control of legal currency, it was thought that the Commonwealth would have effective control of the issue of credit in this country. But the associated banks have since extended their cheque system to such an extent that the issue of this form of currency now exceeds by many millions of pounds what was then regarded as the margin of legal currency. When the Commonwealth Bank was established, it was believed that the credit resources of this country would be under national . control per medium of the Commonwealth Bank, but the unrestricted use by the private banks of the cheque system has made that impossible, and now the people of Australia are feeling the full effects .of the depression, which is due, for the most part, to the manipulation of the money power by private banking institutions. The only remedy is national control of our credit resources.
Mr SPEAKER:
– The honorable member’s time has expired.
Mr BLAKELEY:
Darling
.- The discussion this morning has revealed the chasm which divides the contending parties in this House. The Acting Leader of the House (Mr. Latham) is definitely opposed to any interference with the present system of private banking for private profit. The honorable member for Corio (Mr. Casey) made a speech on exactly the same lines. The intention of both honorable gentlemen was, of course, to prevent any investigation whatever into the existing system, because it might prove to be the thin edge of the wedge, which would expose to public view the ramifications of private banking in this country. It is, I suppose, quite natural that the right honorable the Attorney-General and the honorable member for Corio should not approve of the monetary policy of the Australian Labour party, because they represent a very different section of society - the bankers and shareholders in banks. But I remind the House that an appalling, catastrophe has overwhelmed civilization within the last two or three years. It is estimated that, in the world to-day, there are ho fewer than 30,000,000 persons unemployed, and if we take into account the number of their dependants, we may safely estimate that 200,000,000 of the world’s population are on the verge of starvation and in receipt of some form of government assistance. There has been a remarkable development of the capitalistic system in recent years. The payment of bonuses and huge salaries to scientists and leaders of industry has led to an astonishing expansion in the output of industry. It is no “uncommon experience for 70 men to produce what it took 100 men to produce ten years ago. It is estimated that because of this extraordinary development, half of our population will, in a few years, by working 48 hours a week, be able to produce sufficient to supply the requirements of the whole population. The Leader of the Opposition (Mr. Scullin) has made it clear that our defective monetary system has been mainly responsible for our present economic condition. The private financial institutions have shown themselves to be utterly incapable of keeping pace with the marvellous development of production made by another section of society, because of the application of science and mechanics to industry. Everything is being produced to make this a happy and contented world, but instead of exploiting to the utmost every part of nature’s rich endowment to civilization, the money lords sit in their offices obsessed by nothing but dividends of 5 per cent., 6 per cent., 7 per cent., or 10 per cent., or, in the case of the Australian banks, up to 12-J per cent., from reserves and unrevealed reserves in many instances. The Attorney-General (Mr. Latham) told a pathetic story about the unfortunate bankers and shareholders who are to-day receiving only 6£ per cent, on their investments. That appears to be a dreadful situation to the supporters of the Government who are bolstering up our inefficient’ and obsolete method of banking. All honorable members have, in their electorates, personal acquaintances, including architects, engineers, doctors, lawyers, agriculturists and pastoralists, whose incomes were, at one time, from £10 to £50 a week, and who to-day are practically penniless, some of them being on the dole.
Mr Martens:
– Some of them have committed suicide.
Mr BLAKELEY:
– A large number of people have become bankrupt, either officially or unofficially. They have been forced off their properties and out of their businesses. Yet the supporters of the Government bolster up the financial system which has brought about that state of affairs.
Mr Casey:
– What have the honorable member’s remarks to do with banking ?
Mr BLAKELEY:
– I ask the honorable member what is the alternative to the system which we on this side of the House are advocating?
Mr Casey:
– The system of private banking.
Mr BLAKELEY:
– That system has been tried in Australia, and it has utterly failed. The Prime Minister (Mr. Lyons), speaking the other day at Perth, said that were it not for the existence of the Commonwealth Bank, there would not be one private banking institution left in Australia. The honorable member knows that perfectly well. Our banking system failed during the years from 1914 to 1918. During the war, the private banks were called upon to assist this nation, but they soon showed that they were incapable of carrying out the job. They are just as incapable of finding any solution for the problems that have arisen out of the present financial depression. The same thing happened in Great Britain. The honorable member for Corio (Mr. Casey) has probably a more personal and intimate knowledge than I have of what took place there. During the war, the British Government had to take control of the finances, but’ the private banking interests were not left out of the picture altogether, because, by the creation of credits and the flotation of loans in Great Britain, they bled the people almost white. The Marquis of Tavistock, a son of the Duke of Bedford, speaking on this subject, said -
It is estimated that about £8,000,000,000 -were raised to pay for the war. Although the figures are carefully kept secret for fear of the scandal if they were revealed, it is fairly safe to assume that only about £2,000.000,000 were honestly subscribed by the citizens of the country out of their savings and earnings. They have a perfect right to the redemption of both principal and interest, but no one else has the ghost of a right to either.
Mr Archdale Parkhill:
– From what journal is the honorable member quoting!
Mr BLAKELEY:
– I am quoting a letter which was published in the Glasgow Forward, issued on the 27th October last. The Attorney-General referred to dividends of 6£ per cent., and when the
Leader of the Opposition interjected, the right honorable gentleman admitted that those dividends were from reserves. That fact cannot be accentuated too much.
Mr SPEAKER:
– The honorable member’s time has expired.
Mr HAWKER:
Wakefield
– I support the request of the AttorneyGeneral (Mr. Latham) that the House shall not accept the motion of the Leader of the Opposition. No one is more anxious than I am that there should be a general reduction of interest rates in Australia, but this attack by the Opposition upon the financial institutions of the country is doing more than anything else to retard the bringing about of a reduced interest rate. The attack of the honorable member for Darling (Mr. Blakeley) upon the policy of the banks in building up reserves is entirely mischievous. The policy of building up reserves is one of the things that enabled the banking system of Australia to withstand the severe shocks to which it has been subjected, thus saving this country from disasters similar to those that have taken place in other parts of the world. The building up of reserves, provided, that they are genuine assets, should be encouraged by every Australian who wishes the business and trade of this country to expand. Reserves are profits which the bank places at the service of the community, instead of disbursing them as dividends to be spent in comforts or enjoyments and other investments of shareholders. The bank reserves represent money which the shareholders of the banks have not expended in enjoyment. That money is being taxed under our taxation laws. The shareholders are entitled to remuneration in just the same way as a private individual is entitled to receive interest on that part of his income which he invests in government bonds, or in some other direction, and does not spend on enjoyment. The bank reserves are one of the elements of the strength and stability of this country, and it is upon the strength of those reserves that the prospect of lower interest rates partly depends. Reference has been made to the desirability of confidence being maintained in the community, so that money may be readily available at lower rates of interest. There is nothing which can do more to cast doubt upon the banking system, and in that way undermine confidence, than a campaign such as is being conducted by honorable members opposite. The Leader of the Opposition in moving his motion to-day quoted the statement of an eminent banking writer that banks were factories of credit. To a large extent that is true, and the reason why the making of credit remains in a limited number of hands is that it is a highly skilled process. If it is overdone it defeats itself. Recently we have had examples of that in one country after another, where politicians and no worse politicians than those in this chamber - they would be at least f.a.q. - have obtained control of the financial institutions of their country, used them to overmanufacture credit, and in that way have absolutely destroyed financial stability. Recently an attempt was made by the ablest men of the United States of America to make money available in greater and greater -quantities. The Reconstruction Corporation, with a capital of 2,500,000,000 dollars was set UP D.y government action, and backed by the central banks of the United States of America. Its object was to take securities off the hands of big and small businesses, and to keep them going by making money more readily available. At the same time the central reserve banks bought huge blocks of bonds and stocks so that there would be more and more money available, and because there was a suspicion that this action was being instigated by politicians, confidence was destroyed to an extent which more than offset the value of the new money that had been manufactured. That led to disaster, and bank smashes to an extent from which I am glad to say, the British Empire has been free. At present, it is the policy of the banks of the Empire, both central and private, to make money available at low rates of interest, but in order to do that, there must be no suspicion that parliaments, however well intentioned they may be, can interfere with the technical side of banking, or that they are able, for reasons of sentiment, however laudable and humane that sentiment may be, to put upon the banks, whether central, Commonwealth or private banks, pressure which would have the effect of forcing them to take greater and greater risks with, not only the integrity of the currency, but also the whole basis of business credit. It is true that, to some extent, the prevailing world-wide depression is due to financial causes. It is also due to dislocations of trade, to the setting up of prohibitions and tariff barriers across the established trade routes of the world. Incidentally, the Leader of the Opposition (Mr. Scullin) and those who support him have contributed their little bit to the obstruction and destruction of the trade of the world. Another reason for the depression is the lack of confidence in, and the inability of banks in some countries, whether private or controlled by governments, to stand up to the strain.
The attempt to take banking out of the hands of the private banks of the British Empire, which have stood up to the world debacle better than any other financial institutions in the world, is thoroughly mischievous. ‘ Propaganda against those institutions can only make it more difficult for people to obtain finance and carry on. I am, therefore, entirely opposed to the appointment at the present time of a royal commission which would, in practice, merely afford an opportunity for those who wish to attack and undermine our present, economic system in order to advertise themselves.
Mr HUNTER:
Maranoa
.- Never has there been greater unrest in the minds of the people on matters concerning their means of existence. That unrest is universal. There is also an ever-growing readiness on the part of the public to try any new suggestion once. “We are bewildered with all sorts of financial schemes formulated by economists and financiers on the other side of the world, and seized upon by the general public as a panacea for our economic ills.
Accentuating the position of unrest isthe tremendous contrast between the periods of what might be termed prosperity on the one hand and real depression on the other. Only recently I read in the Melbourne Argus an article which pointed out that all that was real prosperity in the days that are past was due to the high prices which we obtained for our rural products overseas, and all that was vicious and false prosperity was due to our huge borrowings and squandering of money. There is no doubt that one cause of our suffering is peculiar to Australia, that of over-borrowing and mis-spending of loan money. It is common knowledge that if a person does injury to his body he has to suffer physically; so, also, if the body politic does an injury to itself it, too, must suffer. All the money schemes in the world will not rectify the wrong from which we are suffering as a result of overborrowing and mis-spending. During the period to which I refer we borrowed from overseas new money to the extent of about £30,000,000 per annum. Apportioned into weekly wages that would give constant work to approximately 120,000 persons. So that, when we ceased borrowing, we immediately and directly displaced from constant work 120,000 persons, apart from the enormous number who were indirectly displaced. Because of the prevailing unrest and the feeling of suspicion that has been fostered in certain quarters, it would be a good thing if we had an inquiry such as that suggested. I am not in favour of any “ fishing “ expedition that would bring into the open certain matters that should remain private. I believe that if an inquiry into our banking system and monetary policy were undertaken by a capable and unbiased body, it would have exactly the opposite effect to that contemplated by the Leader of the Opposition (Mr. Scullin). It is absolutely necessary to explain the advantages of our monetary system in comparison with those prevailing overseas, so that our people may be enlightened, and realize that they are better off than those in other countries. They would then be persuaded to look for other than deceptively easy means to rehabilitate the country.
I was glad to hear the Acting Leader of the House (Mr. Latham) say that the Government intends to make an examination of our system of Commonwealth banking with a view, perhaps, to separating the Commonwealth Bank into trading and central banking sections.
Undoubtedly, the central banking portion pf the Commonwealth Bank is the key to our financial system. I do not think that the trading transactions of the bank will ever become really great. Some time ago, when an attack was made in this chamber, on a gentleman who was a director of the Commonwealth Bank, I heard people stating” deliberately, as I travelled about the country, that they would not bank with the trading section of the Commonwealth Bank because they feared that it, being a Government institution, might some day be subjected to= public inquiry, and their personal transactions disclosed. There can be no doubt that the possibility of the lack of secrecy in connexion with the trading section of the Commonwealth Bank has prevented many from dealing with it.
Most of the monetary systems that are being advocated are based upon a system of inflation. Economic writers from other countries, particularly Great Britain, have been quoted as .advocating a certain amount of controlled inflation. There, again, we are not considering conditions which have a parallel in Australia. Before Great Britain went off the gold standard, the currency was capable of bearing inflation to the extent of about 15 per cent., because its prices, both for rural and non-rural products, had fallen to that degree in 1911. It must be remembered that it is impossible to have any form of inflation that will affect only one class of commodity. So that, when Great Britain went off the gold standard, all sections benefited. Any scheme of inflation adopted in Australia would affect all classes of commodities and effect an increase in prices which would certainly benefit primary producers. At the same time, internal inflation would affect only the . prices of primary products sold here, and not those sold overseas. It would also have the effect of raising the prices of manufactured commodities, with the result that, although price levels might be different, the existing gap between .the two classes would continue.
The Douglas credit system and other monetary schemes are all based on such a foundation, and when they are presented to people who are down and out, with the promise that their credit will be restored and they - will be enabled to carry on, those persons are liable to grasp at them as though they were the last straw. They imagine that things cannot be worse than they are, but that they may be a little better under the new scheme. Therefore, an inquiry such as is suggested might do a lot of good in revealing the falsity of such proposals.
We hear much about trading on credit. No doubt we do trade a lot on credit. But much is said about credit that is undoubtedly false, and an inquiry would reveal what real credit is. Another word for credit, is debt, for credit simply means somebody else’s debt. Before I can obtain a credit from a bank, the bank must first have somebody else’s deposit; its debt to that person becomes a credit to me.
Mr SPEAKER:
– Order ! The honorable member’s time has expired.
Mr HOLLOWAY:
Melbourne Ports
– It is remarkable how certain persons become voluble when a proposal is made to have an inquiry into private banking or insurance activities. Yet those same persons are always only too ready to institute searching inquiries into the affairs of other trading groups which they term monopolies. The request made by the Leader of the Opposition (Mr. Scullin) is most reasonable and necessary. An inquiry such as that suggested would reveal whether there is any truth in the belief that our banking and financial institutions affect the economic position of the country. Any real opposition to the inquiry must be born of fear of its result. In attacking the request made by the Leader of the Opposition, the honorable member for Corio (Mr. Casey), and the honorable member for Wakefield (Mr. Hawker) did not advance one logical argument against it. They merely insinuated that all sorts of sinister motives underlie the request. It seems to me that the honorable member for Corio, especially, is obsessed with the idea that sinister motives underlie anything concerning an inquiry into our banking institutions. The honorable member did not make any real contribution to the debate or indicate any reason why the inquiry should not take place. He merely claimed that such an investigation would lessen the confidence of the community in financial institutions. If there is any real logic in that argument, which was used by the Acting Leader of the House (Mr. Latham), among others, the assumption must be that the fear is founded upon the belief that the resultant revelations would kill that confidence. Throughout the world, leading public i men are emphasizing that one of the greatest causes of the depression is the lack of public confidence. If we were enjoying a period of normal prosperity with stable conditions, the argument that we should not do anything to disturb confidence would be logically sound. But international conferences are recording the opinion that the universal depression and widespread insolvency of nations are due to the fact that investors, commercial men, and communities generally, have lost confidence. If there is no confidence, how can an inquiry destroy it ? In proof of the real need for such inquiry as the Leader of .the Opposition has suggested, I quote from the British Hansard portions of a speech delivered in the House of Commons by Sir Robert Horne -
Although, as I believe, the tariff is of firstclass importance, it is, in present circumstances, overshadowed by the question of currency. The truth of that assertion will become obvious if we think for a moment that the rise in the value of the pound sterling, such as occurred three weeks ago, from about 3 dollars 50 cents to 3 dollars 80 cents entirely wipes out, so far as checking imports are concerned, the 10 per cent, duty. ft is, therefore, clear that it is no good having ‘a tariff policy unless we also have a currency policy. How can the Advisory Committee on Import Duties deal with any question of tariffs unless they have some sort of ideas about the kind of level on which we maintain the pound! That fact has been implicitly recognized by the Government. Whether we like it or not, we are now in the situation of having a managed currency. . . .
The Acting Leader of the House, and the honorable member for Corio scorn the idea that Parliament should have any say in regard to the currency; that, they say, should be sacred to private enterprise. The views of those honorable gentlemen are not endorsed by authorities in other parts of the world. Because of the collapse of the economic and financial fabric, Parliaments in every country are interfering with the policy of banking. I quote Sir Robert Horne again -
It is the law that says what is legal tender. It is in this House that we make the law. We were the people who decided about our return to the; gold standard. We were the people who gave authority for the amount of fiduciary issue that should be put out by the Bank of England. We are the people who, only a few weeks ago, gave authority for £15,000,000 to be added to the Fiduciary Note Issue. In fact, we are, God help us, the people who have to manage this currency under the advice and through the means of the Chancellor of the Exchequer, using as his instrument the Bank of England.
The British Parliament controls British currency and, in some circumstances, even instructs the Bank of England. If that policy is considered proper and fitting in the financial centre of the world, surely we commit no sin in advocating it in this Parliament. Unlike some members of my own party, I do not blame the private banking institutions. Private banking is a monopoly of the same nature as the oil monopoly or the sugar monopoly. It is not fundamentally different from any other business; it is conducted by directors to earn profits for the shareholders. The directors must :pay dividends, and build up reserves, or be dismissed to make room for others who will. There is nothing wrong with conducting the banking business for profit, but that this Parliament, having established a national bank which is supposed to be operated in the interests of the people, should allow industries to languish or become insolvent through lack of the necessary credit, is decidedly wrong. “We should blame, not the private banks, but ourselves for allowing them to have a complete monopoly. Unfortunately, members of the present Government believe that banking should be the exclusive preserve of private enterprise. I believe, however, that, in the interests of the people, the control of our monetary and currency system should be in the hands of the Parliament, through the Treasury and the instrumentality of the Commonwealth Bank.
Mr SPEAKER:
– The honorable member’s time has expired.
Mr WARD:
East Sydney
.- The proposal of the Leader of the Opposition (Mr. Scullin) for the appointment of a committee to inquire into financial control, particularly the activities of the banking institutions, is long overdue. I can quite understand why honorable members opposite have risen to defend the banks. The present Government directly represents those who control banking, and probably, if the proposed inquiry were sufficiently searching, it would elicit the fact that the election campaign funds of the Ministerial party flow from this source. Honorable gentlemen opposite deprecate the suggestion that there should be political control in connexion with banking and finance. We have never had anything else but political control, but what those honorable gentlemen fear is that the day will come when the workers will get representation on the bank board, and have an opportunity to determine monetary policy. At present, bank management is representative of only one political party. We are told that the propaganda of the Labour party is designed to undermine the security of the banks, and that the proposed inquiry would only destroy public confidence in them. Nothing was said by honorable members opposite of the extensive propaganda prior to the closing of the Government Savings Bank of New South Wales. At that time it was to their political advantage to employ alarmist propaganda in order to close an institution whose assets enormously exceeded any demand that might be made upon it. An examination of the resources of all the banks wouldshow that not one of them could be regarded as solvent, if the test of solvency were that it should have liquid assets to meet any demands that might be made upon it from time to time. On the occasions when the private banks have been unable to meet the demands upon them they have appealed for, and received, assistance from governments. The banks have passed through various crises, notably in 1825, 1830, 1842, 1843 and 1893. In the lastnamed year the failure of the banks was due, not to any propaganda of the Labour party or its supporters, but to the fact that the banks had created a situation that they were incapable of handling, and as soon as they lost the confidence of the public they appealed to the Government to come to their assistance. But for the help given by the New South Wales Government, which required bank notes to be accepted as legal tender and made them a first charge on the banks’ assets for six months, the banks could not have kept their doors open. Only ten of these institutions were able to weather the storm. The honorable member for Gippsland (Mr. Paterson) described as cranks men who are promulgating financial views that are not quite orthodox. I remind the House that when the Commonwealth Bank was established, the members then in opposition condemned as cranks its authors, the Fisher Ministry, and Commonwealth Bank notes were referred to contemptuously as “ Fisher’s flimsies “, and the statement was made in Parliament and in the press that the public would have no confidence in the bank and its notes would be valueless. Experience has disproved those predictions, and the success of the bank has demonstrated that it can operate in the interests of the people in a way that is not possible to the private banks, which are concerned in exchange values rather than in use values. I do not say that the whole of the existing depression is due to the monetary policy of the present or any other Government, because I am convinced that plenty of money would be forthcoming for investment in any industry which was assured of profit. But the control of credit has too important a bearing upon the livelihood of the people to be allowed to remain under private control. The honorable member for Corio said that this motion to-day is the first shot in the campaign to destroy the private banks. That is not so. The first shot was fired at Goulburn, when the Leader of the Labour party in the New South Wales Parliament enunciated his policy for the socialization of credit. I believe that it is necessary, in the interests of the people, that the control of credit should be in the hands of their elected representatives, and until that is brought about we cannot hope substantially to alleviate the position of the masses. The Acting Leader of the House, in attempting to defend the private banks, said that their profits were not high in comparison with the percentage return from other undertakings. He referred to the capital placed in reserve, but said nothing of the methods adopted by the banks in years gone by to reduce enormously the valuation of their premises. There are ways, other than that of carrying profits to reserves, of withholding from public knowledge the profits made by the manipulation of public credit.
Dealing with dividends, some honorable members have mentioned a rate of 6½ per cent., but if they had examined the history of the private banking institutions of Australia they would have discovered that rates have gone as high as 35 per cent. It is remarkable that the private banking institutions of this country are practically the only commercial concerns which have shown any improvement in their position during the period of depression through which we are passing. By their manipulation of public credit, they have been able to hold, and even to better, their position, while the great majority of our people have been passing through very difficult times. It is surely significant that these institutions remain prosperous while others suffer serious embarrassment. The Labour party considers it of vital necessity that the operations of these financial institutions should be examined. I suggest that the members of the Country party should support the Labour party in this respect. Those honorable gentlemen have said, “We do not want any political interference with finance,” but I remind them that during the war years the Commonwealth Bank was able to finance vast marketing schemes which made possible the sale of our primary produce overseas. This would not have been possible but for the activities of the Commonwealth Bank. Those who agitated for and ultimately established the Commonwealth Bank years ago were described as cranks and fanatics. It was also said that they were unorthodox, and would bring the country to disaster. I suggest that those who to-day are being similarly described for advocating socialization of credit and for thinking that the financial position of the private banking companies should be examined in the public interest will also be looked upon in the years to come as the founders of the Commonwealth Bank are looked upon to-day.
Mr SPEAKER:
– The honorable member’s time has expired.
Mr ARCHDALE PARKHILL:
Postmaster-General · Warringah · UAP
. - The subject which the Leader of the Opposition (Mr. Scullin) has introduced this morning will, undoubtedly, be debated on many platforms throughout the country for a considerable time to come.
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936
– And will also be debated again in this chamber.
Mr ARCHDALE PARKHILL:
– While the discussion will be interesting, I have no doubt at all what the outcome of it will be. There is deep in the hearts of the people of this country a great respect for institutions which render public service in times of crisis. Without question, this discussion affects the savings of the people, and particularly those of the middle class and working people, who with much patience and thrift have scraped together small sums of money for their old age or for the assistance of their families. Any attack that may be made on the savings of the people, whether such savings be lodged in banks or invested in insurance companies or friendly societies, will be incontinently resisted by the people as soon as the issue comes before them. The Leader of the Opposition (Mr. Scullin) may not thank me for saying this, but in my opinion he does not, himself, really agree with the sentiments that he has expressed on this subject.
Mr Scullin:
– I certainly do not thank the Postmaster-General (Mr. Parkhill) for that statement.
Mr ARCHDALE PARKHILL:
– If the right honorable gentleman earnestly believed in the policy he is advocating, he would not have been so dilatory in bringing it to an issue.
Debate interrupted under Standing Order 257b.
Sitting suspended from 12.50 to 2.15 p.m.
page 767
PAPERS
The following papers were laid on the table : -
Arbitration (Public Service) Act - Determination by the Arbitrator, &c. -No. 2 of 1933 - Commonwealth Public Service Clerical Association.
Financial Emergency Act - Regulations amended- Statutory Rules 1933, No. 34.
page 767
TARIFF BOARD REPORTS
Mr. WHITE laid on the table reports and recommendations of the Tariff Board on the following subjects: -
Bags, Baskets, Boxes, Cases, Trunks, Purses, Wallets, &c
Manufactures of Metals, n.e.i.
Photograph Frames, Picture Frames, &c
Ordered to be printed.
page 768
QUESTION
TARIFF PROPOSALS (1932-1933)
Customs Tariff (1932) : Special Duties (No. 4) : PRIMAGE Duties (No. 2) : Customs Duties (Canadian PREFERENCE No. 2) : Customs Tariff Amendment (No. 1) : Special Customs Duty (No. 5) : Excise Tariff Amendment (No.. 3).
In Committee of Ways and Means: Consideration resumed from the 30th March (vide page 743), on motion by Sir HENRY Gullett (vide page 1167) (volume 135) -
That on and after the fourteenth day of October, One thousand nine hundred and thirty-two, at nine o’clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Customs at the rates respectively specified in the column of the schedule hereto headed “ British Preferential Tariff “ be imposed on goods the produce or manufacture of the United Kingdom …
And on motion by Mr. White (vide page 29)-
That the Schedule to the Customs Tariff Proposals introduced into the House of Representatives on the thirteenth day of October, One thousand nine hundred and thirty-two, be amended as hereunder set out.
Group 5. - Items amended by Scullin Government, and supported by Tariff Board reports.
Division 1. - Ale, Spirits, and Beverages
Item 9 (Spirituous preparations - nonmedicinal).
Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP
– In a number of instances the increased rates of duty introduced during the regime of the last Government were favorably reported on by the Tariff Board, and have been retained, except where they have been altered in accordance with the terms of the Ottawa agreement. There are 194 seta of duties.
Mr Scullin:
– In what way have the alterations been made?
Mr WHITE:
– The duty on foreign goods has been increased. I have a formal amendment to item 9 of the group. I move -
That that portion of the Tariff Resolution introduced into the House of Representatives on 8th March, 1933, relating to item 9 be incorporated in the present proposals as on and from the 9th March, 1933, in lieu of item 9 of the tariff resolution introduced into the House of Representatives on the 13th October, 1932.
This item was amended in the 1933 resolutions, and the amendment is to enable that part of the -schedule to be debated. The amendment does not make any alteration of the rate, or of the wording of the item as set out in the memorandum.
Amendment agreed to.
Mr FORDE:
Capricornia
.- The duty on this item was increased while the Scullin Government was in office, “and the fact that the Tariff Board has reported favorably upon the increase makes it no better and no worse than the increases which were made from time to time as a result of departmental inquiries. There are upwards of 70 firms manufacturing essences, operating in every State, with the possible exception of Tasmania. Essences to the value of about £200,000 have been consumed annually during the last two years, and, although local production supplies 80 per cent., of Australia’s requirements, the capacity of local producers is above Australia’s requirements, even in normal times. A full range of flavours is produced, comprising about 400 varieties, which should be sufficient to satisfy the most fastidious taste. The Tariff Board has expressed the opinion that Australian manufacturers are in a position to supply all the essences Australia needs, including those now being imported. Of the materials used, 90 per cent, of the value is represented by goods of Australian origin, including spirits, glycerine, sugar, pure fruit and certain citrus essential oils, in addition to bottles, labels and cartons used in the packing of the essences. The industry is of value to the citrus fruit-growers, because 700 tons of lemons are required annually in the production of oil of lemon, which is used in the manufacture of essences. The largenumber of manufacturers is a safeguard against any possibility of the consumers being exploited. Competition, as a matter of fact, is very keen, and no price agreement has been entered into between manufacturers. The essence industry provides considerable employment for subsidiary industries, in addition to the many hundreds directly employed.
Essence manufacture is a skilled industry necessitating the installation of laboratories and modern scientific equipment. Under the present protection it is fully anticipated that the industry will expand, and those raw materials now being imported, such as esters, ethers and other aromatic isolates will, in the future, be produced by our own trained industrial chemists, providing them with experience which would be of great value to Australia in the event of war. As one who has consistently advocated protection as the policy of Australia, I hope to see the day when a great number of our secondary industries will be able to export their products. I have no doubt that the essence manufacturing industry will reach that stage before very long. This item was included in one of the tariff schedules which I introduced, and I hope that the committee will not reduce the duties. I fear that the Minister may remit this item to the Tariff Board for reconsideration in” the light of articles 9 to 14 of the Ottawa agreement, with the understanding that duties are to be reduced. We know that the Tariff Board, in commenting upon other items on which duties have been increased in accordance with its recommendation, has stated that it wishes to review the items in the light of the Ottawa agreement. I hope that this item will not be one of those that suffer, We have been told that the reductions which have already taken place are only an indication of what is to follow. This is a very important industry, and I trust that the Minister will not be in a hurry to refer it to the Tariff Board for reconsideration in the light of the terms of the Ottawa agreement. If he does so, the result may be to throw out of employment a number of our people.
Mr NAIRN:
Perth
– I hope that this is one of the items that will be reviewed by the Tariff Board. The board has already reported upon it, but that was prior to the passing of the Ottawa agreement; consequently, it could not have had in view the special terms of that agreement. Indeed, I cannot concede that the item, as proposed, gives effect to the spirit of the agreement, article 10 of which provides -
Hia Majesty’s Government in the Commonwealth of Australia undertake that during the currency of this agreement the tariff shall be based on the principle that protective duties shall not exceed such a level as will give United Kingdom producers full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production.
Let us see how that works out in connexion with this item. I have obtained from persons who are well qualified to advise, a dissection of the cost of an actual importation of two lines that come under it - Duckworth’s soluble essence, premier ginger ale, and Duckworth’s soluble” essence of lemon. In the one case the f.o.b. cost is increased by 120 per cent., by duties and importation charges, while the actual addition attributable to the tariff and primage amounts to 100 per cent. In the second case the figures are 115 per cent, and 95 per cent, respectively. The f.o.b. cost of the essence for making ginger ale is 6s. 6d., and the items that are added before it is available to the public are as follow : -
These, added to the f.o.b. cost, make the. total 14s. 5d., of which the amount attributable to the duties on the essence and on the containers is 6s. 5£d. - within a fraction of the equivalent of the purchase price in England. On that item the Ottawa agreement is being observed by the imposition of duties which amount to substantially 100 per cent. Under what is known as the Pratten tariff, the general duties were, in round figures, what they are to-day. The Scullin Government, however, made a general increase of 30 per cent, ad valorem. The present Government had to decide what course should be adopted in so adjusting the duties as to conform with the preference given under the Ottawa agreement. It did that, not by reverting to the Pratten tariff, but by maintaining the Scullin tariff and by increasing by 5 per cent, the duty on the foreign manufactured article. I question whether that is a fair method of giving effect to the Ottawa agreement. I claim that this tariff should be competitive, not prohibitive.
I have here a statement of the reasons that actuated the Government in giving a preference to Great Britain by raising the duties on foreign manufactures, rather than by reducing the British duties. It says -
It was not possible to inquire immediately into every industry. Consequently the Government had to make up its mind how best it could give effect to the formula. Having regard to the uncertainty of conditions throughout the world, and to the undesirableness of doing anything hurriedly that might prejudice Australian industries, the Lyons Government adopted the course of raising the tariff on these 400 foreign items and subitems.
While it is quite true, therefore, that the general tariff has been raised on approximately 400 items and sub-items, an examination of the schedule will show that these increases in the foreign votes affect, almost without exception, articles which are imported mostly from Great Britain. Thus the increase (n these particular foreign duties has made little, if any difference to costs in Australia.
That is a reply to the contention that the raising of the duties increased costs in Australia, and in that respect is considered satisfactory. But there is also the implication that no real preference has been given to the British manufacturers, because it is pointed out that the 400 items mentioned affect almost exclusively the British manufacturers, the foreign importations being negligible. [ trust that the Government will reconsider this matter. Plainly the British manufacturers of this particular line have been excluded from the Australian market, except in connexion with a few really good lines in regard to which we have not yet been able to attain to the necessary standard. The greater part of the market has been captured by the Australian manufacturers, with the assistance of this prohibitive duty of 100 per cent. This industry has been highly protected for some years, and during that time, it has captured the greater part of the Australian market. Since -it is a thoroughly established industry, there is no sound reason why it should still be carried on under such a high measure of protection. Having captured the market, and having become efficient from a manufacturing point of view, it should be able to carry on with a comparatively small measure of protection. Therefore, I consider that the Government is not fairly carrying out the terms, let alone the spirit, of the Ottawa agreement, if it insists on maintaining protection to the extent of 100 per cent, against the British manufacturer. The Government of New Zealand is, apparently, more readily disposed than is the Commonwealth Government to do the fair thing to British manufacturers. The following is a quotation from a report of the London Chamber of Commerce: -
The New Zealand Government is about to institute, in accordance with the terms of article 8 of the Ottawa agreement, an enquiry into the existing protective duties imposed by the New Zealand Government, and, where necessary, to reduce them as speedily as possible to such a level as will place United Kingdom producers in the position of domestic competitors; that is, that the protection afforded to the New Zealand producer shall be on a level which will give the United Kingdom producer full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production.
The Government of the Commonwealth has not proceeded on that basis. We are informed by the Minister that the Tariff Board has told him that of 214 of its recommendations, only about 13 require revision in order to bring them into conformity with the spirit of the Ottawa agreement.
Mr White:
– And the board approved of the duties on this item.
Mr NAIRN:
– I do not understand how the board could possibly have put forward that contention, in view of the high protection now given. In the past, the board had no such limitation placed upon it as is undoubtedly imposed by the Ottawa agreement. It was at liberty to recommend as high a protection as it thought fit, without any hint as to what should be done under that agreement; but now the position is. entirely different. There is a new standard to which the board should conform, and I am- at a loss to see how it- can consistently maintain that reports made over the last three years, and made without the Ottawa agreement in view, can reasonably be held to comply substantially with the terms of that agreement. The fact that these duties amount to 100 per cent, protection is sufficient to show that they do not comply with the spirit of the agreement, and since I consider that the item should be referred back to the Tariff Board, I move -
Thatthe item be postponed.
The CHAIRMAN (Mr Bell:
DARWIN, TASMANIA
– I cannot accept that amendment, because the item has already been amended.
Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP
– The duties now in operation are, in the main, the same as have been imposed since 1921; they are not duties introduced by the last Government. The Tariff Board reported on this matter as late as October last. This is one of the 201 items out of 214 of which the board approved.
Mr Nairn:
– This was referred to the board in March, 1932.
Mr WHITE:
– The report was received in October of that year, and the matter was referred again to the board in the light of the Ottawa agreement. As to the honorable member’s protest that these duties give protection amounting to 100 per cent., I do not know whether he has taken exchange into account.
Mr Nairn:
– I have excluded exchange.
Mr WHITE:
– Whatever the net percentage may be, the excise duty must be deducted. These essences are made from spirit on which there is a high excise duty, ranging from 17s. to 23s. a gallon, and that reduces the protection considerably. The honorable member suggested that the duties were prohibitive, and that the preference was worthless to Great Britain; but I point out that last year £8,160 worth of essences was imported from Britain as against £1,434 worth from foreign countries. The object of the Ottawa agreement is to stimulate trade within the Empire. By the raising of the foreign duties, business that formerly went to foreign countries is now kept within the Empire, and both British and Australian manufacturers will share that trade. The business with Great Britain should be increased, and the Australian trade should be safeguarded. That is the answer that I give to both the honorable member for Perth (Mr. Nairn) and the Deputy Leader of the Opposition (Mr. Forde). Unemployment will not result from these duties, because unemployment is decreasing daily, and, while there may be dislocation in one industry, it will be more than compensated for by increased trade in others. The board has pointed out, in its report, that this industry provides an outlet for the use of Australian raw materials, of which fruits, particularly citrus fruits, form a large portion. It also refers to the provision of employment, and to the fact that the quality of the locally-produced goods is satisfactory. Therefore, I suggest that the item be agreed to without further debate.
Mr BERNARD CORSER:
Wide Bay
– The Minister has cleared up the assertions of the honorable member for Perth (Mr. Nairn), who claimed that the Government had not done its duty under the Ottawa agreement in regard to fruit essences. It is unnecessary for me to amplify the clear statement which the Minister has made; but I desire to offer a few observations to show that the Government’s action in providing adequate protection in this case has been of the greatest value to the fruit-growers of Australia. There is a glut of fruit in this country, and, according to the New South Wales figures, 500,000 trees are not yet in bearing. In Australia, as a whole, probably 1,000,000 trees are not in full bearing. There is a desire among the citrus-growers throughout the Commonwealth to induce the State authorities to prohibit the importation of inferior classes of fruit drinks, in the hope that the public will be able to secure an article of the quality that they expect when they purchase a fruit beverage from a stall or restaurant. We have such a surplus of fruit in Australia that we could, without the slightest difficulty, supply the whole of the country’s requirements in the matter of fruit drinks, and the locallymanufactured article is much more wholesome than one made by means of essences and acids. I congratulate the Government on having given protection to this industry in the past, and also, in some instances, having increased the protection. The honorable member for Perth complained that the Australian manufacturers had now completely captured the local market. What an argument to advance in a tone of distress!
I contend that the local manufacturers are to be congratulated upon their accomplishment, particularly when we remember that they use pure fruit products of Australia in preference to essences brought in from overseas. The honorable member also said that we have not given Great Britain a chance to compete in this trade. The Minister claims that the fruit particularly affected is citrus fruit. The honorable member for Perth referred to the action taken by the New Zealand Government. The position in New Zealand is exactly the opposite of that in Australia, because New Zealand is an importer of citrus fruits from this country. The honorable member for Perth advocates the lowering of the British tariff to enable these substitutes for pure fruit to enter this country from Great Britain. A cable which appeared in yesterday’s newspapers told of distress in Spain, where 1,000,000 growers of citrus fruits are perturbed because of some action on the part of the British Government in regard to the importation of fruit. The Australian citrus fruit industry is already faced with strong competition. Some years ago Australian growers of citrus fruit received 25s. a case for their fruit; to-day they are glad to get 5s. a case for it. What will their position be in another year or two, when 1,000,000 more trees come into bearing? The action of the various parliaments of Australia in placing men on the land to engage in the growing of fruit relieved unemployment at the time, but its effect on the fruit market is now being felt. Surely this is not the time to permit the importation of substitutes to compete with our own pure fruit. Those engaged in this industry have attempted to investigate the position in relation to the importation of these substitutes, but have experienced considerable difficulty in securing exact data from Federal and State departments. I congratulate the Government on the protection it has afforded this industry, and I hope that nothing detrimental to it will be permitted.
Item, as amended, agreed to.
Item 11, sub-item (b) (Non-spirituous preparations).
Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP
– This item is similarto the one with which the committee has just dealt. I, therefore, move-
That that portion of the Tariff Resolution introduced into the House of Representatives on 8th March, 1933, relating to sub-item
- of item 11, be incorporated in the present proposals as on and from 9th March, 1933, in lieu of sub-item (b) of item 11 of the Tariff Resolution introduced into the House of Representatives on the 13th October, 1932.
This sub-item was amended by the schedule introduced earlier this month, but this further amendment is necessary in order to incorporate in the schedule the wording of the smaller schedule also introduced on that date.
Amendment agreed to.
Sub-item, as amended, agreed to.
Division 4. - Agricultural Products and Groceries
Items 44 (c2) and 53 (c) agreed to.
Item 54, sub-item (a) (Fruits and vegetables, including ginger n.e.i.).
Mr FORDE:
Capricornia
.- This sub-item covers all kinds of preserved and canned fruits. I should like to have the Minister’s assurance that it is not intended to reduce the protection afforded to this important Australian industry, which, unfortunately, is adversely affected by the Ottawa agreement. The Australian delegation to the Ottawa Conference agreed to a reduction to the Australian preferential rate of the Canadian pineapple duties on colonial importations. That means the admission of pineapples from Singapore, Africa and Fiji at the Australian rate, which must be detrimental to one of Queensland’s important primary industries. The Hawaiian Pineapple Company has established a big factory in Fiji, and will be able to avail itself of the British preferential rate. This company will be a strong competitor in markets formerly supplied by Australia. The export business of the Victoria Cross Manufacturing Company, which has established a plant in Australia for the canning of pineapples, will be jeopardized. These happenings emphasize the necessity for protecting this important Australian industry. In normal times Canada imported from Hawaii from 150,000 to 180,000 cases of high class pineapples, and from 400,000 to 600,000 cases of cheaper pineapples from Singapore. Under the CanadaAustralia trade agreement, Australia would have made inroads on the Canadian import trade in high class pineapples, and would also have got a share of the Singapore trade with Canada. The Singapore product is exported in nominal 20-oz. tins which are badly filled, the amount of fruit in them being practically the same as in the Australian 16-oz tins. The trade agreement with Canada, made by the Scullin Government, was fulfilling all that was expected of it. The stimulus which it gave to the Australian industry emphasizes the importance of not reducing these duties, because we do not want to see Fijian pineapples being imported to the detriment of the Australian industry.
The Australian delegates at Ottawa in agreeing to remove the preference which Australia had secured from Canada on pineapples, have given a decided setback to one of our most promising northern industries. Canada imports yearly approximately 20,000,000 lb. of canned pineapples, consisting of about 180,000 cases of high class pineapples from Hawaii and 600,000 cases of cheaper pineapples from Singapore. One of our main difficulties has been to find markets for our primary products, including the output of the Burrum soldier settlement, where large quantities of pineapples and other fruits are grown. If these duties are in any way reduced, a serious blow will be struck at this important Australian industry. As I have stated, the Scullin Government realized the possibilities of the Canadian market for the disposal of our surplus pineapple crop, and in the trade agreement made with Canada, secured substantial benefits for the Queensland industry. Imports from Australia were given a substantial preference, the rates being 1 cent per lb. on Australian canned pineapples, compared with 3 cents per lb. on British fruit, including Singapore, and 5 cents per lb. on foreign fruit, which included Hawaii. This meant that the rates of duty per dozen, at normal rates of exchange, would be approximately: Australia, lOd. ; Singapore, 2s. 6d.; Hawaii, 4s. 2d. These rates came into effect on the 14th July, 1931, but because of a French trade treaty the full duty on Singapore canned pineapples did not operate until June, 1932. It was estimated that our trade with Canada would, eventually, be worth from £150,000 to £200,000 per annum. Queensland expected to get practically the whole of the trade in high class pineapples, which was supplied by Hawaii, and also a considerable amount of trade in the cheaper grades supplied by Singapore. The sales of pineapples, as a result of the Canada-Australia trade agreement have been mast gratifying. Although the full preference over Singapore has been in operation only for three months, our sales this year total 3,664,000 lb., compared with 366,814 lb. for the year ended 31st March, 1931.
The success of the pineapple trade and industry seemed assured under our trade agreement with Canada, and it looked as if Queensland would be able to extend her production to at least double the present acreage; but, unfortunately, something happened. The Australian delegates at Ottawa made an agreement which struck a heavy blow at Australian industries, including this great primary industry of Queensland. The former Minister for Trade and Customs (Sir Henry Gullett), in his speech in support of the Ottawa agreement proposals, said this -
Already Australian pineapples have made extraordinary headway at the expense of the United States of America and Hawaii, and there is still an excellent prospect of further progress.
Let us now examine the facts. Australia made headway purely on account of the preference afforded her under the rade agreement with Canada, but the excellent prospect of further progress has been nullified by the action of this Government in approving the agreement made at Ottawa. My fear now is that this item will be sent back to the Tariff Board for further investigation and report, and the result may be a reduction of these duties. The former Minister for Trade and Customs, in an interview which was reported in the Brisbane *Courier, of the 20th October, 1932, said -
The case of Fijian pineapples was mentioned but, in view of the Canadian trade figures, the possibility of any serious competition from that quarter on the Canadian market was considered negligible. They had practically wiped out of the market pineapples from the United States of America and Hawaii. . . These figures, it is claimed, justified the Australian delegation in its decision not to regard Fiji as a serious competitor in Canada.
But what has happened since then ? The American company has established a branch in Fiji, whence bananas, another Fijian product, are now imported to Australia to the detriment of our growers, and it is now on an equal footing with Australia in exporting to the Canadian market. It is stated that the wonderful technique and efficiency of canning operations in Hawaii have ensured for the Hawaiian product a world-wide demand, so that the canning of pineapples is now the biggest American fruit-canning industry. The American company now located in Fiji also has the advantage of cheap coloured labour. The Hawaiian Pineapple Company, which is the largest canning company in the world, last year packed approximately 20,000,000 cases of fresh pineapples. This is the kind of competitor which the Queensland industry has to meet in its bid for the Canadian trade. Surely what I have said will impress honorable members with the necessity for allowing these duties to stand. The Minister should see that no reduction is made, because this Hawaiian company is now firmly established in Fiji for the definite purpose of enjoying the measure of British preference given to dominion products under the Ottawa agreement. As its products from Fiji can now enter Canada at the same rate of duty as Australian pineapples, it will be seen how absurd was the statement of the Minister that, “ there is still an excellent prospect of further progress “, and that “ the possibility of any serious competition from that quarter was considered negligible”. Singapore, with its cheap Chinese labour and the Hawaiian company with its cheap Fijian labour, will now compete on equal terms with Australia in the Canadian market. This can mean only one thing, namely, that our trade with Canada will be practically lost, and all hope of increasing it definitely lost, despite anything that might be said to the contrary by the advocatesof the Ottawa agreement. Id effect, we are forgoing certain over seas trade with Canada, worth approximately £200,000 a year to the Queensland pineapple industry, in return for a problematical gain.
Mr PATERSON:
GIPPSLAND, VICTORIA · CP from 1922; ST CP from 1937; LCP from 1940
– On a point of order, I ask whether the honorable member for Capricornia (Mr. Forde) is in order in dealing at length with some highly problematical and supposititious case, instead of dealing with the hard facts of the item, which shows no reduction of duty whatever.
The CHAIRMAN (Mr Bell:
– I cannot rule in favour of the point of order raised by the honorable member for Gippsland (Mr. Paterson).
Mr FORDE:
– I am surprised at the Acting Leader of the Country party trying to prevent me from putting the case of the Queensland pineapple-growers. I warn the Minister that, as the result of the establishment of a large factory at Fiji, in whichblack labour will be employed, the Australian industry is likely to be endangered unless he ensures the maintenance of these duties. If the item is referred back to the Tariff Board, under articles 9 to 14 of the Ottawa agreement, the board will probably recommend that the duties be reduced, and thus strike at the Queensland pineapple industry a more deadly blow than was dealt at it by the Ottawa agreement.
The CHAIRMAN:
– There is no proposalbefore the committee to submit this item to the Tariff Board. The remarks of the honorable member are beyond a legitimate discussion of the item.
Mr FORDE:
– This Government has pledged itself to follow slavishly the recommendations of the Tariff Board, and I warn the Minister of the danger of submitting this item to that board, because of the likelihood of that body following the instruction of the Government to. recommend reductions of duty so as to allow oversea industries to share the Australian market, to the detriment of our own industries.
Mr FRANCIS:
Assistant Minister · Moreton · UAP
– The Deputy Leader of the Opposition (Mr. Forde) has entertained himself for the last ten minutes in putting up straw houses and knocking them down. Not one feature of this item had any relation to the subject-matter of his speech. The Queensland pineapple industry is to-day in the same position as it was last year, because the growers are to receive the same price for their fruit at sidings as they received last year. They have been assured of a payment of 4s. a case at sidings for the whole of this year’s export crop. The Government has made no announcement to the effect that this item is to be referredback to the Tariff Board, as the Deputy Leader of the Opposition suggested may be done, and it is not intended to alter the duties in any way. That honorable member used every effort to try to convince the Queensland growers that there is a desire on the part of the Government to do them an injury. Let me say that the record of this Government has clearly shown that it is the greatest friend of the primary producer.
Mr Forde:
– That is nonsense.
The CHAIRMAN:
– The honorable member for Capricornia (Mr. Forde) has already made his speech, and I ask him not to interject while other honorable members are speaking.
Mr FRANCIS:
– The Deputy Leader of the Opposition has invited the committee to accept certain statements.
Mr Paterson:
– We rarely do that.
Mr FRANCIS:
– I entirely agree with the honorable member. At the same time, the Deputy Leader of the Opposition has designedly endeavoured to mislead the committee. That is a most improper procedure.
Mr Forde:
– I rise to a point of order. I take exception to the statement of the Minister that I designedly endeavoured to mislead the committee.
The CHAIRMAN:
– As exception has been taken to the remark, I ask the Minister to withdraw it.
Mr FRANCIS:
– If the Deputy Leader of the Opposition assures me that be did not designedly endeavour to mislead the committee, I withdraw the remark.
Mr Forde:
– I ask that the Minister withdraw his remarks unreservedly and apologize.
Mr FRANCIS:
– I have withdrawn the remark, and I say instead that the honorable member has mislead the committee as to the position of the pineapple industry. The Canadian market is, unfortunately, congested with pineapples, and those interested in the industry here know that full well. The manufacturers whose duty it is to find markets for the canned pineapples, are to-day exporting their product to Great Britain, and the Sugar Concession Committee, in view of the situation, has given valuable assistance to the industry on condition that none of this year’s crop is sent to Canada. Portion of last year’s crop which was sent to Canada is still unsold, and prices there have been reduced materially because of the congested market. The growers have the full sympathy of the Government, and are assured of a payment of 4s. a case at sidings. Negotiations are taking place with other dominions in the interests of this industry, and I feel sure that when those negotiations are completed, the growers will derive considerable further benefit. There is no foundation for the statement of the Deputy Leader of the Opposition that this item is to be referred back to the Tariff Board. Such a statement is unfair to the committee, and is misleading and distinctly unfair to the growers.
Mr GREGORY:
Swan
.- My sympathies are with the honorable member for Capricornia (Mr. Forde), who made a fine election speech, one which will read remarkably well in the country. He made no slip, not even on a banana. He must surely realize the difficulties of this industry because of the action of this Government and of the Government of which he was a member, in increasing the costs of processing. The manufacture of tin plate, which will shortly be begun in this country, will greatly add to the cost of canning pineapples. Sugar has been made an expensive item. The duty on cases required for the export of the fruit represents a protection of about 900 per cent. The nails required are subject to a high duty, and the Australian consumers may, in the near future, be called upon to pay a little extra for tinned pineapples so that the industry may carry on.
Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP
– This item has been submitted to and approved by the Tariff Board. It is one of the group of 214 items to which I have already referred. The duties are the same as those imposed by the previous Government.
There is no possibility of competition from outside, because the duty on Fijian and Malayan pineapples is 5s. a dozen, and that on foreign pineapples - Hawaiian - 7s. 6d. a dozen.
Mr Paterson:
– Then the statement of the Deputy Leader of the Opposition was all bluff.
Mr WHITE:
– It was another stone cast at Ottawa. The greatest producer of pineapples is the Sandwich Islands, and the Hawaiian exports are greater than those of any other part of the world. The Ottawa agreement was designed to steer foreign trade within the British Empire. It was at the expense of the Hawaiian, and not the Queensland pineapple industry, that this agreement was made.
Mr Fenton:
– What about the establishment of the Hawaiian factory in Fiji?
Mr WHITE:
– Great Britain wa3 free to enter into any reciprocal trade arrangements it desired with Fiji, which, with the Malay States, will now obtain additional trade within the Empire. The United States of America, which has shown scant consideration to Australia and the British Empire generally, will get less of our trade. The Government, through its Trade and Customs and Commerce Departments, is seeking new markets for Australian exports, including pineapples, which are of the highest quality, and are well established on overseas markets.
Mr BERNARD CORSER:
Wide Bay
– As this industry is of great importance to the Wide Bay electorate, which probably produces more pineapples than any other district in Australia, I do not wish the item to pass without expressing my opinion upon it. I am glad that the rates of duty are to remain unaltered, also that the Minister has given an assurance that the Government has no intention to alter them. Had he said otherwise, the position would have been a nightmare to me. Unfortunately, concessions made under the Ottawa agreement affect the pineapple industry probably more than any other in Australia. The agreement between the Commonwealth and Canadian Governments provided a definite advantage for our own pineapples, but, unfortu nately, it has been partly offset by the concessions given to pineapples grown by black labour, which promise to do great harm to our industry. Particularly do those concessions apply to Fiji where American interests are developing the pineapple canning industry, to the immediate detriment of Hawaii, and, no doubt, to the future disadvantage of Australia. However, that has all been done and cannot be altered. I am interested in the guarantee of 4s. a case that the Government has given to pineapple-growers. From communications sent to me, I notice that, much to their disappointment, some growers have not received that amount. The Minister has promised an investigation, and I trust that it will result in the promised benefit materializing in all cases, and so compensating, to a certain extent, the loss which pineapplegrowers will sustain as a result of the Ottawa agreement.
Mr FORDE:
Capricornia
.- Without traversing the ground covered by the Assistant Minister for Defence (Mr. Francis), I intend to quote from communications received from representatives of the pineapple-growers. The following is an extract from a letter from the manager of the Queensland Committee of Direction. of Fruit Marketing: -
It is admitted by the delegates to the Ottawa Conference that the valuable concession for Queensland pineapples was bartered away for a concession to Australia from Singapore for Australian brandy, and it is also admitted that the question of Fijian pineapples was discussed, but “ in view of Canadian trade figures the possibility of any serious competition from that quarter on the Canadian market was considered negligible.”
The acquiescence in the reduction of the Canadian duty on Singapore canned pineapples cuts out all Australian sales in the low price field. As these sales amount to upwards of 60 per cent, in volume it is a serious matter.
The concession to Fiji is likely to wipe out the rest of the trade. Whilst Fiji has not been a factor in pineapple canning hitherto, from now on she is likely to be a very important factor. The Hawaiian Pineapple Company, which is the largest canning company in the world, has established a factory in Fiji with the intention of benefiting from any British preference. She had a considerable trade with Canada from her Hawaiian factory, and the goodwill she has established in the dominion she will naturally retain with her Fijian supplies. As these will enter
Canada at the same rate of duty as Australian pineapples, it is inevitable that the whole of the Canadian trade will be lost to Queensland.
Mr Francis:
– What is the date of that letter?
Mr FORDE:
– It is dated January of this year. The manager also pointed out that the Prime Minister (Mr. Lyons) addressed a meeting of the Sydney Chamber of Commerce, and stated that Australia had reduced no protective duties under the Ottawa agreement. He added that -
- Nothing was agreed to by the Australian delegation at Ottawa which would enable British manufacturers to destroy or even impair economic or efficient Australian industries.
- The protection for sound, capable, wellconducted Australian industries is not weakened one jot or iota sis a consequence of the Ottawa agreement. The widening of the preference over 200 items definitely increases the protection against all the low wage countries of the world.
The following extract is taken from a letter that I received from this representative of the growers, dated the 24th February : -
Re pineapples. Canada is now being flooded with pineapples from Singapore, as a result of which the market there for our canned fruit will be seriously curtailed. It will probably take the whole of this year to clear up the remaining stocks in Canada, so that we will not be able to ship any reasonable quantity to Canada this year from the present packs. We are hoping to divert our surplus to the United Kingdom.
The Fruit Industry Sugar Concession Committee has made available £20,000 to subsidize any loss that might be incurred. As a result of this we have been able to make arrangements whereby the grower will get the same price for his fresh fruit as last year, viz., 4s. per case f.o.r. grower’s station. It is too early, of course, to . say whether the year’s operations will result in marketing difficulties. Even though we get this price for our fresh fruit this year, we cannot be assured of the position being maintained. If there be a carry-over, then next year’s price will be seriously affected. However, it is impossible to forecast what will happen. They are hoping that the surplus will be cleared in the United Kingdom.
The Assistant Minister endeavoured to create the impression that the Government had made available the amount of 4s. a case as a result of his representations, whereas it was the direct result of something that I did when Minister for Trade and Customs resulting’ in the sugar agreement and the appointment of a fruit industry sugar concession committee, which was charged under that agreement with the distribution of £300,000 to assist Australian fruit-growers. It was from that amount that this £20,000 was made available as a subsidy to the growers of pineapples.
The CHAIRMAN:
– Order ! The debate is developing into a series of claims as to who assisted the pineapple industry. The honorable member must confine his remarks to the item.
Mr FORDE:
– I have quoted a letter from the person who represents the Queensland pineapple-growers, which is more authentic than the Minister’s apology for Ottawa.
Mr FRANCIS:
Moreton · UAP
.- In a few words, I shall endeavour to show the committee that my observations applied mainly to the bogys set up by the Deputy Leader of the Opposition (Mr. Forde). He claimed that the pineapple industry would be jeopardized if the Government referred these duties to the Tariff Board, as that would result in the importation of pineapples grown by coloured labour. That has been effectively denied by the Minister for Trade and Customs (Mr. White) and myself. In his second speech, the Deputy Leader of the Opposition entirely avoided the subject, and shifted to other ground. He quoted from letters which were written in January and February last. I referred to one which was received by me on or about the 27th of this month conveying the appreciation of the growers and the industry generally for the part that I had played in assisting them to get 4s. a case for their product’.
The CHAIRMAN:
– Order! The item deals with import duties, to which the honorable member must confine his remarks.
Mr FRANCIS:
– The Government has no intention of altering the existing duties, nor is the matter being referred again to the Tariff Board with a view to injuring the industry, as was suggested by the Deputy Leader of the Opposition. Speaking with definite knowledge of the subject, I am particularly hopeful that long bef ore the next crop of pineapples is harvested other agreements will be entered into that will render invaluable assistance to the Australian industry, and bring about result’s which will probably dis.appoint the Deputy Leader of the Opposition, who has taken up such an extraordinary attitude to-day.
Sub-item agreed to.
Items 74 (c), 78 (q), 82 (a) to (f) agreed to.
Item 85, sub-items (a) (b) (Rice).
Mr FORDE:
Capricornia
.- When the Scullin Ministry was putting into operation its protectionist policy, I, as Minister for Trade and Customs and Acting Minister for Markets and Transport, visited Leeton and Griffith, where rice is being most successfully grown. In the 1921 schedule the duties on rice were reduced, as this commodity was not then being produced in Australia in commercial quantities. Subsequently rice production was undertaken in the Murrumbidgee Valley, and the growth of the industry has exceeded the expectations of even the most optimistic of its advocates. The Scullin Government realized that this primary industry was. entitled to assistance because of the opportunities it offered for closer settlement. A man with an area of from 70 to 100 acres of suitable land can make a living from this crop, and we increased the duties on uncleaned rice from 3s. 4d. a cental to. Id. per lb., and on rice n.e.i. by lid., in both the British preferential and general divisions. This production placed the industry on a firm footing. Not only does Australia produce its own requirements of rice, but it is also exporting to New Guinea and New Zealand. In 1928-29, the quantity exported to New Zealand was 1,253 tons. That is a creditable performance. The leaders of the industry at Leeton and Griffith are deserving of congratulation on their success and gratitude for the helpful suggestions they made from time to time to both Commonwealth and State Governments with a view to placing the industry on a sound basis. This primary industry has to pay something as a result of the protection of secondary industries, and in turn is entitled to assistance through the tariff schedule. The growers appealed to the Scullin Government for protection against the products of coloured-labour countries on the ground that the industry was employing white labour, conforming to Australian standards of wages and living, and buying the products of local factories. I realized that this claim was irresistible, and readily agreed to grant the industry adequate protection.
Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP
.- The Deputy Leader of the Opposition (Mr. Forde) has demonstrated that he is the friend of all the world. Nothing is too small for his attention, and rum, ginger and rice are amongst the minor subjects of his benevolence. If the Tariff Board recommended a duty to which he agreed, he took the credit to himself; if the duty recommended was one with which he did not agree, he kept the report out of sight. Rice-growing is a well-stabilized industry, and the duty is adequate. Nothing more need be said regarding it.
Mr NOCK:
Riverina
.- The rice-growers are quite satisfied with the protection they are receiving, and the consumers are getting rice cheaper than they could before local production was commenced. There is, however, little chance of this industry extending its area, and increasing its output to compete in the export market with the products of blacklabour countries. That fact must be recognized; but the industry is treating the Australian people fairly, and while it continues to do so, it will be entitled to reasonable protection.
Mr RIORDAN:
Kennedy
.- The Minister for Trade and Customs (Mr. White) has twitted the honorable member for Capricornia (Mr. Forde) with having adopted some recommendations of the Tariff Board and disregarded others. The honorable member’s job as Minister was to protect Australian industries, and not to leave them to the mercy of any board. Many loose allegations have been made against the honorable member. Yesterday, when he refuted his critics with documentary evidence in support of a statement that he had made at a public meeting, neither the Minister, nor the newspapers who had accused him of making false assertions had the decency to apologize. I am glad that the ricegrowers are satisfied with the protection they are receiving. Long may they continue to be so. I wish that all the other producers in the Commonwealth were equally satisfied.
Sub-items agreed to.
Item 104 (b) agreed to.
Division 5. - Textiles, Felts and Furs, and Manufactures Thereof, and Attire
Item 110, sub-items (a) (b) -
- Apparel, other than knitted, viz.: -
- Apparel, knitted, and apparel made from knitted or lock-stitched piece goods, viz. : -
And in addition to the rates specified in sub-items (a) and (b), ad valorem, British 30 per cent., general 50 per cent., or, as to all the goods covered by sub-items (a) and (b), the following rates if same return a higher duty, viz.: - ad valorem, British 60 per cent., general 75 per cent.
Mr PATERSON:
Gippsland
– We have had experience of both ad valorem duties and fixed duties and of both in combination, but on this item we have a fixed rate, plus an ad valorem rate, and also alternative ad valorem rates of 60 per cent. and 75 per cent., intended to operate should the other two combined provide less protection. This is an exceedingly complicated method of applying protection. The schedule would be more readily understandable if an item carried an ad valorem rate or a fixed rate. The fixed rate is obviously intended to apply to the cheaper goods. In addition to that are the ad valorem duties of 30 per cent. and 50 per cent. With an arrangement of this kind the minimum duty that can be charged is 60 per cent. British, although a much greater duty may be applied in the case of the cheaper goods when the fixed rate, plus the 30 per cent., is applied. The fixed rate gets the cheaper goods, and the 60 per cent. and 75 per cent. alternative gets the better quality goods: I do not know whether I shall be accused of being practically a freetrader when I ask the Government to leave only the 60 per cent. British and 75 per cent. general rates. This should be sufficient when we remember that there is a protection on these goods of about 52 per cent. before these duties become operative. A letter by a wellinformed writer appeared in the Sydney Morning Herald recently to the effect that freight, landing charges, primage and exchange on these goods amounted to 52 per cent.
Mr Scullin:
– That would depend upon the value of the articles.
Mr Forde:
– Does the honorable member think we should import clothing?
Mr PATERSON:
– The letter did not refer to made-up clothing. There can be very little difference between the natural protection referred to in that letter as applying to hosiery, and that operating on goods of this class. Freight would be much the same, and exchange and primage would certainly be the same with all kinds of goods. If there is 52 per cent. protection before these duties begin to operate, I think it should be agreed that a duty of 60 per cent. British and 75 per cent. general, should be more than adequate, for that would give a protection of 118 per cent. in all on f.o.b. prices. My object at the moment is not to offer complaints about the rates of duty so much as to simplify the method of applying the duty to these goods. With this object, I move -
That the sub-items be amended by omitting all fixed rates of duty, and the ad valorem duty of 30 per cent. (British Preferential Tariff) and 50 per cent. (General Tariff).
Surely it will not be contended that duties of the magnitude of 60 per cent. and 75 per cent., plus the additional 52 per cent. that I have mentioned, are inadequate. If my amendment is agreed to, some small measure of relief may be given to the poorer people of the community who purchase the cheaper classes of clothing.
Mr CASEY:
Corio
.- I cannot support the amendment. This item has been the subject of inquiry by the Tariff Board at a relatively recent date, and it is designed to protect the garment and textile industries. If garments come in from abroad the local garment-making industry will not be able to use locallymade textiles. The object of this item is, indirectly, although quite legitimately, to protect the textile industry. The report of the Tariff Board shows clearly that the duties were deliberately fixed at a high rate because of the end of season dumping to which’ this country, for climatic reasons, is subjected from abroad. There is little more to say. Honorable members on this side of the committee believe in applying the duties recommended by the Tariff Board. The board has given us good and specific reasons for the application of the duties which appear in the schedule, and I do not think that they should be reduced.
Mr FORDE:
Capricornia
.- I also hope that the amendment will not be agreed to. If it is accepted, the clothing and textile trades of Australia will be detrimentally affected, and the amount of labour which they provide will be reduced.
Mr Paterson:
– Is the protection, 112 per cent. British, inadequate?
Mr FORDE:
– I think it will be generally admitted that the clothing industry as a whole is one of the most important in the Commonwealth, in that it is a large user of our raw materials, particularly wool and cotton. Of what use would it be to protect the clothing industry if we allowed fully-manufactured garments to come in from abroad at a comparatively low rate of duty? If we pursue that policy the Australian importers would bring in large quantities of fully-manufactured garments, and this would be against the interests of our own apparel manufacturing industry. Provision was made by the Scullin Government for an increase of duties in respect of goods which formed the raw material of the apparel industry, such as cotton and wool yarns, cotton tweeds, woollen piece goods, and silk and artificial piece goods. Unless fiscal protection to one side of the textile industry is carried to the other side of it, and, in fact, carried co-ordinately through every section of the allied industries, it is of very little use. In the cases of apparel, it is particularly necessary to safeguard the local industry against overseas end-of -season clearance lines. Such competition could not be endured by the local industry. In the past British firms were able to enter the continental markets and buy large parcels of apparel at job or clearance prices. Much of this eventually found its way to Australia, and entered this country at British preferential rates, as there was nothing toindicate its country of origin. Dealers who are able to get their purchases in continental countries to Great Britain can soil where they like, and there is no means of obliging them to indicate the country of origin of the goods they handle. It has invariably been found impossible to provethat the dumping of apparel has occurred, and our manufacturers of these goods have suffered in consequence. The only means of combating this type of competition is to make the protection effective. That is what the Scullin Government did. During the war Australian apparel manufacturers were able to meet all our requirements, and surely, fifteen years after the war, they should still be able to do so. There is no justification for the bringing of wearing apparel into this country.
Mr Paterson:
– No one is suggesting that that should be done.
Mr FORDE:
– If the honorable member’s amendment is agreed to, apparel will undoubtedly be imported. Under the Pratten tariff of 1926, the rates of duty on clothing were increased in order to secure the local market for Australian manufactures. That the protection then afforded was inadequate is proved by the fact that the value of importations over the three years from 1927-28 to 1929-30 was reduced by only £288,000. The present rates of duty were first imposed by resolution on the 21st November, 1929, and the effect of them has been to reduce imports to a minimum. The Production Bulletin, Number 25, published by the Commonwealth Statistician, gives the following information in relation to the clothing industry for the year 1930-31 : -
The manufacture of apparel is a natural industry to Australia, and its development should be encouraged to the fullest extent. This proposal has emanated from the Acting Leader of the Country party (Mr. Paterson), who has come direct from a party conference. He has advanced them in order to make hisfollowers believe that he is trying to bring down the cost of living and cheapen the cost of production. He wishes to make the wool and wheat-growers believe that he is doing something for them, so that he will be applauded when he goes back to St. Arnaud. I trust that the committee will not be impressed by the arguments of the honorable member, but will approve of these duties imposed to protect a great natural industry.
Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP
– There is an important reason for the alternative duty, namely, to protect the Australian industry from dumping, and, in a report of the Tariff Board on this subject, the following pertinent paragraph appears: -
The board has, therefore, come to the conclusion that, if the rates of duty which applied under the Customs Tariff 1021-1930 were reverted to, the immediate result might bc a considerable increase in the imports of apparel, not only to the detriment of the locallyestablished manufacturers, but to the very important industries engaged in the supply of cloth and yarn. In the opinion of the board, regulation of the costs of apparel by ii finely adjusted table of duties affording local manufacturers only slight advantages over importers is impossible, because of the almost unlimited range of garments in demand, in sizes, design, material and colour. The fact that the clothing trade, especially in women’s garments, is largely ruled by fashion, and the fact that there is a danger of end-of-season stocks abroad being drastically marked down and shipped to Australia, tend to upset the most carefully planned duties.
Those are good and sufficient reasons for allowing the duties to remain as they are.
Mr SCULLIN:
Yarra
– I have met some of the men engaged in this trade, and they are now fearful of foreign competition, even with the duties as they are. The honorable member for Gippsland (Mr. Paterson) may laugh, but if he were employed in the industry, and were faced with the prospect of losing his job in the coming winter as a result of overseas competition, he would not be amused. The surcharge of 50 per cent., which had been imposed on these goods, has now been removed, a fact which has given rise to considerable apprehension amongst those in the trade. Here is an illustration of what can happen. A man engaged in this trade was in Paris recently, and was offered made-up ladies’ garments, beaded in such a fashion that they would be of no value in the following year, at 10s. each. They could not be made in Paris for five times that price, but, because the season was over, they had to be got rid of. They would be ready for the opening of the Australian season, because the end of their winter is the beginning of ours.
Mr Nock:
– By admitting such clothes we could provide cheap clothing for poor people.
Mr SCULLIN:
– Perhaps, but if our poor people had lost their employment as a result of foreign competition they would not be able to buy even cheap clothes. A duty of 60 per cent, on an article costing 10s. is only 6s., which affords very little protection when the retail price here would probably be £5 or more. That is the reason for imposing a flat rate of duty. We know that garments containing silk can .be imported from Eastern countries at extraordinarily low prices. I hope that the committee will not accept the amendment.
Amendment negatived.
Sub-item3 agreed to.
Progress reported.
page 781
ADJOURNMENT
Easter Recess - Petrol Industry, Royal Commission - Central Banking Legislation - Sales Tax Anomalies - Subsidy to Banana Industry
Mr LATHAM:
AttorneyGeneral · Kooyong · UAP
– I move -
That the House do now adjourn.
Inquiries have been made by honorable members as to the probable hour at which Parliament will rise on Thursday next for the Easter recess. It is the intention of the Government that the House shall rise at an hour which will permit honorable members to leave Canberra on Thursday; otherwise, of course, we might just as well sit on Friday.
I have received from Mr. A. E. Barton, who was to act on the royal commission on oil, a communication in the following terms : -
Some weeks ago, I promised State Government accept important appointment which I did not anticipate would develop for some months. This was position when I received your offer of appointment to petrol commission, but I find to-day that Premier requires my services immediately. Feel it incumbent on me redeem my earlier promise State Government. Feel sure you will appreciate my position, and would deem it a favour if you could make it convenient to release me of appointment recently notified by you. Bequest this treated as confidential until Premier makes announcement referred to above.
Since then I have communicated through the Minister for Health (Mr. Marr) with Mr. Barton, and I thought it proper that the House should be informed that Mr. Barton will be unable to act. I have replied to Mr. Barton’s telegram as follows: -
Greatly regret that you are unable to act upon the royal commission, but, in the circumstances, I (eel that the Government can only accede to your request to be released.
Lt ‘is the intention of the Government to endeavour to secure the services of a competent and skilled accountant to take Mr. Barton’s place.
Mr SCULLIN:
Yarra
.- The Acting Leader of the House (Mr. Latham) stated that the Government was considering an amendment of the Commonwealth Bank Act to establish a central bank, and to separate the Commonwealth Bank as a trading bank from it3 operations. Will the right honorable gentleman state when that legislation will be brought down?
Mr GABB:
Angas
.- I desire to bring under the notice of the Minister a matter relating to sales tax on milk bottles and wads used by a co-operative milk company in South Australia, of which many of the shareholders are dairymen residing in my electorate. I shall quote a portion of a letter received from the Commissioner of Taxation, Mr. Ewing, on this subject. It is as follows :-
It is understood that milk bottles which are used for distributing milk are not sold, but always remain the property of the milk vendor. The sales tax acts distinctly require payment of sales tax to be made by a registered person who acquires goods and applies them to his own use without selling them, unless those goods are expressly exempted by the acts. Milk bottles purchased to be used in marketing milk are in this class.
In accordance with a statement made by the former Prime Minister, in Parliament, during the passage of the Sales Tax Assessment Act, exemption from sales tax has been granted in respect of certain containers used by unregistered persons who are primary producers or manufacturers of exempt goods, in marketing the primary products or. exempt goods which they produce or manufacture, if the containers are sold with the goods.
There is’ no provision under the law that would enable me to exempt from sales tax milk bottles which are used for marketing milk, but which are not sold with the milk.
Wads used for sealing milk bottles are subject to the same treatment for purposes of sales tax as the bottles, and cannot be obtained by milk distributing companies without liability to sales tax.
It is strange that exemption from sales tax can be granted when the container is sold with the product, but is not permissible under the act in the case that I have quoted. This decision adversely affects dairymen, who have a hard row to hoe, and who are passing through a particularly difficult period. I trust that when the Government is considering the sales tax it will see if relief can be afforded in this direction.
Mr NOCK:
Riverina
.- Another anomaly similar to that mentioned by the honorable member for Angas (Mr. Gabb) has been pointed out to me; it relates to fruit drinks and aerated waters. I understand that sales tax is charged on both bottles and the waters that they contain, when they are sent out from a factory, but that fountain drinks that contain a similar preparation are not liable to it. I urge the Government to give consideration to the adjustment of this matter.
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936
.- Yesterday I asked a question in relation to the allocation of the £5,000 that it is estimated will be collected in customs duty on Fijian bananas, which the Government proposes to set aside in order to assist the banana industry. The reply that I received was as follows: -
The Commonwealth Government has agreed to allocate for the purpose of assisting the Australian banana industry the amount of duty collected upon imported bananas. As this duty will be collected from time to time during the year, it has been arranged, in .order to avoid delay, to make available as and when required an amount of £3,000 by way of an advance against the equivalent of customs duty that may be collected during the year 1933. Of that sum £100 has been definitely allocated to Western Australia by the Commonwealth Banana Committee. The Government of Western Australia has been asked whether it desires to administer this provision of £100 or whether it would prefer the committee to administer it on behalf of the industry in Western Australia.
If an official were sent from one of the eastern States to control the expenditure of that £100, not much, of it would be left by the time that he returned. The reply proceeds -
The sum of £1,500 out of the total of £3,000 has been allocated for scientific work, including transport, packing, maturation and diseases of handling and transport, thrip and beetle borer. The results of these scientific investigations should benefit the industry throughout Australia.
I agree that these investigations should benefit the industry throughout Australia. The objection that I offer is that only £100 is allocated to “Western Australia. There is a feeling in that State that it is not given the deal to which it is entitled. It is rather unfortunate, therefore, that such a small amount should be allocated to an industry which over there is in the pioneering stage. I shall be told, of course, that Western Australia has no claim, because this duty results from action that, to a certain extent, injures the banana industry in Queensland. Although I do not cavil at that, I maintain that the wrong system is being adopted. It is true that Western Australia has only about 25 acres planted with bananas at the present time. For years, however, a number of representatives from that State have continually opposed the cental duty, and have advocated the free importation into Western Australia of bananas from Java. Unfortunately for Queensland as well as for Western Australia, it is most difficult to land Queensland bananas over there in anything like an edible condition. They would be welcomed but for that fact. If this big industry in the eastern States is to be given £1,400 out of the £1,500 received by way of duty, because it is collected on this side of the continent, what allocation does the Government propose of the duty that has been paid by Western Australia for a considerable time, which in 1931-32 amounted to £6,079? Western Australia occupies an unfavorable position in regard to the cultivation of this fruit. It is being grown on the Gascoyne river, where the average rainfall is only nine inches a year, with the result that a method has to be adopted that is entirely unknown to banana-growers in the East. The river rarely flows, but by a wise dispensation . of Providence there is an inexhaustible supply of sub-artesian water. It is, however, necessary to install pumps, and to work them with big oil engines at a substantial cost. This places the Western Australian growers at a disadvantage in their fight with the importing interests. In the circumstances, it is merely a quibble to argue that practically the whole of the £1,500 should be set aside for an industry that is already fully established. From the point of view of policy, too, it is exceedingly unwise to make this trumpery gesture to an industry that is only in its infancy. An additional 20 farms are being cut up at present, and as one who favours the protection of primary industries, I am hopeful that it will not be long before it will be unnecessary to spend a cent on the importation of bananas from Java. I am satisfied that we can produce the best quality fruit.
I have not raised this question out of a spirit of hostility. I consider that I should have been lacking in my duty had I not brought it forward.
Mr FORDE:
Capricornia
.- I bring under the notice of the Acting Leader of the House (Mr. Latham) a request ‘by the Australian Dried Fruits Association for exemption from the sales tax on caustic soda, carbonate of potash, olive oil, hessian and sisalkraft, dip tins, and agricultural drain pipes. The request has been refused, but the association desires that the matter be reconsidered. Similarly, the association renews its request for the exemption from primage duty of hessian, olive oil, carbonate of potash and caustic soda. The growers desire that their claims be reconsidered as soon as possible.
Mr LATHAM:
AttorneyGeneral · Kooyong · UAP
.- The Leader of the Opposition (Mr. Scullin) has asked when it is likely that banking legislation will be introduced. There is no practical chance of doing so in the first half of this year. In view of the other work before us, and the desirability of waiting until the world economic conference has considered the subject of finance, any such legislation will, it is expected, be brought down towards the end of the year.
Various requests have ‘been made in relation to exemptions from the sales tax. The Government has made some concessions in that regard, and the danger of following that course has been shown, because the correction of what are described as anomalies results in requests for further concessions. Anomalies would not exist if it were not for the exemptions made.
Mr Paterson:
– Every exemption creates another anomaly.
Mr LATHAM:
– Quite so. The sub’ject of milk bottles has been mentioned. The main difficulty, perhaps, in that regard, is to draw distinctions between various forms of containers. If an exemption is granted in one case, the field is opened to all kinds of problems, and it is difficult to arrive at a generally satisfactory result. The honorable member for Capricornia (Mr. Forde) has asked for further exemptions from the sales tax and the primage duty. All that I can say is that I hope that the financial position will make it possible to make further remissions of this tax; but, speaking without full authority, I should say that the question arises whether, if we are able to spare any revenue, it will not be wiser to make an all-round reduction of the rates rather than to create further exemptions, and therewith further anomalies. The whole matter will have to be considered from that point of view.
Regarding the fervent plea of the honorable member for Kalgoorlie (Mr. A. Green), we are all proud of the 25 acres that are under banana cultivation in Western Australia, and we hope that the area will be extended.
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936
– Twenty more blocks have been taken up.
Mr LATHAM:
– If the Queensland plantations increased at the same rate, there would be thousands more. The seriousness with which this matter has been treated by the honorable member is out of proportion to its real significance. Western Australia has done very well in being allowed £100, having regard to the size of the industry there, and in view of the fact-
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936
– My advice to the Government is that it should stick to the £100!
Mr LATHAM:
– Very well; I need not say any more.
Question resolved in the affirmative.
House adjourned at 4.9 p.m.
page 784
ANSWERS TO QUESTIONS
The following answers to questions were circulated: -
Bt-Law Admissions of Goods
Dr Maloney:
MELBOURNE, VICTORIA
y asked the Minister for Trade and Customs, upon notice -
In view of the fact that goods admitted by departmental by-laws free of duty into one
State can be re-exported into other States free of duty, is it fair to other States where duties on similar goods are collected?
Mr White:
UAP
– General departmental by-laws apply, equally in all States. A special by-law is dealt with on its merits, and the article concerned is imported for a special purpose. If identical circumstances arose at the same time in another State, the Minister would undoubtedly accord the same treatment to the goods imported into the latter State.
Use of Gliders
Mr Scholfield:
WANNON, VICTORIA
d asked the Assistant Minister for Defence, upon notice -
Whether any steps have been taken by the Defence Department to investigate and test the value of gliding as elementary flying instruction, and as a means of reducing the present heavy subsidy costs of training aeroplane pilots ?
Mr Francis:
UAP
– Officers of the Civil Aviation Branch have given attention to gliders, and have considered whether they had any great value in the training of aeroplane pilots. As far as has been ascertained none of the leading nations of the world, with the possible exception of Germany, has seen fit to extend governmental assistance to gliding organizations. Though the department is not convinced that gliding is of great value in the direction suggested by the honorable member, it has always been willing to encourage it, and has made definite attempts to bring about close co-operation between the many bodies interested. “O.S.” Stamps.
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936
en asked the PostmasterGeneral, upon notice -
As he stated that it has been found necessary to abolish the use of “O.S.” stamps in the departments because of trafficking, and that the substitution of ordinary stamps will not permit of this, what was the purpose in using perforated “O.S.” stamps for official postage in all government departments for over twenty years?
Mr Archdale Parkhill:
UAP
– It was apparently believed that the perforations of stamps to be used for government purposes would afford some degree of security. It has, unfortunately, led to certain undesirable practices, and it has been decided that the abolition of the perforation or overprinting of stamps i3 generally in the public interest.
Public Service Vacancies
Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936
n asked the Prime Minister, upon notice -
- Is it R fact that a number of vacancies in the Public Service are about to bc filled?
- If so, will he give residents of Brisbane, who are qualified to fill the positions, equal opportunity in filling future vacancies ?
Mr. Lyons (through Mr. Latham). - The Public Service Board of Commissioners advise thai at present no action is proposed for the filling of vacancies iu the Public Service other than that now in operation, that is, by utilization of officers within the Service or the appointment of eligible returned soldiers. That provision is expected to be adequate to meet demands for some time to come. The question of recruitment for the Public Service from other sources in the future is at present under consideration, and when circumstances require such action, full consideration will be given to the question of affording candidates in every State opportunities to qualify.
Salary and Service of Captain Draper
Mr Francis:
UAP
s. - On the 29th March, the honorable member for Herbert (Mr. Martens) asked the following questions, upon notice -
- What was the salary paid to, and the length of service of. Captain JJ. P. Draper, as area officer at Cairns prior to the war?
- What was the salary paid to, and the length of service of, that officer as Censor at Cairns during the early part of the wart
I am now in a position to inform the honorable member as follows : -
- Captain N. E. P. Draper was employed as area officer at Cairns from the 15th October, 1914, to the 31st March, 1921. His rate of salary as area officer from the loth October, 1914,” to the 30th November, 1917, was £150 per annum, and from the 1st December, 1917, to termination of appointment, £180 per annum. He did not have any service as area officer prior to the 15th October. 1914.
- Captain Draper was employed as required as Assistant Censor at Cairns from the 6th November, 1914, to the 7th May, 19 ID, with salary at the rate of £400 per annum while actually employed as Censor, but the employment was limited by maximum payments of £5 per month.
Rutherford Military: Camp.
Mr Francis:
UAP
s. - On the 24th March, the honorable member for Hunter (Mr. James) asked if the Government would consider making available the military camp at Rutherford for the use of the unemployed during the coming winter. I am now in a position to inform the honorable member that in September, 1932, the State Government of New South Wales made satisfactory arrangements for the accommodation of the unemployed housed in Rutherford Camp, and on the 6th of that month handed the camp back to the Defence Department. Since then no application has been made by the State Government for the renewed use of the camp, and in the absence of such application the Commonwealth Government assumes that the satisfactory arrangements made in September still exist.
Cite as: Australia, House of Representatives, Debates, 31 March 1933, viewed 22 October 2017, <http://historichansard.net/hofreps/1933/19330331_reps_13_138/>.