House of Representatives
6 December 1933

13th Parliament · 1st Session



Mr. Speaker (Hon. G. H. Mackay) took the chair at 11 a.m., and read prayers.

page 5607

QUESTION

PARLIAMENTARY SESSIONS

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– On the 8th November last, I asked the Prime Minister for an assurance that the practice which obtained for a quarter of a century, and which is provided for in the Constitution, that there shall be a session of Parliament each year, would in future he observed. Is the right honorable gentleman able to say whether there will be a reversion to this practice by the prorogation of Parliament when its present sittings are completed?

Mr LYONS:
Prime Minister · WILMOT, TASMANIA · UAP

– I cannot give the assurance sought by the honorable member. I think that it will be necessary for additional tariff items to be tabled, and as they may not have been disposed of when the Christmas recess is begun, the prorogation of Parliament cannot be hoped for.

page 5607

QUESTION

COMMONWEALTH BANK, ADELAIDE

Use of New South Wales Stone

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

– I am continually receiving letters pointing out that stone suitable for use in the extensions that are being made to the Commonwealth Bank building in Adelaide is available in South Australia. I realize that the Government cannot direct the Commonwealth Bank Board as to what stone shall be used in this work, but will the Prime Minister again communicate to the board the fact that the availability of supplies of suitable stone in South Australia make it unnecessary to use stone imported from New South Wales?

Mr LYONS:
UAP

– On a previous occasion, in reply to a similar question, I intimated that this matter was one for the Commonwealth Bank Board, and not the Government. I now go further and say that, while it is the duty of the Government, so far as possible, to see that Australian materials are used in Australian buildings, it isscarcely its province to see that they come from any particular State.

page 5607

QUESTION

TELEPHONE RATES AT NEWCASTLE

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES

-Can the PostmasterGeneral explain why the announced reductions of telephone rates are to apply only to capital cities, to the exclusion of towns that have larger populations and do a greater volume of business than some of those capitals?

Mr ARCHDALE PARKHILL:
Postmaster-General · WARRINGAH, NEW SOUTH WALES · UAP

– I have explained that this is largely in the nature of an experiment, and that one of its main purposes is to provide employment in the reconditioning of telephones that are out of use, but which, it is thought, might by this means bo again placed in operation. A loss to the department of between £35,000 and £40,000 is involved, but it is hoped that that may be recouped. If the suggestion of the honorable member, to extend the scope of the proposal beyond capital cities, were given effect, the loss would be anything up to £100,000, and that cannot be contemplated by the department. If, however, the present arrangement should prove successful, I am certain that the Government would consider the extension of the privilege.

page 5607

QUESTION

ALCOHOLIC BEVERAGES

Quota on Imports into the United States of America.

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– On Monday last the honorable member for Wakefield (Mr. Hawker) asked the Minister for Trade and Customs if he would represent to the Government of the United States of America the unfairness of excluding from America imports of Australian wines and other alcoholic beverages, under the quota arrangements that are to operate upon the repeal of the prohibition law. Has the Minister an announcement to make to the House on the subject ?

Mr WHITE:
Minister for Trade and Customs · BALACLAVA, VICTORIA · UAP

– The Department of Trade and Customs is conducting inquiries, and I personally intendto take up the matter with the Consul-General in Australia for the United States of America. Although in the past Australia had no wine quota with the United States of America, and it is now proposed to trade on a quota basis, I intend to emphasize Australia’s adverse trade balance as a (actor, which entitles us to a share of that trade.

page 5608

QUESTION

AUSTRALIAN COMMONWEALTH LINE OF STEAMERS

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– Will, the Prime Minister say when I may expect to receive the information that I have sought from him, in regard to the. sale of the Australian Commonwealth Line of Steamers?

Mr LYONS:
UAP

– A statement upon this matter is being prepared, and I expect to be able to make it before the Christmas adjournment.

£16,647,000 CONVERSION LOAN.

Mr JENNINGS:
SOUTH SYDNEY, NEW SOUTH WALES

– Has the Prime Minister any information to convey to the House with respect to the proposed conversion loan of £16,647,000 in London?

Mr LYONS:

by leave. - Yesterday, I informed Parliament that negotiations were approaching finality for a conversion loan of £16,647,000 in London, and that it was expected that the loan would be underwritten that day. I have now received advice from Mr. Bruce that the underwriting arrangements were completed yesterday on the terms indicated by me, namely, 3$ per cent, at 99 for fifteen years, with the option to the Government to repay after twelve years. On these terms the yield to the investor, allowing for redemption at the end of fifteen years, is £3 16s. 9d., compared with £3 17s. lid. for the last operation and £4 ls. lOd. in respect of the previous conversion, which was carried out in July.

The saving of interest on the present conversion .will amount to £243,000 a year. In addition, there will ; be a saving in exchange, calculated at the present rate, of £61,000, or a total of £304,000, the whole of which will accrue to State governments.

Since October last year £78,589,000 of high interest-bearing loans have boon converted to loans bearing lower interest rates. The annual saving on all these operations now aggregate £1,923,000 for interest and £381,000 for exchange at the present rate, or a total annual saving of- £1,904,000.

The balance of loans hearing interest at 3 per cent., over which Australia has optional rights of conversion, is now £17,850,000, and it is hoped that a further operation will bc carried out in due course, reducing these loans to lower interest rates.

This conversion operation has been received very favorably indeed by the press of Great Britain, and the Government hopes that it will be a real success.

page 5608

QUESTION

INTERSTATE TELEGRAPH RATES

Mr NOCK:
RIVERINA, NEW SOUTH WALES

– Is the PostmasterGeneral yet in a position to review interstate telegraph rates,’ which seem to be anti-federal in their relation- to border towns?

Mr ARCHDALE PARKHILL:
UAP

– The Government is not at present in a position to review those rates.

page 5608

QUESTION

COMMONWEALTH FINANCES

Sir HENRY GULLETT:
HENTY, VICTORIA

– Will the Treasurer say whether the financialreturns of the Commonwealth for November arc yet available for publication? If not, will the Government endeavour to have them published before the House is required to debate the proposed sales tax on flour?

Mr LYONS:
UAP

– It is usual to publish such statements on the 10th of each month, but this month it will not be possible to make the publication until the 11th instant.

page 5608

QUESTION

PERFORMING RIGHTS

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– Will the AttorneyGeneral state whether it is a fact that the Royal Commission on Performing Rights recommended that the onus of proof of copyright should be placed on the Australasian Performing Right Association? Is it a fact that, as the law now stands, the onus of proof of the absence of copyright is on the defendant and that the plaintiff has not to prove copyright? If so, is it the intention of the right honorable gentleman to have the act amended so as to remove this anomaly?

Mr LATHAM:
Attorney-General · KOOYONG, VICTORIA · UAP

– The anomaly suggested by the honorable gentleman does not exist. Possibly, his question is based upon a letter that recently appeared in the Sydney Morning Herald, signed by Mr. Arthur Griffiths, stating that the onus of proving that there is no copyright is always on the defendant, and that the plaintiff does not have to prove that he owns copyright in any work in respect of which he claims copyright. That is quite inaccurate. The law at present provides that copyright shall be deemed to be admitted in the plaintiff, unless the defendant puts the question in issue by pleading in his defence that the plaintiff is not the owner of the copyright or that copyright in the work does not exist, in which case the owner has to furnish proof of copyright. Mr. Griffiths, in his letter, completely misapprehended the existing legal provisions.

Mr FENTON:
MARIBYRNONG, VICTORIA

– Is the AttorneyGeneral in a position to inform the House of the latest developments in regard to the relations between the Australasian Performing Eight Association and its clients?

Mr LATHAM:

– It is rather difficult, inreply to a question without notice, to refer precisely to all the aspects of this subject,but I can inform the honorable member that a number of agreements have been entered into. Recently, agreement was reached between the Australian Broadcasting Commission and the Australasian Performing Eight Association for the payment of a fixed sum in respect of performing rights. There is also an agreement between the association and the B class broadcasting stations. Other agreements also have been made, but I cannot say that the terms of any of these agreements have given general satisfaction. A short bill has been drafted which, it is hoped, will contribute to the settlement of this question. Copies of the draft bill have been sent to those concerned, and a majority of the interests affected have expressed their approval of the principle underlying it. Notice of the introduction of the bill has already been given, and it may be possible to introduce the bill at a later hour to-day. If the measure is approved, it will, I think, deal in a practical manner with difficulties which arise without raising difficult and acute questions of law, including international law, which otherwise would be involved.

page 5609

QUESTION

WAR SERVICE HOMES

Mr.ROSEVEAR. - During the discussion of the estimates for the War Service Homes Department, the Minister adminis tering WarService Homes stated that equities in properties that had reverted to the department were being paid out daily. On the 4th November last I sought to obtain from the honorable gentleman information regarding this matter, and he stated that it. might not be possible for him to furnish it. As the annual report of the department contains practically all the details of trading in War Service Homes, why is it not possible to give information concerning the payment of these equities?

Mr FRANCIS:
Minister in charge of War Service Homes · MORETON, QUEENSLAND · UAP

– The honorable gentleman has asked a question, upon notice, in relation to this matter, and I have supplied the only information that is available. At the present time, careful inquiry is being made into individual cases in every State. Several hundreds of cases have to be examined to ensure the completeness of the answer. So soon as the information that it is possible to obtain in every State is available, the honorable member will be advised. If the House is in recess, he will be notified by letter.

Mr.ROSEVEAR. - I think that the Minister has misunderstood the purport of the questions which I asked on the 30th November. He referred to thousands of claims which have still to be settled. Does he realize that the questions which I asked on the 30th November, referred only to cases which had been settled up to the date, and not to cases at present under review? Further, does he realize that, as cases will arise from time to time, the process will be interminable, if he waits for information in respect of them all? I therefore ask him whether he will secure the information I sought in respect of the cases which had been settled before the 30th November.

Mr FRANCIS:

– I shall be delighted to accept the amendment of the honorable member’s question, and to supply him with the information as early as practicable.

Mr.ROSEVEAR. - There has been no amendment of the question.

page 5609

QUESTION

PRICE OF GRAPES

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Has the Minister for Trade and Customs received replies from Ministers for Agriculture in the different

States, to his request for the co-operation of the governments and parliaments of the States in the maintenance of the price of grapes, which is fixed from time to time by the federal authority?

Mr WHITE:
UAP

– I believe that I can say that the Ministers for Agriculture in New South Wales, South Australia, Victoria and Western Australia are willing to attend a conference on this matter. By reason of the sittings of this House, it has not yet been possible to fix a definite date, but I believe that the conference will be held in Melbourne within the next two weeks.

page 5610

QUESTION

COMMONWEALTH BANK

Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936

– Has the Prime Minister noticed the press report of the publication of a work on the Commonwealth Bank of Australia, by a Doctor of Philosophy of the Harvard University, in which is expressed the opinion that the record of this institution would give an impetus to the national control of banking? In view of the high tribute paid by this American authority to the Commonwealth Bank, will the Government consider the advisability of so increasing its powers as to enable it to compete with private banks for the banking business of the community?

Mr LYONS:
UAP

– My attention has been drawn to the reported reference to the book, and I am pleased to know that people in other parts of the world, as well as the members of the Government, appreciate the splendid work performed by the Commonwealth Bank. As the Bank is carrying on practically every function of a central bank, I see no necessity for conferring additional powers upon it.

page 5610

PAPERS

The following papers were presented : -

Superannuation Act - Second Quinquennial Report of the Superannuation Fund, as at 30th June, 1932.

Ordered to be printed.

Audit Act - Transfers of amounts approved by the Governor-General in Council - Financial year 1932-33 - Dated 20th November, 1933.

page 5610

QUESTION

FRUIT-GROWING INDUSTRY

Mr HILL:
ECHUCA, VICTORIA

– Has the Prime Minister received a letter from the Secretary of the Northern Victorian Fruit-growers Association, stating that the fruitgrowing industry is in a deplorable condition because canners are practically refusing to accept fruit from fruit-growers on account of the large stocks of canned fruit already held in London? If the Prime Minister has received the letter, will he say whether it contains a request for a deputation from the Association, and, if so, what he proposes to do in the matter ?

Mr LYONS:
UAP

– I have received the communication referred to, but I cannot see that any advantage would accrue to the fruit-growers from the arranging of a deputation. Moreover, it will be difficult to find time for a deputation. The representations contained in the letter will be taken into consideration.

page 5610

QUESTION

TRADE WITH THE EAST

Mr HOLMAN:
MARTIN, NEW SOUTH WALES

– Has the Minister for Commerce published any report of his own efforts to develop trade with the Eastern countries, so that honorable members may have a comprehensive survey of the situation ? If not, will he prepare such a report as early as possible?

Mr STEWART:
Minister for Commerce · PARRAMATTA, NEW SOUTH WALES · UAP

– As a result of a conference held in Sydney early this year, committees representative of the business interests which trade with the Eastern countries have been set up in each State, the object being to stimulate the development of trade between Australia and those countries. In addition, a federal committee has been established. These committees have met regularly in an attempt to remove the difficulties which exist, particularly in relation to banking, shipping and transport. In addition, the Government has decided to set up two agencies, one in Batavia, and the other at either Hong Kong or Shanghai, in China. As a result of the combined efforts of the Government and the business interests represented on the committees, it is hoped that there will soon be a considerable development of Australian trade with Eastern countries.

page 5610

QUESTION

TOBACCO COMMITTEE’S REPORT

Mr THOMPSON:
NEW ENGLAND, NEW SOUTH WALES

– Can the Prime Minister say when the debate on the Mareeba tobacco report is likely to take place; and willhe endeavour to arrange that it is not left till the concluding hours of the session?

Mr LYONS:
UAP

– There are a number of important matters to be disposed of before Parliament goes into recess; the report referred to by the honorable member is one of them. I cannot say when it will be discussed, but I assure the honorable member that an opportunity to discuss it will be afforded before the House rises.

page 5611

QUESTION

BANKING LEGISLATION

Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

– Will the AttorneyGeneral inform the House whether the promised amendments to the banking legislation of the Commonwealth will be introduced next session?

Mr LATHAM:
UAP

– The honorable member has asked his question under a misapprehension. I said that the Government would consider the desirability of introducing certain banking legislation, but would not introduce it until after the World Economic Conference had been held, because it hoped to receive some direct guidance from that conference. Unfortunately, the hope has not been realized, and the Government, therefore, has no present intention of introducing banking legislation, for reasons which the Prime Minister gave in reply to an earlier question to-day.

page 5611

QUESTION

INTERNATIONAL WHEAT AGREEMENT

Russia’s Quota

Mr WARD:

– Is the Minister for Commerce in a position to supply the House with information regarding the determination arrived at by the conference of wheat exporting countries held in London on the 27th November, and, if so, will he make it available to the House?

Mr STEWART:
UAP

– I am not in a position to advise the House of any final determination, because no such determination was reached. There has not been the slightest suggestion of difficulty with regard to the exportable quota allocated to Russia during the present year.

page 5611

QUESTION

MANDATED TERRITORY

Unrest Among Natives

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Has the attention of the Minister for Health been drawn to a cabled statement from London that there is unrest among the natives of the island of New Ireland, which is part of the mandated territory of New Guinea? Is it not a fact that practically all the natives in the districts there are under control, and are not of the warlike andbelligerent disposition suggested by the cable ?

Mr MARR:
Minister for Health · PARKES, NEW SOUTH WALES · UAP

– My attention has been drawn to a statement in one of the English papers that unrest exists among the natives of New Ireland. As a result of my recent visit to the Mandated Territory, and of investigations which have been made, I can assure the honorable gentleman that there is no unrest in New Ireland, which is an island on which the natives are completely under control, and are more advanced than on the other islands in the group.

page 5611

QUESTION

FEDERAL CAPITAL TERRITORY

Workmen’s Compensation Ordinance

Mr BLAKELEY:

– Can the Prime Minister inform me of the result of the representations to the Minister for the Interior, made by the right honorable member for Cowper (Dr. Earle Page), the honorable member for West Sydney (Mr. Beasley) and myself, in reference to anomalies in the Workmen’s Compensation Ordinance of the Federal Capital Territory?

Mr LYONS:
UAP

– I shall bring the honorable member’s question under the notice of the Minister for the Interior.

page 5611

QUESTION

AUTOMATIC TELEPHONE EXCHANGES

Mr THOMPSON:

– Will the PostmasterGeneral say whether it will be necessary for local residents to bring the claims of their districts for automatic telephone exchanges under the notice of the department, or will the department install such exchanges where it thinks best, without any local agitation ?

Mr ARCHDALE PARKHILL:
UAP

– The department is preparing a list of places where it proposes to instal automatic telephone exchanges; but I am sure that it would not object to any honorable member, or body of local residents, submitting the claims of a particular district for consideration.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES

– I ask the PostmasterGeneral whether in determining the location of the automatic telephone exchanges his department will give consideration, not merely to the number of subscribers at particular exchanges, but also to the fact that certain exchanges being junctions for other smaller exchanges, would, inthe event of a rural automatic installation, make it possible for people in remote districts to obtain medical aid during the evening?

Mr ARCHDALE PARKHILL:

– I assure the honorable member that the department, in its survey, will consider that matter.

page 5612

QUESTION

GRANT TO PAPUA

Mr WATKINS:

– Will the Government consider restoring the grant previously paid to Papua in order that the patrols which previously existed may be re-established, and trouble among the natives prevented?

Mr MARR:
UAP

– As I stated on Monday, in reply to a question, the Government has already restored the subsidy to £40,000. The question of patrols will be considered by a conference of administrators to be held in Melbourne. The Government will consider whether a more effective system of patrol and exploration than’ has hitherto existed is possible.

page 5612

COST OFDIVISIONS

Mr SPEAKER:

– The honorable member for Barker (Mr. Cameron) recently made an inquiry regarding the cost of printing the division lists in Votes and Proceedings. From information supplied to me, I am now able to inform the honorable member that the cost is from 12s. to 143. for each division list, according to the number of members included in it.

page 5612

BANKRUPTCY BILL (No. 2) 1933

Second Reading

Debate resumed from the 5 th December (vide page 5495), on motion by Mr. Latham -

That the bill be now read a second time.

Mr BAKER:
Oxley

– A little more than eighteen months ago a Bankruptcy Bill of an involved character and considerable size was brought down just prior to a recess, and objection was raised by honorable members to the hurried passage of. such a measure. Consequently the then Assistant Treasurer, Mr. Bruce, agreed that if the bill were passed without discussion a committee of honorable members would be appointed to consider its provisions and submit a report upon them to the Government. I was one who objected to the hurried passage of the measure, particularly because it contained certain provisions in clause 19 which made a considerable departure from recognized bankruptcy practice in this or any other country. The excuse made for these provisions was that industrial conditions were depressed at the time; but the same excuse could have been made in respect of practically every other country in the world, and it could also have been made on earlier occasions in relation to Australia. In consequence of the promise made by the then Assistant Treasurer, the bill was passed without discussion. Subsequently the committee of honorable members was appointed as promised, and the Opposition did me the honour of appointing me as its representative. The committee held many meetings, and, in due course, presented a report to the Attorney-General (Mr. Latham). Following upon this, the right honorable gentleman brought down another bankruptcy bill some months ago, which included practically . all the recommendations of the committee. Later, he intimated that representations had been made to him by certain trustee associations and chambers of commerce, and that the Government had, in consequence, decided to defer consideration of the subject until those recommendations could be considered. The bill was, therefore, withdrawn, and Parliament has not, so far, had an opportunity to consider the important recommendations made by the committee. Incidentally, I may say that the committee, while it was sitting, gave careful consideration to the proposals submittedby the trustee associations and the chambers of commerce, and indicated in its report its opinions in respect to them. This bill, however, does not touch any of the recommendations of that committee, but deals with three other important matters not submitted in the first instance, to the committee. These provisions, however, are of an urgent character, and 1 do not expect much difference of opinion in regard to them. The first relates to the provisions of certain Farmers Relief Acts and other legislation passed by State Parliaments. It is desirable, of course, that farmers who take advantage of such acts should not thereby be caused inadvertently to commit an act of bankruptcy involving the sequestration of their estates.’ Clause 2 of this bill covers that matter. The next provision has relation to bills of sale. It has been found necessary to insert the word “ valid “ in certain sections of the principal act in consequence of recent decisions of the bankruptcy judge. The third provision of the bill is designed to enable a member of the New South Wales Government to transfer to one f>f his partners the administration of a large number of estates of which he is trustee. Although this measure will have particular application to that case, it will also enable similar action to be taken in respect of certain persons acting as trustees of 50 or more estates. The provision that “the Court shall not transfer the office of trustee in regard to the estate of any bankrupt where one-sixth in value of the creditors lodges with the court an objection to the transfer “ is a sufficient safeguard. In these circumstances, I shall support the bill, but I urge the Government to provide the earliest possible opportunity for honorable members to consider a measure incorporating the comprehensive amendments of our bankruptcy law recommended by the committee of honorable members to which I have already referred.

Sir LITTLETON GROOM:
Darling Downs

.- This bill involves three separate provisions which are being introduced at this stage because they are particularly urgent. I do not suggest that they are more important than certain other issues that were raised in our bankruptcy legislation and considered by the committee; but it is desirable that these provisions should be enacted as soon as possible. I am afraid that the honorable member for Oxley (Mr. Baker) has overlooked the fact that one of the matters dealt with in this bill was referred by the Attorney-General to the committee of honorable members which considered our bankruptcy law. If the honorable member will reconsider the matter, I think he will recollect that such a request was received by the committee from the Attorney-General, while it was engaged in its work, but the sugges-tions promised by the State were not received before the report was made, and the matter was not dealt with.

The first provision of this bill has relation to the estates of farmers and other persons who have been granted relief under the provisions of certain Farmers Relief Acts of the various State Parliaments. The position of the farming community of Australia to-day is such that all the relief that either the Commonwealth or State Parliaments can grant to them should be given. This is emphasized by the report laid on the table of the Legislative Council of South Australia of the 6th July, 1933, on “debt adjustment in respect of the agricultural and pastoral industries “. The report directs attention to the enormous liabilities of the farmers of that State, and shows that their aggregate indebtedness at the 30th June, 1932, was £33,812,195. That total did not include money lent on mortgage to farmers by private investors, estimated to be about £5,000,000; so that the total liabilities of the farmers of South Australia at that date were £38,812,195. This is an extraordinarily heavy burden, but I suppose it is only typical of the burden which farmers in other States are carrying. It is for this reason that various schemes for the relief of farmers have been enacted by the Parliaments of Victoria, New South Wales and South Australia. The report from which I have already quoted discloses that-

As at 20th June, 1932, 27G farmers and 15 graziers held certificates under the Debt Adjustment Act, and of the former 102 had also received advances under the Farmers Relief Act.

For the 1931-32 season, 3,459 farmers received advances under the Farmers Relief Act.

For the 1932-33 season, 2,094 farmers received, such advances.

In introducing an amending farmers’ relief bill in the Victorian Legislative Assembly the Victorian Minister said that, during the fourteen months in which the act had been in operation in that State, 187 prohibition certificates had been granted and 57 refused. In 102 cases, the grant of certificates had been opposed by creditors, and in 140 cases creditors had not offered opposition. He said that 32 per cent, of the certificate holders were regarded by the board as assured of success, 48 per cent, were doubtful, and 20 per cent, seemed to indicate failure. The figures for New South Wales are not available, but the effect of the legislation is shown in the report issued by Mr. H. Rogers, Director of Farmers Relief in that State, who is reported in the Sunday Times of the 3rd December to have said -

The producers have regained confidence in the ability to carry on, and, freed from worries, arc concentrating on their holdings. They realize that the policy being pursued by the Board calls for individual effort to help themselves, and in the majority of cases such effort is being made to the utmost.

The report of the Auditor-General for South Australia, dealing with farmers’ debt adjustments for the year 1931-32, states -

The scheme of the act is sound. It operates to assist the farmer to again become independent, to reduce his financial burdens, and to help him in preparing a good plan of operations, which some farmers are unable to do for themselves. The Director hae also been able to prevent harsh action by the creditors, and to make them realize that “Mercy seasons justice “, and most creditors have co-operated with their debtors to their mutual advantage.

These schemes are successfully operating in each of the States, and the farmers are receiving financial relief at the same time. Anything that this Parliament can do to facilitate this good work should be done; consequently legislation of the’ nature of this bill has become necessary to provide that the State schemes shall not ‘be invalidated on the ground that they conflict with federal law, which, of course, is supreme. When a creditor presents a petition, the verifying affidavit must state whether the debtor is- a person in respect of whose affairs proceedings are being taken under a State act providing for the management of his affairs, that is, a State farmers’ relief act. If the debtor is such a person the proper authority in the State is notified and he may apply for an order to stay the proceedings on the petition, and the judge decides. It is necessary to pass this bill as soon as possible because we do not wish the States to think that the schemes which are operating beneficially to the farmers are likely to be jeopardized.

The second point mentioned by the Minister is purely a legal one. It affects rights which have to be dealt with, and the position should not be left in doubt. As regards the third matter, an important principle is involved. The office of trustee is one of dignity and importance, and, from its nature, a trusteeship is not created for the benefit of the trustee, but in order to protect the interests of creditor and debtor alike, and the trustee is under the supervision of the court. He has no property that he can transfer to somebody else as a right, and in that regard he holds an important office. Although the act makes provision to meet the case of the vacation of the office of trustee, it is highly desirable in this particular case to enable the administration of the estates to be transferred as a whole. In the case to which the bill particularly applies, the estates are administered by a partner in a a certain firm. If there were a sudden transfer to other trustees, not only would there be a great trouble in calling meetings of creditors, and getting them to elect new trustees, but the new trustees would have to begin their work de novo. It is highly desirable that a power such as that given under this clause should be granted ; but, as the Attorney-General remarked, this particular measure provides for an individual case, and, as a rule, Parliament scrutinizes such legislation with more than usual care. As chairman of the committee of members which investigated this legislation, I may say that every aspect was examined, particularly for the purpose of safeguarding the public interest. The committee realized that the right to appoint a trustee lies with the creditors, who are primarily the persons who have to be considered ; yet, in this case, important considerations justified deviation from that principle, which has been safeguarded in the draft amendments that have been circulated. Although the estates will be transferred by the order of the judge, and it is obligatory upon him to do so, objection to that action may be raised by the creditors. Sub-section 3 of section 128 of the principal act states that “if one-sixth in value of the creditors or the registrar lodges with the court an objection to any appointment made underthis section,” on certain grounds, the court may hear it. This principle has been adopted. The AttorneyGeneral has taken action to safeguard the position of the creditors. Objections may be raised by one-sixth in value of the creditors or by the Registrar. The Registrar will give due consideration to the public interest, and notice will be taken of any objection lodged by him.

As regards the consideration of the rest of the bill discharged from the business paper, the Government will naturally keep faith with the House and submit a bill later on. It is dangerous for the two Houses to agree to pass a bill on the assumption that later they will reconsider it, and repeal any objectionable provisions. In such a case, a bill will be passed by both Houses, and made law ; but later it will be impossible to alter it if either House objects. Next year the House will have an opportunity to review the bill previously introduced, together with any further amendments thought to be justified.

Mr NAIRN:
Perth

.- Clause 4 is intended to cover the case of Mr. Spooner; but it has general application to all trustees who may have 50 estates to administer, and may otherwise comply with the conditions set out in the clause. As the bill is drawn, it seems that the court has no discretion but to grant the transfer to the new trustee, provided that he complies with the conditions as to the number of the estates and as to the partners. This clause provides that the court “ shall “ make the transfer to the partners of the retiring trustees, but I suggest that the word “may” should be substituted. The office of trustee is important, from a personal point of view, and that is the reason why trustees are not permitted to assign their trusts. The right of scrutiny should at all times be reserved to the court.

Mr PRICE:
Boothby

– I was a member of the committee of members which investigated this legislation. Of course, the bill deals only partially with the matters considered by the com mittee. Later, it is hoped that a consolidating bill will be introduced. As a layman, I was particularly interested to hear the discussions that took place at meetings of the committee between the members who are lawyers, and I was led to ask myself what it all meant from a common sense point of view.

Sir Littleton Groom:

– I hope that some common sense was mixed with the law.

Mr PRICE:

– No doubt it was. I am interested in clause 2 of the bill which relates to the relief of debtors, particularly farmers in distress. In South Australia, we have a Debt Adjustment Act and a Farmers Relief Act. These are of great benefit to the man on the land who has suffered by the drop in the prices of primary products, particularly wheat. A large number of farmers have been forced to take the benefit of the State acts; otherwise, they would have been forced to sequestrate their estates. The State acts have afforded the farmers material relief by way of supplies, and also by a moratorium which prevents action by creditors generally. All matters of debt adjustment are apt to come within the sphere of bankruptcy, and bankruptcy is a matter on which the Commonwealth alone may legislate. The State legislation must be. subordinated to the Commonwealth’s over-riding power, and there is a grave danger of action under the State acts being negatived by action under the Commonwealth act. It is most desirable that this danger should be removed, and clause 2 is designed to obviate any such conflict. I think that Judge Paine, of South Australia, was one of the first to draw attention to the danger. Judge Paine holds a dual position in these matters. He is Director of Debt Adjustment under the State act, and also acts as Federal J udge in Bankruptcy. He is doing very valuable work in that dual capacity, and is in a position to know whether it would be in the best interests of the debtor and the creditors that action should be continued under the State act, and action under the Bankruptcy Act stayed. A provision such as is contained in clause 2 is urgently required. The other matters contained in the bill are of comparatively minor importance. I commend the bill to the

House, because it will go a long way towards meeting the many difficulties that have arisen under the bankruptcy law.

Mr HAWKER:
Wakefield

.- I welcome the introduction of this bill. There has been a serious danger of the arrangements made by the various States to enable farmers to carry on in the interests, not only of themselves, but also of their creditors, being upset on the initiative of a small or unimportant creditor because of a conflict between the Commonwealth law and the special provisions which it has been necessary to set up by the States to deal with emergencies that arise in respect of the position of farmers. Later it may be necessary to set up similar provisions to deal with other aspects of the matter. The first amendment which is proposed by the Attorney-General (Mr. Latham) is, I understand, designed to facilitate the making of arrangements under the State legislation, which are in accord with the Commonwealth law and do not come into conflict with it. The haste which it has been necessary to exercise in introducing this legislation has made it extremely difficult to check up exactly to what extent its provisions will meet the various difficulties that have arisen in respect of the different forms of State legislation, but I am quite satisfied that in the. proposed amendments the Attorney-General has -set out to remove those difficulties as far as possible, although,- after the States have seen this amendment they may ask for further amendments of a minor character. There are other amendments less urgent which are desired by the administrators of the different State systems, and I take it that those will be dealt with later, when- the larger and more important bill is before the House.

There is special provision in clause 4, for the transfer of a trusteeship from one partner to another, owing to the partner who is the nominated trustee not being able to carry on with the trusteeship. That matter- has apparently been brought to the notice of the bankruptcy authorities because of the special circumstances which have arisen in the case of Mr. Spooner, who has become a Minister of the Crown in New- South Wales, that gentleman being the trustee of an enormous number of estates. The Govern ment is wise in making provision for any trustee who is the trustee of 50 estates or more, to transfer his trusteeship to his partner on account of pressing necessity. Similar circumstances must arise upon the death of the trustee, in which case, I understand it is necessary to hold meetings of creditors in respect of all the estates concerned, and enormous waste of time, duplication and expense take place, as in the case for which special provision is now being made in order to avoid that inconvenience. I suggest to the Attorney-General that this amendment should also deal with similar circumstances which may arise in consequence of the death of a trustee. I support the bill, and I commend the Attorney-General for the promptness with which he has introduced it.

Mr HOLMAN:
Martin

– I have much pleasure in supporting the bill. I also was a member of the committee of honorable members which considered this bill, and as a legal member, I entirely agree with the observations of the honorable member for Darling Downs (Sir Littleton Groom) and the honorable member for Perth (Mr. Nairn). I recognize that there is a good, deal of weight in the remarks of the honorable member for Wakefield (Mr. Hawker), but as his suggestions were not considered by the committee, and no report was made upon them, they should be dealt with later when the more important measure is before the House.

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

– One reason why this bill has the support of the House is because it Ls an example of an attempt at co-operative legislation upon a subject which is of concern to honorable members as a whole, and in respect of which this Parliament is charged with a special responsibility. As I have already said, the Government is indebted to the members of all parties who, on the committee to which reference has been i made, have co-operated and made it possible to produce a measure which meets with general approval. The honorable member for Oxley (Mr. Baker) has referred to the act which was passed under exceptional circumstances last year, and I assure him that as Attorney-General, I have been very anxious to bring about a more general review of the bankruptcy legislation of the Commonwealth in the light of our experience since the operation of that act. That review has been prevented from taking place on account of the tremendous pressure under which Ministers and their staffs have been working - not only while the Parliament has been sitting. All governments of the world are at present so engrossed with economic, financial and related social problems, that it is difficult indeed to obtain time to review even important legislation such as this. A review is already being made by the department of the whole of the bankruptcy legislation, and it is sincerely hoped that it will be possible to traverse the whole field in the light of the representations that have been made by members of the business community and others interested in this subject.

Only one point of criticism has been raised. The honorable member for Perth (Mr. Nairn) has suggested that the word “ shall “ in clause 4 should be altered to “may” in order that the Court should exercise a definite and separate discretion in each case. The word “ shall “ was, of course, inserted in the bill advisedly for the purpose of saving the time of the Court in examining in detail all the facts of every case, but provision is being made, as has been pointed out by the honorable member for Darling Downs (Sir Littleton Groom), to secure a discretion of the Court by the proviso that the Court shall not transfer the office of trustee in regard to the estate of any bankrupt, where onesixth in value of the creditors or the Registrar lodges with the Court an objection to the transfer, after due notice has been given. That provision for objection by the Registrar, in fact, enables the judge to exercise a discretion in relation to any estate where it appears to him to be necessary. In substance, the meaning of the clause is as suggested by the honorable member for Perth, but without imposing on the Court what in this instance would be a very onerous duty.

The honorable member for Wakefield (Mr. Hawker) has referred to the clause relating to farm debtors’ relief, which has been agreed to by all the State Governments. They have scrutinized and examined it, and have, from time to time, sent their representations to the Common wealth. I assure the honorable member that it has been presented, to this House with the assent of all the State Governments. There is provision at the end of the clause for proclaiming any State act or law as being an act or law in relation to which this section applies. Accordingly, if some particular act were overlooked, it would only be a matter for the State to bring the omission to the attention of the Government and it would be most unlikely that any practical difficulty would arise. In view of the general assent to the measure, I propose, at a later stage, to ask honorable members to take the bill and the amendments as a whole.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Clause 2 (Stay of proceedings in respect of State acts).

Amendment (by Mr. Latham) agreed to-

That after sub-clause 4, the following subclause be inserted: - “(5.) Where an order is made under this section any deed of arrangement made or given under or in pursuance of the. provisions of the State act or law of the Territory shall not be void by reason of any provisions contained in Part XII. of this act.”…

Clause, as amended, agreed to.

Clause 3 (Description of bankrupt’s property divisible amongst creditors).

Amendment (by Mr. Latham) agreed to-

That after paragraph (c) the following sub-clause be inserted: - (2.) Paragraph (o) of the last preceding sub-section shall be deemed to have commenced on the date of the commencement of the Bankruptcy Act 1932:

Provided that nothing in this section shall affect the rights or liabilities of any person under a judgment or order of the Court, given or made prior to the commencement of this sub-section, as to whether any goods are the property of the bankrupt within the meaning of paragraph (iii) of section ninety-one of the principal act.

Clause, as amended, agreed to.

Clause 4 -

After section one hundred and thirty of the principal act the following section is inserted : - 130a. - (1. ) Notwithstanding anything contained in this act, where a trustee, upon application to the court, satisfies the court -

that he is the trustee of atleast fifty estates which are being administered under sequestration orders, under compositions, schemes of arrangement or deeds of assignment under Part XI. of this act, or under deeds of arrangement under Part XII. of this act;

that, on the several dates upon which he became trustee of those estates, he was a partner in a firm or business in which there are, at the date of the application, partners each of whom is a person who is registered as qualified to act as a trustee under this part; and

that he is desirous of retiring from the trusteeship of all those estates, on account of pressing necessity, the court shall transfer to all or any one or more of those persons the office of trustee of all or any of those estates:

Provided that the court shall not transfer the office of trustee in regard to the estate of any bankrupt where one-sixth in value of the creditors lodges with the court an objection to the transfer.

Amendment (by Mr. Latham) agreed to -

That new sub-section ( 1 ) be omitted with a view to insert in lieu thereof, the following sub-section - “ (1.) Notwithstanding anything contained in this act, where a trustee or one of the trustees, ‘ upon application to the Court, satisfies the Court -

that he is the trustee of at least fifty estates which are being administered under sequestration orders, under compositions, schemes of arrangement or deeds of assignment under part XI. of this act, or under deeds of arrangement under part XII. of this act;

that, on the several dates upon which he became the trustee or one of the trustees of those estates, he was a partner in a firm or business with a person who was on those several dates and is at the date of the application registered as qualified to act as a trustee under this part;

that that person is at the date of the application in partnership with other persons, some of whom are registered as qualified to act as trustees under this Part; and

that he is desirous of retiring from the trusteeship of all those estates on account ofpressing necessity, the Court shall transfer to one or more of the persons specified in paragraph (b) or (c) of this sub-section as being registered as qualified to act as a trustee or as trustees under this Part the office of trustee of all or any of those estates. “ (1a.) The Court shall not, in pursuance of an application under this section, transfer the office of trustee in respect of the estate of any bankrupt -

unless fourteen days’ notice of the proposal to make the application has been published in the Gazette; and

if, prior to the transfer being made, one-sixth in value of the creditors of that bankrupt or the Registrar lodges with the Court an objection to the transfer.”.

Clause, as amended, agreed to -

Clause 5 negatived.

Bill reported with amendments; report - by leave - adopted.

Bill - by leave - read a third time.

page 5618

INCOME TAX ASSESSMENT BILL 1933

Second Reading

Debate resumed from the 5 th December (vide page 5498), on motion by Mr. Casey -

That the bill be now read a second time.

Mr SCULLIN:
Yarra

– I have little to say on the bill at this stage, because it is really a committee bill, and I suggest that if honorable members require a little mental exercise, they should carefully read its provisions. If any honorable member can explain briefly to the House what is meant, he will earn the gratitude of honorable members generally. I am not saying that in a hypercritical sense, because I cannot suggest any way other than that proposed by the draftsman to achieve the object desired. With the exception of a few clauses the amendments proposed are mainly of a machinery character. Clause 2 is very important, and has to be read about sixteen times before one can obtain even a glimmer of what is intended. It is rather fortunate from the view-point of revenue that some clever legal authority has pointed out a fault in the law as it stands which this provision is to overcome; otherwise there might have been a test case in the courts, and the Commonwealth might have lost a considerable amount of revenue. The difficulty really is that of endeavouring to apply “ the rate “ of income tax to big incomes. The practice which has been in operation since 1922, and is now held to be not strictly legal, is to assess the rate applicable to an income derived from personal exertion or from property, or from both, which is in excess of the amount beyond which the flat rate applies, by applying a combination of the graduated rate and the flat rate, thus actually applying two rates instead of one.

Mr Casey:

– The Government has not lost any revenue to date, but the Commissioner’s decision has been questioned.

Mr SCULLIN:

– I believe that that is so. Now that the error has been discovered, appeals may be made if the law is not amended, and made retrospective to 1922. In effect, this clause is merely to retain the status quo, and to continue what has already been done, but in a different way.

Clause 4, which is also important, may involve the loss of some revenue, but, in view of a recent judgment in England, I confess that I cannot see any other way of meeting the situation than that proposed. Owing to that judgment, it is not possible to collect from absentees income tax on interest payable on debentures or money lodged with a company operating in Australia. The money is earned in Australia, but the recipients are living outside the Australian jurisdiction, and according to a recent judgment a company cannot withhold the amount of the tax from the interest it has contracted to pay upon its debentures. Consequently, the company itself has to pay the Australian tax. It is, in fact, a tax on an item of expenditure, and our law was never intended to tax expenditure. It would be manifestly unjust to do so, and the Government could not permit a law to remain operative under which a company’s expenditure, instead of its income, is taxed. There may be some other way of overcoming the difficulty by Commonwealth or State legislation governing the investment of moneys by absentees, and by Australia having some increased jurisdiction, but at the moment, I cannot suggest what should be done. It is only fair that income received from any source, including interest on debentures or otherwise earned in Australia, should pay income tax. For instance, income tax is collected on dividends earned in Australia by absentees. An effort was made by a previous government to exempt them, but the opposition to the proposal was so pronounced that Mr. Bruce, who was Prime Minister at thetime, did not proceed with it. I would oppose the present proposal if I could see any other way out of the difficulty.

Mr Fenton:

– Could not the difficulty be overcome by some reciprocal arrangement?

Mr SCULLIN:

– We could not avoid the judgment given in Great Britain as to the power of a company to retain interest from its debenture holders. In the meantime, a company should not be taxed on the amount of interest it has paid to a debenture holder.

Clause7 will enable the production of notice of assessment to be regarded as evidence that the assessment has been made, instead of its being necessary to call upon the Commissioner to give evidence to that effect; It would be very inconvenient if the Commissioner had tobe called to any part of Australia to give evidence that an assessment had been made.

Question resolved in the affirmative.

Bill read a second time, and reported’ from committee without amendment or debate; report adopted.

Thirdreading.

Motion (by Mr. Casey) - by leave - proposed -

That the bill be now read a third time.

Mr Prowse:

– I should like the Assistant Treasurer (Mr. Casey) to explain clause 2, which seems rather complex.

Mr CASEY:
Assistant Treasurer · Corio · UAP

.- Under clause 2, the Government seeks to carry out the intention of Parliament. Under the Income Tax Assessment Act, an assessment is made by averaging the income of the last five years, including the year just ended. The rate of tax applicable to this average is then applied to the income accruing to the taxpayer in the year just ended. The system has worked satisfactorily where the income for the year under assessment is less than the maximum, beyond which the flat rate becomes operative. That maximum in the case of income from personal exertion is £6,900;; and in the case of income from property is £3,700. If an individual has an income from property of say £4,000 a year, the actual amount that he is taxed on that income is not “the rate “, but it is, in fact, a composition of two rates. It is the maximum rate of 47.3d. in. the pound, . combined with the flat rate of 90d. in the pound. This proposed amendment seeks to overcome the difficulty by altering the verbiage in the Income Tax Assessment Act which refers to “ the rate.” These two words have enabled the Commissioner’s decisions to be questioned, and it has been contended that the Commissioner has no right to charge a taxpayer a composite rate, in other words, two rates on his income. If provision had been made in the Income Tax Assessment Act for a composite rate instead of using the words “ the rate “, this amending clause would not have been necessary. In order to avoid any possibility of misconception, it is now proposed to calculate the amount of tax due in respect of income up to the maximum, and then the amount of tax on all income above the maximum, which will, in effect, give “ the rate “. By adding together these two amounts and dividing the total into the amount of income, you get a “ rate “ of so many pence per £1 of income. This is the procedure for personal exertion incomes, property incomes and composite incomes, and it is this procedure, which avoids the pitfalls inherent in the act as it now stands, that the amending clause is designed to bring about. I can assure honorable members that there is nothing in the clause other than what is considered necessary to carry out what was the obvious intention of Parliament in the act.

Dr Earle Page:

– It is merely to carry out what is already the practice of the department?

Mr CASEY:

– Yes. The action of the department has been challenged. I can assure honorable members that there is no catch in it.

Question resolved in the affirmative.

Bill read a third time.

page 5620

WHEAT GROWERS RELIEF BILL 1933

Second Reading

Debate resumed from the 5th December (vide page 5552), on motion by Mr.

Lyons-

That the bill be now read a second time.

Mr BEASLEY:
West Sydney

. -The right honorable member for North Sydney (Mr. Hughes) was apparently chosen by the Government to answer the case of the Leader of the Opposition (Mr. Scullin), but his argument was the most feeble to which Ihave listened for a long time. He did less than justice to his subject, particularly as he himself has had a great deal of experience in regard to wheat marketing control both in Australia and overseas. At no time did he indicate any method by which the difficulties now confronting the industry might be overcome. He said that the speech of the Leader of the Opposition was vague and based on generalities, a statement with which I do not agree, but the right honorable member’s own speech was not only vague, but was also a mass of contradictions. He said that this measure was a temporary expedient; yet, in the same sentence, he said he was convinced that prices would never rise, and that existing difficulties would never be overcome. It must be clear to every one, therefore, that this relief bill cannot be regarded as a temporary expedient. It appears that to those engaged in the wheat industry, as well as to those in other primary industries which depend upon overseas markets, where world parity prices for their products prevail, some form of permanent relief will have to be afforded while the present financial methods continue. The right honorable member said that no solution of the problem had been offered by the Opposition, and we Were expected to infer, I suppose, that the Government’s proposals represent the last word on the matter. I first of all declare that the Government must be challenged on the general principle of the methods to be employed in its scheme to raise the necessary funds to assist the wheat-farmers, and also that it is unlikely that the people of Australia, if given an opportunity, will endorse the methods of finance which the Government has embodied in this bill. The Government has absolutely no right to tax the poorer sections of the community in order to raise the money to help the wheat-farmers. This is class taxation of the worst kind, because it must be borne by those on the bread line who, unfortunately, are a very large section of our people.

The right honorable member for North Sydney did not say whether he was in favour of a compulsory pool or not. He skated lightly the subject, but declined to commit himself. I was reminded of a cartoon which appeared in the Sydney Bulletin about three weeks ago, in which the Prime Minister (Mr. Lyons) was pictured chasing himself around a wheat-farmer. The letterpress underneath the drawing stated that he was trying to catch up to an idea. The right honorable member for North Sydney seemed to be engaged in a similar occupation this morning, but he ended his speech without saying whether, in his opinion, a pool was necessary in order to stabilize prices, or whether he definitely supported the imposition of the flour tax. In answer to an interjection from one of my colleagues, who said that the sales tax on flour would bear unjustly on the poorer sections of the community, the right honorable member said that, on previous occasions, he himself had made the same remark.

Mr Hughes:

– The honorable member is applying my remark wrongly.

Mr BEASLEY:

– One can only assume from the right honorable member’s reply to the interjection that he trims his sails to whatever wind happens to be blowing or adapts himself to the company in which he happens to be at the time. His attitude is determined by expediency, and not by the merits of the case. The Government will need to put up a better case before it can convince even its own supporters that there is any justification for the imposition of a tax on the people’s bread, especially as it has seen fit to remit taxation to wealthy interests. The Government cannot escape its responsibility by saying that it received a mandate at the last election to reduce taxation. I am certain that it received no mandate to tax the people’s bread.

Mr.Fenton. - The Government would never have been returned had it asked for such a mandate.

Mr BEASLEY:

– That is true.

Mr Hughes:

– Did Mr. Lang receive a mandate to put a tax on flour?

Mr BEASLEY:

Mr. Lang dealt with the problem in a way in which this Government had not sufficient courage to do. He took steps to acquire the flour so that he would be able to control its distribution to the millers and this prevented them from charging exorbitant prices. That is essentially what the Leader of the Opposition said should be done in this case, and he supported his. contention by quoting figures relating to prices during 1916, 1917 and 1918, when the compulsory wheat pool was in operation. Whether we like it or not, that seems to be the only practical wayof breaking down the millers’ combine, and saving the public from exploitation.

Whenever it is suggested that anything should be done to check the operations of trusts and combines, some one raises the constitutional difficulty, and says that the Commonwealth has not power under the Constitution to take the necessary action. I have noticed, however, that when it is proposed to make an attack on the living conditions of the poorer sections of the community, the constitutional difficulties are overcome with ease. When the depression descended upon Australia, and it was proposed to reduce social services and wages, it was not necessary to amend the Constitution. A conference of premiers was held and, in less than seven days legislation was passed through all the State Parliaments, and the Commonwealth Parliament, to give effect to the new conditions. The trouble is that the combines have powerful financial backing of their own, as well as that of the private banks, and are able to exert too much influence on the Government of this country. The public will not be satisfied with anexcuse by the Government that, because of constitutional difficulties, it cannot control prices. Apparently, because of the Constitution, the people must starve, or, at any rate, suffer severely. That sort of thing will bring the Constitution into contempt, and we cannot wonder at it.

The figures quoted by the Leader of the Opposition, showing what enormous profits are being made by the millers, constituted one of the’ severest indictments of the millers’ combine that I have ever heard. It is remarkable how this combine has been able to operate without any attempt having been made to control it. It is common knowledge that, in New South Wales, if a baker proposes to sell bread for less than the price fixed by the millers, he is refused supplies of flour. Some time ago, a friend of mine proposed to set up a bakery in an industrial suburb in order to supply the people with cheap bread. Simply because his prices were below those of his competitors, the millers refused to supply him with flour. This has been going on for some time and, strange though it may seem, no action can be taken by the Government to deal with the situation.

Mr Holman:

– The State Parliament should deal with that matter.

Mr BEASLEY:

– It should have been attended to long before this. The position has now been accentuated by the action of :this Government, which must take full responsibility for the resentment of the people. It should have dealt with this aspect of the problem before it introduced this measure.

Mr Scullin:

– As with the fruit industry, arrangements could have been made between the Commonwealth and State Governments to introduce the necessary legislation simultaneously.

Mr BEASLEY:

– Whenever, complaints are made about the exploitation of the consumers, those who disapprove of action being taken point to the constitutional difficulties; but, as the Leader of the Opposition (Mr. Scullin) has reminded the House, arrangements could have been made between the Commonwealth and State Governments to introduce legislation simultaneously to deal in a very forcible way - if they wanted to, of course - with these exploiters. As, all the evidence regarding this matter is at the disposal of the Government it must stand condemned for its inaction. The figures prove conclusively that the wheat-growers are not getting the return they are entitled to expect for their production, and further, they are unable to do anything to improve their economic position because of the failure of the Government to protect them and also the consumers from the operations of the exploiters I have mentioned.

I endeavoured this morning to obtain some information with regard to the prices charged for wheat and bread in the various States, since 1920 up to this year. Unfortunately, the Department of

Commerce was not able to supply the figures except in regard to Victoria. Therefore, any comparison which I may make is based on information supplied for that State only, although we may assume that similar conditions obtain in the other States. These figures show that since 1920 the price of wheat in Victoria has fallen by 55 per cent., while the price of bread has been reduced by only 31 per cent. In that period also there has been a fall of wages in the industry, though to what extent I am unable to say.

Mr Scullin:

– Wages in the industry are fi a week less than they were a few years ago.

Mr BEASLEY:

– I am obliged to the right honorable gentleman for the information. It makes more difficult of explanation the action of the. millers and bakers. In New South Wales, wheat was selling at about 7s. a bushel in 1926-27. To-day, it is down to 2s. 8d. a bushel, but the price of bread during that period has been reduced by only Id. per 2 lb. loaf.

Mr Maxwell:

– Do not the figures which the honorable member has quoted show that the imposition of a flour tax should not necessarily mean an increase of the price of bread?

Mr BEASLEY:

– The Government and its supporters cannot use that argument to justify the imposition of the sales tax on flour. We have to face the facts. I have told the House what is happening in regard to the millers in the two States mentioned. This Government has intruded into this commercial sphere for the specific purpose of imposing taxation which is> to be passed on upon people who are not in a position to carry it, and are therefore left entirely at the mercy of these exploiters.

The latest information with regard to Sydney prices received this morning shows that the price of bread has been increased by £d. a 2-lb. loaf as against an increase of Id. in Victoria, the explanation being that the State flour tax, which had been in operation for some years, has been suspended. It is, however, possible to make a comparison between the two States, and arrive at certain conclusions concerning the effect of the Government’s proposal, and the action of the bakers in New South Wales. With flour at £11 15s. a ton, including the tax, the average price of bread in Sydney will be 5.56d. In Melbourne, where the price of flour, plus the tax, will be the same, the price of bread is 4.67d. From this it would appear that New South Wales bakers are exploiting the consumers to a far greater extent than is the case in Victoria.

I do not wish to traverse the ground covered by the Leader of the Opposition (Mr. Scullin) yesterday, because I consider that the case as stated by him has not been answered by Ministers or their supporters. What they have said has really made the position of the Government worse.

Another aspect “ of the subject which we cannot ignore is the effect on the Australian wheat industry of the international wheat agreement made in London a few months ago. When the measure ratifying that agreement was before this Parliament recently, we were told that the arrangement come to by the various wheat-exporting countries would ensure for wheat’ producers a world price of 4s. a bushel. Subsequent events have proved the fallacy of that statement. Apparently all that the world statesmen, then gathered together, could suggest was a restriction of production and export’ from the principal wheat-producing countries. This, too, in spite of the fact that hundreds of thousands of people throughout the world experience the greatest difficulty in obtaining the necessaries of life. This world situation that has arisen during the last three years is something that must be met and dealt with sooner or later. The methods now being employed by the statesmen of the world are not sufficient. They are simply patching here and there, in the hope that the expedients employed will satisfy the people. Unless something more is done the time is fast approaching when the people will force governments to make radical changes in the existing social system. This is a possibility which I ask honorable members to keep in mind. They may attempt to satisfy their consciences by supporting these socalled remedial measures to meet an abnormal set of circumstances, and believe that they are dealing with the problem; but as the honorable member for Wakefield (Mr. Hawker) said last night, all this talk of prosperity in the world is merely “ guff.” In other words, we are only “ pulling our own legs “ if we declare that the government’s policy will right the present situation in this country by restoring the much talked of prosperity. Actually, the wheat industry in Australia is in a much worse position this year than it was last year. Evidence brought before us during the last few days shows that the difficulties of the wheat-growers are far from being solved. From year to year at election campaigns governments tei] the people that they will honour their obligations, confidence will be restored, and the difficulties that confront -the country will vanish. Notwithstanding all that has ‘been promised to them, the position of the wheat-growers in particular is steadily becoming worse. They are now realizing that all they had worked for is about to vanish in thin air. This is indeed a sorry ending to the alluring promises made by so-called statesmen representing the government party that they would come to the rescue of the primary producers. The international wheat agreement was hailed, as the remedy for all the troubles of the principal wheatproducing countries, although, as I have shown; the best scheme which the alleged statesmen of the world were able to evolve was one to restrict production and export, while at the same time, hundreds of thousands of people throughout the world are in need of the necessaries of life. The result of the wheat agreement is that, instead of the world parity price -being raised to 4s. a bushel, the bottom has actually fallen out of the market.

Mr Nock:

– The efficacy of the agreement has not really been tested, because this year’s world’s crop has not yet been marketed.

Mr BEASLEY:

– The agreement was to establish world parity at 4s. for last year’s carry-over as well as this year’s crop, and even that has not been accomplished. Members of the Labour party condemned the international wheat agreement, and, of course, were subjected to ridicule by their opponents. It is remarkable how versatile in argument the supporters of the international wheat agreement are when the circumstances are against them. When the agreement was introduced in this House, the Government claimed that it would stabilize the price at 4s. a bushel; now that it has failed, we are told that the present’ price would have been lower if the agreement had not been made, Members of my party hold the view that the time has arrived when the Government should declare that it has some faith in its own agreement. Had it wished to give practical application to its agreement, the Government had every opportunity to establish proper marketing facilities, between the time the negotiations began and last October.’ However, it was only after representatives of the growers came to Canberra and threatened to take drastic action concerning the harvesting of their crop that the Government made any pronouncement on the subject; then it resorted to the subterfuge of declaring that there was no time left to evolve adequate marketing facilities. The opinion was also expressed that it was necessary to bring into operation a “long range” policy on the subject. I remind members of the Government of the lengthy discussion that took place when the subject was exhaustively debated during the regime of the Scullin Government, and incidentally, the way in which honorable members, who now sit on the Government side, opposed the use of the resources of the Commonwealth Bank to assist wheat-growers. As these members are now Ministers in this Government, they at least should have been capable of evolving this long range policy of marketing long before this.

Obviously, when the Government approved the restriction of the export of wheat it accepted the responsibility of providing a proper system of marketing to obviate the possibility of a slump, with resultant chaos to the industry. However, the Government failed to meet its obligations in this as in many other re- spects, hoping, apparently, that the problem would solve itself.

My colleagues and I are of the opinion that if the credit of the country can be used for the purpose of financing a war, it can also be used to avert what can be regarded as a national calamity in regard to this wheat problem. During the last three years more than £83,000,000 worth of treasury-bills have been issued to meet interest charges, high exchange rates and so on. When the Lang Government, feeling that the time had arrived when a halt should be called in the payment of excessive overseas interest commitments, suspended a payment that was then due pending the making of more satisfactory arrangements, the Commonwealth Bank within 24 hours made available millions of pounds to meet the payment. Just before then, the Government had been requested to provide money for the alleviation of unemployment, but it advanced the excuse that no money was available. It is interesting to recall that, in an endeavour to stimulate primary and secondary industries in the United Kingdom, the British Government has issued treasury-bills bearing interest at the rate of from i per cent, to per cent. While I do not contend that similar action in Australia would solve all our troubles, I believe that the Commonwealth Bank should be called upon to do the same in Australia, instead of the interest payments on these bills being allowed to continue at over 3 per cent. This subject of cheaper money was also discussed at the World Economic Conference, which favoured the issue of treasury-bills by governments at very low rates of interest in order to stimulate both primary and secondary industries. The Leader of the Opposition (Mr. Scullin) also referred to the matter when seeking an alternative to the flour tax as a means of raising the money necessary to assist wheat-growers. It is now generally acknowledged that there must be a departure from ordinary methods of finance, in order to meet ;he extraordinary circumstances which prevail. My colleagues and I claim that instead of imposing a sales tax on flour for the purpose of assisting wheat-growers, the social credit of the community, through the agency of the Commonwealth Bank, should be utilized for this purpose. As the Commonwealth Bank to-day is under the domination of the private banks, and the issue of these treasury-bills is a very profitable source of income for these people, it is no wonder that the rate of interest is kept so high. This Government approves of these powers being exercised by the private banks, and, therefore, nothing can be done in this direction until Labour secures control of the treasury bench. Taking everything into consideration there is no justification whatever for the imposition of a flour tax, which will so adversely affect the poorer sections of the. community and particularly married men. “While bread is not used to any appreciable extent among the more affluent classes of the community, it is a staple diet of workingclass families, upon whom this tax will be particularly heavy, especially where there are a number of children. It will also affect the unemployed harshly because in New South Wales, under the food relief scheme, the quantity of bread they will receive will be less than formerly. Only recently the Government remitted the federal land tax to the amount of £1,100,000. Had that been done to restore partially something imposed by the Financial Emergency Act, it might have had some little justification, but; actually, it was a gratuitous action that was entirely unwarranted, and had no association with the emergency legislation at all. The Government has also provided an additional £1,500,000 over last year’s Estimates for defence purposes. My colleagues and I hold the view that nothing has arisen to make that increase necessary, and that the previous amount was adequate for Australian requirements at the present time. It is strange that the Government should squander money unnecessarily on defence, and relieve the richer classes of the community, and simultaneously propose to take £1,600,000 from the bread-eaters of the community, the majority of whom are already in desperate straits.

I agree that the wheat industry is in need of assistance, and members of my party will do their utmost to provide that assistance, just as they have sought to help other primary and secondary industries, the workers and the unemployed. But we say frankly and sincerely that the Government had ample avenues to exploit in order to raise the money necessary to assist wheatgrowers without placing a further burden upon the poorest sections of the community. A sales tax on flour is the worst conceivable toll that could have been devised at such a time as this, and I am confident that, in his heart, every honorable member must feel that it is totally unjustified. It will cause consternation among the great mass of the people, and properly, bring contempt upon the. present Government. This is an abnormal period in which the poorer section of the community have already carried far more than their share of the burdens. This last imposition is the very limit, and I am certain when the opportunity arises, this Government will be swept from office for its action in this matter alone.

Mr Hughes:

– I wish to make a personal explanation. The honorable member for West Sydney (Mr. Beasley), inadvertently I am .sure, did me an injustice by declaring that” a reply which I made to an interjection by the honorable member for Hunter (Mr. James) had special reference to the flour tax, and implied that on many occasions I had expressed the opinion that the principle of the sales tax on flour is wrong. The honorable member must see that in the very nature of things I could not have made that statement, because I have not spoken on this measure, nor has there been before us in the history of this Parliament, a similar measure on which I could have spoken. What I did say, by way of interjection to my honorable friend, was that I had many times stated that it was a habit of governments to tax the rich rather than the poor. I have said that many times before, and I say it now.

Debate (on motion by Sir HENRY Gullett) adjourned.

page 5625

INVALID AND OLD-AGE PENSIONS BILL 1933

Second Reading,

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

– I move -

That the hill bc now read a second time.

In discussing this measure relating to the subject of invalid and old-age pensions, I wish first to say that I have been very greatly impressed - as I am sure other honorable members have been - by the manner in which so many invalid and old-age pensioners have accepted theamendments of the law which were made under the stress of financial circumstances by the last Government and the present Government. Many of these pensioners have shown that they have a genuine interest in their country, and that they do not take a completely selfish view. Their attitude does them very great credit indeed. On the contrary, some pensioners have, unfortunately, shown that they have no interest in the country other than in the amount of their pension. It is gratifying, however, to note that most, if not all pensioners, recognize that the payment of their pensions depends on the general financial position of the country. When the Financial Relief Act was recently under the consideration of Parliament, the Government was urged to give consideration to the amendment of the property provisions of the pensions law in order to grant further exemptions from the Commonwealth charge, or otherwise to liberalize the law in the interests of the pensioners and their relatives. Honorable members will recollect that the amount of the pension was increased in the budget, but special attention was directed to these property provisions. It was a matter of urgency that the Financial Relief Act should be passed as early as possible, so that the concessions which were granted to taxpayers, public servants and pensioners, should operate immediately. The consideration at that time of the suggestions made to the Government would, of necessity, have delayed the passing of the Financial Relief Act; and the Government, therefore, undertook to consider these suggestions later, and to bring down a hill before the Christmas adjournment to give honorable members the opportunity to discuss this question.

During the second-reading debate on the Financial Relief Act it was stated that the Government had given careful consideration to the effect of the property provisions of the pensions act, .with the object of ascertaining whether they were operating harshly and called for amendment. The conclusion arrived at was that the law was based on sound principles and that adequate provisions existed for granting relief in cases of hardship. But in accordance with its promise, the Government has again reviewed the “whole question; and, whilst not prepared to depart from the conclusion previously arrived at, is prepared to liberalize the provisions of the law as far as possible. When the pensions act was recently amended, it was stated that, since the Government’s policy, as expressed in the property provisions of the act, was made known, more than 12,000 pensions had been, voluntarily surrendered, and claims for pensions had been reduced by 13,000. If the whole of the property provisions were repealed, it is estimated that the annual expenditure would increase by at least £650,000 and, in addition - which is more important - the rate of future claims for pensions would be substantially increased. The Government could not possibly face this position, and, therefore, cannot accede to the request made in some quarters that these provisions in the law should be completely repealed.

In considering this matter, it is material to remember that the old-age pension system of Australia is, when all elements are considered, the most generous in the world. The relevant factors which must be taken into consideration when comparing such schemes include the following: - (1) Age at which a pension Incomes payable, (2)” period of residence required., (3) maximum pension payable per annum, and (4) limit of total income permitted. An examination, of these elements in relation to the pension schemes in operation in Australia, Great Britain, Canada, New Zealand, and South Africa, shows that taking the present rate of pension, Australia is more generous than any of the other countries mentioned.

It is impossible to ignore financial considerations when dealing with this subject. Ten years ago the total amount of invalid and old-age pensions paid by the Commonwealth was less than one-third of the amount collected by way of Commonwealth direct taxation. In 1932-33 the amount paid in such pensions had risen to more than three-quarters of the sum collected in direct taxation. Even before the depression, in 192S-29, this amount was equal to two-thirds of the direct taxation. If a comparison is made with federal indirect taxation, the figures show that ten years ago the sum paid in invalid and old-age pensions was 16i per cent, of the amount of indirect taxation collected ; in 1930-31 the proportion was 37 per cent.; and to-day, although the number of pensions has been reduced bysurrenders, and in relation to what would otherwise have .been the normal increase, by no les3 than 25,000,. the proportion of pensions expenditure to indirect taxation is still 25-J per cent. If we take the proportion of invalid and oldage pensions expenditure to the total taxation, ten years ago it was.10.S7 per cent., and in 1932-33 it was 19.2 per cent. In 3912-13 the expenditure on invalid and old-age pensions was £2,301,675 ; in 1922-23 it was £5,424,016; and in 1932-33 it was £10,771,061. In 1932-33 the expenditure on old-age and invalid pensions amounted to 78.14 per cent, of the amount collected by direct taxation. Since 1930- 31 the expenditure has decreased from £11,710.953 to £10,771,061. If, from the present time, iiic amount expended on pensions increased at the average rate of increase of tho years 1925 to 1931, in the year 1941-42 the expenditure would be £17,000,000 per annum. It is accordingly plain that financial considerations must bo taken into, very careful amount when dealing with this subject.

In 1932 provisions were included in the act for the purpose of enabling the Commonwealth to recover from the property of the pensioner after his death, subject to certain exemptions, the amount that had been paid in pension. Strong representations have been made from various quarters with respect to this provision of the law, and the Government has ‘reconsidered the whole subject. The Government believes that the proposals now made will prove to be within the financial capacity of the country, but it is impossible to predict with any degree of certainty what the increased cost will be. If, to take an extreme case, the whole of the 25,000 persons who since 1931 have either surrendered their pensions or have failed to apply for pensions, were successfully to apply for full pensions, following this liberalisation, the increased cost would amount to £1,137,500. All pensions, of course, are not paid at full rates, and there is no doubt that the provisions requiring contributions by relatives have had the effect of diminishing the total expenditure. It is therefore, impossible to compute exactly what extra charge these proposals will place upon the revenue. It can be definitely stated, however, that if the average rate of increase between the years 1925 and 1931 were maintained, with the maximum pension at 17s. 6d. per week, the expenditure on invalid and oldage pensions in 1941-42, would be £17,000,000.

Various proposals have been considered by the Government. It has been suggested that the home of a pensioner should be entirely exempted from the Commonwealth charge or that an amount up to £500 or £600 should be so exempted, which would mean the exemption of nearly all homes. , The reason why the Government has not adopted any such proposal is that all the inconveniences of the system of placing an encumbrance on the property of the pensioner would still exist. Questions of whether or not a particular property was subject to the chai-ge, would depend upon a valuation made by somebody at one time or another, and grave difficulties would arise if a house valued at £300 were exempt, whilst a house valued at £301 had to pay a charge of £1 or more.

Mr Forde:

– You do not find difficulty in valuing properties to-day.

Mr LATHAM:

– If a limit of value were determined, the charge provisions would still have to remain.

Mr Rosevear:

– The same difficulties of valuation are contained in the amendments proposed.

Mr LATHAM:

– They are not. I am pointing out why the Government has rejected the proposal to fix a limit of value on property beneath which the charge shall not apply. That proposal would mean the retention of all the provisions for obtaining the consent of the Commissioner, before any transfer could be made, and would require all the inconveniences of the charge system to remain.

Apart from the sentiment attached to a home, there is no difference between this form of property and other property owned by pensioners, such as houses other than homes, bank deposits, insurance money, bonds and industrial shares. As these assets are all created by the thrift of the pensioner, there is no reason, other than that of sentiment, why the home should be treated iu a different manner from other property owned by pensioners. This sentiment, however, is a very real element in life. The sentiment attaching to a home is strongest in the minds of the pensioners themselves, particularly in its relation to children who survive their parents and who have been living with them as one family. Accordingly, the Government is introducing these proposals, which recognize to every possible extent the sentiment attaching to the home, not only so far as children are concerned, but also in reference to other near relatives.

Objection has been taken to the “ white card “ undertaking required of pensioners, namely, that they will not transfer or mortgage their property without the consent of the Commissioner. This objection has also been raised in relation to the obligation imposed upon persons proposing to deal in real property, to discover whether or not the other party to the transaction is a pensioner. That is one of the matters which have been dealt with in these amendments.

Representations have been made for the exemption from the Commonwealth charge of funeral or mortuary benefits of friendly societies. That matter also has been dealt with.

Difficulties have arisen in relation to municipal rates and other charges, which at present have not priority over any Commonwealth claim. Under these proposals, they will have that priority.

Generally, these proposals are based upon the very radical modification that the Commonwealth charge will not operate to the detriment of bona fide creditors of a pensioner’s estate, and upon the principle that the claim of the Commonwealth will not interfere with the ownership, possession and enjoyment, of any property which the pensioner leaves by will to certain relatives.

Careful consideration has been given by the Government to all the suggestions that have been made. The question has been considered whether a mere increase of the present fixed exemption of £50 on account of personal effects, and of a similar amount with respect to other property as -prescribed, would meet the case, or whether there should be a further postponement of the Commonwealth charge until the death of named beneficiaries. As the result of that considera- tion, the Government has determined that something further ought to be done.

It is important to understand exactly what the present law is in relation to the Commonwealth charge. A certain amount of money, which has been paid by way of pension, in some cases since the 12th October, 1932, and in other cases since the 31st December, 1932, is not only a debt due to the Commonwealth, but also a charge upon the pensioner’s estate, and has priority over all debts and claims with the exception of certain specified encumbrances ; but it is competent for the Commissioner to grant exemptions, and exemptions are provided for in the a01 in the case of a wife who is a pensioner, other persons who are nearing the pension age, children, and the like. Under the amendments now proposed, no distinction is drawn between the dates the 12th October, 1932, and the 31st December, 1932, and there is to be no claim in relation to the two months November and December.

Mr Lane:

– How will that affect those who have been paid?

Mr LATHAM:

– It is not proposed to disturb what has been done. Although there is provision which’ prevents any future application of the provisions that have been enforced in the intervening period, administratively it would be quite impossible to go back over that ground. The bill provides that its provisions will henceforth be substituted for the existing provisions, under which no further action will be taken. Under the amendments now proposed, the amount of pension paid after the 31st December, 1932, will e a debt due to the Commonwealth, subject to certain conditions and exemptions, but will not ‘be a charge on the pensioner’s estate. That is an essential and radical distinction. Funeral and testamentary expenses, and all .debts of a pensioner, whether secured or unsecured, will first be paid. If a pensioner receives funeral or mortuary benefits from a friendly society, any sam in excess of the amount actually required to pay the funeral expenses will be excluded from the assets of the pensioner that will be available for the satisfaction of the Commonwealth’s claim ; that is to say, the funeral or mortuary benefit will be absolutely unaffected by the pensions legislation. The granting of priority to all debts of the pensioner will preserve the interests of municipal councils and other authorities in respect of charges for rates and the like. Any State law which gives priority to those debts will operate without interference by the federal law. Pensioners will not, in future, be asked to furnish the “ white card “ undertaking in respect of dealings in property, and all undertakings already given will be destroyed and will be declared by the bill to be void and no longer enforceable. Persons who propose to deal in real property will not be under the necessity to make inquiries as to whether the owner of the property is or is not a pensioner, and all the provisions for searching will disappear. Pensioners will be at liberty to mortgage or sell their real property without applying for or obtaining the consent of the Commissioner; but they will be required to advise the department of any such dealings, and should a pensioner fail to do so within 30 days, his pension may be cancelled. If any person accepts a transfer or mortgage of a pensioner’s real property otherwise than bona fide for value, that person will be personally liable to pay the debt due to the Commonwealth on the death of the pensioner, to the extent of the value received by him, less any payment actually made by him to the pensioner. Accordingly, it will not pay any person to cheat a pensioner.

Mr Rosevear:

– Who will decide the value ?

Mr LATHAM:

– The court.

Mr Scullin:

– Many years after the transaction has taken place, and subsequent to the death of the pensioner !

Mr LATHAM:

– Possibly. There are Statutes of Limitations which practically meet that objection. The home of a pensioner is not included in his accumulated property for the purpose of assessing the rate of pension; but if a pensioner converts his home into cash, either wholly by sale or in part by mortgage, the proceeds, under the law as it has always existed, become part of his accumulated property, and the pension is re-assessed accordingly. It is not proposed to alter those provisions. Pensioners may mortgage their homes up to the limit of the security afforded by the property that they own, or they may sell their home; but, in such cases, under the existing law, it is necessary to reduce the rate of pension. .As honorable members are aware, if the amount received is over £400, or. in the case of husband and. wife, £800, the pension is cancelled. The proceeds of any mortgage or sale may in future, as in the past, be used by the ‘pensioner as he pleases, subject to the reduction o’f his pension under the law as it now stands.

Mr Gabb:

– Will that be held against him for all time?

Mr LATHAM:

– No. When the proceeds are exhausted, or even partially exhausted, the pension may be increased ; or, if it has been cancelled, a new pension may be granted.

It is proposed to provide that, if the property of a pensioner passes by his will to a specified class of relative, it will not be available for the payment of the Commonwealth debt. The class of relatives specified is: Widow, widower, father, mother, child - including ex-nuptial child - sister or brother of the pensioner. Those relatives must satisfy certain conditions in order to bring themselves within these provisions. In such a case, so far as the Commonwealth is concerned, the property is free from any claim, charge, encumbrance, or liability of any description.

Mr Beasley:

– Indefinitely?

Mr LATHAM:

– Indefinitely; the claim disappears. The first of those conditions is that the property has passed by will to the specified relative. If the property is left to a stranger, however, different considerations arise, which I shall explain later. What are the conditions under which relatives to whom the property, whatever it may be, is left by will, can receive it free from any claim ? They are as follows : The specified relative must be a pensioner or he or she must, in the opinion of the Commissioner, be in necessitous circumstances or he or she must be a member of the family residing in the home of the pensioner. In other words, there is no claim in regard to the property which is given by will to members of the family who are residing in the home; to the specified relatives who are pensioners, even though they are not residing in the home; or to the specified relatives who, in the opinion of the Commissioner, are in necessitous circumstances, even though they are not residing in the home. If the pensioner is not sufficiently interested to leave the property by will to any of these people, it is not for the Commonwealth to attempt, by legislation, to secure it for them. Indeed, the Commonwealth would not be able to attain by legislation such an object when the pensioner himself showed no interest in achieving it. I am dealing now with property left by will. As a general rule, the property of a pensioner will probably be’ left by will to some one in this class; but, if not, there is a provision which deals with cases of undue hardship.

I shall mention another case by way of illustration. A pensioner has a son who is not a pensioner, is not living in the home, and is not in necessitous circumstances - a rich son who has bought the home for his pensioner father. The bill contains a clause which enables the Commissioner to take into account all such cases. We must remember that the son can get the property only by the will of his father, or because of his father’s intestacy. If he is able to prove that he made contributions to the home, the effect may be to abolish the Commonwealth claim altogether, or to reduce the amount of the claim.

Another case is that of a rich son living outside the home who has contributed under the act to the support of his pensioner father. The bill provides that if the property goes to him, the Commonwealth claim will be reduced by twice the amount of the son’s contributions to the support of his father. I have mentioned a son, but the same principle will apply to other relatives, being a husband, wife, father, mother or children of the pensioner. The object of the provision is to encourage children and other relatives to support members of their family who are in poor circumstances. It should be understood that this provision is important only in relation - to people who are outside the class of specified relatives. Specified relatives, if living in the home, if pensioners or if in necessitous circumstances, will receive in full any property left to them

Ifr. Latham. by pensioners, and there will be no Commonwealth claim against it at all. I am now dealing with non-necessitous members of the family, to whom a pensioner’s property has been left. If such a person has contributed to the cost of the pension under the act twice the amount of his contribution is deducted from the Commonwealth’s claim before it can be enforced against any property to which he succeeds by will.

The exemption of personal effects to the value of £50 will continue. It is not necessary to continue the further exemption of £50 at the discretion of the Commissioner. The object of that exemption was to provide sufficient money for funeral and testamentary expenses, and to assist in paying the debts of the pen.sioner. All these claims will have priority over the Commonwealth debt, and provision is made in the bill for the specified relatives to have the property free from any Commonwealth claim at all. The present law provides that any person with an interest in the property of a pensioner, or in the estate of a deceased pensioner, may apply to the Commissioner to exempt the property, either wholly or in part, from the Commonwealth charge, or to postpone the charge. The Commissioner is empowered to grant such an exemption, or to postpone the charge, if he is satisfied that the Commonwealth charge would cause hardship. That principle is retained in the amendments now proposed. In cases of undue hardship, the Commissioner may exempt the property from the payment of the Commonwealth debt, or may reduce the debt to such an extent as is necessary to prevent undue hardship to any person who has an interest in the estate of a deceased pensioner.

Mr Scullin:

– What is meant by undue hardship?

Mr LATHAM:

– To most human beings, the loss of any money at all is a hardship. In determining what constitutes undue hardship, the circumstances of the beneficiary will be taken into account.

Sir Littleton Groom:

– Would contributions towards the purchase of a home be taken into account?

Mr LATHAM:

– It would be an undue hardship to a man who has provided a home for a person, and to whom a pensioner’s property has come by will or intestacy, to be deprived of it completely by the Commonwealth claim. The power already vested in the Commissioner under the present law has been exercised liberally. The relief which has been granted under the present law has been considerable, although that fact has not always been sufficiently recognized.

Let me take another case - that of a relative or other person who has purchased a home for a pensioner, or has contributed substantial sums towards its purchase, and expects that the property will pass to him on the death of the pensioner. Under these provisions, .the property; if in fact it passes to him, may be either wholly or partly exempted from the liability to pay the Commonwealth debt. <

If, to take another example, the home of a pensioner lias been left by will to his niece or grandchild - a person who is not within the class of specified relatives - and that niece or grandchild has devoted herself to the nursing of the invalid pensioner, there would be undue hardship in applying the other provisions of the act to such a person, and, therefore, power is given to exempt the property from the liability to pay the Commonwealth claim. The Commissioner would have to exercise his discretion according to the degree of hardship involved.

Mr Scullin:

– Those exemptions are not provided for in the bill.

Mr LATHAM:

– Not in so many words ; but the bill provides that the Commissioner may do these things.

Mr Scullin:

– He may not do them.

Mr LATHAM:

– In the past, the Commissioner has exercised his discretionary powers benevolently. It is proposed to repeal the provision empowering the Commissioner to apply to the court for an order to sell the property of a deceased pensioner in order to meet the Commonwealth debt. It is also proposed to repeal the section-which enables the Commissioner to call upon any person who has the disposal of any money forming part of the estate of a deceased pensioner, to apply that money to the satisfaction of the Commonwealth debt. These powers have already been used under the present act in respect of the proceeds of life insurance policies, savings bank deposits, friendly society benefits, and so on. The repeal of the provision conferring this power will be a further measure of liberalization.

This legislation fully recognizes the sentiment attaching to a home, and makes provision to give practical effect to it. At the same time, it maintains the principle that if a pensioner receives money by way of pension payments from the Commonwealth during his life, it is not fair to the community that he should be at liberty to leave that property to a stranger who has no claim on him, thereby forcing the community to bear the whole burden of the pension payments. The provision to meet such cases appears to the Government to be fair and liberal. As I have already said, it is impossible to form a reliable estimate of the extent to which the diminution of the expense of pensions has been brought about by the existence of the property provisions of the act, and to what extent that diminution has been due to the provisions for contributions by relatives of pensioners towards their upkeep. Both have been real factors in diminishing the amount paid by way of pensions. It is undoubtedly true that many relatives of pensioners are now supporting their parents voluntarily, either outside the act or in pursuance of its provisions. These proposals deal entirely with the property provisions of the law, and represent a considerable liberalization thereof. They do not interfere in any way with the enjoyment by the pensioner, or the disposal by him, of his property during his life. They do provide, however, that after the pensioner’s death, the claims of the public shall be given preference over those of a complete stranger who has no claim on the pensioner at all.

Mr McGrath:

– In other words, this legislation is a complete back-down on the part of the Government.

Mr LATHAM:

– It is not; although I admit that it is a substantial modification of the existing legislation. I have not concealed my own view in this matter. Indeed, I expressly said that it was the opinion of the Government that the principles underlying the existing legislation are sound. The Government recognizes, however, that real difficulties have arisen, and will arise, in its administration. It also recognizes that sentimental and psychological considerations have to be taken into account. It’ is aware that many pensioners have been greatly worried by the legislation passed during recent years, and for that reason it has gone to the utmost limit of liberalization possible. The financial effect of this legislation cannot be predicted except within wide limits; it will almost certainly lead to a considerable increase of the amount paid for pensions. The Government hopes that the revenue will be sufficiently buoyant and’ expanding to meet the additional commitments which Parliament is now invited to accept.

Mr Makin:

– Can the right honorable gentleman say how much is likely to be involved?

Mr LATHAM:

– I have already explained how difficult it is to arrive at an estimate. But without in any way binding myself, I should say that at least £650,000 a year is involved in the property provisions. The Government is taking a certain amount of risk in introducing this legislation. I commend these proposals to the House, and hope that they will prove acceptable.

Debate (on motion by Mr. Makin) adjourned.

page 5632

WHEAT GROWERS RELIEF BILL 1933. ,

Debate resumed from page 5625.

Sir HENRY GULLETT:
Henty

– It is not my intention to vote against this measure, but I shall- vote for it very reluctantly and with strong reservations. I am completely with the Government in its desire to provide a bounty for wheatgrowers. I offer no exception, either, to the amount to be provided for this purpose this year, although taking into consideration the increase in the price of wool and sheep I think the wheat-growers are better off this year than in any year in which a bounty has been paid to them. My difference with the Government is due to the fact that more than half of this money is to be found from a tax on flour or, in other words, a tax on bread. I am entirely in favour of a bounty on wheat, because the wheat-growers, during the years of depression, have rendered to this country national service of the finest kind. But in my opinion that service should be paid fur from the same source as provides for the payment of any other national service, such as our Defence Force, our Public Service; and even invalid and old-age pensions. The money should be found in this case as in those from Consolidated Revenue, and it would be a simple matter for the Government to arrange for it to be found from that source. I object to the bread tax on the ground that it is a benighted, mean and cruel tax against the people of humble means in this country. I object to it also because it is to be imposed for only six months. If it is proper to collect such a levy for six months it should be proper to collect it for the whole year. Fundamentally the tax is completely bad in its immediate form and in its incidence. Properly speaking this bill is in the nature of a supplementary budget, and the amounts payable under it should come from the same source as the money necessary to meet the budget payments. The money is being provided, however, by the substitution of one tax for other taxes which were removed a few weeks ago. The removal of that taxation is also a real complaint that I have against the Government.

I shall divert for a moment to discuss the main principle upon which the taxation of this country rests. Our taxation has been raised, broadly speaking, prior to the introduction of the last budget and the introduction of this bill, in accordance with the golden principle of taxation, namely, capacity to pay with progression against the wealthy. That principle obviously applies to our main methods of direct taxation, such as income taxation ; but it also applies a great deal more than is generally recognized to sales taxation, and even taxation through the tariff. Take the case of sales taxation. When this method of taxation was first introduced by the present Leader of the Opposition (Mr. Scullin), he assured us that his Government had taken special pains to exempt from it the bare necessaries of life, and many further exemptions on the same line have since been made. The sales tax, therefore, is, in a large degree, a tax based upon real capacity to pay and is not, like this tax, progressive against poverty. That is also very largely true of the tariff. As a rule the imports into this country, apart from raw material, find their way into the homes of the relatively well-to-do people, and not into those of people in humbler circumstances. I therefore submit that to a large extent, our Consolidated Revenue is raised according to the golden principle of taxation - capacity to pay with progression against the wealthy.

Let us test the flour tax against that principle, and see where our investigation will lead us. This tax is not progressive, but retrogressive, in relation to capacity to pay. The people in the poorer households of this country consume more bread in relation to other articles of diet than do those in the richer households. In the richer households, bread fills a much less important place than it does in the poorer households. The people in an. average home in a suburb like Toorak, Melbourne, consume less bread than the people in an average home in a suburb like Richmond, Melbourne. The average household in Bellevue Hill, Sydney, enjoys a much richer dietary than does the average household in Balmain, Sydney, and consequently eats less bread. Let us now look at the case from the point of view of individuals. A single man with an income of £5,000 or £10,000 a year eats less bread than a working man, and will therefore contribute less to this bounty for national service than- will the working man. Take also the case of the single working man. i He will contribute less of this taxation than a working man bringing up a family of three, four, five, or six children. Let honorable members think for a moment of the lunch which hundreds of thousands of our working men carry to work with them each day. It consists of bread, meat, and perhaps some simple cake made chiefly of flour. Practically the whole of that lunch will be subject to taxation except the meat. I suggest to honorable members of the Country party that they should not support taxation of this description, because every pastoralist and pastoralist-farmer, and especially - every wheat-grower who runs a few sheep, is indebted to the working man in another respect than those ito which I have al ready referred. Who is it that eats the inferior meat that goes into the market in Australia? Who eats the brokenmouth ewes and wethers?

Mr Hill:

– The farmers !

Sir HENRY GULLETT:

– Not at all. The hundreds of thousands of people who live in our industrial suburbs never see the vealers and the spring lambs, but have to be content with the inferior grades of meat which find their way to city markets every week. It is on such people as these that the main burden of the flour tax will rest.

I have uo quarrel with my colleagues on this side of the House, or with my friends of the Country party. I desire lo support and vote for a wheat bounty, but for a bounty drawn from some other source than that now proposed. Hitherto I have spoken of the people who enjoy low incomes; but I now direct the attention of honorable members to the position of the great army of unemployed. The placing of a tax on their bread is surely unthinkable in view of the fact that recently, very large remissions of taxation have been made to big financial interests and fairly well-to-do individuals in Australia. Let honorable members think for a moment of the effect of this tax on the destitute institutions that are operating in our big cities. I read in the press a few days ago, as did honorable members, I suppose, the statement made by Canon Hammond at a great meeting held in the Sydney Town Hall to protest against this tax, to the effect that he presided over three destitute institutions and that this tax will cost them £300 a year. On that ground alone I would vote against this bill. The Melbourne Benevolent Institution in my own electorate supports ‘between 800 and 900 people a year, and this tax will fall very heavily upon it. If there were no other conceivable source of revenue from which this money could be obtained we should have no choice, but such is not the case. Bearing in mind the principle of capacity, to pay, there is definitely a choice of several sources open to the Government.

Let honorable members think back ten or eleven, weeks when the final touches were being put to the budget. At that time, the Government found itself with an accumulated and estimated surplus of a little more than £9,000,000? At that time it could easily have provided for a wheat bounty. At that time the newspapers throughout Australia were publishing far and wide, statements to the effect that a wheat bounty would probably be necessary. I do not think that there was one thoughtful mau in a million at that time who believed that wheat was likely to increase in price, and that, therefore, the wheatfarmers would not need assistance from’ this Parliament. The price of wheat at that time was desperately low. It is true that certain fluctuations of price were occurring, but wheat is the greatest gambling medium in the world, and those fluctuations were merely typical of the average gambling fluctuations. The reasons for this were plainly set out last night by the right honorable member for North Sydney (Mr. Hughes). The increased production of wheat in the wheat-exporting countries of the world, and the increased growth of wheat in Europe, plus a great carry-over of nearly half a billion bushels of wheat in the closing days of last July, were some of the reasons. In those circumstances it was clearly impossible for the price of wheat to rise. That was the generally accepted view throughout the world. The Commonwealth Government, however, took another view, I do not wish to be particularly critical of it on this account. I have been a member of this Government and a consistent supporter of it; but in view of the facts which I have set out, I appeal to it, even at this stage, to go back on its tracks. The Prime Minister in his speech - and no doubt his remarks represented the combined wit of the Cabinet - said that the Government had framed no provision for the wheat bounty for two reasons. The first was because of the general relief afforded to industry under the tax remission proposals embodied in the budget. None of us will disagree with the aim of the Government in that direction. We all know that it is a good thing to ease excessive taxation as far as is possible, but I cannot see how any relief from taxation will do one half-

Sir Henry Gullett. pennyworth of good to the wheat-growers unless a bounty is given to them. The second reason advanced by the Prime Minister for having made no provision for a wheat bounty was because of the anticipation of a rise of world prices following upon the international wheat agreement. Was it sound on the Government’s part to base anticipations of any sort upon the outcome of the World Economic Conference? We all know the story of that conference. It met in an atmosphere of gloom, and ended in an atmosphere of- shame. At no time did it give a gleam of hope to this distracted world. One would think that the Government, in anticipating a rise of world prices following on the international wheat agreement, had entered into that agreement with avidity; but we all know that Australia was blackmailed and bullied into it. We had to accept it because North America threatened to flood our Eastern markets -with dumped wheat.

Mr Beasley:

– It was sheer hypocrisy on the part of the Government to applaud the agreement.

Sir HENRY GULLETT:

– The Government did not applaud. In fact it apologized for having accepted the agreement. However, the Prime Minister stated that because of the agreement no provision had been made for a wheat bounty. The Government has made remissions of taxation to an amount of approximately £7,500,000, and has increased expenditure on account of restoration of pensions and Public Service salaries to an amount of £1,658,000. These two amounts total £9,000,000. Let us examine these remissions of taxation to see if it would not have been more desirable and more to the credit of the Government to retain some of this taxation to an amount of £1,600,000, which itis now proposed to obtain by means of a sales tax’ on flour. The direct taxation remitted amounted to £3,156,000 and included a reduction of the company rate from approximately ls. 4.8d. to ls. in the pound involving £585,000; remissions of taxation benefiting the insurance companies to an amount of £710,000; a reduction of the personal exertion rate of income tax involving £200,000, and also a reduction of the special tax on income from property of £1,100,000. The remission of land tax amounted to £400,000, and the reduction of the entertainments tax, as against a bread tax, amounted to £140,000. The Government, after discovering that it had made a miscalculation, should have considered the question whether the remissions which had been made were in aid of people who were really suffering an intolerable burden, and whether the big company and individual interests were carrying such, a load as to make it practically impossible for Australia to return to prosperity. I say, emphatically, that the load on those interests was not too heavy forthem to bear for another year. What is the ‘ story of the depression? It was at its worst in the first two and a half years of its existence, and before this time last year, before the national income had increased by one penny, the revival began. That revival disclosed that in this country, fear was a great factor in the depression. Starting from about a year ago, we experienced increased spending power, increased imports, increased manufactures, and increased turnover in wholesale and retail trade, and this country wa3 well on the up grade before tax remissions were made to the big interests. Bather than resort to taxation of the kind now proposed, those interests might well have continued unassisted, or at least need not have been assisted to the full extent of the remissions.

Mr Beasley:

– Some of those who benefited were not affected by the financial emergency legislation.

Sir HENRY GULLETT:

– There were also indirect remissions of taxation. The reduction of excise on beer amounted to £300,000. I ask honorable members to compare the tax on ‘beer with the tax on bread. The excise on beer was reduced by 3d. a gallon. As there are 8 pints in a gallon, in what way could that reduction be passed on ? The trade will receive all the benefit.

Mr Casey:

– Larger glasses are being provided.

Sir HENRY GULLETT:

– What power has the Government to ensure the enlargement of beer glasses? What satis faction is it to ‘the housewife in her’ cottage to know that her husband, when he comes home on Friday night, has had a little more beer than usual, particularly as she has had to pay substantially more for her bread ? There should be no need for this Commonwealth Parliament. to resort to such a subterfuge. The reduction of excise of Id. per lb. on tea amounts to £300,000. I do not know the true position in respect of tea, but I do know that the reduction was not passed on to the bumble householders of this country. When I speak of humble householders I refer to 90 per cent, of the community. The other day I was given figures showing that in the United States of America, in recent years, the average .income of the householder, representing 90 per cent, of the people of that country, rarely reached £6 a week. I doubt whether in Australia, during the last twenty years, the average income of the householder has been above £3 10s. a week. Those are the people whom the Government is now taxing. The reduction of duty of 2d. on crude rubber amount to £225,000. Is not a rubber tax preferable to a bread tax? It would have been infinitely better to retain the sales tax to the extent of £1,600,000 .than to tax the bread of the people. Did the workers receive any direct benefit from the remissions of taxation? They did not, although I admit that the pensioners obtained some relief. I know that it will be said that, by making the remission of taxation, enterprise will be stimulated and industry widened, and that some day in some way it will make for employment; but the immediate result will be nil. “ A bread tax of Id. on a 2-lb. loaf has now been levied in Victoria, and the people, who received no benefit from the taxation remissions, are now to pay increased prices for bread.

Mr Hill:

– The millers are making a profit of 27s. 6d. on every .ton of flour.

Sir HENRY GULLETT:

– The Leader of the Opposition (Mr. Scullin), when speaking last night, advocated the pooling system. I shall not discuss the merits or demerits of that system ; but a pool would not assist the present position. The .only thing that can assist it is some action which will enable the tax oh bread to be withdrawn. We are told that this tax will be withdrawn in seven months’ time.

Mr Scullin:

– I suggested the pool as an alternative for the future, in order to prevent a tax on bread. The pooling system should have been resorted to six months ago.

Sir HENRY GULLETT:

– There are some exemptions from the sales tax on flour. There are exemptions in favour of pollard and bran. Thus we have exemptions of chicken food and taxation on children’s food; exemptions of hog food and bread taxation on every human being in this country. The tax will fall most heavily upon the poorest people of the land because they are the main bread consumers. The Prime Minister quoted the high prices of wheat and flour in certain foreign countries. I am rather surprised that the right honorable gentleman who has made a name that will endure for his stern rigid and truly financial attitude, and for bis aptitude in balancing budgets, should quote foreign countries like France, Italy, and Germany. How many years have passed since either France or Italy has had a balanced budget ? Germany has long forgotten what a balanced budget is. Anybody who has lived in Europe and taken an interest in agriculture knows that the cost of production there is two or three times as high as it is in Australia. Even assuming that it were possible to make out a case for a local price for locallyconsumed flour, why should the consumers of bread, particularly as they are the poorest people in the country, be singled out to pay for the export of wheat? The bounty covers the whole of the wheat and subsidizes the export of portion of it. Why should the workers and the unemployed in this country pay a wheat bounty when the quantity exported is three times the quantity consumed in Australia? There is nothing equitable, nothing fair in that. Why not take out of the Consolidated Revenue what is needed, and make every one pay his share? I agree that the production of wheat should be subsidized, but why put the whole cost on to the consumers of bread ? Why place the burden on the poor man’s shoulders? He does not eat the wheat that is sent overseas.

Mr Maxwell:

– Is it necessary that the price of bread should be increased?

Sir HENRY GULLETT:

– Theanswer to that is that the increase hasalready taken place, and the Government cannot stop it. It was aware that this; Parliament cannot control the profiteering miller or baker. Why, therefore,.. is it doing this thing?

Let us see what manner of folk are our, poorer Australian people. What hasbeen their performance in war and in peace? Let us see whether it is fair to work off this despicable economic trick upon them. Only a few weeks ago a Premier of France - one of the best Premiers that country has had in recent years - was forced to resign, together with his Cabinet, because the Chamber of Deputies would not accept a budget which made provision for cutting Public Service salaries by 6 per cent. He was beaten for the most part by socialist votes, which represented labour.

Mr Casey:

– The proposal was for an additional cut of 6 per cent.; other cutshad been made before.

Sir HENRY GULLETT:

– Only very small ones, whereas in Australia westarted off with a salary cut of 25 per cent., and, though it tapered down, it still represented a big sacrifice by thelowerpaid officers in the Service. Moreover, our old-age and invalid pensions were cut by 12-J per cent, and: the dependants of soldiers had their payments reduced by 12 per cent. All workersworking under Arbitration Court awardshad their wages cut by 10 per cent. The difference between Australia and other countries is that the governments of othercountries have found it impossible to have their proposals accepted for the reduction of salaries and wages, and for the cuttingdown of social services, whereas in Australia, the great army of relatively humble people have given their country a wonderful spin during the depression. I represent 80,000 electors,, and when the Premiers plan wasput into effect, I did not get half a. dozen letters of protest. The credit for Australia’s economic recovery is due, not to the Leader of the Opposition (Mr. Scullin), who, when he was Prime Minister, brought in the Premiers plan, nor to the present Prime Minister (Mr. Lyons) with his splendid record of public service and his action in severing his connexion with the associates of a lifetime in defence of the Premiers plan. Australia has led the world in the restoration of -financial stability, because the people have loyally and cheerfully accepted the sacrifices imposed upon them. In other countries, great statesmen and patriots have sought to do what was done in Australia, but the people would not accept the sacrifice. The heroes in the battle to save Australia, in an economic :sense, are the rank and file of the people, and these are the people on whom we are going to put this mean retrogressive food tax.

It is by the votes of these people that we are in Parliament. The votes of hundreds of thousands of workers helped to place this Government in power. It also received the support of tens of thousands of the unemployed at the last election, and their reward is the bread tax. I entirely agree with the honorable member for West Sydney (Mr. Beasley) - though I do not think that I ever agreed with him before - when he said that the Government had received no mandate to impose this tax. I go so far as to say that, if a bread tax had been mentioned as a possibility before the last election, many of us on this side of the House would not be here to-day. Indeed, many of the Ministers in the Government would not be here. Had a bread tax been suggested during the last election campaign by any party, that party would not have been able to form a government.

Mr Fenton:

– Does the honorable member intend to vote against the tax?

Sir HENRY GULLETT:

– Certainly I intend to vote against the bread tax. Even at this belated stage of the proceedings, I appeal to the Government to go back on its tracks.’ I appeal to it boldly to admit a miscalculation in regard to this matter. The Government has a splendid financial record, and it can afford to plead guilty to this one mistake. I appeal to it to reimpose sufficient of the taxes it has remitted to make this bread tax unnecessary. If the Government will do that, it will give complete satisfaction to a majority of every party in the House, and I do not except the United Australia’ party. If a secret ballot of members were taken on this question, and ‘the Government did not make it a vital matter, the proposal for a bread tax would be overwhelmingly defeated.

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

– The Government has introduced this measure with reluctance and regret, because the condition of the country makes it necessary. The honorable member (Sir Henry Gullett) who has just’ resumed his seat spoke of imposing a tax on the bread of the people, and I am sure that he will not misunderstand me when I say that the easiest speech in the world to make is the kind which he has just made. Nor will he misunderstand me when I venture to make the comment that it is such speeches that have meant the ruin of the British farmer. Unless we are prepared to support the principle embodied in this bill, there is no chance for the wheat-growers, or for any other section of primary producers in Australia. When Mr. Chamberlain suggested a system of tariff reform in 1902 and 1903, the cry with which he was met everywhere in England was that he was taxing the bread of the people, and on that cry his proposals were rejected. It was said that there must be a free breakfast table; that there should be no tax on food. What is the position in Great Britain to-day? Great Britain has been forced for its own protection to impose taxes on food, and practically every country in the- world has had to protect its farmers by placing on food taxes of some sort. There are all kinds of taxes on food in this country. Practically every naturally produced primary product is protected in Australia, and manufactured foods are practically all taxed. To-day, we find that with gigantic food surpluses everywhere in the world, the farmers of practically every country are protected in some manner to enable them to obtain a price which will cover a fair cost of production. It is a generally recognized principle in Australia that the producers of necessary commodities are entitled to a fair return on the cost of production. Of wheat, more is produced, unfortunately, than the people of the world are able to eat.

Sir Littleton Groom:

– More than they can buy.

Mr LATHAM:

– Well, in order to avoid dispute on the point, I shall say that more is being produced than the world is prepared to buy and pay for at any price approximating the cost of production, and the troubles of the Australian farmers are aggravated thereby. I have again and again examined such material as is available regarding farming costs. Until a few years ago, the costs of wheat production in Australia - which are still comparatively low - were the lowest, in the world. Even though the average production per acre in Australia is low compared with other countries, so efficient has been our production, in a mercantile sense, that though we are far from the markets of the world, we have been able to hold our own against the producers of other countries. That is a tribute to the efficiency of Australian farmers; but of recent years, the price of wheat has fallen disastrously, until to-day it is far below the cost of production.

What principles are to guide us in this matter? The honorable member »for Henty (Sir Henry Gullett) says, “ Take the money out of the general taxpayer, and devote it to helping the wheatfarmer. Let us reimpose this, that, or the other tax, in order to make up the necessary amount.” The Government has advisedly not done that, because it considers that there should be a recognition of the principle which has been applied to all other industries, that the people should pay a fair price for the food they eat, the clothes they wear, and other things they use. It is admitted, of course, that any benefit gained by the wheat-farmers under this bill, will not, in many cases, go anywhere near raising present prices to the level of the cost of production, but the principle I have enunciated is none the less important. If the price of wheat were to double to-morrow in the markets of the world, there would he rejoicing on every side, and yet that would produce the same effect as this tax.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– There would be greater prosperity among the people who bought the wheat.

Mr LATHAM:

– There would be more prosperity all .round. Are the primary producers of this country alone to be left in the position that no regard whatever is to be paid to their unavoidable costs of production? Of course that may be done, and that is what the honorable member for Henty thinks should be done. His contention is that relief should be provided out of general revenue, and that no legislative means should be adopted to provide that the users’ of a product should pay a fair price for it. In the case of every protected secondary industry that we consider worth having in Australia, we have required our own people to pay what we regard as a fair price. Is that principle sound, or is it not ? If it is sound in the case of secondary industries - and who in this House will say that it is not - how is it unsound in the case of primary industries? But there is this difficulty to be overcome: It is much easier to ascertain the cost of production in a factory industry than in a primary industry. Costs of production vary very greatly indeed; for example, the other day I was looking at costs of production of wheat which varied from 9d. to 12s. a bushel. It is impossible to arrive, even approximately, at a basis of the costs of a primary industry in the same way that one can in the case of a secondary industry. Many farmers have paid far too much for their land, and so long as they are compelled to include the payment of high rates of interest or instalments on capital in their costs they will never show a profit at any probable price for wheat. It is therefore impossible in the case of primary industries to apply precisely the same principles with anything like the same exactitude as one can in the case of secondary industries.

In the first place, the Government is prepared to recognize that the user of the commodity should contribute towards a fair cost of production; but, because of the special difficulty to which I have referred, although only cursorily, it has decided that the balance of the charge shall be borne by the general revenue. Briefly, one-half of it is being found by a sales tax on flour, and the other half is to come from the sources to which the honorable member for Henty (Sir Henry Gullett) has referred.

Knowing what’ an easy popular appeal there is in saying, “ Do not tax bread

I have been rather astonished at the absence of resentment in the community against the flour tax.

Mr Beasley:

– Where has the right honorable gentleman been?

Mr LATHAM:

– Unfortunately, lately I have been too much in Canberra, but, even so, I have received many letters. It is remarkable that there has not been more resentment along the popular lines.

Some day, this Parliament will have to make up its mind as to the method by which primary producers are to be affected legislatively. Up to the present, there has not been any considered scheme. The Government proposes, and I am asked by the Prime Minister to say this on its behalf, to have an inquiry made into the economics of the wheat industry, from the production of the wheat to the sale of bread. As has already been stated, the Government is not able to prescribe the price of bread, but some of these matters are affected by the taxation which the Commonwealth imposes. It is proposed to have that inquiry made, not by wheat-growers who would have to make recommendations affecting themselves, but by the most capable and competent men obtainable. The inquiry will take place early next year, and will assist the Government in arriving at some principle which will prevent this Parliament from being put every year in the position in which it now finds itself.

Every honorable member- will agree that the condition of the wheat-grower is such that he must he assisted, and assisted from the public revenues. Yet, what do we find? The honorable member for Henty says that all the assistance must be provided out of general revenue. The Government asks the House to say that it shall be provided partly out of general revenue, partly out of a flour tax, and partly out of other special forms of taxation. Some honorable members say that the amount should be raised by a homeconsumption price for wheat, which would inevitably raise the price of bread, and, indeed, is intended to raise the price of bread, notwithstanding their contention that practically any other scheme than a tax on flour will not operate so as to raise the price of bread. Prom a political point of view, I can understand that contention; otherwise’ it is very difficult to understand the justification for it.

The Government hopes, by having an effective inquiry into the wheat industry

Mr Hill:

– Will there be an inquiry into milling and baking?

Mr LATHAM:

– Yes, from one end of the industry to the other. As a result of that inquiry, the Government hopes tobe able to determine some principles. Some, of course, are already fairly plain,, and, indeed, have been indicated duringthe course of this debate. Unfortunately, men have been pushed out beyond theeconomic margin, growing wheat on land, where, because of seasonal conditions, they could not, almost at any conceivable price for their produce, make a success. I should like to see some of this money spent in taking such men ofl such land,, rather than in encouraging them to remain on it. But it is impossible for thisGovernment to take any steps in that direction, that being a matter entirely for State action.

Another principle that leaps to the eyeis the fact that more wheat is grown than can be economically produced, and,, obviously, more than can be profitably sold. There are many other aspects of the wheat industry that attract attention. Already, unfortunately, it hasbeen the subject, not only of legislativemanipulation, but also of speculative manipulation. Some of the manipulation of the industry by pools, rings and combines, private or public, is largely responsible for its present condition. Europe has resented the attempts of wheat-growing countries, particularly the United States of America, to compel it to pay an artificial price. Wool is the one commodity that has not been dealt with in this way, as distinct from rubber, tin, coffee and wheat.’- The woolgrowershave suffered, but have met the market stoutly and are now obtaining a payable price. Wool is about the only industry in which producers have had an opportunity to be free, and have remained free of control. Wheat on the other hand hasbeen subject to all kinds of political and speculative manipulation, more particularly in the United States of America. Honorable members will doubtless have observed that, whenever we have in recent months received a message from America for the purpose of describing the effect of the President’s far-reaching attempt to re-organize the whole of the community, it has begun by referring to the prices of stocks and shares. Every one that I have met who has been to the United States of America recently has told me that, whereas in Australia a large percentage of the passengers in a railway train or ether public conveyance, will at once open their newspapers at the racing news, which is our outlet for speculation and taking a chance, in the United States of America almost every one immediately opens his newspaper at the reports of stocks and shares. In the United States of America business: has got on to a a absolutely unsound foundation as a result of this gambling, and wheat more than anything else has been affected by it. It is bought and sold, not as a. commodity or as human food, but merely as a means of gambling, just as horses are backed in Australia. I do not know how the United States is going to unlearn that habit except by a very sad and severe lesson, but that is one of the elements that have smashed the world’s wheat market. We, in Australia, are not able to deal with those matters, but we are able to help the farmer, who is in genuine , need. It is impossible to help accurately, according to individual need, and, as has been suggested, special difficulties surround the granting of assistance to primary industries, because, speaking generally, almost every producer is on a different basis; but by this measure the Government is endeavouring to provide some such assistance for wheat-growers, whilst in recognition of the truth of much that the honorable member for Henty has said as to imposing the burden upon those who are best able to bear it, it has decided that all of this money is not to come from a sales tax on flour. At the- same time it is also recognizing and applying the principle that the producer of an article which the community needs and must have is entitled to some contribution from the consuming community towards the fair cost of producing that article.

Mr MAKIN:
Hindmarsh

.- The Attorney-General (Mr. Latham) has certainly cut a somewhat pathetic figure this afternoon in endeavouring to answer the most convincing case presented by members of the Opposition, and supported so eloquently by the honorable member for Henty (Sir Henry Gullett) this afternoon. The caustic criticism that has been levelled at the Government because of its ineptitude is unanswerable. That the Government is in desperate strait’s is evident from its action last night when it called upon the right honorable member for North Sydney (Mr. Hughes) to endeavour to answer the criticism emanating from the Opposition. The right honorable gentleman’s exhibition was perhaps one of the most pitiable that has been witnessed in this chamber. He failed to face the facts, and simply attempted to distort the situation in his characteristic manner.

Mr SPEAKER:

– I very much regret having to draw the attention of the House to the conduct of the PostmasterGeneral (Mr. Parkhill), and give him to understand that I expect from him thesame good behaviour as I expect from all other honorable members.

Mr Archdale Parkhill:

– I rise on a matter of privilege. I take the strongest exception to the statement of Mr. Speaker. I was merely having a chat with the honorable member for Corangamite (Mr. Gibson), which I was entitled to do, and you, sir, had ,no right to describe such action in objectionable language. I have my rights just the same as you have, and I take the strongest exception to the offensive language in which you, sir, have described this incident.

Mr SPEAKER:

– The PostmasterGeneral is entitled to rise on a question of privilege, but it is most unusual to abuse that right in the manner that he has done. Every honorable member will agree that the Chair has been exceptionally tolerant with the honorable gentleman. I impress upon him that I will not continue to tolerate loud and disorderly conversations.

Mr MAKIN:

– The Government has failed to face the definite charge that has been made against it that it is mulcting the poorest section, of the community to provide relief for the wheat-growers. It is particularly reprehensible to impose what is virtually a tax on bread in face of its recent action in remitting a considerable proportion of the taxes paid by the wealthier classes. The remarks of the honorable member for Henty were indeed refreshing. After a long period of calm he has again displayed some of the qualities which were characteristic of the honorable member of old. No doubt the speech that he made this afternoon will become equally as historic as that in which he referred to a certain “ tragic Treasurer “. His condemnation, and that of other honorable members, have provided the strongest possible indictment of the -Government. From the time when the Leader of the Opposition (Mr. Scullin) made his speech on this bill last night, and throughout to-day, there .has been a succession of speeches notable for their stringent criticism of the Government’s endeavour to tax the poor and relieve the rich. The protests we have made here are supported by an enraged public outside. The trade unions, representing the workers and the unemployed, have taken a commendable lead in endeavouring to repulse the Government’s attack upon the staple diet of the poorer people. The claim of the Attorney-General .that the scheme suggested by the Leader of the Opposition would be equally as harsh in its application to the poorer sections of the community as a flour tax, proves that he is deaf, or not prepared to answer the convincing arguments that have been advanced. The Leader of the Opposition proved that when wheat was 4s. 9d. a bushel for home-consumption purposes, the cost of the 2-lb. loaf was but 4d. He suggested that at the present time we could pay 4s. a bushel at railway sidings for wheat required for homeconsumption, without any increase of the price of bread being justified. That argument has never been answered. All the mock heroics of the Attorney-General (Mr. Latham) and the right honorable member for North Sydney were no reply to the case presented by the right honorable member for Yarra (Mr. Scullin). I join with others in expressing my strong condemnation of the tax that the Government proposes to levy on the poorest section of the community. In view of the remissions of sales tax on luxury lines, remissions which the Government is prepared to continue, how can it justify the imposition of a tax of approximately 25 per cent, on the basic food of the people? The proposal is indefensible, and the public will express their indignation at the action of the Government at the first opportunity presented to them.

The attitude adopted by the AttorneyGeneral is somewhat remarkable. He has stated that the Government intends, early next year, to conduct an inquiry into the conditions that obtain in the wheat industry. I submit that any such investigation should have preceded the enactment of this legislation. Evidently, the right honorable gentleman is willing to pronounce judgment first, and to try the case afterwards. To-day, the Government finds itself in the unfortunate position of being able to please nobody. Its policy is based upon rank injustice and does not provide a solution of the problems that confront the wheat-growers. No section of this House more sincerely desires to assist the primary producer than do members of the Opposition. We aim at assuring to the men on the land an adequate return for their labour. Realizing, as we’ do, the desperate position of those engaged in rural pursuits, we cannot remain unresponsive to their demands. I remember a deputation, representing the wheat-growers, which visited Canberra a few weeks ago. The case they presented must have convinced any person who heard it, that the wheat-growers have a legitimate claim for assistance. I also press strongly the claims of the barleygrowers, who are suffering equally with other primary producers from the effects of the critical condition in which rural industries are placed, and who are in dire need of assistance. But the method of affording that relief proposed by the Government is of such a character that even the wheat-growers themselves do not favour it. They have already indicated that they do not desire the imposition of a flour tax. It is the right honorable member for Cowper (Dr. Earle Page) and others, who have pushed this proposal down the throats of the Government. Indeed, the bill has been forced upon the Government by members of the Country party. The great majority of our wheat-growers have no desire that the workers of this country should be penalized in order to provide relief for them. As fair-minded citizens, they recognize that any levy for that purpose should rest upon the shoulders of those who are most capable of carrying it. In view of the taxation remissions which have already been made, I ask the honorable member for Calare (Mr. Thorby) how he can justify this* bill. Does he prefer to tax the poorer portion of the community, to extracting from those in our cities who have lucrative incomes and who are possessed of wealth, their full contribution to this levy? Under the bill, a man whose income is £5,000 or £10,000 a year will not pay as much as will the man who is on the basic wage. The poor man will be required to pay some-‘ thing additional for the bread that he purchases, whereas ‘bread upon the rich man’s table is merely an incidental to the menu. Consequently, the proposal of the Government cannot be justified. If there is one thing more than another which has added to the difficulties of the wheat-farmer it is the vacillation and the glorious ineptitude exhibited by the Cabinet when deliberating on this matter. Obviously, its members have been divided.

Mr Stewart:

– There is some liberty of thought and action there.

Mr MAKIN:

– The Minister has no more liberty of action than has any honorable member on this side of the House. If I know him aright, he has no desire to levy a tax on the poorer classes of the community, yet, he has slavishly to follow the will of the majority of the Cabinet. His interjection, therefore, comes with ill-grace. He is bound body and soul to follow a course which inwardly he does not approve. I shall listen with close attention to any remarks he may make in justification of his attitude as a Minister on this question.

The time has arrived when it is necessary to protect our wheat-farmers and producers generally from exploitation. “We have all heard of the machinations of middlemen and speculators who are accustomed to deal in wheat, and who. usually secure greater rakes-off than do the actual growers of the grain. Here, perhaps, I may be pardoned for interpolating the experience of one of these growers in my own State. After stating that some farmers had been given advances by certain merchant firms, which had afterwards told them that their wheat had been sold at prices which left them in debt to the firms, Mr. J. G. Boyle, who is president of the Wheat-growers Union, has said : -

Had the conditions of the agreement been complied with, he added, 50 per cent, of the wheat held by one of the largest companies would have been sold at a price greater than the advances, as the price dropped after the company was entitled to sell under the terms of the agreement. Eighty per cent, of the growers who stored wheat had been severely affected by over-advances. The only wheat he had been able to trace was sold to a milling company for 4s. 5d. a bushel, but merchants credited the grower with ls. 8Jd. a bushel, and debited him with interest on his advance and the storage of the wheat.

I may be pardoned, perhaps, for relating the experience of a farmer who lives in one of the southern districts of South Australia. He told me that, desiring to sell a parcel of wheat to one of the merchant firms” in the city of Adelaide, he was instructed to deliver his wheat at a certain railway station from which he was informed it would be forwarded by rail to Mile End, Adelaide, where its sale would be effected. He delivered the wheat and ultimately received a statement of accounts which disclosed that he had been charged railway freight on the consignment in addition to dockage on account of alleged broken bags. A fortnight later his next door neighbour wished to purchase a parcel of wheat of a particular brand. Accordingly, he visited the agency of the same firm and inquired if it could accommodate him with the parcel he wanted. The reply was in the affirmative. The purchaser then inquired, “When shall I be able to pick it up?” “Possibly next week at our store”, was the answer. Later the man went down to the store and purchased the parcel of wheat, and the wheat he secured was that which had originally belonged to his next-door neighbour, who had thus been charged upon it freight, in respect of a railway journey that had never been made, and dockage, on account of broken bags, which had never been damaged. On top of that, the second purchaser was required to pay freight back from .Mile End, although the wheat had never passed out of the station at which it had been deliveredby the grower. That is the class of robbery which is going on at the present time, depriving the farmer of much of the reward for his labours that he has a right to expect.

I , am satisfied that, even if the wheatfarmer secured at no cost the labour that he requires for cultivation and harvesting, the other charges that he has to meet would prevent him from producing wheat at a profit. One of his principal disabilities is the high overhead cost due to the price that he had to pay for his land. It has been proved that in South Australia, on an average wheat yield of 42,000,000 bushels,the total indebtedness of the farming community, which amounts to £38,000,000, represents an interest liability equivalent to1s.1d. on every bushel of wheat produced. These figures were given to me by a member of the Country party in another place, who is a farmer in South Australia. Surely it must be obvious that the wheat industry should be relieved from these exorbitant charges and levies. In an article in a recent issue of Land, it was stated that to make farming profitable in New South Wales, it was necessary to crop 21 bushels to the acre and to secure a return of 3s. a bushel. The Government could provide that relief if it were prepared to police the matter by controlled marketing under a pool, but instead it prefers to impose on the community a tax that it cannot police. An advertisement published in South Australia by the Country Master Bakers Association reads -

The public are hereby notified that, owing to the operation of the gales tax on flour, there will he an all-round increase of1d. per loaf in the country districts as from Monday, the 4th December, 1933. (Signed) W. D. Burleigh, Secretary,

Bowman’s Buildings,

King William-street,

Adelaide.

The flour tax is equal to 0.74d., or approximately 3d., per 2-lb. loaf. Thus the profit on the flour used by bakers who increase the price of a 2-lb. loaf by1d., will amount to 25s. a ton, and the total rake-off during the seven months’ operation of this tax will be over £500,000. Why should the Government impose on the community a tax which enables shameless exploitation and injustice to be practised; a tax which it has no power to police? Surely this House has not the right to impose a charge on the community when it cannot provide safeguards against exploitation. I am afraid that those who advocate the claims of the wheat-farmers have not been as ready as they might have been to admit the effect of the application of scientific methods upon the production of wheat. At the lowest estimate, there has been an addition of 30,000,000 acres to the area planted with grain throughout the world as the result of the replacement of horse traction by motor traction. The lowest yield, according to the records published by Whittaker’s Almanac, is 10 bushels to the acre in the Union of South Africa. If that figure be adopted in connexion with the world production, it will be seen that the additional quantity of wheat which to-day is placed on the markets of the world totals 300,000,000 bushels. This has been brought about by only one innovation in production methods. Although many persons close their eyes to these facts, they have to be faced. The honorable member for Melbourne Ports (Mr. Holloway) has given in this House many learned dissertations upon the displacement of manual labour as the result of the application of scientific methods in every realm of industrial activity and primary production. There is every justification for the exercise of absolute control of the marketing of wheat and other products, so that the man on the land will secure the maximum return, and be able to maintain Australian standards of living. But I do not believe that wheat-farmers desire to be relieved of their difficulties by measures that increase the misery of the poorer sections of the community.

The Leader of the Opposition, on behalf of his party, has put forward a definite policy to meet the situation that exists. His is the only concrete proposal that has been submitted for not only solving the problem of the man on the land, but also doing the fair thing by all other sections of the community.

Mr GREGORY:
Swan

.- I listened attentively to the outburst of the honorable member for Henty (Sir Henry Gullett). I was not surprised at it, because on other occasions I have heard him make several similarly notable speeches. It appeared to me, however, that he was somewhat ungenerous in so bitterly attacking his late colleagues, who, i I consider, acted very fairly towards him. The appeal that he made is, of course, a most popular one. I contend, however, that few honorable members have done more than he did as a Minister for Trade and Customs to increase the cost of living of the poorer class of the community. .

I regret that delay occurred in the introduction of this measure but can understand the desire of the Government to see if anything of value came out of the World Monetary and Economic Conference, and the international wheat agreement. I admit that, in a sense, the Government was forced into that agreement, of which it did not approve. As the honorable member for Henty has pointed out, the proposals made by the United States of America, rendered imperative some such action. Having become a partner to the agreement, however, the Government had to assume responsibility in connexion with, not only the homeconsumption price of wheat, but also export conditions. I, for one, had very little faith in the monetary and economic conference. I agree with the contention of the Attorney-General (Mr. Latham) that our experience has shown that these agreements have done little towards restoring prices.

When the Country party waited upon the Minister for Commerce (Mr. Stewart), it requested assistance for wheat-growers to an amount of approximately £3,500,000, which would make the return to the Australian wheat-grower 4s. 6d. a bushel. Every honorable member who has spoken has admitted the fairness of the contention that the wheat-grower should receive a little more than the cost of production. I have been one of the most bitter opponents of anything in the nature of compulsion in trade and ‘commerce, but in view of the manner in which the farmer has been exploited, I propose to support what is practically a compulsory wheat pool, in order that the wheat-grower may receive a fair price for what he sells, and that those who preach compulsion may be given a dose of their own medicine. So far as I can see, industries of this sort may be protected only if they are enabled to exercise some degree of control over export and the sale of the article within Australia, and can insist upon action that will, result in .their obtaining a payable price for what they produce. Our difficulties have arisen from and to a great extent have been accentuated by the intense nationalism of such countries as France, Germany and Italy. It is remarkable that such a relatively small country like France, should be able to produce not only enough wheat for its own consumption, but even a greater quantity for export than a large country like Australia. Italy is also able nowadays to produce all the wheat required for home consumption. I am glad that the Government proposes to appoint a committee of inquiry to make a complete investigation into wheat production in this country. Every effort should be made to place this industry on a proper footing. We have to recognize that the vital needs of Australia are increased population and development. Our huge areas that are capable of being put to agricultural uses should be placed under cultivation to the fullest possible extent. The President of the Primary Producers Association of Western Australia, while visiting Canberra recently, placed before the Prime Minister a request for an inquiry into the wheat industry. One of the objects of such an inquiry should be to induce those at present growing wheat to limit their production and place areas of land at present so employed to other farming and grazing uses. It was pointed out to the Prime Minister that the only effective ways in which the wheat industry could be assisted at present were by the organization of a compulsory pool for the purpose of fixing the price of wheat for home consumption at 4s. 6d., or by the imposition of a sales tax on flour to bring about a similar result. The Government has seen fit to adopt the latter proposal. Although the members of the Country party consider that £3,500,000 is necessary adequately to assist the farmers this season, they have been obliged to accept £3,000,000 for that purpose. But I strongly object to the discrimination which the Government proposes to practice in distributing this money. Why should different conditions be provided for granting assistance to exporters of apples and pears on the one hand and exporters of wheat on the other hand?

Mr Stewart:

– The measure relating to the export of apples and pears will be amended in another place.

Mr GREGORY:

– Why should wealthy apple-growers obtain assistance of a kind denied to the wheat-growers?

Mr Stewart:

– They will not be able to do so under the amended provisions of the bill.

Mr GREGORY:

– I hope that if the discriminatory provisions of this bill cannot be deleted in this chamber, they will be deleted in another place. It is not fair that wheat-growers should be placed in the position of having to accept something in the nature of a dole. We should be providing for the wheat-growers, not charity, but a measure of repayment in consequence of the heavy cost of production, due to our tariff policy and other economic conditions. For many years Australia has pursued a tariff policy involving embargoes, prohibitions, surcharges, primages, and huge duties, which have had an injurious effect upon the wheat industry. These imposts have increased the cost of wheat production in Western Australia by more than 100 per cent.; but unfortunately, they have had a still more serious effect in that they have caused other nations to place restrictions upon imports from Australia. France, Germany and ‘Italy, for instance, have, restricted imports from Australia. In this circumstance it is necessary for us to consider, not only the price of wheat for home consumption, but also the export price. An export trade provides the real wealth of Australia and is, in fact, the balance wheel of every country’s wealth. In the future we shall have to pay regard to both the export and home-consumption price of wheat. In this connexion, I direct the attention of honorable members to the following extract from Le Soir, a Belgian evening newspaper, which deals with the new orientation of commercial policy. Having referred to the action taken in regard to the importation of canned meats, butter, milk, fruits, sugar and so on, the article states : -

However impressionable may be this enumeration, one -must acknowledge on the other hand, that the measures taken in Belgium are characterized, in comparison with those of many other foreign countries, by their moderation. The new orientation to be given to our commercial policy, must consist in renouncing this moderation, to engage itself, more resolutely yet, into a patch of protectionism, to follow the example of England, of France, of Switzerland, and so many other countries.

The best informed minds consider that it would be a grave mistake. One must judge a policy by its results. The case of France is particularly characteristic. The country has practiced, especially in its agriculture, an accentuated protectionism.

And the figures recently published show that their export trade reveals a veritable wreckage. . . More recently, the importation of cereals has, in a general way, been submitted to licence, and this measure is not one of protection; it tends to direct our purchases preferably towards the countries who give us the treatment to which a good client has the right.

Some little time ago, Australia having created a new industry, has purely and simply prohibited the importation of the window glass which we exported there. The Minister of Foreign Affairs, charged with the ‘defence of our foreign trade, has replied by inviting his colleagues of the National Defence to exclude Australian meats from the army tenders, and has also asked his colleague, the Minister of Agriculture, not to accord any more licences to Australia. That is a warning for the other countries. Negotiations are at this moment in progress with many of them. They may work out to-day what would be the consequences of a refusal opposed to the reasonable demands which we have formulated.

Those comments merit the earnest consideration of honorable members. We shall have to do our best in the future to see that our tariff policy is not injurious to our export trade, particularly the export of wheat. We have antagonized most European countries, and are now gambling with our trade with China and Japan. Belgium has definitely refused to allow our meat and barley to enter its borders.

In view of the wonderful improvement in our machinery manufacturing industries, the possibility of cheap tractive power being made available by the use of producer gas, and also our favorable climatic conditions, I consider that with even a slight increase of the world price of wheat we should be able to compete successfully with any other wheat-producing country in the world. The Government has in the past looked on the wheat industry as being in the nature of a huge reservoir from which unlimited wealth could be drawn for all time, and there .is no doubt that this industry has been invaluable to Australia during the depression; but, .unfortunately, production costs have increased to such an enormous extent that the industry is now unprofitable. A couple of years ago I quoted in this chamber some figures prepared by Mr. Woods, a special accountant, of Perth, who showed that, taking wheat on the basis of 3s. 9d. a bushel in 1914, production costs had increased by over 100 per cent. I also have some interesting figures which indicate the extent to which the cost of machinery has increased since 1914. The following table shows the cost of certain agricultural implements, taking the 1914 rate of duty and the 1933 rate, plus primage, but minus exchange: -

Mr White:

– I rise to a point of order. I ask whether the honorable member is entitled to refer in this debate to the price of agricultural machinery? I have already made a definite refutation of his figures to a deputation of the Tariff Reform League, of which the honorable member is president, and which placed before me the figures which the honorable gentleman is now quoting.

Mr DEPUTY SPEAKER (Mr Bell:
DARWIN, TASMANIA

– The honorable member is perfectly in order in discussing the cost of production in the wheat industry.

Mr GREGORY:

– The need for building up our export trade is at present very great, for we must people and develop this great continent. It is unfortunate, therefore, that such heavy imposts should be placed upon our producers. The only hope that I can see for the wheat industry in the next year or two. is the establishment of a compulsory pool and the fixation of the price of wheat for home-consumption. The Leader of the Opposition and the honorable member for Henty both agreed “that 4s. a bushel at least was necessary to cover the cost of producing wheat; and the honorable member for Hindmarsh (Mr. Makin) mentioned 4s. a bushel at sidings. I point out to those honorable gentlemen that the fixation of the price of wheat for home-consumption at that figure would have no different effect on the price of bread than the imposition of the sales tax on flour now proposed. I am surprised that those honorable gentlemen should think that they can gull the public into believing that there would be any difference whatever in the effects of the two policies. I have heard no suggestion that action is being taken in the State Parliaments to nullify the secret agreements under which such high prices are at present being charged for bread. Reference has been made to the price of bread during the war years, when wheat was much dearer than it is now; but it must be remembered that the War Precautions Act was in operation in those days, and that this Parliament had power to fix prices. But the State Parliaments at present have similar power, and the power is being used in Queensland. I have received the following telegram from the officer superintending the control of wheat in Queensland : -

Brisbane fixed prices: - Wheat, cost to Brisbane millers, three and sixpence bushel ; Hour, mill price eight pounds fifteen shillings ton; bakers’ price bread, fourpence halfpenny per two pound loaf cash delivered; cash shop prices bread range from threepence to fourpence two pound loaf.

The Sydney Morning Herald of yesterday quoted the price of bread in the different States. In Western Australia, the prices are - Perth, 3.85d.; Kalgoorlie, 4.43d.; Northam, 6.4d. ; Bunbury, 4d. ; and Geraldton, 3d. Those prices are for a 2-lb. loaf, although there is evidently some mistake in regard to the lastmentioned price. In Tasmania, the prices range from 3½d. to 4£d. Whether the fanner is assisted by means of a’ sales tax, or by raising the price of wheat to from 4s. to 4s. 6d. a bushel, the effect on the price of bread will He the same. I am glad that the Government intends to appoint a committee to inquire into this matter.

The Commonwealth has no power to interfere with the control of the States, but it has power to assist the States to take action in respect of agreements entered into between the flourmillers and the bakers. “We have heard, time after time, of persons being refused flour supplies unless they agree to fall in with the general conditions in regard to prices, and it may be that’ the Commonwealth could help the States to take some action in that direction. For three years the farmers have had a disastrous time and they are losing hope. They deserve not only sympathy, but also the fullest justice which, unfortunately, this bill does not afford.

I have received an enormous number of telegrams from Western Australia asking for the elimination of the clause in the bill which provides that no assistance is to be given to any farmer who had a taxable income last year. The Primary Producers Association has forwarded me the following telegram : -

Have wired. Lyons to-day registering emphatic protest against discrimination distribution wheat subsidy on grounds whole industry working at loss. Suggested limitation totally at varian’ce with benefits granted to other protected or assisted industries. Urge Country party stand firm removal restrictions.

I have received similar telegrams from Kellerberrin, Aldersyde, Merredin, Jennacubbine, Pingelly, and Wyalkatchem, all from Western Australia. The farmers’ organizations of Western Australia consider that the bounty should be paid to all wheat-growers irrespective of their taxable incomes. In that State, very little wheat is sold locally, nearly the whole of the crop being exported and sold at world’s parity. In one year, Western Australia exported more than half of the whole of the wheat exported from Australia, and practically every year that State exports more than any other State. Therefore, the farmers of Western Australia feel the pinch of any limitation of payment of the bounty more than those of any other State.

Mr White:

– Why should wealthy farmers receive a bounty?

Mr GREGORY:

– The wealthy applegrowers are to receive assistance.

Mr Stewart:

– Not now.

Mr GREGORY:

– No discrimination such as applies to the wheat-growers, was made in the bill to aid them, which we have just passed. Although some of the farmers may have had an assessable income last year, they showed considerable loss during the previous three years. The Minister for Trade and Customs (Mr. White) has never suggested that there should be any such restriction in respect of assistance granted to secondary industries.

Mr White:

– The secondary industries, unlike the wheat industry, have internal competition. The honorable member is asking for something for nothing.

Mr GREGORY:

– This Government has shown, little desire to protect the poorer sections of the community by asking the States to introduce a system of price fixation.

Mr White:

– I endeavour to help the needy and not the wealthy.

Mr GREGORY:

– The efforts of the Minister are applauded by the combines that profit by them. However, I do not wish to enter into a discussion of that subject now.

Mr Holman:

– What has been largely discussed during the last few years has been the claim of the rich man to have a little more.

Mr GREGORY:

– Most of the farmers who had an assessable income last year had enormous losses during the previous three years.

Mr White:

– They would come under the hardship provision.

Mr GREGORY:

– In view of the higher prices that the farmers have to pay for their requirements, I ask the Government to delete the discrimination clause from the bill. The assistance granted should be in the nature not of charity but of justice.

Mr ABBOTT:
Gwydir

.- Any one listening to the debate would wonder who was the particular party to he benefited by this measure. I was under the impression that the bill was to provide financial assistance to the States in the provision of relief to wheat-growers and for other purposes, but the great majority of the speeches on this bill have contained little or no mention of the wheat-growers. They have dealt largely with the incidence of the flour tax, and the specific purpose of the hill has to a great extent been overlooked. I listened with a great deal of interest to the speeches of the Leader of the Opposition (Mr. Scullin), and other honorable members. The Leader of the Opposition dealt, not so much with the imposition of the sales tax on flour as with the increased price of bread charged by those engaged in the milling and baking trade. In that respect I agree with the right honorable gentleman, because there is tremendous scope for an inquiry into the methods adopted by the flour and baking trades in passing on taxes to the community; and generally it has been found that, when taxes have been imposed, far more than the actual cost to the industries concerned has been passed on to the consumers. The right honorable member for North Sydney (Mr. Hughes) last night made one of the best speeches that I have heard him deliver for many years. He referred to wheat pools, and at the same time struck a note which is worth considering. He said that it was of little use for any government to fix the price of one commodity without being able to control the prices of other commodities. The Commonwealth Government has at present no power to fix the price of bread or other necessary commodities, and it is doing the right thing in introducing this bill. Certain of its provisions do not appeal to me, and I intend to refer to them during the committee stage.

I commend the Government for the assistance that it is extending to the wheat-farmers. The honorable member for West Sydney (Mr. Beasley) joined ih the condemnation of the questionable tactics of the flour trade and baking industry, and I feel sure that the general references of honorable members will cause the people to realize that the incidence of the flour tax is not so severe as those engaged in the flour trade wish to make it appear. This measure relates to the second greatest exporting industry of Australia, and, although I have not grown wheat, being engaged in the production of wool, it seems to me that the wheat industry is equally as important as, if not more important in some ways, than the wool industry. In the wheat areas there is closer settlement and more employment provided, both direct and in- direct, than is afforded by the wool industry. The Government is therefore wise in considering its position, and in doing what can be’ done to assist it.

The industries of Australia can be divided into two classes - primary and secondary. In the past the primary industries have depended upon the economic law of supply and demand, much more so than the secondary industries. The competition in the secondary industries is to a great extent, limited, and, as the Attorney-General (Mr. Latham) said a little while ago there is a fair price for a fair article. During my comparatively short life in this Parliament, I have seen primary industry after primary industry join the melancholy procession of industries which are requesting aid from the Government. That has been due, not to their own fault to a large extent, but to pressure of circumstances, which have been greatly accentuated by the war, the depression and other factors. In one of my early speeches in the Federal Parliament, made on the 17th June, 1926, I said -

Until we are able to export more secondary products there will not be much chance of progress in Australia. If the primary producer leaves the land and production ceases, what shall we live on? We cannot live long on our own fat. “I have tried to find a solution of this difficulty, but I confess it beyond my power to find one of any practical value. The only suggestion that I can make is ridiculous. It is to assist primary industries as we are assisting secondary industries, which will decide, for example, that the high cost of wages and living has increased prices by Id. per lb. for wool and Cd. a bushel for wheat, this increase to be made up to the primary producers by the Government of the country. The community to-day is making such a contribution to the workers and to the manufacturers, and, as a result, primary production is on the down grade. Unless we have greater production and decreased cost of manufacturing secondary industries, Australia will not long be prosperous. We are living in a fool’s paradise. If primary production fails, the whole foundation upon which the prosperity of Australia rests will collapse.

That was rather prophetic. With the exception of wool, practically every primary industry in Australia is in desperate need of Government assistance to enable it to carry on until conditions improve. Some years ago, when Mr. Bruce was Prime Minister, and just after the Development and Migration Commission had been set up, I asked the following question in the House: -

Mr Abbott:

asked the Prime Minister, upon notice - “ Can he say if the Development and Migration Commission will, at an early date, institute an inquiry into the main primary industries of Australia, viz., wool, wheat, meat and dairying, with a view to definitely ascertaining their present resources and future possibilities of expansion?”

My object was to focus attention on the main primary industries so that the time and energy of the commission would not be frittered away on investigating and encouraging minor industries which were not of such importance to the country. Even so long ago as 1927, I felt that costs of production were increasing so rapidly that the main primary industries would soon be unable to produce at a profit.

Much of the trouble which confronts the wheat-growers ‘in Australia and in other parts of the world is attributable to the post war boom. During that timo, the price of wheat in the United States of America rose to 8s. and 10s. a bushel, and I have read that wheat land in the middle West was sold at from £50 to £60 an acre. It was inevitable, therefore, that, when wheat prices fell, the men who bought their land at a high price should be in difficulties, while the banks which financed them collapsed like houses of cards. The hanking system, of the United States of America is extra- ordinary, and, fortunately, we have not in Australia had banking crises of the kind which are only too common in the United States of America. I desire to pay a well-deserved tribute to the manner in which the Commonwealth Bank and the private banks have withstood the tremendous demands made upon them during the last few years, and in which they have brought themselves and their clients through the depression.

While it is true that the collapse of world prices is largely due to the impoverished condition of the world, that is hardly a reason for the present unfortunate position of the wheat industry. We have been told that the tendency is, as people become poorer, for them to eat more bread rather than less.

Mr HOLLowAY:

-World trade has declined by one-third.

Mr ABBOTT:

– That may be true, but people must still eat, and, when they can afford nothing more expensive, they must eat bread. In my opinion, the decline of the price of wheat is attributable rather to over-production than to underconsumption. In 1931, the five big wheatexporting countries, namely, the United States of America, Canada, Russia, the Argentine and Australia, exported a thousand million bushels more than their average for the five years immediately preceding the Great War.

Mr Gibson:

– The increased production was due to the high price for wheat after the war.

Mr ABBOTT:

– That is true. That increased production is largely responsible for the present chaotic state of the industry was recognized by those who attended the International Wheat Conference, at which an agreement was reached for the restriction of production. From 1928 onwards the price of wheat has been falling steadily, and various federal governments have, year after year, provided assistance to the growers. Unfortunately, no comprehensive plan extending over a period has been followed. The growers have been merely kept afloat ; they have not been dragged on to dry land. Therefore, I was pleased to hear the Attorney-General say that the Government proposes to appoint a committee to investigate the wheat industry from the growing of the grain to the selling of the bread. Federal governments have not been niggardly in their assistance to the wheat industry, and the amount of £3,000,000 to be provided under this bill will bring the total assistance up to £9,000,000 in the last three years.

I approve of the bill, with the exception of that clause which provides for differential treatment of growers. The Government should not create a precedent of that kind. Any assistance which it is prepared to grant should be given to the industry, and should not be regarded as a dole to needy growers. As the honorable member for ‘ Wakefield (Mr. Hawker) said, the assistance should not take in some instances the form of “ doles for duds.”

The method by which the Government proposes to raise the money is, in the main, to be commended. The imposition of a flour tax is a sound method for financing the scheme, certainly far better than borrowing the money, or recasting the budget so as to re-impose taxation that has only just been remitted. It is unfortunate that the Government did not consider the wheat industry when it was framing the budget, but that is now past and done with.

As I have said, I deprecate the Government’s proposal to withhold, under this scheme, assistance from some of the most deserving men engaged in the industry. I know of men in my electorate who, because of this energy, perseverance and efficiency over the last four or five years, have just placed themselves beyond the scope of assistance under this scheme. One young man in the north-west, a Melbourne University graduate, began wheat-growing in 1927. The first year, because of a drought, he obtained no return at all. In 1928 he put in 300 acres; in 1929, 650 acres; in 1930, 750 acres; in 1931, 950 acres; in 1932, 960 acres ; and this year he has sown 1,200 acres. This man surely deserves well of the community, but he is to receive no encouragement under the Government’s proposal. He has so rapidly become expert that last year he won the Royal Agricultural Society’s medal for wheat-growing in the northwest.If the Government regards the assistance purely as a dole to necessitous wheat-growers it is adopting the right scheme, but this is the only industry in which that form of differentiation has been practised. When granting assistance under the tariff to the iron and steel industry, we make no differentiation between the poor manufacturer carrying on a backyard industry, and the Broken Hill Proprietary Limited. As soon, as a primary industry is concerned, though it has time and time again saved the country, differentiation intrudes, and, very grudgingly, assistance is provided.

Mr Dein:

– What was the yield in the specific crop the honorable member mentioned ?

Mr ABBOTT:

– I am not able to give the figures. It was just enough to give this man a taxable income.

Mr Dein:

– Will his yield this year be good or bad? N

Mr ABBOTT:

– Good, excepting that the crop has been badly damaged by rain and storm.

Mr Maxwell:

– The honorable member would not claim that that wheatgrower is in need.

Mr ABBOTT:

– No, and I admit that the difficulties associated with the problem cause me a great deal of perplexity. The whole principle of differentiation between industries is unfair, unless, of course, this is regarded as a dole for necessitous farmers. Because of that, I describe thismeasure as a salvage bill, one that is trying to save the wreckage of many farmers engaged in the wheat industry. At the same time, a salvage bill, which is to operate only for a year, does not meet the case. I am sure that honorable members will agree that the time has arrived when the position must he studied so that each year wheat-farmers will not have to come, cap in hand, to the Commonwealth Government for assistance.

A great deal can be done in one or two ways with which I shall deal. I feel that we do not strike at the main causes. While there are contributing farces all over the world which have brought about the position of the wheatfarmer, there are certain local causes making for high cost of production which we could do a great deal to counteract. I think that, as the honorable the Attorney-General has suggested, a* certain curtailment of acreage will have to he applied to areas upon which wheat cannot be grown economically. I am driven to that conclusion by the position which has arisen in regard to export. The countries to which Australia can now export wheat is limited in number. A few years ago, it could market its wheat, not only in the East and in the London market, but also on the Continent.Now the eastern market is entirely closed to us, and European countries are practically supplying their own requirements. We must face the fact that the fiscal action taken here and elsewhere has contributed greatly to that state of affairs.

Mr Riley:

– It is also due to the fact that we have not traded reciprocally with those countries.

Mr ABBOTT:

– If you sell to a coun try you must also buy from it. I am afraid that bilateral trading agreements are not common in Australia at present, and it is interesting to see that, by pressure of circumstances, the Government has been converted in this respect. While I do not wish to quote extensively, I feel that an extract from the well-known economist, Sir Henry Strakosch, can well be applied to tho situation. It is as follows : -

Mankind’s .behaviour during the past two years could be shown to point to a perceptible loss of that admirable quality - a sense of humour. Did it not accept the dictum that the world’s troubles can only he set right by each country redressing its balance of trade by drastically curtailing imports and fostering exports, without stopping to inquire who would buy those universally fostered exports in a world which is universally curtailing imports.

It appears to me that some wheat is grown in Australia in unsafe country. I am interested in that matter, particularly after hearing the Attorney-General’s statement that a committee is to be appointed to investigate the wheat industry from the sowing of the grain to the eating of the bread. That committee would be well advised to take into consideration the areas in which wheat may be well, safely, and profitably grown, and it should aim at eliminating from the acreage planted those areas which are unsafe. In that regard, I feel justified in. referring to the famous Goyder’s line in South Australia. Mr. G. W. Goyder, who was a surveyor in South Australia in the ‘60’s, delineated a boundary for wheat-growing in South Australia, based on an average 14-in. rainfall, which is known as “ Goyder’s “, and runs from a little north of Pinnaroo in a curve past Eudunda and Kooringa to Terowie, then between Yongala and Petersborough, then north-west to Mr Remarkable, and south to Moonta, which of late years has been extended by improved methods of dried farming, but, on the whole, is still substantially correct, wheat being profitably grown between it and the sea, but not to any extent beyond it. I suggest to the Government that it would be worth while considering the extension of Goyder’s line throughout Australia so far as wheat-growing is concerned. The line would show an area within which it is safe to grow wheat. Even in New South Wales there are areas where it is unsafe to think of growing wheat, the risk being far too great and the cost of transport too heavy. While plucky and hard working men have pushed out into such areas, one cannot help feeling that the time has arrived when their position should be considered together with that of the industry generally. I should like to see some inquiry made into a method by which those men could be, as it were, repatriated by the Government into other forms of primary production. It may be argued that that should be the task of State Governments, but I point out that it is the province of the Commonwealth Government to find these millions of pounds for wheat growers every year ; therefore it is only reasonable that both State and Commonwealth Governments should agree on some plan by which there should be a limitation of wheat-growing to safe areas.

Dr Earle Page:

– The granting of this money on an acreage basis encourages farmers to go on to what are really unsafe areas.

Mr ABBOTT:

– The granting of the money on an acreage basis is not economic, and while I do not say that that policy is adopted because of sentimental reasons, it certainly is justified in some instances, for example, when crops have been damaged as a result of “ visitations of God “.

I cannot conclude my remarks without paying a great tribute to primary producers, particularly the wheat-growers of Australia. All my life I have been engaged in the production of wool, which, if I may say so, is a luxurious calling compared with wheatgrowing, for it is not so heavy; but I have the honour to represent some 3,000 odd wheat-farmers. I know so well how they work, the vicissitudes through which they pass, the trials they undergo, and the staunchness with which they persist in carrying on in an industry, the exports of which have conferred such great benefit on Australia. I regret that in the metropolitan areas there is all too prevalent the feeling that too much is being done for primary producers. I do not for a moment say that sensible members in this House agree with that contention. At the same time one has to realize that in the last two or three years a position has been created in Australia which cannot be allowed to continue, and that it is futile to try to keep any industry going merely by making grants of millions of pounds to it each year. Some effort must be made to stabilize it. I trust that the Government will expedite the appointment of the committee to inquire into the wheat industry and give it wide terms of reference. I also express the hope that when the committee finishes its labours, its report will be acted upon, and not shelved as, unfortunately, has been the fate of so many excellent reports on different industries in the past.

I commend the Government on having introduced” this bill. There are one or two clauses with which I do not agree, but they may be amended in committee. I hope that this is the last time that the Government will have to introduce such a bill, and that by next year the need to relieve farmers in this manner will have passed.

Mr FENTON:
Maribyrnong

. -With the honorable member for Gwydir (Mr. Abbott).! I, too, hope that this will be the last time that Parliament will have to consider such a bill as this, although I represent a metropolitan constituency I do not think that the charge can be levelled at me that I have at any time stood in the way of granting relief to those engaged in primary production. I know that some rural industries have received a great deal of assistance, but at the same time I realize that they occupy a major place in the economic position of the Commonwealth.

I am glad that the Attorney-General (Mr. Latham) has stated publicly that it is. the intention of the Government to proceed at once with the appointment of a committee which will exhaustively inquire into the wheat industry, from the sowing of the grain to the time that the flour is baked. I believe that an investigation, if conducted on proper lines, will disclose certain practices which will enable our primary producers, as well as the consumers of wheat products, to be placed in a better position. But unless those who are actually engaged in the industry are themselves prepared, to shoulder responsibility by effectively organizing, Parliament cannot do much for them. Personally I am never afraid of any term that may be used in connexion with legislation. Some honorable members fear the use of the word “ pool “ and especially do they fear the term “ compulsory pool.” But I have no fear either of the establishment of a “ pool “ or of a “ compulsory pool.” If the men who are engaged in this industry cannot be trusted to control their own affairs, the position is a deplorable one indeed. I am chiefly anxious to see better organization amongst them, because such organization - must result in material advantages. The honorable member for Swan (Mr. Gregory) is constantly complaining of the overwhelming support that is given to our secondary industries, to the neglect of our primary industries. But his indictment does not hold good.. In the absence of a local market for wheat or butter or any other primary product, what would be the position of the farmer ? The truth is that by mutual co-operation we can help each other very materially.

The main bone of contention in connexion with these measures is the method to be adopted in raising about half of the amount of the £3,000,000 that is to be devoted to the relief of our wheat-growers. I shall never assent to the imposition of a tax upon the bread of the people. Who will contribute to the payment of this tax ? I would remind honorable members of the Country party, that it will not be city residents alone who will be required to pay it. , The honorable member for Henty (Sir Henry Gullett) has very eloquently placed the position before the House. There are very many primary producers, other than wheat-growers, who will be very heavily taxed under this proposal. For example, there are 100,000 dairy-farmers, 34,000 fruit-growers, -8,000 maize-growers, 8,100 sugar-growers, 2,148 tobacco-growers, 3,000 onion-growers, and 15,000 potato-growers, not to mention a number of others who are definitely engaged in other avenues of primary production. I do not limit primary production to the products of the land. The miner for gold and base metals, I submit, as well as the man who works in an ironstone mine or quarry,, is just as much a primary producer as is the wheat-grower.

So that we can safely set against the 59,900 wheat-growers in Australia, from 250,000 to 300,000 primary producers who are engaged in other avenues of production. All these persons will he required to contribute heavily to the proposed tax. The fruit-grower will be one of them. He lives in the country just as much as does the wheat-grower, and we know from experience that bread costs considerably more in the country than it does in the city, even though its delivery usually consists of dropping it into a box perhaps a mile or two distant from the fruit-grower’s residence. To put the matter plainly, a tax on bread will mean a tax which will fall upon the fruitgrower, the potato-grower, the oniongrower, and all those who are engaged in other forms of primary production such as I have mentioned. Sixty per cent, of the commodities produced by these men is consumed in Australia. Surely honorable members of the Country party should have some regard to the fact.

Those who advocate the imposition of this tax will be levying an extra burden on the primary producers. Let me give an illustration of the position of some of these producers. Within a stone’s throw of where I live is a man who last year “exported more than 1,000 cases of fruit overseas. He had to incur all the expenses of cultivation, pruning, spraying, &c, and he then sent his thousand cases of fruit to the other side of the world, where an adverse market was encountered, with the result that, instead of receiving any return whatever from his consignment, he was obliged to pay his export agent a rebate of £500. That man lives six and a half miles from the nearest place where bread is baked. He is at present paying lOd. for a 4-lb loaf, but when this tax is imposed, he will be obliged to pay 13d. for the same loaf. Obviously that is a heavy burden. I might give similar illustrations in respect of the potatogrowers, the onion-growers, and the dairymen, all of whom are “right up against it “ just as much as are our wheatgrowers.

I shall not enter into more detail. The honorable member for Gwydir (Mr. Abbott) has hinted that when times are bad the poorer section of the community is obliged to eat more bread. That may or may not be so. But it is undeniable that the poorest people are the largest consumers of bread, irrespective of whether they reside in the city or thecountry. If by means of a picture film, I could show the number of tons of bread! that are daily put up into lunches forthe working men and women in themetropolitan areas, honorable members would be greatly surprised. Of necessity,, these people will be the biggest contributors to the proposed tax. Here is what one man says about the matter -

I believe the wheat-grower should be aided - to the extent of £3,000,000 if necessary - and am prepared to pay my share of the cost. But what is my share? The Master Bakers declare that the 4-lb. loaf will cost 2d. more. I have a large family and am interested, as we consume large quantities of bread. I have looked up the baker’s hills, and find that the 2d. extra will mean that in a year I will pay £C extra to enable the farmer to live.

Mr Prowse:

– He cannot do without the farmer.

Mr FENTON:

– I know that. I am merely showing the number of consumers of bread who must necessarily be the chief contributors to this tax. The man whom I have just quoted, having been taken to task by a newspaper correspondent who signed himself “ Critical “ thus replies to his critic - “Critical” in to-day’s (Monday’s) issue of the Age, doubts my figures when X say that I, a family man, with .bread raised 2d. the 4-lb. loaf, will have to contribute £0 a year to assist the farmer, while my friends - not family men - living in boarding house, coffee palace, and hotel, will pay nothing. Critical “ objects to these “ indiscriminate “ statements, and declares that to prove my case I would have to buy 50 lb. of bread a week. Well, so I do, and some weeks it is 60 lb.

This man is one of the best we have in Australia - a man with a very big family. His position is typical of what happens in our metropolitan areas. When this legislation is enacted, the man with a large family will be obliged to pay annually in taxation on bread alone, £4 or £5 more than he now pays. Yet he is already being charged 2d. and 3d. per 4-lb. loaf more than the price at which that loaf can be purchased in the city to-day.

Mr Maxwell:

– And yet the honorable member taxes everything he wears.

Mr FENTON:

– No. From the crown of my head to the soles of my feet I am clad in commodities of Australian manufacture, and the cost is very reasonable.

Mir. Hill. - What about sugar?

Mr FENTON:

– The sugar-growers are primary producers, and I am just as’ prepared to extend concessions to them as to anybody else. Our sugar industry is worth millions of pounds annually to Australia.

I propose now to quote from a letter in my possession - I cannot disclose the identity of the author, but I presume honorable members will accept my word that he is one of the keenest thinkers in the community. He is not a man with a big family, but he knows the conditions that exist on the land, quite a3 well as he knows the conditions that exist in the city. This is what he says -

The irony of the whole thing is that all the firms that are making money by trading in or handling the farmers’ wheat, such as wheat shippers, wheat merchants, flour-millers, fertilizer companies cornsack and machinery companies, insurance companies, and very many others will practically pay no tax whatever, whereas the working men, especially those with large families, which are undoubtedly the largest consumers of bread, will practically be called upon to pay the whole of the tax, because it is the height of absurdity to think that you can add £5 or £6 per ton on to the price of flour without a material increase in the price of bread, and thousands of the biggest consumers of bread are in equally as bad shape as the most necessitous of farmers and quite unable to pay any such impost.

A Mallee farmer, a friend of mine, who I know is financially hard up against it, commenting on the proposed tax said, “ Goodness knows, some relief is absolutely necessary as we are otherwise right down and out, but it hurts like one thing to think that the man with a host of kiddies is to be bled for our benefit,” and I feel sure, knowing a very great number of farmers, that this is the way that they will feel about the matter.

As every one admits that the wheat-grower is conferring a national benefit on Australia by growing wheat and enabling her to adjust her overseas trade balance, interest and in other ways, then why should not the assistance be by way of a national bonus paid on the acreage of each wheat-farmer, and to which every Australian should contribute according to his ability to pay, and it can be done quito easily as instanced by the unemployment taxes, this would bc a far more just and equitable proposal than by levying a tax on the necessities of hungry men, women and children.

That gentleman has expressed my opinion, in language so eloquent that it needs no amplification by me. It is the opinion which is held throughout the community. I am prepared to help in providing £3,000,000 for the relief pf wheat-growers, but I object to its extraction from those who cannot afford to pay it. It is said that the Government cannot be expected to recast its budget. The budget has been altered in one respect, why not in another? Taxation has been remitted in the case of individuals who, strangely enough, throughout the depression, have done remarkably well, and to-day are among the biggest and wealthiest property-owners. The land tax alone has been reduced by 50 per cent, in two successive budgets. Surely it would be fairer to reimpose that taxation than to place an added burden upon the poorer section of the community! Even representatives of country constituencies cannot say my suggestion is not the most equitable that could be made. Why should the wealthy man have his taxation remitted, while poor unfortunate men with big families in the cities and the country are required to provide this assistance? If a certain amount of moral courage is needed, let the Government display it, as it has on other occasions. Instead of being condemned, as it is because of the present proposal, it would be universally commended. If this serious and obnoxious scheme were discarded, whatever opposition there is to the bill would be withdrawn. This will leave a soreness in the hearts and the minds of the great bulk of the consuming public. I make my plea as much in the interest of the struggling primary producer as on behalf of the poorly-remunerated city worker with family responsibilities. This iniquitous, ‘burdensome, and hurtful tax ought not to be imposed.

Mr JAMES:
Hunter

.- I wish first to congratulate the honorable member for Henty (Sir Henry Gullett) upon his magnificent speech, particularly as it was the first that he has delivered since his recent serious illness. Unlike the Attorney-General (Mr. Latham), I would not attack a man after an illness. The honorable gentleman has certainly shown that he is in . sympathy with the poor, unfortunate, down-and-out breadline worker, and on that account he deserves the commendation of any decent- minded man who has come in contact with that section of the community.

While I am in favour of a bounty to assist the wheat-growers of Australia, I am decidedly opposed to the suggested method of financing it. Eight along the line, the policy of this Government appears to be to impose taxes on the poorer sections of the community, for the benefit of others who are not nearly so badly off. In that connexion, I instance pensioners and expectant mothers. The Government was aware long before it introduced its budget proposals that this assistance was needed by the wheat industry. Under those proposals, handsome remissions of tax were made to people who could well afford to pay the amount remitted. As the Leader of the Opposition (Mr. Scullin) has said, the Appropriation Bill has not yet been’ passed by the Senate. I suggest that it he recalled, with a view to the re-imposition of an adequate portion of the £9,500,000 taxation that were remitted, for the purpose of financing this bounty.

An examination of the probable effect of the application ‘ of a sales tax on flour will show that the greater proportion of it will ultimately be borne by the poorer sections. I feel sure that that will be admitted by any fair-minded person. Although all taxes are bad, this one is much worse than others, because the effect of it will be to increase the price of bread, which is the principal item of diet of the basic wage worker and the man who is unemployed. Undoubtedly, such persons consume much more bread than others, particularly those whose incomes are from £500 to £1,000 and - over per annum, who consume very little of it because they derive nourishment from other vitamine-containing foods which the poorer workers are unable to purchase. The wealthier classes eat bread only with the object of counteracting the effects of more expensive but less nutritious foods. A comparison of the consumption of- bread in the parliamentary refreshment-rooms with that in working-class institutions will prove the correctness of that statement. A sales tax on flour is the most iniquitous tax that could be imposed, because of its effect on poorer people, who are chiefly dependent upon bread as a food. I am not ashamed to say that during the years of my industrial life, in which I suffered hardship, the diet of my family, as it is of these persons, consisted principally of bread, jam, treacle, and soup bones as the only meat. I have seen mothers deny themselves necessary nourishment in order that their children might be properly fed. If the price of bread is raised by the imposition of a sales tax on flour, the quantity of it that the average working family will he able to purchase will be substantially reduced. My colleagues and I realize that the wheat-farmer needs assistance. We contend, however, that the flour miller and the baker will pass on this tax. It has been said that they will not, but I know’ millers, particularly, too well to accept that statement. As a director and committeeman of the Kurri Kurri Co-operative Society, I have come into contact with them. About the year 1920, while the honorable member for Martin (Mr. Holman) was Premier of New South Wales, because some co-operative societies sold bread at ; a price below -that fixed by the Master Bakers Association, that association asked the Great Western Milling Company not to supply them with flour; and the company informed the societies that, unless they conformed to the price fixed by the Master Bakers Association, supplies would be withheld from them. It is to the credit of the honorable member for Martin that he told the Great Western Milling Company, and other milling companies, that unless they supplied co-operative societies with flour, legislation would be brought down to compel them to do so.

It is interesting to note that the price of bread fluctuates in different parts of Australia. In Hobart it is lower than in Adelaide, although the price of flour in Hobart is £1 per ton higher than it is in Adelaide. The price of flour in’ New Zealand is £4 15s. a ton more than it is in Sydney, yet the price of bread in New Zealand is lower than it is in Sydney. In 1924-25 wheat was selling at 6s. 5d. a bushel and in 1929 it was selling at 4s. 4d. a bushel, yet the average price of bread in both years was the same. There’ is urgent need to appoint a committee to investigate this industry. Yesterday, I asked the Prime Minister (Mr. Lyons) whether he would be prepared to appoint a committee of inquiry, or to approach the State Governments seeking their cooperation in the establishment of a pricefixing commission, and he said that the Constitution prevented such an appointment; but, since the delivery of the speech of the honorable member for Henty, the Attorney-General has stated that a committee will be appointed.

Dr Earle Page:

– Has the Constitution changed ?

Mr JAMES:

– The attitude of the Government has changed because of the rebellious speech of the honorable member for Henty.

The bill makes provision for compensation to millers and bakers in respect of bad debts, although they have already made adequate provision to offset bad debts by way of secret reserves, particularly in respect of increased prices and the writing-down of the capital value of stock and property. Provision is also made in the bill for concessions to be made to hospitals and other charitable institutions. I consider that unemployed relief committees should be included in that provision, so that our workless citizens, when presenting their dole tickets, should be exempt from the payment of the tax on bread.

Had the Government refrained from making taxation remissions of many millions during the last twelve months to the wealthy sections of the community, there would have been no need for the impostion of a flour tax in order to assist the wheat industry. I am making this attack upon the Government not for political purposes, but because I know what it is to be on the breadline, and because the working class families consume considerably more bread than do families with a decent income. In view of the fact that Tasmania is represented in the Cabinet by’ the Prime Minister and the Assistant Minister (Mr. Guy), it is interesting to note the provision in the bill for the payment to that State by way of compensation of a sum of £7,500 a month, or £38,000 for the seven months of the operation of the flour tax.

Mr Gabb:

– What would the honorable member think of two Ministers who did not obtain some advantages for their own State ?

Mr JAMES:

– The Prime Minister and the Assistant Minister have conferred considerable benefits upon Tasmania, and I refer particularly to the projected telephonic connection with the mainland, and the subsidies to shipping companies to improve shipping facilities, and to the annual grant to that State to compensate it for what it claims to be its disabilities due to federation. The Prime Minister should explain why Tasmania is now to receive additional assistance under this bill.

Why should the poorer section of the community be asked to bear the burden of this tax, particularly in view of the fact that taxation remissions have been made to the wealthy sections of the community? The Treasury returns for the first four months of the present financial year show a surplus of revenue over expenditure of £3,500,000, irrespective of the fact that the Prime Minister is budgeting for a deficit of £1,176,000. The Commonwealth revenue is buoyant, and there is no reason -why the bounty to the wheat-growers should not have been provided from it. Why should we tax the local consumers of our wheat by the imposition of a flour tax of £4 5s. a ton when no similar tax is- being imposed on the people who consume our wheat overseas.? About two-thirds of the wheat produced in Australia is exported. If a pool. were established, composed of the representatives of the wheat-growers, the consumers and others, it would be in a position to control the prices of wheat and flour and to inquire into the whole of the ramifications of the industry from the point of production to the point of consumption.

The Commonwealth Bank could finance the pool. I understand that <that bank has offered to finance the Government’s proposals to the extent of £2,000,000, but there is no reason why it should not have advanced the whole of the money required and thus prevented the imposition of a tax upon bread. Yesterday’s Sydney Sun contains a paragraph on a book, Australia’s Government Bank. written by Dr. L. C. Jauncey, who is a doctor of philosophy at Harvard University, and has twice visited Aus- tralia. In his book this gentleman pays a tribute to Sir Denison Miller and Sir Robert Gibson, and pro,phesies that the bank will become the people’s bank. That, of course, is ‘a plank of the Labour party’s platform. He advises Australia to cease borrowing abroad since the bank can finance all requirements. He says that its success foreshadows a world-wide extension of national banking. The Commonwealth Bank was inaugurated to assist this country, but apparently it is the real power in control, since the elected representatives of the people have to approach it cap in hand for assistance and take without complaint what is offered. The latest figures published by the Commonwealth Bank show that the total assets at the 30bh June last amounted to the following: - General banking and rural credits department £86,496,761, note issue department £51,488,331, and savings bank department, £123,921,S73, the aggregate being £261,906,965. Its profits to the 30th June last amounted to £24,930,000 of which £14,25(5,000 was from the notes department, £318,000 from the general banking section, £304,000 from the rural credits business and £3,052,000 from the savings bank branch. In view of the healthy position of the Commonwealth Bank as disclosed by those figures, it surely could have advanced the money to assist the wheat-growers and thus obviated the proposals of the Government to collect £1,600,000 by way of a flour tax, £130,000 by way of a duty on tobacco, which is a commodity mainly in use by the poorer sections of the community, and £200,000 by way of the reimposition of the property tax, How much longer are the people to be asked to assist certain primary industries while others are permitted to go to the wall? During the last few years the wheat industry has received more than favorable treatment at the hands of the Government in comparison with the treatment meted out to other industries, such as the coal industry, which is even in a worse position. We know that the wheat-farmers are entitled to some assistance, but what we are concerned about is the fact that in most cases this assistance will be used by farmers to pay certain debts, a matter of which I have very definite opinions. There is no doubt that in the majority of instances the money will be paid to the banks, and other financial institutions which are the real owners of most farming properties. In 1931, the Scullin Government granted a subsidy of 4£d. a bushel on wheat, which was distributed as follows: -

In Part VI. of the Financial Emergency Act of 1932, £2,000,000 was appropriated for assistance to the wheat-growers of the States and Territories for the 1932-33 season. In the same bill, provision was made for granting £250,000 to the States to enable a subsidy of 15s. a ton to be paid on artificial fertilizers to assist primary producers. My complaint is that, although money was granted to help the primary producers, most of it never reached them, or, if it did, remained with them for a very little time. This year a further £3,500,000 is to be provided, making a total for the two years of £9,164,136 6s: lOd. Governments have, therefore, been very liberal to the primary producers. The wheat-farmers have also benefited to the extent of £22,000,000 by exchange, and, as the price increases, they will benefit to a greater extent, as has occurred in the wool industry.

Apart from federal assistance, by direct grants and remissions of sales tax and land tax, the wheat-growers have also received large sums from the States. Last year, the budget brought down by Mr. Stevens provided for assistance to the extent of £253,800, while this year a further £162,400 has been granted. Moreover, interest charges, amounting to £2,800,000, on debts owed by primary producers have been postponed. Thus, in Kew South Wales, the primary producers who, for the most part, are wheatgrowers, have received State, assistance to the extent of £3,218,000.

In South Australia, that ‘ povertystricken land whose woes we are always hearing about, the wheat-farmers were last year granted £296,000 out of revenue and £211,601 from loan money, making a total of £507,601. In Queensland, the primary producers last year received grants and benefits to the value of £763,100, and in Tasmania, the State which makes such persistent demands upon the bounty of the Federal Government, the State authorities granted £76,790 to the wheat-growers, and remitted £82,000 of interest. I have no figures regarding State grants to growers in Victoria and Western Australia, but, without those figures, the total grants for the other States amount to £4,647,493, which, added to the assistance granted by the Commonwealth, makes a grand total of £13,811,629 6s. lOd.

The honorable member for Riverina (Mr. Nock) claimed that the money to be distributed under this scheme should be paid on a production basis, and that no account should be taken of the financial circumstances of individual growers. The honorable member, and some others of his party, are big wheat-growers, and they should at least have the grace to keep their mouths shut when proposals are being discussed for the payment of public money to themselves, particularly when we remember their attitude on the question of the recent salary restorations to members of this Parliament.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– What about assistance to the galvanized-iron industry?

Mr JAMES:

– My only interest in the galvanized-iron industry is my desire that it should furnish employment for Australian workers. Members of the Country party claim that this money should be paid on production, which, in effect, means that it should be paid to themselves; yet at least two members of that party opposed the recent restoration of parliamentary allowances. But in the making of this grant of public money, they have no hesitation in advocating that it shall be paid without restriction, knowing full well that, they themselves, will participate in it and that the public will be none the wiser. Members of the Country party, as a rule, oppose anything in the nature of assistance to secondary industry. The honorable member for Swan f Mr. Gregory) has an un conquerable aversion to anything made in Australia, and other members of the Country party are not much better. While clamouring for assistance to themselves, they strenuously oppose the protection of Australian secondary industries, which employ Australian workmen, who, in turn, provide the best market for primary products. When it comes to reducing duties; the Country party lines up with the Nationalist party, and if the two parties differ at all, it is because the Country party would like to see the duties still further reduced. Its members have also claimed that assistance should not be given to industries which cannot stand on their own feet, and that they themselves did not need help. But that was when wheat was selling at 9s. a bushel, and every one was prosperous. Members of the Country party, and of the Government also, have criticized those engaged in the coal-mining industry for not having made provision during the prosperous period for the inevitable time when the demand for coal would fall off, due to the increasing use of other means of producing power; but the farmers made no effort during prosperous times to provide for the lean days ahead. I am not opposed to the farmers receiving assistance, but remind members of the Country party that they should, in fairness, support proposals for the assistance of the secondary industries. Everybody knows that the farmers have been exploited, but the Government has never done anything to protect them. Is it afraid of the big financial interests which have been doing the exploiting? Tha Governmenthas shown itself more than willing to pander to the Country party, probably because it depends on that party for support. If there were twelve or thirteen “Roley” Jameses in this Parliament, there might be some chance of receiving a government grant to aid in the development of the coal industry and for the establishment of the industry for extracting oil from coal

Mr SPEAKER:

– The honorable member is straying from the subject.

Mr JAMES:

– According to the Commonwealth J. ‘ear-Book for 1930, the production of coal has declined by 4,095,418 tons, while the value of the output has declined by £3,911,617.

Mr SPEAKER:

– Order !

Mr JAMES:

– I am sorry that I was not able to get. in what I wanted to say. about the respective merits of the coal and wheat industries. It is essential that there should be an inquiry into the operations of the milling section of <the wheat industry, which, despite the reduced price of wheat and the fall in wages, has maintained a high price for flour. It is also necessary thoroughly to investigate the- varying prices charged for bread in different districts, and perhaps as a result of such an investigation it will be possible to give a little relief to the down-trodden unemployed and the basic wage-earners who will be the main sufferers as a result of the imposition of this flour tax.

Again, I plead with the Government to reconsider its intention to impose a tax on flour, and I challenge it to go before the people on that issue. Bread is the staple diet of the poorer classes who cannot afford luxuries, and because of that they will make the greatest contribution towards this tax.

Mr BLACKLOW:
Franklin

.- As the Attorney-General (Mr. Latham) has said, the Government is extremely reluctant to impose a sales tax on flour, and it is only because of the exigencies of the position that it is exploiting that avenue, among others, to assist the wheatgrowers. As I said only the other day, in extreme times such as these it is necessary for the Government so to allocate its revenue that benefit will be conferred on as many sections of the community as possible. In the past I have expressed my objection to grants, bonuses and subsidies, but it is well said that he is a fool who will not change his mind. At the same time I do not confess that I have changed my mind in this instance. I am confident that the result of the system of paying grants, bonuses and subsidies will be the encouragement of overproduction in uneconomic areas, which will react to the disadvantage of all concerned. After listening to the speeches that have been made on this measure I am more than ever confirmed in that opinion.

The honorable member for Henty (Sir Henry Gullett) said 1 that we should regard the production of wheat as a national service, and that wheat-growers should be paid for their services. It is most difficult to draw a line of demarcation between the production of wheat, rye, barley, or any other grain, and) bread is not the only necessary of life, for do not the scriptures say “Man shall not live by bread alone”? I am reminded of the statement made by the German Emperor just before the war, “I will organize . the workers of Germany with the even tramp of an army, swinging the lines along “. If we organize this and that industry “ with the even tramp of an army”, on the plea that they render a national service, “ s winging the lines along “, we shall be taking the first step towards the socialization of industry. If that is acceptable to the people of Australia it is something they will have to suffer.

The honorable member for Henty said that tariffs do not affect the workers because the needs of a worker’s home are not in any way concerned with the products on which duty is paid. I cannot agree with that argument, for it is obvious that every duty tends to raise prices, which must affect the working men of Australia. If we got down to bedrock we should find that tariffs play a big part in the real wages earned by workers. The honorable gentleman also said that the Government should have anticipated the present position when it introduced its budget. It is easy to be wise after the event, but, as a matter of fact, the Government did anticipate this position, and it entered into a world-wide agreement with the object of raising the price of wheat. Unfortunately, the result was not satisfactory, and the Government has taken another step by which it proposes to raise revenue to assist wheatgrowers.

The honorable member for Henty criticized the tax remissions that have been made by the Government. I remind him that’ the object of the Government is to bring about a reduction of taxation, and thereby increase employment, which, indirectly, must assist wheat-growers. If the action of the Government does not result in cheaper money being made available to those who wish to borrow, I for one shall be disappointed.

The honorable gentleman also compared the attitude of the civil servants of Australia and France when faced with salary reductions. He admitted that the civil servants of Australia have done their jobs nobly, and have borne more or less in silence salary reductions of from 25 per cent, down to 4 per cent, on a graduated scale, but he forecast that the Government would be defeated at the next election because of that, just as the Government of France, which endeavoured to reduce the salaries of French civil servants by 6 per cent., was defeated. Is that the sort of propaganda that a responsible member of Parliament should spread among the people of Australia? Our civil servants have earned the admiration of all for the way in which they are helping the country out of its difficulties, and it is improper to incite them to bring about the defeat of the Government.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– The honorable member for Henty did not suggest that.

Mr BLACKLOW:

– That is the only conclusion I can draw from his remarks. The Attorney-General indicated that a committee of inquiry would be set up early next year to investigate the wheat industry in all its ramifications. He went on to say that by distributing large sums of money, State Governments had encouraged the settlement of uneconomic areas, and it might be to the advantage of Australia if settlers were taken off such holdings. We have already had an example of this sort of thing, in the case of the British migrants who were settled in Victoria, and who now have to be compensated by the Victorian or Commonwealth Government, because the blocks on which they, were placed did not conform to the promises made to the English authorities. Once such a precedent were established, governments would be called upon to compensate, not only wheatgrowers, but also tobacco-growers, and even the settlers about Yanco who complain, of having been placed on land which is not suitable for irrigation purposes, and, shortly, we should find ourselves in an unholy mess.

Clause 4 specifies the amounts that are to be paid to wheat-growers in the various States, and I notice that Tasmania is to receive £4,024. Very little wheat is grown in Tasmania, it being realized that the industry is a more or less uneconomic proposition in that it is cheaper to buy the wheat requirements of Tasmania on the mainland. Clause 11 of the bill states -

There shall be granted to the State of Tasmania, by way of financial assistance, the sum of £7,500 in each month during which a tax is, under a by-law of the Commonwealth, imposed upon flour.

In this instance, the Commonwealth Government is behaving in an equitable manner to the State of Tasmania.

Mr Bell:

– It always has done so.

Mr BLACKLOW:

– It -may have attempted to do so, but frequently it has failed. If, as I expect it will, the flour tax results in the collection of £80,000 in Tasmania, and the people of that State received only £4,024 in return, it will mean that they are subsidizing the wheat-growers on the mainland to the amount of nearly £76,000. As it is, the Government is merely handing back to the people of Tasmania what it has taken from them in some form of taxation.

The honorable member for Hunter (Mr. James) referred to the grants which Tasmania, with certain other States, has received from the Commonwealth. Let me remind the honorable gentleman that, during the last two years, no less a sum than £9,000,000, including the amount proposed in this bill, has been provided from revenue or from loan moneys to assist the wheat-growers. Tasmania’s proportion of this is £325,000. Successive governments have, by tariff legislation, encouraged the expansion of secondary industries in the capital cities, principally Melbourne and Sydney, where for economic reasons the majority of them are grouped. All this has been done at the expense of the smaller States. Therefore, when honorable members talk about Commonwealth grants to Tasmania, South Australia and Western Australia, they entirely overlook the fact that money so given is merely a return to those States of some portion of taxation that has been levied upon them for the benefit chiefly of Victoria and New South Wales.

The honorable member for Darling Downs (Sir Littleton Groom) mentioned the enormous liabilities of the primary producers, and stated that figures given in connexion with bankruptcy proceedings in South Australia showed that the total liabilities to all creditors in that State alone amounted to £38,000,000, of which sum £32,000,000 was owing to the State Government. This shows the folly of governments entering into business. People who talk about the need for more government in business, forget that it is impossible for any government to ‘ conduct its business undertakings on business lines. If a government attempted to do that it would be obliged to write down by several millions of pounds the capital cost of all railways. That is what a private ‘bus concern would be forced to do if it wished to carry on. Before governments enter into business undertakings they should bear in mind the possibility of failure, and the risk attaching to course of action, such as that attempted recently in New South Wales. The Attorney-General said that he was in favour of taking wheatgrowers out of uneconomic areas. If this is done those States that were responsible for placing farmers on unsuitable land should be expected to pay the cost. I hope that the Government will appoint a commission to make an enquiry into the wheat industry, thus making possible a better arrangement for the carrying on of the industry.

Dr EARLE PAGE:
Cowper

.- Two measures dealing with important primary industries have been brought before the House this week. That relating to the dairying industry was so framed as to appeal to and give general satisfaction to not only all honorable members, but also the people outside, although differences of opinion arose with regard to certain of its details. The measure now before the House, to provide assistance for wheat-growers, seems to be so infiltrated with irritating details as not to satisfy any one in this House or in the country. In fact, the method adopted for the assistance of this industry, upon which the prosperity of Australia has depended so largely for many years, and which, four years ago, was especially asked by the Government of the day to increase production so as to save the credit of Australia, is in the nature of a dole. The bill is described as a measure to give relief to wheat-farmers. The assistance to be given cannot be looked upon as a bounty; and, because of the discrimination shown in the case of wheat-farmers, which is not shown in other measures granting assistance to other primary and secondary producers, I feel that a grave injustice is being done to the wheat-growers.

Only a day or two ago we were discussing proposals to assist the fruitgrowers who had suffered losses -in the export, trade. In that measure the assistance to be given was definitely limited to those growers who had sustained losses, but no discrimination was made between those who had incomes and those who had not. Although the assistance to be given to the wheat-farmers under this bill is substantial, it is not sufficient to meet the requirements of the industry, and I regret that it is not being given oh what I regard as just lines. I say that the assistance is not adequate because a comparison of the present position of the industry with its position a year ago will show that, while production has declined by 50,000,000 bushels, the price is at least 4d. a bushel less than the rate ruling last year. This means that while the industry is about £8,000,000 worse off than it was last year, the amount of assistance to be given is just about £1,000,000 more than the amount provided in 1932.

Mr Stewart:

– The right honorable member should not forget that 1,000,000 acres of wheat land has been diverted to other purposes.

Dr EARLE PAGE:

– I shall deal later with the acreage now under wheat. Today, the Attorney-General (Mr. Latham) brought down a proposal to provide for an inquiry into the economics of the wheat industry, and expressed regret that financial provision was not made in this bill to take some of the marginal farmers out of the wheat industry. May I remind him that the proposal of the Government to distribute the assistance under this bill, on an acreage basis, is a direct encouragement to farmers to remain on the marginal land rather than give their attention to other forms of production! I also regret that the Government has not brought forward a considered plan to make it unnecessary for the wheat industry and the other great primary industries to come year after year, in ignominy really, to this Parliament for assistance. The AttorneyGeneral said that the Government “was prepared to appoint a commission to examinethe economics of the wheat industry, and especially those phases of it dealing with the gristing of wheat into flour, the manufacture of flour into bread, and the distribution of its products. Such an inquiry should reveal the many anomalies and injustices which exist as between wheat-growers and consumers, and should point to the measures necessary to reducethe existing margin between the price received by the farmer for his wheat and the price paid by the consumer for bread. I should prefer the commission to be vested with authority to examine, not only the economics of the wheat industry, but also the related economics of all the principal primary industries, because such an investigation would indicate how best to deal with those marginal wheat-farmers whose continuance in the industry adds to the stress of efficient farmers occupying suitable land, and tends to drive world prices downward.

It is strangely ironical that the wheat industry should practically be bankrupted by the selffish nationalist policy of the governments of all countries, and that the Australian Government should have been one of the pioneers of that policy, and that it should have the assistance thrown out to it on a basis different from that adopted in the case of secondary industries. That it is an ill-conceived policy is demonstrated by the necessity to find money to assist the wheat-growers by taxing tobacco and reimposing income tax, which, as might have been expected, has quite unjustly brought the wheat industry into disfavour with a considerable section of the people.For example, the imposition of a sales tax on flour without some accompanying provision to guard against profiteering on the part of either the millers or the bakers is resented by many people.

I trust that it is not too late to persuade the Government to make certain alterations of its legislation so as to remove from the wheat-growers some of the odium attached to this proposal. If we could secure the final figures of revenue receipts for the first five months of the present financial year we might find means to do without some of the imposts that have been brought down by the Government. The Prime Minister (Mr. Lyons) stated yesterday that the favorable conversion of another portion of our debt due in London, would result in a saving of interest amounting to £230,000, which roughly, corresponds with the amount that is being raised by the increase of the property tax, and I suggest that its application to the relief of wheat-farmers would prevent the reimposition of that unpopular tax.

A comparison of the position of the wheat industry five or six years ago with its present position shows clearly that it is suffering from the militant tariff warfare that has been waged all over the world during the last four years. Ever since the depression began, the state of the industry has been getting worse. Tariff restrictions have caused a contraction of world trade, thus lessening the market for wheat. Quite recently, the League of Nations examined the world wheat position. Its report disclosed a state of affairs that is most alarming.

Sitting suspended from 6.30 to 7 p.m. [Quorum formed.]

Dr EARLE PAGE:

– In the World Economic Survey of the League of Nations just to hand, it is pointed out that the defensive economic tactics which have been pursued ever since the depression arrived, and which have driven us deeper into the mire, have been carried on during the last two years more intensively than ever before. Since September, 1931, 35 countries have gone off the gold standard, and 27 officially, and 3 unofficially, are exercising exchange restrictions. In the same period general tariff increases have taken place in 23 countries, while there has been only one case of general tariff reduction. In several countries there have been over 20 tariff changes in 16 months. Import quotas, prohibitions, and licensing systems have been imposed by 32 countries, import monopolies, mostly on grains, are in existence in 12 countries, selling or marketing regulations operate in 16 others, export premiums on wheat arebeing paid in 9 countries, and import duties or prohibitions have been imposed in 17 countries. This list shows clearly what has been the main cause of the depression. Unfortunately, some of the action taken against Australia has been of a retaliatory character, notably that taken in France, Italy and Germany. Four years ago, Australia annually sold to France £2,000,000 worth of wheat. To-day France buys none from us. We imposed an embargo on French perfumery of which we perhaps purchased annually £100,000 worth. France by way of retaliation has levied a duty on Australian wheat, which is three times greater that the duty on wheat from any other country.

Mr White:

– That is not correct. Ii was France’s own economic action.

Dr EARLE PAGE:

– The Minister for Trade *ind Customs (Mr. White) is wrong. If his statements were true, why has a discriminating duty been placed upon Australian wheat? In Germany too, an import duty has been levied upon our wheat equal in Australian currency to 12s. 2d., whilst Italy has imposed a duty of 4s. 5d. at the par rate of exchange, or of 8s. Id. at the current rate of exchange. These are instances of results produced by the mad tariff stampede which has characterized the whole world. Four years ago, Germany imported 70,000,000 ‘ bushels of wheat. To-day, by reason of a policy of economic nationalism, she can supply the whole of her local and home requirements, and last year she dumped 20,000,000 bushels of wheat and rye on the British market at 2s. a bushel. Italy, which used to import 100,000,000 bushels of wheat annually is now practically able to supply her own requirements of wheat. She is a self-contained and self-sufficient producer of 272,000,000 bushels.

The result of this selfish, narrow uneconomic policy of “ economic nationalism “ is that, while we are uneconomically manuf acturing goods, the saleable products of our customers, our customers are uneconomically growing all the primary products such as wheat, a staple product in the production of which Australia is a past-master. As a logical consequence there has arisen the present gigantic world surplus of wheat, which has forced the price down and created the present acute position, with the oddity, in a starving world, of restricted export. Factories in Europe have shut down, our own farmers are, as one might say, literally “ on the bread line “, and with their decreased purchasing power has come the closing down” of our own factories. By reason of this, the Australian Government has been forced to conclude an international wheat agreement with other countries, which have undertaken to restrict any increase of production. That, to my mind, in a growing country like Australia, is a policy of suicidal despair, as was pointed out by Mr. Bruce at the time.

There is, however, one redeeming feature in regard to the international wheat agreement in that 22 of the major countries of the world have been forced by international economic pressure to get together and attempt to do something in the direction of scaling down the tariff, and limiting uneconomic production in their -own countries. I am glad to see that there is to be a very substantial reduction of the area to be sown with wheat in France, and consequently, of the harvest to be gathered. When by international goodwill and understanding we can get into the countries most favorably situated the staples which can be sold there, we shall begin to see our ships filled, our mercantile tonnage employed, our factories re-commencing operations, and the world coming right again. That is what everybody must aim at. There is no publicist in the world who does not recognize that these things must be done. The international wheat agreement is bad in that it restricts production, but I am glad that 22 countries have entered into some form of agreement in regard to their products. In the attempt of the United States of America to bring about its own rehabilitation on a national scale, we are every day seeing evidence that a country cannot succeed in this direction unless it deals with the problem in an international way. What is the position in Australia? How can we deal with it? It seems to me that if we develop a longrange policy which will enable us to secure overseas markets for our goods and to undertake production in this country as well, we shall have a future. In the meantime, it is absolutely necessary that we should have a policy which will enable the man on the land to purchase goods that are produced in the city; otherwise there cannot be prosperity again. If we do that, we shall be starting to bring about general prosperity, but it can be done only by ensuring to our people who grow wheat a price in Australia, which is the only market we can control, sufficient to enable them to carry on their undertaking. It does not matter whether we pursue this policy by means of a sales tax on flour or a wheat pool, which will automatically raise the price of that staple in Australia, or by some system of marketing. So far as the price of bread is concerned, it does not matter which of these methods is employed. Those honorable members who rise in this’ chamber, and insist that there is some occult difference between an increase in the price of bread when it is brought about by the imposition of a sales tax and an increase which is brought about by the establishment of a Commonwealth wheat pool or by some marketing system, are. absolutely pretending that there is a difference where no difference exists.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– It is the United States Federal Farm Board’s marketing operations which have caused this problem in America.

Dr EARLE PAGE:

– The Federal Farm Board of the United States of America did not cause the problem; it was set up to solve it. The board was brought into existence as a result of the i disparity between farm and factory prices which had been brought about by means of intolerable tariff duties which have made such a difference between the price the American producer, was getting for his commodities, and the price he had to pay for his own requirements. If one looks at the position carefully he will find that the difficulty of President Roosevelt is that the prices of industrial goods keep rising out of proportion to the prices of farm products. That is what is responsible for all the farm picketing and agricultural strikes in America to-day. These discordant price movements are responsible for the existing condition of affairs.

In the World Economic Survey the League of Nations points out that one of the biggest factors causing discordant price movements is to be found in the weak bargaining portion of the agricultural producers. If at the World Economic conference the other day it had been decided to remove import restrictions in various countries, and to agree to definite prices between themselves as exporting countries, the price of wheat would have started to rise the next day; but, because nothing was done in the direction of agreeing on the prices at which the various countries would sell, there has been no improvement.

What we need i3 organization of the producers throughout the world, starting with a national organization with international contacts, and that is the problem to which the Government must address itself. The dole, for which this bill provides, is of real value at the present time, but of itself it will only result in another request for a dole next year. In the Interval, we must devise a system of organization and marketing which will enable the producers of these commodities to be in as strong a bargaining position as are the manual labourers in their trade unions, and as are the manufacturing organizations in the matter of prices. If we are to get anywhere, we must reduce costs all round by means of progressive tariffs and taxation reductions and secure greater, intelligent and planned co-ordination of industries generally. It is for that, reason that I have advocated the formation of a federal’ export council to lay down a policy in regard to agriculture similar to that which the Loan Council now lays down in financial matters. After the war, when the several States, assisted by the Commonwealth, set about the repatriation of soldiers, many mistakes were made. For instance, the States established returned soldiers on holdings, and required them to grow doradillo grapes, with the result that, before long, each State was producing enough for the Australian demand, and there was an over-production of brandy. We must prevent a repetition Qf anything of that kind. The federal export council which I advocate would be composed of the Ministers of Agriculture for the States, with the Federal Minister for Commerce as its chairman, and should act in consultation with the Ministers for Agriculture and Commerce in New Zealand. Australia must co-operate with New Zealand, because each dominion produces similar goods for the same market. If a common policy is not followed, chaos will result. For instance, it is useless for Australia to restrict its butter production and exports to England if, at the same time, an increased quantity of butter is produced and exported, from New Zealand. I am glad to notice the tendency to greater co-operation between the two dominions; that principle should be extended ; otherwise both dominions will be forced to accept low prices for their produce.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The right honorable gentleman is advocating the nationalization of industry.

Dr EARLE PAGE:

– I am not. The Dairy Produce Export Control Board has operated for nine years; but there has been no nationalization of the dairying industry. That industry is under the control of the producers themselves, as is also the dried fruit industry, which has its own Export Control Board.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The right honorable gentleman has advocated government control.

Dr EARLE PAGE:

– I am advocating parliamentary or legislative control which controls every private industry in Australia to-day. I am advocating in the case of wheat what has already been done with dried fruits and dairy produce.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– I take it that the proposal is to have a body similar to the American Farm Board.

Dr EARLE PAGE:

– No. That is an entirely different form of control. The board which I advocate would merely enable the producers to control their own finance and their own marketing under the machinery already existing and used. During the war, when the wheat industry was subject to control, the wheat merchants continued as before. Their experience was utilized. To-day the same butter exporters operate as before the Dairy Produce Act came into being. One of the biggest assets of any country is the mercantile experience of those engaged in export as well as in internal trade. I am convinced that the reduction of tariffs and of production costs throughout the world will be a slow process. In the meantime, we must maintain our great producing industries, on whose purchasing power the workers in the city factories and other sections of the community depend.

I understand that early in 1934, there is to be a meeting of Premiers to discuss constitutional matters, and I urge1 . the Minister for Commerce (Mr. Stewart) to have this matter discussed at that conference, with a view to arranging for the proper guidance and direction of our exporting industries. Australia still has the problem of the men on the marginal land. When the Bruce-Page Government went out of office, the Development and Migration Commission was just completing an investigation into the potentialities of the dairying industry in so far as its. expansion and marketing, &c, were concerned. A similar investigation should be made in the case of farmers working marginal lands, with a view to putting their experience and energies to more profitable use in some other industry.

I approve of some of the proposals contained in this bill, but not of others. ‘ I am glad that the Government relinquished the idea of financing the wheat-growing industry by means of a loan. Future generations will have sufficient trouble without our adding this additional burden. In my opinion, there should be sufficient surplus revenue in the hands of the Government from the accumulated surplus of the last two years to deal with the wheat industry without the imposition of extra taxes; but, if that means of assistance cannot be utilized, I should prefer that the money be obtained by a straightout tax on flour. In that event, the granting of assistance to the wheat industry would be separated from the general budget proposals. As it is, about £1,400,000 will be taken out of general revenue to assist the wheatfarmers. The very fact that a tax on flour is unpopular should be sufficient to spur the Government to seek the best means of assisting the wheat-growers.

The sales tax on flour does not justify the recent increase of the price of bread. In 1923, when wheat was 5s. 3d. a bushel, and wages were approximately the same as they are to-day, the price of flour was £11 8s. 4d. a ton. Bread was then sold for 4fd. per 2-lb. loaf. To-day, flour costs £7 10s. a ton, which, with a sales tax of £4 5s., makes a total of £11 15s. a ton. If bread could be sold at 4£d. per 2-lb. loaf . in 1923, when flour was £11 Ss. 4d. a ton, it should not be more than-od. per 2-lb. loaf to-day. I congratulate the Government on having decided to inquire into the milling, baking and distributing costs of bread. Even if the Commonwealth has not the power to enforce its decisions, the moral effect of such an investigation can scarcely be overestimated. The mere fact that an inquiry is contemplated tends to keep prices at reasonable levels. I hope that the Government will proceed with the inquiry immediately. The proposal of the Opposition that the wheat industry should be assisted by means of a loan is not sound, because, in the long run, the primary producer would have to pay for his own assistance.

I am opposed to the two methods by which it is proposed to distribute this money. If it is to be a dole, then it should be distributed on an acreage basis; but if the aim is the improvement of the wheat-growing industry, a grant on the basis of the acreage under crop will not achieve the desired result, for it will not eliminate the marginal farmer. A grant on the basis of production, or export, would encourage greater efficiency, which is what Australia needs. I am also opposed to discriminating between farmers with and without taxable incomes. If the grant is to be regarded solely as a dole, I have no complaint to make about its being given on an acreage basis, or regarding the discrimination between those with and those without taxable incomes. But if the grant is not a dole, some method of systematic and regular assistance should be applied as bounties or customs duties are applied.

Mr BELL:

– At the expense of other primary industries.

Dr EARLE PAGE:

– At the expense of all industries, primary and secondary. There is no justification for the present proposal, except on the ground that the grant is in the nature of a dole. But if that principle is to be followed, the effect on land development will be serious. If a farmer cannot” get assistance from the Government simply because he has other income; money for investment in land will be dearer than it is now. Great industrial countries, like Germany, France and Italy, recognizing the importance of the wheat industry, lend money at from 3 per cent, to 4 per cent, through organizations of workers to enable them to secure cheap land. In Australia no such policy is adopted.

I regard a sales tax on flour as a fair means of assisting the wheat-growing industry. If the tax operated during tho whole year, a sum of £3,000,000 would be obtained; and if it led to an increase of the price of bread, there should at once be an investigation into the baking and milling industry, and if it were found inevitable, the basic wage could be increased a few pence a week necessary to cover it. I do not suggest that the Government should attempt to interfere with the Arbitration Courts, but ,that both Commonwealth and State Governments should consult, with a view to assisting the wheat industry in a way that would not make that industry unpopular with the workers. If the tax were permanent, the lag that now takes place between the increasing of prices and the raising of the basic wage, would be overcome within six or nine months; but because it is to operate for only a limited period that lag will remain. For that reason the governments, while not attempting to interfere with the functions of the court, should investigate the position, and discuss it with the courts. Much of the unpopularity of this tax would disappear if the basic wage were adjusted in accordance with the increased cost of living.

Mr HOLMAN:
Martin

– I regret having missed a portion of the speech of the right honorable member for Cowper (Dr. Earle Page), but was gratified to hear his closing utterances, to which, having made some preliminary observations, I shall return.

I feel that, to a certain extent, difficulties have arisen in the course of the debate as the result of the endeavour of honorable members to discuss two .matters simultaneously. While I do not profess to be equal to the task of disentangling them for other members, I hope that I shall at least keep them separate in my own mind.

There are really two problems confronting us, one of which is the general future of the wheat industry of Australia. Have we reached the stage at which the wheat industry must be abandoned wholly or in part, or is that merely an illusion duc to a passing depression; is there no necessity for very rigorous measures? Almost every honorable member has had an irresistible impulse to discuss that question so far as his mastery of the subject permitted. Perhaps, because I am conscious of no special mastery of the subject, I shall be able to resist that temptation. I recognize to the full the wisdom of the decision at which the Government has arrived to set up a proper tribunal to inquire into it, and, if possible, arrive at authorized results; but I do not think that that is a matter which can be settled by a few casual observations, irretrievably intermingled with arguments upon another subject. That other subject, I take it, is the real theme before the House to-night - what action ought to be taken to keep the wheat industry on its feet until the prospects of next year unfold themselves? Should we, or should we not, make available a substantial sum to help those who are engaged in this industry? On that point, my mind, like that of the majority of honorable members, is made up. I confess that I experienced some difficulty in making it up. I recognize, of course, that this is a matter upon which no one could, by the mere light of nature, come to a conclusion; also, that it is a matter upon which the definite facts are only too frequently definitely mis-stated. My present feeling is that we cannot allow the wheatfanners of Australia to be dependent, until tho time of the next harvest arrives, upon luck, or the. occurrence of a miracle in the conditions of the market. “We must be prepared to give assistance now, and the sum of that assistance has been fixed by the Government at £3.000,000. On that point, I am behind the Government, as I believe the majority of honorable members are.

Two questions at least then arise: first, how is this money to be raised; and, secondly, in what manner is it to be distributed? Both of those questions are important. I wish to make my position upon them perfectly .clear, because I am not entirely at one with some of my colleagues. In the first place, it has been asserted that the raising of such a sum by a loan, to be repaid in three years - which, I understand, was the condition upon which it was intimated a loan would be available - would be unsound finance. Ordinarily, it would be. But, from the point of view of sheer finance, the whole project is unsound. The Commonwealth is not investing £3,000,000 in a business from which it hopes to receive a return, but is making that sum available only because of the extraordinarily difficult situation in which the wheat-growers of the Commonwealth find themselves. To say that it would be unsound to do that in a certain way, would be to utter a truism, which cannot be allowed to affect our action. This assistance is being given to people who are on the edge of distress, and can give no substantial security for it. I have no desire to wound in .the slightest degree the feelings of the men who expect this assistance; but to my mind it must be regarded as something in the nature of a dole. I do not use that word offensively; far from it; but these men are on the edge of financial destruction, and must be given help by whatever means the Government considers ‘best. Subject to an observation of the right honorable member for Cowper, I should say that in my judgment the proper way to raise that financial assistance is by a loan. If that may be described as “ unsound finance,” what may be said about a sales tax? I do not pretend to have exhausted all works upon the subject, but I challenge any honorable gentleman who takes the opposite view to produce a recognized authority on taxation and finance who would describe a sales tax as sound finance.

Mr Gregory:

– It is imposed in England for the same purpose.

Mr HOLMAN:

– It is done wherever those who need assistance cannot help themselves. But the fact that it is done under pressure in England and Australia does not prove that it is a sound system of finance. It is not. The sales tax is decried by every man who has considered it. It is a system of finance that we were driven to adopt at the beginning of the depression, and that the Government hastened to repeal as rapidly as possible. One of the principal financial achievements of the present Government prior to this year’s budget “was the allround reduction of the sales tax and its removal from articles of food. That indicates the feeling which members of this Government had concerning this method of obtaining revenue. Its withdrawal from articles of food met with universal approbation in this House, as an eminently desirable and defensible step. Now, however, the Government proposes to reimpose this tax on the most important article of food - the staff of life itself. It also, I understand, proposes to increase the duty on tobacco. I have not risen with any idea of criticizing or attacking my own Government, whose measures I have consistently supported, and whose views I warmly approve; but I do Bay that had the Government done me the honour of asking which I preferred, I should have said that I was in favour of borrowing the money and repaying it within three years. I should not have considered that that marked any departure from a sound principle, or interference with the budget in such a way as to increase the difficulty of the situation.

Mr Archdale Parkhill:

– The Government is paying £1,000 a day in respect of the last loan, which was raised to assist the wheat industry.

Mr HOLMAN:

– I have no doubt that that experience will be repeated. In politics, as I have learned by painful experience, one is frequently reduced to the making of a choice between two evils ; and the best that judgment can do is to indicate the smaller evil. In my judgment, the smaller evil would be a loan.

In this matter, the layman is not necessarily at a disadvantage compared with the expert. Some honorable members know a great deal more than I do about the wheat industry, and that knowledge is of very great advantage to them when they come to discuss that aspect of the question. I submit, however, that on the purely financial side my opinion, other things being equal, is as good as theirs, and that their standing is not improved by the fact that they have had some years experience of wheat farming in which I cannot claim to share. I put it to them, and to the House generally, that if the necessary money were raised by a loan on the terms which I understand were sug gested, and steps were taken to repay it in three years, both the Government and the country would be in a better position financially, than it will be by the restoration of what, since the days of Sir Robert Peel, has always been regarded as one of the principal manifestations of tyranny which can be inflicted upon an AngloSaxon population; that is, a direct tax by the Government on food.

Mr NOCK:
RIVERINA, NEW SOUTH WALES · CP

– “Never put off till tomorrow what can be done to-day.”

Mr HOLMAN:

– I am not proposing to put off anything.

Mr Nock:

– The honorable member is doing so. A loan must be repaid in the future.

Mr HOLMAN:

– I am proposing to make the assistance available on the same day, but by a different method. I do not think that the proverb quoted by the honorable member applies. It has been said, with very great truth, that under any system by which the price of wheat can. be raised a certain additional burden must be imposed on the wheat-eater ; that the great mass of the population who are wheat-consumers, and not wheat-growers,, must pay more for their food, possibly in exactly the same degree. Yesterday the right honorable member for North Sydney (Mr. Hughes) admirably put the position when he said that if the farmer gets more by any arrangement that arrangement must be at the expense of the rest of the community. I accept that statement, but I do not accept his subsequent statement that as the money has to come out of the community somehow, it does not matter in what way it comes out. I think that that matters enormously, both in fact and in psychology. In fact, it is a’ bad thing to take money from the poorest section of the community when it is needed for a certain purpose, and mentally, the effect is still worse, particularly if the people are taught to believe that they have been singled out for special sacrifice, and that the burden is to be placed on them. In that way, we should create a hostile mentality.

After the inquiry which the Government proposes to institute, it may transpire that there, is no future for this country unless wheat-growers are assisted, and in that event, if that hostility which

Is feared by the right honorable member for Cowper (Dr. Earle Page) arises, much mischief may result. Broadly speaking, the old idea of taxation as laid down by Adam Smith, was that an equal sum should be paid by every taxpayer under similar circumstances; that if the tax were on windows, it should be a tax on every window, and that one man with ten windows should pay ten times the tax of another man with one window. We have improved on that system, and have adopted to-day what is known by economists as the principle of the variation of utility, which asserts that if a man has 100 cattle, the loss of one is of smaller importance to him than it is to a man who has only ten cattle. The value to the owner for utility purposes diminishes little by little as the stock increases, and, consequently, if a tax gatherer, for the sake of illustration, takes away £1 from a man who has £10, a much heavier loss is imposed than if he takes away £1 from. a man who has £1,000. To a man who has £10, the loss of £1 might be of the greatest importance. That principle was established by modern economists about 30 years ago, and as a result, our taxation is graduated. We have a graduated income tax, and we avoid deducting from taxpayers sums which, although equal in themselves, weigh more heavily upon the poor person than they do upon the wealthy person. This proposal for a tax on flour violates every principle of modern economics. I understand that one honorable member has calculated this tax to amount to £6 per annum per family.

Mr Thorby:

– The tax will amount to about 26s. per annum per family.

Mr HOLMAN:

– I accept the honorable member’s figure. A sum of 26s. is of vastly more importance to a family, the head of which is working on the basic wage, than it is to a family whose breadwinner is earning, say, from £500 to £600 a year. All modern taxation is based upon a system of graduation, but this proposal involves a return to the system of the eighteenth century. I deeply regret that this form of assistance to the wheatgrowers is to be adopted without further consideration by the Government. I am opposed to the raising of money by a flour tax, and am still in favour of the money being raised by a loan in the way that I have suggested.

If £3,000,000 is raised by- a sales tax, or by a loan, or if it is taken from revenue, the next question to consider is how to distribute it. By confining the distribution of this money to the wheatgrowers who are -in dire necessity, we shall teach the majority of the people not to regard the agricultural interests as their bitter opponents, and this proposal as a tyrannous exaction from them in the interests of a privileged few. In that respect I approve of the proposal of the Prime Minister. Any departure from that principle would be fatal, and would enormously embarrass, if not absolutely defeat, any action which might be founded upon the result of the inquiries of the committee which is to be set up. What we want is a committee of inquiry which will ascertain facts and then make recommendations based upon those facts for the purpose of permanently saving this industry. What those recommendations will be I leave honorable members who are better acquainted with the technicalities of the industry to forecast, but the purpose of the committee should be to outline action and to prepare a scheme which will commend itself to the majority of the people and to the majority of the members of this Parliament. After all, the total number of wheat-growers, exclusive of their families, is about 60,000 among a population of 6,000,000. Honorable members should arouse a favorable feeling among the public in advance of the proposals which may result from the committee’s inquiry, and if a year before the inquiry takes place the people are led to believe that what may be described as cold-blooded mendicants are to receive assistance at their expense, the work of the committee Do ensure the future preservation of the wheat industry would be enormously handicapped. In fact, the committee would be almost predestined to ‘failure. What the members of the Country party have to show is a little self-denial. They should be anxious not to do the impossible, but to assist those wheat-growers who are in immediate necessity. The proposal is that the Government should play the role of insurer and ensure the position of those engaged in the wheat industry. .

Mr Gregory:

– That is done in respect of other industries.

Mr HOLMAN:

-.- Not to the extent proposed in connexion with this industry. The amount is everything. We may he willing to give 2s. to the man in the street, but we do not wish to burden ourselves by guaranteeing his future career. We may invite a friend to have a drink, without meaning to take him into the bosom of our family and support him for the rest of his life. The Government, in introducing this bill, has accepted the role of insurer, and I, by voting for the measure, as I propose to do, reserving the right to move amendments at the committee stage, am also taking up the role of insurer. But the people as a whole should not be asked to ensure that those engaged in the wheat industry should, in a. bad financial year like the present, be assisted to the extent of being placed in the position in which they would have been had the financial year been satisfactory.

Mr Paterson:

– It would cost at least £.15,000,000 to do that.

Mr HOLMAN:

– Then why adopt half -way measures? In any case the G07vernment could not find £15,000,000. What we should ensure is that those who are engaged in the wheat industry shall not starve. That is what the wheatgrowers have a right to demand. As the right honorable member for North Sydney (Mr. Hughes) said, this £3,000,000 comes not from the ambient air, but from the pockets of the people. Therefore, it must be husbanded, and laid out with all economy. Wheat-growers who are not near bankruptcy, or in poverty must not come on to the fund, and elbow out others whose need is far greater than theirs.

The right honorable member for Cowper spoke of inviting the co-operation of the Arbitration Court to make up to the wage-earners what they would lose a3 a result of the . tax. That proposal appeals very much to me. I recognize that there are certain difficulties, but they are in no way insuperable. The organized industries of Australia may be divided into two groups: those which are working under awards of the -Commonwealth Arbitration Court, and those which are working under awards of State tribunals. The State

Arbitration Court in New South Wales - and those in the other States also, I believe - have power to make a common rule, by which they can at any time vary the basic wage to meet altered conditions. If it was found that the imposition of a flour tax raised the cost of living by ls. a week, application could be made, either by the Government of the State, or by another interested party, to have the basic wage raised by a corresponding amount.

Mr Dennis:

– There would be no need for that if the wheat-growers were assisted by loan money, because the cost of living would not then be increased.

Mr HOLMAN:

– That is so, but I am now speaking of what might be necessary in the alternative if the money were raised directly by taxation. Thus, with regard to the industries working under State awards, no difficulty would present itself, but with those operating under federal awards, the process would not be so simple. The federal court has no power to make a common rule in regard to the basic wage; it can fix a wage only for individual industries. To overcome the difficulty, it would be necessary for the Federal Government to get into touch with every union, and arrange for ‘simultaneous applications to he lodged with the court for an increase of the basic wage. In individual cases, the applications might be opposed by the employers, but, in most cases, I have no doubt that an amicable arrangement could be reached.

Mr Rosevear:

– Does the honorable member think that the employers in the metal trade would agree to the basic wage being increased by ls. for the benefit of the bakers ?

Mr HOLMAN:

– I believe that a majority of the employers would take a reasonable view of the matter. I have no higher opinion of certain of the employers than has the honorable member for Dalley (Mr. Rosevear), but most of them are reasonable men. I believe that the right honorable member for Cowper had in mind some such scheme as I have suggested when he spoke on this subject a little while ago outside this chamber, and I am pleased he recognizes it as a necessary alternative to rasing the money by loan. I shall take whatever opportunity offers for obtaining an expression of opinion from members of parliament on these two points. I feel confident that members of the Country party would support either the raising of the money by loan, in which case no direct rise in the cost of living would be involved, or the adjustment of the basic wage by the Arbitration Court to compensate for any rise in the cost of living due to the imposition of a flour tax. I believe that I express the opinion of many thousands of urban dwellers, when I say that I have every sympathy with the primary producers, who have to put up with bad seasons and bad markets. They are* the victims of that alternation of misfortune in having nothing to sell when prices are high, and not being able to get a price when the harvest is good. All urban dwellers would, I think, be ready to support any practical scheme for helping the wheat-farmers out of their difficulties, but, in such matters, there must be a spirit of give and take. Those who demand sympathy must be prepared to extend sympathy, and I believe that the members of the Country party are ready to do so. Many thousands of men are out of work to-day, while others are earning less than their normal income. These people would be ready to assist the primary producers were they able to do so, but they have a right to feel aggrieved if that assistance is rendered by means of a scheme which adds to their own almost intolerable hardships.

Mr WARD:
East Sydney

.- The frantic efforts of the Government to assist the wheat-growers may be likened to a person attempting to patch up a rusty boiler ; no sooner is one leak mended than another breaks out. The Government imagined that it was out of all its difficulties when it brought down the budget showing a surplus of several millions. With no regard to the way in which the surplus had been obtained, it began to hand out benefits to the wealthy interests which had supported it during the elections. No provision was made, however, for assisting the wheat-growers, though, as the honorable member for Henty (Sir Henry Gullett) pointed out this afternoon, it was obvious to every thinking person that some form of assistance would have to be provided. The Prime Minister (Mr. Lyons), however, in his budget speech, said that the only assistance the wheat-grower could expect was the indirect benefit which he would derive from the remission of taxation.

Government supporters who spoke this afternoon made the astounding admission that the international wheat agreement was accepted unwillingly by the Commonwealth Government ; that, in fact, it had been accepted’ only under pressure from overseas countries which had a surplus of wheat to dispose of. One honorable member described this form of pressure as blackmail. Nevertheless, the Minister for Commerce (Mr. Stewart), when introducing the bill to approve the agreement, never at any time suggested that Australia had been blackmailed into the arrangement. On the contrary, we were told that the agreement provided another illustration of the wonderful service rendered overseas on our behalf by Mr. Bruce. Nov/ we learn that the Government did not want the agreement, and never at any time believed that it would operate to the benefit of Australia. In fact, the Minister, when asking for the approval of Parliament, should have apologized for the agreement, instead of applauding it. If this is how the Government handles the affairs of Australia, the sooner it makes way for a government capable of acting with firmness and decision, the better.

The right honorable member for North Sydney (Mr. Hughes), when speaking to this measure, said that there was very little chance of an improvement in the world price of wheat. We are entitled to ask, then, how long Parliament is to be asked to vote public money for the assistance of an industry which is producing a commodity for which there is no profitable market. The trouble with the wheat industry is, not that there is no demand for wheat, but that wheat, though it has a use value, has no exchange value. The people who need the wheat are not able to buy it. The wheat-farmers have a surplus of wheat; but they are not able to exchange that commodity for the other things they need, such as farm machinery, clothing for themselves and their families, and food other than wheat. The Government claimed that the international wheat agreement would have the effect of raising the price of wheat to 4s. a bushel.

The honorable member for “West Sydney (Mr. Beasley), after the agreement had been approved by Parliament, suggested that, if the Government had any confidence in the arrangement, it should require the Commonwealth Bank to make an advance against current wheat production. A rise in the price of wheat to 4s. a bushel overseas would be equivalent, with the addition of exchange, to 5s. a bushel for the Australian grower. We know, however, even. after the short while the agreement has been in operation, that its effect is likely to be the opposite from what was claimed for it. It will not increase the price of wheat, and will have no bearing on the world situation, because the subcommittee which was appointed to control the export of wheat and its disposal on the world’s market consisted of representatives of American and Canadian interests, whose purpose it was to dispose of the carry-over of their own product. They gained a victory, and the Australian wheat-growers were let down.

If the wheat-grower is in need of assistance, he should receive it. If he has been misguided by tha plea “of governments to produce more wheat when there was no prospect of securing sales, he is entitled to relief. If he has been misguided sufficiently’ to return and place implicit trust in this Government as a means of getting him out of his difficulties, though we may blame him indirectly, we cannot do so directly, because he did not understand the significance of his action. The needy wheat-growers have the entire sympathy and support of members of the Labour party, who . realize that, like the consumers at the other end of the scale, they are in dire need. It is remarkable that honorable members opposite should talk about constitutional difficulties on every occasion when a suggestion is made that something- should be done to assist the producer of wealth and at the same time protect consumers by fixing a fair price for all. It is amazing that whenever it has been demonstrated, as on this occasion, that certain people have been exploiting both producers and consumers by what really amounts to robbery, honorable members opposite contend that they cannot prevent that robbery because of constitutional difficulties. Apparently, the only occasion on which there are no constitutional difficul- ties is when the interests of its wealthy 1 supporters are involved, and pressure is brought to bear on the Government to do as they desire.

The Government is on the horns of a dilemma, and does not know exactly what to do. On the one hand, it has the Country party, on whose support it relies, bringing pressure to bear to have financial assistance provided for a primary industry. On the other hand, the Government, having handed over to its . wealthy supporters the surplus that existed at the end of the last financial year, experienced difficulty in finding money to provide that assistance. After many meetings of the Cabinet and the party, and numerous lengthy discussions, the Government has devised a scheme of placing a tax upon flour - in reality, one which asks the poor to assist the poor. Between the producer and the consumer of wheat there are the merchant, the miller, and the master baker; and, although it has been effectively demon’strated that in one direction and another both consumers and producers have been robbed, the Government has done nothing to prevent that malpractice. Panicstricken because of the spirit of rebellion displayed by some of its supporters who represent industrial constituencies, the Government has promised to set up a committee to inquire into the ramifications of the. industry from the sowing of the seed to the making of bread. How long will the general public have to wait until that body submits its report? We have previously had experience of royal commissions and committees of inquiry, and know that when after many lengthy and expensive sittings, and after perambulating the country from one end to the other, they have presented their reports, those reports are pigeon-holed, as will be done in this instance, for the Government has stated that it is powerless to enforce their findings. The appointment of a committee is merely a subterfuge to enable the Government to temporize and stave off the wrath of the people; and those honorable members who applaud the action of the Government know that the recommendations of the committee will not be acted upon if they adversely affect’ the master bakers, merchants, and millers who manipulate the wheat market.

Personally, I believe that it is a foolish policy to continue to produce wheat for which there is no profitable market. , The wheat-grower to-day is just as much on the dole as the unemployed worker in the city. The honorable member for Riverina (Mr. Nock) talked about the privations of those engaged in primary industry, which were, he declared, partly attributable to the wages which were fixed by arbitration courts and by the need of the Government to subsidize expensive social sei-vices. Honorable members of the Country party have stated that the wheat-growing industry has rendered a service to Australia by producing a commodity that has been exported to meet overseas interest commitments. It would be just as logical to suggest that the coal industry should continue to function at full pressure, and sell its product below the cost of production, and the Government will subsidize the loss out of revenue; and it would be just as logical to say that the unemployed labourer who has his labour to sell but cannot find a market must have a decent standard of living, as it is for the Country party to insist that wheat-growers should have that right.

My colleagues and I believe that every man, woman and child in the community is entitled to a decent standard of living; but we do not take the attitude adopted by members of the Country party, who advocate a high standard of living for one section of the people, and who do not care which section of the community makes the sacrifice so long as money is found for their supporters and their position in their constituencies is maintained. Undoubtedly this is a direct tax upon the poor. The wheat-growing industry is not saddled with unduly heavy labour costs, because, due to the unfortunate position of the workers, large numbers of unemployed are prepared to sell their labour even below the inadequate scale of wages determined by the Arbitration Court, and unscrupulous employers in both primary and secondary industries are prepared to take advantage of the position. It would do good to honorable members of the Country party who cry out for a decent standard of living and a fair return for the wheat-grower, if they were to travel about some of the country districts and see the manner in which some members of the farming community treat their employees. They would then see whether they believe in a decent standard of living. Members of the Country party in the New South Wales State Parliament opposed certain legislation introduced for the purpose of providing reasonably good farm accommodation for farm employees, and their colleagues in this House speak ‘‘with their tongues in their cheeks when they refer to decent standards of living.

This afternoon honorable members of the Country party protested against the provision that only those farmers in great need should receive benefits under this measure, claiming that there was unfair discrimination. As the honorable member for Hunter (Mr. James) said, they are really advancing a good case for themselves because they happen to be wheat-producers, and if that provision were eliminated they would receive considerable benefit. If it were contemplated that this relief .should be given, to those engaged in the wheat industry generally, as opposed to those in dire need, it would be only reasonable to suggest that those honorable members who are directly interested in the industry and would benefit from the legislation should not participate in the discussion or record a vote, as .otherwise they would be using their privileges to benefit themselves from the public revenue.

There are other costs to the wheat industry besides labour which, after all, is comparatively small. There is interest, and worse still, there is capital indebtedness. I believe that the best way to assist those engaged in this and every other industry would be to write down the capital indebtedness not only of land and agricultural equipment but also of homes of the people as well. The reduction of interest only would not restore the equity of those concerned.

The Bruce-Page Government dealt an effective blow at this and every other export -industry when they disposed of the Australian Commonwealth Line of Steamers. According to the information available to me, that government disposed of assets costing approximately £7,500,000, for £1,900,000, the sale being made on terms to a company which has defaulted. A further sacrifice was then made, the steamers being re-sold for a ridiculous figure, a sum which has not yet been paid although it is long overdue. When the Attorney-General (Mr. Latham) was asked what action the Government intended to take to recover the amount, he said all it could do was to wait and hope. That is a fine attitude for a government to adopt. When this line of steamers was operating it charged £7 10s. a ton for’ the carriage ‘of wheat to the British market compared with’ £13 charged by British companies. and £15 by foreign concerns. What had the members of the Country party to say in regard to this sacrifice of the Australian Commonwealth Line of Steamers, whose operations had proved so beneficial to the primary producer? When they talk of the cost of production crippling’ the primary industries, they should at least be prepared to examine their own actions, and all items affecting those costs, instead of discussing, as they never tire of doing, the only question which seems to concern them - the cost of labour.

I maintain that the Government proposals would not be accepted by the wheat-growers themselves, if they only knew what had taken place in this Parliament, and what was being supported by their own representatives. The honorable member for Henty (Sir Henry Gullett) pointed out that, in the recent budget, provision had been made for a reduction of certain forms of taxation, and that this reduction would assist sections of the community which are not actually suffering at the moment. It will be remembered that when the financial position of the Commonwealth was deemed to be sufficiently improved, honorable members did not hesitate to restore their parliamentary allowance to the extent of £75 a year. Every honorable member may have honestly believed that he was entitled to that ‘ restoration. But there was no honorable member who could say that he was actually in need. Although he could find many uses for the additional £75 -a year, not a single honorable member of this Parliament could truthfully say that he was actually in dire need of the money.

Mr Prowse:

– The honorable member does not mean to say that he voted for it?

Mr WARD:

– The honorable member for Forrest (Mr. Prowse) is questioning my vote. I am not like the honorable member, because I have the courage of my convictions. I do not go home to bed when a critical division is about to be taken, and complain about it the next day. I was present in the House and recorded my vote on the proposal to restore the parliamentary allowance of honorable members to the extent of £75 a year. I will guarantee that, although the honorable member for Forrest has absented himself from many divisions, he will be here at the death-knock to-night in order that he may secure the passage of this bill which will inflict a cruel tax upon the poor of the community.

As the honorable member for Henty has remarked, there are certain ways in which the Government has assisted sections of the community who were not in dire need of aid. In this connexion, he pointed to tho entertainments tax, to the reduction of the company tax, to the remission of the tax on overseas shipping companies, and to many other items, including land tax. As the honorable member for Gwydir (Mr. Abbott) has said, the pastoral industry is, at present, in a very favorable position. According to him, it is well able to bear its portion of this impost if required to do so. But’ this Government not only remitted taxation to the extent of £400,000 to that industry in’ the recent budget, it also remitted a further £700,000 last year, making the total remission £1,100,000. If it is necessary for the Government to retrace its steps, why not reimpose this taxation, and allow the unfortunate worker to escape having to provide this additional finance to assist the wheatgrower? The net remission of taxation last year was direct, £3,020,000, and indirect, £4,330,000- a total of £7,350,000. But what is to be the position next year? The flour tax is to operate only till’ the 30th June, 1934. Even under this bill, although the Commonwealth Bank is temporarily to finance the scheme, £1,050,000 is to be recovered from tho revenue next year. But what guarantee have we that the wheat industry will not then be in as bad a position as it is now? The Government has budgeted for an estimated deficit of £1,176,000 for the year ending the 30th June, 1934, and for 1934-35, it is estimated that the deficit will be £3,672,000, and the accumulated deficit already amounts to more than £17,000,000. Yet some honorable members opposite have been talking about “back to prosperity” conditions. One member of the Country party has said that the additional cost of food relief that is involved in this scheme will have to be borne by the general taxpayer. It will not have to be borne by the general taxpayer in New South Wales, because every unemployed worker there will have to be satisfied with less bread. His dole ticket, which previously prescribed the number of loaves he was entitled to receive, has recently been altered by a government of the same political colour as the present Federal Government to provide that he shall be entitled to bread up to a certain value. So that, in reality, the Government is asking the families of the unemployed workers to do with less bread. As representatives of the people, we are denying ourselves nothing. We are living on the very best in the land, while asking the wives and families of our unemployed workers to make further” sacrifices in order that the wheat industry may be maintained. The workers are the greatest consumers of bread, and, naturally, they are vitally interested in the present proposals of the Government. These workers know full well- that they are being exploited, but because they are not sufficiently influential they are unable to bring pressure to bear upon this wealthy man’s Government. When this vote is taken we shall find that many honorable members who support the Government will cross the floor and vote against it, merely because they desire to save their own political lives. They realize that this measure will be an unpopular one, but because they know that the Government has the numbers to carry the measure, they will only make a pretence of voting against it. It would be a very different matter if they held the fate of the Government in their hands.

Honorable members who are supporting the Government’s proposals have said

page 5675

QUESTION

H981

that no suggestion has been put forward by the Opposition as to the way in which assistance can be given to the wheatgrowers without imposing hardship on the consumers of bread. The right honorable member for North Sydney sugguested that the Commonwealth Bank should not be asked to make a loan with very little prospect of immediate repayment, or a loan providing for repayment over a long period of years, but that it should be asked to consider the scheme as a business one. The Commonwealth Bank should have been prepared to consider it as a business proposition, and should have welcomed the opportunity to finance it, because if the international wheat agreement achieves its stated purpose, export wheat should reach a price equivalent to 5s. a bushel in Australia. And who would refuse to advance up to 3s. upon an article which was expected to be disposed of for 5s. According to the Statistician’s Department, the revenues of the Commonwealth are in a buoyant condition. We are receiving by way of revenue many millions of pounds in excess of our expenditure. Yet the Government has never suggested that this industry should be assisted even from revenue.

In regard to the control of industry, the honorable member for Martin (Mr. Holman) has said that many honorable members were posing as experts, and were talking about undue profits in regard to milling, and the baking of bread, who had had. no experience of the trade whatever. I had a very short and bitter experience as a master baker, but because the Millers Association and the master bakers were acting in complete agreement, we found it almost impossible to carry on. In the circumstances I shall narrate, how can it be said that the master bakers or the millers are supplying the consuming public with bread at a fair price? We operated in a bakehouse in which there was no machinery - all the bread had to be made by hand. The master bakers at this time decreed that the price of bread should be 5d. for the 2-lb. loaf over the counter, and 5½d. for it delivered, but we were delivering bread at 4d. per 2-lb. loaf, and selling it over the counter at 3-Jd., and, while doing so, were able to secure a fair return on our outlay. But we found that we were up against the master bakers and the Millers Association. The millers began to deny us supplies. We had to send to Victoria for our flour under a different name, and we had to get it consigned to a different locality from that in which we operated.

Mr WARD:

– It was in the year when the honorable member was Minister for Agriculture in New South Wales.

Mr Thorby:

– I have the papers here.

Mr WARD:

– I do not know exactly what papers the honorable member has. but I do know that on three or four occasions when, through the columns of the press, he was inviting information relating to specific instances in which supplies of flour had been refused, I unsuccessfully endeavoured to get in touch with him. He was not anxious to get that information.

Mr Thorby:

– The representatives of the honorable member’s firm came and stated their case to me. The parliamentary representative of the honorable member was, I believe, Mr. Stanley.

Mr WARD:

– No, he was Mr. Shannon. To show that bread can be produced much cheaper than the master bakers and millers would have us believe, I may mention that, during the recent bread war in Sydney, they were anxious to stifle competition, and even went to the extent - as an inquiry will disclose - of securing small bakehouses whenever they became vacant, and although they were prepared to sub-let them to other persons they absolutely refused to lease them as bakeries. But notwithstanding their efforts to stifle competition and maintain bread at an unfair price, they failed to achieve their objective, because, as the honorable member for Indi has interjected, they Were scabbing on each other. They were undera cutting and canvassing each other’s trade. Whilst they were trying to squeeze out what they considered to be unfair competition, they had incidentally put themselves in the hands of the millers, who had financed them when they were selling bread at below its cost of production. To-day, 80 per cent, of the master bakers of New

South Wales are absolutely at the mercy of the millers. At one time there was a State bakery in New South Wales. I shall read exactly what the Auditor-General of that State had to say concerning it in the year 1920-21. His report on the subject reads -

The State, bakery is handicapped with outofdate buildings and appliances, and having to compete with bakeries possessing all modern equipment.

It -Was able to sell bread at less than the fixed price, and show a profit. Wheat for home consumption was bringing 8s. per bushel, and the cost of the 2-lb loaf from the State bakery was 5£d.

In that year, the master bakers attempted to maintain the price of bread at a much higher level. Although, according to the Auditor-General, the State bakery had obsolete appliances and was competing against up-to-date bakeries, its trading operations during the year 191S resulted in a profit of £1,419, representing 8 per cent, upon the capital outlay. I say advisedly that, taking into account every item of expenditure, and even allowing for bad debts, bread could be delivered in Sydney to-day, with flour at £9 a ton, at 4Jd. per 2-lb. loaf, and show a handsome return to the master baker.

Mr Maxwell:

– Why does not the honorable member return to the trade and show how it can be done?

Mr WARD:

– If the honorable member for Fawkner (Mr. Maxwell), out of his vast legal experience, could find means to break the opposition of the master bakers and the millers, “and allow to an independent bakehouse a fair opportunity to operate, I should have no hesitation in adopting his suggestion. He knows that in this industry as in other industries independent producers who are prepared to sell their products at a fair price have no chance of succeeding, because the forces opposed to them are too strong.. Flour had to be obtained by us from Victoria, because it was. not available in New South Wales, although the spot .cash was there for it. Our flour cost from 10s. to 15s. a ton more than that of the master bakers. Does the honorable member suggest that those conditions were fair? Anybody can succeed in this industry if given a reasonable opportunity to trade.

No reference has been made to” the reduction of costs. The operative baker receives to-day £5 3s. a week, compared with £6 Ss. a week in 1931. The bread carter is paid £4 2s. 6d. a week, whereas his average wage previously was over £5 a week. The carters were in a very fortunate position. Because, to a great extent, they control the sales of the products of the factory, many of them were able to obtain a great deal more than award rates. But their wages have, now been forced down to bedrock. The cost of production having been lowered, the price of bread should have been correspondingly reduced.

Let us analyse a few figures. In 1914, flour could be bought in New South Wales for £10 a ton. The price of wheat was then 4s. 4d. a bushel, and that of bread 4d. a loaf. This year, flour can be obtained for £9 a ton. The price of wheat is 2s. 7d. a bushel, and bread is being retailed in Sydney at 5-Jd. a loaf. During the intervening period, the price of flour has decreased by 20 per cent., wages have risen by approximately 38 per cent., and there has been a rise in the price of bread also to the extent of 38 per cent. But the wages cost in this industry, as in other indusries, is only a relatively a small item; consequently, it may be said that the increase of the price of bread would represent a greater sum than the master bakers would lose by the difference in wages. In 1920 - I speak from memory- the price of flour rose to almost as high as £22 a ton, and bread was sold at from 6d. to 6-Jd. a loaf.

Mr Thorby:

– The highest price ever received for flour was £21 2s. 6d. a ton.

Mr WARD:

– I said that I spoke from memory. A rise of Id. a bushel in the price of wheat should make a difference of only 4s. a ton in the price of flour.

The flour tax will affect the consumer of bread’ in other directions, because it will apply to wheat that is not considered fit for use in the manufacture of flour. There is bleached wheat, and that which is called “ sprung “ wheat, which is ordinarily sold to poultry farmers.

Sir Littleton Groom:

– The Minister has indicated his intention to move for the exemption of that wheat.

Mr WARD:

– I waa not aware of that. Under the bill as originally introduced, these men would not have been protected.

My colleagues and I are prepared to. assist the wheat-growers because they are in dire need; but we ask them not to take the narrow view that the provision should be financed by a tax on an unfortunate section of the community which, at the moment, is unable to protect itself. There are several methods by which the scheme could be financed. The proposal of the Government may be “characterized as a tax on the poor. If honorable members opposite can justify the withholding of bread from the wives and children of unemployed workers, I leave them to attempt to do so. They hope that this tax will be removed on the 30th J une, 1934, and that there will be sufficient time before the elections for ‘ the people to have forgotten its imposition upon their food. I assure them that the people are now aroused as they never have been previously, and that nothing will save this Government from the wrath of the workers. It is an unscrupulous Government which is prepared to use unscrupulous methods to weather the storm, and so far it has had at its mercy the one class against which its legislation has been directed.

Mr Prowse:

– I rise to make a personal explanation. Referring to the partial restoration of the allowances of honorable members, the honorable member for East Sydney (Mr. Ward) asserted that I had not the courage to vote upon that proposal and consequently left the chamber.. I remind him that I not only spoke, but also voted in accordance with my speech. As the honorable member rudely suggested that I had no right to speak on the wheat question, I thought that possibly his conscience would work in a similar manner in connexion with the taking of a vote upon the restoration of his own salary.

Sir LITTLETON GROOM:
Darling Downs

– This measure is primarily “intended for the relief of the wheat-growers of Australia. The honorable member who has just, resumed his seat (M’r. “Ward) hardly realizes that many of the farmers about whom he spoke were at one time working men. I know that in Queensland many shearers took up selections on the Darling Downs, and in other portions of the State, while they were engaged in shearing operations. They have had sufficient experience to know how necessary it is to deal sympathetically with those whom they employ.

The first point that has to be established is. the necessity for this relief. The last two measures of relief were given because of the abnormal conditions that prevailed in the industry, and that is the position at the present time. It is not conceivable that in such a big basic industry those abnormal conditions will continue. There has been a sudden’ improvement in the wool industry, after a most trying experience extending over a period of three or four years, and I believe it is only fair to assume that ultimately there will be a restoration of normal conditions in the wheat and dairying industries. What’ we have to consider is, whether the farmers are now in such a position that they require -this assistance. On that aspect I need refer only to South Australia, in which, according to the return for 1931-32, there are 18,599 wheat-growers. A special committee of the South Australian House of Assembly was appointed to investigate the position of those growers, and its report indicates what I suppose is more or less the condition of wheat-growers throughout Australia. A special table in the report shows that the aggregate liabilities of the farmers as at the 30th June, 1933, amounted ^ to £33,812,195. The following comment is made by the committee: -

The committee draws special attention to the fact that this schedule does not include moneys lent on mortgages by the private individual investor except in the case of the farmers under the Debt Adjustment and Farmers Relief Acts. It was considered impracticable to get authentic information of these liabilities. In the opinion of the committee it will probably be necessary to allow a further amount of £5,000,000 at least to cover this item, bringing the aggregate of liabilities to £38,812,195. The committee also points out the very high percentage of secured liabilities, which, of course, are directly charged upon farmers’ assets, and, apart from the secured debts to the Crown, represent moneys invested for the most part of persons outside the wheat-growing industry.

The schedule analyses the different forms of liability. Those figures reveal the enormous burden that the farmers have been, and are, carrying. Not only are they carrying this liability, but they are also suffering from the abnormal decline of prices which has seriously handicapped their operations. In the circumstances, it is obvious that some assistance must be given to the farming industry, particularly the wheat-farming section. The Government is fully justified in introducing this proposal to assist the wheatgrowers.

The next point to consider is the basis of distribution. The bill makes it perfectly clear that the proposal is to make provision for the relief of the wheat-growers and for other purposes, and clause 4 indicates the nature of this relief. The number of wheat-growers in Australia, according to the distribution of 1930-31, is 73,916, and the number of claimants last year for grants in four States, leaving out Queensland and Tasmania, wa3 70,942. Some indication oan be gleaned of their financial position from the returns furnished by the Commissioner of Taxation, which show that for the year 1930-31, 9,212 taxpayers following the occupation of farmers sent in income tax returns. There were some 73,916 wheat-growers in 1930-31, and only 9,212 farmers had taxable incomes. The whole of the industry is suffering from reduced incomes, and the returns for the following year would, probably, show a further decrease. Of the 9,212 farmers who furnished income tax returns, 3,232 were taxed upon income derived from personal exertion only, 5,276 were taxed upon incomes derived, from personal exertion and property, and 704 were taxed upon income derived from property solely. Those figures show definitely that the farmers generally are in a desperate position, and are badly in need of assistance. Of the 70,942 claimants for grants in 1931-32, 57,000 made claims for assistance not exceeding £75. Under the Government’s proposals there will be a wide distribution of the grants. Those farmers who are in need and who were in receipt of a taxable income during last year are to derive assistance under the bill. I should like the Minister for Commerce to consider the position of certain farmers who may be excluded from the provisions of the bill because of receiving a taxable income last year, and yet, strictly speaking, are entitled to relief. The return relating to South Australia shows that many of the farmers are making contributions to the State agricultural banks, - rural branches of other banks, and other financial institutions in repayment of capital advances. The definition of taxable income according to section 4 of the act is -

Taxable income means the amount of income remaining after all deductions allowed by this act have been made.

The deductions allowed by the act do not include repayments of moneys which have been advanced for capital purposes, and because of that it may be that a number of farmers who were in receipt of a taxable income last year, and- which was to some extent absorbed by interest and redemption payments, will receive no assistance under this bill. I ask the Minister for Commerce to reconsider the bill with a view to allowing the States when making the distribution to take into consideration ‘ the circumstances of farmers who, although they had a taxable income last year, are urgently in need of relief. Sub-clause b of clause 6 provides for relief in cases of hardship. In my electorate a few weeks ago, the farmers had the prospects of one of the best yields in the history of the Darling Downs; but within three days some of the crops were entirely or partially destroyed. Few people in the city realize the hopes and disappointments of those engaged in farming. A night’s frost, or a violent hailstorm, will destroy the whole of the farmer’s work of months past. In my electorate, because of a monsoonal downfall, many crops promising fine yields have been injured, and some which have not been completely destroyed are so injured as to be useful only for poultry food and other similar purposes. Had the Government had time it might have considered providing in the bill the maximum amount which could be drawn by an individual by way of relief. The farmers who apply for relief must make ‘sworn declarations regarding their income. The furnishing of returns is not relished by them. Their returns will have to be forwarded to the central office, checked, and returned, and new and highly-technical machinery will have to be provided.

This bill should meet with the almost unanimous approval of the House, and at the committee stage we must satisfy ourselves that there will be a fair and equitable distribution of the money among those entitled to assistance.

The question then is how should the money be raised. It would not be right to provide this relief by way of loan. This money has to’ be provided by the Government within’ the year to meet the necessities of the farmers for the year. The money is to be used for relief purposes, and will not be reproductive in the ordinary sense of the word. The grants will not earn interest, nor be subject to repayment. About the time of the holding of the World Economic Conference, the British Government announced that it would not agree to a world-wide policy of nations embarking on extensive public works out of loan moneys for’ public relief, and that if a loan were made ordinarily, it should include provision for payment of sinking fund for its ultimate redemption.

Mr Holman:

– I understood that the advance from the Commonwealth Bank was accompanied by an arrangement for its redemption.

Sir LITTLETON GROOM:

– The advance is to be a liability on the part of the Commonwealth Government, and the farmers who receive the money will not be responsible for its repayment. This loan should properly be met out of revenue. If it were extended over three years, as mentioned by the honorable member for Martin (Mr. Holman), we should place difficulties in the way of future budgeting. If it is possible to raise during this financial year the money that will be needed, it should be done, so that the budget for next year will not be burdened with a debt incurred to help the growers for this season. It would be a mistake now to alter the budget which was recently introducd. The contents of that budget have been published throughout the whole of the civilized world. Most countries watch each other’s budgeting fairly closely in these times, and Australia has been highly commended upon its effort to achieve financial stability. Australia’s credit has been enhanced as a result of the present budget and any attempt to vary its provisions would weaken’ our financial position. The money to assist the growers must be raised in some way, and, in my opinion, the best way to raise it is by a special tax. We recognize that this money is needed to meet an abnormal . situation. Something must be done to put the industry on a permanently improved basis, so that it will not be necessary to approach Parliament year after year for assistance. The effective organization of the industry must involve the creation of a pool, or some organized system of marketing, but that cannot be done immediately. However, the real purpose of a pool, or any other system of organized marketing, would be to raise the price of wheat consumed in Australia, so that the farmer might obtain a fair return for his , labour. It is now generally accepted that something of the kind will have to be done. Therefore, if by the imposition of a tax, a result approximately .the same can be attained, what is there wrong in that ? In the meantime, the people will have become accustomed to the idea that they must pay a fair price to the farmer for what they eat. No one should expect to feed himself or his’ family at the expense of some one else.

My. constituents are, for the most part, engaged .in. primary pursuits, the elec- to rate containing a number of large towns. In and around the city of Toowoomba, for instance, there are nearly 30,000 people, but every one, of them realizes that his prosperity depends directly upon the prosperity of the .pastoral and agricultural industries.’ Let, those industries suffer, and the volume , of employment will decline, and wages will fall. I am confident that the working men in my . electorate will not object to i paying a trifle more for their -bread if that sacrifice is necessary in order to ensure the continued prosperity pf .the- industry upon which they depend for a”, livelihood. The rapid fall of prices for- dairy products was followed by ra’ decline in business, and by consequent’ .distress.. The . workers, therefore, will recognize that the prosperity of the rural industries is his prosperity and that their adversity is his adversity.

I do not think that the oratory of the honorable member for Henty (Sir Henry Gullett) this afternoon will greatly impress the people. I was sorry to hear Lim speak in the way he did regarding the quality of the meat eaten by the working classes in Australia. I speak only for my own district, but I know that the working classes in Queensland are getting meat of better quality than any I saw served on the tables in Europe when I represented Australia at the meeting of the League of Nations in Geneva. » The Government is to commended for having introduced this measure for the relief of the farmers, and also upon its proposal to institute an inquiry into the wheatgrowing industry with a view to placing it upon a footing of stability. The Government is wise to stand by a principle of sound finance. This tax may not be popular, but it is better for a policy to be unpopular than economically unsound.

Mr HOLLOWAY:
Melbourne Ports

– I support the first part of this measure, which provides for rendering assistance to the wheat-growers. The Labour party has always been, and still is, in favour of the wheat-growers and other primary producers receiving a payable price for their products. I am, however, strongly opposed to the second part of the bill, which provides for the imposition of a flour tax, or a tax on bread. In effect, this will mean that the taxation which was recently remitted to the wealthy interests of Australia and oversea shipowners will be placed upon the shoulders of the poorest classes of the community. I disagree with the statement of the honorable member for Darling Downs (Sir Littleton Groom) that the speech of the honorable member for Henty (Sir Henry Gullett) consisted only of platitudes.

Sir Littleton Groom:

– I did not say “ platitudes.”

Mr HOLLOWAY:

– I say that the honorable member for Henty delivered some very shrewd criticism of the Government’s policy. We should endeavour to learn the cause of the difficulties which confront the wheat-farmers so that we may evolve a plan for putting the industry on a permanently improved basis. Temporary measures of this kind merely shift the incidence of taxation from one group to another. The effect of the flour tax will be to relieve the Commonwealth Government of part of the responsibility for helping the wheat-farmers, and place it on the State Governments, which are responsible for feeding the inmates of prisons, asylums and other institutions supported by the State, and thus diminishing the amount available for unemployed relief work. I agree that it is necessary to provide immediate relief for the wheat-growers, but, that being ‘done, we should investigate the industry with a view to rendering the periodical granting of such assistance unnecessary. It seems to be generally recognized, even by the representatives of the wheat-growers themselves, that there is no prospect, within the next few years, at any rate, of wheat prices returning to anything like their former level. Neither is there any prospect that Australia will regain the whole, or even a substantial part, of its export market. I am strengthened in this opinion by the figures issued as a result of the last world survey of agriculture made by the Geneva office. The most notable feature of recent years has been the wonderful increase in the wheat production of the importing countries to which we formerly looked for a market. Several countries which formerly imported wheat, now produce their own requirements in this respect. There is no hope of our getting back our overseas markets unless, or until, there is a general raising ofthe standard of living throughout the world. We cannot hope to put the industry on a proper footing by attempts to raise the price of wheat by artificial means. There is only one legitimate way of raising prices, and that is through a natural increase in the demand for the commodity concerned. All over the world to-day there is a falling-off in the demand for wheat and other primary commodities, due to the reduced spending power of the mass of the people. World trade has declined by one-third since 1929, but, apart from that general decline, Australia’s overseas wheat market has been injured by the factthat the importingcountries haveso greatly increased thevolume of their own wheatproduction, as thefollowing table shows: -

The importing countrieshave thus increased their productionof wheat by 70,000,000 quintals in the . last fewyears, representing somuch loss to the trade of exporting countries like Australia.

The total production of both exporting and importing countries has been about the same each year.Thereason is that countries’ which usedtoexportthe great bulk of theirwheat are now. satisfying their own domestic requirements: It can be seenfrom articles which appear regularly in the press that bounties are being paid by the Italian Government on wheat productionandthatthe German peopleare practicallyprohibited by law from eating wheatenf oodsbeing com pelled to use the productsof rye and wheat when produced in Germany. Everything has been done to bring about the self-sufficiency of thesecountries. We, in Australia, must look inward, and build up our own country. It is of no use to complain about thenationalism of other countries ; we must follow theirexample. We must help toextend, and not restrict, the market for our primary products. Itis of no use to raise prices artificially by taxingthe people, as that lessens the demand for a product by decreasing the” spending power of the people. . Here is another passage from the world survey issued from the Geneva office showing the result of the efforts of the countries already referred to, during the last three: or four years -

In the sixteen months after the 1st September, general tariff increases have beenimposed in 23 countries, in threeof them twice during that period, with only one case of ageneral reduction.

That is interesting, because many honorable members, particularly of the Country party, complain about Australia having a protectionist policy. They think that because Australia has a high protectionist policy primary producers are being injured, and they base their belief on the assumption that this is the only country with such a policy, and that others have taken the opposite course. The article continues -

Customs duties had been increased on individual items or groups of commodities by 50 countries, in most cases by a succession of enactments which, in several countries, numbered over twenty tariff changes in the sixteen months. Import quotas, prohibitions, licensing systems and similar quantitative restrictions, with even ‘more frequent changes in several important cases, had been imposed by 32 countries. Import monopolies, for the most part of grains, were in existence in twelve countries; milling or mixing regulations in sixteen others. Export premiums were being paid in nine, while export duties or prohibitions had been imposed in seventeen.

Mr Gabb:

– That merely aggravates the economic position.

Mr HOLLOWAY:

– That is no reason why Australia should be the Cinderella, and stand out of the business. Why should this country be a dumping ground for the goods of other countries? The future hope of this and every other country is to build up its home market. My reason for quoting that statement is to try to show that the restrictive policy that we have been adopting is wrong; that every time we reduce the spending power of the people by imposing a flour tax and the like, we lessen their ability to purchase wheat, flour, and associated products.

I believe that all honorable members are in favour of helping the wheatgrowers, but those on this side believe that it should be done in a direct way, from general revenue or by an issue of credit by the Commonwealth Bank a3 was proposed by the Scullin Government. The Attorney-General (Mr. Latham) said that the man in the street has not objected to the imposition of a flour tax. The reason is that until a week ago honorable members on all sides had assured the general public that there was no possibility of a flour tax being introduced. We know that a few days ago members of the ‘Government were unanimously against such a proposal, and that even to-day the proposal is accorded only a 50-50 support by Ministers. My colleagues and I believed that when the Government spoke about relieving the position of pensioners and others who suffered under the financial emergency legislation, and even when it was proposed to assist wealthy interests which did not come under the financial emergency reductions, we need not have the slightest fear that a tax would be imposed on flour.

The reason why the Attorney-General has not heard any complaints from the general public is that they do not yet realize what is contemplated, but the reaction will quickly set in. The Government could not have done anything worse than impose this class taxation. It is of no use to blame the baker for any increase in the price of bread. He will exploit the public, but principally because the miller will insist on his doing so. If it were not for the millers’ combine, there would be healthy competition among bakers and bread would be sold at a reasonable price. It is useless to say that bread will not be increased in price, for that has happened already.

My party has always contended that wheat-growers should follow the lead set by others and organize. They could then establish a compulsory pool and allow the Government, or a board, to market their product, regulating supplies as deemed desirable, and thus obtaining the best possible results from the international market.

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– Would that make bread any cheaper?

Mr HOLLOWAY:

– If that were done under proper legal sanction, clauses could be provided in the relevant legislation to prevent exploitation of the people. In any case, if the price of bread were increased legitimately, there would be a consequential increase in the standard of living, and the price of wheat would be adjusted accordingly.

Mr Thorby:

– If that were so, its price would be 6s. a bushel.

Mr HOLLOWAY:

– The public would make no complaint even against that price provided the standard of living were adjusted proportionately. If wages were increased, no one would cavil about a slight increase in the price of bread. But I object to prices being raised arbitrarily in this manner without a simultaneous increase of wages. The least that the Government should do is to see that wages are automatically adjusted simultaneously with the increased price of bread. It is of no use for the Attorney-General or the Prime Minister (Mr. Lyons) to say that the Government cannot make suggestions to the Arbitration Court. The judges have said repeatedly that those in another place, meaning this legislature, should give the lead when important changes are to take place.

Mr Thorby:

– Does the honorable member suggest that wages should be adjusted to the price of wheat?

Mr HOLLOWAY:

– I suggest that the price of wheat should be adjusted from time to time to the level of wages and other factors in the cost of production.

Mr Thorby:

– We will accept that.

Mr HOLLOWAY:

– We say the same thing in regard to sugar.” We say . that the jam manufacturer who has to pay the Australian price for his sugar shall not be subjected to unfair competition by the jam-maker who has not to pay a similar price. We say that to every exporter, and why should we not say it to the men who grow wheat?

Mr Thorby:

– Will the honorable member support the application of sugar industry conditions to the wheat-grower?

Mr HOLLOWAY:

– Why should I not? The platform for which I stand does not discriminate between one industry and another. It never has done so. Let the wheat-growers follow the example of the sugar-growers and organize, and let them ask the Government to assist them by giving them the backing of law. The relations of all parties to the industry would thus be automatically .adjusted. We are opposed to this artificial raising of the price of Bread; we are opposed to taking taxation from the shoulders of those who are well able to pay it, and transferring it to the shoulders of the poorer section of the community. That is not only unjust but is against all the accepted principles of equitable taxation, which seek rather to place the burden on those best able to bear it. When the honorable member for Calare talks about applying sugar industry conditions to the wheat-growers, I say to-him “ Do not pull the sugar man down, but lift the wheat-grower up.”

I have not heard anybody object to the first portion of this legislation. When we ask, “ Is there a reason for helping the wheat-grower?”, everybody replies, “ Yes.” But it is wrong to continue dabbling with the problem season after season in this unscientific way. Th, practice has been in vogue now for two or three years. There is no possible hope of any immediate recovery in the price of wheat. Nor will the quantity of wheat exported from Australia ever be restored to what our export was at its peak. But the price of wheat will eventually rises because all the world’ realizes the need for making it rise. The transference of taxation from the wealthy to the pooest section of the community is absolutely wrong. It is the most damnable thing which has been done in this country.

Mr SCHOLFIELD:
Wannon

.- If honorable members have the interests of the wheat-grower, at heart, as they profess to have, they will not continue to reiterate what has been said here a hundred times.

Mr Holloway:

– Then the honorable member should not join the band.

Mr SCHOLFIELD:

– I will not, but I have a few things to say which have not been said previously. All are agreed that the wheat-growers are in’ need of assistance. When we ask ourselves why the Government should come to their assistance, the reply is that they are an exporting body, and that we must maintain our exports. The honorable member for Melbourne Ports (Mr. Holloway) has just explained that lack of consuming power is responsible, for the glut of the wheat market. To a certain’ extent, that is so.. But a great deal of that glut is due to thehigh tariffs that obtain all over theworld, and to international debts. Different countries of the world are ‘endeavouring to adjust their trade balances by means of increased exports and less imports. Consequently, we find “that countries in Europe which a few years ago did not produce wheat, areto-day grow- ingwheatunder high import duties. Indeed,some of these countries areexporting wheat. That fact must cause aglutin the principal primary producing countries, and thatis one of the reasons why we are not able to geta reasonable price for our wheat.

We should also remember that those who provide assistance to the wheatgrower, namely,the workers of thecommunity, have themselves been assisted by the same tariff whichhas proved a burden to the producer. It is only right that the wheat-grower should get some recompense for theburden that has been imposed upon him.

I am not quite in favour of the distribution of the relief proposed upon an acreage basis. I should like to see that relief distributed on a 25 per cent. production basis, and a 75 per cent. acreage basis. Of course, I know that that is mainly a matter forthe States to determine, but as the Commonwealthis allotting the money on an acreage basis I should like to knowthat the amounts were allocated on a25 per cent.production basis, and a 75 per cent. acreage basis.We can, however, safelyleave it to the States to distribute the money amongst those who most need it.

The Government.is quite right in dis- criminating againstpersons who are not in need of assistance. The Country party has raisedcertainobjectiontothatprocedure,butI know of one member of thatpartywhois in agreement with that provision, despite thefact thathehas expressed his disbelief init. Hetoldme that last year hedidnot take the bounty payable to thewheat-grower, notwithstanding that he grew wheatthat year. In that statement headmittedthe justice of the principle which is embodiedin this bill. Itis a big admissionto come from a wheat-grower. Takethe case ofa big land-owner, who produces a large quantity of wool, in addition to growing wheat. I do not think that he shouldhave any of this money.Duringthenext twelve months thoseengaged inthe production of wool willbeinafairlygoodposition, and it isnot right totakefromtheneedy wheat-growersmoneyof whichtheyare absolutelyinneed, togiveittothosewho are not in need of it. Therewillonly bea certainamount available, and, if it is to bedistributed amongst those who do not needit, obviously there will be less for distribution amongst those who do need it.

Idonot like the proposal for the imposition of a flour tax. But, whilst I agreewith many of the statements that have been made in opposition to it, I do not think thecase against it is as black ashas been represented by the honorable memberfor Henty (Sir Henry Gullett) and the honorable member for Melbourne Ports (Mr. Holloway). The honorable memberfor East Sydney (Mr. Ward) has condemned the wheat-farmers for their treatment of their employees. Most wheat-growers have all their lives been hard-working men. Their position to-day is due to the fact that theyhavebeen thrifty, and have worked far longer hours than their employees. They rise in the morning and do nearly half aday’swork before their employees are obliged to j oin them, and, when the employee hasfinished his labours, the farmer’s probably continue their work untilnear midnight. These conditions exist,and I knowthat farm employees aretreated aswell as the workers in any otherwalk oflife.

Would there bean equal outcry against the rise in the price of bread,if wheatrose to a reasonable price, andflour was realizing £13 a ton? Insuchcircumstancesthe price of bread wouldnaturally be increased; but I doubt if we shouldthenhear any such outcry,as we now hear against the price of bread.Ihavespokento many personswho are working forwages, and who realizethat, under the Gpovernment’s proposal,the price of breadmust be increased to a certain extent. These men donotlike thatincrease;nobody does; but they are not so unreasonable as they havebeen representedtobe. I do not think the publicwill besostrongly in opposition tothe increased price of bread as hasbeenrepresented. Iam in entire agreement with the Government in its proposalsto appointaroyalcommission toinquireinto the conditions that obtain intheindustry fromwheatto bread. A dealofwasteundoubtedly occurs in the distributionof bread.Everyhonorable member knows ofcasesinwhichbakers’ carts follow each other about in the early hours of the morning - cases in which six carts are employed where one would be sufficient.

An Honorable Member. - Socialize the industry.

Mr SCHOLFIELD:

– I do not agree with socialization. We have too much socialization already. I am not in favour of any proposal to assist different sections of the community by means of government help. ,The position that has arisen in the wheat industry, the dairying industry, and the potato industry, has been, brought about by abnormal conditions. We can trace those conditions to the recent world war and the enormous over- , seas debts created by many nations, and. also to the frantic efforts of those nations to secure trade. In such an abnormal period we must do something to keep our export industries producing, but I cannot say that I am not In agreement with the principle underlying the method that is proposed in this bill.

In conclusion, I think that, as soon as possible, the Government ought to give each primary industry the right to control its own affairs. The dabbling by governments in business of which they know nothing is responsible for a great amount of dislocation of trade and loss. We have had instances of that in the different industries which have been empowered to run their own business, and which have made a success of it. As soon as possible, the Government should entrust other industries to those who are engaged in them, and get out itself.

Mr PROWSE:
Forrest

.- I ha.ve listened very patiently to the debate on this bill, which provides for the granting of assistance to wheat-growers. The wheat industry is a valuable national one, and on two notable occasions the Commonwealth Government has urged upon those engaged in it the need, as a national and patriotic, obligation to produce a greater quantity of wheat. During the war period, when the nation was in dire peril, a great appeal was made to the wheatgrower of Australia, and it is admitted Try all - as the records will show - that he responded nobly to that call. He produced a record quantity of wheat, but could exercise no control over it because the then Prime Minister of the Commonwealth (Mr. Hughes) had the power under the War Precautions Act to. dispose of it without consulting him, and; it was sold to the Empire at one-third of its commercial value. In that way, thewheatgrowers of Australia conceded to. the nation at least £140,000,000, which represented approximately the differencebetween tho value obtained by othernations and that which was obtained by Australia. I submit that an industrycapable of doing that, is extremely valuable to Australia.

I come now to another very trying period in the history of Australia, when its credit was stopped, and it was no longer able to borrow. The then PrimeMinister (Mr. Scullin) appealed to the’ wheat-farmers to grow more wheat, and in an official statement, said-

This is an industry that most readily responds to national need, and by exporting,’ establishes credits abroad.

The growers also responded to that appeal: but although they were assured that they would be given a fair price, they did not receive it.

This industry differs materially from . the majority of Australian industries. During the last ten years, it has not only supplied the people of Australia with wheat more cheaply than it could have bought from any other country, but by exporting wheat and flour to the value of £230,000,000 has also established necessary credits abroad. As the honorable member for Darling Downs (Sir Littleton Groom) has said, there are about 70,000 growers, and it provides employment directly for over 220,000 persons. Indirectly, it is responsible for the employment of many thousands more. The Chief Commissioner of the Victorian Railways has said that he is unable to estimate the financial result of the operations of the system that he controls until he knows what results are likely to be obtained -by the wheat industry. No assistance is given to the industry. True, there is the protection of 2s. per cental against importations; but the only ‘ year . since its imposition in which, it, .would have, been of any value was 1914, when, in the interests of the consumers of Australia, it was suspended. I ask honorable members who take exception to the imposition of a sales tax on flour, and who consider that the wheat industry is of little importance to Australia, to imagine what the position would be if wheat were not grown in this country. The cost of importing wheat, free of duty, would be approximately 5s. a bushel. As that money would go abroad, the Australian consumer would be in a much worse position than that in which the flour tax would place him, because the co3t would be £3,000,000 greater than that which is involved at the present price of wheat in Australia. I have been a member of this House for fourteen years, during which period I have frequently listened to the claptrap of honorable members who support- big industries like the iron and steel industry. The wheat industry has been a much more important factor in the stimulation of employment in cities, and the development of secondary industries, which are a distinct hindrance to it and a burden upon it. No one should regard it as a mendicant. It has a claim upon the rest of the community which can be sustained on scientific grounds. On many occasions the Government of the Commonwealth has called in expert advice. The BrucePage Government invited four expert gentlemen to come to Australia from Great Britain. The gravamen of that Economic Mission’s report was that the development of secondary industries in Australia laid an intolerable burden upon the export industries, and that Australia had attempted too much. The mission did not specify the extent -of the burden placed on export industries, but five Australian economists, who offered their services to the Bruce-Page Government for an examination of the effect of the fiscal policy of Australia, have done so. In their opinion, the development of secondary industries under the Pratten tariff handicapped export industries to the extent of 9 per cent. I understand that Professor Copland has assessed at 16 per cent, the handicap under the Scullin duties and embargoes. Surely an industry of such national value as the wheat industry, which has been such an important factor in the development of secondary industries, has a claim upon the community generally ! Sir Otto Niemeyer, a , gentleman of world-wide economic and financial experience, who was brought to Australia by the Scullin Government, also made the statement that the development of secondary industries in Australia laid a substantial burden upon our export industries. I have before me an excellent report by Dr. A. C. V. Melbourne, of the Brisbane University, who has come to the same conclusion. In it he says -

The growth of manufacturing cities has been rendered possible by a protective tariff which facilitates the maintenance of a high standard of living, raises costs throughout the country, and imposes serious disability on primary producing industries.

That is the statement of one who is qualified to examine the situation impartially. Further on he says -

The gold discoveries affected many people who failed to find employment in existing industries. To provide for them, protective tariffs were adopted. Manufacturing industries were gradually built up and the new migrants were absorbed. Consequently, long before the population of Australia was numerous enough to justify an entry into largescale production, manufacturing industries were organized on a non-competitive basis. The cost of living was raised throughout the country and the primary industries, which derived little profit’ from protection, were forced to pay higher prices for all equipment and stores . . . The burden has been increased by the general humanitarianism of Australian legislation. The maintenance of a comparatively high wage standard, and the general reduction of hours of work, have so raised the cost of production in manufacturing industries that Australian manufactured goods cannot be sold in competition with the manufactured goods of other countries in the neutral markets of the world. Consequently, goods exported from Australia are produced almost entirely by the primary industries, although these also are burdened with high costs incidental to the protective system and high cost of wages, the high cost of equipment and stores, the high cost of internal and postal transport. In fact, in these days of failing prices, Australian primary’ industries are finding it increasingly difficult to pay their way.

I should like honorable members to consider the position that Australia would occupy were it not for the exports of primary industries, which represent 97 per cent, of our total exports. What has brought about the depression if it has not been the fall in the prices of our export commodities ? What is responsible for the brighter outlook to-day if it is not the rise that has occurred in wool values ? Had the prices of our exports remained up, there would have been no depression. Why was it that, when the wheat industry failed, and wool prices dropped below the cost of production, the iron and steel industry did not send its products abroad, and thus provide funds with which Australia could meet its commitments? Why did not the boot or other industries act in a similar manner? These industries cannot export because their production costs are too high. Without our production for export, 97 per cent, of which is primary, the secondary industries could not survive.

Mr Fenton:

– That is not so.

Mr PROWSE:

– The honorable member is totally obsessed by the protection policy, and he has the temerity to place bis opinion against those of experts. Wheat is being sold to-day at ls. a bushel below the cost of production, yet the only expression of sympathy in this House for the man on the land is the shedding of crocodile tears. No heed is paid to the request of the primary producers that their requirements in respect of goods manufactured in this country should bear some relation to the price which they receive for their product ; and when the Government proposes a small flour tax, which will not by any means bring the price of wheat to the cost of production, there is an awful cry about the poor man’s bread. In the interests of this country, every honorable member should be on his knees praying for an increase of the price of wheat to 4s. 6d. a bushel, which is not by any means high. In Germany and France, the price of wheat is 9s. a bushel. Not only do the wheat-growers of this country have to sell their wheat in competition with the other countries of the world, but they are also penalized by the fact that the insular fiscal policy of this Government has made enemies of our natural customers. Consider the manner in which we have treated Belgium, a country which is purchasing £10 worth of goods from us for every £1 worth of goods which we purchase from it’. France, another nation which we have offended, purchases £9 worth of goods from us for every £1 worth of goods which we purchase from it. We cannot blame those countries for taking retaliatory measures. Had we shown a spirit of reciprocity, they would have provided markets for our products. Trade is necessary for the development, npt only of this country, but also of the rest of the world. Had we shown a spirit of reciprocity to France, Italy, and Egypt, they would still have been prepared to buy our flour on a free-trade basis.

An objectionable feature of the bill is the discrimination clause, which provides that only those wheatgrowers who were not in receipt of a taxable income last year, are to receive assistance. During the last four years, the wheat-growers, in their efforts to develop their industry for the good of this country, have lost £80,000,000 of their capital, they feel that without assist- ance they cannot continue. If this is to be regarded as a national industry, it should be treated in the same way as the secondary industries have been treated. When the iron and steel industry has been seeking protective duties, I have never heard any honorable member state, for instance, that the Broken Hill Proprietary Limited had exhausted its capital, and was failing in its efforts to compete in the markets of the world. That industry has received more than favorable treatment at the hands of this Government, and at the same time it has been able to show big profits. When evidence is given before the Tariff Board that a certain secondary industry is making a profit of 10 per cent., that is thought to be fair and reasonable; but let me inform honorable members that the wheatgrowers are not making any profit. The farmers of Western Australia are utterly discontented. That State produces for export £37 worth of goods per head, while the Commonwealth produces for export only £15 worth of goods per head. Western Australia has five representatives in this chamber, while Melbourne and its suburbs, which produce for export not one ls. worth of goods per head, has ten representatives. Why not lighten the burden upon the primary producers who are making possible the development of other industries in this country? The honorable member for Martin (Mr. Hol- man) has said that we must prevent the wheat-growers from starving. That is the lofty standard that he sets up for the man who makes it possible for him to live in this country. Several honorable members have shown that the fall in the price of wheat has not been accompanied by a decrease in the price of bread, and that when the price of flour was the same as this additional tax will make it, bread was much cheaper. In 1920, when the price of wheat was8s. 7. 2d. a bushel, and of flour £18 15s.11d. a ton, the retail price of bread was 5.9d. In 1922, when the price of wheat was 5s. 8d. a bushel and flour was £1211s. 9d. a ton, the price of bread was 4.7d.

Mr Watkins:

– And wages have since been reduced.

Mr PROWSE:

– That is so. Honorable members do not seem to have sufficient interest in the wheat-growers to pass a resolution asking the State Parliament to take some action to ascertain who is sponging on the community in respect of the price of bread. Is the baking industry to be placed above the wheat industry? Which is the more valuable to this country? The representatives of the wheat-growers of this House have received numerous telegrams from farmers’ associations protesting against the exercise of discrimination in the distribution of the wheat bounty. The wheat growers would be making no request for a bounty were it not for the load that they have been carrying for years past. The price of everything that the farmer uses has been increased. Even the price of certain fencing netting has, since the depression, been increased by £2 10s. a mile. In this country the price of an axe handle is 4s. 6d., whereas in other countries it is about1s. When the farmer cannot get more than 2s. a bushel for his wheat it makes one wonder whether he has any genuine sympathizers in this House.

Mr Lane:

– Why do not the growers stabilize the industry?

Mr PROWSE:

– The right honorable member for Worth Sydney (Mr. Hughes) who, last night, made a semi-humorous speech, introduced, during the war, a system of compulsory pooling under the WarPrecautions Act; but after the war he refused to continue it, notwithstanding the representations made to him by wheatgrowers throughout Australia. In consequence, the farmers had to start voluntary pools and then difficulties arose in respect of the arrangements for shipping. There was competition for charters and the scheme was not so effective as a compulsory pool. I have always been in favour of the organization of industry, and of the establishment of a basis of equality in regard to both secondary and primary industries. When the proposed inquiry has been made into the industry, honorable members will most likely have an opportunity to assist in the establishment of a marketing scheme which will enable the growers to control their own industry. While he has to pay an Australian price for what he buys, the wheat-grower is entitled to receive an Australian price for what he sells. That is only fair. I am sorry that the whole of the money which is to be devoted to the relief of the wheat-growers is not to be raised by means of a sales tax on flour. I agree with what the honorable member for East Sydney said, that there should be a close inquiry into the operations of the millers and bakers, in order to prevent the exploitation of the public. I believe that, under a proper system of control, it ought not to be necessary to raise the price of bread at all. In Western Australia, where a contract was let for the supply of bread for the unemployed, it was produced at l1/2d. a loaf less than the current retail price. Something must be done to save the wheat industry, which is the greatest employer of labour in the country. If this industry goes to the wall, how are we to find employment for our workers? As the honorable member for Gwydir (Mr. Abbott) said, though the wool industry may bring more wealth into Australia, the wheat industry is of greater value, inasmuch as it provides more employment, andthe returns from it are more evenly distributed.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– It requires no special pleading by the honorable member forForrest (Mr. Prowse) to make honorable members realise that something should be done to help the wheat-farmers.Previous governments have taken into consideration the claims of the growers, and have provided relief in various forms. There is a danger, however, that if the Government is not careful these temporary palliatives may develop into a permanent burden on the taxpayers. Last year, the wheat industry was given relief to the extent of £2,000,000, while farmers, other than wheat-growers,benefited by a subsidy of £250,000 on artificial fertilizers. This year, a sum of £3,000,000 has been provided for the relief of wheat-growers, but farmers other than wheat-growers are receiving no consideration whatever. They, too, are deserving of assistance; but, probably because they have failed to make the necessary representations, they have been forgotten by the Government.

Honorable members who have addressed themselves to this bill have not opposed the granting of assistance to the wheat-growers, but have taken advantage of the discussion to criticize the methods by which it is proposed to grant that assistance. The present position of the wheat industry can be traced back to events arising out of the war, when, as a result of high prices, the wheat producing countries were encouraged to increase their production. The average production of wheat in Russia over the period from 1909 to 1913, was 758.3 million bushels. Production, however, did not again reach that quantity until 1925, when 782.3 million bushels were harvested. Since then production has increased rapidly until, in 1930, it amounted to the enormous total of 1,083 million bushels. “World production of wheat during the last three years has increased by 300 million bushels, or twice the amount of Australia’s exportable surplus during the year of her record harvest. Such countries as Germany, Italy,and France, whicha fewyears ago imported large quantitiesof wheat, have, since the war,sodevelopedtheirnationalagricul- turalpolicies that they,arenow,for the mostpart, self-supportingin respectto wheat,while someofthem actually have exportablesurpluses.They learneda lessonduringthewar andresolvedthat never again wouldtheybedependent upon outsidesupplies.Theyhavebuilt huge tariffwallsabouttheirwheatindustriesthathavebeeninstrumental in forcing the price of wheat to unheard of levels. One can hardly approve of the action taken by the governments of these countries when one considers the effect it has had upon the living conditions of their people who, in many instances could not afford to eat wheaten bread, and had to be content with bread made from rye, potatoes, or maize. It has been suggested that if they desired to increase consumption of wheat they should have encouraged their people to revert to the use of wheaten flour.

Notwithstanding the fact that the importing countries were pursuing a policy calculated to increase their own production of wheat, the exporting countries did not reduce their acreage ; on the contrary, they increased it. Australia is a fair example of that, because, between1920-21 and 1930-31, we doubled our wheat acreage. The growers here might well have read the writing on the wall, but neither in Australia nor in any other exporting country, was any attempt made to restrict production. The consequences are now being felt. In order to retrieve the position, it will be necessary not only for the producers to organize through the Imperial committee, but also for the growers in each country to organize their own industry so that they will produce just enough, and not too much.

Mr Nock:

– Nature may upset all their plans.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Nature may upset the plans in one country, butif there is a bad season here, there will be a good season somewhere else, and the average of production will be maintained.

When the collapse came, steps were taken in most of thewheat-exporting countries to safeguardtheinterests of the growers.InCanada, wheat pools were: established which accumulated enormous stocks of wheat. TheFarm Boardin theUnited StatesofAmerica didthesamething, withtheresultthat the market, already glutted,became completely demoralized.SirHerbert T.Robson, president oftheLondonCornTrade Association, in an article in the North West Miller, suggeststhat too muchattention has been directedto over-production, and notenoughtounderconsumption.He pointsoutthatuptothe31stJuly1929, theoverseasmovementsofwheat amounted to 24,860,000 tons, but that up to tho 31st July, 1933, overseas movements amounted to only 16,473,000 tons -a decline of 8,387,000 tons. This enormous decline was, he said, due to underconsumption rather than to overproduction. He forgot, however, to take into account the fact that an important contributing cause was the increased production of wheat in the former importing countries. This must have affected the overseas movements.

The governments of the various wheatproducing countries tried to protect their producers by establishing pools and other systems of marketing, but they failed to take into consideration the fact that, as prices fall, production decreases, and consumption increases. That is an economic fact that cannot be gainsaid. The many authorities state that the Canadian Wheat Pool and the Farm Board of the United States of America by their method of holding did not allow the “ natural action of the reduced acreage to take place as a result of the decline in price. The result was a huge accumulation of surpluses which Broomhall, in his report, says reached the huge amount of 16,000,000 tons up to July last. He comments that it was sufficient to supply Europe with foreign wheat until the next harvest.

Now let mc examine what effect these pools have had on prices, taking first the American Farm Board. The price for near delivery fixtures at Chicago after the Farm Board had begun to operate was as follows: -

In March, 1933, when most of the Farm Board holdings had been disposed of the price was 49 cents, while by the 17th July, 1933, it had increased to 116 cents. When the Farm Board holdings had decreased the natural tendency was for the market to re-assert itself and speculative enterprise once more to come into its own.

Mr NOCK:
RIVERINA, NEW SOUTH WALES · CP

– The crop failure was accountable for that.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– There was certainly a definite advance of price due to the bad crop, and the financial policy of the new President, but even before those considerations came into being, the price had increased to 101 cents.

Mr Thorby:

– Does tho honorable member suggest that the holdings of wheat brought down prices?

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I definitely do, and I am not alone in the opinion. I shall again give the honorable member the opinion of the Imperial Economic Committee on the subject. .

Mr Thorby:

– I am not concerned about that.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The honorable member is concerned only about his own opinion. I shall give the opinion of the experts who investigated the world position. At page 80 of the evidence taken by the Imperial Committee there appears the following : -

There is little doubt that the board’s early operation by withholding some 60,000,000 bushels from the world’s markets prevented a decline of prices oven more serious than that which occurred. But thi3 temporary relief was gained at the cost of the future. Commenting on the situation in December, 1930, issue of Wheat Studies, the Food Research Institute remarked, “We suspect, apart from unforeseen developments, that the 00,000,000 carry-over of the Stabilization Corporation will injure the farm price during 1930-31 more than it helped the farm price during 1929-30 “.

There is an authority of which the honorable member will probably take notice. In further support of my contention I shall quote from the Norris Market Re-, view, of 31st October, which, commenting on the Roosevelt plan, states -

President Roosevelt’s courage stamps him as one of the greatest leaders the United States of America has produced, but he is apparently allowing himself to be influenced more by theorists and “ professors “ than by practical policies of experienced business leaders. He would, we think, be better advised if, instead of still further hampering and restricting exchange trading he were to adopt a bold policy of restoring it to its pregovernmentalintervention era, free of all encumbrances, supervision, restriction and interference, in which traders, speculators and investors could operate freely and so provide for the agriculturist that broad, open market which served - and paid - him well in those days before the Farm Board and other politically inspired experiments brought ruin, impoverishment and low farm prices in their train. Erratic and big price fluctuations are born -of nervous trading on narrow restricted markets, a general expansion of interest and trade would doubtless minimize those movements.

The majority of authorities throughout the world have come to the conclusion that the debacle which we have witnessed in the wheat exporting countries has definitely been brought about by the threat of this immense holdover of both the Northern American wheat organizations. The Canadian “Wheat Pool affected the proposition of wheat actually shipped from Canada, and I hope that the honorable member for Riverina (Mr. Nock) will take notice of this because though he may disagree with the authorities that have indicted the Farm Board of the United States of America, surely he will give consideration to a similar happening in Canada. I shall quote an extract from a survey of the position just received from London, showing bow the unshipped carryover of Canadian wheat mounted up through the holding-back policy of the pool. Concurrently, of course, the percentage of surplus shipped declined. In tho year 1922-23, the proportion of the surplus wheat shipped from Canada was 89.1, the figure for 1927-28 having dropped to 77.8 per cent, which was the pool accumulation year, while in 1929-30, the figure was 59.8 per cent. Surely those things are not purely coincidence? I put it that the situation revealed by this table was serious indeed for Canada at that time.

I have also been reading the opinions of authorities concerning Australia’s participation in the wheat agreement, and they bear out the points that I have been trying to make. Wonder is expressed at Australia having bound itself by this agreement to help Canada and the United States of America to get rid of the wheat surpluses that they had been holding, and the opinion has been expressed that those countries should have been compelled to ship their surpluses at the best price obtainable without bringing in Australia and the Argentine. It makes one wonder whether, at the end of this two year’s agreement, it is the intention of the wheat exporting countries to maintain the production of a surplus with the assistance of Government grants, or to allow the market to adjust itself by natural means which will force out of production marginal areas Those engaged in wheat-growing should be compelled to organize their industry just as is done in secondary industries. I feel that until such time as the wheat industry gets down to a definite organized policy, no good will come out of these temporary palliatives, which often tend to degenerate into permanencies. In support of my contention, I shall refer to the increased acreages that have been sown in Australia, and the decreased crop results. Over a period of years, they are as follows: -

I know that many other factors besides the increased acreage have caused the decreased crop average, but I state definitely that it is partly due to the cultivation of marginal areas that should never have been placed under wheat cultivation. Honorable members have themselves stated time and again that these marginal areas must be ta.ken into consideration. If they will insist upon scrapping uneconomic secondary industries, they must understand that our uneconomic primary industries must also be put through the hoop. Until recently the three nations I have mentioned - Germany, France, and Italy - were purchasing a considerable portion of Australia’s surplus wheat. That market is now definitely closed to us. Here I should like to quote from the Economic Conference report the following statement by the Right Honorable S. M. Bruce: -

If the iudustria.1 countries of Europe maintained their present policy of developing their agriculture, it would be hard indeed to solve the problem. The adoption of intensely nationalist policies, designed to allow national producers to meet national needs by the industrial countries of Europe, was one of the main causes of the agricultural depression. An example was the stimulation of internal production by prescribing the consumption of a very high percentage of home-grown wheat. The French quota for the consumption of home-grown wheat had risen from 97 per cent, in 1930 to 100 per cent, in 1932, and the German quota from 55 per cent, to 97 per cent, over the same three years.

There is no doubt that this nationalist agricultural policy on the part of the nations which were purchasing Aus- - tralia’s surplus wheat has definitely reacted to the detriment of our export.

Now let us look at the Eastern market and see what possibilities present themselves there. Within the last few months, America by means of her subsidized export surplus, has sold 25,000 . tons of wheat to China at 8s. a ton lower than the Australian price. That sale has had a tendency to close the Eastern market to us. Indeed, it might be used as one of the chief reasons for granting a subsidy to the industry. But that subsidy should not come from the Government.

Mr Thorby:

– Have we ever suggested subsidizing exports ?

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– If a compulsory pool is established we cannot do anything else. It would be the natural thing in the circumstances. It is what has happened in other countries, and what will happen in Australia. We would hold for high prices

Mr NOCK:
RIVERINA, NEW SOUTH WALES · CP

– The Canadian Pool is a voluntary one.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The American Farm Board, I affirm is definitely a compulsory government pool.

I was hopeful that the international wheat agreement, into which we recently entered, in conjunction with decreased taxation, foreshadowed by our recent budget, would loosen the market considerably. It has not done so, and, in the circumstances, I feel that a certain amount of relief should be granted to the wheat industry. But the question arises, “ Who shall partake of this relief, and what shall be the amount of it ? “ The Government states that those who shall participate in it shall be the wheatgrowers who had no taxable income last year, and who can show that they will have no taxable income this year. I can see a definite danger in that provision. It is hardly an. equitable arrangement and I dislike it immensely. The Government has adopted an arbitrary figure. It has settled upon £3,000,000 for relief of the wheat-growers - why, I don’t know. It has no knowledge of how many farmers will participate in that relief. If 10 per cent. of the wheat-growerswho had a taxable income last year are excluded, 90 per cent. will participate in the £3,000,000; but if 40 per cent. of the growers whohad a taxable income last year, are excluded; then thegrantwillbesplitupamongst 60percent.ofthewheat-growers.Ido notwishtoseeanywheat-farmerwho didnotpayinataxableincomelastyear show a better yearly return than those who will be excluded from participating in it because they just managed to have a taxable income. Unless the Government can fix a definite price per acre, and determine the maximum amount which will be payable to any one man, there is a danger that some of the wheat-growers will be better off under this grant, than will be some of the wheat-farmers who had taxable incomes last year ; and, again it may result in subsidizing inefficiency.

I am definitely against the raising of any of this money by a flour tax. I do not wish to flog this question unnecessarily by reiterating the arguments advanced by the honorable member for Henty (Sir Henry Gullett) and others who are opposed to the tax. But I must comment upon one statement made by the Attorney-General (Mr. Latham). He affirmed that we force the people to pay for the protection of our secondary industries, so why should we not force them to pay for the protection of our primary industries? I submit that there is no analogy whatever between the two . forms of industry. There . is a marked difference between them. When we protect our secondary industries we definitely compel the home market to pay the price of that protection. These industries do not export, and we ask the local consumer to pay the price of their protection. But if we protect the wheat industry in the way that is proposed, we shall penalize the home market in order to provide the foreigner with cheap food. That is a big anomaly in regard to the protection aspect of this question. A protective policy is designed to protect the local consumer, but the proposal in regard to wheat is a positive means of forcing the local market to pay the price of feeding the foreigner cheaply. I cannot subscribe to such a doctrine.

Mr.Thorby.-Inotherwords,thehon- orablememberonlyapprovesofhome consumptionpricesforsecondarypro- ducts?

Mr.E.J.HARRISON.-Notneces- sarily.Thewheatgrowerscanorganize theirindustryalongthelinesfollowdby thedriedfruitsindustry.

Mr.Thorby-Thatisallweask.I

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Then I will agree with that. By adopting that principle, we shall not be paying a definite subsidy from the pockets of the unfortunate consumers.

The honorable member for Henty (Sir Henry Gullett) drew attention to the fact that if the Government had intended to give relief to the wheat-growers, it would have presented its budget proposals in a somewhat different way. Take, for example, the £500,000 in taxation which has been remitted to the brewers. I cannot support the imposition of a flour tax when I find that, the brewing interest is to receive relief from taxation to the extent of £500,000. Then, with regard to the entertainments tax, I do not think that the remission of that tax was asked for, but relief was granted. In America, a processing tax is collected which is similar to our proposed flour tax, and I am entirely in accord with the editor of the North Western Miller, who, in the issue of that journal dated the 13th September, says -

The excise on the people’s bread now being collected by the federal Government for the benefit of a small group of producers whose distress is less than Hint nf millions who are forced to pay toil is inequitable, unfair, and a gross abuse nf the taxing power granted to the Federal Government by the States, lt is a heavy addition to the cost of existence of those who pay, and of doubtful or negative value to those few whom it is proposed to benefit, lt should be repealed.

Mr Thorby:

– Is he an authority?

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– -He should be, seeing that he is the editor of the official publication of the flour industry.

It has been suggested by the . Government that there should be a modification of the property tax - that it should be 6 per cent, instead of 5 per cent. ‘ The increased revenue to be derived from this source is estimated at £200,000. I submit that the property-owners of Australia have had t’o make sacrifices that many big vested interests have not made. They have made sacrifices that possibly wheatgrowers have not made. Special legislation has been enacted by the States affecting these property-owners who are having a very rough spin. To my mind, it is not right that this section should be further penalized in order that money may be raised for the relief of wheatgrowers, when the funds necessary could have been obtained in a much easier and better way by means of a loan on the security of treasury-bills. If we adopt thai course, even if it means the mortgaging of pur- budget for three successive years, we shall be doing a good thing for Australia. Those persons who can afford to pay this grant to the wheatgrowers should be compelled to pay it. I cannot parallel the conditions of the poor unfortunate who is on the breadline with those of people who can afford to pay taxation into the revenues of this country. If we raise this money by the issue of treasury-bills, we shall, according to Professor Giblin, be adopting fairly sound lines of finance under the existing conditions. I feel that our revenue is so buoyant that we can definitely afford to take this risk, and if, whilst endeavouring to liquidate these treasury-bills, we are obliged to pay interest, we shall be paying it to ourselves. I cannot see any objection to or unsoundness in that particular method of finance. Had the depression only just started, instead of having reached rockbottom, I might have been able to see eye to eye with certain honorable members; but as revenue is definitely buoyant, I feel that a mistake cannot be made if these payments are raised by treasury-bills, even if the effect is to mortgage the budget for three successive years.

Mr DEPUTY SPEAKER (Mr Bell:

– The honorable gentleman has exhausted his time.

Mr FORDE:
Capricornia

.- The party which sits on this side of the House, while strongly opposed to a tax on the people’s flour, is in favour of a Commonwealth-wide orderly marketing scheme, with producer control, giving a reasonable return to the wheat-growers of Australia. That is what it stood for as a government. “We submit that a policy should have been propounded that would have stabilized the wheat industry, and not have left it in the position of being obliged to come cap in hand to the Commonwealth every year. The influence of merchants and food speculators doubtless has been stronger than that of the wheatgrowers. The haphazard method that has been adopted for the assistance of wheatgrowers over a number of years should cease, and this industry should be given the same machinery for the marketing of its product and the fixation of an Australian price, as was given some time ago to the dried fruits industry, and more recently to the dairying industry. The pool that the Federal Labour party stood for as a government in 1930 would have enabled a home-consumption price to be based on the cost of production, thus giving a reasonable return to the growers. The price of flour could be stabilized.

The Leader of the Opposition (Mr. Scullin) has rightly urged the adoption of a permanent scheme which would provide for an advance being made to a pool by the Commonwealth Bank, with the guarantee of the Commonwealth Government, the liability to be liquidated from revenue over a period of years until the overseas price was sufficiently high to enable the pool to shoulder the responsibility for the remainder df the indebtedness. I submit that that is a practical scheme. The party of which I am a member rightly asks what justification there is for a flour tax when the Government is able to remit taxation to the amount of millions of pounds to a wealthy section of the community and large amounts to the liquor trade and other luxury industries. The flour tax is a class tax. It strikes at the family life, by seriously increasing the cost of living of the average worker, whose household consumes more bread than is consumed by wealthier people. The Queensland Prices Commissioner has furnished me with the opinion that the proposed sales tax of £4 5s. a ton on flour will represent approximately 26 points in the cost of living figures, equivalent to a difference of nearly ls. 6d. a week in the basic wage. Honorable members are aware how slowly the Arbitration Court functions when it is a question of increasing the basic wage, because of additions to the cost of commodities. It will be a considerable time before the workers will have their wages increased by the court, and the very large section which does not work under awards will obtain no relief from this additional impost.

I listened with considerable interest to the views of a representative gathering of wheat-growers in Canberra about a month or six weeks ago. Those gentlemen came from all over Australia, and, in their addresses to members of both Houses of the Commonwealth Parliament, put forward an unanswerable case for assistance. They did not, however, advocate a flour tax. Mr. Stott, a member of the House of Assembly in South Australia, a wheatgrower, and secretary of the Wheatgrowers Federation, said -

We consider that a flour sales tax is not satisfactory, and is not asked for hy the wheatgrowers.

What the wheat-growers want is, producer control of the industry and an Australian price. That is what is now enjoyed by the dried fruits industry, and will shortly be enjoyed by the dairying industry. Mr. Field, the president of the Farmers and Settlers Association of New South Wales, who is a wheat-grower in the Riverina district, said -

The very fact that you people are paying me a higher price for butter on the Australian market, enables me to carry on the dairying section of my business. What I want is an Australian price for wheat.

Sir STEWART:
PARRAMATTA, NEW SOUTH WALES · UAP

– He said that he wanted payment on an acreage basis, and not a home consumption price, because he had lost half of his crop this year.

Mr FORDE:

– On behalf of the wheatgrowers of New South Wales, he advocated a home-consumption price, and also said that some consideration should be given on an acreage basis to the wheatgrowers whose crops had utterly failed. In my opinion, the case of those men should be dealt with by the State authorities. Quite a big argument could be advanced in connexion with assistance on an acreage basis. In certain parts of Australia wheat has been grown on unsuitable land, and it would not be wise of the Commonwealth Government to subsidize inefficiency. The State govern-, ments have the necessary machinery for conducting investigations, and could arrive at an accurate conclusion as to whether assistance should bc given in necessitous cases. Professor Giblin, Professor of Economics at the Melbourne University, who has investigated this question, said in the course of a statement recently -

The wheat-growers are entitled to a payable price, and if they cannot get it they must go out of business.

Any one who listened to the representations of the gathering of wheat-growers in Canberra must have come to the conclusion that the wheat industry was on the verge of collapse, and that it behoved either this or any other brand of government to come to its assistance to ensure its continuance. In view of the fact that there were 75,000 wheat-growers in Australia, and that approximately 240,000 persons are employed directly in the industry, it must be conceded that it is probably the greatest labour-employing industry in Australia. Speaking on the 29th September, and referring to the measure passed by the Scullin Government in 1930, providing for an Australian pool, the honorable member for Wimmera (Mr. McClelland) said-

I believe that had that measure beenpassed the provision of some of the millions of pounds that had been spent during the past two years on unemployment would not have been necessary.

The honorable member for Wimmera comes from an important wheat-growing district, and is well-acquainted with his subject. It is unfortunate that some members of his party in another place, by voting against that measure, compassed its defeat. When the Scullin Government came into office, it was immediately struck with the serious plight in which the wheat-growers of Australia found themselves. Representations were made to it by farmers’ organizations and representatives of wheat-growers in this House, to put into operation an orderly marketing scheme covering the whole of Australia. The Minister for Markets, Mr. Parker Moloney, accordingly convened a conference, which was attended by representatives of State pools and farmers’ organizations. The result was the Wheat Marketing Bill that was passed by this House. Unfortunately, there was bitter opposition to that measure, which provided for the payment of 4s. a bushel at country railway sidings, by some of the present members of the Ministry and some members of the Country party in another place. The Commonwealth Bank agreed to make the money available ; but that responsibility was lifted from its shoulders by the defeat of the bill, and as a consequence the wheat-growers of Australia suffered very serious loss. “While Acting Minister for Markets and

Transport, I convened a conference of all wheat-marketing organizations, and it was held on the 11th and 12th November, 1930. Subsequently, legislation was passed through both Houses providing for a guaranteed price of 3s. a bushel; but, unfortunately, the Commonwealth Bank was not prepared at the time to arrange the necessary finance. In 1931, the Scullin Government was responsible for the passage of further legislation, under which £3,000,000 was made available for the assistance of the wheatgrowers of Australia on the basis of a bounty of 4£d. a bushel.

I listened with a good deal of interest to the remarks of the honorable members for Forrest (Mr. Prowse) and Swan (Mr. Gregory), in regard to the serious effect upon wheat-growers of the high cost of the farming implements that they use. I point out that this has not been nearly so serious a burden as have high interest rates. A return with respect to 48 farms in South Australia, prepared by the Auditor-General in that State, shows that interest is responsible for over 50 per cent, of the cost of the production of wheat.

We have heard very little from the Country party in favour of a lower interest rate to the man on the land. The honorable member for Swan (Mr. Gregory) has referred to the serious position of the wheat-growers, as the result of the alleged high prices that are charged for farming implements. A six-foot binder free of duty in New Zealand, except for a primage of 3 per cent., is sold by the International Harvester Company for £86 15s., whereas the price in Australia of a comparable machine, with a duty of 45 per cent., is £76.

Mr Gregory:

– It is a different machine altogether.

Mr FORDE:

– Even the most ardent free-trader in this House must admit that the farmers cannot obtain a more satisfactory implement than that manufactured in Australia. A , 15-run hoe drill in New Zealand bears a duty of 35 per cent, plus 5 per cent, super-tax, and is sold at £73 2s. 6d., a similar drill being sold by the International Harvester Company in Australia, at £61 and a 16-hoe Sunshine drill at £54 7s. 2d. In the Argentine, implements are duty free, and in view of the exchange, it is difficult to make a comparison in values, hut working the prices out in wheat values, it is shown that for a” 10-ft. engine-functioned reaper and thresher, the Argentine farmer pays 58 per cent, more than the farmer does in Australia. For an 8-ft. hinder with fore-carriage and sheaf carrier, the Argentine farmer pays 27.5 per cent, more, and for a 6-ft. binder with sheaf carrier, 32.6 per cent. more. The local price of a 6-ft. reaper and binder is £12 8d. less than the price in Argentine, where prices are on a sterling basis. The local price of an S-ft. reaper and binder is £14 13s. less than, the price in Argentine. The local price of an S-ft. reaper harvester is £19 16s. 6d. less than the price in South Africa. The local price of a 10-ft. header harvester is £145 Ss. 6d. less than the price in the Argentine. The local price of a 14 x 29 cultivating drill is £4 Os. 9d. less than the price in South Africa. The price of a 51-disc drill is £13 6s. 4d. less than the price in South Africa. The local price of a 10-disc harrow, 16-inch disc is £2 16s. 3d. less than the price in South Africa. The local price of a light set disc plough, 2-ftirrow, is £13 ls. 3d. less than the price in South Africa. The local price of a heavy set disc plough, 4-furrow, is £16 7s. 9d. less than the price in South Africa. I quote those figures to refute the contention of the honorable member for Swan (Mr. Gregory) that the wheat-growers of Australia are suffering because of the high prices charged for farming implements. As a matter of fact the wheat-growers of Australia, as compared with those of other countries, are obtaining a distinct advantage as ‘a result of the local manufacture of farming implements.

All the stabilization schemes for the marketing of primary products would be impossible were it not for the protectionist policy of Australia. Statistics show that, on the average, every £864 worth of Australia’s production diverted overseas, means a direct loss of employment to one Australian. On this basis the diversion of Australian output of manufacture to the extent of 1 per cent, would result in 4,465 workers being thrown out of employment, to the extent of 10 per cent, would result in 44,655 workers being thrown out of employment, and to the extent of 20 per cent, would result in 89,311 workers being thrown out of employment. ‘ Accordingly, the value of the home market cannot be overlooked by the advocates of the stabilization of the marketing of primary products, such as dried fruits, dairy produce and wheat. We cannot hope to increase the local prices, of primary products unless we have hundreds of thousands of workers employed in Our Australian industries, with a purchasing power that will enable them to buy the farm products of this country.

A reference to Hansard reveals “some amazing somersaults on the part of the present members of the. Cabinet, in the question of increasing the price of wheat. The Postmaster-General (Mr. Archdale Parkhill), when sitting in Opposition, and criticizing the Wheat Marketing Bill, introduced by tho Scullin Government on the 23rd July, 1931, said -

My justification for doing so is that I represent 52,000 electors, who, with their families, are deeply concerned with the price of wheat. Not only have I the right but I regard it as a duty to express the opinions of that section of the community on this most important matter. Every one of these people has to eat bread and they are only a part of tho population of Australia. Every man and woman will be intimately affected by what the Government docs in regard to the marketing of wheat.

I am opposed to fixing the local price for wheat which is above import parity. We have had too much of that sort of tiling already in connexion with other commodities.

Mr Prowse:

– The import parity is today 5s. a bushel.

Mr FORDE:

– To-day, wheat can be landed in Australia at 4s. a bushel. What the Postmaster-General had in mind when he made that statement, was that the price of wheat in Australia should not be increased by artificial means, by a Commonwealth pool or by the fixation of local prices which would return to the growers a price over and above what they could obtain for their product on the world’s market. The Minister for Trade and Customs (Mr. White), when sitting in Opposition, was a strong opponent of a sales tax on flour! He said that it was a monstrous tiling to’ tax flour and to increase the price of the bread and butter of the children. He added-“ Why should the Commonwealth Government come to the direct assistance of the farmers?” I venture to say that a month ago, not onemember of the Cabinet was in f avour of a sales tax on flour. Since then Ministers have procrastinated and vacillated in respect of this important question until they have now been compelled to take some action in view of the strong representations made by honorable members in debates on motions for. the adjournment of the House, and by the representatives of thewheat-growers who came to Canberra from all over Australia. Now, on the eve of the adjournment of the House, after from 30 per cent. to 40 per cent. of the wheat of Australia has been harvested, the Government has brought forward a scheme to assist the wheat farmers.

The Leader of the Opposition in one of his characteristic and logical speeches, contended that there should have been a’ reconstruction of the budget to include, among other things, provision for the relief ofwheat-growers, and that the assistance that is now proposed should be met out of surplus revenue. The Government knew the position of the wheat-growers when the budget was being framed, and yet it was content to wait, hoping that something would turn up to obviate the necessity for this legislation. Is it any wonder that it has been called the “ zig-zag “ Government? The international wheat agreement, which it entered into, has been found to be absolutely Useless because, instead of resulting in an increased price of wheat, the price has, since the ratification of the agreement, fallen from 3s. fid. in September last to about 2s. 7d. to-day. Some of the supporters of the Government have contended that the fixation of the prices ofwheat and flour for homeconsumption would have the same effect as a flour tax , in raising the price of bread, but the Labour party disputes that contention. If the homeconsumption price were fixed, under a proper scheme of orderly marketing which included the formation of an Australian wheat pool, there would be no need for any increase in the price, ofbread.whatever, . although 4s; a bushel could be paid to the wheatgrowers, because the pool would control the price of wheat for local consumption, and through that, the price of flour which in turn would govern the price of bread.

Mr Thorby:

– Would such a scheme return to the wheat-growers a price of 4s. a bushel?

Mr FORDE:
CAPRICORNIA, QUEENSLAND · ALP; FLP from 1931; ALP from 1936

– Yes.. In reply to a question, the . Minister for Commerce has supplied me with figures which showthat in Brisbane the present prices are - Wheat, 3s.10½d. a bushel; flour, £8 15s. a ton.; and bread, 4.41d. per 2-lb loaf. I have also received from the Commissioner of Prices in Brisbane a telegram, which reads -

The large cash and carry shops, Brisbane, charge 3d. Other storekeepers’ prices range from 3½d. to 4d. Bread is only delivered by bakers who charge 4½d. cash per 2-lb. loaf.

The Minister’s figures showed that the Sydney prices are: Milling wheat from 2s.9½d. to 2s.10d. a bushel, flour £9 a ton, and bread 5.06d. per 2-lb. loaf, In Melbourne the prices are: Milling wheat 2s. 9d. a bushel, flour £7 10s. a ton, and bread 3.67d. per 2-lb loaf: In Adelaide the prices are: Milling wheat 2s. 7d. a bushel, flour £7 10s. a ton, and bread 4d. per 2Ab loaf. In Perth the price of milling wheat is 2s.7¾d. a bushel, that of flour £8 a ton, and that of bread 3.90d. per 2-lb loaf. Hobart prices are: Milling wheat from 2s.11d. to 3s. a bushel, flour £8 10s. a ton, and bread 3:95d. per 2-lb. loaf. The Minister also informed me that ‘prices in Wellington, New Zealand, are: Milling wheat from 3s. 9d. to 4s.1d. a bushel, flour £13 15s. 3d. a ton, and bread 5d. per 2-lb. loaf: That shows that there must be profiteering by the flour-millers and the bakers. I hope that the Government willmake a searching investigation into this matter. Thewheat-growers are being overworked and underpaid, . while the millers and bakers are charging exorbitant prices.

Mr Thorby:

– The honorable member has failed to take into account the NewSouth Wales flour tax.

Mr FORDE:

– I have quoted the figures used by the Minister for Commerce (Mr. Stewart), and he, no doubt, took the flour tax into consideration. It is proposed to impose; a taxof £45sa ton on . flour, . and,thepriceofthe21b loaf will be increased by Id. Actually, a tax of £5 10s. a ton would represent an increase of Id. per 2-lb. loaf. The tax of £4 5s. would justify an increase of only 3d. a loaf, but, as the bakers do not deal in fractions, the full Id. will be added, and the millers, or bakers, or both, will get a rake-off of approximately £500,000. The Commonwealth Government has no power under the Constitution to fix prices, but the State governments have. Unfortunately, in most of the States at the present time, there are governments in power which do not believe in the fixing of prices, as does the Government of Queensland. Although the price of wheat in that State is 3s. 10-Jd. a bushel as against 2s. 9d. in Melbourne, the price of bread is lower in Brisbane than in Melbourne.

I should like to kno w whether the Minister for Commerce (Mr. Stewart) has obtained any advice as to whether the imposition of a sales tax on flour is likely to affect detrimentally our export trade in that commodity?

Mr Stewart:

– It will have no effect whatever.

Mr FORDE:

– When I was Acting Minister for Markets I was advised by my department that, as a sales tax would have the effect of causing exported flour to be sold for less than flour consumed in Australia, overseas countries would probably impose a dumping duty on our exports, with the result that our valuable trade in this commodity would receive a set back. Now that the Government has been forced into accepting the proposal of a flour tax, the Minister, no doubt, will argue- that the tax will in no way affect our overseas trade in flour. I know that ho does not wish that trade to be injured, so he should make inquiries as to what is likely to happen.

A sales tax on flour is one of the worst possible taxes that could be imposed. It was strongly opposed by the honorable member for Balaclava (Mr. White), who made a violent speech against it when lie was in Opposition. He was then opposed to any form of organized marketing for wheat that would lead to increased prices. The honorable member for Warringah (Mr. Parkhill) adopted the same attitude, and it would have been intensely interesting to have been able to listen-in to their arguments in cabinet against the Government’s present proposals. No doubt these two Ministers opposed the idea with the same enthusiasm that they exhibited previously on the floor of the House. That worthy knight, t”he honorable member for Henty (Sir Henry Gullett), ex-Minister for Trade and Customs, said that the Government had seen fit to exempt from sales tax farm implements, and a score of other things used by farmers, but was proposing to put a tax on the children’s food. If that statement had been made from this side of the House, the speaker would have been accused of wild extravagances. The honorable member for Henty knows the inner workings of the Nationalist party, and has been a member of this Government. I should like to hear what the honorable member for Ballarat (Mr. McGrath) thinks of this proposal, because he, also, was at one time strongly opposed to a sales tax on flour. There must- have been a real “ Donnybrook “ at the party meeting at which this matter was discussed. It is no wonder that, when, recently an honorable member walked into the House wearing a white coat and a panama hat, Government supporters newly come from a sales tax party meeting thought that they were being haunted by the ghost of the flour tax.

This subject has been agitating the minds of the Government for some time. Ministers have backed and filled on the proposal, and have not known their own minds from one day to the next. Cabinet has blundered from one decision to another, and has finally done something that will bring opprobrium upon it from all sections of the community. It has shown itself to be lacking in all statesmanlike qualities, and now it is pleasing no one. It has not handled the matter with even that moderate degree of intelligence that characterized its handling of the dried fruits industry and the dairying industry. There are 75,000 wheat-growers in Australia, and 240,000 persons are employed in the industry. A royal commission, which recently inquired into the industry in Western Australia, found that it took 3s. 9d. a bushel to produce wheat, whereas the price in Sydney to-day is only 2s. lOd. It is obvious, therefore, that the whole industry must be hastening to ruin. During the last two years, the growers have lost over £2,000,000 on production, though their contribution to Australia’s overseas credits during the four years immediately past, amounted to no less than £95,000,000. The wheat-farmers are struggling against tremendous odds, and all they have asked of this Government is what they asked of the previous Administration. But that government was in the unfortunate position that, though it was in office, it was not in power; it was able to pass through this chamber certain legislation to help the wheat farmers, but that legislation was rejected by another place, largely because of the influence brought to bear by the conservative press, which stands for unfettered private enterprise. The newspapers oppose any restriction on the liberty of the wheat merchants and shippers who have for so long exploited the growers.

The Government’s present proposal provides no permanent solution of the problem which confronts the wheat-growers. The whole sorry business will have to be gone through again next year. The Government has been in office long enough to have made a thorough examination of the needs of the industry. It has the assistance of an energetic Minister for Commerce whose aim, I am convinced, is to do the best that is possible by the primary producers. What influence has stopped him from dealing with’ this industry as the Government dealt with the dried fruits and other primary industries ? Is it because the wheat merchants are able to wield too much power? Is it because the tory press of Australia has denounced government interference with private industry? Is it that the Government is indifferent to the interests of the wheat-growers, who must go out of production altogether unless some organized system of marketing is- introduced? The industry must be organized on a Commonwealth basis if it is to be saved. The Queensland growers have for years past enjoyed an increased local price for their product, and in that State £18,000,000 worth of farm produce is handled every year by control boards governed by the producers themselves.

The Commonwealth Government should have accepted full responsibility for inaugurating a wheat marketing scheme in Australia, and it should be only necessary for a simple majority of the wheat farmers to approve of the scheme for it to be put into operation. If the Government insists upon a 60 per cent, majority before it takes action, the wealthy wheat merchants, and other financial interests, will spend thousands of pounds on propaganda in an effort to convince the producers that dreadful evils will follow if they accept a system of organized marketing. The wheat-farmers who are working sixteen hours a day have little opportunity to study the question for themselves, and are more or less at the mercy of the newspapers and propagandists who are preaching against any form of government control. The newspapers consistently support vested interests which are always opposed to the best interests of the primary producers.

Sitting suspended from 12 to 13.80 a.m.

Thursday, 7 December 1933

Mr JENNINGS:
South Sydney

– At the outset, let me say that I appreciate the difficulties which confront the Government in attacking this important problem of giving relief to the wheat-growers of Australia, because most of the countries of the world which have large wheat-growing territories have failed to find a . satisfactory solution. No matter what proposal is introduced by the Government, it is bound to be subjected to some form of protest. The position is that the great proportion of the 60,000 wheat-growers in Australia are calling for assistance, and it can be generally agreed that that assistance should be forthcoming. There must be co-operation between all sections of the community with regard to this matter, and certainly between those who live in the city and those who live in the country. After all, the progress and prosperity of the large country areas reflect themselves in some form or another in the progress of the large cities of the Commonwealth. Representing as I do a large city constituency, which embraces a considerable industrial area, a large portion of which consists of a wageearning community, I may be pardoned for approaching this proposition from the point of view of the city. After all, a flour tax, under present conditions, must certainly increase the price of bread, which is a matter of great concern, not only to a large proportion of my electorate, but ‘ also to many other parts of the city of Sydney,

Mention has been made df the price of bread in Melbourne and Sydney, and from a return that is before me, I notice that the respective prices are approximately 3d. and 5d. for a 2-lb. loaf. Many people who live in Sydney, are asking the’ reason for that great disparity, and want to know why a man, his wife and four children, using approximately twelve loaves of breads a week, should pay 5s. in Sydney, while a similar family, living under similar conditions in Melbourne, should pay 3s. for the same quantity of this commodity- in other words, why the price of bread in Sydney, is approximately 66 per cent, higher than it is in Melbourne. I was most interested to hear the speech of the Leader of the Opposition (Mr. Scullin), in which he referred to the fact that the price of bread in Wellington, New Zealand, and Sydney,, is in each case 5d., although the price of flour is actually 50 per cent, higher in Wellington than in Sydney. That certainly requires some explanation, and I am pleased indeed to learn that the Government has decided to appoint a special committee to investigate the subject. I am sure that the decision will also be welcomed by the people of Australia. The committee is to inquire into the ramifications of the wheat industry, from the time that the grain is sown until its product is delivered to the consumer in the form of bread. It would appear that the price of bread can be regulated by a tightening up of the operations attaching to the processing of wheat.

It is proposed under this bill to provide a bounty of £3,000,000 to assist the wheat-growers of Australia, the terms of the measure providing that only necessitous farmers shall benefit. In such circumstances, I believe that the amount provided will be largely in excess of what will be required. It is most difficult to ascertain the cost of producing wheat; I have been given many costs ranging from ls. 9d. to 3s. 6d. a bushel. Economic production is as important in this industry as it is in any secondary industry, and I hope that the result of the proposed inquiry will give Parliament-. a guide regardingfuture legislation.

I maintain that, in view of the present price of- bread, there should be some arrangement by which the basic wage can be adjusted to coincide with an increaseof the price of bread. I know that any organization can apply to the court for a variation of an award, but considerable delay occurs, and the machinery should be simplified so that, when an increase of prices takes place in a commodity such as bread, as in this instance, the promulgation of a hew award may be expedited.

I am opposed to the continual granting of bounties, and think that eventually we shall have to come down to a homeconsumption price upon which the price of bread will have to ‘be regulated. The main factors should be a1 reasonable price for the growers and a reasonable price for bread, and I believe that every action should be taken and every avenue explored in order to bring down the price of bread to a reasonable level. Consequently, I welcome the proposed inquiry, and sincerely hope that the presentation of its recommendations will be expedited so that honorable members and the Government will have ample time to come to a satisfactory conclusion in the next session of Parliament in the settlement of this important national problem.

Mr MCCLELLAND:
Wimmera

– I desire at the outset to express my appreciation of the presentation of this bill, somewhat belated though it may be. It came as ‘ a great surprise to me and to many other honorable members, on this side, as well as to those engaged in the wheat industry, to find that when the budget was introduced some months ago, no provision was made to assist wheat-growers. That wasall the more remarkable in view of the fact that £2,000,000 Was provided out of revenue last year for the purpose, and there was every reason to believe that the price that would be obtained for the crop this year would be pence per bushel below that which ruled last year. There can be no doubt now that the yield this year will be somewhere ‘ in the vicinity of from 50,000,000 to 60,000,000 bushels less than it was last year. Furthermore, in recent weeks, disastrous floods throughout the wheat-growing areas have ruined the crops of many farmers and have had a detrimental effect on the quality of the whole production. Apart altogether from its depreciation, the smaller crop will mean a reduction in the income of those engaged in this great industry this year at the still further reduced values as compared with last year by something like £7,000,000. Yet this Government, which claims to be a national government, has waited until the dying hours of the session before introducing proposals to assist this important industry. When honorable members received the measure they “found that, after all, it was only a temporary expedient. There is no clause in the bill that can claim to be even an attempt to put the industry on a permanently satisfactory basis, to obviate the necessity for this annual agitation,’ and to give the industry a chance to function smoothly and efficiently, in a manner befitting one of the nation’s basic industries.

I also find that the bill contains, some clauses of such a discriminatory character that they should be beneath the dignity of any government, more particularly a national government, which allegedly holds the scales of justice equally between all sections of the community. I am amazed, particularly, at the contents of clauses 6 and 7, and will be more surprised still if this Parliament, which exists to deal with the broad national interests of Australia, does not take a bigger and broader view of the whole matter. If these clauses are placed on the statute-book they will certainly have the effect of bringing the product of this great industry back to home-consumption requirements, or possibly less than that. That is a state of affairs which, even if it were desired by this Government - and I cannot conceive that to be the case - should not be countenanced by the community. If it is, it will not then be a question of a few pounds per ton sales tax on flour. Instead of the community getting the cheapest wheat in the world, it will pay a price that somebody else likes to name.

The attitude of the Government towards this important matter suggests to me that it either fails to appreciate the value of the industry to the community or is unaware of the disastrous state in which the industry finds itself. When all the ramifications of the industry are taken into consideration it will be admitted that it is the most important in the country, and that the time has arrived when the Government and the country must decide whether it desires it to continue as an export proposition or not. In my opinion, the country cannot afford not to have the industry as an export proposition, and I believe that it is recognized by the community.

Let me endeavour to refresh the memories of honorable members, more particularly those who constitute the Government, of what this great industry has done for Australia in recent years. Some four or five years ago. when the world’s economic slump began, it was realized by this community that if Australia was to maintain its standard and keep unsullied the good name it bore among the nations of the world. ir:n 1 sacrifices and extra efforts would have to be made by all. The whole community responded nobly and it must be gratifying to all to know that, notwithstanding all our troubles, it is generally recognized that Australia has overcome the difficulties of recent years better than most other countries. I am sure that it will also be recognized by most honorable members that one of the chief factors in enabling that to be done has been the great efforts of our export industries in increasing the volume of their exports, and not the least of those industries was the wheat-growing industry. For five years prior to 1930, the Australian wheat industry produced an average crop of 136,000,000 bushels, or an aggregate of 6S0,000,000 bushels, for which those engaged in the industry received approximately 4s. lOd. a bushel at country railway sidings. They exported about 85,000,000 bushels annually over that five-year period. During each of the three last years the wheat industry produced an average crop of 205,000,000 bushels or 615,000,000 bushels in all. In other words, it produced during that three-year period, almost as much as it did during the previous five years. What was the price received for this enormous production? Accepting the figures quoted by the Prime Minister, when introducing this measure, the average price received over those three years was 2s. lOd. a bushel on a seaboard basis, or just 2s. a bushel less than the average price received during the previous five-year period. Owing to this reduction of 2s. a bushel, the industry received about £62,000,000 less for its product than it would have received had the price remained at the figure ruling for the previous five years, namely, about 4s. 10d. a bushel. This is one of the chief causes of Australia’s difficulties at the present time. Much has been said during this debate about the need for more purchasing power. Here we have an illustration of how Australia has lost much of her purchasing power. This one exporting industry, which is typical of many of our great industries, during the three years to which I have referred, received £62,000,000 less than it would have received had it obtained the price that ruled during the previous five years.

Let me now invite attention to another aspect of this great industry. As the result of the extraordinary efforts of our wheatgrowers during the last three years, Australia has been enabled to export 210,000,000 bushels more than would have been possible, had the industry produced only the average crop of the previous five years. This surplus production, even at the extremely low value ruling, brought into Australia about £30,000,000 more than would have been received had our wheat-growers produced only the average crop of the previous five years. When, therefore, we hear honorable members talking about what this Parliament has done for the industry during recent years, it is time they realized how little it is compared with what the industry has done for Australia. Apart from the new wealth it has created for the community, it has, during the whole of that period, supplied the home market with wheat for flour purposes at something more than half the cost of production. Yet we hear arguments against any increase in the price of flour. Surely honorable members must realize that if something substantial is not done for this great industry it will be forced into the necessity to produce only sufficient wheat for local requirements; and if, unfortunately, this state of affairs is allowed to be brought about, it will then be a question of this community having to pay import parity instead of getting its requirements at export parity, as has been the case in the past.

On top of all these disastrous years the industry is faced with new difficulties. It has been affected by storms and floods, with no prospect of getting more than two-thirds of the cost of production from that proportion of wheat which can be salvaged from the floods. So far as the world’s market is concerned, there is little prospect of those engaged in wheat-growing obtaining for their wheat this year anything more than about two-thirds of the cost of production. The condition of the industry is such that it cannot continue to function at anything approaching the volume of production of recent years. Indeed, if it were not for the grit and determination of our wheat-growers, and the way in which those associated with them are sticking to them, it would have been at a standstill ere this. Consequently, there is an obligation on the Government to take more appropriate steps than those proposed in this bill, to place the industry on a sound and permanent basis.

The Prime Minister, in introducing the measure, excused the Government for its failure to make any provision in the budget for relief to wheat-growers by affirming that the Government anticipated, as the result of the international wheat agreement, that there would be a rise of the price of wheat. He also implied that because the price did rise slightly about the time the matter was under discussion in London, that agreement was going to be effective in raising prices. Doubtless he has since been disillusioned. The very fact that the exporting countries were guaranteeing to the importing countries the quotas of wheat they were likely to require, was the surest indication that there was no necessity for the importing countries to increase the price of wheat in order to obtain their supplies. Indeed, such action was more likely to have a depressing effect than otherwise on the market though if the importing countries restrict their areas under wheat as agreed upon it should, ultimately, improve price prospects.

Much has been said about the effect on prices of the operations of the American Farm Board during recent years. As a matter of fact, some of the chief clauses in the wheat agreement are nothing more nor less than a continuation of the policy followed by the board in the holding back and building up of supplies.

The question of the establishment of wheat pools has been introduced into the debate, and it has rather surprised me that much of the propaganda one hears when travelling round the country should have found its way into this chamber. The honorable member for Wentworth (Mr. E. J. Harrison) spoke about the great bug-bear that the American Farm Board’s wheat was to the market. I think that the honorable member must have got hold of some of the interested parties’ propaganda when he stated that the reduction of the board’s supplies was a factor in the rise that took place in values a few months ago. The Prime Minister, when introducing this measure, said -

Thirdly, as a result of the factors already mentioned, huge stocks have been accumulated in North America. On 1st August last, these stock amounted to 440,000,000 bushels in excess of the normal carry-over.

These figures do not suggest a reduced holding. Either the honorable member for Wentworth or the Prime Minister is wrong, and I do not wish to suggest that the Prime Minister is wrong. Indeed, I think that his statement was reasonably correct. I have not the figures as to the actual carry-over in America on the 1st August last, but I do know that the carry-over in the hands of the American Farm Board on that date was somewhat larger than it was a year earlier, and that it was one of the chief factors which caused the United States to endeavour to induce other nations to hold some wheat off the markets of the world in order that a better price might be obtained for that commodity. Broomhall’s Corn Trade Year-Boole shows the carryover as follow: -

As stated earlier, the carry-over on the 1st August, 1933, was larger than other years notwithstanding that America’s recent crop was the poorest yield for a generation.

I wish to acknowledge the assistance given to the wheat industry in the past. Two years ago provision was made for a reasonable measure of assistance to it, by the flotation of a loan for £3,440,000 repayable over a fifteen-year period. Last year the present Government gave a reduced measure of assistance to the industry by making £2,000,000 available out of revenue. In my opinion it is not sound business to borrow money to meet annual commitments. Seeing that there is a smaller wheat crop this year, and that the price is lower, the Government might well have assisted .the industry to a greater extent than it proposes to do. But in all the circumstances, the relief proposed constitutes a reasonable measure of assistance, and I congratulate the Government on its decision not to borrow money in order to render that assistance. So far as the relief given under the budget proposals is concerned, my own view is that the amount required could have been obtained out of revenue without the re-imposition of taxation. However, as those who are responsible for the finances of the country hold a different opinion, I have no quarrel with the decision to raise the money in the manner proposed, which is infinitely better than borrowing it.

A good deal has been said by honorable members about the measure of assistance that has been given to the wheat industry during the last two or three years; but it is small compared with the benefit that has been derived by the Australian community as a whole, and is infinitesimal compared with the assistance that is given to other industries. It is only within the last two or three years that, having reached the stage when assistance was essential if the industry was to continue, the Commonwealth was approached. One of the big factors helping to bring this great industry to that state is the extremely heavy burden, in the form of assistance to other industries, that it has been obliged to carry for the last generation. Unaided, it has had to compete against the world. It was inevitable that the time would come when it would not be able to stand the strain of the additional burden represented by its fostering of other industries.

I was somewhat astonished this afternoon at the adoption by the honorable member for Henty (Sir Henry Gullett) of the role of a champion - so called - of tho bread consumers of Australia. No honorable member of this House could, with less justification, make such a claim. I have a vivid recollection of the submission by the honorable member, within the last twelve months of a tariff schedule which meant the continuance of a tax not only on bread, but also on nearly everything else used by every householder in this country, and not for seven months only as is proposed for the flour tax, but for all time, unless Parliament otherwise decides. Because the tariff imposes an indirect tax, the community does not realize what is being paid under it. The economic committee which five years ago reported on the effect of the tariff on all industries in Australia, stated that the indirect tax paid by the Australian community for the benefit of secondary industries amounted, at that time, to the immense sum of £30,000,000 per annum; not 25s. a head, which this flour tax will impose, but £5 on every man, woman and child in the community. That burden, has been borne for a considerable time, and. will continue so long as the tariff legislation remains on the statute-book. It is for that reason that I consider the honorable member for Henty has loss justification than any other honorable member for championing the cause of the bread consumers of Australia.

I am prepared to support the second reading of the bill, and shall define my attitude towards the different clauses of it when the Government discloses its intention’ in regard to them. Had the Government accepted the advice that other honorable members and I tendered to it months ago, and appointed a committee to inquire into the condition of the wheat- industry, it would have been in an infinitely better position to-day to deal with this important question.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Why ask some one else to organize the industry?

Mr MCCLELLAND:

– I have been associated with an organization which lias controlled some 60 per cent of Victorian production for a number of years past. Therefore, the honorable member cannot suggest that some attempt has not been made to organize the wheat-growers of Victoria, at any rate; and if he fully appreciated the national value of this great industry he would assist in that direction, instead of offering gratuitous advice to other honorable members. Had the Government accepted the suggestion that we made, it would have been in a position to bring down legislation placing the industry on a more permanent basis.

Mr Thorby:

– Instead of putting it out of operation.

Mr MCCLELLAND:

– I was pleased to hear the right honorable the AttorneyGeneral (Mr. Latham) announce that the Government had at last decided to act on our advice and appoint a competent committee to inquire into the report on the industry, and thus make available, not only to this Government but also to all governments, information that will show the real state and necessity of this great industry. If the wheat industry ceases to exist more particularly as an export proposition, Australia will be in infinitely greater trouble than it has experienced within recent years. Honorable members know that the Country party has consistently advocated the adoption of a scheme under which the wheatgrowers would have an opportunity to say whether they desire to have 100 per cent, control. Action along those lines can be taken by this Parliament. If such control is not desired, I do not suggest it should be forced upon the industry.

In my view, it would be a permanent form of assistance. One thing which cannot be denied to either this or any other industry, is a home-consumption price. I have no hesitation in saying that, if there were an Australian-wide organization in existence at the present time, it would bc able to raise, by means of a home-consumption price, half the amount that’ the Government proposes to make available; and there are grounds for believing that the marketing of the Australian crop by one efficient selling and chartering agency would result in the other half being obtained. In such circumstances, there would be no necessity for this annual agitation at the approach of the harvest. The industry would be given an opportunity to control its own affairs, and would be placed on an infinitely more lasting basis thanseems likely at the present time.

Mr LANE:
BARTON, NEW SOUTH WALES · UAP

.Some honorable members of the Country party may be complimented upon having thanked the Government for such a magnificent gift to the wheat industry as £3,000,000.

Mr Hill:

– The industry has earned it ten times over.

Mr LANE:

– For a number of years, every wheat-grower has realized that the price of his product was falling and that close organization was needed to save the industry and those who were engaged init. The Government has been blamed for having delayed, until the last moment, action for the assistance of the industry. Last October, Mr. Field, the President of the Farmers and Settlers Association in New South Wales, demanded that the Government should guarantee at least 5s. a bushel to the wheat-growers. A home-consumption price of 3s. Cd. a bushel would now be accepted. The claims made by honorable members who are engaged in this industry arc on a par with that made by Mr. Field. They ask for an unreasonable price, and then wonder why the community considers that they are seeking to take money out of the public purse; regardless of who may thereby suffer. Every year the statement has been made that, unless assistance was given by the Government, the industry would go out of existence, with serious results to Australia. Yet honorable members have grown fat as the result of their operations on the land during the last three years. The acid test will be applied by the provision in the bill that no man shall benefit under it who had a taxable income last year. If, as honorable members have asserted for years, wheat is not produced at a profit, how is it that the growers paid income tax last year? The farmers who have assessable incomes are among those who the members of the Country party contend are poor men starving on the land and awaiting the opportunity to leave their holdings. The honorable member for Calare (Mr. Thorby), in supporting the Government’s proposals to assist the wheat industry, is seeking some pecuniary advantage for the wheat-growers, similar to what he has obtained in the past.

Mr Thorby:

– The honorable member for Barton (Mr. Lane) has suggested that I have received some pecuniary advantage from the subsidy granted by the Government to the producers of wheat, and I say emphatically that at no time have I received one penny from any subsidy paid to the wheat-growers.

Mr LANE:

– The honorable member has been so long in the Federal Parliament and the State Parliament of New South Wales that he considers that, as a representative of the primary producers, he has the right to plunder the public purse in their interests at every conceivable oppbrtunity. The representatives of the primary producers in this Parliament are no different from the primary producers in the State Parliament. They are all tarred with the same brush. The members of the Country party contend that it should be beneath the dignity of this Parliament to attempt to discriminate as between farmers in respect of the assistance to be granted under this measure, but I submit that it should be beneath the dignity of the primary producers who are in a position to pay income taxation, to come, cap in hand, to the Government, asking for relief. There are wealthy producers to-day who produce wheat as well as wool, and because they make a loss on wheat and a profit on wool, they consider that they should be recompensed by the Government for their loss on wheat. A firm like Anthony Horderns, of Sydney, if it made a loss in its manchester department and a credit in its clothing department, would be just as entitled as thewealthy producer to approach the Government to make up its loss on the manchester department.

Mr Hill:

– That is a poor illustration.

Mr LANE:

– The members of the Country party contend that, as the Tariff Board has been established for the protection of the secondary industries, a similar board should be established for the protection of the primary industries, but if such a board were appointed and functioned like the Tariff Board, it would have no option but to expose the hypocrisy of the representatives of the primary industries by pointing out that the industry as a whole is taking more than a fair proportion of wealth out of the pockets of the community. The members of the Country party would like to establish a board which would fix prices in accordance with their own wishes, regardless of the disastrous effect upon the poorer sections of the community. Let me give a few illustrations of the satisfactory position of wheat-farmers who . the members of the Country party contend are entitled to assistance under the Government’s proposals. One farmer in the Gunnedah district arrived from Aberdeenshire in 1921. , He entered into partnership with his brother, who had had experience in the Cowra districts, and they moved to the north-west. This man has been a candidate for championship honours for wheat since 1926. He produced a crop which averaged 14 bags or 42 bushels to the acre, and was a prize-winner in the north-west district.

Mr Thorby:

– That relates to one year only.

Mr LANE:

– The Government’s proposals relate to this year’s crop. The honorable member contends that this farmer, who produces 42 bushels to the acre, has a right to be assisted.

Mr Thorby:

– I have never said anything of the kind.

Mr LANE:

– We shall judge the honorable member by his vote. The farmers are well paid for what they produce, and if they are not content with their present position, and will not produce wheat in the interests not only of themselves but of the nation as well, they are P001 samples of Australians. Farmers in the Baradine district, in the north-west, have 26,000 acres under wheat, which will average 26 bushels to the acre. Do the members of the Country party believe that those farmers will leave their holding if they do not receive assistance from the Government? Next year, it is expected that there will be 34,000 acres under crop in that district. It is well known that the primary producers, in arriving at their production costs, take into account the value of their land which, in most cases, they assess at ridiculously high prices. Pro perties are changing hands, but at more than their productive value.

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

– Wheat lands have no productive value.

Mr LANE:

– The honorable member would not be prepared to sell his wheat lands. The members of the Country party have exposed themselves to the community as individuals who are prepared to subsidize the wealthy producers at the expense of the poorer sections of the community. Figures which were presented to the House last year by the Minister for Commerce showed that 20 per cent, of the wheat-growers received by way of bounty £1,800,000, and 80 per cent, received £1,542,000. Those figures clearly indicate that there is an aristocratic section of the wheat-growers which is making considerable profit. Last year I challenged honorable members of the Country party to point to any speech in Ilansard in which members of that party had advocated the separation of the wealthy from the poor primary producers for the purposes of the bounty. The totally inadequate reply of honorable members was that in helping the poor farmers, we were helping an inefficient farmer. Evidently they do not believe in the brotherhood of man. ‘ According to the Sydney Morning Herald of the 11th November last, Scott Brothers, of’ Currabubula own a property which was originally held by their grandfather in 1872. Since then three generations have lived on it. Scott Brothers have 1,600 acres under crop, and their return is thirteen bags to the acre. None of the farmers know what it really costs to produce wheat. Unlike those engaged in secondary industries, they make no allowance for depreciation of property and machinery. They place the highest value upon everything that they possess in order to boost the cost of production so that they can ask this simple Government and the simpler Parliament for assistance The Attorney-General (Mr. Latham), who is just as shrewd as the honorable member foi- Calare, considers that it is impossible for the primary producers to assess what is a fair cost of production in the wheat industry. The honorable member for Calare has asked why cannot the Federal Government enter into an arrangement with the State governments to fix the price of bread. He well knows that Mr. Bruxner, as Minister for Transport and Leader of the Country Party in the State of New South Wales, is in charge of the affairs of that State, yet no attempt has been made by him to fix the price of wheat in the State. The honorable member for Forrest (Mr. Prowse) said that by means of co-operation between the Commonwealth and the States the prices of wheat, flour and bread could be regulated ; but members of the Country party have failed to organize themselves; and they will not organize the wheat industry to achieve that object, because they hope every year that improved prices will be obtained for its product. Why does not the Country party establish an organization suited to the needs of the industry, instead of going cap in hand to the Government year after year, for assistance? The people of Australia desire the wheat-growers to be given to understand that their constant requests for Government assistance must cease. Interest on the loan of £3,000,000 which was raised three years ago on behalf of the industry has to be met by the taxpayers of Australia to the tune of £360,000 a year. Next year, when the industry demanded assistance, the ‘Government agreed togrant £2,500,000 out of revenue. It was still claimed that if this assistance were not given the industry would be ruined. Now it has approached the Government for the third time, but it is not playing the game with the people of this country. It is now realized that if the farmers do not organize their own industry, they will have to suffer the same as city industries. Only a fortnight ago a large engineering company failed, and the shareholders lost every penny which they had invested in it. The wheat-growers are spoon-fed by governments, and if they do not put their house in order they deserve to bc forced off their farms. Members of the Country party themselves have admitted that the lowest amount they could expect as a sales tax on flour was £5 10s. a ton. Such a tax would have doubled the increase of the price of bread. which will bc rendered necessary by the present proposal. Three months ago I asked the honorable member for Calare to make his figures available to the House

page 5707

QUESTION

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by incorporating them in Hansard; but he replied, “ We shall reserve them until the proper -time”. Those figures have never been tested. A soldier settler, Mr. Rex L. Marshall, who secured a block covered with box, kurrajong and pine, cleared it, and obtained a crop of fourteen bags to the acre, and he has 1,S00 sheep as well.

Mr LANE:

– If a farmer mortgages his property up to -the hilt, he must shoulder responsibility for his action. A mortgage should not exceed 60 per cent, of the value of the land. Some farmers have gambled with their holdings, and if their properties are mortgaged up to 80 per cent, of their value, they have no right to ask this Parliament to subsidize them. In many city business undertakings, the merchants have no tariffs to help them; they must depend entirely upon their buying and selling skill. If they purchase £5,000 worth of blankets, and, because of a mild winter, are able to sell only £2,000 worth, they do not ask this Parliament to make up their losses. Similarly, men in the building trade have earned nothing for the last two years. A man who erects houses for people to live in is doing a useful work in the community; but if he sustains a loss on his operations, this Parliament does not come to his aid. The wealthy ‘ wheat-farmers should stand on their dignity and refuse to take a government subsidy. Some members of the Country party would put the poor wheat-farmers on the dole more quickly than would any other party in the House. The wealthy wheat-growers would take the bread out of the mouths of the poor men in the industry. Throughout my political career in the State and Federal spheres, I. have heard bargaining by the CountrY party, which, because of its ability to influence votes, has . sought to exact an unfair proportion of the wealth of the community. They study their personal interests, and refuse to help the men in poor circumstances in their own industry. The wealthy men stand for the fattening of those who are already rich, and for taking away the rights of the less fortunate.

The honorable member for Calare said that the proposed assistance to the industry should be granted, because similar help is given to those engaged in the sugar industry. No sugar-grower is allowed to cultivate more cane land than is allocated to him by the controlling authority, and that is why the sugar industry” is a success. Of course, a proportion of its wealth is obtained by a tax on the community, and I believe that the people generally would allow the wheat industry to Be assisted by similar means. But how could that be done in the absence of suitable organization of the growers? Every State and every grower claims the right to increase production beyond the consuming power of the community. The growers are not prepared to accept world parity prices for their surplus, but are asking for a home-consumption price which, through the operation of a pool, will fully recoup them for every grain of wheat they grow.

Mr Thorby:

– That is not correct.

Mr LANE:

– The honorable member may say that now, but Mr. Field, at the Farmers and Settlers conference recently, demanded that the Federal Government should guarantee the wheat-farmers a price of 5s. a bushel. Members of the Country party admit that the cost of production is about 3s. 9d. a bushel, but they want a guaranteed price of 5s. a bushel, in order to recoup them for the lower price which they must accept on the world’s market for their exportable surplus.

This afternoon, the honorable member for Gwydir (Mr. Abbott) said that I talked rubbish. The honorable member, when arguing that assistance to the wheat-growers should be distributed among all growers, irrespective of their financial position, quoted the case of a young man, in his electorate; who began wheat farming four or five years ago. The first year, he said, this man sowed 200 acres of wheat, and, although the crop was a poor one, he managed to pull through. The next year he harvested 400 acres of wheat, the following year, 600 acres, and the next year, 800 acres. That man, he said, would receive no assistance under the scheme, and no encouragement to continue producing. I will not say that that illustration, as an argument in favour of the honorable member’s contention, was rubbish; I say that it was absolutely stupid. When a man is able, in a period of four years, to quadruple the area under production, and make the enterprise pay, he certainly does not deserve a special grant from the public Treasury. The honorable member for Gwydir (Mr. Abbott) said that it would be lowering the dignity of the farmers to offer those in difficulties what would be equivalent to a dole, but that is a poor argument in favour of raiding the public purse for the benefit of those who are not in need of help. It would probably be found that between 30 per cent. and 40 per cent. of the growers will not need any assistance, so that the £3,000,000 will be divided among about 60 per cent. In the circumstances, I think that the Government proposes to appropriate too large a sum.

I trust that the Government will alter its scheme so as to make the distribution on an acreage basis. Members of the Country party have really put up an excellent case for reducing the grant by £500,000 at least. I regret that a sales tax is to be placed on flour. I believe that the Government made a mistake in framing its budget, but it is too late now to remedy that. If the price of bread is raised to satisfy the claims of the wheat-growers, the Government will suffer in the estimation of the people. The Government has shown itself to be over-ready to subsidize an industry which, if properly organized, should not be in need of help at all.

Mr.A. GREEN (Kalgoorlie) [1.50 a.m.]. - The extravagant and unfair attack of the honorable member for Barton (Mr. Lane) on the farmers of Australia, certainly provides a sound reason for the proper representation of the farming community in this Parliament. I am convinced that, during the next election campaign, the Government, having the honorable member for Barton in mind, will exclaim “Save us from our friends.” The United Australia party is anxious to capture seats from Country party representatives, but, after the speech which the honorable member for Barton has just delivered, I believe that it will be impossible for any United Australia party candidate to win a country electorate. The honorable member has done a disservice to his own party that no future effort on his part can ever undo. He tried to prove that the wheat-farmers, through their representatives in this Parliament, were asking for help when they were not in need of it. Any thoughtful man, whether he be a town dweller, a worker, or a countryman, must know that the farmers in Australia, as in every country in the world, are, at the present time, in a particularly bad way. In Victoria, 2,000 wheat-growers are receiving monthly advances from the State Government to enable them to stay on their land. Their cases have been investigated, and it has been found necessary to help them in this way. The advances really represent a dole. In South Australia, 3,000 growers are being supported by special advances, while in Western Australia, 1,200 farmers have abandoned their land within the last two years. The wheatgrowers in Western Australia number 10,000. Of these 540 are ‘ working under an adjustment act designed to enable them to make ends meet, S37 are carrying on under the provisions of the Bankruptcy Act, while 8,000 have given liens over their properties. Thus 9,377 out of a total of 10,000 are in difficulties. The reason is not far to seek. The price of wheat has fallen to a figure which is ls. a bushel below the cost of production.

Mr Dein:

– On some farms.

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

– On most farms. The examples quoted by the honorable member for Barton regarding a return of fourteen bags of wheat to the acre are the exception, and do not prove that the great bulk of the wheat-growers are not in difficulties. The average yield per acre in Australia is less than twelve bushels.

It is true that one of tha burdens borne by the wheat industry is the interest which has to be paid on borrowed money ; but if no ‘interest had to be paid, and if the men employed were prepared to work for nothing, it would still be impossible for the average farmer to make a living with wheat prices at their present level. In the Adelaide Advertiser of the 19th October, 1932, there is published a report of the South Australian Auditor-General, who investigated costs of production in that State. This is what he said -

In many cases, interest is more than half the per acre cost of production. Tractors alone on light soil seem to be much more expensive than horses in working the farm, and on heavy soils are a doubtful proposition.

Then the following table of costs and receipts is given: -

It will be seen that the average farmer in that district of South Australia received well below his cost of production, in a year when the average price was over 3s. a bushel. As ‘is well known, the price to-day is a little over 2s% a bushel at sidings. Surely it is not too much to ask that wheat-growers should receive for wheat used for home-consumption a price at least equal to the cost of production. As the Bulletin of the 2nd November, 1932, tersely puts it -

It is wickedly unjust that of all Australian workers, the farmer alone should be denied the benefit of those higher earnings that have been made possible by protection, and if any cry is raised against an increase of the price of his commodity in this protected market, in order that he may be put on the same footing as the great majority of the population, it ought to be regarded as an utterly selfish cry.

I sincerely believe that, and am confident that no worker who gives the matter thought will question the inalienable right of the farmer, who is but a worker in another sphere, to obtain a price for his labour. Certain methods have been suggested by which this may be done, the proposal of the Government being that practically half of the necessary amount shall lie raised by a tax on flour. A couple of years ago the possibility of raising a tax on flour appeared to me to be somewhat easy of accomplishment so far as the home market was concerned ; but after examining the matter very thoroughly, I realized that the greater portion of the levy would be thrown on the poorer classes of the community, and I’ believe that, as a matter of justice, the method is wrong. It would certainly raise the issue “ town against country,” of which we have had an example in this House during this debate. Persons in industrial areas would feel that the man on the basic wage was to be made a chopping block to provide an inordinate proportion of this relief for farmers. In the circumstances, I came to the conclusion that it was an unwise form of taxation.

Mr Thorby:

– It will mean about 15s. a year per family.

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

– The honorable member has been long enough in politics to know that, unfortunately, the ruling passion of human beings is selfishness, and there is always an outcry when assistance is given to one section at the expense of another, whether it be a remission of taxation or the imposition of a sales tax on flour to help the farmers.

Judging from the present appearance of the world’s market, a person would, indeed, be optimistic if he thought that, though farmers received assistance in 1931 and 1932, and will again benefit this year, they will not have to seek help next year. I want to see a method evolved that cannot be criticized as being unjust. The Government intends to go into a long recess almost immediately, and it can do a great service to Australia if it devotes an appreciable portion of its time to the consideration of a plan such as that suggested by the Leader of the Opposition (Mr. Scullin). Viewing this matter in a non-party spirit, I believe that if a local price were fixed, and a pool arranged to enable the industry to carry on on a payable basis, there would be no need for help in the shape of bills of this character.

Mr MCBRIDE:
GREY, SOUTH AUSTRALIA

– That help would still be provided by the community.

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

– Is that not so in connexion with the whole of our protectionist policy? Some farmers have become obsessed with a desire to fight the manufacturing sections of the community because of the protection that has been afforded to them. I agree that in some instances protection has been given to industries of an evanescent character which has proved to be unjustified, but it is wrong to imagine that there is only one worth-while industry in the country and, willy nilly, to fight it. The honorable member for “Wimmera (Mr. McClelland) quoted the cost of protection to the community. My answer is that it does not matter what the honorable member for Swan (Mr. Gregory), the honorable member for Forrest (Mr. Prowse), the honorable member for Perth (Mr. Nairn), the honorable member for Fremantle (Mr. Watson), myself, or the majority of people of Western Australia think with regard to this matter, the idea is firmly implanted in the minds of the Australian people that’ we should manufacture whatever is possible in this country. It is for the Tariff Board, to determine what commodities can be manufactured under economic conditions.

The marketing policy for which I stand is that which was enunciated by the Leader of the Opposition (Mr. Scullin) who on the 3rd November, said -

page 5710

MARKETING PLAN SOUGHT

There seems little doubt that a sales tax on flour will increase the price of bread to consumers, said Mr. Scullin. A proper marketing system which would fix the price of wheat for home-consumption and give a reasonable return to the growers would not affect the price of bread to the same extent.

With the sales tax there is no control over the price of flour or the influence of the millers’ combine on bakers. With a properly constituted . pool, there would be effective control.

The price of wheat for home consumption could be fixed, as could the price of flour Moreover, the boycott of bakers who reduced the price of bread could be prevented.

page 5710

QUESTION

LIVING WAGE FOR FARMERS

Wheat-growers should not be expected to sell their product for local consumption below the cost of production. Working farmers have as much claim to a living wage as any one else. ,

Care must be taken to prevent unnecessary exploitation of the public, and this can only be done by a soundly established marketing scheme.

Mr. Scullin believes that this scheme should be based on the lines of the legislation introduced by his Government in 1930.

I feel sure that whatever difference of opinion we may have upon the methods proposed by. the Government, and which will be adopted in spite of opposition, it must be recognized that early in the coming .year it will be necessary to appoint a body to fix a local price for wheat and to provide the means whereby wheat-growers may control their industry.

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

– The margin between the price of wheat and the price of bread is disproportionate. The cost of a 2-lb. loaf of bread in Sydney is 5d., and the amount that the farmer receives from the wheat in that loaf is only Id. Consequently, the price of the wheat scarcely enters into the matter. Unfortunately, there has been a system of exploitation which has mulct the community in additional expense and denied to the farmer a fair price for his product. I am confident that no member of a trades union would object to the farmer, or any other worker, receiving a fair return for his labour. The honorable member for Reid (Mr. Gander) submitted a motion not so very long ago which was designed to assist farmers, and I know that his colleagues are actuated by the same desire. They were as keen in supporting the motion as I was in seconding it. It has been stated by honorable members opposite, that immediately a flour tax is imposed the price of bread will increase. But under a properly organized and controlled system, the price of bread should be fixed at a fair rate acceptable to millers and bakers. If a flour tax, as is suggested, is imposed, the price of bread should not increase by more than $d. a 2-lb. loaf. The Leader of the Opposition said that during the years 1916, 1917 and 1918, the average price of wheat was 4s. 9d. a bushel, and that the retail price of a 2-lb. loaf of bread was 4d. In these circumstances, it is amazing to find today, that with the average price of wheat at about half what it was in the years mentioned, the price of bread is practically the same as it was then. [Quorum formed].

An article appearing in the Sydney Bulletin, of the 6th December, supports the statement I have just made. It reads -

Several inquiries have been held into the price of bread. A. B. Piddington, who has always been a patient investigator of facts, though his opinions are not widely shared, presented a report to the New South Wales Parliament on the subject, in 1932. Dealing with the bakery business he said, “ No industry is so simple and constant in the main economic features of demand and supply . . . The amount of bread consumed per head, in

Australia, is constant. at 4 ‘lb. per head, per week.- Being immediately consumable, the necessary output limits itself or its factory, to a quantity that is known almost with exactitude from day to day.” There is no appreciable waste, no scarcity of raw material, no change of fashion - to-day’s loaf varies little from the loaf of 1914. The industry is one of the most peaceful known. Moreover, the basis of all baking becomes cheaper instead of dearer. But the price of bread seems able to move only in one dimension; it can, and does, float upwards whenever opportunity offers, but downward it rarely goes, and then with slow and reluctant step.

If the millers and the bakers wanted only a fair profit, which I dispute and which these figures controvert, and the price of flour in a 2-lb. loaf were increased by $d., that of bread would not be increased by Id. a loaf as the bakers have already announced.

Mr Thorby:

– What were the wages of bakers at that time?

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

– That question is answered in the article which continues -

The basic wage in the industry was, perhaps, 15 per cent. less than at present. Wages now, on that basis, should represent about one-sixth of producing a 4-lb. loaf against one-seventh then. The Commission calculated that with flour at its then current price, a fall in wheat of 13. 2d. per bushel should mean a fall of Id. in the 4-lb. loaf. Twelve years later, a Victorian Commission which examined 150 witnesses found that flour in a 4-lb. loaf which cost 6.502d. to produce accounted for 4d. or 4Jd. with wheat at £11 per ton. It calculated that a decline of fi 7s. 6d. in the cost of flour per ton should bring the 4-lb. loaf down id. in price. But where is the response to these principles? It was certainly evident when between 1919-21, flour rose from £11 to £19 a ton and wheat from 4s. 9d. to 9s. a bushel. Bread went up then from 34d. minimum and 4d. maximum in the various capitals (2-lb. loaf) to 5d. minimum .and 6d. maximum. But when flour came down to £16 7s. in. 1925, bread was still around 5id. for - the 2-lb. loaf, and in 1932, with flour at £10 and wheat completely ki the doldrums, the price was unchanged materially. In 1933, with wheat still lower, under 3s. in Sydney against the’ 4s. pd. which it cost at the time of the Interstate Commission Inquiry, when a 2-lb. loaf was 4d., or less, the price Qf bread still hangs around 5d., though flour has. responded to the wheat price reduction, and at. £7 10s. to the baker in Melbourne …. Even allowing for the wage increase, the loaf price should bc nearer 3d. than its present level; b.ut let everybody try to reduce -it at his -peril.1 The flour and -bread interests brook no price cutting. That * Victorian commission. found that though, the Victorian Master Bakers’ Association had several objects; its . chief function is” undoubtedly to aim at maintaining - fixed prices for bread. . . Such -is the influence of bakers, and there arc cases where the miller lias taken the extreme action of refusing to supply the offender with flour . . . However,’ case after case showed that, whatever their relations, millers and bakers were at one in thought and action when price cutting was in the wind. Evidence was voluminous and convincing that millers refused .to supply flour to the undercutter. The compilation of a black list was proved. Letters like the following were produced : - “On turning up our records we find you have fallen foul of the Master Bakers’ Association. Can you tell us the reason ? Otherwise, we are afraid we cannot supply you . . .” It has been said openly by master millers that the sales tax on flour, which is to save the struggling wheat farmers, must be passed on to the master bakers The master bakers are just as frank that they will pass it on to the public in the shape of an increase in the price of bread. Lyons and the State Premiers have a. duty in the matter. Present wage rates cannot stand a further rise in the price of bread, and there is no justification for it. If the price moves at all, it should, in the light of every finding on the industry since the war, he reduced. Not nearly enough daylight lias been shed on the doings of the trade which supplies our most universally used commodity.

Experience has proved that there will be a fight between the city and farming interests with respect to the method proposed to assist the wheat industry. I cannot see any permanency in a flour tax such as is proposed ; but some scheme, must be evolved to overcome the difficulties surrounding the present situation, preferably on the lines suggested by the Leader of the Opposition. We also have to consider what the industry is worth to us. It has been stated that unless financial assistance is rendered by the Government those engaged in wheat-growing must fail. The fact that a large number of wheat-growers are leaving their holdings is conclusive proof that wheat-growing is a languishing industry. The wool and the wheat industries are our two most important, from the viewpoint of exports, for if we are to meet our overseas commitments, which at present amount to about £28,000,000 annually, we can do so only by increasing our exports of wheat and wool. We export a small quantity of base metals and fruit, but their value is insignificant compared with the value of our wheat exports.

Mr FENTON:
MARIBYRNONG, VICTORIA · ALP; UAP from 1931

– The value of our exports of butter is not inconsiderable.

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

– It is not great when compared with the value of our exports of wheat; but even the butter producers have had to seek assistance from the Commonwealth. The wheat producers have to sell their products at world parity in overseas markets, and the time has arrived when they cannot continue to do so without assistance. When representatives of the wheat-growers waited upon Commonwealth Ministers and honorable members a few weeks <ago, one representative said that the wheat exported during the last three years was valued at £93,000,000. My figures make the value somewhat less than that. When the Leader of the Opposition was Prime Minister, he informed the wheat-growers that it was necessary to increase production and exports to strengthen our financial position in London. During the last seven years, we have exported annually an average of 118,000,000 bushels, which, at 3s. a bushel f.o.b. - it would be a higher price two or three years ago - would be valued at £16,500,000 annually. We have also to consider whether the 60,000 or 70,000 wheat-farmers, their families, and those dependent upon them, as well as those indirectly employed as a result of the industry’s activity, are to be allowed to drift on to the unemployed market, or to search vainly for employment in some other direction. The business given by wheat-growers to the State railway systems is enormous and the average freight paid by each farmer represents a large amount annually. He has to pay freight or his superphosphate, cornsacks, machinery, and other “requirements, most of which come from the seaboard, and also on the wheat which he transports for shipment overseas. One wheat-farmer pays more in railway freights than is paid by 1,000 city residents.

Germany has raised its tariff wall to prevent importations of wheat, except in limited quantities, and wheat in that country is bringing 14s. 6d. a bushel. In Great Britain the price has been raised to 5s. 7£d. a bushel, and in France and in Italy the price is also high. Great Britain is the only one of three large importing countries that is taking our wheat. If we continue to export, our sole remaining market outside Great Britain will be in the East, where we shall have to compete with subsidized wheat carried in subsidized shipping from America. The future, therefore, is very dark indeed. Apart from the establishment of a wheat pool, I cannot suggest a way out except by a readjustment of our overseas indebtedness. Formerly, every bushel of wheat that we sent abroad paid so much interest upon the money we owe to the Old Country. To pay the same amount of interest to-day, we are obliged to send from two to two and a half bushels of wheat. When we ask our farmers to produce more wheat to enable us to meet our oversea obligations, we are engaged in a chase, which, if continued, must finally lead to chaos. If Britain, whose commercial honesty has never been impugned, and whose example we are generally exhorted to follow, finds it necessary to say to America, “ So far as our debt to you is concerned, we can only give you a token payment “, surely we ought to be able to come to some arrangement with our creditors whereby a bushel of wheat shall suffice to pay the proportion of interest upon our indebtedness that it previouslypaid. Sooner or later, unless the price of world commodities rises - and I do not see any immediate possibility of that - some arrangement of this kind will have to be arrived at, rather than that our people should be bled white in attempting to do something which no other country is endeavouring to do.. I hope that, during the long recess upon which we areabout to enter, the Government will take the farmers of the community into its confidence, and seek advice regarding the establishment of a compulsory wheat pool. I hope that long before April or May some* scheme will be evolved so that our primary producers will know what isgoing to happen to them next season, instead of being obliged to wait until next November or December.

Mr DENNIS:
Batman

.This is one of the most important questions that the House has been called upon to consider. Whether one represents a country or a metropolitan constituency, there are no two opinions about the desirability of our wheat-growers and other primary producers receiving some very necessary encouragement to remain upon their holdings. Although I represent a metropolitan constituency, I have relatives who, for some years, have been working land in the Mallee. I know the difficulties they have to encounter, as I happen to hold a mortgage on property there, and, from time to time, have been interested to hear the talk of honorable members in this House concerning the high rates of interest which are strangling the farmer. As a matter of fact, during the last three and a half years, I have received no interest under that mortgage. At present it is impossible for thewheatfarmer to meet his interest charges.

There are no two opinions as to whether the wheat-growers should be granted some measure of relief. But there are two opinions as to the means by which the requisite money shall be raised. That is where I join issue with the Government. I cannot agree to its collection of revenue by means of a tax upon flour, which is synonymous with an. increase in the price of bread. I do not believe the statements made during this debate that bread can be sold at the same price as it is being sold at to-day, after a sales tax of £4 5s. per ton has been added to the cost of flour. In Melbourne, the present price of a 4-lb. loaf retailed in the shops is 6d. ; delivered in homes north of the Yarra, it is 7d. ; and delivered in homes south of the Yarra, it is7½d. More than 2d. a loaf is absorbed in its delivery.

During the discussion of this measure we have heard a good deal about the master bakers and the millers. The millers certainly appear to be doing fairly well, but I know that in Melbourne and its suburbs, many of the master bakers are in the hands of an official receiver. They are in much the same position as many publicans. The bakers’ shops are tied shops, and usually some particular miller has a lien over them, and supplies them with flour. I could take honorable members to some of the largest bakeries in the northern suburbs of Melbourne, and show them shops and bakehouses which are in the hands of the millers. I oppose the proposed flour tax because the poorer people of the community will be called upon to pay it.. I agree with the statement made by previous speakers that the workers usually have the largest families. The poorer a man is, the larger the family he seems to have: Because of the statement made in this House by representatives of the Country party and of the Labour party, that to afford help to those who will pay this tax, it will only be necessary to ask the Arbitration Court to add the amount of the tax to the basic wage so that the worker will not lose by it. I have taken the trouble to secure a census of the householders in the street in which I live. Excluding six, whose occupations I do not know, there are 26 heads of households - a blacksmith, three men who are on the retired list, two pensioners, two drivers of taxi cabs, three widows, one music teacher, two mechanics, two railway employees, a police constable, three men who are out of employment, one clergyman, two hawkers, a dairyman, a contractor, and a salesman. Out of these 26 householders, only five may receive an advance in their wages if it can be shown that the cost Of living has increased. I refer to the blacksmith, the two mechanics, and the two railway employees?

Mr.Gabb. - What about the pensioners ?

Mr DENNIS:

– The amount involved would not be sufficient fo give them the advantage, under the new bill, of the provision that payments shall be. regulated upona sliding scale. There is in my electorate a very large institution known as The Little Sisters of the Poor, which provides accommodation for between 200 and 300 men. To that institution the increased cost of bread will be a very serious item. Then, there is the Old Colonists’ Home. Probably 70 or 80 families are accommodated there, and they will feel the pinch acutely. I have told the Government that I am in favour of affording relief to the wheat-growers, but I am not in favour of the proposed tax upon flour. That is my position to-day.

Mr Makin:

– That is the best part of the honorablemember’s speech.

Mr DENNIS:

– It may be, but it will certainly not give me pleasure to cross the floor of the House to vote with the honorable member. I have a little more freedom than the honorable member enjoys. I understand that he has to accept majority rule, whereas I am able to please myself. I intend to vote against the sales tax, but I am in. favour of. relief being given to the farmers, because I believe that some form of assist ance is absolutely essential to enable them to carry on, and produce the wealth necessary to enable this country to meet its obligations. Instead of assistance being given by means of a sales tax on flour, the money should be provided, as previously, out of loan.

Mr BLAKELEY:
Darling

– Members of the Labour party only accept the bill as an expedient. We are compelled to accept it because the farmers are almost in the middle of the harvest, and all they have been offered is this muddled scheme which satisfies no one, so far as I am aware. We support it because the bungling and shillyshallying that have been going on for the last two months has made impossible the preparation of a well ordered and efficient marketing plan. Even were there time, and even if this Government could make up its mind to bring down a proposal to establish a wheat pool, it is doubtful that its supporters would deal a blow at private enterprise. For many years the Labour party has advocated the establishment of a wheat pool controlled solely by the people engaged in production, but those who are opposed to such a scheme have always attacked it on the ground that Labour desires to have its finger in every pie, and to control and socialize everything upon which it can lay its hands.

The objective of the Labour party is the socialization of industry. We believe that the best interests of this country would be served if we could eliminate, so far as it is humanly possible, the middlemen who stand between the producers and consumers. But when a definite proposal to establish a pool was placed before the farmers, the Dalgetys, the John Darlings, the Louis Dreyfus and all other interested sections, had their organizers’ travelling through the country, pulling strings here and urging there, to such effect that they were able to prevent the establishment of a Commonwealth wheat pool, and even, in the number of instances, the establishment of State pools. But the time is fast approaching when the farmers will look to the Labour party, as the only truly democratic party in this Parliament, for relief from their troubles. They will turn to the Labour party, because they have nothing iri common with the Conservative elements that stand for private enterprise in the marketing and handling of all the primary products. It has taken this depression to teach the farmers of this country that their only hope lies in the fulfilment of the Labour party’s policy for -the socialization of industry. They have more in common with the ideals of the Labour party than with the objectives of the Nationalist or Country parties, because Nationalism is conservative in its outlook and “worships at the shrine of vested interests - money is its god and dividends must be paid, irrespective of the fate of the ordinary individual in the community. The Country party is perhaps the more conservative of the two parties opposed to Labour, and its policy holds out no hope for the man on the land.

The Labour party has always laid it down that the farmers are entitled to an adequate return for their capital outlay and their labour, and it proposes to give it to them by the establishment of an efficient and well-ordered marketing scheme, the control of which will be in their own hands. Such a scheme will be made possible by legislation introduced by a Labour Government and passed by a Labour majority in the Federal Parliament and, if necessary, by complementary legislation issuing from the State Parliaments. Under it a definite price will be fixed for wheat required for home consumption, and gambling, which is inseparable from the bartering which goes on among the brokers under the present system, will be completely eliminated.

The proposal now before the House is fundamentally different from the one which would have been brought forward by a Labour Government. We are opposed to private enterprise. We believe that it is unprofitable, wasteful, and extravagant, and because of its inefficiency in the sale and distribution of primary products, the producers must suffer. The wheat-growers have never had an adequate return for their labour, and the consumers, on the other hand, have been called upon to pay much more than is reasonable.

The Government’s state of mind, if such it can be called - it has not been static for many days - is revealed in the interminable Cabinet meetings and the reports of conflict between various members of it. Even when Cabinet made up its mind, and submitted its proposals to its supporters, the smoke and dust issuing from the party room was “further convincing evidence of the sharp clash of opinion even there; and we have had still further evidence of this difference of opinion in speeches made from the Government benches to-day. After the meeting of Government supporters which had been called to consider the proposals, there was the joint meeting of the two conservative parties, and the Country party, as usual, like Oliver Twist, still asking for more,, was able to impose its will upon the Government. Ministers made an ignominiousbackdown and allowed a mere handful of mcn belonging to this minority party to dictate their policy. Out of all this* travail there has issued this muddled! scheme, which does not offer much help to the wheat-growers, apart from the sum of money to be made available to them.

Mr Stewart:

– Is not that real help?

Mr BLAKELEY:

– In one way it is not, because the Government has not yet brought down a practical scheme for the efficient organization of the industry. This muddling has been going on from year to year, and even now, although the harvest season is well advanced in some’ districts, no plan likely to be of lasting benefit to the farmers has been evolved.

Mr Stewart:

– At what period of the harvest would a compulsory pool he of value to the farmers?

Mr BLAKELEY:

– The Minister knows perfectly well - no one .knows better - that to render real help to the wheat-farmers, the Government’s proposal should have been brought down at least a month or six weeks ago. Everyone knows of the Government’s inability to make up its mind with regard - to the precise nature pf the proposal to assist the wheat-farmers. The result has been the introduction of a stop-gap scheme, under which the only benefit to thefarmers will be the amount of money that is to be made available. There is no> mention of an orderly marketing, scheme. The farmers are still to be left to the; tender mercies of the Dalgetys, the Golds’ brough Morts, the John Darlings, and all the others who have, been exploiting them for so many years.

Mr Gibson:

– The harvest will be over before we get this bill through.

Mr BLAKELEY:

– Blame for that cannot be laid at the door of the Labour party. The farmers are entitled to a fair return for their labour, and members on this side of the House desire that they should get it by means of a well-balanced marketing scheme under which private enterprise will not participate in the handling of the farmer’s wheat. The same principle can be applied to wool with just as much benefit to the growers, because they are in the same position as the farmers in relation to the brokers. But whenever ah attempt is made to establish a more efficient system for the marketing of wool, the same forces are operated to defeat it. If it were possible to give every wool-grower in Australia a vote on this subject, I should have no doubt about the result ; but, under the pre- sent system, the influence of the Dalgetys and the Goldsbrough Morts prevents the establishment of a proper system for the marketing of wool.

In order to find the money to assist the wheat-growers the Government proposes to impose certain taxes on the people. Not many weeks have passed since Ohe Treasurer introduced his “ prosperity budget “, in terms of which taxes amounting to £7,500,000 were- remitted, more than half of the remission going to the wealthy sections of the community. The Government may claim that the workers derive some advantage from the reduction of the sales tax; but the relief granted in other directions is a sop to its wealthy friends - the big companies which play so important a part in the politics of this country, and the big land-holders to whom the land tax was anathema. Even the brewers were not forgotten. To-day, when the people cry for bread, the ‘Government gives them beer. No sooner are the friends of the Government placated by remissions of taxes, than further taxes are imposed, this time on the workers and- their families. Whether intentional or not, the fact remains that the Government’s latest form of taxation definitely reduces the standard of living of the workers. A married man with a family who is in receipt of £3 a week buys probably twice the quantity of bread that is bought by a family whose income is £2,000 a year. Bread is only incidental to the rich man’s menu. This stable article of food in the life of the majority of workers is to be increased by Id. per 2-lb. loaf. Even the brewers were generous enough to give their customers larger glasses of beer, but I have not heard of the bakers proposing to bake a bigger loaf in order to make up the difference between the actual cost to them of the flour tax and the Id. per 2-lb. loaf by which they intend to increase,the price of bread. While the millers and Che bakers rob the people, the Government smiles complacently and promises that “in the sweet bye-and-bye “ a royal commission will be appointed. Some day we may know the recommendations of that royal commission; but in the meantime the people will pay more for their bread. [Quorum formed.’) Unless drastic and early action is taken, the bakers will obtain a rake-off of over £500,000 owing to this clumsy legislation.

Mr Stewart:

– The honorable member’s calculation is based on the assumption that bread will be increased by Id. per 2-lb. loaf throughout Australia, whereas the . increase will be only -Jd. a loaf in respect of 40 per cent, of the flour used.

Mr BLAKELEY:

– Until a proper actuarial calculation has been made, it will not be possible to say definitely what the position is; but the figure that I have mentioned has been quoted by a number of authorities.

Mr Stewart:

– I have more authentic figures.

Mr BLAKELEY:

– If the officers of the department have made an investigation and prepared other figures, I am willing to accept them

Mr Stewart:

– The price of bread is being increased by only id. for a 2-lb. loaf in New South Wales. There will be no rake-off’ to the bakers in that State, in which 40 per cent, of the flour used in Australia is consumed.

Mr BLAKELEY:

– When the longpromised investigation has been made we may know the position better. The present bill is in the interests of the bakers rather than the people. Members of the Country party have told us how, in their opinion, this country should be conducted: they have emphasized the necessity for reducing customs duties, for freetrade and competition in industry, and for doing away with the policy of protection to Australian industries. Of the members of that party it can at least be said that they are consistent and unashamed of their policy.

Mr Thorby:

– Not one member of tho party has advocated freetrade. “Why does the honorable member not try to be fair and truthful?

Mr BLAKELEY:

– A member does not necessarily need to advocate freetrade openly for others to know what he means. The honorable member for Calare (Mr. Thorby) knows What at least two members of the Country party would vote for absolute freetrade, excepting, of course, in respect of potatoes and onions. His interjection wa3 made with the o’bject of getting his name into Ilansard.

Mr Thorby:

– That statement is incorrect, and the honorable member knows it.

Mr BLAKELEY:

– The honorable member for Forrest (Mr. Prowse) made his usual. f freetrade speech, as did also the honorable member for Swan (Mr. Gregory). They would have freetrade in everything except those products ‘in which they are personally interested. The honorable member for Calare advocates freetrade one day and protection the next. He has the selfish outlook which is characteristic of members of the Country party. The members of that party do not care where the money to assist the wheat-farmers comes from. They are always willing to grease the fat pig. Instead of adopting the proposal contained in this measure, it would have been better to adopt the sound principle enunciated by the Labour party, and submitted in the form of an amendment of the. budget. That principle must ultimately apply, if not only the primary producers but also other sections of the people are to be given a fair deal.

Mr McBRIDE:
Grey

.- I have heard sufficient during this debate to realize that honorable members generally are agreed that the wheat-growers of Australia are in need of assistance. There has been some condemnation of the wheat- farmers because they have applied for government assistance, but the Government i3 not altogether free from blame for tho present position of the wheat-growing industry. It has been said that one cause of the present world depression in the wheat, industry is that European countries have greatly increased their production of wheat during recent years. The fact is that they are only now returning to their pre-war production of wheat. Between 1909 and 1913 the average annual production of wheat in Europe, excluding Russia, was 1,347,000,000 bushels. Between 1919 and 1923 the average fell to 1,073,000,000 bushels. After that it increased, until between 1929 and 1931 the average annual yield wa3 1,413,000,000 bushels. Those figures show that the pre-war production of wheat in European countries has only recently been overtaken. The exporting countries, Australia included, have greatly increased their production. The total quantity produced was 1,124,000,000 bushels in the period 1909-1913, and 1,628,000,000 bushels in the period 1929-1931, an increase of over 500,000,000 bushels. Countries that have lost their export market have been compelled to produce their own wheat. Discussing this matter with Dr. Krause who has been in Australia for eighteen months studying the economics of wheat production, I was informed that it is not particularly the desire of Germany to produce its own requirements of wheat, but that it has been compelled to do so because other countries have refused to buy its manufactured articles. That applies to the majority of European countries. In this connexion, action by the Commonwealth has had a definite effect on the marketing of Australian wheat. A good illustration of the effect of the fiscal policy was furnished only recently, when Belgium threatened to exclude Australian barley and meat because of the selfish attitude adopted by Australia, principally in connexion with the embargo imposed o’n the importation of Belgian glass. The imports of that glass in the last year before the embargo was imposed were valued at only £9,000, whereas Belgium’s imports of Australian barley in the same period were valued at £300^000. Obviously, it is unjust to endanger an industry of that magnitude in order to protect another industry of minor importance to Australia. The increased production of wheat has made it necessary to look for additional markets, and last year we were fortunate in securing a market in the East for 54,000,000 bushels. There is a definite attempt to prevent the development of that trade, and it will ultimately be lost to our wheat-growers if Australia refuses to allow the importation of some of the products of China and Japan.

The House is almost unanimously in favour of the amount suggested by the Government as the extent of the assistance to be given to the wheat industry. The principal bone of contention, apparently, is the manner in which the money shall be raised. The greatest objection is* offered to the imposition of a tax on flour, and it has been suggested that the Government would have been better advised to introduce a scheme under which the wheat-growers could have demanded a home-consumption price for their product. I contend that, in essence, there is no difference between the two methods. The Leader of the Opposition (Mr. Scullin) went to great- pains to show that there has been a marked disparity between . the price of bread and that of wheat over a series of years, and argued that a flour tax would add to the burden on the consumers. As that disparity already existed, the suggestion of a flour tax was not needed to prove that action was necessary to protect the consumers of bread. The right honorable gentleman has shown that the price paid by the miller for wheat does not justify, the price charged for bread. I, therefore, suggest that he has merely drawn a red herring across the track by his condemnation of this method of raising money that, in his opinion, will increase the disparity between the price of wheat and that of bread. If action is necessary to protect the consumer of bread from the exploitation of the miller or the baker, it should be taken irrespective of whether or not there is a flour tax. I consider that the imposition of such a tax will not increase the price of bread to a greater extent than would a home-consumption price of’ wheat. The political reactions might not be -the same, but the effect on the price of bread would be no different. Therefore, the suggestion of a home-consumption price is only political camouflage.

Very strong exception to the tax was taken also by the honorable member for West Sydney (Mr. Beasley). It is rather difficult to understand the viewpoint of the group in this House, of which that honorable member is the leader, in view of the fact that the first flour tax in Australia was imposed by Mr. Lang, in New South Wales. The honorable member for West Sydney contended that Mr. Lang had taken precautions against the exploitation of the consumers. Apparently, those precautions were not adequate because, although a big proportion of the tax has been removed, bread is dearer in New South Wales than in any other State. I question the bona fides of the Government, led by Mr. Lang, in the imposition of that tax. It was announced at the time that its purpose was to raise money to assist necessitous farmers, but so far as I have been able to gather, no farmer in that State has benefited from the money so collected.

I cannot understand why flour should be regarded as sacrosanct. As has already been stated, a flour tax was imposed in Great Britain for the purpose of giving the producers of wheat a homeconsumption price. Last year, £4,750,000 was raised by means of that tax, and the price paid to British farmers for wheat was 5s. 7Jd. a bushel. I have not heard it suggested that a home-consumption price of anything like that amount is necessary in Australia. The farmers of this country are quite prepared to accept a very much lower price.

I entirely endorse the suggestion of the Government that a committee be appointed to investigate the economics of the wheat industry, and that the industry be given power that, would enable it in future to obtain a homeconsumption price. I consider, however, that there is no necessity’ to adopt the suggestion that has been made from the other side of the House.

The members of the Opposition have tried to camouflage the position and to mislead the other members of the House, by stating that in order to bring about the orderly marketing of wheat, it will be necessary to introduce a compulsory pooling system. Recently, this House passed two measures, the objective of which was to bring about the orderly marketing of, and a homeconsumption price for, butter and dried fruits, but in neither instance was it suggested that a compulsory pool should be established for that purpose. As a matter of fact, there is no necessity for a pool in connexion with the wheat industry. While the- farmers at present have full power, if they so desire, to market the whole of their wheat through one channel, it is interesting to note that they have not adopted such a scheme. In 1921, a voluntary wheat pool was established in South Australia, and in that season it received from the farmers 39 per cent, of the marketable wheat of that State. In 1931, the quantity of wheat handled by the pool was 60 per cent, of the marketable wheat, but, afterwards, the scheme fell into disfavour, because the following year the quantity handled fell to 24 per cent., and the year after that to 19 per cent, of the crop, showing clearly that this method of cooperative marketing has not met with the approval of the farmers of South Australia. I believe that the other States have had a similar experience. A compulsory pool was established during the war, and operated in 1916 and 1917. Only recently I saw mentioned in the Advertiser the fact that the final settlement of the accounts of the pool has not yet been made. That certainly is not evidence of any great efficiency or service in respect of the method of marketing under a pooling system. There is no intrinsic merit in a compulsory pool or in having one channel of marketing, and the system is not conducive to efficiency or to high prices for wheat. So far as I know, no country has had a compulsory pool which has been proved to be beneficial to the producers concerned. The honorable member for Darling (Mr. Blakeley) has referred to wool as being one of the commodities which should be marketed through a pooling system. As has been maintained by the anti-poolers in this House, that method of marketing has no virtue and would probably be of disadvantage to the wool industry. Wool is the one commodity in respect of which prices have recovered, and it is the one industry which has refrained from entering into any artificial scheme for the fixation of prices for the orderly marketing of wool through the channel of a compulsory pool. ‘

One portion of the bill to which I take strong exception, is the clause which seeks to confine the assistance to wheatfarmers who last year had no taxable income. Over a period of years, many industries have been supported by way of bounties, and in not one instance has discrimination been exercised as between the producers in any one industry. In 1932-33, the gold industry received a bounty of £96,000, and at that time that industry was probably the most profitable in Australia, because of the definite increase in the price of gold. In the same year, bounties were paid as follows: - Cotton yarn, £36,000 ; cotton seed, £5,000 ; wine, £128,000; sulphur, £46,000, and on steel and iron products, £10,000, or a total of £421,000. When those payments were made there was no suggestion that the producers who had made a profit should be excluded from the bounty. In view of that fact I shall at the committee stage endeavour to amend the clauses of the bill, which I consider are objectionable. Numerous telegrams have been received by me from various bodies representing the wheat producers, and one which I received from the president of the Wheat-growers Association of South Australia reads -

Growers seeking justice strongly resent definite suggestion charity contained* sections B and 7 Relief Act. Enter emphatic protest on behalf of the Wheat-growers Association.

From my knowledge of the membership of that association, few, if any& of the members will be excluded from the provisions of this measure, but in spite of that and of the fact that the greater the number of farmers excluded from the bill the greater the benefits to those who receive assistance, this association ‘has definitely protested against the discriminating provisions in the bill. I shall support the second reading of this measure, retaining the right to vote against certain clauses at the committee stage.

Mr WATKINS:
Newcastle

– I join with other honorable members who have protested against the proposed method of financing this scheme. The wheat farmers have asked for assistance on more than one occasion, and i their requests have never been refused by a Labour government. There seems to be some- disagreement among the supporters of the Government in respect of certain provisions of the bill. The honorable member for “Wakefield (Mr. Hawker) is certainly not in agreement with his own party, and there seems to be a rift within the lute even among the members of the Country party. The Labour party is always willing to help the producers so long as their representatives in this chamber are willing to reciprocate by assisting the secondary industries. As has been stated by previous speakers, much of the land which is growing wheat to-day was purchased at prices far beyond its productive value, and that is the real cause for most of the troubles that are besetting the wheat industry. Before modern farming appliances were invented and the old horse plough was used, the farmers in New South Wales could make <& profit at a price of 3s. a bushel.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– They could make a profit if wheat were selling at that price now.

Mr WATKINS:

– Would -the honorable member be satisfied if the farmers received 3s. a bushel for their wheat?

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– Tes.

Mr WATKINS:

– When the producers were receiving 3s. a bushel, they asked for 4s. In Canada, wheat is sold in the fields at a price something under one dollar a bushel, but when it reaches Winnipeg it may be sold and gambled for ten times in one day. In Canada wheat is graded into ten different classes, but in Australia it is not graded at all; all farmers, good and bad, get the same price. Nobody comes to the assistance of the mining and coal industries, but every year the wheat-growers seek help from the Government. Owing to the great improvement of machinery, particularly since the war, the volume of production has increased to such an extent that the year’s requirements of the people of the world are supplied in about four months, and for the remainder of the year large numbers are unemployed. Insufficiency, of currency is another cause of the present trouble. No attempt has been made to .prevent a rise in the price of bread.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– What does the honorable member regard as a fair Australian price for wheat?

Mr WATKINS:

– The highest price that the farmers can get for it. The problem of the wheat industry must be considered from many points of view. We on this side say, “ Hands off the f food of the people. You must not increase the price of the bread of the poorer sections of the community. They can ill afford to pay such a tax “. The Government should reimpose some of the taxes of which the wealthy sections have been relieved, instead of placing increased burdens on those who find it difficult to buy any food other than bread.

Mr GABB:
Angas

.- I do not intend to discuss the wisdom of establishing a compulsory wheat pool, nor do I intend to debate this measure at any length, because, with one exception, every honorable member who has spoken, favours the granting of relief to the wheat-growers. The exception is the honorable member for Barton (Mr. Lane), who probably knows more about Manly and Coogee flats than about the Murray flats and the wheat-growing industry. If he had visited certain parts of my district in times of drought, when the farmers and their families have lived on. pollard and rabbits, he would not have made the reflection which he has cast upon this deserving section of the community. I have received a telegram from Mr. J. Nairn, President of the Wheatgrowers Association of South Australia, as follows : -

Growers seeking justice. Strongly resent definite suggestion charity contained sections 0 and 7 Relief Act. Enter emphatic protest behalf Wheat Growers Association. 1 am not quite clear as to what is meant by “ growers seeking justice “. Possibly the association considers that as the Government has entered into an agreement which restricts exports, it, should grant financial assistance to the industry. Perhaps it is thought that the burdens placed upon the growers because of the protection given under the tariff to secondary industries are so great that this help should be granted. If I find that I have to choose between accepting, the bill as it stands or no bill at all, I shall support the measure, even if it involves a charitable grant to the growers, because many of them are in dire need of financial assistance, and “will not he much concerned whether the grant is made as an act of charity or as a matter pf justice.

I rose to speak mainly about the proposed sales tax on flour. The House is in general agreement as to the necessity to grant financial assistance to the growers, but a division of opinion has arisen as to how that assistance should be provided. On two previous occasions I have said that the Government has brought down a gambler’s budget, and probably it now realizes how useful it would have found a couple of million pounds of the amount that has been remitted by way of taxes to sections of the community not in such dire need as the wheat-growers. I am opposed to the borrowing of the £3,000,000 required to help the growers this season. The future has already been too heavily mortgaged. I support the flour tax, in spite of the telling speeches that have been made against it on the ground that it is a class tax. Although some’ justification for this claim could be advanced, the need to grant assistance to the industry is most urgent. The tax may awaken the people of Aus- tralia to the fact that we cannot go on much longer as we have in the past - each industry taking in another’s washing. Provision has ‘ been made to assist the dried fruits and butter industries, and it is rumoured that wheat is now to be brought within the same category by fixing a home price at a figure sufficiently high to ensure a certain average price to the growers. As the primary industries are all penalized by the tariff, the imposition of a flour tax, which will raise the cost of the bread of the workers, will eventually convince the community that, instead of granting assistance to individual industries, a general review of the position of Australian industries is required. I believe that the imposition of a flour tax will convince the people that we cannot go on as we have “been doing. We should be grateful that this tax is to ‘be in operation for only seven months, and for that reason I feel easier in my mind in supporting it. I do not support it willingly, and if in place of it I were able to force the Government to reimpose taxation on the wealthy section of the community, I should do so. There is, however, no possibility of that, and so, much as it grieves me to do so, I shall support the imposition of the tax. I am also influenced in supporting the tax by the fact that, in South Australia, wheat-growing is, if not the largest, certainly the second largest, industry, and also because the primary producers of that ‘State, who have suffered under the tariff in order to benefit the eastern States, will be recompensed to some extent at the expense of those States through’ the incidence of the flour tax.

Mr RIORDAN:
Kennedy

. The honorable member for Angas (Mr. Gabb) said that, though he was opposed to the imposition of a flour tax, he would support the bill because he realized that there was no chance of compelling the Government to recast the ‘budget. If every honorable member supported every proposal of the Government because he thought there was no chance of successfully opposing it, we should all be supporting the Government. Only a couple of days ago, the Government was defeated twice on two separate bills, and the honorable member for Angas (Mr. Gabb) voted with the Opposition, and against the Government.

When the budget was introduced this year, the honorable member for Angas described it as a gambler’s budget. I agree with him, and I think it is a pity that the Government did not leave a couple of millions in “kitty” to meet unforeseen circumstances, such as assisting the unemployed wheat-growers. The Leader of the Opposition (Mr. Scullin) pointed out that, if we had to import wheat, it would cost us 4s. a bushel. If that is so, then 4s. is a fair Australian price. This matter has not been sprung on us over night, as it were. I have been hearing of the need for assisting the wheat-growers ever since I entered this Parliament in 1929.

Mr Thorby:

– And the trouble has not yet been remedied.

Mr RIORDAN:

– When the Seullin Government tried to remedy it, the party to which the honorable member belongs brought about the defeat of its proposals. Three different bills providing for assistance to the wheat-farmers were sent to the Senate, and all of them were defeated and. not returned to this chamber. In this case, the Country party will use its numbers to carry the flour tax against the Opposition, and those members of the United Australia party who have threatened to break away from the Government party over this issue will cross to this side of the chamber when they see that the Government is safe. .The members of the Country party, though they have not got all they want, have got some of it, and they are, therefore, prepared to vote for a tax on the ‘bread of the people. For the last four years the party to which the honorable member for Calare (Mr. Thorby) belongs has been trying to help the wheat industry by putting a tax on the bread of the people.

Mr Thorby:

– The same thing applies to the sugar industry.

Mr RIORDAN:

– The sugar industry has organized itself, and is controlled by a body representative of the growers. There would be no objection to the wheat farmers doing the same thing. “Whenever an attempt is made to enable them to organize, however, the middlemen who exploit the farmers are able to have the proposal defeated. I well remember hearing the late honorable member for Wimmera (Mr. Stewart) plead for the formation of a compulsory wheat pool to assist the growers, and no one can say that he was not a practical farmer, because he was himself engaged in the growing of wheat.

The Scullin Government, when it brought down its fiduciary notes proposal, gave Parliament an opportunity to agree to a grant of £6,000,000 to the wheatfarmers. Twelve million of the fiduciary money was to be devoted to the relief of unemployment, and £6,000,000 to the relief of wheat farmers. We were then told by members, who now support the Government, that the fiduciary notes would not be real money, because they would not bear a promise to pay in gold. Since then, notes have been issued which bear no such promise. They are fidusary notes, and the only difference is that they have not been issued for the relief of unemployment, or for the assistance of wheat-farmers. Last year, a bounty of 4½d. a bushel was paid to the wheat-farmers, and for six or seven months of this year a flour tax is to be imposed for the same purpose. What is going to happen after that ? What arrangements are being made to market the crop next year? The Government is hoping that something may turn up as happened in the case of the wool industry. When that industry was down-and-out, a little while ago, appeals were made to the Government, not for a direct grant, but for a reduction of freight charges, taxation and interest rates. Though the Government obtained the benefit of a substantial reduction of interest rates on its own debts, it took no measures to enforce a corresponding reduction of the interest rates charged to the primary producer.

The Labour party stands for protection, and is prepared to extend protection to the wheat industry as well as to others. I have no doubt that it would be well to hold an investigation into the wheat industry, from the growing of the grain to the retail distribution of bread. The Government should remember that, “when a royal commission was appointed to inquire into petrol prices, the price fellfrom 2s. 3d. a gallon to ls. 8d. and ls. 7d. The same thing may happen with regard to bread. We have been told that, for every increase of 27s. 6d. a ton in the price of flour, the price of bread increases by id. per 2-lb. loaf. In October, 1933, the price of bread in Brisbane was 4$d., and the price of flour was £9 17s. 6d. a ton. It costs £16 a ton to transport flour from Brisbane to Mr Isa, yet bread in Mr Isa is only 2d. a loaf dearer than in Brisbane. On that basis a 2-lb. loaf would have to be sold at Alice Springs for ls. 6d. if the baker were to make a profit. On a basis of one farthing for every 27s. 6d. a ton in the price of flour, the price of bread with flour at £8 a ton should be only 2½d. a loaf. The following prices obtained in Queensland for flour and bread during the years that I shall mention : - la October, 1933, flour cost £9 7s. 6d. a ton and a 24b. loaf of bread cost 4$d. ; yet the Queensland wheat-grower was receiving 3s. Bid. a bushel at sidings and 3s. 7£d. in Brisbane. At the same time flour was £9 a ton in Sydney, and New South Wales wheat-growers received 2s. 9£d. a bushel for bagged wheat. In Melbourne, flour was £7 10s., and in Adelaide it was £7 5s., growers in South Australia being paid 2s. 5d. a bushel for their wheat.

It is quite unnecessary to pass a .flour tax on to the consumer, and even if it were necessary, it should not be borne by the poorer section of the community. Twenty-eight per cent, of our population are either unemployed or is on relief work, or receiving only two days’ work each week, for which they are paid 26s. a week in Queensland and 22s. in other States. Married men on that income will have to bear this additional taxation which, at the rate of 2d. a loaf, works out at £2 12s. a year. These people cannot afford even to buy vegetables, but must live on bread and meat, and the cheapest of meat at that. Already there are taxes on tea, tobacco and other commodities used by the poorer classes, to make a taxation holiday for the wealthier sections.’

Members of the Country party who are so enthusiastic about imposing this tax continually cry out about the .price that is charged for food for animals, and I was pleased to hear the honorable member for Henty (Sir Henry Gullett) take the Government to task for exempting the food for hogs, horses, cattle and other animals while it taxes food for human beings. The honorable member was in his best form, and his speech was as brilliant as that notable’ one of a few years ago in which he referred to the right honorable member for Cowper (Dr. Earle Page) as the “ tragic Treasurer “.

I understand that the Northern Territory is to be exempted from the .application of the flour tax, and I congratulate the honorable member for the Northern Territory (Mr. Nelson) for having fought so well as to bring about that result. I hope that the Government will also exempt far distant places in Queensland, such as Camooweal, Boulia, Uran.dangi, Burketown, Normanton, George town, Einasleigh, Forsyth, Chillagoe, Mareeba, Hughenden, in the north-west down the Gulf, and from Emerald rightthrough to Winton and down to Birdsville. It costs from £10 to £12 a ton to transport flour from Brisbane to Emerald or Barcaldine, and unless flour supplied to such areas is exempted, the inhabitants will have to regard bread as a luxury rather than as a staple diet to be enjoyed with a little salt mutton.

The policy of the Government has been to grant remissions of taxation to the wealthy and mulct the poor in impositions such as this. The Government boasts that last year it made taxation remissions to the extent of £10,000,000, yet now it proposes to take £1,500,000 from the poorest section of tobe community. It also sets out to take £130,000 from the smokers of the country, but its purpose is merely to increase the revenue. There might have been some excuse for this increase had its purpose been to increase the scope of the Australian tobaccogrowing industry and encourage some who are now unemployed to go on the land, grow tobacco, and help to create a greater home market for the products of wheat-growers and others. The Government should place an even higher duty on tobacco to compel Australians to smoke their own product.

I noticed in the Melbourne Herald that flour mills in Victoria are working three shifts, night and day,_ to manufacture flour for export. As the Leader of the Opposition (Mr. Scullin) pointed out on Tuesday night,- millers make an exceptionally high profit. The Government should not permit them to exploit any section of the community. It should have the position thoroughly investigated, .and allow the millers only a fair return, such as is given to farmers and industrial workers. .1 hope that honorable members will vote solidly against the imposition of a flour tax, as it is evident that many other avenues of securing the necessary money could be exploited.

The honorable member for Grey (Mr. McBride) declared that voluntary pools had been unsatisfactory to producers. That is not a fair statement. They have failed only because they have been improperly handled, the selfish man having been allowed to refuse to join the pool and use the market to his own advantage. In Queensland, 90 per cent, of the primary producers associated, with wheat, peanut, butter and other pools, would support a continuance of the pooling system. A compulsory pool is the only way in which the Australian wheatgrowers will be able to obtain better returns from their products than they have received in recent years.

During the last three years, I have been devoting some attention to the activity, or lack of activity, of several new departments, including the Department of Commerce. Since the present Minister (Mr. Stewart) has been controlling that department, there has been a marked improvement, and I am pleased to say that he is performing splendid work in the interests of the primary producers. I regret that it is his misfortune to be associated with the proposed sales tax on flour. As a metropolitan member, he will find that he is very unpopular in the electorate which he represents in this chamber. I hope that it will not be long before this Parliament will adopt a sound wheat-marketing scheme, and thus prevent wheat-growers from being compelled to approach this Parliament for assistance at the last minute, as they have done during the last few years. In view of the policy adopted by certain European countries, particularly Germany and Italy, which are now producing for their own requirements, we cannot expect any marked improvement in the price of wheat. In Italy, Mussolini is rewarding, in different ways, primary producers who increase their production of wheat, and if other importing countries adopt similar methods, the exports of Australian wheat will be further restricted. If the Australian wheatgrowers are compelled to devote their attention to other avenues, the Commonwealth will be faced with the problem of providing sufficient credits in London to meet overseas commitments. In this respect the wheat industry has always been an important factor.

Any reduction of the quantity of wheat produced in Australia will have a serious effect upon the State railway systems, which receive annually large amounts in freight on goods which farmers use, and also on the quantity of wheat which they transport to the seaboard. The honorable member for Grey referred to the fact that the wool-growers were opposed to a continuance of “ Bawra “, as they regarded any system of control as an interference with their rights. He also said that the Federal Government was not willing to assist the wool-growers, but I believe that an organized marketing scheme would be acceptable to those who produce wool in comparatively small quantities. I hope that this bill will receive the unanimous support of honorable members, and that the measure, which is shortly to be discussed providing for the imposition of a sales tax on flour, will be rejected. If that should be the case, the Government will then be compelled to re-impose some of the £7,000,000 of taxation of which certain wealthy taxpayei’3 have been relieved.

Mr DEIN:
Lang

.- All honorable members who have spoken on this bill are unanimous that some assistance should be afforded to those engaged in wheat-growing, but a sharp difference of opinion exists as to the manner in which the money necessary to provide assistance should be raised. I share the opinion of many honorable members who have spoken in opposition to a sales tax on flour. “With them, I dislike many forms of taxation at present in operation, and am only too pleased to assist whenever taxation can be reduced. That the proposed sales tax is harsh in its application cannot be disputed, and that it has been roundly condemned from both sides of the House was only to be expected. Less than three years ago, some honorable members who have condemned the proposed imposition of a sales tax on flour condoned the imposition of a similar tax by the then New South Wales Government. I disliked the tax on flour of £2 15s. a ton imposed in New South Wales over two years ago by the Lang Government, and I still dislike such a tax.

Mr Stewart:

– The money derived from the proposed sales tax on flour will benefit the farmers. ‘

Mr DEIN:

– That is so. During the debate the wheat position throughout the world has been analysed, a comparison has been drawn between the production of different countries and between the prices ruling at different periods. The international wheat agreement recently adopted has also been roundly condemned. But a discussion of such subjects does not assist us in solving the problem with which we are confronted. We are all agreed that some measure of assistance must be rendered to Australian wheatgrowers, and in order to benefit them, we must direct specific attention to the way in which help can be given. Different methods have ‘been suggested. The proposal of the Government to raise a portion of the money by a sales tax on flour has been debated, the honorable member for Kennedy (Mr. Riordan) referred to the value of compulsory wheat pools, the Leader of the Opposition (Mr. Scullin) elaborated the advantage of fixing a price for home consumption, and the honorable member for West Sydney. (Mr. Beasley) stressed the necessity for fixing the price of wheat at 3s. a bushel at country sidings. Such a proposal would have cost the consumers nearly £8,000,000, as against the proposed £3,000,000. If any of the proposals put forward by honorable members opposite were adopted, the effect upon the price of bread would be the same as that of a sales tax on flour. Their purpose is to increase the price of wheat to ensure a greater return to the wheat-growers, and the imposition of a sales tax on flour is proposed for the same purpose. The opponents of a sales tax on flour cannot deny that a fixed price of 3s. a bushel at country sidings, a home-consumption price, or any other scheme which has been suggested, would result in the price of bread being increased by more than one halfpenny a loaf, as is expected to be the result in New South Wales if a sales tax is imposed on flour.

The Attorney-General (Mr. Latham) stressed the point that the consumers would bc willing to pay a little extra for bread to enable wheatgrowers to receive a reasonable price for their wheat. We all agree with that contention. At present bread - I am speaking now of New South Wales, but what applies in that State applies also in the other States - costs 5d. a loaf, and if the costs were properly apportioned, that price should be sufficient to enable the wheat-growers to receive a fair return on their product. It is not the fault of the Government, or of the consumers, that the wheat-growers are not receiving a fair return. I believe that the State governments, and particularly the New South Wales Government, have shirked their responsibilities by allowing bakers to charge exorbitant prices for bread. For some years bread consumers have been paying more tehan a fair price, and to that extent have been subject to a tax. It is really a “ shearer’s “ tax, because the consumers have been shorn, either by the millers, by the master bakers, or by some one else. The imposition of a sales tax on flour will awaken State governments to their responsibilities, and in co-operation with the Commonwealth authorities they will eventually see that the wheat producers and bread consumers receive a fair deal.

The Leader of the Opposition compared prices in Sydney and in New Zealand, and said that, although flour in New Zealand is 50 per cent. higher than it is in Australia, the price of bread in that dominion is slightly less than it is in Australia. The right honorable gentleman did not disclose the fact that, in New Zealand, the bakers operate under the day-baking system, that the hours of labour are shorter, and that the basic wage is higher than in Australia. I do not suggest that the wages are too high or the hours too low. I merely mention them as a reason for the difference in the price of the loaf. We cannot have day-baking and shorter hours, &c, unless we are prepared to pay for them.

During his remarks, the honorable member for Gwydir (Mr. Abbott) quoted the returns of a wheat-farmer within his own electorate. The honorable member admitted that that grower had a pretty good crop this year, and he objected to the word “ dole “ being applied to this particular form of relief. To me the assistance provided under this bill is a dole in every sense of the word. Anybody who comes to the Government for assistance must regard himself as the recipient of a dole, just as much as the unemployed individual who is supplied with a coupon to enable him to get a few shillings’ worth of food weekly. The wheat-growers are asking for financial assistance, and that assistance is a dole. No honorable member can get away from that fact. I prefer the word “ dole “ because, to my mind, the wheat-grower has no more right to approach the Government for assistance than has anybody else, unless he is prepared to regard that assistance as a dole. The present Government is asked to extend financial assistance to the wheat-growers of Australia. I should be bitterly opposed to assistance being rendered to any grower who is not in necessitous circumstances. The measure rightly provides that the money made available shall be distributed among necessitous farmers only. Three years ago, during the Scullin Administration, we witnessed the introduction of this system, and on that occasion some individuals received amounts of more than £4,000, which was a monstrosity.

There is just one other point that I should like to stress. I believe that a limit should be placed upon the amount which any individual shall be eligible to receive under this bill. Certainly, I am not prepared to sanction assistance being granted to individuals to the extent of thousands of pounds. The budget has been severely criticized, and I can now see that there was room for some criticism. If I could have foreseen this position, at the time the budget was introduced, probably I should have adopted a different attitude from that which I did adopt. “While I accepted the budget proposals, I now believe that a mistake was made in framing them. We must overcome the difficulty as best we can. After consideration of different methods, the Government has decided that the best way to assist necessitous farmers is to raise a portion of the amount to be appropriated for the purpose by the imposition of a flour tax, and to secure “the other portion from revenue. That being so, it has come forward with a definite taxation proposal. Personally, I dislike any form of taxation, particularly sales tax, but we already have forms of taxation which are repugnant to all of us. The sales tax, for example, has been operative for two or three years. The Government, having put this bill before us, I have been in some doubt as to what course I should follow. Having listened attentively to the suggestions from members of the Opposition, I have been impelled to the conclusion that, if adopted, they would have precisely the same effect as the Government proposals - in other words, they would increase the price of bread. Had their suggestion been adopted, the wheat-grower would have received a greater measure of assistance than he will receive from the imposition of a tax on flour of £4 5s. per ton. Consequently, I can more readily accept the bill than I could support any proposal which has been outlined by members of the Opposition. I support the measure for the following reasons: - (1) the tax will expire on the 30th June next; (2) the assistance rendered is to be limited to necessitous cases - I should not” have supported the measure had it not been so limited - (3) the Government has guaranteed that an inquiry will be held into the price of bread as well as into the wheat industry. I believe that that inquiry will prove a blessing in disguise to those unfortunates who will be called upon to pay temporarily an increased price for their bread. After the commission has completed its investigation, and after the 30th June next, I believe that bread will be cheaper than it has been for years. Because of the reasons I have assigned, I am prepared to give the benefit of the doubt I entertained to the Government, and accordingly I shall support the bill.

Mr HUNTER:
Maranoa

– I shall not detain the House for more than a few minutes. This bill is essentially one which deals with the problem of the great wheat-exporting States, and which docs not apply to any considerable extent to my own State. Maranoa and Darling Downs are the only wheat-producing districts in Queensland. The position of that State is entirely different from that of other States because it does npt export wheat. As a matter of fact, it rarely produces more wheat than is sufficient for its own requirements, and the growers are usually able to get about 8d. a bushel more for their product than the southern .wheat-farmers. The reason for this difference of price is the cost of transport from the south. Leaving out of consideration droughts, &c., the position of the Queensland wheat-growers is, therefore, never so acute as is the position of wheatgrowers in the southern portion of the continent, in States like New South Wales, Victoria and South Australia, and also in Western Austrafia. The bill expressly provides that assistance shall be given to wheat-growers who are in need. It does not purport to provide a solution of the wheat problem, which will have to be faced in conjunction with other problems of all our export industries. This measure is merely an aid for the present, and that aid will be rendered through the States. I trust that the Minister for Commerce (Mr. Stewart) will take particular care to ensure that the money allocated to Queensland is distributed differently from the way in which it was distributed on the last occasion. Upon that occasion there was ft distinct departure from the act on the part of the Queensland Government. On the file in the Prime Minister’s Department is correspondence showing that that Government did depart from the strict terms of the act, but because it was under the act it was able to get away with that breach. Despite the fact that a State Government is not empowered to give a bounty on the production of wheat, a bounty of 3d. a bushel was paid to all Queensland wheat-growers. The Federal Government afterwards went into the matter and decided that there was a loophole in the act, and that the State Government had availed itself of that loophole by including in the amount claimed the bounty of 3d. a bushel to which I have referred while those who had no crop or only a small crop received very inadequate assistance. [Quorum formed.]

Mr Stewart:

– They will not be able to do that again.

Mr HUNTER:

– Some objection has been taken to the fact that the Queensland growers will receive approximately £70,000 under this bill - roughly twice the amount they received on the last occasion - whilst the consumers in that State will contribute £400,000. But this matter is essentially a national one and, if Queensland is going to cavil about it, the rest of Australia can cavil about the price that the other States are paying for their sugar. Queenslanders, however, do not cavil about this bill. The matter to which I have just referred has been raised, but only by interested political parties, and not by the wheatgrowers themselves. Whenever the Federal Government touches the matter, it must be viewed from a national, and not from a State view-point.

Much has been said about the price of bread. I claim to know as much about that subject as any other honorable member, because many years ago, I was chief executive officer of the largest bread-manufacturing company in the Southern Hemisphere, and I have no hesitation in saying that, if bread prices rise as the result of this legislation, it will not be due so much to manipulation by millers or bakers as to the existing faulty system of distribution. In proof of this statement, I cite the experience of the company with which I was associated in 1915. In that year, the company had “a contract with the Federal Government for the supply of bread to military camps at 13s. 3d. per 100 lb. Flour at that time went up to £17 a ton, and the contract with the Commonwealth Government worked out at 3£d. per 2-lb. loaf, which showed a profit after the flour was averaged. I know, because I worked out the weekly costs, and was able to eliminate considerable wastage in distribution by reducing the number of delivery carts from 84 to 32, thus cutting delivery costs in half, as more bread was delivered by fewer carters, a result which was brought about by the blocking of the runs. Moreover, the company’s process of manufacture, was entirely mechanical, thus obviating the employment of many operatives. The chief opponent of the company at that time was the. Labour party, which will always be found in opposition to any efficient method to cheapen an article that is likely to mean a reduction of unemployment. No doubt its view is humanitarian, but it results in the prevention of progress, inefficiency, and acts as a detriment to cheap production. The history of the company’s operations may be found at page 6171 in the Hansard report of a debate in the Commonwealth Parliament on the 26th August, 1915. My company’s contract at 13s. 3d. per 100 lb. was cancelled by the then Fisher Labour Government which gave it to another man whose price was 18s. per 100 lb. The excuse offered for the cancellation was that it was a non-union company in competition with a union employer, which was untrue. It paid wages above the award. I have no hesitation in saying that the principal reason for the opposition was that my company used automatic machinery and halved its delivery costs. My experiences of those days are repeated to-day when anything up to a dozen delivery carts may be found in the same street.

Objection has been raised to the method proposed for raising portion of the money for the assistance of wheat farmers. Revenue derived from a sales tax on. flour is really the amount that is obtained by an increase of the price above world’s parity. If, as in Queensland, the higher price is obtained through a pool, and also by the fixation of prices, it is not called a sales tax; but the effect is the same, because the higher price realized for wheat must, in the long run, be passed on to the consumers of bread. That has been our experience in Queensland where wheat has always been higher than in the southern States; but the people never complained because the benefit went to the growers. Those who advocate the establishment of a compulsory Commonwealth pool are no friends of the Queensland farmers, for the simple reason that the price of wheat in that State would have to come down to the level of prices in the southern States. A compulsory Australian-wide pool of wheat-growers cannot be established until the Constitution is amended, but action to safeguard the position of wheat-growers may be taken along the lines of legislation passed yesterday dealing with another form of primary production. In this way circumstances peculiar to a State can be safeguarded for local consumers, and the full benefit received in respect of wheat exported by the co-ordination of federal legislation. I shall support this bill, and also the measure imposing a sales tax on flour, but it is useless to disguise the fact that any proposal, whatever its nature, to ensure to wheat-growers 4s. 6d. a bushel must be passed on to the consumer of bread in Australia - whether it takes the form of a sales tax or a fixed price. That is the situation in a nutshell.

Mr NELSON:
Northern Territory

– In the sixteen hours that have elapsed since the debate on this bill was resumed yesterday I have heard many speeches, and a variety of opinions expressed concerning the two measures that have been brought down by the Government for the assistance of wheatfarmers. The honorable member for Barton (Mr. Lai-e) made a remarkable speech in which he castigated the wealthy representatives of the Country party who, he declared, in their speeches in this chamber pose as the friends of the poorer sections of the farming community, but when outside Parliament, leave them to the dole.

Mr Paterson:

– The honorable member for Barton has stated many remarkable things in this House.

Mr NELSON:

– So has the AttorneyGeneral (Mr. Latham). Earlier in this debate the right honorable gentleman, for the first time, made a pronouncement as to the Government’s real intention when he said that it would pay to take some wheat-farmers off the land. That is really a policy of despair. It is unthinkable that, in this country, with a population of less than two persons to the square mile, any Government would contemplate introducing measures to take men off the land. There is room in Australia to bring about a readjustment of the surplus population of the Empire, but hitherto this aspect of our problem has been systematically evaded. Every one will, I think, agree that our present trouble is economic in its origin. Australia can produce wheat cheaper than can any other country, but for economic reasons other countries are now producing commodities which previously were imported, with the result that the world’s markets for Australian surplus primary products have gradually been contracted, and some of our industries have become uneconomic. For instance, the total indebtedness of tho farming community of South Australia is £38,000,000, and the wheat yield last year was 42,000,000 bushels. With interest at 5£ per cent, the farmers’ liabilities work out at ls. Id. a bushel. According to Land, a newspaper representing rural interests in New South Wales, the wheat-growing industry in that State must be regarded as uneconomic’ whenever th, price falls below 3s. a bushel. The honorable member for Barton spoke of land that would produce 42 bushels an acre. I think he must have been referring to isolated areas, because official figures show that the average yield -for Australia is about eleven bushels an acre. On the basis of the production per acre, Australia stands low in the list of wheat-producing countries.

Mr Paterson:

– But on the basis of the production per man engaged in the industry, Australia stands high.

Mr NELSON:

– Overhead costs in Australia are too heavy. The prices paid for agricultural land during the last six or seven years are too high for the capital cost ever to be paid. If, as has been stated, interest charges in South Australia represent ls. Id. a bushel, it is time that something was done to reduce them. In the north of Australia a tract of land hundreds of miles in length is available at 2s. a square mile. That land is 3,000 miles nearer the English market than are the wheat . lands of southern Australia; aud being watered by monsoonal rains, it is free from the possibility of drought. The following table shows the average yield per acre of the principal wheat-growing countries : -

Only one big wheat-producing country - South Africa, with an average of 10 bushels to the acre - is lower than Australia. In 1931 the price of wheat was : - In Germany Ss. 7½d. a bushel; in France, 9s. 6d ; in Italy, 5s. 6d. ; in Great Britain, 5s. 7£d. ; and in Australia, 2s. 5-Jd. During recent, years a number of European countries have built up tariff walls with .the object of stimulating the local production of wheat. A proper policy of development, including the construction of necessary public works, would enable Australia to absorb, not only its own unemployed population, but also a large proportion, if not all, of the unemployed of Great Britain. Instead of spending millions of pounds in doles, the authorities in Great Britain would do well to provide money for the development of Australia on the understanding that, after all workless Australians had been absorbed, some of the surplus population of Britain would be accepted in this country. By increasing Australia’s population in that way, a home market would be provided for our primary products, and greater stability would be given to industry generally.

There is unanimity among honorable members regarding the need of the wheatfarmers for assistance. Although a sum of about £3,000,000 is involved, honorable members generally are agreed that that expenditure is justified. When the Government “decided against raising money through the Commonwealth Bank to assist the wheat-farmers, it had to find other means of obtaining it. Ultimately, it decided to impose a tax of £4 5s. a ton on flour. Evidently, the figures which I gave in this House previously relating to the price of flour in the Northern Territory were ‘responsible for the insertion in this bill of a clause exempting the users of flour in the Northern Territory from this tax. The Prime Minister promised me that an exemption would be granted. For that provision, I am grateful, as are also my constituents. I wish that the Government would take notice of some of my other representations in regard to the Northern Territory, in which event most of the difficulties of that territory would disappear. In dealing with our primary industries, we should get away from the vote-catching methods. If an industry which has reduced its permanent overhead costs to a minimum cannot carry on successfully, consideration should be given to its transference to another centre where it may be conducted more economically. Sooner or later, the Commonwealth must face the necessity for developing Australia as a means of absorbing some, if not all, of the surplus population of the Empire, thereby creating in Australia a home market more profitable than any market in other countries. I do not blame the farmers for asking for assistance. A few years ago, they responded nobly to the call to “ produce more wheat,” with the result that they contributed largely to Australia’s present good name in financial circles. Australia’s adverse trade balance overseas was rectified, and its good name maintained. An industry which assisted the nation in its time of difficulty is entitled to consideration. I realize that the Government must find revenue; but there are better ways of obtaining it than by imposing a tax on the poor man’s bread. Had the credit of the nation been utilized for the purpose, the whole of the necessary money would have been obtained. The Government, however, decided against that policy. I suggest that the budget be reconsidered, with a view to restoring the taxes on wealthy sections of the community, which have been remitted, and that the money obtained from that source be devoted to assisting the wheat-growers, rather than that assistance should come from the section of the people least able to provide it.

Mr McGRATH:
Ballarat

– I am bitterly opposed to a tax which increases the price of bread. I am astonished at the tactics which have been adopted on this occasion, andat the change of front on the part of some honorable members. I wish that a secret ballot could be taken on this bill. I know the tale that it would tell, even as I know the tale which the open ballot will tell. I have not heard any argument to lessen my opposition to a tax oh broad. The budgets for the last two years have provided for the remission of land taxes amounting to £1,100,000. That tax is not paid by the farming community; most of it is paid by the owners of valuable city lands.We should admit our blunder and reimpose the land tax, instead of placing a further burden on the poorest people in the community. I am not concerned about my return to this Parliament at the next election; I am stating my honest opinion.

Mr Maxwell:

– The honorable member should allow other honorable members to be actuated by a similarly high motive. He has mentioned a secret ballot.

Mr McGRATH:

– A tax on flour, which is equivalent to a tax on bread, is an imposition on the poorest persons in the community.

Mr Thorby:

– It comes from the whole community.

Mr McGRATH:

– The poorer people will be most seriously affected by this tax. Other persons are in a position to pay as much as ls. a loaf more than they are now paying; but the man with four or five children who is working for £3 or £4 a week cannot stand even a slightincrease. I meet such men on every street corner in my electorate, and they say to me, “For God’s sake, Mac, don’t impose that flour tax; it means 2s. 4d. a week more to me.”

Mr Thorby:

– That is ridiculous!

Mr McGRATH:

– A family would need to use only seven loaves a week to make a difference of 2s. 4d.

Mr Thorby:

– The difference will be only¾d. per 2-lb. loaf.

Mr McGRATH:

– It is 2d. per 4-lb. loaf in Victoria. A family of five or six persons could easily consume seven loaves a week. It is cruelly unjust to increase the price of the necessaries of life. Some honorable members have suggested that the basic wage will be altered.

Mr Thompson:

– That is the solution of the whole thing.

Mr McGRATH:

– The suggestion amuses me. I am well acquainted with the operations of the Arbitration Court, and know that months will elapse before the case will reach it. In any case, 50 per cent of the workers derive no benefit from awards,because they are not members of unions. I do not know of one person in the street in which I live who is working in an industry in which there is a union that he might join; therefore, these people will not be benefited by an award. Thousands of widows are in a similar position. The award would not be made for probably six months, and by that time, the tax will have expired. I cannot understand the attitude of the Ministry. It knew when it introduced the budget that £3,000,000 had to be found for the relief of wheat-growers. It came down with a misleading budget, which it now has to alter. Had it been known that a tax was to be placed on bread, I am confident that a majority of honorable members would not have voted for the remission of land tax to the amount of £400,000. I cannot understand the attitude of honorable members who have to mingle with the people, and who know the struggle that has to be made by many working-class families, tens of thousands of whose . breadwinners are out of work. This is obnoxious, unfair, unjust, and cruel legislation, and I sincerely hope that, even at this late hour, honorable members will become alive to their responsibilities and cast a unanimous vote against it.

Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936

– I have listened to the debate on this bill .for the last ten or twelve hours. I protest against the introduction of such legislation in the closing * hours of the session. I believe that the Government should have adopted the advice of the Leader of the Opposition (Mr. Scullin) to withdraw the budget, and so re-cast it as to make provision for assistance to wheat-growers and others. The right honorable gentleman had sufficient foresight to realize at that early stage that something would have to be done for the wheat-growers. Honorable members on this side have pointed out that the policy of the Labour party is, and has always been, to provide assistance to producers of all kinds, including wheat-growers, by means of a pool, and the fixing of a home-consumption price. I realize the serious position in. which the wheatgrowers find themselves to-day, and admit that they must be given assistance. Although I do not represent any wheat-growers or flour millers, T have to conserve the interests of thousands of people, many of whom are out of work, while others are on intermittent relief work. This flour tax is vicious, unjust, and unwarranted. It has been stated during the debate that the wheat-growers were anxious that a flour tax should be imposed. I had the privilege of attending a conference of representatives of wheat-growers that was held in this building not very long ago. Those representatives, who came from all over Australia, said that what was required was the formation of a wheat pool similar to that established by a Labour Government in Queensland. This tax will take out of the pockets of the Queensland people approximately £240,000, and the wheat-growers of the State will receive only £80,000. This is another injustice to Queensland, and I am satisfied that it does not deserve it, because it has led the way in the protection of primary producers, particularly wheat-growers. Under the Queensland pool, wheat was sold last year at 3s. 6d. a bushel. Growers in other States received approximately from 2s. Sd. to 2s. lOd. a bushel. That proves conclusively that the conditions were better under the operation of a pool. This Government, and the last Government, have already given assistance to wheatgrowers. To this end, provision was made in last year’s budget for approximately £2,250,000, but, unfortunately, on the occasion of the recent budget, the wheatgrowers were absolutely ignored. Their interests have been neglected by the failure of the Government to bring down legislation earlier. Had the Government included provision in its budget proposals, it would not have been able to remit taxes to persons who can well afford to carry a burden, which is now to be imposed upon persons unable to bear it. It was pleasing to me, and I am sure to many honorable members on this side, to hear the honorable member for Henty (Sir Henry Gullett) make such a scathing indictment of the Government. The honorable member referred to the manner in which the Government is endeavouring to finance assistance to the wheat-growers, and pointed out that while the Government was prepared to exempt from the operation of the flour tax bran and pollard used for chicken and hog feed, it was not at all perturbed by the fact that its action would bring to the verge of starvation the unfortunate women and children of this country who cannot afford to pay an increased price for bread. -The Attorney-General (Mr. Latham) pointed out the other night that this Government did not have power to legislate for the control of the price of bread. In Queensland there is a Price Fixing Commission, which for many years has controlled the price of bread in that State; but, despite the existence of any such commission, the sales tax on flour must have . the effect of increasing the price of flour, and in turn the price of bread to the Queensland consumer. The flour tax is unjust and unfair to the poor people of the community, who, in many instances, will be unable to purchase sufficient food with which to keep body and soul together. I am satisfied that the majority of the people of Australia will resent this legislation, and that, if an election were to take place to-morrow, the Government would be defeated as a result of its pernicious flour tax. I am pleased to learn that the Government intends to appoint a committee to inquire into the ramifications of the wheat industry; but it is unfortunate that any decisions of that committee will not be available until after the expiration of the period during which the flour .tax is to operate. However, I have no doubt that any decisions of the committee will be a guide to the Government when it is preparing its budget next year, and providing for additional assistance to be given .to the wheatgrowers of this country.

Mr THOMPSON:
New England

– The honorable member for Brisbane (Mr. George Lawson) has summarized the attitude of the members of the Labour party towards the proposals of the Government in his statement that the people of Australia will bitterly resent the action of this Ministry in imposing a sales tax on flour, in order to finance the wheat-growers. I utterly disagree with that contention. There are in this country certain people who profess to be friends of the farmers, but who are adopting a two-faced attitude, because, although they say that they wish to assist the farmers, they offer all sorts of objections to the Government’s practical proposal for the relief of the wheatgrowers. I have not the slightest doubt that, if the members of the Opposition, and certain members of the United Australia party, had their way, it would be impossible for the Government at this juncture to render any assistance at all to the farmers. My opinion is that the people of Australia are alarmed at the position of the wheat industry. Those who have taken an intelligent interest in the affairs of their country know that farming cannot possibly be carried on without some assistance from the Government. After many months of hesitation and vacillation, the Minister for Commerce (Mr. Stewart) has, in the dying hours of this session, introduced a bill with the object of assisting the growers in respect of this season’s crop. The Government has shown remarkable courage, in view of the speeches of many of its so-called supporters, in proceeding with the bill. Probably the worst thing, that it could do would be to refrain from assisting the farmers this year, because this is the most serious year experienced by the farmers since the depression. The price of wheat is to-day lower than it has been in the last four successive years, and is probably the lowest in the history of the wheat industry of Australia. In addition, the immediate prospects of the recovery of prices were probably never blacker than they are at present. Any honorable member who has studied the wheat situation will know that it is of no use to predict any improvement in the world’s wheat position for at least two years. Of course, some miracle may happen, but we know from bitter experience that it is idle to base economic plans upon the expectation of miracles. We have now to decide whether it should be the policy of the Government to assist the wheat industry every year in which the growers find themselves in serious financial difficulty. The industry has been assisted for the last four years, and it is quite possible that it will’ have to be assisted for the next two years. The wheat industry is of far more importance to Australia than are many other industries which have been considered by this Parliament to be worthy of assistance. The potato, banana, and tobacco-growers have all received assistance. True wheat industry is of far more importance than the tobacco industry, because, although we can do without tobacco, we cannot do without wheat. It is the realization that this industry is really of the most economic importance to Australia that has forced us to aid it until we can formulate a plan under which it can carry on without assistance. The wheatgrowers are probably the most helpless section of the producers of Australia, mainly because the wheat, industry is not organized to the same extent as are many other industries. It is extremely difficult to get the wheat-growers to indicate their wishes in this matter.

Mr Fenton:

– They know what they want.

Mr THOMPSON:

– The industry will not be placed upon a sound footing until it is properly organized. One of the best means of assisting it would be for this Parliament to establish machinery . for marketing organizations and, possibly, a compulsory pool. I nave always been a supporter of the compulsory pooling system, and I am sorry that the proposal for a pool which was introduced by the Leader of the Opposition (Mi1. Scullin), when Prime Minister, was not proceeded with, because had it been accepted the wheatgrowers would have had an opportunity to decide whether they required a compulsory pool. It was stupid on the part of the then Parliament not to proceed with the proposal. In the intervening two years we should have learned a great deal, and probably would not now have been trying to find a way out of our troubles. However, some effort will have to be made in this direction. “We are told that next year the Government will produce a definite marketing scheme for’ the permanent solution of the problems of the industry, but we have had no indication from Government supporters to show that that matter has been seriously considered. I hope that in order to avoid a repetition of the present situation a determined effort will be made early in the next session to submit a scheme so that all parties may give it the fullest consideration. I have no doubt that, despite the unfair opposition of many members to the present proposal, all parties desire tq place the industry on a sound and permanent footing. “While I approve of the general proposal, as submitted by the Scullin Government, for the establishment of a compulsory pool, I do not consider that the Opposition has the right policy for the solution of” the problem of financing the wheat industry. Whether borrowing from the banks is the way to organize a compulsory pool that is likely to be of permanent value is open to question. When money is borrowed it must be paid back.

Mr Scullin:

– But the burden is carried over the most difficult period.

Mr THOMPSON:

– The £3,500,000 which was borrowed by the Scullin Government has imposed a burden on the community which has to be carried for fifteen years at tho* cost of £1,000 a day. If that method is persisted in it will have a snowball effect, and the community will be unable to bear the strain.

Mr Scullin:

– The scheme of the present Government will cost £10,000 a day, and it i9 submitted - in the worst year of the depression.

Mr THOMPSON:

– When financial assistance is given to an industry the money must come from the community generally, and the people must supply it out of their income. On this occasion the Government is taking £3,000,000 from the community, and that represents so much loss to the community; but there is a clear difference between borrowing and imposing the form of taxation which this bill involves. While loans continue for a long period, perhaps indefinitely, taxation is limited to a fixed period, and no interest accrues. The Government hands to the industry the money collected from the people, who know exactly what they are- paying.

We have heard much about the burdens of the workers, and complaint is made that they should not be asked to pay an extra price for bread, but very little has been said about the burdens of the wheat-growers, who are producing wheat at a loss to enable the workers to get cheap bread. The Leader of the Opposition (Mr. Scullin) has proved by his figures that profiteering takes place in the milling and baking industries, but this Parliament has no means at the present time of dealing with that phase of the problem. We cannot escape from the basic fact that the wheat-growers of Australia are producing their commodity at a loss. The value of the wheat in a 2-lb. loaf is Id., yet it costs the grower lid. to produce that wheat. Therefore, on the present market values, he is actually making a present of ½d. on every loaf of bread consumed by the workers. Why should not the workers be called upon to give him something back ? No other section is required to make a direct sacrifice of this kind.

Every indication has been given during the debate that if it came to a show-down, the Opposition would solidly support the principle of passing on the sales tax on flour to the basic wage. The Country party supports that principle, and, therefore, a majority is to be found in this Parliament that is prepared to pass on the tax on bread to the basic wage, through the medium of the arbitration machinery. Half of the awards are made by the federal court and half by the State tribunals, and those covered by these awards embrace the vast majority of the workers of Australia. If the Government and this Parliament have the will to act in collaboration with the States and to operate the arbitration machinery so that, immediately the sales tax on flour is imposed, it is added to the basic wage, the difficulty would be overcome. If this tax is imposed for a sufficient length of time, it will have to .be considered by the arbitration courts. It is unfair that the workers should be asked to bear the increased price for their bread. Are we to be the slaves of the arbitration system which we have created? Legal members of the House have admitted that we could get over this difficulty if we desired.

Mr Stewart:

– Of what use would that be to the unemployed, who have no award?

Mr THOMPSON:

– They represent about 25 per cent, of the employable section. We cannot always let down the majority in the interests of a minority. Why should the interests of 75 per cent, of the workers be sacrificed?

The unemployed are generally covered by State relief measures, or, in other words, by the dole. In conjunction with the Commonwealth, the States provide bread for them, and the obligation would rest on the States to make provision immediately to meet the extra cost of bread. The Government has established the principle that, whenever an increase occurs in the cost of living, principally in the cost of food, it should be immediately passed on to the old-age pensioners. The organized workers are covered by awards and the unemployed by relief measures. Therefore, these three sections could be amply protected, providing this Parliament had the will to do so.

For the last three years, the value of the wheat exported from Australia has been £63,000,000, and it is doubtful whether this country would have had a favorable trade balance but for this export trade. This year the figures will probably show a falling off; nevertheless they will show the valuable contribution which the industry makes to the national budget. The wheat-,, growers are fulfilling a double purpose. They are giving the poorer section of the people bread processed from wheat which is grown by the producers at a loss, and they are enabling the country to balance its overseas trade. Tho Country party’s proposal is to give back to the wheat-farmer the id. which he loses on the wheat which is used in making a 2-lb. loaf of bread. We do not believe that the workers, even if no special provisions are made for their relief, would begrudge this measure of assistance to the wheat-farmers. The honorable member for Ballarat (Mr. McGrath) may have heard complaints from a few people, but I doubt whether the workers of Australia, as a whole, would be prepared to throw the Government out of office because of this legislation. The merits of the case are so strongly on the side of the Government.

After all, the amount of money involved is not very great. The assistance which it is proposed to render will increase the price of wheat for home consumption by about ls. a bushel, while the increase over the total production foi the season will be “ not more than 2f d. a bushel at a time when world parity prices have reached a record low level. If the price of wheat, were to rise, our difficulties would be solved, but we cannot afford to gamble any longer on that possibility. The Government has left the matter rather late, but it is still just in time to save the industry from a most disastrous crash. I recognize that wo have heard that statement before, but this is the fourth bad year experienced by the industry, and it is the worst year of all. If the ‘industry is not assisted this year, I believe that, before we have a chance of dealing with the problem again, many thousands of growers will have gone out of production altogether. r As a member of the Country party, I oppose the principle of discrimination among grow’- in the distribution of this money, but I realize that an overwhelming majority of the ‘members of this House are in favour of it. Many of those who favour it are desirous merely of pillorying the few members of this Parliament who happen also to be wheat-growers, while others are influenced by the fact that a few growers, who have had sources of income other than the production of wheat, have been able to pay income tax during, recent years. It is a dangerous thing, however, to establish a principle of discrimination merely on that account. It will tend to encourage among the primary producers a belief that it would be better for them to give up wheat-growing altogether, and turn their attention to stock-jobbing, or some other pursuit that would be of much less value to the country.

I support the bill because I think that it is the very best we can get. I commend the Government on its courage in standing up to the remarkable opposition among its own ranks, and I hope that its efforts to implement the scheme quickly and effectively will not be handicapped by the recalcitrance of honorable members who are nominally its supporters.

Mr BAKER:
Oxley

.I support the bill insofar as it makes provision for assistance to tho wheat-farmers. The Labour party, to which I belong. always endeavours to do the best thing possible by the great mass of the people. We realize that the farmers, if in distress, are just as much entitled to assistance as are the men and women of the cities. The honorable member for Darling Downs (Sir Littleton Groom), when speaking on the Bankruptcy Bill a couple of days ago, and again on the present measure, quoted some startling figures regarding the debts owed to the banks by the farmers of South Australia. He pointed out that between £1,500,000 and £2,000,000 in interest was paid annually by the farmers of that State. Mr. Molesworth, a Professor of the University of Queensland, speaking of the financial position of the farmers in 1927, which was the peak period of their prosperity, stated -

As it is, many of the small agricultural, dairy and fruit-farmers - cockey farmers - are in debt to one or other of the State Governments which have advanced them money through State agricultural -banks. Many other larger farmers, selectors and even squatters have mortgaged their lands to one or other of the pastoral companies or to one of the banks. The extent to which primary producers are in debt to the pastoral companies is shown by the balance-sheets of five of these companies - Australian Estates and Mortgage Company (London) ; Australian Mercantile, Land and Finance Company (London); Dalgety and Company (London); New Zealand Loan and Mercantile Agency Company (London) ; Goldsbrough, Mort and Company (Melbourne). Notice that four out of these live arc overseas companies: Altogether by June, 1927, the total amount of advances made by these live companies and still outstanding was £18,074,269. This amount had increased by nearly £6,000,000 since June, 1923. The various State Governments had, by the 30th June, 1926, made advances to settlers totalling £121,575,168, and of this amount £78,174,221 was still outstanding. Queensland had advanced only £7,264,502, of which £4,540,087 was outstanding at 30th June, 1926. Victoria had advanced over £37,000,000, while New South Wales, South Australia, and Western Australia had each advanced over £20 000,000.

Various of the middlemen merchants, as well as the banks, also lend money to the farmers on the mortgage of their farms, &c. So just how many of the nominally freehold agricultural land has been thus mortgaged it is impossible to say. All told, the various State Governments ‘ and the banks in agricultural, and the various private companies in pastoral, production supply much of the finance, and, therefore, wield a large amount of control in their respective spheres. Large numbers of the small farmers are merely labourers working for the various financing companies.

Matters have become worse since them. The Labour party has a definite and constructive policy under which the Commonwealth Bank would become the sole lending agency throughout Australia. I realize that it is anathema to refer to the Commonwealth Bank in the hearing of many who hold it in such strong antipathy. It is necessary to go outside Australia to find those who appreciate the Commonwealth Bank at its true worth. In the opinion of a Harvard University Professor, the Commonwealth Bank has done a great work in keeping Australia on an even keel during the depression, and has led the way to the nationalization of banking. If the Commonwealth Bank were the sole lending agency in Australia, the interest now paid ‘by the farmers of South Australia, and of the other States, to private banking institutions would go to swell the profits of the Commonwealth Bank. Out of thos? profits £3,000,000 could be found without difficulty for the assistance of the wheat-farmers.

Thepolicy of the Labourparty is sufficiently comprehensive to deal with our entire social system, and would cover the transitional period from the present crazy system in which we are trying to restrict the production of wheat and other foodstuffs while others are starving, to a system under which food would be produced for the benefit of the people as a whole. One plank of the Labour party’s policy is the nationalization of. banking, and another is the compulsory pooling of wheat. Had the Scullin Government been able to bring it about, such a pool would have been established. However, because the Labour party had not a majority in the Senate, it was unable, though elected by a record majority, to enact its policy for assisting the wheatgrowers. It made three sep’arate attempts to do so, but was always foiled by a hostile majority in the Senate. In Queensland, at one period, Labour governments were in office continuously for fourteen years, and although State Governments enjoyed more restricted powers than those of this Parliament, it was possible to enact much of the Labour party’s platform with regard to primary industries. One of the most progressive systems of organized marketing in the world was introduced, and a wheat pool, besides organized marketing systems in other industries, was established. Now, many years later, some of those who sneered at what the Queensland Labour Government was then doing, are themselves advocating the adoption of similar schemes. Had the Scullin Government had a majority in both Houses of Parliament it would have followed the lead of the Queensland Government, and the more extensive powers of the Federal Government would have enabled it to do much more to assist these people. It is unfortunate that so many of the farmers are ready to vote for members of the soqalled Country party who are always eager to vote against the interests of the country, if, by doing so, they can support the Government and retain their own seats in Parliament. The reason is that almost 100 per cent of the press throughout Australia is opposed to the Labour party. That is the case even in the cities, while in the country districts there is scarcely one paper which disseminates the doctrines of Labour. It is, therefore easy to misinterpret the attitude of the Labour party, as its arguments are not fairly placed before the people. For the information of the honorable member for Fawkner (Mr. Maxwell) and others, who wish to know a little about the platform of the Labour party, Imight inform them that when this party gets back “to power, one of its first actions will be to enact legislation to discipline the press, and force it to publish facts regarding the utterances and actions of members of the Labour party. If the true story of what Labour is doing is broadcast, we shall get maiorities in country electorates, and overwhelming majorities in city electorates.

When discussing this bill the AttorneyGeneral (Mr. Latham) raised what was apparently intended to be the main argument upon which the Government justifies its case. He claimed that, because the Labour party supports the granting of assistance to farmers, its members must necessarily be in accord with the methods proposed by the Government. That argument is obviously fallacious. While honorable members of this party believe that the farmers are entitled to assistance, they do not hold with the assistance being provided in this callous and brutal manner. I believe that a tax on flour is the most vicious which could be devised, although it is not unexpected coming from a government which twelve months ago resorted to the iniquitous practice of reducing pensions. This tax will fall most heavily upon the shoulders of thosewho are least able to bear it, and married men with families to maintain will pay more than single men. The poor man will pay more than the rich man, because he cannot afford poultry, sweets and the other delicacies found on the rich man’s table. Bread is the staple food of the w.orking man; even in our daily language we refer to a man being on the ‘bread line, indicating that he is able to afford only the cheapest kind of food, this staple diet.

The Government has claimed that it has no power to control the price of bread. I am aware of that. However, during the war, under the defence provi- sions of section 51 of the Constitution, regulations were passed under the WaT Precautions Act enabling this Parliament to fix the price of bread. Immediately, whole-souled patriots rushed to the courts in an endeavour to prove that the action was unconstitutional, but five out of seven judges upheld its constitutionality. Though that power does not exist in times of peace, there is nothing to prevent the ‘Government from communicating with the various State Governments, and asking them to assign power to the Commonwealth Government to control the price of bread. Placitum 37 of section 51 of the Constitution entitles this Parliament to enact laws with respect to matters referred to it by, the Parliament or Parliaments of any State or States, and the Government would be quite within its rights and acting fairly to the people of Australia if it took the action that I suggest. Yet it has made no endeavour to do so and when questions have been asked of the Prime Minister on the subject he has evaded them.

The Government boasts that in the last twelve months it has remitted taxation amounting to approximately £10,000,000. Others estimate that the amount is even greater. When those taxes were remitted the Government was aware that the wheat-growers would need assistance, but it failed to meet its obligations. Unfortunately, relief has been given to the wealthy sections of the community only. According to a Sydney newspaper, a recent directors’ report of one company stated that, as the result of federal legislation, it would save £40,000 per annum. Many other firms will be similarly benefited, and it cannot bc argued that such moneys will be used to employ additional men and women.

It would appear that the Government is blind to what is obvious to most people outside this Parliament. The only happy thing about this bill, apart from the fact that it grants relief to wheatgrowers, is that the sales tax on flour provides a means whereby the Government will dig its own grave, with the result that at the next election it will be rejected. Unfortunately, in the interim, the most helpless section in the community must suffer.

Honorable members have heard the discussion regarding State control. It is peculiar how inconsistent many honorable members opposite can be. When it suits them they support the mid- Victorian policy of laisser-faire, which 20 or 30 years ago had a tremendous following, but to-day has but few adherents. Day after day it has been proved even to the most conservative that all over the world governments must take more control of the affairs of the nation, and those who believe so strongly in the doctrine of unrestricted private enterprise are the first to rush to Parliament and ask for substantial assistance for their supporters through the tariff, and by grants of millions- of pounds. The Labour party is at least consistent, and believes that the Government must be given more control, including control over industry.

Arguments have been advanced to the effect that many farmers who are inefficient enjoy the rewards which should go only to the efficient. It is claimed that, as a result of indifference, they have chosen land which is infertile and, in many cases, overcapitalized, and that, consequently, their efforts must result only in failure. When Great Britain was fighting for national existence, there was no compunction on the part of the British Government to assume control of all industry in the interests of the nation, but in Australia, some people are definitely opposed to governmental control although they are the first to appeal to the Government for assistance. Objection is not raised when it is proposed to construct railways into the outback parts of this huge territory, or to the acceptance of preferential railway rates.

Mr SPEAKER:

– The honorable member must confine his remarks to the subjectmatter of the bill.

Mr BAKER:

– I am merely showing that under a system of State control of the wheat industry or other important primary industries, the appeals to the Government would not be as numerous as they have been in recent years.

Mr Maxwell:

– Is the honorable member in favour of the bill?

Mr BAKER:

– Certain honorable members opposite, and probably the honorable member for Fawkner (Mr. Maxwell), say that they intend to oppose the Government when the vote is taken on this measure. They say that they are not bound as are honorable members on this side of the chamber. I remind the honorable member for Fawkner that, on one memorable occasion, he and five other honorable members who voted against the Government were expelled from the party. The honorable member for Fawkner made a great mistake in opposing the ^Government at that time. He became an independent, but has, I think, since returned to the fold. I suppose that on this occasion, he will assist his party, because he has already learned a lesson. If he were to vote against the Government, he would be defeated at the next general election.

Mr SPEAKER:

– I have allowed the honorable member considerable latitude and I must now ask him to discuss the bill.

Mr BAKER:

– I am dealing with subjects raised by other honorable members, including the honorable member for Batman (Mr. Dennis), who said that he intended to oppose the bill, but I do not think that he and other honorable members will* vote against the Government which they are supposed to support. It is their practice to see how certain honorable members propose to vote, and if they think that there is no fear of the Government being defeated, they will valiantly walk across the chamber and record a vote which they know will be ineffective.

Mr MARTENS:
Hunter

– I take this opportunity to comment briefly upon the two methods involved to provide assistance to the wheat-growers. If I am permitted to refer to the proposed imposition of a sales tax on flour at this juncture, I shall refrain from discussing at length the measure which is shortly to be discussed, and on which I hope there will not be a prolonged debate.

The honorable member for Maranoa (Mr. Hunter) referred to the attack made by certain honorable members against millers and master bakers who have been profiteering. The honor able member said that he was secretary of the Automatic Bakeries, which was the largest organization of its kind in the Southern Hemisphere, and which under proper organization had been able, with 30 delivery carts, to do what was previously done with 50 carts. A good deal can be said in support of the statement that bakers engage in profiteering. Before the arbitration system was in operation in Queensland those engaged in the baking trade were working under the wages board system. In Bundaberg, the town in which I reside, a baker who was making 1,200 loaves of bread per day and whose four workers were operating under two awards, one for the bakers and another for the carters, was compelled under a new award to increase the bakers’ wages by 5s. and the carters’ wages by 2s. 6d. a week, the total increase of his wages bill being 15s. a week. In order to reimburse himself for the additional expenditure, this master baker raised the price of bread by £d. a loaf, which increased his daily income by £2 10s. and his weekly income by £13 5s. By the expenditure of an additional 15s. a week he was able to make a “ rake-off “ of £13 5s. If that is not profiteering I do not know what it is. The Minister for Commerce (Mr. Stewart) said that honorable members representing Queensland had supported the Government responsible for increasing the price of bread. That is not so. We supported a Government which appointed a price-fixing commissioner who fixed the price of wheat to ‘the growers. Only this year the Minister for Agriculture in that State offered the growers 3s. 6d. a bushel for the whole of their crop, which they refused, and they are now getting only 3s. 3fd. a bushel. The honorable member for New England (Mr. Thompson) stressed the point that more efficient organization is needed in the wheat industry if tho growers are to receive more remunerative prices for their product. Under a Labour Government in Queensland, legislation has been passed for the establishment of pools, and for rendering financial assistance to those marketing certain primary products. That system, which was introduced by a Labour Government, has been in the best interests of the Government and of the people of the State.

The fact that to-day the primary- producers in Queensland are better organized than those in any other part of the- Commonwealth, is duo solely to the legislation introduced by a Labour Government that has enabled them to derive some of the benefits to which they are justly entitled. An interjection was made early this morning to the effect that the sugar-growers in Queensland are doing well. That is admitted, but that is owing to the way iu which the industry has been organized over a long period of years. Recently, an appeal was made to the Supreme Court of Queensland in an endeavour to break down, if not totally destroy, the wonderful work which is being achieved by the peanut pool, but, the effort was unsuccessful. The honorable member for New England further stated that the Australian wheat-growers are making a present of id. a loaf to the consumers of bread. If that is so, they have also been making a contribution to those who use bran, pollard, and other by-products of wheat for feeding stock and poultry. The consumer is not responsible if the wheat-grower is not receiving a fair return on his product. Does the honorable member for ‘New England suggest that .the workers are deriving any benefit from the present price of wheat? I realize that the wheat-growers are not getting a fair return on their product; but it cannot ‘be disputed that the price paid for bread is unnecessarily high. Those who mill and sell the flour, and the master bakers are deriving the advantage. Last night the honorable member for Hindmarsh (Mr. Makin) quoted the case of a storekeeper or wholesale produce merchant, who bought the whole of one farmer’s crop, stored it, and then sold it at a greatly increased price. It is such persons who are getting a “ rake-off.” I am not suggesting that the wheat-growers are not entitled to some assistance. Honorable members on this side of the chamber are prepared to help them; but we do not approve of the methods adopted by the Government. The honorable member for New England also said that honorable members in Opposition are not really opposed to a sales tax on flour, but are voting against it for political purposes.

Mr Thompson:

– I did not say that.

Mr MARTENS:

– A few weeks ago the Prime Minister (Mr. Lyons) rushed off to Melbourne to interview Sir Robert Gibson, the Chairman of the Commonwealth Bank Board, and submitted a request for an advance from the Commonwealth Bank to assist the wheat-growers. We wre informed, through the newspapers, that satisfactory arrangements had been made, but within a week or two outside influence became active, and the Government adopted this scheme. Although I was not present at the conference of representatives of the wheat industry convened by the Minister for Commerce (Mr. Stewart), I came in contact with some of the representatives, and I did not hear any of them, speak in favour of a sales tax on flour. I understood that they were anxious that the Government should arrange to provide for the establishment of a compulsory wheat pool.

Mr Stewart:

– They telegraphed me to the effect that they were in favour of a sales tax of £6 a ton on flour.

Mr MARTENS:

– The wheat-growers’ representatives who attended the conference did not make that suggestion. Some who claim to be wheat-growers a-re only living on those who produce wheat. When the Scullin Government was in .power many who were alleged to be wheatgrowers were in constant communication with the Government ; but, when inquiries were made, it was found that they were only living on the farmers, and were seeking a “ rake-off “. I appreciate the value qf the wheat-growers to Australia, and I recognize that it is the duty of the nation to support them, because, by so doing, it will be supporting the very foundations of the Commonwealth. After all, real wealth is that which is produced by tho application of la,bour to land. Money is merely a medium of exchange, and is of no real value. We cannot allow our wheat-growers to go to the wall. But I believe that the method adopted in this bill for providing them with relief is entirely wrong. The requisite financial assistance should be forthcoming without the imposition of a flour tax, which will press unduly upon the poorer sections of the community, who are the principal consumers of the basic foods of bread and meat.

It has been stated that it is the duty of the State Governments to provide for an increase of the value of the food relief which is extended to the unemployed. It was stated by the honorable member for East Sydney (Mr. Ward) that the food relief coupon issued by the Lang Government entitled the holder to a certain number of loaves weekly, the number being based upon his individual needs. Had that system been followed by every government in Australia, there would have been no need for this bill. The honorable member for New England (Mr. Thompson) has stated that the Commonwealth Parliament should so arrange matters in the industrial world that the Arbitration Court would automatically increase or decrease the basic wage to meet the fluctuating conditions of the time. Parliament has had ample time to deal with that subject. The honorable member for New England has been a member of this House for twelve years, yet in that time no effort has been made to legislate upon this matter. The Arbitration Court usually takes about twelve or eighteen months to catch up with the cost of living. In regard to the dole ration for the unemployed, the Government of New South Wales may say that it is not in a position to increase it, but I know very well what could be done if this Parliament determined that it should be done. The method originally proposed by the Prime Minister for providing the funds required under this bill would have been better for wheatgrowers, the majority of whom do not desire the imposition of a flour tax. Such a tax must necessarily increase the cost of bread. I know that the Prime Minister (Mr. Lyons) has received telegrams upon this matter from all parts of Australia, just as honorable members did when it was first discussed in this House two or three years ago. But when these telegrams were traced to their source it was almost invariably found that they emanated from persons who held mortgages over the lands affected, and who had dictated the very terms of those telegraphic messages. I shall support the bill.

Question resolved in the affirmative.

Bill read a second time.

Incommittee:

Clauses 1 to 4 agreed to.

Clause 5 -

Any money granted to a State under the last preceding section shall be paid upon condition that it is, subject to this act, applied by the State for the benefit and assistance of wheat-growers by -

. Providing benefit in reducing the cost of production of wheat (including the cost of transport and marketing) ; and

Assisting individual wheat-growers, according to their needs, but not, either directly or indirectly, upon the basis of the quantity of wheat produced by individual wheatgrowers.

Mr HAWKER:
Wakefield

– This clause limits the method by which the State may extend benefits or relief to the wheat-growers. Paragraph a provides that the State may employ the funds granted to it under this bill by “providing benefit in reducing the costs of production of wheat (including the cost of transport and marketing).” Paragraph b sets out that the State shall apply the funds granted to it by “ assisting individual wheat-growers, according to their needs.” Obviously, paragraph a includes any reduction of rail freights or harbour dues. In my own view, that would be the most economic method by which the State could assist the wheatgrowers. It is, therefore, possible that the States may apply a portion of the funds appropriated under this bill, in providing benefits by reducing the cost of transport and marketing. I should be very glad if the Minister would explain whether the limitation as to individuals who are eligible to receive assistance, applies to benefits under paragraph a of this clause as well as to the assistance that may be provided under paragraph b? It would be impossible to administer any system of providing benefits by reducing the cost of transport or marketing, if a discrimination were exercised as between individual growers, who might be advantaged by the provision the State chose to employ for reducing the cost of these services.

Mr PATERSON:
Gippsland

– The honorable member for Wakefield (Mr. Hawker) has called attention to an extraordinary anomaly in the bill. If the States give effect to clause 5 in its entirety, obviously its pro- visions will conflictwith those of clause 6. On the other hand, if clause 6 is to stand, effect cannot possibly be given to the provisions of clause 5. One of the methods by which the States may assist wheat-growers is by reducing the cost of transport, and if that means railway freights - as undoubtedy it must do - no discrimination can be exercised between a man who has a taxable income and a man who has not.

Mr Scullin:

– Does not clause 6 refer to paragraph b of clause 5?

Mr PATERSON:

– I do not think so.

Mr Scullin:

– It refers to “ assistance.”

Mr.PATERSON. - But clause 5 also sets out the methods which may be followed in granting that assistance. One of the methods provided is a reduction of rail freights. Obviously, any such reduction must apply equally to the man who has a taxable income and to the man who has not. It is manifest that clauses 5 and 6 are unworkable together.

Mr STEWART:
Minister for Commerce · Parramatta · UAP

– There is really no incongruity in the provision referred to by the honorable member for Wakefield (Mr. Hawker). That provision, with a very slight addition in paragraph b, really runs parallel with the legislation enacted last year. But although the provision in question was embodied in the legislation of last year, only one State rendered assistance to the wheat-growers in the matter of transport. It is, however, a fact that any State which desires to avail itself of the provisions of paragraph a of this clause must confine the benefit to be conferred to persons who are qualified to receive it under clause 6. I cannot agree with the honorable member forGippsland (Mr. Paterson) that under the measure it will be impossible to discriminate.

Mr THORBY:
Calare

.Whilst New. South Wales was the only State which made an effort to reduce wheat freights by rail last year, it is worthy of note that the attempt was made with money provided by the State Government. But the benefit conferred upon the wheat-growers was not in the nature of a direct reduction of rail freights. It took the form of rebates to the growers after the freights hadbeen paid. Thus the method followed by the New South Wales Government was entirely different from that which is prescribed here. It made a direct payment in one cheque, so that it is very difficult to show whether the freight reduction was effected out of the State contribution, or out ofFederal funds.

Mr Stewart:

– It represents less than half the money that the State provided.

Mr THORBY:

– To the amount received from the Commonwealth, the State added a certain sum, and the money thus provided was treated as one fund. In New South Wales, railway freight was not directly reduced, but approximately½d. per bushel, or 10 per cent., was paid to the growers, and this payment was calculated on the quantity of wheat transported by rail. Under this hill the discriminatory provision would come into operation, and the freight rebate could be paid only to growers who would qualify under this legislation. If the bill were left as it is, and the State authorities reduced railway freights - not, as was done in New South Wales, by a rebate-

Mr Paterson:

– They could not use the money provided by the Commonwealth to make a general reduction of freight.

Mr THORBY:

– If the State Government used portion of the money to reduce the cost of transport and marketing, it would not be a direct payment to the grower, and would, therefore, not conflict with clause 6. It would be paid to the railways commissioners of the States, who are not growers and would not have to qualify by submitting income tax returns.

Mr Paterson:

– What power is there to permit the money being paid to railway commissioners unless they rebate it to the growers?

Mr THORBY:

– The money could be paid to transport authorities under clause 5. It may be used by the States for the purpose of contributing to ‘the cost of marketing. So long as it is not a direct payment to the grower, it could be paid to an authority who is not an individual grower, to be employedin reducing the cost of transport and marketing. Unless we are careful, we shall restrict the operations of the State - the very thing we want to avoid. ; Mr. SCULLIN (Yarra) [7.18 a.m.].I am not enamoured of the methods proposed to be employed. The proposal really means the payment of a subsidy to the railway commissioners of the States.

Mr Hawker:

– Or to the harbour commissioners of the States.

Mr SCULLIN:

– I have yet to learn that- it is the function of the Commonwealth to subsidize State railway authorities. The responsibility of the Commonwealth is to encourage the export of wheat for national reasons. That is the stand I have always taken in regard to wheat. Any bounties paid out of Commonwealth revenue in respect of wheat should be paid on the wheat exported. The method adopted last year was supposed to be an improvement on the methods of the previous government. I admit that my Government had to pay on the whole production, but because the season was well advanced and sales had already been made,’ it was not able to , discriminate. We are in that position now. This matter has been left so late that payment cannot be made in respect of wheat which has been exported. The next best thing, is to pay on the basis of production. Paragraph a of clause 5 really amounts to a subsidy to the Railway Departments and Harbour Trusts to enable them to reduce their charges. That, I submit, is not the proper way for the Commonwealth to assist the wheat-growers. It should pay a bounty to the producers of wheat for export, and the money should be paid directly to the growers themselves.

Mr GREGORY:
Swan

.The Minister has not made the position clear. Are we to understand that railway freights may be made cheaper to the person who would be entitled under the next paragraph to receive assistance from the Crown, or is the reduction of freights to be general? If it is to apply generally, and there is to be a reduction of the freight rates by so much a ton for each mile the wheat is carried on the railways, it will be all right, but if it is to apply only to those persons who are covered by the next paragraph, each person will have to make a declaration.

Mr Latham:

– It will apply generally. Railway freights could not be varied according to the income of the producers.

Dr EARLE PAGE:
Cowper

– If the position is as the AttorneyGeneral (Mr. Latham) states, it would be possible for the Governments of New South Wales and Victoria to distribute the whole of the money available to them under this bill in the form of reductions of freights. That surely would be on a bushel basis. Clauses 6 and 7, which provide that a wheat-grower shall receive assistance only because he has not a certain income, would then become null and void.

Mr Scullin:

– There could be a differentiation between the freight rates charged to Brown and Jones.

Dr EARLE PAGE:

– At first the Government said that it could not deal with the industry as a whole, but only with each individual according to his need. Now it says that that is not its intention, but that it will hand the money to the States to enable them to make reductions of freights. Is there to be any restriction on the action which the States may take? Does paragraph b qualify paragraph a, or does clause 7 qualify clause 6?

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

– This bill has been drawn upon a ‘basis which distinguishes between benefit and assistance. In clause 5 there is a reference to the payment of money to a State “for the benefit and assistance of wheatgrowers “ in either of two general ways. The words used are “benefit” and “ assistance “.

Mr Paterson:

– That is a very fine point.

Mr LATHAM:

– It has been done deliberately. Clause 5 provides that -

Any money granted to a State . . . shall bc paid upon the condition that it is . . . applied by the State for the benefit and assistance of wheat-growers by (a) providing benefit in reducing the cost of production of wheat . . and (6) assisting individual wheat-growers . . .

Clause 6 provides that a wheat-grower shall not be entitled to receive “ assistance “ under this act unless during the year 1933 he derived no taxable income, &c. The proviso as to income applies only to paragraph b of clause 5. The bill is deliberately drafted in that way to express the intention of the Government. It will be seen that except in regard to the Federal Capital Territory that distinction runs throughout the bill. The bill was so drafted because it was considered to be ridiculous to provide that any general reduction, say, of freight or of transport, should be made dependent on the financial position of the’ particular grower concerned. Honorable members will see that the term is “ assisting individual wheat-growers “. There is a distinction between the “ benefit “ which may be provided under paragraph a and the “ assistance “ which may be granted to individuals under paragraph b. Assistance to individual wheat-growers will be subject” to the limitation stated in paragraph b. It is possible that a State may say that it will not have anything to do with paragraph b, but will expend all its money in the manner set out in paragraph a. From what I have heard this morning, I am inclined to think that the Government was wrong in thinking that the farmers of a State would be sufficiently intent on handling some money themselves to prevent a State from dealing with all the money under paragraph a. The Government thought that the farmers would insist upon getting money for themselves, as individual wheat-growers, in addition to receiving a benefit under paragraph a in common with other farmers. If there is good reason for thinking that a’ State would expend all the money under paragraph a, and none under paragraph b, the best thing to do would be to strike out paragraph a altogether. I have already explained why that I am calling the income tax condition was not attached to paragraph a but was deliberately attached to paragraph b.

Mr Beasley:

– The farmers should go for paragraph a and seek to have paragraph b wiped out.

Mr LATHAM:

– If the farmers of a State found that they would get only a reduction of freights they would probably want to handle some of the money themselves, and might raise an agitation in order to get it in. “We have thought that we could rely upon what may be called the psychology as well as the logic of the situation to effect a fair distribution between a and b.

Mr Thorby:

– If applied to railway freights, the New South “Wales quota would wipe out the freight on wheat”.

Mr LATHAM:

– The State would be able to do that; but that is not the desire or the intention of the Government.

Mr THORBY:
Calare

. -The average freight on wheat over the whole of New South “Wales amounts to 5.6d. a bushel. On the estimated harvest, the transport will cost within a pound or two of the amount of the New South “Wales quota, , which is £911,094. Therefore, if the quota were applied to this purpose, the whole of it would be thus absorbed.

Mr Scullin:

– There is nothing in the bill to prevent that action from being taken.

Mr THORBY:

– But there is sufficient common sense in New South Wales to present its being even suggested. I appeal to the committee not to deprive the States of the liberty that is extended to them to use discretionary powers under paragraph a. Some honorable members have suggested that that paragraph should be omitted from the bill. I contend that it is a most valuable provision, and should be retained.

Mr Latham:

– The Government considers that it will prove valuable if fairly administered. I admit that theoretically, under the bill, a State government could fix its railway freight at 4s. a bushel, and obtain the whole of the quota for its own revenue. It is considered, however, that the farmers would not tolerate that, and that it is not likely to occur.

Mr THORBY:

– It is only a theory in the case of New South Wales, because the railway commissioners and not the Government fix railway freights and regulate the conditions of transport. The Attorney-General’s explanation in connexion with paragraph a is quite in accord with views that I have previously expressed. I am particularly anxious that that paragraph should be retained unaltered, because it leaves to the States wide discretionary power in regard to the manner in which the money shall be expended for the benefit of those who are engaged in the wheat industry. I venture to affirm that there is no risk of a State making an undesirable distribution of it.

Sir LITTLETON GROOM:
Darling Downs

– I suggest that the clause be not altered. The six States have six different sets of conditions, and their administrations are brought more closely into touch with the farmers. This matter should be left to their discretion. In Queensland, the administration was to some extent in the hands of a wheat board. This provision is identical with one that was previously enacted, and there were no serious complaints of abuse of power.

Mr HAWKER:
Wakefield

– The explanation of the AttorneyGeneral (Mr. Latham) completely sets at rest any fears that I may have entertained. I hope that the committee will leave with the States the discretion to apply a portion of the money to measures that will tend to reduce the cost of production. The Leader of the Opposition (Mr. Scullin) does not consider that assistance in regard to transport is in any way the concern of the Federal Government. I agree that the provision of transport does not come within the province of the federal authority ; but that authority can do something to restore the balance between industrialized and non-industrialized States. The balance is disturbed by the fact that the less populous States have not big centres of distribution like Sydney and Melbourne, which enable primary production in New South Wales and Victoria to be, in effect, subsidized by reason of the ‘fact that a lower outward wharfage rate, or no charge at all, is imposed ‘with respect to goods exported, because of the large amount of revenue derived from inward traffic. I understand that the reason for a portion of the additional grant to South Australia this year was to enable that State to give to its primary producers concessions in regard to rail freights comparable with the reductions made in other States. There is no practical danger of more than a small proportion of the money being applied to any scheme for tho reduction of the cost of production. Tho chances are that none of it will be so applied in any State. It is, however, a wise discretion to give to the States.

Another point to be remembered is that concessions with respect to rail freights are of the greatest assistance to the farmer who has the longest haulage. When the price of wheat is extremely low, it is he who feels most heavily the smallness of his proceeds after freight and other charges have been met. I hope that the committee will leave the clause as it stands, in the absolute certainty that, in practical matters no State government or parliament, and no railway commissioner, would dare to apply the whole of the money in such a way as to prevent the receipt by individual farmers of a substantial amount of cash.

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

– I desire to know from the Attorney-General (Mr. Latham) whether, under paragraph b, the money will be devoted to the satisfaction of liens which have been given by farmers over their crops, so that they will not obtain immediate benefit from it. If that is the case, the farmers will be, to a large extent, robbed of necessary assistance. In 1931 provision was made for the’ money to be paid to the farmer direct. When he is in immediate need, he should get it.

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

– The drawing of distinctions between the relative needs of farmers is to be left to the administrative authority. It is not proposed to lay down a complete system for the comparison of the needs of one man with those of another. The administrative authority will necessarily have regard to the actual financial condition of each farmer.

Mr Prowse:

– The honorable member for Kalgoorlie (Mr. A. Green) has in mind cases in which farms are really being run by the Government.

Mr LATHAM:

– It is quite impossible to lay down general rules governing such a matter. While it might be difficult for an administration to distinguish between the needs of individual farmers, I am inclined to think that, from a practical point of view, the grant would be distributed upon very broad lines, indeed, because the money has to be distributed within a limited time. I should think that the authority would not examine the needs of “ A “ as against those of “ B,” but that the money would be distributed upon an acreage basis without such inquiries. It would, however, be competent for the authority, if it thought such action proper, to take into account all kinds of considerations affecting the financial position of each individual.

Mr NOCK:
Riverina

.Would it not be better to omit the words “ according to their needs “ ? It is of no advantage to include them; but, on the contrary, the effect of them may be to cause trouble to the distributing government.

In addition, and in view of the provisions of the Farm Belief Act in New South Wales, I ask if it is possible to provide regulations similar to those of last year for the payment of this money direct to the farmer. Under the Farm Relief Act, the condition is imposed that the whole of the income of a farmer who has had a stay order issued for his protection shall be paid to the Farm Relief Board. Although such a farmer is more in need of assistance than another who is not similarly situated, or one under the Rural Industries Board he is placed on a different footing.

Mr.Scullin. - Is that recent legislation?

Mr NOCK:

– It is. If it is not possible for the Attorney-General (Mr. Latham) to make this provision on the spur of the moment, I suggest that the bill be amended as I have suggested in the Senate.

Sitting suspended from7.45 to 9.15 a.m.

Mr STEWART:
Minister for Commerce · Parramatta · UAP

– I move -

That the words “ benefit and “ be omitted.

If this amendment is carried, consequential amendments will be necessary throughout the bill. The object of this and the consequential amendments is to ensurethat the benefits of the measure shall be limited to those who qualify in accordance with the provisions of the bill.

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

– The Government has been impressed by the arguments which have been placed before the committee, some of them expressing a hope, and others, a fear that the effect of passing the bill as proposed would be to enable a State, if it so desired, to ignore altogether the provisions for limitation of income in thecase of individual wheat-growers. It certainly is not the idea of the Government to propose a flour tax, and to allow any associated measure, to. remain in such a form as to make it even possible for the income limitation to be ignored. Accordingly, it is proposed to move to strike out paragraph a. I shall indicate at this stage the scope of the amendments the Government will propose in order that honorable members may realize the real significance of the one now before the committee. The Minister will later move to omit the words “benefit and”, and the whole of paragraph a, and to alter paragraph b in order to bring it into precise conformity with the verbiage of the act of last year, except for the addition of the words “directly or indirectly.” The alteration to be made in paragraph b is the striking out of the word “ assisting “ and the words “ according to their needs.” The honorablemember for Riverina (Mr. Nock), and the honorable member for Kalgoorlie (Mr. A. Green) have referred to possible difficulties that might arise, owing to the differing financial conditions of farmers. Those difficulties exist, and it is not easy to lay down a general rule for them. They may arise from the words “ according to their needs,” and it is accordingly proposed to omit them, and to make paragraph b read -

Providing for the needs of individual wheatgrowers, but not, either directly or indirectly, upon the basis of the quantity of wheat produced by individual wneat-growers.

If the amendments are agreed to clause 5 will read as follows: -

Any money granted to a State under the last preceding section shall be paid upon condition that it is, subject to this act, applied by the State for the assistance of wheat-growers by providing for the needs of individual wheatgrowers, but not either directly or indirectly upon the basis of the quantity of wheat produced by individual wheat-growers.

The effect of such a provision would be to make the whole grant applicable to any payments to provide for the needs of individual wheat-growers, and clause 6 will then apply to all the moneys so paid. A number of representations have been made to the Government with respect to the terms of paragraph b of clause 6, and paragraph b of clause 7. Clause 6, as it stands, requires a wheat-grower to’ produce evidence that it is unlikely that he will derive a taxable income during the current year. An effort has been made to arrive at a fair method of determining some basis of necessity, but it is recognized that that may be very troublesome in the case of the wheat-growers themselves, and the Government is prepared to amend paragraph b in both clauses 6 and 7, and, consequentially, clause 10, by omitting the words referring to the improbability of deriving taxable income during the current year. If that alteration is made, paragraph b of clause 6 will read - “or (b) having derived such income - lie produces evidence to the satisfaction of a State authority that there are circumstances by reason of which it is just thathe should receive such assistance “.

With reference to the object of, and the justification for, the amendments, as I said earlier in the morning, the view of the. Government when it drafted the bill was that the f armers could be relied upon to see that all the money did not come under paragraph a; but the remarks by honorable members this morning have indicated that possibly there are some persons who would be glad indeed to see all the money come under paragraph a - persons who are not uninfluential and have a special right to speak on behalf of at least some sections of the community. The definite policy of the Government in relation to this assistance to wheat-growers is this: It is only with reluctance and regret that the Government has been forced into proposing a flour tax. We have heard the arguments against it; the Government was already well aware of those arguments, as, indeed, all honorable members were. But it certainly has no intention to introduce that tax and the other additional tax which is required, unless the money payable to the wheat-growers, which, as many hon-. orable membershave said, is not as much as the wheat-growers themselves say they need, is distributed on what the Government regards as the best possible basis. It would not be a proper distribution if the money were allowed to be received by persons who, although wheat-growers, do not need the assistance which this bill provides. The basis of the proposal of the Government is that it is proper to define the area of need and to confine the distribution of moneys, so far as it can fairly be done, to that area. Any money distributed outside that area to people who are not in need would diminish the money that could he received under the measure by the people within the area. There was a fear last year that in some quarters efforts would be made to evade the provisions of the federal legislation, and to distribute money upon a bushel or quantity basis, which was not the intention of the Government. In one State the Commonwealth Act was evaded by professing ‘ to pay for the bags in which the wheat was despatched, and the money was paid on the basis of the number of bags despatched from the farm. The words “directly or indirectly “ have been inserted in the clause to prevent that or any similar practice.

Mr Fenton:

– Were not those words in the provision of last year?

Mr LATHAM:

– No. To pay per bag is the same as to pay per bushel. Last year the act was evaded. It is not proposed that the intention of this Parliament, as declared in its legislation, shall be evaded so easily this year.

Mr. THORBY (Calare) [9.27 a.m.).The amendment moved toy the Minister for Commerce (Mr. Stewart) and expounded by the Attorney-General (Mr. Latham) makes the bill consistent with the principle at which the Government has been aiming throughout, but it goes further, and supports the argument of the Leader of the Country party (Dr. Earle Page) by making the payment 100 per cent. dole, because assistance is to be confined to those farmers who are in necessitous circumstances. There can be no doubt in the minds of honorable members as to the manner in which the money is intended to be distributed, and, personally, I do not quarrel about that, because I have supported that view all along; although I was accused in an irresponr sible utterance by one honorable member, of being anxious to obtain some pecuniary benefit for myself. I take this opportunity to say that, although I am a wheat-grower, I have never secured one penny by way of bounty or acreage payment, and that, although I am entitled to assistance, I shall not make any claim under this hill. I merely emphasize the fact that this amendment will confine all the payments under the bill to those who can prove that they are in financial need. I have supported that principle from the outset.

Mr HAWKER:
Wakefield

– The amendments submitted by the Minister are, as the honorable member for Calare (Mr. Thorby) has said, consistent with the whole spirit of the bill, and, as such, objection cannot be taken to them. They are consequential upon a last-minute understanding by members of the Government to give effect to some extent to what the Government desires.

We started off this morning with two Ministers’ giving exactly opposite interpretations of the meaning of. the bill. Now that Ministers fully understand what the bill, as originally introduced, implied, they are bringing its clauses into line, and I congratulate them upon that. The question at issue is whether the bill is a dole measure, or whether it gives assistance to the wheat-growing industry. Since the amendment means that the dole principle is being adopted for the allocation of assistance to the wheatgrowers, I am opposed to that suggestion. This is a suitable opportunity to make a few observations about the difference in principle between granting a dole and paying a bounty on sound economic lines, for the- purpose of keeping the wheat industry going, in the same way as assistance is given to some other industries by tariffs or bounties, in order to help them in their initial stages to meet the fierce competition of long-established industries in other countries. As the Attorney-General has said, some argument may be advanced in support of the suggestion that a dole is being given; but in this particular case no practical support is found for the contention that by cutting down the amount granted to wheat-growers who have other income, appreciable additional assistance will be available to those who are in greater need. Under the formula which the Government has chosen, very few growers will be excluded, and only a small sum will be available for additional assistance to those who are in greater need. Arguments along these lines really amount to a rather unctuous sophistry. But another argument that is sound, to a degree, from the Government’s. point of view, is that the placing of a dole stigma on the grant makes it humiliating to the industry. Those of us who represent wheat-growing districts, somewhat to our surprise, have support in our opposition to the dole stigma from a farmers’ organization, which generally represents by far the most needy section of these producers. This association realizes the unfairness of the dole system as applied to one of. the biggest industries in the Commonwealth in a time of crisis, and the insignificant additional financial help that will be made available to necessitous farmers by limiting tho area of the grant. Tha.t, I think, makes it quite plain that a merely specious argument has been advanced on behalf of the Government. This matter has been mentioned many times by various honorable members in their second-reading speechs therefore T do not propose to deal with arguments either in favour of treating this industry the same as other industries, or applying to other industries the same scrutiny as is to be directed to the growers of wheat. Providing all industries are treated consistently, no charge of hypocrisy on the part of the Government would be justified. Apart from the fact that a few individuals may be excluded from the . benefit of the bill, and a stigma may be cast over a la”rge number of others, the Minister’s proposal will undoubtedly lead to a good deal of further delay.

I immediately recognize the Minister’s consideration in accepting the amendment initiated by the honorable member for Calare (Mr. Thorby) tq remove the hypothetical conditions regarding income received by growers in the ensuing year. That will be of great help .in the administration of what amounts to a discretionary . hardship clause which, if judiciously administered, will make the working of the;relief plan much more simple and effective. All the applications will require double handling, and tens of thousand?, of farmers’ income tax returns, which would be normally postponed by the depart-‘ ment, to the end of the year, because they yield very little income tax, will have to be turned over early. This will mean considerable delay in making the payment to the main body of farmers. A few years ago, when a wheat bounty was being paid on a production basis, tremendous delay occurred because of the necessity to employ extra staff to check the applications’ within a reasonable time. The proposal under consideration will necessitate two scrutinies of each application. It it would make available a large additional sum for relief in the more needy cases, it might be of practical benefit. There can be only two reasons for it - the desire of members of the Government, and certain members of ‘ metropolitan constituencies - -to be able to say that the bread tax is being imposed for the purpose of a dole and not a bounty, and the desire to cause as- much humiliation and dissatisfaction as possible to those engaged in the wheat-growing industry. This antagonism to the industry is probably not deliberate, but is rather a reaction to the exasperation caused by the criticism directed against the Government from some of the rural industries. Because of its impracticability, its unfair differentiation between industries, the delay that it will cause and the stigma that it will place’ on the recipients of the bounty, I intend to oppose the Government’s proposal, if a request is made for a division.

Mr PATERSON:
Gippsland

– I am grateful to the AttorneyGeneral (Mr. Latham) for the crystal clearness with which he interpreted the meaning of clause 5. If his lucid explanation of the difference between “ benefit “ and “ assistance “, and of the intention of the Government, results only in the committee deciding to delete half of the clause which has been so clearly explained, I think that we shall be in a worse position than if no explanation had been given. I shall certainly oppose the amendment now submitted by the AttorneyGeneral .for the deletion of the first part of the clause. I see more merit in the clause since the Minister has given his clear exposition’ of its meaning. The amendment foreshadowed by the Minister to remove paragraph b of clause 6 will be of real advantage,and will improve the clause so far as a very bad clause can be improved. I am opposed to the removal of paragraph a of clause 5, because I believe that the States should be left with some discretionary powers as to how they should apply, not only the assistance, but ‘also the benefits. The inclusion of the words “ directly or indirectly “ in paragraph b should be sufficient to ensure that the States shall not flout the will of this Parliament. I was better satisfied with the clause as originally drafted than I am now that a considerable’ amputation is proposed.

Mr FENTON:
MARIBYRNONG, VICTORIA · ALP; UAP from 1931

– The honorable member for “Wakefield (Mr. Hawker) was rather severe in describing as a dole the assistance which the wheat-farmers are to receive under the scheme outlined by the Attorney-General (Mr. Latham). For my part, I do not believe in making distinctions between people merely because they live in different parts of the State. There are hundreds of honest, reputable persons in my electorate, as good citizens as any who ever lived, who are receiving the .dole, and it is no reflection on them that they are doing so. The Government has been accused of making a distinction between the wheat-growers and the fruit-growers, but I believe that the Senate has amended the bill which provided for assistance to the fruit-growers so that the assistance shall be rendered only to those in need of it. I do not believe that the fruit-growers themselves will take exception to that. We all want to help the wheat-farmers, and we should do our best to ensure that this grant of £3,000,000 shall be paid to those who are most deserving.

Mr NOCK:
Riverina

.This last-minute alteration is another instance of the Government’s vacillation and indecision. Some discretion should be allowed to the State Governments. The industry is really deserving of better treatment than is to be meted out to it under this system of “ doles for duds “, which places a premium on inefficiency. The distribution of the money on a production or acreage basis would be fairer, though if continued it would be open to the objection that growers might be tempted, to put the combine into a paddock, and scratch over another 50 or 100 acres in order to qualify for a larger share.

In the Labor Daily of three days ago, there was published a picture of a worried wheat-grower filling in the inquisitorial form of application for assistance. There should be no need for that sort of thing. Last year, the distribution was carried out by the States in a simple and satisfactory way, and the growers would be better pleased if the same method were adopted this year. It is not as if half the growers, or any large number of them, did not need assistance. Of a total assessable income for taxation purposes amounting to £123,000,000, the whole of the rural and mining industries supplied only £5,000,000. I cannot understand why the wheat industry should be singled out for this form of discrimination. The bounties paid on gold, iron and steel, galvanized iron, sulphur, wine, cotton,, and cotton yarn are distributed on a production basis. The wheat ‘industry stands second to none as a provider of employment, and as a source of overseas credits. In the granting of assistance under the tariff to secondary industries, the Government has never discriminated between large, small, bankrupt, solvent, efficient and inefficient. I object to the’ proposal of the Ministry to humiliate the wheatgrowers. The Government has contrived to offend many people recently, and it will certainly offend the wheat-farmers if it places them on the dole as is proposed in spite of the money allotted. This will not be forgotten at the next elections.

Mr STEWART:
Minister for Commerce · Parramatta · UAP

– I hope that the committee will accept the amendment. During the second-reading debate on this bill the honorable member for Hindmarsh (Mr. Makin) suggested that I was not particularly keen on a flour tax. He spoke correctly, and his statement would have been just as true had he applied it to every member of the Cabinet, and every supporter of the Government. I do not like the flour tax, and should like it still less, if some of the proceeds were to go into the pockets of those who participated largely in the bounty which was distributed in former years. I have had prepared for me figures showing the amounts paid under the scheme which was in operation two years ago for the assistance of the wheat-growers. The figures for last year are not available, because the money was distributed by the States. A list of the-, amounts paid to individual growers^ includes the following : - £1,466 14s. lid.,. £1,434 19s. 7d., £1,006 9s. 9d., £783,. £516 5s. 6d., £480 19s. 5d., £475 13s. 4d. £1,339, £1,258, £958, £791, £714, £702,. £4,381, £1,483, £1,283, £1,252, £1,170, £826, £771, £760.

The amount of £1,434 which appears in the list was paid to a company which is not registered in Australia. Some honorable members’ have claimed that, under the Government’s proposal, some of the growers who are really in need will receive no assistance. As a matter of fact, for the year 1931-32 the number of farmers who paid federal income tax was 8,500, and it is estimated that half of them were wheat-farmers. Therefore, out of a total of 65,000 growers, only 4,000 will be excluded from the benefits of the Government’s scheme, but among those excluded we may be very sure will be those who, two years ago, were paid the amounts I have mentioned.

Dr EARLE PAGE:
Cowper

– I confess that I am becoming somewhat confused in trying to keep up with the Government’s erratic changes of mind. When this measure was first introduced, I was anxious to support it so far as I was able, but since the Government has brought forward its amendment I am not certain whether I am in favour of the scheme or not. I do not know whether we shall be justified in supporting the original proposal, which apparently represented the considered opinion of the Government, or the sudden inspiration of the Attorney-General (Mr. Latham) as represented by the amendment now before us. The Government has shown much the same vacillation in regard to a number of measures introduced during the last few days. It introduces a measure in the form of a neatly printed bill, and then, before honora’ble members have even had time to consider it, comes down with ahost of amendments. The situation is ludicrous.

I am opposed to the Government’s proposed amendment to clause 5. I believe that the States should be given a fairly free hand- in the distribution of this money. Those who provide the money are the taxpayers of the State as well as of the Commonwealth, and State governments are as much responsible to the electors as is the Commonwealth Government. I am prepared to support a proposal that the whole of this money shall be given by the Commonwealth to the growers as an export bounty; but if the States are to be made the vehicle of its disbursement, they should be allowed to exercise their sense of responsibility. In support of this amendment, the Minister read a statement setting out the amounts received by certain individuals two years ago through the payment of a bounty of 4^d. a bushel on production, and he suggested that it was scandalous that one man should have received as much as £4,000. But I should like the Minister to say how much the Australian glass manufacturers have received, not through the direct taxation of the people, but through the indirect taxation consequent upon a tariff legislation passed by this Parliament. I should also like to know how much Lysaght Limited, the galvanized iron manufacturers, have received in bounties on production ? They have benefited enormously, but no one has produced a list of shareholders in the company, and said that this person has received say, £4,000 and another £50, and that the £4,000 must be refunded. If the Government introduced a bill to place the granting of relief to the wheatgrowers on a purely relief basis, I should be prepared to support it as such; but to make the provision now proposed in this bill which purports to help the wheat .industry as . a. whole, would be a scandal ‘and an outrage because of the discrimination between primary and secondary industries. I am astonished that honorable members of this Parliament, who, year after year, have demanded and obtained bounties and tariffs for secondary industries without even raising a question as to the profits made in those industries - although, in some cases, these have been, exorbitant - should now endeavour to impose a condition of this kind on the wheat-farmers of this country. If the Minister had produced figures covering the payments made to farmers last year on an acreage basis, he might have been able to make a deduction of some value from them, but the quotation of payments made on a production basis is worthless as an argument in this instance. I appeal to the Government to formulate a policy and stick to it for at least half-an-hour. This bill, as originally introduced, was designed to give effect to the Government’s policy, and the members of the Country party were prepared to support it in many particulars. In certain respects the policy is similar to that of last year, and in the mind of the Government then nothing was wrong with it. I have heard nothing during this debate to indicate that there was anything seriously wrong with the policy of last year. Why should honorable members desire to fetter and hamstring the States in the distribution of this money? During the period that I was Commonwealth Treasurer I frequently tried to retain for this Parliament a slight measure of control over the expenditure of the money that it made available from time to time for the States ; but I found that the majority of honorable members were totally opposed to any restrictive conditions whatever, for reasons that, if valid then, should be valid now.

Mr GREGORY:
Swan

.E am surprised that this debate should have taken place on this clause instead of on clause 6. The Minister for. Commerce (Mr. Stewart), in support of the amendment, read a list of the amounts paid to certain wheat-growers two years ago on an acreage basis. I hold in my hand a list giving the names of many business companies, the majority of which have been paying dividends of 8 per cent, and 10 per cent, on preference shares,’ arid up to 15 per cent, on ordinary shares, in consequence of the tariff policy for which the honorable member for Henty (Sir Henry Gullett) and other supporters of this Government were to a considerable extent responsible.

The CHAIRMAN:

– The honorable member is now going beyond the scope of the clause and the amendment.

Mr GREGORY:

– If the Government intends to deal with the wheat industry on a charity basis, I have very little interest in the subject. I have held consistently to the view that I expressed yesterday that the wheat industry is entitled to assistance on the same basis as other Australian primary and secondary industries. Yesterday I read a number of telegrams from representatives of wheat-growers’ organizations protesting strongly against the discriminatory provisions of this bill, and this morning I received a telegram which points out that “ the revised conditions of the wheat bounty will be a penalty upon hard work and efficiency.” That is very true. If the policy behind this amendment is persisted in, the less efficient a man is the greater will be his advantage. The wheat industry has been of enormous value to the Commonwealth, and those engaged in it should not be placed in the position of having to accept charity at the hands of this Parliament. I ask honorable gentlemen how it would be possible for a farmer to say, until four or five months have elapsed, whether he will have an assessable income or not? Yet surely the money now proposed to be made available should be distributed to those who need it as speedily as possible. The events of even the last week or two show how difficult are the conditions under which farmers work. The great storms that have swept over Victoria in the last few days have caused huge losses in wheat-growing areas.

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– That is a matter for insurance.

Mr GREGORY:

– Surely the honorable gentleman does not suggest that insurance could cover all the losses that have been incurred? The collapse in the world price of wheat has also been a serious factor. In all the circumstances, I trust that the Government will take its courage in both hands, and provide a bounty for the wheat-growers on a fair and equitable basis. It is made clear in the clause that the grant is not to be made “ upon the basis of the quantity of wheat produced by individual wheatgrowers”. I agree with that provision, but contend that the relief should have been given on an export basis. When the next clause is under consideration, I intend to move an amendment to test the feeling of honorable members as to whether assistance to the wheat industry shall be upon a charitable or an equitable basis.

Mr PROWSE:
Forrest

– I oppose the amendment. The bill was bad enough in its original form, but this would make it infinitely worse. Five or six weeks ago the Minister for Commerce (Mr. Stewart) met a conference of representative wheat-growers in Canberra and discussed the situation with them. It was pointed out to the honorable gentleman that the wheatgrowers did not want a grant on an’ export basis, but wanted provision to be made for wheat for local consumption to be sold for about 4s. 6d. a bushel. The. conference did not desire any discrimination as between wheat-growers. All the telegrams from the wheat-growers’ organizations have made that point abundantly clear. There is a unanimous protest from the. wheat-growers against any discrimination.

Mr Holloway:

– I have received many telegrams protesting against the flour tax.

Mr PROWSE:

– I submit that the Minister misled the committee by merely reading the list of amounts paid to wheatgrowers on the production basis two years ago; he should also have said that in that year every wheat-grower produced his wheat at a loss of ls. a bushel. I ask the Minister whether the person to whom he referred as having received over £4,000 in payments that year has compounded with his creditors ? The Minister did not mention the name of the individual concerned, but I think I know to whom he referred. Any citizen who that year received £4,000 through the payment of a bounty of 4jd. a bushel on wheat had a tremendous area under crop, provided a vast amount of employment directly on his farm, and indirectly in the factories of this country, and was in every sense a useful citizen. The iron and steel companies of Australia have received enormous sums in bounty from the Commonwealth Government. One wealthy firm alone received £600,000, although it was at that time paying big dividends to its shareholders. In these circumstances, it would be invidious for this National Parliament to discriminate unfairly against the wheatgrowers. I feel ashamed that statements such as those of the honorable member for Maribyrnong (Mr. Fenton) should have been made. If the honorable gentleman is consistent, he will in the future insist that any enterprise which desires assistance from this Government by way of protection shall, in the future, entirely exhaust its capital and resources before applying for. help. I take the same stand as the honorable member for Calare (Mr. Thorby). If it is suggested that I am desirous of receiving assistance myself, I shall sign an agreement to forego any claim that I may have. The wheat industry is of inestimable value to the Commonwealth, and even if certain farmers have a small assessable income for this year,” they are entitled, in consequence of th6 national service they render, to a measure of assistance to enable the industry to continue its operations. Farmers who have any assessable income will, of course, be required to make their contribution towards the payment of this bounty. It is neither fair nor “ cricket “ that a provision of this kind should be included in the bill. The pursuance of this policy will result in the elimination of efficiency from the farming industry, and the survival of the unfit. The tendency will undoubtedly be for efficient farmers to divert their activities to other channels. The wheat industry is so important to Australia that everything possible should be done to prevent it from languishing. In these circumstances, I shall oppose the amendment.

Mr SCULLIN:
Yarra

.The position in which honorable members of the Country party find themselves with regard to this proposed discrimination is the result of their own action, as I shall show in the course of a few words. Last year they supported this method of distributing the relief to wheat-growers and commended the Government for departing from the policy of the Scullin Government.

Mr Hill:

– I did not.

Mr Prowse:

– Nor did I.

Mr SCULLIN:

– Those two honorable members were among the few exceptions. Honorable members of the Country party have’ urged that the pay ment should be on an acreage basis; that was urged even by a deputation to the Minister. From the beginning I have held that, if there is to be a contribution from the public funds on an acreage basis to make up losses sustained because of floods, droughts, and other acts of providence, that is a State responsibility. If the grant is to assist an industry carrying on a great national service, it is the responsibility of the Commonwealth to And the money and on that basis I could not support discrimination. However, the Government has introduced a bill which is specifically designed to assist needy producers and that point has been stressed to justify a tax being imposed on flour. If that proviso is eliminated, the last shred of an excuse for a tax on flour will disappear. I agree with the logic of the argument that Parliament has never discriminated between manufacturers when giving tariff assistance to them; it has never inquired whether they were wealthy or otherwise. Some sneers have been forthcoming from members of the Country party because my Government proposed to borrow money to provide this assistance. Borrowed money has to be paid from the Consolidated Revenue, but its repayment is spread over a period of years. I have always opposed borrowing in times of prosperity so that we might have something on which to borrow in times of depression. That is what is done by every private person and what should be done by governments. It is cruel in times of depression to ask people to pay all costs at once, instead of providing for the burden to be distributed over a number of years.

Actually, it was the Country party which first urged that there should be a tax on flour ; that was when my Government was in office. The proposal was rejected by the Scullin Government, at a time when it was difficult to raise money.

Mr Prowse:

– There is no difference between the two proposals.

Mr SCULLIN:
YARRA, VICTORIA · ALP; FLP from 1931; ALP from 1936

– There is a difference, lt was possible by controlling the marketing of wheat and the price of bread and flour to provide 4s. a bushel for wheat’ at sidings without increasing the price of bread.

Mr Thorby:

– That is not so.

Mr SCULLIN:

– When, wheat was 4s. 9d. a bushel the price of bread was 4d. per 2-lb. loaf, and wages were the same as they are to-day. A price of 4s. 9d. a bushel for the miller is more than 4s. a bushel for growers at sidings. Honorable members of the official Labour party will fight this flour tax, but I know they will be defeated by the votes of honorable members of the Country party. Let honorable members come into the open. If they claim that the wheat industry should be placed on the same basis as other industries, and receive support because it renders a great national service, I am with them; but I am totally opposed to the demand for a tax on flour. Such an impost has been asked for to finance the assistance given to the iron and steel industry or any other secondary industry.

This amendment, of course, is only leading up to the main clause, and I hope that the debate will not be repeated when we deal with clause 6. The leader of the Country Party (Dr. Earle Page), and the honorable member for Forrest (Mr. Prowse), gibed at the honorable member for Maribyruong (Mr. Fenton) and others for consistently standing for the protection of Australian industries. I yield to no man in my consistent support of primary industries on exactly the same basis as I support secondary industries ; but I point out that no secondary industry has been bolstered up by the methods which are supported by members of the Country party.

Sir LITTLETON GROOM:
Darling Downs

– It is unfortunate that an important amendment like this should have been moved at the eleventh hour, after the bill had been circulated in all States, and it is extraordinary that such a fundamental change should be proposed after the. explanation which was given by the Government this morning. When we were considering the clause before breakfast, it appeared to me that sub-clause a was not meant to apply in the way in which a law providing for the bounty applied. When the Leader of the Opposition (Mr. Scullin) was in power, he introduced a bounty which provided for the payment of 4½d on every bushel of wheat. Its distribution was definite, and clearly produced the results to which the Minister for Commerce (Mr. Stewart) has referred. As a bounty on production, that was justifiable, and, naturally, wealthy producers, among others, benefited. But it was understood that subclauses a and b were inserted in this bill in order that there should be a certain amount of elasticity in the administration of the legislation by State governments. I think that the clause, as it originally stood, could have applied without any of the serious consequences mentioned by the Minister in connexion with the bounties. It was intended that relief to the industry generally should be* applied to reduce the cost of production, including transport and marketing, and that individual growers should be assisted according to their needs. A wheat pool is in operation in Queensland which could assist growers in connection with transport costs, and it need not bring about the evils that are feared by the Minister. I regret that he is proposing to take from the bill the elasticity which at present it possesses. I quite understand that he is anxious that there shall be no suspicion that wealthy growers are likely to benefit from the imposition of a sales tax on flour, and I do not blame him for taking every step to safeguard the position. Had honorable members been given a little more time, they could possibly have framed an amendment to give effect to the desire of the Government, while preserving the elasticity that the bill now contains. I am afraid that, like the honorable member for Calare (Mr. Thorby), I find myself in the position of having to support the amendment moved by the AttorneyGeneral (Mr. Latham).

Mr STEWART:
Minister for Commerce · Parramatta · UAP

– The honorable member for Darling Downs (Sir- Littleton Groom) suggested that none of the difficulties to which I referred could happen if this measure were administered under pool legislation similar to that which exists in Queensland. As a matter of fact, if it were administered through a pool, all those who sent their wheat to the pool would participate in the benefits it confers, and it is quite conceivable that some would be included who were not entitled to relief. Worse still, some who are in need might be excluded.

Question - That the words proposedto be omitted (Mr. Stewart’s amendment) be omitted - put. The committee divided. (Chairman - Mr. Bell.)

AYES: 50

NOES: 13

Majority . . . . 37

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Progress reported.

In theH ouse

Message recommending appropriation reported.

In committee (Consideration of GovenorGeneral’s message) :

Motion (by Mr. Stewart) agreed to.

That it is expedient that an appropriation of revenue be made for the purpose of amendments to be moved by the Minister of State for Commerce to a bill for an act to provide for financial assistance to the States in the provision of relief to wheat-growers and for other purposes.

Resolution reported; report - by have - adopted.

page 5754

FRUIT GROWERS RELIEF BILL. 1833

Bill returned from the Senate with an amendment.

In committee (Consideration of Senate’s amendment) :

Clause 4 -

Any money granted to a State under this act shall be so granted upon condition that it is applied by the State for the benefit and assistance of fruit growers who satisfy an authority nominated in that behalf by the State that they have suffered losses in the export from Australia of apples or pears grown by them during the 1932-33 season.

Senate’s amendment - Before the word “fruit growers” insert the word “necessitous “.

Mr STEWART:
Minister for Commerce · Parramatta · UAP

– I move -

That the Senate’s amendment be agreedto.

The effect of this amendment is to provide that assistance shall be affordedonly to fruit-growers who are in necessitous circumstances.

Motion agreed to.

Resolution reported; report adopted.

page 5754

BILLS FROM THE SENATE

The following bills were returned from the Senate without amendments or requests : -

IncomeTaxBill1933.

Ashmore and Cartier Islands Acceptance Bill 1933.

War Pensions Appropriation Bill 1933.

Silver Agreement Bill 1933.

Patents Bill 1933.

High Court Procedure Bill 1933.

Invalid and Old-age Pensions Appropriation Bill 1933.

Judiciary Bill 1933.

Appropriation Bill 1933-34.

page 5754

SEAT OF GOVERNMENT . SUPREME COURT BILL 1933

Message received from the Senate intimating that it had agreed to the amendment made by the House of Representatives in this bill.

page 5754

COPYRIGHT BILL 1933

Bill brought up by Mr. Latham, and read a” first time.

page 5755

WHEAT GROWERS BELIEF BILL 1933

In committee: Consideration resumed from page 5754.

Clause 5 -

Any money granted to a State under the last preceding section shall be paid upon condition that it is, subject to this act, applied by the State for the benefit and assistance of wheat-growers by -

Providing benefit in reducing the cost of production of wheat (including the cost of transportand marketing) ; and

Assisting individual wheat-growers, according to their needs, but not, either directly or indirectly, upon the basis of the quantity of wheat produced by individual wheatgrowers.

Mr STEWART:
Minister for Commerce · Tarramatta · UAP

– I move -

That paragraph (a) be omitted.

The amendment is consequential tipon the amendment previously agreed to, and I trust that the committee will dispose of it without debate.

Amendment agreed to.

Clause further consequentiallyamended, and, as amended, agreed to.

Clause 6 -

A wheat-grower shall not be entitled to receive assistance under this act unless -

Having derived such income - he produces evidence to the satisfaction of a State authority that during the financial year ending on the thirtieth day of June, One thousand nine hundred and thirty-four, it is unlikely that he will derive taxable income, and that there are circumstances by reason of which it is just that he should receive such assistance.

Mr STEWART:
Minister for Commerce · Tarramatta · UAP

– I move -

That the words “ that during the financial year ending on the thirtieth day of June, One. thousand nine hundred and thirty-four, it is unlikely that he will derive taxable income, and “, be omitted.

The purpose of the amendment is perfectly obvious, and. scarcely warrants any statement by me.

Mr BEASLEY:
West Sydney

– The amendment made in this clause does not indicate precisely how the money for the relief of wheat-growers is to be applied, or the method by which each amount is to be determined. It is left to the State authorities to say whether it is “just”, that a particular wheat-grower should receive assistance. But what is the meaning of the word “just” when used in this connexion? The discrimination to which reference has previously been made might not be considered “ just “, or equitable, and if that point were sustained, in the absence of a definition of the word “ just “, the purpose of the Government could be defeated. Will those who need assistance be required to submit their circumstances to some investigation before they become entitled to relief under the bill? In its original form, the clause contained a definite direction to the State authorities who will handle this money, but the elimination of the words as proposad by the Minister will leave it to the State to determine what is “ just “. A very wide meaning attaches to the word, and I should like to know how the Government reconciles the basis of the distribution of this money with the amendment that is proposed.

Mr STEWART:
Minister for Commerce · Parramatta · UAP

– In reply to the honorable member for West Sydney (Mr. Beasley), I may say thatit is felt undesirable, if not impracticable, to closely define lines along which the States must travel. It is the function of the States to look after their necessitous constituents, and they possess both the machinery and knowledge, which are not possessed by the Commonwealth, to enable them to correctly apply to necessitous cases moneys granted for the relief of wheat-growers. It is felt that we can safely trust the States to interpret’ the desire of the Commonwealth in this matter. They will doubtless be guided by other provisions in the measure which lay down that the assistance granted must not be applied directly to the production of wheat. The whole intention of the clause is that with the knowledge which they have of their own wheatgrowers -

Mr Beasley:

– Irrespective of what other incomes they may have?

Mr STEWART:

– No. A man may have had a taxable income last year, but, owing to some catastrophic event, he may have no income this year. In the absence of the provision proposed, such an individual would be ineligible to receive relief. If he has an appreciable income, and has suffered no catastrophic disaster, he can hardly claim to participate in the fund.

Dr EARLE PAGE:
Cowper

– I would point out to the committee, and .to the honorable member for “West Sydney (Mr. Beasley), that the clause is quite impracticable because the money granted to the States will be disbursed almost immediately, or as soon as the various wheat-marketing arrangements will permit of that being done. Early in the year the farmer may anticipate that he will be possessed of a taxable income, but he may discover later that he will have no income, because his stock will be obliged to consume his reserves of oats or hay on account of drought conditions that otherwise he would have sold. It is quite impracticable to leave the settlement of this matter till June, 1934.

Mr GREGORY:
Swan

– I rise merely for the purpose of saying that I have been the recipient of a very great number of telegrams on this matter, and I had intended to move for the elimination of paragraph *a of this clause. However, I accept the division which has taken place as an indication ,that the committee would not be likely to agree with my proposal. Therefore, I propose to take no further action.

Mr. A. GREEN (Kalgoorlie) 10.56 a.m.]. - I, too, have received many wires from portions of Western Australia in reference to this matter. I have one from the secretary of the Wheatgrowers Union, at Carnamah, which reads -

Consider limitation of wheat bounty travesty of justice. Looking for strenuous opposition.

For the information of honorable members’ on this side of the chamber, I desire to add that the organization in question is a radical one with no political leanings. On the other hand, the Primary Producers Association, through Mr. Jones, chairman of the Greenough Zone Council of the Primary Producers

Association, has transmitted the following telegram from Waddi Forest, Western Australia: -

Wheat-growers northern wheat belt strongly resent proposed discriminating clause wheat bounty. Reaction will be disastrous. Will drive best farmers from wheat production. Strongly urge you fight against this unparallel legislative injustice.

That organization, I suppose, would support the. Country party. The other organization is a fairly democratic one. I have also received the following wire from- the secretary of’ the Primary Producers Association, at Geraldton: - .

Ask you protest against suggested discrimination wheat bounty. Consider all wheat-growers should participate.

Mr McBride:

– What politics does that association represent?

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

– -Presumably it represents the Country party. But, after all, the farmers of Western . Australia, irrespective of the political party they support, are in a pretty needy position. As mentioned previously, a deputation of representatives of the wheat-growers from all parts of the Commonwealth visited Canberra some time ago, for the purpose of stressing the urgent need for financial assistance being rendered to the wheat industry. They went away assured that that assistance would be rendered. The proposed amendment to this clause will exclude from participation in the relief granted to wheat-growers, many persons in Western Australia who are losing money at the present time. To say that farmers are wealthy is an absurd statement. The Minister was good enough to read to the committee the amounts that were paid to wheat-growers under the 1931 agreement. I- have been able to identify one of the farmers who received £4,000. I will bet anything to a gooseberry that he grew 220,000 bushels of wheat on 20,000 acres at Wubin, and I invite any honorable member to deny that every penny of the money granted to him was swallowed up by the banks in Western Australia.

Mr Stewart:

– If so, he is not excluded.

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

– Yet the Minister mentioned the amount that this farmer is supposed to have earned, to prove that some persons are battening upon this assistance. In 1931, when these large amounts allegedly were made by very prosperous men, the price of wheat at the railway siding was 2s. 7d. a bushel, to which must be added the Commonwealth’s assistance of 4rd. a bushel, making a total of 2s. Hid. In that year, interest was not reduced by the banks. I make bold to say - and if the Minister does not care to accept my statement he may make inquiries from persons whose authority cannot be disputed’ - that on 2s. Hid. a bushel, the loss was at least 4jd. a bushel.

I always feel exceedingly embarrassed when I find myself unable to vote in a division on the same side as my leader, whom I revere. During the taking of the last division, a derogatory remark was hurled at me by the honorable member for Ballarat (Mr. McGrath). It was, “ You must have been getting a good deal out of this.” I tell that honorable member that every year, whether I have re~ ceived assistance or not, I have lost . money, and have had barely sufficient on which to live, even with my parliamentary allowance. I would refer you, Mr.

Bell, because I admire and respect you, to my private bank, for verification of my statement that I am indebted to it, although I plant 1,000 acres every year. I lost £500 this year.

The CHAIRMAN (Mr Bell:
DARWIN, TASMANIA

– Tho Chair did not hear the remark to which the honorable member has taken exception, ‘ and does not consider that his personal affairs is a matter for discussion.

Mr McGrath:

– Tell us ‘how much you got.

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

– What did the honorable member get to twist on the party which stood to him £or years? The honorable member measures corn by his own bushel.

The CHAIRMAN:

– Order !

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

– The honorable member has not the respect of one man in this House.

The CHAIRMAN:

– Order ! I ask the honorable member not to discuss this matter. The incident evidently took place when the committee was in division, but did not come to the notice of the Chair, [f the honorable member wishes to raise a point of order, the Chair will deal with the matter; otherwise, I ask him to make no further reference to it.

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

– I apologize to you, Mr. Bell. I know that you are very fair, and regret any pain I may have caused you.

Mr McGrath:

– I rise to a point of order. Being a little deaf, I do not always hear everything that is said. I have just ‘been informed that the honorable member for Kalgoorlie (Mr. A. Green) asked what I got for twisting.

The CHAIRMAN:

– Order 1

Mr McGrath:

– I ask for the withdrawal of that remark and an apology.

The CHAIRMAN:

– The Chair is not at all clear as to what occurred. It would appear that the honorable member for Ballarat was involved, and that at the outset he was to blame. Did the honorable member for Kalgoorlie inquire of the honorable member for Ballarat as to what lie got for twisting on. his party?

Mr McGrath:

– I did not get £400.

The CHAIRMAN:

– Order ! The honorable member for Ballarat is now doing what he knows to be wrong and disorderly. The honorable member for Kalgoorlie may proceed with his speech on the question before the Chair.

Mr McGrath:

– I ask for the withdrawal of the remark of which I have complained.

The CHAIRMAN:

– Order ! I shall not ask for a withdrawal, because, while the (‘hair was endeavouring to inform itself of what had occurred, the honorable memher for Ballarat made a remark that was distinctly disorderly and provocative.

Mr McGrath:

– I withdraw that remark.

The CHAIRMAN:

– In the circumstances the Chair will not order the withdrawal of the remark of the honorable member for Kalgoorlie, who may proceed with his speech.

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

– I was endeavouring to show that the figures quoted by the Minister gave a wrong impression, and that in 1931 the wheat-grower particularized by the honorable gentleman lost at least 4Jd. a bushel and is at present subject to the control of the banks, as is almost every other wheat-grower. The more a man grows, the more he loses. In these circumstances I feel that, in a country which stands for the high protection of secondary industries, the wheat industry cannot rest until similar methods are applied to it to assist it during a needy period.

Mr HAWKER:
Wakefield

– The inquiry made by the honorable member for West Sydney (Mr. Beasley) is perfectly legitimate, coming from a man who is not intimately acquainted with farming, conditions. Various anomalies are bound to arise if one taxation year is taken as the basis for determining whether or not a wheat-farmer is eligible for assistance. Whether there is a profit in that particular year may depend upon which of the two alternative methods allowed by the taxation law is adopted by the primary producer in connexion with the valuation of his livestock on hand. In some cases a farmer might actually be retrogressing considerably, and yet show an income due to the valuation of his stock. There is another type of case which may occur, although it is not very likely. Section 57a of the Bankruptcy Act, as amended yesterday, provides for the protection of certain farmers who are being carried along under supervision by either a State bank or a State farm relief board. It is no”t likely that any farmers who are on the verge of insolvency, would show a profit last year; but it is conceivable that a few of them may have had very big crops, and by the sale of their wheat at the right time, or on account of some other accident of that sort, may have had a taxable income. Clearly, a man in such a condition is in highly necessitous circumstances, and should be entitled to receive assistance under this measure. I take it that it would be absolutely illegal for a a State to use the discretion which is necessarily contained in the hardship, clause, to cancel the effect of the principal part of the clause, which, in a general way, limits the benefits of it to non-taxpayers.

There is one particular anomaly which probably will arise, and to deal with it I propose to move for the addition of a proviso to the clause immediately the Minister’s amendment is disposed of. Under the bill as it stands, a farmer who may have had a taxable income of £1, £2, or £5 would be ineligible, except, possibly, under the discretionary hardship clause, to receive any assistance, whereas, if his accounts had been presented in a slightly different form and had shown a loss of a few pounds, he would be entitled to the . full measure of assistance irrespective of the exercise of any discretion by the State authorities. Some farmers who showed . a small loss might be entitled to a large suan. But it is not with that class of case that I am particularly concerned. Take the case of two farmers working under approximately the same conditions and obtaining the same results. One shows a small profit and, therefore, is not entitled to any assistance, while the other shows a small loss and is entitled to the full measure of assistance. To provide for cases of that sort, I suggest the inclusion of a proviso under which a wheatgrower would not be deprived of bounty to an amount greater than the sum of his taxable income: If, having no taxable income, he would be entitled to receive £80, with a taxable income of £20 he should be entitled to the difference between that taxable income and the £80. The proviso would limit the amount of payment, which would not be more than the amount of assistance which the farmer would receive if he showed a loss, and it would place men who are in approximately the same circumstances on the same footing. I have not framed this amendment in an attempt to undermine the verdict which the committee registered in the recent division. My suggestion is genuine, and I make it in the hope of correcting what otherwise would be an outstanding anomaly in this legislation.

Mr THORBY:
Calare

7 - I strongly support the suggestion of the honorable ‘ member for Wakefield (Mr. Hawker). It is perfectly sound, and strictly in accordance with the decisions already registered by this, committee. It aims at avoiding any anomaly that might arise in respect of a grower with a small taxable income, perhaps only a fraction of the amount that he would otherwise have been entitled to under this legislation. Under the clause a farmer with a taxable income of, say, £5, might be prevented from receiving any assistance, although, if he had no taxable income at all, he might possibly have been entitled to relief to an amount of £100. Under the suggestion of the honorable member for Wakefield he “would receive only sufficient relief to add to his taxable income in order to bring it to the amount to which he would otherwise have been entitled, had he no taxable income at all. I strongly support the suggestion of the honorable member for Wakefield, because, if accepted, it will be an indication to the respective State governments of the intention of this Parliament in regard to the exercise of the discretionary power which it is proposed to give them under this legislation. That is what prompted me to circulate an amendment eliminating all reference to the 1934 income tax return, leaving it to the, discretion of the State authorities to make payments to individuals who had actually paid income tax, and who could justify their claim before the State authorities.

Mr McGRATH:
Ballarat

– I have never before heard in this chamber such a degrading discussion as that which has taken place to-day. Some honorable members have even admitted that, as wheat-growers, they have applied for and obtained assistance. I do not forget the insulting remark of the honorable member for Kalgoorlie (Mr. A. Green), which was quite untrue.

The CHAIRMAN” (Mr Bell:
DARWIN, TASMANIA

– The honorable member must confine his remarks to the clause under discussion.

Mr McGRATH:

– That honorable member took pride in the fact that he had taken advantage of every grant that had been made, even when he was a Minister of the Crown with a salary of £1,600.

The CHAIRMAN:

– The honorable member’s remarks are distinctly out of order. He has made a personal reference to the honorable member for Kalgoorlie, and I ask him to confine his remarks to the amendment before the Chair.

Mr McGRATH:

– I repeat that the honorable member for Kalgoorlie received a bounty of £400 a year while, as a Minister, he was drawing a salary of £l,60u.

The CHAIRMAN:

– I shall not allow the honorable member for Ballarat to proceed unless he confines his remarks strictly to the question before the Chair. What may have been done by the honorable member for Kalgoorlie when a Minister in the last Government does not concern this committee.

Mr McGRATH:

– I have said all that I wish to say at this stage.

The CHAIRMAN:

– The honorable member must resume his seat.

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

– I wish to make a personal explanation. The statement made by the honorable member for Ballarat (Mr. McGrath) is not correct.

The CHAIRMAN:

– That is not a personal explanation. I am quite aware that the all-night sitting has frayed somewhat the nerves of honorable members, and I appeal to them not to allow their feelings to carry them away, but to assist the Chair to conduct the debate in an orderly manner.

Mr NOCK:
Riverina

.I support the amendment moved by the Minister for Commerce (Mr. Stewart) because it .will remove an impossible condition which would have applied had the clause in its. original form been passed. The Farm Relief Act of New South Wales contains a provision which makes it compulsory upon the farmer, who has a stay order issued for his protection, to pay to the Farm Relief Board every penny of income which he receives, and I should like to know whether this bill contains a provision which will allow the payment of this assistance to be made direct to the farmer as has been the practice during the past few years, or whether the Government of New South Wales will have the right to retain that payment in order to liquidate his debts with the board.

Mr BEASLEY:
West Sydney

– The Leader of the Country party (Dr. Earle Page) has stated that it would be difficult for the original clause to operate, but I remind him that it contained a provision whereby evidence had to be produced to the satisfaction of the State authorities which would indicate the expected income of the applicant at the end of 1934. That clause does provide for some method of testing the Government’s intention regarding the distribution of this money. The whole argument in respect of the distribution by State authorities is based on the fact that a tax is to be levied on flour and bread, and therefore its distribution should be made only among people who are in necessitous circumstances. The original clause, as I have stated, provides for the production of evidence that the applicant is in necessitous circumstances at the end of 1934. It is true as the Leader of the Country party has said, that it would be difficult to give all the records to the end of 1924, but the original clause does not provide for that.

Mr.Fenton. - The applicant has to produce evidence to the satisfaction of the State authority.

Mr BEASLEY:

– I agree with the honorable member for Riverina (Mr. Nock) that the Farm Relief Act of New South Wales is the worst legislation of its kind that has ever been placed upon the statute-book of that State.

Mr Nock:

– I did not say that.

Mr BEASLEY:

– Then I say it, because that act places a discretionary power in the hands of a body of men who all their lives have been associated with the handling of mortgages, and the forcing of farmers off their properties. Our party in New South Wales fsught strenuously against that legislation, and I should notlike the State authority to use its powers’ under this legislation in the way that it uses its power under the State Farm Relief Act. I ask the Minister to indicate to what extent the applicant is likely to be subject to the determination of the State authority, because Iam not at all satisfied that the existing State authority is acting sympathetically towards farmers in necessitous circumstances.

Mr PROWSE:
Forrest

– The Minister should answer the point raised by the honorable member for Riverina (Mr. Nock). I support the Minister’s amendment, and I hope that the amendment forecast by the honorable member for Wakefield (Mr. Hawker) will also be accepted.

Mr STEWART:
Minister for Commerce · Parramatta · UAP

– In answer to thehonorable member for Riverina (Mr. Nock), I may say that the money allotted to a particular wheatgrower will become part of his assets. If those assets are being controlled by a receiver, the money paid under this scheme will also pass under the control of the receiver.

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

– What the Minister for Commerce (Mr. Stewart) has said is an expression of the legal position, but much will depend on the spirit and method of the administration of the State acts. Most of them are designed to help the farmers, and while it is true that a man’s assets, no matter how they arise, come under the control of the receiver, in practice one of the conditions of the administration is that pains are taken to ensure that the farmer shall as far as possible be assured of sustenance. The Government takes the view that it may fairly, leave these matters to be determined by the Governments of the States, which are more in touch with individual cases than this Parliament can be.

Amendment agreed to.

Mr HAWKER:
Wakefield

– I move -

That the following proviso be added to the clause: -

Provided that a wheat-grower shall not, by reason of his having derived a taxable income during the year ended on the thirtieth day of June, One thousand nine hundred and thirty-three, be disentitled to receive assistance under this -act, to the extent of the sum by which the amount or value of any assistance which he would otherwise be eligible to receive exceeds such taxable income.

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

– The case for which the honorable member intends to provide is already covered by paragraph b of the clause. It would obviously be unfair if two men, whose incomes were within £2 of each other, should be so treated that the one with the lower income would receive assistance to the extent of, perhaps, £50, while the ether would receive nothing at all.

Mr Hawker:

– I am satisfied with the assurance of the Attorney-General, and have no doubt that the Government will see that the act is so administered.

Amendment - by leave - withdrawn.

Clause, as amended, agreed to.

Clause 7 consequentially amended, and, as amended, agreed to.

Clause8 agreed to.

Clause 9 -

The Minister may provide benefit and assistance to wheat-growers in any territory, being part of the Commonwealth, by -

reducing the cost of production of wheat (including the cost of transport and marketing ) ; and

assisting individual wheat-growers according to their needs, but not, either directly or indirectly, upon the basis of the quantity of wheat produced by individual wheatgrowers.

Amendment (by Mr. Stewart) proposed -

That the words “ benefit and “ be omitted.

Dr EARLE PAGE:
Cowper

– It seems to me that it is carrying finesse rather too far to insert this amendment in the clause providing for assistance to the wheat-growers in the Territory administered by the Commonwealth itself. These growers may receive benefit and assistance from the Commonwealth, and from no one else, and this restriction should not be imposed. The States can assist them in other ways.

Mr ABBOTT:
Gwydir

– I direct the attention of the Minister to the fact that the wheat-growers in the Federal Capital Territory have not yet received the full amount to which they were entitled under last year’s scheme for assistance. I have also been informed that the scale of payment is lower in the Federal Capital Territory than in the States. It was in the Territory that Mr. Farrar conducted his series of successful experiments in the production of wheat, and we should not overlook the wheat-growers, few though they be, who are carrying on the industry in this district. They are entitled to the same treatment, and the same benefits, as wheat-growers in the States.

Mr STEWART:
Minister for Commerce · Parramatta · UAP

– It is strange to hear the Leader of the Country party (Dr. Earle Page) asking us to treat the wheat-growers of the Federal Capital Territory differently from those in the States, while the honorable member for Gwydir (Mr. Abbott) says that we should treat them the same. The share of assistance to be received by growers in the Federal Capital Territory last year was calculated by the Com monwealth Statistician on a production basis, exactly as was done in the States. A dispute has arisen, however, as to the accuracy of the Statistician’s figures, and, as a result, payments have been held up.

Dr EARLE PAGE:
Cowper

– I ask that further consideration be given to this matter. State Governments may give further assistance to their wheat-growers if they wish, but the only authority which can give additional assistance to the wheatgrowers in the Federal Capital Territory is the Commonwealth Parliament itself. Therefore, this bill should provide the widest possible authority for assisting the growers in the Territory.

Amendment agreed to.

Clause further consequently amended, and, as amended, agreed to.

Clause 10 consequentially amended, and, as amended, agreed to.

Clauses 11 and 12 agreed to.

Motion (Mr. Stewart) agreed to - .

That the following new clause be inserted: - “ 10a. Where a. wheat-grower is the legal personal representative of a deceased person, or is a trustee, , the provisions of this act shall be applied as if the persons beneficially interested in the estate of the deceased person, or in the trust estate, were wheatgrowers to the extent to which those persons are beneficially interested in the proceeds of the wheat sown by the wheat-grower in the year One thousand nine hundred and thirty-three, and ‘ the Governor-General , may make regulations for giving effect to this section.

Title agreed to.

Rill reported with amendments; report adopted.

page 5761

FLOUR TAX ASSESSMENT BILL 1933

Second Reading

Debate resumed from the 1st December (vide page 5377), on motion by Mr. Casey -

That the bill be now read a second time.

Mr SCULLIN:
Yarra

.In consequence of the ruling from the Chair that this bill could be discussed in conjunction with the Wheat-growers Relief Bill, and of the fact that the subject has already been fully discussed, I do not propose to re-traverse ground; but honorable members of the Labour party are not content to adopt the negative attitude of merely denouncing the method adopted by the Government to assist the wheat-growers, and they take this opportunity to submit to the House an alternative proposal which will be incorporated in an amendment that I intend to move. I ask honorable members to cast their minds back to the occasion of the introduction of the original sales tax legislation into this Parliament. At thai time the Government of which I was the head was forced, by sheer necessity, to impose a sales tax to meet a condition of unprecedented financial emergency. But even under those extraordinary circumstances a long list of exemptions covering basic food requirements was specifically .provided. The list included such items as bread, butter, cream, cheese, flour, milk, rice, sugar and other commodities in common daily use in every household. I ask honorable gentlemen who were then sitting in opposition, but are now either members or supporters of the present Government, to consider what would have been their attitude at that, time had my Government proposed to include flour in the list of goods to be subject to sales tax? I can imagine the storm that would have occurred because there was much hostile criticism when an item like pastry was refused exemption. Pastry, after all, though not a luxury, is not a necessary of life. It should be remembered, also that at that time the rate of the tax as proposed was only 2-J per cent. Subsequently it was increased to 6 per cent, which is the maximum rate that has been imposed. Yet the Government is now introducing a proposal for a sales tax of 56 per cent, on flour. Certain honorable gentlemen opposite raised a storm because a tax of 6 per cent, was imposed on some luxury lines, but now they are supporting a Government which is seeking to impose a tax of 56 per cent, on an article which is absolutely essential in every household. The Government recently claimed a considerable amount of kudos for having introduced measures for a general reduction of the sales tax from 6 per cent, to 5 per cent.; yet now it is endeavouring to raise revenue for another purpose by imposing a sales tax on flour at the rate of 56 per cent. In no circumstance could this action be justified. The Opposition made it clear in the debate on the Wheat Growers’ Relief Bill, that it is not opposed to the granting of relief to farmers; but it is definitely and strongly opposed to this method of providing relief. It considers that the Government should reimpose certain taxation which, in conformity with the budget, has been lifted from the broad shoulders of certain people with large incomes who are well able to bear it. The taxation of wealthy land-owners, and particularly those who hold valuable lands in our city areas, in respect of which two-thirds of the land tax is paid, should be reimposed, and the Government should not shame this Parliament by suggesting a tax of this description. I, therefore, move-

That all the words after “ that “ be omitted with a view to insert the following words: - “’ the bill bo withdrawn and that legislation be introduced to provide assistance to wheatgrowers by the reimposition of taxation on large incomes and wealthy land-owners.”

Mr BEASLEY:
West Sydney

– As the Leader of the Opposition (Mr. Scullin) has intimated, the discussion on the Wheat Growers Relief Bill centred largely round the method proposed by the Government to raise the money necessary for the purposes of the bill. It is not, therefore, my intention to dwell at any great length upon the subject at this stage because our views have already been canvassed during the preceding debate. It is to be expected, however, that those who oppose the Government’s method of raising money for a purpose with which all are agreed should submit an alternative method. The necessity to do something to assist the wheat industry has been generally approved. When this subject was first discussed in this chamber during an adjournment motion which I moved, it was proposed that the necessary money for the purpose should be obtained through, the Commonwealth Bank. If that institution had been allowed to continue to function upon the lines intended by the Labour party when it was first established, there would have been no difficulty in providing money for this purpose. But, unfortunately, the whole basis of the activities of the Commonwealth Bank was altered in 1925 by a government holding similar views to. the government now in office. This alteration has, in our opinion, been the cause of very much of the misery and suffering of the people of Australia during the last two or three years. We all know thatmore than £800,000,000 was provided through the Commonwealth Bank for the purpose of prosecuting the war - a destructive purpose - and that no difficulty was encountered in that respect. At the conclusion of the war, the then Governor of the bank, speaking to a deputation which waited upon him to discuss an extension of the activities of the bank, said that if it was competent for the bank to do what it had accomplished during the war period, it was equally competent for it to do so again in peace time. But, unhappily, the changes that I have mentioned have taken place, and the bank is no longer able’ to function as it should, and as Labour and the late governor of. the bank, Sir Denison Miller, originally intended that it should do. It is now an appendage to the private banking institutions of this country, which have their associations here and overseas. The Commonwealth Bank is now using the credit resources of the ‘Commonwealth for the enrichment, not of the general public, but of individuals financially interested in banking. It is not possible for the Labour party to alter this state of affairs at the moment, although it has been made clear that when circumstances make such an alteration possible it will be made without delay. We wish the Commonwealth Bank to be restored to its original basis, so that it may fulfil the purposes for which it was established. I mention these facts at this stage so that those whom the Government is now proposing to assist by a means which is most objectionable to us, will know that if we had been in power such assistance would have been provided by a method which would not bring suffering upon the poorer sections of the people. We contend that the banking policy of this Government will lead the people to bankruptcy and disaster, instead of to the much vaunted prosperity of which we heard so much at the last election. , So far from removing hardship, the Government’s policy is continually adding to it. It is our intention at the first possible opportunity to remove the Commonwealth Bank from the control and influence of the private banking institutions, and to place it in a position to function in the best interests of the people of Australia, with the object of restoring real and lasting prosperity to the people of this country. But even though it is not practicable at the moment to give effect to our policy of assisting the wheat-growers through the Commonwealth Bank, there are other means by which such assistance can be given without imposing a bread tax on the people who are not at all able to bear it. In these circumstances, it will be seen that there is no justification whatever for the imposition by this Government of a sales tax on flour. I direct the attention of honorable members to the budget introduced only a few weeks ago by the Prime Minister, and invite a comparison between the extent of the remissions of taxes made to the wealthy people and the effect upon the poorer sections of the community of the imposition of a bread tax. Those who will be subjected to the full effects of the sales tax on flour will, I am sure, strongly resent the action of the Government when they recall that it has made huge tax remissions to persons who were not directly affected by the operations of the financial emergency legislation. When the budget was introduced it was expected that those who had been hard hit by that legislation would be the first to be relieved. Honorable members did not dream that those who had escaped its effect would not be asked to continue to bear the taxation which had applied to them in previous years. ‘ Instead of making a. remission of £1,100,000 of property tax, the Government should have used that amount to assist wheat-growers, to which it could have added the £1,500,000 which has been allocated as additional expenditure on defence. I can well imagine what members of the general community will think when they know that the Government is spending a further £1,500,000 for the purposes of training .people to destroy human life, and, on the other hand, is imposing a burden of £1,600,000 on a section which is already in desperate straits. It appears to me that the people have asked for bread and the Government has given them bullets. I recall some pf the words in the penultimate paragraph of the Prime Minister’s budget speech. , In effect, he said -

I think honorable members will agree that this is an encouraging picture.

Subsequent developments have proved that it must have been a very encouraging picture to those who have received the rewards, the majority of whom were not in what could be deemed necessitous circumstances. While their incomes may not have been as large ‘as in former years, they were certainly not in need, and could have continued to do their share in assisting Australia to regain that financial stability which the Government claimed was necessary. The Prime Minister continued -

We must strive to better the conditions of the people.

I cannot imagine that the imposition of a tax on flour will better the conditions of the people. On the contrary, I am certain that it will result in many who are in unfortunate circumstances having to ration their requirements of bread, which, being their staple diet, is used almost at every meal. All that my colleagues and I can do at present is to use whatever powers are at our disposal to protest, against this measure, and hope that the time is* not far distant when those who are so harshly affected by the callousness of the Government will be in’ a position to pass judgment upon it.

Mr FENTON:
Maribyrnong

– I intend to vote for the amendment, as there is no doubt that other sources than a tax on flour could have been exploited to provide the money that is necessary to assist wheat-growers. For instance, it has been stated in the press that the Commonwealth Bank was prepared to advance a loan of £2,500,000 for the purpose. I cannot agree with the honorable member for West Sydney (Mr. Beasley) in hia criticism of that splendid institution, for, from my own experience, both as a Minister and as a private member, and as the result of careful inquiry, I know that the Commonwealth Bank has been to the Australian nation what the Bank of England is to Great Britain. I cannot forget how it stood by the country recently, and was instrumental in ensuring that public servants, who otherwise would not have received their salaries, were paid, as also were the invalid and old-age pensioners. I do not think that it would be necessary to draw upon the Commonwealth Bank to the extent that it apparently is prepared to help, as at least half of the money that is needed could have been provided by re-imposing the land tax and from other sources. I cannot support a proposal to impose a sales tax on flour, particularly when burdens are being lifted from the wealthier sections of the community. I should have liked to see the Government exhibit greater moral courage by imposing a little additional taxation and refraining from this most drastic action which ‘will affect not only those on the lowest rungs of the ladder, but also those who,’ having invested their life’s savings in Commonwealth bonds, are desperately trying to’ eke out an existence. I shall register my protest -by voting for the amendment.

Mr PATERSON:
Gippsland

. The Leader of the Opposition (Mr. Scullin) referred to the proposed sales tax on flour as if it were on all fours with the sales tax imposed for ordinary revenue purposes, and he’ asked what would have been thought if a flour tax of the amount now proposed had been instituted when sales taxation was inaugurated in Australia. The right honorable gentleman has a keenly analytical mind, and I am sure he must realize that there is no real analogy between a sales tax imposed for ordinary revenue purposes and a flour tax imposed for the specific purpose of assisting those who provide the raw material for the flour. So long as flour remains as cheap as would have been the case if the Commonwealth and State Parliaments had provided machinery to enable a fair local price to be obtained for wheat, there can be no unfairness to the consumer. If there is a man in this Parliament who says that there should not be a reasonable Australian price for wheat, but that growers should simply carry on in the face of intense world competition and go out of production or otherwise, as circumstances dictate, he would be ‘quite consistent in opposing a flour tax. On the other hand, if he says that he would grant a reasonable local price for wheat, say, 4s. or 4s. 6d. a bushel, and yet opposes a sales tax on flour, he is merely splitting straws. It appears to me that to argue as some honorable members have done in regard to this measure is nothing more nor less than casuistry. I agree with honorable members who have said that the flour tax is not the best way to assist the wheat-grower. The proper way to assist him is for this Parliament and the State Parliaments to legislate to enable him to get a reasonable price for that portion of his product which is consumed in Australia. But the harvest is upon us. We have not time to do that now, and we must do something. I submit, therefore, that the most logical substitute for an artificially increased price of wheat is an artificially increased price of flour. So far as the consumer is concerned,, there is very little difference between the results which flow from these two things. What is Great Britain doing to-day? She is providing her farmers with 5s. 7$d. a bushel for their wheat. How is she doing this ? Not by using pool machinery to enable the imported wheat coming into the country at low prices to be pooled with the wheat of Great Britain, but by employing almost precisely the means that is proposed to be employed here. She has decided that 10s. per cwt. is a reasonable price for wheat, the British bushel representing about 64 lb. She endeavours to estimate the quantity of wheat importations and their probable average price, and proceeds to impose a sufficiently high sales tax on flour to enable her to pay to the producer the difference between the world’s price and 5s. 7£d. a bushel. That is the procedure in Great Britain, where there is no discrimination whatever. The price is paid to the whole of her farmers. It is only a choice of method that is involved here, nothing more. To the consumer there is no fundamental difference between an artificially raised price for wheat, to a payable level for the grower, and the result obtained by the substitute method now proposed, simply because ‘we have no time to devise any better method. The arguments against the proposal are based not on logic, but on considerations of political expediency.

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

.- The leader of the Opposition (Mr. Scullin) has moved that this bill be withdrawn and that the necessary money for the assistance of our wheat-growers be raised from the re-imposition of taxation. I rise to make only a few observations on the matter. Yesterday a similar contention was advanced by the honorable member for Henty (Sir Henry Gullett) who spoke about the Government transferring taxation from the shoulders of the rich to the shoulders of the poor. That is the principal argument which has been used against this measure. Substantially the principle upon which the Government has acted can be explained in a . few words. The Government believes that, in the real sense, taxation is not paid merely by the man who signs the cheque which is handed to the Taxation Department. It believes that nearly all taxation is spread ultimately throughout the community and that one of the best ways to provide employment for all classes is to reduce, as justly as possible, the burden of taxation. Everybody knows how taxation in various forms affects the wheat-grower. But in no way is he affected more severely than in the, matter of interest. Many figures are available on this subject. I have before me the report of the AuditorGeneral of South Australia for the year ended the 30th June, 1933, and also his report for tho previous year. Selecting a few instances at random from the latter report, I find that in the case of a number of farmers the interest charges per bushel were as follows: - West Coast, 43.5d., 19.8d., and 22.6d.; . Yorke’s Peninsula, 6.1d., 15.5d., 5.6d., 6.5d. and 31.1d. In the case of another group the figures were 26.3d., 2S.14d., and 46.14d. Of course the last-mentioned extravagant figures applied to places where there was a very low yield for the year. But it will be seen that the average charge for interest was well over ls. per bushel, indeed, it more nearly approximated 1.6s. per bushel. That interest charge is one of the things which is making it impossible for many farmers to grow wheat at a profit to-day. . The Government considers that there is a difference between a man who owns land but does not pay interest, and a man who is required to pay interest. It believes that there is no obligation on the community to pay a bounty to a wheatgrower to enable him to pay himself interest on his own money. That would be a generous thing to do, but would it be a proper thing to do with public money? Interest charges of this nature frequently amount to 30d. a bushel, whereas the crop receipts vary from 20d. to 30d. a bushel. Thus, it will be seen that the interest charge is murdering these men. How are we to deal with interest charges ?

Mr Beasley:

– Deal with them as this Government dealt with wages.

Mr LATHAM:

– Just as this Parliament does not deal with the wages of the community generally, ‘but only with the wages of Commonwealth employees, so it has no power to legislate directly, in respect of interest charges. Further, all experience shows that if we could so lexis- late over a period, we should defeat our own objective. Suppose that this Parliament had power to legislate on the subject and enacted that no money should be lent at an interest rate of more than 1 per cent. The actual effect of such legislation would be that the money would not be lent, or there would be a side agreement which would result in the payment of the commercial rate of interest. That question, of course, does not arise, here, because we have no power to legislate on the matter; nevertheless, we are able to affect the position very considerably by our legislation. The remissions of taxation that have been granted by the Government have been largely directed to this question of interest. That is a direction in which we can render a permanent service to wheat-growers who are in financial difficulties. We can render them a service which will last for some time and which will be preferable to the granting of an annual bounty.

Mr Scullin:

– Will the reduction of land tax have the effect of reducing interest?

Mr LATHAM:

– The reduction of land tax will reduce charges in many directions. In the case of a Melbourne boot factory, land tax represents so many pence in every pair of boots and shoes. These taxes are not paid out of nothing; they are paid out of the proceeds of the particular business concerned, and they necessarily enter into the prices’ of commodities. One man writes the cheque for payment and, it is easy for simple-minded persons to imagine that that is the end of the transaction, but, in the long run, the taxes are paid by the masses of the people. The budget presented by the Government, however, is based on the view, and is intended to educate people to adopt the view, that this taxation which. we impose is not paid merely by the man who writes the cheque for the taxation officer, but is paid by the community as a whole in one form or another. That is why the Government considers that it’ renders a greater service to all sections of the community by removing a tax representing £1,000,000 annually, than it . would render by collecting that amount in taxation, and distributing it over the community. That is the principle for which the Government stands. The honorable member for Henty objects to it. He thinks, as does the right honorable the Leader of the Opposition (Mr. Scullin), that it would be better to reimpose taxation for the purpose of giving assistance to the wheat-growers. The Government believes, on the contrary, that these remissions of taxation are aimed directly at interest charges. That is the reason why large sums have been remitted by way of reduction of the tax on companies, of the property tax and of the special tax on insurance companies. We ha.ve had this question o’f interest in view all along, and, on behalf of every member of the Government, I can say that if we believed that the benefit of these remissions would be limited to the man who paid the tax to the taxation office, we should not have pressed them.

Sir HENRY Gullett:

– Fifty per cent, of them represent benefits which are limited to the man who pays.

Mr LATHAM:

– That is a matter upon which I hold- quite a different opinion. Our budget is not intended to assist the few individuals who pay the tax, unless there is some injustice to be corrected.

Our aim is to afford relief to the community as a whole. The honorable member for Henty has referred to rubber and tea. In respect of rubber, there has been a reduction in the price of motor tyres and other articles, as the direct result of the remission of taxation. That remission, therefore, will be widely spread over the community. Motor tyres are no longer a luxury; they are articles of necessary use among all classes of the community. They are an industrial instrument - a farming, as well as a joyriding, instrument. In the case of tea, there have been complications. The Government has been informed, on fairly good authority, that the price of ‘tea would have been raised had the duty not been reduced. In that there is matter for argument, and all that I can say is that that argument is proceeding.

I think that the Government has given evidence of the sincerity and genuineness of its policy. Its interest in these remissions of taxation is not in the taxpayer - generally it is not the taxpayer at all - but in the community. The remissions are designed to increase opportunities for employment, to give more men work, and to relieve the burden of governmental and administrative charges, they are not designed to benefit any special section of the community. Owing to the fact that certain stocks are hold, a.’nd that there are market changes, it is impossible to adopt the stand that an equivalent reduction of price should take place immediately upon the reduction of a tax. Any one who has had business and commercial experience, knows that that is not a practical proposition. I ask honorable members at least to recognize the sincerity of the Government’s intentions. I do not say that, with respect to a particular tax, there may not be room for argument - there probably will be - as to how much it will be a special and how much a general benefit ; but, after a period, it is almost certain to be a general benefit ; because I am glad to say that, substantially, we still live in a competitive world. Failing the adoption of this principle, I am afraid that the alternative is the heaping up of taxation until- the condition of society is such that everybody is on the dole.

Fortunately, that has been avoided in Australia to a greater extent than, perhaps, in any other country. In Russia, there is a deliberate policy under which every citizen derives his sustenance and livelihood from the State. This Government wishes to reduce the number of citizens who are dependent on tho State. Its aim is to reduce taxation, so far as its limited powers will allow it to do so. These remissions have not been made to favour any particular section, but are widespread, and designed to serve the interests of the community as a whole, with a view to increasing the opportunities presented to our citizens to obtain work and support themselves.

Mr HOLLOWAY:
Melbourne Ports

– I support the amendment that has been moved by the Leader of the Opposition (Mr. Scullin). The very special pleading of the AttorneyGeneral (Mr. Latham.)-

Mr Beasley:

– Left us cold.

Mr HOLLOWAY:

– It amply proved to me that the right honorable gentleman and the Government are chained to this legislation. I do not believe that there is any section of this House that is not ashamed of this special tax, because of its harsh incidence. The honorable member for Gippsland (Mr. Paterson), and other honorable members have stated that the same results would accrue from the proposal favoured by the Opposition. But they have not attempted to prove their claim or to challenge the figures quoted yesterday by the Leader of the Opposition, which absolutely disprove their contention. I shall quote those figures again. In December, 1916, 1917, and 1918, there was a -wheat pool, and 4s. 9d. a bushel was guaranteed and paid to the farmers for their wheat, which meant that they received 4s. Id. net at the railway siding. During those three years, the price of bread was 4d. -a loaf. The price to-day, without a pool, is 4d. a loaf.

Mr Hughes:

– What was then the price of flour?

Mr HOLLOWAY:

– It was £10 15s. a ton. These arc facts, not opinions. Everything that happened during those three years absolutely disproves the contention of those who say that a similar policy, if now adopted, would place on the consumers of bread the same amount of taxation as will be placed on them by the proposal of the Government. There is no reason why it should do so now; it did not do so then.

But I rose to point out that the harsh incidence of this particular legislation must make everybody ashamed of it. The Attorney-General (Mr. Latham), because he had one of the worst briefs that he has ever held, went to very great pains to prove that a sales tax on bread is not harsh cruel, or unjust, and affirmed that the removal of taxation from other sections of the community would balance the harm done to the consumers of bread by this tax. Let me show what will actually happen. The poorer a person is, the larger is the percentage of his income spent on bread. I agree with everything that was said yesterday by the honorable member for Henty (Sir Henry Gullett). No honorable member has yet attempted to disprove his statements by the presentation of facts. It must be admitted that one-half of the 80 per cent.i of the people who are .workers are to-day receiving much below the basic wage. They are the people who will be hardest hit by this tax. Persons whose taxation was not affected by the Premiers plan, have been relieved of an amount sufficient to make up what is now being taken from those who consume bread. Let me deal with one group, in reply to the suggestion of the Attorney-General that the remissions of taxation have stimulated employment and will help to balance the harm that is now being done. Overseas ship-owners were relieved of taxation to the amount of £25,000.

Mr Latham:

– That was part of an arrangement in connexion with a reduction of overseas shipping freights.

Mr HOLLOWAY:

– Are the overseas ship-owners in the same position as those whose bread is to be taxed? One of the directors of a shipping company died quite recently, and left a private fortune of £40,000,000. While that class of taxpayer has been relieved of taxation, a harsh tax is being imposed upon the poorest of our people, thousands of whom spend 90 per cent, of their income on bread.

It is an historic fact that the adjustment of wages . lags a long way behind the /’0Rt of living. It is an absolute certainty that wages will not be adjusted for three or four months. There is no suggestion of; retrospectivity. The people who are suffering the’ most will never regain the whole of what they lose. The matter may not be properly adjusted in three months, because the index figures never catch up in the first quarter, and not to the fullest extent at any time. Duties have been removed from liquor, rubber and tea. Everybody knows why the price of tea has not been reduced, and why it is likely to be raised. A policy of restriction of production has been adopted. I follow these, matters closely. I have noticed in the cables that instructions have been given to teaplanters all over the world to allow a certain acreage to go to ruin, and to measure the output for the coming season so that, by producing as little as possible, the greatest results in the way of profits may be obtained. It is remarkable how buoyant tea shares became as the result of these negotiations. The market is artificially rigged, and there is no hope of the price of tea coming down. On the contrary, it will rise, whether additional duties are imposed or not. I shall support the amendment because of the extreme harshness and injustice associated with this taxation. On the one hand, the Government has lifted taxation from the wealthy section of the community, even from outside shipowners who are not associated with employment in this country, and on the other hand, rather than, readjust that situation, it is taxing the bread of the poorer section of the people so that the wheat-growers may receive assistance.

Mr HOLMAN:
Martin

.- I regret, as a supporter of the Government, I cannot agree with the theories advanced by the Attorney-General (Mr. Latham). We are considering a proposal to impose a tax upon the poorer section of the community for the purpose of removing a burden which had been placed upon other shoulders, and one has to examine the justification for that step upon which the Attorney-General relied in his short statement. The honorable gentleman went right back to what one might call the days of Gladstonian finance. At any rate he relied on maxims of finance which have been obsolete for 50 years, which have been ‘ abandoned by Great Britain, and which certainly have no bearing on the proposals before the House, because, they operated only in an era of Gladstonian individualism. On one occasion, when summing up the whole policy of his age, Gladstone remarked that the best use that could be made of money was to allow it to fructify in the pockets of the taxpayers. But he did not have in view a system under which one section of the community was to obtain a bonus at the expense of another. The very spirit which animated finance in those days - and which has since been condemned - would have opposed what the Government is proposing to-day. Although the merits of individualism and laisser-faire have long since been exploded there is actually nothing in the modern canons of finance to prevent the Government from saving any given private enterprise. The general policy of laisser-faire must stand or fall on its merits. It. is. proposed to give £3,000,000 to one section of the community, and obtain the money by placing a tax on the food of the people. No one can imagine such a scheme as being in line with the Gladstonian aphorism upon which the Attorney-General relied this morning. Some 30 years ago, when Sir William Harcourt, who had previously subscribed to the ideas of Gladstone, became Chancellor, he changed his views entirely, and in justification, uttered that famous statement, which will live long in history - “ Nowadays we , are all socialists “. Not one economist, not one responsible financier of Great Britain has believed or asserted for many years that there is any proof whatever that money is better spent by its owner than by the Government of the country or by a’ municipality. It is a recognized principle of both municipal and national government that money can be exacted from the taxpayers and spent by the government in certain public directions with advantage and that is the principleand the only one - upon which the transaction which we are now discussing is justified. Honorable members have decided that it is better to get £3,000,000 out of the pockets of the taxpayers rather than allow it to fructify there in accordance with the beliefs of half a century ago, and to spend it in a specific way as directed by the Government. On this occasion, the money is to be spent to aid the wheat-grower, so as to keep him on his farm until a permanent course of action is decided upon. We are doing that in defiance of the Gladstonian principle. The Attorney-General cannot ask us to guide our policy generally by an antiquated and misguided principle, while sinning against it as we are in supporting the Government’s proposal to obtain £3,000,000. The question for us to consider is how are we to obtain that sum of money. The proposed method of raising the money sins against all the modern canons of taxation. We agree that the purpose of raising this money is a good one, and that £3,000,000 should be raised, but the question is what is the best method of raising it? On that point, I submit that the maxims held out by the AttorneyGeneral are misleading, obsolete, and no longer carry any weight in the country of their birth. They are certainly maxims by which we cannot be guided at the present time. I do not say that I shall vote for the amendment, but I shall certainly vote against the raising of £3,000,000 by placing a tax upon bread.

Mr WATSON:
Fremantle

.- I intend to vote against the sales tax on flour for two reasons. The first reason is, as I have stated on and off the platform, that Australia can not be really prosperous until the cost of living, the cost of production and capital values are reduced to at least half of what they are to-day. I cannot support any proposal that is likely to increase the cost of living. My second reason is that I am not prepared to take money out of the pockets of the poor in order to put it into the pockets of the creditors of the wheatgrowers, which I am sure will be the destination of nearly all this money. The Minister, when supplying a list of recipients of the last bounty, quoted the case of one man who received. £4,000. I think I know that man, and, if that is so, I also know that if he had received three times that amount the whole of it would have been ‘taken by his creditors. I am not prepared to tax the people’s bread for that. I may be charged with being actuated by political considerations, because I represent a Labour constituency, but I am also a creditor, and it would be to my advantage for the Government to give every wheat-grower £1,000; it would put money into my pocket. But as I consider the principle underlying this tax to be wrong, I shall vote against it.I shall support the amendment because I would rather raise this money in any’other way, by borrowing or by taxing wealth, in preference to taxing the people’s bread.

Mr THORBY:
Calare

.- I wish to make it clear that I cannot support the amendment moved by the Leader of the Opposition (Mr. Scullin), . and that I am supporting the application of a sales tax on flour. I wish to direct the attention of the House to several statements that have been made, and to the actual application of the tax on flour as outlined by the Government. Quite a number of honorable members have unconsciously used figures which have no relation whatever to the proposal embodied in the bill. Some honorable members have contended that the application of a flour tax of £4 5s. a ton would increase the cost of living. We all know that the tax will increase the cost of living, but it will do so only to a negligible degree. Take the position of the States, with the exception of New South Wales, which at present has a flour tax of 30s. a ton. A new impost of £4 5s. a ton on all flour used, taking the average consumption of bread and the average family in Australia, means that the consumption will be a fraction less than seven 2-lb. loaves of bread per family per week. That figure is accurate. We need only divide the total consumption of flour in Australia by the total population. I have taken the figures of one of the largest bread distributing companies for three Sydney suburbs - Balmain, Drummoyne and Stanmore - and they work out exactly the same in each instance. They show that the average consumption of bread in an average family is one 2-lb. loaf of bread aday. Take seven loaves per week per family. A taxof £4 5s. a ton on flour would increase* the cost of a 2-lb. loaf by not more than2-1b. per loaf. The result is seven times ¾d. per week. But I make due allowance for large families which eat a little more bread than others, and increase the number to eight 2-lb. loaves per week, or 1.2 loaves over and above the accepted average for the Commonwealth. Eight loaves at¾d- a loaf represents 6d. per week ‘ per family throughout Australia other than New South Wales. But the sales tax on flour is to apply for only seven months, therefore in all the other States the increased cost per family, after allowing one and a quarter loaves more than the average, works out at 15s. for the whole duration of the tax to the family which eats more than its fair share of bread.

Mr Fenton:

– I know the position, because I pay the bills.

Mr THORBY:

– The honorable member says that he pays the bills, but I also pay the bills, and his consumption of bread would be little different from that of everybody else. If he takes the amount of bread consumed in army rations or in any institution, he will find that my figures are accurate. I have added 20 per cent. to 15 lb. of bread for the average family, and if there are eight in the family, that figure can be doubled because that represents really two families.

Sitting suspended from 1 to 1.30 p.m. [Quorum formed.]

Mr THORBY:

– Before the short adjournment for luncheon I had referred to the position in the other States, having purposely omitted New South Wales for the reason that, until a few days ago, that State had a flour sales tax of 30s. a ton. In the other States, a sales tax of £4 5s. a ton on flour would make a difference of 15s. per family for the seven months that the ‘tax is to operate in the case of those families which consume 20 per cent. more than the average quantity of bread. The position in New South Wales would be same if the whole amount of the tax were added to the present costs; but as the State tax of 30s. a ton has been taken off, the Federal sales tax on flour means an addition of only £2 15s. to the price of a ton of flour in that State. That is almost exactly½ ^d. per 2-lb. loaf. On the basis of eight such loaves per family per week - which is more than the average consumption of bread for a family - that would be 4d. a week, or 10s. per family for the term for which the tax is to operate. Honorable members on both sides of the House have criticized the sales tax on flour on the ground of its effect on the price of bread, and have contended that it would throw a heavy and unfair burden on the poorer persons in the community. I have shown that that will not be the case. It certainly will throw a small.burden on every individual in the Commonwealth, with the exception of those in the Northern Territory; and, although the tax will be paid in Tasmania, that State will receive remissions up to £7,500 a month. The Leader of the Opposition (Mr. Scullin) urged the withdrawal of the bill with a view to the introduction of new legislation to provide for a home-consumption price for wheat which, he said, would, not increase the price of bread.

Mr Fenton:

– His proposal was to obtain the money from revenue.

Mr THORBY:

– In order to give the growers of wheat £3,000,000, the right honorable gentleman, under his scheme, would have to raise the price of wheat consumed within Australia by approximately 2s. a bushel, and the effect on the price of bread would be practically the same as that of the proposed sales tax on flour. There would be a negligible difference in respect of the exemption of bran and pollard. The honorable member for West Sydney (Mr. Beasley) said that if the Government would guarantee 3s. a bushel for all the wheat grown in Australia, the growers would derive a greater financial benefit. His proposal would increase the liability of the people by over £7,000,000, or about two and one-half times the amount represented by a sales tax on flour. The proposal before the committee imposes the minimum burden on the whole of the people in order to raise the sum necessary to assist the primary producers who are in difficulties.

The fault I find with the proposed sales tax on flour is that it will operate only for seven months. The position would have been eased had the Government extended the period to twelve months, for in that event tho price of bread need not have been increased. The average price of wheat in

Sydney for the year 1921 was 8s. 8d. a bushel, or nearly four times the existing rate. The average price of bread in and about Sydney was 6. 2d. per 2-lb. loaf. Flour ‘then cost £19 lis. 7£d. a ton, operative bakers were paid £2 14s. 6d. and ‘the carters of the bread £4 12s. 3d. for each ton of bread. Those charges totalled £26 18s. 4d. for each ton of bread. At that time the master bakers sold their bread for £34 12s. 4d. a ton delivered, which returned them a gross profit of £7 13s. *Hid. a ton. In the following year, when the average price of wheat was 5s. 8d. a bushel, flour cost £12 lis. 9d. a ton, operative bakers received ls. less for each ton of bread, their wages that year being £2 13s. 6d. a ton, but the wages of the bakers’ carters were £4 18s. 6d. for each ton of bread - an increase of 6s. The gross price of bread was then £20 a ton, amounting to 4.7d. for each 2-lb. loaf, and the master bakers’ gross returns that year were £6 ls. Id. for each ton of bread. For three years, the returns to the master bakers remained practically stationary. Year by year, the price of wheat fell, until it reached 2s. a bushel. Even with the sales tax added, flour sold at £9 a ton. Operative bakers averaged £3 3s. Id. a ton of bread, and bakers’ carters £5 8s. 4d. for each ton. The total cost of flour -and wages thus amounted to £17 lis. 5d. for each ton of bread, or about 5d. for an ordinary 2-lb. loaf. The master bakers are receiving almost double the gross profits they made during the years 1922, 1923, and 1924. When the Leader of the Opposition (Mr .-Scullin) says that the price of wheat for homeconsumption could be fixed at 4s. 6d. or 4s. 8d. a bushel, and the price of bread remain what it is to-day, he does not take into account all the facts and conditions associated with the baking industry. The wages of operative bakers are higher to-day than ten or twelve years ago; their working day is shorter ; and baking is done by day instead of by night. These things, together with restrictions on bakers’ carters, have increased the cost of bread.

The honorable member for East Sydney (Mr. Ward) was right when he said that those bakers who sold bread at from Id. to 1½d. per 2-lb. loaf less than the price fixed by the Master Bakers Association of Sydney were refused supplies of flour by the millers, until they agreed to charge for their bread the prices fixed by the Master Bakers Association. At the time I was Minister of Agriculture in the Government of New South Wales. I was appointed by the New South Wales Government, together with another Minister, to go carefully into this matter, and I have here a copy of the official report which I submitted to the Government charging the master bakers and the mill-owners association with having worked in conjunction to prevent any baker from getting flour if he sold his bread below the price arranged by the association. I can produce the report, and supply the names, if necessary, though I do not desire to do so. One man was arrested and fined £5, and ordered to pay- £7 8s. costs, for following up bakers’ carters and others engaged in the distribution- of bread, and threatening them if they refused to accept the dictation of the Master Bakers Association. At that time, certain retailers were selling bread, at from 3^d. to 4d. a loaf when the price fixed by the association was 5-Jd. I threatened the mill-owners that if they attempted to continue those tactics, the Government would’ be forced to take drastic action. The result was that the price of bread almost immediately fell to 5d., and shortly afterwards to 4£d. a loaf.

I mention these things in order to prove the assertion, which has been freely made in the course of this debate, that there is a ring, or combine, or association - call it what you like - between the millowners and the master bakers in the metropolitan area of Sydney which privately fixes the price of bread, though in public it is denied that anything of the kind is done. This combine has been powerful enough to choke off any one who has tried to sell bread below the fixed price. I am prepared to supply the Government with any of the papers I am at liberty to release that bear upon this matter, because I desire to support what I have said.

We are convinced that it would be possible to give the farmers a higher homeconsumption price for their wheat without affecting the retail price of bread. While we recognize that it is necessary this year to put a tax on flour in order to assist the wheat-growers, we do not wish to see the same thing done again next year. Our desire is to lift the industry out of the mire, and place it upon a firm footing. I ask the Minister in charge of the bill to give us a definite assurance, that after this bill is passed, legislation will be introduced giving the growers the right to control the marketing of their own product as has been done in the case of the dried fruits industry and the dairying industry. We could then accept this bill as a temporary measure, introduced and put into operation for the purpose of collecting revenue from the people of Australia as a whole for the specific purpose of tiding the necessitous growers over the present season, knowing that a scheme is to be brought down later to deal permanently with the position.

No honorable member of this House likes having to support the imposition of an additional tax at this time, but many of those who oppose the scheme have misconstrued the situation. This was» particularly so- in the case of the honorable member for Henty (Sir Henry Gullett), who made a passionate appeal to the’ House to refrain from imposing on the poorer classes of the community this heavy burden of taxation. I deny that it is a heavy hurden.

Sir Henry Gullett:

– What about the tax of 60 per cent, which is to be imposed on the flour sold to householders?

Mr THORBY:

– I have included in my calculation every pound of flour sold in Victoria to householders, whether used for making cakes, scones, pastry, or biscuits, and even the flour that is used for making paste to stick paper on the wall. With the inclusion of this flour, the extra cost to the average family as a result of the tax would not be more than 15s. for the remaining seven months of the year. That will not ruin any family, particularly as, in many cases, the cost will be passed on.

Mr Holloway:

– What does the honorable member take as the family unit?

Mr THORBY:

– The calculation is based upon an average family of four. It .is futile to suggest that this tax will impose a tremendous burden on any one.

Sir Henry Gullett:

– Nobody suggested that.

Mr THORBY:

– The honorable member said that it was a vicious tax in that it placed a burden on the shoulders of the poorer people.

Sir HENRY GULLETT:
HENTY, VICTORIA · NAT; UAP from 1931

– And so it is.

Mr THORBY:

– Even if we allow for a family of eight, which would be the maximum, the tax would not represent more than 30s. for the remaining part of the year. The figures 1 have quoted are supported by the evidence of individual householders’ accounts. Only in very exceptional cases would the tax represent more than 30s. for any family. There isnojustification for raising such a hue and cry in opposition to a sales tax which is being reluctantly imposed upon the consumers to provide immediate relief for the wheat-farmers.

Mr Watkins:

– It will be put on again next year.

Mr THORBY:

– It will not be necessary to impose it again next year if the Government passes legislation to enable the wheat-farmers to organize their industry so as to ensure them a satisfactory home-consumption price.

Sir Henry Gullett:

– Would that cover wheat for export as well ?

Mr.THORBY. - No ; I said a satisfactory price for wheat consumed locally. Sir Henry Gullett. - But the homeconsumption price would have to be made sufficiently high to reimburse the farmer for growing wheat for export.

Mr THORBY:

– The plan I have suggested is the only logical way in which to help the growers. Every man growing wheat is producing under Australian conditions, and paying Australian prices for what he buys. The industries which supply him with his necessaries are bolstered up by tariffs, and the workers arc protected by Arbitration Court awards.

Mr Ward:

– The wheat-growers do not pay arbitration rates.

Mr.THORBY.- In the final analysis, wheat-growers and other primary producers bear practically the whole cost that is added to production as the result of Arbitration Court awards, whether they be for railway employees, shipping employees, or manufacturers of machinery, foodstuffs or clothing. Prac tically all taxation is passed on from one to another until it settles on the primary producers.

Mr.Scullin. - If that is so, why is there a graduated rate of income tax?

Mr THORBY:

– Because those who collect the most by way of income are able to pass on a greater amount than those who collect less. Every one knows that taxation represents one of the big items in the cost of production. Every business includes ‘ among its costs for such things as transport, maintenance, &c., the taxation which it has to pay, and this taxation is added to the cost of the article produced. It is passed on to one and another until the great bulk of it is borne by the primary producer whose product is sold on the markets of the world. I urge honorable members not to allow their better judgment to be overridden by party propaganda in some cases, and lack of knowledge of the industry in others.

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– I appeal to honorable members to help the Government to expedite the work of the House. Full opportunity has been given for the consideration of this measure. When the last bill was under consideration Mr. Speaker allowed honorable members to discuss the general principle of this bill. I am sure that the desire of honorable members is to dispose of the business as quickly as possible, and I hope that those who feel impelled to speak will limit their remarks.

Mr Scullin:

– The Opposition has been very brief.

Mr LYONS:

– That is so. Honorable members opposite have been considerate to the Government, and I appeal to honorable members on my own side to cooperate with the Opposition in speeding up the work.

Mr HUGHES:
North Sydney

.- I welcome the remarks of the honorable member for Calare (Mr. Thorby) ; they were very timely. I protest in the strongest possible way at these manifestations of concern for the proletariat that are being displayed in most unexpected quarters in this House; but they are sadly belated, and must come to many members as a very great surprise. This concern for the people, whose basic food for their wretched existence is to be attacked, comes well from those honorable gentlemen who represent the State of New South Wales. For two years or more, a tax on flour has been imposed in that State, and, so far as such a tax is iniquitous, the full brunt of its evil influence has been felt by the eople; yet not a murmur has beeneard in tho ranks of Tuscany throughout that period. For years, the people have been groaning under this impost; but now, when it is proposed to help the farmers, whom, we are assured, honorable gentlemen opposite are burning with a desire to assist, instead of helping them they profess to be so overcome by the prospective sufferings of the poor .breadeaters that they are unable to do anything for the farmers. They put forward suggestions for a pool, and a local price for wheat, as if this proposal would be free, from the defects which they see in this measure. I have pointed out that a flour tax has been in operation in New South Wales, and I defy these honorable gentlemen to point to one protest that they have ever made. They might have couched a lance on behalf of the down-trodden bread consumer, but they have bottled up their enthusiasm for this particular occasion.

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

– The right honorable gentleman must have had a promise from the Government.

Mr HUGHES:

– Ah, the Achilles heel! They have launched their attack under cover of a passionate declaration of championship of the poor farmer. The honorable member for Melbourne Ports (Mr. Holloway) made one of his characteristic speeches, like verbal Mother Winston’s soothing syrup. We can imagine his constituents regarding him as” a kind of lesser Allah, and hanging on his words. He is so concerned with the conditions of the poor, and denies to other honorable members an equal desire to help them. This honorable member, upon whose utterances I, like other lesser men hang, said that three or four years ago, when a pool was in operation, wheat brought 4s. 9d. a bushel, and the price of bread was 4-Jd. a loaf. He wishes to suggest that if the price of wheat were now raised to 4s. 9d. a bushel under a pooling arrangement, bread would still be sold at 4£d. a loaf. His statement either means that or nothing; but is that a fact?

Mr Holloway:

– Of course it is.

Mr HUGHES:

– Honorable members opposite divide their discourses into two, or, it may be, three parts. The first is directed towards the farmer, whom, they assure us, they are panting with a burning desire to help. Then they turn to the proletariat, and say, “Never shall the bread of the poor be taxed.” But, since they wish to catch votes in the country, they must not neglect the farmer, so they say, “Look at our speeches. Note, with breathless enthusiasm, that recklessness of obstacles that marked us in our advocacy of your cause.” Then they tell us that by a pool, or a local price for wheat, the farmer could be helped, and the bread consumer would go unscathed. That is rank absurdity, and, as honorable members must know, savours of hyprocisy. They know perfectly well that there is no way to help the farmer except by increasing the price of wheat, and they can do that only by taking it out of the pockets of the people. They also know - for attention has been drawn to it again and agains - that by some sort of combination or arrangement the cost of bread to the consumer in Australia is raised in excess of what is fair and reasonable, having regard to the price of wheat. The honorable member for Melbourne Ports knows perfectly well that conditions which make it possible for wheat to bc at 4s. 9d. a bushel, and bread at 4£d. a loaf no longer exist.

Mr Holloway:

– Tell us why.

Mr HUGHES:

– Because we now have no power to regulate the price of bread, although we did have it at the time to which he referred. The position that obtained at the time of the pool, and the present circumstances are fundamentally different. The world parity for wheat then was such as to give the farmer a profit over the cost of production, but that position no longer exists. During the war we had power to regulate prices, or, at any rate, our power was not limited, as it is now by the Constitution. In each State were Necessary Commodities Committees which fixed the price of every commodity; but now we have none. If a pool were in operation to-morrow, no machinery would be available to regulate the price of bread. Therefore, so long as this combine operates, the conditions to which the honorable gentleman takes exception will continue, which means that the great masses of the people will be called upon to pay an extra penny for a 2-lb. loaf as the result of the flour tax of £4 los. a ton. For this reason we ought to unite in a demand that the State authorities shall take such steps as will prevent the exploitation of the people. I invite my honorable friend opposite to join with other honorable members representing New South Wales in impressing on the Parliament of that State the necessity for action. It is no new proposal to help the primary producers by increasing the cost of living. For years the price of butter, under an arangement known as the Paterson scheme, has been 3d. or 4d. per lb. more than world parity; but I have never yet heard one voice raised on behalf of the down-trodden and longsuffering people. A similar arrangement exists in regard to dried fruits and milk, but nothing is done. Yet, in regard to bread, we have this pumped up and belated indignation, because this measure imposes a tax on flour as a means of assisting the farmer. I regard this measure as a temporary expedient. Personally, I wish that it had taken another shape, but as it is a definite proposal which will do what it sets out to do, I shall support it.

Dr MALONEY:
Melbourne

.- I am opposed to the imposition bf a sales tax on flour. I suppose I have given more votes to assist men on the land than any other honorable member of the House. I

Mr GABB:
Angas

.- By moving this amendment, the Leader of the Opposition (Mr. Scullin) has obliged me, in cricketing terms, to play on a wet wicket. I approve of his proposal, but do not intend to support it, because, if it were carried, early assistance could not be made available to the wheat-growers, and I want them to get such assistance as speedily as possible. If the amendment were adopted, I think the Government would not go on with the measure. It may be said that I should vote for thi: amendment and risk whether sufficient honorable members were” available to ensure the carrying of the bill, but I shall not take that course. Although I do not go back on any of my previous criticism of the Government in consequence of the remissions of taxation it has made, I feel that the need to give immediate assistance to the wheat-growers is so urgent that I cannot support the amendment.

Sir HENRY GULLETT:
Henty

– I shall vote against the second reading of this bill, but I do not intend to support the amendment. A vote against the bill will have exactly the same effect as a vote for the amendment. I do not intend to vote for the amendment, because I do not consider it to be my duty to advise the Government as to which taxation should be re-imposed in order to avoid the necessity for a bread tax. I shall vote against the bread tax, and leave it to the Government to determine how the amount of revenue it requires from this source may otherwise be obtained. The right honorable member for North Sydney (Mr. Hughes) was harsh in his criticism of honorable members who intend to vote against the bill, but I shall not take his attack very much to heart, because I have heard him argue with equal, if not far greater force against the other side. The Attorney-General (Mr. Latham) delivered a brilliant speech in support of the bill, and I found myself in complete agreement with a good deal that he said. No one believes in the sincerity of the Government, more than I do. I also believe that the reduction of taxation will ultimately have the effect that the right honorable gentleman claimed for it. But neither he nor any other honorable member who has spoken in support of this bill has touched the real point, which is that by this measure taxation to the amount of £1,600,000 will be lifted from the shoulders of those who have proved their capacity to pay it and placed on the shoulders of the poorest people in the land. It is impossible to get away from the fact that this tax, instead of being progressive in its incidence against big incomes will be progressive in its incidence against small incomes and poverty. Per that reason I shall vote against the bill.

Mr CASEY:
Assistant Treasurer · Corio · UAP

– The case of the Government in support of this bill has been stated repeatedly by the Prime Minister (Mr. Lyons), the Attorney-General (Mr. Latham), and various Government supporters. I do not propose, owing to the limited time at our disposal, to traverse the ground that they have already covered. There are two points, however, to which I shall refer. The honorable member for Melbourne Ports (Mr. Holloway) said that the adjustment of wages necessary in consequence of an increase in the cost of living is never retrospective, and that, therefore, the workers would suffer in consequence of the increased price of bread. I point out that the next alteration of the basic wage will be made in March, and this tax will cease in the following June. Another cost of living decision will be made in June, 1934, so that although there will be a lag of about three months in the rise in the cost of living figures owing to any increase in the price of bread, the workers will get the benefit of the increased basic wage to meet it for a period about equivalent to the period during which the flour tax will be in operation. Itwill be seen, therefore, that there should be no injustice in this regard. The honorable member for Calare (Mr. Thorby) asked for an assurance that the Government would introduce legislation to give those engaged in wheat-growing full control of the industry. .1 can only repeat the statement of the AttorneyGeneral that it is the intention of the Government to institute a full and complete inquiry into the “wheat, flour, and bread industries. After that inquiry has been made, the Government will doubtless determine its policy.

Question - That the words proposed to be omitted (Mr. Scullin’s amendment) stand part of the question - put. The House divided. (Mr. Speaker - Hon. G. H. Mackay.)

AYES: 48

NOES: 20

Majority . . ..28

AYES

NOES

Question so resolved in the affirmative.

Amendment negatived.

Original question put. The House divided. (Mr. Speaker - Hon. G. H. Mackay.)

AYES: 0

NOES: 0

AYES

NOES

Question so resolvedin the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 9 - by leave - considered together.

  1. – (1.) In this act, unless the contrary intention appears - “ Flour “ includes sharps, self-raising flour and meal made from wheat, but does not include bran or pollard; (2.) For the purposes of this act, flour in transit to any person on the first day of December, One thousand nine hundred and thirty-three and received by him after that date in pursuance of a sale or an agreement for sale of that flour to that person, shall be deemed to be flour held in stock by that person on that date.
  2. – (4.) Notwithstanding anything contained in this section, the Commissioner, the Second Commissioner or a Deputy Commissioner may communicate any matter, which comes to his knowledge in the performance of his official duties, to a Board of Review appointed under this act orto the Commissioner of Income Tax for any State, or the officer or authority administering any act of a State relating to stamp duties or succession duties (who is authorized by law to afford similar information to the Commissioner, the Second Commissioner or a Deputy Commissioner) or to the Comptroller-General of Customs :
Mr CASEY:
Assistant Treasurer · Corio · UAP

– I move -

That the definition of “flour”, sub-clause 1, clause 3, be omitted with a view to insert in lieu thereof the following definition: - “Flour” means any substance produced -

by the gristing, crushing, grinding or milling of wheat; or

by the sifting or screening of, or any mechanical operation applied to, substances so produced; or

by the combination of any of the operations specified in the last two preceding paragraphs, and includes -

any. mixture of any such substances ; and

self-raising flour.

That the word “ first “, sub-clause 2, clause 3, be omitted with a view to insert in lieu thereof the word “ fourth “.

That after the word “ Comimssioner “, last occurring, sub-clause 4, clause 9, the words, “ or with the approval of the Minister, to any other authority of a State”, be inserted; that after the word “ Customs “, the words “ or to the Secretary of the Department of Commerce “, be inserted.

Honorable members will see that the Government is seeking to amend clause 3 by making the definition of “ flour “ more extensive, it being considered that the short definition - now printed in the bill is inadequate. The main reason is that since the bill was printed, definite evidence has come to the knowledge of the Government that attempts will be made to evade the application of the clause on a large scale by taking advantage of the limited definition. In order to explain the proposed definition, I shall refer in general terms to the process of milling. As honorable members know, thefirst two. products to come from the milling of wheat are bran and pollard, after which, by passing through a succession of rollers and sieves of increasing fineness, a series of products is taken off which, in short, represent semolina in various forms. The first is the coarse grained semolina that is used for breakfast foods. As the semolina continues through the mill, and just before it finally becomes flour, it is practically indistinguishable from, and to a large extent can be used for the same purposes as flour, and yet legally can be called semolina.. The reason for re-defining flour is that evasions on a fairly large scale have already come to light. This is a comprehensive definition of what it is proposed should be taxed under the description of “ flour “. Honorable members will note that the proposed amendment to clause 14 is complementary to the definition and sets out those products that itis proposed should be exempted from the tax. All the other terms with the exception of “ ton “ which relates to a 2,000-lb. ton, are self explanatory.

Mr Fenton:

– Is wholemeal included?

Mr CASEY:

– That is one of the articles exempted with certain reservations.

Dr Earle Page:

– Have all. the amendments which the Government desire to make in the bill been circulated?

Mr CASEY:

– Yes. There is only one sheet of amendments, and I understand that that is now in tho hands of honorable members.

Amendments agreed to.

Clauses 1 to 9, as amended, agreed to.

Clauses 10 to 13 - by leave - considered together.

  1. Subject to and in accordance with the provisions of this act, the flour tax imposed by the Flour Tax Act (No.” 1) 1933, shall be levied and paid upon all flour manufactured in Australia by any person and -

    1. sold by him on or after the first day of December, One thousand nine hundred and thirty-three, and prior to the first day of July, One thousand nine hundred and thirty-four;
    2. sold by him before the first day of December, One thousand nine hundred and thirty-three, and delivered by him on or after that date and prior to the first day of July, One thousand nine hundred and thirty-four; or
    3. used by him on or after the first day of December, One thousand nine hundred and thirty-three, and prior to the first day of July, One thousand nine hundred and thirty-four, in the manufacture of goods for sale.
Mr CASEY:
Assistant Treasurer · Corio · UAP

– I move -

That the word “ first,” first occurring, paragraphs (a) to (c) inclusive be omitted with a view to insert in lieu thereof the word “ fourth “.

Clause 10 represents . the basic provision of the bill. Its primary object is to levy the tax upon all flour sold by flour-millers on and from the 4th December, 1933, to the 30th June, 1934. It will also levy the tax on flour sold before the 4th December, 1933, if delivered on or after that date. A further effect of the provision will be to levy a tax on flour used by the miller in the manufacture of food and other goods for sale, that is to say, when the miller is also a baker or a biscuit manufacturer or the like. Under clause 11 the tax will be levied only on flour in excess of half a short ton held by any person other than a flour-miller, on the 4th December, 1933. Clause 12 will levy a tax on all imported flour entered for home consumption after the commencement of the act. It will also levy a tax on the flour content of specified imported goods entered for home consumption after the commencement of the act. The specified goods include, inter alia, biscuits, cakes, macaroni, vermicelli, spaghetti and the like. Clause 13 merely designates the persons who are to be the taxpayers in the three classes.

Dr EARLE PAGE:
Cowper

.- I wish to move the omission of the words “first day of July” wherever occurring, and to insert in lieu thereof the words “first December, 1934.”

Mr.Casey. - I submit that the suggested amendment of the honorable member will not be in order inasmuch as it would involve an increase of taxation.

The CHAIRMAN (Mr Bell:

– It is not competent for the right honorable member for Cowper (Dr. Earle Page) to move such an amendment.

Amendment agreed to.

Clauses 10 and 11 consequentially amended.

Question - That clauses 10 to 13, as amended, be agreed to - put. The committee divided. (Chairman - Mr. Bell.)

AYES: 43

NOES: 22

Majority . . . . 21

AYES

NOES

Question so resolved in the affirmative.

Clauses, as amended, agreed to.

Clause 14 negatived.

Mr CASEY:
Assistant . Treasurer · Corio · UAP

– I move -

That the following new clause be inserted: -

– (1.) Notwithstanding anything contained in this Part, the flour tax imposed by the Flour Tax Act (No. 1) 1933, or the Flour Tax Act (No. 2) 1933, shall not be payable by any person in respect of - (a) bran and pollard held by or sold to a person in respect of which the person gives” security to the satisfaction of the Commissioner that the bran or pollard is unsuitable for use as human food;

self-raising flour manufactured and sold by any person if he has purchased the flour used in the manufacture of the self-raisingflourat a price which includes the tax paid or payable in respect of the flour so used; or

flour which is held by or sold toa person who manufactures cornflour and in respect of which the person gives security to the satisfaction of the Commissioner that - :

the flour will be so used in the manufacture of corn- flour : and

the cornflour in the manufacture of which the flour is so used is unsuitable for use for purposes to which the ordinary white flour of commerce may be put; or

semolina (in the granular form in which it is ordinarily used as a breakfast food) - .

which is sold, or held for sale, for use as a breakfast food, and with which sharps or the ordinary white flour of Commerce has not been mixed; or

which is sold or held in that form for use as an ingredient in the manufacture of macaroni, vermicelli, spaghetti or substances of similar composition; and in respect of which the person gives security to the satisfaction of the Commissioner that the semolina is sold, or held for sale, for either of those uses; or

meal made from wheat -

with which sharps or the ordinary white flour of commerce has not been mixed and which is sold or held for sale as a breakfast food or as a food for animals, poultry or birds; and

in respect of which the person gives security, to the satisfaction of the Commissioner, that the meal is sold, or held for sale, for thatuse; or

flour sold by him for export by the purchaser from him or exported by him for sale after export; or

flour sold or delivered by him to any person in the Northern Territory; or

flour held in stock by any person in the Northern Territory; or

flour which is held by or sold to any person for use in the manufacture of goods (other than foods for human or animal consumption) and in respect of which that person gives security to the satisfaction of the Commissioner that the flour will be so used. (2.) The Commissioner may require any person who claims exemption in pursuance of paragraph (a), (c), (d), (e) or (i) of the last preceding sub-section to give security to such amount as, he thinks fit and for such purposes as are specified in that sub-section, and any such security may be in relation to any particular date or period, or transactions or series of transactions.

Mr HOLLOWAY:
Melbourne Ports

– I move-

That the following new paragraph be inserted after paragraph (h) : - “(ha) flour sold to pastrycooks for the manufacture of pastry, scones,” buns, cakesand articles made from mixtures substantially similar to any of these articles; or “

It is impossible for small pastrycooks to pass on to scones and buns any tax of this kind.

Mr Nock:

– What does the honorable member suggest should be done where shopkeepers are bakers as well as small goodsmen ?

Mr HOLLOWAY:

– This paragraph applies only to the makers of pastry and scones. It is well known that pastrycooks are in a very bad way, because they are absolutely dependent upon poor people’s custom. If they have to carry this tax most of them will become insolvent. I ask the Minister to accept the amendment.

Sir HENRY GULLETT:
HENTY, VICTORIA · NAT; UAP from 1931

– I cordially support the amendment. As the honorable member for Melbourne Ports (Mr. Holloway) has stated, the imposition of the flour tax, which amounts to from 55 to 60 per cent., will necessitate the employment of a considerably augmented capital outlay, and that will press very heavily upon pastrycooks. Not being able to pass on the tax they will have to incur heavy expenditure in the purchase of smaller containers, which will be used for a mere matter of six or seven months. Pastrycooks’ lines were only recently exempted from the sales tax, as a matter of equity, by this Government. It would appear anomalous that they are now to be subjected to a very much heavier tax. I trust that the Government will give sympathetic consideration to the amendment.

Mr.SCULLIN (Yarra) [3.1]. - I support the amendment. I have very good reasons to remember this item, which was one that gave me very great concern when I first introduced the Sales Tax Act, and in subsequent years. I felt more inclined to exempt these articles than many others, not because they were more entitled to exemption, but because of the difficulty experienced by the trade in passing on the tax. The extraordinary financial difficulties of my Government, however, made it impossible to take that action. I know that a number of pastrycooks have not yet paid the sales tax, and are unable to do so. I urge the Minister and the Government to accept the amendment.

Mr NOCK:
Riverina

.- I oppose the amendment, which 1 regard 23. trifling, ridiculous, and impracticable. Every person who bakes bread and smallgoods buys his flour by the ton. It would be impossible to keep separate records of flour used for this particular purpose, and flour used in the making of bread. Those who favour the amendment ought to recognize that it is not workable.

In regard to the exemption of flour for making cornflour, the majority of persons know that, in the kitchen, cornflour and flour are frequently used for the same purpose. I should like the Minister to state whether it will be possible to ascertain what portion of cornflour is used for purposes for which flour cannot be used.

Mr DENNIS:
Batman

.- I support the amendment. I appreciate the fact that in many country towns it may be uncesssary for a baker to conduct a mixed business. In the metropolitan area, however, there are many persons who are pastrycooks exclusively. It ought to be possible for such persons to benefit in the manner proposed by the amendment. I hope that the Government is able to accept it, because pastrycooks have had a bad time for the last few years. As has been pointed out, they suffered severely from the operation of the sales tax, and many of them are still in arrears with their payments.

Mr HUGHES:
North Sydney

– I support the amendment. Many communications have been received by honorable members concerning the position in which pastrycooks are placed. I shall he glad to learn that the Government can devise means of exempting them from this tax, which they are unable to pas3 on. The prices of pastry are determined by convention, and cannot be varied.

I should like to know whether the Minister can <give a definite assurance that the tax will not be imposed on semolina,

Mr McGRATH:
Ballarat

– I support the proposal of the honorable member for Melbourne Ports (Mr. Holloway). In proof of the statement that pastrycooks are in financial trouble, I mention that at the last moment before I left Ballarat on. Monday, a pastrycook in a big way whose arrears of sales tax amounted to £16 gave me a cheque for £5, which he asked! me to offer to the department with the.request that it approve of the payment of the balance in two monthly instalments. These men are just getting on their feet.If they have to pay this tax, their difficulties will be considerably increased. They cannot raise the prices of what they produce, which to a certain extent are luxuries and not necessaries, because a large number of people would rather do without them than pay 8d. a dozen. I ask the Government to give sympathetic consideration to the amendment.

Mr FENTON:
MARIBYRNONG, VICTORIA · ALP; UAP from 1931

.- I also support the request of the honorable member for Melbourne Ports (Mr. Holloway).

Earlier in the day, the Minister intimated that he would deal with a question that I asked when the exemptions were being considered. I should like him to state whether exemption applies in the case of wholemeal or wheatmeal which is gristed in a small gristing mill in the home for household use and not for sale.

Mr CASEY:
Assistant Treasurer · Corio · UAP

– During the last few weeks, and particularly within the last four or five days, the Government has given’ a very great deal of consideration to what should be taxed and what should be exempt. Among the articles considered, was pastry in its various forms. It was the Government’s earnest desire that the flour tax should operate for the shortest possible period of time. From the revenue point of view, it was necessary that the exemptions should be as few as possible. The Government has been actuated by the determination not to grant exemptions that would place some goods in an unfair competitive position compared with others, and, so far as is humanly possible, I think that that object has been achieved. I consider that it would be anomalous to exempt pastry and to tax bread, pastry being relatively a luxury and bread an absolute necessity. There is a second point that affects the administration. Some pastrycooks engage solely in the business of making pastry and the like. In the majority of cases, however, the business of the pastrycook is part of a general bakery business, and it would be most difficult to administer the provision without requiring a bond from every baker who is a pastrycook, that flour would be used solely in connexion with the making of pastry and allied goods. The provision would also need a good deal of policing and would cause considerable irritation to the administration and to all concerned. The position could be met by reducing the size of the goods. All pastrycooks will be on the same basis, so that no competitive anomaly will be created. The Government regrets that it is unable to accept the amendment.

Cornflour is to be exempt so long as the Commissioner is satisfied that it does not take the place normally occupied by the ordinary white flour of commerce. For general purposes, cornflour cannot take the place of flour.

There are two grades of semolina - the relatively coarse grained or granular which normally is used as a breakfast food and for puddings, and the very fine, almost powdery kind, that is practically indistinguishable from flour. The powdery semolina which resembles flour will be taxable in all circumstances, in the same way as flour. Granular semolina will be exempt, so long as it is not mixed with flour or sharps, and also when it is used as a constituent of vermicelli, macaroni, and the like.

Meal made from wheat, so long as no flour or sharps is added to it, when used as a breakfast food, is to be free of tax. It will also be exempt when used as a food for poultry, animals, birds, and the like.

There is another exemption of some little consequence; that is, flour, when used for the manufacture of goods not for human or animal consumption. That particular exemption is given, in order to meet the case of those who manufacture starch from wheat flour, and also those who make a cold-water adhesive paste. There are certain other small manufactures and uses of a like nature.

Mr Holloway:

– As I understand the honorable member for Kennedy (Mr. Riordan) has a prior amendment to move, I ask leave to withdraw my amendment temporarily.

Leave granted.

Mr RIORDAN:
Kennedy

.- I move -

That after “Territory” paragraph (h) the following words be inserted: - “and north of Mareeba, north-west of Hughenden, central west beyond Emerald, through Barcaldine, Longreach, Winton, and Thargomindah in the south-west “.

The Northern Territory is now to be exempt from the sales tax on flour, and the area in my electorate which I ask should be similarly exempted extends north of Mareeba, north and northwest of Hughenden to the central west beyond Emerald, south to Barcaldine, Longreach, Winton, and to Thargomindah in the south-west. The greater portion of the Barkly Tableland is in my electorate, the smaller portion being in the Northern Territory. In some instances, the homesteads are situated in Queensland, and the major portion of the runs in the Northern Territory, and vice versa. Those settlers whose homes are in Queensland near the border are not exempted from the sales tax on flour, although their holdings are mainly in the Northern Territory. My electors contribute largely to Commonwealth revenue by way of taxation. They are isolated from the more populous parts of Australia, and there is just as good a chance of being speared by the blacks near the Gulf of Carpentaria as there is in the Northern Territory.

Mr Holman:

– Does the honorable member propose to exempt from the sales tax on flour, territory within the Queensland boundaries?

Mr RIORDAN:

-Yes. I am opposed to the principle of a flour tax, but since this legislation is likely to be passed, I am anxious to help the people in my electorate, who are doing their best to develop the far west and north-west of Queensland, by having extended to them the privilege of being exempt from the sales tax on flour. Freights, of course, are high, and that adds considerably to the cost of flour. My constituents suffer geographical disabilities, and this extra impost of £4 5s. a ton on all flour used in that country will impose a tremendous burden upon them. The freight on “lour to Mr Isa is £14 a ton. The effect of the sales tax on the price of bread is an increased price of id. per 2-lb. loaf for every 27s. of the tax of £4 5s. a ton. Therefore, honorable members can quite realize that freight amounting to £14 a ton adds considerably to the cost’ of bread at Mr Isa. I urge the Assistant Treasurer (Mr. Casey) to give favorable consideration to my amendment. He knows the country, because his father was one of the early pioneers of the district.

Mr CASEY:
Assistant Treassurer · Corio · UAP

– I am very appreciative of the solicitude which the honorable member for Kennedy (Mr. Riordan) has shown for the outlying parts of his electorate of which I have some little knowledge. The Government would be only too willing to assist the people in the outback districts, but, unfortunately, it is constitutionally impossible for it to discriminate as between States and parts of States in a matter of this kind. I refer the honorable member to section 51 (2) of the Constitution, which reads -

The Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth with respect to . . . (ii) taxation ; so as not to discriminate between States or parts of States.

That is a clear-cut and specific provision, and L much regret that the Government is unable to accept the amendment. The reason why we were able to exempt the Northern Territory from the flour tas is that it is not a State, but a territory of the Commonwealth.

Mr BEASLEY:
West Sydney

– Although, according to a strict interpretation of the Constitution, the amendment of the honorable member for Kennedy (Mr. Riordan) seems to be out of order, I remind honorable members that, in the case of Tasmania, a way was found to afford that State relief similar to that required in respect of Northern Queensland. In the case of Tasmania, the Government has made a special grant for the purpose of offsetting the flour tax because very little wheat is produced in that State. I have noticed that it is always possible to overcome difficulties, even constitutional difficulties, if there is a real will to do so. What is possible in the case of Tasmania ought to be possible in regard to those parts of Queensland referred to by the honorable ^member for Kennedy, and if a suitable amendment cannot be framed now, the Government should see that it is introduced in another place.

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– The exemption in regard to bran and pollard provides that it shall apply to those commodities which are in a form unsuitable for use as human food. Much of the bran and pollard purchased ‘n my electorate is used as poultry feed, and I understand that one of the important constituents of poultry feed is sharps, which, as a separate commodity, is taxable. The paragraph granting exemption in regard to wheat-meal is couched in the same terms. I should like the Minister to explain whether, in the circumstances, bran, pollard and meal used as poultry feed will obtain the benefit of the exemption. If the bill in its present form does not provide for this, perhaps the difficulty could be overcome by an amendment making it clear that the exemption applies to bran and pollard, with or without sharps.

Mr CASEY:
Assistant Treasurer · Corio · UAP

– The honorable member for Bendigo (Mr. E. F. Harrison) need have no anxiety. The pollard referred to in the proposed new clause 14 has no fixed and invariable chemical content. Ordinary pollard always contains a certain amount of flour or sharps, and the percentage of flour content varies in practice within fairly wide limits. A roughly gristed grain Will produce a pollard with a high flour or sharps content. It may be that the pollard used as fowl feed is the product of grain thus roughly gristed. In that event, the flour or sharps content is part of the pollard, and the whole combination will be free from taxation. If any additional admixture of flour or sharps were made, the addition would be taxable, but as only some small percentage would be Lidded in any case, the amount of the tax would be negligible. Paragraph e of proposed new clause 14 exempts from sales tax meal made from wheat with which sharps, or the ordinary white flour of commerce, has not been mixed. If flour or sharps is added, the mixture is held to be taxable, but that difficulty could be surmounted by selling the meal and the flour separately. It is the intention of the Government to give relief to the poultry-farmers.

The honorable member for West Sydney (Mr. Beasley) referred to one clause of a bill which has already been passed, in which it is provided that, during each month that the sales tax on flour is in operation, a grant of £’7,500, by way of financial assistance, shall be made to the State of Tasmania. That grant does not constitute constitutional discrimination in favour of Tasmania. The flour tax is collected from the millers of Tasmania, or on stocks held there, as is the case in other parts of the Commonwealth. The fact that financial assistance happens to be given to Tasmania at the same time as the tax is imposed, may be regarded as fortuitous.

The CHAIRMAN:

– While the Chair cannot be expected to interpret the powers of this Parliament under the Constitution, it must be apparent to honorable members that an amendment of the kind moved by the honorable member for Kennedy (Mr. Riordan) would clearly have the effect of discriminating between parts of a State. If he persists in his amendment, I must ask the Attorney-General (Mr. Latham) to express an opinion on the matter.

Mr RIORDAN:
Kennedy

.- I am not anxious to press tho amendment, but I felt that, concessions having been given to those residing on one side of the border, the people living on the Queensland side, were also entitled to them. I should like to hear the opinion of the Attorney-General (Mr. Latham) on whether it would be possible under the Constitution to exempt the areas to which I have referred.

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

– There are constitutional objections which, I think, are fatal tb any amendment on the lines proposed by the honorable member for Kennedy (Mr. Riordan). If that is so, it would be a mistake for this House to insert the amendment in the bill, and thus mislead the people concerned. The constitu tional objections depend on the fact that there are specific provisions in the Constitution dealing with laws affecting trade, commerce, and revenue. This is a revenue law. Section 99 of the Constitution is as follows: -

The Commonwealth shall not, by any law or regulation of trade, commerce or revenue, give preference to one State or airy part thereof over another State or any part thereof.

That section has been interpreted by the High Court to mean that there must not be discrimination or differentiation: in laws to which this section applies as between States or parts of States. The Constitution does, however, draw a distinction between States and territories. Under section 122 of the Constitution, the Commonwealth Parliament has plenary powers to legislate for a territory. Foi instance, in respect to the Federal Capital Territory or to the Northern Territory, this Parliament may make laws on any subject it thinks proper. The powers of the Commonwealth to legislate are limited as regards the people of the States by section 51 of the Constitution and other sections, but that limitation does not apply to territories. In fact, in regard to territories, this Parliament has greater power to legislate than have the State Parliaments in regard to their own people, because the State Parliaments are limited by the dominant power of this Parliament, while the Commonwealth Parliament is subject to no such limitation in the case of a Commonwealth territory. This Parliament is able, therefore, to differentiate in taxation between a territory and the rest of Australia, but not between States or parts of a State.

Reference was made to a provision in another bill relating to Tasmania. I point out that under section 96 of the Constitution, Parliament has power to grant financial assistance to a State on such terms and conditions as it thinks fit, and grants have been made to South Australia, Western Australia and Tasmania of varying amounts not proportionate to population, nor indeed upon any other definite principle that can be discovered. That was the reason for the establishment of the Commonwealth Grants Commission. The special consideration given to Tasmania in the other bill is in the nature of a grant and not of differentiation in taxation. This is a taxing measure and its provisions must have identical relation to each of the States. Even if tho honorable member’s amendment were agreed to it would be impossible to give effect to it. Its inclusion in the bill would, therefore, be misleading to the public. .

Mr SCULLIN:
Yarra

.- The honorable member for Kennedy (Mr. Riordan) has made out a strong case for exempting the part of the Commonwealth to which he has referred, but I am afraid that the Attorney-General’s statement of the constitutional position is indisputable. I suggest, however, that the Government give consideration to the making of a grant to that part of Queensland, as has been done to Tasmania.

Mr Latham:

– An amendment to that effect could only be made by this House.

Mr SCULLIN:

– At the same time, I must say, with all due deference to the Attorney-General’s opinion, that the provision in regard to Tasmania could, I think, be successfully challenged. We have not, so far, made a grant to any State that purported to defeat the constitutional provision against discrimination in taxation between States. It will be remembered that under the Harvester judgment it was decided that while Parliament could impose excise duties it could not impose such duties for the purpose of doing something beyond its constitutional power.

Mr Latham:

– I am unable to refrain from reminding the right honorable gentleman-that Western Australia regards the grants made to it as compensation for the disabilities under which the State is suffering through the tariff.

Sir Littleton Groom:

– The grant to Tasmania was not made in the taxing bill.

Mr SCULLIN:

– That is so, but if that bill was not a taxation bill, it was closely allied to a taxing bill, and reference was made to the effect that the gram should continue so long as the flour tax remained in operation. I Venture to say that the court would very likely hold a similar view in this matter to that which it held in the Harvester case in relation to excise duties.

The CHAIRMAN:

– In view of the very definite statement of the AttorneyGeneral (Mr. Latham), perhaps the honorable member for Kennedy (Mr. Riordan) may wish to withdraw his amendment.

Mr RIORDAN:
Kennedy

.- I have no desire to mislead the public, and in view of all the circumstances, I ask leave to withdraw my amendment.

Amendment - by leave - withdrawn. Sir LITTLETON GROOM (Darling Downs) [3.51]. - I again direct the attention of the Assistant Treasurer (Mr. Casey) to the telegram that I have received from the manager of the Queensland Wheat Board, which reads -

Board stresses that unless stock and poultry food wheat-meal’ exempt will spell ruination Queensland growers interests in this department as tax represents full market value of commodity. This meal only marketable at from ten shillings to one pound per ton below bran and pollard and board holds considerable carry-over from last season’s stock.

This is a very important matter, for much of the wheat converted into poultry food is not of sufficiently good quality for use in the manufacture of flour. I point out that paragraph e of the list of exemptions refers to “ meal made from wheat with which sharps or the ordinary white flour of commerce has not been mixed and which is sold or held for sale as a breakfast food or as a food for animals, poultry or birds. “ There is not the slightest doubt that this meal is not equivalent to flour and should not be taxed as flour.

Mr Latham:

– Is there any sharps in this food ?

Sir LITTLETON GROOM:

– I am not in a position to answer that question ; but it is quite clear that this article does not compete with flour.

Mr Latham:

– It seems unlikely that a relatively valuable product such as sharps would be used.

Sir LITTLETON GROOM:

– The point is very important. If this commodity is taxed it will be impossible to market it. I desire to have, the matter cleared up because we know from our experiences with the taxation commissioner in respect to sales taxation generally that he very properly considers himself definitely bound by the words of the act.

Mr Latham:

– If the honorable member will make the words of the telegram available to the Assistant Treasurer, inquiries will be made into the whole subject. It seems to me that if the definition given in the telegram is accurate there should be no trouble.

Sir LITTLETON GROOM:

– I shall do what the Attorney-General suggests.

Mr CASEY:
Assistant Treasurer · Corio · UAP

– It appears to me that the matter referred to by the honorable member for Darling Downs (Sir Littleton Groom) is identical with that raised by the honorable member for Bendigo (Mr. E. P. Harrison). The Government will have full inquiries made into the whole subject.

Amendment (by Mr. Holloway) proposed -

That the following new paragraph be inserted after paragraph (h) : - “(Zia) flour sold to pastrycooks for the manufacture of pastry, scones, buns, cakes and articles made from mixtures substantially similar to any of these articles; or “.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I emphasize the necessity for the Government to review its decision regarding the amendment of the honorable member for Melbourne Ports (Mr. Holloway). Some consideration has been given to this industry in regard to sales taxation, and its production has been allowed exemption. This action was taken because it was impossible for the industry to pass the sales tax on to the public, as its products were already fetching their maximum price on the market. If additional taxation of 4£ per cent., which will be the equivalent to the sales tax on flour of £4 5s., is now imposed, it will be impossible for the industry to maintain operations. Even when only half of its product was exempt from sales tax its operations could barely be maintained. If the whole of its product is now to be subjected to an additional tax of 4£ per cent, its position will be hopeless. The Assistant Treasurer (Mr. Casey) referred to this as a luxury line.

Mr Casey:

– I meant to say a relatively luxury line.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Well, if goods of this class are considered a luxury, why does the Assistant Treasurer allow an exemption to what may be considered as a foreign luxury? If exemption is to be granted to the semolina product, used in the manufacture of macaroni, vermicelli and spaghetti, commonly known as Italian bread, exemption should also be given to pastry and cake, which are mainly used .by the Australian working man. If concessions can bo given to the Italian section of the community they can surely be given to the Australian section of it. I urge the Government to give serious consideration to these representations.

Mr CASEY:
Assistant Treasurer · Corio · UAP

– I am afraid that the Italians did not enter into the thoughts of the Government in this connexion. This action was taken to avoid competitive anomalies. According to the advice received by the Government, the granular semolina content of macaroni is relatively small, it being made mostly from fine grain or powdered semolina, which is completely taxable. I believe that this gives a slight advantage to the cheaper, but not to tb dearer form of macaroni. Replying to the reference of the honorable member for Wentworth (Mr. E. J. Harrison) to the proposed amendment, I can only repeat that the Government has considered the matter in all its aspects.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Why not make it uniform?

Mr CASEY:

– I am afraid we could go on pursuing uniformity until there would be no revenue from the tax at all. The Government has provided a reasonable degree of exemption, bearing in mind the necessity of avoiding putting one item in a position of relative inferiority as regards competition with others. I regret that the Government cannot accept the amendment.

Question - That the words proposed to be inserted (Mr. Holloways amendment) be so inserted - put. The committee divided. (Chairman - Mr. Bell.)

AYES: 0

NOES: 0

Majority . ; . . 19

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Proposed new clause put and agreed to.

Clauses 15 to 34- by leave - considered together.

Clause 16 consequentially amended.

Clause 20- (2.) Where the amount of tax payable . . exceeds Five pounds, the amount of tax may be paid -

  1. by equal monthly instalments of Five pounds (except where the unpaid balance of the tax is less than Five pounds, in which case the instalment shall be the amount of that balance); or
  2. where twenty per centum of the amount of tax exceeds Five pounds - by equal monthly instalments of twenty per centum of the amount of tax.

Amendment (by Mr. Casey) agreed to-

That paragraphs (a) and (6) sub-clause 2, clause 20, be omitted with a view to insert in lieu thereof the following paragraphs: -

where twenty per centum of the amount of tax exceeds Five pounds - by equal monthly instalments of twenty per centum of the amount of tax ; and

in any other case - by equal monthly instalments of Five pounds (except where the unpaid balance of the tax is less than Five pounds, in which case the instalment shall be the amount of that balance).

Clause 24- (3.) Where tax has been paid by any person on flour used in the production by that person of goods and the goods so produced are exported by the taxpayer or sold by the taxpayer to a person for export by that person, the Commissioner may refund to that person the tax paid upon the quantity of flour which, in the opinion of the Commissioner, has been used in the production of those goods.

Amendments (by Mr. Casey) agreed to -

Thatthewords, “Where tax has been paid by any person on flour used in the production by that person of goods, and the goods so produced arc exported by the taxpayer or sold by the taxpayer toa person for export by that person, sub-clause 3, clause 24, be omitted with a view to insert in lieu thereof the words - “Where tax has been paid on flour used in the production by any person of goods, and the goods so produced are exported by that person or sold by him for export by the purchaser from him,”

Clause also consequentially amended.

Clauses 26 and 32 consequentially amended.

Clauses 15 to 34, as amended, agreed to.

Mr CASEY:
Assistant Treasurer · Corio · UAP

. - I move -

That the following new clause be inserted: - 13a. The Commissioner may recommend to the Governor-General that any substance produced wholly or partly fromwheat should, in order to prevent evasion of this act, be included within the operation of this act as if that substance were flour, and, upon receipt of such recommendation, the Governor-General may by proclamation declare that the substance shall, for the purposes of this act, be deemed to be flour, and, on and after a date specified in the proclamation, the substance shall, notwithstanding anything contained in this act, be deemed, for the purposes of this act, to be flour which is taxable under this act.

This clause is designed to clothe the Commissioner with powers, . when he has evidence of attempts at evasion with which he cannot deal under other clauses of the bill, to recommend to the Governor-General that any other substance being a product of wheat shall be taxable.

Proposed new clause agreed to.

Title agreed to.

Bill reported with amendments; report - by leave - adopted.

Bill - by leave - read a third time.

page 5788

BILLS FROM THE SENATE

The following bills were received from the Senate, and read a first time: -

Comonwealth Public Service Bill 1933.

Extradition Bill 1933.

Immigration Bill 1933.

Designs Bill 1933.

FLOUR TAX BILLS (Nos. 1 to 3), 1933.

In Committee of Ways and Means: Consideration resumed from the 1st December on motion by Mr. Casey (vide page 5378).

Amendment (by Mr. Casey) agreed to-

That the word “ first “ occurring before the words “ day of December be omitted with a view to insert in lieu thereofthe word “ fourth “.

Motion, as amended, agreed to.

Resolutions reported.

Standing Orders suspended, resolutions adopted.

Ordered -

That Mr. Casey and Mr. Latham do prepare and bring in bills to carry out the foregoing resolutions.

Bills brought up by Mr. Casey, and passed through all stages without amendment or debate.

page 5788

WHEAT GROWERS RELIEF BILL 1933

Bill read a third time.

page 5788

WHEAT ACQUISITION BILL 1933

Second Reading

Mr STEWART:
Minister for Commerce · Parramatta · UAP

– I move -

That the bill be now read a second time.

I have already explained to the House the terms of the international wheat agreement, and the steps proposed to ensure that Australia’s undertaking to regu late her exports will be given effect to - that is,of course, if such action is found necessary. I might briefly recall to honorable members, however, the circumstances leading up to the agreement. At conferences of wheat-exporting andimporting countries held in London, subsequently to the Economic Conference, long and very serious consideration was given to the difficulties the wheat industry was facing - heavy production and abnormal carry-overs in some countries, with resultant very low world prices. Eventually, the conclusion was reached that the heavy accumulations of stocks in North America, combined with the new crops in prospect, rendered some restrictive policy necessary, and after prolonged negotiation an agreement covering two seasons, limiting exporting countries to certain fixed quantities, was arrived at. To this agreement Australia eventually subscribed. The quantities allocated to the various countries are set out hereunder -

It will thus be noted that for the two years during which the agreement is to remain in force, Australia has been able to maintain the right to export a total of 255,000,000 bushels of wheat in terms of flour and grain, viz., 105,000,000 in 1933-34, and 150,000,000 in 1934-35. Until the extent of the 1933-34 harvest is definitely known, it will not be possible to gauge accurately the amount of surplus which it will be necessary to withhold temporarily from export. At present, the total coming harvest is variously estimated at from 157,000,000 to 165,000,000 bushels. If the maximum forecast of 165,000,000 bushels be realized, the portion to be held back from export until the 1st August, 1934, will be from 8,000,000 to 10,000,000 bushels. Whenthe actual temporarily unexportable surplus is determined, it is proposed to impose on each exporter as a condition of export the obligation to purchase from, or, if he cannot purchase, to hold on behalf of farmers for deferred export, such proportion of wheat received by him as may be necessary. The extent of this proportion will, of course, depend on the amount of the unexpor table surplus. It is possible that growers may not be able to sell all of their wheat under these conditions, and, if this circumstance does arise, the Government has undertaken to intervene at any time and purchase those quantities of the unexportable surplus of wheat from farmers which they have not been able to dispose of through the ordinary channels.

Any purchases which the Government may find it necessary to undertake will be made at world’s parity price at the time of purchase. Growers will thus be assured of an outlet for the whole of their 1933-34 crop if the present proposed legislation is given effect to. Any wheat which the Government may purchase will, of course, be available for export immediately after the 31st July, 1934. That means that the financial outlay will commence to be recouped at a relatively early period.

The Commonwealth Bank has been approached, and it has agreed to finance such transactions as the Government will be required to enter into under this proposed legislation. It is now not expected that the harvest will be so great as was anticipated some weeks ago, and, in consequence, the volume of wheat which the Government will bo required to deal with will probably be small. Whether the quantities be great or small, however, growers will be in the position of knowing that they will not be embarrassed to the slightest degree by reason of the operation of the international wheat agreement.

In introducing the bill, I think I might state that the Government still believes that the wheat agreement has benefited, and will benefit, the Australian wheat industry. The present price, of course, cannot be considered satisfactory. Hav ing regard to this year’s crops, however, and the export programme for 1933-34, it is anticipated that by the 1st August, 1934, the world’s surplus stocks will be reduced from 440,000,000 bushels to 201,000,000 bushels. The prospect of eliminating the surplus by the 1st August, 1935, depends upon the crop conditions in both North America and Europe. The acreage reductions which are to be made in NorthAmerica and the Argentine during 1934-35, however - a form of restriction that Australia was not subjected to - will be a material factor in reducing the quantity of new wheat available for export. It is considered to be a most reasonable assumption that had the agreement not been concluded, the price of wheat, though now too low, would have been lower still. With the assistance of the Government, rendered possible by the valuable co-operation of the Commonwealth Bank, the Australian wheatgrower is in the position of securing the benefits of the agreement without being embarrassed by its restrictive provisions.

Debate (on motion by Mr. Beasley) adjourned.

page 5789

INVALID AND OLD-AGE PENSIONS BILL 1933

Secondreading.

Debate resumed from page 5632 on motion by Mr. Latham -

That the bill be now read a second time.

Mr MAKIN:
Hindmarsh

.- This measure deals almost exclusively with section 52 of the principal act, which relates to the claim of the Commonwealth upon the property of pensioners. Many promises were made concerning the relief that would be given from these harsh provisions of the act, but actually, very little is being afforded. [Quorum formed.] Honorable members will remember that the House was advised that a committee of ministerial members, including the honorable member for Ballarat (Mr. McGrath), had devoted much time to the consideration of what amendments ought to be made. The result israther nebulous, and certainly will not justify those honorable’ members claiming in the future that they are the friends of pensioners. The provision which has been made “will prove a cruel disappointment to thousands of pensioners, who anticipated that the unjust property sections of the act would be completely removed from it. This measure does not fulfil the requirements of the situation, and certainly will afford little relief. Neither the Attorney-General (Mr. Latham) nor the ^Government has receded to any appreciable degree from the position that has been taken up from the outset in regard to the iniquitous property provisions. The proposed amendments are the product of the wily, subtle, legal mind. In essence, they merely rearrange section 52 of the act in such a way as to leave the matter where it formerly stood. There is evidence in every line of the cold, calculating mind of the Attorney-General. Honorable members of the Opposition are astounded that the Government should have shown itself so unresponsive to the appeals that have been made substantially to liberalize this law. The most objectionable feature of the act, the claim upon a deceased pensioner’s estate, is reimposed by clause 3. The only difference is that, instead of being regarded as a charge upon the estate of a pensioner, the pension will be regarded as a debt. The distinction is apparent only to the keen mind of the legal fraternity. There is to be a change of terms, but the sting is not’ to be removed. Humiliation and grave injustice will continue to characterize this legislation.

The speech delivered by the AttorneyGeneral definitely indicated the reason for the continuance of the penalizing provisions of the act. The purpose is twofold: First, to have repaid to the Treasury from the estate of a pensioner the amount paid out by way of pension; and secondly, to intimidate qualified persons from making application for a pension, and to induce others to surrender those that they have. This was revealed by the Attorney-General’s reiteration of the number of pensioners who have surrendered their pensions since the enactment of the property provisions. The number of pensions so far surrendered is 12,000, and it is estimated that a further 13,000 persons have been deterred from applying for the pension. The estimated annual saving is £650,000. The emphasis laid by the Attorney-General on that saving, and his statement that the removal of the property provisions would result in an increase of the pensions vote by that amount, clearly indicate that it is intended to try to intimidate people from making claims for this social benefit, which they are undeniably entitled to receive.

It may be well to place - on record the amount claimed and received on account of the Commonwealth’s charge on the estates of deceased pensioners. According to a reply that was given to the honorable member for Oxley (Mr. Baker), the claims made by the Government up to the “6th October last totalled £34,299. Of this amount, £1,708 was subsequently waived, and £9,802 was actually received. If, out of the total estimated saving of £650,000, the amount of the claims is only £34,299, it is clear that the largest part of the saving will be effected in connexion with surrendered pensions and the reduction of the number of applications. I wonder if the Government and its supporters have counted the cost in terms of the distress caused to aged folk, and the unnecessary suffering of those who have refrained from applying for the pension? There is nothing either dignified or commendable in the insistence by the Government that this social legislation shall be subverted by a process of legal short-circuiting. I hope that the action of the Government will not deter those who are entitled to receive a pension from making a claim for it. I counsel them not to allow this Government to make them afraid to apply for the pension. I am empowered to state most emphatically that, immediately the Australian Labour Party is again entrusted with the government of Australia, the ‘charge, or debt, on the property of pensioners will be entirely removed from the act.

The Attorney-General has indicated that this bill provides for a radical modification of the position affecting pensioners’ property ; but, when we examine the bill, we are rudely surprised and disappointed, because the principal radical modification tends to benefit the land and estate agents and property dealers, who are to be released from making certain searches required under the notorious act of last year. ‘The bill provides for the destruction of the white card, commonly known as the “ white horror “. This amendment is certainly welcome, but it will not remove the charge, or debt, against the pensioner. The Government has been roundly condemned for having required pensioners to sign their properties over to the department by means of a white card. It was not so much the act of signing the card, as its effect, that caused resentment; because it appeared as if there was a deliberate handing over of the pensioner’s property to meet the claims of the Government against it. Although the bill provides for the destruction of the white card, in the greater number of cases the claim upon the estate at death still remains. This alleged concession in reality gives no relief from the confiscatory provision relating to pensioners’ property which has been the source of so much agitation and protest. While the humiliation associated with the white card is removed the blot still remains upon the statute-book, and the Labour party will not be content until it is removed. The remarkable magnamimity of the Government goes even to the extent of allowing a pensioner to. sell, transfer or mortgage his property without securing the consent of the Commissioner, as was required formerly. That practically constitutes almost the full extent of what the Attorney-General calls a “ radical modification.” The pensioner is required under this legislation to notify the Deputy Commissioner within 30 days of any such sale, transfer, or mortgage in respect of his property, and accordingly the rate of his pension will be reduced, because his property, then represented in some “ monetary or equivalent asset “, is calculated in the ordinary way against his pension. This provision is purposely designed to encourage pensioners to realize on their properties, and having done so, the Government steps in and calculates the future rate of pension in accordance with the pensioner’s “changed circumstance.” At one time the pensioner was able to transfer or mortgage his property, and if he still continued to reside in it his pension rate would not be changed; but, under this provision, the transfer or mortgage of his property is likely to deprive him of his pension altogether.

Mr DEIN:
LANG, NEW SOUTH WALES · UAP

– That has always been the case.

Mr MAKIN:

– This bill goes further. ‘ I have already indicated that itencourages a pensioner to dispose of his property, so as to be relieved of the debt provisions under which a claim may be made upon the estate at death. Now the pensioner who transfers his- property and lives in it is to be subject to an exemption of £50, and for every £10 over and above that amount £1 is to be deducted from his. total annual pension.

Mr McGrath:

– That is quite right.

Mr MAKIN:

– I am glad that the honorable member has at last recognized the truth of my statements. This will apply although monetary consideration may not have been given. This is a new feature of the legislation that may inflict injustice on the pensioner. It departs from a principle of long standing that the homes of the pensioners shall not be taken into account in calculating the rate of pension to be paid. Section 52 of the act requires that, if an amount received by the pensioner exceeds £400 or £800 in the case of husband and wife, the pension must be cancelled, and, in addition, the pensioner has to repay to the department the amount of pension received after the 31st December, 1932. That provision is still to remain in the act. I have circulated an amendment, which provides that the Commissioner shall not review the rate of pension during such time as the pensioner remains in residence in any house which he has sold, transferred or mortgaged. If that amendment is carried, a pensioner may transfer his property to his son, daughter, or near relative, in which case the department may not reduce the pension.

The principal part of the bill is contained in sub-clause 5 of clause 3, which sets out the qualification upon which a relative of a pensioner may have the estate willed, and be free from any claim for debt. It will be noted that a relative, namely, a widow, widower, father, mother, son, daughter, brother or sister, must also be a pensioner, or must, in the opinion of the Commissioner, be in necessitous circumstances, or must be residing as a member of the family of the’ pensioner in the pensioner’s home, before being qualified to have the estate willed to him or her free from any charge or debt, against the pensioner. 1 have circulated an amendment deleting those qualifications which were inserted ostensibly to liberalize the act. Actually, they do no such thing, because the first two provisions are already observed in administering the act. It has been the practice that no claim shall be made when the property passes to a pensioner, or when hardship would be occasioned by enforcing the charge upon the estate. The third provision, that relating to members of the pensioner’s family residing at the home of the pensioner, is a very small concession, and even then it deprives a married son or daughter living elsewhere of the right to benefit under the parent’s will. A female over the age of 55 years, or a male over the age of 60, living in the home of a pensioner was previously entitled to the same benefit of inheritance, free from charges by the Government. The liberalizing provisions of the bill merely extend that benefit to persons below the ages I have mentioned. It will be seen, therefore, that, so far as this bill is concerned it is a matter of, “ Thank you for very little.” As for married sons and daughters, it is unusual for them to be living in the home of their parents, so that even under the amended legislation most of them will be disqualified from inheriting their parents property without first satisfying the debt due to the Commonwealth. In order to overcome that anomaly. I intend to move that this qualification be deleted, so that the pensioner may will to a relative, whether widow, widower, son, daughter, brother or sister, his estate free from’ any debt or charge in favour of the Commonwealth for the pension received.

Mr Ward:

– Why not include grandchildren ?

Mr MAKIN:

– I should be prepared to support their inclusion if it is practicable. I desire the entire abandonment of all government claims against estates of pensioners.

The other part of the bill which provides an example of the “ radical modification “ mentioned by the AttorneyGeneral is that which deals with contributions by relatives to the support of their aged parents. In answer to a question by the honorable member for Oxley (Mr. Baker), it was stated in this House that the total annual rate of contribution by relatives at the 6th October, 1933, was £1,646, of which £416 had been collected up to that date. That is an effective answer- to the slanderous imputation that, in many cases, the children of pensioners refused to assist their aged parents. The annual contribution under this provision represents only .01 per cent, of the total pensions bill of £10,700,000. This proves, if proof were necessary, that the relatives of pensioners are, almost without exception, unable to assist in their support. The poorer sections of the community have passed through a thousand valleys of despair, and their sufferings have followed them even into their old age as a result of the policy pursued by this Government. Although this provision in the act has been proved to be utterly ineffective, the Government is continuing its make-believe by retaining those sections which relate to contributions by relatives, and, as an act of mock generosity, promises to deduct from the Government’s claim on the estate of a pensioner an amount equivalent to twice the sum contributed. Just how much that will be worth may be gauged from the fact that only £1,646 can be collected in a whole year. The Government seems to be inspired with the spirit of Dickens’s famous character, Scrooge, in it3 dealings with the pensioners and their relatives.

The remaining clauses of the bill are mostly of a machinery character. This measure does not correct the grave mistake made by the Government last year, when it amended the Pensions Act. The determination of the Government still to make demands upon pensioners’ property .shows how unrelenting it is. The calculated ruthlessness which has characterized its administration of the Invalid and Old-age Pensions Act has been amply demonstrated. It is evident that last year the

Government deliberately set out to withdraw the benefits of this social legislation, and to surround it with a set of beggarly conditions which would intimidate the more sensitive pensioners, or would-be pensioners. The fact that 12,000 persons have surrendered their pensions, and that 13,000 more who are eligible for pensions have refused to apply for them, proves the truth of my charge that the Government is deaf to the call of humanity ; that is has persecuted the poor to such an extent that thousands of honest and deserving people prefer to suffer actual want rather than comply with the conditions which the Government has laid down. The Government has been guilty of a grave dereliction of duty, for which it will have to answer at the bar of pu’blic opinion. I trust that the House will insist on something more being done for the pensioners, and that it will force the Government to fulfil the promises it made, and to correct the abuses for which it has been responsible.

Mr McGRATH:
Ballarat

– I am sorry that I shall not be here when the vote on this measure is taken.

Mr Makin:

– “Why not? The honorable member’s place is in this House.

Mr McGRATH:

– I do not propose to submit to a lecture from the honorable member for Hindmarsh. I shall be looking after my own business, and that of my constituents. I did not think that there would be the faintest hostility to this bill, which goes a long way towards satisfying all the demands of the Opposition. The honorable member for Hindmarsh (Mr. Makin) said that the AttorneyGeneral (Mr. Latham) had endeavoured to intimidate people, and to prevent them from applying for pensions. As a matter of fact, if the pensioners read the speech which the honorable member has delivered, they will probably surrender their pensions, for they will still fear that their property will come into the possession of the Government. Tho honorable member must know, if he has read the bill, that as soon as these provisions become law, the white card, which has been the cause of so much trouble, will be destroyed. What clearer language could be used than that which appears in the bill?

Mr Makin:

– Does the honorable member suggest that the destruction of the card will remove the charge against the pensioner’s property?

Mr McGRATH:

– Yes, with very few exceptions. I must confess that I would rather the Government had proposed the repeal of all the property provisions that were incorporated in the act last year; but the law, as amended by this bill, will be equitable and just. Under the new provisions “ relative “ will mean widow, widower, father, mother, child, ex-nuptial child, and sister or brother of the pensioner if living in the home.

Mr Makin:

– That is not very different from the present provision.

Mr McGRATH:

– The property will become involved only if the pensioner wills it to a complete outsider. In the case of close relatives, properties will pass unhampered. I cannot believe that the honorable member for Hindmarsh thinks that close relatives of pensioners will, under provisions of this bill, be debarred from the possession, of their deceased relatives’ property. I have put the case with absolute truthfulness.

Mr Makin:

– The honorable member will probably wake up later on, and in twelve months’ time will be asking for another review of the law.

Mr McGRATH:

– I have made it clear that I would prefer the repeal of all the property provisions recently incorporated into the act, but even under these provisions blood relatives of deceased pensioners will not be debarred from the possession of property left to them.

Mr Paterson:

– If they are living in the home.

Mr McGRATH:

– All other classes will receive sympathetic consideration.

Mr Makin:

– The honorable member is not entitled to make- a statement like that on behalf of the Government.

Mr McGRATH:

– I have no desire to be insulted by a certain gentleman to whom I do not feel kindly disposed at the moment. The speech that we have just heard, which was drafted by the honorable member or by some one else for him, was, in certain respects, totally incorrect. I am surprised that there should be any hostility to this bill. I have done my best to get the Government’ to agree to the destruction of the white card, and I express my thanks to it for having acceded to the representations made to it in this connexion. I do not consider that there will be one case in a thousand in which property will not be allowed to go as a deceased pensioner has willed it.

The alterations made in the pensions law a couple of months ago and those now proposed will make the act better than ever it was in the days when the Labour party was in office. Under the new provisions a pensioner will be allowed to “ receive “ 12s. 6d. a week from other sources, and still be entitled to a pension of 17s. 6d. a week. Under the old arrangement he had to “ earn “ the 12s. 6d. a week. Now he may receive the money in interest or in other ways apart from earning it. Thus, to my mind, the substitution of the word “ earn “ for “ receive “ is a considerable liberalization of the law. The honorable member for Hindmarsh has complained bitterly that even if pensioners sell or mortgage their property they must notify the Commissioner of Pensions to that effect; but such a provision has always been in the act. It was there two or three years ago when the Pensions Department was being administered by the present Leader of the Opposition (Mr. Scullin), and for twenty years before that time. As the law has always given the Commissioner power to re-assess the pension of a pensioner who sells a property for £800 or more, there was no need for the honorable member for Hindmarsh to rave and rant about it this afternoon as he did. There is nothing wrong with that provision, and the honorable member had no need or justification for accusing the Government of having committed a serious crime by retaining it in the act. I am afraid that the pensioners who read the honorable member’s speech will spend many sleepless nights over it. The honorable gentleman is afraid that the passage of this bill will have the result of killing the pensioners’ leagues, for no work will be left for them to do.

Mr Beasley:

– The leagues will continue to function until the pension has been restored to £1 a week.

Mr McGRATH:
BALLAARAT, VICTORIA · ALP; UAP from 1931

– That is another question. I hope that the pension will be restored to £1 a week, but that cannot be done under existing financial conditions. I am sorry that the bill does not provide for the complete repeal of the property provisions of the act which have caused so much trouble; but I hope that, at a later date, this will be possible. After the passage of this bill the law will be as perfect as it is practicable to make it under present-day conditions. For the last twelve months or so it has been impossible for me to advertise a meeting of my constituents without involving myself in interviews with 100 or more pensioners on each occasion. I am glad that I shall be able to assure the pensioners that there will be no hardships under this measure.

Mr Makin:

– It was stated that the purpose of this bill was to remove anomalies and hardships.

Mr McGRATH:

– In my opinion it does remove them. Under the new provisions there will be no objection to a pensioner’s property passing to any one except outsiders, who are not justly entitled to it.

Mr Martens:

– “What will be done in respect of the debt that has been incurred since the 12th October, 1932?

Mr McGRATH:

– I do not consider that there will be any debt.

Mr Makin:

– Then the honorable gentleman does not know what he is talking about.

Mr McGRATH:

– There will be a debt only when property passes to strangers, and in such cases I think the Government is entitled to a refund of pension. I believe that the pensions law, as amended, will be nearly perfect, and that there is no reason why honorable members of any party should be anxious about its effects. Honorable members generally have too much commonsense to be misled by the incorrect statements of the so-called lawyer from Hindmarsh.

It is true that there are certain provisions of the present law which need reconsideration, particularly in respect of invalidity. In certain circumstances it is difficult, to-day, to get doctors to certify that applicants for invalid pensions are permanently incapacitated. Even a person who has lost two legs does not necessarily come within the scope of the act.

I have had brought under my notice only recently the case of an old lady of nearly SO years who has owned a property in a certain street in Ballarat for a very long while. Some time ago she was persuaded by a land agent to buy another property. She has signed three false declarations on the subject. On one occasion she said that she had sold the first property before buying the second. As a matter of fact, she had not done so. While still the owner of the first property she had partly bought the second; and, being compelled by the amended act to make a disclosure to this effect, the department took action against her for having made a false declaration. I took the matter up with the Attorney-General (Mr. Latham) and pleaded with him not to proceed against the old lady, who is 80 years of age, partly deaf, and can scarcely understand what is said to her. The department persisted, issued a summons, and she was fined £15. Somehow she found the money to pay * the fine and expenses. I wrote to the department asking that her case should be re-opened, and have received a reply that, under the provisions of the act, she must suffer until next March, before which time, most likely, she will be dead. I ask the Assistant Treasurer (Mr. Casey) to take direct action and see that a pension is granted to her. This is only one of the many anomalies that exist and are due not to any provisions that the Government has introduced, but to those framed in previous years in all good faith.

I know the widow of an ex-soldier in Ballarat who was receiving a war pension of £2 2s. per week, and who applied for an old-age pension, swearing that she was’ not in receipt of any income. A pension was paid, but, later, the department discovered that she was in receipt of a war pension. She was fined and her pension was discontinued. I am not asking the Assistant Treasurer to interfere in cases of that sort, but I think it essential that kindly consideration should be given to such matters, and that the Minister should accept tho assurance of an honorable member who has investigated a claim, and is prepared to certify to the condition of the old folk affected. I have much fault to find with the so-called sympathetic administration by officers of the department, but have a good deal of faith in the sympathy of the Assistant Treasurer.

Mr Rosevear:

– Only a fortnight ago, the honorable member said that both the Minister and the Government were callous.

Mr McGRATH:
BALLAARAT, VICTORIA · ALP; UAP from 1931

– Since then there has been a change of Ministers and the present Assistant Treasurer is, at least, sympathetic, and will see that these people will receive a fair deal. I urge the honorable member for Hindmarsh not to go about addressing league meetings with silly, childish statements which are unworthy of him, but to live up to a higher standard, and realize that the Government is trying to do the fair thing. The Scullin Government was the first to reduce pensions, to the extent of 2s. 6d. per week. At the time the honorable member for Hindmarsh expressed his extreme hostility to the action, but he was careful not to resign the speakership and forego the handsome emoluments attached to that office.

Mr Rosevear:

– The honorable member was Chairman of Committees at the time.

Mr McGRATH:

– Yes, and I acquiesced in what was done, accepting the word of the then Prime Minister (Mr. Scullin) that tho Financial Emergency Bill was necessary; otherwise pensioners would receive only 12s. per week. To show that the . honorable member for Hindmarsh is not accurate “ in his statements, I point out to honorable members that, immediately this bill becomes law, a pensioner will be able to mortgage, sell, or otherwise dispose of his property without consulting the Commissioner. Already I have told four people in my electorate that that is so, and I stake my reputation on accuracy of my information. The white cards are to be destroyed promptly after the bill becomes law, and a pensioner may then do what he wishes with his property.

Mr ROSEVEAR:
Dalley

.- The honorable member for Ballarat (Mr. McGrath) has assured the House that he has always been a friend of pensioners, and that he desires to be a friend of honorable members on this side; and to demonstrate his friendly feelings. he has warned them not to take any notice of what the honorable member for Hindmarsh (Mr. Makin) says about the harsh operation of the act and the real effect of these proposed amendments. Despite the ‘Government’s claim that the amending bill will meet all the requirements of pensioners by removing the amomalies associated with the property clauses, its real intentions were disclosed by the Attorney-General (Mr. Latham) yesterday when he said that by reason of the fact that all of these iniquitous provisions have not been removed from the act, he expects that 25,000 persons who are entitled to pensions will not lodge applications for them.

Mr Casey:

– The honorable member is doing the Attorney-General an injustice.

Mr ROSEVEAR:

– In the first place, 12,349 have already abandoned their pensions, and the Attorney-General said that a further 13,000 who are eligible to receive pensions have not made applications. He said that the financial aspect must receive every consideration when dealing with this legislation, and implied that the property restrictions will preventthose persons from applying to be placed on the pensions list. It is claimed that when the Pensions Act was amended in October, 1932, by the insertion of the property clauses, thousands of imposters were drawing pensions. As a matter of fact, an inspired article which appeared in the Sydney Sun, accompanied by a nice photograph of the Minister for Repatriation (Mr. Marr) stated that some 12,000 or 13,000 pensioners had abandoned their pensions because they were not game to stand up to the investigations of the department as to their bona fides. This, of course, is not true. The honorable member for Ballarat has admitted to-day that it was the iniquitous white card and not the change made in the law which drove them off the pension list. Actually, 12,000 persons abandoned their pensions because they were not prepared to give to the Government an ever-increasing mortgage over their homes. At one time a pension was considered as a right; now it is purely a charity to those who do not possess property, while it imposes on those who, as a result of thrift and self-sacrifice, are fortunate enough to possess a home, an ever-increasing mortgage until their demise. As a result of those 12,000 persons abandoning their pensions, the Government effected a saving of £500,000 per annum, and the harassing conditions which apply to the relatives of pensioners still exist. The Government claimed in October, 1932, that in an exaggerated proportion of cases, well-to-do relatives were allowing their parents to draw pensions, consequently the act was amended to compel those relatives to subscribe towards the upkeep of their parents. It will interest honorable members to learn that only £416 has been collected as a result of that amendment, On the other hand, the despatching to pensioners and their relatives of practically 1,000,000 forms in an endeavour to learn their most intimate history and whether children could afford to contribute towards the pensions of their parents must have cost the department a tremendous amount of money. As a result of this prying into the affairs of relatives ah amount of £416 has been recovered.

I come now to the claims made against the pensioner’s property. “Under this heading, £34,289 has been claimed, but claims to the value of £1,708 have been waived. The amount owing to the department was thus £32,591, of which amount £5,802 has been paid, and there is still outstanding £22,749. The honorable member for Oxley (Mr. Baker) has asked quite a number of questions in regard to this matter. He inquired, how many prosecutions had taken place in respect of pensioners who had committed breaches of the act. The reply was that the information was not readily available. Are we to take it that these prosecutions are so numerous that it is difficult to keep track of them ? If on th contrary prosecutions are rare, the department should have this information at its finger tips.

In introducing the bill, the AttorneyGeneral said that he had been greatly impressed by the interest which pensioners had exhibited in the affairs of their country by their willingness to accept reductions and by their recogniton of the fact that payment of their pensions was dependent on the financial capacity of the nation. It may be that he is not. so closely in touch, with pensioners as are other honorable members, but I can assure him that the pensioners, as a body are not at all satisfied with the administration of the act, its provisions in regard to pensioners’ property or the amount of the pension paid to-day. I have not the slightest doubt that the organizations which are looking after the interests of pensioners will, at the next election, show that they are not greatly impressed with the legislation which was enacted by this Parliament in October, 1932. The AttorneyGeneral also expressed the hope that as the result of the bill now before us, removing difficulties against which we inveigh, something like £650,000 per annum will still be saved to the Government. While the honorable member for Hindmarsh was speaking, the honorable member for Ballarat and the honorable member for Lang (Mr. Dein) interjected that certain provisions of this bill had always been in the act. If that statement is correct, why is this particular amendment brought forward?

Mr Dein:

– The amendment of the act last year removed some of the objectionable features of that legislation.

Mr ROSEVEAR:

– The present amending bill deals with the question of “ transfer or mortgage of land or estate or any interest therein other than bona fide for value.” Here, a difficult position arises. The act contains no provision as to the means of deciding what is “ bona fide for value.” At the present time, the pensions department in New South Wales accepts the Valuer-General’s valuation as the bona fide value of any property. I have in my mind a case in which an old lady desired to sell her cottage. I took up her case with the department and personally viewed the property. Frankly. I would not give her £50 for it. I do not think the Deputy Commissioner is averse to her selling, but the municipal council’s valuation of the property is £250, while a private sworn valuator has valued it at £110. In such circumstances, in the event of a sale, who is to decide what is the meaning of the words “ bona fide for value “ ? Here are two valuations, one of £250, and the other of £110, and there is nothing in the act to guide us as to how - or by what authority - the words “ bona fide for value “ should be interpreted. lt is claimed that under this bill the white card has been dispensed with. The white card is an undertaking on the part of the pensioner not. to sell or mortgage his property without the consent of the Commissioner. It has been claimed that this card is the bugbear of pensioners. I have advised every pensioner, however, to sign the card and get the pension.

Mr Dein:

– Why?

Mr ROSEVEAR:

– Because I do not think the Government is game to go to the country with these property clauses unrepealed.

An Honorable Member. - The honorable member still has an objection to the white card?

Mr ROSEVEAR:

– No. The white card does not matter; but the provisions covering the signing of the card are matters’ of consequence. Although the white card has been dispensed with, and the necessity for the pensioner securing the prior consent of the Commissioner to sell his property has been abolished,, conditions remain which make the pensioner’s position even more undefined than ever. Under these proposals, if a pensioner desires to sell his property, he does not need to ask the Commissioner for permission to sell; but, if he sells it, he does not know whether that official will accept the price realized as a sale “ for bona fide value.” There’ is nobody to whom he can apppeal as to the amount for which he should sell his property. In the case I have cited, there is a difference of £140 between the valuation of the Valuer-General and. that of a private valuator. The owner of the cottage might sell her property in perfect good faith, and the purchaser buy it perfectly honestly for the price fixed in the lower valuation, and, in so doing, may think that she is safe, just as the purchaser may think that he is safe. The Attorney-General laid great stress on the fact that a purchaser need not ascertain whether the vendor is a pensioner before he buys; but the department can come in at any time not specified by the act and controlled only by the Statute of Limitations.

The business transaction may have been completed for six years, at the end of which time the department may come along and say, “When this woman sold her* property she did not sell it for bona fide value.”

An Honorable Member. - That is absurd.

Mr ROSEVEAR:

– It is all very well to describe my statements as absurdities ; but if the honorable member has not read the act how can he say that? If the Pensions Department thinks that tho woman’s cottage was not sold for bona fide value, it can place its own valuation upon it, and in re-assessing the pension can charge the pensioner with the difference between that valuation and the purchase price. If the woman whose case I have mentioned sold at the private valuation of £110, and the department thought the property was worth £250, instead of taking from her re-assessed pension £6 a year it could deduct from it £20 a year, which means that her pension would be reduced on account of the difference of £140 which she had never received, and does not possess.

It ‘ has been said that, under this amendment, the purchaser of property does not need to inquire whether the vendor is a pensioner or not. But, when the department claims that a property has been sold for less than what is regarded as the “ bona fide value,” all sorts of complications may arise. There is not the slightest doubt that any person who acquires from a pensioner, otherwise than “bona fide for value,” any land or any estate or interest therein shall, upon the death of the pensioner, be liable to pay to the Commonwealth the debt due to it in respect of the pensioner under section 52e of the act, to the extent that the value of the property acquired by that person was otherwise than “ bona fide for value.”

Mr Thompson:

– That seems a very obscure provision.

Mr ROSEVEAR:

– On the contrary, it is extremely clear. If the woman, whose case I have cited, sold her home for £110, upon her death the pensions department could come upon the purchaser, and charge him the full amount of pension paid to the. pensioner up to the time of her death and up to an amount representing the difference between the department’s- value of her property and the amount for which it was sold. The purchaser may even have a charge laid against him in the courts when it is sought to recover the pension paid during the pensioner’s lifetime, and even if the transaction were perfectly honest he would suffer the indignity of being taken to court. From the viewpoint of the purchase of the pensioner’s property, the purchaser is in the worse position, because, under the act as it stands, he has first t» discover whether the owner of the property is a pensioner ; but under this amendment, the matter remains open, and both the pensioner and the purchaser of the property are placed in a very difficult position.

It has been said that the claim of the Government on the property of a deceased pensioner will no longer exist. According to my reading of the bill, it will still apply unless the person to whom the property is willed is a pensioner or is in distressed circumstances and happens to be living in the home at the time of the death of the pensioner. But if the pensioner makes no will the charges against his estate still remain.

A slight concession is to be made to relatives who have made contributions to their parents. Upon the death of the pensioner, twice the amount of those contributions will be deducted from the charge made by the Government. Up to date, however, contributions amounting to only £416 have been paid; therefore, the deduction under this bill will amount to £832 per annum covering the whole of the pensioners of Australia combined.

It is claimed that the conditions have been liberalized in connexion with the amount of exemption made in a pensioner’s estate. Under the act as it stands there is an exemption of £50, and the Commissioner has the right to grant a further exemption of £50. That provision disappears, and is replaced by one which stipulates that the exemption shall be £50 and any friendly society benefits. These might total only £20. Therefore, in my opinion, the provision is not so generous as it was formerly.

I shall now deal with the position of the relatives of pensioners. The honorable member for Ballarat (Mr. McGrath) has said that the pensioner’s property will be absolutely free of all charges. That is correct only in certain circumstances. If the property is willed to specified relatives who live with the pensioned the estate will be free, but if they should happen to be living away from the pensioner the same old charge will apply. That is distinctly different from what some’ honorable members imagine. First, there must be a will ; and, secondly, the beneficiaries must live with the pensioner. Only on those conditions is the estate to be free from all charges. Thousands of persons die intestate, leaving no will or other document to indicate the manner in which they desire to have their property disposed of. “Where there is no will the property will still be subject to the charge of the Commonwealth. Section 52e gives to the Commonwealth the right, if necessary, to confiscate the property and sell it in order to recover the amount of the pension. From the point of view of the pensioner and of the critics of the act, how many of the ‘iniquitous provisions are being repealed ? The bill may satisfy those honorable members who supported these proposals when they were incorporated in the act; but I contend that the conditions remain which made this particular legislation so obnoxious. I am prepared to admit that in certain respects the position is being slightly eased, but in other respects it is being made more complicated.

Let us place ourselves in the position of the pensioner. It may safely be assumed that the ages of his family range from fifteen to forty and that the majority of them, if married, do not live with. him. There are thousands of cases in which, despite the making of a will, the relatives will be deprived of the benefits of exempted charges upon the death of the pensioner, because they are not living with him. Some provision ought to’ be made with respect to blood relatives other than those mentioned in this bill, so as to include nephews, nieces and grandchildren. They are not so far removed from the pensioner thai they should be shut out. In dozens of cases with which

I am acquainted, grandchildren are living with their grandparents and looking after them, and are in every sense members of the family. If the Government wishes to make it perfectly clear that it desires the property of the pensioner, if willed, to pass to relatives free of charge, all blood relatives should be brought within the scope of the measure, and there should be no such qualification as residence with’ the pensioner ; the testamentary disposition, of the property desired by the pensioner should be given effect. »

I am pleased to say that, on a number of occasions, when .1 have approached the department with respect to charges that have been made against the estates of deceased pensioners, I have succeeded in prevailing upon it to obviate hardship. Under the act as it now stands, where the Commissioner decides to grant exemption the whole of the charge is removed. That provision is being tightened ‘ up, and in future if a pensioner should leave £50 to four relatives, only three of whom are unemployed, the Government charge will apply to the extent of one-quarter, the exemption being granted only to those who are in necessitous circumstances.

Summing up, I should say that in certain directions there is no doubt that the legislation is improved by the proposed amendments. The worst features, however, remain in it. If the relatives of a deceased pensioner cannot pay the charges made against his estate, the department will have the right to sell it. That is tantamount to confiscation.

Mr Casey:

– The Government debt now comes last instead of first.

Mr ROSEVEAR:

– That does not matter very much to the relatives; it is still a debt.

Mr Makin:

– The debt owing to the Government ranks with other debts of the pensioner.

Mr ROSEVEAR:

– That is so. The only alteration is that a debt due to the Government does not now take priority over other debts, including rates and taxes, which have been included because of the agitation of municipal councils and not out of any regard for the pensioner. The Government should eliminate the whole of the provisions relating to the property of pensioners, and restore the act to the state it was in prior to October of last year.

Mr NAIRN:
Perth

.- The honorable member for Dalley (Mr. Rosevear) is under a slight misapprehension as to the changes that have been made in the property provisions of the act. There is very material difference between what is called a charge on the property, and a debt due to the Crown. A charge or lien operates like a mortgage, and prevents the pensioner from mortgaging his property or dealing with it in any way without the approval of the Commissioner. While the charge is maintained, tho homes are held as security by the Commonwealth for the repayment of the pension. That lien or charge is now being removed. Consequently, pensioners will be at liberty to mortgage or sell their homes, and use the money as they think fit. This is an important amendment, and will be appreciated by pensioners, not all of whom attach any sentimental value to their homes. Many, I imagine, would prefer to realize upon them and enjoy the proceeds. I must confess that I am not entirely satisfied with this amendment. I was one of those Government supporters who disapproved of the pension scheme brought down last year under which the pension was reduced by 2s. 6d. per week. The full pension has now been restored to all pensioners who were wholly dependent upon it, and they are now in the position which they occupied after the passing of the first Financial ‘ Emergency Act. There still remained some disability attaching to pensioners with small incomes, but these were gradually removed. For my part, I should free the home of the pensioner from any Commonwealth claim, but would, perhaps, limit this provision as regards homes exceeding £600 in value. Failing that, I would give an exemption up to £400. The bill . re-establishes, substantially, the rights of pensioners, but I am afraid that its effect will be to induce a number of pensioners to part with their homes. They will,’ doubtless, feel that it is better to realize on their properties, and spend the money. The bill protects the rights of relatives. They will now have a greater feeling of security in the knowledge that they will not bo disturbed either during the life of the pensioner or after his. death. In this way it will maintain the family interest in the home. This, I take it, was the object which the Government had in view in making these concessions. Although the bill does not represent all that I should have desired, I intend to support it.

Mr THOMPSON:
New England

– 1 was troubled with a considerable amount of misgivings about some of the provisions in the bill, but these have been removed by the explanation of the honorable member for Perth (Mr. Nairn). If the Government wishes to satisfy honorable members of the party to which I belong as to the bona fides of the measure, the Assistant Minister should explain its provisions more fully.

Mr Casey:

– A full explanation was given on the second reading, and since then a summary of the principal provisions has been circulated amongst honorable members.

Mr THOMPSON:

– I have read the summary. The debate, so far, has revealed considerable differences of opinion, and as no one desires, at this stage, to enter into a bitter controversy it is desirable that we should hear the Assistant Minister before the debate proceeds much further. We understood that it was the Government’s desire to meet, as far as possible consistent with its policy, the various objections which had been raised from all sides of the House against the property provisions of the act. I listened attentively to the Attorney-General (Mr. Latham) when he was moving the second reading, and after studying the measure, I am forced to the conclusion that one of the most extraordinary provisions in it is that which provides that benefits of any bequests made are to be confined to relatives who reside with the pensioners. My experience is that old-age pensioners very rarely live with the members of their family.

Mr Latham:

– The argument advanced in favour <?f an amendment of the act was that the application of the property provisions was destroying the home life of the pensioners.

Mr THOMPSON:

– I do not know who put up that argument, because, as

I have stated, old-age pensioners seldom live with members of their family.

Silting suspended from 6.S0 to 7.15 p.m.

Mr THOMPSON:

– I have given further consideration to the point raised by the Assistant Treasurer and the Attorney-General with respect to the amendments dealing with the new conditions affecting the relatives of pensioners, and I feel quite satisfied that the proposed amendments are entirely unsatisfactory and that it would be wise for the Assistant Treasurer to accept an amendment which would clarify the position and avoid unnecessary trouble. The Government proposals generally are meritorious, but there are two troublesome provisions among the amendments which I think will lead to a good deal of worry to the administration, and, finally, require a further amendment of the act when the Parliament re-assembles. The t first amendment deals with the clause relating to relatives; and it is by far the more important of the two. Honorable members will agree that most of the trouble respecting the provision relating to the surrender of property has arisen because of its effect upon the relatives of the pensioner. My own experience is that in nine cases out of ten when the pensioners have grievances, they are concerned ‘about leaving their property to their children or some near relative, and to my mind the proposed amendment does not overcome this disability. It is quite evident from the amendment that the only conditions under which relatives can acquire a property of a pensioner are, first, that the beneficiary must be a pensioner; secondly, that the beneficiary must be in necessitous circumstances; and, thirdly, that the beneficiary must reside in the home of the pensioner as a member of the family. It is quite evident that, unless the beneficiary conforms to those conditions, the Commonwealth is liable to claim upon him for the amount due to the Commonwealth by way of debt. I take it that the word “debt” refers to the amount of pension collected by the pensioner from the Commonwealth.

Mr Casey:

– From the 1st January this year.

Mr THOMPSON:

– There is little difference between the position that will exist under the amendment and the position to-day so far as the debt is concerned. The honorable member for Perth has given us the benefit of his legal knowledge, and explained that “ debt “ is not the same as “ charge “, and that there is a definite legal distinction which appears to him to be most important, but which is not very apparent to the lay mind. Previously, the pensioner was required to pay out of the estate the amount of pension collected since October, 1932. That was all that concerned him and his beneficiaries, and that position still exists except where the beneficiaries are pensioners, are in necessitous circumstances, or are members of the family residing with the pensioner. The restrictions are infinitely more definite than they were before, and in practice it will be found that this amendment will cause more trouble than the existing provision.

Mr Casey:

– I do not think that the honorable member realizes that, under these conditions, the beneficiary inherits the home and other property of the pensioner free of debt and charge.

Mr THOMPSON:

– The beneficiary must be a pensioner, in necessitous circumstances, or a member of the family residing with the pensioner.

Mr Casey:

– Or a case of hardship.

Mr THOMPSON:

– That is the only bright spot in the amendment; but it is likely to open the door to considerable trouble, because it will mean that practically every case will be submitted as one of hardship. Pensioners’ complaints are invariably based on hardship.

Mr Casey:

– If the honorable memberis not satisfied with this proposal I donot think that he would be satisfied with anything. This alteration will cost the Government £500,000 or more.

Mr THOMPSON:

– I am endeavouring to ascertain what will be the position if we adopt these proposals, because once they are agreed to they will remain on the statute-book at least until the Parliament re-assembles. The Government is adequately safeguarded without the restrictions in the provision which requires relatives to contribute to the pensions of their parents or relatives, and the onus is already upon the administration to decide whether a relative shall contribute to the pension. I take it that the Government is adhering to that provision, which I think is necessary as a definite safeguard. I venture to say that that particular provision has been responsible for surrenders of pensions to a much greater extent than the property provisions. In my own electorate a number of pensioners’ relatives have approached me in a state of abject terror and asked me to explain the formidable document presented to them by the department. They feel that quite a new situation has developed. I know of one case in which a single man on a salary of £13 a week was contributing £3 a week to his parents who were in receipt of the pension.

Mr CASEY:
UAP

– Surely the pension was discontinued?

Mr THOMPSON:

– It was reduced to a negligible amount. These people came to me and asked whether it was not possible for them to continue to receive the pension, and at the same time to have the benefit of the £3 contributed by their son. I pointed out that they had no fair claim upon the Commonwealth and that they should be able to live on this gift of £3 a week. The administration deals with all these cases on their merits. In another case, a working man in receipt of £4 a week was asked to contribute to his father’s pension, but as soon the department discovered that he had a wife and four children, it decided that there was no need for him to contribute to the pension. I consider that it is quite safe to allow the pensioner to bequeath his property to any of the relatives prescribed in the amending bill, although I think it would be wise to include grandchildren in the list. If we consider that the contributory system of .pensions is sound there is no need to provide further safeguards because the onus is thrown upon the department to administer the law, and as it is carrying out its work efficiently, there is no necessity for the Government to provide restrictions in this bill. Personally, I think that this provision will have the effect of making the administration more difficult, and may create hardship without achieving any corresponding good.

I cannot understand why it is proposed to give the administration the power to decide after a sale or transfer of property has been effected whether the deal was bona fide, and the price a reasonable one. This provision opens the door to a great deal of trouble and possible litigation. After all, the number of cases of fraud would be very small, because there would be little inducement for any one to attempt to take down an old-age pensioner when the average value of the homes of pensioners is only £275. There may be cases, of course, in which the property of a pensioner is worth much more than that. During the depression some men have fallen on evil times, and have been compelled to apply for the old-age pension. That is one of the tragedies of the depression. A few years ago, a man may have bought a house for £2,000, or perhaps £3,000, but that house would not fetch on the market now, more than £1,500 or £1,600, and he would be lucky to get that in cash. He may, however, be forced to sell, because the rates on the property are more than he can afford to pay. The bill requires him bo give notice to the commissioner within 30 days of the sale or transfer taking place, and the duty then devolves upon the Pensions Department to determine whether the deal was genuine, and whether the price was reasonable. Perhaps the man who bought the property paid £1,200 for it, but the Commissioner may decide that it was worth £1,000 more than that. He may then make a claim against the purchaser for a considerable sum representing the pension which was paid to the seller. If the purchaser is a man of substance, he will naturally resent the imputation of fraud, and the suggestion that he attempted deliberately to take down an old-age pensioner.

Mr Casey:

– He would have been guilty of fraud, nevertheless.

Mr THOMPSON:

– Not necessarily, because sometimes a man will take anything he can get for bis property, especially if he is paid in cash. I know of one man who recently sold for £1,000 a house for which he had paid £2,000, though the market value of the property at the time he sold was about £1,600. It is possible that a pensioner may dispose of his home for hundreds of pounds below its fair market value, and the purchaser may not necessarily be guilty of fraud.

Mr Lane:

– Should not the pensioner bo prevented from selling his property for less than its market value ?

Mr THOMPSON:

– The purchaser may have no choice, because he cannot afford to pay the rates on the property. The honorable member for Dalley (Mr. Rosevear) quoted an instance in which the municipal valuation on a property was £250. The valuation placed on it by an official valuator was £110, while the owner’s valuation was £150. The property was sold for £110, or £140 less than the municipal valuation. That illustrates how dangerous this provision may be, and how it may easily lead to costly and profitless litigation. The honest man who bought a pensioner’s property in the circumstances I have described, would bc more likely to resist the demand of the department for a refund than would an actual crook When a pensioner sells, or otherwise disposes of, his property, he must immediately notify the department, otherwise he is liable to a fine and imprisonment, and may be compelled to refund the pension paid to him. The department then assesses the new income of the pensioner, and may reduce his pension or abolish it altogether. Therefore, the department is fully protected under the act as it stands, and there is no need for this now provision designed to clothe the department with powers it would probably rather be without. The department will be put to an enormous amount of trouble in policing the provision. In fact, it will need a score of private detectives to do the job properly.

Mr Paterson:

– There may be collusion between the buyer and seller.

Mr THOMPSON:

– That is possible, of course,, but it is not likely to occur in many cases, and we have no right to vitiate a good law in order to meet so rare a contingency. We know that under the act as it stands there is always a possibility of fraud and dark dealing, and that some deception has always been practised. It cannot be avoided, but the Go- vernment is not, for that reason, justified in imposing these restrictions.

Under this bill, pensioners are no longer required to hand their properties over to the Government. All sorts of harassing conditions have been removed, and then, at the very end of the bill, a clause is introduced undoing all the good that has been done, and investing the commission with the powers of a criminal investigation department.

Mr Maxwell:

– That, in itself, will Ite a great safeguard.

Mr THOMPSON:

– The learned member for Fawkner (Mr. Maxwell) has not, apparently, the same faith in human nature as we laymen have. I do not know whether the government has considered the cost of making the investigations which will be necessary under this provision. I doubt whether the benefits to be derived will be worth the trouble and expense. The Government first claims that it wishes to dispel, fear and suspicion and then immediately does something, that will inspire both. This provision will result in a considerable amount of litigation between the Commonwealth Government and the purchasers of pensioners’ properties. Already the Government is adequately protected; why, therefore, should it embark upon this new and dangerous policy? In considering the matter, I am not concerned about speculators or the worries that the innovation may cause the department, but I point out that if the Government insists on this proposal it will give the lie completely to the claim that it will be unnecessary for the purchaser of a pensioner’s property to cause searches to be made as to its title. Paragraph 1 of the memorandum which has been issued by the Government states -

No undertaking is required from claimants and pensioners in relation to transfer, &c, of property. Existing” undertakings to be destroyed by Commissioners.

Paragraph 3 reads -

No necessity for persons proposing to accept transfers or mortgages of land to inquire whether transferor or mortgagor a pensioner. Search provisions repealed- while paragraph 6 is as follows: -

Pensioner may deal freely with his land so long as dealings are bona fide and for value, but he must give notice to the Commissioner of dealings. Title is not affected by act, but any person who acquires property from a pensioner, otherwise than bona fide and for value, to be liable for the payment of the debt due to the Commonwealth to the extent to which he has not given value for the property.

If this provision is allowed to remain, it is absurd to declare that there will no longer be any necessity, for persons who are about to accept transfers of mortgages of a pensioner’s property to inquire into the bona fides of the title. It will be more than ever necessary to do so. As the Leader of the Country party (Dr. Earle Page) has declared, the position will be intensified tenfold, and the exhaustive way in which these transactions will have to be investigated will have a really adverse effect on the real estate market, and on bankers, lawyers, and others. Honorable members appear to be hopelessly entangled over the whole matter, and, while I do not attribute any wrong motive to the Government, I believe that it has acted too hastily in its endeavour to race through . 1.- business-paper before the House rises. The whole thing is not only dangerous,- but also absurd: The Government claimed that it intended to sweep away all the restrictions that surrounded the disposal of a pensioner’s property, but it has given the administration a greater grip than ever over such transactions. If I proposed to have any dealings with an old-age pensioner after this provision became law, I should be on my guard more than ever; and, in addition to having the whole matter thoroughly investigated, I should engage the very best lawyer available to ensure that I was properly safeguarded and not likely to be prosecuted by the administration for having engaged in what I considered to be a bona fide transaction. I suggest that, before rushing through this slipshod legislation, the Government should give serious consideration to the advice tendered to it By honorable members on this side, which is by no means captious criticism with an underlying political motive.

Sir LITTLETON GROOM:
Darling Downs

– The measure that is before the House for consideration is a further instalment of the legislative promises made by the Government in respect of the amelioration of the con ditions of old-age pensioners. When the act was last amended, a restoration of 2s. 6d. a week was made to pensioners, and a number of anomalies were removed. As a result, great relief has been afforded to many who would otherwise have been in a sad state.

I desire to ensure that the home of the pensioner shall be sacred to him. In considering this legislation, we must remember that it was never intended that a pension should be regarded as a charity ; it is a right. The provisions of the bil deal almost wholly with the property of pensioners, and certainly provide considerable relief to those concerned, while removing certain technicalities from the act, which, in my opinion, were objectionable. For example they remove the necessity for” a pensioner to sign an undertaking regarding the transfer of his property. The need to sign that white ticket was certainly responsible for many pensioners relinquishing their pensions, as they were afraid, and it is- a great relief to find that those undertakings are no longer required and are to be destroyed. Another perfectly proper provision that has been inserted in this bill is that which permits a pensioner to mortgage or sell his property as he thinks fit. Of course, if by selling he becomes the possessor of a sum of money and no longer lives in his own home, he still comes under the provisions of the act relating to the amount of the pension in that respect, as has always been the case. However, the freedom now given him will be welcomed. The requirement that a pensioner shall give notice when he proposes to transfer or mortgage is perfectly reasonable, and will impose no hardship, as has been suggested by the honorable member for New England (Mr. Thompson). Whenever a sale takes place, it will be necessary for a pensioner to notify the department, which will have particulars as to the value of the property, and will know” from the notification whether the case should be further investigated or not. If it is indicated that there is a conspiracy between the two parties, to the sale, the department will have the necessary power to proceed as it thinks fit. Another advantage brought about by this amending bill is that a pension will no longer be a charge against property owned by a pensioner.

Mr Makin:

– It still remains as a debt.

Sir LITTLETON GROOM:

– The abolition of that provision will afford very great relief. But the debt will still remain, and after the priorities in the estate have been satisfied, it will be a debt which can be discharged out of the assets of the estate. It is upon an aspect of that matter that I disagree with the principle laid down by the AttorneyGeneral, who is of opinion that the Commonwealth is entitled to look to the property of the pensioner after his decease, to repay the pensions which have been granted to him during his life. That is a hard proposition to apply to the home, and gets away from the idea that in their old age men enjoy these pensions as of right. They cannot enjoy them as of right if the Government says to them, “ If you are thrifty and build up a home, the result of your frugality may be taken from your family after your decease.”

Mr Casey:

– If it is willed to strangers.

Mr Makin:

– It may be taken from them if it is willed to relatives.

Sir LITTLETON GROOM.In certain cases only. That would not be a pension as of right. The principle enunciated by the AttorneyGeneral strikes at the very foundations of the idea that the pension is enjoyed as a right and not as a charity - that it is given as a recognition of service rendered to the country. Take for example the “Workers Dwelling Act in Queensland. The policy of the Government of that State has always been to encourage people to establish their own homes. The possession of a home hestows a sense of security upon the individual and results in a more stable element in the community. Anything that endangers the home acquisition spirit, is undesirable. The Government has acted wisely in granting some relief, however, in enabling certain relatives to possess the home. The difficulties that exist now are as nothing compared with the difficulties that previously existed, and Ministers have gone a long way towards affording relief to pensioners in that regard. The bill is a great advance upon existing law in regard to the principle of enabling property to be devised by will to which the Minister has referred. According to the terms of the clause relating to this matter, the property of a pensioner in specified cases is to be exempt from liability to the Commonwealth. Property is exempt -

Which passes under the will of the pensioner to a relative who -

is a pensioner, or

is, in the opinion of the Commissioner, in necessitous circumstances; or

was, at the death of the pensioner, residing as a member of the family of the pensioner in a home owned by the pensioner.

Under the bill it may pass also to some person who, in the opinion of the Commissioner, would suffer hardship if deprived of it. Thus the measure is being given a wider scope than it has had previously. In one of the cases that recently came under my notice, the title of a woman to a property extended back to a period prior to the establishment of Queenslandas a separate colony. I believe that the Government will at some future period endeavour to extend the definition of the word . “ relative,” which is now defined as “widow, widower, father, mother, child, sister or brother of the pensioner.” It is an advantage for and old-age pensioner to be able to dispose of his own property to his children under these conditions. “ During the last two years many cases relating to the homes of pensioners have been brought under my notice. In many cases, they represent a family acquisition. Only to-day I came across a letter in which the writer says in effect, “ I took up a small piece of land as a selector in the early days. The members of my family, when in employment regularly, sent me a portion of their wages and my home was a home for them whenever they were out of employment “. This particular property had been acquired by the contributions of the sons of the pensioner who had regularly remitted to him a part of their earnings.

Dr Earle Page:

– Under the old act that home would be lost.

Sir LITTLETON GROOM:

-Yes. Of course, I am merely illustrating the principle of the joint acquisition of a home by the members of a family. Under the. old law, this man’s home was likely to be sold up after his decease to pay for his pension. My correspondent felt that position very deeply.

The same condition formerly applied, not only to small farms, but also to hundreds of homes. A widow who enjoyed a pension asked me to secure her exemption from the provisions of the act. Two “ of her children who were in employment were in receipt of 10s. and 15s. a week respectively. The mother pooled the family earnings and gradually acquired a home in her own name. It is hard to think that if the children ceased to live in that home with the mother, under the section of the act they would not be entitled to have the home willed to them unless they were in necessitous circumstances. I am grateful to the Minister for having gone as far as he has done in this regard.

Mr Beasley:

– Will the honorable member support an amendment to extend the clause to other relatives?

Sir LITTLETON GROOM:

– I should like the Government to do that if it can. I know the heavy liabilities the Government has to face, but in the near future it may, perhaps, be able, to take action.

I would like to express my appreciation of the just and sympathetic administration of the Deputy. Commissioner for Pensions in Queensland. Queensland is particularly fortunate in having the act administered by capable officers-

Dr Earle Page:

– That is the case in New South Wales.

Sir LITTLETON GROOM:

– I am glad that the penal provisions are being repealed, and that only those which are absolutely essential for the preservation of the act are being retained.

Mr HOLLOWAY:
Melbourne Ports

– I shall deal very briefly with this bill. I am not concerned with the legal technicalities of its administration. I believe the department knows how to administer the act, and the responsibility is upon its officers to see that it is faithfully carried out. Like the honorable member for Hindmarsh (Mr. Makin) I am disappointed with the value of the improvements which have been introduced into the measure. I admit that it con tains some improvements, but every section of the House must be somewhat disappointed with those improvements. I am disappointed that the Government has not seen its way to do what every section of this chamber thought it was going to do. Not more than six or seven weeks ago it was definitely stated that the Government desired to free the whole pension scheme from the provision which permitted the holding of a lien over the property of a pensioner. That statement was definitely made by members of the Country party, and, naturally, I thought that that was the only section of the act with which the Government was concerned in submitting an amending bill. It was not then suggested that an attempt would be made to improve any other section, but it was urged that attention should be concentrated on the abolition of the lien over the property of old-age pensioners. I am disappointed with the results of the Government’s endeavours. The improvements are not nearly so numerous on paper as they appear to be. It is unquestionable that in certain circumstances the Government will still be able to make a claim on the property of the pensioner; consequently, the pension will still be very largely only a loan. I am disappointed that the Government has not cleared that matter up. Proof of the fact that the Government charge will continue, is furnished by a number of clauses. The clause which relates to contributions by children towards the cost of the pension provides that double the amount of the contribution shall be subtracted from the value of the estate before it is seized. A very slight improvement is effected by funeral and mortuarybenefits of friendly societies being left out of account. The undertaker will have first claim on the estate; and the municipal authority, to which rates and taxes are owing, will occupy the second position.

Mr Casey:

– A lot more than that will come out of the estate before the Government’s charge will take effect. Personal effects to the value of £50 also are exempt.

Mr HOLLOWAY:

– I am not denying that. I am quoting only the new features. The exemption of rates and taxes appears to be an advantage, but really is not, because if they were not exempt, the Government would have to pay them when it took over the estate. Under the act as it stands, the widow or widower can retain the property so long as she or he lives. Will specified relatives to whom the property may pass hold it permanently, or only for a time?

Mr Casey:

– -Permanently.

Mr HOLLOWAY:

– That is an advantage. It will not, however, cost the Government nearly so much as appears to be the case. The largest number of pensioners are old-age pensioners. The list of specified relatives includes the father and the mother of a pensioner, but in very few cases will either of those enter into the consideration of the case ; therefore, they may be eliminated as of no account. The Minister will agree that nearly all invalid pensioners are young people, and that the majority of them have been invalids for practically the whole of their lives; consequently, they would probably have no property to leave to relatives at their death. There will be few brothers or sisters who are not married and settled in their own homes. It will thus be seen that, under the proposed amendments, few additional persons will gain anything as the result of properties being willed to them.

Under another new p’rovision, a pensioner will be permitted to sell or transfer his property. There is a catch in that. Upon the sale of his property, the pensioner will have to notify the Commissioner of the fact within 30 days ; and the Commissioner will immediately revalue the pension from the date upon which payment for the property has been received. Thus in the last analysis, the sale of property by pensioners will be of advantage to the Commissioner rather than to the pensioner, because a certain proportion of the pension will be saved. Because I am certain that this provision will work out in that way, I shall advise every old-age pensioner who consults me to make hia property the last thing that he parts with, so that the department will always have to pay the full rate of pension, instead of a certain portion of it having to be paid out of the proceeds of the sale of the property. I am anxious that pensioners shall revert to the position that they occupied before the property provisions were enacted. Those who were members of this House before the scheme was altered, ought to have a knowledge of what has been done; yet some honor-, able members have to-day heatedly contradicted each other in regard to very simple matters. Is it not true that when the Scullin Government first’ reduced the pension it did not interfere with the property qualification? Is it not also true that when the Lyons Government further amended the act if introduced, for the first time, the provisions which make the pension a charge on the property of the pensioner? Of course it is. Yet one honorable member this afternoon practically called another a liar because he differed from that point of view. As laymen, we cannot be expected to have a deep knowledge of the legal aspects of this legislation, but surely we ought to be able to understand its plain provisions.

I am glad that a few additional crumbs have been placed on the pensioner’s table, but am greatly disappointed at their meagre nature. I expected more, in view of the attitude adopted by the right honorable member for Cowper (Dr. Earle Page) and his colleagues. Many honorable members on the Government benches also were enthusiastic advocates of extensive alterations of the act. A committee of honorable members from the Government side was appointed to consider what amendments were needed, and every member of it was in favour of tho repeal of the whole of the property provisions. The honorable member for Darling Downs (Sir Littleton Groom) said this evening that it was always intended that pensions should be regarded as a right, and that no claim should lie against the property of a pensioner. The late Mr. Fisher and others, at the initiation of the pensions scheme,- expressed the view that a pensioner’s home should not be interfered with so long as it was used as his own domestic domicile, and not for purposes of rent, interest, or profit. I believe that, the majority of honorable members felt certain, when the Attorney-General (Mr. Latham) and his colleagues promised to review the situation, that the amending legislation when brought down would wipe out the objectionable property provisions, so that the home of a pensioner would be as free as it was before it was interfered with. That is where my disappointment lies. I cannot agree with the valuation placed by the honorable members for Ballarat (Mr. McGrath) and Darling Downs on the advantages given by the Government in these new provisions. Some of them will be an asset instead of a liability to the department. The really objectionable feature, which is responsible for the fundamental complaint of the honorable member for Hindmarsh, is that there is still to be a lien on the property of the pensioner. Although a larger number of persons will, in certain circumstances, be entitled to obtain the property, it is not nearly so large as it would seem to be. I hope with other honorable members that the Government will, at an early stage, review this provision. It may be that the financial advantage which the Government is obtaining by not freeing pensioners’ property will be so small and valueless as to cause it to conclude that it is not worth while to retain the property provisions in the act.

Mr LANE:
Barton

.- I regret that some honorable members have displayed heat in the discussion of this bill and in blaming the Government for not having done what they expected it would do. The honorable member for Ballarat (Mr, McGrath) was somewhat hurt by the insinuation of the honorable member for Hindmarsh (Mr. Makin) that the Government had not acted fairly in respect of its treatment of the invalid and oldage pensioners. In view of the many attacks that have been made by the Opposition on the policy of the Government, the pensioners themselves are becoming bewildered as to the meaning of the act. Many of them are still under the impression that by signing the white card they surrender their property to the Government. That impression has been gained as a result of the propaganda of a number of individuals who are seeking the votes of the invalid and old-age pensioners.

Mr Holloway:

– The honorable member’s statement is ridiculous.

Mr LANE:

– The honorable member for Hindmarsh stated that pensioners will receive practically no advantage from this amending bill; but, as the honorable member for Ballarat has pointed out, the honorable member for Hindmarsh should have adopted a fairerattitude, and should not have attempted to make political capital out of the Government’s inability to restore in full the recent reductions of pensions. We did not blame the Scullin Government when it reduced the pension by 2s. 6d. a week, because we knew that it was acting upon the advice of financial experts. When this Government came into office the same financial experts advised it to make yet another reduction of pensions, because, at that time, the financial position of Australia was serious, particularly in view of the peculiarities of a certain State Government. At that time, the Government, before deciding to make a further reduction of pension payments, gave grave consideration to the position of the pensioners, and, after reflection, decided that, instead of penalizing 360,000 pensioners, only 50,000 were to have their pensions reduced. That was a distinct achievement, in view of the state of the finances and of the “depression then prevailing throughout the Commonwealth. The Government’s action on that occasion was strenuously fought by the members of the Opposition, and the Prime Minister (Mr. Lyons) promised at that time that the moment the finances improved he would be the first to restore the reductions . of pensions. Scores of pensioners have told me that they have received advice from certain quarters, and it has taken me a long time to persuade them that the advice given to them was wrong. A little while ago I happened to have on my list the name of an old-age pensioner, and, as she had not written to me for some time, I wrote and asked the reason. She called and informed me that she had let her property to her son at a rental of 13s. a week. I asked her why she had done that, and she replied that had she signed the white card the Government would have taken her property from her, I thereupon informed her that she could still live in the house and receive a pension of 17s. 6d. a week, and, if that was not acceptable, her son could reside with her at a rental of 8s. a week, which would entitle her to a pension of 15s. a week, making her total payment 23s. a week. That old lady was living on 13s. a week and receiving food from her daughter, all because some one had advised her not to sign the white card. I know that a number of pensioners were similarly misinformed. Like the members of the Opposition, we on this side of the House do not see the measures that are introduced into this chamber until they are read a first time, and, on perusing this bill, we have been disappointed like honorable members opposite.

A few months ago some of us did recommend that pensioners’ properties up to a value of £500 should be exempt from the provisions of the act, but we were immediately told by the Government that if that were done a considerable loss of revenue would result, and that we might just as well delete the property provisions from the act altogether. I confess that I am a little disappointed with the bill, but we must accept it, particularly as it has received the approval of Cabinet, which no doubt acted on the advice of its financial advisers. The interpretation of this legislation will bring about many difficulties, and I believe that we are leaving too much of the interpretation to the administration. We are asking it to interpret what is a hardship case. and it is difficult to say where the Commissioner must draw the line in respect of these cases. The act should be so clearly defined as to obviate the necessity for pensioners to take their grievances to members of the Parliament, who, in many cases, have had to challenge the rulings of the Commissioner. Under the present act, rulings have been given with which I have disagreed, and I have piles of correspondence on a single case. I have had refusals from the Commissioner, and even from the Prime Minister himself, but still I have been able to advance fresh reasons in support of the application. I desire it to be known that this Government is sympathetic towards the pensioners, and that everything will be done for them insofar as the finances of the Commonwealth will permit.

Discussing the property clauses of the bill some honorable members have said, that difficulties will arise in assessing the value of pensioners’ property. The bill provides that,, within 30 days of a pensioner selling his property, or giving a mortgage over it, he must notify the Commissioner, who will then determine whether or not a fair price has been received. If a man sells his property for £500, £50 is deducted from the proceeds, and he still has £450 on which to live. I know of one pensioner who sold his property for £750. When he first proposed to sell, I tried to dissuade him, but he pointed out to me that he was 75 years of age and had not long to live, so that he was entitled to sell the property, which he had accumulated as a result of a lifetime’s work, and enjoy the proceeds, rather than live on a pension of 17s. 6d. a week, and leave _ the property to his children. Of course he lost his pension, but he had the money on which to live. Having heard his side of the case, I told him that I regarded him as one of the very few wise fathers I had known. I know of one case in which the Homes Department of the New South Wales Savings Bank took over a pensioner’s property valued at £250. The pensioner had no equity in it, but his pension was reduced to 6s. 6d. per week. I tried to persuade the bank to sell the property, and a young man who heard of what had happened, said that he was prepared to buy it for £250. The bank, however, refused to sell at that price, because it said that £250 was nos a. fair value. The bank, is not permitted under the act to hold property, other than that in which it conducts its business, and it usually disposes of properties that fall into its hands at the best price offering. In the case I have mentioned, however, the bank authorities feared that the beneficiaries under the pensioner’s will might enter a protest against the price of £250, which was offered for the property, and that, the bank might be required to satisfy their demands.

Honorable members have said that, when a pensioner dies, his property i3 seized .by the Commonwealth. That is not true. If the pensioner has made a will the property is handed over to the executor under the will, who administers it in accordance with’ the ordinary laws of the State, and pays any debts owing on it. in due order of preference. There is no justification for the tirade of abuse which has been directed by honorable members opposite against the Government in. connexion with this measure^ It is a good bill, and provides for the introduction of a substantial measure of reform.

Mr JAMES:
Hunter

.- I feel sure that a great many people will be disappointed with this bill. The honorable member for Barton (Mr. Lane) voted for the last pensions amending bill, which imposed the property qualifications, and, after finding that it inflicted undue hardship on the pensioners sniped at the Government over it for the rest of the year. I have no doubt that he will, do the same in connexion with this measure. If the. honorable member took the trouble to study the bill, and compare it with the original act, he would not be guilty of such inconsistency. I approach this matter from the point of view of doing justice to a section of the community which has rendered a good service to the country, namely, the pioneers, whose only crime is that they have grown too old to work for themselves. When the pensions scheme was first introduced, it was understood that the pension was to be paid to the old people for the services they had rendered to the community, and that it was not to be regarded as a charitable allowance. This view was confirmed recently by the honorable member for Darling Downs (Sir Littleton Groom), who piloted the first pensions bill through* Parliament in 1908. He quoted various speakers of the day who said that they were pleased to know that a pension was not to be regarded as a charity, but as a payment by right. However, pensions have now definitely become charitable payments, and the Government has, moreover, taken a lien over the homes of the old people, those homes which they have learned to love, and which they naturally desire to pass on to their children.

The Government now proposes to amend the act to permit a pensioner to bequeath his home to relatives who live with him, but he may not leave it to a son or daughter living elsewhere, even though that son or daughter may have built the house in which the parents have lived and bought the land on which it stands.

Some honorable members claim that the amended act will be all that pensioners desire. This has clearly demonstrated the fact that they have relied upon the interpretation of the act made by their leaders, and have not studied the measure for themselves. Unfortunately, the death rate among miners is higher than that of workers in most other industries, and often it has been my sad lot to have to break the news of the death of the breadwinner of the family to his wife. In most of those cases, the son has made great sacrifices in order to provide his widowed mother with a home, yet, under this legislation, if that son is not living with his mother when she dies, he cannot have restored to him the home which he gave to ber. On the other hand, it is provided that money lenders who have made advances on a pensioner’s home are entitled to a return of the capital invested in priority to any claim. of the Government. While I believe in honouring obligations, I claim that treatment that is good enough for money lenders should be good enough for the pensioner’s son. It will be remembered that the Government appointed a committee to inquire into the subject of pensions. Among those who formed that committee were the honorable members for Barton (Mr. Lane), Ballarat (Mr. McGrath), Perth (Mr. Nairn), and South ‘Sydney (Mr. Jennings). They”’ recommended that property to the value of £500 should be exempt from any attachment upon the death of the pensioner. As a result of that recommendation, which was published in the press, we know that many pensioners who relinquished their pensions when the Government introduced its drastic legislation, were encouraged on the advice of their representatives again to apply for them. They have really been deceived. Many pensioners have built homes with money provided by sons who paid the supreme sacrifice at the Great War, and, consequently, the owners are greatly attached to them, and refuse to make them over to the Government. In other cases, a son who has built a home for his mother may marry, and, if, when his mother dies, he is not living with her, he, too, cannot recover possession of the home unless he refunds to the Government the amount paid to his mother as pension.

It is quite obvious that section 52 ea has misled many people into the belief that in future pensioners will have complete freedom regarding the disposal of their property. Actually, that is npt so. Though a pensioner may have the right to transfer or mortgage his property, the hew section 52 d provides that he must, within 30 days of the execution of the transfer, give notice to the Commissioner or his deputy concerning the details of the transaction. If the pensioner fails to comply with those provisions his pension may be cancelled. I ask honorable members where is the socalled liberty? Proposed sub-section 3 of section 52 d provides that if the Commissioner is satisfied that a pensioner has transferred or mortgaged any land or estate or interest therein otherwise than bona fide and for value, the Commissioner shall review the rate of pension granted. That means that if the pensioner gives his property away, the value of such property, determined in accordance with the local government valuation, will be assessed against the rate of pension paid, and for every £10 over £50 in such value a deduction of £1 per annum is made. And further, any monetary value received by a pensioner as the result of the- transfer shall be considered in determining the rate of his pension. It will therefore be seen that the objectionable clause to which I have referred has been reimposed in a most subtle way.

Mr Lane:

– That was provided in the original act.

Mr JAMES:

– That is not quite correct, as section 52a (1) of the principal act reads -

Every pensioner and every claimant shall, within such’ time as is prescribed, furnish to the Commissioner the prescribed particulars relating to the real property owned by the pensioner or claimant or in which he has any estate or interest, and relating to his relatives, be it husband, wife, father, mother or children as are prescribed.

That specifies any property that he may own or become possessed of, not any property that he transfers or sells. If that provision were in the principal act, why is there need to re-insert it in the amending bill?

Mr Lane:

– I ask the honorable member to read sub-section 2..

Mr JAMES:

– To humour the honorable member I shall do so. It_ reads -

Any pensioner who fails to comply with the requirements of the last preceding sub-section shall be guilty of an offence and shall, upon conviction, be liable to ‘ a penalty not exceeding £50, and in addition the Commissioner may cancel the pension granted to him. .

That’ does not relate to his transferring or selling the property, but solely to a property which he may own or of which he may become possessed during the time that he is a pensioner. It was always provided in the principal act that a pensioner should submit periodical returns regarding the property that he possessed. The honorable member for Barton has merely elaborated an idea of the honorable member for Ballarat (Mr. McGrath), being incapable of evolving one himself. Subsection 3 also provides for a reduction of the pension if a pensioner transfers his property. The provision which gives a pensioner liberty over his property by withdrawing the necessity to fill in the objectionable white card known as form 43, also indicates that if he dares to exercise his liberty he will be penalized in the manner that I have described. Further, although under the original act the home of a pensioner was exempt from attachment, now, should the pensioner desire to transfer the property to one of his children who, although not living with him, built it, and the department concludes that the ‘transaction is not a bona fide sale, he will suffer by having his pension reduced. Proposed new sub-section 4 of section ‘52d provides that any person who acquires from a pensioner other than bona fide, and for value any land or airy estate or interest therein shall upon the death of the pensioner be -liable to pay to the Commonwealth the dent due to it in respect of the amount paid to the pensioner. So, despite the fact that’ the son may originally have purchased the, house and given it as a gift to his parents before he can recover possession of the property upon the death- of the’ pensioner, he- must reimburse the Commonwealth for -the’ pension paid to hia parents. I -have’ had cases brought to my notice in which it was utterly impossible. t for the ‘ relatives of pensioners to repay such money But, having a love for the old home in which they were born, they have mortgaged their own homes to repay to the Government the pension paid as they feared that it might exercise its power to take the beneficiaries to the court for the purpose of securing an order forthe disposal of the property. The provision investing the Government with that power is still retained in the bill. I could, if time permitted, quote the cases of a man who had mortgaged his own home in Cessnock for this purpose, and of a woman in Kurri Kurri who had her home built through the Starr Bowkett Society. To that home she had contributed approximately £115, and the balance was owing to the society. Upon her removal toSydney, she asked the society to dispose of her property and to give her an equity in it. The society did this, but before it was able to pay her, the Pensions Department demanded £45 10s. by way of refund . for moneys this woman had drawn as a pension. I am assured that nothing can be done in the matter, but here is the letter of protest which I had. forwarded to the Deputy Commissioner of Pensions, after vainly appealing to the Commissioner -

Kurri Kurri, 7th November, 1933.

Dear Sir,

In continuation of our previous correspondence re. theabove.I wish to enter, through you, and on behalf of our society, a strong and sincere protest against the harshness of the law regarding sueh pensioners as the above. This pensioner was forced to sacrifice the equity in her property in this town in order to obtain some little benefit from same, otherwise there is no doubt the whole would have been lost. The equity amounted to approximately £115, and out of this sum, the Pensions Department claimed £45 10a. We trust you will use your best endeavour to obtain a refund of this amount for which we thank you in anticipation.

Had the woman refused to transfer her property, it would have eaten itself up in time, and she would have had nothing.

In another case a widowed mother died and the Pensions Department immediately claimed £19 from her estate which had been left to her daughter. The daughter had a very great affection for the home in which she had been born, and accordingly borrowed the money with which to discharge the claim. To treat this woman in the way she was treated was a cruel and callous action. What most old-age pensioners desire is to leave something to their children who have stuck to them throughout their lives, and who have helped to provide for them. But if the children are not living with the pensioner, there is no hope that they will receive justice. Provision is made in the bill whereby the Commonwealth, upon the death of a pensioner, can recover the pension which he had previously been paid. Proposed new section 52b 3 provides -

The amount of pension repayable under this section shall be a debt due to the Commonwealth, and shall be recoverable by the Commissioner in any court of competent jurisdiction.

Then sub-section 4 of the proposed new section reads -

Any property comprised in the estate of the Commissioner which -

  1. Is not bona fide required for the pay ment of his funeral and testamentary expenses and debts (including any rates and taxes charged upon his property) and
  2. Is not exempt from the provisions of this section, shall be applied towards the satisfaction of the dobt due to the Commonwealth under this section.

I know that there has been a considerable agitation on the part of municipal and shire councils in my own electorate which have sent out a circular letter asking that a protest be made to the Federal Government on behalf of the old-age pensioners against the confiscation of their property after death. The original provision caused many of these pensioners to say, “ We will not pay any more rates.” As the result the revenues of municipal councils were reduced, and they were powerless to do anything in the matter, as federal property is not liable for the payment of rates. There are properties owned by pensioners upon which they will still refuse to pay rates, because they know that as the result of the passage of this measure those properties will ultimately belong to the Federal Government. Proposed new section 52e 1 provides -

The Commissioner or a Deputy Commissioner may send by post to any person administering the estate of the pensioner, or in possession of any part thereof, a notice, as proscribed, specifying the amount of pension paid to the pensioner after the 31st day of December, 1932, and requiring that person, within a specified period, to furnish in the prescribed form, particulars relating to the property comprised in the estate or in his possession, as the case may be, and the manner in which lie has disposed of, or intends to dispose of, that property.

The SPEAKER:

– Order. Upon the motion for the second reading of the bill, the honorable member must not refer to the clauses of the measure in detail.

Mr JAMES:

– I was merely attempting to show that the claim of some honorable members that pensioners exercise full control over their properties has no foundation in fact, because a penalty of £50 is imposed for failure to comply with the provisions of sub-section 7 of section 52b. I know of a case in which the valuer-General assessed the property of a deceased pensioner at £200. Yet the executors of that pensioner have offered the property for £53 and cannot sell it, and even if it is sold for that amount they may be compelled to refund the amount of the pension paid. For the benefit of the Commissioner for Pensions, who is sitting in the gallery, and so that he may not be obliged to read my speech in Hansard, I will say that at West Wallsend, where the mines are not working, where properties are being sold for from £30 to £50, some persons concerned are being asked by his department to make certain returns. I contend that the department should accept the market value of the property, and not the valuation of the ValuerGeneral or of the local governing authority, because their valuations are made for revenue-producing purposes. Many of us would jump at the chance of disposing of our properties at the value put upon them by the Valuer-General’s Department. No relief is provided in the bill in the event of the destruction of a pensioner’s property by fire. The bill provides -

Where a pensioner’s home is destroyed by tire, the Commissioner may consent to any insurance moneys received by the pensioner in respect of such destruction being used for Hie purpose of building a home in which the pensioner may reside.

There is no need to insert such a provision in the bill, because a similar provision is already in operation. If there is no desire on the part of the Government to bluff people from applying for old-age pensions, why not eliminate the property clauses from the act or, at least,, adopt the recommendations of the committee set up to report’ upon the property clauses? As a result of the operation of these iniquitous clauses, 11,349 pensioners: have surrendered their pensions.- Why does not the department say to thepensioner whose home is destroyed by fire that he shall have the right to accept the money due to him from the insurance - company, and to do what he likes with it? Why should a man 70 years of age be compelled to build .a new home? For how long would he enjoy it? Let him do as he likes with his. money. To me, this is distinct proof that it is the intention of the Government still to have a lien on the homes of pensioners. If the Government wanted to do the right thing, it would remove these sections from the’ act. The citizens of Australia have always been encouraged to practise thrift. M-any of them have heeded the advice1 that has been given to them, and with the money that they have saved have purchased homes that they could call their own. The working man has usually arrived at middle-age before he is in a position to build a decent cottage for himself. In future, they will seriously consider whether it is worth while to expend their savings on house property, when in fifteen years or less they will become pensioners and their property will come under the control of the Government; and iu many cases the money will be put to other uses. Realizing the subtle and callous way in which the bill has been framed, we can only conclude that it is the product of some one who is not actuated by feelings of sentiment, or considerations of justice towards the aged pioneers who have sacrificed so much in the development of this country.

Amendment of the act was expected in connexion with the demands made upon the relatives Of pensioners. The case has come under my notice of a young man who, from the date of his marriage ten years ago, before any attempt was made to compel children to contribute towards- the cost of, the pension of a parent, supported his widowed mother to an amount of 5s. a week. This honest old lady happened to mention in one of her returns that she was in receipt of this amount from her son, and the department immediately instituted inquiries which resulted in his being called upon to contribute 12s. 6d. a week towards the cost of his mother’s pension, notwithstanding the fact that he was married and had a family; and that his earnings amounted to only £7 a week, out of which he was already assisting an unemployed brother and another brother in hospital. Ex- periences of that sort prove that the Government is not considering those who have voluntarily made a considerable sacrifice. It is unfair to direct the payment of a larger sum by those who have shown their willingness to pay as much as they are able to contribute.

A gentleman of my acquaintance who was president of the Pensioners. Association in “Weston, in my electorate, had no relatives when he died, and the department lodged its claim against the beneficiaries under his will - a man and his wife who had been living with him, and had looked after him. I claim that they should have been treated on the same basis as relatives. I understand that it is the intention of the honorable member for Hindmarsh (Mr. Makin) to move an amendment providing that the Commissioner shall not review the rate of pension during such time as the pensioner resides in a house that he has transferred or mortgaged. That is only reasonable. The Government claims that it is giving the pensioner the right to deal with his property as he likes. The act has always provided that the property of a pensioner shall not be used as a set-off against the pension if he disposes of it to any of his children, and continues to live in it. Under the bill, however, whatever accrues from the property will be taken into account; and, if there is no return, the value of the property will be assessed if transferred to a relative who is not living with the pensioner. The Government will be asked by the party of which I am a member to consider amendments aimed at the further extension of the benefits of the act to all relatives, whether they are living with the pensioner or not. That would be only fair and equitable;

Dr EARLE PAGE:
Cowper

.- I wish first to congratulate the Government upon having brought down tho amendments in this bill that give concessions, especially those that deal with the homes of pensioners. It will be remembered that I raised this question during the debate on the Financial Relief Bill, and received from the Prime Minister (Mr. Lyons) the assurance that the Government would act in the immediate future if no action were taken on that measure. Upon that assurance I left for Queensland in the following week to keep an important engagement. I was surprised to learn, during my absence, that an attempt had been made, first, by sections of the press, to bring about a political crisis in connexion’ with the matter; and, secondly, to make it appear in this House that I had run away from a vote. I acted on the definite arrangement that I had made with the Prime Minister. I trusted the Government, as I hai every right to do, and it has brought down these amendments, which on many points meet my wishes. I do not, however, consider that justice has been done, because there are still certain pinpricks which could be removed at very little extra loss of revenue, while the administration would be much more simple and the minds of pensioners would be considerably eased. The point that I am mostly concerned about is, in the main, dealt with by the amendment foreshadowed by the honorable member for Hindmarsh (Mr. Makin). I agree with that honorable member that the three qualifications at which he aims should be removed from the act, or additional qualifications added.

I shall devote a few moments to the consideration of the general question whether the- qualification with respect to the home being allowed to remain in the possession of a pensioner -or his family is responsible for the large increased public expenditure that is suggested. When I made this proposal two months ago, different newspapers stated that the co3t of .adopting it would.be £1,250,000. I suggested that at least a certain margin of equity in the home should be left to the pensioner’s estate, and that the Government’s claim for pension actually paid should be made on any amount above that figure. The Government has gone further than I suggested .or thought was possible at the time, and says that the revenue will suffer to an amount of not more than £500,000. That is a very liberal estimate. I have had experience of the administration of the department extending over a period of seven years, and claim to know a very great deal about the causes of increased expenditure so far as pensions are concerned. I venture to say that the greatest cause of increased expenditure in the pensions department has been the raising of the rate of pension. It will be found that, although the provisions in regard to the homes of pensioners were not altered between 1912 and last year, there was very little variation in the expenditure on pensions year by year, except that due to increases of the rate of pension. Those marked increases have nothing whatever to do with the home provisions, because the home provisions have remained constant. The Budget Papers on page 140 contain a summary of figures relating to invalid and old-age pensions.

Mr Casey:

– Has the right honorable member plotted them into a curve?

Dr EARLE PAGE:

– The honorable member for Riverina (Mr. Nock) has taken out the actual percentages, and he assures me that they are correct. There have been certain increases of the rates of pensions at different periods - 2s. 6d. a week in 1915, 2s. 6d. in- 1919, 2s. 6d. in 1923, and 2s. 6d. in 1925. Between 1916 and 1917 the number of pensioners in each 10,000 of the population increased from 186 to 192. Between 1915 and 1916 the number increased from 184 to 186. Between 1917 and 1918 the number increased from 192 to 193. In 1919-20 there was a decrease from 191 to 189; but this was due to the fact that the absence of our men at the war and the many war pensions granted had eased the position. In 1925-26, when the pension really became worth while as an attraction to people who were not really indigent, it being 17s. 6d. in 1923 and £1 in 1925, the number of pensioners in each 10,000 of the population increased from 200 to 212. There was a tremendous increase of the figures at that time, which was only paralleled in the history of old-age pensioners by one other period, and that was during the great depression, when thousands of people were thrown out of work and many of’ them were forced to apply for pensions. , In 1922-23 the number of pensioners in each 10,000 of the population was 191, and in 1923-24 the number increased to 197. The average fortnightly pension was 33s. 8d. on the last day of the financial year of 1925, and 38s. 7d. in 1926. Those increases in the number of people applying for and receiving pensions. took place largely owing to the increase of pension. That, being so, why does -the Government refuse to act on the lines that I have suggested ? In 1915-16 the pensions increased to the extent of 3.3 per cent.,* yet between 1916 and 1918 the average increase of pension was about 7 per cent. The increase was somewhat similar from 1919 to 1921, from 1922 to 1925, and again from 1925 to 1927. “When the rate of pension became attractive, the number of pensions increased enormously, and the biggest factor last year in reducing the number of pensions was not so much the impositions and charges upon homes as it was the inquisition into the position of the relatives of pensioners. That was the big deterrent factor. Every one recognizes that rich people should undoubtedly care for their own old folk who brought them into the world and gave them a decent education and a start in life. ‘ The home property provisions were put into the act by a Labour government in 1912. They remained unaltered until 1932, and were amended by this Government last year. Up to last year the home itself was never attachable, but last year it became attachable. I am not opposed to relatives contributing towards the cost of pensioners provided that they can afford it. I regret that a national insurance scheme has not been established, at any rate so far as -sickness and invalidity are concerned. I outlined a scheme in this House in 1928 ; and had it then been put into operation, the Government this financial year would have been relieved of a burden of at least £1,500,000.

Mr. Rosevear. The right honorable member waa not anxious to put that scheme into operation.

Dr EARLE PAGE:

– I moved it in this House, and I worked as hard as any one to give effect to it. Unfortunately, my efforts were unsuccessful, although I left all the facts and data with the incoming Labour Government, which, although it was in power for two years, made no effort to put the scheme into operation. Up to 1932-33, invalid and old-age pensioners increased by approximately 7,000 a year. The death rate reveals a reduction of something like 3,000 pensions, and had a scheme of national insurance against sickness been in operation during the last four years, the Government would have made a considerable saving.

I shall support, the Government’s proposals with the exception of sub-clause 5 of clause 3 relating to property. I regret that the Attorney-General, in his effort to bring about equity and to overcome anomalies has created other anomalies on account of his meticulous attention to the proposed amendments. I should like the qualifications in respect of property enlarged. At present, the only persons who may obtain relief under that provision are, first, a beneficiary who is a pensioner, secondly, a beneficiary in necessitous circumstances, and, thirdly, a beneficiary who is a relative residing at the home of the pensioner as a member of the family. Those are the three classes of persons who can benefit by the will of a pensioner under the property provision. I venture to say that at least 80 per cent, of the homes of old-age pensioners have been purchased by a combined effort on the part of the parents and their children. Many young people have helped their parents to obtain a home, and, of course, when the children marry they have had to obtain homes elsewhere, because no woman likes to live with her mother-in-law. “When that happens, these folk are disqualified under the law from inheriting the home without compensating the Government for the pension paid.

It is of no use the Assistant Treasurer (Mr. Casey) saying that it would cost thousands of pounds more to give effect to my request, or the Attorney-General saying that the request has been already met. We know from experience that, though the Deputy Commissioners of

Pensions themselves desire to administer the act sympathetically, they are bound by the strict letter of the law, and it is our duty, therefore, to make the law so plain that every one may understand it. I desire to pay a tribute to the Deputy Commissioners with whom I have had dealings in New. South Wales. They have always exhibited a desire to ‘be helpful, and to administer the act as liberally as possible. I congratulate the Government upon having brought down a bill which achieves so much. It is a tremendous advance on what we- had before, and I do not think that the cost of these concessions will be so great as some honorable members are inclined to think.

In one particular it seems to me that the Government, in its desire to do justice, has created an anomaly. The bill provides that relatives who have contributed to the support of a pensioner may, on the death of the pensioner be recouped to twice the value of their contribution out of the estate which the pensioner leaves. That provision was inserted, as the Attorney-General informed us, to encourage relatives to contribute towards the support of their old people. The benefit of this provision is felt, however, only when the pensioner has property to leave. The son who is sufficiently well off to buy a house for his aged parents benefits under this provision, while the one “who is not able to do this, but who still contributes to their support, receives no compensation at all. We can sometimes search too far afield after the principles of equity, and thus miss the obvious which lies close to our hands.

Mr BLAKELEY:
Darling

.- I cannot join with the right honorable member for Cowper (Dr. Earle Page) in congratulating the Government on this bill, or on any of its pensions legislation. All of it has been retrograde and harsh, and has caused pain and anxiety, not only to the pensioners, but to their relatives as well. It is extraordinary that the Government is incapable of bringing any legislation before this Parliament without having shortly afterwards to muddle around trying to patch it up. It would almost seem as if the Attorney-General (Mr. Latham) delights in getting hold of a piece of legislation, and moulding it nearer to his heart’s desire about every other day. In this case, the need for a right-about-face by the Government was made clear by the refusal of so many of its own supporters to knuckle down while the. Government pursued its f oolish and futile policy. It is certainly wrong for the Government to persist with legislation of this kind, which should never have been put into operation. Honorable members on this side of the House warned the Government, when it introduced its amendments of the pension law last year, that it was trying to do more than it could accomplish. Now the Government has lifted part of the burden which it then imposed, which merely serves to emphasize the stupidity of leaving the rest of the burden still ,to be borne by the pensioners. The people of Australia will not tolerate legislation of this kind. Attempts may be made to enforce it, but legislation which is not accepted by the people cannot be administered. Very shortly after the 1932 amending act was passed, the threat to enforce some of its harsher ‘provisions caused such a revulsion of feeling among the people as a whole, that the Government realized it would not be wise to try ,to put the whole of it into operation. The Government continues to muddle along, apparently not knowing where it is going, but allowing itself to be pulled this way and that by conflicting groups of its own supporters. It is humiliating that the Commonwealth should be ruled by so vacillating a government.

I protest against the action of the Government in first introducing pensions legislation of the kind it put through Parliament in 1932, and I again protest against its decision to retain some of the more objectionable features of that legislation. Politically, it suits this party very well for the Government to continue as it is doing. It would suit us if no amending legislation had been brought down this year, because no Government could hope to succeed at the elections with such legislation standing to its discredit on the statute-book. However, we have no desire to make political capital out of a measure which is so intrinsically objectionable. The Minister for Trade and Commerce (Mr. Stewart) and the Postmaster-General (Mr. Parkhill) may laugh, but they can- . not deny that this amending bill owes its appearance to the political pressure which has been ‘brought to bear on the Government. Indeed, I am inclined to believe that those two Ministers were themselves largely responsible for inducing the Government to bring in & bill to amend legislation which has caused so much pain and hardship among a deserving section of the people.

Mr BEASLEY:
West Sydney

– As the contents of the bill have been very fully discussed by those who have participated in the debate, it is not my intention to dwell upon them at any great _ length. However, because of the importance of this legislation, it is desirable that J should say a few words with regard to it. I am satisfied that never before in the history of an Australian Parliament has any legislation reflected so adversely upon those responsible for it as do the outrageous provisions which deal with the property ; rights of pensioners. It has always been regarded as the proud boast of British communities that “ a man’s home is his castle,” and every citizen is encouraged in every way to acquire a home of his own. It is generally admitted that those who are thrifty enough to provide homes for themselves are deserving of special consideration. Yet in this instance pensioners who are home-owners are subjected to drastic treatment compared with that meted out to those who do not own their homes.

In reply to an interjection by the honorable member for Ballarat (Mr. McGrath) asking if the bill was not a complete back-down on the part of the Government in regard to the property clauses of the pensions legislation, the Attorney-General (Mr. Latham) said that it was the opinion of the Government that the principles underlying the property clauses are .sound. As the Attorney-General undoubtedly speaks for the Government, it would appear that Cabinet considers the seizure of pensioner’s homes after their death as a sound principle which should be maintained. ‘

The minor concessions which are given in this bill were granted grudgingly, and only after pressure had been applied by the community generally. The attack by the Government upon the privileges of pensioners has directed the sympathy of the general public towards them, and many thousands who at present are not at, all likely applicants for pensions feel most resentful. They realize the great injustice inflicted upon these people. The whole spirit of this legislation is anti-

Australian, and I am confident from my contact with those who are not pensioners that at the next election there will be a strong revulsion of feeling against candidates who support the action of the Government in this respect.

A close examination of the bill reveals _ that very little relief is being granted to pensioners. The provision that a property may be passed on to a relative provided that he is living with his parents at the time of his or her death is of little practical value, because only a small percentage of children live with their pensioner parents. There can be no doubt that before giving that questionable concession, the Government thoroughly investigated the possibilities, and made sure that it was conceding very little.

However, in face of strong agitation by so many sections of the community, and because of the promise given to - the Country party, under coercion during the early part of this session, the Government grudgingly gave that slight con.cession. My colleagues and I are not satisfied with what has been clone, as we consider that the whole of the restrictions on a pensioner’s property should be withdrawn. Evidently the interpretation of values, as set out in proposed new section 52d, will result in a great divergence of opinion. I know that the values of the Valuer-General of New South Wales are almost invariably 25 per cent, above present day market values. It is dangerous to leave the Commissioner alone to determine whether a sale is bona -fide and for value; for there is the possibility that after several years have passed, and perhaps after the purchaser of the property has resold it, action may be taken against him to recover an amount allegedly due to the department to compensate for payments to a pensioner during his lifetime.

The House must be generally dis- appointed with the attitude of the Government in this matter. Although my colleagues and I did not expect very much, we thought that at least there_ would have been a full repeal of all” clauses -dealing with the seizure of a pensioner’s property. I am forced to the conclusion that there is some sinister reason underlying the Government’s reluctance to take that action.

Honorable members of this group have been charged with having incited pensioners to relinquish their pensions rather than allow the Government to obtain a hold over their property. That charge is completely exploded by the fact that the number of pensions surrendered in Victoria far exceeds the numbers ‘ surrendered in New South Wales. My colleagues and I have always urged pensioners not to surrender their pensions because of the demand of the Government that they should sign what is known as the white card, for all along we have felt that this legislation was topheavy, and too expensive to administer, and that, sooner or later, the Government would be forced to abandon it. Apparently the chief purpose of the Government in this matter is to discourage applicants for pensions; also to reduce the number of pensioners. Figures that were quoted by .the Attorney-General show that cancelled pensions and the relatively fewer applicants for pensions approximate 26,000, and that seems to have been the main concern of the Government in framing this legislation. It is a wrong attitude, entirely contrary to the wishes of the majority of the people of this country. We are very disappointed. We did think that at least the Government would bring down legislation to wipe out entirely these objectionable provisions. If it refuses to do so, as seems to be its intention, we shall continue to encourage the growth of the pensioners’ organizations through’out the length and breadth of Australia. In the future these organizations will be powerful factors in determining the fate of governments. Prior to their establishment, advantage had been taken of the pensioners because of their unorganized state, but it is -our intention to impress upon them the necessity for keeping themselves up to their full strength and for extending their influence whenever and wherever that is possible, so that at the proper time they will be able to support effectively those parliamentary candidates who are prepared to wipe out these obnoxious provisions in their entirety.

Mr FENTON:
Maribyrnong

– A ruling has been given by the Pensions Department that wherever it can be shown that the children of pensioners have contributed to the building and maintenance of the. homes of their parents, they will not, upon their parents’ demise, be dispossessed of the homes in which they had lived. In numerous instances I have assured children who were deeply concerned about this matter that they had no need to be apprehensive, because they would not be dispossessed of homes when their parents passed away. We are all prepared to do whatever we can for the comfort of our oldage pensioners. I am definitely of opinion that the day is not far distant when all the privileges that were enjoyed by these pensioners from 1912 to 1932, will be restored to them. At that time they were at liberty to live in their own homes without their pensions being affected in any way. But if, to-night, we cannot get from the Government all that we want, let us take what we can get. I am convinced that in the very near future all the privileges previously enjoyed by old-age pensioners in Australia will be. restored to them without any restrictions whatsoever.

Mr WATKINS:
Newcastle

– I wish I could share the views that have just been expressed by the honorable member for Maribyrnong (Mr. Fenton). The truth is that all the property clauses contained in existing legislation are embodied in this bill with certain modifications. I regret that we are attempting to throw on the Commissioner of Pensions the onus of becoming a valuer of property, and of ascertaining what amount the children of deceased pensioners have contributed to their parents’ maintenance. The folly of some of these provisions is exemplified by the difficulties that would be experienced in attempting to ascertain the amount which children had provided for the support of their parents up till the time of their deaths. These provisions place the recipients of pensions in an utterly false position. We should establish a compulsory insurance scheme. It is bound to come in the near future. This measure will have the effect of making pensions appear more in the light of a charity than of a right. I hope that the Minister will remove the obnoxious provisions to which reference has been made, and allow the beneficiaries of deceased pensioners to retain the property of those pensioners. The bill practically confines the relief which is to be granted under it, to junior children. If those children marry, no matter what help they may . have previously given to. their parents, it will not be taken into account. I hope the Government will recognize the anomalies that the measure creates, and that it will allow pensioners to bequeath to their children the homes in which they - have lived and to the maintenance of which those children may have materially contributed.

Mr MARTENS:
Herbert

.- I am disappointed with the amendments that have been brought forward -by the Government in this bill. Four or five weeks ago I mentioned the case of a certain couple who were living apart without having secured a judicial separation. On that occasion the Minister assured me that there was ample provision in the act to meet such cases. I challenged that statement at the time. I thought that the’ Minister might haveadvised us of the position. If he is as certain to-night as he was on the last occasion that my statement is wrong, he might say whether he has instructed the Commissioner not to take cognizance of the provision that in the case of a man and his wife who are living apart without a legal separation, the value of the property owned by either shall be halved so that the pension of each may be reduced by a certain amount. The Minister definitely stated that that could be overcome by administrative act.

On the occasion to which I have referred I also raised the question of the withholding of a pension from a person who has been living in Australia for many years, has grown old in the service of the people, is a naturalized subject of His Majesty the King, and possesses all other citizen rights. I regret that no mention has been made of that. It would be interesting to see what would he left if all the “ ifs “ and “ buts “ were removed from the speech delivered by the AttorneyGeneral (Mr. Latham).

It has been suggested that the property provisions of the act have been practically wiped out. There is one which I particulary regret has not; it is that which was referred to by the right honorable member for Cowper (Dr. Earle Page). I feel sure that every honorable member would like the Government to forego the accumulated claims that lie against the property of pensioners on account of payments made between the 31st December, 1932, and the passing of this act. The cost involved would not be great, but considerable relief would be felt by the Commissioner and there would be an easing of the minds of the old people of Australia, around whose necks this debt hangs. It is of no use to say that it is not a debt, and cannot be recovered. Clause 9 makes the following provision : -

Upon- the commencement of this act every charge upon property created under section fifty-two B of the principal act shall cease to exist, but the amount of the charge shall be a debt due to the Commonwealth, and. may be recovered by tho Commissioner in the maimer, and subject to the terms and conditions, provided under section three of this act for tho recovery of amounts of pension repayable to the Commonwealth.

Sub-section 3 of the proposed new section 52e lays it down that -

The amount of pension” repayable under this section shall be a debt due te the Commonwealth, and shall be recoverable by the Commissioner in any court of competent jurisdiction.

That will be the law of this Parliament, and the Commissioner will have to observe it. I realize that he has certain discretionary powers, but he is exceedingly careful in the use of them. The administration cannot be blamed if honorable members are not able to obtain what they regard as fair and just decisions. My experience of the Commissioner, and of the deputy commissioners in the States, justifies my saying that they do everything it is within their power to do, and that they are quite willing to stretch a point where that is possible.

The right honorable member for Cowper has said that he is satisfied the Go- vernment has gone a long way in the direction of adopting the suggestions that he made a few weeks ago. The general impression caused throughout Australia by the statement made on behalf of the Government, was that the legislation which it was intended to bring down before this House went into recess, would have the desired effect. The entire removal of the property provisions from the act would not have involved the loss of a very great deal of revenue, but it would have eased the minds of the pensioners and made less difficult the administration throughout the Commonwealth.

The amendments now proposed are largely a sham. One of them provides that the father and mother of a pensioner may be entitled to his property. Surely that must refer to an invalid pensioner, and not to an old-age pensioner. The honorable member for Maribyrnong (Mr. Fenton) said that constituents of his had written to him advising that they had been asked to state the extent to which they had assisted in” providing a home for their parents. I asked him if he believed that the administration would accept their word as to the extent to which they had been responsible. I do not believe that it would. However truthful they might be, the tendency would be to overstate the amount. The difficulty is, that children who have helped to provide homes have no concrete proof of that fact in the form of receipts showing what they have paid. I know of homes that were built upon ground bought by members of a family who in the eyes of the law have no claim with respect to it. The mother holds the deed of grant in fee simple, and not the person who purchased the land and built the home upon it because of devotion for the parent.

A requirement of one of the amendments is that a child to whom property is willed must have lived with the pensioner to be entitled to possession of it. That principle is entirely wrong. The right to will the property should be vested in the parent. A property may be worth £200 and yet realize at auction only the amount of the pension charge. In such a case the department would be recouped the expense of the pension, but the beneficiary would get nothing. It is of no use to say that such conditions will not obtain. If the law is observed, they will obtain. If it is not observed, it might as well be wiped out.

The administration is sometimes charged with having acted harshly, and doubtless it has; but it is always within the law. The Deputy Commissioner uses his judgment as to what contribution a child can make towards the pension of the parent. Within the lastfew days I have dealt with the case of an old lady at Ayr, who has in Western Australia a daughter who receives a salary of £5 a week. When the Deputy Commissioner was informed of what the daughter was earning, he advised her that, in Lis opinion, she was ‘in a position to contribute something towards her mother’s upkeep. I am happy to say that the Commissioner reversed that decision. I do not blame the Deputy Commissioner. I believe that he appreciated the fact that something might be “put over him”, and was not in a position to make the necessary inquiries to assure himself, if ho had any doubt. He would not take the risk of saying that this girl could not contribute towards the upkeep of her mother.

Mr CASEY:
Assistant Treasurer · Corio · UAP

– It would need a good deal of imagination on the part of one who in this debate listened only to the evidence of his ears, to realize that at the present time Australia has by far the most generous pensions system in the world, and that by this measure the Government is further liberalizing that system.

The relevant figures have already been given by the Attorney-General (Mr. Latham). In 1912-13, the amount paid in invalid and old-age pensions was £2,301,000, and in 1932-33, it was £10,771,000. Put in another way, in 1922-23, invalid and old-age pensions absorbed 32 per cent, of all federal direct taxation, and in 1932-33 they absorbed 78 per cent, of such taxation. By “ federal direct taxation “ I mean, income tax, land tax, death duties, entertainments tax, and super tax. Those are most significant figures.

A great deal of attention has been directed at clause 2 of the bill. It ‘ provides that the pensioner must notify a transfer of property or mortgage within 30 days. The object of that provision is to ensure that the department is made aware of such transactions within reasonable , time so that the rates of pensions- may be reviewed and the pensioners not wrongfully overpaid, as has , happened in certain circumstances..’ We have all had experience of the heart-burnings of pensioners when they have been called upon to refund over-payments. There are now no restrictions at all on property transactions. The pensioner can do what he likes with his property. It is, however, necessary to protect the department when transactions have been entered into with a view to circumventing the law, and that is why it is required that any transaction shall be reported within 30 days: If it is revealed that an attempt has. be»:n made to evade the act the value of the property is taken into account, even although it may have been transferred, and held against the rate of pension of the pensioner. That . is some deterrent against fraud. Sub-clause 4, of clause 2, refers to the intention of the Government to pursue Commonwealth debt into the hands of a person who by fraudulent action acquires a pensioner’s property. That provision, of course, safeguards the pensioner against fraudulent transactions, because a person who is otherwise than a bona’ fide buyer and who accepts the transfer of a pensioner’s property, is liable, at the pensioner’s death, to the Commonwealth’s claim against the* estate.

Mr Beasley:

– Is it not remarkable that this question has been raised after the property provision has been in the act for so many-years?

Mr CASEY:

– The scheme of pensions is being radically reviewed. It is really a new system, and this is a simple provision which is essentially applicable as one of the few remedies against fraud.

Mr. Beasley. Has the Assistant Treasurer any evidence of fraud?

Mr CASEY:

– +We have evidence almost daily of attempted fraud in respect of property. The question has arisen as to how the value ,of properties are to be determined some years after the actual transfer has taken i place. In these instances the Commissioner will bring the case before the court, which will determine the value of the property at the time of the transfer. I assure the honorable member that the Commissioner will not pursue these cases unless he has definite evidence of fraud. If any person buys a pensioner’s property at, say, bargain prices on account of the pensioner wishing to dispose of it immediately, that is not necessarily fraud.

The right honorable member for Cowper (Dr. Earle Page) made certain remarks which utterly surprised me, and I think a large number of honorable members also. He said, as he has said in the past, that the Government, in introducing this bill, did so not from considerations that the revenue would otherwise be adversely affected, but for some other motive, by inference, spleen or spite.

Dr Earle Page:

– I said nothing of the sort.

Mr CASEY:

– I made a note of what the right honorable member said, and he suggested that the Government had some motive behind its action other than the question of money. That was a most unworthy slur cast on the members of the Government.

Dr EARLE PAGE:

– I made no such suggestion. I did not use the word “spleen.”

Mr CASEY:

– I have not accused the right honorable member of referring to spleen, but one drew that inference from his observations. He suggested that the liberalization of the property provisions would make no difference to the Government from the point of view of revenue, and that he did not think that the question of money was involved. In saying that, he runs completely counter to the opinions of the Commissioner of Pensions and the Deputy Commissioner of Pensions, who went thoroughly into this matter. It seems clear that the right honorable gentleman has never considered the cost of the various degrees of liberalization in this measure. That being so, his suggestion that the Government is holding back from further liberalizing the provisions of the Invalid and Old-age Pensions Act, is totally unwarranted.

Mr Martens:

– How much money is involved in this legislation?

Mr CASEY:

– The Attorney-General (Mr. Latham) has said that it will probably cost £500,000 a year. It is completely idle for the right honorable gentleman to suggest that it will not cost hundreds of thousands of pounds. This legislation was framed by men, including public servants, who have spent a life-time in dealing with these matters, and I suggest that the right honorable member for Cowper, in referring to the motive behind this legislation, should have paid a little more regard to the facts. He also referred to the national insurance scheme of 1928, and said that, had it been in operation since that time, the saving to the Government would have been £1,500,000. He did not state the reason for the dropping of the bill in 1928 ; but it was dropped because of the absolute impossibility of financing it in the early stages, even during years of prosperity.

Dr Earle Page:

– The Government brought the scheme down in the House.

Mr CASEY:

– I have read the secondreading speech of the right honorable member on that subject, and also the report of the royal commission and other papers, which reveal the fact that the national insurance scheme was not given effect because of the. impossibility of financing it. Several honorable members have referred to the question of sons of pensioners having either purchased wholly, or contributed in part towards the purchase of, their parents’ homes, and that there should be some specific reference in the bill to the fact that the sons in those circumstances, notwithstanding other conditions, should inherit the home. The honorable member for Hunter (Mr. James), and other honorable members specifically mentioned this matter. I assure them that, provided the Commissioner is satisfied that the children have made a substantial contribution towards the home, that will be taken into account under the hardship clause. I suggest that it is more in the interests of the pensioners themselves to leave the legislation in its present form than to have specifically enacted in the act a provision covering this case which would have to be hedged round with numerous conditions in order to carry out its intention.

It would be more in the pensioners’ interests if this matter were left to tbe discretion of the Commissioner on the basis of a hardship case. A number of points have been raised which, I think, can be more appropriately dealt with at the committee stage.

Question resolved in the affirmative.

Bill read a second time and committed pro forma.

page 5823

TRADE COMMISSIONERS BILL 1933

Second Reading

Mr STEWART:
Minister for Commerce · Parramatta · UAP

. - I move -

That the bill be now read a second time.

For some time past the Government has been giving attention to the question of Australian trade representation overseas, for it is realized that the future wellbeing of the Commonwealth lies largely in consolidating and increasing the export of our products to markets already established, and also in obtaining a footing in overseas countries were Australian products have not penetrated to an extent comparable with the goods of other countries. In pursuance of this aim the Government c’onsiders that a trade commissioner service should be established, but before proceeding with the details of the proposals covered by the present bill, it may be interesting to furnish particulars of the trade representation which other countries have deemed it necessary to set up.

Great Britain and Canada have established trade commissioners in the dominions and in foreign countries, and their overseas services are now extensive. Great Britain has six first-class and twelve second-class commissionerships and 32 other representatives of lesser status dispersed throughout the world, while Canada has 34 commissioners in 27 different countries. The United States of America and other foreign countries have established trade representatives in various centres. The United States of America has 32 trade commission offices, and France has more than 60 “ commercial attaches “ in various countries.’

Since 1929, an Australian trade commissioner has been established in Canada. Trade matters in the United Kingdom are attended to by the High Commissioner’s Office, London, whilst there is an agent stationed in Paris who is under the control of the High Commissioner’s Office. In addition, the office of the CommissionerGeneral for Australia, New York, is available in connexion with trade matters affecting the United States of America. In respect of all other countries we have had to avail ourselves of the services of British trade officials. As a result of the Imperial Economic Conference in 1923, the British Government granted Australia and other dominions the privilege of enlisting the services of British officials in British and foreign countries. Whilst these officials have rendered invaluable aid, particularly in Eastern countries, the stage has been reached at which Australia can no longer expect a large pant of their time to be devoted to the promotion of its trade.

It is felt that the time has now arrived when the only efficient and satisfactory method of commercial representation abroad lies in the setting up of our own service of trade commissioners. The work which has been carried out by our trade commissioner in Canada illustrates the value of such appointments. The officer concerned, Mr. L. R. Macgregor, played a large part in the negotiations relating to the Australian-Canadian Trade Treaty, and he has been in a position to keep constant watch over the working of the agreement from the Canadian end and to advise the Commonwealth Government in regard to suggested amendments to that treaty. The commissioner has examined market prospects for various commodities in which Australia is interested. He is also in close contact with Canadian Ministers and officials, and is thus able to notify the Commonwealth Government immediately of proposed tariff changes, of the provisions of any trade treaties between Canada and other countries which may adversely affect Australia’s interests, and of the competition which Australia may expect from other countries trading with Canada. By reason of his office, he has done much to cultivate goodwill towards Australia on tha part of the

Canadian Federal and Provincial Governments, public bodies and commercial interests. He has, by means of speaking campaigns and publicity, helped “to focus interest on Australia and Australian products.

The present bill .is designed to extend the principle of overseas representation, and it is proposed, in the first place, to send two commissioners to the East - one to Batavia, Netherlands East Indies, and one to Shanghai or Hong Kong, China, and one commissioner to New Zealand. The East is geographically the natural market for Australian goods, but, notwithstanding this, we are faced with the keenest competition in marketing our products there and in extending our trade. It is vital, therefore, that exporters and potential exporters should be in possession of the fullest information relative, not only to the scope, but also to the peculiarities of the market. In more than one instance my department has had questions before it which could only be adequately resolved by investigations on the spot. An officer of the department who recently visited the East, and surveyed the markets there, strongly recommended the appointment of trade commissioners.

With a view to stimulating interest in Eastern trade, and securing the cooperation of commercial interests, a conference; was held in Sydney in February, 1933, at which were present, representatives of the State Governments, Chambers of Commerce, Chambers of Manufactures, shipping interests and others engaged in trade with Eastern countries. The conference adopted a resolution that a recommendation be made to the Commonwealth Government that the principle of official representation in the East be approved.

As a result of the conference, State advisory committees, representative of the State Governments and various commercial interests, were set up with a federal body to which representatives are appointed from the State committees and the Commonwealth Government. Support was received for the proposals from these State committees, and, at a recent meeting of the Federal Committee, a resolution was passed supporting immediate appointments in Batavia and Shanghai.

Other countries are fully alive to the need for direct trade representation in Eastern countries, and Australia can no longer afford to lag behind. In Batavia there are located Government trade representatives, excluding consular services, of Great Britain, Canada, the United States of America, J apan, France, Germany and China, whilst South Africa is now considering the making of an appointment.

The trade between the Netherlands East Indies and Australia is already both valuable and extensive, and it can be assumed that, with a slight improvement in the world’s economic conditions, the trade between the two countries could be considerably augmented. The British Consul-General, the British commercial agent, and the Canadian Trade Commissioner in Batavia, have expressed the opinion that Australian trade interests in the Netherlands East Indies warrant the appointment of an official trade representative. It is assured that such an appointment would be well received by the Netherlands Indian Government, not only from the commercial view-point, but also, from the financial, political, fiscal and economic aspects of trade between the two countries.

There are, at the moment, several important matters vitally affecting Australia’s trade with Netherlands India, which can only be effectively dealt with by a direct representative in Batavia. These are, briefly -

  1. Trade relations between South Africa and Netherlands India.
  2. The extension of existing shipping services between’ Australian ports and Batavia, e.g., Singapore to Penang, Belawan Deli, Rangoon, Calcutta, Madras and Singapore.
  3. Japanese trade with Netherlands India.
  4. Reciprocal trade between Australia and Netherlands India.
  5. Publicity, press paragraphs and propaganda on behalf of Australia.

The visit of the Nieuw Holland, as a show boat had the effect of improving the existing friendly relationship between Australia and Netherlands India, and it is considered that the presence of an Australian trade commissioner at Batavia will increase the feeling of goodwill and materially consolidate our trade prospects.

In regard to China, the volume of trade from Australia should be capable of great expansion. The importance which other countries place in this market is illustrated by the fact that at Shanghai, Great Britain, Canada, the United States of America, Germany, Prance and Japan all have official trade representation, whilst at Hong Kong there are British, Canadian and American trade officials.

It is proposed to immediately appoint an Australian trade commissioner either at Shanghai or at Hong Kong. A final decision regarding which of these locations will be selected will be made shortly. Australian business houses are not well represented in these areas, and the peculiarities of the markets are such that the services of an official trade representative would undoubtedly be of material assistance to Australian exporters.

Australians generally in the East are not so highly regarded as they might be. Certain advertisements which have been inserted by persons in the Chinese press from time to time have been worded in a manner which would indicate that they are acting officially on behalf of Australian trade. The results of the activities of such persons have proved distinctly detrimental to our trade interests and have created a. bad impression generally. A properly accredited trade commissioner is needed to apply corrective action in this direction, and restore confidence generally.

Present indications are that Shanghai will eventually become tho most important manufacturing centre in China, and, as such, will require to import large quantities of raw material which cannot be produced locally. Australia should be in the position to pave the way for this potential demand and to consolidate her interests so that full advantage may be taken of the prospective increased Chinese demand for foreign products. Hong Kong is the centre of considerable commercial activities, and there is a demand in that centre for products which Australia is able to “supply. To ensure that we obtain ali adequate share of the trade, it is essential to have direct representation at either Shanghai or Hong Kong by means of an accredited trade commissioner. ;

In regard to New Zealand, the recent trade negotiations with that country illustrated the need for the appointment of a trade commissioner. Our exports to that dominion cover the whole range of our export classifications, being more diversified than our exports to any other country, as New Zealand is the natural market for many classes of manufactured goods, as well as certain primary products. During recent years we have maintained and improved our position in the New Zealand market, and to-day we are her third largest supplier. On the other hand, the adverse corporate attitude to Australia is a source of danger, two recent examples being the embargo against our fruit and vegetables, and the feeling against the diversion of trade from the United Kingdom to Australia.

Both the United Kingdom and Canada are represented in New Zealand, whilst New Zealand has two trade representatives in Australia. Senator MassyGreene, in his report to the Government on his return as leader of. the Australian Trade. Delegation to New Zealand, stressed - the necessity for Australia to be properly and continuously represented in that dominion. He indicated that trade with New Zealand should be fostered, a3 the dominion is Australia’s most important near-home market. He emphasized the importance of an appointee with such status as would ensure him easily accessible entree to political, diplomatic and commercial circles, and so serve to overcome the inimical feeling which, unfortunately, was found to exist.

It should, perhaps, be made clear that the present bill is not being introduced solely for the purpose of validating appointments of trade commissioners to Batavia, Shanghai, or Hong Kong, and New Zealand. It is proposed, as a matter of policy, to introduce an adequate system of Australian trade representation in overseas .countries where our trade prospects so warrant. The appointments referred to are the first which it is proposed to make, as it is considered that they are immediately necessary. Later it may be desirable to make further appointments to other countries.

The question of whether trade commissioners should be selected from the commercial world, or from the ranks > of the Commonwealth Public Service, has been given very careful consideration, and the present bill is designed to enable suitable men to be appointed from either source. It is proposed that the first appointees shall be drawn from the commercial world, and naturally they will be men of proved qualifications and high standing. Ah assistant trade commissioner will also be appointed to each office, and it is proposed to recruit these men from the Commonwealth Public Service, so that they may undergo a period of training with the trade commissioners, and qualify at a later stage for appointment as trade commissioners. In this manner a first class personnel will be built up, and will be available to carry out a vigorous policy of expansion in connexion with Australia’s export trade.

Competition for trade in overseas countries has become se keen that the Commonwealth cannot afford to miss any opportunities through lack of adequate direct representation overseas. Furthermore, this representation must be of a permanent nature and the future programme mapped out on a basis which will yield the best results to Australia as a whole. It should be clearly understood that trade commissioners are not to act in the capacity of salesmen. Their duties will be in the wider province of the commercial, trading, financial, and general interests of the Commonwealth in the countries in which they are located. The trade commissioner will furnish all information which is required by Australian exporters, and. fortified with the knowledge which they thus receive, exporters themselves will be in the position properly to exploit the market in the manner which they consider most suited to their needs. The service which trade commissioners will render will be foi- the individual benefit of Australian exporters, and for the collective good of Australian trade.

Mr FORDE:
Capricornia

.- I have read this bill in the brief period that it has been in my possession, and I can see no reason why it should be opposed-. It will give legislative backing to the appointment of trade .commissioners, and it conserves to them the indisputable rights of tenure, except removal by the Governor-General on the grounds of proved misbehaviour or incapacity. Clause 5 reads -

  1. A trade commissioner or an assistant trade commissioner to whom the last preceding section applies shall not be removed from office except by the Governor-General on the grounds of proved misbehaviour or incapacity.
  2. A trade commissioner or assistant trade commissioner shall be deemed to have vacated his office if he becomes bankrupt or insolvent, or compounds with his creditors or makes an assignment of his’ salary for their benefit.

I can see many good reasons why some tenure of office should be guaranteed to the occupant of such a position because necessarily, in order to accept it for a period of five years, he must sever his other business associations or appointments, and if for some inadequate reason he was removed from office he would be subjected to hardship.

I was a member of the Government that appointed Mr. R. L. MacGregOr as Trade Commissioner in Canada. At the time Mr. MacGregor occupied a position as Director of Marketing in Queensland for which he was paid £1,500 a year and travelling expenses. So far as was known, he would not have had much difficulty in securing a renewal of that appointment for a further five years. Consequently, it was with some reluctance that he accepted the. position in Canada, not knowing what might happen to him in the event of a change of government. A contract was given to him for a specific period. I am not in a position to give an opinion as to the validity of that contract in the absence of legislation of this nature. It is pleasing to hear the Minister for Commerce (Mr. Stewart) say that Mr. MacGregor has proved himself by doing excellent work in Canada, having played an important part in connexion with the successful negotiations in connexion with the Ottawa agreement. He also played a prominent part in assisting the then Minister for Markets (Mr. Parker Moloney) to negotiate the trade agreement between Canada and Australia. Knowing Mr. MacGregor personally and having had many opportunities to witness the wonderful work that he performed in Queensland in organizing primary producers’ pool boards, on which he was the Government representative, I expected big things of him, and am glad that my expectations have been realized.

I am pleased that clause 6 makes provision for officers of the Public Service to be appointed as trade commissioners or assistant trade commissioners. While it is possible that occasionally there may be difficulty in finding suitable public servants for the positions, I hope that the Minister will have young men trained in his department so that they may qualify at least for appointment as assistant trade commissioners. Frequently appointments are made from the business world of men who have failed in their own enterprises, but who are selected because of their social or political influence. I hope that the Minister will frown upon such procedure in this instance. Often it is possible to find bright young men in departments who would well repay careful training; and every encouragement should be given to officers of the Public Service to qualify for these positions.

Undoubtedly there are possibilities of developing trade with the East. We have only to regard our export of wool to China and Japan and the export of other products to the Netherlands East Indies to realize that great possibilities exist to’ extend our trade with those countries. New Zealand is an important and growing dominion, and an able representative of Australia should be appointed to that country. Although these appointments will be of an experimental nature, provided the right men are selected the expenditure by the Government will be well repaid. Experience teaches that some of the appointments of Australian trade representatives in China have not been very successful, therefore* a great responsibility rests upon the Minister and the Government to choose men of the right class.

Mr Maxwell:

– Will the honorable member indicate how many are on the staff of the Canadian Trade Commissioner ?

Mr FORDE:

– There are the Trade Commissioner, an assistant, and a couple of junior officers. The Minister has not stated what will be the cost of these establishments.

Mr STEWART:

– The Government expects that each establishment will cost about £5,000 a year.

Mr FORDE:

– I hope that the Minister will see that cadets are appointed to the Department of Commerce who possess the necessary qualifications to be trained to occupy these positions.

Mr Stewart:

– We already have some officers who would be suitable, and we purpose training others.

Mr FORDE:

– As the bill is needed and it is non-contentious it will have the support of my party.

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– I. am glad that, at last, the Government has taken steps to secure commercial representation for Australia overseas, but I am sorry that it is being limited to Malaya, the Netherlands East Indies, the China Coast and New Zealand. It appears to me that great possibilities exist for developing our trade with other part3 of the world, particularly in India and Egypt. I have received inquiries from both these parts of the Empire