15th Parliament · 2nd Session
Me. Speaker (Hon. G. J. Bell) took the chair at 11 a.m., and read prayers.
– Can the Minister for Supply and Developmentindicate what progress has been made with the plan to grow and treat flax in the Commonwealth, including Tasmania?
– Considerable progress has been made with the development of the flax industry in this country. Within the next day or two I hope to make a statement on the subject.
– Has the attention of the Minister for the Army been drawn to a statement in this morning’s press of a conflict of opinion concerning recruiting between the General Officer commanding the Eastern Command and Brigadier-General Lloyd, the DirectorGeneral of Recruiting, in which the f ormer is reported to have said that when the New South Wales quota has been raised there will be a general lull in recruiting throughout the State and that recruiting will ‘be temporarily suspended in Martin Place? In view of the excellent results that have been obtained under the present system of recruiting, will the Minister give an assurance to the House that the efforts of Brigadier-General Lloyd, as Director-General of Recruiting, will not bo hampered in any way?
– Brigadier - General Lloyd will not be hampered in any way in his recruiting efforts, nor will any restrictions be placed on the acceptance of men who offer their services. I am confident that there has been some misunderstanding of the remarks of LieutenantGeneral V. A. H. Sturdee.
– Can the Acting
Leader of the House say whether the report appearing in to-day’s press that the Commonwealth Government had recommended to the State Premiers the appointment of Mr. E. G, Theodore to an important position is correct? If so, will he say whether the recommendation was made by Cabinet, or bya Minister; and if by a Minister, which Minister?
– Order ! I reminded honorable members yesterday that it is not in order to ask Ministers whether a report in a newspaper is correct. The latter part of the honorable member’s question is in order.If honorable members would study the rules relating to questions there would be less need for the Chair to draw attention to them.
– On the matters contained in the honorable member’s question I do not propose to make any statement to-day.
– Can the Treasurer say whether the new finance plan of the Loan Council will control local government works ? .
– The plan which was approved by the Loan Council yesterday contemplates the reviewing of the whole of the public works in the various States. It is aimed primarily at dealing with money for governmental and semi-gevernmental works. The present financial agreement provides that, unless agreement can be reached at the Loan Council in regard to the allocation of loan moneys, a formula, based on the borrowings of the various States in the past years, shall be applied. That formulacould not be applied in the existing circumstances in view of the fact that larger sums have been expended on defence works in two of the States than in the other States. The new plan has been designed to ensure that the resources of the Commonwealth will be utilized to the fullest possible extent.
– An agreement has been entered into between the Governments of the United Kingdom and the Commonwealth for the purchase by the United Kingdom of all of Australia’s surplus dairying and pig products. That agreement, which provides that certain prices shall be paid for such products, will expire on the 30th J une next. .
– Order ! The honorable member must ask his question, and not give information.
-Is the Minister for Commerce in a position to say whether the agreement has been renewed, and, if so, what prices have been agreed upon? If the agreement has not been renewed, can he give to the House any information which will allay the anxiety of producers ?
-Owing to certain unfortunate happenings overseas, I am afraid that the renewal of some agreements may be held up for a time, but I give the honorable member the assurance that there will be no interference with shipping.
– Will the Minister for the Army expedite a decision in his department in relation to the interconnexion of the electric supply systems of the Sydney County Council and the Balmain Electricity Supply Company? Is the Minister aware that the latter has expended a large sum of money in preparing for such connexion in the event of air raids, or of supplies from other sources being cut off, and that the work is being held up because of the failure of the Defence Department to arrive at a decision?
– I regret that I am not familiar with the conditions of the case presented by the honorable member, but I should say, as a general statement, that the taking of air raid precautions is entirely the function of the State. At the moment, I cannot say whether the Commonwealth Government is taking any action in this connexion, but I shall look into the matter, and give a reply to the honorable gentleman.
– Will the AttorneyGeneral consider appointing more officers to the Commonwealth Investigation Branch so that prompt attention may be given to reports by members of the public of subversive activities, and will he confer with the Minister for the Army with a view to bringing about closer collaboration between that branch and the military intelligence officers?
– The activities of the Communist party and of others who are engaged in subversive actions, in a desire to hamper the war efforts of the Commonwealth, are receiving the close consideration of the Government. I do not think, however, that it would be in the interests of the Commonwealth to disclose the Government’s proposals. In these cases, action should precede the declaration of purpose.
-.Can the Minister for
Supply and Development say what action is being taken to make use of the Commonwealth railway workshops at Port Augusta as an annexe for the production of munitions?
– The whole question of the degree to which the railway workshops of the States and the Commonwealth can be used in this country’s war effort is now receiving the serious consideration of my department.
– Can the Minister for Commerce say whether contracts for the supply of meat to the British Government are open to all suppliers of meat, or whether contracts have been given to one large exporting firm without calling for tenders?
– I am not sure of the purpose of the honorable member’s question, but ifhe will supply me with specific instances supporting his allegations, I shall he prepared to discuss them with him, and to supply him with an answer - publicly, if he so desires.
– Can the Acting Leader of the House say whether the Commonwealth Government has considered any proposals for providing, in Australia, temporary homes for refugees from allied countries as well as for women and children who have been evacuated from densely populated areas in Britain?
– No such proposals have yet been considered by the Government, but no doubt, following representations that have been made, consideration will be given to such proposals in due course.
– Can the Minister for Supply and Development say whether it is the practice in Commonwealth departments, other than munitions establishments, to terminate the services of men who enlist for active service? Will he arrange for the same conditions to apply with respect to reemployment in the munitions establishments after enlistment as now operate in other -branches of the Government service? If that be not possible, or if such an arrangement would present serious difficulties, will the Minister see that an assurance of preference for reemployment in munitions establishments is given to those who enlist? …
– So far asI am aware, there is no discrimination whatever between the different public departments in relation to the enlistmentof temporary employees. This subject is not altogether strange to me, as 1 dealt with it in reply to a question by another honorable member yesterday. I shall, however, see if more light can be thrown on it.
– Will the Treasurer inform me whether it is intended to complete the consideration by Parliament of the War-time Profits Tax Bill during this period of the session, or is the measure to be held over until later to be reviewed in the light of more recent developments?
– Following on the invitation issued by the Government to business people, accountants and others to submit suggestions in relation to the bill, a large number of communications has been received. There has been some difficulty in collating these and, of course, the Government desires to give the fullest consideration to them. I hope to be in a position to-morrow to indicate whether the Government will proceed with the measure during this period of the session or whether it intends to postpone consideration of the measure until the next period so that completely adequate attention may be devoted to the suggestions that have been made.
– Will the Acting Minister for Information inform me whether it is a fact that the censorship authorities of New South Wales have taken action to ban the performance of a play entitled “ No Conscription although the play merely depicts historical happenings in this country? If such action has been taken, will the honorable gentleman announce the reasons for it?
– It is not usual to give reasons in relation to the censorship, but I shall look into the subject.
– Will the Minister for the Army inform me whether he will consider a suggestion that has been made that badges shall be issued to the next of kin of persons who have enlisted in the Australian Imperial Force, the Royal Australian Air Force, or any other arm of our defence forces?
– Consideration is now being given to the issuing of badges to persons who have enlisted and been rejected, persons engaged in exempt occupations, and certain other individuals similarly placed. The class of people mentioned by the honorable member will be considered. I point out, however, that it is inadvisable to issue a multiplicity of badges.
– Is the PostmasterGeneral aware that his department proposes to prosecute certain unemployed relief workers working under a roster system at places between 50 and 100 miles from their homes who, having purchased a wireless set by time payment, have not been able, out of their meagre earnings, to pay for a broadcast listener’s licence? If so,I ask whether the honorable gentleman will waive the prosecution in order to give the men an opportunity to . meet the cost of the listener’s licence after they have paid for their wireless set? Alternatively, will he issue a free licence to them ?
– It is not practicable to issue free licences, but arrangements have been made to permit licence-fees to be paid by means of the purchase of stamps over a period of time. Free licences are granted only to blind persons. I am prepared to examine the circumstances in relation to prosecutions.
Mr.FAIRBAIRN (Flinders-Minister for Air). - by leave - Although, by refraining from critical questions, honorable members have shown a most gratifying confidence in the ability of the Royal Australian Air Force to carry through its colossal task, I feel it to be my duty to reassure the House and the public, in view of the fact that certain suggestions of delay and failure have been made outside the House.
I shall reply as dispassionately as possible, because I certainly do not wish to continue a controversy which is both harmful to recruiting and discouraging to the Australian Air Force personnel. I express regret that, by my slightly provocative reply to questions last week, I unintentionally added a little fuel to the fires of controversy. I did not realize that those who had criticized so inconsiderately would themselves he so very sensitive to my mild reproof.
First, there has been some criticism because the Government did not accept the offer of a certain firm to import from Great Britain, or even to manufacture in this country, a certain type of elementary trainer. This offer was much appreciated, but the reason for not accepting it was that there was already in Australia an established and proved firm which had undertaken to manufacture all of the elementary trainers that would be required for the air training scheme with the exception of 100 which were ordered to fill in the gap before production could commence.
Production commenced by the due date, and I have been reassured by the Director-General of Supply and Production in my department that the statement of the managing director of De Havilland Aircraft Proprietary Limited (Australia) that he can keep right up to the programme is well founded. We should be proud, of this further proof of the capacity of Australian industry to meet any emergency.
The question may he asked: Why are additional elementary trainers not acquired if more can be obtained from any other source? The answer is that there is no merit in pushing elementary training ahead of intermediate and advanced training. The pace of our intermediate and advanced training is set by the available supply of intermediate and advanced training aircraft.
The three types of aircraft to he used in intermediate and advanced training under the Empire air training scheme are the Anson, the Battle, and the Australianbuilt Wirraway. I am pleased to say that, although our Wirraway production has had “ teething “ troubles, which no aircraft production in any part of the world in my knowledge has ever managed to escape, the Commonwealth Aircraft Corporation is not only equal to supplying the Wirraways required under the Empire air training scheme, but is capable also, we are confident, of producing a considerable surplus to make up for deficiencies that may arise through difficulty in the deliveries of the aircraft promised from the United Kingdom. This is a further proof of the capacity of Australian industry, and of the wisdom, of the policy of developing . our own aircraft, production in Australia.
I do not intend to make any statement regarding deliveries from the United Kingdom, because, for quite obvious reasons, it is not desirable, particularly at the present juncture, to give any information concerning the aircraft production of the United Kingdom or of its disposal. Nevertheless, with the United Kingdom fighting with its back to the wall for very existence, it must be apparent to all that difficulties may well arise in delivering promised aircraft to Australia. Such difficulties of that description as may arise will not mean the collapse of ibc air training scheme.
Wirraway production, as progressing at present, will supply more aircraft than are needed for single-engine advanced instruction, thus leaving surplus capacity to moot other deficiencies. The Aircraft Production Commission is also at present in conference with the Commonwealth Aircraft Corporation, and it is hoped still further to increase the rate of production. It would, moreover, he possible to meet deficiencies by drawing upon civil aviation craft. Nothing will be done to disrupt air transport unless such action is considered to be absolutely necessary, but if it becomes necessary, there will be no hesitation. I shall content myself with saying that, although difficulties in deliveries from the United Kingdom may arise, there are ways in which they can be overcome. The possibility of obtaining twin-engined trainers from the United States of America has not been overlooked.
It is obviously wrong, in present circumstances, to make statements concorning the armament of any of our defence forces. It is, likewise, most undesirable to advertise to the enemy any temporary armament difficulties which may arise from time to time. Still more is it undesirable at this juncture to refer to non-deliveries of armament from the United Kingdom. However, as certain deficiencies have unfortunately been mentioned in the press I think it is advisable to tell the public the exact position so that it may not be exaggerated.
It is true that certain armament ordered from the United Kingdom for our Hudson aircraft was held up owing to Britain’s efforts to prepare for the onslaught which it is at present withstanding, but I am pleased to be able to announce that –the Australian genius for improvisation has come to the rescue and that very shortly the armament, delivery of which lias been delayed, will be replaced by armament improvised in our own works in Australia.
It has always been realized that one of the great difficulties in implementing this scheme would be to obtain sufficient trained fitters and men of some mechanical knowledge and aptitude to be trained as fitters and flight mechanics. To overcome this problem a big engineering school has been established with an ultimate capacity for nearly 3,000 trainees. Technical schools have also been established in Canberra, Sydney, Melbourne and Adelaide, and others are being established in other capitals. My colleague, the Minister for the Interior, has given instructionsforovertimetobeworked andforeverythingpossibletobedoneto expedite the provision and expansion of accommodation at these schools. The House, will be pleased to hear that recently there has been a considerable increase of the number of trained fitters coming forward. There has also been a very great increase of the number of men with some mechanical experience who are offering themselves for training. I hope this afternoon to confer with trade union leaders on the subject of the safeguarding of the apprenticeship system, difficulties in relation to which are preventing a number of young men from offering their services to the country.
Right from the conception of this scheme, I have realized and stressed the very grave difficulty of getting young men of action of the type we want to wait their turn to train, andI have lost no opportunity to emphasize that it is the duty of young men who have the qualifications and the inclination to serve in the air to wait their turn to train for this service rather than rush off to serve with other units. No one can have more sympathy with the feelings of these young men than I have, for I had to undergo a similar, though shorter, period of waiting when I applied to join up with the Plying Corps in the last war. I fully realize the danger of the young men being literally unable’ to restrain their impatience. To overcome this difficulty it has been suggested that all air crew trainees shall, as they are selected, be called up and put into, a disciplinary ramp to be trained physically and in discipline, and to receive lectures on the theory, of,what they will later have to learn during the course proper. There aredefiniemeritsinthisproposal,for itwouldcertainlybebeneficialtothe physiqueofthetraineesandwould ensurethattheywouldcommence theirtrainingwelldisciplinedand withsomeknowledgeofwhatthey hadtoabsorbduringtheirtrain- ingcourseproper.Itwouldalso givethema feeling of action, and do away with the horrible suspense of waiting, although, after some, months they might well become impatient also of drill, discipline and theoreticallectures, withoutanyactualflyingtraining.
There are, however, stronger points against such a proposal. Many of those on the waiting list are students doing courses which it would seem better that they should complete in order to prepare themselves for post-war life, rather than be in camp doing training, which, thoughhelpful, is not, strictly speaking, essential. Many others are in jobs in which they are gaining experience and doing valuable work in relation to Australia’s general war effort. It is undesirable to take them away from such work until they are definitely needed. Another point to be considered is that the air training scheme, as already planned, places a tremendous strain upon our material resources and also upon our supply of instructors. Therefore, serious consideration must be given to any proposal, the adoption of which may considerably and unnecessarily increase this strain. On the other hand, it may well prove to he essential to take steps along these lines, and I have given instructions that the whole position be examined immediately and most carefully by the Air Board.
– At the present time, applicants are accepted on the day on which they are examined. They are given a badge, and are sworn in on that day. Applicants accepted before it is possible to do that, are sworn in as soon as possible by local magistrates, and, immediately afterwards, a badge is supposed to be forwarded to them. If the honorable member can inform me of the names of applicants who have not received a badge, I shall be pleased to look into the matter. In the meantime, I repeat my appeal to those who feel that they fan best serve their country in theair, to make application for service in that capacity, and to awaittheir turn to he trained.
A good deal has been said about the necessity for speeding up the air training scheme, or recasting it. This problem is being well considered, but it has to be remembered that our capacity to speed up the scheme, or even to maintain the programme, is dependent upon the supply of aircraft, which is partly beyond our control. Nevertheless, I can assure the House that we are in touch with the United Kingdom Government and the British Air Ministry, and have expressed our willingness to recast the programme in any way that can be suggested that would better meet the present situation. Up to date, the opinions expressed by the governments of both the United Kingdom and Canada, are that there should be no change in the scope or time-table of the air training programme. The work is being pushed ahead at full capacity. If the production of aircraft can be increased, I can assure the House that we shall avail ourselves of the additional output, and that the Australian programme will be speeded up.
I have endeavoured to reassure the House that suggestions of failure and delay on the part of the Royal Australian Air Force are unfounded, and I have explained that everything that is within the control of the Royal Australian Air Force is proceeding according to programme. I have also pointed out that the speeding-up of the programme is dependent upon the supply of aircraft, and that consideration is being given to every possible way, within our control, in which we can speed up production. 1 do not want honorable members to think that I am in any way complacent, nor do I suggest that no mistakes of any sort have been made. Certain mistakes are bound to be made from time to time in an undertaking of this kind and of these dimensions.
People who have seen Australia’s greatest industry, the Broken Hill Proprietary Company Limited, say that, it is little short of a miracle that such an organization should have been built up in approximately a quarter of a century. I would like to remind the House, and critics outside the House, that the Royal Australian Air Force is endeavouring to set up a bigger production organization than that of the Broken Hill Proprietary Company Limited, in less than eighteen months. A great majority of the men engaged in this colossal undertaking have come in the last few months from civil life, with little or no previous experience. Our recruiting staff, which now numbers 397. with an additional 200 voluntary helpers, is almost entirelycomprised of civilians who have offered their services since the outbreak of war.Itwouldbe ridiculous to expect that anoganization of this size, staffed by menwithgreat enthusiasm but little experience, would make no mistakes in the colossal and intricate jobofdealing withover80,000 applications from youngmen wishing to be examined as to their suitability to serve as pilots, observers, air gunners, educationalists, electricians, fitters, air riggers, flight mechanics, clerks, and cooks, and in a dozen other occupations.
Mistakes have undoubtedly been made, but every week the personnel is getting experience, and our recruiting system is running more smoothly. Where mistakes have occurred, I have admitted them freely, without any attempt; to cover them up or make excuses, and I have readily accepted the blame, without endeavouring to pass it on in any way.
Therefore, I feel that I can, with confidence, ask the people of Australia to believe me when I say that the suggestions of failure and delay in carrying out the air training scheme by the Royal Australian Air Force are unjustified. The circulation of rumours of delay is most undesirable, as nothing could be more calculated to discourage those who are going through the purgatory of awaiting their turn to serve.
– Some time ago, at my request, the Prime Minister made representations to the various life assurance companies in Australia asking them, in the interests of men who enlist in the Royal Australian Air Force, to cancel the clause in life assurance policies relieving the companies of aeronautical risks. I understand ‘that’ most of the companies have agreed to dothis, and have given to men who have enlistedin the Air Force the benefit of the cancellation ; but I have information that one company, at least- and Ishallannounce its name, later, if necessary- refused only last month to cancel this clause. Will the Government make representations to all of the assurance companies, asking them, in view of the risks that our airmen are taking, to cancel the clause which protects the companies?
– I have no knowledge of the stage reached in regard to that matter, but I shall bring it under the notice of the Prime Minister, and see that a reply to the honorable member’s question is obtained.
Situation in Belgium.
– Is the Minister for
External Affairs in a position to inform the House as to the latest developments in Europe; and particularly Belgium? Has the report that the King of the Belgians has capitulated been confirmed? Has the advice which he has tendered been accepted by the Belgian forces ; have they retired entirely from the field, and has the direction of the king with regard to those forces been overridden?
– I made a brief statement last night, on the adjournment, on the point raised by the honorable member. The position with regard to the fighting in northern France at the moment, and the incidents of successes and reverses to the British and French forces, have, of course, been completely overshadowed by the capitulation of the entire Belgian army at the direction of the king, who is the Commander-in-Chief in the field. The Belgian army had fought gallantly and well. The reports in the possession of the Government are that, during the 24 hours prior to the capitulation, thatarmy was broken by the intense mechanized attacks of the German forces and by continuous and dreadful air attacks. It is not the intention of the British Government, nor, I am sure, would it be the intention of the Commonwealth Government, to encourage, or be a party to, any recriminations as between the Allies in respect of any incident which may occur under the dreadful stress of the present military activities in France. The Belgian Government, which the Allies still regard as the legal government, and which is, in fact, the only legal government of Belgium, has, subsequent to the capitulation of the army in the field, at the direction of the king, declared its intention of maintaining a state of war with Germany, and of marshalling such forces as it is possible for that government to marshal and again place in the field. The British and French forces are continuing their fight, with their morale unimpaired by this capitulation. Nevertheless, it is not to be denied that the complete exposure of the left flank of the Allied forces in Flanders by the capitulation of the Belgian army, and the exposure thus made to German attacks on Dunkirk, and the lines of communication of these Allied armies from Dunkirk, place the British and French forces in that sector in a position of peril, the gravity of which cannot be exaggerated.
– Before the present sittings of the House are concluded will a statement be made indicating the intentions of the Government with regard to the wheat industry, as to both the question of an advance and any form of stabilization to be adopted for the coming year? Will a statement also be made as to wh ether there will be a review of the sales contract entered into last year with the British Government with regard to our exports of primary products, such as wool and butter? Will a statement be made, further, as to whether the wool purchase agreement willbe reviewed, having regard to the increased cost of production ?
– As far as wheat is concerned, if I can make any useful statement before the conclusion of of the present sittings I shall do so. The sales contract with the Government of the United Kingdom is under constant review, but, at the present time, the position in London is such that it would be asking rather too much to expect the Imperial Government to apply itself to matters of that description. As soon as the conditions clear, no doubt these problems will again receive the attention of the Commonwealth Government.
– Will the Minister for Supply and Development state what foundation there is for the statement that has been made regarding the plant required for the manufacture in Australia of aluminium, the export of which has been banned?
– It is true that, in consonance with the declared policy of the Commonwealth Government, arrangements were made for the retention in Great Britain of certain plant intended for the aluminium industry in Australia. That was done because it was demonstrated that the retention of the plant in Great Britain would be eminently in the interests of the Empire as a whole.
– Will the AttorneyGeneral state whether the report is correct that R. W. Miller, a coal-mine proprietor, operating on the Rothbury Estate near Maitland., has repudiated the terms of the settlement of the recent coal dispute by refusing to re-engage some of his employees who made common cause with the Miners Federation, despite the fact that the terms of settlement which the Government agreed to with the coalowners and miners definitely stated that there would be no victimization of any former employees, and that any free labourers who were engaged by Miller would be compensated by being found other employment? If this be a fact, what does the Government propose to do with Miller to force him to honour the agreement made with the men ?
– To reply to the honorable member at length would not be possible for me without my having the agreement before me. I understand quite well what he is speaking about, and I shall ascertain the facts. The agreement that was made between the Government and the executive of the mining unions and the Australasian Council of Trade Unions will bc honoured in the letter and in the spirit.
– Has the Minister for External Affairs any later information regarding the Netherlands East Indies and Dutch New Guinea?
– I have nothing to add to the statement which I have previously made regarding the Netherlands East Indies, nor does the Government expect that there will be any further developments necessitating further statements.
– Seeing that during the early stages of the organization of the Royal Australian Air Force there was a surplus of first-class engineering labour available, will the Minister for Air consider whether it is possible to release some of the first-class fitters from air force depots for service in the munitions branch, where they are so urgently needed ?
– I shall consider the honorable member’s suggestion, but the shortage of highly-skilled fitters in the Air Force to-day is so grave that we must be very careful before permitting any of them to leave the service.
– Will the Minister for the Army state whether the Railway War Council is still in existence? If so, how long is it since it last met? Has it prepared any transport plans to meet a possible state of emergency in Australia? If it has, can any information be given to the House regarding the character and extent of its plans ? If not, can the Minister assure the House that effective preparations have been made?
– Yes, the Railway War Council is still in existence. I cannot say offhand when it last met. It has, of course, as the object of its existence, the preparation of plans to meet any emergency that may arise. It would not be in the public interests to disclose the nature of those plans. So far as my information goes, I believe that the plans drawn up provide for .any emergency that may arise.
– Has the attention of the Minister for Supply been drawn to the statement of the honorable member for West Sydney (Mr. Beasley) last night regarding the extraordinary delays that have taken place in the supply of munitions in New South Wales, and the waste of public money involved?
– My attention has been drawn to the statement. There is an effective reply, and that reply will be made.
– When may the House expect this very important statement in denial of the charges made against the Department of Supply and Development regarding production delays?
-But for the unfortunate occurrences in France last week, that statement would have been already made. It will be agreed that what is happening in France and Flanders just now is even more important than the impatience of some honorable members.
Motion (by Mr. Street) agreed to -
Thathe have leave to bring in a hill for an act to amend the Australian Soldiers’ Repatriation Act 1920-1938 for the purpose of providing for the grant of pensions upon the death or incapacity of members of the Defence Force of the Commonwealth whose death or incapacity arises in connexion with the war which commenced on the third day of September, One thousand nine hundred and thirty-nine, and for other purposes.
Debate resumed from the 28th May (vide page 1360), on motion by Mr.
That the bill be now read a second time.
.- The Opposition cordially supports this bill, which provides for reductions and modification of telegraphic rates through out Australia. We feel that the anomalies which itis now proposed to remove should have been removed long ago. In particular, the vexatious border rate for telegrams should never have been allowed to persist so long, seeing that it constituted such a grave injustice to people living in districts along the State borders. It appears that the advantages under the bill to people living in border districts are to be even greater than was indicated by the Postmaster-General (Mr. Thorny) yesterday. It now costs 1s. 4d. to send a telegram of sixteen words from one side of a State border to the other, say, from Albury to Wodonga. That special interstate rate is to be abolished, and such a telegram could, I presume, be despatched for 9d., which is the rate for telegrams that are to be delivered within a 15-mile radius of the point of despatch.
I believe that the Minister should grant a further concession to persons living in districts where the local telegraph office closes at 6 o’clock. Where there is an all-night telephone service, it should be made possible to despatch a telegram at any time during the nightparticularly if the telegram be urgent.
– That is provided for. If it is possible to ring through to the nearest all-night office, telegramsmaybe despatched by telephone.
– Without penalty?
– There is no penalty, except that trunk line charges mustbe paid.
– That does not cover the point I am making. In the cities, where the telegraph office is open day and night, a person may send a telegram at any time during the day or night without extra cost, but in the country, where the telegraph office closes at 6 o’clock, a person has to pay trunk line charges to have his telegram telephoned to the nearest telegraph office. People living in the more remote parts of the Commonwealth should receive benefits at least equal to those in the more closelypopulated areas. Although I represent a city constituency, I am not unmindful of the requirements of those living in the outback portions of Australia, and it is essential that those who do not enjoy the conveniences available to city dwellers should receive greater consideration in this respect. I trust that the Minister will remedy the anomalous position in which some persons are to be placed by having to incur an additional cost in transmitting telegrams after hours to the nearest all-night telegraph office. I am also pleased to note that the bill provides that news telegrams sent by representatives of broadcasting stations are to be despatched at the rates charged for press telegrams. It is surprising that hitherto news messages despatched to the Australian Broadcasting Commission, which is indirectly controlled by the Government, have been charged a rate higher than that charged on press telegrams.
The Minister admitted that, notwithstanding the concessions to be granted, additional revenue will be obtained. That is a striking admission of the benefit of government control, particularly of instrumentalities such as the Postal Department. It is pleasing to realize that during the war when restrictions have to be placed upon governmental services in order to effect economies this Government instrumentality is able to grant concessions to the public and at the same time to increase the revenue. The Minister’s statement supports the policy of public ownership which has always been advocated by honorable members on this side of the chamber. In a national emergency the efficacy of such a policy should become more apparent, and we should provide an even greater measure of government control, and in that way add to the efficiency of the service rendered to the public.
– Although I welcome the introduction of this measure, I am inclined to think that many honorable members would not have supported itbut for the fact that we are in the throes of war, and it is necessary to obtain as much revenue as possible through the various departments in order to prosecute the conflict to a successful conclusion. Notwithstanding the remarks made by the honorable member for Hindmarsh (Mr. M.akin) to the effect that the bill confers certain concessions in the matter of telegraph rates to those residing in border areas, ‘X hope to be able to convince honorable members that it would have been quite possible at a minimum loss of revenue to have given a definite advantage to those living in such areas without the disadvantages which they will suffer under this measure. I agree with the honorable member for Hindmarsh that’ll measure such as this should have been introduced earlier; but there are reasons why that was not done. Three successive Postmaster-Generals endeavoured to afford some relief from the extra ordinary anomaly of border rate telegrams. The telegraphic section is not the only section which can be accused of charging unnecessarily high rates. The Minister (Mr. Thorby) has said that, although the word rate for telegrams in Australia is lower than that in almost any other country, the profit in the telegraphic section, in 1935-36 was £65,000; in 1936-37. £80,000; in 1937-38, £73,000; and in1 938-39, £53,600. The reduced profit for this financial year is clue largely to the obligations into which we have entered with respect to overseas services and not to any internal cause.
– Prior to the periods mentioned there was a loss of £2,500,000 on the operations of the branch.
– In 1934-35 there was a profit of £15,000, but before that there was a. definite loss over a number of years. No big business concern would single out the loss on one section, and say that it must show a profit when the whole business was making an extraordinary profit.
The honorable member for Hindmarsh drew attention to the application of press telegram rates to broadcasting stations. I only want to say that this amendment would have been introduced long ago only that it was thought desirable to await a decision with regard to border rate telegrams and so include both amendments in the one bill.
– There were many opportunities to introduce it.
– In consequence of the outbreak of war its introduction was delayed. In September, 1938, the then Postmaster-General decided to provide a 9d. rate for telegraphic messages of sixteen words within a radius of 15 miles, which would have been of greater advantage to those concerned than the present suggestion. Some time later the present Minister for Commerce, who was PostmasterGeneral in the Lyons Government, recommended a rate of sixteen words for 1s. outside a 35-mile, radius, thereby abolishing State boundaries. That would have been, of definite benefit to all using the service. I realized the advantage of such an innovation but before the then Minister had an opportunityto give effect to it. the Ministry was reconstructed and 1 was appointed Postmaster-General. I immediately had the recommendation re-affirmed by Cabinet, and stated that effect would be given to it as soon as the bill could be drafted. Unfortunately, the war occurred, involving the maintenance of revenue wherever possible, and as the concession proposed would have resulted in a definite loss of £63,000, which would have absorbed almost completely . the amount of profit made annually, honorable members will understand why the measure was not introduced. It was desired to obtain as much revenue as possible and in that way avoid increasing direct taxation by that amount. The Minister anticipates that under these proposals an additional £25,000 of revenue will be obtained. Honorable members must recognize that while certain benefits will be conferred upon those transmitting border telegrams, indirectly the cost will be higher. The estimated additional revenue of £25,000 is very conservative, and I say without hesitation that the amount is likely to be considerably over £40,000.
– The honorable member is not making any allowance for the concessions to be made under another bill.
– I am not permitted to discuss that measure at this juncture; hut the Minister will admit that his estimate is conservative. When it was suggested that the interstate rate should be reduced from ls. 4d. to ls. for sixteen words, the department estimated the loss would bc £63,000. The proposed rate is ls. for fourteen words plus Id. a word for each additional word, or sixteen words for ls. 2d., or 2d. more than the original suggestion of sixteen words for ls., which on a conservative estimate would reduce the £63,000 mentioned to £32,000. In other words, on the departmental figures, there will be a saving to the revenue of £32,000, not t’25,000, as the Minister estimated. Taking into account the fact that the average number of words in a telegram is not fourteen or sixteen but eighteen, the average cost under the existing rate of sixteen words for ls. 4d. is ls. 6d. At the new rate of ls. for fourteen words, the sender will have to pay ls. 4ld. for eighteen words, and consequently will safe only 2d. instead of 4d.
– The Postmaster-Genera! explained that point.
– It is clear. Within a 15-mile radius, the number of words that may be sent for 9d. will be fourteen, compared with sixteen at present; consequently on an average telegram of eighteen words, the sender will have to pay ls. Id. for eighteen words, or 2d. more than the present rate for a 15-mile radius, and Id. less than the existing interstate rate. This will not confer very much benefit on the sender. Nevertheless, I support the bill because I believe that, in time of war, we arc fortunate in that our essential services are not more heavily taxed. During the last war, the postage rate had to bc increased. That is not contemplated at the moment. We should not delude ourselves iwto the belief that a permanent adjustment of rates has been made. When the war calms down, further benefits should be given to the public out of the undue profits that are being made.
I am glad that the Postmaster-General bus agreed to reduce the charges in respect of broadcasting telegrams. The press has received a definite concession, amounting to 5S per cent, on interstate telegrams and 80 per cent. in respect of intra-state telegrams, on the ground that it is rendering an essential service. The conference held at Cairo a few years ago agreed to suspend all rates and to grant concessions ito broadcasting as from the 1st January, 1939: consequently, the bill merely gives effect to the terms’ of a convention, and in no greater degree than has been observed by other nations.
– The analysis of the bill by the honorable member for Wentworth (Mr. Harrison) has confirmed what I gathered from the speech of the Postmaster-General (Mr. Thorby). The proposed concessions are not so great as the Government would have the public believe; consequently I am not altogether satisfied with them. The restoration of the number of words to sixteen, in conjunction with the proposed concessions, would tend to establish the claim of the Government. The information that the revenue is not. likely to suffer is interesting. On the contrary., additional revenue to an amount of £25,000 will be obtained. The profits of the Postal Department have been very high in recent years, although the general belief is that it should not be regarded as a revenue-producing institution. The principle orginally laid down in the postal organization, was that any profits should be returned to the public in the form of lower rates for telegraphic, telephonic and postal services. For the last few years, there has been very strong agitation in the business world, and among the general public, against the use of the department for a purpose not originally intended, and in favour of the granting of concessions to the .public out of the increased Teven we obtained. That principle is followed in other national undertakings. I speak with intimate knowledge of the supply of electricity and other services by governmental and semi-governmental bodies. The argument can be sustained that, as the number of users increases, the cost proportionately is reduced, and that therefore there is scope for the improvement of facilities. In the United States of America, telephony is regarded as being as essential as water, light and gas. That view should be adopted in this country. The facilities offered by the telegraph branch should bc placed within the reach of all. The Minister justified the reduction of the number of words from sixteen to fourteen by saying that messages could be condensed, because people employ unnecessary words only because they can be used up to sixteen for no additional charge. A large proportion of the total number of words is represented by the address. A little while- ago I read that the Government had in mind the granting of the concession of not. charging for the full number of words in an address. We have all had the experience of telegrams being undelivered when an effort has been made to abbreviate the address. That aspect must bc considered. Up to six words may be used in an address, and in such a case it; would be difficult to say in the remaining eight words allowed for 9d. what one wished to convey. Those who are not accustomed to sending letters or telegrams are not so competent to express themselves briefly as are persons engaged ill parliamentary duties, press activities, or business generally, of whose daily routine it is a part. Condensation is difficult for the man who toils in the fields all day, or is engaged solely in hard manual labour. In committee, I shall move to raise the number of words to the sixteen at present allowed. With the altered rates, this would be a real concession to the public.
– At a time like the present, the Government may be excused for making slightly more profit on the operations of the postal department, although generally speaking, that institution should not be used as a taxing medium. As the honorable member for Wentworth (Mr. Harrison) has suggested, the matter can be adjusted at the termination of the war. In the circumstances, I congratulate the PostmasterGeneral (Mi-. Thorby) on the removal of certain anomalies that have become manifest in the telegraphic service. The elimination of the disability caused by the rate for interstate messages is a. step in the right direction. The cancellation of double rates on holidays and Sundays will relieve the congestion in ordinary business hours. My criticism of the measure concerns the effect of these proposals on country services. The limitation of the reduced rate of 9d. for telegrams to a distance up to 15 miles gives to residents of populous areas a great advantage over people living in sparsely populated districts. The centres at which most people in country areas do their business are usually more than 15 miles distant, and in areas where mail services are infrequent residents are often obliged to rely on telegraphic communication.
– The concession in respect of the 15-miles radius will apply to country districts as well as metropolitan areas.
– But country people rarely send telegrams to places less than fifteen miles distant.
– They can use the trunkline telephone system at a cost of about 4d.
– That may be so. However, a telephone may not be available. At the same time, such facilities are not likely to be readily provided because it is the policy of the department to refuse to install a line unless it first obtains a guarantee that the line will be a payable proposition. Another anomaly, which was mentioned by the honorable member for Wentworth, arises in respect of all-night services in country districts. The Postmaster-General explained that where all-night telephonic services are provided in the country, a person can use such facilities for the despatch of telegrams provided he alsopays the charge for the telephone call.
– That is the phonogram method.
– But those facilities already exist.
– In future the double rate will not apply after certain hours.
– I did not know that. However, as the honorable member forWentworth has indicated, that concession will not be so great if people must pay the charge for the telephone call as well as for the telegram.
– But in future the night telephone rate will also he reduced.
– I suggest that some concession should be allowed in respect of the addresses on telegrams.
– Provision for such charges is made in the international convention. That is why no alteration in that respect has been proposed.
– As the PostmasterGeneral has effectively answered all of the points which I have raised, I congratulate him upon having introduced this measure. I again urge him to grant concessions to residents in country districts wherever possible.
. -I have always approached consideration of facilities provided by the Postal Department from the point of view not of profit but of service. The department, apparently, invariably prefers to make concessions which will benefit, big commercial interests, and pays little regard to the just claims of country residents. For instance, the abolition of double rates in respect of night services benefits mostly the, man who is in business in populous centres, and lestows very little benefit upon the ordinary users of the telephonic and telegraphic services. Events which make it expedient, or necessary, for residents in remote centres to use telephonic or telegraphic facilities late at night are usually of such a nature to preclude a person from worrying to reduce the cost to the minimum. In times of emergency caused by death or sudden illness in the home, or when some unusual event, such as a marriage or birth, takes place, people are inclined to act rather hurriedly in despatching telegrams or making telephone calls. On the other hand, big business has reduced the cost of these facilities to a minimum. For instance by the use of codes, big business houses are enabled to cut out every unnecessary word from a telegram. It is also apparent that reduction of rates in respect of postal facilities generally are made mainly in the interests of the commercial section of the community. I have no objection to extending to broadcasting stations the concessions now enjoyed by newspapers. However, I contend that commercial interests should not be given any further concessions by the department until much-needed facilities are provided in sparsely populated areas, or until the present charges in the country are reduced. The present rates in populous centres are quite low enough, and any revenue which the department has to spare should be used for the purpose of providing greater facilities and more efficient services in rural areas. I commend the Postmaster-General (Mr. Thorby) for abolishing the border telegram anomaly. I again urge the Government to approach the subject of the improvement of postal, telegraphic and telephonic facilities from the point of view of service rather than of profit. The Postal Department has done a wonderful job. I have no complaint to make about its administration. It is all very well for the Postmaster-General tosay that residents in country areas who are not handy to a telegraph office can use the telephone, but that procedure is costly to a lot. of people. In addition, thousands of settlers in outback areas are not near a telephone. These people will receive no benefit whatsoever from the. reduction of night rates for telegrams , and telephone calls. In any case, why should people in. country areas be obliged to pay1s. for a telegram which costs people living in populous centres only 9d.? The Postmaster-General knows that a telephone is not available to every body.
Mr.Thorby. - If no telephone or telegraphic office is handy, a person cannot lodge a telegram.
– He might be obliged to go to the nearest town to do so. The Postmaster-General must know of many instances in which that happens. If a real necessity did not exist for the extension of facilities of this kind in country areas, honorable members would not be pressed with the large number of requests which they now receive for the provision of such facilities.
– This measure deals, not with the facilities themselves, but with the rates.
– The point I emphasize is that before wo reduce rates in the interests of one sectionof the community, we should provide facilities required in the country areas. I am not critical of the bill, hut so long as 1 have an opportunity to do so, I shall continue to press the claims of residents of country areas for improved facilities in preference to the granting of concessions to commercial interests. At least £2,000,000 of the department’s annual profit of £3,000,000 should be used for the purpose of providing facilities for settlerswho are pioneering this country.
Sitting suspended from 12.45 to 2.15 p.m. [ Quorum formed.]
SirEARLE PAGE (Cowper) [2.15].- I congratulate the Postmaster-General ( Mr. Thorby) on the reform contained in this bill, which for the first time obliterates in respect of telegraphic messages State boundaries. It is fitting that this reform should be made in war-time, when State barriers to trade should be torn down as far as possible.
Mr.martens - Only during wartime?
-At all times really. This bill is a definite step towards unifying the Postal Department generally, and towards developing the nation as one greatentitiy. The old position was indefensible if one looks at the Postal Department as a taxing machine, because, in Tasmania, the farthest distance that one can send a telegram for1s., the rate for telegrams sent for delivery within the State, is the 120 or 150 miles between Hobart and Launceston, whereas a person in Western Australia can, for the same charge, send a telegram from Albany to Wyndham, a distance of about 2.500 miles. The position in Queensland is similar. It is obvious that that is not equitable taxation. If one wants to send a telegram from Albury to Wodonga, adjoining towns, but in different States, the interstate rate has to be paid. This bill removes that discrimination between the citizens of Australia which existed in the different sized States. Federation was designed to make us one, citizens of one nation and country. I am glad that the Postmaster-General has been able to make this reform in such a way as not to lose any revenue. Indeed, apparently, certain savings of time and labour in the operating system will improve the revenue position. We must maintain the revenue of the Postal Department, especially when the amount of money available for new postal, telegraphic and telephonic services from other sources must be limited by war demands.
I raise one anomaly that occurs at present, and I put it before the Minister in the hope that he will be able to correct it. It occurs in this way: Many continuous telephone services operate in fair-sized country towns, but, because limited service exchanges, sometimes connected to only two or three subscribers, or to the actual telephone exchange itself, are closer to an intending subscriber than is the all-night service, that intending subscriber is prevented, unless he pays exorbitant charges, from being connected with the continuous service. Country men are at work between the hours of 9 a.m. and 0 p.m., when the small telephone offices are open. They can use the telephone only before they start and after they finish work. They should be allowed. either a continuous service, or an extension to8 p.m. or even 10 p.m., at rates which are not prohibitive. No loss would result; thousands of persons who would be telephone users and mostly heavy trunk line users are not connected with the system to-day because in existing circumstances the1 telephone would be pf almost no value to them.
I.’ remind the right honorable member that this bill does not deal with the services of the Postal Department.
– I am glad that the press rate has been made to apply to news telegrams to broadcasting stations, because a great many people who have to wait for two or three days to get the newspapers rely on broadcasting in order to keep up to date with the local news, particularly the war news. I express my thanks to the former PostmasterGeneral (Mr. Harrison) for the extraordinary consideration that he showed during his term of office.
.-] commend the Postmaster-General (Mr. Thorby) for having initiated this reform to do away with the penalty rate of 4d. imposed on interstate telegrams, which I have always regarded as a negation of federation. In urging this reform on various Postmaster-Generals, I have often said that a telegram from Southport to Tweed Heads, a distance of 20 miles, costs ls. 4d., whereas a telegram from Southport to Cairns, a distance of 2,100 miles, costs only ls. That was never the intention of the framers of the Constitution and I regret that 40 years had .to elapse before the change was made. I am glad that the reform, can be made without loss of revenue, because we are passing through extraordinary times, in which the revenue must be maintained. I understand that had the Postmaster-General decided merely to do away with the penalty rate of 4d. on interstate telegrams without action to safeguard the revenue, the annual loss would have been £63,000. I should like the Postmaster-General to assist country districts to a further degree by giving them the privilege of longer hours, particularly in the evening, for the use of the telephone and telegraph offices. The farmer starts work early and finishes late, and has only the periods from 6.30 a.m. to 7 a.m. and from 9 p.m. to 10 p.m. in which to transact business.
My constituents have made a very large number of requests for the extension of the hours of post offices.
– Order ! I have already directed attention to the fact that this bill does not deal with the services of the Postal Department.
– I regret the omission of that provision and request the PostmasterGeneral to include it in a future bill.
– I welcome the abolition of the differentiation between ordinary and interstate telegrams, especially on behalf of residents of border towns, who, up to now, have really had to suffer a penalty of 7d. on a telegram sent only a short distance, but from one State to another. The extra 3d. penalty arises from the fact that in metropolitan areas telegrams for delivery within a 15-mile radius can be sent for a flat rate of 9d. This is a concession, and we look for concessions from such a profitable undertaking as the post office. The objection that I have to this bill is the proposal to decrease from sixteen to fourteen words the message on which the minimum charge is payable. The honorable member for West Sydney (Mr. Beasley) has announced that he will move in committee for the continuance of the 16-word charge basis, and I ask the PostmasterGeneral to reconsider the matter and, if possible, accept the amendment. I also welcome the decision to do away with the double charge for telegrams despatched on Sundays and holidays, such as Christmas Day and Good Friday, but, so that the country districts might benefit from that provision, the hours of business at country post offices will have to be extended. Having been reared in country districts, the Postmaster-General would naturally appreciate the countryman’s viewpoint, and he should be sympathetic to their aspirations, hut the Postal Department is too conservative, in considering applications for an extension of country telephone services. It is inclined to increase restrictions rather than facilities. The present Postmaster-General is the only occupant of that office who has shown any Courage. His predecessors were always ready with an excuse for not abolishing the penalty rate on interstate telegrams, but no excuse could really stand the test.
– The Chair does not wish to restrict discussion on this bill or on any other matter, but honorable members should realize that if the Chair were to permit discussion of all suggested increased facilities such as those mentioned by quite a number of honorable members to-day, every aspect of the postal administration would be brought into the debate. That would not be in order, and I ask honorable members to confine their remarks to the hill.
.- Although the bill does not consist solely of benefits to the public, like the curate’s egg, it is undoubtedly good in parts. For instance, the reductions of telegram charges are not as beneficial as they would at first appear to be. I have no desire to be unfair, but I think it is necessary to draw attention to certain objections. The first is that the number of words allowed in an ordinary telegram has been reduced from sixteen to fourteen. According to information supplied by the Postal Department, the average telegram contains eighteen words, so that the reduction by two words will represent an average loss ito the sender of approximately 2d.
– The average of eighteen words a telegram includes the ninepenny telegrams.
– That is so; the reduction of the maximum from sixteen to fourteen also applies to telegrams sent within a radius of 15 miles which were previously sent for 9d., so that there is a loss to the public there.
In view of the fact that double rates after hours have been cancelled. I should like to know whether or not it will still be possible to send urgent telegrams?
– Urgent telegrams may still be forwarded at double rates. At present where double rates apply for ordinary telegrams, double double rates apply for urgent telegrams.
– I am glad of that explanation because in my opinion there should be provision for urgent telegrams, which are very often necessary in cases of accident or illness.
Apart from the objections which I have raised, it appears that the bill is a great boon to the public. The Postal Department will in future be regarded as a Commonwealth-wide utility, and no differentiation in charges will be made between the various parts of the gO:.monwealth. .We should be proud of. the fact that, under the efficient administration of the Postal Department, our telegraph services are the cheapest in the world. That has been rendered possible only through government ownership of this great public utility - a principle for which we on this side of the House stand. As the PostmasterGeneral (Mr. Thorby) has pointed out, telegraph charges in this country are much cheaper than they are in many other parts of the world. In Australia a 16- word telegram may be sent at a charge of .18d. a word; in the United Kingdom, which is about the same size as Victoria, the corresponding charge is .83d. a word ; in New Zealand, which is somewhat larger than Victoria, it is l.lld. a word; and in the United States of America, which has a population nineteen times greater than that of Australia, the charge varies from 1.05d. a word to 4.05d. a word. That means that whereas it is possible to send a telegram in Australia from .Cape York to Cape Leeuwin for less than Id. a word, in the United States of America the cost might be as high as 4.05d. a word for the same distance. It is not that the Western Union Company, which operates telegraphic and telephonic services in the United States of America, is not as efficient as our Postal Department, but it means that the service is being run for the company instead of for the benefit of the people.
The bill is a short one, but it provides much-needed reforms at small cost to the department. If we were permitted by the Chair to mention matters apart from those contained in this bill, the debate would be interminable, and so I shall not suggest on this occasion that part of the revenue ito be raised by this bill should be given to employees of the Postal Department in distant parts, in the fora! of larger district allowances. , *
– Order ! The honorable member knows that he must confine his remarks to the bill.
– I shall not press this matter, but I point out that postal employees living in remote parts of Western Australia receive an allowance of only £40, whereas in many cases it costs them £35 to go to Perth for a holiday. I hope that tile Postmaster-General will give that aspect of the matter some consideration.
.- I suppout the bill, but I should like to draw attention to the disadvantages suffered by country people with regard to telegraphic services. The country districts of my electorate cover about one-third of Tasmania, and to the best of my knowledge in that area there is not one all-night telegraph office, and therefore people living in these areas are at a big disadvantage. I suggest to the PostmasterGeneral (Mr. Thorby) that die cost ox telephoning a telegram from a country post office to a central telegraphic office should not be charged to the sender. I am speaking particularly of offices which are open all night, or at least for much longer than normal hours. Bui going further into the country the position is worse still. Whereas a telegram containing the present maximum of sixteen words may be sent from an ordinary telegraph office at almost any time of the day or night for ls., if the message is to be sent on a Saturday afternoon from a country post office it is first of all necessary to pay an opening fee of ls. 6d.; then there is a charge of ls. for telephoning the message to the nearest telegraph office; and, on top of that, for a distance of 60 miles there is the cost of the telegram itself, making a total of 3s. 6d. This discrepancy would be overcome if the bill were amended to provide that all telegrams be accepted at the basic rate, no matter from what office they be sent. Even if country subscribers were only required to pay an opening fee, they would receive a considerable reduction of the total charge.
– If telegrams are lodged at any post office which has a telephone, no charge is imposed. A charge is only imposed if the office is a contract post office, and the telephone is not run by the Postal Department.
– I thank the Minister for his explanation. I was under the impression that a telephone call had to be paid for on all occasions when an office is closed for ordinary telegraphic business.
, - in reply - There are several points which have been raised in the course of the second-reading debate to which I should like to reply. Several honorable members stated that this billgave concessions to big commercial interests. Others said that the people were being definitely penalized. Whilst I appreciate the complimentary remarks made in support of the bill, I point out that it is entirely wrong to say that sectional interests are being considered. As one who takes just as much interest in rural areas as any other honorable member, I say that an examination of the bill proves that the concessions which it contains definitely apply to a large proportion of country people. For instance, the abolition of border rates applies entirely to country people. At present, if a telegram is sent across a State boundary, even though it be only to a point two or three miles away, the charge is ls. 4d. for sixteen words. This bill amends tha,t rate to 9d. for fourteen words. As I said in my second-reading speech, many telegram* which now contain sixteen words could easily be reduced to fourteen words without any disadvantage to any one. [ repeat that the bulk of the people who will benefit by reduced border rates are country people. Further, the reduction of the rate for interstate telegrams will affect country people just as much &i those living in the cities. For one thing, it will be a great concession to the people living in the south-west of Queensland, most of whom deal with business interests in Sydney. The concession will also benefit residents of outback areas in the Northern Territory, and particularly in Tasmania, because people of that State have extensive telegraphic communication with Melbourne, and at present are obliged to pay ls. 4d. for sixteen words. I make this explanation because some speakers have created the impression that this bill takes away more than it gives. I have never suggested that the purpose of this bill is merely to give concessions. Its object is to eliminate anomalies and, without any great loss of revenue, to give a reasonable service at a reasonable cost to all people of the Commonwealth,without any discrimination. I am personally responsible for the provision which’ reduces the normal number of words in a telegram from sixteen to fourteen, but as I have explained, that reduction should not be a great inconvenience. Had [ attempted to introduce a bill giving concessions such as those suggested by the honorable member for West Sydney (Mr. Beasley) the chances are that it would not have been passed by Parliament, because of the additional heavy cost which it would have imposed upon (he Commonwealth at a time when revenue must be devoted to defence purposes.
– There will be no loss of revenue.
– Not under the bill. Indeed, we shall probably obtain increased revenue, because the number of interstate telegrams will undoubtedly increase as the result of the reduced charges. Similarly, border telegrams will become more numerous when it is known that a message which previously cost 1s. 4d. can be sent for 9d. That is an important concession, because a good many telegrams pass between such border towns as Murwillumbah and Coolangatta, Albury and Wodonga, and at many other places where there is a considerable population on each side of the border.
– What is the distance for which a border telegram can be sent for 9d.?
– So long as the sending and the receiving offices are not more than 15 miles apart, a telegram may. be rent anywhere within the Commonwealth for 9d., the fact that it may have to. cross a border makes no difference. The 15-mile radius applies to places like Hungerford as to Sydney or Melbourne. The honorable member for West Sydney will appreciate the position when I tell him that I could get these concessions only by avoiding any loss of revenue; in fact, the revenue of the department will probably increase slightly as the result of these concessions.
– That is my point.
– In my secondreading speech I said that another bill would deal with concessions to members of the Australian DefenceForces. I realize that that bill is not now before the House, but I mention it in passing because it also provides for a reduction of telegraph rates. It would have been difficult to introduce all of the concessions covered by this bill unless I could show that the revenues of the Postal Department would not be reduced by them. The bill is designed to eliminate existing anomalies and to grant as many concessions as possible. I contend that a reduction of the number of words in a telegram from sixteen to fourteen will not impose any increased burden on the public, because it will still be possible to keep most telegrams within a limit of fourteen words. It is true that the previous Postmaster-General, the honorable member for Wentworth (Mr. Harrison), told us that the average number of words in a. telegram is eighteen, but I submit that: that average will fall immediately this amending bill becomes law, and the number of words in anormal telegram is reduced to fourteen.
– Will there not be an increase of the number of telegrams tent on Sundays?
– I have no doubt that the number of telegrams despatched or. Sundays and such holidays as Christmas Day and Good Friday will increase. That will mean additional revenue to the department. I ask honorable members, however, not to confure telegraph rates with telephonic communications.
– What would be the extra cost of conceding an additional two- words in an ordinary telegram?
– It is impossible to give an accurate estimate, but the official view is that it would represent a loss of between £30,000 and £40,000 a year. The Government believes that it is justified in asking the community to accept the small sacrifice involved in the reduction of the number of words in an ordinary telegram, in view of the elimination of many existing anomalies and the granting of valuable concessions.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 4 agreed to.
Clause 5 -
The second schedule to the principal act is repealed and the following schedule inserted in its stead: -
– I move -
That the word “ fourteen “ proposed new second schedule, Part I. - be omitted with a. view to insert in lieu thereof the word “ sixteen “.
If agreed to, my amendment would mean that an ordinary telegram containing sixteen words could be sent for the rates which the Government proposes shall apply to telegrams consisting of not more than fourteen words. The PostmasterGeneral (Mr. Thorby) has told us that he was personally responsible for reducing the number of words in an ordinary telegram from sixteen to fourteen, and gave as his reason that he could not obtain the approval of his colleagues to a measure which would result in a reduction of the revenue of the Post Office. The Minister has destroyed his own argument by telling us that the concessions contained in this bill will increase the revenue of the department by as much as £25,000. His predecessor, the honorable member for Wentworth (Mr. Harrison) said that the increased revenue would be at least £32,000. He regarded that as a conservative estimate.
– The £25,000 will result fromnot only slight increases of revenue resulting from a reduction of the number of words in ordinary telegrams, but also increased traffic in border and interstate telegrams. There is a compensating arrangement.
– The general principle should be the granting of facilities to the public at the lowest possible costOverhead charges go on all the time. The department must have its trunk lines, and sufficient equipment to carry a full load for 24 hours a day. It is much more profitable to have the staff and equipment in full use throughout the day than to have slack, or off-peak, periods. If the gap represented by those off-peak periods can be filled, the business becomes more profitable. That is the reason why these facilities should be placed at the disposal of the public at such rates as will induce people to make the fullest use of them. The greater use made of the facilities provided, the greater the revenue of the department. That argument can be applied to my proposal. As the Minister himself admitted, this bill will not reduce, but rather will increase, the revenue of the department.
– The revenue will increase, but the increase will not he so great as the loss would be if there were no compensating clauses in the bill.
– The result of this legislation must be either an increase or a decrease of revenue and that, in turn, will be determined by how the business is conducted and the degree to which the public makes use of the facilities provided. The Minister’s statement that ordinary telegrams can be confined to fourteen “words is not borne out by the facts. I point out that, in many instances, the address will occupy six or seven words. In respect of telegrams sent to suburban addresses, the address includes the name of the addressee, the street, and the number inthe street, as well as the suburb. These words, together with the name of the sender, will represent seven or eight words in a telegram of fourteen words, leaving only about six words for the message. A telegram sent to me at my home would require six words for the address. The Post Office is not intended to be a taxing machine. It should be sufficient if itprovides the community with facilities without incurring losses. Any profits earned by the department should be returned to the public in the form of concessions, thereby making the facilities more within the reach of all. Until recent years that has been the principle which has guided the postal authorities.
– The consolidated debt of the telegraph section of the department is about £2,500,000.
– The profits shown in the general account amounted to over £3,000,000 last year.
– That was for the whole Post Office system.
– The telegraph section showed a profit of £65,000 in 1935-36; £80,000 in 1936-37; £73,000 in 1937-38, and £51,000 in 1938-39.
– Altogether in the last five years, the total profits have amounted to £284,000. The losses in the previous twelve years totalled £2,490,000.
– I intend to test the committee on the proposal to allow sixteen words in an ordinary telegram.
I understand that the schedule will also affect the Australian Broadcasting Commission.
– The commission will be entitled to ordinary press rates.
– That being so, I trust that it will make the greatest possible use of its facilities in order to provide full and complete news services for every part of the Commonwealth.
.- I ask the Postmaster-General to clarify the position in relation to the use in telegrams of the names of the various States. When the name of New South Wales appears in the address of a telegram, it is counted as one word, but when it appears in the body of a message, it is counted as three words. This is an anomaly which should be corrected. All States should he on the same basis in this regard, and if the name of New South Wales can be counted as one word in an address, it should also be counted as one word in the message itself.
– For reasons which 1 have given in previous remarks, I cannot accept the amendment. I have had to provide for the concessions set out in this bill in such a way as to ensure that the department shall not lose revenue. During the last four or five years, the Telegraph Branch of the PostmasterGeneral’s Department has returned a profit aggregating about £250,000; but in the previous ten or twelve years, it accumulated a loss of about £2,500,000. The department is required, continually, to provide extensions and improvements of its services, and it cannot do so if it is operating at a loss. It is, moreover, impossible to levy the charges in such a way as to ensure that the accounts will actually balance, with neither profit nor loss, at the end of each year. The Government has gone as far as it possibly can go in granting concessions.
In reply to the honorable member for Cook (Mr. Sheehan) respecting the counting of the number of words in the name of a State, I point out that the practice is to regard the name of a State as one word whether it contains one word, as in the case of Victoria, or three words, as in the case of New South Wales, if it appears in the address of the telegram; but if it appears in the body of the message, the actual number of words is counted which, in the case of New South Wales, would be three words. Regulation 26, relating to Commonwealth telegrams, reads -
The following shall be counted as one word in plain language, code and cipher telegrams : -
in the address (not in the text or signature of the telegram). (i)the name of the telegraph office of destination; and
in the case of a telegram addressed to a telegraph office in the State of New South Wales, South Australia, or Western Australia, the name of such State.
That means that in the address on a telegram the name of the office and also of the State to which it is to be sent are each counted as one word. East Maitland, for example, would be one word, and New South Wales would be one word. But if the names appear in the body of the telegram they are counted according to the number of words they actually contain. I point out also, that street numbers appearing inthe address of the telegram are counted as one word, even though they may contain three figures as. say, 471.
– I direct attention to the position that arises in relation to telegrams containing, say, the results of interstate cricket matches. If New South Wales and South Australia are playing a match, and a telegram with the scores is sent to Queensland, the words in the body of the telegram “N.S.W. all out 480” are counted as eight words, whereas they should he counted as only four words. That is not fair. As the names of Victoria, Tasmania., or Queensland are always despatched, in any circumstances, as single words, the names of the other States should be so regarded. I ask the PostmasterGeneral (Mr. Thorby) to remedy this anomaly. If he is not prepared to do so, I shall move an amendment to testthe feeling of the committee on the subject.
. The case put to the Postmaster-General (Mr. Thorby) by the honorable member for Reid (Mr. Gander) is sound, and I ask the Minister to give it favorable consideration. The matter could be dealt with by an amendment of the regulations; there is no need to amend the bill.
– The complaint cannot be remedied in the bill. It may he remedied by an alteration of the regulations.
– Obviously the people who wish to use the names of New South Wales, South Australia and Western Australia in the body of telegraphic messages are penalized under the existing regulation.
Speaking now tothe amendment of the honorable member for West Sydney (Mr. Beasley), I consider that we are very fortunate, at this juncture, in being granted the concessions set out in thebill, particularly in relationto border telegram rates. Honorable members will recollect that during the last warpostal rates were substantially increased. I have no doubt that if this war is protracted the Government will have to increase the charges for the services ren dered by the Postmaster-General’s Department, even though it may hold the view that the department should not be regarded as ataxing machine, for it will become necessary to obtain as much revenue as possible from all available sources. We can hardly expect, in such circumstances, that the charges levied by the Postmaster-General’s Department will be allowed to remain where they are. If times were normal, I should gladly have supportedthe amendment, but at a time like this, when it is necessary to maintain and even increase our revenues, I shall have to vote against it.
.- The justice of the request of the honorable member for Cook (Mr. Sheehan) has been emphasized by the remarks of the honorable member for Reid (Mr. Gander), and I urge the Postmaster-General (Mr. Thorby) to rectify the position. The press is required to pay considerably higher amounts in relation to the despatch of sporting results., because inthe body of telegrams the names of the States of New South Wales, South Australia and Western Australia have to be counted as three, two, and two words, respectively. I urge the Minister to give us an undertaking that he will amend the regulations to correct this inequity.
– If he does not do so, I shall move an amendment of the bill.
– It is not a matterthat may properly be dealt with in this bill, for it relates to the regulations. I am prepared to consider the representations that have been made.
.- I congratulate the Postmaster-General (Mr. Thorby) upon having introduced this measure which provides, among other things, for the abolition of the surcharge on interstate telegrams. Like other honorable members who represent border constituencies, I have been fighting for years for the abolition of this charge, and I am pleased that the Government has at last seen fit to concede the point, I support the amendment of the honorable member for West Sydney (Mr. Beasley) to have sixteen words sent to any part of the Commonwealth for1s. We should have uniform charges for telegrams, as we should have uniform wage rates. I also believe that we should have one Parliament for the whole of Australia, and that the State Parliaments should be abolished.
Question put -
That the word proposed to he omitted (Mr. Beasley’samendment) stand part of the clause.
The committee divided. (The Chairman - Mr. Prowse.) ayes . . . . . . 34
Majority . . . . 13
Question so resolved in the affirmative.
.- I move -
That the following new paragraph be added to Part 1- “ (b) the name of the State in the text of a telegram shall be charged for as one word “.
The names of States in the address of a telegram are counted as one word, hut in the body of the telegram, that is, in the actual message, each word comprising the name is counted separately, so that “ New South “Wales “ is counted as three words, “ South Australia “ as two words, and so on. Thus, if the address consists of six words, the signature two words, and it is necessary to use the name “ New South Wales “ in the body of the telegram, the sender has only three words left out of the stipulated fourteen in which to convey his message.
The CHAIRMAN (Mr. Prowse).I rule the amendment out of order on the ground that it is not relevant to the’ clause.
– I am prepared to consider a suggestion by which the honorable member’s purpose can be achieved without the need for an amendment. By an alteration of the relevant regulation, it can be provided that “ Q “ shall stand for Queensland, “ N “ for New SouthWales, “ V “ for Victoria, “ S “ for South Australia, “ “W “ for Western Australia, and “ T “ for Tasmania. In this way, the name of any State will be charged for as only one word, and there will be a saving to the department and to the sender of the telegram. I give an undertaking that the regulation will be amended in this way.
– We are prepared to accept that assurance.
Clause agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Bill - by leave - read a third time.
Debate resumed from 28th May, 1940 (vide page 1360), on motion by Mr. Thorby -
That the bill be now read a second time.
.- This bill provides that telegrams may be sent by, or to, members of the defence forces at concession rates, and the Opposition gives the measure its cordial support. We trust that in this way communication between soldiers and their dependants will be facilitated.
– I endorse the comments of the honorable member for Hindmarsh (Mr. Makin). No concession that we can give to help the men in the fighting forces can be too great.
Question resolved in the affirmative.
Bill read a second time.
Glauses 1 to 5 agreed to.
Motion (by Mr. Thorby) agreed to -
That the following new clause be inserted - “ 1a. This act shall come into operation on the day on which it receives the Royal assent “.
Title agreed to.
Bill reported with an amendment; report- by leave - adopted.
Bill - by leave - read a third time.
Debate resumed from the 22nd May (vide page 1136), on motion by Mr. Menzies -
That the bill be now read a second time.
– The genesis of this bill is an agreement between the Common wealth Government and Australian Consolidated Industries Limited, in respect of the manufacture in Australia of motor vehicle engines. That agreement was made subsequent to the passage by this Parliament of an act, the purpose of which was to provide a bounty in connexion with the manufacture of motor vehicle engines. That bounty was £30 an engine on the first 20,000 engines, £25 an engine on the second 20,000 engines, and £20 an engine on the third 20,000 engines. That was the decision of this Parliament in connexion with the establishment of an industry for the manufacture in Australia of motor vehicle engines. But the matter did not begin there, so far as this Parliament is concerned. Without indulging in even an amplification of the historical side of the matter, which was well stated in the speech of the Prime Minister (Mr. Menzies), I can state that proposals were brought down by the present Acting Minister for Information (Sir Henry Gullett), which had for their purpose the imposition of an excise duty on the poundage of engines imported into Australia, the object being to provide a fund which would be used to subsidize the Australian manufacture of motor vehicle engines. The Parliament agreed to that course being followed. It will be recalled that the Minister directing negotiations for trade treaties, as the honorable member for Henty then was, ceased to be a member of the Lyons Government, and on several occasions subsequently, interested himself, as a private member, in an endeavour to push the Government, of which he had ceased to be a member, into what he held would be a more vigorous prosecution of the purpose for which Parliament had been moved to act. It appears, from such sources of information as have been made available to me - I have had an opportunity to scrutinize the file - that the Lyons Government had before it about fourteen submissions, none of which it regarded as acceptable. So far as I am able to say, from the somewhat hurried examination that I could make of these proposals, I rather agree with the view that not one of them was put forward in such a way as would meet the request of the Lyons Government. That Government had rejected the report of the Tariff Board, which contemplated a step-by-step progression in respect of the development of this industry. So the matter remained until the right honorable member for Kooyong became Prime Minister. So far as I have been able to ascertain - and the speech of the right honorable gentleman supports my construction of the matter - the Prime Minister interested himself in an endeavour to have the industry established. Prior to the presentation to this Parliament of the Motor Vehicle Engine Bounty Bill, all that happened was that the Department of Trade and Customs, and its then Minister, the honorable member for Macquarie (Mr. John Lawson), had endeavoured to get something done. I think it is fair to say that, when the bill for the payment of a bounty was introduced into this Parliament, it, appeared to the Minister for Trade and Customs, and to the Government, that no positive proposal of a practical nature was before them for consideration. Even the proposal which Australian Consolidated Industries Limited had been encouraged to make in general outline, in a form which it believed would be most acceptable to the Government, was one which at that stage the Government did not feel disposed to accept; because the files indicate that, on the Saturday prior to the introduction of the measure, the then Minister for Trade and Customs saw the general manager of Australian Consolidated. Industries Limited, and conveyed to him a proposal of a type which represented what the Cabinet then considered would be more acceptable than that contained in the letter which Mr. W. J. Smith had written to the Government, dated the 22nd November. What that proposal of different type might represent, I have jio means of knowing. I can only say that, because of the discussion which the Minister had with the general manager on that Saturday, Mr. Smith on the Monday wrote to him a letter in which, in effect, he withdrew from, further participation in the discussions, and the general proposal which had been made from the point of view of Australian Consolidated Industries Limited proved abortive, the Cabinet’s proposal not being acceptable to Mr. Smith, and his proposal not being acceptable to the Government. Thus the slate was wiped clean when the Minister brought down the Motor Vehicle Engine Bounty Bill for the consideration of this Parliament. Therefore, I say, it was perfectly reasonable that, in the course of the debate on the Motor Vehicle Engine Bounty Bill, there was no obligation on the Minister for Trade and Customs - unless he felt so disposed, which apparently he did not - to occupy the time of the Parliament in discussing various proposals, not one of which, at that stage at all events, indicated that there was any possibility of practical development to the point of warranting an agreement being made between the Government and any one or other of the proponents. So this Parliament assembled to discuss a straightout proposal which would represent what the Government and the Parliament was ready to do in order to encourage the manufacture of motor vehicle engines in Australia. It is true that, for many years, the general practice of this Parliament in respect of the encouragement of Australian industries, and particularly of new industries, has been associated with certain general principles. The Parliament has the choice of greatly increasing the existing duties on goods imported, in order to give to the Aus tralian manufacturer protection against competition by importers. As a matter of fact, on occasions the Parliament has ratified what are described as “ deferred duties “ ; that is to say, it has intimated that, after a given period, the duty imposed on a particular import will be increased. This has usually been ‘associated with a proposal for the payment of a bounty. In this case, however, the Government decided to encourage Australian manufacturers, by means of a bounty, to engage in the manufacture of motor vehicle engines. The bill passed both Houses of Parliament. The Parliament then had no means of knowing whether or not any potential manufacturer would receive assistance in respect of the manufacture of motor vehicle engines in a form supplementary or additional to that prescribed in the Motor Vehicle Engine Bounty Act. Not even Mr. Smith could have had such knowledge at that time. Although he had made the proposal that he should be given assistance additional to the bounty, the negotiations in respect of it had been terminated; they had not arrived anywhere, but, on the contrary, had ended. No other entrepreneur in Australia was in a position to know that an agreement of the type subsequently made with Australian Consolidated Industries Limited was open for negotiation. The Parliament takes the view: “ If we increase the duties on imports, we shall raise local costs to users of the commodity in Australia; therefore it is unwise, until we get the industry going and have a local source of supply, to increase the price that the user has to pay for an article which, for a period at least, must be imported, at the commencement in total and, as the industry in Australia becomes developed, probably in less volume, but during the whole of the time imported in competition with the growing output of the article manufactured in Australia “. So the principle of a bounty, as applied to the motor vehicle engine - which all parties in this House more or less agreed was a reasonable venture for Australia to embark upon - received overwhelming approval. During the course of the debate, indications were given as to what was expected of this industry. My Deputy Leader (Mr. Forde), who was in charge of the debate for the Opposition. made it plain that we should welcome and assist the establishment, of this industry, that we approved of the principle of the bounty, but that there was one stipulation which we felt ought to be indicated, namely, that no monopoly should be established in connexion with the manufacture of motor vehicle engines. Outside that point of major importance, the Opposition had no cavil against what the Government proposed to do. The extraordinary feature of the matter, in my view, is that, immediately the bill was passed by both Houses, and before the rest of the community who might be interested were in a position to know the terms of the Motor Vehicle Engine Bounty Act - as it had then become - negotiations were apparently resumed with the General Manager of Australian Consolidated Industries Limited, with the result that certain matters moved rather quickly. I do not know the character of the discussions which took place at the resumed negotiations between whoever represented the Government - I understand from the speech of the Prime Minister that it’ was the then Minister for Trade and Customs - and the General Manager of Australian Consolidated Industries Limited, or when those discussions took place, but I do know that, on the Wednesday following the passage of the legislation through both Houses of this Parliament, an officer of the Department of Trade and Customs wrote to an inquirer, indicating that the department had no knowledge of any person who was likely to engage in the manufacture of motor-vehicle engines in Australia. That was on the 12th December, but on the Friday of that very week urgent telegrams were despatched by the Department of Trade and Customs to four companies in Australia asking them were they still interested in the proposals, ‘that is to say, in discussing how to manufacture motor-vehicle engines in Australia. At that stage the Motor Vehicle Engine Bounty Bill had become an act. That act limited the payment of the bounty iu respect of the manufacture of motorvehicle engines to companies that were predominantly Australian in their capita] subscription and control. Quite clearly those four telegrams were despatched to companies which, without precise knowledge of their organizations, I venture to say, could regard themselves as being doubtfully qualified to engage further in discussing with the Government the manufacture of motor-vehicle engines. But , t:he truth is that those urgent telegrams gave to those companies only 48 hours in which to communicate what their stand would be. The telegrams were despatched late on the Friday evening to executives that may or may not do business on Saturday morning. The replies were expected to be on hand on the Monday, because Cabinet was meeting on that day in Sydney. So, on the 15th December, those telegrams were despatched with requests for replies that were to be considered by a government which was to assemble within 48 hours and did so assemble. It would appear to me that at that Cabinet meeting on the 17 th and 18th December, the Government made with a company an agreement in respect of the manufacture of motorvehicle engines which greatly extended the aid which this nation contemplated giving in respect of that manufacture, so far as the Parliament was taken into the confidence of the Government. So I felt, when I learned this, that, whatever be the arrangements that this Parliament approves in respect of the initiation of a new industry, those arrangements should be identical in character for the whole industrial community of this nation, and that there should not be available to any representative of a .company or group of companies knowledge that was withheld from the Parliament and from those who might enter into competition with that company or , those companies.
– ‘The honorable member means that he objects to monopolies.
– I mean that nobody in this Parliament knew that it was intended to invoke the provisions of the National Security Act in order to assist a particular company to withstand competition in Australia. Nobody knew that the Government in addition to paying the bounty would be willing to consider a .proposal to increase greatly the customs duties against competitive products as further protection. That is the point that I make and it seems to me to be germane; to be the very heart of this matter. It is said that this agreement with the Australian Consolidated Industries Limited is imperative if the Australian control of this mo tor- vehicle engine industry is to be secured. The answer to that is that the Motor Vehicle Engine Bounty Act provided for the Australian company protection against a foreign company that would manufacture within Australia. It provided for it in this way: If any company, which was not Australian predominantly - and there are such companies in Australia - engaged in the manufacture of motor-vehicle engines, it would be entitled to do so under the terms of the Motor Vehicle Engine Bounty Act, hut would not be paid the bounty. The Australian company that engaged in the manufacture of the engines would be paidthe bounty. Thus the protection to the completely or predominantly controlled Australian company, as against a company predominantly controlled from outside Australia, was agreed to bythis Parliament. Parliament decided that the degree of the protection should be the payment of a bounty to Australian companies and the withholding of a bounty from foreign companies which manufactured engines in Australia.
Mr.Rankin. - Did the honorable member tell the people at Corio those facts?
Mr.CURTIN- Yes, not the Ford company, but the electors of Corio, and no doubt that is when the knowledge of this matter, insofar as I was able to submit it, happened to become somewhat of a stalking horse in the by-election. That represents the position. The Government said, “ We will use the powers that were given to us as the result of the war in order to prevent any possible Australian competitor, who is able to get the requisite capital to engage in the manufacture of motor-car engines, from engaging in such manufacture “. That is more than this Parliament authorized when it passed the Motor Vehicle Engine Bounty Bill, and it is a departure from what I believe to be the essential principles of the initiation of a new industry in Australia. I and my party are willing to do our utmost to give protection to Australian industry as against external competitors by way of bounty because, not only can a bounty be supplementary to duties, but also it can be made subject to specific provision that, while foreign companies might manufacture in Australia in order to control and ultimately squeeze out of existence the Australian-owned enterprise, they may not enjoy the bounty. Provision for the payment of the bounty to one and not the other in those circumstances is a proper exercise of the powers of this Parliament to discriminate, as I hope it will always discriminate, in the interests of the Australian-owned enterprises. The Government did more than that, because, if it desired that Australian Consolidated Industries Limited should have protection only as against foreign competitors, the Motor Vehicle Engine Bounty Act provided that protection. But the agreement was made and the whole purpose and the only necessity for that agreement are the protection of Australian Consolidated Industrie’s Limited, not against foreign companies that might manufacture in Australia, but against a rival group of Australian manufacturers that might seek to compete against it.
– I cannot understand that point of view.
Mr.CURTIN.- Let me put it to you then. The protection given to the Australian company as against the foreign company, both of them manufacturing in Australia, is set out in the bounty act. The Australian manufacturer manufacturing here will get the bounty, but the foreign manufacturer manufacturing in Australia will not get it.
– Under the agreement ?
– No, under the law.
– To what extent?
– The bounty act makes it contrary to the law for the bounty to be paid to the company whose share capital is not, and control is not, predominantly Australian.
– Sixty-six per cent. Australian.
– I used the word “ predominantly “ because two-thirds is predominantly. That is clear. The Australian manufacturer alone will get the bounty. We agreed in this Parliament to that being the case and I am not one bit abating my support for that principle.
– Is there any suggestion that there was an Australian group in opposition to Australian Consolidated Industries Limited?
– If there were no other company likely to engage in the enterprise, why the necessity for the agreement ?
– Another company would have to put up the proposition and show that it could carry it through.
– It would have to get its capital. If it could not produce engines, its business would fail and its capital would be lost. This Parliament does not pay a bounty only because a company starts. It pays the bounty if engines are produced according to specifications as to horse power. This Parliament left the field open to Australian enterprises to manufacture motor engines; but the agreement closes the field to all Australian enterprises with the exception of Australian Consolidated Industries Limited.
– That was not the purpose of the agreement.
– Whether that be so or not, that is the result it achieves. Solely because of that result I am opposed to the ratification of this agreement. If the Government really felt that the only practical and economic way in which to manufacture motor-vehicle engines in Australia was through the instrumentality of a monopoly, it should have said so when the whole business was before Parliament; but no hint was given to Parliament, when we were dealing with the bounty bill, that, that was so. Parlia ment should have been told. We know that Ministers had been engaged in looking at the matter from that aspect. The Prime Minister said that he put it to State premiers and they would not agree. He could not have done it but for the outbreak of war and the powers vested in the Government by the National Security Act. The position of the Opposition is clear. It is in favour of the establishment of this industry, but it believes that the field should not be restricted to one company. It believes that what has occurred in connexion with the Broken Hill Proprietary Company Limited may occur again; the magnitude of the company’s operations may give to it a much greater field than- a smaller company could hope to obtain. That is the inevitable result of competition being overcome, not without the authority of Parliament, but in the absence of any direction by Parliament. Whatever this Parliament does, it should not set out definitely to encourage and facilitate the establishment of monopolies. It should oppose their formation. The agreement is unnecessary if only one company is likely to manufacture motor vehicle engines in Australia, and it is unjust if more than one company is likely to start such operations. Therefore, I move -
That all the words after the word “That” be omitted, with a view to insert in lieu thereof the following words: - “ the opportunity to manufacture motor-car chassis, including the engine, be afforded to more than one Australian company whose capital, structure and control are in accordance with section 6, sub-section (1), paragraphs (a) and (7>), of the Motor Vehicle Engine Bounty Act, and that immediate steps be taken to amend the proposed agreement between the Commonwealth and Australian Consolidated Industries Limited to give effect to the foregoing; and furthermore, that in the event of more than one Australian company being established for the said purpose, the number of engines and the total amount of bounty payment be reviewed “.
The latter section of the amendment has been inserted because of the argument advanced by the Prime Minister and various sections- of the press that, if there were more than two companies, the unit of manufacture would have to be reduced in each case, so that there might be grounds for seeking an increase of the bounty. Should that argument be borne out, my amendment, it’ agreed to, will leave the way open for the bounty to be increased. It does not provide merely that the bounty shall bc increased.
– .1 think that the Labour party will lose the Corio scat on that amendment at the general elections.
– I do not think so. The right honorable gentleman raised -:o many issues at the recent byelection in the Corio .Division that I. am not sure whether it was this issue or some other one that was responsible for the defeat of the Government’s candidate. The Labour party does not put forward programmes or state cases merely in order to meet a possible contingency in a certain place. It has always regarded the subject of the manufacture of motor cars and their pants in Australia in the light of its national importance. That is its policy in connexion with a great number of other things.
– The Leader of the Opposition-
– The Acting Minister tor Information, who has been so kind as to thrust himself into the debate ait thi3 juncture, knows that when he was in opposition, he voted for the lowest possible rate3 of tariff, but when he moved to the Government side of the House, he voted for the highest rates possible! The Opposition is uncompromisingly opposed to the agreement, the only real effect of which would be the limitation of Australian capital and enterprise in respect of the manufacture of motor-vehicle engines to Australian Consolidated Industries Limited. I commend to the House the amendment which I have moved.
– I second the amendment, reserving my right to speak later.
.- I very much regret that Parliament should be required to discuss a bill of this kind at a time of Empire crisis. The bill must inevitably divide not only the House, but also the Government, at a time when the Prime Minister (Mr. Menzies) himself has appealed to tho nation for a closing of the ranks and a sinking of differences. It seems to me to be impossible to deal with a measure such as this without accentuating party differences of opinion. About six months ago, this Parliament passed a bill providing for the payment of a bounty on the production of motorcar engines in Australia. That measure was a practical gesture of encouragement to anybody interested in the manufacture of motor car engines. The bill now before the House goes beyond that, first by restricting the right to receive bounty to one company, and secondly, by attempting to restrict the right to manufacture motor car engines to one firm.
Before proceeding to examine the bill in detail, honorable members should ask themselves this pertinent question : Will this new industry, if started by mean3 of tlie encouragement offered in the bill, help us to win the war? The war has reached a, stage at which all of us realize that, we must not only put more trained men in the field, but also direct our maximum industrial effort to the production of the things which are essential for the winning of the war. We must enormously increase our output of guns, aeroplanes, and munitions, and we must immediately embark upon a programme of shipbuilding,’ a work which would definitely assist us to win the wai1. In order to answer the question as to whether the manufacture of motor vehicles in Australia would also assist our war effort, I draw attention to the evidence given on behalf of the Department of Defence to the Tariff Board regarding the value of this industry from a defence point of view. On page 22 of the Tariff Board’s report, the evidence given by the then secretary of the Department of Defence, Mr. Shepherd, is recorded as follows: -
Tlie military authorities are of opinion that there are ample lorries and motor cars in Australia to meet the requirements of the fighting services in war extending over a considerable period, even after allowing for essential civil requirements, as civil motor transport is likely to he severely restricted by shortage of fuel.
– When was that inquiry held?
– About two years ago.
– The report is dated 1937 - three years ago. The inquiry was probably held much earlier.
– Our reservoir of skilled men capable of producing guns, aeroplanes, munitions and ships, and of forming efficient ground staffs for the Royal Australian Air Force is by no means inexhaustible. The Air Force aeroplane factories are to-day short of their requirements of artisans. To draw upon that reservoir of skilled, or partly skilled, labour for any purpose other than the production of war requirements would impede the national war effort and reduce the maximum rate of production which could otherwise be attained. I draw the atten- tion of the House to answers given the other day by the Minister for Supply and Development (Sir Frederick Stewart) to questions asked in this House by the right honorable member for Cowper (Sir Earle Page). The questions were -
The Minister stated in reply -
Not at present. 2. (i) In Wirraway production, in addition to the full day shift in the engine and .aircraft factories, a half capacity afternoon shift is being worked in each factory and a half capacity night shift in the engine factory.
The training of personnel is proceeding, and every effort will be made to secure a sufficient number of trained men to serve the needs of this and other industries vital to the defence requirements.
Those answers are relevant to the subject before the House to-day. Not one man should be encouraged, especially by the Government, to engage in a new nonessential industry until the nation’s full requirements of skilled labour for its war effort are obtained. For the reasons I have stated, I give notice that I intend to move, as an addendum to the amendment moved by the Leader of the Opposition (Mr. Curtin) -
That the following words be added to those proposed to be inserted: - “but assistance to the manufacture of motor- vehicle engines in Australia be deferred until such time as, in the opinion of Parliament (expressed by Resolution) arrangements have been made and proved to be effective to overcome the inadequacy of the wartime supply of munitions and aeroplanes, and to commence a programme of shipbuilding, so that Australia’s maximum industrial effort in the production of the things most essential to win the war may not be impeded “.
– If we cannot manufacture motor cars, how can we manufacture ships?
– I believe that we can. manufacture both, but we should not drain our resources of trained man-power in order to do something which is not essential to the nation’s war effort. This is. a bill of restrictions, or monopoly provisions. I draw attention to paragraph 12 of the schedule of the bill which is one of the assurances proposed to be given by the Commonwealth to this one firm, Australian Consolidated Industries Limited. It states -
That the Commonwealth will use its best endeavours to limit production of motor cars and trucks of 15 horse-power or over to the proposed company for a period of five years.
It is one thing to confine the bounty to one firm, and an entirely different thing to refuse to other firms the right to manufacture motor cars. Such a prohibition of manufacture is almost unthinkable in this country. The Leader of the Opposition dealt more particularly with Australian firms employing Australian capital, but I propose to carry his argument a little further and ask what would happen if other big establishments which are now operating in this country, such as the Ford Motor Company or General Motors-Holdens Limited, should conclude that their established connexions would be adversely affected by a tightening of the restricted quotas which operate to-day in respect of imported chassis - and it might well he argued t!hat further restrictions may naturally be expected as the corollary to local manufacture - and they decided to manufacture engines and chassis here? I have had no communication with either of the firms mentioned, hut I imagine that those firms would decide that they would manufacture their own engines and chassis here in Australia without a bounty rather than run the risk of losing their business and the connexions which they have built up. Supposing these firms were to say, “ “We cannot obtain a bounty, because the conditions under which our capital has been subscribed preclude us from obtaining it; but rather than lose the business that we have built up, we think that it is preferable, even though we may lose money for a time, to build our own engines and chassis in this country “. Is it proposed, under paragraph 12 of the schedule, absolutely to prohibit the manufacture by such firms of engines and chassis in Australia, even though no bounty be payable to them? Even if in war-time we have the power to do such a thing, on what reasonable ground could those powers be invoked? It seems to me that we can say, “You cannot have a bounty because your capital has not been raised in the way that entitles you to it “ ; but the suggestion that we may say, “You shall not manufacture engines or chassis here even without a bounty “ is one of the most extraordinary things that I have ever heard in this Parliament. Last week, the Prime Minister, in what was undoubtedly an admirable speech from his point of view, referred to these companies as “ foreign companies making huge profits “. No doubt the reference to huge profits is true - I notice that one of these companies is paying for the year just closed a dividend of 55 per cent, on its ordinary shares - but the point I make is that the inference to be drawn, and the inference which I think the right honorable gentleman intended to be drawn, from his reference to foreign companies making huge profits, was that the high prices of cars in this country, and the huge profits made by the industry, are due to our dependence on imported chassis. The Tariff Board report shows definitely that it is not in that direction that we must look to account for the very high prices of cars in Australia. That prices of cars in this country are exceedingly high, no one doubts. If any one wishes to compare the prices here with those obtaining for similar vehicles in the United States of America, he will see a most interesting table on the last page of the Tariff Board’s report. There is there a list of five American cars, which shows that, when the American price is converted into Australian currency, the prices charged for those cars in Australia is, in one instance, two-and-a-half times the price ruling in the United States of America. Although the prices shown in the table were those which ruled about two years ago, I submit that the comparison is quite good to-day. The following table shows the respective prices charged in the United States of America and in Australia for the five cars mentioned : -
Honorable members will see that in respect of the Oldsmobile and Pontiac cars, the Australian price is double the American price ; that the price charged in Australia for a standard Chevrolet is 2£ times the American price; that the Terraplane costs 2£ times as much here as in the country of manufacture; and that for the Plymouth de Luxe 2-J times the American price has to be paid by the Australian purchaser. Where have we to look to find the explanation of the extravagant prices charged in Australia compared with the American prices for similar cars ? Whatever the reason, I emphasize that it is not clue to the necessity to import the chassis and engines. The portion of the car which is imported - the chassis, which includes engine, frame, axles, driving shaft, steering gear, most of the electrical equipment, and some other parts, which I submit are the most important parts of the car - is seen to be by far its cheapest part. If honorable members want evidence on that point, I direct their attention to page 13 of the Tariff Board’s report, where they will see a table which sets out the landed cost, freight paid but without duty, of the chassis of certain American and Canadian, as well as British cars. The landed cost, without duty, of American and Canadian chassis, represents 22 per cent, of the final cost to the Australian public of such cars. That is to say, the landed cost of an American or Canadian chassis, which is sold as a completed car in this country at £350, is £77. I am one of those who would like to see manufacture extended in this country, so long as it can be done on lines that are even reasonably economic; but whether we can ever produce at a price even remotely approaching £77 the parts of a car that can be imported for that sum, remains to be seen. We can definitely lay down that it is not here that we must look for an explanation of the high prices of cars in Australia, because after a chassis is landed its price is multiplied four and a half times.
– Would it not bo fairer to add the duty before making the comparison ?
– I am taking the actual cost, because no duty would he collected on locally-made chassis. I admit that the duty is a matter to be taken into consideration. The £95 flat rate of customs duty imposed on imported sedan bodies is probably a greater contributing factor to the high price of motor cars in this country than is the fact that we have to import the chassis. Because of the efficient mass-production methods which are employed in Australian motor ear body-building, I believe that a duty of about one-quarter of £95 on imported sedan bodies would give ample protection to the local industry. The reduction of the duty to that level would at least compel the distributors of cars to sell them at lower prices. With the trade door just a little bit ajar, they would be compelled to make their prices conform more closely to competitive levels in other parts of the world; but when the door is locked, bolted, and barred by an absolute prohibitive tariff on motor-car bodies, it is open to these companies to charge very much higher prices than would otherwise be possible. Sound though these arguments may be in themselves - and I submit that they are absolutely incontrovertible - I do not -wish that they shall disturb the main argument, of my speech. I want to impress on honorable members that the grim reality of the war situation demands that we shall concentrate our industrial man power on the production of those things which are essential to victory. We can look to the manufacture of motor car engines and chassis as a possible means of absorbing skilled labour after the war is over. I repeat that for the present, we should concentrate the energies of our mechanics, fitters, engineers and improvers upon guns, aeroplanes, munitions, and ships, and refuse to encourage the sidetracking of any part of our maximum industrial war effort to what, after all, is not essential work to-day. I shall later move the amendment which I have foreshadowed.
Mr. SPEAKER (Hon. G. J. Bell).The amendment foreshadowed by the honorable member for Gippsland may not be moved until the House has decided that the words which the Leader of the Opposition has moved to omit should be omitted. The honorable member may move his amendment only when the question of inserting certain words is before the House.
– My intention was 1o move my amendment as an addendum to the amendment of the Leader of the Opposition when that honorable gentleman moves to insert the words proposed to be inserted.
.- In moving the motion for the second reading of this bill the Prime Minister (Mr. Menzies) expressed curiosity as to where I would stand in connexion with the proposal to establish the motor vehicle engine manufacturing industry in this country. I shall satisfy his curiosity at once. I favour the manufacture of the complete motor vehicle in Australia at the earliest possible date compatible with the availability of the skill, labour and resources to do the work.
I wish to contrast the procrastination of the Lyons Government during the four years preceding the introduction of the Motor Vehicle Engine Bounty Bill with the indecent haste that has been manifested by this Government, in the last six mouths or so, to give a certain Australian company a monopoly in relation to this undertaking. In 1936 the Lyons Government undertook to investigate the possibility of establishing this industry in the Commonwealth. If the Labour party had been in power at that, time, the industry would have been actually established long before .this. If the Government then in office had informed those already engaged here in the making of motor car bodies that it was prepared, by the provision of certain protective duties, to encourage the construction of complete motor vehicle engines here, the industry could have been established within two years without the provision of any bounty. A degree of inertia has been exhibited in connexion with this proposal by certain companies already engaged in the manufacture of motor car bodies and parts within the Commonwealth. I concede quite frankly that from their own point of view those companies had adequate reasons for their attitude. Take as an example the position of the Ford Motor Company of Australia Limited, which is controlled by the Ford Motor Company of Canada. The Canadian company has established a unit of production in the sister dominion which manufactures 100,000 motor engines per annum. Obviously, it is of greater advantage to that company to manufacture in Canada all of the engines it requires than to divide its production and manufacture 80,000 engines in Canada and 20,000 in Australia. I suppose what I have just said applies, with equal force, to General Motors-Holdens Limited.
Had the Government faced the situation in a statesmanlike way, it could have issued what I shall describe as an ultimatum to the interested companies, that it had decided that within, say, two years the manufacture of the complete motor vehicle must be carried out within Australia. It could also have laid on the table of Parliament an appropriate tariff schedule to ensure the degree of protection that it considered necessary to achieve this end. Had that been done in 1930, motor vehicle engines could have been manufactured in Australia by 1938, with the result that for the last four years this country would have enjoyed an increasing benefit from an expansion of employment, and a greater development of certain resources which it possesses. We should also have had to-day a reserve of skilled labour and equipment upon which we could have drawn for the manufacture of munitions and aircraft, the lack of which is now causing us such grave concern.
Candidly, I believe that even if at this late date the Government would undertake an immediate survey of our available man-power and our resources of material and equipment needed for this work, it would find that Ave could adopt a stepbystep production of equipment which would enable us to reach our goal of the complete manufacture of motor engines without the provision of any bounty at all. That, in my opinion, would- be the best way to tackle this problem.
However, between 1936 and 1938 the Government did nothing whatsoever, and in 1938 it merely referred the whole subject to the Tariff Board for investigation. The Tariff Board subsequently presented a report, which advocated the establishment of this industry in stages of one step ot a time.
– It did not “ ask to see the distant scene “.
– No. Consequent upon the furnishing of the report by the Tariff Board the Ford Motor Company of Australia Limited submitted certain proposals to the Government in March, 1939. As stated by the honorable member for Gippsland (Mr. Paterson), the position at that time was that, of the total value of the finished motor car, 80 per cent, was represented by Australian industry and manufacture. Only 20 per cent, of the total value was represented by imported parts and only 25 per cent, of that 20 per cent, was represented by the engines. The Ford motor company made an offer to the Government to concentrate upon the manufacture in Australia of those imported parts comprising 75 per cent, of the 20 per cent, imported; that is to say, on imported parts other than the engine. That proposal would have involved the expenditure of £350,000 on capital equipment, and it would also have provided for the continuous employment of an additional 150 employees, together with the use of an additional 3,000 tons of steel annually, as well as certain leather goods and trimmings necessary to the finished article. The Government entirely ignored that offer.
Towards the end of 1939 this Parliament passed the Motor Vehicle Engine
Bounty Act. I am not certain about the negotiations the Government conducted with Australian Consolidated Industries Limited prior to the passing of that measure. This point is abundantly clear, however, that the passing of the act com pletely altered the conditions that had previously existed in the motor-car industry of Australia. An entirely new set of conditions was laid down, which no one can deny altered the basis upon which the Ford Motor Company, of Geelong, andGeneral Motors-Holdens Limited, of Adelaide, were operating. The bill was assented to by His Excellency the Governor-General on Friday, the 15th December. The ink could not have been dry on that signature before telegrams were despatched to, I understand, four different companies in Australia. I shall deal particularly with the Ford Motor Company. The telegram that was despatched to that company at 6.35 p.m. on that day asked whether it had any proposals to make to the Government in conformity with the new conditions laid down in the act just assented to. The telegram read -
Canberra,6.35 p.m. 15 December, 1930.
Ford Motor Company, Geelong.
Would appreciate telegraphed advice at latest early Monday morning whether your company is interested in motor vehicle engine and chassis manufacture in Australia in accordance with terms set out in Motor Vehicle Engine Bounty Act passed by Commonwealth Parliament this month. Kindly reply Sydney Customs House.
Minister for Trade and Customs.
A five-day week is worked at the Ford Motor Company’s establishment at Geelong, and no work is done on Saturday. Yet the telegram required a reply by Monday at the latest. On Monday, at 10.25 a.m., the managing director of the Ford Motor Company at Geelong despatched the following telegram to the then Minister for Trade and Customs (Mr. John Lawson) : -
Geelong, 10.25 a.m. 18 December, 1939.
Replying your telegram December 15th, my company is interested in any development affecting the future of the automotive in dustry. Have not received a copy of the Bounty Act, but from press reports I gather that under its provisions my company is not eligible to make you any proposals owing to its corporate structure with non-resident shareholders. Under date March 29th, 1939, my company submitted to the Government certain proposals for the manufacturing of important chassis components. 1 would be pleased to again discuss the whole question with you at such time and place as may suit your convenience.
On the next day, certain correspondence passed between the Commonwealth Government and Australian Consolidated Industries Limited which we are asked to believe amounted to a completed agreement. Thus we see the sequence of events. The bill was assented to on Friday. Late on Friday night, a telegram was sent to this company asking if it had any proposal to make, and giving it 48 hours to send a reply. The company sent its reply on Monday, and the agreement was entered into with the company on Tuesday. Earlier in my speech I described this as indecent haste, but, really, words fail me to describe adequately this callous disregard of existing industries engaged in the manufacture of motor cars in Australia. Honorable members may have read a book by Ellen Wilkinson called The Murder of a Town. This agreement is, in effect, the deliberate murder of industries already established in Australia.
– Let me remind honorable members that the Ford Motor Company in Australia is not a foreign company, although it is referred to as such by the Prime Minister in one of his letters to Australian Consolidated Industries Limited. The Ford Motor Company of Australia Limited is owned and controlled by the Ford Motor Company of Canada, which is entirely separate from the original American company. The Ford Motor Company of the United States of America sold its rights to a Canadian company owned and controlled by Canadian shareholders. I can imagine the uproar there would be on the other side of the House if I were to refer to the Canadian Expeditionary Force in France as a foreign army. The Ford Motor Company of Canada is not a foreign company; it is a British company, and I strongly object to the use of the word “ foreign “ in the correspondence which led up to this supposed agreement. Having regard to the critical position of Great Britain at this moment, I say that it is the wrong time for Parliament to deliver what amounts to a “ kick in the pants “ to any American company interested in industries already established in Australia. The Prime Minister has eulogized Australian Consolidated Industries Limited directly, and has done so indirectly by trying to throw mud on those who undertook the initial processes associated with the manufacture of entire motor cars in Australia.
Those who live in glass houses ought not to throw stones. Australian Consolidated Industries Limited began as the Australian Glass Company. It started with a capital of a little over £250,000. By means of mergers and the purchase of other businesses out of undisclosed profits, it established a monopoly in the manufacture of glass in Australia. Throughout the years, the company has paid very high dividends, amounting to 19 per cent. on one occasion, and 21 per cent. on another occasion. Not only was it able to pay such dividends, but it was also able to accumulate such big reserves that in March, 1939, it produced out of the hat, as it were, close on £4,500,000, which was issued as undistributed profits to its shareholders. Eleven fully paid-up shares were issued for every four shares originally held. Here is what one financial journal, published in January, 1940, had to say of the operations of this company - .
Earnings of Australian Consolidated Industries Limited as per accounts of the lasttwelve months, although representing only about 9 per cent. on the present market value of the shares, represents 33 per cent. flat on old ordinary capital.
Here is an extract from the Investment Digest of March, 1939, the date on which the distribution of bonus shares took place -
The method of distributing bonus shares is designed to exempt it from taxation. The higher capitalization will permit a distribution of the same amount of profits at a lower rate of dividend, and thus prevent the public criticism that might be directed against a higher rate of dividend.
The company evaded taxation on the whole of the £4,500,000 which ; was distributed in the form of bonus shares. I have said that these bonus shares came out of the hat. In point of fact, they came out of the pockets of the Australian people. Every milk bottle, every been bottle, every glass utensil, every window pane in the humblest cottage paid tribute to this financial octopus. Every one of the 1,500,000 householders in Australia has paid tribute to an amount of £3 to the lords of Australian Consolidated Industries Limited. I do not need to hazard a guess at the profits which this company hopes to make out of its monopoly agreement, because I can calculate from the share quotations on the Stock Exchange exactly what is the expectation of monopoly profits.
– The honorable member can gauge it from the profits of theFord Motor Company.
– The Ford Motor Company has never paid more than 15 per cent., and frequently the dividends have been less. Before this agreement was entered into, the shares of Australian Consolidated Industries Limited were quoted on the Stock Exchange at 31s. each. After the making of the agreement, they rose to 38s.
– That is not true.
– It is true. That was an appreciation of 7s. a share which, on a capital of nearly £4,000,000, represented a total appreciation of share value, because of the monopoly agreement, of approximately £1,000,000. That is the measure, not of the total profits expected to accrue from this agreement, but only of the expected excess of monopoly profit over normal profit. If that profit is divided by the number of units which it is proposed to manufacture under the terms of the agreement, it will be seen that every single motor-car engine will be loaded with a charge of approximately £20 to pay principal and interest on the increased share appreciation. That is what the consumers would have to pay because of the monopoly character of this agreement.
I believe that the Prime Minister has, accidentally perhaps, confused the House regarding the issue at stake. According to a press statement on the 31st
January last, the Prime Minister is reported as having said -
The Commonwealth Government has decided that, having regard to the issues raised in relation to the. agreement made by it with Australian Consolidated Industries in respect of motor engine and chassis manufacture in Australia, the whole transaction will be submitted to the Commonwealth Parliament for ratification when Parliamentre-assernbles. This will mean that, pending ratification, the operation of the contract will be suspended.
Later on in the same statement, reference is made to the “ agreement “. I take the point that there is no agreement, and there certainly is no contract, as mentioned in the statement of the Prime Minister. A contract is an agreement enforceable at law. I understand that it must consist in an offer and an acceptance. We have an offer by Australian Consolidated Industries Limited, but the letter of the Prime Minister to Australian Consolidated Industries Limited docs not, in any sense of the term, constitute an acceptance of the original offer. It does, in fact, make a counter offer. That counter offer has not been accepted by Australian Consolidated Industries Limited, and, consequently, no agreement or contract exists at this moment for Parliament to ratify. Even if this Parliament passes what purports tobe an agreement, all that it can do is to say that, within the terms set forth in the schedule - the terms announced in these two letters - at some future date an agreement or contract may be made between the Commonwealth Government and Australian Consolidated Industries Limited. I mention this, because Iunderstood the Prime Minister to say that Australian Consolidated Industries Limited was tobe commended for having agreed to suspend the operation of the contract. There is no contract; consequently, it ought not to be commended for what it has not done.
In regard to the terms of the bill itself, there is no definite undertaking in the assurances of either Australian Consolidated Industries Limited or the Commonwealth as to when the manufacture of motor-vehicle engines will commence. In the first paragraph of the undertaking of Australian Consolidated Industries Limited the word “ultimately” is used. That deficiency ought to be rectified. If the bill reaches a later stage, I propose to move an amendment to the effect that the time within which the actual manufacture of these engines shall be commenced shall be explicitly stated in the agreement. I believe that the agreement should provide that, of the 20,000 units contemplated, at least 33 per cent. should he produced during the first year, a further 33 per cent. in the second year, and the balance within three years. I repeat, that there is nothing in the bill to show whether the company will begin its operations this year next year, or within the five years mentioned in paragraph 12 of the proposed agreement. In actual fact, if Parliament should decide to agree to the proposals contained in the bill, this comnany could sit tight on its monopoly until the war had ended, when it could purchase capital equipment cheaply and then begin its manufacturing operations, provided, of course, that the war was over within the five years mentioned in paragraph 12.
– That would be profitable to thecompany.
-Certainly, it would be profitable. That is what is in the mind of the company; it wishes to secure the monopoly now and, for its own financial benefit, endeavour to operate it after the war has terminated.
I have already referred to another portion of the bill which I think should be amended. Under the heading “ Assurances by Commonwealth”, in paragraph 10 of the schedule, the Commonwealth gives the assurance that it will safeguard the interests of the proposed company against the establishment of similar manufacture in Australia by foreign or foreigncontrolled companies. I want the meaning of “ foreign “ to be clarified. Then there is paragraph 12 of the schedule, the meaning of which, I believe, the honorable member for Gippsland (Mr. Paterson) has not completely understood; nor does he realize the effect it would have on existing Australian industries. It states -
That the Commonwealth will use its best endeavours to limit production of motor cars and trucks of fifteen horse-power or over to the proposed company for a period of five years.
The Prime Minister, in answer to an interjection, stated that there was form but not substance in the charge that this legislation, if passed, would entirely eliminate the Ford motor works in Geelong, and the works of General Motors-Holdens Limited in South Australia. I contend that there is substance in that charge, and that proof of it is furnishedby the wording of this particular paragraph, the interpretation of which is, that the Commonwealth will use every effort at its disposal to limit the production of motor cars and trucks. Limitation of production is not to be confined to engines, but may include the entire motor car and truck. Under the National Security Act, the Commonwealth has at its disposal the most effective means of preventing production. If the enforcement of this provision were insisted on by Australian Consolidated Industries Limited under a properly drawn contract, the Government would be compelled to prohibit entirely the manufacture, not only of engines, but also of the entire motor car and chassis, by any company except Australian Consolidated Industries. Limited. I therefore say that there is very considerable substance in the charge that the carrying out of this agreement would completely obliterate the motor-body building industry in Geelong and South Australia. I have always understood that lawyers are able to express their meaning in exact terms. I have told the House exactly what I understand this particular paragraph to mean, and I believe that all honorable members will agree that I have given the correct meaning. If that be not the meaning intended bythe Prime Minister, who is a. very learned lawyer, he ought not. to have used such terms. I remind honorable members that the Ford Motor Company of Australia Limited is a decentralized industry; it maintains not only its main plant in Geelong, hut, also an assembly plant in New South Wales, Queensland andWestern Australia. From a defence as well as. a decentralization point of view, the existing structure of the motorbody building industry is much better than would be the case if Australian Consolidated Industries Limited held a monopoly and had its plant in any one State.
Another very strong objection that I have to the proposed agreement, as it, stands, is that it makes no mention whatever of profits. In a previous measure, passed by Parliament for the payment of a bounty in respect of the manufacture of radiators, the definite provision was made that if the company concerned earned profits in excess of 10 per cent., the bounty payable would be correspondingly reduced. I consider that a similar safeguard ought to be inserted in this measure.
– We ought to throw the bill out altogether.
– I believe that it should be so amended as to permit the participation in the industry of other interests as well as Australian Consolidated Industries Limited.
There is another aspect which I think was passed over very lightly by the Prime Minister, when he stated, in effect, that the skilledworkers necessary to establish the industry to-day would be very few in number, and that only process workers would bo required. As a matter of fact, the investigations undertaken by the Tariff Board prove that statement to be entirely wrong. All of the skilled workers will be required in the initial stage, and it is in the laterstages of manufacture that process workers will be engaged. The report of the. board laid particular stress on the fact that in the initial steps necessary to establish this industry, a very large number of highly skilled men, such as tool-makers, diemakers,jigmakers, and makers of fixtures and presses for the “ operations concerned, would be required. It will thus be seen that the statement of the Prime Minister is highly inaccurate. Remembering the reply given this morning by the Minister for Air (Mr. Fairbairn), to the effect that it is impossible to secure the services of the number of skilled workers needed for the aircraft industry. . 1. begin to. wonder where the Prime Minister proposes to find the skilled workers necessary to establish this motor-vehicle engine industry in Australia. . .
In another respect, I believe that the right honorable gentleman glossed over very lightly a great difficulty that has to ho encountered. I refer to the demand on American dollars. I quite realize that he made a fair statement of the position; but I contend that he did not draw from that statement the implications it contains. What he stated was, that the demand on American dollars by reason of the establishment of this industry in Australia, would be very large in the initial stage, but that, if the industry were not now established, there would be a small constant demand on American dollars extending over a number of years. I took him to mean that, in respect of the demand on American dollars, the only difference between the proposal to establish the industry immediately, and -the proposal to delay it for a number of years, is that, in the one case, the demand would be highbut wouldbe confined to one year, and that in the other case, it would he spread over a number of years. I agree that that is a perfectly true statement of the position ; but our concern is to conserve our dollars this year and next year,not four or five years hence, and I say that the establishment of this industry now would drain our American dollars.
– Sothe honorable member does not think that the industry shouldnotbe established in this country at all?
– I stated my position at the beginning of my speech and I shall presently state it again for the benefit of the honorable member. * [ Leave to continue given.]*
I believe that the Commonwealth Government has exceeded its powers in this proposed agreement, which sets out in paragraph 12 -
That the Commonwealth will use its best endeavours to limit production of motor cars and trucks of 15 horse-power or over to the proposed company for a period of five years.
That power is taken under the National Security Act. If this war lasts fortwo years does the National Security Act, which was passed as a defence measure, cover the other three years of those five years? No. The Government, therefore, has exceeded its powers under the Constitution in that paragraph and that in itself is sufficient reason for the House to carry the amendment moved by my leader.
– Perhaps that is why the words “use its best endeavours” are used.
-Paraphrased, that means that the Government will use every power to obliterate the motor bodybuilding industry in this country. In support of my contention that paragraph 12 is ultra vires the Constitution I shall quote a legal opinion that I have received. It is an opinion given by Mr. Wilbur Ham, K.C., and is in these terms -
In view of my clear opinion that the letters do not constitute a binding contract and that the bill as framed could not make of the uncertainties and disagreements in the letters an enforceable agreement or any agreement at all, it is not necessary to consider the very difficult constitutional questions as to the validity of any act which sought to authorize such “ matters “. The purpose of such act would go outside the customs power and the bounties power and, though the defence power is wide, its high-water mark is to he found in Farey v. Burnett 21 C.L.R. 433; it only authorized general price-fixing limits on the price of breadduring the present state of war”.
The proposal is not so limited but is designed to give one company the monopoly for five years irrespective of the duration of the war, to the entire exclusion of all other companies that come within the scope of the Motor Vehicle Engine Bounty Act of 1930. section6. or any other manufacturers.
I submit that because paragraph 12 is ultra vires Parliament should refuse to ratify this agreement as it has been submitted. I stated at the beginning my attitude towards the manufacture of the complete motor car in this country. I desire to see the establishment of the industry at the earliest possible date, compatible with skilled labour and other resources being available for that manufacture. I believe that the best way in which this Government could approach this problem would be by making a survey of the skilled man-power available. Having set aside the skilled labour required for the defence industries and having ascertained the materials and capital available for the purpose of manufacturing cars, it could proceed on the basis of telling those engaged in the production of motorcar bodies and others that it proposed that the entire car should be manufactured in Australia within a given time, that time depending on the survey. The Government would then need to introduce an appropriate tariff schedule to give effect to the protection that it had in view. If the Government did that, it could have this industry established in Australia within a short space of time, without any bounty at all. However, the question before us is whether this agreement should be ratified or not. The honorable member for Henty (Sir Henry Gullett), on the 22nd May, 1936, in the capacity of Minister in charge of negotiations for trade treaties, introducing the trade diversion policy, said -
In the opinion of .the Government, reached after considerable investigation, there is room in tlie Commonwealth for the profitable working of at least three separate units of motor car manufacture. It is intended, however, not to limit the number of units, but rather to invite engine manufacturers who are now supplying the Australian trade to participate in this great new venture in secondary industry.
That shows that in the mind of the Government then there was no idea of a monopoly being needed in this industry. I am not concerned with arguments regarding the necessity for a monopoly in this country at this juncture; but, if any arguments can be advanced in favour of a monopoly, the only monopoly that should be set up should be a Government monopoly. If there is to be no Government monopoly, it is the right of the people to have free competition. That is the birthright of the people, and, in bringing this agreement before Parliament for ratification, the Government has endeavoured to sell the birthright of the people for a mess of pottage, for the agreement is nothing but a mess. For that reason, I hope that the House will carry the amendment moved by my Leader.
.- This bill does not provide for the ratification of an agreement. It seeks to provide that the Commonwealth may make an agreement to give effect to the matter specified in the schedule. That seems to be an admission by the Government that no complete agreement has been made. I do not propose to discuss the points raised by the honorable member for Corio (Mr. Dedman) with regard to that. But, if one looks at the text of the agreement and compares it with the memorandum of correspondence that was given to honorable members, one will see at once that the various paragraphs of the schedule of the so-called agreement and the various assurances contained therein are, with two whole exceptions and one partial exception, taken from the letters, either the letter of the managing director of the company, or the: letter of the Prime Minister (Mr. Menzies). The first of the two complete exceptions is contained in paragraph 9, which states -
That the company will proceed immediately with the scheme …
Although that is not set out in a letter, it is implied. The other exception is -
That the Commonwealth will pay bounty iii accordance with the provisions of the Motor Vehicle Engine Bounty Act 1939.
That, of course, is naturally implied, because the whole basis of the thing is that the company will receive a bounty. The paragraph which does not wholly appear in the correspondence is paragraph 7. That reads -
That the proposed company will use all bounty paid to it under the Motor Vehicle Engine Bounty Act 1939 to give a price concession to the public.
That does not appear in any form anywhere else except in Mr. Smith’s letter, and he puts it in a much more guarded form than that. He does not say that he will use all of the bounty to give price concessions to the public. This is what he says on page 2 of his letter -
In the early stages, therefore, the price must bc sufficiently attractive substantially to counteract this sales resistance. The company will use th<: bounty to give price concession to the public in order to get the market, rather than use it in the payment of dividends.
All that he suggests is that in order to get the market he will use the bounty to reduce prices and to prevent competitors from getting a foothold in competition. There is nothing like the definiteness of the guarantee )in paragraph 7 of the schedule, which is the only definite thing in the whole of the assurances.
I now refer to the first of the assurances given by the Commonwealth. I do not take great exception to the assurance contained in paragraph 10, because it is an assurance that powers will be used to protect the company against foreign or foreign controlled companies. It does not protect the companies against Australian rivals. In the Motor Vehicle Engine Bounty Act, which we passed, we drew an unusual distinction between an Australian capitalist and a foreign capitalist. We drew that distinction, not because we had a bigoted preference for the Australian capitalist as against the foreign, but because wo thought that unless this industry was established by Australian capital it could well get under the control of foreign manufacturers, and, in the course of time, be suppressed in their interests. That is why this House inserted the provision that two-thirds of the capital of any company enjoying the bounty must be owned by British subjects living in Australia. Paragraph 10, therefore, does not give me any concern, but paragraphs 11 and 12,. particularly the latter, cause me great disturbance of mind. The honorable member for Corio has very ably drawn attention to the meaning of those two assurances, but I wish to reiterate and reinforce his remarks. Paragraph 12 states -
That the Commonwealth will use its best endeavours to limit production of motor cars and trucks of 15 horse-power or over to the proposed company for a period of five years.
That refers not merely to the production of motor chassis and engines, but also to the manufacture of complete motor vehicles. It ,means that the Commonwealth will do its very best, in five years, to hand over the whole of the industry to Australian.Consolidated Industries Limited.
If, as the Prime Minister has said, speakersduring the Corio by-election campaign declared that should this agreement be concluded, it would be possible to closedown the Ford motor works, they said nothingbut the absolute truth. It wouldbe possible for the Commonwealth Government, at Mr. Smith’s request, to destroy every motor-manufacturing firm producing vehicles of 15 horse-power or over. That provision was not inserted by accident. Mr. Smith desired that it should he inserted. He made it plain in his original letter to the Commonwealth that what he sought was a monopoly of the manufacture. not merely of motor chassis and engines, but also of entire vehicles. That is clear beyond doubt. In the first letter published in the memorandum circulated by the Government, Mr. Smith stated -
The motor vehicle represents highly concentrated labour as a major ingredient. Probably 80 per cent. or more of the factory cost is represented in labour and would amount to about £150 worth of labour on each vehicle. The company would design and be responsible for the production of the entire car including the engine on which the Government has offered a bounty.
Then he asked the Commonwealth for this stipulation -
That all Commonwealth Government departments requiring vehicles of the class proposed to be manufactured by the company, will purchase a substantial proportion of their requirements from the company.
The Commonwealth refused to give an unqualified promise, but it said that if the price and quality of the vehicles were satisfactory, it would be prepared to do something on the lines that the company suggested. But then Mr. Smith asked that paragraph 12 should be inserted in the schedule. He used almost the very words contained in the paragraph.
– That paragraph should be read in conjunction with paragraph 3.
– No. It is perfectly obvious that the director of Australian Consolidated Industries Limited had in contemplation a monopoly of the manufacture not merely of chassis and engines, but also of entire motor vehicles. He made that clear when he went on to say, in the explanatory statement which accompanied his first letter -
An Australian company being formed for the purpose of manufacturing motor vehicles must take into its considerations the fact that at least one foreign corporation will attackthe Australian venture in the most ruthless manner if the Commonwealth does not protect it.
That refers specifically to the manufacture of entire vehicles. At the end of that explanatory statement he said -
The company is not adverse to or jealous of other Australian manufacturers entering the motor vehicle manufacturing field, but considers that the interests of the industry in general would be served best were the manufacture of motor vehicles to be restricted. The recruiting of suitable skilled labour for the now industry will undoubtedly present a serious problem and the company does not want to be faced with the position where it cannot get labour on the one hand or sales on the other.
It is considered that, at present and for some time to come,’ there is room for only one largescale Australian motor manufacturer.
The Government pledges itself in this bill to use its best endeavours to limit the production of motor cars and trucks of 15 horse-power or over to Australian Consolidated Industries Limited for a period of five years. If the House approves of this schedule, the Government will then proceed to execute a document, not similar to this, hut one drawn up by lawyers in order to carry out the expressed intention of the parties in legal terms. It will not contain words like “probable”, “sympathetic consideration “ or “ proposed plan “. It will use definite language from the meaning of which there can be no escape. What the bill actually means, if it means anything, is that the Commonwealth Government will he bound, so far as it possibly can bebound, to legally secure to Mr. Smith a monopoly. That will not only be a monopoly against the foreign manufacture of chassis and engines, but also a monopoly against every manufacturer of heavy cars and trucks. The Government and its supporters, by the attitude they have adopted, seem to suggest that people who come to this country and introduce capital from Great Britain and the United States of America, in order to start an industry which employs thousands of Australian workmen, are enemies of the country. Be that as it may, the men who work in those industries are not enemies of the country, and the Labour party cannot agree to stand by and see those men thrown on the scrap heap merely because the Parliament is asked to give this monopoly to Australian Consolidated Industries Limited. It wouldbe possible for the thousands of men who are employed by General Motors-Holdens Limited and the Ford Motor Company of Australia Limited to be thrown out of employment if the proposed agreement were made. It is all very well to say that they would have a chance of securing employment from Australian Consolidated Industries Limited.
– Why not give those two companies the same opportunity as Australian Consolidated Industries Limited in the matter of capital construction?
– There should be no interference with the original intention of this Parliament that a bounty should be payable for the manufacture of motor-car engines and chassis, and there should be open competition between Australian companies in that field. That would carry out the principle of the bill passed last year by this Parliament. At no time did honorable members contemplate that one person should be permitted to dominate the manufacture of large motor vehicles in Australia. This company would have in its hands, if this agreement were passed, power to control the fortunes of every person whose business is the manufacture of parts of motor cars, such as bodies and panels. They could sell their product only to Australian Consolidated Industries Limited, and Mr. Smith, by virtue of the monopoly granted to him by the Commonwealth, would be able to treat them as vassals. That means that not only the fate of a great number of men and women employed by the manufacturers of motor-car chassis and engines, but also the fate of hundreds and thousands of people engaged by the manufacturers of accessories would be controlled by one man. Paragraph 12 of the schedule seems to me to be the crucial point in this measure on which this House should decide whether this agreement shall be approved or not. A great deal has been said about paragraphs 10 and 11, but the greatest danger lies in 12. Remember that, if this bill is passed, the Commonwealth and its advisers will sit down with Mr. Smith and his advisers, and hammer out a legal agreement which need not be submitted to Parliament for approval. I am not prepared to give that power to the Commonwealth, and thus place the fortunes of the men and women whom the Labour party represents in this House into the hands of Mr. Smith or any other monopolist.
– Has the honorable member read paragraph 3?
– Does it not impose conditions upon paragraph 12?
– No. What I have said makes it perfectly clear, even to the meanest intelligence, that Mr. Smith was contemplating a monopoly of the manufacture not only of motor-vehicle engines and chassis, but also of motor cars and trucks. He stated -
It is considered that, at present and for some time to come, there is room for only one large-scale Australian motor manufacturer.
The words of paragraph 12 appear also in the Prime Minister’s letter, which shows that there was no oversight in the matter. I understand that when the Government’s draftsman was asked to draw up this bill, he had to take the correspondence which passed between the Commonwealth Government and Australian Consolidated Industries Limited, and put it together. Instead of assembling it, he dissembled it. He took the letters to pieces and the plan of Australian Consolidated Industries Limited has been dissembled in that way. Paragraph 11 of the schedule provides -
That the Commonwealth will pay bounty in accordance with the provisions of the Motor Vehicle Engine Bounty Act 1U39.
The obvious intention of that and of paragraph 12 is that only one man shall receive the bounty. The Commonwealth Constitution Act, however, states in section 51, placitum iii. -
Bounties on the production of export of goods but so. thai such bounties shall be uniform throughout the Commonwealth.
The Commonwealth would not be paying bounties uniformly throughout the Commonwealth if it made it impossible for anybody but Mr. Smith and his company to receive bounties. The language of section 51, placitum iii., of the Constitution Act is perfectly clear, but if it needed any clarification, it received it from the present Chief Justice of the High Court, Sir John Latham, in the case Elliott v. Commonwealth. His Honor said -
That section would be infringed by the absence of uniformity whether preference was given to a. State or part of a State over another State or part thereof.
If the Commonwealth discriminates between persons by saying in this bill that one person shall receive bounty, and another shall not, it will he a breach of the Constitution. Whether the Government contemplates a breach of the letter of the Constitution or not, it certainly contemplates a breach of it in the spirit. Its intention is that the bounty, which this House has already authorized to be paid, shall be paid to Mr. Smith’s company and to nobody else. That is surely a violation of the spirit, if not the letter, of the Constitution.
Probably I shall be told that the Constitution does not matter now when this country is at war, and that the Government is empowered to do anything it likes; but it is quite clear that the Government cannot do anything it likes, even under its war powers. The defence power given to the Commonwealth by the Constitution has become enormously enlarged, but that power is still subject to the provisions of the Constitution. It was pointed out by a former Chief Justice in the case, Farey v. Burnett, to which the honorable member for Corio referred, that the Commonwealth cannot override the provisions of the Constitution. Any one who dispassionately considers this measure must come to the conclusion that this Parliament cannot rightly agree to it. I took no part in the Corio byelection and did not read the agreement until it was laid before the Parliament. I refused to make up my mind regarding it on the information contained in newspaper reports. Indeed, I could not understand the document from what appeared in the newspapers. I reserved ray opinion until I saw the document itself. Having seen it, I think that it goes far beyond what honorable members contemplated. I believe that most honorable members contemplated that there would be a bounty-fed industry for the manufacture of chassis and engines, and that, in order to prevent it from getting into the hands of foreign capitalists who might strangle it, the bounty was to be paid only to companies, 66 per cent. of whose capital was subscribed by Australians. We never contemplated handing over the industry to one monopolist, or providing that capitalists whose money was invested in other industries should be debarred from competitive manufacture. Certainly, we did not contemplate endangering the future of the men and women working in the existing establishments.
– Does the honorable member seriously believe that paragraph 10 will prevent the Ford Motor Company from continuing to make motor-car bodies ?
– At the moment, I am concerned, not with paragraph 10, but with paragraph 12, which provides that “ the Commonwealth will use its best endeavours to limit production “. After wo have approved this scheme, it will he submitted to the legal representatives of the
Commonwealth and of the company who will draw up an agreement to give legal effect to the decision of the Parliament. The agreement will not come back to this House for ratification, because the Parliament in advance will have authorized the Commonwealth Government to make an agreement to give effect to its decision. If the Commonwealth Government enters into an agreement with Australian Consolidated Industries Limited that for five years that company shall have a. monopoly of the manufacture of motor vehicles of certain types, it will do so by virtue of the authority to do so given to it by this Parliament. I shall not consent to the Government being authorized to enter into such an agreement.
.- I support the amendment of the Leader of the Opposition (Mr. Curtin) and am opposed to .the amendment foreshadowed by the honorable member for Gippsland (Mr. Paterson). The Government has been criticized for neglecting to prepare for the manufacture of armaments in this country. Whenever an undertaking of considerable magnitude is decided upon, plans must be prepared well ahead of the actual commencement of the work. The proposal to establish in Australia an industry for the manufacture of motor car engines and chassis is sound. Moreover, I believe that the industry should be established immediately. Notwithstanding that the Government is primarily concerned with the prosecution of the war, it must not fail to prepare for peace. When peace returns, thousands of men who, during the war, will be employed in the production of arms and munitions, will lose their employment in that capacity and will have to seek other jobs in secondary industries. The Government should therefore encourage the establishment of substantial industries in this country which will provide employment for those men when the war is over. Accordingly I am entirely in accord with the proposal to establish this industry in Australia, and I commend the enterprise of the company which is prepared to manufacture motor cars in Australia. About four years have elapsed since the Parliament authorized the payment of a bounty to encourage the manufacture of engines and chassis in the Commonwealth, but no company, either foreign or local, was prepared to undertake the work during, that period. The reason that they did not come forward was that they had a monopoly of the motor car industry of Australia. The Acting Minister for Information (Sir Henry Gullett) was responsible for placing certain restrictions on the importation of motor cars in this country. That policy gave to certain motor interests a monopoly of the importation of motor cars. During the depression, there was a tendency on the part of the people to purchase the cheaper cars such as Fords and Chevrolets, and as the import quotas were based on imports during a certain earlier period, the distributors of those makes of cars were practically given a monopoly. Other importers who desired to bring cars to Australia could not get sufficiently satisfactory quotas to enable them to establish substantial businesses because during the depression their importations were small. The Ford Motor Company and General MotorsHoldens Limited had a monopoly of the importation of cars for several years, and while they enjoyed that monopoly there was no necessity for them to interest themselves in the manufacture of cars in Australia. They would not bc interested now in local manufacture were it not. for the fear that competitors might come forward and by their courage and enterprise build up a connexion which would result in the existing companies losing a portion of the local market. I doubt whether the- existing companies would be prepared to manufacture cars here should these proposals fall through. They would probably be content to continue to import cars, even under restricted conditions. For the reasons that I have stated, I believe that this new company should be given every encouragement. But I am opposed to granting it a monopoly, although I believe that it. is entitled to adequate tariff protection. Other companies which may wish to establish similar works should also be encouraged. I think, however, that few, if any, other companies will be prepared to establish works in Australia for the manufacture of motor cars, and for that reason I think that the paragraph which confers on Australian Consolidated Industries Limited a monopoly of this work is unnecessary, t understand that the National Security Act is limited to the period of the war and twelve months thereafter, yet this bill proposes to grant to one company a monopoly of the manufacture of motor engines and chassis in Australia for a period of five years. Should the war last only another twelve months, the powers exercised under the national security legislation would expire within two years. I do not think that the provisions of that legislation should be availed of in order to grant a monopoly to any company. I am opposed to the amendment indicated by the honorable member for Gippsland. The Country party is opposed to the establishment of secondary industries in this country under any conditions. Members of the Country party would take almost any steps to prevent the manufacture of cars in Australia at this or any other time. Although this country is at war, it must make preparations for peace. The establishment of. this undertaking would provide opportunities for training young men in useful employment, and when the war is over and the market for motor cars is again active, it should give work to returned soldiers and mcn previously engaged in the manufacture of munitions. In order that secondary industries may absorb these men this industry should be established as soon as possible.
.- In De, comber last I opposed the bill to grant a bounty for the manufacture of motorcar engines in Australia.’ The war situation makes the establishment of such an industry at the present time most inopportune, and, therefore, my vote will be cast against, the agreement.
.- I am in favour of the proposal to manufacture motor cars in Australia, and as there appears to bc some conflict of opinion as to the location of the industry, because of jealousy on the part of the people of both Victoria and New South Wales, I suggest that the company should establish its works in Tasmania, where it would have the benefit of cheap hydro-electric power, resulting in lower costs of production and, consequently, lower prices for its products.
The manufacture of motor cars in Australia would provide employment not only in the major industry itself but also in subsidiary industries. The company should not confine its operations to the manufacture of engines for motor cars, but should also manufacture tractors and. tanks for the defence of this country. I. agree with the honorable member for Darling (Mr. Clark) that this industry will give employment to the youths of this country, and absorb men who are now engaged in various war activities, while making Australia less dependent on overseas manufacturers.
Another point requires some consideration, however. In my opinion, the proposed rates of bounty are too high. It is intended to pay a bounty of £30 each on the first 30,000 engines constructed, £25 each on the next, 30,000 and £20 each on the next 30,000. I calculate that this will absorb £1,750,000. There is no justification for the payment of such a heavy bounty in view of the prices at which certain rnakes of motor cars are sold in America and in Australia. For example, a Chrysler model, which costs £495 in Australia, is sold to the public in tha United States of America for £175. Other comparative figures are: Dodge. £404, £139 ; De .Soto, £465, £162 ; Ford’. £343, £104. The engine of the Ford motor car is equal to that of any other cav that can be mentioned. If the Ford chassis had a body put on it comparable in quality to the bodies of certain other makes of car in the same price class such as the -Chevrolet, it would be a magnificent vehicle.
In view of the fact that the complete Ford car is sold for £104 in America, I suggest that the engine would not be likely to cost any more than, say, £30. It seems ridiculous, in such circumstances, that we should be asked to provide such an. exorbitant bounty for engines made in Australia which, probably, will not be comparable to the Ford engines, it seems to me that the motor cars that will be built in Australia will he expensive vehicles, and that we shall therefore fail in achieving what should bo our main purpose, that of providing the Australian public with a. reasonably priced vehicle. We should not consent to any proposal which will have the effect of maintaining tlie existing high prices of motor cars. I fear that such would be the result of our ratification of this agreement. To use f.1,750,000 of the taxpayers’ money for this purpose is quite unjustified.
I hold the view that we should do our utmost to make Australia self-supporting and self-reliant. I cannot see the force of the argument of some honorable members that Ave should not give a monopoly to any particular interests to manufacture motor cars, for Ave have already given monopolies in relation to other industries. I have in mind the sugar industry, in particular. I am prepared to do the fair thing by any organization established to manufacture complete motor vehicles in this country; but I think that proper consideration should be given to the claims of all of the States in determining where the motor vehicle manufacturing industry should be located. Tasmania should be considered. I. know that the paper pulp industry has been established in that State, and T appreciate what the Government has done in that regard ; but it should not be overlooked that the possession of an unlimited supply of cheap hydro-electric power entitles Tasmania to special consideration. It seems, however, that these industries are established in different States only after a consideration of their vote-catching qualifications. Economic factors are pushed into the background in the interests of political advantages; and the minority party of this Parliament - I refer to the Country party, which I call the parachute party - has been able to obtain far more than it is entitled to.
We should not withhold from establishing this industry because it is alleged that insufficient skilled labour is available. Nor do I think that, the argument that the establishment of motorengine manufacturing works would injure the prospects of certain related industrial enterprises at, Geelong or Adelaide should carry undue weight with us. We should give full consideration to lbc importance of all of the economic and industrial factors related to motor car manufacturing. This reminds me that if the industry were established in Tasmania, no trouble would bc encountered in consequence of the lack of coal supplies, for the hydro-electric supplies of the State could bc drawn upon almost without limit. I understand that the magnesium industry of Tasmania is being developed in the expectation that supplies of magnesium will be required in connexion with the manufacture of motor-car engines. I strongly advocate that the proposed works should be located either in Tasmania or in Western Australia, with the object of decentralizing our industries. The adoption of that course would result in the distribution of our population more evenly over our vast territory. It would also have a beneficial effect from the defence point of view. No one would deny that Tasmania would probably be the last State of the Commonwealth to be captured if a hostile force came our way. The people of Tasmania are 100 per cent, united, and I have no doubt whatever that they would use to the very best advantage any opportunities provided for them to establish this industry within their State. We need engines, not only for the usual class of motor vehicles, but also for tanks, aircraft and so forth.
State jealousies should not prevent us from giving the fullest consideration to the advantages of the respective States in connexion with the establishment of the projected enterprise. Even if one State were declared to have less skilled labour available than another, I would not, regard it as being excluded. Wherever the works were established, men with the requisite skill will soon be forthcoming. We ought, not to act hastily in coming to a decision on this important subject. A certain amount of caution is needed. .1. am not opposed to the investment of foreign capital in such an industry as this. In fact, I think the investment of capital from outside should, be encouraged in Australia. I hold broad views on that subject. I wish to see the motor engine manufacturing industry, established here as soon as possible, having regard to. the need for adequate consideration of all circumstances. Australia will never become a. strong nation until we establish essential secondary industries of this kind within our borders. I am prepared to support any genuine proposal to that end that may be submitted to Parliament,but certain actions of the Government in relation to this particular project justify my expressing some doubt as to its sincerity. I submit that every manufacturing organization which is prepared to undertake the construction of motor vehicle engines in this country should be given reasonable encouragement.
Sitting suspended from 6.16 to8 p.m.
– I am very disappointed that theGovernment did not take steps years ago to establish a motorcar manufacturing industry in Australia. Had it done so, the industry wouldnow be operating successfully. Any company starting now would need 600 trained artisans, and what hope has it of getting that number when the services of all skilled men in the country are needed for the production of munitions of war? Very soon the Government will have to ration petrol. That must come, and then tens of thousands of motor cars will be handed back to the garages for resale, and the market will be glutted. There will be little sale for new cars, sohow can we expect people to put their money into an enterprise for the production of 30,000 motor-car engineswhich will have to be stored away because there is no sale for them? Onewonderswhy the Government has brought this bill down now. Evidently, it is merely seeking to save its face; to show the public that it has tried to do something. Actually, the scheme is doomed to failure, and the Government knows it. Instead of building luxurious motor cars, Ave should concentrate on the production of tanks and other war equipment for the defence of the country. I am in favour of the establishment of a motor-car manufacturing industry in Australia, but this is not the time to make the attempt. It shouldhave been dome long ago, but since it was not, we should turn our energies to the production of things more necessary during war-time. We know that Ave can build motor-car bodies in Australia equal to any in theworld, and there is no reasonwhywe should not produce the engines also in due course. In the meantime, howeever, let us accept the amendment of the Leader of the Opposition (Mr. Curtin), so that all parties in this House may present a united front to the people of Australia, and to the enemy.
.- The Prime Minister (Mr. Menzies), in introducing this bill some days ago, said that the industry towhich it refers has had a very chequered career. Iwould rather say that the birth pangs of the industry have been so prolonged that,when I took the matter in hand twelve ‘ months ago, I decided,with the concurrence of the Government, that heroic measureswere ‘ necessary if it was ever to breathe at all. We took those measures. One of the unpleasant results of our action was that I have been obliged to travel the path that many heroes have travelled before me. One of the more pleasant results has been that,whether the proposals now before Parliament are good or not, whether or not they are precisely those which Parliament will approve, at least Ave have at last reached some basis for discussion. Wehave at least got further than ever before. The Government isnow able to place before the House a scheme that can he debated, a scheme that is in every sense a practicable one, even though it may not meet with the approval of all members of this House. One very interesting feature of the endeavours of various Ministers and governments to establish a motor-car manufacturing industry in Australia is that when they spoke of the matter in the abstract, when theywere merely building castles in the air and saying what ought to be done, and how andwhen it should be done, it was easy towin the plaudits of members of this House and of the multitude outside. Even members of the Country party,when they believed that the prospects of establishing the industry were extremely remote,were prepared in principle - a phrasevery much in use these days - to support theGovernment’s proposals. Then one noticed the gradually Availing enthusiasm of certain honorable members as the prospects of success improved until, from giving lip service to the efforts of the Government, they have now become actively hostile.
– That is not true ofus.
– I am not speaking of members of the Opposition.
As I have said, so long as one talked in the abstract, it was easy to gain the plaudits of the crowd, but immediately we left the realm of rhetoric in order to enter the arena of achievement, all sorts of opposition was encountered. Our efforts were hampered by people prepared to utter libels, and to resort to any means, however despicable, to prevent the establishment of a motor-car manufacturing industry in Australia. I do not propose to discuss at length the need for this industry, because the Prime Minister put the case very well. Parliament admitted the need for it when it passed the Motor Vehicle Engine Bounty Bill last December. Therefore, I do not propose to argue the merits of the case, but I intend very briefly to state some pertinent facts.
First of all, there is the fact that, during the last 25 years, motor cars and motor car parts to the value of £125,000,000 sterling have been imported into Australia.. That is a fact which is well worthy of consideration, and of itself was, I believe, sufficient to justify the policy laid down by the Lyons Government as far back as 1936. But there were also other facts. There was the matter of employment, and the widening of the base of our industrial organization. There was the very real need to make a contribution towards, the adjustment of the disequilibrium which has always existed between primary and secondary industries. There was the matter of foreign exchange, which is very much more pressing to-da.y than it was then, but nevertheless was, even then, of very real urgency. So, in 1936, a policy was adopted whereby this industry might be established. So long as it remained in a fairly vague and nebulous form, the proposal had widespread support. Later, there was a Tariff Board inquiry, the result of which, I am prepared to admit, was not encouraging; but I urge the House to consider the character of the evidence tendered at that inquiry. The bulk of the evidence was tendered by persons who, we now know, are actively opposed, and always have been opposed, to the establishment of the industry; for example, General Motors-Holdens Limited, the Ford Motor Company of Australia Limited, and the Chrysler-Dodge Corporation. All of those interests made it perfectly clear, not that they wanted the industry to be established, not that they were prepared to co-operate fully with the Government in promoting its establishment, but, on the contrary, that they were opposed to its establishment. The evidence was not confined to the motor importing firms. They had their distributors, their satellites, the legion of people who, in one way or another, rely on them for such profits as they earn. I say very emphatically, and after full consideration, that the evidence was so prejudiced that proper findings could not be based upon it. There was the evidence of the representative of the Ford Motor Company of Australia Limited. I was very interested to hear the passionate defence of that company by my newly-found friend, the honorable member for Corio (Mr. Dedman). The House would do well to scrutinize the evidence submitted by that company - submitted, mark you, on oath. Perhaps the most pertinent, the most interesting portion, was to the effect that, in the opinion of the company, the measure of assistance necessary to encourage the establishment of the motor engine and chassis manufacturing industry in Australia, would amount to no less a sum than £135 a unit. I pass over the fact that, immediately the Government proposed to establish this industry on the basis of assistance, not to an amount of £135 a unit, but at an average rate of £25 a unit for the first 60,000 units, Ford’s general manager, who had given that evidence before the Tariff Board, was one of the first to protest to the Prime Minister that, if a company were established which would receive for the first 60,000 chassis and engines it produced, an average bounty of £25 a unit, such a company would close down the Ford Motor Company of Australia Limited. I can only say that that is a tremendous tribute, a remarkable compliment, to Australian industrialists and workers - that the Ford Company, which I suppose is one ‘of the largest, most powerful, and most wealthy motor manufacturing companies in the world to-day, would find it necessary to run to shelter from an infant industry, established by relatively inexperienced
Australian industrialists and accorded only one-fifth of the measure of assistance considered necessary by the Ford Company. Yet that was, in fact, the case. The general manager of General Motors-Holdens Limited, Mr. Hartnett, in evidence before the Tariff Board, said that, in his opinion, it would be necessary for years to sell any Australian-made car at a price at least £75 lower than the price charged for a comparable imported car. If one examines that statement at all closely, one must come to the conclusion that, in the opinion of ‘General Motors-Holdens Limited, the degree of assistance necessary for any company undertaking manufacture in Australia would be in the vicinity of from £100 to £125 a unit. That evidence having been tendered by persons who were in a position to express a really authoritative opinion, naturally the Tariff Board’s finding was to the effect that £30 a unit - the figure then being offered by the Government - would not be nearly sufficient to induce the manufacture of motor chassis and engines in Australia. That was one of the conclusions reached by the Tariff Board.
Time passed. The first Menzies Government was formed, and I was allotted the task of doing what I could towards the establishment of this industry. I had many pleasant talks with various representatives of the big motor companies of this country, those companies which the Government thought might legitimately be expected to co-operate with it in the establishment of this industry; pleasant encounters, if one regards them merely as social occasions. It was not possible to talk real business. The plain fact was, that they were then just as strongly opposed to the manufacture of engines and chassis, as when they gave evidence hefore the Tariff Board. They suggested many things that might be done, such as inquiry committees, rates of bounty ranging from £135 a unit to as low as £50 a unit, the sending of a man to the United .States of America, and the attempt to procure certain equipment in Sweden, and so on. The matter dragged on for several months, until I came to the conclusion - and I say it advisedly - that these persons in Australia who might legitimately have been expected to assist the Government in the establishment of this industry, were, in point of fact, humbugging the Government, and’ doing everything that they could to prevent its establishment. They were playing a colossal game of kid-stakes, hoping that the Government would continue to succumb to their tactics, as had been the case in the three” previous years. When war broke out; the roar of guns in Europe was sweet music in their ears. They regarded the outbreak as a blessed refuge, thinking that the Government would be unable to establish the industry and that they would not have to bother further about the matter, at least for the duration of the conflict. I am perfectly certain that that was their attitude - a cold-blooded, materialistic attitude - towards their obligations to Australian industry. Little did they dream that the Government would find an Australian organization, with Australian capital, which had the courage, the enterprise, and the ability, despite the attitude of overseas companies, to embark upon this undertaking; but that is what happened. Having failed to obtain any offers which one could consider at all, I authorized an officer of the Department of Trade and Customs to go out and find somebody who might be prepared to undertake the work. He found somebody, and the result is the agreement now before the House. I remind honorable members again of the evidence given by the Ford Motor Company of Australia Limited, and of the finding of the Tariff Board that £30 a unit would not he nearly sufficient to induce manufacture in this country. I remind them, further, of the rate of bounty proposed. Finally, I remind them that the Government has not, even yet, received an offer from any one who is prepared to undertake the work on the terms embodied in the proposals before the House, much less on more generous terms. There has been much, criticism of, and complaint regarding, these proposals. It remains for those companies which have howled the loudest, and complained the most bitterly, to say that they would be prepared to undertake manufacture on the terms embodied in the proposals.
– They cannot do that.
– They have not said that they would be prepared to do it. I suggest to the House that, if the Ford Motor Company of Australia Limited, General Motors-Holdens Limited, the ChryslerDodge Corporation, orany other organization, were prepared to undertake the work on a monopoly basis, they should at least say so. They have not said so.
– What would be the purpose of their saying so when they had been prohibited from manufacturing?
– The Government would at least have had before it some evidence that it was unwise to encourage Australian Consolidated Indusiries Limited so much. But we publicly invited proposals on much more generous terms than have been given to Australian Consolidated Industries Limited, and received no response from the Ford, General Motors-Holdens or ChryslerDodge companies. Within the last few weeks the Ford company has circulated a brochure containing its views. I have no doubt that every honorable member has received a copy.
– On the 17th December, were those companies given any idea of a monopoly being possible?
– I talked monopoly to every body I met during the whole of the period when I was Minister for Trade and Customs.
– That does not answer my question.
– I cajoled and pleaded with General Motors-Holdens Limited and other companies to make proposals. They made none. I could not very well offer them terms when they refused to indicate that they were prepared to manufacture. They always made it quite clear to the Government, to me, and to previous Ministers for Trade and Customs that they were not prepared to manufacture. If honorable members read the latest brochure circulated by the Ford Company it will be quite clear to them that even now the Ford Company is not willing to manufacture engines and chassis in Australia. I understand that the Chrysler-Dodge Corporation has also circulated honorable members; hut that company did not offer any proposal.
– Those companies want to stop this bill from going through.
– That is their policy. They want to hang their hats on any skeleton of an argument which might prevent the establishment of this industry. I ask honorable members to judge the agreement now before the House, not with the eyes of prejudiced people who are seeking to find fault, or something crooked or rotten in this agreement, but with the eyes of people who are really anxious to see this industry established, and who will take into consideration the lack of proposals from other organizations. That is the approach that should be made to this proposal.
The criticism of this proposed agreement divides into three main parts. I deal first with what has been styled the monopoly character of the proposal. Powerful pleas and defences are from time to time made by honorable members on all sides of this House on behalf of the monopoly that the Colonial Sugar Refining Company Limited holds. I offer no criticism of that monopoly. I believe that the Colonial Sugar Refining Company Limited is a very good company. Many honorable members were prepared not so long ago to support and encourage a monopoly to establish the tinned-plate industry in Australia. The Government, I believe with the approval of the honorable member for Hindmarsh (Mr. Makin), would have liked to afford a much greater monopoly in the manufacture of tinned plate than we are giving to Australian Consolidated IndustriesLimited, because what was proposed involved the granting the whole of the Australian market - not one-quarter of it - to one company, a much more powerful financial group than Australian Consolidated Industries Limited, for a much longer period than we propose to give to Australian Consolidated Industries Limited under this arrangement. From certain honorable members who are criticizing the present proposal we had splendid support and applause in that proposal. The tinned-plate industry would have been established two years ago if the Government had been prepared to adopt less orthodox methods. It would have been established twelve months ago if the Government of which I was a member, had accorded to me the same measure of freedom as I was given in my endeavours to bring about the establishment of the motor-car industry.
It has been said that we should never grant a monopoly, but I ask honorable gentlemen to approach that question from another point of view. I speak now to those who want to see the motor-car industry established. Suppose that we did not grant a monopoly. What would be the position? I say in all seriousness that the position would have been as it was in the last three years, when the Government could not grant a monopoly, and we should have had no proposals to bring before Parliament for the establishment of the industry. The hig importing companies were opposed to the establishment of the industry. They did not dream that any Australian company would undertake it. They were in a position to prevent any Australian company from undertaking it while this Government was not able to grant an Australian company the real protection that we propose in this bill.
In order to exemplify the truth of what I am saying, I cite the fact that, not so long ago, we gave assistance by way of bounty and tariff protection to the Australian National Radiator Company Limited, which proposed to manufacture motor-car radiators in this country. Australian capital was subscribed, plant was purchased and the company got to work and produced good quality radiators. The company was selling radiators to General MotorsHoldens Limited and other firms. It was well on its feet, and was beginning to expand its business and its plant, when suddenly, like a bolt from the blue, came a letter from General Motors-Holdens Limited that it must not reckon on further orders, because the larger company proposed to engage in manufacture on its own account. The result of such a proposal, if pursued to its logical conclusion, would be that the Australian firm,1 which pioneered that industry in Australia, would be closed down and ruined, and a company, which some people are so fond of defending, will step in. All of the profits from radiators, instead of going to Australian investors, will now go overseas. That is the position that would undoubtedly develop if we allowed this other Australian industry to be established without giving it adequate protection against the most powerful motor importing organizations in the world. It would be established and would start production. Then the powerful companies would establish operations and the Australian company would go to the wall. I ask reasonable honorable members how otherwise is that position to be met? Goodness knows, we did everything possible, before we asked Australian Consolidated Industries Limited to undertake the manufacture, to induce the larger and more powerful companies to enter the industry, but they refused to do so. Were we then to place the Australian pioneering company on an equal footing with those overseas firms which refused to assist us? We were under no obligation.
The motor industry in Australia to-day is entirely under the domination of foreign and overseas firms; but this is one of the blessings that the war has brought to us : We are able, as the result of the war-time powers that we possess, to establish a real Australian equity in an industry which would otherwise have fallen permanently into the hands of overseas concerns had it not been possible for us to afford to the Australian industry the protection which is proposed. We have been obliged to invoke the National Security Act to give to this industry the protection that it must have if it is to he established at all. If there were no war, no National Security Act, it would not have been possible to establish the industry under Australian control. The foreign companies would probably then for all time have completely dominated the motor-car manufacturing industry of Australia. That is one aspect of this war, for which we can feel grateful
It has been suggested also that at this time when there is such a demand for foreign exchange we should, not permit the use of dollars in the importation of the plant that it will be necessary to import in order to establish this industry.
That point has been laboured and belaboured to a degree that to me is thoroughly ridiculous. The value in Australian currency of the plant and equipment which it will be necessary to import will amount to about £350,000. A very large portion of the plant will be made in Australia. The value of the chassis and engine unit of the type of car that it is proposed to make under this agreement is about £100. On these figures it will be necessary to manufacture only 3,500 or 4,000 cars in order completely to offset the value of the plant imported and the dollars thereby expended. Three months’ production will more than offset in dollars the amount required to import any plant that will be necessary for the manufacture of 25,000 units a year. After the production of 3,500 or 4,000 units, the industry will begin to overtake leeway and effect a substantial saving of foreign exchange to this country. I put these facts before those honorable gentlemen who have made so much of the argument that the Commonwealth should not dissipate foreign exchange reserves by undertaking to import plant for the manufacture of motor vehicle engines and chassis. Honorable members must accept the view that this will not be a war of six months, one year or two years’ duration. It is more likely to be a war of three, four or five years duration, if not longer, and even calculating on the basis of a two-year war, our saving of foreign exchange will be very considerable.
I refer now to the subject of employment, a point which has been laboured by those people who are opposed to the establishment of the industry. They say that the Commonwealth cannot afford to take from the labour market the skilled labour that will be necessary for the efficient working of the industry that is proposed in this bill. That matter was made the subject of a special examination by the Government even before it entered into negotiations for an agreement. It considered the findings of the Tariff Board, but it was not entirely satisfied with them, and submitted the whole subject to its industrial panel - a body consisting of some of the most able industrialists to be found in Australia. The meeting of that panel was attended also by representa tives of almost every State. The Commonwealth put three questions to the panel. The first was whether the industry could be successfully established. The answer was, “Yes”. The second was, whether the industry could be established during war-time. Again the answer was in the affirmative. The final question was, whether the establishment of the industry during war-time would make inroads on the supply of labour available for the essential defence works of the Government. The answer was that the Government should go right ahead and establishthe industry, because there was no occasion whatever to entertain fears of labour shortages. The members of the panel were unanimous in each case. I submit to the House, and particularly to those honorable members who, no doubt, will quote the opinion of the Tariff Board that, having regard to the character of the evidence that was submitted to the board, upon which it was obliged to base its findings, the decision of the industrial panel was very much more reliable and authoritative than that of the board.
The Leader of the Opposition has moved an amendment. He has suggested, in effect, that the proposed agreement with Australian Consolidated Industries Limited be adjusted in a way which will permit any Australian company to undertake the manufacture of motor-car chassis and engines on the terms set out in the Motor Vehicle Engine Bounty Act 1939. In the first place, I point out that the Government has received several proposals from Australian companies which are prepared to undertake such work, and I say advisedly, without wishing to injure any one who has been moved by enthusiasm for the establishment of this industry to submit propositions to the Government, that no proposal from any other Australian firm was worthy of serious consideration by the Government for more than five minutes.
– Did the Government receive any proposal from Mr. Richards of South Australia? ,
– I personally asked Mr. Richards to submit a proposal, but when I relinquished the portfolio of the Department of Trade and Customs I had not received any proposal from him, and I understand that no proposal has since been received. The great danger inherent in a proposal of this character lies in the false encouragement that might be given to industries which are not properly equipped to manufacture motor cars, to float companies and finally bring disaster and heavy loss to the investors who might be persuaded to place their money behind such projects.
– In all fairness, the honorable member could not say that of Mr. Richards.
– No. But I have not heard of any proposal being submitted by Mr. Richards.
I am prepared to accept in principle the amendment moved by the Leader of the Opposition, but I reserve my final decision upon it. I am certain that Australian Consolidated Industries Limited has no fear of any legitimate competition from Australian companies, but it has a very well-founded fear of competition, in the early stages of the development of this local industry, from powerful and wealthy overseas companies. Every honorable member should agree with me that a desire for protection from competition of that kind is not only proper, but also very necessary. Australian Consolidated Industries Limited has no fear of legitimate competition from Australian companies, because Australian companies would not be so overwhelmingly powerful and would not control such vast resources as overseas companies. Local competition would be on a more equitable basis than competition from overseas. For the reasons I have Stated, I am prepared to accept in principle the amendment that has been submitted by the Leader of the Opposi: tion.
– May I add that the Government is prepared to accept the amendment in principle.
– No doubt those honorable members who are opposed to the establishment of the industry will be disappointed to hear that statement by the Minister. But those of us who are still anxious to see the establishment of the industry can congratulate ourselves on having established some solid basis for discussion. [Leave to continue given.]
It is a thoroughly false approach to this important problem to say that we should not establish this industry because shortages of labour might be caused. Probably a score, or more, of new industries have been established since the war began, but the proposed motormanufacturing industry is the only one against which I have heard complaints as to the desirability of establishing it. It is most remarkable that the Government has heard nothing but praise of that score or more of other new industries and condemnation of the motor-car manufacturing industry. If labour shortages are imminent, we should not simply take the view that the next industry that is proposed to be established is the one which should be curtailed or eliminated. The proper method of approach would be to make a complete survey of the whole of the labour resources of the Commonwealth in order to classify industries in their proper order, and make a proper allocation of labour available. If that were done there would be no argument left against the establishment of the motor-car manufacturing industry on the ground that it might create labour shortages. The manufacture of motor cars is the greatest industry in the United States of America, and I believe that it can be developed into the greatest industry in this country. No other industry has a greater employment potential than this one, because it affords not only a vast amount of employment in the actual operation of manufacturing motor vehicles, but also a tremendous amount of consequential and ancillary employment in the subsidiary industries to which it gives rise. That fact is of great importance and should be considered in relation to this proposal.
We should not think merely in terms of the employment that this industry will provide to-day. We must realize that when this war is over from 150,000 to 200,000 men, including demobilized soldiers will be thrown out of thei r occupations almost overnight and revolutionary changes will have to he made in order to effect a re-adjustment of industrial and social conditions. I remind honorable members of the Country party that it will not be possible, after this war, to rehabilitate soldiers and others by placing them on the land as was done after the war of 1914-18. That avenue of repatriating soldiers will bc completely closed when this war is over. Probably what most concerns every soldier who enlists for overseas service to-day, apart from the immediate problem of patriotism, is the thought of what he will do when he returns from the war. Above all other thoughts rises tlie question as to whether there will be a job for him when the war is ended. 1. ask honorable members to consider the Government’s proposal in the light of i hose thoughts.
– I understand that it is proposed to allow other Australian companies to participate in the establishment ‘ of the motor-car manufacturing industry. Will that opportunity be left open to them for an indefinite period?
– I understand that there is no limit to the period for which that opportunity will remain open. Post-war reconstruction was one of the factors that entered strongly into the calculations of the Government when it formulated this scheme. We cannot completely dissociate it from the need to repatriate soldiers after the war and to provide full-time employment for men who will lose their employment in munitions and armaments factories and in the iron, steel and many other industries, immediately thi3 war is concluded. Unless we have a motor-car manufacturing industry, and other industries capable of rapid expansion, this country will be faced, after the war, with the most calamitous depression of its history. That is not the least reason why I strongly urge the House to support the proposals of the Government, or, at any rate, that of the Leader of the Opposition, so that this industry may be permanently established.
– I find myself almost entirely in agreement with the honorable member for Macquarie (Mr. John Lawson). The only point in his speech with which I do not altogether agree is his criticism of the Australian-American companies for not rushing into this business. That was merely history repeating itself. There are two or three major companies in Australia whose head-quarters are in New York. Naturally those companies with their immense mass-production plants in the United States of America have no desire to interfere with their well-planned and specialized organization which has been established here as a branch of its parent in the United States of America. I remind the honorable member for Macquarie that that is only what we have always experienced whenever we, on this side, have advocated the granting of protection to any industry in its initial stages. We have always found that people who are doing well under existing conditions have no desire to change their methods. The American companies have no desire to interfere with a policy which works well and is profitable to them. They would have gone on for another decade >as they had begun unless something happened to change their views. That does not mean that people who oppose innovations are never ready to fall into line later. At least one of the large American companies in Australia is now prepared -to engage in the manufacture of engines and chassis without being granted a monopoly. I refer to General Motors-Holdens Limited. However, I believe that the company which came forward, when others did not, and was prepared to risk its capital in an Australian enterprise should be given an opportunity to do this work on the basis of the original act. We cannot count on members of the .Country party supporting any policy of protection, although I am hopeful that in this instance some of them will do so; but at least the members of the United Australia party and the Opposition could be unanimous regarding the proposal if the agreement were scrapped and re-drafted on the basis of the original act. I marvel that the company in question, or any student of economics, should give any consideration at all to the seeking of a monopoly in order to enable the company to undertake this work, because it must bc obvious to them that the very nature of the industry almost inevitably gives a monopoly to the company engaged in it. In a country like Australia, where the turnover is comparatively small, itis almost inevitable that the people who first engage in the manufacture of chassis and engines will achieve a monopoly. Why such people should desire to have a legalized monopoly I cannot understand, especially as the granting of a monopoly is against the spirit, if not the letter, of the Constitution. On several occasions, the people of Australia have been asked for powers to dealwith monopolies. Although Australians generally are opposed to monopolies, it must be obvious to students of this subject that in a growing country certain industries almost inevitably, because of their character, become monopolies. A company which exhibits courage and iswilling to take risks which the company now under consideration is prepared to take, will have a monopoly for some years to come. We have been told that, if the present requirement that 66 per cent. of the capital of any company wishing to participate in the bounty for the manufacture of motor cars shall be of Australian origin were removed, General Motors-Holdens Limited would be prepared to begin the manufacture of engines and chassis forthwith in competition with other manufacturers, and without being granted any monopoly. I cannot agree to the monopoly clause in the agreement. If that clause be deleted, I do not think that any member of the Oppositionwill oppose the agreement. It objects to the Government’s proposal because it is opposed to the granting of a monopoly to any company. For eight or nine years the Opposition has advocated the establishment of this industry in Australia, and for two or three years of that period it has severely criticized the Minister (Sir Henry Gullett) for not proceeding with thework.
– I have always been keen on the establishment of this industry.
– Some time ago, the Ministerwas criticized for this inaction,which it was thought might result in the fundwhich had been established to enable a bounty to be paid being used for other purposes.
– The honorable member iswrong; I moved the adjournment of the House on that subject.
– Does the Minister agree that he has always had the support of the Opposition in his attempts to launch this industry?
– Hear, hear ! I have never had to be urged to do my best to establish it.
– The Minister’s interjection confirms what I have said. On other occasions, I have said that the manufacture of motor-car engines and chassis is vital to the development of Australia. Now that the country is at Avar, I say that it is even more vital.
I agree with the remarks of the honorable member for Macquarie about the post-war problem of find ing employment for men engaged in the manufacture of munitions and on other war-timework who will be dismissed in thousands when peace comes. We are now training in various branches of engineering thousands of men who,when the war is over, will have to seek other jobs. There could he no more opportune time than the present to start this industry. Eighteen months or two years must elapse before any company can produce engines and chassis, even if it had a perfect agreement tomorrow. Some of the machinery necessary for the manufacture of the motorcar parts will have to come from the United States of America, and honorable members know the difficulties that exist in regard to shipping. In addition, premises will have to be constructed, and plant installed, and other initial difficulties overcome, before production can commence. I disagree with the honorable member for Macquarie that the war may last for four or even six years. I believe that the methods adopted in modernwarfarewill shorten the duration of the conflict. When peace comes again, we must be ready to provide work for the men who will then be dismissed from their employment in the manufacture of arms and munitions. I do not think that the establishment of this industry will take from the manufacture of arms and munitions any considerable number of ‘ the fitters and turners now employed in that capacity. The manufacture of motorcar engines and chassis .will necessitate the use of large machines, and most of the labour will be performed by semi-skilled process workers, for whom it is difficult to find work in the munitions establishments.
The Minister will understand that it is impossible for the Opposition to support an agreement which makes it possible to hand over to a company which is granted a monopoly moneys collected from a tax on imported engines and chassis in the form of a bounty. Surely, the Minister never expected the Opposition to agree to such an unfair proposal as that? I argue that there is neither need nor justification for a monopoly by law; for a monopoly is almost inevitable in any .case. The directors of this company are wise enough to know, as do the members of this House and many members of the general public, that that position can hardly be avoided. Moreover, they are men of experience, and I have great admiration for what they have done in respect of other industries in this country, “Works with which they have been associated have achieved notable successes without any monopolistic power being given by law.
It has been suggested that certain American companies may dump motorcar engines in Australia, after this company reaches the production stage. But surely if that should come about wo have had sufficient experience of dealing with the dumping of other goods to be able to deal with the dumping of motor-car engines. Personally, I do not believe that it is at all likely to happen. It is much more probable, in my opinion, that the one or two existing Australian companies which are already engaged in the manufacture, on a big scale, of considerable parts of motor cars, will prefer to co-operate with the company manufacturing the engines. I do not think that they will wish to enter into competition. I predict that before Australian Consolidated Industries Limited has been long in production a complete understanding will be reached between it and the major interests concerned in the semi-complete production of motor cars in this country. It would be unforgivable for the Commonwealth Government to subsidize a new company in order to help it to compete with companies that are already manufacturing substantial parts of motor vehicles within our borders. I cannot believe that such a proposal could ever be seriously considered by an Australian government, or, for that matter, by any honorable member of the Parliament. Yet it seems ‘that the agreement now before us provides that a monopoly shall be given to one company which has undertaken to produce a complete motor car to the detriment of other companies that are producing up to 80 per cent, of the completed vehicle, one getting a bounty and not the other ; such a thing is impossible.
– Will the honorable member accept my assurance that what was meant in the agreement was engines and chassis only?
– That point will be attended to.
– I am very glad to hear it, and I accept the assurance of the honorable member for Macquarie and the Minister. I cannot imagine any political party supporting such a lopsided proposal as that which seems to be embodied in this agreement. As the Government seems disposed to meet the main point to which the amendment of the Leader of the Opposition is directed, I trust that Ave shall be able, by a substantial vote, to show our good wishes to this company, which has. had the courage and ability to intimate its willingness to undertake the establishment of this new industry, and at the same time let others do likewise if they want to do so. I make it clear, however, that Ave cannot agree to any monopolistic clause in the agreement.
.- T share the view expressed by the honorable member for Gippsland (Mr. Paterson) in his opening remarks that this is not the time to be debating an issue which is highly controversial both inside and outside this House. I believe that the Australian public regards the surroundings of this proposal with something akin to amazement and bewilderment. The circumstances of the nation at this moment are such that we should be giving our attention to more important mattersthan the granting of a monopoly to one firm to manufacture motor cars with the help of a substantial bounty, particularly as it has been notorious for its profiteering. I believe that officials of the Customs Department are even now inquiring into the profits made by the company in other directions.
The speech of the Prime Minister (Mr. Menzies) in submitting this agreement for our approval was such as only an honorable gentleman with great oratorical gifts could have made. The various points in favour of the agreement were advanced with that clarity for which the Prime Minister is renowned, but, great barrister though he be, he completely overlooked any consideration of the economic basis of the proposed new industry. It is for that reason that a number of his supporters in the United Australia party and also in the Country party feel impelled to utter their protests. The Prime Minister traced the events leading up to this agreement. He began as far back as 1936, but he omitted all mention of one important and notable factor. He did not tell the House that a government of which he was a member had, through its representative in the House, given an assurance that if the Tariff Board, after its investigation, failed to submit a satisfactory and favorable report, the Government would be finished with the whole proposal.
– That is not so. Will the honorable gentleman read the words that I used?
– I shall with pleasure. I refer honorable members to Hansard, volume 152, page 2543, where they will find these observations by the Government spokesman -
I give the committee my assurance atthis stage that if the Tariff Board itself, after inquiry, arrives at the conclusion that I am totally wrong and that this industry will be uneconomic and expensive, I shall be finished with the whole proposal.
– The Tariff Board did not find that I was totally wrong, or that the industry would be uneconomic.
– The Minister should permit me to make my speech.
– The honorable member for Deakin (Mr. Hutchinson) cannot expect to make such inaccurate charges without any reply being made to them.
– The Minister went on to say on that occasion -
In that regard I speak for the Government. It will not proceed with the expansion of this industry if the Tariff Board declares that it will be uneconomic.
Honorable members must agree that the absence of comment on this point by the Prime Minister was notable, particularly as he, and. the former Treasurer, Mr. Casey, who is now Australia’s representative in the United States of America, were the two members of the Cabinetwho most strongly insisted upon the reference of the whole subject to the Tariff Board. The economics of the proposed new industry were declared by both honorable gentlemen to be seriously open to doubt, much to the chagrin of the Minister now in charge of this debate, for originally he was strongly opposed to the reference of the matter to the Tariff Board.
The Prime Minister also stated, in his speech last Wednesday, that, after the Motor Vehicle Engine Bounty Act had been passed, no proposals were submitted to the Government in connexion with the matter. I am not here to-night as the spokesman for any of the companies thatmight be expected to be interested in these issues. I have no motormanufacturing industries and no great distributing organizations in my electorate, nor do I hold a brief for any of the executives of overseas companies. I have no hesitation in declaring, however, that the reason whycertain interests in this country were not prepared to rush into this new industry was due, first, to their fear that the cost of production would be excessive - they realized that if production costs rose, the cost of motor vehicles would rise, and serious difficulties would be likely to overwhelm the industry - and secondly to the fear of the consequences not of the bounty but of the granting of monopolistic powers to one organization. It is remarkable that the Government itself is now willing to eliminate the paragraph of the agreement which grants monopolistic powers. That is surely a strange phenomenon. In other words, the Government -is now prepared to remove one of the most vital provisions of the whole agreement. I can easily justify the fears of certain companies of the result of what we now know as the monopoly clause of the agreement, for it is to he found in that part of the report of the Tariff Board which directed attention to the comparatively limited market for motor cars in Australia. In the year in which this industry was reviewed by the Tariff Board, approximately 70,000 motor vehicles were sold in Australia. Of this number the popular makes of motor cars accounted for 29,000 sales and utility vehicles for 6,000, making the total 35,000. If we assume that the company with the monopoly would sell 25,000 vehicles, we can see that a very limited market would be left for other manufacturers of popular cars. It was on this account that they feared that they might have to close down parts of their works, for the market available to them could absorb only between 10,000 and 15,000 vehicles.
After the report of the Tariff Board had been considered by the Government, an attempt was made to put into effect the recommendation of a step-by-step development in this industry. One company intimated that it was prepared, within a reasonable time, to spend £350,000 on new plant and to employ an additional 130 employees on a permanent basis in manufacturing chassis parts hitherto not made in Australia. It also intimated that it would be able to use an additional 3,000 tons of Australian steel per annum. The Government took no notice whatever of its proposal.
It was at this stage that the Menzies Ministry came into office. Although this was a new Government, it included among its personnel gentlemen who had advocated on the public platforms of the country the policy of referring all matters of this description to the Tariff Board, whilst rightly, in my opinion, not undertaking necessarily to accept all of its recommendations. But if any member of the Government had gone to the country in 1937 and suggested that a monopoly should be granted for the manufacture of motor cars in Australia, I am afraid that a good many of us would not be here to-day. The Prime Minister announced that it was necessary to give some company a monopoly in order to get the industry started. I do not disagree with that. So far as it goes I believe that there is room for only one manufacturing company, but I am convinced that, even with a monopoly, and with Government assistance, the cost of the product must necessarily be excessively high. The Prime Minister discussed this matter with the State governments, but he did not get much encouragement from them. Apparently they were not keen on the proposition. Then came the war, and, to the surprise of most Australians, it was found that wartime powers were to be used for the establishment of an industry which representatives of the Defence Department have stated time and time again is not a vital defence need. The Government literally hawked this proposition about the country. As the honorable member for Macquarie has said, an officer was sent about the country to see if any firm would take up the offer, and eventually Australian Consolidated Industries Limited did take it up on the conditions set forth in the contract. Now, one of the vital clauses of that contract is to be removed by the Government itself. The Motor Vehicle Engine Bounty Bill was introduced on the 6th December, 1939. As honorable members will recall, that bill was debated on the eve of the Christmas recess. The debate began about 4 o’clock in the afternoon, and during its course not one word was said, that I can remember, about granting a monopoly to any company. Before I left to catch my train that night, I was surprised to hear a whisper that a monopoly was to be granted, and that Australian Consolidated Industries Limited was to get it. I cannot reconcile that with the assertion that all relevant facts and particulars were placed before the House.
The Prime Minister spoke of the matter of dollar exchange. We have been told that the establishment of this industry is imperative because we must conserve dollar exchange at this time. 1 point out that we have already been at war for nearly nine months, and we have not yet given permission to any company to begin the manufacture of motor cars. Even after that permission is given, it will be two years before the company commences operations. Then, it will not go into full production at once, but, if it gets through its teething troubles satisfactorily, it will run off during the first year between 5,000 and 8,000 units. Thus, it will be four or five years before the company reaches volume production, and before its efforts will contribute materially to the saving of dollar exchange.
– A start must be made.
– Yes, but in the first place it will benecessary to expend precious dollars in the purchase of plant from overseas. Unless the war lasts for four or five years - and we hope that it will not - no real benefit will be derived from this enterprise in the way of saving dollars.
– That is pure assumption.
– It is not. The company itself has said that it will he two years before it gets into production. We have also to consider the demand that the establishment of this industry would create for the services of skilled men. At the present time, the Government needs all of the skilled men available for our munitions factories and for carrying out our share of the Empire air scheme. Only to-day, the Minister for Air (Mr. Fairbairn) admitted the shortage of skilled artisans. A few days ago he said, “I want any lad with any experience at all whom we can train”. As time goes on, there will be an even greater demand for men of this kind.
– We shall want internal combustion engines for tanks and other war vehicles.
– I have already said that, in the opinion of high officials in the Defence Department, it is not necessary to establish a motor-car manufacturing industry here for defence purposes. In any case, it would be three or four years before any considerable number of engines could be produced. The Government is proposing to embark upon this industry at a time when all of the skilled men available are needed for defence work. I am aware that many of the men who would be engaged in motor car production would not need to be skilled artisans. Their correct designation would be process workers or, as they are called in the United States of America, operators, hut those are the very men whom we urgently need for the carrying out of our Empire air scheme. As for the manufacture of tanks, it is only necessary to point out that if production is not to begin for two years, and if it will be three or four yearsbefore volume production is to be undertaken, we shall have to wait a long time for the tanks.
The important point that the Prime Minister conveniently forgot, and regarding which the Tariff Board has been so outspoken, is the business side of the industry. In 1935, before ever this proposal was brought forward, I had the privilege of discussing car production with representatives of three leading motor-car manufacturing firms. At that time, as indeed now, I was interested in motor cars only as a hobby. I discussed it with representatives of Roote Brothers in England, the makers of Hillman cars, with executives of the Ford Manufacturing Company in Detroit, the Ford Manufacturing Company in Canada and with a representative of the Nash Motor Company, of Wisconsin, United States of America. All of them assured me that it was necessary to produce something like 25,000 cars a year before it was possible to get costs down to a competitive level. I was trying to impress on one of the Roote brothers the need for building an English car that could compete in Australia with American cars. He told me that it would not pay them to produce such a car unless they were assured of a home market for it. Australia, he pointed out, was one of the most fluctuating markets in the world. Sometimes at absorbed 100,000 cars in the year; then it might drop to 9,000 or 10,000, and rise again to 15,000; in 1931 it had dropped to 4,000. If he built a car of high horse-power upon which a high tax would have to be paid in England and ran off 30,000 units at a cost of £3,000,000 or £4,000,000 in plant and he was not assured of a home market, how would he get on, he asked, if he were to strike a depressed Australian market? “If you have a depression in Australia,” he said, “where 13 your market, and where can I sell my motor cars?” I should like the honorable member for Macquarie to recall that remark when he checks over the last part of his speech to-morrow morning. If we encounter another depression after this war, which I hope we will not, where will be the market for the cars which we manufacture here, and what will be the cost of such cars? In the United States of America I found out that the lot of the small manufacturers, as they are called in the United States of America, is a very hard one. In fact, many of them have gone out of business or have been absorbed. The Hupmobile Company has recently experienced great difficulties, and only recently 2,500,000 dollars was provided to enable the Graham-Paige Company to carry on. It is not only a matter of .purchasing raw materials in quantity, and of overhead costs, but it is also a matter of competing against the gigantic companies for necessary patents. In recent years, many companies manufacturing the more popular makes pf cars have had to pay excessive royalties to General Motors for the use of patents necessary to popularize their cars. I found that a Canadian plant running on. a volume of about 100,000, with a 30 per cent, exportwhich Australia has not, and will not have for many years - importing the cylinder block, the cylinder head, and the chassis frame, and bringing the body panels from the other side of the river, could not sell its cars at within 200 dollars of Detroit prices. That indicates that, big-volume production is everything, and tha t an industry of this kind must definitely bc regarded from that point of view. I regard cheap costs of transport as of real value for the development of Australia. Possibly I view the matter somewhat differently from many of my friends in the cities. The city man does not realize the value of a car as does the country man, and the country man who lives handy to civilization does not make the full use of it as does the man outback. Cheap transport is essential to the development of a country the size of
Australia, with a population of a mere 7,000,000. Yet government after government, both State and Federal, has hounded the motor industry down with excess costs, until to-day it is working under a burden of taxation of from £16,000,000 to £20,000,000 annually. Our approach to the matter has been entirely different from that of America, which is about the same size as Australia, and in the early days had a small population. There, everything possible was done to provide cheap transport, in the knowledge that therein lay the development of the country. Australia has developed a few cities, and has drained the country districts. What happens when the prices of our exports fall? The city factories close, and the unemployed are poured onto the streets. Such a state of economy must be greatly deplored by every one. The vital effect of transport on development is overlooked by many.
In the matter of excess costs, apart from what I have already said, I wish to base my argument on known facts. As honorable members are aware, when one commences to solve a geometrical problem one first takes the available data - in other words, the known facts - and docs not pull down airy assumptions out of the atmosphere. This is what the Tariff Board brought to light -
One company made inquiries as to the cost of manufacturing car parts on the basis of a volume of 30,000 chassis per annum. Replies received covered 47 parts, representing approximately 84 per cent, of the value of the complete chassis, and showed prices which, taken collectively, represented- 117 per cent, more than the export price in Australian currency of similar parts from Canada. Taking shock absorber bodies as. representing parts which are more intricate and require greater accuracy than those covered by the previous comparison, the company submitted figures to show that the Australian price would be 188 per cent, more than the Canadian export cost in Australian currency. It then concluded that taking all parts of a chassis the cost when manufactured in Australia would be about 140 per cent, greater than the f.o.b. value in Canada in Australian currency and it was on this supposition that it based its estimate of the necessity for an increase of about £00 in the selling price of the complete car.
I am willing to accept the Tariff Board’s experience of costs, both in Australia and overseas, before that of any honorable member. This is what the Tariff Board said concerning the motor body-building industry -
Another method adopted in attempting to measure the excess cost of manufacturing chassis parts in Australia was to compare the cost of metal pressing for motor body panels in Australia and overseas. In one case, the Australian manufactured cost (excluding tool write off) exceeded the United States of America manufacturing cost in Australian currency by 170 per cent, and in another the Australian selling price was higher than the United States of America f.o.b. price in Australian currency by 94 per cent.
The’ Tariff Board in a report dated 23rd January, 1935, recom mended a rate of duty equivalent to an average of over 200 per cent, ad valorem under the general tariff on motor body panels. This rate, together with freight, insurance, &.C., would permit of Australian prices being three times the United States of America f.o.b. prices in Australian currency. lt is common knowledge that the panelmanufacturing industry viewed the board’s recommendation with apprehension and it was not put into effect.
When I was in Detroit, the price of an American body for a Ford car was in the region of £25, compared with an Australian price of from £86 to £90 at that time. Thus my investigations bore results which coincided with the findings of the Tariff Board. Another extract from the report of the board* is as follows: -
Although Home witnesses claimed that chassis manufacturing costs in the United Kingdom were considerably more than 70 per cent, higher than those in the United Slates of America, if that figure’ be taken, the lowest Australian cost that could be expected would be double the United States of America cost converted to Australian currency.
Those figures were ascertained by the Tariff Board on known facts, not on assumptions by customs officials or any other person. If any other honorable member or if any Minister can prove that this is not an uneconomic industry, and can contradict the findings of the Tariff Board, I shall bc astonished. After an exhaustive examination of the whole field of Australian manufacture of car parts, the Tariff Board found on page 26 of its report as follows : -
The comparison showed the Australian cost io average 131 per cent, higher than the Canadian, the excess for individual parts ranging from 25 per cent, to 241 per cent.
The revenue aspect is vitally important to Australia. lu this respect, a further most interesting statement of the Tariff Board appears on page 21 of its report. It reads - linking all allowances for the duty levy of ().7d. per lb, of chassis weight, and for the compensations just mentioned, it is probable that the net cost of bounty and revenue losses over a term of years would reach £2,000,000 per annum. ft is no wonder that, when the eminent barrister who is our Prime Minister (Mr. Menzies) and the honorable member for Macquarie (Mr. John Lawson) dealt with this subject, they did not refer to the economy aspect of it as disclosed by the Tariff Board.
– I referred to the opinion of a higher authority.
– The Tariff Board definitely found against proceeding with the manufacture of complete motor cars in this country. If that be challenged on the ground that the board recommended in favour of a “ step-by-step “ procedure, an answer can easily be furnished by quoting the terms of reference to the board. It was not asked, as is usually the ease, to’ inquire merely into rate of duty, or anything of that sort, but was requested to ascertain “ the best means of giving effect to the Government’s policy “. That is the reason for its having made the recommendation along the lines of a “step-by-step” process. It certainly found definitely against proceeding with the entire manufacture of the car.
I wish to deal briefly with the matters of employment and post-war construction. I think that I have at least proved to the House that, in the opinion of the Tariff Board, excessive cost is involved in the matter. Excessive cost in the production of any article involves reduced use or consumption. In motor car manufacture, reduced volume must cause prices to rise, because the cost of dies and other essential requirements . has to be charged against so many fewer units. Unemployment could easily be caused if an industry were not conducted on economic lines. A national undertaking does not differ greatly from a privately-run concern. I ask honorable members : If they were to run a business on uneconomic lines, would they provide employment? Of course they would not; they would become bankrupt, and turn their employees onto the streets. If, by reason of excessive costs, the volume of production is lowered, surely unemployment must be caused in all of the subsidiary industries associated with the existing industry. Any person who has a thorough knowledge of motor car manufacture will say that, for every man employed on the actual manufacture of a motor car, there are from three to four men employed in the selling and servicing of the car. I defy any honorable member to go to any company which engages in this production and then challenge these figures. If the volume of production falls there could easily be an increase of unemployment rather than a decrease. The best argument concerning post-war employment was advanced by the honorable member for Macquarie; but the fact stares us in the face that the only cheap part of a motor car to-day is that part which is imported, the engine. A Ford VS engine can be landed in Australia for £25. Yet the cost of the complete car is near the £400 mark. Any reduction of volume would mean unemployment in trades devoted to the manufacture of motor bodies, tires, shock absorbers, bumper bars and everything else that at present give employment to the Australian workman. Why then is this man Smith going to take this matter up? He has been described in this House as a “tough egg”. He is apparently a hard-headed business man.
– Tough men are needed to cope with the Ford company and General Motors-Holdens Limited.
– I agree. I do not mean any discourtesy to Mr. Smith, but he is long-sighted and he realizes, from the theory and practice of tariffs in Australia to-day, that all a man needs is a vested interest and he is set. As one manufacturer said to me, “If I were going to establish a big industry in Australia I would see that parts of it were set up in United Australia party and Country party electorates. I would he assured of a block vote from the Labour side and if I halved the other side I could go ahead and do what I liked “. Once you have a vested interest created it. is almost impossible to break tariffs down. Mr. Smith knows very well that so long as this concern is created and got going, even if it is run at a loss for some years, no government will crush him and that the time will come when he will be able to say, “I demand protection”, and get it. I know that that is so from my eight years of experience in this Parliament. Then he will be able to rake in the pounds. I think that that is the motive behind Mr. Smith’s move. To a hard-headed business man that is all right, but to the people who regard excessive transport costs and the need for tariff revision as vital, it is something different.
The method recommended by the Tariff Board of step-by-step development of this industry is the sane and sound method. We have had another offer from the Ford company to proceed with the manufacture of additional car parts on a much greater scale than the first. I believe that Richard in Adelaide is considering something of the same sort. This is not, a matter of foreign capital. The capital can be Australian if the Australian Government desires. This offer by the Ford company is open. That company says, “ If you do not want capital to come to this country, all right, we will make it an Australian concern and go on expanding until we can build the complete car “. [Leave to continue given.] But what is all this talk about not wanting foreign capital in this country? I am astounded that any one should say at the time when our war effort will take all that Australia can provide, that we should not bring in capital from overseas. The man who waits until he has solid cash in the bank does not get far in business. Why, many wool men have already spent two wool cheques ahead. No man who is not prepared to raise capital outside and use it could be termed progressive. What this country wants for its development is capital from overseas. I fail to see the logic of requiring that this industry be developed with practically all Australian capital. The Ford company has stated that, if this industry has to be commenced in this country as part of government policy it will step in “ and 16,000,000 dollars will be brought by it into this country to erect a factory for the manufacture of chassis and engines. Mr. French told me himself that Henry Ford told him that if he wanted this 16,000,000 dollars he could have it. There you are. I am not interested in this matter from a personal point of view. I have argued on nothing but known facts, as elicited by the Tariff Board and as stated by men of high standing in Great Britain and the United States of America, which I defy any honorable member to controvert. I believe that the step-by-step process is the right way in which to begin the manufacture of motor cars in this country.
Debate (on motion by Mr. Prowse) adjourned.
Bill brought up by Mr. Street, and read a first time.
– by leave - I move -
That the hill he now read a second time.
The purpose of this bill is to make provision for the payment of war pensions to eligible members of the forces serving or to serve in the present war and to the dependants of those members. A war pensions bill was first introduced into this Parliament in 1914 when the Empire was engaged in war with the same ruthless and relentless enemy as to-day imperils the freedom of all liberty-loving people. Although this bill is introduced at a time when the tide of battle is temporarily running strongly against the forces of liberty, I have no doubt that the final victory will rest with Britain and its Allies and that the forces from this Commonwealth will play as great and important a part in the securing of that victory as did those of 1914-18.
As I have said, a war pensions bill was first introduced in 1914 and after various amendments and variations the government of the day passed in 1920 the Australian Soldiers’ Repatriation Act - an act which, with various amendments shown by experience to be necessary as events progressed, is still operative today, and provides the basis upon which all claims for pension are made and determined. The act is administered by a Repatriation Commission consisting of a chairman and two members, all of whom are themselves returned soldiers. One of them is selected for appointment from a panel of names submitted by organizations of returned soldiers.
– It is a very good commission.
– Yes. I take this opportunity to pay a tribute to the commission. All honorable members will agree that the gentlemen on it, during the period of their appointment, have carried out their difficult task at all times with courtesy, as well as the greatest efficiency and expedition. In each State a Deputy Commissioner for Repatriation is responsible to the commission for all administration within his particular State and each deputy commissioner is, of course, a returned soldier, whilst the male staff of the commission throughout Australia is composed almost entirely of men who saw service in the last war.
I have no desire to deal at length with the various activities of the commission in this speech, but I think it proper to say that it has varied responsible and exacting duties to perform. Apart altogether from the matter of determining claims for pension the commission controls and administers throughout Australia numerous general hospitals, tubercular sanatoria, hostels and artificial limb factories. Those various institutions are conducted with a degree of efficiency which is most creditable to the commission and particularly to those of its medical, nursing, artisan, orderly and domestic staff whose special care it is to administer and service such institutions.
A little known but highly important phase of the work of the commission, and one which is of inestimable value to individual and to the community is that known as the Soldiers’ Children’s Education Scheme. It applies to children of men who die, are blinded, or are totally and permanently incapacitated as the result of service. The child is assisted in the selection of a suitable vocation and its education is continued through primary, secondary, technical or university stages and monetary assistance is made available according to the circumstances of the case and the nature of the training. Many thousands of children have been thus assisted and in all the professions and trades are to be found men. and women who owe their advancement to the opportunities afforded them under this scheme. It is a phase of repatriation work which has been followed in Australia alone, but many other countries are showing evidence of a lively interest in the work. The commission readily admits that the success of this branch of its administration is almost wholly due to the splendid service given in an honorary capacity by the members of the education boards in each State. These members are experts in every phase of educational work and their knowledge and experience enables them skillfully and scientifically to guide the children to ultimate success.
From the report of the Repatriation Commission for the year ended the 30th June, 1939, I find that 249,293 war pensions were then in force, and that the amount paid in pensions in that year was £7,S1’9,289. Of these pensioners, 77,151 were incapacitated members of the forces, 144,571 were dependants of incapacitated members and 27,571 were dependants of deceased members. Up to the 31st December, 1939, the Repatriation Commission has expended on pensions, medical treatment, vocational training, employment, education and general re* patriation benefits the total sum of £186,352,922, whilst, in addition, the war gratuity involved £27,524^828 and wai service homes £29,7&5,314. Australia’s total repatriation expenditure was thus (he staggering sum of £243,633,064 over n period of 25 years.
The present legislation providing for war pensions and repatriation benefits does credit to those responsible for its introduction, for they evolved a scheme more liberal in its provisions and more widespread in its benefits than that provided under the legislation of any other country. This fact has been acknowledged on many occasions by returned soldier organizations.
– The onus of proof is not too satisfactory.
– That has always been a debatable matter.
The credit may well be shared by all parties in this Parliament, for the provision of reasonable compensation by way of pension and other benefits to disabled members of our forces has always been the desire of the people of Australia and its elected representatives.
This bill, I should say at the outset, has no application to members of the forces who served in the last war, and such amendments to the act as are contained in the bill do not in any way interfere with or impair existing rights and privileges. The sole purpose of the bill is to extend the principles of the .present act to members of the forces serving in this war. The opportunity is also being taken to make minor amendments to certain sections of the act. For the purpose of the present war, a new definition of “ member of the forces “ and a granting section having reference to that definition, are inserted. I shall have an opportunity in committee to explain the various amendments in detail.
The bill, itself, is short. I believe that, at this stage, over-elaboration should be avoided, as there i3 no doubt that the problem of repatriation is one that must largely be solved by trial and error. Experience will show if, and in what respects, the bill falls short, of requirements, and necessary adjustment can be made later. The measure consists of fifteen clauses. The first two require no explanation. Clause 3 merely adds a new division heading to section 4 of the present act, whilst clause 4 permits members of State hoards to deal with the cases of members of the present forces. Clause 5 extends the period from six to twelve months during which a child of a member of the forces, who has passed the pensionable age, that is sixteen years, may apply for a continuation of the pension on the ground of inability to earn a livelihood. Clause 6 amends section 36 of the principal act, and makes it apply to members of the present forces. It provides that a pension cannot be paid at the same time to a legal and a de facto wife or widow. Clause 7 makes section 38 of the act apply to the present forces, and relates to pensions payable to divorced wives. Clause 8 refers to section 41 of the act, and prevents the granting of double pensions to children. A child who is pensioned, and later becomes a step-child cannot receive two pensions. Clauses 9 and 10 are necessary to permit appeals by members of the present forces to the various repatriation tribunals.
– Are the conditions the same as before?
Clause 11 is the main clause of the bill and inserts a new division in the act. The proposed new sections may best be considered in committee, but I draw attention to one amendment which restricts the eligibility of wives or widows for a pension to those married before or during the service of the member of the forces, or within seven years after the discharge of the member from the forces, or the end of the war, whichever occurs the earlier. This provision applies similarly to children. A definition of “ active service outside Australia “ is included in the new division, and there is also a granting clause providing authority for the award of pensions.
Clause 12 adds certain definitions to those already in the principal act. Clause 13, which amends section 57, is purely a machinery measure, whilst clause 14 relates to the making of regulations. This clause is made retrospective in operation, so as to remove any doubt as to the legality of the existing regulations. The final clause amends the third schedule to the act, which brings the pension payable to children, other than a second child, up to 15s. a fortnight. The present pension is 10s. for each child after the second child, and a special allowance of 5s.
– Will the conditions with regard to sufferers from tuberculosis be liberalized ?
– No alteration is to be made in that regard. The bill is one that can be best dealt with in committee. It does not involve a very substantial departure from the present act. It does not detract from the rights of the old Australian Imperial Force, but merely extends the benefits of the act to members of the present forces.
The division relating to the payment of service pensions is not made applicable to members of the present forces. Honorable members are aware that service pensions are payable under certain conditions on ex-soldiers reaching the age of 60 years. At the present juncture it is not considered desirable to apply that provision in toto to members of the present forces.
– Will the position in that regard be reviewed, as time goes on ?
– Yes. Past experiences leads me to say that it is desirable to supplement this legislation as and when future experience shows that to be necessary.
Debate (on motion by Mr. Forde) adjourned.
Debate resumed from page 1506.
.– The Prime Minister (Mr. Menzies) and the honorable member for Macquarie (Mr. John Lawson) have furnished a good example of special pleading, and it is regrettable that their speeches were not delivered in a better cause. In 1936, the Acting Minister for Information (Sir Henry Gullett) introduced a proposal without reference to the Tariff Board, for the manufacture of motor vehicles, notwithstanding the Ottawa Agreement with regard to the protection to be given to new industries, and notwithstanding the understanding reached between the Country party and the United Australia party that no newduty should be imposed until the matter had been referred to the Tariff Board. However, subsequently the Lyons-Page Government agreed to submit the matter to the board, and the Minister assured the House that the Government would abide by its decision.
– Under certain conditions.
– The board recommended that it would be uneconomic to undertake the industry in Australia, and I submit that the board is the most competent body in this country to determine such a matter. After a thorough investigation, the board was unable to recommend the establishment of the industry, but stated that, although it could not recommend the manufacture of complete motor cars in Australia, it recommended the adoption of a stepby.step method of establishing the industry. What is the reason for the Government’s changed outlook? Since 1936 there has been an appeal to the electors. The people in my electorate, as I believe in others also, understood that this question had been settled, because the Tariff Board had reported adversely on the proposal, and the Government of the day had decided that it would abide by the decision of that body. . However, the unfortunate death of the then Prime Minister, Mr. Lyons, led to the formation of another Government which took office without an appeal to the country. That Government has decided tha,t by hook or by crook this industry is to be started in Australia without any further reference to the Tariff Board. I submit that that is a most improper thing for any Government to do. The speech of the honorable member for Gippsland (Mr. Paterson) is worth framing, because of the facts which it contained. The honorable member told ns that, notwithstanding the fact that only the engines and chassis are imported, motor cars in Australia cost twice as much as similar cars arc sold for in the United States of America. In one instance which was cited hy the honorable gentleman, the cost here was two and a half times that in the country of manufacture. Should we manufacture whole cars in Australia, the result will be that a car which is now sold for £400 will probably cost about £600, whilst the price in the United States of America will remain unaltered. Surely that is a handicap on transport, and will militate against the development of this young country. Tt was easy to carry legislation ^ to appropriate the duties collected on imported cars and parts of cars, and thereby establish a fund of £1,500,000 to be used in the establishment of an uneconomic industry in this country; but I ask honorable members to have regard to the financial outlook. The Treasurer (Mr. Spender) is preparing the people to face excessive taxation; every field of taxation is to be exploited to the full. Yet here we have £1,500,000 which has been set aside in the interest of an uneconomic and unnecessary industry. If Parliament were now engaged in taking legal power to appropriate that money to general revenue it would be taking a wiser step.
– That would be dishonest.
– To-day, the country derives revenue from the duties imposed on imported cars and parts of cars. Every car that is made in Australia will mean a loss of revenue from customs duty. The revenue is needed, and to compensate for the loss, additional taxes will have to be imposed. The money so obtained will be handed over to a combine under the control of a gentleman who has made a huge success of glass manufacture - in Australia. His organization commenced business in Australia about the beginning of the depression.
– It has been in existence in Australia for about 30 years.
– That company has not treated the people of Australia fairly, because its last declaration of profits amounted to £2,500,000. It now proposes to utilize those profits in the manufacturing of motor-car engines and chassis, from which source it hopes still further to add to its profits. General MotorsHoldens Limited and the Ford Motor Company have been similarly assisted. Now, the honorable member for Macquarie, who is almost indecently sponsoring this proposal, suggests that those companies are not entitled to. expend their money in this country. Having heard the speech of the honorable member for Corio (Mr. Dedman), I can understand why the Government lost the Corio by-election. Efforts have been made to reduce the duties on imports of motor cars and parts with a view to making General MotorsHoldens Limited and the Ford Motor Company give to the people of Australia a better deal.
– That would mean the ruin of many smaller companies.
– It is not right that a company which has been granted protection by this Parliament should make a profit of 83 per cent., yet that is what General Motors-Holdens Limited has done. Many of our primary industries, upon the export of whose products this country depends for its credit, do not make a profit of 1 per cent. In normal circumstances, I should be opposed to this proposal, on the ground that it is uneconomic; but at a time of great crisis for the nation, when all of its man-power and capital is required to prosecute its war. effort, we certainly should not attempt to establish this new, industry which, in any case, is not likely to turn out engines and chassis for about five years. The proposal before us is the most absurd that has ever come before this Parliament. The Prime Minister himself has spoken of the need to conserve our man-power for the nation’s war effort; every ounce of man-power is necessary to the winning of the war. If it could be said that the establishment of the motorcar industry in Australia was necessary to the winning of the war, I should be inclined to support the proposal; but when the Defence Department says that it has all of the trucks and cars that are necessary, and when every motorist fears that supplies of petrol will not be available much longer, I cannot do so. In the circumstances which I have outlined it is absurd even to consider the establishment of an industry which the Tariff Board has said is uneconomic, particularly in view of the plenary powers which the Government possesses under the National Security Act. Any person wishing to expend an appreciable amount in an enterprise has to submit his proposals to the Government. I know persons in Melbourne who wish to erect blocks of flats, but before doing so have to submit the scheme to the Government, whose consent must be obtained before any capital outlay can be incurred. The honorable member for Macquarie informed us this evening that when he was Minister for Trade and Customs, an officer of his department travelled throughoutthe country in order to ascertain if any one was prepared to expend an enormous sum of money on this project, which, if available, should be used on defence activities rather than on an uneconomic industry such as this. As the Minister for Supply and Development has stated that there are insufficient trained men to work three shifts a day in manufacturing aircraft in Australia, it would appear that sufficient artisans are not available for this purpose.
– The present Minister for Supply and Development is a member of the Industrial Panel which has stated that sufficient men are available.
– A call such as has never before been made in Australia is now being made for men to shoulder arms in the defence of the Empire, and all able-bodied men are expected to serve in some capacity, in the interests of national security. If the Government acts wisely, it will use our available man-power in the interests of the nation, and not in establishing an uneconomic undertaking. Shipbuilding and aircraft construction are infinitely more important. At present, we cannot afford to consider measures which are not designed to protect the national interest. It is said that when the war is over, thousands of men who return, for whom suitable land will not be available, will have to engage in some sphere of industrial activity. If we are to be so impoverished financially, who is likely to purchase the motor cars which this company is to manufacture? As the company will not be able to sell a single car outside Australia, additional revenue will not be brought into the country, and we cannot, therefor, look to its development to assist us financially. Some honorable members opposite believe that everything that we use should be manufactured in this country, regardless of cost; but we have been advised by competent authorities that that is impracticable and uneconomic. The Scullin Government was advised by Sir Otto Niemeyer that Australia was attempting too much in trying to manufacture everything it required, and, at the same time, expecting to sell its own products overseas. The “ Big Four “ tendered similar advice, and the Acting Minister for Information made a similar statement in his earlier and more sensible days. Instead of this industry assisting in the successful prosecution of the war, it will be an actual hindrance. Regardless of the fiscal views held by honorable members, they must admit that the present is an inopportune time to enter into an undertaking of this kind. The Government should drop the bill, and. when conditions are normal, perhaps a similar measure might be justified. We have been informed that the honorable member for Macquarie, when Minister for Trade and Customs, despatched on a Friday telegrams to certain persons, some of whom could not be expected to be interested in the undertaking, because of the shareholding obligations, and asked that replies should be forwarded by the following Monday morning. It was unreasonable to expect such an early reply on a subject of such importance, and indecent haste was displayed. It is grossly unjust to give a monopoly to a company which, under the tariff protection afforded, has alreadybeen able to make unnecessarily large profits at the expense of the community.
.- I shall support the amendment of the Leader of the Opposition (Mr. Curtin) which reads -
That all words after the word “ That “ be omitted, with a view to insert in lieu thereof the following words: - “ the opportunity to manufacture motorcar chassis, including the engine, be afforded to more than one Australian company whoso capital, structure and control is in accordance with sub-section 1, paragraphs a andb of the Motor Vehicle Engine Bounty Act, and that immediate steps be taken to amend the proposed agreement between the Commonwealth Government and Australian Consolidated Industries Limited to give effect to the foregoing ; and furthermore that in the event of moro than one Australian company being established for the said purpose, the number of engines and the total amount of bounty payment be reviewed.”
The Prime Minister (Mr. Menzies) remarked truly in introducing this measure that the whole proposal for the manufacture of motor vehicle engines in Australia has had a chequered history which it is hardly necessary for me to review at any length.
Section 8 of the Motor Vehicle Bounty Act 1940 provides - ( 1. ) The rates of bounty payable under this act in respect of the production of engine units shall, subject to this act, be -
It will lie seen therefore that the bounty is to be payable on a sliding scale. Since 1936 the Government has been accumulating from the proceeds of a certain tax a fund to provide for this bounty which now totals about £1,500,000.
The honorable member for Forrest (Mr. Prowse) has said that the industry will be uneconomic and will therefore be a burden upon the community. The honorable gentleman’s fiscal policy is, of course, totally opposed to the establishment of secondary industries in thiscountry. Whilst I have the greatest respect for his consistency, I hold the view that we shall never be able to increase the population of Australia to any great number, or to fill our vast empty spaces unless we can establish secondary industries. It is apparent to every body to-day that our principal primary industries have reached their maximum development in relation to the employment of workers, although their output is still increasing. Actually, employment in some of our primary industries is diminishing. Secondary industries are therefore our only hope. During the quarter of a century since the last war, Australia has made remarkable developments in this regard, with a consequent increase of population.
It may be true, as the honorable member for Forresthas said, that the Tariff Board reported that it would not be economic to establish this industry. Even the sponsors of the proposal concede that in the early stages of production the work will be uneconomic. But we have accumulated funds to meet that very situation. I do not think that any honorable member of the House could possibly agree to the Government using for any other purpose the money that has been specially ear-marked to assist in the establishment of motor-engine manufacture.
In the past other secondary industries which are proving of the utmost value to Australia, have been organized on what appeared to be an uneconomic basis. I refer particularly to the manufacturing of reapers and binders and other agricultural machinery. Whilst manufacturing costs in this industry were heavy in the early days, they are now such as enableus to export reapers and binders. I could refer to other similar developments.
I do not consider that Parliament should be bound not to depart from the recommendations of the Tariff Board. That body serves a useful purpose in that it takes evidence on oath, expresses its opinion on the evidence, and compiles a considerable amount of information on many subjects which is valuable in assisting honorable members to form judgments on the matters in issue. But Parliament should not be obliged to adhere to the recommendations of the board. Had it done so in the past we should still be without very many secondary industries which, in existing circumstances, are of enormous value to the nation. It is true that we shall need to expend vast sums of money in our war effort and that we must largely concentrate on war activities, but we should not entirely lose sight of the need to meet the situation that will face us in the postwar period. I have no doubt whatever that the British Commonwealth of Nations will win this struggle. The war may be longer than we first anticipated, and it may he more vicious and expensive. At the same time we should profit from our experience after the last war, and take steps now to lay a foundation upon which we can deal effectively with problems arising after the present conflict has concluded. The encouragement of this industry presents an excellent opportunity to take action in that direction provided it is established in the way suggested in the amendment moved by the Leader of the Opposition. For this reason I support that amendment.
Sir HENRY GULLETT (Henty-
Vice-President of the Executive Council) [11.1]. - I rise at this juncture merely to repeat what I said earlier in the evening, that the Government agrees in principle to the amendment moved by the Leader of the Opposition (Mr. Curtin). It is not proposed, therefore, to carry the present measure any further. At a later stage the Government will give notice of a bill which will be introduced to-morrow, embodying in principle the amendment moved by the Leader of the Opposition. Honorable members who have not yet spoken to this measure will be able to speak upon the measure to be introduced to-morrow, and the honorable member for Gippsland (Mr. Paterson) will also be able to move in the direction which he foreshadowed in the course of this debate.
Debate (on motion by Mr. Spender) adjourned.
Assent to the following bills reported : -
Commonwealth Electoral Bill 1940. Northern Territory (Administration) Bill 1940.
Sugar Agreement Bill 1940.
The following bills were returned from the Senate without amendment: -
Petroleum Oil Search Bill 1940. Post and Telegraph Bates Bill 1940. Post and Telegraph Rates (Defence Forces) Bill 1.940.
The following papers were presented : -
Commonwealth Public Works Committee Act - Eighteenth General Report of the Parliamentary Standing Committee on Public Works.
Superannuation Act - Seventeenth Annual Report of the Superannuation Board, for year 1938-39.
Commonwealth Public Service Act - Appointments of R. L. Harry, L. R. Mclntyre, L. M. Murchison, J. P. Quinn, Department of External Affairs.
Lands Acquisition Act - Land acquired - For Defence purposes - Puckapunyal, Victoria.
For Meteorological purposes - Broome, Western Australia.
House adjourned at 11.5 p.m.
The following answers to questions were circulated: -
Ban on Musical, Radio and Dramatic Transcripts
Defence Department: Junior Storemen.
Gawler Military Camp.
Hides and Skins.
Export of Diamonds.
– On Friday last the honorable member for Watson (Mr. Jennings) asked, without notice, whether the Government has reconsidered its decision to impose a ban on certain American magazines, and if so, what decision has been arrived at.
In reply to the honorable member I desire to state that a number of trade journals which had been placed on the prohibited list are now permitted to be imported but only in single copies through the post on subscription. This action will result in more favorable treatment being accorded to trade publications generally. A number of other publications at present on the prohibited list are being reviewed, but it is not practicable to state at this juncture what the result of that review will be. I may add, however, that the demands on the available foreign exchange to meet the needs of war and other essential industries are such that the restriction of imports of a very large number of American publications must continue. In the view of tho Government it would be difficult to justify making non-sterling exchange available for importation of magazines or publications which are not learned, technical, scientific or religious, or which donot strongly reflect current opinion in the country of publication, whilst at the same time reducing by substantial proportions the size of ali Australian newspapers and journals.
PERTH City Council Loan.
– The answers to the honorable member’s questions are as f 0ii0w5 : -
n asked the Minister for Supply and Development, upon notice-
– The answers to the honorable member’s questions are as follows : -
s asked the Minister for the Army, upon notice - 1.Is there uniformity in each of the States in regard to payments to all dependants of members of the Australian Imperial Force?
– The answers to the honorable member’s questions are as follows : -
n asked the Treasurer, upon notice -
Mr.Spender. - The answers to the honorable member’s questions are as follows : -
asked the Minister in charge of External Territories, upon notice -
k. - The answers to the honorable member’s questions are as follows : -
d asked the Prime Minis ter, upon notice -
– The answers to the honorable member’s questions are as follows : -
External Territories: Enlistment of Men for Overseas Service.
k. - On the 24th May, the honorable member for Parkes (Sir Charles Marr) asked the following question, without notice: -
Is it a fact that men from the territories under the control of the Commonwealth who desire to enlist for service overseas have been informed that no further permission to enlist can be given; and also that men from the territories whoarein Australia at present and desire to enlist have been informed that they must resign from the Government Service before doing so?
The answer to the honorable member’s question is in the negative in both cases. The operations of the man-power organization extend to the Territory ofNew Guinea and enlistments in the territory are governed thereby. No general instructions have been issued preventing the enlistment of officers of any external territory of the Commonwealth. Officers desiring ‘ to enlist are required to apply ‘ for leave of absence in each individual case. Such leave of absence is granted on the same general basis as in the case of the Commonwealth having regard to the requirements necessary to .maintain efficiently the civil administration of thu territories.
R - On the 23rd May the honorable member for Darling (Mr. Clark) asked me, without notice, for some information regarding Canadian war loans.
The first Canadian war loan was issued on the 12th January, 1940, the amount being $200,000,000 (approximately EA.57.000,000). The loan was issued at par, the rate of interest being 3i per cent. I gather, from the honorable member’s reference to 2 per cent., that he had in mind a loan of $200,000,000 raised by Canada in October, 1939. This was a short-term issue of two years and was taken up by the Canadian chartered banks. The major portion, of the proceeds of the loan was used to refund maturing obligations of the dominion and the balance was used for general purposes of the Canadian Government. This was practically a banking transaction and is not comparable with the terms of a public loan. The Commonwealth has now on issue a war loan .of £20,000,000, the interest rate on which is -2f per cent, for five-year securities and Z per cent, for sixteen-year securities. It is very difficult to make comparisons between Canada and Australia in a matter like this, due to the different situations of the two countries, but the honorable member may be assured that the position of Australia in regard to interest rates does not suffer br comparison with the sister dominion.
Cite as: Australia, House of Representatives, Debates, 29 May 1940, viewed 22 October 2017, <http://historichansard.net/hofreps/1940/19400529_reps_15_163/>.