3rd Parliament · 3rd Session
The President took the chair at 2.30 p.m., and read prayers
Business : Extra Sittings
– I desire to ask the Vice-President of the Executive Council, without notice, whether, in view of the notices of motion which he has given to suspend the Standing Orders to expedite the passing of Bills, it is the intention of the Ministry to introduce elsewhere any legislation other than that which was indicated in the recent Ministerial statement?
– That is a question to which I cannot give a definite reply now.
– In view of the notices which the Minister has given, I should like to ask him if they indicate an in tention to close the session next week or soon afterwards?
– It is intended to close the session, if possible, next week.
– I beg to ask the Vice-President ofthe Executive Council, without notice, whether, in view of statements which have appeared in the press, it is the intention’ of the Government to ask the Senate to sit on Saturday, Monday, or Tuesday next?
– That will depend upon the progress which is made with public business. I shall not ask the Senate to sit a minute longer than is really necessary.
– I quite recognise the courtesy of the honorable gentleman, but some members of the Senate have made public engagements for days on which hitherto it has not sat, and I am personally anxious to know whether it is intended that it should sit on the days I have mentioned?
– At the present time there is no intention to ask the Senate to sit on those days, but probably, either to-morrow, or on Friday, I shall be in a position to state what the Government would like to do. If the business is dealt with as I anticipate that it will be, I do not think that there will be any necessity for the Senate to meet after Friday next until the following Tuesday, but if occasion should arise the matter will be dealt with by motion on Friday.
– As the leader of the Senate has intimated that it is the desire of the Government, if possible, to close the session next week, I begto ask the Minister representing the Minister of Trade and. Customs, without notice, the following questions of which otherwise I should have given longer notice -
Is he aware that at the last Conference of the National Fruitgrowers of Australasia, which met in Melbourne on the 27th October last, it was resolved -
Is the Minister aware of the fact that, in several of’ the States, charges are levied upon the inspection of fruit entering from other States by way of transfer?
I understand that in Queensland no charge is made, that in New South Wales until the last few months inspection has been made without charge ; that in Victoria, and South Australia charges have been made for some time, and that in Western’ Australia the charges are almost prohibitive. I desire to know whether the Minister is aware of those circumstances, and, if so, whether steps will be taken by the Government in the early future to see that the provisions of the Constitution with regard to Inter-State free-trade are observed by all the States? Perhaps I may be permitted to say, by way of explanation, that I brought this matter under the notice of the Premier of Victoria and the Premier of New South Wales after the Deakin Government retired from office.
– I remind the honorable senator that he is now entering into a discussion of the matter, which cannot be allowed.
– I only wished to point out, sir, that any action which was taken by me in regard to the heads of those Governments was taken after the Deakin Government left office, because I only received the data after that event, and I know that it was not in the possession of that Government.
– I ask my honorablefriend to give notice of the questions.
MINISTERS laid upon the table thefollowing papers : -
Lands Acquisition Act 1906. - Brunswick, Victoria : Post Office. - Notification of the acquisition of land.
Audit Acts 1901-1906. - New regulation 137 (v).. - Statutory Rules 1908, No. 120.
– I desire to ask the Vice-President of the Executive Council whether he is in a position to give the Senate any information upon the subject of the valuations of the transferred properties? I understand from the press that those valuations are now complete, but that the nature of them is being kept secret.
– The valuations of the transferred properties are not yet quite complete. As soon as theyare I shall be prepared, on behalf of the Government, to give the Senate full information in respect of them.
– I wish to ask the Minister representing the Minister of Home Affairs whether the Government are in favour of the principle of compulsory voting, and, if so, whether they will embody that principle in the Bill which it is proposed to introduce for the purpose of amending the Electoral Act?
– In reply to the honorable senator, I wish to say that that question has not yet been considered by the Government, but I hope that it will be
– The answers to the honorable senator’s questions are as follow -
Are set out in section 13 of the Papua Act, 1905, as follows : - “ 1. The Governor-General may, by Commission under the seal of the Commonwealth, appoint an Administrator, who, during any vacancy in the office of Lieutenant-Governor, or when the Lieutenant-Governor is absent from the Territory, ot unable, by reason of illness, to perform his duties, shall administer the Government of the Territory, and, while so administering, shall have and may exercise and perform all the powers and functions of the Lieutenant-Governor.”
asked the VicePresident of the Executive Council, upon notice -
– The answers to the honorable senator’s questions are as follow -
asked the Minister of Defence, upon notice -
– The answers to the honorable senator’s questions are as follow -
– How long has a ‘ certain portion of this building been utilized bv the Post Office?
– The lease is for two years from 19th March, 1908. Until that date the portion of the building referred to had been utilized as a store for the Post Office.
– I understand that the reply of the Minister is that this building has been leased for a period of two years by. the State Government Printer for th-; purpose of storing Commonwealth printing material, that the whole of it at one time was not fully occupied, and that as a result the Post Office took possession of certain flats in it?
– The honorable senator will find that the information for which he asked is contained in the reply which I have already given to his question.
asked the VicePresident of the Executive Council, upon notice -
Will the Government lay on the table of the Senate the reply of the late Minister for External Affairs “to the despatch of the Colonial Office, dated 3rd September, relating to Navigation Laws ?
– The answer to the honorable senator’s question is as follows : -
No reply has yet been sent. The matter has received further consideration since the change of Government, and a reply is now being drafted.
Debate resumed from 27 th November (vide page 2378), on motion by Senator Pearce -
That this Bill be now read a second time.
– I have at all times been prepared to support any proposal to grant a bounty to assist in the discovery or testing of new industries. But the iron industry has been both discovered and tested, and I take it that in the future it will rank amongst the greatest industries of Australia. But because an industry promises well I am not prepared to vote money to assist it to achieve greatness before its time. If the matter rested entirely here, there would be nothing for me to do but to vote against the second reading of this Bill. There is, however, another view of this measure which it is necessary to take, namely, the view from the stand-point of our national defence. Australia is situated at a very great distance from the heart of the Empire. It therefore behoves us to be very thoughtful about this matter of defence, and to take care that we are not left without this all-important material, iron, which is so requisite for the defence of any country. It is only because of the necessity of iron for defence purposes that I can vote for the second reading of the Bill. I think that honorable senators will readily see that upon the ground’ that I take up I shall be compelled to vote against the second division in the schedule. It will be observed that one part of the schedule deals with the bounty for the production of iron, and the other part makes provision for a bounty on galvanized iron, wire netting, and tubing. I cannot possibly support the latter proposition, because, in my opinion, it is intended to lead up to greater doses of protection with regard to those industries.
– They are involved in the matter of defence.
– Wire netting isnot involved in defence, nor is tubing. I should like to refer somewhat to the report, to which reference was made last week, of the accountant appointed to examine into the profitableness or otherwise of the industry at Lithgow in connexion with the labour dispute which occurred a few weeks ago. In the first place I may say that Messrs. Hoskins were rather misrepresented on one point. It was stated last week that pig iron was sold to the Government of New South Wales at £4 10s. per ton,, but to other people at £3 5s. The argument was used that this fact was anything but creditable to the firm. But if the honorable senator who made the statement had gone a little further, he would have seen that the statement of the accountant gave several prices, and he would also have observed that as the average price of the whole quantity sold was only £3 7s. id. per ton, the Government obviously got very little. I think I am correct in saying that the quantity which the Government did getwas what is known as number one iron, which is of a superior quality ; and that, as a matter of fact, there was no improper discrimination between the Government and private purchasers. I have looked somewhat carefully into the accountant’s report,, and am led to believe strongly that the industry, though not now yielding a profit, can, with expansion, be made to occupy a much better position, and the pig iron can* be produced at some shillings less cost per ton than is now the case. The report is based on a working time of twenty - seven weeks, in connexion with .1 furnace which -is capable of an output of about 1,000 tons per week. The average output for the period was 503, tons. When we consider the large amount of money in interest, and the skilled labour which had to be distributed over the smaller quantity of pig iron, it is obvious that an increased production would lead to a decreased cost. As a matter of fact, I find that during several months, (when the average production of the fur- naces was greater than usual, the labour charge was only 9s.11d. per ton, as against an average of 12s.1d. per ton for the whole period. The possibility of a material saving is shown there. I also notice that the accounts are debited with no less than 8s. 9d. per ton for depreciation, and interest charges at the rate of 5 per cent. The depreciation would be very little greater if the plant were worked to its full extent, whilst the interest would be absolutely the same. The interest and depreciation charges are therefore very heavy. I find that the interest and depreciation on a full quantity production would really represent a charge of something like 4s. 7d. per ton, as against 8s. 9d. at present. These two items together really mean that a large make of something up to the full quantity which the works can produce would show a saving of something like 6s. per ton>. Further, I notice that a most extravagant price has been paid for coke. Perhaps I should not say “extravagant,” because the firm was not able to make a satisfactorytrade arrangement at the time. But their coke works are now complete, and I believe that they will be able to use coke which has cost considerably less money than that which was used in the period under review. There is therefore a prospect of a further reduction,. The accountant’s report also shows that the amount for depreciation which he has charged is not in his opinion as large as it ought to be. That is very likely so. Honorable senators probably all know that works of this class depreciate in value very rapidly, and it may be that the accountant is right in his statement that the accounts of the business ought to be debited with a more material depreciation charge than is now made. But I am pointing out these facts as an indication that, taking them altogether, a material reduction may be made in the cost of producing pig iron, and that, therefore we are not called upon to pay an extravagant bounty. I do not know whether honorable senators would be inclined to reduce the amount from . £150, 000 to £100,000, but it appears to me that £100,000, spread over a period of five years, being £20,000 a year, would give Messrs. Hos kins a very desirable help. Twenty thousand per annum should be enough to enable the industry to get thoroughly on its feet in New South Wales, or in any other part of Australia
– In what other part of Australia would the bounty be of the slightest effect ?
– The schedule covers a bounty on pig iron, puddled bar iron, and steef. The bounty might be. earned by the manufacturer of pig iron in one part of Australia, and that pig iron might then be sent to another part of the same State, or to another State of the Commonweath, and the bounty earned there, upon its manufacture into bar iron.
– That is very unlikely.
– It is not unlikely, because even at the present time pig iron is sent from Lithgow to the other States. I believe that I am correct in stating that the bounty might be earned on the manufacture of the pig iron in one part of the Commonwealth and on the manufacture of bar iron in another. It is therefore not so certain as some persons would have us believe that the iron upon which the proposed bounty will be paid will be produced in a particular State, or in a particular district of that State.The total quantity of manufactured iron imported into the Commonwealth last year was 400,000 tons, apart from machinery, and this may be said to represent 500. 000 tons of pig iron.
– How much of it was pig iron?
– About 50,000 tons. One furnace at present erected at Lithgow if worked continuously could produce 50,000 tons of pig iron a year, so that we must have ten furnaces with a capacity of 1,000 tons per week, at work to supply enough pig iron to make the bar and other iron used throughout Australia. There is, therefore, good reason to suppose that in the course of time, and perhaps rapidly, furnaces for the manufacture of iron would be established in more than one place in the Commonwealth.
– Do the proprietors of the Lithgow works propose to manufacture steel rails?
– I think that there can be no doubt that they do. I understand that for some time they have had an order in hand from the New South Wales Government, and are only awaiting a reasonable opportunity to put in the machinery for the purpose of manufacturing steel rails. As I have already stated, _ I intend to oppose the inclusion in this Bill of the manufactured articles referred to in class 2 of the schedule, and I desire to say briefly that I shall do my best to oppose the amendments foreshadowed by the Minister, to give the Commonwealth power to nationalize the industry. There is only one other matter to which I shall now refer. I note, with much regret, that Mr. Sandford, who originated the works at Lithgow, has had to pay no less than ^4,000 in Customs duties on his machinery. I regard that as a very regretable circumstance, and I should be very pleased if the Government of the State of New South Wales, which has been the ultimate recipient of the money, would undertake to refund it to Mr. Sandford, who has had to give up the works. I shall not further extend my remarks upon the second reading, but there are certain items to which I shall refer when the Bill gets into Committee.
Senator Sir JOSIAH SYMON (South Australia) [3.5]. - We must all admit that this is a very important Bill. Short as the interval must be between the present time and the close of the session, the proposal involved is one to which serious and anxious attention might well be given. I have endeavoured to give it very anxious consideration, and to find reasons upon which I could justify support of this measure. It is only to-day, and through the kindness of Senator Pulsford, that I have heard of the reason that it is entitled to support because it is in some sort a branch of the Defence policy of this country
– The honorable senator is about the only man who did not think of that before.
– Why should I be met in this way, when I am acknowledging with gratitude the light conveyed to my uninstructed mind on this subject, by my honorable friend’s declaration that the measure is a part of the Defence policy of the Commonwealth? I had not been able, to recognise that before, and all I can say now is that if that be so, the proposals might more properly be brought under our consideration when the Defence scheme is under debate in the Senate. I decline toview this question from the stand-point of” defence. I know that cannon used to Demade of iron, and I believe are now made of steel, and that we require thesemetals for the manufacture of small armsand so on. But I do not regard it as a sensible reason for supporting the payment of these bounties that the Defence policy of the Commonwealth must tumble to pieces unless this measure hepassed. I always attach great weight 10 every reason given by Senator Pulsford for any proposal, but I am afraid that I cannot attach much weight to the reason thehonorable senator has given for supporting this Bill. I agree with him that no principle of the free-trade faith requires its adherents to regard as heresy the giving: of a bounty for the encouragement and de”velopment of the natural products of the country of which we are citizens. I never considered myself pledged to oppose the giving of bounties in that way by any freetrade principle with which I am acquaintedI have always drawn a great distinction between protective duties and bounties for the encouragement and development of some industry which will be of great value, when without such encouragement the industry might never be established at all. The distinction is that protective duties come out of the pockets only of the consumers of the protected article, whilst » bounty is a charge upon the funds of the whole country. Free-trader though I am.in every way, I have never regarded proposals for bounties otherwise than upontheir merits and the extent of the encouragement they would afford to some beneficial industry. That being so, I am not influenced in any way in this matter by the fact that I am, and’ always have been, a strenuous freetrader. But looking at the proposal as embodied in this Bill, I do not regard it as being altogether unexceptionable. From my point of view, the payment of a bounty should not be concurrent with the imposition of a protective duty. The Bill contains a clause which has theeffect of incorporating a provision in the Tariff that upon the issue of a proclamation after the payment of the bounty hasceased certain duties shall come into operation. As I say, these duties have not thevice of being concurrent, but I think that the whole scheme has this vice, that we areasked to vote a large sum, the payment of which is to be spread over a certain time, for the establishment of an industry, and it is part of that scheme that the industry when established by this generous contribution from the public funds is to be maintained out of the pockets of the consumers. That of itself is, to my mind, a blemish upon the proposal. The two things are inextricably united ; we have the establishment of the industry out of the pockets of the general community, and its maintenance out of the pockets of the consumers.
– The duties need not be levied.
– What will the people to whom my honorable friend proposes to give the bounty say hereafter when its payment ceases if we do not call into operation those duties ? They will say, “ We would not have gone into the industry.” Of course, it will be for the Parliament to decide that, but how could it say anything but that those duties shall come into operation? It will be a question of keeping good faith. There is no escaping from that. I am not saying whether it will influence the mind of my honorable friend or not. But I want him to understand what the position will be. Every one knows that if there were a balance unexpended at the end of a year it would be added to the vote of£30,000 in the succeeding year, and handed over to the industry. Those things have to be looked at from the point of view of, not what our power is of getting something under an inducement, but what the people whom we have encouraged believe that they are going to get. This is not to my mind, a bounty to an industry, but a bounty to a particular firm. Treated from any point of view it is a subsidy to an existing business concern which may or may not have fallen upon evil days. That is admitted all round.
– Is that an objection ?
– It is a fatal objection, both politically and morally. I stand here to say thatweas a Commonwealth ought not to subsidizea particular firm.
– If we do,we should take up every lame duck in the country.
-My honorable friend puts it strongly.There are a thousand reasons why an iron in dustry may be regarded as a most important one in this or in any country.
– The honorable senator wants to kill this industry.
– I propose to read a passage from an article which was handed to me in an envelope just before the Senate met. The reason which Senator Pulsford gave very clearly as influencing his mind is not one for which we are asked to grant this bounty. But it is a very good reason for establishing the importance of the industry. It is not a reason for granting the bountythat iron may be useful in defence. But it is a reason for showing that that is one great purpose, and if you will, a national purpose, to which the product may be devoted: The article I referred to just now is taken from the Sydney Morning Herald, and, of course, there is no denying that the bounty is simply a douceur to the Eskbank works -
The recent history ofthe Eskbank Works is . too well known to need recapitulation, but one or two facts are worth remembering.
The whole article is a vindication of this subsidy to a particular business concern. These are, I suppose, the men who are to be killed-
Here we have men stepping into the breach at a time when large hearts and long purses were needed to prevent the industry collapsing.
Having done that, why is this Parliament called upon to make them a present of £30,000 a year?
– For the same reason as induced the Parliament to grant bounties to other industries.
– I granted no bounties, and if my honorable friend is reflecting upon the action of Parliament in granting them, let him do so. But because it granted bounties in some cases to industries which were given a fair field and no favour all over Australia-
– So does this.
– It does not do so on anything like anequal footing.
– Why ?
– That is as obvious as can be. It is admitted that in no other part of Australia where there are iron deposits of vast magnitude - I do not say whether they are greater or lesser than those at Lithgow - have they an equipment; they are handicapped.
– This is to encourage them to get the equipment.
– How much of this vote of .£150,000 will go into the pockets of the Blythe River people? Not one shilling of it.
– They, will have the same chance as the others. What about the sugar company ?
– Suppose that a big factory for the production of an article has been in existence for ten years, but has not been doing well for the last two or three years, that we give it a bounty of ,£20,000 or .£30,000, that it is the only one of its kind, and that there cannot be competition without enormous outlay.
– Hear, hear. This Bill will not prevent competition if it is passed.
– I do not know.
– In other countries competition ensued.
– In the other cases to which my honorable friend alluded, we encouraged industries, giving them a fair field, and the same starting point - so to speak, an equal opportunity all over Australia. But, admittedly, this bounty is to be a gift to one particular business concern.
– Tasmania is the only State which so far has got anything out of the .Bounties Act.
– That is quite true. An existing industry in that State has received a bounty under exactly similar circuit! st 0 noes.
– We have not the money.
– If those blemishes do not rest upon the Bill I should invite my honorable friends opposite to abandon their traditional policy, and say that they will borrow money for this purpose. But that is not the situation. Sweeping away all the formalities about the Bill, it is admitted on all hand, that the concern to receive the bounty will be the Lithgow ironworks. I propose to read a passage from, a pamphlet circulated on behalf of those interested to show that it is really a Bill for that concern.
– Everybody knows that it is. It is only make believe for any one to say otherwise.
– The object of the Bill is to sustain an industry.
– My honorable friend wants to make a present to “men with large hearts and long purses,” who can afford to bear a little loss in the initial stages of the industry.
– 1 think that they are to be highly commended.
– Of course, they are. I commend them, too. I think that they are splendid and patriotic gentlemen. But when they come and ask us for .£150,000 to reward their patriotism, let us pause and see that we do what is fair. Until I read a paragraph headed “ Possible claims under the Bonus Bill,” I believed that there would be an. equal opportunity for the application of the bounty, but it opened my eyes as toWhat the Bill really is. It is as follows -
With the present plant at Lithgow, and under the provisions of the Bonus Bill, it is estimated1 that in the first year the payments made by th? Commonwealth would not exceed ^30,000- This estimate is made up as follows : - Pig-iron, at 12s. per ton, present
The above figures are based on the assumption that the plant would work uninterruptedly at its full capacity, but in practice ‘this is never realized, so that the estimate of ^30,000 for the first year is a reasonable one. The claims for bonus in succeeding years would depend on the capital outlay on new plant and the development of the trade.
We have there an authoritative statement that the bounty is to be given to this business firm, and that the amount has been calculated according to its individual needs. The immediate effect of it will be, especially in the absence of equal opportunity in regions where there are valuable deposits of iron ore, that it will createby the payment of public funds a monopoly, and the importance of that will beseen when I come to refer to a provision with which I entirely disagree. It does seem to me an illustration of the irony of politics that my honorable friend, the Minister of Defence, should have introduced’ this Bill, seeing that not very long ago he submitted a measure which was designed to-‘ secure an amendment of the Constitution.- so as to permit of the nationalization of monopolies. I therefore sympathize with him most heartily.
– Because the honorable senator has been there himself.
– If there is one thing to which free-traders entertain a strong objection, it is the creation of monopolies. My honorable friend’s opposite enjoy no monopoly of that particular principle -
– But the Ministry ot which the honorable senator was a member kept the sugar industry going when they were in power.
– Did we indeed ?
– 1 am obliged to my honorable friend for his historical memory. But a good many things have happened since the time of which he speaks. He declares that the Ministry of which I was a member kept the sugar industry going. May I point out to him that we could not help ourselves? But I wish to prevent one particular firm from making “sugar “ out of the iron industry. In connexion with the sugar industry, the matter about which I most strenuously complained was that the planters on the “Richmond river, and in the northern” portions of New South Wales, should have pocketed a large portion of the bounty^ notwithstanding that they were not entitled to a single farthing of it. That, however, is by the way. This Bill proposes that a large sum of money shall be paid to one firm to assist it to establish a monopoly. In the face of the feeling which exists in this Chamber against everything in the nature of monopolies, are we going to do that?
– How does the honorable senator propose that the industry shall be assisted ?
– When I am called upon to deal with that aspect of the subject, I think I shall be able to find a method which will not be open to the objections which I have urged, and the adoption of- which will not result in simply pouring into the pockets of one firm a large sum from the public funds. It is not necessary for us to talk about the amount involved in the payment of the proposed bounty. I think that it is far too much, and I was glad to hear Senator Pulsford suggest that in his view it might well be reduced. In com parison with the Canadian payments, which were referred to by the Minister of Defence in moving the second reading of the Bill, the amount involved is far too much. In Canada, the amount of the bounty was graduated, and that country, we must recollect, does not enjoy the advantage of the much longer sea journey and the much higher freight that is possessed by Australia. In addition, Canada ranges with its greatest competitor in ‘the iron industry - the greatest producer of iron and steel in the world - the United States. Upon these grounds, I cannot see mv way to support the second reading of this Bill. But if its second reading be carried, there are two or three provisions which I shall feel it my duty to oppose. For instance, the proviso to clause 5 reads -
Provided that, where the maximum amount has not’ been so paid in any year, the unpaid balance, or any part thereof, may be paid in any subsequent year, in addition to the maximum amount for that year.
I venture to think that that proviso is a mistake. If provision is to be made for the distribution of a specific sum each year, it should be adhered to. But it is obvious that the proviso in question will, vest in the Government of the day a discretion which may be availed of to make the payment in any one year very much larger than the amount which is specified in the schedule. That is a mistake. We ought either to say that the whole amount shall be paid over in any one year after the prescribed conditions have been fulfilled, or, if Ave think the amount should be payable by instalments, that those instalments shall be unalterable. Then I take entire exception to the two provisions relating, to the taking, over of this industry by a State or by the Commonwealth. Clause 9 provides that a State shall have power to take over the industry after it has been established. That provision seems to me a very crude and unwise one, and it contains, I think, the elements of injustice. Apparently we are going to grant this bounty to a particular firm to enable it to balance its accounts. That firm has declared that the cost of production, which is now about 4s. 6d. per ton, will probably be reduced in the near future to about 3s. per ton, so that it is manifest that its losses are within measurable distance of extinction. But, if that firm should sustain losses, the amount of money which will be paid to its credit under this Bill, will help it to balance “its accounts, and, perhaps, to declare a dividend. But if, after the lapse of five years, the industry has been established to such an extent as to enable the firm in question to see a substantial margin of profit - in other words, if the business has thriven so that it represents a valuable goodwill - either one of the States or the Commonwealth is to be empowered to take it over at the mere cost of the lands, buildings, premises, plant, and equipment. The effect of this provision, if put into operation, would be simply to pay this firm a sum of money to bring to the point of a profit a business which had been carried on at a loss. The firm would then be dismissed without any compensation, and the industry would be taken over.
– Its members would have any profits which might be made in the meantime.
– That is true enough. The mischief of this proposal is made more apparent when we consider that it is only one particular business that we are subsidizing. It is “ keeping the word of promise to the ear, and breaking it to the hope.” The object of granting this bounty to the iron industry is to enable that industry to be made, a profitable one. But, under this Bill, the moment that result has been accomplished, the State or the Commonwealth may take Over the industry. Thus we should be not merely withholding from the members of the firm to which I have alluded the fruits of their labour, but wasting five years of their valuable business lives.
– Upon their own showing, that can hardly be the case, seeing that if the bounty be not granted to them, their business will go under.
– Tt is not difficult to understand that that argument mav he used as a lever for the purpose of securing the payment of the bounty. Have not similar statements been repeatedly marie during our Tariff discussions? The “ruined” industries have been paraded before us time and again, but immediately protective duties have been carried those industries ha.ve exhibited a vital itv of which their owners did not suspect them.
– Whenever the Government takes over anything from a private individual, it usually pays remarkably well for it.
– But clause 9 limits what the persons engaged in this industry shall be paid. Are we going to pass this Bill and allow a State or the Commonwealth to take over the iron industry at bare cost, when, as a matter of fact, it ought to be taken over as a going concern ?
– But if we pass this Bill, the State will be assisting to create a goodwill for the industry.
– But why employ men for five years without remuneration in order to assist the State to create that goodwill ? Then the projected purchase by the State is to be completed within twelve months after the date of the expiry of the bounty. So that the intention . really is to take over the industry which these men, with the assistance of a public subsidy, have established. The other proposal which I understand is to be submitted, is that the Commonwealth shall possess a similar power to take over the industry. To that proposal I can see additional objections. The first of these is that a proposal of that sort ought not to be brought forward -in this incidental way- lt ought rather to be part of some complete national policy. In the second place, I hold the view which I believe the late Right Honorable C. C. Kingston held, and which Mr. Deakin also holds, that the Constitution does not empower the Commonwealth to acquire and carry on industries of this sort.
– How does the honorable senator explain the fact that the late Mr. Kingston recommended that this power should be embodied in the Bill ?
– I accept my honorable friend’s statement that the late Mr. Kingston was responsible for the insertion of this power in the Bill. But I would point out to him that it is one thing for a Minister to insert a certain provision in a Bill, and quite another thing for him to hold the view as a constitutional lawyer that it is a legal provision.
– The late Mr. Kingston recommended the inclusion of this power, not as a Minister, but as a private member of this Parliament. I shall quote the record upon which my statement is based, presently.
– Even if the late Mr. Kingston, did what the Minister of Defence suggests, I see no more reason why that act should be regarded as indicating his final opinion upon the legality or constitutionality of the proposal than did his desire to include in the Commonwealth Conciliation and Arbitration Act the provision relating to seamen which was the immediate cause of his parting company with the Barton Administration. We may for instance, insert provisions in Bills without being certain as to their constitutionality.
– Any two lawyers will doubt the dictum of a third.
– It seems to me that any two members of this Senate will doubt a third. I do not know that laymen are exempt from that human weakness. Possibly some day or other my honorable friends opposite may introduce a Bill to enable the Commonwealth to take over monopolies. But it is just as necessary to- have the constitutional power to take over a business of this kind, as it is to nave power to take over a monopoly. A monopoly is simply a business carried on to the exclusion of competitors. It is nothing more nor less than that. My honorable friends would be wise in not moving the particular amendment which I have indicated, and certainly not in moving it incidentally on a Bill of this description, with the authority of the Government behind it.
– If the Commonwealth had its own .Territory, would it not have power to carry on any business it pleased there ?
– We are not dealing with that point. Senator Givens adopted a view with which I largely agreed in relation to the Sea Carriage of Goods Act. I think that we ought not to deal with such a large question in this incidental way. Let it form part of a general policy. Then we can deal with it effectively. I wish to say a word as to how far it would be within the constitutional power of the Commonwealth to do those things which are incidental to carrying out other powers which are expressly set out. I do not regard the establishment of an iron works as incidental to any power possessed by the Commonwealth. It may be that when we set up an arms factory, we mav have to keep the works going, and may have to produce the material to be used in the fac-‘ tory. But no one can say that setting up a great commercial concern for the purpose of taking out of the bowels of the earth iron ore, smelting it, bringing it into use foilhe purposes of manufactures, and selling it commercially to all and sundry consumers, is doing something incidental to the powers of the Commonwealth. Further than that, if we are to regard this or any other particular pursuit as incidental to the exercise of our constitutional power, then we ought first to deal with the power vested in the Commonwealth, and to consider the extent to Which it goes, before we deal with matters incidental to it. Otherwise, we shall be dealing with the incident first,, and the thing to which it is incidental afterwards. That would be putting the cart before the horse, which is certainly not the way to bring about practical legislation. Therefore, I shall be found joining in opposing those two provisions. I also think that it is a mistake to introduce in clause n the provision about settling rates of wages. In my view, that is just as unconstitutional in principle as the_ legislation declared by the High Court to be unconstitutional in respect to harvesters. This merely puts the same principle in a different shape, and we should create trouble by inserting it here. If it is in contemplation - rand I think that it might be legitimately part of the policy of my honorable friends opposite next year, although I dissent from it - to formulate the policy of giving the Commonwealth power to legislate in regard to wages, a measure for that purpose can be introduced. We could then determine whether we are to ask for power to give up control over wages in all industries, subsidized or not subsidized, protected by protective duties, or otherwise. But surely we ought not to have in this Bill a provision making it a condition of the payment of a bounty after the manufacurers have earned it, that they are to produce declarations, and permit investigations as to whether or not they have paid fair rates of wages.
– According to the Bill they would not have earned the bounty unless they had paid such wages.
– That -is quite ‘true, but may I suggest that it would be very much better, if we are to introduce that principle at all, to say to the manufacturers before they begin what wages are to be paid. Then they will go into the enterprise, knowing what they have to pay. But under this measure they are liable, after they have earned the bounty, to have the whole thing thrown on their hands. It is an invitation to them tocome and ruin themselves. It is like the inscription written over the portals of the infernal regions, “All hope abandon, ye who enter here.” As a free-trader, having regard to the high protective duties that have been imposed, I am with honorable senators opposite in seeing that the workmen get their fair share of the profit earned. But if provision to that effect is to be made in this Bill, it would be wiser, more prudent, and fairer, that the wages should be fixed by some award or agreement, before the people at Lithgow enter into the undertaking than to bring these conditions upon them after they have earned the bounty. If the second reading is agreed to, and the Bill gets into Committee, I shall give my most vigorous opposition to the provisions to which I have referred, and I hope that the measure will only be placed on the statutebook with those clauses eliminated.
– I have listened thoughtfully to Senator Symon’s remarks, and must confess that he has completely puzzled and surprised me. He commenced by saying that the iron industry was one that ought to be established in Australia, that it is a most important industry, and an absolute necessity for the country. But then he stated that the industry was a monopoly.
– Pardon me, I did not say that.
– The honorable sena tor said over and over again that by giving this money to certain individuals we should be creating a monopoly.
– That is so.
– Andthat statement is absolutely correct.
– I repudiate the statement. Several honorable senators have been asked to take shares in an iron industry, to be established in competition with the works at Lithgow. Are we to understand that there is no possibility of any one in the future manufacturing iron in Australia, except those who have had the courage to take over a dying industry at Lithgow? There is scarcely an industry in Australia that does not use iron and steel in some form, and the demand for the product is likely to be large. But I give my support to the Bill on higher grounds. I support the bounty for the reason given by Senator Pulsford, that the iron industry is one that every thoughtful man must recognise as being a most important factor in the development and defence of Australia. How can we become either a military or a naval power within the limits of our possibilities, unless we produce our own iron? We have to look at the present condition of affairs, and at the fact that to-day certain factors are operating in Europe in a way which military experts have led us to expect for years, and which may force certain European countries to face the awful results of war.
– What has all this to do with the question?It is only so much flam and flapdoodle.
– It has everything to do with it. A great European war might break out at any moment, and it is our duty in Australia, in view of the possible results, to put our house in order. We must make some provision for the supply of the naval and military weapons we shall require for our defence. How are we to establish dockyards for naval repairs for ships that may come here from the Old Country, or for the construction and repair of torpedo boats and small ships of war for ourselves, if we do not do something to provide the raw material required for such repairs and construction.
– Does the honorable senator believe that we can defend Australia with a few torpedo boats?
– No, and I have never suggested that we could. I have always said that we must look to the Old Country to assist in defending us ; but I have advocated at the same time that sooner or later we must begin to provide for our own ‘defence.
– Are they going to make steel armour at Lithgow?
– Possibly. Why should they not? They may not be able to do so immediately, but in this matter honorable senators are faced with the choice of one of two alternatives. We must have the iron industry established here upon a sound basis, and conducted by men of experience who have proved their capacity to make it a success.
– What experience have the Messrs. Hoskins had in this business?
– They have had many years’ experience, and have been most successful in developing the iron industry. I asked Senator Symon how he proposed that the industry should be established. The honorable senator evaded the question, although he knows that it must be established. Honorable senators who vote against the second reading of this Bill must accept the responsibility of playing into the hands of those who will not be able to carry on the iron industry with the success which we all should desire. Its establishment is essentially necessary to Australia, and the question for us to consider is how we can best establish it successfully. It is all verywell to sneer at people who have proved by their success in life their ability to carry on this industry.
– Who has sneered at such persons?
– Perhaps I should withdraw the word “sneer, “-but I think that Senator Symon did not refer to Messrs. Hoskins in a generous way.
– Nothing of the kind. I gave them every credit for their enterprise.
– I am very pleased to have that statement from the honorable senator, because his remarks certainly appeared to me to imply that in his opinion they were not altogether the men to be intrusted with the large amount of money proposed to be granted in bounties under this Bill.
– No, I think they are fit to be intrusted with any sum of money.
– I have had the pleasure of knowing the Messrs. Hoskins for many years, and I know of no men in Australia to whom I would sooner intrust the carrying out of a business of such dimensions in the hope that it would be brought to a successful issue. If the industry is to be established, it must be in the hands of persons who have shown their ability to make it a success. I think it was Senator Henderson who expressed the opinion that Lithgow is not a suitable site for the establishment of ironworks. I ran only say in reply that such works have been established there for thirty years, and, so far as I know, Lithgow, in the opinion. of experts, is in the most suitable position for the purpose. Mr. Sandford and others put a great deal of money into the ironworks at Lithgow, in the belief that in view of the surroundings Lithgow is altogether a suitable place for the development of the industry. I know of no other place in Australia that has similar advantages for the carrying on of the industry at the least possible expense, and with greater possibilities of success.
– Recognising that we are approaching the close of the session, which has been anything but prolific in legislation, and that there is still a vast amount of legislative work to perform, I shall not speak at great length upon the second reading of this Bill. I believe it would be wrong for me to give a silent vote on the question. I intend to vote against the second reading, and I wish briefly to give my reasons for taking that course. I have held all along that for the establishment and development of this, as of any other industry in Australia, the better plan to adopt would be to impose the highest possible protective duties for the purpose. I am a protectionist of a very pronounced type, and I should prefer to vote for protective duties upon iron, I care not how high, to giving a bounty for its production, especially when, at the same time, we are faced with the prospect of having to impose duties also in support of the industry. By proclamation, whenever the industry has been proved to have reached a certain stage of development, a duty of12½ per cent. is to be imposed upon certain kinds of manufactured iron. I think that a more effective means of establishing the industry would be to increase the proposed duties.
– To impose duties on mining machinery required for Western Australia.
– I do not wish to introduce any question of State jealousy. If the proposal now before the Senatewere one to subsidize the iron industry in Western Australia, as it is certainly a proposal to subsidize the industry in New South Wales, I should be just as strongly against it.
– Senator Lynch has a motion on the paper for a bounty which is more likely to help Western Australia than any other State.
– I am speaking now not upon the discovery of phosphatic deposits, but upon a proposal for the establishment of the iron industry, and I intend to confine my remarks to that. It may be said that in voting against the second reading of this Bill I do not realize the necessity of the iron industry to Australia.
– Hear, hear; the honorable senator cannot do so.
– I thought that would be said. There is no one in Australia who is more desirous than I am of promoting the development ‘of the natural resources of Australia in this direction. No one could be more convinced of the necessity of the establishment of a first class iron industry in the Commonwealth. I have for years been connected with ironworks, and have a fair knowledge of the manufacture of iron in all its branches, and I say that if we are to develop the industry in Australia, the best course for us to pursue is to impose effective protective duties. I am asked to support a Bill to give ,£150,000 of the people’s money to create a monopoly, which I may subsequently be asked to assist in taking over. 1 decline to put myself into that position. I am a member of a party that is against monopolies, and why, therefore, should I give a vote to-day to assist in the creation of a monopoly with the hope that a year or two hence we may be able to take it over? lt has been said that there is. some doubt as to the constitutionality of the establishment of ironworks by the Commonwealth. I do not pose as a constitutional lawyer, but I have heard of a similar objection urged against other action taken by the Commonwealth Parliament, and the tribunal whose duty it is to decide constitutional questions has subsequently supported this Parliament in the action taken. From what I have reid on the subject, I believe it is quite competent for the Commonwealth to establish ironworks at any time we choose to do so. The question of defence has been dragged into this debate. But should a war take place, and a hostile force invade Australia, it will be far better for us to have command of our own ironworks than to be dependent for our supplies of iron upon any private firm. I go further, and say that in such an emergency it will be better for us to have command of our own ironworks than to be dependent for supplies of iron upon works controlled by any of the State Governments. On the question; of the displacement of labour, I do not think that a refusal to grant the ,£150,000- provided for in this Bill would make very much difference from the labour standpoint.
– The honorable senator does not care whether the place is shut upor not.
– We are oftenthreatened that the place will be shut up,, and if it is I cannot help it. Our honorable friends opposite during the discussionof the Tariff a few months ago, were frequently faced with the same question. But they held certain fiscal views, and did not at that time appear to care very much whether factories were shut up or not. Now we find them on the other side of the fiscal fence.. It might be asked : Where are the principles which my honorable friend enunciated a few months ago?
– “ Echo answers,. Where”? And where are the honorable senator’s?
– Whenever I have had an opportunity to speak on this subject, I said that I was opposed to abounty, but in favour of the highest protective duty which it was possible to impose. I still hold that opinion.
– Did the honorable senator vote against all the bounties which thelate Government proposed ?
– I have not said? that I voted against all bounties proposed.
– The honorable senator said that he was against every bounty.
– I voted’ for bounties, but an entirely different set of conditions surrounded those votes. Today I am confining my remarks to one industry, with a practical knowledge of all the conditions appertaining to it. It does’ not follow, because a few months ago I expressed an opinion against the granting of a bounty, and certain events have since occurred, that I should change my mind. I am prepared to support the imposition of the highest possible protective duty, but under no consideration shall I vote for a bounty for the iron industry.
– Like Senator Needham, I do not care to give a silent vote on this question, although I propose to vote in an opposite direction. I believe that the proper way of dealing with the iron industry is to nationalize it, and every honorable senator on this side, I believe, holds that view. Because it plays so important a part in not only the defence of Australia, but also the construction and maintenance of railways for the States - and I hope that the day is not far distant when the Commonwealth will control railways, as well as defence - 1 am an ardent advocate of the nationalization of the iron industry. But I recognise that at the present time it is not practicable to take that step. I believe, with other honorable senators, that we have the power to establish an iron industry for the purpose of constructing our own ships. I also recognise that an industry which would enable us to manufacture iron for our own purposes could not be established at the present time upon the basis which is necessary to insure its profitable development. Realizing, then, that it is not practicable now to nationalize the industry, and recognising the importance, of establishing it at the earliest possible moment, I propose to vote for the second reading of the Bill. Senator Needham has stated his preference for a protective duty. If, when the Tariff was under consideration, iron could have been subjected to a duty sufficiently high to foster the iron industry, and in connexion with which consideration could have been given to the dependent industries, I would have said, “ Let us have a duty which will be quite sufficient to achieve our purpose.” But many industries depend upon the great primary industry which produces pig iron.
– What assistance did we get from Senator Gray when we tried that ?
– The assistance which Senator Gray gave in the Tariff discussions has nothing to do with this measure. I am very pleased, indeed, that he is broadminded and patriotic enough to support the establishment of the iron industry. But, at the present time, we could not impose a duty on iron without affecting very injuriously many industries, whose raw material is the manufactured product of the iron industry.
– The honorable senator does not think that it will affect the community by taxing them to the extent of ^£1:50, 000 ?
– Whether the money is paid bv way of bounty or by way of duty, it will have to be paid by somebody. If I could satisfy myself that a duty would achieve the same results as a bounty,
I should be delighted to vote for the former in preference to the latter. But Senator Needham, if he will reflect, must recognise that it is impossible to levy a duty now without affecting very seriously many other industries, and practically dislocating their operations. Senator Pearce has given notice of his intention to submit certain amendments. These are in the direction in which I want to go. They are designed to give to the Commonwealth the same power to nationalize the industry as the Bill gives to a State or -States. I think it must be clear to any one that if it is going to be nationalized, it is very desirable that it should be nationalized by the Commonwealth rather than that any one State should have a monopoly of it, because, if the latter event occurred, that State might benefit itself at the expense of the others. A monopoly of the industry by a State would not be quite so bad as a monopoly bv a private company, but certainly it would not be so conducive to the interests of Australia, as a* whole, as would a monopoly by the Commonwealth. I propose to vote for the second reading of the Bill, and to support the amendments given notice of by the Minister of Defence. If they are not carried, I shall vote against the third reading, and, if Senator Gray and others on his side should have voted against them, throw upon them the onus of assisting to destroy a great industry for which they professed to have a very great regard.
Senator Sir ROBERT BEST (Victoria) [4.19]. - I do not know that I should have risen but for certain, remarks which fell from Senator Symon in reference to the constitutional aspect of various matters proposed to be dealt with by the Bill. With some of the views he expressed I agree, but with others I cannot see my way to agree. As regards the general merits of the measure, the object of the protectionist party here and elsewhere has been the establishment of industries. According to some persons, it is desirable that industries should be established by means of an effective protection, but according to others, they might better be established by the gift of a bounty. The object which was to be aimed at, and if possible achieved, was the establishment of industries. When we found that by reason of Federation, there was a likelihood of one of Queensland’s great industries being seriously injured, we thought it desirable that it should be sustained in a generous manner by the grant of a bounty. In the present instance, it was felt that iron entered so much as a raw material into the conduct of various important industries that it was desirable that a bounty should be granted with a view to establishing the iron industry.
– But the sugar bounty was granted mainly to help on the policy of a White Australia?
– Yes. In order to fulfil the desire and give effect to the decision of the people of this country, that the sugar industry should be conducted under white labour conditions only.
– But not for the purpose of giving the sugar planters more protection ?
– No. It was considered that the industry might be injured seriously if an alteration of labour conditions were to come into force rapidly. Hence, many years were allowed during which the sugar growers might rely upon a bounty being paid in order to make sure that the industry would be sustained.
– That was the only phase of the question.
– Exactly. But the point I am discussing is the maintenance of the industry which was vital to Australia. In this instance it is recognised that as we have valuable deposits of iron ore there is room for vast development, with a view to supplying the raw material of many other industries. After years of consideration it was determined by the late Government that the most advisable means of sustaining the iron industry would be to grant it a bounty. I think that it is too valuable an industry to be allowed to slip through our fingers from mistaken parsimony on our part. For to some extent we must recognise, possibly for only a limited time, that under our protectionist policy, a bounty is a subvention to an industry. Carrying out the same principle, it is proposed to grant a subvention to an industry equal in value to any industry which we have sought in another way to protect. In the circumstances, I find it difficult to realize why so many of my honorable friends here cannot see their way to subsidize in the way proposed what they have admitted is one of the most valuable industries.
– The trouble is that we are looking to the future.
– Let us first establish the industry, and then the future will dictate the best way of dealing with it. If it is conceded that the grant of a bounty is a means of establishing the industry, that is quite sufficient for my purpose, and it should appeal to my honorable friends with whom I have been associated in the establishment of industries.
– Have we not the power under the Constitution to establish it ourselves?
– I do not for a moment think we have.
– The late Prime Minister said that we have.
– I ask my honorable friend to look at the opinion of the late Prime Minister. I was amazed when I heard a certain interpretation of that opinion given, because to my mind it seems to be perfectly clear. He was expressly asked to give his opinion as to the power, if any, of the Commonwealth to establish ironworks. He admits at once that in his; opinion no such power is included in the expressed powers vested in Parliament under the Constitution. But he goes on to say that we have also to look at the implied powers of Parliament, and’ in this connexion he draws attention to sub-section xxxix. of section 51 of the Constitution, which gives us incidental power to engage in industries if the adoption of that course be necessary to the exercise of our expressed powers.
– Upon that admission we have power to engage in this industry for defence purposes?
– Not at all. That is a mere subterfuge. Let us suppose that in carrying out our defence policy we deemed it necessary to make provision for the manufacture of large and small arms. If a Bill containing a proposal of that kind were under consideration, I could quite understand power being conferred upon the Commonwealth to engage in the manufacture of iron. That is where the incidental power would come in. If incidentally to the exercise of our expressed powers under the Constitution, we found it necessary to establish works of this kind, we would have the power toestablish them. But what is proposed in this Bill is quite another matter. Nobody suggests for a moment that an incidental power should take precedence of an expressed power. First of all, we have to exercise our expressed powers, and the incidental powers will follow. But in this measure it is proposed that so far as the iron industry is concerned the Commonwealth shall have power to take it over, not in connexion with the exercise of our expressed powers, but quite apart from them. Such a course of procedure is not contemplated by the Constitution, and I am quite sure that Mr. Deakin never for a moment thought that the provision to which he has referred could bte interpreted in the way that it is proposed to interpret it.
– If steel rails were required for the construction of Commonwealth railways, havewe not power under the Constitution to engage in their manufacture ?
– In the first place,we have no power to take over the States railways.
– I said “ Commonwealth “ railways. For instance, there is the transcontinental railway to Port Darwin in the Northern Territory.
– Let us suppose that the existing raihvays were taken over by the Commonwealth with the consent of the States, and thatwe determined upon the construction of the two transcontinental railways. Let us further suppose that in the carrying out of those undertakingswe deemed it wise to manufacture ourown steel rails; undoubtedly we would have the power to manufacture them. But my honorable friend must see that he is jumping matters. Whatwe have not the power to do is to take over a concern such as is contemplated by the amendmentwhich has been outlined by the Ministry, and to carry on these ironworks for commercial purposes, because that is the only possible significancewhich can be attached to that amendment. In conclusion, let me quote the actual word’s of the ex- Prime Minister. After dealing with the expressed powers of the Commonwealth, he says -
The implied powers of legislation remain to be determined, but include (under subsection xxxix. of section 51) matters “ incidental “ to the exercise of the expressed powers.
The manufacture of iron may be incidental to the execution of any such powers, e.g., defence or the construction of railways. The Commonwealth might clearly undertake the manufacture of any goods for its own use; and probably if it did so, and it were incidentally advantageous, to the interests of the economical working of the undertaking that it should also manufacture for other consumers, such manufacture would also come within its implied powers. Except asabove, it does not appear that any power to establish and conduct manufactures’ can be implied from the Constitution.
Clearly what he means is that, if after havng satisfied our own requirements; a. surplus remains,we may dispose of that surplus, but thatwe have not the power, as a primary object, to takeover theseironworks for commercial purposes, such as is ncessarily suggested by the amendment.
– In other words, we can manufacture for others incidentally to manufacturing for ourselves, butwe must not manufacture for ourselves incidentally to manufacturing for others.
– Obviously. Senator Symon has declared that the proposed bounty will be a gift to a particular firm. If by any chance that should be so, it is quite immaterial to Parliament, so long as its effect is to secure the establishment of the industry. That is the object which we have in view, and if by the greater enterprise of any firm that firm obtains the benefit of the bounty, I say more power to it. The fact remains that the bounty is open to thewhole of Australia, and I d’o not seewhy the more enterprising of our ironworkers should have their efforts discounted in anyway by reason of the fact that that enterprisewill secure to them the proposed bounty.
– There must always be a pioneer firm in connexionwith any industry.
– Exactly. Our primary object is the establishment of the iron industry. That is the aim of the Bill. Senator Symon also objected to the proviso to clause 5,which reads -
Provided that, where the maximum amount has not been so paid in any year, the unpaid balance, or any part thereof, may be paid in any subsequent year, in addition to the maximum amount for that year.
Seeing that it is proposed to grant a lump sum towards the establishment of the industry,why should not that proviso appear? If, by reason of some misfortune, a manufacturer is not able to secure the whole £30,000, the payment of which is authorized by the Bill in one year, surely he should be encouraged so to lay out his plans that his enterprise will correspond with the full grant of the bounty. Let us give him a number of years within which to obtain a certain sum of money. Personally, [ regard it as a very wise provision to declare that if £5,000 or £1 0,000 of the sum to be expended in any one year, cannot be utilized, the business of . the person receiving the bounty shall not be so seriously disrupted as it might be if we were to deny to him thereafter the benefit of the unexpended balance for that year. Upon the other constitutional question, which was referred to by Senator Symon - I allude to his remarks regarding clause it - I confess that I entertain an entirely different view. I understood the honorable senator to say that he regarded the principle of that clause as unconstitutional, and that it was so decided by the High Court in the harvester Excise cases. With very great respect, I submit that the principles contained in this provision differ entirely from those embodied in the Excise Tariff (Agricultural Machinery) Act of 1906. Let us for a moment endeavour to realize the basis of the decision of the High Court in that case. In the first place, it held that when we exercised the power of taxation in the Excise Tariff (Agricultural Machinery) Act of 1906, it was not a bond fide exercise of that power, but an effort on the part of the Commonwealth to regulate the domestic manufactures of a State. Upon that ground the Court held that it was not a bond fide exercise of our powers of taxation, but an effort to regulate wages. That was the first reason why the High Court held the Act to be bad. To use the words of the Chief Justice -
The Excise Tariff Act No. 16 of 1906 is not an Act imposing duties of Excise, but is an Act to regulate the conditions of manufacture of agricultural implements, and is therefore not an exercise of the power of taxation conferred by tlie Constitution.
The next ground upon which the Court declared the Act to be bad was that it went outside the terms of section 55 of the Constitution, which provides -
Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect.
As the Excise Tariff (Agricultural Machinery) Act of” .1906 attempted to regulate the conditions of labour, the Court held 5. that it travelled beyond mere taxation pro- posals. The words of the Chief Justice in this connexion were -
Even if it were otherwise within the competence of the Commonwealth Parliament to deal with the conditions of labour, the Excise Tariff 1906 (No. 16), which, if valid, would have the effect of regulating the conditions of manufacture, would be invalid as dealing with matters other than duties of Excise contrary to section 55 of the Constitution.
In the third place, the Court held that the Act was invalid because it provided a means of ascertaining whether a proper standard of wages was being paid in connexion with the agricultural implement making industry. These were the grounds upon which the Act was held to be unconstitutional. But the Bill now under consideration does not attempt to impose taxation. It is not a taxation measure. It merely provides for the payment of a bounty in connexion with a particular industry. In it we say to manufacturers, “If you are to get the benefit of this gift or bounty, you must pay certain wages.” In other words, we propose to grant this bounty upon our own terms, which terms are prescribed in the Bill.
– We do not prescribe the wages to be paid before the manufacturer commences operations, but onlyafter he has made application for the bounty. It is putting the cart before the horse.
– It is, if I remember rightly, following the terms of the Sugar Bounty Act. I have differentiated between the constitutional aspect of the two measures, pointing out, first of all, the reason why the Court held the Excise Tariff Act of 1906 to be invalid, and, secondly, the totally different terms of the Bill before us. In other words, this is a mere gift on our own terms, and from that stand-point I certainly do not take the view enunciated by Senator Symon as to the constitutional aspect. But I take the opportunity to draw the attention of the Minister to the fact that I am disposed to think that a part of the Bill in its present form would not be effective for the objects he has in view. I mention the matter to enable him to give further consideration to the point. As the section in question will doubtless be very strictly read, it must be most carefully prepared so as not to be open to the objections which, while Senator Symon was speaking, crossed my mind. By clause it of the Bill, the Minister seeks practically to adopt the terms of the Excise Procedure Act. The history of that Act will be remembered. First of all, we had the Excise Tariff Act No. 16 of 1906, which provided for taxation on certain machines, and set out that the Act should not apply to goods manufactured by any person in any part of the Commonwealth under conditions as to the remuneration of labour which the President of the Commonwealth Court of Conciliation and Arbitration declared to be fair and reasonable, or was so declared by a Judge of the Supreme Court of the State or by any persons constituting a State industrial authority to whom the matter was referred. After that Act was passed it was discovered that there was no machinery for making the application. Under those circumstances we found it to be necessarv to introduce a machinery Bill which subsequently became “the Excise Procedure Act. What the Government now propose is the adoption, as far as possible, of that machinery to this Bill. But I am afraid, looking at the matter somewhat hastily, that the Minister has not succeeded in his object. First of all, provision is made to the effect that the person claiming any bounty under this measure shall, in making his claim, certify to the Minister the rate of wages paid by him to his employes in connexion with the manufacture of the goods on which the bounty is claimed. Then if the Minister finds that the wages paid are below the standard prescribed by any Commonwealth or State industrial authority, or, in the absence of any such standard applicable to the case, are below the standard rates paid in the locality in which the goods are manufactured, he may withhold the whole or any part of the bounty payable. It is proposedto add to the clause that the provisions of the Excise Procedure Act and of any regulations made thereunder shall apply in regard to any application as if the application were an application as defined in that Act, and the application shall, “ for the purposes of this Act be deemed to be an application under that Act.” I draw special attention to the words that the application is to be “ deemed an application” under the Excise Procedure Act. We have to see what an application under that Act means. It means an application under section 2, sub-section d. But as the Act of 1906 is dead, according to the decision of the High Court, it seems to me that as the application under this Bill is to be deemed an application under that Act, it is to be deemed to be a dead application.
– Does the honorable senator notice an amendment which we have circulated dealing with that question ?
– I have not seen it. I am dealing simply with the proposal before me. I hope that my honorable friend has followed the point, because this provision will undoubtedly be read very strictly, and it is desirable that there should be no loophole. I ask him to obtain the necessary advice from the AttorneyGeneral. I have nothing more to add. The Bill in its terms is justified, and is also justified by the thorough investigations which have been made. We are warranted in believing that the passing of the measure will encourage the establishment of a most important industry. I submit, therefore, that the Bill should receive the most generous consideration of the Senate.
– I intend to vote against the second reading of this Bill, altnough I think it to be necessary to do something to establish the iron industry in Australia. Ido not think any country can do much for the development of its industries unless it produces the metals that are in everyday use. Senator Gray has drawn a pathetic picture on behalf of New South Wales, and pointed out what would happen to Australia if war broke out, and the enemy interfered with the importation of metals to Australia. The position would be bad. That is a reason why the iron industry should be established But, at the same time, it has alwaysseemed to me that we can pay too much for an industry. I point out that the iron industry is already established. It was. established some years ago. It has received assistance from the State of New SouthWales. The Government purchase iron from it at a considerably enhanced price.
– Is there not a prospect of the industry going under?
– Is there not a prospect of dozens of other industries in Australia going under, either because their proprietors have not the necessary amount of capital, or for some other reason? DoesSenator Best propose that the Commonwealth shall come to the assistance of every industry established in Australia, the proprietors of which are not able to carry on without assistance? I am prepared to votefor a protective duty for the iron industry.
– That would kill the primary industries.
– I do not believe that a protective duty would have any such result. The first question is whether it is necessary that the iron industry should be established in Australia. I reply that it is.
– It is very desirable.
– It is necessary. But shall we establish the iron industry by the means proposed? I do not think that we shall. We are asked to vote ,£150,000 to one firm to enable them to carry on for a few years. That is the only result that I can foresee. I doubt whether any senator believes for a moment that iron industries will be established in any other part of Australasia than New South Wales.
– Does the honorable senator urge that as a reason against the Bill?
– I urge that it is not right for the Government to spend j£i 50,000 to establish a monopoly which (will eventually, in. my belief, have to be taken over by the Commonwealth. I have no objection. to a duty, and, as a matter of fact, the proposition put before Parliament by Mr. Sandford year after year, when he was asking for assistance, was that there should be a duty of 12J per cent. He urged repeatedly that such a duty would be of considerably more value to the industry than any bounty that might be voted. A grant of £[150,000 will simply enable the company at Lithgow to carry on until the five years period is up. Then they will come to Parliament again. I think it is better that the industry should be in the hands of the Federal Government. That is the only satisfactory way of carrying on an enterprise of this description. We shall have this industry established just as quickly and far more permanently if, as I “believe would be shown to be the case, the people of Australia are prepared to give the Commonwealth the power to establish it.
– What is the difference in principle between this and the sugar industry ? The object of the bounty is precisely the same in both cases.
– There were thousands of people engaged in the sugar industry.
– The cases are not analogous. Does Senator Best propose to adopt similar legislation in connexion with this industry to that adopted in connexion with the sugar industry? Does the honorable senator propose the imposition of an Excise duty upon iron in order that a cerJ:ian amount of the bounty may in that way be returned to the State - I do not think that the honorable senator would propose that for a moment - or to give the industry the assistance he desires to give it.
– Questions of revenue were associated with the sugar industry.
– In connexion with the sugar industry it must be remembered in the first place that, with one exception, every State in Australia imposed a heavy duty on the importation of sugar. Then it had been declared by the people of Australia that the coloured man was to get out of the sugar industry. There was consequently no other way of dealing with the question. If the matter had not’ been complicated by the employment of coloured labour in the industry, all that would have been asked for would have been the imposition of a duty on imported sugar. That would have been sufficient to enable the industry to be carried on.
– The honorable senator under-estimates his modesty when he says that is all that would have been asked for.
– I repeat that that is all that would have been asked for. But, because the question was mixed up with the question of the employment of coloured labour, and, in order that the product of the white man might be distinguished from that of the coloured alien, we passed the legislation which is on our statute-book to-day. We are asked to give Government assistance to the iron industry by granting a bounty of 12s. per ton upon the production of pig iron, and what is. equivalent to a bounty of 24s. per ton on the production of bar iron and other forms of manufactured iron. It is urged from the other side that the imposition of a duty for the encouragement of the iron industry would be injurious to very many other industries, since the effect would be to make iron very dear to the users of it as a raw material, who would have to enhance their prices. But even suppose they did, what would be the difference after all? Is it not proposed under this Bill to take £150,000 out of the pockets of the people, and will not those who require to use machinery have to pay a proportion of the amount proposed to be given to this company ? If the course I have suggested were followed, we should be establishing the industry on a better basis and on a more permanent footing than by the method proposed in this Bill.
– What about the revenue aspect of the honorable senator’s proposal ? Would it not mean a largely increased revenue for some time?
– It would no doubt result in an increased . revenue for a time, but I do not know that that would be any particular harm, if it led to the establishment of an industry which is necessary. Would not the same objection apply to the imposition of every duty for which the honorable senator voted for the encouragement of other industries? Many of the duties to which we agreed in discussing the Tariff involved a considerable increase of revenue for a time. If I were asked whether I preferred to assist: this industry by imposing a protective duty, or. by granting a bounty, I should say at once by the imposition of a duty. But quite apart from that, I contend that it is necessary that this industry should be in the hands of the Government. We should then know exactly how it was being conducted, and what was its value to the Commonwealth. I believe that the industry would be established just as quickly and more effectively in that way, even though we should have to wait until we asked the people of Australia to give us the power to establish it. In dealing with the Tariff, honorable senators opposite lectured us day after day, and week after week, upon the practical villainy of affording assistance to industries. We do not hear that kind of talk from them now. They say that this money will come out of the general revenue, and from the pockets of the people in every part of Australia, and will be paid to persons who have invested a large amount of money in the business, and who cannot make it a success without Government assistance.
– We have provided for bounties for a number of other industries.
– I am aware of that, but the Federal Parliament has so far agreed to no bounty, the result of which will be to hand over £150,000 to one firm. In the Bounties Bill, we dealt with an entirely different matter. Let me remind honorable senators that that measure was very strongly opposed by many of our friends opposite on the ground that it would not have the effect of encouraging the industries dealt with. Bounties were proposed for the encouragement of primary industries in connexion with which it was impossible for large* companies to claim the whole amount voted. We sought to give assistance to small men to induce them to undertake the planting of certain crops in order that it might be proved that certain things could be produced in Australia. That is not necessary in this case, because every one knows that iron can be produced in Australia. We have any quantity of the raw material from which iron is manufactured, and we know that it is being manufactured in Australia to-day. We know further that the iron industry is in the nature of a monopoly, and, in the circumstances, it is wrong to vote £150,000 to enable one firm to carry on for the next five years, which, to my mind, is all that is provided for in this Bill. One of the principal arguments advanced in support of the second reading is that there is a considerable number of men employed at Lithgow. That is so, and I do not think that any one wishes to do anything which would result in those men being thrown out of employment. Honorable senators on this side have done many things to provide employment for the people of Australia. But honorable senators opposite have not usually been so very particular about the throwing out of employment of large numbers of people.
– The honorable senator has no justification for that remark.
– A few. years ago, some thousands of people were thrown out of employment for weeks and months at a time, and no such argument was advanced then.
– The honorable senator has no justification for that statement.
– I .have absolute justification for it. At the present time, we know it is probable that a few thousand men may be thrown out of employment in another part of New South Wales, but we have not heard a demand for Government action to prevent that. The question involved is one of wages, and when it comes to a question of the worker getting fair remuneration, honorable senators opposite are not so anxious lest he should be thrown out of work. In this case, however, the argument that a number of men are likely to be thrown out of work is being used as a lever to induce honorable senators to deny their principles.
– I have not heard a single word of such an argument.
– Did the honorable senator not hear Senator Gray say that there was a large number of men employed at Lithgow? Did he not hear the honorable senator ask whether we wished to throw those men out upon the world, with nothing for them to do? I have heard the argument used a number of times in connexion with this measure, and it has already been answered by Senator Henderson and other honorable senators on this side.
– I suppose that we may take it that the reverse applies, and that the honorable senator does not care whether men are thrown out of work or not? ‘
– We do care. We do not desire to see any men thrown out of employment, but it is possible for honorable senators to be asked to pay too big a price to prevent temporary unemployment when they are asked to sacrifice their principles. The throwing of the men engaged in this industry out of employment is being used by honorable senators opposite as a lever to induce honorable senators on this side to sacrifice the principles thev have held for years, that they have put before the country, and on which they were returned. 1 for one absolutely refuse to do so, even though my refusal should mean the defeat of the second reading of this Bill, because I believe that ultimately we shall be doing more in the interests of the men employed in this industry bv taking up the industry ourselves. I remind honorable senators that exactly the same argument was used in Victoria when the State Government determined to manufacture railway rolling stock at Newport. Wails were then raised by those interested in private companies engaged in the manufacture of rolling stock, ostensibly in the interests of the men they employed. What is the position to-day? The land on which those works stood was cleared of the buildings, was cut up, and sold for building sites. And what is the position to-day at Newport? Instead of a few hundred men being employed in the industry, there are 2,200, a greater number than was employed previously by the Government and private companies combined. At the same time, the men are working now under better conditions, and are getting better pay, than they ever enjoyed under private enterprise, and the industry is being carried on at a cost, so far as locomotive construction is concerned, of .£30 per ton less than when it was carried on by private enterprise. At the time to which I refer, it was said that men employed by the Phoenix Engineering Company and other companies would be thrown out of employment, and if that argument had been allowed to prevail, the private establishments would have continued to drag on a miserable existence for a number of years, the men employed in the industry would not have been nearly so well paid, would not have enjoyed as good conditions as they enjoy to-day and the manufacturing cost would have been from 20 to 25 per cent, higher under private enterprise than it is to-day under the State. I have no wish to delay the decision of this matter, but I shall do what I can to defeat the proposal to grant the bounty proposed. I believe, as Senator Symon has pointed out, that this is a proposal to grant from the revenue of the country ,£150,000 to one firm to enable. them to carry on for a while. I do not care about introducing provincial considerations, but I may .ask honorable senators who represent New South Wales, and who have all along bitterly opposed the granting of assistance to industries generally in Australia, whether, if this industry were to be established in any other State, they would have been as eager to assist it as they have shown themselves to be when they know that it is to be established in New South Wales? It seems to me that altogether too much provincialism is exhibited about this matter. If this industry were located in Queensland, and a similar proposal were submitted, I should vote against it just as readily as I shall do to-day, and for exactly the same reason, and that is that it should not be viewed from a provincial stand-point. I believe in the establishment of industries which we recognise, and which, I think, every member of the Senate realizes, are in the nature of monopolies.
– Not necessarily. There may be’ half-a-dozen industries of one kind.
– Does not the honorable senator remember what took place at the big works in America when there was practically a civil war and a monopoly was being worked up?
– We shall deal with monopolies when they arise.
– Does the honorable senator propose to pour public money into industries in order to create monopolies, and, after they have been created, to use large sums to pay the monopolists, so that we shall be able to take the industries from them? Is that the sort of doctrine which he preaches here?
– There will be a second plant at work within two years.
– The honorable senator knows quite well that even though there may be a second plant at work, it will not be worked by independent companies. He knows very well that the nature of the business, in every country’ where it is established, is compelling the proprietors to come together, with the object of forming a monopoly. The same thing is going on in Germany, England, and practically in America.
– We encourage those monopolies bv buying English iron.
– Undoubtedly we have to get iron from somewhere.
– Why should we not make it for ourselves?
– Exactly. I believe that if we did it would be more beneficial to the country, and the industry would be established on a. more permanent footing. I believe that we shall do more in the interests of Australia, and those who would be working in the industry, by. allowing it to stand as it is until we obtain from the people, in the course of a year, power to establish it in the only way which, in my opinion, would be of any use to the Commonwealth.
– I am strongly in favour of the greater part of this Bill. I shall vote for its second reading, because I consider that, if possible, the iron industry should be established here. At the same time, I should not favour the imposition of a heavy duty on iron, because it would mean a very serious tax on both our primary and manufacturing industries. .It would strike a heavy blow at the prosperity of Australia. For that and other reasons I could name, I think that to give a bounty is the better and simpler method to adopt. In Australia we have any quantity of iron deposits. The’ iron industry has been established, at a very large expense, by patriotic men, who have a know ledge of the business. Surely that is an indication that it is, so to speak, indigenous to the soil. After having helped so many industries, we ought not to refuse help to this industry. It would be a wrong and an injustice to Australia if we did. I do not believe that it is likely to be injured seriously if we do not establish the iron industry for a few years. It can manage to get along very well without the industry, because it is a great country, and can survive many knocks on the head. The time is ripe for helping this industry, and I believe that if it is helped, as proposed in this Bill, then, at the expiration of i9t4, it will be able to stand alone. We should not take any course which would seriously handicap our primary industries. Without them we could not exist very long. Our exports of butter, wheat, lambs, wool, gold, and coal sustain the manufacturing towns. There would be no manufactures . without the primary industries. What we chiefly need at the present time is more population. Let us encourage men to come from the good old countries, with a little money in their pockets, to help us in developing a territory which has hardly been touched yet. When we have a population of 10,000,000 or 15,000,000 we may be able to defend ourselves in case of an emergency, perhaps without any help from the Mother Country. But, in my opinion, we shall have to depend upon her for many a long year, because we are not moving very fast in the matter of defence. Another reason why it would be wrong to impose a duty on iron is that it would increase the cost of all implements to such an extent that it would impose a very heavy tax upon producers and manufacturers. If, however, we establish the iron industry by means of a bounty, very likely we shall cheapen the cost of those articles, and the duty will advantage other industries instead of handicapping them. I could name many industries which are really monopolies. I could cite many cases where there is, perhaps, only one factory in Australia. Are we going to refuse assistance to an industry because it is described here as a monopoly ?
– Certainly not.
– I agree with my honorable friend. As he knows, there are plenty of iron deposits in Australia, and within the next twenty years the iron industry may be established in three or four places by means of a bounty. Why should we, because there is going to be a monopoly, refuse assistance in this direction? I object to the clause providing for the nationalization of the industry, because I hold that that would be a retrograde movement. It would take the life blood out of an industry.
– What about the railways? Shall we hand them over to pri”vate enterprise?
– The railways were constructed because the States could not get along without their help. I quite concur in the building of railways by the State. But that is not the nationalization of an industry.
– Is it not a carrying industry ?
– One of the reasons -why the States instituted a Railway Commission was to remove the management of the railways from parliamentary control. Management by Commissioners is infinitely better than parliamentary management. Senator Trenwith is very conversant with the facts in Victoria, because he was Minister for Railways for many years.
– They were much tetter without a Commissioner whilst I was Minister.
– In consequence of the introduction of Railways Commissioners, the working of the railway system of each State has been improved. There is no denying the fact that too many cooks spoil the broth. My honorable friend’s reference to the railways is not a case in point. They were built to assist in the development of the States. Without their help Australia could not have been developed as it has been. Perhaps, if the lines had to be built now, they might be laid down for less than they originally cost. Still it has paid the States to develop their territories by that means. In the State Assembly, about twenty-five years ago, I made a speech in which I predicted that the Phoenix Foundry Company, which it was then proposed to establish in Ballarat, would come to grief, because it was not being located in a suitable place. If it had been established in Melbourne it might have had some chance of surviving, but when it was established at Ballarat, to which coal and material had to be carted, and where men were scarce, it started with a heavy handicap.
– Order. I remind the honorable senator that his remarks are hardly relevant to the question before the Senate.
– I hope that the Bill will be passed with the exception of the few clauses which have been referred to.
– I have risen to support the second reading of the Bill for various reasons. I take exception to Senator Fraser’s views on nationalization. That theory is growing very much in’ favour in Australia. The Parliament of South Australia has just indulged in the experiment of authorizing the purchase of a coal mine in New South Wales, to supply the State railways with coal. I believe that it will be very successful, too. In my State, nationalization is growing in favour. It has been urged, and urged strongly, that if this bounty is granted, it will go to one individual. I contend that such will not be the case. The Bill provides for a bounty of 12s. per ton on pig iron, no matter by whom it is produced. I contend that it can be produced in other places equally as well as at Lithgow. I believe that if we encourage the production of iron in this way we shall have iron works springing up elsewhere. It is nonsense for any one to say that Lithgow will be able to supply the iron requirements of Australia. In addition to the local supply of iron, in respect of which it is proposed to grant a bounty, we imported last year, according to Mr. Knibbs, 418,000 tons of iron, valued at £4,404,189. Here is a sum of nearly four and a half millions sent out of Australia to, as Senator Turley put it, assist monopolies in England and elsewhere.
– He did not put it in that way.
– I hold that those who oppose this measure favour giving employment to men outside of Australia in preference to our own citizens. Have we not adopted the principle of granting bounties to industries in the past ? Have not the farmers been repeatedly assisted by that means ? As a matter of fact, we have attempted to encourage the growth of almost every industry by the same means. The iron industry has been started by one firm, which is in a struggling position, and I maintain that we have a perfect right to come to its assistance in the interests of Australia. Should the industry become a monopoly - as some honorable senators fear - it should be an easy matter for either the States or the Commonwealth to acquire it. From the Statesmen’s Year-Book, I learn that there are 368 blast furnaces in operation in England, their average output being only 527 tons weekly.
– They must be very old-fashioned furnaces, because there are furnaces in existence to-day which produce more than that quantity of iron in twentyfour hours.
– But the honorable senator must recollect that there are a number of other furnaces whose output is not anything like that. I claim that the successful establishment of the iron industry will mean the employment, not of 1,000 men, but probably of 20,000.
– There is not that number of hands engaged in the industry throughout the civilized world.
– The figures which I have quoted deal only with the production of iron as a raw material. With the expansion of the industry in our midst, we hope that a. great many more engines and boilers will be manufactured in Australia than are being manufactured at the present time. I claim that in authorizing the payment of a bounty to this industry we are doing nothing more than we have done in the case of many other industries. Take the mining industry as an example. In almost every State in the Commonwealth developmental work in this connexion is being subsidized to the extent of £1for £1.
– At any rate, that is the case in South Australia.
– It certainly is not the case in Western Australia.
– I intend to support the second reading of the Bill, and also the proposals which it contains for the nationalization of the industry and the enforcement of proper wages conditions. I trust that those who advocate the payment of a bounty will insist that a fair wage shall be paid to the employes in the industry.
– Hear, hear !
– Some honorable senators will vote against the wages condition, but in favour of the payment of the bounty.
- Senator Millen, by an approving “ Hear, hear,” has affirmed that he will support the enforcement of proper wages conditions, and I trust that he will adhere to his intention.
– I am very hopeful that some definite action will be taken upon this important Bill. This is the third or fourth occasion upon which it has been before Parliament, and, so far, no satisfactory result has been arrived at. Seeing that the iron industry isthe base of all other industries, it is rather strange that nothing has been done to extend protection or encouragement to it. That such is the case does not redound to the credit of this Parliament. Indeed, it constitutes a rather sad commentary upon the earnestness of the public men in this country. I intend to vote for the Bill, because I believe that without it the iron industry will continue to progress in a struggling, half-hearted fashion, and I am not content to allow that. One pleasing feature of the present debate is the anxiety which has been manifested by a number of honorable senators, who hitherto have not exhibited any desire to encourage our native industries, to come to the rescue of the iron industry. Even at this late hour of the day I am willing to give them the praise which their action merits. But if they were the ardent apostles of Cobdenism that they would have us believe, they would hold aloof from this measure, refuse to accord the iron industry any assistance, and allow it to paddle its own canoe against the ocean currents of competition from every part of the world. I welcome the adhesion of Senator Pulsford - who glories in the fact that he is a conservative free-trader - to a policy which has for its object the encouragement of the iron industry in Australia. A similar remark is applicable to the leader of the Opposition. I am glad that upon the present occasion we are witnessing a repetition of his action in connexion with the duty upon steel rails. Honorable senators will recollect that when that duty was under consideration he outvoted even such an old warrior in the cause of protection as the Vice-President of the Executive Council.
– None are so bigoted as are new converts.
– At any rate, I am glad to welcome Senator Millen to the fold, to which Senator Gray has also found his way. I fear, however, that if some of the old champions of free-trade could have heard the sentiments to which utterance has been given in this Chamber by Senators Pulsford, Gray, and others, they would have turned in their graves. The thought that those honorable senators have fallen so low as to embrace a protective policy-
– I cannot forget the honorable senator’s action in connexion with the duty upon mining machinery.
– What about rotary engines?
– I am also reminded of the honorable senator’s action in connexion with the duty upon rotary engines.
– The circumstance to which I have alluded simply shows that men may be at sea upon nine points and sane upon the tenth. It is, however, quite apparent that there is a conflict of view concerning the best method of encouraging the iron industry. Some honorable senators think that that result can best be accomplished by the payment of a bounty, others favour a heavy protective duty, and a third section believe that nationalization alone will afford the industry effective protection. But I would point out that even if we nationalize the industry we shall need to protect it. Unless we imposed some duty upon the imports of foreign countries it would matter little if the industry were nationalized tomorrow. Simply because we have not sufficient numbers in this Parliament to carry a proposition in favour of the nationalization of the industry, I am not prepared to allow it to remain stationary, or to retrogress for lack of. a helping hand. Should the industry develop into a monopoly - as some honorable senators seem to fear - the same means of dealing with it will be at our disposal as are at our command now. As for the proposed bounty, I feel that it is more than a fair thing. Twelve shillings per ton on pig iron is too much. If we take the accountant’s story as to what it costs to produce pig iron at Lithgow we find that 12s. per ton means something in the neighbourhood of 17 or r8 per cent. During my visit to Lithgow I was informed , bv Mr. Sandford that he would be able to carry on with a duty of 12 *</inline> per cent. I shall, therefore, make an endeavour to reduce the amount per ton. I should like to ascertain whether or not this bounty iis going to be payable to one company for the various forms of metal turned out, such as pig iron, puddled bars, and steel. If that be so, it means the payment of about 36s. per ton, which would certainly be a very substantial encouragement to the industry. As far as nationalization is concerned
– - I desire tostate at the outset that the Bill relating tothe Federal Capital site is making such progress in another place, that we understand that if the measure now before us isdealt with quickly to-night, we shall beable to take up the Capital site question to-morrow. I therefore appeal to honorable senators to give us every assistance. Turning to the criticism of the Bill now under consideration, I desire to point out that Senator Symon and Senator Best rather challenged the position I took up regarding the attitude of the Right Honorable C. C. Kingston as to whether the Commonwealth has the power to take over such an industry as this. I wish to substantiate’ my position by referring honorable senators to the report of the Royal Commission. On page 9 of that document, they will find the following paragraph -
Your Commissioners recommend that provisions, should be inserted in the Bill -
Securing the equitable settlement byconciliation or arbitration of all industrial disputes in relation to anywork for the earning of bonuses.
Securing to the Commonwealth or to the State in which the work for the earning of bonus is being chiefly carried, on, a right of purchase of the undertaking after a fair interval at a valuation.
That report is signed by no less than three lawyers, Mr. Kingston, Mr. L. E. Groom, and Mr. J.W. McCay. It is also signed bv Mr. Mauger and Mr. D. Watkins. The late Sir Edward Braddon signed the report, but intimated that he dissented from paragraph b, in the quotation which I have just made. Here we have the spectacle of three lawyers deliberately, and after investigation, with the opinion of the then AttorneyGeneral, Mr. Deakin, before them, saying that they desired to have inserted a provision that the Commonwealth or the State in which the work for the earning of the bonus was being carried on, should have the right to purchase the undertaking. Senator Best conceded to those of us who support this measure, in respect to the provision to which I am referring, that the Commonwealth had incidental powers. When we come to consider those powers, we see how wide they are. First of all, the Commonwealth controls the post and telegraph services. Consider the consumption of iron telegraph poles. Those who have read the report of the Royal Commission now sitting, are aware that experts have strongly recommended the substitution of iron for wooden poles.
– Does the honorable senator contend that the consumption of iron by the Government is as great as, or greater than, the consumption of iron by private people?
– Undoubtedly, the various Governments of Australia are very great consumers of iron, and in the future, probably, the Commonwealth Government will be the greatest consumer. If honorable senators turn to section 51 of the Constitution, they will observe that paragraph vi. intrusts the Commonwealth with the responsibility for defence. Under paragraphs xxxiii and xxxiv., we have certain powers as to railways. Every honorable senator knows that there are two schemes now proposed, which are within the region of practical politics with reference to the acquisition of railways by the Commonwealth. I have quoted the opinions of three lawyers, one of whom was very eminent, and another of whom was, until lately, AttorneyGeneral, recommending that there should be put into a Bill for this purpose such a pro vision as the Government have inserted. I come to another authority. I have kept this one for Senator Frasers particular benefit, because he will pay special attention to the opinion of Mr. W. H. Irvine. Mr. Irvine had this position put to him.
– What is the honorable senator quoting from?
– I am quoting from some notes which have_been prepared for me. The postion put to Mr. W. H. Irvine was this -
I do not think it is a position which can be dismissed by the phrase that the nationalization of the industry is outside the region of party politics. Probably if my honorable friend had not thought that it was outside the region of practical politics, he would have resorted to that other stronghold - that it is unconstitutional.
Mr. W. H. IRVINE. No, I do not think that it is.
Mr. Frazer. The honorable member does not think it is unconstitutional ?
Mr. W.H. IRVINE. No. I make the honorable member a present of that.
Further on Mr. W. H. Irvine said-
What I mean is that, so far as I know, it would not be unconstitutional for the Federal Government to acquire ironworks, but it would be unconstitutional to prevent the States from doing so.
So that we are fortified in our opinion that our constitutional ground is sound. I appeal to those honorable senators who want to see this Bill passed to remember that other honorable senators are making a certain concession in voting for the second reading. It is straining the goodwill of those who are making such a concession to endeavour to strike out the provisions to which I am referring. Moreover, to do so may be to endanger the third reading of the Bill.
– I do not think that the Minister should put the matter in that way.
– I do not put it as a threat, but honorable senators opposite should consider what I have said as a possibility. I have heard no proposal to strike out the proposition that a State should have the rightto secure the works towards which a bounty is to be paid. Not to object to a State being concerned in such an enterprise, and to object to the Government of the Commonwealth having such a power, is rather “ straining at the gnat and swallowing the camel.” In view of the fact that many honorable senators do attach considerable importance to giving to the Commonwealth no more, but just the same, power as we are prepared to intrust to the
States, I ask honorable senators opposite not to stultify themselves, and not to refuse to give such a power to a Government controlled by the Parliament of which they are members.
– The honorable senator surely does not ask us’ to vote for what we regard as unconstitutional?
– If honorable senators ‘opposite adopt “the position that these powers should not be vested in any governmental authority, they should strike out the clause altogether. But I have pointed out that the constitutional authorities are in agreement.
- Senator Best admits that we have a right to take over ironworks in order to supply iron for carrying on defence and post and telegraph works.
– The Minister overlooks the word “incidental.’’
– Incidently to the Defence Department, we have a right to take over ironworks if we choose.
– We are not now dealing with a Defence Bill.
– And when we were dealing with a Defence Bill, Ave should not be dealing with a Bounties Bill. Because iron and steel are incidental to the exercise of our defence powers and our post and telegraph powers, we ask the Senate to make it a condition of the Bill that if the Commonwealth desires to take over these works at any time as incidental to the carrying on of its constitutional functions, it shall have power to do so. Honorable senators are not being asked to do violence to their constitutional opinions ‘ in that way.
– Every one is in agreement with the honorable senator up to that point. But the Government are proposing the starting of a commercial undertaking to supply the public primarily, and the Government incidentally.
– I say that the honorable senator answers himself, when he contends that we have not the power to enter into a commercial undertaking. If we have not that power when we proposed to take over the ironworks, the owners could refuse to hand them over, the matter would then have to go before the High Court, and we should be prevented from proceeding further if it was decided that we had not the power contended for.
– Have we not had enough of ultra vires legislation ?
– I have many times frankly admitted that we have hot the power to take over such works, except as incidental to our powers under section 51.
– We all say that.
– If we all say that, why do honorable senators propose co endanger the passing of the Bill by refusing the insertion of word’s which when the time comes can only give us the right to exercise a power which we have constitutionally, and which honorable senators are prepared to give to the Government of any State in which ironworks are established.
– The States Governments have the power already.
– The honorable senator is confusing the constitutional powers of the States and of the Commonwealth with the power in this Bill - which is not a constitutional power - that it shall be a condition of the payment of the bounty that the’ State Government shall have the right to acquire the works, or that the Commonwealth Government shall have the right to acquire the works for purposes incidental to the carrying out of the powers conferred by .the Constitution. I hope that honorable senators will agree to assist the passage of the Bill by accepting the amendments we intend to submit. I made a note of the objection that the bounty is going to be paid to one firm, with the intention to deal with it, but it has already been answered by the simple statement that when we were discussing the imposition of duties honorable senators did not consider whether they would be of advantage to one or to fifty firms, but only whether they were justified. That is what we have to consider in this case. If this bounty is justified, we should be prepared to grant it whether it goes to one or to fifty firms. I shall not take up any more time, because I am anxious, as I think honorable senators generally are, that, if possible, the Bill should be dealt with finally to-night. I trust that the second reading will be carried.
Question - That this Bill be now read -a second time - put. The Senate divided.
Majority … … 17
Question so resolved in the affirmative.
Bill read a second time.
In Committee :
Clauses 1 and 2 agreed to.
Clause 3 -
Provided further that no bounty shall be authorized to be paid on any goods manufactured or supplied or to be manufactured or supplied under a contract containing a term or condition permitting or providing for the deduction of the amount of thebounty or any part thereof from the price or moneys payable for the goods to the manufacturers.
– I understand that the firm specially interested in this matter has entered into a contract with the Government of New South Wales to supply a certain amount of material, and that there is a clause in the contract which provides that as the Government of New South Wales is to pay the manufacturers a certain price for iron and steel, they are to have no claim whatever on any bountywhich may be paid by the Federal Parliament, and that the bounty, whatever it maybe, must go to the New South Wales Government. Are we to understand that under the third paragraph of clause 3 it is intended that no bounty shall be paid on any products of the Lithgow works supplied to the New South Wales Government?
– I should say that if there is such an agreement in existence as that to which the honorable senator has referred, the owners of the Lithgow works would not be able to claim the bounty in respect of materials supplied to the Government of New South Wales under the contract referred to.
.- I quote the following from the conditions of the contract appearing as an appendix to the Bonus Commission’s report -
Should any legislation be passed by the Federal Parliament of Australia providing a bonus, for the production or manufacture within the Commonwealth of the materials to be supplied under this contract, the amount of such bonus accruing on the material supplied shall be deducted from any moneys due or becoming due to the contractor under this contract.
– Clause 3 is specially designed to defeat that.
– That is just what I am asking. Are we to understand that, under clause 3, no bounty will be paid by the Federal Government on any product of these works as supplied to the New South Wales Government under this contract?
– I am not in a position to say whether the contract to which Senator Turley has referred is in existence, but I think theclear reading of paragraph 3 of clause 3 is that the owners of the works will not be able to claim bounty in respect of any materials supplied to the Government of New South Wales under such a contract.
– I do not think there can be the slightest doubt that the statement made by the Minister is correct. It does not appear to me thatthe clause could be clearer than it is. I might say that, judging from the proceedings which took place elsewhere, paragraph 3 of clause 3 was introduced with the express purpose of preventing the operation of the clause in the contract to which Senator Turley has referred. Further, I say that I am entirely in sympathy with clause 3 of the Bill. The Government of New South Wales has made a contract with the ironmasters at Lithgow. and has undertaken to give them a price, with which they are satisfied, for supplying the requirements of the State. That contract, . I presume, is to be carried out whether this Bill is passed or not. In offering this bounty, we do not intend to relieve the New South Wales Government of any of their obligations, or to take from the Federal Treasury an amount which would enable them to obtain iron at a price less thanthey have contracted to pay for it. I think Senator Turley may be quite assured in the matter, and I think he will be if he reads the debate which took place elsewhere.
Clause agreed to.
Clause 4 -
Where the rate of bounty is fixed on the value of the goods their value shall be taken lo be the same as the value of imported goods of the like kind and quality as ascertained for the purposes of Customs duties.
– I ask the Committee to omit this clause, with a view to afterwards deleting class 2 in the schedule, under which it is proposed to give a bounty, on the ad valorem principle, in respect of certain manufactured articles. If that class be omitted from the schedule, this clause will not be required.
– Had not the honorable senator better move the postponement of the clause until the schedule has been dealt with ?
– As honorable senators seem to prefer that, I move -
That the clause be postponed.
– As I understand that Senator Pulsford would rather test on the schedule whether class 2 should stand, I have no objection to the clause being postponed until after the schedule has been dealt with.
– Not until after it has been dealt with.
Senator Sir JOSIAH SYMON (South Australia) [6.12]. - Either the clause ought to be postponed until after the schedule has been dealt with, or it ought not to be postponed at all. There is no object to be gained by postponing it, because we can take a test division on the question now, and if Senator Pulsford should be defeated, there will be no necessity to raise it again on the schedule. The question he desires to raise is whether the application of the bounty should be limited to a particular industry in New South Wales, or extended to other items set out in class 2. We can deal with that question now, I think.
– I think that I had better ask leave to. withdraw my motion for the postponement of the clause, because obviously if T were to wait until the schedule had been passed I could then do nothing The clause is really part of the schedule !o class 2 of which I object.
– If the schedule is passed, is it likely that the Committee will strike out this clause?
– I prefer to take a test vote on the question straight away. Honorable senators are well aware that I object to class 2 of the schedule, on the ground that it involves wholly and solely a matter of protective duties. . It is intended for no other purpose than to use the public funds in bolstering up certain industries at the expense of others. It has nothing to do with the reason, and the only reason, which I consider warrants me in supporting the grant of the other bounties, and that is the matter of defence. I do not consider myself called upon to elaborate reasons with which honorable senators are thoroughly acquainted. If they are with me in this matter, they will vote with me, and if the clause is omitted, I presume that they will assist me afterwards to secure the omission of class 2 of the schedule. They will observe that it is proposed to give a bounty of 10 per cent, on galvanized iron made from Australian ore. Now, that industry is already helped by a protective duty. In this Bill we are supposed to be giving no bounty where an import duty exists. Therefore, so fax as galvanized iron is concerned, the proposed ad valorem bounty on that article is distinctly against the policy of the Bill, as I understand it.
– There is no occasion for the honorable senator to submit a motion, as he can achieve hi’s object by asking the Committee to negative the clause, but it will first be necessary for him to ask leave to withdraw his motion to postpone its consideration.
Motion, by leave, withdrawn.
– I hope that the Committee will not agree to strike out the clause. Under item 140 of the Tariff the duties on corrugated’ galvanized iron per ton are 30s. and 20s., while on galvanized iron not corrugated, and corrugated iron not galvanized the duties are 20s. and 10s. When the Tariff was going through Parliament the duties on those articles were reduced very considerably. Originally the duties on corrugated galvanized iron were 25 and 20 per cent., and on galvanized iron not corrugated 20 and 15 per cent. It was pointed out that such duties would inflict a very heavy burden on some primary industries, and therefore they were reduced considerably; so much so, in fact, that it has been found that the local industry cannot be carried on profitably. These bounties are proposed with a view to making up the deficiency. When they are added to the existing duties we practically get back to the stage at which the industry can be made payable. It was for that reason that the bounties on these articles were proposed, and this clause is necessary if they are to be paid.
Senator Sir JOSIAH SYMON (South Australia) [fj.17]. - This has now, according to the Minister’s statement, become a Bill to redress the inequalities of the Tariff. I do not think we are prepared to do that at this late stage of the session with the prorogation facing us next week. It certainly is the coolest thing which has ever been proposed in a Bounty Bill, when we have not a Tariff before us. Some of us might desire to redress these inequalities properly and straightforwardly in a new Tariff. But surely this is not the way to tinker with the Tariff? I shall be found supporting Senator Pulsford in seeking to strike out this clause and class 2 of the schedule.
– I would point out to Senator Symon that if this clause is passed and class 2 is struck out of the schedule- no harm can be done. The provision will be. necessary if that class is retained.
– If we strike out the clause it will be the first step towards striking out class 2.
– The clause is harmless in itself, and if class 2 is deleted it will have no effect.
– We want to have a test division now. Senator MILLEN (New South Wales) [6.19]. - With all due deference to Senator Symon, I hardly think it is quite a direct definition of the present position to say that we are invited to redress omissions or errors in the Tariff. I remind honorable senators that it includes a division - VIa. - which contemplated distinctly the grant of a bounty.
– But not on these articles.
– The fact remains that the Tariff, with division VIa., was brought before us bv the Government with an assurance of their intention to proceed with a Bounty Bill, and that on the completion of that Bill it would be competent [Po]-* for Parliament to say whether or not the duties should come into operation. This measure is only the complement to the Tariff. It is not in any way a modification of it or a correction of any error.
– I simply took what the Minister said.
– That is where my honorable friend went astray. It is the last source to which I should expect him to look for information or guidance.
– I shall accept that warning in the future.
– In this Bill we are really carrying out the policy which was in the minds of us all when we assented to Division VIa in the Tariff.
.- When the Tariff was under discussion a short time ago a few of us did all we possibly could to get a duty on wire netting. There was a wail from the other side, particularly from that section which hails from New South Wales, that it would penalize all the struggling farmers and small settlers throughout Australia. Now in this Bill it is proposed to penalize the citizens of the Commonwealth in order to assist the industry. I voted for the imposition of a duty and I do not join with those who say that the imposition of duties increases the prices of commodities. I was rather surprised today to hear Senator Fraser, a protectionist, say that they do.
– I did not say that.
– The honorable senator said that if we imposed a duty in connexion with the iron industry it would penalize everybody in the community, because it would increase the price of raw material to everybody.
– Certainly, and I stick to that.
– I take it, therefore, that the honorable senator as a p/Utectionist uses the same argument as ever free-trader, that he is- opposed to protectionist duties, on the ground that they must necessarily increase the prices of commodities. Every protectionist argues that in the course of time prices are cheapened.
– Yes, he argues in that way.
– Yes, and he can bring forward innumerable instances where that has occurred.
– Would that be the effect on corsets, about which the honorable senator was so enthusiastic?
– The honorable senator’s remarks ought to be relevant to the clause, but they are rather irrelevant.
– Since the clause is interwoven with class 2 of the schedule, sir. am I not in order in arguing in a certain direction as to the advantage of protectionist duties as compared with bounties ?
– The honorable senator is in order, but his remarks are not strictly relevant to the clause.
– I shall endeavour to keep more strictly to the point at issue. In dealing with this clause we have to bear in mind the articles which are enumerated in class 2 of the schedule. It includes, for instance, a bounty on wire netting, not being prison-made and being made from Australian ore or from wire manufactured in the United Kingdom. I thought that this was a Bill to encourage what was called an Australian industry.
-Is that why the honorable senator voted against its second reading?
– I want to see it made an Australian industry, belonging to and run in the interests of the people, and not run in the interests-
– Of Victorian people.
SenatorFINDLEY. - And not an industry run in the interests of a small section in New South Wales, who is “everything by starts and nothing long.”
– That is the trouble with the honorable senator.
– Is npt the making up of corsets an Australian industry ?
– I cannot answer all at once. On the other side there is a section of honorable senators who make up a queer kettle of fish fiscally. They profess to be rigid free-traders, against every form of duty or bounty, and yetwhen an industry affecting their own State comes up for consideration they at once become protectionists.
– The honorable senator had better stick to corsets. He is more at home upon that subject.
– The leader of the Opposition is now treading upon very thin ground. There is only one honorable senator upon the opposite side of the Chamber who has been consistent in his attitude towards this Bill. I refer to Senator Symon, for whom - on account of his consistency - I have the very highest admiration”. The other members of the Opposition can no longer claim to be heaven-born free-traders, and to me it is no wonder that Mr. Reid declared that free-trade is a “ dead policy.” After today’s proceedings, honorable senators opposite ought to bury the flag. I like consistency
– In others.
– Senator Millen is consistent only in his inconsistency. As the Bill has passed its second reading, I am in a measure committed to it, but that will not prevent me from endeavouring to secure a modification of its provisions in several directions. I do not wish to see this clause eliminated, because I believe that had the articles enumerated in class 2 of the schedule been given adequate protection under the Tariff, there would have been no necessity to grant tha proposed bounty. To me the measure is an objectionable one, because it countenances a departure from a principle which has long been advocated by the Australian Labour Party”. As I pointed out the other day, there will be only one iron works in Australia, and, therefore, the industry will be a monopoly. That is the reason why I am opposed to the Bill.
– It appears to me that, to some extent, we havebeen misled in regard to this matter. We have been told by the Minister of Defence that because the duty which it vvas originally proposed to levy upon galvanized iron, wire netting, &c, was reduced during the course of the Tariff discussion, it is now proposed to make up for that reduction by granting a bounty of 10 per cent. upon those goods. At this juncture, I should like to call attention to the debate which took place upon the motion for the second reading of this Bill.
Sitting suspended from 6.30 to 7.45 p.m.
– In discussing clause 3 of this Bill upon the motion for its second reading, the Minister for Defence referred to Division VIa. of the Tariff which relates to metals and machinery. He pointed out that the duties levied under that division will not come into operation until a proclamation has been issued, after it has been certified by the Minister that the manufactures included in it have been sufficiently established in the Commonwealth. At that stage Senator Millen interjected -
The effect of clause3, I take it, is to provide that no bounty shall be running concurrently with the duty?
To which the Minister replied -
That is so.
– As regard the articles included in Division VIa.
– I understood from the Minister’s reply that under this Bill no bounty would be payable in respect of any product of iron upon which a duty is already operative.
– The honorable senator will see that I was dealing at the time with the articles enumerated in Division VIa. of the Tariff.
– At any rate, that was the impression which was conveyed to -my mind at the time.
– The whole measure is dependent upon Division VIa. of the Tariff.
– But the honorable senator must read the second paragraph of clause 3 in that connexion. It slates -
Provided that no payment of bounties shall be authorized under this Act, on any of the goods mentioned in the schedule, manufactured after the issue of a proclamation -
That proclamation can refer only to the articles enumerated in Division VIa. of the Tariff.
– That is so. Then the second portion of the schedule to this Bill means that, although a duty may be operative upon the articles specified therein, we propose to further subsidize the industries concerned in their production by paying them a bounty of 10 per cent.
Senator Sir JOSIAH SYMON (South Australia) [7.49]. - I am very much obliged to Senator Millen for having corrected the Minister’s statement to which Senator Turley has. referred, and which was certainly unqualified. At any rate, he conveyed to my mind the idea that all the articles enumerated in class 2 of the schedule to this Bill were articles upon which a duty - but an inadequate one - is operative at the present time. But as that is not the case, I do not think that we should be doing right if we excised from the measure the clause which is now under consideration. Take the case of wire netting as an illustration. That article is at present admitted free, and it may or may not be a legitimate subject upon which to pay a bounty. Whatever may be urged against the payment of a bounty in respect of galvanized iron cannot be urged against the payment of a bounty in respect of wire netting. I therefore ask Senator Pulsford not to take a division upon this clause, but to endeavour to achieve his desire when the schedule is under consideration.
Clause agreed to.
Clause 5 -
Provided that, where the maximum amount has not been so paid in any year, the unpaid balance, or any part thereof, may be paid in any subsequent year, in addition to the maximum amount for that year.
.- I move -
That the word “ Thirty,” line9, be left out, with a view to insert in lieu thereof the word “ Twenty.”
– Had not the honorable senator better make it “ ten “ ?
– The figures quoted by Senator Symon this afternoon show that the company which is engaged in the iron industry at Lithgow itself requested a bounty of only£30,000 per annum, and we all know that companies invariably ask for more than they expect to receive. Prior to Senator Symon quoting the figures in question, Senator Pulsford had declared that, in his opinion, the proposed bounty was too large, and that £20,000 a year would be adequatefor the purpose. I think, therefore, that I can claim his vote upon this occasion.
– I shall support the honorable senator.
– Of course, I make no secret of the fact that my desire is to kill the Bill.
– But does not the honorable senator think thathe might avoid subjecting it to a lingering death ?
– A bounty of £20,000 per annum for five years is equivalent to £100,000, which is a very large sum of money to ask the Commonwealth taxpayers to hand over to a private firm. Notwithstanding what has been done this afternoon, I hold that if a referendum upon this question were taken to-morrow, and if the adult males of the Commonwealth were asked to contribute directly at least 2s. each towards establishing this industry by means of private enterprise, they would hesitate to assent to the proposal. We must recollect that there are a number of other industries in Australia which are not so well circumstanced as is the iron industry in New South Wales. If this Bill be passed, Parliament will be approached by other industries with similar requests for assistance.
– If we succeed in establishing the iron industry, it will be all the better.
– Personally, I want to see the Commonwealth - that is the people - establish it. As a Labour representative I am here not to multiply existing evils, but to do all that I earn to minimize them.
– Get on to the Bill.
– I am “on to” the Bill. I know the impatience of the senators from the State where this iron industry is to be established.
– That is the honorable senator’s trouble.
– It is not my trouble. My objection would be just the same if it. were proposed to establish the industry in Victoria or any other State. More than once innuendoes have been thrown out to the effect that my opposition is based on the ground that the industry is to be established in New South Wales. Those interjections are manifestly unfair, because I give place to no one in my desire to promote the establishment of Australian industries. But I have a strong objection to the advancement of an interest in any one State, the result of which will be to place for all time power in the hands of a certain syndicate.
– I must ask the honorable senator to confine himself to the amendment.
– In my opinion £20,000 is a fairly substantial measure of relief to these indigent New South Welsh- men. They are in indigent circumstances. There is no doubt about that. They have made appeal after appeal, by personal representations to Parliament, by huge advertisements in the Sydney newspapers, and by working different organizations, commer cial and industrial, with a view of inducing Parliament to grant them immediately, a measure of assistance. They point out; that if they do not get at least £30,000 per annum for five years the industry willclose down. As Senator Symon pointed, out this afternoon, when we had the Tariff under discussion a short while ago, weheard a good deal about strangled industries, the men who were likely to be thrownout of employment, and the distress that would be created. I have in my timeknown interested persons to arrange for processions along the main streets of Melbourne, eventually winding up in front of Parliament House, when a Tariff Bill hasbeen under discussion, with a view of inducing Parliament to grant some measureof relief, in order, as it was said, that the market might not be flooded with unemployed workmen and workwomen. But I am not at all disposed to believe the statements made with respect to the number of men who are likely to be employed in> the iron industry when it is established. I am not disposed to believe either that £30,000 is required to be spent every year for five years. I believe that if we are togrant any assistance to the industry at all’ - and this Committee has evidenced its desire on that score - £[20,000 per annum will be sufficient. I do not wish to weary the Committee by citing industries to illustrate my argument, but if I felt so disposed I could quote numbers of industries that are said, and I believe truthfully, to be in need of assistance, because they did not get the duties they anticipated when the Tariff was under discussion. They are at least as worthy of attention as is the iron industry. We ought to reduce this amount by ,£50,000 during the five years. By so doing we might at a later period be able with the money so saved to substantially assist some other industries that badly need help. In any case, the £[50,000 would enable a large amount of work to be done by some of the Commonwealth Departments that are said to be in a state of starvation because of the falling revenue. Day after day complaints are made with respect to some of the services. We learn that the heads of Departments are at their wits’ end to know whatto do because they are not able to get from-‘ the Treasury the amount of money requisite to enable certain works to be carried on, and numerous requests to be complied with. I quite understand that honor orable senators from New South Wales are extremely anxious to push this Bill through*. and I thoroughly understand their impatience of criticism. There has been a coalition on this subject. At the last election the issue before the people was Socialism or anti-Socialism.
– I must ask the hon- orable senator to confine himself to the amendment.
– I shall endeavour to do so.
The CHAIRM AN. - I cannot permit the honorable senator to proceed with an argument that is not relevant.
– Let me point out that there is at stake a principle which is advocated by a certain section of the Labour Party. At the last election there were two parties before the people.
– May I remind the honorable senator that the question is whether the word “thirty” shall be struck out with a view of inserting “ twenty.” .
– There is a question of principle embodied in the amendment. As far as our party is concerned, it is a big question whether £30,000 per annum of the people’s money shall be given to a private company, or whether £10,000 per annum shall be saved, and the money utilized in the expansion of Commonwealth enterprises. We have power under this Bill, as the Minister has pointed out, and as others who do not view the nationalization principle with approval have admitted, to establish an industry.
– If the honorable senator does not proceed to discuss the >clause and the amendment, I shall have to ask him to discontinue his speech.
– I have only a few more words to say. I hope to receive the support of at least some of those honorable senators who have announced their intention to endeavour to reduce the amount. I trust that at least £50,000 of the taxpayers’ money will be saved, and that we shall reduce the sum proposed to be given to a private company, which, it has been said, is not so badly off, seeing that it consists of people with “long purses and Barge hearts.”
– I am not surprised at Senator Pulsford’s attitude, because it is consistent with his principles, but I am very much surprised that Senator Findley should ha.ve moved an amendment, the object of which would %e to bring about the very opposite condition of things from that which he wishes to establish. His great fear is that we shall subsidize a monopoly. Now, the effect of reducing the amount of the bounty from £30,000 to £20,000 per annum would be simply to subsidize one firm and take away whatever inducement there might be to the establishment of any other company. That effect would be produced, because there would be no money to give to any other company.
– According to a subsequent clause, the amount of the bounty may be divided pro rata by regulation.
– We are propos ing to offer a sum of £30,000 per annum for five years for the encouragement of the manufacture of iron in Australia. If we reduce the amount, there will be no encouragement to other firms to commence business in competition with the Lithgow works. There is an implied pledge that if the industry is established the Parliament of Australia will impose protective duties to guarantee to the “manufacturers the whole market of the Commonwealth. That is part and parcel of the policy ; and I am surprised to find Senator Findley objecting to the expenditure of such an amount as will be likely to bring a competitor into the field.
.- The Government cannot accept Senator Findley’s amendment, and I hope that the Committee will not agree to it. I point out that in the present Bill we make a reduction on the amount proposed in previous measures. In the first Bill, founded on the report of the Royal Commission, it was proposed to expend in the same direction £324,000. It will be seen that the reduction . made is substantial.
Senator Sir JOSIAH SYMON (South Australia) [8.9]. - I think that Senator Findley’s amendment has been proposed too early. ‘ The time to consider the question that “he has raised would be when dealing with the schedule. If we are not’ to reduce the amount per ton, 12s., which I think is too high, I do not see how we can reduce the £30,000. But if we decide to reduce the amount per ton, we might go back and consider whether the amount of the bounty should not also be reduced.
– I have no wish to kill time; but i do not believe in the Bill. We have no money to spend in this way,, and we are not justified in pressing forward this proposal. Of two evils I prefer to choose the lesser, and I shall therefore support the amendment. I am rather ashamed of the Government for their attitude in connexion with this measure. They have not got me inthe bag. The old cow has only got so many teats, as we used to say in South Australia. If the Government change their principles on coming into office the whole of the party to which they belong will be blamed for it, and I repeat that I am ashamed to some extent of their attitude on this question. I believe that there is no stronger opponent of the principle involved in this Bill than the Minister of Defence.
– Of whom the honorable senator says he is ashamed.
– I am ashamed of the attitude he has taken up in this matter. But for the sweets of office what sacrifices will not men make?
– What a charge for the honorable member to make against leading members of his own party.
– I can appeal to Senator Symon in this matter. I have no doubt the honorable senator understands what I mean.
– No, I have had no experience of that.
– Let the honorable senator consider where he is getting his applause from.
– What do I care about applause from any one?
– Is the honorable senator in order?
– I ask the honorable senator to make his remarks relevant to the question before the Committee.
– If you, sir, permit honorable senators to draw me off the track by interjections, surely you will not prevent me from replying tothem? Senator Pulsford was the first member of the Committee to suggest that the amount of the proposed bounty should be reduced to £20,000 a year, and surely other members of the Committee have the right to say that they agree with Senator Pulsford ‘s suggestion for various reasons, and amongst others, because we cannot afford to pay so large a bounty as is proposed in the Bill when we do not know where our revenue is to come from. I think that my remarks are pertinent to the question andare understood. I mean what I say. I am not going to shuffle, and I do not care for ap plause. I do not believe in parochial legislation. I have endeavoured to avoid mentioning New South Wales, but I cannot help it in this case. When I notice the attitude assumed by honorable senators opposite I am reminded that there must be something in the wind. I support the amendment, and I shall be prepared to justify my vote anywhere.
– I do not see why Senator Findley’s very practical amendment should give rise to all this commotion. I intend to support it. A few months ago a Bill similar to this was introduced in another place proposing the grant of a bounty of £324,000, and honorable senators will notice that in the Bill now before the Committee there has been a very substantial reduction of the amount to £150,000. We are told that there is a danger of the extinction of the industry if the proposed subsidy is not given to those engaged in it. If within a few short months it has been proved that instead of requiring £324,000 to keep the industry going only £150,000 is necessary, the practical nature of Senator Findley’s amendment mustbe recognised.
– I intend to support the amendment. From the earliest publication of the schedule to this Bill, I came to the conclusion that it would be necessary to reduce the proposed rates ofbounty per ton by at least one-third. Senator Symon has said that this clause is scarcely the proper place in which to take the action proposed.
– If the amendment be defeated, the amount of bounty to be provided for annually will be £30,000, and later on, if necessary, we can reduce the rates provided for in the schedule.
– That is just the point with which I am dealing. I desire to reduce the rates in the schedule by one third. That would reduce the amount of the bounty payable, and I think I shall be adopting the same attitude in supporting Senator Findley’s amendment, which, I think, ought to be pressed.
– I should like to point out to my political friends who are supporting the amendment that they are going the wrong way to bring about what they desire. Senator Findley wishes to kill the Bill, but he will not do that by reducing the proposed bounty by a few thousand pounds. The honorable senator desires, if possible, to prevent the creation of a monopoly in this industry. I have my doubts whether it will ever be anything else. But if the bounty proposed in this Bill is reduced, there will be less inducement held out to other companies to incur the initial expense of establishing works to secure the bounty ?
– Does the honorable senator think that there is any prospect that any company other than the Lithgow Company will secure any of this money ?
– I do not know that there is. As one who has given the matter considerable attention, I may say that if I were interested in the Eskbank Works at Lithgow, I should consider it advisable in my own interest to remove them to some place more favorable to the successful development of the industry. There are places where it might be more successfully carried on.
– In Queensland?
– No; in New South Wales. I am afraid that the industry will be confined to that place for very many years to come. Viewing the matter from this stand-point, it occurs to me that it is possible that some other company might be induced, in view of the bounty, to start the manufacture of iron in a more suitable locality than Lithgow.
– Were not the same arguments used when the bounty proposed to be paid was £324,000?
– If they were, that only strengthens my contention on this occasion. If honorable senators are anxious to confine the industry to one company, in proposing the reduction of the bounty they will take a step to bring that about. I quite agree that there is room for improvement in connexion with particular items in the schedule. But I think it would be unwise to reduce the total amount of bounty proposed, and my honorable friends’ will only be making a bad job worse if they succeed in doing so.
– If the grant of only £20,000 ayear will make it absolutely certain that there will be only one monopoly, is not that what we desire?
– Can there be more than one monopoly?
– There might be a monopoly in each of the States.
– I should like honorable senators to consider what I have said. Whether a second company will be started for the manufacture of iron. I am unable to say ; but even if it were we know that the spirit of the age leads to the concentration of industries, and it is probable that in a short time the two companies, following the example set in other parts of the world, would combine. I advise my honorable friends not to insist upon the amendment.
Clause agreed to.
Clauses 6 to 8 agreed to.
Clause 9 -
The person claiming any bounty in respect of pig iron, puddled bar iron, or steel, shall give his bond to the Commonwealth, in a sum to Be fixed by the Minister (in this Act called the secured amount) conditioned to be void if he transfers to the State in which the goods are manufactured all lands, buildings, premises, machinery, plant, and equipment of any kind used in or in connexion with the manufacture of the goods, if so required by the Governor of the State within twelve months after the date of expiry of the bounty with respect to that class of goods; such transfer to be in consideration of fair compensation for the property transferred, to be assessed in case of dispute by the President of the Commonwealth Court of Conciliation and Arbitration, whose determination shall be final and conclusive and without appeal.
– I move -
That after the word “ to,” line 6, the words “ the Commonwealth or to “ be inserted.
I have already discussed this amendment in speaking to the second reading of the Bill. I do not propose to add anything to what I have said, except to urge upon honorable senators the advisability of taking this permissive power for this Parliament, as well as for the Parliaments of the States.
.- I should like to ascertain from the Minister of Defence whether the insertion of those words will give to the Commonwealth any greater powers in respect of this industry than it enjoys to-day?
– Yes, because the bounty will be accepted on that condition.
– The Ministersays that the bounty will be accepted on the condition that these people shall be prepared to do a certain thing, as mentioned in the Bill, but will it be constitutional?
If it is not constitutional, then it is only so much make-believe, because these people will get the bounty, and afterwards they can whistle at us, so far as these words are concerned, because they cannot be enforced.
– They will say that the condition is void.
– If the Commonwealth challenge these people, the matter will be taken to the High Court, and, probably, it will decide in their favour.
– We are simply deluding ourselves in voting for the Bill.
– I think so.
– I fancy that Senator Findley is being deluded.
– No. I think, and the opinion has been expressed by others, that under the Constitution we have the power to embark in this industry, provided that we require certain materials incidental to our Departments.
– If the honorable senator will read the clause he will see that it provides the machinery for taking over the buildings. If we did not insert those words, a special Bill would be required to deal with the question.
– Every one understands that the Commonwealth cannot engage in any business unless the Constitution is altered.
– The honorable senator is accepting the opinions of the opponents of nationalization rather than the opinions of its friends.
– No. I am not influenced in any way by any views which have been expressed by honorable senators sitting on the opposite side.
– Why does the honorable senator accept their opinions and refuse to accept the opinions of those sitting on this side?
– If my opinion is shared by those who sit in opposition to me, that is no reason why the Minister should come to the conclusion that I have been influenced by their opinions. With all due deference to him, I think that his amendment is so much make-believe. I am going to vote for it, but I feel satisfied in my own mind, though I may be wrong, that if it is made, we shall be in no better position than we are in to-day.
– Then why vote for it?
– It cannot do any harm.
– It will do a great deal of harm. It will make the public believe that this ironworks will come over to the Commonwealth after the lapse of five years.
– True, but I have another question to look at, and that is that if I do not vote for the amendment I shall be charged with having voted against the principle of nationalization.
– And justifiably so, too.
– This is only a. make-believe attempt to nationalize the industry.
– It would do no harm; if we inserted in the Bill the Sermon on the Mount, but the honorable senator would not vote for its insertion, surely?
– The honorable senator is not going to lead me into a trap. I am expressing the opinion that these words are superfluous, and yet I intend to vote for their insertion.
– They are mischievous.
– They are so much make-believe, and, if inserted, will lead a section of the electors who believe in all monopolies being nationalized to think that they empower the Commonwealth to nationalize this industry almost immediately if it should feel so disposed.
– And we know that it is not so.
– I know that it is not so, and honorable senators know that we could not nationalize the industry without altering the Constitution.
– Who says so?
– Senator Pearce said so.
– We could not nationalize the industry at Lithgow without an alteration of the Constitution.
– Does the honorable senator say that we could not take it over for defence purposes?
– We could not take over a section of the works only.
– Could we not take over the whole of the works for defence purposes ?
– The Minister says “ Yes.” but a framer of the Constitution says “ No.”
– He does not say “ No.”
– Indeed,I do.
– If we possess that power, why is not an effort made to take over the works at Lithgow?
– Because we have not a majority in Parliament.
– In this Bill, we are providing the machinery for doing so.
– We shall never have a majority here if we do not make an effort to do that which is right.
– This clauseprovides the machinery, and the honorable senator knows that, too.
– I wish I could believe that we could take over the industry if the Bill were carried in the form in which it is proposed to be amended.
– This Bill does not give us the power. We are trying to get the machinery, but the honorable senator is opposing it.
– I am not.
– The honorable senator does not know where he is.
– I know exactly where I am, but, at times, the honorable senator finds it very difficult to make clear his position. At one moment he is as vigorous as I am in opposing the Bill,but at the next moment he points out difficulties and doubts which confront its opponents.
– My position is a reasonable and an intelligible one, but the honorable senator’s is neither one nor the other.
– We have only the honorable senator’s statement for that, and all vain persons have a very elevated notion about their views. In my opinion, the insertion of these words can have no other effect than to delude a number of persons.
– I believe that Senator Findley has raised a question which has agitated the minds of many persons in the Commonwealth, and that is whether it has or has not the power to engage in industries of this description. Amongst all the great constitutional authorities, opinion seems to be about equally divided.
– No; there have been no opinions given against this.
– There have been no opinions given in favour of it.
– On the general question, as I said, opinion seems to be pretty evenly divided. That we have the power to engage in industries for our own purposes is, I think, undoubted. But I want to put another point, and that is that in the very near future we hope to have our own Federal territory, and if honorable senators opposite get their way it will be in the Yass-Canberra district, with a railway to a Federal port at Jervis Bay. What ever doubt any constitutional authority may have as to our power to engage in industries in State territory, I do not think that any constitutional authority will hold for a moment that we shall not have power to engage in any industry we like in our own territory, because there we shall be absolutely supreme. If Jervis Bay is a superior port, as some honorable senators seem to think, we might find there an ideal site for Commonwealth ironworks. We could buy the ironworks at Lithgow, and shift the plant to Jervis Bay. In the ultimate we have the power to force the position.
– What sort of industries does the honorable senator think we could carry on in Federal territory ?
– On our own territory, we would possess every right which the States now possess in their territories.
– Does the honorable senator think that we shall be emancipated from the Constitution?
– No State laws will apply in the Federal Territory.
– Does not the honorable senator think that in the Federal Territory every man will be a law unto himself, emancipated?
– We shall have to enact laws for the government of the Federal Territory just as though it were a separate State. We shall not have to adopt any State laws, but within the Territory we shall have every liberty that any State has.
– Does the honorable senator think that it will be a New Utopia - perhaps a New Jerusalem ?
– I believe that if the Commonwealth were wisely governed, we should approach much nearer to the ideal Utopia than we have yet arrived at in any State. Otherwise, what is the good of having the experience of the whole world, including the other States, to guide us?
– Hoskins and Company are getting nearer to Utopia with this Bill.
– It seems to be very objectionable to honorable senators opposite that we should have the right to do anything in our own territory. In fact, they want it to be under the thumb of the States, just as they want the Commonwealth to be now.
– No ; but we plead guilty to thinking that it will be under the Commonwealth Constitution.
– Undoubtedly, but what will bind us in regard to our territory?
– The Constitution, of course.
– Shall we be bound to accept State laws in regard to criminal matters in our territory?
– No; cheer up.
– Shall we be bound to accept State laws in regard to any particular matter which the honorable senator can imagine in our territory?
– Does the honorable senator think that the Customs Tariff will apply there?
– Of course it will, because that is a matter of Australian concern. In the Commonwealth territory we shall be as free to do everything we please as the State Governments are within their jurisdictions at the present time.
– Undoubtedly we shall be. I should like the honorable senator to mention one single matter of State jurisdiction that we should be compelled to adopt in regard to the government of the Federal Territory. Not one. If we had to apply particular laws of any State to the Territory, to which State should we turn ? Because we were in New South Wales, should we be compelled to adopt its laws on matters of State jurisdiction in regard to the Territory?
– For instance, in regard to mining or education.
– Exactly. In regard to every such matter the Commonwealth will be supreme.
– No State will have any control over the Federal Territory, and. for that reason, I hold that it is wise to put in this Bill a provision which will enable us to force the position by-and-by when the people of Australia have made up their minds that it is wise to nationalize this industry. Assuming that we get that right, the amendment will give us the power by-and-by to take over the industry, and make it a national one. As a Labour man and Socialist, I am strongly in favour of nationalization. If I did not think that at some future time the people would be able to take over the industry, and work it’ for their benefit, I should not be found supporting the Bill, as I do not believe in applying very large sums of public money in bolstering up the interests of. private individuals. I want to be sure that the people will have the right to take over the industry and nationalize it when they have made up their minds on the subject.
– In any circumstances, will they not have that right if they have the power?
– We cannot nationalize an industry unless it is already in existence. That is why I am in favour of the Bill, and also of the proposal which it contains for the nationalization of the iron industry.
– I am strongly opposed to the principle that is embodied in this clause. Why should a manufacturer be bound to enter into a bond with the Government that he will dispose of his land’s, buildings, premises, machinery, plant and equipment, if required to do so within twelve months after the expiry of the bounty?
– He need not accept the bounty, and then he will not be bound in that way.
– Under this clause, if he makes a success of his business, the Government may say to him. “ You must hand over your business to us,”” but if he does not make a success of it, he will be at liberty to keep it.
– The honorable senator supported that principle in connexion with the cancelled mail contract.
– No. I intend to vote against the clause.
– In moving the second reading of this Bill the Minister of Defence explained’ that under the Constitution we have “ incidental “ power to nationalize an industry. May I point out that “ incidental “ and “ implied “ powers are very much one and’ the same thing. The doctrine of incidental. and implied powers rests upon a well-known legal maxim which was quoted in the case of D’ Emden v. Pedder, and which was explained very lucidly by the Chief Justice of the High Court, who said -
It means, in other words, when any power of control is expressly granted, there is included in the grant to the full extent of the capacity of the grantor, and without special mention, every power and every control the denial of which would render the grant itself ineffective.
That is the meaning of ‘ ‘ incidental ‘ ‘ or “ implied “ powers under the Constitution, and if that definition be kept in mind it may serve to correct misconception - and if the Minister of Defence will permit me to say so - misinterpretation from a- legal stand-point of the term ‘ 1 incidental powers.” I specially invite the honorable gentleman’s attention to the position which may be created under this clause of the Bill.- Let us suppose that a manufacturer of iron has obtained from the Government bounty to the extent of £15,000 in any year, and that the Commonwealth does not take over the industry. Let us further suppose that outside creditors have security upon his[ works to the extent of an additional £15,000, and that after receiving the bounty, the manufacturer - finding that he cannot continue to carry on operations - files his schedule. Does the Minister contend that the Commonwealth, as the secured creditor, could take over all the buildings and plant belonging to the manufacturer as against the other creditors?
– Under this clause the Government could take over the plant and buildings quite irrespective of other creditors, who would hold their bills of sale and mortgages subject to the terms of this Bill.
– The matter is one of law. Personally I am inclined to think that this clause is intended to secure the position to which I have already directed attention. If that be so, the Commonwealth could not step in and say that because it had advanced the manufacturer £15,000, and because of the terms of this Bill, it could take over the whole of his property, irrespective off the claims of outside creditors.
– The only question involved is one of value.
– All that the Government could do would be to enforce payment of the bond.
– If my view be a sound one, it throws considerable doubt upon the wisdom of nationalizing this industry. Probably if the provision be inserted, it will ultimately be found to be unconstitutional.
– I am opposed both to the amendment and to the clause itself. I do not believe in either the Commonwealth or the States undertaking the nationalization of industries. Industrial operations, I think, should be left to private enterprise, and for that reason I shall vote both against the amendment and the clause.
– I was not previously aware that this was the proper place to discuss the question of the constitutionality or otherwise of this measure. Yet that is what is being done. As a layman, I think - seeing that we have reasonable legal advice that the proposal of the Government is constitutional - it would be well for the Committee to accept it and leave it 4pen to any person who may so desire to test its constitutionality. I shall support the clause upon the ground that it means taking the first step towards placing the iron industry upon a firmer and more satisfactory basis. I should like to show the Committee how the consumers of iron all the world over are in the hands of a few big corporations. I hold in my hand a book upon the hon industry, which was written by Mr. Stephen Jeans. He shows very clearly that in the United States the steel corporation which controls about 270 different steel and iron manufacturing plants, employs about 160,000 workmen, and has a capital of £300,000,000. He continues -
The German Steel Syndicate, which embraces all but 10 per cent, of the great steel manufacturing plants of Germany, employs nearly 50,000 workmen and controls the production of 7,000,000 tons of steel annually.
The third great combine in the iron industry is the International Rail Syndicate, which has its head-quarters in London and is carried on to prevent the- cutting of prices as between the manufacturers of rails in the United Kingdom, Germany, and the United States.
I particularly request the attention of Senator Findley to the operations of this latest addition to world-wide corporations. By his action the honorable senator is endeavouring to place the consumers of rails in the Commonwealth - that is the several
States Governments - in the hands of this corporation, which has its head-quarters in
– If I had my way the industry would be nationalized, and rails would be cheaper than they are.
– We are not yet satisfied that a combine will be brought into existence in the iron industry in Australia. The large companies which are operating in Germany, the United States, and England, may establish branch works here, and if we do not facilitate the passing of this measure, and enable the Government to take possession of the industry, after it has been established, they may keep the users of iron as much in their grip as are the users of that commodity in ‘the countries to which I have referred. To prevent that sort of thing I shall heartily support the clause.
– I am really surprised at the opposition which has been evinced to the clause now under consideration, seeing that Parliament, in 1906, approved of a similar principle in connexion with the mail contract which was entered into with Messrs. James Laing and Company. That contract provided -
The Postmaster-General may at any time during the continuance of the contract purchase any or all of the mail steamers at a valuation, or may charter the same at a rate of hire to be agreed upon by the contractor, &c, &c.
If that provision had been unconstitutional, I do not believe that Messrs. James Laing and Company would have paid to the Commonwealth the sum of ,£17,000 for breach of the agreement.
– Part of the contract may have been legal, and part of it illegal.
– If part of it had been illegal, the Commonwealth would not have recovered the amount of the contractors’ deposit. Those honorable senators who supported the contract which was made with Messrs. James Laing and Company agreed to the Commonwealth entering into trade and commerce, because it was not proposed to take over the mail steamers exclusively for the purpose of carrying mails.
– No. We inserted in the contract provision in regard to the freezing space to be provided.
– That is so. If that provision was constitutional, then the proposal under consideration is constitutional.
– Because the provision in the mail contract was not challenged the honorable senator argues that it is constitutional.
– I am certain that Messrs. James Laing and Company would not have parted with £[17,000 if the provision had been unconstitutional. Parliament in good faith entered into that contract, and no objection was raised to it. In this case we are saying to the manufacturers, “ We will enter into a contract with you, and if you supply pig and bai iron to the people of Australia we will give you a subsidy;” just as in the other case we said to the contractors, “ If you carry our mails we will give you a subsidy.” If we had taken over the mail steamers, we should not have kept them for carrying mails only. We should have entered into trade and commerce, just as we should do if we took over the Lithgow ironworks.
– Why should we not? We have power under the Constitution to do so.
– That power is only in regard to regulation.
– I hold that there is absolutely no difference in the legal position between the two cases, and that honorable senators who agreed to the Laang mail contract cannot consistently dissent from the proposition before the Committee.
– I feel very strongly upon this clause. The iron industry is pre-eminently one that should be nationalized if any industry should be. There is a growing, feeling that a number of industries should be nationalized. I do not think that we should be out of accord with the general feeling if we were to adopt that course. I know that there are many honorable senators who look upon the State management and State control of industries, in competition with private enterprise, as baneful. I am not one of those. The whole object of trade - the whole object of our civilization, indeed - is to secure the best interests of all the citizens from every point of view. If it appeared that the best interests of the citizens would be served by the State undertaking commercial concerns, it would be desirable to undertake them. The question is whether the Commonwealth can, under the Constitution, nationalize the iron or any other industry. It is, I admit, an extremely doubtful point. Personally, I am inclined to the opinion that the Commonwealth could not merely nationalize the iron industry for the purposes of defence, telegraph and telephone construction, railways and ship building, but that we could dispose of the surplus. Our power, indeed, covers the whole area of production and of distribution in this particular industry. Some persons have urged that when the Commonwealth enters into its own territory it can do whatever it likes there. I venture to say in answer to that argument, that being within our own territory will not in the slightest degree free us from the effects of the Constitution. We shall be bound by the Constitution. Further, we shall, to some extent, be on New South Wales territory, and shall be subject to New South Wales law for some purposes just as we are subject to Victorian law when sitting in Melbourne. 1 urge upon those who are opposed to nationalization that it would be desirable for them to vote for this clause, because the possibilities of carrying the Bill would be prejudiced by altering it. If we have not the power under the Constitution, the carrying of this provision will do no harm, because whenever the power is tested, the Commonwealth will not be permitted lo nationalize.
– We should have to test the point at the expense of thousands of pounds.
– Suppose that the expense amounted to many thousands, and I do not think it would -
– The money would still be in Australia, would it not?
– That is not the point I was going to urge. The iron industry is of - such importance that it is worth while to take a little risk in connexion with such a matter. Senator Guthrie has told us, on the authority of the Statist, that last year over £4,000,000 worth of iron was imported into Australia. If, by any means, we could achieve the establishment of the iron industry, and spend that amount of money in the country, that would more than compensate for whatever little expenditure may be involved in testing the validity of the measure. I am not anxious to contribute to High Court appeals against Federal legislation. I quite agree that- when we are perfectly sure that a proposed course is unconstitutional, it would not only be unwise, but wrong and immoral, to proceed in that direction. But when there is a substantial doubt, even among lawyers, we should do what seems to us to be best in the interests of Australia, and leave the Act which we pass to be tested in the future.
– I have had to-night a lesson such as, I suppose, every Minister has to go through, as to the necessity of sitting still under somewhat trying circumstances.
– The honorable senator is getting his baptism early.
– One of the most extraordinary speeches in attack that T have ever heard of a Minister having to submit to was that delivered by Senator Findley. A few days ago the honorable senator wanted to proceed straight out to nationalize the iron industry. He wanted to have no delay or short cut. “ Do it at once,” he said. He threw out several innuendoes regarding myself and others because we wanted to proceed by a short cut. He gave us no credit for sincerity, but, on the other hand, attributed all sorts of motives to us on the ground of insincerity. But to-night, when we give him an opportunity of providing machinery by which a future Parliament, elected by the people of Australia, may proceed to nationalize the iron industry, and make it the property of the people, the most virulent opponent of the proposition, and the one who has attacked it most eagerly, is the very gentleman who wanted to take a short cut a few days ago.
– I said that the proposition was a mere make-believe, because, on the Minister’s own statement, we could nationalize the industry to-morrow.
– If the proposition were a mere make-believe, I should not be here supporting it. Therefore, the honorable senator does not give ice much credit for sincerity. I expect to receive that kin-‘ of treatment from those directly opposed to us in politics, but it comes with very bad grace from one who, as I have said, was a few days ago demanding short cuts.
– I want no short cuts.
– The honorable senator now wants to prevent us leaving. the gate unlocked for the advantage of those who will come the long way round. We want to leave the gate unlocked, so that if, during the term of this Bill, a Parliament is elected that is in favour of nationalization, it may proceed in that direction. It is not a question of the Labour Party, or of the present Government wanting to do something. The question remains with the people of Australia. The Bill now before us does not propose to nationalize the industry, or to take a single step towards it. The people of Australia can, however, elect a Parliament that is willing to do that ifthey choose. If they so determine, this Bill leaves the gate unlocked; the machinery is provided, and the necessary steps can be taken. But Senator Findley is not prepared to leave the gate unlocked.
– That is not correct.
– His position is a most inconsistent one.
– Would this obligation on the recipients of the bounty terminate in five years ?
– The Act would remain, although the payments would extend over five years.
-No, the honorable senator is mistaken. The provisions of the Bill have only a six years’ term, and if the people of Australia within that term do not elect a Parliament, the majority of the members of which are prepared to exercise the power contained in the Bill, it will not be exercised. Those honorable senators who do not believe in nationalization ought not to object to leave the permissive power in the Bill to be exercised by the people of Australia as they think fit. Even those who oppose nationalization claim to be democrats, and are prepared to accept the will of the people. They must recognise that the machinery contained in the Bill can never be utilized unless a Parliament is elected by the people for the purpose of exercising it.
– The Minister cannot seriously ask us to put in the Bill what we believe to be unconstitutional.
– Honorable senators opposite have repeatedly admitted that they believe that the Commonwealth Government possesses powers incidental to its express powers.
– Not power to take over a commercial concern.
- Senator Best put that view very clearly, and his argument was received with approving cheers from honorable senators all round the chamber. I am going no further than Senator Best did. Senator Best and Senator Keating are hostile to the proposition, judging from their remarks. But they themselves fathered an exactly similar proposal in connexion with the mail contract.
– In another place the late Government opposed the provision to which the honorable senator refers.
– In paragraph 36, page 9, of the conditions of contract, there was this provision -
The Postmaster-General may at any timeduring the continuance of the contract purchase any or all of the mail ships at a valuation.
– Exactly, but that is a totally different matter.
– It is exactly the same thing.
– That was for a postal service.
– “ And matters incidental thereto.” I ask honorable senators to give us the same power in connexion with the iron industry, for defence purposes, and matters incidental thereto. i am putting this proposition on exactly the same grounds as those on which Senator Best submitted the proposition to which I have referred in the mail contract. Honorable senators know very well that it was never proposed, and that no one ever contemplated that we should have mail steamers running between Australia and England for the purpose only of carrying mails.
– No; but we have other powers under the Constitution.
– I have pointed out that we have other powers under the Constitution to carry out which it would be of advantage to the Commonwealth to control the iron industry. I refer to our powers in connexion with telegraphs, and the construction of railways.
– But we have the most absolute powers as regards trade and commerce.
– Senator Keating knows as well as any member of the Committee that it has been continually laid down in American law cases that the trade and commerce powers, under the American
Constitution, refer only to police powers.
– I beg the honorable senator’s pardon.
– And that it has been laid down time and time again that the power to regulate trade and commerce does not extend to the power of ownership. So the honorable senator cannot shelter himself behind that position. When Senators Best and Keating, on behalf of the Government of which they were members, submitted that proposal in connexion with the purchase of the mail steamers, they did not raise the constitutional question. They were not then frightened by thu bogy that the constitutional power given 11s was not an absolute power. They did not then care whether it was an expressed’ or an implied power. They said that some future Parliament might desire to take over the mail steamers, that they did not themselves propose to nationalize them, but would provide machinery in the contract for their nationalization, if at any time that should be considered advisable. That is all we are asking for in this instance. We ask Senators Best and Keating, and those who supported them in carry - ing the condition in the mail contract 10 which I have referred, how they can justify their hostility to the proposal now made by the Government? I contend that the argument that we have not the expressed power might have been applied with equal force in objecting to the condition to which I have referred in the mail contract. We have not the expressed power under the Constitution to carry frozen meat, or other produce, or to carry passengers. But in the mail contract we laid down the conditions covering all those services, and provided for refrigerated space, and that the vessels should be run at a certain speed. We provided not only for everything incidental to the successful carrying out of a mail contract, but for the carriage of produce and passengers. I again put it to the Committee that byinserting the words I have proposed, they will not be committing themselves to the nationalization of the iron industry.
– The honorable senator would not say that on the platform if we voted for the amendment.
– I would. I did not charge those who voted for the provision in the mail contract with being in favour of the nationalization of the mail steamers. As a matter of fact, when Senator Henderson submitted his motion for national mail steamers, many honorable senators who voted for the mail contract, voted against that morion. They were perfectly consistent in opposing the nationalization of mail steamers, and at the same time supporting a provision for the purchase of mail steamers by the Commonwealth under the mail contract. In the same way, it would not be inconsistent for honorable senators to insert a provision for the taking over of the iron industry by the Commonwealth, and then to oppose a proposal of the kind when it was submitted. Let me say that if honorable senators desire to carry this Bill, they will be well-advised in agreeing to the amendment.
– Is not this an amendment upon the Bill as it passed another place ?
– It is an amendment which the late Government opposed in another place.
– It is true that I am proposing an amendment on the Bill as it was passed by another place, but I have good reason to believe that the amendment, ve adopted here, will be accepted by another place. I have good reason also to believe that if the amendment is not agreed to there will be some difficulty in getting the Bill through its third reading. Seeing that the Committee is not being asked to nationalize the industry, I appeal to honorable senators to agree to give the permissive power I ask for, as they have agreed to give such a power in a number of other instances.
– We deny the parallel.
– The honorable senator may deny it, but I do not think he can prove that it is not a parallel. I again ask the Committee to accept the amendment.
– I did not propose to address myself to the amendment, because I assumed that it was the general desire of honorable senators that the debate should be as brief as possible, nor should I have addressed myself to it at this stage were it not for the fact that the Minister, when speaking just now, attributed to Senator Best and myself an attitude with regard to what he considers to be a similar provision which the late Government submitted in this Chamber, which I do not think should be allowed to pass without some criticism. The Minister, and before him, Senator Guthrie, endeavoured to put before the Committee as a parallel a provision contained in the
Laing mail contract submitted to the Senate by the last Government. The contract provided that it should be competent for the Postmaster-General in certain circumstances to take over the mail steamers from the contractors at a fair valuation. Senator Guthrie very pertinently, as it might appear, asked whether if the Government took over the mail steamers they would use them for mail purposes only, or for mail purposes and purposes incidental thereto. Answering himself, the honorable senator pointed out that it would obviously have been impracticable for the Government to have used them only for the carriage of mails, and that they must necessarily have entered into the business of carrying freight and also passengers. I had no authorities beside me at the time, but I pointed out by way of interjection that we have power under the Constitution to legislate for the peace, order, and good government of the Commonwealth with, respect to trade and commerce with other countries and among the States. We have power under a later sub-section of section 51 to legislate with regard to immigration and emigration. So far as the Dominion of Canada and the United States are concerned, the corresponding powers given to the Federal authorities are not to make laws for the peace, order, and good government of the Commonwealth, but to regulate trade and commerce. Without looking up the more recent authorities, which are to be found in the text-books written specially upon the commerce sections of those Constitutions, and1 which go to show the extensive interpretation applied to them bv the Supreme Court of the United States, T shall refer honorable senators only to Quick and Garran. This work was published some time before the first Federal session, and at page 517, in dealing with the subject of trade and commerce, provided for in sub-section 1 of section 51. and under the heading “ Transportation,” Quick and Garran say -
Federal control over the transportation of commerce embraces every agency employed in the movement of commerce by land or by water, such as roads, stage coaches, railways, bridges, ships, navigable waters, ports and harbors. All these are means or instruments by or through which the subjects of commerce are transferred in order to facilitate exchange and intercourse.
They go on to say -
Accordingly it has been decided in the United States that the Federal power over commerce gives the Federal legislature authority -
To establish or authorize the establishment of a bridge which obstructs the navigation of a river, or to order the removal of such a bridge, if its removal is necessary for the preservation of the freedom of commerce.
Then the authorities are stated -
To regulate boats carrying inter-State freight and passengers between two points within the same State.
To establish telegraph companies, authorized to carry on inter-State telegraphic business.
That is included, though there is no direct authority with respect to the establishment of telegraphs at all, and under their powers, of regulating trade and commerce, they have not the absolute and comparatively untrammelled powers that we have. So I say that if the mail boats were to fall intothe hands of the Postmaster-General, and became the property of the Commonwealth foi the purpose of transporting mails, and incidentally for purposes immediately allied thereto, the general power over trade and commerce possessed by the Federal Parliament would have invested it with authority to regulate the carrying of freight upon those boats.
– Full nationalization if we desired it.
– Exactly, in such contingency.
– Might I say that the primary purpose would be the carriage of the mails, and the carriage of produce would be subsidiary.
– Yes ; but having obtained the boats for the carriage of mails, the. trade and commerce provisions of the” Constitution, even if they did not directly empower the Commonwealth to acquirethe boats for trade and commerce purposes, would come in aid, and would enable the Federal authorities to use those boats for trade and commerce ; and so also with the immigration and emigration powers. I do not approach the consideration of this question with any feeling whatever I am pointing out these matters because these were circumstances which were considered,, and necessarily had’ to be considered, before such a provision as that to which Senator Pearce has referred was included in the contract. It was not included in an idle moment, as a mere afterthought or for the purpose of securing a number of votes, but the whole of the circumstances surrounding’ the possibilities of giving effect to such a. provision had been fully and thoroughly considered by the Government before thecontract was submitted. I refer to thesematters to show the Minister of Defence that he has not instituted an exact parallel.
– The honorable senator has proved to my satisfaction that I have.
– The honorable senator has made a very good speech in support of the Government proposal.
– Under the clause of the mail contract referred to, would not the Commonwealth have been established as a common carrier carrying passengers and merchandise ?
– I am not prepared to say that it would.
– Would it have run the ships for the carriage of the mails alone?
– I have already pointed out that if the ships had been acquired by the Commonwealth, for the purpose of the mail service, the trade and commerce provisions of the Constitution, even though they had not the inherent strength to endow the Parliament with the right to acquire the mail ships for that purpose, would endow the Parliament with the right to use them also for trade and commerce purposes once properly acquired for postal purposes. Senator de Largie has said that I have made a good speech in support of the Government proposal. I point out to the honorable senator that authoritative opinions already given as to the powers of the Commonwealth to nationalize industries go so far as to say that for the purpose of carrying out the powers with which the Commonwealth is directly invested, we have the power to engage in this industry. The only illustrations given so far have been defence, the Post and Telegraph Department, and, possibly, a Department of Commonwealth railways. I do not for a moment say that these exhaust all the possibilities, but I do say that if that legal opinion is to be regarded as authoritative and correct, our power to nationalize this industry is limited absolutely by our requirements and our obligations. If it is then we could only nationalize this industry to that particular extent, and if any manufacturer of the articles specified in the schedule went beyond that limit under this clause, we could ask him to transfer his business to us, but in so far as it exceeded the requirements of our obligations under the Constitution we should have to drop it. That is where I join issue with those who are supporting the amendment. It could only carry us up to that extent. It could only enable us under certain circumstances to nationalize the industry of possibly the smallest manufacturer, because he would be the only one who would be manufacturing within limits which would be commensurate with our possibilities in the way of nationalization. Therefore it seems to me that to a large extent it is - I will not say throwing dust in the eyes of the people - misleading. We have on the other hand an undoubted assurance that each State can nationalize the business of any single iron manufacturer or the businesses of all the manufacturers within its borders, and so it is proposed to make provision that this bond shall be given in respect to those possibilities. I ask the Minister why he should want to go farther? According to the authoritative opinions which have been given on this subject - not in the heat of party conflict, but for the purpose of a Commission composed of representatives of different parties who were inquiring most carefully and impartially into this very important question - we cannot place the Commonwealth and the States on the same plane.
– And yet the Commission did.
– Yet if this provision is made, it will be quite possible, that it will be understood generally that the Commonwealth and the States stand on the same plane.
– Yet the three lawyers on that Commission did put the Commonwealth on an equal footing with the States.
– No, I do not think that my honorable friend has put the correct interpretation on their words.
– They recommended that provision should be made in the Bill.
– The only objection I have to the amendment is that it professes to place the Commonwealth and the States on the same plane, as though each were equally competent to acquire an interest in the industry and to a like extent. I hope that my honorable friend will see that there is some reason for difference, and, if he wishes to persevere with some amendment which will endow the Commonwealth directly with the means of taking over the industry to the extent that it constitutionally may, he should submit a separate provision which will clearly indicate that so far as we have gone we have accepted the position that the Commonwealth and the States in this regard have not like powers.
.- Senator Keating has put the position that the States and the Commonwealth do not possess equal powers with regard to the nationalization of the iron industry if the people of Australia should deem it necessary and desirable to nationalize it at some future time, and seeing that a provision already exists in the Bill to enable the States to take over the industry he asks why we should go farther and proceed to give to the Commonwealth the power, which he contends it does not possess now. The necessity for going farther is at once apparent when’ it is mentioned that in previous cases this Parliament offered large monetary assistance provided that any State would undertake the industry. So far, the States have absolutely refused to touch it. If this Parliament, representing the whole of the people of the Commonwealth and not a particular Slate, desires that this thing should be done, undoubtedly it is necessary and desirable that we should give to ourselves the power to do it.
– How can we give to ourselves the power ?
– The people of Australia have unlimited power if they will only make up their minds to utilize it.
– The honorable senator wants to take the power without asking the people for it.
– I propose, before I resume my seat, to show that ultimately we have absolute and complete power under the Constitution. I contend that Senator Keating’s argument went entirely to prove quite the opposite to that which he said he proved. He pointed out that in the Laing mail contract the late Government inserted a clause enabling the Commonwealth to nationalize the mail steamers, and the consequent carrying of goods and passengers. He said that that was necessary as a guarantee of the contract and as something incidental thereto. If that contention be correct - and I do not doubt it for a moment - then undoubtedly the present proposition is exactly on all fours because, according to his own admission, we could nationalize as much of the industry as is necessary for our purpose, .and do as the late Government proposed to do in that contract. We could utilize the remainder of the product as something incidental to manufactures for our own purposes. The two things are exactly on all-fours.
– No; that is trade and commerce.
– If halfadozen such industries were started, perhaps in different States, unless we have the power- of prohibition, which we have not, this would be useless.
– I should not care very much for the power of prohibition. That would not concern me at all. I am quite satisfied that if the Commonwealth had the power, and undertook the work, it: would be able to run off every competitor within its borders, because there would be eliminated at once the element of profit.. Of course, once we had an ironworks established every State could establish another ironworks as every private individual could do. If they did ruin the Commonwealth ironworks they could only do so by supplying the iron at less than cost price, and the people who bought it would have.the money in their pockets all the same.
– The honorablesenator is an economic dreamer.
– That is a fact which is capable of demonstration. A privateindividual could only run off the Commonwealth ironworks by selling iron morecheaply, and the people of the Commonwealth would get the extra money it cost the private ironworks returned to them inthe cheaper price. The element of profit, would be eliminated, and no private individual can carry on a business withouttaking that into consideration, and he generally wants a very- good margin, too. Inmy previous speech I said-‘ that in theultimate we could start, and do anything we liked in our Federal Territory. The only honorable senator whom- I heard tryseriously to combat that view was Senator Trenwith, who in his usual- know-all stylegot up to say that I was entirely wrong, without giving a single reason or argument in support of his contention, and, in hisusual style, as soon as he had voiced his dictum, he walked out of the chamber. What does the Constitution say on this matter? The language of section 52 isvery plain. It reads as follows -
The Parliament shall, subject to this Constitution, have exclusive power to make lawsfor the peace, order, and good government of the Commonwealth with respect to -
The seat of government of the Commonwealth, and all places acquiredby the Commonwealth- for public purposes.
That section confers upon this Parliament exclusive power to make laws, and the application of the word “ laws “ is not limited by the thirty-nine articles of legislative power in the previous section. It means every law which is necessary for the peace, order, and good government of the Federal Territory. Senator Trenwith went so far as to say that the laws of New South Wales would apply to everything which was not specifically transferred to the Commonwealth by the Constitution with respect to all the other States. He said that the State laws would apply with regard to education, mining, lands, and a thousand and one other things with which it has to deal. I think that section 52 of the Constitution absolutely disposes of that particular argument, because it confers upon this Parliament exclusive power to make laws - that is all laws - with respect to territories placed under its control. If we turn to section 122, we find that -
The Parliament may make laws for the government of any territory surrendered by any State to and accepted by the Commonwealth, or of any territory placed by the Queen under the authority of and accepted by the Commonwealth, or otherwise acquired by the Commonwealth, and may allow the representation of such territory in either House of the Parliament to the extent and on the terms which it thinks fit.
It reiterates the power of Parliament to make laws for any acquired territory.
– For its government.
– It empowers this Parliament not to make a few laws on the subjects mentioned in section 51, but to make laws in regard to territories ceded to or acquired by or granted to the Commonwealth.
– No, to make laws for the government of the territory.
– Was a law ever made for any purpose but the government of a country? The whole essence of government is making laws. We could delegate our right to govern the Federal Territory to a body to be elected by the residents. Will Senator Best deny that we could create a little local Parliament, and endow it with specific powers to be exercised within the Territory?
– That is what has been done in other Federal Territories.
– If we can take that step we must have the power before we can transfer it. I hold that in regard to the Federal Territory we shall be absolutely supreme. Suppose that the Seat of Government Bill, which I believe is being considered elsewhere, is passed, we might find that there is not a more suitable place in the Commonwealth than Jervis Bay for the establishment of an iron industry. We should have there facilities for assembling all the ores, fluxes, and fuel that would be required. That being so, why should we not in this Bill give to ourselves the right to do that when we think fit? The Minister has shown that on previous occasions the Senate has assented to a similar provision in other Bills. If it was a good thing to do so in one case, why should it refrain from doing so in this case? Of course, Senator Vardon says that he is against the Government undertaking anything of the kind, and is all in favour of private enterprise. Would he like to revert to the old days when private enterprise made the roads, put up toll bars, and charged people a toll for the right to travel? Does he not think that it is infinitely better for the people to make their own roads?
– The people have been progressing without nationalizing industries, and so they will continue to do.
– Does the honorable senator believe in State education rather than private education ; in public telegraphs and telephones, instead of privatelyowned ones as in America?
– They are altogether different, and so are railways. I believe in giving every encouragement to private enterprise.
– I cannot find any finer example of private enterprise anywhere than in the whole people of a country combining to carry on a great public enterprise which is for the public good, and in which every individual will share. That is my idea of the grandest type of enterprise that we can have. But the honorable senator desires to set up a form of private enterprise which shall have the right to fleece every member of the community. I submit that my ideal is a far nobler one than is that of the honorable senator. I trust that the amendment will be carried. Without it, the Bill will be worth very little.
– I am afraid that the advocates of private enterprise have a very poor case when they are driven to raise that cryin connexion with a Bill of this kind. If they believe that private enterprise is the proper thing, they should insist upon private enterprise providing the money for the establishment of this industry, instead of seeking it at the hands of the taxpayers <of Australia. Senator Vardon has voted io bolster up a private concern with public money, whilst, at the same time, emphasizing the virtues of private enterprise. The -position is so obviously a contradictory one that I am surprised that such an intelligent man sshould be found occupying it.
– Everything is ridiculous eexcept that which the honorable senator advocates.
– A great many 1 of the honorable senator’s ideas are ridiculous. Anybody who can extol the virtues of private enterprise in connexion with an industry which has to be bolstered mp with public funds-
– Then why does the I honorable senator talk about protection?
– There is a vast difference (between- imposing a duty upon an article for protective purposes and taking money .out of the consolidated revenue :to hand ,it over to a private company. In reply to the remarks pf Senator Keatling, I desire to point out that, in respect of 1 this particular industry, the Commonwealth is not confined to the narrow limits which he has suggested. If we ‘are willing to hand over the iron industry to the States, why should the power of acquisition be denied to the Commonwealth?
– The States already possess that power.
– They have no more power in (hat connexion than has the Commonwealth.
– Any State _ could pass legislation, to enable it to nationalize the iron industry without, consulting this Parliament.
– But, in that case, it -would have to find the money for the purpose, instead of the Commonwealth. Why are honorable senators willing to intrust the States with power to nationalize the iron industry but unwilling to vest a similar power in the Commonwealth? It is because they know that, so long as there are Legislative Councils in the various States, which are the fortresses of conser vatism, so long will there be no attempt made to nationalize the industry. They recognise that the same safeguard does not exist in respect of the Commonwealth Parliament. They realize that here there is nothing to prevent the will of the people prevailing. Those honorable senators whohave taken up the attitude which I have outlined are not too loyal to this Parliament. Certainly, their action does not reflect very much credit upon it. I hold that there- are certain passages in Mr. Deakin’s opinion which make it perfectly clear that the Commonwealth is not’ confined to the narrow limits suggested by Senator Keating, and that there is nothing to prevent it nationalizing the iron industry and supplying outside customers if it wished to do so. The Constitution imposes no limit whatever on our power in, that connexion. We are at liberty to supply any manufacturer or boilermaker throughout the Commonwealth. From that point of view, I hold that the remarks of Senator Keating were based upon a fallacy. What would be the position if this industry were nationalized by the Government of New South Wales? I presume that it would desire to supply the whole Australian market, and to that end would require protection. Thus, there would be created a monopoly owned by a State Government which would have at its mercy every other State Government in Australia. We have only to recollect how an exPremier of New South Wales defied the Commonwealth by seizing a quantity of wire netting from the Customs authorities to imagine how that State might play up under such circumstances.
– That is a very good reason why the industry should not be handed over either to the States or the Commonwealth.
– It is a very good reason why it should not be handed over to the States, but it is an excellent reason why it should be under the control of the Commonwealth Parliament, in which all the States are represented. By that means, justice would be insured to every State. If the industry -were in the hands of one State only, how could we insist upon fair play being extended to the other States ?
– Another State might also engage in the industry.
– How could Western Australia or South Australia embark upon the iron industry, seeing that iron cannot be produced without coal ? I maintain that, in the best interests of the States, the Commonwealth should have power to take over this industry. I advise honorable senators from New South Wales, in the best interests of the iron industry, not to vote against the amendment. I can assure them that they will be acting in the best interests of their own State by supporting the proposal of the Government. I need scarcely remind them that if that proposal be not carried, the Government may refuse to proceed with the Bill. Thus, those who are so anxious to defeat the Government need to be very careful that they do not bite off more than they can masticate.
– In supporting the amendment, I wish to compliment my friends of the Opposition upon the undoubted victory which they are about to secure in connexion with this Bill. I wish also to say to my friends in the Labour camp that they surely must have realized by this time how readily the principles that they have espoused for years and years have, in substance, been cast aside, in order to enable the shadow to be grasped. It matters absolutely nothing to the people connected with the iron industry whether the amendment goes into the Bill, or whether it does not. Their position is precisely the same in either case. But it does matter to those members of the Senate who, ever since I have been a member of it, have raised their voices in defence of the principle of the nationalization of industries. The present Government have simply brought before us a relic of bygone days.
– Is that how the honorable senator describes the Deakin Government?
– That is how I describe them, so far as their iron bounty proposition is concerned. The Government have joined forces with the freetraders in gassing the second reading of the measure, and now they glorify themselves upon the fact that £1 50,000 is to be devoted to build up a private enterprise. We may limit the proposition still further, and say that it is simply for the purpose of building up a private enterprise in New South Wales. I do not blame the New South Wales free-traders for their eagerness.
– When New South Wales was asked to support the iron, industry before Federation the State Government would not do it.
– I have nothing to say against the New South Wales free-traders for joining hand-in-hand with protectionists and Socialists in support of the Bill. It is natural that they should do their utmost to get , £150,000 from the Commonwealth Government for the purpose of building up good, old, glorious private enterprise in their State. They have a perfect right to be satisfied with themselves. Nor am I astonished at the attitude of Senator Symon, Senator Keating, and Senator Best. If a lawyer has any place in life at all, it is his object to make every other man believe that he is a fool, and that the lawyer alone is a mart of wisdom.
– The honorable senator is quite mistaken. It is the lawyer’s business to make people believe that they are foolish in. going to law.
– It is the lawyer’s business to demonstrate that every other man is a fool.
– If he goes to law.
– He is a fool if he goes to a lawyer. I am not surprised to see the members of the legal profession supporting such a measure. I never came across a lawyer in my life who was not a private-enterprise man.
– They are all good unionists.
– They are also strong advocates of private enterprise, and of the most private of private enterprise - that of the lawyer himself. But I am astonished at the support given to the measure by Senator Lynch, Senator Givens, and Senator Stewart. They profess to be staunch Socialists. But look at them now ! They are allied with Senator Pulsford, Senator Walker, and Senator Symon, strong advocates of free-trade and private enterprise. Red-hot Socialists are assisting those honorable senators to pass a measure that has no other end or purpose in view than to take £150,000 out of the public purse for the purpose of distributing it over a small area of ground that is not big enough to grow cabbages for a family of five !
– I feel somewhat like a prisoner at the bar after the prosecuting counsel has delivered an impassioned harangue against him. Senator Henderson has taken it upon himself to rebuke myself and others who have seen fit to support the second reading of the Bill before the Committee. I had not an opportunity of explaining my reasons for voting for the second reading, and perhaps I may be permitted now to say why I did so. In the first place I yield to no man in my advocacy of nationalization. I am a Socialist. I believe in collectivism. I believe that the community can do things for itself much better than private enterprise can do them. But only a. minority of the people of the Commonwealth believe as I do. Therefore, at present Socialism, as I understand it, is impossible. Every one admits that the iron industry is an absolute necessity for the Commonwealth. It is the basic industry of all. It lies at the foundation of every other industry. Every other industry depends upon iron and cannot be conducted without it. It affects the production of food, the making of clothing, the building of houses, and every other requirement of social life. The iron industry is essential to the defence of the country. That being the case, being a Socialist, I am in favour of the nationalization of the industry. I have come to the conclusion that the people are very stupid in allowing an important industry of this character to remain in the hands of private individuals. But I am only one of a minority. Believing it to be indispensable that iron should be produced within our own borders, I am immediately brought up with a’ round turn. The position is, then, shall I place every obstacle within my power in the way of the establishment of the industry, because I cannot get it established in the way that I desire? That is the position that Senator Henderson takes up. But I maintain that my duty as a Labour man is to get the Labour policy carried into effect if I can, but if I cannot, then to do my best in the interests of the country in the next best manner. We must have iron. It has been proved conclusively that owing to the keenness of foreign competition it is impossible to establish the industry here without assistance from the Commonwealth Go vernment. The Government come forward with a proposition to pay a bounty to assist it. A duty has not been imposed. I presume that if the Government brought forward a proposition to impose a duty some of those who are opposing this Bill would support it. I know one, at any rate, who, if the iron industry were likely to be established in Victoria, would proclaim himself a Himalayan protectionist in its advocacy. I advocate a bounty rather than a duty. Why? In the first place, for some years to come the duty would bring in a very large amount of revenue. I do not want that revenue to be raised. I am tired of raising revenue in that fashion. I want it to be raised by some other method. Therefore I, at any rate, cast aside the idea of a duty.
– Revenue would have to be raised to pay the £150,000.
– I come backto the bounty proposition. Why all this trouble about assisting to establishthe iron industry? Who want it to be established? The people of the Commonwealth want it. It is not this private individual or the other; it is not this producer or that, it is the people of Australia who want the industry established. I say that if they regard this industry as absolutely necessary for their safety, they ought to pay for its establishment, and they can do so in no better way than by means of the proposal submitted by the Government. Then with regard to nationalization,and our apparent alliance with honorable senators on my right, I do not care with whom I ally myself if the policy, or a portion of it, in which I believe, is being carried out. It does not trouble me whether I ally myself with free-traders, conservatives, or protectionists.
– The honorable senator forgets how he lectured me.
– If they are prepared to carry out the policy in which I believe, or the nearest possible approach to it for the time being, I welcome their assistance.
– But the honorable senator would not let me do that.
– I did not prevent the honorable senator doing what he pleased. No one could hinder Senator W. Russell from taking his own course.I find that on my right there is a conspiracy to defeat the nationalization proposal in the Bill.
– A conspiracy ?
– Probably I have not used the proper word. I will say that there is a determination to defeat the nationalization proposal in the BUI. I am not astonished at that. Honorable senators on my right do not believe in nationalization, but I am going to vote for it, and’ my honorable friends who have been so ready to blame myself and’ other honorable senators for supporting this Bill ought not to find fault with us, but with the electors of the Commonwealth, who have sent a majority of representatives to the Senate who do not believe in nationalization. Why should these honorable senators vote for nationalization when they do not believe in it, and have been sent here to oppose it by every means in their power? They are doing exactly what they were, authorized by their constituents to do. That is what we are .doing ourselves. I was sent here to promote nationalization, and I am doing it, and to promote the establishment of industries, and I am trying to do that also.
– The honorable senator was not sent here to create monopolies.
– I do not know why some of mv Labour friends are so much afraid of monopolies. I welcome a monopoly - and why? Because, when an industry has been organized to such an extent as to become a monopoly, then, if the people wish to take it over, they can do so.
– It is just then in a fit condition to be taken over.
– That is so. Monopolies, instead of being the enemies of the people, to my mind are their friends. They show how industries can be organized ; they do away with competition ; they eliminate waste. It is only when they try to impose unfair and iniquitous terms upon the com.munity as a whole that they become a public danger. Then I arn prepared to deal with them. Whenever a monopoly is created, I for one will be found working and voting for its nationalization. . Let there be no mistake about that. I really’ do not see why all this fuss has been created here to-night, and why honorable senators like myself have been taunted with deviating from the Labour platform. We have done what every intelligent human being is bound to do. and does every hour of the day, and week and month in the year. We deal with circumstances as they arise before us in the best way we can. While we hold an ideal continually before our minds, we know perfectly well that every foot of the way towards it must be walked. While we see the mountain-top looming before us, we know that the mountain has to be climbed before we can reach it. We cannot balloon to the summit of our ambitions in a moment. That for us is physically impossible. I have no wish to continue the debate. I did not intend to speak at all, but when Senator Henderson became so very pointed in his allusions to myself and others as having taken a certain course in ignorance, I suppose - because I do not think any honorable senator would accuse us of violating the platform, or departing from our principles of set purpose - it was time to say something.
– If we have done so, the Labour Government has also done so.
– I am not troubled about the Government at all. They know their own business, and I think I know mine. If I cannot get just what I want, I am prepared to take as nearly what I want as I find it possible to get. I am therefore supporting this Bill, and I intend to vote for the amendment giving the Commonwealth power to nationalize the industry at a particular time. I am not going into the constitutional aspect of the question. It is one to which I have given very little consideration, and probably I am not very well -qualified to deal with it. But I will say that the Commonwealth, within a very short time I hope, expects to be a very large consumer of iron. We shall probably have ships and railways and manufactories of our own. For all these purposes we shall require large quantities of iron, and the probability, is that before the Commonwealth can under this Bill legally nationalize the iron industry, the Constitution which my honorable friends on my right are so very anxious about will have given the Commonwealth power to enter into any trade or business it pleases. I believe that the people of Australia are willing to give the Commonwealth Parliament that power. In any case, I trust that after the next general election we shall have authority to so alter the Constitution as to bring about that result. I have’ no more to say. I trust that what is best in the interests of the Commonwealth and the iron industry will be done.
Question - That the words proposed to be inserted be inserted (Senator Pearce’ s amendment) - put. The Committee divided.
Majority … … 3
Question so resolved in the negative.
Bill received from the House of Representatives, and (on motion by Senator McGregor) read a first time.
Senate adjourned at 10.26 p.m.
Cite as: Australia, Senate, Debates, 2 December 1908, viewed 22 October 2017, <http://historichansard.net/senate/1908/19081202_senate_3_48/>.