3rd Parliament · 4th Session
The President took the chair at 11 o’clock a.m., and read prayers.
Senator Colonel NEILD (New South Wales) [11. 1]. - Mr. President, I beg to draw your attention to the Votes and Proceedings of the House of Representatives and to reports in the press. Owing to orders made by the Senate on the motion of Ministers, I am, apparently, precluded from submitting a motion, and therefore I merely seek to draw your attention to the utterly unparliamentary and unconstitutional events in another place. In other words, a Bill which was sent to this Chamber has not been finally dealt with, and without waiting for a message or pursuing the customary practice in such cases of moving for a Committee to search the records of this Chamber and discover what had become of the Bill, a violent attack was made in another place on the Senate.
– Order ! The nonorable senator cannot allude to anything which has taken place in the other Chamber in words of the kind which he has just used.
– I thank you, sir, and as I wish to be strictly decorous, I shall omit the adjective. Perhaps I shall be quite correct in saying that an attack has been made on certain members of the Senate, and that in one case at least words of a very - it is impossible for me to get on without an adjective.
– Say “ rotten.”
– I shall say unusual, and I suppose that that word will not be objectionable.
– The honorable senator is not in good form this morning. He is tied up.
– I am tied up, sir, because I wish to obey the hint which you have given to me. Words are reported as having been made use of in respect of the Senate that I find a great difficulty in describing without the help of an adjective. I do not wish to use an adjective, and I therefore hope that those who hear me will supply in their own minds whatever adjective appears to them appropriate. I shall do that for myself. I think, sir, that in that way I may hope to be strictly within the bounds of your suggestion, and also to sufficiently deal with the unusual nature of the proceedings, to which I. have, with great respect, and in the interests of the Senate, to draw your attention. I do not know that it is desirable to debate the incident. ‘ I regard it, I own, as unfortunate rather than serious. Still, as we are working out a new Constitution, and as this is the first time, so far as 1 know, that such an incident has arisen, it seems to me desirable that it should not be passed over as of no consequence, and allow it to become a precedent, to be followed hereafter. Probably, sir, if you will express to the Senate your view of the appropriateness or inappropriateness of the incident, or whatever view seems to you the proper one to express, it may be placed on record that the action to which I have referred is one. with which the Senate is unable to concur, and, no doubt, is anxious that no similar incident should occur in the future.
– The Senate must, of course, feel itself in an awkward position ‘in regard to raising a question with reference to anything which has taken place in the other Chamber. That House has its own Standing Orders and its own procedure to govern its debates, and the course of action to be taken in reference to any matter which may arise where difference of opinion exists between the Chambers. It is laid down most clearly in May -
The rule that allusions to debates in the other House are out of order, prevent fruitless arguments between members of two distinct bodies who arc unable to reply to .each other, and guards against recrimination and offensive language, in the absence of the party assailed ; but it is mainly founded upon the understanding that the debates of the other House are not known, and that the House can take no notice of them.
Further on May says -
There are few orders more important than this for the conduct of debate, and for observing courtesy between the two Houses.
We have a standing order which precludes any reference to a debate or to what has taken place in another Chamber. It may assist honorable senators in dealing with a question of this kind in the future if I mention here that they are entitled “to refer to the Votes and Proceedings of the other House which are placed upon our table.
That, of course, does not give them the right to debate what has taken place in the House of Representatives or to refer to the debates therein, but it gives them a record of what has taken place there, and the record may be referred to at all times. On referring to the Votes and Proceedings for Saturday last I find the following entry -
Mr. Poynton rose in his place, and said that he proposed to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, “The present unsatisfactory position of the Northern Territory.”
On that a debate took place. We are not in a position officially to recognise what took place. The question under discussion was “The present unsatisfactory position of the Northern Territory.” It is a most unusual thing for one House to debate a Bill while it is before the other Chamber. There is a recognised method of taking action where a Bill has apparently got lost, and it is desirable to obtain some information regarding its position. But it is a most unusual thing for one House to debate a measure which has been sent to the other Chamber, and is there going through the ordinary process of discussion. I suggest, however, that the Senate will best show its independence and its dignity by refraining from referring to any speeches or references which may have been made to it elsewhere. Whatever it does it does in the light of public criticism. Action taken here at times may not be acceptable to a majority in the other Chamber - exactly as action taken there may not be acceptable to a majority here. We want each to maintain its own position, and I suggest that an attitude of dignified calmness on all matters, will add to the weight and influence of this Chamber in’ the estimation of the people.
– I rise, sir, to ask a question of privilege. I desire to know whether there is any method by . which we can insure that when papers are laid’ upon the table of the Senate the gist of their contents, or, at. any rate, an accurate account of them, shall be published in the press or the right of publication refused. The Argus of to-day purports to give the report of the Select Committee on Press Cable Service, which was presented here on Saturday. After giving a garbled and inaccurate statement of the main report, the only portion of which may be said to be accurate is that containing the recommendations of the majority of the Committee, it proceeds to give in full a ^dissent by Senators Pulsford and Chataway. But as regards the main report, what is stated in the Argus is either stated inaccurately or unfairly, or the vital portions have been left out. I desire to know, sir, whether there is not some way of getting a guarantee from the press before papers are published that if any statement of their contents is to be published it shall be an accurate one.
– Before you answer the question, sir-
– I rise to a point of order. When an honorable senator addresses a question to you, sir, can another honorable senator proceed to discuss it?
– No; but I am not oblivious of the fact that while Senator Pearce was Chairman of the Committee, Senator Pulsford was also a member of it.
– But I asked you the question in my capacity as a senator.
– The name of Senator Pulsford was certainly mentioned with reference to the report in the Argus. I do not think that that justifies any reference to the matter, but probably Senator Pulsford is anxious to ask me a further question.
– But should he do so, sir, before you have answered my question ?
– I do not anticipate for a moment that Senator Pulsford desires to contravene the statement made by the honorable senator.
– Is it not the practice that when a question is addressed to a Minister, or to the Chair, that question is answered before another senator has the right to ask a question arising out of it.
–The honorable senator raised a question of privilege, made a certain statement, and wished to obtain information from the Chair as to whether any line of action can be taken. I think it is competent for the Chair to allow another honorable senator to ask a question in connexion with the matter, but certainly not to debate it.
– All °I desired to ask, sir, was whether the honorable senator was in order in importing into the question a pronounced expression of personal opinion.
– I did nothing of the kind.
– I cannot say that Senator Pearce was not in order in putting the matter as he did. It was a fact, as I understand, that the full report of the Select Committee did not appear in the newspaper he referred to, and he wished tt- know, as a matter of privilege, whether an imperfect, or what he called “a garbled,” report should be allowed to appear in a newspaper.
– May I ask a question arising out of the matter, sir?
– What is the question?
– May I ask, sir, whether it is usual to allow an honorable senator to ask a question arising out of a question, when the answer to that question has not been, given?
– Perhaps the simplest way would be for me to make a reply to Senator Pearce’s question at once, unless there is a desire to dispute the correctness of his statement. The report to which reference has been made was laid upon the table of the Senate and ordered to be printed. It thus became a public document. The practice that has always prevailed in this, and, as far as I know, in every Parliament, has been to allow the press to see papers ordered to be printed. As far as I can see, we are not in a position, under our present practice, to take any steps with regard to the use which the press may make of such documents. If they think fit to publish only a portion of them, and to make comments on the Dortions printed, that has to be permitted. The only way I can suggest in which we could deal with a matter of this kind would be either not to permit such a report .to be printed, simply laying it upon the table of the Library, in which case it would only- be cognisable by honorable senators, or to adopt some standing order which would prevent a repetition of the conduct of which Senator Pearce has complained. I should like to point out, further, that all our proceedings in Parliament are public. The press reports so much of our proceedings as particular newspapers consider desirable. I think it will be realized that it would not be in the interest of the public or of Parliament that we should attempt to interfere in any way with the action of the press beyond what may be necessary to conserve our own privileges. Complaints on many occasions have been made as to what honorable members have regarded as the insufficiency of press reports. I do not suppose that there is any honorable senator who has not at times had occasion to complain of abbreviated reports of speeches-
– That is not an answer to my question.
-And of matters having been left out. This, as Senator Pearce says, is not strictly an answer to his question, but I have already answered his question by pointing out to him that I am not aware of any procedure under which we can interfere with the action of the press unless we adopt a. new practice or new standing orders.
South Australian Wines
– I desire to ask the Minister of Trade and Customs, without notice, whether he is aware that the operations of the New Zealand-South African Customs agreement is having a prejudicial effect upon the South Australian wine trade; and whether he will’ make inquiries into this matter, with a view to re-opening negotiations with New Zealand for a reciprocaltreaty ?
– When the honorable senator last asked me a question on this subject, I gave him the assurance that when Sir Joseph Ward, the Premier of New Zealand, came through Melbourne on his way from Great Britain, the Government would take the opportunity to consult with him on the question of reopening negotiations. As Sir Joseph Ward did not return through Melbourne, the Prime Minister has already entered into negotiations with New Zealand, and has even gone so far as to mention that it was an urgent matter, as our desire was, if possible, to complete the negotiations this session. Unfortunately we have not received any satisfactory reply up to date. The matter is, however, receiving the attention of the Government.
– I desire to ask the Minister of Trade and Customs, without notice, whether he is in a position to furnish the Senate with information as to the action which the Government are taking in respect to the female employes of the Stamps Branch of the Government PrintingOffice?
– A report on the question has, I believe, been prepared. I am hopeful that I shall receive it during the day. Certainly it will be available when the Estimates are under discussion.
– I wish to ask the Vice-President of the Executive Council, without notice, whether he can furnish an answer to the question which I asked on Saturday with regard to the contract recently entered into between the Commonwealth and a certain shipping company relating to the conveyance of mails to Queensland ?
– Theanswer furnished to me is that the only company concerned is the A. U.S.N. Company.
– I desire to ask the Minister of Trade and Customs, without notice, whether it is true, as reported in the newspapers, that the Prime Minister is disappointed with the treatment given by the Senate to the agreement with reference to the Northern Territory ; and whether he hopes even yet to devise some means by which the result of the division taken on Friday can be modified?
– I do not think that the Minister can be expected to answer the first part of the question.
– If it were possible to come to any agreement in regard to the Northern Territory which would be satisfactory to all parties, and which could be mutually agreed upon, we should certainly be anxious to promote a reconsideration. Otherwise the Bill can only be proceeded with on the basis of the amendment carried in Committee in the Senate.
– Is it intended to proceed with the Bill ?
– I have already told the honorable senator that the Bill can onlybe proceeded with on the basis of a mutual agreement between all parties. Otherwise it is evidentthat the amendment that has been made would have to stand. If all parties agreed to the Bill being proceeded with on the basis of that amendment - involving, of course, the pro- bability of approval from the other Chamber at this late hour of the session - the Bill would be proceeded with.
– May I ask whether the Bill cannot be proceeded with, and some amendment inserted modifying, the amendment carried on Friday? Could not the Bill be returned to the other House on that understanding? Why cannot that course be pursued?
– Because we do not desire to waste time at this hour of the session.
– I desire to ask the Minister of Trade and Customs, without notice, whether he has observed the cablegram in this morning’s Argus which reports the Right Honorable A. J. Balfour as having expressed the opinion that, if a supply of cotton is to be kept up, more must be grown within the British Empire? Will the Minister ask the Prime Minister to obtain the consent of South Australia to confer with the British Cotton Growing Association, in order to ascertain upon what terms they would endeavour to grow cotton in the Northern Territory? I assume, of course, that facilities would be offered to them for that purpose.
– I have already noted with some satisfaction the statement made by the Right Honorable A. J. Balfour to which Senator Dobson has alluded. I also notice my honorable friend’s suggestion with satisfaction, ‘and shall have very great pleasure in conferring with the Prime Minister on the matter.
– Does the Minister think that any good purpose can be served by such a Conference, seeing that, unless the Commonwealth takes over the Northern Territory, we can have nothing to do with the growing of cotton therein?
– That is why I mentioned obtaining the consent of South Australia.
– If it be possible to acquire any information on the subject, it is desirable to do so; and my honorable friend ‘Senator Pearce would not suggest that any harm can accrue from my conferring with the Prime Minister.
– I desire to ask the Vice-President of the Executive Council, without notice, whether it is the inten tion of the Government to proceed with the Bureau of Agriculture Bill during the present session?
– If time permits.
– I also desire to make a personal explanation. What was charged against Senator Neild was that he was present at the meeting of the Select Committee on Press Cable Service at which the resolution admitting the press was carried.
– What personal explanation is this? I did not charge Senator Pearce with anything.
- Senator Pearce is explaining why he made a certain statement.
– The original statement to which Senator Neild alluded was made by me. I obtained the minute-book of the Select Committee, which recorded the names of those present at the meeting in question. Amongst the names was that of Senator Colonel Neild. I did not say that the honorable senator was present at the time when the resolution was carried. I did not know whether he was present then or not. I simply said that he was present at the meeting.
– That is very mean.
In Committee (Consideration of House of Representatives’ message) :
Senate’s Amendment. - Insert after clause 4 the following new clause - “ 4a. Provided that the limitation in the pre ceding section in respect to service in the ranks shall not apply except as far as may be found possible until the expiration of two years from the commencement of the training prescribed in section one hundred and twenty-five, paragraph c;
Provided also that the limitation in the preceding section shall not at any time apply to the appointment of officers in the Senior Cadets.”
House of Representatives’ message. - Amendment agreed to with the following modifications -
Insert in clause 4 as provisos to section11a instead of inserting as a new clause.
Omit the number “4A.”
Omit the words “ the preceding section “ wherever occurring, and insert the words “ this section “ in place thereof.
– The House of Representatives’ message indicates amendments which in no case alter the substance of any amendment made by the Senate. They are proposed to make the object of the Senate’s amendments more clear, and in one or two cases to remove an obvious oversight, as, for instance, the amendment to insert the word “ principal “ before the word “Act.” In proof of what I have stated, I take the first amendment made by the House of Representatives. The Senate inserted as new clause 4A what is really a proviso to a preceding section. That was done because, if I remember aright, Senator Lynch had missed an opportunity to submit it as a proviso. I then suggested that it might be submitted as a new clause. The House of Representatives desires that we should exercise the opportunity which their message gives us to put the matter right. In another amendment, the House of Representatives proposes the insertion of the letter “ b “ after the words “ section 123 “ ; and a further amendment is made in the clause prohibiting employers from throwing any difficulty in the way of their employes attending training. The House of Representatives desires that we should add the words “ or from attending any camp of instruction appointed to be held by the Head-quarters of the Commonwealth or any military district.” It was thought that some little loop-hole might be left in the difference between attending training and attending a camp. I move -
That the House of Representatives’ amendment be agreed to.
Question resolved in the affirmative.
House of Representatives’ amendments on Senate’s amendments in clauses 7 and 18 and new clause 17 a, agreed to.
Resolutions reported and report adopted.
In Committee (Consideration of House of Representatives’ amendment):
Clause 6 (Time for taking proceedings).
House of Representatives’ Amendment. - Omit “ time when she was last heard of “. and insert “ date when she is deemed under section 12 of this Act to have been lost with all hands.”
– The House of Representatives has made only one amendment in this Bill. It is intended to remove some little conflict, and possibly some ambiguity. The clause which has been amended’ is that in which a time is set out within which proceedings for the recovery of compensation must be initiated. As the Bill left the Senate, it provided in the case of a ship lost with all hands that such proceedings must be instituted within eighteen months of the time when she was last heard of. In clause 12 there is a fuller definition of what constitutes the official recognition of the loss of a ship. There is a slight conflict between the two clauses, and the House of Representatives thinks it desirable to make them uniform. Another reason for adopting the definition in clause 12 is that it is in conformity with British legislation. And a further reason for agreeing to the amendment is that there is a considerable amount of indefiniteness in the term “ Time when she was last heard of.” There might be dispute as to when that time was. For these reasons the House of Representatives, at the instance of the Attorney-General, agreed to the amendment, which is now submitted to the Senate. I move -
That the House of Representatives’ amendment be agreed to.
Question resolved in the affirmative.
Resolution reported and report adopted.
Bill returned from the House of Repre sentatives, with amendments.
Motion (by Senator Sir Robert Best) agreed to -
That so much of the Standing Orders be suspended as would prevent the House of Representatives’ Message being at once considered and all consequent action taken.
That the message be taken into consideration at a later hour.
In Committee (Consideration resumed from 4th December, vide page 6976) :
Clause 2 agreed to.
Clause 3 -
The Governor-General may from time to time raise by way of loan, moneys to an amount not exceeding Three million five hundred thousand pounds for the purpose of the Naval Defence of the Commonwealth.
– It has been objected that the Government, in proposing to go to the loan market to provide for the naval defence of the Commonwealth, are doing something extraordinary, and highly reprehensible. I wish to point out that in Germany a steady increase of loan expenditure, mainly for naval purposes, has been going on for the last five or six years.
– I pointed that out on the second reading of the Bill.
– Clause 3 gives authority to raise , £3,500,000, and it is quite relevant on that clause to point out that other Governments are providing for the building of a navy by the adoption of a. loan policy. I intend to quote the German, figures.
– I rise to a point of order. Is the honorable senator in order in referring to the principle of a measure which, unfortunately, was adopted by the Senate on Saturday last?
– Clause 3 deals with the principle of the Bill, and the honorable senator is therefore in order in referring to it.
– The honorable senator is repeating arguments which were used on Saturday in support of a principle which the Senate has already agreed to.
– The sufficiency or insufficiency of the amount proposed to be raised is certainly a question relevant to this clause, and I intend to show the expenditure which is being made from loan money in Germany, which is going in largely for a naval policy, as we are proposing to do now. In 1904 the naval expenditure from loan account by Germany was 136,000,000 marks. The following year it was 244,000,000 marks, in 1906 it was 264,000,000 marks, in 1907 it was 257,000,000 marks, and in 1908 it was 265,000,000 marks. These figures are taken from the Statesmen’s Year-Book for 1909. In other words, Germany began with a naval expenditure from loan moneys of £6,750,000, and has increased it to £13,500,000. We propose to commence with a loan expenditure of £3,500,000, which is to be distributed over fifteen or twenty years. I am not aware that any objection can be urged to a pawnshop policy by honorable senators opposite, seeing that’ one of the greatest Empires in the world, in building up a great navy, has adopted a loan policy. We cannot go very far wrong if we follow the example of Germany. On the ground of precedent alone, the Government have very strong justification for mortgaging the future to some extent in order to establish an Australian navy.
– According to Senator St. Ledger, the policy of borrowing money to establish a navy is of the “ made in Germany “ pattern - a sort of jim-crack affair, which has no solidity or substance about it. I have always understood that Senator St. Ledger was a good Britisher. Upon many occasions he has flaunted his devotion to the flag in the face of the people of Australia. Yet we now find him passing by the old British custom of building its fleet out of revenue, and seizing with avidity upon the example of Germany. We know very well that quite recently Germany was brought to the very verge of a financial crisis by this system of borrowing. The people there have been loaded with taxation of almost every description in order that these huge loans may be redeemed, and that the finances of the Federation may be placed on a sound footing. Whatever may be Germany’s policy in this connexion, I unhesitatingly say that no necessity exists for a rich young country like Australia to resort to borrowing for naval defence purposes. Upon numerous occasions Senator St. Ledger has boasted about our wealth. He has declared that we have a magnificent country - that we possess great resources - and yet he is now endeavouring to lead us up to the pawnshop. For what ? To defray current expenses. What a nonsensical proposal. No man in his senses would object to borrowing for reproductive public works, but it is ridiculous to borrow for current household expenditure - for mere purposes of defence. There is no earthly necessity for the Commonwealth to resort to the loan market while a leakage of £20,000,000 is annually finding its way into the pockets of private individuals. But while that leakage is going on, we are asked to enter the money market tor the purpose of borrowing a paltry sum of £3,500,000. I say that we should stop the leakage.
– What is the leakage ?
– The honorable senator ought to know, if he does not. I am not here to educate him. If he cannot find time to school himself in these matters. I am not going to act as his tutor. He reminds me of the old dog who was too infirm to learn new tricks. If the honorable senator has not yet grasped the financial position of Australia, he will never grasp it. I repeat that there is a leakage of £20,000,000 annually in the Commonwealth which must be stopped. It is the height of madness on the part of this rich young community to permit itself to be plundered in such reckless fashion whilst it is compelled to go, cap-in-hand, to the pawnshop for a paltry sum of £3,500,000 for the purposes of defence.
– May I point out to Senator Stewart that the Commonwealth proposes to pay this £3,500,000 out of revenue. During the next sixteen years a sufficient sum will be annually set aside to redeem the loan.
Clause agreed to.
Clause 4 -
– I think that a mistake will be made if we agree to the retention in sub-clause 2. of the words ‘.’ not exceeding three per centum per annum.’’” Personally, I believe that the Commonwealth will ,be able to borrow more cheaply at 3$ per cent, than it will at 3 per cent. I think the statement has been made in this chamber by the Vice-President of the Executive Council that the Government have been advised most strongly from London - I presume by persons who are competent to advise them - that it is much more desirable to issue the proposed loan at 3J per cent, than at 3 per cent.
– That is so.
– The Government have received the strongest possible advices to the effect. I am afraid that the alteration which was made by another place and by virtue of which the Bill is presented to us in its present form, was made partly from sentimental reasons, and partly because it has been alleged in connexion with the suggested taking over of the States debts that the Commonwealth will be able to borrow at 3 per cent. In indorsement of that statement the rate of interest has been altered from 3! per cent, to 3 per cent. I have no desire to enlarge upon this subject at the present stage of the session. Whilst I have no party feeling in the matter I am quite convinced that in the interests of the Commonwealth it is desirable that we should alter the rate from 3 per cent, to 3§ per cent. It is rather a curious circumstance that whilst it is proposed to issue this loan at 3 per cent, in the next clause it is proposed to issue Treasury bonds locally bearing interest at 3J per cent.
– But look at the difference ‘between the term.
– That is a difference which.’ is always maintained between the issue of Treasury bonds and the flotation of a loan. At the same time, it is not desirable that we should issue Treasury bonds in Australia at 3J per cent, whilst seeking to float a loan in England at 3 per cent. The result of adopting that course will probably be that London will make application for Treasury bonds at 3^ per cent., and may decline, except at a very considerable discount, to take up the loan at 3 per cent.
– -What does the honorable senator think that the Commonwealth would get for a 3 per cent, loan?
– Judging by analogies, it is quite possible that it might get £87 or £88.
– About £86.
– I have no desire to indulge in the language of exaggeration. I say that the Commonwealth may get £87, but even if it does, it will not be so successful as if it raises the money at 3
– To-day New South Wales bonds range from £85 10s. to £86 ros.
– I know that State loans, issued at 3 per cent., stand at about £86 at the present time. For the reason which I have given I move -
That after the word “ three,” line 5, the words “ and a half “ be inserted.
– I am glad that Senator Clemons has raised this question; because I think, we should have some clearer statement from the Vice-President of the Executive Council as to whether it is not more advisable that the Commonwealth - especially in the flotation of its first loan - should go upon the market at 3$- per cent, instead of 3 per cent. It will be admitted that the shorter the period for the redemption of a loan the less attractive it is to investors, especially for a small loan. The time for the redemption of this loan is to be limited to sixteen years, and, therefore, it will not be a very desirable stock from an investor’s stand-point. It should be remembered, however, that the loan is to be accompanied with a sinking fund, which is to be provided out of general revenue. The fact that a sinking fund accompanies a loan gives additional security. But sometimes sinking funds are delusive - both to the borrower and to the lender - when they are not provided out of general revenue. A short-dated loan affects the proceeds, but 4he fact that the loan is accompanied by a sinking fund is to some extent a security. I desire to know whether, from a financial point of view, it is advisable to depart from the practice of floating a loan at 3J per cent. ? I do not “believe that the credit of the Commonwealth is better than the credit of any State therein. The value of the 3 per cent, stocks of the States is between £85 and £86, and if we floated a loan at 3
– I think it is largely a matter of sentiment with the other House whether the loan should be floated at 3 or 3J per cent. We hope that, in days to come, Australian stock will be 3 -per cent., even if we have to pay 3J per cent. now. A gentleman said to me, “ Is it not desirable to show that we believe in ourselves by having a 3 per cent, stock ?” It should, be remembered that in the case of investments, trustees like to buy a stock at a discount. This morning I had a consultation with an actuary on the subject, and, for the information of the Committee, I propose to read the prices which we may expect to get for 3^ and 3 per cent, stock. Some persons allege that they can only get £85 for 3 per cent, stock. If we issued our loan at 3 per cent, and got £85, according to Mr. Nash’s book on sinking funds and redemption tables, the effective return to the investor would be £4 7s. 4d. : at £86, £4 5s. 3d. ; at £87, £4 3s. 2d. : at £88, £4 is. 2d. ; at £89, £3 19s. 3d. ; at £90. £3 17s- 4d. ; at £91, £3 15s. 6d. ; at £92, £3 13s. 8d. ; and at £92 ros., £3 12s. 8d. The immediate return to the investor would be only £3 4s. at £92 10s., but there is £7 10s. to be returned after the expiration of sixteen years. A sinking fund of £I75,000 per annum, if it were invested at 3 J per cent., would amount to £3,669,931, and at 3 per cent, to £3,527,454. On the other hand, if we were to issue the loan at 3J per cent, and got £99, the effective return to the investor would be £3 1 is. 8d. ; at £98, £3 13s- 5^-J at £97, £3 15s. 2d.; at £96, £3 I6s. r id. ; and at £95, £3 18s. 8d. It will be seen that, as a matter of fact, it will pay us equally well, from an actuarial point of view, whether we issue the loan at 3^ per cent, and get £98, or at 3 per cent, and get £92 10s. It would be actually cheaper for us to issue a 3 per cent, loan at £92 10s. than a 3i per cent, loan at £98.
– We would not get £92 10s.
– How does the honorable senator know ?
– From the London quotations for the last five or six years.
– We do not propose to borrow all the money at once, and the rul-ing rate may not always be the same. The New ‘Zealand Government are renewing; 4 per cent, loans at 4 per cent., and the New South Wales Government are renewing 4 per cent, loans at 3! per cent. I ask honorable senators to bear in mind that in fixing the rate they are assessing our future stocks. I believe that in time we shall be able to borrow at 3 per cent.
-Colonel Sir ALBERT GOULD (New South Wales) [12.10]. - I desire to draw the attention of honorable senators to the amount of hard cash which the Government would require in order to carry out the contemplated work. I understand that the total cost of the naval services is estimated at £3,800,000, and a sum of £250,000 has already been provided under the Surplus Revenue Act of last year. It is clear that the Government will not be able to finance the whole of their scheme unless they are in a position to command the full amount of the loan, namely, £3,500,000. A considerable expenditure will be incurred in connexion with the flotation, and possibly the underwriting, of the loan, and that, I take it, will have to be defrayed out of the proceeds of the loan. If we decide upon borrowing sufficient to construct the vessels, we should look at the return to the investors. Senator Walker has pointed out the value of stock at 3 and 3½ per cent. According to a share list for October last New South Wales 3 per cent. stock, amounting to £12,500,000, and repayable in 1935-6, was quoted as follows - Buyers, £85; sellers, £86, and it was marked as giving a return of 3.15 per cent.
– It was quoted in. London at the same rate on Saturday last.
-Colonel Sir ALBERT GOULD. - Twelve months ago the same stock was quoted as follows - Buyers, £86½; sellers, £87½. During the year it does not seem to have fluctuated very much in value. It seems to me that we cannot expect to realize much more than £86 for 3 per cent. stock, if we get as much, and the net proceeds will, of course, be materially lessened. According to this share list, in October last New South Wales 3½ per cent, stock was quoted as follows - Buyers, £98¾ ; sellers, £99¼ Twelve months ago the average price of that stock was £99. It is redeemable between 1 9 18 and 1925. On a 3½ per cent, stock an investor is getting £3 12s. 6d., and on a 3 per cent, stock, £3 15s. Of course the currency affects the return to the investor, but on glancing through this list of the prices of New South Wales funded stock I find that in no case is the investor accepting less than 3½ per cent. on his money. The preference he will give for any of the different stocks of New South Wales, is in no case less than sufficient to return to him 3½ per cent. In some cases it is much higher. For instance, the New South Wales funded stock, 4 per cent., repayable 1912, is commanding £3 18s. 6d. But the lowest return any investor is content to get for his money would appear to be 3½ per cent. If we give less than 3½ we shall not raise anything like the £3,500,000 ; and later on the Government will have to come to Parliament to ask for a further large amount, in order to complete these undertakings. The price that the Government might have to pay for the money then is entirely problematical. If there were a war scare, or war appeared imminent, instead of paying 3½ per cent, we would have to pay very much more. We should then be fortunate if we got the money at 4 per cent. Consols are regarded as the very best class of security known to the British investor. They return only £2 19s. per cent. The prices at which they sell at present are, buyers £82 10s. per cent. ; sellers £82 15s. per cent. That only returns to the investor £2 19s. per cent. We cannot expect that a loan from Australia will command the same price as British Consols, which are looked upon as the giltedged security of the world.
– There have been occasions when Colonial stocks - Western Australian 3 per cents, for instance - have been higher than consols.
– One Western Australian 3½ percent. loan was floated at £103-
-Colonel Sir ALBERT GOULD. - I am not aware of any Australian stock that has ever been better than British Consols’.
-Colonel Sir ALBERT GOULD. - I do not know the price of Western Australian debentures at present, because the document I have before me only prices New South Wales funded stock. It is, however, within my knowledge that New South Wales funded stock has been equal to the stock of any of the other Australian Colonies as relates to returns to the investor. If it be clear, in the first place, that we must get £3,500,000, in order to avoid raising another loan later on, it is necessary that we should pay such a rate of interest as will produce the sum which we require. That is to say, we must pay such a rate of interest . as will produce £100 for every £100 bond which we issue. If we float at 3 per cent., we shall not raise the amount of money which we require. Suppose that we floated our stock at £87. Then at the end of sixteen years we should have to pay £100 for every £87 which we had received ; and in the meantime we should have been paying interest at 3 per cent. on the £100, and not on the £87. I have had a calculation made as to what £15 would be worth at 3 per cent., payable sixteen years hence. I find that it would be worth within a fraction of £10. So that, even, under the most favorable circumstances, supposing we could get £90 for our £100 bonds, at 3 per cent., I doubt very much whether we should not have to pay extra at the end of the period for which the loan, is current. It must be realized that this is simply a matter of pounds, shillings, and pence. We all desire to see eventually a Commonwealth stock at 3 per cent. I admit that. But is there any possibility of issuing now a 3 per cent, loan that will advantage us and carry out the objects we have in view? I understand - speaking subject to correction - that the Government have taken the trouble to obtain advice from London as to what steps they ought to take. I believe that the advice very strongly tendered was that they should not attempt to float their loan at less than 3 per cent., in view of the present position, of the money market. Talk as we like, we shall have to go to London for this money; or, at all events, London is the ultimate dictator as to the price at which we shall obtain it. There is no one who is prepared to lend money to the Australian Government at 3 per cent., or even at 3^ per cent., if he can get 4 per cent, for it elsewhere. I therefore urge upon the Committee that it would be wise to float the loan at 3J per cent, rather than at 3 per cent., in the belief that the country will obtain the money more readily by that means, and will not pay one sixpence more for it in the way of interest, or in the amount payable for redemption of the debentures eventually.
Senator Colonel NEILD (New South Wales) [12.24]. - I rise to ask the Committee, with great respect, not to give too much credence to the optimistic views of my dear colleague, Senator Walker. I cannot shut my eyes to the fact that the honorable senator, with others, was ten years ago busily engaged in deluding the public into the belief that Federation would reduce the rate of interest on Australian loans. That result has not come off yet”. Even to-day as we are proceeding to legislate for our first Commonwealth loan, we are compelled to realize that there is nothing in the condition of the money market to warrant us in believing that the Commonwealth can borrow at J per cent, lower than the States were charged ten years ago. The figures adduced by Senator Walker and Senator Gould were very instructive in detail. Senator Gould’s statement was, I think, the more instructive. He showed quite plainly that to raise £3,500,000 at 3 per cent, we should really have to issue over £4,000,000 worth of stock. There is nothing in the situation, to induce me to accept Senator Walker’s singularly optimistic view that we can get £92 for a 3 per cent. loan.
– At £92 the bonds would carry more than 3J per cent.
– Then why are not the States borrowing as advantageously at the one rate as at the other? If the larger States were able to borrow more advantageously than, at 3§ per cent, there might be something in the contention. Senator Walker has laid emphasis upon the fact that lending is largely a matter of sentiment. I accept that proposition at once. But, as a matter of sentiment, I’ think we should like to see Commonwealth stock standing at par rather than at a discount of 15 per cent. Supposing that we borrowed only at the minimum figure stated - £85 - we should be short no less than £525,000 in the discount alone, apart from the expense of (flotation. It is clear, therefore, that even at £86 we should have to sell stock to the amount of very much over £4,000,000 in order to raise £3,500,000. Another reason w”hich suggests itself to me as to why 3 per cent, stock should, not be issued at this juncture is that a 3 per cent, stock at 15 per cent, discount means leaving to futurity a burden which we might be reasonably expected to shoulder. If we lower the rate of interest which the present generation has to pay, we lea.ve a heavier capital sum for future generations to discharge. That must be so. If we could borrow even at £95 at 3 J per cent, we should have to pay more to-day in interest than if we borrowed at 3 per cent, and only raised £85 ; but in the latter case we should leave a larger sum to be discharged in the future. I think, therefore, from that stand-point, that it is just as well to pay the higher rate of interest now, and leave a smaller sum to be met in the distant future. Had Senator Clemons not moved his amendment, I should have been prepared to move similarly, and to make use of some of the arguments which the honorable senator has put forward with such clearness as to confirm the views I previously entertained. I shall have great pleasure in supporting the amendment.
– Senator Gould has stated the position so clearly that there should not now be two opinions in the Committee upon it. I intended to move an amendment to provide for the interest of 3½ per cent., but I should not have done so merely on the ground of sentiment. It would, in my opinion, be very bad business for us to issue our stock at a very heavy discount, such as 15 per cent. It would suggest that our credit is not over good. If honorable senators will look at to-day’s quotations from the money market, they will find that Victorian 3 per cent. stock is quoted at £84 10s. That being so, it is a fallacy of Senator Walker to suggest that we might secure £92 10s. for our stock if issued at 3 per cent. It has been pointed out, also, that in the event of war we should get less than has already been estimated for 3 per cent. stock. I hope the Committee will see the wisdom of providing that our stock shall be issued at 3½ per cent., because that would give us, if not par, something near it. If we get par, or nearly par, for our stock, it will be to the credit of the Commonwealth, and it will show, also, that we are not afraid to pay 3½ per cent, for borrowed money, for we cannot get it for less.
.- I entirely agree with the amendment. Financial authorities all over the world are agreed as to the wisdom of floating debentures at par, or as near par as possible, and they are totally against floating debentures at a discount of £16 or , £14 on . every £100. The State Governments that started that kind of business have left it off, finding that it was unwise. Of what use is it for honorable senators to talk of borrowing money now at 3 per cent. New Zealand is borrowing millions at heavy interest. Hundreds of thousands of pounds have been borrowed in Victoria at 6 per cent.
– The honorable senator will not say that the New Zealand Government are paying 6 per cent. They are paying only 4 per cent.
– Private borrowers in New Zealand are paying 6 per cent., and exchange and. other charges. The banks in Victoria give 4 per cent, for three years. As Senator Gould has pointed out. British consols are now bringing in London as nearly as possible 3 per cent. If honorable senators will look back over a number of years, they will find that Australian 3 per cent, stock has veryrarely been quoted at £86. I have known it to- be as low as- £84. When I was in London on one occasion it was as low as £82.
– And it has been up to nearly £90.
– Very rarely, indeed, has it been up to anything like that amount. I can tell the Committee that for seven or eight years prior to the last eighteen months money was cheaper in Australia than in London.
– What did the honorable senator say was the interest on consols ?
– It is £2 19s. per cent., or as nearly as possible 3 per cent. Western Australian debentures are quoted at £88. It is absurd to put any Australian debenture stock on a par with consols. The Commonwealth Government will have no show of borrowing money at under 3½ per cent; If they do try to borrow at less than that rate, they will have to accept a good deal below par.’ Victorian 4 per cent, debenture stock is now quoted at from- £102 to £103. It is possible to get more for 4 per cent, debentures to-day in Melbourne than in London, or, for that matter, for3½ per cent, or 3 per cent, stock. I would suggest to the Government the advisability, if the money market is at all favorable, of floating this loan at 3½ per cent., when there will be some chance that we shall get very near par for it. That would be a good transaction, and would’ mean a saving in the aggregate.
– I support the amendment. Its adoption would not bind the Government to issue the loan at3½percent.It merely provides that the nominal interestpaid shall not exceed 3½ per cent. We have been reminded that at the time of Federation there was- a good deal of talk about the Commonwealth being able to borrow money at a lower rate than the States,, but since then the position of the money markets of the world has changed. Money is worth more to-day everywhere than it was at that time. Senator Fraser has said’ that for a long time money was cheaper in Australia than in any other countries. In the older countries of the world there hasbeen a great increase in the demand for money. It is worth more now than it was some years ago, and is more difficult to obtain. It would be wise to accept the amendment, and if the Treasurer found that he could with advantage, issue debentures at less than 3½ per cent., he would’ be at liberty to do so.
Senator VARDON (South Australia) loan issued by the Commonwealth had to be issued at a heavy discount, because the moral effect of that would be very bad. It is all a question of supply and demand. If money were cheaper, the loan might be issued at 3 per cent., but as the money market stands to day, I am quite sure that the Government could not expect to get anything like a good price for it at 3 per cent, lt would be much better to pay 3J per cent., and have our stock quoted practically at par, than to issue the’ loan at 3 per cent., and, when we require £3,500,000, find that we can only get in cash £3,100,000, because that is what it would amount to. I take it that the Government require the full amount of this loan to cover the expenditure on the naval unit, and, if that be so, it would be very much better to issue it at a rate which would secure par, or very nearly par, than to issue it at a rate which would involve a heavy discount. The Savings Banks to-day have raised their rate of interest to something like 4& per cent. It does not follow that we should pay that rate on our debenture stock j but it shows the condition of the money market, and that, within the last year or so, money has become dearer than it was previously. I do not think that it would in any way prejudice future borrowing by the Commonwealth, or fix the rate for Commonwealth loans at 3J per cent, if we floated this loan at that rate of interest. Honorable senators must remember that this would be a comparatively short-dated loan, and it would be more politic and economical to issue it at 3J per cent, and get nearly par, than to issue it at 3 per cent, and get only £85 or £86 for it, which is the most that could be expected in the circumstances. Regarding it either from the sentimental or the practical point of view, I hope the amendment will be agreed to. If the Government can get the money at a cheaper rate than per cent, so much the better, but if they find that it would be wise to issue the loan at 3J per cent, they should have the power to do so.
. It is very instructive to listen to the remarks made this morning on this subject by honorable senators who supported the financial agreement. Honorable senators opposite are now preparing to put the second brand on the Commonwealth. They propose to assert that the borrowing capacity of the Commonwealth is no better than that of the indivdual States.
– The State Governments do not borrow at 3£ per cent.
– Yes, they do.
– Would the honorable senator affirm that the borrowing capacity of the Commonwealth is better than that of ‘Canada ?
– Honorable senators opposite have done their best in another measure to manacle the Commonwealth financially, to make it impossible for the Commonwealth to take over the State debts, and as a climax they are now proposing a rate of interest for the first Commonwealth loan which is an admission that the Commonwealth cannot borrow more cheaply than the States. Honorable senators are supporting this amendment who some time ago. went up and down the country talking at large about the benefit which would accrue from Federation in the creation of a great Federal ‘3 per cent, stock. The echoes are still ringing with their advocacy of Federation on that ground.
– Very few believed them.
– Now we have a miserable admission that when the Commonwealth is commencing to borrow, and when its credit should be at the highest, it should offer a rate equal to that offered by the States. As Senator Lynch has pointed out, when Western Australia first started borrowing, she got £4 above par for 3J per cent, stock. That was a single Colony, with a population of too, 000 , and there were rumours of war at the time also. Here we have the great Commonwealth, with about 5,000,000 of people, and control over Customs and all other forms of taxation, proposing to pay 3J per cent, for its first loan. A good deal has been left unsaid about the consequences of floating 3 per cent, loans. I do not profess to be a financier, but I read a good deal about finance, and keen my eyes on what is being done bv the State Governments. As one who is not a financier, it seems to me that there is some sense in the proposal to borrow at 3 per cent., even though we should only get ,-£86 or £87 for our money. We shall have accompanying the loan, a sinking fund, and by that fund we can appreciate’ the value of our own stock. We can at any rate keep the value of our own stock from depreciating, and consequently it might be an advantage to have a low-priced stock, because we could invest our sinking fund in it. One point appeals to rae which I know does not appeal to honorable senators opposite. It is said that if we float a loan at 3 per cent, we may not obtain the whole £3,500,000 in actual cash - that we may get £500,000 less than that sum. That would be a glorious consolation to the taxpayers, because they would then have to pay less interest during the term that the loan was current. I am’ convinced that the £500,000 would never be borrowed, because before the occasion for borrowing it arose, the Commonwealth would have returned to a sane policy and have provided for it out of revenue. What has been pointed to as a calamity would really mean that the Commonwealth would borrow £500,000 less.
– It ‘would have to payinterest on £3,500,000.
– It would have effected a saving in the interest bill. Senator Gould nas already shown that the result would be the same, though the interest would not be the same.
– Three and a half per rent, on the smaller sum works out the same as 3 per cent, on the larger sum. Three per cent, on a bond of the nominal face value of £85 would be the same as 3J per cent, at par.
– What a miserable figure the Government have cut over this matter. Surely, before submitting such an important proposal, they took the precaution to be thoroughly advised upon it. Having done so, they contemplated that the rate of interest payable on this loan should be $ per cent But as the result of criticism in another place they at once climbed down and agreed to accept 3 per cent. Then the Bill, having reached this Chamber, and having been subjected to further criticism by a Government supporter, they are apparently willing to restore the rate of interest to 3J per cent.
– The speeches which have been delivered have converted them.
– Those speeches have come chiefly from those who wish to borrow and burst at any price. I confess that the remarks of Senator Walker had considerable effect upon me. If the Commonwealth intends to resort to a policy of borrowing - even if it obtains a less return - I am satisfied that it should start at 3 per cent., because that will have the effect pf encouraging the people to demand that there shall be only one Australian borrower, namely, the Commonwealth. If we cannot borrow at a lower rate than the States we must say good-bye for ever to the transfer of the State debts.
– Does the honorable senator, really mean that?
– Yes. It is useless going to the people and saying, “It is true that we floated, a loan at 3
– If the security is good the sinking fund does not count.
– But the possession of a substantial sinking fund will give ussome little control over the price of our stock in the London market. For these reasons I shall vote to retain, the clause in its present form. I hope that the Commonwealth wilL not commence to borrow at the rate at which any State can borrow.
– That (he Commonwealth cannot borrow at a less rate than can the States would be rather a discouraging admission to make. The difference between 3 per cent, and 3J per cent, does not appear to be very great.
– There is a big difference.
– The credit of the several States has oscillated between those rates for years. Personally, I do not think that we should lose sight of the necessity which exists for fixing one recognised standard for Commonwealth stock on the London market. When Sir John Forrest visited England some time ago, he consulted most of the leading financial authorities there, and they all agreed that it would be a good thing to establish Commonwealth Consols on the London market at 3 per cent.
– I do not think they said that.
- Sir John Forrest made that fact very plain at the Brisbane Conference of Premiers. In urging the transfer of the State debts to the Commonwealth he said that the best course to follow would be to establish a universal 3 per cent. Consols on the London market. One matter has been mentioned during the course of this debate which we should not ignore. It is that if we increase the rate of interest to 3J per cent, it will bring our stock up to the margin when a premium will probably be paid for it by investors. If a premium be paid for it, those who are in charge of trust funds will not - as was pointed out by Senator Walker - be competitors for it, and we shall get a lower price owing to the absence of competition. On the other hand, if we keep the rate of interest at such a figure as will insure a discount price we shall encourage those who control trust funds to invest in our stock. But altogether apart from these considerations we should recognise that the Commonwealth security is better than is that of any State. We ought not to admit that it is only equal or inferior to the security of any component part of the Commonwealth.
– We do not admit that.
- Senator Walker has calculated that £92 at 3 per cent, will return a shade over 3J per cent. If we place a 3 per cent, loan on the market and get £92 for it, the investor will obtain a return of 3! per cent. What more does he want? There is very little difference between 3 per cent, and 3 *</inline> per cent, so far as the investor is concerned. All he requires’ is a certain rate of interest for his money. It does not matter to him whether he receives 4 per cent, from one security, 3J per cent, from another, or 3 per cent, from a third so long as he obtains the highest rate payable on the security in which he is investing. He looks only to security, and the highest rate of interest which is payable upon it. I think we should be guided by the figures which have been quoted by
– Senator Neild has made certain remarks in regard to the possibility of the Commonwealth being required - in the event of this loan being floated at 3 per’ cent. - to raise an extra loan to make up any deficiency in the amount subscribed, and Senator Pearce has very sensibly pointed to the fact that if we establish a sinking fund in connexion with this loan and proceed upon similar lines to those adopted in England, we shall each year be buyers of our own stock. In regard to the possibility of a deficit being experienced . in the amount subscribed for the loan, if the Treasurer will take the trouble to consult an actuary in the matter, he will be advised that each year he should provide for the deficit which will remain at the end of the term when the loan matures.
– But the deficit will be now.
– We do not require he £3,500,000 now. We require to raise only a little more than £1,000,000 per annum. I have no personal feeling in this matter, but I wish to see the Australian Consols a 3 per cent, stock. When the Federal Convention was sitting, I took the trouble to send to England in order to obtain the advice of financial authorities there, and they all agreed that whenever the Commonwealth established a consolidated stock it should be a 3 per cent, stock.
– Standing at what?
– That depends entirely on the money market. Under the Government proposals £175,000 will annually be paid into a sinking fund so that that money will be available for investment in our own stock.
– After 191 2.
Sitting suspended from 1 to 2.1 5 “-p.m.
– I do not propose to discuss the relative advantages of 3 and 3J per cent, stocks, but I desire to place before the Committee the view which induced the acceptance of the lower rate of interest by the Government in the other House. Every one will, of course, admit the desirability of borrowing money at 3 rather than 3J per cent, if it is obtainable; and undoubtedly it would be very much to the advantage of Australia if it were known throughout the money lending world that its credit stood in such a favorable condition that money could be raised at 3 per cent. I have to again admit that the Government, having received advice from London, felt justified in providing in the Bill originally that the interest was not to exceed 3J per cent. But the manifestation of opinion in the other House . was very pronounced in the direction of testing in the market whether or not money could be advantageously borrowed at 3 per cent., and, sympathizing to some extent with that view, the Government accepted the amendment. I invite the attention of honorable senators to the next clause, under which power is taken to raise a proportion of the money authorized to be borrowed by Treasury bonds. Should the Bill pass in its present form, it is our intention, when the time arrives, to endeavour to secure the money at 3 per cent. If, however, we find that it is not possible to get the money at 3 per cent., except at a very heavy dis- count, we certainly will not attempt to float a loan. In these conditions, there can be no desire to have Australian bonds quoted at such a heavy rate of discount as would put them on the same level as the bonds of South American Republics. If the Government ascertained that the market was not favorable to the flotation of a loan at 3 per cent., we would abandon the effort to raise the money under this clause, and issue short-dated Treasury bonds under the next clause. If when the money was immediately required the market price was high, it would obviously be advantageous, quite apart from the rate of interest, to raise it by short-dated Treasury bonds, with a view to converting them into inscribed stock later, when probably the money market might have become easier. I ask honorable senators, after the very full and not uninteresting discussion, to assist us in arriving at a determination. Nothing which we can put in the Bill is likely to affect the price which Australia will have to pay for the money it requires. That will be determined by factors quite outside our control.
– I am pleased indeed with the determination which the Government have come to. For their information, I propose to read a short quotation as -to the prices which Australian 3 per cent. stocks have obtained in the London money market. I have before me a copy of a letter from the manager of the Bank of New South Wales, dated 1897, and giving the prices of those stocks in the London market.
– The world has changed since then.
– My honorable friends cannot make me believe that, in time, Commonwealth 3 per cent, stock will not be as valuable as some of those stocks were in 1897. The writer says -
To give the present quotation of the three Australian 3 per cent, inscribed stocks, namely,
New South Wales, 3 per cent., 1935,101-; Western Australia, 3 per cent., 1915-35, 99-¼; South Australia, 3 per cent., 1916-26,98½-¾. . . . We certainly think that the best rate would be 3 per cent. This we believe would be the most practical basis upon which the debt could be consolidated.
So far as I can see, there is no reason why the outlook should be different now when money becomes cheaper.
– What has that to do with the present time?
– A great deal. It was then proposed to issue an Australian stock for all time, not for limited periods. It would be a great mistake to discount our future by saying that we would never be able to borrow money at 3 per cent.
– I am more than surprised at Senator Walker putting forward a statement sent to him in 1897, when the financial position in the Old Country was widely different from what it is to-day. The arrangements for Australian stock must be made with some reference to the conditions that exist in London to-day. At that time the value of money did undoubtedly point to 3 per cent, as the rate for Australian loans, but the whole position of affairs has changed since then. English consols to-day are only2½ per cent., that is from ten to twenty points less than what they were worth then. Three and a half per cent, is something like the rate which the values of Australian stocks suggest today. It is wise that the Government should take this power and it is for that reason only that I support the amendment.
Question - That the words proposed to be inserted be inserted (Senator Clemons’ amendment) - put. The Committee divided.
Question so resolved in the negative.
Clause agreed to.
Clauses 5 to 8 agreed to.
Clause 9 (Trustees of Sinking Fund).
– I should like to know what directions the Government propose to give to the trustees of the sinking fund. We all recognise that the value of a sinking fund is to be judged by its inviolability. In the various States sinking’ funds have disappeared in times of stress. I believe that Western Australia has declared the conditions for the management of its sinking funds by Statute. I should like to know if the Commonwealth Government propose to follow that example?
– I am not in a position to say whether it may or may not be desirable to have another measure specifically defining the duties of the trustees. I would remind Senator Pearce that it is not possible for one Parliament of the Commonwealth to bind another by an Act.
– Surely we can bind the Treasurer?
– This measure sufficiently directs that the appropriation is to be made each year and paid to the trustees of the sinking fund, who will be the President of the Senate, the Speaker of the House of Representatives, and the Secretary to the Treasury. As to any existing fund, the Treasurer of the day would have to secure the sanction of Parliament to suspend its operation. He could not do it otherwise. Even if we could more clearly define what is intended, it would still be possible for some future Parliament to suspend the provision if for financial reasons it was not convenient to continue the sinking fund for the time being. We have to depend upon the determination of Parliament, and it is scarcely likely that Parliament would sanction any departure from the provisions of the Bill.
Clause agreed to.
Clause 10 -
The moneys raised by virtue of this Act may be expended towards the initial cost of a Fleet Unit for the purpose of the Naval Defence of the Commonwealth, and are hereby appropriated accordingly.
.- I move -
That after the word “ Commonwealth,” line 4, the following words be inserted : - “ and as far as practicable within the Commonwealth upon vessels constructed therein.” 1 said on Saturday, and I desire to em phasize the point to-day, that the people of Australia at the last general election declared emphatically for a Protective policy, meaning thereby that all work that might be made available in connexion with the naval and military defence of the Commonwealth should be done in Australia byAustralian workmen. A large amount of work will be necessary in connexion with our naval policy. It ought to be the desire of every Protectionist, and of everybody . who wishes to see Australian workmen well employed, that, as far as practicable, the work in connexion with the Australian fleet should be performed in this country by our own workmen. The Fisher Government were responsible for sending to Great Britain a number of artisans who, to-day, are acquiring a knowledge of naval construction. It will be extremely beneficial to give effect to that policy under this Bill. In introducing the measure, the VicePresident of the Executive Council said that the cost of the River destoryers would be about £80,000 each. That is a clear indication that the Government have considered the cost, and determined to have the vessels built in Great Britain; because there is a difference of £20,000 between the estimated cost of construction in Great Britain and in Australia. We are not here to consider what the Commonwealth might save by having the vessels built abroad. We should first consider the interests of the Australian people and Australian workmen. To be consistent to the principles upon which we were returned to the National Parlia-. ment, we should adopt the amendment which I now submit.
– Whilst it may be argued that we could not build an Indomitable in Australia, I am certainly of opinion that, with the experience gained by the artisans whom we have sent to Great Britain, and taking advantage of the fact that the third of the three torpedo-boat destroyers is to come out in sections and be put together in Australia, we ought to be able to commence building in this country. But there is a circumstance which seems to indicate that the Government do not intend that the work should be done here. Inquiries made while I was Minister of Defence elicited the information that the cost of building in Australia would be probably about 20 per cent, higher than that of building in Great Britain. The contract cost of a torpedo-boat destroyer in Great Britain is about £80,000. The Government estimate the cost of the three additional vessels at £80,000 each, and the fact that the Government have adopted that estimate is an indication that they contemplate having the vessels constructed in England. I could not help overhearing a contemptuous remark of ‘the Vice-President of the Executive Council with reference to the six men sent to England. But I would remind him that they were not sent there to learn their trade. They are experienced workmen, and they will gain experience in naval construction while they are there. When they come back, the experience which they have gained will be used for the tuition of other workmen skilled in various trades, but who have had no opportunity of acquiring technical experience in this particular line. These men will act as leaders, and no doubt other workmen can be brought from Great Britain also to act as leading hands. I think that the Committee ought to give a direction to the Government in this regard.
– I trust that the Committee will not adopt the amendment; and I express that wish with no inclination to resist the view put forward by Senator Findley. The Government intend as far as possible that work required for defence purposes shall be done in Australia. But what is the meaning of the term “as far as practicable,” in Senator Findley’s amendment? When terms like that are inserted in Acts of Parliament, the effect is either to leave matters as they stand to-day, or to open the road for controversy at a later date.
– Are the Government going to build the destroyers in Australia?
– I do not know, because that subject has not been brought under review. But I do know that the Government are determined to have as much work of this character as possible carried on in Australia; and that quite apart from any fiscal view. The Government believe that it is not sufficient merely to have warships on our coasts, but that it will be necessary at a time of national crisis to create implements of defence in Australia. Therefore, they are seized of the importance of having work of the kind done in this country.
– Why not say so in the Bill?
– We cannot provide for such a matter except in terms that are indefinite. There” may be differences of opinion as to what is “ practicable.” It might be “ practicable “ to build a certain vessel in Australia, but when built, she may not be quite so efficient for defence purposes as a vessel built elsewhere. We have to provide fighting machines which will be as efficient as those constructed in any country. Then, again, we must have some, regard to cost. I am sure that even Senator Findley would not say there is not a limit beyond which we cannot go. Further, in all matters it is necessary to make a beginning. It might be possible to build a Dreadnought in Australia, but to build one would not be the best way to commence our career of naval construction.
– Japan builds her own vessels.
– But Japan had a navy thirty years before she began to build. I am not saying that we should not make a start, but we must not involve Australia in a great” waste of money. The Government has not gone into this matter yet. It may be that the Minister of Defence will find that it is possible to have a large amount of the work done in Australia. But we must always bear in mind that a. fighting ship, to be of any value, must be the best of its kind. We may in other matters put up with a little inconvenience, but when we are buying ships upon which will depend, not only the safety of those who will man them, but possibly the safety of the whole naval unit, and of Australia, it is quite imperative that we should avail ourselves of the best material and the best constructive skill. Japan started just as we are doing, and went on extending her limits, laying down more plant, and acquiring more skill, until now she is able to build her own Dreadnoughts. That appears to me to be the. sound way of proceeding. There is one other reason why I ask that the amendment should not be accepted, and it is that time is an important element in this matter. I have already intimated that in ordinary circumstances the Government would have deemed it desirable to consult the constituencies before committing the people to an expenditure of this kind, or lo the adoption ox a loan policy. But, because of the urgency of the matter, they have taken the responsibility of submitting this proposal. If we were to give effect “literally to Senator Findley’s amendment, it would follow that we should have to lose very many, months in putting down a plant for the construction of these vessels in Australia, which would cost very many more millions than will the proposed fleet unit itself. In view of the fact that in another place, as well as here, the Government have given definite assurances in connexion with this subject, and that it is impossible to say what-“ as far as practicable” might be, I ask the Committee to leave the clause as it stands. Honorable senators must know that if the Government do what is wrong, it will be in the power of Parliament to punish them. The amendment can have no practical effect, and, if carried, might involve a consumption of time, which at this stage is very valuable.
Senator NEEDHAM (Western Australia) [2.47J. - 1- intend to support the amendment, because I consider it a reasonable one. It is desirable, not only that weapons of Australian defence shall, as far as practicable, be produced in Australia, but also that the money expended in their production shall be circulated amongst Australian workmen. I have not the slightest doubt that we can build, not merely torpedo boats, but cruisers, in Australia. The last Government decided to have one of the torpedo-boat destroyers built in the Old Country, and to have the parts of the others assembled here. They further decided to send men to the Old Country to learn the technicalities of this class of ship building, and we can expect those men to impart the knowledge they will have gained to their fellow workmen on their return to Australia. We have tradesmen who are quite competent, with the instruction which the men sent Home will be able to give them, to build these vessels. We have also the material for their construction in Australia, and need only the operation of a thoroughly Protective policy to effectively develop the mineral resources from which that material is to be obtained. Doubtless it would cost a little more money to have these vessels built in Australia. I quite realize that it would be necessary, as we should be commencing the work, to import some of the machinery. We should need keel-plate bending machines, saws, mangles, and punching and shearing ma chines. But the time to commence is now. Even if we were to have one of the cruisers built in the Old Country, we should, in the meantime, be making preparations for the building of the others here. The amendment, if agreed to, would not leave the decision of the matter in the hands of any Government. It would be an expression of the opinion of this Parliament that, as far as practicable, these vessels should be built in Australia by Australian workmen. The Vice-President of the Executive Council referred to Japan, and I recognise that it took some time before Japan was able to build all her own war vessels. In the early nineties, the Japanese Government were having the first of their line of battleships constructed at J. and J. Thompson’s yards at Clydebank, in Scotland. The vessel afterwards took a prominent part in the Russo-Japanese war. I was a workman in the- yard referred to at the time, and, though it is not twenty years ago, the Japanese are now building their own war vessels. At the time I refer to, the parts of some vessels were being constructed at the Clydebank yards, and were to be sent to Japan to be assembled. We are adopting a similar course, and we should instruct our workmen, and develop our resources, in order that we may at the earliest possible moment begin to build our own fleet. I believe that the men who have been sent Home to assist in the construction of the torpedo-boat destroyers will be able to impart a very great deal of knowledge to a large number of boilermakers, carpenters, and engineers in the various details of this class of shipbuilding. I hope the Committee will accept the amendment, which, if adopted, will appear in the Bill as the mandate of Parliament to any Government that may be in power.
-Colonel Sir ALBERT GOULD (New South Wales) [2.53].- Every member of the Committee, and indeed of the Federal Parliament, is in accord with the principle underlying the amendment, that, as far as practicable, we should build our own warships in our own country. But we must face the present position. We must make a start sooner or later, of course, but we have not, so far, begun this work. Before we can start it we must have the necessary plant. It will take a very considerable time, and involve a great deal of expenditure, to lay down the plant necessary for the construction of the larger of these vessels. It may well be that the smaller .vessels could be constructed here, but I feel convinced that it will be many years before Australia will be in a position to lay down and construct the larger vessels upon anything like as satisfactory conditions as those which would apply to their construction in the Old Country. I remember, also, that time is the essence of this matter. We have been told repeatedly that it is .necessary that we should put our house in order as soon as possible, and it will be about three years before we can expect the proposed naval unit to be completed, even under the most favorable circumstances. We should be unduly hampering the Government if we inserted a provision o± this kind in the Bill. The adoption of the amendment could do no more than express the desire which is shared by every member of this Parliament that, in this matter we should, as far as possible, assist ourselves. We are taking steps in the establishment of ammunition and small arms factories to secure our self-dependence in other directions, and we all hope to see the principle carried further. We must crawl before we can walk, and walk before we run, and it seems to me that the amendment indicates a desire on the part of some honorable senators that we should attempt to run before we have learned t© crawl so far as the building of warships is concerned. It would be better to leave it to the Government to do what they consider best in the interests of Australia. They will always be amenable to Parliament for whatever action they may take, and Parliament will always be in a position to assert its opinion. When we consider the personnel of the Government, honorable senators will agree that there are members of it who are in strong sympathy with the principle of having as much of this work done in Australia as possible.
– I have my doubts about some of them.
-Colonel Sir ALBERT GOULD.- That may be; but I think we are all agreed that it is desirable that Australia should be in a position to assist herself. ‘ As soon as the vessels of the fleet unit arrive in Australian waters, and repairs to them become necessary, that work will have to be done here, and it will serve to educate our artisans in this class of shipbuilding. It is simply impossible to emphasize too strongly the statement made by the Vice-President of the ExecutiveCouncil that, in the matter of war ships and war materiel, the only quality we can afford to purchase is the. very best. In my opinion, this matter should be left entirely in the hands of the Government, particularly at the present stage, and it wouldbe unwise to begin the experiment of building vessels of war in these watersuntil we have greater experience of the work.
– This Bill proposes the initiation of a loan policy ; but it also proposes the creation of an Australian fighting unit, which we are all agreed should be ready within the time specified, namely, about two and a half years. The amendment is one which must appeal to the sympathy of the Australian people generally.
– We want something, more than sympathy. We want something practical.
– Can the honorable senator show the Committee the practicability of inserting this provision in the Bill? He must know that it would require an enormous amount of money to lay down the necessary plant, and that unless we imported a very large part of the labour necessary, we could not have the fleet unit constructed in the time prescribed. If we attempted to construct these vessels with Australian labour, under present conditions, supplemented by a few workmen imported from the Old Country, they would be almost obsolete before their construction was completed. There is a general desire that Australia should be a self-contained and self-supporting country. But we have a great deal to do be-fore we can reach that stage in the manufacture of vessels and instruments of warfare. We have still to develop, to a very great extent, our iron industry, and Senator Findley is trying to introduce into a measure which contemplates the creation of an Australian fighting unit in two and a half years, a practically impossible condition.
– It would only bluff the whole thing.
– I do not think that is the intention. ) agree with the principle underlying the amendment, and, no doubt, something might be done in this direction in the construction of the smaller vessels ; but, if we desire that Australia shall be represented in the Empire’s fighting line with a fleet unit in a reasonable time, we should not attempt to impose the condition which Senator Findley now seeks to lay down.
– I cannot understand why the Government! object to the amendment, which simply der clares that where it is practicable the work of building the vessels of the new fleet unit should be done in Australia.
– Without any time limit ?
– No, not without a time limit. But it strikes me that this question of time has been raised rather suddenly. If anybody had suggested twelve months ago that time was an element in the construction of a fleet for Australia, he would have been laughed at. Did not Sir George Reid say, in Sydney, “ What is the use of humbugging with these tinpot vessels when we have somebody else to defend us”? We know, too, that the late Government were subjected to all sorts of criticism, because they had the temerity to say that one of . the torpedo-boat destroyers should be put together in Australia. Now, for years past, a good deal of sympathy has been expressed with Australian industries. But very little has been done to give practical effect to that sympathy. For instance, two years ago, an attempt was made to get the new mail steamer fleet constructed locally, and certain gentlemen visited Australia for the purpose of reporting upon the suitability of certain sites for ship-building.
– The Government have been twelve months endeavouring to make up their minds where they will have the third torpedo-boat destroyer put together.
– I think we can easily guess where that work will be undertaken.
– At Williamstown ?
– No, I think it will be undertaken some 500 or 600 miles from Williamstown. If the new mail steamers had been constructed in Australia it would have been necessary to import a certain quantity of plant, just as it will be necessary to import a certain quantity of plant to put together the third torpedo-boat destroyer? Is that plant to be afterwards laid aside? It appears to me that in connexion with the building of ships, we are undergoing very much the same experience that we underwent in connexion with the manufacture of locomotives. A few years ago, there was not a Government in Australia which imagined that it would be justified in incurring the expense involved in securing the necessary plant and in training the requisite men for the manufacture of these engines. The whole of them were imported from England and
America. Years elapsed before the State Governments realized the desirableness of building their own locomotives. But today scarcely any State dreams of importing locomotives. At the time of which I speak, the same arguments were used as were employed by Senator Gould today. It was urged that though we might be competent to effect repairs to an engine we were not capable of constructing one. To-day we occupy a better position so far as the building of ships is concerned than we formerly occupied in regard to the manufacture of locomotives. What earthly reason is there why the same course should not be followed? Senator Mulcahy has told us that to build these ships we should require to import a considerable quantity of labour. If it be necessary to import skilled labour, there is no objection to that.
– It is not a question of skill but of special training.
– But skill is the outcome of special training. We have sent Home a number of artisans to learn shipbuilding, and yet we are now told that after the third torpedo-boat destroyer has been put together in Australia, no more work of that kind will be done locally.
– What the honorable senator is saying is quite contrary to the statement of the Vice-President of the Executive Council.
– Under Senator Findley’s amendment, if time be the essence of the contract, and we have not the skilled labour available, none of the work, of building this new naval unit would be done in Australia. If the Committee rejects that amendment, I do not think that it will be reflecting the opinion! of the people. There is no reason why we should not make a start in this matter. Nobody dreams for a moment that Australia is going to wait until she is able to build a big war vessel herself. But so far as the small craft are concerned, there is no reason why their construction should not be undertaken within the Commonwealth. Senator Findley’s proposal does not affirm that the vessels shall be built in Australia, but- merely that so far as practicable they shall be constructed’ locally.
.- The eleventh-hour anxiety and zeal manifested by the Government in respect of the establishment of an Australian navy is to me somewhat amusing, because 1 know that a short time ago some members of it ridiculed the proposal of the late Ministry to establish the nucleus of an Australian navy, and to have some of the vessels built locally. . We have been told by the Vice-President of the Executive Council that in this matter time is all important. That is directly the reverse of what we were told a few brief months ago. Only in February of this year an agitation was promoted by certain interested persons in favour of calling this Parliament together a month earlier than usual for the purpose of obtaining its sanction to the presentation of a Dreadnought to the Mother Country. At that time we were assured that if we did not give a Dreadnought to the old land, something very serious might happen. That proposal, however, fell stale and flat.
– It is in the Bill.
– The offer of a Dreadnought was to be made forthwith, and the vessel was to be employed in the North Sea.
– - Is not the British Navy in the North Sea?
– The proposal at that time was not to have a Dreadnought stationed in Australian waters. The vessel was to be presented to the Mother Country. But as soon as the Fisher Government were removed from office the project was abandoned.
– -The first step taken by the present Government was to offer a Dreadnought to Great Britain.
– It is significant that we have never been made acquainted with the reply which was received by the Government.
– The reply was tabled.
– In effect the Imperial authorities said that we had better have a fleet off our own coast.
– It said that we had better have something more than torpedo boats.
– Does the VicePresident of the Executive Council imagine that the Fisher Government were going to begin and end -their naval scheme with torpedo boats? The reasons which have been advanced by the honorable gentleman against the amendment have no strength behind them, because in one breath he stated that it could serve no useful purpose, whilst in the next he declared that if it were carried it might render dif ficult the operations contemplated by the Government in regard to the building of the fleet.
– I did not say that.
– I hope that the Committee will approve the amendment.
Question - That the words proposed to be inserted be inserted (Senator Findley’s amendment) - put. The Committee divided.
Majority … 3
Question so resolved in the negative.
.- In order to further test the sincerity of Protectionists in the chamber, I move -
That after the word “ Commonwealth,” line 4, the following words be inserted : - “ and of the vessels comprising such unit those known as torpedo destroyers shall be built in Australia.4’
If that amendment is made, I shall then ask the Committee to insert after the word “ and “ in the last line the words “ such moneys.” If the two amendments are made the clause will read -
The moneys raised by virtue of this Act may be expended towards the cost of a Fleet Unit for the purpose of the Naval Defence of the Commonwealth, and of the vessels comprising such unit those known as torpedo destroyers shall be built in Australia, and such moneys are hereby appropriated accordingly.
Surely the Minister cannot object to the insertion of the words, in view of his assurance that it was not at all unlikely that the work in connexion with the construction of the torpedo destroyers would be made available to Australian workmen. If that is the intention of the Govern- merit, it ought to be stated in the Bill in black and white, because we do not know how long they may last.
– I should like the honorable senator to tell me how he differentiates his present amendment from that which the Committee has just negatived? It seems to me that the two amendments are practically alike.
– This amendment is definite, whereas the “previous one was, according to Senator Millen, vague. He pointed out the difference of opinion between Senator Pearce and myself. He said that I was anxious that if it were possible the Dreadnought shall be built here, whereas Senator Pearce desired to have the torpedo destroyers built here. There is no ambiguity about the present amendment, and I hope that the Government will see their wav to accept it.
– I regret to say that I cannot receive the amendment, because it is practically the same as the one which the Committee has just negatived, and which provided that, as far as possible, the fleet should be built here. It was generally admitted that the large vessel could not be built here, and it was suggested that under the amendment,’ if made, the torpedo destroyers could be built here. Having been defeated on that amendment, the honorable senator now proposes in explicit terms that the torpedo destroyers shall be built here. The amendment also proposes to increase the grant and the burden on the people. It is laid down in May that the Committee cannot increase or alter a grant, or even express an opinion in regard to its destination. For that reason also the amendment is out of order.
– Do I understand, sir, that underlying the objection which you now raise, is the difference between the cost of the destroyers in the Old Country and their cost in Australia?
– That is one.
– That is the strongest possible reason why my amendment should be accepted.
– The first reason which I gave - that this amendment is practically the same as the last one - is fatal.
– But you gave three or four reasons why you ruled the amendment out of order, and you emphasized your last reason.
– I rule the amendment out of order.
– I have no desire to come into conflict with, the Chairman, but I feel strongly when he says that he rules the amendment out of order, because the difference in cost “is in favour of the torpedo destroyers being built abroad.
– Does not the honorable senator see that this amendment is the same as the other ?
– No, if is altogether distinct from the other.
– I must rule that it is the same.
Clause agreed to.
Clauses 11 and 12 agreed to.
Clause 13 (Provisions relating to Commonwealth stock inscribed in the United Kingdom).
– Sub-clause 1 says -
Inscribed Stock may be inscribed and transferred in a register kept in, the United Kingdom by some bank, Commonwealth officer, or person, appointed for that purpose by the GovernorGeneral.
Does the order in which the various authorities are set out indicate the order in which the Government exalt the depositories of inscribed stock? It will be remembered that one State in the group has broken away from the ring, and is inscribing its own stock. Are we to understand that the inscription of the stock is to be undertaken by a bank and, failing that, by a Commonwealth officer?
– No. There are three alternatives, neither one taking priority over the other.
– I hope that the Commonwealth will come to the decision to inscribe its own stock, because once it got into the hands of a bank it would be very difficult to get out of them.
Clause agreed to.
Clause 14 -
Commonwealth securities, and the income derived therefrom, shall not be subject to taxation by the Commonwealth.
– Does the clause also mean that the income from Commonwealth securities shall not be subject to taxation by the State?
– That is what I thought. A man will have to pay a tax on his income to the State from the Commonwealth securities.
Clause agreed to.
Clauses 15 to 19 and title agreed to.
Bill reported without amendment.
Motion (by Senator Millen) agreed to -
That so much of the Standing Orders be suspended as would prevent the Bill being passed through its remaining stages without delay.
Report adopted, and Bill read a third time.
[3.30]. - I move -
That this Bill be now read a second time.
Under section 87 of the . Constitution there is payable to the States not less than threefourths of the Customs and Excise revenue of the Commonwealth up to 31st December, 1910. At the Premiers’ Conference held in August, it was agreed between the Prime Minister, on behalf of the Commonwealth - subject, of course, to the approval of Parliament - and the Premiers of the States, that towards the payment of old-age pensions the States should permit to be deducted the sum of £600,000 from the revenue payable to them for the year ending 30th June, 1910. In the Constitution Alteration (Finance) Bill recently passed it was provided that, notwithstanding anything contained in section 87 of the Constitution, the ‘Commonwealth might in the year beginning 1st July, 1909, apply out of the net Customs and Excise revenue any sum not exceeding £600,000 over and above the one-fourth of net revenue. It was also provided that section 87 of the Constitution should cease to have effect. In the Conference to which I have referred it was agreed that the £600,000 should be deducted in the following proportions - that the pension States, New South Wales, Victoria, and Queensland, should contribute 3s. per head, and that the non-pensions States, Western Australia, South Australia, and Tasmania, should contribute 2s. per head. That understanding was embodied in the third paragraph of the agreement, which provided that in recognition of the heav obligations incurred under the old-age pensions legislation, the Commonwealth might during the current financial year withhold from the moneys returnable to the States such sum, not exceeding £600,000, as would provide for the actual shortage from the revenue at the end of such year, if such shortage amounted! to £600,000; and that, as I have already stated, the pension States should contribute 3s. per head, and the non-pension States 2s. This Bill seeks to carry out that arrange ment. It is only fair to tell the Senate that it will not come into operation unless the Constitution Alteration (Finance) Bill is at the coming general election duly accepted by the people. In other words, unless the Constitution be altered under the terms of the Finance Bill, this Surplus Revenue Bill will not have effect: but if at the referendum the Finance Bill is accepted, this measure will enable us to avail ourselves of the £600,000, which would otherwise be returnable up to 30th June, 1910.
Question resolved in the affirmative.
Bill read a second time, and reported without amendment.
Standing Orders suspended and Bill passed through its remaining stages.
– I move-
That this Bill be now read a second time.
A very few words will suffice to explain the objects of this measure. It deals with three matters. The first is a proposal to increase the salary attached to the position of Public Service Commissioner from £1,200 to £1,500- a year. The next is to provide an increased maximum salary in the Clerical Division of the Public Service. The third is to extend the time of employment during which the Post and Telegraph Department can retain telegraph messengers. When the Bill creating the position of Public Service Commissioner was under review, it contained a. provision that the salary attached to the office should be £1,500 per annum. That amount was reduced on the motion of Senator Dobson to £1,200. The other House assented to the reduction. But it is important to remember that many of those who voted for the reduction, and Senator Dobson who moved it, indicated that they did not regard £1,500 as an unduly large salary to pay to the Public Service Commissioner, and that if the gentleman appointed was able to organize the service, and to discharge his duties well, it would be reasonable later on to increase the amount to £1,500.
– Hear, hear; he has done good work.
– Some time since, when the period for which the Public Service Commissioner was appointed expired, and’ the late Government had under review the question of renewing the ap- pointment, or making other provision for carrying on the work, the Commissioner invited the Government to review the amount of his salary. TheFisher Government re-appointed Mr. McLachlan, and gave him an assurance that the question of an increase of his salary would be submitted to Parliament in due course. The present Government fully indorse the determination arrived at by their predecessors. Hence this Bill. The Public Service Commissioner to-day has control of salaries amounting to £1,862,000; and if to that there be added amounts involved in other expenditure under his control relating to overtime and allowances, it is found that he controls expenditure in the neighbourhood of £2,000,000 per annum. He has 14,000 officers under his control. It will be seen that he has no light duty to discharge. While the Commonwealth is obtaining fair service for the amount paid, it should not hesitate to pay its officers well. The business of our Departments has increased 50 per cent, since the Commissioner was appointed, and there . is no reason to suppose that during the next seven years the increase will not be as great as it has been in the past. These are good and sound reasons why, following the practice which has been observed both in private and public employment, we should grant the increase, not only in view of past faithful service, but also because we recognise that the present occupant of the office is fully competent to discharge the responsible duties with which he is intrusted.
– He gets a high salary now.
– But is it high having regard to the duties attached to his position ?
– The Secretary of the Department of Home Affairs has more responsibility than- the Commissioner.
– It may be that the Secretary of the Department is not paid enough.
– Why do not the Government propose to increase his salary?
– If my honorable friend proposes to move in that direction I shall be inclined to listen to any arguments he may adduce. But can it be said that we are paying too much to the Public Service Commissioner?
– All I can say is that there is no position outside-
– How can we judge from what is being done outside?
– It is the only way in which we can set up a standard. If we find that larger salaries have been paid in private employment for such work as is being performed by one of our own officers, it is fair to assume that we are not paying enough.
– Where are they?
– I do not hesitate to say that, so far as the higher and more responsible officers of the Public Service are concerned, they are not paid on a parity with the heads of great businesses outside.
- I know of mine managers controlling only 300 or 400 men who are getting £1,500 a year.
– Yes, there are many mine managers who are paid a higher salary.
– The Public Service Commissioner has 14,000 officers under his control.
– Nothing of the kind.
– According to the figures supplied to me by the Department, he has under his control 14,000 officers.
– He has nothing to do with the temporary men.
– A Minister finds that he cannot get a temporary man without applying to him.
– The position, irrespective of the occupant, is worth the salary which is now proposed. I remind honprable senators that it is one of growing importance, and the Commonwealth should be placed in a position at all times to secure the services of a first-class man to fill it. I pass now to the next proposition, which is to increase the maximum salary of class 5 of the Clerical Division from £160 to £180 per annum.
– What a contrast.
– Does the honorable senator mean by his interjection to suggest that every man in the Public Service should be paid the same salary.
– No, but that there should not be such a distinction between any of them.
– If Senator W. Russell lays down the doctrine that the highest officers should be paid no more than their subordinates, we might just as well post up outside of our public offices a notice that all men . of special qualifications and brains should apply themselves to- commercial undertakings. The Commonwealth can only hope to get the best men for the work by paying them salaries to some extent on a par with those which can be obtained by industrious and clever men outside.
– The Public Service Commissioner is largely responsible for the present disorganized condition of the Post Office, and the Government propose to add to his salary.
– That is not a fact.
– Dealing with the proposed increase of salaries in class 5 of the Clerical Division, the Public Service Commissioner advised the Government in June of last year that, in his opinion, there was justification for the increase now proposed. It will be made available in two increments of £10 each at intervals of five years after the individual officer has reached a salary of £160. The sanction of the Government of the day was obtained for the proposal, .provision was made in the Estimates for 1968-9 to cover the increases, and they were paid. On the passage of the Estimates an amount of £11,000 became available, but the question was then raised as to whether the increases could be legally paid under the terms of the Public Service Act. The matter was submitted to Mr. Hughes, as AttorneyGeneral, who, if I remember aright, expressed the opinion that they could be paid, with a reservation as to whether they could be paid annually as increases of salary, or merely as allowances. The practical effect was, however, that the officers were paid. A similar provision is on the Estimates for the current financial year, but the present Attorney-General is of opinion that section 78 of the Public Service Act does not contemplate an annual and regular payment by way of increase to officers who have reached the maximum provided for under the Act His interpretation of the section is that it permits of a special allowance, and not of a regular payment from year to year, which he thinks would be covered by the term “salary.” It is to set at rest any doubt in this matter that this provision is introduced. The only particular in connexion with this part of the Bill to which I need draw attention is that the first of these increments becomes obtainable after the officer has received the present maximum for three years ; and two years later he would be entitled to another increment. I pass now to the third object for which the Bill has been introduced.
The present law requires the retirement of telegraph .messengers who have not been absorbed by the Department, when they have reached the age of eighteen years. Hitherto, owing to the rapid expansion of the Post and Telegraph Department, the Public Service Commissioner has been able to find work for practically all of these lads before they have reached the age of eighteen years. Very few have had to leave the service, perhaps not more than five or six in most of the States, and some of those who have had to leave have not had the best of records, or have been unable to pass a simple examination. For all practical purposes we may say that, so far, the Department has been able to absorb these lads before they have reached the age of eighteen years. But the Public Service Commissioner does not anticipate that their absorption will be so rapid in the future, and not desiring to compel the lads to retire at eighteen years of age, he applied to have the age extended to twenty years. It is believed that the Department will be able to absorb them all if the extension is made. There are about I,600 telegraph messengers in the Department. They enter by a simple examination in three rudimentary subjects. If they pass the examination with 50 per cent, of marks they are eligible for further promotion without re-examination. If they do not obtain 50 per cent, of marks a smaller percentage qualifies them for admission as telegraph messengers, and while so employed they are given the opportunity to pass another examination, and thus to qualify for promotion later on.
– So that it would be their own fault if they did not secure promotion.
– Yes, I think I might say so. In view of the educational facilities afforded in these days, even those lads who have failed in the preliminary examintion to secure 50 per cent., of marks should be able in the course of four years to obtain that percentage in an examination upon the three rudimentary subjects. I believe that any boy whom it would be worth the while of the Department to retain might, ‘ if he saw fit, qualify himself for advancement to other branches of the service. It is necessary that I should say that the extension of two years will not be allowed to lads who do not in the first instance, or at a subsequent examination, show that they have reached a certain standard of education. I have briefly dealt with the three objects of the Bill. Whilst they may invite a difference of opinion, they involve no complication, and I anticipate that the Senate will dispose of the measure almost as rapidly as it disposed of the last under its consideration.
– - I cannot allow this Bill to pass without stating my objection to it. I do not know the Public Service Commissioner. I believe he is a good man, but I think also that he is well paid, and, in my opinion, it is altogether unjustifiable to propose at the present time to increase his salary by £300 per year. I object to that provision in the Bill. I am prepared to strongly support a proposal to better the position of the ‘men who are receiving only £5°* or £160 a 5’ear» but I feel that I should not be doing justice to the electors who sent me here if, at a time when the Commonwealth is being asked to borrow money, I should consent, practically, to throw away money upon a man who is already drawing £1,200 a year.
– - I shall decidedly oppose the proposal to increase the salary of the Public Service Commissioner from £1,200 to £1,500 a year. The Government seem to labour under the impression that he is a much more important officer than is Sir Robert Scott, who is at the head of the real business organization of the Post Office, and is paid only £1,000 a year. The Public Service Commissioner has nothing whatever to do with the principal work for which the Post and Telegraph Department is established. He has merely, on reports of inspectors and permanent heads, to fix the classification and increments of officers of the Public Service.
– He has a good deal more to do than that.
– Perhaps Senator Mulcahy will tell us all about it directly. At present I am giving my version. The Public Service Commissioner has no more to do with the running of the Post Office than has the honorable senator. The man who has to deal with the whole of the work of the carriage of mails, the despatch of telegrams, and the telephone service, is paid £1,000 a year. If that is a sufficient salary for the head of the Post and Telegraph Department, it is much more than sufficient for an officer who has to do merely routine work like the Public Service Commissioner. I did hope that the Vice-President of the Executive Council would give some reasons why he believes that the Public Service Commissioner should be placed above the officer charged with the organization of the Post and Telegraph Department. He did not give one. The only reason I can suggest for this proposal is that in some way or other the Public Service Commissioner has managed to get the ear of the Government, and has been able to bring sufficient influence to bear to secure the proposed addition to his salary. There is another matter upon which we might have some information from the Government. Is it contemplated to make the Public Service Commissioner manager of the Post and Telegraph Department, to give him charge of the running of that Department after the retirement of Sir Robert Scott, and is this proposal merely preliminary to the making of that appointment? If that be the reason for it, I again object, because a much more suitable man might be found for the position.
– The salary proposed for the office of Public Service Commissioner could not be paid to an officer holding the position of Secretary to the Post and Telegraph Department.
– I am pointing out that the position of Secretary to the Post and Telegraph Department is a much more important one than that of Public Service Commissioner.
– It only carries a salary of £1,000 a year.
– This man, if the Government can carry’ their Bill, is going to be paid £1,500 a year. Perhaps Senator Mulcahy will be able to give the Senate some reason why such a salary should be paid to a man who does largely routine work, while only £1,000 a year is paid for the brains of the whole Department, to the man responsible for running the mails in every portion of Australia, and for the organization of the telegraph and telephone systems. I hope that my observations appeal to the business instincts of Senator Walker.
– The grading of the officers of a large institution is a very important work.
– That is so, but the work of the other officer to whom I have referred is still more important, and the salary paid for it is only £1,000 a year.
– The Public Service Commissioner has to deal not only with the Post and Telegraph Department, but with the whole of the Commonwealth Public Service.
– I do not care if he has. As compared with the work of the Secretary to the Post and Telegraph Department, that of the Public Service Commissioner is merely second-class work. It is done on the reports of inspectors and permanent heads. The Public Service Commissioner is merely the registrar of reports sent in to him by men in the service, some of whom are responsible to him ; whereas the whole organization of the Postal Department is in the hands of a man who receives £1,000 a year. If £1,000 be a sufficient salary for the latter officer obviously £1,500 is far too much for the Public Service Commissioner.
– Which way is the honorable senator arguing? Does he mean that the Secretary of the Post and Telegraph Department gets too little, or that the Public Service Commissioner gets too much?
– I am not compelled to say. I am merely pointing out that the more important officer is receiving £1,000 a year. That being so, why pay £1,500 a year to the holder of a position which, to my mind, is an inferior one?
– The question which we have to consider is “Is the position of Public Service Commissioner worth £1,500 a vear? “
– I do not think that it is. If the office of Secretary to the Postal Department be worth only £1,000 a year-
– But we must have a starting point.
– We have a starting point in the salary which is paid to the Secretary to the Postal Department.
– What does the honorable senator regard as a fair salary for that office.
– I am not going to say. Probably the Vice-President of the Executive Council could make very much more elsewhere than he receives here. The same remark is also applicable to Mr. McLachlan and Sir Robert Scott. But if they can obtain more ‘elsewhere they are at perfect liberty to go and get it. It is idle to tell me of the salaries which private companies pay to their managers. They may pay them very high salaries with a view to sweating their employes. But surely in the Public Service we do not do anything of that kind. I have already said that the Public Service Commissioner is, in a great measure,’ responsible for the disorganization which at present exists in the Postal Department. According to a report by the Secretary to the Postal Department he refused to appoint a large number of permanent hands to that Department, although the officer in question had pointed out in the most forcible language that it was absolutely necessary in the interests of the Department that permanent appointments should be made rather than that the work should be performed by temporary officers. The action of the Public Service Commissioner on that occasion, is, I am informed, responsible in a very great measure for a portion of the disorganiza- tion which at present exists in the Postal Department. Another reason for that disorganization is the refusal of the Government to grant the necessary funds for the proper conduct of the Department. They were so eager to return huge surpluses to the States that they starved their own Departments and allowed them to fall into a most disreputable condition, a condition from which they cannot recover save with the aid of time and the expenditure of a great deal of money. There are a number of other matters connected with the work of the Public Service Commissioner with which I could find fault if time permitted. He is sufficiently paid at £1,200 a year. Indeed, I think that he is overpaid. If lie received £1,000 a year, as does the Secretary of the Postal Department, he would be paid quite sufficient. I intend to support that portion of the Bill which relates to employes in the Clerical Division of our Public Service, and I am sorry that similar provision has not been made for the members of the General Division. If the second reading of the Bill be carried I shall submit an amendment to provide for them. In regard to telegraph messengers, I do not think it would be wise to increase the age up to which they may be retained in the service to twenty years. Eighteen years is quite high enough. All the information in my possession points in that direction. The proposal to increase the limit to twenty years merely means stringing on a large number of youn* fellows in the vain hope that they will obtain permanent employment in the Postal Department, a hope which is sure to be blighted in a great many cases. I hold in my hand a return which was furnished in response to a motion tabled by me last year, which shows ‘ that during the four years, i9°3-4, I9°4”5» I9°5-<5> 311(3 1906-7, 2,309 telegraph messengers were appointed, of whom 896 were promoted to the General Division, whilst 461 were retired at the age of eighteen years. I wish to draw the special attention of the Vice-President of the Executive Council to these figures. No fewer than 461 of these telegraph messengers were retired at eighteen years of age. If the age to which they may be retained in the service be increased to twenty years, the number of retirements will, be still greater. It is cruel to keep lads engaged in that capacity until they reach twenty years of age, and then, after they have spent three or four of the best- years of their lives in the service, to turn them adrift. Every year that their withdrawal from the service is delayed renders it more difficult for them to obtain a fresh footing in life. There is so little prospect of advancement from the position of telegraph messenger that I would never encourage a lad to take up that occupation. Instead of offering inducements to young men in that connexion, the opposite course should be adopted. Too many of our boys and young men and young women are looking for positions in the Public Service. During the four years that I have mentioned the number of candidates examined for the position of telegraph messenger was 5,441 , of whom 3,862 were successful. Of the latter number only 2,309 were appointed. So that 100 per cent, more were examined than were appointed, whilst only about 75 per cent, of the candidates passed the prescribed examination. I have already stated that the number of telegraph messengers retired at eighteen years of age within the period I have indicated was 461. Eight hundred and ninety-six were promoted to the General Division, and only eleven to the Clerical Division. So that honorable senators will readily perceive that there is. not much, hope for a lad who enters the service as a telegraph messenger. I have always discouraged youths who have made inquiries of me in reference to this branch of the service. I have pointed out to them the obstacles in the way of promotion and have endeavoured in every way to turn their attention to some method of earning a livelihood which gave more promise of success. I think that the attempt of the Government to increase the age up to which telegraph messengers may be retired to twenty years should be opposed by every, honorable senator who has their interests at heart.
– I do not intend to enter into a prolonged discussion of” this Bill. But I feel compelled to protest against the inclusion in it of the clause which aims at increasing the salary of the Public Service Commissioner from £1,200 to £1,500 per annum. I could have regarded this measure as a commendable one had the Government provided that the £300 increase which it is proposed to grant the Public Service Commissioner should be distributed amongst the girls whom that officer declares are not worth more than a paltry ,£1 per week after they have been in the service for eighteen or twenty years. In the same branch of the service I may add he has also fixed 7s. 6d. as the wage of some employes over whom he has jurisdiction in the matter of grading. I really think that honorable senators ought to view this Bill as one which aims at greasing the fat pig, and at enlarging an authority which seems always to be directed to starving the lowerpaid officers of the service. In mv opinion, the Public Service Commissioner has one of the best billets in Australia. I do not think it can be urged that the work which he performs is worth one penny more than £1,200 per annum which has hitherto been paid to him. I consider that it is a handsomely paid position, and one which entails in a way very little responsibility. It is one of those positions which, I think, any ordinary man with organizing faculties could easily carry out.
– Surely not.
– Yes, quite easily. I admit, of course, that it is a difficult task to draw a line between a salary of 7 s. 6d. a week and a salary of £1,500 a year. I recognise that it takes more than an ordinary man to assess his own services at £1,500, and those of others at 7s. 6d. a week. He must be an extraordinary’ man indeed. We are asked to grant an increase of £300 a year to a man who receives a salary of £1,200., whilst persons who have laboured for over eighteen years in the Stamps Branch, and whose wages he assessed, are still receiving a paltry pound a week, and have had their hours of labour increased without compensation, in order, I suppose, that their remuneration might be brought into accord with certain regulations. In my opinion, the submission of this Bill shows that it emanates from an extraordinary Government.
– To what Government is the honorable senator- alluding?
– To the present Government as well as the past one. I think that any Government proposing to increase the salary of this office from £1,200 to £1,500 seeks to inflict an injustice upon the Commonwealth.
– Which Government first promised to increase the salary?
– It does not matter to me which Government did. This is the only opportunity I have had of expressing my opinion. And if the present Government are redeeming the promise of another Government the responsibility is theirs and not mine. I shall oppose this attempt to increase the salary of the Commissioner, as well as any attempt to increase the salaries of highly paid officers until I have been convinced that the Government and the Commissioner have made a fair effort to remove the stigma which they have placed upon the Commonwealth by paying some girls 7s. 6d. a week, and others who have worked for eighteen years a paltry £1 a week.
– There is a continuity of obligation under which a Government feel themselves in honour bound to carry out any undertaking which may have been entered into in good faith by their predecessors. That is to my mind the only justification which the present Government have for introducing this measure in so far as they propose to increase the salary of an adequately paid official by the amount of £300 which, to most persons, would be a very large salary. I do not like to vote against the Government, but I cannot see my way clear to support the proposed increase, and, therefore, I shall join with Senator Henderson in opposing it. From my connexion with the Postal Commission. I know that the Commissioner, whether he is adequately paid with £1,200’ a year, or whether he ought to receive £1,500, has an enormous responsibility cast upon him. He has to carefully watch over the rights of 20,000 officers to promotion and increment. He has to try to do justice to them on the one hand, and to the Commonwealth on the other. I would not like anything to be said which might imply a reflection on the Commissioner, but, at the same time, I think there is a tendency to increase the expenditure on a particular position beyond that which is fair and reasonable. A salary of £1,200 is, to my mind, sufficient remuneration for the services which the Commissioner renders. It is certainly understood by the public that he will receive that remuneration so long as he is fit to carry out the work of his office, and I hope that he will long be able to serve the Commonwealth. It will be remembered that his first term of office expired during the present year, and that the Fisher Government distinctly promised to him that they would recommend Parliament to increase his salary to £1,500 a year.
– Does the honorable senator think that I would support that?
– I do not know whether the honorable senator would support it or not, but I do not see how the succeeding Government “could honorably repudiate that promise. It seems to me perfectly reasonable that the present Government should have brought in this Bill, but I still think that £1,200 a year is an adequate salary for the position, and on that ground solely I shall oppose the proposed increase.
.- I have not turned up the remarks which I made several years ago regarding the proposed salary for the office of Public Service Commissioner, but I think Senator Millen has correctly stated what I said. I still believe that for the position £1,200 a year is a fair salary. 1 thought it was quite enough to start with, and I wanted 10 keep the expenses down at the commencement, and, therefore, I moved to reduce the amount. But Mr. McLachlan has, I think, won his spurs. He has had an enormous amount of work, responsibility, and anxiety in classifying the Public Service. I utterly disagree with the remarks of Senator Stewart. I think that the Commissioner has worked admirably, and if he had not, complaints would have been lodged from 14,000 officers. I think that he has won his spurs, and has . been most efficient, and, therefore, I shall have very much pleasure in voting, as I foreshadowed seven years ago that I might do, for an increase to him. But if we were deprived of his service by resignation or death, I should vote £1,200 for the office, which I think is quite enough for any new man. Senator Stewart is altogether wrong when he says that such salaries are not paid in commercial circles.
– No; I said that we had nothing to do with that.
– I regret if I misunderstood what the honorable senator said. In Tasmania, we have ‘ recently inr creased the salary of the manager of the leading bank - it has no branch outside the island - from £1,500 to £2,000, because most of the shareholders believed that he had admirably managed the institution, and, because the Public Service Commissioner has earned this proposed increase, I intend to vote for it.
– I do not think that the Parliament should have been asked to deal with this Bill at present, because for a considerable time there has been an inquiry proceeding with- regard to the largest number of civil servants who come under the control of the Commissioner. In my opinion, the Parliament should have been supplied with the results of that inquiry before it was asked to deal with the position of any public servants. So far as increasing any salary is concerned, I do not propose to repeat the arguments that have been advanced from this side, .except to say that, in my opinion, the Commonwealth is getting into a rather parlous condition. We have been told that, as regards other branches of the Public Service, it was not fair to ask for increments seeing the comparatively small amount which was at the disposal of the Commonwealth, and the enormous number of obligations which it was taking on. The Government are now asking us to increase the salary of one officer by a sum which, as Senator Mulcahy said, would make a very fair salary for a considerable number of public servants. Whilst we have obligations piling up on the Commonwealth, and the average employ^ does not receive anything like the same consideration as the Commissioner, we should be very chary about consenting to a proposal of the sort. If an amendment is moved, I shall vote against the proposed increase to the Commissioner. Another reason why I think the Bill should not have been brought forward at present is that, so far as increments are concerned, it deals with only one branch of the Public Service, and that is the Clerical Division. The men in the General Division are receiving no recognition, so far as the extra allowance for long service is concerned.
– As far as payment is concerned, they have. a
– Under this Bill, no provision is made for the General Division. When we remember that an inquiry is now proceeding affecting a large number of these officers, and that we do not know what the recommendations of the Royal Commission will be, it seems to me to be fatuous to deal with one small branch of the service. There will have to be a general overhaul of our legislation on this subject. The Public Service Act will have to be reviewed. I suppose that the Government will attempt to carry out some of the recommendations submitted by the Commission. Therefore, it seems it would be better to leave the matter over. I intend now to read a letter from a member of the General Division, who speaks for a considerable number of fellow employes -
Mail Branch and their increments as provided by the Public Service Classification : Assistants and Letter Carriers Assistants at the age of 21 years, £110 per annum - all must remain on this £110 per annum for three years - then three increments, i.e., £114, ^120, and £126 - remain another three years, then two more increments to £132 and ^138 per annum.
As a letter carrier for five years on ^138 per annum a long-service increment is provided of £6 to ^144 per annum, and another after five years longer, provided the official is over the twenty years’ service which by the scheme eleven years’ service is provided as a minimum for an official to receive ^138 per annum.
The scheme also provides for letter carriers and others to rise to the sorting grade - £144, ^’150, and .£156 per annum.
Senior sorter, £162 and ^168 per annum, provision for promotion from ^156 to ^162 is arranged that two-thirds of the whole staff (sorters) shall be on a salary up to ^156, and one-third senior sorters ^162 to ^168 per annum. No provision is made for any Long Service increments, the majority being on those grades for many years, and with service extending up to thirty years. The same applies to the next grade - Despatching Officers, £174 to £180 and stationary.
If the same consideration of Long Service increments were extended to the General Division, particularly for those on the Grade ^156 and £168 per annum, after three years’ increment of £6, the same for those £180 per annum with such long service and the reduction of the Letter Carriers Long Service of five years to three years the same as the Clerical, who, prior to their receiving their ^160 per annum, have regularly received annual increases of £20 per annum, whilst only £6 is provided for the General Division, per annum.
It will therefore be seen the provision as per Amending Bill is only for the Clerical, which is not in any way fair or equitable to deserving officers who are attached to the General Division.
The rapid progress of the Clerical Staff was commented on by the Public Service Commissioner at the Postal Commission, who stated it was an Act of Parliament, hence he must pay, but he thought a £20 increment too high, as it enabled a youth to obtain the £160 when very young, and causes trouble if he had to remain on the maximum, and by this Sill the favored are to be further considered, we, the General Division, asked to be also considered.
The letter affords evidence that this measure will cause some amount of dissatisfaction in a large branch of the service, for which no provision is now made.
– A far larger increment has gone to the General Division.
– The honorable senator is quite right if he speaks of the payment in bulk, because there is a larger number . of men in the General than in the Clerical Division. I’ have not had time to inquire into the truth of the statements contained in the letter; but I read it to show that the Bill does not do justice, except to a limited number of officers. This Bill handles the matter in a piece-meal fashion, simply because the late Government made a promise to the Commissioner to increase his salary, and the salaries of some of those under him. As to the telegraph messengers, I agree with Senator Stewart thatit is hard to bring lads into the service at the age of fourteen and turn them out at eighteen. A large number have been dealt with in that way.
– Not a large number.
– I- think Senator Stewart showed there had been 400 or 500 in. five years.
– Do they not know the position before they come into the service?
– Any man who takes work at 4s. or 5s. a day knows the position before he accepts it. But they are not free agents. They have to take the work offered to them. Probably the parents of these boys regard an appointment as telegraph messenger as a probable steppingstone to permanent engagement. I regard the proposal to extend the term of employment as doubtful. A boy at eighteen years of age may have an opportunity of entering some other occupation, but certainly he will not have that opportunity when he reaches the age of twenty. The result is that it will be worse for boys to leave the service at that age than at eighteen. Let me quote from the report of the Public Service Commissioner for 1908, where he deals with the position of the telegraph messengers
In the evidence given before the Royal Commission on Postal Services, the statement has repeatedly been made by witnesses that difficulty exists in obtaining suitable boys as telegraph messengers, owing to the uncertainty of reten tion after reaching the age of eighteen years of” age. In this connexion, it may be mentioned that during 1907, of the 62 boys who were retired at eighteen years of age, only six (6) were qualified for promotion beyond the rank of telegraph messenger. Two (2) of these boys(Victorians) although eligible, were not promoted because of unsatisfactory service, while the remaining four (4) were compelled to retire owing to lack of suitable vacancies in South. Australia at the time. No boy who was eligible for promotion was retired in any of the remaining four States. Of the twenty-four retirements at eighteen years of age during 1908, only one boy (in South Australia) was eligible for promotion, and he would have received promotion only for the fact that a number of telegraphmessengers at ; £110 had first to be provided for. This was due to the unsatisfactory State conditions under which boys were kept at messenger duties until a late age. It will thus be seen that, excepting in this one case in South. Australia, no qualified telegraph messenger was required to leave the Service at eighteen years of age during last year.
During the past two or three years, there has been a great extension of post and telegraph business. More money has been spent on the Department. The number of those employed has been increased by nearly 50 per cent. As a result, a large number of messengers have been appointed. I doubt whether the same rate of progress will be continued in the near future. Consequently there will not be so many opportunities for promotion as there have been during the past two or three years. The result will be that the lads will probably not have as good a chance of being retained. We shall then have the spectacle of a large number of them being passed out of the service at twenty years of age. I do not think that is a good thing from the public point of view. It would be much better, if they are to find some other occupation, for the lads to get out of the service at the age of eighteen, or even younger. After a lad has reached the age of eighteen years it takes him some time to get out of the groove in which he has been working, and the position will be worse if the age is extended to twenty years. We shall, as a result, have a number of youths thrown out of the service every year who will be incompetent to perform the duties of other employments in which they might have succeeded if they had engaged in them at an earlier age. A table submitted by the Public Service Commissioner shows that the number of telegraph messengers in the service on the 1st January, 1908, was 1,500. Of that number, 443 were promoted. The retirements under section 10 of the Post and Telegraph Act num- bered twenty-four. There were 128 voluntary resignations during the year. These undoubtedly were boys whose parents began to realize that there was very little chance that their sons would be retained in the service of the Department.
– Does the honorable senator mean to say that a lad who has reached the age of twenty years has no chance of getting on except in the Public Service?
– No; I am pointing out that if a lad remains in the service until he is twenty years of age he will not have the same opportunity of securing employment in some other occupation, and of becoming proficient, in it that he would have if he entered it at an earlier age.
– They are kept in the Post and Telegraph Department during their learning years.
– Undoubtedly. A lad apprenticed at fourteen years of age is supposed to have learned his trade at twenty or twenty-one years of age. He ought to be a full-fledged journeyman at that age, and be able to secure work at his trade anywhere. Senator Gray would not care to take a young fellow into his employment at twenty years of age, and then teach him his trade, though he might employ him to drive a cart or to do pick and shovel work.
– That is correct.
– For that reason there is much to be said against this proposal. Some boys have continued in the service until they reached the age of eighteen years, and altogether 400 or 500 of them have been passed out. If we extend the ages proposed the position will be far worse. According to the Public Service Commissioner the dismissals for the year I have referred to numbered thirtyeight. The number retiring by abolition of office was thirty-eight, and by cessation of office, 133. Many of these boys have thought it well to get out of the service, although they may have been eligible for promotion, because they found that there were no vacancies to which they could be appointed. The Public Service Commissioner points out that we cannot get smart lads who will be a credit to the service to join it, because of this condition. One is faced with a difficulty in dealing with the matter, but in spite of all that may be said to the contrary, I think it would be wiser to reduce rather than to extend the age. If a lad is unable between the ages of fourteen and seventeen to pass a simple ex- amination, he will not take very much trouble to fit himself to pass it after he is seventeen years of age. -
– What is the reason for extending the age from eighteen to twenty years ?
– It is presumed that lads who cannot pass the examination at eighteen will apply themselves to study, and will be able to pass it before they are twenty years of age. I feel that the Bill has been introduced at the wrong time altogether. It should have been delayed until we were fortified with the information to be obtained from the evidence given by officials and others, and the reports of the persons who have been making inquiries as to the best method of dealing with these questions. It is not possible for honorable senators to vote against the second reading of the Bill, because it deals, amongst other matters, with a section of the public servants who have been promised certain increases.
– They have been getting them.
– On that account, we cannot throw out the Bill, but if it were not for that, I should be prepared to throw it out, and leave it to the Government to pay the increments to the officers to whom they have been promised, and to introduce a retrospective measure later to ratify the payments.
– Were it not for clause 3 of this Bill, I should feel compelled to vote against the second reading. I know that money has already been paid as long service increments to officers of the fifth class of the Clerical Division, and in passing clause 3 we shall be ratifying something which has already been done. I am satisfied, however, that the salary at present paid to the Public Service Commissioner is a sufficient remuneration for his services. I do not think that either the position of our finances or the work which he is called upon to perform justifies us in paying him an additional £300 a year. I shall support the second reading in order to secure the passage of clause 3, but in Committee I shall oppose the proposed increase to the Public Service Commissioner. I shall only briefly refer to the clause affecting telegraph messengers. I feel that if we extend the age, as proposed, we shall be inflicting further hardship on these lads, and on their parents. There is no doubt that many of them enter the service in the hope that they will continue in it, and may rise to the highest positions, and their parents are prepared to encourage them in their ambition. But what are the facts ? It has been shown that at the age of eighteen years, many of them resign voluntarily, or because they have been unable to pass an examination are compelled to resign. la my opinion, the age for their compulsory retirement should be reduced rather than, extended. In some cases, a lad apprenticed as a carpenter, a boilermaker, or an engineer, is a journeyman at twenty years of age. I have known lads who have served their apprenticeship by the time they have reached that age, and have secured their journeyman’s papers. Though they might not be first-class tradesmen, and could not expect to receive the highest wages paid in their trade> they are able- at least to secure the minimum wage of the trade. But these boys, who will be thrown upon the world at twenty years of age, will be too old to learn a trade, and they may be physically unfit for any laborious employment. It should not. be. forgotten that necessity often compels the parents of these lads to allow them to enter the service in order that they may assist them in paying the expenses of the household. I do not wish to prolong the discussion, and I should not have spoken at. this stage were it not for the fact that by voting for the second reading, it might have been assumed that I support the Bill in its entirety. It contains two clauses which I think ought not be passed. The Public Service Commissioner at present receives a salary of £1,200 a year, which is £200 more than the salary paid to the secretaries of four important public Departments - the External Affairs Department, Post and Telegraph Department, the Treasury, and the Home Affairs Department. I believe that the duties of all these officers are as responsible and arduous as are those of the Public Service Commissioner. In the circumstances, I see no reason for increasing his salary by £300 a year. It has been stated by Senator Mulcahy that the Labour Government intended to submit a similar proposal, and expected to carry it with the support of their followers. So far as I am concerned, I can say that if the Labour Government had remained in power and had submitted the proposal I should have opposed it as strongly as I do to-day, and I should be as free to vote as I thought fit upon it, as are honorable senators opposite.
-The honorable senator does not often show it.
– I have shown it on all occasions when the measures submitted, no matter by what Government, have not dealt with a matter included in the Labour platform. In common with other members of the Labour party, I have repeatedly stated that on all questions outside our platform we are free to vote- as we please. We have exercised that freedom whenever the occasion for so doing has arisen. Consequently, it cannot be urged that, because the Fisher Government intended to propose an increase of the salary of the Public .Service Commissioner, members of the Labour party are bound to support it. Had the late Government submitted any such proposition I’ should have voted against it, as I intend to vote against it now. I am of opinion that clause 4 of the Bill should be re-drafted with a view to reducing the age limit up to which telegraph messengers may be retained in the service to seventeen years. If that limit be adopted, they will, if turned adrift, have a better chance of entering other avenues of employment. Thus justice will be done to themselves and their parents, whilst the service will also have a better opportunity of securing competent officers.
– Reference has been made to the circumstance that the proposed increase in the salary of the Public Service Commissioner is a legacy from the late Government. That statement is correct in the sense that the Fisher Government in reappointing that officer, reappointed him at a salary of £1,500 a year, subject to the ratification of Parliament. In other words, they promised to put that sum upon the Estimates. But I may add that that salary does not, by any means, represent the proposal put forward by the Public Service Commissioner himself. It represents the minimum which he was prepared to accept. The late Government were placed in a very awkward position in that the Public Service Commissioner and the Department of Home Affairs were under the impression that that gentleman’s term of office did not expire until the end of the present year, and were acting on that assumption. But the Attorney-General on being appealed to held that the appointment expired on a certain date which was then only some few weeks ahead. The position, therefore, was, that under the Public Service Act the Government had no power to make a single appointment to any Department, except on the recommendation of the Public Service Commissioner, and hadwithin a few weeks, either to appoint another Public Service Commissioner, or to re-appoint the present one. It was altogether too late to think of calling for applications for the position, and consequently the only question which we had to consider was whether we should re-appoint the present Commissioner. Mr. McLachlan indicated the terms under which he should be re-appointed, but those terms are not embodied in this Bill. Doubtless, they are known to the Vice-President of the Executive Council. The salary of £1,500 a year was the minimum salary at which he wis prepared to retain his position. There is this to be said in favour of the amount prescribed in the Bill, that when the original Public Service Bill was drafted; and an engagement was entered into with Mr. McLachlan, the salary fixed in the measure was £1,500 per annum. He accepted his appointment under the impression that that salary was to be paid to him. Under that idea he resigned his position in the New South Wales Public Service and commenced to organize his office here before the Bill had finally passed.
– He accepted the appointment subject to the Bill.
– But throughout he understood that the salary payable to him would be £1,500-
– Does the honorable senator know what he was receiving in New South Wales?
– I think it was £T,000 a year. But in that State the salary carried pension rights. I repeat that Mr. McLachlan accepted his position in the belief that he was to receive £1,500. He commenced his duties whilst that amount was contained in the original Public Service Bill. The late Government, recognising this, thought it was only fair that his salary should be increased to the amount of his original bargain with the Commonwealth. But that does not represent all that Mr. McLachlan demanded. He asked not merely that his salary should be increased to £1,500 a year, but that a Deputy Public Service Commissioner should be appointed. The Fisher Government would not agree to that. But they consented to place upon the Estimates a sum which represents the salary he was originally led to believe he might expect.
– Did he want a salary °f £2,000 a year?
– I think that he asked for the salary which is contained in this Bill, and for the appointment of a Deputy Commissioner. Personally, I think that the Public Service Commissioner has done some good work. I do not agree with all that he has done, but he is a valuable, hard-working officer, and occupies a very responsible position. Senator Stewart has argued that he does not occupy as responsible a position as does the Secretary of the Postal Department. But if the honorable senator will read his duties as they are set out in the Public Service Act he will see that the Commissioner is practically charged with the supervision of the administration, not only of the Postal Department, but of every other Department.
– He has nothing whatever to do with the internal working of the Departments.
– The honorable senator knows that new appointments, and the classification of officers, &c, are all under the control of the Public Service Commissioner. In the circumstances which I have outlined, I shall support the salary which is proposed in this Bill. As regards the measure itself, I do think it is a mistake to patch up the Public Service Act in the way that is proposed. Will anybody suggest that the two objects at which this Bills aims are the only things in our Public Service Act which- require amendment? Here is an anomaly in the Act which badly needs rectifying. I brought it under the notice of the Public Service Commissioner whilst I was Minister of Defence, and he agreed with me that it was a manifest injustice. There are men who. are called armourers, who have ‘been employed in the Defence Department tor years. An armourer is a man who has to clean and mend arms. In short, he is skilled in the knowledge of arms. Yet these men are ineligible for appointment to such positions under our Public Service Act, whereas a telegraph messenger who knows nothing whatever about arms is eligible for appointment. Similarly we have in the Naval Branch of the Department men who are good oarsmen, but who are ineligible for appointment to a Customs boat, whilst a man who can shin up a telegraph post is eligible for such an appointment. These men in the Defence Department should be recognised as part of the Public Service. There are a number of other anomalies to which I might refer if time permitted.; Instead of bringing forward this Bill for the purpose of effecting a couple of patches in our Public Service Act it would have been wiser to defer action until a comprehensive Bill dealing with anomalies could have been Introduced.
Question resolved in the affirmative.
Bill read a second time.
– - I move -
That the Committee be empowered to consider an amendment of the Principal Act to provide for the fixing of salaries and increments in the General Division of the Public Service by Statute instead of by Regulation as at present.
My principal object in asking the Senate to agree to this motion is to insure that officers of the General Division shall receive their increments at a much more rapid rate than they do at present. It is an excellent rule to lay down in our Public Service. It is one which operates in every branch of private service that as early as possible every employe” should be paid the maximum salary for the work upon which he is engaged. Take the case of a lettercarrier for example. Under existing conditions he must be twenty-five years in the service before he can receive the maximum salary for his division. He enters the service, we will assume, at eighteen years of age. At twenty-one years of age he receives a salary of £110 per annum. At twenty-two and twenty-three years of age he has ^110, at twenty-four £114, at twenty-five £120, at twenty-six, twentyseven and twenty-eight £126, at twentynine £136, and at thirty £138. After the lapse of nine years, he gets £144 at the age of thirty-nine years, and when he is forty-four years of age he gets the maximum which is paid to a letter-carrier, namely, £150. What I propose is that each officer of the General Division shall be paid the maximum wage for the work in which he is engaged when he has completed ten years’ service after the age of twenty-one years; that is to say, that when he is thirty-one years of age he shall be paid the maximum salary of the division. Surely a letter-carrier at thirty -one years of age is a better man for his work than he will be at forty-four? Honorable senators know as well as I do that a lettercarrier must be a strong healthy man, capable of facing any kind of weather, and suffering discomfort. Again, he must be smart on his feet. I think that every one here will admit that a man at thirty-one years of age is very much smarter usually than a man at forty-four.
– Physically, but not mentally.
– A man does not use his mind in his legs.
– What extra expense would this proposal entail?
– I am not concerned with that at present. Of course, I know that the expense is the whole matter which troubles the honorable senator.
– No, I would pay them well.
– In the case of a letter-carrier a man at thirty or thirty-one years of age is much better for the purpose than he is at forty-four. He is younger, stronger and swifter afoot, and better able to endure heat and cold, and all kinds of weather. There is not much mental power required in connexion with letter-carrying; but mentally, I should say that a man of thirty-one is quite as good as, if not better than, a man of fortyfour. A letter-sorter is in. the same position as a letter-carrier. He must have been in the service for twenty-five years before he is qualified for the maximum. Here again there is not much mental work necessary. The sorters get through their work very rapidly, but it is mechanical in a very great degree. They become so accustomed to reading addresses on letters that they can do it with great swiftness, very much more quickly than an ordinary man could possibly do. They are as expert at reading addresses on letters as bank tellers are in counting money. What I said about the letter-carrier holds true with regard to the letter-sorter. At thirtyone years of age a man is in his prime for that kind of work, and ought to be paid the highest wage which is paid in his Department. Take the case of a carpenter or bricklayer or any tradesman you like. Within a year or two from serving his time he gets, if he is capable of earning it, the highest wage that is paid in the trade. Instead of his value becoming greater as he gets on in life it becomes less, simply because his physical power is constantly on the wane. So that a man at from thirty to thirty-five is at his prime for that kind of work, and gets the highest wage paid in the trade. Is there any reason why we should not apply that principle in the Public Service? Senator Gray referred to the cost, but we must pay these men on some fair principle. If a man is worth £150 a year as a letter-carrier at forty -four years of age, he was worth £200 a year at thirty-one, because I am sure that the average man of that age could do at least half as much more work.
– Is the honorable senator advocating a reduction after that age?
– No. What I am advocating is that every public servant shall receive the maximum salary for the work which he is doing when he reaches the age of about thirty-one years. When he is promoted, of course, he will get a higher salary. But until he is promoted, if there is no increment, there will be no increase. It is simply a question of what is fair payment for the work. I know that the old system was to put on a man at a low salary and gradually increase it until, when he was getting the highest salary in his particular grade, he would probably be old and decrepid, and not worth one-third of the money he was getting.
– A reward for previous service.
– I’ may be told that it was deferred payment. But that is no good in a case of that kind. Men have no guarantee that they will live to such a period that they will be in a position to draw what is termed the deferred payment. Therefore, the fair thing to do by them is to pay them at the time for the work they are doing. So far as I can see, nothing can be said against the economical argument’. There is another reason in favour of my proposal. We know that the expenditure of an ordinary man is greater in most cases at, say, thirty-one years of age, than it is at any other period of his life. He is probably, if he is a good citizen, bringing up a family, and is in more need of the money than he will be at a later period. At forty-four, a man’s family has grown up and left him, and he is ‘ not in such need of a larger, salary. If the Senate agrees to my motion, I intend to move that the following words be added to section 18 of the principal Act : -
Provided always that officers of the General Division who have completed ten years’ service after they have attained the age of twenty-one years shall receive the maximum salary paid for the work in which they are engaged.
Senator MILLEN (New South Wales- - Vice-President of the Executive Council) [5- 25l- - I trust that the Senate will not agree to the motion on the information put forward by Senator Stewart. He is asking honorable senators to provide for what is unquestionably a very radical alteration of the .Public Service Act. Before an honorable senator has the right to make that request, he should be in a position to show what cost it would throw upon the Treasury. Senator Stewart does not attempt to do that.
– Se far as I know, the honorable senator takes up the position that the cost does not matter. It may not matter to him,* but I ask honorable senators to consider whether or not it is a business-like and common-sense proceeding to adopt a proposal which would involve the country in an expenditure, the extent of which they have no knowledge. I hold that before we make such a radical alteration of the law, as is proposed, some opportunity should be given for an inquiry as to the extra financial responsibility which its acceptance would cast upon the Treasury. It has been pointed out here this afternoon that it is obvious that before long there will have to be a complete overhaul’ of the Public Service Act. If that is the case - and I am not dissenting from that view - that will be the time for Senator Stewart to urge the proposition which he has just submitted.
– I might not be alive then.
– Politically, I hope my honorable friend means ; otherwise, I feel perfectly sure he will be alive. He will see, I think, that that will be the proper time for a proposal of this kind to come under review. I ask him, therefore, whether, having ventilated the matter, he cannot see’ his way to withdraw the motion ?
– I cannot withdraw the motion. I must get a vote.
– Standing order 319A reads -
An instruction can be given to a Committee of the Whole on a Bill to amend an existing Act, to consider amendments which are not relevant to the subject-matter of the Bill, but are relevant to the subject-matter of the Act it_ is proposed to amend, provided that such motion shall be carried by at least fifteen affirmative; votes.
I direct the Clerk-Assistant to ring the bells, in order that honorable senators may be in. their places.
Question- That the motion (Senator
Stewart’s) be agreed to - put. The Senate divided.
Question so resolved in the negative.
Senator. Colonel NEILD (New South Wales) [5.37]. - I now desire to move that the Committee be empowered to consider an amendment of the principal Act– -
Clause 1 agreed to.
Clause 2 -
Section 5 of the Principal Act is amended by omitting from sub-section (6) the words “twelve hundred” and inserting in lieu thereof the words “ fifteen hundred.”
This section shall be deemed to have commenced on the fifth day of May, One thousand nine hundred and nine.
– I shall vote against this clause, by way of protest against the manner in which the employes in the. Stamps Branch of the Government Printing Office have been treated. It is absolutely degrading to the Commonwealth to allow girls to be employed at 7s. 6d. per week. The extra £300 proposed to be voted to the Public Service Commissioner would be enough to pay 10s. to 2,400 girls; and I am quite sure that so many are never likely to be employed in the Stamps Branch. I also take exception to this payment of £300 to the Public Service Commissioner whilst we are employing women in this branch of the service who were taken over by the Commonwealth from, the States at £1 per week. I trust, that the Committee will refuse to grant the increase proposed until such time as the Government have rectified the wrongs to which I have so often called attention.
– Senator Henderson has advanced a good reason why the whole of the clauses of this Bill should be rejected. We are merely tinkering with the Public Service Act. The Vice-President of the Executive Council has admitted that shortly the whole of this legislation will come under review. It is a mistake, at the tail end of a session, to spring a Bill of this kind upon us, without giving any reason why we should pass it. I understand from Senator Pearce that a promise was made to the Commissioner that his salary should be increased to £1,500. I also understand that the Commissioner desires that a Deputy should be appointed to assist him.
– That proposal was not entertained by the late Government.
– If the Commissioner’s hands are so full that he cannot compass the work, it would be better to give him an assistant, and to keep his salary at the present figure, or even to reduce it, in order to pay the assistant a fair amount.
– I hope that the Committee will not be led aside by the two previous speakers. I cannot add very ‘ much to what I previously stated in reference to the terms under which the Public ServiceCommissioner entered upon his office. It has to be remembered, quite apart from what may be regarded as the work of his. position, that he came to us from New South Wales at a time when the Bill before Parliament proposed that his salary should be £1,500. It is perfectly true that he was aware that the salary was subject to Parliamentary ratification, but still that circumstance ought to be fairly considered.. He has rendered good and faithful service, whilst his duties have been steadily increasing in volume and responsibility. As far as we can judge they will increase still further during the term of . his reappointment.
-45]. - I take exception to what I regard -as an exceedingly vicious method of legislation, in selecting one officer, no mat- ter how worthy, and making his concerns the subject of a special Bill.
– In this case, the question is raised by his re-appointment.
– That, of course, is another matter. I have no wish to belittle in the slightest degree the great services which Mr. McLachlan has rendered, and will no doubt continue to render, to the Commonwealth. But I do not like this method of legislation. Only a little time ago, we passed a measure granting compensation to a few old officers and the widows of old officers, whilst very many just as deserving cases were left unconsidered, and remained unconsidered to-day. I understand that another measure of the same class will be submitted to us before long. I regret the introduction of this measure for two reasons. It proposes an Increase in the salary of the Public Service Commissioner, and increments for the Clerical Division, whilst it does nothing for the great General Division, which contains a very large number of hard-working, worthy officials. I object to the clause “under discussion for the reasons I have given, but if there is a majority determined to pass it, it is of little use to further debate it. If the Bill goes through in its present form, I shall vote against the third reading.
Question - That clause 2 stand as printed - put. The Committee divided..
Majority … 2
Question so resolved in the affirmative.
Clause agreed to.
Clause 3 (Provision for long-service increments in Class V.).
Question - That the clause 3 stand as printed- put. The Committee divided.
Majority … … 10
Question so resolved in the affirmative.
Clause agreed to.
Clause 4 negatived.
Clause 5 and title agreed to.
Bill reported without amendment.
Motion (by Senator Millen) agreed to -
That so much of the Standing Orders be suspended as would prevent the Bill being passed through its remaining stages without delay.
Motion (by Senator Millen) proposed -
That this Bill be now read a third time.
– I have voted against this Bill because, as I said in the beginning, it is patch-work legislation. I do not oppose it because I am against any . proper increase in the salaries of any officers of the Public Service. I understand that the increments provided for the Clerical Division in clause 3 have already been paid in many cases to those concerned. I should like to know whether, if the Bill is not passed, the money which has been paid to the officers in question will have to be refunded by them. I have no desire that any member of the service should suffer, or to prevent the payment of fair salaries. I have never been one to stand out against men being well paid in the Public Service. But I believe that the Public Service should be overhauled from top to bottom. In my opinion there should be minimum and maximum salaries in respect of the services to be rendered in particular offices. The mere fact that a man has been in the service for a great number of years should not entitle him to a higher salary than the services which he renders are worth. I think that the matters dealt with in this Bill should have been allowed to wait until a comprehensive measure amending the Public Service Act could have been introduced. With regard to clause 4 of the Bill, which proposed to increase the age limit, up to which telegraph messengers may be retained in the service to twenty years - The PRESIDENT.- As that clause has been deleted, the honorable senator cannot discuss it.
– Upon the motion for the second reading of the Bill, I desired to show that that clause shoull be excised, and the matter to which it relates should be considered in connexion with a general amendment of the Public Service Act. In the circumstances, I shall vote against the third reading of the Bill.
.- I agree with other honorable senators that it is very unfair that a Bill of this description should be rushed upon us during the closing hours of the session. 1 think that we are rapidly approaching the time when the way in which the cost of our Public Service is being piled up, will have to be taken into serious consideration. That expenditure is being piled up at an enormous rate. In the aggregate, these little increases to officers make a very large sum. I agree with the objections which have been urged against the Bill. I think that it should be held over for the consideration of the next Parliament ; and that, during the recess, the Government should go carefully into the whole question of our Public Service Act, with a view to submitting to that Parliament a Bill for the rectification of recognised anomalies. For these reasons I shall vote against the third reading of the measure.
.- 1 agree with the remarks of the two previous speakers. This is a Bill of which we knew nothing, until the very last moment. Personally, I believe that the whole Commonwealth Public Service requires to be remodelled. I am not opposed to the increase in salary proposed to be granted to the Public Service Commissioner ; but I object to tinkering with Public Service legislation in the dying hours of the session. I shall vote against the third reading of the Bill, as a protest against the action of the Government. I hope the measure will be defeated, and that next year the Ministry will bring forward a’ scheme having for its object the remodelling of the entire service.
– I supported the clause relating to long service increments from a desire not to do injustice to any employes in our Public Service. I said that I was aware that some of these officers had already received their long-service increments, and I feared that it the Bill were not passed, they might !)e called upon to ref ur.d that money. Now, I have learned that that fear is groundless ; and, realizing that I shall not be doing these men any injustice, I intend to vote against the. third reading of the Bill.
– I take it that, after we have reached this stage in the passage of the Bill, it is unlikely that any honorable senator’s vote will be influenced by anything that I may say upon its general principles. But I wish to reply to Senator Vardon, who raised the question of whether - in the event of the Bill being rejected - the long-service increments already paid would be affected. While I still plead with the honorable senator not to sacrifice the measure, I feel bound to say that its rejection cannot affect payments which have been already made. They could be recovered only , by action on the part of the Government, which is not likely to be taken, seeing that the increments were paid under the authority of an Appropriation Act. I must ask honorable senators to allow the Bill to pass in its present form. The money was paid over last year, and has been provided for this year. But a doubt exists as to whether it can be legally paid on the mere Act of Appropriation. Mr. Hughes has expressed the opinion that it can, and the present AttorneyGeneral has expressed a somewhat different opinion.
– If this Bill be not passed, can the Government continue to pay?
– They will do so; and they will afterwards get an indemnity.
– I am endeavouring to put before the Senate the facts as I understand them. Having reached the present stage, I ask honorable senators to pass the Bill, and to leave other matters which are debatable to be dealt with in the future1.
Question - That this Bill be now read a third time - put. The Senate divided.
Majority … … 3
Question so resolved in the affirmative..
Bill read a third time.
In Committee (Consideration of House of Representatives’ amendments) :
House of Representatives’ Amendment. - After clause 6 insert new clause 6a.
[6.15]. -When I submitted this Bill to the Senate some time ago, I indicated that the object was, as far as possible, to adopt a number of the provisions of the English Patents Act of 1907. But the other House thinks it desirable that it should include another section of that Act for administrative purposes. This is not a provision to which I think any exception can be taken. Its insertion in the Bill was requested by the Commissioner of Patents for the purpose of facilitating administration. Its main object is that a single patent may be issued for cognate inventions, instead of one or two patents. For instance, if a man has secured a patent for a particular process, and subsequently he considers it desirable to make some alteration, he puts in ‘ another, application. But this provision, if adopted, will permit both applications to be combined, and a single patent issued for the invention. I move -
That the amendment be agreed to.
Motion agreed to.
Clause 14 (Revocation of patents worked’ outside the Commonwealth).
House of Representatives’ Amendment. - Omit section 87A, and insert in lieu thereof new section.
Senator Sir ROBERT BEST (Victoria - Minister of Trade and Customs)[6.18]. - As this clause left the Senate it provided - 87A. - (1.) At any time not less than four years after the date of a patent, and not less than one year after the commencement of this section, any person may apply to the Commissioner for the revocation of the patent on the ground that the patented article or process is manufactured or carried on exclusively or mainly outside the Commonwealth.
It went on to provide that, if after the Commissioner had considered the application, he was not satisfied that the patented article or process was being manufactured or carried on to an adequate extent in the Commonwealth, it should be competent for him to make an order revoking the patent either forthwith or at a time to be stated. There was also provision made for a further order extending the time in certain circumstances to a period not exceeding twelve months, while sub-section 4 provided that an appeal might be made from the decision of the Commissioner. That was, I may say, the same as the English provision. In the application of that section in England it was discovered that it went somewhat further than was originally intended. It was intended in our Bill to compel the manufacture within the Commonwealth of the article or process within a. period of twelve months. But it was discovered that it would permit persons who were interested in importations on some specious pretext to apply for a revocation of the patent, and on the application being granted to bring their importations into the Commonwealth free, and without the protection which was afforded originally by the patent. In the circumstances it was thought desirable by the other House to substitute the following provision for proposed section 87 a -
At any time not less than four years after the date of a patent, and not less than two years after the commencement of this section -
That . is the first alteration. It was represented by patentees, through the Department, that one year was insufficient, and it was thought that two years would be fair - any person may apply to the High Court or the Supreme Court for an order declaring that the patented article or process is not manufactured or carried on to an adequate extent in the Commonwealth.
When the provision left the Senate, it provided that the application should be made to the Commissioner of Patents, but the other House now proposes that it should be made direct to the High Court, or to the Supreme Court.
– The provision as it left the Senate allowed an appeal to the High Court or to the Supreme Court. It is now felt that if the application is made direct to the High Court, or to the Supreme Court, it will mean a substantial saving in expense. The experience of the Mother Country was that an application for this order is a very elaborate proceeding, and has to be entered upon with great care, having regard to its importance, and that almost invariably an appeal is made to the High Court. To save expense, it is thought desirable to allow an applicant to go straight to the High Court. The amendment from the other House continues - (2.) If, on the hearing of the application, the Court is satisfied that the patented article or process is manufactured or carried on exclusively or mainly outside the Commonwealth, then, subject to the provisions of this section, and unless the patentee proves that the article or process is manufactured or carried on to an adequate extent in the Commonwealth, or gives satisfactory reasons why the article or process is not so manufactured or carried on, it shall make the order applied for, to take effect either -
So far as that sub-clause is concerned, the main feature to which I draw attention is that the Court is substituted for the Commissioner. Under sub-clause 3 the Court may make a further order extending the time so specified to any time not exceeding twelve months. The only difference between that provision and ours is the substitution of the Court for the Commissioner. Sub-clause 4 is a very important one -
From and after the time when an order under sub-section (2) of this section takes effect, the patent shall not be deemed to be infringed by the manufacture or carrying on in the Commonwealth of the patented article or process, or by the vending within the Commonwealth of the patented article made within the Commonwealth.
The effect of that provision is that if the patent is not worked within the time specified it will be competent for an application to be made to the Court to declare that the patented article or process is not manufactured or carried on to an adequate” extent, in the Commonwealth, when the Court can make an order, the effect of which will be not a revocation of the patent, because that would not only permit its manufacture, but the importation of the article free from the trammels of the patent, but the local manufacture of the article will not be an infringement of the patent, and there will be protection as to any importations from abroad.
SenatorMacfarlane. - That is ratherhigh.
– No; it is quite the contrary. It will achieve all that we originally desired, and prevent abuse of the section.
– What does the Minister mean by his reference to protecting any importations, from abroad? Does he refer to importations of the same article or a like article?
– Suppose that a man in Germany has a patent for an article, and that the article is also patented in the Commonwealth. If it is not worked within a particular time, we insist that it shall be worked. Under the former provision the foreigner could set to work, and obtain a revocation of the patent. Articles produced under the foreign patent - by the same process, of course - could be introduced into the Commonwealth, because of the revocation, of the patent. But the new provision will compel the manufacture of the article in the Commonwealth, and declares that that shall not be an infringement of the patent. The patent will still remain alive to prevent the importation of these productions from abroad. Honorable senators will see at once, I think, that that is a very marked improvement.
– That practice annuls the patent.
– It declares that the manufacture of the article in the Commonwealth shall not be an. infringement of the patent ; but there are manufacturers abroad who, in order to secure the Commonwealth market, would seek to get a revocation under the provision, as it passed the Senate. Their intention would be not to manufacture the article in. Australia, but to get importations of the same article from their foreign factories, and by that means defeat our purpose. Sub-section 5 of the new provision reads -
If at any time after the making of an order under sub-section (2) of this section the Court is satisfied that the patented article or process is not manufactured or carried on in the Commonwealth by any other person than the patentee, and that the patentee is manufacturing it or carrying it on to an adequate’ extent in the Commonwealth, the Court may in its discretion, if it thinks it just so to do, revoke the order, which shall thenceforth cease to have effect.
That is, I think, a rather valuable provision. Under the provision, as it left the Senate, it would have been competent for an application to be made for an order revoking a patent, and for the applicant, on getting the order, not to proceed with the manufacture of the article. The new provision will, in such circumstances, offer a sort of locus penitentiae to the patentee, who can come forward, and say : “I am manufacturing the goods in the Commonwealth, and nobody else is manufacturing them. Therefore, I apply to the Court to revoke the order.” That is, I think, a fair and just thing in the interest of the patentee. Sub-section 6 makes it competent for the Court in such circumstances instead of making such an order to direct the patentee to grant a Compulsory licence to the applicant on such terms as it may think fit; while sub-clause 7 provides that the Court may insist upon security for costs. In the Old Country, a man of straw has applied for the revocation of a patent. The patentee has been put to great expense in trying to defend his patent, and when the application has been dismissed, he has found that there was no possibility of recovering costs. Consequently, in the new clause, a discretion is given to the Court as to security for costs. I move -
That the amendment be agreed to.
Sitting suspended from 6.30 to 7.45 p-m.
-45]- - * dx* not know that this amendment is quite as good as was the clause in the original amending Bill. The intention of the clause which we sent down to the House of Representatives was to secure the - working of patents within the Commonwealth. I do not know that we are concerned about protecting one foreign manufacturer against another in another foreign country. But, apparently, that is what the Government are now concerned about.
– No; this amendment goes as far as the original clause, and, indeed, farther.
– It goes as far in a certain direction. I can quite see that the amendment is sufficient to protect the local manufacturer. But there is another person whom we ought to think of, and that is the user of the patented article. It does not matter to him whether he is served by a local manufacturer or an importer. The effect of the amendment is that, in the event of there being no manufacturer in the Commonwealth who is willing to apply for an order, and to manufacture the patented article, the patent will still hold good. But there is no obligation on the patentee to make the article within the Commonwealth. Under the clause as it originally stood, there was a double inducement. In the first place a local manufacturer might apply to have the patent revoked ; or another person, who might be an importer’s agent, might apply. There was thus a double inducement to the foreign manufacturer to work his patent in Australia. That is what we desired. Now the Government are taking one of those inducements away. Under this amendment the only consideration that will induce the patentee to manufacture locally, is that some person in Australia will be in a position to apply for the revocation of a patent, and to manufacture the patented article himself. That fairly states the case. I think that the amendment is weaker than the original proposal.
– Does the honorable senator wish to abrogate a patent’ whether the applicant for revocation is ready to make the patented article here or not?
– We inserted clause 87A, under which any person could apply to the Commissioner for the revocation of a patent on the ground that the patented article or process was manufactured or carried on exclusively, or mainly, outside the Commonwealth. The Commissioner had to consider the application, and, if satisfied that the patented article or process was manufactured or carried on exclusively or mainly outside the Commonwealth, then unless the patentee proved that the article or process was manufactured or carried on to an adequate extent in the Commonwealth, or gave’ satisfactory reasons why it was not so manufactured or carried on, the Commissioner might make an order revoking the patent. The Commissioner had power to grant or refuse the application. Such an application can still be made under the amendment sent to us by the House of Representatives. But, the revocation having been obtained, it will be good only if the man who has made the application proceeds to manufacture the patented article. The order of revocation will be of no use against another person from outside the Commonwealth. There is an American firm which manufactures boot-making machinery and supplies most of our local factories. It attaches very stringent . conditions. There is also an English firm which makes similar machinery. None of it is manufactured in the Commonwealth. Under the clause which we sent down to the House of Representatives it would have been competent for the English firm of manufacturers to apply for the revocation of the patent in Australia on the ground that the American firm was not manufacturing the machinery within the Commonwealth; or it would have been competent for the American firm to apply for the revocation of the English patent for a similar reason. But they would both be importers who were using their patent rights in the Australian market. The clause as it stood imposed a sort of penalty for not manufacturing the machinery in the Commonwealth. But under the amending clause which the Government have brought forward, if the “English firm of manufacturers took such action they would have to commence manufacturing their machinery within the Commonwealth. Otherwise the patent of the American firm could not be revoked.
– I think that is a misconception.
– The Minister himself said that the amending provision offers no protection against the importer.
– What I said was that the amendment prevents the abuse that was capable of taking place under the original clause.
– But the honorable senator also pointed out that the abuse to which he referred was that the patent being revoked, the other firm need not manufacture here but might still import the. patented goods into the Commonwealth.
– That is so.
– What is sought now is to grant the revocation only to a person who will manufacture in the Commonwealth. The point of view of the man who wants the patented machinery in Australia is to get away from the effect of the patent rights. The original clause was a better one for him, because under it the application for revocation could be made either by a rival importer or a. local manufacturer.
The new provision limits -the power of applying for revocation solely to the local manufacturer. In that sense the amendment will make the clause weaker. We have to remember also that the Government did not change their view on this matter without influence from outside. The provision in the Bill, as it left the Senate, was a copy of British legislation, and so far as I know there has been no proposal in Great Britain to amend it.
– Oh, yes ; it has not given satisfaction on account of the abuse to which I have referred.
– The House of Commons has been dealing with such big questions lately that no doubt there has not been time to take up the patent law. But we are going to depart from British law to open up a new track.
– The British law itself opened up a new track.
– It has had beneficial effects in encouraging the working in Great Britain of many patents. Of course, it does not follow that the same effect would be produced in Australia, because whilst in Great Britain there is a population of over 50,000,000,- we have a population of only about 4,000,000. It seems to me that the Government have been influenced in this matter by a deputation of local boot manufacturers, most of whose establishments are equipped by machinery supplied by an American firm. Under that agreement they cannot instal any machinery supplied by the rival British firm. Consequently these gentlemen have only one source of supply. If they were to go to any other source the whole of the American machines would, under their agreement, be withdrawn from their factories. That is the only deputation which has waited on the Government in reference to this subject ; and this amendment has been made at the suggestion of that deputation.
– Not at all.
– At all events, the deputation were opposed to the clause, and the amendment seems to have been made in the interest of their firms. I venture to say that for the next twenty years there is no prospect of the bootmaking machinery in question being made in Australia, ft is highly specialized machinery. Very little of it is required. One machine is sufficient for a factory. Not enough of it is used to make it worth while to manufacture the machinery in Australia.
– Some of the machines are only fit to be used in large factories.
– It would not pay a small man to put them in. The effect of the amendment will be to make the clause of no effect. I was somewhat dubious as to whether we were not going too ‘far in the original clause; but still, there must be a large number of patents which might be worked in Australia. It would be a good thing to stimulate, if not the local working of these patents, at any rate competition as between importers. Therefore, whilst I shall not divide the Committee on the amendment, I frankly say that I do not feel enamoured of it.
Senator Sir ROBERT BEST (Victoria - Minister of Trade and Customs) [7.55]- - I wish to correct my honorable friend, Senator Pearce, at the outset, with reference to his statement that this amendment is the outcome of a deputation of bootmakers who use certain American machinery. Such is not the case. The deputation made no such suggestion. Their object in waiting on me was to have clause 87A struck out altogether. I admit, with my honorable friend, that the British provision as we originally inserted it in the Bill is somewhat harsh. We seek to make it a little more liberal. Our object is to encourage the working of patents in Australia. But we must have some regard to what is going on in the Mother Country. We have discovered that the section of the Imperial Act, which we copied, has been capable of abuse, and consequently we are proposing a modification. The abuse that issaid to have occurred under it is this : It suits a German or American firm, working patents in either of those countries, to try to secure the revocation of a patent in the Mother Country ; but, the patent being revoked, there was no guarantee that the object of the section would be served by the manufacture of the patented process or article in the Mother Country. What foreign patentees did was to take advantage of the section for -the purpose of revoking patents, and thereby bringing in I heir own goods, which were also made in foreign countries. The clause, as we sent it to the House of Representatives, is capable of producing that result. But that was never intended. Our object simply was to stimulate the working of patents in the Commonwealth. Let it be borne in mind that when we grant a man a patent we give him a certain privilege. We say to him, “ We have granted you this monopoly or privilege, but if you do not manufacture the protected goods in this country we will permit anybody else to manufacture them here.” We simply declare that the manufacture in the Commonwealth of the patented goods, or the working of the patented process, shall not be an infringement of the patent. But we do this justice to the patentee himself : that while we want the patent worked in this country, and while we will prejudice the patent to the extent of its being infringed within the Commonwealth if it is not worked here, yet we do not desire to injure him. We have no desire to injure the patentee any more than is absolutely necessary to secure our object of having the patented article manufactured in the Commonwealth. We say that his patent shall be good against the world, but bad in the Commonwealth if the owner fails to work it. The object of the clause is to grant free licences to everybody in Australia to operate the patent if the patentee does not operate it himself.
– After they get an order.
– I am assuming that the patentee makes default, and that an order is obtained. The patentee would still be protected from abroad, and we should be able to secure what we intended to secure, the working of the patent in the Commonwealth. If at the same time we can prevent abuse of the provision, why should we not do so?
– The object was not merely to secure the local manufacture of the patented article, but to induce the patentee to come to the Commonwealth to manufacture it
– Exactly, and that is what we are proposing to do.
– Under this clause we should give that away, so far as the foreign competitor is concerned.
– If the importer of the patented article finds that he cannot introduce it free to the Commonwealth there will be an inducement to him to come here and manufacture it. Of course, it must be shown before the patent is declared to be bad in the ‘Commonwealth that the patented article can be manufactured here. There is no guarantee under the clause as it stands at present that the patented article would be manufactured in the Commonwealth. The amendment provides reasonable protection to the patentee, and a reasonable inducement to him to operate his patent here. I repeat that it is not proposed as the result of any suggestion by the deputation to which Senator Pearce referred, but is based upon advice as to the working of the clause in the Mother Country, and the abuse which it has been discovered is possible under it.
– I am exceedingly sorry that the House of Representatives did not see its way to amend the Bill by eliminating section 87 of the principal Act altogether.
– They did, and they put something else in its place.
– They have put in its place practically the same thing. When this Bill was previously before the Senate, I referred to negotiations proceeding between America and Germany. These have resulted in a law under which a patent of either country stands in both if worked in either. Many things have since occurred which indicate that even in England the new patent law is not working as satisfactorily as it was thought it would. When we remember that we are asked in a young country like Australia, with only one-tenth of the population of the United Kingdom, to adopt a similar law, we may expect more or less of failure and disappointment. The main effect of the provision, will be to limit the opportunities for the carrying out of Australian invention, and Australian inventors will be the persons who will suffer most under it.
Motion agreed to.
House of Representatives’ Amendment. - Insert the following new clauses : - “ 14A. After section ninety-one of the Principal
Act the following section is inserted : - 91A. Where any person claiming to be the patentee of an invention, by circulars, advertisements, or otherwise, threatens any other person with any legal proceedings or liability in respect of any alleged infringement of the patent, any person aggrieved thereby may bring an action against him, and may obtain an injunction against the continuance of such threats, and may recover such damages (if any) as he has sustained thereby, if the alleged infringement to which the threats related was not in fact an infringement of any legal rights of the person making such threats.
Provided that this section shall not apply if the person making such threats with due diligence commences and prosecutes an action for infringement of his patent.’ “ “ 14b. Section one hundred and seven of the
Principal Act is amended by adding after the words ‘ describe himself as a patent attorney ‘ the words ‘ or as a patent agent or as an agent for obtaining patents.’ “
Senator Sir ROBERT BEST (Victoria - Minister of Trade and Customs) [8.6]. - I move -
That the amendment be agreed to.
The proposed new section 91 is really section 36 of the English Act. It is quite recognised that there is a system amongst patentees of levying blackmail against the owners of patents of a similar character. The proposed new section provides that if the owner of a patent threatens the owner of a patent of a cognate character, or warns his customers not to purchase it, it shall be necessary for the patentee making the threat to proceed with an action to substantiate his case, or otherwise be liable.
Motion agreed to.
House of Representatives’ amendment to clause1 6 agreed to.
Clause 17 -
The Second Schedule of the Principal Act is amended by omitting the figure “ 5 “ in the third line and inserting in lieu thereof the figure “ 3.”
House of Representatives’ Amendment. - Omit the clause.
Motion (by Senator Sir Robert Best) proposed -
That the amendment be agreed to.
– I hope the Committee will not agree to this amendment. The history of the matter is, briefly, this : The original Act provides in the second schedule for certain fees. We amended the schedule by providing that the fees for preparation for sealing which was fixed at£5 should be reduced to That was a compromise accepted by the Government.
– No. It was resisted by me at every stage.
– It was a compromise upon the reduction I had at first proposed, and it was carried by a majority of the Senate. It is when a patentee is struggling to make a success of his patent that the fees charged to him should be low ; and I was willing, upon the reduction of the fee for preparation for sealing, to support an increase in the fee for the renewal of the patent. I felt that the successful inventor is the man who should be called upon to pay the fees.
– We did increase the renewal fee from £5 to £12.
– That is so. It was pointed out that if we fixed the fee for sealing the patent at £3, that would bring our schedule into conformityw ith the legislation of New Zealand, and quite a number of other countries.
– We then increased the renewal fee from £5 to £12, in order to make up to the Government any deficiency in revenue that might follow from the reduction of the fee for preparation of a patent for sealing. I cannot remember the exact figures which were quoted at the time; but we were told that the Patent Office had made a profit in previous years, and that for the first time in the history of the office, it was estimated that there would be a loss this year. It was admitted, when we were discussing the matter, that the Commonwealth does not desire to make a profit out of inventors. It should be our object to encourage them. I have been surprised that, after the Senate had, by a majority, registered the opinion that there should be a reduction of the fees to struggling inventors., the Government should now say that they are unable to accept the reduction.
Senator Sir ROBERT BEST (VictoriaMinister of Trade and Customs) [8.12]. - Under the original Act for the preparation of a patent for sealing, a fee of £5 is charged. I may explain, at the outset, that between the date of application and the date when a patent is ready for sealing, a period of sixteen months might elapse. In the meantime, a great deal of work has to be done by the Patent Office. We have a number of examiners who are professional men, and whose duty it is to investigate applications for patents. For this work, a fee of £5 is charged. A patentee is given the opportunity of operating his patent for seven years, and, if at the end of that period it is shown to be of commercial value, he is permitted to renew the patent, and under the existing law, a fee of £5 is charged for the renewal. Senator Pearce induced the Senate to reduce the fee for preparation for sealing to £3, and to increase the fee for the renewal of a patent to £12. In the first place, the effect of clause 17, which the House of Representatives asks us to omit, must be a certain loss, as compared with the existing law, of £2 on every application for a patent. As we have between 1,300 and 1,400 applicants in a year, it would involve a certain loss of £2,600 or £2,800. It is true that, at the instance of Senator Pearce, the Senate increased the renewal fee from£5 to £12 ; but, of course, we have so far had no renewals. The first application under our Act is dated 1st June, 1904, and no renewal is necessary until a patent has been in operation for seven years. In the circumstances, it is quite impossible to estimate what the additional revenue from the increase of the renewal fee would be. This general principle was affirmed by the Senate; that it is desirable that the Patent Office should pay its way. As a matter of fact, under the fees which are at present charged it ‘is estimated that there wiil be a loss on the current year of £2,800, and the proposal of my honorable friend would increase that loss by £2,600. In the first place there has never been any substantial objection urged to the present fee of £5, and, secondly, the proposal of Senator Pearce would inflict hardship upon those who have taken out patents in the usual . way by compelling them to pay £12 instead of £5 for the renewal of their patents. Under these circumstances where is the necessity for the clause, especially when we bear in mind that at present it costs only £13 to see a patent right through, and that prior to Federation a patentee had to pay £97 ? With the exception of one or two countries, our fees are the lowest in the world. In various countries, such as Germany for example, patent fees range up to £100, £200, and £390. In the Mother Country they total £.120.
– The fees charged in the United States, which has twenty times our population, are the lowest in the world.
– I admit that in the United States the fees are £1 or £2 lower than are our own. But I could produce figures which would convince my honorable friend that with the exception of one or two countries, our fees are the lowest in the world. Having regard to the fact that we cannot tell what the effect of the increased renewal-fee would be upon the revenue, and that there is already a loss of£2,700 the working of the” Patent Office, I think we should agree to the amendment of the other Chamber.
– I propose on this occasion to repeat the vote which I cast some months ago. I have the greatest belief in the value to a country of low patent fees. I believe that to a very large extent the United! States owes her manufacturing position to her marvellously low patent-fees. In that country those fees are lower than they are in Australia, and I would point out that the difference is not to be expressed in mere money, because even if our fees were the same as those charged in the United States, a patent in the latter country will afford an inventor protection amongst a population twenty times larger than is our own. So that the fees in the United States are really equivalent to only about one-twentieth of our own.
– I have been looking up the history of this provision, and it seems to me that the arguments which were advanced by the Minister of Trade and Customs in opposition to it when it was previously under consideration, were sufficient to induce a big majority of honorable senators to vote for it. The only reason which he urged against the clause was that under it we should not get such a large revenue from the Patents Office as we have been getting. He said nothing whatever about the assistance which it would give to an inventor who had very little money to spare. The whole of his opposition to it was based upon the fact that in certain years we had been able to make a profit of so much out of the Patents Office, and that that profit had increased as the years went by. On page 2621 of Hansard, he is reported to have said -
In 1904-5, we returned to the States , £5,386 ; in 1905-6, £6,388; in 1906-7, £4,700; in 1907-8, £2,973; and in 1908-9,£1,739.
He went on to say that we had now reached the normal condition, and that in all probability the revenue from this source would decline, and we should be faced with a deficit. To my mind there is a good deal in the contention of Senator Pulsford. We all know that under the high fees which were charged in Great Britain for many years, a considerable number of inventions by persons resident in that country were first patented in the United States, because the patents could be obtained there easier and cheaper, and because no trouble was afterwards experienced in getting the patented article manufactured in Great Britain. When this provision was previously under consideration, I find that Senator Pearce, acting on the suggestion of Senator Symon, amended his original proposal by moving to omit the figure “ 5 “ with a view to inserting in lieu thereof the figure “3.” That amendment was carried by seventeen votes to ten. On that occasion quite a number of honorable senatorsopposite evidenced their belief that it was right that we should make things as easy as possible for the inventor in Australia. The ayes were: - Senators Findley, Givens, Gray, Guthrie,
Henderson, Macfarlane, Needham, Pearce, Pulsford, E. J. Russell, W. Russell, Stewart, Story, Symon, Turley, Walker, and Lynch. I admit that the Government opposed the clause, but it seems to me that even now the Minister of Trade and Customs has advanced no argument against it, except that as we are extending a certain amount of protection to the man of inventive genius who has a patent, he should be asked to pay for that protection.
– That is a fair proposition.
– But the inventor is already asked to pay a certain sum for that protection. In the early history of his patent he has to pay £5, and after he has proved its commercial value he is required to pay another £5. Under the clause, the inventor for a sum of £3 will be able to secure protection for his patent in its initial stages. That seems to me an eminently fair proposition, and I do not think that the Committee should allow legislation which it has passed in good faith to be upset in the absence of substantial reasons.
Question - That the amendment be agreed to - put. The Committee divided.
Majority … … 2
Question resolved in the affirmative.
Motion agreed to.
House of Representatives’ amendment omitting clause 18, agreed to.
Resolutions reported, report adopted.
Senate adjourned at 8.31 p.m.
Cite as: Australia, Senate, Debates, 6 December 1909, viewed 22 October 2017, <http://historichansard.net/senate/1909/19091206_senate_3_54/>.