7th Parliament · 2nd Session
The President (Senator the Hon. T. Givens) took the chair at 11 a.m., and read prayers.
Supply to British Government
– Can the Minister representing the Prime Minister tell me - whether further information has been re- ceived from Great Britain concerning the Prime Minister’s offer of a certain quantity of evaporated apples?
– If the honorable senator will give mo an opportunity later in the day I may be able to answer the question; I cannot do so at present.
Statement bt Archdeacon Hindley.
– I desire to ask the Minister for Defence whether, in view of the fact that among the- names of returned wounded soldiers who arrived in Melbourne yesterday were those of Major O’Brien, Lance-Corporal D. O’Brien, Private P. O’Brien, PrivateO’Callaghan, Private O’Connor, Private O’Farrell, Private O’Keefe, Private O’Reilly, Private O’Rourke, PrivateO’Shannassy, Private Murphy, Private Mahony,. Private Ryan, and Lance-Corporal Considine, he will assure those heroes that the slander recently uttered against thenames they bear by Archdeacon Hindley was the opinion of that reverend gentleman only, and that their names will be* honoured with those of all other Australians who have done their duty nobly and well? .
– I am pleased tobe able to say that the casualty list in question is by no means singular. It is typical of all other casualty lists, and that, I think, is -generally recognised, by mostpeople in Australia.
asked the Minis- . ‘ ter representing the Postmaster-General, upon notice -
Has he received my letter re the case ofR. Kevan, of theG.P.O., Perth, and will he placeon’ the table of the Library the portion of thefilerela ting tosame?
– The answer is - No letter in this matter has been received by the Postmaster-General from the honorable- senator.
The letter may have gone to my Department. I will make an inquiry.
asked the Honorary Minister, upon notice -
– I ‘hope to be able to answer the questions at a later hour of the day.
asked the Minister representing the Minister for the Navy, upon notice -
– The answer is- 1 and 2. The Minister has read the report, and regrets that it appeared.
The following papers were presented : -
Lands Acquistion Act 1906. - Land acquired at -
Cockburn Sound, Western Australia - For Defence purposes.
Lytton, Queensland - For Defence purposes. “War Precautions Act 1914-1916. - Regulations amended, &c. - Statutory Rules 1917, Nos. 207, 212, 213.
In Committee (Consideration resumed from 18th September, vide page 2167) :
Clause 15 - 12 (as amended). Where in the case of a pastoral business -
any part of the profits arising during the last three pre-war trade years have been invested in the business and have, in subsequent years, been wholly or partly lost owing “ to drought, adverse seasons, or other adverse conditions: and
any part of the profits of the current accounting period has been applied in extinction of that loss, then in estimating the profits a deduction shall he allowed equal to the amount of profits applied in extinction of that loss and any other loss which the Commissioner is of opinion has been recouped out of the profits of the current accounting period.
Where in the case of any business except a pastoral business -
the net result of the business since the first of the three selected prewar trade years (in the case of a person adopting a profits standard), or since the first one of the last three pre-war trade years (in the case of a person adopting the percentage standard) and up to the end of the accounting period immediately preceding that upon which the current assessment is being made has shown a loss; and
any part of the profits of the current accounting period has been applied in extinction of that loss; then in estimating the profits a deduction shall be allowed equal to the amount of profits so applied.
– When progress was reported last night we were engaged on the consideration of sub-clauses 12 and 13. I said that the Treasurer (Sir John Forrest) had stated specifically and publicly that past losses could be recouped from present profits. In sub-clause 12 that is allowed for in the case of a pastoral business; but in sub-clause 12 it does not appear to be allowed for in the case of a trade or manufacturing business. In the latter case the provisions of the old Bill apply. It has not often been necessary to say a good word for the Bill which was introduced by Mr. Higgs, but iti made very clear that if the net result of a business during the last pre-war trade years had shown a loss, and that business had been profitable since the war, the profits made since the war could first be used to recoup the losses before the war. But in the present Bill, while that is very clear as regards a pastoral business it is not clear at all as far as a trade or manufacturing business is concerned. If it is to stand as printed it seems to me that the methods of the present income ‘fax collection will apply whereby, if a business makes a loss in one year and a profit in the next year, that loss will riot be allowed to be set against theprofits, but 50 or 75 per cent, of the extra profits, as the case may be, will be taken irrespective, of any previous losses made. That is the effect of sub-clauses 12 and 13 as I see them. I ask the Government to seriously consider whether they are going to deliberately discriminate again between the losses and profits made in a pastoral business and the losses and profits made in a trade or manufacturing business, because if they are it will be another inequity in the measure, and one which will strike against the secondary industries only.
– It ought not to be allowed to the pastoralists, I should say.
– I asked specifically whether past losses could be recouped out of present gains before taxation was imposed, and the answer I received was, . “ Yes, for a pastoral business.” That suggested to me that my reading of the provision is correct.
– In consequence of a drought only.
– In consequence Of a “drought, adverse seasons, or other adverse conditions.” I am asking as a matter of fairness-
– To extend that to a brewery.
– To extend it to a war baby; to any business you like. This seems to be but another of the inequities of the Bill. If Senator Millen can assure the Committe that what I said is not so I shall be satisfied.
.- There is a difference in the treatment meted out by this Bill to those engaged in the pastoral industry as compared with those engaged in other businesses. The reason for it is owing to tbe conditions under which the pastoral industry is carried on, and which are well understood by any one who possesses a knowledge of that industry. It very frequently happens that pastoralists who in two or three good years have made profits, put them into live stock, the whole of which may be lost in a subsequent dry period. There is more of a gamble in connexion with the pastoral than in connexion witih any other industry, and on that account special treatment, for so it may be termed, is given under this Bill to that industry. Other businesses have not an equal claim to special treatment, and it is a perfectly legitimate thing in the circumstances to differentiate between the pastoral business and other businesses which are run on a more even keel.
.- The Vice-President of the Executive Council admits- that the principles which govern business in re gard to profit and loss are not, under this Bill, to apply to manufacturing or industrial concerns. I point out in all earnestness and seriousness that there are many businesses in Australia, some within my own personal knowledge, that started the war period with a debit to profit and loss. Under this clause the first ‘profits they make during the war period will be ‘ taxable. These businesses will not be allowed to first wipe out their losses, as those engaged in the pastoral industry are to be allowed to do, before they come under this taxation. I have here a letter from a Sydney manufacturer, who states deliberately that his business was started two years before the war, and he did not make a penny of profit until this year.
– Would he have made that profit if there had been no war?
– That I am unable to say, but Senator Earle knows as well as I do that in connexion with every new industry there is a period in which it has to be worked up, and in which it has to secure its good-will and trade. It is very rare indeed that a new business can be said to be properly established for a period of three or four years. During that building-up period business men suffer losses or make no profit or very small profits. I am asking the Government to seriously consider the placing of all businesses on the same basis. The first measure of this kind introduced did that, and for the life of me I cannot see why it cannot be done under this Bill. I am sorry that Senator Fairbairn is not present, but I should like to point out that in the matter of profit and loss the pastoral industry will look to making up after the war the number of sheep it had before the war. If a pastoralist had 50,000 sheep and lost 25,000 through a drought, and if those sheep in the prewar period were worth 10s. per head, it seems to me that this Bill will still allow him to make up his original number of 50,000 sheep irrespective of whether they are now worth 30s. per head or not. The same thing will apply to those interested in cattle. I see a grave inequity in this differential method of treating various businesses. I remember reading of a certain man named Saul, who made a journey from Damascus, and I feel very much in his position this morning. He found it useless to kick against the pricks, but I still appeal to Senator Millen to do something to place all businesses on the same basis under this Bill. That would be reasonable and equitable.
– I shall be happy to render Senator Pratten any assistance in my power to bring all businesses as nearly as possible under .the same conditions,, but I shall not help him to bring other industries into line with the pastoral industry under this measure. I am prepared to assist him to bring the pastoral industry into line with other industries. I am aware that anomalies will arise under the measure, but these cannot be altogether avoided. I recognise that it is likely that hardship will be inflicted by refusing to allow a man in business to deduct from his taxable income the amount of his losses prior to or during the war period. But we should recognise that if he had not enjoyed inflated profits owing to war conditions his losses would still remain. Had not the price of meat and wool been enormously increased in consequence of the war, the pastoralists would still be suffering their losses due to the drought of 1914. I agree that we have no right to give the concession provided for in this Bill to the pastoral industry. I am not prepared to give the same concession to other industries. I see no reason why, in dealing with a measure like this, men should be allowed to compute the whole of their losses for three years before the war and have them regarded as a set-off against profits made in consequence of the war.
– Senator Pratten has my sympathy in his endeavour to make this Bill apply equitably to all kinds of businesses. I remind the Committee that a pastoralist in the occupation of good country making good,- regular, average profits goes scot-free under this Bill, oecause he has no excess profits in war years. When a drought occurs he can shift his sheep or cattle to other good country close by, and suffer little or no loss; but men in the occupation of bad country are unable to sh.if.ti their stock, and! so have to suffer their loss, and will have to pay heavily because their good year has been a war year under this . Bill. I feel that the more one tries to make this an equitable measure the more he gets into the mire. I am not taking a very active part in this ‘ discussion for that reason. I have been mixed up in the industrial life of New South Wales for a good many years, and I know that many businesses which have sprung up of late and which, after having paid £20,000 or £30,000 in the improvement of their properties and the perfection of their products, will have to close down, because while they made no profits prior to the war, they will now be taxed on their first year’s profit. It appears to me tha* the more amendments ‘that are moved the deeper we are getting into the trouble, bum I intend to allow the Government to carry the baby themselves. I sympathize with. Senator Pratten in regard to the amendment he desires to have made, and I shall support him in any proposal by which the Bil r can be made more equitable.
.- I should like to take the last statement first, and refer to those firms which, according -to Senator McDougall, are to be ruined by this Bill. I remind the Committee, however, that we have already passed clauses empowering the authorities not to levy one penny of taxation in cases where the financial stability of a firm will be affected.
– Bub the people do not believe it.
– That i3 because Senator McDougall has been making these statements instead of quoting clause 11, which specifically deals with this matter. Then, in the case of a pastoralist who has been making a steady income on good country, while a man on inferior country has been making a loss, the very provision which Senator Pratten is attacking provides that if a man has made a loss on capital, allowance may be made for it.
– If he makes no war-time profits he is not taxed ?
– Of course, he is not. The purpose of the Bill is to levy on excess profits made during the period of the war, and I cannot help thinking that Senator Pratten is confusing loss of profit with loss of capital. There is a big difference between. the two. Let me refer now to the grocery business which he compared to that of the pastoralists.
– No. I referred to a manufacturing business with a large amount to debit of prout and loss account in 1915-16.
– In the case of a pastoralist who has lost stock through drought, that is not a loss of profit, but a loss on his capital.
– If an. ordinary manufacturer makes no profit, but suffers loss on his business, . that would not be- a loss of capital, and we are making provision for exemptions, except for losses occasioned by a fire and burglary. A pastoralist cannot insure against drought as an annual charge.
– As a matter of fact, if he does no* make profits, he should be permitted an allowance for depreciation in his business, which is really a loss on his capital.
– A pastoralist may fail to make profits, too, and the exemption allowed in his case would be in proportion to the value of stock losti, or a reduction in his capital account.
– Loss on the value basis, or on a basis of numbers?
– Whatever basis is adopted the deduction will be the same. W.e do not want one method for the calculation of the pre-war standard and another for calculating the war standard. I admit there is a slight difference made in connexion with the pastoralist industry, because of the possibilities of loss which are nob probable in any other business, but I think Senator Earle is in a much more logical position in his endeavour to exempt -business men than Senator Pratten.
– I want business men treated in . the same way as pastoralists. ‘
– And Senator Earle says he wants pastoralists treated in the same way as business men. I think the real position is that a large number of people cannot reasonably urge that the taxation is unfair, but that they are seriously perturbed because somebody else is not paying the same amount of taxation.
– Quite naturally that is so.
– And . naturally there is an obligation on the Committee to bear that fact in mind. Senator Pratten is asking that the manufacturing businesses shall be exempted.
– From what?
– From the imposts to be levied by this Bill.
– Then Senator Pratten is asking that they be exempted to the same extent as the pastoralists.
– I am asking that a manufacturing business be placed in the same position as that of the pastoralists, or vice versa.
– Then the logical and correct tiling to do would be to move to strike out all exemptions, but I point out we cannot adjust Acts of Parliament by the rules of logic.
– By striking out all exemptions we would get nearer to a fair system.
– That would have been logical, ‘but distinctly harsh. No measure of taxation dealing with large bodies of people, with varied interests, can be regarded as equitable unless there is some way of slightly easing the burden.
– I should like to say a word or two more before the clause passes beyond the ambit of the Committee, and I think a specific illustration will best indicate how it will affect the business community. If a business with, say, a capital of £20,000 made a loss of £3,000 in 1914-15, and a profit of £3,000 in 1916, it would be taxed on £1,000 of this profit, irrespective of the previous loss and irrespective of whether the average of two years showed that the business was only holding its own. Let us follow this illustration a little further, and assume that in 1916-17 the business made another profit of £3,000. In such circumstances it would be taxed 75 per cent, upon the £1,000 excess profit; but if in 1917-18 the business made a loss of £3,000, this loss would not be considered, so that under the provisions of this clause a business which, over a period of four years, was merely holding its own, which had lost no -capital, but1 had made no profits, would be taxed.
– It is quite true that an anomaly and, I fear, an injustice will be inflicted’ on a large section of the community by this clause. Because the pastoralists have, in my judgment, improperly obtained a concession, I am not going to -aggravate the position by extending the exemptions to other industries. It is true, as the Vice-President of the Executive Council (Senator Millen) has’ remarked, that if the amendment moved by Senator Gardiner, abolishing all exemptions, had been carried, it would have resulted in a degree of harshness that would have been unavoidable. The jgold-mining industry has a very import- ant application ‘to Queensland, but while it has unassailable claims for exemption from this tax, I should not feel justified in advocating thatl exemption while refusing to other honorable senators the right to seek to obtain, if possible, exemptions for other industries on which they feel keenly. In my opinion, the goldmining industry could not be denied exemption on its merits, but there may be other industries upon which I do not feel so strongly, and I thought the only safe way was to wipe out all exemptions. The Bill is difficult and complicated, and will be found ineffective and full of injustices -and anomalies, which will be seen in -their full purport only when the Act becomes operative. I am sorry the Committee did not accept the amendment of my leader (Senator’ Gardiner) and treat ali sections of industry alike by wiping out all exemptions.
– I must speak from time to time against “the operation of these discriminatory provisions. If gold mining had not been a widespread industry in Australia, presumably very little consideration would have been paid to it, but it is practically the only mining carried on in one very large State.
– To which State do you refer?
– Western Australia.
– We have as many systems of mining in Western Australia as Tasmania has.
– -In Western Australia they mine for a little coal and get a little silver lead. I am just as conversant with the mineral output of Western Australia as Senator de Largie is. He will not denv that gold mining is the principal feature of the mining industry of his State.
– I do not deny that.
– The Western Australian gold-miners screamed as if boiling water had been poured over them when it was suggested to tax the goldmining industry. I do not blame them for being so vociferous about it. They have the additional sheet anchor of having two or three important members of the Ministry hailing from’ their State.
– That is nonsense!
– If is a fact.
– We have as many kinds of mining in Western Australia as in any State of the Commonwealth.
– A particularly strong effort was made Ito exempt the goldmining industry, and it succeeded on its merits, because it can be demonstrated to even the most foolish . that gold mining has not profited in any sense from war conditions. It was so easy to demonstrate this fact that everybody felt the anomaly of including it in a measure designed arbitrarily to tax profits earned during an arbitrary period called war time.
– You opened the door, and this is the result.
– Does the honorable senator suggest that we should’ have taxed profits earned by gold mining companies during the war period, notwithstanding the practical depreciation of the metal gold ?
– Order ! I must ask the honorable senator not to discuss that matter, although he was quite within his rights in making an incidental reference to it.
– You can discuss paper, but not gold.
– It is gold the Treasury is after, in the superlative sense of the term. I have in my hand the balance-sheet of a company which has mined for another metal, and will not profit by this exemption designed for pastoralists. It has mined for tin for the last ten years. The last published halfyearly balance-sheet of the Mount Bischoff Extended Tin, Mining Company shows that it made a profit of £534 14s. 10d. It has not declared a dividend since the inception of the enterprise, although it was established at least six years before the outbreak of war.
– Then it will not be taxed.
– That is where tha honorable senator makes a mistake. If it will not be taxed, what sense is there in my standing up here and exclaiming against the injustices and inequities which will be made evident by the operation of the- measure?
– They have made profits if they have not declared a dividend.
– They have made profits, but these have not yet been published, because they have made a profit during the last half-year of about £3,000. During the ten years for which they have been operating, they have been gradually overcoming difficulties in the reduction of their ores, which are very difficult to treat, and developing their mine, and now when they are about to reap some of the fruits of their very laudable endeavours, down comes this measure, and where are they? Note the effect of a great policy for the organization and development of Australian industries in time of war ! Note this lame and impotent conclusion ! Until this measure has finally left this Chamber I shall protest as strongly as I can against the injustices which will be perpetrated by it when it becomes an Act.
Clause, as. amended, agreed to.
Clause 16 -
Clause consequentially amended.
.- In sub-clause 12 there is a reference to the accounting period. I move -
That the word “ last,” in sub-clause 12, be left” out.
I should also like’ to have substituted for the word “before” -the word “nearest.” If the sub-clause be amended in the direction that I desire, we shall overcome the hiatus which must otherwise exist in the case of businesses which balance on the 30th September in any year. However, if the proposal does not meet with itihe approval of . the Vice-President of the Executive Council I shall not press it, because the matter has already been fully discussed, and I have no wish to unduly labour it.
– I am sorry that I cannot accept the amendment of which the honorable senator has given notice. The purpose of the ‘Bill is to levy a tax upon profits made in war time in excess of the profits made before the war. Consequently, it is necessary for us to ascertain what were the pre-war profits of any individual, and also what are his wartime profits. Senator Pratten now asks that in assessing pre-war profits we shall include a portion of the year when the war was in progress. We all recognise that it is in the interests of the taxpayer to make his pre-war profits as high as possible. We know, too, that within a short period after the outbreak of the war the prices of a great many commodities rose sharply. Senator Pratten now desires the profits which were made at that time, and which, must necessarily have been large, to be included in the pre-war profits.
– A man may have made a loss instead of a profit at that time.
– If he suffered a loss he will be under no disadvantage as the measure stands.
Clause, as amended, agreed to.
Clause 17 (Capital; how defined).
– I move -
That the following new sub-clause’ be inserted: - “ 2a. Where any money paid into or credited to a business is not being drawn upon for the purpose of that business, it shall be excluded’ from the capital of the business for the purposes of this Act.”
This is a very necessary provision which will have the effect of preventing the proprietor of any business from claiming credit for a lot of capital which may be quite idle, and which may be put into the business merely for the purpose of lowering the amount of the tax which he would otherwise be liable to pay.
Amendment agreed’ to.
– I should like to know if the Vice-President of the Executive Council intends to move any amendment in subclause 3 of this clause in regard to the words “ unless the Commissioner in special circumstances otherwise directs “ ?
– I have already intimated that, as the result of careful consideration of this matter, an effort has been made to divide into two classes those cases in which the Commissioner had been vested with discretionary powers under this Bill. This is one of the cases in which we think . that such powers may very well be left with the Commissioner. In the other class of cases it has been decided to deprive him of the discretionary powers which he otherwise would have exercised.
Clause, as amended, agreed to.
Clauses 18 to 21 agreed to.
Clause 22 (Assessment in case of default or unsatisfactory return). i
– I think, sir, that you are putting the clauses too rapidly to permit of honorable senators following the great list of amendments that is before them. For instance, Senator Pratten has failed to move several amendments of which he had given notice.
– There is no power to compel any honorable senator to move an amendment.
– That is so. But where amendments are in print, and have been circulated-
– I have no amendments in print before me which have not been moved.
– When any honorable senator circulates amendments which he subsequently, decides not to move, it would be courteous on his part) to inform the Committee of the fact.
– The honorable senator is accusing Senator Pratten of discourtesy.
– Not at all.
– I think that Senator O’Keefe is labouring under a misapprehension. My last amendment had reference to clause 16 of the Bill, and my next amendment has reference to clause 23.
Clause agreed to.
Clause 23 -
Amendment (by Senator Pratten) agreed to -
That the word “ may,” line 1, be left out, with the view to insert in lieu . thereof the ‘word “shall.”
– You have got an amendment in without debate.
Clause, as amended, agreed to.
Clauses 24 to 26 agreed to.
Clause 27 -
– I gave notice of an amendment to substitute the word “ Boards “ for the word “ Board “ in sub-clause 1. Early in the discussion on this measure the Minister indicated that the Government would accept an amendment here.
.-The honorable senator has quite correctly said that I announced my willingness to” accept, on behalf of the Government, the amendment which he aims at. But if it were made in the words he has1 used, it would tie the hands of the Government a little too much. I ask him to agree to the insertion of the words,” or Boards “ after the word “.Board,” so that the sub-clause would read -
There shall be a Board or Boards of Referees to be appointed by the Governor-General.
If that amendment is made by the Senate, the intention of the Treasurer (Sir John Forrest) is to start with the. creation of one Board. But should it be found from the way in which appeals come in.that there is too much work for the Board, an effort will be made to create a second Board or more Boards. If it were provided that there shall be Boards of Referees the Government would be under an obligation to create more than one Board, although there might not be a necessity. If the honorable senator will agree to the insertion of the words “or Boards” I shall have no objection to offer to the amendment.
Amendment (by Senator Pratten) agreed to -
That the words “or Boards” be inserted after the word “ Board,” line J.
– I gave notice of an amendment, to leave out of sub-clause 3 ‘ ‘ Parts IV., V., and VI.” My intention was to give to the taxpayer the broadest right to appeal against the Commissioner to the Board of Referees, but in view of the amendments which have been made in connexion with limiting the power of the Commissioner, and increasing the power of the Board, I do not intend to proceed with the amendment.
Clause, as amended, agreed to.
Clause 28 -
– I gave notice of an amendment to provide that the taxpayer shall not be limited in his appeal to the reasons for objection set out in his objection. I move - ‘
That the word “ not “ be inserted after the -word “ shall.”
I anticipate that the tax will be appealed -against very largely. The ordinary business man does not know anything about law. When he receives an assessment, or when the Commissioner tells him what he has to pay, he will probably discover many real or imaginary injustices, and in the usual business-like -way he will send to the Commissioner a notice of objection. If, before he takes that step, he consults a legal man, then the sub-clause can very well go; but most business men do not consult trained lawyers, especially with regard to a preliminary objection to an income tax, This sub -clause seems to me to rather handicap the business man if he has a good case. I do not wish to labour the matter, but I should like to know whether the Minister can accept the amendment for the reasons I have mentioned.
– I am hopeful that when I have stated the reasons for my inability to accept the amendment, the honorable senator will be so convinced that he will withdraw it. Early this morning I heard the quotation he made from a book which we all read, and I was disposed to think that the direction ought to have been that of the Judge, but now I think it is the law which the honorable senator ought to follow. I invite- the Committee to consider what would be the position if it put in the word “ not.” Suppose the taxpayer appealed against an assessment on the ground that the addition was wrong. That is the only warning which the Commissioner would have received, but. when the appellant got into the Court that objection would not be mentioned, but a variety of other objections would be taken.
– Can we not provide for notice? ,
– We are, by asking the appellant to give notice of his claim. The clause provides that he must set out what he objects to.
– It is only fair to the Commissioner.
– Yes. I point out that in all the preliminary- negotiations which invariably precede final action there is no limit. The taxpayer can go to-day with one objection, to-morrow with another objection, and on the third day with still another objection. It is only when we come to deal with the point that we in this provision ask the taxpayer to state, as he is required to do in every other case, what he objects to.
– Then he will have to consult a solicitor.
Clause agreed to.
Clause 29 -
– I gave notice of three amendments to this clause, and the essence of them is that the appeal shall be held before the Board of Referees. First, I move -
That the words “ Board or “ be inserted before the word “ Court.” «
My reason for submitting the a mendment is that the taxpayer shall not be driven into a Law Court in connexion with the administration of the Act, but if he so desires he shall have his case heard . by the Board of Referees, which presumably will be composed of experienced business men. Having regard to the complications which the imposition of a tax like this will involve, I think that a Board of business men - with all respect to the Courts and the Judges - will be more fitted to hear and give justice to the taxpayer than a mind which is only trained in one direction, and . that is a legal direction.
– That is the purpose of the Board of Referees. This clause deals entirely with those matters of law which must go to a Court.
-Sub-clause 3 seems to imply that an appeal has to be heard before a Court, and. only a Court. The object of my amendment is to make it quite clear that- the hearing of an appeal is not confined to a . Court of law.
– ; The taxpayer must go to the Board first.
– This does not say so.
– I direct Senator Pratten’s attention to the fact that, although it is not specifically stated in so many words which laymen can understand, the whole purport of the clause is to deal with procedure before Courts. It is not necessary, therefore, to include - in fact, it would be out of place to include - a Board. Ifthe honorable senator will refer to another portion of the Bill he will see what I mean. He knows very well that the purpose of the Board is rather to deal with the class of cases he was referring to, and not with legal points. There are also legal points which no business man will say that he is competent to determine. Therefore, the scheme of the Bill is that the Board shall deal with the practical matters of fact, and that where a legal point is raised - and I suppose it always will be raised so long as human beings pass Acts - there must be a legally-trained man to determine it. This clause simply sets out the procedure which, when a legal point is taken, shall be followed.
– Do I understand specifically that business appeals will go to the Board or Boards of Referees, and that only legal appeals will be remitted to the Courts?
Amendment, by leave, withdrawn.
Clause agreed to.
.- I gave notice of an amendment to sub-clause 1, which provides for the Commissioner to gather in the tax first and hear the appeal afterwards.
– We must have that provision.
– There is no objection to the procedure, provided that an appeal is heard within a reasonable time.. I move -
That the following words be added to subclause 1: - “providing such appeal is heard within three months of the date of notifying the Commissioner.”
I do not suggest three months as a mandatory term, hut I suggest that there be something to narrow the very broad margin which the Commissioner may have in dealing with a taxpayer’s money. There is a great conflict of opinion between a good many persons as to what is going to happen in connexion with the collection of the tax. Some persons think that it may be a year or two before an appeal will be heard. It would not be’ fair to arbitrarily assess a taxpayer and collect his money, and keep him waiting a year or two before refunding what the Commissioner had improperly collected. The object of my amendment is to put some limit on the time for an appeal, so that a taxpayer will not have to wait too long before justice is given,, if it is due to him.
– I feel certain that any one who has a knowledge of the operation -of measures of this kind must recognise thai; it is necessary to retain this clause in its present form. The possibility of extending appeals and dragging them out is present, I suppose, in the mind of every lawyer. In the interests of the public revenue, it is necessary that the tax shall be first paid, and that- where there is a dispute, the final adjustment shall take place later.
– I think there might be some limit of time.
– I think that a clause similar to this is to be found in every taxing measure.
.- I had a little experience once with . the Tasmanian Taxation Commissioner. I appealed against my assessment for income tax. I had frequent interviews and communications with the Commissioner. He sent for me, and had conversations with me, in which he told me I had no case. I said, “Very well, go on; I am satisfied.” After an interval of three years, the Commissioner informed me that my claim was acceded to.
– Did the honorable senator ever get his money back?
-I had not paid the tax. I was one of forty odd persons in the same position, and I think I was the only one of the forty who stood out. I mention the matter to show that in one case a Taxation Commissioner took three years to fix up a matter. I hope that the Federal Taxation Commissioner will not do things like that.
– I certainly hope that the Federal Taxation Commissioner will not permit people to delay for three years the payment of a tax. As a possible taxpayer, I am interested in the case referred to bySenator Guy, and I shall make inquiries as to how the’ honorable senator did it.
. - I have a further amendment to move upon this clause, which, as it is quite innocuous, I hope will be accepted by the Government. I move -
That after the word , !”arrears,” in sub-clause 2, the words “ with interest added at the rate of 6 per centum per annum in each case “ be inserted.
It is reasonable to presume tihat if on. an appeal the taxpayer loses, ‘the Commissioner of Taxation will get the money forthwith. But if the taxpayer wins, and there is anything coming to him from the Department, I think he should be allowed interest on that money.
– The clause as it stands represents one of the principles embodied in all our Acts. When an adjustment of this kind takes place, the Crown never claims interest from its debtors, and it never pays interest to its creditors.
– The Crown is usually the longest-winded.
– I can recall instances where persons appealing against the Crown have shown marvellous ingenuity and capacity in prolonging their appeals.
Clause agreed to.
Clause 31 agreed to.
Clause 32 -
– This clause makes it mandatory that the taxpayer shall pay the tax within thirty days of the service by post of a notice of assessment. I point out that the first assessment under the Bill will include two years. I move -
That after the word “ assessment “ the words “ provided always that the first assessment shall be paid in instalments at one, three, and six months’ intervals, with interest at the rate of 6 per centum added at the option of the taxpayer “ be inserted.
– The first assessment will only be for one year, and the Treasurer (Sir John Forrest) has stated that there is to^be twelve months between- one assessment and another. I flunk that will meet what the honorable senator desires.
.- In order to be quite clear, I shall repeat what I understand to be the explanation of the Minister. It is that the first assessment will be only for the year 1915-16, which provides for 50 per cent, of the excess profits to be. paid in respect of that year. That assessment will be made on the first day of next October
– As soon as it can be got out.
– Say within a month or two. Then the assessment for the year 1916-17, . providing for 75 per cent, of excess urofits in respect of that year, will not be due and payable for twelve month’s after the first assessment?
– That is so.
– Then I ask leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Clause agreed to.
Clauses 33 to 36 agreed to.
The following provisions shall apply in any case where, whether intentionally or not, a taxpayer escapes full taxation in his. life-time by reason of not having duly made full and complete returns”^. -
The Commissioner shall have the same powers and remedies against the executors and administrators of the taxpayer in respect of the taxable profits of the taxpayer. as he would have had against the taxpayer in his life-time.
– This clause deals with the position of executors and administrators of any estate, the owner of which has died during the taxable years. Looking into the matter closely, it seems to me that a very great hardship indeed* might arise where estates have been distributed and probate duty paid. I think’ that the Bill should specifically provide that when executors and administrators of any estate have distributed the estate to the beneficiaries and legatees, the Commissioner should not have the power to follow up that money. It is bad luck enough for a man to die-
– If the honorable senator will look at clause 47, he will find that it makes those, controlling an estate liable only for that portion of it still under their control, and not for any portion they have disbursed.
– I have looked carefully into clause 47, which bears upon this clause, but it seems to me that the effect of these provisions is not quite clear.’ It is obvious that, if a man dies before the passing of the Bill, he will not be able to make full and complete returns. I move -
That after the word “ where,” line 2, the words “ after the passing of this Act “ be inserted.
This is to make it quite clear that administrators and executors will not be called upon by the Commissioner to pay taxation in respect of any distribution of an estate which has been made before the passing of the measure.
– The honorable senator’s amendment would have no effect, because nothing will be operative unless the Bill is passed. What the honorable senator is aiming at is the possibility of trustees, and those handling estates, being liable to taxation after they have distributed them. Under the Bill, they will not be liable after they have distributed them, unless they have done so without giving notice, and in that case they ought to be liable.
– Will probate be upset, so far -as the beneficiaries are concerned ?
– No; probate will not be upset. The liability is limited to the amount of the estate still in the possession of the administrator. The honorable senator will see that that is so if he will look at clause 47. Whore a trustee is handling an estate, we must hold him liable for that portion of the estate which is under his control, and on which the Crown has a right to levy this taxation.. We do not make him liable for amounts which have been passed over to beneficiaries.
– Is any one made liable?
– I do not think that we can make any one liable in that case.
– Then the Government do not propose to upset probate under this clause?
– Assuming that it is perfectly bond fide, I do not see how we can’.
– But if it were done before the passing of the Act, what would be the position?
– I do not think we could pursue it further. If a trustee has an estate in his hands we can levy upon it as if the trustee were the owner; but if it has been disbursed his liability is limited to the amount still in his possession. That is not only fair to the trustee himself, but necessary for the revenue.
– The clause appeared to me to give power to the Commissioner to follow up the distribution of any money that had been made since the outbreak of war, irrespective of whether it was out of the hands of the executors or administrators. I felt there would be a risk in giving power to the Commissioner to upset probate distribution. If an estate has paid death and succession duties and the money has been distributed, it is not reasonable to give authority to upset the distribution.
– A similar position arose under the land tax, and the course I have indicated has been followed. Where an estate has been distributed no further action has been taken, the levy being made only upon the portion of the estate in the hands of the trustee.
– I take it, then, that where probate and succession duties have been paid an estate will be practically outside the ambit of this measure?
– Unfortunately, yes.
– In view of the Minister’s statement, I ask leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Clause agreed to.
Clauses 38 to 58 agreed to.
Clause 59 -
Amendment (by Senator Millen) agreed to -
That the words “ it is shown to the satisfaction of the Commissioner that “, lines 1 and 2, be left out.
.- I moveThat the words “or has assigned his estate for the benefit of his creditors” be inserted after the word “ insolvent,” line 4. We discussed this matter on an earlier clause in the Bill, and I pointed out that when an estate was assigned for the benefit of the creditors, the matter was usually placed in the hands of a public accountant to enable the. estate to be wound up quickly, satisfactorily, and economically. The whole wording of the clause seems to indicate that the draftsmen of the Bill did not bear in mind the fact that estates are assigned for the benefit of the creditors, and there appears to be an implication against public accountants, who are really doing a very great service to the business community.
– No great objection can be offered to ‘the aim which the honorable senator has in view, but a difficulty does occur in regard to the wording of his amendment. The word “ assigned,” it is well understood, has a certain looseness about it - it might mean anything to anybody. When this matter came up during the discussion last night, I pointed out that it might be undesirable to recognise anything in the nature of what might be a fraudulent arrangement between debtor and creditor.
– But when a man assigns his estate it is for the benefit of his creditors.
– Yes; but what is meant by “ assigned “ ? The clause, taken in conjunction with the practice of the Department, is quite sufficient as it stands. At present the Department recognises assignments to a properly constituted official.
– Would a public accountant be included ?
– I would not say that, but where one is recognised as an official of the Court, or whose official standing is recognised by the Court, the arrangement will be accepted.
– Then that would include a public accountant.
– It might or it might not. “ I do not know in what relation a public accountant stands to the Court. It must be clear to every one that the Government could not agree to accept arrangements made between private individuals, because an estate might be handed over to anybody who could be called a trustee. This individual must have an official standing, and in such cases the arrangements would be regarded as equivalent to proceedings in insolvency or bankruptcy.
.- After the explanation by the Minister I shall ask leave to withdraw my amendment, because I now find the wording of the clause inferentially includes my idea, and that no aspersion can be cast upon public accountants, who deal with matters of this sort.
Amendment, by leave, withdrawn.
.- I move-
That the words “ a Board of Referees or “ be inserted after the word “ hardship,” line 6.
This will widen the appeal available to a taxpayer. If the clause stands as printed the Board to be appealed to will consist of the Commissioner, the Secretary to the Treasury, and the ComptrollerGeneral of Customs, all very able and trusted officials; but I “think the taxpayer should have the right of appeal to some other tribunal.
– There are reasons why the three officials mentioned should have . this duty thrust upon them. It is quite obvious, from another clause, that we should have as adjudicators men whose positions are such as to insure secrecy, and whose first obligation is to the Government. There will be appeals for relief from the tax. I do not know that the Board of Referees is quite the body to decide such questions. The public interests are concerned here very materially, and these three officials, doing similar work under other Acts, by their large experience and intimate knowledge of business matters as they affect taxation, are best fitted to deal’ with such cases. Their probity is beyond question, and they are also under an obligation to see that the public revenues are faithfully protected. In the circumstances, they constitute a Board to which little exception can be taken.
– I take no exception to any of the three gentlemen mentioned. The Commissioner of Taxation is a very valuable official to the Commonwealth in the collection of money. His job is to collect as much revenue as he can get. The position of the Secretary to the Treasury is occupied by another well-known public servant, who is a Commonwealth official, and, perhaps necessarily, has not a very broad knowledge of business and commerce. The Comptroller-General of Customs is another gentleman whose job in life is the collection of money from taxpayers. . His duty is to get as much as he can for the Government..’ Where a taxpayer has suffered such a loss that the exaction of the full amount of the tax would entail upon him. serious hardship, he has to appeal to a Board of this sort. I submit that the Board of Referees, consisting of two, three, four, or five gentlemen of large commercial experience, and with no interest in the collection or pay ment of money, is the best body to deal with these matters. Many and various circumstances may have to be considered. There will be the circumstances of new businesses, and the industrial “ war babies.” The Board of Referees is a better Board to deal equitably with cases of that sort than the three very high officials mentioned.
Clause, as amended, agreed to.
Clause 60 agreed to.
Title agreed to.
– The question is - That I report ithe Bill with amendments.
– I wish to move for the reconsideration of clause 8.
– As clause 8 has already been amended by the Committee it will be necessary for the honorable senator to move for its recommittal when the motion “ That the report be adopted “ is made in the Senate.
Bill reported with amendments.
Motion (by Senator Millen) proposed’ -
That the report be adopted.
Motion (by Senator Bakhap) agreed to-
That the Bill be recommitted for the reconsideration of clause 8.
In Committee (Recommittal) :
Clause 8 -
The businesses to which this Act applies are all businesses (whether continuously carried on or not) of any description deriving profits from sources within Australia, excepting” -
Businesses where the principal business consists of mining for gold; and
– I move -
That after the word “ gold “ the words “ or tin “ be inserted.
Although I have fought the measure on principle, I have no intention to captiously delay its passage, and, therefore, will not recapitulate arguments already used. I invite the grave consideration of Senator Millen and the Committee to the particular illustration I shall give. I have endeavoured so to amend the clause that there would be no specific exemption of mining for tin alone. I have desired to exempt all industries that have not earned profits directly traceable to war conditions, but I want now to be very specific in regard to the industry which, has afforded me so many illustrations of the possible injustices that will be inflicted by the measure if it becomes an Act. Tin, so necessary to the conduct of the war, is produced in commercial quantities almost exclusively by countries in the British Empire. Australia, Cornwall, the Malay Peninsula, and British Nigeria are very important sources of tin production. There is not a State in Australia that does not produce tin ore in fairly substantial quantities. The only foreign countries that produce tin in anything like commercial quantities are the Dutch East Indies and Bolivia. There is not a single profitable tin mine in the whole of the United States of America, although millions of dollars have been spent in the attempt to initiate one and carry it to the profit-earning stage. Bolivia is a very important source of the metal, but outside that and the Dutch East Indies there is not a foreign country that produces tin in commercial quantities, so far as the world’s markets are concerned. The territory of *he Chinese Republic produces very large quantities of tin, but practically the whole of that output is absorbed in the great internal trade of the Republic, and does not go on the world’s market. We want to maintain our advantage in this respect, particularly during this war period, and it would be lamentable to do anything to check the production of this ore, in regard to which we are the fortunate possessors of so many valuable tracts. If we do, we shall be doing something that will seriously militate against the commercial status of the Commonwealth in ‘ the very trying period that will ensue immediately on the proclamation of peace. It cannot be demonstrated that tin has appreciated because of war conditions. On the contrary, it can be shown conclusively that the average price in the three years before the war was considerably above that of the first three years of the war. We have in the Commonwealth large tracts of granite, a rock intimately associated with the existence of tin deposits, and it is necessary to develop our tin mines, as tin is a most valuable factor among the metals necessary for the successful prosecution of the war. It is classed as the noblest of the base metals, and is vitally important to all the phases of civilized life and commercial production. The development of tin mines has been also a very important element in opening up the jungle country of some of the Australian
States. I do ask honorable senators not to think that I am sore-headed over this measure simply because I am one of the representatives of a tin-producing State. I give the Committee my assurance that the provisions of the measure do not affect me personally one jot, although I own tin-producing leases. But they will materially affect the status of an industry that has played a most important part in the development of the State of Tasmania. I am sure the Minister knows that my opposition to this measure is not based upon what I might call unsatisfactory grounds. . He knows I do not like its principle, and I do not know that he is very much enamoured of it himself. At this juncture, it is absolutely essential for us to neglect) nothing that will help to improve our position in regard to the very troublous and delicate period that will ensue after the war in connexion with trade development, and that competition for the world’s trade in which we believe that we shall be successful if we only walk warily.
. - Like Senator Bakhap, I have no desire to obstruct the passing of this Bill. But I wish to indorse to the full all that) he has said regarding the importance of this question to the State which I have the honour to represent. There are thousands of men employed in. the production of tin in Tasmania who, if this measure be passed in its present form, are likely to find themselves without employment in the course of a year or so. Upon the motion for the second reading of this Bill I frankly recognised the necessity which exists for raising additional revenue to enable us to prosecute the war to a triumphant conclusion. On that occasion the Vice-President of the Executive Council (Senator Millen) charged me with inconsistency on account of my declaration that, though I would have preferred to see all metals exempted from the operation of this tax - that is to say, all the . base metals which are required in the manufacture .of munitions - if no exemptions were to be granted I would forego my desire in that direction. Some very pertinent arguments have been advanced at meetings in Tasmania -in favour of exempting the tin mining industry by men who for years have been intimately associated with the production of iia. They recognise that the passing of this measure will mean that many small co-operative companies, which may or may not be registered, will be very heavily hit. There are quite a number of small tin mining companies in Tasmania which have been operating for years, very frequently at a loss.. Honorable senators from Queensland are probably in a position to make a similar remark in regard to tin mines in that State. I know that when I was travelling in’ North Queensland in .1899 I passed through a great deal of tinbearing country. A.t that time there were operating there many small’ companies which, under this Bill, will probably be hit in exactly the same way as will similar companies in Tasmania. As Senator Bakhap has remarked, tin is pretty freely distributed throughout Australia, so that in reality this is an Australian question. We cannot point to many tin mines in the Commonwealth which have made large profits. On the other hand, it would not be difficult to enumerate quite a number of companies which have spent large sums in tin mining without receiving any financial benefit. I have much pleasure in supporting the amendment!, and I hope that its fairness will recommend it to the Vice-President of the Executive Council, even at this eleventh hour.
.- When this Bill was previously under consideration I submitted an amendment in favour of granting no exemptions from its operation. I did so with a view to expediting its passage, because if my amendment had been carried we would then have been relieved of the duty of having to consider the claims of different branches of industry to be exempted from the tax. But, seeing that the gold-mining industry has already been exempted, there is no reason why similar treatment should not” be extended to the tin-mining industry. I do hope that, as the Bill has been dealt with so expeditiously, the Vice-President of the Executive Council (Senator Millen) will agree to the amendment. Tin is found in nearly all States’ of the Commonwealth, and I venture to say that more can be urged in favour of exempting that metal from this taxation than can be urged in favour of exempting gold. I trust that the Government will obviate the necessity for us to vote upon this proposal. Representing, as’ the Bill does, the high-water mark of the Government’s financial pro posals to win the war, I am loath to place myself in opposition to it. If the VicePresident of the Executive Council will agree to the amendment submitted by , Senator Bakhap, I shall be relieved from the obligation, which will otherwise be forced upon me, of having to vote against Ministers. I claim that I have materially assisted them to get this Bill dealt with so expeditiously by reason of my absence. It was a most difficult thing, I confess, to listen to the logical reasoning of many honorable senators who were opposed to the measure and resolutely declined to vote against the .Government. Many times I felt that the amendments proposed by Senator Pratten were entitled to support from me. But I was influenced in the action which I took by the conflicting feeling that in supporting those amendments I would be embarrassing the Government upon one of their -win-the-war measures.
– As this is- the usual hour to suspend the sitting for lunch, and as there is no sessional order governing the position today, if it be the pleasure of the Committee, I shall resume the chair at 2.30 p.m.
Sitting suspended from 1 to 2.30 p.m.
– I have not much more to say on this matter. Because I desired all war-time profits to be put on a footing of absolute equality, I moved an amendment at an early stage to deal with all industries alike. But as the Committee, in its wisdom, did- not decide in accordance with my .view, I think that I am not inconsistent, but) am really following the course which wisdom points to in trying to see that if gold is to be exempt from the tax inasmuch as the same arguments apply tin also shall be exempt.
Senator KEATING (Tasmania) [2.311 - I hope that, even at this late stage, the Minister (Senator Millen) will see the wisdom of accepting the amendment. A great deal has been said in regard to the differentiation between gold mining and tin mining. Although tin mining is an industry of great, importance to Tasmania, it is also of great importance to the other States. It is of immense importance to the Empire itself. Apart altogether from the requirement of tin for the immediate purposes of the war, there is a shortage of the article for ordinary use. Tin plate is practically unobtainable for very many of the normal industries.
Unless we encourage tin production that condition will exist for a considerable period after the war. It cannot’ be too forcibly stressed that tin mining is a species of mining which is carried on “by a great number of persons on, comparatively speaking, a small scale. A great deal of prospecting is continually going on, and as a result small companies are originated and embark on the enterprise of extracting.
– The Commonwealth Government has put up -two batteries in the Northern Territory to stimulate the production of tin there.
– That was an excellent idea. There has been no division of mining in which fluctuation has been . so apparent for a long period of years as there has been in . tin mining. The price nas been down to considerably below £100 per ton, and it has been up to £200, and even beyond that sum.- Iti has been the increase in price which has stimulated prospecting, enterprise. Very often there has been no reward to Mie prospectors, and in many instances small parties have been able to form themselves into associations or companies to carry on tin mining. That kind of thing should be’continuous during the war and afterwards, but there is a stimulus during the present period to embark upon an enterprise of that character. I hope that the Minister will see his way to accept the amendment, and so allow the continuance of prospecting in the different States, and that we may look forward to an increased output from the Commonwealth as well as from other parts of the Empire.
– Tin mining is one of the primary industries. It is hot by any means a, profitable one when it is considered in all its bearings. Yet agriculture, dairying, law, medicine, and gold; mining are exempt.
– And members of Parliament.
– But members of Parliament have not had their salary increased since the war began. An amendment has been made to exempt wolfram, tungsten, scheelite and molybdenite. This request to exempt tin is a very reasonable one. I cannot understand why the Minister is so stubborn in not accepting the advice which has been offered to him from all round the chamber. I Hope that after my few remarks He will see the errors of his ways..
– I have listened to a good deal in the nature of very sound argument as to why tin should be exempt, but I have not heard a single argument which could not be applied with equal force to the exemption of every other industry. . We are told that tin represents an important industry,” so does zinc. We are told that tin is requisite in time of war; so is zinc.
– The price of zinc has gone up since the war began. ,
– So has the price of tin. I assume that in the mind of the Imperial authorities zinc is more important than tin.
– The distillation of zinc in the British Empire instead of in Belgium and other countries is more important.
– This reference to the action of the British authorities shows that in their mind zinc is more important than tin. Suppose that the price of tin has not gone up. This Bill does not propose to levy a tax on the selling price of a commodity. What it will levy a tax upon is the excess of profits made in wax time over those made previously. It is a fact that many men make much larger profits when they are selling at low values than they do otherwise. We are told that the tin industry requires to be stimulated; sq does every industry, in a sense. If this tax is going to be a handicap to the tinmining industry it will equally be an imposition on every other industry.
– The point is, when are you going to increase the land tax ?
– As soon as my honorable friend will help me to get this Bill out of Committee, I will consider that suggestion. In the meanwhile, I remind honorable senators that, whilst the arguments sound perfectly good when they are addressed to the tin industry, they must go farther, and propose to apply the same . reasoning to all industries; in other words, to destroy the Bill.
– I listened with very great attention to the statement of the Minister (Senator Millen). He wants to know why tin should be exempted from the imposition of this tax.
– Why should molybdenite?
– Simply because it is useful to the Empire. . At the present juncture, it is very essential that every opportunity should be given to those who work tin mines to produce that which ia absolutely necessary for the exportation of our raw products in a manufactured form. I refer particularly to our fruits, many of our meats, and other articles which are a vital factor in the development of the country. It is not very long ago that a contract was made with the British Government, for a very large quantity of tinned fruit, and also of tinned rabbit. In fact, tinned meat enters very largely into the sustenance of the Army at the Front. The Minister has said that the same arugments can be adduced in the case of other metals, but I do not think that it can apply to steel, copper, and many other articles which are valuable in a good many ways. Here is an occasion when it is in our power to do something practicable to stimulate an important industry. The fact that the Commonwealth has established two batteries in the Northern Territory to stimulate tin production ought to encourage the Government to go a step farther by exempting the industry from the operation of this tax. When the” pastoral industry is exempted from the tax, in the sense of being able to make up the losses pf previous years, that is all right ; but when it is a question of the struggling tin-miner making up his loss, a tax is placed upon him, and he cannot redeem his loss. The Government will not allow him three years in which to recover. Admitting, however, that there is a claim on the side of the pastoralists, I submit that the tinminer at this juncture has a ten-fold higher claim upon our consideration. The pastoral industry is protected from the effects of fire, flood, burglary, drought, and everything else. The tin miner may be washed out, and his tin may be stolen from him, but he gets no concession under this Bill. The tinmining industry is essential to the sustenance of the nation and the progress of Australia, and it should be exempt from this measure. We have to consider that it is necessary not only to develop the industry here in the south, but in the property of the Commonwealth in the north. I hope that the Committee will agree to the exemption of this industry.
– I should not have spoken. on this amendment but for the last remarks of Senator Senior, which were altogether too hot. He has said that the pastoralists are protected against losses by fire, drought, flood, and everything else, whilst the tin miner is not. I wish to direct attention merely to the fact that the clause in this Bill providing for deductions for the causes referred to applies alike to every industry carried on in the Commo’nwealth .
.- On the second reading of the Bill I said it was my desire that there should ‘ be no exemptions from the operation of this tax. I said later, when certain exemptions were agreed to, that if any industries were to be exempt, mining industries had special claims to consideration, and I should be prepared to support the exemption of the tin-mining industry. Senator Millen contends that all the arguments which can be “used in support of the exemption of the tin-mining industry may be applied with equal force to the exemption of every other industry. I think that is a statement which cannot be substantiated.’ There is scarcely a pro- duet of Australia in connexion with the export of which tin is not used. The production of tin throughout the world is decreasing, and yet the metal is being more - largely used now than it ever was before. Tha fact that it is very largely used in the manufacture of munitions justifies a claim for special consideration of the industry under this measure. In common with other “industries that might be mentioned, tin mining gives employment to a great number of men and in out-of-the-way places. I have known whole communities in particular districts to be maintained by the working of tin mines in those districts. Senator Bakhap’ is aware that on’ the north-east coast of Tasmania a tin mine was worked for years .without paying dividends, and yet was the means of maintaining two or three agricultural communities by reason of the fact that the labour employed at tHe mine provided a market for their products.
– That industry will not be effected if it is making no profits. *
– The mine referred to was recently sold, and if it now makes profits it will be’ affected by this measure.
– I have noticed that the mine to which I have referred was recently purchased by a firm in Hobart. It will be greatly to the advantage of the district in which it is situated, and of the Commonwealth, if it is worked by the new owners, and should profits be made from its working up to the amount taxable under this measure it will come under its operation. I intend -to support the claim for ‘ the exemption of the tinmining industry, and I hold that in doing so I shall be quite consistent with the position I have previously taken up.
– In dealing with this amendment I . find myself in exactly the same position that I was in in dealing with a previous amendment moved by Senator Pratten. If an effort were being made by honorable senators to remove the exemption of the goldmining industry and of every other mining industry, except those in connexion with which there was a shortage for munition purposes of - the metals being worked, I should be found supporting that effort. But I cannot follow the course which some honorable senators are taking in this case. We must obtain revenue, and we are makirig a special effort to do so under this Bill. The arguments advanced in support of the exemption of the tin-mining industry are quite reasonable, but they might just as reasonably be applied to the exemption of every other industry.
– Is there a special reason for exempting lawyers?
– No, there is not. There is a special reason for the exemption of new industries essential to the progress of Australia, and of mining for metals’ required for’ the manufacture of munitions. There are many businesses that have greater claims to consideration than have some forms of the mining industry. The arguments advanced this afternoon would be quite admissible if in normal times we were discussing an ordinary measure of taxation. But if we exempt the tin-mining , industry there is no reason why we should not extend the exemption to a dozen other industries.
– The honorable senator voted for the exemption of other industries.
– I voted for the exemption of new industries which would create new prosperity, -which is so essential to the/ present and future of Aus tralia. - But I voted against Senator Gardiner’s sweeping proposal to strike out all exemptions!. I think that the two industries for the mining of gold and tin should be placed side by side.
– But gold is exempt.
– In my view, the gold-mining industry should not be exempt, and- if SenatorO’Keefe were proposing the removal of that exemption I should be glad to support him. Because we have wrongly exempted one industry is no reason why we should wrongly exempt another. -
– Because we did not do right in ‘ exempting tlie gold-mining industry is no reason why we should not do right in exempting the tin-mining industry.
– If the honorable senator argues in that way, he should have voted witih Senator Gardiner to strike out all exemptions. Por the reasons I have stated, I cannot support the amendment.
– I have listened with a certain amount of amusement to the debate on this question. Certain honorable senators claim to be consistent in voting for the exemption of the tin-mining industry, though they previously voted against the exemption of other industries. Certain honorable senators stated clearly on the second reading that if this were a War Profits Bill, and not a War-time Profits Bill, they would be pleased to support it. I refer in this connexion particularly to Senator Bakhap. He has stated . that, previous to the war, the tin-mining industry in Australia was not a paying concern.
SenatorBakhap. - I did not say anything of the soft. I said that certain mines would come under “the operation of this measure which had not benefited by any appreciation in the price of tin, and which had not previously declared dividends.
SenatorFOLL. - I understand that the attitude taken up by Senator Bakhap and other honorable senators is . that, as a result of the war, excess profits have been made in this industry, and many tin mines are in a better position to-day than they would be in if ithere had been no war.
– The honorable senator hag quite misunderstood ‘my argument.
– If tin-mining industries are not in a better position’ than they were in prior fo the war,’ they will not come under the operation of this measure.
– They’ may have earned profits because of conditions not arising out of the war at all.
– I have no wish to prolong the debate, but I say that if tin mines have made excess profits because of the war, they should come under the operation of this Bill. I am a representative of a State in which tin-mining is carried on very extensively, and I am as anxious as any other honorable senator can be thai the industry should be given every encouragement? However, I believe that Senator Earle nut the matter clearly when he pointed. out that revenue must be obtained, and that’ every class in the community should rise to the occasion. If profits are being made in any mining industry as the result of the war, those making them should pay their bit! towards financing the war.
– I have been quite astonished by the arguments of Senator Earle. Yesterday he put before us an amendment to secure the exemption of some industries which existed possibly only in his imagination. He dealt with vague industries which, if they came into existence, he considered should not be taxed. Here we are dealing with an industry which is carried on in every one of the States, and produces something that is essential in time of war. Tin is possibly .the most essential of the metals at present required, in view of the part it is playing in the prosecution of the’ war. A reference has been made to a mine that was carried on for years without paying any dividend. It has since passed into the hands of a company, which may possess the capital to work it profitably, and if it is so” worked, not a small, but a huge, percentage of any profits made from it will be taken by the Government under this Bill. If there is anything to be said in favour of discrimination between the various indus.tries the tin-mining industry is certainly amongst the first of those having claims to special consideration. What will be the result of tin-mining under this measure. Let us suppose that Senator Foll and I own, a mine, the life pf which is anticipated to be five years, and we find that 50 per cent’, of the profits will be taken by this form of taxation. In such circumstances, I think we would come to an agreement to slacken hands, and to allow the mine to remain comparatively idle until the taxable- period had passed.
– That! is exactly the point.
– The same argument would apply to all metals. Senator GARDINER. - We ;are now face to face with the fact that if the Committee exempts tin, it will probably mean the end of the Bill so far as its Committee stages are concerned. Although a>t the beginning of the debate, I was in favour of exempting everything, when it comes to a question of taxing tin mines, upon which probably for two or three years the owners have been spending a lot of money in developmental work, I think the attitude of the Government is most unreasonable, especially in view of the fact that other mining enterprises necessary for the conduct of the war have been exempted.
– Lead and zinc have not been exempted.
– An amendment by Senator Fairbairn for the exemption of molybdenite and wolfram was accepted without a qualm.
– But attached towolfram and molybdenite there are conditions which do nob exist with regard to tin. i
– If wolfram and molybdenite have been exempted because they are necessary for the prosecution of .the war, why should not tin’ be exempted also, because surely iti is equally essential, and in its use plays a very important part in our industrial operations. I am arguing along these lines, because I am rather anxious that the Government should accept (the amendment. I do no like to vote against the Ministry on their War-time Profits Tax Bill, particularly on the revenue clauses, but I think they would do well to reconsider the position.
– It has been pointed out by the Minister, and also by Senator Foll, that, because other base metals, such as zinc, copper, and lead, have not been exempted, there is no justification for exempting the tin-mining industry; but those who are conversant! with mining all over Australia know perfectly well that prospecting for tin is a much more speculative enterprise than prospecting for other base metals, particularly copper, zinc, and lead. As a rule, copper and zinc mining is not undertaken except on a large scale, although I know there are a number of small zinc and copper properties in different parts of Australia.
– Do you know of any tin mines that will come under this Bill ?
– I know that if half-a-dozen men, who started in a cooperative way to develop a tin mine, find it necessary for their own protection to register their company, they will come under the provisions of this Bill. As a rule, if tin miners strike a rich patch in a lode, and make a few hundred pounds out of it, they invest in machinery in order to develop- the property, and although they may have been living from hand to mouth for three or four years, if they are now making a littleprofit, they will be taxable under this measure. Instead of discouraging enterprise in this direction, we should do all we can to stimulate the development of such properties. Senator Senior, I think, advanced a very strong reason for this course. Zinc is not used to any extent as a covering for foodstuffs, but tin certainly is required for ‘that purpose.
– Because it is practically insoluble in acids.
– Tin is required as a covering for practically every sort of preserved . foodstuffs, and it is well known that, unfortunately, the production of tin has been decreasing throughout the world for the last fifteen or twenty years. It is probable that, in the near future,* some substitute will be required if the world’s output continues to decline, so we should do everything possible to stimulate further prospecting, especially in the unknown areas of Australia. I have no doubt that, in Northern Queensland, there are still thousands of square miles of country that have not yet felt the prospector’s foot.
– That is so.
– I am ‘ satisfied also that, in the north-west of Western Australia, where tin has been found, but not in payable quantities, tens of thousands of square miles, have not been explored for this mineral. As I have . already shown, the industry is, to some extent, a gamble, and people will not invest money in it if they see a prospect of a better return from some other business. Tin-mining, therefore, stands on an entirely different level from other metals such as zinc and copper, operations in connexion with- which are usually conducted by big companies that very often are able to evade taxation. Senator Foll said that if the companies make ‘huge profits, they should pay taxation. I agree with that, but,, unfortunately, tinmining prospectors do not. make big profits.
– Then they will not have to pay taxation.
– Certainly not; but we want to encourage such people to prospect for tin deposits all over Australia. This argument has been advanced from members of all three parties in the Senate, because there are still supposed to be three parties, or, at all events, there are in the Senate members who, twelve months ago, were divided into three parties.
– -Order ! The honorable senator is not in order in alluding to political parties in his discussion of the Bill before the Committee.
– If you rule, Mr. Chairman, that I may not make reference to the parties in the Senate, I think you are giving a strained interpretation of the Standing Orders.
– The honorable senator has his remedy.
– I do not want to take that remedy, which only causes loss of time. We all know we have it, and, probably, it might have been taken in many instances in the last few weeks.
– Order! The honorable senator must withdraw that remark, which is distinctly disrespectful to the Chair;
– I do not wish to be disrespectful tothe Chair; but I do think that you pulled me up rather quickly.
– Order !
– I withdraw the remark, and will not disregard your ruling. I was simply trying to illustrate my meaning by saying - and I think if you had let me finish you would not have pulled me up - that the arguments in support of the amendment were particularly sound, because, they were not tinged with any party colour, coming as they did from members who belonged to three different parties twelve months ago. Probably, it cannot be said of any other amendment moved on this Bill that the same measure of support has come for it from all sections of political thought in this chamber. Even at this eleventh hour the Minister ought to listen to the arguments adduced by honorable senators, who represent all sections of political thought in Australia, and give his consent, on behalf of the Government, to the passage of Senator Bakhap’s amendment.
– I am loath to join in this discussion, but feel there is a certain confusion of thought in the mind of the man in the street about the production of tin. Senator Bakhap pointed out the other day that the metallic value of tin for the three pre-war years was about £190 per ‘ ton, and that since the war began, and up to the last six months, it had been considerably less. To-day the metallic price for tin in London is about £240 per ton,, but the Australian product is tin oxide, containing about 70 per cent, of metallic tin. The war insurance on the metal shipped to England is about £10 per cent, bringing the metallic value of our tin in London to-day down to £215 per ton, before any extra freight is paid.
– Most of the tin -oxide is smelted in Australia.
– But the tin is realized, in London. Australia produces about 5 per cent, of the world’s metallic tin. Most of the arguments adduced so successfully to exempt gold, molybdenite, wolfram, and scheelite-
– But not one argument was brought forward.
– Then may I put it that most of the arguments that so successfully influenced the Ministry to exempt those metals could be applied with equal force to tin? I have no personal acquaintance with the -tin industry of Tasmania, but have a fairly close and thorough acquaintance with tin production in New South Wales and Queensland. Round about Stanthorpe, and parts of Northern Queensland, and Emmaville and Tingha, in New South Wales, are the principal places of tin production in those States. On the average, it can reasonably be assumed that tin mining in Australia has been unprofitable. In spite of the comparatively high price of tin during the last six or seven years, there has been more money lost, on the average, than made in mining it. One has only to go about the States of New South Wales and Queensland tonotice that the greater part of the derelict secondhand machinery for sale there was previously used for tin mining. At all the places I have mentioned one can see monuments of capital lost in the attempt to mine tin.
– You see that more in gold mining than in anything else.
– But gold mining is exempt. We are asking that tin shall be exempt also, and using the same arguments as were used to exempt gold. ‘ Every extra ton of tin produced in Australia adds to the aggregate wealth of the community. Tin mining is now largely carried on in New South Wales by small syndicates of working men, who club together, get a sluicing -plant, wash the tin out of the alluvial, and take the “ bunce,” whatever it is. They take the ups with the downs. If there are downs, and they make only tucker,.they are satisfied, but it is not -fair, if a syndicate strike a patch this year, for the Government to take 75 per cent, of all they make over £1,000.
Question - That the words “ or tin “ be inserted (Senator Bakhap’s amendment) -put. The Committee divided.
Majority . . . . 1
Question so resolved’ in the negative.
Bill reported without further amendment; reports adopted.
Motion (by Senator Millen) proposed -
That this Bill be now read a third time.
– I rise to put in my protest against this Bill, which falls short in every respect of what a taxing measure should be. It is calculated to disturb industry, interfere with business, and unfairly affect certain sections of the community. Taxation, particularly war-time taxation, should press equally upon the shoulders best able to bear it. This tax will bear harshly on weak shoulders, causing breakdowns in trade in some instances, and interference with business generally. I enter my protest at this stage against this measure, which has passed through Committee without . any hope of being materially improved.
– I, too, as a supporter of the Administration, and as one who is quite willing to support an equitable system of taxing genuine war profits, disclaim any responsibility for the measure as it seems likely to be placed upon the statute-book. So thoroughly was the whole community imbued with the idea, that only profits genuinely derived from war conditions were to be taxed, that as late as three days ago I received a request for a copy of this measure from a barrister, who alluded to it as the War Profits Bill. He wished to be supplied with a copy of the “ War Profits Bill “ as it had come to the Senate from the House of Representatives. There is another gentleman who at one time held the portfolio of Treasurer in New South Wales, who was evidently under the same impression. In a dissertation adverse to the principles of this measure, Sir William McMillan referred to it as the “War Profits Bill.” Undoubtedly the community accepted it as a measure under which profits arising out of the war would be taxed, and they were entitled to have such a measure. But they were not entitled to have imposed upon them a measure which will place disabilities upon practically all the industries of Australia. I venture to predict that after the first experience of the Bill the Government will come down and ask for its complete repeal. Personally, I disclaim any responsibility for it in its present form.
– It will be a second Daylight Saving Act.
– I wish to protest against the inequities of the Bill. Sufficient has been said of the incidence” of the proposed tax to show the Vice-President of the Executive Council “(Senator Millen) that there is bound to be a storm of opposition to it from the business and manufacturing community. Personally, I disclaim all responsibility -for the incidence of the proposed taxation. I stand here as a member of a party which was committed to a fair measure of taxation on war profits. But this is not a measure of that description, and I hope - as Senator O’Keefe interjected just now - that it will share the same fate as did the Daylight Saving Act. The net result of all the illuminating utterances to which we have listened since the measure was introduced is that gold, wolfram, and molybdenite have been exempted from the operation of the tax, that the pastoralist has been given a little more consideration, and that the trading and manufacturing community are going to be hit even harder than we anticipated they would be hit. This is a Bill which is going to penalize new industries. I protest against it, but at the same time I must thank the Minister in charge of it for the patience which he has exhibited.
– It was sorely tried.
– I thank the honorable gentleman for the good temper that he has displayed, despite many provocations. I am delighted to know that we have got so far without any bad blood being engendered. I also thank the Minister for having stated that if one Board of Referees cannot hear appeals from Sydney, the Treasurer will appoint another Board and not compel appellants from that city to be dragged over here to have their cases decided. And further, I thank the honorable senator for having afforded . taxpayers a wider appeal against the arbitrary decisions of the Commissioner. Particularly am I pleased that the first assessment under this Bill for 1915-16 will be collected separately, and that the second assessment - that for the year 1916-17 - will not be collected for twelve months afterwards. This is a very great concession to tha criticism in this chamber, and shows what the Government themselves think of the measure. Before the assessment for 1916-17 is due for collection, I trust that this Parliament will have placed upon the statute-book a more equitable Bill, which will put the burden of taxation on the right shoulders, and grant exemptions to nobody.
– I am glad to know that it is not the practice, of this Senate, after a couple of weeks have been devoted to the consideration of a Bill, and after many amendments have been introduced into it, to turn round and kick it from one end of the chamber to the other. Those honorable senators who have repudiated their responsibility for this measure may’ do so here, but their action will not carry much weight with the people outside who have to pay the taxation. Personally, I accept my full share of responsibility for the Bill and for everything that is in it. True, I did not carry the amendments that I desired to see inserted in it. The wisdom of the Senate was against me, and I bowed to its decision. But no matter what form the Bill took, it would still be unpopular with those who have to pay the tax. Instead of allaying doubts and dispelling difficulties, the remarks of honorable senators who have preceded me are calculated to encourage rebellion against it. We need money to enable us to continue to prosecute the war. Ever since the struggle began we have had upon our tongues a War-time Profits Bill.
– Especially at election time.
– But the people have invested their profits in the war loan now.
– Any Bill which imposes taxation will be unpopular.
– Surely because we believe in a War-time Profits Bill, the honorable senator does not imagine that we believe in a Bill like this. .
– Senator Gardiner has himself . pointed out that the measure must contain inequities. But having agreed to it, it is our duty to send it forth to the country with an expression of hope that the people will assist the Government by providing the necessary money with which to finance the war. .
– I would point out to those who have been opposing the Bill that it is typical of all the taxation measures which have been introduced by the Ministry. It will not . encourage a single new industry. Rather will it be a distinct discouragement to those who are prepared to invest their capital, and to employ labour, in new industries. The revenue derivable from it will cost an enormous amount to collect. Conceivably it may cost £50,000, or even £100,000. This is a feature of the Bill of which we ought not to lose sight. Further, the measure involves a complete violation of the basic principle of taxation. Taxation should be levied as it is levied for municipal purposes in New South Wales. There it is levied straight out on the unimproved value of land, and that circumstance greatly assists in the employment of labour and the investment of capital. The Bill is a direct negation of that principle, and consequently is injurious to the best interests of this country. But the Government must get revenue from somewhere, and rather than face the vested interests which are so well represented in this chamber by Senator Fairbairn they are prepared to fasten on to the manufacturers and the enterprising men. of the community a tax which will be proportionate to the energy and skill which those persons exhibit in the conduct of their businesses. There is another invidious distinction in the measure. During the year 1914-15 very substantial profits were made on account of the war. But under this measure the whole of those profits will escape taxation. If it be a fair thing to allow tne 1914-15 profits to escape, it is not just to levy taxation on the 1915-16-17 profits. I entirely disagree with those who hold up Sir William McMillan as a paragon of excellence on the question of taxation. He is one of those mischievous men like John Stuart Mill and Adam Smith,, who have done more to muddle the financial affairs of Great Britain and Australia than have any other three men of whom I have any knowledge.. Sir William McMillan is mainly responsible for the muddled condition of the finances of New South Wales, ever since he occupied tne position of Treasurer of that State.
– There is some excuse for Adam Smith and John Stuart Mill, but not for Sir William McMillan.
– There is no excuse for honorable senators like Senator de Largie to refuse to . adopt the truth when it is put to them so frequently. Men like Adam Smith. John Stuart Mill, and Sir William McMillan have, no doubt, been instructed and compelled to mould their opinions to suit those of their constituents, who own the country which they state they represent.
– I do not find any mention of the names of those gentlemen in the Bill.
– No, sir, but the name of Sir William McMillan was held up by an honorable senator as a paragon on the question of taxation. As one who has persistently opposed that gentleman politically . in New South Wales, I am glad to have this opportunity to say that I have not the slightest faith in him, and that no one there now regards . him as an authority on taxation, whatever other subject he may be an authority on. I repeat that this Bill violates all canons of taxation, more particularly that laid down by the late Henry George. I hope that Senator Millen’ will bring before the Cabinet in the very near future a proposal to levy the taxation of the Commonwealth on the land-owners in proportion to the value -of the land which, they monopolize.
– I wish to add a few words to the burial service of this infant, which has been hatched by the advocates of diametrically opposed methods of taxation. But I feel that we are not bidding goodbye to the . measure. It will not be very long before it is brought here again for revision.. I have always been in favour of a war-tdme tax and of taxation which will assist the Government to find the money necessary to carry -on the war. I . saw just now a proof of an advertisement for the war loan, where Australians are seen showering tons of silver on the top of a German and crushing him.- All the silver which the Government get from the operation of this measure will not do much to assist in crushing Germany. Last year the deposits in the banks were £35,000,000 more than in . the previous year. I consider that under any fair method of taxation one-half of thati amount could be got for . the National Treasury. I feel that many of those who have the wealth in the banks to-day are going to escape under the Bill, and that many of the struggling industries which we ought to foster, for the welfare of the soldier when he returns, are going to be completely crushed. I have no doubt that the Government . have done the best they could, but if the Government I had the pleasure of supporting so long had introduced the measure it would have been as bitterly and strenuously fought by Senator Millen from this side as this Bill has been fought by Senator Pratten from the other side. That party has no love for this measure.* It is one of compulsion; it is the result of a promise they made for the position they «occupy to-day. They brought in, as a response to the appeal to the country, an absurdity which is not going to carry out their wish. I do not intend to vote against . the third reading. I hope that the Bill will become law, but I feel confident that” it will not be long before we shall have the pleasure of revising it and getting a larger share of the millions of pounds which . have been put into the banks by those who have made profits out of this disastrous war.
– I have never voted for the third reading of a Bill so reluctantlv as I am going to vote for the third reading of this Bill. In my second-reading speech I said that this measure was absolutely different from practically every speech which was made by almost every candidate who spoke about the necessity for a war-profits tax “to be imposed at the present time. The Bill is, I repeat, virtually a negation of the promises made by the candidates for both parties at the last election.
– Nothing of the kind. It is in accordance with the speech of the Prime Minister.
– It is not jn accordance with the speeches made by practically all the leaders of both parties. At the same time it will, I suppose, gather in a small modicum of the profits which we on this side say have been . unfairly squeezed out of the people in a time of national stress.- Imperfect though the measure is, those of us who feel that we have been absolutely fooled - fooled because we were told that no matter which party was returned, there would be a fair War-profits Tax Bill - we must vote for the third reading, because it will get a little portion of the profits, and it will be a very small portion indeed . The debate took place to-day upon the amendment to add to the already too long list of exemptions
– Which you wanted to extend.
– Yes, because not only I,, but those who- spoke in support of the amendment, were able to show that if there was to be any exemption from the tax the one we were asking for was more justifiable than almost any of the others.Of course, we were defeated. But the result of the division showed that we were quite justified in asking, even at the eleventh hour, for a recommittal of the Bill with a view to get that exemption added to the already long list. We only had to use one argument, and that was that if gold is to be exempt from the tax tin should also be exempted. I would like to vote against the third reading, because the Bill is not what we all supposed we would get from this or any other Government which might be returned to power. But because of a sort of hope - it may be an illusion - that we shall get something out of the tax, and because we know that we do require money for carrying on the war, a number of us will, I am sure, vote very reluctantly for- the third reading, and, like some honorable senators, give it a final blessing at this stage. Although this debate is a departure from the custom of the Senate, it is justified by the unprecedented character of the Bill itself,, and by the well-known fact that its sponsor here made it clear to every honorable senator in his1 second-reading speech that he himself did not believe in the Bill. . He made it clear that he hardly understood what was in the measure - how it would affect various, interests which it was” designed to affect - just as did practically every honorable member in the other House. This side can wash its hand’s of the measure, and the other side will have to carry the responsibility. There have been some very good attempts made from that side to improve the Bill, but, unfortunately, the Government with their majority were able to defeat them; but more regrettable- than anything else, in my opinion, was the fact that the final amendment moved to-day was defeated, and only defeated by the majority of one. The Bill will go out of this chamber as one of the most inequitable measures of taxation which ever have been sent forward to the statute-book.
– Senator OKeefe is at least consistent in one- thing, and that is in a determination to place himself at all times in a. position to be able- to say “ Yes “ and “ No “ in one breath. I rose for one thing only, and that is to flatly contradict the statement made by the honorable senator that when I introduced this Bill I said or did anything to indicate that I was not a. believer1 in it.
– I said that your speech was the weakest you have ever delivered in introducing a Bill, and I say so/ now.
– I admit at once that X am not able to- speak with that happy confidence which marks Senator O’Keefe, and which is not infrequently associated with a very shallow knowledge of the subject on which he- speaks. So far as the principle of the Bill is concerned, I am an absolute believer- in its equity - the. right to which both parties in the recent politcal contest subscribed - the right to collect a contribution towards the cost of the war from those who- in war-time had made more than in the pre-war years. I am an absolute believer in that principle, and neither Senator O’Keefe nor any one else is entitled to impute to me any want of faith in that regard. That the ‘ measure has anomalies I have frankly admitted.. I say that we can find anomalies in almost any taxation measure to which one can point. During the debate there has- been some evidence of a conflict of opinion between honorable senators and myself. But never was there a sharper conflict than is manifested now, and that is that while I am anxious to get rid of the Bill, a large number of honorable senators are. evidently reluctant to let it go.
Question resolved in the affirmative.
Bill read a third time.
.- I move-
That this Bill be now read a second time.
I need not detain the Senate but a very few moments in introducing this measure. It appropriates £1,862,000 for the purpose of. carrying out certain public works. I propose to give one or two statements regarding the figures, and to leave to the Committee stage any discussion regarding the items set out in the schedule. In the Budget statement recently placed before the other House it was shown that the Government contemplated an expenditure of £2,649,000 on public works out of Loan Account. To that amount has been added £200,000 for a suspense account in connexion with certain railway stores, consequent upon the completion of the Western Australian railway. That would make a total of £2,849,000, but the Bill appropriates only £1,862,000, the difference being covered by previous appropriations, that is, amounts the expenditure of which has been previously passed by Parliament, but which so far have not been expended. The £987,000 previously appropriated but not so far expended is embraced in the following works: - Kalgoorlie to Port Augusta railway, £622,000; Pine Creek to Katherine’ River railway, £20,000 ; construction of conduits for laying wires underground, £167,000; £78 for the purchase of land in the Federal Territory; £3,000 in connexion with post and telegraph offices; and £100,000 in connexion with the London offices. The only matter which perhaps needs a little explanation at this stage is the item of ( £200,000 for a suspense account, ph. connexion with the construction of the Kalgoorlie to Port Augusta railway, a considerable amount of plant was purchased. It is not deemed, fair that the whole cost of that plant, the value of which is largely unexhausted, should be charged against the cost of that ‘railway. The plant is available for other works, and, therefore, this amount has been carried to a suspense account. When the plant is utilized in connexion with another work, it will be debited against that work, and if used upon further works, a similar procedure will be adopted. Each work will be charged with the proportion of the value of the plant exhausted in its construction. I submit the Bill with the assurance that; any details required by honorable senators with reference to the items set out in the schedule will be supplied in ‘Committee.
– II have no desire to take up very much .time on the second reading of this Bill. Many of the items in the schedule can, perhaps, be best referred to in Committee. I should like to say, as bearing, upon the vote for the railway in the Northern Territory, .that I remember that Senator Newland, after visiting the Territory, gave the Senate a rather interesting description of the type of men employed on that railway. I was wondering whether the honorable senator’s remarks have borne any fruit, and whether an effort has been made tb secure labour for the” construction of that line which would be more desirable in the interests of the Commonwealth. I remember Senator Newland’s references to men who live on lizards, and whose practice it is to save up every copper they can, not in order that they may become permanent settlers of the Northern Territory, but in order that they may get out of the country. I refer specially to this matter, because I believe that, in connexion with the carrying out of public works in the Northern Territory, some effort should be made to secure that those engaged upon such .works shall become permanent settlers there, and also that they shall be persons whose permanent settlement in the Territory would be advantageous to the Commonwealth.
I notice a vote of £100,000 for the London Offices. This seems a large amount to spend at’ this time, and I should like to learn whether it is required as a final payment for the work. When so lange a vote as £100,000 is submitted at this stage for the London Offices, one is led to suspect that one of the bombs which have recently been falling in its vicinity may have rendered repairs necessary. If the money is required for work that has already been carried OUt, it must be voted; but I have directed attention to the item at this stage, in order that some information may be given about it in Committee.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 3 agreed to.
– I should like to get some information, with regard to the vote of £34,000 for an acetate of lime factory. I should like also to know what is being done in connexion with the conservation of the waters of the River Murray, for which a vote of £90,000 appears in the schedule.
It is expected that the work in connexion with the River Murray will lead to the employment, and settlement of a number of returned soldiers, but, so far, I understand that very little of a practical nature has been done. I take it that we have now under consideration the part of the schedule setting out works under the control of the Department of Works and Railways.
– The schedule, as a whole, is before the Committee.
– I think it would be better if it were considered in sections, and we should first consider the section under the control of the Department of Works and Railways.
– Senator Grant has asked for some information upon the vote for the acetate of lime factory.
– Let us know where we are. Are we discussing one Department at a time?
– The usual practice is that the whole schedule should be considered open to discussion. The fact that an honorable senator asks for information respecting an item at the end of the schedule does not prevent another asking for information about an earlier item unless a request affecting a later item has been moved.
I may inform Senator Grant- that the British Government asked the Commonwealth Government to endeavour to make the Commonwealth self-contained in the matter of 1 the supply of acetone, a substance used in the manufacture of cordite. We have hitherto obtained our supplies from outside Australia. In the endeavour to comply with the request of the Imperial Government, it was decided to establish a plant for the manufacture- of acetate of lime, which is the first step to be taken in the manufacture of acetone. The product is made from molasses and lime, and a plant has been erected on the Brisbane River. A satisfactory arrangement has been made for the supply of molasses, at a reasonable figure, over a period of ‘ten years. The land for the factory has been acquired on the Brisbane River under an arrangement with the Queensland Government, and buildings and plant are now being erected. The votes asked for under this Bill are £34,000 for the installation of the plant, and £20,000 for the purchase of machinery. The total cost of the factory is estimated at £80,000. It is believed that when the factory is completed, . the Commonwealth will be not only self-contained in the matter of the supply of this very necessary substance for the manufacture of cordite, but we shall be able to produce it at about one-half the price we are now paying for the imported article. The factory is well on the »way towards completion. It was taken in hand as a war measure by the last Government, in the hope that, should the war unfortunately continue, the factory would be in operation before the end of this year, and we should then be able to supply, not only our own requirements of the article referred to, but probably some measure of the requirements of the British Government also.
With respect to works in connexion with the conservation of the Murray waters, the estimated expenditure for 1917-18 is £419,972. Honorable senators are aware that New South Wales, Victoria, and South Australia are associated with the Commonwealth in a joint Commission controlling these works, and the Commonwealth share of the expenditure proposed is £90,000. Certain preliminary work has been done, with a view to utilizing, to the fullest extent, the waters of the Murray. Surveys have been made and plans prepared, and all neces^ sary preliminary work is being carried out.
– Nothing but preliminary work i
– One of the locks in a reach of the river in South Australia has been commenced. Generally, the intention of the Government is not to proceed with the main works at the present juncture, but to have all preliminary work necessary completed, so that on the return of our soldiers to Australia employment may be found for a considerable number of them. If the necessary preliminary . work were not done now we could not employ any large number of returned soldiers. The desire of the Government is, therefore, to do as much as possible of the preliminary work so that if the money is available later this very useful and reproductive work may be put in band and afford employment for large numbers of men who will be returning to Australia.
– Can the Minister isay who are the members of the Murray Waters Commission?
– I cannot give the “names of the State representatives, but Mr. Watt, the Minister for Works and Railways, is Chairman i of the Commission, and the Commonwealth representative on it.
– I was present at the laying of the foundation stone of one of the locks in South Australia eighteen months ago. Has nothing further been done?
– That work has been gone on with.
. - I should like to have some information about the item - “ General Arsenal, towards cost, £100,000, for works and buildings, including the erection of residential quarters.” I desire to know where the Arsenal is to be, and on what it is proposed to expend this money.
I notice that, in connexion with this measure, nearly £1,000,000 of the amount covered by the schedule is required for the . Defence Department. Under the head of the Department of the Navy there is a vote of £100,000 down for Cockatoo Island Dockyard, for machinery and plant, yard and floating plant, and for the construction of the Fleet a vote of £400,000. I have a word or two to say about these items. Is it possible for the Minister for Defence to give the Committee any information concerning the completed cost of the cruiser Brisbane, which was put together at Cockatoo Island ? What is the comparison between the completed cost of the cruiser Brisbane, and the Sydney and Melbourne built in Great Britain. I ask this question because if the man in the street is to be believed, and if the rumours in the newspapers during the last few years have any foundation, the Brisbane cost nearly £1,000,000 to put together.
– Did you say to be “ put together “ or “ built “ ?
– I said it is rumoured the Brisbane cost nearly £1,000,000 to put together, as compared with an approximate cost of £350,000 for the building of the Sydney and the Mel bourne. If this is so, the country ought to be enlightened on the subject, because we cannot go on at that pace in war time.
– Oh, yes; we can, quite easily.
– Well, we cannot go on at this pace unless we impose a land tax of , 1s. in the £1. I should like some information, now that these items are before the Committee, concerning what has been going on at Cockatoo Island during the last three or four years. I am much concerned about the great need for economy, because we have not seen the worst in Australia yet, and while I am perfectly willing,, as a loyal member of this party, to leave a gooddeal in the hands of the Ministry, the time is now, when votes for Works are being discussed, to utter what is in one’s mind with regard to national efficiency. If we are to continue the policy of building our own ships with our own money - and, I hope, in the not far distant future, with our own iron - : we should have some information as to the cost compared with that of war vessels purchased in Great Britain.
– When the Minister replies to Senator Pratten, I hope he will give’ some definite information not only with regard to the cruiser Brisbane, but also concerning the manufacture of small arms at Lithgow. It may be said that before the war we could have purchased rifles from Belgium, Great Britain, or the United States of America for 50 per cent, less than they cost at Lithgow; but, as a matter of fact, after the war broke out we could not buy rifles at all. Now, I point out that the cruiser Brisbane was the first war vessel built at Cockatoo Island.
– And it looks as if it will be the last.
– I remind honorable senators also that we could not have purchased a vessel of that type at any price either from the United States of America or Great Britain, and the Minister for Defence (Senator Pearce) ought to make this perfectly clear.
– I think the honorable senator is under a misapprehension about the cruiser.
– The Minister for Defence stated in this Chamber only a few days ago, that when war broke out the British Government placed an order for small arms in the United States of
America, but could not get delivery of one rifle for eighteen months. It is quite true that the Brisbane cost a great deal more than the Sydney or Melbourne, but I point out that when the manufacture of locomotives was undertaken at Eveleigh they cost a good deal more than the price at which they could have been obtained from Beyers, Peacock, and Company; but as the men became accustomed to the work, the manufacturing cost came down, and now the Government of New South Wales would not even consider a proposition to order locomotives from abroad, all this work being undertaken at the Eveleigh and Clyde workshops. In view of these facts, it does not matter if the cruiser Brisbane did cost 50 per cent, or 100 per cent, more than the Sydney or the Melbourne.-
– What about 3,00 per cent, increased price?
– Even if it cost 300 per cent, more than the other cruisers the money is still in the country. That important fact ought not to be overlooked. In preliminary work of this kind, we must be prepared to face increased costs.
I should like to know also from the Minister what is the position with regard to the construction of the cruiser Adelaide at) Cockatoo Island dock. I understand that the preliminary work was entered upon many months ago, but the latest reports have not been very encouraging.
– I suppose it was declared black.
– I am not aware of anything of that kind having taken place, but I think there has been a delay because of the inability of the Government to secure the necessary material from abroad, though this trouble may be remedied to some extent now that ironworks have been established at Newcastle. I am not very particular as to the price of the vessel. Even if ib will cost 50 per cent, more than those obtained from Great Britain, that fact should not, in the least degree, deter us from building our” own warships, because in preliminary work of this nature a cruiser is certain to cost a great deal more than vessels built in Great Britain. I know what is behind the question raised by Senator Pratten, although perhaps it is not in the honorable senator’s mind. The idea behind the suggestion is that the pace adopted by the management and the workmen is-‘ not satisfactory to members of the National party ; but I repeat that the main reason for the extra cost in building cruisers in Australia is the fact that it is a departure as “far as Australia is concerned. The policy is well worth the added cost, and I have no doubt that, in the future, the price will be reduced until this work will prove just as satisfactory from every point of view as is the manufacture of locomotives, at the different Government workshops throughout Australia.
I should like also to obtain from the Minister for Defence some information concerning the residential quarters at Canberra, and I urge upon him the need for expending a very substantial sum of money in providing decent housing accommodation for ‘the workmen to be employed at the Tuggeranong Arsenal site. The quarters for the officers are all that could be desired, the house occupied by Colonel Miller being just “ O.K “ in every respect. I hope, therefore, tha* the men who will be called upon to do the manual work at Canberra will not be overlooked, and obliged to build thenown houses without any security of employment. Some time ago, I understand, Mr. Griffin prepared plans for workmen’s dwellings in the residential area, and these were to be available, under certain conditions, for inspection, but, so far, I have not seen them. It is highly desirable that the men employed at the Capital site should have substantial and decent housing accommodation.
– In reply to Senator Pratten, I may. say that the vote of £400,000 is to meet liabilities to 30th June, 1917, for the cost of materials on order for the cruiser Adelaide, and balance of cost of other vessels of the fleet unit now completed, totalling £380,000. The figures relating to the cost of the Brisbane have not yet been finalized. The imported material has not yet been fully paid for, owing to the fact that the Admiralty authorities have not forwarded final accounts.
– What, is the approximate cost?
– I cannot give it for that reason.
– How much has been spent so far?
– I cannot say exactly. The vote of £400,000 only included payment for portion of the material used m the cruiser, and we are not in a position to say what the exact cost has been, but I do know, from evidence that came before me, that the vessel cost very much more than either of the other two cruisers. But that was not a matter for very great surprise, in view of the fact that it was the first vessel of its size and kind built in Australia. We had not even been building merchantmen of that size, and those who know anything about naval architecture, will realize that it is much more” difficult to build a cruiser than to build a merchantman. We have had to pay for our experience, but’ I am not going to say that, given fair treatment, the ship could not have been built more cheaply. I have every reason to believe that, in some respects, the labour .was much more costly than lc ought to have been. I am compelled te say this, because we Have had proof in the cost per unit in rivetting as compared with the cost of the same class of work done in the British dockyards, and even allowing for the difference of wages here of 100 per cent, the cost of the Brisbane was still much higher than is explained by the. higher rate of wages paid in Australia, because they had done similar work on other classes of vessels. I regret that as much as anybody, because I think I can say, without any egotism, that I have always been one of the foremost advocates of the building of these ships in Australia.
– That reflection on the workmen is scarcely justifiable, seeing that the management itself was to blame for a portion of that cost.
– That is not so. I have demonstrated my faith in this matter by deeds, because I can fairly claim to have had the honour of bringing before the Fisher Cabinet the proposal to order the first three destroyers, the first units of the Australian Fleet. I do not say. that in any spirit of boastfulness ; I merely mention it to show that I am in earnest in my desire that Australia should build her own ships. I regret all the more, therefore, that there were certain unsatisfactory features, as regards labour. in connexion with the building of the Brisbane, that it would be well, in the interests of labour itself, to remove. We would be foolish to shut our eyes to the fact. Our duty is to see if the fault cannot bie rectified. T firmly believe that the Labour unions themselves now recognise that such was the case, and have shown it in the reception they have given to the Government’s proposals for mercantile shipbuilding. From the cordial spirit in which they met the Government at the conferences, and the acceptance by most of the unions concerned of certain proposals pui/ forward by the Government, >it appears certain that they have recognised that if shipbuilding in Australia is to succeed there must be some changes in the labour system adopted in these ship-yards. The material for the other cruiser has been ordered, but unfortunately, “ owing to this disastrous strike, the- dockyard .has been for some time idle. I understand that arrangements are being made for a resumption of work, and the Minister for the Navy (Mr. Joseph Cook) intends, when that resumption takes place, to have a more satisfactory condition of affairs than there has been in the past. Every one who wants to see Australia self-sufficient in this regard must wish that from the bottom of his heart.. We say that the workmen in our establishments should have the very best of conditions, but we say, also, that they should render the best of service in return.
The position taken up by the Government in regard to the Arsenal is this : Although we are in the midst of this great war, there are still some people so shortsighted and foolish as to be unable to learn its lessons. They still bring forward the old cries of “Put it off,” “Let it wait,” “ After this arsenals will not be required.” The same catch-cries as were used in Great Britain to keep back any proposal to make Britain prepared are used in Australia whenever any proposal is put forward to make us self-sufficient. The Government recognise that we are not safe unless we are in a position to manufacture for our Army the weapons with which it will have to fight. Certain things have been shown in this war to be indispensable to modern armies. They are machine guns, high explosive and shrapnel shells, and all their constituents. We can to-day make our own rifles. Senator- Pratten said they had been costing a great deal. They have been costing far too much. ‘ I defended the excessive cost in the early stages of the Small Arms Factory, but now the Factory has reached normal conditions, the cost ought go approximate much more closely to the cost overseas than it does. I believe a better spirit is coming over the workmen in the Factory; a certain feeling of hostility that did exist is dying out, and they are showing a more general recognition of the part they have to play. I must say, in justice to them, that, with the exception of some little temporary ebullitions, they have rendered very loyal service throughout this war. It would be idle to say that they have been perfect, or that there have been no exhibitions of temper and impatience on their part -in some directions; but when one thinks of the conditions under which they have to live, and the fact that they have been asked to work long hours and continuously, they have rendered very loyal service. I recognise this, and recognise, at the same time, that it is possible for these men to assist the Government still more to bring about a better result from the Factory. We are in negotiation with the unions in the Factory to bring about that end, and I am encouraged by the spirit in which they have recently approached us to believe that they are disposed to come to a better understanding, so that we may achieve better results. The Factory is turning out a rifle which is as good as can be got anywhere in the world. Although there was a criticism of the rifle turned out earlier, it is only fair to the Factory to say that the whole of the Australian troops throughout the Gallipoli campaign fought with it, and there were, no complaints from any responsible officer who went overseas with the Forces about its quality.
With regard to the Arsenal, the Government desire the consent of Parliament to the expenditure of as much money as will enable us to take in hand the preliminary work. When the Bill is passed, the Government intend, during the short adjournment, to take the question of the site into consideration - that matter was considered by the previous Government - and come to a decision, and then when Parliament re-assembles, to inform it of their decision, so that Parliament may approve of it, and the work may be put in hand immediately.
– Meanwhile no money will be expended?
– Money will be expended on certain works now going on, in the preparation of certain plans and specifications, and the placing of contracts for certain plant which it will take a considerable time to provide and deliver. That work will go on, because the Government are determined to proceed with the Arsenal. Wherever the site is, that plant and those plans and specifications will be wanted, so that expenditure is necessary, no matter where the site may be.
– But you will expend no money on the site?
– Not until that determination has been arrived at.
– Will you explain the vote for residential quarters ?
– Wherever the Arsenal is placed, the experience of the Munitions Ministry in Great Britain leads one to believe that it will almost certainly be at a considerable distance from the sea. The experience of air raids and raids from the sea make that a sine qua non. This will mean that almost certainly we shall have to build a township near the Arsenal in which the artisans and labourers will live. The vote for residential quarters mentioned by Senator Grant is intended for the purpose of building homes for those who will work in the Arsenal.
– Do you intend to build them now?
– Not until the site is fixed. The building of the homes will proceed concurrently with the building of the factories, so that as soon as the factories are ready, the homes will be ready for the workers to go into.
– Is it not intended to provide homes for the workers constructing the buildings?
– Certainly not permanent homes, because those workers will be employed only for a few months, or at the most for a year or two; but I take it that the Works and Railways Department will provide suitable temporary homes for them. . I agree with Senator Grant that where work of that kind is going on, huts of a character suitable for human habitation should be put up ; but, of course, we could not put up permanent brick homes.
– Why not ?
– Because they would have to be pulled down.
– You could, allow the construction workers to live in them until the permanent workers came along.
– The Arsenal, when completed, will probably employ from 3,000 to 5,000 people, which will mean a town of from probably 10,000 to 15,000 inhabitants. That will take some planning, road-making, sewerage construction, and so on, all of which could not be done in the space of time required to erect the Arsenal.
– How was it you could erect the officers’ quarters at Duntroon?
– The officers’ quarters at Duntroon, to which the honorable senator refers, are part of a plan laid out years ago. The Military College was begun in 1911, and some of the buildings are not erected yet. The honorable senator will see that whatever accommodation is to be provided for the workmen erecting the factories must be temporary, so as not to interfere with the planning of the town site connected with the Arsenal proper
The Government have taken the following action with regard to the Arsenal itself : We naturally looked to the British Government to supply . us with advice as to the kind of Arsenal, how we should proceed, and what it should be capable of doing; but they told us frankly that they could not send any of their responsible experts here during the war. They advised the previous Government that, instead of their sending experts to us, we should sand experts to them, or to India, where all the branches of arsenal work are already established. We picked a - commission of capable men and sent them to India, where the Government gave them- every opportunity to visit workshops, obtain full information, and inspect secret plans. On their return they submitted a report showing what the Arsenal should be capable of, and how it should be planned and laid out. Then the Government, recognising the advantage of continuity of policy, saw that the right thing to do was to select the man who was afterwards to manage the Arsenal, so that be could be consulted on every point as to the lay-out, workshops, plant, connexions with railways, and so on. The late Government, therefore, appointed Mr. Leigh ton, then manager of the Cordite Factory, as manager of the Arsenal. I am pleased to be able to say that we have had one of the best testimonies to Mr. Leighton’s. capacity, of a practical character, that could be procured. He was sent by the late Government to Great Britain in order to get up-to-date in the various items connected with the manufacture of explosives. He had not been there very long before the Imperial Government asked that he should be retained in Great Britain for the period of the war. We acceded to this request, and Mr. Leighton has since been given charge of most responsible work. He has erected several important munition factories in Great Britain. He has, from time to time, been supplied with assistants, whose, services have been requisitioned by the British Government. He has with him to-day Professors Barraclough and Gibson, who have (placed their services ait the disposal of the Commonwealth for the period of the war.
– Without salary.
– I am not sure whether they receive a salary from the Ministry for Munitions or not.
– Are they here or “in England?
– In England. Then there is the manager of the Small Arms Factory, Who is engaged in laying down factories for the British Government, Mr. Marcus Bell, and the gunnery and munition specialist in the person of Major Gibbs. All the plans and reports which have been drawn up in connexion with the Arsenal have been sent to England, and the British Government have been requested to allow Mr. Leighton to submit those plans and reports to the highest experts there. These experts- are naturally most up-to-date, seeing that they have been engaged in the erection of the most extensive munition factories the world has ever seen. Those plans and reports have, . therefore, to run the gauntlet of the criticism and suggestions of these experts. From time to time these reports and plans, with the criticism and suggestions of which I have spoken, are returned to us. In that way the Government believe they are subjecting this proposal - which is a big one - to a thorough analysis, so that when the work is commenced we shall be satisfied that we have obtained the best advice that is procurable on the subject. Upon the question of site I do not propose to say anything, as it is now sub judice. I only hope that when this Parliament re-assembles in November the proposal for the erection of an Arsenal will be determined. That is the present position of this Arsenal question.
– The Minister cannot tellus what amount has been spent on the Brisbane so far?
– ‘I cannot. Since the honorable senator asked me the question I have made inquiries on the telephone, and have been assured that -the officials cannot tell me the amount expended upon that vessel.
– l am quite sure that when Senator Pratten put before the Senate the exorbitant cost of the cruiser Brisbane he thought that he knew what he was talking about. Generally he does know what he is talking about. But I would remind him that if he desires to institute any comparison between the relative values of the work done in this country and that which is done elsewhere, there is a better way of doing it than by . springing the matter suddenly on this Committee. If the honorable senator’s object this afternoon was to show that the cost of constructing the Brisbane was enormously high, owing chiefly to the men employed upon the vessel shirking their duties, he signally failed to achieve it. I know something of the conditions of employment that obtain on Cockatoo Island. I well remember discussing this matter with a foreman there, who had grown grey in the business of shipbuilding, and who did not hesitate to declare that the cost of building ships on the Island would certainly be very high on account of the inefficient management which obtained. He informed me that right in the middle of an operation, which was- dangerous if not properly supervised, a clerk had handed him a written document demanding from him a written reply as to what he was doing and how he was going to do it. Now, an efficient manager would have known what he was doing. I believe the statements of that man, who also affirmed that there were hundreds of clerks there who were unnecessary. I am glad to say that I have never used my position in this Parliament to attack the management of the Cockatoo Island Dockyard, but I maintain that any attempt to make it appear that the cost of constructing the cruiser Brisbane was exorbitant, on account of the shirking methods of the men, is grossly unfair. The Minister, in his reply, followed upon similar lines to those adopted by Senator Pratten.’ I have never yet- sided with men who will not do a fair day’s work for a fair day’s pay. Neither do the unionists of Australia. But the section which is represented by Senator Pratten, the money-holding section of the community, who engineered LieutenantColonel Gould out of this Chamber and Senator Pratten into it–
– I received more votes than did the honorable senator.
– That is because I was not opposed to Senator Pratten. The honorable senator says that he received more votes than I did. On the next occasion that I speak in this chamber I will produce the figures, and will show whether he received more votes than I did. If he had done so, he would have been here four years ago.
– Order !
– -It ‘ is always the same thing. Whenever any honorable senator interjects while I am speaking he is not called to order, but when I reply to the interjection, I am. I wish to tell you, sir - as I have told the President - that when an interjection is made affecting me, I shall insist upon replying to it.
Senator Pratten has contended that the construction of the cruiser Brisbane cost an enormous sum of money. The Minister’s reply shows that it cost more than would the construction, of a similar vessel in England. But when thehonorable gentleman was pressed as to whether the cost was double that of a similar vessel in Great Britain, he promptly answered “No.”
– We shall see.
– The honorable senator has been given what he lives on - an answer to the effect that day labour is costly, and that the building of warships must be made the prerogative of private enterprise. But the public will never permit of the making of guns or the building of warships being committed to the hands of private individuals. Further, the great emergency which arose in England consequent upon the outbreak of war convincingly demonstrated that private enterprise was absolutely incapable of meeting it. Infinitely greater organization was required to do that. I presume that the argument of Senator Pratten is that if it costs more to build. a warship here than it would cost in Great Britain, we ought not to build it. The/ same line of reasoning might well be applied to the manufacture of rifles. To produce rifles with which to arm our Forces, the Government some years ago, with far-seeing statesmanship, established a Small Arms Factory at Lithgow. Let us suppose that that Factory is capable of turning out 100 rifles per day. Is it fair to institute a comparison between that establishment and a similar factory in America which is capable of manufacturing 1,000 rifles per day? Ought a rifle to be produced by a small factory, equipped with a small plant, as cheaply as by a large factory equipped with a large plant? The thing is absolutely absurd. The same remark is applicable to shipbuilding. Great Britain is easily first in the building of cruisers. Is it reasonable to suppose that the very first vessel of this character that we undertake to construct ought to be built just as cheaply as it could be built in Great Britain ? Even if the Brisbane did cost a little more to build in Australia, we must set against that extra expenditure the experience that has been gained by our workmen. We must also remember that in connexion with that undertaking the Government embarked upon a very dangerous experiment - that of installing a British manager to control Australian workmen. I believe that an Australian manager would have got double the work out of the men. But, apparently, the idea is deep-rooted amongst some honorable senators that, no matter what may be the experience of the capacity of the Australian workman, he must go abroad in order to achieve a reputation. This particular vessel, about which a new senator who got a few votes at the last election to help the Government to win the war-
– He is thinking about the silver bullet, too.
– He is always thinking about that, and he is always thinking about the people who have made it their particular business in life to have a surplus supply of those bullets. I venture to say that the bullet fired by the honorable senator to-day was manufactured in the Chambers of Commerce and Manufactures, which he so fitly represents.
I have no desire to prolong this debate; but when Senator Pratten demands de.tails of the cost of constructing a vessel which has already more than earned that cost, even if it were three times as much, it is time that he was given an effective reply. The cruiser Brisbane is playing, her part either in protecting our coasts or in assisting to protect the coasts of Great Britain. Then why complain of the cost of her construction ? Why hold it up to ridicule? I say that a vessel which is engaged in protecting our commerce at. the present time should be credited with earning equally as much as are the vessels which are engaged in carrying that commerce. Therefore, we should be united enough not to quibble about the cost of her construction. We should rather pride ourselves on the fact that, thanks to a Labour Government and a Labour Minister for Defence - as Senator Pearce undoubtedly was when he brought forward the proposal to build the Brisbane in Australia - we have to-day an Australian Fleet. Our warships not only protected the seagirt cities of Australia in the early stages of the war, but are doing remarkably well in protecting the shores of Great Britain itself. I am proud that it was a Labour Ministry that originated the idea of Australianbuilt ships to protect Australia.
– I am surprised at the statement made by Senator Pratten regardingthe cost of the Brisbane.
– I made no statement; I asked for information.
– In asking for the information there was a certain amount of assertion by the honorable senator in connexion with the cost of constructing the Brisbane.
– I made reference to statements which have been publicly made from time to time.
– I indorse all that was said by Senator Gardiner. It is a pity that any honorable senator should cry “ stinking fish,” or even pay heed to the rumours in connexion with the construction of our vessels. A few years ago Australia launched out on the enterprise of building vessels, and the first effort wasthe construction of warships. I asked Senator Pratten if the parts were assembled, or if they were moulded in the dockyard of New South Wales. I am not sure yet whether the parts were brought out from the Old Country or were moulded here.
– Only the raw material for the Brisbane was brought out.
– Do I understand that the frames, the plates, the decks) and the bulkheads were moulded here?
– That is information I wanted to get. I venture to say that, in comparison with the cost in the Old Country, where war vessels are built, the construction of the Brisbane was cheap.
– Do you know the cost of it?
– I asked the Minister what the cost was, and he does not know. But, even if the Brisbane cost twice as much as a ship of a similar type built on the River Clyde or the River “Wear, or in any of the London dockyards, it would be absolutely cheap to Australia.
Senator Pratten also asked the Minister, when he was replying, to state if the Brisbane cost twice as much as the other two combined. In the Old World I had some experience in the construction of mercantile and war vessels. Very often the cost of the first ship cheapens the construction of other ships. That is to say, in constructing the first vessel of a particular type experience is gained, and when the keel of a similar vessel is laid the cost of the. latter is about a third less. Here we started to build the Brisbane. For the first time we attempted to build a warship, .and if the cost was something larger than it ought to have .been, I venture to say that, as the result of the experience gained by the management and the workmen, other vessels of a similar type would be constructed much more cheaply.
The Minister for Defence (Senator Pearce) expressed the opinion that the workmen were to blame for the increased cost of the Brisbane. That might be so. Possibly the workmen did demand conditions of employment and wages which might have added to the bill. But I remind the honorable senator that there was another cause, and that is the cost of the management. I remind him, too, of a debate which took place here on the cost of the launch of the Brisbane.
That was not the fault of the riveter, or the plater, or the carpenter, but it was the fault of the management; in fact, I might say that it was the fault of the Government in connexion with the selection of the launching site.
– Hear, hear ! New South Wales is not a fit place for shipbuilding.
– There are many places in Australia, New South Wales included, which could build ships. Senator McDougall will bear out this statement that there was no necessity for the construction of certain work in order to launch .the Brisbane safely.
– At a cost of ?16,000.
– That ,was not the fault of the workmen.
– It was the fault of the harbor.
– This afternoon the Minister for Defence laid the blame for the heavy cost practically on the workmen engaged in the construction of the Brisbane. I admit that perhaps they did do or demand certain things which might have increased the cost; but I remind the Minister that the management was responsible for the very much increased cost in connexion with the launching of the vessel.
– You are quite mistaken in the idea that unnecessary expenditure was incurred in that regard.
– There are honorable senators here who will probably say that Senator Grant is incorrect in his assertion.
– Then they will not know what they are talking about.
– I think that the honorable senator has much more knowledge of the single tax than he has of shipbuilding. I should like Australia to become a shipbuilding country. We have the raw material in the earth; we have the men to extract and treat the ore; we have the artisans in any branch of shipbuilding ; we have skilled men to construct any ship, from the size of a yacht to that of a dreadnought. Therefore, it illbecomes any honorable senator to cry “ stinking fish “ as to any industry, particularly that of shipbuilding. As Senator Gardiner has ably pointed out, even if the Brisbane cost more than it should have done,- it has fully repaid the additional cost in connexion with the struggle in which we are involved. We all know that our Sydney captured the Emden at Cocos Island.
I am not surprised that Senator Pratten and the gentlemen who are asociated with him should make these remarks, because, prior to his election to the Senate, he was, and I believe is still, associated with a party which considered it absolutely criminal for Australia to have its own Fleet.
– Oh, no.
– To have its own Defence Force.
– Oh, no.
– To have any preparation for a’ time of war.
– Oh, no.
- -II the honorable senator was not associated with that party, I forgive him; but I think he was, I believe that he has been associated with the party which, right along the line, objected even to the construction of the Brisbane, whatever it cost; which objected to the establishment of a Fleet to protect our shores, and which would rather see the Commonwealth pay a subsidy to the Imperial Government, than build a Fleet to protect its own shores and, in time of Imperial danger, to help the British Government to protect the Empire. Senator Pratten can deny that if he likes.
– He is going to.
– I will accept the honorable senator’s denial; but I am quite sure that, at some period of his. political aspirations, he was, and I dare say is to-day, associated with the party which would have damned, and which tried to damn, every effort of the Labour Government that established a Fleet and a Citizen Defence Force.
– In my political simplicity, or shall I say in my unsophisticated way, I asked what I thought a pertinent question regarding the item of £400,000 for a further expenditure out of Loan Account in connexion with the construction of another cruiser for the Australian Fleet unit. In the course of that unsophisticated inquiry I brought up the question of what the cruiser Brisbane cost. I could have added quite pertinently the further inquiry of how long did it take to build her, because, from information which has appeared in the press from time to time during the last three or four years, the public have been led to believe that she took twice as long to build as she ought to have done, and probably cost more than twice as much as was estimated. I asked the question, and the Minister gave the answer that the total cost was not yet ascertained. Arising out of that simple question, upon my devoted head has fallen all the criticism which I have heard to-day from the other side.
– It is not done yet.
– «A.s regards representing only the trading, manufacturing, and industrial class, I wish to tell Senator’ Gardiner here and now that 50,000 more electors voted to send me into this chamber than voted for him.
– The honorable senator is not in order in discussing the general election on this schedule.
– I have noted with a good deal of amusement that in connexion with the building of the Brisbane even honorable senators on the other side are not agreed. Senator Grant has flatly contradicted a statement made by Senator Needham. It is consoling to discover that on this issue there is not unanimity even amongst honorable senators opposite.
Coming back to the main principle involved in the building of the Brisbane, I want to say that at least ten years ago, and from that time up till now, I have most earnestly advocated that Australia should be self-contained and selfsupporting in this matter. I have advocated that Australia should build her own warships in her own dockyards. I am not sure that I was not one of the first of those .who at a very early stage in the history of this question used the words, “I .believe in Australian warships being built in Australian dockyards, by Australian workmen, from our own material, and paid for with our own money.” That is the policy I have consistently advocated, and I am very pleased now to be associated with the present Minister for Defence, who was the first to put this policy into active operation. I advocated this policy at a time when it was not so popular as it is to-day, and when a very large section of the community believed that the best thing for Australia to do was to continue the payment of a subsidy to the British Admiralty for the upkeep of the Australian Auxiliary
Squadron. Iti is because I have advocated the policy to which I have referred that I would not, by reference to the cost of the Brisbane, deprecate and hold that’ policy up to obloquy. I asked my question - and I hope I shall get an answer to it some day - in order that the public of Australia may be convinced that we cannot go on at that rate in war-time, and that labour, as well as everything else, must be efficient. If we want to win the war and to save Australia for Australians in the future, we have to see that we get value for the money we spend. I express no opinion as to whether we got value for the money spent on the Brisbane, but I do say that if we had greater efficiency on the one side and on the other, we should have had that cruiser completed a year or two before she was completed, and she would have been of further use than honorable senators opposite claim for her to-day. I admit that she has been of the greatest assistance, but I do earnestly trust that this idea of evolving our own Fleet in our own dockyards will be given effect to, and also that our experience of the cost in money and cost in time in the construction of the Brisbane will not be repeated in connexion with the construction of the Adelaide. If it is, I can only say that that sort of thing cannot go on, and sooner or later there has to be an end to extravagance, for sooner or later we have to face the aftermath of the war.
I do hope that the Ministry will not hesitate to grasp the nettle of retrenchment, because we shall be faced in the future with a huge annual expenditure. I believe that the Ministry will do so. I hope that these loan Estimates will be scrutinized month after month, and that extravagance, whether at Cockatoo Dock or anywhere else in the Commonwealth, will be put down with a ruthless hand. I repudiate any suggestion by Senator Gardiner that I am not here representing a very large section indeed of the people of New South Wales. I believe that the words I am uttering in my position as a representative of that large section will be indorsed by those who compose it. This is not a time to hesitate to criticise fairly anything that is going on. Honorable senators opposite, after hearing my question, appeared to me to be on the defensive, and to’ be search ing their brains to find some reason or another why the Brisbane cost so much and took so long to construct. I express no opinion on that, but I fervently express the hope that the experience we gained in the construction of the Brisbane will stand us in good stead in the future. I support with all the power I have the continuation of the policy of building our own war-ships from our own material, in our own dockyards; but I trust that such a state of affairs, as between Government and work- “ men, will be brought about as the result of our experience in the construction of the Brisbane, and our troubles due to the war, that the Adelaide and future cruisers to be constructed will be a credit to all concerned.
– I had not the pleasure of listening to Senator Pratten’s first speech on this matter, but I want to say, as an Australian workman, that I refuse to stand here and listen to Australian workmen being slandered by Senator Pratten, or by anybody else. So far as the result of the last election is concerned, the less the honorable senator says about that the better for himself. J had .some experience of the work of ship-builders in England, and as an Australian-bora ship-builder I can say that Australian workmen can give British workmen points in every part of the game. When, with Mr. Hughes, I visited the dockyards of England, though that gentleman looked with wonder upon the work being done, I was able to tell him that some of it would not be allowed in an Australian dockyard. Mr. Hughes did not understand the business any more than does Senator Pratten. Tears ago, I stood on a soapbox at the corner of the streets of Sydney, and advocated the building of locomotives in Australia. We had prattlers then who raised the ‘same objection, and contended that ‘Australian workmen could not compete with their British compeers. After great persuasion we induced the New South Wales Government to undertake the building of locomotives, and though the first built may have cost more than those imported, we import none to-day. Every one that is used is made in Australia, and we can do the same thing in connexion with the building of ships. When I was seven years of age, a gunboat was launched at Pyrmont, for use in the New Zealand war. I have read paragraphs in the papers to-day making admiring references to the fact that in the Old Country plates are being placed on the side of a vessel without a template being used, but I can inform honorable senators that Australian workmen performed that feat years ago at the Cockatoo Island dock. Some people in the earlier days, like some we have amongst us to-day, could see no good in an Australian workman, and desired that we should import men from other places. I say nothing against the workmen of other countries, but they do not understand Australian conditions.
I have no objection to the building of ships by private enterprise, and in answer to Senator Guthrie let me say that I do not care where they are built so long as they are built in Australia. If the Sydney Dockyards are not good enough, let them be built somewhere else. I am an Australian, and not a miserable partisan representative who seeks on every occasion to set State against State. Australia is always a subject of ridicule in the Old Country because of this provincial spirit. At the Franco-British Exhibition, when strangers visited the Victorian court, they were told that there was nothing good in New South Wales and vice versâ. To-day we have Commonwealth Offices established in London, and the representatives of the States refuse to make use of them. . They have their separate offices all over London. I desire that this State prejudice should be broken down, and that we should be all for Australia.
I say that what we did in connexion with the construction of locomotives we can do with the building of ships if we are given a trial. The man we imported from the Old Country to manage the Cockatoo Island Dockyard compared as the earth does to the sun with the man who was there before him. The Australian workmen, managers, and owners of factories are as up-to-date as are their fellows in any part of the world. The Brisbane did cost us more than she might have cost constructed elsewhere, and she should have cost us more._ Do honorable senators desire that our workmen should be placed in the same position as the un- fortunate British workmen ? In Australia we want to progress with the times. Our beautiful Australian climate clears the brains and stiffens the muscles and produces men who are prepared to stand up for their rights. I shall not listen to a word’ said against the capacity of Australian workmen. I say that if the Australian manager originally in charge there had been left as manager of the Cockatoo Island Dock, the Brisbane would have been launched and in commission two years earlier than she was. I have nothing to say to the man who took his place, but he had to gain Australian experience, and that accounted in some measure for the delay in the construction of the Brisbane. The high cost of the vessel is due, to some extent, to the fact that our workmen were not used to that class of shipbuilding. We had to gain experience, but I am in a position to tell honorable senators that when it came to a question of putting certain intricate sections of the .Brisbane together, and when it came to the fixing of the boss-plates, it was necessary to get an Australian workman, trained at Mort’sDock, to complete the job. Knowing all these things, and as an Australian-born, who gives way to no one in his knowledge of iron shipbuilding, I decline to listen silently to Senator Pratten or any one else defaming Australian workmen.
– I rise to order. I did nothing of the sort.- I ask that Senator McDougall shall withdraw his remarks, which imply that I traduced Australian workmen.
– If Senator McDougall has said anything to which Senator Pratten takes exception, I ask him to withdraw it.
– I humbly apologize to Senator Pratten. As one who has known him in the industrial life of the country for many years, I say that, without doubt, the honorable senator is a good employer. I have no objection to him on that score, but when he asked the question about the cost of the Brisbane with an ulterior motive-
– “ Order ! ‘ ‘ again? Then I apologize again. But when the honorable senator refers to the number of votes he obtained it occurs to me that there is something behind all this. I should like to remind the Committee that ‘ when a member of this Chamber came back here after an election and claimed that he had polled the largest vote ever polled in any part of the world for a single man, an illustrious statesman, who was a member of another place, said to him, “My dear senator, do you not think that there is some virtue in a ticket?” I ask Senator Pratten the same question.
– Does Senator McDougall not think there is virtue in a ticket ?
– I do, and I admit I would not have been here but for it.
The Minister for Defence (Senator Pearce) will bear me out when I say that, in 1907, before I had any idea of coming into this chamber, I approached him with a scheme for the building of our warships in Australia.
– Hear, hear !
– 1 came before the Minister as a representative of my union - the boilermakers and iron shipbuilders - in company with the present Leader of the Opposition in the New South Wales Parliament, and declared then, as I do to-day, that the workmen of Australia can do what the workmen of Great Britain are doing. The Minister listened to reason, because we were practical men, . and I was so proud of his answer that I have it framed at home. He said he believed that we could, and that we would, build our own ships in Australia. We have done it, although the price has been a little greater than the cost of vessels built in Great Britain, but the same increase was experienced when the building of locomotives was first undertaken. I believe that just as the price for locomotives was reduced from year to year, so shall we reduce the cost of our shipbuilding, and although our workmen are paid higher wages than are paid in any other part of the world, we shall, eventually be able to carry on this work quite satisfactorily in our own country.
I was very much surprised, when on a visit to the Old Country, to find that the cost of shells for the British Government was 35s. each in one factory, and £2 15s. in another. This difference in price was due to the greed of the contracting employers, who tried to get as much as they could out of the British Government during war time. So long as I have breath in my body, and so long as my fellow workmen continue to send me. into the public life of this country, I shall stand up for them, for Australia, and for the British flag, for which we are all fighting to-day. This matter of the cost of the Brisbane need never have been mentioned. Senator Pratten could have obtained answers to his questions without suggesting that the increased cost of our warships was due to the inferior workmen of Australia.- The primary cause was the fact that our workmen get higher wages; that they are working under better conditions than obtain elsewhere, and that the management was incompetent to carry out the work of shipbuilding in this country under Australian conditions.
– I am not at all satisfied with the answer given by the Minister for Defence (Senator Pearce) with regard ito the erection of dwellings to be occupied by the men who will be engaged in the construction of the Arsenal. There is no difficulty whatever about the matter. The site of the township has been laid out, and the work of erecting homes for the permanent employees could be undertaken. As the temporary employees may be there for two or three years, they could very properly use the dwellings which, later on, will be occupied by the permanent employees. I should like an assurance from the Minister that the disgraceful conditions which have prevailed at Canberra hitherto will not* be repeated during the erection of the Arsenal. The very first works to be undertaken should be the houses for the temporary employees, and if this is not done, I can promise the Minister that I shall never fail to take advantage of any opportunity to remind him of it.
With reference to the cost of constructing the cruiser Brisbane, I may say that 1 have intimate knowledge of Cockatoo Island, and of the particular spot on which the Brisbane was built. In passing, it may be well to point out that, amongst the charges which have been piled up against this vessel are those known as overhead’ charges, which amount to a very substantial sum per cent., though I am not quite sure how much. We have been told also that an unnecessary expenditure was involved by the provision made for the launching of the Brisbane, and any other vessels to be built at that site in the future. Now, what are the facts? lt has been asserted here and elsewhere that a temporary slipway could have been constructed at a nominal cost, in order to float the Brisbane, but the manager was against that’ proposal, and favoured the construction of a permanent structure, which would last, probably, as long as Cockatoo Island itself. He decided, therefore, to build a substantial, permanent, solid concrete launching way.
– Who determined that - King Salter ?
– I understand he did.
– It was not necessary.
– It was not only necessary, but highly satisfactory.
-Mr. Cutler told you the opposite. .
– With all due respect to Mr. Cutler, I do not approve of a temporary arrangement for the launching of vessels.
– You stick to the single-^tax.
– I have’ no desire to enter upon a discussion of that subject, but I never disguise my opinilons, although I know I am up against the strongest possible opposition. If Senator Needham is prepared, to come alongside of me, and stand up holdly in advocacy of land-value taxation, I shall be glad of his assistance.
– Order !
– I know very well that some people would have preferred a temporary and flimsy arrangement for the launching of the Brisbane, but I am one of those who believe in a permanent structure, and, in my judgment, not one penny has been wasted in the construction of the concrete slip-way.
– Would it be possible to launch vessels larger than the Brisbane?
– Yes; vessels very much larger could be launched. A temporary arrangement would, no doubt, have suited if it had been intended to get the Brisbane out of the way, and construct other vessels elsewhere. Senator Pratten asked his question in a most guileless manner, but we know what is behind this suggestion concerning the cost of the Brisbane, as compared with the Sydney, although I do not think that
Senator Pratten had it in his mind. When it is said that the Brisbane cost so much more than the Sydney, people will ask the reason, and some misguided individual will come to the conclusion - in which . they are encouraged by the daily press, which never voices the opinions of Labour, except on rare occasions - that it was due to the workmen.
SenatorReid. - But what are the facts ?
– The facts are that the extra cost was due to the long time the vessel was on the stocks for want of material, and the delay while waiting for the construction of the coffer-dam and the slip-way. In my opinion, the launching of the vessel was delayed for quite eighteen months owing to these causes; just as the construction of the Adelaide is nowbeing held up for want of material. It must be nearly twelve months since the keel of the Adelaide was laid, and, up to the present time, very little progress has been made with that work, although I have no doubt the overhead charges are mounting up against this vessel also. If all the material is readily available, the workmen will not take long in constructing the vessel; but probably the Adelaide will be . used as a stand-by work, >as was the case with the destroyers, and men put to work upon it when . there is nothing else to be done in the dockyard. This is not the way to carry out. economically and satisfactorily the construction of war vessels. I should like to be sure that the time of the workmen doing other work was not charged against the Brisbane, and is not- now being charged against the Adelaide.
Some honorable senators opposite who interject about the card system need it applied to them. They have the impertinence to comment upon the workmen going slow, whenthey themselves only meet about three days a week. When we meet every day in the week and work eight hours a day, some of them may possibly develop additional hide, and comment upon the Australian workmen going slow. When the Australian manual workers see a large number of men, as we see them, working only six hours, they will not continue to work eight hours a day, notwithstanding what Senator Fairbairn and his committees may say. They will come to the conclusion that if other men work only six hours they should be able to live just as well as tihey are doing now by working six instead of eight hours per day. They are just as well off now working eight hours a day as they were when they worked ten,
– Now, would you mind giving the schedule a turn)
– I notice an item of £146,600 under the control ‘ of the Home and Territories Department for the purchase of sites. To this must be added two small items of £1,500 and £500, making the total £148,600. Will the Minister supply us with the valuation of these lands as returned by the owners for the purpose of assessment under the land tax? I have been told, and am inclined to believe, that when land is valued for probate purposes its valuation is not greatly inflated.
– Order! The matter of probate is not before the Committee.
– When the land is valued for taxation purposes, the valuation shrinks considerably, because landowners have an idea that they may be called upon to pay taxation according to the value fixed in their return. When land is being offered to the Government for resumption purposes the price expands wonderfully by some extraordinary process. I should like the Minister to give us the valuation for land tax purposes of the land at Fairy Meadow, New South Wales, which is to be purchased for £8,000. If that is not the value on which the owners have been paying land tax, why do the Government propose to hand that sum over to them ? Then there is an item of £39,000 for land in .the Federal Capital territory, £38,000 for land for Defence purposes generally, £20,000 for land for naval purposes at Cockburn Sound, and £25,000 for land for the Port Stephens Naval Base. It seems that’ the Commonwealth has to pay enormous sums for the small patches of land which it requires for the defence of other sections of the Commonwealth belonging to the same owners. Then there is “ land for lighthouse, workshop, store, and offices, Port Adelaide, £4,500.”
– Why go through the whole list?
– Because you invited him’ just now to give some attention to the schedule.
– Senator Gardiner was allowed to deal with an item of £100,000 for the proposed London offices.
Who authorized the quarrying of stone for that building at Buchan, in Gippsland, and left it lying at the railway station all these years ? Is it to be kept there as a monument to the productiveness of the local quarry, or will it be sent to London ? I look to the Minister to inform the Committee if the owners of these pieces of land are paying taxation in accordance with the values set down in the schedule, and, if not, what the difference is.
.- It is not unwise that this or the other portion of the Legislature should inquire into the cost of building the cruiser Brisbane, and where the excess cost, if any, arose. I do not charge Senator Pratten with doing anything with an ulterior, object, but I emphatically object to any one attributing any excess cost to the workmen without absolute proof. I claim to be an Australian workman. I am a mechanic, and there is very little ironwork about a ship, from the keel to the truck, that I have not personally made. In any establishment that I worked in I never met the Englishman that could beat me. I have brothers in almost every line of the iron trade. There is one in New South Wales now working as a shipbuilder and boilermaker, another is a moulder, and so on, and they have never met in Australia the English workman that could keep pace with them. Reading the reports of the Inter-State Commission on the cost of various manufactures in Australia, I find the Commission invariably come to the determination on evidence that where the Australian workman gets anything like an equal opportunity he produces, in almost every case, from 25 per cent, to 30 per cent, more per head than the English worker. It has been said that the cost of riveting here was more than in England. Although I could not say absolutely, I believe if that statement, is traced to its foundation it will be found that the fault lies, not with the lack of efficiency of the worker, but with the lack of appliances, or with defective supervision. I have found, generally, when workmen have been charged with going slow, or causing extra cost by their methods, .that the cause is attributable almost solely to supervision. If the thing is fairly traced back that will be found to be true in nine cases out of ten. There should be fair supervision, and not half-a-dozen supervisors where two ought to be enough. I know of instances where there are only a few workmen and almost as many supervisors, superintendents, or bosses.
– Is that in Government employment?
– I am sorry to say in some cases it is. It is true even of the New South Wales Railway Workshops. Mr. Lucy, the Chief Mechanical Engineer of the Eveleigh Workshops, told a Royal Commission from South Australia only last March that he had a perfect system of telling the detailed cost of every work, and that the leakage from that source was practically nil. He said he could trace everything right down to the bottom through the perfect system he had in operation. Excessive cost of work is too often attributed to the men, when, if we went right to the root of the matter, we should find that the increase was due much more largely to the supervision. I have never seen a case where an Australian and an English workman have been put together on equal terms in which the Australian has not beaten the other chap out of sight. Nobody could expect us to construct the Brisbane at anything like the same cost as would have been incurred in an old-established shipyard, with an up-to-date plant, with everything handy, and with long experience in that class of work. Even if the first ship was built at double the cost the dockyard in Sydney did very well indeed, and as we proceed the chances are that every ship built here will show a comparative reduction in the cost.
– We hope so.
– I am fairly certain that it will be so. I know, as a mechanic, that you cannot produce a few articles of one type at anything like the same price per article as if you had five times as many to do. Any workshop in Australia constructing articles in iron will give a very much reduced tender for 1,000 than for 100. So the first ship must of necessity have been costly. I speak as an Australian mechanic who was never afraid in my calling to meet any man from Eng”land or anywhere else. That’ remark” will apply to almost any class of Australian workmen. The reports of the InterState Commission, which I advise honorable senators .to read, will confirm my statement. Those reports make it plain that where conditions in any industry are equal, the output of the Australian workman is from 25 per cent, to 30 per cent, in excess of that of the workman of Great Britain. I protest against the insinuation that Australian workmen have adopted a “ slowing down “ policy, and have thus increased the price of the products of this country.
– There is an item in this schedule which reads -
Capital required for the working of the Plant and Stores Suspense Account, established by the Commonwealth Railways Act 1917. . ‘. . £200,000.
I should like the Minister for Defence (Senator. Pearce) to explain what it means. Then, on Friday last, I asked the Minister representing the Minister for the Navy whether he had any objection to publishing a comparative statement of the working costs and revenue of the several radio stations in Australia. In reply, he stated that if there was no objection on the part of the Minister for the Navy, the information would be supplied. Of course I do not desire to be. given any information which it would be unsafe to make public. My reason for asking the question was that some weeks ago, when I brought forward the matter of the radio station on King Island, the Minister for Defence assured me that the revenue derived from that station was practically nil, and that the difference between its receipts and revenue was much greater than that of any other station in Australia.. . Now, I have reason to believe that if the private business be separated from purely defence business it will be found that the King Island station will compare favorably, from the stand-point of its revenue, with other radio stations throughout the Commonwealth. Whether it is necessary to continue that station for defence purposes I cannot say. Probably it is, otherwise the Department would never have taken’ it over. I would like the Minister to supply me with a comparative statement of the receipts and expenditure of that -station, as compared with other radio stations in Australia.
– I listened with very great pleasure to the explanation given by the Minister for Defence (Senator Pearce) regarding the position of the Arsenal. I recognise that in some quarters there has recently been ini tiated a great crusade against wasteful extravagance. I can quite imagine that there may be wasteful extravagance in some places, but I maintain that money expended on national works of this description, is neither wasteful nor extravagant. An Arsenal is an absolutely necessary under taking, from the stand-point of our future existence as a nation. I hope that at the earliest possible moment the Government will select a site for the Arsenal, and that Parliament will agree to it, so that the work of construction may be put in hand immediately.
I notice in the schedule to this Bill an item of £26,000 in connexion with the railway from Darwin to the Katherine River I presume that this expenditure is necessary to complete works upon that portion of the line which, is supposed to have been constructed. A further sum of £20,000 is to be appropriated in connexion with the line from Pine Creek to the Katherine River and southwards. If the Government intend to expend only £20,000 upon this work, they are certainly not going to do very much in the way of railway construction in the Northern Territory. I am. very disappointed with their actions regarding the development of the Territory. Railway construction is imperative to the development of the northern part of Australia. But while Western Australia, on the one side, has full representation in both branches of this Legislature, and whilst Queensland, on the other side, occupies a similar position, the Northern Territory, which is a most important part of Central Australia, has no representation whatever. Everything relating to it has to be left to the Minister for Home and Territories (Mr. Glynn) and his Department. We know nothing of what is going on in that Territory. It will doubtless be recollected by some honorable senators that several years ago the present Minister framed a policy for its development. That policy embraced railway construction, the acquisition of land under certain conditions, and other matters. But to-day we do not know whether it has been laid aside. I regard expenditure for developmental purposes in the “Northern Territory as being just as urgent as expenditure upon any other item of this Bill. Indeed, from the stand-point of our future defence, it is more urgent. If the Government have not yet considered a developmental policy for the Territory, I hope that they will do so at once, and place it before us. Quite recently Mr. Glynn prepared a financial statement relating to the Territory - a statement which is very interesting and informative. But, unfortunately) it outlines no policy.
During the course of his remarks, Senator Gardiner reminded the Chamber that some time ago I had made a statement regarding a certain section of workers in the Northern Territory who are not ‘ desirable settlers. But the Government are doing nothing to encourage European settlement there. On that occasion I emphasized the need for the Ministry doing all that it could to enable British workers to establish their homes there. To-day Senator Grant has put in a strong plea for proper housing accommodation for the workmen engaged at the Pederal Capital. There is a much greater need for similar . accommodation being provided in the Northern Territory. But nothing is being done to encourage men to brave the unfavorable conditions which obtain, with a view to making their homes there. During the last Parliament, I had on the businesspaper a motion in favour of the appointment of a Royal Commission to investigate the affairs of the Territory. Unless the Government do something more practical than they have yet done in the Territory I shall be obliged to again move in that direction.
I hope that the Minister for Defence will convey what I have said to the Minister for Home and Territories, so that we shall not continue in this unsatisfactory way of on the one hand professing to do something for the development of the Northern Territory, and on the other hand doing absolutely nothing from a practical point of view.
– In regard to Senator Grant’s question, I have ascertained that when a purchase of land has to be made, the Government valuers have access to the valuations put in by the owner for taxation purposes.
– Can you tell us how those valuations compare with the valuations put in by the owners? That is the point I wish to get at.
– From the fact that the Government valuers have that access to the taxation papers, I take it that they would use that knowledge to guide them in arriving at the price to offer to the owner for a piece of land. -An owner, of course, is not bound to accept the offer from the Government. Under the Lands Acquisition Act, he can have the offer brought before a Court, which has to determine the value of the land. These figures represent the values placed on the lands by the Department after its representatives had access to the land tax assessments.
asked a question about the item “ Capital required for the working of the Plant and Stores Suspense Account “ for the Commonwealth railways. In his second -reading speech, Senator Millen explained this item of £200,000. It is proposed to. establish a Plant and Stores Suspense Account, to which will be credited the amounts paid out for the plant used in constructing railways. Suppose, for instance, that a certain plant is used in the construction of the transcontinental railway. That plant will be credited to this fund, and if a further plant has to be purchased for the construction of a future railway, it will be bought out of this Trust Fund, and when the railway is completed a necessary deduction will be made for the wear and tear of the plant during the work of construction. It will not be charged against the railway itself, but against the capital. It is following a wellknown system in operation in the State Railways Departments.
The other day Senator O’Keefe asked me to ascertain the cost of working the radio stations, and also the revenue derived therefrom. In accordance with my promise. I forwarded to the Minister for the Navy (Mr. Joseph Cook) a communication asking if the information could be supplied. I have not yet been furnished with a reply, but I hope to have one be: fore we disperse.
asked for particulars of two items connected with the Pine Creek to Katherine River railway. I take it that he desires to know what items make up the capital expenditure of £26,000 for the railway from Darwin to Katherine River. It is made up principally of the following items of estimated expenditure : -
Improvements to jetty, &c, Darwin, commenced previous financial year, £7,509.
Installation of electric stuff, commenced previous financial year, £1,750.
Acquisition of land, commenced previousfinancial year, £300.
Customs house on jetty, commenced previous, financial year, £80.
Additional sidings at Darwin, commenced previous financial year, £470.
Belaying line between 48 chains and 2 miles. 6 chains, £822.
Moulding shop at Darwin, £180.
Electric lighting of railway premises at Darwin, £50.
New carriages for Darwin-Katherine River railway, £3,600.
Strengthening rolling-stock by transfer from Pine Creek to Katherine River railway, one locomotive, eighty ballast waggons, and four other vehicles, valued at £10,100-
Unforeseen expenditure, £1,139.
The honorable senator also asked a question regarding the item of £20,000 for the railway from Pine Creek to Katherine River and southwards -
This amount is for the completion of the line. The Engineer -in-Chief anticipates that, after allowing for credits for plant (including rolling-stock released) and material, the actualcost of the line will not exceed the estimated amount, namely, £400,000. This line is a continuation of the existing Darwin-Pine Creek railway, and will extend a distance of 53 miles 25 chains, terminating 199 miles 25 chains from Darwin.
The honorable senator’s references to policy I shall have brought under the notice of the Minister for Home and Territories (Mr. Glynn). They are on somewhat similar lines to what I think the honorable senator has previously put before the Senate.
Schedule agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Standing and Sessional Orders suspended.
Bill read a third time.
Sitting suspended from 6.23 to 8 p.m. ‘
– I move -
That this Bill be now read a second time.
It is scarcely necessary to direct attention to the importance of the oil industry to Australia to-day. “We produce very little oil in the Commonwealth, but, apart from its use for lighting, the extent to which it is used in connexion with almost every industrial development makes the consideration of a measure to promote its production one of the most important matters which could be dealt with in any country at the present time. There is increasing difficulty in securing necessary supplies of oil, and we in Australia have to bear the double burden in this connexion of distance from the sources of supply and the high cost of freight. In view of the extensive use of oil throughout the world, it will be agreed that any country that would in these times be in the van of progress must make provision for the supply of oil for all kinds of industries at reasonable rates. This is not a new measure. On the 17th November, 1910, we passed an Act for the payment of a bounty on oil produced from shale. That Act expired on the 30th June, 1913. This Bill represents practically a revival of that measure, as, with the exception of a proposed increase in the amount of the bounty, the terms and conditions now proposed are the same as were then agreed .to.
There are two companies for the production of oil from shale now operating in New South “Wales. One of these is the Commonwealth Oil Corporation, whose works are at Newnes, in New South Wales. These works are known to most honorable senators who ‘ have visited them and can form some estimate of their possibilities. The other company is the British Oil Company, whose works are situated at Murrurundi, in New South Wales. There are considerable deposits of shale in the Latrobe district of Tasmania. The Government of that State have been anxious for a considerable time to develop those deposits. They have appealed from time to time to the Federal Government for assistance in the matter, and I hope and believe that the passing of this Bill may give a start te the development of the Latrobe deposits, as I am sure we all wish the tight little island, success in their development. New South Wales is, at present, the only State in which shale oil is being produced, but unfortunately in quantities too limited to supply the Australian market. Oilbearing shale is known to exist in Queensland, in South Australia, and in Western Australia, and it is hoped .that the provision for the payment of a bounty under this Bill will stimulate pioneers of the industry to explore and develop shale deposits in different parts of the Common.wealth
– Why confine the bounty to oil produced from shale? Why not pay it in respect of oil derived from wells?
– Because we do not at present propose to pay bounty on oil derived from every source is no reason why we should not do something to develop the shale oil enterprises which have already been undertaken. When, later on, we are in a position to go in for a wider policy, as I hope we shall be, we may extend the bounty to oil derived from wells.
It is estimated . that the shale known to exist in New South Wales is equal to the production of 600,000,000 gallons of oil. The shale known to exist in Tasmania is equal to the production of 480,000,000 gallons. The shale property at Murrurundi is estimated to yield 145,000,000 gallons. If we can succeed in the development of these shale deposits, it will be a great gain to this country. The Commonwealth Oil Corporation was taken over a few years ago by Mr. Fell, who has now 380 men engaged. The industry is a good one, and I hope will become -a great one. It is certainly worthy of every encouragement we can give it. Mr. Fell has been carrying it on for a considerable time against the forces of nature, and recently, as the result of the award by Judge Edmunds in the coal dispute, the expense of carrying on the oilproducing industry has been increased by some thousands of pounds.- I do not think that any one will complain on that account if it means that the coal miners are receiving increased wages, but it is a further reason for assistance in the development of the oil industry. The production of oil from the Newnes works amounts to 2,800,000 gallons a year.
– On what capital?
– The capital has been variously estimated, but it was recently reduced to something like £500,000. This is considered a fair amount to represent the value of the property and machinery. As .the bounty is to be paid, not on the amount of capital invested, but on the quantity of oil produced, we are not concerned so much about the capital invested in the industry as about the practical production of the oil. The amount authorized to be paid in bounty under this Bill is £270,000, extending over a period of four years. The annual expenditure is limited to about £67,000, but in the event of that amount not being collected in one year, the balance remaining is to be made available over the period of four years to the extent of £270,000 in all. The conditions of employment in the industry are dealt with in the Bill. The Minister will have power to make application to the Commonwealth Court of Conciliation and Arbitration to decide what are fair and reasonable wages to be paid by the industry. I think that is a healthy provision, because, while we have every desire to develop Australian industries, we are agreed that the labour and other conditions attaching to them should be such as we may be proud of. Provision is made for penalties upon persons obtaining bounty not properly payable. The other provisions of the Bill are mainly machinery provisions for the payment of the bounty and the fixing of penalties against fraud and imposition.
– Is there any provision to fix the price which may be charged for oil?
– There is no such provision in this Bill, but I can inform honorable senators that any attempt to exploit the community by the prices charged for oil will be dealt with effectively under powers possessed by the Government other than those provided for in this Bill.
– In the same way as they prevent the exploitation of people in the prices of food.
– Under the same powers v
– Which are either very weak, or are not properly used.
– It may be that Senator Needham’s knowledge of the facts is somewhat weak. I do not wish to digress to another subject, but prices in respect of one hundred different items have been fixed, and as the Minister responsible, I say that there is no exploitation in connexion with any of those lines, as the prices fixed could not be reduced without injury to the primary producers of Australia.
– That is the old plea.
– It is nob the old plea. The prices fixed are based upon evidence taken on oath, and if honorable senators care to investigate any one of these lines, and consider freights and expenses connected with the businesses concerned, they will find me prepared to de fend on the floor of this chamber any one of the one hundred prices fixed. This. Bill is a genuine attempt to develop theshale oil industry of Australia, and I confidently ask honorable senators to help to give it effect.
– I can associate myself with almost every word that has been uttered by the Honorary Minister (Senator Russell). He has put very clearly before us the purpose of this . Bill. If I may regard Senator Guthrie’s interjection as an indication of his views on this matter, I will say that the weakness of the measure is that it proposes the payment of a bounty in respect of oil derived from shale, and not in respect of oil derived from wells. If oil is an urgent commercial necessity at the present time when, as those who use it know, we are paying three times the price for it which should be paid, why should we not offer some encouragement for the development of oil production from wells, which are known to exist in Australia !
– This is a proposal for the payment of a bounty on oil produced ; in the other case the bounty y. would have to be paid on boring.
– In view of the fact that oil must play an important part in our progress in the future; that the Commonwealth Government will itself be such a large consumer of oil for our increasing Navy, and the increase of itsuse in factories under Commonwealth control, I venture to say that a broader outlook might have been taken, and substantial encouragement offered for the development of well oil, if it can be discovered in satisfactory quantifies in Australia. I wish to offer a suggestion, the novelty of which does not prevent ‘me from submitting it. I do not hope to have it embodied in the Bill, though I intend to move in Committee an amendment to give effect to it. It is a suggestion which appears to me to be based on common sense and ‘justice, not only to those engaged in the production of oil, but to the people generally. It is proposed, under this Bill, to (rive another 2d. per gallon on the oil produced by existing concerns. We are in this case distributing public money. It is true that it is for a very good and necessary purpose that the public should have the advantage of the production of oil within the confines of the Commonwealth
My suggestion is that, instead of paying 2d. per gallon to the companies by -way of a bonus,1d. per gallon be given as a bonus and the other1d. per gallon be credited to the people of Australia as their share in these oil concerns. Let us see how it will work out. In the course of four years we will probably pay £200,000 for the production of oil. According to my proposition, £100,000 of that sum will be given as a bonus, while the other £100,000 will be regarded as an investment by the people of Australia in the concern; and when the companies reach the dividend-paying stage, the Commonwealth will share pro rata in the prosperity of the ventures. This proposition will, no doubt, be regarded as being enshrouded in a vagueness necessarily attaching to all new suggestions; but the trend of public thought is in the direction of making Australia self-contained and self-reliant, and I think we have got awayfrom the old stupid idea of a high Tariff, and have come to realize the benefit of a common-sense bonus method for encouraging the development of industries.
This system of bonuses should be considered upon a practical business footing. If the people of the Commonwealth are to be called upon to contribute towards the development of the oil industry, or, indeed, of any industry, portion of the money they put into the ventures should certainly’ stand to their credit. No hardship will be inflicted by this course. If the people interested in the oil industry come to the Commonwealth for assistance, the Government will be’ quite entitled to say that, for every £2 advanced by way of a bonus, they should be credited with £1 in share values. We could then look forward to the time when these ventures reached a profit-paying stage, and expect to reap some return for our investment.
– That is to say, for every £2 given to the companies, £1 wouid come back to the Commonwealth as their share, and be credited to the revenue.
– If a company came to the Government for assistance, and wanted £100,000 to develop an oil proposition, the Government could say that the money would be advanced, but that they would expect to receive £50,000 interest in the venture.
– What would be the difference between that course and giving the company only £50,000?
– It would amount to the same thing.
– The companies would then know that the Commonwealth would- take a business interest in the en-, ter prise.
– When would you take possession of shares in a company ?
– The Government could take possession of the shares at any stage. This’ is a detail which could be settled in the conditions under which the money was invested. I submit that the Government might very well adopt this suggestion, because among their supporters are members who take directly opposite views upon questions of this kind. There are some who believe in private enterprise; and, on the other hand, there are those who believe that at no distant date the Commonwealth will exercise control over huge concerns, particularly those likely to develop into a monopoly. If these two parties could so arrange their differences of opinion, the proposition I make might very well be considered; granting, of course, that among the Conservative section of the Ministerial supporters there are those who can see any advantage at all in a privately - managed concern.
– The honorable senator might explain his system before he sits down.
– I do not think it likely that I could explain it to the satisfaction of Senator de Largie, who can hardly claim to possess that amount of intelligence necessary to understand ordinary plain language.
Senatorde Largie. - You are- very complimentary in your references to me.
– I am always careful in that regard, as the honorable senator knows very well.
Reverting again to my proposal, I point out that it would be a great benefit to the Commonwealth to have an interest in these concerns.
– But we might have to pay calls on those shares.
– The investment might be regarded as equivalent to a sleeping partnership. I simply want to protect the interests of the people, and any liability could easily be guarded against in the details of the arrangement. I do not want to rush over myself in my. desire to come to the assistance of an industry, unless it be for the benefit of the people.
– But would not your proposal be regarded as a watering-down, of the stock?
– I fail to see how, if the’ Government put hard cash into a venture, the stock could be regarded as having been watered.
– But it would, to the extent of the half-share, which would participate in the dividends.
– My proposition would be a slight guarantee, at all events, that the Commonwealth would get some return for the investment when these ventures reached the profit-earning stage. ,
– But would not the’ Commonwealth also get that return by way of income taxation?
– Why should the Government put money into the development of any property such as that at Newnes, without some guarantee of a return ? In any case, it is only a question of time before there will be millions of money in it. I put this forward as a serious proposition, not only with regard to these oil proposals, but with regard to every application of the bonus system.
– But if the companies make a loss, we shall have to share in that loss.
– Not at all, because the loss would have been greater than if the concerns had not received Government assistance. We are not asking for shares. The people concerned in these ventures are looking to the Government for assistance, and my proposal is that, the Government should stipulate (he conditions under which that assistance may be given.
– The Newnes people had £1,500,000 invested originally, but this has been brought down to £500,000,
– I am glad of the interjection, and I notice that whenever public industries are being debated, some honorable senators will always be found anxious to show that it will be a failure because it is not managed cheaply. In this case, we have Senator Guthrie showing that £1,500,000 has been swamped in an attempt to develop an oil proposition. I would not mind if, by means of the bonus system, this company reached a profit-earning stage, and reimbursed the old company for the loss of capital. After all is said and done, my proposition will enable the people of Australia to get some return for the money invested in the shale oil industry; and I think the Government will be well advised to adopt some system by which, if bonuses are paid for the development of any industry, they shall get some return in the way of an interest in the propositions.
I have nothing further to say. I rose with the object of putting before- the Minister the proposal I had in mind, and of suggesting to him, if it is acceptable, that an amendment, might be drafted to give effect to it. As far as the Bill itself is concerned, we are all glad to know that a definite attempt is being made to develop a new Australian industry, by giving practical assistance to men engaged in oil production. This is a step in the right direction. I would not care if thousands of pounds were expended, provided it resulted in the discovery and development of well oil in payable quantities. I trust that the Minister will give- favorable consideration to the proposal I have made.
.- I support the Bill. I always welcome suggestions from Senator Gardiner, but am afraid that he has not given the proposition he put before us to-night very m’ature consideration. I fear he would find that to take the middle course in dealing with the industries of Australia would be disastrous to this nation. Had the honorable senator advocated the amendment of the Constitution to allow the Commonwealth to become traders in the product of a mine,’ and advocated a State industry where the Commonwealth itself would be the greater consumer, he would have been on absolutely sound lines. But for the Commonwealth Government to use public money to invest in a more or less speculative enterprise over which it has not absolute control would not be tolerated by the taxpayers. A Government concern to be run successfully must be controlled by the Government. It would never do for the Government to become a part shareholder in any enterprise unless, the Government held the majority of the shares and controlled it. Upon more mature consideration Senator Gardiner will see that it would be unwise to attempt to amend the Bill in the way he indicated. The production of oil in Australia is one of the most important industries, if not the most important, that we have to consider. Our naval defence under the present system depends largely on the production of fuel oil, and right up to the present we have been dependent for our supplies upon a country which might have become involved in the war at any time. Had that happened, and had we still had our ships here, we should not have been able to obtain a ton of oil to stoke them with. That is a most helpless position for a country like this to be placed in.We have shale deposits in Tasmania and Australia second to none in the world. Scientific investigations have proved that, for continuity of seam and production of shale, they are second to none that are at present worked. Having this raw material, it shows a lamentable lack of enterprise on the part of the nation that at a time like this we have to depend on a foreign country to provide us with fuel oil and petrol, which are so essential for the protection of the nation. In the present circumstances it would be unwise for the Commonwealth Government to enter upon the development of a State mine, because they would only be the consumers of the product of the mine. They could not trade, and in oil production there are quite a number of byproducts which from a financial point of view are equally valuable with the fuel oil. As it would be unwise to enter on a State enterprise, the only practical step to take is to encourage private people to develop the mines. All the State Governments have the power under their Constitutions to become traders, and it is possible that with the bounty to be offered by the Commonwealth the State Governments will undertake the development of their own mines and the supply of oil to the Commonwealth and consumers generally. There is no middle course. We must either be the owners of our own mine and oil works or stimulate and assist private enterprise. I see nothing but disaster from the Commonwealth becoming a part shareholder in the concern. I have great pleasure in supporting the Bill, because I believe it will lead to the development of some of our shale-oil deposits, and enable Australia to take a very material step towards becoming self-supporting and selfcontained in her industries and her defences.
– In supporting the second reading, I welcome, not only the Bill, but also the very interesting remarks of my Leader (Senator Gardiner) and Senator Earle. Senator Gardiner said his proposal that the Commonwealth Government should become a shareholder in an oil mine was novel. It is. I dare say a good debate could ensue on his suggestion. Senator Earle said it would be wrong for the Commonwealth to become the owner of a mine. ‘
– Not wrong, but impracticable under the Constitution.
– That is the point where we may differ. The Constitution does not allow the Commonwealth to become a trader in that regard, but oil is essential for the Navy, and if the (British Government had the chance to commandeer any oil mine, they would not bother about a bounty, but would take it. I suggest a middle course between Senator Gardiner’s suggestion and that of Senator Earle. We have a War Precautions Act. What is to prevent the Commonwealth Government under that Act taking the whole show and developing it, with all its by-products, in time of war ? We should then have a very good argument to put before the people as to the necessity to alter the Constitution to give the Commonwealth Government this power for all time. The war will end some time, but while it is on oil is absolutely necessary. It is one of the big things wanted for the Navy. Why, then, should we not steer the middle course I have indicated?
– What would you do with the mine when the War Precautions Act ceased to exist?
Snator NEEDHAM. - I would keep it, and the experience we had gained as owners of it during the time of war would be an education to the people, showing them that they ought to give the Commonwealth the powers which Senator Earle admits that it does not possess in ordinary times.
– It does not lack any powers if it works an oil mine in connexion with the defence of the Commonwealth.
– I am speaking more particularly of trading. No man will have the hardihood to say that there will not be another war when this one is over. It would be wise for the sake of the safety of Australia and the Empire if all the products necessary for power, propulsion, arid so on were controlled and owned, not by private enterprise, but by the nation. From the outbreak of this war Great Britain, which was the leading upholder of private enterprise, discovered that, whilst it was all right in times of peace, it was no good in times of war. It absolutely failed, and the nation itself took charge of all things essential for the prosecution of the war.
– American enterprise has not been a failure in regard to assistance to the Allies.
– I am speaking of the heart of the British Empire - the most conservative part of it - which found conclusive proof that private enterprise was no good.
– They have not taken over all trade.
– There is very little left to take over.
– Then where do they get their waT-pTofits taxation from?
– All the essentials were taken over. As a matter of fact, England has become a huge arsenal. A Ministry of Munitions had to be appointed because it was found that the Government could not get sufficient munitions manufactured under private enterprise to keep the troops at the Front supplied. Great Britain was forced to recognise that under private enterprise it could not prosecute the war to a victorious conclusion.
– Most of the munitions are made under private enterprise.
– In establishments which aret owned by the State.
– Which are controlled by the State.
– Well , if they are controlled by the State why should they not be owned by the State? I have been led to make these remarks by the suggestions which have been thrown out by Senator Gardiner and Senator Earle. The latter has pointed out that under our Constitution the Commonwealth cannot become a trader in this product. I admit that, but I say that under the War Precautions Act we can take to ourselves this power.
– We should get enough oil for the Navy before talking of trading.
– And here is a means of getting it. We could do as well under this Win-the-war Government, which the honorable senator supports, as we could do by means of private enterprise. To-day we have our Harness Factory, our “Cordite Factory, and our Woollen Mills all under the control of the Government.
– And dockyards, too.
– Yes. Seeing that the Constitution prohibits the Commonwealth becoming a trader in this product, let the Government exercise its powers under the War Precautions Act, and take over the oil wells and shale mines of Australia.
– Would they pay for them ?
– There is the familiar old query. It is always the same patriotic question, “ Will they pay for them t” If the Empire is in danger, and if oil is essential for the Navy, the Government should act in the way I have suggested. Yet Senator Fairbairn at once inquires, “ Will the Government pay for it?”
– It must- either pay for it or steal it.
– Lives are being given to-day to defend the Empire of which we are partners, and yet the honorable senator wishes to put a price upon the shale oil mines. The Commonwealth Government would certainly not steal or confiscate these mines. They have never done anything of the kind.
– The flaw in the honorable senator’s suggestion lies in the fact that the War Precautions Act will cease to operate six months after peace is declared.
– But it would be the means of giving the Commonwealth greater powers than it possesses to-day. I believe that Senator Earle supported the referendum to confer on the Commonwealth larger powers in respect of industrial matters.
– He would not give us those powers. “ He would not bring forward the Bill with that object in view when the other Premiers did so.
– The honorable senator is misinformed.
– When the Premiers of the other States agreed to give us additional powers, did the honorable senator, as Premier of Tasmania, do his share in that direction?
– Of course I did. I carried the Bill through one branch of the Tasmanian Legislature.
– The course suggested by Senator Gardiner is a very good one. Senator Earle has suggested a middle course. I say that the middle course is for the Commonwealth to exercise the powers conferred upon, it under the War Precautions Act, and to take over the shale oil mines of Australia. It will’ be an experiment-
– It would be an experiment all right.
– I believe that the honorable senator has dabbled in experiments, both legislative and otherwise.
– I know too much about this question to dabble in any experiments.
– That may be so. I do suggest, however; that the middle course to which I have directed attention might be safely followed. It would bean education to the people, and would probably be the means, on the occasion of the next referendum, of inducing them to amend the Constitution by conferring upon this Parliament greater legislative powers in respect of industrial matters.
– I congratulate the Government upon the introduction of this Bill. We know that the oil trade in Australia is one of the most backward of our primary industries. If encouragement is to be offered to it,- there are only two ways in which it can be offered. The first is by means of the bounty system, and the second is by means of the Tariff, that is to say, the Protective system. Now, the outlook of this trade would not justify us in imposing a duty upon oil. Those who know anything about the trade or its history in Australia will admit that.
– Question !
– I happen to have a fairly intimate knowledge of this industry. In my native country the shale industry is perhaps better developed than it is in any other country. I havealso gained a little knowledge of the industry in Australia. As a matter of fact, I was chosen both by the miners and the shale oil company interested, to act as referee in an industrial dispute in New South Wales. That being so, it is surely not presumptuous on my part to say I was chosen because of my knowledge of the industry, notwithstanding Senator Gardiner’s remarks of only a few minutes ago. I have a very shrewd idea of the position of the shale mining industry in New South Wales, the only State in which it has been developed to any extent. The outlook there will not justify the imposition of ?. duty upon oil. Such a duty would fall almost exclusively upon the country residents of Australia.
– Nobody has suggested that.
– Senator Pratten has just challenged my contention. That being the case, the bounty system is the only system by means of which the industry can be developed. Even in the most favorable circumstances I fail to see the possibility of it being developed to a sufficient extent to supply Australian requirements. But even if it can supply only half of our requirements, that would represent a considerable trade, and one that we ought to foster. This is really an old industry in Australia. Shale mining has been carried on in New South Wales for between forty and fifty years. The old Joadja Creek mine, in New South Wales, is perhaps the best shale-oil mine that has been discovered in the Commonwealth.
– I do not think that it has ever paid a dividend.
– It has been, a very sickly enterprise all through the period of its existence. But perhaps bigger percentage of oil has been obtained from that shale than from any other shale in Australia.
– What is the thickness of the seam ?
– It is a very thin seam, but it is so rich in oil that it is the most profitable shale that has been found in New South Wales. It retorts very well. Not only is oil obtained from it, but by-products, which pay very’ well. At Hartley, where I acted in the industrial dispute between the miners and the oil company, the seam is from 3 to 4 feet thick, and is of very good quality. This place is not far from Capertee, where there is a very good seam which is much thickerthan that at Joadja Creek. From what I have said it will be recognised that the industry is in a very precarious condition. Several, times in the history of New South Wales it has given promise of blossoming into a prosperous industry. But that promise has never been fulfilled, and the fact remains that it has never yet paid a dividend. Now, we are all more or less acquainted with the history of the Commonwealth Oil Corporation. That company was started in New South Wales with as good prospects as any company could have had in Aus- tralia, lt had a very large capital. It brought most experienced men from Scotland, and placed them at the head of its affairs. But notwithstanding all these circumstances it proved to be almost a complete failure. We must recognise, therefore, that it is unreasonable to expect a gigantic success from our efforts in this direction. At the same time, we are justified in giving to the industry whatever assistance we can render it. We have shale deposits- in New South Wales, Tasmania, and in several of the States. But it is questionable whether those deposits will prove to be valuable from a commercial stand-point. Honorable senators will realize, I think, that it would be a very dangerous thing for the Government to go in for a proposal such as that which was suggested by Senator Gardiner in a very crude and illdigested scheme, which he would not takethe risk of explaining. He rather harked back on his old trick of when he has no case and does not understand what he is speaking about, raising a lot of mud and escaping by so doing. It is a very old trick with the honorable senator here, when he does not understand a subject, to commence to abuse those who have some knowledge of it. He perceived to-night that he had made an error, and rather than attempt to take the responsibility of explaining his scheme, he threw mud about the. Chamber, in accordance with bis practice. As regards the oil industry, we know that it has an increasing value as time goes on. I do not think that we need to offer any bounty or encouragement for the production of liquid oil.
– Why not?
– For the simple reason that the discovery would be so valuable that no encouragement from the Government would be required to develop the industry.
– Therefore, do not aid the discovery !
– There might be a need for encouragement in the shape of a sum of money to be paid to a company which would sink or bore wells. But to offer a bounty upon the production of oil, as this Bill provides for, would be totally unnecessary, because, when a company was so fortunate as to obtain a supply of oil, it could secure so much capital and encouragement, and possess such a good thing, that it would not require any assistance from the Commonwealth. Shale pil -mining must ever be an expensive method of producing oil. It is not only a question of mining the shale, but also a question of -erecting, a very expensive works to raise the shale and extract the oil. I would not have intervened in the debate except to let Senator Gardiner see that. I know something about the history of the oil industry, and that I was considered by the two parties to a dispute competent enough to be referee, because I knew the A. B.C. of the industry from one part of the production to the other. On the strength of that knowledge, I was honoured with the appointment of referee. There is but small hope of Senator Gardiner being similarly honoured by this or any other industry.
– I also welcome the Bill. I have thought for a long time that, in view of the necessity for providing the fuel for the Australian . Navy and developing our fuel resources for other purposes, the Commonwealth has been rather backward. We have not taken the steps which might have been taken to assist in the development of the shale oil industry. We all know very welL as Senator de Largie has just proved by going into its history, that mining for shale oil in Australia has not been a profitable industry. I believe that a dividend has not been got yet in Australia from shale oil mining. Except, perhaps, in a few places in New South’ Wales mentioned by Senator de Largie, I do not know that there have been many attempts made in Australia to obtain oil from shale. New South Wales, of course, led the way many years ago, and more work has been done in that State than in any other. In Tasmania a good deal of money has been sunk in the attempt to develop a payable shale oil proposition. In view of the chequered history of mining for shale oil,and in view of the heavy losses sustained by the investors, it is quite easy to understand that it has been very difficult to secure the money to develop well-known shale resources. We are aware that such resources exist in many parts, of New South Wales, and also in Tasmania. I do not know anything about the resources in other States, but I understand that they exist. I agree with Senator de Largie, that the bounty system is the only feasible scheme to encourage the development of mining for shale. I would have preferred the Commonwealth to reserve complete control if possible.
I cannot quite fall in with the suggestion of Senator Gardiner. When it was made I put a note of interrogation after the words “ divided control.” Probably it would be found to be an insuperable bar to the success of the idea. Suppose that, in allotting £200,000 to encourage the development of the industry, the Commonwealth said to a company, “ We will give a bounty of £100,000, and lend you the other £100,000, or buy that value of stock in the company, and, of course, when the stock begins to pay, the dividends declared in that stock will belong to the Commonwealth.” That must mean divided control. The Commonwealth would require to have some sort of control, otherwise the taxpayers would not be satisfied with the business; probably they would object to public money being put into ventures in that way, unless some officials had a voice in the control of the operations. On the other hand, Senator Gardiner mentioned a specific sum. He said he would prefer to advance £100,000 to a company by way of gift, and to lend the other £100,000, or take stock in the company to that amount. That falls back to the original £100,000. It would simplify matters for the Commonwealth to say, “We will give you the £100,000.”
The sum of £270,000 which is provided for in this measure is only to be spent when results have- been obtained, and then at the rate of £67,000 per year. Therefore, if the Bill is passed, it will not cost the taxpayers a shilling until actual results have been obtained. I believe that we shall get a return from the grant of the bounty. In my opinion, we have a better chance of obtaining a return now than we had some years ago, because we know more about our shale, resources than we did then. Within the last year or two in Tasmania we had a report from the Commonwealth oil expert which opened the eyes of a number of persons in that State,, who had not previously a strong belief in the value of its shale deposits. It was couched in such glowing terms that quite a number of persons in the State thought that it was too good to be true. A lot of money was sunk by a company there only a few years ago in putting up machinery, and the experiment was a failure. Expert examinations made since then have shown that the machinery was not of a proper kind, and a great many of the reasons for the failure are to be found in bad management.
– The retorts were absolutely useless.
– I think that Senator Earle was Premier of Tasmania when the expert reports were being got out showing that the. manager of this company did not know his business. I would have preferred the Commonwealth to have complete control in this matter, except, of course, for the very valid reason that constitutionally the -Commonwealth cannot be a regular trader. Senator Needham has suggested that, rather than pass the Bill, we should take the middle course of the Commonwealth exercising its powers under the War Precautions Act.
– I did not say “ rather than pass the Bill.”
– I beg the honorable senator’s pardon.
– I am supporting the Bill.
– When the honorable senator made reference to the middle course, I interjected that should the war end within a month or a year, as we hope it will, fresh legislation would be needed, because, six months after the declaration of peace, the Commonwealth would haveno power to continue as a trading concern, so that his suggestion fails in that respect. If we cannot have a Commonwealth enterprise because of our restricted powers under the Constitution, the next best thing, I think, would be State enterprise. The Bill affords to a State which’ has proved the existence of local shale deposits which are worth spending money on, or to private enterprise, an opportunity to enter into this business. I hope that the Tasmanian Government will immediately avail itself of the opportunity. Senator de Largie and I remember when the question of giving a bounty upon the production of iron and steel in Australia was brought forward here many years ago.
– And there was very little said against it.
– There was a veryinteresting debate, in which some objections were raised. A Royal Commission inquired into the matter at the time. I expressed the opinion that the Government of Tasmania might avail themselves of the measure then introduced to develop the magnificent iron ore resources of that State. They did not take advantage of that opportunity to commence the development of a big industry with the assistance afforded bv the iron bonus. I hope that the Tasmanian Government will have profited by experience, and will not to-day be afraid to purchase from the present owners, at a fair valuation, the Latrobe shale proposition, and make a State enterprise of its development. If they do not do so, I trust that private individuals will undertake the development of the industry, and secure the bounty proposed to be paid under this Bill.
Senator Gardiner touched upon an important point when he said it was a pity that there was not included in this measure a provision to assist the production of well oil. The two propositions do not stand on the same plane. A bounty is not payable upon the production of shale oil until capital has been invested in the mining of shale for the purpose. The payment of a bounty on oil derived from wells might assist in prospecting for the discovery of oil fields. A State Government might find it advantageous to enter upon land if there were indications justifying the spending of money to bore for oil. The Commonwealth Government for their own purposes have the same power.
– -They are spending money in this way at the present time.
– That is in Commonwealth Territory. The State or Commonwealth Governments might extend their operations in this direction if prospecting disclosed promising places justifying boring for oil. I hope that the Bill will have the effect of bringing into existence some payable shale mines in Australia which will be of benefit to those investing their money in them, and of very material indirect benefit to the Commonwealth as a whole.
Senator GUY (Tasmania) [9.231.- I congratulate the Government .upon ‘the introduction of. this important Bill. No doubt oil will, in the future, play a much more important part than it has done ir> the past in the service of the people. It seems. to me that motive power will, in the future, be very largely derived from the use of crude oils, whilst the refined product will be, to a greater extent than at present, required for motors. I have in mind, at the present /moment,- one or two very cheaply run electric lighting schemes in connexion with which the motive power is crude oil. ‘I have seen it used also in agriculture. I have seen little, oil engines which can be readily removed from one place to another used on farms, and attached to a chaffcutter, to a churn, or to a pump. These engines are run at a very low cost per day.
We have deposits of shale in various parts of the Commonwealth. I. have seen the works near Latrobe, in Tasmania. I agree that more than, one reason may be suggested for the failure of that enterprise. In the first place, the plant was too small to carry on a profitable industry, and, as Senator Earle has suggested, it was faulty in construction. But so far as the quality of the shale at Latrobe is concerned, there is the best of evidence that it is equal to anything of the kind in the world. I have had conversations with Dr. Wade, who bears an excellent reputation, and speaks very highly of the quality of the shale at Latrobe. His reputation is such that I do not think he would venture to make a report which he did not believe to be absolutely correct. He was once chosen to represent the British Government in connexion with some big oil proposition. Had it not been that a certain letter miscarried, he would not have come to Australia, and probably would to-day be representing the British Government in connexion with some oil ventures in Persia, where there are important deposits of shale.
If the bounty proposed to be paid under this Bill is availed of bv private companies, or by State Governments possessing shale deposits, an industry may be developed which will be for the lasting benefit of Australia. The payment of a bounty seems to be the best possible way to promote the development of such an industry as the production of oil from shale. To include the payment of a bounty upon oil derived from wells would encourage prospecting for such oil, and I can see no reasonable objection to the payment of a bounty on oil derived from wells.
I do not think that, at present, itwould be wise to include a provision in this Bill fo give’ effect to Senator Gardiner’s suggestion. The war may terminate soon, as we hope it will, and in that ease the operation of the War Precautions Act will come to an end. If the Commonwealth should, in the future, acquire the power to undertake enterprises of this bind, the honorable senator’s suggestion could be usefully adopted, and, in the meantime,’ it might be used as an argument to secure that power. Governments in the past have bought shares in various enterprises. I remember reading some years ago than the. British Government bought shares in the Suez Canal in order ito secure a controlling influence over it. It would not. be a novelty for a Government to buy -shares in- a private enterprise and it wa* worth Senator Gardiner’s while to advance his idea, even though he may not be able to give effect to it in this Bill. I again congratulate the Government upon the introduction of this useful measure.
– I desire to join in the congratulations to the Government for their efforts in this direction. I have been pleased to find that every honorable senator who has spoken on the motion for the ‘second reading of this Bill has admitted the importance of the production of oil and the necessity for doing everything possible to encourage the industry. It may be considered a new industry so far as Australia is concerned. Attention has been directed to the extensive use of mineral oils to-day. They enter very largely into almost every form of business. They are extensively used as a luminant, and in recent years have been very much used as a motive power. I wish to stress the importance of the Government doing everything possible to obtain shale or well oil in Australia to meet the needs of the Navy. The Honorary Minister (Senator Russell) remarked that this was one of the most important phases of the subject, and, that being so, it should be encouraged to the fullest extent. I notice, however, that the Bill proposes to grant a bonus for the production of crude shale oil only, and events in the past have demonstrated that the production of oil from shale is a failure from a commercial point of view in Australia. I regret, therefore, that attention has been centred so much upon this phase of the oil industry, especially in view of the possibility, indeed the strong probability, of flowing oil being found in this country. I am strengthened in this opinion by evidence already obtained. With the exception of the Newnes and Latrobe districts, no other shale deposits of any extent have been discovered in Australia, and in the New South Wales venture, referred to by the -Honorary Minister, it appears that the original capital of £1,000,000 has been written down by half-a-million, indicating that the shale-oil industry is diminishing, rather than increasing, in importance or prosperity. This Bill, therefore, proposes to do no more than has been possible in the past by a measure which has been on the statutebook for years, and under which no progress has been made in the development of the shale-oil industry. 1 have here an extract from the Adelaide Advertiser of the 17th September, reporting an interview with the Minister for Home and Territories (Mr. Glynn) on the objects of this Bill, and showing the need there is to encourage the production of oil for naval purposes at a time like the present, when the Empire is in great need of it. I do not see, however, how the Bill can be effective, because, as I have already shown, the present measure has not resulted in any development of the industry, although the same opportunities have been available as will be presented under this measure. During the debate it was stated that the industry may be assisted by an increase of the Tariff or by means of a bounty. I think it might be assisted by means of a subsidy, not necessarily on the quantity of oil produced, but on any bona fide attempts to discover oil. In the case of the Newnes and Latrobe district deposits, the oil is contained in the shale, but flowing oil is found in reservoirs below the oil-bearing strata. I think it likely, therefore, that if oil is to be discovered in Australia, it will be found in this form, and if we can strike oil - which is synonymous with the term to become rich quickly - there is not the remotest doubt that it will be one of the most important discoveries ever recorded in Australian history.
Some of the mineral discoveries in Australia are second to none in the world, and there are indications of the existence of oil deposits in some portions of this continent. Bores which have been put down to a depth of 4,540 feet have traversed exactly similar strata to the oilbearing strata in California, so there is just as much reason to anticipate a successful result here as there was to expect the experiments in California to be attended with success. . “We want to encourage the people who are engaged in this business, and if the Bill is to be effective provision should be made for assistance to those who are working along these lines. When the Bill is in Committee I would like to amend, not only its title, but the citation of the Act, by adding the words “ and for the subsidizing of boring for oil,” so that the title would then read, “ Shale Oil Bounty and Oilboring Subsidy Act.” There is every reason to believe that flowing oil will be found in this country. A few years ago it was not known that there was any radium active ore in Australia, but important discoveries have been made of late years, and at Mount Paynter it is estimated that there is at least £1,000,000 worth of this ore available. Mr. Glynn, in the interview to which I referred, is reported to have said -
There were shale-oil propositions as going concerns in New South Wales which in 1915-16 had produced over 3,000,000 gallons. Tasmania had her venture at Railton and Latrobe. He further stated that the Commonwealth had undertaken to purchase 3,000 tons for eight years at £15 per ton.
The contract mentioned was probably made by the Commonwealth Government on behalf of the British Government, the total quantity being 64,000 tons.
– Are you not making a mistake about the price - £15 a ton?
– I have quoted from the newspaper report, so if any mistake has been made, it was not by me.
Mr. Glynn, in the interview, also made reference to the oil-boring experiments in Papua, mentioning that £66,000 had been spent in an endeavour to find oil there, and he added that this Bill was intended to keep the shale-oil project going, in order to secure oil specially suited for the requirements of the Navy. The Minister stated, further, that if flowing oil were struck, the subsidy would make no difference. That is the point to which I desire to direct attention. If a company discovered a mine like the Great Boulder mine in Western Australia, there would be no need to seek assistance from anybody, and if oil is struck in Australia the profits from the venture will meet all requirements: As I have already stated, boring operations in the Robe district of South Australia have reached a depth of over 4,500 feet, which is equal to the distance from this chamber to Queen-street. In Papua, where £66,000 has been spent in an endeavour to find oil, the deepest bore mentioned by Mr. Glynn is 1,800 feet, and the next is down 500 feet. These are shallow scratchings, yet they have cost the Commonwealth £66,000. The bore put down to close on 5,000 feet by private enterprise in South Australia has cost very much less.
– Probably under different conditions.
– Probably ; but from Mr. Glynn’s description, it appears that the ground in Papua is very much softer, while the bore at Robe, South Australia, which passes through bands of sand and soft shale, passes also through some very solid and almost impervious strata.
– One half of the staff in Papua are always sick.
– Then does medical attendance on sick miners account for a large part of the expenditure of £66,000 in Papua?
– There is also the difficulty of transport.
– The log of about half-a-dozen bores in (California which are oil-bearing shows strata very similar to those in South Australia. It is a fair presumption, therefore - seeing that oil can be distilled from the shale passed through near the surface, and that natural gas has been found from near the surface right to the bottom - that oil can be distilled from the sands down to the lowest depths. We must have enterprise on this question, and continue our investigations, putting down, not one bore, but several. A study of the log of the strata passed through in the bore in South Australia has had such an effect upon a great American company that they are instituting operations to put down another bore there, and they would not take such a risk unless they thought the prospects were very favorable. The matter has passed beyond the range of mere possibility. It is admitted that oil is of vital importance’ to the Navy, and we have proved that oil exists in Australia^
Therefore we cannot resist the justifiable claim for an honest attempt to find it. We want a spirit of discovery that will press forward. We have done all that can reasonably be expected from a first attempt. We have absolute proof, short of the discovery of flowing oil, that oil is there. When the enterprise was started a good many prophets told us .the geological formation that occurs in the southeast was likely to be so shallow that there would be little or no covering to retain the oil. Dr. Wade himself said the covering would be too shallow, and that before the bore was down much more than 1.000 feet iti would strike granite. We have not struck granite yet, and right at the bottom of the bore we are in sand. A letter which I have here says -
We can scarcely imagine the transformation that would take place in Australia if oil deposits were really discovered, lt seems more than highly probable that it will become the main fuel for steam-ships and for naval boats. It will be essential that a sufficiency should be obtained here.
If we are to be in the gulf stream of commerce, and oil fuel vessels are to trade with Australia, it is absolutely necessary to use every endeavour to provide them with the fuel that will take them back again. If they cannot get ‘‘fuel to return with they will be diverted to other places, and we shall have to content ourselves with a second-class means of communication with the Old World. I urge that th, scope of the Bill should be widened to offer a bounty, not only for shale oil, but for well oil.
– This is a Bill to provide a bounty for the production of shale oil. The honorable senator has, for the best part of half an’ hour, been dealing with the production of liquid oil in wells or bores.
– The oil that will be produced here from shale will be liquid when retorted.
– That is evading the point to which I desire to. draw the honorable senator’s attention. The proposed bounty is for the production of oil from shale, and not from wells or bores. The honorable senator was perfectly in order in saying that he thought the provisions of the Bill should be extended to the production of oil from wells, and to enlarge on it at even considerable length, but he has enlarged on it almost entirely since he began his speech. I urge him now not to be so discursive.
– I intimated when I rose that I intended to move in Committee for the alteration of the title and scope of the Bill for the very purpose of which I have been speaking. It was for that reason that I wished . to show the need for r enlarging the scope of the measure.*
– That would be out of order. The Committee will not be competent to alter the purpose of the Bill. The Senate cannot amend a Bill so as to increase the burden on the taxpayers, nor can it divert a vote. That rule has been laid down over and over again.
– In those circumstances the matter I intended to bring before the Committee will have to wait for another opportunity.
– The puzzle to me in connexion with Bills of this kind is how they come under the notice of the Ministry. How is the oracle worked ? How are the men concerned in this industry able to go to the Commonwealth ‘Government and ask that, out of our very slender resources, we should hand over £67,000 annually?
– Nobody earns these bounties. It is a sort of fiction.
– That may be, but I should like to know the genesis of this business. How does it come about that the Ministry bring forward a measure of this kind? They are discreetly silent on that’ question.
– Certainly not; they believe it to be in the best interests of Australia as a matter of public policy.
– How is the spirit of public policy developed to such an extent that the Ministry brings forward a Bill of this kind ?
– Why not let the front of your mind say what the back of it is thinking?
– I have said exactly what I am thinking. People have put vast sums of money into efforts to produce oil from shale, and, so far, have not been eminently successful, and now the Ministry urge Parliament to come to their assistance to the extent, if necessary, of £67,000 per annum. It seems to me that attention should be directed to the fact that the supply of oil in Australia is comparatively limited.
SenatorMillen.- Attention has already been directed to that fact by the previous eight speakers.
– It may be that there is an inexhaustible supply of oil in Australia both from shale and oil wells, but, if so, it has yet to be discovered. I would suggest that the Government should look at the magnificent work that is being accomplished in Tasmania. That enterprising little State, by means of the Great Lake, is generating an electric current equal to 9,000 or 10,000 horse-power, which it supplies to the city of Hobart every day. The trams there are run by electricity, and the city is lighted by electricity. It is only a question of time when, perhaps, with the aid of a bounty from this Parliament, a pontable storage battery will . be invented which can be charged with sufficient electric current to permit of it being utilized for distances up to 300 or 400 miles. The use of oil would thus be obviated. This project is just as much worthy ofsa bounty, I think, as is the production of oil from shale. I suggest that the Government should give attention to this phase of the question, in order that the discoverer of a portable battery may be handsomely rewarded. There would then be no need for a State like Tasmania to use oil at all, because a sufficient supply of electric current would be available at almost every cross road. I am not too satisfied with the Bill. . But I do not see any other way of developing the shale deposits of Australia, and I quite recognise the urgency of securing a greater supply of oil. Probably this Bill offers us the best way out of the difficulty of a temporary character. At the same time, it is a very poor one.
Question resolved in the affirmative.
Bill read a second time.
Motion (by Senator Millen) proposed -
That so much of the Standing and Sessional Orders besuspended as would prevent the Bill being passed through all its stages without delay.
– If we carry this motion, is it the intention of the Government to pass the Bill through all its stages tonight ?
– I am anxious that it should be disposed of. I do not desire it to stand in the way of certain motions of which I have given notice for tomorrow.
Question resolved in the affirmative.
Clause 1 (Short title).
– In speaking upon the motion for the second reading of this Bill, I intimated that I desired to move an amendment in this clause. I wish to move -
That the following words be added to the clause: - “and Oil Boring Subsidy Act.”
– What is the use of doing that, in face of the remarks of the President? I sympathize with the honorable senator, but I do not think his action will accomplish much good.
– I think that it is’ quite competent for me to move for an alteration in the title of the Bill. If it is not, I should like to see the standing order which I am infringing.
– The Standing Orders will not allow such an amendment to he moved.
– I do not wish to move for an increase of the amount to be appropriated for- the purpose of paying this bounty, but merely to increase the range of operation of the Bill. I shall be very glad to be informed of what ‘ standing order I am transgressing, because I hold that it is quite within our competency to amend the title of this Bill.
– I would point out that standing order 187 provides that the title of a Bill shall agree with the order of leave. We are acting- under the order of leave now, and no clause can be inserted in any Bill that is foreign to its title. This Bill has come to us under the order of leave with a certain title, and any alteration of that title would, I submit, be inconsistent with that order of leave.
– I. rule that any proposal to alter the title of the Bill is out of order.
Clause agreed to.
Clauses 2 to 5 agreed to.
.- I move-
That the following new clause be inserted: - “ 5a. Any person to whom bounty is paid shall grant to the Commonwealth an interest in the business in respect of which the bounty is paid equal in value to onehalf of the amount of such bounty.”
I ‘recognise that some honorable senators, who support this measure may be disposed to be antagonistic to my proposal. But I yield to no man in my desire to see. the oil industry of Australia encouraged as much as possible. Geographical boundaries do not influence me in this matter. My proposal, if .adopted, will have far-reaching effects. In the past the Commonwealth has done much in the direction of developing” industries by means of bounties. In future it will accomplish a great deal more. If we are going to interfere with businesses, I think it is preferable to offer the encouragement by means of the bounty system than by means of Tariff assistance. At the same time, there should be some check upon the companies which claim the bounty. If I were the organizing head of a company, and found that by merely holding out my hand I could receive a bounty, naturally I would hold out my hand. But if, for every pound that I received by way of bounty, I had to give the Commonwealth an interest in my business to the extent of 10s., I would be very chary about claiming the bounty. If the proposed new clause be carried, what will be its effect? Senator O’Keefe appears to think that if we had to pay a company a bounty of £100,000, and that company had to give the Commonwealth a share in its business to the extent of £50,000, the position would be the same as if we had to grant the company a bounty of only £50,000. May I point out to him that the company might need the bounty of £100,000. If oil companies, developed by means of the people’s money, were able, in ten ot twenty years’ time, to return a profit of J.00 per cent, per annum, under my proposal the Commonwealth would reap a rich reward, which I think it should reap. Let us follow the thing a little farther. The company which will reap the largest benefit is, I am glad to say, established in the State of New South Wales. If it has a capital of £500,000, and within the next four years gets £200,000 from the Commonwealth, it will be no hardship for the company to say that then its capital is £600,000, namely, £100,000 belonging to the people of the Commonwealth, and £500,000 belonging to the company itself. It is, I contend, a fair division of the profits accruing from the investment of public money.
It may be urged against my amendment that the Commonwealth has. no power under the Constitution to become a trader; but my reply is that it would not become a trader. . It would merely give a bounty to a company to assist it during the time when assistance was needed. We should exercise, on behalf of the people of the Commonwealth, much of the discretion which we exercise in the investment of our own money.
– The honorable senator will see that his proposal involves the acquisition by the Commonwealth of an interest in a company under the guise of a bounty. Where is the equity of that?
– To my mind, the proposal will safeguard the Commonwealth in regard to all the bounties it may pay out. I am not submitting the amendment with the intention of securing in an underhand way a return to the Commonwealth from the bounty.
– You actually ask for a refund of the bounty.
– The return from the Commonwealth’s interest in a company might amount to much more than the bounty itself : in some cases it would. In New South Wales there are companies which have largely been built up with the people’s money. Take, for instance, Hoskins’ iron works at Lithgow. I do not know how many thousand pounds of public money have been put into that concern. It is, I should say, particularly profitable to the people of Australia and to Hoskins; but all the profits which the investment of Commonwealth money will earn will accrue for all time to Hoskins. As regards the wool-top industry carried on at Botany by F. W. Hughes and Co., it is quite a desirable local industry. The company has received a considerable amount of public money by way of bounty. It matters not how profitable it may be at present or in future. The provision of the people’s money enables Hughes and Co. to become a profitmaking concern, and there the people’s interest in it ends.
– I do not think that you are quite justified in making that remark.
– Well, I will say that there the people’s benefit ends.
– The people have achieved a permanent success in regard to the matter.
– The individuals who collected the bounty take the profits, and the people who provided the bounty, notwithstanding that it made profits possible, get no return on the capital they invested in the business. It is all very, well for representatives of the people here to say that the Commonwealth should be satisfied with the indirect benefit it receives from the employment of its people. It is right, of course, for the governing body to build up industries in such a way that the people will be employed. I submit the amendment which I think gives effect to my intention. In the case of, not only this Bill, but everyother Bill which may be introduced, 1 shall insist that for every £1 which the Commonwealth gives to a company there shall be some interest secured to the Commonwealth if the company should ever reach a profit-making stage.
– I trust that the Committee will not accept the proposed new clause. Whatever merits or demerits there may be in the principle in relation to future bounties, the conditions do not apply to the bounty provided for in this measure. If, however, there is any justification for the Commonwealth Parliament enacting the proposal, the Commonwealth ought to come in on the ground floor. The company which Senator Gardiner has mostly in mind has spent over £1,000,000 in making experiments in New South Wales with regard to the discovery of oil.
– Not experiments.
– The company has spent that sum largely in conducting experiments, as well as in extracting oil. In other words, it has spent over £1,000,000 in trying to establish oil works in the State. And now, in the hour of its trial, when practically it has reached a critical stage, very largely owing to the development of war conditions, which, of course, have benefited the company to a limited extent, but which has also handicapped it in many ways, a measure is submitted providing for the payment of £270,000 in bounties. Probably the whole of this amount will not go to that company. I believe that the Tasmanians mean real business, and I hope that they will participate in the appropriation. The only reason for offering a bounty is not to enable a company to become stronger, but to provide the difference between the total charge for producing the oil and the market price which ft obtains. Therefore, a bounty is not to be used by a company for building up capital or buying machinery, but to produce oil, in the hope that the experience so gained will enable it at a later stage -to produce more rapidly and successfully, and to better cope with competitors overseas. The proposal of Senator Gardiner is rather defective from the point of view which he first expressed, and which, as I understood it, was that the Commonwealth should participate in the existing share capital of the company. Later on, he said that he was in favour of increasing the capital of the company by 50 per cent. Let us imagine what would happen. After the company had spent over £1,000,000, it realized that it was in a very bad position. It discovered that it was overcapitalized. Then it honestly turned round and reduced the capital to about £500,000. If the Commonwealth is to participate in that capital to the extent of 50 per cent, of a bounty, and if the company drew a sum of £100,000 a year from the Commonwealth, it would only have to be paid for ten years, when the Commonwealth would have acquired the whole of the business. If it is desired that the Commonwealth should exploit the company in that fashion, well and good. Let us now see the other side of the picture. It is recommended that the Commonwealth should put 50 per cent, on to the capital of the company. At the present time, the capital is £500,000. Suppose that the company drew a bounty of £200,000, that would mean an increase of the capital to £600,000. The further the bounty went, the more the capital would increase. The proposal is unsound from a business point of view, and altogether indefensible. In this Bill, the Government is trying to help an industry which has already sunk a good deal of money, and which now seems to have a reasonable prospect of being success ful. We are holding put a helping hand, not to assist a private company, but to benefit Australia.
– The object which Senator Gardiner has in view is, of course, laudable ; but I point out to him that if the Commonwealth is going to give a bounty, it can hardly expect a refund of the money. If I were building a house, and the honorable senator were kind enough to subsidize me to the extent of £500 in regard to the cost of the building, 1 would certainly refuse his assistance if he stipulated that he should have an interest in the building after it was completed. In submitting this amendment, he has in mind the securing to the Commonwealth of a proprietary interest in oil-producing enterprises which are ultimately successful. In a measure that is sound, but it is hardly fair for the honorable senator to make that stipulation under the guise of giving assistance to industries which may be established, or which are being established. It is not of any assistance.
– They will not ask for the bounty if it is of no assistance.
– I venture to submit that a company which has produced, or is producing, a few million gallons of oil is not likely to ask for assistance in the way of an allocation of this bounty if it involves the giving to the Commonwealth of a proprietary interest in the concern. If the Commonwealth wishes to secure that interest, it should directly purchase it. That is a question which is in itself different from the subsidizing of the concern in order to put it on its legs. If the Commonwealth thinks that an enterprise is likely to be successful, it can stipulate for an interest in the concern. If it thinks that the enterprise is likely to be profitable, it may be a very wise step for it to take, and despite the contention put forward as to limitations imposed by the provisions of the Constitution. I venture to say that very little limitation is placed upon the enterprise of the Commonwealth in this direction if it is associated with national defence. Even in time of peace, the Commonwealth Government may do almost anything if it can be directly connected with the function of national defence. It is said that the Commonwealth has no trading power, but honorable senators are aware that, for instance, in connexion with fleet construction, material purchased by the Commonwealth, and scrapped, may be sold ‘without any contravention of the Constitution. I say that there is practically no limitation constitutionally imposed upon the activities of the Commonwealth if they can be associated with national defence.
– The trouble is to so associate them.
– The Commonwealth Government could to-morrow ac- quire an interest in any concern, if that were necessary, for purposes of national defence.
– Under the War Precautions Act.
– No; it might be done in times of peace. I confidently make that assertion, although I have no legal training. It might be very desirable, aDd might eventually be essential, that the Commonwealth should do so, but it should not be done under a scheme for the stimulation of an industry for the production of oil. Whilst the objective of Senator Gardiner is laudable enough, and can be well defended, I do not think he should attempt its achievement in connexion with a measure the object of which is the stimulation of the production of oil by means of a bounty. A bounty is a free gift by the community to an industry which can be successfully established. It is recognised that the indirect, and indeed the direct, benefit to the nation from the payment of the bounty may be so great that the Commonwealth may be amply remunerated if the industry can be established to such an extent as to place it in a position to claim the moneys provided for by this measure. That would be a consummation devoutly to be wished. Senator Gardiner has held Ministerial rank, and is now Leader of the Opposition in the Senate, and I am sure that he would hail with delight the establishment % of the oil-producing industry on a scale sufficient to justify the allocation of this bounty. The expenditure of £270,000 in this way would be a mere bagatelle compared to the national results that would be achieved. I am not in the habit of making rash promises, but I promise Senator Gardiner that if it is deemed desirable in the future that the Commonwealth should acquire an interest in any oil-producing enterprise, particularly in connexion with national defence, he may claim my assistance in the matter.
.- I rise to a reply to what has been said by Senator Bakhap.He commenced by saying that if he was about to build a house, and wanted £500 from me, he would not accept it if I demanded an interest in the house. I wanted to build a house at one time, and asked for £500 from a bank for the purpose, but I could get the money only on the condition that the bank should hold, not merely an interest in the house, but the title deeds of the property.
– “Would the bank hold them for ever?
– It would hold them until the money I borrowed was refunded with interest.
– The bank lent the honorable senator the money.
– Exactly. So that, from a business point of view, Senator Bakhap was quite off the track in his remarks.
– It is not proposed to lend this money to oil companies. What is proposed is a bounty.
– I am contending that, as under this measure we shall be handling the people’s money, we should deal with it in a business-like way, and if the oil companies given the bounty become prosperous, the people who provide the bounty should participate in their prosperity. With reference to the right of the Commonwealth Government to sell scrap, or the refuse of a business, I may say that it does not exist in normal times. Senator Bakhap will not venture to tell me that such a business as the Commonwealth Harness Factory, the profits of which have been increased because under the War Precautions Act, in time of war it has been able to sell scraps and cuttings of leather, could have sold that waste material in time of peace.
– Can the scraps of the Navy Yard be sold in times of peace?
– I am directing the attention of the honorable senator to one Commonwealth industry whose profits have been increased to an enormous extent, owing to the fact that under the War Precautions Act the Government controlling it have been able to do what, under the Constitution as it at present stands, they have not the power to do. On the two points to which I have referred Senator Bakhap has been mistaken. If the money provided for this bounty were his money, and he was putting it into a company, he would expect a return for it when the profit-earning stage had been reached by the industry carried on by that company.
– No private individual gives money to establish an industry. This bounty is a national gift.
– A number of. national gifts have been made to private concerns. I have never heard of such bounties being given to the poorer individuals of the community.
– What about the maternity allowance? It has reached a substantial amount.
– Yes, and it is given in respect of the most valuable product of the country. We give allowances to prospectors to encourage them to discover gold.
– There was never such a bounty as this offered in connexion with gold production.
– There may never have been such a huge bounty offered, but in New South Wales any prospector may receive assistance from the State, at per foot or in a lump sum, according to the report of an inspector.. I take the case of a State Government assisting an industry upon a principle not very different from that of the new clause I have submitted. Some years ago, owing to a drought, many farmers in New South Wales were unable to obtain seed wheat. The Government supplied them with seed wheat, but they asked for the repayment of the value of that wheat when the farmers were again prosperous.
– The State did not ask for their farms.
– The farmers had to pay back every penny of the value of the seed wheat supplied to them. It was a purely business proposition, and the fanners were glad to take advantage of it. It enabled them to continue their business, and they accepted the assistance offered, on the condition that whether the seed wheat supplied produced crops or not, they must return the value of it to the State. If that could be done in the case of struggling farmers, .surely some return might be expected from rich companies -to whom a bounty is paid, and we can all recognise the prospect of rich profits from the discovery of oil. I welcome this Bill, because I recognise the importance to the Commonwealth of the production of oil. I have not uttered a word in opposition to the principles of the measure, nor have I said anything which would lead the Honorary Minister (Senator Russell) to think I am en- deavouring to delay its passage in any way. Still, I believe that in handling the people’s money the obligation is upon it, to exercise as much discretion as we should display in handling our own money ?
Question - That the proposed new clause be inserted - put. The Committee divided.
Majority . . . . 12
Question so resolved in the negative.
Proposed new clause negatived.
Clauses 6 to 9 agreed to.
Schedule agreed to.
Preamble and title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Bill returned from the House of Representatives with amendments.
Motion (by Senator Millen) proposed -
That the Senate do now adjourn.
– May I ask the Leader of the Senate if he will indicate the Government business which it is hoped will be put through this week? I do not think I am making any unreasonable request. I understand that another taxation Bill, the effect of which is to penalize all young’ men who have not enlisted, is likely to come along.
– I am unable to identify the Bill by the description given by the honorable senator.
– Then I will make a further explanation. This Bill, I understand, was introduced in another place to-day, and was withdrawn for more mature consideration. Is it likely that we will get it this week?
– Has the Vice-President of the Executive Council obtained any information with respect to a question I asked earlier in the day relating to cable news from the Imperial Government on the question of the export of evaporated apples?
– I have ascertained that cable news has been received from London intimating that the Imperial authorities are not able to accept our offer of dried apples.
With regard to the question asked by Senator Gardiner, it is impossible for me to say what business will be concluded this week, but I can tell the honorable senator what business the Government is desirous of passing before the Senate adjourns.
– You have no ‘desire to finish up this week ?
– We have every desire, but, unfortunately, desire and anticipation do not always go together. There is the Defence Bill, returned from another place with amendments, and the consideration of that message will be taken to-morrow. In the other Chamber there is the Bill dealing with the repatriation of Australian soldiers, which may or may not be returned to the Senate with amendments. There is ahvo a small Audit Act Bill, which, I understand, contains merely formal amendments, and a Bill to amend the Income Tax Assessment Act, which, I presume, is the measure referred to by Senator Gardiner.
– The one I refer to proposes to tax people without any income.
– Then I venture to say that that Bill represents a distinct advance in the science of taxation.
– Can the Minister say if that is the Bill referred to by Senator Gardiner?
– So far as I oan see from a perusal of the Government measures, it is the only Bill which seems to approach in any way that referred to by the Leader of the Opposition. There is another. Bill to deal with bounties for wood pulp and phosphate rock. This, I believe, is the list of business now to be dealt with before the Senate adjourns for a brief holiday. ‘ How much of this can be disposed of this week I cannot say; but in view of the tendency of this Chamber to discharge its duties with, some rapidity, it is not likely that any delay will occur here, but I have some doubt as to whether the other branch of the Legislature will conclude its business this week.
Question resolved in the affirmative. - Senate adjourned at 10.54 pin.
Cite as: Australia, Senate, Debates, 19 September 1917, viewed 22 October 2017, <http://historichansard.net/senate/1917/19170919_senate_7_83/>.