10th Parliament · 1st Session
The President (Senator the Hon. Sir John Newlands) took the chair at 3 p.m., and read prayers.
The following papers were presented: -
Anglo-Egyptian Treaty - Documents relating to the proposed Anglo-Egyptian Treaty of Alliance and Friendship.
Financial Agreement between the Commonwealth and State Governments. - Correspondence between the Prime Minister and the Premiers of the States.
Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. - Nos. 3 and 4 of 1928 - Amalgamated Postal Workers’ Union of Australia. No. 5 of 1928 - Commonwealth Storemen and Packers’ Union.
Defence Act - Royal Military College of Australia - Report for year 1928-27.
Northern Australia Act -
Central Australia - Ordinance No. 2 of 1928- Brands.
North Australia - Ordinance No. 2 of 1928 - Brands.
asked the Leader of the Government in the Senate, upon notice -
If so, will the Minister supply, for the information of senators, a statement setting out -
Senator Sir GEORGE PEARCE.The answers to the honorable senator’s questions are as follow: -
asked the Minister representing the Prime Minister, upon notice -
What is the number of males and females respectively who are employed in (a) the Public Service of the Commonwealth, (b) the Commonwealth Bank?
Senator Sir GEORGE PEARCE.The information is being obtained.
asked the Minister representing the Minister for Home and Territories, uponnotice-
Senator Sir WILLIAM GLASGOW The answers to the honorable senator’s questions are as follow: -
asked the Minister for Defence, upon notice -
– Inquiries will be made, and the honorable senator will be furnished with a reply as soon as possible.
Offer of Country for Research Work
asked the Leader of the Government in the Senate, upon notice -
What were the reasons which actuated the Government in declining to accept the offer by the Queensland Government to place at the disposal of the Council for Scientific and Industrial Research on area of first-class sheep country in Central Queensland for the purpose of assisting in scientific investigation of the problems affecting the sheep industry ?
– The matter was thoroughly investigated by the Council for Scientific and Industrial Research, which looked very thoroughly into the possibilities of utilizing the suggested area at Saltern Creek for a research station, and to that end consulted not only its own technical officers, but also many experienced men in Queensland, including the Council of the United Graziers’ Association. The following reasons actuated the Government in arriving at its decisions : -
Various other reasons against the acceptance of the offer were submitted by the Council for Scientific and Industrial Research, which advised that, having in view the limited possibilities of real usefulness of the station, the cost of stocking it and the cost of equipping it and staffing it for investigational purposes, it would be impossible to justify a recommendation to spend thousands of pounds on the area in question. Though unable to accept the offer, the Commonwealth Government very highly appreciated the action of the Queensland Government in the matter.
Motion (by Senator Graham) agreed to -
That two months’ leave of absence be granted to Senator J. Grant on account of illhealth.
Motion (by Senator Foll) agreed to-
That two months’ leave of absence be granted to Senator P. P. Abbott on account of urgent public business.
Debate resumed from 7th March (viae page 3594) on motion by Senator Crawford
That the bill be now read a second time.
– In continuing the debate on this subject, which has been very fully discussed from time to time, I wish to direct attention to certain phases of our fiscal policy which require earnest consideration. Senator Findley, when speaking last night was very emphatic concerning the necessity of. making Australia a selfcontained and self-reliant nation, and even went to the extent of declaring that he favored the prohibition of imports I once held very strong views concerning the necessity for imposing very high customs duties, and of even, in some instances, prohibiting the importation of goods which could be manufactured in Australia; but the position has altered to such an extent during recent years that we have now to consider whether the imposition of higherduties may be of injury to Australia.The way to make Australia self-contained, according to Senator Payne’s interpretation of Senator Findley’s remarks, is to live within ourselves. I do not know whether Senator Findley accepts that . interpretation; but it is well known that no nation can live solely unto itself. It is a nation’s exports which enable it to prosper. Under ourprotective policy a large number of secondary industries have been established, and it is pleasing to know that some of them have been able to make progress. The most disquieting factor, however, is that under our present fiscal system, which provides such substantial protection, these industries have not reachedthe stage at which they can profitably produce for export. I am an ardent protectionist, but I cannot overlook the fact that with the small population we have it is impossible for our secondary industries, which cannot export at a profit, to successfully continue and expand while dependent solely upon the home market. Notwithstanding that our supply of practically all the raw materials we require in production is unlimited our market is limited to a population of about 6,000,000. Honorable senators opposite who are opposed to immigration take a very narrow view of the situation. They do not realize that with a much larger population the prospects of our secondary industries would be considerably improved.
– To which particular secondary industries is the honorable senator referring?
– I am referring to our secondary industries generally which cannot profitably export their products owing to the high cost of production and the long distances which separate them from the markets of the world.
– We have not yet overtaken thehome market.
– Some commodities are being produced in excess of the local demand and cannot be profitably sold overseas. The industry in which the Minister is directly interested is an example.
– The honorable senator is referring to a primary industry.
– - Honorable senators are aware that rich sugar lands are lying idle in northern Queensland because the industry cannot be developed as it should be. Australian sugar cannot be sold overseas at a profit. Is there a secondary industry which can profitably export its products?
– We have not yet overtaken the home demand.
– There are many industries which ought to be producing for export. I am -a protectionist, but I cannot understand how our secondary industries can expand unless our population is increased. The Tariff Board; which has conducted many important investigations, has complained that awards of the Arbitration Court have interfered with the work which this Parliament has done in protecting industries.
– The Tariff Board should mind its own business.
– The Tariff Board has directed attention to an important fact. The employees engaged in secondary industries go to the Arbitration Court, as do other employees, with the result that when their wages are increased or their working conditions improved the higher duties imposed for the protection of an industry are rendered ineffective. I do not blame the employees for approaching the court; that is their right. But I am anxious to know how our secondary industries are to continue under our present system. I do not think any one wishes to interfere with the wages paid to and the conditions enjoyed by Australian workmen, but it seems to me that we cannot go on increasing customs duties indefinitely. We are simply proceeding in a vicious circle. With other honorable senators I am anxious to solve this difficult problem, and I believe that the remedy lies in the opening of our doors to the. introduction of more migrants from overseas. If honorable senators opposite surveyed the situation in its true perspective, they would realize that additional population will not jeopardize the interests of that section of the community, which they claim to represent in this chamber.
Recent statements by the Development and Migration Commission indicate that that body is cognisant of the difficulties that confront our primary producers, and particularly those engaged in the dried fruits industry. I remind honorable senators that ten years ago the late Senator Senior predicted the difficulties which now beset producers of dried fruits. He urged that unless adequate measures were taken, to find a market for their products, the growers would be faced with insolvency. Unfortunately the world’s market is now supplied, and primary producers in the industry are in great difficulties. This problem also touches the River Murray waters scheme, on which many millions of pounds have been expended by the Commonwealth, New South Wales, Victoria, and South Australia. As a protectionist, I am anxious to find a solution for all these difficulties, but I fear that if we adopt the expedient of reducing production costs by cutting down the cost of living, it will merely be a case of the survival .of the fittest. Actually, no one in Australia wishes to see a lowering of our present standard of living.
Only two of our primary industries are able to stand alone, and one of them is in a precarious position. But for the high price that has prevailed in recent years for wool, Australia would be in financial difficulties. The outlook for wheat is not so favorable. Production in Canada is expanding, and if, within the next few years, the peasantry of Russia produce on any thing like the prewar scale, Australian wheat-growers will be shut out of the world’s market, owing to the high cost of production in this country. In recent years there has been an astonishing development in wheat production in Western Australia, the total for this year being estimated at 35,000,000 bushels. What will happen to the wheat-growers in that State if, as is anticipated, production in Canada and Russia expands to any appreciable extent? Butter, another important primary industry, is not in a satisfactory position. It is estimated that as the result of the Paterson scheme, consumers in Australia are penalized to the extent of 2d. per lb. on all butter exported, and I was informed recently by a member of the butter board in Queensland, that the people in that State have to pay 5d. per lb. more for their butter than prior to the establishment of the Queensland pool for export. How long will the people of Australia be able to support these artificial aids to production?
The timber industry is one in which we are all interested. Although a representative of a timber producing State, I can not conscientiously vote for higher duties onoregon, because of the important part which that timber plays in all constructional work throughout the Commonwealth. Nearly all modern buildings are now erected in concrete, and millions of feet of Oregon timber are required for framing and boxing. Practically the only timber employed in modern buildings is that required for doors and fittings; the floors for the most part being of concrete and the window frames of iron. If higher duties are imposed on oregon, building costs, even in regard to dwellings, will be affected. No Australian timber is as satisfactory asoregon for concrete boxing. As a matter of fact, Australian softwood, because of the shortness of the grain, is rarely used as beams. Whereever possible, iron, one of the products of the secondary industries, takes its place. Even the ordinary lintels in dwellings are now in concrete. The following statement which appears in the last report of the Tariff Board, sums up the position. Referring to the timber industry in Queensland, the Board states: -
Queensland once occupied a position unique among the States of the Commonwealth in that it possessed, within its boundaries, a wealth of timber unequalled for variety and for value. In addition to great forests of hardwoods, there once existed large forests of softwoods, as well as areas rich in valuable and rare furniture woods. Owing to reckless prodigality and an almost utter lack of any attempt at re-afforestation, the situation in this State is fast becoming serious. From the Queensland Forest Service Report for year ended 31st December, 1922, it appears that - “At this date Queensland is within clear sight of the end of its important timber resources In five years’ time there will, be scarcely a maple tree outside the State forests, and upon the State forests the maple resource is so limited that sale must be restricted considerably.”
Fortunately, it is definitely established by fruitful results, indeed, that a now maple crop may be produced by the forester but in the meantime the community must be content with a severe rationing of its most valuable cabinet- wood. The samemay be said almost of hoop and Bunya pine. The original 2,500,000 acres of this most valuable coniferous wood have dwindled to 1,000,000 acres, capable of yielding only 40,000,000 super. feet of timber per annum, as against the present demand for 120,000,000 ‘super feet, now being satisfied from farm lands in process of clearing for cultivation. Of hardwood it may be said that the chief resources of Queensland went with the farming development along the north coast line, and in five years’ time the Forest Service expects to have to go out 50 miles to get ironbark girders.
The timber is cut down to make way for settlement. I have seen millions of feet of some of the best timber in Australia, burned, because it did not pay to transport it to market. This is a serious problem. The report continues -
The red cedar resource is now restricted to Bungella Plateau, of allplaces in Queensland the only one free fromthe red cedar twig borer, apest which renders impossible the reproduction of red cedar forests. Of kauri pine the southern resource is utterly gone. In North Queensland a considerable stand-still exists. In no other country in the world are so many valuable timber species collected together as in the remnant forests of Queensland. It is the duty and the profit of Queensland to conserve and to farm these remnant forests to a greater productivity.
The following is an extract from “ The State’s Saw-mill Output, 1914 to 1923, Queensland “, page 28 -
The business of the Forest Service in North Queensland should be - and, undoubtedly, in the future will be - on a scale of vastly greater magnitude. In this region there are probably 5,000,000 acres of the sub-tropical forest containing not less than 20,000,000,000 super. feet of cabinet woods, sufficient to supply Australia’s needs in perpetuity and leave a margin for export to Europe and the United States of America. Unfortunately, however, a state of ruinous congestion exists in the timber trade of the north, and, despite the clamour from the south for supply, supply cannot be assured. Meanwhile, prodigious waste ensues.
Local government has been partly responsible for that state of affairs. The Tariff Board stresses the necessity to preserve our softwoods, but the Queensland Government nullifies the efforts of the Commonwealth Government. The report of the Tariff Board also says : -
The result as far as softwoods are concerned is that according to this witness “ the average royalty on pine throughout Queensland is much greater than the rates of duties paid on softwood timbers imported.”
Whenever an additional duty is imposed on imported timbers, theQueensland Government increases its royalty charge and scoops thepool. According to another witness
The royalty is an appreciable charge on the Queensland timber industry, and in regardto nearly half the output neutralizes to some extent the protective incidence of the Tariff.
– Surely the honorable senator does notsuggest that hoop pine is a substitute fororegon!
-Oregon is used in work for which no other timber is suitable.
– The royalty on hoop pine has no connexion with the duty on Oregon.
– Queensland pine can be used for frames, sashes and doors.
– Those purposes do not represent the bulk of the consumption of Oregon.
SenatorCrawford. - Why should the timber industry in other States be penalized because of a misdemeanour of the Queensland Government?
– It is not a question of misdemeanour. The Tariff Board has said that no duty on softwoods will prevent the importation of Oregon, because that wood is necessary for certain work. Therefore we are merely placing a tax on industry.
– Why are the importers so strongly opposed to the increased duty?
– They are afraid that it will interfere with their trade. We are increasing the cost of buildings in which Oregon must be used, and indirectly the dwellings of the workers are affected. I have always held strongly the opinion that every worker should own his home and that the cost should be kept down as low as possible. All these taxes are increasing the cost. In Queensland timber is used in the majority of houses; but bricks are now beingresorted to, because the difference in costis so slight and the maintenance of abrick house is not nearly as great as that of a wooden house. Another reason is that the impression that the climate ofQueensland is not suitable, is gradually being dispelled. There is another aspect of the timber industry that requires consideration. At the present time millions of feet of tops are wasted, when they could be used with excellent results for cases.
– Why is that wood not used for cases ?
– Because imported timber is used. It is well known that Queensland pine is one of the best timbers that can be obtained for butter boxes. I am quite willing to support any proposal that will prevent the wastage of the tops. Unless the Minister brings forward some good argument in favour of the increased duties I feel that I must oppose them, notwithstanding that I desire to assist the timber industry, particularly in the direction of preventing the waste which now goes on.
.- I shall not speak at length at this stage; but before the bill gets into committee I desire to refer to one or two matters affecting Queensland in’ particular. The costs of production in Australia have risen to such an extent that it is practically impossible for some industries to dispose of their products. It was recently my privilege to visit the Lustre Silk Hosiery Factory in Sydney, an establishment which manufactures high class silk and artificial silk hosiery. When that factory was established the price of imported hosiery was very much higher than it is to-day. As a direct result of its competition the price dropped considerably. I was pained to see, during my visit to the factory, that a large proportion of the extensive machinery, which had been installed, was lying idle. Production costs had increased so greatly that the company found it impossible to compete with imported hosiery. Another factor which has militated against the industry has been the unfavorable position with regard to exchange, which has given an advantage to countries which are competitors in the hosiery industry.
– Did not the honorable senator say that the establishment of the Australian factory had reduced the price of hosiery?
– Yes; but more recently increased production costs and the unfavorable position in relation to exchange has had an adverse effect upon the company.
– The exchange has not altered since the company commenced operations.
– Legislation passed by State Labour Governments has so increased production costs that the company to which I have referred and other Australian companies manufacturing similar articles now ask for additional protection. The difficulty is that if their request is granted, further industrial legislation will probably be passed by the State Governments which will nullify the advantage of the increased duties. Queensland does not benefit from the tariff a 3 do some of the other States, for the reason that legislation passed by Labour Governments in Queensland during the last eleven or twelve years has prevented the investing of money in secondary industries in that State. The solution of the difficulty appears to be the development of a greater home market. That can only be accomplished by an increase of population. As an example of what can be done by good organization and the manufacture of articles of good quality, where there is a good home market, I desire to point out that recently the price of Australian-made motor tires has been considerably reduced.
Senator Findley said that unless we went in for extensive developmental schemes it would be impossible to absorb more immigrants, because Australia was already producing more than she could consume or export. He referred particularly to the sugar industry. The problem of the over-production of sugar would readily be solved if there was greater cooperation between the Commonwealth and British Governments. Sugar entering Great Britain pays a duty of £11 13s. 4d. a ton. It is true that preference is granted to sugar grown in the dominions ; nevertheless the duty is still very high, with the result that the price of sugar in England is about the same as it is in Australia. As a result of this season’s crushing there will be thousands of tons of sugar more than Australia can consume. This over-production will have to be exported at considerable loss. The producers will have to bear the loss proportionately. If the British Government removed the duty on sugar grown in the Empire, Australia could yet rid of the whole of its surplus product, the whole of the rich idle” sugar lands of North Queensland could be thrown open for cultivation, our sugar yield would be increased enormously, provision could be made for absorbing thousands of British immigrants, and all our difficulties in regard to sugar production would be removed.
– Is ‘the British duty on sugar imposed for revenue purposes?
– It is,- I believe, a purely revenue producing duty.
– It is imposed partly to encourage the production of beet sugar in Great Britain. The British Government;- pays a bounty on beet sugar produced in Great Britain.
– I-j admit that the British duty on sugar serves a double purpose, but even if the people of Great Britain succeed in developing the beet sugar industry to any considerable extent I do not think they anticipate ever being in a position to supply their own requirements. The duty on sugar is very large for the purpose of obtaining revenue.
– It would be difficult to replace the revenue lost by removing the duty.
– Great Britain and Australia are now co-operating with a view to the absorption of British migrants here. Great Britain cannot provide employment for the whole of her people and is now paying away millions of pounds annually in unemployment doles. The removal of the duty on sugar would serve a double purpose. It would enable thousands of British immigrants to be settled in North Queensland on one of the most fertile spots, in Australia, thus assisting in developing,’ ‘ the migration scheme and would relieve Great Britain to some extent of the necessity for paying doles to unemployed. The amount that would be saved in this way should compensate for any loss”’ cif revenue due to the removal of the duty on sugar grown in the Empire.
Figures have been carefully compiled relating . to sugar production in the Empire. It is hoped that in the not far distant future a conference of those vitally interested, in growing sugar in the dominions will be -held with a view to asking Great Britain to give preference to British grown sugar. .Germany and other countries interested in the production of beet sugar and other countries growing sugar have formed a combination for the purpose of improving their sugar price and this will mean that the cost of this sugar will be greater to the United Kingdom. Great Britain has a unique opportunity to do something practical in the way of building up a sugar industry within the Empire; not in Australia alone, but also in other parts of the dominions.
– The combination the honorable senator refers to is reducing production and that is in the interests of Australia.
– Yes; they are also faced with over-production. But ours is a mere bagatelle compared with the total quantity of sugar consumed in the British Empire, and when we realize the large quantity of foreign grown sugar that enters . Great Britain, there does not seem to be any reason why the duty now imposed on our sugar should not be very considerably reduced if not removed altogether.
– Great Britain already gives a preference to dominiongrown sugar.
– That is so, but the concession is not sufficient to allow us to get our sugar into the British market at the price we should like to get for it. I should like to see all Empire-grown sugar admitted into Great Britain free of duty. The loss of customs revenue would be more than offset by the additional development that would take place throughout the Empire, and by the fact that the dominions could absorb so many hundreds of thousands of those British workers who are now unemployed.
Queensland has practically- a monopoly of the pine forests of Australia, but, unfortunately, owing to the neglect of the Queensland Forestry Department in not pursuing a policy of reafforestation and conservation, the saw-millers of Queensland cannot secure sufficient local softwoods for their mills. A few weeks ago an advertisement appeared in the Queensland Government . Gazette, intimating that certain areas were to be thrown open for timber cutting; but I suppose the total quantity of timber that would thus be made available, would not keep the local mills occupied for more than three days, and the chances were at the time that no further areas would be made available for another month. If the big sawmills in Brisbane had 1:6 rely on the local forests to keep them going, they would have to close down altogether, or work for only a few days a month. At the request of a friend of mine, who is a big saw-miller in Brisbane, I had a look at one of his mills, where he employs a large number of hands. His mills keep going all the year round, but the greater portion of the logs which are being sawn there are
Oregon. If it were not for the fact that this gentleman was importing these big logs of Oregon, the majority of the men in his mill would be thrown out of work. This also applies to many sawmills in Australia. The logs that could be secured from the local forests would not last any time.
– What about using hardwood?
– There is a considerable quantity of hardwoods in Queensland, but for a long time now the market for them has not been satisfactory. I should like to see our hardwood mills all working steadily and doing well. I am interested in one of them, to my sorrow, but some of the imported softwoods have taken the place of our hardwoods to such an extent that I do not see any possibility of people reverting to the use of hardwoods until it is no longer possible to get softwoods at any price. I am very sorry to have to say this. My remarks, of course, do not apply to our wonderful furniture timber in the north of Queensland; but this is being rapidly cut out.
– Repeal the coasting provisions of the Navigation Act and Tasmania, will send Queensland plenty of hardwoods.
– It might interest the honorable senator to learn that it .costs more to convey our timber from Cairns to Brisbane than it does to bring timber from Baltic ports to Sydney. That is one of the greatest difficulties our timber industry has to face.
As Senator Reid has pointed out, the Queensland Forestry Department has been the principal transgressor in the past, and has been largely responsible for the present shortage of hoop pine. Thousands of pounds paid in royalties have been simply thrown to the winds by the State Government. ‘ The following table shows the amount .collected by way of royalties, and the1 amount spent in the administration of the Forestry Department, inclusive of reafforestation and every thing else:-
In five years the Queensland Government actually made a profit of £548,626 out of its forests, and wasted it on various Government enterprises. The figures for 1925-26 and 1926-27 are even worse.
– The honors able senator’s figures show that about 50 per cent, of the amount paid in royalties was put back into the forests.
– Does the honorable senator contend that it is a fair proposition to spend only 50 per cent, of the royalties in that way ? To my mind every penny of the money received in royalties should have been spent in reafforestation and administration.
-Th amount spent by the Queensland Government compares favorably with the amounts spent on forestry development in other States.
– The Commonwealth Government is embarking on a forestry campaign that will cost thousands of pounds, yet it is receiving in revenue practically nothing .compared with the amount received in royalties by the Queensland Government. In Tasmania, and almost every other State, an endeavour has been made to do something for reafforestation, although the various governments have not been in the favourable position of the Queensland Government, which can get from royalties all the money it requires for the purpose. The other States have embarked on effective campaigns of forest conservation and development. The Queensland Government has under its system of silly State enterprises been using our great natural forests as a taxing machine. It has not returned to the forests any portion of the assets which have been withdrawn.
– It is eating up the capital.
– Yes, and not replacing it. An extract from the official report of the Provisional Forestry Board of Queensland, issued by the Department of Lands, for the year ended 30th June, 1926, contains some very serious comments concerning the fact that the softwoods of Australia are rapidly becoming exhausted. I wish to place on record the following extract from a report issued by that department -
The essential features of the forestry position of Queensland at this opening stage, however, is that an aboriginal insufficiency of building softwoods exists for the needs of the civilized state. It is true that compared with our southern neighbours we are relatively rich in the possession of important hillside forests of hoop pine in the south, and kauri in the north, whence have come our supplies of building softwoods in the shape of hoop and bunya, pine, and. of kauri pine, supplemented by lesser supplies of the harder and more brittle cypress pine of the south-west. These assets, however, were always inadequate to the needs of a colony capable of carrying a population in 60 years’ time of 3,000,000 souls, and no amount of husbanding could possibly have overcome the original smallness of the native coniferous timber lands.
The Department of Forests does not make any apology for not husbanding its resources, and is not excusing itself for its dilatoriness in the past. The report continues -
In the beginning of our settlement we possessed natural softwood assets measuring in volume between 3,000,000,000 and 4,000,000,000 feet. Some of these assets have been wasted in pioneering land settlement processes, but from 1883 to 1925 we actually used up for development work 2,450,000,000 super, feet of hoop and bunya pine saw logs, plus 600,000,000 super, feet of kauri and cypress. From a consideration of forest valuation surveys made over the last fifteen years, it is estimated that our hoop and bunya pine reserves at 30th June, 1925, stood at 1,070,000,000 feet of saw logs on Crown forests, and 230,000,000 feet on private areas.
The departmentgoes on to point out that there are at present 257 mills in Queensland, a large number of which are depending upon supplies from the State forests, and that these will soon be in a serious position if they have to depend upon that source to enable them to continue working. The Forestry Commission of Queensland has stated quite candidly that the sawmillers will have to look elsewhere for their timber supplies. They cannot rely upon the forests of Queensland, because sufficient timber is not available theretokeep them working. The commission also states that if it embarked upon a policy of cutting out the forests there would in 20 or 30 years be no pine timber left in Queensland. They have now undertaken a system of rationing, which assists in husbanding the forests; but which places the timber millers in that. State in a very unfortunate position. If they are unable to obtain sufficient from the State forests to keep them in operation, they must look elsewhere for supplies. I am not directly objecting to the imposition of a duty on Oregon, shiploads of which I have seen coming into our Australian ports.I think, however, that it is a pity that we should receive such large consignments of sawn oregon and baltic when the sawing could be done by many of our mills which are not working full time. It would be much better to restrict the importation of sawn oregon, and allow junk timber to come in free.
– What would be the result ?
– I know the honorable senator is assuming what the result would be.
– But it is by no means certain.
– Australia has been a very good customer of those who have been exporting softwoods to Australia. I presume Senator Greene is inferring that if we did not purchase consignments of sawn softwoods, the exporters would not supply us with junk timber.
– Oh, no!
– The point I have raised has been mentioned in many quar ters when this phase of the matter has been under consideration. Shiploads of junk timber, which have been unloaded at Queensland ports, have been sent to the sawmills, and have enabled them to continue in operation. If it can be shown by honorable senators, or by the Minister when he is replying, that the duties on Oregon and baltic timber, or other softwoods, which have now been in operation for four -months, have been of benefit to Australia, we may be justified in supporting the higher rates. We should like to know if the impositionof these duties has enabled some of our hardwood mills, which have been closed, to be re-opened, and that renewed activity in the hardwood timber industry has followed. We have had some particulars from honorable senators representing Tasmania, concerning the position in that State; but we have not been supplied with sufficient information to enable us to determine whether the duties proposed are necessary.
– Honorable senators have received communications showing that as the result of the imposition of higher duties, employment has been found for idle men.
– That information should have been supplied by the Minister. Australia is in a very serious position at present in the matter of softwoods. We should be planting trees instead of cutting them down. That point was emphasized by the Minister for Defence (Senator Sir William Glasgow) when introducing the Forestry Bureau Bill, under which a School of Forestry has been established in Canberra.. Perhaps the Minister will say what has resulted from the imposition of a duty of 4s. per 100 super feet.
– The restriction on imports will quicken the demand for local timber.
– It depends upon the extent to which hardwoods can be used in place of softwoods. . Even a very high duty would not prevent the use of softwoods for some classes of work.
– One effect of the imposition of this duty is that 22 sawmills in Tasmania have been re-opened.
– That information should have been supplied by the Minister when he moved the second reading of the bill.
– A more appropriate time to give the information will be when the item is under discussion in committee.
– If honorable senators are supplied with such information at the outset, it is much easier for them to discuss the general principles of protec-tion. I have briefly outlined my views on several phases of the Government’s proposals, and shall have an opportunity of dealing in detail with some of the items when the schedule is under consideration.
– A tariff debate in the good old days was a battle between free traders and protectionists; but we have now reached the stage where we can say that the battle for protection in Australia has been won. Although we still hear freetrade arguments from various quarters, I believe the great bulk of the people of Australia are now convinced that the policy of protection has come to stay. I congratulate the Government upon the introduction of this schedule. A tariff can never be entirely satisfactory because changes must be made as circumstances alter in consequence of the development of new industries and of existing industries engaging in new phases of manufacture. This makes it essential to review a tariff schedule from time to time and to make such changes as we consider necessary. Although I think there are one or two directions in which the Government might have acted differently from what is proposed, where the duties are not as high as I should like, I believe it has gone as far as it reasonably could. In dealing with the tariff the powers of the Senate are very limited, and consequently the opportunities for introducing new items and effecting amendments, are almost negligible.
There is one matter to which I earnestly direct the attention of the Government. I refer to the cotton industry which if properly handled should have very promising prospects in Australia, and in connexion with which the provision made by the Government has turned out to be wholly unsatisfactory. The cotton industry is at present assisted partly,, by the tariff and partly by a bounty. The clear intention of the Parliament and the -Government when it last imposed; duties on cotton, and provided for the payment of a bounty was to encourage the use of Australian cotton in our own mills. Owing to a variety of reasons which I do not intend to enumerate - it would be futile at the present time for me to do so - the arrangement has entirely broken down. It , was thought at the time that the local spinners would be able to use Australian cotton in their mills, and that they would absorb the whole of the Australian crop. Though mills are erected in Australia with all the machinery necessary for dealing with a great deal more than the last cotton crop in Queensland or the crop which we are likely to have this season - I hope it will be double that of the previous year*–hardly a bale of the Australian production will be used in the Australian mills. I do not wish to go into the detailed reasons for this unfortunate state of affairs, though it would be easy for me to do so as I have the matter at my fingers end. All I ask, at this juncture, is that the Government shall give the matter its earnest consideration in the near future with a view to recasting the present tariff and bounty provisions. Very slight alterations will make all the difference in the world to the position of the cotton growers, whose crop will then be used in Australia. Though this is important also from the point of view of the manufacturers, the alterations I suggest are more vital in the interests of hundreds of growers in Queensland. I am not a representative of the northern State in this chamber; but I am, as honorable senators are aware, intimately associated with the cotton industry, and I am glad to be able to say that during the last two or three years there has been, a considerable increase in the number of cotton growers in Queensland.
– Will the establishment of the spinning industry in Victoria relieve the position of the Queensland cotton growers? I understand that one or two mills have been erected in Victoria.
– No. As I have already explained, there are well equipped mills already in existence, yet owing to the manner in which the duty and bounty have been arranged, they will hardly turn a spindle.
– Cannot they obtain the cotton locally?
– Yes, but they cannot compete with overseas manufacturers. It is a rather alarming position, but I do not wish to go into the details at this stage. All I ask is that the Government shall look into this question carefully, and put things right. If that is done all the mills can then be profitably employed, and will be able to use the whole of the loca’l cotton crop. Perhaps honorable senators are not aware that the fact that our cotton is shipped overseas instead of being used locally makes a difference to the growers of about f d. lb. on their seed cotton, and since it takes 3 lb. of seed cotton to make 1 lb. of lint the total on a bale of 500 lb. means a great deal to the growers. I feel satisfied that it will be only necessary for the Government to order an investigation of the position to have it set right. Unless something is done we shall have to export practically the whole of the cotton produced during the coming season. This will mean a serious loss to the growers and it will entirely defeat what was clearly the intention of Parliament when it sanctioned the impositon of the duty and the payment of the bounty.
There is one matter in connexion with the schedule to which I invite the earnest attention of the Minister. Though it may appear to be a little thing in itself it involves a big principle from which it authorizes a departure in a direction that I believe to be. entirely wrong and dangerous. I refer to the item which deals with coffee. It seems to be a small matter, but I fear that, unless we watch our step in connexion with it we may become involved in many difficulties which we can easily avoid. 1 have never had the slightest objection to the preferential treatment given by Australia to the mother country. In a tariff which some years ago I had the honour to introduce in another place
Great Britain was given a greater measure of preference than had ever pre1viously been conceded by this Parliament. The principle embodied in that tariff, and which is carried a stage further in this schedule, is entirely justifiable internationally. In giving the Mother Country preferential tariff treatment we can look the whole world in the face without fear that any nation can take serious exception to our action. We have never departed from that principle except that whenever we have extended preferential treatment to other countries we have always done so on a basis of reciprocation. That principle is definitely laid down in all our tariff legislation, and prior to the introduction of this schedule it was always adhered to. We have always given Britain a perfectly free preference. That is to say, we ask the Mother Country for such preference as she may choose to give us; we do not bargain for it.
In our attitude to other countries we have always taken the stand that the tariff concessions must be reciprocal. This again is a perfectly safe international principle in regard to tariff legislation. No nation can take exception to the Commonwealth giving preferential tariff treatment to a particular country if, in return for that special treatment, we get a similar concession. If honorable senators will turn to the item dealing with coffee they will notice that there is a departure from this principle in the addendum to the item, which reads as follows: -
The articles specified in paragraph ( I ) of sub-item b, being the produce of any part of the British Empire, shall bo admitted under the British preferential tarin”.
This, as I have stated, is a departure from the basic principle to which I have alluded and which Ave have laid down in all previous tariff legislation. I question the wisdom of this course, because we shall not be able to show that the countries to which we give this preferential treatment are giving us special reciprocal treatment. Unless the Government can convince me that there is good reason for the item as it stands I intend to vote against it in committee, and will ask honorable senators to support me in requesting the House of Representatives to eliminate the addendum. If another place adopts the request it will be necessary to recast the whole item. I think it will be sufficient if this chamber indicates its desire to have the addendum eliminated. In all probability the item will be put right in another place.
Apart altogether from the principle which I have endeavoured to lay down in a brief form there is special reason why we should not depart from it in this particular item. In the first place “we should be chary about making such a departure when dealing with the tariff, which necessarily is international in its application. In this case the fact that we propose to give a certain measure of preference to India, possibly to Kenya Colony, Jamaica and one or two other dominions of the Empire will seriously hit a near neighbour of ours, Java. Honorable senators will recall that some time ago we imposed a duty on bananas, which are produced in the Commonwealth. There was a perfectly - good reason for our action then:.
– That interfered with our trade with Java’.
– Possibly it did, but Parliament approved of the duty on bananas, and, as I have said, there was every justification for it. The position is entirely different with regard to the item dealing with coffee in the schedule to this bill. It will seriously interfere with o’ur trade with Java.
– We buy from Java three times as much as Java buy? from Australia.
– Chiefly oil.
– Is that an adequate reason for the alteration of the item? I do not think it is. Our principal imports from Java are those commodities which cannot be produced in Australia. After kapok, oil, and tea, which we do not produce in Australia, our chief import is coffee. Iri return Java buys from ns a great deal of our primary products, and as a matter of fact is one of the few countries to which we are able to sell certain of our secondary products. Java, I remind the Senate, has always’ given to Australia exactly the same tariff treatment that she gives to her mother country. If the Minister examines the statistics, which I have no d’oubt are in his department, he will find that the duty on Australian butter sent to Java is the same as that levied by the government of the Dutch East , Indies on butter from Holland. We are almost the sole supplier of that butter. They buy from us also a large quantity of flour, and some meat, biscuits, jams, and canned fruits. I cannot see any reason why we should imperil that trade by giving Java a slap’ in the face because of something out of which we get no return. If we were going to derive a benefit there might be some justification. Why should we cut off our noses to spite our faces ? I cannot conceive of any good coming out of this action, nor can I see any specific reason for it; but I do apprehend a great danger to our trade in the Dutch East Indies if we insist upon taking it. Having made my protest I shall endeavour, in committee, to give practical effect to it. Apart from that I shall support the proposals of the Government.
With regard to the much discussed question of timber, I merely wish to say that, for reasons which are obvious when one examines the peculiarities of the industry, it is not possible to frame a satisfactory tariff in relation to it.’ One could take any set of facts and argue a perfectly good case for both a duty and no duty. I am prepared to make out as good, a case for one side as for the other. We’ must, import a certain quantity of softwoods, particularly Oregon. If we made the duties mountain high that position would not be altered. There are various uses in respect of which there is no substitute for Oregon, certainly in Australia and probably throughout the world. What will happen when the Oregon supplies fail can merely be conjectured. It is equally true, however, that in Australia Oregon is put to a number of uses for which our hardwoods are eminently ‘suitable. It seems necessary, therefore, to get back to. first principles and do that which will ultimately spell the greatest good for the greatest number. Starting from those premises I say that the greatest amount of good will accrue to Australia by keeping our money within our own borders and depending upon our own resources. I have never been able to understand the argument of those who say that we should leave our’ iron deposits undeveloped and purchase abroad our requirements of that commodity. If we were to adopt such a policy it would be logical to allow our fields to remain un tilled and buy abroad all the foodstuffs we required. Scattered over a large area in Australia is a vast quantity of timber that is eminently suitable for many purposes. I frankly admit that the prevailing industrial conditions, some of which have been brought about legislatively, and others ‘by force majeure, are responsible for a state of affairs which makes it extremely difficult and costly to produce a commodity like timber from our own hardwood forests. There is not a definite case on either one side or the other in regard to the tariff on timber, but the balance of the argument is in favour of using as far as possible what we have within our own borders. I do not refer to those uses for which a soft wood with the peculiar characteristics of Oregon is necessary. But as everybody knows there is hardly a frame of an ordinary wooden cottage in the erection of which oregon is not used. It cannot be contended that our hardwoods are unsuitable for that class of work. They are not subject to attacks by white ants to the same extent as oregon, and if faithfully put together, they make a better job. I intend to support the proposed limber duties.
I have brought under the notice of the Government two matters that I regard as of first class importance, -and I hope they will be given earnest consideration. I refer to the re-arrangement of the duties and bounty connected with the cotton industry, so that we may make use of what we produce and keep our spindles at work, and the proposed preferential duty on coffee. Unless the Government can give me a more solid reason than sentiment for the alteration of the coffee duty, I shall endeavour at a later stage to have that item amended.
– I have noted with pleasure the generally favorable tone of the debate towards the pro’posals of the Government; but a few points have been raised which call for a reply.
Senator Ogden referred to what he termed the pushing of the bogey of protection too far, with a consequent undue swelling of the population of the cities.
I am afraid that when the honorable senator expressed that opinion he overlooked the revolution, which has taken place within the last 20 or 30 years in connexion with our land industries. Surely he is aware that for a similar volume of production our land industries do not require anything like the labour which they needed some years ago ! I have seen many calculations respecting the labour that has been rendered unnecessary as a result ‘of improvements in % farm appliances. Only quite recently I read the announcement that it is estimated that to-day on a farm of any size in America, one man is equal to an output for which 50 men were required at the beginning of the present century.
– Does not that argument apply also to all secondary inindustries?
– It applies to a greater or less extent to the whole of our land industries and also to some extent to our secondary industries. There is no doubt that the people of Australia are very much better off to-day than they were two or three decades ago. That increased prosperity, however, has not led to any greater expenditure upon foodstuffs. The expenditure upon the products of secondary industries has considerably increased. The people to-day are living in better houses and have a higher quality of furniture, and they are spending a great deal more on amusements. Consequently, the population of the cities, not only in Australia but in practically every country in the world - certainly every country with a European population - has increased. Similar changes have not taken place in India and China; therefore the argument of one honorable senator that the wheatgrower of Australia is in competition with the wheat-grower of India does not carry much weight, because, as a rule, the Indian wheat-grower confines his operations to a few acres, and the only implement ‘he uses is a small plough drawn by a couple of bullocks. No honorable senator has shown that remunerative employment for this excess city population can be found among our land industries. It has not been alleged that large areas of wheat lands in communication with markets, in any of the States are lying unproductive. I am aware that in very many of our agricultural districts sheep fattening is combined with wheat-growing. It is now the general practice in Australia to fallow wheat lands for a year or for two years; consequently millions of acres which, in other circumstances, would possibly be put under cultivation, are devoted to either the pasturage of sheep or fallowing.
In my second-reading speech I quoted from the report of the Director of Agriculture in the United States of America to the effect that with 3,000,000 fewer people engaged in agriculture in that country, a greater volume of land products is being made available. Agricultural production increased more rapidly than did population. In the report of the League of Nations, from which Senator Chapman quoted, it is stated that while the population of Europe had increased only 1 per cent, since 1914, the production of raw materials and foodstuffs in Europe had increased by 5 per cent., and that whereas the population of the world in the same period had increased by only 5 per cent., the increase in the production of raw material and foodstuffs was from 16 per cent, to 18 per cent. It is well known that no profitable market can be found for many of our land products. For that reason it is necessary to find employment in secondary industries for a large proportion of our population.
Senator Ogden referred to “ tin pot “ industries. Similar references to some of our industries having previously been made, I made it my business some months ago to inspect a number of industries in New South Wales, in the desire to see these “ tin-pot “ or “ backyard “ industries. But though I searched for some weeks I neither found nor heard of one of them. On the other hand I was impressed by the efficiency pf the management, the skill of the workmen, and the up-to-date nature of the plant in many of the factories I inspected. In a large engineering works in Newcastle I saw some expensive machinery which, I was informed, made it possible for five men to do work which before its installation required 21 men. On the day of my visit new machinery arrived to replace those machines which had been installed only two years previously. I was ‘ informed that the new machines would do twice the work of those they would replace. Not every large industry starts in a big way, nor is it only the large industries which are essential to our national life. Mr. MacRobertson, one of the wealthiest men in Australia, makes the proud boast that his business commenced in one of the rooms of his house.
Senator Chapman referred at some length to the International Economic Conference held in Geneva in May of last year. The honorable senator said that the conference expressed its views on the Australian tariff. Although I have read the report carefully I have seen no such expression of opinion. Anyone who peruses the report with an unbiased mind must conclude that the conference viewed matters solely from a European stand-point. While Senator Chapman was speaking I glanced at the report, and found that in one paragraph the word “ Europe “ appears four times, in the following paragraph three times, and in the next paragraph once. A few paragraphs further on in the report the word appears twice, and in other paragraphs it occurs from one to three times. The report, which clearly refers to European conditions, ‘stresses the fact that following the war there were 7,000 miles of new frontier in Europe, and that the number of European tariffs had increased from 20 to 26. It is true that the following paragraph does suggest that the conference had Australia in mind -
The desire to deal with the problem of excessive industrial capacity has usually led to an attempt to reserve the home market for home production by means of tariff barriers erected with a view to creating an independent national economy capable of producing under the protection of the tariff wall, an increase of invested wealth and a more satisfactory return for the work of the nation. This effort to attain self-sufficiency cannot hope to succeed unless it is justified by the size, natural resources, economic advantages and geographical situation of a country. There are very few countries in the world which can hope to attain it.
In support of his argument that our high tariff wall might raise antagonism in other countries, Senator Kingsmill instanced the effect that higher duties on bananas had had on our trade with Fiji. It is interesting -to see what actually did happen as a result of the increased duty on bananas. For the five years before the imposition of the increased duty our exports of Australian products to Fiji represented an average value of £368,219, whereas for the five years subsequent to the increased duty, the value of our trade with Fiji averaged £357,270, or £10,949 per annum less than for the preceding period. On those figures has been built the argument that the raising of the duty on bananas was a most disastrous proceeding.
SenatorKingsmill. - What about our trade with Java ?
– That trade has not diminished. Australia buys from Java goods to the value of over £6,000,000 per annum, and in return sells to Java goods valued at over £2,000,000 per annum.
– Will the Minister give us an analysis of the importations from Java?
– I shall give the approximate figures. The principal items are: - Hats, £3,000; cocoa, £4,000; coffee, £93,000; fibre, £99,000; rice. £3,000; kapok, £395,000; kerosene, £138,000; residual oil, £10,000; petroleum, £2,628,000 ; tea, £1,783,000 ; timber, £9,000; and tobacco, £45,000; a total of £5,210,000. I remind Senator Greene that the value of the tea imported from Java is about twenty times that of the coffee imported. Surely the honorable senator does not contend that the importation of coffee to the value of only £93,000 per annum isat all comparable with the importance of a friendly gesture to other branches of the British Empire !
– What is the gain to us?
– Our desire is to extend the trade between this country and the other branches of the Empire.
– Why depart from the preferential principle?
– It is considered advisable to extend that principle to other parts of the Empire in the hope that we shall receive reciprocal treatment. A start must be made somewhere. Our trade in coffee with Java is only a small proportion of our total trade with that country, with which we have always been on friendly terms, a state of affairs which we all hope will continue.
Senator Carroll made the rather astounding statement that the schedule before us is equivalent to an appeal by Australian manufacturers for assistance from the public purse. The honorable senator appears to be of the impression that only those who are engaged in the production of protected commodities benefit from our policy of protection. Surely he will admit that the benefits of protection are not confined to the manufacturers, but are shared by their employees and those in Australia who supply the raw materials. As a result of the production of this £150,000,000 worth of goods by our secondary and protected industries, the whole country is benefited and enriched. The honorable senator claimed also that the wheat-growing and wool-growing industries are carrying all other industries on their backs. A few weeks ago I journeyed through the Goulburn Valley district in Victoria, in company with an estate agent, who had an expert knowledge of the value of the land in the district. He told me that it was worth £20 an acre for wheat-growing, and, where lucerne could be grown, a good deal more for sheep raising, and I think it only fair to conclude that land in other localities must be equally valuable for those purposes. Certainly it could not be as valuable as I was informed it was for those purposes if the wheat and wool-growing industries were handicapped to the extent alleged by Senator Carroll.
– The honorable senator knows that if the people on the land did not work longer hours than those which are worked by people engaged in the industries of which he has been speaking this afternoon, they would not pay their way.
– I know as well as most people the difficulties encountered by the man on the land. I have been on the land almost all my life, first on a mixed farm in Gippsland, and latterly on my own property in North Queensland. I know that the life of the grazier or the agriculturist is not spent on a bed of roses. But I know that people engaged in other industries also have difficultiesto overcome, and I am satisfied that every branch of rural industry is enriched and not made” poorer by the flourishing condition of secondary industries.
Senator Payne seemed to be more anxious about the position of the British manufacturer than of those who are engaged in secondary industries in Australia. It is not right that Australia should carry the whole load of the disability now suffered by British industries.
– I am sure that I never suggested it.
– I do not say that Australia has gone too far in giving preference to Great Britain, but the preference we give to British manufacturers is about four times greater than the preference extended by Great Britain to the products of Australia.
– Will the Honorary Minister answer my challenge? I asked him whether this tariff schedule was not erecting a barrier that importers could not surmount.
– Protection is useless or fails in its purpose if it is not high enough to be effective. It is simply a waste of time to impose duties which will not accomplish the purpose for which they are framed.
Honorable senators are apt to overlook the fact that about two-fifths of our continent lies within the tropics. In the Northern Territory or Western Australia, north of a line drawn across Australia in extension, of the southern border of Queensland, I do not think there are 7,000 people. Senator Kingsmill has made reference to our tropical areas. I should like him to consider how we can establish industries in those areas which are likely to bring population to them.
– Will the Minister say something about the duties on timber.
– Timber duties are of importance to several States.. They are particularly vital to Tasmania, with its vast areas of forests, for the products of which there is only a limited market at the present time.
– The duties in the schedule before us do not represent the Government’s proposals. ‘
– The Government originally proposed increases of duties, but they were still further increased in another place, and, as increased, are just as much the Government’s proposals as were those which were proposed when the amended schedule was first tabled in another place.
– (By leave.) - I wish to make a personal explanation. Yesterday, when speaking on the second reading, I said that the Labour party in its protectionist policy was actuated by a desire to increase the industrial population and thus gain additional votes. That statement was .a little, ungenerous and unfair on my part. I am prepared to admit that quite a number of good Labour men are honestly actuated by the belief that a protectionist policy is the best for the country and is most likely to benefit it.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 4 agreed to.
Clause 5. (Saving.)
– The object of this clause is, I understand, to avoid the operation of the new rates of duty on butter applying to butter coming here from New Zealand as long as our reciprocal arrangement with that Dominion is in existence. Now that the Minister for Trade and Customs (Mr. Pratten) has gone to New Zealand I want to know if the Government proposes to review the existing reciprocal arrangement with the Dominion, particularly with regard to the duty on butter. Otherwise the dairymen of Australia will not be benefited by the in7 creased rates in the present schedule. Their only competitors are the New Zea-: land dairymen. The consensus of public opinion in Australia is that our butter producers are entitled to something more than’ they are getting, but any endeavour to secure higher prices for butter is upset from time to time by the New Zealand produce that enters Australia. I want to know exactly the general policy of the Government in regard to butter.
– Under the present reciprocal arrangement with New Zealand six months’ notice has to be given of any alteration in duty. Some time ago the New Zealand Government increased the duties on wheat and flour, but they could not come into operation against Australian wheat or flour for six months except with the consent of the Commonwealth .Government. That consent, when sought, was readily given. When the New Zealand Government was requested by the Commonwealth Government to consent to increased duties operating against New Zealand butter without the requisite six months’ notice, I regret to say that it would not give its consent. However, the required notice has been given, and at the end of six months. the new rates of duty on butter will operate against New Zealand.
Clause agreed to.
Division III. - Sugar.
By omitting the whole item and inserting in its stead the following item: - “27. Glucose, per cwt., British, 12s.; intermediate, 15s.: general, 15s.”
.- As honorable senators are aware glucose is a product of maize which is largely used in the manufacture of the higher classes of confectionery. It is not used because it is cheaper than sugar, but because in the manufacture of confectionery it is superior in many respects to that commodity. Glucose costs, I think, £40 a ton, while sugar costs about £36 10s. a ton: There are a large number of confectionery businesses in Australia in which large quantities of glucose, which previously came principally from America, are used. Under the old tariff, a. duty of 12s. per cwt. was imposed and no preference was given to Great Britain. The present proposal is to increase the general and intermediate tariffs by 3s. per cwt. and to leave Britain with a preference of 3s. over her rivals. I think I can show that there is a danger of serious injury to certain industries if the present proposal is carried, and as honorable senators have said they are open to correction and ready to remove any anomaly, I believe they will support the request I intend to submit. The Australian supply of glucose is controlled by Maize Products Proprietary Limited, which is controlled by one of the largest confectionery firms in Melbourne. At the end of 1925 this company applied for an increased duty of 6s. per cwt. on glucose, and urged as its reason that it wanted to prevent the importation of glucose, rather than to raise the price of the commodity to its competitors. At the time it made the request, 92’ per cent, of the glucose trade was under its control, and it had only to prevent 8 per cent, of the quantity consumed from coming to Australia to obtain a complete monopoly. Immediately an increase of 3s. per cwt. was imposed, this firm increased the price by the amount of the additional duty, with the result that numerous confectionery businesses throughout the Commonwealth had to pay an increased fate whilst one very large firm in Melbourne which has the monopoly of the local supply, even though it had to pay a higher price for the glucose used in the manufacture of its own confectionery, was able to recompense itself from the profits of the glucose business. This is a serious position and leaves the competing firms entirely in its hands. It has the power to raise the price of the product, and is, therefore, making the position more difficult for its competitors. That is according to the evidence given. before the Tariff Board.
– Is Maize Products Proprietary Limited the .only firm in Australia manufacturing that commodity?
– But others can undertake its manufacture.
– Yes; but what is the use when this company, which is controlled by MacRobertson’s Limited, has control of the Australian market? What is the use of duplicating an industry which at present is able to supply practically all that is required. The competitors of MacRobertson’s Limited are placed in an unenviable position because it can increase the price of the product and recompense itself from the profit made by Maize .Products Limited, which it controls. Other confectionery manufacturers have to pay the increased price which they must add to the price of their product.
– Has Maize Products Proprietary Limited made any profit. on glucose ?
– I do not know. Confectionery manufacturers also complain because the company will quote only for 90 days’ forward delivery, whilst American firms will quote for delivery twelve months ahead. In these circumstances I ask the committee to consider whether we are doing right in placing the power in the hands of a wealthy corporation to charge higher prices to its competitors.
– Does it charge more than a reasonable price?
– It has power to charge what it likes within limits which are governed by overseas competition, and then recompense itself from the profits made by Maize Products Proprietary Limited.
– Why have not its competitors the same opportunities?
– Because they are depending solely upon their confectionery businesses, whilst the firm of confectioners which I have mentioned, controls Maize Products Proprietary Limited, from which it may make profits. I stress the point that when the higher duty was sought the company had control of 92 per cent, of the Australian trade. Apparently it asked for a higher duty so that it could increase the price.
– Are its prices too high ?
– I am not disputing the price; but saying that there is no necessity for a higher duty when it controls practically the whole of the trade.
– Why should we not use our own products ?
– Why impose an extra duty? The company had the trade when it asked for an increased duty, and when it was granted increased the price, which, some ardent protectionists say, is never done under a protectionist policy.
– Those promises are made but are not always kept.
– Exactly. In order to test the feeling of the Committee, I move -
That the House of Representatives Vie requested to make the duties, British, 9s; intermediate. 123; general 12s.
That would bring the intermediate and general rates back to those previously in operation, but would give Britain a preference of 3s. per cwt.
– The previous rates were, British, intermediate and general, 12s. per cwt.
– I propose to provide for a preference to Great Britain of 3s. per cwt. by making the intermediate and general tariffs 12s. and the British preferential 9s. per cwt. Obviously the industry does not need protection. I know that Cadbury, Pry and Pascall object very strongly to the high rate which they consider gives a very unfair advantage to one of their competitors.
– I trust honorable senators will not support the request moved by Senator Ogden. The schedule provides for an additional duty of 3s. per cwt. under the intermediate and. general tariffs which has been imposed largely in the interests of Australian maize growers. I do not think maize is grown in Tasmania.
– Yes, it is.
– Its production is undertaken on an extensive scale in the mainland States, and the growers are in serious competition with the maize produced in America, Java and other countries. This matter was exhaustively investigated by the Tariff Board before which evidence was given for and against the request for a higher duty. The Board Said that in order to compete with the low American price the Australian manufacturer was obliged in some cases to operate on a very narrow margin of profit, and that in one instance without any profit at all. .In its report the Board stated that “ the Australian maize was costing the local manufacturer from 4s. 7-£d. per bushel - the present price is from 5s. 7d. to 5s. 9d. per bushel - as against the American price of 4s. ltd in July, 1925; 3s. 2d. in October, 1925, and 2s. lOd. per bushel in March, 1926.” I trust that in the interests of those engaged in the production of. maize, which affords a precarious livelihood, the request will not receive the support of honorable senators. About 500,000 bushels of maize are used annually in Australia in the manufacture of glucose, and the additional duty cannot seriously affect the confectionery industry, which enjoys very high protection: Only a few fancy lines of confectionery are at present imported. That is why overseas firms combined and established a branch factory in Tasmania.
a l while ago, and with a considerable amount of emphasis, stated that the existence of secondary industries in Australia conferred a distinct benefit on our primary producers.
– When they are effectively protected, they do.
– I think that even the Minister will admit that the previous duty on glucose should have been adequate. The report of the Tariff Board indicates that that body recommended the increased duty on the clear understanding that the manufacturers of glucose had to pay from 5s. 7d. to 5s. 9d. a bushel for maize, the raw product of the industry. The market price to-day is 3s. 9d. a bushel. If the Tariff Board, recommended an increase in the intermediate and general tariffs on glucose of 3s. a cwt., because the manufacturers had to pay for maize the prices which I have quoted, clearly it is the duty of the Government now to see that the manufacturers pay that price instead of 3s. 9d., so that the primary producers may reap some benefit from the protection.
– Twelve months ago the price of maize in Queensland was as high as 10s. and 12s.
– The Minister knows that twelve months ago the market conditions were abnormal. As a matter of fact, for a while the Maize Products Limited had to import a small quantity of maize.
– A quantity of glucose was also imported last year.
– Very little glucose was imported. Senator Ogden’s figures dealing with those imports were approximately correct.
– The imports last year totalled about 1,270 tons.
– That is not a large quantity. Mr. MacRobertson manufactures as much as that in. a month.
I have nothing to say against Mr. MacRobertson. I realize that he is entitled to all that he has achieved in this country. His success is largely due ‘ to his business ability and initiative, coupled with a generous assistance given him through the tariff. The point I wish to make is that if this is a scientific tariff - we who are objecting to this item say it is not - those who are benefiting from the protection should be prosecuted for taking money under false pretences, because the increased duties were recommended on the distinct understanding that they would pay a fair price for maize. Current market quotations show that they are riot doing so. I therefore intend to support Senator Ogden’s request for a reduction in the duties. The item as it stands is distinctly unfair. It is little wonder that country people are rising in revolt against these everincreasing duties, from which they derive little or no benefit. Maize Products Ltd., knowing that the maize grower has no other .market, pays what it likes for the raw product.- I feel satisfied that if the grower complained that 3s. 9d. a bushel was not enough, he would be told that if he did not take care he would have to accept 2s. 9d. It would have been better if the Tariff Board had recommended that, as the market for maize fluctuates from time to time, the amount of protection given to the glucose industry should be on a sliding scale, rising or falling with the price paid for maize. It appears that immediately the increased duties were levied the manufacturers of glucose dropped the price for the raw material.
.- It is very rarely that 1 fail to follow the logic of Senator Carroll. In the debate on this item I am totally at variance with the honorable senator.
– That is because the honorable senator does not grow maize.
– I am endeavouring to look at this item from the view point of the maize-growers. No primary producers in Australia have had a harder struggle than the maize-growers in my own State and elsewhere.
– Does the honorable senator believe that these duties will help them?
– I believe they will. If Mr. MacRobertson’s factories had not been in existence the maize-growers would have had to be content with a much lower price than they are receiving to-day for their produce.
– The price to-day would be down to 2s. 6d. a bushel but for the existence of MacRobertson’s factories.
– It is generally admitted that as Mr. MacRobertson’s factories require large quantities of glucose, his business activities have distinctly benefited the maize-growers of the Commonwealth. Last year, as has been stated, the market conditions were abnormal. Owing to the drought in Queensland there was a keen demand for maize for the hand-feeding of stock. Naturally the maize-growers when they had a chance took full advantage of it. No one can blame them for obtaining the highest possible prices for their produce. The pastoralists were hard hit by the drought, and the maize-growers benefited through the increased demand, for their product. Senator Ogden no doubt has in mind the interests of a lolly factory established in Tasmania, which I understand has to obtain its glucose from Mr. MacRobertson, its chief competitor in the Australian market. Does the honorable senator suggest that Mr. MacRobertson is charging too high a price for the glucose?
– His competitors say that he does not supply glucose at a fair price.
– Mr. MacRobertson conducts his business in a way that should command our highest respect. From small beginnings he has built up an enormous industry, and he deserves all the -success that he has achieved in this country. If the British preference duty on glucose were reduced to 9s., the Australian industry would be destroyed, and indirectly Australian maize-growers would suffer.’
– Can the honorable senator say what is the average price for maize?
– The market fluctuates considerably. If Senator Ogden’s request were agreed to, and if another place reduced the duties, there would not be the same demand for maize, and growers would suffer.
– The higher duties imposed on maize in the last tariff were intended to protect the maize-growers of Australia against cheap maize grown in South Africa by poorly paid coloured labour. Last year during the drought there was a heavy demand for maize, which naturally rose in price in sympathy with the law of supply and demand. The average price over a period of years works out at about 4s. a bushel. The increased duties now imposed are designed to protect Australian manufacturers against American competition. When this matter came before the Tariff Board for hearing on the 16th December, 1925, in Melbourne, on the 15th February, 1926, in Sydney, on the 18th January, 1926, in Adelaide, and later the applicants, the Maize Products Proprietary Limited, asked for an increased duty of 6s. a cwt., and the board recommended an increased duty of . 3s., which is nowprovided in the item. It was stated in evidence before the board that whilst the Australian manufacturers’ cost of production was £33 6s. 4d. a ton, American glucose was being sold on the Australian market at £33 ls. 4d. a ton, or 5s. a ton under the cost of production in Australia. The increase of 3s. a cwt. in the intermediate and general tariffs means that on the basis of ruling American prices in 1926 the American product would now sell in our market at £36 ls. 4d., which is a flat rate in all the States. This would give the Australian industry a protection of 55s. a ton, or 9 per cent, to provide for profits, freight and other distributing charges. The Tariff Board, on the evidence that the imported article was selling at £33 ls. 4d. a ton, recommended an increased duty of 3s. a cwt., which Maize Products Proprietary Limited described as inadequate. No man in Australia has built up a finer business than has Mr. MacRobertson, who, as honorable senators know, started in a humble way. His many factories now give employment to a large number of people under the best of Australian conditions and wages. His products have a world-wide reputation, and are to be found on sale in Loudon and many other cities of the world. The Maize Products Proprietary Limited disburses in wages about £60,000 per annum. For the year which ended on the 30th June last, 1,270 tons of glucose were imported from the United States of America. No’ harm will be done to any of our own people if we keep out that American glucose. Honorable senators have been very greatly impressed by the figures published recently, which showed the adverse balance of trade between the United States of America and Australia. Last year we imported from that country £41,000,000 worth of merchandise, but it took from us goods to the value of only £8,000,000. “ Practically the only commodity which America purchases fr.om us is wool, and on that it levies a duty equal to 15½d. a lb. of scoured wool. It is not proposed that the duty should be raised against other portions of the British Empire. We should do whatever we can to help the maize growers to obtain a fair return for their labour,_and at the same time to foster a secondary industry of the magnitude and efficiency of MacRobertson’s. For that reason I shall support the proposed duties.
– Senator Carroll is opposed to the increased duty on the ground that it will be of no benefit to the maize growers of Australia. Adopting that line of reasoning, they would be just as well off if there were no duty. Why should they not get some material advantage from duties that are imposed, with the object of encouraging maize growing in Australia? Upon whose shoulders does the blame rest?
– I did not argue that point.
– The maizegrowers are entitled to the fullest consideration of both this Parliament and the people of Australia. It appears to me, however, that they are not looking after their own business. They should organize, and unitedly use their influence to ensure a fair return for their commodity. In the years, that have gone labour was regarded as a commodity, and some employers acted on the principle that the conditions of employment should be governed according to the law of supply and demand ; but when labour organized, a different tale was told. I do not know what is the number of maizegrowers in Australia, but surely they have sufficient strength to demand complete recognition even from a combine!
– It does not take the whole of the production.
– According to an official return, the quantity of glucose utilized in the Commonwealth for the year ended the 30th June, 1927, was- 8,265 tons. The quantity produced in the Commonwealth was 6,993 tons, audi the importations from the United States; of America totalled 1,272 tons. Wehave a fair distance yet to travel beforewe shall overtake the Australian market.. I shall avail myself of every opportunity that offers to give those who are engaged in either primary or secondary industries the measure of protection that I ‘consider is justified. If the maize-growers have an ‘ organization, they should make their voices’ ring. I am satisfied that the’ members of this committee, and of the Federal Parliament as a whole, will listen to their plea, and see that the combine does not secure all the advantages of increased duties, which are intended principally to encourage the primary producer. I shall not vote for the highest measure of protection to encourage monopolies that will not give a fair and square deal to those who are engaged in other spheres of activity. If the maize-growers are not being treated fairly by the combine, I shall ‘protest on their behalf as vigorously as I cac, both in this chamber and elsewhere.
– They have organized, and have expressed themselves in favour of the proposed increased duty on glucose.
– That is an effective reply to Senator Carroll. It shows that they are minding their own business. Apparently they believe that the increased duty will be materially to their advantage.
– It appears to me that the main point in this argument is being lost sight of. According to Senator .Carroll and the report of the Tariff Board, these fortunate manufacturers of glucose were given an increased duty on the ground that they had to pay from 5s. 7£d. to 5s. 10½d. a bushel for their raw material. Apparently, that is not the present, the normal, or the average price of the maize that is used in the making of glucose. Therefore, the duty was given under a misapprehension. There is a very great deal of merit in Senator Findley’s suggestion that the maize-growers do not look after their interests sufficiently well, and that if they did they would insist upon what I may without offence call a fair division of the spoils. When the price of maize drops below 5s. 7£d., Maize Products Proprietary Limited gets the advantage of the duty, and is enabled to pay a dividend at a very high rate. That is not fair.
– Is it a fact, as suggested, that they are paying a high rate of dividend?
– I am informed that the rate is 14 per cent.
– I do not think they have paid a dividend for some years.
– Instead of paying the 5s. 7^d. or 5s. 10^d. which would entitle them to additional protection, they are paying only 3s. 9d. a bushel for the maize which they purchase. We are not in a position to argue this matter with any very great degree of certainty, because we have not in our possession accurate data respecting either the normal or the average price of the maize that is supplied to Maize Products Proprietary Limited. When we have that information, we shall know whether or not this is a just claim. As their claim to greater protection is based on a price which does not exist, and which very seldom exists, they have been treated rather too generously.
– It is based on a price of 7s. a bushel
– It has never been 7s. a bushel. When it was being imported from South Africa the local price was 5s. 9d. a bushel.
– That strengthens my argument that the price of the raw material, to meet which this duty was imposed, was very much exaggerated. I intend to support Senator Ogden, unless it can be shown that the maize-growers will benefit by an increase in the price that ia paid by these people. They are a large body of men, and undoubtedly have a fairly hard time. I wish to protect them. MacRobertson and Maize Products Proprietary Limited do not need any further protection. The former, partly through his own initiative, but very largely as a result of the extremely kind treatment that has been meted out to him by successive governments, has become a millionaire. I understand that he is able to treat his employees on a most magnificent scale; they are clothed in purple and fine linen, and fare sumptuously. That is somewhat of a contrast to the lot of the maize-growers, who supply the raw material at a lower price than that which entered into the calculations of the Government when this duty was imposed.
– It is refreshing to hear Senator Findley argue that the maizegrowers should organize to force up the’ price of their product.
– I am glad that there is another honorable senator who congratulates and commends Senator Findley upon that attitude. I hope that if the maize-growers get together they will assist their cause as much as Senator Findley’s friends have advanced theirs, so long as they do not hold up the industries of Australia in the way that his friends occasionally do. Seeing that this duty was granted because of conditions which do not normally exist, I cannot support it.
– I hope that honorable senators ‘will not be influenced by the statement of Senator Carroll that maize to-day is quoted at 3s. 9d. a bushel. Any one who has a knowledge of the cost of producing maize knows very well that 3s. 9d. a bushel in Melbourne or Sydney is not a payable price to the grower. It, therefore, cannot be regarded as an average price. If it could be so regarded, then I say without hesitation that no one would be growing maize in Australia to-day.
– What is the average price of maize ? ‘
– Maize could not be sold to-day at a profit to the grower under 6s. a bushel. Maize is a crop which is sown in the spring and matures quickly, but as it is not a grain which keeps well . it must be marketed quickly. Probably on account of the abundance of green feed there is not a great demand for maize at the present time. If it is sold to-day at 3s. 9d. per bushel, the price realized is less than the cost of production.
– Would Mr. MacRobertson’s factories consume 50 per cent. of the maize crop?
– Their consumption would be nothing like that proportion. In fixing a duty on a manufactured article we must consider what is likely to be the average price of the raw material. In the case of maize, 3s. 9d. per bushel certainly cannot be regarded as an average price. I hope that honorable senators will not be influenced by the fact that at present the maize market is in a depressed condition.
.- Senator Carroll has suggested that the manufacturers of products of which maize is the raw material are in a position to dictate prices to the maizegrowers. Unless he can produce evidence in support of that statement I propose to vote for the item.
– The maizegrowers dictated to the sheep-growers of Queensland last year, during the drought, the price they should pay for their maize.
– Only a small proportion of the maize crop is manufactured into glucose. It is, therefore, impossible for Mr. MacRobertson to control the price of maize. Seeing that the manufacturers of glucose do not control the maize market, it is idle to say that they are taking advantage of their position to starve the maize-growers. In supporting this duty we shall be assisting the maize-growers of Australia.
– My argument was advanced in refutation of the Minister’s statement that by assisting secondary industries, we are helping the primary producers.
– We are bringing additional competitors into the market. That should tend to raise the price of maize.
– What is the average price of maize?
– According to the statements of Queensland senators it would appear that in times of drought it is about 9s. a bushel.
– In 1920-21 the average price of maize was 6s. 6d. per bushel; in 1921-22, 5s. 2d. per bushel; in 1922-23, 6s.1d. per bushel; and in 1923- 24, 5s.1d. per bushel.
– By encouraging competition, we shall assist the maizegrowers. If the whole of our glucose requirements were manufactured in Australia, there would be a greater market for maize, which would, therefore, realize better prices, but if a large proportion of our maize crops is exported lower prices must be accepted.
.- The example before us is one which tends to bring the protectionist policy into disrepute. Senator Reid said that in this matter I represented a “lolly shop.” I could retort equally offensively, but as that would be discourteous, I shall not do so. I wish to make it clear, however, that at no time haveI been approached by persons interested in this item.
– I did not infer that the honorable senator had been approached by interested persons, nor did I say that he represented a “ lolly shop.”
– I take the stand that to increase the duty on glucose still further would be to place a dangerous power in the hands of a monopoly, enable ing that monopoly to squeeze out its competitors in the confectionery business and also to injure the producers of maize. In 1925 an increased duty of 6s. a cwt. was applied for, notwithstanding that at that time the glucose manufacturers of Australia supplied 92 per cent. of the home market. Seeing that they already had practically the whole field to themselves, there was no need for a further duty.
– Then why did they approach the Tariff Board for increased duties ?
– They said that increased duties would enable them to capture the whole of the market. They professed that their object was not to increase the price of glucose) but immediately the duty was increased by 3s. a cwt., the price of glucose went up. The increase was passed on to the consumer.
– Was not the rise in the price of glucose due to the drought having increased the price of maize to 7s. per bushel ?
– The price of maize rose from 4s. lid. to, 5s. 6d. per bushel, or 20 per cent. ‘ To counteract that increase an application for additional duties amounting to 55 per cent, was made.
– What is the present price of glucose as compared with the price at that time ?
– I do not know. One Tasmanian firm which purchases large quantities of glucose from Maize Products Proprietary Limited, also purchases glucose from America in order to have two sources of supply.
Sitting suspended from 6.15 to 8 p.m.
Private business talcing precedence after 8 p.m.,
Connexion with New South Wales Railway System.
Order of the day called on for resumption of the debate from 24th November, 1927 (vide page 1838) on motion by Senator Thomas -
That, in the opinion of this Senate, the Federal Government should enter into negotiations with the Governments of New South Wales and South Australia to link up the EastWest Railway with the New South Wales railway system via Broken Hill or Hay.
Debate (on motion by Senator. Duncan) adjourned.
– I move -
That, in the opinion of the Senate, the rate paid to the Amalgamated Wireless Company for messages from Australia to England, in plain language and not marked “urgent,” should not exceed a penny a word.
Honorable senators may remember that just prior to the Christmas adjournment I submitted a proposal that the charge for sending wireless messages from Australia to Great Britain should not exceed one penny a word. During the recess I have had an opportunity to obtain further information on the subject, and I think I am now in a position to submit a proposal that is within the range of practical politics. My purpose is plainly indicated in the motion. I desire that messages couched in plain language be charged not more than one penny a word. If messages are marked “ Urgent,” or are sent in code - Governments and business firms may, for the sake of secrecy, if for no other reason, send wireless message in code- I think there ought to be an extra charge. I leave that matter, however, absolutely in the hands of the Government department concerned, or Amalgamated Wireless (Australasia) Ltd. I am solely concerned in presenting a case for a maximum charge of one penny a word for messages sent in plain language. I do not propose, at this stage at any rate, to interfere with the terminal charges over which Amalgamated Wireless (Australasia) Ltd. has no control. Later on, perhaps, if my motion -is agreed to and the Government is prepared to ask the wireless people to send plain messages to Great Britain at one penny a word, the terminal rates, which I confess are a puzzle to me, may be reviewed. In any case, the charge of one penny a word for messages would be imposed by Amalgamated Wireless (Australasia) Ltd. The terminal charges are a separate matter altogether.
During the recess I was fortunate enough to come across a pamphlet I have had in my possession for the last nineteen years. It is a verbatim report issued by the Town and Country J Journal of a most interesting discussion that took place at the Colonial Institute in London on the 2nd April, 1909. Sir Henniker Heaton gave an address on Penny Telegrams and Cablegrams throughout the’ Empire. The gathering was a distinguished one, representative of all parts of the Empire. Lord Jersey, who had been Governor of New South Wales, presided. Among those present was Mr. Neilson, the representative of the Eastern Extension Cable Company, who, needless to say, did not agree with the arguments advanced by Sir Henniker- Heaton, and pointed out that to bring down the charge for cablegrams throughout the Empire to one penny, a word would necessitate the installation of so many cables to make the scheme a paying proposition, that there would not be enough gutta percha in the world to provide them. Whether he was correct or not in that statement I do not know,- but it is an indication of the tremendous advances science has made in the last twenty years, when wc find now that it is not necessary to have a single ounce of gutta percha to send all the messages that would be required to make a service between England and Australia pay at a penny a word. That meeting in London, with one accord, agreed to the suggestion “ that very free, cheap, swift and accurate communication was essential, not only in the interests of trade, but also for the continued consolidation of the Empire.”
I am well aware that some honorable senators are greatly influenced by the opinions of business men, and that they regard any one who is not a business man as a visionary or dreamer. It is, therefore, necessary to support one’s statements by the views of business men. One of the ablest and most distinguished business men Great Britain has produced in recent years is Lord Leverhulme. He was not present at the gathering in London, but in a letter which he sent Sir Henniker Heaton, Lord Leverhulme, then Mr. W. Lever, said -
On universal penny a word telegrams I am in hearty accord with you, and wish you every success.
And then he went on to say, what to my mind was rather important -
I fail to see why you should advocate the purchase of existing cables and telegraph lines. Every year cables can be laid and made to work cheaply. Why should a mass of practically obsolete cables, with all the difficulties of dealing with the 10 per cent, dividend be purchased, when ‘the Government could lay their lines and leave the existing private enterprise to compete with them?
That statement was rather good, coming as it did from one of the most prominent and successful business men the British Empire has produced in modern times. Another letter, which was read at the meeting, came from Lord Curzon, who later became one of our great pro-consuls, and was Viceroy of India. He wrote -
Cheap telegrams will be found to bc the most economical and also the most enduring of the bonds of Empire.
That is a statement to which I can subscribe fully. The last great war taught us many tragic lessons, but no greater lesson than the urgent need of consolidating this great Empire of ours. I think that all honorable senators will agree that very cheap, accurate, and swift communication between Australia and the Motherland is desirable; but the question is whether it is financially practicable.
Surrounded as I am by business men, I must not be too visionary. In this connexion I must cover again some of the ground I traversed in the speech I made in the Senate just prior to the adjournment. The figures I shall quote will be based on the supposition that the Beam wireless system will work eighteen hours a day, thus allowing six hours a day for fading. By the way, I think we have a right to be told by the directors of the Amalgamated Wireless (Australasia) Limited how the Beam system is work.ing. The people of the Commonwealth own the majority of the shares in the company. Senators, therefore, are just as entitled to the fullest information in regard to the failures and triumphs of the Beam wireless system, as they are to a knowledge of what is happening to the telegraph system controlled by ‘ the Postmaster-General.
I have never associated myself in thought or in word with any criticism that affects the manager of Amalgamated Wireless (Australasia) Limited. If Mr. Fisk has any fault at all it is that he is too mindful of the interests of his company and business men, of course, would not object to him on that score. If the charge for Beam wireless messages were fixed at one penny a word, does any one doubt that messages representing 50,000,000 words a year would be received for transmission? That traffic would return £204,000 a year. According to the Postmaster-General, £120,000 his been spent on a Beam wireless plant that is capable of sending 86,000,000 words a year to Great Britain. The expenses incidental to the Beam service amount to £80,000 a year, or £1,500 a week. Amalgamated Wireless (Australasia) Limited, controls other things beside the Beam service, but to-night I am not concerned with them. If the company cannot make ends meet by charging a penny a word for plain messages from. Australia to Great Britain, we have a right to learn from its directors why it cannot do so. Let us contrast what is done in
Australia on’ our land lines. Messages are sent’ over our land lines at one penny a word, but a large portion of the work is done for about three farthings a word. A great number of the telegraphic messages despatched cost a trifle over one halfpenny a word, whilst the department despatches no less than 15,600,000 words free of cost. We are losing on our telegraph service about £300,000 a . year, but if £65,000 - representing Id. a word - were credited to the work which is now done free of cost the loss would be reduced to £235,000. If the department charged, a flat rate of one penny a word the deficiency would be wiped out, provided, of course, the same volume of business was offering. It also costs £300,000 a year to deliver telegrams. This has to be paid for out of the rates received for the despatch of messages. I am not suggesting that the Amalgamated Wireless should, from the rates now charged, meet the cost of delivering the messages it receives.
– It does so now.
– If it does it is very unfair when it has to’ pay terminal charges. It is an easy matter for the company to deliver messages in the capital cities, but additional expense would be incurred in delivering a message at, say, Bathurst. As the company is paying terminal charges it should have its messages delivered. It costs the Telegraph Department over £300,000 a year to deliver messages, and if it were relieved of this liability our telegraph service, even ‘at the present rates of Id., fd., and -£d. a word would be able to pay its way. It costs £65 a mile for supplying and erecting telegraph poles, and if the cost of wiring is added the cost is equivalent to £70 a mile.
– Does that include the cost of constructing trunk lines?
– Yes, that’ is the average cost per mile. Last year £236,000 was paid for renewing telegraphpoles which had become damaged by age, white ants, storms, or other causes. No such costs are incurred in connexion with an aerial service between Australia and Great Britain dr elsewhere.
– Does the £70 a mile include maintenance?
– I think that it covers only construction. The aerial roadway is the free air we breathe, and Providence expects of us that we shall use it only in the interests of mankind. The improved telephone services and postal facilities are seriously cutting into the revenue ‘ of the Telegraph ‘ Department. In order to assist primary producers, the Government is erecting telephone lines throughout country districts to a greater extent than ever, and I think it was during the Hughes administration that a loan of £8,000,000 was raised to extend our telephonic, and other services of the Postal Department, more particularly in country districts. Every telephone service provided in the country affects the revenue of the Telegraph Department. In the service between Australia and Great Britain the submarine cable companies are the only competitors of Amalgamated Wireless (Australasia) Limited. It costs approximately £300 a mile to lay a submarine cable, and consequently if a rate of Id. a word were charged for wireless messages between Australia and Great Britain the cable companies could not show a profit. If cheap communication will be the means of bringing the people of the Empire together, creating greater cordiality and extending business, it should be provided. It is infinitely preferable that such a service should be provided at cost price rather than that the company should be paying a dividend of, say, 10 per cent. Perhaps I may be pardoned for referring to a personal incident of which I was reminded to-day when I met Sir William Mcpherson. While I was Postmaster-General a deputation, consisting of Sir William McPherson, Mr. Henry Berry, and other prominent business men of Melbourne, waited upon me, when the toll telephonic system was being introduced, and suggested that the department should not expect to make a profit from the service which they said was a public utility. They were of the opinion that it should be made to pay its way ; but should not be expected to show a profit. I told the deputation that I did not believe in the service being made a tax collecting machine. I am still of that opinion, and I think I am right in saying that we should not look for a profit on beam wireless. Under the present agreement with Amalgamated Wireless (Australasia) Limited and the Commonwealth the company holds 499,999 shares, and the Government, as the representative of the people, 500,001 shares. I think it is unreasonable that practically onehalf of the shares in the company controlling the Beam service should be in the hands of private enterprise. Senator J. D. Millen and the right honorable member for North Sydney (Mr. Hughes) are two of the Commonwealth’s representatives on the board. If the Senate were asked to-day to select a representative on the directorate of that company, I should unhesitatingly support Senator Millen, who is not only a distinguished member of this chamber, but also possesses externsive scientific knowledge which fully qualifies him for such a position. If I were a member of another place I should undoubtedly support the appointment of Mr. Hughes, to whom we really owe the existence of the Beam service. But why are Senator Millen and the right honorable member for North Sydney on the directorate of the company? Are they there to watch the financial aspect of the company’s operations? They were not appointed for that purpose. I contend that the other directors can do that better than they can, because they have long been closely associated with business, and in looking after the interests of their section of the shareholders would be safeguarding ours.
– Is the honorable senator in favour of the Government assuming complete control over wireless?
– Yes, that is what I am leading up to. Our representatives on the directorate are there to safeguard the interests of the Australian public. What are their interests? Are they anxious that the company should pay a dividend or provide a service at the lowest possible cost? I think it is their duty to see that a service is provided at a low price. I have no hesitation in saying that, sooner or later, the Beam wireless service must be taken over by the Government. I read recently, with very much interest in a book written by Mr. J. A. Spender, who, as honorable senators are aware, was for many years editor-in-chief of the Westminster Gazette, the statement that for over a year he wrote a weekly letter on European politics which was published in the New York Tribune, and that although he wrote these letters in a Kentish village they appeared without fail in the New York Tribune on the following day. This means, of course, that they were sent to America by cable or by wireless. I could not help thinking what an advantage it would be to us as an Empire, if, when important questions affecting Great Britain and Australia were under consideration, a leading article published in Australia appeared next day in the Manchester Guardian, or a contribution from some responsible authority in Great Britain was published the same day in the Sydney Morning Herald. A leading article of about 1,200 words would, at a penny a word, cost only about £5. The Government has at present a wonderful opportunity to render a valuable service to the community in this way.
As honorable senators are aware, I have taken a great interest in the development of wireless for some time, and everything appearing in our newspapers concerning wireless and cable communications is of interest to me. At present a controversy is proceeding in Great Britain between the wireless companies and the cable companies who are considering amalgamation, not for the benefit of the Empire, or in the interests of the people, but so that they may be able to make increased dividends for themselves. Wireless is the most wonderful discovery of the age, and I object to it being made the battledore and shuttlecock of the stock exchanges, or being used. merely for the benefit of the wealthier sections of the community. I wish to see it used in the interests of the people generally.
– Without that incentive, it will not be possible to accomplish anything.
– I stand by what the late Lord Leverhulme said on this subject. If we had a Id. a word wireless system in operation .we should not now have this controversy between the wireless and cable companies in Great Britain. “We should be in the full enjoyment of one of the greatest gifts that scientists have given to the world. I quoted just now, though briefly, the views of the late Viscount Curzon. He declared -
I should like to see a low rate everywhere, but first I should like to see it between all parts of the British Empire. Let us talk first - as all families begin by doing - to our own children.
The late Lord Tennyson, a former GovernorGeneral of Australia, stated -
A universal Id. a word telegram between all parts of the Empire would be an unspeakable boon. Work for that.
I claim that wireless messages at Id. a word would do a great deal to help the migration activities of the Commonwealth. The Nationalist party, I believe, endorses this view. As a party, we stand for a policy of migration. The Government appointed a costly commission to inquire into the subject, and make recommendations for the furtherance of its policy. Being interested in migration, I wrote to a number of prominent citizens of the Commonwealth and I propose to quote briefly from the replies which I have received. I regret that I have mislaid a letter from Canon Garland, who, as honorable senators probably are aware, is the migration representative of the Church of England in Queensland. In his letter to me, he declared that at least 1,000 people had come to Australia as the result of his personal activities, and that, therefore, he was entitled to speak of the influence of cheap wireless communication on migration. He stated that nothing was more calculated to ensure the success of migration than cheap communication between Australia and the Motherland. The best migrant is the person nominated, but, at present, owing to the long delay involved in correspondence, it is difficult to interchange views on this important subject between Australia and the Motherland. I wrote, also, to the Rev. W. H. Jones, who occupies in the Methodist Church of Australia much the same position as Canon Garland holds in the Church of England. , Mr. Jones, who has had considerable experience during the last two or three years with migrants, is in favour of cheap wireless communication between Australia and Great Britain. He states -
It seems to me that by cheapening the means of communication we are helping to make such people more contented settlers, and also helping them to feel that, whilst they are separated by many miles, actually they are not so far away because of being able to send and receive messages quickly and cheaply.
Sir Robert Anderson, the president of the New South Wales division of the New Settlers League of Australia, writes as follows : -
I wish you all good luck in your fight for wireless messages at Id. per word. It looks as though the claims made by the wireless experts are sound, that these cheap messages at week-ends or other slack times Wil be possible at that price. I have been president of the Kew South Wales New Settlers’ League for nearly three years, and I have seen that the enormous bar to immigration from Britain is isolation that strangers suffer by being cut off from their friends excepting by postal communication, which takes six weeks and lacks any crispness of touch. The present week-end messages, costing 6d. per word by cable or 5d. per word by beam with a minimum of 20 words puts anything like regular communication beyond reach of 90 per cent, of our immigrants. The chance of sending 24 words for 2s., or. better, 12 words for ls., would make an enormous difference; and you can picture the profound relief and satisfaction strangers here would feel with a message 48 hours old reaching them of the well-being and happiness of their loved ones; or, conversely, the thankfulness of the mother in England at having prompt and regular word that “ John “ was happy and succeeding, 12,000 miles away.
Some time ago I learned that Sir Benjamin Fuller, another keen business man of Sydney- I like to quote the views of business men on this subject - had at a welcome to Mr. Bankes Amery, the British representative of migration in Australia, declared that Id. a word wireless messages would greatly assist the migration activities of the Government. I called on Sir Benjamin subsequently, and questioned him further on the subject. He assured me that he was strongly in favour of the proposal, and hoped that the Government would adopt it. He added that by means of a code, his business messages to Great Britain did not cost him more than about Id. a word, whereas the poor migrant, under the present system, has to pay an excessive rate.
I admit that if my proposal is adopted, the interests of the existing cable companies will be affected. However, I am not anxious to protect the interests of the Eastern Extension Telegraph Company. Can honorable senators say that that concern has ever been the friend of the British Empire? Are they aware that at one time the company demanded a subsidy of £30,000 a year to establish communication between Australia and the Mother country? Are they aware also that Tasmania had to pay a subsidy of £4,000 a year for the privilege of cable communication between Melbourne and Launceston, and, in addition, had to guarantee a certain volume of business per annum ? When the Pacific Cable Company was established many years ago the Eastern Extension Company made an arrangement with the leading newspapers of Australia under which all press messages had to be transmitted over the Eastern Extension lines. I have always had a friendly feeling for the Pacific Cable Company. Possibly this is because the Government is, to some extent, financially interested in it. The first deputation which I, as a young member of Parliament representing Broken Hill, introduced to Mr. Crick, the then PostmasterGeneral of New. South Wales, made a request that a certain concession which was then asked for by the Eastern Extension Telegraph Company, should not be granted if it would place the Pacific Cable Company at a disadvantage. Many years ago, in the House of Representatives - before I was elevated to the Senate - I submitted a motion affirming that the land-line between Vancouver and the Atlantic sea board, which was then in the hands of private enterprise, should be taken over in the interests of the Pacific Cable Company. I urged also that an Atlantic cable should be purchased so that the messages transmitted over the Pacific Cable Company’s line should be completely under British control between Australia and London. That course has since been adopted, though I do not claim that it- was the result of my advocacy of it many years ago. I cite the incident merely to show that I have always been a friend of the Pacific Cable Company. But even that concern must not stand in the way of progress. I remember when Mr., afterwards Sir- George, Reid, brought forward a proposal for the electrification of the Sydney tramway system, Sir John See, who strongly opposed the motion, urged that the electrification of the transport system of Sydney would mean the passing of the omnibuses, which were then in use. He argued also that if omnibuses were displaced by electric trams, the primary producers in north-coast districts would lose their market for maize and other products. Recently Mr. Crawford Vaughan, a former Premier of South Australia, informed me that when the late Mr. Price submitted the scheme for the electrification of the Adelaide tramway system, it was opposed in certain quarters on the ground that if the horse-drawn buses were taken off the streets, the orchardists in the hills district would be short of manure for their gardens! Our telephone system, as I said a little while ago. is now entering very seriously into competition with the telegraph department. If the telephone gives an improved service to our people, obviously the telegraphic service will have to be scrapped. I know that some people say it is necessary to retain the cable service for purposes of defence. That is a matter of policy. What I want to know, however, is whether Amalgamated Wireless (Australasia) Limited can send messages at Id. a word and make ends meet. If it cannot I wish to know the reason. I am not asking that the wireless service be subsidized, although I do not overlook the fact that a subsidy is paid for the oversea carriage of mails, and the provision of refrigerated space, notwithstanding that the space provided by shipping lines that are not subsidized is five times as great a3 that which is subsidized.
– Is the honorable senator suggesting that a subsidy should be paid in respect of the wireless service or the cable service?
– If the Government is willing to pay a subsidy it should be given to the wireless service to enable messages to be sent at the rate of Id. a word. There is as much justification for that as there is for subsidizing the carriage of mails and the provision of refrigerated space. A bounty amounting to £450,000 a year is given to the wine industry in order that the Englishman at Home may purchase his wine at a cheaper price.
– And so that the soldier settlers on the Murray will be saved from ruin.
– I notice that some persons who are interested in the production of peppermint oil have induced the Tariff Board to recommend that they be granted a subsidy. I do not know whether the Government will grant it ; presumably it will. If that can rightfully be claimed, we have a perfect right to ask for a subsidy for something which will bring us more closely in touch with people who speak our language and whose history and destiny do not differ from ours.
– No one disputes the right to ask.
– When I last brought this matter before the Senate the Minister was good enough to reply to my representations. He had then been informed of a discovery by the use of which a letter written in Australia could be photographed to England. He said that that would result in a greater volume of business being done, with a consequent lowering of charges. A little while ago I spent a week at Wentworth Falls. I stayed at a house in which was a youth, fourteen years of age, with a broken leg. In conversation with him I ascertained that he had read some remarks of mine on wireless that had been published in the National Review. He informed me that there were some, points which he- understood, and others which he did not. I asked him, “ What do you understand ‘’ ? He replied, “I understand that if I can sell chocolate bars at Id., when others are charging 6d., I will get all the business. I also understand that if I can get a good A.J.S. motor cycle to-day, there is no -necessity for me to wait five years for a new make of machine.” The Minister on the previous occasion to which I have referred, said that an increase in the volume of business done would lead to a reduction of the charges. Has he ever heard of
Henry Ford? That gentleman has exceptional business capacity, and his guiding principle is that if you place an article within the reach of those who want it, you will secure their business.
– He -seems to have lost all his business.
– Any one who can start without capital and make £20,000,000 is a fairly good business man; quite .equal, even, to some of the business men who sit in this chamber ! I wish to know whether the Government intends to reduce charges. Democracy, does not become very enthusiastic over a government which merely appoints royal commissions, and calls together conferences of different interests, however necessary those may be. The people fall behind a a government which does things on a big scale, and makes the waters roar.
– Like Mr. Lang did!
– This Government has the opportunity, by cheapening wireless communication, to annihilate the distance between Australia and the, centre of the Empire, thus conferring an inestimable boon on the people. The Fisher Government lost £400,000 a year by the introduction of penny . postage.
– And an ungrateful country turned it out of office !
– Senator Pearce might tell me whether the present National Government wishes to be less imperialistic than a former Labour government? Eighteen or nineteen years ago the leading men of the day were asking for this concession. It is now possible to grant it. Are the Government prepared to turn the dreams of to-day into the splendid realities of to-morrow? If so, they will support my motion.
Debate (on motion by Senator McLachlan) adjourned.
In committee - (Consideration resumed, vide page 3675) :
.- The main argument of those who oppose my amendment is that the maize-growers are likely to suffer injury if glucose is allowed to be imported, and the Australian company is not able to obtain control of the local market. Maize Products Proprietary
Limited has not been altogether a failure; it has paid high dividends, and, in addition has acquired in Queensland maize plantations which it hopes will enable it to manipulate the market in such a way that the “unfortunate farmer will not be able to get a high price for his product.
– That is not the opinion of the maize-growers in Queensland.
– The reason this company has acquired those plantations is not to be found in an insufficient supply of maize. The quantity of maize which is used in the manufacture of glucose is small compared with the total quantity grown in Australia ; therefore, it can have little effect upon the price of the commodity.
When the Senate adjourned for dinner I was pointing out that an increased duty was sought because the price of maize had risen from 4s. Hd. to 5s. lOd. a bushel, equal to 20 per cent. Yet, before the Tariff Board, an increase in duty amounting to 50 per cent. - 6s. a cwt. - was asked for. Fortunately for the people of Australia that request was not granted, but an additional 3s. per cwt., equal to 27 per cent., was recommended. The direct result to the people of Australia was that they had to pay a higher price to the full extent of the duty, despite the statement made before the Tariff Board that the main object was to prevent importation.
– There is no evidence that the price has been increased lately.
-If there has not been an increase the confectioners who control the manufacture of glucose are in an advantageous position compared with others who do not share in the profits of that industry, but have to pay a higher price for their raw material. They were penalized to the extent of £3 a ton, while those who controlled the maize products reaped an. advantage from the dividends paid by the company. I repeat that I have not been approached in this matter by any Tasmanian company, and that I am not attacking this item in the interests of any particular firm. Besides Cadbury, Fry, and Pascall, there are other companies using the same raw materials - Hoadleys, Nestles, Allens, and others. They are not in the glucose combine. If the duty were in the interests of the primary producers, I should not object to it.
– By maintaining the price of maize it would help the primary producers.
-Senator Reid merely makes that statement, but he does not attempt to prove it. The instance before us is a glaring attempt to use the tariff in order to make greater profits. I am opposed to any such attempt. I shall vote for increased duties where I consider they are justified, whether the industry affected is in the north, south, east or west of the Commonwealth; but here is a company which, although it had control of the market and was making huge profits, asked for higher duties in order to make still greater profits.
– Believing that by supporting our secondary industries we should, assist our primary industries, I originally introduced a tariff providing for a duty on glucose. The whole of the arguments in this debate have been based on the assumption that glucose is the only product of maize. But besides glucose, corn flour, starch and oil are obtained from maize. In this item we are dealing only with glucose. Senator Ogden said , that although the price of maize had increased by only 20 per cent, the manufacturers of glucose applied for a 55 per cent, increase in the duty. I remind the honorable senator that the quantity of glucose obtained from maize is, if my memory serves me rightly only about. 13 per cent, of the raw material. A 20 per cent, increase in the duty on glucose ‘would not cover a 20 per cent, increase in the price of maize.
– I said that the increase in the price of maize was only 20 per cent; yet the manufacturers of glucose asked for- a 55 per cent, increase in the duty.
– I have grown maize, and know something about the subject.
– So have I.
– If the honorable senator grew maize at the time that I grew it, he knows what it is to grow maize at a loss. Owing almost entirely to the growth of our secondary industries we are finding a local market for our primary products. The manufacture of glucose is assisting one of our primary industries. The average price of maize ten years before the war was very different from what it has been since the termination of the war. These industries have developed since the war. Unless we are to ignore the evidences of our senses we must admit that the growth of our secondary industries has been a great assistance to our primary industries.
– I have not denied that.
– Has not the cost of production gone up proportionately?
– The cost of production has increased, but not proportionately. The United States of America is our chief competitor in the growing of maize. According to the Year Book, the average price of maize in the Sydney market for the four years from 1920-21 to 1923-24, was 5s. 8d. a bushel.
– That includes the drought year.
– I have excluded 1926- the year of the drought. The average prices realized for maize in the years I have mentioned were - 1920-21, 6s. 6d. per bushel; 1921-22, 5s. 2d.; 1922-23, 6s. Id.; and 1923-24, 5s. Id, or an average of 5s. 8d. a bushel. On page 185 of the Commerce Year-Booh of the United States of America, I find that in January, 1921,- the. price of maize in that country was 2s. 8Jd. a bushel; in 1922, it was 2s. ; in 1923, 2s. lid., and in 1924, 3s. 2d. a bushel, an average of 2s. 8d. a bushel, which is less than half the price paid for Australian-grown maize. Honorable senators will see that in view of those prices, Australian- manufacturers could not produce glucose at a price which would enable it to compete with the American product, and that therefore they must be granted substantial protection.
– “What is the cause of the cheapness of the American product ?
– I take it that it is due to the supply being equal to, or greater than, the demand.
– Why does it pay to produce maize in the United States of America for 2s. 8d. a bushel ?
– A great deal of ‘ the maize grown in that country is produced in states where cheap black labour is available. Our chief competitors in glucose, starch, corn-flour and maize oil, obtain their raw material for less than half the price paid by Australian manufacturers for the same material. If the industry is to remain, it must be protected.
– Surely £12 a ton is a reasonable protection?
– The Tariff Board made full inquiries, and apparently was satisfied that further protection was warranted. In the circumstances, we are justified in increasing the duty.
– It was not my intention to say any more on this subject, but I have been accused of making statements which I did not make. I did not say that this industry should not be protected; that the industry was on the same footing in Australia, as it is in the United States of America, or that by encouraging secondary industries we were destroying our primary industries. But I do claim that the Australian manufacturers have not fulfilled the moral contract into which they entered when they received additional protection some time ago, because so soon as the duty was increased, the price of maize dropped 2s. a bushel.
– And at the same time the price of glucose was raised.
– I give the Government credit for desiring to assist the primary producers, but increasing the duties on manufactured products will not achieve that end. It should not- be difficult in this case to fix a duty which would vary according to the fluctuations in the price of the raw material. The Government is doing that now in connexion with the wine bounty. Wineries may purchase grapes from small growers, but they can get a bounty on the wine produced from those grapes only on the condition that they have paid a specific price to the growers of the grapes. If they do not give that price, and it can be proved that they do not, they do not get the benefit of the bounty.
– It is the same with stone fruits.
– If it is possible to apply it to stone fruits and wine, it ought also to be possible to apply it to maize.
– It applies to stone fruits only so far as the payment of bounty is concerned, and not with regard to the protective duties.
– There is no essential difference between a protective duty and a bounty. Both are assistance given out of the public purse. If it is the intention of the Government to assist the maize-growers by means of this duty, it is its duty to carry the proposal to its logical conclusion byseeing that the maize-growers are assisted. In their evidence before the Tariff Board the manufacturers of glucose declared that they could not carry on with the existing protection, because they were paying 5s. 7d. and 5s. 9d. for their maize, and, now that they are paying so much less for their maize, it is perfectly logical to say that they ought to be able to carry on with the lower duty. Senator Greene put up a case, fathered it on me, and then proceeded very ably to demolish it. I admit that had I put up such a case I should have been well and truly scotched; but I did nothing of the kind.
– I am satisfied if the honorable member admits that the glucose industry is of assistance to the maize-growers.
– I should never be foolish enough to deny the possibility of such a thing. But my contention is that the effort of the Government to assist the maize-growers by means of this increased duty on glucose, is being defeated by the manufacturers, now that they have got all that they sought.
Question - That the request (Senator Ogden’s) be agreed to - put. The Senate divided.
Majority ……. . . . 15
Question so resolved in the negative.
Item agreed to.
Division IV. - Agricultural Products and Groceries.
Item 41 (Butter and cheese) -
– I should like to know what benefit is likely to accrue to the dairymen of Great Britain from the preference we propose to give them on butter. The Government has included butter in a list of items on which increased preference has been extended to the United Kingdom, and it must be very gratifying to the dairy farmers of Great Britain to learn that we are giving them a preference of1d. a lb. on butter, although we are increasing the duty from 3d. to 7d. a lb. I think we ought to know from the Minister how much butter we are importing from Great Britain, and what need there is for us to fear competition from that country. If we are giving the butter producers of Great Britain a preference, where is the need for increasing the duty against them to the extent of 3d. a lb. ? I have yet to learn that the dairymen of Great Britain are in the habit of exporting butter to Australia. I was always under the impression that Australian dairymen were seeking a market in Great Britain for their butter. There must be some justification for the action of the Government in increasing the duty against the British Empire. I can understand New Zealand, as part of the Empire, being desirous of sending to Australia, butter which might seriously compete with the produce of Australian dairymen, but I have yet to learn that the dairymen of Great Britain are anxious to export butter to Australia.
– In every item throughout the schedule a rate of duty has to be inserted in the British column. One of the reasons for fixing the duty on butter at 6d. British, is that it forms a basis for negotiating reciprocal agreements with other dominions. For instance, 6d. is the rate which would probably apply to New Zealand butter. It is not expected that there will be any material imports of butter from Great Britain, but at times butter in British ships’ stores has to be charged duty, and the rate will now be 6d. a lb.
– I agree that 3d. a lb. is a substantial increase in the duty on butter, and I have my doubts whether the people who are supposed to benefit from this extra protection will reap any advantage from it. I am under the impression that a bounty would be of far greater assistance to the dairy farmers than the duty now imposed, and that while the dairymen will not benefit by the increased duty, the consumer will pay more for his butter. Good butter is essential in every home. From what I have gathered by a study of the Government s proposals I believe that, instead of protecting the dairy-farmer, the increased duty will benefit the speculator. The higher duty may also increase the difference in the price between New Zealand and Australian butter by 8d. a lb. In 1925-26 60,000 boxes of New Zealand butter were imported into Australia, and during the same period 93,000 boxes of Australian butter were shipped overseas, where it was sold at 6d. per lb. less than Australian consumers were paying for New Zealand butter. This is a phase of the question which the committee ought to take into consideration, particularly when we are asked to support an increase of 50 per cent, in the duty upon a commodity which is a necessity in every home. The duty will not assist the dairy-farmer, who receives only the overseas parity for his product, and who in exporting butter does not benefit as he should, owing to the importations from New Zealand. Butter from that dominion can be brought in to fix a standard for the butter held in the cool stores in Australia. I am also informed that the Dairy Export Control Board, which was the largest importer of New Zealand butter, was also the largest exporter of Australian butter. When the late Honorable Frank Tudor was Minister for Trade and Customs in the Fisher Ministry, he refused to lift the embargo upon the export of butter until the local requirements had been met at a reasonable price. If the increased duty is imposed the butter dealers will place a certain quantity in cool storage when supplies are plentiful, perhaps to the extent of 300,000 boxes, in preparation for a winter shortage. That quantity could be obtained at 172s. a cwt., and on the approach of winter’ arrangements could be made for a judicious clearance. This opens the way for market rigging. New Zealand butter is imported and a standard price fixed on its landed cost, which benefits the speculator. If the Government’s proposals are adopted I cannot see how the butter producer will benefit. I have every desire to assist the dairy-farmer; but, as I said during the second-reading debate, I do not want that assistance to be given at the expense of the consumer. In this instance I can see the possibility of butter consumers being exploited in the interests of the speculators. Those who have had a considerable experience in the butter trade are of the same opinion.
– There are, perhaps, more persons engaged in the butter-producing industry than in any other rural occupation in Australia. Its ramifications were thoroughly investigated by the Tariff Board, and I presume that the Leader of the Opposition (Senator Needham) and other honorable senators are familiar with the conclusions at which it arrived, and the recommendations which it made. At present we are producing butter in Australia far in excess of our requirements, and consequently 40 per cent, of our total production has to be exported. Some of the conditions under which butter is produced in Australia are set out on page 8 of the Tariff Board’s report, to which I invite the close attention of the committee. The whole of the evidence submitted to the board showed the dairying industry to be in a stagnant and unpayable condition, and witness after witness, without exception, described the lot of the dairy-farmer as a constant struggle to make ends meet. The report goes on to show that it is possible to make the industry a payable one only by utilizing the labour of the dairyman’s family, and by the dairyman himself working unduly long hours. Even under the best conditions the dairy farmer can hardly pay his way. The industry, the board states, does not give anything like a fair and adequate return to the butter producer. With a view to improving the dairying industry those engaged in it adopted what is known as the “Paterson scheme,” under which a levy of lid. per lb. is collected on all butter sold_ in Australia, and a bounty of 3d. a lb. is paid on all butter exported. This scheme has been of material advantage to the industry, and has placed the dairy farmers in a better position than they ever previously occupied. The Leader of the Opposition seems to be under the impression that only a small quantity of New Zealand butter is imported from New Zealand, whereas the quantity received during 1926-27 totalled over 7,000,000 lb., valued at £526,000. For every pound of New Zealand butter imported and consumed in Australia an additional pound of Australian butter had to be exported, and 3d. on each pound taken out of the butter pool. Any one can see that if such a state of affairs continued for any time it would have the effect of completely destroying the Paterson scheme, which would be detrimental not only to those engaged in the dairying industry, but would have a most disastrous effect upon Australian prosperity. In the circumstances I am sure honorable senators will admit that the Tariff Board has made out an unanswerable -case in support of a substantial increase in the duty.
– Is the Paterson scheme to. continue in operation if the additional duty is imposed?
– Yes. I do not think it is the intention to advance the price of butter in Australia ; but the butter producers are anxious that the pooling system shall be continued. It is necessary that the butter market shall be protected from the competition of another country which has a greater surplus than we have, and in which a similar pool is not in operation. A levy is not imposed on New Zealand butter, and it is therefore possible for New Zealand producers to undersell the Australian producers. It pays them better to export to Australia rather than to the overseas markets. I think the Leader of the Opposition will admit that the payment of a bounty on butter exports would involve the expenditure of a large sum of money, and as the producers have a scheme which they are conducting very effectively, 1 cannot see that there is any justification for the Government assuming control over a business with which the dairymen are immediately concerned, and are quite capable of managing.
– It is admitted by everyone with a knowledge of the dairying industry of Australia that if there is any worker in Australia who deserves the fullest consideration it is the dairyman. The Leader of the Opposition (Senator Needham) is concerned about the price Australian consumers have to pay for their butter; but the inevitable effect of higher duties on foodstuffs is to increase the price. Unless the dairymen get the increased price they will continue to be the slaves of the community. Does Senator Needham expect the dairymen of Australia, with their wives and families, to work for less than a living wage?
– The honorable senator is clear on that point at all events. He is not prepared to allow the dairymen of Australia to work for less than a living wage. I can assure him that if Parliament grant this proposal the dairymen will even then not be earning a living wage. I know, because I have had experience in the industry. Senator Needham is also concerned about the possibility of the speculators reaping the benefit intended to be given to the dairymen. If I had the slightest doubt on the matter, that is to say, if I thought the speculators would reap any benefit from the item, and that the dairymen would not, I should not vote for it. I know, however, that the dairymen will get the full benefit of the Government’s proposal. For reasons which I think must appeal to Senator Needham, the dairymen of the Commonwealth have, in recent years, followed the lead given by trade unionists. They have come together in what must be regarded as the closest combination that it is possible to imagine. I can remember very well how they fared about 30 years- ago when there was no cohesion on their part. In those days the butter industry was entirely in the hands of speculators. I delivered milk to a butter factory at Kyneton for the magnificent payment of If d. a gallon. All that has been altered in recent years. The dairymen, as I have said, are now in the closest combination, and the industry is entirely controlled by co-operative societies. I do not suggest, of course, that there is no proprietary interest now in the industry. There is, but its influence is so slight that the proprietary companies have to do what the co-operative societies tell them to do. The cooperative companies are of two classes. One controls the manufacturing side of the industry, and the other the distributing side; but the shares in the distributing companies are, in almost every instance, held by the manufacturing companies, which, therefore, control the policy of the distributing concerns. Every increase in the price of butter is reflected in the monthly cheques received by the dairy-farmers. It is impossible for the few proprietary companies that are still in competition with the co-operative societies to do other than follow the lead set by the latter. If they attempted to do otherwise they would soon lose their entire business. There is no doubt that the consumer will pay more for the dairyfarmer’s products, but there is no doubt also that the dairy-farmer willstill be receiving less than a living wage, though thanks to the influence of the co-operative societies, he will get the full benefit of every increase in the market price. Senator Needham also expressed grave fears oh the subject of butter ‘ storage. That is always a difficult problem for the reason that the butter producing areas of Australia stretch from away north of Cairns, in Queensland, to Adelaide, in South Australia.
– There are butter producers in the southwestern portion of Western Australia now.
– I was about to say that from Adelaide there is a gap across the Great Australan Bight, until we reach the south-western district of Western Australia, where butter production is now carried on. Practically the whole of those coastal districts of the Commonwealth are engaged in the dairying industry. Reference is .made .frequently to the immense value of the wheat and wool industry to Australia. While I say nothing in derogation of those important industries, I think I am right in stating that few people realize the extent of the dairying industry in the Commonwealth. It does not contribute to our export figures as much as either of the other two industries I have mentioned, but .the total value of dairy products in Australia amounts to well over £40,000,000 a year. Because the industry is spread over such a large area and because also of the variation in seasons in the different States, it is extremely difficult for those who are controlling it to determine, as they must do months- in advance, how much butter to put into cold storage. It is absolutely necessary, in order to meet the winter trade of Australia, to make adequate provision for cold storage; but owing to the circumstances I have mentioned, it is. difficult to say how much should be put into storage. As honorable senators know, storage costs money. The co-operative societies have to pay their share-holding farmers every month for the butter they produce and in addition have to meet interest and cold storage charges as well as face the risks’ of deterioration. Then if, as sometimes happens, there is a mild winter in Queensland and New South Wales, or an early season in Victoria, or both, calculations as to the amount that should be stored may be upset to the extent of thousands of cases. However, I can say from my knowledge of the industry that those who are controlling it have for a long time past recognized their obligations to the people and accordingly they make full provision for winter storage so as to avoid any undue increase in price during the winter months. In this way the co-operative societies have served Australia well. There is a temptation, of c urse, not to put any butter into cold store at all and to allow the winter supply to take care of itself. If that policy were adopted, winter prices for butter would soar sky high. I know personally the people who have been controlling the industry in Australia for a number of years. I have met them on many occasions in conference and I know that they realize to the full their obligations to the consumers of Australia. If honorable senators have followed the market quotations for butter over a number of years they will have noticed that prices are steady within certain limits, and that the winter quotations advance only sufficiently to cover the actual costs of storage. I hope that I have removed from Senator Needham’s mind any misgivings he may have had as to the possibility of the speculator coming into the picture. I can assure him that there is no danger of that. As the industry is entirely in the hands of the co-operative organizations, every penny that it is possible to get out of it by cold storage or otherwise, goes directly into the pockets of the primary producers.
– I listened with interest to Senator Greene who, I know, has had considerable experience in the industry. Nevertheless instead of convincing me, the honorable senator has merely confirmed me in the view that the duties will operate to the disadvantage of dairy farmers and the consumers. I have had a conversation with a gentleman who has had as much experience in the industry as has Senator Greene, and whose views are entitled to every respect. His opinion is entirely at variance with that of my honorable friend. Senator Greene has confirmed me in the view that under this item the consumer will have to pay more for his butter. The Minister has admitted that the Paterson scheme will continue to operate alongside the increased duties.
– I thought the honorable senator was a protectionist.
– So I am. Senator Greene asked me just now if I wished to see the dairy farmers of Australia working for less than a living wage, and I assured him that I did not.
– They will be working for less than a living wage unless they get more money for their products.
– I take the view that every person, whether he be an employer or an employee, is entitled to the full reward of his labour. If the lot of the dairy farmer is as bad as has been painted by Senator Greene, a bounty of 1d. or l½d. per lb. would be of more assistance to them than the proposed duties which Ave are now asked to impose.
– Who pays the bounty ?
– The public of Australia, of course. Already we are assisting many other industries by means of the bounty system. If the position of the dairying industry is as bad as has been stated during this debate, it is the duty of the Government to come to the rescue of the dairy farmers.
– Is the honorable senator aware that a bounty of 2d. per lb. on our butter production would amount to £2,500,000 a year?
– Other industries are being assisted by the bounty system, and I see no reason why the same benefits should not be extended to the dairying industry. There is another factor which may have assisted to bring about the present condition of the dairying industry. I refer to the high prices which dairy farmers in Victoria have had to pay for their land. I still hold the view that if this duty is imposed, the speculator, and not the dairy farmer, will benefit, and the consumers will have to pay an exorbitant price for their butter.
– This duty is proposed by the Government in the hope that the producers of butter will obtain a fair price for. that commodity. Senator Needham has frankly stated that he is afraid the consumers will have to pay a higher price. The protection of many city industries has, resulted in an increased price being charged for their products. Senator !Needham, therefore, is not consistent when he adopts a different attitude in regard to country industries. He has expressed a desire to assist the primary producer, and has said he does not want him to work for less than a living wage. The butter industry has been made one of the most important in Australia. The exports of butter in 1921-22 were valued at £7,968,078, and in 1925-26 at £7,006,830. The estimated production for 1926-27 was 250,000,000 lbs. The number of persons engaged in ‘ the dairying industry in Australia is 143,785, comprising 89,760 males and 54,025 females.
– It is an industry that is worth considering.
– It is an industry which we must consider. Unfortunately, because of the high cost of production, producers have had to work for far less than a living wage. But for the employment of their wives and families, many dairy farmers would not have been able to carry on. They have also been compelled to work long hours. Evidence was given before the Tariff Board of the returns from a number of average farms. The figures in relation to one were as follows: -
It will be seen that there was a balance of £39 15s. for the farmer’s own labour aud the living expenses of himself and family. The evidence that has been tendered to a number of commissions during the last couple of years has gone to show that the average price received by the dairy farmer for his butter has been in the region of ls. ed. per lb., and that the cost of production has generally been over 2s. per lb. If Senator Needham does not want to see these men working for less than a living wage, he should take some action to protect them. Prior to the advent of this tariff New Zealand butter was being dumped into Australia at certain periods, with the result that the price of Australian butter was knocked to pieces. If that state of affairs had continued the dairyman would have been driven off the land, our commercial houses would have suffered, we should have lost our export trade, and when supplies became scarce the consumer would have had to pay a great deal more than he is paying to-day. It is to our advantage to protect the industry and retain our export trade. Senator Greene has put the position clearly in regard to the speculator. Speculators can import overseas butter at smash prices, and make huge profits by manipulating the market. If the industry is not protected tho speculator will import butter from New Zealand and elsewhere. Senator Greene also stated that to-day the co-operative companies practically control’ the industry. In South Australia the farmers’ Union purchases a tremendous quantity, while in Victoria the cooperative companies practically fix the price. As other industries are protected, dairymen should not be asked to work for less than a living wage. At the present time Australian consumers can purchase primary products at a cheaper rate than that which rules in any other country. .
– On many occasions I have proclaimed myself a protectionist. By that I mean a comprehensive protectionist. There are no boundaries or geographical limitations to my fiscal faith. I say emphatically that protection is a sound policy for the Commonwealth of Australia, and the majority of the people agree with me. Is there to be protection for one section only ? No ; it must embrace both primary and secondary industries. The man on the land will receive from me as much consideration as those who are engaged in other activities. I have said many times that for years there was as much sweating .in the field of agriculture as there was in our secondary industries in the yeaTs gone by. I belong to a party which time and again has declared war on sweating in every shape and form. This industry has been carried on under conditions which in some cases are almost indescribable. No holidays are gazetted for the dairy fanner; ne works on 365 days in the year, whether the weather be wet or fine. Many of us are acquainted with his struggles and his strivings, and know what his net return is at the end of the year. A member of another place has said that the conditions that obtain in the dairying industry are due largely to the high wages that are paid. To use an Australianism he was “ talking through his hat.” A short while ago the industry could not afford to pay anything like reasonable wages. According to. a report of the Tariff Board they varied from 25s. to 40s. a week, and keep. Those who are engaged in other spheres of activity are ‘ paid a much higher wage than that. I am not foolish enough to believe that the imposition of high duties will immediately reduce the price of commodities. In certain cases the effect for the time being has been to increase the price. On the other hand, other industries have been brought into existence, and with the adoption of uptodate methods have cheapened the cost of certain commodities. When I consider the matter I do not ask myself whether the result will be an increase, for the time being, in . the price of a pair of boots, a suit of clothes, or a hat. If I were actuated by such a motive I could not vote for a high duty. If it is a good thing to protect the clothing manufacturer, the boot manufacturer, or any other manufacturer, why should not the principle be applied also to the primary producer? I am an Australian, and I want the local market to be held by the Australian producer. In the case under discussion the producer is the dairyman. Labour .supporters in Australia do not want to wear boots, clothes, or hats that have been manufactured by sweated labour. I am satisfied that their sense of justice is such that they desire for others the same conditions that they themselves enjoy. The item may mean a. slight increase in the price of butter, but that is no reason why we. should not vote for it. The primary producers of Australia are entitled to the fullest consideration. Into the Australian -market which should belong to the Australian producer, butter to the value of £750,000 was imported during a period of two years. I am glad to be able to support this item, and to intimate that any other proper proposal which is in the interests of our primary producers will also receive my support.
Item agreed to.
Senate adjourned at 10.19 p.m.
Cite as: Australia, Senate, Debates, 8 March 1928, viewed 22 October 2017, <http://historichansard.net/senate/1928/19280308_senate_10_118/>.