12th Parliament · 1st Session
The President (Senator the Hon. W. Kingsmill) took the chair at 10.30 a.m., and read prayers.
– Can the Minister give us any indication of when Miss Amy Johnson is likely to arrive in Canberra and will be entertained by the Government ?
– Unfortunately, I cannot, for I noticed in the press this morning that she has had an accident. The Government cannot make any definite arrangements regarding her reception in Canberra until it knows when she is coming here.
– Is the Minister aware that the Federal Conference of the Australian Labour party sitting in Canberra, carried a resolution in favour of the payment of a bonus for the production of gold in Australia? If so, will the Government, when the matter of a gold bounty is under consideration, pay due regard to the fact that that body is now numbered among the influential bodies which support the gold, bonus campaign ? ‘
– I am aware of the resolution to which the honorable senator has referred, and I assure him that any representations made by such a representative body as the Federal Conference of. the Australian Labour party will receive the Government’s most sympathetic consideration.
Is it proposed to make any reduction in the personnel of the Permanent Military Forces ?
Is it proposed to introduce a system of rationing of employment in the Permanent Military Forces?
If the answer to question 1 and 2 is in the affirmative, will the Minister indicate what is the nature and extent of such reduction or of such rationing of employment, stating the ranks and numbers affected thereby?
– The answers to the honorable senator’s questions are -
asked the Leader of the Government in the Senate, upon notice -
– The answers to the honorable senator’s questions are -
Motion (by Senator Sampson) agreed to-
That Senator H. S. Foll be granted six months’ leave of absence on account of urgent business in the United Kingdom.
.- I move-
That the bill be now read a second time.
Briefly, the bill provides for the following important matters : -
I am sure that Senator Colebatch will agree with that objective.
– Is that expectation based on experience?
– No. This Government as a Government has had very little experience with bounties.
In deciding to introduce legislation under the Cotton Industries Bounty Bill, the Government had been influenced by two main factors. In the first place, recent experience had abundantly demonstrated that Australia must reduce the present very serious adverse trade balance. That can be done only by reducing imports, increasing local manufacture, increasing exports, or by a combination of those methods. In the second place, the Government had been greatly impressed with the exceptional potentialities for Australia of the cotton industry, in both its primary and secondary aspects.
With regard to the adverse trade balance Australia is now importing cotton goods to the value of approximately £11,000,000 per annum, and probably another £2,000,000 is represented by the cotton imported into Australia as part of thefabric of other commodities. The value of the purely cotton goods imported each year exceeds any other class of importations.
A close inspection of the various items of cotton importations indicates that there should be comparatively little difficulty in having cotton goods to the value of at least £7,000,000 efficiently and economically made in Australia ‘within a very few years. This anticipation is borne out by the very successful development within the last five years of the spinning of cotton yarn and the manufacture of cotton towels, tweeds, &c, in Australia. Even the few products that are now being made here, as a result of recent tariff and bounty assistance have caused the value of cotton importations to fall from over £13,000,000 to . the present amount of £11,000,000 per annum. What had been successfully done with regard to a few cotton products and other goods could, in the opinion of the Government, be done in respect of most of the cotton goods now being imported. The potentialities of the cotton industry in Australia are, therefore, very great on the secondary side of the industry; but they are no greater than in regard to the primary side of the industry, namely, the growing of seed cotton.
Cotton-growing in Australia has had a somewhat chequered career. Cotton was first cultivated in Queensland in 1860 on 14 acres. In ten years the area under cotton increased to 14,000 acres. But the reappearance of American cotton on the European market after the Civil War in the United States, ruined the Queensland industry. The industry was temporarily revived shortly after 1888, and manufacture was undertaken on two separate occasions at Ipswich. In 1913 the Queensland Government advanced 1-Jd. pep lb. on seed cotton, and ginned it on the owners’ account, the final returns to the growers being about 1¾d. per lb. The next serious attempt to develop the cotton industry in Australia was made in 1920, under the guaranteed price system inaugurated by the Theodore Government in Queensland. For three years the Queensland Government guaranteed an average of 5£d. per lb. to the growers for top grade cotton, but the result was a loss of £78,929 to that Government. Nevertheless, the area under cultivation rose from 166 acres to approximately 35,000 acres, and much new land settlement and employment were brought about. In 1922 the Queensland Government asked the Commonwealth Government to assist the industry, and the Tariff Board recommended a continuance of the system of guaranteed prices for a further four years. Then the Commonwealth Government advised the Premiers of all the States, with the exception of Tasmania, of its approval of a guarantee under the following conditions: - 1923- 24 season - up to 5d. per lb., irrespective of length ,of staple 1924- 25 season- 5d.’ per lb. (subject to future consideration as to ‘ length of staple) . 1925- 26 season: - 4£d. per lb. (subject to future consideration as to length of staple). ‘ ‘
During .those three years the Commonwealth shared the losses .equally with the States. Those losses were -
During the year 1925-26 the Queensland Government paid £18,771 more than its half share of the loss as it guaranteed an additional $d. per lb. over and above the price mutually ‘agreed upon by the Commonwealth and Queensland Governments. The Commonwealth Government also spent the following sums to assist cotton research work: -
Production iii States other than Queensland was on a small scale and only lasted a few years, but this does not mean that cotton will not be successfully grown in Australia outsi’de Queensland in the future. It .merely means that, in these early stages of the industry, Queensland has the greatest general advantages for growing cotton. In view of the increasing losses ?n.d other .difficulties associated with the industry, the Queensland Government in 1925 urged the Commonwealth to take over the whole matter. The Queensland cotton-growers and other interested parties asked for a bounty of 2d. per pound on seed cotton. The matter was investigated by the Tariff Board shortly after the 11th January, 1926, and the Board recommended a bounty of 2d. per lb. for’ six years, this rate to diminish by¼d. per lb. per annum to id. for the tenth year, after which the bounty would cease. About the same time the Tariff Board recommended that a bounty be provided for cotton yarn manufactured in Australia, provided that at least 50 per cent. of Australian cotton was used in its manufacture. The previous Commonwealth Government decided to link up cotton-growing with the manufacture of cotton yarn and passed the Cotton Bounty Act, 1926, which provided for five years as from 16th August, 1926-
That act appropriated £120,000 per annum for seed cotton and £60,000 per annum for cotton yarn, making a total of £900,000 for the five years. So far the following amounts of bounty have been paid under the act : -
It will be seen that there hasbeen no expansion in the production of seed cotton under this act, and little expansion in cotton yarn.Indeed, the results for seed cotton have been very substantially less than the results obtained from the guaranteed price system which existed from 1920 to 1926 inclusive. The production figures for seed cotton from 1920 are as follows : -
The Government is of opinion that the reduced production has been caused partly by the great uncertainty naturally instilled into the minds of cotton-growers by the frequent changes in the price of their product and in the policies enunciated by the respective governments from time to time. Growers have never been able to see ahead for more than a few years at a time, and past experience has caused them to fear either the withdrawal of the assistance they were receiving, the reduction of such assistance, or the introduction of entirely new methods. Furthermore, the constantly changing prices received for seed cotton intensified this feeling of uncertainty. In short, there were no elements of that stability and permanency of policy, conditions and prices, that are so essential to the success of any industry.
– And which do not exist in any industry.
– The fact that they do not exist in any industry with which the honorable senator is familiar does not deny the necessity for their existence.
– They cannot exist.
– I remind the honorable senator of the school-boy classic - never say “ I can’t “. It is a cowardly word, and often leads to idleness, folly and want.
– I did not say “I cannot,” but that “they cannot” exist.
– Those elements were particularly necessary in the case of an infant industry like cotton. Previous policies have been ill-balanced inasmuch as they granted assistance to the primary’ industry of seed cotton and the secondary industry of cotton yarn, but almost totally failed to protect the most necessary section of the industry, the tertiary section, which covers weaving piece goods and the many cotton commodities that actually enter into public consumption. Cotton yarn, after all, is merely a raw material for more finished cotton products, and experience has shown that the absence of protective duties on most of the finished cotton products has stultified the action taken in regard to seed cotton and cotton yarn, and has rendered the payment of bounties under the Cotton Bounty Act,. 1926, abortive to a fairly large extent. Since August, 1926, very considerable quantities of yarn have been imported from overseas, although Australian yarn was available. The lack of development in cotton yarn manufactured in Australia has caused the greater part of the Australian seed cotton to be exported to other countries, there to be made into cotton yarn, some of it no doubt returning to Australia in that form. In the circumstances, it is no wonder that considerable areas of cotton lands have reverted to dairying and other primary industries.
Immediately after the present Government came into office it dealt with the report of the Tariff Board entitled Cotton-Growing and Allied Industries, and decided to adopt all the recommendations of the Board in favour of increased Customs duties. On the 22nd November, 1929, the Government introduced a new tariff schedule which provided, inter alia, for new and/or increased duties on the following cotton products : -
Piece goods (knitted).
Costumes, dresses and robes.
Waddings and Cotton Wool.
Raw cotton (includinglinters ) .
This was the first step, and in the brief period that has elapsed since, it is clear beyond any doubt that these duties will substantially increase the manufacture of cotton products in Australia and also the demand for Australian seed cotton and cotton yarn.
After carefully weighing up the whole position, the Commonwealth Government has now formulated a comprehensive policy specially designed to place all phases of the industry, both on the primary and on the secondary sides, on a stabilized basis for a final developmental period to and on the 30th September, 1936.
This policy was exhaustively considered at a recent conference in Canberra between theRight Honorable the Prime Minister, the Honorable the Treasurer, the Acting Minister for Trade and Customs, and representatives of the Queensland State Government. Another conference was also held in Canberra between representatives of both Governments and of the cotton-growers and the spinners of cotton yarns. As the result of these conferences and other examinations of the position, the Government came to the conclusion that the Australian cotton industry can be established on. a sound basis. Bymeans of improved farming methods the earlier handicaps in cotton growing in Australia are being rapidly overcome. The cost of bringing the cotton crop to maturity is now approximately equal to that obtain ed in the United States of America.Australian cotton, moreover, has no boll weevil menace and brings, on the average, from¾ d. to1d. per lb. more than American middling cotton. Our system is free from multiple handling costs and speculation costs such as obtain in the United States of America. Furthermore, arrangements just concluded by the Queensland Cotton Board to purchase’ the Queensland ginneries from the British- Australian Cotton Association Limited will, it is believed, appreciably reduce the cost of ginning that has obtained in the past. In view of these circumstances the Government considers that, if afforded opportunity for a reasonable period to bring to matur-. ity the policy that has now been formulated, there is a good prospect of cottongrowing establishing itself so firmly that ultimately it will be maintained by means of a tariff only, and without the necessity for bounties.
The same applies to the secondary industry of cotton yarn. The Government’s policy is partly contained in the measure now before the House, entitled “The Cotton Industries Bounty Bill”,
The bill provides, as recommended by the Tariff Board, for the repeal of the existing Cotton Bounty Act, No’. 51 of 1926. It also provides for the following rates df bounty : -
The effect of these fates is to continue those provided for in the present Cotton Bounty Act for a period of slightly over one year after that act would have expired, that is to say the present rates will continue until 30th , October, 1932, instead of 15th September, 1931. In this connexion,- , the Tariff Board recommended that the present seed .cotton bounty of 1½d. per lb. be continued for four years as from the passing of a new act, and that the cotton yarn bounty be increased from! 1/3 d. to’, id.. per count per lb. for the same period. How eyer, the Government considers it much better to devise a plan for eliminating these bounties altogether in the shortest possible time. To continue the existing rates for four years would almost inevitably necessitate a still further period of bounties, as it would be impracticable to cut off the bounties suddenly from the full rates to nothing. Few industries could survive such a sudden and drastic change. Gradually diminishing rates of bounty over a reasonably long term. of years have, therefore, been adopted. The time is long enough to enable the cotton-growers to prepare in advance for the future, and to study unceasingly how they may increase their yields per acre and reduce all items of production, harvesting, ginning and marketing costs. Similarly, yarn manufacturers may plan ahead to improve their factory methods, reduce production,overhead and selling expenses, secure a grip of the Australian market, and so be able to carry on effectively with the lower rates of bounty and, finally, no bounty at all.
The adoption of the Tariff Board’s rates would have involved the payment of approximately £1,000,000 in bounties for the four years proposed, and probably would have meant further bounties after that. The Government’s scheme will cost about £800,000 for a period of six and a half years and will, moreover, have the special advantages which I have just mentioned. I desire especially to inform honorable senators that of the £900,000 appropriated by the Cotton Bounty Act 1926, only £318,000 has been spent to date. The balance of that appropriation, £582,000, which will be cancelled by thi! present bill, may be regarded as a set-off against the estimated total expenditure of £800,000 under the measure. In other words, the bill increases the existing unspent appropriation for cotton bounties by only £218,000 for the extra five years it is proposed to continue these bounties.
The recent conference in Canberra recognized that the outstanding need of the industry, if it is to enjoy that real expansion which is essential appreciably to improve Australia’s adverse trade balance, is that it be given genuine stability, and that such stability can be afforded only by a fixed payable price for seed cotton for a long term of years. It was unanimously agreed by the conference that subject to the Commonwealth Parliament passing legislation for the extension of the bounties on a. diminishing scale to the end of the 1936 season, as provided in the bill now before the House, the spinners should pay for their purchases of raw cotton lint but a price equivalent to an average of 5d. per lb. net to the growers for their seed cotton. This plan will operate as from the 1931 season. It was also agreed that the Commonwealth Government should impose duties on cotton goods from timo to time, as and when the volume of manufacture sufficiently approaches Australia’s local requirements, and that, where it will not prejudicially affect the capacity of yarn spinners to pay the growers the stabilized price, equivalent to 5d. per lb. net for such cotton, the rates of bounty in this bill will be reduced by the equivalent of the additional tariff protection so given. On the other hand, the Queensland Government has recently agreed to guarantee a loan of £155,500 . by the Commonwealth Bank to the Queensland Cotton Board, of which £137,500 is for the purchase of the ginneries and cotton seed oil mills of the BritishAustralian Cotton Association Limited, and £18,000 is for the modernization of the ginning plant, handling equipment, &c. It is expected that substantial savings in the costs of ginning will be the result of this transaction.
The Queensland Government has also arranged with the cotton board that the board will reserve a capital fund of approximately £18,000 for the erection of a new oil mill at Rockhampton or Gladstone - and the State Government will find the balance of the money required for this purpose. Furthermore, the Queensland Government has undertaken -
For the . 1,930 season, which has just begun, the Queensland Government originally guaranteed 5d. per lb. average on only 10,000 bales of cotton subject to a maximum of £30,000, and approved of a first advance to the growers of only 3,½d. per lb. The Acting Minister for Trade and Customs considered these arrangements inadequate, because the 1930 crop is expected to produce 12,000 bales, and a guarantee of 5d. may require more than £30,000. Accordingly, he made suitable representations to the Queensland Minister for Agriculture, and the Queensland Government has now agreed to a first advance of 4¼d. per lb. for the 1930 season. With regardto the next sixseasons, 1931 to 1936, inclusive, the Commonwealth Government has arranged with the Commonwealth Bank to make a first advance to growers of 4½d. per lb. on top grade seed cotton. The bank will also advance 8d. per lb. to the Queensland Cotton Board to cover ginning and other expenses.
The Government feels that there is no need to stress the very great advantage to a young primary industry struggling to its feet, of stability for such a long period ahead. It will encourage growers to clear more land, to prepare it efficiently well in advance of planting time, to purchase equipment, and generally to extend their operations.
– Will the Commonwealth Government guarantee the advances made by the Commonwealth Bank?
– The Commonwealth Government has arranged with the Commonwealth Bank for advances to be made.
– Who is responsible for them?
– The person who receives them. It will give confidence to the banks to stand behind the farmers in such endeavours. It will afford encouragement to new settlers to go into the industry. From the manufacturers’ point of view, the advantages of stability of price of the raw material and of protection from encroachment on the market by foreign-made goods will be inestimable. In order to leave no stone unturned in the endeavour to achieve success, the Commonwealth Government desires to see an increased production of cotton in districts which have proved suitable for the crop. This is the obligation of the State Governments concerned. The Queensland Government has submitted’ to the Commonwealth particulars as to the nature and extent of the lands which it has available. The Commonwealth Government has arranged with the Commonwealth Bankto lendthe Agricultural Bank of Queensland, on the security of an approved debenture to he issued by that institution, the , sum of £250,000, if required, for the financial year beginning 1st July, . 1930, such funds to be earmarked for assistance to settlers in the development of cotton farms through the usualagriculturalbank agencies. This assistance by theCommonwealth is merely to help the; State with development during the present financial depression. After the next financial year, it is expected that the State will push on with cotton lands development out of its own loan moneys.
As a token of good faith, the Commonwealth has arranged with the Queensland Government to establish a cotton development advisory committee, representative of governments and other interests, for the purpose of co-ordinating activities in relation to the cotton industry. The committee will be comprised of the following: - A nominee of the Minister for Trade and Customs (as chairman); the general manager of the Queensland Cotton Board; the UnderSecretary, Department of Agriculture, Queensland; the Collector of Customs for Queensland; the cotton specialist for Queensland; the chairman, Queensland Land Administration Board; the manager, Agricultural Bank of Queensland; the secretary, Australian Workers Union, Queensland Branch; the president, Brisbane Chamber of Commerce; the president, Rockhampton Chamber of Commerce; the president, Gladstone Chamber of Commerce. Members of the committee will act without remuneration, viewing their task as a privilege of public service. The chambers of commerce will be expected to meet the expenses of their delegates. The committee, therefore, will entail practically no- cost to either government. The committee will meet periodically and send reports to the Commonwealth and State Governments. This committee will co-ordinate the important matters . of land settlement, enlargement of production, financial-assistance, experimental’ work; marketing activities, and other aspects of general value to the cotton industry, and be in the best position to advise the respective governments as- to what action is considered necessary from time to time to ensure the sound, progressive development, of all phases of the industry. .
The Queensland Minister’ ‘for Agriculture,;.who has charge’ of cotton matte’r’s in that State, has’ expressed his satisfaction with- the policy ; just Outlined. The Queensland Cotton Board, the members of which are’ elected by the cotton-growers, has also endorsed the proposals. Further- more, the Government has received many assurances from spinners and knitters that the bounty and tariff arrangements of the Government are acceptable to them, and will make for great progress in. the cotton industry. On the tariff side of the industry, although this bill contains no mention of tariff duties, there has been a little difficulty with some of the knitters regarding imported cotton yarn rates of duty. Such difficulties always occur in the initial stages following upon the introduction of general tariff schedules. Industries require time to adjust themselves to new conditions. However, this particular difficulty was satisfactorily adjusted on 19th May at a conference of spinners and knitters in Melbourne, convened by the Acting Minister for Trade and Customs. The Government anticipates that its comprehensive cotton policy will have a far-reaching effect. It is considered reasonable to estimate that by 1936 the production of cotton in Australia will have developed from the present 9,000 bales of lint to 50,000 bales, all being manufactured in Australia in cotton mills located in the Southern States, as well as near the main source of production in Queensland. There is also the possibility of an additional cotton seed oil mill. By the year mentioned, if our objective has been obtained, the value of the industry to Australia will be at least £5,000,000 per annum.
Senator Sir GEORGE PEARCE (Western Australia) [11.8]. - In view of the present state of the business paper, I do not propose to ask for an adjournment of this debate. Perhaps I have an advantage over some honorable senators because, as Minister for Home and Territories, I had for some years a great deal to do with the handling of matters associated with the cotton industry, with the vagaries of which I became familiar. Later, when the then Minister for Customs took the matter over, and associated it with the manufacture of cotton yarn in Australia, I still retained an interest in its development. I know of no industry in Australia that has suffered more from politics and ill-directed enthusiasm than this one. There have been a great many young men in a hurry connected with it. I well remember that when the Commonwealth associated itself with, a guaranteed price, we were continually being pestered by the Government of Queensland, which used the guarantee for political purposes, and used to bid against the Commonwealth Government. When the Commonwealth had satisfied itself, on the advice of experts, that a certain, guarantee was the safe limit to which we could go, we frequently found that the Queensland Government would offer id. per lb. -more in order to make itself popular in. certain constituencies, and then, having involved itself in a costly undertaking, would ask the Commonwealth Government to share the burden with it. For some time the Queensland Government’s cotton policy was directed by a gentleman who happened to have grown a cotton bush in his backyard. Because this bush, stimulated by special attention, performed prodigies in the way of production, this gentleman came out as an expert on cottongrowing, and completely disregarded the advice of the -expert, Mr. Evans. He promulgated in ‘Queensland his own ideas, particularly in regard to ratoon cotton. There was a controversy at the time as to whether cotton should be grown from seed each year, or whether it should be cut down and allowed to grow again from the roots as in the case of sugar cane. All the experts were against the growing of ratoon cotton, but the gentleman to whom I have referred, having succeeded in growing the bush in his backyard for several years, came out as the champion of ratoon cotton. As a result of his advice, the cotton -growers of Queensland were for some time divided on the matter until, by bitter experience, they learnt that ratoon cotton was a failure. There was further confusion regarding the variety of cotton which should be grown. This gentleman set up as an authority on varieties, with the result that many varieties were grown in Queensland, and no distinctive type of Australian cotton was produced. !Now we have another young gentleman in a hurry, the ‘Assistant . Minister for Trade and Customs - a new prophet proclaiming the means of salvation by way of cotton.
There is no need for this bill at the present time. The present act continues in force until August 1931. Mr.
Forde, however, represents a constituency in which some cotton is grown. He has to show that he is the” saviour of the’ industry, and so he comes along with a: fresh bill. In one particular I am in agreement with, the bill, and that is lr regard to the diminishing nature of the bounties to be paid. I only wish that associated with that there was a provision, for a gradual diminution of the tariff’ duty, but no such promise is held out. On the other hand, a threat has been made that the duties will be made higher and’ higher.
– There ill be prohibition,.-
– Yes, that is what* it will amount to. I wish that the Leader of the Government in the Senate would give some indication of what the new duties will be.
-*-! can get the figures for honorable senators.
Senator Sir GEORGE PEARCE.We cannot dissociate tariff duties from bounties. I have here the report of theTariff Board, presented to the Senate on 27th May, 1926, recommending the deferred duty to be imposed on cotton yarn. The board stated that the cotton yarn industry could not be carried on with less protection than was afforded to the woollen industry. It recommended that the duties on item 392a, which is cotton yarn.” should be as follows : British preferential, 20 per cent.; intermediate, 30 per cent.; general 35 per cent. The existing duties are: British, 35 per cent; intermediate, 50 per cent.; and general, 55 per cent;, so that the modest recommendations of the Tariff Board have been almost doubled.
– That is only in the case of yarn.
– That is true. In dealing with this bill, we cannot lose sight of the fact that what is practically a prohibitive duty has been placed on imported cotton yarn. This has already caused considerable trouble among the knitters, and strong protests have been made against the heavy duties on what is practically the manufacturers’ raw material. Already the new tariff has caused a large amount of unemployment.
There is an important omission, The Minister said that it is estimated that the expenditure under this bill, when it becomes an act, will be £800,000. Under the act of 1926, there is a provision limiting the expenditure in any one year. The items were read by the Minister, who said that the expenditure in any one year in bounty on seed cotton was limited to £120,000, and on cotton yarn to £60,000; but there is no such limitation in the present bill, and that is a vital omission. I point out the essential difference between the expenditure under this bill and under the Wine Bounty Bill. It was, and could be, justifiably argued that the amount of the wine bounty was being found from the excise duties imposed on the wine manufactured in Australia; but that contention does not hold in this case. There are no excise -duties here; the whole of the money is to be provided out of the Consolidated Revenue. So we have to recognize two facts in connexion with this proposal. The first is that, by these prohibitive duties, the cost of cotton goods throughout the Commonwealth will be immensely increased, and wherever cotton yarns enter into any other manufactures, the cost of these goods will be increased, and the extra burden will have to be borne by the people of Australia. In addition to that, a sum of money estimated by the Minister at £S00,000 for the period of this bill, but which, so far as the bill itself is concerned, has no limit, is also to be found, by taxation, from the Consolidated Revenue fund for the payment of these bounties. I suggest that the Senate should ask whether the industry is worth that huge expenditure. Surely this is a time when we must look at the matter from this point of view.
– It would increase the cost of living to the people.
Senator Sir GEORGE PEARCE.Of course. We must ask ourselves this hard, practical question. This is no time to throw money away on industries that are no.t worth while. Before the bill is passed we should be satisfied that this industry justifies the enormous expenditure that the bill involves. Senator Daly said that the Australian costs of cotton growing approximated those of the United
States of America. He referred only to the cost of cotton growing; but growing cotton is the smallest part of the expenditure in the production of seed cotton. . It can be grown at a comparatively small cost, but the expensive part of the industry is the picking of the cotton. In the United States of America, the cost of picking is id. a lb., while in Australia it costs from 1-^d. to 2d. a lb., according to the heaviness of the crop. If the crop is light, the cost of picking is 2d. a lb., and, if there is a heavy crop, the cost is lid. a lb. When we have grown the crop, and come to harvest the seed cotton, the comparison with the United States of America fails. Having picked the seed cotton it is necessary to gin it. I am not in a position now to give the costs of ginning in Australia as compared with those in the United States of America, but I should say that these, also, are substantially higher in Australia.
Some figures have been supplied by the Tariff Board as to the costs of manufacturing cotton yarn. When the late Government was dealing with this matter, the Minister submitted certain questions to the Tariff Board. I have before me a copy of the supplementary report on cotton yarn presented by the Tariff Board on the 9th July, 1926. In answer to the question “ What are the costs of making cotton yarn in England and America respectively?” The board replied -
The board is not in possession of these particulars, but it was stated in sworn evidence in favour of the application that the cost of producing 1 lb. of cotton yarn in America is 7.0d., whilst in Australia the cost is 11.75d. Further confidential evidence was given showing in detail the rates of wages in the cotton industry in Great Britain and Australia. An examination of these figures show that the rates in Australia are approximately 50 per cent, above those paid in the United Kingdom.
It will be seen that we are endeavouring to establish an industry in which the cost of picking, which is the main item of expenditure, is three times higher in Australia than in the United States of America, and in which the cost of producing 1 lb. of cotton yarn is practically ls. as against 7d. in America. I have already mentioned that the present act continues until August, 1931, and, therefore, if this bill is not dealt with before the Senate adjourns - I understand that there is to be an adjournment of a fortnight- - the industry will be placed at no disadvantage. This is not a bill which should be rushed through Parliament; it should receive full consideration.
– But I point out that one manufacturer wishes to open a factory here.
– He has the benefit of the present bounty on cotton yarn. The Minister made another significant remark. He said that the industrial provisions in this bill are the usual industrial clauses contained in bounty bills. They are, but with an addition which he did not mention. I shall come to that point shortly, and state what the addition is.
– Can the honorable senator tell us anything about the value of this yarn, upon which a duty is levied and a bounty is paid.
Senator Sir GEORGE PEARCE.I intend to say something on that matter, too. When the previous bounty was made payable on cotton yarn, there was a somewhat similar provision to that in this bill with regard to the proportion of Australian cotton that had to be used in its manufacture. I well remember that, in the first year in which the bounty was in operation, we had trouble over that matter. The Australian manufacturers of yarn declared themselves unable to use the prescribed percentage of Australian cotton. They gave their reasons, and said that they would not be able to sell their product. The cotton yarn is the raw material of the knitters, who want the kind of yarn that will enable them to sell their goods. They have no prejudice against Australian yarn, but they must have regard to the class of article demanded by the purchasers of their goods, which have to be made from yarn spun from cotton of a certain type. The Tariff Board, in a report presented by it on the 27th May, 1927, said-
There is one phase of the question that the Tariff Board regrets, and that is the impracticability of the use by the local mill of only Australian-grown cotton, and after very carefully considering the question, the board lias reached the conclusion that, although it is very desirable to encourage the use of Australian cotton in the production of yarn on which bounty may be paid, the time has not yet arrived for the imposition of conditions to make the percentage of Australian cotton to be used either high o’r rigid, for the following reasons : -
The long staple Australian cotton commands a very high price in the world’s market, and is too expensive to be used exclusively for making yarn for calico, duck, towelling, &c.
Let me point out here that the Commonwealth and Queensland Governments, in dealing with the matter of the encouragement of cotton-growing, had in view the selling of that cotton on the world’s markets. As the result of inquiries, and the experience we had at that time, we found that we could grow a high-grade cotton in Australia, which would command a payable price on the world’s markets ; but we were not able to produce short-staple, low-grade cotton at a price at which we could compete in the world’s markets. Therefore, the natural tendency in Australia was to concentrate on long-staple, high-grade cotton, such as durango, in which we had some chance of competing in the outside markets. But that is not the kind of cotton that the maker of the yarn requires to meet the demands of his customers. He wants a low-grade cotton of shorter staple. Thus we found that, by our policy of encouraging the production of high-grade cotton, an article was being produced in Queensland which was unsuitable for the manufacture of yarn, and the yarn manufacturer found himself compelled, in order to provide for the requirements of his customers, to buy imported low-grade cotton.
– Was the highgrade cotton exportable at a profit?
Senator Sir GEORGE PEARCE.Yes, with the aid of the bounty. The report of the Tariff Board continued -
Accordingly, the Tariff Board is disposed to recommend that the conditions in the early stages of this industry be as flexible as possible, trusting rather to the patriotic impulses of the cotton yarn manufacturers, who will have the additional incentive that the Tariff Hoard will not be disposed to recommend either a renewal of the bounty on similar terms, or to recommend the application of the proposed deferredduty on cotton yarn unless the local manufacturers have done and are doing all they can to encourage the use of Australian raw cotton.
My reading of the bill is that the Government has entirely disregarded the advice contained in that report.
– Have the conditions changed since that report was furnished ?
– I am not aware that they have. The Government, contrary to the advice of the Tariff Board, proposes in this bill to make the conditions as to the use of Australian cotton more rigid.
– The Tariff Board has submitted a much more recent report on cotton.
Senator Sir GEORGE PEARCE.If so, I have not been able to obtain it. When I asked for the Tariff Board reports, only those from which I am quoting were supplied to me.
– I have a report dated March, 1929.
Senator Sir GEORGE PEARCE.I have not seen it, but whether the report of the hoard be dated 1926 or 1929, the facts brought out during this inquiry cannot be disregarded.
– The later report practically wipes out the previous reports.
Senator Sir GEORGE PEARCE.If the previous decision of the Tariff Board was arrived at under a misapprehension, or if later evidence induced the board to come to another decision, it extraordinary that Senator Daly did not mention it in his second-reading speech. As to the value of the cotton yarn industry, the Tariff Board reports -
Question 1. - How many employees are now engaged in the spinning of yarns, and what prospect is there of increase in the number?
Answer. - There are 540 employees engaged in the preparation of the material and the spinning of yarn out of a total number of 2,000 hands employed by Geo. A. Bond and Company Limited. The annual wages bill for employees engaged in this phase of the industry is £80,000, the total wages paid amounting to £300,000 per annum, representing £150 perannum to each employee.
Should the bounty be granted, it is anticipated that the present output of cotton yarn will be doubled, necessitating the employment of 500 additional hands.
That prophecy, at any rate, has not eventuated, because soon after this report was published Geo. A. Bond and Company went into liquidation.
Senator Daly has told us that the bill contains the labour-regulating clause usually found in bounty bills. It is true that sub-clause 6 of clause 13 is similar to the labour-regulating provision in the Wine Export Bounty Bill we discussed last night, but under sub-clause 7 of clause 13 the Minister is given an additional power.Not only can he go to the Arbitration Court and ask for a certificate as to whether the labour conditions in the industry are fair; he can also set up a board in regard to any branch of the cotton industry. In other words, he can ignore the Arbitration Court altogether and become himself a labour-regulating authority. It is an entirely novel proposition, and in committee I propose to ask honorable senators to strike it out. If such a provision is thought to be necessary, why was it not inserted in the Wine Export Bounty Bill?
I understand that the union rate for picking cotton is 2d. per lb. The bounty varies from l½d. per lb. for a thick crop, to 2d. per lb for a thin crop, and is, therefore, equivalent to the whole cost of picking. The people of Australia are thus to be asked to pay the whole cost of the picking of the cotton and, as that is the chief item in the cost of production, it amounts to this: the community at large is to be asked to pay practically the whole of the cost of producing seed cotton. Seed cotton is worth about 5d. per lb. At any rate Senator Daly mentioned that 5d. per lb. would be received for the sale of the cotton. In these circumstances the people of Australia are to be asked to pay 40 per cent, of the total value of the cotton crop. If we were rolling in wealth and had plenty of money, we might say, “ Let the cotton-growers have a good time,” but can the people of Australia afford it? Could they afford it in prosperous times let alone a time when the national income has been reduced by the drop in the prices of wool and wheat?
– Would the honorable senator not be prepared to support a white Australia industry as against one carried on in Egypt or South Africa by the employment of black labour?
– I am prepared to support any industry in Australia that has a fair chance of hecoming a real Australian industry. Pineapples could be grown at the South Pole and with white labour, but at what a cost !
My study of the cotton industry has led me to the conclusion that in Australia it is only possible as a family industry; that it is not possible as a plantation industry paying award rates of wages. That is the brutal truth and to try to dodge it is useless..
– It was always put forward that it was a domestic industry.
-When the late Government fixed a guaranteed price for cotton it was our idea that cotton-growing should be carried on in association with another industry; that a dairyman could, in association with his dairying business, put in a crop of cotton ‘ as a sort of side line. Colonel Evans, one of the world’s experts in cotton-growing, a gentleman who visited Australia on behalf of the Empire Cotton Corporation, said that in his judgment cotton-growing would never succeed in Australia on a plantation basis and that the only hope for it was to carry it on as a family industry associated with some other primary industry such as dairying.
– It is being carried on along those lines to-day.
-To the extent that it has succeeded in Australia it has been carried on a.long those lines.
– What comes of the allegedly high wages paid to American labour if we cannot compete with American cotton ?
-I do not know that there are any allegedly high wages in the cotton industry in America.
– The work there is all done by contract and mostly by Mexican labour.
-Inquiries made by the late Government showed that the picking rate of 2d. per lb. was based upon the Queensland award rate for unskilled labour. If that rate is stipulated under the provisions of this bill, cotton-growing will have as much chance of success as would pineapple growing at the South Pole. The industry will have some capacity for development only if it is encouraged as a domestic or side-line industry, in association with some other.
The bounty passed in 1926 was for five years, and will thus not run out until 1931. I agree with the present proposal to make the payments on a sliding scale, but as the rates of bounty on yarn are the same for the first year as they were in the 1926 Act, there can be no justification for haste in dealing with this hill. No doubt the Acting Minister for Trade and Customs (Mr. Forde) would very much like to be able to go to Rockhampton and say that he got the measure through both chambers in record time, and that he had “ stabilized “ the cotton-growing industry, but I submit that I have already shown the need for a thorough examination of the bill before it is passed. I am prepared to .vote for the second reading because the bounty could not be cut off suddenly - it is wise to taper it off - but in committee I shall support any amendments that will have some regard for the actual facts relating to cotton-growing.
– I am supporting this bill because the successful establishment of cotton-growing is of nation-wide importance. The production of cotton is one of the world’s greatest industries.
In all its ramifications it employs many millions of workers. Other countries have realized the importance of being entirely independent of cotton imports. Japan has encouraged the growing of cotton both in Manchuria and South America. From a defence point of view the cotton industry is likely to be of great importance to this country, for it will help to people our open spaces, which, if left uninhabited, will always constitute a national danger. Cotton-growing is essentially a family industry which leads to closer settlement.
– Is it a suitable industry for our large, open spaces?
– Yes. There are many thousands of acres of land in Queensland and other parts of Australia admirably suited for cotton-growing. In another direction, also, cotton plays an important part in the defence of a country. Cotton is the basis of many high explosives, and is also used in a variety of ways in the equipment of an army. Cotton is, moreover, one of the most important items in the industrial and domestic life of our people. The industry is worth encouraging. This bill proposes to give that encouragement by means of a bounty. I am concerned with the primary industry of cotton -growing rather than with the secondary industry of the manufacture of cotton goods, for 1 believe that it is the former which is in greater need of assistance. The bill provides for the payment of a bounty on a sliding scale for a period of five years, in order to establish the industry on a sound basis. During the first twelve months the rate of bounty is to be 1-Ad. per lb. for high-grade seed cotton, and Jd. per lb. for second-grade » seed cotton. That rate is to apply for one year from the 30th September, 1931. The rates of bounty will hp reduced each year until, during the .fifth year, they will he -id. and id. per lb. for high-grade and low-grade seed cotton respectively. It is expected that, at the end of five years, the cottongrowing industry will be able to stand on it.« own feet. I regret that the Government has not seen its way to treat the manufacturing side of the cotton industry in the same way by giving an assurance that the tariff protection afforded to it will also be reduced to a minimum at the end of the five-year period.
The grading of their cotton is one of the greatest difficulties which growers will have to face. If the grading is to be in the hands of government officials, the growers will probably suffer. I regret, also, that there is such a big disparity between the rates of bounty on the two grades of cotton. Unfortunately, growers will be forced to accept the decision of the grader as to the grades of their cotton. It is probable that most of them will find their product graded as second-class.
– Does the honorable senator suggest that it will be unfairly graded ?
– No. But there is always a tendency to class an article in a lower grade.
– Is it not just as likely that the grader will place the cotton in too high a grade?
– That has not been the experience of cotton-growers.
The growing of cotton can be carried out, at a relatively low cost. A cottongrower has not to lay out large sums of money before he gets his first crop. The main expense is that incurred in clearing the land. That expense would have to be incurred whether the land were used for the growing of cotton or other agricultural purposes. The heaviest item of expenditure in the growing of cotton is the picking of the crop. In my opinion, tile success of the industry will depend on whether raw cotton can be produced at or about world’s parity.
– Does the honorable senator think that the industry can afford to pay 2d. per lb. for picking the cotton?
– I am not sufficiently acquainted with the industry to know whether it. can afford that rate or not. but. according to the Leader of the Opposition (Senator Pearce), 2d. per lb. for picking is a high rate. The bill does not fix any price for the picking of the option. Clause 13 provides that an agreement may be made with an industrial authority in a State, and that any such agreement may be registered. In Queensland there is such an industrial authority, for the Board of Trade fixes the rates of wages and the conditions of labour for industries in that State.
– Has the cost of picking averaged 2d. per lb. ?
– Are pickers paid by the day or by the pound?
– They are paid by the pound. I agree with the Leader of the Opposition that if cotton-pickers demand excessive wages, the industry will be killed at birth.
– What can a picker earn at 2d. per lb.?
– I understand that a fair day’s picking in America is 250 lb. I should say that in Queensland 150 lb. of cotton would be a fair day’s picking.
– It would require a good man to pick 150 lb. of cotton in a day. The average would be nearer 100 lb.
– We can take it that an average day’s picking would be between 100 lb. and 125 lb. of cotton.
– Would it make much difference if “snapping” were introduced ?
– I am not acquainted with that branch of the industry. I was merely pointing out that if the labour necessary for the harvesting of the crop represents 40 per cent, of the price received for the cotton, the industry is doomed to failure. If the growing side of the industry is squeezed out because of high costs, the manufacturing section must follow it. The cost of cottonpicking in Australia is nearly three times as great as it is in the United States of America. That is a tremendous difference. We should endeavour to reduce working costs until they are considerably lower than they are at present. The advantages in favour of growing cotton in Australia are numerous. In Queensland there are large areas of country in the upper Burnett, Callide and Dawson Valley, that are eminently suitable for cotton-growing. I favour small mixed farmers taking up cotton culture as a side line. By working under the family unit system it would be possible to place the cotton industry, which is so essential to the prosperity of Australia, on a sound basis.. The Queensland Government is doing much to help growers by the provision of transport and by granting .other material assistance. I have it on good authority that large tracts of country in North Australia, adjoining the Queensland border, are also very suitable for cotton-growing. If the industry was successfully established and resulted in the populating of the far north of Australia it would more than compensate for any expense incurred. To indicate that it is only necessary to have fair average country to make a success of cotton-growing, I mention that its culture extends from the far north of Queensland to the New South Wales border. Fortunately, all those areas are clean country. We have not been subjected to the boll weevil and other pests which have ravaged the crops and menaced the industry in America and elsewhere. By the careful cultivation of seed we should be able to keep Australia free from those pests for all time, and, by so doing, confer an enormous advantage on cottongrowers in this country.
The establishment of the industry in this country must be viewed nationally. To assist honorable senators to visualize to what a great extent it would create employment, I mention that during the last twelve months we imported cotton textiles to the value of £11,000,000. ‘ What, a help it would be to our unemployed if we could retain that money in Australia. The potentialities of a flourishing cotton industry in this country are so tremendous that the bill demands the serious consideration of all. It should be our endeavour to cater in Australia for all ramifications of the industry. The greatest factor making for success is development along sound and proper lines. Once this industry is established it should be able to carry on without monetary assistance from the Government. With its primary and secondary sections progressing simultaneously many new channels would be opened up for the investment of capital, and numerous avenues of employment would be created.
The by-products of the cotton industry are many and. varied and are worthy of mention. One which particularly appeals to me is the manufacture of cotton seed into oil cake and nuts, concentrated fodder to be fed to our stock. During the unfortunate drought that lasted for four years in Queensland, those cotton by-products were extensively and successfully used to keep alive starving stock. With the greater development and expansion of the industry it should be possible to produce them at a considerably lower price than is now paid for the imported, article. That would be to the advantage of our pastoralists and dairy farmers; it would certainly go far towards solving the problem of feeding stock during dry periods. [ hope that the bill will receive the careful consideration and approval of the Senate. Its importance demands that it should be approached in an entirely nonparty spirit, and the advantages likely to accrue from its acceptance should cause honorable senators to expedite its passage.
– In connexion with this bill one might say with Shakespeare -
If it were done, when ‘tis done, then ‘twere well
It were done quickly. . . .
Quite a number of matters depend on the passage of this bill that are not apparent to honorable senators. It is essential that planting should be proceeded with, that fresh areas should be cleared for planting, and that propositions now maturing for the establishment of cotton mills be accelerated. I know that there is a good deal of hostility towards the measure in some quarters. It is claimed that the proposal is economically unsound. But there are quite a number of protective proposals before Australia to-day that are economically unsound. If we are to have protection we might just as well indulge in a little more of it in connexion with cotton. In the long run the industry will be a great asset to the country. Senator Pearce asked whether the proposal was worth while. I suggest that if the industry successfully passes the initial stages, as the result of assistance, it will indeed be worth while and will become one of the greatest assets possessed by Australia.
– We have heard that said about so many other industries.
– I do not profess to know anything about the manufacturing side of cotton, but I have had an opportunity to appreciate the difficulties facing cotton-growers and I know a good deal about their troubles. They are en titled to encouragement because the supply of cotton is going to be a very important thing for Australia. Senator Guthrie said that it was diminishing. It is fluctuating, and I think it reached 19,000,000 lb. avoirdupois one year.
– What makes it fluctuate?
– A variety of causes, but principally the seasons. Unlike Egypt and America, Australia is only experimenting with cotton-growing. It has its own particular problems, which are being solved as time goes on. I believe that this year our cotton crop will show a considerable advance over that of last year. If the bill is carried there will be an even greater improvement.
– Is that any use if the industry is unprofitable?
– It has not yet been demonstrated that the industry is unprofitable. It has to be tried out. The possibilities are1 distinctly great both as to the quantity and quality of our crop. It is claimed that Australian cotton is superior to American middling, and therefore commands a higher price than the American product. I believe that it is necessary to have coarser cotton mixed with our product. That can be procured elsewhere in small quantities until eventually we shall be able to produce the correct type. At the present time our experimental station at Biloela is trying out different types of cotton in an endeavour to select varieties suitable for different qualities ‘of land. There are hundreds of thousands of acres of land in Queensland, and probably in other States also, quite suitable for cottongrowing. Cotton does not require rich soil, but does better on rather poor land. A farmer friend of mine grew cotton on the rich, alluvial river flats on his property, and found that although he raised beautiful plants they produced hardly any cotton. Other plants which he grew on the poorer land near by, though stunted in growth, produced a fine yield of cotton. We are able to obtain greater yields in Queensland than can be obtained in the
United States of America, and in other countries. I know of one farm which produced up to 2,000 lb. of seed cotton per acre. The average yield in the United States of America is from 250 to 450 . lb. I do not say that we could average 2,000 lb. an acre in Australia, but the average yield would probably be well over 1,000 lb. in Central Queensland.
It has been truly said by Senator Pearce that this is essentially a small man’s industry. Indeed, it should be a family undertaking, and it provides great opportunities -in that direction. Australia needs nothing so much at the present time as industries which will enable us to establish families on the land, and the bigger the families the better. Children are the best immigrants Australia can have. When cotton is grown on small areas the members of the family can themselves do the picking, and when the children are free to engage in picking on neighbouring farms, their wages constitute a desirable addition to the family income. Tn the Dawson valley there is a family of which three of the girls have been able to earn from J 5s. to 18s. a day picking cotton. The average wage for cotton picking in Queensland is about 1-Jd. per lb. In America, I understand, the present rate is Id. per lb, although some years ago it was only ki. Even at Id. per lb. cotton-pickers in America can earn as much as a guinea a day.
– What is the honorable senator’s authority for saying that Id. per lb. is the ruling rate in the United States of America ? I understood that it was less.
– I know it from my reading, and from discussions T have had with well-informed persons. Only recently I was talking on this matter with Mr. Crawford Vaughan. At 1-Jd. per lb. cotton-pickers iti Queensland can make very good wages when they become expert in the work. In Central Queensland there are vast areas of cotton land which are about to be thrown open by the Queensland Government. It has been already surveyed and will be offered, shortly for settlement. An area of 20 acres is quite sufficient for one family to work as a cotton farm. Usually cottongrowing is undertaken in association with some other activity, such as dairyfarming, and in that case, of course, the total area of the farm would need to be considerably more than 20 acres. However, even 20 acres of cotton, if the crop is good and the prices favorable, would produce a reasonable income for a family.
– If there is to be any great development in this industry, where does the honorable senator suggest that the cotton can be sold? .
– It can be sold on the home market. At the present time, I believe, we import annually about £11.000,000 worth of cotton textiles. There is a fairly large market here waiting to be exploited.
Senator Pearce referred to the failure of attempts to grow cotton on a large scale. It is true that .Bond and Company tried to grow cotton on two areas of over 1,000 acres each. They employed all modern farming appliances such as tractors, etc., but when the time came for picking thi? cotton the job had to be done quickly, and they had to pay whatever wages were demanded. They could not get the cotton picked for less than 2d. per lb., and this left no margin for profit. The result was that the enterprise was a failure. However, I have been told by an American grower in the Monto district that if the assistance now contemplated is given to the industry there is no reason why areas of up to 200 or 300 acres cannot be profitably worked.
In this bill it is proposed to continue the Bruce-Page bounty of Iki. per lb. until the 30th September, 1932, and then pay a gradually diminishing bounty until 1936. It is also proposed to increase the duty on imported cotton goods. No doubt the effect of increasing the duties will be to make cotton garments more expensive than they were before.
– That has not been the experience in the past.
– I hope that in practice it will not result in cotton clothes becoming very much more expensive. At any rate, this Government is out to look after the workers’ interests, and if it chooses to do it in this way, that is its own affair.
I do not like the industrial clause in the bill. The Minister’s tribunal will be a dangerous thing, but there are two safeguards, the Commonwealth Court of Conciliation and Arb:tration, and the Labour Tribunal in Queensland. If the bill is passed in its present form it will be the duty of ‘the Board of Trade in Queensland to frame an award suitable to the conditions of the industry. It could lay down a. minimum rate for picking cotton, and if the growers wished to pay more than the minimum rate they could. There would be no objection to prescribing a minimum rate, provided that rate did not, as only too frequently happens, come to be recognized as the maximum rate. I do not share Senator Sir George Pearce’s fears that too much money may be paid away under the bounty provision. Probably the estimate of the Leader of the Government (Senator Daly) that only £218,000 in excess of the existing unspent appropriation will be paid during the six years covered by this measure will be well within the mark. However, if it is considered necessary to insert a safeguarding provision,. I am sure that the Government will accept an amendment in committee limiting the total bounty payments.
I support this bill. It will stabilize prices for at least six years, which should be long enough to enable the industry to get on its feet, and develop into one of importance to Australia.
. - I desire to congratulate Senator Cooper and Senator Thompson on the very able manner in which they dealt with this subject. Although I am a representative of New South’ Wales, I feel it my duty to do what I can to help deserving industries in Queensland or in any other State. I am a recent arrival in this Senate, but during the last eight or nine months, I have listened to many speeches by honorable senators from various States urging that assistance of one kind or another be given to industries in which they are interested. I have listened to Senator Payne asking that assistance be given to Tasmania, either directly to its Government, or indirectly to its industries. Tasmania has enjoyed or hopes to enjoy, protection for its hops, flax and newspaper pulp. There is no reason why as good hops cannot be grown in Tasmania as in Kent or Belgium. I am also prepared to support measures for the establishment of the flax industry in Tasmania. I prefer to support the newsprint industry of Tasmania rather than encourage the importation of newsprint from the United States of America. Therefore, I think that honorable senators from Tasmania should be willing to assist the cotton industry of Queensland. Yesterday a debate occurred in this chamber in relation to a bounty on wine. Under that measure, assistance will be given to the wine and -grape-growing industries in South Australia, Victoria and New South Wales. The sugar-beet industry in Victoria has federal assistance, and New South Wales has protection of its iron and steel industry. Western Australia derives the benefit of this policy in regard to timber.
– Rice, as the result of federal encouragement, is grown in New South Wales.
– Yes. At Leeton and Griffith this product is grown to a large extent by returned soldiers. We do not need to import rice from the East. Senator Rae. - We grow more than we can consume.
– That is so. The Senate is now invited to support an industry that has been established in Queensland.
Dr. Purdy, Chief Medical Officer of the City of Sydney, recently made a statement to the press regarding an outbreak of Dhobie rash, which was contracted by a prominent business man of Sydney, through the wearing of a cotton singlet that had been purchased at a leading store. The article was of Japanese origin, and it was worn before it had been washed. Dr. Purdy recommended the Bavin Government to insist on the fumigation of cotton goods imported from overseas. The Leader of the Opposition has spoken o’f bounties that have been paid in numerous industries; but I remind him that Australia is a new country, and is advancing in spite of competition from abroad. Although the imposition of bounties may cause hardships in certain directions, unborn generations will see the wisdom of this policy, when Australia’s population reaches 50,000,000 or 60,000,000. The people of Australia are prepared to support a government that is determined to assist in establishing primary and secondary industries by granting bounties when they are required. I suppose that if it were proposed to pay a gold bounty no objection would be heard from honorable senators from “Western Australia. The Leader of the Opposition pointed out that a mistake had been made in Queensland in planting ratoon cotton. That may be so; but I am chiefly concerned about establishing the cotton industry on a firm basis.
Senator Pearce spoke disparagingly of the action of the Acting Minister for Trade and Customs (Mr. Forde) in regard to this bill, and referred to him as another “young man in a hurry.” Even if the Acting Minister had gone to Queensland to tell the people of that State what his Government was doing for the cotton industry, I remind the Leader of the Opposition that, when he was a young Minister, he, no doubt, took an opportunity of informing the electors of Western Australia what his Government had done for them. Honorable senators opposite claim to be the champions of the man on the land ; but, when Labour seeks to assist a rural industry, they manage to find some feature of its legislation about which to complain. I feel sure that the outcome of this measure will be satisfactory. Senator Cooper spoke of by-products of the cotton industry, such as oil-cake. We know that thousands of tons of this commodity is imported from India and Japan, and I suggest that honorable members of the Opposition should give unqualified support to the cotton industry of Australia, in which white labour is employed, instead of leaving this country dependent on foreign products, in the growth and manufacture of which cheap coolie labour is used. We have been reminded that some of the by-products of cotton are used in the manufacture of munitions.
I was not altogether pleased with the answer received from the Leader of the. Opposition to the question that I put to him in relation to the employment of black labour. I point out that white labour only will be used in the cotton industry in Queensland, both in the growing of the crop and in the manufacture of the cotton into clothing. In the school of political thought to which honorable senators opposite belong, the White Australia policy is upheld, and it seems inconsistent that they should now indulge in cheap gibes because of the action of a Labour government in endeavouring to assist a primary industry. I think that Senator Glasgow will ardently advocate the encouragement of this industry, because he believes in the maintenance of a White Australia. Great Britain used to be dependent on the southern States of the United States of America for its cotton. During the course of the American civil war, Great Britain and her dependencies experienced a shortage of cotton. The result was that British statesmen looked about them, and, as the result of scientific investigation, found that cotton, equal in texture to the American article, could be grown profitably in Egypt. Engineers were set to workon the delta of the Nile, and the industry was established there so successfully that it was able to challenge the Cotton industry of America. The Motherland is now almost independent of America for its supplies of that commodity; but cotton is grown in Egypt by black labour.
Sitting suspended from12.45 to 2.15 p.m.
– I understand that a message has arrived from another place, and I ask leave to continue my remarks at a later stage.
Leave granted; debate adjourned.
Bill returned from the House of Representatives with a message intimating that it had made the amendment to clause 6 requested by the Senate.
Bill read a third time.
Motion (by Senator Daly) proposed -
That the Senate at its rising adjourn till
Wednesday, 11th June, at 3 p.m.
– I should like to see the Senate proceed with the Cotton Industries Bounty Bill. There are urgent reasons for this, but I do not propose to go into them now. An adjournment would be of no advantage to honorable senators representing Queensland, who are obliged to remain in Canberra, and, personally, I think, the Senate would be far better employed completing the job already in hand. We could do it by sitting tomorrow or next week. At any rate I oppose the motion.
– The Leader of the Senate can recognize only one head of the Opposition. I have been given to understand by the Leader of the Opposition that it isthe unanimous wish of the Opposition that the Senate shall not proceed immediately with the Cotton Industries Bounty Bill.
– That is not so.
– I understand there is violent opposition to the bill, and that Senator McLachlan, Senator Colebatch and others are desirous of debating the measure ata later date, particularly because the second reading was only moved to-day. It would not inconvenience me to sit to-morrow.
– If the Cotton Industries Bounty Bill were passed, would the Senate adjourn for a fortnight?
-Yes. Perhaps I may be permitted to continue my remarks at a later hour in the day.
Leave granted ; debate adjourned.
Second Reading. debate resumed.
– Mr. Forde, the Acting Minister for Trade and Customs, is a young man, who as a native of Queensland and a responsible Minister in the Scullin Government is an enthusiastic supporter of the establishment in Queensland of an industry which experts have predicted will flourish there, and I think we can disregard Senator Pearce’s comments in regard to him. Senator Pearce has told us that in committee he will strenuously oppose clause 13. That clause reads as follows: - (1.) The Minister may make application to the Chief Judge or a Judge of the Commonwealth Court of Conciliation and Arbitration, or to any Commonwealth authority established for the purpose of determining wages and conditions of employment, for a declaration as to what wages and conditions of employment are fair and reasonable for labour employed in the production of seed cotton or lint, or the manufacture of cotton yarn. (2.) On the hearing and determination of the application, the Chief Judge, Judge or Commonwealth authority, as the case may be, shall have all the powers which under the Excise Procedure Act 1907 are conferred on the Common wealth Court of Conciliation and Arbitration, and all witnesses and persons summoned to appear or appearing before the Chief Judge, Judge or Commonwealth authority, as the case may be, shall be entitled to the same privileges and protection, and bo subject to the same liabilities and penalties, as witnesses or persons summoned to appear or appearing before the President on an application within the meaning of that act, and the provisions of that act shall, so far as they are applicable, apply accordingly, mutatis mutandis, as if the application were an application within the meaning of that act. (3.)For the purposes of this section any reference in the Excise Procedure Act 1007 to the President of the Commonwealth Court of Conciliation and Arbitration shall bo read as a reference to the Chief Judge or a Judge of that Court or to such Commonwealth authority. (4.) Every person who claims the bounty payable on seed cotton or lint under this act shall undertake to observe any determinations as to the conditions of employment and the rates of wages paidto any labour employed by him, and he shall, if required by the Minister, certify to the Minister as to the conditions of employment and the rates of wages paid to any labour employed by him in respect of any period, covered by this Act, which is specified by the Minister. (5.) Every person who claims the bounty payable on cotton yarn under this Act shall, in making such claims, certify to the Minister the conditions of employment and the rates of wages paid to any labour employed by him. (6.) If the Minister finds that the conditions of employment or rates of wages, or any of them, paid by any claimant for bounty under this Act - (a.) are below the rates and conditions declared, as in the first sub-section of this section mentioned, tobe fair and reasonable; or
And so on.
– While an honorable senator is permitted on the second reading to allude to a clause of a bill as one of its underlying principles, he is not allowed to anticipate debate in committee by discussing it fully.
– The Government of Queensland has swept aside the rural award operating in the State. Mr. Forde, as Minister in a Commonwealth Labour Government, which is paying a bounty to cotton-growers, seeks by this clause to obtain power to set up a tribunal to determine fair rates of wages and fair conditions of employment in the cottongrowing industry.I trust that honorable senators will view the matter broadly, particularly as the employees in the industry have no State tribunal to which to appeal. We learn from cablegrams published in our newspapers of racial strife in India and of jute mills and cotton mills having been closed, and that the trouble has arisen through an agitation promoted by Gandhi against the salt laws of India. We know also from the writings of many eminent persons, men and women, who have visited India, that the conditions of the workers in the cotton industry there are appalling.
I feel sure that honorable senators opposite who may feel inclined to follow Senator Pearce will be guided by the recommendations of the Tariff Board, which, in its report on the cotton-growing and allied industries, said : -
On 21st May, 1928, the Minister for Trade and Customs referred to the Tariff Board for inquiry and report in accordance with section 15.(1) (d) and (e) of the Tariff Board Act 1921-1924, requests made by the Queensland Cotton Board and others for -
. Duty on raw cotton imported into the Commonwealth for purposes other than spinning.
Increased rates of duty on cotton yarn imported into the Commonwealth, and increased rates of bounty on cotton yarn manufactured in the Commonwealth from Australian -grown cotton.
Payment of bounty on percentage yarns manufactured in Australia.
Duty on cotton linters imported into the Commonwealth.
Increased rates of duty on cotton wadding imported into the Commonwealth.
Honorable senators who may be inclined to oppose this measure because it was introduced by a Labour Government, should recall that in May, 1928, the Bruce-Page Government was in office.
– What is the date of the report?
– It is dated the 6th March, 1929. At the public inquiry instituted by the Tariff Board the undermentioned witnesses tendered evidence on oath and were examined by the Board : -
In Favour of the Application.
Robert Joseph Webster, Manager, Queens- land Cotton Board, Whinstanes, Brisbane.
Walter Massy Greene, Chairman, BritishAustralian Cotton Association Limited, Whinstanes, Brisbane, cotton ginners.
Arthur James Vale, Managing Director, Arthur Vale & Co. Proprietary Limited, Melbourne, distributors for British-Australian
Cotton Association Limited, also shareholders in Federal Felters Proprietary Limited, Melbourne, manufacturers of wadding.
Lionel Frederick Robinson, Director, Austral Silk & Cotton Mills Limited’, Abbotsford, Victoria, spinners of cotton and percentage yarns.
Rupert Neil McLean, General Manager of Geo. A. Bond & Co. Limited (in liquidation) spinners of cotton yarns, manufacturers of knitted underwear, &c.
In Favour of Protection to Growers and Spinners Subject to the Interests of Users of Yarns being Conserved.
William Leslie Hicks, Chairman, Hosiery and Underwear Manufacturers Association, a section of the Victorian Chamber of Manufacturers.
George Gotardo Foletta, General Manager and Director of Prestige Limited, Brunswick, Victoria, manufacturers of hosiery.
Leslie Alfred Mellor, sole proprietor, L. A. Mellor & Company, South Melbourne, Victoria, manufacturers of hosiery and knitted goods.
– Is the honorable senator stone- walling the bill?
– No. I am showing that in their sworn evidence before the Tariff Board these business men indicated that they desired to use Australian cotton, grownby white labour, rather than cotton grown under black labour conditions on the Nile delta or in the Southern States of America, which some honorable senators, including the right honorable the Leader of the Opposition (Senator Six George Pearce), apparently would prefer. Let us assume for a moment that the Federal Government had decided to assist the Australian ship-building industry and that the right honorable gentleman, himself a skilled carpenter, desired employment. Would he be willing to engage in that industry without some protection as to wages and conditions of labour? Of course he would not. But in other industries he is prepared to throw a spanner into the industrial machinery in order to get cheap goods. I am prepared to support honorable senators for Queensland in establishing the cotton industry in Australia, so long as white labour is employed and trade union principles are maintained.
Senator Sir WILLIAM GLASGOW (Queensland) [2.37].- As the right honorable the Leader of the Opposition (Senator Sir George Pearce) has said, the cotton industry in Australia has had a somewhat chequered career. To some extent it has been the plaything of politics, Cotton was grown in Queensland as far back as the time of the American Civil War. But after the American cotton was again placed on the market, the Queensland industry went out of existence for many years. There is no doubt that a large area in Queensland and northern New South Wales is capable of producing excellent cotton. The Darling Downs country and the country served by the Lockyer, the Mary, the Callide and the Dawson Rivers are areas suitable for the production of cotton. In 1920 the Queensland Government guaranteed 5$d. per lb. for cotton, with the result that a number of small farmers put small areas under cultivation. Others set out to grow cotton on almost a plantation basis. The smaller growers have continued to grow cotton because they have not been faced with excessive harvesting costs, but the larger growers have disappeared. After the State Government had assisted the industry for a few years the Commonwealth Government agreed to share with it in guaranteeing the price of cotton for another .three years. Later, when the State Government found the burden too heavy, the Commonwealth Government continued to assist the industry by means of a bounty at the rate of 1½d. -per lb. for high-grade seed cotton and gd. per lb. for low-grade seed cotton. The bounty was to continue for five years. At the same time it provided a bounty of 1/3 d. per count per lb. of cotton yarn. It is not denied that cotton can bc grown in Queensland at a competitive price. But in the harvesting of the cotton, and the production of the lint, difficulties have arisen. The cost of harvesting is too great. An effort is, therefore, being made to gather the cotton by what is known as the “ snapping “ system, which means that the pickers pick the boll, and by attaching cleaning machinery to the ginning plant, it is possible to clean the cotton and produce a lint equal to that produced from ordinary hand-picked cotton. In this way the cost of harvesting is reduced. The Queensland Cotton Board, with the assistance of the State Government, has taken over from the British- Australian Cotton Association the whole of the gins and plant owned by that concern at a price far below the cost of its erection. For £155,000 the board obtained plant , which cost the BritishAustralian Cotton Association £550,000.
The reduced capital cost of the plant will enable the cost of ginning to be reduced considerably.
– Only as regards the capital cost.
Senator Sir WILLIAM GLASGOW.No; it will also reduce the cost of handling. Previously the cost of ginning the cotton was 1-Jd. per lb. Tho actual cost now, including interest and redemption on the plant purchased is about £d. per lb. Those figures show that an effort has been made to reduce the cost of production. As the output increases, the ginning costs will be still further reduced. The Cotton Board has acquired the oil mill and will be able to make increased profits to the extent of about £4 a ton on the cotton seed treated by it. Honorable senators will, therefore, see that the industry is being placed on a more satisfactory footing than previously. The Bruce-Page Government, in 1926, provided a bounty of ltd per lb. on seed cotton for five years, and at the same time a further -j-d. per count per lb. on the cotton yarn produced. That will not expire until August of next year. I was a party to the policy initiated by the late Mr. Pratten, and I am prepared to support these, proposals by the Government as they are a continuance of that policy. I approve of the action of the Government in granting a bounty on a diminishing scale. I am assured by a representative of the growers, and by those who handle the raw products, that they are quite satisfied with the assistance promised in this measure. I am confident that, if the Senate approves of the bill, those people will not make any further demand on this Parliament for assistance.
– Doesthe honorable senator honest.lv believe that?
Senator Sir WILLIAM GLASGOW.I do. I am quite aware that when grants, are made to numerous industries, a burden is placed upon others that carry on without assistance. However, it is only within the past few years that the cottongrowing industry of Australia has begun to get its house in order, and I urge honorable senators to give it a chance to- establish itself. I believe that it will then carry on without further assistance and will materially help to develop Australia. I support the bill, and I hope that the Senate will agree to it.
Debate (on motion by Senator Sir Hal Colebatch ) adjourned.
Debate resumed (on motion by Senator Daly)-
That the Senate at its rising adjourn until Wednesday, 11th June, at 3 p.m.
Motion, by leave, withdrawn.
Motion (by Senator Daly) agreed to -
That the Senate at its rising adjourn till Wednesday, 18th June, at 3 p.m.
– I desire to lay on the table of the House a report by Sir William Harrison Moore, on the conference at Geneva in September, 1929, relating to the revision of the Statute of the Permanent Court, and the accession of the .United States to the Court. At this conference, Sir Harrison Moore, under instructions from the Commonwealth Government, signed, on behalf of the Commonwealth, the two protocols, copies of which are annexed to his report. One protocol provides for the revision of the Statute of the Court, and the other for the accession of the United States to the Court. These protocols, the Commonwealth Government now proposes to ratify.
I crave the indulgence pf the Senate to made a statement. [Leave granted.] In another place to-day the Prime Minister (Mr. Scullin), moved the following motions : -
That this House approve the protocol for the revision of the Statute of the Permanent Court of International Justice, dated Geneva, 14th September, 1929.
That this House approve the protocol for the accession of the United States of America, to the protocol of signature of the Statute of the Permanent Court of International Justice, dated Geneva, 14th September, 1929.
Unless there is an objection on the part of the Senate, I do not propose to submit similar motions in this chamber this afternoon, but will wait until the Senate again meets.
The following papers were laid on the table : -
Report by Sir William Harrison Moore on the Conference of States Signatories of the Statute of the Permanent Court of International Justice; together with copies of the Protocol for the Revision of the Statute and the Protocol for the Accession of the United States of America to the Permanent Court.
Public Service Act - Regulations amended - Statutory Rules 1930, No. 55.
Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance No. fi of 1930 - Liquor.
Motion (by Senator McLachlan) proposed -
That the reports be adopted.
– I move -
That the bill be recommitted for the reconsideration of clause 57.
I do so with the object of submitting a new sub-clause.
– The honorable senator has given no’ indication as to the nature of the proposed sub-clause. During the passage of this bill through committee, I gave an undertaking to Senator Rae, who was in charge of the bill on behalf of the Government, that, subject to no objection being raised by the Senate, I was agreeable to the recommittal of the bill to enable the honorable senator to move a certain amendment. No other reasons were then advanced for the recommittal of the bill.
– Unfortunately, when this bill was in committee, I was detained in Sydney owing to a family bereavement. That precluded my advancing reasons for the inclusion of the sub-clause that I now ask leave to submit to the Senate. It reads -
No company or person shall alter in any way a policy once issued, without the consent of the registrar first having been obtained. Penalty £100.
Amendment agreed to.
In committee (Recommittal) :
Clause 57 -
.- I move-
That the following new sub-clause be added to the clause: -
No company or person shall alter in any way any policy, once issued, without the consent of the Registrar first having been obtained.
Honorable senators may remember that shortly after I entered the Senate I brought up the case of a woman whose sickness and accident policy had been altered so as to deprive her of a substantial portion of the benefits to which she was entitled. The case was placed in my hands by the industrial insurance officer of the New South Wales Trades and Labour Council, an organization embracing 75 or 76 industrial trade unions. The woman was a member of the Miscellaneous Workers Union, and was employed as a charwoman. Her policy insured her against risk from occupational disease. During the course of her employment she developed a carbuncle, and was absent from work for four weeks, but the company paid her for only fourteen days. Some person, perhaps the officer who had been instrumental in issuing her the policy, having had it returned to him, scratched out the word “carbuncle,” on the back of the policy, the effect being that this disease was not further recognized as a risk by the company. When I was dealing with this matter previously in the Senate, I learned that Senator McLachlan was interested in the company concerned. He was good enough to send a messenger to me with a note asking me to see him in connexion with the woman and her policy. He was at that time an Assistant Minister in the last Government, and I visited him in his ministerial room. He told me that he was interested in the company, and that he was determined that every officer employed in it should play the game with policy-holders. If it could be shown to his satisfaction that something wrong had been done the person responsible would be punished. It seemed to me that he was adopting a very fair attitude, and I wish now to thank him publicly for it. Apart from that, however, I fail to see why any company, or any of its employees, should have the right to make vital alterations to an insurance policy once it has been issued. A company must obtain authority from the Registrar before it is empowered to solicit insurance business, and it should not be allowed to alter the terms of a policy once it has been issued without the expressed consent of the Registrar.
– I am pleased that Senator Dunn has brought this matter up because it affords me an opportunity of making an explanation, and of reading the explanation of the officer concerned in the transaction to which Senator Dunn has referred. It is only fair that such an opportunity should be provided, because it would, appear from the ex parte statement which has been made that there had been some dereliction of duty on the part of an officer of the company with which I happen to be associated. Honorable senators should realize in the first place that the policy referred to by Senator Dunn does not come within the ambit of this bill. It was an accident and sickness policy, and had nothing whatever to . do with life insurance. It may also be as well to point out that the alteration of an insurance policy once issued is a forgery, and no amendment of any existing law is necessary to make that illegal. If there had been anything in the nature of an unwarrantable alteration of an insurance policy issued by the company with which I am associated, I should have taken steps to see that the law was vindicated. Accident and sickness insurance policies are drawn in a peculiar form, and are issued under regulations of the Accident Underwriters Association of New South Wales. It must be obvious that if a person insured against sickness becomes subject to a recurrent disease the company cannot be expected indefinitely to bear the expenses arising out of his sickness. Clause 17 of the regulations under which this policy was issued is as follows : -
Diseases to be Excluded From Insurance.
If the proponent has suffered from, or if during the currency of the insurance an insured suffers from any of the diseases as per list, such disease or diseases as are set opposite thereto in such list, shall be excluded from the insurance for the period named. and in the case of a current policy such exclusion shall be made prior to the next renewal of the policy after the contraction of the disease and shall continue for the period prescribed by the list.
Carbuncle is one of the diseases on the list, and the period prescribed is two years. I particularly wish to draw attention to the second paragraph, which is as follows: -
The exclusions shall be made by deleting from clause 2 (o) of the policy the disease or diseases named, and writing in the margin of such clause the word “ aneurism “ ( or as the case may be) “ is hereby deleted.”
It has been complained that some person associated with this insurance company deleted from clause 2 of the policy the word “ carbuncle “. It does at first sight, perhaps, appear that a company, having taken the risk, is not entitled to evade it in this way, hut it must be remembered that the risk as originally incurred is a limited one, and covers only the period from the payment of one premium until the next premium falls due.
– To a layman the clause seems somewhat tricky. :
– Perhaps so; but, if we were legislating with respect to this class of insurance, we could not possibly provide for every case, unless under some general provision, such as rule 17 of the Accident Underwriters Association of New South Wales. It certainly seems a high-handed proceeding that a document of this nature should have been altered while there was some liability, but I point out that once the carbuncle developed, and the certificate was given, the liability of the company under the policy ceased, and, if the lady had not chosen to continue her payments, she could have gone elsewhere and obtained whatever cover she required. A leading insurance man in Sydney, writing to me on this matter at the time, said -
You are probably aware that I have had over twenty years’ experience in this class of business, and have specialized particularly in the handling of claims. In cases such as that mentioned in the Senate, it has always been the practice for companies where the claimant is suffering from a sickness which is recurrent to delete such sickness from the benefits of the policy after the claim has been finally settled, it of . course being understood that such claim is only finally settled when the medical officer attending to the claimant certifies to recovery having been complete. It is, of course, hardly necessary to point out that the premium charged for accident and sickness insurance is based on the assumption that a claimant will not make a habit of contracting diseases covered by the insurance, as otherwise it would be an impossibility to fix a rate covering the risk.
– Does the honorable senator accept this proposed new subclause ?
– No. I contend that the case is adequately covered by the law of forgery. Nobody dare alter a policy.
– - Would the honorable senator be satisfied if he saw the particulars of this case in black and white?
– I see no necessity for the clause. I propose to carry this lady’s case a little further. The following information has been furnished regarding it : -
This policy-holder made a claim upon the company and furnished a certificate from the Royal Prince Alfred Hospital, signed by Dr. T. P. Mahon, M.B., B.S., dated the 20th July, 1920, stating that she was suffering from furunculosis of the neck from the 16th to the 31st July, meaning’ that she was suffering from boils. She stated in her declaration of sickness that she was a patient of the Prince Alfred Hospital from the 10th July to the 1st August, and that she was incapacitated from following her ordinary occupation during that period. We paid the claim for two weeks’ compensation, amounting to three pounds (£3) which is in accordance with the terms of the policy which states “ that should the policy-holder be rendered totally unable to pursue her occupation or attend to any business affairs whatever and be necessarily and continuously confined to the house as a direct and exclusive result of her suffering from any of the following diseases.”
Then follows the list of diseases that I have read.
You will notice that boils are not included in the list, but carbuncles are covered under this clause. The following certificate was given by Dr. Mahon on the 20th July, 1929, “Patient is suffering from furunculosis of the neck and is at present unable to attend to her work from the 16th July to the 31st July, 1929.” Subsequently the claimant provided the following further certificate from the same doctor dated the 2nd August, 1929, “Patient has had a carbuncle on her neck for the past two weeks.”
This policy was altered in accordance with the regulations, when it was brought into the office of the company by the lady herself. I ask the committee to reject. Senator Dunn’s proposal.
Senator BAE (New South Wales) [3.20 J. - I hope that the committee will accept the amendment. I cannot follow all that Senator McLachlan has said in extenuation of the crime committed; but I followed him sufficiently to realize that no person possessed of the average intelligence of a member of this chamber could make head or tail of his explanation. How then, can people outside expect a fair deal from these companies, with all the trickery and juggling that is involved. Et is enough to disgust a fair-minded man to find that persons of humble means, who have to scratch hard for every penny they earn, should be subjected to legal jugglery by which, if a man is disabled through having, say, a carbuncle, and after treatment the trouble reappears, he is to be deprived of. the benefits of insurance. .
– The policy does not cover boils.
– Whether that is so or not, we know that these exploiting insurance canvassers talk glibly about the advantages of having a policy in their splendid companies, and beguile people by telling them that the premiums charged are low; but, when a person suffers from one of the diseases that are common in industrial pursuits, the companies cheat them out of their just rights by the sort of jugglery that Senator McLachlan asks the committee to retain. Ordinary language does hot enable me to express my feelings adequately on this matter. In order that parliamentary decorum may be maintained, I shall simply say that it is obvious that, if an alteration of a policy is necessary, it should be made by the official registrar who has no personal interests to serve. Insurance . companies should not be allowed to do this through their agents, who are responsible for a great deal of the scandal associated with industrial insurance. It is tragic that the people should be exploited by these glib-tongued individuals, who promise them the most alluring conditions, which are afterwards repudiated. I ask honorable senators to do something to counteract this scandalous conduct, which is occurring in every State.
– I hope that Senator McLachlan will reconsider his decision not to accept this amendment. I submit that the law of forgery does not cover the case that has been brought under notice by Senator Dunn. It is not forgery to alter a policy, if both parties agree to the alteration. Forgery is what Senator -Dunn is anxious to protect policy-holders against. Where a trained insurance man suggests a certain alteration of a policy, we have one man’s word against that of another.
– I understand that this woman did not agree to the alteration, because she was not consulted.
– I am dealing with the principle rather than with the particular instance mentioned by Senator Dunn. I have had cases before me of persons whose insurance policies have been altered, and they have said that they were not parties to the alterations, but a court might conceivably believe that they were. Their knowledge that the company with which they were dealing was worth thousands of pounds, a3 against, possibly, the few pence possessed by the policy-holders, would result in litigation being avoided. Once a policy has been granted by a company, there should be no alteration of it, unless it has been submitted in the first place to some responsible authority. I remind Senator McLachlan that it was found necessary in connexion with the Workmen’s Compensation Act in South Australia to introduce a safeguard of this description. Persons were signing documents under that act, until a scandal was created in Adelaide, which demonstrated that the policy-holders were not receiving what they were entitled to. Legislation was then passed providing that no settlement could be arrived at until the matter had been submitted to the clerk of the local court. Personally, I see no objection to this proposed new sub-clause from the point of view of the reputable insurance company. If it wishes to eliminate risks with regard to carbuncles or other complaints, the person insured should have the benefit of some legal advice. These industrial policies are generally taken out by persons of limited means, who cannot afford legal advice. In South Australia, however, they have an opportunity to consult the poor man’s lawyer. The clause would provide a safeguard for the reputable company, and would prevent the exploitation that undoubtedly takes place with regard to industrial policies. Seeing that we are now codifying the insurance law throughout the Commonwealth, we should accept the proposed safeguard.
– I draw the attention of honorable senators to Senator Dunn’s reference to this case in this chamber last year. Speaking on the 28th August, he said -
The Trades and Labour Council of New South Wales has placed in my hand the insurance policy of Christina Wilkinson, an office cleaner. The policy is dated 15th April, 1029. This woman signed the proposal form in good faith. From her. small earnings she was prepared to set aside1s. 3d. each week so that in case of an accident she would not be without an income. Later, she developed a carbuncle; and was off duty for four weeks The insurance company had paid her for only fourteen days of that period, when it altered the policy by deleting the word “ carbuncle “ and adding the following condition: -
It is hereby declared tobe a condition of this policy that no compensation shall be payable in the event of disablement, directly or indirectly arising from “ carbuncle “ or traceable thereto, nor shall compensation be payable beyond the usual time for any disablement or injury wherefrom the recovery of the insured may in consequence thereof be retarded.
That provision was dated the 13th August, 1929, and was signed by C. H. Robinson, the manager of the industrial branch of the company.
– What is the name of the company?
– It is the Commonwealth Life (Amalgamated) Assurances Limited, whose authorized capital is £500,000.
I interjected, “It is a case of daylight robbery,” and I am still of that opinion. The agent of a company should not be given power to alter a policy without consulting the registrar. I want to protect the woman who calmly hands her policy over to a man, thinking he is friendly, instead of which he wants to rob her. The unthinking and the uneducated should be protected against the action of unscrupulous insuranuce agents.
– Was the policy altered during the period of the woman’s sickness ?
– Apparently it was. We should prevent that sort of thing from being done, especially in the case of the unthinking people who have faith in others until they suddenly discoverer that they have been robbed. There is no disputing the fact that in the case cited by Senator Dunn the policy-holder was misled. I did not hear Senator McLachlan’s reply, so I do not know whether he claims that there is a provision in the bill which prevents that sort of thing from being done.
– Senator McLachlan claims that the law of forgery prevents it from being done.
– If there is a law to prevent it from being done it is apparently ineffective.
– The policy referred to by Senator Dunn was a policy which was renewable week by week.
– That does not alter the fact that we ought to have measures to prevent dishonesty. People go about robbing their unfortunate fellows, and if there is no law to prevent them from robbing unthinking women and others, there should be one. We should take advantage of the opportunity now available to us to afford this protection.
– I should like Senator McLachlan’s opinion in regard to a somewhat similar case, which came under my notice a few years ago. A policy was takenout in 1914. The insured person went to the war and paid a war-risk premium. Later on he was badly wounded, and in the expectation that he would be returned to Australia, the war-risk premium was dropped. He got better, however, and subsequently joined the Australian Flying Corps. When he did so he wrote to the insurance company stating that he would be prepared to take the further risk himself, and his policy, during the time he was away, was left with the insurance company. When lie returned and asked for his policy he found that it had been endorsed with the declaration that the company would not pay any insurance in the event of death, directly or indirectly, from the results of aviation. That endorsement had been placed on the policy without his consent, although the policy had been taken out before it was evidently the practice of the companies to endorse its policies in that way. The company refused his request that as he had returned to civil life the endorsement should be cancelled. I should like to know if it was legal for the company to do what it did, and if the endorsement could apply after the insured person had been discharged from the Australian Air Force.
Senator Sir GEORGE PEARCE (Western Australia) [3.37]. - The language used by Senator Hoare was rather ridiculous in view of the explanation given by Senator McLachlan.
– 1 should have used much stronger language if it were permissible to do so.
Senator Sir GEORGE PEARCE.In the case in point, the terms of the policy were that, once compensation had been paid for any particular complaint, no further claim could be made for that complaint; and if a woman does not desire to renew her policy on those terms, she is at perfect liberty to discontinue the payment of premiums. It is ridiculous to talk about fraud. That is extravagant language to use. It occurs to me, however, that there should be some form of protection for those who are ignorant of the law and the conditions of the law. That is what is aimed at by Senator Dunn.
– That is so.
– In the consideration of that proposition there is. no need to impute motives. It is clear, from what Senator McLachlan has said, that the policy cited by Senator Dunn was altered in accordance with the regulations then existing. The woman being quite unaware of this, naturally thought that she was being, defrauded, although the company did what was quite within its province to do. The regulations, however, were not made under any act relating to insurance, but represented an agreement made between insurance companies. Obviously that is not the way it should be done. Once compensation has been paid under a policy, the company should not be required to pay it again, because the premium is based on the payment of one claim only. Once a claim has been exhausted under the companies’ regulations it cannot be revived within two years. It seems to me that clause 57, which Senator Dunn is seeking to amend, is not the proper clause to deal with the matter. It deals with the form of proposal, whereas what Sena’tor Dunn is aiming at is the actual proposal which has been signed and accepted. I suggest that his amendment could more properly be made in clause 59, which deals with “ objections to policies, and could also be made to deal with alterations to policies. I sympathize with the claim that, where an alteration is made to a policy, even if it is in conformity with the law, there should be some one to police it, and see that the rights of the insured are protected. In cases of industrial policies we cannot expect women who make these agreements to be aware of what the law provides. I suggest that Senator Dunn should withdraw his amendment, and bring the matter under the notice of the Government, with a view to an amendment being drafted for insertion in the bill when it is being considered in another place. Even where an alteration to a policy is made in accordance with an agreement entered into between, the underwriters and the insurance companies, it should go before some independent person, such as the registrar, who knows the law, so that he may see whether it is in accordance with the terms of the policy and the terms of the law. It does not seem to me that the company should be the judge of its own case.
.- With regard to the statement of Senator Hoare, who is usually temperate in his remarks, I want to say . that people who are not here to defend themselves are just as respectable as are honorable senators, and should not be attacked under the cloak of privilege as some honorable senators have attacked them to-day. Among insurance agents there are some undesirables, just as there are undesirables in every class of society. If the attack which has been made on the floor of this chamber against one of these agents had been justified he would have been dismissed immediately.
– Did I not explain that the honorable senator had met me in that matter ?
– I am sensible of the courtesy Senator Dunn displayed in referring to what I did in the matter. But, from the tone of the debate, one would think that agents who are run,ning around getting policies and proposals signed alter policies in this way. Nothing of the ‘ sort happened in this case. It was a responsible officer of the insurance company who dealt with the matter brought under notice by Senator Dunn, and when the policy in question was brought under my notice the responsible officer whose name it bore was called upon for a report. I should not have troubled the Senate further with this incident had not Senator Hoare chosen to use language which ill-becomes a member of this chamber, in regard to a man who is just as respectable as any one of us, and has such a reputation for integrity that he is able to hold up his head in Sydney where he lives. He holds his position of trust because of his integrity. I called for a report and the manager of the company sent me the following reply : -
The insured lodged a claim and produced a medical certificate from Prince Alfred Hospital signed “ T. P. Mahon, M.B., B.S.,” dated 26th July, 1029, which stated that she was suffering from “ Furunculosis of the neck.” The definition of this term is “ systemic condition favouring boil formation.” On the 2nd August, insured produced another certificate signed by the same medical officer which stated that the insured had suffered with carbuncle for two weeks. The insured completed a claim form on the same dato claiming two weeks’ compensation, which was duly paid. Following the usual practice of companies doing accident and sickness business, “ carbuncle “ was then deleted from the list of diseases covered by the policy. I may add that the usual practice of many companies in connexion with claims for carbuncle is to delete carbuncle and diabetes for two years. ‘ The
Baine course is followed in accepting business where tho proposed has suffered from . carbuncle within the preceding two years.
A person who has suffered from “ carbuncle “ is considered to be a sub-standard risk for at least two years afterwards. The premiums charged are for first-close risks; therefore, any deterioration during the currency of the policy has to be considered and provision made for same, or else have the policy cancelled. In this particular case the company was prepared to continue the contract subject to the deletion of “ carbuncle “ from the list of diseases covered, and an endorsement to that effect was placed on the policy.
When the insured took delivery of the policy from the claims clerk this was pointed oat to her, and no objection was raised and a further payment of two weeks was made in the office by the insured on 17th August, but no payments have been made since. Had any objection to the endorsement been raised the company would have cancelled the policy under condition 14. thereof.
This particular contract is a weekly one, the insured being covered from Monday to Monday.
I feel that I should not allow this man to suffer an injustice because of the charges which Senator Hoare has hurled at him.
Senator Cooper touched on a point concerning which I am not quite clear; but I understand that if it is desired to endorse a life or industrial policy, the policy is called in, and an endorsement made on it in the same way that a fire policy is endorsed when, for instance, an extension of electric lighting installation is made and approved. I think that the position is amply covered. The Leader of the Op-‘ position said that we should protect these people against themselves. I have no objection to doing that. Without knowing the facts I could not state the position definitely; but I take it that if an .office is not properly conducted an endorsement might be made in the manner indicated by Senator Cooper.
– Should we not attempt to provide against the worst actions of a company ?
– Yes. In order that the matter may be further considered I shall report progress.
Senate adjourned at 3.S2 D.m.
Cite as: Australia, Senate, Debates, 30 May 1930, viewed 22 October 2017, <http://historichansard.net/senate/1930/19300530_senate_12_124/>.