15th Parliament · 1st Session
The President (Senator the Hon.J. B. Hayes) took the chair at 11 a.m., and read prayers.
– Has the attention of the Government been drawn to paragraph 610 of the report of the Royal Commission on Banking and Monetary Systems, in which Mr. J.P. Abbott, a member of the commission, recommends the appointment of a resident of Western Australia as a director of the Commonwealth Bank for reasons which are fully detailed? Will the Government consider this important recommendation before making any further appointments to the Board of the Commonwealth Bank?
– I give an assurancc that the matter will be brought before Cabinet at the earliest opportunity.
– On the 18th May, Senator Darcey asked a question, without notice, relating to the erection of a new national broadcasting studio at Hobart. I now desire to inform the honorable senator that, under section 19 of the Australian Broadcasting Commission Act, the provision of studios is the responsibility of the commission. The following information has been furnished by the commission : -
The first studios to be completed will be those of Sydney and Melbourne, because from these emanate principal national programmes. The new studio buildings in smaller States will be begun as soon as funds are available. In the meantime, the existing studios in Hobart have been modernized, and are giving satisfactory service.
– I ask that questions upon notice be deferred. Owing to the early meeting of the Senate, replies are not yet available.
Debate resumed from the 7th June (vide page 1364), on motion by Senator FOLL. -
That the bill be now read a second time.
– I regard this bill as necessary in the interests of Australia; it is long overdue. I listened with a great deal of interest to the criticism of this measure in this chamber. In the speeches of honorable members I heard repeatedly the confident assertion that Australia is not in any way prepared for an emergency. I do not believe that that is the position. Since the last election the Defence Department has done much towards providing for the defence of this country. If honorable senators opposite do not know of some of these preparations, they should ask themselves whether they are entitled to know of them. I do not ask for such information, for I am prepared to trust the department which is responsible for them. I know that the Minister for Defence (Mr. Street) and his staff, who have studied these matters for years, have not been idle. The money made available to them has been well expended. This continual depreciation of Australia’s preparations for defence is unwise; it offers an open invitation to a potential enemy to attack us as a helpless people. Why not adopt a different policy, and exercise a little bluff as other nations do? If other nations do not know to what extent we are prepared, they may hesitate to attack us, for fear that our preparations are more advanced than they know. Let us say to the world that, in the event of hostilities, wo intend to give a good account of ourselves and that the means for our defence are well on the way towards being provided. Only a week or two ago the. whereabouts of a big munitions dump was disclosed by some unauthorized outside body. Probably honorable senators did not know of the existence of that- supply of munitions; but it was there for use, if required. I deprecate these assertions of Australia’s unpreparedness for war and inability to defend itself. I admit that we have still a, long way to go before our defence preparations will be entirely satisfactory, but this bill is a step in the right direction; it provides for a survey of our_resources, so that the best use may be made of them in the event of war. Honorable, senators opposite resist any proposal advanced by this Government, whether it has merit or not. At the same time, however, they offer no constructive substitute. They simply say in this case, for instance, that the Labour party stands for the adequate defence of Australia. That sounds very well, but it is nebulous. In these circumstances,I am very much inclined to doubt the bona fides of honorable senators opposite. One argument which they advance in this very wordy discussion gives the impression that Britain is always wrong and that Australia is foolish to follow Britain’s example in any respect. Simply because we follow Britain’s example they say we must be working on the wrong lines. It seems extraordinary to me that such a feeling against the Old Country exists among honorable senators opposite. I recollect that in 1930-1931, when Britain was disarming in the hope that other countries would follow its example, the Commonwealth Labour government followed Britain’s example and also proceeded to disarm this country. At that time the Labour party closed the naval college at Jervis Bay. reduced the military training establishment at Duntroon, and suspended universal military training. In spite of that fact the Labour party says to-day that when we attempt to follow Britain’s example by taking steps to rearm in preparation for any emergency that might, arise, we are wrong.
Senator Cameron seemed perturbed that Australia had, as he claimed, deliberately depreciated its currency. By some . peculiar process of reasoning’, he argued that this was done in order to enable the financial institutions to make a lot of profit out of the annexes. I am a little puzzled as to what is really the financial policy of the Labour party. I do not know whether honorable senators opposite have swallowed Senator Darcey’s financial policy holus bolus. At times it would appear that they have, . whilst at other times, as on this occasion, they appear to have rejected Senator Darcey s programme, because one of the main features of Senator Darcey’s proposal is that currency should be depreciated. (Senator Cameron also seems to have a peculiar idea that as these annexes would he run on depreciated currency, those running them would thereby enjoy an unusual advantage. He does not seem to realize, however, that if this be so the profits from the annexes, if there he any, would he on thebasis of the depreciated currency and, therefore, would be less than would be made on the basis of a normal currency. In order to examinethe effect of Labour’s financial policy one turns to New Zealand. A few years ago the Australian pound in New Zealand was worth about 17s. or 18s., whereas it is now worth 23s.
– They will not take Australian currency in New Zealand.
– They pay a premium for it.
– The depreciation of New Zealand’s currency^ has been the result of Labour rule.
Senator Cameron was also very perturbed about the use of German machines in Australia and in Great Britain, but most conveniently he overlooks certain essential factors in the matter. He told the Senate that he,, had been a member of a deputation which asked the Minister for Defence that an annexe be erected at the Melbourne Technical School, this annexe to be used for the training of artisans in the higher branches of machine tool-making. I introduced that deputation, and I might explain in passing that some doubt appears to exist as to the bona fides of the Victorian Government in the matter. The proposition made at the time was that the State Government should provide the building and instructors, and that the Commonwealth should provide the machines. The State Government must therefore be absolved from blame. The deputation’s request was turned clown, and forthwith the school council, of which Senator Cemeron and several of his colleagues on the Trades
Hall Council are members, asked the Victorian Chamber of Manufacturers to assist in the project either financially or by supplying some of the machines required. The chamber replied that it would sooner supply the machines, because it could then be sure that the money would not be wasted. It told the school council that it was prepared to grant a few hundred pounds provided it was assured that the money would be wisely expended. To this proposition the council put forward a fresh proposition. It pointed out that three machines were available, of which, it explained, it must have one of them whilst it could do with the other two, which, however, were not so good as the firs);. This particular machine was priced at £1,000 and the others at £350 and £500. But the highest-priced machine was a German-made machine which was already available in Australia. The school council recommended that it be purchased, and Senator Cameron was a member of the body that made that recommendation.
– But we do not know whether Senator Cameron supported that recommendation.
– He is a member of the school council.
– But lie may not have concurred in the decision of the council. The honorable senator is grossly unfair in dealing with the matter when Senator Cameron is absent from the chamber.
– I am simply saying that when an honorable senator, makes such a strong statement as Senator Cameron made concerning the purchase of German machines, he should make certain of where he stands. As all honorable senators are aware, a new technique in the manufacture of shells has been developed during the last few years and Germany has given the lead in that respect. That country , evolved new machines for this work, and to-day, instead of using the old method of making shells on lathes, boring them out and polishing them, German manufacturers now stamp them out. They take a small billet, heat it, and then stamp out the shell in three or four operations, using heavy pressure. By this method they have increased their rate of production one hundredfold within the last few years. At the first opportunity. Great Britain bought German machines because no comparable machines were procurable in Britain.
– And they bought German typewriters also.
– The honorable senator would probably rely on typewriters with which to fight an enemy, asking the enemy to stand off while Australia took a referendum. Undoubtedly Germany led in developing this new technique in the manufacture of shells. Within the last year or two, however, British manufacturers, I understand, have developed machines which are an improvement on the German machines. The argument of honorable senators opposite that we should not acquire the best machines in the world for turning out a particular article which we need is absurd. That was the view which the Victorian Chamber of Manufacturers naturally took in considering the request made to it by the Council of the Melbourne Technical School. The chamber, of course, is in favour of buying Australianmade machines if such are procurable, but decided that if certain machines are required and they cannot be made in this country, the reasonable thing to do is to acquire the best elsewhere in order that our young artisans may be properly trained. For that reason it agreed to purchase the German machine for the Melbourne Technical School.
I was very disappointed at the criticism levelled against this measure by the Leader of the Opposition (Senator Collings). I could not help noting one particular phrase used by the honorable senator, “ I view every line of the bill with suspicion “. Is any honorable senator justified in adopting that attitude towards a measure which means so much to Australia? I suggest that the honorable senator is looking at the bill through what might be termed the miasma of a myopic mentality. He is totally blind to any merit whatever in the bill. He was very perturbed about what would happen to the workers who were engaged in the annexes when the educational trial orders were fulfilled and the annexes were closed down. Surely any honorable senator knows that the men who will be put, into an . annexe will be the most capable workmen in the parent factory. They will be instructed in the operation and care of these machines, and when the work of the annexe is completed they will be returned to their ordinary machines in the workshop, possibly better workmen than when they entered the annexes. The honorable senator, therefore, need have no qualms whatever as to what will happen to these employees when the annexes cease operations. But let us see what would happen if the proposal advocated by honorable senators opposite that this work should be confined to Government factories were adopted. What would happen to employees engaged on this particular work when the Government’s orders of munitions and materials were filled? The Government would be obliged either to dismiss those employees or to continue manufacturing munitions in normal times in order to retain them in employment. ,
– The Government would be quite able to find other work for them should they not be required in the annexes.
– Where would they be employed? Their work would be the manufacture of munitions. Men who had specialized in particular classes of work could not be employed indefinitely in government factories.
– Under the Labour party’s policy we would at least try to provide them with work so that they could be fed and clothed.
– A Labour government would try, but it would be an uneconomic policy to adopt. Is it not preferable to utilize the services of skilled men now employed in factories, than to have a huge staff of government employees who could not be employed indefinitely on producing defence requirements? The permanent employment of skilled artisans in government factories would be a greater burden upon the country than it could carry.
SenatorFraser. -The honorable senator is referring to the experimental period of manufacture.
– I am referring to the work that will be undertaken to train men in the handling of highly intricate machinery. The policy of the
Labour party is to manufacture munitions and other defence, requirements in government workshops; but the policy of this Government is to train men in annexes for the work, and when they become proficient there they can undertake the manufacture of ordinary civil requirements. -In an emergency these highly skilled men could be diverted from the factories to the annexes for the defence work in which they had been trained, and no unnecessary expenditure . would be involved. Surely honorable senators opposite realize that in an emergency practically every able-bodied man will be serving in some capacity, and that machinery and plant now employed on . ordinary work will, “wherever possible, be utilized for defence purposes.
– Every thing will be subservient to the needs of the nation.
– Exactly. In the event of war, production will be undertaken not only in annexes but also in other suitable factories.
– Artisans will be employed in factories, and there will be an insufficient number of trained men to work in the annexes.
– The policy of the Government is to establish annexes in which artisans can be trained to handle intricate machinery. The work to be undertaken in the annexes will be different from that now done in existing factories, hut in the event, of war the existing factories also will be used for the manufacture of munitions and other defence needs. Special machinery will be installed in annexes, and the men trained in these establishments’ will be available in the event of war.
The Leader of the Opposition spoke somewhat scornfully concerning overhead expenses in annexes, but the Minister said that interest, managerial and other charges would be borne by those controlling the factories. All that will be charged against production will be ordinary operating costs such as labour, and if that is not a good commercial proposition, I do not know what is. There has been a good deal of discussion on the limitation of profits, and various means have been suggested whereby a limitation can be imposed. One of the principal objects of the measure is to ensure that no manufacturer shall make money out of munitions.
– Where is that provided?
– Clause 5, which reads -
The matters to bc administered by the department shall be matters relating to arrangements for ascertaining costs and for the control and limitation of profits. . . .
– That is just in broad outline. That will not be done.
– It is a distinct intimation to manufacturers of munitions or of commodities covered by this bill that they shall not be permitted to make profits out of the needs of the nation.
– A limit of 4 per cent, on capital was suggested.
– There is no reference to 4 per cent, in the bill, and it would be ridiculous to stipulate any such figure, because the percentage of profit in manufacturing is governed by many factors. I suppose that the honorable senator is referring to a profit of 4 per cent, on turnover, but actual turnover during the year would have to be considered. A turnover of capital twice a year would not be very profitable; but a man turning over his capital six times a year and getting a profit of 4 per cent, on such turnover would be doing very well. The profit is also governed by the quantity of raw material used in the finished product. In some instances 90 per cent, of the finished article consists of raw material and only 10 per cent, is represented by labour. In such instances a profit of 4 per cent, would obviously be too high.
– That was the original intention of the Government.
– I was not. In other instances the raw material represents only 25 per cent, or 30 per cent, of the finished product, the balance being represented by labour in various categories, and 4 per cent, would be too low. Every case would have to be treated on its merits. Any one possessing a knowledge of manufacturing knows that for this purpose a fixed percentage of profit is impracticable. Under this measure the Government is endeavouring to ensure that in ah emergency no one shall be allowed to profit out of the needs of the nation. It is easy for Senator Brown and others to be sceptical, but the. bill distinctly gives the Government the power to limit profits. The Government will ensure that no manufacturer shall make undue profits from the manufacture of munitions. It is an easy matter to keep a check on manufacturing costs.
– Except in respect of raw material.
– I am coming to that. More profit is made on the raw material than on the manufacture of the finished product. During the Great War those producing raw materials made huge profits whilst the manufacturers made comparatively little. Between 1918 and 1921 money was made by some manufacturers, due to the fact that costing systems were not so complete as they are to-day. Some manufacturers compiled their costs in a somewhat rough and ready manner, and added the same percentage of profit on raw material which had increased in price sometimes three-fold. They continued to allow profit on the same basis and could not understand how their returns were so high. They said that they had added only the usual profit. In some instances the price of the raw material had increased considerably and although they were allowing a profit of four* per cent., they were actually getting seven and a half per cent. This is a matter to which the Government will have to give its close attention. No difficulty is likely to be experienced on the manufacturing side, because it is easy to determine accurately manufacturing costs. The Government will, however, have to watch the cost of raw material because it is on that that profits are made. Reference has been made to the price of sandbags in Great Britain during the September crisis. Some honorable senators opposite say that the sack-makers were responsible, but that is not so because jute-makers in India control prices.
– I agree with the . honorable senator.
– It would be unprofitable to make cornsacks in Australia because the jute manufacturers in Calcutta charge as much for the jute, from which the bags are made, as they charge for the sacks. Indian jute manufacturers have a complete monopoly of the business, because jute is not obtained’ from any other country.
– Australian users also specify a particular type of bag.
– Yes. I congratulate the Government upon the introduction of this measure in which provision is made for the effective handling and control of many important activities associated with the defence of this country. It is an honest attempt to carry out a very necessary survey so that in the event of war we shall not be unprepared or illequipped. Whilst there may be some difficulties in implementing the measure, I believe that the Government is working on the right lines. This is an indication to the people that an earnest effort is being made to ensure the effective defence of this country and that in the production of defence requirements no one shall be allowed to make excessive profits.
Sitting suspended from 11.45 a.m. to 2.15 p.m.
– It is claimed by the Government that this bill is an attempt to secure national efficiency. If that were the case, there would be no opposition to it from honorable senators on this side of the chamber who all agree as to the importance of national efficiency. A tremendous amount of money is to be expended on defence preparations. Honorable senators opposite have said that this bill will prevent overlapping of administration and extravagance in connexion with this expenditure, and that under it the taxpayers of Australia will be protected against profiteering in any form. I am very concerned, of course, at the way in which the money will be expended, but I am” more concerned about the way in which it will be raised. I was in Sydney over the week end and saw on every bank in the city large posters bearing the words “ Commonwealth Loan, issued at £99 at 37/8 per cent. I have already pointed out to honorable senators what, happens when these loans are raised. The charge made of 5s. per cent, by the banks for the work that they do in connexion with these loans seems very small, but when that percentage is applied to the whole amount raised through the banks it will be seen that they receive a very large sum of money for their services. Of the recent loan of £4,800,000, no less than £3,750,000 was underwritten by the bank. A charge of 5s. per cent, on that amount represents a considerable sum. Can it be said that the Government aims at national efficiency while it continues to borrow money upon those terms? This bill contains no information as to how the money proposed to be expended under it will be raised. As I have said on many occasions in this chamber, finance is government and government is finance. I have addressed numerous questions to Ministers regarding the operations of banks and have experienced great difficulty in getting satisfactory replies. I was told in answer to one question that the banks subscribe from 75 per cent, to 80 per cent, of government loans; but as I have said on other occasions, even the money that the banks obtain for bonds never reaches the Treasury. As a matter of fact, the only advantage the Government gains from these loans is the right to draw cheques against the banks which applied for the bonds. The public’s money is in the hands of the banks but the banks do not in turn hand that money over to the Government. All that the public gets is stock for the amount subscribed. I point out that if these loans were raised through the Commonwealth Bank the large commissions paid to the private banks and brokers would be saved. Of the last Commonwealth loans, £16,000,000 was supplied by . the Commonwealth Bank. Two questions which I asked in regard to that loan were -
The answers were -
Separate figures are not available for municipal securities, but they would represent only a small proportion of the total.
That is a tremendous amount of money, the whole of which is tax free. The banks get not only interest from the Government but also a further concession of freedom from taxation.
– But not from State taxation.
– Why should a loan be issued at £99 instead of £100? I am glad to think that when in 1914 hundreds of millions of pounds were being raised in London, the Treasurer of the day,- Mr. W. H. Higgs, had sufficient backbone to stand up to the London brokers and financiers and demand that the loans be floated at par. If the present Treasurer had the courage to insist, loans could be floated to-day at par. When I asked, some time ago, why loans could not be floated at par, the reply given by the then Treasurer (Mr. Casey) was that they were issued at a discount to induce people to invest. How much public money is going into these loans? In my opinion not 25 per cent, of any loan is subscribed by the public. Those who are profiting by the raising of Commonwealth loans are the bankers themselves, and, as I have said, the bonds taken up by them are free of Commonwealth taxation.
– Does not the honorable senator realize that the shareholders of the banks have to pay’ tax on their dividends?
– I do not deny that, but government bonds, which are largely taken up by the banks, are free of tax. Honorable senators . will be able to assess the value of that concession when they consider the large amounts taken up by the banks. It is possible for people to put the whole of their investments into government bonds, and thus escape all taxation. I see no reason why loans should not- be floated at par. It was proved by Mr. Higgs that a loan could be floated on the London market at par. Within a fortnight of the raising of that loan there was an appreciation of5s. per cent, in the value of the stock. I asked the following, question on notice this morning -
On whose authority arc loans floated at £99 ?
Surely any treasurer who knows his job would not be bluffed by either banker or broker. The London brokers, Nivison and Company, said that money could not be borrowed at par, and the cost of floating a loan through that firm was £3 7s. 5d. per cent, as compared with a cost of 5s. 7d. per cent, for money raised by Denison Miller through the Commonwealth Bank. Yet this Government says that it is looking after the interests of the taxpayers, and that the object of this bill is to secure national efficiency. As I have said, I am not’ concerned so much about how the money will be spent as to how it will be raised.
– How does the honorable senator account for the fact that the New Zealand Government is trying to borrow in the United States of America?
– What has that to do with the matter? Wherever you borrow, you pay interest just the same. Non-Labour governments borrowed £26,000.000 in the United States of America. I have shown how all of this money could have been raised through the Commonwealth Bank. Is it efficiency to disregard the finding of the royal commission which inquired into banking and monetary reform? When is the Government to learn that money can be obtained without going to London ? Why should the Government pay 4 per cent, in London . and thus give to investors there an advantage over Australian investors? The recent loan of £6,000,000 should have been raised through the Commonwealth Bank. Why was that not done? Simply because the Government is determined to continue on what it calls orthodox lines. Through this so-called orthodox system of finance the public debt of this country has risen to £1,200,000,000. Are we to carry on with that system for ever? We can not make adequate preparations for the defence of this country by borrowingmoney at 37/8 per cent. Already the taxes levied upon the people are so great that they are groaning under them. This bill should set out. how the money to be expended on development and defence is to be raised ; but the bill is silent on that: point. Ministers, furthermore, do not give the information when we ask for it, although I am extracting from them a little at a time. The present financial system should be scrapped.
– The royal commission supported the present system.
– I point out that when I asked a question regarding the royal commission recently I was told that it did not say that the Commonwealth Bank should lend money to the Government free of interest. I did not say that ; I said that the commission had reported that the bank could lend money to the Government ; and if it could, it should do so.
– Does the honorable senator say that under his financial scheme he could pay off the national debt?
– Of course. Bonds could be issued. I have tried several times to show to the honorable senator the soundness of my proposals.
– How many millions of pounds of credit would the honorable senator advance?
– I cannot get the honorable senator to admit that I give fair answers to his questions. For years we have been told that u Labour government should not be put in office because the members of that party do not understand finance. Those who have said that do not understand the subject themselves. Addressing the Constitutional Association in Sydney on the 30th May, 1938, Sir Herbert Gepp, emphasizing the duties and responsibilities ‘of youth in a democracy, said -
The so-called mysteries of banking, finance and economics are mysteries only to those who will not take the trouble to try to understand.
He went on to say -
I do not suggest it is possible to obtain a complete appreciation of all factors operating in our complex civilization, but I do maintain that the colossal ignorance to-day of economic fundamentals is the gravest danger to the continuance of democracies.
Are we not here to protect the democracy? Is it not the duty of honorable senators generally to learn the truth about these things? There is no great mystery in finance. Banking is the simplest thing in the world. The banks have a fixed rate of interest for deposits and a fixed rate of interest for loans. Unless you happen to be a friend of the manager of the bank, the rate of interest fixed for loans is strictly adhered to, and persons can only secure loans from the banks on the soundest of security. Even in those cases the banks have a margin of 45 per cent, in their favour. It is impossible to secure an advance unless genuine security is offered. Even then the bank, merely by a book entry, opens a credit account in favour of the borrower. I propose now to quote no less an authority than William Ewart Gladstone, one of the greatest statesmen in British parliamentary history in relation to this subject. Exposing the ruthless fashion in which the Bank of England and London’s financial interests had asserted their power, he said -
From the time I took office us Chancellor of the Exchequer I began to learn that, in the face of the bank and the city, the State had an essentially false position as to finance . . . The hinge of the whole situation was this: The Government itself was not to be a substantive power iri matters of finance, but was to leave the money power supreme and unquestioned. In the conditions of that situation I was reluctant to acquiesce, and I began to fight against it, by financial self-assertion, from the first.
Anybody who is frightened to tackle the mo-nev monopoly is leaving its power unquestioned. It is the duty of the Senate not to allow that position to go unchallenged. M’r. Gladstone continued -
I was tenaciously opposed by the governor and the deputy-governor of the bank, and 1 had the city for an antagonist on almost every occasion.
I remind honorable senators of what happened at the outbreak of war in 1914. The directors of the Bank of England went to the Government wringing their hands and asking for assistance. The Government told the banks to close their doors, and guaranteed to them a loan, which might be any amount from £50,000,000 to £150,000,000 on bills becoming due. The banks were to be recompensed if anything was lost between the Saturday and the following Thursday, during which period their doors were closed by edict of the Government. In the meantime, the Government was printing millions of notes’ to help the banks over the crisis. The same thing was done in Australia when the note issue was increased and three £1 notes were advanced for every £1 of gold offered as security by the banks. That sort of thing goes on all the time.
– When did that happen ?
– In 1914. This is what William Jennings Bryan, a famous American statesman, had to say in regard to this subject -
The money power preys upon tlie nation in times of peace mid conspires against it in rimes of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes.
That is a striking indictment from one of the most enlightened men in the United States of America. In 1914, he was Secretary of State in President Wilson’s Administration. Did I not prove less than a week ago that one banking trust with a capital of $22,225,000 could, by refusing to supply money, hold up industry at any time? I have said before that if the Commonwealth Parliament declines to tackle the money monopoly there is no hope for Australia; in fact, there can be no hope for the world. If we cannot blame world governments for world conditions, whom can we charge? The financial power is rapidly heading” us for a war which may even destroy civilization itself. This bill should have shown how the money required is to be raised rather than how it is to be spent. Wc cannot borrow money for the defence of Australia without putting an insupportable burden on the taxpayers. I could tell honorable senators how the Government of America, came to heel at the behest of high finance. No government can function without money. When President Roosevelt enunciated his new deal, his first step was to borrow £1,000,000,000 sterling from the banks. They had brought about the depression, And they lent him the money with which to end it and got him under their thumbs, just in -the same way as the Australian banks have the Australian governments under their thumbs. In referring to proposed government works, Mr. Stevens, the Premier of New South Wales, pointed out that the extent to which any scheme could be carried out depended on how much money the banks were agreeable to advance. The Commonwealth is a sovereign power, and is the only country that has a bank belonging to the people. Since 1924, the Commonwealth Bank has really not functioned as its promoters intended. When the late governor of the bank died there was an opportunity for the private banks to secure control of that institution, and they did so in that year with the aid of the Bruce-Page Government.
– The Commonwealth’ Bank has expanded since then and opened many branches.
– Yes, and it has made a profit of nearly £2,000,000. The operations of the bank might have been stopped. We can understand why there was so much objection to the foundation of the Commonwealth Bank when we see what it has done. Only recently, I addressed a meeting of 800 people in Perth on that very question. In dealing with some of the activities of the Commonwealth Bank I mentioned that if it had not been for the profit the bank made on the note issue there would have been no transcontinental railway. The bank found nearly £6,000,000 for the construction of the line from Port Augusta to Kalgoorlie. That money would not have been available but for the profit on the note issue. So far no honorable senator has adduced proof’ to controvert the accuracy of my remarks on this subject. Some honorable members interject, but they do not furnish facts, and no member has declared that the Commonwealth Bank cannot issue interest-free money.
– A statement is not necessarily accurate because the honorable senator makes i’t.
– I am not expressing my opinion, but I am citing the finding of the Royal Commission on Banking and Monetary Policy. Will the honorable senator say that the statement I have cited is not contained in the report of the royal commission? Only recently I spoke for one and a half hours on this matter to Senator Dein. Strangely enough there are many interjections by honorable senators who refuse to learn the true position of the banking monopoly. I advise Senator Dein to remember the observations qf Sir Herbert Gepp that I quoted.
– I want to know the facta.
– Then in that case, why does not the honorable senator read what Sir Herbert Gepp said. I am quoting from the findings of the royal commission and am not giving my own opinion. I knew years ago that money should have been advanced by the Commonwealth Bank, but it remained for the royal commission to tell the people that that was a function of the bank. I wonder whether honorable senators know what money is. Money is anything passing from hand to hand that will be accepted as payment for goods or services. That is an economic definition.
The PRESIDENT (Senator the Hon. J. B. Hayes). - I desire the honorable senator to keep within a measurable distance of the bill. I understand that he is trying to show bow the Government can raise the money.
– I have mentioned my own opinions, and I have given cor.robative evidence. There are in this chamber legal minds, and they will admit the value of corroborative evidence. If 1. make a statement and adduce corroborative evidence from some of the greatest authorities in the world, it should have some effect on honorable senators, but unhappily, some of my observations are received with smiles. I am an old man and perhaps am impatient, but I do not think it right that honorable senators should treat matters of serious importance in such a manner. Perhaps if I had been returned as a member of this chamber twenty years ago the national debt would not have been a quarter of what it is to-day. Once or twice I have been asked why I do not get my party behind me. The query is absurd. My party recognizes my outstanding ability in finance. I am its mouthpiece and I have its backing, and the members leave this subject to me.
– We wish to hear about supply and munitions.
– According to the bill, the manufacture of munitions is to be carefully scrutinized and there is to be no extravagance and no profit, but the Opposition members doubt whether the provisions will be effective. Senator Leckie spoke about the profits made in the Old Country. I wonder whether honorable senators know how many millions of pounds were paid in taxes on excess profits by munitions makers in England. Nevertheless, the Government says that its bill is better than the measure brought down in England. Within a week of the introduction of the bill in the Old Country, the value of shares in armament firms rose by £20,000,000. Did the investors believe that the British Government would be able to control prices? Of course not. Senator Leckie has said that most of the profits are made out of the raw materials. The Broken Hill Proprietary Company Limited has mines in South Australia and smelters in !New South Wales. How will the authorities ascertain the true cost of the raw materials used by that concern? The company owns both the raw materials and the factories, and the authorities acting under this legislation will not be able to find out their prices. Thomas Jefferson, President of the United States of America in the generation before Lincoln, said - .
If the American people ever allow private hanks to control the issuance of their currency, first by inflation and then by deflation, the corporation that will grow-up around them will deprive the people of all their property, until their children will wake-up homeless on the continent their fathers conquered.
Those are notable words. I am not quoting the opinions of second-rate men. I am giving first-rate authorities of the American nation and of the British nation. William Ewart Gladstone was one of England’s most famous Prime Ministers. I have told you his opinion. These are not Senator Darcey’s views, but when I make a statement, I must fortify it with an unimpeachable opinion.
– We would prefer to hear the honorable senator’s opinions, because he is better on his own.
– I have talked on this subject ever since I first became a member of this chamber. Members of the Country party have doubted whether what I said about banking 13 ‘right, but I can assure them that it is right. Honorable senators should realize the position existing to-day. The enormous expenditure that is proposed will involve the raising of £63,000,000. The money has to be provided and the taxpayers will be called upon to pay interest oh it. I have told honorable senators what the payment of interest means. It will involve £1,000,000 a week on money that will not be in existence. A note will simply be made in the hanks’ ledgers and that is all. The sooner we, as representatives of the taxpayers, take definite steps with respect to this matter the sooner we shall get free of this octopus. So long as there is a power superior to Parliament so long will Parliament be unable to exercise real control. The banks realize this. How can we have democracy when there is a power that controls governments, puts them into office, and puts them out? Only recently Sir Reginald McKenna said that money had the power to create governments and to put them out of office. The banks demonstrated their power over the late Mr. Ramsay MacDonald. They would have put him out of office if he had not gone over to their side. I have already shown what the banks’ rake-off means. The flotation in England of £6,000,000 at £98 10s. will put £45,000 into the pockets of the promoters.
– They do not seem to be taking up the loan freely despite the rake-off.
– In London the trouble is not to obtain money but to get into a loan. Did I not remind the Senate of comments made by Professor Reddaway, who was on the staff of the Melbourne University and had been on the staff of the Bank of England? He said that a loan to raise £20,000,000 would be opened in London at 10 o’clock in the morning and would be closed half an hour later. The job was to get into a loan. He also mentioned that there was a group of financiers known as “ stags “ who made applications in a dozen different names. Did I tell the Senate of. a joke that he made about, the matter? So many applications were made from one house with respect to loans that he felt it his duty to report to the health authorities how overcrowded that building was. Is it sound finance in raising £6,000,000 to lose 30s. in every £.100 and to pay the exchange rates in addition?
That is the kind of finance for which this. Government stands, and it is not sound. The honorable senator knows that it is not. He must know that the Commonwealth Bank had to make good the deficiency of £6,000,000 of public subscriptions in connexion with ‘the last conversion loan issue. I explained to the then Treasurer (Mr. Casey) one evening on the train that if the public subscriptions had represented real money, the Commonwealth Bank, without departing in any way from the sound methods of finance, could have issued credit to the amount of £36,000,000.
It is important that all honorable senators should understand this phase of finance because this is a supply and development bill, and I am trying to impress upon honorable gentlemen that there is at the command of the Government an almost inexhaustible fund of bank credit for all of its purposes. I have said repeatedly that banks do not lend real money. All they do is issue credit and charge interest to those of their depositors who require this credit. As the result of the development of the existing banking system over 200 years, a bank’s cheque, for all practical purposes, is as good as gold.
The Commonwealth Bank can make available to the Government all the money that it requires for its’ developmental proposals. If this were done, the taxpayers of the Commonwealth would be saved the huge amount of interest payable yearly upon loans that are raised in the orthodox manner. I have pointed out on other occasions that the total holdings of all the banks in Australia in notes is only about £17,000,000.
– I thought the honorable senator held the view that money was merely the instrument for the purchase of commodities. Now he is speaking of notes.
– Surely the honorable senator has grasped the meaning of what I have been saying with reference to the banking system which the Commonwealth is up against.
– And the honorable senator is right.
– 1 know I am. Nothing hurts the conservative mind so much as a new idea. But I am hopeful that if I keep hammering at this subject 1 shall eventually convert some honorable senators on the Government side. The present system for raising money is most detrimental to the credit of the Commonwealth and the welfare of the people. When I resume my seat I should like to see some honorable senator supporting the Government rise and tell rae, if he can, where I have been wrong in any statement that I have made since I came into this chamber.
– It would take longer to tell the honorable senator where he is right.
– Coming from the honorable gentleman, that is a most unbind remark, because I also gave him half an hour in the train the other night. It is my intention, whenever I get a chance, to explain to honorable senators the futility of the existing system and I arn hopeful that eventually some at least of the Government’s supporters will admit that “ Darcey is right “.
– The honorable senator’s colleagues do not admit that.
– I feel sure that the majority of my colleagues will back me up in all that I have said.
– We should now like to hear something about the hill.
– Since the measure is a supply and development bill, my remarks, I contend, are relevant, because there cun be no development without money, and I am endeavouring to show how money should be obtained.
– The bill relates to the supply of munitions and the survey, registration and development of the resources of Australia.
– I am well, aware of that, and I repeat that we shall not be able to do any of these things unless we make proper provision for the supply of money. It, would be impossible to purchase any of the commodities required without money or bank credit, and we should not forget that the Government will have to find £75,000,000.
– That sum is not mentioned in the bill.
– This measure deals with only part of the Government’s defence scheme. Without money there can be no development. How does the Government propose to raise this money ?
– Order ! Legislation to provide the money required under this measure will have to be introduced. Then will be the proper time for the honorable gentleman to give the Government the benefit of his views concerning the best way to get the money.
– Under this bill the Government could do that by regulation.
– No money, no bill !
– That is the point of my argument. Unless the Government finds the money, how can it go on with its proposals ? I have already explained how the Commonwealth Bank had to come to the assistance of the Government in connexion with” the recent conversion loan. When I asked the former Treasurer in the train the other night where the Government proposed to get this latest £6,000,000 he could not tell me.
– Did he understand the honorable senator?
– Probably the understood me as well as the honorable senator does, but was reluctant to admit that he did. i have endeavoured to put before the. Senate the view that the first concern of The Government- in connexion with this defence measure is to find the money. I. have on other occasions explained how the great money trust of the United States of America, having control of trust, funds amounting to £4,900,000,000, could, by the manipulation of bank credit, prevent every wheel in American industries from turning. I have said in this chamber over and over again that the curse of the world is the wrong use of this tremendous money power. So far the only nation that has attempted to meet the position is Germany. The finance ministry in that country has discarded orthodox methods of finance, and our information is to the effect that Germany is doing quite well. The German Government is now wisely utilizing the nation’s credit in the interests of the people.
– And it is doing some wonderful work.
– Since Germany, so we are told, is a nation which the British democracies have to fear, we cannot ignore the financial system now operating in that country. If we are to do all that may be required of us to make this country secure, we shall be obliged to follow on the same lines as Germany and use the nation’s credit.
If a man goes to an insurance office for the purpose of borrowing £1,000, the insurance office has to find real money for him. Unlike the banks, an insurance office cannot create credit. The banks, as I have shown, are in a much stronger position. By the creation of bank credit they have had the world by the throat for over a century. Finance knows no political boundaries. In the Napoleonic wars, for instance, the Paris branch of the famous Rothschild family financed Napoleon and the London branch was purchasing the promissory notes issued by Arthur Wellesley and sending them back to London. When Napoleon required money for the disastrous expedition to Moscow, he again went to Rothschild for more gold. When, later, he escaped from the Island of Elba and people were flocking in tens of thousands to his standard, once more he applied to the house of Rothschild to finance his military operations. In this way he placed an enormous burden upon the people of France. To this day they are paying interest on loans raised during the Napoleonic wars.
– Order 1 The bill deals with the supply of munitions. I shall be glad if the honorable senator will confine his remarks to the subject matter of the measure.
– There is provision in the bill for the control and limiting of profits in connexion with defence contracts. This is very necessary, because during the Great War hundreds of millions of pounds were extorted from the people in the form of excess profits. Already in this debate several honorable senators have mentioned the immense saving effected by the British Government during the war by the establishment of a department for the supply of munitions. Mr. Lloyd George claimed that the cost of eighteen-pounder shell cases had been reduced from about 22s. to 12s. 6d. each, and the resultant saving amounted to many millions of pounds.
This Government is dealing not with the private capital of individual citizens but with the taxpayers’ money. Therefore it should adopt every safeguard to check the. profit element.
– Does the honorable senator suggest that the Government should enter into business undertakings using the taxpayers’ money?
– Yes, and in that way put an end to profiteering. In a time of emergency the Government should have complete control of the whole of the assets of the nation.
– That course could be taken under the existing law.
– The Government will have to do that if it is sincere ‘in its expressed determination to stop profiteering.
– What does the honorable senator suggest should be done?
– I had made .up my mind not to take any notice of interjections, but, being Irish, I could not resist the temptation to reply to remarks, however, ridiculous, made by honorable senators opposite. I do not think that the bill will achieve what its sponsors claim for it, and as its enactment would be against the best interests of the people of Australia, I shall oppose it.
– During this discussion some interesting statements have been made; so interesting, in fact, that I have managed to keep awake all the time. I was delighted at the humorous speech of Simple Simon - I refer to Senator Leckie.
– Order ! The honorable senator may not refer to another honorable senator as Simple Simon.
– To my mind, Senator Leckie is the modern counterpart ,of Simple Simon, but evidently I should not be in order in saying so, even metaphorically. I therefore withdraw the words Simple Simon as applied to Senator Leckie and say that his speech showed clearly that he regarded us as Simple Simons. He must have so regarded us, or he would not have spoken as he did. The honorable senator believed us to be so simple that we would accept his story that the poor manufacturers never make a cent of profit, but that all the profit is made by supporters of the Country party. On the other hand, the speeches of Senator Johnston, a member of that party, always create the impression that supporters of the Country party never make any profits, but that all the gain goes to men like Senator Leckie and his friends. It is a case of “ Pay your money, and take your choice “. I do think that Senator Leckie was drawing the long bow when he spoke of the philanthropy of the manufacturers. He went so far as to say that, during the September crisis, manufacturers and retailers of jute bags in the Old Country did not make a cent of profit, notwithstanding that the price of the goods which they sold was multiplied many times. He gave the impression that all the profit was made by the poor devils in India who grew the jute. I did not believe the honorable senator. Such talk .causes us to mistrust honorable senators opposite. They cannot say such things seriously. Senator Leckie could not have been serious this morning. If he and other honorable senators opposite were to analyse their speeches carefully, they would be forced to conclude that nine times out of ten “they attempt to dope the people of Australia when they speak. One of the reasons why we on this side are opposed to this bill is that we do not trust the Government and its supporters. We know, too, that the people do not trust them.
– The honorable senator is wrong.
– The common people are afraid of measures of this kind ; they fear that such legislation will be used harshly against the workers, whilst the friends of the Government will go scot free.
– The electors of Griffith did not take much notice of the honorable senator.
– On the contrary, the Griffith by-election was. an outstanding demonstration of the solidarity of the Labour party. In order to try to defeat the Labour candidate, the anti-Labour forces had to introduce the sectarian issue; but notwithstanding such tactics and the flood of pernicious propaganda that was used by thom, the Labour party won the seat, and its candidate, Mr. Conelan, now sits in the House of Representatives. However, I shall not say more about elections; I leave that subject to honorable senators of such intelligence and integrity that they cannot get beyond paltry things. I propose now to deal with the Government and some of its legislation. As I have said, we on this side mistrust the Government, and, therefore, we shall oppose this bill.
I wish to make passing reference to the Government’s national insurance scheme, in order to show how some distrust has arisen. I shall adopt the Russian practice of forming composite words, and refer to national insurance as “ little Natin “, who was conceived about twelve years ago, its twin fathers being Bruce and Page. It went through a costly period of gestation; thousands of pounds were spent on all kinds of inquiries. Last year, it was hurriedly brought into the world.
– It was still-born.
– No; on the contrary, it was very much alive and kicking. It was brought into the world hurriedly, so that those honorable senators who had been defeated at the election, and were retiring from the chamber, could gaze upon it, and admire it. During the lactation period, wet-nurse Bridgen and others did their best to keep it alive.
– Why not talk about the hill?
– I am referring to the Government’s record, and pointing out that it made a hash of the only major item of policy which it has introduced into this Parliament.
– Order! The honorable senator must discuss the bill.
– I am showing that the fiasco of national insurance has created mistrust. I shall deal with the bill.
– Hear, hear !
– I had not intended to speak at length, but I shall now keep on, and probably will continue for an hour and a half.
– We do not mind how long the honorable senator speaks provided he says something.
– I know my job, and I know that I can talk for a certain period whether or not I say anything worth while. On many occasions, I have listened to the honorable senator when he has given me a “ pain under the pinny “. Even if my words cannot penetrate the concrete-like cerebellum of the honorable senator, I can interest myself. I say that, notwithstanding that I have great regard for Senator Dein. At times he is interesting; indeed, he is a good fellow - to himself.
We are told that this measure is complementary to another measure. Unlike national insurance, it is a twin. One measure is the National Registration Bill and the one before us is called the Supply and Development Bill. We may refer to them as “Register” and “Reggy”- the latter name being short for “ Regulations “, for as far as I understand that measure, the power to make regulations is one of its main features. It is a bill for incubating regulations. Should it become law, we shall have more and more regulations as time passes. Of course, this latest child of the Government may be strangled at birth. That would be its fate if Dr. Collings had his way. But to be serious - and really this is a serious matter, particularly in view of the international situation. In the House of Representatives, a very intelligent tory member named Mr. Fadden called this bill “ The new despotism “. Mr. Fadden is not, a Labour man. Another member of that chamber who, until recently, was a Minister in the tory Cabinet, but who lost his portfolio when the flood came, said that it was the most dangerous measure ever placed before Parliament.
– Did he vote for the bill?
– Members of the Country party are liable to do anything; they are able to talk one way, and to vote another way. I have come to the conclusion that members of the Country party are more tory and reactionary in their outlook than is any member of the United Australia party. They succeed admirably in pulling their own legs; and their success causes them to try to pull the legs of other people. They cannot pull them any longer. Mr. McEwen, the member for Indi in the House of Representatives, spoke seriously - and the country will take him seriously, even if Country party members do not - when he said that this legislation was one of the most dangerous measures ever placed before Parliament, because it is in the nature of a blank cheque. Should this Parliament support a measure which so vitiates the principles of democracy, it will bring Australia nearer to the standard of the totalitarian states. We claim to be proud of our democracy; yet day after day, in this Parliament, we are asked to vote for measures which embody the methods of Hitler and Mussolini. That is a good reason why we should study the bill carefully before we vote. We should take heed to the warning of the ex-Minister of the Crown who described it as the antithesis of democracy. Some honorable senators opposite have said that this bill is merely a skeleton. Possibly it, is, and the flesh of regulations can be placed upon - it that will enable Mr. Casey to become a Dr. Frankenstein and produce a monster whose power will be used against the people.- I doubt whether the Government is really serious in bringing this measure forward ; surely it realizes that in some respects the measure is very dangerous. What would be the position if there were a change of government and this measure was on the statute-book? A government with a policy different from that of this Government could use the powers which this bill confers upon the Ministerto strip industrial leaders and financiers of much of that which they now possess. It could be used in such a way as to makeconditions very awkward for the friends of those who are now sponsoring the bill. Is it suggested that honorable senatorsopposite are supporting a measure of this description without knowing what is involved ? Supply and development is very important to every man and woman in this country, not only during *a war, but also in time of peace. I presume that supply will cover fuel, food and finance, and, although no provision is made in this measure for the appropriation of money the Government could, under regulations, appoint committees to deal with. finance. There are clauses in this measure which could be used by a government led by Senator Darcey to set up committees to show how finance could be furnished on the basis outlined by that honorable gentleman. A good deal of interest is taken in the organization necessary for defence because in war every man, woman and child will be involved directly or indirectly. It will not just be a conflict between the navies, armies and air forces of opposing nations, but every one will be affected. In the event of war, as in the ease of other catastrophies, such as epidemics, not only the parties directly concerned are interested, but also’ the whole nation. Immediately an epidemic is likely to affect everyone there is universal interest and individuals are forgotten. The same could be said of universal unemployment and insecurity. If every man in Australia were in danger of losing his job, action would soon be taken by the Government to overcome the disability of unemployment. Modern warfare is totalitarian and involves every one, and to win a conflict a nation must be organized and prepared.
– The honorable senator has not always spoken in that strain.
– I have’ always advocated efficient organization for the preservation of human life and to secure economic security. We believe in effective and efficient organization for the defence of Australia. Would honorable senators supporting this bill favour an investigation of Australia’s capacity for the production of essential goods?
– With the object of feeding, clothing and sheltering all of our people? I believe in organization for defence purposes, but I would go even further and use the legislative powers of this Parliament to make provision for inquiring into and calculating the volume of essential goods necessary to provide every one with a decent standard of living.
– Such subjects have been inquired into on several occasions.’
– We do not know the productive capacity of this country.
A census should be taken to show, not only what this country is producing, but also what it is capable of producing.
– Have not the States any responsibility?
– Under our present system the Commonwealth is fighting the States and the States are fighting the Commonwealth, while thousands are on the verge of starvation. If we are to oppose the activities of totalitarian states we must commence with an inquiry into our economic capacity, and use our power for the welfare of the people. This Government appears to think only of a few manufacturers, share-holders in the Broken Hill Proprietary Company Limited, rent-lords and money-mongers. The Labour party considers the interests of the masses, but this Government and those who support it think only of their bank accounts.
– The electors do not agree with the honorable senator.
– Possibly not. For every 10,000 books written on war and military strategy, only one is written on the subject of supply. Major Shaw, an eminent, military writer, says “ Supply forms the basis of the whole structure of war “. With mechanized armies there must be greater mobility; but this Government, “and other tory governments which have preceded it, have not had the courage to undertake the standardization of our railway gauges. The late Prime Minister (Mr. Lyons) in two of his policy speeches, said that the Government would give immediate attention to the matter, but nothing has been done. Will the passage of this bill guarantee to increase the mobility of armed forces? Although there are varying gauges throughout the Commonwealth, only a few hundred miles of railway in South Australia has been converted to the standard gauge. Senator Brand, who is a military expert, has asserted that a standard gauge will not necessarily facilitate the transport of troops, but all other authorities have declared that with mechanized armies and improved mobility a standard gauge is essential. If a large number of troops had to be transported by train from the south to beyond Brisbane over the present varying gauges, unnecessary delay and inconvenience would occur. Is a measure such as this heeded to authorize tue construction of a main highway from the south to Darwin? Not at all. How can we have faith in the Government when it does not attempt to do’ these things which could have been done without this bill ? Colonel Lawrence, another writer on military tactics said -
The invention of bully beef has modified land war .more profoundly than the invention of gun-powder because “ Range is more to strategy than force.”
Yet we find that we are suffering from disabilities affecting mobility and range owing to the laxity and indifference of the Government. Honorable senators on this side of the chamber attack not so much the principle of this bill as the proposal that a new and expensive department is to be set up. Why should we be so enthusiastic about the setting up of a new department much of whose work could be done by departments already in existence? The efficacy of this measure will depend entirely upon its administration. If it were administered by a government sympathetically disposed towards the people of .this country - I refer of course to a Labour government - it could be made to achieve much good ; but so long as the present Government remains in office the workers will be afraid that this legislation may be used to their detriment.
The Labour Opposition in the House of Representatives, after great persistence, inserted an amendment in clause 27 as it was originally drafted which gives at least some protection to the members of trade unions against victimization by regulations promulgated under it. I should like to know whether this bill will give to Mr. Casey - I almost said the Fuehrer - the right to engage non-union labour. This clause deals specifically with union labour, but I should like to know whether it will be possible by devious ways, to employ in this new department people who are not members of trade unions, and to impose on them conditions which are in conflict with industrial awards.
– I should say that it would not.
– No provision in this bill completely safeguards the workers who may be employed by the new department or by subsidiary organizations that may be established by it. I know that Senator Foll would not be a party to the employment of non-union labour at “ scab “ rates. That is a point, however, upon which I should like to have the considered opinion of the Government, b trust that the honorable senator will be able to allay my fears that that unsatisfactory state of affairs might be brought, about.
– All members of the Public Service are covered by awards of the Public Service Arbitrator, and every industry covered by an award must abide by the conditions imposed by the Court.
– That may be so, but it is possible that some men may btgiven employment either in the department or in organizations set up by the department, who will not be covered by awards. I should like the Minister in his reply to deal specifically with that point.
– No . Australian Government, irrespective of its political complexion, stands for the breaking down of industrial conditions.
– Individual members of this Government may stand for the principle of the observance of award conditions, but in actual practice it may be found that if the department sees an opportunity to cut down expenses it will not carry out the wishes of individual members of the Ministry, or, ‘for that matter, of the Government itself.
– I do not think that is a fair suggestion.
– My only concern is to safeguard every worker who may be employed by the department or by organizations which are under it.
I think I can claim that I speak for my party generally when I say that I am pleased with the action which has been taken to make possible the production of aircraft in this country by Australian workmen.” We look, forward to the day when all of the necessary and essential work in connexion with the production of complete aeroplanes will be carried out by our own people. The Australian workman has the ability to do it. Yesterday, I listened with interest to a statement made by an honorable senator that this bill need not have been introduced but for action taken by certain rulers in other parts of the world. I point out that mistakes were made in the past by governments, of which the present government* is a lineal descendant, which have not been to the advantage of the aircraft industry in this country. Only a few months ago I was in close touch with “Wing-Commander Wackett, who is at present in charge of the aircraft factory at Fishermen’s Bend. He spoke very bitterly about the way he had been treated when some years ago he attempted to engage in the manufacture of aeroplanes in Australia, and had gathered about him 30 or 40 skilled workers. About that time a certain English gentleman came to Australia and convinced the Government that British manufacturers could supply all the aircraft it needed. The Government listened to him, with the result WingCommander Wackett had to abandon his enterprise and disperse his skilled men whose services to the aviation industry have probably been lost. Had the Government acted with foresight in this matter, the industry would be in a much better position than it is to-day. If this bill becomes law, we hope to see the rapid development of the aircraft manufacturing industry in this country, so that in the years to come we shall not have to depend on second-hand machines from England, which in the past have been readily acquired by the Commonwealth.
Have we any guarantee under this bill that the defences of Queensland will be strengthened? Dp to date, the defences of Queensland have been grossly neglected. In a letter dated the 7th June, the Minister for Defence (Mr. Street) advised our Leader in the House of Representatives (Mr. Curtin) that the amounts expended on defence works in Australia during the financial years 1935-36 to 1938-39 were-
The amounts expended in Queensland during the same period were -
So, out of a total expenditure over the whole Commonwealth of £3,331,251, only £76,S69 was expended in Queensland. During the Griffith by-election the Prime Minister (Mr. Menzies), referring to defence expenditure, said, “ I am an Australian, and I look at this matter from an Australian point of view. I would rather go out of office than pander to one particular State “. We contend that the people of Queensland have an Australian outlook equal to that of any honorable senator opposite. It cannot be denied that that State is being unfairly dealt with in the matter of defence expenditure. -No amount of rhetoric will convince us that a fair thing has been done for the defence of Queensland, when the figures disclose such a small proportion expended in that State by comparison with the total expenditure over the whole Commonwealth. The statement was made Joy the Minister for Defence (Mr. Street) during the recent by-election, that Queensland is adequately defended. He pointed out that Queensland has a light horse regiment at Gympie, but Gympie is over 1,000 miles from Cairns. When people at Cairns wanted to’ improve their military training they wrote to the department asking that a military unit be established in that district. The reply was that the people from Cairns could train at Townsville. Townsville is over 200 miles from Cairns. Apparently the six Ministers from Victoria and the six Ministers from New South Wales have no conception of the vast distances that separate town from town in Queensland. If they knew anything of the geography of Australia they would not make such stupid statements.
– Who made such a statement ?
– I believe that a letter was written to the department and that the reply was in the terms I have indicated. I obtained this information from what I consider to be an unimpeachable source. It is only in line with the ideas and conceptions of this torydominated Government.
– If the honorable senator tells me that any official wrote the letter mentioned, I shall take up the matter, because it is sheer stupidity.
– I shall obtain the information, and if I am wrong I shall admit that I made a mistake. I know that the Minister for Defence (Mr. Street), in speaking of the defence of Queensland, said that there was a light horse regiment at Gympie. He also said that the Government was spending so many thousands of pounds at Amberley, near Brisbane.
– The Minister for Defence also said that we were spending money at Townsville and Moresby.
– We say that that is necessary. I ask the honorable senator to show to the people of Queensland that the advance that is being made towards totalitarianism under this measure will mean that that State will be thoroughly and completely defended. In order adequately to defend Queensland, is it necessary that a measure of this nature should become an act of Parliament? That is the information that I desire the honorable senator to supply to me. I wish to have a word on the subject of finance if the President will permit me.
– I have been generous, and I shall not make an exception in the case of the honorable senator.
– Another honorable senator will demonstrate that the important subject of finance is covered by the bill. Much of the argument that has been advanced in this chamber and in the House of Representatives has been directed to the profits made out of the manufacture of munitions. If members of the Opposition can show that it is possible to produce munitions without providing profits for individuals the
Government should take cognizance of what we say. Senator Leckie has sought to disabuse the minds of the Simple Simons of the Opposition by attempting to show that the men who are to build annexes and produce shells and munitions are philanthropists who do not seek any profit at all. As a matter of fact, in listening to the honorable senator, I almost came to the conclusion that those manufacturers will lose money.
– They probably will.
– The experience of every country shows that the manufacturers of munitions have been the greatest exploiters of the people that the world has ever known. That cannot be denied, because statements of prominent statesmen and authors quoted in this chamber have proved that the production of munitions has been a bloody traffic and has lined the pockets of profiteers with millions of pounds of ill-gotten gains. The workers fear that under the pretext of organizing the production of munitions by private enterprise there will be developed in due course the same rapacity for profits that we have seen in other activities. The workers speak to us as their leaders and ask whether it is not possible by legislative enactment to organize government instrumentalities so that all the defence requirements of Australia can be provided without a penny piece going into the pocket of any private exploiter. That, is the inquiry that the workers have made, and we reply that if the country were thoroughly and efficiently organized and the Government’s instrumentalities were used in this direction, all the necessary munitions could be provided without any profit going to boodleiers or profiteers.
– Does the honorable senator think that the Australian manufacturers wish to make profits out of the country’s disasters?
– The Australian manufacturer may be bubbling over with sympathy and may be full of the milk of human kindness, but greed is one of the most powerful factors in human nature. In 99 out of every 100 employers, greed will overcome sympathy, and so when the opportunity offers the Australian manufacturer will make as much out of munitions as he can.
– The honorable senator is of a different opinion when it is not a tariff matter.
– I suppose that I could deal with the subject of the tariff in a speech on this measure. It may be possible eventually for Mr. Casey to undermine the tariff, and, therefore, I should be quite in order in answering the smiling gentleman who adorns the Ministerial bench. However, I shall not do so, because I am dealing with the subject of supply and development and not with the tariff. “We know what we are doing when we support the tariff ‘because we believe that by the encouragement of the primary, secondary and even tertiary interests of Australia we are doing the best to minimize war prospects and to bring about permanent peace. If it were not for the struggle for markets between nation and nation the possibility of war would end. There is the main reason for the uncertainty in Europe. The development of Germany and its struggle for markets are the dynamics behind that country, driving it to overcome smaller states and threaten other powers. Although the totalitarian states and fascism go hand in hand the same struggle for markets is occurring in Icily. Only recently Professor Copland, in an enlightening article, showed that under the veneer of fascism, Germany was beating Italy for the Balkan trade. There can be no solution unless we are prepared to make economic changes. Although this Government is bringing in a form of fascism by this measure mid the bill to enforce the national register, it will riot overcome the antagonisms which are leading to a world struggle. We support the tariff because we know th.it it” is a means of developing Australia. If we can make ourselves secure economically, and other nations can aim at the welfare of their nationals rather than provide profits for the individual, peace may prevail throughout the world. The members of the Labour party know where they stand. That is why we can tolerate neither this measure nor the national register. We believe that the Government is not sincere in trying to effect a fundamental change in this country by its proposals to prepare for war. The Leader of my party has said that we are very suspicious of this measure and of the national register, and Senator Leckie has regretted that that statement was made, but we know the ideas held ‘by the majority of’ the Ministers. Those ideas are not democratic, ‘but favour people who economically dominate this country and are opposed to the great masses of the workers. The Government is losing its sense of democracy and is heading to make this a totalitarian nation.
– 1 have listened with great care to the expressions uttered on both sides of the chamber on this measure. I look on .the bill as a notable step in preparing for the defence of Australia. The Ministry is adopting a long-range policy in respect of what might happen in future, and it -is preparing to do in peacetime what was done in the Great War after hostilities” had broken out. The ‘Government is setting out now to organize the manufacturing and other . phases of industry mentioned in the bill. It is wiser to do this work in peace-time than to attempt to undertake it when the nation is at war and is disorganized, and a state of hysteria prevails throughout the country. I commend the Government on its far-sighted policy in bringing this bill down now. Honorable senators will recall what happened during the last war, and it is our duty to see that no such sho.rtcoini.ngs shall occur again. When the war broke out in 3914, and until 1915, young men who were sent out to defend their country did not have the support of munitions, guns and supplies which should have been available to them. This Government has learned from the experience of those days and it is now endeavouring to build up an organization so that there will ‘be no repetition of such a deplorable state of affairs. I am very glad to see that the bulk of this work is to be distributed over the whole of the Commonwealth. I have listened carefully to the speeches delivered by honorable senators representing the States with the smaller populations. They have complained that those States are not to receive as much benefit as those with the larger populations. The great majority of the manufacturing establishments in the heavy industries are located in the States of New South Wales and “Victoria, so it is natural that the Government should look to these factories for the hulk of its requirements under this measure. I should like to see the Ipswich workshops and Walkers Limited, at Maryborough, Queensland, get a fair proportion of the orders. No doubt they will, ‘but I admit that in this national plan the Government would be justified in getting its defence requirements from the most available sources.
It has been urged by honorable senators of the Opposition that the installation of annexes to private establishments is not warranted. I disagree. The scheme seems to me to he an essentially sensible one. “When the requisite machinery is installed in these annexes it will be immediately available for operation in time of emergency, because skilled operators will have employment in these establishments on peace-time needs. For instance, a lathe man operating machines for commodities in every day use will, under this scheme, ‘be given some experience on trial orders with the special machinery to he installed by the Government in the annexes to the establishment which employs him. If war came, he, with his fellow-workers, would be immediately switched over to work the munitions lathes with which he would be already familiar. This scheme, in my view, represents the acme of industrial efficiency. The Government is on the right lines in developing these annexes to private establishments. It has been stated that these private firms will make exorbitant profits on defence orders. That objection cannot be substantiated. The Minister has explained that departmental accountants will carefully scrutinize all costs in connexion with munitions manufacture, and will advise the Government if excess prices arebeing charged.
We have been told that certain special machinery, which cannot be manufactured in Australia, is being imported. Last year, in company with Senator Brown and Senator Brand, and other members of the Public Works Committee, I paid a visit to the Maribyrnong Munitions Factory and was much impressed by what I saw there. The manager showed me machinery which had been imported, and told me that if he had had to depend on Australian manufacturers to produce it, he might have been obliged to wait for a number of years. It is not suggested that Australian manufacturers could not produce this machinery, hut it is asserted that it could not be made economically or within a reasonable time in Australia, because the number required is too small to justify the installation of the expensive plant required for its manufacture.
– How does the honorable senator know that?
– I visited the Maribyrnong factory and saw the machinery. I could readily believe that a special precision machine, for example, could not be manufactured in Australia except at a very high cost.
SenatorSheehan. - Does not the honorable senator agree that it would be . better to have all this machinery for munitions in government establishments instead of having so much of it installed in private factories?
– No. I believe in private enterprise. Does the honorable senator suggest that private manufacturers will use . the machinery improperly ? I have no misgivings on that score. I am quite satisfied that they will take every care of the machinery in order that it may be ready for use by trained operators the moment it is required. I was very much impressed with the munitions being produced at the Maribyrnong factory, especially the anti-aircraft- gun, which I regard as a wonderful piece of defence equipment, reflecting the greatest credit on the operatives who made it. At the aircraft factory at Fishermen’s . Bend, Melbourne, I was shown machinery which, I was informed, could not be manufactured in Australia.
– Why ?
– Because, as I have explained, the Commonwealth requirements are limited and it would not be economical to install the expensive plant required to produce it.
Discretionary power must be given to the new Department of Supply and Development with regard to the manufacture or purchase of machinery. We must trust the managers of the munitions factories whose chief concern is the efficient working of the establishment under their control. It has been said that the production of munitions in Australia will be a costly business. I have no doubt that, in time, costs will ‘he greatly reduced from their present level. The Victorian Railway workshops are at present turning out 18-pounder shell cases and Senator Leckie this morning gave us some information about the processes of manufacture. The present price, I understand, is about 20s. each, compared with 12s. 6d. in Great Britain during the war after the costing system had been introduced by the British Munitions Supply Department. The total yearly output, working one shift, is 50,000 cases or, working a double shift, 100,000 cases. When the annexes have been established in private factories the output should ‘be very greatly increased, and I have no doubt that the cost to the Commonwealth will be reduced, possibly to the level reported in Great Britain, especially if Commonwealth requirements amount to millions of shells yearly. However I trust they will never reach such dimensions.
– It is not merely a matter of price. In a national emergency, the Government should take over the works, and operate them.
– I do not say that the price is too great, but it is the price which the Railways Workshops of Victoria - a State enterprise - has found to be reasonable. The Government is aware of its responsibility, and is trying to establish a fair basis of cost. In the case referred to, the trial order shows that a. reasonable charge is £1 for each shell case. As I have said, production on a much larger scale would reduce costs.
– We on this side represent the “ anti-rake-off “ party.
– It may be that, on Occasions, even State enterprises will attempt to make a “ rake-off “. All honorable senators must be relieved that the European situation is brighter than it was ; but we would “be unwise to slacken our efforts for the defence of this country. The Government’s policy was formulated when war seemed imminent, and it may he contended that, with an easing of the international situation, there should be a slackening of activities.
– We do not say that.
– I am glad to hear that interjection. In my opinion we should put forward our best energies during the present period of comparative quiet and make the utmost preparation possible for our defence.
– Yes, and thereby provide work.
– I believe that the Government’s programme will do a great deal to provide employment. It may not do so immediately, but when it is in full swing, that should be its effect. The. Leader of the Opposition said that he thought that the Government should take over these works. I point out that this bill gives authority for that to be done in the event of war. In peace time it would be foolish to disorganize private enterprise. Honorable senators will remember that, after the last war, numbers of men who had been engaged on government works associated with war activities, were thrown out of employment. The Government’s proposal means that men will not need to leave their usual place of employment in order to produce munitions of war. They will work on the same premises, but on war work instead of making peace requirements, and at the conclusion of the war they will remain in the same factories, working for the same employers. I consider that arrangement one of the best features of these defence proposals, because it will not be so likely to upset the labour market.
– It will be found difficult in practice.
– I realize that after a war it is impossible to get back to a peace basis without some dislocation. There must be a transition period during which many- adjustments will have to be made. But men will have a better chance of remaining in employment if they have never left the service of their employers. They will work in the same establishments for the same employers all the time. I emphasize that manufacturers will make munitions only to the order of the Commonwealth Government. They will net be permitted to tender for the supply of war materials to other nations. Honorable senators will admit that one of the chief objections to the private manufacture of munitions is that makers of armaments supply war materials to both parties in a conflict. Australian manufacturers will not have to meet that temptation. They will pro duce munitions only to supply government orders, which will be for a certain quantity of goods at stipulated prices. It may be contended that rings will be established in order to maintain high prices; but we must remember that similar work will also be done in government workshops, so that any tendency to innate prices will be curbed. I promised just now to give an instance of profiteering by State enterprise during the last war. I shall do so by referring to the supply of meat by the State butcher shops of Queensland to the Commonwealth and Imperial Governments for consumption by the troops. I shall quote from the report of a select committee of the Legislative Council of that State, dated the 19th September, 1917-
State Butchers’ Shops.
These shops show a profit of about £35,000 for the financial year ending June, 1917; but included in this is the sum of £19,000 received from the Commonwealth Government, an amount in dispute regarding meat purchased by the Federal Government, apparently for the troops. It does not’ appear that the Government gave any value for this £19,000 and, in any. case, it cannot be said to he a legitimate profit made by the State Butchers’ Shops. The transaction does not show much solicitude for the Federal Government or the Imperial Government in their purchase of meat for the troops. The evidence disclosed that the Government, in consequence of their contract with the Imperial Government for the supply of meat for the Imperial troops, supplied meat to the State Butchers’ Shops at a price nearly 30 per cent, lower than the Imperial Government were paying.
It would appear that that State enterprise made huge profits out of meat urgently needed for the troops.
– Is that the only instance that the honorable senator could find?
– It is the only one that I have in mind at the moment.
– The honorable senator has told only one side of the story. I shall supply the other side.
– I have quoted from the official report. I may be misjudging the transaction, just as honorable senators opposite may sometimes misjudge contracts entered into by private enterprise.
Mention has been made of the advisory panels which are to be constituted under this legislation. The Government’s purpose is to obtain the best advice possible for its guidance. The establishment of these panels will ensure that a wise policy will be followed, and that all goods supplied will be of good quality and workmanship. No man can be an expert in every phase of industry, and the fact that these trained men will give their services voluntarily should be of inestimable value to the nation. Their appointment should mean that the best value will be received for the expenditure incurred.
The bill is to remain in force for five years. That provision should find acceptance with the Opposition, which is continually predicting that before long there will be a change of government. In that event, the powers which at first will be exercised by the present Government, would be in the hands of a Labour government.
For some years after the termination of the last war there was a world-wide movement in favour of peace. Many countries in an endeavour to display a desire for peace, not only scrapped warships, munitions and materia], but also allowed the strength of their naval and military personnel to be reduced to a dangerous degree. Great Britain, which made an important gesture in this respect, was followed by other countries, including Australia. In 1930, the Com-, monwealth Government, led by Mr. Scullin, also reduced Australia’s defence expenditure considerably. Later, other countries were forced to commence to re-arm, owing to the concentrated re-armament of certain European countries, and this country, with its small population and large area, is doing its share to make up the leeway. In the speeches delivered by members of the Opposition, constant reference has been made to the advantage of having all work mentioned in the bill -done by governmentowned and established factories. I consider that this would mean in many cases duplicating machinery that is already here and used daily in the manufacture” of peace-time goods. Further, it would mean that a great amount of money would be locked up for no purpose. Work such as is to be undertaken under this measure can well be done by private enterprise and not by government instrumentalities. From the unfortunate results revealed by extracts from the reports of the Auditor-General in Queensland, in regard- to State enterprises embarked upon in that State, I intend to show honorable members that private enterprise can undertake the work more efficiently and economically. Of twenty State enterprises in Queensland, sixteen showed huge losses. Of the four which showed a profit, two held monopolies; they were the State refreshment rooms and the State Hotel at Babinda, North Queensland; of the other two, one, the State saw mill, was sold or transferred to the Forestry Department, and the other was the Bowen coal mine.
– From what is the honorable senator quoting?
– A book written by Mr. Bernays.
– A most pronounced Tory, and a most bitter opponent of Labour.
– The honorable’ senator does not deny that these facts are taken from reports of the AuditorGeneral in Queensland? The venture in connexion with State cattle stations was commenced on the 8th June, 1916, the capitalization being approximately £1,200,000, and the trading results from the inception to the 30th June, 1930, represented a loss of £1,800,000. The actual loss to the Statecould not at that time be given as the accounts had not been completed, but it was estimated that the total loss would eventually be £1,900,000. The State Produce Agency commenced operations on the 8 th April, 1918, the capitalization being approximately £4,000, and the trading results from the inception to the 30th June, 1929, showed a loss of £13,845. It should be stated, however, that its general business showed a profit in each year, but, unfortunately, between 1920 and 1921, there was an extraordinary loss of over £32,000 as a result of the purchase by the manager without authority of a large consignment of wheat. When the accounts were finally wound up, there was a loss of £18,685. The railway refreshment-rooms, which enjoy a monopoly, showed the handsome profit of £133,751 from their inception on the 1st July, 1918, to the 30th June, 1929.
– What has this to do with the bill.
– I am giving these facts to show honorable senators opposite the disadvantages of governmental enterprise.
– The honorable senator is citing peace-time records.
– The majority of these undertakings were conducted during the war and in peace time following the war. They were disastrous to the taxpayers.
– Why not discuss the bill.
– The honorable senator does not like what I am saying. But I maintain that this question of government enterprise is the essence of the bill. I now propose to deal with the trading results of the butcher shops conducted by the . State Government. This should be of interest because an army must be fed. The butchering enterprise was commenced in 1915 with three shops, the approximate capitalization being £100,000, and at the 30th June, 1929, the profit was approximately £57,711 ; but when operations were discontinued there were 90 shops, and a total loss of £28,014 had been incurred.
SenatorCollings. - The honorable senator is entirely disregarding the benefit conferred upon the people, who, during the period mentioned, were able to purchase meat at about one-half the price they had been paying previously.
– The State Hotel at Babinda, which also had a monopoly of the trade, commenced operations in May, 1917 ; the capitalization was £22,000 and the profit made from its inception to the 30th June, 1930, was £33,714. During a war, canneries would be busily employed in providing tinned foods for the troops. The State Cannery in Queensland commenced operations on the 8th January, 1920; the capitalization was approximately £60,000, but from its inception to the 30th June, 1930, a loss of £64,432 was incurred. The capital written off was £26,482. The net loss to the State cannot be definitely determined as the accounts have not yet been finalized, but on the realization of assets it is estimated that the loss will amount to £21,000, or . a total loss of £112,000. The Hamilton Cold Stores commenced operations on the 9th March, 1925; the capitalization was £320,000, and the trading results from its inception to the 30th June, 1930, showeda loss of £65,345.
– That is on paper.
– That is in the Auditor-General’s report. The Chillagoe Smelters commenced operations in June, 1918, the capitalization being £295,402, and the trading results from its inception to the 30th June, 1929, showed : a loss of £642,317. The capital and trading losseswritten off amounted to £281.82:1. The next State enterprise with which I propose to deal is the Irvinebank treatment works. Operations were commenced in October, 1919. The capitalization was £35,050. Whilst operating as a State , enterprise the loss incurred amounted to £19,796. Then we come to the State arsenic mine which commenced operations in January, 1918. That mine was capitalized at £42,996. From its inception until the 31st December, 1925, the loss was £17,755, and capital and trade losses amounting to £13,274 were written off.
– But the consumers of Queensland got cheaper arsenic.
– When the State butcher shops were in operation the retail butchers were quite satisfied to carry on. As a. matter of fact they were doing a better trade. The advent of State enterprises did not put private enterprise out of business ; as a matter of fact the reverse of that happened; private enterprise put the State out of business in spite of the fact that the State concerns paid no local authority rates or taxes.
– Why should they have done so? They were reducing the cost of living to the people.
– The extract from the yearly report of the AuditorGeneral does not show that. The next State enterprise to which I shall refer is the Baralaba State coal mine which commenced operations in April, 1919. That mine was capitalized at £37,751 18s. 6d. Whilst operating as a State enterprise the loss amounted to £23,1611s. 9d., and capital and trade losses amounting to £59,209 17s. 5d. were written off. Four other State-owned mines were operating at a loss and only one - the Bowen State coal mine - showed a profit. That mine began operations in August, 1914, and was capitalized at £103,905 13s. 9d. While operating as a State enterprise it earned a profit of £46,77318s. It is operating on one of the best seams of coal in Queensland and has an output of800 to 900 tons to each, single shift. The seam has an average thickness of 10 feet free of bords of dirt, and is of a fairly high-grade quality for steam-raising purposes. In later years it has been supplying coal and coke to the Mount Isa mine, which is the biggest mining venture in Queensland. A State trawler purchased in 1920 cost, including equipment for twelve months, £33,435 11s.8d. Three months’ fishing yielded 15,670 lb. of fish, which sold for a gross return of £412 17s.10d. The cost of running the trawler for this period of three months was £1,216 16s. 3d. In 1921, the trawler, having proved a complete failure, was offered to the New South Wales Government, for £25,000, together with all gear. Out of twenty State enterprises only four showed a profit, and two of these, namely, the railway refreshment-rooms and the State hotel at Babinda, were monopolies. The saw-mill enterprise was sold to the State Forestry Department.
I believe that, this bill provides a good working basis for bringing into line all of the industries which would be essential in war time. If the bill be passed it may have to be amended as the years go on to meet altered conditions. One of its principal objectives is to decentralize industries associated with the manufacture of defence requirements. They are to be spread throughout the various States.
– No, provision is made for the establishment of annexes in Queensland, Western Australia or Tasmania.
– I was informed in answer to a question last week that portion of the aircraft work is to be carried out in the Queensland Government workshops.
– Are any annexes to be established in Queensland?
– Not at present; I have no doubt provision willbe made for that in the future. I understand that ‘certain work is also to be carried out in the Midland Junction workshops in . Western Australia.
– That is news to me.
– Work is certainly to be carried out in the Queensland railway workshops at Ipswich.
– Although the Midland Junction workshops are probably . the finest in Australia, no defence work is to. be . carried out there.
– I have no doubt that provision will be made. for. the allotment to these works of orders for a portion of our defence requirements. Provision is made, for the decentralization of industries responsible for the manufacture of aeroplane parts, and for their assembly at one terminal point. The Government is saving the people the cost of building huge establishments and the duplication of plants which are already in existence. These annexes and the machinery installed in them may never be used, but the expenditure incurred in connexion with them may well be regarded as in the nature of an insurance premium. Most of us are insured against accident and are quite willing to pay the premium demanded for that cover. In this case the people are being asked to pay a premium to guarantee the safety of the country.
– The premium will amount to £1,000,000.
– That is a small amount to ask for the security of the country, considering that it will be expended largely on material which will remain here. I again stress that if this bill be passed there will be a great deal less disorganization of industries in this country in the event of war than would otherwise be the case. It marks a considerable advance on the haphazard methods of building up the defences of the country adopted prior to the last war. If this bill be passed Australia will be much better equipped to meet an emergency.
.- I congratulate Senator Leckie on his clear, well-informed speech dealing with the manufacturers’ views of this bill. It should, silence those who, for no valid reasons, fear that suppliers of portions of Government munitions orders in time of war will become millionaires. On a previous occasion , in this chamber I referred to the necessity for adequate steps to be taken to control profits, whether from munitions or from supplies for the civil population. I am satisfied that avenues for profit-making will be policed. If it be found later that such safeguards are not adequate, then the legislation should be amended to block any loopholes.
One matter has not been stressed sufficiently during this debate. I refer to the search for, and production of, flow oil, which is so essential in peace and war. Some people seem to think that only a few odd samples of oil have been obtained in Gippsland. As a matter of fact, more than 100,000 gallons of crude oil . for use’ in diesel engines has been produced in the Lakes Entrance district by the small scale methods hitherto employed. Soon every tractor in the field and every truck on the road will be powered with a diesel engine. The companies engaged in the work have been mainly concerned with the search for oil, and are not organized for largescale production. In December, last, the Commonwealth Oil Advisory Committee, in a report on the Lakes Entrance oilfield, said that a conservative estimate of the quantity of oil likely to be found on the area . which had been’ tested by bores was 150,000,000 gallons, or about 600,000 tons of crude oil. That quantity is sufficient to enable the extraction of 1,000 barrels of oil every day, seven days a week, for nearly twelve years.
– And the federal member for the district has done nothing to develop it.
– That is most unfair.
– Because it is necessary for the Government to hold large supplies of oil in this country, that committee is prepared to recommend the expenditure of a considerable amount of money to provide huge storage accommodation. At Lakes Entrance we already have a great natural storage of 600,000 tons of oil. This oil is not inflammable and does not evaporate.
The report of the Commonwealth Oil Advisory Committee pointed out that, while insufficient natural gas pressure is present throughout the area to bring the oil to the surface, the new process known as re-pressuring could be applied. This process is being used extensively in the United States of America, and also in Greece. The committee recommends that the re-pressuring process should be applied at Lakes Entrance. It availed itself of the services of a Canadian expert, who has had a great deal of experience in re-pressuring, and was actually engaged in an oil-bearing district in Greece, where good results, were achieved. The report emphasizes that before the repressuring can be successfully applied, it will be necessary for all lessees and operators in a particular area to agree to unified control. As pressures of 600 lb. to the square inch and over are applied in re-pressuring, it would be useless to apply such pressure in one bore, if it could escape through some other bore. For this reason re-pressuring must be applied under a system of unified control over a large area. I understand that complete agreement to undertake re-pressuring has been reached by companies operating over an area of about five square miles near Lakes Entrance. Expert opinion is that this area is sufficient to allow satisfactory results to be achieved. There is another difficulty. A good many old bores have been -sunk all through this oil stratum into what is called the water horizon. It will be necessary for these to be cemented in order to enable re-pressuring to he applied without leakage. The Oil Advisory Committee recommends that Government assistance should be afforded to do this work. Such assistance would provide employment on a national work. Many of these bores were sunk without expert knowledge by pioneers in the search for oil in this country, and it would be unreasonable to expect the companies now holding the leases to incur the expense that would be involved in correcting the errors of persons who, in these cases, have ceased to be actively interested in the search for oil. The Commonwealth Government should grant assistance on a generous scale in order to- enable these oil bores to be cemented so that re-pressuring may be applied.
The early development of this Gippsland oil-field is of great importance to the Commonwealth. The proposed Department of Supply and Development should interest itself in the project. I hope the Government will announce an early decision on this subject, and advise the companies concerned what help will be afforded to deal with the old bores mentioned. Facilities already exist in the establishments of the Commonwealth Oil Refineries Proprietary Limited for refining crude oil. Every obstacle to the early development of this field should be brushed aside.
– The Government has obtained a big boring plant.
– The facilities exist already.
– Did not the Commonwealth Government, and the Victorian Government, make a grant for that purpose ?
– The Government has bought a big American drill.
– All possible assistance should be given to those who desire to apply the new process.
.- I am at a loss to appreciate the necessity for the introduction of this measure. It seems strange that in the earlier stages of the preparation of the defence programme, ho suggestions were made for the establishment of a Department of Supply and Development. Why was not this project thought of before the need arose to bury a baby and to see whether a new plant would grow from its burial place. A fresh portfolio had to be found for a Minister who had been moved along, and the Government decided to call him the Minister for Supply and Development.’ I should have thought that the necessary machinery existed already without making proposals to give power to a man who had demonstrated his inability by foisting upon the nation the unsatisfactory national insurance scheme. This measure provides powers that are far greater than any other Minister in Australia has ever held under the parliamentary system. Honorable senators are expected to say “ Aye “ to legislation which must react to the prejudice of the working classes of this nation. The powers are so wide that I doubt whether a dictator would require more, and they might be used by the Government party to the detriment of the workers.
– Not by this party.
– I know how the workers would be handled under this measure. I have no doubt as to what the Government would do in a state ‘ of emergency with the powers conferred by this bill. The measure provides unlimited powers, and they will be added to by regulations. The whole system is dangerous. I do not know why all this is necessary. According to the Government, the bill had been drafted to do something in the interests of the nation, but it seems to be propaganda to delude the people. I was astounded to learn that £40,000 has been paid to Germany for machinery. I am concerned about one aspect of that transaction. We have been making preparations for wai’. Surely those preparations were not being made against an unaggressive nation ! During the dark days of September last if Australia had gone to war, our enemy could only have been the nation that is now receiving £40,000 from us. If hostilities had broken out, after the order had been placed, Australia would have been unable to obtain the machinery subject’ to this purchase. It has been said that when Great Britain is at war, Australia is at war. Despite our experts, we hardly know where Australia would have been in the event of war. Light has been thrown’ on the preparations for the defence of this nation- against an aggressor, I take it that the only step an enemy would take to prevent Australia from accomplishing much in a war would be to see that no oil tankers reached the Commonwealth. The contribution to the debate made by Senator Brand was good. He has shown his wholly Australian sentiment by expressing the view that something should be done to develop our resources of flow oil. Light has been thrown on this subject by men of his type.
– The trouble is that the Government has been talking, but doing nothing.
– That is true.- Last night Senator James McLachlan- spoke on the same subject, and quoted a statement by a mine manager as to what could be done. The manager said that his concern could produce 150,000,000 gallons of oil. When it was pointed out that that represented half the quantity that Australia would require, he said that it could not be produced in less than twelve years. These particulars are also contained in the company’s report, and that is the position, because the Government is doing nothing. The powers that control the oil market will not permit the Government to do anything.
Senator Brand has stated that the people at Lakes Entrance in Victoria could produce 1,000 barrels of oil a day on every day in the year. Each barrel would contain 44 gallons. That is only one source of supply in this country. I believe that there are other places, particularly Roma, where oil could be produced if the Government were sincere. A member of a recent Ministry announced that the authorities would not permit any boring for oil on land that had been sealed. I believe that oil companies own land adjacent to areas where oil could be found. Those concerns can now induce men to say that oil is not available at this or that spot, but- the day will come when a government will be in office that will see that the oil resources of the country are successfully tapped.
– That government will need to follow a different policy from that adopted by the Labour party- at Newnes.
– The honorable senator stated that the Labour party did. not want the wheels at Newnes to revolve.’ Despite the fact that the Labour party said that it was wrong to hand over a national project to private enterprise,, the Labour party adopted on that occasion the attitude that we are adopting now.
– What did Mr. Lang do in the matter?
– Mr. Lang opposed the handing over of a great national undertaking to private enterprise. I shall refer to a statement that I made previously in this chamber. The manager of the works of the Broken Hill Proprietary Company Limited at Newcastle informed me that that concern owned the plant in the Wolgan Valley, but was not prepared to work it, and that Mr. Davis of the Gelatine Company could not work it. Only the Commonwealth Government could work the shale deposit at Newnes or Capertee. He also told me that I could use this information in any way that I wished. When Senator Dein says that the Labour party opposes this enterprise he is attempting to delude the people. It has been said that the Labour party objected to the Wolgan Valley enterprise. As a matter of fact, Messrs. Treganowan and Chambers wished to start there, but they were told by the oil companies that if they continued to work the Newnes plant their supplies would be cut off in Victoria. When an appeal was made to Senator A. J. McLachlan, who was then the Minister for Development, he said that he could do nothing in the matter. Hero were men prepared to try to develop the oil industry, but one branch of private enterprise was threatened with strangulation by another branch. If this Government were sincere the people would have more peace of mind. In September last, for instance, they were greatly alarmed at what was believed to be the imminence of war in Europe, and there was the fear that Australia might be cut off from essential oil requirements. The Government has not done what might be expected of a national government to ensure self-sufficiency in liquid fuels which are the life-blood of the nation. The development of the Newnes deposits has not been tackled properly.
– Why did not the Commonwealth and New South Wales Labour Governments co-operate in 1930-31?
– The Scullin Government made a substantial grant to interests at Newnes for the purpose of re-establishing the industry at that centre.
– Tell us what Lang did to the Labor Daily newspaper.
– The Minister’s interjection typifies the Government’s incapacity to do the nation’s business properly. The Senate is considering a defence measure sent, to it from the House of Representatives, and while I am directing attention to the most important provision the only contribution which the Minister can make is to ask me what Lang did to the Labor Daily.
The Government has constituted an advisory panel on industrial organization, an economic and finance committee, and a standing committee on liquid fuels. Let us examine the personnel of the lastnamed body: - It includes Mr. P. C. Holmes Hunt, the chairman of the Colonial Gas Association Limited, Collins-street, Melbourne. That association, I understand, produces a certain quantity of liquid fuel in its coke retorts. Another member of the panel is Mr. E. A. Box, 15 Bent-street, Sydney. I do not know what position he occupies. Another is Mr. Keith Butler, assistant manager of the Newcastle steel works, which produces yearly about 5,000,000 gallons of benzol. This company is extending its plant, and I am informed that in about four years’ time its output of benzol will be doubled. Other members are Dr. R. W. Harman, of the Colonial Sugar Refining Company Limited, Sydney; Sir David Rivett, Chief Executive Officer of the Council for Scientific and Industrial Research; Mr. A. E. Dawkins, of the Munitions Supply Laboratories, Maribyrnong; Mr. A. C. Smith, of the Development Branch of the Postmaster-General’s Department; and Mr. L. J. Rogers, Commonwealth Fuel Adviser. It is known that many people connected with Australian industrial concerns have interlocking associations with the major oil companies. This fact gives ground for the suspicion that all that could be done to develop Australia’s oil resources has not been done. A limited quantity of flow oil is being obtained from bores at Lakes Entrance, Victoria, and Mr. Davis is said to. be busy on his scheme to develop the Newnes shale deposits. He hopes to produce oil in about three years’ time. The Government should have ear-marked some portion of its proposed expenditure on defence for the development as state enterprises of the resources at Newnes and Capertee. The people are not satisfied with what the Ministry has done so far in this direction. There is a feeling of uneasiness at the possibility of Australia being isolated in a time of war, and being cut off from overseas oil supplies.
The provisions in the bill to keep a check on profits in industry are entirely unsatisfactory. They will not prevent undue profits from being made in the annexes which it is proposed to set up adjacent to certain private manufacturing establishments. At the end of the ten-years contracts these annexes, we are told, will be demolished or removed. We know what will be done with them. They will be practically given away to the private firms which may be operating them. .
– What absolute rubbish !
– It is intended to dispose of them at the end of the tenyears period, or renew the contract. We believe that they will be given to the wealthy friends of the Government. These annexes should not be attached to private manufacturing establishments. They should be built as extensions to government railway workshops in the various States, including workshops in country centres, thus ensuring decentralization ‘ of defence industries, and minimizing the risk of complete destruction by aerial bombardment. The. objective of a hostile air force would be to destroy cities, and especially those locations in city areas where defence industries are carried- on. This matter is causing a great deal of uneasiness in the minds of the people. The opinion is strongly held that the private manufacture and trade in armaments too vitally affect the national interests, and the issues involved are too serious foi* this business to be entrusted to any authority less responsible than the State itself. I believe this to be an accurate statement of the position, and in support of this view I may, perhaps, point out that the League ofNations, which has given a great deal of attention to this matter, resolved, as early as December, 1933, that it was contrary to the. public interest that the manufacture and sale of armaments should be carried on for- private profit.
Under this bill it will be impossible to control profits. The Government proposes to establish an annexe adjacent to the works of the Broken Hill Proprietary Company Limited for the purpose of manufacturing armaments, and it will permit the company to make a profit of 4 per cent, on the output. Does any one believe that the profit would be limited to 4 per cent, on the actual capital used in the production of a given order ? As a result of the interlocking of capital in subsidiary organizations a large manufacturing con,cern such as the Broken Hill Proprietary Company Limited could, through the higher prices charged for products obtained from subsidiary companies, actually reap a very much higher profit than is stipulated in the bill. The Government should in a time of emergency take over complete control of our defence industries and carry out the work in government workshops.
– Would government workshops produce the raw material.
– Government workshops would not be asked to do that. For nine months after the war began, the British Government depended on private enterprise to supply munitions re* quired by the army, but it found that private enterprise failed to do the job. A month before the beginning of the war no man would have dared to stand up in the House of Commons and say that private enterprise would fail the country in an emergency. Any one who had dared to do so would have been removed from the House. Such a possibility as the great industries of England proving inefficient was not to be thought of, far less mentioned.
– Private enterprise supplied all requirements, but the manufacture of munitions was organized along the lines of this bill.
– Private enterprise fell down on the job, with the result -that the Government established the Woolwich arsenal.
– The Woolwich arsenal had been operating for many years before the war began. It manufactured explosives.
– The Government took over that arsenal and other plants, and manufactured its own war require-: ments. In his speech this afternoon, Senator Cooper referred to the shortage of shells that occurred; now he says that private enterprise did not fall down on the job. I remind him that the royal commission which was appointed to inquire into the matter, proved, beyond the possibility of doubt, that private enterprise did fail. When the British Government was forced, in its own interests, to take over the manufacture of shell cases it found that there was ‘a tremendous difference between the prices charged by private enterprise and its own costs of manufacture.
– . Just such a check as proposed in this bill.
– The Government found that excessive prices had been charged by private manufacturers. It also found that the costing systems of some manufacturers were so unsatisfactory that they did not disclose the actual cost of manufacture. It was difficult to arrive at the truth. The temptation to take advantage of the war situation was too great for many manufacturers. If the Commonwealth Government thinks that by the introduction of legislation of this kind it will be able to bluff the people, it is only deceiving itself. Every man whom one meets in the street wants to know who will get the £73,000,000 which is to be expended on defence. The general belief is that a great deal of it will go in the payment of high salaries to men for whom jobs have to he found.
– That is ridiculous.
– A return of the amounts paid to these men would be illuminating. When asked questions on this point, the Minister in charge of the bill waves his arms and says something about a few hundred thousand pounds. Evidently, he does not wish to say that a lot of the expenditure represents payments to political friends of the Government for whom good jobs have had to he found.
– The same old story!
– The Government claims that efficient checks on profiteering will exist. Senator Leckie said that the manufacturers would become bankrupt.
– He did not say that at all.
– He said that they would not make any profit out of this business.
– He said no undue profit.
– I do not know what is meant by “ undue profit “. Some manufacturers may regard a profit of 100 per cent, as not being unduly high. Among the requirements for defence purposes are large supplies of copper cable which is manufactured at Port Kembla on the New South Wales coast. Although the material used in its manufacture is obtained in this country, it is impossible to buy copper wire at Port Kembla. If inquiry were made at the Port Kembla works as to the price at which a quantity of copper wire could be supplied, the company would reply that it would have to cable to London before it could submit a quotation. All copper wire sold in Australia is sold at the London price, which allows for exchange and freight. Whenever tenders are invited for the supply of copper wire, the same quotation is submitted by every tenderer. That has happened on many occasions when the municipal council of which I am a member has invited tenders for large quantities of this material. The council wrote to the company at Port Kembla asking it to supply the material direct from the works, but it found that all deliveries were made from Sydney at the price charged for similar goods in London.
– It is a world price.
– Yes, a price which includes exchange and freight, although the copper never leaves Australia. That is done whenever tenders are invited,- and the Government submits to it.
– Al Capone tricks!
– The combine which controls copper also controls shipping, oil, and banking; it is international in character, and has its representatives in this Parliament.
– It is a good judge of men.
– Yes; I find that, not many of its representatives “walk out “ on it.
– “Walking out” requires some effort.
– Walking out is generally associated with money. Senator Cooper said that the State enterprises of Queensland-
– Leave him to me; I saw him first.
– Senator Collings may have the privilege of dealing with the ‘State enterprises of Queensland; I shall pass on to refer to various State undertakings in New South Wales. The State brick-works were sold, or, more correctly, given away; and after they were sold the kilns were blown up so that they could not work again. The Monier Pipe Works were sold to a man who had £711s. in his bank account. A similar government disposed of the State timberyards.
– That was years ago. ‘
– By this transaction the State lost many thousands of pounds. The State brickworks were closed down, and there has been so much confusion since that the Government does not know where it is. The State government now proposes to introduce legislation to reduce the price of bricks, and only last week Judge DeBaun, who conducted the investigation, stated that if the Government did not expedite its legislation he would fix the price. That is an indication of the inactivity of a government that is supposed to protect the interests of the people. The Brickmakers Council in New South Wales closed down ten brickyards, but the profits made by the yards still in operation were so high that the council was able to give the owners of the yards that had been closed more than they would have received had they been producing bricks. Why should such exploitation be permitted? What is the State government doing?
– It proposes to prosecute.
– Only because it is forced to do so.
– Thirty-two members cannot force 90.
– Before long scandals will be disclosed in the pipe-making industry and in many others conducted by private enterprise. I again urge the Government to display more activity in the search for flow oil which is most essential for defence and commercial purposes. Could not some of the money which has been made available by the Commonwealth Government be used to re-open bores which have been closed down by the major oil companies? Land which is now held by dummy companies should be resumed and actively worked in an attempt to produce this most essential commodity. On previous occasions, I have endeavored to urge the Government to exercise greater energy in the search for flow oil. Senator Dein contends that the Labour party is opposed to the’ development of Newnes.
– What did the Scullin Government do?
– Even if heavy initial expenditure were incurred in the search for flow oil, the outlay would he more than recouped if commercial supplies were eventually located. This Government, which believes in private enterprise, does not dare to hand over its Postal Department, which is showing a substantial profit, to private interests. No one complains of the loss incurred on Commonwealth and State railways because they serve a national purpose.
– The taxpayers have to make up that loss.
– The taxpayers want additional railways to be constructed, because increased transport facilities assist development and provide ‘ additional employment. Private enterprise is endeavouring to retard the search for oil in this country because its discovery would affect the price of the commodity which they have to sell. I trust that the Minister will be able to state that more effective measures are being taken to obtain oil in Australia so that users will not be exploited by the major oil companies. The advisory committee appointed to inquire into the production of liquid fuel should investigate the claim made by Phoenix Oil Extraction Limited that it can extract liquid fuel from coal at 5d. a gallon. As we have some of the finest coal-fields in the world, the process should be tested. If it can do what is claimed for it liquid fuel could be obtained at a lower price, and we could utilize large quantities of coal, thus providing employment for a large number of men. We should not wait until the existing oil-fields overseas become exhausted before endeavouring to locate fresh sources of supply. I trust that the Minister will . give to the Senate some assurance that the Government is wholeheartedly assisting in the endeavour to discover sources of oil fuel in Australia.
– Possibly this measure possesses some merit, but the powers to be conferred upon the Minister under regulations are unreasonable. Honorable- senators opposite have twitted the Opposition with opposing every measure brought before the Senate. At least one honorable senator has charged the Labour party with having no policy in regard to the defence of this country.- That gives me an opportunity to state for the benefit of honorable senators opposite just what is Labour’s policy on this important subject. It will be found that the policy advocated by the Labour party prior to the last general elections has now been largely adopted by the Government as its own policy. Reference has been made to the loyalty of some honorable senators. Senator Johnston said that we may be good Australians and still be good Britishers. I remind the honorable senator that the quality of loyalty is not to be judged by ..orations, . but rather by. deeds. The members of the party to which I belong have demonstrated their loyalty in a practical manner by doing everything possible to uplift the standards of the people of this country. They represent the masses of the people who, during the last war, were called upon to make the greatest sacrifices. I shall quote a few paragraphs from’ an official bulletin issued -by the Federal Labour party headed Labour and Defence. It was compiled by Mr. Curtin, the Leader of the Opposition in the House of Representatives -
I make it clear at the outset, as I did. when I placed the Labour party’s policy before the people in September, 1037, that there will be no weakness or hesitancy in defence policy when the Labour government assumes office. We recognize that circumstances ‘ impel Australia making full provision for its own safety - for how long- is indefinite, and neither myself nor any one. else can hazard a forecast with any degree of accuracy. Future developments are unknown.
The maximum of our resources is the minimum of our need and that is why I have refused to agree to allowing Australia’s strength to be dissipated in European affairs.
And this for the edification of those who have suggested that the question of Australia’s participation in a future war should be decided by taking a referendum of the people -
I might add that the Labour party’s policy has never envisaged New Zealand ‘ as an overseas country in defence matters, any more than it has placed Tasmania in that category.
As proof positive that the Labour party has not been backward in defence .matters but. indeed, has shown commendable foresight, I direct attention to comments from Australian newspapers on defence - arising from the recent international crisis and in the light of the conference of .Commonwealth and State Ministers - and contrast them with the proposals embodied . in the Labour party’s policy speech delivered by me in September, 1937.
The Melbourne Herald, 17th October, 1938, said : “ The facts in relation to the defence of Australia are that we now recognize how extremely difficult it would be for Britain, even with a preponderance of warships, to assist and maintain the mastery of the seas, particularly around Australia.”
On this point, I said in my policy speech, September, 1937 : “ It is foolish to say that Australia can sustain a sea-going navy” adequate to Australia’s needs. The strength of Australian defence must lie in aviation.”
In moving the second reading .of the Loan Bill (No. 2) 1938, the Minister for Defence (Mr. Street) said -
Development is necessary to provide the re: quired strength. As already announced in the new programme, adopted last March, provision is being made for the completion of the Salmond scheme by raising the strength of the Air Force from eight squadrons, with a first line strength of 96 aircraft, to seventeen squadrons with a first line strength of 198 aircraft, and with ancillary units in proportion. - These figures are now to be increased ito eighteen squadrons with a first line strength of 212 aircraft. ….
Thus, it is; obvious that the Government adopted almost word for word this portion of the defence policy enunciated by the Leader of the Opposition two years ago.
– Surely the honorable senator does not complain of that.
– On the contrary, I am pleased that the Government has done so.- We on this side of the chamber have no desire to gain any kudos for having initiated a policy which has since received the imprimatur of the Government. All we ask is that, in justice, honorable senators opposite shall admit’, that the
Labour party, far from having no policy in regard to this matter, has made a very substantial . contribution towards, the defence of this country. The bulletin continues -
The Herald followed oil by proving the correctness of the Labour view by the statement: “It is clear that in air defence we must improve the standard . and increase the numbers of the force.”
Here again is recognition by the. press of the importance of the statements made in 1937 by the Leader of the Opposition in regard to the adequate defence of Aus-: tralia. . It has taken two years for this Government, and preceding governments of the same political kidney, to see the value of the defence proposals submitted so long ago by the Leader of the Opposition. . The bulletin continues -
I said in my policy speech, over a year ago, that the “ primary need in Australia is the building up of industries until every possible requirement . of self defence can be supplied within the Commonwealth. The “Labour party will establish industries as an integral part of the defence organization.”
By an almost startling coincidence, coming from . a newspaper which assailed Labour’s policy at the last elections, the Herald now says : “ We must push on in every way with Australia’s industrialization; give it a wider spread;, be ready to meet the contingency of being cut off from overseas sources.”
Two years after this statement was published, a bill is brought before us for the control of the resources of this country in preparation for war and we are expected to deal with it as an emergency measure. The bulletin continues -
The Herald comments : “ Such needs include the building or duplication of roods, bridges and railways.”
Then on the question of industrial organization, I find that, the Melbourne Sun, the Sydney Morning Herald and the Melbourne Argus now make almost identical points. The Herald said that “ works and services must be reviewed “ ; the Argus pointed to “ planned development of industry”; and the Sun to the “ planning of supplies.”
Although it has taken two years for the Government and its predecessors to awake to their responsibilities in regard to the adequate defence of Australia, our friends opposite have the temerity to point the finger of scorn at honorable senators on this side and to utter the cheap jibe that La hour, has no defence policy.
Sitting suspended -from . 6.15to 8 p.m.
SenatorFRASER. - I point out that the ideas contained in the bill have been entertained forsome time by this Government. As a matter of fact, when . the Loan Bill (No. 2) was presented to the House of Representatives in December last, the Minister for Defence’ (Mr. Street) said -
Finally, I wish to say a word upon “the difficulties peculiar to and inherent in a defence programme. These are not the normal obstacles which can be readily overcome, but are those inherent in the nature of the defence programme and peculiar to the class of work being undertaken. A defence programme divides itself broadly into the following headings:
Material requirements, in the shape of armaments, munitions and equipment.
Works, such as fortifications, barracks and other accommodation.
Man-power, including its training.
Development in a co-ordinated. manner, so as to ensure that the results represent the maximum allround security obtainable from ‘the defence vote.
Taking material requirements, the resources from which supplies can be obtained are - ‘
Munitions factories specially created for the production of particular types of munitions;
The manufacturing resources of secondary industry;
Importations from overseas.
Accordingly, I say that the proposals embodied in the measure were in the mind of the Minister for Defence when he introduced the Loan Bill. The equipping of this nation for defence purposes, like the equipping of any other nation, is the responsibility of the Government. We, on the Opposition side, have a right to try to assist the ‘ Government with any measure submitted to Parliament. . That occurred recently in the House of Representatives, where the Labour party was largely successful in remodelling the legislation with which we are now dealing.
– ‘The honorable senator flatters the party.
SenatorFRASER.- No. The Government has been willing to adopt the Labour party’s defence policy, and now that proposals for the development of the. country are under review Ministers are listening to reason. We have , already demonstrated that we are unwilling’ to support a proposal to give dictatorial powers to any Minister. History teaches. us ‘ that the greatest profits are made from the preparations against war rather than during the actual war itself. No. doubt, all the industries that have been supplying defence requirements to the Government during the last twelve months have been making handsome profits from these preparations for war. I shall - quote some comments on that point from an interesting publication, The Profits of War, by R. Lewinsohn - in any case, there is no room for reasonable doubt: the armament industry does not desire war, at all events, unless it is in some distant country. What it wants is a well armed peace and permanent tension. Too cloudless a peace is a misfortune - but so may be a war. The constant threat of war: that is what is most promising for this . particular business.
First the press must create the war atmosphere, and then the interlocking interests in the broadcasting stations are invoked. When the way is cleared for gigantic defence preparations, and the idea is firmly planted in the minds of the public that these things must be done, then the large dividend-payers come into the picture. I stated by interjection that this is not the first time we have had advisory panels. This afternoon, Senator Cooper spoke of the lack of munitions for- our troops- in 1914. In the middle of October, 1914, Mr. Lloyd George, the Chancellor of the British Exchequer, sent for the representatives- of the big armaments firms - Armstrongs, Vickers and the Coventry Ordnance Works - and told them that the Government would provide the capital necessary to enable them to increase their output. That is what this Government is doing.
– Except that we are preparing in peace time.
– The Government is preparing for war.
– We are preparing to prevent war.
– That means that the Government is preparing for war. If the declarations of the ministerialists in’ this chamber are to be accepted, then Lewinsohn is correct in saying that the greatest amount of profit is made from the preparation . of the defence of a country.
– War had . been declared, at the time Mr.Lloyd George’ acted.- . -‘*. . ?
SenatorFRASER. - I have had an admission from the front bench that we are not preparing for war. This book points out that the greatest profits are derived from the preparation for war, and not from war itself.
– War was actually in progress at the time referred to in that book.
– What about last September.
– Every one knew the tension that existed last September. Before that time, the Government had stated that it was preparing for the defence of this country. These preparations might go on for another four or five years.
– Does the honorable senator object to the Government’s preparing the defence of this country?
– I have already said that the Government of any country must accept the responsibility of preparing its defence. When we again occupy the treasury bench, we shall provide adequate defence measures and we shall not merely talk about them. I remind the chamber that when I interjected last night that the Government could not equip the present volunteers for the militia Senator Dein complained that that was sheer nonsense.
– Equipped with dud guns.
– I shall quote from the Melbourne Herald of the 7th June -
Mr. Curtin said the vital question was what use was to be made of the information to be derived from the census because if the information was merely to remain in a register, it seemed futile proceeding.
Mr. Curtin said it could not be argued that the man-power information was being required because the appeal for volunteers for the militia had failed as the Defence Department acknowledged that in certain areas it was unable to provide training for some:. of the volunteers offering.
Mr. Street. That is correct.
The Minister for Defence replied that it was correct that the Defence Department could not train some of the volunteers offering. When the occupants of the ministerial benches in this chamber challenge a statement made by us, they should be accurate.
– It was an outlandish place where men could not be trained.
– We are prepared to help the Government.
– The honorable senator does not show many signs of it.
– We have helped the Government up to-the present. This afternoon, a question was raised about the treatment of raw materials by the Broken Hill Proprietary Company Limited. The Government has an opportunity in Western Australia, from which the export of iron ore is banned, to develop immense natural resources for the benefit of this nation. The iron ore could be shipped from Yampi Sound to Bunbury a seaport which is not far distant from the coal mines at Collie, and a valuable industry could be developed. Here is an instance where a development scheme could be put into effect in the interest of the people of the Commonwealth. Under the Government’s developmental scheme so far not a penny has been spent in Western Australia except for the erection of buildings. We have repeatedly asked that annexes should be made to the Midland Junction Railway Workshops. The Government sent an expert tq Western Australia to ascertain what could be done in that connexion. I have asked that the officer’s report be tabled, but the Minister has refused to agree to my request. I resent the refusal of a Minister to supply information to me.
– What is the honorable senator’s view of the iron ore embargo?
– I have already stated my view, but if the Government is prepared to develop the iron ore industry’ for the benefit of the nation, it has an excellent opportunity, particularly as the seaport of Bunbury is in proximity to the coal mines. There is nothing to prevent the Government from developing the. iron ore resources of Western Australia, but it is not prepared to go on with such n scheme because of conflicting interests.
– D’oes the honorable senator favour the embargo?
– I have already stated ray view of that matter. I have said that T would support any action by the Government having for its purpose the treatment of iron ore from Yampi Sound at Bunbury, where an important industry could be developed.
Reference has been made to the control of newspapers and wireless broadcasting in a time of emergency. I have listened to broadcasts from 2GB and 2UE dealing with the Government’s preparations for war.
– Or defence?
– I hope that the honorable senator is right and that the preparations now being made are primarily for the defence of Australia.
The Government has told us that profits will be limited to 4 per cent, of the capital employed in connexion with any defence contract. There is no such provision in the bill. During the last war I had something to do with the manufacture of munitions in Great Britain, so I know some of the things that were done at that time, and I impress upon the Government the urgent need for adequate protection of all munitions establishments. Senator Amour also mentioned this subject this afternoon and told us of the decentralization scheme in connexion with the Woolwich Arsenal. I do not know whether the Government has given any consideration to the establishment of underground factories for munitions, but I think the suggestion should receive consideration. I say this because during the war a great deal of time was lost in British munitions factories owing to air raids. Immediately the warning signal was given, all employees had to make for shelters that were provided. Consequently work of supreme importance was held up, and the morale of the workers suffered to some extent. I understand that . the construction of underground munitions works is receiving attention in other countries, and I think that the Government might keep it in mind.
Owing to the great development in chemical warfare, industries engaged in the manufacture of gases and chemicals would, in all probability, reap high profits. I hold in my hand a graph which shows clearly the ramification of the principal Australian industries. If it were possible I should like to have it incorporated in Hansard. Any explanation which I could offer could not do justice to it. This , graph shows that the principal industries are interlocked through various capital groups in a way that is truly, amazing and in a way, too, that would render futile any attempt by the Government to limit profits. As will he seen by those honorable senators who care to recognize it, the Broken Hill Proprietary Company Limited, and- the various shipping and chemical companies are all more or less closely associated. If, after a study of this graph, any Minister will tell me that it is possible to limit and control profits, I shall be greatly surprised. The Broken Hill Proprietary Company Limited owns a. very large number of subsidiary companies operating under a different name. The Government intends to establish munitions annexes in some of these establishments . and Ministers and their supporters pretend to be optimistic enough to believe that . the. Government will be able, to limit profits on defence contract’s to 4 per cent. We on this side have no doubt as to what will happen. At the end of the five-year period fixed in -the bill, these annexes will be handed over to the private companies in much the same way as an earlier nationalist government disposed of the Commonwealth Woollen Mills and the Australian Commonwealth Line of Steamers, which has not yet been fully paid for.
– That is not correct.
– If . ‘the Minister can show me that the final payment for those ships hasbeen made, I shall be surprised.
But let me return to an examination of this graph. It shows that the Broken Hill Proprietary Company Limited controls a great number of allied and subsidiary industrial concerns. For instance, Hoskins Limited holds 70,503 shares in the Broken Hill Proprietary Company Limited, ‘ , and Lysaght Proprietary Limited has 19,100 shares in that company. The Broken Hill Proprietary Company Limited owns Australian Wire Rope Proprietary Limited, Bullevant’s Proprietary Limited-
– Tell the Senate how many’ workers are employed by the Broken Hill Proprietary Company Limited.
– That company would not employ any men unless it could make a profit from their services.
– Does the honorable senator complain about the wages paid to employees of the Broken Hill Proprietary . Company Limited?
– No; but it is not necessary for me to tell the honorable gentleman that the Broken Hill Proprietary. Company Limited or any other industrial organization does not pay its men more than they are entitled to get under the Arbitration Court awards. “ Other companies holding shares in the Broken Hill Proprietary Company Limited are: Perpetual Trustee Company, 32,724 shares; Commonwealth Steel Company Proprietary Limited. 640,575 shares; Merrylands Proprietary Limited, 19,051 shares; Imperial Chemical Company of Australia and New Zealand Limited, 104,396 shares; Ryland’s Limited (England), 30,038 shares ; Ryland’s Brothers Limited (Australia), 639,950 shares; Assets Proprietary Limited, 14,075 shares; Pooled Assets, 13,050 shares; Elder Smith and Company Proprietary Limited, 11,850 shares; Union Trustee Company, 27,000 shares: The Broken Hill Proprietary Company Limited controls Commonwealth Structural Steel (Western Australia) and holds 410,375 shares in Stewart and Lloyd (Australasia). Stewart and Lloyd (Glasgow) holds 427,125 shares in Stewart and’ Lloyd (Australasia).
Directors of the Broken Hill Proprietary Company Limited are also directors of the Commercial Bank of Australia, the National Bank of’ Australia and the Adelaide Steamship Company.
– What is the honorable senator trying to prove?’
– I am- showing how difficult it will be to control profits in the manufacture of armaments.
– Trustee companies do not manufacture munitions.
– I shall not give the names of the shareholders, for time will not permit, and it would not be right for me to do so; I merely mention that some members of this legislature are big shareholders-.
– What is wrong with that?
– I do not blame these people; I blame the system which allows it.
– How many shares in the company does the honorable member hold?
– I cannot afford to hold any shares in it. Honorable senators opposite must support- these vested interests. The Broken Hill Proprietary Company Limited has interests in Australian Iron and Steel Limited in which it owns all ordinary shares numbering 2,700,007 ; it controls Commonwealth Structural Steel, Western Australia; it has 640,575 shares in the Commonwealth Steel Company of which Sir Keith Smith is a director representing Vickers in Australia.
I pass now from the raw materials which are required for the manufacture of munitions and shall, deal with the chemical side of their manufacture. Honorable senators have spoken of the need for expert technicians in the manufacture of armaments, but, as the result of my. experience in the making of munitions in the last war, I am able to say that most of the- work was carried out by inexperienced men and women. In the event of another war, that state of affairs would undoubtedly exist again, because of the mechanization of industry that has taken place in the meantime, particularly in the manufacture of munitions. Honorable senators who have visited the Small Arms Factory at Lithgow have seen several machines controlled by one man. Even the manufacture of parts of fuses, and high explosives, is done by unskilled workers. Senator Cooper said that the addition of annexes to private establishments would enable men normally employed in such workshops , to he transferred to the annexes in case of emergency, and that, later, they could return to their former employment more easily than if the manufacture of muni- tions were undertaken by the Government.
– There is nothing wrong with that.
– The idea would be all right if it could be carried out; but it would not be carried out.
– How does the honorable senator know that?
– I know it as the result of my experience as a worker in one of the largest munitions factories in England during the last war.
– This is an innovation.
– It is not; it is merely a repetition of what happened in England during the last war. The Government proposes to adopt in Australia a system which operated in England more than twenty years ago.
– There will be ample safeguards.
– The state of affairs visualized by Senator Cooper this afternoon will not arise. I sincerely hope that there will not be another war; but, should war come, every available man, and, indeed, every available woman, will . be required for the defence of the country. Female labour. will be employed for the manufacture of munitions to a greater degree than formerly. If it be right to establish these annexes in connexion with, the factories of private employers in order to meet the change-over from civil life to a state of. emergency, and hack again, the same argument should apply to the establishment of annexes in connexion with railway workshops. Why should not State workshops be extended? What is the reason for giving this preference to institutions belonging to the Broken . Hill Proprietary Company Limited?
– The explanation is that the Government does not agree with the policy enunciated by the honorable senator.
– The reason is that vested interests would not allow it to be done.
– Why does the honorable senator regard the Broken Hill Proprietary Company Limited as an arch criminal ?
– I did not refer to the company as an arch criminal, andI ask the honorable senator to withdraw his remark.
– I withdraw it, and ask why the honorable senator objects to the Broken Hill Proprietary Company Limited ?
SenatorFRASER. - I object to it because I do not believe in the wealth of the country being in the hands of a few people.
– Does the honorable senator suggest that the Broken Hill Proprietary Company Limited should close down?
– Perhaps the honorable senator would transfer its assets to the Trades Hall.
– The following companies have shares in Imperial Chemical Industries of Australia and New Zealand Limited: -
Broken Hill Proprietary Company Limited, 104,396 shares.
Broken Hill South Limited, 21,279 shares.
North Broken Hill Limited, 21,279 shares.
Electrolytic Zinc Limited, 42,559 shares.
Zinc Corporation, 21,279 shares.
Commonwealth Fertilizers and Chemicals Limited, 538,729 shares, and Imperial Chemical Industries holds 4.2 per cent, in Commonwealth Fertilizers and Chemicals.
Imperial Chemical Industries Limited, England, 2,915,729 shares.
Australian Glass Manufacturers, 52,000 shares.
Imperial Chemical Industries holds 24.2 per cent, in Australian Fertilizers Limited and that company has shares in Australian Chemical Industries and Shirley’s Limited.
Just as Mr. Lloyd George, in 1915, placed representatives of Vickers Armstrong Limited on the panels which were appointed to advise the British Government, so on the panels being established under this bill there will be men financially interested in the Broken Hill Proprietary Company Limited.
– They will be on the panels because they will know something about the work.
– And also because they understand profits. Imperial Chemical Industries Limited holds all the shares in the following companies : -
Brunner, Mond and Company Australia Proprietary Limited.
Zinc Proprietary Limited.
Nobel Proprietary Australia Limited.
Industrial Chemical Proprietary Limited.
Leathercloth Proprietary Limited.
Imperial Chemical Industries New Zealand Limited.
Imperial Chemical Industries Alkali Proprietary Limited.
– Does the honorable senator object to such companies coming here and providing employment?
– This illuminating graph also contains some very valuable information with respect to shipping companies. It shows that in Howard Smith Limited the Howard Smith family has 51,780 preference shares and 316,441 ordinary shares. Equity Trustees Executors and Agency Company holds ‘ 160,000 shares. [Extension of time granted.] Howard Smith Limited is one of the monopolies that we have to contend with. It has 45,000 shares in the Broken Hill Proprietary Company Limited and controls Australian Steamships Limited. It holds 1,000 shares in Australian Iron and Steel Limited, and 255,067 ordinary and 142,299 preference shares in the South Portland Cement Company, which, in turn, owns the Berrima coal mine. It also has 325,034 preference and 869,539 ordinary shares in the Caledonian Collieries Proprietary Limited. That company owns Aberdare mine, Aberdare Central, Aberdare Extended, and the Waratah mine. It has also a parcel of shares in the Invincible Colliery Limited which, in turn, owns the Invincible mine and also 38.400 shares in J. and A. Brown coal mines.
– What has that to do with the bill ?
– I am endeavouring to show that the principal manufacturing and trading companies in Australia are so inextricably inter-related that it would be impossible to determine the profits made by any individual company. Raw material would be supplied by a parent company to a subsidiary company, and in that way profits could be obscured. The coastal shipping companies operating between Sydney and Melbourne carry seven times the quantity of cargo carried by rail between those two cities. In these circumstances it is easy to realize why this Government will not proceed with the standardization of railway gauges. A more rapid means of railway transport would seriously interfere with the profitable business of the interstate shipping companies.
– When is the railway between Kalgoorlie and Perth to be converted to the standard gauge of 4 ft. 8½ in.?
– When the Commonwealth Government can influence the Loan Council to provide the Western Australian Government with sufficient money to carry out the work.
– The State government has not even asked for the money.
SenatorFRASER.- The late Prime Minister (Mr. Lyons) said in his last policy speech that the standardization of railway gauges was one of the most important problems which his Government intended to tackle.
– But there is another government in office now.
– Yes, but it is of the same political complexion. Huddart Parker Limited has a one-half interest in the Tasmanian steamers and also controls the Bay steamers. The same company holds 105,505 shares in Metropolitan Coal Company Limited, which owns the Metropolitan mine. It also holds 400,000 shares in Hebburn Company Limited, which owns the Hebburn Nos. 1 and 2 mine. The Hebburn Company Limited holds 166,667 shares in Broken Hill- Proprietary Collieries Limited, which has a director on Huddart Parker Limited. That company also holds a substantial interest in the Melbourne Steamship Company. A director of the Huddart Parker company is on the board of South Maitland Railways Limited. The same company holds 16,173 shares in J. and A. Brown and Abermain Seaham Limited, which control Abermain, Stockrington, Stanford Main No. 1, Stanford Main mine, Richmond Main mine, Pelaw Main mine, Duckinfield No.’ 1 mine, Kearsley mine, and Abermain No. 2 mine.
– Order ! In what way does the honorable senator intend to connect his remarks with the subjectmatter : of the bill?
– I am showing that the companies which will supply the raw materials used in the production of munitions and defence requirements are so closely associated with the enterprises that will use the materials that it will be impossible to check profits.
The Adelaide Steamship Company holds 526,874 shares in J. and A. Brown, Abermain and Seaham coal mines, and has a director on the Broken Hill Proprietary Company Limited, South Australian Gas Company Limited, and the Bank of Adelaide. It also has a director on the boards of Elder, Smith and Company and Elders Trustee, Executor and Agency Limited, which company has a director on the board of Trustees, Executors and Agency Company Limited, and Commonwealth Fertilizers and Chemicals Limited. How can the. Government exercise any control over manufacturers when these companies are so closely related?
– The honorable senator has not read the bill.
– I am stating facts. If the honorable senator desires, and I have sufficient time, I shall give the names of the shareholders in some of these companies.
– Why not?
– One of the most objectionable features of the bill is that extraordinary powers may be conferred upon the Minister by regulation. Parliament is elected to frame laws for the good government of the country, and powers conferred upon Ministers should be by statute and not by regulation. I. trust that the Government will give further consideration to the suggestions I have made concerning the establishment of annexes in Western Australia. Although it may be uneconomic to send raw material to Western Australia to be manufactured into shells and to return the shells to Victoria to be filled, surely other defence requirements canbe manufactured in that State. Last year, when I referred to the acute unemployment in Western Australia, an undertaking was given by the then Minister that £600,000 would be allotted to Western Australia, and that an annexe to be built at the Midland Junction railway workshops would provide employment for hundreds of men. Some days ago I I was told, in answer to a question, that only £170,000 had been expended in Western Australia. I understand that the whole of that amount has been spent on buildings. Some employment will have been afforded, but £170,000 is only a small proportion of the £600,000 that was promised. Reference has been made to the fact that during the September crisis the price of sandbags in London increased by 300 to 400 per cent Senator Leckie said that the retailers in London were hot responsible, as the price is fixed by the jute manufacturers in Calcutta. If that is so, those companies concerned in the production and sale of raw materials in Australia will also charge excessive prices, and, consequently, make huge profits.
– We cannot control t he price of jute.
SenatorFRASER. - No, but the Government should have power to control the price of raw materials used in the manufacture of munitions. I remind Senator Cooper, who dealt at length with the losses incurred on certain State undertakings in Queensland, that an anti-Labour government in Western Australia wanted to sell the State Saw Mills. Senator Cunningham was the Minister controlling that industry, and he knows its value to the State; when . rumours were current that the mills were to be sold numerous deputations representing the master builders and others informed the Government that if the mills were closed the price of timber would bo increased. Senator Johnston knows that only a few years ago great efforts had to be made to prevent the sale of the East Perth power station to private enterprise. The general manager was sent to London by the Premier to negotiate for its sale.
– The sale of the timber mills referred to by the honorable senator was effectively blocked by the Country party supporters of the Government including myself. .
– That may be so. I am proud of the assistance which I was able to render in bringing about the preservation of the East Perth power station as an asset of the State. As . the Labour ‘ representative of the civic authorities,
I was responsible for convening the conference whose efforts resulted in. the reversal of the Government’s proposal to dispose of the plant. Thank God that Government soon went out of office and was replaced by a government - led by Mr. Collier. If that power station . had been sold to private enterprise the . people of Perth would have had to pay” through the nose “ for their electricity. It is . all very well for Senator Cooper to draw attention to the lack of success which attended State government enterprises in Queensland. Fortunately, the experiences of the ‘Queensland Government in this regard have not been repeated in other States. The Australian Commonwealth Line of Steamers, another Government enterprise, saved the primary producers -of this country many millions of pounds. Within a week after the sale of the ships by an anti-Labour government, freight rates were raised 10 per cent. These facts cannot he disputed. Just as a government of the same political complexion as the present Government sold the Australian Commonwealth Line of Steamers, so also will the present Government dispose of these annexes to private enterprise at some, future date on the ground that their’ Upkeep is too costly. I have no doubt that they will then be handed over to the Government’s ‘ wealthy friends as a free gift.
During the war of 1914-18 the great armaments firm of Vickers turned out 9,000 guns, over 100,000 machine guns, 7 large warships, 53 submarines, 3 complete auxiliaries, 62 smaller vessels, and 5,500 aeroplanes. It is difficult to form any idea of what profits were earned by that concern. The profits of English armaments manufacturers were restricted by law. It was provided that profits must not exceed 20 per cent, above the average profits of the two years prior to the war.
For certain raw materials produced in Australia the Government is paying London parity price, plus exchange and freight. Is it fair that the prices of raw materials ‘ used for the manufacture of defence requirements in Australia should be based on. sterling, and that freight should : he. paid on commodities that, never leave . the Commonwealth? No attempt-.is made in thisbill to provide for. the restriction of . profits. The Minister, by the promulgation of regulations, may do practically anything he desires.
SenatorGibson. - I ask the honorable senator to read clause 5.
– I have read the bill carefully. Judging from their interjections honorable senators opposite seem to misunderstand its provisions completely.
– I ask the honorable senator to read the proviso to clause 27.
– I have done so. The Minister is given practically unlimited power to deal with any matter by regulation.
– Of course he is, and this Senate has power to disallow any regulations made by’ him.
– If that be so, honorable senators on this side of the cham ber will be given an Opportunity to deal with -any regulations issued pursuant to the provisions of clause 27.I have treated the bill very fairly.
I wish now to reply briefly to some remarks made by Senator Foll with regard’ to the Defence Estimates of the Scullin Government. I remind the honorable senator that that Government was in office during a period perhaps unparalleled in the . history of the Commonwealth. When it assumed office it was faced with an empty Treasury and with an adverse trade balance of over £30,000,000. I am sure that Senator Gibson, who was a Minister in the BrucePage Government, will admit that Mr. Scullin’ had a very difficult task to perform.
– I admit that frankly.
– Yet, Senator Foll apparently gloats over the fact that the Government which followed the Scullin Government increased the defence vote by £500,000.
– And Labour opposed it. and opposed other increases in 1933 and 1934.
– And Labour also opposes the expenditure of £400,000 on the- additions to the Sydney ‘General Post Office. At a time when we are told everything must, be subordinated to defence, what justification is there for the expenditure of £400,000 on the Sydney General Post Office ? Why spend all this money on one building when thousands of square miles in the State which I represent are without postal facilities.
– What about the post office in Perth?
– It is a fine building, as also is the building . next door to it. It is a monument to those men of the Labour party who were responsible for its erection.
. -One of the most interesting, remarks made by Senator Fraser was . that he had read the hill. ‘That statement caused considerable surprise throughout the chamber, because the way in . which the honorable senator religiously, kept away from the subject of the bill suggested that he were unaware of its contents. I suppose I must be very dull - I admit I am - because I cannot see just what the investments of trustee companies in the shares of the Broken Hill Proprietary Company Limited have’ to do with this bill. That has no bearing on the argument, for or against this bill. The introduction of . that matter into this debate is sheer nonsense, and arises from confused thinking. It is just as unsound as the argument advanced ‘by another honorable senator who some time ago recited a list of people who, he said, owned millions of pounds of capital, but included in the list were many trustee companies which are engaged in the investment of money for people in almost impoverished circumstances, but whose investments, in the aggregate, make up a large sum. I know what Senator Fraser was endeavouring to prove; if developed properly the argument is an interesting one.
– When does the honorable senator propose to deal with the bill?
– I am speaking, in regard to matters which were discussed by honorable senators opposite practically all of this afternoon.
– Will the honorable senator give us his opinion on the bill itself?
– I am directing my remarks at the moment towards the extraordinary practice adopted by;honorable senators opposite of drawing red herrings across the trail. I did not intend to speak on this bill, and would not have risen but for one interjection made during this debate. When Senator Brand was speaking about the difficulties of developing the Gippsland oil-fields, Senator Sheehan interjected that the member for the district had done nothing in the matter.
– 1 made that states ment on the information of residents at Lakes Entrance.
– The information that I have will show what the member for Gippsland (Mr. Paterson) did, and it is not based on the hearsay of people who probably did not know of what they were speaking. As Minister for the Interior, Mr. Paterson brought down the Petroleum Oil Search Bill of 1936, providing £250,000 to assist companies to search for oil on a £1 for £1 basis. The measure did not apply only to Gippsland, but the companies there benefited from it. In 1937, Mr. Paterson submitted an amendment to the act to enable the fund to be drawn upon for the purchase of a modern drilling plant to be lent or hired to oil companies. That is the Minister who, according to Senator Sheehan, did not do anything for important undertakings in his electorate. Mr. Paterson also arranged that the first plant to be lent for that purpose should be lent to the Victorian Government for use in Gippsland.
– It is there now.
– The remark of which I have complained was a loose sort of statement that would damage a gentleman who has done his best for the oil interests of this country. I happened to be in Gippsland when certain arrangements were made by the Commonwealth and Victorian Governments which greatly assisted the search for oil in that district. C obtained special information from local residents, and that is what caused me to ask Senator Brand this afternoon whether he knew of the grants that were being provided by the Commonwealth and Victorian Governments. A grant of £5,000 was made by the Commonwealth Government for boring operations for oil in Gippsland. That grant was conditional on the Victorian Government providing another £5,000. Through Mr. Paterson’s work, £10,000 was made a vail able by the Commonwealth and “Victorian Governments for boring on the Gippsland oil-fields. That is not all. Mr. Paterson, who, according to Senator Sheehan, did nothing for his constituents, was instrumental in securing a further advance of £2,500 by the Commonwealth Government, the Victorian Government contributing a like amount. Of course, in politics, any stick is good enough to beat a dog with. I have shown that Mr. Paterson’s efforts involved the provision of £15,000, apart from finding a drilling plant and passing legislation for the benefit of the fields.
– Mr. McEweu carried on that work.
– .Subsidies were granted to several companies on a £1 for £1 basis. Those concerned included Gippsland ventures. Then Mr. Paterson went to the trouble, with Mr. McEwen, of visiting the Gippsland oilfields several times, and he also arranged for the Oil Advisory Committee to go there. When Mr. McEwen was appointed Minister for the Interior, Mr. Paterson induced him to visit the Gippsland electorate and later he went there with the Victorian Minister for Mines (Mr. Hogan). Since then, Mr. Paterson has been on the Minister’s doorstep urging the claims of the area for which, in the opinion of Senator Sheehan, he has done nothing. Mr. Perkins has given notice in the House of Representatives of a bill to provide a sum of money for the re-pressuring of the Gippsland oil-fields.
– It is a hill to amend the act in order to enable the Government, if it so decides, to make money available for that purpose.
– I rose to correct what was perhaps an unintentional misrepresentation on the part of Senator Sheehan. If he has been misled, I sympathize with him, but I suggest that before he attacks a good man who works for his constituency, he should make sure of the truth of his statement.
.- 1 intend to make a few remarks so that it will not go down on record that I gave a silent vote on what I consider to be one of the most iniquitous measures ever brought before Parliament. Senator
Abbott complained of a member of this chamber alluding to the ramifications of the Broken Hill Proprietary Company Limited and its affiliations, and the part they will play under this -measure. He sought to drag a red herring across the trail, and I hope I shall have enough strength to drag the red herring hack. We find that this is -
A bill for an act relating to the supply of munitions and the survey, registration and development of the resources of Australia and for other purposes.
When the bill reaches the committee stage, I propose to move an amendment to that part of the bill to make it read -
That this is a bill for an act to authorize the Minister to present to private enterprise a licence through the political agents to usurp the powers of the Commonwealth Parliament whereby the Broken Hill Proprietary Company Limited will be the central figure in the exploitation of the people of the Commonwealth.
– That expresses your opinion of this Senate?
– Clause 4 of the’ bill states - “ Goods “ includes all kinds of personal property, and also includes anything growing in or on land and minerals or other deposits.
The bill- bristles with absurdities in regard to the regulations that can be issued by the Governor-General. Whether the Governor-General issues them or not, the Cabinet will be influenced by the Minister administering the act, and he in turn will be influenced by the directors of private companies who will be making profits from the manufacture of munitions.
– Absolute nonsense!
– Is it nonsense? The bill contains the following definition : - “ Munitions “ includes armaments, arms and ammunition, and includes such equipment, machines, commodities, materials, supplies or stores of any kind, as are, in the opinion of the Governor-General, necessary for the purposes of defence.
– That is essential.
– I believe that the ordinary English contained in the clause will give an all-embracing power to the Governor-General through the Cabinet, the Minister and some committees, to make regulations from week to week and from hour to hour. Various portions of the bill convey totally, different meanings, and they should be amended when the measure is in committee. For instance, “ time of war “ means- any time during which a state of war exists, and includes the time between the issue of a proclamation of the existence of war or danger thereof and the issue of a proclamation declaring that the war or danger thereof declared in the said proclamation no longer exists.
If the sentence means anything, it means that when the bill has received the Royal assent, the Government will be able to issue a proclamation declaring that a war is now in progress.
– Nonsense 1 Is there a state of war now ?
– There is at times in this chamber._
– I have to read the next definition - “ War “ means any invasion or apprehended invasion of, or attack’ or apprehended attack on, the ‘Commonwealth or any territory of the Commonwealth by an enemy or armed force.
That is very definite. It refers to an attack on the Commonwealth, but the previous paragraph states that a time of war means any time “ during which a state of war exists “. Does a state of war exist in China? Are we sending out raw materials which could be used in the war? As there is a war in China, the Commonwealth Minister for Defence could issue a proclamation declaring that there is a state of war.
– Then we have to find the meaning of clause 5, under which the Governor-General will be overworked. Sub-clause 1 provides that -
Subject to the directions of the GovernorGeneral and to the next succeeding subsection
Among the matters to be administered by. the department shall be -
It is remarkable that the drafters of the bill fell short of what they intended in the original measure presented to the House of Representatives, because they had forgotten all about aircraft, although one of the Ministers is a director of an aircraft company. Paragraph e refers to -
The investigation and development of Australian sources of supply of goods which, in the opinion of the Governor-General, are necessary for the economic security of the Commonwealth in time of war, and in particular, the investigation and development of additional oil resources.
Under the bill “ goods “ includes “ all kinds of personal property “. That might mean that the Governor-General could go to a private home, take any part of a person’s private property, and say that it was needed for defence.
– Nonsense !
– It is not nonsense. Clause 6 provides that where, in the opinion of the Governor-General, it is necessary or desirable in the : interests of the defence of the Commonwealth that information shall be obtained in relation to industrial, commercial or other undertakings, the regulations may require the persons’ concerned to furnish the information and particulars as prescribed.
– Does the honorable senator know what that means?
– Of course I do. The Minister’s interjection . reminds me of. an earlier statement . made in respect of this chamber, to the effect that the Senate, before Labour members came into it, resembled a graveyard in which corpses jumped up how and again to make a few commonplace observations. That cannot now be said of this branch of the legislature. Clause 8 provides- (1). The Minister may, in relation to all or any “of the matters specified in section 5 of this act, or in relation to such . other matters as are prescribed, constitute committees and appoint : persons, the members of those committeesto advise the Minister:
We are not told, but we can form a very good idea, who will prescribe these matters. I” regard this’ clause” as most’ important. Some time ago I asked for the names of the advisory panel on industrial organization, and was told that it would comprise Mr. Essington Lewis, Sir Colin Fraser, Sir Alexander Stewart, Mr. M. Eady, and the Hon. F. P. Kneeshaw. I mention these names because these gentlemen are also the advisory panel under the Defence Act, and a later clause of the billprovides that after assent has been given by the Governor-General all boards appointed under the Defence Act shall automatically become boards under this measure. ‘ Therefore these gentlemen will automatically become the., advisory panel on industrial organization; and the better to understand what this will mean we should learn something about their business associations. Senator Fraser, this evening, shed a good deal of light on this aspect of the Government’s proposal. Recently I asked the Leader of the Senate to inform me what were the special qualifications of these gentlemen, and I received the following reply:–
The first four gentlemen initially met as members of the advisory panel on the 10th March, 1938.
They were in existence even then -
The Hon. F. P. Kneeshaw joined the panel on the 11th April, 1938.
All members of the panel are leading figures in the industrial life of Australia. In view of their knowledge and experience, they arc eminently qualified to advise the Government regarding the organization of industry and associated matters.
Of course, they are. Let me. now tell the Senate something about their business connexions.
Mr. Essington Lewis is” the managingdirector of the Broken Hill Proprietary Company Limited ; managing director of Australian Iron and Steel; managingdirector of . Broken Hill Proprietary Limited Collieries ; a director of Ryland’s Limited, Lysaght Brothers and Company, Australian Wire and Rope Works, Commonwealth Steel Company, Commonwealth Aircraft Corporation, Stewart Lloyds Limited; he has interests in gold production, Wellington Alluvials Limited, a gold-mining company ; he is chairman of Bureau Steel Manufactures Limited, and vice-president- of the Victorian Chamber of Manufactures.
– He has excellent qualifications.
– I admit that he has, but when I was at Newcastle a few weeks ago, I saw on about half an acre of. ground, a shed filled with thousands of shell cases manufactured by the Broken Hill Proprietary Company Limited, which is under the control of Mr. Essington Lewis; This company uses its ships for the, purpose of carrying iron ore from IronKhob in South Australia to Newcastle. Normally, -these ‘vessels ; return to IronKnob in ballast, but now’ they carry these empty shell cases from Newcastle to Melbourne at full freight rates. The shells are to be filled at the Maribyrnong munitions factory. ‘ Honorable senators should remember that Mr^
Essington Lewis is one of the gentlemen who under this bill will advise the- Minister ; in turn, the Minister will advise Cabinet and Cabinet will advise the GovernorGeneral, to issue regulations. Do not honorable gentlemen see the connexion?
Sir Alexander Stewart is another member of this advisory committee. He is consulting engineer to the boards of Broken Hill Smelters Association Proprietary Limited and Electrolytic Zinc Company Proprietary Limited.
Sir Colin Fraser, a third member of the advisory panel, is a director of the Broken Hill Proprietary Mining Company, . chairman of directors of the Broken Hill South Mining Company; a director of Electrolytic Zinc Company Proprietary Limited, Metal Manufactures Limited, Broken Hill Associated Smelters Proprietary Limited, Electrolytic Refining and Smelting Company of Australia Limited, North Broken Hill Mining Company, Zinc Corporation Limited, New Broken Hill Consolidated Limited, the Commonwealth Aircraft Corporation, and the Associated Paper and Pulp Manufacturers Limited. I am not sure, but I think that the regulations to be issued may have something, to do with paper pulp.
Mr. Marshal Thomas Wilton Eady, another member of the panel was president of the Associated Chamber of Manufactures of Australia in 1937-38 ; a director of McPherson’s Proprietary Limited; president of the Victorian Chamber of Manufactures since 1935; and a member of the Victorian Apprenticeship Commission; This last-named gentleman might, with advantage, make inquires into the manufacturing of models for aircraft searchlights in Sydney. If he did he would possibly be surprised to learn that this Sydney concern employs 200 youths under the age of 21 years and only eighteen adults. If he is so much concerned about the apprenticeship of Australian youths he should be able to give the Government some advice.. As these youths reach the age of 21 years they are dismissed, so that, to all intents and purposes, the work which they are doing for this company is a dead-end job.
I come now to the Honorable F. Kneeshaw, O.B.E., M.L.C. ; This gentlema’n is director and general manager of
Australian Portland Cement Company Proprietary Limited. I presume that under this bill some regulations will be issued concerning the production and prices of cement. He is also a director and general manager of Kandos Portland Cement Company and Kandos Collieries.
– All are very capable men.
– Undoubtedly they are capable men; but we on this side question . the propriety of the Government seeking advice from gentlemen who are so closely identified with industrial enterprises that will be vitally affected by regulations to be made under this bill. Surely there are sufficient eminent scientists and technical advisers in the employ of the Commonwealth Government to furnish the necessary advice in connexion with any defence works to be undertaken !
We ‘have been told that certain mat-, ters mentioned in the debate to-day will not come within the ambit of this legislation. On this point I invite honorable senators to read carefully clause 27. It appears to be all-embracing, and gives one the impression that when this new department is functioning the GovernorGeneral will be working overtime issuing regulations. I regard clause 27. as one of the most important in the bill. Under it, persons, who in some respects may be regarded as political agents, will virtually usurp the powers of the Commonwealth Parliament. The clause reads -
If honorable senators’ will read clause 5 in conjunction with clause 27, they will discover that almost anything may be done by regulation. As Parliament is closed for long periods each year there will be very few opportunities -for’ either House to consider and, if thought desirable, reject any particular regulation.. Paragraph b of sub-clause 1 reads - :
The establishment, maintenance, or operation of factories for, or in relation to, the provision or supply of munitions.
That means that practically any material which the Minister thinks fit to bring within the regulations can be brought within the scope of this bill.
– In order to prevent profiteering.
– Recently I asked the Minister for the names of the members of the Economic and Finance Committee. He replied that they were Professor L. F. Giblin, Mr. L. G. Melville and Dr. Wilson. Professor Giblin is a director of the Commonwealth Bank Board and Ritchie Professor of Economics at the University of Melbourne. I was unable to ascertain what position Mr. Melville holds amongst private profiteers. I know, of course, that Dr. Wilson is the Commonwealth Statistician.
– Mr. Melville is the economic adviser to the Commonwealth Rank.
– The Minister for Defence (Mr. Street) denied reports that the failure of the voluntary register in respect of productive capacity was due to mismanagement by the Defence Department. He said that the questionnaire had been prepared, not by officers of the Defence Department, but by the advisory panel on industry after consultation with members of the Economic and Finance Committee. Notwithstanding their great attainments, these men have not given satisfaction to the Minister for Defence. At any time there may be a difference of opinion between’ the Economic and Finance Committee and the Minister of the day. The Minister for Supply and Development (Mr. Casey) was trained as an engineer, and was connected with mining and engineering from 1919 to 1924. He was in London between 1924 and 1931 as liaison officer between the Commonwealth and British Governments. Recently, we had a discussion on international’ affairs ; there was war hysteria at midnight. The former liaison officer was not there, but there must have been some liaison between the Commonwealth and British Governments. When we deal with another phase of this matter it will be well to remember that there is in the Ministry a gentleman who is a director of Australian National Airways, and also of the New South Wales Woollen and Felt Mills. I refer to the Minis ter for Health, and Social Services (Sir Frederick Stewart).
– How old is the publication from which the honorable senator is quoting?
– I am quoting from Who’s Who for March, 1938. Sir Frederick Stewart is also a director of Associated Newspapers Limited.
– The honorable senator is wrong. Sir Frederick Stewart resigned from that position five years ago.
– He is also governing director of 2CH broadcasting station. I inquired at the Library, and was supplied with Who’s Who for 1938, in order that I could inform my mind on the subject, in view of the fact that apart from the statement made by the Minister, no other honorable senators opposite dealt with the bill at all.
– Sir Frederick Stewart’ resigned from Associated Newspapers Limited in 1934.
– Mr. Fairbairn, the Minister for Civil Aviation, is a director of the Commercial Banking Company Limited of Sydney, and of the Union Trustee Company of Australia Limited. The trade unionists are given a certain measure of protection under this legislation ; but whether that protection can he destroyed by clause 27 is a matter which, possibly, may need unravelling by the High Court. I suggest that the Minister obtain an opinion from the Crown Law authorities, in order to find out whether there is anything in the bill to conflict with paragraphs a, b, c and e of subclause 2. If the Government is to be advised by the military authorities, particularly that “ expert “ who reported that no difficulty would be experienced about transferring troops and war equipment at the Albury railway station, confusion will he worse confounded. In my opinion, the bill will give to the Broken Hill Proprietary Company Limited an opportunity to exploit the community, so that it will be able to establish the tinned-plate industry in this country free of cost to itself out of money extracted from the public. The bill is so designed that whilst under the present Administration, the wealthy sections of the community will be protected, there will be less money to be distributed among the poorer sections of the community. However, within eighteen months a Labour government will be in office, and it will have three years in which to place its own interpretation on this legislation. I hope that in committee the measure will be improved, with a view to securing that co-operation for which the Prime Minister appealed so strongly at a recent meeting in the Sydney Town Hall.
– Mr. President, Senators Foll, McBride, Collett and Uppill. The Government claims that this bill is an important one, yet I find arrayed against me only the four honorable senators whom I have addressed. The forces that face me are not unlike the remnants of the Light Brigade that returned after its glorious charge.
– There were fewer members of the Opposition present this morning.
– The bill was introduced not by the Opposition, hut by the Government, which regards it as important. The Opposition regards it as not only unimportant but also unnecessary. The powers which this bill seeks to confer already exist.
– The honorable senator’s colleagues have denied that that is so.
– The bill has been introduced in the interests of the big manufacturing interests, particularly the Broken Hill Proprietary Company Limited. It is strange that a minority government, with the largest Cabinet ever known in the history of the ‘Commonwealth, should introduce unnecessary bills in order to waste the time of the legislature.
To-day’s newspapers contain the disturbing news that the Treasurer (Mr. Menzies) is floating a loan of £6,000,000 in London in order to finance the Government’s, defence programme. Some time ago when a bill to authorize the expenditure of about £63,000,000 for defence purposes was. before the Parliament, the Government denied that it intended to go on the London market. Even when it was pointed out that power to do so was contained in the bill, the Ministers declared that they would not take advan tage of such a provision. Now the Government has done what we then predicted it would do. It has again applied to the English loan market; we can expect a repetition of borrowing such as Australia experienced between 1925 and 1929.
In borrowing money abroad, the Government is laying the foundation of another serious depression. The fact that the Government has deemed it necessary to approach the London market is an admission that it is no longer able to appeal successfully to the people of Australia for financial support to carry out its programme. The Government is again embarking on a policy which brought Australia almost to disaster. Only the strong action of the Scullin Government saved us. This approach to the London market is likely to be the first of many similar transactions.
– Will the Government get the money?
– I have no doubt that some financiers will be willing to underwrite the loan. They wish to put Australia in pawn’ once again. Our battle is hard enough when things are going our way; but when we go overseas to borrow more’ money, we thereby lay the foundations of another serious depression. Unfortunately, not many supporters of the Government have expressed their views regarding this bill. I should like to hear more of them do so. We certainly had the advantage of a somewhat lengthy address by the Minister for the Interior (Senator Foll) in which he undoubtedly covered a good deal of ground.
Members of the Opposition have revealed a number of defects in the bill and -some other Minister should have answered our strong criticisms. The most junior Minister in age and service seems to occupy his time with idle interjections. It is not becoming a budding Prime Minister to interrupt others as the honorable senator does. The Opposition appreciates the constructive criticism of Senator James McLachlan, who knows something of the Government’s proposals; but his colleagues prefer to remain silent, because they have not the intelligence to debate it. We agree with
Senator James McLachlan that the manufacturer of munitions must be controlled, and had effective provision been made in that respect our opposition to the measure would not be so pronounced. If we agreed to a profit of even 4 per cent.., the rate would ultimately be ^increased, and before long a profit of 20 per cent, would be allowed, as happened in Great Britain. The whole of the Australian people would be behind this Government if it prevented manufacturers from making any profit on munitions. The establishment of annexes will provide an excellent opportunity for unscrupulous manufacturers, of which, . unfortunately, there are many, to make excessive profits, and the conditions under which annexes are to be provided are such that their ownership . will eventually have to be decided in the courts.
– The courts will give a fair deal.
– Legislation should be so framed that litigation will be unnecessary. Senator James McLachlan also mentioned the necessity to provide at least a twelve months’’ supply of fuel oil. The Labour party has always urged the Government to undertake the production of oil from shale or from coal, particularly as we have extensive coalfields and shale deposits from, which ample supplies of the raw material can be obtained. Twelve months ago we said that immediate steps should be taken to provide for the storage of adequate supplies of oil., but nothing has been done. Surely, we do not have to pass a bill like this to provide for the storage of oil!
– The honorable senator is referring to an amendment moved by a member of the Labour party. “Why condemn it?
– I am not condemning it. The Labour party has always advocated the production of fuel oil from the shale deposit at Newnes which has been handed over to a private company.
– It was never owned by the Commonwealth.
– It was available for developmentby this Government. I am aware that the Government of New South Wales controlled the
Newnes. deposit, but the Commonwealth Government and the State Government in collaboration, disposed of it to a private concern. This Government gave £500,000 of public money to & gentleman who is now endeavouring to develop the deposit. Will the-. Assistant Minister deny that over £500,000 has been made available ?
– On loan.
– Does the Government ever expect to get it back?
– It has ample security.
– I suppose that work will be carried on for some time and then this gentleman will say that the money has gone. He has been a good friend of the Government.
– Does the honorable senator not think that he is doing good work?
– I . believe that he has considerable business ability, particularly as he has been able to use this Government as he has.
– Does the honorable senator not think that the way in which he has built up the Davis Gelatine Company is a credit to him?
– I do. He has built up an industry the equal of which cannot be found elsewhere. 1 must, however, give him credit for taking Cockatoo Dockyard and the Newnes shale deposits from the control of- this Government. 1 do not question his capacity, but I condemn the Government for allowing him to do what he has.
– The Government, in obtaining the service of such men to establish an essential industry, has done a lot for Australia.
– That may be so; but there is no reason why the Government should dispose of valuable assets.
During the debate, the Assistant Minister (SenatorMcBride) asked Senator Keane to give the unemployment figures when the Scullin Government was in power. Despite the confidence which the people were alleged to have in the Lyons Government, twelve months after that Government assumed office the unemployment figures were higher than they had ever been. ‘! ‘> *
– Only in New South ; Wales.
– They were the highest on record forthe whole Commonwealth, and I am prepared to table authoritative figures for the honorable senator’s information.
– What are the figures now?
– They are steadily growing worse in all States except Queensland, where a Labour Government is in power. If reliable unemployment figures were made available we would be staggered to find how many men are unemployed! to-day, particularly in New South Wales. Next week, the Premier of New South Wales, in company with Mr. Spooner, will attend a meeting of the Loan Council in Canberra, when he will ask for £17,000,000 for essential works in that State. Surely honorable senators opposite do not deny that the unemployment figures in New South Wales are higher than they were last year.
– They are not as high as they were in 1931 or 1932’.
– The drift in unemployment is due to the incapacity of this Government. When I first enered this chamber in July and several new . honorable senators on this side of the chamber made a strong appeal to the Government -to relieve unemployment. Senator Dein said: “ Why do you not go to New South Wales and see what we have done? We have a youth employment scheme and also an apprenticeship scheme “. Does Senator Dein realize that unemployment in that State is rapidly growing worse ? We are informed that: over £70,000,000 is being expended on. “defence, but the number of men employed on defence works in New South Wales could be counted on the fingers of one hand.
– That is nonsense! One of the honorable senator’s colleagues said that 400 additional men had been employed in that State as the result of defence expenditure.
-At Mort’s Dock and Cockatoo Dockyard, where one would “expect the Commonwealth, defence activities to he reflected, men are being sacked. At the same time, the New
Zealand Government is obtaining the services of our best artisans. Most of them are under 21 years of age. A man was once said to be too old to work at 45, but now even youths of eighteen are dismissed. Boys of thirteen are getting permits to leave school. Unfortunately, some boys are compelled to leave school because their home conditions are such that every shilling counts. Almost daily youths of seventeen tell mo that they have been sacked and that their places are being taken by boys of fourteen or fifteen.
– I do not deny, that such cases exist, but they are . rare.
– The practice is general. Four months ago, an American friend asked me if I knew why our manufacturers are making such huge profits. I asked him what reason he had to offer, and he mentioned the exploitation of child labour. Child labour is. not exploited in the United States of America because of the statutory school leaving age. In Australia the school leaving age is fixed at fourteen years, but a child obtaining a permit may leave school at* the age of thirteen years. In the United States of America the permit to leave school is not granted to children under sixteen years of age. I mentioned figures in regard to the Scullin Government’s administration, because I believe that when the history of this country is written, the name of Mr. Scullin will be prominently mentioned. The good that Mr. Scullin did while in office is beyond question. Senator McBride asked what the Scullin Government did for thedefence of this country. Presumably the honorable senator was referring to the fact that it was responsible for the discontinuance of the compulsory military training system. I was one of those required by law to undergo a period of compulsory military training. What I learned to fit me to defend my country was negligible. Like the general in the song, our officers marched us up a hill and marched us down again. During the whole period of my training I was given an opportunity to aim a rifle at a target on only one occasion, and that at a range of only fifteen yards. There is no doubt that the Scullin Government was justified in abolishing the compulsory military training system, which was admitted by every one to be a farce.
– The Government did not have the money to carry on the system if it had wished to do so.
– Even if the Government had had the money, the system was a failure and was properly abandoned. It had been- kept going merely to keep a few brass hats in cushy jobs.
In his second-reading speech on this bill the Minister endeavoured to make out a case for the establishment of the new Department of Supply and Development. He pointed out that the extra work brought about as the result of the implementation of the Government’s defence policy made its establishment necessary. He referred to the fact that it was found impossible for one Minister to control the whole of the defence activities of the Commonwealth. That may be so; but is that any justification for the division of the work between three Ministers and one Assistant Minister? Surely the splitting up of this work »in.to four sections will present great difficulties in the future. In any case I cannot see why the Government could not divide the extra work between these extra Ministers without having to provide for the establishment of a new, and possibly expensive, department. The Minister, in introducing this bill, said that to supply is to plan. In my opinion, this Government is notorious for its failure to plan anything. It has been said that these defence annexes are similar to shadow factories established in Great Britain. The English factories may or may not be an outstanding success. Lord Nuffield, who is, perhaps, the most eminent manufacturer in Great Britain to-day, absolutely refused to associate himself with the establishment of shadow factories, with the result that he fell out with the Government of the day; but after a few months he was approached by the Government to commence the manufacture of aeroplanes on his own terms. It appears, therefore, that in England there was some doubt as to the efficiency of these shadow factories. The Minister has told us that these annexes are to.be built near big works utilizing precision tools. One of them is to be constructed at Pyrmont, next to the works of the Colonial Sugar Refining Company Limited. In order to provide the necessary ground space for this new building, half a dozen houses have been demolished. As I read this portion of the speech of the Minister I wondered what kind of precision tools would be utilized by the Colonial Sugar Refining Company Limited which could be of assistance in the manufacture of munitions. We all know that the workmen at Pyrmont are engaged in the treatment of sugar.
Great play is made of the fact that we are to secure our supplies of raw material from the Broken Hill Proprietary Company Limited at an appreciably lower price than that at which they could be imported. We all know that the Broken Hill Proprietary Company Limited is able to outsell its competitors, and why. As a matter of fact, the New Zealand Government had to bring down special legislation to prevent the Broken Hill Proprietary Company Limited from dumping steel into that dominion at a price which prevented British manufacturers from sharing in the market. It is said that the Government is to assess the profits of the annexes on the “ cost plus “ basis. Under this plan the manufacturer is to be paid the actual cost of material and labour, and so much for overhead. How is the Advisory Committee to determine accurately costs of production when men may be transferred between the annexes and the main factory practically at will? What check can possibly be imposed on the cost of raw materials and labour while this is possible? If the Government expects its expert advisers to impose a satisfactory check in these circumstances, it is asking them to achieve the impossible. It will be absolutely impracticable to check the profits made in the annexes operated in conjunction with existing factories.
During his second-reading speech Senator Foll said -
On bell alf of the Government, I take this opportunity to acknowledge the generous manner in which men of business and science, although already burdened with responsibility, have offered their services as advisors and consultants generally in an honorary capacity.
It will be noticed that he used the qualifying word “ generally “. I should have thought it inevitable that they would be employed in an honorary capacity. However, the Minister qualified his statement, as so many Ministerial statements are qualified, by the use of the words “ generally in an honorary capacity “. I have no doubt that if these gentlemen were offered a sitting fee of, say, five guineas a day, most of them, particularly Mr. Essington Lewis, Sir Colin Fraser and Sir Alexander Stewart, would be insulted. They would all say that they wish to give their services free of charge.
– The honorable senator must remember that others less fortunate than they might be appointed to the panel at a later date.
– Not while this Government remains in office.
– Possibly at some future time a representative of the Trades Hall Council will be appointed to the panel.
– -I should like to see one appointed now, not later on.
– The present members of the panel have not been appointed for a definite period. With a change of government, a new panel may be appointed.
– I have no doubt- that the Government will find means of overcoming that. Already it can be seen that it is handing over to the Broken Hill Proprietary Company Limited a good deal of the £63,000,000 to be- expended on defence. That company is being given a large share of the manufacture of shell cases which might well be done by the munitions establishment at Maribyrnong.
Part 3 of the bill refers to aircraft assembly. Of the two pages of the bill devoted ‘’ to aircraft assembly, one and three-quarter pages are devoted to the duties of the general manager. This bill gives the Government the right to establish factories for the manufacture or assembly of such aircraft as are, in the opinion of the Governor-General, necessary in connexion with the defence of Australia.
– A factory has been established.
– At Fisherman’s Bend.
– That is ignorance. The establishment at Fisherman’s Bend is controlled by three of the greatest monopolies in Australia - the Electrolytic Company, General MotorsHoldens Limited and the Broken- Hill Proprietary Limited. Holdens makes over £1,000,000 profit per year. The Broken Hill Proprietary Company Limited last year showed a profit of £1,300,000 after allowing £800,000 for depreciation.
– It did not pay dividends for many years.
– When the company does pay dividends it looks after the shareholders very well. I am not complaining of that, but I am complaining of the Government. Three of the five members of the Advisory Panel on Industrial Organization will be connected with the Broken Hill Proprietary Company Limited.
– That suspicious mind.
– The honorable senator knew as little about the bill as I did until the Minister for the Interior (Senator Foll) submitted it to this chamber. The Government may have shown some consideration .to Senator Foll and consulted him, because he would have to read the statement that it provided, but the rank and file of the party received no information beforehand.
Part III. of the bill is absolute “ padding “ and is of no value. The measure refers to an Aircraft Trust, that is to be set up, but the Minister has not explained that proposal. Will the trust experience the same fate as the fund established for “the payment of a bounty on motor car engines manufactured in Australia? For this purpose a special duty was imposed on imported chassis, but nothing more has been done. .When we look through the bill and the speech delivered by the. Minister we find that the idea of the Aircraft Trust has not been developed. I believe that nothing will be done to manufacture aircraft. I do not know .whether the establishment at Fisherman’s Bend will be able to meet Australia’s needs, but I hope that it will Part III. of the bill can be disregarded, because for years the Government has been against the proposals contained therein. The Government gave the Cockatoo Island Dockyard to the gentleman who took over the Newnes undertaking.
– He pays £40,000 a year for it. I was present in the House of Representatives when the agreement went through.
– I bet that the honorable senator gave it a push.
– I repeat that we can disregard Part III. of the bill. The question of persons employed in the annexes will be dealt with by another senator. “Employees of private manufacturing bodies will work as servants of the Government, but clause 10 sub-clause 2 states -
Persons employed in pursuance of this section shall not be subject to the Commonwealth Public Service Act 1922-1937, but shall be engaged for such periods and shall be subject to such conditions as are prescribed.
Many persons will work for the Government under different controls and different awards. Although these employees willbe in the government service they will not have the advantage of the Commonwealth Public Service Act, and that suggests that trouble will occur later.
– They will be only temporary employees.
– We have prepared an amendment to that sub-clause.
– I am glad to hear it. It does not seem right that such a set of circumstances should be allowed to continue. Clause 5, sub-clause 1 provides that among the matters to be administered by the department shall be -
I do not know whether those lines have been included in the bill as a sop to the Tasmanians, South Australians and Western Australians, but the Government has admitted that it has no plans for the decentralization of secondary industries. This is the kind of provision that impels members of the Opposition to talk at length. If the padding were omitted honorable senators would be able to see the Government’s real wishes. The policy of erecting annexes near the big manufacturing concerns, and’ neglecting the railways, means that the Government is only centralizing these activities, rather than decentralizing them. This is obvious, but why does the Government state in the bill that it aims at decentralization? That is not true.
– That provision was an amendment inserted in the bill by the Labour party in the House of Representatives. The honorable senator should consult his colleagues before he criticizes their amendments.
– I am glad that the honorable senator has mentioned that.
– The honorable senator said it should not be in the bill.
– I did not. I said that the Government has no intention of carrying out that provision. That is the point I made.
– Why did the honorable senator’s colleagues insert the amendment in the bill?
– I believe that the Government does not favour decentralization at all, and I was surprised when I read the provision in the bill. The amendments seem to be more extensive than the original bill. It is difficult to know which provisions were in the original bill and which are amendments, hut the measure will be riddled still more. As I pointed out to Senator James McLachlan, the main objection to the bill is that it gives opportunities to private enterprise to make profits out of the defence preparations. If the chance for’ making private profits were done away with, one ‘of the great incentives to. private enterprise to interest itself in this matter would be removed.
I shall deal with the oil position. Of the raw materials required to conduct a war the most important single item is oil. There is no doubt about that, and it was proved during the Abyssinian trouble. Amid a fanfare of trumpets the League of Nations decided to impose sanctions on certain goods being exported to Italy, but it would not apply a. sanction to oil. If it had done so, Italy would have had no alternative but to go to war with Great Britain. “We know that at that period the nations were very close to war. Lloyds were betting six to four against war during the troublous days in the Mediterranean. Those are short odds. When the newspapers were crying out that war was imminent with Germany, Lloyds said it was 32 to 1 against. The League of Nations and England would not impose sanctions on the supply of oil to Italy, but they devoted much publicity to the fact that they had tried to carry out the sanctions. The importance of oil in modern warfare is so great that the League of Nations was not prepared to impose sanctions against supplies destined for Italy.
Australia is more dependent on the supply of oil than is any other nation in the world. Its capital cities are 500 miles or 600 miles apart, .and the distance between our eastern and western coasts is about 2,400 miles. In covering those distances we find that oil is of paramount importance. Every arm of .the service depends to a greater or less degree upon oil fuel. We now have 132 first-line aeroplanes for defence purposes. These machines would be of no value whatever without an adequatesupply of oil fuel, lt is essential to build up an adequate reserve of fuel, because if our trade routes were interfered with in time of war all arms of the service would be rendered useless. The special committee that was appointed by the Government to investigate fuel resources recommended that £12,000,000 should be made available to provide for twelve months’ reserve of fuel. Senator James McLachlan dealt with that matter last evening. Australia’s normal requirement of petrol is about 300,000,000 gallons- a year. It would be no exaggeration to say that, in time of war, our requirements would be at least trebled. If this Department of Supply and Development is to function properly, and do all that is expected of it, its principal objective should be to guarantee supplies of oil fuel sufficient to keep our mobile forces on the. move.
– Not only our land and air forces, but also our ships and cruisers.
– That is so. I impress upon the Government the necessity for making provision for at least twelve months’ supply against a time of emergency.
Efforts have been made during recent years to discover flow oil in Australia; but I am convinced that a great deal more must be done in Australia and in New Guinea, where, I believe, flow oil will one day be discovered. I am not quite satisfied with the outcome of boring at Roma, in Queensland. Flow oil was struck there some time ago. Mr. Archie Cameron, a member of the House of Representatives, in an interjection during a debate in that chamber recently, mentioned that the boring operations at Roma had ceased, and that those in control of the operations would not allow any one else to bore in the vicinity. These things point to the desirability of government action, apart from the subsidizing of private enterprise, in the search for flow oil. The Government must control all boring operations. In this matter the people would be solidly behind the Ministry. The Government should also take steps, in each State where coal exists, to establish plants for the extraction of oil from coal. The latest processes adopted in Great Britain and in Europe are working satisfactorily. Phoenix Oil Extractions Proprietary Limited, of Sydney, claims- to be able to produce oil from coal at 5d. a gallon with coal at 14s. a ton. These are facts which,’ I think, should weigh with the Government, and I hope that the suggestions I have made will have further consideration. All honorable senators appreciate the importance of an adequate supply of oil in a national emergency, in order to keep open our trade routes. As there is no certainty that, in the next war, our overseas trade will not be seriously hampered, it is of supreme importance that we should ensure an adequate supply of oil in Australia.
I turn, now, to the point stressed by Senator Arthur, namely, the appointment of an Advisory Panel on Industrial Organization. . Government supporters, I know, do not agree with honorable sena tors on this side regarding that matter; but the more closely I examine the personnel of the committee the more convinced am I that, in a time of emergency, Australia will be open to exploitation in connexion with its re-armament policy. Five gentlemen have been appointed as an advisory panel. I have no desire at all to reflect on their ability or character. On the contrary I would say that in Mr. Essington Lewis, the Government has secured the services of the ablest man in his line in Australia, and I believe the same could be said of each of the other gentlemen who will constitute this panel. In their line of business, all are experts, and some of them have extraordinary ability. Nevertheless I feel that it is necessary to point to their association with the Broken Hill Proprietary Company Limited and associated companies.
– They know their job.
– That is true; but I am afraid that, in appointing these gentlemen as an Advisory Panel on Industrial Organization, the Government will place power in the hands of the very men with whom it will do business in connexion with its re-armament policy.
– It will be an advisory panel, and will not control anything.
– It will control the policy of the Government, otherwise the Minister will have to offer an adequate explanation of the statement made by Senator Arthur this evening that when he was in Newcastle recently he saw a huge pile of shell cases which had been manufactured at Newcastle. It will bo hard to convince honorable senators that those shell cases could not have been manufactured at the Maribyrnong munitions factory, to which they were conveyed by ships owned by the Broken Hill Proprietary Company Limited which earned full freights on the shipment. [Extension of time granted.]
The Government will have to be exceedingly careful in order to prevent private enterprise from making undue profits from government contracts. I feel that there is something wrong with the manufacture of those shell cases at Newcastle. I do not forget that the Broken Hill Proprietary
Company Limited is in an extraordinarily strong position to capitalize any conflict that might occur in Australia or overseas. The company . is in a position’ to _ reap immense profits from expenditure by the Government on war measures. And I say that I am not over-imbued with lofty feelings about the sanctity of big business. The record of big business shows that, notwithstanding assurances to the contrary from Government supporters, either by way of interjection or in speeches, Australian manufacturers will always in a time of emergency attempt to make a profit at the expense of the. Australian people. I wish I could agree with honorable senators opposite, but I cannot. Business morals - I hope that I am not hurting any honorable senator - at the present time are at a lower level than ever they have been. ‘The extraordinary revelations ‘ in connexion with tenders for a certain contract recently are still fresh in our minds. But since that matter is the subject of a judicial inquiry I shall not pursue it further. I need only refer honorable senators to events that occurred in connexion with the September crisis in Great Britain. Newspaper reports of happenings in Britain showed that many glaring instances of profiteering took place. The prices of materials . required for air raid shelters rose from 500 to 700 per cent. overnight.
– The British Parliament has passed legislation to deal with those matters.
– Apparently the British Government learned its lesson and took what action it thought necessary to prevent future exploitation of the people. I hope that I am. not taking my case too far when I suggest that, in the event of a crisis rendering necessary the adoption by the Government of war measures, the one firm above all others in Australia that will be likely to make immense profits from the capitalization of war fears is the Broken Hill Proprietary Company Limited, which is so strongly represented on this advisory panel. Quite recently this powerful company exported a considerable shipment of steel plates to Great Britain for use in connexion with the British re-armament programme. ‘
– Does the honorable e.na tor object to that?
– No ; hut 1 atn afraid that the Minister is missing my point. What 1 object to is the appointment by the Government to this advisory panel of three men who are so closely associated with the Broken Hill Proprietary Company Limited, which, as 1 have shown, is now exporting rearmament material to Great .Britain. I am not objecting to this exportation of Australian material. On the contrary, [ consider it a wonderful achievement for an Australian company; but I contend that when these establishments commence the manufacture of munitions of whatever form the understanding is that they should not be allowed to supply any other customer but the Government of Australia.
Sena tor McBride. - With munitions.
– That company is in a position to make enormous profits. It controls the making of steel and, with its subsidiaries, other aspects of the re-armament programme also. By its association with Electrolytic Zinc and General Motors-Holdens Limited, it seeks to control the manufacture of aircraft. lt is in a position to capitalize Australia’s troubles to its own advantage. The last war provided ample evidence of what can happen. It is not sufficient to attempt to limit the profit to 4 per cent, or 6 per cent.; we must remove altogether the manufacture of armaments from private enterprise or we shall be at the mercy of the manufacturers.
– The very fact that 4 per cent, is mentioned shows that the Government is an accessory before the fact.
– Recently, 1 asked a question about the supply of tarpaulins for the militia. I knew that the New South Wales Railways department had its own factory for making tarpaulins, and that its employees feared dismissal because of a shortage of work. I desired to keep them employed, and hoped that orders for any tarpaulins required by the Commonwealth Government would be given to that establishment. At that time a member of the Tender Board informed me that the department had sufficient tarpaulins for its requirements. He explained that no new material was re quired, but that the existing equipment would be used more often than formerly. I was satisfied with his explanation, and, therefore, I was greatly astonished when in reply to my question, the Minister informed me that a considerable amount of money had been expended in purchasing tarpaulins.
– ‘Did the railways tarpaulin factory submit a tender?
– I do not know. The gentleman who spoke to me was a prominent railway official. He said that he asked the member of the Tender Board to whom I have referred to let him know if tarpaulins were required, because he would like the opportunity to make them.
– Tenders for all these requirements are called by public advertisement.
– I do not know whether a tender was submitted by the factory to which I have referred, but I am of the opinion that as much of this work as possible should be undertaken in government factories. It would be only reasonable to give to them a preference of, say, 5 per cent, or 10 per cent.
– Would the honorable senator go so far as 100 per cent, preference ?
– No. The only way to prevent undue profits is for the Government to establish its own manufacturing agencies. That was the conclusion to which Mr. Lloyd George came when he realized the profits that the armament ring in Britain was making. Honorable senators know that in the early months of the Great War, private enterprise charged exorbitant prices for essential war materials. Eventually,, the British Government set up factories of its own, and in that way prices were brought down. Some of these concerns have enormous sums of money at their disposal. If tlie Government relies on checks by accountants, it is doomed to disappointment. The only effective check is the competition of a governmentfactory.
– Does not the department know the cost of manufacturing shell cases?
– I do not know how much the department knows. Perhaps the honorable senator will be able . to explain the position.
– The department has been making shell cases for some time.
– There are many other things besides shells . and shell cases. I should be grateful to the honorable senator if he would give us the facts about these things. I know that following the setting up ‘of its own factories, the British Government reduced the cost of Lewis guns from about £160 to £35. The Senate has already been reminded of the huge profits made during the September crisis by the suppliers of sandbags. All these things led up to what the Prime Minister (Mr. Menzies) said in the Sydney Town Hall last week. By inference, he admitted that profiteering was taking place. He said on that occasion -
We also have the negative function to see that in these years of crisis, no people will grow1 rich in the defence of Australia.
– Hence this bill.
– Hence, rather, the three representatives of the Broken Hill Proprietary Company Limited on the Advisory Panel. I cannot get over that.
– The honorable senator should elevate his mind.
-Evidently, the Prime Minister realizes that profiteering’ has taken place, and probably will continue to take place.
– Again I say, “ Hence thisbill “.
– The Government and its supporters have already admitted that it intends to allow the making of profit on work undertaken in the annexes.
– Profit is not necessarily profiteering.
– I agree that the labourer is worthy of his hire. I do not object to profit, if it be reasonable. But it has been proved that there is no way to limit profits once these big business concerns get into the business of making armaments.
– Would the honorable senator say that 4 per cent, profit is exorbitant?
– No. In fact, I do not think that 10 per cent, would be exorbitant if it stopped there; but the trouble is that there will be no stopping it once this business starts.
– Evidently the honorable senator believes that nothing should be started now because it was not started years ago.
– I have advocated the. setting up of government factories for the manufacture of munitions. At the present time some vessels of. about 1,400 tons each are being constructed for the Government at Cockatoo Island Dockyard. The Government is giving to private enterprise work which, it would not give to its own dockyard before the yard was handed over to private enterprise. That yard could have been kept going with government work. Now, private enterprise will reap the benefit of government contracts.
– We. are getting cheaper ships.
– But not. cheaper than the Government itself could make them. The ships may be cheaper than vessels obtained abroad.
– How many men arc employed at Cockatoo Dockyard now?
– I think the number is about 1,600. ‘
– Not long ago, the number did not exceed 400.
– That was because the Government would not give work to the yard-. Both at Cockatoo Island Dockyard and at Mort’s Dock, difficulty is being experienced in maintaining the staffs. I have no doubt that the Government would be glad to have hack some of- the concerns that it practically gave’ away. For instance, it would find its own steamers an advantage.
– The country lost £17,000,000 on that line of steamers.
– The honorable senator will not deny that that line of steamers was practically given away. Lord Kylsant made an impression onthe government of the day. It had no fear that he would not pay for the ships. Later, he was. convicted of fraud, and sent to gaol. The woollen mills . also were given a.way. To-day the Government would be glad to have them back, so that members of the militia could go into camp properly clothed, instead of dressed in all sorts of garments.
The PRESIDENT (Senator the Hon. J. B. Hayes). - I must insist on order being maintained. Interjections are too frequent. I do not wish to take drastic action, but order must be maintained.
– Senator Dein is largely responsible for the disorder in the chamber this evening. If the Government controlled the woollen mills, the work of equipping militia trainees would be much easier.
– The Government considers it better to distribute the work amongst woollen mills throughout the Commonwealth.
– There is an advantage in that respect, but as many members of the militia forces are still without uniforms they cannot be expected to retain their interest. They do not like attending drills in civilian clothes. If the Government controlled the woollen mills, uniforms would have been provided earlier because there would have been no necessity to make contact with outside manufacturers.
– One mill could not have coped with the situation.
– Action was taken too late. The Government had to make contact with various contractors, provide details of what was required, and decide prices. If it had its own organization, the work ‘could have been put in hand within a few hours.
I have already referred to the difficulties which the Government is likely to encounter in connexion with the annexes to be erected. At the end of ten years it will be faced with legal difficulties because the annexes being erected on private property will be governed by leases between the parties.
– The disposal of the buildings is covered by the bill.
– That is so, but we are legislating ten years ahead and it is difficult to legislate for even twelve months hence. The Government is laying the foundation of a good deal of trouble which will eventually have to be settled in the High Court.
– The Government is leasing, the land at £1 a year with the right of renewal.
– That is not quite correct. Senator Ashley asked the Minister representing the Minister for Defence certain questions concerning annexes, and the answer he received was that in some instances arrangements have not yet been completed.
– They will be completed before annexes are built.
– There is still some doubt. If I lease a dwelling and erect a fitting, such as a mantelpiece, I cannot remove it at the termination of the lease.
– That depends upon the terms of the lease.
– A fixture once erected becomes a portion of the structure.
– That is provided for.
– The Government is leasing the land.
– Who owns the buildings?
– The Government.
– Has the Government the right to demolish them ?
– Yes, under the terms of the lease.
– That will cause trouble.
– It is all provided for in the lease.
– Buildings erected on leased land revert to the owner on the termination of the lease.
– That is not so in this case..
– The lease definitely provides that the land only is leased and that the Government remains in complete possession of the buildings. At the end of ten years the lease can be renewed or the building removed and sold to the owner of an adjoining property.
– The position does not appear to be sufficiently clear. We are not trying to harass the Government, but there are difficulties in the way.
– The honorable senator has exhausted his time.
Debate (on motion by Senator Dein) adjourned.-
Purchase of German Machinery by Melbourne Technical College - Commonwealth Bank - Conduct of Business : Rights of Senate - Sydney General Post Office.
Motion (by Senator McLeay) proposed -
That the Senate do now adjourn.
– During my absence from the chamber this morning Senator Leckie, in referring to me as a myopic person, said that I, with others, had been responsible for the purchase of a machine made in Germany for the Melbourne Technical College. That statement is not true. My authority is the principal of the college, Mr. Frank Ellis. As a member of the council, I attended the last meeting and the sale was never mentioned, and neither my colleagues nor I, representing the Trades Hall Council, had anything to do with the purchase of the machine mentioned. I regret that Senator Leckie should have made an inaccurate statement, and I feel it my duty to vindicate myself. The position is that a machine made in Germany was purchased in Australia. The purchase was a result of a conference between the members of the staff of the Melbourne Technical College and representatives of the Melbourne Chamber of Commerce. The council, of which I am a member, was not consulted and had nothing whatever to do with the sale. In future, when Senator Leckie makes statements concerning me or my colleagues, he should be more careful.
On the 31st May, I asked the Minister representing the Treasurer the following question : -
From what, fund or source, or bv what method, was money obtained by the Commonwealth Bank and subscribed by it to the last three internal loans including the conversion loan.
The answer I received on the 7th June read -
The bank operates as a savings bank, a trading bank, and a central bank, and the subscriptions were made from the resources resulting from these different functions.
I regard that as an impertinent and evasive answer. If honorable senators are expected to discuss subjects intelligently they have a right t«> receive intelli gent answers. This evasive answer has been made with the object of trying to mislead honorable senators or of making it more difficult for them to understand the position of the Commonwealth Bank. I should like to know what the board of that bank has to hide? I believe thai the Commonwealth Bank is depreciating currency by printing and circulating notes, and is afraid to acknowledge the fact. The answer I received convinces me that the bank desires to withhold knowledge from the public. The facts are that depreciation of the currency is increasing the cost of living and the poorest people are suffering most. Yesterday the Leader of the Opposition directed attention to a letter written by a Mr. Lewis, who stated that the old-age pensioners are not now in a position to provide for themselves owing to the steady increase of the cost of living. He said that some were forced to sleep in the open, because they did not have sufficient to pay the rent of a room, and because the price of meals had increased. That is one effect of depreciating the currency. I record my protest concerning the unsatisfactory nature of the answer J received. I also protest against the policy being adopted by the Commonwealth Bank in that direction, and direct the attention of honorable senators to the fact that this Government for all practical purposes is being dominated by that body. Instead of the board being a subordinate body under the direction of the Government, the position is reversed. The effect is, as I have said, that the cost of living is going up at the expense of the poorer sections of the people. Those who have no legal right to appear before wages boards or the Arbitration Court to ask for increases - the invalid and oldage pensioners, most of whom have worked all their lives and individually and collectively have helped in building up the wealth pf this country - are being penalized. The Government is silent on the matter; it will not make any admission. That, in my opinion, is a cowardly attitude for the Government to take up. If it believes that depreciation of currency, or inflation df currency, is necessary, let it say so; let it be prepared to stand or fall on the merits of the policy it has adopted. Attempts to evade the issue by submitting answers of this kind are despicable; any government that adopts such practices is unworthy of the name.
The PRESIDENT (Senator the Hon. J. B. Hayes). - In the early part of his remarks the honorable senator referred to a statement made by Senator Leckie as being not true. He must not use that word, and I ask him to withdraw it.
– I withdraw it and substitute the word “incorrect”.
– I join with Senator Cameron in protesting against the giving of incorrect answers to questions asked in this chamber. Recently I asked a question of the Minister for the Interior (Senator Foll) concerning the non-payment of wages to carpenters employed by a Sydney firm. The reply was to the effect that the union had been approached and was then searching for the sub-contractor, who had defaulted in respect of wages due to these men. I then communicated with the secretary of the Carpenters Union in regard to the matter, and received the following reply:-
A perusal of your statement in the House regarding the failure of a sub-contractor to pay a number of carpenters their wages who were employed in the construction of a building near Victoria Barracks, Sydney, contains a reference that the Minister for the Interior (Senator Foll) referred this matter to the Carpenters Union. I would like to point out that whatever may have been the Minister’s intention, he certainly did not refer the matter to my union. The only report I had of the failure of this sub-contractor Banbury to pay these carpenters their wages was your telephone message to me. Up to the present, the -union has not received any advice in any way from the Department of the Interior in connexion with this matter.
That is a very serious matter. When unsatisfactory answers are given to questions of such importance as this, it is time that some action was taken by the Government to- see that stricter supervision is exercised over the answers submitted. That is not the first occasion on which I have received incorrect answers to questions. Last year I asked a question relating to the total profits earned by the Note Issue Department of the Commonwealth Bank. In 1932, the answer given to a similar question was that the profit amounted to £21,000,000; but in 1.938, when I asked the question, the profit, had dwindled to £15,000,000. I asked a further question as to the total paid-up capital of all of the trading banks of the Commonwealth. In 1932, the answer to a similar question was that the total paid-up capital amounted to £60,000,000 ; by 1938, when I asked the question, it had dwindled to £39,000,000. Later the then Treasurer (Mr. Casey) forwarded to me a letter in which he stated that in making up the figures the paid-up capital of certain foreign banks operating in this country had not been included. I found, however, that the total paid-up capital of those foreign banks is out of all proportion to the error contained in the answers to my questions. Up to date I have not received correct answers to either of these questions.
– Senator Cameron has complained of certain statements which I made and has characterized them as not true.
– They are absolutely untrue.
– In the first place, I did not apply to him the word “ myopic “. In the second place, I did not say that a request from the council of the Melbourne Technical College to the Chamber of Manufactures for the purchase of a German machine was made with his knowledge. I said that the college council, of which he and other representatives of the Trades and Labour Council are members, requested the Chamber of Manufactures to buy that machine; the chamber agreed, and I, as treasurer, signed the cheque.
– The council made no request at all. The principal made the request without any knowledge of the council.
– The principal applied on behalf of the council. However, 1 accept the honorable senator’s statement that he knew nothing about this request. At the same time I cannot admit that what I said was incorrect. It was absolutely true, and J when the honorable senator, as a member of the council which had made such a request to the Chamber of Manufactures, criticized the Government for contemplating the purchase of German machinery. my sense of humour was tickled. I have no intention of saying anything derogatory of Senator Cameron; in fact I would not do so. I assure him that I did not say that he was myopic.
– The press represents that the honorable senator did say that.
– That is not correct.
– I direct the attention of the Senate to a deputation of Labour senators and members of the House of Representatives requesting that a wheat stabilization scheme should be adopted. I congratulate Labour senators upon their interest in this important subject, belated though it is. It is said that imitation is the sincerest form of flattery, and the fact that Labour senators are now advocating a plan, the greater part of which has been copied from the plan placed before the public last August by Senator Uppill and myself, cannot be regarded as anything else but flattery. On the 15th August last, Senator Uppill and I put forward a plan for the stabilization of the industry. On the 25th August it was placed before the Wheatgrowers’ Conference in Sydney, and on the following day before the Premiers Conference. Subsequently it was referred to the Commonwealth Government for consideration. In December, the Government introduced legislation to establish a homeconsumption price for wheat, and a few days later, after that legislation had been passed, I introduced a bill to this Senate to stabilize the wheat industry. The plan that Labour has now requested the Government to adopt is almost identical with that put forward by Senator Uppill and myself, except for two modifications. Both plans provided for the stabilization of the industry, the establishment of an equalization fund, contribution by farmers of 50 per cent, over the minimum price, and the stabilization of flour and bread prices. The variations that Labour has made from the proposal placed before the public by Senator Uppill and myself are as follows : -
Our proposal is permanent in character, whilst the Labour proposal is limited to a period of five years;
Our proposal provides for a minimum equalization price of 3s. 8d. at ports; the Labour party’s proposal provides for a minimum of 3s. 6d. at sidings;
Our proposal provides for individual debits and credits; the Labour party’s proposal provides for a pool. Under our scheme the farmers have the choice of either pooling or having individual accounts, as they prefer; under Labour’s proposal pooling is compulsory.
I am pleased that the differences have been narrowed down to such small limits. At the same time I maintain that the proposal that we have put forward has merits over the modification put forward by the Labour party. Under our proposal each farmer would be entitled to the full benefit of price, together with the benefit of the subsidy provided out of Commonwealth revenue. Under it the man who sells wisely would get the full benefit of his wise selling. Under Labour’s proposal, the man who sells wisely would, in part, have to make up for the losses of the man who sells unwisely, for the simple reason that when the price of wheat goes over the equalization price he would have to make contributions to make up the deficiencies of the fund caused in part by the bad selling by some farmers. Under our proposal every farmer would receive the benefit of his wise selling and be penalized for bad selling. I repeat that I am delighted to know that at last the Labour party has shown some interest in the wheat industry, and has put forward a plan which, though obviously copied from a plan already placed before the public can, in my opinion, be worked, although it will not be as advantageous to either the farmers or the community as the plan already before the Senate.
.- I desire to raise a question affecting procedure in this chamber. On two days last week the Senate was occupied in discussing notices of motion by the Leader of the Opposition (Senator Collings) relating to the proposed extensions to the General Post Office, Sydney. The Government managed to avoid a vote on the matter, but I make no comment on that; that is the Government’s job. On Friday we were told by the Leader of the Senate (Senator McLeay) that it would be wise to wait until a statement had been made by the Prime Minister (Mr. Menzies) in the Souse of Representatives. I resent the subordination of the Senate to the House of Representatives. The Leader of the Senate had every right to make a statement . on the subject not necessarily before the Prime Minister spoke. In the House of Representatives the Prime Minister announced the terms of the commission and mentioned the judge who had been appointed, but there has been no reference to the matter in this chamber, and I resent that, too. I can assure the Government that this party will see that the dignity aud rights of the Senate are preserved. We have already asked the Ministry to restore to this chamber some of the importance that it was intended to possess when it was designed under the Australian Constitution. We have also requested that bills be introduced in the Senate. This party has practically made the business that has been dealt with in this chamber. The Leader of the Senate would have been showing no more than ordinary courtesy had he made to the Senate a full statement regarding the royal commission, not necessarily earlier than it was made in the House of Representa-‘ lives. He must have been in possession of a copy of tho statement made by the Prime Minister. When an inquiry was decided on, that fact should have been communicated to this chamber, more especially as the matter was brought before the Senate because when a motion on the subject was submitted in the House of Representatives, the Government placed it at the bottom of the noticepaper. The view of the Opposition was not disputed to any extent by the Government. My main complaint is against the subordination of the dignity and importance of the Senate to the House of Representatives on practically every occasion. My last word is this : I suggest that when the forthcoming short recess is over, the notice-paper for the Senate should be furnished with some measures - of course, not money bills - that will warrant honorable, senators in displaying , a live interest in the activities of what is the senior branch of the Commonwealth Parliament.
– The points raised by honorable senators will be considered.
Question resolved in the affirmative.
The . following paper was presented : -
Post . and ‘ Telegraph Act - Regulations amended- Statutory Rules 1939, No. 44.
Senate adjourned st 11.49 p.m.
Cite as: Australia, Senate, Debates, 8 June 1939, viewed 22 October 2017, <http://historichansard.net/senate/1939/19390608_senate_15_160/>.