15th Parliament · 1st Session
The President (Senator the Hon J. B. Hayes) took the chair at3 p.m., and read prayers.
SALES TAX BILLS (Nos. 1 to 9) 1939.
– Can the Leader of the Senate inform me whether the Prime Minister has received an appeal from the Premier of Western Australia to delay the passage of the gold tax proposals through the Senate until next week, in order to permit the mining industry of that State to make direct representations to the Government in opposition to the incidence of the tax? If so, what decision has been reached in connexion with the request?
– I am not sure whether the Prime Minister has received such a request, but I have had advice that it is being made. The bill giving effect to the Government’s proposal was passed through all stages in the House of Representatives yesterday and I propose to go on with it in the Senate this afternoon.
– Has the Minister for Commerce any statement to make with reference to the prices for hides intended for export?
– The prices of hides are under consideration. If the honorable senator will place his question on the notice-paper, I may be able to give him a reply to-morrow.
– I ask the Minister representing the Minister for Defence whether he will arrange for the appointment of three shifts of blacksmiths in the defence factories at Maribyrnong?
SenatorFOLL. - I shall bring that matter under the notice of the Minister.
– In view of the anxiety amongst the cotton-growers of Queensland, can the Minister representing the Minister for Trade and Customs inform the Senate when it is proposed to consider their request for a renewal of the bounty on Australian-grown cotton?
SenatorFOLL. - The matter will be dealt with during the next few days.
asked the Minister representing the Postmaster-General, upon notice -
What progresshas been made with the erection of the new post office at Inglewood, Western Australia!
– The PostmasterGeneral has supplied the following answer : -
Unfortunately it is impossible in present circumstances to proceed with the erection of new post office at Inglewood.
asked the Minis ter representing the Treasurer, upon notice -
Ifsuch an appointment has been made,
– On a previous occasion I directed the attention of honorable senators to the rules governing the asking of questions. I again remind honorable senators that questions should not contain insinuations or inferences. This question relates to Professor Copland who has been appointed to his present position because the Government has a high regard for his outstanding ability. In the asking of questions some honorable senators are abusing their privileges, and I do not propose to answer the question asked by Senator Cameron unless the honorable senator will answer this question, “Is it correct that during the last war, because his speeches in connexion with the war aroused, the ire of returned soldiers in Western Australia, he was chased and had to shelter with the Chinese? “
Opposition Senators. - Order !
asked the Minister representing the Minister for Trade and Customs, upon notice -
– The Treasurer has supplied the following answers: - 1, 2 and 3. It is believed that an announcement was made by wholesale paper merchants and by one Australian mill of their intention to increase prices for paper. Since this announcement, paper has been included in the list of “ essential articles “ the prices of which are subject to control. The question of the necessity for any increase in prices ruling on the 31st August, 1939, is now being considered by the Commonwealth Prices Commissioner.
asked the Minister for Commerce, upon notice -
– The answers to the honorable senator’s questions are -
asked the Minister for Commerce, upon notice -
– The answers to the honorable senator’s questions are - 1 and 2. The Government of the United Kingdom will take canned peaches, apricots, pears and pineapples exported by the Conned Fruits Board which products find a place in the United Kingdom market in normal times. It is not possible at this stage to make any assumption as to the order of priority of access to, or the amount of, tonnage which will be available as between the various export products desired by the United Kingdom Government. Special inquiries are being made in respectof fresh fruit transport in anticipation of their seasonal export period, and the matter will be kept in view.
– by leave - I desire to state very definitely for myself and for every member of the Opposition - I wish to be as moderate as possible in my language - my absolute disgust at the action of the Leader of the Senate (Senator McLeay) in making such a cowardly attack upon a member of His Majesty’s Opposition in this chamber. The honorable senator concerning whom such a cruel comment was made was himself a soldier, which cannot be said concerning some of the younger men on the Government benches in this chamber and in the House ofRepresentatives. I do not propose to elaborate our opposition, but the Minister’s conduct was, I think, the most reprehensible that has ever occurred in this chamber. It was a cruel attack upon an honorable senator merely because he is a member of the Opposition. Such action would not be taken against an honorable senator opposite, whatever the nature of the question he asked. It appears that not only is the Leader of the Senate a schoolmaster who reads a homily as to how we should frame questions, but he is also becoming a censor of questions. I suggest that in order to maintain the dignity of this chamber the Minister should endeavour to restrain himself.
Motion (by Senator Foll) agreed to -
That leave be given to introduce a bill for an act to amend the Commonwealth Electoral Act 1918-1934.
Bill brought up, and read a first time.
Bill received from tbe House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motion by Senator Foll) read a first time.
– I move -
That the bill be now read a second time.
The object of the bill is to provide for a tax on gold delivered to the Commonwealth Bank of Australia or to an agent of that bank on and after the 15th September, 1939. The term “ gold “ shall not include gold imported into Australia from any place other than a territory under the authority of the Commonwealth, and shall not include gold coin or wrought gold unless and until the Treasurer otherwise directs, by notice published in the Gazette. The tax will be imposed, not only on gold produced in Australia and delivered to the Commonwealth Bank, but also on gold produced in the territories under the authority of the Commonwealth and delivered to the bank or its agents, in the territories or in Australia. Tax will be imposed on gold delivered to the bank or its agents at the rate of three-fourths of the amount by which the amount payable by the Commonwealth Bank exceeds the amount of £9 for each ounce of fine gold contained in the gold so delivered.
Since 1930, the gold-mining industry in Australia has received high prices for gold. In that year the price of fine gold was £4 8s. 9d. an ounce. This rose to £5 17s. 6d. an ounce in 1931, and £7 5s. 8d. in 1932. In 1938, the average price was £8 16s. an ounce, whilst the average price for the year ended the 30th June, 1939, was £91s. 2d. In August, 1939, the price had advanced to £9 8s. 7d.. and, at present, the price is £1011s. The sharp rise of the price of gold during the last few weeks has been due entirely to war conditions, which have brought about depreciation of sterling in terms of dollars. The Government considers that as the present high price of gold is due to war conditions, and the increased price is clearly unearned increment, the gold-mining industry should be called upon to contribute to the revenue to the extent of the proposed tax. This contribution, it is considered, can be made without jeopardizing the financial stability of the industry, or creating undue hardship, and the industry will be be in no worse position than it was a month ago. If the price of gold continues to increase, and it is possible that such will be the case, the gold-mining industry will still receive the benefit of 25 per cent. of such increase. The retention by the industry of 25 per cent. of the price in excess of £9 an ounce of fine gold will enable it to meet increased costs which may occur in consequence of the war.
For the information of houorable senators, the fact should be mentioned that Commonwealth income tax has not been imposed on income derived from gold-mining operations since 1924. This exemption from income tax applies, not only to income in the hands of companies, but also to dividends in the hands of shareholders. Furthermore, income derived from gold-mining has for some years been exempt from most forms of State taxation, except inWestern Australia and Tasmania.
The method of collecting the tax is simple and inexpensive. All gold must be delivered to the Commonwealth Bank, or its agents. When the quantity of fine gold has been determined, the bank will merely deduct the amount of tax imposed from the amount due to any person in respect of such gold delivered to the bank and will then pay the tax so deducted to the Commonwealth Government. Australia and the territories produce approximately 1,800,000 ounces of fine gold per annum. On this basis, and assuming that the price remains at £1011s. an ounce, the revenue will benefit to the extent of approximately £1,500,000 for the remainder of this year as the result of the tax. The actual amount of tax which will be collected will depend upon the price of gold.
I point out that unlike some taxes which still romain, despite assurances that they would be only temporary, it is definitely provided under this measure that this tax will automatically disappear when the price of gold falls below £9 an ounce.
– But the price may continue to rise.
– .In that case the tax will continue, and one-quarter of the amount in excess of £9 an ounce will continue to go on to the gold producer. I am merely emphasizing that as definite provision is being made under this measure for the cancellation of this tax when the price falls below £9 an ounce, no danger exists that it will, like many other so-called temporally taxes, continue indefinitely. This measure provides for the imposition of the tax; a second measure will provide for the collection of the tax. I do not suggest that both measures should be taken together, but 1 do not propose to make a secondreading speech on the second measure.
– The Minister has stated that this tax will not apply to wrought gold or coin until thu Treasurer (Mr. Menzies) gives such a direction by publication in the Gazette. It is just as well for honorable senators to remember that point. Under this measure the Treasurer will be given authority, when he sees fit. to tax wrought gold and coin. This tax is unfair. It will adversely affect quite a number of low-grade propositions throughout the Commonwealth, which would obviously have been developed had those in control of them been enabled to take full advantage of the increased price. lt would have been rauch fairer to tax the profits of well-established concerns. In that way- the Government could have secured an amount equal to that which it estimates this tax will yield. Since the vise of the price of gold in 1930, not only the Government of Western Australia, but also the governments of the other Slates have directed special attention to the greater development of known fields, and also the discovery of new fields. During the last nine years mining investors and prospectors have shown increased activity in gold production as the result nf the higher price. No doubt the Minister will argue that despite this tax the return to the producers is greater to-day than it has been for some considerable time. That is so. When the price of gold was only £8 a fine ounce, certain large mining propositions, and also smaller ones, were unable to pay operat ing costs and could not be worked; but, when the price increased to £9, £9 3s. 4d., £9 Ss. Tel., and now £10 lis. a fine ounce, more mines could be brought into operation. Therefore, the incidence of this tax will be unfair, as it will prevent the further prospecting of. the low grade and more difficult shows which could be so developed to-day thatthey could be worked later at reduced cost. Since the money to be obtained by means of this tax could have been procured by a tax on profits, I claim that the Government has not handled the matter, in the best interests of the nation, whether the proposal be considered from the point of view of the mining investor, the prospector, or even the Australian taxpayer. In Western Australia, between 701’ arid 000 prospectors have been assisted by the Government. of thai Stave in order nol only to promote the development of the mining industry, but also to provide employment. It is surprising to note the large quantity of gold that has been recovered since effect was given to that policy some years ago. Many of these men, during the course of their prospecting work throughout the auriferous areas, have discovered lodes and reefs which, at the then prevailing prices of gold, were not profitable, but which to-day, with the price at £10 Ils. a fine ounce, could be worked to advantage, possibly leading to the opening up and development of new mines. This is a matter that concerns every citizen of the Commonwealth, because no industrial enterprise would furnish wider scope for local marketing than the development of our gold-mining areas. In Western Australia, this industry provides employment for upwards of 16,000 men, and, throughout the Commonwealth, the number of employees in the industry exceeds 30,000. Therefore, this important industry plays an important part in our economic life. Those prospectors and others who have helped in its development should not now be discouraged by the imposition of the proposed tax. I should like the Minister to explain how the limit of £9 a fine ounce, beyond which the 75 per cent, tax is to be imposed, was arrived at. The average price was £9 3s. 4d. an ounce for the half-year ended the 31st August last. No doubt the Minisfir will say that the Government has been guided by the prices realized during the last twelve months. But there is no justification for that. Those who have invested their money in this industry and have employed their time in its development are entitled to a.t least the price prevailing on the 31st August last.
Gold production in Western Australia is one of the principal industries, if not the chief industry, in that State. The Commonwealth and its territories produced 1,800,000 ounces of gold last year, and Western Australia was responsible for 74 per cent, of the total production. When one reflects upon the depressed prices obtained for wool, wheat and base metals in Western Australia during the last few years, one realizes how important the gold-mining industry is to the people of that State. But for the additional development that could have taken place only as the result of the increases of the price of gold from time to time during the last ten years, the Treasurer of the Commonwealth would have been faced with the problem of heavier claims than have been made for financial grants to Western Australia.
– This measure will not cause any reduction of the prices of other primary products.
– I am with the Government in its desire to procure the necessary revenue for the defence of Australia, but I take exception to the incidence of this tax. The proposal of the Government to levy tax upon the price of gold, as against the profits derived from gold-mining, will inflict a direct hardship upon many people in Western Australia, because those who were hopeful of treating huge quantities of ore that had previously been regarded as unpayable will now be precluded from the mining and treatment of that ore and the winning of additional gold. Some years ago it was not profitable, in some of the established and developed mines, to mine ore of a gold content of less than 7 dwt. to the ton. In other mines it was not profitable to mine and treat ore containing half an ounce of gold to the ton. Many properties in Western Australia returning 2i dwt. to the ton, that would be profitable at the price of £10 lis. a fine ounce, would not be profitable if the price were £9 7s. 9d. I heard some one say yesterday that an established industry like mining should not protest against the incidence of this tax. What is an established mining industry? Throughout the world each mine is operated on its own merits. There are difficulties peculiar to each region of the earth’s surface where the fissures and lodes contain gold. Some mines can be worked ar much lower cost than others. The Minister said that the reason for tho increase of the price of gold to £10 lis. a fine ounce was the depreciation of sterling in relation to the American dollar, but I point out that another reason is the desire of Britain and France to secure supplies of gold with which to purchase munitions’ from neutral countries. It is much easier, as well as safer, to use gold than to export goods.
– But the increased price is wholly due to the war.
-HAM. - The additional reason which I have given should not be overlooked. No charge of profiteering can be laid against the producers of gold. Generally those who offer commodities for sale have a say in the fixing of prices, but that privilege has been denied to the producers of gold in’ Australia, for the price has been fixed overseas without any consultation with them. As I have said, the desire of Britain and France to obtain additional gold is one reason why higher prices are being offered for gold. In turn, those higher prices have given an impetus to the production of gold. I submit that by taxing the profits made by gold-mining companies, the Government could have secured the £1,500,000 which it expects to obtain from this source during the current financial year. I know that my statement is correct, and that the imposition of this tax will prevent any expansion of the gold-mining industry; it may even reduce the number of men employed in the industry. There are many more gold mines in Western Australia to-day with gold at £9 8s. 7d. a fine ounce than existed in 1929-30 when the price was only £4 Ss. 9d. a fine ounce. Higher prices have led to a considerable increase of tlie number of men employed in the gold-mining industry. Had the Government agreed to allow the price of gold to remain at £10 Ils. a fine ounce, many deposits ef low-grade ore in Weatern Australia would have been developed. This fax is a foreign importation which has been adopted by the present Government for the first time in Australia. I regret that the Government has seen fit to obtain additional revenue in this way, instead of taxing the profits of established rnining companies. I repeat that the Government’s action will retard that expansion of the gold-mining industry which we all so greatly desire.
– I oppose the new and vicious principle of taxation which is contained in thismeasure. Under it the Government proposes to take threefourths not of the profits, but of the value, of all gold produced in Australia when the price is above £9 a fine ounce. In other words, the Government proposes to take over 10 per cent. of the product of all gold mines so long as gold remains at its present price, irrespective of the cost of production. This is a course which if now accepted is certain to be adopted more and more as the war continues. This tax will have to he paid whether or not any profits are made by the producers of the gold. Had the Government levied a tax on. the profits of gold-mining the burden would have been accepted almost without demur, and with the high price of gold the industry Avould have expanded, and in addition, a field for the absorption of many unemployed would have been opened. The Government’s proposal means that 87½ per cent., not 75 per cent., of the price of gold above that which ruled on the 31st August last, namely, £9 3s. 4d. an ounce, will be taken from rhe producers of gold. In respect of gold, t he Government says that it will not adopt as the basis of the tax, the price on the 31st August, which is the date that has been adopted inrespect of all other commodities, the prices of which are to be controlled.
-Had the Government made gold-mining subject to income tax, the 3s. 4d. a fine ounce in excess of £9 would probably have disappeared.
– By collecting the income tax from gold-mining companies, the Government could have obtained the £1,500,000 which this tax is estimated to produce, without interfering with the expansion of the industry.
– There has been an increase of the tax on other companies.
– I am aware of that. I feel sure that goldmining companies would have patriotically accepted a tax on profits but they are opposed to this tax on their output. I object to the principle contained in this tax measure and I want to know how far the Government proposes to extend it. If, for example, prices for wool, wheat, base metals or other Australian commodities rise during the war, is it suggested that the Government will take into the Treasury 75 per cent. of the prices above the same limits? Of course we know that the Government has no such intention, though it has no hesitation whatever in taking seven-eighths of the price of gold above £9 an ounce. The equanimity with which this tax proposal has been received is due, no doubt, to the fact that it will fall mainly on the goldmining industry of Western Australia. The principle contained in this measure is new in Commonwealth tax measures, and, as I have shown, it will press unfairly upon the gold producers of Western Australia. The mining interests concerned are anxious to make representations to the Government, and have asked for the passage of the legislation to be delayed for a few days. I regret that that suggestion is not acceptable to the Government, which has acted autocratically in this matter. I protest strongly against not only the incidence of the proposed tax but also the indecent haste with which the bill is being pushed through both Houses of the Parliament.
– Has not the honorable senator heard that, there is a war in progress?
– I have, and for that reason I have been extremely moderate in my remarks on this subject. I am as anxious as any one else in this chamber to help the Government to pass its legislation in order to prosecute the war successfully ; but I did not anticipate that the first super-tax measure to be introduced in this Parliament would contain a principle with which, hitherto, the Commonwealth has been unfamiliar.
– There will be no such tax proposals concerning the Colonial Sugar Refining Company Limited.
– That is so. Nor will there be similar discrimination in respect of the profits of the Broken Hill Proprietary Company Limited, which charges high prices for its output and is showing a profit of millions of pounds yearly.
– Prices for other commodities have been fixed.
– The Government has not fixed the price for gold because that is determined on an entirely different basis. To-day I received the following telegram from Western Australia : -
Premier appealing Prime Minister delay Senate debate until next week permit direct representation mining interests.
The Government of Western Australia is most vitally concerned in this Commonwealth proposal to take 75 per cent. of the price of gold in excess of £9 an ounce. I appealed this afternoon to the Leader of the Senate not to push the bill through to-day, in order that the mining interests of Western Australia may make representations to the Government. I have no precise knowledge of the representations.I am expecting correspondence from the mining interests concerned by air mail to-morrow, but, as the Leader of the Senate earlier this afternoon said that the Government intends to push the measure through, the representations from Western Australia will not reach me until the tax has been imposed.
– The Government will always be glad to receive any representations in respect of its legislation.
– But if the bill passes this afternoon, this tax will have been imposed before representations reach me, and possibly Parliament will have adjourned for a lengthy recess.
– Who sent the telegram to thu honorable senator?
– It is from a representative of important public and other interests in my State.
– I was under the impression that it was from the Premier of Western Australia.
– No ; but it states that the Premier is appealing to the Prime Minister to delay the passage of this bill in order that the mining interests that are opposing it may beheard. I regret that the Leader of the Opposition approved the motion to suspend the Standing and Sessional Orders in order to permit this bill to be passed without delay, because I wished to put more strongly the case for the rnining interests that are involved.
– The Government has said that it wants the money, and since that is the responsibility of Ministers, I raised no objection to the motion.
– The honorable senator is a supporter of this Government.
– That is so, but I reserve the right at all times to criticize any measures which it introduces, and I am opposing this bill.
– The honorable senator is a “ twicer “.
– I regard that remark as offensive, Mr. President, and ask for its withdrawal.
– As Senator Johnston takes objection to the remark. I ask Senator Lamp to withdraw it.
– I do so, Mr. President.
– The mining community in Western Australia is one of the most patriotic and broadminded in the Commonwealth. All that it seeks is a fair deal. If the Government would reconsider this proposal, the mining interests in the western State would give every assistance; but some of them strongly object to the incidence of this tax.
In times like the present, there would be no objection to an increase ofthe tax on the profits of gold-mining as of other industries. But this is not a. tax on profits. It is an inequitable and unscientific levy on the price of gold, irrespective of whether it is produced at a. profit or not. To take a percentage of value instead of taxing the profit, is to work an injustice, and jeopardize the existence of low-grade mines, which employ relatively more labour than companies working on richer ore bodies.
Employment of well-paid labour assists the Government in time of war qui to as much as does a contribution to its tax revenues. Mines which are today being carried on at a loss or on a very narrow margin of profit confer substantial benefits on. the community and case the burden of both State and Commonwealth Governments, particularly in regard to unemployment. This proposed levy on the price of gold in excess of £9 an ounce may result in the collapse of a number of mining companies operating low-grade ore bodies. It will certainly militate against the opening up of new bodies of low-grade ore, the prospects of which have improved somewhat lately, owing to the increase of the price of gold. At the present time nothing could assist the Commonwealth more than an increase of gold production from low-grade ore bodies, but such development this legislation will, I believe, retard. The present high price of gold, but for this tax, would have resulted in the opening up of a considerable number of low-grade ore bodies which now will be neglected, perhaps for generations.
The decision to impose this tax was, 1 believe, arrived at without a proper knowledge of the varying conditions under which the gold-mining industry operates in the various States. This proposal to tax the price of gold irrespective of the cost of production, and irrespective also of whether a company shows any profit on its operations, is unjust, particularly to mining interests in Western Australia. The value received fct- gold is taken into consideration by the arbitration court of Western Australia, which imposes an industry allowance cost of 14s. a shift, a district allowance of varying rates, and 4d. a shift for each increase of 10s. an ounce in the price of gold beyond a certain figure. From, this it will be seen that working miners, prospectors and all others interested in gold production are all very much concerned in this attack upon their means of livelihood. On a production of 1 00,000 ounces a month, with the present price of £1.0 10s. an ounce the tax will yield £112,000 a month from Western Australia alone - nearly 75 per cent, of the total amount to be collected by the Commonwealth Government in all of the States.
This attack upon a precarious industry, without any regard to the interests of prospectors and small producers whose operations may not be showing a profit is, in my opinion, bad policy. It is particularly objectionable when compared with the treatment meted out to other companies which are subject to ordinary tax measures. For example, the Broken Hill Proprietary Company Limited will, owing to war conditions, sell steel at much higher prices.
– What authority has the honorable senator for that statement ?
– Very good authority indeed. It is well known that the Broken Hill Proprietary Company Limited is selling its products in Great Britain at higher prices than have been ruling in recent months.
– Its production costs are lower than those of some British companies.
– I make the comparison because I regard this levy on the gold-mining industry as most unjust. The Broken Hill Proprietary Company Limited has earned huge profits in recent years and it recently made a bonus distribution to its shareholders equivalent to 64 per cent, of its capital. There are gold-mines in Western Australia, to which I shall refer later, which have not paid a dividend for the last three years, and are now to be taxed on a basis different from that of the steel monopoly which I have already mentioned. Why should the gold-mining industry be treated differently from such companies as the Broken Hill Proprietary Company Limited, General Motors-Holdens Limited, and the Colonial Sugar Refining Company Limited, one of which is making a bonus distribution of over £1,000,000 ?
– All of the companies mentioned by the honorable senator would prefer to pa” their war taxes on the basis adopted in this bill.
– The basis on which they pay should be applied to the gold-mining industry.
– This tax will kill the gold-mining industry.
– It will not kill the industry; but it will retard expansion which would otherwise occur, particularly in mines in which, low-grade ore is being mined. The gold production in Australia for last year was as follows: -
Of a total production valued at £14,026,615 Western Australia produced £10,826,349 worth, so that three-fourths of the revenue to be obtained from the proposed tax will be collected in Western Australia. When the Government announced its intention, to impose this tax I notified Mr. Carroll, the manager of the Wiluna gold mine in Western Australia, because .1 thought that he might not be aware of thu Government’s intentions before the proposal came before Parliament, and ho sent me the following lettergram which mentions all the points which should be raised concerning this unjust tax: -
Replying to your telegram’ of 16th instant I have set out briefly case as it affects Wiluna. We accept the fact that some additional taxation is necessary but we consider that all associated with this industry and similar industries should contribute. We are treating at small profit 3.3/4 dwt. complex ore and any additional burden seriously affects our position and the position of all producers operating low-grade mines. Our payments under proposed tax if gold is based on £8 8s. sterling would be £11,000 per month or 3/6 dwt. per ton ore treated. Ultimately this means tonnage of profitable ore is reduced and consequently life of mines. Since the war we are already faced with an expenditure of £10,000 per year duty on fuel oil and the purchase price of this item with increased freight and insurance rates m’ust be increased automatically.
The Government has already added £10,000 a year to the costs of this company on one item alone.
– What profit is the company making on its capital?
– The shareholders have contributed capital amounting to £1,500,000, and no dividend has been paid for over three years. The lettergram continued -
It is estimated these items will call for an additional outlay of approximately £50,000 per year. Other items affecting operating coal arc sales tax and increased commodity price? of which we have had advice. Wages under present award are affected by gold price and unless present basis is modified we arc also faced with increases in wages and industrial insurance which is based ou wages paid. Tin; net price of gold to us should bc the bases for adjustment of wages. Commodity price, should be controlled to prevent any further increase in living cost and demands for increased wages. If production of gold is essential grade of ore mined should be considered in conjunction with rate of taxation to encourage the opening of other low-grade deposits with beneficial effects to all parties. You will judge our position is not particularly sound and if our policy of exploration is to be continued with the object of lengthening the life of the mine Government should be prepared to permit payment to extent of new taxes and increases already applied’ and tho amount expended on exploration. ‘.Die proposed tax should be related to profits and grade of ore mined giving careful consideration to producers whose operations are profitless.
– I do not propose to traverse the ground which has already been covered by Senator Cunningham and Senator Johnston, other than to say that it appears that the Government is doing everything possible to retard the mining industry in Western Australia.It has delayed the development of the iron resources at Yampi Sound, and it now proposes to impose an unjust tax on the gold-mining industry. I am not opposed to taxing unearned increment, but the Government has not given sufficient attention to the interests of those who are likely to suffer most. As is the case in other industries, costs of production have a vital bearing on profits in goldmining. Western Australia is the greatest gold-producing State in the Commonwealth. The industry, however, has not al ways been prosperous. From 1903 to 1930 the production of gold in Australia dropped from 3,800,000 fine ounces to 440,000 fine ounces. It was not until the price of gold commenced to rise in 1930 that the industry was resuscitated. During the last few years, and particularly in the depression, the Government of Western Australia, in order to relieve unemployment, subsidized hun dreds of prospectors, and, I understand, 800 men arestill engaged under that scheme.Very few of them, however, over a year’s operations earn the basic wage. Yet any of these men who win a few ounces of gold will be obliged to pay this tax. Surely the Government must sec that that is unjust. Furthermore, this tax will penalize many miners who are obliged to cart their ore from 30 to 40 miles to crushing plants, and, therefore, must shoulder heavy transport costs. I urge the Government to give considera-. tion to the claims of these men. As Senator Cunningham has dealt fully with the objections to this tax I do not propose to labour the matter.
Motion (by Senator Allan MacDonald) put -
That the debate be now adjourned.
The Senate divided. (The President - Senator the Hon. J. B. Hayes.)
Majority . . . . 22
Question so resolved in the negative.
– I regret that the Minister did not see fit to agree to my motion for the adjournment of this debate in order to give the Western Australian Government and the gold-mining industry an opportunity to place before’the Commonwealth Government their views of this tax. I agree with previous speakers that whoever was responsible for this measure knows very little about the industry, particularly in Western Australia. As Senator Johnston has pointed out, the conditions in that State differ entirely from those existing in the gold-mining industry in the other States. In Western Australia under Arbitration Court awards, a fair share of the benefits arising from higher prices of gold is invariably passed on to the workers in the industry. ‘Senator Cunningham and Senator Johnston mentioned the basic loading of 14s. in respect of wages. In addition, for every 10s. by which the price of gold rises, as has happened on several occasions during the last few years, an increase of 4d. a shift is paid to miners. Again, the goldfields districts wage allowance, for both government and private employees, is greater than any other district allowance with the exception of some north-west allowances.
– Thanks to a Labour government.
– No ! The first district allowance was provided when Sir John Forrest - later Lord Forrest - was Premier of Western Australia and leader of a Liberal government. At. that time the need for such an allowance was realized in view of the high cost of living on the gold-fields. The goldmining industry in Western Australia, unlike other industries in that State, pays a special tax in order to recoup the State Treasury for compensation payments to miners who are forced to withdraw from the industry when they contract silicosis, pneumoconiosis and other pulmonary diseases that are incidental to the miner’s occupation. The industry has borne those costs willingly, because it realizes that at the first signs of disease, miners should abandon the industry and seek a healthier occupation.
One cannot help noting tia 0 peculiar reactions of many people to the magic word “ gold “. Immediately the price of gold rises, Commonwealth and State Treasuries seem unable to ‘resist a peculiar urge to tax it. Like other industries giving employment to large numbers, gold production should be encouraged at this time. I remind honorable senators from South Australia that a. similar fate may await the silver-mining industry if the price of silver rises. Thai industry is of outstanding importance to their State, and silver may be taxed in the same way as gold is to be taxed under this measure. We know that for many years .the smelting industry in South Australia has been obliged to carry abnormally high costs, as its contribution towards keeping up the world price of silver. One has only to inspect the bullion rooms at Port Pirie to realize the magnitude of that contribution. That industry has borne a. huge loss without, a whimper to any government for assistance. But the case for Western Australia to-day may be that of another State to-morrow. Possibly the copper.mining industry may be affected, and something may be heard from our friends, from Tasmania, who did not support those of us who desired the postponement of this debate until technical and authentic advice had been obtained regarding this matter. All that I am asking i.s that sufficient time be allowed to those interested in the industry to give further consideration to the measure. If this bill be passed - and judging by the division that has been taken it has every chance of being agreed ro - the State of Western Australia will contribute about £1,250,000 towards this tax. In other words, the Government, is asking tho small State of Western Austral iia. to bear tho greater part of tho burden. That State, in common with South Australia and Tasmania, has repeatedly had need to seek financial relief from, the Commonwealth Treasury and various grants have been made to it. That assistance bos been appreciated, but this bill will impose on th<? Stair- of Western ‘ Australia, the population of which is comparatively small, a. burden out of all proportion to tho wealth and productivity of the other States. I do not say that Western Australia has been, singled out for special taxation, but the incidence of this tax will be such that that State will have to bear a huge burden. There appears to be no need for indecent haste in regard to this matter, and therefore, I hope that my request for postponement of its consideration will bc favorably considered by tb«> Government. A delay of a few days would not materially affect the collection of the tax. Honorable senators from Western Australia, in common with, other honorable senators, fully realize that the Government must, have extra revenue, and we are prepared to do all in our power to assist it; but, when it goes out of its way to tax production - for that is what this proposal amounts to - I think that it is proposing too drastic a departure from the ordinary principles of taxation, and that a decision, on this matter should not be reached hurriedly. The Government would be well advised to postpone the consideration of the bill for a few days, so that authentic and technical information which the Government does not, appear to have ai. the present tirmemay be obtained.
Senator CAMERON (Victoria) [4.40J. - In view of the Government’s declared policy in regard to the war, I am surprised that a bill of this nature has been introduced. 1 submit to honorable senators opposite that, when war breaks out, the Government should mobilize and increase to the limit the man-power of the country and the supply of gold. The reason for the latter course is that gold is the only reliable and acceptable form of international currency. We could not. purchase abroad with Austrnlia.ii pound notes the commodities that we need, but, under the financial system operating today, we could purchase as much as we required provided that we had the necessary gold. Therefore, I suggest that the policy of the. Government could best be given effect by encouraging the production of gold, even if the price should- increase. Prices increase as the result of inflation, and inflation is resorted to in time of war for the purpose of mobilizing and increasing the gold supply. Under the present monetary system, I cannot see how a government that was determined to give effect to its policy of defending the country, and making the best use of all of the resources at its disposal, could reconcile that policy with a proposal to restrict the production of the very commodity that is most needed. It appears to me that the Government has been badly advised in regard to this matter. 1. do not intend to embark upon an argument of a theoretical kind, but, in passing. I should like to indicate what I re- gard as the processes at work.
Recently 1 said that the basic wage, if assessed in terms of gold, would be £5 a week. It is now £4 ls., and that amount is not equivalent to the basic wage of £2 2s. a week in terms of gold, which ruled in 1907. With £4 ls. a person could purchase to-day only about the same quantity of commodities as with £2 2s. in 1907. As values decline, the purchasing power of wages in terms of gold is lowered by the process known as inflation. The effect of that is to force up prices, and first the price of gold rises. Taking £4 an ounce as a basic price the price of gold has increased by roughly 160 per cent., and this has sent up the prices of commodities generally. The prospector or the owner of a low-grade mine, although apparently receiving a much higher price for gold than was previously obtained, is not able to purchase much more, if any more, than he could before the price of gold increased. Therefore the Government would lose nothing if this tax were not imposed ; on the contrary, it would have everything to gain. In the first place, this tax will have a boomerang effect od the Government, because it will restrict the production of gold which the Government requires. In addition, it, will restrict the production of gold by low-grade mines and prospectors; therefore. I cannot see that the Government has anything to gain by the proposal. The Government is possibly doing unwittingly a thing that it may have to undo, if it should require more gold. And it will require more gold if the war continues.
Production in tune of war should be increased to the limit. There should not be one. idle man or woman, if the Government desires to make the best use of the resources of the country. I contend that the proposed tax will have the effect, of restricting the production of gold, and also increasing unemployment. What would the. Government gain from that? I. should be glad if (he. Minister would try to enlighten me on this matter. The Opposition is prepared to help the Government to the utmost to raise the additional revenue required for defence purposes, hut it is our duty, to point out how unwise the present proposal is. I have no doubt ns to the Government’s sincerity in this- matter, but I certainly question
Its judgment. If the war continues for a considerable period, the Government will probably find it necessary, not only to remove this tax, but also to increase the price of gold. As a matter of fact the price of gold will go up automatically. As more notes are put into circulation beyond the point of value for value - a sovereign for £1 - the mobilization of gold is facilitated; it automatically goes into cold storage. In Asiatic countries it is hoarded by private individuals, but, under our financial economy, most of it goes into the vaults of tlie banks or into the hands of the Government. The greater the inflation of the currency, the more the price of gold will be increased. Within limitations, the Government could inflate the currency and mobilize and increase the supply of gold, but the man on the basic wage must be able to purchase for the wages received by him in notes, even if he were paid ten pounds a week, sufficient to maintain himself and his family in order that he might do the job required of him.
The increase of the price of gold has undoubtedly increased the supply of gold. Many mines are in operation and thousands of men are prospecting for gold because of the high price which that metal commands. If it were not for that price those mines would be idle and those men would possibly be on the dole.
– Nobody denies that.
– If the Minister does not deny it, can he explain’ how the best results are to be obtained by the imposition of this tax? If profits were taxed, more revenue would be -obtained, and at the same time deposits of low-grade ore could be worked. More over, many old men, who are unable to work in industry, would be able to continue their search for gold, and thereby increase the supply of that commodity, to the advantage of the country as well as themselves. I conclude as I began by expressing astonishment that the Government should have introduced a bill which is calculated to do its policy more harm than good.
– At this juncture - 1 wish to say a few words which may not be closely related to the actual subject now being discussed. I have already stated that the Opposition considers that the Government has the responsibility of raising the money which it believes to be necessary for the effective defence of this country. Although the policy of the Government in this connexion differs from that of the Opposition, we on this side, while criticizing thi* measure and claiming the right to criticize other measures which may be introduced, do not intend to oppose the passage of this bill.
– From all sections of the community has come an insistent demand to prevent war profiteering, and the Government has already taken action to fix the prices of commodities as at the 31st August last. Since that date the price of gold has made a spectacular rise, and to suggest that the gold-mining industry should be allowed to be a war profiteer while other industries are being restricted is to act inconsistently. The price of gold should be fixed as at the 31st August iti the same way as the prices of other commodities have been fixed. It would appear that some honorable senators are prepared to support war profiteering when it suits them, but not when it does not suit them. I ask them to be consistent. This bill, which seeks to raise money for defence purposes, is consistent with the Government’s policy of preventing war profiteering, and also with the public demand that effect be given to that policy immediately. This bill, while virtually fixing the price of gold as at the 31st August, grants a special concession to the gold -mining industry in that producers of gold will still be allowed to receive a price in excess of that which obtained on the date mentioned.
– Why are not all commodities dealt with in the same way?
– I am prepared to support a policy which would ensure that.
It has also been contended that the burden of this tax will fall chiefly on Western Australia. Nothing is further from the truth, because 90 per cent, of this tax will come out of profits, and honorable senators know that the profits of the gold-mining companies in Western
Australia are distributed more among persons outside that State than among its citizens.
– Obviously, the honorable senator does not know much about gold-mining.
– Investments in gold mines in Western Australia are not limited to citizens of that State, and therefore the burden of this tax will be borne by persons throughout the Commonwealth, and, indeed, by many persons outside Australia.
It is also suggested that there is something unusual about this tax, but I point out that for a number of years South Africa has raised a large proportion of its revenue by means of an export tax on gold. The same is true of New Guinea. Reference has been made to the conditions of employment in this industry. That is a matter which can be met by a variation of existing awards. Should application be made to the Arbitration Court for a variation, that body would doubtless take into consideration the fact that the companies concerned will not actually get the whole of the increase beyond the price of £9 an ounce. If honorable senators desire to be consistent in their attitude toward* war profiteering, and wish prices to be fixed as at the day prior to the outbreak of war, they should support this measure.
– I agree that the Government must find money for the defence of Australia, but in my opinion not sufficient consideration was given to this measure before its introduction. As Western Australia is the chief goldmining State in the Commonwealth, the Government of that State should have been consulted before this bill was introduced, particularly when we reflect that that Government has assisted over 800 prospectors to search for gold. Some of them have not yet found a “ colour “ : others have obtained small quantities; but even with gold at £9 a fine ounce, their income is not high. I endorse what has been said by other honorable senators about the output of gold from Western Australia and I ask the Government why it has selected gold for special treatment? What about tin, copper, lead and other minerals ?
Sena tor Fori. - In each case a maximum price has been fixed, but on a less generous basis than in respect of gold.
– in reply - Listening to the remarks of honorable senators who have criticized this bill, one would imagine that something which the gold-mining industry has enjoyed in the past is to be taken from it; but, as I pointed out in my secondreading speech, all that the Government proposes in this measure is to share in the enhanced value of gold resulting from war conditions. I road in this morning’s press that the price of tin has been definitely pegged a’t a maximum of £230 a ton, which is approximately the price on the 31st August last. I understand that the prices of lead, zinc and copper also have been fixed. There is nothing unusual in what is being done in relation to gold. It woud be well to compare what the producers of gold will receive under this bill with what they received in July. The price of gold today is £10 lis. a fine; ounce, Australian currency. The tax imposed by this measure is £1 3s. 3d. a fine ounce, which leaves a. net return of £9 7s. 9d. n.n ounce as the price which the Australian producer of gold will receive. As the average price for July last was £9 4s. lid. an ounce, it will be seen that under this bill the producer of the gold will receive 2s. lOd. an ounce more than he received in July. Moreover, he will still be exempt from al! forms of federal taxation in respect of such gold. The average price of gold for the year 1938-39 was £9 ls. 2d. an ounce; it is now £10 lis. an ounce. Even with three-quarters of the premium going to the Government, the price to the producer is still £9 7s. 9d. an ounce. Therefore, the present price is 6s. 7d. an ounce over the average for 193S-39. 1. remind honorable senators from Western Australia, who have complained that most of the gold won in Australia comes from that State, of the benefit which the exemption of gold-mining from Commonwealth taxes has conferred on Western Australia.
– Why should gold not be free from tax? The Commonwealth Government does not ask the manufacturer of boots to pay a tax on the boots that he makes.
– Can the honorable senator point to any other commodity selling at high prices which has escaped all forms of taxation as the gold-mining industry has?
– Why not tax gold-mining as other industries are taxed ?
– The honorable senator knows that gold-mining does not bear the same burden of taxation as is borne by other industries. Senator Johnston asked that the gold-mining industry be compared with such concerns as General MotorsHoldens Limited and the Colonial Sugar Refining Company Limited. I suggest that those companies would be glad to be placedon the same basis as gold-mining. I go further and say that honorable senators, who may yet be called upon to make heavy sacrifices to meet the cost of the war, would be glad to be on the same basis.
– There is no analogy.
– There is. It is proposed to allow this industry to receive a net return which is higher than the return mat it has received at any time in its history. In any case, the proposed tax will be merely a proportion of the premium, and has no relation to any profits that may be earned. The treatment of gold-mining companies is incomparably hotter than the treatment of other companies which pay taxes on their profits.
– Put the gold-mining industry in the same category.
– I would remind honorable senators that in my secondreading speech I stated that, but for the unfortunate tragedy that has taken place in Europe the price of gold would probably have remained static at about £9 an ounce; it might even had been less. The increase that has taken place is due entirely to the outbreak of war. But for the conflict that is now raging in Europe, we should probably not have heard anything about the contemplated development of a number of low-grade ore bodies. In any case, the proposed tax will not retard their development, because, whether companies work on high-grade or low-grade ore, they will be asked to pay only a portion of the premium above £9 an ounce. In other words, all that the Government proposes to do is to divert to the Treasury a proportion of the unearned increment.
– Why does the Government object to raise this additional money by taxing the profits of tbe industry?
– Because present conditions are abnormal. The prevailing price of gold represents unearned increment, which is directly due to the outbreak of the war, and the Government considers that the taking of a portion of this unearned increment to help defray the cost of the war is fair and equitable.
– Does the Government intend to make a similar levy in respect of other commodities, the prices of which may increase owing to war conditions ?
– If the price of tin rose to £400 a ton, as it did during the last war, would the tin-mining industry be treated in the same way?
– The price of tin has been fixed at about the market rate ruling at the end of August. I would, however, remind Senator Lamp that at this stage it is impossible to say what means may have to be adopted for the raising of revenue for war purposes. It may be necessary to take action along the lines suggested by some honorable senators. Need I add that the Government is not experiencing any joy at having to extract additional revenue from the taxpayers in order to meet the enormously increased commitments due to war conditions, which may last for years?
– But these gold prospectors arc not taxpayers. Many of them are poor people.
– If they win gold, they will become taxpayers. The Government has endeavoured not to impose an undue burden upon the industry. The taking of 75 per cent. of the price of gold in excess of £9 an ounce will not inflict hardship on any one, nor will it jeopardize the industry. Even after paying the tax prospectors will get at least as much, and perhaps more, than they would have received had war not taken place, because the price of gold would not have risen to its present level. We have to recognize that world conditions are abnormal. The Government would not have selected this form of taxation if other forms had been available at this time of crisis. As the Leader of the Opposition (Senator Collings) pointed out earlier this afternoon, the Government has the responsibility of financing defence expenditure to an amount hitherto unknown in the history of this country. We regard this tax measure as equitable, because, as I have shown, it will ensure the return to the Treasury of a portion only of the unearned increment of the gold-mining industry directly due to the outbreak of war. I cannot believe that it will impose any hardship on tbe industry.
– What about those 800 men who were previously on sustenance, but are now prospecting for gold?
– They will get at least the same price for any gold won, as they would have received had war not occurred. They will get about £9 7s. a fine ounce, whereas, a few weeks ago, prior to the increase of price due to war conditions, they would have received only a little over £9 an ounce. The Government believes that the burden is being equitably spread over the industry. I therefore hope that the bill will be carried.
Question put -
That the bill be now read a second time.
The Senate divided. ( President - Senator the Hon. J. B. Hayes.)
Majority . . Nil
The PRESIDENT (Senator the Hon. J. B. Hayes). - The result of the division is “ Ayes “ 16, “ Noes “ 16. The voting being equal, the question is resolved in the negative.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motion by Senator Foll) read a first time.
– I move -
That the bill be now read a second time.
This bill is for the purpose of appropriating for defence expenditure of a capital nature an amount of £627,309, which represents the excess receipts of the Consolidated Revenue Fund during 1938-39. By the Defence Equipment Act of 1934, a Defence Equipment Trust Account was established, into which various amounts have since been paid, with the approval of Parliament, with the object of relieving the revenues of later years. The purposes for which amounts standing to the credit of this account may be used are: -
An amount of £1,425,915 remained in the trust account at the 30th June last from the excess receipts of 1937-38. This was set aside by Parliament for expenditure on defence equipment, and with the amount of £627,309, which it is now proposed to appropriate for a similar purpose, a total of £2,053,224 is available for capital expenditure in 1939-40 from thu trust account. Details of the items on which this amount is to be expended will be found on page 315 of the Estimates. The policy of treating the excess receipts in this way has been approved by Parliament in a number of instances in the past. I commend the bill to the Senate.
Question resolved in the affirmative.
Bill read a second time and passed through its remaining stages without amendment or debate.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on. motion by Senator Foll) read a first time.
. -I move -
That the billbe now reada second time.
This measure, which was foreshadowed in the budget speech, is designed to increase the taxable sale value upon which sales tax is payable by retailers and other persons upon the importation of goods into Australia. The bill will remove a competitive anomaly which at present exists between retailers and wholesalers, in respect of sales tax payable upon imported goods. The general scheme of the sales tax law is designed to require thepayment of sales tax upon a wholesale selling value of all goods sold in Australia, other than goods in respect of which exemption is authorized by law. A wholesale merchant who imports goods for sale by wholesale is required bv the law to enter the goods at the customs free of sales tax, and is subsequently required to pay tax upon the amount for which he sells the goods to retailors for resale. It will be realized that exchange is taken into account by the merchant, together with other costs. in arriving at the price for which the goods are sold, and upon which tax is payable. On the other hand, a retail merchant who imports goods for sale by retail is required under the existing law to pay sales tax in respect of those goods at the time of entry for home consumption, upon values which are not, in fact, expressed in terms of Australian currency. In these cases the law requires tax to be paid upon a “sale value” representing an amount which exceeds by 20 per cent. the sum of -
With few exceptions, such aa goods imported from New Zealand, the value for duty of imported goods for the purposes of customs duty, is expressed in terms of sterling, and not in terms of Australian currency. Thus the taxable sale values for sales tax purposes, which are based on these values for duty, are. not related to Australian currency. This point was of little importance in 1930, when the sales tax law was introduced, as the rate of exchange, Australia on London, was then in the vicinity of £106. It is now £125 buying and £125 10s. selling. This substantial increase has caused the exchange factor to assume considerable importance. It means thata wholesale merchant who pays tax on his A ustralian currency sale prices of imported goods is at a considerable disadvantage, from a sales tax point of view, in competition with a retailer who imports comparable goodsand pays sales tax on values which are based on sterling.
It may be explained that, the provision in the existing law for the addition of 20 per cent. to the sum of the value for duty and the duty to ascertain the taxable sale value for sales tax purposes was not designed to cover the exchange factor. It was designed to arrive at a figure which would include other importing costs, together with a reasonable measure of profit to the importer which would, in. general, represent a fair wholesale value of the goods if sold in Australia. It must be admitted that in respect of some classes of goods, the addition of 20 per cent. may be too low to reach a fair wholesale value, while in a few instances it may be a little high for that purpose. In the vast majority of cases, however, and taking the taxable field of goods as a whole, it is considered that the 20 per cent, originally decided upon does no more than cover the costs, charges and profits, exclusive of the exchange involved, which would normally form, part of a fair wholesale price. It would, of course, be impracticable to attempt to prescribe varying percentages for all the different classes of goods affected. It is considered, from a practical point of view, that a percentage of 20 is a fair one for general application to all cases, provided that action be now taken to require exchange to be taken into account as proposed in this bill.
It will be noted that the measure provides that the rate of exchange to be used in converting values for duty into Australian currency shall be’ the telegraphic transfer selling rate, at the date of export of the goods from the country of export, as fixed by the Commonwealth Bank. The present telegraphic transfer selling rate, Australia on Loudon, is £125 10s. This rate has remained constant owing to regulation by the Commonwealth Bank Board since the 3rd December, 1932. It is proposed that the conversion of values for duty into Australian currency shall come into operation in respect of importations on and from the 1st October, 1939. The fixing of a definite date in this manner is necessary in order to avoid confusion amongst importers and their agents. The scheme will not necessarily be applicable to all entries of goods on and from that date, as it will definitely not apply to entries of goods which were, in fact, imported into Australia prior to the 1st October, 1939. It may be explained that the High Court of Australia has held in the case Wilson v. Chambers & Co. Pty. Ltd. (1926), 38 C.L.R. 131, that goods are imported into the Commonwealth whenever they are brought into their port of destination for the purpose of being finally discharged in Australia at that port, and that the discharge of the goods from the importing vessel is not required to complete the importation. The port of final discharge of such goods may be a coastal port at which the importing vessel does not call, and therefore the goods must be landed for transport by land or sea to the coastal port for final discharge. In such a case the date of the arrival of the goods at the coastal port is the date of their importation into Australia.
I commend the bill to honorable senators as a measure which will result in the removal of a definite anomaly, by placing retail importers on more even terms with wholesale importers, from the point of view of their liability for sales tax. It is estimated that during the current financial year the bill will produce additional revenue amounting to £120,000.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 14th September (vide page 545), on motion by Senator McLeay -
That the papers be printed.
, - Although the debate on this motion has proved very interesting, so far as I can judge, nothing new has emerged from the welter of words uttered during the debate. The Leader of the Opposition (Senator Collings), as is customary during a budget debate, had a regular field day, and it would appear that the leadership of His Majesty’s Opposition in this chamber brings with it a responsibility that volubility seems to assist very materially. During his speech he referred to the negotiations between the Prime Minister (Mr. Menzies) and the Country party with respect to the formation of a composite ministry as a “ sordid business “, and then proceeded to commend the Labour party for refusing to participate in the formation of a national government. If he regards as sordid negotiations which must take place before a national or composite government is formed, he is entitled to his opinion; but to me his utterances were only a miserable attempt to justify the attitude of the Labour party in refusing to participate in the formation of a national ministry. At the same time he said that the members “f the Labour party itself possess the ability and capacity to administer the affairs of the Commonwealth and to prosecute the war to a successful conclusion. If the members of that party have the capacity which he alleges, it is unreasonable that they should not be willing, in a national emergency, to pull their full weight. I would remind the Leader of the Opposition and those with whom he is associated that we are at war, and that the justice of our cause is affirmed by all. In Hitler and Nazism we have the most, unscrupulous and ruthless opponents. Everything we hold dear is at stake. If we lose in this conflict we shall lose our all. The realization of that fact actuated the Prime Minister to say that he was willing to form a national government and that is what I believe the Australian people expect, which means that those in this Parliament possessing the best brains, regardless of whether they are members of the United Australia party, the Labour party or the Country party should co-operate in order that Australia may play its part in this campaign with the maximum of efficiency. It is .most unfortunate that the Labour party adopted a policy of isolation. I also remind honorable senators opposite that in this hour of crisis Australia expects not only every man to do his duty, but also every party to do its duty. I regret that the Labour party, when it wa3 presented with an opportunity to prove its administrative’ capacity, of which I believe it possesses a good deal, was not prepared to shoulder that responsibility, lt. is natural that men and parties prefer in normal times to remain apart, but, our present danger and the enormity of the task before us demand that all differences shall be sunk, and that we shall unite in order to see the job through. Differences existing between political parties in this National Parliament are comparatively small, and should prove no obstacle to the formation of a national government. Each party should forget, its political alignments, and should participate in the Ministry in order to enable Australia t,o put forth its maximum effort under the direction of the best brains available in this Parliament. The present, is not a time for party divisions and political enmity. In this hour of crisis we should sink all of our differences and unite in order that we might wage this war in the most efficient and expeditious manner possible.
– That is what we . on thi3 side think.
– Unfortunately, that, is not the case. In this hour of crisis, the greatest in our history, a party representing a large number of the electors of Australia refuses to give of its best to the country which it professes to serve. When one ventures an opinion such as that - and I do so in dismay, rather than in anger-
– The remarks just made by the honorable senator are personally offensive to me, and to every member of the Opposition, and I ask that they be withdrawn. The honorable “senator stated that this party had refused to give of its best to the country in the present crisis. We have not done anything of the sort. We shall decide for ourselves in what way we can give of our best in the interests of the nation.
The PRESIDENT (Senator the Hon.
– I do not wish ro. be unfair to anybody, much less the Leader of the Opposition, but as a senator 1. claim the right to offer what I consider to be just criticism.
– I object to any quibbling. The honorable senator said that the Labour party, which represented a very large number of the electors of Australia,, refused to give of its best to the country in this bour of crisis. That is not true. Tlie remark is personally offensive to me, and to every member of my party, and I ask that it be withdrawn unconditionally.
– The Leader of the Opposition considers the remark to be personally offensive to him, and in those circumstances thu usual practice is for thu offending remarks to he withdrawn.
– I. arn quite prepared to withdraw, but I. point, our. that the Leader of the Opposition, when speaking to this debate, said the very things which I have repeated. He said that, the party possessed sufficient ability and administrative capacity to do the whole of the job.
– The honorable senator is now aggravating the offence, because he is now deliberately saying something that is untrue. No such remark as he attributes to me can be found in the Hansard report of my speech.
– I understood the honorable senator to say that he was willing to withdraw the remarks. I confess that I have difficulty in deciding that his remarks do not constitute fair debate.
– It is fair debate; otherwise I should withdraw.
– As the Leader of the Opposition considers the remarks to be personally offensive to him, .1. ask Senator Dein to withdraw out of courtesy to the honorable gentleman.
– Out of respect to you, Mr. President, and in consideration of the soft and tender skin of the Leader of the Opposition, I withdraw the statement that ho himself admitted when he spoke, in this debate.
– I insist upon an unconditional, withdrawal. I object to any qualification. The statement made by the honorable senator is a deliberate falsehood. It is insulting to me and to every member of the Opposition.
– Order! the honorable Senator must not say that a statement was a “deliberate falsehood”.
– Well, it was.
– Fs the Leader of thu Opposition defying the Chair by repeating his disorder? I ask him to withdraw his remark.
-. - I shall withdraw it after Senator Dein has made his withdrawal.
- Senator Dein said he would withdraw the remarks of which the Leader of the Opposition complained.
– He has not yet withdrawn them.
– Whether or not the Leader of the Opposition withdraws the words “ deliberate falsehood “ does not concern me. I am prepared to rely on the Hansard report of his speech.
– The honorable senator was asked to withdraw the remark that the Labour party was not doing its best for the country in this hour of crisis.
– I shall not withdraw that remark, because I have said repeatedly that the Labour party is not doing its best for the country, and the people of Australia will agree with me. That Ls my sincere opinion. I am surprised that whenever I rise to offer a little criticism-
– Mr. President, 1 ask for your protection.
– I am sorry that this incident has arisen. The remark complained of cannot strictly be said to be outside the scope of fair debate, and the leader of the Opposition will have ample opportunity to refute it. Debate consists of statements and counterstatements. The honorable senator said that the Leader of the Opposition was not doing his best, in the interests of the country.
– No, sir, he did not say that; that is the point. What he said was that the Labour party, which represented a large number of electors of Australia, had refused to give of its best to the country in this hour of crisis. He did not say merely that that was his opinion : he said that we had refused to give of our he-it to the country in this hour of crisis. 1 ask that that remark be withdrawn.
– I withdraw the words to which the Leader of the Opposition has taken exception.
– I now ask the Leader of the Opposition to withdraw the words “deliberate falsehood”.
– 1 do so quite willingly, Mr. President.
– In his speech in this debate the other day, the Leader of the Opposition condemned what he termed the sordid negotiations between the ministerial party and the Country party for the formation of a composite government, and he. commended the Labour party for having declined to indulge in that sort of business. He went on to say that the Labour party possessed sufficient administrative capacity to do the whole job efficiently; indeed, he said that it was capable of doing a better job than the Government If the Labour party has sufficient ability to do the whole of the job, it should possess sufficient ability in conjunction with the other two parties to do a part of the job. Therefore, it had no justification for refusing to join in the formation of a national government, and it is my considered opinion that, by refusing to co-operate with the Government in this way, the Labour party, has let the electors down.
– The honorable senator’s opinion does not count with the Labour party.
– It is remarkable that whenever I rise to speak a lot of howling individuals with sensitive skins on the Opposition benches cannot-
– I rise to a point of order, Mr. President. I object to being referred to as a howling individual. I ask that the honorable senator be required to withdraw that remark.
– The honorable senator has not raised a point of order. Senator Dein will proceed.
– If the skins of honorable senators opposite are so sensitive to criticism, it is not my fault. If the cap fits Senator Ashley, as it does, he can wear it for so long as he likes. The honorable senator thought he would score a point on me when he said that he would be facing me at the next election, but when I reply to his attack he runs for cover. Honorable senators opposite like to administer strong medicine, but they cannot take it. Senator Collings seems to be extremely sensitive to criticism, but he does not hesitate to abuse and unfairly criticize honorable senators on this side. So far he has been given a lot of latitude in that respect. No honorable senator on this side has objected to his abuse, because they realize the worthlessness of his words. Reverting to my argument, I repeat that in the position in which we find ourselves to-day, the time has passed for talk about party alignments of any description or the -preservation of separate political entities of which we have heard so much lately. In a time like the present all party differences, great or small - and in Australia they are very small - should be sunk, and members of all parties in this Parliament should unite for the common good in order to pursue this fight to a successful conclusion.
– Has the honorable senator made representations to the Prime Minister to induce him to take members of the Country party into the Cabinet?
– I have made no representations to anybody. The honorable senator knows as well as I do that this is not a time for party alignments, and that the best brains available in this National Parliament should be employed where they would be most useful - in the Executive Council,, where the efforts of the nation in the present war are formulated and directed. Notwithstanding the assurances given by the Government that it will prevent profiteering, the Opposition is genuinely fearful that profiteers may reap a harvest during this crisis. It is also afraid that the civil liberties of the people are in jeopardy because of certain legislation passed last week, and that the Parliament, will not be called together so frequently as members of the Opposition consider it should be. I point out, however, that the control of profiteering, the curtailment of the civil rights of the people and the regularity with which the Parliament meets are among the matters that will be determined, not by this Parliament, but by the Executive Council.
I admit that the present Executive Council is a good one, but I am not prepared to say that it is the best that could be secured. Some members of the Opposition have great capacity, and their services would be of much help to this country if they were members of the Executive Council. That is why I regard with dismay the fact that the Labour party has refused to play the part that it should play in the formation of a national government. What an acquisition to the Executive Council the Leader of the Opposition would be, with his hatred of profiteering, his championship of the civil liberties of the people, and his strong views regarding the supremacy of Parliament! Those are matters to which the honorable gentleman and other members of the Opposition have devoted special attention, and I consider that the Executive Council is the poorer because the Labour party has not seen fit to play its full part in the government of the Commonwealth. The reason for the attitude of the Labour party to this matter is that ite platform contains an isolation plank which prevents it from fraternizing with other parties in doing the job which Australia insists must be done to the best advantage of the nation.
I commend to honorable senators the recent statement by the Prime Minister of the defence policy of the Government.” Up till a few days ago,I, among other members of this Parliament, was somewhat impatient to know what the Government was doing, or intended to do, in order that Australia might play its full part in this war; but, since the Government’s policy has been announced, I have had no doubt that it will meet with the approval of the people of Australia as well as the Empire generally. I agree that the proposal to enlist and train a special force of 20,000 men, to be called upon to serve as circumstances might demand, either at honie or abroad, is a good one. I believe that the plan for a more complete training of the Militia is also a wise one; but these proposals are mere beginnings, and the people will not be satisfied until every able-bodied man in Australia is able to play his part with the utmost efficiency in the country’s defence. That we are in danger, and that the ability of every able-bodied man to defend himself would be the greatest deterrent to a would-beaggressor, nobody will deny.
– Where was the honorable senator in the last war?
– Knowing the honorable senatoras I do, I am not surprised at that question. The only possible deterrent to a would-be aggressor would be to have every able-bodied man trained for the defence of this country.
– The honorable senator would still be found in “B” company, as he was during the last war. He would he at home at the beginning, and he would still be there at the end of the war.
– If I had some of the things about my neck which the honorable senator has hanging found his neck, I should be quiet. He may be all right in some directions, but he would probably prefer me to remain silent with regard to others. Those who live in glass houses should not throw stones. The only period in my recollection when Australia could be regarded as safe from aggression was immediately after the last war, when we had in this country between 300,000 and 400,000 welltrained and experienced ex-servicemen. If the manhood of Australia were trained to-day as those men had been, no wouldbe aggressor would look in our direction.
Senator Cameron made reference to loan raising and to interest payments on loans. Bunning through his mind, I. imagine, was an objection to the continual payment of interest on loans thai have been current for many years. But let us briefly consider this matter. Whena loan is to be raised, the Government always determines the rate at which it will be issued, its duration, and rate of interest. It then appeals to investors in Australia or abroad to invest in the loan, and pledges the honour and resources of Australia for the payment of the interest and the final redemption of the principal. The lender has no voice whatever in regard to the method of expenditure. If an investor believes that the Government is worthy, and if he has confidence in the country in which the money borrowed will be expended, he invests his capital in the loan. With such money, many thou sands of miles of railways, tens of thousands of miles of roads, hundreds of bridges, many fine public buildings, and innumerable wharves and harbour? have been built throughout Australia. The expenditure of several hundreds of millions of pounds raised in this way has helped materially to establish the high standard of living enjoyed by Australians, but the bond-holders had no voice in fixing the terms and conditions of the loans. Unfortunately, some of the money that has been raised, particularly on behalf of the States, has not been expended wisely. That, however, is not the fault of the tender. Until comparatively recently, no provision was made for the redemption of the loans: not until 1928 waa legislation enacted to provide for a sinking fund. That was evidence of lack of foresight on the part of the governments concerned.
– Governments supported by the honorable senator -we’re in office most of the time.
– Most of the money was borrowed on behalf of the States, in many of which Labour governments were in power. Labour governments have been amongst the greatest borrowers and the worst spenders in Australia. I speak particularly of New South Wales. I make no excuse for the lack of foresight of any government, whatever its party allegiance. Since 1923 the Commonwealth has repaid £85,000,000 of loan’ money. Provision for a sinking fund was contained in legislation which was introduced in 192S, by a government with which Senator Keane would associate me, and since then £47,000,000 has been paid into that fund. The contribution to the sinking fund last year was £11,000,000. These belated payments seek to rectify some of the errors and ill-advised borrowings of previous governments. I am not defending the action of governments which borrowed unwisely; indeed, I criticize them, as every honorable senator has a right to do when he believes that mistakes have been made. My point is .that wo still have the roads, railways, bridges and public buildings on which that money was expended, and we are still paying interest on such loans. To some degree, one counteracts the other. Some honorable senators opposite believe that bond-holders, who have responded to appeals to lend money to governments, ave actuated only by self-interest and greed.
– The Opposition has not said that.
– We condemn the system, not the individual.
– Not infrequently have I heard bond-holders described as Shylocks. It is unfair to attack in that way persons who, in response to a request by the government for the time being in office, lend their money to the nation.
– The honorable senator stands for that system.
– I stand for any system which means honouring the pledges that have been given. Whenever a government invites subscriptions to a loan, it pledges its honour to repay such loan. In my opinion, an agreement is an agreement. Until the system is altered, we have no right to condemn persons who, in a time of need, come to their country’s aid by lending to it some of their money. I listened carefully to Senator Cameron’s speech, but I was unable to follow his reasoning. I should not like to think that the honorable senator is a repudiationist, for I am not prepared to believe that he would deliberately break his word. I can only say that, so long as a loan is outstanding he, and I, and all of us, are pledged to fulfil the promises made when the loan was floated. That obligation remains, even if the money was expended unwisely. There is no alternative but to live up to our pledges.
– I was referring to the policy of the present Government. ‘
– The honorable senator referred to loans and interest generally. He made special reference to the payment of interest year after year, and said that the principal would never be repaid. Until the system is altered, we must stand by the contracts into which we have entered. It ill becomes any of us to ask people to come to out assistance, on terms fixed by ourselves, and then criticize them for doing so.
Several honorable senators opposite mentioned credit expansion in their speeches. I heard such terms as “the credit of the nation “ and “ expansion of credit “, but I could not form any clear idea of what they meant. Certainly, there was no unanimity of opinion. Senator Keane said that some years ago Mr. Theodore, the then Treasurer of the Commonwealth, desired an expansion of credit and endeavoured to obtain approval of a fiduciary note issue of £18,000,000.
Sitting suspended from 6.15 to 8 p.m.
– Those proposals were regarded ais a first instalment of the Scullin Government’s financial policy. Opinions in the Labour party as to the degree to which credit expansion could take, place without endangering stability were almost as nebulous as they are to-day.
One member of that party in the House of Representatives said that the note issue could be inflated to £1,000,000,000 and Australia’s economic structure would still be safe.
– Mr. Theodore did not say that.
– I did not say that he did. I was particularly careful to say that the statement was made by a Labour member who is still in this Parliament.
– He was an irresponsible.
– I agree. I have the same opinion of another Labour member of the House of Representatives who declared that any one guilty of issuing a cheque should be sentenced to imprisonment for fourteen years. That statement may be found in Hansard. I agree that the honorable gentleman in question was irresponsible when he made that statement, and I hold the same view about some honorable senators opposite when they speak so airily about credit expansion. But one has only to listen to speeches in this chamber to learn the extent to which Labour senators differ ou this point. I believe that Senator Darcey has never expressed an opinion as to the limit which he considers should be placed upon credit expansion, but I am confident that he would go much further than some members of his paTty. Last week, Senator Cunningham, having in mind, no doubt, the possibility of using the credit, resources of the Commonwealth, declared that the production of Australia amounted, to £700,000,000 annually. I do not know how the honorable gentleman arrived at that figure. It is far in excess of the amount which I ascertained. He also sta ted that a scheme to stabilize the wheat industry could be financed by the Commonwealth Bank, by means of credit expansion, and then went on to say that it would be possible to apply the same principle to public works. Other honorable senators consider that credit should be expanded for the purpose of prosecuting the war. Throughout this debate I have listened very attentively to honorable senators opposite in an endeavour to learn how far they believe credit expansion can be taken without inflicting injury on the country’s economic structure.
So far, however, their opinions have differed so widely that I am still in the clouds.
I sincerely regret that at the time when it is most needed, Australia has not a government representative of all parties in this Parliament.
– The honorable senator need not shed any more crocodile tears over that.
– Poor Senator Ashley ! He cannot envisage the dispersion of little party groups in order to bring about a national government. Nothing is too small for the honorable senator’s mind. Whether Senator Ashley appreciates it or not, and whether I am shedding crocodile tears or not, the fact is that the best brains in this Parliament can be brought together only by forming a government from all parties represented in it. No particular party has a monopoly of the brain-power of the National Parliament. In this hour of need, when appeals are being made for the co-operation of all sections of the community, it is most regrettable that the responsible authority charged with the prosecution of the war is not fully representative of all parties.
Debate (on motion by Senator Arthur) adjourned.
– by leave - I give notice that to-morrow I shall move -
That the order of the day for the second reading of the Gold Tax Bill be restored te the notice-paper and. he made an order of the day for a later hour of the day.
– Senator Dein has 3aid that Senator Ashley is caught in a. party groove. The honorable gentleman has also expressed a desire to have a government representative of all parties in the Parliament for the duration of the war. But he lacks the very spirit of unity which he advocates. Last week, he voted for the application of the guillotine when a very important measure - the National Security Bill - was being discussed in this chamber. I was astounded at the rapidity with which that bill was passed through the Senate. As honorable senators will recall, within twenty minutes of iiic resumption of the debate, after the suspension of the sitting for supper, the guillotine was applied and the second reading was carried. An hour or two later, the bill had passed all stages. It may bc that the Government on that occasion followed the traditions that have been, built up in tins Parliament over a long period of years when the strength of the Labour Opposition was negligible; but to my mind the action taken was worthy only of Australian blackfellows who, when, they have had a meal, think only of going to sleep. The Government, by using the guillotine, curtailed discussion of a measure of the utmost importance, affecting the lives and liberties of the people.
– The honorable senator voted for it.
– I did so in an endeavour to meet the Government’s plea for unity during this period of strain.
I remind honorable senators of what happened at the end of the last war, and ask them to study the course of events to-day. I direct attention to a memorandum addressed by General Smuts, that statesman and philosopher of South Africa, to Mr. Lloyd George, then Prime Minister of Great Britain, on tho 3 2nd May, 1919. General Smuts decfared in that memorandum that the most important provisions of the Treaty of Versailles required alteration because the instrument of a violent peace had actually been brought about such as history had not often .=een executed. He added-
There will bc a terrible sobering up and disappointment when the peoples of the nations realize that wo arc concluding a Wilson peace and that wo are not keeping our promises made lief ore the whole, world, which is looking towards us in faith.
Perhaps the -most interesting paragraph of the memorandum is that which deals with Germany’s eastern frontier. In that paragraph, General Smuts expressed himself in the following terms: -
I am convinced that this improper enlarging of Poland’s territories will not only be overthrown by tho verdict of history but will represent a cardinal political mistake, which later history will avenge. New Poland will include millions of Gorman and Russian nationals and will om brace many districts that have belonged for many generations either to Germany or to Russia. It may be assumed as a certainty that both Germany and Russia will once more a.rise to bc great powers and that a .Poland caught between them can only continue to exist if they permit it to do so. How, in these circumstances, can we assume that Poland will not suffer in tlie end, even if it possessed qualities of government and administration which, as history has abundantly illustrated, it does not? Even now, at thi* moment of conference, the Poles are opposing U:e great powers. What is tq happen on some future occasion when, it maY be, the great powers are not united in their ideas? I believe we are erecting a house of cards. And in view of these and many other considerations. I would revise the frontiers or Poland as they are provisionally laid down in the treaty, leaving Upper Silesia and all other truly German areas to the Heidi. Also I won lit narrow down the boundaries of the Danzig Free City and instead of placing it under Polish sovereignty, as is suggested, would leave it. to German administration, under the League of .Nations. To my mind, the two cardinal political errors in this treaty are tho long occupation of the Rhine and the enlargement of Poland, which surpass all intentions that may have existed during the period of the hostilities. In these two mistakes lie hidden a wealth ot threats to the future peace of Europe and I would use all the emphasis at my command to have them altered before it is too lah1, lt is not yet too late to do this; doubtless the German delegates will contest these clauses energetically and may perhaps make it a, condition of their signing the treaty that their eastern frontiers in Silesia, East arid West. Prussia bc revised. [ should like to suggest that we meet them in this; that wo put forward their case ami give it the most careful consideration.
That memorandum condemned what proved to bc substantially the causes of the present conflict; yet it was ignored. The League of Nations was constituted with the intention of establishing a lasting peace as a fitting sequel to the war which was intended to end war. To-day, because of the greed of the class then ruling in the capitalistic nations, we arc involved in another tragic conflict. The Labour party in Australia has made a very definite declaration of policy from which it will -not depart - that the resources of Australia must be placed at the disposal of the British Empire and that the maximum of Australia’s manpower shall be the minimum of its resources for its ‘ own protection. We stand by that policy.
I now desire to make a suggestion- in connexion with the export of primary produce which, if adopted, might result in the saving of millions of pounds. I direct the attention of the Government, and particularly of honorable senators of the Country party, who claim to be specially privileged to represent country interests, to the Now Hampson process of suspended animation which can bo used in connexion with primary products. The process has been patented throughout the world, and full particulars of it can be obtained at the Patents Office, Canberra. The inventor claims that foodstuffs including meats, all kinds of vegetables and fruits cas be treated in such a way that the nutritive value is not impaired for months. I have inspected onions treated by this process and have found that after four years the nutritive and germinating value has not been affected in any way. Ham and bacon treated by this process are being handled by certain distributing firms in Sydney.
– Are hams and bacon treated in large sections?
– Yos. They are dipped in a solution which is used every day in public hospitals, awd which has been passed as suitable for treating foodstuffs by health authorities in all parts of the world. During the last war large quantities of meat and other foodstuffs had to be destroyed, and on one occasion diseased ox livers infected with hydatid and fluke were placed on a transport for consumption by members of the Australian Imperial Force. The avoidance of waste by using this process is of great importance. I shall cite a few experiments undertaken by Mr. Albert T. Hewish, an analyst associated with the Producers Co-operative Distributing Society in Sydney, who for fourteen years was a lecturer at the Sydney University on many subjects of scientific interest. He stated -
Experiment 2. - Cheese treated at the P.D.S. and Laboratory under the supervision of Mr. W. Hampson, 15th June, 193G.
Three Narooma cheese taken off cheese floor at age of six to seven weeks, showing definite mould infection on ends and sides where cheese were touching.
These cheese were immediately treated without first removing noticeable surface infection, and later returned to cheese floor. On examining samples to date, same have been found to Ik? in perfect condition, whilst the control cheese are definitely covered with mould.
After close examination of cheese treated, it is obvious, that the treatment hoa not only retarded further mould growth, but has definitely destroyed previous mould infection.
That report was published, in 1936,’ and was the first process known as the “ Hampson process “. The inventor has now improved his process to perfection and it is known at the present time as “ The New Hampson Process “. We read recently in the Sydney press that large quantities of bacon and ham will be required by the British Government, and that after purchase there is often great loss of weight. On this point the analyst stated -
A middle of bacon was treated with the preparation and held against an untreated sample.
After six weeks’ handling on the racks, both treated and untreated samples were weighed.
The. 7 lb. treated bacon weighed 0 lb. 5 o?… a loss of 11 oz. whilst the !) lb. untreated sample weighed 7) lb., a loss of lj lb.
The color of both samples of bacon did inn indicate any variation. Both samples are drying out rapidly.
A 12 lb. 2 oz. ham was held as a control against a Hi lb. treated ham.
After six weeks a test weight revealed that whilst the control ham’ had lost 14 ox., tintreated sample had lost 9 oz.
The color of both hams varied; the treated sample showing slightly the better color.
Mould could not be detected on either samples of hams or bacon. This may be dwt to the seasonable weather retarding growth oi mould.
In connexion with a further analytical test on eggs he said -
A test was made by dipping three eggs as against three control samples.
After five weeks one of the treated eggs was broken and. examined.
The most noticeable feature of the result was the effect of the solution on the skin or membranous tissue beneath the shell. This portion of the egg had apparently absorbed the solution, forming an elastic-like covering.
The samples will be kept for further observation.
In dealing with oranges his comment? are -
With the exception of a dozen oranges kepi as control, the remainder of a case were dipped, replaced in the case, and up to the present date have been under the care of Mr. Hinton.
Dealing with the treatment of tomatoe he stated -
Green tomatoes samples kept in laboratory until ripened, and then treated three to iii, seconds at a temperature of 102 degree* Fahrenheit.
Samples remained firm and red for 21 days and showed no sign of mould or rot and taste rather enhanced.
Tests were carried out on oranges by the Fruit-growers Federation of New SouthWales on 16th April, 1935, with the following results: -
H ead Office, Watson House, 11 Bligh Street,
Brickfield House, Room 410, 661 George Street, Sydney
April 16th, 1033
W.G. Hampson. . Esq.. 140 Church Street, St. Peters
It was with very great interest that I inspected the Valencia oranges and Gravenatein apples held by the Mun ici pal Cool Store since the 26th of Januaryl ast. I was particularly interested in the oranges owing to seeing them treatedby your process about the same date. Those that I took tomy home were keptfrom January 31st to April 2nd. and kept in perfect order lying on thekitchen dressier. They were cut and eaten on April 2nd, and I was surprised that the juice content and flavour should be unimpaired after such a period of exposure to atmospheric temperature.
The possibilities for oranges and apples kept for such a period are immense, and I will be glad to bring yourprocess under the notice of those in the trade who are likely to be interested.
– I understand that a syndicate is about to be formed, but I have been assured that if the Government so desires the process will be placed at its disposal so that primary products for export may be treated before shipment. I place the information at my disposal before the Government, because I believe that huge combines are controlling our meat supplies, and that if the Government does not secure the process it will be used by vested interests to exploit the people of Australia.
I now desire to mention a matter which affects the people of New SouthWales, on whose behalf I am speaking. I refer to the treatment of that State in connexion with the erection of aerodromes. About twelve months ago the Commonwealth Government was offered a steel tubular mill for use in the manufacture of arms and munitions, but the offer was refused. At a later date the same interests advised that they were prepared to establish in the Richmond district a factory for assembling aircraft. They secured a tract of country, three miles long by one mile wide, which is as level as a billiard- table, and on which suitable premises could be erected. Under direction from the Minister for Civil Aviation (Mr. Fairbairn) departmental experts in spected . the site and reported favorably upon it. Later, the persons interested engaged staff, two of whom came from overseas, who were signed up for periods ranging from two to live years, in the belief that work would be proceeded with immediately. In addition, 40 skilled aircraftsmen are expected to arrive in Australia in October next. British, Australian and American capital is to be employed. Mascot aerodrome, on which two aeroplanes were bogged recently and had to be pulled out with the assistance of tractors, is the only landing ground in the vicinity of Sydney. Should large planes, capable of carrying as many as 40 passengers, be arriving in Australia in the near future, no aerodrome capable of accommodating them will be available. The Kingsford Smith aerodrome is obsolete. Behind the decision of the Minister for Defence (Mr. Street) in turning down this proposition I detect the influence of certain members of the Advisory Panel on Industrial Organization. In order that no doubt shall remain in the minds of honorable senators as to the Minister’s refusal I quote the following extract from hia letter to the syndicate: -
I notice your letter mentions the fact that you propose to establish a civil aerodrome on the land acquired, and in this connexion I have to inform you that the Defence Depart ment would have grave objections to the establishment of a civil airport within 2 miles of the Air Force station at Richmond.
I point out that this concern would have established its aerodrome at least 4 miles as the crow flies from the Air Force station at Richmond; the land commences at a point opposite the gates of the Richmond racecourse. The attitude of the Minister for Defence is difficult to understand, in view of the fact that the Minister for Civil Aviation (Mr. Fairbairn) had offered every assistance to this company in order to enable it to go ahead with its project. In November last, the chief of Civil Aviation in the United States of America, Mr. Mitchell, visited Australia, and on landing at Mascot was astonished to find that the main civil aerodrome in Sydney was of such a poor standard ; he suggested that a more suitable area of land should be acquired for the establishment of an up-to-date aerodrome, on which large aircraft could land. The site held by this company could easily have been used for that purpose, and the tubular steel factory which it proposed to erect there could have been utilized for the establishment of an annexe for the manufacture of munitions. As . said before, I can detect behind the rejection of this company’s offer the influence of certain members of the Advisory Panel on Industrial Organization. For instance, we know that the Commonwealth Aircraft Corporation alFisherman’s Bend is manufacturing aircraft for the Government, and wo find that one - the general manager of the Broken Hill Proprietary Company Limited, Mr. Essington Lewis - and another, Sir Colin Fraser, who has extensive interests in. Broken Hill metals, are members of the Advisory Panel on Industrial Organization, and that two of these gentlemen are directors of the Commonwealth Aircraft Corporation. Also on the advisory panel is to be found Sir Alexander Stewart; he, too, has large interests in Broken Hill. It is obvious that that company wishes to secure h monopoly of aircraft manufacture in this country. Apparently, notwithstanding the fact that £500,000 of British, American and Australian capital was available for investment in the proposition to which I refer, the offer made by that concern to the Government was rejected because it did not suit the interests of big business, which this Government represents.
I draw attention to the lamentable inactivity on the part of the Government in educating the people in preparation for air raids, including gas attacks’. The population throughout Now South Wales is totally ignorant of what precautions should be taken against such attacks. Certainly air wardens have been, appointed, but very little has been done in educating the people in air raid precautions. Iti order that expert information on this matter may be placed on record and become available for the enlightenment of the general public, I quote the following report which was made by the Air Raids Precautions SubCommittee on the protection of the public from aerial attack, and presented at a
Peace Conference held in. the Teachers Federation Building, Sydney, from the 21st to the 23rd July last-
Gas warfare lias received great publicity and provides scope for horrifying descriptions oi what could happen in air raids. Whilst thorough education of the public in the essential characteristics of gas warfare is desirable, over-emphasis is both misleading and dangerous. Twu kind* of gases could be dropped in bombs, non-persistent or persistent. Non-persistent gases (chlorine, phosgene) are deadly in small concentration. One part of phosgene in 20,000 of air is fatal in five minutes. They act on the lungs and produce death analogous to drowning. Non-persistent gases blow away easily and disperse quickly in warm weather. It should always be possible to move quickly to a gas-free area even if no accommodation in gas-proofed shelters is available.
Persistent gases are really liquids which would he sprayed over an area about 100 yards across by the bursting of a bomb. Mustard liquid and lewisite arc thu commonest persistent gases.
In a test recoil tl,l conducted to ascertain the effects of mustard gas, a brick was placed on a man’s arm and a drop of gas penetrated the brick and left on the arm a burn the size of a 2s. piece within twenty minutes. After another twenty minutes the burn was 4 inches in diameter, and twenty minutes later still it bad spread from the elbow to the wrist. A victim of this gas would be practically immobilized within a very short time. The report, continues -
Rain clears away lewisite but mustard may stay for days unless all surfaces aru cleaned by appropriate methods.
A proposal was made that in the event of an air raid, the people of Sydney should shelter in the tunnels of the underground railway. Mustard gas has a specific gravity heavier than air, and should a gas attack be made on Sydney, some of the gas would most likely find its way into the tunnels with disastrous consequences to the sheltering population.- The Government, however, still fails to take any steps to educate the people in preparation for such attacks. The report goes on -
Their vapours affect tho lungs in the same way as chlorine, but far more slowly and rarely fatally. The liquid soaks through clothes or leather and causes blisters and sores on the skin which are painful but almost never fatal. They are chiefly used to make small areas temporarily uninhabitable.
So far this Government has taken no steps in connexion with the manufacture of gas masks for the general public, although this work could be immediately undertaken by a factory already established at Five Dock, Sydney. The report continues -
Gas masks, if proven efficient beforehand by testing, will protect against chlorine, etc., or mustard vapour fora reasonable time. The English civilian respirators are too uncertain in their fitting to be thoroughly reliable. Properly constructed bombproof shelters can be gasproofed and supplied with filtered air at a slight additional cost. No new deadly gases are to be expected and such stories should be exposed as untrue and irresponsible.
The sub-committee made the following recommendations -
That the International Peace Campaign should endeavour to promote activity in the undermentioned directions : -
1 ) Systematic collection of information relating to defence and protection against aerial attack from local and especially overseas sources. Such information to be printed and distributed to every householder in the Commonwealth to be available for workers on air raid precautions.
(a) The investigation by qualified persons of the technical possibilities of aerial bomb and shell attack on Australian cities.
Investigation and development of schemes for protection in industrial and residential areas; obtaining the co-operation of professionally qualified persons such as engineers, architects, surveyors, doctors, etc.
Issue of pamphletsand arrangement of lectures for the education of the public independently of governmental schemes.
Critical observation of all government schemes and official statements and the use of available publicity to expose any fallacies in such schemes or statements.
Co-operation with bodies engaged in similar work both in Australia and overseas.
In this connexion the Science Congress which sat in Canberra early this year passed the following resolution -
That this congress, whilst affirming its horror of war and especially of the use in war of thebombing aeroplane, recognizes the urgent need for the development of an independent public voice in regard to the question of defence of the public against aerial attack to ensure that, first, official action shall be taken on the lines known to be appropriate for the most efficient protection of the population, and, secondly, that any action so taken by the authorities shall be consistent with democratic practice.
Congress, in adopting the report submitted on this question, further resolves to endorse the recommendations based thereon and requests the International Peace Campaign Executive to endeavour to implement these suggestions as soon as possible so that the objectives of the first part of this resolution may be thu more efficiently accomplished.
In view of these facts, I hope that the Government will awaken to its responsibility in this matter. It has a duty to relieve the doubts of the public in regard to the danger of air raids.
In the budget debate twelve months ago the Leader of the Opposition (Senator Collings) drew the attention of the Government to housing conditions at the Causeway and Molonglo and urged that steps be taken to effect improvements. Recently I visited the Causeway and found evidence to substantiate my leader’s allegations. I do not know whether it is of much use for these people to complain to the Department of the Interior about their dwellings, butI take this opportunity to place some facts before the Minister (Senator Foll). He will recall that recently Canberra suffered an influenza epidemic which proved to be particularly virulent in these two areas. I. was informed by Dr. Nott that apertures from one-eighth of an inch to five-eighths of an inch wide existed in many of the cubicles in this area. The buildings are so draughty that, in the opinion of Dr. Nott, the health of the occupants is endangered. In wet weather the rain drips through the roof and saturates the floors. The immediate improvement of the sanitary arrangements is essential.
At the Causeway mess, where there are 60 or 70 men, only four baths are provided, and these have practically rusted away. The electric wiring is in a dangerous condition, the insulation being badly worn. Some of the wires should be replaced at the earliest possible moment. The locks on all doors are practically worn out. In the recreationroom the floor boards have practically rotted away, and should be replaced by new timber. The cubicles require fumigation, as the tracks of bugs can plainly be seen. These matters have been reported to the authorities, but no notice has been taken of the requests. The only improvement carried out is the repair of a slight sewer defect. Since the establishment of the mess at the Causeway, tlie electric light bill has not exceeded £27 until the last account came to hand, when the charge was £56, showing clearly that a leakage has occurred for which the occupants are not responsible. Men on the basic wage should not be called upon to pay increased charges for electric light because of defects which the local authorities have failed to remedy.
– The Opposition has been assured by Senator Dein that he desires some of the best brains of the Labour party to be utilized in the formation of a national government.
– But the Opposition lacks courage.
– It has had the courage to tell the Government that it can do a better job in the interests of the people by remaining in opposition. I advise the honorable senator to leave the Labour party to its own destiny, for in that way he would be doing a better service to the Government that he supports than by directing his attention to what he regards as the duties of honorable senators on this side of the chamber. He even went so far as to say that the present Executive Council is not the best that could be obtained,- and that it would be strengthened by the transference to it of a selected few members from the Opposition benches. I entirely agree with that remark and as a matter of fact that has been the policy of the party, of which Senator Dein is a member. I draw the attention of the honorable senator to a loading article published in the Sydney Morning Herald of Thursday, the 14th September last, which stated, inter alia -
The outward complacency of a Federal Government actually engaged in carrying on war is beginning to arouse more than astonishment among the Australian public. It wa3 a fault in the late Lyons Ministry that the imminent threat of war exhibited Ministers as unable to lift themselves out of routine administration - an exhibition made the more painful because of repeated exhortations to the people to prepare themselves “while there is yet time “. Mr. Menzies took office declaring that his Government, appreciating the gravity of the emergency “ meant business “. The emergency has now developed, and there appears to be a real danger that Mr. Menzies may be construed to mean, according to his recent statement, no more than “ business as usual “. As an injunction to small traders, this admonition appears fair enough; but as
JM advertisement of the Government’s own disposition it can only be regarded as calamitous. . .
The continuing disputes in Canberra over whether the TJ.A..P. and the U.C.P. should resume their long-familiar coalition are sadly out of keeping with any spirit of national unity. . . .
It has been left to the Opposition leader (Mr. Curtin), to make the one imaginative suggestion with his proposal to offer to Great Britain immediately a gift of £1,000,000 worth of foodstuffs. That is at least a response, both courteous and generous, to Britain’s offer to buy up exportable surpluses of our wool and farm produce.
– How much per capita of the people of the Old Country would that gift amount to?
– We have to consider not the amount so much as the spirit of the constructive offer that was made.
– It is less than 6d.
– Even so, any offer would be better than none at all. Senator Dein alleged that an honorable member in the House of Representatives had said that a fiduciary note issue could be extended to £1,000,000,000. We do not subscribe to that idea; at the same time I remind Senator Dein that since the war Britain has increased its fiduciary note issue to £5S0,000,000.
– I do not condemn the principle of expansion of credit, but I should like to know what limit the Labour party would fix?
– If my party were in power at the present time, it would be in a position to determine that. The honorable senator also complained about the borrowings of Australian governments and suggested that Labour governments were responsible for most of the new debt.
– I said that all governments were responsible, and that Labour governments were great offenders in that regard.
– I remind the honorable senator that there has been no Labour government in office in this Parliament for the last 25 years, with the exception of the brief period when Mr. Scullin was Prime Minister.
– Most of the debts have been incurred in respect of State undertakings.
– The records show that, in States where Labour governments have been in office for lengthy periods, the borrowings have been smaller than in those States where governments of the same political colour as that of Senator Dein have been in power.
– I criticized all parties.
– But the honorable senator suggested that the Labour party was responsible for the greater portion of the loan indebtedness, and, when I challenged him with regard to the position in the federal sphere, he claimed to have been referring chiefly to the borrowings of State Labour governments. The statistics do not bear out his argument.
For once I find myself in agreement with Senator Wilson, and I hope that his remarks with regard to the serious position of the wheat industry will be supported. The Government has failed in its duty to the wheat-growers of Australia and it should now avail itself of the opportunity presented to stabilize the industry. Whether Great Britain buys the whole of the Australian surplus of wheat, or only a portion of it, the Government should take immediate steps to stabilize the industry. From 1927 to 1931, the world’s net export of wheat was S1S,000,000 bushels. Between 1934 and 193S the export fell to 550,000,000 bushels,, and it is expected that this vear there will be a further reduction to 500,000,000 bushels. That justifies the statement that the fall of the price of wheat is due to the fact that countries which were formerly importers of wheat are now producing about 50 per cent, of the world’s wheat. During the last few years importing countries have increased their production by 430,000,000 bushels, whilst the exporting countries have increased their wheat yield by 1,000,000,000 bushels. Upon the governments rests the responsibility of meeting that situation.
I desire now to make a comparison between Western Australia and Victoria in the matter of wheat production. Wheat represents 13.9 per cent, of the total yield of primary products in Western Australia, compared with 5.6 per cent, in Victoria. The factory output per capita of the population in Western Australia was £17.59, compared with £31.70 in Victoria. The wheat industry of Western Australia has suffered from a number of causes. During recent years, a large area of land on which wheat was formerly grown has gone out of production, whilst the number of wheat-growers has fallen from 10,970 in 1931 to about 9,000 this year. Compared with 1931 the area sown
Avith wheat last year showed a decrease of 543,979 acres. The Commonwealth Government has the responsibility of finding a proper basis for the stabilization of wheat prices. In this connexion I agree with the stand taken by Mr. Dunstan, the Premier of Victoria. The Labour Government of Western Australia offered to find a portion of the money required for the stabilization of wheat prices, but the refusal of Victoria to co-operate has meant that the scheme has been dropped. There is now a splendid opportunity to stabilize the industry, but I repeat that the responsibility lies with the Commonwealth Government, rather than with the governments of the States. I base my arguments upon the assistance that has been given by the Labour Government of Western Australia to its primary industries during the last four years. The following table shows what that State did for its primary producers during the four years ended the 31«t December, 1937 -
– All of those are responsibilities of the State.
– I do not question that. The State has met its responsibilities. Mow that the wheat industry is in difficulties, the Commonwealth Government says that the responsibility for assisting wheat-growers lies with the States. I am endeavouring to convince the honorable senator of what the State governments have already done for the primary producers within their borders.
– The Commonwealth has offered to assist.
– Yes, but only to the amount of £2,000,000. Senator Johnston took exception to the States being called upon to bear any of the costs in 1931, but he agrees with that policy to-day. The Premiers Conference failed, not because of the difficulty of pegging production, but because the Commonwealth Government would not accept the financial responsibility associated with stabilization.
– Have not attempts been made to grow wheat in unsuitable areas?
– I shall deal with that point presently. In order to assist settlers the following concessions have been granted -
The State Government has done its part for the primary producers. That times f.28T have changed will be seen from the following extract from the West Australian of the 29th June, 1939:-
To consider the position created by absence of any definite governmental decision in connexion with plans for the stabilization of the price of wheat, a special conference was held yesterday between the wheat executive of tha Primary Producers’ Association and members of the Federal and State Country parties.
Among those present were two members of this Parliament - Senator Johnston and Mr. Prowse. The newspaper report continued -
The conference met at 11 a.m. and, with an adjournment for lunch, lasted until almost i) p.m.; and at its conclusion it was stated that the following resolution had been passed: -
In view of the Prime Minister’s statement of May 31 last, that the Federal Government intends to formulate a scheme to assist the wheat industry in ample time before next harvest, this meeting of the wheat executive, Primary Producers’ Association of W.A., and Country Party (Federal and State) members of Parliament (a) expresses its keen disappointment that the meetings of the Loan Council and the Premier’s Conference should have terminated apparently without making provision for the finance necessary to effect stabilization of the wheat industry; (h) affirms that, it cannot agree to fi continuance of the irritating delays previously associated with assistance given to the wheat industry, when the nature of the assistance was not determined until harvest operations were due or had already commenced, and under which payments were strung out over the succeeding 12 months without any definite idea of what the total payments would amount to; and, further, this meeting asks the Prime Minister to pledge his Government to take all measures (financial and legislative) that will be necessary to effect stabilization of the wheat industry before the end of September next.
– That was a very good resolution.
– It does not end there, for the report continued -
Furthermore, we urge upon the State Government that a sufficient portion of the loan money allocated to this State by the Loan Council be apportioned to the fund required for provision of a stabilized price for the coming harvest.
That indicates that the Primary Producers’ Association was prepared to commit the State Government to its proportion.
– Mr. Willcock agreed to do so.
– Not before the resolution was carried. Mr. Willcock agreed with it, but he acted under duress, as Senator Johnston knows.
– That is not very complimentary to the Premier of the State.
– He believed that “ half a loaf is better than no bread “ ; he preferred that the wheat-grower should get something. I agree with Senator Wilson that the Government should take immediate steps to establish the price of wheat forthe next harvest, but I am rather surprised, in view of the facts disclosed, that Senator Johnston was a party to the decision to ask the State Government to make a substantial contribution to the scheme for the stabilization of wheat prices.In June of this year, the Premier, Mr. Willcock, contended that it was unfair to expect the State Government to entertain the proposal, and on the 13th July, a month later, Senator Johnston, in an interview in the West Australian made reference to a statement issued by Mr. Archie Cameron, now the Leader of the Country party in this Parliament. Senator Johnston’s remarks should not be allowed to go unchallenged, because they related to action which had been taken in this chamber in 1931, in connexion with the Scullin Government’s proposal to stabilize the price of wheat. Many honorable senators will recall that incident. The bill was carried through the House of Representatives, but was defeated in the Senate, with the help of Senator Johnston.
– That proposal contained a provision requiring the States to hear one-half of the cost.
– I repeat that the bill was passed by the House of Representatives, but when it came to this chamber. Senator Johnston voted against it.
– Certainly I did, at the request of the Government of Western Australia, which informed me that it. was unable to make the contribution required by the Scullin Government.
– My point is that if, in Senator Johnston’s view, it was the responsibility of the Commonwealth Government in 1931 to bear the whole of the cost of any scheme for the stabilization of wheat prices, it is the responsibility of the Commonwealth Government to-day, though I admit there may bc some significance in the fact that, whereas in 1931, a Labour government was in power in the Commonwealth anda Nationalist government in Western Australia, the situation is reversed to-day, there being a Labour government in Western Australia and a United Australia party government in the Commonwealth. The newspaper report of the interview with Senator Johnston states-
Senator E. B. Johnston referred yesterday to a statement made by Mr. A. G. Cameron, M.H.R., in Adelaide last week, that there was a tendency in Queensland, New South Wales and Western Australia to follow in federal politics the lead given by tho Victorian Country party in State politics. “I have yet to learn that Mr. Cameron if entitled to speak for the West Australian Federal Country party- he evidently was entitled to speak for it and does so to-day - the members of which consistently supported the formation and work of both the Bruce-Page and Lyons-Page governments, although we differed with their tariff policy “, said Senator Johnston. “ Our efforts to attain a saner tariff policy were always defeated, especially in the Senate, by the votes of the Labour high protectionists “.
– That is true.
– Many of the tariff items to which the honorable gentleman now objects were introduced by governments of which he has been a supporter.
– Nevertheless, those tariff items were carried in opposition to the wishes of Country party members.
– Senator Johnston is further reported as saying - “ Contrary to Mr. Cameron’s statement, the constitution of the West Australian Primary Producers’ Association was specially altered to provide the machinery whereby the policy of the Federal Country party might be considered by the Country party organizations of all States meeting together as a federal body with a view to the maintenance of stable government, either by means of coalition or otherwise as circumstances demand. “ It is expected that a meeting of the council ofthe Australian Country Party Association will be held early in August, when the question of co-operation with the Menzies Government will come up for consideration. That such co-operation did not continue when Mr. Menzies was elected Leader of the United Australia party is the responsibility of Sir Earle Page and his Country party Ministers, including Mr. Cameron. I said then, and repeat, that the policy of the Federal Country party should be measures, not mcn. I said then, and repeat, that the Menzies Government is entitled, on thu pronouncements of its leader, to fair and generous support at the hands of the Federal Country party. “ Mr. Menzies’ speeches have held out hopes of assistance to the Australian wheat-grower, and I am specially pleased with his statement in Adelaide that the difficulties of assisting the wheat industry in its present position arc not insurmountable, and that the Government’s decision in the matter will be announced next, month. In this connexion, it is rather disheartening to learn the attitude of Mr. Dunstan, the Premier of Victoria, to the proposals for stabilization of the industry on lines supported by every other Australian government.
– Mr. Dunstan has been in Canberra since that statement was published.
– Nevertheless, Mr. Dunstan’s views on this subject were well known long before he attended the conference of Commonwealth and State Ministers in Canberra. He has always declared that the Commonwealth should be responsible for all expenditure in connexion with any scheme to stabilize the price of wheat.
– We have always said that it was the responsibility of the Commonwealth Government.
– But the honorable senator has changed his ground since 1931 and now says that the States should find part of the amount. I am emphasizing that, and I am endeavouring to show how difficult it is for the Government of Western Australia to meet the interest charge on over £8,000,000 which has been written off as an aid to necessitous farmers. The interest bill per head of population is higher in Western Australia than in any other State. I repeat that, if it was considered to be the responsibility of the Commonwealth Government in 1931 to find the money for the stabilization of wheat prices, when a scheme was introduced by the Scullin Government, it is the responsibility of the present Government, and I again remind the Senate that representations were made to Country party senators from Western Australia to oppose the Scullin Government’s proposal.
– We voted for the proposal to pay 3s. a bushel, but the Scullin government did not pay a penny of the bounty.
– If Senator Johnston and his Country party colleagues had voted for the Scullin Government’s proposal to pay 4s. a bushel, the bill would have been passed and wheatfarmers would have been paid that amount.
– The Scullin Government did not pay the promised bounty of 3s.; it left that as a legacy to the first Lyons Government.
– I now direct attention to the constitution of the Australian Wheat Board appointed recently to control the receipt, storage and marketing of wheat for local requirements and for export. I regret very much that the Government has not made more representative appointments. Mr. Clive McPherson is the Commonwealth Government’s nominee. Among the other members are Mr. H. Gr. Darling, of John Darling and Son, Mr. J. S. Cameron, representing Louis Dreyfus and Company, and Mr. J. S. Teasdale, representing the Western Australian Wheat Pool. I am not satisfied with the appointments. If Mr. Teasdale’s views are in conformity with a statement which he made recently, as president of the Primary Producers Association, namely, that wheat could be grown for 2s. a bushel, small wheatgrowers will not regard him as a representative of the industry. I am opposed to the direct representation on the board of some of the large wheat-buying firms. During the last war John Darling and Son received in commissions from the Commonwealth Government £74,000 in 1915-16, £78,000 in 1916-17, and £23,000 in 1917-18. In the same years Dreyfus and Company were paid £40,000, £57,000 and £16,000 respectively. No one has a greater knowledge of the wheat-growing industry than have those actually engaged in production.
– Mr. Teasdale is a pioneer wheat-grower and knows the conditions in every district.
– Is he conversant with the conditions under which some of the wheat-growers carry on production?
– With every one of them.
– If that be so it is difficult to understand why he should say that wheat can be produced at, 2s. a bushel. If he is still of that opinion he is not entitled to represent the wheatgrowers on the Australian Wheat Board. In order that the interests of the wheatgrowers may be protected, a person actually engaged in wheat-production should be appointed.
– Who would the honorable senator nominate?
– I have quite an open mind on the matter, and would leave that to the organization concerned; but if a wheat-grower were appointed the interest of the wheat-growers, and particularly those engaged in producing in outback areas, would be safeguarded.
– The chairman of the Australian Wheat-growers Federation is the proper person to appoint.
– That may be the opinion of the honorable senator, but I believe that more than one conversant with the hardships experienced by some producers should be appointed to the board.
About twenty years ago the Labour party dealt with the nationalization of banking mentioned by Senator Dein.
– I did not mention the nationalization of banking.
– The honorable senator mentioned a fiduciary note issue. Surely he does not suggest that in an emergency the credit of the nation cannot be expanded. For the enlightenment of Senator Dein I submit these facts: -
More than twenty years ago the Labour party set out to nationalize banking, to bring banking and credit under national instead of private control. To. that end the Commonwealth Bank was established by the Fisher Government. Starting without capital it soon became a live competitor with the private banks and, by its handling of Australia’s war loan flotations, saved the people of Australia £6,000,000 in flotation expenses alone. The direct profits of the Commonwealth Bank and note issue, now exceeding £25,000,000, arc substantial gains to all the people which otherwise would have gone to shareholders of private banks. Fully onethird of the dividends from private banks operating in Australia is paid to overseas shareholders. It is not profits, however, that a nationally-owned bank should seek, but the general welfare of the people. Banks control credit, which is the life-blood of all industries. Their power to expand or contract credit makes them overlords of industry and trade and, in difficult times, even gives them control over the activities of governments. If that power were exercised for the public wellbeing, without first thought of profits or dividends, all would be well. But that is too much to expect from profit-making companies. It is suggested by unscrupulous political opponents, and hy ill-informed critics, that the Labour party would confiscate the banks, seize the deposits nml generally commit wanton acts of robbery and pillage. Such allegations are false. They arc wicked misrepresentations of an honest party composed of honorable men. That persons occupying high positions in the community can degrade themselves to uttering such mendacities is beyond the comprehension of true Australians.
– Who is the authority whom the honorable senator is citing?
– I am quoting from the policy speech of the’ right honorable member for Yarra’ (Mr. Scullin) in 1934, which I am sure the honorable senator has not read, because had he done so he would not have said that the Labour party believes in issuing fiduciary notes to the value of £1,000,000,000.
– I shall give to the honorable senator to-morrow the name of the Labour member who made that statement.
– I am referring to some interesting facts contained in a speech made by a gentleman who has a better knowledge of finance than has the honorable senator. The statements of Mr. Scullin answer fully those honorable senators opposite who say that we believe in an inflation of credit, which results in an increase of prices. We do not support such a policy.
– I support the budget proposals now before the Senate and congratulate the Menzies Government on its first budget, which, of course, was prepared before the clash of arms in Europe. The Empire’s fight for freedom and international justice, in which Australia’s fortunes are linked with those of Great Britain, must necessarily involve a comprehensive revision of the financial programme foi- the current financial year. Every section of the community must share the sacrifice, and accept its part of the responsibility of providing for our defence.
One proposal embodied in the budget must involve a sacrifice by every one. I refer to the increase of the sales tux from 5 per cent, to 6 per cent., which will have a general application, because the tax is added to the retail cost of a very wide range of goods. We all hoped that this t.ax would sooner or later be repealed, but it is now evident that it is likely to remain on the statute-book for some considerable time. I have received many complaints, particularly from small traders, concerning the irritating and pin-pricking manner in which the act is administered, and I trust that the Government will review the system at present in operation in order to relieve the trading community of many of tlie inconveniences to which it now has to submit.
The Treasurer (Mr. Menzies) outlined in his budget speech the negotiations which were conducted at the conference of Commonwealth and State Ministers held in Melbourne with respect to wheat. What then happened is now of not much value owing to the outbreak of war. I am in accord with the proposals then put forward by the Commonwealth Government to provide, a stabilization scheme, which should not have been brushed aside lightly. While the power of reduction or control of production remains in the hands of the States, it is impossible for the Commonwealth Government, without the consent of all States, to introduce legislation to establish a stabilization scheme. Senator Fraser will remember that; some time before the conference the Premier of Victoria (Mr. Dunstan) objected very strongly to the Commonwealth Government being represented at an international wheat conference at which the subject; of control of production was to be reviewed. At the conference of Commonwealth and State Ministers it was suggested that the States should provide .£1,500,000 towards a stabilized price, but the conditions demanded by Mr. Dunstan were probably dictated by the Labour party in the Victorian Parliament. While Mr. Dunstan opposed a restriction of production - that was before the outbreak of war - it was quite impossible for the Commonwealth Government to carry out a scheme of stabilization. However, the Government now proposes to take some action in the interests of the wheat industry in the near future. 1 hope that in any plan which it has in mind, its main objective will be the stabilization of the industry. Without exception our wheat-growers are willing to bear their fair share of sacrifices rendered necessary iti the present crisis. At the same time, however, they ask to be placed on an equal footing with other industries.
The Government must do everything possible to ensure that this country will bc adequately defended. 1 congratulate Senator Brand on his speech on defence. In the present crisis universal military training is essential in the interests, not only of the country but also of the young men who may be called upon to serve in a theatre of war. Universal training, as we understand it, cannot be regarded as militarism.
– I propose to deal with some matters which appear to disturb Senator Dein. In -every speech which he has made during this session of Parliament the honorable- senator has attacked the Labour party for its refusal to enter a composite government. It seems rather strange that no other honorable senator opposite has dealt with this matter in the same strain as Senator Dein. Apparently, the honorable senator’s colleagues are satisfied that the Labour party is the best judge of how it can do the most good for the country and itself. One could not be blind to the activities which have characterized the negotiations be ween the ministerial and the Country parties for the formation of a coalition government, and in this respect it can be truly said that tlie Labour party alone has been the only party to retain its dignity. The correspondence which passed between the Prime Minister (Mr. Menzies) and the ex-Leader of the Country party (Sir Earle Page) makes interesting reading. In my view the Prime Minister at no stage genuinely wished to form a composite government. Sir Earle Page has done many things during his political career of which T do not approve, but it is noteworthy that when he was informed by the Prime Minister that he was a stumbling block to a fusion of the Country party and the United Australia party he did the manly thing and resigned the leadership of his party in order to leave the way clear for the formation of a coalition government. However, the election of his successor was not followed by the formation of a composite government. We found that Mr. Menzies insisted on terms to which the Country party was not prepared to agree - a fact which has borne out my conviction that at no stage of the negotiations was Mr. Menzies genuinely desirous that such a government should be formed. Having tasted the plums of office, visualizing the glories of a war-time Prime Minister, and possessing the full support of Ministers to whom he gave a portfolio in return for their votes for him as Leader of the United Australia party, Mr. Menzies, I feel sure, is the last person who wishes to see any representatives of the Country party included in the Ministry. However, he has not failed to capitalize a certain line of propaganda. He has declared, for instance, that the Government in this time of crisis should consist of the best brains of all parties in order that the greatest good might be done in the interests of the country. The attitude of the Labour party on this matter has been explained by our leaders and by many other members of the party in this chamber and in the House of Representatives. Any one who has had a fair measure of political experience is aware of the pitfalls which confront an Opposition party when once it joins in a composite government. Let us see what would happen were the Labour party to accept the Prime Minister’s invitation to join in the formation of a national government. Possibly two or three members of the Labour party would be selected for ministerial appointments, but they would be in a minority in the Cabinet. Mr. Menzies would ‘remain Prime Minister despite the fact that he won the leadership of the United Australia party by a bare majority of the votes of a party, which itself, is in a minority in this Parliament.
– Members of the United Australia party are behind the Prime Minister 100 per cent.
– If another election was held to-morrow for the leadership of the United Australia party the number of members of that party who would vote against Mr Menzies would be surprising, because many who are not members of the Cabinet to-day would like to be Ministers to-morrow, and if they could secure preferment by supporting a rival candidate they would do so. The point I wish to emphasize, however, is that three or four representatives of the Labour party in a composite government would be outvoted in the Cabinet on any proposal which conflicted with Labour principles. However, they would be bound by the decision of the composite Cabinet, unless, of course, they were prepared to resign their portfolios. However, we rarely find in polities a man of such extraordinary character as to take such a course. Once a man tastes the fruits of office it is very hard to get him out of his own volition. In such circumstances, because of the fact that the Labour party was represented in the Cabinet, the decision of that body would go forth to the people as having the endorsement of the Labour party, which would thereby be placed in a very awkward predicament. Those who have studied political history know that such developments arc more than possible when composite governments are formed. British political history during the last few years provides an example of that. All of us are familiar with the career of the late Mr. Ramsay MacDonald. As Prime Minister he was nothing more than a figurehead, because he had to do what he was told by anti-Labour Ministers who formed a majority in his Cabinet. His experience provides an illustration of the consequences which follow upon the formation of a composite ministry. I commend Mr. Menzies for the able way in which he is keeping his party intact. J believe that he will do far better without the help of the Country party. Indeed,, in his letter to Sir Earle Page in the recent negotiations, he pointed out that at the present his Cabinet was 100 per cent, loyal to him, and that he had no desire to introduce any warring elements which would disturb that loyalty. ‘ I believe that he will accomplish more with a strictly United Australia party Ministry than if he included representatives of the Country party in his Cabinet. But why does he not come out and say that instead of disseminating all this palaver about the need for a composite government which would be representative of the best brains of all parties in Parliament? I commend to Senator Dein the views expressed in the Sydney Morning Herald, the bible of. the United Australia party in Kew South Wales, upon the refusal of the Labour party to join in the formation of a composite government. I congratulate honorable senators on their good sense in refraining from following Senator Dein’s criticism nf the Labour party in this respect. I believe that they appreciate our attitude a.< an Opposition and commend us for the stand which we have taken. Mr. Menzies has declared that he needs the help of an unmuzzled Opposition. What the Sydney Morning Herald of the 20th September had to say on this matter is different from the statement by Senator Dein.. That journal remarked -
The industrial and political wings of Labour lui ve united in a common stand for tlie defence of Australia and the integrity of the British Commonwealth of Nations. . . . Last week Mr. Curtin announced that Labour, believing that the nation’s cause is .just, was behind the Commonwealth Government in its efforts to defend Australia. . . . Such co-operation red not bc affected by Labour’s decision to retain its political identity in Parliament rather than join in a national war ministry. . Labour’s declaration is impeccable
Those remarks may be regarded as coming from the mouthpiece of the United Australia party. I believe that I have the support of my party in the view that 1 have expressed as to why it did not assist in the formation of a national government.
Senator James Mc.Lach.lan referred to the ship-building industry of Australia, and T thank him for handing to me a copy of the magazine Harbour, showing lbc extraordinary difficulty experienced by the industry because of ship-building costs in this country. The honorable senator went on to say that he would be prepared to do his part in strangling the local industry. As far as I can gather, the figures referred to in Harbour are reasonably accurate; but, in view of certain facts associated with, ship-building in Australia, the figures do not quite convey the actual position. They were produced by Mr. Sturrock, secretary of the North Coast Steamship Company, who compared Austraiian 3hip-building costs willi those of the United Kingdom. Nobody would be likely to suggest that Mr. Sturrock would desire to promote the welfare of the Australian industry, having regard to the number of vessels that his company has purchased overseas. I believe that his object would be to paint as black a picture as possible of the local industry. One. of the main reasons for the fact that ship-building costs have been greater in Australia than in Britain is that in the early years of the industry blue-prints had to be imported from England at very great cost. I. understand also that we had no marine architects in this country. This fact, together with the profiteering practised in the supply of blue-prints, partly accounted for the high cost of construction in Australia. The British authorities charged enormous sums for the right to use the plans supplied. As to the Ferndale, it should be remembered that the cost of the vessel was materially increased because provision had to be made for certain passenger accommodation, whereas the British-built vessels with which it was compared would have no accommodation for passengers. Let us consider why there was such an extraordinary difference between the price of construction in Australia and in England. Senator James McLachlan was not quite accurate in giving reasons why the Australian industry has languished. The actual harm was done in 1920. In tabling a tariff schedule on the 24th March of that year, the then Minister for Trade and Customs in the Hughes Government, now Sir Walter Massy-Greene, said -
This tariff will protect industries born during the war, will encourage others that are desirable, and will diversify and extend existing ones. . . . Honorable members will notice a number of items in the schedule in which provision is made for a deferred duty - that is, a duty that will become operative from some date in the future. . . .
There were 22 of these items. Item 425 b provided that in respect of “ vessels n.e.i. trading intrastate or interstate, or otherwise employed in Australian waters for any continuous period of three months “, the British preferential duty should be 25 per cent, ad valorem, and the general rate 35 per cent, ad valorem; but the tariff was not to come into operation until the 1st January, 1923. The holding back of the duty until 1923 had a remarkable effect, as a rush was made to get in free of duty many vessels of over 500 tons gross register. This completely disorganized the local shipbuilding yards as the transport requirements were for some years afterwards fully satisfied. The following figures relating to the five-year period from 1919-20 to 3923-24. are most interesting: -
As soon as this tariff was made operative, firms like the Broken Hill Proprietary Company Limited, W. R. Carpenter & Company, the North-Coast Steamship Company .Limited, and the Colonial Sugar Refining Company Limited, rushed in, and in three years vessels to the value of nearly £9,000,000 were imported to Australia. In the State from which Senator James McLachlan conies a ship-building yard was operated by a company that had transferred its activities from Sydney to Adelaide, because of the policy of the Hughes Government for the encouragement of industry throughout the Commonwealth. I refer to the firm of Poole and Steele, which built three vessels in South Australia, but, owing to the tariff, that firm transferred its activities back to Sydney, and I believe that it suffered serious loss.
A great deal of credence is given to reports by the Tariff Board. In 1932, when an effort was said to have been made to encourage the industry, the board stated that the construction of three new coastal vessels annually would meet the needs in regard to shipbuilding in Australia, and, on that assumption, it was not worth while encouraging the local industry. The Government claims that it has endeavoured to promote shipbuilding, but its policy has had the effect of crippling the industry. In reply to a question asked in the House of Representatives by the honorable member for Martin (Mr. McCall) in September, 1938, the then Minister for Trade and Customs (Mr. White) stated-
Forty-three commercial vessels of 500 tons and over, valued in all at £A5,900,000, had been imported into Australia from 1932-33 to 1937-38 inclusive. The United Kingdom supplied 41 vessels, valued at £A-5,710,00O. Denmark one and China one. Mr. White added that the vessel from China was charged duty at 15 per cent, ad valorem, but the other importations were admitted duty free. The total amount of duty collected was £A2,865. No commercial vessels exceeding 500 tons gross register had been built in Australian shipyards during the period.
Therefore, the construction of 8 or 10 vessels, not 3, is required each year by the Australian coastal shipping trade.
The encouragement of the ship-building industry in Australia would mean more to . this country than any words of mine could possibly convey. Even if the difference in costs of construction in Australia and the United Kingdom be great - and it is not so great as has been suggested by Senator James McLachlan - every effort should be made to have every vessel required in this country built here. Now that this country is at war, it is probably realized. that Australia would be in a stronger position than it now is if it had shipbuilding facilities and trained workmen at Cockatoo Island Dockyard, Walsh Csl and, Melbourne and Adelaide. Apparently we must come face to face with a crisis before the need to do something in this direction is realized. Australia has shown its capacity to develop industries on a large scale, as is evidenced by the existence in this country of such huge concerns as the Broken Hill Proproprietary Company Limited and the Colonial Sugar Refining Company Limited. The success of these undertakings shows that Australians have the brains to carry on large-scale undertakings, if given sufficient encouragement Ivy the Government in the initial stage.–. There is no reason why similar success should not attend the re-establishment of ship-building as an Australian industry. Recently, the Secretary of the Iron Workers Union at Balmain told me that the number of unemployed men in his books was greater than at the depth of the depression. ‘.Che Government should realize that the ship-building industry in this country must be fostered and brought to such a. state of efficiency that it can compete with the rest of the world. Twenty years ago Australia built vessels of 1.2.000 tons which took their place among the sea-going commerce of the world and proved the capacity of Australian workmen to do a good job. The workmanship of those ships has never been faulted. At the conclusion of the war we had in Australia trained men1 capable of building further vessels, but, as the result of the Massy-Greene tariff amendments, those men were scattered to the four corners of the earth, and it would now be impossible to bring thom together again. A promising industry was struck a death-blow by the government of the day. It will therefore be necessary to start again at the beginning, and train young men to take their place as ship-builders. I live near Balmain, close to Mort’s Dock and Cockatoo Island Dockyard - a district which is vitally concerned with this matter. If those two establishments can be set going again al: full capacity, the whole country as well as the district in the immediate vicinity, will benefit, and we shall have an industry the value of which in wartime would be beyond anything which words of mine can convey. f disagree with the increase of the sales tax, notwithstanding the exemption of many commodities required by the poorer sections of the community. I object to a measure which was introduced temporarily to meet: an emergency being allowed to become a permanent, part of our taxation structure, while legislation of a permanent- character which was introduced 30 years ago has gradually been whittled down, and its value to the Commonwealth Treasury lessened. I refer to the federal land tax, which I believe was n good tax when first introduced.
– It has nol: had much effect in breaking up large estates; most of the tax is paid in respect of city properties.
– -The tax is paid by those who can afford it.
– The purchasers of the goods sold by city emporiums pay the tax.
– They also pay the sales tax. When introducing the bill to provide for federal land tax, Mr. Andrew Fisher said -
Unimproved value taxation is a sound principle, and while the incidence will tend to break up large estates and help to develop the country from an economic point of view. without any other embarrassing conditions; it is a proper kind of taxation for thu purpose of raising Commonwealth finances.
The ta* was first introduced in 18 10, and it continued at the same rate until the end of the last war. In 1929, it was reduced by 10 per cent., and in 1932 there was a further reduction of 30 per cent. By 1933-34 the tax was only 55 per cent, of its original rate. I agree that the owners of city properties pay most of this tax, but it was reduced by a non-Labour government on the pretence that it was lightening the burden then on the back of the man on the land. That, government tried to convince the people that the federal land tax bore heavily on people in the country, notwithstanding that 67 per cent, of it was paid in respect of city properties. The remission of land tax has meant a great deal to people who, in my opinion, should have been asked to pay a greater amount of the taxes necessary to carry on the Government of this country. In 1938, remissions of land tax represented a gift of £64,412 to the Bank of New South Wales compared with what it would have paid had the original rates not been altered. The Commercial Bank was saved £33,900, the Union Bank £26,000, and the English, Scottish and Australian Bank, £37,000 in one year. I contend that it is unfair to remove that tax from large companies, and at the same time to increase the sales tax on articles required by the poorer section of the community who are less able to pay it.
– When the land tax was reduced, the sales tax also was reduced.
– The land tax is to remain stationary while the sales tax is increased. It is bad policy to retain, and even increase a. tax which is regarded as a. temporary expedient, while a permanent tax is reduced. It is wrong to increase indirect taxation and not direct taxation.
– All of these sources will be tapped before long.
– It would have been better to start with direct taxation, instead of indirect taxation. Despite the talk of a depression, the average returns of public companies in New South Wales are surprisingly good. This month’s editorial of Rydge’s Business Journal records that of 43 public companies listed, thirteen, registered smaller profits than last year, whilst 80 showed increased profits. The compnies listed ranged from a hum concern like the Broken Hill Proletary Company Limited to much humbler businesses. The company mentioned showed a total profit of £1,431,513 representing an increase of £131,053, and in addition it distributed 64 bonus shares for every 100 paid-up shares, involving a capitalization of £4,459,790. Upon investigation, it was found that the thirteen companies which recorded losses were mostly pastoral companies which had lower yields than in the previous year, chiefly because of bad seasonal conditions. Successful city businesses can afford to pay more in land tax. The yield from the sales tax in 1938-39 was £9,308,000. According to the statement made by the Treasurer (Mr. Menzies) when delivering his budget speech, the increase of the rate of the tax will yield a further £1,420,000 this year, and next year it is estimated that the revenue from this source will amount to £10,728,000. Indirect taxes, such as the flour tax and the sales tax, ultimately fall upon the section of the community which is least able to bear them.
I urge the Government, even now, to take steps to establish, the ship-building industry in this country, and also not to increase indirect taxation while reducing direct taxation.
Debate (on motion by Senator Sheehn) a djourned .
– by leave - The Government has decided to offer to the United Kingdom Government, for service overseas, the administrative personnel and air crews, including staff and specialist officers, pilots, air observers and air gunners, for six squadrons - four bomber squadrons and two two-seater fighting squadrons. This decision is in complete conformity with its previously announced policy to provide first for the most adequate defence possible for Australia, and then to give to the United
Kingdom whatever help’ is possible without detracting from Australia’s capacity to discharge its first responsibility. We have been in very close touch with the Government of the United Kingdom as to the most appropriate and effective means of rendering assistance, and we know from the communication* which have passed between us, and from our study of the position generally, that - particularly during the first year of thoi war when the production of military aircraft in Great Britain and in France will be rapidly expanding, and when it may be anticipated that air warfare will be of predominating importance - the greatespossible assistance that can be given to Great Britain will be in the provision of trained air crews. A careful survey of Australia’s capacity to train such crew? has shown it. to be far greater than if required to man all the military aircraft that in the most favorable circumstances, and within any measurable time, will become available in Australia through local manufacture and purchase overseas. After a very thorough examination of this problem by the Defence Department, we find that, after providing fully for our present and contingent requirements, it will be possible. in addition, to train enough men to provide for the Air Expeditionary Force to which I have referred. Honorable senators will at once appreciate that whilst the sending of such a force out of Australia will represent a relatively small subtraction from our total man-power, it will render a very real measure of help to Great Britain in an arm of the service in which Britain’s requirements are greatest. In other words, the intrinsic loss to Australia will be immeasurably smaller than the intrinsic gain to Great Britain, and we may feel that in rendering this help we are performing a service to the centre of the Empire which will be much greater than the service we could render in any other way in the same time.
The sending of this force will not reduce Australia’s air defence by a single aircraft, and will leave ample personnel for the effective manning of our present air fleet and such aircraft as we may construct or acquire in the future.
Under the terms of our offer, the six squadrons will operate as an Australian force. We have given consideration to the sending of ground maintenance staff also, but we have deferred this pending inquiry into the effect which such action might have on our own reserves of skilled mechanics. Unless it be found that the sending abroad of a ground maintenance staff would prejudice our own productive capacity in Australia, such staff will be sent, in addition to those already mentioned.
It is expected that the force will be ready to proceed overseas, if circumstances permit, before the end of the year, though naturally the whole matter will be subject to any unexpected difficulties or changes in our strategic position that may occur during the next few months.
As our capacity to do so increases, the Government will give consideration to the possibility of still further reinforcing the great air effort in which the British and French people will undoubtedly have to engage before long.
I feel that not only honorable senators but also all Australians will be pleased that so parly the way has been found to give real hoi p to the United Kingdom without impairing in any way our duty and capacity to provide for Australia’s own security in the Pacific.
Militia Force Training - Senator Cameron AND Conscription Issue - Backing and Monetary Systems - Major J. Treloar - Export of Fruit: Canned Apples - POSTMASTERGeneral’s Department: L. O’Neil.
Motion (by iSenator MoLeay) proposed -
That the Senate do now adjourn.
.- According to a broadcast speech on Friday night last by the Prime Minister (Mr. Menzies), 40,000 of the Commonwealth Militia will be undergoing a month’s continuous training in camp while Parliament is in recess. In that all too short period, considerable progress can be made in consolidating the foundation already laid for an efficient home defence army. It behoves those in authority to ensure that the maximum amount of time is devoted to war training of a practical nature.
Certain branches of the Militia could take the field under active service conditions with very little more training, but I have doubts about the infantry, who form the bulk of an army. Reports from the Western Front reveal that the infantry is still the arm which wins or loses a battle. The cables tell us that after the airmen and artillery on both sides had played their role, the French infantry were those who prevented the Germans from re-capturing positions or localities. . Those French soldiers were armed with rifles, light automatics, and machine guns, just as our infantry are equipped. They knew how to use those weapons with deadly effect, and so repelled enemy counter-attacks.
Since the Great War, our military policy has been to concentrate on the training of staffs, all leaders down to non-commissioned officers, and specialists. It was considered that the training of the rank and file, especially the infantry, could wait till mobilization was ordered. That stage is now reached. No effort should be spared to bring the actual fighting units up to a reasonable standard of efficiency. At the present time, owing to insufficient practice, the numbers of marksmen, first-class Lewis gunners, and Vickers machine-gunners are far too small. Fortunately, there has been in existence for many years a regimental rifle club in every battalion and light horse regiment throughout the Commonwealth. Only a very small percentage of members of these front-line units availed themselves of the opportunity to become expert in the weapons with which they are armed. To-day they are the men who are wearing on the coat sleeve the marksman’s badge, and the badge of the first-class light automatic gunner. During the last twelve years, hundreds of men have passed through these clubs; all are 30 years old or younger, and are waiting to rejoin their old units. Why are they not enrolled ?
But we are more fortunate to have a greater reserve of’ skilled riflemen of military age, ready to step into the ranks of the Militia infantry and light horse. The expert knowledge which these fit members of civilian rifle clubs, officially designated reserve clubs, will bring with them into the Militia and the special force, will be invaluable. The more expert, I understand, are to be the battalion or the regiment snipers or’ sharpshooters unit. It is to be hoped that exmembers of rifle clubs who join up will, be utilized by commanding officers to pass on their expert knowledge to the hundreds of young militiamen now so anxious to acquire that knowledge. Most commanding officers will make good use of this personnel, but others may need a gentle reminder from higher authority.
Manoeuvres and minor tactical exercises during the month’s camp training must necessarily be carried out to a considerable extent, but responsible officers are often inclined to neglect the actual fighting side of a soldier’s education, which must be intensified if we are to have an efficient force.
Lieutenant-General Squires, the InspectorGeneral of the Military Forces, is a practical soldier, but he cannot be everywhere. He has observers in most camps. He should report to the Minister for Defence any tendency to overdo parade ground movements and ceremonial evolutions at the expense of practical wartime training. Our young militiamen do not mind how hard r.hey are worked, day or night, provided they see the value of their training.
The taxpayer has a right to be satisfied that the money spent on these camps gives practical results. Employers will be more eager to co-operate if they know that their employees who have left desks, counters, or the work benches, are being thoroughly trained for war-time services. We former leaders in the Great War are jealous of the reputation and tradition’ of the Australian Imperial Force. The militiamen are the custodians of that tradition. We know that, a mouth’s training is all too short, but, as experienced trainers of troops on active service say, much progress can be made if every hour of the day is devoted to fitting our Militia for front-line service.
I make no apology for referring to this matter here. It is not out of place ‘to give advice or offer constructive criticism in our national Parliament on a national subject in a time of national crisis.
Senator CAMERON (Victoria) 1.0.40 [. I wish to refer to an incident thai occurred in the Senate this afternoon. Honorable senators will recollect that. I asked the Leader of the Senate a question relating to the appointment recently of Professor Copland as Commonwealth Commissioner of Prices. I asked if such an appointment had ‘been made, wha t payment Professor Copland would receive for his services, and also would such payment be in addition to the salary already being paid to him by the University of Melbourne. I submit that the question was a proper one to ask. May I add that I was not concerned about Professor Copland personally, or the position which he now occupies in the employ of the Commonwealth. So far as I know, he is a very capable man, and possibly is well qualified for the position. But 1 was concerned about « press report which stated that he would receive an amount which I regard as considerably in excess of what should be paid in the present circumstances, though I do not; wish it to be thought that I would favour niggardly payment for the work i<> be performed. I did not receive an answer. . Instead, the Leader of the Senate - I assume that he was not speaking on behalf of the Government - mentioned ». report which he had received concerning tuy activities in Western Australia during the last, war. The honorable gentlemen said that I was opposed to that war. J. give that statement an emphatic denial. It was grossly inaccurate. I realize, as the result of my studies, that under existing condition? wars are inevitable between rival imperialist nations where negotiations fail. Knowing that, we ask ourselves where do we stand in relation vo war. On the occasion of the last war T stood with British imperialism. I took that stand because T was born in Australia and .1 freely acknowledge that citizens of this country enjoy greater liberties under British imperialism than would be permitted under, say, German imperialism. 1. emphasize that I was noi opposed to the last war. But the Government of the day decided to take a referendum on the conscription issue. Again as the result of my studies I was convinced that conscription would be a negation of all the liberties which we enjoy under British imperialism. I wa- also convinced that if conscription were introduced into Australia, the evils which that system had brought to continental countries would he brought to Australia. 1. firmly believed also that the real reason for the demand for conscription during the last war - and the same would bold true to-day - was economic and not military. That is to say, I believed that conscription was needed or demanded because it would enable greater profits to he made under war conditions than it Australian soldiers received 6s. or 7s. a day. t opposed conscription on those grounds. While addressing a meeting on the .Perth Esplanade .1 was attacked by a number of young men who were not returned soldiers and who were influenced by conscriptioinists holding responsible positions. They could not meet my argument with argument, so they did what I expect will be done in this war - they misrepresented me with the object of having me maltreated and put out of action. That effort did not succeed and as a result we who were opposed to conscription were able to convince a majority of the people that we were right and that the cause we advocated was in the interest of the people. The protection denied by authority to persons such as myself was provided by members of the Waterside Workers Union at Fremantle, farmers, timber-getters, workers and others, and we were able l<> hold meetings free from interruption. Subsequently on two occasions the people of Australia endorsed the stand that we bad taken. That is a brief history of what actually occurred. 1. regret that -the Leader of the Senate, who represents the Government in this chamber, should have spoken as he did. When he brings himself into disrepute he brings also the Government of which he is a member into disrepute. If be had any doubt in the matter why did he not have the common courtesy to approach me and ask for tin- facts ? Personally, I take- no objection to anything which the Leader of the Senate or any member of the Government says in opposition to any argument 1 submit. I try, so far as is humanly possible, to put forward better words and thoughts and make, out a -better case than that of .the Government. T expect no quarter in argument, and I do not intend to give any. At the same time 1 do not intend at any time to follow the bad example set by the Leader of the Senate, imputing ulterior motives as a means of evading a perfectly proper question.
Senator DARCEY (Tasmania) [10.47 J. - I direct the attention of honorable senators to a misleading reply which I received to a question which 1 submitted to the Prime Minister (Mr. Menzies). The question read -
in view of tlie urgent necessity to ensure the adequate defence of Australia, and as the interest hurden on tlie existing national debt absorbs so high a proportion of national revenue, will the Prime Minister, to ensure that nur people shall not inherit a. legacy of war debts, take immediate steps to instruct the Commonwealth Bank Board to make available to the Government whatever money is necessary to finance Australia’s war activity, in accordance with thu statement in the report of the Royal Commission on the Monetary and Hanking Systems of Australia, paragraph 504., as follows: - “‘Because of this power, the Commonwealth Bank . . . can lend to the governments or to others in a variety of ways, and it can even make money available to government or to others free of any charge”?
The reply .1. received through the Minister representing r,lie Prime Minister in this chamber read - 1 refer the honorable senator to the statement on this subject, made by the Treasurer (Mr. Menzies) when delivering his budget’ speech on the 8th September, 10Hi). On that occasion, the right honorable guutlenui.ii said - “ A great deal of thu agitation is founded upon a quotation of which all honorable members have heard, from the report of the Boya] Commission On Banking. After referring to lini power of the Commonwealth Bank to create money by printing anil issuing notes as legal tender, paragraph 504 of that report goes on to statu-
In paragraph .”i04 there are no words whatever as to the printing and issuing of notes, a subject referred to by Senator Dein this afternoon. The answer continues -
Because of this power, tlie Commonwealth Bank is able to increase the cash of the trading banks in the ways we have pointed out above. Because of this power, too, the Commonwealth Bank can increase the cash reserves of the trading bantus; for example, it oan buy securities or other property, it can lend to the governments or to others in a variety of ways, and il can even make money available. to governments or to others free nf any charge
That most satisfying statement is torn from ite context and presented to us, and then we are asked in effect : “ What sort of people are you? You have been told by a royal commission that you can obtain any amount of money without charge. Why don’t you get it?”The belief, apparently, is that if we did get money in this way the result would be that we would have no taxes, no public borrowings, and, to put it in the old phrase, “ everything in the garden would be lovely “.
I am very much surprised at the audacity of the Prime Minister in making such a statement. No one on this side of the chamber said anything of the kind. Apparently the Prime Minister forgets that our national debt has now reached approximately £1,300,000,000, for some of which previous governments are responsible, but all of which has to be repaid. My complaint is against the present borrowing system.
– Could not we pay off some of our national debt with the free money which the honorable senator says that we can get?
– Of course we could. The Royal Commission on Banking and Monetary Systems said that that could be done. I am concerned more with the taxation which is being imposed. It is not so much the method as what is implied. The Government adopts the attitude that having a majority in this chamber, it can guillotine any measure, however convincing our arguments may be.
– The honorable senator is not very convincing.
– The answer continued -
Of course, there is no exercise better understood, even here, than the exercise of taking a statement out of its context. That is what has been done in this case, because if honorable members will read on in the report, they will find an amplification of that statement, which, of course, exposes its limitations as clearly as can be. I do not propose to read the exact passages in the report, but I commend to honorable members the succeeding paragraphs down to paragraph 513. The position, of course, is that exactly the same kind of limitation exists upon the power of the CommonwealthBank to inject credit into the financial structure, as exists in relation to its power to print notes and make them legal tender. When the point of prudence is passed then prices and costs are increased, and the valueof the money in circulation is diminished. Consequently, what any central bank has to. do in any country is to adjust its credit policy to what it believes to be the economic circumstances of the moment, always keeping in mind the position of the trading banks; the position of credit facilities in the community; the degree to which there may be an excessof unemployment over what might be described as the irreducible minimum; and the extent to which prices are moving up or down. When it does, all these things, then, if it is a good and competent central bank, it can be trusted to exercise its powers in such a way as to iron out both the acute booms which occur from time to time, and those serious depressions from which we periodically suffer.
The Commonwealth Bank is not a central bank ; it never was and never can be.
– That is only the honorable senator’s statement.
– And anything the Assistant Minister says is only his statement. If the Minister for Commerce knew anything at all about banking systems he would know that a central bank represents the private banking system, and the Commonwealth Bank is not a private bank. Sir Otto Niemeyer could not establish a central bank in Australia because the Commonwealth Bank was in the way, but he went to New Zealand and established a central bank in that dominion. The first action of Mr. Montague Norman was to send his emissaries all over the world with instructions to establish central banks. I know more than the Assistant Minister concerning central banking systems.
– What does the honorable senator mean?
– I said previously that the honorable senator is an interjector without an idea, and he is living up to the label which I have attached to him. The Prime Minister should know that each paragraph in the report of the Royal Commission on Banking and Monetary Systems is complete in itself. If any honorable senator reads right through a paragraph he will find that nothing can be taken from its context. For instance, if paragraph 504 is negatived by paragraph 505, what is the use of paragraph 504? As a matter of fact, what I have said can be done, and honorable senators opposite know that it can be done. I mean what I have said previously, that it is preferable to use the national credit which is at our disposal instead of imposing taxes. I repeat that we are at war, and I, too, am at war with the Government, which is dead to its responsibilities to the taxpayers, because it is borrowing at 4 per cent. money which could be obtained free. Notwithstanding the number of times I have spoken on this subject, no honorable senator opposite has contradicted what I have said or endeavoured to prove that I am wrong. All that we can get is jeers and smiles.
SenatorFoll. - A few of the honorable senator’s colleagues have contradicted him.
– When we did the honorable senator was not present.
– I returned in time to correct the misstatements of honorable senators.
– What happened in Alberta ?
– When the Assistant Minister refers to Alberta he proves conclusively that he knows nothing concerning the actual position.
– They know all about it in Alberta.
– The legislation to bring about community control of credit was supported by 52 of 65 members of the Government of Alberta. That vote showed what was thought of community control of credit ; but after the legislation was passed with a substantial majority it was negatived by the Dominion Parliament at Ottawa. As it had never been in operation it cannot be said that it had failed. The system was never introduced in Alberta because the unscrupulous money-power realized what the effect would be if the system were introduced. Eventually it must win.
-i have heard punters speak of systems such as that.
– WhenI hear such remarks I wonder how the Assistant Minister obtained the position which he now occupies. Community control of credit is within the power of this Government, which can introduce it at any time it desires. There is no other bank in the world such as the Commonwealth Bank, which was started by the people for the people. Central banks, concerning which we hear so much, are the fundamentals of the British private banking system.
In1924 the Government was told what it is being told to-day. Every £1 asked for in the form of bonds carries a tax in perpetuity, and we are placing a load on the taxpayers which they cannot throw off.
– The Government is using the credit of the people.
– It is not doing anything of the kind. Some time ago I asked the Minister for Supply and Development (Mr. Casey), who was then Treasurer, how much of the £4,800,000 loan was subscribed by the public and I was informed that only £1,050,000 had been contributed in that way. It will therefore be seen that the Commonwealth Bank created credit for the difference between those two amounts on which the Government will pay interest ranging from 3.7/8 per cent. to 5 per cent. which is free of all federal taxation. That is where the money comes from under the present system ; there is ho other way to get it. I remind Senator Dein that the Auditor-General of New South Wales - the State which the honorable senator represents - informed the Government of that State that it used loan money to meet sinking fund requirements. It is a wonderful system under which money has to be borrowed to pay the statutory contributions to the sinking fund. Last year the Commonwealth Government borrowed £19,000,000, and to-day the amount of Commonwealth and State taxes collected annually is approximately £120,000,000. Notwithstanding that, the Government still persists with the present system. Senator James McLachlan, who is laughing, told the Senate that had Germany not embarked upon a system of social credit, there would be no war in Europe to-day.
– No; I said that social credit was an important fa ctor.
– I pointed out in this chamber about a year ago that Germany financed its huge re-armament programme by utilizing its national credit. A good system can be used for a bad purpose, but that does not alter the fact that it can also be utilized for a good purpose.
– The honorable senator has not yet convinced his colleagues on this subject.
– That gibe has been thrown at me on several occasions, but it is unfounded.
– The honorable senator’s leader does not agree with him.
– The first plank of the Labour party’s platform provides for the utilization of the national credit. I repeat that the statement made by the Prime Minister was most undignified, and did no credit to him as the head of this country. Paragraph 504 of the report of the Royal Commission on Monetary and Banking Systems declares that the Government can get the money it requires free of interest. The reason for that is clear. As all of the profits of the Commonwealth Bank go back to the Government, it is useless to charge the Government 4 per cent. interest on that money. Such a transaction is merely a waste of time, and involves unnecessary book-keeping. Honorable senators must know that the banks do not lend the Government any money at all; they simply create credit.
– Does the honorable senator say that their lendings have no relation to their deposits?
– I do not say that.
– Can the honorable senator produce figures in respect of one bank in Australia to show that its total advances exceed its total deposits?
– How is it, then, that the total advances made by the banks to Governments amount to £500,000,000 although Australia’s currency is not worth more than £57,000,000? I shall secure figures of the kind for which the honorable senator has inquired. The report of the royal commission states that the whole of the eight banks between them possess only £17,000,000 in notes.
– That has nothing to do with Senator Wilson’s query.
– Some time ago the deposits of the Bank of New South Wales totalled £54,000,000. But what exactly are deposits ? Should that bank’s deposits total £54,000,000 and to-morrow it should invest £1,000,000 in a war loan, one would imagiue that that £1,000,000 would come out of the bank’s deposits. But what do we find? The next balance sheet of the bank shows that its deposits total £55,000,000. Every loan creates a deposit. If that were not so how could we owe the banks £500,000,000? A writer in the Encyclopaedia Brittanica states, “The banks are institutions for the creation of credit which they create out of nothing “. Must I repeat that authority over and over again in order to convince honorable senators on this point!
– The report of the royal commission says that the Commonwealth Bank has power to lend money free of interest to “ governments and others “. Who are “the others”?
– I suggest that the honorable senator should ask that question of the royal commission.
– Does it mean any of us?
– Apparently the honorable senator refuses to take this matter seriously. The fact remains that banks create credit, and that that is the only way in which they can carry on. If all of the depositors asked their respective banks for their money to-morrow the banks would not be able to pay 2s. in the £1. I recall that in the crisis of 1898, thirteen out of 22 banks closed their doors, and many people were unable te recover their deposits. When von lend money to the bank what security do you get? You get a receipt. But try to borrow some money from a bank and how much will you get ? If I buy £5,000 worth of war bonds in the next Commonwealth war loan my money would never reach the Treasury. On a previous occasion I pointed out that of £4,800,000 publicly subscribed to the last Commonwealth loan £3,750,000 was subscribed by the banks. That was not money at all, but simply credit created by the banks. When a loan has been floated, all that the Government gets is the right to draw cheques to the limit subscribed by the banks.
– That is all it wants.
– This is a very serious matter to me, particularly when it is proposed that we should load the taxpayers with a loan burden of £100,000,000. The whole of the trouble in the world to-day is want of purchasing power. The Macmillan Commission stated that unemployment is due, not to overproduction but to under-consumption, and money will have to be found from some source without increasing taxes in order to buy the products of industry and to keep the men at work. Can the Government get money under the present system without increasing taxes? I repeat that the Government can issue this money itself through the Commonwealth Bank and it should do so, particularly in the present crisis. The Government is now at war ; I am at war with the Government, because it disregards the welfare of the people of Australia in financing its war expenditure.
– Last week when I asked a question of the Leader of the Senate (Senator McLeay) he not only gave me an evasive answer, but also lectured me, and other honorable senators, on the manner in which questions should be asked. Answers given to questions asked by honorable senators on this side are often inaccurate or evasive. The Leader of the Senate has how commenced to castigate honorable senators because of certain questions which they have asked. We had an example of that attitude in an incident which occurred this afternoon and which did not reflect credit on the Minister. In order to show that I had some justification for asking whether Major J. Treloar, the newly-appointed Director of Information, was a prominent member of the New Guard in New South Wales, I shall read the following paragraph which appeared recently in the press: -
” I have no connexion whatever with the Major Treloar who took part in the New Guard organization in New South Wales “, declared Major J. Treloar, administrative head of the new Department of Information. “ It is a case of mistaken identity and the confusion may have arisen from the publication of the picture of the New Guard Treloar with a story of National War Museum work some time ago “, he explained to-day.
A government of the same political kidney as this Government has declared that the New Guard organization in New South Wales was not an unlawful association. In view of that statement I am at a loss to know how my question could harm the gentleman concerned. In his reply to me the Leader of the Senate added, “ Recently insinuations caused the dea th of an outstanding public servant “.
The honorable senator was absolutely unjustified in suggesting that any honorable senator on this side had made any insinuations against that officer. Every member of this Parliament knows that the inquiry into the Sydney General Post Office contract arose from disclosures made by the ex-Minister for Defence (Mr. Thorby). Although that honorable gentleman’s charges were not. sustained, this Government accepted responsibility for the cost of his legal representation before the royal commission. It ia not right for the Leader of the Senate to treat questions asked by honorable senators in the manner in which he has been treating them during the last few weeks. He certainly earned no credit for himself by making the accusation which he levelled against Senator Cameron to-day. I hope that we shall not have a recurrence of such conduct, which militate against good feeling and decorum in the Senate.
– I assure the Leader of the Senate (Senator McLeay) that when I asked him whether any inquiries had been made from the British Government with regard to the purchase of canned fruit, including canned apples, I was not attempting in any way to put something over him. I was actuated by a realization of the difficulties which threaten to confront Australian orchardists in the near future should the war continue. However, the honorable senator gave me an evasive answer. Lately he has contracted a habit of insulting honorable senators on this side when he does not feel inclined to answer any of our questions. I emphasize that should sufficient shipping space not be available for the transport of our fruit overseas, our orchardists will be confronted with ruin. In that event this Parliament, no doubt, will be asked to provide assistance for the industry. I admit that the Leader of the Senate answered a part of my question, but I do not appreciate the fact that the Minister proceeded to deal with another matter to which I had not referred and thus evaded the principal part of my question. I now ask him whether the Government has made any inquiries in Great Britain as to the possibility of finding a market forcanned apples, and, if so, can he state t he result of those inquiries?
.- On the first day of the present sittings of the Senate, I brought under the notice of the Government the victimization of a returned soldier named Leslie O’Neil by the Postmaster-General’s Department at Launceston. Will the Minister representing the Postmaster-General expedite the reply to my question, so that I may receive it before the conclusion of the present sittings ?
-i signed a letter to-day containing a reply to the honorable senator, and am surprised that he has not received it.
– in reply - I have to inform Senator Aylett that the Government has not approached the British Government with reference to a market for canned apples, but, when the negotiations with Great Britain began for the formulation of a plan to be adopted in the event of a. national emergency, the exportation of fresh apples and pears to the United Kingdom was brought under the notice of the British authorities, and everything possible was done to make a satisfactory arrangement. I do not think that the problem of the shipment of canned apples to Great Britain is a pressing one at the present sta.ge, and I cannot hold out much hope for the Tasmanian fruit-growers in that direction.
Senator Darceystated that he was surprised at the audacity of the Treasurer (Mr. Menzies) in his reply to a question asked by the honorable senator regarding the use of credit. I presume that the Treasurer could have returned the compliment, and. said that he was surprised at the theories advanced by the honorable senator in his someth.ing-for-nothing orations.
I have mentioned on other occasion? that honorable senators enjoy privileges in this chamber, and that they have certain rules to guide them in asking questions. I again urge all honorable senators to avoid, as far as possible, reflections upon prominent persons, and indulgence in personalities. Ifwe concentrate on principles rather than per sonalities we shall assist in maintaining a high standard of debate in this chamber.
Question resolved in the affirmative.
Senator FOLL laid on the table the reports and recommendations of the Tariff Board on the following subjects:-
Cotton Condenser Yarns for the manufacture of Towels; Coconada Cotton Yarns for the manufacture of Towels.
Cotton Yarns n.e.i.
Dental Units and Dental Polishing Lathes. Devices for catching or fastening Doors of
Electric Fans of the type ordinarily used in Offices and the Household.
Electric Motors of less than 1 h.p.
Internal Combustion Engines (other than Marine Engines and Engines for Motor Vehicles) up to and. including 100 horsepower.
Printed Advertising Matter from the United Kingdom.
Radio and Electrical Testing instruments and Appliances.
Screwing Tools; Tap Wrenches, Screwplates of thefixed type, and Stocks.
Sewing Threads, Linen Flax, Hemp orJute. Shock Absorbers.
Staple or other Synthetic Textile Fibres; Tops, Yarns and Piece Goods wholly or partly composed of Synthetic Staple Fibre.
Towels and Towelling n.e.i.; and Bath Mats.
Tractor Wheels and Tractor Wheel Centres for use with Pneumatic Rubber Tyres.
The following papers were presented : -
Arbitration (Public Service) Act - Determinations by the Arbitrator, &c -
No. 23 of 1939- Professional Officers’ Association, Commonwealth Public Service.
No. 24 of 1939- Amalgamated Postal Workers’ Union of Australia.
Commonwealth Public Service Act - Appointments - Department of -
Commerce - R. A. Potts.
Treasury - J. J. Moyle.
Land Tax Assessment Act - List of Applications for Relief dealt with during the period 1st July, 1938, to 30th June, 1939.
National Security Act Regulations - Statutory Rules 1939, No. 87- No. 88- No. 89 -No.90- No. 91.
Post and Telegraph Act - Regulations amended - Statutory Rules 1939, No. 84.
Seat of Government Acceptance Act and Seat of Government (Administration) Act -
Ordinances of 1939 -
No.6 - Trespass on Commonwealth Lands.
No. 7 - Police Offences.
No. 8 - Seat of Government (Administration ) .
No.9 - Co-operative Trading Societies.
Building and Services Ordinance - Amendment of Garbage Regulations.
National Capital Development Ordinance - National Capital Planning and Development Committee (Expenses) Regulations.
Senate adjourned at 11.18 p.m.
Cite as: Australia, Senate, Debates, 20 September 1939, viewed 22 October 2017, <http://historichansard.net/senate/1939/19390920_senate_15_161/>.