Senate
6 December 1939

15th Parliament · 1st Session



The President (Senator the Hon. J. B. Hayes) took the chair at 11 a.m., and read prayers.

page 2135

QUESTION

TARIFFBOARDREPORTS

Senator McBRIDE laid on the table reports and’ recommendations of the Tariff Board on the following subjects : -

Rheostats potentiometers and variable resistances of the types incorporated in wireless receivers.

Laundry washing machines.

Metallic capsules for bottles.

Paper - Fine printings and writings.

Wristlet watches, n.e.i., and cases therefor.

Hydro extractors. 2nd AUSTRALIAN IMPERIAL FORCE.

Training in Australia.

Senator ASHLEY:
NEW SOUTH WALES

asked the Leader of the Government in the Senate, upon notice -

  1. Has he read the leading article in the Sydney Morning Herald of Thursday, 30th November V
  2. If so, can he say whether the statements in that article - that it was not possible to train the 2nd Australian Imperial Force in Australia - are warranted?
  3. If it is not possible to train the 2nd Australian Imperial Force in Australia for modern warfare overseas, will he explain how it is proposed to train men to defend Australia within Australia?
Senator McLeay:

– The answers to the honorable senator’s questions are as follow : -

  1. Yes.
  2. and 3. In the interests of national security it is inadvisable to divulge this information.

page 2135

POSTAL DEPARTMENT

Preference to Returned Soldiers

Senator McBRIDE:
Minister without portfolio assisting the Minister for Commerce · SOUTH AUSTRALIA · UAP

– On the 1st December, Senator Cameron asked, without notice, whether it was now the policy of the Postmaster-General’s Department to grant preference to university students over returned soldiers for temporary employment during the Christmasrush. The

Postmaster-General has supplied the fol- lowing information : -

In selecting men for temporary employment to meet the Christmas rush, the policy of preference to returned soldiers is being strictly observed, and in no circumstances willnonreturned soldiers be utilized if there are returned soldiers available who are competent to perform the duties. The department is unable to trace the case where it was alleged that a Mr. Holt was informed that preference would be given to university students, and such information is contrary to the procedure being followed.

page 2135

GOLD TAX COLLECTION BILL (No. 1) 1939

Order of the day, Government business, Gold Tax Collection Bill (No. 1) 1939, second reading, resumption of debate - read and discharged.

page 2135

WHEAT INDUSTRY (WAR-TIME CONTROL) BILL 1939

Motion (by Senator McLeay) agreed to-

That so much of the Standing Orders be suspended as would prevent him moving of a motion for leave to introduce the Wheat Industry (War-Time Control) Bill without notice.

Motion (by Senator McLeay) agreed to-

That leave be given to introduce a bill for an act relating to the financial arrangements necessary for carrying out a scheme for the regulation and control of the wheat’ industry during the present war.

Bill brought up.

Bill read a first time.

Standing and Sessional Orders suspended.

Second Reading

Senator McLEAY:
Minister for Commerce · South Australia · UAP

– I move -

That the bill be now read a second time.

This bill is purely a machinery measure, incidental to the Government’s policy of assistance to the wheat industry in respect of the 1939-40 harvest. As honorable senators are aware, the Government is arranging for the Commonwealth Bank to finance advances made by the Wheat Board to the wheat-growers, and has guaranteed such advances. The bank will be re-imbursed from market realizations for wheat, flour tax collections, and special Government assistance. This bill provides for payment to the bank of sums equivalent to the flour tax collections, subject to certain adjustments. Honorable senators should read the bill in conjunction with the Wheat Industry Assistance Act 1938. The act provides that all moneys collected under the Flour Tax Assessment Act 1938 shall be paid into the “Wheat Industry Stabilization Fund, subject to any payments approved by the Minister in connexion with the removal of wheat-growers from marginal areas and to the special refund to Tasmania. The amount of money in the Wheat Industry Stabilization Fund is payable to the States in proportion to their wheat production, and the States pay out to the wheat-growers the sums received by them.

The bill now before the Senate simply provides that, instead of the moneys being paid to the States for distribution to wheat-growers, such amounts shall be paid to the Commonwealth Bank of Australia in repayment of advances already made to the wheat-growers. In other words, instead of the Commonwealth’s flour tax collections being paid first to the States and then to the growers, the money will be paid direct by the Wheat Board to the growers by means of advances made by the Commonwealth Bank, and the flour tax collections will be paid over to the Commonwealth Bank in repayment of those advances.

The act will expire concurrently with the expiry of the National Security Act, or at such earlier date as is fixed by proclamation. There is nothing controversial in this purely machinery bill, and T invite honorable senators to give to it an early passage.

Senator WILSON (South Australia) 1 11.12.] - I regret that I cannot support the bill in its present form, and I strongly urge the Government to give to the proposal more consideration than appears to have been given to it so far. Under the Wheat Industry Assistance Act, the wheat-farmers are absolutely secured, in that the money derived from the flour tax is paid to the States which are obliged to pay it to the wheat-growers in proportion to the number of bushels sold or offered for sale. This bill repeals the provisions which require that the money shall be paid to the States, and, incidentally, it also repeals the provisions requiring the

States to pay it to the wheat-growers. Instead of the money being paid to the wheat-growers, this bill provides that it shall be paid to the Commonwealth Bank in repayment of the £20,000,000 which that institution is to advance to the wheatgrowers. I point out that if the Commonwealth Government is able to dispose of the wheat at prices which will enable it to repay the £20,000,000 advanced by the Commonwealth Bank - and at to-day’s price of wheat that could be done - the bank will receive the proceeds of the flour tax without being called upon to pass it on to the wheat-growers. I am not prepared to support a bill which takes from the wheat-growers the security which they now have. I believe that all honorable senators desire that the wheat-farmers shall be paid the proceeds of the flour tax, but under this measure there is no guarantee that that will be done. I am not quarrelling with what I believe to be the intention of the Government in this legislation. A liberal initial advance of £20,000,000 is proposed. It is. only right that the Government should be reimbursed the £20,000,000 advanced and should, if necessary, be able to use the flour tax for that purpose ; but when the £20,000,000 has been repaid from the proceeds of the sale of the wheat, I want to be assured that the wheat-growers shall receive the proceeds of the flour tax, and that that money shall not be used for any other purpose. If this measure he passed, there is no assurance that in future the farmer will receive the proceeds of the flour tax.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The bill does not provide who shall get it.

Senator WILSON:
SOUTH AUSTRALIA

– It will be paid to the Commonwealth Bank; but I do not know how it will be used by that institution. This Parliament has passed legislation providing that the proceeds of the flour tax shall he paid to the wheatgrower, hut under this measure it will be paid to the Commonwealth Bank for the purpose of repaying initial advances to the wheat-growers. There is no assurance that when those advances have been repaid the wheat-growers will derive any benefit from the flour tax.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Could not this matter be discussed more effectively in committee?

Senator WILSON:

– If the Government will give me an assurance that it will accept an amendment to provide that, as soon as the Government has been repaid the £20,000,000 advanced, the proceeds of the flour tax shall be paid to the farmer, as is provided in existing legislation, J shall not oppose the second reading of the bill. If the Government will not give that undertaking, I am not prepared to assist to repeal an act which gives the farmer approximately 4d. a bushel. Unless the Government will give the assurance sought I propose to move an amendment. Clause 6 provides as follows : -

All moneys paid into the Fund on or after the second day of December, One thousand nine hundred and thirty-nine, other than -

moneys required to make any payments in pursuance of sub-section (5.) of section six of the Wheat Industry Assistance Act 1938; and

any moneys credited to the Special Account or the Wheat Tax Account in pursuance of sub-section (3.) or sub-section (4.) of that section, shall be paid to the Commonwealth Bank of Australia in part repayment of advances to the Commonwealth made by that Bank in pursuance of regulation 23 of the Wheat Acquisition Regulations (being Statutory Rules 1939. No. 96).

Evidently the Government believes that it may not be able to sell the wheat at a price which will enable the £20,000,000 to be repaid in full. Wheat has risen nominally by 4½d. a bushel in the last three days, and if the Government were able to dispose of the Australian wheat crop at to-day’s parity price, it would receive more than sufficient to repay the £20,000,000 advanced. In these circumstances, the wheat-growers should get the benefit of the flour tax. When the bill is in committee I propose to move to add after clause 6 the following new clause: - 6a. Notwithstanding anything contained in this act, if and when any such advances made by the Commonwealth Bank have been fully repaid, the provisions of the Wheat Industry Assistance Act 1938, the operation of which is suspended by section 4 of this act, shall again come into operation and shall continue in operation as if this act had not been passed until such time as any further such advances are made by the Commonwealth Bank.

I also propose to amend clause 1 to read -

This act shall continue in force until and including the first day of December, 1940. or until such earlier date as is fixed by proclamation, and no longer.

The amendment will ensure that when the Commonwealth Bank has been repaid the £20,000,000 advanced, the proceeds of the flour tax shall be paid to the wheatgrower in proportion to the quantity sold. Before I can support the second reading of the bill, I should like an assurance from the Minister that the wheat-growers will be protected as Parliament intended when the flour tax legislation was passed last year.

Senator CUNNINGHAM:
Western Australia

.- This is a Government measure introduced with the object of perpetuating the flour tax. The Government has at its disposal other means whereby the wheat-growers can be assured of a payable price for their wheat. Honorable senators should give this measure very careful consideration before supporting it, because if it be agreed to we shall be placing legislation upon the statute book which will inflict upon the consumers of flour products a taxing measure until it is repealed by a Labour government.

Senator Gibson:

– What would that party do ?

Senator CUNNINGHAM:

– It would repeal the flour tax.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– In what way would that party assist the wheatgrowers ?

Senator CUNNINGHAM:

– The Labour party, in co-operation with State governments, would establish a compulsory Commonwealth wheat pool, and provide such a pool with authority to secure, through. the Commonwealth Bank, the necessary finance to pay to the wheatgrowers a reasonable price for their wheat. It would enact legislation to indemnify the Commonwealth Bank against losses which in effect means that the scheme would be backed by the nation. The present Government continues to tinker with the wheat problem, particularly in the matter of providing the grower with a payable price. I realize the trouble into which the Government has drifted to-day, more particularly as it cannot give us an assurance that it has disposed of the 1939-1940 crop. We were informed that action was to be taken through the Imperial Government to dispose of the present crop, but the Minister cannot now give us an assurance that it han< been sold. The crop has not been sold, and the Government is in grave doubt as to the possibility of selling it to or through the British Government. Even the Prime Minister (Mr. Menzies) has notified the wheat-growers of Australia that in all probability the overseas market has been lost.

Senator McLeay:

– Could a Labour government provide the ships?

Senator CUNNINGHAM:

– The responsibility for disposing of the wheat crop devolves upon the Government.

Senator McLeay:

– To whom are we looking for ships?

Senator CUNNINGHAM:

– The Government has not taken the Parliament into its confidence.

Senator McLeay:

– It has.

Senator CUNNINGHAM:

– Al that we know is that the Government is negotiating for the transport of wheat overseas ; but it has not yet secured a market. During the last few weeks we have been informed by responsible Ministers that, as a result of the utilization of transport facilities by Great Britain, the Canadian, Argentine and American crops are more accessible, with the result that the 1939-40 Australian crop is still on hand. Under this measure an attempt is being made to perpetuate the flour tax which the Government desires to inflict upon the people of Australia for all time. The flour tax was introduced as an emergency measure.

Senator E B Johnston:

– It is permanent legislation.

Senator CUNNINGHAM:

– On this issue the honorable senator has been instructed by certain associations in Western Australia to withdraw his allegiance to the Country party.

Senator McLeay:

– Did not the Western Australia Labour government support the imposition of a flour tax?

Senator CUNNINGHAM:

– The Western Australia Labour government did under pressure, but the Western Australian representatives in this Parliament opposed the tax.

Senator MCBRIDE:
UAP

– Under pressure.

Senator CUNNINGHAM:

– No. We opposed it in conformity with the policy of the Australian Labour party and pro posed relief measures to assist the farmers which received the endorsement of the wheat-growers in Western Australia.

Senator Gibson:

– 1 rise to a point of order. Is it competent for an honorable senator to discuss the whole subject of wheat production and marketing under this measure which merely provides that certain sums of money shall be paid into the Commonwealth Bank? The bill deals only with money. We have already debated the wheat situation.

The PRESIDENT (Senator J B Hayes:
TASMANIA

– On a strict interpretation of the Standing Orders, Senator Cunningham would not be in order; but I have always permitted a good deal of leniency in a matter of this kind. Senator Wilson has notified his intention to move an amendment which widens the subject a good deal. Although some latitude must be allowed, I ask Senator Cunningham to keep reasonably within the limits of the bill.

Senator CUNNINGHAM:

– I shall do so, sir. I trust to the good sense of honorable senators to reject this measure. Are honorable gentlemen opposite desirous of putting the flour tax on such a basis as will permit it to remain in force for all time?

Senator McLeay:

– This measure does not affect the flour tax.

Senator CUNNINGHAM:

– When we agreed to the flour tax, we understood that it was an emergency measure.

Senator MCBRIDE:

– Not at all.

Senator CUNNINGHAM:

– The Minister who introduced the bill in this chamber gave us clearly to understand that the Government was hopeful that the world parity price of wheat would increase to such an extent that it would become possible to dispense altogether with the flour tax. Of course, the measure should be repealed in the interests of both the wheat-growers and the consumers.

Senator McBride:

– What would happen if this bill were rejected?

Senator CUNNINGHAM:

– The people of Australia would realise that the Government does not desire to impose a permanent tax upon bread. The wheatgrowers are hostile to the flour tax and were not in accord with the view of the

Governmentwhen it was imposed. I therefore ask honorable senatorsto vote against the motion.

Senator E B JOHNSTON:
Western Australia

– We are indebted to Senator Wilson for bringing to our notice the aspects of this subject with which his amendment deals. I confess that I have not had the opportunity to study the bill. It refers to the repeal of certain other legislation. Yet, in spite of its importance, the Standing Orders have been suspended to permit the measure to be introduced without notice, and to pass through its remaining stages without delay. This process of legislative haste and sausage-machine politics is unsatisfactory. While Senator Wilson with his legal knowledge and training has been able to bring to our notice certain aspects of the measure, other honorable senators have been placed at a disadvantage by the haste with which the Government has acted. In the circumstances, I ask leave to continue my remarks at a later hour this day.

Leave granted; debate adjourned.

page 2139

GOLD TAX BILL (No. 2) 1939

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McBride) read a first time.

Second Reading

Senator McBRIDE (South Australia-

Assistant Minister for Commerce) [11.34].- I move-

That thebill be now read a second time.

I ask leave to continue my remarks at a later hour this day.

Leave granted ; debate adjourned.

page 2139

GOLD TAX COLLECTION BILL (No. 2) 1939

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McBride) read a first time.

Second Reading

Senator McBRIDE (South Australia-

Assistant Minister for Commerce) [11.36].- I move-

That the bill be now read a second time.

I ask leave to continue my remarks at a later hour this day.

Leave granted; debate adjourned.

page 2139

QUESTION

CUSTOMS TARIFF (No. 3) 1939

First Reading

Debate resumed from the6th December (vide page 1989), on motion by Senator McBride -

That the bill be now read a first time.

Senator COLLINGS:
QueenslandLeader of the Opposition

. -I ask leave to continue my remarks at a later hour this day.

Leave granted; debate adjourned.

page 2139

QUESTION

EXCISE TARIFF (No. 2) 1939

First Reading

Debate resumed from the 5th December (vide page 1989), on motion by Senator McBride -

That the bill be now read a first time.

Senator COLLINGS:
QueenslandLeader of the Opposition

– I ask leave to continue my remarks at a later hour this day.

Leave granted; debate adjourned.

page 2139

QUESTION

REVISED ESTIMATES 1939-40

Consideration resumed from the 5th December (vide page 2043), on motion by Senator McBride -

That the papers be printed.

Senator AMOUR:
New South Wales

– I am concerned to find that, although the Government is providing in these revised estimates for the expenditure of many millions of pounds, no indication has been given that any substantial progress will be made in the providing of work for the unemployed. As the Government wishes to obtain this money for defence and other purposes, it should at least have indicated that it intended, especially at this time of the year, to provide work for men who are to-day without it. An amount of £850,000 has been allocated to the Government of New South Wales in connexion with defence works in that State. Originally, we had what was known as the Spooner scheme in New South Wales, which was later altered to some other scheme that provided that men should work on the roads under the jurisdiction of the Main Roads Board or the Public Works Department, in some cases for two weeks in four, in others for two weeks in eight, and so on. The State Government also increased the rate of the unemployment tax for the purpose, it was said, of relegating the whole unemployment relief scheme to oblivion and of substituting for it a policy under which all men would be paid full award rates, and be given award conditions. The £850,000 which the Commonwealth Government has i~ voided was to have been expended, we understood, on road work, in addition to such works that were already in hand. What is actually happening, however, is that the State Government is simply transferring unemployed men from works the cost of which was being met out of its own funds, to works which would he paid for from the Commonwealth grant. In actual fact, not a single additional unemployed man has been employed as the result of this allocation. This is causing a great deal of concern among unemployed men, particularly in the Cessnock and Rathmines districts. I understand that some of the money is being expended on a new road somewhere on the north side of the Sydney Harbour. The Commonwealth Government must have been aware of the intentions of the State Government in this connexion, and, in my opinion, it should have taken careful steps to ensure that the money would be expended according to the agreement that was made. Although the Government of New South Wales increased the unemployment relief tax- by the adoption of what I shall call a swindle, for it called the increased tax a special income tax - the .unemployed workers ave receiving no benefit whatever from it. It is well known that, for a long period of years, only a small proportion of the proceeds of that tax has been expended for the relief of unemployment. The State Government, in fact, has defeated the purpose of the Commonwealth Government in making available the grant of £850,000. This Government should have done as the Scullin Government did years ago. When it allocated certain money to the States for the relief of unemployment it provided that the money should be expended through municipal and shire councils. Special committees were set up to ensure that this would be done. A former member of the House of Representatives, Mr. Edward Riley, Senior, wan a member of one of these committees. The council with which I am connected was granted certain money for relief purposes. If the Commonwealth Government had arranged that its grant should be expended through municipal and shire councils, which have the machinery and plant available and which also need to engage men continuously on road work, the position would have been better than it is. If that had been done work of national importance would have been undertaken and, most important consideration of all, the unemployment situation would have been relieved. The Government is not sincere in its attempts to relieve unemployment. Indeed, in order that greater numbers of recruits might he available for our military forces, it is anxious to see the position worsen a little. A man will not throw up a job in which he receives the basic wage, or an artisan’6 wage, in order to join the military forces at 5s. a day. Particularly is this true of men who have undertaken commitments in paying off furniture, wireless sets or any other articles which are of benefit to his family. The Government apparently hopes that military service at 5s. a day will appear better to the unemployed man than the dole. In that way it seeks to attract more recruits. That is most unwise. If the Government would realize that every person in the community is entitled to security, Australians to a man would be prepared to defend this country irrespective of the rate of pay they received as members of the forces. Provided he was assured that his dependants were enabled to obtain food, shelter and clothing, every one of our men would be prepared to enlist for service in the defence of Australia. The Government should realize that we are facing a common danger, and that its first consideration in the present crisis should be to unite our people. However, its present policy tends to create disunity in the community. No employable person should be in want of a job in this country. The dole will not cure unemployment. By speeding up production, jobs could be found for all. We talk of our surplus of this or that commodity, but we may live to see the day when we may wish that our surpluses of these commodities were even larger. Sufficient jobs for all of our unemployed can be found in our factories and in undertakings associated with our defence programme, such as clothing,, munitions and leather factories. To-day our unemployed are faced with the stark realism of hopelessness. It must be palpable to everyone that we cannot afford to allow one man to remain idle at the present time. Unemployment naturally brings about discontent. The bubble of this social evil may burst at any moment. The Government will then regret that it paid no heed to the representations of the Labour party in this Parliament. Millions of pounds can be found to provide bounties for the production of this or that commodity, but no money can be found in order to save thousands of our men, women and children from starvation. We never hear of a proposal of that kind from this Government. It will be a marvellous day in the history of this country when a government of the political complexion of this Government adopts such a policy. We should urge the State Governments to make much greater efforts in order to relieve the distress existing among the unemployed. We should induce those Governments to fix a uniform schoolleaving age, and ourselves provide financial assistance to every mother who cannot afford to keep her child at school up to the age agreed upon. An allowance should be paid in respect of every baby born in this country. Is Brown’s child better than Smith’s? Every child is of equal value to the nation, and no differentiation whatever should be made in such a scheme. Every mother makes the same sacrifice, and every child is of equal value to the * Commonwealth. No migrant is better than the Australian-born child. I urge the Government to give serious consideration to this proposal. In this way it can best provide for the adequate defence of this country. I have not the slightest doubt that this war will be followed by other wars. Australia, therefore,’ must become a strong nation. No provision is made under these proposals for the establishment of maternity hospitals throughout the Commonwealth. Considerable expenditure, however, is to be incurred on such works as the Governor-General’s residence at Yarralumla. Maternity hospitals represent a most urgent national work. The apathy of the Government with respect to matters of this kind is also evident in the volume of birth control advertisements appearing in the press throughout the Commonwealth. Many newspapers have been obliged to provide a special page in order to cope with this class of advertisement. It must be obvious that such advertising is payable to those responsible for it. Thousands of people respond to it because they have no desire to bring into the world children for whom they are unable to provide. Advertisements of this kind should be prohibited. Although a censorship of news exists, and we are consequently given very little information concerning the war, no action is taken to deal with these pernicious advertisements. One can only conclude that they do> not run counter to the Government’s general social policy.

Although it is the lineal successor to the Lyons Government this Government has failed to implement the promise on which the Lyons administration was elected - to provide adequate and healthy housing for the people. The late Mr. Lyons promised that if returned his Government would provide £20,000,000 for such a scheme. We find, however, that a few houses only have been built in the Austral! -n Capital Territory and in the States. 2 To serious attempt has been made to overcome the shortage of housing. Quite recently the State Government of New South Wales feebly embarked on a scheme of this kind bv erecting tenements at Erskineville. No provision whatever was made to ensure that the slums vacated by the tenants of these flats would not be reoccupied. Those places should have been condemned, but we find that other people are now inhabiting them under conditions hardly suitable for pigs. Just as it attempted to repudiate its promise to pay the members of our newly organized defence forces 8s. a day, this Government has forgotten all about its £20,000,000 housing scheme.

Senator McBride:

– This Government never committed itself to such a scheme.

Senator AMOUR:

– The Lyons Government did so at the elections in 1934, and again in 1937 ; and the honorable senator was elected to the House of Representatives on that policy.

Senator McBride:

– I was elected on the policy of the Government at the time.

SenatorFraser. - And that policy in- cluded a proposal to provide £20,000,000 for a housing scheme.

Senator AMOUR:

– As I did not have an opportunity yesterday to deal with the shipbuilding industry I shall now say a few words on that subject. It is a pity that the Government did not provide a bounty in respect of vessels up to 10,000 tons gross, Australian shipbuilders are capable of constructing vessels in excess of that tonnage. I say that because the Ferndale and the Fordsdale, both refrigerated vessels, were constructed in Australian shipyards. Because of the vulnerability of overseas shipbuilding yards Australian yards are more favorably placed and should be given every encouragement. I believe that if the Government had extended the bounty to cover ships in excess of1,500 gross tonnage, a wonderful fillip would have been given to the industry in this country and employment would have been provided for thousands of Australian workers.If encouragement were given to the homebuilding and shipbuilding industries, thosetwo industries alone would be able to absorb the great majority of those who to-day cannot secure employment. The Government, however, contents itself by bringing forward this proposal, which, although it is a step in the right direction, does not go nearly far enough. It should widen the scope of the bill to provide for the payment of the bounty on ships of from 5,000 to 10,000 tons gross register. The Government proposes to permit the entry into Australia, duty free, -of boilers arid auxiliaries imported for use in vessels constructed in Australia which are eligible for the bounty. Those boilers could be constructed at Garden Island, Mort’s Dock, Newcastle or Melbourne.

I believe that if the boiler-making industry were encouraged by the imposition of a protective tariff duty, boilers and auxiliaries equal to any imported from abroad could be constructed in Australia. “When people say that we are not capable of doing this or that, they are only talking so much humbug: Give the Australian manufacturer and the Australian workers the blue prints and they, can manufacture anything.

Senator Allan MacDonald:

– The difficulty arises not so much in connexion with boilers as with engines, which are mostly of the Swedish motor type.

Senator AMOUR:

– If Swedish firms were given an opportunity to manufacture boilers and engines here, they would soon set up the necessary plants. They “are not encouraged to establish branches here because the policies of the Commonwealth and State Governments are largely dictated by the Broken Hill Proprietary Company Limited, and other influ- ential firms such as the Davis Gelatine Company, which resent any inroads on their domains. These firms are represented on the Industrial Advisory Panel appointed to assist the Government, and I have no doubt that their nominees are able to persuade the Government not to encourage foreign firms to establish branch plants in Australia. “We have the best workmen in the world in this country and every encouragement should be given for the establishment, of new and important industries. Many honorable senators opposite, particularly those in the Country party, contend that Australians should have remained merely the hewers of wood and the drawers of water. They say that Australia is purely a rural country. If the Country party could get away with it, Australia would still be in that position. I frankly admit that the Broken Hill Proprietary Company Limited has done a tremendous amount of good for Australia. I should like to see four or five such organizations established in this country. My only objection to the Broken Hill Proprietary Company Limited is that it exercises an undue influence on Australian governments. The fact that it employs about 30,000 people does not give it the right unduly to influence the decisions of governments. I commend the company for its treatment of Australian workmen; it pays wages as high as those paid by any other concern in the Commonwealth, and a lot higher than those paid in India, in Japan, and even in i;he United Kingdom, lt is able to export iron and steel from Newcastle to all parts of the world and to land it at its destination at a price lower than that of its competitors in India, America or Great Britain. The success of the organization, however, has been achieved, not so much by the able guidance of such gentlemen as Mr. Essington Lewis, as by the ability of the Australian workmen and their willingness to do a fair day’s work for a fair day’s pay. At Mort’s Dock recently a boiler, of modern type, weighing 60 tons, was constructed for the new pilot steamer Captain Cook. If the Government had extended the bounty to cover ships of from 5,000 to 10,00Q tons gross register, only four vessels within that range would have been constructed outside Australia between the years 1932 and 1938. For the 20-year period 1919 to 193S, ships built for the Australian trade outside Australia totalled 1S,016,S93 tons. Had those ships been built in this country, the industry would now be in a flourishing condition and remunerative employment would have been provided for thousands of Australian workmen.

Yesterday, Senator A. J. McLachlan made the remarkable statement that if the Deutschland or the Admiral Scheer were in the vicinity of Australia some of our naval craft would have had to seek shelter. When the Fisher Government proposed to build the first Australian Navy the anti-Labour critics of that Government derisively said that we would see sardine tins floating round our CO” St. Apparently the honorable senator is of that opinion to-day.

Senator Dein:

– Our naval vessels would be outranged by either of the two Gorman pocket battleships.

Senator AMOUR:

– The Australian is never outranged. He is as good a strategist as is to be found in any country in the world. I resent the imputation behind the honorable senator’s assertion that the men of the Australian Navy would not stand up to a foe even though they were hopelessly outranged. -The honorable senator should apologize to the boys of the Australian Navy for such an unworthy statement.

Senator Dein:

– The honorable senator does not seem to understand what Senator A. J. McLachlan meant. Has the honorable senator ever made a comparison between the armament of our naval vessels and that of the German pocket battleships ?

Senator AMOUR:

– I know, at least, that the Australian Navy would never seek shelter in spite of inferior armament.

Senator Dein:

– Many of the vessels of the Australian Navy are equipped with six-inch guns whereas the German pocket battleships carry eleven-inch guns.

Senator AMOUR:

– The Australians have never been guilty of running away.

Senator Dein:

– The honorable senator does not quite understand.

Senator AMOUR:

– I do understand. If the Deutschland or the Admiral Scheer appeared off the Australian coast the Australian Navy would go out and deal with them, notwithstanding the fact that, as Senator Dein says, the guns’ of the Australian naval vessels are of smaller callibre than those of the German “ pocket “ battleships.

The Australian Commonwealth Line of Steamers, which was established during the last war in order to ensure shipping space for Australian export cargoes, was sacrificed by the BrucePage Government, allegedly because the enterprise was losing money. Senator Gilbson claimed that the steamers of that Line carried only 1 per cent., of Australian wheat and 3 per cent, of Australian wool. Perhaps that 13 so, but -that was not because the vessels sailed from Australia in ballast; it was because the wool clip and the wheat crop were so vast that the Australian vessels could cope with only a small proportion of the trade. Those vessels would have been running to-day for the Australian, people had it not been for one Stanley Melbourne Bruce, who is most anti- Australian. The same gentleman caused the constitution of the Commonwealth Bank to be altered in an endeavour to hand the control of that institution over to the private bankers.

He sold the Australian Commonwealth Line of Steamers to a concern which was linked up with the banks to which he wanted,to give the control of the Commonwealth Bank. He also gave away the Cockatoo Island Dockyard.

Senator Dein:

-He did not. He leased the dockyard and thereby saved £40,000 a year.

Senator AMOUR:
Senator Dein:

– Because it was losing heavily.

Senator AMOUR:

– The Cockatoo Island Dockyard lost money because the Commonwealth Government, instead of giving work to it, allowed the work to be undertaken by outside interests. The Bruce-Page government, on the plea that the Cockatoo Island Dockyard was losing heavily, leased it to the Cockatoo Docks and Engineering Company Proprietary Limited, in which Mr. G. F. Davis of Davis Gelatine and Newnes Oil fame is a leading figure. Under the direction of that company the Cockatoo Island Dockyard has become a profitable concern. That is because, whereas previously the Commonwealth Government took all possible steps to avoid the possibility of the dockyard being worked profitably, it now places all possible orders for its requirements with the firm. ‘ The result has been that the Cockatoo Docks and Engineering Company Proprietary Limited is able to pay an increased rent for the dockyard. No other man did so much against the interests of Australia as Mr. Bruce did. I have said that before and I shall say it again. That gentleman left us without ships, and freight immediately rose. If we do not acquire another fleet of merchant vessels freights will increase again. Moreover, we have not the wherewithal to shift our commodities to England unless the British Government makes shipping space available. The Commonwealth Bank would have been able to function more completely to assist the Australian people in this time of crisis had Mr. Bruce not altered its constitution. Mr. Bruce, I repeat, also gave away our national dockyard.

Senator Dein:

– Run through the list.

Senator AMOUR:

– I could tell the honorable senator a lot more. The Commonwealth Bank Board has recently applied a policy that it would not have applied a few years ago. The Government led by the right honorable member for Yarra (Mr. Scullin) from 1929 to 1931 desired an expansion of credit to put idle men to useful work. It also wanted money to provide means whereby the wheat industry could be placed on a better basis. But the Commonwealth Bank Board would not help, although in recent weeks it has agreed to some expansion of credit in order to carry on Government services. It would not finance expenditure that would have been reproductive. But there is to be expenditure for the purchase of guns. I acknowledge that guns can be regarded as an insurance provision. I agree that it is reasonable to borrow for defence. But, from the economic point of view, there is a greater justification for the Commonwealth Bank Board to provide means for the building of bridges and roads, sewerage works and the like, than for the purchase of guns and munitions, which are elements of destruction. Honorable senators, notably Senator Darcey, have had a lot to say about that. I have a letter written by Mr. DavidMcInnes, a well-known supporter in Victoria of the Douglas Credit system, to the chairman of the Royal Commission on the Banking and Monetary Systems. It reads - 24 Campbell St.,

Moreland, N.13, Vic., 24th April, 1939.

The Hon. John M. Napier,

Supreme Court, Adelaide.

Sir,

I have been studying the report of the Royal Commission on Banking and Monetary systems and in discussing paragraph 504, page 190, with some friends our interpretation of the wording varied.

The paragraph reads: “ . . . it can lend to Government or to others in a variety of ways, and it can even make money available to Governments or to others free of any charge.”

I interpret this clause as a free issue of money - free of interest and free of debt - my friends think it is a loan free of interest.

I looked over the names of the Commission to see if there was a secretary I could write to but could not find any mention of one, so am taking the liberty of writing you as Chairman of that Commission to see if you would be good enough to clear upthe issue.

YoursFaithfully.

The following is the reply by the secretary of the royal commission: -

Commonwealth Sub-Treasury.

Melbourne, C.2,

May 1, 1.939.

Dear Sir.

Ihe Hon. J. M. Napier, formerly chairman of the Royal Commission on Monetary and’ Banking Systems, has referred to me your letter to him of April 24, regarding paragraph 504 of the report of the Commission.

  1. The statement in the paragraph mentioned is to the effect that, as a matter of power, the Commonwealth Bank can make money available to governments or to others on such terms as it chooses, even by way of loan without interest, or even without requiring either interest or repayment of principal. 3, However, apart from the limitations shown in the report to the exercise of this power, it will be seen from a study of the report that, in the opinion of the Commission, the Commonwealth Bank cannot, in the interests of the community, make money available to governments or to others except on the conditions generally governing the business nf banking.

Yours &c,

  1. T. Harms. formerly Secretary to Commission.

The effect of that is that although the royal commission reported that money could be made available “ to governments or to others on such terms as the Commonwealth Bank chose, even by way of loan without interest or oven without requiring either interest or repayment of principal “, the commission was of the opinion that the Commonwealth Bank could not do that because to do so would be to interfere with banking generally.

On the 18th May last I asked the following question: -

Is it a fact that Captain Gregory, of Darwin,, chief of the Australian pearl industry, bought a cattle station at Adelaide River?

I received this reply: -

It has now been ascertained from the administrator of the Northern Territory that Captain A. C. Gregory and William Wyatt in partnership purchased Mount Bundy Station on the Adelaide River, in January, 1938, and are still the holders of the property.

I have not been able to locate the specific item in the estimates, but I understand that Captain Gregory is one of those who have benefited from the subsidy paid by the Commonwealth Government to pearl fishers in the northern waters. Australian pearlers are subsidized because they are required to pay higher wages and to pro vide better conditions than their Japanese competitors, in 1935-36 there were 27 licensed luggers, 7 master pearlers, 3 European employees and 283 alien in-, dents; in 19^6-3/, 34 licensed luggers, 8 master pearlers, 4 European employees who were typists, and 144 Japanese, 89 Malayans and Koepangers, 2 Chinese and 1 Filipino, a total of 236; and in 1937-38, 25 licensed luggers, 5 master pearlers, only 3 typists, and 121 Japanese, 92 Malayans and Koepangers, 2 Chinese and 1 Filipino, a total of 216. In 1935-36 the Commonwealth subsidy granted to the Darwin master pearlers amounted to £1,000. I do not know whether the Commonwealth Government proposes to continue this subsidy. If so, a condition should be imposed that a certain percentage of Australians must be employed. What right has this man to draw a Government subsidy simply for walking around and letting the nationals of other countries work for him? That part of the subsidy which Gregory received was used to buy Mount Bundy station. The money, if paid at all, should be used to provide employment for Australians. As usual, however, the Government is helping its friends. It is doing everything for the few at the expense of the many.

I urge the Government to take some action before Christmas to assist the unemployed. There is still a fortnight in which something can be done. Let the Government, as a gesture of goodwill do something to bring a little joy into the hearts of the wives and families of the unemployed.

Senator AYLETT:
Tasmania

– We appreciate what the Minister for Commerce (Senator McLeay) has done in the way of organizing the apple and pear industry, and his efforts to dispose of the crop. We realize also that the Minister is only one member of the Government. He, and the members of the Apple and Pear Board, have spent much time in an attempt to solve the problem’s confronting the industry, but we still maintain that more consideration should be given to the growers, particularly of Western Australia and Tasmania. This matter was discussed very fully by Senator Lamp, but there are some points which I should like to make, in order to emphasize the claims of the growers and of those who are likely to be thrown out of work unless relief be afforded. Under the scheme outlined by the board, it is proposed to make an advance of 2s. a case on apples, and 3s. on pears. This is only an advance against the sale of the fruit - it does not represent a grant by the Government. Even this advance is to be made on only 75 per cent. of the commercial crop, estimated on last year’s total. There is no guarantee that even this 75 per cent. will be marketed, and there remains 25 per cent. of the crop, for which there appears to be no chance of a market. A greater effort should be made to find a market for this part of the crop. The estimated yield for this year is 10,000,000 bushels, which is below last, year’s crop. It is anticipated that home consumption will increase by 30 per cent., which will bring the total amount disposed of up to 7,500,000 bushels. I am speaking now of apples only. It is hoped that 200,000 cases will be exported to the East. I hope that the Government will be successful in getting shipping space for these shipments, but that is by no means certain. That leaves a balance of 250,000 additional cases to be disposed of in Australia, which, added to the 2,500,000 bushels previously mentioned, makes a total of 2,750,000 cases which, the Government and the board admit, cannot be marketed. Thus, the price obtained for 75 per cent. of the crop will have to be spread -over the whole of it, so that the growers must necessarily operate at a loss unless the price be sufficiently high to compensate them for the 2,750,000 or 3,000,000 bushels that will not be sold at all. If the Government raises the price to any great extent it will be still more difficult to find a market for even 75 per cent. of the crop. There is not much hope in that direction.

Therefore, I maintain that some special consideration should be given to the growers, particularly those in Western Australia and Tasmania. For that matter, there is no guarantee that the growers in any of the States will be able to find a market for even 75 per cent. of the crop. The chairman of the Apple and Pear Board has advised the Minister for Agriculture in Tasmania that growers should not order more than 50 per cent. of the number of cases which would ordinarily be required to ease their crop. As every one knows, the growers must make arrangements before the commencement of the packing season for supplies of cases. It would appear, therefore, that the growers may rely absolutely on find ing a market for only 50 per cent. of their crop. If that be so, the Tasmanian growers will suffer a loss of £570,000. Even if things work out as the board hopes, the Tasmanian growers will still lose more than £300,000. Seeing that there is no hope that the growers will receive sufficient for their crop to pay expenses-

Senator McBride:

– That is not correct. It has never been admitted that there is no hope:

Senator AYLETT:

– According to the board’s own figures, this year’s crop is estimated to be 10,000,000 bushels.

Last year, 4,712,000 bushels was exported, but we can see no prospect of obtaining shipping space for any exports at all this season. Every day the position appears to become worse because of the enemy’s mine-laying and submarine campaign against shipping. We have been told that there is a market for wheat in England if we could get it there, so we may presume that what shipping space is available will be used for wheat rather than for apples.

Senator McBride:

– They are entirely different kinds of cargoes.

Senator AYLETT:

– No doubt, but the position still seems to be pretty hopeless so far as the export market for apples is concerned. Last year the home market absorbed 5,288,000 bushels. This year it is hoped to increase that by 30 per cent., which will account for another 1,762,000 bushels. Even if we are able to dispose of 200,000 cases in the East, there will still be a large balance for which there appears to be no market, even under the scheme proposed by the Apple and Pear Board.

Sitting suspended from 72.45 to 2.15 p.m.

Senator AYLETT:

– The figures which I have read were based on information compiled by the Apple and Pear Board, and show that the departmental estimate of fruit below “ fancy “ or “ extra fancy “ grades is about 2,500,000 cases.

Senator McLeay:

Senator Lamp gave us all that information yesterday.

Senator AYLETT:

– If the Leader of the Senate will be patient I may be able to give him information additional to that supplied by Senator Lamp yesterday. The figures show that only 1,800,000 cases, or about 37£ per cent, of the 4,800,000 cases estimated to comprise the commercial crop in Tasmania, will be packed. In other words, about 62 per cent, of the crop may not even be cased, and the loss to Tasmania under this scheme will be considerably more than £500,000. Other industries, notably timber and case making, will also suffer. Since the Government is arranging to finance the wheat pool to an amount of about £27,000,000, there is every justification for the request from fruit-growers for additional assistance.

Senator McLeay:

– The finance to be provided for the wheat industry is in the form of an advance.

Senator AYLETT:

– So will the proposed assistance for the apple and peargrowers be. All that we ask is that the Government shall treat the apple and pear industry as equitably as it proposes to treat the wheat-growers. There should be a first advance of 2s. 6d. a. case and a later advance of 2s. 6d. for all apples packed for market. We are asking also for another ls. 6d. a case on the additional 3,000,000 bushels that will not be marketed this year.

Senator Leckie:

– The fruit could probably be bought at that price.

Senator AYLETT:

– But the Government proposes to commandeer the entire crop, and place its disposal under the control of the Apple and Pear Board, so growers will not be able to market that 3,000,000 bushels.

During the last few years, wheatgrowers have received assistance in ono form or another amounting to approximately £14,000,000. There is no reason why apple and pear growers should not be placed in the same position. Indeed, there is more reason why they should receive every assistance, because land usually sown to wheat will not deteriorate if it is unused for a season, whereas orchards require constant attention. If they are not cultivated for even one year, the quality of the fruit will deteriorate, and if orchards are neglected for two or three years, they will be practitically rruined. The Leader of the Senate (Senator McLeay) should realize the importance of this industry to Australia and the urgent need for assisting growers in the smaller States, which do not benefit so much as do the larger States of New South Wales and Victoria from the expenditure of government money on defence works. 1. am not complaining that, in its defence programme, the Government is not doing what it believes to be necessary for the safety of Australia; but it is a fact that a much greater volume of employment will be provided by defence works in the larger . States than in, say, Tasmania. Consequently, those workers who lose their employment in the fruit-growing industry will not have the same opportunity to obtain work in other avocations.

Senator McLeay:

– What about the grants to Tasmania? The mainland States contribute to that form of assistance.

Senator AYLETT:

– That matter has been thrashed out very thoroughly on many occasions, and I do not wish to reiterate what I have said in respect of it. Senator Lamp proved last night that we are quite justified in urging that further consideration be given by the Government to the apple and pear industry. I remind the Leader of the Senate that, on’ a previous occasion, when I warned, him of the position of the apple and pear growers and suggested that we might be forced to make a request for further assistance, he told me, by way of interjection, that the Government would not take any notice of requests from Tasmania.

Senator Herbert Hays:

– When was that said by the Leader of the Senate?

Senator AYLETT:

– Some time ago. I am now appealing to the honorable gentleman to forget what he then said, and consider whether it. is possible to give further assistance to this industry. If the Government does not heed our request, the fruit-growers will at the next election remember the remarks made by the Leader of the Senate.

There has been considerable discussion on the subject of military pay and the treatment of Australian soldiers. Some honorable senators have spoken about an equality of sacrifice, about which, seemingly this Government is not much concerned, because it proposes, early in the new year, to conscript the young men of this country for military training, and to pay them only 5s. a day. I ask honorable senators to compare that sacrifice, or rate of payment with the “ sacrifice “, in the form of a 10 per cent, increase of shipping freights recently authorized. Shortly after the war the representatives of the shipping companies got busy and there were statements in the newspapers of an increase of 20 per cent, in shipping freights owing to war condition. But the Commonwealth Government, following a consultation of Federal and State Ministers and officials, adopted a scheme for the control of prices, and appointed Professor Copland to the position of Commonwealth Prices Commissioner. This price fixing authority, after an investigation of all the circumstances authorized an increase of shipping freights by 10 per cent. I doubt very much if even that increase is justified, because it is only a few years since a company, offered to transport all of the produce, from Tasmania to mainland ports at -6s. a ton less than the then ruling rate provided it was guaranteed the whole of the produce. This offer would indicate that shipping freights were never down to bedrock at the outbreak of war, as had been alleged, and- it cannot . now he claimed that shipping companies, which have been permitted to increase freights hy 60 per cent., are making a sacrifice comparable to that of compulsory military trainees, many of whom will lose 50- per cent, or more of their wages. Many measures passed by this Parliament for the payment of bounties fix the maximum profit allowable at 10 per cent., so it cannot be said that those who participate in such bounties make a sacrifice equivalent to that required of those Australian workers who are required to go into camp for the purpose of being trained to defend this country. This is a matter of great importance and it should be discussed free of party politics. It certainly has been so discussed by honorable senators on this side of the Senate.

The Minister for the Interior said yesterday that the British navy was Australia’s first line of defence. That being so, what will our position be if during this war the British navy is fully occupied in ensuring the security of Great Britain itself?

Senator Dein:

– We shall be isolated.

Senator AYLETT:

– Are Australians for ever to be like chickens waiting to hide under their mother’s wing in time of danger, or do we intend to make this country secure from aggression? I imagine that all honorable . senators are well aware of the nature of the message communicated to the Commonwealth Government by the Government of Great Britain not very many months ago. On that occasion the British. Government stated that, in time of national emergency, the duty of the British navy would be first to protect the British Isles, secondly to protect the trade routes, and thirdly to protect the interests of the dominions. That message suggested that is was the duty of this Government to give first consideration to the defence of Australia.

The Opposition claims that Australia could make its most effective contribution to the defence” of the Empire by strengthening its own defences in order to enable it to repel an invader. That would be preferable to sending our troops overseas. It would be unwise for us to depend wholly on the British navy. Since our primary products are essential to Great Britain, it is necessary for us to maintain that supply, and to defend our own land, should the British navy be engaged elsewhere.

Senator McLeay:

– Could we supply Great Britain with the goods it needs, or defend this country without the aid of the British navy?

Senator AYLETT:

– The Leader of the Senate (Senator McLeay) well knows that the war is developing in such a way that it will probably be fought upon different lines from those of the last war.

Senator Collett:

– How does the honorable senator know that?

Senator AYLETT:

– The British Government has already advised the Commonwealth Government of the urgent necessity for a comprehensive Empire scheme of air defence. Otherwise why has the Government entered into negotiations with Great Britain regarding such a scheme? I doubt if even a country like Japan has a sufficiently large mercantile marine available to land on Australian shores a large army, with the necessary food supplies, munitions and other equipment. That is the only country from which we need fear an invasion. The Minister asked how Australia could be defended by strengthening its air defence. The Opposition claims that we should provide several thousand up-to-date bombing planes, and train the necessary pilots to operate them, at the same time paying close attention to coastal defence at vulnerable points. I consider that a strong air force would adequately protect Australia from surprise attacks. “With its population of 7,000,000, and a defence force of the right kind, this country could be adequately defended, arid it would be able to maintain its supply of raw materials to Great Britain.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– How would the honorable senator take them across the seas?

Senator AYLETT:

– I doubt whether ‘ the honorable senator himself could answer that question. I assume that he is in favour of Australia exporting troops overseas, to be slaughtered next year, and I warn him of the danger of German mines and submarines. As to primary products, if Australia were isolated from Great Britain, our people would not starve. If the British navy could not render assistance in the defence of thetrade routes, it would be far wiser for us to concentrate on the defence of out own coasts than to attempt the task of building up a naval force sufficient to keep the trade routes open. If the British navy could not discharge that function, Britain would be the principal sufferer.

The Leader of the Senate said that it is necessary to send troops overseas in order to prove to Germany, and also to Britain itself, that Australia stands behind the Empire. Surely the British Government has never doubted the loyalty and sincerity of Australia iri that matter.

Senator McLeay:

– It doubts the sincerity of the Opposition, and it has every reason to do so.

Senator AYLETT:

– Such a statement is quite uncalled for, since every politi cal party in Australia is pledged to take its full share in the defence of the Empire. The parties in this Parliament may differ as to the best means to adopt in order to achieve that end.

The Labour party claims that the maximum of Australia’s man-power is the minimum required for the defence of this country; but a big difference of opinion on that matter exists even among Government supporters. Senator Dein, only last Friday, wanted to know what would happen to Australia if Great Britain were beaten in this war. He said, “ We should be hopeless on our own “. Let us contrast that remark with a statement by the Assistant Minister (Senator Collett) that Australia had more men that it required for its own defence. Senator Brand remarked more than once, “ We cannot afford to send troops overseas again”. We of the Opposition concur in that opinion. When the Attorney-General, Mr. Hughes, launched a campaign last year to secure recruits for the militia, he prophesied that countries that were our allies in the last war might not be our allies in the next. He also said ” ~No Australian force will be sent abroad in the next war”. Up to the present time the forecast of the right honorable gentleman has proved correct. Although certain countries have not yet declared themselves to be against us, one of them, at least, according to the press, has used angry words in referring to Great Britain, because its policy has interfered with that country’s trade with Germany.

Recent experience shows that it is of no use to rely on foreign powers to honour treaties or pacts of nonaggression. To prove this statement it is only necessary to remind honorable senators of Germany’s invasion of Austria and Czechoslovakia, and of Japan’s invasion of China. Practically every provision of international law has been violated. Who can tell that Australia will not be the next country to suffer, particularly if it sends the pick of its manhood to Europe? What would be the moral affect upon Australian troops engaged overseas if they received news that Australia had been invaded, leaving their mothers, sisters, wives and sweethearts at the mercy of a foreign power? Senator Dein remarked that members of the Labour party desired others to do the fighting while they took cover at home. That is not the attitude of the Opposition to the important subject of defence, although it may express Senator Dein’s personal feelings regarding it. We have a duty to perform to the British Empire and to our own people in Australia. If Australia were lost, supplies of primary products worth over £100,000,000 annually would be cut off from Great Britain in its hour of greatest need. I remind Senator Dein that the Labour party would be prepared to fight to the last man to defend Australia and its great supply of primary products which are vitally necessary to Great Britain. The application of science to war has set distance at naught, and before this conflict has finished the front line of fire is just as likely to be in Australia as anywhere else.

Senator Collett:

– Who is the honorable senator’s expert on these matters?

Senator AYLETT:

– I am guided by common sense. Common sense is all that is needed to tell any man that modern scientific developments have brought Australia within reach of the war machines of almost any country of the world. We must be prepared to meet all contingencies; we must be prepared adequately to defend this country, which is one of the most valuable parts of the British Empire. If the Government does its duty it will not let down the people of Australia by sending troops overseas, and so denuding this country of its man-power that it will be left defenceless. If this country’ is to be defended adequately, it is essential that all the vital industries of war be developed to their fullest extent, and that all available man-power be retained. Let us devote our efforts to putting our artisans to work in order to keep our primary and secondary production up to its fullest capacity, and so ensure to Great Britain an adequate supply of all those materials which are so essential in time of war. It cannot be denied that food and supplies are just as important to the Allies as are guns and munitions. To Senator Dein, who has interjected frequently in the course of my speech, I say emphatically that we on this side of the chamber are prepared to do our utmost in the interests of the defence of this country. Senator Dein has suggested that the Labour party would endeavour to defend Australia with untrained men. That is not our policy at all. We -agree that training is absolutely necessary if an efficient defence force is to be built up. I emphasize, however, that these trained men can be obtained by voluntary recruitment. There is no need to introduce conscription for military training, as this Government proposes to do.

Senator Wilson:

– What about equality of sacrifice?

Senator AYLETT:

– There is none whatever in the policy of this Government. How can there be equality of sacrifice when men are to be conscripted for military service at 5s. a day while, on the other hand, the profiteers are to be permitted to go on amassing huge fortunes out of the misfortunes of others. I would like Senator Dein to tell honorable senators just what steps he has taken in order to prepare himself for the defence of Australia. That is something that he should take into consideration before he attempts to cast slurs on honorable senators on this side of the chamber. I remind him also that many honorable senators on this side of the chamber did volunteer their services and they would have been in camp now had the Government not refused their offers to enlist.

Yesterday the Senate debated the shipbuilding industry, and I propose to deal briefly with the arguments advanced so brilliantly by Senator A. J. McLachlan, and supported by Senator Herbert Hays, in defence of the disposal of the Australian Commonwealth Line of Steamers. ‘ Had that Line been retained it would have been of the utmost value to Australia to-day, and it would have enabled us to extricate ourselves from the great difficulty in which we are now placed. Quite apart from war considerations these ships should have been retained by the Commonwealth in order to provide a safeguard against the introduction of cheap labour on Australian trade routes, and the consequent usurping of our maritime trade by the shipping lines of other countries. Also, had the Line been retained, employment would have been given to thousands of artisans in executing repairs to the ships in various dockyards throughout the Commonweal th.

Senator Herbert Hays:

– -Fifty per cent. of the men engaged upon the Australian Commonwealth Line of Steamers were domiciled in other parts of the world.

Senator AYLETT:

– Honorable senators opposite claimed that the Line was operated at a great loss to Australia. That is definitely untrue. No evidence has been adduced in support of that statement.

Senator Herbert Hays:

– I rise to a point of order. The honorable senator has said that a statement made by me is definitely untrue. I submit that the honorable senator is not entitled to make such an assertion.

The PRESIDENT:

– I call upon Senator Aylett to withdraw the remark.

Senator AYLETT:

– I withdraw it, and say that the statement was definitely incorrect and misleading. The honorable senator claimed that the Australian Commonwealth Line of Steamers imposed a heavy burden upon the people of Australia because of losses incurred in its operation. Actually the contrary is the case; and the Line was saving the people of Australia approximately £2,000,000 a year.

Senator Cooper:

– That was not the finding of the Public Accounts Committee which inquired into the operation of the Line in 1927.

Senator AYLETT:

– Two honorable senators who participated in the debate on the shipbuilding . industry yesterday emphasized that the Australian Commonwealth Line of Steamers had been operated at a considerable loss, and they quoted as their authority statements by the manager of the Line.

Senator Herbert Hays:

– I did not quote the manager.

Senator AYLETT:

– For the information of honorable senators I shall read a. report which appeared in the Melbourne Herald on the 3rd October, 1927:

page 2151

FEDERAL SHIPS CLAIMED TO HAVE SAVED £2,000,000 A YEAR

Freight Reductions as Set Off to Trading Losses.

As soon as members of the House of Representatives have had time to study the report of the Committee of Public Accounts on the Australian Commonwealth Shipping Line, a full-dress debate is expected at Canberra on the future of the Line.

The majority of the committee reported in favor of abandoning Government control.

The manager of the Melbourne branch (Mr. J. T. Brennan), in a statement to-day, reviewing the troubles with which the Line had been beset since the war, claimed that it had saved over £2,000,000 a year since 1923 to Australian exporters and importers in reduced freights. “ Although the primary motive actuating the then Prime Minister (Mr. Hughes) when he purchased the nucleus of the fleet in 1910 was to ensure the carriage of vital necessities to and from Australia, another factor which subsequently arose and menaced Australian importers and exporters provided an opportunity for the Line to justify its existence on other grounds altogether “, said Mr. Brennan. “ During the war freight rates, naturally, were abnormally high, but a tendency became apparent to increase- rates unjustifiably,and it was then that the Commonwealth Line realized its destiny - which was not only to help carry Australia’s produce, but to ensure that such produce would be carried at reasonable rates, and not at such a figure as might have impoverished the country.

Keeping Down the Freights. “ As an indication of the trend of affairs not long after the formation of the Line, the following extract from The Times Trade Supplement, December, 1919, is interesting: -

Freight charged by the Commonwealth Government Line, although in excess of pre-war rates, have always been much below those charged by shipping companies. When ruling rate for wheat to the United Kingdom was 125s. c.g.l. rate was 120s. Later, when ruling Tate was 235s., c.g.l. rate was 150.’ “ In March, 1920, it was proposed to increase United Kingdom rates owing to the high price of bunker coal in England, but as our Line would not agree the proposal was abandoned Next month, in April, 1920, the North Atlantic lines increased their rates by 25 per cent. on rough cargo, and up to 50 per cent. on fine goods on account of high working expenses; South African lines increased rates by 10s. per ton, the reason given being the high price of bunker coal and working expenses generally. “ The fact that the rates were increased by the North Atlantic and South African lines and not by the lines trading to Australia shows definitely that even then the Commonwealth Line acted as a check.

Lightening the Burden. “ In September, 1920, the Conference lines proposed to raise the freight on scoured wool by¼d. per lb. Our Line would not agree to this and rates were not raised. “In 1923, owing to economic conditions. Australian exporters and importers were seriously embarrassed by the ruling freight charges, and to afford them the much-needed relief, on January 22 of that year, the Line announced that its rates to the United Kingdom were reduced by 12½ per cent., refrigerated cargo by id. per lb., fruit by ls. per case* and butter by (id. per box. Freight from the United Kingdom to Australia were simultaneously reduced by 10s. per ton, and in these reductions the Line was followed by the Conference lines. “These reductions resulted in an enormous saving to the producers and consumers in Australia, and were of very great benefits to the population of Australia as a whole. “ Again, on July, 1920, the Line announced a further reduction in freight rates from Australia of 10 per cent, on all general cargo, id. per lb. on all classes of skins, on wool, and on all classes of frozen cargo; a reduction of Gd. per box on butter and a similar amount on each case of apples and other fruit. “ We estimate the average yearly tonnage of exports and imports to and from Australia and the United Kingdom as over 4.000,000 tons, and 10s. per ton represents a ‘saving of £2.000.000 per annum, but this figure is very conservative, as the Line has reduced freights by considerably more than 10s. per ton since 1923, besides having prevented increases in rates before that year. “The Line’s competitors have .often tried in the past, and still vainly attempted to spread the idea that it has done nothing in the matter of controlling the doings of the combine. This is attempted notwithstanding that abundant undoubted documentary evidence is available to the contrary, and notwithstanding that the Federal Parliamentary Committee of Public Accounts, which has just presented its report to the House, has said quite definitely and unanimously that the Line has not only been directly responsible for actual reductions in freight, but that the presence of the Line has exerted a material restraining influence against proposed increases. “ This Committee took evidence on oath, and had recourse to documents to verify its findings. (Extension of time granted.’]

Senator AYLETT:

– The report continues - “ Tt has even, indeed, been mentioned recently that, instead of being an instrument for reducing freights, the Line was responsible for keeping freights up by putting extra and unwanted tonnage in the trade. What a weak and superficial statement this is when it has only to be remembered that prior to the coming of the Australian Commonwealth Line’s small fleet, two large German lines were trading to Australia. It might also be observed that people m,ho talk like this do not apparently study the cables, or they would know that, notwithstanding the alleged surplus of tonnage in the trade. the other lines trading to Australia are busy building new tonnage for it.

Speeding Up. “It is claimed by the Line that it has compelled liners trading to Australia to speed up. Before the coming of the Bay and Dale steamers the average liner passage to Australia was 33 days. The Bays accomplished the journey in 29 to 30 days, and the non-passenger Dales have on occasion got it down to 28 days. These Bays and Dales are the pioneers to Australia in oil fuel, and two years later the private lines were shamed into attempting the same principle (so much more comfortable for passengers), and also into accelerating their speed by a knot and a half. “The Line was responsible for killing the pernicious rebate system (illegal in this country) and for substituting a voluntary agreement and a net rate of freight. “ In many other ways the Line has made’ itself felt - for instance in the matter of claims. Inquiry among consignees, it is claimed, would elicit the fact that whereas prior to the competition of the Australian Commonwealth Line, the attitude generally adopted was a take-it-or-leave-it one, nowadays claims are promptly, and, more often than not, generously met “.

Senator Herbert Hays:

– Could not similar arguments be used concerning the shipping line which a Tasmanian Labour Government disposed of after the last war?

Senator AYLETT:

– The disposal of that line wa« duo largely to the bungling of the late Sir “Walter Lee, who was Premier of Tasmania at that time. The information that I have placed before the Senate this afternoon proves conclusively that the statements of Senator A. J. McLachlan and Senator Herbert Hays with respect to the Australian Commonwealth Line of steamers were grossly misleading. The Melbourne branch manager of the Australian Commonwealth Line of steamers has shown that it was of inestimable value in keeping down freights, and in that way primary producers and others reaped the benefit. I sincerely trust that the Government will’ provide an opportunity for the Senate to debate the motions for the printing of other papers, before Parliament goes into recess, so that we may deal with other important problems confronting Australia in this critical period.

Senator ABBOTT:
New South Wales

– I wish to deal, briefly with a matter which is governed by our invalid and old-age pension legislation; but in doing so I do not make any complaint against the officials of the department from whom I have received every possible courtesy and assistance. I am ventilating this matter because I feel that all honorable senators and members of the House of Representatives have had experience of cases similar to that which I propose to relate. A young man named Allan Newling, in the Scone district of New South Wales, met with a severe accident during ploughing operations. His brother took a ploughing contract from a friend of mine in the locality, and, as a contractor, used his own bullock teams and plough and was in no way under the direction of the owner of the property. The contract was for ploughing a lucerne paddock at a certain price per acre, to prepare it for a new sowing of lucerne. Owing to a continuance of drought conditions the country was particularly dry, and ploughing presented a very difficult problem. The contractor sought the assistance of his young brother, partly to guide the plough which bucked, and the youth was thrown to the ground and the plough fell on him. A leg was broken and he was taken to the hospital where it was placed in plaster ; but unfortunately, after a week or so, gangrenous conditions developed and eventually the limb had to be amputated. Unfortunately there is no redress for thi3 young man. There is no- law under which he is entitled to compensation, and his brother for whom he was working in a friendly way was an independent contractor. Under the Workmen’s Compensation legislation, compensation would. not have been payable even to the contractor had the accident happened to him, and consequently the youth is not entitled to compensation. The young man is the son of a small settler in a district, which is in very difficult circumstances, and consequently is unable to assist him against the future. Sympathetic persons in the locality raised a subscription to tide him over his initial financial difficulties, including hospital « expenses; but the amount, if sufficient to provide an artificial limb, would not carry him on for long. I was asked to ascertain -whether it is possible for him to obtain an invalid pension, and I duly made the necessary representations; but I was informed that unless he is permanently and totally incapacitated no assistance can be given, because he might possibly be capable of undertaking some other class of work. That .would be possible if he resided in a capital city where he could perhaps conduct a tobacco kiosk or handle. a small business; but with prac tically no education he is in the terrifying position of being without any means of support, simply because the law does not provide for such cases. His parents know of others receiving an invalid pension whose claims are not so pressing. I suggest that the Government should consider whether some amendment of the existing legislation can be made to provide some avenue of appeal or to give a responsible officer discretionary power to afford relief after full inquiry in such cases. This is a particularly distressing case, and I trust that the Government will inquire whether discretionary power can be vested in some authority to ensure that relief can be afforded.

Debate (on motion by Senator Wilson) adjourned.

page 2153

PUBLIC WORKS COMMITTEE

Administrative Offices at Darwin.

Senator BRAND:
VICTORIA

– I lay on the table of the Senate the report of the Parliamentary Standing Committee on Public Works relating to the proposed erection of administrative offices at Darwin, Northern Territory.

page 2153

WINE EXPORT BOUNTY BILL

– Assent reported.

page 2153

GOLD TAX BILL (No: 2) 1939

Second Reading

Debate resumed from page 2139 (on motion by Senator MCBRIDE)

That the bill be now read a second time.

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

, -I suggest that the Gold Tax Bill and the Gold Tax Collection Bill, which are complementary measures, be considered conjointly.

The PRESIDENT (Senator the Hon. J. B. Hayes). - la it the desire of the Senate that- these bills be discussed conjointly ?

Honorable Senators. - Hear, hear !

Senator McBRIDE:

– In September a tax bill was introduced to impose a tax on gold equal to 75 per cent, of the price in excess of f A.9 an oz. That bill was not passed by this chamber. To avoid loss of revenue, an excise duty as from the 15th September, 1939, was imposed at the close of the session by resolution in the House of Representatives. That duty was 50 per cent, of the price in excess of £A.9. The reduction of the rate from 75 per cent, to 50 per cent, was influenced by representations made in the Senate and the other chamber for concessions to prospectors and low-grade propositions. Under the present legislation the tax will continue to be 50 per cent, as from the 15th September on gold delivered to the Commonwealth Bank or to an agent of that bank, but it has been decided to give relief to the bona fide prospector by granting to him a rebate of tax in respect of the first 25 oz. of gold delivered by him in each year commencing on the date of the passing of this legislation. “ A bona fide prospector “ means a person, other than a company, who has personally carried out the whole or major part of the field work of prospecting for and obtaining the gold delivered by him. The tax will not be imposed upon gold coin or wrought gold, unless and until the Treasurer otherwise directs by notice published in the Commonwealth Gazette. Neither will the tax be imposed on gold imported into Australia from any place not being a territory of the Commonwealth of Australia. The tax will be payable on gold delivered in Papua and New Guinea, as well as on gold produced in those territories and delivered to the Commonwealth Bank in Australia. As the Territory of New Guinea is held under mandate, it has been decided to create a trust account to be known as the “ Gold Tax (New Guinea) Trust Account “ into which shall be payable out of the Consolidated Revenue Fund all tax paid in respect of gold produced in the Territory of New Guinea, and the moneys standing to the credit of this trust account shall be applied for or in relation to the defence of the Territory of New Guinea or for other purposes of that territory.

At present the gold-mining industry is exempt from Commonwealth income tax as regards both profits of gold-mining companies and dividends in the hands of shareholders. It is also exempt from State taxation except in Western Australia and Tasmania. In Western Australia, which is responsible for threefourths of the total production of Aus- tralian gold, it is subject to the usual taxes, and, in addition, to a special goldmining profits tax of ls. 4d. in the £1.

The proposal contained in this legislation does not take from the gold-mining industry the opportunity to make profits which existed when the war broke out. The price of gold has increased considerably since then, and- half of the increase over £9 an ounce is left with the industry, although that increase of price is a fortuitous one, entirely due to the effect of the war and the consequent depreciation of sterling in terms of dollars. This is clearly a tax on unearned increment, and as such it is fair and reasonable that the Commonwealth should collect it in order to aid revenue and help to finance war activities. Fluctuations of the price of gold which follows the dollar-sterling exchange have been as follows: -

I point, out that in Southern Rhodesia the whole of the price of gold above £7 30s. sterling a fine ounce is appropriated by the Government, whilst New Zealand take 75 per cent, of the price in excess of £9 5s. 8d. (New Zealand) an ounce. On the present price of gold the rate of tax, i.e. 50 per cent, of the price over £A.9, is equal to 16s. 6d. an ounce.

Senator COLLINGS:
QueenslandLeader of the Opposition

.- I am glad that the Assistant Minister (Senator McBride) alluded to the history of this proposal since the* Government first conceived this very vicious form of taxation. The taxing of prices is not only entirely wrong in principle, but is also a dangerous precedent. However, the Government apparently is prepared to accept responsibility for it in this regard. We on this side suggest that this tax should be levied on profits. In the present national emergency we should he prepared to tax, even to 100 per cent., excess profits accruing as the result of. the war atmosphere. Indeed, I know of no other way in which this Government can show that it sincerely desires to prevent war profiteering. The difference between the proposal of the Government and that of the Opposition in regard to this matter *i** not one of the righteousness of taxing gold production. We admit the necessity for financing this war, but we differ from the Government as to the method which should be adopted in that respect. The suggestion made earlier that we attempted to deprive the Government of an important source of revenue for the purpose of financing its defence preparations is, like many more things which have been said about us, entirely inaccurate. Under the Standing Orders I am not permitted to describe the statement as untrue; but it is entirely unfounded. Once again the Opposition has been able to make some impression on the conscience of the Government. We are glad that the bill now before us proposes to do a measure of justice to the prospectors.

Senator E B Johnston:

– I think that that improvement in the measure is due to the pressure exerted by Senator Allan MaeDonald.

Senator COLLINGS:

– I should be very surprised if Senator Johnston did not claim all of the credit for himself and his colleague from Western Australia. Senators Johnston and Allan MacDonald knew that they were helpless without the full support of the Opposition.

Senator E B Johnston:

– I agree wilh the honorable senator on that point.

Senator Wilson:

– But the Opposition talked one way and voted another way.

Senator COLLINGS:

– The Opposition was perfectly consistent in holding up the previous measure. We opposed the bill in every word we said. We intimated that we would not interfere with the Government’s proposal, because we did not wish to lay ourselves open to the charge of obstructing the Government in its defence finance; but, when we found that some of the Government’s own stalwarts were not prepared to vote for this tax, we joined forces with them.

Senator Keane:

– And they were the Government’s shock troops.

Senator COLLINGS:

– That is so. I am grateful that this measure makes some concession as the result of our representations on behalf of the prospectors. However, it does not go far enough in that direction, because it is proposed to grant to the prospector a. rebate of tax in respect only of the first 25 oz. of gold delivered by him in each year. That rebate might represent only a gross value of £250 in twelve mouths* Is that an adequate concession to a body of men who, to the extent of their capacity, numbers and opportunities, are rendering as great a service to the economy of this nation as is any other section of the community in any part of Australia ?

Senator Wilson:

– The concession means a rebate of £250 a year.

Senator Keane:

– That is gross; what about treatment charges?

Senator COLLINGS:

– Would it not have been just as easy for the Government to have made a really national gesture to these men who- roam the country, under all sorts “of conditions, fossicking for gold ? The Government could easily have granted them a rebate of tax on at least 50 oz. of their production each year. If it did so, it would not make millionaires of them. Although the concession proposed is insufficient it is, in the circumstances, acceptable. We regret it is not. proposed to make any concessions to companies which are operating on low-grade propositions. Most of these concerns would not be operating at all but for the rise of the price of gold.

Senator McBride:

– They were operating before the war, when the price of gold was much lower.

Senator COLLINGS:

– And in hundreds of cases they were not making a. profit. When the increased price offers them an opportunity, for the first time in the history of many of them, the Government proposes to deny them a fair measure of that benefit.

Another point which the Government has overlooked is that the prospector, to the. extent that he is able to find gold, is producing an article which, in a war economy, is one of the most valuable commodities we oan produce. This is not because of the intrinsic value of gold, but because of its relation to sterling and finance. Once a prospector makes a find worthwhile he cannot remain a .prospector. He must take out a lease., and, in order to develop that lease, he must engage labour, and, at the same time, must register his undertaking as :i company. I still suggest that in the case of a working company of that kind - I do not mean a StOCK exchange company - in which half a dozen men are exploiting what appears to be a likely strike every individual of the company should also come within the exemption provisions of the bill. I make these recommendations to the Minister in the hope that they will have that consideration which, in my view and the opinion of my colleagues, they merit.

Senator E B JOHNSTON:
I am sorry that I am unable to support the principle of the bill. I regret that the Government has again refused to impose the tax on profits, instead of on production. With the Leader of the Opposition (Senator Collings · Western Australia [3.32],

I should have been prepared to support a heavy tax on the excess profits of this or any. other industry during the war period. The Government, I regret to say, has shown a great deal of obstinacy in this matter, although in another direction recently, it displayed a commendable willingness to compromise and to do, if riot the right thing, at all events something better than was originally intended. In connexion with this tax on gold, 75 per cent, of which is produced in Western Australia, it started out on a wrong principle, and to that it adheres, despite the fact that its first proposal was defeated in this chamber, and that the excise tariff which it later imposed and collected is of doubtful validity. I believe that these doubts supply the real reason for the introduction of this measure. The Government has not acceded to the repeated requests from those who, like myself, would like to have the tax levied on profits instead of on production. I see no reason why the gold-mining industry, in which Western Australia is so vitally interested should, as regards taxation, be placed on a different basis from all other primary industries.

Senator Collett:

– Is it not a fact that the principle adopted by the Government in this bill obtains in South Africa and New Zealand?

Senator E B JOHNSTON:

– I do not admit that the position in South Africa, where cheap coloured labour is employed in gold mining, is comparable to the position in Australia.

Senator Collett:

– What about New Zealand ?

Senator E B JOHNSTON:

– The Govera ment of New Zealand takes a percentage of the price of gold in excess of £9 5s. 9d.

Senator McBride:

– It takes 75 per cent, of the excess price.

Senator E B JOHNSTON:

– Yes. That was the first proposal brought in by this Government, and I commend it for having to some extent retraced- its steps. The incidence of this tax presses heavily on all persons engaged in the mining industry of Western Australia. They operate under State Arbitration Court awards, and wages in. the industry are regulated by the price of gold. Wages are still being paid on the basis of £10 13s. an ounce. Recently the State Arbitration Court was asked that in view of the heavy tax that had been imposed by the Commonwealth Government, the terms of the award *in that respect should again be reviewed by the Court. This suggests that the tax will result in a reduction of the wages of those employed in the industry. This is a phase of the problem to which members of the Country party have given close attention, because of its probable effect on this most valuable industry. Having regard to the important contribution in gold production which Western Australia particularly can- make to the Empire in its present difficulties, I urge the Government not to impose the tax on production. To-day, gold is by far the most important product in the whole of our national economy. There is an unlimited market for it. Unlike wheat, wool, meat, fruit and various secondary industry products, there is never a fear of overproduction of gold.

Senator MCBRIDE:

– If the Government of the United States of America ceased to buy gold, the price would drop immediately.

Senator E B JOHNSTON:

– That may be so, but the Government of that republic has not suggested that it is likely to restrict its purchases of this commodity and while it is a free buyer, there will be an unlimited world market for gold.

Although it is true that by far the bulk of the precious metal is being absorbed by the United States of America, every country would be glad of the opportunity to exchange its products for gold. While this great market exists, there will be an unlimited demand for the gold.

Senator Keane:

– Would the honorable senator tax profits?

Senator E B JOHNSTON:

-I would alter the basis of the tax from production to profits. The production of more gold is essential to Australia and the Empire, particularly during this war. We depend almost entirely on gold for our overseas credit. After the experience of the United States of America in the years following the end of the last war, when so many debtor nations failed to meet their obligations, the Government of the United States of America will expect gold for the purchase of anycommodities required by the Allies in this war. The purchase of American aeroplanes or munitions will be on a strictly cash and carry basis. Therefore, an enhanced gold output in all countries of the British Empire is essential. If we produce the gold we must have the cash for the purchase of essential war commodities from the United States of America, and the British navy will do the rest; it will ensure the safe carrying of the goods. In all sincerity, I urge the Government to give to this matter its most earnest consideration. Again I remind the Minister of the advice given on this very point in a cable sent by Mr. C. De Bernales, and used by me in the Senate during the discussion of the motion to disallow the gold tax regulations a week or two ago. Mr. De Bernales is the chairman of directors of the Great Boulder Mine, one of the greatest mines in Australia. He pointed out that, in the interest of the Empire, increased production of gold at this particular juncture was of vital importance. “ I therefore urge that, as an Empire gesture, this Government should do all that is possible to increase the output of gold in this country. One ‘means to this end is the shifting of the tax from production to profits. A few days ago in discussing another measure, I spoke of the development of low-grade propositions in Western Australia and referred particularly to the Wiluna Gold Mine, which has a capital of £1,559,012. Over £2,000,000 has been expended by that company on machinery and developmental works. The Wiluna mine is one of the most modern in the world. It gives employment to about 1,000 men and supports a town of about 7,000 people; yet for over two and a half years it has not paid a dividend.

Senator Keane:

– What grade of oreis being worked in that mine now?

Senator E B JOHNSTON:

– The company is operating on a very low grade of ore, and I am sorry to say that it seems to be tottering almost to destruction.

I acknowledge that in this measure the Government is giving some consideration to prospectors, but I regret that we have not been informed of the amount. I doubt if it will cost the Government more than £5,000 or £6,000 a year.

Senator Collett:

– It will cost very much more than that.

Senator E B JOHNSTON:

– I hope that it will. I trust also the Minister will remedy that omission in his speech, and will later tell us in more detail what this form of relief will cost the Government. The following item relating to the Wiluna mine appeared in the financial columns of the Sydney Sun yesterday -

page 2157

WILUNA’S LOSS

Accounts of Wiluna Gold Corporation, Limited, disclose a loss for the past year of £12,141, which reduces the credit balance carried forward from £20,212 to £8,071.

The directors’ report includes a statement from the consulting engineer (Mr. Binns), who considers that the Happy Jack deposit is not of the importance originally believed.

Though it will probably supply a substantia] tonnage, he says, it will be far from sufficient to save the mine.

Mr. Binns estimates the life of the mine, with reasonable safety, at 30 months from March 31, and- estimates that 1,200.000 can be mined and treated. There is no alternative, he says, but to cut expenditure to a minimum and concentrate on salving existing reserves at the greatest possible profit.

That is a company with a capital of over £1,500,000 that has expended well over £2,000,000 on machinery and development in an arid outback part of Western Australia, where, apart from the mining industry, there are only a few scattered pastoral stations. This company, which has paid no dividend for two-and-a-half years, has carried on its operations for the last year at an actual loss of £12,000, and its cash reserves are now reduced to £S,000, whilst its life is predicted to be only another two-and-a-half years. I appeal to the Government to take the position of this mine and others that are of equal economic value into sympathetic consideration. It should take a broad, national view of this matter. These mines give employment to many people. The Wiluna mine is being carried on today to benefit, not the shareholders, but a body of employees, the township of Wiluna, and the Western Australian railways. The Government of that State has adopted a generous policy in developing the gold-fields, and has expended hundreds of thousands of pounds in providing a railway to Wiluna. If, by giving relief from the tax imposed under this measure, the Government could prolong the existence of the mine and increase its output, that action should be taken.

Senator E B JOHNSTON:

– That votes goes, in the main, to the party opposite, but I hope that the Government will regard this matter apart from electoral considerations. I hope that it will not penalize the people of Wiluna because of the side in politics on which they vote. 1 shall do my best for the industry while I am privileged to have a seat in this chamber, irrespective of political considerations, which have been introduced by Senator James McLachlan into a debate which, up to this stage, has been conducted by the Leader of the Opposition, and, I hope, myself, also, on a. high plane. “

Senator Fraser:

– lt is of no use if the honorable senator pulls in one direction and his colleagues in another.

Senator E B JOHNSTON:

– Regarding -the majority of matters affecting Western Australia, honorable senators from that State who sit on this side of the chamber work whole-heartedly together, and I particularly commend the Assistant Minister (.Senator Collett) for his invaluable work in the interests of that State. One of the pleasing features of our duties in Canberra, in dealing with matters affecting Western- Australia, is that generally we have the warm cooperation of the Labour senators from that State. The Western Australian Federal members are really a united body in respect of matters of purely State interest. Let us be so in this matter.

I urge the Government to give consideration to the claims of the Wiluna gold-mine, one of the biggest mines in the Commonwealth, that is tottering to what appears to be an early and unfortunate demise.

Senator Keane:

– How could” it be kept alive?

Senator E B JOHNSTON:

– By exempting it from the operation of this tax until it declares a dividend and altering the incidence of the tax. I ask that the same measure of consideration that I am appealing for on behalf of Wiluna should be granted to the many other small and large low-grade properties which are being carried on by those sturdy optimists, who have expended large sums of money on shows many of which have not proved to be very productive and many others of’ which have been quite unproductive. Until a mine becomes productive it should be entirely exempt from the incidence of this tax. I thank the Government for the fact that prospectors are to be exempt in respect of the first 25 oz. of gold recovered by them in one year, but that exemption is not sufficient. The Government could well have extended it to 50 oz.

Senator Allan MacDonald has been most active in regard to this matter and, in my opinion, he is responsible, with the co-operation of honorable senators opposite, and myself, in defeating the first bill, for the fact that this measure has been belatedly introduced. 1 do not know whether the exemption will be retrospective, but, if not, I urge that, this little crumb be made retrospective to the time when the tax was introduced last September. The prospectors will receive this small measure of relief with gratitude, but we should consider the tremendous hardships that their work imposes. They go out into the back-blocks, far away from railways, for the gold left to be found is mostly in the very arid and inaccessible localities where travelling is dangerous, particularly owing to the shortage of water. Bleached human bones in many of the outback parts of Australia indicate the penalty that the prospectors have paid in following their calling. For them, as for the lowergrade mines, I ask the Government to give a much larger amount of consideration than is shown in its present proposals.

Senator CUNNINGHAM:
Western Australia

– I still think that the Government is altogther wrong in its attempt to impose a tax on the production of gold. I shall oppose the second reading of the bill, and in committee, if I have an opportunity, I shall suggest certain amendments.

Senator ALLAN MacDONALD:
Western Australia

– The Government would have been much better advised if it had given more consideration than it apparently has given to my suggestion that the proposal to tax the industry should be investigated by mining experts and competent Treasury or taxation officials. In this bill, however, we have to face facts, and the outstanding fact is that, if this bill were defeated, the excise would continue to operate for some time, and the small prospectors would continue to be penalized, as they are by the incidence of the excise. I regret that the Government did not see fit to grant a greater exemption to prospectors than has been provided for in this bill, and to include low-grade mines in that exemption. The exemption for the first 25 oz. of gold represents merely gross earnings, which are equivalent only to the amount paid in many of the mining districts of Western Australia as the recognized basic wage. Workmen on the goldfields are not called upon to pay the amount of tax to which the prospector is liable under the excise duty. It would appear from the bill that if in the ordinary course of events a prospector submits his ore for treat-‘ ment at a state battery, or if he is fortunate enough to find fine gold, the tax will not be imposed at all, and it will be necessary for receiving agents to keep a record of the amounts won by each prospector from time to time. Prospectors will have to be sure that the tax is not charged until after the first 25 oz. have been won. Taxation has a much wider implication in the mining industry than in other industries, because by burdening the mining industry with excessive taxes the Government will encourage what is known as selective mining, and no encouragement at all will be given to the mining of the low-grade ore upon which the life of any gold field largely depends. That is to say, if, as’ a result of this tax, prospectors or companies will only pick the eyes out of the country, very little developmental or exploratory work will take place in low-grade country. It is the low-grade country which predominates, and upon it largely depends the future of the gold-mining industry in States such as Western Australia. I think that the Commonwealth Government has recognized that fact in the past by exempting the mining industry from taxation. That, however, does not apply to the State governments. For years successive governments in Western Australia have taxed the gold-mining industry, the tax representing, in many cases, 19 per cent, of the profits. By not entering into this field of taxation, the Commonwealth has conferred extensive benefit upon that industry and given encouragement to its expansion. The Minister in charge of the bill compared the conditions in Australia with those obtaining in South Africa, but, as I said in the course of the previous debate on this matter, there is no analogy between the two countries. Such comparisons are not very helpful and should not be made. Costs and conditions in the gold-mining industry in Australia are totally at variance with corresponding costs and conditions in South Africa. This taxing measure will now take the place of the excise and is operative as from the 15th September. The effect on the gold-mining industry of this legislation will be exactly the same as the effect of the excise. .The fact must be borne in mind that this tax will become inoperative immediately the price of gold falls below £9 an oz. That provides a safeguard for the industry and indicates that in effect this bill will be a war measure. There is no doubt that at the termination of hostilities, when exchange adjustment has to take place between the American dollar and sterling, there will be a tendency for the price of gold to decrease, possibly below. £9 an oz. In that event this measure would become inoperative. That, however, is no great comfort to the miners of Western Australia because, we of that State should like to see the price remain high even although half of the excess over £9 an oz. be taken by the Commonwealth. Although the Government has ignored my suggestion that the taxation of this industry should be the subject of a conference between specialists, I hope the Government will bear my representations in mind. At the same time, I should like to express my appreciation of the decision to exempt prospectors from the payment of the tax on the first 25 oz. of gold won in any year. I should like that exemption to be higher in order to give some encouragement to prospectors, because on their shoulders rests the responsibility for the discovery of new gold-bearing country. They should be given every possible aS81S: tance because the opening up of new auriferous areas means a great deal to Western Australia which is very largely dependent upon the gold-mining industry. The benefit of the industry to Western Australia is so great that I shudder to think what would have happened to that State during the years of depression had not gold appreciated in price, thus giving a great impetus to the industry and employment to many people. Bearing that fact in mind I express appreciation of the Government’s decision to exempt prospectors from the first incidence of the tax, and although I would like the exemption to be greater, I shall not oppose the bill, knowing that if I did so, it might be defeated and the prospectors would still have no exemption under the excise duty which would then continue to be collected for some time.

Senator FRASER:
Western Australia

– I oppose the second reading of this measure. I am surprised that the Government has been so paltry in regard to concessions, especially in view of the debate which took place on this matter earlier in this session. Instead of ‘continuing the excise on gold, it is imposing a tax by this legislation, which provides an exemption of the first 25 oz. won by prospectors in any year. But the onus to secure that exemption is on the prospector because the tax is to be levied at the source, and it will be necessary for the prospector to make application at the end of each year for a refund of the amount of tax. He will he obliged to show what amount of gold he has won during the twelve months. That is wrong in principle. Many thousands of prospectors will be affected by this proposal, and I predict that a large number of them will not make application for a refund. That has been found in Western Australia in connexion with exemption from the incidence of the financial emergency tax of 4½d. in the £1. I believe that there are hundreds and even thousands of employees who, though their earnings have not exceeded the basic wage, have not, because of their ignorance of the law, made application for a refund.

Senator Allan MacDonald:

– It will not ‘be necessary for the prospector to apply for a refund.

Senator FRASER:

– Under the provisions of this bill the prospector will have to apply for a refund.

Senator McBride:

– That is correct.

Senator FRASER:

– The onus of application is placed on the prospector.

Senator MCBRIDE:
UAP

– Obviously that must be so.

Senator FRASER:

– I am opposed to that principle. In the first place, it is merely an easy method of collecting the tax, and is a complete departure from existing methods. Many thousands of prospectors will be ignorant of the terms of this bill, yet the onus to make application will be upon them. That is the feature to which I raise objection. Just what does this provision mean ? It means in effect that, despite all his crushing and carting costs, which may reach a substantial amount, the prospector will have the tax deducted from the payment made for the first 25 oz. of gold won by him, and the onus to make an application for refund will rest with him.

Senator Foll:

– That is the method always employed.

Senator FRASER:

– It is not always employed. Income tax is not collected at the source. The method provided in this bill is only employed where tax is collected at the source. I entirely disagree with it.

Senator McBride:

– What about excise generally ?

Senator FRASER:

– We are not dealing with excise.’ We are dealing with a direct tax. 1 object to the methods by which the Government intends to collect this tax, even though special provision has been made for the small prospector. This bill is simply a means of reversing the defeat which the Government suffered on a previous similar proposal.

Senator McBride:

– Of course it is.

Senator FRASER:

– No doubt representations made by Senator Allan MacDonald, Senator Johnston and other honorable senators on both sides of the chamber were to a great extent responsible for the Government’s decision to give special exemption bo small prospectors, many of whom are earning less than the basic wage. Had the Government provided in the bill that the tax would be payable on quantities exceeding 50 oz. of fine gold, instead of 25 oz., those producing by crushing and cyaniding would have a better opportunity to make a living. I strongly protest against the method by which the tax is to be collected, and I believe that less than 50 per cent, of those entitled to apply for exemption will do so because they will not be conversant with the law.

Senator CAMERON (Victoria) [4.16’J. - Nothing has been said or done since this subject was last discussed to cause me to change the opinion which I previously expressed. The more thought I give to the matter the more I am convinced that we were right in opposing the first bill, in which provision was made for the imposition of a tax on gold production. I am still of the opinion that this legislation has been brought forward with the sole object of- assisting the rich mining companies at the expense of prospectors and those conducting small mining shows. As was stated by Senator Johnston, we should encourage the goldmining industry as much as possible, because gold is the only acceptable form of currency in international trade. It should be perfectly clear to honorable senators that, if the present war continues, and we have to purchase commodities from abroad, gold will be required because we shall be unable to obtain the necessary credit. Judging by what has occurred since the price of gold rose so rapidly - and it is likely to rise still higher - we can expect that, with a further rise there will inevitably be a rise of prices of other commodities, particularly those used and consumed by workers, prospectors and other persons conducting mining operations. In these circumstances, little benefit will be derived from the increased price, and the tax will have the effect of discouraging production to a remarkable degree. In the early days of the Russian revolution, the Soviet government discouraged the production of gold; but later it discovered that machinery obtained from America, Great Britain or other countries had to be paid for in gold, because other commodities, if available, were unacceptable. The government then sought to increase production, and did so under conditions which were much more liberal than those which had prevailed previously. It obtained the services of a man named John D. Littlepage, an American engineer, to organize the gold production. He arranged for the payment of 30,000 gold roubles for the discovery of payable reefs, and those making discoveries had the right not only to work the reefs for a lengthy period, but also to retain all that they secured as a result of their labour. By that means gold production in Russia increased considerably, and the industry thrived. With the gold thus obtained Russia was able to trade more successfully and more extensively than previously. In a book-entitled In Search of Soviet Gold, written by John D. Littlepage and Demaree Bess, published in 1939, the following statement appears: -

Prospectors and lessees arc all paid for their gold in gold roubles, not in the paper roubles which are used for all other transactions in Russia. These gold roubles are not an actual currency, but are represented by scrip or credits negotiable only in the chain of stores maintained by the Gold Trust throughout the gold-bearing regions. These “ gold stores “ are one of the most ingenious features of the scheme, and probably have done a great deal to attract new prospectors. 1 suppose that they are the finest stores in rural Russia outside of the big city areas. They are always better stocked than ordinary government stores in the same districts, and are more attractively operated. They will never accept paper roubles - the official currency of the country - but will exchange their desirable goods only for gold roubles, or scrip, which in turn can lie obtained only in exchange for sold. When the scheme first started this scrip was supposed to be non-transferable, and some prospectors got into trouble for selling their scrip. But later all bars were taken down, and to-day the scrip is a regular means of exchange in the gold-bearing districts. Prices in the gold stores ave based upon world prices. Comparison of gold-store prices with the prices of ordinary stores close behind them show that one gold rouble is approximately equivalent in purchasing power to twenty paper roubles.

It will be seen that gold-mining in Russia was encouraged to a remarkable degree, and that one gold rouble was worth twenty roubles of the official paper currency. Everything possible was done to encourage prospectors from all parts of the world to search for gold throughout Siberia under the most liberal conditions.

Senator McBride:

– They were not sufficiently liberal to attract the honorable senator.

Senator CAMERON:
VICTORIA

– I am quite satisfied with Australia.

Senator Gibson:

– One would not think so.

Senator CAMERON:

– All that the honorable senator has done since he has been a member of this Parliament has been to support legislation which has imposed unnecessarily heavy burdens upon the people and brought into existence a permanent army of unemployed. I am endeavouring to show that this legislation will discourage production at a time when every effort should be made to increase the output of this essential mineral. Those who will not be influenced by successful experiments in other countries are not likely to be of much service in legislating in the interests of this nation. If a tax be imposed on gold it should be on profits and not on prices. I challenge any honorable senator opposite to justify a tax on the basis proposed in this bill, which must necessarily impose undue hardships upon prospectors or workers engaged in low-grade shows and depending on the higher price to retain their employment. If >this additional burden be imposed many small mining shows will be compelled to cease production. Senator Allan MacDonald said that after the termination of the war the price of gold will probably fall, and I believe that it will. Should that happen, and present-day economy be not changed for the better, prices and wages will drop and we shall be faced with a depression much more severe than- that which we experienced some years ago. The Government should take a broader view of this problem, and do its utmost to encourage production so that with the gold obtained it may be able to purchase those commodities which must be imported. Gold is being mined not merely for the sake of obtaining it; but -because it has an important exchange value. Exemption from the payment of the tax on 25 oz. or less may benefit a few prospectors ; but generally speaking, the impost will have a detrimental effect upon the industry and cause additional unemployment. I was informed by a number of intelligent persons engaged in cyaniding ‘ old dumps that prior to the imposition of the tax they could “ break even “, but that with this impost their work will be unremunerative. In Victoria, Western Australia and other States, thousands of prospectors will be severely affected by this legislation. The tax has nothing to commend it and should not be imposed. - Senator SHEEHAN (Victoria) [4.30]. - I oppose the bill for the same reason that I opposed the measure introduced in September last to tax the price of gold. It will be hard for any honorable senator who opposed the previous measure to bring himself to support this bill. My opposition to the previous measure was bared on the fact that it was wrong in principle, inasmuch as it sought to impose a tax not on profit, but on price. This measure embodies the same principle. For that reason it should be rejected. Very craftily, the Government has ostensibly made a concession by allowing to a prospector a refund of the tax on the first 25 oz. delivered by him in any year. That concession is designed merely to disarm the opposition previously shown to this tax, The drafting of this particular provision reveals a lack of understanding of the conditions under which prospectors operate. For instance, if a prospector be lucky enough to secure 25 oz. of gold on the 1st January next, and delivers it to the Commonwealth Bank, he may bc obliged to wait twelve months before he will be able to make application for the refund of the tax, despite the fact that within that period he may not be able to win any more gold.

Senator McBride:

– That is incorrect.

Senator SHEEHAN:
VICTORIA

– That is my interpretation of clause8.

Senator McBride:

– That clause does not say that the prospector shall be obliged to wait twelve months for a refund of tax.

Senator SHEEHAN:

– I submit that my interpretation of the clause is correct. What is the real implication of “ the first 25 oz. of gold on which he directly or indirectly pays tax in any year “ ?

Senator McBride:

– That is another matter.

Senator SHEEHAN:

– Twenty-five ounces may be a mere bagatelle to a prospector, having regard to the expense and labour which he incurs in order to secure that quantity of gold. It has already been pointed out that many prospectors are fossicking in most inaccessible country in the hope of locating a big show. Under this measure they will be deprived of the wherewithal necessary to enable them to continue their operations. Assuming that the price of gold be £10 an ounce, a prospector would earn only £250 in any year. That amount would be insufficient to purchase equipment and to meet transport expenses. This concession may be comparatively valuable to those men, sometimes described as prospectors, who work alluvial diggings near former mining towns which have gone out of production. In the debate on the measure in September last, it was pointed out that even this class of prospector was unable to sluice for gold because of lack of water. Most of them have been drawing sustenance for two years. Now that the drought has ended and water is available for sluicing opera- tions, the Government proposes to tax their earnings. It may be true that these men are not called upon to endure the same hardships as those who go further afield. The point I make, however, is that no distinction is made under this measure between the prospectors who are sluicing on alluvial diggings and those who go further afield, and., therefore, are confronted with much greater difficulties. Even the men engaged in sluicing operations must incur considerable expenditure in constructing water races and providing pipes. This concession is so much bird lime. It has been designed mainly with the object of securing the support of

Senator Allan MacDonald, who opposed the Government’s proposal in September last. With his support, providing the voting on this occasion is along lines similar to the division on the bill in September last, the Government will be enabled to pass this measure.

Senator McBride:

– That is absolute nonsense.

Senator SHEEHAN:

– If Senator Allan MacDonald, or any other honorable senator, is prepared to vote for this measure simply because of that concession, he will not be doing justice to either himself or the prospectors whose interests he claims to represent. This concession is practically worthless, particularly when one studies some of the definitions in clause 8 (2), bona fide prospector is defined as - “ bona fide prospector “ means a person (other than a company) who satisfies a prescribed authority that- -

  1. he has personally performed the whole or the major part of the field work of prospecting for and obtaining the gold upon which he has paid tax ; or
  2. b ) he is one of two or more persons who together have personally performed the whole or major part of such work ;

Under that definition a prospector will automatically be debarred from qualifying for the refund immediately he comes upon any gold. In order to protect his interests he must take out a lease, and by so doing he will forfeit his right to claim this refund of tax. Once he pegs a lease he will not qualify for this re- fund, although his subsequent operations may prove quite fruitless.

Senator McBride:

– The honorable senator is wrong again.

Senator SHEEHAN:

– I shall be very interested if the Assistant Minister can correct me on that point. In any case, misunderstandings of this kind reveal the complicated nature of this measure.

Senator Wilson:

– There is nothing complicated in it.

Senator SHEEHAN:

– There is nothing complicated in it to the honorable senator who is anxious to tax the small man, and, at the same time, to allow richer concerns to escape a fair measure of tax. So far as he is concerned there is nothing complicated in taxing the bread of the workers, but all sorts of complications arise whenever it is suggested that the profits of such concerns as the Broken Hill Proprietary Company Limited be taxed. I oppose this measure because this tax is wrong in principle. It has never been suggested that the price of any other commodity should be taxed, although the prices of many commodities have increased tremendously as the result of war activities. This principle of taxation will not be applied to the profits of the Broken Hill Proprietary Company Limited. That concern cloaks its profits by watering its shares and issuing bonus shares to its shareholders in order to enable them to escape taxation also. This form of tax applies only to those least able to bear it. If it were proposed to tax the increased dividends and profits of wealthy companies in this way, I should not be so strongly opposed to the principle. Let me issue a warning to honorable senators opposite that if this principle be established, a day may come when as the result of war expediency, another government may desire to apply this principle. Should those circumstances arise, I hope that honorable senators opposite will not squeal, but will take their own medicine. Senator Johnston has righly pointed out that this tax will adversely affect many companies which are operating low-grade propositions. Judging by the remarks of some honorable senators opposite, one would imagine that every gold-mining company in Australia was making exorbitant profits as the result of the increase of the price of gold. On the contrary, many small parties are utilizing a portion of the increased price by establishing a fund to enable prospectors to keep going in the hope that they may be enabled to develop some line to a payable proposition. These prospectors are being sent to diggings which were abandoned in the past because of the low price of gold prevailing at the time, and because the machinery then available was too primitive to make the propositions payable. With improved methods, modern machinery and the increased price of gold, it is hoped to reopen these diggings. In the course of exploration work, prospectors obtain crushings which yield 1 dwt. or 2 dwt. to the ton, and this yield tends to ease the burden upon the central concern. Such undertakings which are now able to work on a bare margin, despite the high price of gold, will be obliged to cease operations as the result of this tax. This bill will prevent persons constituting small syndicates from obtaining any benefit. Many small business men in what are known as worked-out mining ‘ towns in Victoria are interested in the development of their districts and are hopeful of being able to establish gold production on a better basis. They become identified sometimes with proposals to develop lost leads or low-grade lodes. This bill will discourage them from continuing those activities. It will prevent the continuation of that very important work because the people whom I have in mind would not be regarded as prospectors according to the definition in this bill. Many of them are working, perhaps on part wages, and possibly would be entitled to a small share of any gold won or profits made. I believe that under this measure any man who is engaged in mining operations for a small wage, perhaps sufficient only to keep him going, will not participate in the exemptions of the measure.

Senator Allan MacDonald:

– Yes he Will

Senator SHEEHAN:

– He will not, because the gold won will not be hie gold.

Senator Wilson:

– That will not make any difference.

Senator SHEEHAN:

– Such a man will probably be a shareholder in a small syndicate.

Senator Allan MacDonald:

– If he does the work, he will be entitled to the exemption.

Senator SHEEHAN:

– I contend that he will not be qualified for the benefit of the exemption. This provision, I suggest, has been included in the bill for the purpose of securing the votes of some honorable senators who, on a former occasion, opposed it. It is ridiculous to expect that the insertion of this clause would induce us to reverse votes which we cast some months ago on a similar measure. I believe that if the bill becomes law, regulations will be promulgated under which this provision will be of no help to small prospectors. I intend to oppose the bill unless the Assistant Minister can convince me that my interpretation of the provision is not correct.

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

in reply - I am sure that all honorable senators will recognize that, in this time of emergency, when everincreasing financial responsibilities confront the Government, it is necessary, and indeed inevitable, that fresh sources of income should be sought. After making an examination of the various tax fields the Government came to the conclusion that it would not be unfair to impose a levy on gold, because during the last few years the price of this commodity .has been steadily rising and hitherto it has been exempt from Commonwealth taxation. Consequently in view of the great increase of the price of gold since the outbreak of the war, and also because of a change in the sterling-dollar exchange situation, the Government decided that gold should contribute some portion of the additional revenue required to meet new obligations arising out of the war. In its first proposal, the Government sought to divert to the Treasury 75 per cent, of the price of gold in excess of £9 a fine ounce. On that occasion the Senate was opposed to the proposal. After reviewing the position, the Government decided that it would be fair to divert to the Federal Treasury 50 per cent, of the unearned increment of gold, due to war conditions. Much has been said concerning the previous measure introduced by the Government, but I do not remember one honorable senator mentioning that this bill contains provision to exempt all prospectors from tax in respect o’f the first 25 oz. of gold won in any year. This concession is, I submit, sound reason for its acceptance. As to the effect of the measure on what are termed low-grade propositions, most of the largest goldmines in the world are working on lowgrade ore. It is not correct to say that because a mine may contain ore bodies of high assay value, it must necessarily be profitable. Mines having high assay values are often extremely unprofit able. Senator Johnston expressed great concern regarding the position of low-grade mines in Western Australia, and endeavoured to show that this legislation might cause some of them, including the Wiluna mine, to close down. I think that the honorable senator was needlessly alarmed- about Wiluna, because the stock exchange official record for October, 1939, shows that for the six months ended September last - during the greater part of that period the price of gold was much lower than that ruling to-day - the Wiluna mine produced 44,286 oz. of gold, the average yield was 3 dwt. a ton, and the estimated working surplus was £161,661. A mining property that discloses a surplus of such dimensions should be fairly safe. It is reasonable to assume that the extra 16s. 6d. an oz., representing the proportion retained by the company of the increased price of gold since the outbreak of war, would add more than £30,000 to the revenue, and I doubt if the working expenses would increase in anything like the same ratio. Therefore, it is safe to assume that during the next six months the Wiluna mine will show a working surplus of not less than £161,000, assuming also the same yield per ton.

Senator E B Johnston:

– How does the Minister reconcile that statement with the figures in the balance-sheet, which show a loss of £12,000 for the year?

Senator McBRIDE:

– I am not going to try to reconcile anything. I have merely put before the Senate the figures from the Melbourne Stock Exchange official record of the Wiluna mine for the period under review.

The Leader of the Opposition (Senator Collings) said that the bill did not provide for the exemption of prospectors who worked in groups for the purpose of winning. gold. I invite the attention of the honorable gentleman to clause 8. It enacts that one or more persons who together personally perform the whole or the major part of the work at a mine are entitled to exemption in respect of the first 25 oz. of gold won.

Senator Collings:

– I have noted that provision since I spoke.

Senator McBRIDE:

– I am glad that it meets with the approval of the Leader of the Opposition.

I turn now to some statements made by Senator Sheehan. That honorable gentleman frequently in this chamber makes statements which are inaccurate, and I have reason to believe that he does so knowingly. This being so, we may assume that some, at least, of the things which he says outside of this chamber are also incorrect, but no one challenges their accuracy. His interpretation of clause 8 is quite wrong. I think thatthe honorable gentleman deliberately misinterpreted the language of the clause which, I submit, is as clear as it is possible to State anything in the English language. His assertion that the prospectors would have to wait for twelve months before they could get any rebate in respect of the first 25 oz. of gold won, is wrong. A prospector might win 25 oz. in one week.

Senator Sheehan:

– In that event he would get no concession for the remainder of the year.

Senator McBRIDE:

– Exactly; but he would have qualified for and obtained his rebate in one week. There is nothing in the clause to suggest that the operation of the rebate would be postponed for twelve months. Senator Sheehan asserted that as soon as a prospector or a group of prospectors started to work on a lease they would be excluded from participating in the exemption. If the honorable gentleman will read the clause again he will find that again his interpretation is wrong. The object of the bill is clear to honorable senators, and the concession to be given to prospectors will be appreciated.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without requests or debate; report adopted.

Third Reading

Motion (by Senator McBride) proposed -

That the bill be now read a third time.

Senator E. B. JOHNSTON (Western Australia [5.5]. - I record the fact that I endeavoured to obtain a vote against the measure on the second reading, but was unable to secure a division owing to the silence of honorable senators opposite.

Senator Sheehan, to the best of my memory and belief, said that he would oppose this tax to the last stage. I suggest that any honorable senator who does not wish this tax to be imposed should vote against the third reading of’ the bill. This is the bill which imposes the gold tax on production. There appears to have been a remarkable change of opinion on the part of some honorable senators. Does every member of the Senate, except me, approve of this measure ? I hope to be able to vote against the third reading, and, if the question does not go to a division, it will be because honorable senators opposite refuse to back their expressed opinions with their votes. I listened with much pleasure to those honorable senators on the Opposition side who condemned the principle of a tax on production and advocated a tax on pro fits.

Question resolved in the affirmative.

Bill read a third time.

page 2166

GOLD TAX COLLECTION BILL (NO. 2) 1939

Secondreading.

Debate resumed from the 6th December (vide page 2139), on motion by Senator McBride -

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 4 agreed to.

Clause 5 (Liability to gold tax).

Senator ALLAN MacDONALD:
Western Australia

– Will the Assistant Minister for Commerce (Senator McBride) make a note of the fact that I have submitted a request to the Acting Treasurer (Mr. Spender) regarding this matter? I have asked that the impost of 2 dwt. 8 gr. of gold, which the State Mines Department imposes on the prospector when he carts his ore to a State battery in Western Australia for crushing treatment, be an allowable deduction. This impost has been in operation in Western Australia for many years. It amounted to 2 dwt.8 gr. when the price of gold was £4 4s.11d. an oz., and it is still at that level, even though the price has increased to £10 13s. an oz. Therefore, somebody is making a huge profit out of the impost at the expense of the prospector. The prospector usually gets his cheque for the amount of gold won from the crushing process, and the deduction of 2 dwt. 8 gr. does not take place until the secondary treatment of the sands or slimes is carried out at the State battery.

Senator ARTHUR:
New South Wales

– I support the request by Senator Allan MacDonald. I also bring under the notice of the Acting Minister for Commerce the charges made by the Government batteries at Tennant. Creek. The prospector has to pay for the cartage of his ore, and he is also charged 12s. 6d. a ton at the battery for the first treatment. The battery deducts 10 per cent. of the sands, allegedly for loss occasioned through wind and other causes between the battery and the cyanide plant. The lost sands remain in the vicinity of the works and can be treated afterwards. In addition, it takes 25 per cent. of the gold won through the cyanide plant. The Government should consider these facts in imposing the tax under consideration.

Senator SHEEHAN:
Victoria

– At a deputation which waited on the Minister for the Interior (Senator Foll) this morning, miners from Tennant Creek placed before him the facts mentioned by Senator Arthur. I understand that the battery is owned by the Commonwealth Government. This discussion has at least served to emphasize the intricacies of the problem with which the bill deals. No doubt, as time goes on, this measure will be found not quite so simple as it appears to be, and many difficulties will arise in its operation.

Senator McBRIDE (South AustraliaAssistant Minister for Commerce) [5.161. - I shall take up with the Treasurer the matters referred to by Senators Allan MacDonald, Sheehan and Arthur.

Clause agreed to.

Clause 6 -

The following gold shall be exempt from tax : -

Gold imported into Australia from any place not being- a Territory of the Commonwealth ; and

Gold coin and wrought gold, unless and until the Treasurer otherwise directs by notice published in the Gazette.

Senator CUNNINGHAM:
Western Australia

– I move -

That after paragraph (a) the following new paragraph be inserted: - (aa) Gold won from any non-profits producing gold-mining claim, goldmining lease, and/or gold-mine. “ Profits “ means such sum or sums of money in excess’ of actual cost of production in any year.

After listening to the discussion which took place in this chamber, I contend that this amendment is a reasonable one. In Western Australia there are many alluvial claims measuring 70 ft. x 70 ft., small quartz claims, and gold-mining leases of from 5 to 24 acres. I should like to give this legislation its widest possible application in connexion with claims and leases. The object of my amendment is to make it quite clear that if claims or leases are non-profit producing, they will be exempted from the tax. That is only fair. Surely it is not the policy of this Government to tax the production of any industry that is not profitable. If that were done many industries, including the gold-mining industry, would go out of existence. It is well known that many small mining propositions, and even some of the more substantial ones, are to-day not producing profits. Should they reach the profit-making stage owing to the increased price of gold, then, of course, this legislation could be applied to them. I hope the amendment will receive favorable consideration by this committee and by the Assistant Minister. I do not think that it is the intention of this Government, or any other government, to tax industries which people are attempting to place on a profit-producing basis.

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– I am sorry that the Government is unable to accept the amendment. It is not the intention of the Government under the provisions of this measure to tax profits made before the outbreak of war. It is obvious that mining ventures which could- operate profitably at the old price of gold can continue to operate on a paying basis now that the price has increased. The Government merely proposes that half of the price in excess of that obtaining on the eve of the outbreak of war should be taken by the Commonwealth. Although it may seem perfectly simple to honorable senators, I suggest that the definition of profits would be a difficult matter. It would be possible for a company to inflate its costs in any one year by entering into extensive exploratory work in tho lower-grade parts of its mine, and it would be very difficult, if possible at all, to police such an exemption as that suggested by Senator Cunningham. .While tho Commonwealth Government desires to see the mining industry developed and expanded to the greatest possible degree, for reasons very well stated by a number of honorable senators this afternoon, great care must be taken. The Government cannot overlook the fact that if goldmines are started owing to the present inflated price of gold, when the price decreases at the conclusion of the war, or earlier, as Senator Allan MacDonald predicted, they will be forced to close down or look to the Commonwealth Government for assistance, as the gold-mining industry did previously owing to the low price of gold. It must be realized that any economic expansion of this industry that is owing entirely to the present fortuitous high price of gold, must be of only temporary benefit, and will cause difficulty in the future. For those reasons the Government cannot accept the amendment by Senator Cunningham.

Senator CUNNINGHAM:
Western Australia

– I am not asking the Government to undertake an impossible tusk. If the Minister will read my amendment again he will see that it makes an attempt to define the meaning of “ profits “.

Senator Wilson:

– What would happen if all the profits of a company were paid out in directors’ fees?

Senator CUNNINGHAM:

– The Government will have power under this bill ro make regulations, and no doubt those who are responsible for those regulations are competent so to frame them that the intention of the Government in bringing down this legislation will be effectuated. The amendment contains the words “ actual cost of production”. Obviously that, ‘‘actual cost of production” would not include excessive fees for directors or excessive expenditure on developmental work.

Senator Hebbebt Hays:

– All overhead charges are included in cost of production.

Senator CUNNINGHAM:

– Certain overhead charges are included in the cost of production, but I cannot see any reason why the Government could not exercise control over expenditure on developmental work. It could, for instance, take an average of expenditure on development during the preceding two or three years, and fix that amount as a limit; or officers could be authorized to investigate the operations of the companies concerned and arrive at a fair estimate of the actual cost of production. The Assistant Minister said that tho Government did not intend to interfere with mining concerns which had been profit-producing prior to the outbreak of war, but I am not concerned about such organizations. I am concerned with those mines which were not profit-producing at that time, and my object is to give those who have invested their money in such undertakings a fair chance of deriving some return for their capital. The possibility of the Government being called upon in the future to assist mining ventures which have sprung into existence owing to the present high price of gold is not our concern for the moment. The Government, will have to deal with such a situation if and when it arises. What we are concerned with is the interests of those people who are striving under adverse conditions to make profitable certain mining ventures into which they have put their money and their labour.

With regard to the exemption from the tax of the first 25 oz. of gold won, I may state that I have followed this industry for many years, and, although 25 oz. may appear to be a reasonable exemption, substantial deductions have to be made for crushing,, cartage over long distances, and other incidental charges, including cyanide treatment. After all these deductions have been made, there will be very little profit for the prospector.. Incidentally, the definition of a prospector in this bill is a very good one. It does not cover lease-holders, or syndicate owned and controlled mines. It lays down definitely that prospectors are persons engaged in the actual production of the ore or the major portion of it. People not directly engaged in the mining ventures will be entitled to no consideration at all.

Senator Sheehan:

– The Minister claims that they will.

Senator CUNNINGHAM:

– The Minister has refused to accept my amendment, and so I can do nothing further in the matter, but I am very disappointed by his opposition.

Senator CAMERON:
Victoria

– It is difficult to understand the Government’s attitude on this question. It says that it wishes to increase gold production; but it will not exempt those propositions which are now “ breaking even “ and cannot continue in operation if they are compelled to bear this additional impost.. Although the Assistant Minister for Commerce (Senator McBride) said that it would be impossible to check costs, the Minister for the Interior (Senator roll) informed the Senate yesterday that the costs of manufacturers undertaking defence work on behalf of the Government are to be checked and that they are to be allowed a profit of 5 per cent, above the cost of production.

Senator McBride:

– He did not include mining undertakings.

Senator CAMERON:

– If manufacturers’ costs can be checked, surely it is not beyond, the capacity of the Government’s representatives to check mining costs. If the gold-mining industry was under the control of one or two powerful companies, and the poorer companies could not possibly pay the tax, this legislation would not have been introduced. Why should the Assistant Minister refuse to accept the reasonable amendment moved by Senator Cunningham when the Government says that it does not wish to penalize prospectors or mining companies working under unfavorable conditions? “The Government’s attitude in this respect discloses its insincerity.

Senator ALLAN MacDONALD:
Western Australia

– The Assistant Minister for Commerce (Senator McBride) said that one of the reasons why he could not accept the amendment moved by Senator Cunningham is that any company or group of leaseholders could exhaust their profits by increasing unnecessarily their exploratory expenses; but if that did happen, which I doubt, it would be helpful to the industry. It is essential that those’ engaged in searching for gold should increase their efforts in chasing low-grade ores, and cease selective mining, which is not the best basis on which to operate. If I were controlling a mining syndicate which had not made a profit during during the preceding twelve months, I would, if the amendment -is correct, immediately apply to the Commonwealth Bank, acting as agent for the Commonwealth Treasury, for a refund of the tax which had been paid on the gold won. So far as I can see, possessing as I do some knowledge of mining accounts, it would be easy to prove to the satisfaction of the authorities that the mine had not shown a profit during the preceding twelve months. I would have to submit an audited balance-sheet and profit and loss account, but the correctness of the documents would have to be certified by a duly qualified chartered or public accountant, who certainly would not sign a falsified balance-sheet. Even if the amendment were embodied in the bill, the number of claims made would not be great because unprofitable mining shows do not continue indefinitely. On the other hand, the concession would be a great relief to those who invest their money in mining development,- which would also provide additional employment. I may inform Senator Sheehan that the prospectors in’ Western Australia, through the executive of their organization, expressed themselves in favour of an excise on gold.

Senator Cunningham:

– Some of them.

Senator ALLAN MacDONALD:

– An official body of prospectors which I addressed in Kalgoorlie favoured an excise tax if an income less than the basic wage were exempt.

Senator Sheehan:

– It is the same thing.

Senator ALLAN MacDONALD:

– It is not. If the amendment moved by Senator Cunningham were agreed to, the amount by which the revenue would be reduced would not be great.

Senator McBride:

– What would it cost?

Senator ALLAN MacDONALD:

– I cannot say, but investors will not subscribe their money to enable unprofitable mining shows to be continued. I support the amendment.

Senator LECKIE:
Victoria

.- Senator Cameron said that it is difficult to reconcile some of the statements made by the Assistant Minister for Commerce (Senator McBride) when refusing to accept the amendment moved by Senator Cunningham; but I find it very difficult to reconcile the statements which the honorable senator has’ made on this bill with those which he has made on other subjects. For instance, he has said on numerous occasions that no one should be allowed to make a profit out of the war. In consequence of war, the price of fine gold has risen by nearly £2 an oz., and when he sees an opportunity to gain political kudos, his beliefs concerning war profits are disregarded entirely. I am sorry that Senator Allan MacDonald proposes to support the amendment; he probably does not realize the effect it would have upon the revenue. The Assistant Minister has said that approximately £1,000,000 will be collected during the first year this measure is in operation, and that in the subsequent year probably £1,500,000 will be obtained; but if the amendment we’re adopted, the receipts from this source would be reduced by one-half.

Senator E B Johnston:

– I do not think that the reduction would be so great.

Senator LECKIE:

– In order to reduce profits all expenses, including director’s fees, could be charged to costs and in addition substantial deductions could be made in respect of depreciation. In ordinary business undertakings depreciation is allowed and the capital may be written off in a specified number of years, but what would be the rate of depreciation on a gold-mine? Should the amendment be agreed to, the Government would be fortunate if it received more than 50 per cent, of the amount estimated to be collected.

Senator Allan MacDonald:

– That is only guesswork.

Senator LECKIE:

– I am taking into consideration the costs which could be charged to production. These costs would include depreciation on plant and machinery, and could be at such a rate that the capital cost could be written off in an unreasonably short period. No expert in the world can say what depreciation should be allowed in respect of a gold-mine. If the amendment be adopted, the Government will be very lucky to raise 50 per cent, of the revenue originally estimated to be yielded by this tax. The rise of the price of gold has been caused solely by the war. Any honorable senator who suggests that no one should be allowed to profiteer as the result of the war is inconsistent when he says that this tax is unfair. I hope that the Assistant Minister will not accept the amendment.

Senator E B JOHNSTON:
Western Australia

– I intend to support the amendment. I should like the Assistant Minister (Senator McBride) to give an estimate of the cost of the concession involved. Senator Leckie’s estimate of a loss of 50 per cent, of the yield originally estimated is absurd. Senator Cunningham has proposed the amendment in order to exempt from the tax mines which are operating at a loss or without a profit. If the amendment does not achieve that end, I shall be prepared to accept any amendment which the Government might substitute in order to achieve that object. The Wiluna mine is not making a profit at the present time. The Assistant Minister has produced an interim report which shows the estimated working surplus of that mine for six months at £160,000. I point out that that estimate makes no allowance for developmental and exploratory expenditure, which is shown apart from that estimate at £55,721.

Senator McBride:

– The honorable senator will admit that there has been a huge increase of the estimated profit.

Senator E B JOHNSTON:

– The figures cited by the Assistant Minister are accurate, but the point I make is that in the compilation of that estimate no allowance was made for depreciation or developmental and exploratory expenditure. In addition, the estimate is in respect of a period of six months only. As against that statement I shall quote with equal accuracy from a London cablegram, published in yesterday’s Sydney Sun -

The accounts- of the Wiluna Gold Mining Corporation Limited disclose a loss for the past year of £1.2,000.

Senator McBride:

– That shows how a profit can be turned into a loss.

Senator E B JOHNSTON:

– But the figures given by the Assistant Minister did not cover operations in the preceding six months. Neither did they include costs in respect of depreciation, which I think the Assistant Minister will admit cannot properly ‘be excluded. That is a big item. At any rate the life of this mine is now estimated by Mr. Benns, the consulting engineer, at only two and a half years. I support the amendment, because we should do everything possible to prolong the life of this and other lowgrade propositions, in order to keep up the production of gold required by the Empire, as well as to maintain employment. The “Wiluna mine employs 1,000 men, and, as it is by far the largest mine operating in the district, it is the mainstay of a town with a popula’tion of 7,000. I feel sure that the amendment is designed to achieve this objective. For that reason I support it.

Senator CAMERON:
Victoria

– Profit is defined in the. amendment as follows : -

Profit means such sum, or sums, of money in excess of the actual costs of production in any year.

That is a very good definition. In answer to Senator Leckie, I say that I am not inconsistent in supporting this amendment, although I am opposed to war profiteering. The honorable senator has lost sight of the objective of the amendment. It is designed to protect low-grade propositions, which are now unable to break even financially on their operations. We say that this tax should not be imposed on such companies, because this added burden may cause them to close down. I am afraid that the honorable senator’s prejudice - whether it be personal or political, I do not know - has overridden his better judgment. He said that the war was the sole cause of the rise of the price of gold. I admit that the war has been partly responsible for that rise, but the fact remains that if gold were as plentiful as iron the war would not affect the price any more than it has affected that of iron. The price of gold has risen, first as the result of inflation, and secondly, as the result of the demand for international trading. If the honorable senator understood that fact more clearly he would be more disposed to render effective service to the people most affected by this measure, namely, prospectors and thousands of miners who are employed on lowgrade propositions. It is impossible - and I challenge contradiction on this point - to reconcile the attitude of the Government in. calling to high heaven to witness the sincerity of its desire to increase the production of gold with its refusal to exempt low-grade propositions from’ this tax. The amendment provides the acid test of the Government’s sincerity in two directions. It will give us an opportunity to see, first, whether the Government really desires that the production of . gold be increased, and, secondly, whether it desires to help those in the industry who are’ unable to pay this tax without great financial loss.

Senator WILSON:
South Australia

– The halo of equity which appears to surround the amendment rather tends to blind honorable senators to the real substance of it. It is perfectly clear that if the amendment be adopted it will he impossible for the Government to collect this tax until the end of the financial year, because until then it will not be possible to decide whether a mining company is operating at a profit or a loss. Consequently, the tax would not operate for another twelve months. Honorable senators opposite do not seem to realize that we are at war, and that the Government must have money in order to enable it to conduct the war. This tax is a tax on war profits.

Senator Cameron:

– It is a tax on war prices.

Senator WILSON:

– It is a tax on war profits. Therefore, it is justified. The amendment would completely nullify the tax, for the simple reason that we could not collect it at a time when this money is so urgently required. I also object to the amendment for the reason pointed out by

Senator Leckie, that companies could alter their accounts in order to evade the tax.

Senator McBRIDE:
Assistant Minister for Commerce · South Australia · UAP

– I ask the committee to reject the amendment. Honorable senators must realize that the principal object of this tax is to enable us to finance our war effort. .The Government has gone a long way already in meeting the wishes expressed by various honorable senators in connexion with this proposal. I mentioned earlier that the rate of tax had been reduced from 75 per cent, to 50 per cent, of the amount by which the price of gold exceeds £9 an oz. In addition, prospectors have been partly exempted from this tax. Treasury officials estimate that the latter concession may involve a sacrifice of revenue up to an amount of £100,000. If the amendment be carried, it will have the effect not only of delaying the collection of any of this money until the end of the year, but -also of reducing the total yield expected from the tax. I am not prepared to estimate that loss, but I believe that Senator Leckie’s estimate of 50 per cent, would not be far wrong. In connexion with the “Wiluna Company I have given an excellent illustration of the possibility that gold-mining companies could conceal profits in order to evade this tax. Such an opportunity should not be given to them. That, however, would be the effect of the amendment. According to authentic figures which I cited, the Wiluna Company estimated a working surplus for six months, ending September, of £160,000, but its balance-sheet for the year shows a loss of £12,000. If the amendment be carried practices of this sort can be indulged in. Apparently honorable senators are not fully seised of that fact. Much has been said on behalf of lowgrade propositions, but when I asked honorable senators opposite to name one such concern they could not do so. Whilst they were profuse in generalities on this point, they could not mention one specific case in which they thought this tax would have the effect they feared. One must conclude that their fears are simply figments of their imagination. I ask honorable senators to bear in mind, first, the financial need of the Government at the moment; and, secondly, the reasonableness of this legislation. I feel sure that if they do so they will reject the amendment.

Senator E B JOHNSTON:
Western Australia

– I was interested in the remarks of the Assistant Minister for Commerce (Senator McBride) with reference to the Wiluna mine. I have some knowledge of that property. If the profits made by the company are anything like the amount stated by the Minister, I should not suggest that it be exempted. But the Minister did) not tell the whole of the story. The expenditure on development is shown in the balance-sheet at £55,000 and provision has to be made for heavy depreciation. I believe that the company has spent about £750,000 on its plant, therefore depreciation would represent a heavy item in the balance-sheet. I do not question the accuracy of the Minister’s figures, because he obtained them from an official document, but I repeat that for two-and-a-half years this mine has not paid dividends. I visited the property during the period covered by the statement which Avas read by the Minister, and I know that there was then a general feeling of depression among the people, who believed that the life of the mine was short. The statement cabled from London more recently that its estimated life is two-and-a-half years will. I am sure, he a source of temporary relief to them. I know that unexpected discoveries sometimes entirely alter earlier estimates of the profitable working life of a mine, so it is possible that something like that may happen at Wiluna. I know that the Minister quoted a statement relating to this mine in good faith, and I accept it as such, but the balance-sheet discloses a loss of £12,000 for the year. If the profits of the mine were anything like the amount, mentioned by the Minister, the shares which are selling at lis. in Australian currency would be a short-cut to wealth.

Senator KEANE:
Victoria

– I had hoped that the exemption would be on a larger number of oz. The figures read by the Assistant Minister for Commerce (Senator McBride) relating to the Wiluna mine are incontrovertible.

That company is working on a 3-dwt. ore body, and its achievement is marvellous. The plant and organization are wonderfully efficient. Senator Johnston told us that the life of the mine will probably be very short. As the price of gold to-day is £10 13s. an oz., 50 per cent. of the realization in excess of £9 an oz. will mean that all gold won from that mine will be worth to the company £9 16s. 6d.an oz., which is equivalent to 9s. 9d. a dwt., or in simpler terms, 5d. a grain. The working cost at Wiluna. is about 18s. a ton, so the difference would be11s. 3d. a ton. This company was launched in- the expectation of being able to work an ore body of colossal dimensions, but the geologists who advised the directors evidently made a grave mistake, because later investigations proved that the ore body was not nearly so large as it had been stated to be. Nevertheless, I feel sure that those who had original dealings in Wiluna shares did not lose very much. Atone time they were down as low as 6s. Subsequently they rose to £3, so that those who had been dealing in the shares could have no grievance against anybody. Some of them must have got an ample “ rake-off “.

Senator E B Johnston:

– They are £1 shares.

Senator KEANE:

– I know, and in 1929 they were down to 6s. When the Scullin Government put through its gold bounty bill, which stabilized gold until “1940 at £5 an oz., the company was able to get an enormous amount of money in London. The average English investor could not be induced to touch the shares with gold at £4 3s. an oz., because on assay values and working costs there would be no margin for profit, but there was no difficulty when the directors of Wiluna were able to assure them that the Scullin Government had guaranteed a minimum price of £5 an oz. until 1940. I should have preferred a higher exemption, but the bill ensures at least a moiety of what this party has been advocating. Much has been made of the fact that small parties working in Victoria may be mulct if the bill be not amended. These prospectors and working miners have established an excellent record throughout Victoria. Many mines in Western Australia are working on immense low-grade ore bodies. There are not many large ore bodies in Victoria.

Senator Sheehan:

– That is one reason for the higher exemption.

Senator KEANE:

– The majority of properties being worked in Victoria are small lodes or leaders. In some areas deep mining is carried on with some chance of success. Alluvial shows are of course the most popular. I do not know of many alluvial areas that have not been thoroughly tested. I should like to hear of a good alluvial area, as I do not know of anything that gives greater promise of a quick return. Guildford, in Senator Sheehan’s district, is a colossal deposit which is earning approximately - £7,000 a week. That is one of the rare happenings in mining experience. I hope the Minister will agree to exempt a larger number of ounces.

Senator SHEEHAN:
Victoria

. I regret that the short view has been taken by the Minister in charge of the bill (Senator McBride). We had hoped that we should be able to secure some concessions for these people who work small shows that may prove to be the beginnings of future companies. These people require assistance in the transition period. A few years ago Wattle Gully was producing only a few grains. Gradually it developed, until it has reached its present dimensions. The same may be said of Deborah and several other mines.

Question put -

That thewords proposed- to he inserted (Senator Cunningham’s amendment) be inserted.

The committee divided. (The Chairman - Senator James McLachlan.)

AYES: 13

NOES: 21

Majority . . . . 8

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Sitting suspended from 6.15 to 8 p.m.

Clause 7 agreed to.

Clause 8 -

The Commonwealth shall, subject to the regulations, refund to a taxpayer who is a bona fide prospector the amount of tax upon the first twenty-five ounces of gold on which he directly or indirectly pays tax in any year.

Senator ALLAN MacDONALD:
Western Australia

– I have an apology to offer to Senator Fraser on account of an interjection I made when he was speaking on the second reading of the Gold Tax Bill. I was under the impression that there was no need for prospectors to make applications for refunds of tax, but I find that I was totally wrong. What was in my mind was a suggestion that I had made to the Acting Treasurer that all bona fide prospectors be given an exemption in respect of the first 25 oz. of gold won by them, so that there would be no need for them to pay excise, but that suggestion, which I though would be adopted, was not included in the bill.

Senator AYLETT:
Tasmania

.- The definition of “ bona fide prospector “ includes a person who satisfies the prescribed authority that he is one of two or more persons who, together, have personally performed the whole or major part of the field work of prospecting for and obtaining the gold. Would a small syndicate consisting of men working together receive the same exemption as two men working together?

Senator McBride:

– Yes.

Senator KEANE:
Victoria

.- Even at this late hour I urge the Government to consider the granting of a higher exemption than is provided for in the bill. With all due respect to members of the House of Representatives, the facts of the matter were not clearly presented from certain aspects when the bill was under discussion in that chamber. I submit that the key man in the mining industry is not the geologist, but the “ pickologist “. The geological expert follows the prospector, and shows how large-scale mining can be conducted. One of the greatest needs of Australia is a revival of the gold-mining industry. In every State are men who give their lives to the search for gold; but they are not treated with great liberality by the State authorities.. In a recent effort to develop largescale gold-mining, an aerial survey was carried out in Northern and Central Australia at a cost of £250,000, and excellent work was done. Therefore, I submit that the Government should not deal with the genuine prospector in a niggardly fashion. If it was right for this Parliament to grant a sum of money by way of assistance to the wheat-growers of Australia by taxing the bread of the workers to the amount of £3,500,000, it is not unreasonable to ask that greater consideration than is proposed under this bill should be shown for the prospectors. The Government of Rhodesia is operating in an area where mining conditions are not similar to those in Australia, yet all income from gold in excess of £7 10s. an oz. goes to the Government of that country. No provision is made in the Estimates this year for assistance to the gold-mining industry. I am in entire agreement with Senator Cameron, who emphasized the importance of gold-mining to Australia. Victoria and Western Australia owe their progress very largely to gold discoveries. In all of the States, prospectors experience substantially the same hardships.

Senator Sheehan and I have interviewed the Minister for the Interior (Senator Foll) in regard to the high costs of mining1 in the Northern Territory. Treatment costs already reach £5 a ton at Tennant Creek, and the tax for which this bill provides will represent an additional heavy blow. The annual report of the Mines Department of Victoria for the year ended July, 1937, shows that at. least 35 per cent. of the prospectors each produce from 24 to 60 oz. of gold annually, although a production of 60 oz. is rare. The report supports the claim that the proposed exemption in respect of the first 25 oz. of gold obtained is insufficient. “When the original bill providing for the imposition of a gold tax was defeated in this chamber, and consideration was given to the re-introduction of the proposal in another form, the suggestion was made that the exemption should be in respect of the first 50 oz. produced by the prospector. In the meantime the Government has reduced the tax from 75 per cent. to 50 per cent., so that a liberal concession has been granted to the big mine-owners. This should be accompanied by a generous increase of the exemption for prospectors. Perhaps, if the Government postponed further consideration of this vital clause until to-morrow, it would see its way clear to increase the exemption to the first 50 oz. won by a prospector.

Senator FRASER:
Western Australia

– I concur in the remarks of the Deputy Leader of the Opposition (Senator Keane) and move -

That the words “twenty-five” sub-clause (1) be left out, with a view to insert in lieu thereof the word “ fifty “.

Senator SHEEHAN:
Victoria

– I trust that the Assistant Minister will accept the amendment. In opposing this measure, honorable senators on this side of the chamber have had in mind cases of the kind which this amendment seeks to cover. Whilst I believe that the amendment does not go far enough because of the fact that small mining concerns may have to operate for a long time before any gold is . won, and, consequently, will be put to considerable expense, it is a step in the right direction. I have been accused by the Assistant Minister of deliberately misrepresenting certain portions of this bill, but I think that, on reflection, he will now see that the exemptions will not apply to those people of whom I spoke this afternoon, because they are not bona fide prospectors under the terms ofthis legislation. In any case, under this clause small groups of people who are subsidizing a working miner by contributing towards his wages and guaranteeing him a certain proportion of the profits should gold be struck, will not come within the definition of prospectors.

Senator Wilson:

– The prospector will get the refund, not the financier. ‘

Senator SHEEHAN:

-I cannot see that the miner to whom I have referred will get any refund; he is a working miner, not a prospector. ‘ He may be working for three, four or five people who subscribe, say, £1 a week each towards his wages, and guarantee to him a certain interest in the concern, believing that if certain developmental work be carried out, a payable reef may be struck. How can it be claimed that that man is a prospector? Being in receipt of wages, he is not a prospector.

Senator Collett:

– He has no gold to sell; therefore, he is not affected by the tax.

Senator SHEEHAN:

– He is interested in the matter because of the fact that he is prepared to work for a small wage in the expectation that he will strike payable gold. He is actually selling his labour to his backers, who are providing the wherewithal for him to continue his search for gold. It might be that he would obtain a crushing which would return only a few dwt. of gold, but, on the other hand, persistent” work might eventually produce a crushing which would return 25 oz. of gold. Here again, the quality of the stone is not taken into consideration, and that is another reason why this, amendment should be carried. In some cases, the prospector might not he able to have the stone crushed for some time and it would accumulate. Eventually, when it was crushed, it might return 25 oz. of gold, but that crushing might have taken five, six or seven months to produce. In localities where batteries are not conveniently accessible, working miners sometimes continue breaking down the quartz for long periods. In such a case, 25 oz. of gold might be the reward of six months of steady labour, but the tax would have to be paid on it. The whole proposal is obviously unfair to the industry as well as to those engaged in it. The goldmining industry is totally different from every other industry. When an ordinary manufacturer embarks upon an industry, sales start as soon as production is commenced and therefore profits accrue to the manufacturer immediately. That is not so with the gold-mining industry. It is deplorable to hear people who know nothing about this industry venturing their inexpert opinions upon it. From a legislative point of view, the goldmining industry is’ the most intricate of all. Mention has been made of the Wiluna mine, and of other big mining concerns, but these are merely the red herrings drawn across the trail. The increase of the price of gold is another redherring. “While I do not deny for one moment that some of the increase of the price of gold should go to the Commonwealth by way of taxation, I object strongly to the method of levying that tax provided in this legislation. By means of this tax the Government willderive huge sums of money from such large mining concerns as the Wattle Gully mine at Castlemaine and the Deborah mine at Bendigo. Within the last few weeks, both those concerns have paid dividends. I think the Deborah mine paid 3s. and the Wattle Gully mine a similar figure. For a long time the Wattle Gully mine has been paying at least1s., but let us examine for a moment the history of that concern. It was abandoned 50 years ago as being unprofitable and worked out. In recent years, since the increase of the price of gold, a company set to work and, struggling against adversity, placed the mine on a paying basis. On one occasion it was very nearly closed down for the second time.

Senator McBride:

– Surely the honorable senator does not suggest that the exemption would affect that concern in any way.

Senator SHEEHAN:

– The exemption is not all that we desire, but it is a move in the right direction. The Government seems to be determined not to listen to reason in this regard. Apparently it is advised by a team of amateurs who know nothing about the industry, and, as a consequence, it is not prepared to take action which might possibly result in the discovery of another Wattle Gully or Deborah mine.

Senator McBride:

– The exemption will not affect the companies mentioned by the honorable, senator.

Senator SHEEHAN:

– Not at the moment. I am merely trying to impress upon the Assistant Minister the fact that a gold mine passes through various stages in the course of its development into a paying proposition. Let us assume for the moment that the Wattle Gully mine or the Deborah mine, which are two of the richest concerns in Victoria, were at present struggling for their existence as they were a few years ago. If that were so and they came upon some low-grade ore, then, because of this tax, the claims might have to be abandoned, and the Government would be the loser to the extent of the vast amount of revenue which will now be derived from these concerns by means of this tax. The incidence of the tax on small or struggling mining undertakings may make all the difference between carrying on, possibly discovering something really worth while, and ‘going completely out of existence. That is the objection I have to this measure, and that is what I am endeavouring to . make the Assistant Minister understand. The Government is adopting a short-sighted policy, and it should give some consideration to the proposal put forward in Senator Fraser’s amendment. Perhaps now Senator McBride will admit that those small mining concerns which are so vital to the development of the gold-mining industry are not protected by this clause. We are not concerned for the moment with the flourishing mining ventures.

Senator McBride:

– A party of four conducting mining operations would receive exemption in respect of 100 oz.

Senator SHEEHAN:

– Just what does that exemption mean?

Senator Collings:

– It means a. total of £1,200.

Senator SHEEHAN:

– Even that is not sufficient, and Senator Collings should know better. Does he suggest that that is sufficient?

Senator Collings:

– The honorable “ senator has no right to interpret my remarks in that way.

Senator Uppill:

Senator Sheehan is on the wrong side of the House.

Senator SHEEHAN:

– It is not a matter of being on the wrong side. This is a question on which all honorable senators may differ. It is the most difficult subject we have had before us for a considerable, time. The ramifications of the goldmining industry are so great that many factors enter into consideration in dealing with legislation affecting it. I hope that the Government, will accept Senator Fraser’s amendment.

Senator COLLINGS:
Queensland

– It would be just as well if we confined ourselves to the clause now under consideration and the amendment moved by Senator Eraser. I suggest that the Assistant Minister should postpone further consideration of this clause, in order that he may have an opportunity to consult the Government as to whether or not it is prepared to accept a proposal on the lines of that made by Senator Fraser. That seems to be a desirable way out of the difficulty. As I stated during my second-reading speech, the bill in its present form is an improvement on the original measure, and the Opposition is anxious to expedite its passage. Should we be able to reach an understanding, a good deal of unnecessary argument and repetition may be avoided. I do not suggest that there is not a limit beyond which the Government cannot go, but the amendment moved by Senator Fraser is not unreasonable, and perhaps after consideration the Government may accept it. I shall move that progress be reported in order to give the Minister an opportunity to confer with his colleagues as to how the difficulty which now confronts us can be overcome.

Motion (by Senator Collings) put -

That the . Chairman do report progress and askleave to sit again.

The committee divided. (The Chairman - Senator James McLachlan.)

AYES: 16

NOES: 18

Majority…… 2

AYES

NOES

Question so resolved in the negative.

Senator ARTHUR:
New South Wales

– Should the Government decide to review the basis on which this tax is to be imposed there are several important factors which it should consider. The definition of “ prospector “ does not satisfy me entirely. There are persons in Australia who, while not actually engaged in producing gold, are the life-blood of the industry, in that they provide the money which enables prospectors to carry on their operations. Some prospectors are searching for gold in soft country, but others have to work in hard country where dynamite, fuse and caps have to be used. A prospector using dynamite may need 5 lb. of dynamite, which costs 8s. a 5 lb. packet, in the inner districts of New South Wales. The Assistant Minister (Senator McBride) may not know that at Tennant Creek dynamite costs £44 a ton for freight alone, apart from wholesale or retail cost, whereas in the inner districts of New South Wales it costs only £2 a ton. The cost of living in various mining centres varies to a remarkable degree. The cost of transporting foodstuffs toTennant Creek varies from £22 to £24a ton, whilst the cost of transport to the Wellington mine conducted by the Broken Hill Proprietary Company Limited, for which Senator A. j. McLachlan appears to be so solicitous, is only £2 a ton. Water is also an important consideration. In dry country a prospector can proceed, without interruption; but should he be working in wet country and encounter water he has to provide baling facilities or install a diesel pump which is driven with oil. Or he may have to use a horse and . “ whip “ and provide horse feed or erect a “ whim.” Should a prospector have to sink a shaft 6 x 3 in the clear, and have to timber it. the timber must bo carted.

When the ore is “ at grass “ it has to be carted to the nearest battery, which may necessitate rail transport. I know of prospectors operating between Tenterfield and Casino who have to cart their ore a distance of 30 miles to the railway at Tenterfield whence it is despatched to Port Kembla. Prospectors mining ore of a comparatively low gold content would have little left for themselves after paying freight and the other charges I have mentioned. I met two men in Canberra to-day who are interested in a syndicate at J unee and they said that they do not feel disposed to continue operations if this impost is to he placed upon the industry. They found that the proposition would not be profitable, and decided to delay operations until it was known definitely what action the Government proposed to take in regard to the gold tax.

Senator McBride:

– That is .a weak one.

Senator ARTHUR:

– The two gentlemen to whom I refer are now in the public gallery of the House of Representatives. I am sure that they would be only too willing to place their practical knowledge at the disposal of the Government. After all, an ounce of experience is worth a ton of theory. It is about time that the Senate refused to act merely as a rubber stamp for officialdom in matters of this kind. This proposal will deprive the prospector of his meagre earnings. I urge the Assistant Minister to consider the points which I have raised, and to note them for future reference. Perhaps, it might be possible to embody my suggestions in regulations.

Senator McBRIDE:
Assistant Minister for Commerce · South Australia · UAP

– The Government has every sympathy with the views expressed by honorable senators who have urged that the refund of tax to the prospector be paid in respect of the first 50 instead of the first 25 oz. delivered by him in any year. However, it has made the fullest possible survey of the loss of revenue involved in concessions which it has already granted. It has also inquired into the conditions under which prospectors operate, in order to ascertain what concessions would encourage them to con- ii une operations. It decided that the latter objective would be achieved if the prospector were allowed £266 a year free of tax. This concession will be implemented through the provision to refund tax on the first 25 oz., of gold delivered. I know personally of numbers of men to whom this concession will prove an incentive to engage in prospecting. Honorable senators will agree that the lure of gold entices many men to go prospecting under conditions much less favorable than are provided under this measure. The reduction of the tax from 75 per cent, to 50 per cent, on the amount by which the price of gold exceeds £9 an oz., is estimated to involve a loss to revenue of £500,000 a year, whilst the concession in respect of the refund on the first 25 oz. delivered by a bona fide prospector may mean a loss to revenue up to £100,000. These concessions are, therefore, very considerable. I assure honorable senators that when more definite data is available to the Government, following actual experience of the operation of this measure, their request that the refund of the tax to prospectors be liberalized, will be carefully and sympathetically reviewed. Senator Sheehan submitted several hypothetical cases.

Senator Sheehan:

– They were not hypothetical.

Senator McBRIDE:

– He cited the case of a miner who undertook to work for a syndicate, or group of people, in return for an allowance of £2 a week and a quarter interest in the show. The right of that miner to a refund of tax under clause 8 of the measure would depend on the particular arrangements into. which he entered with his principals. If the arrangement were that he should receive £2 a week, plus one quarter of the gold won from his work, he would, in my opinion, be entitled to a refund of tax on his share of the gold up to 25 oz. On the other hand, if his agreement provided that he receive £2 a week and a percentage of the profits from the show, he would not be entitled to this refund, because he would then, in fact, receive not gold but a share of the profits. That is my personal opinion, and, of course. I give it subject to legal advice. I regret that the Government cannot accept the amendment. I again assure honorable senators that the Government is prepared to review their representations within a reasonable time in the light of actual experience.

Senator ALLAN MacDONALD:
Western Australia

.- On the 3rd October, I made representations to the Acting Treasurer (Mr. Spender) to apply the refund provision in respect of 50 oz. instead of 25 oz. I am sorry that he could not see his way clear to agree to my requests. In fairness to him, I propose to read the letter which he wrote in reply to me on the 10th October-

I refer to your letter of the 3rd October, 1939, in which you ask that consideration be given by the Government to the following suggestions in connexion with the excise duty on gold:-

  1. Exemption from payment of the excise on the first50 oz. to prospectors who are winning less than 100 oz.
  2. The grant of a hardship clause which will permit low-grade mines continuing development and exploratory work and allow them to pay a dividend to the shareholders who have risked their money in such mining ventures.

The decision with regard to a tax on gold was arrived at only after the most careful consideration by the Government. The Government regarded it as important that some form of tax should be imposed on the recent unearned increment in gold prices due to the outbreak of war and the consequential depreciation of sterling in terms of United States of America dollars.

I feel that I must stress the point that this increase in price was not a normal one that the gold-mining industry could expect to retain for itself. As the increase arises from the war, it is only fair to the people of Australia, as a whole that a reasonable proportion of such increase should be paid to the Government to help finance the war.

Although it was proposed in the first in- stance to fix a tax at the rate of 75 per cent. of the amount by which the price of gold exceeded £9 per oz. of fine gold, on further consideration, it was decided to collect an excise duty on gold at a lower rate, viz. 50 per cent., in lieu of 75 per cent.

Asa result of this the gold producer, in this instance, the prospector and low-grade proposition!;, will receive £9 15s.6d. per oz. of fine gold based on the present price of £1011s. per oz. This price of £9 15s.6d. shows an increase of about 1 4s. per oz. over the average price for 1038-39. This, I think, is a very important concession to the industry and should enable prospectors and low-grade propositions to furry on satisfactorily.

Having regard to all the circumstances, and in . particular to the huge task of financing thewar which confronts us and with which 1 know you are fully cognisant, I regret to inform you that I am unable to advise the Government to adopt the suggestions put forward by you.

I have heard nothing in this debate which would influence me to alter the view which I placed before the Acting Treasurer. Therefore, I shall support the amendment. Subsequent to receiving the letter which I have just read, I made further representations to the Acting Treasurer on the points raised by Senator Arthur. I emphasized the many difficulties confronting prospectors ‘and the expenditure which they had to incur. Despite that appeal, the Acting Treasurer could not see his way clear to apply the refund provision to 50 oz. instead of 25 oz. At the same time, it is only fair to point out that, on the past average, prospectors in Western Australia win only about 12½ oz. a year. I am now alluding to the man who goes out alone or with one mate. I know quite a large number of prospectors, but I have never heard of any of them winning as much as 25 oz. in a week, as has been suggested by some honorable senators. With the exception of Jim Larcombe and his son, who discovered the Golden Eagle, I know of no prospector whose operations have proved so successful as that. Prospecting, in the main, is most laborious work. These hardy old pioneers venture forth in all kinds of weather, and often have to be satisfied with as little as 5 oz. or 6 oz. in one year. However, particularly in rough country of the kind mentioned by Senator Arthur, prospectors are obliged to incur considerable expenditure in the purchase of explosives. I agree with the honorable senator’s remarks concerning the heavy expenditure which prospectors at Tennant Creek are obliged to incur. I base that statement on a report made by a mining inspector in Western Australia following a visit to Tennant C Ruby Creek, and other fields in the Northern Territory. These costs are colossal, and an exemption tax in respect of 50 oz. would be quite a reasonable concession to prospectors there.

Senator SHEEHAN:
Victoria

– The Assistant Minister (Senator McBride) endeavoured to reply to points which I raised earlier, but he did not clear up the matter at all. He admitted that he was not sure ‘that the opinion he gave concerning the exemption of prospectors, in the circumstances I mentioned, was legally sound. Consequently, honorable senators will realize some of the difficulties arising out of this proposal, He intimated that the Government was not prepared to accept the amendment, because of the loss of revenue which would he caused were it adopted. The Government should not approach this matter from that point of view; rather should it have in mind, the possibility that any such loss would be more than recouped by rich discoveries. As I pointed out earlier, Wattle Gully and the Deborah mines are now coming into prominence, and there is every prospect that we shall reap a rich reward from those two mines which were discovered mainly through the efforts of prospectors. I urge the Government, therefore, to visualize the possibility of further discoveries of this kind, which will return tenfold ‘the revenue which it is now asked to sacrifice by increasing the exemption.

Senator FRASER:
Western Australia

– One point has apparently been overlooked in this discussion. In Western Australia, 750 prospectors are operating. These men were financed by the State Government, and the majority of them have already repaid the advances made to them. In addition to this tax, these men will probably be obliged to pay a State tax on gold. I say . that subject to correction. If the Government intends to deduct £20 12s.6d. from the first 25 oz. of gold won–

Senator McBride:

– But that is not proposed.

Senator FRASER:

– I understand that in. certain circumstances that amount will be deducted from the first 25 oz. of gold won. If so. a great hardship will be inflicted on prospectors who endure many hardships and have to meet heavy charges in connexion with the cartage of water and ore to the nearest crushing mill. There is a belief that if am an. is fortunate enough to win more than 25 oz. within twelve months he will be taxed. If he wins 50 oz. will the Government make a deduction in respect of the total quantity won?

Senator McBride:

– The first 25 oz. of gold will be exempt.

Senator FRASER:

– Now the matter has been cleared up.

Senator McLeay:

– If the honorable senator had read the bill he would have discovered that for himself.

Senator FRASER:

– Some of the statements made by the Leader of the Government are impossible to follow. The bill contains many inaccuracies and inconsistencies to which we are directing attention. For instance any gold won in excess of 25 oz., and upon which the prospector will be taxed, may be in the hands of the Commonwealth Bank for twelve months before a refund is made. I object also to this taxing of revenue at the source. The principle is inequitable and is not applied to other industries. I hope that when this measure is under review before the end of the financial year, as the Minister promised, consideration will be given to this matter. Many prospectors in Western Australia willbe out searching for gold for the whole of the twelve months. Some of them may never apply for a refund of the tax. The Government is dealing with gold-mining prospectors in a manner totally different from its treatment of large companies. In many cases the Taxation Department has to make repeated demands on companies for the payment of taxes levied on them, but in the case of the gold-mining industry the revenue is most unfairly taxed at its source. I hope that the Minister will agree to the amendment so that the exemption provision will apply to the first 50 oz. of gold won. I do not agree with the Minister’s statement that the increased exemption would mean a. loss to the Government of £100,000..

Senator AMOUR:
New South Wales

– When the Government’s proposal was before the Senate on a former occasion, wo were promised that a provision would be inserted in future legislation to exempt from taxation the first 50 oz. of gold won.

Senator McBride:

– That statement is not correct.

Senator AMOUR:

– That promise was made to sixteen senators on this side.

Senator McBride:

– I do not know who made that promise.

Senator AMOUR:

– It was made when we were urging that the bill should be recast. I am surprised that the Ministry should now seek to limit the exemption to 25 oz. The Minister has told the Senate that the exemption of 25 oz. will allow a prospector to have an income of £260 a year befoer he is required to pay .the tax. That is not much for people who suffer all the hardships incidental to gold prospecting. They have to work long hours under the most trying conditions. If they are fortunate enough to make a decent strike, and

Iia vo visions of an early retirement, they are doomed to disappointment because the Government, now proposes to levy a tax on all gold won by them in excess of 25 oz. The amount of gold to be exempted should be at least 50 oz.,’ in order to compensate prospectors for the hardships which they have to endure. [ urge the Minister to accept the suggestion of the Leader of the Opposition and recast the measure. The Government of New South “Wales has, for a number of years, been paying prospectors £1 a week, and in addition it provides them with certain tools in order to carry on prospecting for gold.

Senator Herbert Hays:

– Most of the State governments do that.

Senator AMOUR:

– Now the Commonwealth Government comes along with its tax scheme. It intends to make a levy on every prospector who wins more than 25 oz. of gold in a year.

Senator McBride:

– How many ounces of gold would a man have to win before the Commonwealth got £12 from him?

Senator AMOUR:

– I do not know, but I do not think it would be a great amount. The Government should give every encouragement to gold prospectors, because the Commonwealth depends on gold for the payment of its overseas debts. No other commodity has the same value in international trade. Apparently, however, this Government believes in “ five bob “ a day soldiers, and in starving the gold-diggers.

Senator E B JOHNSTON:
Western Australia

– For reasons which I gave in my second-reading speech, I intend to support the amendment submitted by ‘Senator Fraser. I hope that the Government will accept it and give prospectors an additional measure of relief. We deal with very many bills in this chamber, but rarely are we successful in inserting amendments, except on the initiative of the Government. In this matter the Minister might very well meet honorable senators. I listened to some honorable senators from the eastern States advocating this additional relief to prospectors. I was particularly interested in the remarks of Senators Keane, Sheehan and Arthur, who put up an unanswerable case for the prospectors. The arguments used by those honorable gentlemen apply with greater force to .prospecting in Western Australia. Not long ago I visited Ballarat and Bendigo, both of which centres have been great producers of gold. The prospectors now working in those wellwatered districts, close to the amenities of civilization, are in an infinitely better position than are the gold prospectors in Western Australia. With the exception, perhaps, of those at Ravensthorpe, prospecting in Western Australia is carried out in arid districts in the vicinity of towns which have no future apart from gold-mining, or in remote areas where transport difficulties are great and charges high. When the goldmining industry declines, as no doubt it will one day, important centres like Kalgoorlie, Leonora and Wiluna will practically cease to exist. Their future is bound up with the prosperity of the goldmining industry. All the arguments point to the wisdom of giving greater encouragement to our gold prospectors. I urge the Government to accept the amendment.

Senator AYLETT:
Tasmania

– If the Minister in charge of the bill (Senator McBride) realized how hard is the lot of the prospector, he would be more sympathetic than he appears to be. He has stated that a tax-free income of £266 per annum would satisfy almost any prospector. Perhaps it would, if the prospector lived in or near a township, but mining work takes these men into the outback areas. Sometimes they have to pay 6d. per lb. to have their food supplies packed out to them. When they have saved up a certain sum of money after, perhaps, many month.1* of bard work, they take the risk of spending months in the bush in search of payable gold. They may find small leads which encourage them to continue the search, despite the privations which they must necessarily endure. This hardship may continue for months, or even for a year or two, because they always have hopes of rich finds. In the meantime they contrive to eke out a bare existence. If, after a year or two of search, they happen to secure up to 50 oz. of gold in one year, which would not nearly compensate them for their earlier losses and hardships, it would be most unfair to compel them to pay the tax on all of the gold won in excess of the first 25 oz. Prospectors often sleep in the open air under trees, and risk their health in their search for precious metals, and in the event of accident or illness they experience additional hardship.

It has been said by one honorable senator that the State authorities have not encouraged prospectors, but in Tasmania prospectors have been assisted by the State Government, and have been paid up to £2 a week. Large sums of money have been expended by the local authorities in cutting tracks through the bush in order- to encourage prospectors to search for gold. The present proposal, ‘however,* is1’ likely to discourage this search, and, as one who has had personal experience of prospecting I suggest to the Government that it would’ be well advised to accept the amendment.

Senator CLOTHIER:
“Western Australia

– The Government should take notice of the speeches of honorable senators on this side of the chamber, particularly those who have had practical experience as miners. Senator Arthur has explained the disabilities that prospectors suffer, so has Senator Cunningham, and no member of this Parliament knows so much about mining work as he does. I have had a good deal to do with miners in Western Australia, and I know two groups of prospectors who worked for two years without striking a colour. If they found 50 oz. of gold in a year at the conclusion of a long search, it would he unfair to ask them to pay the tax in respect of the whole of that quantity. Consideration should be given to the period for which prospecting parties have been at work, and an exemption in respect of the first 50 oz. of gold won would not be too great a concession to make.

Senator CAMERON:
Victoria

– It has been said that a refund of the tax in respect of the first 25 oz. would mean that the prospector would receive about £260 for that quantity of gold, but I point out that, considering the value of the £1 note in terms of gold, the value of the gold would be only about £100. The £1 note to-day is worth 8s. only and the 10s. note should be branded “Four shillings “.

The CHAIRMAN:

– I cannot allow the honorable senator to continue along those lines. He must discuss the amendment before the committee.

Senator CAMERON:

– Prospectors who travel hundreds of miles from civilization would find that the proposed exemption up to 25 oz. would be worth very little, if anything, to them, having regard to the rising costs of food and the various other articles needed by them. The request embodied in the amendment is a very modest one.

Senator McBRIDE:
. Assistant Minister for Commerce · South Australia · UAP

– 1 cannot add anything to what I have already said in regard to what the Government is prepared to do in tho matter of this tax, but I think that honorable senators opposite fail to appreciate . the liberality of the Government’s offer. Surprise has been expressed at the fact that the Government has resorted to taxation of this kind. The Labour Government in New Zealand, instead of taking 16s. 6d. an oz. by way of tax, collects £1 0s. 6d. ; and instead of providing an exemption up to 25 oz., as this bill proposes, every ounce of gold produced in the dominion is subject to tax. That Government imposes a duty on the export of gold, and this regulates the price in the dominion. I suggest that the Commonwealth Government’s present proposal furnishes convincing proof that it sincerely desires to do what is right towards prospectors and others who search for gold.

Question put -

That the words proposed to be left out, (Senator FRASER’S amendment) be left out.

The committee divided. (The Ch airman - Senator James McLachlan.)

AYES: 17

NOES: 17

Majority . . . . Nil

AYES

NOES

Clause agreed to.

Clauses 9 to 12 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 2183

WHEAT INDUSTRY (WARTIME CONTROL) BILL 1939

Second Reading

Debate resumed from page 2139 (on motion by Senator McLeay) -

That the bill be now read a second time.

Senator E B JOHNSTON:
Western Australia

– I thank the Government and the Senate for having adjourned the debate on this bill this morning and so permitting me to continue my remarks now. The adjournment has given me an opportunity carefully to peruse and consider the measure, and that perusal has convinced me of the necessity for an amendment on the lines proposed by Senator Wilson. Such an amendment; is desirable for the protection of the interests of the wheat-growers. In the absence of some such amendment I shall be compelled to oppose the bill.

This measure deals with the fixation of a home-consumption price, which is a”’ permanent benefit to the wheat-grower. That benefit is one that is ensured to him by the legislative activity of the Federal Country party, and one which, having been secured, should be jealously guarded. Few Australians will question the justice of giving to the Australian wheat-grower, who has to pay Australian prices for all his requirements, a permanent Australian price of 5s. 2d. a bushel at ports for that portion of his crop which is consumed in Australia. That is the result of the homeconsumption price legislation which we are now considering. Under normal conditions the proceeds of the home-consumption price should be paid to the growers direct, without diversion to the ever-grasping hands of the Federal Treasury. Without consulting the growers, the Commonwealth Government has decided to acquire the forthcoming wheat crop., and consequently it is liable under the Constitution to pay a just price, which should be at least the cost of production. The average cost of production was estimated by the royal commission on the wheat industry, in ‘ its earliest report, at 3s. 10½d. a bushel at sidings, and the Government should be obliged to pay that price for all wheat compulsorily acquired.

Senator Keane:

– Three shillings and tenpence halfpenny seems to be a high figure.

Senator E B JOHNSTON:

– It is the price for which wheat-growers’ organizations in all parts of Australia are asking. Owing to war conditions, the recent conference in Melbourne of the Australian Wheat Growers Federation, which represents all organized growers in Australia, expressed its willingness to accept 3s. 10½d. a bushel at ports. That price is very much above what the Commonwealth Government proposes to pay. Of course, if the overseas price of wheat should increase, the flour tax would automatically decrease correspondingly, so that the Australian consumer of bread will, in effect pay’ the stabilized price of 5s. 2d. a bushel at Williamstown, Victoria. Should the price of wheat go up, as it has done on previous occasions, particularly during the last war, and reach a price above 5s. 2d. a bushel, Williamstown, then, under the home-consumption price legislation which we are now considering, the Australian wheat-grower would supply the local market at 5s. 2d. a bushel, Williamstown.

Senator Keane:

– Wheat has never been cheaper and bread has never been dearer than at present. It is a shocking state of affairs.

Senator E B JOHNSTON:

– That being so, there is something wrong with the economic system. The circumstances causing that state of affairs are beyond the control of the wheat-grower, who, on that account, should receive greater, and not less, assistance from the Government. The home-consumption price was fixed for the benefit of the Australian grower, and not for the relief of the Federal Treasury, and it is essential that the whole of the proceeds of the tax should go to him. That, however, should be an extra payment to the wheat-grower beyond the guaranteed price, especially if the realizations for the wheat by the Australian Wheat Board cover the guaranteed advance to which I have referred. This measure devotes the proceeds of the flour tax to the Commonwealth Treasury for the duration of the war, and six months thereafter, in order to recoup the Government for the advances on wheat which, so far, have been promised for only one year. I have no doubt, however, that so long as the war continues, and probably for six months after its termination, the Government will continue to acquire the wheat crop and dispose of it in the interests of the growers, who, owing to the war, are faced with extraordinary marketing and transport difficulties. The Government has stated that the proceeds of the flour tax are included in the initial advance of 2s.10½d. for bagged wheat and 2s. 8½d. for bulk wheat, less rail freight. I hold the view that the proceeds of the flour tax should be additional to the guarantee, but the Government has not agreed to that, and we are compelled to accept its decision. I venture to say that the sales of wheat by the Australian Wheat Board, under the direction of the Minister for Commerce (Senator McLeay), will be such that the Government could guarantee 3s.10½d. a bushel for wheat, as I have suggested. We cannot foresee how rapidly the price of wheat may alter under war conditions, and I hope that the Government will soon see its way clear to add the proceeds of the flour tax to the amount guaranteedfor the first advance. Although I am willing to assist the Government to obtain the proceeds from the flour tax for the current year, I do not propose to assist it to hand Over the proceeds of that tax to the Federal Treasury for the period of the war and for six months thereafter, as provided in this measure, particularly as the Government is acquiring the wheat for only one year. We should also provide that in future the proceeds of the flour tax shall be paid into the pool annually for the benefit of the wheat-growers. The number of wheat-growers alters from year to year, and if there is a shortage in one year, the Government must not take a portion of the flour tax in asubsequent year in order to defray an old liability.

Senator McLeay:

– That is not the intention.

Senator E B JOHNSTON:

– The legislation is not clear on that point; but I believe that the Government is . prepared to amend the clause in order to give effect to my suggestion. Senator Wilson’s amendment, the object of which I support, should be accepted by the Government, and any further amendments necessary should be made to ensure that the wheat-growers shall receive permanent benefit from the flour tax. The legislation providing for a home-consumption price was regarded as being of a permanent nature to assist the wheat-growers, and not to benefit the Treasury. Each year’s flour tax should be kept as a separate payment for the benefit of the wheatgrowers in that particular year. This measure should be limited in its operation and incidence to the 1st December, 1940. and no longer, thus ensuring the results which I have suggested. The Government should be willing to meet the wishes of the primary producers, if . not to the degree we desire, at least so far as the financial position permits.

Senator McLEAY:
South AustraliaMinister for Commerce · UAP

. -in reply- The amendment which Senator Wilson intends to move does not interfere with the policy of the Government. There was some doubt as to whether the measure embodied the Government’s intention in that respect, and the Government proposes to accept the amendment and thus place the matter beyond doubt. I remind Senator Cunningham that the bill has nothing to do with the flour tax as such, as the only question involved under this measure is the manner in which the tax shall be distributed. As Senator Johnston mentioned, the policy of the Government is to keep each crop in a separate pool, and it is desired to limit the payments to the Commonwealth Bank as suggested. The Government did not commence to collect the flour tax until the 2nd Decern bor, and obviously there is not much money in the fund at thi 3 stage. As the first advance is to be at the rate of 2s. 10½d. a bushel for bagged wheat practically the whole of the money will have to be provided by the Government. This is a most generous advance, and the Government which is watching the position with great interest, is pleased to notice that the export price of wheat has, during the last few days, increased to 3s. 4£d. a bushel; but transport is the real problem. I was surprised that Senator Cunningham should, in a. sneering manner, ask what the Government proposes to do in the matter of shipping. It should be obvious to honorable senators that the primary produce which the Commonwealth Government is selling, to the Mother Country is sold on an f.o.b. basis, and that Great Britain has to provide the ships. It is unnecessary for mo to occupy the time of the Senate in reminding honorable senators of the enormous problem facing the Government of the United Kingdom ‘ in that respect. Wo. have- been in close communication with the British Government-

Senator Sheehan:

– What is causing the shortage of shipping? We have been told that the trade routes are open.

Senator McLEAY:

– The honorable senator should have sufficient intelligence to answer that question for himself. Some honorable senators arc always willing to belittle .the valiant efforts of the British Government in this national emergency; Senator Sheehan should realize that that Government is doing its best, under most difficult circumstances, .to provide the shipping for the transport of Australian primary produce overseas. The attitude adopted by the honorable senator in connexion with this proposal is similar to that which he has displayed towards the Government’s war activities generally.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 4 agreed to.

Clause 5 (Payments by States not to be made in respect of certain wheat).

Senator WILSON:
South Australia

– Is the Minister for Commerce satisfied that under this clause the flour tax will go to .the wheat-growers in proportion to the quantity of wheat which they sell or offer for sale? In view of the amendment which I propose to move, and the Government intends to accept, 1 cannot understand the effect, of this clause. 1 have referred the provision to the Parliamentary Draftsman who assures me that it will not interfere with the right of the wheat-grower to receive the proceeds of the flour tax after the Government has been repaid the initial advance. I cannot quite follow his reasoning, and I should like a definite assurance from .the Minister on that point.

Senator McLEAY:
SOUTH AUSTRALIA · UAP; LP from 1944

– I am advised by the Solicitor-General that the clause is necessary.

Clause agreed to.

Clause 6 (Use of moneys in Wheat. Industry Stabilization Fund).

Senator KEANE:
Victoria

.- Am I correct in assuming from the statement of the Minister that the Government did not commence to collect the flour tax until the 2nd December of this year ?

Senator McLeay:

– Yes; for the second year.

Senator KEANE:

– Honorable senators who have supported this measure spoke only on behalf of one section of the community, and disregarded entirely the fact that in the first year of the operation of the flour tax £3’.500,000 has been taken from the workers iri the form of a bread tax. As I interjected, wheat has never been cheaper and bread has never been dearer. 1 am amazed to be reminded that the flour tax is now regarded as a permanent tax. All that I can say is that when the Labour party is in power, that tax position will not continue any longer than is neccessary.

Clause agreed to.

Proposed new clause 6a.

Senator McLEAY:
Minister for Commerce · South Australia · UAP

. -I move -

That after clause6 the following newclause be inserted: - 6a Notwithstanding anything contained in this act, if and when any such advances made by the Commonwealth Bank have been fully repaid, the provisions of the Wheat Industry Assistance Act, 1938, the operation of which is suspended by section 4 of this act, shall again come into operation and shall continue in operation as it this act had not been passed until such time as any further such advances are made by the Commonwealth Bank.

Senator WILSON:
South Australia

– I appreciate the action of the Government in accepting this amendment. It is further proof of the readiness of the Government at all times to do justice to the farmer. Immediately the defect which the amendment is designed to overcome was pointed out, it took action in the matter. The amendment makes it perfectly clear that so soon as the Government recovers the £23,000,000 involved in making the initial advance to the wheatgrowers, the flour tax will be paid to the States in the terms of the old legislation, and will be paid out by the State governments to the growers in proportion to the wheat sold.

Senator E B JOHNSTON:
Western Australia

). - I commend , Senator Wilson for having drawn the attention of the Government to this particular defect, and also the Government for its action in immediately submitting this amendment, the effect of which will be to retain permanently to the wheat-grower the benefits granted to him under the home-consumption price legislation _ which was enacted on the initiative of the Country party representatives in the last composite Government.

Senator Collings:

– Do not forget the help rendered by the Opposition.

Senator E B JOHNSTON:

– I recall that at that time the Opposition in the House of Representatives moved - and a similar request was made in this chamber -that this legislation be enacted on an annual basis. The Government of the day, however, placed it on a permanent basis, and that advantage will be retained to the industry through this amending legislation.

Amendment agreed to.

Proposed new clause agreed to.

Clause7 -

This act shall continue in force until the expiration of six months after the issue of a proclamation that the war existing between His Majesty the King and Germany has ceased, or until such earlier date as is fixed by proclamation, and no longer.

Senator McLEAY:
Minister for Commerce · South Australia · UAP

– I move -

That the words “ the expiration of six months after the issue of a proclamation that the war existing between His Majesty the King and Germany has ceased “ be left out with a view to insert in lieu thereof the words: - “ and including the first day of December One thousand nine hundred and forty “.

Senator WILSON:
South Australia

– The effect of this amendment will be to prevent a government from using the flour tax in one year to meet any deficiency in respect of an advance in the previous year. But for this amendment it would be possible, for instance, in the first year of the operation of this legislation, for the Government, if it were £1,000,000 short in respect of its advance after crediting sales of wheat, and flour tax collections during the year, to use the flour tax collected in the following year to make up that deficiency. Unless a further measure be introduced, diversion of funds in that way will be impossible, and, consequently, the flour tax will automatically go to the States after the 1st December, 1940. I appreciate the action of the Government in so readily accepting this amendment.

Senator Collings:

– When we assume office we shall repeal the flour tax, and stabilize the wheat industry properly.

Amendment agreed to.

Clause, as amended, agreed to.

Title agreed to.

Bill reported with amendments; report adopted.

Bill read a third time.

page 2186

CUSTOMS TARIFF (No. 3) 1939

First Reading

Debate resumed from page 2139 (on motion by Senator McBride) -

That the bill be now read a first time.

Question resolved in the affirmative.

Bill read a first time.

Secondreading

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

.- I move-

That thebill be now read a second time.

This bill covers increases of customs duties made in September, 1939, in connexion with the budget. The object of these increases, as explained by the Minister for Trade and Customs (Mr. John Lawson), when he introduced the relevant tariff proposals, is to provide additional taxation to assist in financing the Commonwealth’s wartime programme. Details of the increases of customs duties are as follows: -1d. a gallon on petrol and benzol; 3d. a gallon on mineral lubricating oil; 3d. a gallon on beer;1s. a gallon on whisky, rum and gin; and 2d. per lb. on kapok.

The increase of duty on petrol also necessitated a corresponding increase of duty on petroleum products of high petrol content, and on turpentine substitutes which can be used in place of petrol. Revenue duties of 5 per cent. British and 25 per cent. foreign are imposed on cotton tyre cord and cotton tyre cord fabric, which were hitherto admitted at non-protective rates of duty of free, British preferential tariff, and 15 per cent. general tariff, under the by-law to tariff item 404. The additional customs revenue budgeted for as the result of these increases was approximately £1,400,000. In the present situation, it is ‘ difficult to say whether this expectation of increased revenue will be fully realized, but the estimate was founded on facts in possession of the Government, and not on hypothetical speculation.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without requests or debate.

page 2187

EXCISE TARIFF (No. 2) 1939

First Reading

Debate resumed from page 2139 (on motion by Senator McBride) -

That the bill be now reada first time.

Question resolved in the affirmative.

Bill read a first time.

Second Reading

Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

.- I move-

That the bill be now read a second time.

This bill covers increases of excise duties made in September last in connexion with the budget. The excise duty increases are designed to assist in the financing of Australia’s wartime requirements. The extent of the increases of excise duties are1d. a gallon on petrol, making the rate 6½d. a gallon.;1d. a gallon on benzol, the new rate being 2½ a gallon; 3d. a gallon on beer, increasing the rate to 2s. a gallon;1s. a proof gallon on whisky, rum and gin, making the new rates 27s. on whisky, 29s. on pure rum, 30s. on blended rum and 29s. on gin. The additional revenue expected during 1939-40 from these increases of excise duties is as follows: -

Question resolved in the affirmative.

Bill read a second time and passed through its remaining stages without requests or debate.

page 2187

HOUR OF MEETING

Motion (by Senator Foll) agreed to -

That the Senate, at its rising, adjourn till 1 1 a.m. to-morrow.

page 2187

ADJOURNMENT

Flour Tax Collections - Newnes Shale Oil Industry - Australian Broadcasting Commission : News Broadcasts - Temporary Mechanics in Postal Department - Aircraft Trust Account - Commonwealth Aircraft Corporation - Seymour Military Camp: Hire of Motor Vehicles - Pittwater Yacht Club - Military Pay.

Senator FOLL:
Minister for the Interior · QUEENSLAND · NAT; UAP from 1931

– I move -

That, the Senate do now adjourn.

I have received answers to several questions which were asked to-day, upon,

SenatorFraser asked the Minister for Commerce -

What are the amounts distributed from the flour tax for September and October of this year?

My colleague has supplied the following answer : -

September. £140,750. and October, £443,804

  1. Is it a fact that, despite the Government’s request to speed up production at the Glen Davis shale oil industry, the Shire Council has prevented loads of over 10 tons being carried on the road owing to the breaking down and damage done to a number of culverts, and that loads are now limited to . 10 runs over the road?
  2. Is it a fact that machinery necessary to ensure the early production of oil at Glen Davis has had to be returned to Sydney owing to the roads not being capable of carrying same?
  3. Is it a fact that the State Government is repairing this road as a relief work and that employees arc casuals only, beingemployed two weeks in eight and two weeks in four, &c. ?
  4. Will the Government take action to expedite the early construction of this road by having full-time employment engaged upon it. so that the Davis Company will not be hampered in their efforts to ensure early production of oil at that centre?

The Acting Minister for Supply and Development has supplied the following a nswers : -

  1. It is understood that the Rylstone Shire Council recently adopted a resolution limiting loads to. be carried over theRylstone-Glen Alice-Glen Davis road to not more than 10 tons. Representations have already been made by the Commonwealth Government to the Rylstone Shire Council asking, in view of the urgency of the matter, that permission be given to National Oil Proprietary Limited to transport machinery and plant over this road regardless of weight, subject to the understanding, that the company would indemnify the Council in respect of reasonable damages. The company is prepared to do this.
  2. It has been ascertained that the machinery required for the production of oil at Glen Davis has not, as a result of the Council’s decision, been returned from Rylstone to Sydney. Two heavy vehicles arc at Rylstone and one is in transit between Rylstone and Glen Davis.
  3. Following upon representations made by the Prime Minister to the Premier in August last, the road betweenCapertee and Glen Davis was taken over by the Main Roads Hoard of New South Wales on the6th October, 1039. Two hundred and twenty men are now working continuously on this road, and I am informed that the number will shortly be increased to 300. In addition, it is stated that the largest and most efficient plant of its kind in Australia is being used on the road. The distance between Capertee and Glen Davis is approximately 26 miles, whereas it is 36 miles from Rylstone to Glen Davis. The State Government is, therefore, concentrating upon the former road as the principal means of ingress and egress for the oil works.
  4. See reply to 3.
Senator McBRIDE:
South AustraliaAssistant Minister for Commerce · UAP

– Yesterday, Senator Armstrong asked to be informed of the purpose of the Aircraft Trust Account. That trust account was established by section 17 of the Supply and Development Act No. 6 of 1939. Generally, the trust account is to record the transactions of the assembly of Beaufort aircraft. The cost of the Beaufort aircraft will be recovered partly from the British Government, and partly from the votes of theRoyal Australian Air Force as payment for the completed machines. The £292,000 represents work which is anticipated to be in progress at the 30th June, 1940, and for which payment will not then have been received. It will probably be actually received in the financial year 1940-4.1.

Senator Armstrong:

asked forcertain information respecting payments to the Commonwealth Aircraft Corporation. Amounts paid to the Commonwealth Aircraft Corporation for services already rendered total £716,000. These payments represent advances towards the cost of materials purchased and labour used by the Commonwealth Aircraft Corporation in connexion with the production of aircraft for the Defence Department. The actual expenditure by the corporation is considerably in excess of the total of the advances made.

SenatorKeane asked a question relating to the hire of cars at Seymour. The. department has no contract with a firm named Speed. It has purchased a number of motor vehicles, but the numbers are insufficient for all army requirements, and additional vehicles have been hired to meet requirements. The vehicles hired are subject to a certificate by a Defence Inspecting Officer that they are in good mechanical condition and are suitable for the purpose for which they are to be used.

Senator Armstrong:

asked a question relating to the PittwaterYacht Club. This is a voluntary coastal patrol whose members have volunteered their own services, together with that of their boats. They are not members of the Naval Reserve, and they are not at present employed on naval duties. No public funds have been, or will be, used to subsidize them.

Senator WILSON:
South Australia

.- -Yesterday . I stated that the political squabble about Militia pay, concerning which much was said by several honorable senators, had not originated with members of the Militia. I pointed out that those persons who joined the Militia did so because they wanted to serve their country. To-day I received a telegram from, the Militia camp at Gawler, in South Australia, entirely substantiating what I said last night, expressing consternation at the Government’s proposal to place the Militia in reserve, and stating that militiamen would much prefer to continue to serve at the existing rates of pay rather than be transferred to the reserve. The Militia were selected as Australia’s first line of defence. Men enlisted in the Militia to serve Australia in time of need. I urge the Government, between now and the expiration of the three months’ camp next year, to consider seriously the desirability of giving to those militiamen who, in many cases have given four, five or six years’ service and training, the option to continue to serve their country at all times as Australia’s first line of defence.

SenatorFOLL (Queensland - Minister for the Interior) [10.23]. - in reply - I shall bring the matter mentioned by Senator Wilson to the notice of my colleague, the Minister for the Army. I have now received additional answers to questions.

Senator Brand:

asked , the Minister representing the Postmaster-General -

Is it afact that the services of a number of temporary mechanics in the Postmaster - General’s Department will be dispensed with early in the New Year? If so, will the PostmasterGeneral givean assurance that temporary returned soldier mechanics will be given the benefit of the returned soldier preference provisions of the Public Service Act?

The Postmaster-Generalhas supplied the following answer: -

No general reduction of the number of temporary mechanics is contemplated in the near future, and the onlyfluctuation in employment likely to occur will be that due to therise and fall in work requirements. The provision.ofthe Public Service Act respecting returned soldiers are being and will continue tobe strictly, applied.

On the 1st December, Senator Cooper asked the Minister representing the PostmasterGeneral the following questions. upon notice : -

  1. Is ita fact that the Australian Broadcasting Commission has invested a sum of £251,748 10s. 6d. from profits made by the Commission ?
  2. What is the cost of a 12-minute telephone call between Rockhampton andLongreach for private purposes?
  3. What would be the cost that the Broadcasting Commission would have to pay to the Postmaster-General’s Department for the use of a ground line relayinga 12-minute newsservice daily?
  4. Would the cost be at a less ratio if three lots of 12-minute news services were given daily ?
  5. Will the Postmaster-General allow the National Broadcasting news service to be pinked up by 4LG Longreach and retransmitted to give service to an area that is now poorly served?’

The Postmaster-General has supplied the following answers : -

  1. At the end of June, the total sum invested by the Commission was£ 249,700 which, together with accrued interest amounting to £2,04810s.6d., brings the amount invested at that date to£ 25 1, 748 10s.6d. This represents accumulated surpluses since 1933. Themoney was tobe utilized in the erection of studio’s andadministrative office, hut because of the war the money will be invested in Commonwealth Loans. 2.£11s. between 9 a.m. and 6 p.m.; l6s. between6 p.m. and 9 p.m. and between 7 a.m. and9 a.m., and 10s8d. between9 p.m. and 7 a.m.
  2. £1 16s. 8d. between 9 a.m. and 6 p.m.; £111s.8d. between 6 p.m. and9 p.m. and between 7 a.m. and 9 a.m.; and £16s 4d. between 0 p.m. and 7 a.m. The charges specified include the time occupied in preparing the trunk line for broadcast transmission purposes, and the use of special splitting equipmentatRockhampton.
  3. No. .
  4. The present conditions regarding the broadcasting of news, wore determined ata conference convened by the Minister forInformation at which the press and the broadcasting Interests, both national andcommer- cial, were represented. Under the arrangements inforce, all broadcasting stations are permitted to re-broadcast British Broadcasting Corporation news up to eight times daily, making their own arrangements for the reception of the news from the British Broadcasting Corporation station. Station 4LG may avail itself of the facility in the same way as many other stations are doing. In the circumstances it is regretted that the request of the honorable senator cannot be granted.

Question resolved in the affirmative.

page 2190

PAPERS

The following papers were presented : -

Canned Fruits Export Control Act - Thirteenth Annual Report of the Australian Canned Fruits Board, for year 1938-39, together with Statement by the Minister for Commerce regarding the operation of the Act.

National Security Act - National Security (Fair Bents) Regulations - Rules -Fair Rents Boards - Victoria, Queensland, and Tasmania.

Northern Australia Survey Act - Report of the Committee appointed to direct and control the Aerial, Geological and Geophysical Survey of Northern Australia, for the period ended 30th June, 1939.

Customs Act - Regulations amended, Ac. - Statutory Rules 1939, No. 161- No. 163.

New Guinea Act - Ordinances of 1939 -

No. 25 - Land (No. 2).

No. 26 - Lands . Registration.

No. 27 - Native Labour.

Audit Act - Finance - Treasurer’s Statement Of Receipts and Expenditure for the year ended 30th June, 1939, accompanied by the Report of the Auditor-General.

Senate adjourned at 10.25 p.m.

Cite as: Australia, Senate, Debates, 6 December 1939, viewed 22 October 2017, <http://historichansard.net/senate/1939/19391206_senate_15_162/>.