10th Parliament · 1st Session
Mr.speaker (Hon. Sir Littleton Groom) took the chair at 11 a.m., and read prayers.
– Has the Minister for Trade and Customs any information to the effect that the agricultural implements now imported into the country from Canada and the United States of America are manufactured from cheap continental material, which is admitted into those countries free of duty if intended to be used in manufactures for export?
– I have no information on thesubject, but I shall have inquiries made.
– As there are in the Victorian criminal code ten offences for which the death penalty may be imposed, and the English code has not since 1837 included more than four capital offences, will the Attorney-General consider the advisability of introducing a bill to bring the Crimes Act more into unison with present-day civilization ?
– The Commonwealth Parliament has no power to amend the Victorian criminal code, and any attempt by it to exercise supervision over the legislation of a State would be vigorously resented bythat State. The Crimes Act, which is a Commonwealth Statute, contains no provision for the imposition of the death penalty.
Mr. PATERSON, as Chairman, presented the report of the Public Accounts Committee upon “ expenditure on oil exploration, development, and refining in the Commonwealth and Papua, Part 3, and conclusion - Commonwealth Oil Refineries Limited.”
Ordered to be printed.
– In reply to questions asked by me yesterday, the Minister representing the Minister for Home and Territories admitted that a large quantity of imported material was being used in the construction, furnishing, and equipment of Parliament House, Canberra, and other Government buildings. Will the Minister, at the earliest possible opportunity, present a return stating the amounts of the various successful tenders for foreign goods, and the reasons for the acceptance of them ? Will the Minister state also why the Federal Capital Commission has been permitted to depart from the Government’s declared policy of preference to Australian productions in the construction of the Federal Capital?
– The Government has not permitted a departure from its policy. The information in regard to tenders is published in the Government Gazette, but if the honorable member will give notice of his question, I shall endeavour to obtain an answer.
– Has the Government given any instructions to the Federal Capital Commission regarding the use of Australian materials at Canberra, or is the Commission acting on its own initiative ?
– The Commission is governed by the act underwhich it was constituted, but its general policy, like that of all government departments, is to give preference to Australian products.
– In view of the strong feeling in this House-
– In asking a question, the honorable member must not argue.
– Will you, Mr. Speaker, direct that only Australian spirits and wines be served in the parliamentary refreshment rooms?
– That matter is not within my jurisdiction. The refreshment rooms are controlled by the House Committee, and if the honorable member will send a communication to the secretary, I am sure it will receive consideration.
The following paper was presented: -
War Service Homes Act - Report of the War Service Homes Commission, together with Statements and Balance Sheets, 1st July, 1924, to 30th June, 1925 (in substitution for theReport tabled on the 26th August, 1925).
Ordered to be printed.
– I ask thePrime Minister whether the Government intends to introduce any new legislation prior to the Easter adjournment?
– The Government intends to introduce one new measure.
Complaint by Invalided Soldiers.
– I have received from the Returned Sailors and Soldiers’ Association at Table Cape, a letter in which grave charges are made against Dr. McKnight on account of his treatment of invalided soldiers when they are undergoing examination. Will the Minister for Repatriation, in fairness to the doctor and the soldiers, make a thorough investigation into these charges?
– Two days ago this matter was brought under my notice by a Tasmanian colleague of the honorable member, and inquiries are now being made into them.
– Will the Postmaster-General have inquiries made as to the volume of business at Hurlston Park allowance post office, with a view to giving the office official status?
– A question relating to allowance post offices appears on the notice-paper, and my answer to it will apply to the honorable member’s question
– Owing to a dispensation of Providence, the Tasmanian shipping service has not been interrupted for some time, but, in the event of trouble developing to-day, as is threatened, will thePrime Minister arrange for the immediate charter of vessels for the maintenance of a service between Tasmania and the mainland ?
– The Government has made it perfectly clear that it regards the maintenance of communication be tween Tasmania and the mainland as vital, and, if a crisis develops, will take whatever action may be necessary to ensure the continuance of the service.
Transport Branch: Motor Drivers - Post Office Site, Punchbowl - Allowance Postmasters
asked the Prime Minister, upon notice -
– The information desired by the honorable member is being obtained from the Public Service Inspectors in the various States, and he will be more fully advised as early as possible.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
– The requests which have been made for an increase in the guaranteed prices for raw cotton produced during the 1925-26 season, and a communication from the Queensland Government in regard thereto, are receiving consideration. A statement on the subject will be made as soon asa decision thereon has been reached.
Duties : Unemployment
asked the Minister for Trade and Customs, upon notice -
Has the introduction of duties on cotton tweeds caused unemployment in the clothing factories; if so, will he urge the manufacturers of cotton tweed in Australia to hasten on the deliveries of orders placed with them?
– The information is being obtained.
asked the Minister for
Works and Railways, upon notice -
– The information is being obtained.
Duty on Cigars.
asked the Minister for Trade and Customs, upon notice -
Has the Tariff Board reported yet on cigars, and, if so, will he make the report available?
– The Tariff Board has reported on cigars, but the Government intends at an early date to have a thorough investigation made into the tobacco industry, in the interests of the growers as well as the manufacturers. Under these circumstances, no action has been taken upon the report on cigars, and it is not advisable that the report be circulated at present, as it deals with one aspect only of the general question involved.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow : - 1. (a) £1,717; (b) £24,121; (c) £38,554.
– Yesterday the honorable member for Reid (Mr. Coleman) asked the following questions: -
I am now in a position to give the following replies: -
Service Regulations respecting transfer from the Fourth to the Third Division.
Motion (by Mr. Bruce) agreed to -
That the following paper, laid on the table of the House on the 22nd inst., be printed -
Commonwealth Institute of Science and Industry - Recommendations by Sir Frank Heath for theReconstitution of the Institute.
Consideration resumed from 24th March (vide page 1999).
.- Last night there was a very sudden development respecting this item, and I now ask the Minister to reconsider the position. I am satisfied that his decision to decrease the British preferential duty by 5 per cent. was hurriedly given, and that if all the evidence procurable were placed before him for reconsideration, he would stand by the proposed tariff. The duty on this itemwas no doubt carefully considered. Only one thing is wrong with it - it is too low. It should have been 45 per cent. instead of 35 per cent. However, the Tariff Board and the Ministry, after due consideration, decided on a British preferential duty of 35 per cent. I believe that after reconsidering the whole of the facts, the Minister will alter his decision. I shall give him a few reasons for postponing the item. Honorable members on the other side, particularly those representing country districts, have said that the present high tariff has increased the cost of road making. “We are now dealing with road making and stone crushing machines, the duty on which is proposed to be reduced by 5 per cent. Some honorable members say that that would be a small reduction, but I would point out that it would really be a reduction of two-thirds in the proposed tariff, which is 7½ per cent. This reduction is viewed with alarm by those connected with the industry. Soon after the tabling of the tariff schedule in September last there was a wonderful development of the industry. The manufacturers became busy, installed new plant, and made additions to their workshops. One firm in my district engaged 70 extra men. I want to impress upon those honorable . members who spoke about the high cost of road making, that this tariff, instead of increasing the cost of machinery, has actually reduced it. I can give concrete examples in support of that statement. I have with me a photograph of a road roller, which is of the latest type, and is in use at Canberra. Prior to the new tariff, the price of that roller was £1,490, and since the tariff the firm manufacturing this type of road roller, is selling it at £1,390. That is a complete answer to those who say that the present tariff has increased the cost of road making. The machinery used for city roads is quite four times as much as that used for country roads. This item refers only to stone crushing machines, road making machines, bitumen spraying machines, and bitumen boilers, and these are little used on country roads. I have here a photograph of a stone crusher. I heard some one say yesterday that no stone crushers were made in Australia larger than 30 feet by 12 feet. This photograph shows an Australian stone crusher 42 feet by 30 feet.
– That is the only one that has been manufacturered in Australia.
– If the duty is not altered this firm is prepared to make that type of stone crusher at a reduced price. These are statements of fact that can be checked. Stone crushers and road rollers are to-day selling at a lower price than before the tariff was imposed. The firms manufacturing them believed that the tariff had come to stay. The Government wentto the country partly on this tariff, and came back with a great majority. Those firms have gone to considerable expense to install new plant and have engaged extra men. I was assured this morning by the responsible representatives of leading firms that the proposed 5 per cent. reduction of duty, if insisted upon, will, so far as they are concerned, end the manufacture of road making and stone crushing machines. If this happens the prices of the imported machines will be considerably increased. The output of Australian stone crushers has increased by 25 per cent. during the last three months.
– Stone crushers have been made in Australia for years.
– That is correct, but competition became so keen that in a number of cases the firms practically went out of business. Their only customers were the municipalities which had sufficient Australian patriotism to pay a high price for their requirements, in order to encourage the Australian industry. The margin of wages that I quoted last night more than justifies a 45 per cent. increase in the duty. Yet the tariff schedule imposes only a 35 per cent. increase. The present proposal to decrease that duty by 5 per cent. would, if given effect, strike a serious blow at an industry that has recently expanded. What a position I and other honorable members will have to face when we return to our electorates and find that an army of men has, at the beginning of winter, been thrown out of work, because of a reduction in the duty on machines which they were previously manufacturing. I shall not at this stage pursue this subject any further. I intend, if necessary, to fight this issue, and I feel sure that other honorable members will support me. I assure the Minister that I am making a fair and reasonable request. I ask him to postpone, not the whole item, but that portion of it dealing with road making and stone crushing machines, so that he may gather the facts and reconsider the matter in the interests of a great Australian industry.
– Honorable members opposite have charged the Minister with backing down in connexion with this tariff item, but I contend that if he acts upon the advice just tendered to him by the honorable member for Yarra (Mr. Scullin), his action will indeed be a backing down without parallel. I am quite certain that the Minister will honour the promise that he made last night to reduce the British preferential duty to 30 per cent. Honorable members opposite have forgotten that this type of machinery has not only a fiscal protection, but also a large natural protection. Australian road making machinery, in common with agricultural implements, carries a heavy natural protection in the shape of ocean freights, marine insurance, packing charges, and things of that character. It is more than probable that those charges would mean a protection of at least 30 per cent., besides the suggested British preference of 30 per cent. In addition, most municipalities and semi-governmental bodies make a practice of giving to the Australian manufacturer a certain amount of preference over and above that granted fiscally, and therefore his advantage over his British competititors would probably be 70 per cent. If the interests of the makers of these particular machines are put before the interests of those who require roads, good roads, and more roads, it seems to me that the minor interests will surely obscure the major interests.
– I propose on behalf of the Government to accede to the request of the honorable member for Yarra (Mr. Scullin) to postpone this item, subject, of course, to the will of the committee. I desire time to thoroughly look into this matter and to consult the officials of the department, who know very much more about it than I do. I hope to-morrow to be able to put before the committee up-to-date information - what I now have dates back to last September - which will enable them to judge this matter on its merits. I move -
That sub-item d be postponed.
– I hope that the committee will not postpone this item. Because of the Minister’s definite promise last night, I withdrew my amendment. It certainly seems strange that other influences should have caused the Minister to desire a reconsideration of that promise. I do not know why there should be any delay in connexion with the tariff, as it would appear that the Minister has only to bring in a schedule for it to be passed, practically, in globo, because of certain promises which are said to have been made. But I take it, that when a tariff schedule is placed upon the table it is here for consideration; yet the honorable member for Yarra (Mr. Scullin) would have us believe that the mere tabling of this schedule was equivalent to making a definite promise to people, who, I consider, are already making excess profits. He said also that the election was fought on the fiscal issue. It was not. The election result had nothing to do with the tariff, which was kept in the background. I do not agree with the estimate’ made by the honorable member for Gippsland (Mr. Paterson) as to the natural protection afforded to items of this description. Road-making machinery is heavy, and, in my opinion, the natural protection is nearer to 50 per cent. than the 30 per cent. mentioned by the honorable member.
– I rise to a point of order, and ask whether the honorable member is in order in discussing this item, seeing that the question before the Chair is a motion for its postponement.
– I take it that the honorable member for Swan (Mr. Gregory) is endeavouring to show that there are sufficient facts before the committee to warrant an immediate decision.
Mr.Watt. - He is failing in his attempt.
– It would be difficult to bring forward any reason for a reduction of the tariff which would be acceptable to the right honorable member for Balaclava (Mr. “Watt).
– The question under consideration is the postponement of this item.
– I am aware of that; but, in the circumstances, I consider that I am justified in discussing the general question.
– The honorable member is only justified in giving reasons why the item should not be postponed.
– In that case, it is useless for me to proceed. I desired to show that the consideration of the item should be proceeded with.
.- I do not desire unnecessarily to interpose, but I consider this a suitable opportunity to ask the Minister whether he intends at some stage during the consideration of Division VI. - either now, or if the item be postponed, later - to give the committee any assurance regarding the base metal trade, which is so closely allied with the engineering items which we are considering. I understand that inquiries are now being conducted by the Tariff Board into the representations made by the steel-masters generally; but, that the board’s report has not yet been finalized and placed before the Minister. I think that it is pertinent and proper to ask the Minister - whether, if that report is not available before this schedule disappears - which appears likely - it is his intention to deal with the matter at the first available opportunity -after the ‘Tariff Board has submitted its report. It would be interesting to have the Minister’s pronouncement on the subject.
– It is a matter of common knowledge that the Newcastle industries are being thoroughly investigated by the Tariff Board, but it will be some time before I receive the board’s report. The usual procedure in such cases is for the board’s report to be examined by departmental officers and by the Minister, after which certain conclusions are arrived at. Those conclusions are then submitted to Cabinet for consideration. Honorable members will understand that until Cabinet has arrived at a decision I am unable to make any pronouncement. When introducing the tariff I said that, irrespective of the question of working hours, the proved vital requirements of the Newcastle industries would not be neglected by the Government.
Motion agreed to; sub-item d postponed.
– I have not yet placed before the committee the reasons which have actuated the Government in revising the whole of the machinery duties. As the two sub-items, 176e and 176f, comprise a considerable quantity of the machinery used in Australia, I purpose setting forth the principles which have guided the Government in arriving at the decisions which it has made. The committee is entitled to know the reason for increasing the general duty on machinery from 27 per cent, to 30 per cent., 35 per cent., and, in some instances, to 40 per cent, or 45 per cent. The report of the Tariff Board- one of the best reports which the board has yet presented - has been before honorable members for some time; I believe that it has been printed. In its original investigations, the board had to start at a period which synchronized with the duty of 27-J per i cent. It was found that at that time there was not a great deal of difference between Great Britain and Australia so far as the cost of raw material and the wages paid to workmen were concerned. The position has, however, altered in the meantime. Since June, 1921, the wages of skilled men in the engineering industry in the United Kingdom have fallen considerably. They were then 88s. per week, as against 120s. per week in Australia. The cost of raw material has also decreased considerably during the same period, and to-day there is a very great discrepancy between the cost of raw material and wages in the United Kingdom and in Australia, notwithstanding that wages in Australia have remained almost stationary, and that the cost of material has been reduced since 1921. That was the first guiding principle upon which the Government acted in connexion with these duties.
The Government was also influenced by the fact that before these duties were introduced many of our engineering shops were little better than repair shops; if conditions had not improved many of them would have had to close up. I was informed only a fortnight ago that, but for these duties, the firm of Thompson and Company, of Castlemaine, would have closed its works. Since the tariff schedule was tabled, however, there has been great activity in our local engineering shops; many men who had been thrown out of employment have been reengaged, and men who were working short time are now on full time. The Government also had regard to the further fact that a well-paid skilled artisan is probably one of our best citizens.
Mr.Fenton. - And one of the greatest factors in our defence policy.
– That is so. Another principle which actuated the Tariff Board and the Government in graduating the scale of duties was the proportion of labour employed in the manufacture of various groups of machines. It is obvious that departmental administration would be impossible if every individual machine had to be itemized. Consequently, practical administration necessitates the grouping of machinery. So far as has been possible, we have grouped the machines according to the amount of labour necessary in their production. Altogether there are ten or twelve groups of machines. In the lowest group the ratio of labour to raw material was as 1½ to 1. In the other groups the ratio rose by various intermediate stages from 1¾ to 1 to a ratio of 6 to 1. The last group comprised machines in which the proportion of labour to the material used was varied up as much as 10 to 1. No rule-of-thumb methods lie behind the Government’s proposals. Although I am not in a position to submit amended proposals in connexion with item 174, I can tell the committee without equivocation that, irrespective of any administrative difficulties which might arise, it is the desire of the Government to make that item as wide as possible, in order to admit free any machinery necessary for the development of our industries, and for supplying public utilities where such machines are not commercially made in Australia. In the Customs Guide to-day, 22 pages contain the names of machines admitted free of duty, and since the guide was published in 1924, no fewer than 112 machines have been added. I have given these facts to the committee to show that it is the desire of the Government to encourage and extend the manufacture of mining machinery in Australia. But outside the limits of that principle, it is our policy to encourage the use of machines manufactured in Great Britain by admitting them free of duty. The Government do not intend to have these items nibbled at in any way, and will adhere to the duties proposed in the subitems now before the committee. In connexion with the articles mentioned in these sub-items, there is considerable competition from Great Britain, and, as I said last night, the Government will not, unless compelled by force majeure, accept a reduction of the duties on foreign machines.
.- When one considers the unsatisfactory condition in which the Australian mining industry is at present - many companies having recently become insolvent, and others being on the verge of insolvency - one feels that the imposition of heavy duties on mining machinery will be responsible for a still further decline. I do not intend to place any obstacles in the way of encouraging local industries, which are manufacturing our requirements at a reasonable rate; but it would be infinitely better to pay a bounty on machines manufactured in Australia for use in mining, instead of imposing heavy duties. Mining is a national industry, and one which benefits the whole Commonwealth. As one who has had practical experience in mining, and as a shareholder in mining companies, I am in a position to speak with some authority concerning the disabilities of the industry. If a bounty were paid to those manufacturing mining machinery, the burden would fall on the whole community instead of on a few struggling companies or individuals. The value of the mineral output of the Commonwealth has decreased from £8,000,000 to about £2,500,000 in the course of a few years, and the decline has been so rapid that unless conditions improve, metalliferous mining will have to be discontinued.
The cost of cartage on mining machinery from the nearest railway siding to a mine is, in some cases, almost equivalent to the cost of the plant being transported. Mining operations at Wood’s Point have contributed £10,000,000 worth of gold, and it can safely be assumed that there are millions of pounds worth of this metal, in that district, still to be recovered. The Morning Star mine has also produced highly satisfactory returns, and has been of benefit, not only to the State, but to the whole Commonwealth. One has only to consider the benefit which the Broken Hill mines have been to Australia, to realize the importance of mining to a country. The House of Bullion Mine, 30 miles from Barrow Creek, is likely to develop into another Broken Hill. If a bounty were paid, the machinery manufacturing industry would receive protection, and the burden would be borne by the whole community.
.- I am surprised at the statements made by the honorable member for Indi (Mr. Cook). I, too, am anxious to encourage metalliferous mining in Australia, of which I have had some experience, to my sorrow. The honorable member for Indi said that in some cases the cost oi transporting mining machinery from the railway siding to a mine was equivalent to the cost of the machinery, but he should remember that it would cost as much to transport an imported boiler as a locally-made boiler. Does the honorable member for Indi think that an imported boiler could be hauled by a team of bullocks at a quicker rate and at less cost than an Australian boiler could be hauled? In travelling to Great Britain. I had the pleasure of the company of a gentleman from South Africa, who discussed with me the subject of English mining machinery. He informed me that once when he wished to place an order in Great Britain for £50,000 worth of mining machinery, which was to be made to suit the conditions prevailing in South Africa, the British manufacturers told him that they made the machinery of a certain type, and that he could either take what they had to offer or leave it. The consequence was that the order was placed in America, where the machinery was manufactured to suit the requirements of the mine in which it was to be used. Machinery manufactured in Aus tralia would be made to suit Australian conditions. Tenders were once called in New South Wales for the supply of two boilers, and although the price quoted by an Australian manufacturer was £800 less than that of an overseas manufacturer, the order was placed abroad.
– “What was the reason?
– The purchasers could not’ give any reason. Honorable members who are opposing these duties should remember that the cost of mining machinery purchased during one year is not charged to that year’s operations, but is spread over the life of the machinery, which may be 30 or 40 years.
– It would be on the scrap-heap in that time.
– Some honorable members who1 are opposing these duties will be also on the political scrap-heap before long. I trust the Government will realize that the requirements of mining companies can be more readily met by having the machinery they require manufactured in this country. The Australian makers will always produce the exact type of machine needed. Replacements are also more readily available.
– What about coalcutting machinery?
– The number of these machines required in Australia is so small that they are not likely to be manufactured here for many years. I have no objection to the attitude the Government have adopted in that regard. From the utterances of honorable members opposite one would assume that heavy machinery is not used in coal mining. That is not so. Where one engine may be employed in a metalliferous mine, perhaps twenty may be used in a coal mine.
– I am greatly surprised at the arguments that the Minister for Trade and Customs, and other honorable members have used in support of these high duties. They have said that, although the countries abroad are returning to pre-war conditions, and wages are falling to the 1914 figures, it is not so in Australia, for here wages are increasing, and the purchasing power of the people is less than it ever was. That great protectionist newspaper, the Age, has also been lamenting this. We can never get back to pre-war conditions while we persist in placing high import duties on so many things that we need. Can any honorable member say that the Australian mining industry is nourishing? The Government showed, in a piffling way, earlier this year, that it desired to help the industry, for it set apart £40,000 to be spent on prospecting; but it is absurd to do that, and to take the money back again in high duties on necessary mining machinery. Numerous low-grade mining shows in Australia have been obliged to cease operations because of the high price of machinery and consequential high wages and high cost of living. If we agree to this item we shall hammer another nail into the coffin of the industry. It may be true that the imposition of these duties causes manufacturing concerns to spring up in the capital cities of the Commonwealth; but it retards development in our great primary producing industries. The honorable member for Newcastle (Mr. Watkins) says that these duties should.be spread over thu whole life of the machinery, which he set down at 50 years. But it must be remembered that the companies that require the machinery are obliged to pay for it as soon as they get it. In the gold-mining industry this makes the cost per ounce of gold produced so high that there is no profit left for the producers. If we agree to this duty we shall, undoubtedly, add to the number of unemployed in Australia, and so, automatically, factories . will have to close down. Let us give more consideration to the development of our great natural resources, which bring wealth to the country and make it financially stable, instead of worrying about exotic manufacturing concerns. I trust that honorable members will take a broad Australian outlook. If the engineering companies of Australia are not able to render reasonable service to the country, let us permit our people to get elsewhere the machinery they need.
.- I regret that the Minister for Trade and Customs has recommended this increased duty on mining machinery. For several years the mining companies have been making representations to the Government for a reduction in the tariff.
– They have asked for bread and have been given a stone.
– The Tariff Board visited Western Australia in October, 1922, and again in November, 1924, and the evidence that it took all over the country made a big impression on it. It realized that Western Australian industries were suffering severely. A section of the annual report that it submitted to the Minister for Trade and Customs on 27th June, 1924, was a general report on the effect of the tariff on Western Australia, from which I take the following : -
Whatever additional cost the policy of protection may add to the price of goods and material imported by the Australian consumer, the citizens of the eastern States gain as a compensating advantage the presence of a large production and manufacture.
I do not dispute that. The report proceeds -
The significance of this can be appreciated when it is learned that, in the eastern States, approximately 50 per cent, of the local primary products is consumed locally, whereas, in Western Australia, only 20 per cent, at best of some of their local primary products is consumed locally, and that in a number of cases this percentage falls to 10 per cent., and even lower.
That means that Western Australia has to export to the world’s markets 80 per cent, of portion of her produce. The mining industry, in which I am particularly interested at the moment, is in a very bad way there.
– Because of the swindling at Kalgoorlie in the past.
– Swindling occurred at Ballarat and elsewhere as well as at Kalgoorlie. Professor David, Australia’s greatest geologist, has pointed out, in a report published in Great Britain, that Western Australia has 1,000 miles of auriferous country that has been practically untouched, but that the prospect of finding gold in it is difficult, because of its geological formation. The absence of natural streams in “Western Australia makes it hard to ascertain, with any degree of certainty, where alluvial gold deposits may be found. There is no indication of the best places to prospect, except in occasional outcrops; and the overburden exists on many hundred square miles. But on the other hand a rich find may be discovered there at any time. In the meantime our gold production is falling. The rich mines that were discovered years ago have largely been worked out, and there is little encouragement given to prospectors to search for new lodes. The heavy increase in costs since pre-war days is a bar to development. On a list that I have, seventeen articles are shown to have increased in price by 217 per cent. This has naturally resulted in increases in all working costs. Seeing that the Tariff Board had shown by its report that it was sympathetic to Western Australia, I was astonished to find that it had recommended an increase of duty on the item under notice. Last night the Minister practically agreed to reduce the British preferential duty on road making machinery by 5 per cent; but he apparently intends to stand firm and refuse to help our decadent mining industry that is struggling for its life. In fact he is hindering it, by increasingthe duty on machinery that is required for it. I am as good an Australian as the next man; but I must say that the imposition of these heavy duties on supplies that are necessary for Western Australia is severely testing the federal spirit of our people. Years ago they were as strong for federation as the people in any State; but their loyalty has been strained almost to breaking point. I am astonished beyond measure at the attitude adopted by the honorable member for Newcastle. In the past Western Australian representatives in this Parliament have helped to protect the Newcastle steel works against unfair foreign competition, but now the honorable member is not willing to assist industries in Western Australia. Specialized machinery that is protected by patents and cannot be manufactured in Australia under any circumstances is required for gold mining work.
– What kind of specialized machinery?
– I cannot particularize at the moment. Seventy-five per cent. of the machinery used on the Western Australian gold-fields is Australian made. The biggest winding engines on the Boulder, and the eastern gold-fields, were made at Castlemaine.
– Under nearly a freetrade tariff.
– But there is quite a lot of highly specialized technical machinery that we must have which cannot be made in Australia.
– Is it not a fact that machinery, not manufactured in Australia, but required for the gold-fields, is permitted to come in free?
– No. Before any is allowed to come in free, the big engineering firms, such as Thompson and Company, of Castlemaine, have to be asked whether they can make it here. With characteristic greed they say “ Yes.” They are ready to grab all the money they can. They are prepared to do anything at a price.
– Is it the honorable member’s idea that we should have cheap mining machinery imported from overseas ?
– My desire is to keep thousands of men still employed on the mining fields of Western Australia, in districts that will not grow wheat, and that are only suitable for mining. Desert as it is, these men are prepared to open it up if given an opportunity. If we are against centralization, why tell these men, in effect, to sell out their homes for what they can get for them, and swell the populations of Melbourne, Sydney, or Newcastle ? The Tariff Board is told that special mining machinery can be made in Australia on a commercial basis. I want to know exactly what is a commercial basis. A protective tariff on machinery that is protected by letters patent throughout the world will not force the mining people of Western Australia to purchase locally-made machinery if it does not suit their purposes. The advocates of this high duty are blind to the logic of facts, and their view is circumscribed by a regard for small, thicklypopulated metropolitan electorates. If members of this chamber who represent city electorates were made to toil in the back country, they would soon realize that States like Western Australia, which represents a third of the area of Australia, and has only one-sixteenth of its population, are in crying need of development. Mining people ought to know what their requirements are. I am afraid that the Tariff Board and the Minister are too closely in touch with the manufacturing interests of the eastern States to be able to appreciate the claims of the hinterland of Australia.
– The argument that the mining industry is retarded by the high cost of machinery is fallacious. Sufficient machinery is now lying idle in the several States to work all the “ shows “ likely to be discovered in the next twenty years, and it can be purchased for about a third of the lowest cost at which it can be manufactured in any part of the world. Transportation is the stumbling block. This machinery may easily be removed to the sea-board, or to a rail head, but the trouble begins when it has to be transported for 500 or 600 miles inland. Despite the inflation of the value of other commodities, the gold standard has been maintained. It is now found that gold cannot be profitably produced under present-day conditions, because fields that were once profitable cannot now be economically worked.What is required, therefore, is a bonus to assist mining development.
– This industry is in a similar position to that of many primary industries. It cannot pass on the increased costs.
– That is so. I know of no mining machinery that cannot be satisfactorily manufactured in Australia. The honorable member for Kalgoorlie (Mr. A. Green) stated that some mining machinery had a life of 50 years. I may say that I have dismantled winding engines, after 30 or 40 years’ use, and they still had another 50 years’ life. They last very much longer than internal combustion engines. In such mining districts as Ballarat, Bendigo, Gympie, Charters Towers, and also in Western Australia, machinery can be purchased for less than the value of the material in it.
– But it would cost more than it is worth to transport it to the fields where it is required.
– That is the point. It is necessary, therefore, to provide adequate transport facilities for the mineral areas.
– Lower freights?
– Yes, coupled with sympathetic assistance from the Government. Discarded mining machinery can be purchased for a song almost anywhere in Australia.
– It is not worth a jot.
– Some of it is quite serviceable. Twelve hundredweight stamps can be purchased for the value of the material in them.
– The honorable member has never used anything but a dryblower.
– I admit that I have done a lot of dry-blowing, and I should not be averse from doing it again; but I have had more practical experience of mining than the honorable member has. Winding engines, boilers, steel ropes, cages, trucks, and rock drills can be manufactured in Australia. No one can say that there are patent rights over cyanide plants. We should make it easier to transport mining machinery to the mineral areas and assist the industry by means of a subsidy.
.- The absurd statement has been made that the continuance of the mining industry of Western Australia depends upon this tariff. If a mine cannot stand a duty such as is proposed, it cannot be of much value. It is futile to advocate that the tariff be altered in order to breathe life into dead industries. The known fields in Victoria have been abandoned, and the day when Kalgoorlie and Boulder will be idle is fast approaching.
– The honorable member would cut the throat of the industry to save its life.
– A doctor cannot do much for a patient who has died and is on his way to the cemetery. A tear may be dropped and a wreath placed on his grave, but that is all. Gold mining in Australia is dead and buried.
– It has gone in Victoria.
– I deny that statement.
– The honorable member for Maribyrnong (Mr. Fenton) has great faith that new fields will be discovered in his State. That may be so. I am speaking of mines that have been exploited and exhausted, and are dead and gone. Any reduction of this tariff will not lead to the discovery of new fields, or breathe life into exhausted mines. Broken Hill uses probably twenty times as much machinery as the whole of the mining industry in Western Australia, and produces many times more wealth than any other mining district. From the time the ore is mined, until it is brought to the surface, Austraiian machinery is used, except, perhaps, in the case of the rock drills, which are imported. The Australian machinery is competing successfully with the imported machinery. In many cases it is superseding the imported machinery, not because of the tariff, but because of its greater efficiency. Although the job at Broken Hill is being done with Australian machinery, no request for the reduction of the tariff has come from there. It is only from those mines which the optimists are trying to revivify by a gold bonus that there is a demand for the reduction of the tariff.
– Does the Broken Hill Company approve of the increase in the duty on mining machinery ?
– Like all other capitalistic institutions, the Broken Hill Company desires to obtain everything it uses in its business, including machinery and labour, as cheaply as possible. In that respect it resembles the honorable member and his freetrade friends, who cry, when protection will pay them, “ For God’s sake give us protection !” but when protection will not pay them, “ For God’s sake give ug freetrade!” Why does not my honorable friend purchase everything he requires from the really cheap labour countries? Why have a British preferential tariff? Why does he not suggest that we should ask. Japan to supply all our requirements ? If cheapness is the test, and patriotism is to play no part in these considerations, let those who advocate freetrade say so.
– The result of the honorable member’s policy is that a duty is placed by Japan on Australian products.
– If Australian industries were dependent upon the honorable member for Perth (Mr. Mann) and his colleagues, they would decay; instead of being further developed, they would deteriorate. The freetraders are a mere handful in the community. Probably all of them are in this chamber, for I cannot conceive of there being any outside.
– The Tariff Board does not agree with the honorable member.
– That attitude is reciprocated, for I do not agree with the Tariff Board, but I agree with it much more than does the honorable member. I agree with some of the recommendations of the Tariff Board, but the honor able member agrees with none of them; that is the difference between us. I hop( that the item will not be altered. The machinery is being made in this country, and to reduce the tariff will be to injure an important Australian secondary industry.
– In order to place something tangible before the committee, and to avoid unnecessarily prolonging the debate, I move -
That after sub-item e, item 176, the following words be added : - “ and on and after 26th March, 1926, ad. val., 27$ per cent. British, 50 per cent, intermediate, 55 per cent, general.”
The effect of that amendment will be to restore the old British preferential rate and to meet the views of the Minister on the intermediate and general tariff. The honorable member for Darling (Mr. Blakeley) has assured us that the gold-mining industry in Australia is dead and gone, although Professor David, the leading geologist in Australia, says that in Western Australia there are greater opportunities than ever for the opening up of vast gold-fields. There are larger bodies of low-grade ore in sight in Western Australia than have ever been in sight since that State has been a goldproducing country. The ore produces from 10 to 12 dwt. to the ton, and is just below the margin that shows a profit. It is impossible, under present conditions, to mine that ore profitably. I insist that I am as good a patriot as any other honorable member, and I wish to see the 5,000 men at present employed in the industry in Western Australia retained there, so that they will not have to pack up their few belongings and set ou.t for “fresh woods and pastures new.” The highest objective any honorable member can have is to open up the back country and counteract the tendency to centralization. It is unwise, particularly for a protectionist, to speak of any industry as decaying. Although the honorable member for Darling says that he is anxious to establish industries, he decries the gold-mining industry, and says that it is “ dead and gone.” In Western Australia wo are having the fight of our lives to keep the industry going. The men working in it have accepted low wages in the Arbitration Court. The workers in Broken Hill receive several shillings a day more than gold-miners doing similar work receive in Western Australia. I have been down the mines in Broken Hill. The main drive of the North Broken Hill mine is almost as large as a corridor of Parliament House. That mine is making £800,000 profit, or thereabouts, per annum. The representative in this chamber of such a district can alford to say that it does not matter very much whether mining companies have to pay more for their machinery. Several of the mines in Western Australia have installed many thousands of .pounds’ worth of machinery and equipment, and there is much mining machinery that needs ven ewing and bringing up to date. It is essential that new and up-to-date machinery be obtained. There is one way in which the industry can be assisted, and that is by cheapening the methods of production. New machinery will assist towards that end. I can assure the honorable member for Darling that the saving of a few thousand pounds in a mine that is already showing a loss, and is on the verge of closing down, is a vital consideration. Some of the mines on the eastern gold-fields, where there are hundreds of thousands of tons of ore in sight, are losing perhaps £1,000 a year because the ore is not quite of a grade that can be profitably worked in present circumstances. With such mines there comes a time when the shareholders get tired of standing out of their money. They prefer to put their money into mining propositions like those at Broken Hill. I am anxious that the gold-bearing areas in Western Australia, which are the most extensive in the world, should be put to productive use. Large areas of that State are of no use except for mining. The passing of this item will not help the secondary industries in the eastern States, but will close the market in Western Australia to their mining machinery, and a thousand and one other manufactured articles. If my amendment is carried, the foreigner will not be able to export his machinery to this country, but the Australian gold-mining companies will be able to obtain specialized machinery from Great Britain at the old r.ate.
– I repeat, on behalf of the Government, that an amendment of this item cannot be accepted. I remind the honorable member for Kalgoorlie (Mr. A. Green) that the Parliament has passed a bill to provide a subsidy of £450,000 for Western Australia. The Government does not intend that Western Australia shall smash the manufacturing prosperity of the eastern States. I have had considerable experience of mining, and I have discovered that there is in this country an old prejudice regarding duties on mining machinery. In many mines special equipment is required, and this can best be made, and is being made, in Australia.
.- It is said that Nero fiddled while Rome burned, and the saying might be applied to what is occurring here in the consideration of the tariff. Arguments are advanced in support of increased duties with an utter disregard for the great industries that help to make Australia prosperous. Honorable members appear to be willing to agree to everything that is asked by the sneaking bounders we see hanging around this chamber who are seeking special subsidies to put into their own pockets. Those who have invested their capital in our primary industries have employed far more labour, and done far more to build up the industries of the Commonwealth than have the people who are being given dividends under this tariff. In 1901 there were 113,462 miners employed in the various mining industries of Australia. In 1923 there were only 54,759 so employed. Mine after mine has been closed down, and the duties now proposed represent the last straw that breaks the camel’s back. No one .will contend that the imposition of an extra duty on mining machinery will stop mining in Australia, but the continual increase of duties under almost every item in the tariff increases the cos of production, increases wages, and tends to make production impossible. As the honorable member for Kalgoorlie (Mr. A. Green) has pointed out, men employed in the gold -mining industry in Kalgoorlie are to-day making far less than men employed on the tramways in the big cities. Surely it should not be the policy of this country to force men to give up all country industries and come into the big cities. I do not know what will be the future of Australia if our legislation is to continue to be influenced by the contemptible madness that seems to afflict many honorable members, amongst whom I include the Minister for Trade and Customs (Mr. Pratten).
– The Minister is the greatest fiscal madman of them all.
– Under present conditions men hesitate to put money into the mining industry. Those mining for lead need not worry at present, because lead is now bringing enormous prices, and mining for lead is a magnificent proposition. Increases in these duties may be disregarded by those engaged in mining for lead at present. But it is different from mining for gold, copper, or tin. The production of the Golden Horseshoe Mine in Western Australia to-day is, I think, about 40s. per ton. There is talk of its closing down, and it is asking for a subsidy. That mine has at various times given employment to many thousands of people, but the costs of production have now become so high that it is doubtful if it can carry on. If proper consideration were given to the mining industry, that mine might carry on for the next twenty years, producing wealth for Australia. We know that there are rich copper deposits in Queensland, in the Northern Territory, and in Western Australia. How is it that thousands of workmen are not employed in exploiting them, and adding to the wealth of this country? We know that there is great latent wealth throughout the north of Australia, and why are we not developing it? It is because of the high costs of production. What is wrong with Australia ? President Coolidge, in a speech to the Parliament of the United States of America, pointed out that since the war wages in that country had increased by 150 per cent., whilst the cost of living was increased by only 50 per cent. The production per unit of workers per annum increased by 600 per cent, in the United States of America. Here it increased by only 210 per cent. The average wage increased in America by 260 per cent., and here by 167 per cent. Our difficulties in Australia are due not to high wages, but to the restrictions and imposts upon our industries. I read in the newspaper only this morning that men are producing apples which cannot be exported. Our legislation and rotten administration are destroying the prosperity of those who would build up the country. The man who should receive first consideration is the man who is prepared to go into the bush and open up and develop the country. We have a mining industry which should be given every possible assistance. It should not be dragged down by the imposition of these enormous duties on the machinery it requires. The Minister has referred to the special grant to Western Australia, but he has overlooked the fact that the Government is itself responsible for proposing a special grant of £40,000, to be devoted to prospecting for precious metal. Of what use is it to send men out to prospect for precious metal under existing conditions ? They might go to the Northern Territory, if they are prepared to confine themselves to dryblowing and such methods of winning gold, but that is not what is wanted. There is no justification for this extraordinary increase upon the cost of mining machinery in Australia. We have in the past been able to build up big industries here. In the old days, under a tariff that differed little from freetrade, Thompson and Company, of Castlemaine, supplied nearly every item of mining machinery that was required in Australia. Fifteen or sixteen years ago, they supplied the Great Boulder mine with a winding plant that is one of the finest in the world. The company was doing splendidly in those days, but what has it been doing since the tariff which was tabled in 1920?
– When gold mining was started in Western Australia, where did those engaged in it obtain their machinery ?
– They got most of it from Victoria.
– Martin and Company of South Australia supplied a good deal.
– The honorable member is right, and Australian machinery manufacturers did a magnificent business in Western Australia. High duties have been imposed that have had the effect of putting thousands of pounds into the pockets of those interested in Mount Kembla, and in the great Broken Hill Company. There should be an investigation to discover the amount of capital put into that great concern. I hope that it will be prosperous, but I do object that other industries should be destroyed to make profits for it. Honorable members should consider that if the great primary industries are destroyed by the imposition of high duties, the manufacturers whom it is intended to assist will have no market for their products. Destroy the gold and copper mining industries and what will then be the use of a duty on mining machinery ?
– There is no reply to that.
– The honorable member for Yarra (Mr. Scullin) told us last night of an Australian industry in which the number now employed was 1,000 less than in 1921.
– I did not say that that was due to the tariff.
– In 1920 a high tariff was tabled, which was passed in 1921.
– I was not contrasting the period before 1921, when the tariff was imposed, with the period since its imposition. I was showing the effect of reduction in wages abroad. The honorable member tries to make me say that the high tariff was responsible for the reduction in the number of employees in the industry here. I said the opposite.
– The honorable member did not say that the high tariff was responsible; that is my contention. Honorable members should not forget that Mr. Hoskins built up his great industry at Lithgow, and became a very wealthy man, under a very low tariff. He had none of the magnificent opportunities afforded to the Broken Hill Company. He had a very poor plant compared with that which the Broken Hill Company has at Newcastle. His foundry was established in the interior, and its products had to be sent by rail to the seaboard. The Broken Hill Company have ships coming right into their works at Newcastle. The Minister should inform us how these great companies have progressed, what capital was put into them, and what is the value of their assets to-day? It is not a question of dividends declared on watered capital, but the actual capital put into industries that should be taken into consideration. “Will any honorable member opposite contend that the workers are benefited by the imposition of high duties ?
– We have been doing nothing else but proving that for the last throe or four weeks.
– I say that they are not. Although honorable members who think as I do may not be able to do very much good here, I feel sure that the work of members of the Country party and the Town and Country Union is beginning to be felt, not only in the country districts, but in the cities of Australia.
Mr.Scullin. - It is absolutely negligible.
– The honorable member is at liberty to think so. I am not fighting the tariff because I hope to secure any valuable concession here, but because by a continual fight and propaganda work I hope to be able to make the people realize that the imposition of these high duties is doing not’ good, but injury to Australia. I have my own idea of what a tariff should be. I believe that a moderate tariff would be best in the interests of Australia. I have had a long experience in politics, and it has convinced me that once we begin to give special f avours to a particular section the practice develops until there is no one left who does not come to the Government and ask to be relieved of his responsibility for making his industry a profitable concern. It would be a grand thing for the dairy farmer if we did for him what we do for the Broken Hill Company and other organizations, and told him that Parliament would see that his products sold at a profit. It would be equally well for the wheat-grower if we said that after he went to the expense of growing his crop we would see that his industry was successful, and that he should secure from it a certain amount each year. That would be consistent with what is done with many secondary industries to whichwe give special concessions. We destroy one industry in order to give special consideration to another.
Sitting suspended from 1 to 2.30 p.m.
Message recommending appropriation reported.
In committee (Consideration of GovernorGeneral’s Message) :
Motion (by Mr. Bruce) agreed to -
That it is expedient that an appropriation of revenue and moneys be made for the purposes of a bill for an act to approve an agreement between His Majesty’s Government of the Commonwealth of Australia and the Anglo-Persian Oil Company Limited, and for other purposes.
Standing Orders suspended; resolution adopted.
That Mr. Bruce and Dr. Earle Page do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Bruce, and read a first time.
.- I move-
That the bill be now read a second time.
Two matters are covered by the measure, one being dealt with in the agreement contained in the schedule to the bill, and the other in clause 4. The agreement provides that an additional capital of £100,000 shall be found for the Commonwealth Oil Refineries Limited, onehalf by the Commonwealth Government and the other half by the Anglo-Persian Oil’ Company, they being the two shareholders in the company. Clause 4 provides that an amount shall be furnished to the company to enable it to regulate its financesfor the trading period which ended in June, 1925, and for that which will end in June of the present year. It is proposed that 12s. 3d. per ton on the crude oil treated up to the 30th June, 1925 - covering the operations of a period of about fourteen months - shall be found by the Commonwealth Government, and an equal sum by the Anglo-Persian Oil Company. That will amount to a little more than £53,000. In respect to the period ending 30th June next, the Commonwealth Government and the Anglo-Persian Oil Company will each contribute the amount of 7s. 6d.per ton upon the crude oil put through the refineries. Those are the only two matters that we have now to consider.
In May, 1920, the right honorable member for North Sydney (Mr. Hughes), who was at the time Prime Minister of the Commonwealth, negotiated with the Anglo-Persian Oil Company, an agreement that contemplated the incorporation of a company having a capital of £500,000, towards which the Commonwealth should subscribe to the extent of 250,001 shares, and the Anglo-Persian Company to the extent of 250,000, less one share, in order that the Commonwealth Government should hold the majority of the shares in the company. I do not think I need traverse the other provisions of that agreement, because they are well known to honorable members. The intention underlying the formation of the company was that we should have in Australia a refinery capable of treating indigenousoils should they be discovered. In the meantime the Anglo-Persian Oil Company was to supply the Commonwealth Oil Refineries with 200,000 tons of crude oil per annum; and should indigenous oil be discovered, but in a quantity not amounting to 200,000 tons per annum, the difference was to be made up by the company. It was also intended that Australia should make a commencement towards providing its own requirements of petrol and fuel oil, to insure herself against exploitation by outside interests. The right honorable gentleman, in introducing the original bill, outlined the ramifications of the two big oil groups, and showed the manner in which they had parcelled out the world’s supplies, and were exercising the control that they possessed to the greatest advantage to themselves. I desire merely to remind honorable members that the two major oil groups in the world are the Royal Dutch Shell Group and the Standard Oil Group. They, unquestionably, have an almost unchallenged control of the oil trade of the world. The question whether the Anglo-Persian Oil Company is an independent corporation or is in some way allied with one of those groups has been exhaustively discussed in this House. I shall not, therefore, enter into its consideration further than to remind honorable members that the British Government holds a controlling interest in the Anglo-Persian Oil Company, and that there is no doubt that the company constitutes the one great free agency in the oil industry to-day. The position that existed when, in 1914, the British Government took action to acquire a controlling interest in what is now known as the Anglo-Persian Oil Company, and the position which existed in 1920, when the Commonwealth Oil Refineries were established, has in no way improved. In some respects, perhaps, it has been intensified. When the Commonwealth Oil Refineries Corporation was formed in 1920 it had -a capital of £500,000. Doubts were then expressed as to the sufficiency of that amount, and, as a private member, I was one of those who expressed such a doubt. ‘ Subsequent events have shown that it was not sufficient. The amount was absorbed in the construction of the refinery at Laverton, wharfs and tankage at Spotswood, depots and connecting pipe lines, and other ancillaries to the creation of the industry. No sum was left for working capital, to enable the company to be its own distributor. In the event of its inability to become its own distributor, it could appeal only to the other two great oil combines. It was recognized that that was a thoroughly unsatisfactory position, and a measure was introduced into this House to ratify a new agreement that had been entered into between the Anglo-Persian Oil Company and the Commonwealth Government, whereby the capital of the Commonwealth Oil Refineries was increased to £750,000, the additional £250,000 being found by the Commonwealth Government as to one moiety, and by the AngloPersian Oil Company, as to the other, the Commonwealth Government continuing to hold a majority of the shares. The £250,000 then provided enabled the Commonwealth Oil Refineries to establish its own distributing system, which it has operated ever since. But modern developments in regard to petrol distribution have rendered necessary the provision of further capital, if this semigovernment concern is to operate on a more up to date and economical basis, so as to be able to compete on equal terms with private companies. The developments to which I refer are in connexion with bulk distribution and the installation of kerbside pumps throughout the capital cities and in some country districts. The Government has discussed this matter with the Commonwealth representative on the board of the Commonwealth Oil Refineries, and I take this opportunity to pay a tribute to the services rendered by Sir Robert Gibson. The agreement does not provide that a government representative shall be chairman, but the confidence reposed in Sir Robert is so great that he was appointed chairman of the company, and in that capacity has rendered invaluable service to the coun try. After thorough consideration, the Government came to the conclusion that il the Commonwealth Oil Refineries was to meet its competitors on equal terms, it was imperative that additional capital be provided. In view of the output which the refinery will reach when working on a full throughput, a further, amount of £100,000 is considered necessary to provide for bulk and kerbside distribution. That arrangement is embodied in the agreement which forms the schedule to the bill. The two partnersthe Commonwealth Government and the Anglo-Persian Oil Company - agree to find £50,000 each. The other important feature of the bill is clause 4. The Commonwealth Oil Refineries started operations in March, 1924, and at the end of its first financial year ended the 25th June, 1925 - actually fourteen months - showed a debit on profit and loss account of, approximately, £53,000. The question naturally arises - Why did this company, which was founded allegedly on a proper business footing, make such a loss in its first fourteen months’ of trading? The answer is clear, and convincing to any one who has knowledge of the difficulty of marketing a new product, and I can imagine none that would be more difficult to handle than a new brand of petrol. The Commonwealth Oil Refineries had two powerful factors to contend against - first, the intense, determined, and very efficient opposition of the companies controlling other brands of petrol ; and secondly, the innate conservatism of petrol users, and their disinclination to purchase any but the brands to which they are accustomed. Unquestionably the Commonwealth Oil Refineries experienced a year of grave difficulties, with the result that the throughput was only about 38,000 tons, as compared with the maximum capacity of 100,000 tons. Taking into account the marketing costs, limited output, and overhead charges, the loss on the first year’s operations is not surprising. During the second period, ending June next, that loss will be materially reduced ; the Government does not believe that during the current year the Commonwealth’ Oil Refineries can operate without a loss, but the information I have indicates that in the next financial year the company will be able to pay its way, and make a small profit towards meeting the interest bill.
– What was the loss last year ?
– In the fourteen months’ period it was about £53,000.
– Was that on a capital of £500,000 or £750,000?
– The company started with a capital of £500,000, which was increased by £250,000 in June, 1924. So that the full capital of £750,000 was not in use until after the commencement of the trading period in which the loss of £53,000 was made.
– Was that a direct trading loss, or did it include allowance for depreciation ?
– It is a trading loss after making allowance for depreciation. We believe that in the third period commencing in July next, with a full throughput and a greater recognition by the public of the value of the Commonwealth Oil Refineries spirit, the company will be able to operate without loss, or with very little loss. The progressive improvement that is anticipated is indicated by the fact that to meet the losses for the first fourteen months the Commonwealth Government and the Anglo-Persian Company will each provide 12s. 3d. for each ton of crude oil put through the refineries. In the second period the contribution will be reduced to 7s. 6d., and I hope that before long the loss will disappear entirely. The Government recognizes the difficulties inseparable from the establishment of a new business, and does not think that the company Has, so far, had a fair chance. We hope that under this arrangement the business will before long show a margin of profit. The Anglo-Persian Company has agreed to come into line with the Commonwealth Government on this arrangement, and the two partners are making equal contributions to the new capital, and sharing equally past losses, with a view to giving the enterprise afair start after June of this year. Some critics may ask, “ Of what use has the Commonwealth Oil Refineries been? It made a loss of £53,000 in the first period, and will make a further loss in the present year. Has it been of any benefit to Australia, and has it assisted to keep down the price of petrol ? “ A review of the petrol prices in other parts of the world will demonstrate that it has done so. I invite the attention of honorable members to the followingfigures relating to prices in Australia, the United Kingdom, and the United States of America: -
The table shows that in 1921 the price of first-grade petrol in Australia was 3s. 5¼d.; in the United Kingdom, 2s. 7 5-6d. ; and in New York, navy gasoline,1s. 3 3-10d. In the subsequent years the price of petrol in Australia decreased progressively until it reached1s 9d. per gallon. In Great Britain, the decrease was from 2s. 7 5-6d. to1s. 5d.; and in the United States of America from1s. 3 3-10d. to 11d. In 1921, the difference between prices in the United Kingdom and Australia was a little over10d. ; according to the latest figures it. is only 4d. The reduction in price was not nearly so great in America as in other countries. Honorable members will notice that, whilst prices in Australia steadily declined, those in the United States of America fluctuated. The progressive reduction in Australia has been largely influenced by the competition of the Common wealth Oil Refineries in the Australian market - competition which the oil trusts recognize as genuine, continuous, and designed to prevent the exploitation of the Australian public. If the Commonwealth Oil Refineries were not in existence, and this Parliament were doing nothing to protect the Australian public against exploitation, would petrol consumers be as well off as they are to-day? The history of the last few months indicates that greater toll would have been taken from them by other companies. On the 25th September last, the price nf petrol in Australia was reduced by ld., but by the 30th September the price in the United States of America had increased by 2 cents. The prospect of that increase must have been known to those who control oil supplies in Australia, and if there were no special reason for reduc-. ing the local price, it is surprising that that should have been done only five days in advance of the increase in America, because we are always told that Australian prices are governed by the American market. After that reduction, two “ pirate “ companies engaged in the distribution of oil were bought out. The Neptune Company, which distributed Waratah motor spirit, sold out to the British-Imperial Oil Company, and the interests of those who were controlling Golden Crown petrol were- acquired by the Vacuum Oil Company. I am informed that another small company has been absorbed, but I have no evidence in support of that statement. When the two so-called pirate companies disappeared, their brands of petrol were taken off the market, and, on the 23rd January, the British-Imperial Oil Company and the Vacuum Oil Company made a big forward movement for the simultaneous installation of kerbside pumps by arrangement with garages in all parts of the State. I am informed that that demonstration started about 4 a.m., and was almost universal. The two pirate companies having disappeared, and arrangements for a monopoly of kerbside pumps having been completed, the price of petrol was raised, on the 30th January, by lid. per gallon. The reason given for that increase was the increase of 2 cents in the United States of America, which had taken place in the previous September - five days after the reduction here! These facts speak for themselves. In February last a further increase of 2 cents in the price of petrol took place in the United States of America. If an increase in the United States of America in September of last year necessitated an increase in this country, as we are told, then a further increase of 2 cents in the United States of America would presumably mean another increase of l£d. iu Australia. But this has not taken place. The Commonwealth Oil Refineries Limited has not increased its price. It has maintained the price to which petrol was reduced last September. It may fairly be asked why, as the company is to be subsidized by the two partners in it, the Commonwealth Government and the AngloPersian Oil Company, for the period that ended with June of last year, and for the current financial year, is not the price of its product increased ? Can the company be run. economically on the present price of petrol? The answer is yes; that so far as the Commonwealth Oil Refineries Limited is concerned there is no necessity to increase the price of its petrol. The company’s throughput during the first period was 38,000 tons, but to-day it is putting through at the rate of 100,000 tons per annum, though the throughput for the financial year ending in June next will probably be only just over 70,000 tons. With a maximum annual output of *100,000 tons, the directors of the company say that there is no reason why the price of its petrol should be increased to the people of Australia, because it can maintain the present price and still pay its way. I do not propose to deal with that matter further. All that we propose to do at the moment is to provide the capital . necessary to allow the output of the Commonwealth Oil Refineries Limited to be economically distributed throughout the country. We have also to clear up the position that existed in the past, so that this company may start in June next without a debit to profit and loss. We cannot allow this country to be exploited in regard to one of its most vital commodities. Modern trade and commerce is to a great extent based upon cheap petrol. We are living in a petrol age. Petrol, indeed, is vital for the defence of this country. If Australia receives fair and equitable treatment in the supply of this necessary commodity, we shall not attempt to establish refineries all over this country, or to adopt other drastic methods to deal with the question. The Government does not believe in handling businesses itself, but if we do not get a fair deal, we must take effective action to protect ourselves. I do not wish to stress the activities that the other petrol interests will resort to in consequence of the action of the Government, but one matter has recently come under my notice which I feel that I must explain. I refer to a blazing advertisement that recently appeared in one of our newspapers, and is part of the propaganda resorted to by other oil interests to gain Australian trade. The advertisement states that a particular company is composed of Australian shareholders, and that hundreds of Australians have invested their capital in it. Beading that, one could come to no other conclusion than that the capital of this company has been found by the citizens of Australia, and that it is, in the main, an Australian industry. I was rather startled by the announcement that this was a private company, knowing as I did that the number of shareholders in such a company is limited to 50. The advertisement was issued by the Vacuum Oil Company, whose capital - putting aside past history - has recently been increased from £1,600,000 to £3,000,000, the increased capital being divided into 140,000 shares of £10 each. Of the total shares, 300,000 at £10 each, 285,573 are held by the Vacuum Oil Company of New York. Before 1918 only one share was held in Australia. Since then the position has changed to some extent, because, approximately, 15,000 shares are now held in Australia. The remaining 285,000 shares are held by the Vacuum Oil Company. Strange to say, the 15,000 shares in Australia are held by employees of the company. I have no criticism to offer if those shares have been given to or purchased by the employees in order that they may have a small interest in the business. But the list of shareholders, their addresses, and the fact that the shares are £10 each, cause certain doubts to arise in one’s mind. I do not comment upon the tactics adopted by competing interests; but I draw attention to the fact that these statements are being published at a time when the people of Australia are recognizing that the Australian industry is producing a first class article. The suggestion that hundreds of Australians have invested capital in this industry is misleading, because the only Australians who hold shares in the company concerned are its employees, and their number, I understand, is exactly 200, enabling the. word “ hundreds “ to be used without actually misstating the facts. The Government is quite determined not to- allow Australia to be exploited in regard to the vital commodity of petrol. We are establishing the Commonwealth Oil Refineries Limited on a firm basis, and if Australia does not get a fair deal we shall, if necessary, bring other proposals before the House.
– Is the British Government preserving its interests in the Anglo-Persian Oil Company?
– Yes. There have been rumours that the British Government has sold or is about to sell its interests. I can assure the honorable member that it still holds its original interest in that company. I commend this measure to honorable members.
.- When the arrangement with the AngloPersian Company was passed by this Parliament, we on this side opposed it for several reasons, one of which was that, as the Commonwealth had 250,001 shares in the Commonwealth Oil Refineries Limited, it should have a majority of directors. Unfortunately, we were defeated on that point. At present the Anglo-Persian Company has four and the Commonwealth Government three representatives on the board of directors. I do not intend to refer to what has happened in the past. The agreement has been in operation for some time, and the directors of the company have shown that they have not been able to finance the venture satisfactorily, and consequently desire to extend the business to make it remunerative. Little objection can be taken, to the measure. The Government has invested £250,001 in this company, and this Parliament would not act fairly by the taxpayers if it refused to find the additional capital to enable this company to be a success. We must either find the capital, or allow this company to go out of existence, and leave us at the mercy of the other oil interests. If the figures given by the Prime Minister are correct, and I take it that they are, there is every justification for increasing the capital of this company. It has been shown clearly that, since the operation of the agreement, the price of petrol has considerably decreased. Of course, it may be argued that prices have also decreased in other parts of the world. That may be so, but the fact remains that the decrease in the price of petrol in Australia has been relatively greater than in other countries. To my mind, the operations of the Commonwealth Oil Refineries Limited induced the other oil interests to reduce the price of petrol. In 1921 the price paid in Australia was 3s. 5-Jd. a gallon, and to-day it is ls. 9d., representing a decrease of ls. 8-Jd. since the operation of the agreement. In 1921 the price of petrol in Great Britain was 2s. 7 5-6d., and to-day it is ls. 5d., a decrease of ls. 2 5-6d. In 1921 the price in the United States of America was ls. 3 3-10d., and to-day it is lid., a decrease of 4 3-10d. In proportion, there has been a greater reduction in Australia than in other countries. Evidently the active competition of the Commonwealth Oil Refineries Limited with the other oil interests in Australia has been the means of providing us with cheaper transport fuel. I understand that the Public Accounts Committee has considered this matter, and that its .report, which is favorable to additional capital being provided for the company, was presented this morning.
– Honorable members should have been given an opportunity to read the report before this bill was introduced.’
– It is unfortunate that on so many occasions honorable members have been asked to deal with measures in the absence of reports ‘ which would be of great assistance to them. Whatever our views were at the time that the agreement was entered into, the fact remains that the Commonwealth is now a partner with the Anglo-Persian Oil Company. In the circumstances, we can do no other” than agree to the proposal now before us if the venture is to be a success. The Prime Minister stated that it was the intention of the company to enter into more active competition with the importing firms, which, we know, deal largely in bulk supplies, tanks and pumps being supplied to distributors throughout the Commonwealth. We have been assured that if this increase in capital is agreed to, the Anglo-Persian Oil Company will make the same contribution. As partners in the concern, we should do all that is possible to enable the public to get oil from the company when and where it is required. That can only be done by increasing the company’s capital and extending its ramifications. While there can be little difference of opinion regarding the necessity for providing the company with additional capital, it is doubtful whether everything possible has been done in the direction of searching for oil in Australia. Notwithstanding our interest in the Commonwealth Oil Refineries Limited, no stone should be left unturned to prove the existence or otherwise of oil in our own territory. Adequate supplies of oil fuel are essential to our progress. I therefore hope that everything possible will be done to locate oil in Australia. I have pleasure in supporting the motion.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Customs and Excise Duties
Debate resumed on item 176 (vide page 2015).
.- The honorable member for Swan (Mr. Gregory), who was speaking when the tariff debate was adjourned, is not now in the chamber, but he will, I assume, have another opportunity of continuing his remarks. I wish to refer to the remarks of the honorable member for Darling (Mr. Blakeley) regarding the necessity for assisting the gold-mining industry. His speech reminded me of the old story, which must be familiar to honorable members of a cabman who endeavoured to ascertain the smallest quantity of fodder on which his horse could continue to work. The horse’s daily allowance was diminished until one straw became the day’s ration; but, unfortunately, just as the horse was getting used to that ration it died. The honorable member for Darling seemed to think that because the gold-mining industry was already in a bad way, we should not worry about it further. In effect, he said that to take away one more straw could not have much effect. Unfortunately, that specious argument is used every time that a plea for assistance to the mining industry is made. No matter in what form the case for the industry is presented, or how many difficulties confronting it are mentioned, the reply remains the same. There can be no doubt that this industry is experiencing very grave difficulties, which have been caused almost entirely by the tariff. We are told that any burden which the tariff imposes on the goldmining industry is, at the most, only an additional difficulty, and that, therefore, it can be disregarded; but I maintain that a great injustice has been done to this industry, which has not received the consideration to which it is entitled. The Tariff Board took voluminous evidence when it inquired into the condition of the gold-mining industry. The case was presented carefully and reasonably by those interested; but it appears that the representations made carried no weight with the Tariff Board. And, apparently, they carry no weight with this committee. The honorable member for Darling appeared to think that the goldmining industry in Western Australia only was concerned; but I remind him that we are pleading for the mining industry throughout Australia. The honorable member said that the mining industry at Broken Hill was not concerned with these proposals, and that, therefore, the industry in Western Australia should not be concerned. There is a very great difference between the two industries. Prior to the war the price of lead was from £17 to £21 per ton; today its average price is about £35 a ton. Moreover, the wages of the miners fluctuate according to the price of lead. I ask the honorable member for Darling what would be the attitude of those engaged in the Broken Hill mining industry if the price of lead had been fixed at, say, £18 a ton - its pre-war price. Would it be possible for them to carry on and pay the wages that are now paid there? The honorable member should attempt to visualize the position ; he would then understand the present position of the gold-mining industry. The price of gold has been fixed; it is the same as before the war. There can, therefore, be no comparison between the gold-mining and the lead-mining industry. The honorable member for Darling stated that the gold-mining industry had practically died in Victoria, and that the position in Western Australia was much the same. The position in the two States is entirely different. The geological formation of Victoria makes the presence of gold more easily discoverable in that State than is the case in Western Australia. In Victoria it is possible to ascertain with some degree of accuracy the probabilities of gold occurrence, and to make such explorations as would give reasonable ground for the belief that gold winning is, or is not, possible.
– Victoria has produced gold to the value of over £3,000,000.
– I have’ not attempted to decry Victoria’s gold output. I am attempting to refute the argument that because no more gold has been found in Victoria it cannot be found in Western Australia, and I am justified in pointing out that the conditions in the two States are so different that the experience of Victoria will not necessarily be that of Western Australia. In the western State the lode formations are not so easily traceable as the reef formations in Victoria. There are huge tracts of land there which give no surface indications of the presence of gold ; exploration in those areas is extremely difficult and expensive. While there are grounds for saying that in Victoria the gold-mining industry is at, least moribund, the same cannot be said of Western Australia. In one area alone, in which prospecting had continued over a long period without result, a huge formation was found, and it is now being developed. There is every ground for the belief that with improved methods of investigation gold will be discovered in other areas also. The discovery of gold assists the development of country which is unattractive and which presents difficulties to those who desire to settle upon it. The same can be said in regard to the discovery of copper, lead, and other base metals referred to by the honorable member for Swan (Mr.
Gregory). It is our duty to encourage the mining industry in .every possible way, and to enable mining plant to be purchased at the most reasonable price. We have also to remember .that the Commonwealth has under its control a vast area of country in northern Australia concerning which satisfactory reports of the prospects of mineral discoveries have been furnished from time to time; but, until more rapid and more economical moans of transport are provided, mineral development in that part of Australia cannot be extensively undertaken. It is the duty of Parliament to provide means whereby the most modern mining plant can be obtained at a reasonable price, so that the metalliferous deposits in northern Australia, as well as in other parts of the Commonwealth, can be developed to the best advantage. I could speak at length concerning the different types of machinery imported, the manufacture of which has in some instances been undertaken with unsatisfactory results. The representative of the Chamber of Mines in Western Australia, in giving evidence before the Tariff Board, stated that it was the desire of the chamber to encourage the local manufacture of mining machinery; but he pointed out that, after testing imported and Australian-made machines side by side, it was impossible to use the locally-made article. The evidence tendered by the Chamber of Mines in this regard was irrefutable, and I cannot understand why the board has overlooked many of the important facts placed before it. It is to be regretted that the committee does not seem prepared to seriously consider the pros and cons in this case. Honorable members opposite do not seem inclined to give consideration to the facts; they speak only on one side of the question. That is manifestly unfair to honorable members whose views do not coincide with theirs. The case has been very clearly put by the honorable member for Kalgoorlie (Mr. A. Green), who has shown that this is a subject of grave importance, not only to Western Australia, but to the whole Commonwealth. I intend to support the amendment moved by the honorable member for Kalgoorlie, and I sincerely trust that a majority of honorable members will support it. I do not wish to unduly delay the committee, but
I again express the hope that, in this instance at least, honorable members will adopt a different course from that which they have adopted in connexion with other items, and will give support to an industry which is of vital importance to the Commonwealth.
.- It has been most depressing to listen to the mournful dirge of the honorable member for Perth (Mr. Mann). In discussing this item,, the honorable member has covered a wide range of subjects, and one would imagine that the articles under consideration were vital to the welfare of the Commonwealth. It has been stated in this House on several occasions that, in order to enable the gold mining industry in Western Australia to carry on, a bounty was necessary. That is a proposal which I feel disposed to support. I cannot understand why the imposition of such small duties as are shown in this item should cause a cessation of mining operations in Western Australia, as some honorable members suggest. The honorable member for Perth (Mr. Mann) has been wandering in a fiscal wilderness, and it would appear that the discussion of this schedule would be expedited if the honorable member realized the futility of ‘his abstract criticisms on the various items in the schedule. One might liken certain honorable members on the corner benches to Faith, Hope, and Charity. The honorable member for Perth (Mr. Mann) seems to have unbounded faith in his fiscal opinions, the honorable member for Swan (Mr. Gregory) has great hopes of convincing honorable members that his views are right, and the honorable member for Forrest (Mr. Prowse) takes a charitable view of every country but his own. There is that much in common between these honorable members. I am surprised that they are so persistent in repeating the same worn-out arguments on almost every item. I cannot see how the duty on the articles mentioned in this item can seriously interfere with the goldmining industry.
.- I regret that I was temporarily absent from the chamber when the discussion on this item was resumed, but for the edification of the honorable member for Yarra (Mr. Scullin) in particular, I wish to continue my remarks on this subject. I am hopeful that the honorable member for Yarra, who is a reasonable and earnest member of the committee, may see the error of his ways, and may recognize that the heavy impost provided in the tariff schedule will have a detrimental effect upon the workers in this country. If honorable members opposite who appear to be so desirous of protecting the interests of Australian manufacturers, could show that as a result of increased duties Australian workmen are obtaining better conditions, and that their wages are increasing at a greater rate than the cost of living, I could understand their attitude. But according to the figures published by the Commonwealth Statistician, workmen, such as carpenters and bricklayerslabourers employed in unprotected industries, receive higher remuneration than bootmakers engaged in an industry which has been protected for very many years. Honorable members opposite cannot show that the heavy duties which have been in operation during the last five years have proved of advantage to the workers. In a leading article in the Age some time ago, the Victorian Government was strongly criticized for its inactivity in providing employment for some of the 10,000 men who were out of work, and it wasurged that public works should be undertaken to relieve unemployment. In such circumstances, is it not time for us to ask if our fiscal policy should not be changed ?
– Does the honorable member suggest that we should adopt the policy in force in Great Britain, where theunemployment problem is worse?
– I am not suggesting that. In the past Thompson and Company, of Castlemaine, and Walkers’ Limited, of Maryborough, Queensland, have been able to compete with Great Britain and other countries in the manufacture of mining machinery. On the Great Boulder mine, in Western Australia, a winding plant manufactured by Thompson and Company, of Castlemaine. thirteen or fourteen years ago, is still in operation, and although the plant of that firm was sufficient to turn out such an excellent piece of machinery, it has been stated that the firm is not obtaining sufficient orders to enable it to carry on successfully. When heavy duties are imposed on the iron, copper, and steel industries, the manufacturers of machinery in which these materials are used have to seek increased duties. In a sworn declaration before the Tariff Board, the representative of the Broken Hill Proprietary Company said at the inception of the undertaking that the industry would not be established if it could not carry on without protection.
– But economic conditions have altered since then.
– Yes, but if we impose heavy duties oh key industries requests will be made for higher duties on the articles manufactured from the product of those industries. In the face of all these facts, how is the wheat-grower to make good? There is no reason why our Australian manufacturers and workers should not compete successfully, as the American manufacturers do, in the markets of the world. Not a trained artisan in America is paid less than 40 dollars, and some receive as much as 60 dollars, weekly.
– It must be remembered that the American worker does piecework, and has a population of 120,000,000 to supply.
– With our wonderful agricultural possibilities, and the great developments that are going on, I believe that we should be able to manufacture ouragricultural machinery at least as cheaply as the Canadian does. The rate of wages in Canada, and the conditions generally, correspond with those of the United States of America. The wealth of Australia lies in her primary industries. I do not say that we should not have secondary industries, and I am not opposed, nor is any honorable member to my knowledge, to the provision of a reasonable degree of protection for them to help them over the early stages of their development. Goldmining is not the only mining industry that is in difficulties. The price of copper has been low, ranging about £60 a ton, for a very long time; and we are not able to work anything but high-grade ores; but the United States of America is able to do so, notwithstanding the low price. The latent mineral wealth of this country is marvellous, and tens of thousands of men should be engaged in exploiting it. I am a believer in good wages; but I object to the worker in the capital cities being paid more than the worker at
Kalgoorlie, for instance. Honorable members seem to be possessed with a desire to help the rich man to become richer. In Dunn’s Gazette, of the 8th March last, particulars are published of a company with a capital of £1,500,000 that is being floated by Mr. Hugh V. McKay, one of our leading manufacturers. Mr. McKay’s object is to develop, not his implement manufacturing business, but his pastoral propositions. He has made so much money out of implement making that he has been able to invest immense sums in the pastoral industry. Yet honorable members are seeking to increase the duty on imported implements so that hemay make larger profits still.
– I rise to a point of order. Is the honorable member for Swan in order indelivering,on this item, a speech covering the general principles of protection and freetrade?
– I have been on the point of calling the honorable member for Swan to order on several occasions; but I have not done so, for I thought that he was endeavouring to connect his remarks with the item before the Chair.
– He failed to do so.
– I ask him to confine his remarks as far as possible to the item before us.
– Was I not in order, Mr. Chairman, in the references that I made to the success of the engineering business of Messrs. Thompson and Company at Castlemaine under the small duties of years ago, and the difficulties it is experiencing under the higher duties of to-day?
– The honorable member was not distinctly out of order in any of his remarks, but I ask him to keep more closely bo the item.
– I have a good deal of information prepared on the general question of machinery which I thought of using now in order to save time later. I urge honorable members, and the Minister in particular, to be a little more reasonable in their treatment of mining machinery. The foolish attempt of the
Government early this year to encourage prospecting by providing a bounty of £40,000 for prospectors, is rendered the more foolish by its effort to place a higher duty than ever on mining machinery. I hope that we shall reduce both the British preferential and general duty on mining machinery, and so stimulate development. The wealth produced from our mines is distributed throughout the Commonwealth and contributes to the general prosperity of our people. If the price of lead were to fall, the Broken Hill mines would have to close down at once. The Mount Morgan mine had to suspend operations recently, and that was a big blow to the people in the district. Every working miner provides work for four other men, and a big development in the Australian mining industry would bo of immense value to the Commonwealth. It distresses me that the Government should seek to increase the duty on mining machinery from 27½ per cent. to 40 per cent., for by so doing it shows an utter disregard for the welfare of the industry.
.- As item after item has been reached, honorable members in the comer have discoursed at length on the injury that high duties do to industry. They seem to assume that the . imposition of high duties on machinery must, ipso facto, increase the price of machinery to the public. This morning I pointed out the fallacy of that view when applied to road-making machinery. I gave concrete instances in which prices had been reduced since the imposition of the higher duties; and no honorable member has disputed my figures. I shall now give a concrete case respecting aircompressors, which are very largely used in the mining industry, and in sewerage works throughout the Commonwealth. Prior to the imposition of the new duties last year, a certain make of American air compressors was being sold in Australia at from £475 to £500. Did the imposition of the high duty increase the price? It did not. It enabled the Australian manufacturers to turn out larger quantities, and to enter into active competition with the American manufacturers, with the result that the same air compressor may be bought in Australia to-day at from £325 to £350.
– Does the honorable member assert that the increased duty caused the reduction in price?
– I say that the increased duty encouraged the local manufacturers to enter into active competition with the Americans, and so it has led to a reduction in the price. The American manufacturers have been compelled to reduce their prices. The quality of the best brands of American and Australian compressors was exhaustively tested some little time ago by the Metropolitan Board of Water Supply and Sewerage, of Sydney, with favorable results to the Australian article. Honorable members of the corner party have .not given one specific . instance to show that the higher duties have increased the price of machinery to the Australian purchaser. The duties, as a matter of fact, enable the Australian manufacturer to produce in large quantities and so cut down his overhead charges, and therefore his selling price. When honorable members who are opposing this item give us some concrete cases to illustrate their arguments I shall be prepared to listen to even their doleful dissertations.
.- I am impelled to participate in the debate on this item for several reasons. I want, in the first place, to congratulate, the honorable member for Kalgoorlie (Mr. A. Green) on the excellent speech he delivered this morning. He was followed by the honorable member for Darling (Mr. Blakeley). It is remarkable that these two honorable members, who are both on the Labour side of the chamber, represent the most important mining districts in Australia - Kalgoorlie and Broken Hill, respectively. The honorable member for Darling scathingly criticized the remarks of his colleague, and although he is ever ready to condemn any honorable member in this corner for decrying Australian industries, he referred to a number of mines and mining companies as corpses on the road to the cemetery. He argued that if the gold-mining industry was in such a precarious condition that it could not stand this little extra impost, it should cease to exist. If that were an argument, it would be equally logical to say that if the manufacturers of mining machinery are in such an unsound financial position that the granting or withholding of the increased duty means life or death to them, they should go out of business. If an industry must cease, it should be that in which the fewest number of employees are engaged, and the smallest amount of capital is invested. What will it profit Australia at large if a number of mines are closed and 1,000 miners are thrown out of employment in order to give work to 100 men in secondary industries? Having no mining interests in my electorate, I think that I can express a disinterested view of the matter. I have visited Kalgoorlie on several occasions, and when, after passing through many miles of bush country, I arrived for the first time at the city of Kalgoorlie, I was most favorably impressed by its fine streets, departmental stores, theatres, electric lights and trams. But there was an undercurrent of anxiety in regard to the future, and I was told that it was due to the ever-increasing cost of production, rather than the decreased yield of the mines.
– Does the honorable member suggest that if this duty were not imposed, the mines would be reopened ?
– No. Individual increases may not have a very marked effect in themselves ; but, collectively, they will seriously retard development. The miners on the Kalgoorlie field, in the majority of cases, know no other home. I understand that they have even accepted a few shillings a day less than their fellow-workers at Broken Hill, in order to continue in their present employment. With the ever-present prospect of striking a vein of gold, shareholders in mining companies, if they are not losing money, are often prepared to keep mines in operation; but, as soon as the mines become losing propositions, those financing them ask whether their money could not be invested to better advantage in other channels. Australia has numerous low-grade mines, and with constant improvement in the methods of treating ores it is frequently necessary to scrap old machinery and to adopt more modern appliances. This country owes a great deal to the gold-mining industry. The gold rushes in Victoria were more valuable to it, as a means of attracting population, than the best immigration propaganda that could be conducted. On a visit to the Northern Territory some years ago, I passed through hundreds of miles of mineral country. Although I do not profess to have any practical knowledge as a miner, I could visualize the possibilities when I saw vast areas of metalliferous country that had never been touched by the pick of the prospector. If honorable members propose to continue the process of piling duty upon duty, why not immediately resort to prohibition, and grant a bounty for the production of gold? It is not an economically sound proposal to increase the costs of mining when the value of gold remains stationary. I appreciated the admirable speech by the honorable member for Kalgoorlie (Mr. A. Green). His amendment is a reasonable one, and I shall support it.
.- The honorable member for Yarra (Mr. Scullin) stated that air compressors made in Australia could compete with those imported from abroad. I wish to show that Australian manufacturers were underselling their overseas competitors prior to the imposition of the increased duty. In those circumstances, where would the increased profit go, if not into the pockets of the local manufacturers? I have a letter from Ingersoll-Rand (Australia) Proprietary Limited, in which the following passages occur: -
Air compressors are essential in mining, quarrying, and similar enterprises. The application to the Tariff Board for an increase in duties was made by Kelly and Lewis, a firm of Melbourne engineers, who copied our design so carefully that you cannot tell one machine from the other unless you look at the nameplate. They made their application for an increased duty in February, 1025. We advised the Tariff Board that they were underselling us, and showed that in 1923, in a tender for the New South Wales Public Works Department, they had underquoted us by £100 each for 24 machines, their price being £346 10s. against ours of £446. On the 4th August, 1925, we quoted the New South Wales Public Works Department and the New South Wales railways for 28 air compressors, our price being £405 each. Kelly and Lewis have received portion of this order, their price being £60 per machine below us. While the balance of the order is not finalized, it is practically certain to go to them. We could give you half a dozen other instances of their underselling us in the last few months. Under these circumstances, we cannot understand the Tariff Board increasing the duty on these machines by 20 per cent.
Clearly an Australian company was able to compete successfully with importing firms in supplying air compressors, and yet it asked the Tariff Board for an increased duty.
.- It seems to me that there should be some plain speaking about this matter. I do not think that the reduction asked for by the honorable member would be of any considerable benefit to the mining industry. I have had something to do with mining, and I have never come in contact with such a lot of scoundrels and robbers as I did in my association with that industry. These are the persons who are responsible for the decadence of mining. Honest men on the Stock Exchange know it. I had the misfortune to be a director of a mining company; I thought that I could make it “go straight.” The managing director had enormous power, and was a born thief. Machinery which was supposed to have been purchased at a cost of £1,500, on which sum he received commission, proved to be junk. That mine never had a chance of success. The failure wasnot due to the duty paid on the machinery, but to the inherent foolishness of State Governments in allowing such ventures to be floated under conditions that were almost an inducement to swindle. One picture has been seared very deeply into my mind. On a hot, dusty, summer day in Kalgoorlie I saw a mother wheel her child in a perambulator to the side of a tin hut in order to obtain a little shade for it. The Minister for Health (Sir Neville Howse) will agree with me that the damage done to the health of the unfortunate miner is not counterbalanced by the value of the gold won. I had the misery of seeing the wretched diseased miners in South Africa, where the government has at least provided a pension greater than that paid to miners in any other part of the world. To that extent the South African Government has acted humanely, but the pension is restricted to white persons. I saw black men being sent away, with only £10 or £15 in their pockets, to carry the germs of disease into every kraal they visited. I wish to give a few words of advice, if my lips may be permitted to utter them. I suggest that this Parliament should provide that every mining company must employ an officer of the Audit Department to keep its accounts, and to see that cheques are properly drawn. In that way it may be possibleto prevent some of the swindling and robbery that are so rampant to-day. Let any honorable member inquire among his immediate friends how many have lost money in these nebulous mines. How many mines out of a hundred produce a profit? How many oil ventures fail?
– I cannot see that the honorable member’s remarks are to the point.
– The honorable member reminds me of the member of a certain race who, being hungry, decided to have a rasher of bacon. Afterwards, when he went outside and an awful thunderstorm broke, he exclaimed, “ Lord, to think that there should be such a lot of trouble over a bit of bacon ! “ How many honorable members who oppose these duties are true freetraders? In all my travels I have been in only one place that had freetrade, and that was Hong Kong, but even there they have seen the error of their ways, and are now imposing a revenue tariff. The freetraders all believe in revenue tariffs, although they do not say so. I do not object to them having their own opinions, but why cannot we have a division and settle the matter? Do my freetrade friends imagine that they can change the views of the sensible men who. form the Government? Do they think that, if they talk from now until doomsday, they will make any impression on the protectionists? Does the honorable member for Perth, the Agamemnon of them all, think that his talk will have any effect ? Does he imagine that, if he talks like a river flowing on for ever,, he will alter one vote?
– Does the honorable member think that he can convert me?
– I shall not attempt to do that. I am sorry that the honorable member holds certain opinions, but I know that he is honest, and he has my respect. I urge that we should take a division on the amendment immediately.
Question - That the amendment (Mr. A. Green’s) be agreed to - put. The committee divided.
Majority … … 27
Question so resolved in the negative.
.- Subitem f of item 17 6, “ Machines and machinery n.e.i.,” is a great drag-net clause affecting machinery. It covers all kinds, types, and classes of machines and machinery not specifically mentioned in other parts of the item. The Minister is proposing that the duties on this sub-item shall be increased from 26½ to 45 per cent. in the British preferential tariff, or an increase of 17½ per cent., and from 40 to 60 per cent, in the general tariff.
– If we could be sure that the machinery imported was all of British manufacture there would be no difficulty.
– The honorable member is aware of the fact that under a departmental regulation a declaration must accompany every import into the country that it is of 75 per cent. British material or manufacture before it can secure the advantage of the British preferential rate. In view of this regulation, there need be very little doubt that goods imported under sub-itemf from
Great Britain will be of British manufacture. I enter my protest against th, increase of the duties on this sub-item. When we consider the high natural protection enjoyed by those manufacturing these machines and machinery in Australia, it is difficult to understand why such a.n increase should be proposed. I have here a number of invoices which indicate the natural protection on this class of goods coming into Australia. The first refers to a Cornish multitubular boiler. The actual cost of the machine in Great Britain is £269. By the time it arrives here, after the payment of a total duty covering the tariff duty and the natural protection, the cost is increased to £518 13s. Tel., showing a total protection of 92 per cent. There is no justification whatever for a duty of that kind upon such a machine. Another invoice refers to a passenger lift. In the case of this machinery the natural protection is not so high aa in the first case I have mentioned, but the total duty payable on the machinery before it can be landed here is 65 per cent. On a mortising machine the duty amounted to only £5 17s. 9d., but the actual protection covering all charges upon its importation brought the total charges up to no less than 58 per cent. The cost of the article in England was £20 2s.. dd. Various charges brought it to £31 15s. 2d., of which only £5 17s. 9d. was duty imposed under the tariff. The charges other than the duty include packing, freight, agent’s commission, exchange, cartage, &g. The total charges on another mortising machine, including natural protection, amounted to 77 per cent. The cost of an exhaust fan was increased from £33 to £54, the total impost on it, including natural protection, amounting to 62 per cent. I have an invoice of another exhaust fan from America, the Cost of which was £33 fis. 7d., and was increased by charges affording natural protection and by the duty under the tariff to £62 2s. 8d., or a total impost of S5 per cent. Surely Australian manufacturers do not require such protection. I have an invoice of a welder, the total charges on which amount to 79 per cent. On another Cornish boiler the duty was 27i per cent., but including natural protection and charges the total impost on the article amounted to 74^ per cent. On gearing and coupling machinery the total duty, including natural protection, amounted to 68£ per cent. On a saw bench it amounted to 68 per cent. On a great many other machines the total charges varied from 60 to 70 per cent. On a washing machine costing £155 the total cost of landing it here, including duty, amounted to £62 19s. lOd. or 69j per cent, protection. On an electric motor costing £115, the total charges, including duty, were £72 7s. 4d., or a protection of 90 per cent. The Minister proposes to increase the duty on sub-item f by 17£ per cent, in the British preferential tariff, and by 20 per cent, in the intermediate and general tariffs. I am not interested in foreign machinery, but I complain that no justification has been shown in any speech delivered in this chamber for the increases proposed in the duties on this machinery. I emphasize the fact that sub-item p covers every type of machine and machinery that is not specifically included in other parts el item 176. Sortie hundreds of different types of machinery will be dutiable under this sub-item. In view of the divisions which have been taken it seems that honorable members, no matter how high a duty proposed may be, are prepared to approve of it. In the circumstances it is of little use to move any amendment. That is no reason why we should not fight against these increases. I shall leave the moving of an amendment to some one else. The previous duties on this subitem are almost doubled, and this must have a serious effect. I know that the Minister has power whenever a special request is made to him to admit any goods free under item 174 ; but only those v/ho secure his ear will be able to obtain a remission of duty. Small industries are started everywhere, and it would be of great advantage to the country that they should be enabled to secure the latest types of machinery from any part of the world. Surely it is better, even with primary production, that only the best types of machinery should be used. It is abominable that without any evidence to warrant increases of duty under this sub-item the committee is apparently quite prepared to support the Minister’s proposal.
Sub-items (b), (o), (e) and (f) agreed to.
– A most extraordinary alteration proposed in this item has never been mentioned by the Minister. Formerly sub-item (a) (1) read, “ Portable engines,” and these were dutiable under the British preferential tariff at 27½ per cent. The Minister now proposes that the sub-item should read, “ (a) (1) Portable steam engines.” The introduction of the word “ steam “ would have the effect that every oil engine imported will come under sub-itemf, of item 176, “ Machines and machinery, n.e.i.,” and will be dutiable at - British, 45 per cent. ; intermediate, 55 per cent. ; general, 60 per cent. Oil engines required for household and other purposes will be dutiable at those rates. What is proposed is a wicked imposition. I think the word “steam” should be omitted, and I therefore move -
That the item be amended by adding the following: - “and on and alter 26th March, 1926,” 177. (a) (1) Portable engines ad val. British, 27½ per cent., intermediate, 35 per cent. ; general, 40 per cent.
.- If honorable members understood the effect of this alteration in the tariff, they would give the matter very much more careful consideration than they appear to be dev ling to it. Its effects will be more farreaching than the majority of honorable members imagine. During this debate on the tariff we have heard a great deal regarding the necessity for our technical machinery and power equipment being brought right up to date, and embodying all the latest improvements, yet we here propose to encourage the reversion to the oldest form of power engine. It would seem that the latest improvements in oil-driven engines, that are being used to an increasing extent in every branch of industry, are to be specially handicapped, and only the old-fashioned steam portable engine is to be encouraged. This will bit the man who uses small power appliances. I cannot understand how honorable members can treat the matter with such callous indifference as they are displaying. They are laying up for themselves a great deal of trouble in the future.
Question - That the amendment be agreed to - put. The committee divided.
Majority . . 30
Question so resolved in the negative.
– Under item 176 two different interests were considered - the general public, as the user of roads, and large mining corporations. In the consideration of the duty upon locomotives, the State is the interested party, and the policy of protection has an altogether different application. The Commonwealth does not stand to lose anything by the imposition of a duty upon locomotives, because all that is involved is a bookkeeping transfer. I shall not deal with the general question of the extent to which the Commonwealth is justified in imposing heavy indirect taxation upon a State, but I propose to give a special illustration of the effect of the imposition of such taxation. It concerns the State of South Australia. In January, 1924, that State accepted a tender from Armstrong, Whitworth and Company, England, for 30 locomotives of three different types - ten of the Mountain type for slow, heavy freight; ten of the Pacific type for fast, ordinary freight or heavy passenger freight; and ten of the Mikado type for fast passenger freight. The contract was to be completed within twelve months of the approval of the drawings, which was given in October, 1924. During the last week or two honorable members may have read in the press that South Australia is just taking delivery of those engines. Under the tariff when the contract waa made the total cost, including the duty on those locomotives at 27^ per cent, would have been. £456,500, and under the 40 per cent, duty in this schedule it would be £497,940. This means a difference to the State of £4.1,440, and will be a burden upon the people years after the contract was let. If the Minister for Trade and Customs will not make any remission-
– I shall certainly not remit any duties on railway material imported by South Australia.
– I understood the Minister to say earlier to-day that he would remit duties when it could be shown that the articles imported were not commercially manufactured in Australia.
– That is so.
– I shall prove that these locomotives are not commercially manufactured in Australia. Firstly, they are not manufactured at all in Australia, because they are of greater size than any engines yet produced in this country, and that they cannot be commercially produced here is proved by the tenders received for twenty of them, and the fact that for the ten largest no tender was received. If. this item is agreed to, and the Minister does not see his way to remit the duty, the extra cost of £41,440 will have to be borne by the people of South Australia practically for all time as a permanent charge on their railways. I repeat that for the ten locomotives of the Mountain type no Australian tender was received, whilst the lowest local tender for the twenty locomotives of the other two types was £173,600 more than the British tender, plus 27^ per cent, duty, or £148,370 more than the British tender if the duty be levied at 40 per cent. It is obvious, therefore, that even with the increased duty in operation, there would be no possibility of the tender being let to any Australian firm in view of the fact that, even after paying the 40 per cent, duty, the State would still benefit by nearly £150,000 from the placing of the tender abroad. Nobody can reasonably contend that the ordering of the twenty locomotives in Australia at an extra cost of £148,370 is a commercial proposition which a State or any business man would be justified in considering.
– What was the total value of the contract?
– The total value of the contract let to Armstrong, Whitworth and Company for 30 locomotives was £365,500, and the total of the lowest Australian tender for only 20 locomotives was £454,500. For some years the South Austraiian railways have been undergoing complete re-organization and re-equipment under the Chief Commissioner, Mr. Webb, who was appointed early in 1923. The reorganization includes such changes as divisional control, improved locomotives, and rolling-stock, coal-handling devices, alteration of gauges, new bridges, ineluding one over the Murray River, a new central station, and electrical signalling. Of the total cost of about £5,000,000, £3,500,000 will be spent in Australia, the balance being for imported plant and equipment. Mr. Webb, who is an exceedingly able man, is an American, and, therefore, cannot be suspected of bias towards British manufacturers. ‘ The Australian manufacturer whose tender was lowest asked for four years and eight months in which to complete the contract, as compared with one year allowed in the English contract. The factor of time was of very great importance, and the delay which acceptance of the Australian tender would have involved would have immensely increased the capital cost of the scheme. A great many alterations have to be made in order that these heavier locomotives might be used, and tracks, bridges, and culverts had to be rebuilt and strengthened. The interest on the money expended can be earned only by the carriage of freight, and the greater the delay in putting the new locomotives into commission, the greater the cost of the scheme. The largest engine constructed in Australia to date weighs 138 tons road-worthy. The locomotives purchased abroad weigh from 162 to 218 tons road-worthy. In support of my statement that these locomotives are larger than any yet produced in Australia, I shall quote extracts from English engineering publications. The Railway
Engineer of February, 1926 - as that is the 553rd monthly issue of the journal it may be assumed to be fairly reputable - published pages of photographs and diagrams of the engines, and concluded a description extending over one and a half pages, with these words -
From the foregoing it will be seen that the specification of these remarkable locomotives is of a very complete and modern description.
Modern Transport, of 30th January, 1926, contains photographs of the 1000.motives being placed on board, and says -
These locomotives, which formed Hie subject nf a detailed and illustrated notice in the 2nd January issue of Modern Transport, take rank as the largest and heaviest railway engines yat built, not only in Great Britain, but in any part of the world outside the United States.
The Railway Gazette of 1st January, 1926, after referring to the Mountain type, said -
The other two designs, Pacific and Mikado, are only in sonic degree less striking, their proportions and weight being smaller in some respects than those of the Mountain type engine, but from whatever stand-point they may be viewed, the engines collectively mark another advance in overseas locomotive practice.
These are the engines in regard to which the Minister is not inclined to grant a remission of duties. They represent a. great advance in railway and mechanical en- gineering, and. their introduction to Australia will be watched with interest by everybody who is interested in railway construction and management. What were the reasons which actuated the Barwell Government in placing the tender for them abroad ? The first was that no local tender was received for ten of them and, in regard to the other twenty, the Australian tender was immensely greater, and involved a considerable delay in delivery. The Chief Railways Commissioner was influenced by another consideration. His scheme includes the re-organization of the Government workshops at Islington. That work is expected to be completed by 30th September next, and the Islington establishment will then be able to build the whole of the State’s requirements of locomotives and rolling-stock. Indeed, arrangements have already been made for the construction there of some of the smallest type of the imported locomotives. Very shortly the Islington workshops will be able to carry out the construction of larger locomotives than have ever yet been constructed in Australia. Other honorable members, who know more of this subject than 1 do, will, I am sure, agree with mc that these workshops are being brought to a high state of efficiency. There is no desire to send the work elsewhere. The staff has been increased from 1,400 to 1,800 employees, and three years’ work at full pressure is required to carry out the present orders. Owing to the tremendous cost of the reconstruction scheme, it was essential that these locomotives should be obtained at a reasonable price, and therefore the contracts for them were let outside Australia. From a purely State view-point, it was not desirable that independent tenderers should be encouraged to install machinery for constructing locomotives of a kind which were intended subsequently to be constructed at the Government’s own workshops.
– -Is the honorable member suggesting that the duty should be reduced ?
– What applies to one State might very well apply to another. In view of the enormous discrepancy between the local tender and the overseas- tender, I suggest that it would be simply penalizing a State to force it to pay the additional tariff, especially when the local tenderer could not in any way compete with the price of the overseas tender even with the duty superimposed. It would be iniquitous to apply the proposed tariff retrospectively, as it were, to an arrangement that was made several years before the tariff was tentatively brought into force, and if the Minister is not prepared to allow these locomotives to come in under the original duty, which seems to me to be ample, he should give a remission under the tariff in their favour because they are not commercially manufacturerd in Australia.
– Do you mean a remission only on the Mountain type, or on all the locomotives?
– On all of them. Wot one of these three types has ever been manufactured in Australia. Surely it has to be proved that they can be manufactured before it can be proved that they can be commercially manufactured. We must consider what the word “ commercially “ means, and I say that the difference of price in this case wa3 not a commercial difference. The Commonwealth Government should not load the State of South Australia with heavy tariff duties on locomotives of these types. This is purely a State concern, and it is not fair that the primary producer should be loaded with a heavy imposition of this kind, because, after all, he will be mainly hit by these duties. We are not entitled to load secondary and subsidiary interests on an important interest such as the State railways. I pointed out about a fortnight ago that State railways are experiencing great difficulty regarding transport generally. They have to be economically maintained, because of competition from motor and other independent traffic. I suggest to the Minister that this is not the time to deal to the Railway Departments, not only in South Australia, but also in Victoria, a shrewd blow by increasing the tariff, and forcing them to pay an additional duty without effecting the purpose which the Government has in view. The fact that the railway workshops in South Australia are being reconstructed to carry out the whole of that State’s railway works is sufficient guarantee of its bona fides in this matter. I wish it to be plainly understood that I am not speaking against private firms or against the work being carried out in Australia. Yet surely a young country like this should be prepared to learn as much as possible about engineering science in other countries! Some of these railway engines are the largest that have ever been produced outside of America. Their arrival in Australia is bound to cause great interest among railway authorities and engineers, probably even among the opposing tenderers, and sooner or later improvements will be made here based upon these importations.
– Why not import one engine of each type and manufacture our requirements here?
– I said before that these engines are not commercially manufactured in Australia.
– How long are the engines overdue?
– They have been delayed on account of the seamen’s strike.
– I do not know whether the honorable member for Wakefield (Mr. Foster) is right. All I know is that these engines were to have been delivered in Australia within twelve months of the time when the drawings were approved. They were due here in October, 1925, and they are, therefore, about six months overdue.
– ‘Does not the honorable member think that delivery within twelve months was impossible?
– I think that eighteen months is a great improvement on four years and eight months, particularly as the engines have arrived. If the Australian tender had been accepted, the period of delivery of these locomotives might have been exceeded.
– What will it cost to put them on rails?
– I cannot give the details of the cost of removing them from ship slings to rails. We should endeavour to> develop this country by obtaining the best standard of locomotives, so that it may be copied by our own engineers. I do not wish to discuss the general question of railway transport and what it involves. I suggest to honorable members that locomotive traction is of the highest importance to this country, and we should, therefore, not unduly tax a State for importing locomotives that cannot be manufactured here.
– These engines were purchased overseas in the face of public opinion.
– It would be interesting to hear the honorable member for Adelaide (Mr. Yates) trying to prove that these locomotives could have been commercially manufactured, or even manufactured at all in Australia; and that their arrival in Australia is not in the best interests of this country, and a step towards the reduction of the cost of production.
. - It has been truly said that the unexpected sometimes happens. Of course, the honorable member for Boothby (Mr. Duncan-Hughes) is clearly within his rights in bringing this matter before the committee; but, had he given me some notice of his intention to speak, I should have been able to enlighten him respecting some of the figures that he quoted. This has been a very trying question between the Department, and the South Australian Government. Of course, any State government, to safeguard the interests of the .people whom it represents, would wish to pay as little duty as possible on any of its requirements purchased abroad. About two years ago, the Chief Railways Commissioner of South Australia, who, as my honorable friend has said, is an American, placed an order, principally in America, for about £2,000,000 worth of railway material, most of which could have been made in South Australia. He did that with his eyes open. He placed orders, not only for locomotives, but for trucks, cranes, and other miscellaneous iron and steel goods. He understood the principle of the tariff and the attitude that the Government intended to take to protect local industries. I believe that out of his unpatriotic action arose a political crisis. Partly as the result of that action there was a change of government in South Australia.
– What nonsense !
– I have discussed this matter at various times with representative Adelaide citizens who ought to know, and I believe do know, the position, and that is their opinion. Let us, however, get away from the general, to the particular aspect of this question. A claim was made for a remission of duty, not only in respect of the locomotives, but in connexion with everything which the South Australian Railways Commissioners ordered from abroad. That claim - I speak from memory - amounted to about £600,000. After protracted negotiations the claim was abandoned, excepting insofar as it applied to the Mountain locomotives.
– That was simply due to the stubbornness of the Minister, who refused everything.
– The claim was re-, fused because the trucks and miscellaneous iron work could have been made in Australia. Locomotives are being built by various engineering firms, from Walker’s, of Maryborough, Queensland, to the Newport Workshops, in Victoria. Because of the strong action taken by the department in connexion with these locomotives, the Western Australian Government is now building its own locomotives.
– South Australia has built her own locomotives for the last 30 years.
– The application from South Australia for the remission of the bulk of the money paid as duty was refused. That action was consistent with the attitude adopted ever since I have been in charge of the department, and, I believe, previously also. The honorable member for Boothby (Mr. DuncanHughes) stressed his argument in favour of the remission of the duty on the Mountain type of locomotives. I am not in a position to say that they should, or should not, come under the general tariff. Pending an examination of the locomotives, to enable the department to judge whether a remission of duty is justified, the claim of the South Australian Railways Commissioners on these is being held in abeyance.
.- I want to correct the impression made by the Minister regarding the amount of money sent out of this country in connexion with the requirements of the South Australian Railways Department. I remind the committee that the new Chief Commissioner of Railways in South Australia is remodelling and bringing up to dato, not only the rolling-stock, but the railway workshops also. It is his intention to make the Islington workshops equal to the best in the world. Thank God he is absolutely free from political interference. Mr. Webb is determined to secure that efficiency which is so often prated about by the Minister, who, however, does nothing to secure it. I am sick of the attitude adopted by the present Minister for Trade and Customs. During the last seven or eight years the Australian farmer has received good prices for his wheat; but the day may again come when wheat will bring not more than 4s. per bushel. In that event, should the cost of production not have decreased in the meantime, it will not pay him to grow wheat, and railway efficiency will mean reduced transit charges. This question is one of great importance to those engaged in rural industries, and therefore I invite honorable members representing country constituencies to give it careful consideration. The Minister has been most unsympathetic towards our rural industries. No man who has presided over the Customs Department has been dreaded more in the rural districts of South Australia - I say that advisedly - than is the present Minister for Trade and Customs. I tell him that his chickens will come home to roost.
– In administering my department, I do not expect to please everybody ; and I do not intend to try.
– I am the last man who desires to be personal ; but there are times when by no other means can some people be made to see facts. The Chief Commissioner of Railways in South Australia believes that when the remodelling of the Islington workshops has been completed, they will be capable of building locomotives in competition with the rest of the world. The Minister should consider this question from that point of view. If it were not for the influence of three or four men in Sydney, he would not put the Government and every farmer’s representative in this chamber in the position in which he has placed them. ‘ I shall tell the committee why the Chief Railways Commissioner of South Australia went outside Australia for these locomotives. His desire was to obtain bigger engines, capable of hauling heavier train loads. The makers of railway locomotives in the United
Kingdom have for a long time been desirous of building locomotives of the type and size of those used in the United States of America. The Mountain locomotives ordered for the South Australian railways are the biggest which have ever been made in the United Kingdom ; the weight of the engine and tender is 218f tons. One Mountain locomotive will haul a load from Adelaide to Murray Bridge over the Mount Lofty ranges, with a grade of 1 in 40, in from 40 to 45 minutes’ less time than it now takes three RX engines to do the trip. That is efficiency. Instead of robbing Australia by importing these locomotives, the action of the Railways Commissioners there is bringing Australia to the forefront. If the Minister had his way he would, under the ordinary relief clauses, make it utterly impossible for Australia ever to come to the front.
– That is a most unfair statement in view of what I have said about the Mountain locomotives.
– I repeat that it is intended that the Islington workshops shall be equal to the best railway workshops in the world.
– What about the Pacific type of locomotive ?
– They could not be built here in less than four or five years. One of the officials of the South Australian Railways Department was sent specially to London to endeavour to get British manufacturers to tender for these locomotives.
– What was the value of the orders placed in the United States of America 1
– The materials ordered from the United States of America could have been made in Australia. I am not pleading for a remission of duty on them. Orders for rolling-stock were placed in America, because new rolling-stock was urgently required. The Chief Railways Commissioner was prepared to pay the extra duty to get early delivery.
– How long overdue were the locomotives?
– Not very long. In consequence of the up-to-date methods employed by the South Australian Railways Commissioner, and the use of the modern appliances at his disposal, the last two wheat crops in that State have been transported to the seaboard in a much shorter time than has hitherto been considered possible.
– What gross tonnage can a Mountain engine haul on a grade of 1 in 40 ?
– I cannot supply the right honorable member with that information, but tonnage hauled by the new locomotives will be three times greater than is possible with the engines now in use. Owing to the increased hauling capacity of the new engines, the South Australian Railways Department will be able to double the size of the trains. Moreover, owing to the efficient manner in which the railways are being conducted, they are now returning sufficient to pay full interest on the capital expenditure, whereas in previous years they have been able to show a return of approximately only 2 per cent.
– Then the new Commis sioner must be doing good work.
– He is. When the Islington workshops are equipped with modern plant which is to be installed, and other improvements are carried out, the results will be even better.
-Howcan that be so if the department has to meet such heavy expenditure in the form of import duties ?
– I ask honorable members representing farming constituencies if it is not a godsend to every farmer, not only in South Australia, but in the whole Commonwealth, to have such a capable man in control of a service which transports primary produce to the seaboard ? When the Islington workshops are fully equipped with the modern plant which is being installed, an additional 400 men will be engaged.
– That will not suit the honorable member for Wakefield. He has always been opposed to Islington.
– No. I have been opposed to the “ Weary Willies,” and I always shall be. The Chief Commissioner of Railways in Victoria is another very efficient officer. When men such as Mr. Clapp and Mr. Webb have been in Australia for seven or eight years, it will not be necessary to obtain the services of experts born and trained in other countries, as they will have trained others in efficient railway administration.
– The Chief Railways Commissioner in Victoria was born in Australia, and after spending some time in America returned to Australia.
– That may be so. I do not think Mr. Webb was born in America. Shortly after the Chief Victorian Railways Commissioner assumed control, he sent abroad three officers of the Victorian railway service to enable them to increase their knowledge of railway matters. When they returned, they reported that railway development in other countries, particularly in the United States of America, was due to the provision made for hauling big loads, in some cases up to 5,000 tons. In using locomotives of a heavier type provision has to be made for a larger clearance at railway stations, which cannot be economically done in Great Britain owing to the enormous cost involved in resuming land and purchasing buildings in the large centres. In America, however, it has been found practicable, with the result that larger locomotives are being employed, and the railway system generally has been made more efficient. There is no reason why we should not adopt the same policy in Australia. The Minister for Trade and Customs (Mr. Pratten) should appreciate the fact that Mr. Webb was responsible for the order for these locomotives being placed with Whitworth, Armstrong, and Company, of Great Britain, instead of with an American firm.
– Does not the honorable member understand that payment of duty on the Mountain engines is still an open question ?
Mr.FOSTER. - I know it is. It has been open for a long time. It is an open sore; in fact, it is a running wound. There is yet hope for the Minister for Trade and Customs.
– Not after the speech of the honorable member.
– I am endeavouring to lead the Minister on to the straight and narrow path. He is, however, endeavouring to crush Australia’s interests.
– Does the honorable member object to the action taken by the department in respect to railway trucks and workshop equipment?
– If the Minister will do what he ought to do in connexion with the Mountain and other engines, I shall offer no strong objection. The introduction of new engines of a superior type will lead to the greatest development in transport that Australia has ever known.
– A locomotive revolution.
– It will take a revolution to move the Minister.
– The New South Wales Government had to scrap some Baldwin locomotives imported from America.
– I know nothing of that. I trust Melbourne newspapers will publish the speech of the honorable member for Boothby (Mr. Duncan-Hughes), and particularly the opinions of British and other engineers.The action of the Minister is shortsighted, unpatriotic, unbusinesslike, and antediluvian.. He wishes to put this country in shackles and keep it in them. It is about time he awoke. The Railways Commissioner in South Australia is effecting a wonderful improvement in railway control.
– Becausea Labour Government in power is directing him.
– That is not so; he is working under an act which permits him to carry out his policy independent of political influence. He would not have undertaken the work if he had notbeen free to carry out the railway policy he thought best. He was responsible for stirring up the ‘’’ Weary Willies.”
– And he cleared out your martinets.
– Then he must he a good man. From an organizing point of view he is the most efficient railway official that South Australia has ever had, and the rank and file, from the smallest boys to the senior officials, realize that he will not do an injury to any one.
– He is injuring Australian industry.
– He is getting the best results.
– What does he think of the Minister for Trade and Customs?
– I do not know whether he has met the Minister.
– It will be an education to the Minister to meet him. I trust the Minister will visit South Australia and interview Mr. Webb.
– I shall be glad to see him if he comes to Melbourne.
– He will be here. I believe the Mountain, Mikado, and Pacific engines will meet with general approval, and., in consequence of the heavier loads they are able to haul, will prove of tremendous benefit to South Australia.
.- I shall not lash myself into the state of fury that the honorable member for Wakefield (Mr. Foster) was in; but shall, in a calm, dispassionate manner, endeavour to place before the committee facts concerning this matter which may be helpful to it in determining the equity of the proposal now before us. The whole of the story has not been told, either by the honorable member for Boothby (Mr. Duncan-Hughes) or the honorable member for Wakefield (Mr. Foster). When all the facts have been submitted, I think that honorable members will realize that if in obtaining these locomotives abroad an injustice has been done to the people of South Australia, a greater injustice has been done to the people of Australia generally. I propose to outline the circumstances that led to the ordering of the imported engines that the honorable member for Wakefield (Mr. Foster) has had so much to say about. It will then be seen that the blame for ordering them from abroad is attachable to the Bar well Liberal Government, which was defeated at the last election in that State. For some years prior to the advent of the present Labour Administration, the rollingstock of the State railways was totally neglected by successive Liberal governments: no new rolling-stock had been obtained. The Islington railway workshops were allowed to become full to the doors with locomotives, carriages, and trucks that needed attention, which the employees found it impossible to give.
– Some of the South Australian locomotives have been in use for 40 years.
– That is so. Notwithstanding that a specially appointed royal commission, as well as the Railways Standing Committee of the State Parliament, had recommended the government of that day to take action to put the rolling-stock into proper order, it was not done ; and the time canoe when responsible railway officers said that, unless something was done quickly, it would he impossible to cope with the wheat harvest traffic. That was the position when the present Chief Railways Commissioner, Mr. Webb, took charge. The honorable member for Wakefield extolled that gentleman until honorable members must have begun to think him a superman. I have no desire to detract from either his good qualities or his achievements; he is undoubtedly a capable officer; but 1 am quite sure that many Australians would be his equal, if not his superior, if they had had his opportunities. The Chief Mechanical Engineer of the South Australian Railway Department is an Australian, and has proved himself to be a valuable officer. To Mr. Webb’s credit, it must be said that he recognized, as soon as he acquainted himself with the South Australian conditions, that the railway service of the State was quite inadequate. He pointed out to the Premier of the day, Sir Henry Barwell, the urgent need for more locomotives at once to handle the wheat harvest traffic of the State. I believe that, Mr. Webb being well aware that locomotives of the type that he desired were obtainable at practically a moment’s notice from certain engineering firms in the United States of America, nine months was fixed as the maximum time for the preparation and return of tenders. This made it almost impossible for the Australian engineering firms to think of tendering. Ee put them in a difficulty also by providing that they must supply their own drawings and specifications, and that the successful tenderer must deliver the engines not later than twelve months after the acceptance of the tender. These were almost insuperable barriers to the local engineering firms; and they knew that they could not honestly undertake to deliver the engines within the time specified, even if they succeeded in obtaining the contract. It appeared that the American tenderers must secure the order : but it was a complete surprise when Messrs. Armstrong, Whitworth and Company, the famous British engineering firm, submitted such a low tender. Engineering business was slack in GreatBritain at the rime that the tenders were invited, and Messrs. Armstrong, Whitworth and Company, on that account, submitted a much lower price than they would have done in ordinary circumstances. They were practically without work for their employees at the time; they desired to keep their staff and organization intact, and they knew that they could begin constructing the locomotives immediately the order was received. That was not the case with such Australian engineering firms as Walker’s Limited, of Maryborough, Thompson and Company, of Castlemaine, the Clyde Engineering Works, the Newport Railway Workshops, and the Everleigh Workshops. But, notwithstanding all the circumstances in their favour, Messrs, Armstrong, Whitworth and Company found their immense and splendidly organized resources inadequate to build and deliver the engines within the contract time. It is, therefore, no disgrace to the Australian engineering firms that they felt themselves incapable of doing so.
– Can the honorable member say how far behind time the contractors are?
– The tender was accepted and the engines were ordered in October, 1924. They were due for delivery in October, 1925, but have not yet been delivered.
– According to the statement a railway man made to me, some of the engines are being assembled in the Islington workshops now.
– That is not so; they are at present alongside the wharf at Port Adelaide.
– The first consignment reached Port Adelaide on Sunday.
– That is correct.
– And only one enginetender had been put on the wharf yesterday.
– I do not think that a single locomotive has yet been taken from the ship. -The honorable member for Wakefield suggested that the sending of the contract for these locomotives out of Australia had not influenced the people at the last State election ; but I believe that that act of the Barwell Government had a great deal to do with its defeat at the polls.
– I think the honorable member will find it difficult to connect this matter with the item before the Chair.
– I am glad that the present government of South Australia is patriotic enough to place every order for railway requirements within Australia. I regret that the people of that State must suffer on account of the action of the Barwell Government, that was entirely responsible for the policy of the Railways Department of that State; not the Commissioner, he was responsible only for the general administration of that policy. It might be popular for an honorable member to ask that the duty be deferred; but fundamental principles must not be sacrificed. Every type of locomotive known to engineers can be manufactured within Australia, and true economy lies in encouraging local industries. The people of South Australia, having indicated that they desire that all goods ordered for the State services shall be of local manufacture, are bound to acknowledge the equity of the duty. The Minister has been generous in offering to defer, for the time being, the duty on the ten locomotives of the Mountain type, since no tender was submitted for them.
– ‘There was a tender, but a period of four years and eight months was required for delivery.
– The work could have been done by Perry’s, of South Australia ; Walker’s, of Queensland; Thompson’s, of Castlemaine; the Clyde Engineering Works, New South Wales, or the Newport Workshops, Victoria.
– Why did not those firms tender?
– I have already said that the time allowed for delivery was too limited. Even a well-organized firm like Armstrong, Whitworth and Company was unable to comply with the conditions imposed. I have inspected the Islington workshops, and when the re-organization has been completed they will represent the last word in engineering efficiency. I hope that those workshops will receive orders for all the railway requirements of South Australia. No doubt the impost on the imported locomotives will be found to be a heavy one; but I think that it is justified in pursuance of the policy of encouraging the granting of railway work to Australian workshops.
.- Rather than consider the errors of the past, we should accept the position as we find it. If I understand the honorable member for Hindmarsh (Mr. Makin) aright, his contention is that the Government that ordered the South Australian engines abroad has been punished by the people of that State by being hurled from office. South Australia now asks the Commonwealth Government to consider the position, not as it affects Australia, but as it affects one of the smaller States. I understand that Perry’s, a firm which tendered for the locomotives, required four and a half years in which to deliver them, and, apparently, that was considered too long a period. If other firms could have done the work, why did they not submit a conditional tender asking for a longer time for delivery? That is my answer to the honorable member. The question before the committee is whether South Australia has a just claim to relief from this duty. It has been pointed out that £3,500,000 out of the £5,000,000 voted for railway re-organization in South Australia has been spent within the State.
– The question is “That the item stand as printed.”
– Most honorable members have discussed the other question. The re-organization scheme in South Australia has already resulted in increased economy in the working of traffic, and the safety devices that have been introduced are considered by railway men to be of great benefit.
Sitting suspended from 6.30 to 8 p.m.
– The locomotives imported by the South Australian Government are fitted with electric headlights, an innovation which will provide safety for the travelling public, the staff, and persons crossing railway lines. As South Australia is not likely to obtain under this tariff anything like the benefits that are bound to accrue to the larger States, some consideration should be extended to it. These engines should, at least, be permitted to come in free of duty. Is it fair that the State Government should be called upon to carry the baby? The engines have already been delivered, and it will do no harm to any Australian factory if they are admitted free of duty. The new equipment to be installed at Islington will bring the workshops up to date and obviate any necessity for future importations of locomotives. These engines will be used as patterns for the construction of others. The honorable member for Boothby (Mr. Duncan-Hughes) has placed the position fairly and dispassionately before the committee, and I am sure that the people of South Australia can rely on getting the sympathy of the Minister in their application for help in this direction. Although the State is suffering disabilites, it has not asked the Commonwealth Government for much financial assistance, but it now asks for a little assistance in the remission of the duty on these locomotives. In regard to cotton tweeds, the Minister has directed that firm orders placed prior to a certain date, and landed within a reasonable time, shall be admitted free of duty, and I ask that the same consideration should be extended to these South Australian locomotives.. They were ordered before the new tariff was framed, and if the Minister cannot see his way clear to admit them free of duty, at least he might admit them under the rate in the old schedule.
. -When the honorable member for Hindmarsh (Mr. Makin) was dealing with the item under discussion, as it had already been dealt with by several honorable members on the Ministerial’ side,, the honorable member for Fawkner (Mr. Maxwell) asked him to say something about the schedule itself. The honorable member forgot that the three speakers on his own side of the chamber had said nothing about the schedule, but had contented themselves with pitiable pleas for South Australia. I suppose that I shall also be expected to say something to try to induce the Minister to meet the wishes of South Australia… I should have some justification in doing so, because, if the request I put forward were granted, it would relieve the present Labour Government in South Australia of an impost placed on it by the action of its predecessor in ordering these locomotives abroad, when, as the Minister has pointed out, it knew perfectly well that they would be subject to the payment of duty.
– But this is an increased duty.
– A claim for the remission of the extra duty might possibly be advanced, but the Government knew what it would have to expect.
– No; it expected to get the locomotives in under the concession provided for in the tariff.
– The Government which ordered these engines knew that the Commonwealth Parliament could take action at any time to protect the industries of Australia from the competition of goods manufactured in Great Britain under conditions brought about as the result of the war. We have not yet been told the full story of the ordering of these engines and workshops equipment. It was the policy of the then government of South Australia to import engines, and it should stand up to that policy without squealing.
– The tariff provided for a concession.
– When these engines were ordered abroad very little consideration was paid to the fact that the tariff provided for concessions. The order was placed abroad to give effect to the statement made by Sir Henry Barwell, who was then Premier. That Sir Henry Barwell was quite out of touch with the sentiment of the people of Australia has just been admitted by the honorable member for Angas (Mr. Parsons). The honorable member has just told us that the Barwell Government was sufficiently punished by being hurled from office, and so it was, for sending good Australian money out of Australia to assist the profiteers of other countries.
– It meant a saving to the people of South Australia of at least £130,000.
– As pointed out by the honorable member for Hindmarsh (Mr. Makin), that disparity might have been greater because of the circumstances of Great Britain after the war. The honorable member for Yarra (Mr. Scullin) has shown in regard to another item that the cost of labour and material in Australia is twice what it is in Great Britain. Wages in Great Britain after the war were exceptionally low, and in any case we do not know how much Belgian steel was used in the manufacture of these locomotives. On the ether hand, when goods are manufactured in Australia, we have an opportunity to see that we get full value forour money, and we can determine the conditions under which the work shall be done. Although it has been said that time was the essence of the contract in letting the tender for these locomotives in Great Britain, honorable members know that it was the fixed determinationof Sir Henry Barwell to buy these engines overseas. In fact, he fought an election on that issue, and was defeated. He was responsible for the statement prior to the election that wages in Australia would have to come down, and that hours of labour would have to be lengthened, so that our conditions could be brought more into conformity with those in Great Britain. The order for these locomotives was placed in Great Britain in order to reduce the amount of employment available in Australia, and thus bring about what Sir Henry Barwell and his friends would regard as a proper economic standard, which would enable locomotives ultimately to be manufactured in Australia at the cost at which they could be turned out in Great Britain. Prior to placing the order for these locomotives abroad, Sir Henry Barwell was approached by the secretary and the president of the Australian Industries Preservation League. He was told that if the South Australian Government accepted a tender from Australian manufacturers for the engines and the other material that could be manufactured in Australia, there would be no objection to the State Government getting a rebate of duty on articles that could not be made in Australia. I am informed that Sir Henry Barwell agreed to that proposal.
– I do not know anything about that, but he can deal with it in another place.
– That is something which has not yet come to the surface. In all probability Sir Henry Barwell will be asked if he did this. I am inclined to think he did it. If he had acted honourably, he would have given the contract to Australian manufacturers; but, instead of doing so, he gave it to manufacturers overseas. That is the history of the South Australian contract. The older countries of the world can out-manoeuvre us, because they have no arbitration courts to fix hours and wages, and they have a lower standard of living than we have. They are, also, probably greater cormorants for profits. Those who entered into the contract may be able to state a good case if they conceal the essential fact, that, in view of the lower price, it suited them to place the contract overseas. It was the settled policy of Sir Henry Barwell, if possible, to reduce wages, and he made an attempt to scrap the Arbitration Court.He is now famous for the statement he made at Victor Harbour, before he went to Great Britain and was made a knight, that we could develop the Northern Territory only by using black labour. He was opposed to a continuance of all the conditions that exist in Australia today, and would ruthlessly have altered them if the people had not stepped in between him and power, and relegated him to a place where he could no longer do any harm. We know of his subsequent passage from the State Parliament to the Senate of the Commonwealth Parliament. The honorable member for Wakefield waxed eloquent, but he did not deal with the item. I suggest to him. that he knows more about it than any other honorable member, as he was for some years the Commissioner of Public Works in South Australia. He had much to say about the Yankee who is at the head of the Islington workshops, but he failed to tell the committee that the reorganization of the railway service in South Australia was a matter for determination, not by Mr. Webb, but by the Government. It was the Government that decided what extensions should take place and what alterations should be made. Mr. Webb cannot take to himself one atom of credit, except for the carrying out of the scheme. He certainly gave his considered judgment regarding the ordering of the materials. There was a time when the Islington workshops were so well equipped that they could outstrip private manufacturers of locomotives, and it was because they were what they were that the desire developed, and was given effect to, to reduce them to a negligible out-of-date establishment. That was not done by the “ Weary Willies “ spoken of by the honorable member, but by the men who were paid high salaries to see that South Australia’s asset was kept up to date. The honorable member for Wakefield knows that before the advent of Mr. Webb, the Railways Standing Committee of South Australia recommended the sacking of Mr. Rushton, the highest man at Islington. He did not tell the story that should have been told of the re-organization of the factory. “When Tom Price was the Commissioner of Public Works, he demanded that everything should be done according to his ideas.” The plea was put forward, and to a certain extent succeeded, that the first manufacturers of railway engines in South Australia - Martin and Company, of Gawler - should be given preferential treatment. To enable that firm to compete with Islington, the Islington tenders were loaded by 10 per cent. The late Sir Richard Butler, who was a member of the Opposition, and represented Barossa, made the plea for Martin and Company. Those facts show that if we put a sufficiently substantial duty on these articles, we can manufacture them in Australia. The honorable member for Wakefield also said that “time is the essence of the contract,” and that the last two wheat harvests had been moved more quickly than previous harvests. That was done without a larger type of engine.
– There were larger trucks.
– But the honorable member for Wakefield admits that the trucks can be manufactured in Australia. The larger engines are not essential for the shifting of the harvest; it would have been shifted willy-nilly. Does the honorable member know that, according to the departmental regulation, no man can be taken on at the Islington workshops if he over 35 years of age? He may be taxed to maintain those shops, but he is not allowed to work for his State after he is 35 years of age.
– Not in a permanent position.
– He may be sucked, squeezed, and thrown away like an orange. That is good Americanism, but it is not good Australianism. This great man, who is managing the Islington workshops, is taking an attitude that has not previously been taken in South Australia. He is sacking men of 65 years of age, whereas the policy of previous Governments has been to put them off at 70 years of age. He is taking the cream of South Australia’s manhood, and, if he is allowed to do so, he will adopt every kind of Americanism and speed up until he will be able to say to any one who asks, “Where are the old men?” “You will find them in the West Terrace cemetery.” I am inclined to think that Australians will not support that sort of thing. Any industry run on those lines will accomplish what the honorable member for Wakefield says is being accomplished in South Australia. The appeal to the Minister to give way has come from the Ministerial side of the House. Those who made it know that it was their party in the State that brought about this result. The appeal would have come with more grace from me, in an attempt to assist the Government there; but the evil has been done so far as this type of engine is concerned. The Minister may agree to remit the duty, but I am glad that he does not intend to deal with the matter by rule of thumb just because the State Government has got into a bog. Perhaps the whole story of the engines has not yet been told. It frequently happens that all the profit of new inventions from abroad is absorbed in repairs and reconstructions within six months. That has often been the experience at Islington. Many of these imported wonders have hardly been on the road long enough to become acclimatized before they have had to be sent to Islington, where Australian mechanics have brought their ability to bear to correct the errors so dearly bought outside. It has been said that Islington can and will make these engines. If I am any judge, different ideas will have to permeate the management before that will be done.’ Mr. Webb will, no doubt, endeavour to enhance his reputation before he shakes the dust of Australia from his feet by making the workshops pay; but I can foresee that Governments will get into power that will not like the socialistic idea of the Islington workshops building locomotives cheaper than they can be built by firms outside. Up-to-date machinery is being installed to meet the requirements of the coming harvest. I suggest that half the order could have been placed in Great Brtain and America for the trucks, and that the harvest could still have been handled better than in the past. Until we give our people the opportunity to exploit their skill, ability, and initiative in invention, we cannot get the best out of the Australian nation. Members of the Country party ought to be the first to hail with delight anything that will encourage the inventive genius of Australians, because no body of men in this country has derived more advantage from Australian inventions than the farmer, who has had the benefit of the Australian inventions of agricultural machinery.
– The farmer has contributed his full quota.
– And he has also contributed to keep in power those who deprive him of the advantages he should have. The farmer does not obtain the advantage he would have if he was wise enough to shake off the incubus that exploits both him and the worker. It is only by imposing a substantial duty that we shall encourage manufactures in this country. Large establishments cannot profitably carry on if they manufacture only one article; they have to manufacture subsidiary lines. That is what I presume Armstrong-Whitworth’s did when they tendered for engines, for they are supposed to be armament makers. To “keep the pot boiling” they made our engines, while our engineers may go to the devil. If this kind of work was done in Australia we do not know how far the ramifications of it would extend, and what benefits would follow in ite train. Let me again refer to the match factory in Richmond. I urge honorable members to look at it. It is one of the best-equipped establishments south of the line, and it might serve as a pattern to other manufacturers. A visit to the machine shop at the factory will show that they are making there every one of the tools they require. At the present time they are making a duplicate of one of the most intricate machines I have ever seen. So that it is not only railway engines that will be made in railway workshops. When no railway engines are called for the shops will have to make something else, and in doing so opportunities will be afforded for developing the initiative and inventive genius of the Australian, and it is hard to say where the good results of this policy will stop. The honorable member for Macquarie (Mr. Manning) in a speech which he made last night, said he believed in a high tariff. He said there was an industry in his electorate that employed 3,000 men, and then he went on to sug gest that the Minister had a good reason for changing his mind, and he would, therefore, follow him in reducing a duty then under consideration.’ I believe that the Minister has been well advised concerning the items now under consideration, and has decided to recognize Australian sentiment, by accepting the fact which has been demonstrated by every division that has taken place on the tariff, that the people of Australia want protection, and desire that we should manufacture our own requirements. I consider the duty proposed on locomotive engines is just, and I intend to support it.
– I shall not take up very much time on this item. The discussion has developed into an appeal to the Minister by certain South Australian representatives who have expressed their views upon it. I wish briefly to reply to some statements made by the honorable member for Adelaide (Mr. Yates), and the honorable member for Hindmarsh (Mr. Makin). The decision arrived at by the Government then in power in South Australia, to which some honorable members havetaken exception, was made because a new Chief Railways Commissioner had been appointed for the definite purpose of reorganizing the whole railway system of the State. Had any other course been adopted than that of getting the locomotives required from abroad, it would not have been possible for the Railways Commissioner to carry out his scheme of re-organization as he is doing at present. If the order for the locomotives had been placed in Australia, some of them would not have been delivered for four or five years, and it is possible that the Commissioner’s term of office would have expired before he was able to bring his reorganization scheme into operation. Up to the present no amendment has been, moved upon the item, but I understand that the honorable member for Boothby (Mr. Duncan-Hughes) is prepared to move in the direction of restoring the British preferential duty to 27£ per cent., leaving the duties in the intermediate and general columns as they appear in this schedule. The discussion is futile unless some concrete proposal for amendment is submitted. I feel sure that the Minister, with the assistance of his department, will be prepared to give South Australia a fair deal in this matter. The whole of the people of that State would be served by saving the extra £40,000 which the increase in the duty on the engines referred to by the honorable member for Boothby would mean. If the honorable member submits such an amendment as he has suggested I shall very gladly give it my support.
.- In considering this very extraordinary increase in the duty on locomotives one can only conclude that the Minister has realized that it is impossible for him to force Australian Governments to purchase locomotives made in Australia unless he carries an increase in the duties. Several Governments, Labour and Liberal, have been compelled to order locomotives outside Australia. In Western Australia locomotives were wanted speedily to cope with a very big harvest. It was necessay that they should be delivered within twelve months from the time they were ordered. Only one tender for these locomotives was received from Australia, and that was from Thompson and Company, but they tendered conditionally upon their receiving the contract for the locomotives required for the Oodnadatta railway. The Western Australian Government had to get the locomotives from England, and by so doing, after paying an enormous amount in duty, saved the people from £18,000 to £20,000. The Government was justified in adopting this course, because it had to find the money. It is all very well for people who have no responsibility to argue that Australian locomotives should be purchased, no matter at what cost.
– It is cheaper to get them here, in view of the employment given to our own people.
– I am satisfied, from the speech made by the honorable member, that he thinks nothing should be imported from Britain. I differ from him. I should like to see many things imported from the Old Country. Honorable members should realize that expenditure upon railway locomotives is made from loan money, and Governments are eager to go to tie Old Country to obtain money.
– They are fools.
– It is only by borrowing abroad that we are able to show the prosperity which we do show here a* the present time. T direct attention the contract given by the Federal Government for locomotives for the Oodnadatta railway. Nothing more contemptible ever took place. Week after week articles were printed in prominent newspapers here denouncing the Government for daring for a moment to try to save some £60,000 of the people’s money by accepting a tender for the engines from the Old Country. The Government eventually accepted an Australian tender and paid over £60,000 more for “the locomotives than the price at which they could have obtained them from England. This excess expenditure is being paid for out of lean money, borrowed for railway construction which probably will never pay. Money at the time the loan was floated was at 6 per cent., and allowing 1 per cent, for sinking fund, the £60,000 would be paid off in .35 years. At compound interest, that amount will have increased to no Jess than £570,000 by the time the money is repaid, and that is really the extra cost which the people of this country will have to pay for having these engines manufactured here. Considering how much it costs to bring such heavy machinery as locomotives from Britain to this country, it must be conceded that the previous duty of 27^ per cent, on imports from that country gave our manufacturers ample protection to enable them to compete with the Old Country. It should be remembered that if the duty is fixed at 40 per cent., it means about 44 per cent, under the Customs Department’s method of assessment. No justification has been shown for the enormous increase in these duties. I hope the honorable member for Boothby (Mr. DuncanHughes) will move to restore the duty on imports from Britain to 27^ per cent., and that the committee will divide on the amendment, so that the division list will show who are prepared to sacrifice the people’s money in the way suggested by some who have taken part in this debate.
– T hope the Minister will not yield to the representations of certain South Australian representatives. After all, South Australia is paying the price of antiAustralian action by an anti-Australian Government. Some honorable members :seem to forget that it is the duty ©f this Parliament to give protection to industries isa Australia, regardless of State party interests. This Parliament will be worse than useless if in the determination of Customs duties it is going to take into consideration the political expediencies of State Governments. The honorable member for Swan (Mr. Gregory) has suggested that a duty of 27½ per cent. on British imports under this item wouldbe adequate, and I understand that the honorable member for Boothby (Mr. DuncanHughes) intends to move an amendment on those lines. I hope the amendment will not be pressed, because the evidence given to the Tariff Board proves conclusively that such a duty is hopelessly inadequate. A duty of 27½ per cent. on British locomotives means the absolute destruction of the locomotive construction industry in Australia.
Mr.Killen. - What about the natural protection?
– There is no natural protection other than the freight of 6 per cent. There can be said to be no natural protection when it is possible to find governments so bereft of any sense of patriotic duty as to send their orders abroad, and allow their own workpeople to starve. From the evidence collected by the Tariff Board in support of the increased rates set out in the schedule, it is shown that the wages of the Australian artisan engaged in locomotive building are more than twice those of British artisans. The price paid by the New South Wales Railways Commissioners for each of the large locomotives now used on the Sydney to Melbourne express, and which were built by the Clyde Engineering Co., whose shops are in my electorate, was £12,000. I referred to the figures in the general debate on the Tariff. I pointed out that on the evidence put before the Tariff Board, of thecost of £12,000, the amount involved in the payment of labour was £7,200, and the cost of material £4,800. Labour represented 60 per cent. of the total constructional cost of the locomotive. In England, the wages costs amount to £3,600, as compared with £7,200 in Australia. These figures show clearly that if the rate of duty proposed by the honorable member for Boothby is accepted, it will mean ‘the closing down throughout Australia of locomotive works that are at present employing thousands of hands directly in locomotive construction, and many thousands more who are indirectly dependent upon the maintenance of this industry. Have honorable members who make these proposals no regard for the defence of Australia, and the need for maintaining the employment of skilled artisans whose services would be necessary for the manufacture of munitions in the event of war? It has been contended that we should not lessen the preference that is given to Great Britain. Under the old schedule the preference will be altogether inadequate if regard be paid to the representations that were made in a letter which was sent to honorable members of this House by the British Association of Manufacturers. The position, as there set out, would appear to demand a considerably greater degree of preference, because German, Italian, and other foreign locomotive works are able to undercut British rates. In the tenders submitted for locomotives that were required for India, the British prices ranged from £3,400 to £5,332. The German price was £2,320 - 46 per cent. below the British. Consequently, if we are to give adequate preference to Great Britain, the difference between the duty on its product and on that of foreign countries, will have to be 80 per cent. or 90 per cent. In the light of the low wages and depreciated currencies of foreign countries, it is preposterous to suggest that the rate of duty proposed is excessive. Last year tenders were invited for locomotives by the New South Wales Railways Commissioners. According to evidence that was given before the Tariff Board the lowest Australian price was £12,000. That was the tender of the Clyde Engineering Company, and it was accepted by a Government that had some sense of its responsibility to its own citizens. The British price was £10,045, the difference between the two practically representing the difference in the wage costs of the two countries. The Hanover Engineering Company, of Germany, tendered at £6,089, landed without payment of duty. There was also a quotation from an Italian firm, amounting to £7,212, duty paid. If honorable members opposite wish to raise the issue that the proposed duty will penalise the States and add to their indebtedness, why do they not throw off the mask of hypocrisy and say, “ Let us have Italian or German engines, and thus still further reduce the burden of indebtedness.” If cheapness is to be the standard of national honour and patriotism, why not take the ‘^cheapest article that is offering? I, as an Australian who wants to see this country economically self-contained, believe that we should have our locomotives constructed in Australia. A reversion to the old schedule, as suggested by the honorable member for Boothby (Mr DuncanHughes) would not assist the British manufacturer, but we should thereby destroy the Australian locomotive industry. The South Australian Government that ordered these locomotives was defeated at a subsequent election because of that iniquity. I hope that the Minister will not remit a duty in the case of any government or municipal body which is prepared to allow an Australian industry to suffer in order that it may import goods at a cheap rate from abroad. The figures which were given before the Tariff Board in relation to locomotive construction are so conclusive that I cannot understand any honorable member having the temerity to suggest that the present schedule is excessive. If that contention can be upheld it must folio v that in every particular the schedule is excessive, because equally high duties are provided in respect to various other items. The honorable member for Wakefield (Mr. Foster) proudly referred to the magnificent locomotive that .is produced in England, and said that a similar locomotive could not be produced in Australia. 1 tell him that the Clyde Enginering Company is producing one of the finest locomotives in the world. It has a weight of 120 tons, and possesses greater haulage power than two of the ordinary locomotives that at one time conveyed the express from Sydney to Albury. It is able to carry a sufficient quantity of coal to complete that journey without re-coaling. I back it against any locomotive in Australia. It has been tested by the New South Wales Railways Commissioners, and has shown its ability to attain a speed of 76 miles an hour. All the secondary industries that are directly or indirectly affected by locomotive construction are benefiting as the result of the policy of the New South Wales Government in having its railway construction work carried out within its own State. From the stand-point of efficiency, cost, value, or economic necessity, it is to the advantage of Australia to give the maximum degree of protection to the locomotive construction industry. I hope that the honorable member for Boothby will not persist with his proposed amendment, particularly in view of the fact that the people of South Australia endorsed the opposition of the Labour party to the action of the previous government in placing abroad the order for these locomotives.
– The honorable member for Reid (Mr. Coleman) adopts strange methods to induce one to desist from a contemplated action. He has accused us of hypocrisy, and has suggested that the amendment that I forecast might as well be made, so that we could obtain as many foreign locomotives as possible. On this point I shall say something later. I wish to dissociate myself from the remarks of the honorable member for Wakefield (Mr. Foster) in regard to the Minister (Mr. Pratten). That honorable member has a very kind heart, and I am perfectly sure that for the moment he allowed himself to be carried away by his feelings. I have always found the Minister very courteous, and I make no personal attack upon him. At the same time I am disappointed with his reply to the case that I brought forward this afternoon. He devoted some time to the discussion of the purchase of cars that were ordered from the United States of America by the South Australian Railways Commissioner. That had nothing whatever to do with this matter, and it could have been brought into the discussion for no other purpose than to create a prejudice in the minds of honorable members j and I am regretfully forced to the conclusion that the Minister himself must be biased. He ought to have attempted to deal with the highly important point, what is meant by the words “commercially manufactured “ ? He made no such attempt. This afternoon I may unintentionally have misled the committee. At the time, by a temporary oversight, I was under the impression - which I may have conveyed to the committee - that there was not in the Commonwealth an establishment which was properly equipped to manufacture these locomotives. I have since recollected that there are two government establishments that are in a position to turn out this class of work - the Eveleigh Workshops in New South Wales, and the Newport Workshops in Victoria. The Minister has expressed a willingness to consider the remission of the duty upon the Mountain type of engine. He should also consider the merits of the claim that the duty on the whole of these 30 engines should be remitted. The loss to the State because of the extra duty on the Mountain type is over £16,000. I might show wisdom if I clutched at the opportunity presented by the Minister to have a certain portion of the duty remitted, but I do not propose to take that course. Speaking on the general principles of the tariff, I said - and I repeated the statement this afternoon - that this question applies to a wider area than any one State. I used South Australia as an illustration, not with the desire to obtain a remission of duty in favour of that State, but to show that this item constitutes a very severe attack upon the whole of our State railway systems. I cannot read into it any other meaning. The State railway authorities are the only people who are concerned in the purchase of locomotives. Fulfilling the expectations of the honorable member for Reid, I move -
That the itembe amended by inserting the following words after a (2) : -
And on and after 26th March, 1926, ad val., 27½ per cent., British; 50 per cent., intermediate; 55 per cent., general.
With regard to the contention of the honorable member for Reid that a duty of 27½ per cent. will render it impossible for local factories to continue their operations, I can only say that they have managed to carry on up to the present. It is strange that they should now find it absolutely essential to have a higher duty. The honorable member also suggested that any one who advocated a substantial preference for Great Britain over the rest of the world had a foreign outlook. I heard that statement time after time during the debate on the tariff. The fact that in my amendment I do not propose to lower the intermediate and general rates set out in the schedule is a sufficient answer to that charge. The honorable member for Reid may derive some consolation from the fact that I feel perfectly sure he will have a majority of honorable members on his side.
. -I support the amendment. The honorable member for Yarra (Mr. Scullin) said a great deal about road rollers, and produced a photograph of one that could be manufactured in Australia. One firm has produced a roller, and is constructing two others. Another firm is making an internal combustion road roller, but this is not likely to be as successful on country roads as is a steam roller. In placing high duties on these machines the Government is most inconsistent. Through the Customs Department it is collecting millions of pounds from the people, and some of that money is being handed to the States for the making of roads. Rollers are purchased almost exclusively by Government departments and municipalities, and by imposing high duties upon them the Government is recovering portion of the money it is paying out for the construction of roads. In other words, it is making more expensive the carrying out of works with the money it provides. The f.o.b. price of an English road roller is £700. Under the 3921 tariff it was subject to a duty of £212, to which must be added charges for freight, packing, wharfage, insurance, and exchange, representing another £200, thus giving to the Australian manufacturer an effective protection of over £400 on a £700 machine.- Under the increased impost proposed in this schedule, the duty on that roller will be £308, making, with the various charges, a total protection of £500. If Australian establishments cannot compete when they have an advantage of over £400 in respect of a machine costing £700 in England, they should not attempt to make it in Australia. The 1921 rate of duty should be ample.
Question - That the amendment be agreed to- put. The committee divided.
Majority … … 25
Question so resolved in the negative.
Item agreed to.
Item 178 agreed to.
.- I cannot allow this item to pass without drawing attention to the serious effect the proposed duties will have on the industrial life of Australia. For a long time Ministers and other public men have emphasized the necessity for developing electrical resources and ensuring cheaper and more efficient distribution of power. Schemes for this purpose are prominently before the people of the United Kingdom, and we have repeatedly expressed our intention to follow the lead of the Mother Country, and install great electrical plants which will readily supply cheap power to all parts of the country, thus improving its productive capacity. In Victoria and Tasmania huge sums have been already expended upon such schemes, and I understand that at the present time experts are making a survey of the electrical resources of the Commonwealth.
While Ministers are advocating these developments, this schedule is creating obstacles to that cheap and efficient distribution of electricity which is essential if great power schemes are to be successful. On every land of electrical machinery and’ gear very high prices are being imposed. I submit that by imposing these duties the Government is doing something contrary to the general principles that it has enunciated regarding the establishment of cheap electrical power in this country. This tariff, which will be reflected in the high cost of the requirements of the consumers, will create difficulties in bringing cheap power to the point at which it is supplied. I intend not to make a long speech on this matter, but simply to draw the attention of this committee, and of the Government, to a very important pronouncement which was recently made on this subject by the gentleman who has recently been appointed by the Government as Chairman of the Advisory Committee of the Institute of Science and. Industry. I refer to Mr. G. A. Julius, B.Sc, B.E., M.I.E. Aust., electricity expert, of Sydney. He is well known throughout Australia for his exceptional ability and knowledge of this subject. He is an entirely unbiased authority, being a public consultant on electrical matters. So far as I know, he is not connected in any way with the manufacturing industry, or with any other industry whose particular interest may be to obtain reductions of the tariff. Mr. Julius, as the president of the Institution of Engineers, delivered a most important address at a meeting of that institution held at Hobart on the 18th February last. That address was one of the most noteworthy pronouncements which has been made on a technical subject in Australia for many years, and I urge every member of this committee, and certainly every member of the Government, to read and study it most carefully. The title of the address is, “ Australian made.” Mr. Julius was born in New Zealand, but he has spent all his life in Australia, and is as much interested in the advancement of this country as any one of us. During his address he dealt with electrical power installation and distribution in different parts of the world, and he compared our conditions with those of America and Great Britain. Among other matters, he dealt with the relative lack of electrical power available to our Australian workmen, a subject which has been particularly mentioned by the right honorable member for North Sydney (Mr. Hughes). In his address Mr. Julius draws attention to the absolute necessity of cheapand efficient appliances at the distributing end of electrical schemes, and points out the difficulties existing in Australia which prevent us from obtainingthese appliances. His conclusions read as follow : -
A careful study of the foregoing data must, I think lead one to certain very definite conclusions, as follow: -
The vital factor in the efficient development of industry, whether primary or secondary, is the provision of “ power “ at the lowest possible cost. And by the word “ power “ I mean, not merely the supply of electrical energy at the switch, but also the wholeof the apparatus that has to he installed by the user of power to enable him to use it effectively in his manufacturing processes.
Attention has, in the past, largely been focussed, in Australia at least, upon means for providing an adequate and cheap supply of electricity. And in this connexion mention should be made of the special work initiated by the Commonwealth Government, and resulting in the formation of the Power Survey Sectional Committee of the Standards Association, whose function it is to take stock and to programme in the matter of power generation. Very little thought appears to have been given to what, I believe,is a more important factor, namely, the supply to the user, at the lowest possible cost, of the apparatus that is to enable him to use this power.
We have spent, and are still spending, very large sums of money in the development of power schemes, and in the installation of plant for the generation of power; but, on the other hand, in failing to assist and encourage manufacturers, householders, and the public generally to use electricity, we are robbing these power stations of all chance of adequate success.
The United States are paying the highest “ real wages “ in the history of industry, but this standard has been reached only because the individual productivity of those engaged in industry has increased to such an extent as to allow, quite properly, of a more than corresponding increase in wages.
Great Britain is still paying low wages, but there is every indication that she is now realizing that only through the provision of an adequate power supply can she hope to regain her position in industry, and pay herwageearners a wage commensurate with the work that they are doing.
Australia, on the other hand, had raised her wages in industry to a point almost as high as that ruling in the United States, but has done it without any corresponding improvement in productivity to warrant the rise; in fact, due to shortage of power, shorter hours ofwork, and a variety of other reasons, individual productivity has, on the average, steadily fallen during the past twenty years.
In other words, Australia, living largely on borrowed money and inflated wool values, is in an unhealthy condition, and one that cannot long continue. Experience the world over shows that we cannot pay high “ real wages “ unless at the same time we achieve high individual productivity.
No sane man wishes to see “ real wages “ lowered, nor wants any wage-earner to exert unduemuscular effort in his work, when obviously such effort could be reduced by an adequate provision of mechanical power.
So intimately associated with industrial success and efficiency is this question of adequate power supply that it is essential that every barrier, artificial or otherwise, that tends to restrict the application of “ power “ should be removed if success is to be obtained.
The manufacture of electrical apparatus in this country can never be worth while until a real demand has been created for such apparatus, and this demand can never be created unless the material is available to the public at a reasonable price.
The tariff designed to encourage the manufacturer of electrical apparatus has lamentably failed in its purpose, in that, although it has assured to the local manufacturer a high price for his product, it has, at the same time, largely killed the demand for such equipment, or, at leasthas very greatly reduced it. It has largely resulted in the development of a very great number of small and inefficient establishments, with the consequent lowering of individual productivity.
The continued starting up of this host of “ back-yard “ factories - for that is what they really are - for the manufacture of products vital to our industrial development is unhealthy, and can never lead to success. Such organizations can rarely produce anything economically, and each one that starts represents a further “ leak “ in our relatively small “ reservoir “ of labour.
That is a very weighty pronouncement, and has a direct bearing upon the item under discussion, which covers a large assortment of the class of electrical appliances to which Mr. Julius refers in his address. His opinion is entirely contrary to the principle of imposing heavy duties upon electrical material. It would be well for the committee to consider these facts. I hope that honorable members will not agree to the enormous increase of duty under this item.
.- During the tariff discussion I have endeavoured to strain a point to support the Minister in passing this schedule, but having arrived at the items relating to machinery, I find myself no longer able to support his proposals. In connexion with this particular item, which includes dynamos and other electrical equipment, I find that the original duties of 27½ per cent., 35 per cent., and 40 per cent. are proposed to be increased to 45 per cent., 55 per cent., and 60 per cent. An analysis of the Customs revenue figures discloses the fact that since 1907 the total duty paid on electrical appliances, exclusive of wires and cables, amounted to £6,500,000. Of course, it is obvious that at the beginning of that period the amount of duty collected would be comparatively small. The interest and sinking fund payment on £6,500,000 at the rate of 10 per cent. per annum means that Australia is carrying an annual burden of £650,000 in respect of duties already paid. This burden is increasing annually at the rate of £85,000, and will soon reach £1,000,000. Under this item we are seeking to increase that amount. Most electrical enterprises are run on borrowed money, and we can realize what it means to Australia to have to provide such an enormous amount of interest and sinking fund on the additional overhead charges brought about by this immense taxation. In 1923-4, the duty paid on electrical appliances was £859,000; and in 1921, £933,000. The figures are enormous. The total cost to Australia of duty and wages per employee engaged in this particular industry, if the duty as well as wages is averaged among all the employees engaged in this industry, amounts to £521, whereas the value added per employee by the manufacturing process is equal to only £243. We are, therefore, faced with the fact that the taxation imposed to support this industry is far in excess of the actual wealth produced by the industry. Such a position is obviously economically unsound. It really means that the taxpayers of this country would be taxed at a lower rate if we were to pension off at full rates of wages every one engaged in this industry, and if, in addition, we paid from the Treasury, interest on the capital invested. The taxation to support this industry is far. in excess of the entire wealth it produces. The facts which I have quoted are bad enough; but when we realize that this taxation retards the introduction of power into other industries, and delays our progress, the position is worse still. Not only is this taxation harmful to industries requiring power, but it has been shown tobe also almost useless to those industries which are producing the equipment, and which it is supposed to benefit. I shall quote some extracts from the presidential address of Mr. Julius, delivered at Hobart to the Institution of Engineers, to which the honorable member for Perth (Mr. Mann) has already referred. Mr. Julius has recently been appointed by the Government as chairman of the Advisory Committee of the Institute of Science and Industry, so that his remarks are of especial interest. Mr. Julius said -
After almost 25 years of inducement, the sole response has been the establishment of relatively few factories, the majority of which employ less than four hands, the whole of them employing less than 3,000 hands, and the total investment in plant and machinery is less than £250,000.
It may be suggested that an industry which employs 3,000 hands, and has a capital of £250,000, has attained some magnitude; but when we realize that it is costing us nearly £1,000,000 per annumin taxation to enable that industry to continue, the fallacy of the contention will be seen. The position is almost the same as that of a man who invests £10,000 in a farm and equipment, but who finds it necessary to tax some one else to the extent of £30,000 or £40,000 per annum to enable him to carry on. Mr. Julius continued -
On the other hand, because of the Customs duties that have been imposed to encourage this industry, the usefulness, earning capacity, and “ ability to serve “ of the light and power industry have been seriously prejudiced; and industry founded on mostly borrowed capital - all of which must be repaid out of earnings - of which nearly £17,000,000 has been invested in plant and machinery. It would almost appear that the minor interest has completely obscured the major. It is clear, then, that four effects of the tariff, so far as it applies to electrical appliances, are as follow: -
By making prices excessive, it has discouraged an adequate use of power equipment, thus restricting the wealth-producing capacity of industry generally.
It has made power unduly expensive, thereby reducing the amount of net wealth produced per annum, with consequent loss of added value.
The power systems have been prevented from developing the domestic appliance load, which would have improved their load factor and made possible a reduction in charges.
The community has been forced to do without many electric labour-saving devices. Improved’ methods of carrying out the daily routine tasks of the home, which are commonplace abroad, have been rendered unavailable to the majority of our people.
Many people in this country are unable to pay for domestic help. Those who are able to do so are probably also in the position to pay for the labour-saving electrical appliances of which I have been speaking. Some people can afford both; but by far the greater number are unable to pay either for domestic help or for electrical labour-saving devices. By reason of these high duties on electrical appliances they are denied the mechanical help which the womenfolk of other countries enjoy. Without desiring to weary the committee, I should like to read some further extracts from the address of Mr. Julius -
Summing up the position in regard to electrical manufacturing, we appear to have two courses open to us, and we must choose one of them -
Either to retain the high protective tariff, which has failed to provide any real assistance to the electrical manufacturing industry, and which will certainly continue to restrict the wealth-producing capacity of every industry, or
Remove all duties on electrical apparatus, and either compensate those factories which may be adversely affected, or encourage by bounty payments those factories which are producing so necessary a commodity in adequate quantity and in an efficient manner.
Regarding the proposal for the payment of a bounty for this industry, Mr. Julius said -
Such a proposal for electrical manufactures is unusual, but it must be admitted that our present system of encouragement by means of a high duty has largely failed of its main purpose, and has certainly retarded our general development. This appears more clearly, and what we are losing can be more fully appreciated when it is realized that due to the relatively small amount of horse-power available great numbers of our factory operatives are producing what are practically the products of hand labour, when they could be turning out many more articles of a higher average quality and at a cheaper price, machine made. In the light of all the facts, I believe that a bounty system offers both the most economical and the most effective solution of the problem, accompanied, of course, by a complete removal of all duties on essential electrical apparatus and material.
I remind honorable members that those are the remarks of the man who has recently been chosen by the Government to fill an important post, and from whom great things are expected. I take this opportunity of congratulating the Government on having obtained the services of a man of such calibre for the position of chairman of the Advisory Committee of the Institute of Science and Industry.
Let me quote one further extract from the address by Mr. Julius -
In America the electric power station is now regarded as the heart of the national structure of prosperity. In a few years that country has nearly trebled its utilization of electrical power. This has enabled wages to increase faster than the cost of living, so that the workers are receiving the highest “real wages” ever paid in history. Larger possibilities of comfort and enjoyment are opening up for every fireside, and the opportunities for intellectual development are extending to a rapidly widening circle. This is the happy human result of the electrical revolution for which the early years of the twentieth century will alwaysbe notable. In Australia we have our opportunity tobroaden the lives of 6,000,000 people, and the privilege, if we are to grasp it, of offering a brighter home to many more millions of our kinsmen from overseas. But in our zeal, we have actually erected high barriers which have kept us to the old narrow ways. Now, however, the insistent demand of our people for a larger life and the pressure of world affairs from outside are both joining to force us to decide on some more adequate policy. Expressed in the simplest terms, the widespread prosperity ruling in the United States of America to-day is due in a great measure to the large use they have made of their resources in coal and water power, and to the intensive utilization of the energy developed therefrom. In Australia we likewise have coal without limit, and some water power. Is it reasonable that we should continue to deny ourselves the advantage of these heaven-sent gifts while we pursue the last detail of a policy admirable in many ways,but which experience has shown tobe wasteful and dangerous in respect of this allimportant detail?
In the light of the facts disclosed, I submit that to perpetuate the existing paradox by levying on the people of Australia taxation many times greater than the total capital invested in an industry in order to assist that industry, is absolutely indefensible. The Minister, as a business man, surely must realize that it is an economic fallacy to continue to tax the community to the extent of £1,000,000 per annum to support an industry in which the capital invested in plant and machinery is about one-fourth of that sum. I therefore move -
That the item be postponed.
I take this course in order that the Minister and the Government may consider the advice tendered by Mr. Julius, in whose opinion the proper way to assist this secondary industry is by means of a bounty. While I believe that this industry should be assisted, I consider that there are other ways of assisting it than by the imposition of high duties. If one industry stands out more than an other as being suitable for protection by means of a bounty rather than by a tariff, it is the industry which produces electrical appliances.
Mr.RODGERS (Wannon) [9.43].- I desire to direct the attention of the committee to what appears to be an anomaly, so far as dynamos and magnetos, dealt with in item 179d, are concerned. The last Hughes Government, of which I had the honour of being a member, removed the duties on tractors used in agriculture, and substituted the payment of a bounty to the Australian manufacturer. That was done in order that there should be no unnecessary impost upon agriculture. The policy was approved throughout the country. I hope that the day is not far distant when we shall be able to manufacture all the tractors that we need.
– Are magnetos manufactured here?
– So far as I know, dynamos and magnetos of the type required for this class of machinery are not made here. If the Minister can assure me that they are, then he need not give any consideration to what I have to say. The majority of tractors; and motor cars imported have battery ignition, which, in the rural districts, is not nearly as satisfactory as the magneto ignition, particularly in the rush periods of the year when tractors are used in agricultural work throughout the night. I have in my mind at present the case of a farmer adjoining my own property who, with the assistance of his sons, worked his tractor throughout the night, and placed 700 acres under crop last year at the most suitable period for seeding and germination, and, as a result, an excellent crop was obtained. Some of his neighbours slogged away at their work until there was a heavy downpour of rain, but the germination was poor and the crop unsatisfactory. Under the modern methods of rushing in a crop at a suitable period for germination, it is of great importance that the most modern equipment for lighting and ensuring regularity of work shall be available. Unfortunately, farmers have had considerable trouble with imported tractors which only recently has been partially overcome. In the event of the user of a tractor desiring to transfer from the battery to the magneto ignition he has to bear an impost to which Parliament never intended he should be subjected. If the batteries and magnetos come in attached to the tractor they are admitted free of duty, but if separate they are dutiable. Some big factories prefer to manufacture tractors equipped with the battery ignition. Of course it is lower in cost; but the anomaly I have mentioned is one which I hope will be removed. Most of the tractors imported are, I regret to say, of foreign manufacture, and sufficient importations are not coming from Great Britain. We certainly do not manufacture enough in Australia. Will the Minister remove this anomaly and permit the work of conversion to be done in Australia, where certain equipment will be manufactured, Australian materials used, and Australian labour employed? By doing so those who desire to change from thebattery to the magneto system of ignition will be placed on the same footing as those who obtained their machines in the first place equipped with magneto ignition.
– What is the duty on magnetos?
– Sixty per cent., general. So far as I can see, it will not be necessary to amend the item or to include a new one. I hope the Minister can assure me that the proposed amendment of item 174 will give him discretionary power, as I think it will, to permit dynamos to come in duty free where they are not going into what may be termed commercial use, but go straight to the tractor or other motor vehicle. If it will, local industry will not be interfered with. During the time I was associated with the Customs Department, this duty was removed, and, if the Minister consents to my request, it will be of tremendous benefit to those engaged in rural pursuits who are having considerable trouble with tractors equipped only with the battery ignition.
– The honorable member for Wannon (Mr. Rodgers) has referred to what is possibly an anomaly in the tariff, and which, I think, in fairness to every one concerned, should be rectified. I understand his point is that batteries and magnetos coming in attached are not charged extra duty, as they are part of the machine.
– But if they come in separately they are dutiable.
– The same applies also to internal combustion engines.
– Yes, but I am now dealing only with the general principle. If these articles are not commercially produced in Australia, and if they are “ manuf actures of metals,” as I believe they are, I can give the honorable member an assurance that, subject to these conditions, the new item 174 will cover the anomaly.
– I thank the Minister.
– Can the Minister give an interpretation of “ commercially produced in Australia “ ?
– Commercially produced means that articles are not being manufactured experimentally, but are being made and sold here.
.- I have no apology to offer for voting as I did on the item in which locomotives are included, because I know that locomotives are being commercially manufactured in Australia. In this item provision is made for an increase in duty on dynamo electrical machines of a class and kind not at present commercially manufactured in the Commonwealth. I cannot see how even a high protectionist can advocate a duty on something which is not manufactured in Australia. In the second place provision is made for an unjustifiable increase if such dynamos and electric machines are being manufactured in the Commonwealth. These dynamo electric machines are being brought very extensively into use in mining operations. I understand that the following are not commercially manufactured in the Commonwealth : - Generators of all types, direct current motors (excluding traction), synchronous motors, synchronous induction motors, high voltage motors, induction motors over 100 horse-power. These machines are not obtainable commercially from Australian engineers, either for the reason that their manufacture has not been attempted in Australia, or that they cannot be produced here as yet on a commercial basis. The result of the increased duties will be that throughout the
Commonwealth municipalities, shires, industries, and public undertakings, such as tramways, railways, and Yallourn undertakings will be forced to pay an increased price for their machinery, with a corresponding increase to the consumer, in the price of electricity. Such increase, while hampering the progress of Australia, will in no way benefit Australian industries. In fact, to the majority of such industries it will represent a most harmful and unnecessary hardship. In view of this it is contended that the increased duty on. the dynamo electric machines is unjustifiable and unnecessary. One item provides a duty of 45 per cent, from the United Kingdom, and 60 per cent, foreign, on dynamo electric machines up to and including 75 k.w., which approximately is equivalent to 100 horse-power. These, I understand, are manufactured in Australia, but we shall see under what conditions. When Messrs. Parkinson (Australia) Limited, practically the only producers of alternating current induction motors in Australia, made applica-. tion to the Tariff Board for an increased duty on induction motors, they claimed to be able to commercially produce such motors up to 100 horse-power, and to further protect their industry, they requested a duty of 35 per cent, on motors from the United Kingdom. The rate has been increased to 45 per cent, on such motors, although the applicants, who should naturally be relied upon not to understate their case, considered that 35 per cent, protection was ample.
– On whose authority is the honorable member making that statement ?
– On the authority of the Chamber of Mines in Western Australia. I have further information on this subject, but as I do not wish to delay the committee, I shall content myself by asking the Minister to give consideration to the matter I have brought under his notice.
Item agreed to.
Items 180 to 206 agreed to.
. Anchors exceeding 168 lb. in weight under this new item are dutiable at 10 per cent, general tariff, and if imported from Britain are free. On. the other hand, those less than 168 lb. in weight are dutiable at 35 per cent. British. I understand that anchors of less than 168 lb. are used by hundreds of luggers engaged in the pearling industry in Western Australia, and I have no doubt that they are used on many small boats right round the Australian coast. . I should like the Minister to inform me, if he can do so, of the number of firms that manufacture these anchors, the number of men employed in the industry, and the value of the output. We should have definite information to justify us in ratifying the increased rates, for it would be unfair to place an unnecessary burden upon the persons who are obliged to use the anchors. It must be remembered that the loss of an anchor in inclement weather is not at all a rare occurrence. I understand that lugger chains are to be brought in free under item 174, so long as they are not manufactured in Australia.
.- The increase in the duty on anchors not exceeding 168 lb. has been made because similar anchors are being manufactured in Australia. If they should cease to be made here, similar anchors imported from Great Britain will be brought in free under item 174. The honorable member for Kalgoorlie (Mr. A. Green) has made constant representations to me to “ have lugger chains brought in free, but the wording of the item covering lugger chains in the old schedule made it impossible to accede to his request. I am glad that it is, at last, possible for me to meet his wishes in that respect. He need have no fear that injustice will be done to his constituents at Broome.
– Can the Minister give me any information as to the value of the anchor-making industry to Australia?
– I shall let the honorable member have definite figures later.
.- I move -
That the item be amended by omitting the figures “ 168 “ with a view to insert in lieu thereof the figures “ 167 “.
I ask honorable members to approve of the amendment as an instruction to the Government to remove the duties upon agricultural machinery, and to substitute in their stead equivalent assistance in the form of bounties or in such other form as the Government may determine, and so place the burden of maintaining the Australian agricultural implement industry upon the shoulders of the whole community. The present policy is unjust, in that it compels the farmers of Australia to bear the whole cost of maintaining the industry and yet sell their produce in open competition in the markets of the world. I understand that questions relating to agricultural machinery could not have been debated under other items in the schedule, and that I shall not be allowed to discuss the subject in detail. This is the only opportunity to test the mind of the committee as to the continued imposition of the duties, which constitute a heavy tax upon our Australian primary industries. I trust that they will see the wisdom of agreeing with my proposal.
Question - That the amendment be agreed to - put. The committee divided.
Majority … … 24
Question so resolved in the negative.
– I move -
That sub-itemsc and d be left out.
This will mean that all shovels will then come under sub-item a, “ Manufactures of metals, n.e.i.” Honorable members will see that sub-itemsc and d admit of differentiation between two so-called different classes of shovels, and it has been found that it is practically impossible in administration to differentiate between them.
– Absolute nonsense !
– I decline to accept any such accusation from the honorable member. I accept the word of my officers in preference to the opinion of the honorable member for Swan (Mr. Gregory). I give the committee an assurance that if any shovels of a class or kind not made in Australia, are imported, they will be placed under the concessional item as tools of trade. When finalizing this tariff, I called into consultation Mr. Leighton of the Defence Department, so that we might as far as possible give consideration to defence as well as tariff protection. We discussed the matter of chemicals, which, I am glad to say, are covered so far as the tariff can cover them. We also considered other essentials, and this officer particularly stressed the point that Australia must make, not only its own lathes, machines and so forth, but the whole of its own tools. The industry under consideration has made considerable advance since the tariff of 1921 was framed, and I believe that almost the whole of the shovels required in Australia are now made in this country, or shortly will be. Close to my constituency a firm with a capital of £50,000 is about to embark upon the manufacture of shovels.
– A firm recently communicated with me, pointing out that it had imported certain hammered shovels, and the Customs Department contended that they were not hammered shovels. I understand that a representative of the High Commissioner in London visited the factory in the Old Country where they were made, and agreed that they were hammered ; yet the department adhered to its opinion that the shovels were not what they were claimed to be.
– Does the honorable member suggest that shovels cannot be made in Australia?
– That is not the point at issue. What is required is sympathetic administration. If the shovels were not what they were represented to be, a heavy penalty could be inflicted. I am glad to hear the Minister say that he is prepared, if necessary, to place shovels under the concessional item. If any firm has acted fraudulently, as has been suggested, the department has its remedy. I hope that the administration under item 179 will be more sympathetic in future than it was in the case to which I have referred.
.- I did not think that an attempt would be made to leave out sub-itemsc and d, but I was prepared for it. Hitherto all that the committee has been asked to do is to accept the recommendations of the Tariff Board. The fact that a proposed duty was recommended by the board has been a sufficient justification for the Minister and honorable members generally, who have supported it. I understand that this matter came before the Tariff Board. An application by the manufacturers of shovels in Australia for an in creased duty was heard last August, and the boardrecommended that hammered shovels should be free. There is a great deal of difference between a pressed and a hammered shovel. The latter is made out of steel by a special process. I have in my hand a section of a hammered shovel, showing how strongly it is made. It is thick and strong in the centre, and thinner towards the edge, to enable it to withstand heavy work. It is used in stokeholes, on cement floors, and on special road work. The manufacture of this type of shovel in Australia would not be a commercial proposition, because it would be too expensive to erect the necessary machinery for the comparatively limited number required. Pressed shovels are satisfactory for gardening and other light work. A couple of years ago I found that a heavy duty was imposed on shovels for the purpose of providing employment in Australia for fifteen men.
– The local industry has considerably advanced since that time.
– All tools of trade should, as far as possible, be admitted free.
-I have already given my assurance.
– Of course I must accept that assurance. My interjection, which was made before the Minister gave us his. assurance, was made on the assumption that a duty was to be imposed on these shovels, without the addition of the words indicated. If a type of shovel required in Australia cannotbe made here it would be injurious to industry to impose a duty on it.
Amendment agreed to.
Item, as amended, agreed to.
Division VII. - Oils, Paints, and Varnishes.
Items 223 and 228 agreed to.
.- I am pleased that the Minister has made this concession. I have frequently pointed out. that the recently opened up low-grade gold-mining proposition at Wiluna, in Western Australia, is to be treated by an entirely new flotation process in which residual oil will be used.
Amendment agreed to.
.- Is the duty of 3d. a gallon, and 3$d. a gallon intermediate and general, on residual oil and crude petroleum, n.e.i., imposed fdr the purpose of assisting the shale-oil industry, which recently made representations to the Tariff Board for protection? A duty like this will place a heavy tax on those who are engaged in the manufacture of grease, and other products.
– Speaking from memory, there has been no alteration of the previous item except to improve it by giving oil free of duty to coastal shipping.
– Crude petroleum was free under the old tariff, but now crude petroleum, n.e.i., will pay the rates of duty I have mentioned. Under the old tariff residual oils, which form 50 per cent, of the raw material used in making grease, paid a duty of $d. a gallon. They will now pay a duty of 3d. and 3 1/2 d. a
– Even if it were possible to devolop the shale deposits of Australia; the oil produced does not provide a suitable residual oil.
– That is not the case. Newnes oil provides all the residuals obtainable from well oil.
– That is not my information. The honorable member recognizes what an important part grease plays, in industry. Should we impose an increase in duty of over 200 per cent, on that which forms half the raw material used in the manufacture of grease?
– The honorable member for Swan (Mr-. Gregory) misunderstands the position. The item is the same as in the old tariff except that certain crude oil from Borneo, usable’ as a residual oil and also as a lubricating, oil without further treatment, is made dutiable. To admit it free would seriously injure the Commonwealth Oil Refineries Limited, and the operations of firms like John Fell and Company, who manufacture lubricating oil. This oil comes from Tarakan, Borneo, and is found in a peculiar natural state that enables it to be used without refining. Under the previous tariff there was a duty, and I can assure the honorable member for Swan that there is practically no further protective incidence than already exists.
.- Under the old tariff, residual oils as prescribed by departmental by-laws, paid a duty of id. a gallon. The item before the committee provides for a duty of1d. British and lid. intermediate and general on residual oils for use in the manufacture of gas, “ as prescribed by departmental by-laws,” but no such provision is made to meet the case of oils required for the manufacture of grease, which is so largely used in industry..
– The Commonwealth Oil. Refineries Limited can supply all the residual oils required at a price similar to imported oils. We must give our own refinery an outlet for its product.
.- So far, we have not discovered crude oil or petroleum in Australia, and one begins to wonder if we are likely to do so. In Queensland, the bores at Roma and Lander have become somewhat famous, owing to the fact that the three at Roma were “ junked,” that is to say, they were deliberately interfered with by the dropping of drilling tools into the holes bored and interfered with to such an extent that the private company which owned them became bankrupt. The Queensland Government stepped in and worked those three bores. A citizen of the United States of America was in charge, and the Government become suspicious of him. I quote, from a report prepared by the Queensland Government, extracts sent to me by the managing director of the Lander bore: -
There were three bores sunk at Roma, and each bore was “ junked “ with drilling tools when they were at a uniform depth, there being a variation of only 4 feet between the depth of the shortest and the deepest hole. The first bore was sunk to a depth of 3,703 feet when it wasjunked, the second to a depth of 3,707 feet when it was junked, and the third to 3,705 feet when it was junked, and at these depths gas was glowing, and the appearances were that Roma was on the crest of a great oil field. At Orallo the No. 1 bore was “ junked “ at a depth of 2,050 feet, which corresponds with the Roma depth of 3,700 feet, Prior to the “ junking “ of the last Roma bore, Mr. Jones, who was then Minister for Mines, and still - holds that position, became suspicious, and took certain action through the police - under the War Precautions Regulations - with the result that the man in charge of the bore was called urgently to Brisbane. The minute he left that bore the police took charge. Owing to certain evidence that Mr. Jones obtained, that man, who was recommended to the Queensland Government by a certain oil company in America, was summarily sent back to America, and a second man was put in charge, the police withdrawn, and the hole immediately “junked” and set on fire.
That, in brief, is the history of Roma, but it pales into insignificance against the history of the Lander bore. I have very serious charges to make in regard to that bore. The directors of the company operating this bore are as well known as any one in Australia. They are -
– Will the honorable member connect his remarks with the item ?
– Crude oils and petroleums are admitted free of duty, and I am pointing out that the time will come when we shall have to place a duty on them. I wish to show what Australia has done up to the present to try to find petroleum. I have eighteen charges to make against the American manager of the Lander bore. I have the man’s own confession of his guilt. I submit that I am in order in referring to the matter, and if 1 am not permitted to proceed I shall have no other opportunity of dealing with it before the House rises to-morrow. I have been placed in possession of this information by the gentlemen I have named, some of whom are my constituents. I have no desire to encroach on the province of the honorable member for Maranoa (Mr. Hunter), in whose constituency the bore is situated. In order that the proposi- tion might be handled by experts, the company sent a director to America. He got in touch with a Los Angeles Oil Corporation, which recommended a Mr. R. E. Allen, geologist and petroleum engineer, who had had considerable experience in America. That man was engaged by the Lander Company at a salary of £2,000 a year, with certain expenses. I shall now read to the committee a report made by two directors of the company - Mr. Laurence, solicitor, of Laurence and Laurence; and Mr. Pitt, a well-known barrister, of Sydney. I omit those portions of the report which I regard as extraneous -
After Allen’s return to the field on the 17th September, something happened which caused the drillers to wire to Mr. Laurence that they were again leaving the field, and that Allen could carry on. This trouble with the drillers was caused by the following telegram written by Allen in his own handwriting and sent from Sydney to himself at Orallo. To this telegram Allen forged the names of Laurence and Keysor. The telegram itself was a premeditated and malicious lie, and reads as follows: - “ Sydney. 16th September.
WL. E. Allen,
Lander Oil Company, Orallo.
Directors very grateful your excellent work have voted you complete confidence and salary increase mentioned. Continue to act as you think best and let Machado Evans understand they are on probation subject to discharge if unreliable. Davis stated Boy Fife may come. Regards and best wishes.
This telegram was received in Orallo at 9.25 on the 17th September, the day Allen arrived back on the field. A comparison of Allen’s handwriting with the original telegram in Sydney proved that it was written by Allen, and that the 5names were forged. Further proof was obtained by a copy of this telegram in Allen’s handwriting found in his office at Orallo. Allen when he wrote this telegram knew of the contract between the company and Evans, putting Evans in sole control of the field, and he also and definitely knew that beyond the power to sign cheques in conjunction with Mr. Banks, the company’s accountant, he -had no authority whatever in connexion with the company’s matters, and was not to stay on the lease. From the records found in Allen’s office at Orallo, it appears that the “ Davis “ referred to in the telegram is “Jack Davis,” a driller at present in Borneo, whose services Allen was trying *o retain, but no records show that Davis is on his way .here. Allen admits writing the telegram and signing the names, and that the telegram is a lie and a forgery, and he also admits that it was sent (knowing that the information would leak out) with the object of again - he had already junked the hole with the under-reamer - getting the drillers off the field so that he could again control the No. 1 hole. This was a particularly deliberate dishonest and disloyal action of Allen’s, inasmuch as be was aware of the lack of harmony between himself and the drillers, and well knew after the conversations between him and the board in Sydney that it was essential in the company’s interests that the drillers should be quite free to carry out their work unfettered and uninfluenced in any way by Allen’s presence, and freed from the possible suggestion that he had any authority whatever on the lease. To accomplish this end the board definitely arranged with Allen that he should leave the lease and be allowed the use of the Graham truck to conduct geological survey work away from the lease.
The drillers (luckily for the company) were persuaded by Mr. Banks and Mr. Tom Follington to remain on the field and carry on until Mr. Laurence could get up, Mr. Allen in the meantime to leave the field for geological purposes. Mr. Laurence and Air. Holmes visited the field on the 3rd October, and remained till the 5th October, but they knew nothing of the abovementioned. telegram until they were leaving the field, and it was then impossible to go into that matter until the original telegram had been produced in Sydney. Their report of their preliminary investigation is that when Evans and Machado returned to the field they ascertained that the 4-in. drill stem attached to the under-reamer had not been backed off as stated, but had been blown off, 15 lb. of gelignite being used for that purpose, with the result that 177 feet of 4-in. drill stem was left on the reamer, and as the explosion took place inside the 10-in. casing it can be reasonably assumed that the damage done to the 10-in. casing is of such a nature that it would probably never allow it to be withdrawn. Had the gelignite exploded in the open hole it would have completely wrecked it. The drillers are of opinion, howover, that when once they can pick up the under-reamer they can grind off the lugs and fish it out through the 10-in. casing. Only 600 odd feet of casing was out of the hole when the drillers arrived on the field, notwithstanding that Allen had sent a telegram on the 1st September that 2,000 feet of casing had been cut off, and waB on its way out coming slowly but surely. When 662 feet of casing was out of the hole, namely, on the 2nd September, Allen wired the board - “ Casing -half out coming easier will probably have 2,000 feet out to-morrow.”
The foregoing telegrams were not only untrue, but intentionally misleading, in addition to being a suppression of material facts which the board should have known. On the 3rd September the casing was cut at 1,230 feet. In order to pick up this 1,230 feet the company’s log shows that a die nipple, which is an enormous steel tool of great weight, was attached to a 10-in. connexion, which in turn was reduced to a 6-in. connexion and again reduced to and attached to a 4-in. drill stem. This die nipple was ordered by Allen to be run in the hole for the purposes of picking up the 10-in eating. Had this nipple once been connected with the casing, nothing Could have saved the hole from being permanently blocked. However, Driller T. Wilson, the only driller then on the field, would not make the connexion with the casing,as he knew the consequences,but he told Allen that he could not make a connexion, andthe nipple was withdrawn from the hole.
It is here to be noted that on the 28th April the company’s log shows that Allen instructed Wilson to arrange a single cable for the jarring trip spear, which Wilson did, but, knowing that a single cable could never stand the strain (eleven lines broke three times), he informed Allen that the trip spear was not suitable, and it was therefore not used. The trip spear is suitable for 10-in. casing, and is the proper fishing tool, and the only tool the company had for recovering this casing. The drillers pointed out in Sydney, and again explained on the field, that the 10-in. casing never should have been interfered with, and to do so was extremely dangerous. This trip spear when used by the drillers was attached to 6-in. drill stem with eleven lines, and did bring to the surface the only 10-in. casing that has been recovered, and in doing so the lifting strain was 700 tons. When the drillers started operations they were using up to eleven lines, and then only with great difficulty lifted first 561 feet, and then 117 feet, of 10 inch. The strain was so tremendous that the line broke on three occasions, and had to be spliced each time.
The question raised by Allen of second or lower water sands is purely theoretical, as the 4-ft. split in the 10-in. casing at a depth of 800 feet below the surface allowed sufficient water to pass through into the casing that it was impossible to tell where any additional water entered the hole. One of the difficulties that will bo met with in picking out the under-reamer is that probably circulation through this drilling tool has been blocked, and must first be freed, and this was brought about by reason of inserting a device through the drill stem to prevent the gelignite reaching the reamer itself. The danger of this particular device was pointed out by T. Wilson to Allen, and a safer device was advised, but Allen did not think it sufficiently important, and merely ordered the use of the one in existence, which, if it is still in the under-reamer, will have to be removed before circulation can be effected.
The foregoing concludes the investigation made by Messrs. Laurence and Holmes, after which, and before leaving Orallo, Mr. Laurence received information which led him to ask for the telegram supposed to be sent from Sydney by him and Keysor. The telegram was produced, and Mr. Laurence made a copy of it, and came on to Sydney.
After investigations in Sydney relative to the handwriting, &c, of this telegram, Messrs. Laurence and Pitt decided to at once conduct a further and thorough investigation of all Allen’s conduct on the field, and for that purpose left Sydney on the 12th October, arriving on the field on Wednesday the 14th inst. (Allen then being in Brisbane), and immediately started their investigation. As a result of that investigation, which included a close examination of documents and records found in Allen’s office, as well as taking verbal evidence from the men on the field, we are of opinion that R. E. Allen, the late field manager, attempted in the most gross, deliberate, and malicious way to ruin the company financially -
Allen is also guilty of giving false reports to the board as to the progress and position of the work on the field, and of suppressing from the board important information concerning the happenings on the field. He is also guilty of disloyalty, and of sending geological information concerning the company’s property and prospects to Mr. Gester, of the Standard Oil Company of America.
The foregoing information is disclosed in Allen’s correspondence, files, and records. His correspondence shows Allen to be a most deliberate and unmitigated liar. As far as attending to his work is concerned, there is abundant evidence that Allen’s procedure was to rise about 10 o’clock in the morning, then have breakfast, and seldom to appear on the work before 12 o’clock, and on many days not to appear at all. The present position on the field is due entirely to Allen having disregarded the warning and protests of all three drillers not to use the under-reamer, and his lie to the drillers that its use had been ordered by Jackson, the Government Oil Supervisor, and Ball, the Government Geologist.
From the evidence of the men on the field, which we entirely believe, it is clear that Allen has been working for some considerable time to so disgruntle the drillers thai they would leave the field, but they held out and stayed on until the 10th August last, when they then learned that, despite their protests, Allen intended to use the under-reamer. Telling Allen that they refused to accept the responsibility for such a dangerous act, they left the field. Allen had accomplished what he had been working for, that is, control of the No. 1 hole. Up to this time the drillers would not allow Allen to control the fishing operations of the No. 1 hole. This refusal was brought about by certain suggestions made by Allen which, if carried out, would inevitably have ended all possibility of salvaging the No. 1 hole. One suggestion related to the use of a tap without a safety joint. Allen purchased this tap, which is a standard drilling tool, but never procured the safety joint, without which the tap is never used. Another suggestion was to run the cutters after the same became practically worn out. This, again, would have left the cutting shoe and 8-in. connexion inside the 10-in. casing, together with the 6-in. drill stem, thus effectively blocking salvage operations. With regard to the cutters, it is worthy to note that the American cutters usually cut once and sometimes twice effectively. Allen knew that, and only ordered three sets of cutters to cut out 2,550 feet of drill stem. He also ordered an obsolete type of cutter, not the uptodate cutter now used. Cutters are ground with an edge at a certain angle necessary to ensure that when they grip they will cut through the drill stem. On one occasion, when the drillers had refused to use certain cutters that were practically worn out, they found that a set of cutters they were proposing to use had been interfered with by converting the cutting edge in the opposite direction, the result of which would mean that when inserted they would grip the drill stem, but not cut, and, as they could not be withdrawn, tho hole would be again permanently blocked. The drillers ascertained from inquiry that the grinding of the cutters in this direction had been done by Allen. They state that that was the first time that they came to a definite conclusion that Allen was not behaving ‘honestly with the company. Allen admits working with the object of getting the drillers off the field so that he could control the hole. As soon as he got that control he (1) blocked the hole with the under-reamer; (2) did not grind down the under-reamer and withdraw it; but (3) exploded 15 lb. of gelignite inside the 10-in. casing; (4) he cut the 10-in. casing, and attempted to remove it when it never should have been touched; (5) attempted to lose the spear-head in the casing by setting a single lino, but, thanks to Wilson, this was frustrated; (0) he attempted to leave the die nipple in the hole covering the 10-in. casing, which again, thanks to Wilson, was frustrated. Had cither the fifth or the sixth attempts been successful, the hole would have been absolutely junked without any hope of recovery.
The reckless waste of expenditure by Allen is appalling, and is all the more reprehensible because, at the very inception, Allen was notified of the company’s financial resources, and particularly asked to conserve every penny and apply the strictest economy.
Allen, as the company’s geologist, reported that the No. 2 site would bo a better proposition geologically, and advised the removal of the derrick and plant to that site, as against skidding the rig at No. 1 bore, notwithstanding the admitted good evidence of oil and gas there. The board acted on such advice, and the removal to the No. 2 site was effected and it is in connexion with the work at this site that the major part of the financial waste and useless expenditure has taken place.
The water supply to No. 2 bore. - Allen was asked by the drillers to sink the water well close to the No. 2 bore, as had been done with the No. 1. He replied there was no water there. He was asked to make the attempt, as the local people, Telford and others, bad assured him that the water was there. This was subsequently proved by the fact that the No. 2 drill struck the water at 00 feet. Allen still refused, and set about installing the ex isting water system at a cost of very many hundreds of pounds. The system consists of two wells about a quarter of a mile apart and half a mile downhill from the No. 2 site. Between the two water wells is installed an expensive oil engine and pumping jack connected both ways by cable to the pumps at each well. The wells were then piped up to the No. 2 site, three tracks being cut through the bush for this purpose. The connexion between the pumps and the engine were steel cable cut from the company’s new sand line, although a large quantity of used but perfectly good cable was available. This new sand line could not be replaced in Australia, and had been purchased for the specific object of testing the No. 1 hole. It was pointed out to Allen that the system would not work, and that the pumps were too short in stroke to be effective, and the result proved that this was so, as nothing but trouble, loss of time, and general expense was experienced from tho inception and, when working, the pumps were so ineffective that the water was not sufficient to maintain the drilling, with the costly and disastrous result that the drilling of the No. 2 hole occupied just twice the length of time it would have done had an adequate water supply been available. The strain and jerk on the pump lines completely smashed the pumping jack which had so effectively supplied the water required for the No. 1 hole, and a new and expensive pumping jack had to be installed and the connecting lines continually renewed. The loss of money by waste of drilling time ran into thousands of pounds. Again, owing to the shortage of water, Allen ordered the jet on the main water line to be connected with the boiler pit, and, as the boiler pit was draining direct from the sump hole, it was drawing mud into that pit. This mud was consequently drained into the boilers. When Machado came on tower he noticed this again, and at once had it disconnected and reconnected with the tanks, but the damage was already done, and nearly resulted in a very serious explosion. It did result in about f 400 being paid for repairs to the boilers.
A practical and rough estimate of the loss sustained by the company over the installation of this water system, calculating both loss of time, material, labour, &c, is equivalent to what should have been the cost of the No. 2 hole had an adequate and proper water supply been available. Connected with the failure of the water supply is the digging of a’ reservoir 25 by 25 by 16 to receive the overflow from the tanks which it was known at the time that the inadequate supply could not possibly All. The digging of this reservoir was all by hand labour, and the earth required three handlings before it was finally removed. This work must have run into a loss of hundreds of pounds.
Another extraordinary waste was the making of a second mud sump, absolutely useless and unnecessary. The approximate size is 60 feet by 40 feet, and at the lower end 8 feet deep. This work, again, must have been a loss of a considerable sum of money to the company, as it was all hand work.
Further loss was occasioned by the purchase of stove pipe casing for the No. 2 hole. The casing purchased was the most expensive procurable, and a cheaper and lighter pipe would have been equally sufficient. Moreover, Allen had this pipe drilled with 78 holes per section, whereas twelve holes were all that were necessary. The consequent loss of time and labour was material.
The making and erecting of the casing racks was a further instance of a useless expenditure and loss in time and labour. This was done apparently intentionally, as the drillers had already advised that the racks would be too high and wrongly set; the work, however, was persisted in, and a considerable portion of the racks were in the main useless.
For the purposes of the No. 2 site, the company cut and made a road 15 feet wide from the No. 1 to the No. 2 site, and this road was used and was ample for all purposes. During the time the No. 2 hole was being sunk, Allen put on a gang of men, and with the tractor made a new road running parallel with the existing road, and starting and finishing at the same points as the existing road. This new road is locally known as “ Allen’s Highway,” and was built for no apparent purpose other than to deliberately waste money. It is approximately 40 feet wide, and runs through heavy timber. The cost must have been enormous. During the sinking of the No. 2 hole, Allen sunk three additional water wells, and to the one near his own cottage purchased and affixed a Buzacott engine and a reservoir tank.
After it had been decided to abandon the No. 2 hole and return to and salvage the No. 1 hole, Allen was asked to reconnect with the No. 1 water supply well, and with the new well near his cottage, which connexion would have given ample water supply at little or no expense. This he refused to do, but purchased approximately a mile of 4-inch water piping to connect the already proved inadequate supply wells of No. 2 hole (nearly a mile away), and bring that water down for boiler purposes at No. 1 site. It was pointed out to him that that water system would be inadequate, he nevertheless insisted on it, and apparently, to make it more inadequate, he reduced the 4-in. piping down to1¼-in. piping just before it reached the tanks. The result is that a man has to be kept constantly pumping in order to maintain a supply of water that is scarcely sufficient to carry on the work. Apart from the supply of water being inadequate, the cost of maintaining the pumping station and the cost of the mile of 4-in. pipes is another serious loss to the company.
Throughout all this time Allen was told on more than one occasion of the company’s dwindling finances, and was asked to use the greatest economy possible. Allen’s estimates with regard to both time and money were always very wide of the mark, but no suspicion was raised in the minds of the board until the drillers left the field on the 3rd August, after clearing the first hole of all junk.
With regard to the additional plant purchased by Allen, a detailed statement of the company’s stocks would disclose hundreds of pounds spent -
Another substantial loss occasioned by the company is the loss of material through exposure to weather conditions. The photographs show dozens of sacks of cement and casks, some of which have been merely dumped on the roadside, and all of which could have been placed under cover and preserved. New and good plant, such as engines and parts and pumps,&c., were similarly left exposed to the weather until July last, when an order was given to Evans to collect and place under cover, which he did, and built a galvanized cover for that purpose.
Another serious and useless expenditure was the employment of six men in the destruction of prickly pear on an area approximately a mile from the No. 1 bore, where it is alleged that Allen stated would be the site for the next hole.
I have a good deal more information on this subject, and it gets more serious as it proceeds, but time does not permit of my reading it. Allen was charged with these various offences and admitted his guilt. When asked why he committed them, he said that his object was to get the men off the fields so that he could get control of the bore. He deliberately forged telegrams, and made himself liable to a criminal prosecution. The directors, unwisely, perhaps, allowed him to return to America, as the Queensland Government had allowed its American manager to depart. The explanation of the company’s leniency is that there was a woman in the case. Mrs. Allen was a charming young woman, whom everybody in the district respected. She was about to become a mother, and the company decided that if her husband were criminally prosecuted, the effect upon her health and the unborn babe might be serious. Before he left for America Allen signed the following statement, in the presence of a witness : -
The Lander Oil Field (Australia) Limited.
Orallo (via Roma) Queensland, 17th October, 1925.
Sir. - The investigations made by you and Mr. Pitt into my actions while field manager of the above company showed that my waste and useless expenditure of the company’s funds must, if continued, have resulted in the company’s ruin, also that my actions in connexion with the drilling operations were directed with the object of forcing Evans and Machado off the field. These drillers protested against the proposed use of the under-reamer and stated that it I used it it would not come back through the 10-inch casing; they further said that if I insisted upon using the. under-reamer they would leave the field, accepting no responsibility. I insisted, and they left. After they had left I put the under-reamer down, it caught in the 10-inch casing, and is still in the hole. After the board had arranged with the drillers to return to the field for the purpose of freeing (if possible) the hole of the under-reamer, I wrote out and caused to be sent from Sydney to myself at Orallo a certain telegram purporting to be signed by you and Keysor. I forged your and Keysor’s signatures, and the telegram was a lie. My object in sending this telegram was to again get the drillers off the field, so that I could control the hole.
I will leave for America by the first available boat, and will not return to Australia. (Sgd.) E. E. Allen.
I saw the abovenamed B. E. Allen sign this document, after being told he must do so voluntarily, or not at all. (Sgd.) Arthur G. M. Pitt.
That document is enough to prove that our endeavours to find petroleum in Australia are being closely watched by people on the other side of the world. “Lt is a most extraordinary fact that the Roma and Lander fields are the only ones that have been junked. Both under private control, and under the control of the Government, these bores were junked three times. What was the reason for the frequent junking of the fields, the explosions, the waste of money, the building of unnecessary roads, the use of small pipes that would not carry water, and the rest of the eighteen malpractices I have read to the committee? Are they the doings of the unseen hand of the oil’ trusts of which we have ‘ read ? The inference is that we must keep our eyes open, and as the Lander Company has expended £80,000, and applied to the Commonwealth for assistance to sink a. third bore on the advice of geologists the company should be helped to protect its bore, by armed guards. If the company receives a grant from the Commonwealth it will provide ‘two armed guards, who, with two Commonwealth peace officers, could keep a continuous watch on the bore. The time has come when we should demonstrate that the men who proved their mettle at Gallipoli and in France and Flanders are not the men to brook interference by anybody. We must put up the notice “Hands off.”
Item, as amended, agreed to.
Items 231 and 237 agreed to.
Item 240 (Tiles, &c).
.- Will the duties in this item apply to terra cotta tiles that are now being used in connexion with the construction of large buildings?
– Under sub-item b, “ Tiles n.e.i.”, terra cotta will be dutiable at ad -valorem rates of 25 per cent., 30 per cent., and 35 per cent.
Item agreed to.
Item 242 postponed.
Items 252 and 255 agreed to.
Item 262 postponed.
Items 264 and 269 agreed to.
On motion by Mr. Pratten, item amended by adding the words “ and calcium cyanide “ to sub-item a.
Item, as amended, agreed to.
Items 279 to 310 agreed to.
Item 318 -
Amendment (by Mr. Pratten) proposed -
That the item be amended by adding the following : -
.- The Minister has imposed a duty of 25 per cent. on clocks because there is a clockmaking industry in Australia. But there is also an industry here for making watch cases. Previously there was a duty of 10 per cent. on watches. I suggest that that duty should be applied to watch movements. It is certainly a small industry, but all industries are small to begin with.
– Many honorable members are interested in what was an unfair and apparently anomalous position in connexion with the industry in Melbourne. After consultation with the officers of the department I understand that the anomaly complained of has since beenremoved. If the honorable member will allow the item to pass as it stands I shall look into the matter myself and, if the trouble is not rectified, shall endeavour to remedy it in another direction.
Amendment agreed to.
Item, as amended, agreed to.
Item 320 and item 321 agreed to.
Division XIII. (Paper and Stationery).
Item 334 (Writing Paper).
– I wish to refer to item 334, sub-item f, relating to writing and typewriting paper. The duty under the old tariff was 6 per cent., 10 per cent. and 15 per cent. The proposed duty is - Free, 5 per cent. and 10 per cent. I ask the Minister to leave this item as it was under the old schedule.
– I understand that this class of paper is not made in Australia. When it is, I shall bear in mind the remarks of the honorable member.
– I am referring in particular to writing paper.
.- I should like to know whether item 334 applies to apple wrapping paper as well as to tissue paper.
– Apple wrapping paper is free. It comes under 334 g2.
Item agreed to.
Item 336 agreed to.
Item 359 (Vehicles) postponed.
Item 366 (Musical instruments) agreed to.
Division XVI. - Miscellaneous.
Items 380, 381, and 388 agreed to.
Item 392 (Woollen and silk yarns).
Mr. PRATTEN (Martin- Minister for
Trade and Customs) [11.35]. - I move -
That the item be amended by adding the following : -
The amendment provides for a deferred duty on cotton yarns when the cotton yarn manufacturing industry in Australia has developed. Otherwise the item stands.
.- If a duty is imposed on cotton yarn in, say, 1927, the industry will be taxed with a duty on the yarn used in its manufactures. Is the Minister satisfied that cotton yarn will then be manufactured in Australia ?
– I assure the honorable member that the duty will not be imposed until cotton yarns are made in Australia to supply the bulk of our requirements.
Amendment agreed to.
Item, as amended, agreed to.
Item 393 (Sewing thread’s and cottons).
.- Subitemd refers to sewing threads and sewing cottons. There are certain mercerized sewing threads and cottons being made in Australia at present. I have seen them, and they are quite suitable for the purposes for which they are being used. Linen threads are used in the manufacture of clothing. These are not made commercially in Australia, but they are used in large reels for factory purposes. A duty on these threads would handicap the manufacture of clothing in Australia. Will the Minister give me his assurance that where sewing threads and sewing cottons do not come into competition with sewing threads and cottons which are commercially produced in Australia, they will be admitted under item404.
– I think that I can give the honorable member that assurance if the sewing threads and sewing cottons referred to are used for manufacturing purposes.
Item agreed to.
Item 410 agreed to.
.- In connexion with X-ray apparatus, I understand that representations were made to the Minister by the Radiological Section of the British Medical Association for a slight modification of the duty. I have a letter from W. Watson and Sons Limited, who are manufacturers of X-ray and electro-medical apparatus. In it this firm points out that there ‘ are certain patented X-ray outfits, including the Victor CD X outfit, which are much desired by radiologists in Australia and elsewhere. It is urged by this firm, who were parties to the application to the Tariff Board, that the incidence of this tariff should be modified in the case of X-ray apparatus of the special design referred to. Is the Minister in a position to give any information on this subject?
.- This is practically a free item. Sub-item (e) refers to X-ray transformer apparatus. This item has given the department a considerable amount of trouble. Representations have been made to it by the importers that the local X-ray apparatus has not at times been satisfactory. About twelve months ago it was stated that the local X-ray manufacturers were not turning out a satisfactory article. I have recently investigated the matter. I am informed that tests have been made by an expert on behalf of the New South Wales Government regarding the efficiency of the locally-manufactured X-ray transformers, and that a most favorable report has been furnished. There have also been numerous purchases of the local appliances by medical men, as well as by hospitals. This, to my mind, is affirma tive evidence of the suitable quality of the locally-made article. We should encourage this industry as much as possible. The duty is not very heavy.
– My information on this subject seems to be at variance with that furnished by the Minister. I am informed that the X-ray apparatus used at the Turramurra Sanatorium, in New South Wales, is very unsatisfactory.
– That was twelve months ago.
– My information is quite recent. I am informed that this apparatus had numerous defects, and ultimately had to be rejected. I am also informed that that is the general experience with the locally-made apparatus. I ask the Minister if he will consider making this a deferred duty until the local apparatus has been proved to be satisfactory. I have no objection to the duty if it can be definitely shown that the local apparatus is suitable.
– I accept the suggestion of the honorable member. I promise to thoroughly investigate this matter before imposing the duty, and move-
That the item be amended by inserting after the word “ Therapy “, the words - “ on and after 1st July, 1926 “.
Amendment agreed to.
Item, as amended, agreed to.
Item 424 agreed to.
House adjourned at 11.47 p.m.
Cite as: Australia, House of Representatives, Debates, 25 March 1926, viewed 22 October 2017, <http://historichansard.net/hofreps/1926/19260325_reps_10_113/>.