House of Representatives
16 March 1928

10th Parliament · 1st Session

  1. House of Representatives
  2. 10th Parliament
  3. 1928

Mr. Speaker (Hon. Sir littleton Groom) took the chair at 11 a.m., and read prayers.

page 3907

QUESTION

CONSTITUTION COMMISSION

Mr THOMPSON:
NEW ENGLAND, NEW SOUTH WALES

– In view of the importance of the evidence being taken by the Constitution Commission will the Attorney-General instruct the chairman to have the whole of it published? When I appeared as a witness before the commission I was informed that it was doubtful whether certain evidence would be published.

Mr LATHAM:
Attorney-General · KOOYONG, VICTORIA · NAT

– A portion of the evidence has been already printed) and the chairman of the commission has been informed that such other evidence will be published as the commission thinks desirable, but it has been suggested that some of the evidence might, with advantage, be reduced to precis form. The evidence is so voluminous that it is questionable whether the expense of publishing it in externa would be justified.

page 3907

QUESTION

FEDERALROADS GRANT

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– Having regard tothe fact that large sums of money are yielded by the petrol tax, and that grave unemployment exists at Broken Hill and in the Western lands division of New South Wales where no money from the Federal Roads Grant has yet been expended, will the Minister for Works and Railways favorably consider the allocation of a fair proportion of the money collected through the petrol tax in the Western lands division for the purpose of making roads there? -

Mr HILL:
Minister for Works and Railways · ECHUCA, VICTORIA · CP

– When the tentative scheme for New South Waleswas submitted to me by the State Government no provision was, made for the allocation of any moneys to the Western lands division. I drew the attention of the State Minister for Works and the Main Roads Board to that fact, and was informed that when the complete scheme was submitted for my approval certain roads in the Western division would be included.

page 3908

QUESTION

WINE EXPORT BOUNTY

Mr PARSONS:
ANGAS, SOUTH AUSTRALIA

– In the absence of the Minister for Trade and Customs I aslr. the Prime Minister whether it is a fact that on Tuesday last a large order for wine for shipment overseas, which had been placed wilh Seppelt and Sons, of South Australia, was cancelled as a result of the Government’s announcement of a reduction in the wine export bounty?

Mr BRUCE:
Minister for External Affairs · FLINDERS, VICTORIA · NAT

– I have no knowledge of the matter, but will have inquiries made.

Mr STEWART:
WIMMERA, VICTORIA

– This morning I received the following letter -

At a meeting of doradilla growers held in Merbein on March oth, the growers decided to request you to oak the Minister if in the case of wine exported which had been made from the 1927 vintage, the price fixed by the Minister had been paid for the grapes. I would point out the reason for asking for that information is that growers in this district who sold fruit to the- winery have so far not received the price fixed by the Minister and they hare stated that they do not intend to pay those prices.

In view of the Wine Export Bounty Bill now before the House, and the repeated declaration of the Government that the purpose of the bounty is to assist the growers, I ask the Prime Minister if he will have this letter inquired into with a view to ensuring that the growers receive the consideration which the Government and the Parliament desire them in have.

Mr BRUCE:

– The wine export bounty was introduced primarily toassist certain growers who were in desperate straits, and the basis of it is fair and equitable treatment of the growers. Each year a schedule has been issued by the Minister for Trade and Customs indicating the amount to be paid per ton for grapes by vignerons who desire to participate in the bounty. The schedule for the current year was issued a few days ago. If the honorable member will let me have the letter he has quoted I shall have full inquiries made into the statements contained in it.

page 3908

QUESTION

TEXTILE DUTIES

Mr LISTER:
CORIO, VICTORIA

– Yesterday and again this morning I received communicationsfrom woollen mills in my electorate asking me to ascertain if the Government would give early consideration to the requests made in . another place for the revision of the duties on textile goods ? Mr. BRUCE. - Because of representations which the honorable member had already made to me, the Government has been considering the textile duties, and its attitude will be stated in my reply to a question that appears on the noticepaper for to-day.

page 3908

WIRELESS BROADCASTING

Formal Motionfor Adjournment

Mr SPEAKER:

– I have received from the honorable memberfor Maribyrnong (Mr. Fenton) an intimation that he desires to move the adjournment of the House this morning to discuss a definite matter of urgent public importance, namely, “ The movements of large broadcasting companies in Australia towards establishing a monopoly, and the consequent injury to the people of Australia if such a monopoly were effected.”

Five honorable members having risen in their places,

Question proposed.

Mr FENTON:
Maribyrnong

– The procedure I am adopting this morning will allow insufficient time for the adequate discussion of this very important matter, and I shall be able to place only certain phases of it before the House. There are many by-paths that might be traversed with advantage, but I shall leave them to a future occasion when this House will, I hope, have a full dress debate on wireless broadcasting, and an opportunity to determine our future policy in that regard. It is unnecessary for me to enlarge upon the importance of broadcasting to a country like Australia. It has already conferred great benefits upon the people of this and other countries, and there may be some who will say that as we have been fairly well served in the past by the broadcasting companies. the Government should allow a combination of them, so that better services may result. A very illuminating return was presented to the House yesterday by the Postmaster-General in reply to a question I asked prior to the Christmas adjournment, and I propose to quote some of the information contained therein in order to show what a profitable business broadcasting is. For instance, 3LO, with a paid-up capital of $6,250 at the 30th June, 1925, has, since its incorporation, paid to shareholders by way of directors’ fees, dividends, shares or bonuses, £111,052 10s. That is a huge return on such a small capital. The big “ A “ class station iti New South Wales, 2FC, is owned by Farmers’ Ltd., and us it is grouped with the other businesses controlled by that firm, no separate balancesheet of- the wireless operations is available; but I notice that the total amount paid to shareholders in the form of directors’ fees, dividends, shares or bonuses was £11,375. Station 5CL in South Australia made a profit for 1926-27 of £2,492. The Queensland Government station also made a profit, but the stations in Western Australia, where broadcasting is done by the Westralian Farmers Ltd., and: in Tasmania, have shown losses. I say nothing against individuals who invest their money in companies for the purpose of winning profits, nor against the big corporations who have obtained control of the broadcasting business. For instance, I understand that the bulli of the shares in 3LO are held by the Herald Newspaper Company, Buckley and Nunn and J. C. Williamson. As I have already said, the largest “ A “’ class station in Sydney is controlled by another corporation. Farmers’ Limited. If broadcasting is so profitable to private corporations, it is time this Parliament considered the desirability of nationalizing this business. I presume that anyone might readily take up shares in these prosperous companies, and, therefore, I do not condemn the Melbourne Herald,- Buckley and Minn’s, J. C. Williamson’s, or Farmer’s Limited for their large interests in broadcasting companies. Judging by the answers that the Postmaster-General has given to my questions in this House, judging by- the information that has been sent to broadcasting com panies, and judging by the conferences that have been held, at which I understand the Prime Minister himself has been present, I believe that the Government has laid it down somewhat emphatically that there must be greater coordination between at least “A” class broadcasting companies throughout Australia. I believe that the Government’s object is that all the broadcasting companies should participate in the profits. Yet, a3 I have said, two broadcasting companies, one in Tasmania and one in Western Australia, are not paying.

In Victoria wonderful strides have been made, and I think I am safe in saying that more than half of the licences issued to listeners-in throughout Australia ave held in that State. To-day there are something like 300,000 licences in Australia, and I estimate that the revenue from that source, even at the reduced rate, approximates £360,000 per annum. Broadcasting, as a public utility, would be a “ready means to the Government of acquiring additional revenue, which in these times of financial stress would be very acceptable. The Melbourne Herald, Buckley and Nunn’s, J. C. Williamson’s and Farmer’s Limited are all making profits in their ordinary business, and are not actually in need of the money that they collect from the public in the shape of licence fees. I believe that the action of the Government is bringing about certain developments. I understand that in New South Wales two “ A “ class stations have pooled their interests, and that in Western Australia broadcasting is to come under the control of 3LO of Melbourne. I also understand that negotiations are proceeding between 3LO and 3AB.- the two biggest stations in Victoria - with a view to coming to some arrangement, and, of course, there is a friendly feeling between 3LO and Farmer’s Limited, of Sydney. If there is to be an aggregation of these interests, it’ will result in one of the biggest private monopolies in Australia. The wireless service should be controlled by the Government in the interests of the great masses of the people. The whole subject bristles with points to such an extent that the Government should permit a full-dress debate on wireless in this Parliament, before any arrangement is made respecting the renewal of licences.

I have received the following letter- from a gentleman whose name I do not wish to disclose. He has been connected with the wireless movement in Australia from its inception when the Fisher government took a decided stand respecting the introduction of wireless into Australia. The letter reads: -

It appears -that the Government are furthering the proposed formation of the “A” class stations into a monopoly, giving this monopoly a five or ten years’ agreement from the termination of the existing licences. This will be exceedingly detrimental to the public interest for several reasons, and will involve unthought of complications.

Wireless has extended within the last throe years beyond all conception, and one cannot possibly visualize what strides it will take in the next five or ten years. Especially is this so owing to the advent of Television, which will certainly be an accomplished fact within eighteen months, and which must go hand in hand with broadcasting.

In England the Government granted the B.B.C. a two years’ licence and a further two years extension, but at the end of that time it became a Government controlled concern. In Australia, certain companies are now making huge profits out of broadcasting, and only a small proportion of the receipts is expended on programmes.

You can see that it will be a serious thing if the control of wireless is handed over to any monopoly for such a lengthy term, and the House should have an opportunity of discussing it before anything so drastic is done.

I quite agree with that statement. I have another communication which the Postmaster-General may say comes from a biased source. It is a circular from Mr.W. H. Tucker, the secretary of Central Broadcasters Limited, “ A “ class station, 59 Franklin-street, Adelaide. It reads : -

We ask you to have this matter ventilated in the Commonwealth Parliament, and to prevent the formation of another big monopoly in Australia, and that of one of the most important and far reaching discoveries of recent years, now only in its infancy. Apart from the usual objections to monopolies, it is impossible to say what disadvantages Australia may suffer with wireless in the hands of private monopolists. It would be far bettor for the Government to control it.

That letter is from a private company, and I know that there have been some negotiations with a more powerful company with a view to bringing about a swallowing-up process. Unless a decided stand is now taken by the government, a huge monopoly will soon be in existence to the subsequent detriment of the people of Australia.

Mr Maxwell:

– “What is the date of the expiry of the present licence ?

Mr FENTON:

– I believe that the five ‘ years’ term will expire in about fourteen or fifteen months’ time, when the government will have an opportunity to draw up a fresh agreement and to impose new conditions. Its proper course would be to take over the control of broadcasting in Australia. Honorable members opposite may attribute my attitude this morning to the socialistic ideas of the Labour Party and its desire to make every service a government monopoly, but I contend that we have as much right to control broadcasting in Australia as we have to control the telephone service. The telephone service of Victoria was originally owned by a private syndicate with which the late Byron Moore was concerned, but many years ago the government of the day bought out the company in order to make the service a public utility. Australia undoubtedly owes a debt of gratitude to that Victorian syndicate, because telephones were in use in Melbourne before they were adopted in London. The Melbourne Age has published some valuable articles on broadcasting, including one article extending to two and a half columns explaining the methods adopted in Great Britain both under private and governmental control. The article reads -

What in actual fact does the government wish the companies to do, and what is the likely outcome of the existing situation. If the movement be toward an Australian-wide monopoly it must be said at once with all emphasis that such an arrangement will never be tolerated by the people.

I agree with that statement. Unless the government takes immediate action these monopolies will entrench themselves so firmly that a huge sum of money will be required to buy them out when the Commonwealth at last decides to control broadcasting. This government is undoubtedly to blame for not having made a move in that direction in the past. The article continues -

There were, of course, safeguards on the old company which helped to keep greedy shareholders in their place. The company was constituted with a capital of £100,000, of which £60,000 was contributed in equal parts by six great wireless firms, all of- whom were represented on the board. The remaining capital was forthcoming from, other wireless firms with the right of election of two additional directors. The return on its capital was limited to 7$ per cent.

What steps does the Postmaster-General or this government intend to take to limit the enormous profits of the broadcasting companies in Australia?. In one C83e the return on a capital of £6,000 was £111,000. We have capable officers in the wireless department, and if the staff were increased, it could readily take over and control the broadcasting service throughout Australia. The Age article continues -

To secure the continuance of this practice ii became necessary to replace the board of directors with a board of governors nominated by the Government, and, with this board at its head, the British Broadcasting Corporation, constituted by Royal charter, took over this powerful and delicate national asset a yeal ago this month. The corporation was empowered to carry on a broadcasting service as a public utility service. It was given wide powers, all of them, however, subject to the approval of the Postmaster-General, who thenceforward became responsible to Parliament for its conduct. The corporation is permitted to make agreements with governments and municipalities, to develop and exploit its service in any other direction and by means other than wireless telephony, to broadcast any matter which the Postmaster-General may permit, to collect news and subscribe to news agencies, to receive and employ funds granted by the Legislature, and to . publish books, journals, &c.

I know that the Postmaster-General will say that, although the conditions imposed in Australia are not as strict as those in Great Britain, certain safeguards have been adopted here. Nevertheless, I contend that the Government should take over wireless broadcasting in the same way that it controls the telegraphic and telephonic services, the ramifications of which extend to the smallest and most remote settlements. The article, from which I have already quoted, also states -

In the ‘case of the British Broadcasting Corporation, the elimination of competition and the change of policy, which made the principal object not profit but service, have produced extraordinarily satisfactory results.

The success of Government enterprise has been proved in various departments. I was. glad to notice recently that Sir John Monash had successfully refuted the statement heard from time- to time that Governments cannot conduct public utilities to advantage. I can quite imagine the Prime Minister fearing that my proposals would result in competition “with private enterprise; but, as it is impossible to foretell the possibilities of wireless telegraphy in the near future, it is our duty to take immediate action to place it under national control in the interests of the people. You, Mr. Speaker, and I were associated with the opening of the new 3AB, Station in Melbourne. It was stated in certain notes handed to me on that occasion that it was fully anticipated by experts that before long a farmer sitting, by his fireside at Orbost, some 160 miles from Melbourne, would be able to see the Melbourne Cup run, and would have the names of the placed horses as soon as they were known to the people on the course. This morning I read that in Central Australia, where there are lone women and children, and men too, far removed from medical aid, both receiving and transmitting sets are being installed. After a little instruction in the operation of these instruments, the settlers will be able not only to receive wireless communications, but also to- send out messages in the event of their requiring medical assistance. In response to a call for help a medical officer will proceed to the locality by aeroplane. One of the questions that 1 asked the PostmasterGeneral was -

Will he take steps to prevent these amalgamations developing into a huge combine, so far as broadcasting in Australia is concerned?

The Minister’s reply was -

It is anticipated that co-operation between the different companies will result in a much improved service, the Government retaining control as at present.

The Government is practically asking the companies to form a great combine, but we have as much right as the Government corporation in Great Britain to take over the control of wireless broadcasting in the interests of the people. I hope that this debate will extend over its full time. I have no desire to delay the business. It has been suggested by a section of the press that a concerted effort is being made by the Opposition with the object of delaying, the business of the House by means of adjournment motions. That is not the case. I hope that I am endeavouring in a humble way to perform a public service. I have been purposely brief in my remarks. Many other facts that the public should know concerning wireless broadcasting could be brought to light. Although in most matters of policy my party is in opposition to the Government, this subject is surely one on which both sides should sink party feelings and bring about national control of this great public utility for the service of the people.

Mr GIBSON:
PostmasterGeneral · Corangamite · CP

– The honorable member for Maribyrnong (Mr. Penton) is quite consistent in his attitude towards wireless broadcasting. He is afraid that a huge monopoly will be created; but he need have no fear of that happening. The government would be faced with great difficulties if it were to take complete control of broadcasting throughout the Commonwealth. Only in 1923 the first efforts were made in providing a regular service for the people. A conference was convened, and ‘70 representatives of the various wireless interests throughout Australia met in Melbourne. They formulated a scheme that was submitted to me, and ultimately put into operation by the Government, but it failed absolutely. A fresh plan was adopted in 1934, and this was the nucleus of the existing arrangement. Since then, the interest in wireless telephony has grown by leaps and bounds, even to a much greater extent that the most optimistic person could have expected. In Victoria, to-day, there are more listeners-in per head of the population than in Great Britain, and one of the reasons for that is the excellent local programmes that have been supplied. As the honorable member has remarked, the number of listeners-in in Victoria is greater than in the whole of the rest of Australia. I understand that the programmes given here compare favorably with those in any other part of the world. I had a letter recently from Mr. H. P. Brown, Director of Postal Services, who has had an opportunity of investigating the subject of wireless broadcasting in Great Britain and America, and he is convinced that the Australian programmes do not suffer by comparison with the best presented elsewhere. The honorable member for Maribyrnong is anxious about the amount of revenue being received by certain broadcasting stations. They are getting that revenue because they have offered programmes that have attracted a great many listeners-in in the particular States. There are 136.410 persons holding licences in Victoria, 75,000 in New South Wales, 24,8.13 in Queensland, 3,820 in “Western Australia and -2,720 in Tasmania. The Western Australian station is losing £6,000 a year, and the Government is extremely anxious that vast States with scattered populations like Western Australia shall enjoy similar facilities to those of Victoria and New South Wales. The position in Queensland is similar to that in Western Australia. One cannot compare Great Britain, from a wireless broadcasting point of view, with the vast territory of Australia, which is 26 times as large as the Old Country. I shall show why I think that we should have coordination and co-operation between the individual broadcasting companies in Australia. The United States of America, until recently, had 700 stations, and these were in such a hopeless tangle that 300 of them had to be closed last year. Even now the broadcasting system there is not so .satisfactory as that in Australia or Great Britain. The loss in Western Australia, as I have already mentioned, amounts to £6,000 a year, and in Tasmania £2,000 a year is lost. The honorable member has pointed out that, in South Australia and Queensland, very small profits are made by the wireless stations. The only stations doing well, financially, are those in Melbourne and Sydney. Is it not essential that we should adopt means of keeping the Hobart and Perth stations in full operation? The only solution is the adoption of a system that would give a better service in the States where the population is scattered, and that can only be done by means of relay stations. While the larger stations have enjoyed certain profit’s during the last two or three years, they must necessarily spend huge sums of money to provide relay stations in suitable positions throughout Australia. This matter was discussed at the radio convention that met at Washington recently, and allotted ‘certain wave lengths for broadcasting relay programmes. Up to the present time very little relaying has been done in Australia; but it will be remembered that only last year a speech made by the Prime Minister in Australia was relayed to Great Britain on a short wave length, and transmitted over the broadcasting system of the Motherland. The distances over which broadcasting could be done in Australia arenot so great as that. We broadcast from this very House when the Duke of York was here, making available 4,000 miles of telephone wire for one hour. Relaying to-day is where broadcasting was four years ago, and in a short while it will be possible to relay the one programme from, say, Victoria to every station throughout the length and breadth of Australia. That is the only way in which to give the people in the outback districts a good service. What will happen is a redistribution of “ A “ Class stations. There may be stations- 100 miles north and south of Sydney, and the same at Melbourne, thus enabling us to serve a large portion of New South Wales and Victoria. They will broadcaston two wave lengths. The one who give listenersin the same facilities as at present; the other will be a short wave length of 30 metres which will be sent out to all towns as far up as Cairns and Darwin, and to Perth and Hobart. This will give existing stations an opportunity to rebroadcast the programme.

Mr Mann:

– What assurance is there th at this will occur?

Mr GIBSON:

– There is no doubt that it will occur. It is being done to Great Britain now, and there is not the slightest doubt that it will shortly be done in Australia. A person living within range of the big stations will be able to listen-in on the existing wave length of 300 metres as at present; while those in the outback areas of Queensland and Western Australia can listen in to the relayed programme on a short wave length of about 30 metres. In this way it will be possible to offer the same programme to -all the listeners-in throughout Australia. In Western Australia, at the present time, there are not many licence-holders, because the broadcasting station there is not able to give such a programme as will induce the people to take out licences, and they are so far distant that listeners-in cannot conveniently pick up the programmes from other States.

Mr Fenton:

– I think that is a reflection on Western Australia.

Mr GIBSON:

– No, it is not. One might as well say that the Government should run the theatres as that it should control wireless broadcasting, which is essentially an entertainment. I feel sure that’ a closer co-operation between the broadcasting companies can be brought about and given effect along the lines I have suggested. The Government can and will compel them to put in the necessary relay plant; because it is laid down in the regulations that relay stations shall be erected. The work is only held up to-day because we are investigating the possibility of relaying by wireless instead of by wire. I do not think that the Government is justified in spending enormous sums of money in laying thousands of miles of wires which may become useless in a few months. The only way to serve the whole of Australia is by the very closest co-operation between the broadcasting companies, so that the one programme can be transmitted over the whole country. There will be no monopoly in this, because the Government must, and will, retain its control, and each State will have its own representation. Australia has made very great strides in wireless, probably as great as any other country in the world. Great Britain has 53 listeners-in to every 1,000 people; Germany has 28.1; Sweden, 53.6; Denmark, 44.8; Australia 43; and New Zealand 28. I make the statement quite definitely that it is proposed to bring these companies into line so that the management will be able to control the programmes and to give a service of which Australia may be proud. Practically all the broadcasting licences expire in 1929, with the exception of those in Queensland, South Australia and at Hobart, which expire in 1930. No station will retain any interest in its licence after its expiration. The stations have no goodwill, and the Government can issue licences for any period it likes after the existing ones expire. Queensland has the only governmentowned station in Australia. That station is, I understand, making little or no profit at the present time, but a Government can afford to run a station at a loss when a private company cannot.

Mr Forde:

– The Queensland station made a substantial profit last year.

Mr GIBSON:

– It was a very small one, I understand.

Mr Forde:

– It was in the vicinity of £10,000.

Mr GIBSON:

– It is the intention of the Government to see that relay stations are established throughout the length and breadth of Australia for the purpose of ensuring that the programmes broadcast at Melbourne and Sydney can be heard all over the continent. This will not in any way tend to create a monopoly.

Mr BRENNAN:
Batman

.- The speech of the honorable Minister was candid and sincere, but it was really an argument in favour of the motion of the honorable member for Maribyrnong (Mr. Fenton). We all share with the Minister his optimistic belief in the future of wireless, and in the importance of broadcasting as one of the manifold aspects of wireless. The honorable gentleman suggests that we might as well argue in favour of a State monopoly of the theatres of this country as for a State monopoly of broadcasting. As far as I am concerned I have no invincible prejudice against State theatres if the Minister should be converted at any time to that view ; but there is, I suggest, a fundamental difference between the service of wireless and the provision of theatrical displays and entertainments, which are, in their very nature, purely entertainments. A good wireless service is essential nowadays to this or any other country. But the condition which the honorable mmeber for Maribyrnong now sees as possible and probable is, in fact, inevitable, because broadcasting has been made, not a matter of service to the people, but one of profit to the companies. As he rightly says, we need not waste effort on unkind criticism of the companies; from their very nature, and because of the objects for which they were formed, it is inevitable that their first consideration must be the interests of their shareholders, and their own profits. That is the reason for their existence, and if there are sensible men at the head of them it is clear that they will place profits before service. But it is naturally not our first or main consideration. Our desire is to harness, in the interests of the people as a whole, this new discovery of science. The consequence of the surrender of this important function to private enterprise must necessarily be inferior service even from the point of view of entertainment. That is always the result when monopolies are allowed to develop. While there is competition there is an incentive to produce higher class’ programmes, but the present tendency is towards combination, and with combination and monopoly necessarily comes a falling-off in the quality of the service rendered. The report of the royal commission upon this subject was not, . it is true, favorable at the moment to any drastic change of control. The report stated that the commissioners, having given the matter exhaustive consideration, had come to the conclusion that very little change in the existing system was advisable at the present time. The existing broadcasting stations had to pioneer the development of radio as applied to entertainments, and the transmission of popular programmes of music and other items. They pointed out that in undertaking this work, the broadcasting companies had, almost without exception, sustained considerable losses, and they further pointed out that considerable sums of money were being invested in the erection and equipping of expensive stations. There was reason in the contention, they -said, that those who had put their money into such concerns should have an opportunity of recouping themselves when wireless became, as it was becoming, increasingly popular. That merely illustrates the danger of allowing this service to pass into private hands. It is true that consideration has to be given now to the interests that are vested in this service; but that is not to say, and I do not think that the commission intended it to be so inferred, that because vested interests have been created, the State is to be excluded permanently from this field. I think that, on the contrary, the sooner this tendency is arrested the less expensively can it be done, and the sooner will the State come into its own. As illustrating the change that is taking place in the position, I referred, when speaking previously on the matter of ‘ international wireless, to the tremendous and rapid increase in the number of listeners-in. The consequence must be that the stations which are said to be operating at present at a loss will shortly, in the ordinary course of events, be able to operate at a profit. When that time comes the difficulty of the Commonwealth assuming control of them will be multiplied greatly. If the various stations which are operating to-day in the different States eventually combine, as I suggest that they will, the difficulties will be multiplied tenfold, the service rendered to the community will be less satisfactory, and the loss suffered by the Commonwealth immeasurably greater. Incidently, the Government is making inroads upon the revenue from licence fees by reducing its portion of the charges. This is being done doubtless to attempt to satisfy the rapacious maw of Amalgamated Wireless Limited. Recent press references indicate clearly how the commercial world views the possibilities of wireless development. The following cablegram from New York, dated 13th March, was published in the Australian press : -

Trading on the New York Stock Exchange set a new record when sales passed the 4,000,000, shares mark. Prices were irregular. The Radio Corporation of America continued to be the sensational stock in the .market. Opening at 100 dollars (£32), and after leading sales to a record run’ yesterday, the stock later sagged to 140 dollars (£28), but recovered greatly before the close. This was the second successive day that all previous Stock Exchange records were broken, the sales yesterday amounting to 3,750,000 shares. It is estimated that in the two days the upward movement added a value of nearly 2,000,000,000 dollars (£40,000,000) to the issues traded in.

The following London cablegram, dated 14th March, was published in the Argus : -

It is stated, in well-informed quarters that a merger of Marconi’s and the Eastern Cable Company is imminent.

Mr Gibson:

– Does the honorable member suggest that broadcasting was concerned in that?

Mr BRENNAN:

– Broadcasting is bound up in the whole thing.

Mr Gibson:

– It is in no way associated with it.

Mr BRENNAN:

– It is all a question of private versus State control of wireless, The honorable member for Maribyrnong urged this morning, as honorable members on this side of the chamber have frequently done, that the Government should take time by the forelock, and in the interests of the people of the Commonwealth seize the fruits of this marvellous invention instead of allowing them to go to private capitalists. I am quite prepared to acknowledge that such stations as 3LO and 3AR in my own

State have done good work. 3AR has recently erected an excellently equipped station, and is now presenting programmes which are equal if not superior to those presented in any part of the world. But that is not the issue before us. The big principle which we are being invited to consider this morning is whether we should or should not allow this great public utility to pass out of the people’s hands and become the subject of speculation for private profit. I congratulate the honorable member for Maribyronong upon having initiated another discussion on this important subject. I know that the Government is prejudiced in favour of private enterprises, but one would have thought that, even acknowledging this, it would have realized that just as our postal and cable communication must be publicly controlled in the interests of national safety, security, and convenience, so should wireless. We control our railway transport system and all our means of international communication and I submit that this great creation of man’s genius should, in its infancy, be seized for the good of the public. We should not leave to future generations the settlement of this problem, which the PostmasterGeneral himself has admitted will become immeasurably more complicated and aggravated by present neglect.

Mr MANN:
Perth

.- It is most important that Parliament should discuss at the present stage the development and control of wireless in Australia. No doubt in this, as in other countries, we are gradually feeling our way, by a sort of evolutionary process, to the best method of managing wireless. The PostmasterGeneral has said that we have tried successive schemes, none, of which has been entirely satisfactory, and that another attempt is now being made to remove the objections to the present system. It would be extraordinary indeed if, in the development of a new science such as this, we did not have to find our way to successful management by the hit-or-miss process. But while we should tate advantage of our past experience, we surely should not neglect to profit by the trials and failures of others. We could gain much assistance from a careful study of the methods of wireless control that have been tried in other parts of the world. I trust that the Ministry will not hurry along the road it is at present travelling upon. One thing that we have learned from the present debate is that the Government proposes to encourage the present companies to amalgamate and to form one central management for wireless in Australia. We have had a suspicion of that for some time, but I sincerely trust that the Government will pause before going any further with such a scheme. Why is no notice taken of the experience of Great Britain in wireless control? The Post master-General in his speech made practically no reference to it.

Mr Gibson:

– Great Britain may be compared with Victoria.

Mr MANN:

– Only in respect of the number of listening-in licences that have been issued. Wireless in Great Britain was controlled at first as a monopoly by the British Broadcasting Company, which was subject to very strict supervision by the Government - far more severe supervision, I venture to suggest, than that to which any Australian company is subjected. This was particularly so in reyard to its profits, which were limited to 71/2 per cent. The operations of the company were, on the whole, very satisfactory. Certainly no very grave objections were taken to it, such as have been taken to the operations of some of the Australian broadcasting companies. Subsequently two royal commissions inquired into wireless affairs in Great Britain. The first of these, which was known as the Sykes Commission, recommended an extension of the operations of the British Broadcasting Company, but it was gradually borrie in upon the public that the company would have to go. Another commission, known as the Crawford Commission, inquired into wireless in 1925, and as the result of its recommendations, the British Broadcasting Corporation took over the assets of the British Broadcasting Company and has since controlled broadcasting in the Motherland. The company was not subjected to any loss, for its assets were taken over and, as its licence had expired, it did not lose any good will. Broadcasting is now controlled in Great Britain by an independent board of governors. It is practically a system of government control. The present method protects the public interest and is giving very satisfactory results. As honorable members know, I have always stood firmly for private as against government control, but with this qualification, that the safeguard of private control is open competition. Where there has been open competition in broadcasting in Australia the result has been far more satisfactory than where one company has had a monopoly. The operations of the one broadcasting company in Western Australia have not been too satisfactory. I do not cast any reflections upon the company, for I realize that it has had to work under extremely difficult conditions. It has not had the opportunity to obtain such programmes as would lead the public enthusiastically to support it. This is chiefly due to the fact that the better class of entertainers and artists is controlled chiefly by one principal, who is interested in wireless broadcasting in the eastern States. Therefore Western Australia, has not been able to obtain the services of such artists except upon the payment of heavy royalty fees. The result is now apparent. Westralian Farmers Limited is reduced to difficulties, and practically, compelled to merge itself with the very interests which have been starving it out. In yesterday’s Melbourne Argus there appears this telegram -

page 3916

WIRELESS MERGER

Perth, Wednesday. - Mr. J. Thomson, manag ing director of Westralian Farmers Limited, which controls the broadcasting station6WF, states that only the acceptance of a modification in terms stands between the station coming under the control of organizations in the eastern States which have recently consolidated their interests. Programmes would then be provided by entertainment specialists.

My chief apprehension is as to what might be the consequences of such action. The matter has been represented to the Postmaster-General on several occasions. People in Western Australia interested in wireless broadcasting are profoundly dissatisfied with the programmes which they have to listen to, and wireless in Western Australia has received a considerable setback. There has been agitation for an additional licence to broadcast’ in Western Australia in order to stimulate competition, and so improve the quality of the broadcasting. Instead of that suggestion receiving approval,

Westralian Farmers Limited have been compelled to merge with the great Eastern States monopoly.

In his reply the Minister made a statement which bears out the contention which I have raised. The honorable gentleman said that in a big country like Australia, with a scattered population,’ it is impossible for the . Government to expend large sums of money on land lines in order to give people in remote areas the communication which they desire. The honorable gentleman practically stated that the extension of telephonic and telegraphic communication would be too expensive, clearly indicating that he has in mind that people in the remote areas must, in future, be dependent upon wireless communication, not only for their amusement, but for essential news services.

Mr MANN:

– I am sorry if I misunderstood the honorable gentleman, but undoubtedly many people in our remote areas willbe dependent upon wireless communication for their essential communication services. The whole crux of the matter is the establishment of wireless relay stations. The Minister indicates that the monopolists will be compelled to put in relay stations. From long experience I am confident that that hope will not be realized. How can the Government insist on any company putting in relay stations when the company can claim that such stations would not pay ? If the Government took over the whole business, the loss in one direction would be set off by the profit in another. It is in those very surroundings where relay stations are unlikely to. pay that they are most needed. It would be far more economical for the Government to take over all the wireless services in Australia, and transmit news as well as entertainment to the people, than to extend an expensive system of telephonic and telegraphic communication.

Mr Charlton:

– The day will come when excessive costs will compel the Government to do so.

Mr MANN:

– I believe that the honorable member is right. “We must not, when reviewing this subject, judge it upon the relative merits of private enterprise versus government control. Private en terprise has my wholehearted support when it is allowed untrammelled competition. At present even the private wireless interests are being buttressed by the very government control by which they are supposed to be restrained.

Mr Stewart:

– This is a matter of government monopoly versus private monopoly.

Mr MANN:

– That is what I have endeavoured to point out. At this stage it would be a grievous mistake to feed this huge private monopoly and ignore altogether the lessons afforded by Great Britain’s experience. Great Britain cannot be accused of fostering government enterprise as against private enterprise. The Crawford Committee on wireless was instituted in 1926 by a Conservative government, and its personnel was practically confined to Conservative members. In no sense was the committee Labour or Socialistic. Its report represents the considered opinion of a body of capable members of the House of Commons, and we should be making a great mistake if we failed to profit by the experience of Great Britain in wireless matters.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– The Minister has given the House much information. The whole of his argument supports the contentions of the mover of the motion (Mr. Fenton) and the honorable member for Perth (Mr. Mann). There is one point which I particularly desire to bring before the notice of honorable members. In 1887 Louis Brennan, by means of wireless electrical transmission, considered that he had invented a system which would enable a play acted in Melbourne to be shown in every drawing room of that city. At the time the play “ Pygmalion and Galatea,” in which Eleanor Carey and Hattie Shepherd were appearing, was taking Melbourne by storm. Brennan declared that he was prepared, within twelve months, to make a picture of that play, wherein the statue on the pedestal, made of Parian marble, would become animated, flushed with the blood of life, step down from the pedestal, take up garments andcover its nudity, and to make also a picture showing the Melbourne Cup winner passing the post. Those who. listened looked at him askance, as if he were relating a story from the Arabian Nights’ Entertainments. The diversion of his activities to torpedoes probably accounts forhis not having proceeded further . with his wireless experiments. Louis Brennan, although not born in Australia, developed his theories in this country, and may be termed an Australian inventor. Unfortunately, he received little encouragement from the Australian government, and when Sir Andrew Clarke, then Inspector-General of Fortifications in England, caused the British authorities to interest themselves in Brennan’s torpedo he left Australia for ever. Later the Imperial Government purchased the perfected torpedo rights for £110,000, and engaged Brennan to superintend its manufacture. It was my good fortune to know another Australian inventor, Mr. Taylor, who recently passed away. When the civilization of Australia advances sufficiently it will possibly build a temple of fame to commemorate the memory of those who have done great things for the world. In Canton, China, there is such a hall, in which statues are erected to the memory of the great men and women who have benefited mankind, irrespective of their country of origin, and including even Marco Polo. When that idea materializes in Australia the name of the late Mr. Taylor will be cne of those held in highest reverence. That gentleman brought under the notice of the government of his day the danger attaching to the octopus-like activities of the German wireless concern known as “ Telefunken.’ In practically every country of the world “ Telefunken “ monopolized wireless communication. Fortunately for civilization the efforts of Mr. Taylor caused that monopoly to break down in Australia. Had that not occurred, Germany would have had control of the whole of the wireless information of the world. It is to be hoped that the Minister will be persuaded by good advice in the present circumstances. I understand that the Government has 500,001 shares in Amalgamated Wireless, a controlling interest.

Mr Hill:

– The honorable member is referring to Amalgamated Wireless Australasia Limited, whereas we are discussing broadcasting stations.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– It is impossible to have broadcasting without wireless.

Mr Hill:

– The only association is that Amalgamated Wireless Australasia Limited, controls the activities of two stations, one in Melbourne and one in Sydney..

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– If my information is correct, Amalgamated Wireless Australasia Limited is buying up the rights of every wireless patent, whether actively used or not, in order to secure complete control. I believe that Amalgamated Wireless Australasia Limited has instituted an action against Farmers, of Sydney, and Myers, of Melbourne, to see whether certain patents are of any value. If neither Farmers nor Myers contest the action, the matter will remain unsettled and in an unsatisfactory position, unless the Government assumes that the mere fact that the case was not contested indicates that there is value in the patents. . I hope that the Government will be persuaded that it is its duty to. control wireless broadcasting. There may be justifiable arguments against Government enterprises, but no doubt lack of proper management has caused many to fail. It will be recalled that a Minister of New South Wales actually supported some government enterprises that were handed on by the Lang Government. Brennan . and Taylor showed Australia what can be done. Let us hope that this Government will not fail to benefit by their teachings. Mr. Taylor remained, in Australia, and when the Telefunken Company’s designs were thwarted many private concerns which lost money thereby discontinued advertising in his publications and in consequence his business suffered. He personally bore the cost of all cablegrams he sent to the United Kingdom. Past Governments’ unkindness to Louis Brennan was repeated in the attitude towards Mr. Taylor, and the neglect to refund to him the large sums of money which he had expended for the noble purpose of benefiting his country. Necessarily the debate this morning deals with only a portion of the very large problem of wireless. Dr. J. P. B. Madsen, Russell Professor of Engineering at the Sydney University, returned recently from a -nine months’ tour of Europe and America, and having been asked by the Council of Scientific and Industrial Research to inquire into radio research, got into touch with the Radio Research Board of Great Britain, and attended the International

Radio Conference at Washington. I have no doubt that the advice he will be able to give, supplemented by that of Mr. Brown, the gifted and highly intelligent secretary of the Postmaster-General’s Department, will enable the Government to do much more than it has yet done to promote the good of the community in connexion with wireless telegraphy and broadcasting. I am certain that if the people of Australia were consulted by referendum they would declare by an overwhelming majority that they desired the Government to assume complete control of wireless. I sincerely hope that the Government will strike out on new lines, and promote the welfare of Australia and the good of humanity by freeing wireless from all control but that of the State.

Mr MAKIN:
Hindmarsh

.- The honorable member for Maribyrnong is to be congratulated upon having brought this matter before the House. The time is opportune to review our policy in regard to broadcasting, and to realize that if the existing services are to be co-ordinated the Government must have a more complete control over them than it has now. Wireless broadcasting plays a very important part in the life of the community, not only as a form of entertainment, but also as a means of disseminating news to the distant parts of the Commonwealth. The present services are not quite as complete and efficient as they should be. Of course I realize that broadcasting is still in its infancy, and too much must not be expected of it in the pioneering stage, but past experience tells us that if the Government had more direct supervision over broadcasting the people would get a much more satisfactory service.

Mr Gibson:

– We have that supervision to-day.

Mr MAKIN:

– It is not . as complete as it should be. The Postmaster-General suggested the possibility of two main broadcasting stations being established in the vicinity of Melbourne and Sydney, and their programmes being distributed throughout the country by relay stations. This will not be altogether acceptable to the people of distant States. Residents of Queensland, South Australia and Western Australia would derive more pleasure from programmes of local interest and contributed by local talent. The Minister’s scheme would involve the concentration of the best talent in two centres and the dissemination of news that might have very little interest for the remoter States. The Melbourne station might be broadcasting the account of a boxing match and the Sydney station a scientific lecture.

Mr Gibson:

–The different stations would operate separately, but I suggested that they could be all linked up in one chain.

Mr MAKIN:

– I admit that it would be of advantage to the owners of modest crystal sets in South Australia if they could occasionally listen in to Melbourne or Sydney programmes. The worker there is unable to afford the expensive receiving set that is required to pick up programmes broadcast from 3LO and 2FC. Much as we in South Australia appreciate the service given by 5CL we would like a little more variety, but that will not be possible if the broadcasting is to be from only two centres, and substations in other States are to be deprived of the opportunity to disseminate programmes and news of local interest.

Mr Gibson:

– That is not suggested. I stated that the whole chain of stations could be linked up but worked separately.

Mr MAKIN:

– That is done at times.

Mr Gibson:

– It cannot be done now.

Mr MAKIN:

– At intervals, all too rarely I admit, programmes from other States have been broadcast in South Australia. For instance within the last fortnight we heard clearly the reception of. Captain Hinkler in Brisbane, it being broadcast in South Australia through 5CL.

Mr Gibson:

– That was broadcast through our telephone system.

Mr MAKIN:

– No doubt the speeches were conveyed by land line from Brisbane to Adelaide, but they were then put on the air by 5CL and were heard as distinctly by listeners-in there as if they were adjacent to 4QG. It would be possible to do more interstate broadcasting by the use of land lines, and that fortifies the argument of the honorable member for Maribyrnong; if Government land lines are to be used for broadcasting, the Government should control the service entirely. We desire to conserve to our people this great public utility, so that the maximum service may be rendered at the minimum cost. At present the programmes broadcast by private companies are affected by the obligation to satisfy the shareholders, Generally speaking, the programmes of 5CL maintain a fair average quality, and as the company controlling it has not made very great profits, it is evident that the money at its disposal is not sufficient to enable it to provide more ambitious programmes ; but listeners-in in South Australia require something better than gramaphone records for the greater part of the day. I believe that if the services of the various broadcasting agencies could be co-ordinated without the possibility of constituting a private monopoly, especially of theatrical interests or of Amalgamated “Wireless, and the management were not influenced by the need for winning profits for the shareholders, listeners-in throughout Australia could receive better value for the fees they pay. I do not think that even if the present companies combine the programmes will be substantially improved. If a monopoly is created the development of this important utility will be retarded, and people in distant parts will not be served as they should be, especially in regard to news items that are of the utmost importance to them and their business enterprises. I hope the Government will pay heed to public opinion, and instead of encouraging the movement towards the creation of a monopoly, will take steps to ensure a greater measure of Government control over wireless generally.

Question resolved in the negative.

Sitting suspended from 12.46 to 2.15 p.m.

page 3920

QUESTION

CANBERRA

Erection of Bridge - Garage Accommodation at Hotels.

Mr CHARLTON:

asked the Minister for Home and Territories, upon notice -

Referring to his statement on the 7th instant (Ilansard, page 3612) that consideration had been given to the question of constructing a bridge across the Molonglo River at the ford near St. John the Baptist’s Church, will he state what decision has been arrived at in connexion with this proposal ?

Sir NEVILLE HOWSE:
Minister for Health · CALARE, NEW SOUTH WALES · NAT

– No decision has yet been reached regarding the construction of the bridge referred to by the honorable member.

Mr CHARLTON:

asked the Minister for Home and Territories, upon notice -

  1. Is it a fact that the Federal Capital Commission intends to build garage accommodation for fifteen cars at the Hotel Acton, six at the Hotel Ainslie, and twelve at the Hotel Wellington?
  2. Is there already a greater demand for garage accommodation than could be supplied by the proposed new provision?
  3. Do these hotels lose a great deal of business because motor tourists prefer not to visit establishments where they cannot garage their cars ?
  4. Does the Commission intend to pursue its practice of failing to supply sufficient garage accommodation ?
  5. Is it a fact that the failure of the Commission to supply garage accommodation has already cost motor car owners resident in or temporarily staying at these hotels large sums of money for damage and depreciation sustained by cars which are constantly exposed to the weather?
Sir NEVILLE HOWSE:

– I shall obtain the information desired by the honorable member, and convey it to him as soon us possible.

page 3920

QUESTION

DEVELOPMENT AND MIGRATION COMMISSION

Report on Gold Mining Industry.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice-

Can he state when the second and final report of the Development and Migration Commission, dealing with assistance to the goldmining, industry, will be laid on the table of the House?

Mr BRUCE:
NAT

-It is anticipated by the Commission that the report will be available before the end of April.

page 3920

QUESTION

COMMISSIONS, COMMITTEES, AND BOARDS

Mr CHARLTON:

asked the Prime Minister, upon notice -

When does he expect to be able to furnish information asked for on the 22nd February last regarding the cost of commissions, committees, and boards for 1926-27?

Mr BRUCE:
NAT

– I anticipate being in a position to furnish the honorable member with the desired information next week.

page 3920

QUESTION

AUDITOR-GENERAL’S REPORT

Mr CHARLTON:

asked the Treasurer, upon notice -

With reference to the statement of the Treasurer concerning the suggestions in the Auditor-General’s last annual report for clearly setting out the financial position of the Commonwealth, will he, in view of its great importance, obtain and submit for the information of the House the opinion of the AuditorGeneral on the assertions of the Treasurer?

Dr EARLE PAGE:
Treasurer · COWPER, NEW SOUTH WALES · CP

– The suggestions of the Auditor-General were set out in his last annual report. They have ‘been most carefully considered by the Government in- accordance with the provisions of section 54 of the Audit Act, and for reasons already stated it has been decided not to adopt them. In view of this decision it is not proposed to take further action in the matter.

page 3921

QUESTION

WAR SERVICE HOMES

Mr MACKAY:
LILLEY, QUEENSLAND

asked the Minister for “Works and Railways, upon notice -

Whether it is a fact that applications for War Service Homes are being postponed for the reason that the funds available during this financial year are required to meet the expenditure on homes already approved?

Mr HILL:
CP

– Yes. There has been a large increase in the number of applications received during the present financial year, and the funds available will not be sufficient to enable the whole of those applications to be completed before the 30th June next, but they are being dealt with in order of priority.

page 3921

QUESTION

DUTIES ON TEXTILES

Mr LAZZARINI:
WERRIWA, NEW SOUTH WALES

asked the Prime Minister, upon notice -

Whether he will take steps to have the duties on textile goods, as recently amended, finalized before the Easter vacation?

Mr BRUCE:
NAT

– The tariff is at present before the Senate, and certain requests have been made by that House for the amendment of the schedule. The Government is most anxious to finalize the matter, but when this can be done will be dependent upon the date when the consideration of the schedule is completed in the Senate.

page 3921

QUESTION

AUSTRALIAN COMMONWEALTH LINE OF STEAMERS

Tallying CHARGES

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice -

  1. What is the name of the firm which tallies the cargo into and out of the steamers of the Australian Commonwealth Shipping Line in London?
  2. Is any member of this firm related to any member of the Commonwealth Shipping Board; if so, who is the member of the Shipping Board, and what is the nature of the relationship?
  3. What is the approximate annual amount paid in London for tallying :
  4. Were tenders called for letting the contract for tallying, and, if so, when was the last tender called?
Mr BRUCE:
NAT

– The information, is being obtained.

page 3921

QUESTION

SUPERANNUATION

Increase of Pensions

Mr COLEMAN:
through Mr. Makin

asked the Treasurer, upon notice -

  1. When will an amending Superannuation Bill be introduced?
  2. In view of the fact that the cost of living has increased since the Superannuation Act was passed, will he increase the minimum pension prescribed to’ £3 per week?
Dr EARLE PAGE:
CP

– The introduction of an amending Superannuation Bill is not contemplated.

page 3921

QUESTION

RANDWICK MILITARY HOSPITAL

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

asked the Minister in charge of Repatriation, upon notice -

  1. What is the total number of patients at present being treated at Randwick Military Hospital ?
  2. How many of these inmates are drawn from country districts?
  3. Is any method employed whereby patients from country districts are ensured admission to the hospital in fair proportion to their numbers ?
Sir NEVILLE HOWSE:
NAT

– Inquiries will, be made, and the honorable member will be furnished with a reply as soon as possible.

page 3921

QUESTION

POSTAL DEPARTMENT

Dismissals

Mr GIBSON:
CP

– On the 9th March, 1928, the honorable member for Melbourne (Dr. Maloney) asked the following questions : -

  1. Is it a fact that 30 or 40 married men and returned soldiers have been dismissed from the General Post Office, Melbourne?
  2. Is it also a fact that a considerable amount of overtime is being worked at the General Post Office, Melbourne?
  3. If so, will the Minister take action to prevent overtime being worked, with a view to reinstating such married men and returned soldiers ?

I am now in a position to furnish the following information : -

  1. Consequent upon staff adjustments, and owing to a number of permanent officers taking up duty in newly-created positions hitherto occupied by temporary hands, it has been necessary to make a big reduction in the temporary staff of the Mail Branch. Melbourne. Since January of this year 36 temporary married employees and three single men (all returned soldiers) were required to cease duty. There are now no single temporary employees’ on the staff of the Mail Branch.
  2. The overtime worked in the Mail Branch is mainly in connexion with the English mail, which arrives at the week-end and which must be disposed of as early as possible at the beginning of the week.
  3. If the men were employed with the view of obviating overtime, their services could not economically be utilized during the rest of the week, and therefore it is not practicable to take such a course.

page 3922

QUESTION

COMMONWEALTH BANK

Architects’ Fees

Dr EARLE PAGE:
CP

– Yesterday the’ honorable member for Melbourne (Dr. Maloney) asked the following question : -

What was the total amount paid in fees by the Commonwealth Bank to the architects, Messrs. Kirkpatrick and Messrs. Kirkpatrick and Miller, from the inception of the bank to the present date?

The honorable member was informed that the question would be brought under the notice of the Commonwealth Bank. This was done, and the bank has advised that the fees paid to the firm referred to were the usual architect’s fees for work carried out. An amount in dispute between the bank and Messrs. Kirkpatrick was settled by the decision of an independent arbitrator agreed on by both parties. Neither of the firms referred to has been employed by the bank on any additional new buildings since the inception of the board.

page 3922

QUESTION

WAR-TIME PROFITS TAX

Refunds

Dr EARLE PAGE:
CP

– On 7th March, 1928, the honorable member for Perth (Mr. Mann) asked the following question : -

With reference to the question asked by the honorable member for Perth on 27th October last, and answered by the Treasurer on 18th November, concerning refunds of war-time profits tax, will the Treasurer supply information showing the amounts of taxation refunded or remitted in the respective groups set out in his reply?

I am now able to furnish the following information : -

Statement of the total refunds and remissions under sections 1 to 3, and section 4, respectively, of the War-time Profits Tax Assessment Act 1926.

In two cases in South Australia, sections- 1 to 3 operated in addition to section 4 - the total refund being £1,105. The amount of £1,105 has not been included in the figures set out above.

page 3922

QUESTION

NAVIGATION ACT

Repeal in Northern Territory.

Mr PATERSON:
Minister for Markets · GIPPSLAND, VICTORIA · CP

– On 9th March, 1928, the honorable member for Reid (Mr. Coleman) asked the following questions : -

With specific reference to the suspension of sections 14 and 43 of the Navigation Act, in so far as shipping engaged in Northern Territory waters are concerned -

What is the power upon which the Minister relies for ordering that any vessel in the Australian coastal trade shall not carry a duly certificated master ?

Is the competent seaman who is to take the place of the master to be deemed to be the master of the vessel, and, if so, is he to be paid wages in accordance with the rates ruling for masters in the Australian coastal trade?

Are the “capable deck hands” (referred to in a statement appearing in the press reporting the action of the Minister) which the vessel is to carry in place of qualified able seamen within the meaning of the act to be persons with sea experience, and. if so, what experience ?

Before suspending sections 14 and 43 of the Navigation Act, did the Minister refer the matter to the Marine Council, and, if not, what are his reasons for not referring the matter to the Marine Council?

Does the Minister exempt the vessels under consideration from the obligation to pay Australian rates of pay to the seamen, or persons in lieu of seamen, forming the crews?

Are the vessels concerned to be allowed to carry passengers, and are they to ply for hire in the ordinary way of vessels carrying on the Australian coastal trade?

On behalf of the Minister for Trade and Customs, I am now able to furnish the following information : -

  1. The recent exemption of vessels under 50 tons gross registered tonnage trading exclusively within the limits of North Australia was made under the power conferred upon the Governor-General by section 422a of the Navigation Act. The exemption is likely to apply to one, or perhaps two, small auxiliary ketches only, trading under arrangement with the North Australia Commission. 2.(a) The person in charge of the vessel will be technically the master. He will probably also be the owner of the vessel. ( b ) The exemption does not in any way affect the question of the wages to be paid.
  2. The capable deck hands required to be carried will be persons with sea experience in thehandling of the particular type of small vessel employed.
  3. No. Such was not necessary under the Navigation Act.
  4. Section 289 of the Navigation Act requiring that Australian rates of wages shall be paid to seamen employed in vessels engaged in the coasting trade, has no application to North Australia or any of the Commonwealth Territories.
  5. Subject to compliance with the requirements of the Navigation Act as to provision of, life-saving equipment, &c., the exempted vessels willbe free to carry passengers and cargo” between places within the limits of North Australia, but only, in common with other vessels, in so far as is consistent with the safety, of the vessel and of the lives of those on board.

page 3923

QUESTION

BOX SHOOKS

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– - On 9th March, 1928, the honorable member for Dalley (Mr. Theodore) asked the following questions : -

  1. What was the total quantity of box shooks imported to Australia during each of the financial years from 1st July, 1922. to 30th June, 1927?
  2. What is the total measurement in superficial feet of the timber contained in these shooks ?
  3. From what countries were the box shooks imported?

On behalf of the Minister for Trade and Customs, I am now able to furnish the following information : -

  1. The import statistics are recorded in the form shown in the attached statement, which sets out the particulars desired for the years mentioned. 2 and 3. Covered by reply to 1.

page 3924

NEW SOUTH WALES COALFIELDS

German Developmental Project

Mr BRUCE:
NAT

– Yesterday the Leader of the Opposition (Mr. Charlton) asked me to make available certain correspondence with Mr. J. Fanning, of Sydney. I desire to inform him that the required documents are being placed on the table of the library.

page 3924

PAPERS

The following papers were presented : -

New Guinea Act - Ordinances of 1928 -

No. 4 - Appropriation 1927-1928.

No. 5 - Contracts.

No.6 - Mining.

Northern Australia Act - Ordinances of 1928-

Central Australia -

No. 3 - Birds’ Protection.

No. 4- Health.

North Australia -

No. 3 - Birds Protection.

No. 4- Health.

page 3924

FINANCIAL AGREEMENT BILL

Second Reading

Debate resumed from 15th March (vide page 3884), on motion by Mr. Bruce -

That the bill be now read a second time.

Upon which Mr. Charlton had moved by way of amendment -

That all the words after the word “ That “ be left out with a view to inserting in lieu thereof the following: - “the bill, involving as it does an alteration of the Constitution, be postponed until Parliament has had an opportunity to discuss a comprehensive scheme of constitutional reform including the evidence taken before the royal comission now sitting and its proposals when made.

Mr SCULLIN:
Yarra

. -Every honorable member who has spoken on this agreement has stressed the point that it is of great importance. I agree that it is; but I would add that it is a subject that should not be made the plaything of governments or parties. It is far too important for that. I would further add that, when discussing the financial relations of the Commonwealth and the States, we must keep in mind that we are speaking for one people, that an injury to one section is an injury to all sections, and that the benefits must be for all. So I find myself unable to consider the bill from the point of view of either the State parliaments or the Federal Parliament. I cannot make any distinction. We must look at this proposal from the view-point of the people of Australia and the interests that are represented both by the Commonwealth and the States.

Mr Maxwell:

– Should not. we look at every question from that point of view?

Mr SCULLIN:

– I think so; but I stress that point on this occasion because the debate has proceeded to a great extent upon the lines of how the agreement will serve or injure State or Commonwealth interests. Some honorable members have said that if the agreement is ratified it will harm the States. Others have said that it will injure the Commonwealth. Our duty is to consider whether it will injure or benefit Australia as a whole. We must have a broad outlook and adopt a consistent attitude. Consistency is more essential in respect of the financial relations of the Commonwealth and the States than in respect of any other question, and this subject requires definite expression of opinion. One thing that stands out more than another is the remarkable vagaries of this Government concerning the settlement of the financial relations of the Commonwealth and the States. The changes that have been made are truly astonishing. I can respect an honorable retirement from a position that has become untenable ; but it should be made frankly and not with the pretence of standing firm. This Government has abandoned practically every position that it took up at the original stage of this controversy, yet it pretends that it is standing firm to the basic principles that were enunciated by the Treasurer in 1926. Every one of. those alleged basic principles are to-day regarded as of minor importance; in fact, they are being almost totally disregarded. It is difficult, therefore, for people to follow the Government in its various windings and turnings in connexion with this important subject. Honorable members are all familiar with the history of the negotiations between the Commonwealth and the States. In June of 1926 the Treasurer delivered a speech which was followed by a speech by the Prime Minister in 1927. Subsequently, a discussion took place in this

House in which both sides of the chamber joined, and it was then my lot to listen to some of the strongest speeches in condemnation of the Government’s proposals that I have ever heard. The protests of honorable members in this House were followed by protests outside of it, not only from the governments and oppositions of every State parliament, but also from the press and public platforms of this country. The Leader of the Opposition, who made a careful and convincing contribution to this debate, quoted the opinions expressed by a number of honorable members who sit behind the Government. One of its supporters told the Government that if it, persisted with the bill it would be visited by “ a Nemesis swift and sure.” Another said that this was “ a mistaken and misbegotten measure.” Another prophesied that it would “ land the Government in the soup.” Another declared that the Government was “ committing political suicide.” Still another remarked that the Government’s action would cause it to be swept from power. So the Government realized that it could not proceed with its proposals. The solid opposition from this side of the House, combined with strong opposition from’ a large section of the Government’s own supporters, the unanimous disapproval of every State Parliament, and the public outcry, forced the Government to retreat from its original position. But it does .not frankly admit that. It still pretends to be standing by the same principles that it enunciated at the outset. The former proposals were that the per capita payments should be withdrawn, that no money should be returned by the Commonwealth to the States, and that certain taxes should be reduced. Each of those proposals has, in effect, been abandoned, although, technically, the withdrawal of the per capita payments was agreed to by the Parliament. Beyond the carrying of the measure that cancelled those payments to the States, no immediate change has been made. The moneys that were being paid to the States are still being received by them. Exactly the same amount as that handed over last year is calculated as the sum that will continue to be paid, plus other sums. Is not that a recognition of the vicious principle that the Treasurer, supported by the Prime Minister, formerly denounced? What were looked upon as basic principles in the first proposal of 1926 are now considered as of minor importance; in fact, are almost totally disregarded. Subsequent to the introduction of the first bill, the Treasurer pointed out that the Commonwealth would throw the whole of the responsibility for direct taxation upon the States, and then the people would know whom to blame. In December, 1927, however, the Prime Minister, in introducing the present bill, said that the real reason that actuated Ministers in bringing the measure forward was that they were not prepared to go out of office and leave the States at the mercy of any chance majority in this Parliament. Are we to believe that the Prime Minister and this Government are the States’ only friends ? To prove that they were great friends of the States they took away the payments that the States had been receiving ever since the expiration of the Braddon section of the Constitution. This is the first government that actually attacked the per capita grant. Was that an act of disinterested friendship for the States?

Mr Brennan:

– It had to be cruel to be kind.

Mr SCULLIN:

– Yes, like the lion that swallowed the lamb to protect it from the winter blasts. The Prime Minister said that there were other reasons, of course, for the introduction of the bill, but they were not of sufficient importance to justify the Government in taking its life in its hands. One of those reasons was that it was wrong for one government to raise revenue for another to spend. Honorable members have not forgotten that that was the basic principle on which the Government originally rested its case. That was the vicious principle that had to be ended at all costs. Yet we were informed only last December by the Prime Minister that that was not the underlying reason for this measure, but that the bill had been introduced because the Government had to protect the States from governments that might come into power in the future. He also said that another reason for the bill was the present duplication of taxation. But those principles are not put forward as fundamental to-day ; they have been abandoned. The Government now treat them as of less importance than they originally were, because then it was basing its case upon them ; now a . new foundation has been found on which the Government is building its structure. Let us go back to the conference of 1926, when the Prime Minister met the State Premiers. He produced a memorandum setting forth the views of the Commonwealth Government, and placed three objections to the existing financial arrangements before the States. In the first place, he said that the existing per capita system was wrong in principle, because it meant that one government was raising money that other governments spent. The second point was that the system was unfair in its incidence, because the payments were based upon population, and his third objection was that it prevented the Commonwealth . from discontinuing the taxation of the income of individuals. His proposals were that they should separate Commonwealth and State finances, because indirect taxation was the proper field for the Commonwealth, and direct taxation was the proper field for the States; that the Commonwealth should evacuate the field of income taxation so far as individuals were concerned; and that the per capita payments should be discontinued. One only needs to read the present bill to see how far the Government has ventured from its original proposals. At the conference in May, 1926, the Prime Minister said -

The underlying principle is that we must get rid of the position of two governments collecting money in the same field, and one government collecting for the other government.

That principle has now been abandoned. The same amount of money will be handed over to the States this year as was paid to them last year before the withdrawal of the per capita grant. “When the Treasurer made his speech in June, of the same year, the Government’s proposals had changed. Instead of abolishing the tax on individual incomes, the Government proposed to retain it and reduce the total income tax rate by 40 per cent., while other taxes were to be repealed. In none of the proposals, either at the conference in 1926, or in the bill brought down in that year, was there one suggestion that the Government intended to take over State debts. That was absolutely an after- thought. Here is a short quotation from the Treasurer’s speech, as reported in Hansard of 4th June, 1926, page 2677 -

It is proposed that the Commonwealth shall evacuate the held of land taxation, estate duties and entertainments taxation….. . At the same time the Government will cease the capitation payments to the States, and make certain reductions in the rate of income tax.

That scheme was to take effect from the 30th June, 1926. So keen was the Treasurer and the Government to carry it out that it was proposed to give the States less than a month to re-adjust their finances. The bill was introduced on the 4th June, 1926, but no further speech was made on the subject until six months later, when the Treasurer said that the proposal then submitted was a step towards the complete separation of State and Commonwealth taxation activities. But there has been no such . separation. Rather has there been a linking up, and arrangement is now proposed which is to last for at least 58 years. I am not complaining about that.We had already pointed out that there was no virtue in the mere separation of Commonwealth and State finances, but that, if it were in the interests of the people, they should be separated. On the 2nd March. 1927, the Prime Minister said -

Naturally, the States are not prepared to yield revenues that they have enjoyed in the past and assume new taxation obligations.

The Treasurer remarked that the public would know whom to blame for the taxation.

Mr Gregory:

– Yet the AttorneyGeneral told us that there . was no coercion !

Mr SCULLIN:

– He said that it was a cordial agreement, and would have us ‘ believe that the Commonwealth and the States were falling upon each other’s’ necks. The Prime Minister said that the evil of the present arrangement was that one government was raising money that another government spent, and the Treasurer declared that to be “ a vicious principle.” Now this vicious principle is to be given permanency for 58 years. Of course the Government will reply, “Not so; we are not handing money over to the States to spend as before. We are taking over State debts to a certain amount, and paying in interest a sum similar to that previously paid by way of the per capita grant.” What is the difference in practice between the present proposals and the former arrangement? We are not juggling with terms; we are dealing with actualities. Prior to the withdrawal of the per capita payments, the States had to meet their interest bills, including £7,000.000 odd for that portion of the State debts for which the Commonwealth will now be responsible. And the States could use it to pay interest to the money-lenders. Now the Commonwealth Government, instead of taking that £7,000,000 and handing it to the States and the States handing it to the money-lenders, pays the money direct to the money-lenders, and the States will be able to spend their revenue in other directions than in the paying of interest. Where is there any essential difference between that system, and what obtains now? If there is any vicious principle involved in the spending of such money it will apply equally to the roads grants, and to the housing scheme, assuming that any houses are ever built under it; but can there be anything vicious in the principle of handing money over to the States to spend if it is accepted as the proper thing for the. Commonwealth to pay the interest on State debts, instead of the States paying that interest themselves? There is really no difference between the two things. The Prime Minister in the same speech said -

If we had accepted the contention of the States that they had any right, constitutional, legal or moral, to this payment, this Parliament would repudiate our action.

Probably it would. This Parliament must always retain its right over its own finances, and I for one never said that the States had any constitutional or legal right to this money. I claim, however, that while it is already within the power of the Commonwealth Government to reduce or cancel this payment, it was the duty of the Government to show that such action was justified by the circumstances. This the Government could not do, because it was, at that time, enjoying a series of surpluses, while the States were suffering from financial stringency, and could not pay their way. I maintain that the question should, be decided on its merits; but what did the Prime Minister do after he had said that he could not accept the contention of the States that they had any right to the payment? He brought forward this agreement which actually makes similar payments binding for 58 years, and under it the States are to receive the same amount of money as Ave gave them last year. The present scheme provides that the Commonwealth will take over the State debts, amounting to £672,000,000, and will contribute towards the interest on them every year the sum of £7,584,912, plus £885.000 of sinking fund contributions, making a total of £8,469,912 a year. In addition to that there will be the increased interest on transferred properties amounting to £163,865, making a total annual payment to the States of £8,633,777, whereas the per capita payment for the year 1926-27 was only £7,734,000. Thus the increase in the amount paid during the first year of this agreement over that paid to the States in 1926-27 under the per capita system will be £898,787. Listen to what the Prime Minister said in March of 1927 as an excuse’ for the withdrawal of the. per capita payment. He said that the Commonwealth had no surplus revenue to distribute. The legitimate revenues had been more than exhausted by obligations the Commonwealth had had to assume. The Treasurer enumerated such items as the cost of the war, and expenses incurred after the war, mentioning the old-age pensions, telling how they have grown; the war pensions and the burden they have become, and said that the Commonwealth could no longer continue the per capita payment. Yet, under this proposal, the Government will give to the States £898,787 more this year than last. Where is there any consistency in such an attitude? The “Prime Minister, buttressing up his case, said that the per capita system was unjust. It was a principle that could not be justified, he said, to distribute money on a population basis. The Attorney-General last night supported that argument, and informed the House that the per capita system had broken down. What proof did he put forward? He said that it had broken down because Western Australia and Tasmania had asked for special grants in addition to the per capita payment.

Mr Maxwell:

– That does not affect the principle.

Mr SCULLIN:

– As the honorable member for Fawkner truly says, that does not affect the principle. If there is to be no adjustment of the system it must be assumed that we have evolved a system that is perfect, and one that will never require adjusting. Let us see what the Government proposes to substitute for the -existing system when it has ended the practice of distributing money to the States on a population basis. Let us make a comparison between two States - New South Wales, with the largest population, and Tasmania with the smallest. Under the old arrangement New South Wales received in per capita payments £2,978,434, while Tasmania received £267,367. Under the new arrangement New South Wales will receive £3.304,231, and Tasmania will receive £304,370; New South Wales will receive an increase of £325,880, and Tasmania an increase of £37,000, leaving the ratio the same as it was before. In other words, the payments under the new agreement axe being distributed on a population basis, the very principle which the Government has condemned.

Mr Mann:

– All the distributions under the agreement are on a population basis.

Mr SCULLIN:

– It is laid down in the Constitution that the taking oyer of State debts is to be done on a population basis. By this agreement the population basis of distribution is being maintained for 58 years, and this is the principle which we have been told has broken down. As a matter of fact, every principle that has been enunciated by the Government on this subject has subsesequently been abandoned by it. But what is wrong with the principle of distributing money on a population basis? We are distributing the funds derived from the customs, and the customs duties are essentially a per capita tax. Therefore, there can be nothing wrong with the principle of distributing the proceeds of a per capita tax on a per capita basis.

Mr Gregory:

– Every one pays his share through the customs.

Mr SCULLIN:

– Of course, and the larger the population the more is paid.

Attempts have been made to show what the effect of this agreement will be in 58 years’ time. We cannot calculate for 58 years ahead* The present Parliament cannot bind future parliaments, and governments of the future can cancel. this agreement which we are now asked to support.

Mr Fenton:

– Governments have done such things before.

Mr SCULLIN:

– I do not say that it has been done before; but it will be possible, by the unanimous consent of the States, for this agreement to be cancelled.

I come now to the new feature of the agreement, the consolidation of State debts. I submit that this should have been done without any interference whatever with the per capita payments. It may be argued that when these payments were withdrawn a very fine lever was provided to use on the States, by saying to them, “ We shall refund this money to you in another form if you will agree to the consolidation of debts.” I have not heard that argument put forward, but it is the only one that could be advanced by the Government to convince the House that it was justified in interfering with the per capita payments. I suggest, however, that the argument would, in any case, be unworthy, because I believe that the State Governments of to-day are sincere in their desire to consolidate the .debts, and to establish the credit of Australia on a sound basis. The Government repudiated any suggestion that the States had acted under duress. If it was not for the purpose of forcing the States to agree to the consolidation of the public debts, there was no need for the Commonwealth Government to withdraw the per capita payments at all. It could have continued these payments, and could have called the representatives of the States together and evolved a plan for the consolidation of State and Commonwealth debts. I find myself in conflict with some honorable members who have argued against the consolidation of debts, and have said that it would be of no advantage to the Commonwealth. The honorable member for Perth (Mr. Mann) went to considerable pains to advance that argument. I cannot agree with any one who suggests that the consolidation of the public debt will not eventually be an advantage. The advantage may not he immediate, but it must become apparent in the future. For over twenty years I have been an enthusiastic advocate of this course. At the first Commonwealth election I fought in 1906, I made this a feature of my campaign. It was . the policy of the Labour party, as it was at that time the policy of the Liberal party. It is the one redeeming feature of the present proposal. The control of future borrowing and of the whole of our public debt, the conversion of our loans as they fall due, and the flotation of new loans by a single authority must he m the interests of Australia. Further, the establishment of a common sinking fund must improve the credit of this country, and establish confidence in the soundness of Australian finance. Our aim should be one borrower and one common stock for the whole of Australia. Any one who will deny the soundness of that will deny the soundness of the statement that in unity there is strength. In every walk of life to-day we find people organizing and uniting; but I would point out that this is no discovery of this Government. It has merely been the fortune of this Government, that it has been able to bring this proposal forward. As far back as 1904 the Honorable William Knox proposed a Council of Finance to effect the transfer, consolidation, conversion, and renewal of the exist- ° ing public debts of the States, and to undertake the flotation of new loans authorized by the parliaments of the States and the Parliament of the Commonwealth, and to manage the public debts of the Commonwealth and the (States if required. In 1906, Sir J ohn Forrest, who was then Commonwealth Treasurer, prepared a memorandum in which he showed that if per cent, interest could be saved on our consolidated public debts we should by 1952 save £15,600.000.

Mr Gregory:

– And that was calculated on much smaller public debts than we now have.

Mr SCULLIN:

– That is so. In 1906 the Hon. Robert Harper presented a memorandum to the House along similar lines, and in 1908 Mr. King O’Malley did the same. In 1909 Mr. Fisher made a pronouncement upon the subject. He declared that we were losing £1,000,000 per annum by not having one authority to control our debts and financial matters generally.

What arguments have been advanced against the formation of a compulsory Loan Council? It is said that the States by borrowing smaller sums at different times are able to obtain easier terms than the Loan Council could obtain by borrowing a large sum at the one time. That is a specious argument. The Loan Council, in my opinion, can make a far better bargain than the States could do by acting separately. It would also be able to make a better distribution of the money than the Commonwealth and States could do if they acted as seven distinct bodies. It must surely be apparent to honorable members that seven competitors on the loan market for whatever money is available may be compared with seven brothers who attend the auction sale of a farm and bid against each other for the property. I listened to a speech which the late Hon. Alfred Deakin delivered about 25 years ago, in which he said that competitive public borrowing was like a game of “beggar my neighbour.” He believed, and so, I think, has every Commonwealth Treasurer since federation, that centralization of borrowing would be advantageous to Australia.

Dr EARLE Page:

– There jb scarcely a State Treasurer who would disagree with that view.

Mr SCULLIN:

- Sir William Mcpherson, a recent Treasurer in Victoria, holds the opposite opinion, but he is the only State Treasurer of recent times that I can think of who thought so.

It has also been contended that if a Loan Council were given the power to do all our public borrowing, the States might be forced to take money when they did not want it. But there is nothing in that contention. No doubt the States would requisition the Loan Council for the money they required, and indicate when they needed it. They would not be obliged to accept money for which they had not asked. It was said by one State Treasurer at a conference in Melbourne that the States operated upon a system of bank overdrafts, and that when the overdraft reached a sufficiently high figure, a loan was floated to meet it. Surely the States could adopt the same principle with the Loan Council. It has also been argued that participation in the operations of the Loan Council by the States would restrict State development and by the Commonwealth would restrict .Commonwealth development. It is, of course, apparent that when parties make an agreement of any kind their operations are to some extent limited. The object of the Loan Council is not to limit development, but to limit competition on the money market, and so keep the interest charges down to the lowest possible point. I submit that, by operating through a Loan Council, the Commonwealth and the States are more likely to hasten than to hinder development, for the Council will be able to make cheaper money available. If one could admit the restriction argument as a good one to advance against the Loan Council, it would have to be admitted as good in many other ways. Every law that is passed is a restriction of liberty, and to argue against the restriction of individual liberty is to argue in favour of anarchy. We have had too much anarchy in Australian finance.

A voluntary Loan Council has been operating in Australia for some time. One of the objects of this agreement is to make it permanent. Organization is a big factor in successful commercial enterprise to-day. Very often it has the effect of increasing the price of commodities to the people. In every advanced country in the world persons engaged in the same line of business are combining to increase their profits. The old spirit of competition is being dropped. If that policy is good for private enterprise, because it leads to increased prices for commodities - which, by the way, is often bad for the community - surely it is good for the Government, because it leads to decreased interest rates on borrowed money, which is good for the community.

I am strongly in favour of the proposal to consolidate our public debts, and to place them under the control of a Loan Council upon which the Commonwealth and the States would have proper representation. But one of the weaknesses in the scheme, which I see no way of overcoming at present, is that the States, by placing their big public utilities under outside control, may defeat the objects of the Council. We have to-day in the different States metropolitan boards of works, tramway boards, harbour trusts, and other similar bodies, all of which are floating loans for their own purposes. If the States were to place such utilities as the railways under the control of similar instrumentalities our object in forming the Loan Council might be largely defeated. We should then be left with the management of the States’ debts as a Commonwealth responsibility, but have no effective control oyer future borrowing. The only protection that I can see against such an eventuality is that the States which elect to follow such a policy would lose, on any new loans, the advantage of the sinking fund provisions set out in the agreement. I should think that a State would be in a somewhat desperate position before it would voluntarily forego such an advantage; but this is, nevertheless, a weakness in the scheme.

I assume that our adoption of this proposal would ultimately lead to one national inscribed stock.

Mr Maxwell:

– Does the raising of loans by the States necessarily involve competition ?

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The States have their own clients.

Mr SCULLIN:

– I am quite satisfied that separate borrowing does result in competition.

Mr Maxwell:

– If this scheme becomes operative will there not still be State as well as Commonwealth inscribed stock?

Mr SCULLIN:

– If there is. the scheme will have failed to achieve one of its objects.

Dr Earle Page:

– State stock will be issued ‘only at the discretion of the Loan Council.

Mr SCULLIN:

– And I should think that the Loan Council would not permit a State to float a loan separately except, under very special circumstances. It appears to .me that eventually 98 per cent, of the public debts of Australia will be converted into one national stock, which will become known throughout the world and will be far more easily negotiated than numerous State stock would be, for it will be recognized by those who have money to invest. The honorable member for Fawkner (Mr. Maxwell) asked a moment ago whether separate borrowing necessarily meant competition. I have known three, four and even five States of the Commonwealth to be on the money market at the one time competing with each other for the money available. That necessarily engenders competition.

Mr Maxwell:

– Only if there is insufficient money to go round.

Mr SCULLIN:

– That is often the case. It is so at present. There is a financial stringency just now which, with many competitors on the market,must necessarily lead to increased interest rates. We should be stupid to continue competitive borrowing in Australia.

The adoption of this scheme involves an alteration of the Constitution. On that account the Leader of the Opposition (Mr. Charlton) has suggested that consideration of it should be deferred until the Government redeems its promise to hold a constitutional session. I am Strongly of the opinion that the Commonwealth Parliament should be clothed with greater powers. I stand for this Parliament having sovereign power and for the States Parliaments having only delegated powers. Some people call that unification. I am not afraid of the term. If it be unification to set up in Australia a national Parliament with complete power and State Parliaments with delegated power then I am a unificationist. I do not think that we should have only one Parliament, but we should have only one sovereign Parliament. We should be able to pass laws which it would be beyond the power of even the High Court to nullify. I look forward to the time when either step by step or by a single bound we shall reach that goal.

Mr Gregory:

– That would not necessarily be progress.

Mr SCULLIN:

– I disagree with the honorable member. I believe that Australia will never make rapid progress until her national parliament is clothed with complete power. We should not tag to any constitutional proposals a financial scheme of this character, but should place before the people a comprehensive plan. I object to this scheme being submitted to the people as a single issue, for the reason that there is a strong body of opinion throughout the Commonwealth that it does not deal fairly with the States. We have had a recent experience of submitting referendum proposals to the people under unhappy auspices. I am satisfied that the last proposals were not defeated on their merits, but because of two legislative enactments of the Government just prior to their submission. One of them was the withdrawal of the per capita payments, and the other the attempt to deport people who had long been resident in Australia. I took an active part in the campaign, and I followed closely the propaganda that emanated from all political sections in Australia. I am convinced that other things played a minor part, compared with the action of the Government preceding the taking of the referendum. We knew that the withdrawal of the per capita payments was a matter quite apart from the proposed increasing of powers, but that every endeavour Avas made to associate the two.

Mr Mann:

– That was an indication as to how the increased powers might be used.

Mr SCULLIN:

– That is quite true. It was argued that a government which sought to deprive the States of certain privileges, and which was attempting to deport people who had lived more than half their lives in Australia, was seeking additional powers. Some honorable members appear to believe that this agreement is to go in the Constitution ; for which they are not altogether to blame. I confess that I believed that we had power to take over, consolidate, and control State debts without altering the Constitution. Last night I listened very carefully to the Attorney-General when he gave his very interesting and instructive address. One must take notice of the remarks of the honorable gentleman as to the legal aspect of the subject, and he informed the House that the Government had taken action after obtaining the very best counsel obtainable. It came as a shock to me to learn that the Parliament cannot, under, section 105, do everything that is required under this agreement. Section 105 gives power to take over the debts of the State, convert, renew, and consolidate them. It also gives power to insist that the States shall indemnify the Commonwealth, and shall pay the interest on their debts, directly or indirectly, by deduction from, the surplus revenue. I cannot see why that section does not embody all necessary powers. The control of future loans appears to be the only obstacle.

Dr Earle Page:

– The Commonwealth management of future borrowings is the rock upon which every previous scheme has foundered.

Mr SCULLIN:

– The framers of our Constitution did not contemplate any such difficulties as have arisen, because practically every proposition afterwards put up for the consolidation of the State debts contemplated the control of future loans. The original Constitution provided only for taking over the State debts existing at the establishment of the Commonwealth; In 1910 a referendum was submitted to the people, and almost unanimously approved, providing that the remaining portion of the debts should be taken over; but not even then did any doubt arise as to full powers being granted by this section. I agree that we cannot take over and assume responsibility for the debts of the States without being certain of our position. The Treasurer declared that the Commonwealth Government was given absolute power, under section 1Q5, to deal with State debts. The honorable gentleman surely did not contemplate dealing with the State debts unless the Commonwealth had control of future borrowing? That would be an absurd position.

Mr Maxwell:

– Probably at the time of the framing of the Constitution people would have resented the idea of handing over future borrowing to the control of the Commonwealth Parliament.

Mr SCULLIN:

– I do not think so, as the position was very clearly put in 1910. It was stressed that not only would the debts be consolidated, but that there would be absolute control of future borrowing and loans. As far back as 1909 Mr. Andrew Fisher said that he con- templated with horror the Commonwealth going into the market as a seventh borrower, and urged that there should be only one borrowing authority.’ I shall draw attention to the contradictions contained in the speech of the Prime Minister made last year at the conference of State Premiers. It was not an extempore speech, but was carefully prepared. At page 13 of the report of that conference the Prime Minister is reported as having said, with regard to constitutional powers -

It would lie a grave blunder to embody in the Constitution a scheme of this kind.

The right honorable gentleman went on to say that the power provided was only to enter into agreements. But at page 14 the Prime Minister said -

The agreement would be embodied in the Constitution and no State could repudiate it.

What did the right honorable gentleman mean by that?

Dr Earle Page:

– He meant that no individual State could repudiate it; that there must be a unanimous agreement.

Mr SCULLIN:

– But the Treasurer misses the point that the Prime Minister stated that the agreement would be embodied in the Constitution.

Dr Earle Page:

– The original agreement is to be embodied in the Constitution, with power to vary it.

Mr SCULLIN:

– No agreement is embodied in the Constitution. The only thing contemplated by proposed section. 105a is to give power to make an agreement of this or any other description. No agreement can be embodied in the Constitution unless approved of by a referendum. The Attorney-General was certainly more clear than the Prime Minister in elucidating constitutional points; but he stressed a point last night that is calculated to mislead honorable members. The honorable gentleman said that the sinking fund would be made binding by the Constitution ; that others would be made binding only by statute. I asked him how he arrived at that conclusion, and was referred to clause 5 of the proposed new powers, in which it is stated that the agreement shall be binding. With all due respect to the Attorney-General, T submit that his contention is wrong. The preceding clause sets out that the agreement may be varied or rescinded by the parliaments. It is true that the sinking fund will have greater stability if it can be varied only by the unanimous decision of seven parliaments. That would constitute a guarantee. The AttorneyGeneral said that the sinking fund is to be made binding by the Constitution, and that the agreement will be made binding by the Constitution.

But as the agreement can be varied by the unanimous consent of the parties thereto the sinking fund can be eliminated altogether if desired. The honorable gentleman did not consider that.

The honorable member for Warringah (Mr. Parkhill) claimed that the amendment moved by the Leader of the Opposition was merely to delay matters. I remember that the Treasurer advanced a similar argument when we asked that a select committee should be appointed to deal with the Housing Bill. The honorable gentleman stated that the Opposition did not wish the Government to proceed with its housing scheme. The action sought by us would have occupied only three days - and I have not yet heard of the Government having erected a house under the scheme! The Prime Minister definitely promised that we should have a constitutional session in Canberra, and the Government appointed a royal commission to gather information for the use of honorable members when debating what I believe to be a comprehensive proposal to grant greater general powers to the Commonwealth Government. The honorable member for Warringah intimated that this matter can be separated entirely from all other considerations. I submit that it is the one matter that cannot be separated from others relating to the increase of general powers to the Commonwealth. The granting of financial, powers to the Commonwealth, and the adjustment of the financial relations of the Commonwealth and the States are amongst the most important problems concerning this Government. If we carry this bill and place it upon the statute-book we shall be committed to a further bill to add section 105a to the Constitution. Let us assume that this House decided in its wisdom to submit a referendum to the people asking for complete powers in this respect. We should look rather stupid if that were carried as, after submitting the complete question, the consequential partial question would have to be submitted to the people. The per capita payments could well have been- continued until the constitutional amendment had been submitted to the people, but the Government did not want to admit that it was backing down. [Extension of time granted.] We are entering into an agreement to pay into a sinking fund for the redemption of State debts nearly £1,000,000 a year more than we have been paying, without any power to control the future borrowings of the States. It is true that the Commonwealth is not to take over the State debts until it has that control; but in the meantime Ave are paying this money to the States as if that power had been granted.

Mr G FRANCIS:
KENNEDY, QUEENSLAND · NAT

– Is it not merely paying the money from one pocket into another ?

Mr SCULLIN:

– It may be thatwe are merely paying from the people to the people ; but we could have continued doing that under the per capita system, which was certainly more flexible than is this arrangement. In order to meet the State rights argument the AttorneyGeneral stressed the fact that, under this agreement, the Commonwealth may increase its payments to the States; but cannot decrease them. That proves that the arrangement is not flexible. It might be unjust to decrease the payments to the States, as the Government did propose to decrease them ; but it might be equally unjust not to decrease them if circumstances warranted a decrease; therefore, this Parliament should not surrender any portion of its control over the national finances. We could have had all the ad- vantages of a consolidation of the debts and the elimination of competition between seven borrowers,without discontinuing the flexible arrangement of paying money to the States under the per capita system, leaving to this Parliament the right to say at any time how much of the customs revenue should be retained by the Commonwealth and how much should be paid to the States. We are told that the representatives of the States unanimously accepted the arrangement. They did, first, because there . was no alternative, and, secondly, because theywere sincere in their desire to improve the credit of Australia.

Mr G FRANCIS:
KENNEDY, QUEENSLAND · NAT

– They could not suggest an alternative.

Mr SCULLIN:

– They did. and I believe that, because they were actuated by a sincere desire to bring about the consolidation of the debts, they resolved to swallow the good with the bad. Than Mr. Hogan, the Premier of Victoria, no man is more desirous of enhancing the credit of “Australia and restricting the borrowing by Commonwealth and’ States, and I know from conversations I have had with him that he was more enamoured of the ppssibility of consolidating the debts and placing all future borrowing’ under ithe control of one authority than of any other part of the agreement. Other State Treasurers probably took the same view. The Prime Minister and his colleagues claim all the kudos for this agreement; they say that it is a triumph for them, and that no other Federal government was able to achieve such an arrangement. I point out that no previous Federal government was so fortunate as to be dealing with five Labour governments, earnestly desirous of restricting public borrowing. That was one of the reasons why they accepted the Commonwealth’s terms. The agreement is, I admit, a vast improvement on the 1926 proposal, which was iniquitous. The Government was driven from an untenable position; even ministerial supporters said that the Government would have been swept from office had it persisted in that scheme. Whilst the agreement before us is an improvement there was no necessity to interfere with the. per capita payments in order to effect the most beneficial portion of it - that relating to the consolidation of debts and unified control of future borrowing. Wow this House is in much the same position as were the State Premiers. The agreement is before us, and if we reject it, we do not know what will take its place. I regret that this important reform of consolidating the Australian debts is not being brought about without friction between States and Commonwealth, and the resentment that was stirred up in the breasts of the people. It is a thousand pities that such a reform could not have been brought about by a more amicable method which would have welded the Commonwealth and the States together in closer union.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

.- Nothing is of greater importance to the credit and future development and advancement of Australia than the satisfactory adjustment of its finances. Having fought strenuously against the proposal previously submitted to the House by the Government, I regret to have to part company with some honorable members on this side of the House who were my comrades then in a valiant fight to secure justice for the States, and maintain one of the great principles underlying the federal compact. Essential to the success of federation is the maintenance of virile States capable of developing the resources and industries within the territories in which they originally had complete and sovereign powers. Some of those powers they surrendered in good faith to the Commonwealth, but they retained control over those economic and social matters which touch more directly and intimately the daily lives of the people. We have before us now a set of proposals entirely different from those previously submitted by the Government, and it behoves honorable members, irrespective of the attitude they took on a previous occasion, to deal with them on their merits.

Mr Fenton:

– The opposition to the old proposals produced the new.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– The old proposals were the withdrawal of per capita payments, and the evacuation by the Commonwealth of the fields of land taxation, amusement taxation, probate duties, and 40 per cent, of the field of income taxation. They were strenuously fought by an almost unanimous press and by honorable members on both sides, and our united strength convinced the Government that that scheme would not serve the needs of Australia, and would be unjust to the States. As has been rightly observed during this debate, we must not lose sight of the fact that the people of the Commonwealth and the Stales are the same, and have merely apportioned the legislative functions between two different authorities, the Commonwealth dealing with the greater matters of national importance upon which the people of Australia as a whole desire to speak with a united voice, and the States controlling their domestic affairs. Prior to federation all the revenues be longed entirely to the States, and the ap portionment of them subsequently was of the essence of the federal compact. It seemed to me wrong in principle that the Commonwealth, having acquired complete control of certain revenues, should seize the opportunity when the States were heavily burdened with debt and increased developmental obligations following the war period, to take away from them their share of the customs revenue. I do not hesitate to fight when I believe a principle is at stake. I am sorry the honorable member for Warringah (Mr. Parkhill) is not in the chamber, because last night he expressed opinions that certainly do not fit the party to’ whioh I belong. He said that an honorable member who asserts the right to fight for his convictions in opposition, to the views of the Government, must not be surprised if he is confronted with a more acceptable ministerial candidate at the next election. Talk of that sort will not go down in this chamber ; it may be all right in connexion with the party machine, but it is no good to me, and I invite the honorable member and those who think with him to attempt to put his threat into operation in my electorate. There have been occasions when 1 have felt obliged to differ’ from my colleagues. I was in the unenviable position of being the only member of the Nationalist party in this House who opposed the last proposal for the amendment of the Constitution, I took my share of the taunts and jibes that came from both sides of the House, and I remember saying, “ He laughs loudest who laughs last.” While 1 was taunted with being an extremist, I subsequently had the satisfaction of knowing that Wannon was the only electorate in Victoria that by its vote on the proposed constitutional amendments supported the attitude of its representative in Parliament. So I am not to be deterred from expressing my views by anything that may be said by other honorable members.

Strong arguments have been advanced by those honorable members who regard the retention of the per capita payments as an essential feature of the financial relationship of the Commonwealth and the States. I listened attentively and with pleasure to the carefully prepared speech of the honorable member for Perth ..(Mr. Mann) ; it did credit to his industry and dear sightedness, although it failed to convince me that the retaining of the per capita payments was of greater urgency and value than the more comprehensive agreement now reached.

Unlike the honorable member for Yarra (Mr. Scullin), I have pleasure in giving to the Government credit for the statesmanlike scheme for taking over the States’ debts that is now before the House. Other fedora] ministries have approached these problems, but for the first time this Government, has formulated and presented to the House definite proposals, which have secured’ the concurrence of the States, and will, if adopted, enhance the credit of Australia. The new proposals are: first, the taking over, consolidation, and extinction of State debts; and, secondly, the establishment of a central loan council to be the executive body for the Commonwealth and the States for the control, management, and extinction of those debts. The Commonwealth has undertaken to make a direct annual payment of £7,584,912 to the States for 58 years, to increase the interest on transferred property from 31/2 per cent, to 5 per cent., and to pay 2s. 6d. per cent, towards the extinction of the State’s old debts, and 5s. per cent, towards the extinction of new loans. Under this arrangement a sinking fund of 7s. 6d. per cent, will . redeem the old debts of the States in 58 years, and a sinking fund of 10s. per cent, will redeem new debts in 53 years. That is a definite advance on any financial arrangement that has been made in Australia, and, in my judgment, it overshadows, for the time being at any rate, the financial proposals to which we previously took exception. The public debt of Australia has increased by leaps and bounds to an alarming extent. On the 30th June, 1914, the total State debts amounted to £320,255,000. On the 30th June last the total was £677,121,000, or an increase of £356,866,000. Those are colossal figures. The average rate of interest on State debts in June, . 1914, was £3 12s, 6d. per cent., and in June of - last year, on an amount that had more than doubled in thirteen years, £4 18s. 2d. per cent. I ask leave to continue my remarks.

Leave granted; debate adjourned.

page 3935

HOUE OF MEETING

Motion (by Dr. Earle Page) agreed to -

That the House at its rising adjourn until Wednesday next, at 3 p.m.-‘

page 3936

ADJOURNMENT

Copyright Act

Motion (by Dr. Earle Page) proposed -

That the House do now adjourn.

Mr GREGORY:
Swan

. -Last year I had a good deal of correspondence with the Attorney-General regarding proposed amendments to the Copyright Act, and I wish now -to urge the Government to introduce , amending legislation as early as possible. At present a body known as the Performing Rights Association is making a demand upon every person who owns a public hall, if copyrighted matter is used during any performance in it, for an annual payment. A most peculiar case has arisen in South Australia. The City Council of Adelaide was brought before the court - there is now an appealbefore the High Court - because certain ‘ copyrighted music was sung in its hall. I hope it will not be long before legislation will be introduced to amend the Copyright Act so that owners of halls may be protected from the demands of the association. Those who use copyrighted music should pay for that privilege, and those who claim copyright should be compelled to prove their right to it before they are permitted to enforce their demands upon the public.

Mr LATHAM:
AttorneyGeneral · Kooyong · NAT

– I assure the honorable member that this subject is receiving the full attention of the Government. Already the position has been greatly improved, the charges now made by the Performing Rights Association, as assignees of the copyright of a large number of pieces of music, being more reasonable than they were previously. Not only has the association reduced its charge, particularly in the case of small country halls, but it has also, I understand, waived them entirely in certain cases. Honorable members know that this is a particularly complicated and difficult problem. It would be useless to maintain the principle of copyright at all unless it were recognized that the assignee of copyright has as effective and extensive rights as the original author or composer. No differentiation can be made as against assignees, because, unless the’owners of copyright were able to dispose of their rights,these rights would, in many cases, be of little value.

Mr Gregory:

– I was referring, not to the position of the person who uses the copyrighted matter, but to the owners of halls.

Mr LATHAM:

– The person who uses copyrighted matter is responsible to the owner or assignee of the copyright; the owner of a hall is responsible only when he permits without proper authority, the public performance of a copyrighted piece of music for his private profit. In such a case it is quite proper that he should be liable. It is a’ question of fact - of mixed fact and law in many cases - whether the owner has so permitted the use of his hall. The case to which the honorable member has referred, which is at present before the High Court, may lead to a clarifying of the general knowledge of the subject. The position as I have stated it has been created by legislation passed by this parliament. What I have said is not founded upon any view of my own. A section of the Copyright Act provides that the owner of a hall who permits the unauthorized use of copyright tor his own private profit is liable, and as a general rule he should be liable. Whether the principle applies in a particular case is a matter for the court to decide when the question comes before it.

Question resolved in the affirmative.

House adjourned at 3.58 p.m.

Cite as: Australia, House of Representatives, Debates, 16 March 1928, viewed 22 October 2017, <http://historichansard.net/hofreps/1928/19280316_reps_10_118/>.

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