House of Representatives
21 July 1930

12th Parliament · 1st Session

  1. House of Representatives
  2. 12th Parliament
  3. 1930

Mr. Speaker (Hon. Norman Makin) took the chair at 3 p.m., and offered prayers.

page 4347

QUESTION

IMPORTATION OF SHOES

Mr McGRATH:
BALLAARAT, VICTORIA

– Has the Minister for Trade and Customs (Mr. Fenton) power to prohibit the importation of shoes such as that I now show him ? This shoe was made in Europe, and bought at Myers’ Emporium in Melbourne. It is made almost wholly of cardboard.

Mr FENTON:
Minister for Trade and Customs · MARIBYRNONG, VICTORIA · ALP

– The honorable member mentioned this matter to me this morning, and I have had the following statement prepared for his information : -

IMPORTED BOOTS AND SHOES.

Under the Commerce Regulations boots and shoes imported into the Commonwealth are required to be marked with a trade description setting out the principal material from which they are made. In the case of boots and shoes manufactured wholly or partly from leather or any imitation thereof, the trade description shall set out the principal material from which they are made, and, unless the. soles are solid leather, without admixture or addition other than ordinary fillers of cork or of waterproofed felt, shall state the nature of the admixture or addition, and a statement of the material or materials composing the sole shall, in addition, be conspicuously, legibly, and indelibly stamped upon or impressed into the outer surface of the sole of each boot or shoe.

Any imported boots or shoes which are found in Australia without the prescribed trade description are, unless the contrary is proved, deemed to have been imported in contravention of the ant, and may be seized as prohibited imports. This applies, however, only if the goods are in the packages or coven in which they were imported.

The weakness of the limitation as to goods having to be in original import packages to enable them to be treated as prohibited imports has been recognized, and by the amending act now awaiting assent, this restriction is being removed, and the position will then be that any imported goods found in Australia without the prescribed trade description or bearing a false trade description shall, unless the contrary is proved, be deemed to be prohibited imports.

page 4347

QUESTION

ESTIMATES

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES

– Is the Minister for Trade and Customs able to inform me when the estimates of receipts and expenditure will be made available to honorable members? The Prime Minister promised some time ago that they would be tabled in time for the continuation of the debate on the budget.

Mr FENTON:
ALP

– The Estimates will be available tomorrow, and the budget papers early next week.

Dr EARLE PAGE:

– Will the Estimates be distributed to-morrow morning?

Mr FENTON:

– Yes.

Mr LATHAM:
KOOYONG, VICTORIA

– Is it intended to proceed with the budget debate to-morrow?

Mr FENTON:

– I cannot answer that question at this moment.

page 4347

SYDNEY CHAMBER OF COMMERCE

Mr.CUSACK:.- Has the attention of the Minister for Trade and Customs beon drawn to a statement that the Sydney Chamber of Commerce will condescend to advise the Government as to how Australia should be governed, and will he ascertain whether this is the

Chamber of Commerce of which the late Prime Minister, Mr. Bruce, said that it did not know the first thing about finance ?

Mr FENTON:
ALP

– The Government is prepared to receive useful advice from any quarter. I do not know anything about the statement which the honorable member attributes to the late Prime Minister.

page 4348

QUESTION

HOPS POOL

Mr LATHAM:

– Will the Minister for Markets inform me whether the Government intends to introduce a bill to provide for the compulsory pooling of hops?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The position of the hops industry is at present under the consideration of the Government.

page 4348

QUESTION

MEMBERS OF PARLIAMENT AND THEATRE PASSES

Statement by Mr. Percy Deane.

Mr CROUCH:
CORANGAMITE, VICTORIA

– In view of the contradictory statements about what Mr. Percy Deane actually said in. giving evidence before a royal commission on the wireless bribery allegations, will the Government arrange for an official copy of Mr. Deane’s evidence to be made available to honorable members?

Mr FENTON:
ALP

– That will be done.

page 4348

QUESTION

TIMBER INDUSTRY

Mr JONES:
INDI, VICTORIA

– On 17th July, the Melbourne Herald published the following news item : -

BIG TIMBER CARGO IN FREIGHTER.

Her decks piled high with more than 2,500,000 feet of lumber from Grace Harbour, on the Pacific Coast, the Oceanic and Oriental freighter Golden Rod weathered tremendous seas from Lord Howe Island to Melbourne for a week without being seriously damaged.

In view of the depressed condition of the Australian timber milling industry and the facts that a number of mills have ceased operations and that thousands of timber-workers are out of employment, will the Minister for Customs concede that this state of affairs is in no small measure due to wholesale importations of foreign timber? If so, will he consider whether the avowed policy of the Government to give adequate protection to Australian industries is being given effect in regard to the timber industry?

Mr FENTON:
ALP

– The position of the Australian timber industry is at present being considered by the Government..

page 4348

QUESTION

PRIMAGE DUTY AND SALES TAX

Mr LACEY:
GREY, SOUTH AUSTRALIA

– Will the Minister for Trade and Customs inform me whether the primage duty and sales tax apply to tractors?

Mr FENTON:
ALP

– The primage duty applies to practically all imports, but there are to be certain exceptions from the sales tax. I cannot state these in detail at the present moment.

Mr LATHAM:

– Is it proposed that the House shall vote on the resolution imposing primage duty in connexion with the Budget, or is its discussion to be postponed indefinitely?

Mr FENTON:

– I presume that the discussion of the primage duty will take place during the debate on the Budget.

Mr LEWIS:
CORIO, VICTORIA

– Will goods that are subject to primage duties also be subject to the sales tax if they are procured through wholesale licensed merchants? If so, will the Minister give consideration to the exemption of such articles as are used by primary producers?

Mr FENTON:

– I have already intimated that, with few exceptions, all imports will be subject to the primage duty. There will be certain exemptions from the operation of the sales tax, but I am unable to specify them at the moment.

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Will the Minister for Trade and Customs indicate when he will be in a position to inform the House what articles will be exempt from primage duty?

Mr FENTON:

– I can merely reiterate that, with few exceptions, the primage duty will apply to all imports. The exceptions have already been announced.

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– When does the Minister for Trade and Customs expect the list of exemptions from the sales tax to be ready for publication?

Mr FENTON:

– When the measure is introduced into this House the whole of the details now sought will be availableto honorable members, who may then inform themselves of the exact position. In the meantime I ask them to possess theirsouls in patience.

page 4349

QUESTION

MR. P. COLEMAN, M.P

Allowances

Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES

– In view of the statement that the honorable member for Reid (Mr. Coleman) will cease to draw expenses after he has completed his investigations into the organization of the High Commissioner’s Office, is it a fact that his expenses will be paid to Geneva as a member of the League of Nations Delegation? Further, has the High Commissioner for Australia (Sir Granville Ryrie) been excluded from that Delegation ?

Mr FENTON:
ALP

- Mr. Coleman while inquiring into the organization of the High Commissioners’ Office, is receiving an allowance of £8 3s. a day, a rate similar to that which he will receive when acting as an Australian delegate to the Assembly of the League of Nations at Geneva. When he completes his investigations at Australia House he will cease to draw expenses until he proceeds to the Geneva Conference, which will begin on the 10th September. An. independent report of the investigation made by Mr. Coleman will be available to the Prime Minister before his arrival in London.

page 4349

QUESTION

FEDERAL AID ROADS AGREEMENT

Mr MACKAY:
LILLEY, QUEENSLAND · NAT; UAP from 1931

– Is it the intention of the Government to amend the Federal Aid Roads agreement and relieve the States of their obligation to contribute 15s. in the £1? If so, in view of the prevailing stringent financial position, will the Government at the same time consider a reduction of the present Federal grant of £2,000,000 per annum?

Mr FENTON:
ALP

– It is not customary to answer questions which involve matters of government policy. However, I assure the honorable member that the whole matter is now receiving consideration.

page 4349

QUESTION

AIR FORCE CADETS

Mr CROUCH:

asked the Minister for Defence, upon notice -

  1. Have applications been called for fifteen cadets to the Air Force; if not, what is the number?
  2. What is the reason for this, if a reduction in the strength of the Air Force is contemplated?
  3. Is it part of the proposition that these cadets should be trained partly for service outside Australia; if so, why?
  4. What is the average cost to the department of the training of each Air Force officer?
  5. How many new cadets have been engaged since 1st July, 1929?
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The information is being obtained, and a reply will be furnished to the honorable member as soon as possible.

page 4349

QUESTION

ROYAL COMMISSIONS

Mr LONG:
LANG, NEW SOUTH WALES

asked the Prime Minister, upon notice -

  1. How many royal commissions were appointed by the previous Governments during the period of six and a half years prior to June, 1929?
  2. For what purposes were they appointed, and what was their total cost?
  3. Was there any beneficial effect on the community as the outcome of any of their finding’s?
Mr SCULLIN:
Minister for External Affairs · through Mr. Fenton · ALP

– The information required is being prepared, and a complete reply will bemade available to the honorable member as soon as possible.

page 4349

QUESTION

AUSTRALIAN SILVER

Value in Great Britain.

Mr CROUCH:

asked the Treasurer, upon notice -

  1. Is Australian silver accepted in England at its face value?
  2. Is English silver accepted in Australia at its face value?
  3. What discount does the Commonwealth Bank in London charge on Australian silver?
  4. Can he arrange with London financial institutions, or the Commonwealth Bank, to accept Australian silver at its face value?
  5. In order to limit inconvenience to Australian travellers, will he see that English silver in Australia is made the subject of reciprocal negotiations for equal treatment in England?
Mr SCULLIN:
through Mr. Lyons · ALP

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

  1. Australian silver is not legal currency in England, and, at present, owing to exchange difficulties, is not generally accepted, either at its face value or at a discount.
  2. Yes.
  3. The Commonwealth Bank at the present time does not negotiate Australian silver outside Australia.
  4. The Commonwealth Bank is not prepared to accept Australian silver in London at the present time, and, in view of this, London financial institutions could not be expected to accept Australian silver at its face value.
  5. Having regard to the exchange difficulties at present existing, it is considered to be impracticable to make the arrangement suggested.

page 4350

QUESTION

SALES TAX EXEMPTIONS

Mr PATERSON:
GIPPSLAND, VICTORIA

asked the Treasurer, upon notice -

Whether “ sundry other crops “, mentioned in the budget statement, as proposed to be exempt from sales tax, will include chaff and oats, and whether wool packs and bran bags will be similarly exempt?

Mr SCULLIN:
through Mr. Lyons · ALP

– The sales tax will not be payable in respect of sales of chaff and oats, and similar foods for animals, or on. wool packs and bags and sacks used for the purpose of marketing primary products and flour and bran.

page 4350

QUESTION

DEFENCE FORCES

Adjutant-Generalof Military Forces,

Mr CROUCH:

asked the Minister for Defence, upon notice -

  1. Is the Assistant Adjutant-General of the Military Forces rationed under the new practice?
  2. If so, who performs his duties in his absence ?
  3. Will the officer performing his duties receive any, and, if so, what additional pay?
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

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

  1. There is no appointment of Assistant Adjutant-General in the Australian Military Forces. The Adjutant-General is rationed, i.e., is subject to enforced leave without pay.
  2. Another military member of the Military Board.
  3. No.

page 4350

QUESTION

DEFENCE FORCES

Military Regulation No. 121

Mr CROUCH:

asked the Minister for Defence, upon notice -

  1. Will the new amended Military Regulation No. 121 (3) apply to any officers temporarily filling the duties of those rationed?
  2. Will Regulation No. 121 (5) have the effect of ante-dating the pay of the officer to the date from which he temporarily acted?
  3. Will new Regulation No. 121 (4) have the effect of increments being granted both to the officer permanently, and to the officer temporarily, filling the position?
Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The answers to the honorable member’s questions are as follow: - 1, 2 and 3. The amendments referred to relate only to the civil staff employed under the Defence Act and Civilian Staff Regulations. They incorporate in Civilian Staff Regulations provisions similar to those recently included in Public Service Regulations (Regulation 87). They have no application to members of the Military Forces.

page 4350

QUESTION

TAXATION OF CHAIN STORES

Mr SCULLIN:
through Mr. Lyons · ALP

– On the 18th July, the honorable member for Corangamite (Mr. Crouch) asked the following questions, upon notice -

  1. In view of the disastrous consequences to country shop-keepers of the system of chain stores, will he consider the advisability of taxing each additional store at a progressively double rate?
  2. Can he estimate the revenue obtainable from such taxation?
  3. Would such taxation lead to decentralization and larger local control of business?

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

  1. As the sales tax is not a tax on retail stores, it would not be practicable to deal with chain stores under the proposed Sales Tax Bill.
  2. No.
  3. This is a matter of opinion to which I am unable to give a definite reply.

page 4350

QUESTION

WAR LOANS

Mr SCULLIN:
through Mr. Lyons · ALP

– On the 18th July, the honorable member for Adelaide (Mr. Yates) asked the following questions, upon notice -

  1. What was the total amount borrowed for war purposes, including war gratuity, repatriation, and the amount funded with the British Government?
  2. What is the total amount of interest paid to date?
  3. What is the total amount at present owing, and the yearly amount of interest on such amount?

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

  1. £376,832,935.
  2. £219,229,957.
  3. The war loan liability of the Commonwealth at 30th June, 1930, was £289,990,532, and in addition the States have a liability amounting to £27,748,668 for loans by the Commonwealth for soldier settlement and other loans. The above liability of the Commonwealth includes, and the State figures exclude, the sum of £7,600,000 to be taken over by the Commonwealth on account of soldier land settlement loans when agreements have been ratified by the Parliaments of the Commonwealth and the States. The yearly interest on the Commonwealth liability of £289,990,532 is £15,357,295.

page 4351

QUESTION

BRITISH PREFERENTIAL TARIFF

Australian Import Duties

Mr FENTON:
ALP

– On the 4th July the honorable member for Cowper (Dr. Earle Page) asked the following questions, upon notice -

  1. How many items in the existing customs tariff are admitted free under the British preferential section ?
  2. What is the average rate of duty on (a) all imports into Australia, and (b) all dutiable imports?

I am now able to furnish the honorable member with the following information : -

  1. Apart from the2½ per cent. primage duty the number of items in which provision is made for admission free of duty under the British preferential tariff is 335. “ Items “ has been interpreted for the purpose of this replyas covering sub-items and sections of sub-items.
  2. The rates of duty vary considerably and are at both ad valorem and fixed rates; it is not practicable to furnish the information sought.

page 4351

QUESTION

WINE BOUNTY

Mr FENTON:
ALP

– On 17 th July, the honorable member for Indi (Mr. Jones) asked the following questions, upon notice -

  1. Was export bounty paid to Messrs. Penfold’s Wines Limited during the year 1929-30, and, if so, what was the amount so paid?
  2. Did the firm mentioned give the necessary undertaking that they would pay for all 1929 vintage grapes and spirit purchased by them at the prices fixed by the Government as “ fair and reasonable “ and necessary to be eligible to claim bounty on any fortified wine exported?

I am now able to furnish the honorable member with the following information : -

  1. Yes. The amount was £9 15s.
  2. Yes. The wine on which bounty was claimed was exported in June, 1929.

page 4351

QUESTION

HEINZ AND COMPANY’S PRODUCTS

Mr FENTON:
ALP

– On17th July, the honorable member for Warringah (Mr. Archdale Parkhill) asked the following questions, upon notice -

  1. What were the reasons for lifting the embargo against the products of the American firm of Heinz and Company, permitting them to import £50,000 worth of goods this year?
  2. Has this firm definitely secured the lands for the erection of the contemplated factory?
  3. Has it completed, to its satisfaction, arrangements with the Customs Department for the importation of its machinery?
  4. Can practically all of Heinz products be manufactured in Australia ?
  5. Did Australian manufacturers extend their factories and expend additional money in anticipation of increased trade as theresult of the announced embargo?
  6. Will a considerable number of Australian workers be put out of work as the result of the change of policy?

I am now able to furnish the honorable member with the following information : -

  1. The embargo was only partially lifted, the exemption covering only a small percentage of the importations affected to enable the Heinz Company to maintain their goodwill on this market on condition that manufacturing operations will be commenced in Australia by 1st January, 1931. The company gave the Government an undertaking that no money would be sent out of Australia in payment for any goods imported under the permission. The proceeds of their sales will be used as part of the capital necessary to erect the proposed Australian factories.
  2. No. It is holding options but negotiations for the necessary land are proving difficult, and consequently new sites are being inspected.
  3. Yes. The greater proportion of the necessary machinery will be manufactured in Australia. In respect of the balance which is specialized” machinery, a satisfactory arrangement has been made between the officers of the Customs Department and the representative of the company.
  4. The manufacture of Heinz products dependsupon the ready availability of primary produce grown under the company’s supervision, and with the exception of such lines as capers, sweet vinegar and certain varieties of olives all of the Heinz products can be manufactured in Australia.
  5. In view of the fact that the embargo which affected Heinz products was only proclaimed on 4th April last, and the exemption referred to was announced on 7th May, it is obvious that Australian manufacturers did not have time to extend their factories, as suggested.
  6. As Heinz products have always been dearer by weight than the similar products of any Australian manufacturer, no Australian manufacturer has been placed at any price disadvantage by Heinz products. Furthermore, no importations have yet been made by Heinz and Company under the exemption granted in May last. Therefore it is obvious that no unemployment has resulted from the granting of this exemption. There hag been no change of policy as the prohibition was imposed to rectify an adverse trade balance, and only a small percentage of the total imports was covered by the exemption given. As the Heinz Company will manufacture in Australia not only the goods which were formerly imported for the Australian market, but also the requirements of the export trade to the Bast and New Zealand, where Heinz products already possess markets, increased employment of Australian workmen will result. The company will employ approximately 350 persons at the commencement of operations ill January next. Furthermore, it has been the experience in other countries that when the Heinz Company commenced to manufacture in such countries the demand for all brands of the affected lines of foodstuffs increased, and, as a consequence, the numbers employed in other similar factories increased.

page 4352

QUESTION

TIMBER IMPORTS

Mr FENTON:
ALP

– On 11th July, 1930, the honorable member for Indi (Mr. Jones) asked the following questions, upon notice -

  1. Is it a fact that the values of. dressed and undressed timber imported into Australia for the first nine months of the years 1928-29 and 1929-30 are as follows: -

and that thousands of our Australian timberworkers are unemployed, with the prospect of their numbers being considerably increased as a result of the competition from foreign timbers?

  1. If so, will the Minister seriously consider the necessary action to reduce the huge imports and so save the Australian hardwood milling industry from threatened extinction?

I am now able to furnish the honorable member with the following information : - 1, The figures quoted are correct. It is known that there is unemployment in the timber industry and that the building trade is very depressed.

  1. The timber industry was the subject of a report by the Tariff Board after a conference at which all the timber interests were represented. The Government adopted the recommendations of the board. The question is receiving further consideration.

page 4352

QUESTION

MOTH AEROPLANES

Larkin Aircraft Company’s Contract - Issue to Aero Club, Sydney

Mr BEASLEY:
Assistant Minister assisting the Minister for Industry · WEST SYDNEY, NEW SOUTH WALES · ALP

– On the 16th July the honorable member for Corio (Mr. Lewis) asked the following questions, upon notice -

  1. Whether a contract for the construction of 32 Gypsy Moth aeroplanes was given to the Larkin Aircraft Company?
  2. If so, what was the date of such contract?
  3. What date was fixed for completion of the contract?
  4. Has the period of the contract expired?
  5. How many of the aeroplanes have been delivered?
  6. How many remain to be completed?
  7. When is it anticipated that the contract will be completed?
  8. Was the original contract for about fourteen “ X “ Moth aeroplanes ?
  9. Was the tender of the Larkin Aircraft Company the lowest, if not, by how much’ did it exceed the lowest tender?
  10. Did the department vary its intention to construct “ X “ Moths and decide to construct Gipsy Moth aeroplanes?
  11. Did the department call for tenders for the Gipsy Moths?
  12. Were the tenderers invited to submit quotes for fourteen Gipsy Moths after the original tenders for “ X “ Moths had been made public?
  13. Did the department, subsequently by letter and not by tender, invite quotes for 32 Gipsy Moths?
  14. Was the quote of the Larkin Aircraft Company approximately £100 below its tender for the “X” Moths?
  15. Was Aerial Services Limited in receipt of a subsidy of approximately £23,000 per annum ?
  16. Are Captain Larkin and the directors of the Larkin Aircraft Company associated with Aerial Services Limited?
  17. Has the Government noticed the published statement of Captain Larkin that £50,000 of the air subsidy had been devoted to equipping the aircraft factory?
  18. Was this the object and purpose of the air subsidy, and was it a legitimate and proper use of the air subsidy?
  19. Was the use of the subsidy in such a maimer an unfair advantage to the Larkin Aircraft Company over other competitors who submitted tenders?
  20. Will the Minister have an investigation made into the contract for 32 Gipsy Moth aeroplanes secured by the Larkin Aircraft Company ?

I am now in a position to inform the honorable member as follows: -

  1. Yes.
  2. Contract was signed on15th April, 1929.
  3. Final delivery by 31st January, 1932, with progress deliveries of 12 airframes by 31st January, 1930; 5 airframes in May- June, 1930; 6 airframes in August-September, 1930; 6 airframes in January-February, 1931; 3 airframes in August-September, 1931.
  4. No.
  5. Seven. Three have been delivered and accepted and four are completed ready for flight test.
  6. Twenty-five. The greater proportion of the components for the remaining airframes have been manufactured and completion of the machines for the most part is now a matter of assembly. Five airframes are well on towards completion and these should all be delivered by the end of August, 1930.
  7. The contractor has applied for permission todeliver the remainder of the airframes by 3 lst December, 1930. This is now receiving consideration.
  8. No contract was arranged for X-type airframes. Tenders were originally invited for fourteen X-type.
  9. No. The lowest tender for the fourteen X-type aeroplanes was from afirm in Queensland. This firm’s tender was £227 14s. per airframe lower than the price tendered by the Larkin Aircraft Supply Company Limited, but after investigation of the lowest tenderer’s facilities for manufacture it was considered that the firm could not satisfactorily carry out the contract.
  10. Yes.
  11. No. With the exception of the tender from a Queensland firm, referred to in 9, the tenders of the Aircraft Manufacturing and Supply Company, Geelong, and the Larkin Aircraft Supply Company, Melbourne, were very much lower than the other tenders received. It was, therefore, decided to approach these firms only in respect to the manufacture of the Gipsy Moths, which were being considered as an alternative to the X-type, the number being increased to 32 airframes.
  12. No. The original tenders for X-type airframes were never made public, and tenderers were not asked to quote for fourteen Gipsy type. They were, however, asked to quote for certain alternatives, including five Gipsy Moths. These alternatives were eliminated when the purchase of the 32 Gipsy type was decided upon.
  13. The letters were, in effect, invitations to tender, which were accepted as such by the firms mentioned in 11.
  14. The quote of the Larkin Aircraft Supply Company for the 32 Gipsy type was approximately £108 per airframe lower than their tender for the fourteen X-type.
  15. No. A subsidy of £27,835 13s. was paid to the Larkin Aircraft Supply Company Limited (not Australian Aerial Services Limited) for operating certain air mail services for the year 1928-29.
  16. The information in possession of the Defence Department indicates that they are.
  17. No. 18 and 19. See replies to 15 and 17.
  18. I see no reason for an investigation.

On the 17th July, the honorable member for Cook (Mr. C. Riley) asked the following questions, upon notice - 1. (a) How many “ Moth “ ‘planes have been issued to the Aero Club, Sydney; (b) were such machines complete with necessary engine and machine spare parts; (c) what charge, if any, was made for machines and parts?

  1. Have any other machines been issued to the Aero Club, Sydney; if so, what are the particulars of same?
  2. Have any general engine or machine parts been issued to the club; if so, what prices were paid for same?
  3. Have any machines damaged as a result of a crash been repaired or replaced by the department, free of cost?
  4. What rental is charged the Aero Club for the use of the Government hangar at Mascot?
  5. What was the total cost of the building occupied by the Aero Club as club rooms, and what rental is being paid for it?
  6. What is the total amount of subsidies or bonuses paid by the Government to the Aero Club for training pupils?

I am now in a position to inform the honorable member as follows: - 1. (a) Seven; (b) each machine issued was complete with engine, and, in addition, certain necessary engine and machine spare parts have been issued at various times; (c) no charge was made, the “ Moth “ machines being issued on loan.

  1. Yes, particulars being - (a) One Avro Avian machine presented to the Commonwealth in commemoration of Mr. B. Hinkler’s flight to Australia was issued to the club on loan; (b) two D.H.53 aircraft sold by tender to the club; (c) one D.H.9 aircraft sold by tender to the club.
  2. Yes. The club was not charged for them.
  3. One machine was issvied to the club on loan to replace a machine crashed. Both machines are included in the number quoted in answer to No. 1(a).
  4. The club is permitted to use, free of charge, in common with others, such hangar accommodation as the Minister considers necessary.
  5. The club house at Mascot aerodrome cost £4,07911s. 5d., and the club is charged a rental of £244 15s.6d. per annum.
  6. £6,475has been paid to the club from the commencement of their training activities in August, 1926,. up till 30th June, 1930.

page 4353

QUESTION

H.M.A.S. AUSTRALIA AND H.M.A.S. CANBERRA

Mr BEASLEY:
ALP

– On the 18th July, the honorable member for Cook (Mr. C. Riley) asked the following questions, upon notice -

  1. What is the estimated cost of all alterations and additions to the H.M.A.S. Australia and H.M.A.S. Canberra, as recommended by the Admiralty and ships’ officers?
  2. What is the cost of alterations and additions on those two vessels, (a) actually carried out, and (b) approved, but not yet carried out?

I am now in a position to inform the honorable member as follows: -

In addition to the foregoing, there are certain proposed and approved items not yet carried out, for which detailed estimates have not yet been prepared, and it is anticipated that these items will cost approximately £19,500.

page 4354

TARIFF BOARD’S REPORTS

Mr FENTON:
Minister for Trade and Customs · Maribyrnong · ALP

– I lay on the table reports by the Tariff Board on timber, traction engines and spray guns.

Ordered to be printed.

page 4354

HOUR OF MEETING

Motion by (Mr. Fenton) agreed to -

That the House at its rising adjourn until 2.30 p.m. tomorrow.

page 4354

PUBLIC SERVICE BILL

In committee (Consideration of Senate’s amendments).

Clause 4 - (1.) After section forty-eight of the Principal Act the following section is inserted: - “ 48a. An officer seconded for duty as Private Secretary to a Minister or member of the Federal Executive Council or to the Leader of the Opposition in either House of the Parliament, shall, upon the termination of his employment in that capacity, be entitled to appointment to an office in the Commonwealth Service of such status and salary as are determined by the Board, having regard to the office held by the officer prior to his being seconded for such duty and to the period of his employment as Private Secretary.”. (2.) This section shall be deemed to have commenced on the first day of January, One thousand nine hundred and thirty.

Senate’s amendments -

After period “ insert “ and nature “ ; leave out “ January, One thousand nine hundred and thirty,” insert “ October, One thousand nine hundred and twenty-nine “.

Mr BEASLEY:
Assistant Minister · West Sydney · ALP

– The first amendment made by the Senate is an improvement in that it allows the nature of the work performed by an officer while acting as a private secretary, as well as the period of his employment in that capacity, to be taken into consideration. The second amendment is to the effect that this provision shall date from the 1st October, 1929, instead of the 1st January, 1930, as set out in the bill. The object of the latter amendment is to meet the cases of officers who were acting as private secretaries to ministers in the late Government, and returned to their positions in the public service between the date of the assumption of office by the new ministers and the 31st December, 1929. Both the amendments made by the Senate improve the clause. I therefore move -

That the amendments be agreed to.

Mr LATHAM:
Kooyong

.- The amendments made by the Senate improve the bill as it left this chamber. The first amendment requires the Public Service Board to take into account the character of the work done by an officer while acting as a private secretary, as well as the period during which he was so employed. That is obviously a just provision. The second amendment is also a fair one for the reason given by the Minister.

Motion agreed to.

Resolution reported ; report adopted .

page 4354

POST AND TELEGRAPH RATES BILL

In committee: Consideration resumed from 18th July(vide page 4344).

Clauses 2 to 7 agreed to.

Clause 8 -

The First Schedule to the Principal Act is repealed and the following Schedule inserted in its stead : -

“FIRST SCHEDULE.

Part I.

Newspapers . . . One penny and a halfpennyper sixteen ounces or part of sixteen ounces on the aggregate weight of newspapers posted by any one person at any one time.

Periodicals . . . Twopence per sixteen ounces or part of sixteen ounces on the aggregate weight of periodicals posted by any one person at any one time.

Partii.

Second Class Mail Matter . . . One penny per two ounces or part of two ounces.

Mr LYONS:
PostmasterGeneral · Wilmot · ALP

– When we were discussing the proposed increased rates on Friday last, the only point of importance raised in opposition was that some special consideration should be given to weekly country newspapers.

Dr Earle Page:

– To all weekly newspapers.

Mr LYONS:

– That is not what I understood the position to be on Fridaylast. Some objection was also taken to the burden that might be placed on religious publications. In regard to those, let me say that with few exceptions they are small publications of one, two or three sheets, and sometimes the post office has to carry about 80 of these documents to the unit. On that unit, 1 1/2d is paid, and that payment involves the delivery of those publications to 80 addresses. It is, therefore, understandable that even under these proposals no burden will be imposed upon that class of publication. We cannot do any more to assist the publishers of religious journals than we are doing at present. In regard to weekly newspapers, I said last week, that if some concession could be made and administered without difficulty, I should be prepared to consider it, but I have gone carefully into the question and I cannot agree that any distinction should be made between bulk rates of postage on newspapers simply because one class of newspaper happens to be published daily and another twice or thrice a week, once a week, or every two weeks. After all they are newspapers, and, as such, should be treated alike. It was also contended that the increased burden would press heavily upon country weekly newspapers, but I would point out that the total revenue to be obtained under this increased bulk postage rate will be only £35,000.

Mr Archdale Parkhill:

– Is it worth while making any alteration ?

Mr LYONS:

– Yes, at the present time.

Mr Latham:

– That sum represents a small percentage of the £1,000,000 pro- posed to be raised.

Mr LYONS:

– It will go towards the £1,000,000. As some honorable members seem to think that the Government’s proposals, when given effect, will not yield the revenue anticipated there is, therefore, all the more reason for collecting this £35,000. Of that amount, 41 per cent, will be contributed by the daily newspapers that are published in the capital cities of the Commonwealth and 41 per cent, by the weekly press throughout Australia; but of the amount to be collected from the weekly press, 92 per cent, will be paid by the weekly papers that are published in the capital cities. Only 8 per cent, will be paid by the weekly papers that are published in parts of the Commonwealth other than the capital cities. Therefore, no great burden will be placed upon country newspapers. Only nine weekly papers published in the country are to-day paying more than £50 a year in postage, and I cannot see how an increase of 25 per cent, in the bulk postage rate will place a very heavy burden on those newspapers. As I have said before, the desire of the Government is not to impose additional taxation if it can be avoided, but force of circumstances has compelled us to raise increased revenue, and the Government proposes to place this additional tax upon a class of the community that has had special concessions up to the present. The department has been losing, year by year, roughly the sum proposed to be raised by this increase in the postage- rate on newspapers. If we do not lose on this class of postage in the future, at any rate we shall not make any substantial profit on it. In addition we have been losing yearly a substantial amount - approximately £200,000 - in telegraph rates because of a special concession to the newspapers of Australia.

Mr Archdale Parkhill:

– But that is not being touched.

Mr LYONS:

– No, and for that reason there should be no objection to an increase in the bulk postage rate of £35,000, to enable the cost of delivery to be met by the revenue collected from that source. The Government has not introduced these proposals with any pleasure.

Mr Gregory:

– These newspapers go to the country, so the people of the country will pay the increased postage.

Mr LYONS:

– Undoubtedly they go into country districts, but any increase in postage will be borne by the people as a whole. More newspapers are sold in the capital cities than in the country, because most of the population of Australia is centred in the capital cities. No one would argue for a moment that the country people should not contribute to this tax. As a matter of fact, the burden of all these proposals will in the end be carried by the community. The object of the bill is to give effect to. that portion of the budget proposals which provides for an increased revenue of £1,000,000 from this source to meet the financial obligations of the Commonwealth. I trust that there -will be no objection to this proposal.

Mr LATHAM:
Kooyong

.- I am sure that all honorable members regret the necessity for raising additional money by taxation. Most of us recognize that it is somewhat objectionable to have to raise this money through the medium of the post office. The point at issue at the moment is the method of applying this taxation, and I ask the attention of the Postmaster-General (Mr. Lyons) for a moment, while I read a letter which I have received from the managing director of a well known newspaper publishing company - Fitchett Brothers Proprietary Limited, Melbourne. They are the publishers of Life and Everylady’s J Journal. This letter raises the question of the classification as between newspapers and periodicals, and inquires whether the proposed increase in rates will make the charge on periodicals in the future what it has been on newspapers in the past. Portion of the letter reads -

In tlie new postal bill J note there is a new division created for periodicals. The Argus reports Mr. Lyons as saying - “ Of the section of the bill dealing with bulk rates for periodicals, Mr. Lyons said that this was an innovation by which it was proposed to extend to periodical publications, other than newspapers, a bulk rate of postage. The bulk rate for periodicals would be of benefit to many newspaper offices which issued such journals in addition to a newspaper. The new bulk rate was 2d. for 16 oz.”

From this I suspect that it is the intention of the department to strike from the registered newspaper list monthly newspapers now registered as such, and place them in the periodical class. If this is so it will deal a heavy blow to both Life and Everylady’s Journal - for over twenty years registered as newspapers. If we are charged 2d. for 16 oz. (periodical rate) instead of the present newspaper rate of 20 oz. for lid., it will mean an increase in rates equal to (>6ft per centIt will be bad enough to have to pay the increased newspaper rate (Ki oz. for l£d. instead of 20 oz. for Hd.), but to be put in the periodical class will be a crippling impost on Australian monthly newspapers. As you know, we have built up a big circulation chiefly by use of the post office.

Mr Lyons:

– What I said’ in that regard may have been inadvertent. There is no intention to treat periodicals any differently than before, except to give the publishers of periodicals the right of bulk postage as against separate postage.

Mr LATHAM:

– Do I understand that this proposal does not involve the removal of journals such as I have mentioned from the present registered newspaper list?

Mr Lyons:

– That is so.

Mr LATHAM:

– Then I need not further occupy the time of the committee at this stage.

Mr BAYLEY:
Oxley

.- Some time ago I addressed to the PostmasterGeneral a question relating to the registration of newspapers for transmission by post, and he promised to have the matter inquired into. Every honorable member knows that there are newspapers registered that ought not to be, while in other cases registration has been refused by the Postal Department to newspapers that have every right to the privilege. I have in mind a periodical printed and published by the combined school committees of Brisbane for circulation among the school children of Queensland. It was denied registration by the Postal Department. One would not cavil at that action of the department if it were general in its application. If the PostmasterGeneral will again look into this matter he will find that he can save many thousands of pounds.

Dr EARLE PAGE:
Cowper

.- I listened very carefully to the PostmasterGeneral, and it appeared to me that he did not deal with the issue that had been raised. He said that 41 per cent, of the total number of newspapers in Australia are published in country districts. We are anxious that those newspapers shall have the benefit of the old rates. Their rates were increased by 20 per cent, during the war; and although in 1923 a remission with respect to general postage, bringing the rates to what they were formerly, was granted, that remission did not apply to country newspapers. Concern is felt also in regard to -weekly newspapers that are distributed through the post. Although they are published in the capital cities, they are essentially country newspapers. I. refer to The Farmer and Settler, The Catholic Press, Freeman’s Journal., Truth and Sportsman, The Bulletin, Country Life, The Land, and the Woman’s Mirror. They are all published in capital cities, and the only way in which they can reach country people is through the post. The daily newspapers are distributed by runners, rail, and other methods. I urge the Postmaster-General to reconsider this matter. Papers like The Bulletin have to compete with similar publications- from overseas, and they have not the benefit of a protective duty. They find themselves very much burdened by all these additional charges. It is proposed to increase the bulk postage rate by 25 per cent., to impose- a duty of fi a ton on newsprint, and a primage tax pf 2-J- per cent. I presume that their income tax also will be increased ; but after they have paid these other charges they will have little income to tax. The big daily newspapers in Sydney propose to increase their price from Id. to l£d. from the 4th August next in consequence of these additional charges ; but these other publications will not be able to increase their prices similarly, and the extra charges will have to come out of whatever profits they now make. J. take it that the Government does not wish to impose a discriminatory tax upon a certain class of newspaper. The amount at stake is small compared with the total sum that it is proposed to raise. I urge the Government to do justice to these newspapers.

Mr HAWKER:
Wakefield

.- The Postmaster-General (Mr. Lyons) argued that newspapers receive a concession totalling something like £200,000 a year, on the telegraphic rates that are charged for press messages, and that, therefore, it is not unfair to make the revenue meet the expenses of handling the distribution, through the post, of country newspapers,’ which do not use press telegrams to any great extent, and which provide the only means for those who live in small townships in the country to learn when sales are to be held, and generally to keep themselves acquainted with local affairs. The honorable gentleman also said that weekly newspapers published in other than the capital cities contribute only 8 per cent, of the amount collected from the weekly press, and that their contribution to the additional £35,000 that it is proposed to raise would be very small. He further said that only nine newspapers published in country districts pay in postage more than £50 a year. I contend, however, that in the existing economic circumstances, an additional 25 per cent., even on a small postage bill, will prove a very serious matter, particularly in country districts, and will be found only as a result of further severe pinching and scraping. These newspapers may have to cut down their already restricted wages bill. It is undesirable at the present time to do anything that will have the effect of accentuating unemployment in our country districts. The outlook is far from bright in districts where the population is scattered. I understood the honorable gentleman to say that the people in the city pay as much in postage as do those in the country. He should not overlook the fact that in the city the majority of the newspapers are delivered by hand, while in the country practically every newspaper is carried through the post. I strongly support the request for a reconsideration of this matter.

Mr CROUCH:
Corangamite

– I draw attention to the postal matter that is sent to Australia from England, to the detriment of our printers and our postal receipts. I suppose that, as is the case with me, many business men in Melbourne receive advertising communications from England at regular intervals. Last week I received a communication that I placed before the Department of Trade and Customs. I had already brought the matter under the notice of the Postmaster-General’s Department without getting any satisfaction. It appears to me that provision to meet such cases could be made in this bill. The communication in question was enclosed in an English envelope, upon which was impressed a halfpenny stamp; but it was sent from England as if from an. address in Melbourne. The envelope contained a blotter in the form of a calendar for two or three months, and also a postcard addressed to “ The Roneo Company, Market-street, Melbourne.” The whole of this matter, which is printed in England, is carried to Australia for a halfpenny. The address on the postcard is. printed in such a way that it appears to have been done in Melbourne. I do not know whether this matter should be handled by the Department of Trade and Customs or by the Postal Department; but some investigation should be made. When such matter printed in England is carried to Australia at such a low rate it must have a detrimental effect upon those engaged in the printing trade in Australia. If similar printed matter were despatched from Melbourne to any part of Australia, at least Id. in postage would have to be paid. I doubt whether it could be sent to England for that amount. I do not know if the difficulty could be overcome by an amendment of this bill; but I trust that the Postmaster-General (Mr. Lyons) will give the matter further consideration before it reaches another place.

Mr GREGORY:
Swan

.- I am opposed to all the increased rates set out in the schedule, although in the circumstances, I suppose it is useless to offer any strong opposition to the proposed additional rates on letters.

Mr Gabb:

– It is popular to oppose these rates.

Mr GREGORY:

– There is no necessity for the imposition of additional rates when the Government is spending money so extravagantly in many directions. It is amazing how some honorable members delight to support increased taxation. There does not seem to be any justification for imposing these extra rates, particularly as the postal department has for some years been able to provide interest on the money borrowed for new works. Residents in the city will still have their newspapers delivered at the door without having to bear any extra charge; but country residents will have to bear the extra impost. As thousands of newspapers are carried by rail, the benefit to the department cannot be great. Seven or eight years ago an agreement was reached under which the rates for the carriage of newspapers were increased; but since that time, I do not think higher rates have been imposed. I should like the Minister to state why this additional rate which will seriously affect country readers should be imposed. I make no plea on behalf of the newspaper proprietors ; I am thinking more particularly of the people living in the country who rely upon newspapers, not only as a meansof keeping in touch with current events, but for information to assist them in the businesses or callings in which they are engaged.

Mr Gabb:

– How many papers doesa man in the country receive?

Mr GREGORY:

– Some of them take two or three each week, and the additional rate will add to their expenditure. In order to test the feeling of the committee, I move -

That the words “ sixteen ounces or part of sixteen ounces “ be omitted from Part I. of theproposed schedule with a view to insert in lieu thereof the words “ twenty ounces.”

My proposal is to substitute the rates previously in operation. In view of the additional taxation to be imposed in other directions, newspapers-‘ should not be taxed to the extent of an additional id. Many country residents subscribe regularly to The Bulletin, The Australasian, and to other weekly papers published in the State in which they reside, as well as local newspapers. As the additional impost i3 wholly unjustified, I trust that the committee will support the amendment.

Mr MORGAN:
Darling Downs

– I rise to support the amendment moved by the honorable member for Swan (Mr. Gregory) and to renew the protest I made when speaking to the second reading of the bill. I listened very attentively to the Minister’s statement which was quite unconvincing. The proposed rate will increase the cost of newspapers and journals published incidentally in the interests of those who are living in the country, and who will have to bear the impost to a greater extent than others. The Minister said that most of the weekly newspapers are published in the city, but even if they are they are read by country residents as a means of entertainment, and to enable them to obtain the latest information concerning the businesses in which they are engaged. The Minister also stated that the weekly newspapers published in the country contributed only S per cent, of the total amount collected by way of postage on such newspapers published in Australia. If that is the proportion, the Government should take its hands off this little bit of additional revenue in its endeavour to reduce its deficit. I submit that if there is any real necessity for additional revenue, the position could be met by reducing expenditure in the department.

Mr FRANCIS:
Moreton

.-I support the amendment moved by the honorable member for Swan (Mr. Gregory). The proposed increase in the rates on newspapers will add to the hardships of those living in the country, and who are entitled to receive this class of reading matter, which is often of an educational and entertaining nature, at the lowest possible rate. I trust that the Minister will accede to the requests made to him on Friday last when this matter was under consideration. The newspapers, on which the additional rate is to be imposed, are sent in very large numbers to the country where many of their readers live in a state of semi-isolation. These people depend upon such publications to keep them in touch with the outside world, and also to assist them in adopting the most modern methods in agriculture or in whatever line of business they may be engaged. If settlement is to be increased, every facility should be given to those who are following rural pursuits. By this measure the Minister will place yet another burden on country people whose newspapers will cost them more. The Minister stated that the number of papers affected by this increase would be small. That, it seems to me, is an additional reason why they might be exempted altogether. Most of the city newspapers are delivered by hand. This year’s budget provides for the expenditure of £4,000,000 more than the budget of 1928-29, and rather than place most of these additional burdens on the people in the country, the Government should try to save some of that £4,000,000. I hope that the Minister will not persist in his present attitude. The country people have had a very difficult time during the last few years ; many of them have suffered greatly from droughts, and are now threatened with falling markets. They are entitled to be relieved of any further taxation. I trust that the Minister will accept the amendment of the honorable member for Swan (Mr. Gregory), and withdraw this special taxation.

Mr BAYLEY:
Oxley

– I hope that, before the Minister turns down this amendment, he will give consideration to my suggestion that he should obtain from his departmental officers a statement as to the probable amount which could be saved by an effective combing of the newspaper register. Year after year the names of new publications are added to the list, and it is time there was a cleaning up.

Mr LYONS:
PostmasterGeneral and Minister for Works · Wilmot · ALP

; - The matter raised by the honorable member for Oxley (Mr. Bayley) is worthy of consideration, but it is impossible to attend to it in this bill. It is proposed, however, to bring in an amendment of the Post and Telegraph Act for the correction of long-standing anomalies, and in it we shall lay down definitely what a newspaper is, and what it is not. We hope, in this way, to be able to straighten out the tangle in which we now find ou r. selves. The honorable member is right in his contention. I believe that there are publications registered for transmission by post as newspapers which .should not be included in that category at all. They have been admitted because there exists a precedent, on the strength of which applications are made. Sometimes, I have no doubt, this results in keeping off the list publications which have a right to be included. The law is somewhat vague in this respect, and the department has to use its own judgment.

The honorable member brought under the notice of the department a periodica] or newspaper for which he asked special consideration. I do not wish to be dogmatic, but I believe that under the new scheme, allowing periodicals to be posted in bulk, the publication he mentioned may benefit. This periodical is, I admit, a most desirable one, and if it can be included in the list of newspapers entitled to bulk postage, it could effect a substantial saving. The Government cannot accept the amendment of the honorable member for Swan (Mr. Gregory) ; we may consider it in a couple of years’ time when the finances of the country are straightened out. Honorable members opposite have reiterated statements that [did not deal with the merits of the proposal that country newspapers should receive special consideration. Although I listened to many speeches I heard no valid argument as to why we should select one section of the community for specially favorable treatment. If I understand honorable members aright, they desire that publications, such as biweeklies, tri-weeklies and weeklies circulating in country districts should receive some special concession. The fact is, however, that daily newspapers circulate in the country just as much as do periodicals.’ In my own State the dailies from Hobart and Launceston circulate right throughout the island, and are widely read by the people in the country.

Dr Earle Page:

– Well, take the extra charge off them all. We shall not object.

Mr LYONS:

– If we do that we shall get the country into the same position that the right honorable gentleman got it into when he was a member of the last Government. I point out that 41 per cent, of the revenue from newspaper postage comes from the dailies. If it is proposed to exempt the periodicals because some of the country people read them, we should also exempt the dailies, because a great many country people read them too. If we look at the thing fairly and squarely we must recognize that all should be treated alike. One thing has impressed me about the argument of honorable members opposite: they are so all-embracing. First they say that the increased postage ou periodicals will be an additional heavy burden on country people, and for that reason should not be imposed. Then, a little later, they argue that, the PostmasterGeneral having pointed out that the burden will not be so very heavy .after all, it might as well be taken off altogether, because it will not matter much anyway. I am not a bit enthusiastic about imposing increased burdens on any one. If I could avoid it I would. I cannot accept the suggestion of the honorable member for Darling Downs (Mr. M organ) because it is not worth while for the small amount involved to upset the whole organization of the department. It concerns only a small section, and involves only a small amount. Otherwise, I might be prepared to consider his proposal.

The same honorable member suggested that the extra charges would be unnecessary if we were to effect economies iri the department. It is easy enough to say that, but I maintain that there is no other department under the control of the Commonwealth Government in which greater care has been taken to effect economies. That does not apply to the regime of any particular government. Before the present Government came into office the administration of the department was carefully investigated, and every pound spent was checked. That process is going on to-day, and fresh efforts are being made to effect economies.

Mr GREGORY:

– What profit is the department budgeting for this year ?

Mr LYONS:

– We are going to make a profit, I hope. If we do not the Treasurer is going to experience a loss. One difficulty with which we are confronted is that when we attempt to exercise economy honorable members come along individually and plead that this or that must not be cut out, but that, on the contrary, we should grant something more. I know that, generally speaking, they have a good case, and I regret that. we must refuse their requests. We are constantly turning down recommendations which, from a business point of view, it might be wise to accept, but we do it because we are under the necessity of avoiding extra expenditure. The department cannot be charged with failing to exercise the fullest measure of economy,. I should be glad to know what particular activity of the Postal Department could be cut out in order to save money.

Mr Morgan:

– It would be possible to make a 10 per cent, cut in salaries.

Mr LYONS:

– That can be discussed during the budget debate. The honorable member’s suggestion is an old Tory proposal, but surely it has nothing to do with the bill now before us, which deals with the postage rates.

Mr GULLETT:
Henty

– I cannot agree with the PostmasterGeneral (Mr. Lyons) that to make a reduction in favour of weekly and other periodical newspapers would be to discriminate in their favour as compared with daily newspapers. On the contrary, to leave the postage rates as they are set out in the bill appears to me to be discriminating against weekly and other periodical newspapers. Despite what the Minister has told us, I think he will agree that the proportion of weekly newspapers posted is far larger than that of daily newspapers.

Mr Lyons:

– The post office handles 41 per cent. in each case.

Mr GULLETT:

– That sounds fairly convincing, I admit. I think, however, that this is a concession which the PostmasterGeneral might have been prepared to accept. The amount involved is not very large. I was rather surprised to find honorable members opposite, who represent country districts, remaining silent during this debate. Although one would have expected them to join in the protest against this increase, they have sat silent, uttering no protest against this most discriminating form of taxation upon country interests.We are well accustomed to this silence by now.

The CHAIRMAN:

– Order !

Mr GULLETT:

– I am endeavouring to get a little support for our case, and I do not know any other way in which to go about it. However, I shall not detain the committee. We are engaged once more in a forlorn hope against the big battalions opposite, but I again remind the committee how, a bill of this kind, one of the new taxation measures, brings home to us the price we have to pay for the Government’s fiscal policy. There is an axiom in taxation that an old tax is a good tax, and so it was, to a very large extent, with the customs revenue. The Government has now wantonly discarded millions of customs revenue in pursuit of its new fanatical tariff policy, and one of the immediate results of ‘the loss of that old tax, which was a good tax, because we were accommodated to it, is this great welter of taxation upon newspapers. As the right honorable member for Cowper (Dr. Earle Page) has pointed out, there is a new customs duty on newsprint; there is also a primage duty to be paid by the newspapers, and I take it that they will also have to pay the proposed sales tax. There is also this increased postage. All this comes upon the newspapers at a time when we know that there has been a big falling off in their advertising revenue. It is just an example of how exceedingly shortsighted and ill-considered it was for the Government to engage in this great fiscal change involving the shifting of the incidence of taxation at a period of unparalleled depression in Australia. Dislocation is widespread. I do not wonder that the immediate result of the Government’s policy is the announcement that the old Sydney Morning Herald will be compelled to increase its price from1d. to1½d. The seriousness of it is that if the example of the Sydney Morning Herald is followed, as I assume it will be, by other Sydney newspapers, it means a tax of from 3d. to 6d. a week on the basic wage, and that tax spread over the State of New South Wales will run into a huge sum of money. It will penalize industry very heavily, and can only be reflected in increased cost of living and increased cost of production. However inevitable this new form of taxation may be, it is to be deplored, and the Government is to be condemned for not having foreseen the evil consequences of its tariff policy.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

.-] support the clause. I have listened with amusement to the remarks of the honorable member for Henty (Mr. Gullett). He is rather surprised at the silence of ministerial members, and is particularly concerned at the silence of honorable members of the Labour party who represent country constituencies, and their disregard for the unfortunate position in which, he says, the country press will be placed. He, like the honorable, member for Moreton (Mr. Francis) has made a very touching appeal on behalf of the country press. If honorable members on the ministerial side are silent, honorable membersopposite could not but help being silentafter the statement made by the PostmasterGeneral (Mr. Lyons), that the Postal Department was losing £200,000 a year on the press telegraph service. At any rate, none rose to urge that the department should be madeto pay, because honorable members opposite cannot afford to antagonize those who so loyally come to their heels at election time, and indulge in lying propaganda to the detriment of the Labour party. To honorable members opposite it seems quite all right that, at a time like this, when we are experiencing a period of financial stress, the press telegraph service should continue to be rendered by the Postal Department at a loss approaching £300,000 a year. It is true that the Postmaster-General 3poke of £200,000 as being the loss, but a few years ago, when the honorable member for Swan (Mr. Gregory) supported the late Government, the loss on that one item alone was £270,000. When it came to a question of the disposal of the Australian Commonwealth Line of Steamers, honorable members opposite held up their hands in. horror, and said that the loss which was being made by that line of steamers should not continue - that the country could not afford it; yet they allowed the loss on the press telegraph service to continue. They now talk about effecting economies in the Postal Department. Has any one of them suggested that the charges for press telegrams should be reviewed? The latest report of the Post and Telegraph Department shows that the loss on the telegraph branch of the department last year was £224,000. There is no justification for continuing that loss. One would naturally expect to find men who are always harping upon non-paying services and the necessity for economy urging that this particular non-paying proposition should be cut out.

Dr Earle Page:

– Why does not the Postmaster-General cut it out?

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– I regret that there has been a serious omission iti that regard in this bill; but the Postmaster-General has foreshadowed another bill which, I feel sure, will deal with the substantial loss which is now being borne by the people iri connexion with the telegraph service. I do not believe in the people being called upon to subsidize this service; but that is what they are doing in regard to press telegrams. It is notified in the Sydney press to-day that the price of newspapers is to be increased from Id. to ltd.. simply because the proprietors of the newspapers are now being called upon to pay more for their newsprint. It is said that the increase in newspaper prices is due to the recently imposed duty of £1 per ton on newsprint. The wealthy newspaper proprietors Will. as a result of the new charges, collect £14 for every ton of newsprint used by them, as against an expenditure of £1 a ton that they will be called upon to meet. If they propose to force the people to pay more for their papers, there is no reason why the people should continue an unprofitable telegraph service on behalf of the newspaper proprietors. The people of Cook, whom I have the privilege to represent, may despatch .telegrams in case of illness, accident, or death, and may occasionally jjost letters. Whatever service is rendered to them is paid for by them, and the same should be done by the newspaper proprietors - these huge mergers about which the honorable member for Henty (Mr. Gullett) talks whenever he has an opportunity to do so. We should closely scrutinize all non-paying services in these days. The honorable member for Darling Downs (Mr. Morgan) has no suggestion to offer to enable the Government to balance the accounts of this department except that the wages of the employees should be reduced. I trust that the PostmasterGeneral (Mr. Lyons) will lose no time in introducing a bill to provide for an increase in press telegraphic rates so that our wealthy newspapers, and not the workers of this country, will pay foi this service.

Mr BELL:
Darwin

.- I cannot support the amendment of the honorable member for Swan (Mr. Gregory), if it will lead to discrimination between weekly and daily newspapers, and will adversely affect people who live in the country. Our daily newspapers, as well as weekly publications, are delivered through the post in most country districts. The Postal Department has rendered an extraordinarily good service in this respect in recent years, and this has been advantageous, not only to the people, but also to the newspaper proprietors. This bill was introduced prematurely; it should not have been, submitted to us until after the debate on the budget. It seems to be inevitable that increased taxation will be imposed upon the people, but I am antagonistic to the use of the Postal Department as a taxing agency. In recent years, every effort has’ been made to make this big public utility self-contained, and it is regrettable that there should be any departure from that policy. The service rendered to the public by the Postal Department is greatly appreciated. If there was any necessity to increase the charges on newspapers to make that branch of the service payable, I should not have objected to them being made; but I do not think it is proper to increase charges solely to swell the general revenue.

Dr Earle Page:

– The honorable member appears to be under a misapprehension as to the object of the amendment; it provides only that the old rates shall apply to newspapers - both city and country newspapers.

Mr Gregory:

– My amendment does not discriminate in any way.

Mr BELL:

– If that is. so, I am under a misapprehension. I understood the Postmaster-General (Mr. Lyons) to say that the amendment would lead to discrimination.

Dr EARLE PAGE:
Cowper

.- A misunderstanding seems to have arisen in connexion with this amendment. All that the honorable member for Swan (Mr. Gregory) is seeking to do is to substitute for the language of the bill, the wording of the present act. No attempt is being made to discriminate between, city and country newspapers, or between daily and weekly publications. The speech of the Postmaster-General seems to have misled some honorable members.

Mr Lyons:

– I did not suggest that the honorable member for Swan was trying to discriminate between newspapers; I simply replied to some of the arguments that he advanced.

Dr EARLE PAGE:

– I hope that the amendment will be agreed to, for it does not seek to discriminate in any way whatever. It is true, of course, that the country people will be the hardest hit by the passage of this bill, but that is because their newspapers are nearly all delivered through the post, whereas the newspapers of the city dwellers are ordinarily distributed by hand or some method other than posting.

Mr GREGORY:
Swan

.- I wish to make it quite clear that there is no suggestion of discrimination in my amendment. It is very well known, as the Leader of the Country party (Dr.* Earle Page) has said, that the country people usually receive their newspapers through the post. If they want the Australasian, the Bulletin, or any other periodical, they order it direct and so have to pay postage on it. The PostmasterGeneral should have advanced some substantial reason for this increase, but he has not done so. I hope even yet that the Government will reconsider the whole matter. Many people in the country subscribe for two, three or even four newspapers a week - they like to get the journals that specialize in particular subjects - and the extra postal charges that it is now proposed to fix will hit them fairly heavily. It is intended to increase the postal rate for letters to 2d. per oz. That will undoubtedly cause a reduction in the number of letters posted. We have always found that low postal rates mean bigger business for the Department.

Mr LYONS:
PostmasterGeneral · Wilmot · ALP

– I am sorry if my remarks misled any honorable members of the committee. I was really replying to some of the arguments advanced by the honorable member for Swan (Mr. Gregory), and if any misapprehension has occurred it has been due to the arguments which the honorable member used in support of his amendment. The facts have been put clearly to the committee and I ask them to reject the amendment.

Question - That the words proposed to be omitted stand part of the clause. (Chairman - Mr. McGrath.)

Ayes . . . . . . 27

Noes . . . . . . 18

Majority . . 9

Question so resolved in the affirmative.

Amendment negatived.

Mr Latham:

– I desire to make a personal explanation. I have just been reminded that the Prime Minister (Mr. Scullin) is absent from the chamber this afternoon. It has been a general understanding that the Prime Minister and the Leader of the Opposition should pair. I regret that I overlooked the honorable gentleman’s absence and inadvertently cast my vote in the division that was just taken. I am sorry that the oversight occurred, and am perfectly willing to honour the general understanding in such circumstances.

Mr YATES:
Adelaide

.- Whereas there hasbeen a change in the rate for newspapers reducing the weight from 20 to 16 oz. for1½d., the increase on second-class matter, which includes business catalogues, commercial papers, patterns and samples, amounts to 100 per cent., the rate having been altered from1d. for 4 oz. to1d. for 2 oz. That will fall particularly heavily upon businesses that have a large country order trade. I have received the following appeal from such a business firm in Adelaide : -

Dear Sir,

We sent you the following telegram this morning, which we hereby confirm: -

Why is postage on second-class matter increased 100 per cent. when letter postage increased only 33 per cent. Increased catalogue postage terribly serious. Please try adjust. Penny for three ounces would help tremendously.

This telegram practically explains itself. When we knew that the postage was to be increased from1½d. to 2d. it was quite bad enough, but when we found by this morning’s paper that the postage on second-class matter was to be increased from1d. for every four ounces to1d. for every two ounces we were astounded and we fail to understand why the increase of 100 per cent. is justified.

We might mention that last year we posted 150,000 catalogues, all of which were over two ounces, and you can therefore see at a glance what the increased cost is going to mean to us, not to speak of all the other firms throughout Australia posting large quantities of catalogues. Our suggestion is that you try and get this altered to1d. for every three ounces, which would be just about the fame proportion as the letter increase.

We trust you will take this matter up very seriously and do your best to get it altered. We would also point out that if it is not altered it will mean the practical closing down of our country order department, with a subsequent big loss to the post office. This step would also mean the dismissal of some fifteen to twenty assistants in the mail order department, as it would be practically impossible to carry this huge extra surcharge.

By giving this matter your best attention you will oblige.

I suggest to the Minister that this firm’s request might be met, and the rate altered from1d. for 4 oz. to1d. for 3 oz., instead of 2 oz. That is a reasonable proposal.

Mr Lyons:

– I pointed out, in the honorable member’s absence, that an international agreement exists that the unit shall be 2 oz., so . that it must be either 2 or 4 oz.

Mr YATES:

– I do not wish to ask for what is impossible, but the imposition will impose a tremendous hardship on firms such as the one that I have quoted. It will curtail their country order business and hamper trade. It is doubtful whether they could or would desire to add the additional cost to their goods. The imposition will fall particularly heavily upon country people, who rely largely upon the mail order business to replenish their supplies of clothing and so forth. I can quite understand the Minister being firm in his attitude with regard to the alteration in bulk postage weights on newspapers from 20 to 16 oz. for1½d. In our present straightened circumstances that is a fair thing, but I believe that his 100 per cent. increase on second-class mail matter is too heavy. I had hoped that it would be possible to meet these people by making the weight 3 oz. instead of 2 oz. and suggest that at the next international postal conference, an effort be made to alter the basis of the unit.

Mr Lyons:

– If the honorable member’s request were acceded to there would be one unit for overseas and one for local postages, which would greatly complicate and inconvenience the work of the Department.

Mr YATES:

– So that it is not impossible ?

Mr Lyons:

– It is really impracticable.

Mr YATES:

– I hardly accept that statement as freely as I did the previous one that it would involve international postal complications. If it is merely a matter of departmental arrangement the difficulty could be overcome.

Mr Lyons:

– It would be very difficult to do so.

Mr YATES:

– The honorable gentleman proposes to confront these business people with an even greater difficulty. I submit that the extra revenue that would be derived, would justify the employment of additional postal assistants. If that is not done, it will practically mean the closing down of the mail order department of many big concerns, with a consequent falling off in postal revenue.

Mr Lacey:

– Will not all postal order businesses be on the same footing?

Mr YATES:

-Firms such as the one that I have referred to rely to a great extent on their postal business. However, I leave it to the judgment of the PostmasterGeneral to determine whether it is not possible to give effect to the request that the weight should be 3 instead of 2 oz. for1d. I know that it will receive the consideration of himself and his Department.

Mr ARCHDALE PARKHILL:
Warringah

– I support the views expressed by the honorable member for Adelaide (Mr. Yates), but I further urge the Minister to revert to the old arrangement, and move -

That the words “ two ounces or part of two ounces “ be omitted from Part II. of the proposed schedule with a view to insert in lieu thereof the words “ four ounces or part of four ounces.”

The schedule in the principal act contains the words “ wholly set up and printed in Australia “, so that special concessions might be given to periodicals, catalogues and other printed matter produced in this country. For some reason this Government has eliminated those words and withdrawn that concession to local industry. The Minister has not explained the reason for that action. Apparently it is the intention of the Government to give no assistance to that branch of the local printing trade. Large emporiums usually have a very considerable country order business, and publish and circulate very ornate and expensive catalogues. Not only do those catalogues entail a good deal of printing, but they also give work to many engaged on photographic processing, etching, the manufacture of blocks, and so forth. Some catalogues contain as many as 34 to 36 pages, and are printed in several colours. In conformity with the general excellence of the work, these catalogues are printed on high-class art paper, which is considerably heavier than ordinary paper. This 100 per cent. increase in the postal rates of catalogues will cause firms to restrict their output of such literature, which will mean a corresponding decrease in employment in the various trades that I have mentioned, and a reduction in the post office revenue. I do not know what revenue the PostmasterGeneral expects to receive from these increased rates on catalogues and commercial papers; but I suggest that unless he expects a considerably increased amount, it would be better to keep men employed than to impose rates, the results of which, after all, is only problematical. The increased rates will seriously affect the mail order departments of the various emporiums throughout Australia. The reduction in the volume of their business will counterbalance any additional revenue which may be derived from the increased rates, so that the net gain to the department will be little, if any. The printing of catalogues forms a considerable proportion of the business of many printing establishments, and any reduction in the volume of the work must necessarily affect the unemployment market.

I do not know why the words “ wholly set up and printed in Australia “ have been deleted.

Mr Lyons:

– They do not mean anything.

Mr ARCHDALE PARKHILL:

– It would appear, that while the Government is penalizing the Australian printing industry, it will allow catalogues printed overseas to enter this country subject only to a 2^ per cent, primage duty. Because of the already serious condition of the printing trade, particularly in New South Wales, and the effect which these increased rates will have on the mail order departments of big city emporiums, and on unemployment, I ask the Minister to accept my amendment.

Mr FRANCIS:
Moreton

– I support the amendment, because I fear that if effect is given to the proposals of the Government, the result will be that predicted by the honorable member for Warringah (Mr. Parkhill). The Government hopes that by raising the rates of postage on books, periodicals, catalogues and the like its revenue will increase; but I am of the opinion that the increased rates will have a contrary effect - that instead of the revenue of the post office being increased, there will be greater losses. Moreover, the imposition of these higher rates must throw additional workers out of employment, both in the printing trade and in the mail order departments of various city firms, because any restriction of the use of catalogues must result in a falling off in country orders. Many firms now do a large volume of trade through their mail order departments. If that trade is interfered with, further unemployment must result. Housewives in the country have to depend a great deal’ on the illustrations and other particulars shown in these catalogues when ordering goods. The increased rates will place them at a disadvantage.

Mr Archdale Parkhill:

– Only the wealthy firms will be able to meet the increased cost of printing and posting catalogues.

Mr FRANCIS:

– That is so ; the tax will discriminate between wealthy and struggling firms.

Mr Maxwell:

– The country storekeepers may have a better chance to do business.

Mr FRANCIS:

– Most country firms have conveyances travelling with their goods, so that they will not be affected by the increased postage rates. In view of the very small additional revenue likely to be derived, it does not seem worth while to run the risk of throwing addi tional men and women out of employment. The relief to country stores will be very little, if any.

I regret that the post office is to be made a taxing machine. What sum does the Minister hope to realize from this particular increase in postal rates?

Mr Lyons:

– The items cannot easily be separated.

Mr FRANCIS:

– Has the Minister any idea of the extent to which these new rates will reduce the number of catalogues posted?

Mr Lyons:

– The department does not anticipate any reduction.

Mr FRANCIS:

– Wc shall probably find that there will be a considerable falling off in the number of catalogues posted. The Minister is taking a step in the dark - a step which will penalize people living in the country and increase unemployment in the printing aud allied industries.

Mr LYONS:
PostmasterGeneral · Wilmot · ALP

– I regret that I cannot accept either the suggestion of the honorable member for Adelaide (Mr. Yates), or the amendment by the honorable member for Warringah (Mr. Archdale Parkhill). I have already pointed out the difficulty of giving effect to the suggestion of the honorable member for Adelaide. Otherwise, I should be prepared to accept it. If it can be shown that his suggestion is practicable, I am prepared to have the necessary amendment made in another place.

Mr Yates:

– That satisfies me.

Mr LYONS:

– I cannot agree to the suggestion of the honorable member for Warringah, that there should be no increase in the rates on this class of postal matter. It would be wrong to leave out this section when increasing postal rates generally. The argument used by honorable members in opposition to the Government’s proposals could be used in connexion with practically any proposal to increase charges. I do not anticipate that the gloomy predictions of honorable members will be realized. It may be that, because the rates of postage on catalogues and similar publications have been based on a unit of 4 oz., such catalogues are bigger than is necessary. Smaller catalogues . might be just as effective.

Mr Archdale Parkhill:

– Smaller catalogues would mean less printing.

Mr LYONS:

– It is possible that there will be no reduction at all in the size of the catalogues issued by city firms. Their catalogues now reach a certain standard, and they may decide to make no alteration. It must be remembered that these catalogues are not sent to housewives merely to entertain them : they are sent as an advertising proposition. Hitherto, catalogues have been carried by the post office at a loss, from which the big city firms have benefited. I am surprised that members representing country constituencies, who had so much to say about a previous proposal, should now be concerned about the big city emporiums to the detriment of the outback country traders, who, as

One honorable member put it, have to hawk their goods to effect sales. The new rates will benefit traders living in the country. Even if there should be a falling off of employment in the mail order departments of big city firms, there will be a corresponding benefit to country traders.

Mr Arch dale Parkhill:

– They have no mail order departments.

Mr LYONS:

– But they have their businesses. Does the honorable member for Warringah suggest that persons living in the country will go without the goods they require merely because the size of a catalogue is reduced”?

Mr Archdale Parkhill:

– The Minister does not know what additional revenue the new rates will bring to the department.

Mr LYONS:

– The Government knows fairly well what additional revenue it will derive from its proposal as a whole, although it is difficult to separate the items. The important point is that the Government must get additional revenue. The new rates will have that result.

The honorable member for Warringah objected to the deletion of the words “ wholly set up and printed in Australia “. The existing rate for catalogues wholly set up and printed in Australia is 1d. for every 4 oz. or part thereof. The rate for printed papers is the same. There will be no differentiation between these two classes of mail matter when the new rates are operating.

Mr Archdale Parkhill:

– No preference is being given to books wholly set up and printed in Australia.

Mr LYONS:

– No. If any preference is to be given it should be given through the Customs Department and not through the post office.

Amendment negatived.

Clause agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 4367

FLAX AND LINSEED BOUNTIES . BILL

Second Reading

Debate resumed from 24th June (vide page 3107), on motion by Mr. Forde -

That the bill be now read a second time.

Mr GULLETT:
Henty

.- Mr. Speaker- [Quorum formed.] This measure provides for the payment of a bounty on flax or linseed of 15 per cent. of its market value from the 1st March, 1930, to the 29th February, 1932; of 10 per cent. from the 1st March, 1932, to the 28th February, 1934; and of 7½ per cent. from the 1st March, 1934, to the 28th February, 1935. I am opposed to it. In the first place I think this is no time to increase taxation unnecessarily, and further, I am opposed to these two bounties even on the merits of the case, as presented by the Assistant Minister (Mr. Forde). The cultivation of flax and the manufacture of linen are two of the oldest industries known to civilization. There is evidence of the growth and domestic use of flax fibre as far back as 5,000 years. Egyptian mummies have been found in tombs clothed with linen of the finest quality made some 2,000 years before Christ. There are many references in the Old Testament to the production of flax and the use of linen. For instance, the Book of Exodus, referring to the plague of hail, states that the flax and barley were smitten, and in Proverbs, a virtuous wife is thus described -

Her price is above rubies. . . . She seeketh wool and flax and worketh willingly with her hands. . . . She layeth her hands to the spindle and her hands hold the distaff. . . She maketh fine linen.

Flax has been produced in practically every civilized country in the world, but never has any country that I know of, with the exception of Australia, in normal times paid a bounty on its production. This is but another commentary, first of all, on the cost of production, and, secondly, upon the policy, which has run mad in Australia, of Parliament granting practically every request made by industry for subsidies.

The flax industry is not new in Australia. Iu Victoria, flax has been grown in a small way for some 40 years. The cultivation and production of flax was carried on for some year3 in Tasmania. It is remarkable that the industry has never prospered, or expanded. The proposal for a bounty in this instance is not good. As a matter of fact, a bounty equivalent to the one now proposed - taking into consideration the high cost of production to-day - was granted by this Parliament in 1907, and continued for ten years. The proposed bounty is on a sliding scale, beginning at 15 per cent, this year and decreasing to 7-J per cent, in 1935. The old bounty was at a flat rate of 10 per cent. At that timeall costs in this country were lower than they are to-day, and that grant actually had a higher purchasing power than the bounty proposed under this bill. The old bounty absolutely failed to encourage and prosper the production of flax fibre in Australia. It was limited to a period of ten years from 1907 to 1917. The sum of £13,000 was available each year to the industry, but in no year was that amount paid.

Other difficulties attending the flax industry in Australia are the relative unprofitableness of production here, and the positive unpopularity of this rural industry among our farmers. Towards the end of the war, in 1917 or 191S, the Imperial Government, finding its great supplies of flax fibre cut off from Russia, and requiring large quantities of linen for aeroplane manufacture, appealed to the Empire generally to endeavour to produce flax fibre. That led to a series of bounties being offered in various parts of the Empire. In Australia, the Government guaranteed £5 a ton for flax as cut in the paddocks and delivered to the factories. Afterwards, the bounty was increased to £6 a ton. The industry was subsidized in Canada for some time, and also in New Zealand and Kenya, East Africa. That was continued until about 1922. The proposed bounty is to continue from March of this year to February, 1935. The intention is to encourage the farmer* to produce flax, and to encourage capital to take up the manufacture of various types of linen and other products of flax fibre. If this is an honest bill, the financial assistance will end in 1935. It is proposed that the flax and linseed manufacturers are to pay the farmers £5 a ton for the flax that they produce and deliver to the factories. A similar amount was .paid under the war-time special grants, buT immediately that was withdrawn, flax production practically ceased, not only in this country, but also in England, Kenya, Ireland, and Canada. Therefore it is a fair anticipation that immediately the proposed bounty is withdrawn in 1935, this industry, which we are bringing into artificial existence, will once more collapse. The taxpayers’ money will have been wasted, the farmers will have been fooled, and a good deal of capital invested in the various factories will have been lost. In England, under the war-time bounty system, there were, in 191S, 13,000 acres under flax, and in 1924, only 600 acres. In Ireland, there were, in 191S, 143,000 acres under flax, and, in 1925, only 50,000. In Kenya there were, in 1920-21, 25,000 acres under flax, and only 500 acres in 1925. In Canada, the number of acres under cultivation was 31,000 in 1920, and only 6,000 in 1925. It is therefore evident that in those white-labour countries the industry failed when the bounty was withdrawn. The production of flax is a peasant industry, and will not sustain the Australian standard of living. Because of that, it has failed, and will continue to fail.

We are endeavouring, under this bill, to produce extensively in Australia, by means of subsidy from the Treasury, an article that is cheaply produced elsewhere and which it would pay industry in this country a thousand times over, to continue to purchase abroad. The Assistant Minister for Trade and Customs (Mr. Forde) has quoted a good deal from the Tariff Board’s report.

To mo, li lis a. most unsatisfactory report, because it. discloses an entirely inadequate investigation into the industry. The report is also most contradictory, and has been a, most, entirely ignored by the Assistant Minister. There is one safeguard in it which- he has tossed aside. To give the committee some idea of the unsatisfactory nature of this report, I shall quote a few of its passages. The question was put to the Tariff Board whether there was, in Australia, sufficient land of the right quality for the production of our requirements in linseed and flax fibre. The board has estimated in its report that Australia’s requirements of fibre amount to 1,370 tons a year, and of linseed to 22,300 tons- a year. It says that it is necessary to have 450,000 acres of country suitable for flax production to cope with those requirements, the assumption being that it is grown as a rotation crop and planted on the same land every three years. It then proceeds to show that this area is available. The evidence obtained from the different States proves what a sloppy investigation was made, and also what a sloppy report this is. The chief agricultural instructor, Department of Agriculture, New South Wales, showed in his evidence that most exhaustive tests of flax cultivation had been made in New South Wales. He said -

Those Lusts have been carried out for the growing nf dax for linseed, and from the results, thu department, although anxious to promote and encourage the cultivation, is forced to the conclusion that it cannot confidently recommend linseed culture in the States fis a profitable proposition. Special efforts were made hy the department in the year 1918-11), and trials were made at 25 localities in the State in 1918, and 41 in 1919 under the supervision of the district agricultural inspector, and whereas the wheat crop was a success in every instance, the flax crop practically failed. Although experiments are Mill being carried on, the prospects of its successful cultivation in the State are not encouraging.

Broadly speaking, the State of New South Wales contains every class of country that is to be found in Victoria. Tasmania, or South Australia. Yet. according to the evidence given by Mr. Patrick Ryan, there are in Victoria 100,000 acres af land suitable for the growing of flax. That is just a vague assertion, and it is not backed up by facts. But still more extraordinary is the evidence of Mr. J. Moore-Robinson, who is interested in a flax factory in Tasmania. In his evidence^ he estimated that, in Tasmania alone, there are 180,000 acres of land available for flax cultivation ; but he, too, did not, bring forward any facts to prove the accuracy of his statement. The evidence relating to the land that is available in South Australia is the most extraordinary of all. The report pf the Tariff. Board in this connexion reads -

Professor A. J. Perkins, of the Department, of Agriculture, Adelaide, stated that, although there were 307,000 acres of land suitable foi: the growing of flax in South Australia-

Mr Latham:

– That land is alreadybeing used for the growing of more remunerative crops.

Mr GULLETT:

– That is pointed our in the report, which says - these areas are at the present under other types of crops, and that before these other crops can be displaced by flax to any important degree, it will be necessary to show very clearly that flax is likely to prove a more remunerative crop that those at present grown on the land.

My object in quoting from this evidence is to indicate the extraordinarily indefinite and inconclusive nature of the report. I had it before me when I was in charge of the Department of Trade and Customs last year. I then formed the opinion, and I did not hold it alone, that this is one of the Tariff Board’s most unconvincing efforts. The only semblance of merit in the report lies in the fact that the recommendation of the board is very closely conditioned. That condition, however, has been entirely ignored by the Assistant Minister. On page 17. leading up to its recommendations, the board says -

The Tariff Board is of opinion that Governmental assistance to the industry at present, in the face of the earlier history already referred to, would only be justifiable if it could be governed by conditions which would assure that no bounty would be payable, unless an appreciable percentage of Australian require ments were produced.

It appears to the Board that the granting of a bounty of the nature applied for by tin? Tasmanian company might merely result in increased confidence of investors and consequent assistance in the flotation of the company, and the selling of shares. If it yielded no greater results than the earlier efforts, the money would be wasted.

The granting of the bonus requested by the Drysdale concern would, obviously, be a “ leap in the dark,” as there is no definite evidence at present that the machines, the subject of the application, will prove efficient in the treatment of fibre. The request for the advancement of money on the security of the crop has no merit.

The Board is prepared to recommend the payment of a substantial bounty, both on production of fibre and seed, but proposes to impose conditions that no bounty should be payable until the combined efforts of the producers in the Commonwealth result in the production in Australia of an aggregate quantity of fibre, and of seed equal to not less than one-fifth of Australia’s requirements as estimated in this report, namely, the requirements of 22,300 tons of seed and 1,370 tons of fibre.

In other words, the Tariff Board lays it down that, before any bounty is paid, the production should equal something like 4,000 tons of seed and 300 tons of fibre. That condition, as I have said, has been set aside by the Assistant Minister. He wishes this House to consent to the payment of the proposed bounty unconditionally. All that honorable members, and the people generally, know for a certainty is that taxation will be increased at a most ill-chosen time. There is no guarantee that the payment of the bounty will lead to the establishment of the flaxgrowing industry in Australia. Even if’ the report of the board had been followed, I should still have been opposed to the proposal; but without the condition that has been laid down, it savours very strongly of straight-out electioneering. Where is flax grown at the present time? It is grown at Drysdale, in the Corio electorate, and in two or three Tasmanian electorates that are represented by honorable members who sit opposite. It is a case of “ Bendigo “ over again. Such a proposal is particularly deplorable and unfortunate in the present state of our finances, and it should not have been brought forward.

I am opposed to the bill, first, because I do not think that we should be paying any bounties at the present time unless the case made out for one is overwhelming, and the industry concerned is big and of first class importance. As we know, this is not a white man’s industry. The separation of the flax fibre from the stem is one of the dirtiest and most miserable jobs un- dertaken by mankind anywhere in the world. It is an occupation that is not suitable for the Australian standard of living, and it will never sustain that standard unless it is heavily subsidized.

Secondly, I oppose the bill on the ground that this is an electioneering proposal. I appeal to the House to consider the effect that it will have upon Australian industry generally. I should like honorable members to reflect upon the great number of industries whose costs inevitably will be increased if this measure becomes law. Let us take the Assistant Minister’s own list of commodities in which flax fibre is either the main staple or is to be found in part, even though that list is not in any sense an exhaustive one. Between the coarsest material and the finest linen, the uses of flax fibre in one form or another, are almost innumerable. The honorable gentleman mentioned the following: -

Linen thread for tailors’ and bootmakers’ use; thread for embroidery; twine for harness-mounting, lines and nets for fishermen; and all kinds of cords and ropes.

He went on to say -

In the manufacture of woven goods, flax, when prepared and spun into yarns, is the essential fabric of lawns, cambrics, handkerchiefs, canvasses, pillow-cases, sheets, linens, aprons, shirtings, collars, surgical bandages, hollands, crashes, and similar materials.

I put it to honorable members opposite particularly, shall we do the wise thing if we increase the cost of the raw material required for the manufacture of those commodities? We know what will happen. For a few years the bounty will be paid out of Consolidated Revenue. Then prohibitive duties will be imposed on the articles I have enumerated, or on the raw material that comes in as flax fibre, and has to be made up in this country.

In the main there are two distinct, profitable, and laudable types of manufacture in this country. The first type of manufacture is that in which our own raw material is used. When such raw material can be produced at a reasonable cost, that is a most desirable form of protected industry. There are many classes of manufacture at present carried on in Australia, in which imported raw materials are used, and which are of great value to the Commonwealth as they provide employment for a large number of persons and great sums of money. For instance, we import crude rubber, but the balance of the work associated with the manufacture of the finished article is done in this country. “We are all very proud of our rubber manufacturing achievements in Australia, but the time may not be far distant when it will be considered that we should not import even crude rubber. If this craze for producing all our raw material develops to any extent an attempt will be made to produce rubber in hot-houses in Australia. Surely the people of Australia are entitled to obtain some of the cheap products from other countries. There is no reason why the Government should pursue its objective to an unreasonable extent and in endeavouring to assist the production of everything, constantly increase the cost of living to the community. It would pay Australia infinitely better to purchase its flax fibre, and in some cases the finished articles, instead of trying to produce everything in Australia.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– What articles?

Mr GULLETT:

– All those which were mentioned by the Assistant Minister for Trade and Customs (Mr. Forde) and which I quoted.

Mr Paterson:

– We produce cordings.

Mr GULLETT:

– Yes ; cordings, twines, and such things. If the Government persists in its present policy of paying a bounty, flax fibre in Australia will be very expensive, and the cost of the materials required in dozens of manufacturing industries will be heavily increased. The price level must be reflected in the cost of the goods in which flax is used, and the cost of living proportionately increased. The Assistant Minister has left no doubt in the minds of honorable members as to his intentions. He said that in 1928-29 we imported flax products to the value of approximately £1,000,000, and he wishes to develop the flax fibre industry in order to protect the industry to that extent, regardless of the cost. Why should this burden be placed upon the taxpayers ? I am thinking more particularly of those engaged in manufacturing in dustries, who should be permitted to produce at a reasonable price commodities in which flax is used.

Mr Gabb:

– Is not the Deputy Leader of the Opposition going to refer to the poor working woman?

Mr GULLETT:

– Many of the items which I have mentioned are required in the average household, and if this bounty is imposed the working women of Australia will have to pay still higher prices for them.

Mr Lewis:

– Is not the Deputy Leader of the Opposition in favour of the establishment of new industries?

Mr GULLETT:

– I believe still more in supporting those already established - those which are of service to the community ; but I am strongly opposed to the payment of a bounty to assist every possible industry that may be suggested, especially when, by so doing we place an additional burden upon the people. I understand that what is known as water retting is loathsome work, and thai prior to the war the bulk of the world’s requirements in flax was produced in Russia. I do not think there is another country in the world where the standard of living is anything approaching our own in which the retting of flax is undertaken.

There is one aspect of this matter, however, which is worthy of consideration and which I commend to the attention of the Assistant Minister. The growing of flax for the production of linseed could possibly be undertaken with fairly satisfactory ‘ results in Australia. In the United States of America millions of acres of land are used for growing flax for the production of linseed, but in that country the fibre side of the industry is left severely alone. In Canada, according to the latest figures which I have been able to obtain, approximately one million acres are under cultivation for the production of linseed. In those countries it has not been found necessary for the government to subsidize the industry in any way. Flax growing for linseed has been found very profitable when undertaken as a mixed farming proposition under the rotation system. The Tariff Board’s report on the possibilities of this industry is most unsatisfactory. It does not even touch the fringe of the problem. For a period of ten years after 1907 when production costs were cheaper than they are to-day, a substantial bounty was paid, but the results were anything but satisfactory. Then we had a wartime bounty, but immediately it was withdrawn the industry practically vanished. The Tariff Board’s report provides the House with very little definite information concerning the industry, particularly as to the area of land suitable for the purpose, or as to the cost of production.

Mr Gregory:

– The industry is languishing in New Zealand where flax ought to grow more satisfactorily than in Australia.

Mr GULLETT:

– Yes, it has fizzled out in New Zealand.

Mr Forde:

– But quite a different type of flax is grown in New Zealand.

Mr GULLETT:

– We have already had a lecture from the Assistant Minister concerning the type of flax which is grown in New Zealand. We all know that the New Zealand flax is totally different from that on which it is proposed to pay a bounty here. I have quoted the position in a number of other countries and have shown that even where the conditions are more favorable than they are in Australia the results have been unsatisfactory. Immediately the assistance whichwas given during the wartime period was withdrawn the industry collapsed, and if this bounty is not continued a high tariff will be imposed to protect the industry.

The Government should delay the passage of this measure and take the earliest opportunity to gain information on theproduction of flax in other countries where it is grown in large quantities, either for fibre or for linseed. I suggest that the Government should arrange with an experienced person with a knowledge of mixed farming who intends visiting other countries to conduct an investigation into the whole industry. The cost would not be great; such a person would do the work if part of his travelling expenses were paid or for a suitable fee.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– Why did not the Government of which the Deputy Leader of the Opposition was a member do that?

Mr GULLETT:

– That Government did not submit such a proposition as this. It is not the responsibility of a government to subsidize every tin-pot industry that may be brought under its notice by some interested person.

If this measure is not passed it will not inflict hardship upon any one. The quantity of flax grown in Australia is only nominal, and there is not a single farming district in Australia that would be any poorer if this measure were not passed. This is a most unfortunate measure. Its only merit even during a period of prosperity would be in relation to the production of linseed. If the Government wishes to assist the industry it should arrange for an independent expert to conduct an investigation in other countries, where flax production is profitably carried on without governmental assistance, before asking the taxpayers of Australia to contribute towards an industry which, on the information placed beforeus, is not worthy of our support.

Mr FROST:
Franklin

.- I am very pleased to support this proposal for the payment of a bounty on the production of flax which has been so strongly advocated by the Assistant Minister for Trade and Customs (Mr. Forde). I am at a loss to understand why the Deputy Leader of the Opposition (Mr. Gullett) should be so strongly opposed to what he terms “ this tinpot “ industry. The flax industry is worthy of our support. Flax products to the value of £1,500,000 are annually imported into Australia. It has already been demonstrated that flax can be successfully grown here, and if the industry is firmly established it will be the means of providing employment for a large number of persons. Large areas of land suitable for the production of flax are available in Australia, and in Tasmania alone, 180,000 acres can be made available for this purpose. In consequence of the introduction of motor transport, the demand for hay and chaff has considerably diminished, and those who, in the past, have been engaged in producing fodder could, if this industry were established, devote their attention to the production of flax and other crops. This crop needs a great deal of cultivation, and is most satisfactorily grown on good land. Moreover, it is a good crop to be grown in rotation with others, because the be3t results are obtained by growing it on the same ground only once in six years.

Mr Stewart:

– Why is that?

Mr FROST:

– It has been found by experience that one crop of flax will not do well immediately after another.

Mr Maxwell:

– Evidently it takes as much out of the land as it does out of the people !

Mr FROST:

– We are endeavouring io stabilize this industry. For years past efforts have been made to put it on a proper footing in Tasmania, but no assistance has been given by the Government, lt has been proved that flax can be grown -satisfactorily. It is especially desirable that the industry should be encouraged in Tasmania because it will furnish employment for many people. We know that young men leave Tasmania in considerable numbers every year because there is nothing there for them to do. In past years they came to the mainland, but even that avenue is closed to them now because things are so bad here. Employment vill be found for some of them, at any -ate, in the flax industry.

Mr Francis:

– Let them be given something better than this.

Mr FROST:

– Can the honorable member suggest anything better? In order to supply the whole of Australia’s requirements for flax it will be necessary to sow «0,000 acres.

Mr Gregory:

– With such a magnificent market why has flax not been grown –tensively before?

Mr FROST:

– For the expenditure of f.15,000 or £20,000 a year by way of a bounty we shall be able to develop an industry which will eventually be worth £2.000,000 a year to Australia. The » average yield for a crop of flax is two tons to the acre. It has been stated in evidence before the Tariff Board that the cost of cultivation, solving, harvesting, carting, ind all other charges including rent, hinder twine, &c, is about £4 an acre. The returns to the grower vary, of course, with r.he quality of crop. About £6 a ton is paid for the crop in the sheaf. An average crop may be regarded as equal to two tons an acre, but three tons and four tons an acre have frequently been harvested. By using better varieties it would be possible to increase the average yield beyond two tons an acre. Some varieties produce only a ton to the acre but others as much as four tons. On one property , near Latrobe £240 worth of flax was taken off fifteen acres. It is a very profitable crop. Linseed is imported into the Commonwealth to an annual value of about £750,000 a year, while canvas and linen threads worth about £1,000,000 are also imported. Those markets await us. When the industry is developed it will provide considerable extra revenue for the railways, and will furnish employment for many workers. Even from the small crop grown in Tasmania last year, the Tas.manian Government railways benefited to the extent of £400, and £200 was paid to carters.

The establishment of factories in connexion with the flax industry will involve the employment of much additional labour. In each centre where areas of not less than 200 acres of flax are grown there will be a deseeding and decorticating mill. These mills take the seed from the flax, ana produce fibre from the flax straw. One mill at Launceston employs about twelve men, and this year has handled about 500 tons of flax. The seed products of these mills will be taken to a common centre in each State, and from’ there the seed requirements will be dis’tributed to growers, and the fibres dis.tributed to canvas mills and linenthreadfactories within the Commonwealth. One1 company anticipates erecting three canvasmills, each designed to produce about’ three different weights of canvas. The’ economic aspect of this arrangement is that flax crops produce at least six qualities of fibre, the differences being due to climatic conditions, varieties of soil, vagaries of rainfall, incidence of frosts and droughts, period of sowing, and the nature of harvesting operations. Certain qualities of fibre are most suited for strong, light-weight canvas; others are most suited for middle or heavy-weight canvas. The idea, therefore, is that suitable fibres f rom all over tlie Commonwealth will be concentrated on the mills producing canvas of the type most suitable for the fibres concerned. Each of these canvas mills will directly employ 150 persons, of whom three-fifths will be male employees. Over and above the canvas factories, there will be a linenthread mill, employing about an equal amount of labour. Most of the flax grown in Tasmania is raised in the potato-growing areas, so that, instead of the land being left fallow, a crop of flax can be put in, and the return to the farmer greatly increased. I trust that this bill will be passed, because it is very desirable that the industry should be established on a sound footing.

Mr PROWSE:
Forrest

.- The speech just delivered by the honorable member for Franklin (Mr. Frost) should, I think, induce the Government to abandon this measure. As one who has had a life-time experience in agriculture, I can understand how it is that flaxgrowing has not been successful in Australia. If land, after growing a crop of flax, needs a spell of five years, the crop is not one for practical consideration.

Mr Bell:

– Who said it needed such a long spell?

Mr PROWSE:

– The honorable member for Franklin did. I understood him to say more than once in the course of his speech that flax could be grown on the same land only once every six years. People have been growing flax in Australia for the past 55 years, during good seasons and bad, and during times of prosperity and of depression. If it were possible to make a success of the crop, it should have been achieved during that long period ; but it has not been a success. I take second place to no one in my desire to develop primary industries natural to the country; but I object to voting public money to foster an industry such as, this, above all at a time like the present. If the Government were not satisfied that those who had attempted to grow flax in the past were proceeding on right lines, it could have co-operated with the State Governments in the conduct of experiments. Small areas of 100 acres or so should be set aside, and the land properly fallowed and fertilized. It could then be learned definitely whether or not the crop is suitable, without the expenditure of large sums of public money. This bounty bill is only fooling the people. No doubt wild-cat companies will start for the purpose of making flax products; people will be induced to put their money into them, and the whole thing will be a failure. I hope that the Government will make some attempt to conserve public money. The enterprise is doomed from the start. This flaxgrowing appears to be much on a par with wheat-growing. The average yield seems to be about 18 to 20 bushels, and it requires a rainfall of about 20 inches a year. The crop is worth about £20 a ton, or approximately £10 an acre. Wheat yields much the same. If the flax industry cannot stand on its own feet, and needs to be bounty-fed, the burden will fall on other sections of the primary producers, who export their produce. We have been told that, through this inordinate attempt to bolster up industries that cannot stand on their own feet, the exporting industries have been seriously handicapped. This will be an additional handicap upon the wheat and woolgrowers of Australia. I must oppose the bill.

Mr BELL:
Darwin

.- I do not anticipate that there will be any serious opposition to this bill. It is said that it is the duty of an Opposition to oppose. I would say rather that it is the duty of an Opposition to examine critically every proposal of the Government, especially if it is a proposal to spend public funds. In his role as Deputy Leader of the Opposition (Mr. Gullett), the honorable member for Henty, made a valiant attempt to criticize the present proposal. I cannot follow his reasoning. After saying many uncomplimentary things about the Tariff Board’s report, notably that it was most unsatisfactory, he proceeded to tell us that the Minister had ignored the whole report in submitting this bill.

Mr Gullett:

– I said that the one redeeming feature in the report the Minister had ignored.

Mr BELL:

– One would think that if the Tariff Board’s report was so shocking, as the honorable member makes out, the Minister’s failure to follow it should commend itself to him. At any rate, the honorable member for Franklin (Mr. Frost), who is a practical farmer, and has examined this proposal critically, has told us why he considers flax growing for fibre or linseed is likely to be a success in Tasmania, and in other States with similar soils. The Deputy Leader of the Opposition says that the Tariff Board has given no evidence in support of its estimate of the number of acres suitable in the several States for cultivation of flax. It is not likely that an expert would visit a district with a chain and measure it to ascertain exactly what number of acres could be used for certain cultivation, but it is an easy matter for Mr. Moore-Robinson, who submitted evidence to the board, with his practical knowledge of the fitness of land for growing flax, to be able to estimate the number of acres in. a certain district suitable for flax growing. His estimate of 180,000 acres in Tasmania is not an exaggeration. The Deputy Leader of the Opposition also suggests that land which is capable of growing flax is now growing other crops.

Mr Gullett:

– Without subsidies.

Mr BELL:

– The honorable member could not say that the other crops are profitable. If he wants to know where there is any land suitable for. flaxgrowing, which is now producing nothing, I invite him to visit my electorate. I can show him 180,000 acres of land suitable for growing flax which is now growing nothing but trees or rubbish. Whether it would be a payable proposition to develop it for the purpose of f rowing flax, I do not propose to say, but £r. Moore-Robinson’s estimate of 180,000 acres applies to land in Tasmania that is or has been cultivated and is eminently suitable for growing flax. There are in other States districts with similarly suitable soil. I have some practical knowledge of the subject, and I give it as my opinion that flax can profitably bc produced at £5 a ton, the figure given in the Tariff Board’s report, whereas there are many unprofitable crops now being produced on land capable of growing flax. For instance, there has been a decline in the production of hay, the reason for this being the increase in motor transport. Hay-growing is practically at an end as a profitable industry, and we must have something to take its place.

The honorable member for Forrest (Mr. Prowse), in his criticism of the honorable member for Franklin (Mr. Frost) claims that flax cannot be grown every year on the same land. There may be some soils capable of producing the same crop year after year for a number of years, but every practical farmer knows that a rotation of crops is necessary, and it is stated by practical farmers that flax is a suitable crop for growing in rotation with potatoes, peas, and other products, now produced on soil suitable for flax-growing. We import a tremendous quantity of flax fibre and commodities produced from flax as well as linseed, and it appears to me that it is just as essential to produce in Australia those things that are needed in Australia as it is to export goods. Sufficient flax could be grown in Australia to replace the flax products- which are imported at the present time at the rate of £1,500,000 worth per annum. There is, therefore, every prospect of the industry being developed until it becomes one of the most successful of our primary industries. It may not be a suitable crop on land which is now used for wheat-growing, but we want to utilize every variety of soil in Australia for the production of something for which each variety is suited. We should not rely on wheat and wool alone for the prosperity of the rural districts of Australia. I differ from the Deputy Leader of the Opposition (Mr. Gullett) in regard to his statement that the flax-growing industry cannot be maintained in Australia at the present high costs of production.

Sitting suspended from 6.15 to 8 p.m.

Mr BELL:

– Flax is cultivated by methods very similar to those adopted in other important agricultural industries. The ground is prepared by means of tlie most up-to-date implements, the crop is harvested with machinery similar to that used for harvesting wheat, oat and hay crops, and the seed is threshed with ordinary threshing machines. Therefore, I dispute the contention that the cultivation of flax could not be economically carried out in Australia owing to the cost of labour.

This bounty differs to an extent from others that have been provided by this Parliament, such as the cotton bounty. Child labour, for instance, would not be employed in this industry, nor would it necessarily involve the employment of cheap labour. Black labour or child labour might be considered desirable for the picking of cotton, but not for the cultivation or harvesting of flax. The provision of this bounty would certainly not increase the difficulties of other industries, nor would it increase the cost of commodities to the community, as suggested by the honorable member for Henty (Mr. Gullett). The tariff protection given to certain industries necessitates the granting of protection to others, but that objection do.es not apply to flax-growing. This bounty is definitely limited as regards both the amount and the period for which it is to be paid. It has been recommended by both the Tariff Board and the .Development and Migration Commission.

Tasmania and many parts of Victoria are particularly suited for the cultivation of flax. It can be grown in Gippsland, Corio, and Wannon, in Victoria, and at Mount Gambier in South Australia. The success of the industry in Tasmania would be of special benefit to that State, which needs a greater variety of primary products than it can now grow successfully in competition with other parts of the world.

I welcome this bill. I am not prepared to oppose a bill which I consider desirable 3imply because it emanates from the present Government. I shall give my support to any proposal that appears to me in the best interests of the Commonwealth, and especially of the primary producers who are deserving. I hope that my friend the honorable member for Moreton (Mr. Francis) will support this measure as heartily as he supported the cotton bounty. There seems to be some doubt whether cotton can be grown under Australian conditions, but it has been proved that flax can be successfully cultivated in this country. I cannot speak from first hand knowledge of the process of retting flax, but we have the evidence of the Tariff Board that this can be done by machinery. I have every confidence that the -bill will be passed without opposition.

Mr WHITE:
Balaclava

.- I oppose the bill, because in my opinion this is not the time to bring forward bounty measures. This proposal would involve the Government in the payment of £20,000 a year to assist a few flaxgrowers in Tasmania., and in the electorate of Corio. There has been a serious decline in the national income, the natural corollary of which should be reduced expenditure. The Government has brought down a budget under which it proposes to take from the community another £14,000,000 in taxation, and yet it gaily proposes to spend a large sum in assisting the flax-growers. Despite reduced expenditure in the Defence Department, the budget will involve an increase in general expenditure of over a million. Already bounties have been granted on cotton, sewing machines, and so on, without regard being had to the source from which the money is to come. It i. essential for Australia to return to the road that, leads to prosperity. That means that wc must live so far within our incomes that we can pay from the proceeds of our exports the interest on our overseas debt, and provide a sinking fund for its liquidation. Will the payment of large bounties on industries such as flax growing lead us back to prosperity?

One of the great financial authorities of Great Britain is now visiting Australia to advise us how best we may extricate ourselves from the financial morass in which we are floundering. We will shortly have his opinion as to whether we can afford further bounties. The time seems to be coming when the Prime Minister will be saying in his party room, “Stand up, any honorable member who has not yet been given a bounty “. I shall oppose any such proposal as this that impairs the financial integrity of the Commonwealth. Capricornia has a cotton bounty; West Sydney is to have u most expensive ship built for the purpose of providing work there ; Bendigo is to have a sewing machine bounty. Now we are asked to give a bounty on flax to suit Corio. We all know what the honorable member for Calare (Mr. Gibbons) also led the Government into when he promised the electors in that constituency 6s. 6d. a bushel for wheat, if they would return a Labour government to office. That promise has brought grey hairs to the Minister for Markets (Mr. Parker Moloney), who promised the farmers a guarani.ee of 4s. a bushel, and the bill which was to give effect to it was rejected by the Senate. That is one of the results of the Government’s disregard of the economic conditions of the country.

Mr Riordan:

– The Government that the honorable member supported promised £20,000,000 for ‘bousing.

Mr WHITE:

– I did not make that promise. I admit that in many instances bounties have assisted in the establishment of industries; but each case should be considered on its merits. The time is certainly not opportune for the expenditure proposed under this bill. The fact that Drysdale, or any other part of Corio, is suitable for the cultivation of flax, or that a little of that commodity is grown in Tasmania does not warrant the Government in assisting the industry with a bounty. Is there any honorable member who knows of further industries that the Government can assist at the expense of the country?

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– Yes; I have such an industry in mind.

Mr WHITE:

– Then I hope the honorable member will bring it under notice. This bill also has the usual objectionable features with regard to labour conditions that one finds associated with industrial measures brought down by the present Government. The cost of production is to be kept up, willy-nilly, to that unfortunate level that has brought us to our present unhappy economic position. I oppose this bounty on the broad principle that the country cannot afford to pay it.

Mr FRANCIS:
Moreton

.- I have given the subject matter of this bill much consideration, because I am particularly anxious to help Tasmania, and have always had that desire. I was privileged to travel throughout that State recently as a member of the Public Accounts Committee, when it investigated Tasmania’s claim for special assistance from the Commonwealth, and I am satisfied that that State is in an unenviable financial position. If I could detect any feature of this bill which would assist Tasmania permanently, I would gladly support the measure: but the mon

I analyse the proposal, and the arguments advanced in its favour, the more convinced I am that it should be rejected. First, one has to ask what chance there is of flax-growing becoming a staple industry in this country. This is a proposal to grant £20,000 by way of bounty, although we are taxing the people of Australia to the extent of an additional £14,000,000 so that we may square the national budget. If honorable members from Tasmania or any other part of the Commonwealth can satisfy me that there is a reasonable chance of the flax industry becoming successful, I am ready to be convinced; but the debate on this bill has furnished no proof of such a possibility. If flax grows well in Australia, it seems to me that the greatest prospect of success lies in cultivating it for linseed only. The chief point advanced by the honorable member for Franklin (Mr. Frost), and the honorable member for Darwin (Mr. Bell) is that land suitable for the growing of flax’ is to be found in Tasmania and on certain parts of the mainland. Let us examine the report of the Tariff Board to see how successful the cultivation of that crop has proved in the past. The report states -

Estimated on actual production in Australia in former years, the 70-acre crop of flax in Victoria for the year 1927, included with the 150-ac.re crop of Tasmania, would produce, approximately, 8 tons of flax fibre, and 18 lb. of linseed, and, seeing that the requirements of the Commonwealth are estimated at 1.370 tons of fibre and 22.300 tons of linseed, it is evident that Australia does not supply any appreciable quantity of her requirements.

As a matter of fact, Australia does not produce 1 per cent, of her requirements. The report also states that -

In 1918, at the request of the Imperial Government, the Commonwealth Government undertook the control and management of the flax industry in Australia, and at the outset guaranteed flax-growers £5 per ton for their flax in the sheaf. In 1919, 1920, and 1921, the guarantee was increased to £fi per ton.

But, in spite of every effort that was made to increase the production of flax, no real success was achieved. The area sown to flax in Victoria between .1924 and 1927, inclusive, was as follows: -

The position in South Australia is just as hopeless. The best reply that can be given to the observations of the Assistant Minister in connexion with South Australia is the following extract from the board’s report: -

Professor Arthur James Perkins, Director of Agriculture for the State of South Australia, gave evidence that flax has been grown in South Australia, only to a very limited extent, and it is doubtful if to-day an acre of it could be located growing. Many tests have been made and experimental plots sown, but they have not been a success owing to the attacks of caterpillars. Through this and also through lack of an assured market, farmers have not been inclined to persevere with the development, of this industry.

In these circumstances, it is not of much use for the Assistant Minister to lay stress on the fact that the professor also said that there are. 367,000 acres of land in that State suitable for growing flax. This land is, of course, under profitable crops at present.

Mr Gabb:

– What about Queensland?

Mr FRANCIS:

– No flax is grown in Queensland.

Mr Gabb:

– That is why the honorable member is opposing the bill.

Mr FRANCIS:

– That is not so. I am prepared to support a proposition for the growing of the flax plant for seed. The position in New South Wales is also very unsatisfactory. One of the witnesses before the board stated that experiments had been conducted by the New South Wales Department of Agriculture on government experimental farms, and also, for many years, on plots owned by farmers. The seed for these trials was distributed free by the Government. In this connexion the report stated -

These tests have been carried out for the growing of flax for linseed, and from the results, the department, although anxious to promote and encourage the cultivation, is forced to the conclusion that it cannot confidently recommend linseed culture in the States as a profitable proposition. Special efforts were made by the department in the year 1018-19, and trials were made at 25 localities in the State in 1918, and 41 in 1919 under the supervision of the district agricultural inspector, and whereas the wheat crop was a success in every instance, the flax crop practically failed. Although experiments are still being carried on, the prospects of its successful cultivation in the State are not encouraging.

The position in Western Australia is also such that there is little likelihood of successful developments there in this industry. The board asked Mr. G. L. Sutton, Director of Agriculture in thatState, for certain information, and, in reply, Mr. Sutton said that although the climate and soils of Western Australia were suitable for the growth of flax, the settlers considered that it,” required more extensive work than they were prepared to give it.”

It will be seen, therefore, that nothing practicable has been, or apparently can be done in this industry in Victoria, South Australia, or Western Australia.

The following paragraph from the report shows what has been done in Tasmania : -

The Tasmanian Flax and Canvas Co. Ltd., of 13 Patterson-street, Launceston, has been formed for the purpose of encouraging the growing of flax for linseed and fibre, and later to manufacture canvas. This company contracts with the flax-growers to purchase flax when harvested at a base rate of £5 per ton. The proposals embodied in the prospectus are firstly to purchase crops from which they would take linseed, and, secondly, extract the fibre from the remaining straw, and later they estimate to have plant erected for the manufacture of canvas. At the time of the inquiry the factory consisted of a small plant for the recovery of seed.

That is, in my opinion, the only aspect of the subject which is worth some consideration.

Recently Mr. Norman C. Grigg, director and manager of the Drysdale Flax Company Pty. Ltd., travelled extensively through Ireland, Belgium, and other countries to investigate the treatment of flax fibre, and he informed the board that he was -

Firmly convinced that the present methods of water retting or dew retting, as adopted in Australia and other parts of the world, were not satisfactory.

He went on to say that he was designing a machine for the more economic handling of flax for the production of fibre. But the machine had not then been tested.

Mr Gullett:

– The machine has since been tested, and proved to be a complete failure.

Mr Lewis:

– That is not so.

Mr FRANCIS:

– There are many serious labour problems connected with this industry which make it totally unsuitable for Australia. In European countries it has been the practice from time immemorial to pull flax up by the roots rather than cut it, as in the case of corn. But it will be apparent to everybody that, while that method might be practicable in low-wage countries overseas, it would not be economical in Australia, where high wages are the rule. Although the reaper and binder has been used in Australia to harvest the flax, it has not been too successful, for it injures the flax. It was for this reason, doubtless, that Mr. Grigg endeavoured to invent a machine. As a matter of fact, we are faced with the extraordinary proposal that a bounty shall be provided for the production of flax practically to enable a company to import a machine for the purpose of conducting experiments.

Mr Bell:

– Where did the honorable member get that information?

Mr FRANCIS:

– It is in the report of the board.

Mr Bell:

– That report is three years old.

Mr FRANCIS:

– The relevant paragraphs of the report, in this connexion, are as follow: -

Evidence was given that in European countries flax is pulled by hand, but it would not be an economic proposition if the same method were adopted in Australia, owing to the higher wages paid here for that class of labour. The reaper and binder is used here for the purpose and has shown a considerable saving on the hand pulling. Some claim a percentage, of fibre is lost through the few inches of stump left, but from evidence this is of such small value that it is not worth consideration.

A flax pulling machine has been patented and manufactured in Canada and it is the intention of the Tasmanian applicants to import one of these machines for trial.

The machinery used in the flax mills in Australia is very primitive, necessitates a large amount of hand labour and produces a comparatively low percentage of fibre from the straw.

A good deal of activity in the way of developing machinery for the greater production and more economical handling of the fibre took place in Europe during the latter part of 1021, hut no evidence has been submitted of the results.

Another difficulty in the way of the successful establishment of the industry in Australia is that the seed has to be imported, but even this has not proved satisfactory, as the following paragraph in the Board’s report indicates : -

Seed has been imported at various times but the results have not been immediately successful owing to the seed requiring a few years for it to become thoroughly acclimatised.

Although in 1907 the Commonwealth Government granted a bounty of 10 per cent, on the value of the flax products, both fibre and seed, produced in Australia, and £13,000 per annum was made available for each of the ten years from 1907 to 1917, there was no marked increase in the acreage sown to flax, and in 1917 the bounty was allowed to lapse. The amounts paid in bounty during the years the act was in operation, were as follow: -

I have already made passing reference to the labour difficulties connected with this industry. One of the principle of these is in connexion with the retting of the crop. Retting is a term used to describe the rotting of the flax. The fibres of the flax plant, in their natural state, are bound to the stem by a pectinious compound, a substance which is characteristically gummy or gelatinous. For commercial purposes it is essential to separate the fibres from the stem, and this object is accomplished by retting or scutching. The function of retting is to decompose, by fermentation, the adhesive substances which bind the fibres to the stem and to sufficiently rot the pith or stem that in the subsequent operation of scutching it will break and freely separate from the fibres which are held, and remain in the scutchers’ hands. Several retting processes are followed at present. Under one method the retting is done in pools of stagnant water. In another, it is done in ponds of water which are

Bioowly changed during “the process of retting. The Sax is usually left submerged for about fourteen days. One can imagine the stench that arises when the decaying flax is taken out of the water. A third process is to submerge the flax in sluggish streams or marshes. In some places double retting is practised. In fact, this is almost always- done when the finest flax is required. In this case the flax, after being pulled, is set up in long stooks in the field to dry. When thoroughly dry it is put up into stacks, or stored away in barns, and protected as much as possible from vermin until the following spring. Then, after retting, it is again dried and, if of good quality, is again stacked until the following spring, when it is either grassed or retted a second time. The second retting is frequently done, however, in the same season as the first. Still another process of retting is known as dew retting. The flax, when retted by this method, is spread out thinly and evenly over a field where the grass has been recently and closely cropped. About 1 to *li times the area of land in which the flax was produced is required for dewretting. The heat, dew, rain and sometimes the snow, all contribute to carry on the process of fermentation. At intervals of about a week the rows of flax have to be completely turned over. Beginning with the first row, and with the aid of a long, straight rod, the flax is turned on to the space originally and purposely left when it was first spread out. The second row is then turned over to fall into the position left vacant by the first row, and so on with every succeeding row. Additional turnings are necessary after every heavy fall of rain, and also every few days in showery weather. It will be realized, therefore, that this is a costly and slow process, which might be carried on successfully in low- wage countries, but cannot be profitably adopted in Australia if we are to keep up our standard of living - and I hope that our standard of living will be maintained. It seems to me that it is utterly impossible for us ever to establish this industry on a profitable basis in Australia.

The industry has been overtaken by serious difficulties, even in Ireland. This is shown by a paragraph which appears in the Journal of the Parliaments of thu Empire, volume 9, No. 2, for April, 1930. at page 318. The paragraph is included in a short report of the proceedings in the House of Commons on the 11th March last, on which occasion Major Hall-Thompson directed attention to the serious state of the industry in Ireland, and urged that the Imperial Government should grant assistance to the workers iu the industry. If the very long experience of Ireland in flax-growing has not enabled her to avoid difficulty, how can we hope to avoid it?

But it is possible that we could do something in Australia in the direction of growing flax for the seed. I ask the Minister to withdraw the bill to enable him thoroughly to investigate the subject. If he can then prove to the House that there is a reasonable prospect, of successfully establishing the industry, I shall be delighted to support any efforts to that end. But on the facts adduced by the Tariff Board and by my own personal inquiry, I cannot believe that success will follow any attempt artificially to set up the industry in Australia at this juncture. I do not believe that we should, by the aid of this bounty, encourage people to launch out into the industry, particularly those in Tasmania who already have their own problems.

Another reason that has been advanced for encouraging the establishment of the industry here is that each year we import over £1,000,000 worth of flax products. I remind honorable members that these are the output of low-wage countries, and that their manufacture here would not be practicable at anything near the same cost. Handicapped as it would be by the drawbacks associated with the process of retting in Australia, I see not the slightest chance of establishing either the growth of flax or the manufacture of its products in this country, unless we imposed a prohibition on the importation of flax and flax products. That, of course, would so inflate the price of everything that we use that is made from flax that our endeavours would be automatically checkmated thereby. Some of the items whose importation would have to be prohibited are flax, various linen piece-goods, cordage, fishing lines and nets, cottons of all description, twine, silver cordage, and a whole series of other commodities that are used in the daily routine of our lives. Our burden is already sufficiently heavy, and the inflation of prices, consequent upon a prohibition of the importation into Australia of flax and its products, would be the last straw that would break the camel’s back. If Tasmania were to pin its faith in its financial recovery to the growth and manufacture of flax, its position would become worse than it is to-day. There are many other avenues along which that State may advance to regain its former prosperity, and I am hopeful that the recommendations of the Public Accounts Committee, following the result of its inquiry into Tasmania’s disabilities, will provide a remedy that will give some slight relief to the island State. The Minister would be well advised to withdraw the bill and to consider more fully the development of the flax industry by concentrating on the production of linseed, and the manufacture of its by-products. If that were done there would be some prospect of success. I should be prepared to support the Minister in his endeavours along those lines.

Mr LEWIS:
Corio

– I listened with a very great deal of interest to the speeches emanating from honorable members opposite in opposition to this proposal. It appears to me that the Deputy Leader of the Opposition (Mr. Gullett) and his colleagues base their chief complaint on the fact that the constituencies in which flax-growing is. carried on are represented by honorable members on the Government side. They regard that as a reason why the Government should not proceed with its proposal. Their’s is a parochial attitude savouring strongly of politics. I believe that the Government has every justification for introducing this measure. Its action indicates that it is prepared to give sympathetic heed to the need of those who are pioneering the flax industry in Australia, men who received no consideration from the Government that previously occupied the Treasury bench. The honorable member for Moreton (Mr. Francis) quoted from st document purporting to give the views of Mr. Grigg, of Drysdale. Whatever may have been the opinion of Mr. Grigg on the subject in the past, there is no doubt that he now supports the proposal of the Government to grant a bounty to assist the cultivation of flax in Australia. I contend that the assertion that Mr. Grigg’s flax manufacturing machine is a failure is absolutely inaccurate. The machine is at. present working very efficiently, and is eliminating from the process of flax manufacture many of the disagreeable factors that were enumerated by honorable members opposite. The machine is an Australian production, the creation of Mr. Grigg’s brain. His experience from its operation has convinced him thai certain minor improvements can be effected that will still further increase its efficiency. By his process, it is no longer necessary to submit flax either to water or dew retting. His machine makes it possible for the whole process of separating the fibre from the flax straw to be carried on under the shelter of a roof. Therefore, many of the objections that were raised against the industry by honorable members opposite are rendered ineffective.

Mr GREGORY:

– It is a wonder that Mr. Grigg does not make use of his invention in the Old Country, where he would make a fortune with it.

Mr LEWIS:

– Mr. Grigg is an Australian, a returned soldier, who lives at Drysdale. The honorable member, who professes such sympathy for returned men is> apparently, on this occasion, prepared to sneer at the efforts of one of their number who is trying to pioneer an industry in Australia.

Mr Gregory:

– That is merely the honorable member’s way of putting it.

Mr LEWIS:

– His machine is in the initial stages of its development, and it is hoped that, as the result of experience, it will eventually be perfected, enabling most of the objectionable features of flax production to be eliminated. It is true that Mr. Grigg’s process of dealing with the flax is not universally adopted! It not only allows the fibre to be separated from the straw, but it enables Mr. Grigg to produce a valuable edible cattle fodder, which he disposes of profitably to dairy farmers. It has been demonstrated by analysis that that edible fodder is more nutritious than ordinary hay. Mr. G-rigg is whole-heartedly behind the bounty proposed by the Government as a means to assist to establish the industry in Australia. Some of our rope and twine manufacturers have experimented with his flax fibre, and have produced ropes which have been found to be most satisfactory. Their only complaint is that the fibre produced by Mr. Grigg’s process during summer time is not as good as that produced in winter. The only period when’ he has to apply moisture to assist in its production is during the abnormally hot summer months. Even then the whole thing can be done under cover of a roof. It is no longer necessary with his process of manufacture to resort to the antiquated methods referred to by honorable members opposite.

We are importing from overseas, and particularly from Italy, large quantities of sisal hemp, which is used in the manufacture of cord and rope. If, as a result of the payment of this bounty, we can satisfactorily develop the flax industry in Australia, there is no reason why we should not be able, in a very short space of time, to produce all the fibre that we need for the manufacture of the rope, twine, cord, and other associated requirements in Australia, so making ourselves independent of these importations from overseas. That is an object worthy of attainment, one that should have the approval of honorable members opposite. Instead, they devote the whole of their time to making sneering references to the failure, in the past, to produce a sufficient quantity of flax in Australia. I point out that quite a number of local industries, .that are how in a flourishing condition, had in their initial stages to be spoon-fed either by the Federal or the State Governments. They have now become valuable attributes to Australian industry, and there is no reason why a similar story should not be written with regard to the flax industry.

The amount of bounty now proposed to encourage the production of flax in this country will not place so heavy a burden on the people as they have to bear in connexion with the dairying industry. As has been pointed out on more than one occasion, the people of Australia are paying from 6d. to 8d. a lb. more for their butter than is obtained for similar butter sold overseas.

Mr Paterson:

– That is an exaggeration.

Mr LEWIS:

– My authority for that statement is Mr. O’Connell, the proprietor of the Geelong Butter Factory. He told me that butter was sold in the multiple shops in London at ls. 2d. a lb. when we in Australia were paying ls. lOd. a lb for it.

Mr SPEAKER:

– The honorable member will not be in order in developing that line of argument very far.

Mr LEWIS:

– I am endeavouring to demonstrate that other industries which are regarded as worth preserving are receiving an indirect subsidy far in excess of the bounty proposed to assist the flaxgrowing industry. There are no more ardent supporters of the scheme to assist the dairying industry than are some honorable members opposite who oppose this bill. I commend this proposition to the House because I believe that before long it will result in the establishment of an industry which will be of great benefit to this country.

Mr PATERSON:
Gippsland

.- We have heard some interesting and diverse opinions on the merits and demerits of this bill. The honorable members for Corio (Mr. Lewis) and Franklin (Mr. Frost) have shown that they are wholeheartedly in support of it. On the other hand, the Deputy Leader of the Opposition (Mr. Gullett) proved himself to be a “whole hog” oppositionist to it. The honorable member for Moreton (Mr. Francis) is in favour of assistance being given to the industry by means of a bounty on linseed and linseed oil, but not for the production of fibre from flax. One could not help wondering whether, subconsciously, the honorable member had made up his mind to support one side of the industry and not the other, because of a fear that flax might in some way come into competition with cotton.

Mr Francis:

– That is unjust. I take a broader view than that.

Mr PATERSON:

– If the honorable gentleman assures me that my fear is groundless, I shall withdraw the remark.

Mr Francis:

– Surely no such assurance should be necessary.

Mr PATERSON:

– The Deputy Leader of the Opposition said that if this bill were passed it would add to the already heavy burden on other industries. So far as I could read his mind, the honorable member feared that at some later stage a heavy duty would be asked for to replace the bounty, and that, in consequence, other industries which use flax as a raw material would be affected. The honorable gentleman evidently feels that this proposal is on all fours with the bounty on the production of sewing machine heads with which we dealt a few days ago. But there is a very big difference between the two propositions. In the case of sewing machine heads, the bounty, together with the duty, represents a protection of 70 per cent. against Britain, and 85 per cent. against other countries, with a deferred duty which would be higher still. Had the two measures been the same ; had this bounty been as great in proportion to the value of the product as the bounty on sewing machines is to the value of the article produced, I should have agreed with the honorable gentleman that it would be dangerous to attempt to establish any industry on such an artificial foundation. But this measure provides only for a bounty of 15 per cent. on the wholesale value of the flax produced for the first two years, 10 per cent. for the next two years, and 7½ per cent. for the fifth year. The bounty will dininish as time goes on. I submit that the bounty proposed in this measure bears a reasonable proportion to the value of the product on which it is to be paid. When the production of flax has increased to such an extent that a bounty is no longer practicable, the natural way to protect it would be by means of a duty. But if the industry can grow to substantial proportions with such moderate assistance as is proposed in this bill, that growth must be on a sound basis and it would prove that it required little or no duty. It would be on almost a competitive basis from the start. On the other hand, if the industry cannot flourish with moderate stimulus, we are better without it. No industry should expect to be permanently spoon-fed. The assistance which is being offered in the measure before us, however, is so reasonable and moderate that we need have no fear that the growth of the industry will be artificially forced.

The weakest joint in the armour of the Minister in charge of this measure is that, despite the bounty already paid, there has been little or no development of the flaxgrowing industry. The Deputy Leader of the Opposition (Mr. Gullett) said that the money already paid by wayof bounty on the production of flax had practically been thrown away. In my opinion, the industry has a better chance of succeeding in the future than it had some years ago, because of improvements in methods and machinery, of which the honorable member for Corio (Mr. Lewis) has already given some details. The honorable member pointed out that dew retting is no longer necessary when the fibre is to be used for the making of cordage - the use to which most of the flax produced in Australia would be put. Taking all the circumstances into consideration, the industry is worth assisting further on this low basis of bounty. Whatever its chance of success, it can at least be said to be greater than that of the cotton industry. The honorable member for Franklin (Mr. Frost) said that Australia imports, every year, goods, both manufactured and otherwise, of which flax forms a part, to the value of £2,000,000. I think that was an over-estimate. For the last four years, the average value of the canvas and duck imported into this country was about £800,000. I am not at all enthusiastic about our being able to produce for ourselves -at any rate under existing economic conditions - such highly manufactured articles as canvas and duck on a purely competitive basis. Nor am I desirous of seeing more industries started in this country on a highly artificial and uneconomic basis. But in addition to the importations of canvas and duck, Australia imports each year linseed valued at £400,000, and linseed oil valued at £100,000. I submit that whatever difficulties we may have to face, in producing on a competitive basis, such highly manufactured goods as canvas and duck, those difficulties would not confront us in providing our own requirements of linseed and linseed oil.

Mr Francis:

– Then the honorable member supports my contention.

Mr PATERSON:

– Yes. Tlie importations of those articles alone, represent about £500,000 per annum.

Importations of phormium tenax from New Zealand represent about £190,000 per annum. That variety of flax has been excluded from this bounty, because the Tariff Board has not considered this plant when making its investigations. In this connexion, I desire to place before the House some interesting facts relating to phormium tenax. In the neighbourhood of Sale, an attempt is being made to produce this plant, which is quite unlike linum usitatissimum because, instead of having to be sown and cultivated with an interval of a number of years between crops, phormium tenax is actually planted, by the root, and is of a permanent nature. Some years must elapse before it can be harvested, but when that time arrives, its yield, on suitable land, is very high. In my opinion, phormium tenax has a better chance of success than has the variety which is to benefit from the bounty proposed in this bill. I desire to read an extract from the Gippsland Mercury, dated the 13th May, 1930, regarding this matter -

On Friday afternoon, an interesting ceremony took place on the morass land which lies between the Glengarry and Thomson rivers, when the first roots of phormium tenax or New Zealand flax were planted. . . . The work of ploughing 200 acres has been proceeding for some time. The promoters have visions of a flourishing flax industry being established in Sale as the land secured is entirely suitable for the cultivation of New Zealand flax.

I point out that although phormium tenax, from a strict botanical point of view, may not be a flax, it is generally spoken of as flax, as this newspaper indicates. The article continues -

At the invitation of the company a number of public mcn were present at the function. Phormium tenax is said to be the most wonderful fibre plant in the world, and to yield more fibre from ti. given area than any other fibre plant known. The successful establishment of such an industry in the locality will give employment to a large number of persons, and this will also be a further step in the advancement of this district.

The following is a short extract from a New Zealand newspaper dealing with the same variety of flax: -

Quietly and without any fanfare of publicity trumpets, there is going on at Gordonton, near Hamilton, an enterprise that promises to make history in the New Zealand hemp industry. Less than three years ago, a company, called Australian and New Zealand Investments Limited, was formed for the purpose of interesting the investing public of New Zealand and Australia ‘in the scientific treatment of New Zealand flax, with selection of varieties and cultivation as the basis of providing the raw material for production of the hemp fibre in place of the usual method of depending on the mixed varieties of the plant on wild or uncultivated areas. The promoters found the New Zealand public somewhat apathetic to their proposals, but were able’ to interest several well-known and substantial business men in Sydney, with the result that “ Auzie “ came into existence and was registered in New South Wales with a modest capital of £20,000. To finance the area of land on which options were secured, a bond system under the name of “ Hempland “ bonds was devised, and has been most successful. To date over £170,000 has been subscribed in Australia and New Zealand, so that rapid and, to the uninitiated visitor, startling progress has been made in the company’s plantation at Gordonton and Kaingaroa North. The company has in hand 4,400 acres, ‘of which 1,600 have already been permanently planted - 800 acres at Kaingaroa and 800 acres at Gordonton - with high-grade plants produced from its own nursery of 52 acres, said by experts to be the most up-to-date, comprehensive and successful flax nursery in New Zealand, and a real object lesson to every visitor to Gordonton

The growers are endeavouring to do at Sale what has been done in New Zealand. Mr. W. Petrie, New Zealand Government, chief hemp grader, says -

It is generally accepted that the hemp industry is second to none in the dominion. Flax millers and growers now realize that flax-growing will, if properly cared for, bc highly profitable. The best thing about flax cultivation is that there will never he any danger of a glut in the market. New Zealand hem], makes the best binder twine in the world, and overseas markets will eagerly snap up every pound we can produce.

It will be noticed that Mr. Petrie regards flax and hemp as being practically the same thing. He continues -

We arc at present unable to supply big orders, simply because we do not produce sufficient. When one remembers the market for Phormium and its popularity, when properly milled, and our present output of only 20,000 tons, it will be readily understood that our total production is only a flea-bite on the world’s markets for hard fibres, which is, including Phormium, approximately 400,000 tons. Then again our fibre may bc manufactured into soft materials for which some other fibres are not suitable. There is good reason to think that under proper methods of cultivation it would produce an annual value of milled product per .acre of flax - a figure so high as to be almost incredible had not the statistical data been carefully examined. At the present time, the industry supports one family to every 35 acres of milled (lax. The world’s consumption of hard fibres during 1U2U was 408,000 tons, and of soft fibres,” 2,220.000 tons, jute comprising 1,500,000 tons. Only 58,000 tons of hard fibres was produced in the British Empire. The only country exporting Phormium fibre is New Zealand. Up to the present, that country is only ah;o to spare about 0,000 tons for export to the United States of America, where “lie firm, the International Harvester Company, states that if supplies were available it could absorb 50,000 tons annually alone.

Another extract reads -

According to customs returns, on an average for twelve years, until 30th June, 1029, 5,950 Urns of Phormium fibre (including tow) valued at £189,823 have been imported into tlie Commonwealth annually - more both in tonnage and value than all other hemps combined. As an example of its many uses, one northern newspaper company alone, it is stated, consumes approximately £5,000 worth of Phormium lashings and twine annually for tying its newspapers into bundles for distribution. Other newspaper offices throughout the Commonwealth use very little else for the same purpose. f have tried to interest the House in this now venture of the cultivation of phormium tenax, which is being tried out in Gippsland, but which, unfortunately, does not come within the scope of this bill.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– Is the honorable member asking for a bounty on that variety of flax?

Mr PATERSON:

– In view of the fact that the Assistant Minister announced, in the press some months ago, at least as far back as Easter, that a bounty was to be paid on flax, these growers, who have since then planted some 200 acres, would naturally think that they would be included in the bounty. This variety is described in the district as flax, and the growers will feel that some discrimination has been shown if one variety is included and another excluded.

Mr Price:

– Is the honorable member supporting this bounty?

Mr PATERSON:

– I am. This company which has been floated in the Sale district is in existence, and is not in the chrysalis stage like a projected sewing machine company of which we have heard so much during the last week or two. I hope that the Assistant Minister, if he decides that the absence of a Tariff

Board inquiry is an insuperable obstacle in the way of including phormium ten,ax in this bill, will take an early opportunity of asking the Tariff Board to consider the claims of this variety for inclusion in the bill along with linum usitatissimum. I propose to support the bill, because, in the first place, we import some £400,000 worth of linseed and £112,000 worth of linseed oil. In respect of those two products we might reasonably expect to compete with importations. The honorable member for Darwin (Mr. Bell), when speaking in support of the hill, said that the Development and Migration Commission had recommended this industry as one which might be very valuable to the State of Tasmania. Then again, I have already informed the House that about £190,000 worth of phormium tenax is imported into this country for tlie manufacture of binder twines and cordage, and if the Minister should be able, either now or at a later date, to include that variety in this bill, it would give encouragement to an enterprise which, if successful, will render such importations unnecessary. I support the bill because I think that a bounty of 15 per cent., 10 per cent., and 7^ per cent, of the market value is a safe and moderate stimulus to the production of linum usitatissimum, and should not artificially force the growth of that industry under the hot-house conditions applying to certain other industries for which the bounty or tariff protection is unduly high. If this industry expands with this moderate assistance, it will be something worth while, because it should then be able to stand on its own feet, and not require high tariff assistance.

Mr NAIRN:
Perth

.- The views of honorable members On the subject of bounties seem to be in ratio to the benefits which their electorates are likely to derive from such bounties. The honorable member for Corio (Mr. Lewis) conveyed that idea when, in support of a bounty being paid to an industry in his electorate, he put forward an argument which, .at any rate, had the merit of novelty. He said that the fact that certain honorable members were active in supporting the bounty was the highest ground for granting it. Those of us who have no electorate interests in the proposed bounty, and are, therefore, free to express an unbiased opinion, prefer to consider this proposal on its merits, having due regard to the prospects of the industry. The honorable member for Gippsland (Mr. Paterson) fell somewhat into the same category as the honorable member for Corio. I was surprised to hear his advocacy of the proposed bounty. I know the difficulties of this industry, and that it is argued that if the growers receive a bounty of £5 a ton for their crop, they will be able to carry on the industry successfully. Yet the honorable member was associated with a Government that at one time paid a bounty of £5 per ton for One year and £6 a ton for the next four years to this industry.

Mr Paterson:

– That happened long before my day.

Mr NAIRN:

– The honorable member belongs to the party whichwas responsible for that bounty. At that time 63 tons of fibre and 250 tons of seeds were produced. Of course, we cannot forget those 200 acres of Gippsland morass. But there is the financial aspect to beconsidered. I am pleased that the Prime Minister and Treasurer (Mr. Scullin) is with us again, and looking better than he has looked, perhaps, for some months. He looks just like a gentleman who has returned from a highly satisfactory visit to his “ Uncle “. The Prime Minister has warned this House lately of the serious financial position of this country, and of the need for the greatest care and courage on the part of the Government. He has told us that he has to bridge a gap of £14,000,000. I wish that he would show the courage which a gentleman occupying his position should show, by bridging this gap of £14,000,000, not by spending money on bounties, but by exercising economies.

Mr SPEAKER (Hon Norman Makin:
HINDMARSH, SOUTH AUSTRALIA

– The honorable member’s remarks would be quite permissible on the budget debate, but not at this stage.

Mr NAIRN:

-I bow to your ruling, sir. But we should apply economy to the system of bounties. We shouldrefuse to grant bounties while this country is in its present financial position.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

.- I congratulate the Assistant Minister (Mr. Forde) upon the introduction of this measure, which provides for the payment of a bounty on the production of flax in Australia. I am pleased that the Government has thus lived up to a promise that it made on the eve of the last election; unlike its predecessor in office, which had the distinction of making wild and extravagant promises on the eve of an election, and conveniently forgetting them later. This Government is determined to carry out its election promises to assist both our primary and secondary industries. Honorable members know that a number of tariff schedules have been introduced with the object of building up our tariff wall, and thus ensuring the sound establishment of our secondary industries. But, while the party to which I belong stands for. the adequate protection of our secondary industries, it is not unmindful of thewelfare of those of our primary industries that have already been established, or of the necessity for establishing new primary industries, many of which clamoured vainly for assistance from the previous Government. This Government proved its bona fides in the matter of primary production by the introduction of the Wheat Marketing Bill, and other measures designed to assist the primary producer and to increase primary production. I regret that the former administration failed lamentably to assist many important primary industries. Its failure was the more remarkable in that it was a composite administration, many of its members allegedly being representative of country interests, with sympathy for the man on the land and a desire to extend primary industries.

I welcome this proposal. But action should not cease with the payment of a bounty on the production of flax and linseed. The Government should see that the money is wisely expended, and that those who participate in the distribution of it proceed along sound and correct lines. I know that there have been quite a number of failures in the flax industry. After my return from overseas at the termination of the war, I lost a few pounds in a venture in which I risked my money ; but that experience has not caused me to take a doleful view of the flax industry. I am more confident that this measure will result in the industry being firmly established. In addition to making the bounty available, the Government should take steps to obtain the advice of some person who is thoroughly experienced in the cultivation of flax, and also the manufacture of the fibre into different commodities. The Assistant Minister suggested that the State Departments of Agriculture might do something in the way of advising and helping the growers ; but I feel that a responsibility in that particular direction rests on the Commonwealth Government, and that it would be well advised to secure from Belfast, or elsewhere, an expert in the flax industry, from the growing to the manufacturing stage. I regret that the report of the Tariff Board has remained hidden for the best part of two years, and that the Government which was responsible for the reference of the matter to the board took no action upon its recommendation. I cannot be accused of advancing the interests of my electorate by my advocacy of this proposal. I approach the matter from a purely Australian point of view. This is an industry which should be encouraged, so that it will become thoroughly established. As honorable members know, it is the oldest industry in the world. Solomon’s raiment was made of linen. Early last century, a large area was growing flax in Australia. The efforts of our early Governors were not, however, carried- on by their successors and on account of the indifference of various governments in recent years the industry has not been given the encouragement it deserved. Some honorable members have adopted a doubtful attitude towards the measure, imagining that the industry is not one that should be encouraged. The honorable member for Henty (Mr. Gullett) referred to the abominable process of retting, and argued that this is not a white man’s industry. The growing of flax is engaged in extensively in Ireland, and so far as I know, only white labour is employed. The conditions in Australia are much more favorable than they are in Ireland for the cultivation of flax. We have beautiful sunshine, which can be utilized instead of smoke fires for the drying of the fibre. The honorable member for Henty likened this proposal to the bounty that it is intended to pay on the manufacture of sewing machines, and described both measures as “ wretched little things “. He, apparently, is concerned only with the wine bounty, which, in one year, involved the taxpayers of Australia in an expenditure of over £400,000. It would seem that he is not prepared to assist small, struggling industries. The honorable member for Moreton (Mr. Francis), who adopted a most unsympathetic attitude, should be the last member of this House to oppose a proposal that will assist struggling farmers and necessitous States. It is well known that Tasmania is labouring under great difficulties at the present time. This is a more practical way of helping that State than the payment of hundreds of thousands of pounds by way of doles. The honorable member for Henty claimed that this assistance would add to the costs of a dozen or more manufacturing industries that are not profitable to-day. That -is rather an exaggerated statement in general terms, and it will not stand analysis.

The honorable member for Moreton suggested that the bill should be withdrawn, or that the bounty should be paid, only on the production of linseed. No one who has any acquaintance with the flax industry will suggest that we should grow flax only for. the linseed that is obtained. The fibre has a distinct value. A country like Australia, that imports millions of pounds worth of linen, canvas, duck, and other products, cannot afford to allow the fibre to remain untreated. Flax may be described as a poor man’s crop. There is no need to have rich soil, or to use fertilizers. I have travelled many hundreds of miles in Tasmania, and can say that there is a striking similarity between that State and those parts of Ireland in which flax is being cultivated. The production of fibre and linseed will help to arrest the flow of imports. There is no justification for the importation annually of £500,000 worth of linseed for the production of linseed oil. The sole idea of those who are interested in the flax industry in Australia appears to be the manufacture of canvas and cordage. 1 am confident that, when the industry is established, we shall be in a position to manufacture our requirements of not only canvas and Cordage but also fine linen. We produce line wools, cotton, high-quality wheats, and many other primary products, and there is no reason why we should not produce good flax. We have country that is admirably suited for its growth. Only by encouraging the industry in its early stages shall we place ourselves in a position to manufacture linen, of which, at the present time, we do not manufacture sufficient to make a pocket handkerchief. A country that has made such rapid strides as Australia in its textile industry cannot be satisfiedwith the unsatisfactory position that we occupy in regard to flax manufactures at the present time. If we are to make ourselves self-contained and self-reliant, we must interest ourselves in the production of flax, as we have done with cotton and other products. It is true that very little flax is grown at the present time; but the prospects warrant the assumption that in its production we can eclipse the experience that we have had in regard to cotton. In 1919, the area under cotton was only 72 acres, but five years later it had increased to 50,186 acres. What is possible with cotton is possible also with flax. Several honorable members have referred to the handicaps associated with retting. From my knowledge of the industry, I apprehend no difficulty in that respect. Nor do I share the view that other honorable members have expressed, that the industry cannot be properly established on account of the costs that are involved. An Australian was responsible for the invention of the combined harvester. Who will say that we have not the brains and the genius so to improve existing machinery that we can reduce the costs of flax manufacture? The interests of the growers are to be amply protected, and provision is made for the payment of fair and reasonable rates of wages to the labour employed.

Taken by and large, this is a satisfactory measure, and one that will do a great deal to advance our primary and secondary industries. I trust that it will become law, and thus enable us to give to this industry the encouragement that it deserves.

Mr.GREGORY (Swan) [9.30].- It is very interesting to hear from the honorable member for Cook (Mr. C. Riley) that he and the honorable members with whom he is associated are anxious to support primary production; but he shouldtell us why they have, in the past, been so anxious to destroy other great primary industries in Australia, which have produced so much wealth for Australia. The wool, wheat, gold-mining, and other industries are suffering to-day as a result of the policy of this and previous administrations which, by imposing excessive customs duties, have retarded their development. By this means the costs of production have been increased to such an extentthat it is exceedingly difficult for primary producers to profitably dispose of their products in the markets of the world. Notwithstanding their close adherence to that policy, we now have this striking exception. Although a measure was passed this afternoon providing for increased rates on mail matter, which will place a further burden on the primary producers, we are now asked to support this proposal, involving the unnecessary expenditure of thousands of pounds. In view of our present financial difficulties, we should show some desire to meet our financial obligations. The honorable member for Cook gave some figures with respect to the area under cotton in certain years, but he did not give us all the facts. He said that the cotton industry in Australia had developed to such an extent that, although there were only 72 acres under cotton in 1919, the area had increased to 50,186 acres in 1924. Why did not the honorable member give us the area under crop in the succeeding years?

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– I had not those figures before me.

Mr GREGORY:

– In 1925 the area under cotton had decreased to 40,000 acres, and in 1926 to 18,743, or a decrease of over 20,000 acres in one year. The honorable member supplied only the figures which suited his argument, as did the Minister for Trade and Customs (Mr. Fenton), when I asked him the quantity and value of reapers and binders exported to New Zealand. The Minister gave the value, but not the quantity, because I suppose the quantity was unfavorable from his view-point. According to the Commonwealth Y ear-Book, the figures for the area under cotton in 1927 and 1928 were not available, but there had been a decrease from 50,186 in 1924 to 18,743 in 1926. If this measure were to provide for the payment of a bounty on linseed oil produced from flax, there might be some justification for supporting it. It would be interesting to know who is asking for a bounty on flax. If this proposal has any merit, the agricultural departments in the various States should know something concerning its possibilities. The variety of flax on which it is proposed to pay a bounty differs from the New Zealand product, which is grown principally for the production of flax, and I think, is a more profitable project.

Mr Gabb:

– Is a bounty paid in New Zealand?

Mr GREGORY:

– I do not know. Although better crops should be produced in New Zealand than in Australia, the area under crop there has been reduced, and farmers are now planting larger areas under wheat, according to the figures available. Although there are probably only three honorable members in this chamber who have seen flax growing, and very few know anything about it, we are asked to determine whether the industry can be profitably conducted in Australia.

Mr C RILEY:
COOK, NEW SOUTH WALES · ALP; FLP from 1931

– Does the honorable member suggest that a committee should be appointed to inquire into the possibilities of the industry?

Mr GREGORY:

– A recommendation should have been made to this Government by the State Agricultural Departments. Recently I heard a specialist say that the industry could not be effectively developed by the payment of a bounty. He also said that the State Agricultural Departments should arrange for blocks of 3,000 or 4,000 acres to be properly fallowed, and experimental work carried out at the expense of the State Governments, with the assistance of the Commonwealth Government, to see whether flax could be profitably grown in Australia. Practically all the information that we have, apart from that supplied by the Tariff Board, has been given by representatives of Tasmania and of Victoria. Specialists acquainted with the work of flax production, the quality of the soil required, and the probable value to be obtained, should be employed to conduct a thorough investigation into the industry. It is unreasonable to impose additional taxation upon the people and then to submit proposals of this kind providing for the payment of bounties.

Mr Lewis:

– The growers are supporting the proposal.

Mr GREGORY:

– -Only a few are actually engaged in the production of flax, as is shown by the Tariff Board’s report. Although the Commonwealth Government once provided for the payment of bounties amounting to £13,000 annually when the opportunities were as good as they are to-day, only £2,361 was paid in a period of ten years. The Commonwealth should arrange with the State Governments to set aside certain areas for experimental plots to see if the industry can be profitably established. If the reports were satisfactory, the Commonwealth could then provide perhaps £2,000 for two or three years to determine the extent to which the industry could develop. Under the present system of paying bounties, proposals of this kind are brought forward only by those who have an axe to grind. It is amazing to ask Parliament to provide money in this way in the absence of expert advice.

Mr Riordan:

– Is the honorable member opposed to the payment of a bounty?

Mr GREGORY:

– Yes; because the Government cannot afford the money, and because expert advice has not been obtained. I am opposed to the taxation of the people for the purpose of securing political favour for certain persons. A study of governmental expenditure for the last ten years shows that no serious attempt has been made to reduce our commitments. The Council for Scientific and Industrial Research, which has now been established for some time, could easily place the services of some of its highly-trained officers at the disposal of the Government to report on the possibilities of this industry. The officers of that department, who .have conducted numerous investigations, and submitted reports of great value to primary producers, could have made recommendations which would be of greater value than those of the Tariff Board. Possibly, some financial assistance could be given to the State Governments to enable their Departments of Agriculture to provide experimental plots on which an exhaustive examination concerning the possibility of this industry could be undertaken. Such recommendations would be of more value than those which the House is asked to accept.

Mr MCNEILL:
Wannon

.- The honorable member for Swan (Mr. Gregory) suggests that the Commonwealth should make available to the States a small amount to enable the State Departments of Agriculture to undertake certain experimental work in connexion with the production of flax. During the last two years, at any rate, flax has been successfully produced at Colac in the Western District of Victoria, where a sample of flax straw, equal to any produced in the southern hemisphere, has been grown.

Mr Gregory:

– On what area?

Mr McNEILL:

– On only a few acres, but in sufficient quantities to induce those engaged in the industry to erect a factory. Flax production is also being extended, as I understand factories are being established ‘ at Port Fairy, Koroit, and Warrnambool. The information I have received is that the land in that locality is too valuable for the production of flax ; but nevertheless the industry has great possibilities in Australia, particularly at the present juncture when low prices are being obtained for wheat and wool. Flax production, I believe, is going to be one of our valuable industries, and this or any other government would be justified in giving it financial assistance in its initial stages. Tasmania has an abundant rainfall, and suitable soil for growing flax. It is not a wheat-producing State, and its secondary industries are hampered by the isolation of the island. There is much light, scrubby land which could be utilized for the production of flax, thereby producing much wealth for Tasmania and for the Commonwealth. I am of opinion that we have reached a stage in our development when we must get back to the. land. Unfortunately, Australia is a land-locked country. There are thousands of young men in Australia - many of them the sons of farmers - with a knowledge of stock and of farming, who are denied the right to get on land of their own. There are also hundreds of thousands of men living in squalid surroundings in the city who would be better off out in the country making a decent living for themselves and their families. Flax production is a part of mixed farming, and it should be an important part. I remind the honorable member for Swan (Mr. Gregory) that there’ is in Western Australia a large area stretching from Albany to the Midland Junction in which the rainfall is good, and the soil suitable for growing flax, which it would be better used than left to the growth of bracken and other useless vegetation. The majority of honorable members opposite complained about the Government offering assistance to those who are trying to make flax production successful, but they should bear in mind that it is often necessary to assist even primary industries during their initial stages. This industry, I believe, will be a very important one to the Commonwealth within the next few years.

Mr FORDE:
Assistant Minister · Capricornia · ALP

– After listening to the speeches of honorable members, I am more satisfied than ever that the Government is doing the right thing in having this bill passed in order to give the flax industry a reasonable chance of success. Too many people are postponing the establishment of new enterprises and new industries, hoping for better times, but there is no time like the present for the encouragement of an industry like this, which will provide employment for a large number of farmers, and of workmen in the field and in the factory. The honorable member for Gippsland (Mr. Paterson) suggested that the scope of the bill should be widened to include phormium tenax which was recently planted and is being grown around Sale, in Victoria. While I am very sympathetic towards this request, I remind’ him that it is necessary to refer his application to the Tariff Board, whose favorable report would be necessary before a bounty could be paid. Linum usitatissimum, the variety of flax on which this bounty is to be paid, is something quite different from phormium tenax, which is confined almost exclusively to New Zealand, where it is indigenous. As the rate of wages and costs of production are about the same in Australia as in New Zealand, and New Zealand dressed flax is exported, from that country at a profit without the assistance of a bounty, it is only reasonable to assume that the phormium tenax grown at Sale for fibre only can also be produced at a profit without a bounty. This is borne out by the prospectus of the company known as Flax Growers and Millers Limited, which is responsible for the Sale enterprise. The prospectus was issued on the 23rd April, 1929, -.eleven months before the Commonwealth Government announced its intention of bringing down legislation providing for the payment of a bounty on flax. It contains a glowing account of the future before the flax industry, and makes no mention, whatever of the need for a bounty. It invites the public to buy £30. bonds, the return on which, it says, will rise steadily from 9 per cent, in the third year to as high as 58 per cent, per annum in the ninth year, at which figure it is expected to be stabilized. Representations have been made by the honorable member for Gippsland (Mr. Paterson), who is keenly desirous that the bounty should be extended to phormium tenax. In compliance with his request, the matter has been referred to the Tariff Board for investigation and report; but provision for it cannot be included in this bill. Section 15, sub-section 1 e of the Tariff Board Act states that the Minister shall refer to the Board for inquiry and report applications for a bounty for the encouragement of any primary or secondary industry in Australia, and shall not take action in respect of such matters until a report has been received from the board. I have no intention of evading the requirements of the act in this respect, and therefore I have referred the request of the interests concerned to the board for investigation.

We have in Australia a ready market for 23,000 tons of linseed per annum, the value of which is £500,000. It would be necessary to cultivate 150,000 acres each year to produce this flax, which would be processed in Australia for the manufacture of linseed, linseed oil, oil cake, &c. Flax-growing is best carried on as a three-yearly rotation crop. Land in Tasmania and Victoria now used for potato-growing would be suitable for the production of flax, which could be grown in rotation with the potatoes. It will be seen, therefore, that it would be necessary to have 450,000 acres of land under cultivation to produce flax each year on 150,000 acres. The Deputy Leader of the Opposition (Mr. Gullett) criticized the departure from the Tariff Board’s recommendation of minimum quantities. I point out that there are no minimum quantities provided for in the Wine Bounty Act, and in the Seed Cotton Bounty Act. In this case there is a very good reason for the departure from the Tariff Board’s recommendation. The board’s first recommendation laid down impossible and inconsistent minimum quantities. The quantities specified were £20,000 worth of fibre, and £70,000 worth of linseed, equivalent to 280 tons. of fibre, and 4,680 tons of linseed. If these conditions were enforced they would prevent the industry from getting a start. They were inconsistent, too, because the Tariff Board overlooked the all-important fact that a given quantity of flax plant produces almost an exactly equal amount of fibre and linseed. Therefore, any minimum quantity should be the same for each product of the plant. In fact, the Tariff Board, in a later report, dated 18th January, 1929, reduced the minimum quantities to 250 tons of fibre and 4,000 tons of linseed. Moreover, the Government first ascertained that the approximate production of 1930 will be 400 tons of fibre, and 380 tons of linseed. Hence the minimum specified by the Tariff Board for fibre, namely, 250 tons, is already being produced. The Deputy Leader of the Opposition said that waterretting of flax was done only by low-class labour, and was confined to Russia.

Mr Gullett:

– I said that the bulk of it was done in Russia. I know that some is still done in Northern Ireland and in Belgium.

Mr FORDE:

– As a matter of fact, it is being abandoned both in Ireland and in Belgium. Most of the Australian flax will be either chemically retted, or decorticated by mechanical means. Both these methods have been recently developed, and are much less costly and more effective than the older methods of bogretting and dew-retting. The bog and dew retting methods previously employed in Victoria were chiefly responsible for the failure of the flax industry there. I am convinced that this industry is on the eve of a new era of prosperity. I convened a conference in Melbourne a couple of months ago, at which all the flax interests in Australia were represented. The Victorian Minister of Agriculture and his experts were present, and we discussed the possibility of the bounty being of lasting benefit to the Commonwealth. I am satisfied that this measure will have most beneficial results.

Mr Latham:

– Naturally, they were all in favour of being paid money.

Mr FORDE:

– The members of that conference, some of whom were growers, have the interests of the flax industry at heart. The Government desires to protect the growers in that industry just as we protect other primary producers. The cultivation of flax for linseed only has been found to be uneconomical.

Mr Gullett:

– Millions of acres are grown for that purpose in North America.

Mr FORDE:

– That aspect of the industry has been investigated by experts, and it has been found that the dual purpose plant is most suitable for Australia. We import annually, 23,000 tons of linseed, and hundreds of thousands of pounds worth of fibre and products manufactured from fibre. There is no reason why these goods should not be manufactured in Australia. One company intends to establish a mill for the purpose of manufacturing canvas and duck.

Mr Maxwell:

– If the industry has such a bright future, what is the need for a bounty?

Mr FORDE:

– During the initial stage, while the mechanical and chemical process of retting is being tried out, it is necessary to give some stimulus to the industry. This period will not be longer than five years. I hope that the bill will be passed, because I predict a great future for the industry. This measure is in keeping with the definite pledges given by the Labour party to take every opportunity to establish new industries, and to develop both the primary and secondary branches of those industries, among which flax-growing and manufacture willplay an important part.

Question - That the bill be now read a second time - put. The House divided. (Speaker - Hon. Norman Makin.)

AYES: 30

NOES: 10

Majority . . . . 20

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 4 agreed to.

Clause 5 (Limit of annual amount of bounties).

Mr GREGORY:
Swan

.- A number of honorable members opposite have expressed a desire that the recommendations of the Tariff Board, with regard to this industry, should becarried out; but it appears that these are not being adopted in their entirety. The board recommends that the minimum total value of fibre to be produced in Australia before the bounty becomes payable should be £20,000.

Mr FORDE:
Assistant Minister · Capricornia · ALP

.- I explained, in my reply to the second-reading debate, that it took practically the same quantity of flax to produce a given quantity of fibre or linseed, but the Tariff Board recommended conditions which would have obliged the flax-growers to produce considerably more linseed than fibre. It was because of this inconsistency that the recommendations of the board were not accepted.

Clause agreed to.

Clauses 6 to11 agreed to.

Clause 12-

If, after inquiry and report by the Tariff Board, the Minister is ofopinion that flax or linseed on which bounty litis been paid is not being sold by the person who received the bounty at a reasonable price having regard to the coats of production and charges incidental to selling and delivery, and to the fact thatbounty on the flux or linseed is provided by this act, the Minister may withhold payment of any further bounty claimed by that person or as much thereof as he thinks lit or may require that person to refund the amount of bounty so paid which shall thereupon become adebt due and payable by that person to the Commonwealth.

Mr FORDE:
Assistant Minister · Capricornia · ALP

. -I move -

That the words “ which bounty has been paid is not being sold by the person who received the bounty “ be omitted with a view to insert in lieu thereof the words “ the production of which bounty has been paid to any person, is not being sold “.

This is one of a series of amendments to this clause the object of which is to bring the wording of it into accordance with the requirements of the Constitution, which provides that bounties shall be paid on the production of goods, and to make it. uniform with similar clauses in other bounty measures.

Amendment agreed to.

Amendments (by Mr. Forde) agreed to -

That the words “ charges incidental to selling and delivery “ be omitted with a view to insert in lieu thereof the word “ sale “.

That utter the word “the”, second occurring, the words “ production of “ be inserted.

Clause, as amended, agreed to.

Clause 13- (I.) Where bounty has been paid under this net to any person on the production of flax or linseed, and the net profits derived by that person from such production, together with the bounty so paid exceed, in the year in respect of which the bounty was paid, fifteen per centumof the capital employed in such production, the Minister may, after inquiry and report by the Tariff Board -

  1. withhold such further bounty claimed by that person as is equivalent to the amount of the bounty paid in respect of the year in which the profits were derived, or where those profits, without taking into account the bounty so paid, are less than fifteen pur centum of such capital, such further bounty as is equivalent to the amount by which those profits together with the bounty so paid exceed fifteen per centum of such capital; or
  2. require that person to refund an amount equivalent to the amount which may be withheld under the last preceding paragraph, and that amount shall thereupon become a debt due and payable by that person to the Commonwealth. (2.)For the purposes of this section, the Minister may determine what amount of capital is employed by any person in the production of flax or linseed and what amount of net profits is derivedby that person from such production.
Mr FORDE:
Assistant Minister · Capricornia · ALP

.- I move-

That the words “such production,” subclause1,. be omitted with a view to insert in lieu thereof the words “the production and sale of that flax or linseed “.

This amendment is being made to bring the clause into uniformity in this respect with clause 12. It will ensure that profits are calculated on “ costs of production and sale “ in both cases. The words have been suggested by the draughtsman asan improvement on the original wording of the clause.

Amendment agreed to.

Mr GULLETT:
Henty

.- I move -

That the word “ fifteen “, first occurring, be omitted with a view to insert in lieu thereof the word “ ten “.

It is usual to provide in bounty bills that the Minister may withhold bounty if more than 10 per cent. profit is being made on the capital invested.I do not know why 15 per cent. was specified in this clause, butIhopethatthe Minister will accept my amendment so that all our legislation of thischaracter maybe as uniform as possible.

Mr FORDE:
Assistant Minister · Capricornia · ALP

– Fifteen per cent. was specified in the clause because the companies concerned gave an assurance that they would use their profits largely for the improvement of their plant; but I am quite prepared to accept the amendment.

Amendment agreed to.

Mr FORDE:
Assistant Minister · Capricornia · ALP

– I move -

That after the word” is “, sub-clause 2, the words “ or has been “ be inserted.

The inclusion of these words will enable the Minister to determine “ capital “ on the profits earned in any past period. It is essential that this provision shall be made. A similar amendment was made in the Sewing Machine Bounty Bill. Obviously, it would not be sufficient to determine the capital except in relation to past periods in which profits were earned.

Mr.Gullett. - It is essential that the interests of the taxpayers shall be safeguarded, and that an old-established company which engages in this industry shall not be able to reckon in past losses, and so obtain a good deal morebounty than it would otherwise be entitled to receive.

Amendment agreed to.

Clause also consequentially amended and, as amended, agreed to.

Clauses 14 to 18 agreed to.

Preamble and title agreed to.

Bill reported with amendments; report - by leave - adopted.

Bill - by leave - read a third time.

House adjourned at 10.20 p.m.

Cite as: Australia, House of Representatives, Debates, 21 July 1930, viewed 22 October 2017, <http://historichansard.net/hofreps/1930/19300721_reps_12_126/>.

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