House of Representatives
16 October 1931

12th Parliament · 1st Session



Mr. Deputy Speaker (Mr. McGrath) took the chair at 10.30 a.m., and read prayers.

page 797

QUESTION

GOVERNMENT SAVINGS BANK OF NEW SOUTH WALES

Mr SCULLIN:
Prime Minister · Yarra · ALP

by leave - The distress caused to the depositors in the Government Savings Bank of New SouthWales has given Commonwealth Ministers very great concern during the past few months. More than one million depositors were affected by the closing of the bank at a time when it was vital to their needs that its machinery should be kept in motion. Unfortunately for the credit of Australia and the financial position of many people, the bank closed, inflicting severe hardship on its depositors. Many whowere dependent upon their savings for sustenance were suddenly deprived of access to their money, and wereleft in a pitiable plight. In addition to the personal loss to many thousands of depositors the closing of the bank inflicted a severe economic blow on New South Wales and the whole of Australia. It was disastrous to have millions of pounds, representing the thrift of the people, locked up in the bank. Industry suffered by the restriction of the purchasing power of the depositors,and, what was more serious, confidence in banking institutions generally was shaken. Since the bank closed there has been no change for the better so far as the old depositors are concerned, and while the present position continues, the finances of the whole Commonwealth must be disturbed. The New South Wales Government SavingsBank is a State institution with a State guarantee, but the repercussions of its closing were felt all over the Commonwealth.

Many statements have been made by which the impression is being created that, if the Commonwealth Government so desired, it could propose legislation to meet the position. I shall indicate how, in the opinion of this Government the very serious situation could he met. To enable honorable members to appreciate the situation it is necessary to survey the circumstances surrounding the closing of the bank. Unless we see the matter in true perspective we shall not arrive at an intelligent decision as to the proper solution of this vexed problem.

For some months prior to the final crisis there bad been steady withdrawals from the Government Savings Bank of New South Wales; but when the State Premier announced his. refusal to pay interest overseas, and actually failed to meet some of the interest payments due by his Government to the State Savings Bank, the depositors were filled with panic, and withdrawals increased to an alarming extent. From the end of March until the 23rd April, a period of three weeks, the withdrawals amounted to over £4,000,000.

Towards the end of March the chairman of the Savings Bank Commission (Mr. Hall) asked the Commonwealth Bank for assistance. The Commonwealth Bank agreed to provide cash against fixed deposits which the State Savings Bank had with the Commonwealth and trading banks. The amount thus provided was, approximately, £3,000,000.

The withdrawals from the State Savings Bunk continued, and, early in April, thu commissioners published in the newspapers full-page advertisements pointing out, that thu bank was guaranteed by the State Government. That, however, had do good effect, and the bank closed on the 23rd April.

Two days previously the Premier of New South Wales had written to the Governor of the Commonwealth Bank asking him to arrange for the taking over of the Government Savings Bank of New South Wales. The Commonwealth Bank Board replied on the same day, agreeing to consider the proposal. The savings bank remained open for only one day after the Premier approached the Commonwea1th Bank. There was thus do time for the Commonwealth Bank to examine the position, or for even the briefest negotiation to be undertaken before the State institution closed. The Commonwealth Bank, nevertheless, offered assistance to necessitous depositors, pending an examination of the affairs of the bank, prior to amalgamation. Certain legislation had to be passed by tho New South Wales Government to enable payments to be made to necessitous depositors. That legislation was passed on the 29th April, and five days later, on the 4th May, the Commonwealth Bank began making payments to those in need. The cash provided for this purpose amounted to £1,250,000, and was in addition to the £3,000,000 previously advanced. The suggested terms of amalgamation were subsequently submitted to the State Government on the 28th May. On the 15th June the Premier replied, submitting certain objections to -the proposed agreement.

At the Premiers Conference in Melbourne, Mr. Lang spoke to me regarding the bank, and later I suggested that the conference should appoint a committee, consisting of the Prime Minister, the Premier of Now South Wales, and the Premier of ‘ South Australia, to confer with the Chairman and the Governor of the Commonwealth Bank. This committee met on the 20th June. After two Hays’ discussion it was agreed that the points raised by Mr. Lang iu his letter to the Commonwealth Bank should be a matter for further negotiation between the representatives of the Commonwealth Bank and the Commissioners of the New South Wales Savings Bank. Had the proposed agreement been accepted three months ago, the old depositors could have withdrawn immediately £10, or 10 per cent, of their deposits, whichever was the greater. .1 fully believe that if the agreement had been adopted the feeling of unrest would then have gradually disappeared, and that by now confidence would have been sufficiently restored to enable the old depositors to operate freely upon their accounts.

The suggestion has been made that flip Commonwealth’s sole desire is to get possession of the State Bank. The first proposal for amalgamation came from the State Bank and the State Premier on the. 21st April, although, prior to that, assistance had been given by the Commonwealth Bank to enable the State Bank to carry on.

Speaking for this Government, I say definitely that our main desire from the beginning was to come to the rescue of the State Bank depositors ; and that is still our earnest wish.

There was no urging of the Commonwealth Bank by the Commonwealth Government to get control of the State institution. When difficulties arose, the Commonwealth Bank agreed to cash the fixed deposits of the State Savings Bank, and, later, when the closing of the State Savings Bank became imminent, it was the Premier of New South Wales who asked the Commonwealth Bank to arrange for amalgamation. At that time I conveyed’ to Sir Robert Gibson the Commonwealth Government’s wish that the depositors in the State Savings Bank should be treated as generously as possible.

In a letter dated the 15th July, addressed to the Prime Minister, Sir Robert Gibson stated -

Negotiations have been proceeding continuously between the Commonwealth Bank Board and the Commissioners of the New South Wales Savings Bank, as was agreed upon at the conference.-

The whole matter has been full nf difficulties owing, chiefly, to the Sural Bank and the Homes Department. A point has now been readied which determines the limits possible on the part of the Commonwealth Bunk Board. These would now appear to be acceptable to the Commissioners of the New South Wales Savings Bank and, I understand, the commissioners have recommended acceptance by the New South Wales Government.

It has been said that the terms of the proposed agreement were harsh. I was not in a position to judge. I did, however, arrange a conference at which the points of difference were threshed out by’ Mr. Lang, the President of the State Savings Bank Commission, and. the Chairman and .the Governor of the Commonwealth Bank. After a long discussion it was agreed that the points outstanding should be taken up by the Governor of the Commonwealth Bank and the President of the State Bank. As a result of their negotiations, a re-drafted agreement was prepared, approved by the State Bank Commissioners and, I believe, recommended to the State Government. The re-drafted agreement, however, was not accepted by the Government of New South Wales. No further representations with respect to that proposed agreement have been made to me by the Premier of New South “Wales.

Statements have been made in various quarters to the effect that the Commonwealth Bank is competing unfairly with the Government Savings Bank of New South Wales. After the latter closed its doors, the only savings bank in operation in the State of New South Wales was the Commonwealth Savings Bank. Naturally cbe business of that institution immediately increased, and many thousands of new accounts were opened. Where it was found that the demands on the post offices in a particular locality were becoming heavier than they could respond co, the Commonwealth Bank decided to open new branches, and thus relieve the strain. In all, eleven new branches of the Commonwealth Savings Bank were opened, one in the city of Sydney and ten in adjacent suburbs. It has been said that the bank is erecting palatial banking premises. I am informed that at the eleven points referred to the bank has gone into modest, leased premises, all of which have been taken on comparatively short tenures. I would also emphasize the fact that the State Savings Bank is at present offering 3^ per cent, interest to depositors, as against the 3 per cent, paid by the Commonwealth Bank. So much for the talk of unfair competition.

It must be remembered that the Commonwealth Bank has never been the banker for the New South Wales Government. No matter what government was in office, the Commonwealth Bank was denied all share in government business in New South Wales. Government accounts have been most profitable to banks, particularly when revenues were buoyant, but no share of such profits came to the Commonwealth Bank from New South Wales. Private banks secured the whole of them. Now, when there are difficulties, the Commonwealth Bank is expected to come to the rescue. Despite that, however, the Government is anxious that the Commonwealth Bank shall do everything possible to aid depositors in the State institution.

In a circular sent to honorable members the following statement is made : -

The Government Savings Bank of New South Wales holds Commonwealth Government securities totalling £30,000,000. It is certainly not too much to expect that very considerable assistance could be given by the Commonwealth Government on this security.

That statement without explanation is quite misleading” In consequence of the recent debt conversion all the converted loans became Commonwealth securities, but they are not all Commonwealth debts. As a matter of fact, only £3,800,000 of the State bank’s investments are Commonwealth Government loans. Most of the money of the Government Savings Bank was invested in State securities and deposits at the State Treasury. State loans totalled £25,000,000, and the deposits at .the Treasury £7,200,000. The Commonwealth Government securities amounted to £3,800,000. Deposits at the State Treasury were included by the bank amongst its liquid assets. When the bank got into difficulties it could not cash these so-called liquid assets. Moreover, the New South Wales Treasury withheld from the bank some of the interest due to the bank, and required the bank to capitalize that interest.

A request is made that the Commonwealth should guarantee deposits. The reason given is that the State has no power to issue notes. It is twenty-one years since the Commonwealth first legislated regarding the issue of notes. In all that time the sufficiency of the State guarantee was never questioned. The Commonwealth could not guarantee an institution entirely outside its control. Moreover, the Commonwealth constitutionally has no power to guarantee the deposits of a State Savings Bank.

A request has been made for the issue of notes against, the security of Government stock. It is impracticable for the Commonwealth to legislate so as to give the right to draw notes to a State savings bank, in the administration and management of which the Commonwealth has no say. Tho savings bank has to be put into a position where it will be encouraging people to increase their balances, and will be accumulating savings. If it were merely to be given funds to pay off a portion of the old deposits, it would cease to be a real savings bank; it, would really be an institution gradually going into liquidation. The real necessity is to put the savings bank on such a basis that depositors will have absolute faith in ite soundness, and in its ability to pay. Then depositors will not withdraw their money because of fear; they will withdraw only to meet their needs.

Had the serious position of the State Savings Bank been firmly grappled with s> few weeks before the bank closed, the business could have been taken over by the Commonwealth Bank as a going concern without the bank closing its doors, and without, financial loss to the Government or the people of New South Wales. I still believe that the position can be retrieved, and every penny secured to the depositors. That, however, can only be done by creating a feeling of trust and confidence in. the minds of depositors. In view of the events which I have just outlined, the Commonwealth Government is convinced that, the only sound way to deal with this problem is by the amalgamation of the Government Savings Bank of New South Wales with the Commonwealth Bank. I have just, received the following telegram: -

Million old depositors demand State Bank amalgamate with Commonwealth. Request your support.

Depositors’ Association.

T have already written to the Premier of New South Wales pointing out that the State Savings Bank is constituted under State law. and that its management is subject only to the State. Obviously the Commonwealth could not guarantee an institution, the management of which is entirely outside its control. In any case, the Commonwealth cannot legislate in regard to State banking, and, consequently, the guarantee by the Commonwealth of the payment of the deposits of the State Savings Bank is outside the scope of the constitutional powers of the Commonwealth.

I also conveyed to the Premier the Government’s view that the only remedy for the bank’s difficulties lies in its amalgamation with the Commonwealth Bank. The Commonwealth Treasurer has suggested to the commissioners of the State Bank the desirability of entering into negotiations with the Commonwealth Bank for amalgamation, and I have urged the State Premier to support that action.

This Government deplores the circumstances which compelled the closing of a splendid institution. It regrets thai thousands of depositors who showed their faith in the bank should now be suffering as the result of the temporary loss of their savings. Because of that unfortunate position, the Government believes that negotiations for amalgamation should be re-opened. Not only does the Government think that necessary, but it is prepared to co-operate to that end. While more than 1,000,000 depositors of the State Bank remain dispossessed of their life savings, so long will the nation suffer. How imperative it is, therefore, that the New South Wales Government should do everything possible to assist these depositors to obtain their money !

Mr LYONS:
Wilmot

.- by leave - I am glad that, the facts disclosed in the statement just read by the Prime Minister have been made public, as they justify not only the attitude of the Commonwealth Government, but also that, of many other honorable members in this chamber who have been subjected to criticism by those who are suffering from the closing of the Government Savings Bank of New South Wales. The action of the Government meets with my approval.

Mr Archdale Parkhill:

– The Government has done nothing.

Mr LYONS:

– The Prime Minister has made perfectly clear something that I have known personally, that the Government has been and still is prepared to do anything within reason to effect an amalgamation of the Commonwealth Bank and the Government Savings Bank of New South Wales. I am glad to have had such a declaration from the Government. We should all strive for such an amalgamation, lt is obvious that honor-1 able members on- this side of the chamber have no responsibility for the closing of the bank, nor for any of the suffering which that has caused. The duplication of Federal and State activities has been responsible for much unnecessary expense, particularly in connexion with the savings banks. In some States there are two savings banks, each belonging to the people, fighting each other from opposite sides of a street. When I was a member of the Government, the matter of duplication and its resultant, unnecessary expense was investigated. It was clearly seen that savings could be effected in many directions, but it was obvious that the difficulty of doing this was greatest in regard to the savings banks. For a long time I, with many others, have held that there is no justification for the continuance of the system under which the Commonwealth and State governments maintain separate and competing banking institutions.

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– The Commonwealth Government should “never ‘ have entered the arena of banking. It was a violation, of the spirit of the Constitution.

Mr LYONS:

– I shall not debate the question whether the Commonwealth or the States should control the savings banks. The action taken by the Tasmanian Government long ago in transferring its savings bank to the Commonwealth meets with the approval of the people of that State, and as to its success there is no room for argument to-day.

But while I approve of the proposals of the Commonwealth Government, and believe firmly that the responsibility for the present position rests with the Government of New South Wales, I cannot altogether absolve a number of honorable members in this chamber from responsibility in the matter. The trouble did not arise only a few weeks ago. The failure of the Government Savings Bank of New South Wales was practically certain from the moment when Mr. Lang was returned with a majority, and became Premier of that State. From that moment, confidence in the bank began to wane. The figures reveal that its deposits and resources immediately began to decline. Confidence in the institution steadily dwindled, until the crash came, and the bank had to close i rs doors. I do not hold this Government, as a government, responsible for Mr. Lang’s election ; but those who assisted to return Mr. Lang to power cannot rid themselves of responsibility ‘for what has happened. Certain members on the Government side made it their mission to have Mr. Lang made Premier of New South Wales, and one Minister, at least, asserted that that would be the first step towards bringing Australia back to prosperity and reducing unemployment. That stigma does not rest upon the Prime Minister nor the Treasurer. Neither participated in Mr. Lang’s campaign, each apparently being able to foresee what would happen if Mr. Lang were returned. But some other members of the Government toured the State of New South Wales, zealously espousing the cause of Mr. Lang. As they had known that gentleman for years they cannot be excused for what they did. The Prime Minister and the Treasurer, however, because, no doubt, of what they knew of Mr. Lang, refrained from taking part in the campaign. I, too, refused to do so, despite the pressure that was brought to bear upon me when a Minister, to support Mr. Lang.

Mr Brennan:

– The honorable member did not seem to be very conspicuous in opposition.

Mr LYONS:

– I was at least more conspicuous in opposition to Mr. Lang than was the Attorney-General (Mr. Brennan) who, safely situated on the’ other side of the world, did not either oppose or support him. I certainly did not in any way help to return to power the Government that has been responsible for the destruction of the Government. Savings Bank of New South Wales.

The election of Mr. Lang and his Government immediately lessened the confidence of the public in that bank. It- has been asserted many times that confidence is essential if Australia is to pull through its difficulties. Confidence is essential if any Business is to be successful. Under thebanking system of Australia, a temporary run on a bank can be staved off, provided that there is still confidence in the institution. The other banks, and the Commonwealth Bank particularly, through its note issue, can come to the assistance of an institution temporarily in difficulties,and help it to tide over its trouble. But when confidence has gone completely, neither the other banks, nor the nation can save the bank affected. Lack of confidence due to the conduct of the Government of New South Wales, was the whole cause of the trouble. The Commonwealth Bank has been criticized in this connexion, and the Commonwealth authorities are being held responsible for the actions of the Lang Government and of the people of New SouthWales who re turned that Government to power. The Prime Minister, however, has shown that the Commonwealth Bank has done everything possible to meet the situation.

Mr Fenton:

– There is only one real way out of the trouble.

Mr LYONS:

– Yes; and that is the amalgamation of the two banks.

Mr Archdale Parkhill:

– Does the honorable member advocate that in the caseof the Victorian Savings Bank?

Mr LYONS:

– There is no justification for retaining a system under which banks owned and maintained by the people are in opposition to each other. That is an economic waste. There isno justification for having two such banks in competition.

So far as the origin and the development of the trouble in New South Wales is concerned, I refuse to accept any responsibility for it. I hope,however, that the negotiations with the Commonwealth Bank will be continued. Like other honorable members, I sympathize with the depositors who have suffered directlyas the result of the closing of the State Savings Bank - and also with the community generally, whichhas suffered indirectly. Theonly solution of the difficulty is theamalgamation of the Commonwealth and State savings banks, and I hope that the Government will continue tonegotiate to that end. If Mr. Bang is not prepared to agree to an amalgamation, and brushes aside all offers of assistance, we, in this Parliament, cannot be held responsible for any failure which may result. The remedy is in the hands of the people of New South Wales, many ofwhom are depositors with the Government Savings Bank of that State.

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

– There should be only one savings bank for all Australia.

Mr LYONS:

– The Prime Minister has mentioned the sum which has been made available by the Commonwealth to assist the Government Savings Bank of New South Wales. That is not the first occasion on which the Commonwealth, during the term of office of the present Government, has come to the assistance of New South Wales. When I was a member of the Government, during the absence of the Prime Minister from Australia, it was proposed to float an internal loan of £27,000,000. The Premier of New South Wales then informed the Loan Council that a sum of nearly £1,000,000 was due by the Government of New South Wales to the Government Savings Bank of that State. He pointed out that in other years the bank had been able to renew these loans as they became due; but that on the present occasion, because of heavy withdrawals; the bank had no funds with which to carry on. The representative of the Commonwealth Government, together with representatives of the other State governments, thereupon agreed to assist New South Wales in this matter, and, accordingly, arrangements were made to float a loan for £28,000,000- instead of £27,000,000 as originally proposed - in order that the Government of New South Wales might borrow £1,000,000 with which to pay the Government Savings Bank of that State.

I ask honorable members to contrast the attitude of the Commonwealth Government in this matter with that of the Premier of New South Wales. When an appeal was made to the people of Australia to come to the assistance of their country by subscribing to a loan of £28,000,000, every State Premier, with the exception of Mr.Lang, did his best to make the appeal a success. Mr.Lang, however, did nothing, although his State was to receive an extra £1,000,000 in the event of the loan being successful. Never once during the campaign did Mr. Lang, or any of his Ministers, speak in support of the loan. Indeed, when I went to New South Wales in the interests of the loan, and expected Mr. Lang to join me, he had not the courtesy to acknowledge the invitation to do so, nor did he do anything to make the loan a success. His attitude to-day is in keeping with his attitude all along towards a Government which has endeavoured to help him.

Mr HUNTER:
Maranoa

.- - by leave - The Prime Minister did right in making the statement which he has made to the House this morning; but, in my opinion, such a statement should have been made some time ago. Undoubtedly the present political propaganda against the Commonwealth Bank is having its effect on the other banks as well, and on our finances generally. The Prime Minister’s statement should, therefore, be broadcast throughout Australia, so that every one may know what is being done. As the Prime Minister has said, circulars have been distributed from time to time in which it is stated that the Commonwealth Government should do certain things to help the old depositors. Some pf the statements are unfair and not wholly true. The right honorable gentleman has made it clear that the amount of Commonwealth stock held by the Savings Bank of New South Wales :is .only £3,800,000, and the Commonwealth Bank has already advanced nearly £5,0003000 to he’p tha State institution.

Mr Archdale PARKHILL:

– That was not a full statement of the case.

Mr HUNTER:

– It was a statement supplied by the Commonwealth Bank to the Prime Minister. Certainly the last balance-sheet issued by the Government Savings Bank of New South Wales does not show that the hank holds Commonwealth securities amounting to £30,000,000.

The chief reason for the .closing of the Savings Bank in New South Wales was want of confidence, the result of political interference with the “bank. The publicity .given to the .amount which had been withdrawn from the bank on ‘behalf of the State Government and also the statements of Mr. Lang regarding repudiation of interest led to a run on the bank. Had the Government of New South Wales acted as it should have done, there would have been no talk of its having continually put its hands into the coffers of the bank.

Some time ago the Commonwealth Bank took over the State Savings Bank of Queensland. There had been a slight run on the State institution; but the moment it was known that the Commonwealth contemplated stepping in, that run stopped. The securities held by the State Savings Bank were taken over by the Commonwealth Bank. Some of them were for long term loans, at low rates of interest. The real danger which threatens our banking system is political interfereence. The moment that politics enters into the control of any banking system, trouble is likely. The banking system of any country is a most delicate thing, and when a collapse occurs it may spread from bank to bank. We saw that in New South Wales. The collapse of the State Savings Bank -was largely responsible for the later collapse of the Primary Producers Bank in that State, and of the Federal Deposits Bank in Brisbane, because it made people think that if a State Government bank was not infallible it was even more possible for the smaller private banks net to be safe and sound. It was not that the people of Queensland, who had deposited money in those institutions, took it out thinking that it would be better in their pockets, but they had before them what had happened in New South Wales, and they knew that people in that State could not get hold of the money Which they had deposited with the bank. People put their money into sav.in irs ‘banks in the ‘belief tha.t when they want it -they will be able ‘to get it; but directly they begin to fear that they will not be able to get it o,n application, confidence is lost, and the banking system suffers.

One of the chief difficulties about the taking over of the New South Wales Savings Bank by the Commonwealth Bank is the demand of the State that the Rural Credits Department and the Housing Department shall also be taken over. But those departments ,are not parts of a. savings bank. In Queensland they are conducted separately from the general ‘bank, although Queensland has a department which makes both agricultural advances and advances for the building of homes. ‘ The money is obtained in the same way as in New South Wales, that is, it is part of deposits loaned by the Commonwealth Savings Bank to the departments concerned on long terms; but the business is not conducted as a part of the bank itself. If the Government of New South Wales were willing to negotiate only in respect of the savings bank portion of the bank’s work, there would not be the trouble that there is. The purpose of a savings bank* is to provide a safe deposit for the savings of the people. When one man draws out his money, another puts money in. Year by year the amounts held by depositors in our several savings banks increases, but that does not mean that money is only paid in, and none withdrawn. The business of a savings bank can be conducted satisfactorily only so long as both deposits and withdrawals are made continuously; the moment that deposits cease is the beginning of that slippery slide which leads to the time when every one will draw out and no one will put in any money. No scheme will save the State institution in New South Wales except that which has already been mentioned - an amalgamation with the Commonwealth Bank. I firmly believe that the Commonwealth Bank should be the only savings bank in Australia, because it has a wider range, and can draw on greater supplies than are available to any institution confined to a State. The Primary Producers Bank failed because it appealed to only one section of the community - the people in the country. One severe drought could close its doors. The reason why so many banks have recently closed in the United States of America i3 that their banking system is different from ours, every village having its own local bank, which depends on local funds or on what it can borrow from outside sources, and in a time of difficulty, or local business depression, may be left without supplies. In Australia we have different banks operating right throughout the Commonwealth in every district and town, and dealing with different industries, so that when one industry or district is demanding more money .for its development, another, which is not at the time in need of money, is making deposits. Thus, one industry, and one section, helps other industries and other sections, and the total funds held by the banks are not depleted. But when a bank is confined to one State, as was the case with the Government Savings Bank of New South Wales, and that bank is in competition with a Commonwealth institution, its work is localized, and difficulties arise. The destruction of confidence in NewSouth Wales meant that confidence outside the State was lost also, so that there was no one to come to the assistance of the State institution. The Prime Minister has shown how the Commonwealth Bank went to the assistance of the State institution.

There is need for a campaign to educate the people in financial matters. When a country is in the doldrums, as we in Australia are to-day, ‘ and the minds of the people are disturbed, they are ready to accept any nostrum, any scheme which promise, relief. That is why the Lang Government was returned to power in New South Wales. Mr. Lang said that he would do this and that, and- the people were prepared to give him a trial. Only after he had been elected did they realize their mistake. The people are still in that state of mind, because of lack of education regarding the real functions of banking, and of the nature of our financial system. If there is a definite and continued run on any bank, it cannot meet the demands made on it. Runs on bank? are due to the fact that the depositors have lost confidence in them. The people should be educated to the fact thai although a bank cannot repay in cash at one time all the money paid into it, the depositors are quite safe because their money has been invested in buildings, in crops, and in other ways, and that there would be no need for panic with sound management. While people realize that the credit is good, and that the amount of cash needed by them for ordinary business purposes is always available, they will have confidence. There should be an immediate amalgamation of the Commonwealth and the New South Wales Government savings banks, in order to help both the old and the new depositors.

There should also be a publicity campaign for the education of the people, so that they may not believe such statements as are being circulated t’o-day about fancy schemes of finance. Thus more and more should the people be instructed in the work and functions of banking. If only a section of the people had this knowledge it would act as a sound leaven, and keep the masses calm. 1 concur in the statement made on behalf of the Government, and I hope that itwill be broadcast. The old depositors should use their influence with the New South Wales authorities in bringing about the amalgamation I have advocated.

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– I understand that the Commonwealth Bank has advanced £4,250,000 to the Government Savings Bank of New South Wales, and that there was a net amount of about £4,000,000 due by the New South Wales Government to the Commonwealth for interest, which was met by the issue by the State of treasury-bills, which were discounted with the Commonwealth Bank. Has the New South Wales Government obtained from the Commonwealth Bank, in addition to the £4,250,000 advanced to the State Savings Bank, the sum of £4,000,000, which ought normally to have been paid out of State revenue to the Commonwealth?

Mr THEODORE:
Treasurer · DALLEY, NEW SOUTH WALES · ALP

– In regard to the assistance rendered by the Commonwealth Bank ro the Government Savings Bank of New South Wales, about £3,000,000 was advanced against fixed deposits held by the State Savings Bank. Those deposits will become payable to the Commonwealth Bank on maturity, and the debt will then lie liquidated. In regard to £1,250,000, that amount is repayable to the Commonwealth by the State Savings Bank as a prior claim to any other debts owed by the bank. The drawing of treasury-bills to cover the indebtedness of the Government of New South Wales to the Commonwealth Bank in respect of interest, is an ordinary transaction arranged through the Loan Council. If there had been no attempt at default the New South Government’s cash requirements to an equivalent amount would have been covered by treasury bills.

page 805

QUESTION

NATIONAL DEBT SINKING FUND

Mr PATERSON:
GIPPSLAND, VICTORIA

– Can the Treasurer state whether the National Debt Sinking Fund Commissioners who, I understand, met yesterday, have agreed to permit the use of a certain portion of the fund for the purchase of bonds in order to relieve those persons who need, in order to meet their actual living expenses, some of the money they have invested in Commonwealth loans? In short, did the commission agree to the proposals put forward in this chamber by the Treasurer on Tuesday last ?

Mr THEODORE:
ALP

– The National Debt Sinking Fund Commission had before it my recommendation that a certain proportion of the accruing sinking fund payments should be used to enable the Commonwealth Treasury to make an arrangement with the Commonwealth Bank to meet cases of hardship in connexion with the loan conversion operations. Having considered the matter, the commission agreed to allocate £2,000,000 of the accruing funds of the present financial year for the purpose indicated, subject, however, to Parliament inserting a suitable provision in the bill now before it, authorizing the commission to acquire the bonds at par value.

page 805

QUESTION

GOLD STANDARD

Mr TULLY:
BARTON, NEW SOUTH WALES

– The Premier of New South Wales informed an audience in Sydney a few days ago that one nation after another had abandoned the gold standard. I desire to know whether that statement is correct, and,- if so, which nations have departed from the gold standard. Have Great Britain and Australia done so? Is the fact that Australian notes are at a discount proof that the gold standard has been abandoned? Is it possible to abolish the gold standard before another standard has been agreed upon to take its place?

Mr THEODORE:
ALP

– Although the statement is often made, it is not quite correct to say that either Great Britain or Australia ha3 abandoned the gold standard ; it would be more accurate to say that we have departed from gold parity in regard to our currency. So far as I know, not one of the nations that were recently on the gold standard has abandoned it, nor, in my opinion, can that be done until some other standard has been substituted for it. Great Britain may probably resort ultimately to the devaluation of the pound rather than to the abandonment of r.he gold standard.

page 806

QUESTION

TRANSPORT WORKERS ACT

Disallowance ov Regulations.

Mr MARTENS:
HERBERT, QUEENSLAND

– Has the AttorneyGeneral been advised that it is the intention in another place to disallow the regulations issued under the Transport Workers Act in regard to the conditions of work on the waterfront? If that is the intention, what action will the Minister take in regard to that matter?

Mr BRENNAN:
ALP

– I gather by reference to the Senate notice-paper that it is intended to submit there a motion for the disallowance of the regulations referred t.o. Although it is not usual to outline Government policy in answer to a question, I think that I may say, with perfect safety and certainty, that the regulations, if disallowed, will be immediately re-gazetted, in order to give continuity to the policy of the Government in regard to work on the waterfront. The honorable member for Herbert (Mr. Martens) is particularly interested in the northern ports of Australia. At the port of Brisbane completely harmonious relations have been established, and I am in negotiation with the ship-owners and members of the Waterside Workers Federation in connexion with the conditions at other ports. The harassing interference on the part of another place is merely mischievous and disturbing.

page 806

QUESTION

TASMANIA N WATTLE BARK INDUSTRY

Mr LYONS:

– Has the Prime Minister received representations from the Premier of Tasmania, and the municipality of Glamorgan, in favour of assistance being given to the wattle bark industry, and, if so, what is the nature of the representations made ?

Mr SCULLIN:
ALP

– I shall take the matter up with the Minister for Markets and Transport, and let the honorable gentleman know the result.

page 806

POSTAL DEPARTMENT

Position of Cleaners

Mr-. R. GREEN.- What is the position with regard to the cleaners in th* Postal Department who received notice some time ago of the termination of their services? Is it a fact that their services are to be dispensed with shortly, say. at the end of this month?

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

– It is not intended, for the time being, to dispense with the services of those who were served with notices some time ago.

page 806

QUESTION

AUSTRALIAN CONSOLIDATED STOCK

Dissent by Government Savings Bank of New South Wales.

Mr ARCHDALE PARKHILL:

– Wil the Treasurer inform the House of the reasons advanced by the Government Savings Bank of New South Wales for dissenting from the conversion of Commonwealth stock to the value of over £1,000,000 held by that institution?

Mr THEODORE:
ALP

– For obvious reasons, it has not been customary to publish either the names of dissenters or the reasons actuating them in. declining to convert their holdings. We have not published the names of either those converting or those dissenting, without the permission of the persons concerned, and 1 think that it would be undesirable to depart from that practice. The honorable member has asked ti question regarding a public institution. 1 think that some reference was made in New South Wales by representatives of the State Government to its intention to dissent in regard to the stock mentioned, but the information was not disclosed by the Commonwealth Treasury. The loan that matured on the 10th August, the day on which the conversion loan was launched, was due by the New South Wales Government on securities held by the Government Savings Bank of New South Wales.

page 806

QUESTION

CENTRAL BANKING

Mr GREGORY:

– In view of the statement made by the Prime Minister to-day in relation to the Government Savings Bank of New South Wales, does not the Treasurer now consider that, having regard to the disaster that has overtaken the depositors in that hank, it is more than ever apparent that central banking under the control of political nominees is fraught with danger to the community and to sound finance?

Mr THEODORE:
ALP

– I do not think that that inference can be drawn from dic present position of the Government Savings Bank of New South Wales. It cannot be contended that the disaster that lias overtaken that institution is attributable to the form of government control to which the honorable member has referred. As a matter of fact, the suggestion has been made by all earnest persons who are looking for a solution of the problem that an amalgamation should take place between the Government Savings Bank of New South Wales and the Commonwealth Bank, and the latter bank is controlled by a board of directors appointed by the Government.

page 807

QUESTION

NAVAL DEFENCE

M.r. MARKS. - As the Royal Australian Navy is registered ‘ under the Washington Treaty as a part of the naval defence forces of the Empire, and as the League of Nations has been, apparently, unable to prevent an outbreak of hostilities between two of its members, namely China and Japan, which connotes the advisability of strong naval defence on the part of all nations, can the Prime Minister give an assurance to the people of Australia, and also to the British Admiralty, that no further reductions will be made in the personnel of the Royal Australian Navy whereby its efficiency would be further impaired?

Mr SCULLIN:
ALP

– I do not think that such a matter should be made the subject of question and answer in the House. The Government’s policy in regard to the various departments, including the Defence Department, is well known, and it is not proposed to vary that policy.

page 807

QUESTION

WHALING INDUSTRY

Mr D CAMERON:
BRISBANE. QLD · NAT

– Can the Prime Minister state whether there has been any further development regarding the proposal to establish international control of the whaling industry?

Mr SCULLIN:
ALP

– I shall look into the matter to see whether there is any additional information which I can secure for the honorable member.

page 807

QUESTION

AUSTRALIAN RICE

French Retaliatory Duty

Mr GABB:
ANGAS, SOUTH AUSTRALIA

– Will the Minister for Customs (Mr. Forde) state whether it is * fact, as reported in the press, that the French Government has imposed a duty of £4 a ton on Australian rice entering New Caledonia; and if so, is this impost, a retaliatory duty in reply to the heavy duties which Australia has imposed on French products entering this country?

Mr FORDE:
Minister for Trade and Customs · CAPRICORNIA, QUEENSLAND · ALP

– The Government, has had no official advice that the French Government has imposed a high duty ou Australian rice entering New Caledonia. As a matter of fact, until quite recently Australia was unable to produce sufficient rice to meet her own requirements, and even now her export of rice is negligible. I know that at the wool sales in Sydney yesterday. French representatives were very active buyers, and I am glad of it.

page 807

QUESTION

SILVER CURRENCY

Formal Motion tor AdjournMENT

Mr SPEAKER:

– I have received from the honorable member for Melbourne (Dr. Maloney) an intimation that he desires to move the adjournment of the House this morning for the purpose of discussing o definite matter of urgent public importance, namely, “ The necessity to use silver currency to assist in Australia’s financial recovery.”

Five honorable members having risen in, their places,

Question proposed -

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

– The urgency of this matter, which I have brought before the House on many other occasions, has impressed me with the need for moving the adjournment of the House in order that it may be discussed. The recent rise in the price of silver has reduced the possible profit which the Government might make out of the minting of silver. When I first raised this matter last year, silver was only ls. an oz., and at that price a profit of 450 per cent, could he made on silver currency, less the cost of minting. At present, with the price of silver at1s.6d. an oz., a profit of 266 per cent. could still be made. I n 1914, just after the outbreak of war, Mr. W. L. Baillieu, after several conferences of the silver interests of Australia, offered Mr. Fisher, the then Prime Minister, the entire silver, lead and zinc output of the mines at the English selling price prior to the war, less 30 per cent. Had Andrew Fisher been wise enough to accept that offer, Australia would have made a profit of over £200,000,000 which, as Mr. Baillieu has pointed out, might have prevented the present economic depression.

During the trouble on the coal-fields of Newcastle, when there was great distress among the miners, it occurred to me that, by using silver as currency, the Government would be able to make sufficient profit to render to the miners the assistance they needed. At that time certain promises were made to the miners which, unfortunately, could not be kept, although they, out of their small savings, contributed £1,000 towards carrying on the political fight which returned the present Labour Government with the biggest majority enjoyed by any party since federation. Those miners are suffering still. At that time silver was at the lowest price in the history of the world, namely1s.an oz. As honorable members may be aware, every ounce of silver will coin into 5s. 6d. worth of currency. What business man in Australia would refuse to embark upon an enterprise which would return him a profit of 450 per cent.? Yet that is what the Government could have made out of minting silver when its price was1s. an oz. Although it was unanimously decided at the caucus meeting to adopt my proposal, the matter was left, at my suggestion, to the consideration of the Government, and the Government, apparently, has been considering it ever since. I do not wish the price of silver to remain always at a low level; but the Government should seize the present opportunity before it passes.

I have communicated with the Premiers of all the States of Australia regarding this matter, and have received from them favorable replies. My calculations were based upon a selling price for silver of1s. an oz., and, although it is dearer now, 1 am certain that the mining interests would be glad to accept from the Government less than the market price, seeing that they would be saved freight and insurance charges, &c. At1s. anoz. £1,000,000 worth of silver would mint into £5,500,000 worth of currency. Never in the history of Australia has a worker man or woman, refused to accept wager in silver. My suggestion was that the new silver currency should be lent to the various State governments at 2 per cent., in order to provide employment This would be equivalent to a return of 11 per cent. to the Commonwealth Government, and the State governments, in turn, would lend the money to municipalities, shires and boroughs, which would furnish the actual employment. Sir James Mitchell, Premier of Western Australia, is by no means a Labour supporter, but he is a keen financier, and he informed me that he would be very pleased to borrow money at 2 per cent. in order to relieve unemployment. All the other Premiers have expressed their appreciation of my suggestion ; they have not promised anything, but the Premier of New South Wales stated definitely that if his Government had the power of minting - of which it has been deprived -he would commence minting silver immediately. Just imagine what the currency minted from £1,000,000 worth of silver would have meant to the Government Savings Bank - that institution which,in my opinion, should never have been allowed to close its doors! The bank would have had £5,500,000 in coin to pay away to its depositors, who, I am certain, would not have refused to take silver. And why ? Because, after gold, which is recognized throughout the world as the most acceptable form of currency, silver comet next. If it were possible suddenly to remove either all the gold currency or all the silver currency from the world, much less distress would be caused by removing the gold currency. Only Great Britain. Ireland, Canada, South Africa, New Zealand, and Australia base their currency on gold. Every European nation, every Eastern nation, as well as the United States of America, base their currency on silver. When the money powers of the world enthroned the gold standard, they sentencedevery third man, woman and child in the world to poverty and misery. I am including in my reckoning the massed millions of the East, in China, India, Japan, and the Straits Settlements. New South Wales is justly described as the silver State of the Commonwealth, but a great many of her miners are now out of work. According to the Year-Book, out of 5,589 miners, 56 per cent, were unemployed in 1930.

In 1920 the English people were beginning to doubt the value of their fiduciary currency, which had reached the total of £300,000,000. Silver at that time was at the highest price it has ever been ; it paid to melt down silver coins for their metal content. I have here a silver halfcrown minted in 1920, but only 500 parts out of 1,000 are pure silver, and I have here an Australian coin, of which 925 parts out of 1,000 parts are pure silver. England reduced the silver content of her coins until it fell below what it had been at any time since tho reign of Edward the Confessor, with the exception of tho 37th year of the reign of Henry VIII. Whereas £1,000,000 worth of silver at ls. an oz. will mint into £5,500,000 worth of currency in Australia to-day, it would mint £9,175,000 worth in England, according to the silver content of English coins.

The average cost of minting should not be added to the overhead charges of Issuing silver currency. The overhead charge of minting goes on whether the mint is working at full speed or not. Therefore, minting charges should he reckoned only as the difference between the ordinary overhead charges, and the actual cost of minting when the institution is in full swing. The profits which would be derived from the coining of silver could also be employed for assisting distressed farmers. An appeal was made to the -farmers, not only by the Government and its supporters, but by honorable members from all parts of the House, to grow more wheat. In that way this country was to be helped out of its difficulties. That slogan was broadcast throughout the length and breadth of Australia and the farmers nobly answered the call. What happened? This Government, in an endeavour to honour its promises, sent the Wheat Marketing Bill to another place, which promptly rejected it. I maintain that the Government should not have stopped at that ; it should have taken this House into its confidence, and said definitely that it would help the farmers, despite the opposition in another place. I have with me an attache case full of letters and newspaper cuttings sent to me from all over Australia by farmers and students of finance, &c, supporting my plan, and these are only a part of what I have received. The Government could have assisted them by giving them 4s. in silver for every bushel of wheat that they produced. No farmer would have refused that form Of payment. What would the minting of four shillings cost the Government? If ls. worth of silver would make 5s. 6d. worth of silver coin, the actual cost to the Government of four silver shillings would be less than 9d. The wheat could have been sent to England and sold at 2s. a bushel, leaving this Government with a profit of ls. 3d. a bushel. Had 100,000,000 bushels of wheat been sold at 2s. a bushel, the Government would have received £10,000,000, plus £3,000,000 in exchange; or a total of £13,000,000. That would have been a very useful sum to this Government. In answer to a question by the honorable member for Barton (Mr. Tully) the other day, the Treasurer stated that it now costs £167 to send £100 to the United States of America. The £13,000,000 which the Government would have received from the sale of wheat in England, had it adopted my suggestion, would have realized a profit of £9,000,000. That sum, if sent to the United States of America, would have obviated the tremendous exchange rate, which is to-day crucifying this country. I have shown clearly that the Government, out of the profits of minting silver, could have paid the farmers 4s. for every bushel of wheat produced hy them. Had that been done, the Government would have honoured its promise to the primary producers, which I consider has now been broken.

I come now to wool. Recently I asked the honorable member for Riverina (Mr. Killen) what would be a fair average price for wool, and he told me that ls. 3d. per lb. would be satisfactory. I said, “How about ls. 6d. a lb.?” He replied “ The farmers would bless you or any one else who could guarantee them an average price of1s.6d. per lb.” I do not know of any farmer who would refuse to accept in silver currency1s. 6d. per lb. for his wool. The sum of1s. 6d. in silver coin is equal to 3 3-lld., which is the actual cost to the Government. Therefore, we could have paid the wool producers1s. 6d. per lb. for their wool, and sold it in England at 9d. per lb. and made a profit of 5d. per lb. Had that been done, all concerned would have been satisfied. Let me point out that £4,000,000 worth of silver at1s. per oz. will mint £22,000,000 worth of silver currency. It must be remembered that the chief overhead expenses continue whether the mint is fully or partly occupied, therefore, the cost of minting should be based upon the difference between the overhead cost and the extra cost when the mint is in full swing. Some people say that paper money is cheaper and better, and returns a greater profit. If that is so. why did England in 1920 increase its silver currency? It was because the people there were becoming nervous about the enormous increase in the fiduciary note issue. The more silver we mint the more credit there will be for our note issue. Then suppose that of two men living in different houses, one held £100 in notes, and the other £100 in silver. If both houses were burnt down, the notes would be destroyed and their value lost, but the weight of the silver would remain, and if the owner could prove that he had withdrawn £100 worth of silver from his bank an honest government would he justified in paying him the face value of the coins. Another advantage of silver is that it is the second bust money in the world. At the end of 1928 New South Wales had produced over £142,116,291 worth of silver. I venture to say that had that State been able to obta in the permission of the Government to mint its silver, and to pay the profits into its Treasury, the community generally would have been greatly benefited. [Leave to continue given.]

The honorable member for Barron recently asked the Treasurer - 1.Is it a fact, on the first of the month (October) a heavy payment, on account of interest on Australian loans floated in New York, felldue?

  1. Is it a fact that wo had toputup£167 in Australia to pay £100 of interest in New York?
  2. Is it a factthat thisheavy exchange cost places a prodigious burden upon the taxpayers of Australia?

The answer in each instance was in the affirmative. I have to thank the honorable member for Barton for having asked that question, and I feel sure that if the press will give his action sufficient publicity he will receive a great deal of kudos at the hands of his constituents and the people generally. Australia is in difficulties, and we must endeavour to overcome them. By the remonetization of silver in the direction that I have indicated, we could help the miners of New South Wales, 56 per cent. of whom are out of work at Broken Hill alone. That would give some impetus to silver mining, although it is only a byproduct at the present time. I hope that the Government will take action along the lines that I have indicated, and if it has not the courage to mint additional silver, it should, at any rate, permit the States to do so under government supervision.

Mr CUSACK:
Monaro · Eden

– It is rather singular that honorable members opposite, who pride themselves on being exponents of finance, are not able to enlighten the people of Australia on the subject of bimetallism, or the advisability of increasing the silver currency. The honorable member for Melbourne (Dr. Maloney) deserves recognition for the pertinacity with which he has put this matter before the people of Australia.The Government has said that it wouldbe delighted to know of any remedy that would assist in overcoming Australia’s difficulties. [Quorum formed.]Ido not say that the Government, because it has failed to increase the silver currency, has injured the financial stability of Australia. I do not agree with the honorable member for Melbourne that an increased silver currency would be the solution of our financial problems. There are other ways in which we could bring that about with much greater benefit to Australia. All the currency we need can be made of paper, which is much cheaper than silver. There is nothing wrong, ifwe wish to make money plentiful, with putting 5s. or even 2s. 6d. worth of gold into a sovereign, and making it legal as a currency of 20s. sterling.

Mr Gabb:

– I thought that the honorable member advocated the printing of notes.

Mr CUSACK:

– That is so. The honorable member is a political economist, and as such he is looking for some enlightenment on the subject. ]Vo doubt he will be slow to absorb my remarks, but if he will listen attentively to me I shall be able to show him that there is no reason why we should not use paper currency only.

Mr Archdale Parkhill:

– Is the honorable member voicing the opinion of the Government?

Mr CUSACK:

– The honorable member for “Warringah (Mr. Parkhill) is evidently eager for enlightenment. He has a keen understanding of most subjects, but not of bimetallism or tri.metallism. I realize that he, too, may have been misled by the honorable member for Melbourne. In Australia a £1 note represents 20s., and it is cheaper to print more notes than, to increase the silver currency. There is no need to abandon paper currency. Money may be anything. During my business career I have had to handle paper money hearing the signature of private citizens, and it has never failed me. Some of them could hardly write their own names. In many cases the signature could not, be deciphered; yet I have accepted their cheques, and so have the banks. That form of currency has been in existence for years, and it will serve to meet our future needs. The difficulty with this Government is, not that it has no money, but that it is not making money available. Tens of millions of money is locked up in the vaults of our banks. It should put more paper money into circulation. If a person takes gilt-edged securities to the Commonwealth Bank, and obtains on them overdrafts of £20,000, the moment that sum is transferred to his banking account the money is made available. That man’s purchasing power is immediately increased by £20,000 which did not exist before the transaction took place. Whence did the money come? It is clear that credit, which is purchasing power, is just a book entry. If the Senate would pass the necessary legislation for the reform of the banking system nothing more would be required. Give to the hundreds of thousands of business men and farmers a chance to get advances from the banks on gilt-edged securities, and we shall need neither silver nor gold* This city of Canberra was not built ou£ of an abundance of silver and gold ; it was financed by book-entry credits; the* men who worked on the job accepted’ cheques for their services. The country requires an extension of credit and the reform of banking so that £3,000,000,000 worth of assets will not be regarded as valueless security for the credits which are essential to the development of Australia. Many men with £20,000 worth of property have not £100 worth of purchasing power, solely because the banking system has destroyed their credit. The Government is not blameworthy for not taking more notice of the advocacy by the honorable member fo-r Melbourne (Dr. Maloney) of silver currency.

Mr Gabb:

– Is it blameworthy for not taking notice of the honorable member for Adelaide (Mr. Yates) ?

Mr CUSACK:

– I am not aware that the honorable member for Adelaide has advocated anything other than the policy of his party, but we have not tho power to give effect to that policy. This Parliament is hampered because it does not control the Commonwealth Bank. The remedy is for the people to agree to an alteration of the banking system.

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

– The press is not educating the people to that view.

Mr CUSACK:

– I doubt if the newspapers are capable of educating the public. They are more concerned with protecting the interests of the shareholders in banks and other financial institutions. They represent interests that are opposed to the true welfare of the country. One reading the conservative newspapers would imagine that the Labour party in this Parliament has no other monetary policy than the printing of notes. That is the result of the propaganda of our newspaper enemies, who are trying to make the people believe that we are in favour of inflation.

Mr DEPUTY SPEAKER (Ur McGrath:
BALLAARAT, VICTORIA

– Order ! The honorable member’s time has expire(

Question resolved in the negative.

page 812

QUESTION

DESTRUCTION OF RED LEADER

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

asked the PostmasterGeneral, upon notice -

In what way did the paper called the Red Leader, some thousands of which wore recently destroyed by the postal authorities in Sydney, contravene the laws of the Commonwealth, and under what particular law was action taken?

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

– The Red Leader contravened the Post and Telegraph Act 1901-1923, and was destroyed in pursuance of the provisions of that act.

page 812

QUESTION

IMPORTED COAL

Primage Duty

Mr JAMES:
HUNTER, NEW SOUTH WALES

asked the Minister for Trade and Customs, upon notice -

What amount of imported coal was consumed during the year ended 30th Junelast in Australian waters by vessels visiting Australia, and what was the amount of primage duty collected thereon?

Mr FORDE:
ALP

– Inquiry will be made in the various States to ascertain whether the desired information can be obtained.

page 812

QUESTION

AIR ACCIDENTS INVESTIGATION COMMITTEE

Inquiry into Loss of “ Love Bird “.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES · ALP

– On the 14th October the honorable member for Balaclava (Mr. White) asked the following questions, upon notice -

  1. Is the Air Accidents Investigation Committee composed entirely of Defence Department personnel?
  2. Are its inquiries open to the public or to relatives or counsel of persons killed or injured; if not, why not?
  3. Did certain witnesses, including a qualified pilot state at the Air Accidents Investigation Committee inquiry into the Love Bird accident atTemora, that the fin and rudder broke away in the air?
  4. Was the finding of the Air Accidents Investigation Committee that in the above accident the crash “ was caused through the aircraft beingstalled on a turn at a low altitude “?
  5. Was a Form 50 filled in before the Love Bird left Mascot?
  6. Is it the responsibility of the civil aviation staff at Mascot to see that such a certificate of safety is issued?
  7. In view of the verdict of the coroner that “ how or by what means the said aeroplane crashed, the evidence adduced is too conflicting to enable me to say “ ; and his rider that, inter alia “ I further find that the said aeroplane had certain defects which should have been adjustedbefore the machine was allowed to be used “ - will the Government re-open the inquiry for the examination of further witnesses, with the right of relatives to be represented thereat?

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

  1. Yes. 2.The inquiry conducted by the Air Accidents Investigation Committee is primarily a technical one to determine the cause of the accident in order that steps might betaken to prevent a recurrence. Apart from thecost involved in the committee conducting all its inquiries in public, it is considered undesirable and unnecessary that it should do so except in special cases. It should be remembered that whenever any aircraft accident involves loss of life of any person the circumstancesare the subject of an independent public and coroner’s inquiry, at which relatives and counsel may be present.
  2. The evidence given before the Air Accidents Investigation Committee is confidential, but reference to the proceedings of the coroner’s inquest shows that a certain witness, who was a qualified pilot, did make such a statement at the coroner’s inquiry. It may be mentioned that reference to these proceedings also showed that witnesses stated that the rudder post was intact after the crash.
  3. Yes.
  4. No Form 50 indicating the condition of the LoveBird was submitted to the department or its Sydney representative before the aircraft left Mascot.
  5. The responsibility in regard to issue of certificates of safety and for compliance otherwise with the requirements of the Air Navigation Regulations in regard to airworthiness rests upon the owner and/or pilot of the aircraft.
  6. No. The Government is satisfied with the finding of the Air Accidents Investigation Committee.

page 812

QUESTION

THRIPS

Mr SCULLIN:
ALP

– On Wednesday the honorable member for Maribyrnong (Mr. Fenton) asked me a question, without notice, concerning the work of the Council for Scientific and Industrial Research on the thrips pest.

As promised, I have looked intothe matter. The position is that the council has been conducting investigations in this regard for some time past, with a view particularly to finding an effective repellent, but up to the present results of this work have not proved completely successful. The council is at the present time actively co-operating with the Victorian Department of Agriculture in the matter, and is maintaining close touch with developments in other States.

page 813

QUESTION

CUSTOMS TARIFF (PRIMAGE DUTIES)

Consideration resumed from the 14th October (vide page 762).

Motion (by Mr. Forde) proposed -

That the resolution be adopted.

Mr MORGAN:
Darling Downs

– I ask the Minister to agree to re-submit the schedule so that stud stock may be removed from paragraph 2 of the schedule, in. which the duties are 4 per cent., to paragraph 1, containing the list of exemptions. I desired to have that done on “Wednesday night, but was ruled out of order. I now propose this alteration on the broad ground that the improvement of our flocks and herds is essential to the development and prosperity °f our people. To a large extent Australia is dependent on stock-breeding. During the present depression, stud masters are at a particular disadvantage, and there is no immediate prospect of conditions improving. No body of specialists in primary production, is doing more useful work than those stud masters who are working to maintain and improve the standards of our flocks and herds. Any obstacle to these endeavours must operate to the serious detriment of the country. For the maintenance of proper standards, regular supplies of imported stock should bc available. Primage duty will press heavily on those stud masters who, after experiencing year’s of drought, are suffering further from the general depression. The concession I am suggesting would not involve any substantial loss of revenue, but would be of considerable relief to individual stock-breeders. The duty proposed by the Government will hamper their operations, and sprag the wheels of progress in an important branch of primary production.

Mr FORDE:
Minister for Trade and Customs · Capricornia · ALP

– Representing a. primary producing district, the honorable member for Darling Downs (Mr. Morgan) naturally takes a very keen interest in the primage duty on stud stock. A deputation of stud masters waited upon me to urge that stud stock should be exempt from primage duty. It is already free of import duty; rightly so, ‘because it is of the utmost importance to Australia that stud masters should be able to introduce the best stock from all parts of the world at low cost. Realizing this, the Government, when increasing the general primage duty to 10 per cent., decided to allow the impost on stud stock to remain at 4 per cent. I do not admit that the burden on stud masters is as heavy- as the honorable member for Darling Downs has said. There are many breeders in Australia who are able to supply, for the time being, at any rate, stud beasts from their own flocks and herds. Any stud master who is not satisfied with the stock available in Australia, and desires to import, will have to pay primage duty at the rate of 4 per cent. But for the financial stringency, the Government would have removed altogether the primage duty from stud stock; in the circumstances, the best it could do was not. to increase it.

Mr Gabb:

– It does not bring in much revenue.

Mr FORDE:

– If little duty is paid, the tax cannot be the burden on stud masters that it is represented to be. When I informed the deputation of stud masters (hat the duty would be left at 4 per cent., instead of being increased to 10 per cent., 1 understood that they were satisfied that that, was n fair compromise. The Government would gladly remove all primage duties, but if it did so it could not raise the new revenue to which it is pledged under the Melbourne conference plan, and if individual items are to be exempt, there are hundreds in respect of which the claims are more urgent than are those in respect of stud stock.

Mr Paterson:

– The charge on stud stock is insignificant from a revenue point of view.

Mr FORDE:

– I do not. agree with that statement. Because of the prevailing depression, the market is poor, and the importation of stud stock is not very great. However, it might develop into a substantial item. After careful consideration, the Government has decided that at present it cannot go further than to bring stud stock under the 4 per cent, instead of the 10 per cent. rate. If such stock were admitted duty free, the door would be open to numerous requests from other persons, who could put up just as good an argument as the stud masters, the majority of whom are- wealthy individuals who dispose of their stock to the smaller men. The matter will, however, he reconsidered later.

Question - That the resolution be adopted- put. The House divided. (Mr. Deputy Speaker - Mr. McGrath.)

AYES: 24

NOES: 14

Majority . . . . 10

AYES

NOES

Question so resolved in the affirmative.

Resolution adopted.

Standing Orders suspended.

Ordered -

That Mr. Forde and Mr. Scullin do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Forde, and read a first time.

Second Reading

Motion (by Mr. Forde) proposed -

That the bill be now read a second time.

Mr PATERSON:
Gippsland

– I wish to make a few remarks on this subject, on which I refrained from speaking last Wednesday night owing to the lateness of the hour. I believe that the imposition of these duties will very largely fail to achieve the purpose of the Government, which is to raise additional revenue. If we in Australia had a low tariff policy, and the bulk of our goods came in free, or on a low scale of duties, a 10 per cent. primage would very substantially increase our revenue. But, to impose a 10 per cent. primage on top of our already high duties, will have the effect of reducing, rather than of increasing, revenue.

This 10 per cent. primage will be imposed on all goods, except goods especially exempted. It will be imposed on goods that are already highly protected, and on goods that are otherwise free; goods that in many cases are the raw materials used by our manufacturers. When imposed on goods that are already highly protected, it may prove to be the last straw in preventing their importation, thereby reducing, rather than increasing, the amount of revenue collected. Again, the imposition of these primage duties on essential imports, some of them otherwise free, will have the very bad’ effect, that it will rake costs of production and of living. By the mode of its imposition, this duty is really 11 per cent. instead of 10 per cent., and, when charged on raw materials, it may grow to be 25 per cent., 30 per cent., or even more, by the time the goods reach the hands of the consumer. A profit on the tax will be imposed in each case as the goods pass through the hands of the manufacturers, merchants, and retailers, so that the original amount of primage will be almost lost sight of in the tremendous increase that will result. There is also a protective incidence in connexion with this primage tax which will add considerably to the protection already enjoyed by local manufacturers generally, and will add to their opportunities for increasing prices. I do not suggest that in all cases they will take advantage of this opportunity, but it will be there. The amount of revenue that will go into the Treasury will be small compared with the amount that will be extracted from the consumer.

Although designed to provide revenue, this tax is very much worse than the sales tax, so far as its effectiveness with respect to additional revenue going into the

Treasury and extra costs upon the consumerare concerned.Although the sales tax is most unpopular andcomplicated, at least thismuchcanbe said of it that it is imposed on all goods, with few exceptions, whether they are produced locally or imported.Its basisis broader than that of theprimage tax, which applies onlyto importations. Further, itis imposed at the very laststage when it would bepracticable to apply it, when the ultimate wholesale transaction takes place. Therefore, the opportunities to increase it beforeit reaches the consumer are not nearly so great as is the case with the primage tax, which, as its name implies, is imposed when the goods reach Australia, and is multiplied many times before they reach the consumer.

I regard the primage tax as a pernicious impost. It will fail of its purposetoa great extent, defeat its own object, and increase the costs of production and living at a most inopportune time. The Government would be doing the country more service ifit were to abolish the tax instead of foisting upon a community a burden that itcan ill affordto bear.

Question resolved in theaffirmative.

Bill read a second time, and passed through its remainingstages without amendment or debate.

page 815

TARIFF

ExciseDuties.

In Committee of Ways and Means:

Consideration resumed from the 26th March, 1931 (vide page 744,volume 128), and from the 29th July, 1931 (vide page 4585, volume 131), on motions by Mr. Forde-

That the scheduletothe Excise Tariff 192 1 - 1928 be amendedas hereunder set out (vide page 740, volume 128, and page 4584, volume 131 ) .

Item 1 (Beer, porter, cider and perry, spirituous).

Mr McGRATH:
Ballarat

. -I have made representations to the Minister in relation to the arrangement made with the proprietors of Guinness’s stout. Although there isa heavy duty on imported stout, Australian brewersf eel that they are notbeing treatedfairly,and, they, therefore,ask that theexcise dutyon stout be reduced by6d.a gallon, bringing it down to1s.6d. a gallon. They claim that if that were done not only would therebean increased demand for Australian hops,but also that it wouldbe possible to sell stout at11d. a bottle insteadof at1s. 2d. as atpresent, so that the revenue wouldnot be affected,because of thegreater consumption of stout.

Mr Bayley:

– Have they given anundertaking to reduce the price of stout to 11d. a bottle?

Mr.McGRATH. - Yes. The reduction of the excise would have a dual effect; it would increase the consumption of local stout, and increase the revenue. The arrangement entered into with Guinness’s was made in order to assist the hopgrowing industry of Tasmania. The heavy excise duty of 2s. a gallon has militatedagainst the hop-growing industry in this country. Guinness’s would have no ground for complaint ifthe exciseduty were reduced, as suggested. Although that firm has been granted certain concessions, the brewersof Australia have not complained. They could make greater profits by using imported hops, obtainable at 6d. perlb. less than theypay for locally grown hops;but they have beenloyal to the Australian hop-growing industry. The arrangement enteredinto with Guinness’s ensured a market for our surplus production of hops last year, but it may be that next year the company will not require any Australian hops.

Mr.Lewis. -In that case the duty could be raised.

Mr McGRATH:

– The duty is already heavy,but we musthave regard tothe future of the Australian hop-growing industry. I urge the Minister to reduce theexciseto1s.6d.a gallon, because I feel sure that itwouldassist the Australian hop-growingindustry, and find workfor someof our unemployed, while not reducing the revenue.

Mr.FORDE (Capricornia - Minister for Trade and Customs) [12.35]. - I have listenedwith interest to the representationsmade by the honorable member for Ballarat (Mr. McGrath)on behalf of the Australian manufacturers ofstout. The itemnow before the Chair covers ale, porterand beer, so that if the honorable member’s suggestion is to be given effect, itwillbenecessary to move anamendment makingstout a separateitem, bearinga duty of1s. 6d. a gallon instead of 2s. a gallon as at present. The Bruce-Page Government increased the excise duty to 2s. a gallon. In December, 1929, the present Government reduced it to1s.10d. a gallon; but later, for financial reasons, it was again raised to 2s. a gallon. I am afraid that if the excise duty on stout were reduced, there would immediately begin an agitation to reduce the duty on beer. It would be urged that the workers of Australia should not be penalized by having to pay a higher duty on beer than on stout.

Mr McGrath:

– Beer does not have to meet overseas competition to the extent that stout does.

Mr FORDE:
ALP

– Practically all the beer and nearly all the stout consumed in Australia is produced in this country. The imports are comparatively small.

Mr Bayley:

– The importations of those lines last year were valued at £45,000.

Mr FORDE:

– That was the last year before the imposition of the restrictions. The present duty on stout, imported in bulk, is, British, 3s. a gallon; intermediate, 3s. 3d.; and general, 4s. 6d., while bottled stout is dutiable at 3s. 6d., 3s. 9d., and 6s. 6d. a gallon respectively. Generally, the higher rates apply to all imported stout, because it nearly all comes here in bottles. The special duty adds 50 per cent. to those charges, the higher rate having been imposed in accordance with the plan to restrict imports. It was only after very strong representations had been made by Tasmanian members, particularly the honorable member for Franklin (Mr. Frost), in whose district practically all the hops grown in Tasmania are produced, that the Government decided to lift the surcharge and rationing on imported stout. Action was not taken until its possible effect on the Australian stout-making industry was considered. The surcharge and the rationing enabled us to dispose of the surplus stocks of hops, comprising 2,500 bales of the 1930 crop, and 1,500 bales of the 1931 crop, and, in addition, 1,000 bales per annum from 1933 onwards at world parity prices. That meant that £57,000 in Australian currency was given to the Australian hop-growing industry, prac tically all of which went to one small district in Tasmania. I realize that the Australian breweries are the best market for Australian hops, and that we should give adequate protection to Australian brewers against importations of ale, beer, and stout from other countries. I understand that they are quite satisfied with the existing protection.

Mr FENTON:
MARIBYRNONG, VICTORIA · ALP; UAP from 1931

– Has there been any noticeable increase in the importations of stout recently?

Mr FORDE:

– The new arrangement came into operation so recently that I have not yet had any advice; but I understand that no big importations of stout have been made recently, or are likely to be made because of the exchange position. The honorable member for Ballarat (Mr. McGrath) said that there would be no loss of revenue to the Commonwealth if the excise were reduced by 6d. a gallon. That is problematical. The experience of the Customs Department is that a reduction of excise has always led to a reduction of revenue, and I am afraid that any reduction now would have the same effect. Although I appreciate the strong case made out by the honorablemember for Ballarat (Mr. McGrath), I regret that the Government cannot accept his suggestion.

Item agreed to.

Item 2-

By omitting the whole of sub-item (a) and inserting in its stead the following sub-item: - “ (a) Brandy, distilled wholly from wine, the fermented juice of fresh grapes, by a pot-still or similar process at a strength not exceeding 40 per cent. over proof, matured by storage in wood for a period of not less than two years and certified by an officer to be pure brandy -

1 ) If bottled under customs or excise supervision subject to such conditions as to the bottling and as to the strength of the spirits as are prescribed by departmental by-laws, per proof gallon, 28s.

If not bottled under customs or excise supervision, per proof gallon, 33s.”.

Mr.FORDE (Capricornia- Minister for Trade and Customs) [12.43] . Subitem a deals with the excise duty on brandy. Honorable members will recollect that a proposal to place an extra 5s. duty on imported brandy bottled out of bond was defeated recently. I, therefore, move -

That the sub-item be amended by adding the following: - “And on and after the 17th October, 1931-

Brandy, distilled wholly from wine, the fermented juice of fresh grapes, by a pot-still or similar process at a strength not exceeding 40 per cent. over proof, matured by storage in wood for a period of not less than two years and certified by an officer to be pure brandy, per proof gallon, 28s.”.

The amendment will do away with the special provisions incorporated in the schedule of March, 1931, regarding the bottling of brandy in bond, and will remove the extra excise duty of 5s. per proof gallon imposed on brandy not bottled under customs or excise supervision. It is designed to put Australian brandy on the same footing as imported brandy.

Amendment agreed to.

Sitting suspended from 12.45 to 2.15 p.m. [Quorum formed.]

By omitting the whole of sub-itemb, and inserting in its stead the following sub-item : - “ (b) Blended brandy, distilled wholly from wine, the fermented juice of fresh grapes, and containing not less than 25 per cent. of pure spirit (which has been separately distilled from wine, the fermented juice of fresh grapes, by a pot-still or similar process at a strength not exceeding 40 per cent. over proof), the whole being matured by storage in wood for a period of not less than two years, and certified by an officer to be brandy so blendedand matured -

  1. 1 ) If bottled under customs or excise supervision subject to such conditions as to the bottling and as to the strength of the spirits as are prescribed by departmental by-laws, per proof gallon, 29s.
  2. If not bottled under customs or customs supervision, per proof gallon, 34s.”

Amendment (by Mr. Forde) proposed -

That the sub-item be amended by adding the following: - “And on and after the 17th October, 1931-

Blended brandy, distilled wholly from wine, the fermented juice of fresh grapes, and containing not less than 25 per cent. of pure spirit (which has been separately distilled from wine, the fermented juice of fresh grapes, by a pot-still or similar process at a strength not exceeding 40 per cent. over proof), the whole being matured by storage in wood for a period of not less than two years, and certified by an officer to be brandy so blended and matured, per proof gallon, 29s.”

Mr GREGORY:
Swan

– I object to amendments being brought down without reasonable notice having been given of them. It is decidedly unfair that important tariff changes are proposed at such short notice.

Mr ARCHDALE PARKHILL:
Warringah

– I support the protest made by the honorable member for Swan (Mr. Gregory). The committee has not been treated fairly in this matter. I confess that, despite the Minister’s clear enunciation, I find it impossible fully to grasp the significance of the amendments that he springs upon us so suddenly.

Amendment agreed to.

By omitting the whole of sub-item (c) (twice occurring) and inserting in its stead the following sub-item : - “ (c) Apple brandy, distilled wholly from apple cider and brandies distilled from other approved fruit juices by a pot-still or similar process at a strength not exceeding 40 per cent. over proof, matured by storage in wood for a period of notless than two years, and certified by an officer to be pure apple or pure fruit brandy -

  1. 1 ) If bottled under customs or excise supervision subject to such conditions as to the bottling and as to the strength of the spirits as are prescribed by departmental bylaws, per proof gallon, 29s.
  2. If not bottled under customs or excise supervision, per proof gallon, 34s.”
Mr FORDE:
Minister for Trade and Customs · Capricornia · ALP

.- I move -

That the sub-item be amended by adding the following: - “And on and after the 17th October, 1931 - (c) Apple brandy, distilled wholly from apple cider and brandies distilled from other approved fruit juices by a pot-still or similar process at a strength not exceeding 40 per cent. over proof, matured by storage in wood for a period of not less than two years, and certified by an officer to be pure apple or pure fruit brandy, per proof gallon, 29s.”

The object of this amendment is to bring sub-itemc into conformity with the other brandy sub-items; that is, to wipe out the 5s. extra duty on Australian brandy bottled out of bond. The Australian brandy-makers ask that they be put on the same basis as importers of brandy.

Amendment agreed to.

By omitting the whole of sub-item (d) and inserting in its stead, the following sub-item: - “ (d) Whisky, distilled wholly from barley malt by a pot-still or similar process at a strength not exceeding45 per cent. over proof, matured by storage in wood for a period of not less than two years,and certified by an officer to be pure malt whisky -

  1. Ifbottled under customs or excise supervision subject to such conditions as to the bottling and as to the strength of the spiritsas are prescribed by departmental by-laws, per proof gallon, 28s. :
  2. If not bottled under customs or excise supervision, per proof gallon,33s.”
Mr BERNARD CORSER:
Wide Bay

– I move -

That the sub-item be amended by adding the following:-

And on and after the17th October, 1931 -

Whisky, distilled wholly from barley malt by a pot-still or similar process at a strength not exceeding 45 per cent. over proof, matured by storage in wood for a period ofnot less than three years, and certified by an officer to be pure malt whisky -

1 ) If bottled under customs or excise supervision subject to such conditions - as to the bottling and as to the strength of the spirits as are prescribed by departmental by-laws, per proof gallon. 28s.

If not bottled under customs or excise supervision, per proof gallon, 33s.”

The effect of the amendment is to change the period of storage fromtwo to three years. At the present time, the law in nearlyall British countries is that whisky must be matured for threeyear, and a similar provision obtains in mostparts of the world.Under my amendment, the revenue willnot bereduced, but in- creased,and theobject is to protect the health of the consumers.

Mr.BERNARDCORSER.- Yes, the amendment will have theeffect ofcheck- ing the imposition onthepublic of what is known as “ snake juice “. In any tariff alteration, we should try to do as little in jury as possible to existing institutions, and for that reason I have moved that the maturing period be three years, not five years.Had I not taken into con- sideration the interests of a few of the smaller companies in Australia, I would have suggested a period of five years. For various reasons, the Australian public has registered its approval of the period of three years. An act has been passed by the Western Australian Legislature prohibiting the sale in that State of whisky that has not been matured for threeyears. An opportunity of amending the excise tariff is presented only about once in ten years, and the committee, in the interests of the community, should effect the reform suggested in my amendment. ‘The alteration would not inconvenience thelocal whisky distillers. While the public interest and the public health are to be considered above the interests of the local producers, it is satisfactorytoknow that the amendment would do no injury to the manufacturers concerned. If we producean Australian whisky that is well matured, there will be increased consumption of the local article, and that will assist primary producers such as barley-growers. The maize-growers willalso benefit by the increased consumption of Australian whisky, and the illicit still operators will find it harder to obtain a market for their wares.We know that at the present time a largequantityof “fire water” from illicit stills is being sold, and I am sure that the Ministerwillwelcomeanything which will help him to deal with the problem.If ourlocally-manufac- turedwhisky were not released until it had been matured for three years, it wouldso far surpass in flavour anything which could beproduced from illicit stills that there would belittle or no market for the illicit article . A period of three years is more reasonable than one of five, havingregard to the interests of the small distilleries. The alteration would benefit the public and the primary producers, and would not injure any one.

Mr NAIRN:
Perth

.- I support the amendment, but desire to give notice of a furtheramendment of the same item.If people will drink spirits, it is desirable that weshoulddo all we can to insure thatthey get spirits of the hostquality. I am sure,therefore, that the amendmentwill meet withthegeneral approval ofhonorable members. My amendment is for the purpose of removing the discriminatory duty of 5s. per gallon on spirits not bottled in bond. I mention the matter now so that the question may be framed in such a way that, in the event of this amendment being carried, it will not exclude a further amendment to give effect to what I have indicated.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– I support the amendment. The longer whisky is kept in bond the ‘better it is. We must consider the health of the public, and whisky that has not been properly matured is harmful to health. I have no interest in the liquor industry myself, but we all know that properly matured whisky is more palatable and less likely to injure the consumer than raw spirit. The Government would not lose any revenue if the period of maturity were extended to three years, and the public would benefit.

Mr BAYLEY:
Oxley

.- This amendment might well have been moved by the Minister for Trade and Customs himself, or by his colleague, the Minister for Health. The honorable member for Wide Bay (Mr. Corser) has pointed out that the change provided for in his amendment would benefit the health, if not of the whole community, at least of that section of it which drinks whisky. We in Australia have long prided ourselves on the ‘steps which we have taken to safeguard and improve the health of our people. We have boasted, for instance, that our factory legislation is the best in the world. One may well ask how it is that, we have lagged behind other parts of the world in regard to regulations governing the sale of whisky. The honorable member for Wide Bay quoted a number of countries in which the period during which whisky has to be kept in bond exceeds that in Australia. Canada, is the only leading country in the world where whisky which has not been matured for three years may he placed on the market.

Mr Lewis:

– They are in a hurry to get it into the United States of America; that is why.

Mr BAYLEY:

– The honorable member for Corio (Mr. Lewis), who is an ardent prohibitionist, has put forward the suggestion that the demand for Canadian whisky from the United States of America is so great that the authorities do not insist upon its being properly matured. I cannot say how true that is. We have lagged behind in Australia for the reason that until recently we have not been a whisky-producing country. We had a similar experience with regard to lager up to, and including, the year 1914. Until then by far the greater quantity of bottled beer and lager consumed in Australia was imported. The ships of the Nord Deutcher line used to visit Australia regularly, and their holds contained large quantities of pilsener, munich, bock, and other light beers, for consumption here. The war taught us that we could make lager in Australia equal to anything manufactured abroad, and at the present time most of the lager consumed in Australia is locally made. The result is that there has been an increased demand for a section of our primary produce. When the figures relating to the importation into Australia of lager and light beer were put into my hands, my interest in the subject was aroused, and I went to the library, where I consulted the Canadian Y ear-Booh. I found that, as a result of the increased demand for Canadian whisky, the distilleries there consumed last year no less than 4,000,000 bushels of grain. If the Minister accepts this amendment, as I feel sure he should, we shall be able so to improve our locally-manufactured whisky that the public will not desire to drink the imported product. At the present time the public is not satisfied with Australian whisky. There is no more discriminating consumer than the whisky drinker. Honorable members know that in every city in Australia whisky drinkers will take their patronage from one hotel to another in order to obtain spirit which is true to label. The chief object of this amendment is to improve the standard of the whisky manufactured in Australia. I am sure that the honorable member for Corio (Mr. Lewis) will agree with me that if we aTe to consume whisky in this country it ought to he Australian whisky, the making of which provides employment for Australian workmen, and a nae for Australian primary produce. By improving the standard of Australian whisky we shall not only increase its market in Australia, but find for it fresh markets in the East. That is whyI said that the Minister for Customs himself might well have moved this amendment. The Minister, right throughout the defence of the tariff schedule, has taken the stand that the granting of increased protection would develop and promote the efficiency of Australian industries. I need quote only a few examples to show that, where Australian industries have proved really efficient, the public have supported them most generously. For example, 95 per cent. of the boots and shoes consumed in Australia are of Australian manufacture. Why? Because the price is right, and the quality is right. Of the rugs and blankets used 93 per cent. or 94 per cent. are locally made, again because the price and quality are right. Nearly 99 per cent. of the soaps used in Australia are made here ; no one can complain of their quality; no one can complain of the price. Similarly, practically all the sauces and pickles used in Australia are now made here. At one time we imported large quantities of pickles made by Crosse & Blackwell and Morton, but we ore now satisfied with our own product. We cannot induce the public to consume Australian whisky unless the quality is satisfactory. Whisky which has been matured for only two years will not satisfy the public taste. In the interests of the consumers and of the primary producers, I urge the Minister to extend the period to three years. This will work injustice on none, and confer a benefit on many.

Mr.FORDE (Capricornia - Minister for Trade and Customs) [2.43]. - I have listened with interest to the speeches of the mover of this motion and those who have supported it, but the Government proposes to retain this portion of the schedule as it stands, and is prepared to refer the question of the proposed increase in the period of storage in wood from two to three years to the Tariff Board for public inquiry and report. Sections 11 and 12 of the Spirits Act 1906-23, are as follow : -

  1. After the first day of January, one thousand nine hundred and eight, no imported spirits (other than gin, Geneva, Hollands, schnapps, or liqueurs) shall be delivered from the control of the customs for human consumption unless the Collector of Customs for the State is satisfied that’ the spirits have been matured by storage in wood for a period of not less than two years.
  2. Spirits (other than gin, Geneva, Hollands, schnapps or liqueurs) distilled in Australia shall not be delivered from the control of the customs for human consumption unless they have been matured by storage in wood for a period of not less than two. years.

Provided that this section shall not come into operation till the first day of January, one thousand nine hundred and eight.

The act was assented to on the 12th October, 1906, but due notice of the proposed change was given. On the 1st January,1908, the provision became operative that whisky must be stored in wood for two years. That gave to distillers fifteen mouths’ notice of the proposed change. By this amendment it is proposed to bring about the change overnight, without notice, and with disastrous results to the small distilleries. Before that no period was stipulated. That action was taken by the Government of the day under this act after the Royal Commission on Customs and Excise Tariffs had made an inquiry into spirits and the distillation of spirits. That body recommended -

Whisky distilled wholly from barley malt by the pot still or similar process at a strength not exceeding 35 per cent. over proof, matured by storage in wood for a period not less than two years.

Mr McGrath:

– What is the date of that report?

Mr FORDE:

– 1906. This was the last public inquiry about spirits. Before making another change, the Government proposes a public inquiry by the Tariff Board. The following is a further recommendation of the commission : -

Blended whisky distilled partly from barley malt and partly from other materials containing not less than 25 per cent. of pure barley malt spirit (which shall have been separately distilled by the pot still or similar process at a strength not exceeding 35 per cent. over proof), the whole being matured by storage in wood fora period not less than two years.

The Government is prepared to refer this proposal to the Tariff Board immediately for investigation and report. What objection can there be to that? We have been criticized in the past for not referring such questions to the board. Any hasty action at this stage may cause repercussions. Everybody connected with the trade is not in favour of the amendment, because I have received a telegram from Mr. Bird, Acting Collector of Customs, Adelaide, as follows : -

Milne opposed toany increased maturity period Australian whisky stop Adelaide Wine Spirit Company Hackney recently enlarged plant and now distilling whisky approximately one thousand gallons weekly stop Company says any increase maturity period would mean serious setback to them.

The arguments that have been put forward this afternoon require examination. I am not an expert in whisky, and I think it well to refer this proposal to the Tariff Board so as to give all sections of the trade an opportunity to place their views before the Tariff Board, and to give the board itself an opportunity to examine the representatives of Milne’s of South Australia, and the other distillery that is apposed to an extension of the maturity period. Those who favour the amendment are United Distilleries Limited, embracingCorio Distillery and the Federal Distilleries which are putting a 5-year-old Australian whisky on the market. Milne’s sell a 2-year-old whisky. If the amendment is carried, it will put them out of the market for a year, and play into the hands of the combine.

Mr Lyons:

– How long will the inquiry take?

Mr FORDE:

– I shall ask the board to treat this as an urgent matter. The two years’ term was fixed on the advice of the trade and of experts at the time, and although it has been stated that certain countries favour a three-years’ period of storage in wood, Canada has adopted a two-years’ period. In 1906 the experts considered that a two-years’ period was sufficient. Since then no representations have been made for an alteration in the period, and no evidence has been forthcoming as to the necessity for any change. This proposed amendment was put in my hands a clay or two ago, and neither the department nor myself have had time to examine it thoroughly. In those circumstances we do not feel inclined to accept it. If this amendment were accepted, section 12 of the Spirits Act would have to be altered, because it would have to apply to imported whisky as well as to Australian-made whisky. Therefore, the question whether it should apply as well to Australian brandy and rum would also have to be considered. No maturity con dition is imposed on gin, because it does not contain the natural ingredients which occur in brandy, whisky, and rum, and necessitate the spirit being matured. In the case of whisky, brandy, and rum, the spirit or part of the spirit used is distilled at a comparatively low strength in order to retain those elements in the materials which give the characteristic flavour of brandy, whisky, or rum as the case may be. It is the presence of these elements in the spirit which necessitates maturing. The Government considers that the Tariff Board should make an investigation so as to determine whether the condition of maturity should apply to brandy and rum as well as to whisky.

Mr Lyons:

– Have not the States power to regulate this matter?

Mr FORDE:

– Yes. Western Australia insists upon a period of maturity of three years. In the other States the period is two years. If the period is fixed at. three years, we will prevent Milne’s from selling for a year, and we will render more difficult the establishment of new distilleries to compete with the large distilleries which are able to carry large stocks, and to mature them for three years. In other words, the Opposition, from which the amendment came, favours the monopoly in this case as against the small man. The Government desires all sections of the trade to have an opportunity to express their views in public before the Tariff Board, and I assure honorable members thatevery consideration will be given to the board’s recommendation.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

.- I have listened with a great deal of amusement to the most amusing speech of the Minister, and particularly his case for the smaller distilleries, which he said may be inconvenienced if compelled to mature whisky in the wood for more than two years. If at some future date a small distillery informs the Minister that it desires a maturity period of six months, is he going to accede to its request?

Mr Forde:

– The period is laid down in the act.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– The amendment of the honorable member for Wide Bay (Mr. Bernard Corser) has regard not for

Milne’s or any other small distillery, but for the public health. We do not want in the spirit trade the position that existed in the wine trade when unmatured wine, known as “pinkie,” was placed on the market, and caused all sorts of disorders both mental and physical. I am a whisky drinker, and I have never heard of Milne’s whisky. I do not care to drink whisky that has been matured for only two years. I should not like to have it in my home to offer to my guests. I suggest to the Minister that in referring this proposal to the Tariff Board, he is shelving his responsibility. During the tariff debate he adopted in some instances the recommendation of the Tariff Board, and in other instances rejected it. This is one of the occasions on which I would urge him to accept the decision of the committee. The health of the community must be safeguarded, and we can do that to some extent by increasing the maturing period of whisky spirit stored in wood to three years.

Mr McGRATH:
Ballarat

.- The Minister based his argument on a report made 25 years ago.

Mr Forde:

– We wish to obtain an uptodate report.

Mr McGRATH:

– At that time the members of a commission recommended that a period of two years was sufficient for whisky to be matured in wooden vessels. We.are now asked to abide by that recommendation. I have no brief for any manufacturer. This proposal affects the public health. No whisky drinker would consume whisky knowing that it had been matured for only two years. No spirit manufacturer in Australia will benefit financially if this amendment is accepted. Its object is to improve the quality of the whisky on the Australian market. I cannot understand why the Minister does not, without further discussion, accept the amendment and make the period of maturity three years. He has given no reason for accepting the request of the small distillers to fix the period of maturity at two years.

Mr Watkins:

– Other manufacturers ask for a period of three years.

Mr.McGRATH. - Those manufacturers who are anxious to retain and to increase their trade will certainly stand behind the Minister if he accepts the amendment.

Mr BERNARD CORSER:
Wide Bay

– The Minister has raised no argument against the amendment. He has not said that he disagrees with it. He has merely stated that the amendment, if accepted, would have to apply to imported whisky, but let me point out that whisky imported here would probably have been matured for three years. In Great Britain whisky is not allowed to be sold unless it has matured for three years, and, therefore, by the time it arrives here it must have reached the required maturity. We should not agree to a period of two years just because an old act which the Minister has dug up prescribes it. I sincerely hope that ho will accept the amendment.

Amendment agreed to.

Progress reported.

page 822

DEBT CONVERSION AGREEMENT BILL (No. 2)

Second Reading

Debate resumed from the 13th October, (vide page 654) upon motion by Mr. Theodore -

That the bill be now read a second time.

Mr LYONS:
Wilmot

.- I regret that the House is called upon to deal with a measure of this character. The origin of the debt conversion plan was a financial position so desperate that it was perfectly clear to all who examined it that every section of the community would be called upon to make some financial sacrifice. Those of us who had to face the facts as far back as the Premiers Conference of August 1930, recognized that investors in government stock, in common with others, would have to forego something; the interest burden of the Governments would have to be reduced in order that relief might be given to the taxpayers generally. When, subsequently, definite sacrifices were imposed by Parliament upon taxpayers, old-age and invalid pensioners, war pensioners, and the public servants of the Commonwealth and the States, the fact became increasingly obvious that those who were receiving interest from the Governments of Australia, would have to accept less than they had hitherto received. Before the Prime Minister left for Great Britain, I advocated at the Premiers Conference in

August, 1930, that steps in that direction should be taken. The plans considered by the Federal and State Ministers in conference in May and June of this year included a proposal for the conversion of the public debt, and, then, for the first time, the application of compulsion was advocated. The conference was agreed that the reduction of the interest burden was essential, that it could be achieved only by conversion, and t’hat the conversion -must be compulsory. At that stage, the Leaders of the Opposition in the -Senate .and the -House of Representatives were inn-ted to confer with the Federal a-nfl ‘State Ministers.

Mr Scullin:

– It is not correct to say t’hat we were agreed that the conversion -should be on a compulsory basis.

Mr LYONS:

– Even at that stage there w.as a .very definite majority in the -conference committed to the principle .of -compulsion.

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND · CP

– Not to compulsory conversion. The conference was in favour of -specially taxing those who did not convert.

Mr LYONS:

– The relative merits of compulsory and voluntary conversion were being discussed when the Leaders of the Opposition were admitted to the conference. “We strongly advocated -thi.’ adoption of the- voluntary principle, expressing our conviction that the ‘bond holders, who are mainly representative taxpayers and citizens, would, if property appealed to, come to the assistance of the Commonwealth and the, States. Sub- sequent to our intervention, the con’ference adopted the principle of voluntary conversion, and the result of .the appeal to the conn try amply justified our faith. The Treasurer (Mr. Theodore) has said that the response .by bondholders was » wonderful achievement, and I feel sure that the proposal now put forward - not by this Government -alone, -but by all the Governments of Australia - will do much to mar the remarkable success of the Conversion appeal.

Mr Thompson:

– -Behind it all .the time was the threat of taxation.

Mr LYONS:

– There was never any threat of compulsion after the voluntary system had been adopted.

Mr Thompson:

– It was understood that compulsion would be resorted to if necessary.

Mr SCULLIN:
YARRA, VICTORIA · ALP; FLP from 1931; ALP from 1936

– is’o one had any doubt about it.

Mr LYONS:

– A few moments ago the Prime Minister said that compulsion was not the policy of the conference; now, he says that nobody had aMV doubt about it.”

Mr Scullin:

– I said the conference never favoured compulsory conversion. We did discuss the taxation of the unconverted stock.

Mr LYONS:

– That makes the position to-day still more difficult. When the conference adopted the voluntary plan, there was no intention that compulsion should be applied to those who dissented ; but some reduction in the interest return by taxation might have been contemplated. The Treasurer was right in emphasizing ‘that many who freely and cheerfully converted, might well have held back and waited for automatic conversion. But -one of the most striking features -of a wonderful achievement -was that, of the £557,000,000 involved, £510j000,000 was converted with tha direct and positive consent of nearly 250,000 holders. The legislation now proposed will destroy some of the benefits that otherwise .would be derived from that achievement, and ii is a pity that the bill has, been introduced.

Mr Scullin:

– It is. a pity that all did not convert

Mr LYONS:

– The Treasurer said truly, that nobody expected a i.00 per cent, conversion; probably none of those at the conference were so optimistic as to believe that 90 per cent, of the .stock would be converted, whereas the conversions represent 97 per cent, of the total. When the success of the loan was known, the national appeal executive, consisting of the Prime Minister. Sir Hebert Gibson, and myself, decided to make a further appeal to the dissenters, pointing out what other bondholders had done, and asking the remainder, in the interests of the nation, to revoke their first .refusal. We emphasized the fact -that many of those who had already converted were probably making at least as great a sacrifice as was asked of those who had dissented’. ‘But,- unfortunately, -while money was being < expended . on that appeal, the

Premiers, again in conference, decided to apply compulsion to the dissenting minority. That diminished the value and force of our final appeal. Nevertheless, according to the figures quoted by the Treasurer, 2,700 of those who had dissented, holding £2,565,000 worth of stock, changed their minds. The Treasurer stated that the small percentage of dissentients vindicated the voluntary appeal. No other policy would have been justified. Morally, and patriotically, the right and only practicable course was that which the conference adopted. Therefore, I regret the bill now before the House. I am not perturbed about the interests of the dissenting individuals and institutions My concern is that the Government is committing a breach of contract.

Mr Gabb:

– Not one government, but seven.

Mr LYONS:

– I have already said that this legislation is the decision, not of one government, but of all the governments of Australia.

A breach of contract on the part of the governments of Australia must inevitably have the effect of depreciating the value of the security held by those who converted. It must make for the destruction of confidence, which, in turn, will render it difficult in the future for governments to raise money by loans. It will not be very many years before the first maturity date of the new securities is reached. Anything that makes it difficult for governments to meet the situation then must depreciate the value of the security then maturing. Therefore, a breach of contract to-day will not only do an injustice to those who found themselves unable to convert, but will «also do a definite injury to those who have converted. During t.h.e course of the Treasurer’s speech the honorable mem ber for Adelaide (Mr. Yates) interjected, ‘ The Government would not have been asked to do more than that”, referring to the Government honouring its compact. The Treasurer replied -

No, it would not, but a nian may, though asking for no more than the honouring of a compact, be guilty of the grossest selfishness when, by refusing to convert, he fails to accept his proper share of the national sacrifice. “From that it would appear that those who did not convert - and we must put them into one class, because we cannot dis tinguish one from the other, as we do not know the circumstances - have displayed a certain amount of selfishness, which gives the Government justification for breaking its contract. Surely that is a new theory in morals and in legislation. When we raise loans upon the market we deal with certain individuals from whom we borrow money, and with whom we make a contract. Whether any of these is a selfish person who wants his last shilling out of the Government, or is generous enough to take less than the Government offers for his money, make, no difference to the binding nature of the compact into which the Government enters.

Mr Maxwell:

– Have we any right to assume that dissentients are selfish?

Mr LYONS:

– We are not justified in assuming selfishness on the part of these people. I know that the Treasurer has made an unsuccessful effort to obtain an analysis showing those who have converted some portion of their holdings, and have refused to convert the balance. If we could obtain that information it would disclose that there is a large number of such persons. I know of an instance in my own electorate. A man and some members of his family interviewed me, stating that they had invested their money in practically every loan that has been launched in Australia in recent years. They were advising the Treasurer that they desired to convert every holding, except one small amount that fell due in 1931. They were forced to do that because of the present state of their finances. Many others arc similarly situated. Are such to be branded as selfish individuals? I admit that there are a number of selfish people, but that does not justify the Government in breaking the bond into which it entered.

I know that, in order to soften the blow, the Government is endeavouring to meet necessitous cases. Yet, after all, it merely proposes to give back to these people some portion of their own capital. We are making a virtue of this. It is humiliating for men and women who, throughout their lives have saved with the object of providing for their old age, to be compelled to come, cap in hand, to the Government when their money is due, explain their circumstances, and plead that some of the savings to which they are legally entitled shall be returned to them. The Government recognizes the injustice of the procedure, and is doing what it can to overcome the difficulty.

The Treasurer stated that those who criticized the proposal before Parliament should suggest alternatives. The action of the Government has made it very difficult to do so., as it has destroyed confidence. However, the Treasurer himself indicated a solution. The honorable gentleman stated that the sinking fund might be utilized to relieve necessitous cases to the extent of £1,250,000 this year, and £1,000,000 next year.; that if more were required it might be possible to come to some arrangement with the banks about it. To-day the honorable gentleman stated that the sinking fund commissioners are prepared to find £2,000,000 this year instead of £1,250,000. That will ease the position somewhat. The Treasurer pointed out that, under existing conditions, it is impossible to go on the market and raise the £9,600,000 that is unconverted, and that will fall due within the next sixteen months. I recognize that difficulty, and I know its cause. Nobody would be optimistic enough to think that, with legislation such as is before us, it would be of any use to go on the market in the ordinary way. Had a different policy been followed I should have no doubt about the position. I look back to the time when the Commonwealth Government launched its conversion loan in 1930. Then the Treasury was advised by the banks that it was more than doubtful whether the money would be forthcoming. The banks pointed to the market position, and declared that anybody who wanted to invest money in government shares could do so more profitably by buying upon the open market than by investing in the proposed conversion loan. The loan was launched ; an appeal was made to the patriotism of the people, and the loan was oversubscribed to the extent of several million pounds.

Mr Gabb:

– The people then had something to inspire them.

Mr LYONS:

– They had, and confidence had not then been destroyed. I believe that that success could be re peated, despite the opinion of the banks, whose judgment has been astray on more than one occasion. I am confident that the Government could, within the next sixteen months, raise the £9,600,000 that is necessary to meet its obligations to bondholders.

If we could obtain a couple of million pounds each year from the sinking fund, and it is a proper purpose to which to apply that money, it would all go to improve the position. We should then require:, in addition, in the next two financial years, only £5,600,000. It is suggested, and I know there is something behind the suggestion, that, added to what could be obtained from the sinking fund commissioners, assistance might be had from the banks. Why could not the Commonwealth Savings Bank take over some of the smaller holdings of our investors and treat them as deposits. If the bank could not meet the bonds on their due date, it could meet a substantial proportion of them, and pay the rest within a reasonable time. I am confident that if we met the problem fairly, squarely, and honestly, we could obviate the necessity of committing this breach of contract. It is important to re-establish confidence in governments in order to make it easier in future to raise the money needed to meet commitments, particularly having regard to the paying off these debts at maturity. The appreciation of holdings which would follow a restoration of confidence in governments is a matter of great importance. I understand that there is a sum of about £7,000,000 available in various sinking funds. I realize that there are certain commitments for which the Government is morally and legally liable, but I should say - and I speak without the exact figures before me - that there would still be at least £3,000,000 available in each of the next two years. That would leave only about £3,600,000 out of the 69,600,000 to he raised. If the Government were to appeal for that sum, explaining what had been done, there would, in my opinion, be no difficulty in getting itEven that amount-might not be necessary, because I imagine that the banks would be able to find some money. I am prepared to trust the people of Australia to stand up to their obligations.

M r. Theodore. - All the money that the banks can find is needed to provide employment for those who are out of work.

Mr LYONS:

– The money would not be lost; the bondholders who received it would re-invest it in ways that would probably provide even more profitable employment for those who are out of work.

Although I do not want to see this measure placed on the statute-book, I do not oppose it on party grounds. A few months ago legislation was introduced into this Parliament for the voluntary conversion of our internal indebtedness. Investors were invited to convert their holdings into new stock hearing lower rates of interest. There was no hint or threat of compulsion in any shape or form. They responded nobly; yet within a few weeks of the passing of that legislation we are asked to amend it. Let me quote the actual words of clause 3 of the schedule, so. that honorable members may realize what they are asked to accept in this bill. That clause provides -

Notwithstanding anything in the aboverecited Debt Conversion Agreement or in tho said act contained, every holder of existing securities which have not been converted into new securities in accordance with the provisions of the said act shall, notwithstanding that any holder of those existing securities may have signified or may signify dissent, bc deemed to have made an application in accordance with section 0 of the said act for their conversion into now securities, and they shall hp. deemed to be so converted accordingly.

I do* not know, who is responsible for the wording of the clause; but it is extraordinary that those who have intimated that they do not desire to convert their holdings are told by this bill that their very intimation to that effect is to be regarded as an application to convert, and that their holdings will be converted accordingly. Surely no Parliament was ever asked to pass such an extraordinary measure! I give the Government credit for acting conscientiously in this matter. Probably, it feels that no other’ course is open ; but I suggest that, in the drafting of the measure, words- could have been used which would not have placarded to the world the breach of faith of which Australia will be guilty if this measure becomes law. . .

Mr Theodore:

– I assure the honorable gentleman that the Governments of Australia gave this matter earnest consideration. The representatives of those governments sat for three weeks in Melbourne discussing this problem. After a decision had been arrived at, the phraseology was left to the draftsmen.

Mr LYONS:

– The draftsmen have accurately set forth the decisions of the conference; I regret that the Government did not scrutinize the wording of clause 3 more carefully before submitting the bill to Parliament. Even if the Parliaments of Australia are committed to the plan, and this thing has to be done, some other words ought to have been used.

Mr Theodore:

– The honorable member would like to see the intention camouflaged ?

Mr LYONS:

– I want to see the proposal defeated.

Mr Gabb:

– The clause truthfully sets our. the intention of the Premiers.

Mr LYONS:

– The clause to which I have referred legalizes default and repudiation. When I was Acting Treasurer, the honorable member for Bourke (Mr. Anstey) made certain proposals which throughout Australia were described in the press and. elsewhere as repudiation. So strongly did the people feel on the matter that committees were formed all over Australia in opposition to his proposals. What were those proposals? Did the honorable member for Bourke intend that the Governments of Australia should refuse to pay their debts? He did not. His proposal was that the repayment of loans should be deferred for twelve months, and that in the meantime the existing rate of interest should be paid. He further proposed that arrangements should be made with the banks to meet necessitous cases. As I have said, his proposal was roundly condemned. It was regarded as a breach of contract, repudiation of the worst type. As a result of the publicity given to his proposal, pledges were given by all the Governments of Australia when the £28,000,000 loan was launched that they would stand to every part of the new contract. Those pledges were signed by the Premiers of all the States, the representatives of the Commonwealth Government, and many Opposition Leaders.

All governments and all parties were associated in condemning the repudiation proposal of the honorable member for Bourke (Mr. Anstey). But the decisions of the governments of Australia at the Melbourne conference out-Anstey Anstey. If the proposal of the honorable member for Bourke was repudiation, a breach of contract, what shall we say of the proposals contained in this measure? I oppose this bill on the same ground that I opposed the proposal of the honorable member for Bourke. I oppose it because I think that it is not only wrong, but particularly foolish. The difficulties which governments will have to face in the future will necessarily be great; but if this measure becomes law those difficulties will be increased one-hundred fold. It will then be almost impossible for any government, either Federal or State, to raise the money necessary to carry out’ any reproductive enterprise - the only purpose for which new loan moneys ought to be expended - or to meet our commitments in the future.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– Is the proposal contained in this bill a part of the Premiers plan ?

Mr LYONS:

– Compulsory conversion is not a part of that plan. If, as the Treasurer (Mr. Theodore) has said, the position is so acute that on the open market we could not raise £9,600,000 to pay off the debts of governments, I suggest that if this bill becomes law, those whom to-day we laud as patriotic citizens in that they have converted their holdings, will be left lamenting on the dates that their securities mature. I appeal to the Government to reconsider its decision.

Debate (on motion by Mr. Paterson) adjourned.

page 827

SERVICE AND EXECUTION OF PROCESS BILL

Bill received from the Senate, and (on motion by Mr. Brennan) read a first time.

page 827

AUSTRALIAN INSTITUTE OF ANATOMY AGREEMENT BILL

Bill received from the Senate, and (on motion by Mr. Scullin) read a first time.

page 827

ADJOURNMENT

Commonwealth Oil Refineries Limited - Absence of Mr. Speaker - Clothing Trade - Duty on Printing Machinery - Judges’ Salaries and Pensions - Wool Freights - Buffalo Fly - Unemployment Relief.

Mr SCULLIN:
Prime Minister · Yarra · ALP

. - I move -

That the House do now adjourn.

My attention has been drawn to a paragraph in the Sydney Daily Telegraph in which I am reported to have said, in connexion with the Commonwealth Oil Refineries Limited, that “ even when the general manager was dismissed, the Government was not consulted “. In fairness to Mr. Bird, I desire to contradict that statement. I did not say that the general manager had been dismissed; I knew that that was not the case. The term of Mr. Bird’s appointment had expired, but the Government was not notified of that fact, nor of the appointment of his successor. What I did say was that the Government was not even consulted or notified when a change was made in the general managership.

Mr MORGAN:
Darling Downs

– I desire information and guidance upon a matter that has come under my notice which directly affects this House, and I feel certain that other honorable members are in the same position. I understand that Mr. Speaker (Hon. Norman Makin), who is absent from the House to-day, and purposes to be absent next week - indeed, until this House goes into the short recess that is contemplated - is electioneering in his own State. Whether Mr. Speaker is electioneering in South Australia on his own behalf, or on behalf of a candidate for a seat in the local legislature, I am unable to say; but is Mr. Speaker entitled to absent himself from this chamber when the National Parliament is in session, in order to take a hand in the party political affairs of a State?

Mr Gabb:

– He has a good record of attendance in this chamber.

Mr MORGAN:

– That is not the point. The question with which we are concerned is whether Mr. Speaker, whoever he may be, or to whatever party he belongs, should deliberately ally himself actively with party politics in such a way as to bring opprobrium upon himself and upon this House. An explanation is called for, so that members may hear what is to be said on the subject, form their own opinions, and, if necessary, proceed further in the matter.

Mr BRENNAN:
AttorneyGeneral · Batman · ALP

– Some time ago a number of articles dealing with sweating in the clothing trade, particularly in Melbourne, appeared in the Melbourne Age. These disclosures excited some controversy in this Parliament, and they were naturally of interest to the Government. By direction of the Prime Minister (Mr. Scullin), I have obtained a report upon the subject, from the Industrial Registrar of the Commonwealth Arbitration Court, and I shall lay that report upon the table in the Library for the information of honorable members. Not desiring to detain the House at the present juncture, I merely wish to state that the report deals with the complaints that have been circulated, in respect of which much evidence has been adduced, and it also indicates certain suggested remedies.

Mr Fenton:

-Have similarinquiries been made in other States?

Mr BRENNAN:

– The point at issue has not arisen in other States in an acute form. The report deals exclusively with the complaints in Melbourne, and it serves to emphasize the manner in which the Commonwealth Legislature is hampered through its limited constitutional powers. The people are in the anomalous position of having two legislative authorities, Federal and State, endeavouring to grapple with this problem, neither being able to deal with it effectively. There remains, however, an extensive field over which State legislatures may operate, and which has not yet been touched. I am pleased to note, in that regard, that a bill is now before the Victorian Legislature to deal with the particular matter that I have mentioned. I am glad, also, to learn that the appropriate union is exercising vigilance to see that the awards are being observed. I have only to add that the Government will take the matter up further on fuller consideration of the legislation now awaiting the determination of the Victorian Parliament.

Mr PRICE:
Boothby

.- For a considerable time I have been awaiting a favorable opportunity to bring forward a customs case that has been causing considerable concern in South Australia. Some time ago, News Limited, Adelaide, gave an order for a printing press and conveyors from London, and the company has been called upon to pay £917 in customs duty. This matterhas been mentioned from time to time in another place, and although Senator Daly has made favorable comment upon it, and has promised to bring the matter before the Cabinet, the Minister for Trade and Customs (Mr. Forde) has refused to make a refund of any portion of the duty, on the ground that the printing machinery concerned could be manufactured in Australia. I am not sure whether the Minister in another place has taken the matter to the Cabinet; but the position, so far as I am aware, remains unchanged. On the 5th August, 1927, News Limited placed an order with a British firm for a complete new press, including conveyors, to be delivered within eight months. On the 12th September, 1 928, the press had been delivered in ten shipments, and on the 15th October, 1928, the conveyors arrived at Port Adelaide. The press and the conveyors, of course, were placed in bond. On the 23rd June, 1930, News Limited paid under protest £916 in duty. On the 16th July, 1930, the matter was taken up with the Customs Department, which replied that Scott and Company Proprietary Limited were manufacturing machines of this nature at the date of the importation. On the 28th July, a reply was sent to the department that Scott and Company, who were really Gibson, Battle and Company, were not making conveyors about the time of the importation,but were merely contemplating doing so. As a matter of fact, this particular firm actually borrowed the drawings from News Limited, in order that they might put in tenders for the conveyors. Further, we find that the conveyors were ordered of necessity twelve months earlier than this. The manufacture of printing presses and conveyors is a long job. On the 8th November, 1930, the matter having again been brought before the Minister, he again refused. In March, 1931, Nathan, Curnow and Cocks were unable to get the decision reconsidered. In June, 1931, the Minister for Customs refused a renewed application, the reason stated by the Minister being that in June, 1928, Scott sud Sons Proprietary were prepared to accept orders for conveyors. The Minister apparently overlooked the fact that the order for the whole press was given twelve months earlier, that the conveyors were specially made for this order in London, and waited there until the completion of the whole plant. A reference to Gibson, Battle Proprietary Limited, will prove the truth of the chief fact relied on by News Limited, namely, that Scott and Sons Proprietary were not manufacturing such machinery at the time when this was ordered. Some of the other newspapers in Australia, such as the Sydney Morning Herald and the Adelaide Register, actually imported these machines free. We should not penalize the State of South Australia, and particularly this firm, to the extent of £916.

Mr Forde:

– Why did not the honorable member let me know that he was going to bring this matter up on tb adjournment ? I could then have had the file before me.

Mr PRICE:

– I was very glad to get this opportunity of raising the matter. We do not get many chances to speak.

Mr Forde:

– As a member of the Opposition, the honorable member can speak a hundred times a day if he likes.

Mr PRICE:

– - I had these papers in the drawer of my desk, and 1 thought it a favorable opportunity for raising the question.

Mr Forde:

– There is a complete reply to the honorable member’s case; but 1 have not the papers here.

Mr PRICE:

– If the Minister has a complete reply, I hope he will let me have it. He has shown himself sympathetic enough in other directions.

Mr Forde:

– 1 am always sympathetic towards those who have a good case; but, when it comes to giving away hundreds of pounds of revenue, the Government must be careful.

Mr PRICE:

– News Limited is a firm which contributes heavily to the revenue. The increased duty on newsprint cost it over £3.000 last year. There is no free market in the State for newspapers, and News Limited cannot pas3 on tho imposition. A newspaper firm cannot sell papers at the fraction of a penny. The next step would be to sell at 2d., which is not at present commercially feasible. In all the circumstances, it should be seen that this application is full of merit, and that the refusal to entertain it is justified by no consideration, either of previous practice or of protective policy. I trust that Cabinet will reconsider the matter.

Mr Scullin:

– If the honorable member forwards a letter making that request, I shall attend to it.

Mr PRICE:

– If I thought that the Prime Minister was serious I should do so; but I believe that better results can bc obtained by raising these matters on the adjournment. T ask the Prime Minister to give favorable consideration to my request.

Sir RIORDAN:
Kennedy

.- For the information of honorable members, and of the workers whom I represent, I should like the Prime Minister (Mr. Scullin) to make public the replies received from the judges to the requests that they should accept a reduction of their salaries and their pensions.

The other evening I raised the subject of freight charges on wool from Australia to Great Britain, stating that, in my opinion, the freights were too high. . I suggest that the shipping company might be induced to do the fair thing by the producers if the Postmaster-General’s Department used the subsidies paid on mail contracts as a lever in the negotiations.

I again urge that steps be taken to deal with the buffalo fly pest in Northern Queensland. This matter may not seem serious to some honorable members, but it is of the greatest importance to cattlemen in the north, particularly to those in a small way. The big cattle-grower can work his cattle down to South Australia, and get them in as store cattle to be fattened next year ; but the man with 200 or 300 bullocks to be put off each year has no chance of getting them away. As his area is limited he must destroy the increase, or give them away for practically nothing, because his land will not carry them.

I desire to know what has been done by the secretariat appointed by the Premiers Conference to go into the matter of unemployment. Have any schemes been submitted from Queensland.? We were given to understand some time ago that steps were being taken to relieve unemployment. We know that. £3,000,000 has been made available for the assistance of wheat-growers, but the unemployment situationis so serious, with men tramping all over the country looking for work, that something should be done. The sum of £3,000,000 is to be devoted to the payment of a bounty on wheat to bring the price up to 3s. a bushel. I noticed in to-day’s press that the price of wheat in Sydney is now 2s.11d. a bushel, so that, if the bounty is to be paid on this year’s wheat, the bankers will have to find only 1d. a bushel. If this amount is not made available to the farmers, it should be diverted for the relief of unemployment, and to my knowledge there are plenty of schemes, independent of any secretariat, capable of providing interest and sinking fund. I trust that these matters will receive early consideration.

Mr SCULLIN:
Prime Minister · Yarra · ALP

– The matters mentioned by the honorable member for Boothby (Mr. Price) will be attended to by the Minister for Trade and Customs (Mr. Forde), who had no warning that the honorable member intended to speak on the subject this afternoon.

No communication has yet . been received from the judges in reply to the letter forwarded to them by myself.

I am expecting a report on the matter of wool freights.

The Minister for Home Affairs (Mr. Blakeley) will deal with the buffalo fly question.

A number of proposals, including some from Queensland, have been submitted to the Unemployment Secretariat. As the House has been informed on many occasions, the decision rests with the Commonwealth Bank Board to whom application for advances must be made.

The honorable member for Darling Downs (Mr. Morgan), in commenting upon the absence of Mr. Speaker, the honorable member for Hindmarsh (Mr. Makin), has lectured honorable members upon their duty to attend sittings of the House. 1 find that, out of 198 sittings, the honorable member for Hindmarsh has attended on195 occasions and the honorable member for Darling Downs on 154 only. Verbum sat sapienti.

Question resolved in the affirmative. House adjourned at 4.7 p.m.

Cite as: Australia, House of Representatives, Debates, 16 October 1931, viewed 22 October 2017, <http://historichansard.net/hofreps/1931/19311016_reps_12_132/>.