House of Representatives
17 May 1933

13th Parliament · 1st Session

  1. House of Representatives
  2. 13th Parliament
  3. 1933

Mr.Speaker (Hon.G. H. Mackay) took the chair at 3 p.m., and read prayers.

page 1442

WIRELESSBROADCASTING

Additionaltransmitting Station

Mr.ARCHDALEPARKHILL (Warringah - Postmaster-General ) [3.2] . - by leave -I have already indicated that it is the Government’s determination to press forward, with all expedition, the substantial expansion of the National Broadcasting Service, but before embarking on the construction programme, which had to be held in abeyance because of the serious condition of the national finances, a review of the whole of the foundations of the technical policy of construction has been undertaken. In this study, the introduction of the long wave into the broadcasting system has been exhaustively re-examined. While it has been clearly understood by every technical authority since the inception of broadcasting that the attenuation of long waves is considerably less than that of medium waves - or, to express the matter in a different form, whilst the coverage power of frequencies in the longwave band is much greater than that of frequencies inthe medium wave band - there are nevertheless numerous disadvantages to the technical service and listeners, particularly in Australia, in the useof loug-wave transmission. All therelevant factors have had to be most carefully considered and weighed, in order to determine whether or not the disadvantages might be more than compensated by other factors favouring long-wave practice.. In the protracted investigations which have been made, the knowledge and experience accumulated in all progressive broadcasting countries have been availed of, and a considerable amount of original research related specifically to Australian conditions has been undertaken. There remains a certain amount of investigation, which it is anticipatedwill be completed within a week or two, before the department will be in a position to announce its decision concerning the use of long waves.It is, however, beyond doubt, as a result of the studies, that the erection of certain additional medium wave stations will be needed in any event, and will provide the best means of affording service in a number of important areas. It has therefore been decided to proceed at once with the calling of tenders for medium wave stations to serve the following districts, viz. : -

TheTownsville and Charters Towers area, Queensland;

The Grafton andLismore area, New South Wales;

The Gippsland area, Victoria; and

The Northern part of Tasmania.

The notice inviting tenders for those stations will appear in next week’s Commonwealth Gazette.

It will be seen that certain areas, urgently requiring consideration, are omitted from the statement of districts for which medium wave stations are being ordered at this juncture. The primary reason for this is that if longwave service should be decided upon for use in the national network, it would be more appropriate to make use of that system in the territories in question. A further announcement will be made on this aspect of the matter as soon as possible, and supplementary tender schedules will be issued with the object of including the stations needed as part of the present instalment of the construction programme.

Mr.NAIRN.- Will the PostmasterGeneral state when he expects to be able to announce the calling of tenders for the regional wireless station in Western Australia? Can he inform honorable members just where the station will be erected ?

Mr ARCHDALE PARKHILL:
Postmaster-General · WARRINGAH, NEW SOUTH WALES · UAP

– I understand that the inquiries which are being made in regard to additional stations, of which that inWestern Australia will be one, are to be completed within the next ten days or fortnight. I cannot state just where the station in Western Australia will be erected

Mr BELL:
DARWIN, TASMANIA

– Can the PostmasterGeneral state where the new broadcasting station in northern Tasmaniawill be established?

Mr ARCHDALE PARKHILL:

-I understand that it will be in the neighbourhood of Launceston.

page 1443

QUESTION

MATSON SHIPPING LINE

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– Before the Easter adjournment of this House, the Prime Minister stated that the Resident Minister in London (Mr. Bruce) had opened conversations with representatives of the British and New Zealand Governments regarding the piracy of the Matson Shipping Line in the Pacific Ocean. I ask the right honorable gentleman when honorable members may expect some further information on the subject?

Mr LYONS:
Prime Minister · WILMOT, TASMANIA · UAP

– I have previously stated that the conversations which took place at Ottawa with representatives of the British and New Zealand Governments were to be continued in London. Representations recently made by Australian, shipping companies have been sent to the Resident Minister in London, but, so far, there has been no opportunity for theresumption of conversations between thethree governments concerned. Subsidiesgranted to shipping, which have the effect of restricting the operations of other shipping interests, will be one of the matters to be considered at the World Economic Conference. All that can be done to date has been done; when I have further information on the subject I shall communicate it to the House.

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QUESTION

WORLD WHEAT CONFERENCE

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Has the attention of thu Minister for Commerce been drawn to the newspaper’ report that the world conference of wheat exporting countries ha3 broken down? Is the honorable gentleman in a position to make any statement regarding the work of the conference ?

Mr STEWART:
Minister for Commerce · PARRAMATTA, NEW SOUTH WALES · UAP

– I have read the newspaper reports, but the Government has received no official communications concerning the deliberations of the. conference.

page 1443

QUESTION

BRANDING OF IMPORTS

Dr MALONEY:
MELBOURNE, VICTORIA

– I hold a portfolio which, I am reliably informed, was made in Japan, but bears no mark to that, effect. It may, at one time, have borne a printed label, but what is the use of a piece of paper that can be easily removed? This article was being offered for sale in the shop as an Italian product. I contrast it with a pair of gloves which are legibly and indelibly stamped “ Made in Scotland “ ; that mark cannot be removed without, injury to the gloves. I ask the Minister for Trade and Customs whether he will make more stringent regulations regarding the marking of imports from Japan and Germany, so that dishonest shopkeepers may not sell goods under false pretences by removing the paper tag stating the country of origin? If the present restrictions are not sufficiently definite, will lie ask the Attorney-General to assist him to make them so, and provide penalties for any unworthy citizen who would seek to mislead his customers regarding the country of origin of the goods he is offering for sale?

Mr WHITE:
Minister for Trade and Customs · BALACLAVA, VICTORIA · UAP

– It is not necessary that all goods imported should bear the mark of tue country of origin, and the regulations do not provide that stationery, among other things, shall be so branded. Other classes of goods, including textiles, must show the country of origin, and it is laid down that the marks shall be attached in as’ permanent a manner as possible. If there are cases in which that is not being done, the honorable member may bring them under the notice of the department. Action was recently taken in regard to pottery, to ensure that the mark showing the country of origin should be clearly stamped on all articles. This action was not directed against any country in particular, but was done so that buyers might know the origin of the goods they purchased.

page 1444

TARIFF BOARD REPORTS

Mr. WHITE laid on the table of the House reports and recommendations of the Tariff Board on the following subjects : -

Aluminiumware and Enamel lod ware, n.e.i., not including Stoves and Baths.

Apparel Elastic less than one inch in width and Rubber Thread.

Dry Batteries and Dry Cells

Handles of all types for Motor Car Doors.

Windscreen Wipers

Window Winders for Motor Cars

Ordered to be printed.

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QUESTION

IMPORTS FROM PAPUA

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES

– Is it the intention of Cabinet to impose a duty on copra imported from the territory of Papua, on which an export duty has already been paid ?

Mr WHITE:
UAP

– The produce of Papua comes within the terms of the Ottawa agreement, and there is no intention to impose a duty on it.

page 1444

QUESTION

SHIPPING TO TASMANIA

Mr BLACKLOW:
FRANKLIN, TASMANIA

– Is the Minister for Commerce able -to say what’ has been the effect of the partial suspension of the coastal clauses of the Navigation Act as it applies to shipping between the mainland and Tasmania? Has the relief afforded to Tasmania been at the expense of coastal shipping interests?

Mr STEWART:
UAP

– Official information in possession of the department suggests that, so far from injuring Australian coastal shipping, the partial suspension of the coastal clauses of the Navigation Act, in order to permit the carrying of tourists from the mainland to Tasmania on overseas liners, has actually been of benefit to the local shipping companies. The figures show that, for the first five months of this year, 9,500 passengers were carried from Sydney to Hobart, and the local shipping services would have been quite unable to cope with more than half the traffic offering. While there was a slight declension in the volume of passenger traffic on the regular licensed lines from Sydney to Hobart, this was more than compensated by the increased traffic on such lines on the home journey from Hobart to Sydney. The exemption from the provisions of the Navigation Act applied on the forward run from the mainland to Tasmania, and the passengers carried to Tasmania on the overseas ships largely had to make their way back to the mainland by the ordinary licensed lines. Therefore, the net result of the suspension of the coastal clauses . of the act has been that Tasmania has benefited by the increased tourist traffic to her shores, while the “Australian shipping lines have also derived a considerable advantage.

page 1444

QUESTION

IRON AND STEEL PLATES

Mr PATERSON:
GIPPSLAND, VICTORIA

– Has the Minister for Trade and Customs yet received the report of the Tariff Board on iron and steel plates classified under item 136 d, of the tariff schedule?

Mr WHITE:
UAP

– The report has not yet been received.

page 1444

QUESTION

BRITISH TRADE AGREEMENTS

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– Will the Minister for Commerce state when honorable members will be able to obtain copies of the trade agreements entered into between Great Britain and the Argentine, and’ Great Britain and Denmark?

Mr STEWART:
UAP

– Copies of the agreements are now on their way to Australia, and will be made available as soon as possible.

Mr JAMES:
HUNTER, NEW SOUTH WALES

– According to a press cable, Great Britain has entered into contracts with Norway, Sweden, and Denmark to make purchases from those countries in return for coal which Great Britain will export to them. “Will the Prime Minister say whether the Resident Minister in London is endeavouring to arrange similar trade agreements with European countries, in order to ensure a market for our coal?

Mr LYONS:
UAP

– Any agreement which might he entered into by the Commonwealth Government with the governments of other countries for the sale of Australian products would be entered into by the Government, not by the Resident Minister in London.

Mr James:

– I referred to the Resident Minister in London in his capacity as agent for this country.

Mr LYONS:

– The Resident Minister in London will do everything in his power to carry out any decision of this Government. Should the Government decide to act along the lines suggested, the honorable member may depend on the full cooperation of the Resident Minister in London.

page 1445

QUESTION

BUTTER EXPORT TO GREAT BRITAIN

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– Since the representatives of the New Zealand and Australian.Butter Export Control Boards, in their wisdom, turned down the proposal for an export quota for butter, has the Government received any further information on the subject from the British Government? If such an intimation has been received, can the Prime Minister state what is its nature? What influences are directing . the British Government in this regard, and can he state whether, in the treaties recently entered into between Great Britain and certain foreign countries, Britain has varied the import quotas in respect of such countries?

Mr LYONS:
UAP

– I understand that recent press reports suggest that action has been taken on the lines indicated by the honorable member’s question, but I can assure him that no such action has been taken, and no communication has been received from the British Government.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– Yesterday’s newspapers contained the following cabled report : -

The Dominions Secretary, Mr. Thomas, stated that, arising out of representations by the High Commissioner of New Zealand, as to the general effect of wholesale price levels in the case of butter, discussions were proceeding with the Australian and New Zealand Governments as to the possibility ofregulating imports in a manner satisfactory to all parties.

Assuming that report to be correct, will the Minister for Commerce say what discussions are now proceeding, and what would be the official attitude of the Government towards any suggestion which might come from the British Government ?

Mr STEWART:
UAP

– The Prime Minister has already stated that, since the Commonwealth Government informed- the British Government that, acting on. the recommendation of the Dairy Produce Export Control Board, it was not prepared to submit to any regulation of butter exports from Australia to Great Britain, no further communication of any kind has passed between the two Governments on the subject.

page 1445

QUESTION

SALES TAX ON SAUSAGES

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

– On the motion for the adjournment of the House on Friday last, I brought under the notice of the Government a request for the remission of sales tax on sausages, dripping, and butchers’ small goods. The Prime Minister was called away to hear a deputation, and was unable to reply. Will he,when framing the budget, give consideration to the remission of sales tax on these items, because this is really a tax on food?

Mr LYONS:
UAP

– I shall give the honorable member’s request careful consideration ; but whether the tax will be remitted or not depends on the general financial position, and the merits of this proposal as compared with others which will also, have to be considered.

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QUESTION

MANUFACTURE OF TOWELS

Mr HOLLOWAY:
MELBOURNE, VICTORIA

– Has the Minister for Trade and Customs received, a communication from H.B. Dickie Proprietary Limited, towel manufacturers of Melbourne, stating that they have had to put off their staff which was working night shift because of the recent alteration of duties? If not, will he investigate the matter in view of this development?

Mr WHITE:
UAP

– The firm mentioned by the honorable member has frequently communicated with the department, and, in association with other towel manufacturers, has alleged that the dumping of goods by the Japanese has made it difficult to keep a full staff employed, but I have not heard that the firm has dispensed with its night shift staff. Inquiries will be made into complaints of Japanese dumping, as I assured honorable members when this item was before the committee. Up to the present, however, there is no evidence of excessive Japanese competition .

Mr.Scullin. - The trouble has been causedby forward orders.

Mr WHITE:

– If the honorable member has any further information on the matter, I shall bo glad to hear from him.

page 1446

QUESTION

REFERENDUM IN NEW SOUTH WALES

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– Is the Prime Minister prepared to express an opinion regardingthe probable effect on New South Wales of the recent referendum, and will he say whether it will affect the Resident Minister in his negotiations for the conversion of Australian loans?

Mr LYONS:
UAP

– I scarcely feel called upon to express an opinion on the matters referred to by the honorable member; but I hope that the recent decision of the people of New South Wales will be for the good of that State, and, through it, for the good of the rest of the Commonwealth, also.

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QUESTION

QUESTIONS WITHOUT NOTICE

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I desire to direct a question to you, Mr. Speaker. When questions without notice were called this afternoon, three honorable members on this side - the honorable members for West Sydney (Mr. Beasley) and Forrest (Mr. Prowse) and myself - rose. I should like to know what rule you follow in giving the call to honorable gentlemen on this side of the House. To-day, eight others received the call before. I did.

Mr SPEAKER (Hon G H Mackay:
LILLEY, QUEENSLAND

– I think that the system adopted by me in giving the call is well understood by most honorable members. I saw the honorable member for Richmond rise, but there was no reason why I should give him precedence of the leader of his party, or of other honorable members who, in my opinion, had a prior claim to the call. I take this opportunity to advise the honorable member to be more careful about the remarks he makes in an undertone.

page 1446

QUESTION

INVALID PENSIONS

Mr BEASLEY:

– Is the Prime Minis ter prepared to make available the names of the medical officers in the metropolitan district of Sydney who conduct the medi- calexaminationsofapplicantsforinvalid pensions?

Mr LYONS:
UAP

– I see no reason for any secrecy in regard to these medical examinations, and I shall therefore furnish the honorable member with the names of the. medical officers concerned.

page 1446

INTERESTRATES ON OVERSEAS DEBT

Formal Motionfor Adjournment

Mr SPEAKER (Hon G H Mackay:

– I have received from the right honorable the Leader of the Opposition (Mr. Scullin) an intimation that he desires to move the adjournment of the House this afternoon for the purpose of discussing a definite matter of urgent public importance, namely, “ The failure to achieve a reduction of interest on Australia’s overseas debt”.

Five honorablemembers having risen in support of the motion.

Mr SCULLIN:
Yarra

.- I move -

That, the House do now adjourn.

I move this motion in order to direct attention to the failure to achieve a reduction of interest onAustralian overseas loans, and I do so with a full sense of the responsibility that rests on every member of this House in dealing with this important subject. The time has arrived when this Parliament should express itself in plain terms regarding the heavy burdon of interest which the people of Australia are called upon to- bear in connexion with- their overseas- debts. Members have awaited for some time a pronouncement from, the Government an this subject, and the people of Australia, have borne this crushing burden patiently. Of our total overseas indebtedness, loans amounting to over £300,000,000 bear interest at from 5 per cent, to 6$ per cent.; and £43,000,000 of that sum bears interest: at from 6 per cent, to 6-J per cent, Those rates are almost double what they ought to be in these times. The anuual interest bill on our total overseas debt amounts to about £2§,000,000 sterling, or £35,000,000 in Australian currency. Double the quantity of products the value pf which equalled those loans at the time the debts were contracted, now has to be sent in order to discharge our interest liability. During recent years some nations have defaulted; othere are. threatening to do so. Last year British investors lost nearly £10,000,000 through the default of the Argentine railway companies. Our Australian railways are owned and controlled by governments, and these did not default. It would appear that capitalistic .enterprises may default, but governments may not, and that, there-. ?o;/e, Australian loans overseas are noi receiving the favorable consideration to which they are entitled- Despite the default to which I hav.c referred, the Argentine hag made a trade treaty with Great Britain on terms at least equal to, if not better than,, those given to Australia. I say that the honorable record of this .country entitles Australian people to more sympathetic consideration than they .are .getting, .If we had .received the support overseas tha t *ve have a .right to expect, .considerable relief would have been afforded to Australia long ere this, .and the ‘tame– has arrived when the people of this .country should express, through this Parliament, in plain yet courteous (language, their view on the subject.

Sympathetic support from the British Treasury, and -the banks and other financial groups in .Great Britain, would have ensured the success of a large Australian conversion .loan many months ago. Let me give an illustration of what the

British Treasury could’ have done. .”When the war debt was suspended two years ago, we appreciated the temporary relief so afforded. But it was contended-I myself pressed the. claim in London on behalf of my own Government, and the previous Government, and no doubt this ‘Government has done the same - that the war debt should b,e funded on terms at least as favorable as those on which Britain’s debt to the United States of America was funded. Britain’s answer to that request - and I admit that there was some merit in it - was that under the funding arrangement between Britain and Australia the rate of interest was approximately the average rate payable on Britain’3 internal loans. That’ was the only reply made to us. Since it was made, Britain has converted internal _ loans to the -amount of over £2,000,000,000, at an interest rate which represents a reduction of per cent.

Mr CASEY:
CORIO, VICTORIA

– £Taw much of the war debt are we. now being asked to pay to Britain?

Mr SCULLIN:

– I said a few moments ago that the payment had been suspended, but the .debt is piling up against Australia. It is a weak reply to say that we are not ‘paying anything now ; because the liability is an accumulating one. As I have pointed out, since Britain made that reply, her internal loans, amounting t» over £2,000,000,000, have been converted at a reduced rate of in.ter.est, y.e.t no reduction of the rate that Australia is paying on its w»i’ debt to Great Britain has been offered.

Sir Henry Gullett:

– We hoye paid nothing since then-

Mr SCULLIN:

– I have already replied to that statement. The point I am stressing is that, although it is true that our interest payments ‘on the war debt were suspended,” other countries enjoyed similar advantages under the war debts moratorium-; >but, nevertheless, pur debt is still accumulating at a high rate of interest. Wo now say that ‘as the British Government has benefited by the reduction of interest on its internal loans, Australia is entitled to a reduction of interest on its -war debt to Britain. The British Government could have given a lead to the British bondholders and the-

British financial interests, and Australia would then have obtained reductions similar 10 those which Britain herself now enjoys on the loans which she has floated within her own borders.

We have read in ‘ the press - and we have to accept the statement as official - that a message has been received from the Resident Minister in. London (Mr. Brace) that a grave hitch has taken place in the negotiations with respect to the conversion of Australia’s overseas indebtedness. The reasons advanced for this are the unsettled state of ‘Europe, the growing menace of Hitlerism and the possible failure of the Disarmament Conference. A little over two year* ago we were given to understand that the only difficulty in the way was the exist”ence. of the Labour Government in the Australian Parliament. When that was got rid of, we were told that the obstacle was the then Government of New South Wales. Now we have to get rid of Hitler ! Those are not reasons; they. are excuses. I say that deliberately, and I will show why I do so. On the 13 th of this month, it was stated in the press cables that a British loan had been floated at2£ per cent. The sum of £50,000,000 was asked for, and the loan was oversubscribed by ±’28,000,000, the sum obtained being £78,900,000. On the 11th instant, we were informed that an Indian loan of £12,000,000 al 4 per cent, had been oversubscribed. These facts show that there is no shortage of money. On the 29th April, “the cables further informed us that, in Prance, it is estimated that money to the amount of £100,000,000 is buried in orchards, and hoarded in household safes, because the French people have no confidence in the French Government or in the French banks; and that therefore British bankers had advanced to the French Government the sum of £30,000,000 at 2£ per cent. It is true that the loan was for six months only; but it shows that money is available, notwithstanding the allegation that’ the European situation prevents the conversion of Australia’s overseas indebtedness. I believe, however, that the real reason why Australia is not receiving satisfactory consideration with respect to its overseas debt conversion is contained in a cablegram published on the 15th May attributing to The New Statesman and Nation the following statement: -

Until tlie British Treasury lias funded a. sufficient proportion of its floating debt into a 2i per cent, conversion loan, it will probably set its face against Australian conversion operations.

The article goes on to say -

Nevertheless, a 4. per cent, loan would probably be .well received by the market.

The statement was made in a British newspaper that the British Treasury sets its face against the conversion of Australia’s overseas debt until the larger proportion of the British floating debt has been converted at 2$ per cent., notwithstanding the fact that Britain has already converted loans amounting to £2,000,000,000.

Let us examine further the excuse offered that the unrest in Europe prevents the conversion at the present time of the Australian overseas debt. An operation to convert this debt by the floating of a loan of a similar amount at a lower rate of interest would not reduce the supply of capital money in Great Britain, .even though there is unrest in Europe.

The possible failure of the disarmament conference has been advanced as an excuse for inaction, the suggestion being that if the’ conference fails, the Government -of the United States of America may demand the immediate payment of British debts. This can be said for Great Britain in relation to the disarmament, conference: that she has led the world along the road towards disarmament. It would be a poor recompense by any country to say that because of the failure of the disarmament conference, Great Britain must immediately meet her indebtedness. But even if that attitude were taken by the Government of the United States of America, it should not affect conversion loan operations. The flotation of a conversion loan by Australia in Great Britain would not lessen the ability of Great Britain to pay her debts to the United States of America, for it would not reduce the amount of capital in Great Britain. It would merely mean the substitution of one set of bonds by another set of bonds bearing a lower rate of interest. The only point that could be made in this connexion would be that there would be a loss of interest; but it would be such an infinitesimal amount compared with Britain’s total debt that it should not be taken into calculation. It may be said that new money would have to be found if an Australian conversion loan were floated. But such new money would only replace old money already subscribed to existing loans which, by the subscription of new money, would be released, and would still remain in Great Britain. I contend, therefore, that a conversion loan would not weaken Great Britain’s power to meet her indebtedness to the United States of America. No transference of money from Great Britain to Australia would be made by the conversion operations: but a measure of justice would be done to a dominion that has met, at the minute it was due, every financial obligation she has had to Great Britain through all the years.

During the past year, honorable members on this side of the chamber have refrained front commenting adversely on the financial situation because they realized that it was both difficult and delicate. “We are fully seised of our responsibilities, and also of the responsibilities of the Government in conducting negotiations. But the time ha3 arrived for the Australian people, through their representatives in this Parliament, to make their voice heard. The Prime Minister, may say that, as we have refrained during the year from discussing this subject, we should continue to refrain from doing so. I have given careful thought to that point, and I am fully convinced, from watching the proceedings in financial circles for some time, and also from my own personal knowledge of the frame of mind of certain British financial groups which are prepared to give consideration to those bondholders who have invested in private enterprise in preference to those who have invested in Government bonds, that plain speaking is now required. Those financial authorities overseas to which. I have referred should be told that the Australian people are losing patience with the selfish attitude that is being adopted towards an honorable member of the British Commonwealth of Nations. If the Prime Minister takes the view that, as we have waited patiently for so long for a successful outcome of the negotiations of the Resident Minister in London, we’ should exercise our patience for a little longer, I remind him that he did not show .very great restraint when he was the Leader of the Opposition, and my Government was facing an economic blizzard of very great severity. At that ‘time, the right honorable gentleman told the people of Australia that the whole proposition was very simple. Speaking in Adelaide, in April, 1931, he said -

I have no hesitation in saying that I could go to London, and not only clean up the deficit there, but carry through a large conversionloan at a substantially reduced rate of interest. I could then come back to Australia and appeal to the bondholders for a loan at a lower rate of interest.

The right honorable gentleman had “no hesitation “ in saying, nearly two years ago, that he could do these things. The people of Australia have reached the stage where they require, not “ saying,” but “ doing.” I do not suggest that it would be easy to cope with the situation, though the present Prime Minister did not see any great difficulty in it two years ago; I simply say that the time has come when this- gentleman should demonstrate that he can do, in a partial way, what he then said he could do wholly, and easily.

The Resident Minister (Mr. Bruce) has been gone from Australia nearly a year, and the results, to put it mildly, nave been disappointing, indeed. Australia’s claims, in my judgment, have not been stressed with sufficient determination. The people of this country, through their governments, have made great sacrifices to balance their budgets, to balance trade, and to make their credit good, and they now look for some return for their sacrifices. It is of no use to say that the quotations for our stocks are rising on the London market unless we receive some substantial benefit from such risings. We were told two years ago that the only thing needed to effect substantial improvement was a change of government. Well, we have had a change of government. But the people of this country, who are still being called upon to pay heavy interest on their overseas loans, have had no change out of it. I believe that I speak ‘ for a large section of our people when I say that Australia is not begging for charity, but is simply looking for justice.

Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP

– I am not surprised that the Leader of the Opposition. (Mr. Scullin) is disappointed because we ha vp not been able, up to the present, to secure for the taxpayers of this country some relief from the heavy burden of interest payments on our overseas indebtedness. I have no fault to find with the way in which the right honorable gentleman has dealt with this subject to-day from his own particular point of View, and from the point of view of one who occupies a position of less responsibility than that occupied by the members of the Government. The right honorable gentleman is entitled to express his views, and has expressed them in the hope, I feel sure, that some help may be given in the direction of securing relief for our people. But, listening to the right honorable gentleman, one is tempted to say that he thinks it somewhat easier to achieve what he desires than it really is. Reference has been made by the Leader of the Opposition to the fact that the Resident Minister in London (Mr. Bruce) has been in London a long time endeavouring to achieve some beneficial result in respect to our overseas indebtedness to Great Britain. Apart from the Ottawa Conference, the particular mission of the Resident Minister is, as stated by the Leader of the Opposition, to try to obtain some relief for Australia in respect to the interest burden on her overseas indebtedness. Everything that could possibly be done to this end in London by a representative of Australia has been done by that right honorable gentleman, and everything that could be done in Australia with that object has been done by the Government. We have kept our word and met our obligations. The present governments of Australia have an honorable record in this regard. The Commonwealth Government feels, as does the Leader of the Opposition, that Australia is entitled to some relief from the burden of her overseas interest, especially in view of the fact that Australia has done everything that she could do to meet the position. The Leader of the Opposition has referred to the financial institutions and authorities on the other side of the world from which, we might hope to receive assistance, and with which certain negotiations have ‘been conducted. I cannot reveal either hero, or elsewhere in public, particulars of the negotiations that have been carried on, but I assure honorable members that no further action based on sound principles could be taken. The Australian Loan Council is composed of representative Ministers of all the governments of the Australian Commonwealth, its members including practically all the Premiers and Treasurers of Australia, because in most instances the offices of Premier and Treasurer are held by the same Minister. The council, above all other bodies, is best suited to handle these matters. It met on Monday and Tuesday of this week, and the representatives of the Commonwealth Government submitted to it a statement of the negotiations in London in regard to this matter. The council considered the case from all its aspects. Every one of its members was as anxious as any representative in this chamber can be to obtain relief for Australia from this burden of interest. Having exhaustively considered the information that had been unreservedly placed before it, the Loan Council unanimously expressed the opinion that everything possible had been done, and that the present was an inopportune time to approach the money market on the other side of the world for the desired conversion.

The Leader of the Opposition (Mr. Scullin) claimed that the forthcoming world economic conference, ,and the negotiations regarding disarmament, did not afford sufficient reason for delay in this matter. I emphasize that the effect of those events has already been manifested by the -fall in price of our stocks in London, a matter which had the attention of the Loan Council. Australian 5 per cent. 1945-75 stocks which, on the 27th March last, were quoted at iE106 18s. 9d., had fallen last week to £104 10s., while on Monday the 15th of this month the price quoted was £102 2s. 6<L It is, therefore, idle to suggest that the matters to which the honorable member has referred have not had an adverse effect on the prospects of a conversion loan at present.

Mr Hughes:

– Did the price of the British conversion loan also fall?

Mr LYONS:

– Speaking generally, the depression has affected the price of all government stocks.

Mr SCULLIN:

– Yet only three days ago a £50,000,000 British conversion loan was over-subscribed by some £28,000,000.

Mr LYONS:

– A little over three days ago the outlook was entirely different; it is because of recent happenings that it has changed. Even when the Government convened a meeting of the Loan Council, ‘ prospects were different. Later happenings, however, necessitated a revision of our plans, which indicates how unexpectedly and rapidly market conditions can alter. Having considered every aspect of the matter, including the points raised by the Leader of the Opposion, .- the Loan Council ‘ unanimously issued the following statement to the press: -

The council examined in detail the steps that had been taken for the purpose of securing the conversion of the overseas loans bearing high interest rates and on which optional rights of repayment exist. Full reports by the Resident Minister in London (Mr. Bruce) were presented to the council.

The members o£ the Loan Council were unanimously of opinion that the disturbed condition of international affairs made any substantial financial operation impossible at the present time. After full examination, the Loan Council decided that it was best to defer any proposals in this matter until conditions were more favorable.

The Leader of the Opposition recognizes the difficulties that exist overseas. He knows’ perfectly well that if we were to attempt a conversion, and fail, we should have to be in a position to pay off the bondholders who would not convert. The right honorable gentleman quoted a newspaper statement alleging that a welcome awaited a 4 per cent. Australian loan in London; but to show that the position is not so satisfactory as he seems to think, I point out that when, on the 23rd February last, the conversion of a New South Wales loan of £9,600,000 at the rate of 4 per cent., issued at par, was attempted, 34 per cent, of the loan wa3 left in the hands of the underwriters. I am in sympathy with the object of the right honorable gentleman; but I say that it is necessary that the proper steps should be taken if we are to achieve what we consider the people of Australia are entitled to. The Government is taking those steps. It is in frequent consultation with all the governments of the States, and is constantly examining the economic position on the other side of the world.

The representatives of the State Governments who attended the last meeting of the Loan Council expressed their appreciation of the splendid efforts that have been made by the Resident Minister in London (Mr. Bruce) in this connexion. They would not have been satisfied had they not been confident that every possible avenue had been explored. During the life of this Government there have been times when it has been thought that the opportune moment had arrived to relieve the people of Australia somewhat from this burden of interest, but an overnight change in the situation altered the complexion of affairs. Again that has occurred. The Government is of the opinion that, in view of the. disturbed conditions in Europe, and the imminence of the World Economic Conference, which will particularly take into consideration the circumstances and difficulties under which debtor nations labour, it would be unwise to attempt any major conversion at the present, juncture. It is quite possible that benefits accruing from the World Conference will be in favour of debtor nations.

Mr Ward:

– If no advantage results, we shall have another conference I suppose.

Mr LYONS:

– The honorable member sneers at the efforts of the nations which have convened this conference in an endeavour to afford some practical benefit to the workers and those who are dependent on -them. This Government, its supporters, and, I am glad to say, the official Opposition, adopts a different attitude. The Government is determined to proceed along proper lines in an endeavour to obtain relief for the taxpayers of Australia. If improper steps were taken at this juncture, instead of being afforded relief, our people would, no doubt, be involved in even greater difficulties. The people of Australia have ‘ been patient. It is characteristic of them that they are prepared to shoulder the burdens that have been undertaken by their various governments, and have no intention to break the contracts into which those governments entered on their behalf. They have been cheerful and courageous, and this Government agrees with the Leader of the Opposition (Mr. Scullin) that everything must be done to secure the desired relief. At the same time, every care must be taken to pursue only the right and proper course. We have consulted to the fullest extent the whole of the governments of Australia. The financial negotiations that are carried on from time1 to time must necessarily he dealt with along confidential lines within the Loan Council. Subject to that condition, every government in Australia has been made fully acquainted with all the steps that have been taken ; and within the last two or three days those governments, through their representatives on the Loan Council, have expressed their ^entire approval of what has been done, -and are standing behind the Commonwealth Government in its efforts to achieve the result desired by all. I appeal to honorable members who follow me in the debate, so to curb their zeal and their anxiety to achieve something practical that they will not make the position more difficult for this Government, for the State Governments, and for the people of Australia.

Mr BEASLEY:
West Sydney

– The text of ihe Prime Minister’s reply to the Leader of the Opposition (Mr. Scullin) is that the time is not opportune for the conversion of our overseas debt. The reasons that he. has advanced are doubtless those of the Resident Minister in London, namely, the unrestful state of Germany, the possibility of the failure of the Disarmament Conference, and the approach of the World Economic Conference.

It may truthfully be said that even before this madman Hitler assumed control in Germany that country was more unrestful than it is today, because, within a period of twelve months, no fewer than three or four elections were held there. It seems strange, therefore, that such a suggestion should now be made. One wonders why there has been no reference to the war between Bolivia and Paraguay, or to the conflict between China and Japan.

Mr Ward:

– Or the state of affairs in the Irish Er.ee State.

Mr BEASLEY:

– As my colleague remarks, attention might have been called to the difference of opinion in the Irish Free State in regard to the Oath of Allegiance. It appears, to me that .the Government is prepared to go to any lengths to find some reason for its failure, and to establish the contention that the time is not opportune. It would seem that the time will never be opportune if those who support the present policy’ are content to make Australia’s plea for assistance weakly or meekly. It has been said that the Resident Minister in London has taken every step that was open to him. But we have not been told what he has done. He may have attended a number of luncheons and dinners; he may have mixed with the upper class in London, and played a big part in those circles; but what else has lie done? We have not been given any reason for the failure of the steps, that he is alleged to have taken. The country is entitled to know what those steps are, so that the responsibility may be placed on whatever person may have put Australia in the position that she occupies to-day. The Resident Minister has been in London for about twelve months, at a cost to this country of which I am not aware at the moment, although I hope that particulars of it will be furnished. He has failed in his mission, and the time has arrived for his recall, unless the Australian taxpayers are prepared to continue to bear the expense of keeping him there* notwithstanding the fact that utter failure has attended all his negotiations as the representative of the Commonwealth Government. Apparently the matter of his recall will not be finally determined until the people have had a’n opportunity to express at the- polls their opinion upon it. It is worthy, of note that the financial editor of the New Statesman, speaking in London on the 13th Mav, in regard to Australian bonds and the necessity for their conversion, referred to the sacrifices of wage-earners and others in Australia, and added that “ Only British holders of Australian bonds have failed to do their bit.” Yet the honorable member for Corio (Mr. Casey) among others, has been at great pains to defend the British holders of Australian bonds, and has made a number of suggestions in defence of them the result of which will prove detrimental to the people whom he represents in this chamber.

The statement of the Leader of the Opposition that appealed to me more than any other was that the time had arrived for plain speaking. In my opinion, the time for plain speaking arrived over two years ago. The action since taken by those who are associated with me upon this question has borne some fruit. All the talk, about changing governments, and of altering the situation in Australia, has had no result; the people of this country still have to find £2S,000,000 amin ally for interest on our overseas debt, and the Leader of the Country party still has to move the adjournment of the House to call attention to the sufferings of the primary producer.

Mr Lyons:

– The amount is not £28,000,000, but less than £23,000,000.

Mr BEASLEY:

– The total given by the Leader of the 1 Opposition - £28,000,000 - plus exchange, makes the amount one in the vicinity of £36,000,000.

Mr Scullin:

– The total amount of interest on our overseas debt is about £28,500,000.

Mr BEASLEY:

– It is idle for the Prime Minister to quibble, seeing that he does not supply the House with any information.

Mr Lyons:

– £5,000,000 is not a quibble.

Mr BEASLEY:

– The right honorable gentleman gives very little information in reply to questions in this House. Even to-day he spoke only in general terms, and did not indicate what steps had been ta.ken. That will not satisfy the Australian people, who on all hands are suffering privations such as cannot even be guessed at by many of those who sit in this House. The right honorable gentleman praised their cheerfulness. It might be better if some honorable members opposite were similarly situated; the probability is that they would not then be so cheerful in their attitude towards this problem. It is all very well for them, in these ideal surroundings, to talk about the cheerful way in which the Australian taxpayers view the matter. It is a. marvel that such conditions have been borne so long as they have. That, I think, is due to the fact that they have continued to accept these excuses, whereas, had the matter been handled forcefully in only one quarter as I suggested it should have been, we would have obtained relief long ago. Under the combined efforts of those who feel that the time has arrived for plain speaking, I am confident that a different outlook would quickly be made manifest.

The Prime Minister compared the responsibility of the Government with that of the Opposition, but did not reply to the quotation of the Leader of the Opposition of the view that he expounded when he sat in opposition. The right honorable gentleman then urged that it was only necessary to change the Government; that then confidence would be restored and prosperity would arrive. But after that Government had been changed, the right honorable gentleman found that a different excuse was necessary, and said, “ We cannot secure support for a conversion on a large scale while we have the Lang Government in New South Wales. We must get rid of that Government.” The party to which this Government belongs fooled the people with this catchcry, that it was necessary to remove the Lang Government of New South Wales, yet even the Prime Minister has admitted to-day that 34 per cent, of the recent conversion of a loan originally incurred by that State was left in the hands of the underwriters. This business cannot go on for ever. The people of New South Wales have in the past been fooled with propaganda, but we arc gradually working towards a conclusion on these matters’, and eventually the party represented by this Government will reach, the end of its tether, and have no excuses left to offer for its failure to ease the overseas burden. It talks about this, that, and the other being done, but the circumstances which arise do not alter its attitude one iota. To-day, the honorable member for Macquarie (Mr. John Lawson) tried to furnish the Government with another excuse by suggesting that the referendum just held in New South Wales may have some valuable result in regard to the ‘conversion of our overseas debt, but let me say that the result of the referendum was known in London while the negotiations with the Loan Council were taking place. After all, this situation was known, and it is quite useless for the honorable member to try to fool the people into believing that the referendum involved another obstacle that had to be overcome, and now the result is known, according to the bankers, we are supposed- .to be quite safe from the constitutional point of view, and that the financiers overseas will rush in to help Australia out of its difficulties. They will not help us until they are forced to do so.

Mr SPEAKER:

– The honorable member’s time has expired.

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

’ L4.12]. - Honorable members, generally, will agree that the right honorable the Leader of the Opposition (Mr. Scullin) has introduced this subject in a manner and tone worthy of its- importance and significance, and there is little in his speech to which, from any point of view, exception is to be taken. Not only do I agree with much that the right honorable gentleman has said, but I am also inclined to agree with him that the stage has now been reached when probably a useful purpose will be served by the statements made in this Parliament. The debate I think will serve a useful purpose.

Mr Hutchin:

– A portion of it.

Mr LATHAM:

– Every portion of it, I venture to suggest ; because I am about to refer to the speech of the honorable member for West Sydney (Mr. Beasley). What I have to say will be short, and I do not regard it as essential to be personally offensive in order to make my meaning clear. The honorable member spoke of plain speaking; but it is unfortunate that he is unable to speak plainly without being personally offensive at the expense of one of the most honoured and most honorable citizens of Australia. The point which the honorable member for West Sydney does not appear to recognize is that if the various proposals which have been made by the Government - as distinct from proposals made without any official authority - with reference to the conversion of the overseas debt were published from time to time there would be opportunities for speculators to make fortunes, and no benefit would be gained by the Australian people. It is quite impossible to deal with these matters in public.

The Loan Council, representing the various governments of Australia, has been fully informed of everything that has been occurring since the Resident

Minister (Mr. Bruce) arrived in London, only in October last. Yet the period which has elapsed since has been stated by the honorable member for West Sydney, with the accuracy which distinguishes many of his statements, to be twelve months! The members of the Loan Council are fully acquainted with all the details of what has been done, and they have expressed their view in a statement given to the press to which the Prime Minister has referred.

I said that I thought that the speeches made by members on the other side of the chamber would serve a useful purpose. 1 agree with the Leader of the Opposition that the Australian people have been very patient indeed. What has been done in Australia in order to preserve the reputation, honour and prestige of our people has not, I think, been sufficiently recognized in all quarters overseas. Patience cannot last for ever, and it would, be desirable if the conclusion were drawn from this debate that unless some action which is fair in the circumstances is taken, there ‘will be risk of the ideas represented on this subject by the honorable member for West Sydney obtaining increased acceptance among the Australian people. Therefore, his speech is useful in that respect, and I regard that as a relevant argument. upon the subject.

The Leader of the Opposition referred to a ‘matter with which the Prime Minister had no time to deal, and to which I may be allowed to reply on behalf of the Government. It has reference to the interest rate charged on the amount of war debt which was, I think, originally, some £92,000,000, owed directly by Australia to the British Government. The Government agrees with the right honorable gentleman that there .should be a reduction of the rate of interest on that amount. At the present time, however, no payments are being made, and in the judgment of the Government, it is better to act in the hope that those payments will never be asked for and never resumed, than to initiate negotiations upon the basis that they will be resumed. If proposals were made from Australia now for an amendment. of the agreement, it would be upon the basis that the performance of the agreement would have to be taken up again inthe future, immediate or remote. We sincerely hope that one result of the International Economic Conference, and of similar negotiations, will be that we shall not be called upon to make further payments on this debt; but if we are so called upon, then undoubtedly the Governmentwill take up the matter mentioned by the right honorable member. I should think that in view of the change that has taken place in the rate of interest which the British Government is paying for internal moneys now, it would be difficult indeed to raise any objection - and I would be surprised if any serious objection were raised - to a reduction of the interest rate in the manner suggested by the Leader of the Opposition.

Mr.PATERSON (Gippsland) [4.17]. -I do not think that there is any member in this chamber, or indeed, any person outside it, who does not share to a large extent the disappointment and impatience of the Leader of the Opposition (Mr. Scullin) at the unfortunate delay which has occurred in bringing about the conversion of that part of our overseas indebtedness over which we have current optional conversion rights. But I feel that no one who was not present at the recent meeting of the Loan Council isin a position to censure the Government. We do not know the details of the representations of the Resident Minister (Mr. Bruce), but it is significant that those who were in a position to hear his report, unanimously agreed that the only thing to be done was to defer still further the attempt at conversion. We have to remember that the various governments represented at the meeting of the Loan Council were made up of all kinds of political parties, yet, according to to-day’s press, there was absolute unanimity at the meeting of the Loan Council that the disturbed condition of international affairs made any substantial financial operation impossible at the present time. It is certainly not surprising that there is disappointment on the part of the members of the public generally at the delay which has occurred in connexion with this proposed conversion operation, and when we recall the statement of the Prime Minister (Mr. Lyons) which was made when he brought down his last Budget some nine months ago, we have reason to feel disappointed. The Prime Minister, on that occasion, in setting out the amounts of money which we owed to Great Britain, showed that we owed, in round figures. £138,000,000, on which the interest rate was from 3 per cent, and under4½ per cent., £30,000,000 on which the interest rate was from 4½ per cent. to under 5 per cent., £213,000,000 on which the interest rate was 5 per cent., and £93,500,000 on which the interest rate was over 5 per cent. and up to6½ per cent., the total amount owed being £474,000,000. That was the amount, excluding the war debt. He pointed out that of that amount, we had optional conversion rights over about £96,000,000. He now puts the figure at about £84,000,000 in view of the conversion, last November, of the New South Wales debt at, I think,3¾ per cent. issued at 98. Six months have elapsed since that conversion operation. In his budget speech, the Prime Minister (Mr. Lyons) stated that the terms upon which” we could reasonably expect to convert the debt of £96,000.000 would be determined by the success of the November issue which, on the basis indicated, givesa return to the investor of £41s. 2d. per cent. That loan, he said, would be an indicator to the Government in future conversion proposals. I do not blame the Government for the delay that has occurred. It is, however, most unfortunate that just at the time when, apparently, satisfactory arrangements were within our grasp, events in Europe have made delay inevitable. This country certainly has a very honorable record with respect to meeting its obligations -a record which, compared with that of many other nations, deserves recognition. I hope that before long it will be recognized as it should be, and that improved conditions in Europe will enable conversion to take place at 4 per cent. if not lower. The Leader of the Opposition (Mr. Scullin) made reference to the suspension of war debts payments between this country and Great Britain, and if I heard him aright, I think he said that the war debts payments of all other countries had also been suspended.

Mr Scullin:

– I said that the interest payments on such debts had been suspended.

Mr PATERSON:

– Surely the right honorable gentleman is not forgetting that interest payment on war debts as between Great Britain and the United States of America had to be met - the last payment was on the 15th December last - yet Great Britain did not require us to pay either interest or principal due to her, although this relief was originally given in the expectation of receiving similar relief from the United States of America.

Mr Scullin:

– I pointed out that while we obtained relief from the moratorium as regards interest payments, so did other nations.

Mr PATERSON:

– We should at least give Great Britain credit for having continued to Australia and to other countries, this concession regarding interest payments on war debts, despite the fact that the United States of America required Britain to meet her obligations.

The honorable member for West Sydney (Mr. Beasley) challenged the statement that the time was not opportune to attempt conversion operations in London. Surely the figures quoted by the Prime Minister indicated the impossibility of obtaining, at the present moment, any considerable sum at 4 per cent, on a par basis. The right honorable gentleman reminded u3 that the 5 per cent, loan, which until quite recently had been quoted at £106, had dropped within a few days to £104 and then, to £102. The honorable member for West Sydney also said that the Resident Minister in London (Mr. Bruce) had failed in his mission and should be recalled. I need only remind him of the old proverb about swapping horses in mid-stream. While I do not belong to the same paTty as that of the Resident Minister, I am satisfied that this important issue could not be in more capable hands.

Mr CASEY:
Corio

– I think every honorable member will join with the right honorable the Prime Minister (Mr. Lyons) in commendation of the restraint with which the right honorable the Leader of the Opposition (Mr. Scullin) discussed ‘this important subject.

Had the right honorable gentleman spoken in the unbridled terms employed by the honorable member for West Sydney (Mr. Beasley), possibly harm,, instead of good, would have been the outcome of this debate. In the circumstances, little harm, and possibly some good, may - as the right honorable the Attorney-General (Mr. Latham) has suggested - result from the speech of the honorable member.

Since none of us has any knowledge of the contents of the cables exchanged between the Prime Minister and the Resident Minister in London (Mr. Bruce), we are all necessarily dependent on the .information given to us by the press. The tone of the speech of the Leader of the Opposition might suggest that we should be able ‘to command the success of our overseas conversion operations in our own time ; but if he were to search his own experiences he would have to admit that, in such matters, success cannot be commanded. The London money market cannot be browbeaten. The old adage, “ The seller is the courtier, and the buyer is the king,” may aptly be applied to transactions of this nature. Before a successful conversion operation can bo launched on the London money market, Treasury approval must first be obtained. As the British Treasury is not, at the moment, and has not, for the last six months, been disposed to give its approval, obviously? an attempt on our part to convert would be foredoomed to failure. Manifestly, the British Treasury has the right to take this attitude. We cannot deny to Britain the right to first call on their own money market. What would be the attitude of the Commonwealth Government if, say, the sister dominion of New Zealand wished to essay a conversion on the Australian market at a time when we had conversion proposals of our own in prospect? We know that the British Treasury has a conversion programme of its own in mind. Within recent months from £50,000,000 to £75,000,000 has been converted at 2$ per cent.

The second obstacle to an Australian conversion operation in London would be the difficulty of obtaining the underwriting of any projected loan to which the British Treasury did not give approval. Obviously, we could not expect success unless we had secured the underwriting, or we were assured of the support of the large financial institutions in London. So, in the absence of Treasury approval for a large loan, and, in the circumstances I have mentioned we could not object if we did not get it just when we wanted it, and hecause of the difficulty of securing adequate underwriting, any attempt at a largescale conversion of Australian indebtedness in London could hardly be ‘successful. The position seems to be this : We desire to effect the conversion of approximately £80,000,000 carrying relatively high interest rates, into securities carrying lower interest rates. Bearing in mind the condition of the London money market, that has not been possible, apart altogether from the condition of Treasury approval. Even in -the good days when money was plentiful, dominion loans of £1.0,000,000 or £20,000,000 were regarded as fairly large transactions. For several months the London money market has been anxious and disturbed, and, whereas there is plenty of short-term money, investors are shy of long-term securities.

I would draw the attention of the right honorable the Leader of the Opposition to the difference between short-term and long-term money; a difference which, I am sure, he would realize were he not now in opposition. The recent loan which he quoted of £50,000,000, for which £78,000,000 was subscribed, was a short-term loan. The right honorable gentleman also mentioned that India had recently secured a loan of £12,000,000. That was a loan of comparatively small dimensions. If Australia were to approach the London market .for similarly small loans, probably we should get the money; hut I suggest that the piecemeal conversion of our indebtedness in Great Britain is not the most satisfactory method of dealing with our overseas debt. A large conversion is probably, on the long view, a better arrangement for us. The right honorable gentleman further instanced the loan by British ‘ bankers to Trance of £30,000,000 at 2£ per cent. That, he admitted, was only for the term of six months. There is a substantial difference between short-term and longterm money, and it is reflected in interest rates. For example, it is most diffi cult to place day-to-day money in London, even at rates as low as 4 per cent., and also it must be remembered that all the loans that the Leader of the Opposition has mentioned were effected before, what we may call without exaggeration, the revolution in Germany took place.

The honorable member for West Sydney treated with scorn tho suggestion that recent developments in Europe were responsible for the difficulties now encountered by Australia in the London money market, and suggested that the state of war now existing between Bolivia and Paraguay might as well be advanced as a reason for the failure to convert. That remark reveals that he does not read the newspapers with the intelligence which one would expect from a member of this House. The speeches made by responsible German Ministers regarding the position of Germany vis-à-vis the rest of Europe and particularly the threats of that country to re-arm. have created a definite war cloud, which is reflected in the prices of gilt-edged securities in London. The right honorable member for North Sydney (Mr. Hughes) asked whether the decline in the price of giltedged securities is general. A reference to the newspapers shows that it is, the average decline being more than 2 per cent., even taking into account the enormous bulk of the British Z per cent, conversion loan. This is a clear indication that the money market has been upset. I believe that Australia could effect a gradual conversion of its overseas indebtedness by loans of £10,000,000 or £15,000,000, but I suggest that such piecemeal treatment would not be in our best interests. The Government is right in. trying to effect a conversion of the whole debt at the first propitious moment.. The alternative would be to take the risk of going on the market without underwriting or any assurance of adequate support by the big financial institutions. The Government would require to know in advance what proportion of the existing loans would be taken up by present holders, and what percentage of new money would be . needed to redeem the stocks of those who were not willing to convert. We could do no more than’ guess at those proportions. If we were to try to borrow £84,000,000 in London under those conditions, investors might take fright in the absence of underwriting -and the support of the financial institutions, and Australia might easily be faced with an obligation to find £40,000,000 or £50,000,000 in cash. Where could we find such a sum? If we were to ignore the accepted procedure in the flotation of loans, we would incur the risk of a partial default, and that risk is not worth taking merely to save one month, or two months, or even, possibly six or nine months. The present setback is only temporary; conditions may have improved within the next six or nine months, and it is far better to wait for a propitious moment to effect the whole conversion, and so maintain pur credit in London. Nothing should be done to jeopardize Australia’s financial standing on the London market, and the privileged position this country occupies through the recognition of its stock as trustee securities. I do hot think honorable members sufficiently realize what that privilege means to us in actual cash. It means that we can raise a loan at i per cent., and sometimes 1 per cent., cheaper than the general market rate for non-trustee securities. That advantage over a total debt of over £500,000,000 would represent a saving of interest amounting to from £3,000,000 to £5,000,000 a year. Such a benefit should not be lightly jeopardized.

It is not necessary to reply in detail to the honorable member for West Sydney (Mr. Beasley). His speech added nothing to one’s knowledge of the subject or even to the controversial aspects of it. It was purely personal and political. The honorable member suggested that we of the ministerial party are not so wholeheartedly endeavouring to have Australia’3 overseas debt converted as are the members of his party; but I assure him that there is a great deal more national and patriotic sincerity on this side of the House than amongst his followers. His speech was of the kind we are accustomed to hear from him - its main purpose was to back-bite and stab in the back a man whose boots he is not fit to black.

Mr FORDE:
Capricornia

.- The Leader of the Opposition (Mr. Scullin.) has done a great national service by bringing this matter before the House, and the fair and effective manner in which he stated his case has been generally appreciated. Irrespective of party politics, there is a growing conviction throughout Australia that our overseas interest burden should be substantially reduced. That view is expressed, not only by members of the Labour party, but by bankers and leaders of commerce. According to newspaper reports, Mr. Harold Nelson, president of the Bank of Australasia, presiding at a meeting of shareholders in London on the 29th March last, pointed out that £500,000,000 of Australia’s external debt carried interest at the rate of 5 per cent., and £98,000,000 at rates between 5 and 6 per cent. Continuing, Mr. Nelson said, “It was not surprising that the conversion of this debt, was a lively political and financial issue in Australia.” Even conservative newspapers of this country are becoming outspoken in their criticism of the lack of appreciation overseas of Australia’s herculean task of meeting its external interest burden, when the United Kingdom has converted practically the * whole of its indebtedness at substantially lower rates of interest. One of the leading Australian newspapers stated only yesterday -

Stern experiences make the interest load we are carrying unbearably heavy, and those who look ahead are inclined, to speculate whether, failing relief, we can stagger along very much further.

It would be in the interests of overseas bondholders, financial corporations, and the British Treasury if they were to take a more active and sympathetic interest in the subject, and recognize the great difficulties that confront Australia. Whilst Argentine and Russia have defaulted to Great Britain, and France has defaulted to America, Australia has been staggering under its great burden and endeavouring to meet its obligations to the last penny. So far it has been successful, but at what cost to its people! Tremendous sacrifices have been required of hundreds of thousands of primary producers, many of whom have been selling below7 the cost of production and are slowly bleeding to death. They have been utilizing whatever credit was available to them, and heaping up huge debts, to be wiped off if and when world’s prices increase. Business men have suffered. The working people have had to submit to substantial reductions of wages, although they had never received more than sufficient to buy the bare necessaries ‘of subsistence - food, clothing and shelter. The pensions of the returned soldiers and the aged and invalid have been reduced. That was a most distasteful step for any government to take, but these people were required to bear their share of the national sacrifice in order that Australia might he able to live within its income. How long is it to he expected to meet this great annual interest payment overseas, plus the 25 per cent, exchange on the money remitted? Taxpayers have had to bear increased imposts, and property-owners, like every other section of the community, have been required to shoulder heavy loads of additional taxation in order that Australia might be able to say that it did not default. Unless the people overseas recognize our difficulties and assist us, the time will soon arrive when, as a leading newspaper said yesterday, we shall not be able to stagger along any further under our burden.

The Prime Minister (Mr. Lyons) referred to the 34 per cent, under subscription of the recent Now South “Wales conversion loan, aud the decline in the prices of Australian stocks overseas. These facts clearly demonstrate that the confidence which was to be restored as the result of changes of government in the Commonwealth and Now South Wales Parliaments has not yet materialized. The right honorable gentleman said that proper steps should be taken to bring about a reduction of interest on the overseas debt. The Leader of the Opposition certainly did not suggest the taking of any improper steps, but he did say that stronger efforts should be made, and that Australia’s difficulties should be more forcefully brought to the notice of the British Government and financial institutions. When the British Government experienced difficulty in paying a’ huge interest instalment due to the United States of America, it stated definitely that it would not be able to continue bearing this load, but rather than default it had, with extreme difficulty, found the necessary money, hoping that the subject of international debts would be reconsidered at an early date. Australia’s position is similar to that. France has said that it could not and would not pay its debt to the United States of America. Russia and the Argentine likewise defaulted to Great Britain. The Commonwealth does not wish to be forced into default, but it is evident that whatever steps have been taken for the conversion of Australia’s overseas debt at lower rates of interest have failed. It is clear also, that the Prime Minister was over-optimistic when, as Leader of the Opposition, he stated that he would have no difficulty, if returned to power, in converting Australia’s overseas debt at lower rates of interest. However, this is not a matter of party politics. Because of the great relief it would afford to Australia, a satisfactory conversion would be welcomed by all sections, regardless of the party that was responsible for the operation. Certainly the Commonwealth Government has changed its attitude in regard to this matter. It assured the people that a conversion on satisfactory terms could be arranged if the antiLabour parties were returned to this Parliament and the Lang Government were put out of office in New South Wales. Both those changes were effected, but no conversion followed. Even the New South Wales referendum was carried, yet, two days later, the Resident Minister in London announced his failure. Now we are told that because of the nervousness and uncertainty created in Europe by Hitler, the German Chancellor, a conversion operation would be inopportune at this time. I object to the newspaper report that the Resident Minister in London has advised that Australia’s conversion loan will have to be postponed indefinitely.

Mr SPEAKER:

– Order! The honorable member’s time has expired.

Mr. JAMES (Hunter) “4.45] . - I support the motion of the Leader of the Opposition (Mr. Scullin), because I believe that the time is long overdue when Australia should speak plainly to Great Britain regarding the treatment meted out to her. Australia has made great sacrifices in order to honour her obligations. Not only has she, under the Premiers plan, repudiated her obligations to her own internal bondholders, but she has reduced pensions, wages, and social services until the condition of the countryis, in many respects, deplorable. In the past, it has been sufficient for Australia to know that Britain was in trouble to come forward with what assistance she could offer. The last war cost Australia approximately £800,000,000, and at the present time her interest and pensions bill, directly attributable to the war, amounts to nO less than £25,000,000. In 3921, Great Britain came to an arrangement -with the United States of America by which her debt of £900,000,000 was funded at 3 per cent, for the first ten years, and Bi per cent, for the remaining 52 years, whereas she had formerly been paying 5 per cent. Payment oh the debt had been suspended altogether for two years until this arrangement was completed. Australia received no benefit as a result of this arrangement, though foreign countries which had borrowed from Great Britain, countries such as Belgium, Italy, and France, had their debts written down by as much as 50 per cent. and 60 per cent. It is time some one spoke out very plainly on these matters. Surely we are entitled to the same concessions as were granted to foreign countries. Even in matters of trade, we are not able to receive as good treatment from Britain as she accords to the Argentine for the meat that countryexports, or to Russia in respect of her wheat, though Russia actually repudiated her debts to Britain. The Prime Minister (Mr. Lyons) said that the Resident Minister in London (Mr. Bruce) had made a fine effort on our behalf, but it seems to me that he is not putting the punch into his representations on behalf of Australia that he should. It is clear from his own utterances that, for years past, he has recognized that Australia is entitled to better treatment from Great Britain than she has been receiving, and particularly that she should have received some benefit from the funding arrangement which Britain entered into with the United State? of America in 1921. In the course of the Joseph Fisher lecture at the Adelaide University, delivered on the 1st July, 1927, Mr. Bruce said -

Since Great Britain came to her arrangement with America for the funding of her debt, and for the payment of interest at a rate of from 3 per cent, to Si per cent., I have thought that it would be only just and equitable that the arrangement with Australia should be varied, so that we would pay only the average rate of interest paid by Great Britain upon her war indebtedness. This point of view I have put to three Chancellors of the Exchequer and have argued strenuously in favour of it. Unfortunately, up to date I have not been able to induce any of them to share the views which I hold. I am confident, howover, that in the future some arrangement will be collie to, qualifying the agreement entered into in 1021.

Australia has made enormous efforts to rehabilitate itself financially, and when we have asked for fair treatment from Britain in the matter of interest payments, some bogy has always been raised. First, wo had to waif until the Scullin Government was removed, and then until the Lang Government had been removed; but both those governments are gone now, and nothing has been done. We were told that we could not get better terms in London because the Scullin Government’s fiduciary proposal had frightened investors. I believe that had the Scullin Government resolutely fought the issue with the Senate w7hen the fiduciary pro.p:Isa l was before Parliament, it would have won,, and Mr. Scullin would now be recognized as one of the strongest political leaders, not only in the Empire, but in the world, because he gave a lead in a policy that, we find adopted, not only in- the United States of America, but in many other countries. We have grown tired of these bogies which have been raised one after the other; of hearing that the Lang Government and the Scullin Government, and the Hitler Government are the cause of our failure to obtain relief in respect of our overseas indebtedness. Presently, I suppose, the blame will be laid on Ghandi, or on the Irish Free State. Speakers on the other side of the House have complimented the Leader of the Opposition (Mr. Scullin) for bringing the subject forward at thistime. There seems to be a general recognition that the time for action is overdue, and every honorable member must admit, I think, that ‘ Australia is not getting a fair deal. Our constituents are demanding that representations be made, and that there shall be some plain speaking. Unless something is done, we shall be forced, into actual repudiation. Some honorable members seem to have a terrible dread of the word “repudiation”, hut they overlook the fact that, from 1919 to 1921, Great Britain suspended interest payments on her debt to the United States of America, and that was something very like repudiation. In effect, she held the economic pistol to her creditor’s head, telling her that she would have to accept a reduced interest rate or get nothing at all. The United States of America reduced the rate of interest to Great Britain, but Great Britain did not reduce the rate of interest on Australia’s debt. Yet, as I have said, Australia spent £S00,00O,000 in prosecuting the war, sacrificed 62,000 of the flower of her manhood, and is still keeping approximately 72,000 cripples - a legacy from the war which we had no voice in making. Something should be clone to force the issue.

Mr HOLLOWAY:
Melbourne Ports

– A remarkable feature of this debate is that honorable members of all parties agree that the time has arrived when such a debate should .take place. Nobody has suggested that it is improper to raise the subject at this time, or that there is any danger in so doing. The most optimistic note in. the dismal reply of the Government was struck by the AttorneyGeneral (Mr. Latham) who suggested, if he did not ‘actually say, that we should continue to be patient .a little longer, because there was a possibility of an. arrangement being arrived at for the complete cancellation of debts. Those were not his actual words, but that seemed to be the idea running through his mind, and the. cancellation of debts is certainly something which many thinking persons in this and other countries have been hoping for during the last twelve months or more.

Mr Latham:

– I was speaking of war debts only.

Mr HOLLOWAY:

– Most of the leading financial experts and economists have been in agreement for the last two or three years that the only hope for rehabilitating the world generally, and various countries individually, lies in the complete cancellation of international debts. They should wipe the slate clean, and get back to a footing upon which international trade would be possible, with a uniform ‘medium of exchange, and machinery for keeping it operating at a reasonably uniform level.

Mr Maxwell:

– Why stop at international debts; why not wipe out intranational debts as well?

Mr HOLLOWAY:

– The honorable member knows that the suggestion has been made in respect to international debt because it is the only way of remedying the present chaotic economic situation in relation to international trade. I still hope that some such arrangement will be arrived at - in. fact, it is inevitable - but we should be foolish, I believe, to wait on without doing anything, in the hope that, at some time in the future, an arrangement will bc come to for the cancellation of debts. I do not suggest that that was what the AttorneyGeneral meant, but I say that it would be foolish to sit with folded hands, and hope, like Mieawber, for something to turn up, as we have been doing for the last two years. We should not pin all our hopes on what a world international conference might achieve in the future. Everybody is beginning to realize now that it would not be unfair for Australia to say boldly that she cannot, and should not, continue to bear the burden she has been bearing. An Australian newspaper, discussing this subject, asked how long Australia could stagger on. I go further than that, and ask, how long should we continue to stagger on without seeking some remedy. I believe that we should pay on a basis having some relation to the conditions which existed at the time the contract was entered- into. In view of the unsettled conditions which have obtained’ during the last few years, an arrangement of that kind would be eminently just. So far as war debts are concerned, Australia appears to be the Cinderella among the nations. There has been much talk of honouring our obligations; of avoiding repudiation and safeguarding our national honour; but there is such a thing as super-virtuousness, of setting too high a standard for ourselves to maintain. No other country in the world has even tried to do what Australia has done. Since the conclusion of the war, one nation after another has repudiated her debts, or part of them, and has received consideration from her creditors. We might bo proud of the part Great Britain has played if she had been as generous to her own children as she has been to foreigners. Since the war, she has pampered a dozen foreign countries financially, but never once has she held out her hand to help Australia. A country which quietly goes on draining the resources of its people in an endeavour to carry an impossible interest burden will never get any redress, whereas, another country which either repudiates its obligations,- or suggests doing so, receives consideration. I do not say that Australia should repudiate ; but I do suggest that we should not any longer starve our people, and bring our industries to a state of insolvency, by trying to do the impossible. We should not attempt to pay every farthing of interest which we are supposed to owe, and, in addition, a sum of about £10,000,000 per annum caused by the deflationary process which started outside Australia. That deflation has added to our original obligations ; and surely Australia is justified in seeking redress. Great Britain has asked the United States of America for relief, and has received it. Similarly, France, Italy, Austria, and many central European countries have been granted relief. Some of those countries have stated that they will not pay at all. Great Britain has made gifts amounting to many millions of pounds to struggling central European countries in order to keep them solvent; but she has not relaxed to the extent of one penny in regard to Australia’s indebtedness. I submit that Australia does not owe what her creditors claim. Six months ago, I asked the Prime Minister whether he did not think that the time was then ripe to enter into negotiations for the adjustment ‘of Australia’s overseas indebtedness on the basis of the conditions which existed at the time that the contracts were entered into. If this discussion to-day leads the Government to make a more definite claim on the British Government for consideration than has yet been made, it will do good, for it will mean that Australia’s case will be considered. So long as we sit down” and adopt what, speaking comparatively, may be described as a cowardly attitude, we shall not do our duty to the people of this country.

The standard of living, and the measure of prosperity in Australia to-day are lower than for many years. Unfortunately, those lowered standards are being accepted as real standards; our people are becoming content to accept relief ot to live on the dole. Instead of sending overseas every farthing that is demanded of us, the Australian Government should tell the people there that the time has arrived for a. reconsideration of Australia’s interest indebtedness.

Mr GABB:
Angas

.- Some one has said that political leaders are never far in advance of public opinion. In moving his motion to-day, the Leader of the Opposition (Mr. Scullin) has rightly interpreted public opinion in this country. I am’ disappointed at the paucity of information made available to us to-day by the two leading members of the Government, although I recognize that this is a difficult subject, and that they must be guarded in any statements which they may make. I am disappointed also that greater progress has riot been made in the direction of lifting some of the burdens from our people, particularly when I reflect on what the people have suffered in order to meet their country’s obligations. Although Australians are a long-suffering people, it is possible to overtax their willingness to suffer. This debate to-day will achieve much good if it lead’s overseas investors to realize the importance of recent votes in Australia, particularly the recent referendum in New South Wales. That vote indicates the extent to which public opinion in , New South Wales has swung from what it was twelve months ago. Should the difficulties facing us remain - and the indications are that they will - there will be a still greater swing, and the result may be that overseas investors will find that Australia will go further in the direction of repudiation than this country has gone hitherto. Unless overseas bondholders learn this lesson, they will only add fuel to the flames which, if unchecked, will destroy both their securities and their wealth.

Mr ROSEVEAR:
Dalley

.- The importance of this discussion cannot be over-estimated. With the exception of the honorable member for Corio (Mr. Casey), those honorable members who have spoken have agreed that the time has come for plain speaking. In my opinion, we are about two and a half years too late with our plain speaking. During that period, the people of Australia, irrespective of their walk in life, have suffered in order to meet’ a burden which some of us two and a half years ago said was impossible. Those who scoffed at us when we proposed certain interest reductions to relieve those who were suffering then, are now agreed that something must bo done to meet a position which wo in this party believed and said would inevitably come. Amid a number of satirical statements, the Attorney-General (Mr. Latham) was good enough to give some credit this afternoon to the honorable member for West Sydney (Mr. Beasley) whose statements, he said, would have the effect of warning financiers overseas of the growing feeling in Australia in favour of the views which the honorable member for We3t Sydney expressed. Although the AttorneyGeneral professes utterly to abhor all suggestion of repudiation, he still seems no hope that in the near future some of Australia’s war debts will be cancelled. I fail to see any difference between the cancellation of a debt and its repudiation; in either case the bondholder goes without his money. Apparently, he fails to realize that that cancellation would be equally a repudiation in the sight of the bondholders who invested their money in war loans, and while he hope3 for repudiation per medium of cancellation he has not the courage to take a determined ‘ stand and demand it. Had we thrown down the gauntlet two and a half year3 ago, we should have received the relief which Great Britain received when she threw down the gauntlet to the United States of America. It may be, . as the honorable member for Gippsland (Mr. Paterson) said, that Great Britain had always honoured her obligations; but the honorable member will not deny that when Great Britain honoured her obligations in December last she did so with had grace. Apparently the British Cabinet is divided between continuing to pay interest to the United States of America, and repudiation. When Great Britain paid that nation last December, she claimed that the money was to be written off the principal, and was not to be considered as a payment of interest. The attitude of the British Government has borne fruit; it caused the American nation to alter its previous unbending attitude not to scale down its interest charges and to consider the wiping off of debts generally. It would appear that the principal defaulting nations are foreign countries, particularly those in South America. The Leader of the Opposition stressed that the Argentine had repudiated its obligations to Great Britain, and yet had been able to negotiate a better trade agreement with Great Britain than Australia can arrange. It may be satisfaction to some people to know that Australia has an honorable record, and has met all her obligations; but the fact cannot be denied that she has done so by starving her own people. At last, those who were responsible for that policy of starvation are beginning to see that it does not pay, and that it cannot continue interminably. The truth is dawning on them that the more we starve our people and reduce their wages the more we reduce their purchasing capacity, and that, consequently, there is less possibility than ever of Australia meeting her obligations, either at home or abroad. The Leader of the Opposition claimed that the Opposition had up to date remained quiet on this subject. In my Opinion it has remained silent too long. For eighteen months the Government has been fooling the people with specious promises of a restoration of confidence and a return to prosperity. The Government has raised a number of bogies, and no doubt it will continue to raise them. A mere recital of what the Resident Minister in London (Mr. Bruce) has accomplished, or has failed to accomplish, will avail nothing. The fact remains that the right honorable gentleman, when discussing the Financial Agreement Enforcement Bill in this chamber less than eighteen months ago, made it clear that he would have nothing to do with the scaling down of interest charges. To-day he is forced to advocate in London the very thing which he then denounced. The Prime Minister (Mr. Lyons) told us to-day that it would be unwise to take action until after the World Economic Conference. He seeks to erect a new barrier. The same thing was said before the Ottawa Conference. In its issue of the 29th August, 1932, the London Daily Mail, referring to the Ottawa Conference, stated - “ It would be folly “, says the city editor of the Daily Mail, in discussing the embargo on new issues, “ to jeopardize the success of the Commonwealth conversion loan by enabling the foreigner to borrow again in London

He adds that the Treasury wisely refused to bow to an unjustifiable clamour largely inspired by those directly or indirectly interested in the new issue market. Certain foreign cities desiring to borrow in London must not be given facilities, and anyavailable funds should be utilized for British, dominions and colonial conversions. Britain cannot longer afford that indiscriminate foreign lending which proved so costly in the past.

The Daily Mail considers that the success of the Ottawa Conference ensures satisfactory Australian and dominion borrowing.

Before the Ottawa. Conference we were told that its success would ensure to the dominions better treatment in the London money market; but every endeavour to claim that treatment has been a dismal failure. The Attorney-General urged that it would be unwise to disclose the Government’s intention, because that would enable speculators to make fortunes. I do not consider him so unsophisticated as not to know that, during the present depression, speculators have already amassed fortunes by buying up the bonds held by victims of the depression at bargain prices. The honorable member for Melbourne Ports (Mr. Holloway) has said that Australia should not, and cannot, continue to pay the exorbitant rates of interest now charged; but I maintain that this Parliament should declare that Australia will not continue to do so. I am convinced that the only effective way to talk to the financial interests is to use the same threatening attitude as that which they adopt. That was the only method that Britain found successful in her financial difficulties with the United States of America. Similarly, France and Italy said to Great Britain : “ That is what we can afford to pay, and that is what we, are going to pay.” It was not until those countries took that definite stand that they obtained consideration from their creditors.

Mr SPEAKER:

– The honorable member’s time has expired.

Mr.NAIRN (Perth) [5.17].- Like other private members, I am not in possession of the details of the financial negotiations that have been proceeding between the Commonwealth and the British Government; but I think that we must recognize that, whatever government is in power, it must be trusted to use a wise discretion in these matters. I do not conceal the fact that I am disappointed with the turn that events have taken, and I find it difficult to attribute the position wholly, or even mainly, to the situation in Germany, for these negotiations have been in progress for six months. Two things, I think, are certain. One is that the people of Australia will not consent to pay interest at the rate of 6 per cent. indefinitely, and the other is that the position regarding the money owing to the United States of America is intolerable, because, for some of it we are charged 7 per cent. There is the further difference that whereas we have had generous treatment from the British Government, we have not been shown similar consideration by the United States of America. It seems to me that we shall not be satisfied with the piecemeal conversion of our huge debt. The suggestion was made that we might, at periods, when the market was favorable, get conversions of loans amounting to £10,000,000 oreven £20,000,000 ; but that, in my opinion, will not meet the situation. We must obtain a general conversion of our overseas indebtedness, on the same lines as those on which we brought about the conversion of our internal debt. Of course, the great difficulty is that although we cun legislate to deal with our own bondholders, we cannot, unless we repudiate our indebtedness, affect the legal rights of overseas bondholders, and there is the practical difficulty of getting into touch with them.

It seems to me that if this conversion is to be successfully carriedout, we must secure substantial support from our present creditors. We cannot hope to raise entirely new money to enable us to pay off anything like the bulk of the present bondholders. The operation should, in substance, be a bulk conversion into which the present oversea bondholders, by consent, convert their bonds into new bonds at a lower rate of interest. Our appeal, therefore, whatever form it takes, must be made to our creditors as a whole. 1 believe that this debate will have some useful result. It will serve to convince our oversea creditors that’ it will be in their interest to accept a secure bond, bearing interest at 4 per cent;, rather than hold out for an interest payment of .6 per cent, from an unwilling people. I observed, in connexion with the conversion of our internal loans, that although the rate of interest was substantially reduced, security was given to the bondholders, and the capital value of the bonds was materially increased. There would be a’ similar result from the conversion at a lower rate of interest of our trustee bonds abroad, because even now, those bonds have not a capital value which is proportionate to the interest which they yield. The reason for this is that there is not a complete sense of security regarding them. The first consideration of the trustee is the maintenance of a security which will have a capital realization value of, at least, par. Therefore, I think that bondholders overseas will realize that ‘it would be in their interests to convert a security which, admittedly, is not quite so satisfactory as they could wish, into one which, while bearing a lower interest rate, would be, nevertheless, backed by the goodwill of the Australian people.

Dr MALONEY:
Melbourne

.- The need for the conversion of our overseas loans at the reduced rates of interest was first brought under the notice of the House as the result of questions which I submitted to the Bruce-Page Government, when I obtained from the former Prime Minister, Mr. Bruce, in answer to a question, the statement that the United States of America had issued liberty bonds at 5 per cent, and 4^ per cent., and that that had enabled that country to lend money cheaply to Britain. The United States of America was so generous to Great Britain that for ten years she charged only 3 per cent, interest on the money she lent to that country, and afterwards 3$ per cent. Prom that time I have always contended that Australia should be treated by Britain in a similar manner. But, as the son of an English woman, and as one who loves England, I regret to say that England has not seen her way clear to do that. I have been very disappointed over the treatment that Australia has received. As to our overseas debt. I suggest that we should pay the interest due to British bondholders into the Commonwealth Savings Bank, where it would bear interest, and, if the Government desired, it could raise the bank interest rates on the money so deposited to the rate payable on the bonds. In this way we should save the 25 per cent, that now has to be paid on remittances from Australia to England. If to save £25 on every £100 sent to England would benefit thi3 country, how much more would it benefit us to save nearly the whole £100; because the rate of exchange in America is rapidly reaching 100 per cent. It is infamous that we have to pay an extra £79 on every £100 of interest that we send to America. The National Geographical Society, which has 1,000,000 members throughout the world, is now willing to accept payment of its membership fees from members in Australia at the British rate of exchange of 25 per cent, instead of the rate of 79 per cent That example, I think, ought to be followed by the Government of the United States of America in its dealings with its debtors abroad.

The honorable member for Gippsland (Mr. Paterson) referred to the amount of £93,000,000, on which Australia pays from 5 per cent, to 6^ per cent, interest. Of course, on every £100 we send to Britain, there is an additional £25 by way of exchange; but I am sure that, if the people of this country were ever given an opportunity to vote on the matter, they would wipe out the payment of exchange

Motion (by Mr. “Ward) put -

That the question he now put.

The House divided. (Ma. Speaker - Hon. G. H. Mackay.)

AYES: 17

NOES: 48

Majority 31

In division:

AYES

NOES

Question resolved in the negative.

The debate, having continued for two hours, was terminated under Standing Order No. 257 b.

page 1466

PAPERS

The following papers were presented : -

Lands Acquisition Act - Land acquired at Corowa, New South Wales - For Defence purposes.

Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinances of 1933 -

No. 8 - Judgment Creditors Remedies.

No. 9 - Administration and Probate.

page 1466

ORDER OF BUSINESS

Mr LATHAM:
AttorneyGeneral · Kooyong · UAP

– I move -

That consideration of orders of the day Nos. 1 and 2 be postponed until after the consideration of order of the day No. 3.

My object in moving this motion is to make it possible for me to move that order of the day No. 3, Seat of Government Supreme Court Bill, be discharged from the business paper. Since this bill was introduced and read a first time, the subject of the administration of justice in the Federal Capital Territory has been further examined. I am now in a position to introduce a greatly improved bill, and I propose to do so at an early date. Upon the discharge of order of the day No. 3 from the business paper, consideration of the tariff will be resumed.

Mr BEASLEY:
West Sydney

– I do not know whether any honorable members have been advised of this proposal to alter the order of business, but [ had no knowledge of it until the motion was moved. I take this opportunity of intimating to the Government that the party which I have the honour to lead will not consent to any change in the order of business unless honorable members have been notified of it sufficiently far ahead to enable them to adjust their plans accordingly, and adequate reason is given for the alteration. The Attorney-General (Mr. Latham) has stated that the reason for this proposed change is that the Government is in the position to introduce a greatly improved bill. That can be determined when the bill is introduced. If there is no urgent need for the introduction of the other bill, why should the order of business be altered? I intimate to Ministers generally that honorable members of my party will not approve of any alteration in the order of business unless they are treated with the same courtesy that is extended to the members of other parties. On this occasion, the point at issue may not be contentious, but I deem it advisable to make our position clear to the Government.

Mr.SCULLIN (Yarra) [5.38].-I agree that alterations of the order of business should not be sprung on honorable members; but the Attorney-General (Mr. Latham) has merely moved that consideration of orders of the day Nos. 1 and 2 be postponed in order that he may move for the discharge of order of the day No. 3. If the House agrees to the discharge of that item from the noticepaper, consideration will then be resumed of order of the day No. 1.

Mr. LATHAM (Kooyong - Attorney-

General) [5.39]. - The position is as the Leader of the Opposition (Mr. Scullin) has stated. My object of moving for the discharge of order of the day No. 3 from the notice-paper is to clear the way for the introduction of the new bill as soon as it is available.

Question resolved in the affirmative.

page 1467

SEAT OF GOVERNMENT SUPREME COURT BILL

Order of the day read for the resumption of the debate on the motion -

That the bill bo now read a second time.

Bill (on motion by Mr. Latham) discharged from the notice-paper.

page 1467

TARIFF PROPOSALS (1932-1933)

Customs Tariff (1932) : Special Duties (No. 4) : Primage Duties (No. 2) : Customs Duties (Canadian Preference, No. 2) : Customs Tariff Amendment (No. 1) : Special Customs Duties (No. 5): Excise Tariff Amendment (No. 3)

In Committee of Ways and Means:

Consideration resumed from the 12th May (vide page 1432), on motion by Sir Henry Gullett (vide page 1167, volume 135) -

  1. That on and after the fourteenth day of October, One thousand nine hundred and thirty-two, at nine o’clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, duties of customs at the rates respectively specified in the column of the schedule hereto headed “ British preferential tariff “ be imposed on goods the produce or manufacture of the United Kingdom.

And on motion by Mr. White (vide page 29) -

  1. That the schedule to the Customs Tariff Proposals introduced into the House of Representatives on the thirteenth day of October, One thousand nine hundred and thirty-two be amended as hereunder set out.

And on further motion by Mr. White (vide page 1094).

Group 3. - Items which were passed by the House of Representatives during 1932.

Division 2. - Tobacco and Manufactures Thereof

Postponed item 19, sub-items (a) (b) (Tobacco).

Mr.RIORDAN (Kennedy) [5.40].. - I ask the Minister to agree to a further postponement of this item. A deputation of representatives of the tobacco-growers of Australia has come to Canberra with the object of requesting the Government to agree to a compromise in regard to the tobacco duties. Practically no buyers of tobacco leaf are operating this season in the far north of Queensland, and, according to telegrams that I have received, it appears to be unlikely that any will operate there in the near future. If the Minister will not himself propose another postponement of the consideration of this item, I shall move that itbe postponed with a view to obtaining a readjustment of the duties, and a compromise as between the duties of 1931 and those now operating. The Labour party believes that the degree of protection given to the Australian tobacco industry by the Scullin Government -should be continued, but apparently it is impossible to achieve that end until there is a change of government. The protection given to the tobacco-growing industry by the Scullin Government led to the investment of a good deal of fresh capital and the provision of a good dealof regular employment in it. This work was provided at a time when employment of such a character was badly needed. During the last election campaign the candidates of the parties supporting the present Government declared in our tobaccos-growing districts that, if a change of government occurred, no alteration would be made in the tobacco duties; but; shortly after the election, an announcement was made that the duties on imported leaf would be reduced, and the excise on Australian-grown, leaf increased. The. result was that the price of the Australiangrown leaf advanced to such a point that it was economical for the manufacturers to buy the imported leaf. A deputation of representatives of the tobacco-growers waited upon the Prime Minister (Mr. Lyons) and the then Minister for Trade and Customs (Sir Henry Gullett) at that time and expressed the views of the tobaccogrowers on the subject. Both Ministers informed the deputation that protection would be given to the industry to the extent that for last season a limit would be placed on the imports of tobacco, and a guarantee would be given that the leaf grown by the Australian producers would be purchased at an average price of 2s. 3d. per lb. I have been given to understand that imports were limited, and the promised price for Australian leaf was paid ; but I desire to know why the agreement was not renewed for this season. The tobacco-growing industry has made rapid strides; but the .interests of the growers in my own district and in that portion of Queensland north of the 20th parallel, which officers of the Council for Scientific and Industrial Research have declared will eventually produce sufficient Australian leaf to meet all our requirements, are being sacrificed by this Government. The Queensland Government has made available as rapidly as possible large areas of land for tobacco cultivation. It cannot be said that smokers have been exploited because of the high value of tobacco-land in Queensland, for land admirably suited for the purpose can be obtained near Mareeba at an initial cost of only £10 an acre. If the owner is unable to pay the full cost immediately, and has the area cleared by relief labour, his land costs him about £12 an acre, which amount he can have spread over a period of ten years.

One difficulty associated with the industry, particularly to those manufacturers who operate in a small way, is that tobacco leaf must be matured, preferably for two years. In this respect combines have a great advantage over their less financial competitors. Incidentally, I congratulate the British-Australasian Tobacco Company for having marketed an excellent product in fine cut tobacco, known as QLD, which is equal, if not superior, to any that is imported. Though that brand is marketed extensively in New South Wales and Queensland, it is rarely seen in Victoria, which indicates that evidently there is a shortage of supply. It costs a small manufacturer from £50,000 to £60,000 to purchase his leaf requirements, which he must hold for a couple of years. It would greatly assist such concerns if the Government could arrange for the State Agricultural Departments to purchase a portion of the crop and keep it until maturity, and would ensure a better price for the grower. It is not right to throw growers on the mercy of the manufacturers, whether large or small, and the practice is totally opposed to the promise made by the Government when the industry was revived. The tobacco industry provides considerable revenue to the Government, and receives very little monetary encouragement in return. If this item were postponed to enable the matter of excise to be discussed, it might’ be possible to effect a reduction of ls. per lb. in excise, which amount could be added to the duty on imported leaf, so maintaining the margin of protection between local and foreign tobaccoes without disturbing the revenues.

To indicate how beneficial the industry is, I instance the experience of a small town in my electorate, Mareeba, where, since the inception of tobacco-growing in the district a few years ago, as a result of the Scullin tariff, there are now 535 growers engaged in the industry, nearly all of whom are married men with families. Assuming that each family averages four persons, that represents an increase of about 2,000 in the_ population, who, by providing direct and indirect employment, are responsible for an addition of another 3,000. Therefore, the industry deserves encouragement. Admittedly, growers will not be able to pay income tax for a few years, for their initial costs are considerable, and include charges for the erection of a home, barns, fencing, and cultivation.

Mr RIORDAN:
KENNEDY, QUEENSLAND

– That is so, through the medium of the excise. Previously the railway which runs through Mareeba to Chillagoe did not even pay axle grease. Now, as a result of the activities of the tobacco-growers, it is a paying proposition, and a valuable asset. That land would not carry two beasts to the square mile, yet from Mareeba to Dimbulah, through to Chillagoe, it is now permanently settled and of value to the nation. As quickly as this leasehold land has reverted to the

Grown it has been made available for tobacco-growing, and there is still a good deal of it that can be used to develop the industry.

Although the Prime Minister will not admit it, one of his many, many promises during the last election campaign was to the effect that existing duties on tobacco wOuld not be interfered with without referring the matter to the Tariff Board. A select committee inquired into the tobacco industry, took voluminous evidence, and made certain recommendations to the Scullin Government, as a result of which that administration decided to protect the industry by imposing a duty of f.s. 2d. per lb. on imported tobacco leaf. When the Lyons Government came into power, that duty was reduced to 3s., and the excise raised from 2s. 4d. to 4s. 6d. per lb. My colleagues and I urge that the margin of preference which previously existed should be reinstated, as the industry has progressed, and justified its establishment and protection. If the Government is not prepared to do that, it should effect a reduction of ls. per lb. in the excise, and add ls. per lb. to the duty on foreign leaf. When the growers enjoyed a protection of 5s. 2d. per lb., they did not exploit the public; on the contrary, they sold their product at a price lower than that charged for imported tobacco. I contend that if the 1931 rates of duty and excise were reverted to, Australian tobacco could be sold for 2s. per lb. less than imported tobacco. As honorable members know, it takes quite a while to educate the public taste in tobacco. The demand in Australia is mainly for light loaf, suitable for manufacturing into finecut tobacco for cigarette-making purposes. As yet, the greater portion of our crop is dark leaf. I have visited the tobaccogrowing areas about Mareeba, and have noticed that an excellent light leaf is extensively produced which should suit the public taste. The production of that class of leaf will extend, and if other growers in Australia follow a similar policy, it should not be long before our manufacturers are able to produce the whole of our tobacco requirements. Only to-day, I received a letter from a gentleman who is visiting Australia in connexion with the timber industry, in which he refers to trade with the United States of

America, and the talk of that country reducing its duties in order to capture foreign trade. With a population of 120,000,000, that country is unlikely to reduce its duties in order to capture the relatively small amount of foreign trade that is available to it. It should be unthinkable then, that we should set about reducing our duties, so throwing many persons out of employment, to enable American tobacco producers to supply us with an article grown under what are practically black-labour conditions. Like the dairying and many other agricultural industries, the tobacco industry gives permanency of employment. It provides security and stability to those engaged in it, and enables them to build homes. It is amazing that the present Federal Government, which claims to represent the people of Australia in this National Parliament, and professes to desire to foster Australian industry and sentiments, should be prepared to sacrifice such a valuable industry in favour of the blackgrown product of the United States of America. Already there are from eight to ten thousand persons directly engaged in the tobacco industry of Australia. If we fail to give them the necessary protection, they will be thrown out of employment, together with thousands of others who are indirectly connected with the industry, and who have been enabled by it to keep off the dole. In 1930-3i, more than 3,000,000 lb. of Australian leaf was manufactured, compared with less than 1,000,000 lb. in 192S-29. The reason for the request for the postponement of the item is, that we wish the Government again to hear the case for the tobacco-grower. Failing that, I suggest that the import duty be made 4s. 6d. per lb., and the excise 3s. per lb., thus maintaining the existing margin of preference in favour of the Australian leaf. Last year the President of the Brisbane Chamber of Commerce, Mr. Russell, who is a Nationalist member in the State Parliament, sent me the following telegram: -

We earnestly request Government restore rates customs duty to five and two pence pound on imported leaf tobacco and excise duty to two and four pence on tobacco manufactured n.e.i. until present crop disposed of. Before any alterations made in duties recommend those engaged in the industry be given opportunity conference Government.

The position is worse to-day than it was when that request was made. About 50 or 60 tobacco-growers’ associations in the northern part of Queensland have wired asking that representations he made to the Government in favour of the restoration of the duty to the scale adopted by the Scullin Government ; failing which, that the margin of preference should be 4s. 6d. per lb. I understood that a deputation was to wait on the Minister tomorrow morning, but I have since been informed that he met it this afternoon. 1 regret that I was unaware of the change, and that, on that account, I was not present. I have always been keenly interested in this matter. Early in the history of the reduced duties I took an active part in the campaign against them, but the Government “ put it all over us “ by moving the adjournment of the debate, when it appeared that a majority of honorable members was opposed to its policy. The Country party accepted the assurance of the then Minister for Trade and Customs that a further opportunity would be given to debate the matter, but that opportunity did not arrive until to-day. What excuse can be offered by members of the Country party, and by Government members who represent tobacco-growing areas, if they oppose the amendment for the reduction of the excise ?

Mr Hill:

– The honorable member should have been at the deputation this afternoon.

Mr RIORDAN:

– The honorable member for Echuca is well aware that T have represented the case for the tobaccogrowers throughout. Had I known that the deputation was to be held this afternoon, and learned that the honorable member was unaware of that fact, I would have seen that he was informed of it. The honorable member for New England (Mr. Thompson) told me that an effort was to be made to have the tobacco item postponed pending a deputation on the subject to-morrow. I promised to support the ‘ postponement, and consider that hs ought to have acquainted me of the alteration of plans. When the honorable member for Henty (Sir Henry Gullett) was Minister for Trade and Customs, he said that the protection given to the industry amounted to over 400 per cent. It is deserving of even that measure of protection until it is able to stand on its feet. I feel sure that the Country party no longer trusts the Government in this matter, and that if a compromise is not agreed to, there are, in the committee a sufficient number of honorable members to see that the wishes of those who are engaged in the industry are complied with. In the absence of any assurance from the Minister, I move -

That the item be further postponed.

Mr THOMPSON:
New England

– I support the amendment of the honorable member for Kennedy (Mr. Riordan). His proposal is an eminently fair one, in view of the parlous condition of the tobacco-growing industry.

I had no intention of overlooking the honorable member in connexion with the deputation that met the Minister this afternoon. The Minister informed me only a few minutes before 4 o’clock that the item could not be postponed, and said that he was quite agreeable to meeting the deputation immediately. I and a few others then had an informal talk with him in his room. I assure the honorable member for Kennedy that the interests of the Queensland growers were well represented.

Mr Forde:

– I remind the honorable member that I also was not advised of the deputation this afternoon.

Mr THOMPSON:

– I fear that quite a number of honorable members were overlooked. The Minister could give us. only a few minutes of his time, and we had to do the best that we could in the circumstances.

The Government would be acting most unwisely if it proceeded with the item without giving the growers’ representatives - some of whom have not yet arrived in Canberra. - an opportunity to meet the Minister for Trade and Customs (Mr. White) and the Prime Minister (Mr. Lyons) to-morrow. The refusal of the Minister to postpone the item rather astonished me.

Mr White:

– I was asked just as the debate was about to commence.

Mr THOMPSON:

– The Minister knew that the representatives of the growers were coming to Canberra.

Mr White:

– Not until the honorable member told me so to-day.

Mr THOMPSON:

– I understand that the honorable member for Forrest (Mr. Prowse) was informed by the Prime Minister that the Minister for Trade and Customs would receive a deputation tomorrow.

Mr.White. - I was not informed of it.

Mr THOMPSON:

– Apparently the Minister himself has been let down. In those circumstances, he must realize the necessity for postponing the item, so that all misunderstandings may be cleared up. The Prime Minister has shown a disposition to take a hand in the matter, and serious complications might arise if it were pushed now.

In the last few weeks I have had many opportunities for coming to close quarters with this industry in the northern part of New South Wales and on the Queensland border. I assure honorable members that those who desire to see the industry saved for Australia should refrain from hastily coming to a decision on this item. Hundreds of men who put all their money into the industry as far back as two years ago, managed to sell their crop last year, and in the belief that the existing conditions would continue, improved the quality of their leaf. In many localities amazing results were obtained. First grade tobacco leaf from this year’s crop is now lying in the sheds, and the growers have no idea when the buyers will visit them. They say, “ We have grown the tobacco. Are we going to sell it ? “ There is no humour in the situation for men who probably have no other source of income. I have been asked to press strongly for a settlement of the matter, so that the growers will know whether the leaf grown this year is to be bought, and whether it is of any use their remaining in the industry.

Sitting suspended from 6.15 to 8 p.m.

Mr THOMPSON:

– I appeal to the Minister to postpone this item, because of the great issue at stake. I cannot see why the Government should be so anxious to rush it through to-night, particularly as the representatives of the growers are likely to be in Canberra to-morrow toput the whole case for the growers. If we postpone the item, their suggestions to help the industry out of its difficulty can be carefully considered by all parties, and a change of policy may be effected before it is too late. If the item is passed tonight, it will have to stand for some time, because after next week the House will be in recess. As I have pointed out, this year’s crop is already in the barns, and it will be unsettling and worrying for thousands of growers if this House is in recess and there is no possibility of effecting any tariff alteration. Considering the importance that this industry has assumed, it must be admitted that our request for a postponement of the item, until the growers can come face to face with the Prime Minister (Mr. Lyons) and the Minister for Trade and Customs (Mr. White), is reasonable. This is not a tinpot industry. It not only employs thousands of workers, but also contributes to the revenue of the Government. I submit that an industry which is contributing a revenue of £7,000,000 or more to the Commonwealth is entitled to be regarded by the Government as of some importance and not cheaply.

What is the actual value of this industry which appears to be taken so cheaply by the Government? I shall not consider for one moment the argument that a false boom was created in the industry, because the fact remains that the growers last year - which was the peak year - produced only a little more than half of the quantity of tobacco normally consumed in the home market in one year. It is absolutely ridiculous, therefore, to claim that the industry is suffering from an unhealthy boom. If there were a boom, it was only half a boom. There were in this industry over 4,000 registered growers scattered all over Australia. I admit that the majority of them were in Queensland but there was a large number in New South Wales and Victoria.

Mr Lane:

– There was a large number in the electorate of New England.

Mr THOMPSON:

– Only a comparatively small proportion. The fact that the growers are scattered all over Australia completely disposes of the contention that I am fighting for an industry which solely concerns my own electorate. There were 25,000 acres of land under tobacco cultivation last year, which is a large addition to the primaryproducing land of Australia. I am quite safe in saying that last year at least 15,000 workers of various grades were employed in the industry. There were probably many more, because we can safely assume that each grower would provide employment for three or four workers, while some would provide employment for six or seven workers apiece. The cash value of the total output last year was about £1,250,000, so that from that point of view alone the industry is a long way past the tinpot stage. The total quantity of tobacco grown was 12,000,000 lb., which was a little more than half the annual consumption of tobacco in Australia. In one year this industry showed that it was capable of producing half of the tobacco consumed in Australia.

Mr Hughes:

– What was the total consumption ?

Mr THOMPSON:

– About 21,000,000 lb. By producing more than half of the total consumption of tobacco in Australia, this industry has shown that it has a wonderful capacity for expansion.

Mr.Hutchin. - It did not produce more than half of Australia’s requirements of consumable leaf.

Mr THOMPSON:

– The manufacturers purchased 8,000,000 lb. of leaf at an average price of 2s. 3d. One would hardly think that they would be so foolish as to pay that price for leaf which was not consumable. They purchased another 2,000,000 lb. at a lower price. Another 2,000,000 lb. was left on the hands of the growers, the manufacturers claiming that the leaf was absolutely unusable. That was a deliberate misstatement; they simply bought as much leaf as they wanted, and decided not to buy any more. Some tobacco which they refused to buy was sent to Brisbane, purchased at auction by small manufacturers, and actually sold in the city shops as firstclass American tobacco. I have with me samples of that tobacco, which may be seen by honorable members. It was sold, not under an Australian name, but under numbers 1, 2 or 3. Some of it brought top prices. The purchasers were induced to ask for more,’ with the result that the retailers asked the manufacturers for as much of it as they could supply. That was tobacco which came from the despised district of Tamworth, and was claimed by some to be not worth 3d. a lb.

Mr Lane:

-Was not that the opinion of the expert employed by the Government of New South Wales?

Mr THOMPSON:

– The growers of New South Wales have no confidence in that expert. They do not consider that the Government of New South Wales has any right to employ a man to encourage the production of tobacco in Australia when he makes it his job to try to prove that tobacco leaf cannot be grown in New South Wales. That he knows nothing about the tobacco grown in that State was proved by the Select Committee on the Tobacco-growing Industry, and has also been proved by the lack of confidence which the growers have in him.

The figures I have given show that this industry is well worthy of the consideration of this Parliament, and should not be allowed to go out of existence as if it were of no account whatever. What is the position of these 4,000 growers? Last year they took thousands of men off the dole in the various States, and kept in this country over £1,000,000 which would otherwise have gone to the United States of America. In 1929-30, the value of the tobacco produced in Australia was £92,000, and that of the imported leaf was £1,768,000. Last year the value of the tobacco produced in Australia was £1,250,000, and that of the imported tobacco was £570,000. Is not that worth something to Australia? When we consider that £1,250,000 was distributed among 4,000 growers, and that from 15,000 to 20.000 workers were given employment, surely we must recognize that the industry is entitled to some consideration from this Government. What is the position this year? The total production of tobacco has declined by half. Last year the quantity produced was 12,000,000 lb.; this year we shall be fortunate if the total quantity produced is 6,000,000 lb.

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– What is the reason for the decline?

Mr THOMPSON:

– The reason is that many people have ceased to grow tobacco owing to the uncertainty of the industry. The figures which I have given are the estimates for the current year, and are absolutely correct. It is well known that this year the bulk of the Victorian tobacco leaf was destroyed by a late frost. A great deal of the tobacco leaf in New South Wales was destroyed by blue mould, and a large number of growers, who were not able to sell their tobacco last year, have grown none this year. Therefore, the estimate of a production of 6,000,000 lb. of tobacco, in Australia this year is an overstatement, and the Commonwealth will suffer a loss of revenue, and many people who previously received employment in this industry will probably be on the dole this year.

This afternoon the honorable member for Kennedy (Mr. Riordan) referred to the unfortunate position of the growers at Mareeba. I know that hundreds of growers in New South Wales and Queensland - I shall not mention the other States - are loaded up with tobacco, held over from last year and grown this year, and have not the vaguest prospect of a buyer. Only a few weeks ago I visited a number of tobacco farms. 1 saw quantities of excellent tobacco, quite as good in respect of colour as any tobacco brought from America. Yet the growers have practically no prospect of disposing of their crop this year. The Government altered the tariff on tobacco last year, mainly on the ground that the revenue had to be protected. It did not base its action upon the economic aspects of the industry so much as it did upon theneed for securing revenue. That point, I think, was emphasized by the honorable member for Henty (Sir Henry Gullett), when Minister for Trade and Customs last year. He said that, according tq advice received from, the Treasury or the Customs Department, there was a prospect of the Government losing heavily in its revenue from tobacco if the old tariff rates were maintained. I said at the time that the Minister did not know what he was talking about, and that his statement was purely guesswork. Other honorable members supported my contention. The Tariff Board said that it was a fair thing to derive from the industry a revenue of £6,500,000; yet, for the first, nine months of the following year, the tobacco industry yielded to the Government a revenue of £480,000, or, pro - rata, for the whole year, £640,000 above the board’s estimate.

Mr Paterson:

– That was more revenue than was expected.

Mr THOMPSON:

– lt was more than the estimate of the Tariff Board, about, which the Government made a lot of fuss, and upon which it largely based its alteration of the tariff. The Tariff Board said that it was fair to derive from the tobacco industry a revenue of £6,500,000. So it is when we remember that it is paid by smokers in Australia during a time of severe depression. These figures which cannot be controverted prove that those of us who advocated the cause of the Australian industry were right, and that the Government was wrong. Furthermore, they justify our request that -this item be not rushed through to-night, thus causing, possibly, the collapse of the industry. I have shown that the industry last year kept in Australia £1,250,000, which, in other circumstances, would have gone te the United States of America.That surely is deserving of consideration. I have also shown that the revenue estimate has been greatly exceeded. Surely the Government will give some crumbs of comfort to those thousands of growers, who, by producing a leaf suitable for Australian requirements, are giving valuable assistance to the revenue through excise duties? This is essentially a revenue-producing industry. It is, I suppose, about the best in the Commonwealth from that point of view. Also it gives employment to 4,000 tobaccogrowers, mostly small farmers, and to from 15,000 to 20,000 rural workers.

Mr Prowse:

– And our people should get cheaper tobacco.

Mr THOMPSON:

– Yes, and that is an important point to be borne in mind. Australian tobacco can be marketed at prices below the imported article. I have samples of excellent cigarettes made from tobacco grown in the Texas district, which, some experts have declared, is unsuitable for the growing of a satisfactory tobacco leaf. The manufacturers started a factory there but closed it down again. I appeal to the Government to postpone this item for another day, in order that the growers,: who were unaware that it was to be dealt with to-night, may to-morrow submit their case to Ministers. I urge the committee to consider carefully the position of the growers before a fatal hinder is made, because I am sure it will be a blunder to pass this item to-night. If the course which I suggest is taken, I think it will be possible to come to some arrangement which will be satisfactory not only to the Government, but also to the growers and the people of Australia.

Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP

.- The Government cannot accept the amendment to postpone the further consideration of this item. Discussion on it was postponed on the 28th March last on the motion of the honorable member for . Kennedy (Mr. Riordan), and partly at the urgent request of the honorable member for New England (Mr. Thompson) regarding the non-purchase of much of the Tamworth crop. A deputation did see me to-day about tobacco. I was unaware of their presence in Canberra until the honorable member for New England kindly informed me, and I saw them at once. I do not think I am disclosing any confidence when I say that their suggestion was largely iu the nature of the possibility of a reduction of the excise duty, which, I would remind the committee, is an entirely different matter from the import duty which we are now discussing. The deputation’s suggestion can be considered when we are dealing with the excise schedule. In the meantime, I ask the committee to pass this item.

I need not remind honorable members that the Australian tobacco industry is an important one, and that since my acceptance of the portfolio which I now hold, I have given a great deal of time to its study. In February last the Government, acting On a Tariff Board report which had been asked for by the previous Administration, reduced the import duty on tobacco leaf for the production of manufactured tobacco from 5s. 2d. per lb. to 3s. per lb., and, at the same time, increased the excise duty on manufactured tobacco from 2s. 2d. per lb. to 4s. 6d. per lb. As compared with the 1921-30 rates, the import duty on unstemmed leaf for the manufacture of tobacco, other than cigarette tobacco has been increased from 2s. to 3s. per lb., while the excise duty on manufactured tobacco has been increased from 2s. 4d. to 4s. 6d. per lb., so that the grower is now getting ls. per lb. more than under the regime of the Bruce-Page Government.

The import duty on unstemmed leaf for the manufacture of cigarettes and cigarette tobacco, has been increased from 2s. to 5s. 2d. per lb., while the excise duty on cigarettes has been increased from 7s. 3d. -to 7s. 6d. per lb. The proposed import duty on cigarette leaf, and the proposed excise duty on cigarettes are the same as those which were imposed by the previous administration. In this matter the Government has been guided by considerations for the revenue and the interests of the growers. The previous Government’s anxiety for the revenue position was all too evident, for, on the day following the receipt of the report of a select committee on tobacco production, the then Minister referred the question to the Tariff Board for inquiry as to the amount of protection necessary for the economic development of the Australian leaf-growing industry, so as to protect the revenue, while, at the same time, giving adequate protection to the Australian tobacco-growing industry.

Mr Scullin:

– A very sound reason.

Mr WHITE:

– And there was sound reason for the Tariff Board’s recommendations. The immediate problems confronting the present Government were, first, the safeguarding of the revenue, and, secondly, the prevention of the already too-evident uneconomic development of the tobacco-growing industry. So far as the revenue was concerned, the substitution of every pound of imported leaf by Australian leaf meant a loss of 5s. 2d. At the time the duty was altered it was estimated that the year’s crop would total 10,000,000.1b. The’ actual yield was over 13,500,000 lb., but on a usable crop of 10,000,000 lb. the loss of revenue would have exceeded £2,500,000. I wish to emphasize that, tobacco has always been regarded as a rightful revenue field. Other avenues of revenue had been closed, and with the rapid increase in the production of Australian leaf there was no alternative but to increase the excise duty on manufactured tobacco.

The Government’s intention in reducing the import duty was to prevent an undue expansion of the growing of unsuitable leaf. The whole of the argument of the honorable member for New England this evening centred round that point. His contention was that ‘leaf which had been declared to he unsuitable, for smoking at any rate, should be bought by some one. Although it is not the business of the Government to sell growers’ crops, and a very good arrangement was made last year, it is the business pf the growers to cultivate a leaf capable of being sold.

Mr Thompson:

– Have not they been doing that?

Mr WHITE:

– I intend to read a report which, I think, will convince even the honorable member for New England that the growers of his district have not been cultivating a suitable leaf.

The Scullin Government was warned by a committee specially set up to consider the problem that an unhealthy development was taking place in the tobacco-growing industry, due to over-production, and that, if left uncontrolled, it would present difficulties similar in all respects to those encountered in the sugar industry. The wisdom of the Government’s action is best seen by studying the experience of the 1932 season, when approximately 2,500,000 lb. of unsuitable leaf was produced, about 1,100,000 lb. of it in the Tamworth district.

Mr Thompson:

– That is not true.

Mr WHITE:

– If it is not true, will the honorable member state the exact quantity of unsuitable leaf?

Mr Thompson:

– I say it was all suitable.

Mr WHITE:

– I have received the report of Mr. G. E. Marks, the senior agronomist of the Council for Scientific and Industrial Research, who was sent to the Tamworth district following allegations made by the honorable member that growers in that part of the State were being victimized by the manufacturers, in consequence of representations which the honorable member had made in this chamber.

Mr Thompson:

– That is so.

Mr WHITE:

– I have now the. report of Mr. Marks. This expert states -

Considerable quantities of tobacco leaf having been stored in the immediate town, a commencement was made upon these lots on the 7th April. On Monday, the 10th. the inspection was continued, in company- with Mr. W. C. .Parkes, President of the Northern

Tobacco Growers’ Association, on farms immediately adjacent to the town. A great number of these were cultivated by Chinese growers, many of whom are on the share system on a 50-50 basis.

I do not disparage the product merely because the growers are Chinese, but from another source I am informed that 52 per cent, of the tobacco leaf grown in the Tamworth district is produced by Chinese. Although they belong to an industrious race and are credited with the ability to excel in the cabbage garden, 1 suggest there is a great difference between the growing of cabbages and the growing of tobacco leaf. The report continues-

I might mention that hare, as well aa throughout the general tour, much ignorance was displayed by most of the growers regarding the more improved methods of growing, curing and handling of the crop in general. Particularly evident was the lack of cultivation, which accounts, to a large extent, for poor texture and, to some extent, inferior aroma. Cultivation is of vital importance in a dry hot climate, such as the one in question. Leaf grown under such conditions is immature, or. in other words, not completely developed, and contains a concentration of food materials which, under greater rainfall and more favorable climatic conditions, would bc diluted, and at the same time faster growth would take place, resulting in better and liner texture, as well as milder smoking qualities. The richer soils which are more generally used here, of course, give greater- and more pronounced evidence of these facts. Failure to cultivate results in the growth of thick, harsh-textured leaf, having strong objectionable smoking aroma.

In referring to cultivation, I would like to point out that a most erroneous practice obtains here of irrigating from time to time along the same furrow without any intervening cultivation. The plants are, therefore, growing in a hard compact soil with little chance of normal root development.

Prom observations of the leaf being harvested at the present time, it is noticable that many of the barns are being filled with leaf of varying degrees of ripeness, with the result that the curer has to extend his sweating or yellowing process so as to give time for the greener leaves to change colour, thus resulting in the destruction of colour and quality of the better or riper leaf. Generally speaking, the growers here are backward both in the methods of curing and of handling their crops. There seems to be no defined system of grading the cured leaf, and no standard grades are adopted.

For instance, no two “ No. 1 “ grades are alike. The Chinese method of grading is generally practised, the first, or considered best, grade of each individual crop being called No. 1, the second grade No. &e., irrespective of its actual marketable grade. Frequently, what is classed No. 1 is really representative of the 10th, 11th, or even lower grades, and should actually be classed among the dark tobaccoes. Many lots inspected were very mixed, containing leaf of various grades in each case, both as regards colour and quality. It was also noticeable that large quantities of leaf had been ruined by the ravages of thrips. In such tobacco, the mere skeleton of the leaf remains, and it is therefore quite useless for the manufacture of even a fair smoking tobacco. This leaf, if marketed, would be detrimental to the . industry in general, reflecting upon Australian production.

For your convenience, I have endeavoured to tabulate the product of each grower, showing the classes and grades of leaf on hand, and their approximate proportion, if regraded by the grower in a proper manner, and incidentally, the relative percentage of each grade and class of the total leaf unsold. In no case, I might add, did I see any leaf of the higher grades which was not intermingled with that of lower grades, even though some Jots had already been regraded since being offered for sale.

In every case, with the exception of most of the inferior, shown under column 3, dark, which is regarded as entirely useless, regrading would be necessary by the grower to obtain the amount of saleable leaf contained. I have attempted to classify the proportions of the various lots to their relative places of merit, with due consideration to their respective qualities from a manufacturing point of view. As a guide, the first three columns of the chart have been allotted to the leaf offered and sold to and rejected by the British-Australasian Tobacco Company. The next three columns indicate proportions of leaf if regraded under the three headings - bright, mahogany, and dark, these being the general grade colours.

Summarized, the senior Agronomist’s classification of the unsold leaf in the Tamworth district is as follows: -

Mr. Marks’ report continues

In summing up the position, I found that most complaints came from some growers who had not sold any of their products, their contentionbeing that it was as good as other lots purchased. As I had not previously seen the leaf purchased, I am not in a position to comment upon this statement, and can only con- fine my attention to the leaf left unsold. In two of these cases at least which were brought specially under my notice by the secretary of the Northern Tobacco Growers Association, I found that the leaf in both cases was very poorly graded, and if presented to a buyer in that condition, could not hope for a ready sale. In addition, the leaf in one of the cases was very inferior. The other, though generally better, contained much green and immature leaf.

A large proportion of the growers, however, expressed themselves as being quite satisfied with the sale of their product, and recognized and acknowledged the inferiority of the leaf rejected.

This does not support the charge of victimization made by the honorable member for New England -

The majority of growers complain bitterly of being neglected regarding instructive information on growing, harvesting, curing and grading, and I feel that their ignorance in these respects certainly justifies the complaints.

From this ignorance probably arisesthe general complaint of victimization.

Reference to the accompanying chart will show that of the 4,344 bales rejected by the British-Australasian Tobacco Company, the analysis gives only 8 per cent. of usable leaf, which leaf is shown under the headings of Bright1 and 2, Mahogany 1 and 2, and Dark 1. Leaf shown under column 3 Bright and 3 Mahogany are inferior in their respective classes, and are only usable to a comparatively small extent. It will therefore be seen that the remainder, indicated in 2 and 3 Dark, represents about 45 per cent. of low grade dark, and 45 per cent. of useless leaf.

During my inspection, I collected samples from practically all grades of every crop inspected, and should these be required for further reference, they are available for that purpose.

Generally, the growers were willing to show the leaf they had on hand, and also to submit samples. There were a few exceptions, of. course, as one might expect in such circumstances. There were also a few migratory growers whom I failed to locate, and one larger grower, whose manager, in an interview, assured me that they were well satisfied with their sales, though they had a considerable amount of inferior tobacco left on hand.

During my stay at Tamworth, I was informed that a buyer, representing a Brisbane firm,was making purchases of leaf in the district, which reports stated to be about 50 tons, equivalent to 500 bales.

While on my tour, I inspected 95 per cent. of the growers with unsold leaf.

I have endeavoured to give a true and unbiased report of the position, and where any doubt existed, I have given the grower the benefit of that doubt.

The Government did not desire finality to be reached regarding the tobacco duties before an investigation bad been made of the charge by the honorable member for New England that his district had been boycotted. A large proportion of the tobacco raised in that area was sold, and I challenge the statement the honorable member referred to, that New South Wales cannot grow good leaf. I know of no such sweeping generalization. I am informed on reliable authority that good leaf is grown at Tumut and in parts of the Riverina, and also in the Tamworth district, by growers who have studied the crop and. its cultivation. Any land agent or other individual who encourages people to grow tobacco with a promise that they can sell it regardless of its quality is merely endangering their small capital. lt should be compulsory for members of Parliament to read the Government’s pamphlets on tobacco culture.

Mr Riordan:

– It should be the duty of the Government to establish experimental plots for the guidance of growers.

Mr WHITE:

– Something of that kind has been done at Mareeba. The honorable member has stated that the Mareeba growers are concerned as to what will happen to their crop this year. He will not deny that it is not up to the standard of last year, when some of the best leaf in the Commonwealth was produced in that district. Indeed, the growers declared that they would not be prepared to accept 2s. 3d. per lb. fer their leaf. This year, however, their crop has so much spotted leaf that it will be more difficult to dispose of. The problems of tobacco culture are numerous, and honorable members should not support the belief that, simply because a crop has been grown, the Government should be obliged to arrange for its sale at a fixed price.

Realizing that the tobacco industry had developed into a national problem, and that the growers should be protected against a break in the market price, which was inevitable on account of the over-production of leaf, the present Government approached the tobacco manufacturers with a view to the purchase of the 1932 crop, which at that time was estimated to amount to about 10,000,000 lb. The outcome of the Government’s effort was that the largest manufacturers undertook to purchase 7,260,000 lb. of the 1932 crop at an average price of 2s. 3d. per lb. Honorable members will realize how profitable this price was when I tell them that the average c.i.f. value in sterling of leaf imported for the year ended the 30th June, 1932, was 9.13d. per lb., or slightly under ls. per lb., with exchange added. Some honorable members may retort that this leaf was grown by black labour, but Canadian growers, using white labour, received an average of 4d. for dark leaf and 8d. for bright leaf, while American growers received an average of less than 5d. per lb. over the whole of the 1931 crop. The figure for imported leaf included cigarettes and cigar leaf, and it is reasonable to assume that the average landed price of leaf to bo used in. the manufacture of tobacco, other than cigarette tobacco, would be much lower. The Tariff Board, in its report on tobacco, quotes the evidence of Mr. N. A. R. Pollock, Senior Instructor of the Department of Agriculture, Northern Division, Queensland -

Do you know of any other crop which will produce such a profit? - I have only one instance - a potato crop produced at a time when potatoes brought £30 a ton, an exceptional price.

Do you think that a profit of 100 per cent, is sufficient inducement to stimulate production ? - Decidedly.

. most of the growers contend that an all-round price of ls. per lb. would pay them! - Yes.

Last year the growers received 2s. 3d. per lb. The report continued -

The board considers that an average price of 2s. per lb. would make tobacco-growing in suitable areas a much more remunerative proposition than the growing of other crops U likely to be.

Last year’s arrangement was very satisfactory, and brought forth many encomiums even from the honorable member for New England. For -the arrangement .which he made with the companies, the then Minister for Trade and Customs (Sir Henry Gullett) is deserving of the greatest credit. The tobacco manufacturers concerned have more than honoured their agreement. .Their total purchases out of the 1932 crop were about 10,400,000 lb., of which over 8,000,000 lb. brought an average price of 2s. 3d. per lb. Other manufacturers who operate on a comparatively small scale have also purchased

Australian .leaf, but the Customs Department has not a full record of the purchases made by them.

The tobacco manufacturers have been accused of avoiding the small tobaccogrower. I have had an analysis of the purchases made from the tobaccogrowers, and find the position to be as follows : -

The number of growers who received £400 or less was 1,276, while the number of growers from whom direct purchases were made was 1,801. Thus I have shown that little credence can be given to those who say that the interests of the small grower have been overlooked. Honorable members should not assume that only 1,S01 growers benefited. .Large quantities were also purchased at auctions held by Dalgety and ‘Company Limited in Brisbane and Melbourne.

There is no doubt that the action of the Government, in making arrangements for the purchase of a considerable part of last year’s crop at the average price of 2s. 3d. per lb., successfully tided the industry over a transition period. Not only did it ensure a very profitable price being paid to growers, when all indications were that, even if the old duty of 5s. 2d. per lb. had remained unaltered, the prices would have been considerably less, but it also enabled growers to dispose of practically the whole of the usable crop. It is certain that had this arrangement not been made, the manufacturers’ purchases would have fallen far short of the quantity they undertook to purchase. I am quite sure that any person who has approached this question in a nonpa artisan .spirit will agree that the tobaccogrowing industry has benefited to a greater extent under the arrangement, made by the Government for the purchase of ‘last year’s crop than it would have under the Scullin Government’s protection of 5s. 2d. per lb. It is acknowledged by critics of the Government that the industry, as a whole, emerged from its first big season on a sound financial footing. There is no denying that the Government achieved a well-nigh impossible task in arranging for the disposal of practically the whole of the marketable crop, lt should be. remembered that the largest crop previously produced in any one yea-r, except on occasions during the eighties, wa3 2,000,000 lb., and that the quantity produced during the year 1932 was more than could be immediately consumed. A large portion of it has gone into maturization for use later. The problem would nor. have been easy of solution under normal conditions, but the depressed conditions obtaining, and the consequent reduced purchasing power of the community, which would have influenced manufacturers to reduce prices paid to growers, made its solution much more difficult. The Government is therefore justifiably pleased at having evolved .a satisfactory solution under such conditions.

In the latter part of last year a deputation waited on the Prime Minister, and requested that .a similar arrangement be made with the tobacco manufacturers for the purchase -of 10,000,000 lb. out of the 1933 crop. The North Queensland growers, on learning of the deputation’s request, . raised objection to another such agreement being made, on the ground that, as growers of high-quality leaf, they would be unduly penalized by the purchase of leaf at- an average price. They argued that if, in order to maintain the average price of 2s. 3d. per lb., a price more than commensurate with the value of the leaf was paid for the low-quality article, the grower of high quality leaf would receive a price lower than that to which he was entitled

Mr Riordan:

-. - He woke up when np one came to buy it!

Mr WHITE:

– That is the penalty of ask-iw far too -much. The Assistant Minister for Trade and Customs (Mr. Guy) met representatives of the tobacco manufacturers in November last with regard to a renewal of the arrangement The companies were opposed to an agreement’ with respect to the 1933 crop. They pointed out that they had heavily over-bought but of the previous season’s crop, and that, as the 1933 crop was only in the seedling stage, neither, the extent of the crop, nor its quality, could be’ forecast. Further discussion on the subject was deferred until March, 1933, when I met the representatives of the British-Australasian Tobacco Company, and allied companies. They stated that they could ‘not agree to a buying arrangement for the 1933 crop.

The preponderance in production of heavy dark and mahogany types of leaf last year, and its subsequent purchase by manufacturers, make it impossible for the companies to purchase any considerable supplies of these types for the forthcoming year. Two of the principal tobacco companies have at least two years’ supply of the heavy dark and mahogany leaf The average Australian smoker demands a light smoking tobacco, and the placing of the heavy tobacco on the market would at once cause a contraction in demand, with results -detrimental to the manufacturer, the grower and the revenue. Subsequent negotiations conducted with the principal tobacco-manufacturing company, have resulted in its agreement to purchase out of the 1933 crop the whole of the leaf produced in qualities of bright mahogany and upwards, and so much of the dark leaf produced as will replace the quantities used in manufacture during the coining financial year. That, I think, is a splendid concession. I had numerous conferences with the manufacturers and saw their point of view - that they could not forecast what . quantity of tobacco they could buy this year. Now that the crop is being gathered, a more reliable estimate can be made.

While undertakings have not been given to purchase a specific quantity, a survey of the situation with regard .to purchases out of the coming season’s crop would indicate that one firm alone is likely to purchase ‘5,720,000 lb. A conservative estimate of the probable ‘ purchases by other tobacco manufacturers is 750,000 lb. - last year they were over 2,000,000 lb.- making the probable total purchases approximately 6,500,000 lb. Even at the present time it is difficult to estimate the likely production for the present year, owing to the ravage’s of blue mould; pests and frosts. It ‘has been estimated -that about1 two-thirds, of the Victorian crop has been rendered value less,, and there is every indication that the coming season’s crop in the Mareeba district will not bc attended with the success which characterized the 1932 crop.

Mr Martens:

– -Where did the Minister get his information about the Mareeba crop?

Mr WHITE:

– The honorable member can make his own speech.

Mr Forde:

– What estimate has been formed of the Australian crop this year?

Mr WHITE:

– No reliable estimate has been made, but a member of’ the deputation to-day stated that the crop will be about 6,000,000 lb. I cannot say. however, whether that is correct, and i do not think that any one can do more than hazard a guess.

In order to satisfy the smoker’s taste it is essential that growers should concentrate on the production of the light loaf, and the manufacturers have assured me that they will purchase every available pound of Australian leaf of qualities from, bright mahogany upwards. The growing of this leaf was aimed at by the Government when its amended duties were introduced. If the growers produce the right kind of leaf the companies will not import leaf and pay 3s. per lb. duty on it.. It is tha growers of the high quality leaf who are opposed to a further agreement, and the future well-being of the industry is in the hands of these mcn. Growers may be assured that the Government is’ keeping in very close touch- with the whole situation, but it Cannot bo expected that assistance should be rendered to those growers who persist in the production of leaf that is not required. Neither the Government nor any one else can effect the sale of an article that is not wanted; the same would apply ifunpopular varieties of wool or wheat were produced. I impress on honorable members -that the Government feels confident that its action in connexion with th( tobacco situation has been in- the best interests’ of the taxpayer, the tobaccogrower and the consumer.

Mr FORDE:
Capricornia

.- 1 have listened with interest to the report, read by the Minister for Trade and Customs (Mr. White) regarding tha con di- tion of the crop at Tamworth, but, after all,” Tamworth’ is only one district of many that arc producing tobacco. Because’ ‘ a portion of the crop, at

Tamworth is inferior is not a reason for supposing that the quality throughout Australia is poor. The majority of the tobacco-growers are now situated in Queensland, and in manyparts of that State the crops are good. I am sorry that the Minister did not accept the suggestion of the honorable member for Kennedy (Mr. Riordan) that the item be postponed. A deputation representing 4,000 growers will arrive in Canberra to-morrow to interview the Minister, and I think that consideration of the item should be postponed until they have been heard. This courtesy was extended to representatives of the galvanized iron industry and of the glass industry, as well as to others.

The Government of which I was a member realized the importance of this industry, and was at pains to devise a system of protection that would conserve the interests of the growers and, at the same time, protect the revenue. We had to cast round to find some new industry that would provide employment in the production of a commodity that could be sold at a. profit in Australia. The tobacco-growing industry had made no progress up to that time because the manufacturers preferred to buy their leaf through regular channels in the United States of America. It was only when the duty on imported leaf was substantially increased that the BritishAustralasian Tobacco Company and other manufacturing companies were obliged to purchase Australian-grown leaf. When the duty on imported leaf was increased from 3s. a lb. to’ 5s. 2d. a lb., and the excise duty fixed at 2s. 4d. per lb., a tremendous impetus was given to the Australian tobacco-growing industry. The present Government has n.ow reduced the duty on imported leaf from 5s. 2d. to 3s. per lb., and has increased the excise duty on Australian leaf from 2s. 4d. to 4s. 6d. per lb., an increase of 93 per cent.

I should like to hear the Minister reply to some of the suggestions put forward by the tobacco-growers. One recommendation of the growers was that the import duty should be 4s. 6d. per lb., and the excise duty 3s. per lb., which would have meant a margin of 4s. 6d. per lb. in favour of the Australian grower. The Australian tobacco-growers claim that those rates would make Australian tobacco cheaper, while not increasing the cost of imported tobacco, would provide the required revenue, and, in addition, would be simple to administer. The Minister’s dissertation regarding the Chinese-grown tobacco in the Tamworth district was interesting, but it did not dispose of the case for the tobacco-growers of Australia. The honorable member for Kennedy has moved that the item be postponed, with a view to a. re-adjustment of the duties along the lines of a compromise between the 1931 rates and those operating to-day. The honorable member hoped that at tomorrow’s deputation some new facts would be presented, in the light of which the departmental officers could calculate the extent to which the revenue would be affected. The Minister has decided not to reply to the alternative schemes put forward by the growers. The honorable member for Kennedy rightly said that the Federal Labour party would like to give the same margin of protection to Australian tobacco-growers that’ was given, to them by the last Government, provided that there was a re-adjustment of the excise and the import duties to bring in the same amount of revenue. This industry made tremendous progress as a result of the protection given to it by the Scullin Administration. It is amazing to find on page 12 of the Tariff Board’s report the following comment: -

The quantity of Australian-grown leaf will continue to increase unless the industry is exposed to crushing competition’ by the removal of the duty, or its reduction to a figure that will not constitute adequate protection.

The Scullin Administration granted the industry protection in order to enable it to develop, and as a result of that protection the industry did make substantial progress. In its development, the industry gave employment in the Mareeba, Texas, and Inglewood districts in Queensland to some thousands of Australians who otherwise would have remained in unemployment camps. Large quantities of galvanized iron manufactured in Australia, and manythousands of feet of Australian timber, have been used to build flue-curing barns; also residences on small tobacco plantations. The tobaccogrowing industry is one for men with small holdings, and it provides employment for a large number of workers. The progress of this industry was made possible by the imposition of duties imposed by me as Minister for Trade and Customs after the most careful investigation. In 1930, the last Government appointed a select committee of members of this House to investigate the tobaccogrowing industry. After, a thorough investigation, that committee recommended an increase of the import duty above 3s. per lb., and the Government increased the rate to 5s. 2d. per lb. When I was Minister for Trade and Customs, I referred the matter to the Tariff Board for investigation and report in the usual way; but I certainly would not have accepted its recommendation as adopted by the present Government. By a readjustment of duties, which would meet with the approval of the tobacco-growers, the same revenue could have been obtained from the industry. In order to show tho progress made in this industry and its importance from, a land settlement point of view, I mention that the tobacco grown in Australia in 1929-30 was valued at £92,000, and in 1931-32 at over £1,000,000. The phenomenal crop grown that year weighed over 12,000,000 lb. The Minister estimates that the coming season’s crop will amount to about 6,000,000 lb. In my opinion, the Minister’s estimate will be exceeded, and in that case, large quantities of tobacco will remain unsold, because we are told that the companies will not purchase more than 6.000,000 lb. of high quality leaf. What does the Government propose to do in the event of any considerable portion of the crop remaining unsold? In reply to a deputation which waited, on him when he was Minister for Trade and Customs, the honorable member for Henty (Sir Henry Gullett) said - The Government waa quite prepared, and had so indicated, to see that the full crop grown this year of sound marketable tobacco was purchased by the companies, and it intended to maintain the highest possible price. This would not be left for the companies to decide. If necessary, the Government would put an embargo on as a starting point and then come to terms with the companies.

Last season, the companies purchased between 8,000,000 lb. and 10,000,000 lb. of

Australian-grown tobacco. Some of- them have on hand sufficient leaf to meet their requirements for two years. The 93 per cent, increase in the duties on Australianmade tobacco from Australian-grown leaf lifted the price of Australian-made tobacco from Australian-grown leaf to approximately that of imported tobacco, and caused a falling off of approximately 40 per cent, in the consumption of Australian leaf, with almost a correspondingly increased consumption of tobacco manufactured from cheaply-grown imported tobacco. Unless a greater measure of protection is given to Australian growers, there will he a steady decline in the consumption of Australian-grown tobacco. The mere fact that buyers have said that they will not be able to purchase more than 6,000,000 lb. of high quality tobacco leaf for the coming season, whereas they bought 10,000,000 lb. of tobacco last year, shows that there is something wrong, and that some one will be left lamenting. There has been a substantial falling off in the consumption of Australian-grown tobacco since the increase in the excise duty on Australian-made tobacco from Australiangrown leaf. It has been said that a duty of 3s. per lb. represents a protection of from 500 per cent, to 600 per cent., which should be adequate. That statement requires examination. The average cost of American leaf in Melbourne is 6d. per lb., or 12 cents per lb. American currency. Not all American leaf costs 12 cents per lb.; that is the average cost. The American market in 1932 was oversupplied; but that does not alter the fact that, in an address to the tobacco-growers of the United States of America, it was stated that 29,000,000 lb. of bad leaf did not realize 1 cent per lb. The quotation for leaf at the moment is from 4 cents to 30 cents per lb. Taking the average cost of American leaf at 6d. per lb., and allowing 20 per cent., or 1½d. per lb., for waste, we arrive at 7£d. per lb., which, added to a duty of 3s. per lb., makes the total cost of stripped American leaf 3s. 7id. per lb. Under the Federal Government’s arrangement, at an average price of 2s. 3d. per lb., Australian leaf of equal quality would cost 3s. per lb., and allowing ls. per lb. for waste, the total . cost of Australian stripped leaf is 43. per lb. It will be seen, therefore, that the statement that, the protection is between 500 per cent, and 600 per cent, is not correct. Another point to consider is that tobacco leaf imported from the United States of America arrives in perfect condition. Its average moisture content is 15 per cent., or 1 per cent, above the mean figure used by the Customs Department in all calculations; whereas Australian leaf, as purchased from Australian growers, has an average moisture content of 22-1 per cent., and has to be reconditioned by the local manufacturers to prevent it from becoming mildewed in a very short time.

Imported tobacco leaf for use in the manufacture of tobacco is subject to a duty of 3s. per lb. The Australian crop comprises 95 per cent, of this class of leaf, whereas American leaf for use in the manufacture of cigarettes, for which 95 per cent, of the Australian leaf is unsuited, has to pay an import duty of 5s. 2d. per lb. This anomaly is hard to understand. The Australian leaf, which is most suited to Australian requirements, receives a smaller measure of protection than that given to other kinds. One Melbourne factory, which was established in 1853 for the manufacture of tobacco, and has made a feature of Australiangrown leaf, was working to full capacity under the duties imposed by the Scullin Administration; but, since the amended duties have been in operation, the plant works only four days a week, and the outlook is anything but promising. It must be remembered that the purchasing power of Australian tobacco-smokers has declined considerably of late. If Australians are to continue to smoke tobacco, the price must be reduced. The alteration of duties effected by the present Government has increased the price of Australianmade tobacco from Australiangrown leaf,- and, if persisted in, will have the effect of encouraging the use of imported leaf, with consequent inquiry to the Australian industry. The honorable member for New England (Mr. Thompson) quoted figures to show that, duringthe year .ending the 30th June next, the Government will derive approximately £1,000,000 more revenue from . tobacco than it collected from this source during. ;the previous year. I hope ‘that the

Minister will reconsider his decision not’ to postpone this item. Surely the request for a postponement is reasonable, since the interests of some thousands of tobaccogrowers are at. stake. These men -feel their position so keenly that they have sent their representatives to Canberra in the hope of arranging a further deputation with the Minister for to-morrow. I suggest that it would be scant courtesy to these gentlemen to dispose of this item to-night.

Mr White:

– I received a deputation on the tobacco industry to-day. The case for the industry was well presented.

Mr FORDE:

– I received no notice of the deputation, although I was the Minister who gave the industry protection. It must have been a hand-picked deputation. The tobacco-growers desire that the honorable members for Kennedy (Mr. Riordan) and Herbert (Mr. Martens), as well as myself, should be present at the deputation. We would have been present had we known of it. Figures presented by the BritishAustralasian Tobacco Company to the select committee appointed by Parliament, in 1930, showed that the landed cost .of American bright leaf was ls. Cd. per lb. The import duty at that time was 3s. per lb. It paid the manufacturers to buy American bright leaf in preference to paying 3s. Id. per lb. for Australian bright leaf. Since the landed cost of American bright leaf to-day is less than 6d. per lb., it will be seen that, if the tariff protection was inadequate in 1930, the position is worse to-day. I submit that a good case has been made out for the reconsideration of this question. The development of this industry would mean the employment of much Australian labour, and the utilization of large quantities of Australian materials. Other dominions . have adopted drastic measures in order to establish the tobacco-growing industry. South Africa imposed a total prohibition, of imports for- a period. All kind of objections were raised to the locally-grown tobacco. It was stated that the aroma was bad, and that South Africa was unsuitable for the growing of, tobacco. The same thing was said about Australia, until a government came along that was prepared to give- the local industry adequate .protection. .-At the peak period of tobacco importation, the total sum sent out of Australia in one year .for all .kinds of tobacco and tobacco leaf was about ,£3,000,000, and most of that money went to the United States of America, with which Australia has .an adverse trade balance. Tobacco culture is one of the few rural industries that hold out hope of a profitable price to the grower; but the prospect of profit has been jeopardized by the present Government’s interference with this industry. I admit that some -alteration of the duties had to be made, but the reduction has been too drastic. Although last season the industry produced 12,000,000 lb. of tobacco, this year’s output will be only 6,000,000 lb., with the result that a large number of persons formerly employed in the industry will be thrown out of work. I urge the Minister to agree to the postponement of the item. This will enable representatives of the industry to place their case before him to-morrow

Mr ARCHDALE PARKHILL:
Postmaster-General · Warringah · UAP

– Honorable members have not advanced any satisfactory reason why the proposed duty of ‘3s. per lb. should be altered. The matter before the committee is the justice of this duty, and since it is equivalent to about 300 per cent., I suggest that it should satisfy the most voracious protectionist. Under it the industry has grown up, and every honorable member who has spoken claims that it is of great importance to the community; but I remind the committee that the credit for the present position of the industry lies with this Government, because of its action in taking steps so to control it as to prevent it from becoming, in a sense, a liability on the community. We have seen how industries have sprung up uncontrolled, and have , then come to the Government for assistance to enable them to .keep going. That is the position into which the tobacco-growing industry was rapidly drifting; but the steps taken by the present Government avoided the difficulty which the Commonwealth experienced in the ease, for example, of the sugar industry. Land in various parts of the Commonwealth, and particularly in Queensland, was being sold, for the purpose of the cultivation of tobacco, at prices far above its real market value.

Mr Martens:

– Where is that land in Queensland?-

Mr ARCHDALE PARKHILL:

– In various districts. The honorable member must know that land in Queensland that was- practically valueless commanded fabulous prices when the boom occurred in ‘ tobacco cultivation. Let the honorable member refer to the report of the Tariff Board on this subject, and he will see that mention is made of the localities in which the land is situated, the sums paid for it, and its value before its acquisition for the growing of tobacco. The difficulty that arises in -connexion with all industries that are permitted to grow up uncontrolled is apparent in this case. There is a ready sale for tobacco leaf of the better class. Leaf that is produced under efficient methods is in good demand. Do honorable members who oppose this duty suggest that the Government should sanction the sale of tobacco that is unsmokable Y The whole difficulty occurs only with regard tb leaf of inferior quality, because, if it were purchased, -nobody would smoke it. Samples of low quality leaf have been displayed to-night by the Minister. I now have in my hand a sample of tobacco from the Tamworth district, and the report of an expert states that 92 per cent, of the leaf that has not been purchased is of this character. I submit that the industry is receiving a fair deal. Are not the smokers of Australia to have some consideration, as well as the growers of tobacco? Are the smokers to be compelled to use any rubbish that the growers, including the Chinese in the electorate of the honorable member for New England (Mr. Thompson), care to produce? If one goes into any tobacconist’s shop in Sydney, one will be told that pipe smoking is rapidly going out of vogue, and that the demand for pipes has diminished, because of the inferior tobacco which the pipe smoker is being asked to buy. It may be unpleasant to those who support this industry to be told that plain fact, but surely we are not here to gloss matters over. Undoubtedly, if inquiries are made, it will be found that because the industry has been allowed to grow up, without proper control, like Topsy, the difficulties which I have described have been experienced.

The honorable member for Kennedy (Mr. Riordan) has moved that the item be postponed; but let us examine the reasons advanced for the adoption of that course, and consider whether there is any justification for the honorable member’s action. This item was postponed on the 28th March, and seven weeks have elapsed since that time. Surely the growers have had ample opportunity during that period to present’ their case, instead of waiting until to-day, when they knew that the item was to be dealt with. I submit that this action does not ring true. There can be no doubt-in the mind of any honorable member that if the representatives of the industry had a real grievance, they would have made their representations during the last seven weeks, and would not have left the presentation of their case until the eleventh hour. Even if the item were again postponed, honorable members will admit that the particular matter upon which tho industry desires to make representations is not the import duty that we are discussing to-night, but the excise duty which is not now before us.

Mr Forde:

– One of the suggestions is that the import duty should be increased to 4s. 6d. per lb.

Mr. ARCHDALE PARKHILL.The representatives of the industry can present their case to-morrow, or later in the week, and still have careful consideration given to their claims regarding the excise duty, but it is not necessary for the committee to postpone this item.

Mr Riordan:

– If the Government agrees to a reduction of the excise duty, we are willing to withdraw the amendment.

Mr. ARCHDALE PARKHILL.That shows that the industry is chiefly concerned with a matter that is not now before the committee, and in regard to which there is ample time for it to make its representations.

Mr Forde:

– What about the suggestion to increase the import duty?

Mr. ARCHDALE PARKHILL.That matter has been dealt with by the Minister. I submit that the Government has made a reasonable and well-considered proposal, which any legitimate grower should readily support. The grower received 2s. 3d. per lb. for practically the whole of last year’s crop, and he can get the same price again this year, if he has tobacco of good quality. Surely 2s. 3d. a lb. is a satisfactory figure, seeing that leaf can be landed in Australia from the United States of America for a little over ls. a lb., including exchange, but not including duty. The protection of the industry is therefore really in the neighbourhood of 300 per cent. In these circumstances the proposal of the Government is fair. It will accord the tobaccogrowers legitimate protection, encourage the growth of the industry upon sound lines, and protect another section, and. by far the bigger section, of the people, the general public.

Mr PATERSON:
Gippsland

.- I was glad to learn that the Government has come to an arrangement with the manufacturers under which they will buy all the lemon-coloured leaf, all the bright mahogany leaf, and as much dark leaf as will replace the amount of such leaf of last year’s production as is used in this year’s manufacturing operations. I am prepared to support the Government’s proposal for an import duty of 3s. per lb., and so, I believe, is the Country- party generally. But we expect the Government to give sympathetic consideration to the various proposals that were put before the Minister for Trade and Customs (Mr. White) this afternoon respecting the adjustment of the excise duty. I agree that that subject, although allied to the subject of import duties, can be dealt with more appropriately when we are considering excise duties. Alternative proposals were put before the Minister this afternoon, which I shall discuss when the excise duties are under consideration. It has been stated that the proposed import duty qf 3s. per lb. is equivalent to a reduction of duty on foreign loaf, but, with the increased excise, we will receive the same total of 7s. 6d., as was obtained formerly. The present proposal is for an import duty of 3s. per lb., and an excise duty of 4s.- 6d. per lb., whereas formerly the import duty was 5s. 2d. per lb., and the excise duty 2s. 4d. per lb. As a matter of fact the present proposal represents a slight increase of taxation on foreign tobacco, because I understand that 100 lb. of leaf produces about 118 lb. of manufactured tobacco. For that reason the larger the proportion of taxation imposed on the manufactured article in the shape of excise, and the less the proportion imposed in the shape of import duty, the greater is the actual total tax ou the finished product. But if there is a slight increase in the taxation upon tobacco manufactured from imported leaf, there is a very substantial increase in the taxation imposed on tobacco manufactured from Australian leaf owing to the increase of the excise duty from 2s. 4d. to 4s. 6d., and this has had the effect of raising the price of the tobacco manufactured from locallygrown leaf, and of diminishing, to some extent, the demand for it. Before this alteration of duties was made, the price of Australian tobacco was, I am informed, about 3s. per lb. less than the price of American tobacco. The retail price, indeed, showed a disparity of as much as 4d. to 6d. per two-ounce packet in favour of the Australian product. This substantial price advantage proved to be a considerable- incentive to the smoker to buy Australian tobacco, and in so doing, to acquire a taste for it. There is probably no inducement so great as that of price to change the habits of a smoker. To-day, in consequence of the increased excise, the price margin in favour of Australian tobacco, as -compared with the American product, has been reduced to about half of what it formerly was. We have been told that there has been a definite falling off in the consumption of Australian tobacco. Some honorable members have stated that the falling off is as much as 40 per cent., though I do not know that it is a reliable figure. Definitely, however, there has been some fallingoff in the consumption of tobacco produced from Australian leaf. The deputation which waited upon the Ministor for Trade and Customs to-day submitted some very .reasonable proposals for an adjustment of the excise duty with the object, not of gaining some direct advantage to the grower, but of giving cheaper tobacco to the consumer by bringing about a reduction of the retail price. I have been glad to learn that the Victorian Tobacco-Growers Association is regarding this problem largely from the point of view of the consumer. It is seeking an amendment of the excise duty in order that the price of tobacco produced from Australian leaf may be reduced to such a figure that the Australian smokers will prefer it to the American product. I believe that something can be done in this way without any substantial sacrifice of revenue, and, perhaps, without any reduction of revenue at all. But I shall deal with this subject when the excise duties are under consideration. I shall support the Government’s proposed import duty of 3s. per lb., and so, I believe, will members of the Country party generally.

Mr HUTCHINSON:
Indi

.- It has always seemed to me that in discussing the tobacco duties honorable members have generally been more concerned about gaining party prestige than about promoting the true interests of - the tobacco-growers. I. hope that there will be nothing of that element in the few words that I shall speak this evening. We have been told to-night, as we .have been told on other occasions when these duties have been under consideration, that the tobacco industry is on the verge of collapse. lu order to see the subject in true perspective, we must go back a few years. Honorable members will recollect that until a few years ago the tobacco industry was progressing steadily, though not rapidly, on a duty of 2s. per lb. The duty remained at that figure until the Treasurer of the BrucePage Government asked the then Minister for Trade and Customs (Sir Henry Gullett) to devise a way of raising more revenue through the customs. The Minister obliged him by introducing an amendment of the customs tariff providing for a duty of 2s. 8d. per lb. That duty remained in force until the advent to office of the Scullin Government. We all know that in 1930 the Scullin Government had to meet serious financial difficulties. I believe that it increased the tobacco duties more with the object of increasing the revenue than of protecting the industry. In 1930-31, it budgeted for a revenue of £6,690,000 from tobacco duties. In this instance we have an example of the ineffectiveness of some of the methods adopted by that Government to obtain revenue, for its receipts from this source in that year totalled only £6,100,000- several hundred thousand pounds short of the anticipated return. The effect of the increased duties from a revenue aspect was, therefore, nil. This serious loss of revenue and the prospect of a further heavy loss led the Government to set up a small committee to examine the tobacco question from the financial aspect. Following the receipt of a report by that committee, The Tariff Board was requested to make an inquiry into the circumstances of the industry with the object of ascertaining the degree of duty necessary to protect it and to enable it to provide the amount of revenue required from. it. Although the tobacco policy of the Scullin Government was negative from the revenue point of view, it was positive in certain other respects; for it entirely changed the outlook of the industry. Previous to the imposition of the Scullin duties, the crop of Australian-grown tobacco leaf “was in the neighbourhood of 2,000,000 lb. annually, but in the twelve months that followed the imposition of the higher duties, the crop reached the enormous proportions of from 12,000,000 lb. to 15,000,000 lb. I do not think that any one knows, even now, the exact yield for that year. This result was brought about largely on account of the high duty. Every honorable member of this committee must agree, I think, that these high duties introduced boom conditions into the industry, associated with which were the beginnings of all the bad results usually consequent upon boom conditions. We heard to-night, for instance, from the Minister for Trade and Customs (Mr. White) that a large number of Chinese in the Tamworth district of New South Wales rushed into the industry and grew a totally unsaleable leaf. Possibly, many of them had had no previous experience of tobaccogrowing. Other people who lacked proper experience of the industry also took up tobacco-growing. The consequence was that a considerable amount of unsaleable leaf was produced; land values in certain districts increased ; and certain companies were floated, which issued the most wonderful prospectuses. Dividends to shareholders of up to 50 per cent, and returns to the growers of up to £50 an acre were promised. In fact, the stage was set .for the establishment of the industry upon a definitely unsound and uneconomic basis. The inevitable result would have been a crash. Had such a crash occurred, a considerable loss of capital and a great deal of unemployment would have been entailed. The industry would have become unstabilized, and unsatisfactory conditions would have prevailed in every respect.

I come now to the sale of the tobacco. Previous to the imposition of the higher duties, about 2,000,000 lb. of Australian tobacco had been going into consumption ; therefore, with a local production of from 12,000,000 to 15,000,000 lb. per annum, it was obvious to anybody knowing anything about business or primary production that a serious crash in prices was impending, particularly as only about 30 per cent, of the crop could be described as first grade, and about 30 per cent, as reasonably good, the. balance being poor grade leaf. The position that faced the growers was that production was far in excess of any conceivable demand, and a reduction of prices was imminent. Opportunely, the present Government entered into an agreement with the manufacturers, which resulted in from 10,000,000 to’ 11,000,000 lb. of the crop being purchased. It is perfectly clear that the bulk of the remaining portion was unsaleable. The major portion of the leaf which was sold brought an average price of 2s. 3d. per lb., which representatives, of the growers’ organizations declared to be ‘ perfectly satisfactory; as a matter of fact, they have stated that if that price could be maintained the growers would be more than contented. The only logical conclusion to draw from those results is that last year was the most . successful in the history of the Australian tobacco industry; and it is only fair that the Government should receive a measure of gratitude for having brought about such a satisfactory position.

It is now necessary to consider the future interests of the growers. In the year 1930-31, 3,152,556 lb. of Australian tobacco went into consumption. The quantity for 1931-32 was 2,434,015 lb., the reduction being due to the fact that s up p 1 l e s were rationed to a certain extent. As 1 have already stated, the consumption of Australian tobacco used to be from 2,000,000 to- 3,000,000 -lb. a year. What, then, is the position which immediately faces the industry ? I am given to understand by the British- Australasian Tobacco Company that the major portion of their purchases last year, amounting to 8,000,000 lb., will go into consumption in two years’ time, which indicates that the quantity that will then be marketed by that firm alone will exceed the consumption pf Australian tobacco in any previous year. We must also realize that there are other firms buying and manufacturing Australian leaf, and that new firms are springing into existence; I know, personally, of one. It is estimated that the quantity of Australian tobacco that will go into- consumption next year will be in the region of 4,600,000 lb., or nearly double the quantity that was previously consumed. So that, on top of last yeaT’s wonderful buying of the Australian crop, we have the satisfaction of knowing, that approximately 2,000,000 lb. more of our tobacco will go into consumption than was the case in 1931-32’. That is’ definitely a forward step.

Mr Maxwell:

– What’ time must elapse between the harvesting of the crop and its going into consumption?

Mr HUTCHINSON:

– Tobacco should mature for at least twelve months. Looking further into the future, we must ask ourselves how long it will be before the Australian product captures the whole of the local market? I do not think that even the most optimistic member of the committee would hazard the opinion that it will be less than ten years. The average’ yearly consumption of tobacco, in Australia is approximately 20,000,000’ lb.; therefore, allowing 4,000,000 lb. of imported tobacco for blending purposes, there is an available market of 16,000,000 lb. in, say, ten years, for the home-grown product. It must be apparent that growers must give the’ matter of production their- serious thought, as too great an over-production during this changeover period’ must result in collapse of prices which may give the industry “ a serious setback. A reduction of theexcise duty has’ been referred to as an aid to the industry, and, although that is not , the question immediately before the Chair, it is closely related tait, for it is necessary to ask “How can the Government increase the consumptionof Australian tobacco?”’ Broadly, two factors are necessary, first, quality; second, price; the former possibly being the more important. Only recently I have been buying a Queensland tobacco at 2a. for a 2-oz. tin, which is 3d, more than is charged for “ Temple Bar,” a wellknown brand made from imported leaf. I am pleased to be able to say that the product which I purchased is distinctly good. Despite the fact that it is selling on the Australian market at a higher price than many high-grade tobaccoes made from imported leaf, it is finding a sale and will continue to do so, affording convincing evidence that quality is the premier consideration governing the sale- of tobacco. The watchword of the growers must bc “ Quality first, second, and always,” for if they produce leaf of a sufficiently high grade its sale is assured at a satisfactory price. It is a well-known saying in the commercial world that you can always sell goods at a price, and’ although I do not imply anything detrimental to Australian tobacco, the price factor is an important one.

It is the excise duty which regulates price,- and, in turn, it embraces two features- of . concern to the Government tariff policy and revenue requirements. Honorable members on this side are- differently situated from those, who SuP’port the Opposition, the Country or corner party,, in that they must take responsibility for any act of- the Government. This problem has to be considered from these two angles’, as any reduction of excise, duty is equivalent to an increase of the protection given to– the industry. This item is, however,, in a somewhat different category from others that we have considered, because it has been inquired into- from two aspects, those, of protection- and revenue. For the year1 1930-31, the revenue from tobacco duties was- £6,159,482,. and for 1931-32 it was £6,484,753’, while it amounts to £5,566,878 for the nine months of this year that have, passed. When I. examined the figures at the end of the- last calendar year, I found’ that the revenue from duty on tobacco for the first half year of the present financial year totalled £3,790;433.. Taking that asa1 basis for the whole year; the’ estimate given by the honorable member f dr New England’ (Mr: Thompson) ‘ would be a- safe one; but as the year progressed, the revenue from tobacco duties receded considerably. However, on the nine months basis that I have already mentioned, I think that we can expect an income of £7,422,000, although the official Treasury estimate is more conservative, being £7,100,000. The amount of revenue derived from this source last year was in excess of that originally anticipated chiefly because the British- Australasian Tobacco Company had purchased large quantities of tobacco in the United States of America prior to the agreement being made, and asked, as a concession, to be permitted to import that leaf, for which it had paid. We cannot expect those large importations to continue, and it has been estimated that the imports of tobacco must fall to approximately one third of what they were last year. Because of that, and the fact that .as more and more Australian leaf goes , into consumption the department will be collecting only an excise of 4s. 6d. a lb., the Government cannot expect to continue to derive revenue from this source on the basis of the present year. There is another aspect of the revenue position that I desire to place before the committee, as well as before the people of my electorate and of Australia generally, because it is one that must be considered by all: that is, that the reduction of the excise duty means a decrease of the tobacco-grower’s taxes at the expense of the revenue. We who have national responsibilities- must consider the extent to which the revenue would lie affected, and what the result might be in regard to taxation next year. In common with other honorable members, I have been foremost in advocating the reduction of certain classes of taxes - for ‘ example, the super tax which indirectly affects interest rates.

The CHAIRMAN (Mr Bell:
DARWIN, TASMANIA

– The honorable member is getting away from the item ‘

Mr HUTCHINSON:

– Reductions of taxes that are of real national importance have to be considered in arriving at the amount of revenue that we canafford to lose from tobacco. I have endeavoured to stress the fact that, if too much leaf is grown even for three or four years, prices must come down. Therefore, we must also consider whether-the reduction of the excise duty would act as an incentive towards over-production. If it did, the benefit that we wish to confer on the industry would be lost. A third consideration is, whether the granting of additional relief to the industry would lead to the companies acting as they did in 1930 - placing tobacco in the hands of the public before it was sufficiently matured. The maturation period is most important so far as the industry is concerned.

The excise question is not one for the determination of the committee to-night; we are now dealing with the duty on imported tobacco. I have been given to understand that, throughout Victoria, the growers are perfectly satisfied with the import duty, and that their concern is in regard to the excise duty. That being the case, I shall oppose the amendment, and support the Government.

Mr MARTENS:
Herbert

.- In reply to the Postmaster-General (Mr. Parkhill), I may say that there is an alternative proposal to be placed before the Minister. The Queensland representatives were not advised of the deputation which waited upon the honorable gentleman this afternoon. I have no doubt that a reduction of the excise duty would be acceptable to all the growers. But’ the Queensland growers are very strong numerically - there are between 800 and 1,000 in my electorate, and from 3,000 to 4,000 in the electorate of the honorable member for Kennedy (Mr. Riordan) - and they are entitled to be heard when deputations wait on the Minister with respect to any. matter that affects the industry. They have an alternative proposal which, if it should prove acceptable to the Government, and to the customs officials, they are satisfied would afford protection to the industry; that is, to increase the import duty by ls. or ls. 6d. . per lb., and to reduce the excise correspondingly, so as to give the Australian manufacturer a better chance of competing with the importer. I have given tobacco manufactured in my electorate to honorable members- and to officials of this chamber, as well as to residents of the Federal Capital Territory, and I have not heard one complaint concerning it. During the investigation of the industry by a select committee, it was impressed on the growers that, as the importations of tobacco became less and the revenue derived from the import duty was in consequence decreased, the excise duty would have to be increased so as to restore to the Government the revenue that it lost.

The Postmaster-General also said that tobacco could be imported from America at less than 2s. 6d. per lb., duty, exchange, and other charges included. In reply to the honorable gentleman, I point out that the tobacco grown and harvested in America last year did not pay for the gasolene used’in transporting it to the barns, so unfavorable was the price to the growers. The Postmaster-General became somewhat hot under the collar when I asked him to name a district in which land values had increased. The honorable gentleman did not seem inclined to supply that information. I have no hesitation in saying that some of his closest political friends in the last Queensland Government were among those who boosted the values of land, and sold land in some districts. I have a fair knowledge of land values in Queensland and other places, and want to see them kept to as low a level as possible for all kinds of agricultural purposes. In his wild and woolly statement, the Postmaster-General said that land which was unsuitable for the growth of sugar cane had been boomed to an abnormal price. He has not devoted as much attention to that matter as I have. I know very well that the booming of land values is not peculiar to tobacco or sugar lands, but applies to all classes of agricultural lands; and, generally speaking, the political friends of the PostmasterGeneral, and of this Government, are responsible for it.

When I asked the Minister for Trade and Customs (Mr. White) a question tonight, he did not display his usual courtesy.

Mr White:

– I am sorry that I could not give the honorable gentleman the information at. the moment.

Mr MARTENS:

– It is useless for the honorable gentleman to be sorry now. I asked him to name the source from which had come the report in regard to spotty leaf. I was told that I might make a speech, when the honorable gentleman sat down, and when I repeated the question,

I was called to order by the Chair; I now ask the Minister to name the gentleman who made the report in regard to spotty leaf at Mareeba. If it were made by the representative of the Federal Government in Mareeba - Mr. Howell - I should have the greatest pleasure in accepting it as correct. When the Minister read a report by Mr. Marks, I said that I was quite satisfied that it was made by a responsible and capable officer. Did Mr. Howell make the other report ?

Mr White:

– No.

Mr MARTENS:

– It would appear to be only a loose sort of statement.

Mr White:

– It is quite authentic, but I do not wish to disclose the author of it.

Mr MARTENS:

– I suggest that the information which I have in regard to the matter is quite as authentic. The trouble in the Mareeba district occurred immediately after the growers had refused to accept a renewal of the agreement. At the time, I said in this chamber that I thought they had made a mistake. Immediately the suggestion of spotty leaf, which had not previously been heard of, was made. At least a week ago, two representative citizens of Mareeba - Mr. Hunter and Mr. Hesse - advised the honorable member for Kennedy andmyself that, so far, buyers had not operated in the Mareeba district, although quite a large proportion of the crop had been harvested. I do not know what truth there is in the suggestion that there is spotty leaf in the district ; but we have not been advised of it, and Messrs. Hunter and Hesse are as much entitled to be believed as is a person whose name the Minister is not prepared to disclose. There is in Mareeba a representative of the Federal Government who is as qualified to make a report as any man in the employ of the Government, or associated with the tobacco-growing industry in this country. I refer to Mr. Howell, who is a most capable, honest and straightforward officer. He would do whatever he could to benefit the growers, wherever he happened to be.

In reply to the honorable member for New England (Mr. Thompson), the Minister said that no responsible person had ever made the statement that tobacco could not be grown in southern Australia. I suggest that the tobacco expert in the employment of the Government of New

South Wales, Mr. Tregenna, may be accepted as a responsible person. When a statement is made by him the growers of tobacco, and other persons in the community, regard it as that of an expert. More than once, upon oath, Mr. Tregenna made the statement that there was not in southern Australia land that was suitable for tobacco growing. He even went so far as to say that he did not believe there was such land south of Mareeba. When he said that he did not know much about the subject’. This expert has been employed by the Government of New South Wales over a long period of years.

Mr White:

– His statement was apparently wrong.

Mr MARTENS:

– It was.

Mr White:

– That is what I said.

Mr MARTENS:

– He is a responsible person, and his opinions, like those of every other government employee who is an expert, must be respected, particularly by persons who do not know him. I am sure that’ not many persons who know this expert take notice of his opinions, but, unfortunately, many persona do not know him, and therefore accept his statements. With regard to tobacco manufactured front purely Australian-grown leaf, I have been informed by the agent representing Mareeba tobacco in the Federal Capital Territory that up to the present £146 5s. 5d. worth of tobacco has been purchased, and that he has at present an order for a further quantity worth £38. That is not much, but it adds to the aggregate amount. In any case, it shows that there is a demand in the Federal Capital Territory for Queensland tobacco. I think that the honorable member for Indi (Mr. Hutchinson) made a slight mistake when he said that Australian tobacco was being sold at a price higher than that of the first grade American tobacco, because I understand that the two tobaccoes are being sold at the same price. The select committee which inquired into the tobacco industry was just as anxious as anybody else that the industry should be properly organized. That is shown by its report. The Scullin Government, when considering an alteration of the duties, took the members of the committee into its confidence. We discussed with the leading officials of the Customs Department the best means of securing the necessary revenue, at the same time giving the tobacco-growers a chance to make a success. Much has been said about the enormous increase of the production of Australian tobacco leaf. Early in the history of the industry, it was never suggested that it would be easy for the growers to make a success. It was realized that proper methods would have to be adopted, and that much research work was needed. Unfortunately, many people rushed willy-nilly into the growing of tobacco. According to the report of Mr. Marks there are many Chinese growers who, we know, are more concerned about producing, a vast quantity of leaf from . a small area than about growing tobacco of a type required by the manufacturers. It is a fault, however, which is not peculiar to the Chinese. The growers were told by . the buyer of the BritishAustralasian Tobacco Company that he would not purchase Australian tobacco unless it had been flue-cured, and was a bright leaf. We cannot blame the manufacturer for not buying Australian leaf if the growers persist in producing a dark leaf, and following the old method of curing.

The following letter, dated the 10th March last, was written by the secretary of the Townsville Chamber of Commerce to the Premier of Queensland : - ‘

page 1490

QUESTION

PREFERENTIAL- DUTY

In a letter addressed to Messrs. Dalgety and Company, London, by Messrs. Godfrey Phillips Limited, 112 Commercial-street, London £., they state - “ Fundamentally it is wrong to assume that the preferential duty is for the benefit of the grower. That doubtless was the intention when the preference was granted, but competition here dictated tho passing on to the consumer of the whole of the preference and this has resulted in nearly all Empire products being sold at the lowest retail prices - consequently in the minds of the smokers they are cheap, and to put it inoffensively, not so well liked as American tobaccoes”. This will be a shock to tobacco-growers in North Queensland and will present an entirely different aspect to the industry and threatens to be a serious set-back to development.

I ask the. Minister whether it was intended under the Ottawa agreement that the growers should get the whole or any portion of the preference? The growers of North Queensland believe that they should receive the benefit of at least half of the British preference of 2s. Naturally, Messrs. Godfrey Phillips Limited say that they are not entitled to it. If the preference of 2s. on Empire products is to be passed on to the consumer of tobacco in Great Britain that will not be of much use to the tobacco producers of Australia or of the other dominions.

I object to the idea of so-called deputations waiting on the Minister and posing as being representative of the tobacco industry of this country. The honorable member for Kennedy, the honorable member for Capricornia and I have many tobacco-growers in our electorates. We are in close communication with them, and’ we know their requirements. They want an increase of the import duty with a decrease of the excise duty, at the same time securing to the Government’ the revenue that it requires from these two sources. I believe that the customs officials could arrive at a method of meeting the requirements of the Government, and, at the same time, the wishes of the tobacco producers of this country. The tobacco manufacturers should not be asked to buy black or rubbishy tobacco. I have seen at the British-Australasian Tobacco Company’s works in Sydney a quantity of that class of tobacco, and it is of little use except for insecticides and sprays. That tobacco came mostly from the particular district which has been frequently mentioned to-night. The quality is poor largely because ofthe fact that the growers are not prepared to seek the advice of the experts whose services are at their disposal. Mr. Marks, Mr. Howell, and also Mr. Lough, the buyer for the British-Australasian Tobacco Company, have given the growers with whom they have come into contact very good advice, and, generally, it has been accepted. It is in the districts in which they have operated that the best tobacco leaf is being produced. I appreciate the fact that a settler cannot undertake the growing of tobacco leaf unless he has some information as to its proper cultivation and the delicacy of the crop. Tobacco leaf is a delicate crop to harvest. When Mr. Howell was first sent to Queensland to take charge of the Mareeba experimental station he was. asked by the then Minister for Agriculture in that State (Mr. Walker), whether it was advisable to establish many growers on a certain piece of land. Mr. Howell’s advice was to proceed carefully and not to place too many persons on the land, because of the difficulty of growing tobacco in a district in which the industry had not been tried out to any extent. However, the first growers made a success of the business. When it was known that Mr. Howell was to be recalled, I got into touch with Dr. Dickson, who assured me that there was no complaint against that officer. The growers showed their appreciation of his services by making him a fine presentation on his departure, and when he returned they welcomed him back in their midst. I hope that the Government will increase the import duty on tobacco and lower the excise duty so as to give a greater impetus to the tobacco-growing industry.

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– The Government, when dealing with: the tobacco industry last year, were faced with one of the most difficult problems connected with our primary industries. As an emergency measure the Scullin Government raised the import duty to 5s. 2d., and, in consequence, many people saw opportunity to make money cither by selling land as potential tobacco-growing areas, or by growing the tobacco leaf itself. At the time the duty was imposed it was considered that highgrade leaf could bc grown only north of the 20th parallel, but since that time, by improved methods, better selection of ground and seed, good tobacco can be grown in almost every State of the Commonwealth, so much so, that it is not an improbability that, in the near future, our requirements of bright leaf and more than our requirements of dark mahogany will be grown entirely in Australia. But that time has not yet arrived. We have to move a certain distance along the road of experimenting before we shall be in a position to produce an article that will provide the raw material for a reasonably good smoking tobacco. Our requirements of pipe tobacco are about 14,000,000 lb. a year. That quantity could easily be covered if all the tobacco offering were available for treatment, but some tobaccoes, including the samples from the northern districts of New South Wales, which have been referred to this evening, are of no value at all as a smoking commodity, and can be used only for insecticides, sprays or sheep dip.

Mr.ArchdaleParkhill. - Could not it be sent to the islands?

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– Possibly that could be done; but I doubt that it would benefit the revenue to a very great extent, and tobacco, as we all know, is, in almost every country, used as a means of raising revenue. One of the difficulties that confronted the present Government, when it took office, was to hold the scales evenly between the requirements of the revenue, and the tobacco-growers. Had the import duty of 5s. 2d. per lb. been retained, and the excise duty remained unchanged, it is almost certain that we should have had an over-production of leaf, a proportion of which would have been unsuitable. Also, the price of tobacco lands would have appreciated enormously, due to the rushing of hundreds of people into the industry only to lose their money in a hopeless endeavour to produce, on unsuitable soils, a tobacco that was of some value to smokers. So far the industry, I believe, has been very considerably helped by the companies, which purchased, at a reasonable price, a much larger quantity of last year’s crop than was provided for in the agreement with the Government. I would, however, remind the committee that the average of 2s. 3d. per lb. did not, as many people think, represent the highest prices paid. A considerable quantity of North Queensland leaf, as well as a large proportion of tobacco grown in my own electorate, two widelyseparated localities, realized in the vicinity of 4s. per lb. All things considered, I do not think any one will deny that the growers of good tobacco last year did very well indeed; they had a good season, and obtained a reasonably good price for the leaf. We need not extend a great deal of sympathy to growers who produce second and third grade tobacco. To do that would be to encourage the perpetuation of the errors of the past, and would probably lead growers further into the mire, with the result that many would lose the whole of their capital in what they believed was going to be an El Dorado enterprise. I am satisfied that we cangrow tobacco, that will compare favorably with the product of any other portion, of the Empire, and, provided we do not overproduce, I believe there is a great future for those who are working in the proper locations and under suitable climatic and meteorological conditions. I have received one or two letters in response to inquiries which I made as to the quality of tobacco manufactured from Australian leaf. A smoker myself, I prefer a mixture in which there is a somewhat larger proportion of Australian leaf than in most other tobaccoes on the market in this country, but’ I did not quite appreciate the high quality of the Australian product until I bad received these letters. One is from one of the largest buying firms in England, under date the 13th February, 1933, and states -

The writer is very much impressed with the quality of the tobacco. It smokes smoothly, and the colour is very nice. But the market value of this tobacco over here could not exceed1s.6d. per lb. in our opinion, as it is in direct competition with Canadian and Rhodesian of the same grade. 1 should add that my purpose in making this inquiry was to get some idea of the relative value of Australian tobacco when marketed in competition with tobacco from other parts of the world. As I was not certain that an opinion from one firm would be sufficient, I wrote to another company which stated in its reply “ that the texture and colour are excellent; the leaf burns well and if shipped according to the same standard should sell easily “. This firm went on to recommend a trial consignment, and emphasized that the shipment should be in hogsheads, in accordance with Empire requirements, with a moisture content not exceeding 14 per cent. Another firm which tests hundred of tons of Empire tobacco stated -

I have examined the small type sample of tobacco and find it very good quality, good bright orange colour, medium body, silky texture, clean and free from disease. I have tested it in cagarettes and find it burns well. It has a good white ash, pleasant flavour and mild. I consider the value when compared with similar grades of Empire leaf from Canada and Africa to be about1s.6d. per lb. if packed in cases or hogsheads, with a moisture content not exceeding 14 per cent. It could be used for pipe tobaccoes as well as cigarettes. I think it would find a ready sale on this market if it could be produced at prices ruling for similar grades from Canada and Africa.

These are three independent opinions about Australian tobacco, and in face of this evidence as to its quality, I have no hesitation in saying that we can produce a quantity of tobacco that will hold its own with the product of any other country. It may be limited at the moment, but in the future I hope it will be increasingly large.

This industry has now reached a stage when we shall be obliged to give our attention to the export trade, and as this involves the question of . preference, my information bears out what the honorable member for Herbert (Mr. Martens) said just now, namely, that the preference is not given to the growers, but is used to popularize our tobacco among overseas smokers. It should also be noted that this preference of 2s. 0£d. per lb. dates, not from the Ottawa Conference, but from tho 1st July, 1925. Would it not be possible for the Government to consider some scheme whereby we could cheapen Australian tobacco for Australian smokers? I am convinced that the chemists employed by manufacturers could, with the various ingredients required in the process of manufacture, produce a tobacco similar in every respect, including flavour, to the imported product, provided the leaf was of the proper texture and was grown in the right soil. In this way it should be possible to give Australian smokers an Australian article at a reasonable price. For some reason, which I have been unable to discover, the price of Australian tobacco approximates too closely to the price of tobacco manufactured from the imported leaf to induce Australian smokers to use it more generally. If our tobacco-growers, who are nearly all poor men, could be encouraged to produce a larger proportion of the higher grade leaf it should be possible to make the local tobacco available to Australian smokers at a lower price than the imported article. I do not wish anything that I have said to be construed into a desire to bolster up this industry to the point of over production, which was threatened recently. If that had occurred, it might easily have been one of the most serious happenings to Australia during this crisis. Misuse in any way of. the import or excise duties may induce many, who can ill afford to fake the risk, to sink the whole of their capital in the business of tobacco-growing and eventually lead them to disaster. I see no reason for the postponement of this item. The Government should go ahead with its proposals, but it should, I think, and probably will, give consideration to a scheme whereby Australian tobacco may bo cheapened to the man who wishes to smoke it.

Progress reported.

House adjourned at 10.31 p.m.

page 1493

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Imports of Douglas Fir

Mr Riordan:

n asked the Minister for Trade and Customs, upon notice -

  1. ‘Is it a fact that, according to Bulletin No. 2!) of the Bureau of Census and Statistics, the imports of Douglas fir timber, in sizes- less than 7 inches by 2) inches, for 1930-31 and 1931-32 (under sub-heading 903b), included 047,534 super, feet from France, and 15,600 feet from Japan ?
  2. Is Douglas fir grown in France or Japan ?
  3. Will the Minister ascertain and inform the House of the original country or countries of origin of tho timber referred to?
Mr White:
UAP

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

  1. Yes. Inquiry, however, discloses, errors in posting, and some importations of timber have been posted to the wrong sub-item. 2.. No.
  2. The United States of America in the first case. In the second the timber was not Douglas fir, but was of Japanese origin.

Amalgamated Wireless Australasia Limited

Mr Gibson:
CORANGAMITE, VICTORIA

n asked the PostmasterGeneral, upon notice -

  1. What was the total amount of money paid to Amalgamated Wireless Australasia Limited, under the agreement entered into in 1927?
  2. What is the value of the patents for which this money was paid?
  3. What amount of money, was paid to the company during the last financial year?
  4. If there had been no manufacturing side to the company’s activities, what would the Government have received as its share of the year’s income?
  5. What did the Government receive as its share of income for the last financial year?
Mr Archdale Parkhill:
UAP

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

  1. To the1st March, 1933, the total amount paid to Amalgamated Wireless Australasia Limited was £464,361 7s., of which £260,997 12s. 2d. was paid for patent royalties and £203,363 14s.10d. for the operation of the coastal and island radio services.
  2. The actual value of the patents is unknown, but they appear on the company’s balance-sheet as at 30th June, 1932, at £93,000.
  3. For 1931-32, £51,455 14s. 9d. was paid for patent royalties, and £36,910 0s.1d. for the coastal and island radio services.
  4. The Postmaster-General’s Department is not in possession of financial results of the working of the company’s various activities, ami the information is not available.
  5. For 1931-32, the Commonwealth received dividends totalling £26,2501s.1d.

Production of Pearl Shell

Mr Stewart:
UAP

t. - On the 3rd May, the honorable member for Kalgoorlie (Mr. A. Green.) asked me the following questions, upon notice: -

  1. What was the total world production, of pearl shell for the years 1928, 1929, 1930, 1931, and 1932 respectively ?
  2. What was the Australian production, of this commodity for the same periods?

I am now in a position to furnish the following particulars in reply to the honorable member’s questions: -

  1. Definite information as to the world production of pearl shell is not available, but as London and New York have been the chief marketing centres of this product, the imports of shell into the United Kingdom and the United States of America may be accepted as closely approximating to the world production. The imports referred to were as shown hereunder : -
  1. Quantities of pearl shell produced in Australia -

Export of Gold

Mr Lyons:
UAP

s. - On the 4th May,, the honorable member for Fremantle (Mr. Watson) asked the following questions, upon notice: - 1.What is the total amount of our gold reserve sent overseas during the current financial year?

  1. What amount of sterling have we purchased, and where is our reserve in sterling located ? 3.. Was the shipment of our gold reserve included in our exports?

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

  1. £7,999,412.
  2. Proceeds amounted to £11,248,413 English currency, and are held in London.
  3. Yes.

The answers to questions 1 and 2 were supplied by the Commonwealth Bank.

Winter Relief: Defence Clothing

Mr Lyons:
UAP

s. - On the 11th, May, the honorable member for Hindmarsh (Mr. Makin) asked me the following questions, upon notice: -

  1. Whether the Commonwealth Government will make available the stocks of flannel held in Defence stores and/or the Clothing Factory so that the children of unemployed families may be more adequately clothed during the coming winter?
  2. What stocks of blankets and boots are held by the Defence Department?
  3. Will the Government provide for the relief of necessitous cases by using portion of these stocks, as well as surplus stores?

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

  1. The stocks of flannel held by the Defence Department are required for Service purposes, and accordingly it is regretted that no flannel can be made available from this source for the relief of distress.
  2. It is not in the public interest to make available information regarding, the amount of clothing, equipment, &c, held for the use of the Defence Forces.
  3. Stocks of military clothing or material, held by the Defence Department and. regarded as surplus to its requirements, were made available and distributed for the relief of the unemployed some time ago. The only clothing which will be available for issue from the Defence Department in future will be condemned part-worn articles no longer serviceable for Service purposes. Arrangements have been made to hand over this class of clothing, as it becomes available, to the State governments for distribution. It is not expected, however, that the quantities will be large.

Cite as: Australia, House of Representatives, Debates, 17 May 1933, viewed 22 October 2017, <http://historichansard.net/hofreps/1933/19330517_reps_13_139/>.

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