14th Parliament · 1st Session
Mr. Speaker (Hon. G. J. Bell) took the chair at 11 a.m., and read prayers.
– Has the attention of the Treasurer been drawn to the statement published in the press this morning that an increase of $ per cent, will bo made in overdraft rates by the associated trading banks as from the 1st June next 1 Is it not a fact that over 50 per cent, of the fixed deposits held by the associated banks are for a period of 24 months and that the average period is eight and a quarter months? In the circumstances, are not those institutions observing a time lag of from two and a quarter to three months, whereas the actual time lag is about eight and a quarter months ? What action does the Government propose to take in regard to the intended increase? Has the Treasurer been advised that the Commonwealth Bank intends to follow the lead given by the associated banks?
– I have not yet seen the announcement referred to by the honorable member. I point out, however, that when interest rates are falling the time lag works in the opposite direction.
– The associated banks would not allow it to operate in that way.
– That is a matter into which I shall inquire, to see if I can obtain information that will elucidate the position. I have not been advised that the Commonwealth Bank proposes to raise its rates.
Fourth report brought up by Mr. MCBRIDE, read by the Clerk, and agreed to.
Sister Kenny’s Methods of Treatment
– Yesterday the honorable member for Capricornia (Mr. Forde) asked me a question concerning the report of the medical sub-committee which is inquiring into the Sister Kenny Clinic at the Royal North Shore Hospital, Sydney. The report is an extensive document, but I have had the advantage of a conversation with Dr. Ingram, the chairman of this medical sub-committee.
Altogether, some 70 patients are under treatment at the clinic at the Royal North Shore Hospital. Of this number, fifteen have been selected by the committee and have been under observation for a period of treatment at the clinic varying from four to twelve weeks. This period is recognized by the committee as being far too short to justify any other than tenta tive conclusions; but, so far as the treatment has gone, it can be said that all the cases have shown some improvement, this improvement being more marked in some cases than in others.
The committee is of the opinion that the treatment has justified the establishment of the clinic; but, in view of the shortness of the time which has elapsed, and the importance of the matter, the committee considers that its observations should continue for a further period, during which the detailed supervision which it has instituted over these cases may be continued and it can be seen whether the improvements which have already resulted will be permanent, and whether further and more extensive improvement of the individual cases can be obtained from the treatment.
I am laying upon the table of the House the report of the sub-committee.
– In order to obtain an invalid pension, an applicant must be totally and permanently incapacitated, and, therefore, unemployable. Will the Minister for Repatriation make inquiries to ascertain the basis upon which the Repatriation Department determines that applicants for service pensions who fall within this category are not unemployable ?
– The point raised by the honorable member has been causing me some concern. From a commonsense viewpoint, indulgence in which I sometimes permit myself, it would appear that, if a man is permanently, and totally incapacitated - a condition precedent to the granting of a claim for an invalid pension - he must fall within the category of unemployability, and thus comply with the description embodied in the service pensions legislation. It would seem, however, that trouble has arisen because the determination of the matter is dependent upon the reports of medical men; and medical men, like lawyers, differ, much to the disadvantage of patients. Because the matter is of such outstanding importance, I am giving to it the most careful consideration. I realize the inconsistency that exists, and shall endeavour to resolve it.
– Will the Minister for Repatriation state whether it is the opinion of the Government that the intention was so to construe the Repatriation Act that, as has happened in cases which I have handled recently, a permanently incapacitated soldier should be granted on account of war service a pension of 40 per cent., plus the burntout soldiers’ pension? Will the right honorable gentleman inquire into the matter, and later make a pronouncement of policy, to show in what way the dependants of such a soldier would fare in the event of his death ?
– I shall look very carefully into, the matter. Perhaps the honorable gentleman is in a. position so to assist me that I may be able to deal with it comprehensively. I quite see that many possibilities are opened up, because a wide range of cases has to be dealt with.
– Has the Minister for Health any information to impart as to the personnel of the Nutrition Committees which the Commonwealth Government is setting up in the different States, and particularly as to whether the women of Australia will be represented upon them?
– I have taken an opportunity to consult Dr.Cumpston, the permanent head of the department, upon this matter. He has informed me that the Central Advisory Council, which is functioning in connexion with the nutritions inquiry, is to meet on the 4th June next, and proposes to have a prior discussion with him in relation to the composition of. the State local committees. The whole of the ground will then be covered, and I hope that I shall be able to supply the honorable gentleman with all the information he needs.
– Can the Treasurer state the amount of interest saved annually in the financial years 1932-33, 1933-34, 1934-35 and 1935-36 upon the conversion of loans effected in London by the High Commissioner for Australia, Mr. S. M. Bruce?
– I cannot give off-hand an analysis of the savings, but shall procure the details for the honorable gentle man. The total annual savings amount to approximately £3,400,000 in Australian currency.
– Has the attention of the Minister for Defence been drawn to the statement made publicly by Mr. Oldham, M.L.A., which has been given a certain degree of prominence in the press of Victoria, that, in the matter of measures for the local defence of Australia, this country is sponging on Great Britain ? As the impression appears to be strongly held in some quarters that our local defence measures are at present inadequate, will the honorable gentleman consider the advisability of making generally available for publicity purposes, copies of the speech which he delivered recently in New South Wales, setting out in detail the defence programme of the Commonwealth ?
– I did not see the statement in print, but was informed that Mr. Oldham had said that he required further information upon defence matters. I therefore wrote to him, and supplied him with a copy of the speech to which the honorable member has referred, which sets out in some detail the defence policy of the Government and the steps which have been and are being taken to promote it I do not know whether the other remark specifically attributed to Mr. Oldham by the honorable member was actually made, but, if so, it wasregrettable, for the statement is not in accord with the facts in any respect. The Commonwealth Government is actually doing much more work and spending much more money for defence than any other dominion in the British Empire, and its activities in that regard are appreciated by the British Government. I shall have pleasure in making available the information that the honorable member has requested, and as soon as Parliament rises and I can find a favorable opportunity for the purpose, I shall prepare a statement setting out clearly all that has been done for defence purposes since this Government has been in office.
– Has the Minister considered whether it is desirable to publish details of our defence projects simply because such information is asked for in Parliament ?
– It is, of course, impossible to answer every question asked by honorable members in regard to defence projects. Considerable discretion must be exercised in this regard by the Minister for Defence. At the same time every endeavour is made to afford the fullest possible information to honorable members and the public generally while preserving secrecy in such matters as should not be disclosed.
– Is the Minister representing the Postmaster-General able to inform me when the new broadcasting station at Clevedon, North Queensland, will be open?
– I shall furnish the honorable member with information on that point later in the day.
– Has the Minister for Defence noticed an article in to-day’s local press to the effect that grave concern has been occasioned by the construction of the oil tanks at Singapore Base above ground where they would be vulnerable to attack from the air? Has the Government considered the necessity for protecting the oil tanks in our capital cities from such attack by placing them underground ? This course is desirable also to protect the surrounding areas from damage by explosions.
– I should like verification of the newspaper report before making anycomment upon it. If the oil tanks at Singapore Base have been constructed as the honorable member suggests, it is not in accordance with the usual practice of the’ British defence authorities. The oil tanks for defence purposes in Australia - and I refer particularly to those at Clifton Gardens in my own electorate - are at least half underground. The other half of them is disguised from general observation.
– That is not so with the oil tanks at Darwin.
– I cannot speak with certainty on that point. The policy of the Government is to protect oil tanks from air attacks. I shall investigate the subject.
– I ask the Prime Minister whether, following the meeting of the Government parties this morning, the Government still intends to regard the vote on the cement duties as a vital issue, or has its bluff been called, forcing it to accept a compromise?
– Order ! The honorable member, will resume his seat.
– Yesterday, the honorable member for Swan (Mr. Gregory) made certain inquiries concerning the installation of rural automatic telephone exchanges. I am now able to inform him that the policy of installing automatic units in rural areas was decided upon in 1925 and, between the years 1926 and 1929, six trial units were installed in places in New South “Wales and Victoria, where their operation could be closely studied and supervised.
Twenty-six of these rural automatic exchange units were purchased in 1934-35, and installed in the various States as follows: -
Provision has now been made for the conversion of 52 additional exchanges, and, as far as can be gathered from the preliminary studies which have been made, the probable distribution of them over the various States will be -
Although the department is anxious to proceed with the installation of rural exchanges as extensively as possible, equipment of this nature is fairlycostly and supplies are limited. Moreover, the selection of places for the initial installations must ensure that the greatest benefits will be given to the community generally, both from the financial and service view-points. The claims of all districts are closely studied to ensure that the maximum advantages are derived from the units, and the cases selected up to the present have mostly been those where continuous service would be justified in the near future under the present basis governing the hours of attendance at telephone exchanges.
– I ask the Prime Minister whether any steps have been taken by the Commonwealth Government to seek the cooperation of the Government of New Zealand to adopt a policy to attract tourist traffic from overseas? If not, will the Government approach the Government of New Zealand on the matter?
– No such approach has yet been made, but I shall consider the honorable gentleman’s suggestion.
– In view of the fact that no communication has been received from the Japanese Government concerning the reported recommendation of the Japanese Tariff Committee that a 121/2 per cent. duty be levied on Australian wool imported into Japan, has the Minister received any report from the Australian Trade Commissioner at Tokio on the subject? If so, what is the nature of that report. If no report has been received, does the Minister propose to obtain a report?
– I am not aware that any such report has come to hand, but I shall investigate the matter.
– Will the Prime Minister inform me whether there is any ground for the report that is current this morning that it is proposed to appoint an ex-member of the United Australia party as chairman of the Industrial Board for the Federal Capital Territory ?
– The making of an appointment to the position is receiving attention, but I do not know of any member or ex-member of the United Australia party who has so far been considered for the position.
Proposed Subsidy to British Ships
– I ask the Prime Minister whether he is in a position to make a statement concerning the action taken following upon communications that have passed between the British Government, the Commonwealth Government, and the Government of New Zealand on the subject of the proposed subsidy for British shipping to enable it to meet the unfair competition of the Matson American Line in the Pacific?
– Representatives of the three governments concerned are consulting on the subject in London, and efforts are being made to ascertain the losses involved by the American competition, and the actual amount likely to be sought as subsidy. I can make no other statement on the subject atthe moment.
– In view of the recently published statement to the effect that the Government of the United States of America has just completed trade treaties with France and five other foreign countries, the object of which is to equalize to some extent the trade balances between the countries concerned, I ask the Minister directing negotiations for trade treaties whether the making of these agreements is not contrary to the advice furnished by the Government of the United States of America to the Commonwealth Government, when it sought to open up negotiations for a trade treaty with the United States of America with the same object?
– I do not think it will be practicable for the Commonwealth Government to intervene in any way in connexion with trade treaties between the United States of America and France, but I shall give some further thought to the honorable member’s question.
– I ask the Prime Minister whether the Government has yet made any decision as to the desirability or otherwise of taking action to correct in part at least the adverse trade balance between Australia and the United States of America?
– I can make no statement on that subject at present. If the time comes when a statement on the subject is desirable, it will be made.
– Will the Minister directing negotiations for trade treaties make a statement, before the House rises, of the present position of the negotiations with the governments of Belgium, France, Germany, Japan, Italy, Poland and Czechoslovakia for trade treaties with Australia?
The following papers were presented
Paralysis - Elizabeth Kenny Clinic at Royal North Shore Hospital, of Sydney. - First Report by Medical Sub-committee appointed by the Board of Directors of the Hospital.
Commerce (Trade Descriptions) Act - Regulations Amended - Statutory Rules1936. No.68.
Meat Export Control Act - Regulations Amended - Statutory Rules 1936, No. 58.
Naval Defence Act - Regulations Amended - Statutory Rules 1936, No. 63.
Prune Bounty Act - Regulations - Statutory Rules 1936, No. 57.
Wheat Growers Relief Act - Regulations Amended- Statutory Rules 1936, No.67.
In committee (Consideration of
Senate’s requests) :
Motion (by Mr. White) agreed to -
That any amendment made in the Schedule of the Bill by the Committee shall have effect on and after the day following the day the amendment is made, excepting where the Committee otherwise decides or the contrary intention appears.
By omitting the whole of sub-item (F) and inserting in its stead the following sub-item: - “(f)(1).
Hoop n.e.i. - ad val., British, free; intermediate.15 per cent.; general, 15 per cent. ; and in respect of paragraph (2) - a deferred duty as follows: - on and after 1stJanuary 1936-
Hoop n.e.i. - ad val., British 10 per cent.; intermediate, 10 per cent.; general 221/2percent.; and per ton, intermediate, 70s.; general, 70s.”
Senate’s Request (No. 1). - Leave out “1st January, 1936”, and insert “1st July, 1930”.
– I move -
That the requested amendment be made.
This is a formal motion. The deferred duty cannot be brought into force until a favorable recommendation is received to that effect from the Tariff Board.
Motion agreed to.
By omitting the whole of sub-item (w) and inserting in its stead the following subitem : - “ (w) Wood-working Machines and Appliances, but not including extra knives, viz.: -
Slicing machines, rotary, not being veneer slicing machines, ad val., British, free; intermediate, 15 per cent.; general,15 per cent.”
Senate’s Request (No. 2). - Amend the paragraph to make it: “ (24) slicing machines not ‘being veneer slicing machines, ad val.”
.- It has been ascertained that certain types of timber slicing machines, not of the rotary type, and not manufactured in Australia would not fall within the item unless the word “ rotary “ be omitted. The Tariff Board approves of the alteration requested by the Senate. I move -
That the requested amendment be made.
Motion agreed to.
Division 8 - Earthen ware.
By omitting the whole of sub-item (a) and inserting in its stead the following subitem: - “(a) Portland Cement, per cwt., British, free; intermediate,1s.; general, 1s.41/2d.
And in respect of sub-item (a) - For each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation - An additional duty of. per cwt., British, . 36d. ; intermediate. . 36d. : general 36d.”
And on and after 2nd April, 1936 -
Portland cement- per cwt., British, 6d.; intermediate,1s. 3d.; general, 1s. 6d.
Senate’s Request [No. 3). - Amend the subitem by making the duties - per cwt., British, free; intermediate,1s.; general,1s.41/2d. And in respect of sub-item (a) -
For each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation -
An additional duty of - per cwt., British, . 36d. ; intermediate, . 36d.; general, . 36d.
– I move -
That the requested amendment be made.
This item refers to cement, a concrete pill-box that the Government in another place was successful in taking last week. As honorable members are aware, the amendment made by this committee to the Government’s proposals was rejected by the Senate, which now requests that the Tariff Board’s recommendation be accepted. As some weeks have elapsed since the committee previously discussed this item, and as other subjects have been dealt with in the meantime, I think it desirable to make a full statement ofthe position, in order that honorable members may again be fully acquainted with it.
That the cement industry is a large employer of labour and pays large sums in wages cannot be denied. The Tariff Board states that, on the basis of an annual production of 400,000 tons of cement, employment is given to 2,000 hands in the quarrying and transport of raw materials and in the manufacture of cement. The total amount paid in wages is £350,000 per annum. In addition, indirect employment is given in the mining and transporting of coal and in the manufacture of paper bags.
During the last ten years, local manufacturers have supplied more than 95 per cent. of Australian requirements. Imports have been relatively small, and in the last few years have included coloured, white and quick-setting cements of types not manufactured in Australia. The stimulus given to cement production by the protection afforded to the local industry has led to the installation of plant far beyond the needs of Australia. Although the rated capacity of the plants is over 1,300,000tons per annum, in the peak year of production the total output was only approximately 750,000 tons. The output for 1933-34 was 410,000 tons. The board found that duties at the rates operating under the Customs Tariffs 1933 prevented external competition, and were being used to cover excess profittaking in an over-capitalized industry in which free internal competition did not exist, and in which highcosts of production were the inevitable result of the distribution of output between too many plants. Costs submitted to the hoard showed conclusively that if free competition had existed between the different manufacturers, some of them could have shipped to other States and sold at prices below the level of prices in those States, and still have made a profit.
It was stated by the manufacturers in Queensland that cementcould not be sold below a certain price even although it could be sold cheaper in the other States. The Brisbane City Council made scathing comments on that statement.
The value of the cement industry cannot be calculated solely in terms of raw materials used and employment created. Price is an important factor. Other important industries, such as the building and road-making industries use large quantities of cement, and an unduly high price not only retards progress in them, but also restricts demand and tends to limit the amount of employment in the cement industry. At the time of the board’s first inquiry local manufacturers were selling cement at the following prices : -
After an exhaustive investigation into costs, which were liberally dealt with, the Tariff Board came to the conclusion that the maximum reasonable selling prices, free on rail metropolitan area, should be-
The prices now obtaining for locally-made cement are higher than what the board considered to be maximum reasonable selling prices by -
Mr.Riordan. - How does the Minister account for the difference between the Queensland price and that charged in New South Wales?
– It is accounted for largely by the cost of haulage and different industrial conditions.
On the information submitted by the Tariff Board, there appears to be ample room for reduced selling prices.
While dealing with the question of prices, it is opportune to compare the local manufacturers’ prices of cement with those ruling in other countries. Information contained in the board’s report, and particulars which the Customs Department has recently obtained, show that the lowest Australian price at factory is 73 per cent higher than the United Kingdom domestic price expressed in terms of Australian currency, 65 per cent. higher than the Canadian domestic price on a similar basis, and 32 per cent. higher than the American price.
– Did the Tariff Board inquire into English costs of production?
– The Tariff Board can obtain details of prices charged in the various countries through the Customs Department. If there have been no recent importations, that information can be obtained by cable. Taking the highest Australian price at factory the margins by which the local prices are higher, are 128 per cent., 117 per cent. and 74) per cent. respectively. The disparity was much greater under the prices ruling a year ago. This serves to em phasize the price disability under which Australian users of cement are labouring compared with users in other countries.
It must be perfectly obvious to honorable members that if cement prices are high, building construction and employment in the building and other industries are seriously affected. The building industry, perhaps more than any other industry, reflects the prosperous condition of a country. When the price of cement is low there is increased activity in the building industry. That applies also to road-making. The petrol tax is distributed amongst the States in the form of a federal aid roads grant, and that money could have been more profitably expended if thecost of cement had not been so high during the depression period. The object of the board’s recommendation was to force down local prices so that Australian builders and road makers could obtain cheaper cement.
– How many roads are constructed of cement?
– In Victoria, quite a number of concrete roads are constructed, and in road-making bitumen is largely used in conjunction with cement. Importations of bitumen have gone up very considerably. That would not have been the case had the price of cement been cheapened.
In assessing reasonable maximum costs of production, the board appears to have been very liberal. A case in point is the cost of limestone for which a figure of 7s. 6d. to each ton of cement has been adopted. The hoard’s independent inquiries with regard to harder materials than limestone showed the following costs for each one and a half tons, which is the equivalent quantity of limestone to make one ton of cement: -
Blue metal spalls - Quarried, crushed to smaller dimensions than the sizes of limestone ordinarily sent to crushers at cement works, delivered five miles by truck, and sold at a price of 5s. 3d. per one and a half tons, including profit.
Hard screened ballast - Delivered into trucks in the country at 5s. per one and a half tons, including profit.
The reasonable maximum cost of production of cement at factory has been assessed by the Tariff Board at £2 6s. 5d. a ton in the case of New South Wales and Tasmania, and £2 10s. 2d. a ton in the case of Victoria and South Australia.
– No reference is made toWestern Australia.
– No. The Western Australian firm did not attend the first inquiry, and there was no evidence regarding costs of production in Western Australia. That was not the fault of the Tariff Board or of the Government. The second inquiry was held largely because the Western Australian firm did not attend the first one.
– What about the cost of cement manufactured from coral?
– I am led to believe that in Queensland the production of cement from coral would be a. cheaper proposition.
The liberality of the board’s assessment can be gauged from the figures given on page 8 of the original report with regard to the net cost of producing and marketing refined copper.
The cost of refined copper was £45 a ton. The grade of ore being treated necessitated the use of approximately 30 tons of material and the total cost was 30s. a ton of ore.
That amount covered the following costs : -
It must be agreed that the board’s figures of £2 6s. 5d. to £2 10s. 2d. as representing the maximum cost of manufacture of cement are not unreasonable, having regard to the figure of 30s. for treating a ton of copper ore.
Further support is lent to the board’s cost figures by the fact that in the last trading year the actual production costs of six factories, operating in three States, were below the board’s figures by from 6s. to 7s. a ton. As four of these factories were operating on an output of less than one-half of their capacity there could be no better proof that the board’s estimates did not set an impossible standard.
Mr.Rosevear. - They will be operating at a great deal less than capacity if the Government has its way in regard to this duty.
– That is not so. The price being lower, demand will be stimulated, and the industry will benefit. It is interesting to hear honorable members opposite interjecting so vigorously in defence of capitalism and monopoly, when they must know that it would be to the benefit of the workers if the price of cement were reduced.
The Tariff Board has allowed 10s. a ton as a reasonable margin for profit. Subsequent to the publication of the original report, the industry arrived at the assumption that the margin for profit allowed by the board was gross profit, and included selling and administrative expenses and taxation. The board has made it clear in the supplementary report that the term “ profit “ includes taxation, but not selling and administrative expenses, which are included under the heading of “ manufacturing “, for which an amount of 20s. a ton was allowed. In its original report, the board points out that only one company made a disclosed profit of less than 10s. a ton, and states that the need for reduction of profit is evident from the high earnings in a period of restricted output, when the rates of profit ranged from 6 per cent. to 32 per cent. per annum. I have read protests from some of the companies to the effect that their shareholders did not receive a high return, but they omitted to state that the preference shareholders got their pound of flesh right throughout the period of the depression. Statements made in this House and in the press seemed to indicate that the Goliath Company, at least, was different from the others, but we have it on the authority of such a reliable publication as the Wild Cat Monthly that this company sustained considerable losses in an oil speculation, and wrote down its shares to 13s. 4d., although they were worth 29s. on the Stock Exchange, and were regarded as probably the second best Australian industrial investment available.
In the year prior tothe original inquiry, the excess profit over the reasonable figure of 10s. a ton, on the output of eight plants, amounted to approximately 12s. 6d. a ton, which, when applied to the output of all factories, represented approximately £200,000 in. one year. The excess profit figures brought out in the supplementary report are still more illuminating. A summary of the results of ten factories during thelast trading year shows that after allowing for a reasonable profit of 10s. a ton, including income tax and 6s. a ton for depreciation, the excess profit earned was 14s.11d. a ton. The sales made during the year were 543,000 tons, so that the excess profit earned represented an impost on users to an amount of £400,000. This summary is all the more striking by reason of the fact that the excess profit of 14s. l1d. a ton is very close to the effective British preferential tariff rate of 15s. 6d. a ton imposed during the year in which the profits were earned. Furthermore, the excess profit was earned by plants working, on an average, at less than half of their capacity.
There are two questions which may be exercising the minds of honorable members. These are -
The Tariff Board consists of men who are not merely theorists, of the kind who can offer remedies for any ill; they are practical men.. One was works manager of one of the biggest manufacturing businesses in Victoria; another is a man possessing pastoral experience, and wide general knowledge; another is an engineer, and was proprietor of a manufacturing concern ; while the chairman isa. senior Customs officer, who was, for many years, associated with that department, and is used to the hearing and sifting of evidence. In its annual report, the board stated that its idea of protection was that Australia should come first, keeping in mind, of course, the provisions of the Ottawa agreement.
– Does the Government always act upon the reports of the Tariff Board?
– In regard to matters in which British preference is involved we do. Honorable members must admit that none of the alterations of duties recommended by the Tariff Board has injured any Australian industry. Certain excesses have been corrected, and imposts have been taken off the raw materials of manufacture, resulting in benefits to Australian industry. The board has conducted two inquiries into the cement industry, and it is more likely to be right in its conclusions than is any honorable member of this House. The old, haphazard method of fixing duties at arbitrary rates no longer obtains.
-The board admits that there are unusual features about its report.
– The board points oat that the manufacturers, like all those who enjoy a monopoly, have increased their prices to the limit of the protection.
– The board also points out that it was unable to obtain figures regarding British prices and costs.
– That was because the monopoly had been so successful that there were no British importations at all. However, since then there have been some shipments, and the figures available show that there will be no danger to the Australian industry as the result of the reduced duties.
The Tariff Board considers that reasonable maximum selling prices, free on rail metropolitan area, in respect of locallymade cement should be as follows: -
During the last three months, the Custons Department has examined invoices for every consignment of cement over 30 tons, and the lowest actual landed costs on wharf, free of duty except for 5 per cent primage, were -
The landed cost figures compare with the board’s reasonable maximum selling prices as follows -
It is plain, therefore, that imported cement could not be landed in competition with Australian cement if the local product were sold at reasonable prices. With regard to New South Wales, the board states, in the supplementary report, that it is satisfied that efficiently conducted factories in that State could meet the competition of free importations landed at a cost as low as £3 10s. 3d.> free on wharf Sydney, which is 4s. 4d. a ton lower than the lowest actual landed cost to date, and still make a higher margin of profit than the 10s. a ton, which the board considers reasonable. The evidence tendered by the industry in connexion with last year’s trading confirms this view. Four factories that sold 260,000 tons in New South Wales during the trading year, would, after providing 6s. a ton for depreciation, have made an average profit of 9s.- a ton, if all their product had been sold at Sydney at a price of £3 10s. 3d., free on rail. Sales in markets more adjacent to the factory than Sydney would entail lower freights, and increase the average profit. This could have been achieved by the four factories operating in the aggregate on less than 40 per cent of capacity. Figures of individual manufacturers, which for obvious reasons cannot be disclosed, give much stronger support to the board’s contention.
The comparative absence of imports into New South Wales during the four months ended the 31st March, 1936, when duty free admission was permitted from the United Kingdom, lends colour to the belief that manufacturers in that State have little to fear. The imports into New South Wales during that period were only 280 tons, of which nearly half were special kinds of cement of a kind not manufactured in Australia. Imports of ordinary cement are, therefore, at the rate of only 400 to 500 tons a year, or about one-sixth of one per cent, of the requirements of New South Wales.
On the question of dumping, various statements have been made or published in the press to the effect that United Kingdom cement has been sold to Australia on the. basis of from 18s. to 20s. a ton f.o.b. and at freight rates as low as 13s. a ton. The Customs Department took immediate steps to check these state-
Mr. White ments, and found that no cement, either imported or on the water, has been quoted at as low an f.o.b. price as that alleged. At the moment, inquiries are being made with regard to low freight rates, but, if the results of inquiry into the statements with regard to the f.o.b prices can be taken as a guide, it will probably be found that there will be no foundation for the fears with regard to freights.
– How much imported cement has been landed at Perth?
– One shipment of cement by a freighter is due to arrive at Fremantle on the 22nd June next, and on that shipment the unusually low freight rate of 16s. or 18s. a ton is being charged. I point out, however, that if inward freights are low on this particular ship, outward freights on wheat will also be low. The landed cost of the cement will be £3 2s., 8d. free of duty, but including primage. To this will be added 5s. 6d. dumping duty under section 4 of the Customs Act, and a further ls. 6d. under section 7, bringing the total landed price up to £3 9s. 8d. The Tariff Board’s reasonable selling price for South Australia, which has been adopted for Western Australia, is £3 8s. 2d., so that there will still be a margin of ls. 6d. in favour of the Australian manufacturer.
– How can the department determine when dumping is taking place, if it does not know the cost of production in Great Britain?
– Costs of production in Great Britain do not affect the matter. Whether dumping is or is not occurring is determined from the invoices, which show the freight rates, f.o.b. prices, and insurance charges. The duty is imposed on the f.o.b. prices, or the domestic prices in the country of origin, whichever should be the higher. Therefore, the full amount of the duty is imposed irrespective of the conditions of labour and costs of production in Great Britain. If the British industry worked day and night in order to produce cheap cement for export to this country, the dumping duty would ensure that it was not landed at prices with which the local industry could not compete. Even in the case of cement coming out as ballast on a freighter, the Customs Department can call for deposits without waiting for a Tariff
Board inquiry to see if dumping is taking place as is required under the Industries Preservation Act. Such payments would be sufficient to load the landed price of the cement to what would be a fair selling price.
– Is it mandatory under the Ottawa agreement that inquiries be made by the Tariff Board into the production costs in Great Britain?
– It is not mandatory, but the British manufacturers, and those of any other nationality have the right to appear before the Tariff Board, which is in the nature of an open court.
– Did the British manufacturers give evidence in this case?
– No. But the main object in removing the duty on British cement is to force down the price of cement to the Australian user.
– Has the Minister taken, any action with regard to the cement, which is now on its way to Australia?
– It is not here yet, but the honorable member may rest assured that the Government will prevent any dumping of cement. The lowest freight rate on any shipment of cement to date has been £1 5s. 5d. a ton, and the highest £1 9s. 6d. a ton, the average being about £1 6s. 7d.
Certain sections of the press gave prominence to a statement attributed to the Premier of Tasmania concerning the dumping of English cement into Tasmania at a cost of 18s., whereas the price in England was 32s. per ton. When the authenticity of the figures contained in the press statement was challenged, the Premier explained that they were included in’ a broadcast address which he had proposed to deliver, but that following a further inquiry the figures had been deleted from the copy used for the broadcast. The copies handed to the press by the Premier were not corrected. Investigations by the Customs Department show the irresponsible manner in which statements have been made by certain interested sections on the cement question. I assure honorable members, however, that the question of dumping will be closely watched, and, if necessary; the provisions of the Customs Tariff (Industries Preservation) Act will be invoked.
In its supplementary report,the Tariff Board points out that two new companies are being formed to manufacture cement in this country, one in New South Wales, and one in Western Australia. While the Government views with some apprehension the construction of further works for the manufacture of a commodity, the demand for which can more than fully be catered for with existing plant, the fact nevertheless remains that these new companies are entering the field aware that the duties have been reduced. Inquiries instituted in Western Australia in February last indicated that the formation of the new company in that State was proceeded with in the full knowledge of the abolition of the duty on British cement,” as it was definitely held that the company would be able to produce cement at less cost than other companies now operating in Australia.
– The Western Australian companyis merely in the prospectus stage.
– Yes. Other industries in which the production costs are higher than they are in the cement industry are operating without the protection of a duty. They merely have the protection of exchange. One instance is the wire netting industry in Western Australia, where a very efficient company buys the steel rods from Newcastle, and turns out the finished product. The only protection it enjoys is afforded by the exchange. The Australian biscuit industry has to compete with British manufacturers who enjoy the benefits of cheaper production costs, and it is able profitably to carry on under the protection of the exchange. The possibility of two further companies entering upon the production of cement in Australia shows that the present companies, which have been operating, perhaps, on an uneconomic basis, can be competed with, and that cement can be sold at a profit by other companies working on a different basis. I agree that internal competition can be too intensive, and the Government views with a certain amount of apprehension the proposal for the establishment of two additional cement manufactories; but with cheaper cement, more and more will be sold, and possibly there will be scope for the new concerns. Up to the present, the cement cartel has not had to meet with competition, and when manufacturers can get together in a cartel because there is a monopoly in one market, they can exploit the public, just as the cement industry and the paper and bottle industries which had not been touched over the last decade, but which this Government has had the courage to tackle, have exploited the public.
-The iron and steel industry has not been touched.
– It has suffered many reductions of duty.
– Even admitting the possibility of the Minister’s case in that respect, is there any reason why the duty should be eliminated?.
– Yes. The honorable member should bear in mind that the Australian cement industry has the protection of the 25 per cent. exchange, and that it also has the assurance that the duty will automatically be reimposed if the exchange rate falls. That safeguard has been sufficient cover for other industries. The honorable member cannot name one industry which has been injured by this Government’s reduction of duties.
– The manufacturers of gears have suffered.
– They have not been injured. If secondary industries had been injured in any way, it would be shown in the employment figures, but employment in. secondary industries at the present time is higher than it has ever been in the history of the Commonwealth, despite the fact that a thousand changes have been made in the tariff, for the benefit, not only of secondary industries, hut also of the people as a whole.
The customs tariff serves three essential purposes, among a number of others. The first is protection to industry.
– What protection is the Government giving to the cement industry?
– We have heard the honorable member say previously that the exchange does not protect an industry, because the internal costs rise, and that the protection is, therefore, obliterated. But the honorable member must have been out of the chamber when I reminded the honorable member for Perth (Mr. Nairn) of the excellent industry which is making wire netting in Western Australia, and which has to buy its raw material from Newcastle at a cost considerably higher than would be the case if it could import it duty free.
The second essential purpose of the tariff is that it is revenue-producing. More than half of the revenue of the Commonwealth comes from indirect taxation. The country could not continue its existing social services were it not for the collections of customs duties. The income tax, as one instance of direct taxation, is more than swallowed up in the payment of invalid and old-age pensions.
– What revenue does imported cement contribute?
– It has paid nothing over a number of years, because there have been no imports of the commodity.
– What then will it pay in the future, when, if the Ministry has its way, there will be no duty on importations from the United Kingdom?
– I have already answered the honorable member generally, but I reiterate that the Australian cement manufacturers will receive adequate protection from the exchange.
The third cardinal purpose of the tariff is price regulation. This Government has had sufficient courage to use its powers to regulate the prices of commodities sold in Australia, but the Labour party, when it was in power, was the friend of the monopolist. This Government will use the tariff weapon to control monopolies and prevent exploitation. It is the first and last essentials, namely protection and price regulation, which feature very largely in the issue which this committee must now decide. The Government is confident that the free admission of cement from the United Kingdom will not endanger the local industry, particularly in view of the fact that the protection afforded by exchange is in the vicinity of 9d. per cwt. Therein is an effective answer to the Leader of the Opposition. As far as price regulation is concerned, the proposed duties are set at such a level as will ensure consumers obtaining their supplies at a much more favorable price than hitherto, and, accordingly, will curb the undue profit-making in which cement manufacturers have so freely indulged in the past.
There has been considerable discussion of this item, but the findings of the Tariff Board remain unshaken. The greater the light thrown on this question, the greater the truth is revealed that the Tariff Board’s findings are sound, accurate, and desirable, and the greater is the need in the interests of the community that their recommendation should be adopted.
In view of the facts I have now placed before, the committee, I trust the Senate’s requested amendment will be made.
– ‘Has the Minister nothing to say about the Ottawa agreement?
– No ; but the honorable member may raise that issue if he likes, and I shall answer him.
.- I regret that the Government did not accept the direction given by this committee, when this question was debated some time towards the end of March. The Opposition is concerned chiefly with employment, in this great Australian industry, whose product is made almost entirely from Australian raw materials. On an output of 400,000 tons of cement annually, the industry gives direct employment to 2,000 men. In a normal year, when the output would be approximately 700,000 tons, the number of mcn directly employed would be 3,500. The Tariff Board estimates the cost of cement in Australia at £175 for each employee in the industry, but practically the whole of those costs is made up of wages. Conceding the correctness of the board’s figures, this would indicate that 12,000 men are directly and indirectly employed in the industry. That is why we contend that the Minister should not take any offensive against the decision reached when the question was previously before the committee. At a time when approximately 300,000 men are unemployed throughout Australia, there is no justification for the Government to put this Australian industry on a free-trade basis in competition with the cement manufacturers of Great Britain. Honorable members must also bear in mind that the (111tv which this Government abolished was not imposed by the Scullin Government, as certain Ministers are inclined to lead the committee to believe. Away back in 1914 the duty of ls. per cwt., or £1 a ton British and of ls. 6d. per cwt. or 30s. a ton general, was imposed. That was reduced to about 16s. 9d. and 27s. 6d. a ton respectively, by exchange adjustment. On the 29th November, 1935, the duty on cement from Great Britain was abolished. Thus from that time onward the Australian industry was accorded less protection than had been given to it at any time during a period of over twenty years. In March of this year, this branch of the legislature adopted the proposal of the honorable member for Moreton (Mr. Francis) that the duty should be - per cwt., British, free, intermediate, ls. 3d., and general, ls. 6d. This, in the case of cement from Great Britain, was only one-half of what had operated for over twenty years. Now, a Senate directed by the Leader of the Government, has asked us to accept a duty of British free, intermediate ls., and general ls. 4rd. I hope that honorable members will maintain their freedom of expression and of action. On numerous occasions the Government declared that the tariff was not a party matter, and that Ministerial members were free to vote as they think fit. I appeal to those honorable members to stand by the proposal which they previously adopted. If the Government has embarked upon an endeavour to regulate prices by means of the tariff, why does it not frankly seek the necessary power to regulate the prices of all imported goods as well as of locally manufactured goods? It commands a majority in both branches of the legislature. The Senate would give legislative effect to any decision of the Cabinet. Unlimited powers over trade and commerce could be sought by means of a referendum of the people. Instead of doing that, however, the Government proposes that only the local manufacturer shall be placed on the gridiron; that he alone shall be singled out for a searching inquiry.
The Minister for Trade and Customs (Mr. White) has stated that the Scullin Government took no steps to reduce the prices of the products of Australian factories. That is not correct. Upon a number of occasions, before higher duties were imposed definite assurances were obtained from manufacturers that their prices would be reduced, and substantial reductions were made. During that period of two years and two months, the prices of numerous items produced by Australian factories were reduced by from 33-J per cent, to 40 per cent.
I have not heard the Minister controvert the claim of the Australian cement manufacturers that even if they have made profits in the past, no unreasonable dividends have been paid, and that the profits earned have been devoted to the development of the industry. If they are profiteering, the Government can apply a remedy under the powers which it possesses to restrain the operations of monopolies and to increase taxation. It can also seek unlimited powers over trade and commerce, which would enable it to deal with price-fixing generally. A perusal of the facts and a consideration of the evidence tendered by honorable members in this Chamber show that the biggest company in New South Wales has not in its history paid a dividend greater than 10 per cent, on its capital. During the depression period the dividend dropped to 2-J per cent., and the reserves of the company had to be drawn on to a certain extent to provide it. A great deal has been said concerning substantial profits having been made by the Adelaide cement company; yet more than one-half of its capital is invested overseas in high profit-making enterprises, the returns of which have been included among the profits of the cement company.
What action has been taken by other countries for the establishment of this great natural industry? In order to afford the desired measure of .protection the United States of America found it necessary, to increase to 50 per cent, the preference given to locally-made cement in connexion with all government work. By that means imports were excluded. British cement was being sold in the United States of America, and substantial preference was insisted upon to keep it out.
This whole matter has resolved itself into a consideration of the effect upon the Ottawa agreement, proving what a!! bad agreement that is, amply justifying the stern struggle against its enactment by honorable members of the Opposition, and fulfilling the predictions made by the then Leader of the Opposition :and other honorable members who sit on this side of the Chamber. We dispute the assertion of the Government that the restoration to 6d. per cwt. of the duty on cement from Great Britain was a violation of the Ottawa agreement. The Government found that agreement a very convenient excuse for insisting upon the adoption of its proposals.
– It was not mentioned to-day.
– The Minister wishes to forget all about it now, because he has been taken to task very ably not only by certain Ministerial members, but also by a big section of the Australian press. The opinion of at least four of Australia’s leading K.C’s. is also at variance with the contention put forward by the Government. Mr. Wilbur Ham, Mr. W. K. Fullagar, Mr. D. Maughan, and Mr. G. E. Flannery, in the course of the statement of their opinion, said -
In our opinion the proposal that the British preferential tariff should bc at the rate of Cd. per cwt., docs not involve any contravention of any provision expressed or implied, of the Ottawa agreement.
Further on they said -
According to the tariff law at present in force, the British preferential tariff on cement is greater than 6d. per cwt. The proposal that it shall be Od. per cwt. involves, therefore, a reduction, and not an increase, of the existing duty, and article 12 only prohibitsnew duties and increases. Any argument based upon the established practice of the department rests, in our opinion, upon a. misconception.
The fact that one or two of the provisions of the Ottawa agreement are capable of causing such legal disputation as has occurred’ shows what a slipshod agreement it is. Representations in the matter were made to the Commonwealth Government by the British Government. If these two authorities be right, emphasis is lent to the contention which we on this side have always advanced, that it is an iniquitous agreement, in that it cuts right across the fiscal policy of Australia and seeks to place above the Parliament what has been created by the Parliament, : namely, the” Tariff Board. Assuming that the Government is right in contending that the imposition of onehalf of the duty which applied for over twenty years is an infringement of the Ottawa agreement, or that, because the Tariff Board has said that cement from Great Britain should be admitted into Australia free of duty, this Parliament has not the power to impose a duty, what is to prevent the introduction of a tariff schedule providing for the free entry of hundreds of items from Great Britain, even without a recommendation of the Tariff Board, or even if no increases may be made above rates recommended by the board ? Such a state of affairs would place the industries of this country in real jeopardy. The Minister may argue as strongly as he likes that the Government does not stand for freetrade; the facts reveal that it is tending in that direction. There is nothing to prevent the introduction of a tariff schedule providing for reductions of duty upon hundreds of items from Great Britain, without any reference of the matter to the Tariff Board.
– The honorable member, as Minister for Trade and Customs, did that; it has not been done by this Government.
– The Government of which I was a member increased the duties. It gave to the Australian manufacturers and the Australian workmen the benefit of the doubt. This Government invariably gives the benefit of the doubt to the overseas manufacturer, and thus whittles away the fiscal policy of Australia. [Leave to continue given.] I regret exceedingly that this case is not to be decided upon its merits, and that the Government has seen fit to endeavour to discipline its following and direct honorable members as to how they shall vote. Something unprecedented has happened. A direct attack has been made by chambers of commerce and freetrade organizations against certain Government members who had the courage to vote according to their convictions. The attempt has been made to pillory them, even in their electorates.
– By means of scandalous propaganda.
– That is so. This is the boasted, freedom which supposedly is enjoyed by members of the Government Party.
– Does the honorable member say that the Government has done this thing?
– The Government has not repudiated it. Some of the propaganda probably has the tacit approval of certain members of the Ministry.
– I ask that the honorable member he made to withdraw that remark. The Government would not associate itself with anything of the sort.
– The remark must be withdrawn.
– If the Minister takes exception to my remark, I withdraw it. It is no wonder that not only the protectionist press, hut also newspapers which were most material factors in the return of the Government to power, have severely criticized its attitude upon this issue. The Melbourne Herald, in its leading article of the 6th May last, under the heading “ No room for compromise “, made the following comments : -
What is called the “rift in the U.A.P. party room because of the cement duties and a false interpretation of the Ottawa agreement, is not a cause of astonishment to those who know the facts. The Government proposed that the duty of a shilling per hundredweight be abolished. The House of Representatives carried an amendment that it be reduced to sixpence. The tariff, of course, is not a schedule of duties proposed and tentatively enforced by Ministers, but a schedule that has been finally approved by Parliament. Ministers at once contended that the action of the House of Representatives in reducing the duty, instead of abolishing it, was a breach of the Ottawa agreement, which provides that thereshall not be an increase above the recommendations of the Tariff Hoard.
The British Government, making an interference in Australian legislation unprecedented for two generations, at once accepted the Federal Government’s baselss opinion. It sent a protest. British officials and the agents for British manufacturers have since been active in efforts to show, in effect, that the AustralianParliament’s right to frame its own fiscal system has been forfeited. The most amazing suggestion of all is that the Federal Government, in the event of Parliament enforcing the reduced duty of sixpence, should communicate with the British Government pleading guilty to a violation of the Ottawa agreement - which will not have been violated - and ask for a conference to consider variations. This attempt to misinterpret the Ottawa agreement, following closely upon the United States of America and Japanese treaty incidents, suggests that Ministers are a little tooaffable towards influential but not disinterested advice.
That was a just rebuke by a newspaper which had a good deal to do with the establishment of the United Australia party, the placing in office of this Administration, and particularly the appointment of its present leader.
I propose now to invite honorable members to consider the remarks made by some members of the Ministry when the Ottawa agreement was being considered in this House. The present Prime Minister (Mr. Lyons), speaking on the 3rd November, 1932, made the following remarks, which will be found on page 1859 ofHansard of that date: -
The only objections raised by the Leader of the Opposition are those to which I have referred. One was the alleged limitation that will in future be placed upon Parliament by the Tariff Board. There is no justification whatever for that insinuation.
Now we’ find the Government insisting on adherence to the Tariff Board’s recommendations and justifying itself under the terms of articles 10 to 14 of the Ottawa agreement. We are told that the Government is impotent to vary cement duties because of these provisions. Honorable members opposite have been practically denied the right to use their own judgment on this subject.
– Some of us have used our own judgment.
– That is so; but an attempt is being made to stampede the, honorable gentleman and some others opposite, and force them to reverse the vote they gave on this issue last March. Let me remind the committee of the language of articles 10, 11 and12 of the Ottawa agreement. They read as follows : -
His Majesty’s Government in the Commonwealth of Australia undertake that during the currency of this agreement the tariff shall be based on the principle that protective duties shall not exceedsuch a level as will give United Kingdom producers full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production, provided that in the application of such principle special consideration may be given to the case of industries not fully established.
His Majesty’s Government in the Commonwealth of Australia undertake that a review shall be made as soon as practicable by the Australian Tariff Board of existing protective duties in accordance with the principles laid down in article 10 hereof, and that after the receipt of the report and recommendation of the Tariff Board the Commonwealth Parliament shall be invited to vary, wherever necessary, the tariff on goods of United Kingdom origin in such manner as to give effect to such principles.
His Majesty’s Government in the Common wealth of Australia undertake that no new protective duty shall be imposed and no existing duty shall be increased on United Kingdom goods to an amount in excess of the recommendation of the Tariff Tribunal.
It was pointed out when the Ottawa agreement was under consideration in this House, that mischievous results would probably follow our endorsement of those provisions, particularly if a government with freetrade leanings assumed office in. Australia. The tendencies of this Government, which at that time were definitely towards freetrade, have been far more strongly in that direction since then. What is happening in connexion with the cement duties is, in fact, a complete justification for the views expressed by members of the Labour party when the Ottawa agreement was under consideration. It has been said clearly on behalf of the Government that, unless we approve of the recommendations of the Tariff Board in regard to cement, we shall infringe the Ottawa agreement. The Government would, in fact, bind us to the decisions of the Tariff Board. Yet when this very subject was under discussion in the House on the 8th November, 1932, and the honorable member for Herbert (Mr. Martens) made the following pertinent interjection while the Minister for Trade and Customs was speaking -
Is the honorable member accepting all the decisions of the Tariff Board? the Minister replied -
No; I have never said I will do so. The Prime Minister, in the policy speech which won the approval of the majority of the electors of the Commonwealth last December, as shown by the number of supporters of the Government in this Parliament, made it clear that his party would accept the Tariff Board as a guide, and that is how I accept it.
But the scene has changed. To-day honorable members opposite are being denied freedom to vote as they desire on this issue, on the ground that the Tariff Board’s recommendation must be implemented in the tariff schedule.
– I do not think so. The Minister for Defence (Mr. Parkhill) came to the aid of his colleague at one period when the debate on the Ottawa agreement was reaching a critical moment. On the 16th November, 1932, he said, according to the report on page 2415 Of Hansard for that date -
Commonwealth Governments generally have accepted the recommendations of the Tariff Board, but it is to be remembered that thu Parliament is paramount in tariff matters. Honorable members opposite speak as though these matters were to be settled by some foreign, body outside of this House altogether, whereas what they overlook or never stress is the outstanding fact that this Parliament has the final decision in respect of any duties imposed.
The honorable gentleman also said on the same day -
Article 12 of the Ottawa agreement does not mean that the Government must accept the recommendations of the Tariff Board.
Now some of the supporters of the Government arc being placed on a gridiron. They have been subjected to much abuse and misrepresentation by certain free-trade interests in the country because they wish to stand fast to the policy which we were told was endorsed by the electors. Why should the Government attempt to stifle the discussion of this subject? Why should certain honorable members opposite be compelled to submit to the dictation of the Tariff Board on an issue of this importance? We have been told to-day that any departure from the recommendations of the Tariff Board in connexion with the duties on cement will place the Ottawa agreement in jeopardy; but we were told something quite different, when the ratification of that agreement was being considered in this House. It is extremely unfortunate that the original suggestion, that the cement duties endorsed in this chamber were a contravention of the Ottawa agreement, should have been made bymembers of this Government. Quite naturally, of course, the High Commissioner for the United Kingdom in Australia, Sir Geoffrey Whiskard, was quick to take advantage of this suggestion. No doubt he informed the British Government that members of the Commonwealth Government regarded the vote of the majority of the honorable members of this chamber on the cement duties as an infringement of the Ottawa agreement, and that led to the British Government to make a protest to the Commonwealth Government on the subject. Following upon this protest, the Melbourne Herald published a leading article on the 1st May, 1936, from which I abstract the following paragraphs : -
For the first time within a period embracing Australia’s colonial as well as dominion status, the British Government has taken a hand in the direction of Australian legislation, and attempted to influence Government and Parliament during parliamentary discussion. A section of the Cabinet and Ministerial party has tacitly asserted the right of the Tariff Board by the Ottawa agreement to control the country’s fiscal policy and hold Parliament to its orders.
The Government is attempting to coerce its followers and influence them to record a party vote under political duress when the matter at issue according to monetary policy and pledges is one upon which political freedom should be complete. . . .
That British statesmen at a time of anxious occupation with grave concerns involving the Empire’s safety, should turn from their tremendous duties to instruct the Australian Parliament how it should deal with a sixpenny duty on cement, is cause for unalloyed wonder.
The terms of the rare communication as presented by the British High Commissioner, Sir Geoffrey Whiskard, implied an interpretation of the Ottawa agreement which is palpably inaccurate and was never accepted by either Australia or England.
The contention set up on behalf of Great Britain is that parliamentary rejection of a recommendation by the Tariff Board is necessarily a breach of the Ottawa agreement. The argument is baseless.
These comments, I remind the committee, were made by the newspaper which was largely instrumental in bringing about the formation, of this Government.
The CHAIRMAN (Mr. Prowse).The honorable member’s extension of time has expired.
Sitting suspended from 12.J$ to 2.15 p.m..
.- The amended duties on cement led to a great deal of controversy, and have been responsible for extraordinarily muddled ideas. A most astonishing attitude is that adopted by the Deputy Leader of the Opposition (Mr. Forde), who says that he uses the Tariff Board as a guide, and, having admitted that the Tariff Board is a guide to what is a fair thing, although he does not necessarily accept all of its recommendations, then proposes the continuance of a duty, the practical effect of which must be to enable inordinate profitmaking to continue.
– I have always held that Parliament must be supreme in these matters.
– I am not discussing the supremacy of Parliament. I am assuming that the Deputy Leader of the Opposition, until to-day, at any rate,- had the average observation and intelligence of members of Parliament, and that when he saw the cost and profit figures vouched for by the Tariff Board, which he regards as a guide in these matters, he would not continue in that blind faith in prohibitions and restrictions of trade which enables him to disregard the guidance of the Tariff Board, and to say that the duty on cement should continue.
– I have always said that I did not have blind faith in the Tariff Board.
– The honorable member said one of the prime considerations in regard to this matter is that practically the whole of the money spent in the industry is paid in wages; that as the whole of the raw material is procured in Australia the cost of procuring it is spent largely in wages. But the honorable member completely ignored the evidence which the Tariff Board produced in its second report, which showed that out of the prices charged in Australia ranging from £4 6s. 8d. to £4 19s. a ton, the average profit and allowance for overhead charges amount to over 30s. a ton. Actually, in one factory the allowance for profit and overhead charges is £2 a ton. How the honorable member can accept the evidence of the board as a guide, and then say that practically the whole of the money spent in the industry goes in wages, passes comprehension. On the evidence brought forward in the. board’s report, there is no danger to Australian employment if the duty on cement is removed; on the contrary, there is every prospect of improved employment, because cement enters largely into the costs of a number^ of other industries, such as the building trade and road-making. If the price of cement were, lowered, it is reasonable to assume that employment in. industries which use cement would be increased. But, before the price of cement could be lowered considerably, the cement industries would, undoubtedly, have to face a fairly severe reconstruction. The large allowance for profit and overhead is not due to rapacity on the part of the cement companies. Most honorable members know people engaged in the management of cement companies; they are decentcitizens, and most of them - in fact, all of them of my acquaintance - would not be guilty of looting the public in order to take an excessive profit against the interests of the general community. The inordinately high price of cement is due to the fact that the. industry became overcapitalized during the boom years which preceded the depression. The fact that the duty has been in existence, as the Deputy Leader of the Opposition has said, for practically 20 years, and was continued through the depression, has enabled the cement industry to shelter itself from the necessity of going through the painful process of cutting out dead-wood and reconstructing its capital as every other industry has had to do during the last few years. That is a process which it would be unreasonable to expect shareholders or boards of cement companies to face unless it were absolutely necessary. But in the interests of those industries which use cement, and of the general development of Australia, it is necessary that the capital of the cement companies should be written down. It is precisely for the purpose of ensuring this, which would permit the sale of cement at competitive prices, that the . Tariff Board has recommended the removal of the duty. On the merits of the case from the point of view of the nation, and of employment in Australia, the proposal of the Government to accept the request of the Senate is entirely justified. The writing down of capital cannot be done merely by writing a few figures in a book; it is a difficult piece of organization which, in some cases, may involve difficulties of finance. The ,profits in the cement companies have not been equal in all cases. On page 3 of its supplementary report, the Tariff Board indicates the variations in the allowance for profit and depreciation as ranging from £l 3s. 7d. to £2 Os. Id. a ton. Obviously, it would be much simpler for the companies making large profits than for those making small profits to reduce their prices. In some instances, to bring about this result, it might be necessary to arrange for a pooling of the plants operated by the different companies. From that point of view, I think there is a case for asking the Government to allow a certain amount of time to the industry before it is exposed to the possibility of having to compete against imports from overseas. One other consideration, and a very important one, which, to some extent, may handicap the Government in allowing further time, is the question of Australia’s obligations under the Ottawa agreement. A request was moved in the Senate that the duties should be removed in twelve months’ time; but the Government was unable to accept it. Although I think the Government was justified in its refusal to accept that proposal, I suggest that a shorter period is worthy of consideration. A good deal has been said about the legal obligations of the Commonwealth under the Ottawa agreement. Opinions have been quoted of a number of leading Kings Counsel in Australia, men of the highest legal standing, to show that as long as the duties have a downward tendency, it is entirely at the option of this Parliament to decide to what point they should finally be reduced, and that as long as some reduction occurs, there is no infringement of the Ottawa agreement. That may be in accordance with the letter of the agreement, but it is definitely not in accordance with a common sense reading of article 11. That article was agreed to by the British Government, so that any reductions of duties in the Australian tariff would be made in such a r ………I- that no injury would be inflicted on Australian industries. Having’ received that concession from the British Government, allowing what might .be called a gradual discriminating adjustment of the Australian tariff, it would obviously nullify the whole value of article 11 if Parliament were at liberty to reject recommendations ‘ made by the Tariff Board for a. .reduction of duties.
– Does not that preconceive a reduction at the British end as well as at the Australian end ?
– It preconceives the satisfaction in the board’s mind that it is dealing with the realities of the position. The board has had ample evidence as to the price at which cement should be sold.
– Not produced ?
– I move-
That the following words be added to the motion, as a modification : - “ as on and after 1st December, 1930.” [ hope the Minister will give due consideration to the amendment, because I do not think the cement duties concern. British interests very much. The margin between profit and production costs in Australia shows that even without the duty, there is little prospect of importations being made from Great Britain. The British Government, however, feels that it cannot allow preferences to be withdrawn without entering a protest. Unless some protest were raised it might be regarded as conceding the right of this Parliament to go back on its ratification of the. Ottawa agreement in a wholesale manner. I earnestly suggest that a short period should be allowed to the cement companies to effect reconstruction. I do not think that this would be deemed by the British Government as a rejection of the Tariff Board’s recommendation. That view is strengthened by the fact that even if the duty were removed forthwith, there is little prospect of large importations of cement being made. I earnestly suggest to the Government that the granting of this slight concession will not constitute a breach of the Ottawa, agreement, but will have the effect of preserving the weaker units in the cement industry during the ‘period of reconstruction which will be forced upon them.
– The honorable member for Wakefield (Mr. Hawker) has submitted, in support of his amendment, the argument that, if the removal of the duty on cement were delayed for six months, the industry would be provided with an opportunity to reorganize itself to meet the new situation. Several honorable members have pointed out that conditions in the cement industry vary as between one State and another; that, for instance, in Queensland conditions are different from those in New SouthWales. In some States, coal has to be hauled long distances, whereas, in others, it is comparatively near the factory.
– Did not the Tariff Board take those facts into consideration ?
– Yes, and its report is an excellent one. On its merits the report should be accepted, but if this delay of six months will allow the industry to clear its stocks and reorganize, I see no reason why the compromise should not be acceptable to the Government. If the amendment is agreed to, the duties will operate until the 1st December next, when, automatically, the recommendation of the Tariff Board will be implemented, and British imports will be admitted free. I do not think that acceptance of the amendment will involve a breach of the Ottawa agreement. As a matter of fact, the time which elapses between the receipt of Tariff Board recommendations, and the putting of those recommendations into effect, varies considerably. Sometimes a recommendation comes before Cabinet while Parliament is sitting, and is put into effect with very little delay. On other occasions, the reports come to hand during a parliamentary recess, and months elapse before action can be taken. In one or two instances the Tariff Board itself has recommended that the amended duties be deferred in order to give the industries concerned an opportunity to adjust themselves to the altered circumstances. Therefore, I see no reason why the amendment should not be accepted if the compromise is agreeable to Parliament, which, after all, is paramount. Parliament can, in fact, break agreements, though it will not do so at the instance of this Government. It is honorable members opposite who would make of Parliament a breaker of agreements. We know that varying interpretations can be placed upon the wording of the Ottawa agreement, and eminent K.C’s. have given opinions directly in conflict one with another. As the Prime Minister (Mr. Lyons) pointed out, however, the Ottawa agreement is an agreement between go vernments, and we should strive to give effect to the intention of those who entered into it. We should seek to interpret it in the letter and in the spirit. The Government retracts nothing it has said about the agreement, but is prepared to accept this compromise, and to declare that it does not transgress the agreement. The Deputy Leader of the Opposition (Mr. Forde) who made a scathing attack upon the Ottawa agreement, saying that it had operated detrimentally to Australian industry, seems to be out of touch even with large sections of opinion in the Labour movement, which approve of the Ottawa agreement, and have said so publicly. For instance, the secretary of the Tanners and Leather Dressers Union is reported in the Melbourne Herald of the 16th May, as follows: -
Commending the Ottawa agreement, the secretary of the Tanners and Leather Dressers Union, Mr. G. Dupree, said to-day that it had been of great advantage to the tanning and leather-dressing industry in Australia, as it had permitted the export of large quantities of dressed leathers, not previously exported from Australia, and also extra quantities of sole leather.
The union was. naturally, interested in the continuance of the agreement, because since its operation it had been responsible for the employment of between 400 and 500 extra workers in the industry in Australia.
It is evident that within the unions there are supporters of the agreement; men who recognize that it has conferred benefits upon the community as a whole. And this opinion is to be found, not only among employees, but also among employers. For instance, the Federated Master Tanners and Leather Manufacturers Association, at an interstate conference, carried the following resolution : -
That this conference place on record the fact that the tanning industry of Australia has received great benefits from the Ottawa agreement. It further affirms that the ideal of inter-Imperial trade should be fostered in all ways possible.
– I propose to bring this issue to a clear and definite determination, and therefore, as an amendment of the proposed amendment, I move -
That the figures “ 1936” be omitted, with a view to insert in lieu thereof the figures “ 1937 “.
The Minister for Trade and Customs (Mr. White) has, during the last ten minutes, completely abandoned every argument he advanced to the committee last March in support of the abolition of the duty on British cement. In March the case had been fully investigated, the Tariff Board had made its recommendations, there was no more to be said, no need for further inquiry, no need to give the industry time to adjust itself to the altered conditions brought about by the sudden removal of protection which it had enjoyed for twenty years, and the substitution for it of freetrade competition with the United Kingdom. Such were the arguments the Minister used to controvert statements from this side of the House. Yet to-day he abandons them as though he had never uttered them. In March he devoted much time to directing the attention of the committee to the obligations which Australia had assumed under the Ottawa agreement. He pointed out that the Government, in tabling a schedule providing for the removal of the duty on British cement, was acting on the recommendation of the Tariff Board and in compliance with the requirements of the Ottawa agreement, and that the duty could not be restored, ‘ except upon the recommendation of the board. He quoted the text of the agreement to justify the opposition of the Government to the proposal for restoring the duties, a proposal which the committee finally adopted. To-day, however, the Minister says that the Ottawa agreement will not bc violated by allowing the duty to remain in operation, provided we accept t lie board’s report, but do not put it into operation for another six months. In reply to that, I say to him, that any period of time which this committee deems desirable in which to allow the industry to reorientate itself must be allowable, and that no matter how long the period may be, no infringement of the Ottawa agreement will take place. If Parliament can, without infringing the agreement, grant a breathing space of six months, it can extend that time to any period it thinks fit. The amendment of the honorable member for Wakefield (“Mr. Hawker) is obviously a face-saving proposal. The fact that not one Minister was on the bench behind the Minister for Trade and Customs when the amendment was brought forward is evidence that the honorable member for Wakefield and the Minister for Trade and Customs entered upon this stage of the debate, each knowing precisely what the other intended to do.
– The Prime Minister and other Ministers were present, and I consulted with them.
– That consultation had taken place I do not deny. As a matter of fact, I should have preferred to use instead of the word “ consultation “ another which carries with it the suggestion of conspiracy. The Government has now agreed that the removal of the duty shall be deferred until the 1st December of this year. I have moved that it be deferred until the 1st of December of next year.
– Why not make it ten years hence?
– Because the 1st December, 1937, will witness, approximately, the termination of this Parliament, and we can then test the merits of the p’rinciple involved in this item by an appeal to those who ought to have the final decision, namely, the people of Australia. In view of the intriguing devices to which the Government has resorted in order to cover up the series of blunders it has made, the reasonable and proper course would be to allow the present duties to remain in force for the life of this Parliament. Those duties represent the policy of Parliament over a period of two decades, and the reversal of that policy was not an issue at the last election. In view of the fact that the Government is willing to accept this compromise, which will operate to the end of the present year, I ask it to allow the people of Australia to decide the issue, and to give the industry at least the right to have some degree of stability assured to it between now and the next election. When the election is over there will, at least, be a proper reflection of the wishes of the people, and of their understanding of what is involved in the general tariff policy of the Government.
The honorable member for Wakefield (Mr. Hawker) and the Minister for Trade and Customs (Mr. White”) have now acknowledged that the establishment of absolute freetrade with Great Britain probably involves difficulties of adjustment in the industry; but, having regard to the complete change of policy with which it is threatened, the period between now and next December is not long enough to give it an opportunity to adapt itself to free importations from the United Kingdom.
– There will not be free- trade.
– I say that there will. I shall not repeat the argument I have advanced, to show that exchange, having remained pegged for nearly five years, has reflected itself in the general price structure in Australia. To repeat it. would be not only a humiliation to myself, but also a reflection on the committee. The purchasers of goods in Australia have to buy at prices which have resulted from the community costs which the people have to bear.
– Cement is not sold on that basis.
Mr.CURTIN.- -The cement manufacturers do not purchase their raw materials outside Australia. They pay not in sterling, but in Australian pounds. The Minister has agreed that the industry ought to be given time to adapt itself to the change-over from a definitely protectionist policy to one of freetrade.
– It is not freetrade. There is a cover, in the event of any alteration of the exchange rate.
– The exchange is a separate item altogether.
– What about primage?
– That is a separate item, too. These things apply, no matter what the duty may be. Knowing all the facts, this committee has to decide whether the duty of 6d. per cwt. whilst the exchange rate operates at 25 per cent. shall, after the 1st December next, be wiped out, even though the exchange rate continues at 25 per cent. Therefore, to argue that the protectionist advantage to the industry, which was1s. per cwt., is not to he reduced by that amount is to make an entire mis-statement of the facts. Whatever protection exchange will give in the future, it has given for the lastfive years. The duty was1s. and this committee made it 6d. The Senate has asked that the duty be wiped out altogether. The Government has now, agreed that that would be too drastic, without allowing a reasonable time to permit the industry to adapt itself to the new conditions. I claim that, in fairness to the industry, we ought to allow the people to decide the matter.
Mr.FRANCIS (Moreton) [2.50].- I have always held, and still contend, that the tariff was never a party matter, so far as honorable members on this side of the chamber are concerned. We had, and as far as I am concerned, still have the right to vote on tariff issues in accordance with our own judgment. I have always regarded the Tariff Board as a guide in these matters, and I still accept its advice in that capacity only. I am a protectionist, and believe in adequate protection of both primary and secondary industries. There should be balanced development between the two, for, without it, this country cannot progress as we all desire it to do. A country that has no secondary industries is inferior in status to those which have them. If it were not for our secondary industries, the people of Australia would be dependent on other countries and would be merely hewers of wood and drawers of water for the people of more favoured countries. A country should be as selfcontained as possible so that it may be less vulnerable to the effects of any war which might disturb oversea markets. The primary and secondary industries are interdependent. There are at least 500,000 employees in our secondary industries receiving good wages and enjoying good working conditions, who provide a home market, which is the best market for the products of the primary industries.
I believe that what was done in this chamber when the cement duties were last under consideration was not a breach of the Ottawa agreement. I still hold that view, and it is supported by the most eminent legal authorities. For some considerable time there was no protest from Great Britain concerning the alleged breach of the Ottawa agreement ; when it was made it was inspired from Canberra. If the true interpretation of articles 10, 11, and 12 is as was contended in this chamber when the matter was last under discussion, the ratification of tariff schedules would become farcical. The recommendation of the Tariff Board regarding cement was too drastic. I considered that the duty should not be entirely removed, but the Tariff Board, I thought, was going too far, and I proposed a reduction, including exchange, amounting to 75 per cent.
The honorable member for Wakefield (Mr. Hawker) has not gone far enough in his amendment, but I am prepared to accept it, because it assures some advantage to the industry, particularly as his proposal has been accepted by the Minister for Trade and Customs (Mr. White). I am prepared to support the industry in every possible way, and we are supporting it to-day, to the extent that it is to be given the protection previously proposed up to the 30th November next. At the end of that time, there should he a full inquiry as to the conditions then obtaining in the industry. I am almost certain that this Parliament will be in session for the three months from September to November next, and, during that period, it will be possible for us to watch closely the effect of the tariff on the industry. The amendment, though not entirely what I should like to see adopted, will be reluctantly supported by me, as it will give the industry a further six and a half months in which to re-organize its trading conditions, prices, distribution arrangements, and the usual trade arrangements for concessions and remissions to its agents. T hope that the position of this industry will be readily referred to the Tariff Board, later, if necessary, in order to discover whether the manufacturers have been seriously affected by importations from abroad.
I believe that the Tariff Board, in recommending the complete removal of the protection from the industry, made a serious mistake. Originally, it estimated that English cement would be shipped to Australia on the basis of a c.i.f. price of 55s. 6d. a ton. In its second report, it reduced this figure to 51s. 6d. a ton, and, on this basis, estimated the landed duty-free cost of imported cement. I have definite information concerning cement, which is to arrive in Western Australia in a few days, and will be landed on the basis of a c.i.f. price of 39s. 6d. a ton, the freight being only 33s. a ton, which is 12s. a ton below the board’s figure. Later cables from London definitely state that cement is available for export to Brazil at 19s. a ton, f.o.b., and to competitive markets at as low as 13s. a ton, f.o.b. The f.o.b. prices are equivalent to c.i.f. prices of 32s. and 26s. respectively. Using the higher figure of 19s. a ton, f.o.b., to correct the table shown on page 6 of the Tariff Board’s supplementary report, and taking Sydney as an example, we find that the board’s estimate of a reasonable maximum selling price is £3 16s. 5d. a ton, whereas the landed duty-free cost of imported cement, .based on a c.i.f. price of 32s. a ton, is £2 5s. 9d. The board’s figure of a selling price of £3- 16s. 5d. includes its estimate of 10s. a ton for profit; it is obvious, therefore, that New South Wales manufacturers, on the new price at which cement is available to-day in London, will have to face a loss of over £1 10s. a ton. In my opinion, the position will be as embarrassing to the industry in other States as it is in New South Wales. Therefore, I am anxious as to the future of this great national industry. We have had the example of timber being imported from abroad on ships that have come here to take our wheat overseas, and I fear that cement may be brought out on these vessels, if the duty is entirely removed.
I urge the Minister to watch importations into Australia closely, and to see that at least weekly or fortnightly returns are made available to him as to importations, and as to the prices at which cement from overseas is entering Australia. It will be far too late when Australia has imported cement, possibly clouds high, to bring down dumping duties and other surcharges, and hope that the industry in this country will still be able to carry on. I urge the Tariff Board, when this industry is referred to it, as I am sure it will ultimately have to be, not to hesitate to restore to it the protection which is its due. I think that the board made a serious mistake in its report on the cement industry. It was far too academic, and its findings were based on the flimsiest of evidence. No examination was made of the position in Great Britain, although it should have been made under the terms df articles 10 and
II of the Otta”wa agreement. The board has got into the habit of reducing duties. It has been reducing them since 1934, and although I approve of reductions in ths main, I think it is time that a halt was called. I moved an amendment to the schedule when it was first before this committee, but as the principle contained in it has been accepted by the Government and the rate of duty I proposed will be continued for a further period of six and a half months, I do not propose to press my point. I believe that if the Government had accepted the amendment as passed by this committee, it would have done right, but it is not my intention to embarrass the industry. If the committee, by a majority decision, persisted in its original attitude and the matter was again sent up to the Senate, and the Senate took action of the kind which it has just taken and sent it back to this House, a final conference of both Houses would have to take place. If a conference were held between the two Houses, having regard to the votes in this committee and in the Senate as reported in Hansard, I have no doubt that a substantial majority of the two Houses would be against the amendment which this committee made. The duty would thus be entirely removed. That would leave the industry high and dry, and this must be avoided. I want to ensure that it will receive common-sense assistance. By accepting the proposal which has the endorsement of the Government, this industry will be assisted by the duty of 6d. per cwt. for a further six and a half months. Believing that if the amendment of the honorable member for Wakefield is not accepted, the industry will get no assistance, I support it, but I make a final appeal to the Tariff Board that in the future, it should pay special regard to this industry, and that generally it should recommend protection to secondary industries in conformity to the policy of this Parliament.
.- The discussion in this committee on this subject has assumed much greater importance than a mere decision on the cement issue, because it has been contended, first of all by the Minister for Trade and Customs (Mr. White), then by the British High Commissioner, and again by the Senate that the action of retaining a rate of duty in defiance of a recommendation by the Tariff Board for a lower duty is a violation of the spirit and letter of the Ottawa agreement. The question of whether it is a violation of the letter of the Ottawa agreement is one that I do not wish to go into except to say that it is impossible, by any act of this Parliament, to deprive this Parliament of the power to legislate. This Parliament cannot tie its own hands. That is the only point on which strictly legal argument seems to be important. It is only important because we have a duty to assert our constitutional power to make our own legislation, and, if necessary, to alter legislation that we have passed.
On the question of the spirit and intention of the Ottawa agreement, I have qualified myself by looking at all the treaties. Honorable members will find these in volume 25 of The Complete Statutes of England, and I have read the debates which took place in the Canadian, New Zealand and British legislatures, as well as those which took place in this Parliament. From this perusal it seems clear to me that the word “ existing “ had in contemplation the duties existing at the time of the making of the agreement, and that it was not intended that those duties should be increased without a recommendation of the Tariff Board. If honorable members study the Ottawa agreement, they will see that the word “ existing “ is used over and over again, in many cases, in obvious reference to existing duties. The scheme of the agreement is first of all to lay down a principle in article 10. Britain holds one view of that principle and Australia another. The British view is that the intention of article 10 is to give British manufacturers the same rights of competition in the domestic Australian market as the domestic Australian manufacturer ; that is to say, that the intention of article 10 is to put the British manufacturer overseas in the same position as the Australian manufacturer in Australia. In order to show the Australian view of article 10, 1 refer not to the views held by members of my own party, but to those of members of the Government party. The Minister directing negotiations for trade treaties (Sir Henry Gullett) sponsored the United Kingdom and Australia trade agreement in this House and closing his speech in moving the second reading, he said : -
This charter of rural aid could be a thousand times justified even if it provided for the curbing of other Australian interests to the advantage of primary industry. But it does not do so. It does not reduce the protective level of our Australian tariff. It does not call upon the Australian Government to reduce that level. On the contrary, although it does not reduce the protective level against British imports, it very generally increases the protective level against foreign imports. It may bc said that that is done in the interests of the British industrialist; in reality, it is done in the interests of the Australian primary producer. But in any case, the Australian manufacturer has his protective level raised over hundreds of duties against the foreign manufacturer whose competition is more to be feared than that of Britain, because of lower foreign costs.
That was obviously the view of the Government at that time. The obligations on the Government were made clear in a statement issued to the press by Sir John Latham, then Attorney-General, but now Chief Justice of the High Court, which was the next day quoted in the House of Commons. On page 7 of the Argus of the 1.7th October, 1932, the following statement made by Sir John Latham, is to be found : -
First, the Ministry was not bound to accept every report of the board independently of its own views and those of Parliament.
He had previously made it clear that Parliament had the power to reject the recommendations of the Tariff Board, but he went on to say that the Ministry could also reject them. He proceeded -
Secondly, in view of the high rates at present existing, this provision ought not to frighten any one.
This clearly indicates that his reading of the word “ existing “ was that it applied, to duties then in existence.
I do not believe in a closed-Empire policy, but I do believe that while the Ottawa agreement exists, it should be honoured in the spirit. It is a great fault of that agreement that it does not provide any means for deciding disputed points. It is objectionable to have repeated in this Parliament the statement that, without hearing our own views, the British manufacturers and the
British Government have decided that we are departing from the spirit of the Ottawa agreement.
– Article 16 makes provision for the settlement of disputed points.
– It provides for variation of the agreement, but not for interpretation. In order to be able to vary any provision, the parties must first of all ascertain what it means. It must be clear that an agreement cannot be varied until its meaning is settled. I have given what is the British view of article 10, and what I take to be the Australian view, as expressed by the Minister negotiating trade treaties and the former AttorneyGeneral, Sir John Latham.’ The Minister for Trade and Customs (Mr. White) made a very grave mistake in originating the suggestion that we were departing from the spirit and letter of the Ottawa agreement. We have not departed from the letter of the Ottawa agreement nor from its spirit as that was interpreted by the Minister negotiating trade treaties and the former Attorney-General. It is to be deprecated that, statements were made in this committee without prior consultation with the British Government or the British High Commissioner. If the Minister had been able to give to this House beforehand an assurance that the matter had been already considered in Britain, and that the British view was that, unless the duties were reduced, the spirit and letter of the Ottawa agreement would be violated, the committee would have given due weight to his assurance. But the Minister, hard put to it to have the Government’s proposal carried, threw the sword of Brennus on the scales, claiming that if the Tariff Board’s recommendation were not accepted, the Ottawa agreement would be violated.
– Does not the British Government confirm that? Are the opinions of the British Government of no value?
– As they express only the British point of. view they are not so valuable to this House ‘as are the opinions of those two colleagues’ of the Minister whom I have quoted, and who, in this House, sponsored the United Kingdom and Australia Trade agreement.
– It all depends on how their remarks are interpreted. The honorable member interprets what was said to his own ends.
– I have given the ipissima verba of the present Chief Justice, who said that neither Parliament nor the Ministry was bound to accept the Tariff Board’s report.
– Those remarks, if the honorable member understood his subject, referred, as I have already explained, to foreign rates of duty.
– No. The contrary is quite clear. The Minister is only making things worse for himself. The opinion of Sir John Latham was quoted in the House of Commons, the day after it appeared in the Australian press. On the 18th October, 1932, Sir Herbert Samuels said -
As for the independence of the Tariff Boards, I noticed that the Chancellor of the Exchequer corrected himself when speaking. He was about to say that the decision on these duties rested with the impartial Tariff Boards. He caught up his own words and corrected the word “decision “ to “investigation”. Two or three days ago, in the Australian Parliament, Mr. Latham, the Attorney-General, defending the Ottawa agreement, said: -
The Ottawa agreement did not propose to go nearlyas far in restricting possible future action. The Ministry was not bound to accept the Tariff Board’s every report, irrespective of its own views and those of Parliament.
– That is what we have always contended. It has relation to the British rates.
– The Minister is retiring from his position. The existing duties could not be increased against the British manufacturer until after a report by the Tariff Board. But, as Sir John Latham said, and the Minister directing negotiations for trade treaties implied, Parliament is not bound to adopt the report of the Tariff Board, nor is the Minister bound to put it to Parliament. I think we all agree that it is just as undesirable to mention in this Parliament the nameof the British Parliament, as it is to mention the King, with a view to influencing opinion. We are capable of standing up to our obligations without being told that if we do not do this or that we shall be breaking a treaty into which we have entered. We should be insolent were we to inform the British Parliament that any action which it proposed was, in our opinion, a violation of the spirit of the agreement. Such interference ought not to be tolerated.
– I may say at the outset that I am absolutely opposed to both the amendment of the Leader of the Opposition (Mr. Curtin), and that of the honorable member for Wakefield (Mr. Hawker). I feel that the Government to-day occupies a very definite position from which it cannot very well retire. I understand that, after the tariff schedule had been passed by this branch of the legislature, the Prime Minister (Mr. Lyons) stated quite definitely, and without equivocation, that the Government proposed to stand by the duties recommended by the Tariff Board. So far, I have not heard the Minister say that the Government has evidence which would justify its acceptance of even the proposal that the present rates of duty shall operate until the 30th November next. I realize that much will be said in regard to that sacred or accursed word compromise “, and that the picture will be coloured according to the views held by honorable members at the moment. But I am not prepared to take part in the game of musical chairs, in which some honorable members appear to have indulged this afternoon. In cases of this kind, a government has to make up its mind. If it has not the necessary support to secure the acceptance of its proposals, it must compromise. But it might not be wise to compromise in certain circumstances. I feel that, if any justification existed for the extension of the period of protection, the Tariff Board would have made that recommendation in one of the reports which it has submitted to this Parliament.
– The honorable member is assuming that the Tariff Board is always right.
– I am not making that suggestion. The Tariff Board must have considered the matter of cement duties in -the light of the Ottawa agreement; otherwise, it failed to do its duty. When the matter was referred back a second time, the board reported still more drastically in favour of the abolition of the duty on cement from the United Kingdom.
Quite a lot has been said about legal opinions which have been given on the one side and on the other. In a case of this sort we should do better if we got away from the law, and arrived at a commensense interpretation of the Ottawa agreement.
– What is the value of a commonsense interpretation if it does not agree with the wording?
– The wording of the agreement is fairly definite. Article 12 makes the following provision : -
His Majesty’s Government in the Commonwealth of Australia undertake that no new protective duty shall be imposed and no existing duty shall toe increased on United Kingdom goods to an amount in excess of the recommendation of the tariff tribunal.
The tariff tribunal, having made two inquiries, has decided that no duty is necessary. Yet the Government, this afternoon, is accepting the position that it is now necessary to retain the duty until the 30th November next. I feel that honorable members may have to act in a way which they do not altogether relish. It is only after very mature consideration that I have decided upon the stand that I shall take. I am still of the opinion which I held about two months ago. No new evidence has been produced to justify the committee in departing from the decision then made by the Government, and since definitely affirmed as Government policy after a defeat had been sustained in this chamber.
– The Government holds that view, but could not secure its acceptance.
– Then why not accept defeat and let this chamber bear the consequences?
– That is the last thing which the honorable member wants. He has no desire to go to the country.
– There would be no need to go to the country. I believe that, if the matter were tested, the Government would emerge victorious.
– I offer no apology for the stand that I take in regard to either this or any other protective duty which might be considered necessary for the development of the secondary industries of this country.
– That means that the honorable member is not open to argument.
– The honorable member has not been able to advance arguments which would induce me to alter the opinion that I hold as to the necessity for the protection of Australian industries and Australian workers who are purchasers, of our secondary products.
The honorable member who has justresumed his seat (Mr. Archie Cameron) appeared to claim- that Australia may owe some duty to Great Britain by reason of either article 10 or article 12 of the Ottawa agreement. As a layman, I. am satisfied that there is nothing in that agreement which prevents us from discharging our functions as representatives of the people of Australia, and in this instance leading King’s Counsel have given reasons to support this contention. But even if there were, I should still demand the right to vote according to the dictates of my conscience. When the agreement was before this Parliament, I opposed the proposed concessions to Great Britain and recorded a vote against them, because of the provisions of articles 10 and 12. I would not give to a tariff tribunal the right which I claim that I possess to protect Australian industries against a collection of freetraders, or whoever may occupy a seat on the Tariff Board. The very first act of that body, under the protection ‘afforded to it by the Ottawa agreement, was to abolish a new and great Australian industry. What it did, led to the cessation of the manufacture of large Diesel engines in my. electorate. Not one large Diesel engine has since been constructed in Australia. Yet the smaller Diesel engine of up to ‘ 100 horse power has a protection of 40 or 50 per cent., and its construction is proceeding satisfactorily. This indicates what can be done by the Tariff Board to upset Australian industries if it is not hampered in any way. ‘
On this occasion we have to answer the arguments of the board, which have been enlarged upon by honorable members, in regard to tremendous profits having been made by the cement industry in Australia. A study of the history of the operations of this industry during the whole of its existence will show that the average profit has been only about 4 per cent. The critics of the industry consider only the favorable years succeeding the depression period, in .which, ‘owing to the boom in building activities, the industry returned wonderful figures. It needed thiem to offset the hard times through which it had previously passed. I agree that honorable members are not without argument in regard to profits; but they are’ supported and strengthened by the strong desire to decry anything that is already produced, or is likely to be produced, in Australia by Australian workmen. There are some who would decry an industry on the ground that it is not economic; that it cannot produce a commodity of the required standard and in sufficient quantity to meet the requirements of this country. Yet we have here an industry which has been worked profitably, is economically established, and has produced a product of a class which is a credit to Australian manufacture. Great Britain never intended that any concession given by Australia should have the ‘ effect of wiping out any of our secondary industries. I feel sure that the British Government does not expect us even to threaten to jeopardize the prospects of one industry by an alteration of the tariff at the dictation of the Tariff Board. Unfortunately, the strongest support of a Tariff Board report of this nature comes from those who would wipe out all our manufacturing industries and, were it possible to do so, live solely by the export of wool.
If any honorable member has altered his opinion in this matter, I regret it. I do not intend to alter mine. I am sorry that the Leader of the Opposition (Mr. Curtin), in his wisdom, considered that it was necessary to move an amendment for the continuance of the duty until December, 1937. I believe that, if a vote, is taken to-day, there is the possibility of the duty of 6d. being retained. It would have more support than will be given to the proposal of the Leader of the Opposition. The adoption of the honorable gentleman’s amendment would weaken the position of the cement industry in Australia. I am favorable to the imposition of the duties agreed to by this committee some little time ago, and I do not know that I am prepared to support the amendment of the Leader of the Opposition (Mr. Curtin). .In my opinion, if is essential to continue the duty of 6d. at least until the whole subject has been again reviewed by the Tariff Board. Therefore, I shall stand by the recent decision of this committee on the subject.
– I agree with the view of the honorable member for Bourke (Mr. Blackburn), that it is” undesirable to use the names of the King or of the British Parliament in this chamber .to influence the votes of honorable members on the questions that come up for decision. Further, it is wholly unnecessary, in my opinion, to devote so much attention to the provisions of the Ottawa agreement, for the simple reason that the case submitted to the Government by the Tariff Board rests wholly on the contention that certain cement manufacturing companies in Australia have been making excess profits. It is significant that no honorable member of the Opposition has so far denied that declaration of the board, although it was referred to again by. the Minister for Trade and Customs (Mr. White) this afternoon, who pointed out clearly that, according to the board’s report, excessive profits to the amount of £400,000 were made in this industry during the last year for which records were obtainable. The amendment of the Leader of the Opposition (Mr. Curtin) seeks to place the Labour party’s hallmark of approval upon these monopolistic and profiteering concerns which are exploiting the public of Australia. In effect, it proposes that towards the end of next year, when, presumably, a general election will be held, the public shall be called upon to decide whether profiteering in the cement industry shall be allowed to continue beyond 1937. The proposal of the honorable member for Wakefield (Mr..
Hawker) is that towards the end of next year the people shall be asked to give their approval to the curtailment of the profiteering in the cement industry effected by this Government during 1936. In those two sentences, I have placed in a. nutshell the issues which face us. In my opinion, it is incumbent on Parliament to take such constitutional steps as it can to permit our cement manufacturing industry to be maintained on a fair basis and enjoy such profits as are compatible with fair dealing while maintaining the maximum amount of employment.
Section 15 of the Tariff Board Act makes it incumbent upon the Government to refer certain matters to the board for inquiry. The section reads -
The Ministershall refer to the board for inquiry and report the following matters: -
Among these are -
Any complaint that a manufacturer is taking undue advantage of the protection afforded him by the tariff, and in particular in regard to his -
-Did not the honorable member vote against the Government whenthis subject was previously under discussion ?
-I did, but I have since had time to reflect on the matter. I voted for the higher duty at that time with considerable misgiving. I harboured certain doubts, the benefit of which I was prepared at that time to give to the cement manufacturing industry. But I am no longer in that position. I have cited that section of the Tariff Board Act to indicate that there is an obligation upon the Government to cause inquiry to be made by the board into any suggestion that undue profits are being made in an industry.
Mr.White. - The Labour Government did not take action under that section when it was in office.
– I propose now to show that the Scullin Government endorsed that section of the act. My authority for that statement is no other than the right honorable member for Yarra (Mr. Scullin). Speaking in this House on the 17th June, 1930, when he was Prime Minister, the right honorable gentleman said, according to the report which appears on page 2751 of volume 124 of Hansard -
What the Government has to guard against is that manufacturers are not taking undue advantage of the protection afforded by the tariff by charging unnecessarily high prices, acting in restraint of trade to the detriment of the public, or acting in a manner which results in unnecessarily high prices being: charged to the consumer for his goods. Under paragraph (h), of sub-section . 1, of section15. of the Tariff Board Act these questions can beinvestigated by the Tariff Board and if it is found that an Australian industry is takingundue advantage of the tariff in any of themanners set forth, the Government can then consider what action can be taken against theparticular industry. With the limited powers the Commonwealth has in regard to internal trading it would appear that the onlymanner whereby salutary action could be taken against the offenders would be by the removal of the protection afforded by the tariff. As a preliminary to aninquirey by the Tariff Board. the Government proposes to depute an accountant of the Customs Department to investigate the methods of trading adopted by certain industries.
That citation is a complete vindication of the report of the Tariff Board on the cement manufacturing industry. This Government is not proposing to reduce the protection enjoyed by this industry any more than is sufficient to curtail the excess profits that it has been making, and I reiterate that the charge that excess profits are being made has not been challenged by the Opposition. The action of the Government will not prejudice the industry in any way, or impair the opportunities for employment in it. All that will follow this action will be a curtailment of excess profits. Undoubtedly, this action should have the effect of stimulating the demand for cement, and increasing its use in our building and constructional industries. This, in turn, will make more employment available in these industries and also in the cement manufacturing industry itself. I point out also, that as the Minister for Trade and Customs (Mr. White) has given an assurance that dumping duties will be applied if any attempt is made by overseas cement manufacturers to exploit the Australian market, the welfare of the local manufacturers will be amply protected.
I am therefore now firmly of the opinion that the action of the Government will not injure the cement manufacturing industry or those engaged in it. For that reason I propose to support the Government.
.- The speech of the honorable member for Macquarie (Mr. John Lawson) has served at least one useful purpose in that it has made an effective reply to the allegation in the early part of the speech of the Minister for Trade and Customs (Mr. White) that the Scullin Government, of which I had the honour to be a member, had paid no regard whatever to commodity prices in Australia. The honorable member for Macquarie, in looping the loop this afternoon, has given a complete and satisfactory answer to that charge of the Minister.
– Butthe Scullin Government took no action.
– What the honorable member for Macquarie said has completely vindicated the Scullin Government, which, as everybody knows, was a Protectionist administration in the real sense of the word, and had of necessity to, adopt drastic measures to restore our trade balance by imposing duties, which, in some cases, were of a prohibitive nature. But in doing so, it declared publicly in no uncertain terms, that monopolistic exploitation of the workers of Australia by means of the tariff would not in any circumstances be permitted. The power of the law was invoked to the fullest possible extent at that time to protect the general community from exploitation. A good deal has been said in the course of this debate, especially by the Minister for Trade and Customs, about the Tariff Board. The Minister would have us believe that the attitude of certain honorable gentlemen opposite in March last, when they fell away from their allegiance to the Government on this subject, was tantamount to disloyalty to that solemn pact known as the Ottawa agreement. But to-day the position is somewhat different; the Tariff Board has been placed in the background; it has, as it were, been given a back seat, and Ottawa has been observed, according to him - in part; it is being observed, to the extent to which the curate’s egg was alleged to be good, in parts. We are to maintain its spirit, after the expiration of a period of six months, not too soon, and in moderation. Just as was said of a member of Parliament in the long ago, that he was moderately moral, the Minister now insists that, after the expiration of six months, we are to begin to be moderately loyal to the Ottawa agreement, and respect its provisions. When this matter was last before the committee, I contributed nothing at all to the babel of tongues advocating, for the moss part, the best method of holding up the bloated figureof capitalism on its tottering legs. Although I was interested in the excessive price of cement, I was not particularly interested in the corporate monopoly which sells cement at a price which, according to such evidence as we have had, is excessively high. Every taxpayer - and I am one to a very small extent, but larger than I would wish - and certainly every ratepayer, contributes to this levy, which is made by virtue of what appears to be the excessive price charged for cement,that goes to make up, as the Minister seems satisfied is the case, the inordinate profits of the cement companies. I am not concerned to deny that profits may be excessive. I am not here to allege that cement prices may not be too high. The Labour party, as I have already said, does not approve of excessive profits, and does not approve of excessively high prices. That party, in the past, has taken definite action, of which the Minister is well aware but which he is so reluctant to acknowledge, against those evils. That is one side of the question. I think the other side is sufficiently expressed in the old saying, perhaps not altogether parliamentary, “ Better the devil we know than the devil we don’t know “. In any case, arbitrary and, at least, partially effective methods have to be put into operation to maintain, as far as possible, reasonable standards of living, and also, and by no means of minor importance, methods have to be devised to give encouragement to Australian industries. I do not propose to argue the case, either from the point of view of the principle of protection, which I thought was sufficiently well established in this country, or, on the- other hand, from the point of view that profits are, or may be in particular cases, excessive, and prices too high. I have only one or two words to say from the point of view as to whether the affairs of Australia, vis-a-vis other nations of the world, and including Great Britain in the present case in respect of the Ottawa agreement, are to be taken out of our control, and placed in other ex-Australian hands. It appears, as I understand it, that cement was admitted free when this schedule was presented “recently by the Minister, and this question was first argued. I understand that the Government, in proposing to make the duty on British cement free, acted on the report of the Tariff Board. Its loyalty at that time to the Tariff Board, loyalty which, as we have seen since, has been qualified, was apparently unquestioned. It was at this Stage that the honorable member for Moreton (Mr. Francis), in a burst of patriotism, sought to effect a compromise between duty-free and ls. per cwt., and proposed a duty of 6d. per cwt. But I suggest that the honorable gentleman not. only proved himself disloyal to his Government, and disloyal to the Ottawa agreement, but was also disloyal to himself and other honorable members opposite, who recorded votes with members on- this side of the chamber. The point I wish to make is that he and others who voted against the Government were disloyal to their pledge to support the Ottawa agreement. The Labour party, of course, is in no such case. When these honorable gentlemen opposite voted for the Ottawa agreement, which, it is said, destroyed the independence of the Australian Parliament to deal with this vital Australian matter, they sowed the wind, and they can hardly complain now if they reap the whirlwind and have to soothe their consciences by squaring off with the Government by means of a compromise. Honorable members who voted themselves into this difficulty are now endeavouring to vote themselves out of it. The honorable member for Macquarie, by looping the loop, the honorable member for Moreton, ‘by retraction and apology, and other honorable members in different ways all supported the Ottawa agreement, which the
Labour party most vigorously opposed. The honorable member for Moreton had with him the . honorable members for Barton, Macquarie, Eden-Monaro, Boothby
– The honorable member has exhausted his time.
.- I intend to support the amendment moved by the honorable member for Wakefield (Mr. Hawker). It has been said that I am a freetrader; to accuse any one of that, is nearly as bad as accusing him of being, a heretic.
– It is worse.
– It is, at any rate, politically worse. . There is no place for thefreetrader in Australia to-day. With respect to the cement industry, if I were taking up the position of a freetrader, I. should be solidly behind the original proposal of the Government, providing for the entry into Australia of British cement free of duty. In that case, I would have been joining my friends from the Country party in opposing the restoration of the duty. But I want to see that the cement industry, like every other Australian industry, receives fair protection, and I am ‘not satisfied that a complete removal of the duty on cement is yet justified in Australia. One factor which has influenced me in regard to this matter is the price at which cement .is sold in Australia. According to the figures quoted by the Minister for Trade and Customs (Mr. White) the lowest price of Australian cement at the factory to-day is 75 per cent, higher, and the highest Australian price 120 per cent, higher, than the domestic price of cement in Great Britain. This seems to prove conclusively that the public of Australia is being called upon to pay too dearly for its cement requirements. I believe in protection; but protection should be afforded only to efficient industries. The makers of cement, like people engaged in other industries in Australia, must realize that, if this country is to accomplish what we hope for it, its industries must be operated efficiently. Recently we had in this chamber a discussion on speeding-up methods adopted in a certain Australian industry. I think it would be a good thing if a little more speeding-up were indulged in in the cement industry, so that people would not have to pay for cement, as they do at present, more than double the price charged for that commodity in Great Britain. After all, it is only a matter of treating and blending the elements of the earth, and if we cannot carry out that operation in Australia at. a reasonable cost, it is a sorry reflexion on our capacity to carry on an industry.
I dp not make any apology for accepting this compromise. The person who refuses, on principle, ever to compromise must sometimes be placed in a foolish position. This Parliament itself represents a compromise of the opinions of the people, and a great deal of the legislation which emanates from it represents a compromise of the opinions of the members of this Parliament. I am convinced that, in the circumstances, the Government has come to a wise decision in agreeing to accept a compromise designed to continue a degree of protection for this industry for six months, so that it may adjust itself to the new conditions. There is ah implied condition attached to the acceptance of this compromise, however, and it is that, during the . ensuing six months,- close -inquiries shall be made by representatives of the Tariff Board to see what is the effect upon the. Australian industry of admitting British cement at a duty of 10s. a ton. If it turn’s put that the reduction of duty results’ iri .the .admission of a very considerable quantity, of cement from overseas, so that, the Australian industry is endangered^ Parliament should reconsider the matter towards the end of the year.
The Ottawa agreement has been obtruded into ‘’ this discussion again. When the subject was before the committee on the last occasion, I expressed the opinion that the Ottawa agreement should not have been brought in at all. It was introduced as a last resource by the Government for the purpose of scaring its supporters into,. .accepting its proposal. It is quite obvious to any one who reads the relevant articles of the agreement with commonsense, and without any special skill, that the action of the Parliament in reducing the British duty from 20s.. to 10s. instead of making the item British, free was not a breach of the agreement.
– How does the honorable member explain the intervention of Great Britain?
– I can explain it very simply. The Commonwealth Government first suggested that a breach had been committed, and the suggestion was easily taken up. It is easy to invite a protest when the Government itself has made the admission that a breach is being committed. I do not think that the British Government would ever have protested if the suggestion had not come from the Commonwealth Government. As a general principle, this Parliament cannot surrender its rights to the Tariff Board”, any more than it can surrender its rights to any outside corporation. Parliament must always keep to itself the power to make the final decision, but it is, at the same time, bound by any agreement into which it enters. In Great Britain the other day a Minister of the Grown pointed out that the British Government had, in regard to meat, surrendered the rights of Parliament to the extent to which it had contracted’- in the Ottawa agreement to admit’ certain quotas of meat from the dominions. In the same way, this Parliament has surrendered its right to impose import duties, to the extent that it has undertaken in the Ottawa agreement not .- to increase a duty except upon the recommendation of the Tariff Board.
– I was struck by the candour of the statement made by the honorable member for Macquarie (Mr. John Lawson). The only feature of his statement that I did not like was his complete change of attitude. He practically challenged honorable members on this side of the House to agree or disagree with his contention that the Opposition stands for monopoly, high prices and illegitimate profits. I agree that the companies controlling the cement industry are making, at the moment, exorbitantprofits. I think that they constitute, to all intents and purposes, a monopoly. I will go further even than did the honorable member for Macquarie, and say that they are sweating their employees. The making of cement is a dangerous and unhealthy occupation, besides being .an. arduous one, and the employees do not get anything like the return to which they are entitled, having regard to the risks they take. This should be one of the first industries in which the working week should be reduced, but the employers have taken no step in that direction. I would insist upon an industry such as this one being the first to adopt the 40-hour week. Nevertheless, while I have nothing very good to say of the companies engaged in the industry, I disagree with the proposal of the Government to burn down the whole house in order to roast the pig. Someother way should be found to achieve the object in view.
– How would the honorable member do it?
– I remind the Minister that, only a few months ago, the Government relieved these companies and others of certain obligations under the income tax law.
– We removed those obligations from individuals also.
– I would not risk the destruction of this industry, and the employment of the men engaged in it, by removing protection in order to punish the employers. I would try to get back some of their excess profits by the imposition of a scientifically graded excess profits tax. Then, if the manufacturers continued to make excess profits, the public would get them back in the form of revenue; but I believe that, rather than make profits in order to hand them over to the Treasury, the companies would reduce the prices of their products.
I am a protectionist, and always have been one, but I often find myself in an invidious position, becauseI have to vote for the protection of an industry run by persons who are not worth protecting, having regard to the manner in which they treat their employees and exploit the public. I must, however, accept the lesser of two evils in the hope that some government, some day, may handle the situation in a more satisfactory manner. No doubt the honorable member for Darling Downs (Sir Littleton Groom) would suggest that the Commonwealth lacks constitutional power to impose an excess profits tax of the kind I suggest, but if we have not that power we should take steps to obtain it. I can see no logic in the attitude of men who claim that they are protectionists, and, at the same time, support action which must have the effect of injuring Australian industry. I am opposed to monopolies, and the exploitation of the public, but 1 cannot see any sense in the action which the Government proposes.
– Then the honorable member would do nothing?
– The Minister and his colleagues prefer this form of attack on monopolies to the imposition of an excess profit tax, because such a tax would be so sweeping in its incidence that it would affect not only the Government’s close friends, but also those in whom it has no particular interest. Some manufacturers, the raw material of whose productis cement, are making profits quite as large as those of the cement companies, but no action is being taken against them. Rather than attack all the profiteers by increasing the company tax, or by making more steep the range of income tax which would hit friends and foes alike, the Government brings in a proposal for removing the protection on an important Australian industry, thus endangering the employment of thousands of workers.
– I desire to explain my position in regard to this item. Honorable members will recall the attitude I took up when the matter was first introduced, and I find no reason to retract anything I said on that occasion. I am very much concerned regarding the future of Australia’s secondary industries, and although I have, from time to time, read with interest the reports of the Tariff Board, I cannot agree that we should accept all the reports and recommendations of the board without comment or criticism. We in this Parliament are the representatives of the people, and we should preserve the right of Parliament to have the last word. The question of the interpretation of the Ottawa agreement does not arise in relation to the issue now before the committee. The British duty was first1s. per cwt. The Government thought thai cement should be allowed in free from Great Britain, but I considered that the rate should be1s. per cwt. When I saw that it was not possible to obtain parliamentary approval of that rate, I votedfor the reduction to 6d. per cwt. I am confident that that action was not contrary to the spirit of the Ottawa agreement, because I merely supported a reduction of the duty. The cement industry should be encouraged because all its raw materials are available in this country. 1 agree with the suggestion that investigation should be made from time to time into the prices which the public are charged, and that we should have effective legislation to see that the community is not exploited. I am not prepared to smash the local industry by allowing cement to be imported from abroad duty free. If commercial interests in Great Britain had a free market in Australia, they may, after smashing the Australian, industry, exploit our own people. Therefore, in the interests of the community generally, we should protect the local industry. There are rumours of war, and this fact furnishes another reason why nothing should be done to curtail the manufacture of cement in Australia. We cannot depend entirely upon the production of wheat and wool. We must encourage secondary, as well as primary industries, on which a large section of the population depends for its livelihood. I understand, from the spirit of the amendment, that six months hence the position of the industry will be further reviewed by the Tariff Board.
– No. The Minister said that cement will automatically be admitted free, after the 1st December next.
– I am now appealing to the Minister to say that the matter will be referred again to the board six months hence. As there is no hope of inducing the Senate to agree to a twelve months’ period, I propose to support the amendment.
.- Seldom in the history of Australia has there been such a volte face as that indulged in by the Government on this occasion. Until about an hour ago, honorable members had been given to understand that the Government was prepared to treat this matter as a vital issue. Questions about it were asked in this chamber some time ago, and replies were given, but there was no suggestion of a compromise. To-day, when I asked whether the bluff of the Government had been called, no answer was vouchsafed; the reply is now forthcoming in the amendment submitted by the honorable member for Wakefield (Mr. Hawker). This proves beyond doubt that the Government was merely bluffing when it said that it would stand or fall by the decision on this issue, because it has now reached a compromise regarding it. Unfortunately, as happens in all compromises, neither the Government nor the protagonists of the cement industry among honorable members opposite have achieved a victory. The industry gets only another six months in which it can hope to carry on successfully. The Ministry has departed from the high traditions of parliamentary government. It has always been understood that when a Ministry definitely announces its intention to regard a certain matter as vital,. however unimportant, relatively, it may be, it should stand or fall upon the result of its attitude. When the right honorable member for Yarra (Mr. Scullin) was Prime Minister, he announced that he proposed to (treat a certain issue as vital, and he did so. A similar position arose some years ago, when the Bruce-Page Government was in office, and when an amendment submitted by the right honorable member for North Sydney (Mr. Hughes) was treated as a vital one. In both instance? the issues raised were relatively unimportant.
The present Government prated for some weeks that it would regard the cement duties as vital, and, if necessary, let the people decide the matter. When we met to-day, the Minister for Trade and Customs (Mr. White), who was in charge of the committee, spoke as though his attitude was exactly the same as when this matter was previously before us, although I noticed that he did not again refer to the Ottawa agreement. This affords merely another illustration of the Government’s sudden change of front. We were told, a few weeks ago, that the Minister would take a definite stand with regard to the cement duties, because the spirit of the Ottawa agreement must be observed. A cursory glance at the agreement, however, shows that it has no application to the question under consideration. Article 12 speaks for itself, although the opinions of four leading King’s Counsel in regard to it have been quoted. Under that article, the Government undertakes that no new protective duties shall be proposed, and no existing duties shall be increased on United Kingdom goods, “ to an amount in excess of the recommendation of the tariff tribunal”. The existing duty on cement was1s. a cwt., or £1 a ton, when the Ottawa agreement came into operation in 1932 and there has never been a suggestion by the Tariff Board that that amount should be increased. Therefore, any member of this chamber who understands the King’s English knows that the article simply provides that no duty may be increased above that in operation in 1932. Referring to cement, the Minister for Defence (Mr. Parkhill) said -
As the revenues of the country are not affected to any extent, honorable members are free, on this item, as, indeed, on all other items, to vote as they think fit.
The Minister was the last member of the Government who spoke in support of its proposal, and his speech may be read on page 637 of Hansard, of the 27th March last.
– He was then leading the House.
– Yes. Therefore, he had greater political responsibility at the time than that of the Minister in charge of the bill. He explained that he desired to give the reasons why he proposed to vote in support of the recommendation of the Tariff Board, and he endeavoured to make us believe that honorable members on the ministerial side had full liberty to vote in regard to cement, and on all other issues, as they thought fit; yet, shortly before that, the Minister for Trade and Customs had informed us that the fate of the Ottawa agreement was at stake.
– That does not amount to a denial of the contention that any honorable member could vote as he chose. He could still be warned as to the clanger of breaking the Ottawa agreement.
– Of course, any honorable member is free to vote as he likes on any issue whatever. What we all understood the Minister to mean was that, as far as the parties supporting the Government were concerned, honorable members opposite would not be expected to vote in accordance with party decisions on this matter.
The CHAIRMAN (Mr. Prowse).It is time the honorable member discussed the amendment.
– I am supporting the amendment moved by the Leader of the Opposition. In fairness to the British Government it must be admitted that in the past, it has been loth to interfere in Australian politics. It seems more than obvious, therefore, that the newspapers were correct when they stated that the Prime Minister (Mr. Lyons) cabled to the Attorney-General (Mr. Menzies) and the Deputy Prime Minister (Dr. Earle Page) in London, and that, as the result, the request by the British Government was made. I do not believe that that request was linsolicited ; it is obvious that itwas solicited by members of the Commonwealth Ministry in order to bolster up their arguments.
There is only one thing more surprising than the change of front by the Government, and that is the change of front on the part of the honorable member for Moreton (Mr. Francis) and some other honorable members on the Government side of the committee. If they are sincere in their desire to assist the cement industry, nothing prevents them from voting for the amendment moved by the Leader of the Opposition, because it will be the first amendment put to the committee. Its purpose is to extend the period of operation of the present duty for eighteen months - that is, until the end of the present Parliament. If that were done, the people of Australia would be able to vote for or against the attitude of the Government on this matter. If the Leader of the Opposition’s amendment were defeated, honorable members would then be able to vote on the amendment moved by the honorable member for Wakefield (Mr. Hawker), the purpose of which is to extend the period for the operation of the duty until the 31st December next. That is the reply to the honorable member for Moreton and his colleagues, who are so ready to snatch at a straw to obtain an excuse for supporting the Government.
In searching for an excuse for his change of front, the honorable member for Moreton made some references to the constitutional position which show that he does not know what he is talking aboutDealing with the position which would result if this House “ stood pat “, he said that there would be a meeting of both Houses of Parliament. That could not take place until after a double dissolution.
– I spoke with the authority of a former Speaker (Mr. Makin) who is a member of the honor.able gentleman’s party.
– But I am speaking with the authority of the Constitution. The constitutional position is that there i.« only one occasion on which a joint meeting of both House3 of Parliament en n occur. Section 57 of the Constitution is very definite on this point. It states : -
If the House of Representatives passes any proposed law, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, and if after an interval of three months, the House of Representatives, in the same or the next session, again passes the proposed law with or without any amendments which have been made, suggested or agreed to by the Senate, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, the GovernorGeneral may dissolve the Senate and the House of Representatives simultaneously. But such dissolution shall not take place within six months before the date of the expiry of the House of Representatives by effluxion of time.
If after such dissolution the House of Representatives again passes the proposed law, with or without any amendments, which have been made, suggested,, or agreed to by the Senate, and the Senate rejects or fails to pass it. or passes it with amendments to which the House of Representatives will not agree, the Governor-General may convene a joint sitting nf the members of the Senate and the House of Representatives.
– An industry would be in trouble if it had to wait all that time.
– No doubt. But what I have stated shows that the point of view taken by the honorable member is erroneous. Section 57 states-
The members present at the joint sitting may deliberate and shall vote together upon the proposed law as last proposed by the House of Representatives, and upon amendments, if any, which have been made therein hy one House and not agreed to by the other, and any such amendments which are affirmed by an absolute majority of the total number of the members of the Senate and the House of Representatives shall be taken to have been carried, and if the proposed law, with the amendments, if any, so carried is affirmed by an absolute majority of the total number of the members of the Senate and House of Representatives, it .shall be taken to have been duly passed by both Houses of the Parliament, and shall be presented to the GovernorGeneral for the Queen’s assent.
– Order ! The honorable member has exhausted his time.
– It would appear from the debate this afternoon that a certain amount of unity has been reached on the Government side of the committee, and this, no doubt, will be looked upon as something very good politically, but it will not add to the prestige, either of the Government, or of those people, who, a few short weeks ago, voted in this chamber for an increase of the duty on cement. My attitude has not changed. I am aware that on certain occasions a compromise is necessary, but this is an occasion on which there should be no compromise. When this matter was before the committee previously, the pros and cons of the case were put forward on both sides, and, by an overwhelming majority, it- was decided that the duty on cement was to be placed at 6d., and was to remain at that rate until otherwise recommended by the Tariff Board. Whilst we give the Tariff Board credit for going into these matters very carefully, I must state that it is my opinion that the two inquiries by the board were rushed. Fancy the Tariff Board reporting on an industry when its members admit that they have never inspected a cement works ! The board mentioned also, in its report, that the cement industry is over-capitalized. That may be true, but there is hardly an industry which is not over-capitalized. The farming industry is over-capitalized, for example. If the cement industry in Australia is over-capitalized, it is overcapitalized in Great Britain to an extent ten times as great, and it . is even more over-capitalized in the United States of America. In the United States of America’ the cement industry is so large that it could supply the requirements of the whole world ; it is definitely over-capitalized; yet there is no talk about dosing it down.
– And it pays big dividends.
– Yes. Some honorable members have referred to dividends paid by cement companies as a whole, as being outrageous. The fact that some Australian cement companies are able to pay a dividend of 10 per cent, has been ridiculed by some honorable members. I venture the opinion that people would not invest in any industry if they were not assured of receiving dividends of about 10 per cent. The reduction of the duty would not only cause grave damage to the cement industry, but would also damage other industries, because it would prevent investment of money. People will not invest in an industry if they fear that, as soon as it has become a paying proposition, the props will be swept from under it by the Government. A further claim which the cement industry has for adequate protection is that it is not a city industry. Most of the industries which we protect are situated in closely populated areas, but the cement industry has grown up in rural districts. In New South Wales, there is the little town of Kandos. When I visited it a few years ago, I saw only a couple of tents. The cement industry was founded there, aiia the town has flourished, and further, the properties in the district have increased greatly in value. The same story can be told about the growth of Portland and Berrima. Some honorable members have said that cement manufactured in New South Wales can be exported to other States at prices which undercut the prices of the locally-produced cement, and they say that this is not desirable. I point out, however, that we preach decentralization, and this industry fosters that ideal. I intend to stand wholeheartedly by the original decision of this committee: A most discreditable feature of the whole matter is the intrusion of considerations in relation to the Ottawa agreement.
– This is not the first occasion upon which that has happened. The honorable member previously supported the contention.
– I have no recollection of such considerations having been raised in Cabinet, nor has the honorable member for Parkes (Sir Charles Marr) or the honorable member for Moreton (Mr. Francis), two other ex-Ministers. If the first act of this committee constituted a breach of the spirit of the agreement, the amendment which the Government is now prepared to accept is in no better case, and there can be no compromise.
Another discreditable feature is the manner in which those honorable members who voted according to the dictates of their conscience, with a view to promoting the best interests of this country, have been flogged in the leading articles of some of the most prominent news1 papers of New South Wales, as though they are thieves and murderers who would stab the Government in the back. These tactics will not intimidate me, but a check should be imposed upon them. Then there are the scurrilous circulars which have been distributed throughout the electorates of those honorable members.
– The honorable gentleman does not blame the Government for that.
– In a sense, I do. The Government was the first to say that (he flag of mutiny had been hoisted, and practically to invite a protest from overseas. The initial protest on behalf of Great, Britain was made by the Minister for Trade and Customs himself, and he was followed by other Ministers.
– Does the honorable gentleman contend that Great Britain is wrong ?
– I do. But for the raising of the issue by members of the Cabinet, nothing would have been heard of it. It is really too small a matter for Great Britain to take notice of. I do not suggest that the Government asked that a protest should be lodged. There are other ways, however, by which one may be instigated.
I intend to vote along the lines which I followed originally. I am astonished that some of those honorable members who supported the original proposal of the honorable member for Moreton are prepared to accept the present amendment. If it were likely that the matter would be carried further, there might be some justification for the adoption of that course. I believe that the opinion is held that the matter will be referred back to the Tariff Board at the expiration of the six months stipulated. But there is no mention of such action. I know that the honorable member for Moreton would like it to be taken. If the item automatically came again before the board, the position would not be so bad, because there would be a chance of the industry being protected, and this chamber would retain the right to discuss the latest report “nd to see that justice was done not only to the industry, but also to Australia.
.- We have witnessed to-day an exhibition of political gymnastics worthy of the best traditions of Barnum and Bailey. One ministerial member after another, who a few weeks ago voted against the Government on the deep-seated principle of the protection of Australian industry, has changed his mind and accepted the suggested compromise. Some of those who have apologized for their latest attitude have shown clearly that they do not fully understand the meaning of the amendment which caused them to change their minds. The effect which the amendment will have is not responsible for this change. The amendment itself i3 merely an effect, and we must look for the cause of it.
Immediately after these gentlemen had voted against the Government on the last occasion, a press campaign was instituted for the purpose of terrorising them. That campaign was carried further by the issue of scurrilous circulars in their electorates, urging their constituents to vote against them at any succeeding election because they had had the temerity to exercise the right given to them by the Constitution of Australia to assess the tariff which should be imposed upon goods imported into this country. Subsequently there were further evidences of the application of party pressure; but these honorable gentlemen apparently still declined to bow the knee to the inner circle of the Government. Then the British High Commissioner butted into what was obviously a question for the decision of the Commonwealth Parliament. That Parliament had not gone beyond the powers vested in it by the Constitution, but, on the contrary^ had exercised an indisputable right conferred upon it by section 90 of that instrument.
All these forces were exerted- in order to compel these recalcitrant members to accept either wholly or- in part the decision of the Tariff Board.
To give an idea of the extent to which the Government itself has shifted its ground on this particular issue, I need only quote a reply given oh the 8th May last to a question asked by the honorable member for West Sydney (Mi-. Beasley). The question was -
Will the Prime Minister state whether the published report is correct that a compromise has been reached between the Cabinet and certain Ministerial members in regard to duties on cement?
The right honorable gentleman replied in the following terms: -
It is not customary to reply to questions of this nature, even when asked upon notice, but in this case 1 may say that there is no compromise, consequently the Government does not need nor does it intend to submit the matter to the British Government.
Yet to-day the Government has accepted a compromise, by having agreed that the duty shall continue to operate for a period of six months. In the Senate on the 13th May last, a very prominent member df the Government party, the Government Whip, said -
In view of the fact that the Government considers that the action of the House of Representatives in restoring the duty to Cd. per cwt., is a breach of the Ottawa agreement. I suggest as a fair compromise that the duty of (id. per cwt. be continued for twelve months, in order to enable the companies to adjust their costs.
Senator A. J. McLach’lan, a member of the Cabinet, replied -
The Government must regard the proposal of Senator Foll as being just as much a violation of the Ottawa agreement as was the rejection by the House of Representatives of the original proposal. From a logical viewpoint, it is obviously impossible for the Government to accept the suggestion of the honorable senator.
That Minister sit3 cheek by jowl with the Minister for Trade and Customs (Mr. White) in the Cabinet room. Yet the Minister for Trade and Customs has accepted the compromise offered by the honorable member for Wakefield (Mr. Hawker), that the duty shall continue to operate for a period of six months. I put it to the committee that a delay of six months in giving effect to the decision of the Tariff Board i9 as much a breach of the Ottawa agreement as would be a delay of twelve months, which the Cabinet rejected. I should like to know which Minister runs the Government.
A good deal of discussion has revolved around the meaning of certain articles of the Ottawa agreement, in relation to the right of this Parliament either to accept or to reject the recommendations of the Tariff Board. When the cement duties were previously before this chamber, the honorable member for Richmond (Mr. K. Green) claimed that, although the verbiage of article 12 appeared very simple, the expression “ existing duties “ meant the duties existing when the agreement was assented to by this Parliament. The retort of the Minister was, “ That is not the accepted view of the Government.” He made it clear that the Government considered that article 12 meant the duties existing at the time the Tariff Board was considering any particular industry. The effect of such an interpretation is that never at any time under any circumstances can the board raise the protective duties on any particular Australian commodity. All it can do is to keep the duties static, or reduce them.
– The honorable member has misunderstood the position.
– If that is so, ten or twelve Government supporters also misunderstood it a few weeks ago.
– The Tariff Board can recommend variations of the British preferential duties upwards or downwards.
– I cannot understand how the Minister can make that deduction from his own remarks on this subject at various times.
– As a matter of fact, duties have been increased on about 50 items.
– Article 12 of the Ottawa agreement reads as follows: -
His Majesty’s Government in the Commonwealth of Australia undertake that no new protective duty shall be imposed, and no existing duty shall be increased, on United Kingdom goods, to an amount in excess of the recommendation of the tariff tribunal.
Undoubtedly, that means that the Tariff Board, has a qualified right to fix duties, which the Commonwealth Par liament cannot upset. That being so, that provision of the agreement is in direct conflict with section 90 of the Commonwealth ‘Constitution, which reads as follows : -
On the imposition of uniform duties of customs the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive.
Unquestionably, section 90 confers upon the Commonwealth Parliament an exclusive right to deal as it pleases with duties of customs and excise.
– And no outside authority is overriding it.
– I do not see how the honorable member can make that statement in view . of what is actually occurring in regard to the duties on cement. Article 12 of the Ottawa agreement undoubtedly seeks to impair the power of the Commonwealth Parliament by transferring certain of its functions to the Tariff Board. This, I suggest, is entirely unconstitutional.
– The honorable member’s time has expired.
– If no other honorable gentleman objects, I shall take my second period now.
Undoubtedly, the Government is using article 12 of the Ottawa Agreement to force some of its own supporters to vary the vote which they conscientiously gave a few weeks ago on the cement duties; but article 12 of that agreement is, itself, ultra vires the Constitution, in that it purports to confer upon .the Tariff Board a power which the Parliament itself alone may exercise. The agreement is beyond the four corners of the Constitution in that respect.
– The honorable gentleman has become a bush lawyer.
– I “ invite any honorable member opposite to dispute the accuracy of my view on this point. The mere fact that the Government is supported by a majority of the members in each House of Parliament does not enable it to act unconstitutionally.
Unquestionably, article 12 of the Ottawa agreement seeks to clothe the Tariff Board - itself a creation of Parliament - with power that Parliament itself should exercise, and so violates section 90 of the Constitution.
Another consideration which should have force with honorable members is that, even assuming my statement of the constitutional position to be incorrect, there should be no fear by either the Government or its supporters, or the British High Commissioner in Australia, who “ butted in “ while this subject was being considered by the Senate, or even the Imperial Government, that the action of this committee in increasing the cement duties was directed against British interests, for the Tariff Board stated on page 5 of its report on cement that the object of its recommendation was to force a reduction of local prices and not increase imports from overseas. It is obvious, therefore, that British interests were not at all in the minds of the members of the board when their recommendation was framed. The Government has contended that its object in reducing the duties on cement was to give overseas competitors an opportunity to share in the Australian market, but that was not the reason why the board recommended a reduction of these duties.
In conclusion, I ask the Minister to say definitely, when he next speaks on this subject, which member of the Ministry correctly interprets the mind of the Cabinet. Was the Prime Minister correct when he said that the Government would not submit to any compromise in respect of the cement duties, but would adhere strictly to the report of the Tariff Board? Or was the Postmaster-General (Senator A. J. McLachlan) correct when he said that a delay of twelve months in implementing the recommendations of the board would be as much a breach of the Ottawa agreement as the amendment of the schedule made by this committee a few weeks ago? Or is the Minister, himself, to be accepted as the final authority, when he says that a postponement for six months of the application of the duties recommended by the Tariff Board would not be a breach of the Ottawa agreement? Ob-
Mr. Rosevear. viously, only one of these three members of the Government can be correct. It seems equally obvious to me that if any objection can be legitimately taken to a postponement of the application of the duties recommended by the Tariff Board, it is immaterial whether the period be six or twelve months.
– In my school days I was taught a fable, the moral of which was that those who set out to please everybody usually finished up by pleasing nobody. Of course, it is not to be expected that the Opposition would be pleased with anything that the Government did. Even if the Government pulled down the heavens and bestowed them on members of the Opposition, those members would be dissatisfied. But when supporters of the Government feel that they have just cause for criticism then I can fairly claim that the Government, by its action in accepting the amendment, has failed to satisfy either side of the House.
I do not wish to discuss the amendment of the Leader of the Opposition (Mr. Curtin), but I must say a few words on the proposal of the honorable member for . Wakefield (Mr- Hawker), which proved to be immediately acceptable to the Minister for Trade and Customs (‘Mr. White) on the ground, so we were told, that it would give the cement manufacturing industry in Australia an opportunity to re-organize itself. The Minister would now lead us to believe that the industry is being threatened with extinction, but no suggestion of that kind was made by him when he first spoke in this chamber on the Tariff Board’s report on this industry. His address on that occasion convinced me of the soundness of the board’s recommendation, and in my opinion the suggestion now offered that we may accept the proposal of the honorable member for Wakefield, because it will give the cement industry a chance to re-organize itself, is so much “eyewash “. This industry has had at least four months in which to do any internal re-organization that it considered to be necessary, for’ the tariff schedule which we are now considering was tabled last November. The failure of the cement manufacturers to do anything since then that could be regarded as re-organization is a clear indication to me that they felt that they were quite capable of maintaining their operations even if British cement were allowed free entry into Australia. I am confirmed in this view by the fact that even since the tabling of this schedule the industry has expanded. Capital has been found to establish a new cement manufacturing concern in “Western Australia, even since it was known that the Government intended to admit British cement duty free. That proves conclusively the Tariff Board’s contention that, even if British cement is allowed in free, there is sufficient profit within the industry to return fair dividends on the capital invested. I have listened carefully to the Minister’s statement in regard to the Ottawa agreement. The honorable member for Dalley (Mr. Rosevear) quoted the remarks of the -Postmaster-General (Senator A. J. McLachlan) in another place in regard to it ; we have also heard the opinions expressed by legal luminaries in his chamber, as well as those of eminent King’s Counsel outside. I am not particularly concerned at the moment with Ottawa, but because of the confusion of thought about it, and in view of certain comments in another place, I am afraid that the spirit underlying the Ottawa agreement, instead of being a vitalizing spirit, is’ merely a pale shadow of the spirit we understood was behind it. “What concerns me more is to consider the facts set out iri the report of the Tariff Board’, and to try to determine the issue . iri respect of the cement duties on their merits as presented in that report. “We find that this industry, because it paid such excessive dividends, attracted a great number of persons to establish new. cement factories all over Australia, with the result that it became over-capitalized. The field was so full of poppies that everybody hopped in to pick their own particular blooms. That, in itself, was sufficient to cause a bad effect on the industry. The Tariff Board, finding that excessive profits had been made, quite rightly reported adversely on the industry, and . recommended that British cement should be imported free of duty :as a means ‘of forcing prices down to a reasonable level. It recognized that if that were done advantage could be taken by the users of cement to afford greater employment by a greater use of cement. It is clear that excessive profits of the cement companies had the effect of definitely restricting trade. Honorable members are aware of the effect that excessive prices for a commodity that is a basic fundamental of all construction work have on the employment position; yet honorable members opposite are prepared to maintain excessive protection for an industry which charges excessive prices. The House of Representatives had no sooner dealt with this matter a few weeks ago, when a tender submitted by one of the cement companies was accepted by the “Water and Sewerage Board in New South Wales in which the price quoted for cement was at the high level operating prior to the presentation of the Tariff Board’s report. The industry has no conscience in regard to this matter, and it is continuing to maintain high prices for its commodity, notwithstanding the publicity given to it in the Tariff Board’s report. I conclude by saying that I supported the Government when the schedule was first brought down. I supported it when the duties were made British free, and I am. sorry to find now that the Government is not prepared to be loyal .to those members who then supported it. It is not a case of members having abandoned the Government; it is rather one of the Government having abandoned its supporters. I am sorry to find that, in an attempt to draw a red herring across the trail of the ultimate issue, the Government has seen fit. to accept. an amendment brought forward at this late stage. Had the Government stood four square on this matter, its action would have redounded much more to its credit than will the course which it now proposes to follow.
.- We have heard quite a lot from the honorable member for Wentworth (Mr. E. J. Harrison) about the profits made by the Australian cement manufacturers, but little has been said about the exorbitant profits made by the British cement companies. I desire, briefly, to give details of the profits made by some of those companies Figures relating to these companies are presented to rebut some of the statements made by honorable members opposite, who, during the past two or three weeks, have been most solicitous for the welfare of the overseas manufacturers. In 1933, the Alpha Cement Company in England earned a profit of 10.1 per cent., and paid a dividend of 4 per cent. ; and in 1935 it made a profit of 13.8 per cent., and paid a dividend of 10 per cent. The Associated Portland Cement Company in 1935 made a profit of 13.8 per cent., and declared a dividend of 10 per cent. The British Portland Cement Company has set Australian manufacturers an example with the following earnings and dividends : -
The figures for the Tunnel Portland Cement Company, which are equally illuminating, were as follows: -
These are the companies which, we are told, should be allowed to share the Australian market with the Australian manufacturers under the terms of the Ottawa agreement; these are the people for whom the arch freetraders in this Parliament are so solicitous; these are the people who honorable members say should be protected under the guise of the Ottawa agreement. Senator Leckie, a prominent member of the Nationalist party, and vice-president of the Victorian Chamber of Manufactures, speaking in another place on the 13th May, said -
I am glad that the Government has seen fit to divest its arguments to-day of the sanctity of the Ottawa agreement; its position in this respect was untenable. I regret very much that in a speech which he made in Melbourne last week, the High Commissioner for the United Kingdom went so far as to say, in effect, that the British Government should be the judge as to whether either Britain or Australia was breaking the agreement.
Utterances such as these caused the British Government, through its High
Commissioner in Australia, Sir Geoffrey Whiskard, to intervene. The amendment moved by the Leader of the Opposition will test the sincerity of those honorable members who are sheltering behind the amendment moved by the honorable member for Wakefield (Mr. Hawker). The Labour party believes that the duty of 6d. per cwt. on British cement should continue to be imposed indefinitely, or at least until such time as the electors have had an opportunity to speak their minds in regard to it, and return to the treasury bench a Federal Labour government prepared to give adequate and effective protection to’ the cement industry. That is the reason for the amendment moved by the Leader of the Opposition. If that is defeated, we shall fight for the retention of the duty of 6d. per cwt. as decided upon by an overwhelming majority in this committee a fewweeks ago. We regard the amendment moved by the honorable member for Wakefield as only a subterfuge, a facesaving device to extricate the Government from a difficult position. If it is agreed to the duty will be automatically removed. Honorable members opposite who stood behind the Opposition a few weeks ago will be given an opportunity to vote for the retention of the duty of 6d. per cwt. I appeal to them to maintain a consistent attitude in this matter.
, in connexion with this matter. The honorable member for Melbourne Ports is the only member opposite who has refused to allow his conscience to be salved for political purposes. A great deal of political gymnastics has been indulged in by honorable members sitting behind the Government in connexion with the amendment proposed by the honorable member for Wakefield (Mr. Hawker). In dealing with this matter the Government hai left itself open to the scorn of the Australian people who fear that Vital issues of this sort are decided outside of this Parliament. Unless the Government tacks its flag to the mast, and says : “ No surrender “, it will continue to merit that scorn. The amendment moved by the honorable member for Wakefield merely presents an opportunity to the Government to extricate itself from a difficult position. If the Government does not stand by the former decision of this committee, the telegraph wires to the Melbourne Club will be screeching with the news. The members of that club will say: “We are the people who rule this country; we have our minions in Canberra to do our bidding.” That such a state of affairs should exist is a disgrace to Australia, and is a violation of the independence of this Parliament. 1 have always understood that the vital planks in the platform of the Labour party were an unswerving opposition to monopolies, and an uncompromising opposition to the earning of unfair profits by inflated concerns at the expense of the taxpayers, the consumers, and, above all, the wage-earners. This discussion appears to me, however, to show Labour as represented in this House in the guise of servile followers of greed, monopoly and extortion, and to convict them of condoning the use of the low wage-earner to feed the fat monopolist. Everything that I stand for, that Australian principle and policy stand for, that the Australian worker stands for, is violated by the shillyshallying which has gone on in connexion with this matter. I do not envy the members of the Labour party with the exception of the honorable member for Melbourne Ports in their outlook on this important matter. The adherents of that party profess to represent a basic creed. I was sory to hear the honorable member for Batman (Mr. Brennan) say that a policy is only as strong as its legs. If the strengthening of monopoly grips on this country is a leg to be proud of I am sorry for the honorable member’s outlook. Politics, it seems to me, very often come before principles. The provision of reasonably cheap materials for the use of struggling pioneers in the outback appears to be of little concern to members of the
Federal Labour party. I have no fat monopolists in my electorate, but I have a lot of battlers who are seeking to win a living under conditions of great hardship, and I am anxious that they should be able to obtain the things they need at a reasonable price. Common sense, too, dictates that employment will be increased and not retarded. What we have to-day is nothing but a party feud. Australians will object to having their intelligence insulted by such a superfluity of imbecilities as have emanated from members on the opposite side of the House. I am sorry that members of the Labour party cannot see the light, and that they really do not understand the significance of what they are seeking to do. There is no need to argue the position; it argues itself.
.- I desire to state my reasons for supporting the amendment of the honorable member for Wakefield (Mr. Hawker). Honorable members know that I was one of those who originally voted for the fixing of the duty at 6d: per cwt. I did not state my opinion on that occasion, but I now find it necessary to do so. Those government supporters who voted against the adoption of the Government’s tariff proposal did so, in most instances, because they believed that the industry should be given an opportunity to adjust itself to the position created by the removal of the protection which it had enjoyed since 1914. They believed that if the duty were abolished entirely, instead of being gradually reduced, the effect upon employment would be most serious. That was a reasonable attitude to adopt, and it has now been recognized as such by the Government. The Opposition challenges us with insincerity, but I am surprised that members of the Opposition, who helped us on the first vote to protect the industry against a change which would be too sudden and drastic, are not now prepared to go further and support the present proposal, which is really designed to achieve the end they have in view. I am forced to believe that the Opposition is merely .seeking to make political capital out of the position.
I wonder whether the Minister for Trade and Customs (Mr. White) really believes that if the duty is removed altogether, the price of cement will be reduced. Surely he has had enough experience of monopolies to know that this powerful organization will most likely come to an agreement with the manufacturers in Great Britain to maintain the price of cement on the local market.
Mr.White. - That is not so easily done.
– It has been done before, and no doubt it can be done again. I am opposed to monopolies, because they exploit the public, and because they prevent the poorer section of the community from obtaining a fair deal. I believe that the way out of this difficulty is for the Government to fix the price of cement at a reasonable level. We have already accepted the principle of fixing the pricfl of butter, sugar and some other primary products, so that there is no reason why we should not extend the principle of price fixation to cement. The members of the Country party surely cannot logically object to that. If we are really’ anxious to fight this monopoly, the only effective way in which it can be done is to fix the price of its product. It should always be made clear that, when protection is afforded to an industry, there is an implied condition that the product of that industry shall be sold to the public at a reasonable price. The hand that gives the protection can take it away if this condition is ignored. I am inclined to think that the honorable member for Melbourne Ports (Mr. Holloway) offered what might prove to be another satisfactory solution of the difficulty, when he suggested that an excess profits tax should be imposed upon the profits of monopolies so that some of their, ill-gotten gains may be used for the benefit of the community.
Members of the Opposition state that they will give us on this side of the House an opportunity to prove our sincerity by voting for the amendment moved by their leader, but the fact is that that amendment has been designed merely to deceive the public. Press representatives asked those Government supporters who had the temerity to vote against the Government on this issue, to make a statement explaining their position. It is not necessary to offer any other explanation that that we are here, as the representatives of our constituencies, pledged to support the interests of those who sent us here. It has always been understood that supporters of the Government are free to vote as they think fit on tariff items, and we have exercised that right. Now, even though we have not got all we sought, we have established the principle that the protective duty should be removed gradually, so that the industry may have an opportunity to adjust itself, and so that employment may not be unduly disturbed. I again put forward my suggestion that the price of cement should be fixed at a reasonably low level in order to save the public from exploitation, and to assist those industries in which cement is employed.
– I preface my remarks by asking the Minister for Trade and Customs (Mr. White) whether he will take steps to have this industry further inquired into by the Tariff Board before the duty ceases to operate in six months’ time. Conditions may change to such an extent between now and then that such an inquiry would lie justified. The tariff has never been regarded as a party issue, and members supporting the Government have been free to vote on tariff items according to their judgment. A vote given against an item on the tariff schedule is not a vote against the Government. It is a fact that a considerable section of the party which supports the Government is anxious to give the cement industry a chance to rehabilitate itself in view of the Tariff Board’s report and the Government’s decision. At the eleventh hour, the issue of the Ottawa agreement was raised, and it was stated that, any attempt to retain protection for the industry, contrary to the recommendation of the Tariff Board, would be an attempt to infringe the provisions of that agreement. But I maintain that as the duty was being reduced and not raised, the Ottawa agreement has nothing to do with the issue. .From a business - point of vie.’”, I would say that Great Britain is not concerned over this industry; in fact, the British Government does not care twr hoots what happens in regard tothis matter. Even the British manufacturers themselves had so little interestin it that they were not represented’ at the inquiry by the Tariff Board, and they refused to give evidence, or supply information regarding production costs. Incidentally, it is essential that the Tariff Board should be furnished with full information regarding costs of production, prices, &c, of overseas interests which seek tariff reductions in Australia.
The people of Australia, however, are mainly concerned over the price of cement in Australia, and I am pleased to note that this phase of the matter has been stressed to-day, rather than the Ottawa agreement. When considering the protection appropriate for any industry, we must consider its effect upon employment. We must remember that every married employee thrown out of work costs the State £100 a year to maintain. It is better that men and their families should be maintained by industry than that they should be a charge on the State, and that is a point which should be considered by the Tariff Board when making its inquiries. The resultant saving of expenditure can be passed on to industry in the form of lower taxes, and so encourage it to greater efforts. The present issue is not between the manufacturers of Australia and the manufacturers of Great Britain, but between the manufacturers of Australia and the Australian importers. The Australian manufacturers want an import duty of1s. per cwt., whereas the importers want British cement to be admitted duty free. The battle has been joined, and I know from my own experience, both of manufacturing and importing, that when a tariff fight starts, it is a case of Heaven help all those who get in the line of fire. I regret that mention has been made of lobbying in connexion with this item, but I do not think that any member has been asked to vote one way or the other by the representatives of either side. I certainly was not. Much propaganda was indulged in by both importers and manufacturers, I have seen nothing so scurrilous as the circular which, it is said, was issued by a certain tariff league in Sydney. It was obviously sent out to influence the votes of honorable members. It was practically anonymous, for it bore no signa tures ; but printed at the top were names of certain reputable citizens, who, I am sure, would not have permitted their names to be associated with such a document and who, I understand, have repudiated it. I am glad, in the interests of political decency, that this is so.
All British dominions have placed a duty on cement. New Zealand, for instance, after the signing of the Ottawa agreement, imposed a duty on British cement at the rate of8d. per cwt. The proposal which a number of honorable members on this side put forward was that the British rate shouldbe reduced from1s. to 41/2d. per cwt., a reduction of 621/2 per cent., having in mind, of course, a price adjustment. Then we suggested that there should be another investigation in regard to this item six or twelve months hence. As a patient may be killed by an over-dose of medicine, it is better to reduce a duty gradually than to wipe it out at one stroke of the pen. The amendment submitted by the honorable member for Wakefield (Mr. Hawker) meets my views on the matter. The industry should be given an opportunity to rehabilitate itself, but I hope that before the duty is entirely removed another inquiry will be made by the Tariff Board, as the circumstances will probably make such an investigation necessary.
– In view of certain criticism directed against members of this chamber, I feel constrained to say something about the general attitude that this Parliament has adopted to tariff matters, since the signing of the Ottawa agreement. I have ascertained from the Customs Department the number of amendments, in operation at the presenttime, which have been made to the British preferential tariff since the agreement was signed, and find that 632 reductions of British preferential duties have been made owing to general exchange adjustments, and 290 other reductions have been effected to give preference to Great Britain. Amendments which have increased duties for the purpose of safeguarding the protective incidence of the tariff have numbered only 45. When we consider that record, there is very little justification for the criticism that has been offered, or for the suggestion that the obligations entered into under the Ottawa agreement are not being honoured. I still stand by that agreement. On the whole, it has been beneficial to both Australia and Great Britain. I have been a supporter of preference to Great Britain since it was first granted in 1907. According to information supplied to me by the Commonwealth Statistician, the value of importations in Australia of merchandise from the United Kingdom, expressed in terms of British currency, since 1931-32, is as follows: -
Those figures show that we have opened our markets generously to the people of Great Britain, and have honoured the Ottawa agreement. Since 1907, except in regard to a few items, Australia has given preferential treatment to Britain. asking nothing in return ; but the Ottawa agreement is now proving particularly beneficial to the primary producers of Australia. The estimated value of exports from Australia, expressed in terms of British currency, is as follows: -
Those figures indicate that the Ottawa agreement has been mutually beneficial, and ‘that it has been honoured by both Australia and Great Britain. Generally, this Parliament favours a protectionist policy, and, considering the difficulty of the problem with which the Tariff Board has been faced in adjusting tariff rates in accordance with national policy, and in compliance with the Ottawa agreement, the figures that I have quoted suggest that it has accomplished its task exceptionally well. This, of course, does not exempt the board from criticism, and I am sure that it does not expect to escape it. The values in sterling of exports of merchandise from the United Kingdom to the undermentioned countries, during the year ended the . 31st December, 1935, was as follows: -
Those figures show that Australia stands well to the fore in regard to its purchases from Great Britain.
We are now dealing, not with a hothouse industry, but with a truly national one. Its raw materials are obtained in Australia, and it employs Australian workmen. The cement industry is established in every State. My fear was that the adoption of the recommendation of the Tariff Board in regard to it would be more injurious to the industry in Western Australia and Queensland than in New South Wales and in Victoria. Another suggestion in some statements in the press was that the members of this chamber had insisted on the retention of the duty of1s. per cwt. Actually, we reduced it by 50 per cent., and if we had made similar reduction in regard to other protected industries, a very strong complaint would be heard throughout Australia. Personally, I agreed to that reduction being made in the existing duty operating in regard to cement, because the report of the Tariff Board showed that there had been some excessive profits, and that there appeared to be a sort of combination among those connected with the industry. I held that, the reduction would be a clear notification to the industry that Australia expects those who get the benefit of protection to give a fair deal to the people generally. I am prepared to accept the amendment now before us, as in the circumstances, I consider the course it proposes to be the most practicable tofollow.
Question - That the figures proposed to be omitted (Mr. Curtin’s amendment) stand part of the proposed amendment (Mr. Hawker’s) - put. The committee divided. (Chairman - Mr. Prowse.)
Majority . . 16
Question so resolved in the affirmative.
Amendment of amendment negatived.
Question - That the words proposed to be added (Mr. Hawker’s amendment) be so added - put. The committee divided. (Chairman - Mr. Pro wse. )
Majority . . . .8
Question so resolved in the affirmative.
Amendment agreed to.
Original question as amended -
That the requested amendment be made, as on and after 1st December,1936 - put. The committee divided. (Chairman - Mr. Prowse.)
Majority . . . . 12
Question so resolved in the affirmative.
Sitting suspended from 6.15 to 8 p.m.
Sub-item (b) -
By omitting the whole of sub-item (b) and inserting in its stead the following sub-item : - “And on and after 2nd April, 1936 -
Articles of. cut glass, including bottles, decanters, flasks and jars of cut glass empty or containing goods not subject to an ad valorem duty and lamps and lampware of cut glass, but not including articles of etched or engraved glass - ad valorem, British, 15 per cent.; intermediate, 50 per cent.; general, 60 per cent.”
Senate’s Request (No. 4). - Make the duty, ad valorem, general, 50 per cent.
– I move -
That the requested amendment be not made.
The Senate has requested that the foreign duty be reduced. As I submitted to this committee when the duties were originally discussed, the extra margin between the intermediate and the general tariff is provided in order to facilitate trade treaty negotiations. It is essential that it should remain.
.- I hope that the committee will agree to the request of the Senate. In the different schedules which have been introduced from time to time, few items seem to have been so tainted as those which affect the glass industry. One has only to consider the price offered on the stock exchange for shares in the Australian company, to realize the marvellous nature of the profits which are being made. From what I have been able to glean in regard to glassware generally, there is nothing more scandalous than the restrictions which have been imposed on imports.
Motion agreed to.
250 .. .
By omitting the whole of sub-item (c) and inserting in its stead the following sub-item: - “And on and after 2nd April, 1936 -
And for each £1 by which the equivalent in Australian currency of £100 sterling is less than £125 at the date of exportation -
An additional duty of - ad valorem, British, . 8 per cent.; intermediate, 8 per cent.; general, . 8 per cent. whichever rate returns the higher duty.
Senate’s request(No. 5). - Make the duty, per dozen pieces, general, 10d., or ad valorem, general, 40 per cent.
– I move -
That the requested amendment be not made.
My remarks on the previous sub-item refer also to this. The Government desires to retain the duty for which it made provision.
Motion agreed to.
On and after 21st March, 1936 -
By omitting the whole of sub-item (a) and inserting in its stead the following sub-item : - “ (a) Bromine salts; cyanide of potassium, cyanide of sodium and calcium cyanide - British, free; intermediate, free; general, free.”
Senate’s request (No.6). - Amend sub-item to read -
Bromine salt being a mixture of sodium bromide and sodium bromate; cyanide of potassium, cyanide of sodium and. calcium’ cyanide.
– I move -
That the requested amendment be made.
This is merely a desirable departmental change, which has been recommended by theCommonwealth Analyst, with a view to the commodity being more easily classified.
Motion agreed to.
By omitting the whole of sub-item (e) and inserting in its stead the following sub-item : - “ (e) Parts of bodies enumerated in paragraphs (1), (2) and . (3) of sub-item (d), viz.: -
1 ) Pressed metal panels, not fabricated beyond trimming of edges -
Senate’s request (No. 7) -
Add new sub-paragraph -
– I move -
That the requested amendment he made.
This and the succeeding request relate to motor body panels. This concerns panels that are not completely fabricated, while the next, which I propose later to ask the committee to reject, asks for the free admission of fabricated panels.
In the Senate, it was submitted that, owing to the difficulty of obtaining bodies experienced by importers of some makes of cars, particularly certain English makes, bodies should be admitted free of duty. Various alternatives were suggested, and finally two requests were agreed to for the free admission under by-law of panels for the complete bodies. I point out that if panels were admitted free, the motor body-building industry in Australia would be seriously interfered with. It is a very large industry, and provides considerable employment. The Tariff Board, in a most comprehensive report, recommended that bodies should come in on a poundage basis, but that is not working out altogether satisfactorily. Undoubtedly the demand has exceeded the supply over a period, and in some quarters. The pressure would be relieved if the nonfabricated panels were admitted under by-law, and very sparingly. The PostmasterGeneral (Senator A. J. McLachlan), informed honorable senators that, if the request were agreed to, panels would be admitted under by-law only if supplies of the locally manufactured article were not available. I emphasize this, because the position in regard to the scarcity of bodies and panels has in some cases been grossly exaggerated, and so that those companies which may wish to import panels will not immediately make application to the department, but will first seriously endeavour to obtain their requirements from the Australian manufacturers.
– I am rather astonished that the Minister should have moved that the first of the Senate’s requests be agreed to, particularly in view of the speeches which he made when this item was previously before the committee. I cannot understand the reason for such a change of front on the part of the Government. The honorable gentleman has given no idea as to the number of panels which might be imported as the result of the granting of this concession. He has even admitted that the complaints in regard to the nonfulfilment of orders for panels for English bodies have been grossly exaggerated.
– Evidently I did not make myself quite clear. I merely want this inserted in the schedule, so that, if it is necessary to admit some panels free of duty, the law will give me the power to take that action. I have not the power at present under any by-law.
– The honorable gentleman is asking for a very genera! power, under which he could admit thousands of panels.
– I have already said that the provision will be sparingly administered, and that the welfare of the Australian manufacturer must be the first consideration.
– I cannot visualize the honorable member for Swan (Mr. Gregory) agreeing to place this power in the hands of the Minister. I remember too well the fight which he put up against a similar proposal. He has always contended that the tariff should be specific, and that the decision as to whether there should be large imports free of duty ought not to be left to the whim of any Minister; that Parliament should be supreme, and that no Minister should have the power to act on his own initiative.
I contend that acceptance of the Senate’s request will perpetuate the endless uncertainty which has surrounded the body-building industry. Each year, with the introduction of new models, over 40 distributors of British cars will bring pressure to bear upon the Minister to exercise this power to admit panels under by-law. They will unquestionably accompany such pressure with the kind of propaganda of which we have had experience over and over again during the last two or three years. The Australian bodybuilders will not know how to plan their manufacturing operations, and will live in an atmosphere of ceaseless, vicious propaganda and uncertainty, which will strike a blow at the stability of their industry and retard its expansion. Such uncertainty is not conducive to progressive development, nor can it ultimately prove anything but harmful to the British motor trade. Australian body-builders have given ample evidence of the fact that they possess the necessary capacity to produce bodies of the class required. A gentleman who inspected the factories of the United States of America and the United Kingdom told me recently that in his opinion the Australian motor body is equal to anything placed on the roads in either of those countries. There are some persons who will disagree with that contention; they always decry the products of Australian factories, and maintain that nothing good can be made in them ; but they cannot advance any sound reason in support of their view. The Australian body builders ask for a fair and logical business opportunity, which, in the past, they have not received from the majority of the distributors of British cars. They complain that the manufacturers of the United Kingdom have invariably failed to supply blue prints to them, or that if these have been supplied, sufficient time has not been allowed for provision to be made for the manufacture of bodies for any period ahead. British distributors have sought to obtain deliveries in a very brief period, and because of a certain amount of delay have approached members of Parliament who have freetrade tendencies, with the object of having their case ventilated in Parliament. Do we stand for that? Such a step as the Minister proposes is absolutely retrogressive. If the distributors of British cars will arrange for the five State distributors to amalgamate their orders, and allow the Australian body builders ample time for their fulfilment, there will be no cause for complaint. It would be well, also, for them to consider the advisability of confining their activities to a standard range of bodies. Has one of them invested £1 in an Australian concern which manufactures bodies? Decidedly not. They have devoted the whole of their energies to endless propaganda, with a view to the tearing down of the tariff wall, so that panels for bodies may be admitted free of duty. Who knows whether, in the whirligig of politics, the honorable member for Swan may not become Minister for Trade and Customs? If he did become Minister and he were asked to allow panels or bodies from Great Britain to come in free of duty, would he consider the welfare of Australian manufacturers ? He would find 99 reasons in favour of the granting of the request. At the present time the distributors of Standard cars are inviting quotations for a new model, the announcement in regard to which was made in England two months ago, but they have not supplied blue prints that are of any value to the Australian body builders. They expect quotations for such a difficult unit as a body to be made from an inspection of a sample car.
– We are not talking about motor bodies.
– The Minister knows that panels are for motor bodies. The propaganda is in respect of motor bodies, but it cannot be supported with facts. Blue prints have not been made available to the Australian body-builders in time for them to submit proper quotations, and all the generalities uttered by honorable gentlemen opposite cannot get away from this fact.
– This item relates to panels.
– The Minister has shifted his ground on this item, as he did on the cement item. Whenever a little pressure is brought to bear on him by interested parties, he backs down. If he were a real protectionist he would stand by the sentiments he expresses when he addresses gatherings of the various chambers of manufactures throughout the Commonwealth. The panels necessary for motor bodies can be made in Australia and we have well-equipped factories which are able to supply ‘the whole of our requirements. Why should there be this truckling to British motor car distributors?. The Labour party has always been prepared to give a generous measure of preference to British products. In fact our preferences to Great Britain are much more valuable than Great Britain’s preferences to us, but I cannot consent to the striking of a blow at the great Australian motor bodybuilding industry, which is so efficiently organized. I shall be glad to hear what the honorable member for Boothby (Mr. Price) has to say on this subject.
. - I congratulate the Government upon the stand it has taken in respect of this request by the Senate. The arguments advanced by certain honorable gentlemen on this side of the committee when this item was under discussion some time ago, have apparently commended themselves to the Minister. Undoubtedly the British motor car distributors in Australia are suffering great injustices at the hands of certain Australian motor body-builders, with the result that it has been impossible to market British cars in competition with foreign makes.
I should not have participated in this debate but for the statement of the Deputy Leader of the Opposition (Mr. Forde) that Australian motor bodybuilders are capable of filling all available orders in the Commonwealth. The honorable gentleman backed up his argument by many references to blue prints which he said were not available, for which reason the Australian motor bodybuilders had been unable to meet their obligations.
– Blue prints are necessary.
Mr.E. J. HARRISON.- If I remember rightly the honorable member for Martin (Mr. McCall) said some time ago that General Motors-Holden’s Limited were employing only from 60 per cent. to 80 per cent. of their plant; but presently I shall read a telegram sent from General Motors-Holden’s Limited in Adelaide, to an agent in Brisbane, in reply to a request for quotations for motor bodies. It is well known that when British car distributors seek quotations for motor bodies, if they cannot supply blue prints they usually make available a sample chassis. Motor body-builders who submit quotations on that basis must be fully aware of the capacity of their plants and should submit prices only when they know that they will he in a position to supply any orders placed with them. Honorable members who are opposed to the free admission of even a limited number of motor body panels spend most of their time discussing the subject in knocking down arguments which they themselves set up. I shall, however, submit some definite facts in support of the case as I see it. Recently certain motor body-builders, of Melbourne, asserted that they were unable to obtain a sufficient number of skilled artisans in the Commonwealth to fulfil all their orders. Surely that fact must have been known to the company before it submitted prices for motor bodies to certain British motor car distributors. I have heard it said that some of the British car distributors have not been prepared to accept motor bodies that have been made available to them. I definitely challenge the accuracy of that statement. It may be true that on occasions the British distributors have asked that motor bodies made available to them be held in the factory for the time being because of their lack of storage space, but they have never refused to meet their obligations. I. am sorry that the Government is not prepared to accede to the request of the Senate in regard to sub-item e 2 d, but as the request relating to subitem e 1 d is acceptable, I shall rest content. I appreciate the fact that reasonable care must be taken to protect the interests of the Australian workmen. It is also desirable that the motor body-building industry be decentralized as much as possible. I wish, however, to describe briefly some of the disabilities under which the British motor car distributors are labouring. The Australian motor body-builders have entirely failed to fulfil some of the orders they have accepted from British motor car distributors. For instance, a contract was entered into byRuskins Limited, of Melbourne, on the 5th September, 1935, to supply 500 steel bodies for 18/25 horse power Morris chassis. The first deliveries were to be made on the28th December, and thereafter deliveries were to be made at the rate of 30 bodies a week. In actual fact the first deliveries were not made until the middle of March of this year, and by the end of April only 72 cars had been delivered, although the contract number to be ready at that period was 266. This is a deplorable state of ‘affairs, but the same thing has obtained in connexion with practically allthe English cars. The distributors of Hillman-Minx, Wolseley.
Armstrong-Siddeley and Crossley motor cars contracted with. Buskins Limited for a certain number of motor bodies, but deliveries were so unsatisfactory that the sale of these cars was seriously affected. In spite of these facts we are told that the Australian public prefer American motor cars. The truth is that only the American cars are available to them. The British motor car manufacturers were challenged a considerable time ago to supply ears as suitable to Australian conditions as those supplied by the American manufacturers. The challenge was taken up, particularly by the Morris organization, and a satisfactory car was put on the market in Australia; but, unfortunately, it was impossible to obtain bodies in sufficient numbers to meet demands, with the result that the distributors of Morris cars in Australia lost the advantage of the best selling months of the year. Floods Limited, of Melbourne, also fell down on the job. The distributors of Standard, Singer, Riley and Rover - British cars - were unable to obtain bodies in Australia. According to statements made in this Parliament some time ago, Floods Limited asserted that it could not obtain sufficient orders to maintain its plant, and, consequently, had had to dismiss some of its employees. But, in actual fact, the company informed the distributors of the Riley and’ Rover cars on the 30th April last that it regretted its inability to supply them with bodies in the forthcoming year.
I come now to a consideration of the situation of General Motors-Holden’s Limited. It was stated in this chamber not long ago that this organization was operating only 60 per cent, or 80 per cent, of its plant, but when Mr. G. A. Lloyd communicated with it by telegram, seeking a quotation for bodies for Morris cars, he received the following reply: -
George Lloyd, care Homotor. Brisbane - Reference conversation regret unable offer satisfactory proposition 10/12 model. Have received letter dealing with 18/25 model. Will investigate this proposition when prints available from Richards. Many thanks inquiry. -
Mr. Horn is the sales manager for General Motors-Holden’s Limited. Obviously, when this organization found that it could not ‘pick the eyes out of the business it lost a good deal of interest in the whole proposition.
– Yes, that was the Melbourne firm to which I have referred, which also fell down on its job. The blue-print red herring - honorable members will overlook the clash in the colour scheme - which the Deputy Leader of the Opposition drew across the trail, will not mislead me, for I know the facts. I believe that honorable members generally are to-day well aware of the whole situation, and will be prepared to approve of the attitude which the Government has adopted. I congratulate the Minister on his foresight. I hope he will insist on the Australian bodybuilders standing to their obligations. Otherwise he will, no doubt, allow entry to unfabricated panels under departmental by-law.
– I cannot be accused of ever opposing the granting of adequate protection to Australian industries, but in this instance I see one of the most promising opportunities we have had for some time to improve our trade relations with Great Britain at the expense of a foreign nation. We should take advantage of it, especially in view of our unfortunate trade balance with the United States of America. That country has been almost insulting in its determined refusal even to consider the proposals of the Commonwealth to improve the trade balance between the two countries. It is essential that we should develop the Australian motor-body building industry, and do everything possible to ensure that continuance of work is provided for the many skilled artisans employed in it. I see no disadvantage in the Senate’s request; which, on the contrary, offers an opportunity to extend to British manufacturers a more equitable share of the trade in Australia, which, in the past, has been denied to them by the unpatriotic attitude adopted by some of the Australian body-building companies. American money is keeping British cars from the Australian market, and if we do our duty to the primary producers throughout Australia, and the people generally, we will give every encouragement to the British car industry. During the war period, the British motor-car inquiry languished, because manufacturers were largely engaged in manufacturing munitions and aeroplane engines for the government. Until America’s participation in the war, the motor-car manufacturers of the United States of America, due to the lowering of the output of British cars, were reaping a huge harvest in the world’s markets. After the war, British manufacturers had to train artisans and endeavour to reestablish themselves in the markets seized by the American manufacturers. To-day the industry has so successfully rehabilitated itself that British cars are competing successfully with cars produced in the United States of America. But when we find that in Australia the sale of British cars is menaced by the operations of Australian body builders, financed with American money, it is time we took administrative action in the interests of those British cars. I would be prepared to vote for their free entry and the total prohibition of the importation of American cars. Honorable members must admit that we owe a greater debt to Great Britain than we do to any other country in the world. The economic ills which confront this country at the present time are largely” due to the fact that millions of pounds have to be sent to the United States of America every year to meet the debit in the trade balance. For about a decade prior to the depression, no less than £210,000,000 in gold was shipped from Australia to the United States of America, largely to finance the purchase of American motor cars. But what does that country take from Australia? It will not take our butter, beef, wool, or any of our primary products. Its interests in Australia are only those of a seller who finds a ready market for his products. On the other hand, the industrial workers of Great Britain are large buyers of our butter, meat and primary products generally. If an American, vessel leaves an Australian port carrying a quantity of Australian primary products for consumption on the voyage it is forced to dump all its stores of this description before it comes within the three-mile radius of an American port. The amendment now before the committee presents an opportunity to render real assistance mi to the British motor industry in the marketing of its cars in Australia. British cars are the best in the world.
-The sales do not prove that.
– That is because of the unfortunate preference which is extended to American cars by certain body builders in Australia working hand in glove with the American industry. I have always stood for the interests of Australian workmen, and I claim that they should do their duty to the British manufacturers by purchasing British cars.
– Why do not the British manufacturers of cars reduce their prices. Last year, a profit of no less than 200 per cent, was made by one manufacturer.
– One made a large profit on baby cars which were in demand throughout the world. English cars are marketed in Australia at competitive prices with American cars of a similar type, but they have four times the durability of American cars.
– What make of car does the honorable member drive?
– A British car. Great Britain leads the world in the quality of its motor cars. No car produced in any country can compete with the British Rolls-Royce. Great Britain leads the world in the matter of turning out engines for use in the air, and on the water; why should it not lead in the matter of supplying Australia with engines for use on roads? I am pleased to support the amendment, and I hope that it will at least give some encouragement to the British manufacturers, and enable them to secure a larger share in the Australian market.
.- I have had the privilege of reading a carbon copy of the brief of the Deputy Leader of the Opposition (Mr. Forde) with regard to this matter. His speech was word perfect with the copy which I now hold in my hand. In fact, a copy of it was sent to every member. It was drafted by the powerful motor bodybuilding interests in Australia, on whose behalf the Deputy Leader of the Opposition made an impassioned appeal1. The latest published balance-sheet of General Motors-Holden’s Limited discloses that, after paying State and Federal taxation, that company made a profit out of the public of Australia amounting to no less than £632,000.
– What profit did Lord Nuffield make?
– Because the American companies virtually control the motor business in Australia, they are able to charge for motor bodies double the price charged for similar bodies in the United States of America. A large percentage of the capital of General MotorsHolden’s Limited is represented by American money, and a good deal of the profit I have mentioned will be exported from Australia in the shape of invisible exports, and will add to the debit in our trade balance with the United States of America. The Minister says that he will accept the proposal for the free admission of unfabricated panels, but I point out that this is a small concession of little importance. Originally, unfabricated panels were admitted under a duty of 6d. ; fabricated panels are still charged a duty of 9d. When the question was before the committee on a previous occasion, the Tariff Board expected the duty of 6d. would meet the case of the British manufacturers, but it was found in practice that unfabricated panels were of no use, because they could not be fabricated in Australia. Experience has shown that the only panels imported to any extent are fabricated panels. Therefore, the Minister, in agreeing to this concession, is agreeing to something which, in the past, has been of little or no value to the British motor industry. I agree, for the nonce, with the general remarks of the honorable member for Wide Bay (Mr. Corser). He is a very stout protectionist, a good Australian, and a loyal member of the British Empire. The honorable member realizes that if we do our duty to the Empire, we shall support those people who support us.
– Australia is not a part of the British Empire. It is a member of the British Commonwealth of Nations.
– Those who are so ready to deride the British Empire should be invited to go to the country where their sympathies lie.
.- When Lord Nuffield was in Australia, it was suggested to him that he should have bodies for his Morris cars built in Australia, and the estimated price was £80 for each ‘body. He said that he could make the bodies in Great Britain for £60, and he declined to have thom made by Australian workmen for £80. . According to him the only pant of the British Empire that counts is England ; Australia does not matter at all. The honorable member for Wentworth (Mr. E. J. Harrison) referred to what he called the “ enormous “ profits made by General Motors-Holden’s Limited, but what about the profit of 200 per cent, made by the Austin Company in England last year, or the profit of 150 per cent, made by Lord Nuffield’s company, or the profit of 200 per cent, made by that firm the year- before? Some honorable members opposite would cut the profits of Australian firms down to bedrock, while encouraging trade with British firms which make the large profits I have mentioned. The Labour party believes in having the work done in Australia under proper conditions. If Lord Nuffield wants to sell his cars in Australia, let him have the bodies manufactured in’ this country. There are plenty of people here to do it for him. This is the gentleman who promised all sorts of wonderful things when he was in Australia some time ago. He promised £60,000 to New Zealand for infant welfare work, but when there was a change of government in that country he changed his mind. If the British motor manufacturers would bring their methods up to date, there would be a good market for their product in Australia. The trouble is that they are always about a decade behind. Once they fall into line they can turn out a good article, but they will not keep abreast of the times. Why should they not establish bodybuilding and assembly works in this country? The honorable member for Wentworth told us a wonderful story about the Ruskin body-building company being unable to fill orders, and even refusing to quote for orders. I remind honorable members that no firm can give a price for work of this kind unless it has the blue prints before it.
We could not expect a builder to quote for the construction of a house of so many rooms unless he were allowed to examine the plans and specifications.
– They had a sample car to quote on.
– It was not sufficient to invite Buskin’s to examine certain imported cars, and then quote a price for manufacturing bodies. We were also told about a request by a man named Mackie from Western Australia for a quotation for the construction of 400 bodies for a certain kind of car. Subsequently, it was learned that only ten cars of that kind had been sold in Western Australia during the previous year. This is the kind of propaganda thatis being used by British interests against Australian workmen. As a matter of fact, if the firm had quoted for 400 cars, the man who asked for the quotation would have gone into a dead faint.
– The honorable member seems to be anti-British.
– I have nothing against Britain or things British, but I. am an Australian. When I. came here I adopted this country. I love it, and I will fight for the welfare of its people. The honorable member for Barton (Mr. Lane) is always talking about providing more work. Here is an opportunity’ for him to support an industry which is providing work for thousands of Australians. If he does so, he will be helping the people of Barton, too, because the provision of work in one place stimulates employment in others.
I agree with what has been said regarding the need for correcting our adverse trade balance with the United States, but that is not relevant to this debate. The American motor manufacturers established their own body-building works in Australia. They invested their money here in factories, and they are giving work to the Australian people. That is what we want the British manufacturers to do, and in this we should have the support of members of the Country party, because, when all our people are employed, there is a greater demand for primary products. As a matter of fact, the factories already in Australia could fill the demand for bodies if the orders were submitted in a businesslike way. The American motor manufacturers supply the local body-builders in August of one year with prints of the new bodies for the following year’s models. The British manufacturers supply the prints in December of one year, and expect to get delivery of the bodies in the following month. That could not be done in any country in the world. Even Ford could not do it. The committee should reject the request of the Senate. The freetraders in the other chamber were unable to open the door completely to the importation of British bodies, but they are asking that we empower the Minister for Trade and Customs to admit bodies from Britain at his discretion. In view of the stand taken by the Minister when this matter was under discussion here, I do not think that we should have anything to fear if the present Minister were given that discretion. The trouble is, however, that unless the door is closed firmly and definitely, the British motor manufacturers will refuse to establish factories in this country, hoping all the time to have British-made bodies admitted on favorable terms. The Morris and Austin motor companies could well afford to establish factories in this country, having regard to the enormous profits they have made recently. Honorable members opposite chided us a little while ago with supporting monopolies and excessive profit-making, but they are themselves the acknowledged champions of monopolies and profit-mongers.
The Sydney agent for the Riley car told me that he has tried to induce the manufacturers in England to establish a factory in this country, but they have persistently declined. This agent is a big Australian, who wishes to see the work done in Australia by Australians, but he cannot get the manufacturers to agree with him. Yet we are told that it is our duty to support British trade; and when we demur, the advocates of Britain against Australia take Union Jacks out of their pockets, wave them around their heads, and invite us to make obeisance. I remind honorable members opposite that Australia belongs, not to the British Empire, but to the British Commonwealth of Nations.
.- This debate . seems to have developed into a general discussion as to “whether one should buy a British or an American car, but the item itself deals with motor body panels. I regret that the Senate has seen fit to request us to vary the duty as it was fixed by this committee.
– It showed good judgment in that.
– I do not agree. I cannot support the request of the Senate, and I regret that the Minister has not seen fit to stick to the original proposal. I cannot see why he should accept one request and reject the other. I speak feelingly on this matter. In South Australia there are two large motor body-builders - General Motors-Holden’s Limited and T. j. Richards Limited. They have established up-to-date plant at great cost, and their employees form the majority of the workers in secondary industries in that State. They have spent very large sums of money in installing plant for the manufacture of motorbody panels, and I hope that the committee will do nothing detrimental to their interests.
– Some of the remarks heard in this debate are due to the fact that some honorable members do not appreciate the position in which the Australian motor body-building industry finds itself, owing to the demand for cars of various makes, due to the choice of the Australian purchaser. If panels suitable for British cars are to be made in Australia at a reasonable price, there must be an effective and consistent demand for cars of certain types, but the experience of the industry has been that (there is no such demand. The buyers do not confine their purchases to cars of two or three types, because, in almost any part of Australia, one notices many different cars made in Great Britain, in the United States of America, and on the Continent of Europe. It is not profitable for the local firms to press panels for bodies of certain types, because the necessary plant is most expensive, and the price that would have to be charged for the bodies would be so great that nobody could afford to buy thecars. This is particularly true in the case of certain makes of English cars, of which perhaps only 50 or 100 are sold in Australia in a year. If a millionaire started in the motor body-building business in Australia, and tried to supply bodies for British cars at competitive prices, he would soon find himself in the Insolvency Court.
I am satisfied that not one Australian workman would be injured in his employment, or would suffer any reduction of pay, as the result of acceptance of the Senate’s request. Statements which are not based on a knowledge of the true situation should not be made by honorable members when debating matters of such importance as that now under consideration. The trade relations between Britain and Australia should be as fair and free as possible. In view of the decision reached in regard to another item, to which I may not now refer, and particularly in view of the fact that acceptance of this request would cause no injury to the local industry, the committee should seize this opportunity to assist Great Britain. I should be pleased, indeed, if as many members of the Opposition as possible would visit the large motor body-building works in South Australia. I am sure that they would be told that those firms do not want the class of business to which the request applies. The committee is merely asked to give British exporters a concession to which they are justly entitled. We depend upon the British market for the sale of our primary products, and it is only reasonable to suppose that Britain looks for an increasing sale of British cars in Australia. If the demand for them were as great as it should be, there would be no such thing as American interests in the local motor body-building industry. The difficulty that has arisen will not be resolved by any action by Lord Nuffield’s organization or the Austin firm. The remedy is in the hands of the individual purchasers of motor cars in Australia, and, as soon as they switch over from American to British cars, we shall not hear arguments in this chamber as to the conditions under which metal panels shall be admitted into Australia.
.- The granting of the Senate’s request would not cause great harm to the local industry, if the matter is left in the hands of the present Minister for Trade and Customs (Mr. White) and the permanent . head of the Customs Department, provided that the Minister can assure the committee that he will not permit the free entry of these panels unless it can be categorically shown that the local industry is unable to supply the goods required. The statements made by- the honorable member for Wide Bay (Mr. Corser) are entirely inaccurate. He spoke of foreign companies operating in Australia, and importing almost a complete motor car into this country but he overlooked the important fact that the two organizations to which he referred - General Motors-Holden’s Limited, and the Ford Company - have now secured 64 per cent, of the Australian motor market for which approximately 80 per cent, of the manufactures in this country are made from Australian raw materials. Some years ago these companies found that it was impossible for them to operate effectively and efficiently by remaining- outside the tariff wall, and, unlike the British manufacturers, they decided that it was essential to come inside that wall and invest their capital in this country. They erected large and important works in various parts of Australia, and their plant is of such a nature that it would be extremely valuable in time of war. No workmen are more fitted than motor panel pressers for the manufacture of armaments. This aspect of the matter should not escape attention. These companies, having invested over £6,000,000 in Australia, have been able to capture over 50 per cent of the local market. They pay taxes and provide employment for over 12,000 workers.
The remarks of the honorable member for Cook (Mr. Garden) are worthy of consideration. He said that the two largest and most important companies which are selling British cars in this country have made enormous profits in Great Britain. They are not lacking in capital, and I see no reason why, when the opportunity presented itself, they did not do the same as the American companies which have been attacked by the honorable member for Wide Bay. Had they done so, they would have spent a great deal of money in Australia, and would have given employment to a large number of Australian workers. In 1927, the company manufacturing Morris cars had 26:5 per cent, of the British car market in Australia, but to-day that proportion has dwindled to 10.7 per cent. The year 1927 was a boom period, and an excellent opportunity then presented itself for the Morris company to establish its own works in Australia. Had it done that, the present difficulty would not have arisen. Let us consider the proportion of Australian labour and materials used in the manufacture of the cars referred to as “ American “.
One of the cars sold by General Motors-Holden’s Limited is the Vauxhall. in which the proportion of local manufacture is 79.5 per cent., and that of British manufacture, 20.5 per cent. This car, of course, is sold by an American company which has financial interests in Great Britain, and has taken over the British factory. It is selling in greater quantity on the Australian market than any other British car, because the company has been able so to improve its organization by efficient business methods that it has almost completely captured the British car market in Australia. If the firms to which the honorable member for Wentworth (Mr. E. J. Harrison) referred had done the same as General Motors-Holden’s Limited, and had established their own works in this country, they would have been able to compete with the Vauxhall, and their sales returns would have been very much larger than they are to-day.
I 3hall now deal with the Chevrolet car which most people, apparently,- consider to be entirely an American car. We find that of the price of this car 78.5 per cent, represents Australia, 9.35 per cent. Canadian, and only 12.5 per cent, foreign manufacture. These figures were given by the Minister for Trade and Customs (Mr. White) when speaking previously on this item. All honorable members, I feel sure, will agree that our ultimate object should be to have these cars completely manufactured in Australia. When we find that 85 per cent, of cars of some makes are now being made in this country, surely we have conclusive proof that such cars are Australian, and not American cars. I believe this fact is overlooked by many honorable members and a great many people in the community. For the information particularly of the honorable member for Perth (Mr. Nairn), who dealt- with profits, I .point out that not one penny of any profit made by General Motors-Holden’s Limited has been sent abroad. The honorable member claimed that this company was sending all its profits abroad, thereby placing further demands on our overseas balance. A great many arguments of this nature which have been advanced in this debate are not founded on fact. It can be proved conclusively that the greatest difficulty confronting manufacturers of motor bodies in Australia to-day - and particularly is this so in respect of cars of British make - is that they are unable to obtain the essential blue-prints from the overseas manufacturers in sufficient time to enable them to prepare their plants for production. If this difficulty were met, much of the present trouble, in the industry would be overcome. I believe that the Government has been unwise in accepting this request from the Senate, but in view of the assurance given by the Minister for Trade and Customs that he will watch the situation closely in the future, and will not be swayed by propaganda . from British companies, I do not think that any great harm will be caused to the motor bodybuilding industry in Australia.
.- I cannot understand the objection of some to granting this small concession to British motor manufacturers. If I had my way British motor panels would be allowed in free, and thus any monopoly existing in the industry would be broken up, and at the same time more employment would be provided in this country. I understand that further proposals will be brought down with a view to restricting imports from the United States of America in order to rectify our adverse trade balance with that country. This may easily start something in the nature of a trade war, which may have repercussions dangerous to Australia. Hern is an opportunity to decrease our trade balance with the United States of America in a ma imer, to which no exception can be taken ; let us give greater concessions under this item to British manufacturers and at the same time benefit those people who buy so much from us. I should have thought that honorable members would be pleased to accept this opportunity to give to Great Britain a ; little more of Australia’s trade. I shall not go into details in this matter, but, in reply to references made to myself by the Deputy Leader of the Opposition (Mr. Forde), 1 say that if I occupied his position I would not be sending invitations to all the manufacturers to tell me what they wanted me to do, or making myself a medium for the dissemination of their vicious propaganda.
.- L am astonished at the complete somersault of the Minister (Mr. White) in this matter. I remind him that, when speaking on this item on the 1st April, he justified his adherence to the recommendations of the Tariff Board, and said that the departmental officer who had inquired into complaints concerning delay in the supply of bodies for English cars had completely exonerated the company against which the allegations had been made.
The. .Tariff Board recommended these duties proposed under this item, and the Minister repeated to-day what he said in. his previous speech, that we should adhere to the board’s recommendations, adding that the members of the board were highly qualified to deal with this matter. On page 15 of its report, dated the 23rd January, 1935, the Tariff Board says -
The industry of panel-making has been consistently protected by prohibitive rates. This lias directly encouraged concentration of large capital expenditure in a few factories with an extraordinary concentration in South Australia despite the small consumption of car bodies in that State. To make a change from n prohibitive duty to exemption from ‘duty on British panels would be too drastic a reversal of the policy of the past seventeen years.
The Minister has failed absolutely to justify the complete somersault he has now made. It seems that he is merely truckling to foreign and freetrade interests. Much has been said about the profits made by Australian factories in this industry, but I notice that very little is said about Lord Nuffield, who boasts that he makes a profit of from 40 per cent. to 50 per cent. from the manufacture of Morris cars; or about the profits made by the Austin Company. Apparently, it is a crime for Australian companies to make a profit,yetwhen they operate at a loss, we are told that they are incompetent; but Australian companies give employment to Australian people, and we should encourage such companies in preference to monopolies who have their head-quarters on the other side of the world. Little by little the protectionist policy of the Commonwealth is being whittled away to satisfy the demands of the freetrade interests in this Government.
Motion (by Mr. Archdale Parkhill) put -
That the question he now put.
The committee divided. (The Chairman - Mr. Prowse.)
Majority . . . . 12
Question so resolved in the affirmative.
Question - That the requested amendment be made - put. The committee divided.
Ayes . . . . . . 33
Noes . . . . . . 21
Majority . . . . 12
Question so resolved in the affirmative.
Motion agreed to.
By omitting the whole of sub-item (e) and inserting in its stead the following subitem : - “ (e)parts of bodies enumerated in para graphs (1), (2) and (3) of sub-item (d), viz.:-
Pressed metal panels, other -
For bodies with fixed or movable canopy tops and bodies, n.e.i., per lb., British, 9d.; per complete set, intermediate, £37 10s.; general, £37 10s.
Senate’srequest (No. 8) -
Add new sub-paragraph -
As prescribed bydepartmentalbylaws, British, free.
– I move -
That the requestedamendmentbe not made.
I do not think it is necessary to debate this item again, as it covers the same ground as was covered by the previous item. The Government’s reason for wishing to reject the Senate’s request is that it is necessary to retain the ditty on fabricated panels to preserve to the Australian industry the maximum amount of work.
. -I have listened with a great deal of interest to the various champions of the British, American, and Australian motor industries, but it amazed me that not one speaker supporting the Government mentioned one word concerning the conditions of labour operating in any of those industries. The honorable member for Wide Bay (Mr. Corser) and several other honorable members were concerned about the enormous profits made by the British motor industry.
The CHAIRMAN (Mr. Prowse).Order ! The honorable member must confine his remarks to the item before the Chair.
– The Government has adopted a remarkable attitude in accepting the Senate’s request on one occasion and-
– Order ! The honorable member is not in order in referring to the preceding debate.
– Am I to understand that it is not in order for an honorable member to say anything in favour of the workers ?
– Order ! I ask the honorable member not to be insolent to the Chair.
– I did not intend to be insolent.
– The honorable member must confine his remarks to the item under discussion.
– I believe that the question whether motor panels should be manufactured in this country or whether they should be brought from abroad is not one with which Labour representa tivesare a great deal concerned, unless t hey include in the discussion the working conditions in the industry. If motor body parts are to be manufactured in this country under sweated-labour conditions, I do not think it is of any advantage to have the work performed here. As a matter of fact, on the plea of protecting Australian industries, too long have we protected personswho attack the conditions of Australian workers by sweating them. It has been said that the British motor firms are making profits of from 200 per cent, to 250 per cent. Probably that profit is being made on watered capital, on capital not invested in the industry, but the same statement could probably apply to the Australian industry. Holden’s Limited was mentioned, and it was also stated that it made enormous profits. If this company and similar companies are making enormous profits, why is it that this Government has not long ago taken some action to see that the workers get adequate recompense for the services they render ? Instead of that, we hear argument in this chamberas to whether we should do something to benefit the British or the American industry as against the Australian industry. There is not a great deal of difference. Employers whether they be in America, Great Britain or Australia impose on the workers abominable conditions and give most ridiculous rates of pay. No reference was made by the Minister to the conditions existing in these factories. If the Government and members of the Country party are sincere in their desire to help the British manufacturer as against the American manufacturer, there is a very easy way of doing it. A visitor from Trangie to Sydney the other day told me that the majority of the allegedly necessitous farmers who received the recent wheat bounty are buying motor cars with it. I suggest that in any future measures that placed Before this chamber for the granting of assistance to the primary producers, a condition should be incorporated compelling those who receive the assistance to buy British in preference to American cars.
I am not carried away by arguments concerning the directions in which our trade should be placed, but Britain itself has given a lead in this regard. It Has not worried much about directing trade to Australia except when it can buy cheaper here than elsewhere. For its butter requirements, it has signed treaties with Scandinavian countries, and other treaties have been made, because Britain has found them advantageous. Australia should take up the same attitude and buy where it is best for it to buy and trade where it is best for it to trade.
– Order ! The honorable member is now proceeding quite wide of the subject before the committee. He must confine himself to the item.
– I feel satisfied that at least some members of the Labour party will understand our position in this Parliament, which is made possible by those who work in industry, and that they will not be unmindful of the fact that the majority of the time of this chamber is taken up with discussing items which are of not great consequence to those men. We should try to introduce into the debate matters concerning working conditions, hours of labour and wages. These are matters of much more importance to the working men than whether it is to be an American or a British car that their more fortunate countrymen will drive.
Motion agreed to.
Item 376 (Bags, hand and purse).
Senate’s request (No.9) -
Amend sub-item to make it -
Bags, hand and purse, n.e.i.; Bags, sporting, travelling; Baskets and eases, picnic; Cases and companions, toilet, dressing, writing, travelling; Trunks, travelling; Satchels: Boxes and Cases, jewel, trinket, musical instrument; Purses, n.e.i., ad valorem.
Mr. WHITE (Balaclava- Minister for Trade and Customs) [9.431.- I move -
That the requested amendment be made.
The requested amendment substitutes the words “Baskets and cases, picnic;” for the words “Baskets, picnic;” and its purpose is to apply the same protective rates of duty on picnic cases as is already provided for in the bill in respect of picnic baskets. The request is fair and reasonable, and the Tariff Board approves. The amendment does not effect any alteration in the rates of duty in the sub-item under consideration.
Motion agreed to.
Resolutions reported; report adopted.
Customs Tariff, amended accordingly, returned to the Senate.
Bill returned from the Senate with amendments.
Bill received from the Senate.
Standing Orders suspended, and bill (on motion by Mr. Archdale Parkhill.) read a first time.
Debate resumed from the 14th May (vide page 1773) on motion by Mr.. Paterson -
That the bill be now read a second time.
– This measure is one of the most important that has been brought before us during these sittings. For five years the Government, in the face of definite knowledge that Australia’s security depends upon the establishment of a national oil supply, has placed every possible obstacle in the path of the development of the shale deposits of this country, and has allowed the position to drift from bad to worse. It now has the audacity to bring forward this measure, the title of which should be, “A bill for subsidizing overseas oil combines.”
Mr. SPEAKER (Hon. G. J. Bell).Order !
– The recent abortive royal commission which inquired into the oil industry, whilst unable to agree upon any specific recommendation, at least demonstrated the extent to which Australia is in the grip of the dominant American and British oil combines in this country. Anyone who has read the report of the the chairman of the commission, Mr. S. E. Lamb, K.C., particularly that portion which refers to the marketing structure in Australia, will appreciate the grave dangers that will arise from any action on the part of the Government- to tie the Australian oil industry to the overseas marketing organizations. Apart from the opinion expressed by Mr. Lamb, every honorable member knows how the major oil companies have treated those who have not been willing to fall into line with their desires in regard to the disposal of their products. Mr. Lamb found that there were five major oil companies operating in Australia - the Vacuum Oil Company, the Texas Company, the Shell Company, the Atlantic Union Company, and the Commonwealth Oil Refineries Limited. After hearing evidence, his finding was that there was a combination between the first four of the companies mentioned to suppress competition among themselves, prevent cutting of prices, and stifle competition ‘from outside sources. In support of that finding, Mr. Lamb referred to what was known as the “White Products policy” adopted by those companies, and cited no less than eighteen examples of concerted action, and the imposition of restrictive conditions to suppress competition from independent operators. Dealing with the Vacuum Oil Company, he pointed out that, of 750,000 shares, 717,569 are held in the United States of America by the Vacuum Oil Company, of New York, and that this company is the operating company in Australia of the Standard oil group. At the same time, Mr. Lamb pointed out that the Atlantic Union Company obtains its petrol from a subsidiary of the Standard Vacuum Company, which has acquired the shares in the Australian company, held by the American holding company. Of the 300,000 paid-up shares in the Australian company, 299,880 are held by the Union Atlantic Company, of Delaware. The Texas Company is also controlled from New York. The Texas Corporation of New York holds 3,990 shares issued in the Australian company.
I propose to deal later with Commonwealth Oil Refineries Limited, because that company is of particular importance to the taxpayers of Australia, on account of the part this Parliament is supposed to play in the conduct of its affairs. The proposal of the Government is, as I have said, really one to subsidize overseas oil combines, and is in line with the attitude of the Government towards local industry generally. In passing, I cite the air-mail contracts in respect of which Kingsford Smith and Ulm were brutally told that no .Australians need apply. Prom the speech of the Minister, in introducing this bill, it would appear that, in regard to the search for oil also, no Australian company need apply. Australian oil companies have been warned off, so that preference may be given to the overseas oil combine, whose primary objective will be the sale of their own products and the stifling of Australian industry.
– What has the air mail contract to do with oil?
– I shall show before I have finished that the same principle has a good deal to do with this oil proposition. Three other attempts have been made to do what is proposed in this measure; but the Minister conveniently made no reference to them whatsoever.
– That is not answering my question.
– As in connexion with the air mail contracts the hand of Imperial Airways Limited could be seen guiding the policy of the Government at every stage, so in this bill the moving spirit is a recent visitor to these shores - Sir John Cadman, chairman of the Anglo-Iranian Oil Company, which has a capital of £25,000,000, and in which the British Government holds a substantial parcel of shares. Sir John Cadman, when in Australia recently, visited the Newnes shale fields, and then sent out two Scotch experts to make a survey of the Australian shale deposits. If any offer has been submitted to the Government for the development of the shale resources of Australia, this House is entitled to know about it. It should be told exactly what negotiations have taken place, and what is really the policy of the Government in regard to shale oil. I should like to know, for instance, why in dealing with Newnes a limit has been placed upon the potential oil production, and why the exemption from customs and excise duties is to be limited to 10,000,000 gallons annually. Australia imports each year approximately 200,000,000 gallons of petrol, and yet the Government proposes to grant protection against overseas combines in respect of a paltry 5 per cent. of the annual consumption of petrol in this country.
– That will probably be the limit of production at Newnes.
– In 1928, Messrs. Chambers and Treganowan entered into an agreement with the Government for the development of theNewnes shale deposits; but they were unable to proceed with the development of the area, because the overseas oil combine cut off their supplies of crude fuel oil. In March, 1933, I moved the adjournment of the House in order to discuss the development of Australia’s oil shale deposits, and to direct attention to the part that Messrs. Chambers and Treganowan had played with regard to the production of oil in Australia. Information obtained from the official files laid on the table of the Library was then placed before Parliament. In asking the Government to relieve him of the responsibility of meeting his guarantee in regard to the development of the Newnes deposits, Mr. Treganowan said -
The failure to carry out the terms of the agreement of the 12th May has been due to many causes beyond my control, and I am now reluctantly compelled to appeal to you regarding my bond of £5,000, and expenses amounting to £3,000, and sincerely hope that same will receive your favorable consideration. In my efforts to establish the shale oil industry I have been confronted with problems which I did not contemplate, and in general the propaganda has been far too strong for me to combat. In addition to this, the action of the Shell Company in cutting off supplies of crude fuel oil has placed me in a very embarrassing position regarding my finance.
Apparently, the Government accepted the statement of Mr. Treganowan, for it relieved him of his responsibility in relation to guarantees. It suggested, later, that he should take up a certain number of shares in any new venture that might be promoted to develop the Newnes deposits. The point that I want to make is that, from the very beginning, the influence of the major oil companies in Australia has been sufficiently strong to defeat the enterprise of Messrs. Chambers and Treganowan, and also to challenge the efforts of the Government. Australia has already had experience of an attempt to secure independence in connexion with oil supplies, by the establishment of a company under an agreement to which the very group represented by Sir John Cadman was the other party. In 1920, the present Minister for Repatriation (Mr.
Hughes), who was then Prime Minister, submitted to Parliament an agreement that had been entered into by the Commonwealth Government and the AngloPersian Oil Company, now the AngloIranian Oil Company. Like the present Prime Minister (Mr. Lyons), he was brimming over with confidence that mineral oil would be discovered in large quantities. He referred to the fact that the Government was offering large sums as a reward for the discovery of crude petroleum in commercial quantities. I believe that the prize, as it might be termed, which was to go to any person who could obtain supplies of mineral oil in Australia, amounted to £50,000. The right honorable gentleman referred to the fact that Commonwealth Oil Refineries Limited was being formed for the purpose of establishing a refinery for the treatment of the oil when discovered, and thus freeing the Commonwealth from the grip of foreign combines. That occurred sixteen years ago. I invite honorable members to peruse the speeches which were then delivered and inform their minds as to the glowing prospects visualized of securing mineral oil in Australia. It was said that, in addition to dealing with the crude oil imported, refineries would be established for the treatment of supplies resulting from oil discoveries, the making of which was apparently confidently anticipated. .
On the 21st January, 1923, dealing with the same matter of the provision of capital for Commonwealth Oil Refineries Limited, Mr. Bruce, as Prime Minister, made the following statement: -
We have made arrangements to stimulate prospecting for oil. What would be theuse of discovering oil if we did not have the refineries here to deal with it?
A strong argument then advanced in support of the establishment of Commonwealth Oil Refineries Limited, was that these refineries were needed in Australia for the treatment of mineral oil when discovered. Mr. Bruce went on to say: -
Their establishment is going to be of very considerable benefit to Australia. The mere fact of the proposal is already having some effect on the price of oil in Australia.
Honorable members will realize, as I proceed, what effect the existence of Commonwealth Oil Refineries Limited has had.
Condemning combines in 1920, the present Minister for Repatriation referred to the fact that the world had been parcelled out for the supply of oil, and said that Australia was dependent on three companies - two American and one Dutch - for its oil supplies. He went on to say-
Until local oil was discovered in the Commonwealth, the agreement provided that crude oil up to 200,000 tons per annum will be supplied by the Anglo-Persian Oil Company. 1 repeat that that occurred sixteen years ago. Yet from that date Australia has not been able to secure internally supplies of mineral oil or flow o.il. Nor do I consider that this object will be accomplished under the present proposal of the Government. The Commonwealth Oil Refineries Limited became merely an operating company in Australia for the Anglo-Iranian Oil Company, of which Sir John Cadman is managing director. It has never been a national company-
– The Commonwealth holds over 50 per cent, of the shares in it. .
– It has never been a national company because it has not competed with the other major oil companies, nor has it ensured to Australian users supplies of petrol at a fair price. The agreement of 1920 provided that it must not, enter into or be in any way concerned with any commercial trust or combine, but should always remain an independent undertaking. Another provision of the agreement stated that the company must sell its products at such prices as were fair and reasonable. At page 112 of the report of the Petrol Commission, the quite definite statement is made that Commonwealth Oil Refineries Limited has acted in concert with the major oil companies in imposing conditions affecting its sales. Therefore, instead of being an independent company, and charging fair and reasonable prices for its products, it has slavishly followed the course laid down by the major oil companies. Despite the fact that, as the honorable member for Barker (Mr. Archie Cameron) has interjected, the Commonwealth Government holds 375,001 shares, compared with the 374,999 shares held by the AngloIranian Oil Company, four of the seven directors are appointed by the AngloIranian Oil Company, London, and only three by the Commonwealth of Australia. Both the managing director, Mr. Lloyd, and the acting-chairman, Mr. Byrne, are nominees of Sir John Cadman’s firm. Can any honorable member cite a single instance of the Commonwealth Oil Refineries Limited having adopted an independent policy in opposition to the other members of the oil combine in Australia? Had the Hughes Government in 1920 established a national oil company free from all external influences, as the Labour party suggested that it should, there is little doubt that to-day Australia would be independent in the matter of supplies of oil, and would be freed from the grip of the overseas combine. It must not be forgotten that when the Commonwealth Government forwarded a questionnaire to the oil companies in 1933, Commonwealth Oil Refineries Limited refused’ to disclose the information desired, and ita refusal was couched in terms almost identical with those employed by the other major oil companies. Without any hesitation whatever, it fell into line with those companies. Yet in 1920 the Parliament and the people of Australia really believed that when the necessary capital was supplied for the establishment of the company, it would be free and independent, and that an opportunity would be provided for a close examination of the ramifications of the industry. Because of its refusal to answer the questions asked, the then Attorney-General (Mr. Latham) set up the Petrol Royal Commission.
Australia still remembers what occurred on the Roma oil-field in Queensland, and is aware of the manner in which foreign companies have sabotaged every attempt to obtain mineral oil in Australia. A press cutting of 1927 reads -
Oil flowed at the rate of 100 gallons an hour from the Roma bore this morning. The Minister of Mines, Mr. A. J. -Tones, received an urgent telegram from the Government oil geologist, Mr. L. C. Ball, at 1 2.30 to-day, stating that a flow containing 50 per cent, oil had continued since 11 o’clock at the rate of 100 gallons an hour.
Little or nothing has been heard from that quarter recently. This bill, instead of making a definite move to establish a national organization under the direction of the Government’s geological experts, merely makes the offer of a loan of £250,000 to approved companies on a £1 for £1 basis for drilling purposes. The House is entitled to know the identity of the approved companies. That is a most important consideration in the light of the knowledge that we possess of the power that has been wielded, and the influence that has been exercised already in connexion with the search for this most important product. Obviously the major oil companies can rightly claim to have the necessary technical experts and financial resources to engage in such a task. If, for example, Sir John Cadman’s firm, through the Commonwealth Oil Refineries Limited, floated a company, the sub-committee would have no reason to refuse to it the subsidy. Yet, it is in the interests of the oil combine that flow oil in commercial quantities shall not be discovered in Australia: This bill does not advance the prospects beyond those in 1920, when Mr. Hughes was so confident, in view of the large reward offered, that within, a matter of weeks oil would be discovered. The Commonwealth Geological Adviser, Dr. Woolnough, after his tour of the United States of America, urged that early action should be taken to prevent in Australia the abuses which had occurred in that country. Yet it has been the practice of the Commonwealth Government to hand over its geological surveys to the officers of the Anglo-Persian Oil Company. That occurred in connexion with the work which was done in Papua and New Guinea. As this bill includes provision for the Mandated Territory, it is desirable that we should turn our attention to what has been reported from that quarter, and inform ourselves further from particulars which have already been given to this House. A parliamentary paper printed in 1920 dealt with the Papuan oil resources. I have made some extracts from it, to indicate that the Government of the day was. apparently, in line with the thought that, if success attended the efforts then being made to locate oil in Australia, our resources should not be handed over to any private company. In one paragraph, the following comment was made : -
The Government however, were desirous of retaining the field for exploitation by the Government alone.
There is no similar provision in the bill that we now have before us. The measure does not say that the arrangements in regard to the subsidy are such thai, whatever mineral oil resources are tapped, the Government proposes to exercise even some degree of control over them. There is to be an “open go” for those who happen to get in. The memorandum also stated -
Several of the world’s great oil corporations were desirous of obtaining concessions in Papua, and prosecuted a vigorous campaign with this object in 1918. After consideration of these and many other facts, the Government having definitely decided to retain control of all oil-bearing lands in Papua, and being most desirous of discovering oil therein for the purposes of the navy and for general use in Australia, and realizing that it was essential for the defence of the Commonwealth that there should be effective co-operation in time of war with the British Fleet, and that this could not be assured without oil supplies in Australia or its territories, decided that it would invite the co-operation of the British Admiralty to prospect for oil in New Guinea in a thorough and systematic manner.
Advantage was taken of the presence in London of the Prime Minister and Sir Joseph Cook in 11)18’, to open negotiations with the Imperial Government. After some preliminaries, in the course of which difficulties had to be overcome, the Imperial Governmentagreed to contribute up to a limit of £50,000, on condition that the “Commonwealth should contribute an equal sum. The British Government agreed to furnish the necessary geological and drilling staff, to he paid for from “the joint fund. By this agreement, the Commonwealth alienates none of its rights to the oil field in Papua.
I invite the attention of honorable members to this memorandum, because it appears to me that it was drafted in such terms as would ensure that none of the rights which the Commonwealth possesses in regard to oil iri Papua should in any circumstances pass to oil companies or oil combines in any other part of the world. It is a provision which I would have naturally thought - especially having regard to the important part that oil must play in the defence of Australia - would have impressed up,r the Government the importance of safeguarding the rights of the Commonwealth in respect of any oil that might he discovered as a result of subsidized exploration. What better instance of the power of the oil companies could honorable members desire than that revealed in the recent sanctions legislation adopted by the League of Nations? In this bill no safeguard of the rights of the Commonwealth, which is making available £250,000 on a £] for £1 basis, is provided. The memorandum proceeded -
The field of operation will he quickly extended in these circumstances, and it is certain that more definite results to the advantage of -the Commonwealth will be obtained in ji comparatively short space of time.
I make these observations because I am satisfied that there is flow oil in New Guinea and Papua, and because I believe that its development has been deliberately sabotaged. I honestly believe that the men who drew up this memorandum in 1920 were equally satisfied that oil was present; every line of the memorandum shows that they expected that results would be obtained shortly after they commenced operations.
I shall review briefly the history of the search for oil in Papua. Petroleum was first discovered in August, 1911, at Opa, by Mr. G. A. Thomas. The clue was followed up by Mr. Thomas and Mr. Lett, and similar phenomena was discovered in other localities. Their report was submitted to the local authorities, and that led to the actual discovery of oil in February, 1912, at Akanda, in the Gulf of Papua, ISO miles from Port Moresby. At first it was decided by the Commonwealth Government to permit private operations, but a little later, in 1912, the Government decided not to permit private enterprise to operate. Towards the end of 1912, two drillers were engaged to work the plants, and >n 1913, the services of Dr. Wade were obtained to investigate the geological features of the oil-bearing areas. Dr. Wade reached Papua in October of that year, and submitted his report in 1914. In 1915 he was appointed director of the oil fields; the boring plant of. the New Guinea Development Company was taken over by the Commonweal th Government, and further plant was pur- chased. Up to the 30th June, 1917, £11,052 was spent on four plants. With regard to the prospects of obtaining oil in Papua, one experienced witness who gave evidence before the Public Accounts Committee stated that they were distinctly good. The witness further added that, owing to the fact that oil, being liquid, is able to migrate, there ought to be as many people as possible trying to find it. The more people there are in New Guinea putting down bores and trying to develop the field, the more likely is the discovery of a big supply. The material supplied for work in connexion with boring was definitely faulty, as Dr. Wade, in his evidence stated, “ the material we are obtaining is far too shoddy”. Finally, an agreement with the British Government to explore Papua for oil was entered into, and it came into force on the 1st May, 1920. The area over which known oil indications are distributed in Papua is large. In 1918, several large oil corporations were desirous of obtaining concessions in Papua. The Commonwealth Government, having definitely decided to retain the field for exploitation by the Government alone, entered into an agreement with the .British Government to prospect for oil iu New Guinea. The Imperial Government agreed to contribute £50,000, on the condition that the Commonwealth Government contributed an equal sum. It was decided that the Anglo-Persian Oil Company should act as agents for the two co-operating governments, so that the work would be carried on with efficiency and vigour. The representative of the company arrived in Australia in 1919 and a staff of geologists followed. According to the agreement the AngloPersian Oil Company was to send out a fully equipped geological expedition or expeditions to explore the Territory of Papua for petroleum, and to take full direction and control of such expeditions, select sites for test drilling, and superintend boring operations, &c. The governments were to defray all expenses up to £100,000, but not in excess of that amount, unless specially approved of in writing. From the commencement of operations until the 21st April, 19-21, the Anglo-Persian Company had not put down any bores, but had decided to put down one at Popo.
The point which I desire to make is that the Anglo-Persian Oil Company took part in these early transactions acting as the agent for the two governments, undertaking to carry out the necessary drilling operations and other services which were required. Borne time elapsed before any result from the bores was published. Another aspect . also calls for close attention. I am satisfied that we must face the problem of sorting out those persons who, although employed by the Commonwealth’ on this work, may be subsidized from other sources. For example, rumours were current at the time in connexion with Dr. “Wade -
There are ugly rumours through the Northern Territory re Dr. Wade and oil operations. It is asserted that Dr. Wade is in receipt of the same amount from the Vacuum Oil Company not to find oil as he is from the Government to find oil.
– Who made that statement?
– These reports were circulated at the time. I remind honorable members that Dr. Wade is a member of the committee to advise the Minister in regard to distribution of the proposed grant of £250,000 to approved persons.
– Does the honorable member believe the statement about Dr. Wade?
– The fact cannot be overlooked that although for sixteen years it has been known on the best of authority that oil exists in Papua and New Guinea, nothing has been done to make it a payable proposition.
– Again I ask for the name of the person who made those allegations against Dr. Wade.
– These extracts were taken from statements published at the time in the Darwin newspaper and also from remarks of people who were genuinely interested in the matter. Again I stress the necessity for a proper sorting out of the persons who are associated with the search for oil, and similar transactions. The extracts continued -
Why is it that as soon as oil is struck, Dr. Wade packs up and makes for fresh fields, and why was it one American of his party left because it was a crook business? If this paragraph is untrue we will be glad to have you publish Dr. Wade’s denial.
I shall further corroborate these extracts with statements made in this House, following further disclosures on this matter in which the then honorable member for Darling (Mr. Blakeley) took a prominent part. The Minister may laugh, but he cannot laugh off the fact that already £500,000 has been spent by the Commonwealth in the search for oil, and not a bucketful has been found. He may also attempt to laugh off this further effort to spend £250,000; but I am not willing to accept as bona fide the many transactions connected not only with the search for oil, but with various other transactions in the industry which the royal commission was able to unmask. The former honorable member for Darling made some interesting disclosures in this House in regard to the search for oil in Papua and New Guinea -
Geologists were sent from Germany in 1913 to report upon oil prospects in German New Guinea. They thoroughly mapped out the country from a geological point of view, marking certain areas in black and white, as can be seen to-day. Extensive plans were laid down for pipe lines, quarters for workmen, and so in. An expensive plant was ordered, and up-to-date and modern buildings and plant were sketched out. The outbreak of the war, of course, prevented any further work being done by the Germans. Early in 1916, under the Australian regime, after the Commonwealth Government took over the territory, a party was sent out in charge of a Captain Mcintosh, to report upon oil occurrences in north-west German New Guinea, to prepare a geological map of the areas and so forth. Seepages of oil were located about ii miles inland from Smean, but the strata in this case was quite impossible from an oil-boring standpoint, being entirely volcanic. The party then proceeded to Matapau, a village approximately 50 miles from the Government station at Etape. Inland from Matapau on the Waiki River, and approximately 2 miles up the river, the smell of petroleum was distinctly noticeable 250 yards away from the seepages. When the pools’ were disturbed with’ sticks, the oil gas was very much more noticeable and the smell much stronger. In the opinion of competent geologists who have been there, as many have, including the whole of the AngloPersian Oil Company’s men, there is sufficient power in the gas which comes from the seepase to work the necessary machinery for’ the oil wells. This party, iii 1910, had no difficulty whatever in collecting many gallons of rich oil. They did so by scooping it off the top of the pools with coco-nut shells. Half a mile down the stream large oil globules are to’ be seen to-day. They were seen by the Anglo-Persian Oil Company’s officials.” hut were not even mentioned in their reports. Kerosene tins were filled with oil obtained at this particular seepage, and some of it, as I have already stated, was brought to Melbourne. In addition to the main seepages many others have been discovered over an area of about 100 square yards. Near these particular seepages there are evidences of the German camp still to be seen, as are the areas marked in black and white from time to time by the Germans.
These seepages, and the existence of petroleum, in these quarters, were known to the geologists of the Anglo-Persian Oil Company, but they made no mention of the facts in their report, although they had been commissioned by the two governments to investigate the possibility of the presence of oil. Mr. Blakeley continued -
When Dr. Wade was in Papua he sank several “ dud “ bores but the history of his venture is extremely interesting. I dealt fully with it when I previously discussed this matter in the House and I do not propose to go over that ground again. I shall content myself with saying that extraordinary breakages occurred in his inferior plant: that mud troubles occurred which could have been coped with easily by u competent driller, and that machinery troubles were frequent. For months on end his operations were suspended. Captain Macintosh brought back to Melbourne a certain quantity of . crude oil, which I daresay is still in the office of the Home and Territories Department- . Under the agreement between the Anglo-Persian Oil Company and the Commonwealth. .Government, several well-qualified geologists .were brought to Australia and ultimately sent to Papua. The Government, of course, paid for their upkeep. At the .time the agreement was made a gentleman named Langford was appointed Governments, overseer of the operations in Papua. He resigned soon afterwards, and was then .appointed to the staff of the AngloPersian Oil Company.
I have maintained that the oil interests did ..not desire to find any oil in the territory until it was convenient for them to do so. Dealing with the development of the “Anglo-Persian Oil Company at that time, Sir Charles Greenaway said -
We have one well in Persia with an output of 2,000 tons of crude oil per day, and the well is not yet giving its full yield, being partially shut down. We have many more wells in Persia equally as good.
I make that reference to show that we are not likely to find oil in Papua or New Guinea so long as we allow the exploratory work to be conducted by interested parties. The public of Australia will demand that action be taken apart -altogether from the major oil companies. Mr. Blakeley further 3aid-
Subsequently a party of geologists went to Papua. They included Mr. Lister James, a geologist of repute, who succeeded Dr. Wade as manager for the company; Messrs. H. T. Mayo, M.A., chief geologist; W. Gray, J. R. Bourchier, J. N. Montgomery, de Vertueil, and Haynes, all of whom were more or less competent geologists. With such a .staff one might have expected that a good deal of valuable work would be accomplished. Mr. James soon condemned the work that Dr. Wade had done, which meant that the Government had no useful results for the many thousands of pounds it had expended on ‘ that work. It was pointed out that eight wells had been sunk’ at enormous cost in an area of a little over one square mile. Not anything like that number of bores should have been sunk in a small area like that, and one wonders why they were sunk. Reports that I have show clearly that those geologists were not expected to fmd oil in Papua. So good were to be the conditions under which they proposed to undertake exploratory work that Messrs. Mayo and Montgomery intended to take their wives with them when they went into Gorman New Guinea. Lt was only after some one hod described the dangers of the journey that they decided to leave their -wives behind. Several of them visited the oil seepages to which I have referred, and then returned to Port Moresby. Soon afterwards some of them were withdrawn From the territory altogether. A party then went to Suein, where an anticline had been located on the Liniock River. One looks in vain in the reports of the Anglo-Persian Oil Company’s officials for any remarks with regard to this anticline, other than those of a condemnatory nature. The reports were always directly against those particular areas in which oil had been discovered or produced. Nevertheless, oil will no doubt be -won there, because the strata are favorable. This position has the advantage of being within easy reach of Suein village.
I wonder whether negotiations have already been entered into with the interests with which Sir John Cadman is connected, as was done in 1918. Mr. Blakeley proceeded to say -
The party then removed to another village, where valuable fossil evidence was obtained. The next area visited was the village of Ulau’, where oil conditions were favorable. An inland survey was then decided upon. This was an important and valuable expedition, because no white man had ever succeeded in penetrating more than a few miles from the coast. This inland survey lasted two months. Oil indications were favorable practically throughout the survey, and the country showed consistent oil horizons. After accurately mapping the country, and penetrating some 50 miles inland, the’ party returned by another route, and eventually reached the village of Suein. This terminated the. survey for the time being. The party then returned to Rabaul. Maps and reports were prepared, and, as previously stated. ,<>n unfavorable report was submitted to the Government, with the recommendation tha.t further surveys he undertaken.
Those remarks call for particular attention.
On the 13th March of this year, the Leader of the Opposition (Mr. Curtin) asked for information as to the total amount of money that the- Commonwealth Government had expended in searching for mineral oil, and he was furnished with the following figures : -
Thu total amount which has been expended by the Commonwealth in the search for flow oil is £078,290, of which £25,000 was contributed by the British Government. The expenditure is made up as follows: - Boring for oil in Papua (prior to 1920), £304,505; geological survey, Territory of New Guinea (prior to 192(1 ), £4.285 ; expenditure in State j and Territories from appropriation provided by Petroleum Prospecting Act 1920-1928, £207,000; special appropriation - Freney Kimberley Oil Company Limited, £2,500.
It is deplorable that no conclusive results have been obtained from the expenditure of that huge sum of money. In these circumstances, it is not likely that general satisfaction will be expressed with the intimation by the Government that further exploratory work is to be entrusted to interests connected with the major oil companies.
Mr. Blakeley referred in his speech, which I have already quoted, to the association of the Anglo-Persian Oil Company with Australia’s exploration of its oilbearing territory. He said -
The oil agreement was assented to on the 29th May, .1920.. It is now June, 1924, and only recently, after nearly four years have passed, has the company started to operate in Australia. They have had trouble with their tanks, one tank of oil has burst, and leakages have occurred from time to time. Apparently, the same maladministration or incompetence has taken place in connexion with the refinery at Kororoit Creek as at Papua. T realize that I have 711a.de a strong statement in levelling charges against the officers of the Anglo-Persian Oil Company. I have charged them with having wilfully withheld information from the Commonwealth Government, with having received money under false pretences, and with having taken every possible step to prevent oil being found in Papua. On a previous occasion I moved that a royal commission should bn appointed to inquire into the position, and I propose to adopt a similar course to-day. I do that because I believe that a scandal exists, and that rooney has been wasted.
Dr. Wade .is apparently being called upon again to do certain work for the Commonwealth, although his reports in 19.1.3 were not at all promising. He said at that time -
Indications of petroleum have also been noted in Dutch New Guinea and in the German portion of the island. The conditions in both cases appear to be similar to those existing in Papua, but little has been clone towards their development. The German Government, however, has recently had the question under consideration, and investigation by a petroleum technologist having experience in the Dutch East Indies is proposed.
Here is an important paragraph from his report -
The relation between the New Guinea oil belt and tha oil-bearing territories in other parts of thu East Indian Archipelago, i.e., Java, Sumatra, Borneo, &c, is a close one, geologically speaking. All these areas are situated on one connected line of earth movement. Personal examination of these other fields has shown me that the beds are much this same both in age and in nature as those in Papua.
There is, in my opinion, more likelihood of oil being found in Papua and New Guinea than in Australia. Dr. Wade is by no means optimistic regarding the prospects of finding oil on the mainland.
Certain references that I have made to this subject have been challenged, it having been asserted that my contentions have not been substantiated. I, therefore, refer honorable members to an extract from the report which appeared in the Age newspaper of the 25th November, 1924, of evidence obtained, by the Public Accounts Committee on the previous day. The witness was Mr. A. Gillespie, a member of the staff of the Anglo-Persian Oil Company, who had been engaged in oil prospecting. The report reads as follows : -
The chairman (Mr. Fenton, M.P.) : The operations of the company seem to have been peculiarly conducted right from the jump. The men have- arrived on the field with everything they required, and have then found that some important part has been left behind. The outsider wonders why all these delays take place.
Witness: They have been legitimate delays.
Senator Kingsmill: There has been considerable doubt cast upon the intentions of the Anglo-Persian Oil Company in regard to their boring in Papua. I would like your opinion nf the following extracts from Hansard of 21st June, 1.923 : - “ While the company has one gallon of oil to sell in Australia, their officers operating in Papua will not find oil.”
Witness (hesitatingly) : Well, what can I say about a thing like that?
The Chairman: Speak freely.
Witness: If there is an insinuation there that we have deliberately tried not to find- oil, then that is not true.
Senator Kingsmill: I want to know why the Anglo-Persian Oil Company is conducting these operations for nothing.
Witness: 1 think it is a desire on the part of the company to find oil in strategic positions. It is acting Imperially. That is my opinion.
Senator Needham: In view of the situation atPopo, do you think the Commonwealth Government is justified in expending still further money?
Witness : Yes.
You say that the work of the Anglo-Persian company is actuated by Imperial interests? - I said I thought so.
Would it be in the commercial interests of the company to assist in the creation of a rival? - That is a matter I could not answer very well.
Do you say the Commonwealth Government should have implicit trust ill the company? - Well, I think that is about the size of it.
I am sure that I have said sufficient to show that strong evidences have been discovered of the presence of oil in New Guinea. But is the experience of 1920 to mean nothing to this Government? Does it propose once again to allow the investigation of our oil resources to be made by interested parties? It appears
Dr. Wade, who is to be a member of the sub-committee to control the expenditure of the £250,000 to be made available under this bill for the search for oil, stated, in a report which he made to Parliament in 1925, following his investigations in New South Wales, that he was of the opinion that, in the long run, kerosene shales would be more profitable to Australia than oil wells, especially if only small wells and limited pools were discovered. He added that there was not oven any certainty that pools would be discovered. I cannotsee, in these circumstances, the wisdom of appointing Dr. Wade a member of a committee to advise whether drilling for oil shall be subsidized or not.
When the government of the day made a proposal in 1924 to encourage the search for oil, the right honorable member for North Sydney (Mr. Hughes) said that he did not doubt for a moment that oil would be found in the Mandated Territory of New Guinea. He added - he had had the positive assurances of men who had been there - Australian officers who had been on the borderland of the German and Dutch territories. Having these positive assurances, supported by strong geological evidence from Wade, the Government did not hesitate to spend money lavishly in the hope of finding it. But none was found. While it may be and probably is merely a coincident that so many accidents had occurred in boringfor oil, nevertheless it was a fact that in not one of the thousands of bores sunk for water in this country - as deep as theRoma bores - had the same thing happened as had happened at theRoma bore.
The then honorable member for Barker, Mr. Malcolm Cameron,said at that time -
It is remarkable that so many accidents; have happened in connexion with these boring operations in the south-eastern portion of South Australia. Four or five wells have been sunk, but only in one instance has granite been reached, and that at a depth of 4,500 feet. Accidents occurred at all other bores when a depth of about 2,000 feet was reached.
It is remarkable that accidents always occur when boring for oil is being carried out.
– And a Yankee is nearly always on the job.
– It is certainly a most unsatisfactory state of affairs. It will be quite useless for us to expect parties interested in the major oil companies to find oil for us. We shall live in a fool’s paradise as long as we hope for success by these methods.
The Minister for the Interior in the course of his speech on the bill discussed the possibility of effective work being done at Newnes. I should like to know whether the Government proposes to look once more to Sir John Cadman and his associates to investigate this proposition. Has there been a hold-up in connexion with these negotiations? If so, the House is entitled to some information about the matter.
– What did the Public Accounts Committee have to say about that project?
– I have not the report of the committee.
– A report was issued by that body.
– The experience of Messrs. Chambers and Treganowan proves definitely that local private companies will meet with every conceivable form of opposition if they attempt to develop the Newnes deposits. These shale deposits, I contend, are a national asset. On the evidence of the Government’s geological advisers, they represent our greatest possible security for national defence. The Government has furnished no excuse for the contemplated alienation of these deposits. I could speak at some length on this phase of the problem, but I know that other honorable members wish to take part in the debate, and some, perhaps, are more competent than I to deal with it. I would? however, emphasize that many countries, including Japan, Russia and Germany, have taken practical steps to develop their shale and coal resources.
It is known that the Attorney-General (Mr. Menzies) has discussed this scheme in London with Sir John Cadman. This House is entitled to know exactly what look place at that discussion, and where we stand. In addition to expenditure already incurred, the sum of £250,000 is to be made available under this bill for distribution amongst approved companies that engage in the search for flow oil. We who have taken some interest iri this subject for many years declare that in our proved shale and coal areas we have a national asset, and we complain that the Government is doing nothing to exploit it in the interests of the Commonwealth. It certainly is no satisfaction to unemployed miners who are looking to the development of the local oil resources to return them to industry, to be informed that what happened at the London conference between Mr. Menzies and Sir John Cadman was of a confidential nature. If the Government is prepared to spend £250,000 on a purely speculative drilling search for flow oil, it should not hesitate to provide the amount recommended by the shale oil investigation committee as the sum required to place Newnes on a commercial bash. Surely an extensive plant, reported to be worth a million pounds, is not to be handed over, for a paltry £34,500, to this overseas oil combine, which has no intention whatever of developing the Newnes shale deposits. Australia does not wish this national industry to be operated and controlled by overseas interests. It does not wish to have a repetition of its experience with Commonwealth Oil Refineries Limited, a concern in which the Commonwealth holds the majority of the shares, but which has the audacity to tell the Government to mind its own business, when it requests information regarding the company’s finances and sales policy.
Millions of pounds are being expended on defence, every penny of which will b» absolutely wasted unless we can ensure for this country an adequate supply of oil from local sources. [Leave to continue given.]
Will anyone contend that this Government has even surveyed the oil position to ascertain how long its existing stocks would last in the event of a war? Even more nebulous is its attitude to the development of a national scheme for the production of oil from coal. Here again Australia is at the mercy of an overseas combine, insofar as the hydrogenation process is concerned. Imperial Chemical Industries Limited has now been in active production at Billingham-on-Tees for nine months, and the product is on the British market. At the last annual meeting of that company, the chairman referred to the undoubted success of the process, and stated that the estimated cost of the plant was £6,000,000. Such a plant would make Australia selfsufficient in oil supplies.
Mr. E. A. Cooper, of J. and A. Brown Collieries, after a two months’ tour of the United States of America, declared recently that American production of oil from coal would, within a few years, equal the production of flow oil. The Standard oil group has expended £6,000,000 in the acquisition of a German process based on low temperature carbonization. If the Standard Oil Company of the United States of America and the Northern Colliery proprietors of New South Wales are satisfied that the production, of oil from coal is a commercial proposition, why has this Government hesitated for so long to adopt this process?
In some quarters it is stated that Imperial Chemical Industries is so linked up with the oil combines, including the Anglo-Iranian Company, that it cannot give licences for its patents to countries: where oil from coal is likely to enter into competition with imported oil. This is a fairly logical deduction from OU.reading of recent events, and if it is truethe sooner the people of this country are: informed of the exact position the better:. But why should the production of oil from coal be restricted to the hydrogen ation process? In Great Britain low temperature carbonization has been proved! to be commercially sound, and for the last six months British motorists have been able to fill their tanks with petrol produced by this process:
If the Standard Oil Company considers it economic to expend £6,000,000 to develop the greatest rival of its own product, the project should be infinitely more attractive to Australia, which is wholly dependent upon imported petrol and fuel oil. The adoption of. this process in Australia would make available all the valuable by-products of coal for subsidiary industries, and would eliminate the high cost of overseas transport. During recent months, Italy has embarked upon an intensive programme of power fuel production by utilizing the latent resources available to it, and by the end of the Abyssinian war, was so independent of external oil supplies that it was actually able to suspend the importation of petrol.
In its last budget, this Government voted £7,352,000 for defence expenditure ; yet it refuses to take the only practical defence measure possible by establishing a nationalized oil industry. The Government is always investigating the problem, but it does nothing. For the last five’ years, it has been investigating the lowtemperature carbonization process, but, so far, nothing has been done. On at least two occasions, it has sent its fuel adviser, Mr. L. J. Rogers, abroad on missions to investigate the process, but always there has been the plea that n? yet it is in the experimental stage, despite the fact that other countries, which I have mentioned, have established this industry on a commercial basis. Now the Government proposes to send Sir David Rivett abroad to have a look at BillinghamonTees. I have no doubt that, when he returns, we shall be told that Imperial Chemical Industries is not yet satisfied that its £6,000,000 plant is beyond tho experimental stage. Meanwhile, instead of getting on with the job of develop iour shale deposits, and providing work for thousands of unemployed miners and other workers who have been looking in vain to this Government to redeem its pre-election pledges, this Parliament is to be asked to vote £250,000 to subsidize wild-cat proposals to put down bores in a search for flow-oil that may not exist
Even if success were to attend any of tin.’ schemes that might .be put into operation under this bill, what safeguard is there that the oil would not be the plaything of foreign interests? In our view, the Government’s proposal is not a policy - it is a national tragedy.
The Minister for Development (Senator A. J. Mclachlan), in a statement issued on the 25th September last, said that he was in receipt of information from the United S’tates of America predicting the probability of an oil shortage -in that country in from five to eight years. “ It might be that in a few years to come, our great oil-carrying coal reserves will come into their own,” declared the Minister in commenting on that statement. Because of this Government’s neglect to take practical measures to develop our shale deposits, there is grave danger that in five years’ time, or perhaps sooner, Australia will still be without its own oil supply, which is the greatest essential of modern industry, commerce, and war.
The Government should drop these wild-cat schemes ‘with which it has been toying for so many years. It should cut itself adrift from foreign combines, and settle down to the big job of establishing a nationalized oil industry in this country. In the agreement between the Commonwealth and the Commonwealth Oil Refineries Limited, for the establishment of a refinery in Australia, there is provision that, at the expiration of fifteen years from the date of the agreement, the Government has the right to take over and control the business of oil refining. I submit, therefore, that as the fifteen years’ period has expired, it is now within the power of this Government to assume control of the refinery business, which would still be necessary even ‘f flow-oil were discovered. If the Government does this, we .shall not again be left to the mercy of foreign interests. We, on this side, are not satisfied with the Government’s proposal. We contend that steps should, without further delay, be taken to develop our known oil resources at Newnes, and on the northern coalfields.
In conclusion, I express the hope that, in the light of our experience with the major oil companies, all honorable members who take part in the debate on this bill, will, if necessary, disregard the niceties of discussion and speak quite frankly. If they do this, I am sure that they will say harder things of the Government and its policy than any words which I have uttered to-night.
.- - I listened with the closest attention to the honorable member for West Sydney (Mr. Beasley). Usually, I regard the honorable gentleman as being meticulously fair in his criticism, so it was with regret that I heard him direct such serious charges against Dr. Arthur Wade, who, he declared, was at one time prepared to take payment, not only from his employer, the Commonwealth Government, but also from some of the major oil companies. I was the more astonished when I learned that his authority for attacking Dr. Wade was an article which appeared in the Darwin Times newspaper.
– It was well substantiated afterwards.
– I should say that any charge based on the authority of a newspaper published in Darwin would require to be well substantiated before, it was accepted by any honorable member.
The Government is to be congratulated upon its renewed determination to investigate the oil resources of Australia with a view to making this country independent of outside supplies. The honorable mem ber for West Sydney (Mr. Beasley) referred to the expenditure, which has been incurred up to date in the search for oil in Australia. This country is entirely dependent on outside sources for its supplies of mineral oil, particularly those fuels suitable for use in internal combustion engines. This position is most unsatisfactory in times of peace; in time of national emergency, it is a positive menace. Therefore every effort should be made to locate supplies in Australia or the territories under our control. Some of my friends, who have studied this problem closely, tell mc that we are not likely to discover flow-oil in Central Australia - they base their opinion on the fact that thousands of artesian bores have been put down, some of them thousands of feet, without passing through geological structures favorable to the conservation of oil - but th?A. there is some probability of success in York Peninsula or in Papua and New Guinea. Of course there is the probable world-wide shortage of petroleum to which the Minister referred. Only this morning we read in the newspapers that there is grave concern about the oil wells in Borneo. In the United States of America there has already been discussion as to the desirability of prohibiting exports of oil from that country, on account of the probable shortage. Australia’s increasing dependence on oil imports from abroad is shown in a striking way by a study of the official figures of the imports of petrol during recent years. The figures covering the period 1910 to 1935 are -
It is obvious that this increase of liquid fuel imports is the accompaniment of a corresponding increase of the number of motor vehicles and tractors. The increase of the number of Australian registrations of motor vehicles, excluding motor cycles, from December, 1915, to June, 1935, was -
As the number advanced so the demand for petrol increased. The honorable member for West Sydney (Mr. Beasley) referred to the methods devised for the development of local supplies of liquid fuels, to the discovery of local oil pools,, the production of oils from coal and shale, and the manufacture of power alcohol and synthetic fuels. In efforts to discover flow oil in Australia, a good deal of prospecting has been carried out by private enterprise without much success, and in the past governments have actively interested themselves in the search. The figures I have been able to obtain, however, donot coincide with those quoted by the honorable member. The Commonwealth Government spent over £300,000 ina boring campaign in New Guinea, and also offered a reward of £50.000 for the discovery of oil in Australia in commercial quantities. This; offer was afterwards withdrawn, and in its place the Government authorized the expenditure of £100^000 on subsidies to State governments and private enterprise for boring on a £1 for £1 basis. In summing up the possibilities of the success of the search for oil in Australia, the Joint Parliamentary Committee on Public Accounts in 1925 stated that the concensus of geological opinion concerning the prospect of flow oil being discovered in commercial quantities was unfortunately not very favorable. This opinion was perhaps, unduly pessimistic, and in no way relieves us of the responsibility for undertaking the most complete investigation into this all important matter. In quoting the remarks of the Government Fuel Adviser, Mr. L. J. Rogers, regarding power alcohol, the Minister was not encouraging to those engaged in that industry to-day. In fact, he gave them what amounted to a slap in the face. In reply to Mr. Rogers, one might recall that every country in the world of any importance has gone in for the production of power alcohol realizing that the natural oil wells must give out. We know from our own experience how the flow from artesian bores has diminished. The Government of Queensland found it necessary to bring in legislation to restrict the flow from artesian ‘ bores when it became obvious that something was happening in the bowels of the earth to cause a diminution of their flow.
The distillery at Sarina engaged in the production of power alcohol, is producing 500,000 gallons per annum of 99 per cent, pure alcohol; its full capacity is perhaps 1,250,000 gallons. I understand that the trouble at Sarina is a shortage of the necessary raw material in the vicinity of the distillery. When the distillery was first established some years ago molasses was a drug on the market, but subsequently farmers realized its value as a fertilizer and the sugar mills found that by burning it with gas they could operate their plants more cheaply than by using coal and wood. The result is that the distillery at Sarina is now compelled to draw its raw material from the Ayr district, making its cost, with freight added, excessive. Does not the Government consider this industry worthy of assistance? I have in my pos- session a chart showing the many uses to which power alcohol may be put, which I shall be glad to show to any honorable member who may be interested to peruse it. Recently I read a most interesting leading article in the Sydney Bulletin referring to power alcohol and the legislation now before the House. I quote from it this passage: -
Nothing is said about power alcohol. Germany uses about 80,000 tons per annum and would use more if it had the areas to grow the produce from which power alcohol is made. Virtually, every European country ekes out its petrol supplies by prescribing an admixture of power alcohol with mineral fuel. Queensland has followed suit, so far as the Constitution allows. The United States of America makes a quantity of power alcohol equal to Australia’s petrol consumption.
We should not overlook the fact that the conversion into power alcohol of starch products, such as cereals, tubers, fruits and other plants, would result in the settlement of great numbers of people on small areas of land to grow these crops for the distilleries, and would provide at least, a partial solution of the migration problem. I candidly confess that I am disappointed with the Government’s attitude towards the production of power alcohol. We can hope, however, that, as the result of the increased activities which will inevitably follow the passing of this legislation, oil supplies will be found in our island continent or in our territories. Given bounteous oil wells, what else would Australia need in addition to strenuous and well-directed human endeavour, to enable it to move on towards the greatness to which it is undoubtedly destined.
.- Recently, I addressed a question to the Minister for the Interior (Mr. Paterson) in regard to a report which was said to exist in connexion with the production of power alcohol in Australia, and was informed that the Commonwealth Fuel Adviser, Mr. L. J. Rogers, had presented a report on that subject. Mr. Rogers’s report is certainly a peculiar one. I endorse the remarks of the honorable member for Lilley (Sir Donald Cameron) regarding the power alcohol plant at Sarina. Since it has been erected, that plant has never been worked to full capacity, not because of a shortage of molasses, but because the Government and the oil companies would not use the power alcohol. ‘ Those operating the plant desired that from 10 per cent, to 15 per cent, of power alcohol should be added to benzine, but that was refused. I appreciate the point made by the honorable member for Lilley that molasses is a very valuable manure; the canegrowers in Queensland have recognized its value for that purpose. In fact, one of the difficulties of the sugar industry is the increased production due to the greater fertility of the soil, following the application of molasses. Some time ago, the Government of Queensland passed legislation with a view to compelling users of petrol in that State to add 15 per cent, of power alcohol to their benzine; but the Vacuum Oil Company disputed its right to introduce that legislation and an injunction was granted by the High Court restraining the Government from proceeding along those lines. The result is that this spirit is not being used so extensively as it might be. I suggest that if this Government, by some means, can compel the use of power alcohol as an addition to benzine, the plant at Sarina could be put into full operation. As the plant has not been worked to full capacity it has been impossible to secure figures relating to minimum costs of production. The Commonwealth can, by negotiation or otherwise, arrange for the greater use of alcohol, .and it will not be asked to pay a subsidy or bounty. The manager of the plant informed me that it has never been suggested that financial assistance is necessary to enable it to carry on, but, at the same time, he pointed out that if a percentage of power alcohol were used with benzine it would obviate a considerable importation of petrol from abroad, and would conserve the supplies within this country. It is problematical whether now oil exists in Australia. Some geologists have condemned Roma, and others have said there is oil there; some have said that there is oil in the Carnarvon Ranges. and others have said there is not. Geologists differ as do doctors and lawyers. But there is no doubt that benefit would accrue from the greater production of power alcohol. I was astonished to hear the Minister say that a report had been presented on this matter. The only reference made to the production of power . alcohol in that report was to alcohol produced from grain, chiefly wheat and barley. Mr. Rogers stated that, in four or five years, the price of wheat would rise to 4s. 6d. a bushel, and that it would not fall below that figure. I do not know upon what that assumption is based. Certainly, the wheat-growers would be happy if they were assured of a price considerably less than that. With wheat at 4s. 6d. a bushel, the production of power alcohol from grain would be commercially impossible. As I have said before, there is no shortage of molasses. If the Government had given the assistance sought by the enterprise at Sarina, by negotiating with the oil companies an agreement for the admixture of power alcohol with benzine, the difficulty in regard to molasses would not have been so great. When the health authorities prohibited molasses from being dumped into the river, because it was polluting the water, and destroying fish, other means of disposing of it had to be sought. It was then found that it was particularly suitable as a fertilizer, and is now used extensively for that purpose. I do not think the tank at Sarina ha3 ever been emptied, but the principal difficulty appears to be in arranging for the more extensive use of power alcohol in conjunction with benzine, largely owing to the opposition of the Vacuum Oil Company and the Shell Company. Shellkol is used as a liquid fuel for motor cars and trucks, and I have been informed that its pulling power is greater than that of pure benzine.
– It is also beneficial in cleansing internal combustion engines.
– I understand that it has that beneficial effect. Shellkol i3 used, not only in light cars, but also on the heavy buses which proceed to the tablelands, carrying 40 and sometimes 50 passengers. A mixture containing 15 per cent, of power alcohol has given most effective service, and would be used more extensively than it is to-day, but for the fact that the major oil companies are endeavouring to prevent its use. I do not know if an investigation has ever been conducted by the Government in regard to the economic possibilities of this product. A few days ago the honorable member for Moreton (Mr. Francis) was informed that Dr. Rivett is to inquire further into the use of power alcohol during his forthcoming visit overseas, but I suggest that if further investigations were conducted in Australia greater advantage would result. Negotiations should be opened with the fuel oil companies in Australia, with a view to entering into an agreement to provide that power alcohol be used more extensively, at least in Queensland. If that were done, I am satisfied that the value of the product as a fuel would be readily realized, and it would be used extensively.
– Thi3 bill, which contains only a few clauses, may be of extreme significance to the Government which places it upon the statute-book. At this juncture, I am not so much concerned with what has occurred in attempting to discover flow oil in Australia - I admit that it is rather a sordid story - as I am with what the Government proposes to dp. Soon after I became a member of this chamber, I was impelled to inform the Prime Minister (Mr. Lyons) in writing that if the Commonwealth Government had exercised as much energy in attempting to discover oil in Australia as other interests had in preventing its discovery, we should be in a much better position than we are to-day. The first point that we should get definitely into our minds is that the Commonwealth is finding £250,000 to subsidize persons who, of course, include companies; but the Government has no control over companies excepting insofar as they operate in territories under the control of the Commonwealth.
– The Government can stipulate conditions.
– But the Government cannot stipulate conditions which conflict with the rights of the States. The Commonwealth Government cannot lay down the conditions under which a search for oil will be conducted in the States, but the Parliaments of the States concerned can do so. In this connexion we notice a most remarkable set of contradictions. During the last few days I have taken the trouble to peruse the State mining acts, and to determine their bearing upon this measure. In the first place the definitions of petroleum in State acts do not harmonize. The acts of Queensland and New South “Wales give entirely opposite definitions of “ mineral oil “. For instance, the Queensland act provides that mineral oil does not include flow oil, and the “Western Australian act says that it is flow oil and nothing else. Moreover, the conditions under which a search for oil can be conducted in the States vary. The Queensland Government has amended the law in respect of the discovery of petroleum on several occasions during the last fourteen or fifteen years, and on one occasion, it came to a remarkable decision. I do not say that it was wrong, but it was a courageous act for any State government to perform. Notwithstanding the law in operation at that time, the Queensland Parliament declared that oil discovered beneath the surface - although the land may have been alienated - was the property of the Crown. Consequently Queensland is in an excellent position to lay down conditions under which the search for oil should be conducted in that State.
– That has been done in New Guinea and Papua.
– I conducted a diligent search, but I did not discover that. That is one of my grievances.
– The oil is vested in the Crown.
– The Queensland act allows foreign companies to engage in the search for petroleum in that .State, but in some of the other States that is not permitted. One of the conditions which the Commonwealth Government should impose under this bill is that no foreign company shall be allowed to search for oil in Australia. The ownership of oil is bigger than Commonwealth or State politics - it involves international politics. It may have interesting repercussions upon a Commonwealth government weak enough to allow oil to become the property of private companies, or certain international vested interests. The ownership of oil should be vested in Australian citizens.
-To enable them to become millionaries.
– As a general rule the discovery of flow oil results in men becoming millionaires. My main objective in stressing the importance of this subject is to ensure that, if men are to become millionaires from the discovery of flow oil, they shall be Australian, and not foreign, millionaires. It would appear from the Mining Act of New South Wales that the Government of that State does not take much interest in searching for petroleum. The same can be said of South Australia, and, so far as I am able to discover, the Victorian law is practically silent on the subject. The Western Australian act contains a number of stipulations, which are as remarkable as those contained in the Queensland act. The Western Australia Government has declared that the Crown shall, at any time, have the right to search for mineral oil by agents, officers and workmen, and to conduct all operations necessary for obtaining, refining and disposing of mineral oil. It also has the power to enter leasehold land, to reserve land, and to enter upon freeholds to search for mineral oil. Another interesting point arises, particularly in view of the proceedings recently terminated before the Privy Council in London, and of the attitude adopted by the Government of Western Australia in appearing in that case against the Commonwealth. The State act also provides that no person who is given a licence to drill for crude oil, and to deal with the products of oil in Western Australia, shall have the right to send any of that crude oil outside the hounds of Western Australia. I do not know how the Western Australian Government proposes to reconcile that provision with section 92 of the Commonwealth Constitution.
– The law is that the State cannot restrict interstate trade.
– The act provides that crude oil shall not be shipped from Australia unless on the written authority of a Minister of the Crown, who shall be the Minister for Mines. It is further provided that if oil be discovered in Western Australia, it shall not be refined outside of Western
Australia except with the consent of the Minister for Mines, who shall also decide where it shall be refined. When such conditions operate in the States we are entitled to ask if the Commonwealth Government has taken into consideration the position which might arise from the spending of money under the terms of this bill. It appears that we are permitting one man to stipulate the terms and conditions under which the search for oil shall be conducted. These conditions should’ be more specifically drawn up and determined eventually by the Commonwealth Parliament. We should not place any Minister in what may eventually prove to be the invidious position of granting conditions which may later be condemned, or even rejected, by Parliament. That would hardly be fair to the Minister concerned.
– That applies to all laws.
– I do not wish to be drawn into a legal argument with the honorable member for Batman (Mr. Brennan), because I know that it would be extremely one-sided. Another point which cannot be ignored is that which arises in connexion with royalties. The State laws affecting royalties also vary considerably ; they range from 1 per cent, to 25 per cent, of the gross profits, as is the case in Queensland.
– It is 10 per cent, in New Guinea and Papua.
– That may be satisfactory from the view-point of the Commonwealth; but this bill is not confined to territories under the control of the Commonwealth. It will apply to companies which will want to carry on operations within the States. I think that a fuller explanation could have been given regarding what constitutes an “ approved company “ under the bill. I do not wish to make statements that I am not in a position to prove, but my opinion is that there is a good deal in what the honorable member for West Sydney (Mr. Beasley) said regarding the methods of some of those interested in the search for flow oil, and some of the incidents of which he com- plained have been taking place in my own electorate: Certain happenings in connexion with the search for flow oil in my district have left a nasty flavour in the mouths of the public. Some men who have put thousands of pounds into these operations, and who are still firmly convinced that flow oil exists in Australia, hold the opinion that they did not receive a fair deal from those engaged in the search. There is much suspicion also in the country districts with which I am acquainted regarding the real objective of Commonwealth Oil Refineries Limited. The taxpayers are not at all satisfied that this company is what it appears to be, and they have been strengthened in their belief by some of the statements in the report of the Royal Commission on Petrol.
– It is -a growing opinion.
– It is. There is a case to answer, but so far Commonwealth Oil Refineries Limited has done little to prove that it is an institution likely to be of any real benefit to Australia. My personal opinion, as one who knows nothing about oil other than the buying of it in small quantities, is that if Commonwealth Oil Refineries Limited, with its vast resources, were really anxious to discover flow oil in Australia, there would have been no need for this bill. The search would have been going on systematically for years past. No geologist in the world, no matter how good he is, can say positively what is to be found nt a depth of 5,000 or 6,000 feet below the surface of the earth. He can form certain general conclusions from surface indications, but before anything definite can be established, it is necessary to put down a bore. So far that has been done in only a few instances, and then in a haphazard and half-hearted manner. I believe that it is necessary to put down a number of SCout bores in order to enable the geologists to obtain exact information regarding geological formations. From the information so obtained, they finally decide upon the best place to begin the actual boring operations for oil. Preliminary work of this kind could very well have been done by an organization like Commonwealth Oil Refineries Limited, but until the representatives of the Anglo-Iranian Company interested themselves in oil research, in Australia,
Commonwealth Oil Refineries Limited was content to carry on merely as a minor refining company. If it had not been understood at the time when Commonwealth Oil Refineries was founded, that it would undertake the search for flow oil in Australia, I do not think that Parliament would ever have consented to put public money into the enterprise. Unless Commonwealth Oil Refineries Limited undertakes this work, its inauguration was without point or purpose, and represented a waste of public money.
A great deal has been written regarding the search for oil in various parts of the world, and the manner in which oil discoveries have been exploited. I do not believe everything I see in print, but so many damaging statements have been made against those who control, or have controlled, the oil resources of the world, that had they been untrue, action would have been taken long ago against those who published them. We must conclude, therefore, that there is truth in the charge that unscrupulous methods have been employed by various interests to obtain control of oilfields. No vote of mine will be given to make the Territories of the Commonwealth or the States the scene of that kind of villainy that has been practised on the American continent, in parts of the East Indies and elsewhere. It should surely be possible to set up an organization under proper control to search for oil, and to distribute and refine it when found.
It is not necessary to impress on the members of this House the need for discovering flow oil. The location of flow oil in Australia is necessary for defence purposes, it would vitally affect transport and would confer inestimable benefits on all branches of industry, both primary and secondary. Much has been said at various times in this House regarding the production of oil from shale. I think all honorable members have been supplied with copies of a circular telegram from a place called Lawson, asking that the shale deposits of the continent shall be immediately nationalized as a defence measure. The authors of the telegram must be ignorant of the law of New South Wales, or must think that we are. The law of New South Wales provides that, even in times of peace, any oil discovered in New South Wales, and any oil extracted from shale or other rock or by any industrial process, shall be placed at the disposal of His Majesty’s Australian Navy. In time of war, the Commonwealth has a preemptive right over all oil produced in Australia, but the Government of New South Wales has gone further, and acquired a prior right over oil for the use of the Navy even in times of peace.
The Commonwealth has four possible sources of oil supply open to it. The first, and the one to which we should attach most importance, is flow oil. Secondly, in the event of our failing to discover flow oil, we may consider the possibility of extracting oil from the shale deposits in some of the States. Then, there in the possibility of producing industrial power alcohol by the methods mentioned by the honorable member for Lilley (Sir Donald Cameron), and the honorable member for Herbert (Mr. Martens) ; and finally, thereis the rather shadowy possibility of extracting oil from coal, the method so stoutly championed by the honorable member for Hunter (Mr. James).
– There is nothing shadowy about that; it is very real.
– I have read some quite recent English writings on this subject, and I am forced to the conclusion that the process is still very much in the experimental stage, and that the Government would be rash to invest millions of pounds in such an enterprise before it has first exhausted the possibilities of discovering flow oil within the Commonwealth.
I desire to impress upon the Government that I shall not he satisfied with this measure unless it contains provisions to protect the public against the exploitation that will result if the oil resources of Australia are allowed to pass into foreign hands. The bill should contain a definite guide to the Minister regarding the conditions under which the money is to be disbursed. One cannot overlook the seriousness of some of the statements made by the honorable member for West Sydney regarding what has occurred in the past in connexion with oil prospecting. I am forced to agree with much of what the honorable member has said. It is felt that sinister influences have been at work, influences which are opposed to the best interests of the public of Australia. This Parliament would be faithless to its trust if it were to allow the oil resources of the Commonwealth to become the plaything of objectionable overseas interests.
Sitting suspended from11.45 p.m. to 12.15 a.m. (Friday).
Friday, 22 May
.This bill provides for the allocation of £250,000 to assist in the search for flow oil. A good deal has been said about the possibility of discovering flow oil in Australia, and much money has been spent in the search for it. It has been alleged that the investigations have been sabotaged by the major oil companies, which desire to prevent its discovery. I agree with the honorable member for Barker (Mr. A. Cameron) that the Government should retain control of any oil wells discovered, in view of the fact that the expenditure of the money tobe appropriated under the bill is intended for their discovery. The honorable member feared that the control would be in the hands of the State or States in which oil happened to be. found. The constitutional limitations of the powers of this Parliament raise a difficulty which can be overcome only by a successful appeal to the people for extended powers. The honorable member said that the possibility of producing power alcohol on a commercial basis was remote, and that the extraction of oil from shale was a shadowy proposition; but we have definite proof that the extraction of oil from coal is a sound and profitable commercial undertaking. I have, on various occasions, drawn the attention of honorable members to the work that has been done in other parts of the world in this regard.
In my opinion, it would be a waste of money, and a pure gamble, to disburse £250.000 among approved companies, on the basis of a £1 for £1 subsidy, to encourage the search for flow oil. Over £500.000 has already been expended in boring for flow oil. In my own electorate two such bores have been sunk. One was put down at Belford Dome, after a geological survey by Dr. Woolnough. and up to the present time, no traces of oil have been discovered. A second bore was sunk near Maitland, where drilling has been carried to a depth of over 5,000 feet. Indications similar to those obtained in Gippsland were found, but the natural gases noticed may have been given off from coal seams that were penetrated. Eminent geologists have declared that there is not much hope of flow oil being found in sufficiently large quantities to meet the requirements of the nation. We are informed that the present oil wells of the world will be exhausted in the course of the next 40 years, and, therefore, we should make provision against that possibility. In view of the great demand for oil suitable for use in internal combustion engines, it will be necessary, I have no doubt, for us to resort to the extraction of this fuel from shale and coal. It has been announced that no attempt will be made in the United States of America to extract oil from shale while flow; oil can be obtained there. This indicates that provision is being . made for the future. It is also asserted that, in the course of a few years, the United States of America will not be in a position to export further supplies of oil. Australia, therefore, must turn its attention to the extraction of oil from shale and coal on a commercial basis. Germany has little flow oil, but it has set up gigantic plants for the extraction of oil from its brown, coal deposits, and plants will be in operation before the end of the present year which will be capable of producing 1,000,000 tons of oil per annum. A ton of oil equals 300 gallons.
Despite the arguments which I have advanced from time to time in regard to the extraction of oil from coal, the Government continues to send experts overseas. Sir David Rivett,’ who has gone abroad, has declared that the process of extracting oil from coal by the lowtemperature carbonization process is not a commercial proposition, owing to the fact that there is a residue of 14 cwt. of coke to every ton of coal treated. He has said, in effect, that industrial England, which has many large iron and steel works, could not use the mountain of coke that would accumulate, and he asks how Australia, which has few iron and steel industries, could expect to make the process’ commercially profitable. Even after reports had been obtained regarding the hydrogenation process, the Government took no action other than sending its fuel adviser, Mr. L. F. Rogers, abroad. This officer has had three trips to England, but it is extremely doubtful whether he is competent to deal with the subject which he has been called upon to investigate. .1 do not wish to make rash charges against any public servant, but I draw the attention of honorable members to the following statement issued by the board of directors of Coal Petrol Proprietary Limited, at Scottish House, Hunterstreet, Newcastle, held on the 30th April last : -
At a meeting of the board of directors, Mr. Rogers was questioned by the chairman. It was suggested to Mr. Rogers that he was not competent to match his knowledge of processing the Greta coal measures with that of th<: Lyon Brothers, the company’s experts, and Mr. Rogers made the honest and frank reply that he was not.
The chairman of this company wrote to the Prime Minister (Mr. Lyons) in the following terms: -
The board of my company had the pleasure of meeting your Fuel Adviser, Mr. Rogers, last week, and he generously admits that Messrs. Lyon Brothers have considerably more knowledge and experience on the subject of processing the Greta coal measures by low temperature carbonization than he himself. In reply to the writer, when asked if he would appreciate having the assistance on his side of another coal technologist, he readily agreed that he would. (Signed) H. FENTON, Chairman.
Mr. Fenton is also the Mayor of Newcastle. The promise has been made by the Prime Minister from time to time that something will be done to re-absorb the unemployed coal-miners in industry. This undertaking was given to a deputation at Cessnock, and was repeated in the policy speech of the Government. The intention was further referred to in the report recently submitted to the Government by the honorable member for Parramatta (Sir Frederick Stewart). By deferring action on this matter, instead of encouraging an undertaking which would be invaluable to the country in a time of war, and by failing to. redeem the promise made to absorb the unemployed miners, the Government has shown that it is not sincere. It raised certain catch-cries, and stated that it intended to “ tune in to Great
Britain “. This Government should now tune in and not hesitate to adopt the oil processing policy of that country; it should not rely for guidance, as it appears to do, on the major oil companies, which undoubtedly hold this country by the throat. This is a very serious problem, which is aggravated by prevailing international unrest, war being likely to break out at any moment. What steps is Australia taking to meet such an eventuality? Recently, in connexion with the Italo-Abyssinian dispute, the President of the United States of America was given power to veto American oil shipments to either of the countries at war. All I can say is, “ God help Australia in the event of war “. If war broke out now we would be slaughtered from the air, as we would be unable to resist an attack from the air. Unlike Abyssinia, we can boast of an air force, but to-day we have not the fuel to make that force effective. It appears probable that Great Britain may become involved in war at any moment, and we are told that once Great Britain goes to war, Australia automatically becomes involved. This was clearly pointed out by the Attorney-General (Mr. Menzies) in the recent debate in this House on sanctions. We must also bear in mind that our fleet is, in a large measure, dependent upon oil supplies for motive power. Most probably, we would need it to convoy tankers bearing oil supplies from overseas to Australia, but, recognizing the fact that such vessels would have to traverse thousands of miles, they would be in grave danger of being bombed. Furthermore, as our fleet is quite inadequate to protect our 10,000 miles of coastline it probably could not undertake the duty of convoying oil tankers.
We must develop the production of oil from coal as quickly and effectively as possible. This Government has yet to prove that it is not under the control of those arch villians, the controllers of the flow oil syndicates, who are interlocked with the merchants of deathdealing armament firms, and who have the power, the moment they so desire, to turn off the taps of supply to any nation which cannot pay their prices: This Government should immediately take steps to protect Australia from these soulless, profiteering mongers who, in times of war, grip countries by the throat. It will achieve this aim, firstly, by organizing national control of this industry.
I agree with the honorable member for Barker that if the Government intends to subsidize this industry in any shape or form, it should take control of the industry, so as not to allow private monopolies to secure a stranglehold on it, as has happened in America and other countries. Repeatedly, I have urged the Government to. set up plants for the production of oil from coal, and to retain these plants completely under its control. If it is not prepared to follow this course, it should enlist the aid of a company like that of Lyon Brothers, of Newcastle, which, in the course of inquiries made by the State government, has shown that it has made greater progress in connexion with this process than has any other company. A committee appointed by the Government of New South Wales to investigate the processing system adopted by the Lyon Brothers admitted that their claims were in no way extravagant. If the Government is not prepared to set up a hydrogenation plant it should at least encourage companies interested in this process in Great Britain to establish a plant in Australia. The difficulty to which Sir David Rivett referred, and with which I dealt earlier in my remarks, has been largely overcome, as the Lyon brothers have shown that Maitland coal can be used more effectively in the production of oil than any other coal in the world to-day. It is heart-breaking to see Maitland coal, which is admitted to have the richest oil content of any coal in the world and 50 per cent, greater oil content than British coal, burnt under boilers or in open fires for steam raising and domestic purposes, where combustion is so incomplete that much of the volatile matter in the coal is discharged unburnt into the atmosphere, apart from the waste of very useful chemicals. All of our coal is consumed in this manner, whereas the same purpose could be served by the use of residue coke, or smokeless; fuel, to the greater benefit of the individual consumer, and the health of the community by the elimination of the smoke nuisance. Everybody will admit that smoke constitutes one of the greatest nuisances to health in our cities, because through smoke many injurious chemicals permeate the air. In this connexion I need only point to the effect of smoke on galvanized iron roofing which it rusts within a very short period. By contrast we notice that similar roofings in country areas, where there is no smoke nuisance> remain unblemished. Undoubtedly smoke has just as injurious an effect on the human lungs as it has on iron roofings. These are additional reasons why we should be only too prepared to encourage the supply of smokeless fuel coal for the people generally. In Britain, this fuel costs as much as 55s. a ton.
The honorable member for Parramatta, in his report on his investigations abroad agrees that there is a greater oil content in Maitland coal than in English coal. He says -
Some time ago preliminary experiments were made at the Fuel Research Station on coal from certain of the Maitland pits, viz., Pelaw Main, Aberdare Central, Elrington and Muswellbrook. A ton of each coal was sent by the New South Wales Government in steel drums, care being exercised that the drums were airtight, so that the coal would arrive at the station without any change having taken place during the voyage. On carbonization at low temperatures these New South Wales coals produced over 30 gallons of tar per ton, compared with 20 gallons obtained from British coals carbonized under similar conditions. The tar produced by lowtemperature carbonization is specially amenable to hydrogenation and produces gallon for gallon of motor spirit. By this process there would be produced in addition to the 30 gallons of motor spirit, about 13 to 14 cwt. of smokeless coke fuel and a volume of commercial gas. The retail price obtained for low-temperature coke in England is 55s. per ton. The treatment entails much less capital outlay than direct coal hydrogenation, and, to the extent that the smokeless fuel could bc disposed of, it would appear to offer interesting prospects for Australian exploitation.
Dealing with the hydrogenation process, he says -
The capital cost of the .plant in use is in the vicinity of £5,500.000. It is, however, pointed out that this can hardly be taken as a reliable guide. Being the first plant of its kind to treat bituminous coal, margins of safety believed to be on an exaggerated scale were adopted. Moreover, practical experience with the plant, added to continued laboratory experiment, is expected to very greatly reduce the capital cost of future establishments. Incidentally the treatment of 2,000 tons of coal daily by a plant of a capital cost of £5,500,000 offers quite a different prospect to that presented by figures previously supplied to the Government. These suggested that treatment of 1,000 tons of coal daily would entail a capital outlay of £8,000,000 or £9,000,000. Actual performance at Billingham proves ability to treat twice the quantity at little more than one-half the capital cost. In addition to employment associated with coal winning and transport to the works, the Billingham enterprise employs 1,200 permanent hands.
I emphasize these facts because in reply to a question by myself in this House the Prime Minister said that the actual cost of the installation of a hydrogenation plant was twice this figure, and that such a plant would produce only 1,000 tons of coal daily. When the Billingham hydrogenation plant commenced operations 55 gallons of oil was obtained from a ton of coal, but to-day this plant is producing 75 gallons from a ton of coal, and the oil is sold at the same price as imported petrol. From October to December last year this plant produced 36,000 tons of oil from British coal.
According to analytical tests, that coal is 50 per cent, less in oil content than is Australian coal. If that average could be maintained, it would mean that 144,000 tons could be produced from one plant in a year. Reduced to gallons, on the basis of 300 gallons to the ton, itwould represent 43,200,000 gallons of oil produced from coal from the one hydrogenation plant at Billingham. It would mean the utilization of approximately an additional 577,277 ton3 of coal and employment for 2,000 miners and other workers. On the basis of English coal giving 75 gallons of oil to the ton, that would mean that a ton of Australian coal with a 50 per cent, greater oil content should produce 112£ gallons of oil.
– The honorable member’s figures are not correct.
– They have been checked a number of times. The honorable member’s interjection is most opportune. I refer him to the report of the debate in the House of Commons on Tuesday, the 25th February, 1936, page 276. Mr. George Hall asked the Secretary for Mines if he could give the monthly production of petrol at the Imperial Chemi- cai Industries works at Billingham ; whether the works were in full production; the total cost of the works to date; the monthly consumption of oil; and the number of work people employed in the plant and in associated secondary industries. In his reply, the Secretary for Mines, the Hon. Captain Crookshank, said -
In reply to a question by the honorable member on the 30th July last, 1 gave a full statement of the position as it then existed at the Billingham plant. At that time 25,000 tons (7,500,000) gallons of petrol had been produced. By the courtesy of Imperial Chemical Industries Limited, I am now able to give the following information with regard to the present position. Up to the present time a total of about 80,000 tons, or 24,000,000 gallons, has been obtained, of which approximately 30.000 tons were produced during the three months October to December, 1935, or practically up to the full capacity of the plant as given in the earlier statement referred to. During that quarter, the total quantity of coat devoted to the manufacture of petrol was 113,500 tons. In addition, tar oils from the high and low temperature carbonization of coal were hydrogenated. My honorable friend will appreciate that during the first few months in a new plant of this kind it is to be expected that the output may vary from month to month as modification and adjustments to the plant need to be carried out and as experience is gained of large-scale operations.
The reply of Captain Crookshank continued -
The number of workpeople employed at Billingham in connexion with petrol manufacture is over 2,000, and it is estimated that, in addition to miners directly engaged in producing coal for the plant, something approaching the same number may be employed in secondary industries. I have no information about the cost of the works beyond what was announced by the company in October last, when the plant was officially opened. It was then stated that the new capital expenditure amounted to about £3,000,000.
That is a different figure from the £8,000,000 and £9,000,000 mentioned by the Prime Minister, and not only supplements the report of the honorable member for Parramatta, but brings the figures more up to date. The Australian Government has dilly-dallied with this question. Those nations which have been involved in war since oil has played such an important part in warfare as well as in the commercial life of the world, have been at the mercy of the oil combines. Italy, for instance, in its war with Abyssinia, had great difficulty in satisfying its oil requirements, and had to consent to charters being given to the skippers of oil tankers, under which they were permitted to land cargoes at neutral ports in the event of a hostile naval vessel coming within range. In addition, Italy had to give a fifteen years’ guarantee in regard to quotas based on the maximum rate of supply and prices during the war. That price is reported to have been 6s. a gallon. There has been wide discussion as to whether oil should be regarded as contraband of war.. I have already indicated that the President of the United States of America has been authorized to refuse shipments of oil to nations at war. Nations possessing oil are beginning to be conscious of their power. Apart from the question of Australia’s ability to pay increased prices for oil in the event of war, and of the increased quantities which would then be required, there is also the problem of getting the oil tankers to Australian ports. The vessels would have to contend with long-range submarines carrying aircraft, and torpedo-carrying aircraft, to say nothing, of mines along the’ thousands of miles of sea routes. These difficulties constitute a formidable problem. During the Great “War it is well known that allied shipping was sunk outside New York by German submarines. Both submarines and aircraft are more efficient to-day than they were then. It is interesting to note that in January of this year an inquiry was sent to Lloyds’ for insurance rates for cargoes of oil going to the United Kingdom, the policy to - come -into force at the outbreak of a European war in which the United Kingdom and Australia would be involved. The request went before the rates committee, but no quotations could be obtained. The written reply from Lloyds concluded : “ We do not think that this is a proposition that any underwriter will entertain “. It will be seen that heavy insurance rates would have to be added to abnormal oil prices in times of war.
I have no doubt that, the Minister for Defence (Mr. Parkhill) could tell us a good deal about the Australian Navy, and what it would do in the event of war, but, after all, that navy is inadequate for the protection of Australia. If something is not done quickly to make Australia less dependent on overseas supplies of oil - something giving quicker returns than are likely to be obtained from prospecting for flow oil - the people will name the Minister for Defence “ Public Enemy No. 1 “. Great Britain has introduced legislation providing for the granting of bounties to assist in the search for flow oil in that country; but in order to be on the safe side in regard to essential oil supplies for the British Navy, it gave other encouragement, as I have already indicated. Apart from the oil produced at Billingham by the low temperature carbonization process, and the hydrogenation process, 30,000,000 gallons of oil was produced from Scottish shale during 1934. When we reflect that Great Britain is producing 173,200,000 gallons of oil per annum from coal, we must conclude that it is the duty of the Australian Government to follow its own advice and “ tune in to Britain “. On the basis of the figures given in the House of Commons by the Secretary for Mines, namely, 36,000 tons for the three months ended December, 1935, which is equal to 144,000 tons per annum, it is seen that Great Britain produces 43,200,000 gallons of oil each year from coal. [Leave to continue given.] I thank the House very sincerely for the courtesy it has extended to me. I shall conclude by making a quotation from the February, 1936 issue of the Royal United Service Journal of a lecture delivered by Colonel W. A. Bristow, M.I.E.E., F.R.A.E.S. It reads -
Oil from coal has already been produced in Great Britain for many years past by the process of high temperature carbonization, and in the last war large quantities of coal spirit in the form of benzole were used for blending with petroleum spirit for use in the air forces. In 1928 further supplies of coal oil became available as the result of the starting up of the first “ Coalite “ plant, and the output has since been greatly increased as the result of putting the second and third plants into commission. The third plant is operated under licence by the South Metropolitan Gas Company at Greenwich.
At each of these three works a small petrolrecoveryplant has been installed, and the Royal Air Force has been using the whole of the petrol thus manufactured for the last twoyears. This summer about twenty squadrons have beenregularly using coal petrol. During this period of what has been little more than full-scale experimental work, there has been produced and sold about 175,000 tons of oil and petrol, all made from coal by the “ coalite “ process. The products include -
Petrol to Royal Air Force specifica tion.
Fuel oil to Admiralty and other standard specifications.
Diesel oil (now nearly ready).
Oil suitable for conversion by hydrogenation either into motor spirit or into diesel oil.
In addition to the use of the petrol by the Royal Air Force, the Admiralty has had a few thousand tons of the fuel oil, and in 1932 H.M.S. Westminster went to sea fuelled only with coal oil. The results of the sea trials were quite satisfactory, and werereported upon very fully by Engineer-Captain S. H. Dunlop, R.N., in a paper read in 1933 before the Institution of Engineering and Ship-building in Scotland. In addition, many thousands of tons of the same fuel oil have been used by British railway companies, and other large industrial undertakings. It is now certain, as a result of many months’ development work, that oil suitable for diesel and all types of compression-ignition engines can be made from coal by the L.T.C. process. A long series of engine tests have already been carriedout quite successfully.
The establishment by Imperial Chemical Industries Limited of the hydrogenation plant at Billingham provides a most valuable addition to the country’s coal-oil resources. Not only does it afford the means of converting solid coal into oil, but by its aid the whole of the country’s yield of creosote and lowtemperature oil can be converted into approximately an equal volume either of motor spirit or diesel oil.
It is a fact that the production of benzole and petrol from British coal, plus the petrol made by the hydrogenation of existing crude coal oils, is even to-day more than enough to keep the Royal Air Force in the air. Large additional quantities would be required in war, both for the Army and for home road transport, and it would seem to be of paramount importance to increase our home supplies.
There is one feature in this situation which should be emphasized, and that is the complete success which has attended the manufacture of oil and petrol from coal by the process of Low Temperature Carbonization Limited, and the hydrogenation of crude coal by Imperial Chemical Industries Limited. By the L.T.C. process petrol and fuel oil have been produced on a commercial scale for years, and at a profit. The qualities are absolutely uniform year after year, and comply with the most rigorous service specifications. A similar success is being experienced with diesel oil made from coal, so that the three main service requirements for fuel can be supplied in part from coal oils. And, in addition, by the hydrogenation of existing crude coal oils, the total production of petrol could be raised to a much larger figure.
Carbonization or distillation method, which has proved to be successful on a large commercial scale, is the L.T.C. process for the manufacture of smokeless fuel. By this means thepetrol and oil are derived as by-products, which can be produced and sold at an economic price, by reason of the fact that the smokeless fuel side of the business shoulders most of the cost. It is true in Great Britain that petrol and oils derived from coal are exempt from duty, and I think very properly so. The amount of preference the native product will have enjoyed will, in terms of money, constitute but a microscopic premium to have paid for the security of our country. Also, in all probability, the amount of preference will have been largely counterbalanced by increased employment due to the creation of this new industry.
One of the remarkable features of this coal oil is its flexibility; it can be hydrogenated - in fact, it is by far the most suitable coal oil for hydrogenation; it can be cracked; or it can be distilled and fractionated into quite a number of valuable and much-wanted products. From the technical point of view, therefore, no difficulty stands in the way of a much greater utilization of our own coal resources.
The process is economic, and a satisfactory rate of interest would beearned on the capital cost. The moneyrequired for the carbonization plants would work out at a little less than £1 for each ton of coal put through per annum. For example, a plant capable of treating 1,000 tons of coal per day would cost, complete with everything, not more than about £300,000. I would like to see three or four of the largest collieries on the seam breaking down all the coal they produce, and carbonizing it by the L.T.C. process. Even after allowing for the cost of breaking, the price realized would be wellabove the average figure obtained now, which is about 13s. per ton. To complete the scheme an I.C.I. hydrogenation plant should be set up as close as possible to the coal plants, with a view to the hydrogenation of such portion of the crude oil produced as was required to be converted into petrol and/or diesel oil.
There is nothing of an experimental character in the whole business. The present L.T.C. works at Barugh and Askern have operated night and day without a stop since they were started up in 1027 and 1929, and they are both in first-class condition and capable of functioning efficiently for many years to come.
The whole case, therefore, may be summed up under the following headings : -
I have complained from time to time, and so has the honorable member for Newcastle. (Mr. Watkins), as his father did before him, of the grave danger that would arise from the oil tanks at Wickham if war should occur. If these stores were located in the coalmining fields, they could be placed underground at comparatively little cost by utilizing some of the excavations already made by the mining companies.
It is worthy of note that Germany is rapidly building up a very large organization for the manufacture of petrol and oil from German coal and lignite. Largely as a result of direct government action, a number of plants is being built and existing plants are being enlarged. It would appear that by the end of 1936 the total production of petrol by the Bergius process, the Fischer-Tropsch process, and direct low temperature distillation, will amount to approximately 1,000,000 tons. In addition to the foregoing, in 1924, the coke oven plants produced 222,000 tons of benzole, and the yield of petroleum from the German oil wells in operation was, during the first half of this year, about 218,000 tons.
It is, perhaps, not without significance that the time chosen for the rapid development of this considerable organization for the production of oil from German material should happen to coincide with the expansion of the German fighting forces which is now taking place.
-Order! The honorable member has exhausted the time by which his period was extended.
– I propose to make a few observations on the hill, and to enlarge on some of its implications, which were touched upon by the Minister who introduced it. I have listened with patience, care and attention to the speeches delivered by honorable members opposite, but I suggest, with respect, that their very lengthy remarks had little to do with, the principles of the bill. The honorable member for Hunter (Mr. James), in particular, used the extension of time granted to him principally to read, for inclusion in Hansard, the notes of a lecture delivered in London by Admiral Briscoe.
– It was very informative.
– I agree with the honorable member, but such information may be obtained from the Library. The honorable gentleman’s speech, like that of his colleague, the honorable member for West Sydney (Mr. Beasley), was irrelevant. I have taken a considerable interest in this subject, and have read certain newspaper reports and pamphlets circulated in Sydney and elsewhere accusing the Government of in activity in the search for oil; but this bill is a complete answer to those charges. I challenge any honorable gentleman opposite to deny that the Government has been very active in promoting the search for oil throughout Australia, and the islands of the Pacific, which are under its control. The Government has acted, and not simply talked, about this subject, and it is now proposing to obtain the assistance of the most authoritative experts who are available to it.
I listened with surprise to the speech of the honorable member for West Sydney. I have an admiration for his energy and ability, but I regret that they were not exercised in a more worthy way this evening. It is unfair for honorable members to take advantage of their place in Parliament, which has been described as a coward’s castle, to attack private individuals who are unable to reply to what is said.
– Honorable members opposite have very frequently attacked Mr. Lang in this chamber.
– He deserves it, and, in any case, he has a similar forum from which he can reply to such attacks. Private individuals are not in that position. It is reprehensible that statements made by unnamed individuals, who give evidence before a royal commission or a body of inquiry, and reports in newspapers such as that at Darwin, the reputation of which is as low as that of any newspaper in the world, should be used in Parliament to traduce and shamelessly attack private individuals as has been done this evening. The gentleman, who has been assailed, bears, so far as I know, an unblemished reputation in his own profession.
The honorable member for West Sydney occupied a great deal of time to-night in reading from Hansard a speech delivered on the 19th March, 1924, by Mr. Blakeley, a former member of this Parliament, on the Oil Agreement Bill introduced by the Bruce-Page Government to encourage the search for oil. It occurred to me, while the honorable gentleman was doing so, that an effective answer must have been made to such a speech. I therefore examined the Hansard volume in which the speech appeared, and found that the then Prime Minister, Mr. Bruce, replied to Mr. Blakeley in the following terms: -
The honorable member for Darling (Mr. Blakeley) made a spirited attack upon the Anglo- Persian Oil Company, but we are accustomed to such attacks on the company by him, and with all respect I say that I do not think he is well informed of the facts. We have heard him attack the company on other occasions with considerably more dash. Today he confined himself to the subject of the explorations for oil in Papua and mandated New Guinea, and attempted to show that the company had behaved in such a disgraceful and scandalous way that it was quite impossible for honorable members even to contemplate permitting the Government to make any further adventure with it. He said, indeed, that we should cancel the existing agreement. The honorable member descended into such murky depths that those who listened to him must have been appalled. He did not hesitate to make very serious charges, buthe produced not a scintilla of evidence to support them. It is lamentable that an honorable member should launch charges of such a character in this House without in any way substantiating them. Such conduct causes wonder at the honorable member’s wayof looking at things. It is sad that an honorable member can so easily suspect peopleof being guilty of the conduct he has imputed to the Anglo-Persian Oil Company.
I cordially agree with what Mr. Bruce said.
-What did Mr. Lamb, K.C., say about the major oil companies?
Mr. ARCHDALE PARKHILL.Mr. Lamb’s report is not before me. What was said by the then Prime Minister about Mr. Blakeley’s speech maybe said with equal truth about the speech delivered by the honorable member for West Sydney to-night. It is deplorable that honorable members should use their place in this Parliament to attack without a vestige of justification the private characters of individuals who are not able to reply to the attacks made upon them. That practice is totally wrong and should not be permitted in the national Parliament.
References made in this debate to the major oil companies might lead to the supposition that the members of this Government and honorable gentlemen who support it had some special connexion with these enterprises.
– Do they not give the Government the good oil?
Mr. ARCHDALE PARKHILL.They do not. They give the Govern ment no more oil than they give the Opposition. The Government has no more to do with these organizations than has the Opposition itself. The honorable member for West Sydney said that the Government was allowing the major oil companies to search for oil in New Guinea and Papua without taking any measure to safeguard the interests of the Commonwealth. If that were true it would be serious, but it is quite untrue. All that the Government is doing is to encourage the major oil companies, or some of them, to use their own money to search for oil. If oil is found the Government has full power to control it. I point out that in regard to New Guinea and Papua all petroleum rights are reserved to the Crown. The Crown retains pre-emptive rights over all production. Leaseholders are obliged to pay a royalty of 10 per cent. on the gross value of all petroleum produced. The Commonwealth is precluded by constitutional limitations from taking any action with regard to petroleum lands within the various States, but its powers in regard to New Guinea and Papua are inherent in the Constitution. If necessary the Government would take all proper steps to enforce these powers to the utmost limit, and to exercise the full right of the people over any flow oil discovered. It must be apparent, therefore, that the honorable member for West Sydney was in this respect beating the air.
– Why not deal with the bill?
– I am dealing with the bill. I am sure that the honorable member for West Sydney, who is quite fair in matters of this kind, will understand that everything cannot be placed in a bill, and that it is unnecessary to include in a bill provisions contained in other legislative instruments. That is the case in respect of the aspect which I have just mentioned.
The honorable member for Hunter (Mr. James) in the course of his remarks, referred to Mr. L. J. Rogers, the Commonwealth Fuel Adviser, and quoted from a document prepared by a Mr. Fenton, who, I understand, is the prompter or chairman of some company, containing some disparaging remarks concerning Mr. Rogers. I point out to the honorable member that Mr. Rogers is a Master of Science and a Bachelor of Engineering. He has had five years of experience at the Greenwich Fuel Research Station, and has had actual experience of fuel problems in most of the countries of the world. Yet, we are asked coldly and calmly to believe that he admitted that he knew nothing about them, and was glad to have the assistance of some layman in dealing with them.
– The name of the Mayor of Newcastle was appended to that pamphlet.
Mr. ARCHDALE PARKHILL.While the honorable member was reading it, I was thinking that people might have said the same or perhaps worse things about me, but I have not found it necessary to spend good money chasing people whose opinions are not worth , anything, and do not cut any ice with anybody. The only importance which can be attached to that statement is that it has been read in this national Parliament. Reference has been made also to Dr. Wade. I do not know him, I have never seen him ; but I have seen the work that he has done, and have no hesitation in saying that what has been said about him , to-night has no foundation in fact. The .’remarks, made against this gentle-, man make no impression on me. The honorable member for Hunter also made considerable reference tei the extraction of bil from coal by the low temperature carbonization and hydrogenation processes. What, to my mind, is the most singular and remarkable thing about all his diatribes on this question, and they are many, is that no reference is made to what the owners of the coal are doing. Why should public money be utilized for testing these processes ? Imperial Chemical Industries Limited, arid the companies in England that own the coal or have interests in it, spend their- own money in the development of this enterprise. The honorable member asks the people of this country to provide the money for that purpose, but there has been a death-like silence on the part of the coal-owners in respect to this matter.
– The Government has been asked to say what protection it will give.
Why does it not hold out some hope to the industry as the Imperial Government did?
Mr. ARCHDALE PARKHILL.What the honorable member has said is no -answer to what I have just remarked. I have said that there is a death-like silence on the part of the coal-owners of the country in regard to this’ process; they have not made the slightest move to do anything in regard to these projects.
– The patents are held by Imperial Chemical Industries Limited.
– I am referring to the coal-owners of this country, in the Maitland, Newcastle and other principal coal-mining districts. I defy anybody to say that they made the slightest movement in regard to this question, or that they have invested a shilling in efforts to test the efficacy of processes about which the honorable member has spoken.
– That does not make the “ processes wrong.
– No ; - I do not say that; but surely the coalowners should be expected to improve their assets by exploiting this progressive new development. I am remarking on the absence of any movement on their part. The honorable member for Hunter represents the coal-mining industry in New South Wales, and he is endeavouring to improve the position of that industry, and, more particularly, the people engaged in it. I have no objection to that; that is a very worthy aspect of parliamentary representation. He has addressed himself to this subject in this chamber repeatedly and at considerable length; but, at the same time, I am not prepared to subscribe to the view that the Government should immediately plunge into a large expenditure of money on these processes without knowing fully where it is going.
– -Why is the Government plunging into a gamble in connexion with prospecting for oil?
– The Government is authorizing the very modest expenditure of £250,000 as against an estimated expenditure of between £5,000,000 and £8,000,000 which, on the honorable member’s own showing, would be required for the development of lowtemperature carbonization and hydrogenation processes.
– It would not cost so. much as that.
– The honorable member spoke of an expenditure in England of £3,000,000, but he omitted to mention the sum of £2,500,000 which Imperial Chemical Industries Limited had formerly expended. Those two sums make a total of £5,500,000, and exchange would increase the total to £8,000,000, which, it was claimed, would be the cost to this country for the development of those processes. I think honorable members will support the Government’s view that this is not a proposal which can hastily be given effect.
– The Commonwealth Government has already spent £500,000 in prospecting for oil. What has it got for that expenditure?
That is so, but it is of no significance. That money was spent in the full expectation of finding oil, just’ the same as the £250,000 now being provided will be spent. I remind the honorable member that if, as the result of that expenditure, oil had been found, the Government would have been applauded for its wise expenditure of the money. We have to find out whether oil actually exists in this country, and there are as many people in Australia who say that there is no oil in this country, as there are who say that oil actually does exist. I am prepared to support a proposal for the expenditure of reasonable sums of money so that the question of whether or not oil exists in this country can be settled as far as possible, once and for all.
– It is said that foreign interests are trying to “ crab “ the search for oil.
– I have heard that statement made quite often, and at times have thought that there might be something in it. I do not think, however, that it can be applied to the search for oil. The search for oil is a perfectly legitimate undertaking, and I do not think that the machinations ascribed to the major oil companies enter into that matter. Once oil is discovered, I can quite imagine that the major oil companies might buy into control of the fields and close them down.
– If such machinations are attempted, this sort of “ crabbing “ is playing into their hands.
Mr. ARCHDALE PARKHILL.They may endeavour to control the oilfields when they are discovered. That is a matter which would have to be safeguarded by the Government, and effective safeguards can be provided. The expenditure of the £250,000 to be provided in this bill will enable efforts to be directed, first, in those places where the best expert advice says we are most likely to find oil. I think honorable members will agree that that is a wise step to take. One of those places is at present controlled by Oil Search Limited, a purely Australian company. Inquiries into the constitution of that company reveal the fact that its capital is wholly subscribed by Australians, and that its shares are held mainly by small holders, widely distributed throughout the Commonwealth. Mr. Blakeley was most enthusiastic about the work the company is doing, and, if he is regarded by honorable members opposite as a good authority on other matters, I can assure them, for their own satisfaction, that he has given the company credit in the same measure as he awards discredit in other instances. Much of the information I have regarding it was obtained from him.
Regarding the production of oil from coal by the hydrogenation process, the Government considers the matter of such importance that it has determined to obtain the best first-hand information concerning efforts made to establish the industry in other countries. Sir David Rivett, Chief Executive Officer of the Council for Scientific and Industrial Research, who is chairman of the Commonwealth Hydrogenation Committee, to which reference has already been made, is to leave Australia this month to investigate the development of the process in England and Germany.
– Another joyride !
– On the question of sending people abroad for the purpose of obtaining information,
I remind honorable gentlemen, that this Parliament, engaged as it is in its occupation day and night, cannot be expected to conduct investigations into big questions of this kind. How is the Government to obtain tue information that it needs unless responsible officers are sent abroad to obtain it?
– Does not the Minister consider that this is rather overdone?
– No. If I thought public money were being wasted 1 should protest in the strongest possible terms.
The low temperature carbonization process for the extraction of oil from coal has been investigated by various governments, and, in view of the persistence with which the subject has been pursued, I regret that the results obtained have not been more satisfactory.
In regard to the shale oil industry, 1 have received a telegram suggesting that the Governmentshould invest money in it at Newnes, instead of asking private enterprise to carry on the work; but I point out that the Government has decided that petrol produced from shale in Australia shall be granted protection over imported petrol, to the extent of the customs and excise duties now operating, for a period of twenty years. The effect of this decision will be that, if the present customs duty of 7d. a gallon on imported petrol, or the excise duty of 5£d. a gallon on petrol produced from imported crudes, is i educed during the next twenty years, a bounty equivalent to the amount of such reduction will be paid on petrol produced from Australian shale. Such protection will be granted on production up to a maximum ‘ of 10,000,000 gallons per annum. The value of this protection over a period of twenty years will amount to over £4,500,000.
– That is fairly generous.
– Yes. The Government is certainly making a generous contribution to the industry.
– What does the Minister think of the position of Messrs. Chambers and Treganowan in this matter?
– I listened to the statement of the honorable member, but I frankly confess that I am not in a position to answer the question so fully as I should like. Having regard to the importance of fuel oil, from. the point of view of defence, it is gratifying to notice that the honorable member for Hunter is anxious to see our defences safeguarded. At this stage we must provide reserves of oil, and attention is being paid to this matter. It is considered that all the oil that could be produced at Newnes would not exceed about 7,000,000 gallons a year. That would be sufficient for army purposes, but not enough for the navy and the air force. Therefore, the supply at Newnes is not regarded as of paramount importance, from the point of view of defence. Nevertheless, a beginning is being made there, and that is one of the reasons why the Government has submitted a proposal to ensure that at least a certain quantity of oil shall be annually produced in Australia from shale. The proposal contained in the bill is designed to make certain whether flow oil can be found in Australia, and the other should ensure the production, under certain conditions, of at least 7,000,000 gallons of oil from shale. These are constructive proposals, and, if successful, will be of benefit to the community
Mr. THOMPSON (New England) (“1.50 a.m.]. - I am surprised that the Government has brought this bill forward because I cannot see any great justification for it. Nevertheless, I shall support it, believing that it will not do great harm, even if it does little good. Although I hold the opinion that it is practically impossible to locate flow oil in Australia, I do not desire to prevent efforts being made by the Government or private individuals to find oil. Therefore, to some extent, the Government is to be commended for its enterprise and optimism. Some honorable members, like myself, are sceptical about the likelihood of discovering flow oil in this country, and think that the money to he appropriated under this bill could have been better spent in some other direction. Oh the evidence available, it appears that this £250,000 will be absolutely wasted.
Motion (by Mr. Ward) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. G. J. Bell.)
Majority . . 10
Question so resolved in the negative.
– Whilst I favour the hill generally, and hope that the optimism displayed by the Government will be justified, I fear that the money is to be spent in a chase after a willo’thewisp. Australia has been settled by white people for 148 years, and I believe that if there were any flow oil in this country, it would have been discovered by now. Furthermore, the efforts made in this direction by private enterprise during the last 30 years should be sufficient to indicate whether or not flow oil exists in this country. I recall reading some years ago a report of the late Professor David to the effect that Australia was outside the main oil belts of the world; our failure to discover flow oil seems to substantiate that opinion. He held the view that if petroleum be found in this country it will most probably be in northern Queensland. But we have not found it yet, although I hope that success will attend this effort. If. this measure does nothing else it will at least encourage employment. Under this measure certain persons who are enterprising enough to speculate in the search for oil will be subsidized by this Government at the discretion of the Minister. I daresay that plenty of people will avail themselves of such an opportunity. Years ago various people in the electorate of New England spent quite a lot of money in prospecting for oil; they were always finding it but never got it. If we find flow oil in Australia, it will be a tremendous achievement and probably will represent a turning point in our economic and political history. But after studying the views expressed by the late Professor David that Australia is outside the main oil belts of the world, I fear that this search is hopeless. The Government could, with more advantage, devote its energies along more practical lines.
There are two sources from which we can derive oil in Australia. One is coal, but I shall not go into detail in that matter because it has been dealt with very fully by honorable members and the Minister. The other source is shale. Australia is reputed to have the finest shale deposits in the world; whether that is a fact or not I cannot say, but the statement is often made in our press and scientific periodicals that Australia’s shale deposits have a very high oil content. In these circumstances, if the Government is of the opinion that the cost of producing oil from coal is too high - and I noticed that the Minister said definitely that private enterprise at present shows no disposition to risk its capital in such a field - it should explore the shale possibilities. In doing so, it need run no undue risks. I commend the Government for sending Sir DavidRivett to England to investigate this subject. We have been talking about the development of our shale deposits since I entered Parliament fourteen years ago, and it is time that some tangible policy was formulated. I am very disappointed indeed that up to this late stage this Government and its predecessors have done no more than pursue what I regard as a will-o’-the-wisp policy. Its present policy is in relation to flow oil and coal oil impracticable, but the development of the shale deposits is a practicable proposition that can receive immediate attention.
– We are doing something in that direction.
– Yes; in the year in which I entered this Parliament we passed a hill providing a bounty to encourage work in this direction, and I remember the then Minister, the late Mr. Pratten, estimating the stupendous quantities of oil that could be produced in Australia; he suggested that we would eventually be able to supply all our requirements. I was enthusiastic about the prospects then, but what do we find to-day? Oil from shale is not produced in any appreciable quantity in this country, and the industry has not contributed to our economic prosperity. If we have the world’s best deposits of shale, with so great a content of oil, we should concentrate on developing them. We know that there are tremendous quantities of coal in the Greta seams which run from Newcastle to Southern Queensland, and that these are practically untouched. Innumerable outcrops of these seams in northern New South Wales have not even been prospected. In one area in my electorate there is a seam 10 feet high, containing coal equal to the best produced to-day in Newcastle; it contains tons of fuel waiting to be developed. Undoubtedly we have coal suitable for the production of oil; it is only a question as to whether it would be economical to treat it. According to the Minister, this work could not be undertaken economically to-day. I know that private enterprise is prepared to exploit this coal, as a, proposition on these lines was brought under my notice. I submitted it to the Government, but the reply I received was so unsatisfactory that the persons who approached me decided not to invest any money in the venture. In the circumstances, that was probably the wisest course they could follow. The extraction of oil from coal is a matter for the future, and if we view it as an alternative to the discovery of flow oil in this country, then Ave must merely sit down and wait until the time arrives when the coal oil industry can be firmly established. In the meantime, I repeat, we can establish the shale oil industry; this will not be stupendously costly like the hydrogenation process. The proposal has been before the public for the last ten or fifteen years. Like other honorable members, I received from persons associated with the Newnes industry the telegram to which reference has been made; 1 shall not express any opinion on that statement as 1 prefer to leave its discussion to honorable members who are more directly concerned in the matter. A shale oil enterprise is established in my electorate and 1 am definitely of the opinion that the Government has not done its best to develop this industry. I suggest that we should put the hydrogenation process aside until we receive more information on the matter from Great Britain. If we realized that the discovery of flow oil is mainly a matter of chance, we should not worry about it. At this stage the search for flow oil is like chasing moonbeams. If we concentrate on the development of the shale oil industry we shall render the best possible service to this country, in respect of, not only defence, but also the advancement of Australia generally. On behalf of the persons associated with thi.i industry in my electorate, 1 urge the Government to investigate thoroughly its possibilities; I do not think that the Government has .yet made a serious attempt to do that. Several years ago some Scottish experts were brought to Australia to investigate this matter. Why they were brought here, and what they did when they were in this country, is still a mystery to me. Certainly they submitted a report, but anybody who wanted to avail himself of their expert knowledge in regard to oil shale was fobbed off by official red tape. I, myself, had an experience of that nature. I tried very hard to get the Federal Government to induce these experts to go to Murrurundi, which is a very important town in the electorate of New England, not to investigate the opening up, but the closing down, of one of the biggest shale oil works in Australia, but I could not get any satisfaction on that point. I was simply told that the matter would be investigated, and, ultimately, I was informed that the experts had left Australia; but that before they departed they had been supplied with all the available data about these works, and from a perusal of that data, had expressed the opinion that it would not be worth their while to examine the works. When the Government acts. in this way, it is open to the suspicion that it is not doing its best to develop our shale oil resources. Not only this Government, but also past governments, have failed to do their job in this direction, and to-night I desire to know the real reason for this failure. It is about time that the suspicion, which is widespread in Australia, that powerful foreign oil interests have too much say in the politics of this country was dispelled. Before the outbreak of the war a very big shale oil mine was opened up at Murrurundi, and it was stated that German interests were behind these works, but that on the outbreak of war they naturally relinquished control of the venture. These works which employed about 400 men were, connected with the main railway system of the State. Even to-day, 22 years after the enterprise was closed, travellers between Newcastle and Brisbane can see the disused works from the railway carriages. Since 1914, many unsuccessful attempts have been made to re-open the works. Where at one time 400 men were employed, there is now only a caretaker in charge. Every time a proposal is made to re-open the works the Australian interests which acquired them - and I believe that they are Newcastle interests - send along a number of nien to dismantle more of the plant, with the result that to-day very little of the original plant is left. People in the district are of the opinion that there is something sinister behind the move to prevent the development of those shale deposits. The Commonwealth Government has never allowed any experts to investigate the works. When the Scottish experts were in Australia, I asked that they be sent to Murrurundi, only to be to’d that a visit was not necessary, because the experts had been furnished with all the available official data, and that they had decided that the deposits were of no value whatever. That, I submit, is definite evidence that the Commonwealth Government has not regarded this matter seriously. I do not know what has happened in connexion with Newnes.
– Messrs. Chambers and Treganowan were pushed out of Newnes.
– I know nothing reliable about Newnes, but I do know something about Murrurundi. The evi dence there is sufficient to justify an investigation to ascertain what influences are behind the decision to keep the works closed. Surely, if the Government is anxious to develop the shale oil industry of this country, it should be willing to institute an inquiry into the closing down of the works at Murrurundi. There is a general opinion throughout Australia that foreign interests, mainly American, are determined that the shale oil industry of this country shall not be developed. I direct the attention of honorable members to the discussion which took place in connexion with a bill to encourage the production of shale oil, which was introduced into this Parliament eleven or twelve years ago. At that time we were told that the prospects ahead of the industry were bright; that the production of oil locally would free us from the domination of foreign petrol trusts, because Australia would be independent of overseas supplies of oil for industrial purposes as well as for defence. Nothing has been done since then. It is true that there have been spasmodic references to the desirability of producing our own oil supplies, but it is evident that deliberate attempts have been made to discourage the production of oil from shale.
– Perhaps the remission of duty for twenty years will have some beneficial influence.
– I am glad that the House has had this opportunity to discuss this subject. The future of Australia depends on oil. If, as some people tell us, there is no flow oil in Australia, we must endeavour to obtain oil from coal ; or, if the production of oil from coal is too expensive, we must direct our attention to shale. If it be true that hostile foreign interests are preventing the development of the shale oil industry, it is time that this Parliament knew the truth. It is the duty of the Government to locate these interests if they exist - and, in my opinion, they do exist. What I have told the House about Murrurundi is, I submit, conclusive evidence of hostility to this industry. I ask the Government to investigate my statement about that enterprise, and also the charge that the development of the shale oil industry has. been deliberately retarded.
– The imperative need for achieving a better balanced economy within Australia in respect of supplies of fuel oil makes any measure which aims at obtaining adequate supplies of fuel oil from local sources welcome, and, indeed, of outstanding importance. Australia is so richly endowed with most raw materials that I am afraid that wo have allowed ourselves to be lulled into a sense of false security in respect of oil fuel. Our position has been considerably worsened by the enormous development which has taken place in respect of transport, as a result of the progress made in the use of aircraft, the mechanization of armies, and the substitution of oil fuel for coal in. naval vessels. These and other developments have followed one another with such rapidity that they have left Australia in an exceedingly dangerous position. The aim of this measure is to encourage drilling with a view to obtaining flow oil, if it exists in Australia. The Government’s programme consists of three parts : First the discovery of flow oil if it exists ; secondly, the obtaining of oil from shale ; and, thirdly, its extraction from coal. Criticism has been levelled against the Government by the honorable members for “West Sydney (Mr. Beasley), Hunter (Mr. James) and New England (Mr. Thompson) on two grounds. They have contended, first, that the money will be wasted for the reason that no flow oil exists in Australia; and, secondly, that even if flow oil does exist here, the intrigues of foreign interests will frustrate the efforts of any persons or companies which endeavour to discover and develop the deposits. As to the allegation that no flow oil exists in Australia, I say emphatically that no member who has made it is qualified to speak authoritatively on the subject. Let us suppose that flow oil does exist in Australia. In that event, is it not the duty of this Parliament to take steps to discover and develop flow oil fields? In doing so, the Government would seek the advice, not of unqualified laymen, but of men either with experience of actual drilling for oil or who have studied the subject closely. The Government has in its employ men who are well qualified to express an opinion as to whether or not flow oil does exist within the Commonwealth.
The Government would be recreant to the trust reposed in it by the people of Australia if it failed to rely on the advice of its scientific advisers. Experts whom the Government has consulted say that there is a distinct possibility of flow oil being discovered in Australia, and therefore the Government cannot do other than make a reasonable attempt to locate that oil. The aim of the measure before the House is the encouragement of companies or persons willing to undertake the search for oil by making available to them moneys appropriated under the authority of this legislation. That money is to be advanced, not as a gift but as a loan, for which proper security is to be given. That being so, the charge that the money will be wasted is without foundation. (Quorum formed.]
During the progress of the debate, a good deal of loose talk has been indulged in by members on both sides of the chamber, who have alleged very freely that the majority of the attempts which have been made, either in New Guinea or in Australia, to locate flow oil, have been deliberately frustrated by some mysterious foreign intriguers. It is said that, with Machiavelian malevolence, these underground foreign intriguers have deliberately set out to destroy whatever chance might exist of the industry being born and developed. Some of these allegations have been made by honorable members, who normally would be regarded as men possessing a full and proper sense of responsibility. But none has been able to cite a specific instance of the adoption of such practices. Men who attack the characters of honoured government officials not only do a grave injustice to those whom they assail, but also do a disservice to the industry which the Government is seeking to promote, by discouraging possible investors from participating in the enterprise. I appeal to honorable members, in the interests not only of the industry but also of Australia, to exercise extreme care in the allegations they may make with respect to this industry and also against those whom they claim are seeking to render abortive our efforts to develop it. The flow oil industry can be established only with government assistance. The Government is prepared to render assistance, at the same time taking every reasonable precaution to ensure that the money, which it makes available shall be expended wisely and properly and as effectively as possible. The fact must be accepted that the search for flow oil in Australia is somewhat of a gamble. But we must also realize that, no matter how much flow oil may exist, it will never be located unless someone is prepared to gamble to some extent in the search for it. For that reason, the efforts of the Government to encourage the search are more than justified.
I wish to refer briefly to the policy of the Government in regard to the development of the shale oil fields of Australia. This legislature, since I became a member of it, has always given generous assistance to those engaged in trying to develop the industry. As far back as 1932, it induced Messrs. Treganowan and Chambers to undertake the development of the Newnes shale oil field, on terms which were then considered highly satisfactory, not only by those gentlemen, but also by every person who viewed the position without prejudice. The honorable member for West Sydney (Mr. Beasley) has suggested that the efforts of Messrs. Treganowan and Chambers were f frustrated by foreign oil companies, which cut off the supplies of oil they were in the habit of acquiring in Melbourne. By some strange twist of reasoning, the honorable member arrived at the conclusion that that explained the failure of these gentlemen to develop the Newnes field.
– I also made a further statement, and quoted from a letter of theirs which is on the government files.
– I am not attempting to refute the honorable member’s statements. I am definitely inclined to accept his assertion that some of the major oil companies in Melbourne refused supplies to Messrs. Treganowan and Chambers. I point out, however, that that action in no way affected the development of the Newnes field. As a matter of fact, had that development been possible it would have placed them in a position to disregard the major oil companies. Their failure was due entirely to the fact that they were unable to induce the investment of capital in the venture.
– They said in their letterthat the influence which operated against them was too strong.
– I do not know what meaning that is intended to convey. But I do know that Treganowan and Chambers issued a very attractive prospectus, and sent out canvassers who not only travelled the length and breadth of New South Wales but also visited other States. The objective was a capital of £250,000, but they received offers of only about £4,500. Subsequently, the Government offered as much as £300,000 to assist concerns which were willing to undertake the development of the field, but no offers were received, and it has not been found possible to float a company or to attract capital to the venture upon any terms that the Government was prepared to offer, notwithstanding the fact that during the last three or four years it has been more generous than any previous Government. The Minister for Defence (Mr. Parkhill) has mentioned that the present proposal involves assistance to an amount of £4,500,000, spread over a period of twenty years, on the basis of the production of 10,000,000 gallons of motor spirit per annum. That is the equivalent of £230,000 per annum, which is a very considerable sum in the light of the fac* that the total capital required to establish a company is approximately only £400,000 or £500,000.
– It amounts to over £600 a day, every day for twenty years.
– I do not think that any one could suggest that that is other than generous or that any previous Government was more generous. I believe that it will be possible to develop the Newnes field on that basis; thar. capital will be forthcoming, and that, while the venture will not be highly profitable, the investment will be reasonably sound and safe.
The Government is faced with considerable difficulty in respect of the development in Australia of any industry for the treatment of coal by the hydrogenation process, not because the coal lacks necessary qualities or because we have not men of the requisite skill to work any plant that might be installed, but on account of the very real difficulty of dealing with the major oil companies. These are banded together in an international company which holds all the important hydrogenation patents, and will not make them available to the Government except on terms that are suitable to it. Let me explain that in a little more detail. Imperial Chemical Industries Limited, the Royal Dutch Shell Company, the Standard Oil Company of the United States of America, and a big German company have banded together under the name of the International Patents Company. The different territories of the world have been parcelled out among them, and an agreement has been entered into by the terms of which no company will enter the territory allocated to any of the other .companies. They hold all the important key- patents for the exploitation of the hydrogenation process. I understand that Australia has been allocated to Imperial Chemical Industries Limited. If we wish to exploit any process for the hydrogenation of coal we shall have to act through that agency. That is a serious position.
– We could amend our patents law to meet it.
– I do not know what could be done in that respect, but the Government should utilize every possible means to free Australia from the domination of this international organization.
– We should be justified in taking any steps and adopting any means to do this.
– I entirely agree with the honorable member. If we are finally to escape from the thraldom of the major oil companies, it will be, I believe, by the establishment of a national fuel oil industry in the Commonwealth. We must have a substantial fuel oil industry here. At present Australia is completely at the mercy of this big international group. The major oil companies can do almost as they like, with us. I therefore strongly urge the Government to exploit every means to extricate us from this position. If necessary, it should acquire the patent rights necessary to establish a national fuel oil industry - either under its own control or under the control of Australian capital. I earnestly plead that this subject be regarded as of paramount importance.
– I commend the Government for having introduced this bill. I do not believe that any serious opposition will be offered to it. This Parliamentwould be lacking in its duty if it did not do everything possible to intensify the search for .flow oil, in particular, on the largest possible scale and at the earliest possible moment. My only complaint about the bill is that it does not go far enough or provide money enough for the purpose. I understand that Professor David expressed the opinion years ago that Australia was outside the main oil belt of the world, but that many prominent scientists and oil geologists now hold an entirely different opinion. They consider that the great oil belt of the world runs across North Australia from .east to west. We are all aware, of course, that oil has been discovered in South Australia and Victoria. The only question is whether it is there in sufficient quantity to justify the expenditure of the large amount of capital necessary to obtain it. It is also questionable whether our deposits of shale are sufficiently extensive to justify the heavy outlay of capital necessary to exploit them. I remember when I was a lad in Tasmania seeing people light. pieces of shale. They burned like a candle. There can be no doubt that the oil is present in our shales. Years ago, when I was sitting in conference in a building in Collins-street, Melbourne, dealing with a matter affecting the Broken Hill Proprietary Company, Mr. Montague Cohen and others present, discussed the oil resources of Australia. .1 expressed a fear that certain American interests might secure control of our shale deposits and also our timber areas. I was informed by Mr. Montague Cohen “that between £15,000 and £16,000 had already been expended in investigating the shale oil deposits of Tasmania and the conclusion had been reached that their extent did not warrant the construction of the bridges, jetties, roads and tramways that would be necessary to exploit them.
– More than 100,000 gallons of oil has been obtained at Lakes Entrance.
– That is so, and substantial quantities have also been obtained in South Australia. The question is whether the deposits are sufficiently extensive to justify development. I am pleased that the Government is making this amount of money available for exploratory purposes. The first fundamental requirement in the development of a country is the establishment of credit resources, but I think the second vital consideration is probably the provision of oil fuel. The Joint Committee of Public Accounts furnished this Parliament with a valuable report on this subject on the 21st August, 1925, in the course of which it stated -
Extensive and rich as are Australia’s shale deposits, they are by no means inexhaustible, and on a conservative estimate the amount of oil in the known deposits will suffice only to supply Commonwealth requirements, at the present rate of consumption, for approximately 25 years.
It appears to the committee, therefore, that these deposits, forming as they do a valuable asset, should be regarded purely as a national reserve and conserved as an insurance against the time when Australia’s supplies from overseas may be threatened; and the committee unanimously recommends that, as a defence measure, steps should be taken to have the oil-shale deposits of Australia vested in the Commonwealth.
To leave the development of these deposits until an emergency arises would be hazardous; research and experimental work should, therefore, bc carried on to the point of production, and the works then placed on a nucleus basis in conformity with the poliey already controlling the munitions factories so that, when the necessity arises, full production could be reached without undue delay.
It is essential that our oil resources should be’ developed. Every one who has any knowledge of the major oil concerns of the world will agree that an unhealthy state of affairs has developed. I do not suggest ‘that there are no honest men associated with these enterprises, but it cannot be denied that steps have been taken to limit supplies, seal down wells in certain countries, and control prices. Very rich oil wells are at present sealed in Dutch New Guinea because the interests which control them do not desire competition to be intensified. The output of the oil wells of the world is being controlled in a most scientific way to the disadvantage of the great mass of the people.
Seeing that the honorable member for West Sydney (Mr. Beasley) has waited long and patiently for an opportunity to discuss the reports submitted to this Government by the Petrol Commission, I think he was thoroughly justified in accepting the opportunity provided by the introduction of this bill to deal with the subject. Admittedly, his remarks went far beyond the ramifications of this measure.
– That is putting it mildly !
– Quite so, but I do not blame the honorable member for having taken this opportunity to get his teeth into those reports. I must confess that I personally am nervous about making statements of a personal nature in Parliament, but attacks of that character are fortunately not frequent within these walls. The individuals associated with the major oil companies, however, deserve censure. They are held in disrepute in every country of the world, and it is not too much to say that they are from time to time attacked in every parliament of the world. Their dramatic- and sinister international activities in the control of oil supplies bring down upon them at intervals the just wrath of the people. Every government should do its best to provide its people with an independent supply of petrol and oil.
I regret that so much difficulty has been experienced in this country in collecting the taxes that have been justly levied on the major oil companies. Apparently the Government is fearful of taking action against these monopolistic enterprises which have escaped taxation. They should be made to pay what is generally believed runs into millions of pounds. It seems to fear the introduction of retrospective legislation except in respect to the workers. However, I applaud the Ministry for having introduced this bill, which I am sure will be received with satisfaction in Victoria. I hope that attention will later be devoted to the important problem of the extraction of oil from coal, but it is wise to seek first to discover flow oil. It would be a great thing for Australia - perhaps the greatest that could happen to it - if it could be assured of independence in respect of its fuel oil supplies.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
In this act, unless the contrary intention appears - “ Petroleum “ means naturally occurring solid, liquid or gaseous hydrocarbons in a free state, but does not include any substance which may be extracted from rocks or minerals by any process of destructive distillation.
– I move -
That the words “but does not include” be omitted with a view to insert in lieu thereof the words “and includes”.
The purpose of this amendment is to make it obligatory upon the Government to apply the money provided in this bill in taking such steps as may be considered necessary to inquire into the possibilities of the extraction of oil from coal and shale. The amount of £250,000 may not be sufficient to meet the requirements in respect of both flow oil and oil from coal and shale, but this is the only opportunity we have to secure from the committee an expression of opinion that the Government should exploit first the known resources at our disposal.
– I am unable to accept the amendment, because the Government desires to utilize this money in connexion with the search for flow oil, and feels that it may he little enough for the purpose. In regard to shale oil, I do not think that honorable members realize the extent of the assistance that willbe given to the development of that industry by the proposed remission of tax. This remission is estimated to amount to £4,500,000 in twenty years on the basis of the production of 10,000,000 gallons per annum. The honorable member for West Sydney (Mr. Beasley) described this quantity as paltry, but the Government will be gratified if it is reached, and even more gratified if it is exceeded. The assistance covered by this remission of taxation represents probably twice as much as the total amount of wages that would be paid in the shale oil industry. Prom a purely economic point of view, the assistance is therefore not justified, but the Government takes this step in the interest of defence. With respect to the hydrogenation process, I need only add that a scientist of repute, Sir David Rivett, is to be sent this month to the United Kingdom to obtain the latest information regarding the developments which have occurred at the plant of Imperial Chemical Industries at BillinghamonTees and in . Germany. An. immense amount of money has been expended at Billingham in installing the best plant and technical equipment for the hydrogenation of coal, and it would be the height of folly for the Commonwealth to embark on similar expenditure until it has the full advantage of the experiments at present carried out in Great Britain.
The CHAIRMAN (Mr. Prowse).I rule the amendment out of order as being inconsistent with the title of the bill, and with the Governor-General’s message.
Clauses 3 to 8 agreed to.
Preamble and title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
– I move -
That the bill be now read a second time.
Under the existing law, there is doubt as to the right of members of Parliament, who have been or may be elected to the Australian Dairy Produce Board, to receive fees. In connexion with the Meat Export Control Act the Parliament has already affirmed theprinciple of entitling members of Parliament serving on such boards to be paid out-of-pocket expenses only. That principle has been adopted in the main clauseof this bill with the variation that power- is being given to enable a member of” Parliament who is a member of theAustralian Dairy Produce Board tocontract himself out of the fees to which he would be entitled. In other words, he may forego his fees by signing the necessary document and thereby safeguard his seat in Parliament. That is the only amendment of consequence in the bill, and I ask the House to agree to it without delay. An election of the Australian Dairy Produce Board is to take place on the15th June, and an amendment of the law is necessary to protect members of Parliament who are or may become members of theboard. [Quorum formed.]
– I have no objection to the bill, but I would not care to take the risk of accepting fees under this amendment. I could not feel confident that I was not violating the provision of the Constitution which debars members of Parliament from accepting an office of profit under the Crown. I am aware that the legal officers of the Crown have advised that by this procedure a member of Parliament, while not entitled to receive fees for his service on the board, may be reimbursed actual out-of-pocket costs and expenses. It is conceivable, however, that this may be considered merely to be a’ device to evade the constitutional inhibition. The general theory is that members of Parliament who render service other than as legislators should not receive any remuneration or reward from the Crown. While I realize that the Minister desires to overcome an awkward situation that has arisen in connexion with the Australian Dairy Produce Board, I frankly confess that I would not, as a member of the. Parliament, and of the board, care to depend on the constitutionality of this legislation.
Question resolved in the affirmative.
Bill read a second time and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
Bill returned from the Senate with amendments.
In committee (Consideration of Senate’s amendments) :
The following income shall he exempt from Income tax : -
Income derived -
Senate’s amendment. - After sub-paragraph (vi) of paragraph (c) insert the following sub-paragraph : - “and (vii) as director’s fees or salary by a non-resident during a visit to Australia during which he acts as a director, manager or other administrative officer of a manufacturing, mercantile or mining business or of a business of primary production, if the visit of the non-resident to Australia does not exceed six months; “.
– I move -
That the amendment be agreed to.
The object of the amendment is to allow six months’ grace to visiting business men from overseas. Under the present law, tourists escape income tax, but a business man, who receives a salary which is paid abroad, is charged both Federal and State income tax, in proportion to the time spent by him in Australia. The Government considers that it will be unwise to maintain this rather irritating form of tax, because visits to Australia by men of this type, who may promote business, should be encouraged. I believe that the amount of tax involved is very small.
– How will this amendment affect travelling professional men, such as musicians?
– A violinist from abroad, who earns money in Australia, will have to pay income tax, as at the present time.
Motion agreed to.
Senate’s amendments. - After “ country “ insert “ outside Australia “.
After “ derived “ insert “ For the purposes of this paragraph, a taxpayer shall be deemed to be liable to pay royalty or export duty in any country outside Australia if he satisfies the Commissioner that he sold the goods in that country to another person for export from that country, and that the price for which the goods were sold was less by the amount of the royalty or the export duty, as thecase may be, than the price which the taxpayer could have obtained from the sale of the goods outside that country “.
After paragraph (r) add the following paragraph : -
– I move -
That the amendments be agreed to.
There are a few cases, particularly in New Guinea, in which a planter who grows copra does not export his own copra, but sells it to a shipping company. An Australian or an Australian company, gets the benefit of the deduction of the export tax on copra that the product has undoubtedly carried. When the grower sells the copra to the shipping company, it gives him only the price on the day of sale, less the copra tax, so that the producer in New Guinea in reality carries the tax, although up to the present time he has not been able to claim the benefit of so doing. The amendments to paragraph q are designed to correct that anomaly.
The Senate’s amendment to insert new paragraph s exempts, in certain circumstances, the income of religious institutions. A religious denominational body can now use its own funds for the purpose of carrying the insurance on its religious institutional buildings, but, up to the present time, if it has formed a company to carry that insurance, although it may not be in a business competitive with ordinary insurance companies, it cannot get exemption from federal income tax. This provision sets out that the insurance company formed by a religious body can get the exemption so long as its business is strictly confined to the insurance of church institutional buildings. If it takes any other insurance at all, it denies itself this benefit. The fact that a religious institution has had this benefit, whereas a company has not, is thought to be an anomaly.
– Would this provision cover a church school and a parsonage?
– If the church conducts a school it would be part of the institutional buildings, but the dwelling bouse of a clergyman would have to be insured with an outside company, and would not be exempt. The religious school must be owned by the religious body.
Motion agreed to.
Clause 84 -
The assessable income of a taxpayer shall include, in addition to rent, any premium received by him in the year of income, and any consideration so received for or in connexion with his assent to any grant or assignment of a lease :
Provided that . . .
Clause 85 (Deductions).
1 ) Where interest is paid or credited by a company to any person who is a nonresident -
Clause 165 -
Where by reason of any amendment the taxpayer’s liability is reduced, the Commissioner may refund any tax overpaid.
Senate’s amendments -
After “shall” clause 84 insert “except in eases in which the next succeeding sub-section applies,”.
Leave out the proviso, clause 84, insert the following sub-clause: - “(2.) Where a lease from the Crown of land used for primary production is assigned or surrendered by the taxpayer, and the lease was acquired by him before the sixth year prior to the year of income in which it is so assigned or surrendered, the amount of the net premium received by the taxpayer as consideration for or in connexion with the assignment or surrender shall be included in his assessable income:
Provided that the amount of any net premium (or if, in respect of the transaction there are more net premiums than one - the sum of the net premiums) so included shall not exceed the total of the amounts of deductions allowed under this act and any previous law of the Commonwealth to the taxpayer in respect of the lease.”.
Make verbal and consequential amendments to clause 85, and at end of clause insert the following sub-clause : - “(4.) Where a net premium is, under subsection (2.) of section eighty-four of this act, included in the assessable income of a taxpayer, the deductions which would have been allowable under this section had the full amount of the premium been included under sub-section (1.) of that section in the assessable income of the taxpayer, shall be taken into account only for the purpose of ascertaining the amount of the net premium.”.
Make verbal amendment, clause 124.
Leave out “ income tax upon that interest” paragraph (b) clause 125; insert at end of paragraph - “ - (i) where the person to whom the interest is paid or credited is a company - income tax upon that interest; and
where the person to whom the interest is paid or credited is not a company - income tax upon so much of that interest paid or credited in the year of income as exceeds Two hundred and fifty pounds “.
Leave out sub-clause (2.) and (3.), clause 160, insert the following new sub-clause: - “(2.) In this section, ‘business’ means a business which from its nature and character requires the retention in the business of not less than fifteen per centum of the taxable income of each year. “(3.) This section shall not apply in any case by reason only of the existence of any one or more of the following facts: -
The amount set aside, appropriated or written off the value of assets in the accounts of an individual in respect of depreciation, exceeds the amount, if any, allowable under this act in respect of depreciation of those assets.
It is necessary to retain taxable income to meet expenditure of such a nature as would be, if and when incurred, a deduction under this act from assessable income.
It is necessary to retain taxable income to repay borrowed money.
It is necessary to retain taxable income to increase capital.”.
Leave out “ the sources of information from which the return was compiled” (wherever occurring), clause 165, insert “such information as to the sources available for the compilation of the return as is prescribed “.
Leave out “ may “, clause 172, insert “ shall “.
– I now come to a group of amendments arising from an amendment submitted in this chamber by the honorable member for Wakefield (Mr. Hawker), and move -
That the amendments be agreed to.
I give the committee the assurance that these amendments do not depart from the intention of the honorable member. Clause 84 refers to “premium’’, which, of course, means “ gross premium “. In the form in which the honorable member moved his amendment in the first place, the effective words were “ net premium “. The difference between net and gross premium is that the gross is the total premium, and the net means the gross premium less allowable deductions. Then come three small amendments to three different parts of clause 85, relating the premium back to subclause 1 of clause 84, that is, gross premium. The next amendment provides a saving clause. We require all the machinery of clause 85 for the purpose of arriving at the net premium, but only for that purpose, as the taxpayer has already had the benefit of the deduction. This provision has been inserted so that no taxpayer shall get a double benefit from this net premium. The Government is proceeding almost at once with the help of Sir David Ferguson to go into the whole subject of the taxation of leaseholds, and, if it is found necessary, it will bring down amendments in September or October, after this bill has become law.
The Government omitted previously to extend the benefit of the statutory exemption on interest on moneys put out on deposit in Australia by a person overseas. At the present time, the company or institution that has money so deposited is obliged, under the terms of the bill, to deduct interest at the company rate. This amendment in clause 125 provides that the company shall not deduct such interest until the amount accruing is over £250.
There has been a provision in the act for some time under which it is possible for the Commissioner, subject to certain provisos, to allow 15 per cent. of the taxable income to remain with the person who is carrying on a business which needs to be fructified annually by turning some part of the income back into capital. The Commissioner has been rather reluctant to give this privilege until he has been well convinced that the business is of a kind that needs a concession of this nature; but, owing to a recent decision of the Appeal Board, it could rightly, under the terms of the present law, be widely extended by giving it to an industry of a kind to which the Parliament in framing the provisions some years ago had never intended it to apply. With a view to limiting the concession as the Parliament intended in the first place, the whole of sub-clause 2 of clause 160 has been redrafted, and the Commissioner now assures me that he will be able to confine the privilege to the relatively limited number of cases to which it can be properly applied.
The amendment of clause 165 relate; to tax agents. As the clause read before the amendment was made, tax agents had to state the sources of information from which the return was compiled. That provision is being struck out and the following words inserted - “ such information as to the sources available for the compilation of the return as is prescribed “.
The intention of the amendment is obvious.
The Senate, in its wisdom, amended clause 172 to ensure that the Commissioner shall be obliged to make refunds of tax overpaid. In future the Commissioner will not be able to set off tax overpaid in other directions, say, for instance, against land tax owing.
– The Commissioner shall have to treat each account separately?
– Yes. Whether this new provision will legally prevent the Commissioner from setting off a certain tax overpaid against other accounts is still doubtful, but the layman’s view is that the amendment will have the effect which I have indicated.
Motion agreed to.
Upon every such reference or appeal -
the taxpayer shall be limited to the grounds stated in his objection; and
Senate’s amendment -
After “ objection “ insert - “ and to such other grounds as the board or court hearing the appeal gives leave to add “.
– The Government is not prepared to accept this amendment which proposes to alter the practice which has existed since the federal income tax law began, that is, over twenty years ago, in that it will make it possible for a taxpayer, after having stated certain objections in the first place to the Commissioner in the ordinary way, to apply to the court to have other objections accepted.
– Even though the taxpayer had not given notice of such additional grounds of objection to the Commissioner ?
– Yes, even though he had not mentioned them previously.
-What does the Minister mean by “ previously “ - that the taxpayer has not given the Commissioner reasonable notice of the additional grounds of objection before going into court, or, that he has not given notice of them in his initial objection ?
– In the first place the taxpayer has 60 days in which to lodge his grounds of objection. Although no provision is made for the practice in this legislation, it is well known that any individual, if he wishes to do so, can consult the Commissioner, or the Deputy Commissioner, and discuss his assessment with him, and find out why he has been assessed at a certain amount. It has been my personal experience, and that of others, that an individual who seeks an explanation in this way can discuss his grounds of objection quite easily, and without having to obtain legal advice, is enabled to come to the conclusion, and quite honestly, that he has been assessed too highly. Ican only repeat my earlier remarks on this matter; that is, that the ground for the Government’s belief that the law should stand as at present and that it should decline to accept the Senate’s amendment, is that it believes the Commissioner should have the right to be informed in the first instance of all the grounds of objection which the taxpayer takes to his assessment, within the period of 60 days allowed for the lodgment of objection, so that the Commissioner may have an opportunity to correct that assessment before any appeal machinery is invoked.
– And also to give the Commissioner an opportunity to prepare his defence.
– Yes; but very frequently in such cases the Commissioner allows the objections. Furthermore, the royal commission recommended that no alteration of the present practice should be made. The amendment would tend to encourage the exploitation of the appeal provisions in that it would allow a taxpayer to conceal from the Commissioner the principal ground of objection which he would only expose when he wentinto court.
– He could not be blamed for that. A boxer does not let his opponent know where he is going to punch him.
– The honorable member has stated a sound reason why the amendment should not be accepted. It would allow the taxpayer to escape the Commissioner in the first place and to go straight to the court of appeal.
– Is the Treasurer assuming that the court of appeal would encourage such a practice? It would only be with the court’s permission that he would bo enabled to amend his objections.
– When the appellant tribunal, which will be a single and expert tribunal, is appointed, the Government may take a different view of this matter. At present a vast variety of courts deals with appeals on taxation matters. Some of them are much more expert than others. Without forecasting the Government’s intention I may say that when the appellate tribunal is appointed, I think the Government will be willing to accept something substantially of the nature of this amendment. At present, however, the Government is not disposed to accept it. I therefore move -
That the amendment be disagreed to.
– I am disappointed that the Government is not prepared to accept this amendment, or, as an alternative, to suggest a modification of it, that is, if it is really afraid that the court will allow the taxpayer to conceal his real objections, and so put the Commissioner to the expense and trouble of preparing a case based on the original objections. If the Government is afraid that the Appeal Board or court would allow an undesirable practice of this nature - and I admit that it would be an unfair pro cedures - the position could be safeguarded by the addition of the words “ such other grounds as the board or court hearing the appeal gives leave to add, and of which the Commissioner shall be given not less than 30 days’ notice.” Such safeguard of this nature would prevent any abuse of the provision proposed by the Senate.
– Does the honorable member mean after the case has gone into an appeal court?
– No; I am suggesting that if the Government is afraid of this provision being abused, it could provide certain limitations.
– That would lengthen the proceedings, as it would mean that the cases would have to be before the board for that period.
– Any additional expense incurred in prolonging the proceedings under such circumstances would have to be borne by the taxpayer. It is unlikely, however, that any taxpayer would wilfully protract the proceedings simply to annoy the Commissioner. I suggest that a further safeguard should be provided only if the Government had so little confidence in the court or appeal board to believe that either would allow unfair alterations of objections, and the withholding of grounds of objection as suggested by the Treasurer. This amendment provides a real safeguard for small taxpayers, particularly those resident in the country or in small towns who could not afford to obtain the best accounting advice when making out their returns or formulating their grounds of objection. I know from practical experience that first rate accounting experts take steps to see that the objections are lodged in such general terms as will allow of almost any argument being used subsequently to support them, but 90 smaller taxpayers out of 100, who might desire to amend their grounds of objection, would not be able to do so as effectively as taxpayers who are able to pay substantial fees to secure expert advice. I should be sorry indeed if the Government felt that it could not accept this amendment, and I suggest that if it cannot review its decision to-night, it might give an undertaking to refer this subject also to the chairman of the royal commission when he is considering the taxation of leaseholds. Alternatively, it could leave the matter open so that at greater leisure it might be able to. evolve an amendment of the existing law to give less wellinformed taxpayers, who, generally speaking, are the small taxpayers, some assurance that their objections will really be based upon the strongest possible grounds. Taxation law is so complicated to-day that the small taxpayers are not in a position to pay the big fees necessary to obtain the best advice, and, therefore, often do not receive full justice. A great many assessments are sent out just before the Christmas period, and, in such cases, it is difficult for taxpayers to secure expert advice to assist them to state the strongest possible grounds upon which they can lodge their objections. In the interests of the large body of “John Citizens” who have to pay taxes and who get very little in return, I ask the Treasurer earnestly to reconsider his objection.
– I think that it can be said that the best friend of the small taxpayer, in the matter of explaining his assessments, is the Commissioner or his deputy. There is seldom need for a small taxpayer to go before the appeal board. That body is rarely approached by taxpayers who have not a considerable sum at stake. The Government will consider this subject in connexion with the constitution of an. appeal tribunal, for the creation of which special legislation will be introduced when Parliament meets in the next financial year - possibly in September or October. The whole matter will then be reviewed. “While not forecasting the proposals of the Government, I think that I may say that honorable members need not be astonished if they find that this proposal is embodied in them.
Motion agreed to.
Clause 254 -
With respect to every agent and with respect also to every trustee, the following provisions shall apply: -
Senate’s amendment. - After paragraph (c) insert the following paragraph: - “ (ea) He is hereby indemnifiedfor all payments which he makes in pursuance of this act or of any requirement of the Commissioner.”
Clause 255- (1.) With respect to every person having the receipt, control or disposal of money. . . the following provisions shall, subject to this act, apply: -
Senate’s amendment. - After paragraph (c) insert the following paragraph: - “ (d) he is hereby indemnified for all payments which he makes in pursuance of this act or of any requirement of the Commissioner.”
– I move -
That the amendments be agreed to.
These amendments really originated with the honorable member for Wakefield (Mr. Hawker), who inquired as to the reason for striking out the two indemnity clauses in the oldact, and was told that they were omitted because it was thought that they were unnecessary. At the time, I said that the matter would be looked into, and if it were found that any justification existed for having the clauses, they would he reinserted in the Senate. . The position was clear with respect to cases within Australia, but in relation to cases overseas some doubt existed as to whether the law in itself did provide sufficient indemnity.For that reason the two indemnity clauses have been reinserted.
Motion agreed to.
Resolutions reported; report adopted. Ordered -
That Mr. Casey, Mr. Archdale Parkhill and Mr. Paterson be appointed a committee todraw up reasons for the House of Representatives disagreeing to amendment No. 18 of theSenate.
– On behalf of the committee, I bring up the following reasons : -
I move -
That the committee’s reasons be adopted.
Question resolved in the affirmative.
In committee (Consideration of Senate’s amendments) :
Clause 2 - “ Public authority “ means any authority constituted by or under the laws of a State. “ Public work “ includes, in respect of any State, work declared by the Government of that State and approved by the Treasurer to be a public work.
Senate’s amendment.-Leave out the definitions of “ public authority” and “public work”, insert the following definition: - “public work’ means any work -
Clause 6 -
Any moneys paid in any financial year to a State under this act (in this section referred to as “the moneys”) shall be paid upon the following conditions: -
The moneys shall, subject to this section, be applied by the Trea surer ofthe State for the purpose of thepayment of interest and sinking fund charges on approved loans for public works commenced, with the approval of the Government of the State, on or after the first day of July, One thousand nine hundred and thirty-five, and not directly controlled by the Government of the State.
A payment made in any financial year . . . shall not exceed -
Where the Government of a State has made a contribution in that financial year under sub-paragraph (ii) of the last preceding paragraph - the amount by which the interest and sinking fund charges, which would have been payable in that financial year on a loan representing the total capital cost of the public work, are reduced by the making of that contribution; or
In selecting loans for the purposes of payments under paragraph (a) of this section preference shall, as a general rule, be given, as far as practicable, to loans fur works in extra-metropolitan districts, and as between works in different extrametropolitan districts, to those affording the greatest opportunity for the employment of labour.
Senate’s amendments. - After “ State “, first occurring, paragraph (a), clause 6, insert “to authorities or bodies controlling public works “.
Leave out “, and not directly controlled by the Government of the State “, paragraph (a).
Leave out “ a contribution in that financial year “, sub-paragraph (ii), insert ‘‘“on or after the first day of July, One thousand nine hundred and thirty-five, a contribution “.
Leave out “ extra-metropolitan districts “, first occurring, paragraph (e), insert “ districts outside metropolitan areas “.
– I move -
That the amendments be agreed to.
Because of the decision to include hospitals and similar health institutions, it has been found necessary to make some fairly considerable amendments to the bill. The first affects the definition of “ public authority “. A hospital is seldom, if ever, run by a public authority. The expression “ public work “ has also been redefined. The Senate’s amendments are in agreement with the suggestions ofthe Leader of the Opposition (Mr. Curtin). The new definition is certainly not more restrictive than it was, and is probably much wider. It remains now with the State Governments and the Commonwealth Treasurer to agree to any work. The door has not been opened too wide.
With one exception, the other amendments are consequential on the deletion of the definition of “public authority”, and the redefining of “ public work “. Where the words “public authority” previously appeared, the words “ authority or body “ have been substituted. The exceptions to the amendments which are consequential are in clause 6 c 2. Amendments made in response to representations made by the honorable member for Echuca (Mr. McEwen) make it possible for portion of Commonwealth moneys to be applied in, say, 1936-1937, to a work which had been subsidized by a State Government in, say, 1935-1936. That was not possible before. Whilst not impeding the measure in any way, the amendments make that extension possible.
– I have studied the amendments and have no objection to offer to them.
Motion agreed to.
Senate’s further consequential and verbal amendments, clause 6, agreed to.
Resolution reported; report adopted.
In committee (Consideration resumed from the 20th May, vide page 1986, upon amendment by Mr. Blackburn) :
That the following new clause he inserted: -
This act shall not affect the power of the Public Service Arbitrator to determine any claim which has been submitted to him pursuant to the Arbitration (Public Service) Act 1920-1934 before the passing of this act.
House adjourned at 3.57 a.m. (Friday).
The following answers to questions were circulated: -
– The agreement for the surrender and acceptance of the Northern Territory, entered into between the Commonwealth and the State of South Australia on the 7th December, 1907, which was ratified and approved by the Northern Territory Acceptance Act 1910, provides -
The Commonwealth in consideration of the surrender of the Northern Territory and property of the State therein and the grant of the rights hereinafter mentioned to acquire and to construct railways in South Australia shall -
Construct or cause to be constructed a railway line from Port Darwin southwards to a point on the northern boundary of South Australia proper (which railway with the railway from a point on the Port Augusta railway to connect therewith is hereinafter referred to as the Transcontinental Railway).
Railways have been constructed between Oodnadatta and Alice Springs, and between Darwin and Birdum. It is not considered that the construction of a line between Alice Springs and Birdum is warranted at the present time.
e asked the Minister representing the Acting Attorney-General, upon notice -
– Representations have been received by the Government from bodies representing the commercial community for and against the proposal that deeds of arrangement be dealt with in a separate act, as in England. These representations were considered by the Parliamentary Bankruptcy Committee, which made certain recommendations thereon. These recommendations were transmitted to the Attorney-General, who is, whilst in London, investigating the working of the English system. It will thus be seen that the matter has been and is receiving consideration.
n asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
n asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows . -
Wireless Broadcasting : Licence fob B Class Station in Brisbane.
n asked the Minister representing the Postmaster-General, upon notice -
– The answers to the honorable member’s questions are as follows: -
Cite as: Australia, House of Representatives, Debates, 21 May 1936, viewed 22 October 2017, <http://historichansard.net/hofreps/1936/19360521_reps_14_150/>.