House of Representatives
17 November 1936

14th Parliament · 1st Session



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

page 1872

QUESTION

SUBSIDIZED AIR SERVICES

Mr DRAKEFORD:
MARIBYRNONG, VICTORIA

– Will the Minister for Defence state whether it has been the practice for the Government to subsidize private aviation concerns or companies? If so, is that practice still in operation? Will the honorable gentleman also furnish particulars of the subsidies paid to such aviation concerns or companies and the amounts, if any now being paid annually, with the reasons for the payment?

Sir ARCHDALE PARKHILL:
Minister for Defence · WARRINGAH, NEW SOUTH WALES · UAP

– The answer to the first portion of the honorable member’s question is, that such subsidies have been and are being paid. The particulars sought in the second portion of the question are contained in a list of subsidised services and ‘ amounts paid that I have furnished to the honorable member for Kalgoorlie. I shall forward that list to the honorable member, with any additional details required by his question.

page 1872

QUESTION

CROYDON MONOSPAR AEROPLANE

Mr PERKINS:
EDEN-MONARO, NEW SOUTH WALES

– Will the Minister for Defence state whether it is a fact that in a film exhibited during last week in Melbourne the mishap to the Croydon monospar aeroplane is wholly attributed to false directional signals re ceived from Darwin ? If so, and the stated cause of the mishap is incorrect, will the honorable gentleman see that the misstatement is corrected before further release of the film is permitted?

Sir ARCHDALE PARKHILL:
UAP

– My attention was drawn to this mattter by persons who had seen the film screened. What was exhibited was the statement of the British aviators who flew the aircraft. Both the film and the letterpress had been passed by the Censor. I have issued the instruction that the owners of the film be asked to alter the letterpress by the insertion of the word “alleged”, or at least in such a way as will indicate that the matter is still open for investigation and inquiry.

page 1872

QUESTION

ELECTORAL REDISTRIBUTION

Victoria and Western Australia

Mr SCHOLFIELD:
WANNON, VICTORIA

– Will the Minister for the Interior indieate what stage has been reached with the redistribution of Victoria, whether any further formalities are to be undertaken to make the redistribution effective, and, if so, when they will be completed?

Mr PATERSON:
Minister for the Interior · GIPPSLAND, VICTORIA · CP

– The arrangements in connexion with the redistribution of Victoria have been completed, with the exception that the proclamation has not yet been issued. It is customary to defer that until fairly close to the end of the final session of Parliament.

Mr GREGORY:
SWAN, WESTERN AUSTRALIA

– In view of the big increase of population in the Kalgoorlie electorate during recent years, is it the intention of the Government to appoint a commission to inquire into electoral boundaries in Western Australia?

Mr PATERSON:

-The commission which acted previously in this connexion has been re-appointed and will shortly be carrying out the task of effecting a new distribution of Western. Australia on the basis of the population figures asat the 31st October last.

page 1872

QUESTION

REPATRIATION

HospitalAccommodation in Melbourne.

Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

– In view of the long-standing complaint of shortage of accommodation and equipment at both

Caulfield Military Hospital and the outpatients department at St. Kilda-road, will the Minister for Repatriation state what is delaying the commencement of building operations and when this urgent and necessary accommodation and equipment are likely to be provided?

Mr HUGHES:
Minister for Repatriation · NORTH SYDNEY, NEW SOUTH WALES · UAP

– I am not aware of the existence of the conditions to which the honorable gentleman has referred, but shall make inquiries and, if there has been delay, shall ascertain the cause and, if possible, remove it.

page 1873

QUESTION

CASE OF MRS. FREER

Mr JAMES:
HUNTER, NEW SOUTH WALES · ALP; LANG LAB from 1931; ALP from 1936

– Will the Prime Minister consider appointing a committee of this House to examine the evidence in the Freer case with a view to making a confidential report to members?

Mr LYONS:
Prime Minister · WILMOT, TASMANIA · UAP

– I am afraid that the answer to the honorable member’s question must be in the negative.

Mr JAMES:
HUNTER, NEW SOUTH WALES

– In view of the evidence given before the judge in divorce in the case Roberts v. Roberts, in Sydney yesterday, and of his attitude in the Freer case, does the Minister for the Interior consider that William Lygon, seventh Earl of Beaucbamp, who is now on his way to Australia, is a desirable person to be allowed to visit Australia?

Mr PATERSON:
CP

– I have not considered the matter at all.

Mr GARDEN:
COOK, NEW SOUTH WALES

– Can the AttorneyGeneral inform the House as to whether Mrs. Freer has any legal remedy to test the action of the Minister for the Interior in excluding her from Australia, and, if so, what remedy, or remedies, she has?

Mr MENZIES:
Attorney-General · KOOYONG, VICTORIA · UAP

– I am sure that the House will excuse me from undertaking the task of giving legal advice to a private citizen who contemplates proceedings against the Crown.

page 1873

QUESTION

NORTHERN TERRITORY

aeroplanefor Dr. Fenton - Tennant Creek Inquiry.

Mr BLAIN:
NORTHERN TERRITORY

– In view of the fact that the people of the Northern Territory are subscribing money for the purpose of replacing Dr. Fenton’s aeroplane, can the Minister for the Interior say whether the Government has decided to replace, at its own expense, the machine which was recently destroyed ?

Mr PATERSON:
CP

– The matter is under consideration. I hope to be able to make an announcement in regard to it shortly.

Mr.HOLLOWAY. - I have been requested by telegram to ask whether, in view of the promise made bythe Minister for the Interior to a deputation representing miners at Tennant Creek, Central Australia, to appoint a commission, or committee, to inquire into and report on the serious charges made by the representatives from Tennant Creek at the deputation, the Minister is in a position to inform honorable members whether he has decided to appoint a commission, or committee, and, if so, whether he can ann ounce itspersonnel, and will say whether the field of inquiry will be sufficiently wide to enable the people of Central Australia, who desire to submit evidence, to do so?

Mr PATERSON:

– I did not undertake to appoint a commission to undertake this inquiry, but I gave a definite promise to the deputation that met me that the charges would be inquired into. Accordingly, I have appointed Mr. Rolland, the Works Director for South Australia, who is hot in any way connected with the administration of the Northern Territory, to make inquiries. Mr.Rolland has been instructed to accept evidence from those who desire to tender it to him on this subject.

page 1873

QUESTION

PARLIAMENTARY STAFFS : APPOINTMENTS

Mr SPEAKER:

– In reply to a question by the honorable member for East Sydney (Mr. Ward) on Friday last, I desire to state that I shall have a. return prepared and laid on the table showing the names, positions, rates of pay, and dates of appointments of the members of the parliamentary staff. As to the procedure of entry of each officer into the parliamentary service, about which the honorable member inquired, I wish to state that the procedure is in accordance with the provisions of the Public Service Act. Considerable investigation would be necessary in order to ascertain the precise procedure in regard to the appointment of each officer, as there are 93 officers on the parliamentary staff, whose service, in some cases, dates back for many years. I am, however, prepared to supply to the honorable member the desired information in regard to any particular officer or officers and to afford him facilities to inspect any file in connexion therewith.

page 1874

PAPERS

The following papers were pre sented : -

Beaches, Fishing Grounds and Sea Routes Protection Act - Regulations amended - Statutory Rules 1936, No.150.

Dried FruitsExport Control Act - Regulations Statutory Rules1936, No. 151.

Northern Territory Acceptance Act and Northern Territory (Administration) Act - Ordinances of 1936 -

No. 11 - Public Service.

No. 12- Coroners (No. 2).

No. 13 - Food and Drugs.

No. 14 - Birds Protection.

No. 15 - Methylated Spirit.

Seat of Government Acceptance Act and

Seat of Government (Administration) Act - Ordinances of 1936 -

No. 44 - Alsatian Dogs.

No. 45 - Motor Traffic.

page 1874

CUSTOMS TARIFF (INDUSTRIES PRESERVATION) BILL 1936

Motion (by Sir Henry Gullett) agreed to -

That he have leave to bring in a bill for an act to amend, the Customs Tariff (Industries Preservation) Act 1921-1933.

Bill brought up, and read a first time.

Second Reading

SIR HENRY GULLETT:
Minister without portfolio, directing negotiations for trade treaties · HentyMinister directing negotiations for trade treaties · UAP

by leave - I move -

That the bill he now read a second time.

The principal purpose of this bill is to amend seetion 7 of the Customs Tariff (Industries Preservation) Act 1921-1933 with a view to providing to Australian industry the full measure of protection which was contemplated when the act was originally framed. The existing section provides for the imposition of dumping freight duty on goods exported to Australia, which are of a class oik ind produced or manufactured in Australia, and which have been or are being carried either free of freight charges or at rates of freight which are lower than the prevailing rates for such goods. These concessions may be on account of the goods being carried in subsidized ships or as ballast, or they may take the form of rebates which are granted in certain circumstances. The dumping freight duty payable on goods coming under the provisions of the existing section is 5 per cent, of the fair market value of such goods at the time of shipment, but a dumping duty calculated on that basis bears no direct relationship to any freight concession which has been, or may be, granted in respect of goods imported under conditions which bring them within the provisions of the section. On the one hand, in respect of goods the fair market value of which is high in relation to their weight or bulk, dumping freight duty calculated on the 5 per cent, basis at present set down in the act has proved more than sufficient to give the desired protection to Australian industry. On the other hand, in the case of goods of low value in comparison with their weight or bulk, as for example, coke, cement, or steel, it has been found that, in some instances, the dumping duty payable under the existing section is not nearly sufficient to provide the protection necessary on account of freight dumping. The position may be illustrated by a shipment of cement which was recently imported in a new vessel which was brought to Australia to engage in trade. The cement was carried as ballast at a freight charge of 15s. 2d. sterling a ton, whereas the normal rate of freight on cement is approximately 26s., sterling, a ton, the difference of 10s. 10d. sterling a ton, representing the actual freight concession allowed on the shipment. Under the existing section 7, however, only1s. 6d. (Australian currency) freight dumping duty can be collected. Even after this freight dumping duty is collected, the importer is still advantaged to the extent of 12s.1d. Australian currency.

The objective of the Customs Tariff (Industries Preservation) Act is to protect Australian industries from goods exported to Australia in circumstances which constitute unfair competition. It is obvious that section 1 of the act as it stands at present does not achieve this objective.

Mr Curtin:

– Hear, hear ! The Government would not admit that before.

Sir HENRY GULLETT:
HENTY, VICTORIA · LP

– It is many years since this was last before the House.

Mr Curtin:

– It is only a few months.

Sir HENRY GULLETT:

– It was a totally different question that was last before the House. It must be obvious that the objective of the act in this respect is not achieved, seeing that in some instances the amount of dumping freight duty which can be charged is quite inadequate to bridge the difference between the concession freight at which goodsare not infrequently carried and the normal freight. Furthermore, the present method of calculating dumping freight duty is unsound, in that the amount of dumping freight duty chargeable on a shipment of goods carried freight free would be the same as that on a similar shipment in respect of which an appreciable proportion of the normal or prevailing rate of freight was paid. It would be 5 per cent.,irrespective of the degree of dumping. In the present bill it is proposed that dumping freight duty, instead of being 5 per cent, of the fair market value, shall be the difference between the actual freight paid or payable, and the normal rate of freight. The Minister for Trade and Customs will determine the normal rate of freight in respect of any goods, but the amendment provides that he cannot determine a rate higher than the highest rate of freight payable on similar goods carried by general cargo vessels trading regularly with Australia. A necessary condition to the operation of section 7 in regard to any class or kind of goods is that, if the Minister is satisfied, after inquiry and report by the Tariff Board, that, by reason of the low freight, detriment may result to an Australian industry, ho publishes a notice in the Gazette, specifying the goods concerned, and thereupon all importations of such goods come within the operation of the section, provided in each case dumping and detriment to local industry are established. In practice, however, action under the section is not always delayed until receipt of a report from the Tariff Board. In cases where the information available indicates the possibility, probability, or certainty, of dumping to the detriment of local industry, and there appears to be need for immediate action, the importer is required to lodge a cash deposit to cover any dumping duty which may subsequently be found to be payable. If, as a result of the Tariff Board inquiry, the goods are gazetted by the Minister, the deposit is then adjusted by retaining the amount found to be payable and refunding the balance, if any, to the importer. . On the other hand, if the Minister does not consider that the circumstances justify the gazettal of the goods, the full amount of the deposit is refunded.

I emphasize the great restraint which Ministers have exercised in using section 7 in the past.

Mr Gregory:

– It was used in 1922-23 by Sir Austin Chapman.

Sir HENRY GULLETT:

– It may have been, but if the honorable gentleman will bear with me for a moment he will realize that action against freight dumping hasbeen extraordinarily infrequent down the years. For instance, during the fifteen years the act has been in existence, only three classes of goods have been dealt with under this section, viz., Portland cement, calcium carbide, and certaintypes of grease. Nevertheless, it is essential, in the interests of Australian industry, that proper provision be made to meet cases in which goods are carried freight free or at concision rates, and it is considered that the proposed amendment as set out in the bill will achieve this purpose.

Mr Curtin:

– Will the Minister tell the House whether the amplification of the Industries Preservation Act, as proposed in this bill, was decided upon recently, or in the remote past.

Sir HENRY GULLETT:

– I am submitting this measure on behalf of my colleague, the Minister for Trade and Customs (Mr. White), and I cannot give the honorable gentleman that information.

It is proposed further to amend the act by the insertion of a new section 12a providing for conversion of the amount of dumping duty under sections 4, 5, and 7 to Australian currency. The reason for this suggested addition is that, owing to the depreciation of Australian currency in relation to sterling since the act was passed, Australian manufacturers are not receiving the protection against dumping which was intended.

I might explain that section 4 relates to goods which are sold to an importer in Australia at an export price which is less than the fair market value of the goods in the country of export. The amount of dumping duty under this section is the difference between the fair market value of the goods at the time of shipment, and the export price. Section 5 covers goods which are sold to an importer in Australia at a price which is less- than a reasonable price. The amount of dumping-below-cost duty under this section is the difference between a reasonable price of the goods at the time of shipment, based on cost of production, and the export price of the goods. This section really covers end-of-season fashion goods and goods of that kind which are goods commonly dumped around the world. Section 7 is the provision for dumping freight duties, the amendment of which is provided for in this bill.

The following example, based on goods gazetted under section 4, will illustrate the necessity for the provision in the bill for conversion of the amount payable as dumping duty into Australian currency : -

Assuming the fair market value iu the country of export to be £5 sterling, and the selling price to the Australian importer £4 sterling, then the difference between £3 and £4 represents £1 sterling. As the act stands at present, however, the dumping duty actually paid is £l Australian currency, and as £1 Australian currency represents considerably less than £1 sterling, it is obvious that, under present conditions, the amount of dumping duty paid is not the actual extent of dumping. The act envisaged that Australian manufacturers would be protected against dumping to the full extent of such dumping, and the proposed new section 12a in this bill ensures this protection, by providing for the conversion into Australian currency of amounts of dumping duty calculated in any other currency.

The amendments are equitable to all interested parties. They give no additional protection to Australian industry, but they ensure that the protection intended by this Parliament shall be a reality.

Debate (on motion by Mr. Curtin) adjourned.

page 1876

TRADE AGREEMENT (CZECHOSLOVAKIA) BILL 1936

Second Reading

Debate resumed from the 29th October (vide page 1418) on motion by Sir HENRY Gullett -

That the bill be now read a second time.

Mr FORDE:
Capricornia

.- 1 do not intend to vote against the bills providing for trade treaties, with Belgium, Czechoslovakia and South Africa, as Australia has already been irrevocably committed by the Minister. I shall, however, offer some criticism of the measures from various aspects. I deplore the fact that the Minister in charge of negotiations for trade treaties (Sir Henry Gullett) insists that the House must accept or reject these treaties holus bolus, as he cannot accept any amendments. In other words, we must endorse his actions willy nilly, and need not offer any suggestions as to how the agreements might be improved. I ask the Minister whether, in saying that the agreements are unalterable, he is carrying out the implied undertaking that Parliament, would be consulted before Australia was definitely committed in this regard. He will probably reply that in his second-reading speech he remarked that Parliament would have to approve the treaties. His words were -

In accordance with the promise given to this House, the treaties ave not being put into operation until they have been approved by the Parliament.

The Minister having obtained Cabinet approval of the treaties, we know that the Parliament is powerless to alter them, since the Minister has said that any amendment would render .all the negotiations useless. The Government has the numbers, but the position is very unsatisfactory, and is similar to that which arose when the Ottawa agreement was before the Parliament.

In outlining the concessions to be made to foreign countries, the Minister did not deny that those benefits would be granted at the expense of certain Australian manufacturers, but he failed to prove that compensating advantages would be derived by Australian primary industries. It is well for the Minister, and honorable members generally, to bear in mind that considerable benefit accrued to the Common- wealth when we encouraged and developed our secondary industries under the policy of protection, in order to cope with the intense competition of countries that have lower standards of living than has Australia. Many of our primary industries have shared the benefits of the policy of protection, if not by reason of protective duties alone, at any rate from the combined effect of those duties and a homemarket price. They have been able to compote on the world’s markets only because they have been given bounties and other concessions, whilst, at the same time, they have enjoyed exclusive rights over the local market. I mention this to show that it cannot be claimed fairly that the benefits of protection have been confined to secondary industries. The diplomatic success of the new treaties is questionable. A succession of them, with similar provisions, would retard the expansion of Australia’s manufacturing industries, and mightcause the decline of many well established secondary industries, with disastrous results to the most important market available to the primary producers, namely, the local market.

Factors which arise in the consideration of the treaty position are related, and, therefore, demand a halt and a general stocktaking before the Minister commits Australia further, behind the back of this Parliament. If the concessions given by Australia are to be effective, and of value to the big factories of Belgium and Czechoslovakia, they must necessarily be damaging to Australia’s secondary industries, otherwise we are adopting a hypocritical policy. The concessions must necessarily prevent the further expansion of certain local industries, oven if they do not bring about a considerable amount of unemployment in them.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– To be logical, the honorable member should say that all trade is dangerous.

Mr.FORDE. - Not at all; but I submit that the advantages to be derived by our primary producers will be negligible, and that a number of our secondary industries will suffer definite loss, a large number of men being thrown out of work. The normal development which would be experienced by certain secondary industries with an improvement in trade gener ally will be prevented, because of the fact that they must now share the Australian market with manufacturers overseas.

No doubt the Minister had to do something to justify his nine and a half months’ trip abroad, his peregrinations in twelve or fourteen countries, and his negotiations with at least seven foreign countries. The pity of it is that he did not give as much attention to securing new industries for Australia as he did to obtaining the foreign connexions connoted by the present bill and the associated measures. Had he done so, the results would have been much more advantageous than they- will be to Australian primary producers. One factory, with only a reasonable number of employees, would provide a considerably larger market, for Australian food products than does Czechoslovakia; and several factories, with their dependent services, would soon equal the Belgian market for the same classes of Australian products. The development and extension of the Australian home market is the soundest possible policy to pursue, for it would not only give to the rural industries a profitable and continually expanding outlet for their products, but also strengthen the Commonwealth from the points of view of finance and defence.

Our exports to Czechoslovakia comprise wool, fruit, lead and zinc, hides and skins, and pearl shell, but our wool accounts for the total value except £184 worth! The Minister did not prove that our export trade to Czechoslovakia in all those products was in jeopardy. In return, Czechoslovakia will supply Australia with textile manufactures such as gloves, trimmings and ornaments, metals, iron and steel bars, glassware and earthenware, fancy goods and imitation jewellery, much of which will compete with the products of Australian factories. Threefourths of the goods which Belgium imports from Australia consists of wool, and it cannot be said that our sale of that product to Belgium is in jeopardy.When the trade diversion policy of the Government was under criticism, the Minister advanced the argument that Japan’s withdrawal from the Australian wool market had increased the price of wool. By following the same line of reasoning it might

W« argued that if another country had declined to buy wool from us the price would have risen still higher. “When it suits it the Government uses two different arguments, one contradictory o the other. In his second reading speech the Minister said that the agreement with Belgium provides for an undertaking to refer a limited number of items to the Tariff Board for inquiry and report. What are those items? And hOW many are affected by that undertaking? How will that procedure affect the secondary industries concerned? The Minister has not answered these questions. Probably we will find that, oversight, quite a number of our secondary industries will be jeopardized by duties that will be brought down without this Parliament being first consulted. In such cases the Minister, no doubt, will tell us that the Tariff Board made an investigation and report and, as he contended in dealing with the Ottawa agreement, will say that the Government must accept the recommendation of the Tariff Board.

I submit that ever since this Government has been in power it has failed to look upon major questions from a purelynational viewpoint. Its views, for the most part, have benn purely sectional, being dictated, in many instances, by vested interests whose concern is always selfish and never national in character. The interests of Australia should receive prior consideration in all matters affecting the nation’s welfare. No one will bc foolish enough to decry the value of our primary industries, but when we are discussing matters pertaining to the economic and financial welfare of the nation, v, e cannot draw any demarcation between the value to Australia of primary industry and that of secondary industry. Both sections of industry are essential, and are interdependent. The best market for the primary producers of Australia is the local market. “Without reasonable prosperity in the primary industries there can be no prospects for the secondary industries. Each branch of industry is of vital importance to Australia’s progress and, of necessity, we must develop our resources by becoming, as far as possible, economically selfsufficient. The Labour party stands for the scientific development side by side of primary and secondary industry. It is somewhat difficult to understand the attitude of the Government in the different policies it has enunciated regarding overseas trade. In bringing down the tariff schedule in May last, the Minister for Trade and Customs (Mr. White) said, in effect, that the reason imports from various foreign countries were being curtailed was in «order to give the major portion of such trade to Great Britain, because the Government felt certain that it would reap an expanding share of the British market. Its contention then was that Australia had to rely almost completely upon the markets of the United Kingdom to absorb our exportable surplus of primary products. In order to do that the Government urged that we must give Great Britain more of our trade by diverting trade from other countries. Today, it contends that we must tie ourselves in water-tight compartments with a number of other foreign countries in order to secure an expanding share of the markets in those countries. In these circumstances I ask how can the Government’s argument in respect of the British market be applied? Dealing with the trade agreements with Belgium and Czechoslovakia, the Minister directing negotiations for trade treaties now points out that there is a limit to the British market and consequently we must now seek foreign markets for some of our primary products. In his second reading speech, he referred to what he termed “ the uncompromising attitude of foreign markets against Australia “. It might well be asked what will eventually become of our fiscal policy if concessions have to be made to all foreign countries that imagine they have some grievance against Australia and desire to share the Australian market with Australian manufacturers. Generally speaking, a trade agreement, while probably smoothing out some difficulties that might arise between Australia and one foreign country, can engender ill-feeling between Australia and a second foreign country that docs not enjoy the concessions and privileges given to the first foreign country.

In his general survey of the economic conditions of the world, the Minister did not recognize the great importance to the primary producers of this country of Ale Australian home market and how important it is that we should do everything possible to increase employment in Australia and greatly augment the number of potential consumers for the products of our pastoral and farming industries. The Prime Minister rightly realized these facts in a speech which he made in Adelaide on the 10th May, 1934. Referring to the danger of tampering with the tariff, he said that during the last ten years the Australian people utilized the following proportions f the country’s primary products : - Agricultural, 65 per cent. ; pastoral, 33 per acut. ; dairy, 80 per cent. ; mining, 46 per cent.; forestry and fisheries, 84 per cent. He went on to say that the motor-body building industry in South Australia paid three times the value of wages paid in the whole of the pastoral industry. I sincerely hope that these facts will not be overlooked by the Minister directing negotiations for trade treaties and other honorable gentlemen who are inclined to disparage the importance of the local market, contending that we must give concession after concession to the manufacturers of foreign countries in order that we may be enabled to sell to those countries some of our primary products, although by so doing we jeopardize the very existence of the secondary industries in Australia which, as the Prime Minister recognized, mean so rauch to the primary producers of this country. The warning given by the Prime Minister can very well be applied to the Government’s present action in giving to overseas manufacturers further concessions which, if they mean anything at all or are to be as effective as the Minister would have us believe, must have serious repercussions in our secondary industries. Any step which will have a detrimental effect on our secondary industries will eventually cause unemployment., and when men are thrown out of work they cease to be consumers. If local production is to be reduced through the sharing of our markets with overseas competitors, we shall not only automatically increase unemployment but also, increase overhead costs with the result that it will be increasingly difficult for our manufacturers to compete with goods imported from overseas.

I shall now quote from a speech made recently by the president of the Chamber of Manufacturers, New South Wales, Mr. Kneeshaw, in which he referred to trade treaties generally.

Sir Henry Gullett:

– Will the honor able member supply me with the date on which the statement he proposes to quote was made?

Mr FORDE:

-*-! shall do so. It reads -

Any restrictive agreement tending to retard or hamper future development of Australia’s national economy was obviously a mistaken policy to pursue.

He went on to say -

The essential conditions of every trade agreement entered into should he the right of Australia’s industrial advancement. This should bc held sacrosanct.

The Australian Industries Preservation League, of which Mr. Hume Cooke is the energetic and capable secretary, said -

The League does not favour trade treaties with any countries outside the Empire. They naturally involve certain obligations, and obligations may lead to serious misunderstanding and friction. Even with our own kith and kin - people speaking the same language, and actuated by the same ideals - if is often times difficult to arrive at or arrange satisfactory trading conditions. The Ottawa Agreement is a case in point. No one is content with it aa it now stands and it must be revised before it is renewed. In the case under notice there was no need to make trade treaties. They would appear to have been made more to justify or perhaps gratify Sir Henry Gullett than to meet any Australian demand. After spending months travelling over half the world searching for countries with which he might conclude trade treaties, Australia is presented with two which, by the sponsor, arc said to be very valuable to Australia. But wherein lies their value?. As far as Belgium is concerned if wool be eliminated - for that is a commodity she must buy, trade treaty or no trade treaty - what remains? Al set out in thu Overseas Trade Bulletin the figures for last year,’ 103i>, are most illuminating. Apart from wool the total purchases of other products from Australia were a little over £047.000 for the kingdom of Belgium. For Czechoslovakia - apart from wool - th<! sales of other Australian produce amounted to £184. The last named amount - for a. whole country - does not come to more than would be purchased by one decent sized family in Australia.

That is the considered opinion of the Australian Industries Protection League, of Melbourne, which cannot be regarded as a political body, although for years its secretary was a Liberal member of this chamber. The popular misconception of the relative worth of our import and export trade, as compared with our manufactures, is best expressed by the economists appointed by the BrucePage Government to report upon the subject. The following is an extract from their report : -

The importance o£ international or external trade is commonly exaggerated. It is always small in proportion to domestic trade; and its volume is no indication of the prosperity of a community. But popular attention is concentrated upon international trade because records arc kept which make it conspicuous, and national boundaries give opportunities for its taxation and regulation.

The growing proportion of locally manufactured goods, involving substantial purchases of raw material for treatment in our Australian factories, enhances the truth of the statement I have just made. The comparative values, of several forms of commercial activity are shown in the following table : -

That shows the importance of the manufacturing industry in Australian development. The employment figures disclose that the number employed in our secondary industries in 1901 was about 200,000, whereas, according to the latest figures available, the number at present employed is about 450,000. An examination of the figures in respect of our primary industries discloses that direct employment in primary industries is less to-day than it was 35 years ago.

Sir Henry Gullett:

– What of the value of production?

Mr FORDE:

– It ha3 increased. Compared with 1901 an additional 9,000,000 acres are under cultivation, and although there are fewer sheep than in 1890, the production of wool and the average wool clip is greater to-day than it was 30 or 40 years ago. In moving the second reading of the bill the Minister said -

No matter in what occupation they lind themselves the people should give wholehearted support to this trade treaty policy of the Government.

It is useless submitting that statement to 400 glass workers at the Crown Crystal Glass Company’s works, which, last year, lost £11,000 and the previous year £30,000, who are threatened with unemployment. These men fear that they will be thrown out of employment because they have been told quite definitely that if these concessions are granted to Belgium and Czchoslovakia the profits of other sections of the industry will be reduced and an unprofitable branch of the industry cannot be continued. If this treaty is ratified the Australian glass manufacturing industry will be most seriously affected. In a letter to the Minister the company has stated quite definitely that if the industry could be developed in the way the company wishes to develop it an additional 2,000 persons could be employed.

Mr Gregory:

– All honorable members have a copy of that letter.

Mr FORDE:

– I know that the Minister has received a letter stating that if the whole of the Australian market were available to the company it could employ an additional 2,000 persona in the industry.

Sir Henry Gullett:

– How many employees are engaged in manufacturing sheet glass?

Mr FORDE:

– That is only one branch of the work, but it provides employment for 400 hands. If the company were given ‘ the whole of the local market, it could increase the number of employees in that department by between 150 and 200. I am informed, however, that there is a likelihood that even the 400 people now employed by the Crown Crystal Glass Company may not be retained, for it has been definitely stated - only time will prove whether it is idle talk or not - that the company does not intend to incur for any further period the losses it has been suffering in the cut-glass section of its works. Last year £11,000 was lost in this department, and in the previous year the loss was £30,000,

Sir Henry Gullett:

– The company’s shares have risen from £1 to £5 each in the market.

Mr FORDE:

– The Minister cannot lightly toss aside the serious considerations that I am offering him. I do not deny that the value of the shares in the company has increased considerably; but is it a crime to conduct a secondary industry at a profit in Australia?

Mr Garden:

– It is the only large company which has not watered its stock.

Mr FORDE:

– That is so. I am quite prepared to concede that it pays large dividends, but it would do honorable gentlemen good to examine the position of the glass manufacturing enterprises of Czechoslovakia and Belgium. Colossal profits are made consistently by these enterprises. If honorable gentlemen opposite who criticize the Australian Glass Manufacturers Company would inform their minds on the subject of the profits of the glass manufacturers of the two countries which are particularly under our notice, they would never again charge the Australian glass manufacturers with exploiting the people.

The Labour party has adopted the policy of New Protection. It believes in the granting of adequate protection to Australian industries, in order that fair rates of wages and decent conditions of work may be provided, and in the maintenance of a reasonable price for manufactured products for the people of Australia. As soon as the Labour party is returned to power it will take definite steps to put the policy of New Protection into immediate operation. If it finds that the limited constitutional power of the Commonwealth is a bar to so doing, it will seek additional power over trade and commerce - not the trifling added power which the Government is now proposing to seek, but adequate power to meet the real needs of the situation.

Let us consider for a few moments some of the commodities which the Minister expects Australians to export in larger quantities to foreign countries as the result of the trade treaties under consideration. One of these is barley. In 1932, Australia exported to Great Britain 312,000 cwt. of barley, or 3.1 per cent. of the total British imports. Russia in the same year exported 2,726,000 cwt. of barley to Great Britain, or 28.6 per cent, of the total. It will be seen, therefore that Russia sold to Great Britain almost nine times as much barley as Australia did in that year. The 1935 figures show that the barley imports from Russia had increased to 6,214,000 cwt., or 36.3 per cent, of the total imported. British imports of barley from the United States of America in 1932 totalled 1,595,000 cwt., or 15.7 of the total, which was five times the quantity sent from Australia to Great Britain, and in 1935 this figure had increased to 2,382,000 cwt. In 1935, Australia exported only 450,000 cwt. of barley to- Great Britain, or 2.6 of the total British imports. Foreign countries supplied 82.4 per cent, of the British imports in that year, while in 1932 foreign countries had supplied only 71.6 per cent, of those imports.. It will be seen, therefore,that the benefit which our barley-growers: were led to expect from the Ottawa agreement has not been realized. There is room for a substantial increase of’ our barley trade with Great Britain, and I suggest that the Minister use his suave powers of persuasion with British Ministers to see whether he can effect an increase of Australia’s barley trade- with the United Kingdom.

Apples, we are told, also offer us opportunity for an extension of trade with foreign countries. Here again, there is room for a considerable expansion of our trade with Great Britain. In 1935 Great Britain imported 2,335,000 bushels of apples from the United States of America, and only 1,527,000 bushels from Australia,the respective percentages to total imports being, 32.1 and 21. The imports of Australian apples into Great Britain in 1932 amounted to 1,684,000 bushels, or 20.8 per cent, of the total imports, so that actually Australia exported more apples tothe United Kingdom before the Ottawa agreement came into operation than it did last year. It was suggested at the time the Ottawa agreement was submitted to the House for ratification that, immediately it became operative,the importation of Australian applesinto

Great Britain would soar to heavenly heights, but that has not been our experience. In respect of both barley and apples, Britain provides a huge market for the producers of the United States of America, although it also has a large adverse trade balance with that country. Why is it that the Commonwealth Government has not been able to secure a larger market in Great Britain for primary products of a kind obtained in immense quantities from foreign countries like the United States of America, with which Britain has such a heavy adverse trade balance?

The Minister referred to the quantities of primary produce imported by certain foreign countries, and contended that Australia could secure a large portion of this trade. Owing to present-day conditions, however, we cannot increase our trade with foreign countries unless we are prepared to sacrifice either our own secondary industries, or the trade which we now do with Great Britain. It is hardly likely that these trade treaties with Belgium and Czechoslovakia will be of any substantial benefit to the producers of Australia if we are to take the Ottawa agreement as any criterion. Every foreign country with which we seek a trade agreement will undoubtedly demand from us a definite quid pro quo. I sound this warning to the Minister before he goes any further in his attempt to justify his peregrinations of nine and a half months round the world to discuss trade matters with representatives of foreign countries.

Most of the articles referred to by the honorable gentleman in his speech are imported by Great Britain in large quantities from countries with which it has large adverse trade balances. The Government would therefore be well advised to occupy its time in fighting for a greater proportion of tha British market. Australia is justly entitled to this concession, in view of the preferences it has given to Great Britain in the past, and is still giving to it. This policy would be of far greater advantage* to the Commonwealth than the seeking of doubtful trade concessions with other countries to the detriment of our secondary industries which are capable of substantial expansion and employing a greatly increased population that will constitute the primary producers very best market.

I find no fault with the Trade Agreement (South Africa) Bill which confirms an agreement between the Government of South Africa and the Commonwealth, and the Opposition will. support it. It ensures that the trade in exports from Australia to South Africa will not be handicapped as the result of any trade agreements entered into by the Union Government with foreign countries. South Africa in return will get the benefit of any reductions of the Australian duties. In my opinion this bil] is not so important as the Minister would have us believe; but it does enable him to claim that he has successfully negotiated another trade agreement. The salvation of the British Empire is bound up in an extension of trade among the members of the British Commonwealth of Nations, and in this respect Great Britain has more to learn than any of the dominions. Australia in the past has been giving to Great Britain preferences estimated to be worth up to £10,000,000 per annum; but in return Great. Britain has granted the Commonwealth preferences valued at only £1,500,000 per annum. Those figures show that there is room for an adjustment to be made with a view to expanding the export of our primary products to Great Britain.

Sir Henry Gullett:

– Hear, hear ! Up to a point.

Mr FORDE:

– The Minister said that one of the justifications of diverting £1,200,000 worth of trade from Japan to Great Britain was that he would be in a position to claim an expanding share of the British market for Australian producers. But now he has informed the House that it is necessary for him to enter into these bilateral trade agreements in order to safeguard our market for wool in Belgium and Czechoslovakia. If the value of wool is omitted from Australia’s exports to Czechoslovakia, it will be found that, that country annually purchases from Australia goods to the value of only £1S4, whilst wool represents more than three-quarters of our exports to Belgium. Win -i defending his trade diversion policy the Minister informed the House that Japan could not obtain wool to satisfy its requirements from any country but Australia. If that be true of Japan, the honorable gentleman cannot say that it is untrue of Belgium. I submit, however, that the wool trade of Australia with Belgium and Czechoslovakia was never in jeopardy. The trade agreements are therefore not so important to Australia as the Minister would lead the House to believe.

Mr GREGORY:
Swan

.- I agree with sentiments expressed by the Deputy Leader of the Opposition (Mr. Forde) in one respect only - namely, that we shall have to accept these bills in the form in which they are presented to us. Honorable members listened attentively to the honorable member’s long exhortation and I am curious to know how much of the material for his speech was supplied by Mr. Hume-Cook, whose remarks he quoted.

Mr Forde:

– None of it; T. merely quoted from a statement by Mr. HumeCook which had been published in the Argus and the Age.

Mr GREGORY:

– If the utterances of the honorable gentleman, which reflect a lack of knowledge, not only of every phase of our economic life, but also of what is required for the development of this country, are the beliefs of the Labour party generally., it will be a bacl day for Australia if that party is ever restored to office.

Mr Forde:

– The honorable member is voicing the views of the Tariff Reform League.

Mr GREGORY:

– In order to develop Australia satisfactorily, a fair and reasonable balance must exist between primary and secondary production. If successive Federal Governments continue to give effect to policies which place the whole of the burden of sacrifice upon the primary industries to the point of menacing their existence, as is now being done, the time will fast, come when the Country party will have seriously to consider its position. It may be compelled to withdraw its support from all other parties and play a solitary hand in the interests of the primary industries, which produce the only real wealth of Australia. The present policy of the Government is wholly contrary to the policy, and prejudicial to the interests, of the Country party. The Deputy Leader of the Opposition referred extensively to our export commodities; he failed to realize that every year imports to a value of between £30,000,000 and £40,000,000 are admitted almost wholly free of duty in order thai; Australian manufacturers may obtain cheaply the raw materials required for their industries. How are those purchases financed? Only a small fraction of the manufactured goods is sold abroad, and I have no hesitation in saying that the credits overseas are created entirely by the sale of primary commodities in the face of world competition. The Deputy Leader of the Opposition this afternoon, laid down the policy of the Labour party and ‘ endeavoured to lead the Australian public to believe that if his party were returned to office it would give effect to that policy. The honorable gentleman referred to the Economists’ Report of 1928. I advise him carefully to read it and to reflect upon the deductions which may be made from it. I remind honorable members of the attitude adopted by every member of the Bruce-Page administration almost immediately after that report was printed. The present Minister directing negotiations for trade treaties (Sir Henry Gullett), who was then Minister for Trade and Customs, now propounds every conceivable expedient in order to restrict the volume of imports into Australia, and to grant favours to those engaged in the sheltered industries.

Sir Henry Gullett:

– The world, is very different, to-day.

Mr GREGORY:

– The honorable gentleman has made so many conflicting speeches that he cannot remember his various changes of attitude.

Sir Henry Gullett:

– At any rate I did not vote for the payment of the gold bounty.

Mr GREGORY:

– Who asked for the gold bounty? Immediately foi1 owing the printing of the Economists’ Report a long statement was prepared on behalf of the Bruce-Page administration. I have been informed by a Minister of that day that the report was considered by Cabinet for a fortnight and that every phase of it was approved by Ministers. The then Prime Minister (Mr. Bruce: subsequently made a speech, in the course of which he said -

Two alternatives face Australia to-day. Either we can resolutely attack this problem of reducing our cost of production, and by so doing reduce our costs of living, expand cnr avenues of employment, maintain and augment our standards of living, and increase our national wealth; or we can refuse to recognize the needs of the position and allow our national wealth to diminish, and unemployment to increase until, faced with a national crisis, wc are forced to lower our standards of living and re-orientate the whole of -our national life. Between (hose two alternative can there be any hesitation ?

The present Minister directing negotiations for trade treaties (Sir Henry Gullett), the Minister for Commerce (Dr. Earle Page), the then Attorney-General (Sir John Latham) and others approved of that policy and admitted the danger that was likely to follow the putting of undue difficulties in the way of the primary producer; and yet these same Ministers are now supporting a policy that is wholly destructive to the producer. I do not think that anything more outrageous was ever done by a government in Australia than the embargo against the importation of glass from Belgium, thus destroying the only market available to the meat producers of the Kimberleys, and seriously interfering with the export market of the barley producers of South Australia. And for what purpose? Merely in order to grant a concession to one manufacturing corporation in Australia.

Mr Forde:

– It was the Lyons Government which imposed the embargo. The Government of which I was a member merely put into operation the deferred duties imposed during the Pratten regime.

Mr GREGORY:

– It is proposed in this new agreement to permit the importation of stipulated quantities of glass, discretion in this respect being given to the Minister. It is a limited concession, for imports will be permitted only -at the whim of the Minister. However, if it satisfies Belgium, it again opens up a market for our producers. The Deputy Leader of the Opposition (Mr. Forde) argued that the restriction of imports would tend to create employment in Australia. I remind him that, according to sworn evidence given before the Tariff

Board, Lysaghts Limited once imported 10,000 tons of galvanized iron, and then requested of the Minister for Trade and Customs, who at that time was the honorable member for Capricornia (Mr. Forde), and obtained, an embargo upon the importation of further supplies of iron on the ground that such an embargo would create employment in Australia.

I have here a copy of the New Zealand tariff, and of the agreement which the Government of New Zealand made with Belgium. The primary producers in New Zealand have benefited to a wonderful extent from the trade arrangements entered into by their Government. Whereas we have imposed duties of 100s., 160s., and as much as 200s. a ton on wire, wire netting and barbed wire, the New Zealand Government has fixed duties of only 10 per cent, and 15 per cent, on those articles. The authorities in New Zealand are also to be commended upon, the manner in which the customs tariff papers are presented. They contain full information regarding rates, dumping duties, &c, so that members of Parliament may see at a glance the exact position in regard to all tariff items. Although the same information is available here in regard to our tariff, it is not put together in one handy booklet as has been done in New Zealand.

I know that the terms of this agreement cannot be varied by the Parliament, because that would have the effect of annulling the whole agreement. I trust, however, that every effort will be made by the Government to create better feeling between Australia and other countries. I desire to emphasize how necessary it is that we should build up in Australia a strong, self-reliant yeomanry, but before that can be done we must ensure that those on the land are able to ma.ke a reasonable living. It is only necessary to compare costs of production in the primary industries at the present time with those prevailing 30 years ago in order to understand how difficult has become the lot of the primary producers.. It is true that the price of wool to-day is satisfactory, and that the price of wheat is improving ; but those prices are in Australian currency, and are low compared with the gold prices ruling up to 199.9.

Mr McEWEN:
Echuca

.- The Minister directing negotiations for trade treaties (Sir Henry Gullett) is to be congratulated upon the successful outcome of the negotiations which he has been conducting with Czechoslovakia and Belgium, and which have culminated in the bills now before the chamber. One of the first duties of the Government of Australia should be to improve trading conditions, so far as it can, with respect to those commodities which Australia exports. We should realize that it would be impossible for Australia, as a debtor nation, to discharge its obligations overseas or to establish credits for the purchase abroad . of goods which we do not make here unless we can sell our exportable products at a satisfactory price.

Mr Garden:

– What commodities are we unable to produce here?

Mr McEWEN:

– The honorable member must know that, among other things, we cannot produce rubber, oil, jute and many chemicals. If we wish to maintain a decent standard of living in Australia, we must import many things, and we must establish credits overseas with which to pay for them. There is only one way to do that, namely, to export commodities and sell them on the world’s market. We should not forget that, during the last few years, we very nearly reached a stage at which we could not have gone on exporting because we wereproducing and selling at a loss, and that can be done for only a limited time. It was essential, therefore, that the Government should devote its attention to establishing overseas markets that would provide a profitable outlet for our exportable commodities.

The Deputy Leader of the Opposition (Mr. Forde) stated to-day, as on many previous occasions, that the Australian marketwas the most profitable for the primary producer.

Mr Garden:

– Surely the honorable member will not contradict that.

Mr McEWEN:

– Evidently the honorable member for Cook (Mr. Garden) agrees with the Deputy Leader of the Opposition, yet he was one of those who, quite recently, in this House voted against the measure which proposed to make sure that it would be possible so to legislate that the Australian market could be made more profitable to the primary . producers than the overseas market. We who have been associated with primary production know that the notion that the, Australian market is, in respect of all commodities, the best market, is fallacious. Unless legislative action has been taken to ensure otherwise, the Australian consumer buys our export commodities at the price at which the overseas purchaser buys, less all the costs of transporting those commodities overseas, and selling them on the world’s market. The unqualified claim of the Deputy Leader of the Opposition that under our present system the Australian consumer is the best, the most profitable and the most satisfactory purchaser of the products of Australian industry is entirely fallacious. That, beyond any doubt, is a state of affairs that should exist, and every honorable member in this House should devote himself to bring it about. We had proof on a recent occasion, however, that the co-operation of the Labour party to that end is not likely to be given.

Mr. SPEAKER (Hon. G. J. Bell).Order !

Mr McEWEN:

– I say, however, thai the trade treaties under consideration will have the effect of establishing a measure of stability in connexion with the sale of some of our products overseas, that would not . otherwise obtain. The degree of stability that exists with regard to any market has a definite bearing upon price levels. The threats made by Belgium some years ago that it would impose an embargo against the importation of Australian beef and barley-

Sir Henry Gullett:

– They were made again this year.

Mr McEWEN:

– They were first made when Australia placed an embargo on the importation of Belgian glass, and they had a depressing effect on Australian prices for barley and beef. Those very threats were, in themselves, a contributing factor to the Australian consumers of those products securing them at lower prices. I was surprised to hear the Deputy Leader of the Opposition deal so fully with many minor commondities which we export to Belgium, and yet avoid entirely mention of what used to be our second most important export to that country, namely, beef. .1 was particularly surprised that he did not deal with the beef industry in view of the fact that his party will, at an early date, be facing an election in an area where the production and sale of beef are matters of vital concern to the cattle raisers. The electors of the division of Kennedy would be very interested to learn the views of the Deputy Leader of the Opposition upon the subject of our trade in beef with Belgium. Perhaps it is not yet too late for some members of the Opposition to indicate in this House and to the electors of Kennedy the attitude of the Labour party when there is conflict of interest between the Australian producers of beef and the Australian manufacturers of glass. That matter needs clarifying, and is one upon which the electors of Kennedy are entitled to be informed. The Government has already indicated that it is prepared to give proper consideration to those engaged in the primary industries. For the outcome of these trade negotiations, the Government is entitled to congratulation. It would be more fitting if those who are prepared to vote for this measure, as the Opposition apparently is, would also speak for it, and not put themselves in the questionable position of speaking very wholeheartedly against, a measure for which they propose to vote.

Mr. ARCHIE CAMERON (Barker) [4.36J. - As one of those who have not, been over-moderate in their criticism of the Minister directing negotiations for trade treaties (Sir Henry Gullett), I am pleased that at last two trade treaties have been introduced for parliamentary approval. For a long time nothing was achieved by his department, and I quite frankly admit that I was beginning to question the wisdom of maintaining a department so barren of achievement.

Sir Henry Gullett:

– I have no department; apart from a secretary and typists, no staff is specially allotted to the work.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– I recognize that the Minister is really in charge on a branch of the Prime Minister’s Department. In the trade agreements with Czechoslovakia, and Belgium, which we have before’ us to-day, we have at last some tangible transference into actual fact of the policy enunciated by the Government parties at the last election that, if they were returned to office, they would endeavour by negotiation to establish better trade relations with certain countries.

I cannot accept the attitude adopted by the Deputy Leader of the Opposition (Mr. Forde) in regard to local prices. The honorable member argued that the local market is the best market for Australian producers. From personal experience as a producer I say that it does not matter two. hoots to me, whether, eventually, the wheat or the wool that 1 grow is sold in Australia or on the overseas markets; the return is th, same in either case. That is equally true of barley and a great number of other commodities which I could name.

Mr Forde:

– What about the dried fruits and butter industries?

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– Any increase of the prices of butter and dried fruits at the present time is problematical. If the policy of the Opposition on this question be accepted by the electors at the referendum, there will be no homeconsumption prices for butter or dried fruits, and these industries may be forced to the wall. - The honorable gentleman is foolish in raising that issue in this debate.

Mr Forde:

– The taxpayers provided nearly £14,000,000 for assistance to the wheat-growers, and a home-consumption price for wheat was fixed.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– There lias never been a home-consumption price for wheat. Again, it was not due to any efforts of the Labour Opposition that the bill to assist the wheat-growers, was passed last year. There was no great enthusiasm on the part of honorable members opposite for anything except a compulsory pool. Some of the other points raised - by the Deputy Leader of the Opposition show that he does not appreciate the implication, of trade relations between Australia and the countries with which agreements have been made. The honorable member castigated Great Britain for not taking a greater proportion of Australian barley. The type of barley grown in South Australia is not such as sells readily on the

British market; the barley imported into that market is of a type altogether different from that which we can produce in South Australia. The principal market for barley of that type is Belgium, and to Belgium most of it must go.

The honorable gentleman also referred to the apple trade of the United Kingdom. Surely he must realize that the Australian apple reaches the overseas market at atime altogether different from that of apples grown in the northern hemisphere, including the United States of America! Very definite arrangements have been made in the treaty with Czechoslovakia to ensure that Australian apples shall not enjoy this beneficial duty unless they are marketed in Czechoslovakia within three months of their having been picked in Australia. The reason for that is to avoid their being held over in London or Antwerp, and then thrown on the Czechoslovak market when the fruit crop of the northern hemisphere is normally supplying the needs of the people of that country. Czechoslovakia, in addition to being a very highly-advanced manufacturing country, is also a great agricultural country, andI have no doubt that this measure will benefit both its people and the Australian exporter of apples. Our apple-growers will have better access to the market at atime when it may be beneficial for supplies to be removed from the London market to Antwerp or Hamburg, where the Czechoslovaks generally buy their foreign supplies.

The Deputy Leader of the Opposition (Mr. Forde) raised another interesting point when he said that it is the policy of his party that there should be a closer trade relationship and a greater interchange of goods between Great Britain and Australia, and the other parts of the British Empire. I have always understood from the attitude adopted by the Labour party towards the Ottawa agreement, that that was extremely doubtful.

Mr Forde:

– I said that Australia should be given a definite quid pro quo; that the agreement should not be onesided.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– The honorable gentleman generally wishes to obtain about “five quid” pro quo when he is entering into trade negotiations.

Mr Forde:

– If I erred, it would be on the side of Australia.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– In the past the honorable gentleman has erred on the side of everybody except Australia.

Mr Forde:

– Oh, no !

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– No greater disservice to the Australian community, either primary or secondary producing, has been done than was done by the honorable gentleman in certain cases while he was Minister for Trade and Customs.

Mr.Curtin. - That remark is not called for.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– The honorable gentleman may refute it if he can.I make it as an absolutely definite statement. If members of the Opposition wish to fight on that issue, they will find that there are members in this corner who are quite prepared to defend the statement.

Mr Forde:

– But the honorable member has not made a similar observation in regard to the present Government, which has clone the same thing in respect of Japan.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– I thought that I said enough about the present Government recently. In fact, I said so much that the Oppositiori gave me leave to continue my speech, so that I might say more. Consequently, I cannot see what justification the honorable gentleman has for raising that objection.

Mr Forde:

– No country was ever provoked by the Scullin Government as Japan has been by this Government.

Mr DEPUTY SPEAKER (Mr Prowse:
FORREST, WESTERN AUSTRALIA

– Order! The Deputy Leader of the Opposition must not continue to interject.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– The honorable gentleman produced another interesting situation when he pleaded for the extension of the home market. As far as I am able to understand the matter, the home market may be enlarged only by an increase of the population, either by natural means,’ or by means of immigration. If the honorable gentleman’s statements in regard to an enlargement of the local market are to be taken seriously, and are intended to mean any.thng in the electorate, then I should say that in the next policy speech of the Labour party on the occasion of a general election, a definite pronouncement will be made of the methods by which it is intended that that enlargement shall be achieved. Mere platitudes are of no value ; a practical policy is called for. A circumspect study of the political barometer convinces me that it would be just as well if honorable members opposite were fairly specific in their statements on matters of that nature.

The general attitude of Australia, towards trade relations is undergoing a fairly definite change. The community as a whole is beginning to realize that what I describe most charitably as the “ dog in the manger “ attitude of the Commonwealth on trade matters is becoming unpopular in country and city alike. There is a feeling among all classes of the community that there should be some lifting of the rather drastic trade prohibitions that have been enforced. The Government must have considered this position f airly thoroughly, for I cannot conceive of the High Commissioner delivering himself at Geneva of the sentiments that he there uttered in regard to the necessity for greater freedom of trade in the world to-day, unless he had been so instructed by the Government. Whatever party is in power, if it is prepared to introduce measures that will have the effect of lowering trade barriers and of lightening the load of those who are willing to purchase surplus production, it is entitled to the support of every reasonable member of Parliament who has at heart the welfare of the community generally. On that ground, we cannot do other than endorse the two treaties which the Minister directing negotiations for trade treaties has placed before us to-day.

Mr GARDEN:
Cook

.- With the whole world practising economic nationalism, trade treaties are unavoidable. I offer no objection to trade treaties as such, but am opposed to the view of members of the Country party, that it does not matter whether the Australian or any other market absorbs our production.

Mr McEwen:

– We have not said any such thing.

Mr GARDEN:

– The honorable member for Barker (Mr. Archie Cameron) has said so.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– I said that so far as the net financial result to the farmer is concerned it does not make any difference.

Mr GARDEN:

– Those who claim to represent the farmers in this House do not care where our primary production is disposed of.

Mr McEwen:

– No one has said that.

Mr GARDEN:

– That the Australian market is the best for the farmers of this country cannot be gainsaid. Every new industry established in Australia improves the conditions of the primary producers. Commendation has been passed upon the treaty that has been made with Belgium. I should like to know whether that country has purchased any South Australian barley since the embargo on the importation of Belgian glass was lifted.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– It has.

Mr GARDEN:

– The embargo was lifted nearly nine months ago. Belgium expressed the intention of buying all the barley that Australia exported, yet it has not bought one shipload.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– No one ever suggested that it should take all our exports.

Mr GARDEN:

– Last year Belgium bought barley from France, its next-door neighbour, because France had a surplus of that commodity. As the Deputy Leader of the Opposition (Mr. Forde) has asked, where has Great. Britain purchased its requirements of barley? Its purchases have been made from the United States of America and Russia. It is argued, of course, that Australian barley suits the requirements of Belgium but not of Great Britain. I do not know whether the Belgians prefer whisky made from Australian barley rather than from barley grown in any other country.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– Australian barley is a malting, not a distilling barley.

Mr GARDEN:

– I am referring to malting barley. What other commodities does Belgium buy from Australia? Does it buy Australian meat.

Mr McEwen:

– At one time it bought quite a lot.

Mr GARDEN:

– The Belgians prefer horseflesh to Australian beef.

Mr Gregory:

– They were the only buyers of beef from the Wyndham Meat Works.

Mr GARDEN:

– They do not buy Australian beef at the present time.

Mr McEwen:

– They bought the whole of the output of the Wyndham Meat Works until the Labour Government put the embargo on glass.

Mr Curtin:

– The Labour Government did not put the embargo on glass; that was the act of the Lyons Government.

Mr.Forde. - And it was during the regime of a Lyons Administration that the prohibition against the importation of meat and barley into Belgium was imposed in 1932.

Country party members interjecting.

Mr GARDEN:

– I can always raise a chorus.

Mr DEPUTY SPEAKER:

– The honorable member must address the Chair.

Mr GARDEN:

– I was addressing the Chair.

Mr DEPUTY SPEAKER:

– The honorable member was not addressing the Chair, and I ask him to do so.

Mr GARDEN:

– I was addressing the Chair.

Mr DEPUTY SPEAKER:

– Order ! I shall ask the honorable member to resume his seat if he persists in defying the Chair.

Mr GARDEN:

– I claim my right, as a member of this House, to make my speech without interruption. Interjections are made, ‘ yet the offending member is not called to order. I am speaking to the subject before the Chair. Why does not the Chair deal with the interjectors? Whenever I speak I am interrupted by the Chair.

Mr DEPUTY SPEAKER:

– Order ! When I asked the honorable member for Cook to address the Chair, it was not my intention to interrupt him or to infringe in any way his rights as a member of this House. I ask him not to be so insolent to the Chair. He will now proceed with his speech, and address the Chair.

Mr GARDEN:

– I ask for the withdrawal of the word “ insolent “.

Mr DEPUTY SPEAKER:

– Order !

Mr GARDEN:

– I claim my right. I am not insolent to the Chair, and I ask that that expression be withdrawn.

Mr DEPUTY SPEAKER:

– Order ! The honorable member is now disobeying and disregarding the instruction of the Chair. If he continues to do so, I shall be obliged to name him. I ask him to continue his speech.

Mr GARDEN:

– I wish to ask one question: You, sir, have charged me with insolence. I ask you, as Deputy Speaker, to inform me as to what action I should take to obtain the withdrawal of that charge? As a member of this House,I claim that withdrawal as a right.

Mr DEPUTY SPEAKER:

– Order! Disregard of the ruling of the Chair is at all times insolence.

Mr Curtin:

– There is a difference between disorder; and insolence.

Mr GARDEN:

– I am dissatisfied with the position in which I have been placed. Whenever you, sir, preside over our deliberations, either as Deputy Speaker or as Chairman of Committees, you interrupt my remarks.

Mr DEPUTY SPEAKER:

– Order! The honorable member will resume his seat.

Mr Curtin:

– That is pretty “ tough “ !

Mr. Garden having resumed his seat.

Mr Curtin:

-I rise to a point of order. I submit that if the honorable member for Cook (Mr. Garden) was disorderly in replying to the insolent interjections of the honorable member for Richmond (Mr. R. Green), the Chair should take notice also of that honorable gentleman’s conduct.

The DEPUTY SPEAKER:

– There is no point of order. The conduct of the honorable member for Cook justified even stronger action than that taken by the Chair.

Mr JENNINGS:
Watson

.- I am not opposed to the bill before the House, because I realize the necessity for developing Australia’s trade with overseas countries, and because I have some conception of the difficulty experienced by the Minister in arranging trade treaties with countries which, have adopted a policy of economic nationalism. I am concerned, however, with the need to preserve Australia’s secondary industries, particularly when I reflect that Australia’s emergence from the depression was largely due to their expansion, and the greater home marketthereby provided for Australian primary products. The implementing of this, and the other treaties to which the Minister has referred, may affect a number of Australian secondary industries, including the manufacture of jewellery. Since the price of gold has risen so considerably, there has been a much larger demand for the cheaper types of jewellery, particularly that made of rolled gold, with the result that the importations of such articles from Czechoslovakia have grown considerably during recent years. I point out that industries of this nature are encouraged’ ;n Great Britain, because of the ease with which the factories could be converted to other use in a ‘national emergency, and I urge the Government to take that aspect into consideration. I suggest that the Commerce Act be amended so that imported jewellery will have to conform to the standards in operation in the United States of America and Australia.

The implementing of this agreement may also arversely affect Australian manufacturers of cut glass. Our factories are now producing cut glass which, we arc told, is equal to the best that the world can produce, with the result that, citing the list which I have here, not only have the prices of many articles of cut glassware been reduced by 45 per cent., but also the number of workers employed has been doubled during the last four years. I am informed that the manufacture of cut glass is conducted at a loss, but that the manufacturers are carrying on in the hope that, eventually, that department of their industry also will show a profit and they will be able to compete with overseas traders. I ask the Minister to keep in mind the claims of these two industries.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

First schedule.

Mr JENNINGS:
Watson

.- I should like an assurance from the Minis.ter that my rep resell tat ions in connexion with jewellery and cut glass will not bc overlooked.

Sir Henry Gullett:

– I shall keep them in mind.

Mr FORDE:
Capricornia

.- There is fear in some quarters that, under this treaty, importations of gum boots will increase, to the disadvantage of Australian manufacturers of such articles. I should like an assurance from the Minister that the effect of the treaty, will be watched, and that if it is found that these articles enter Australia in greatly increased numbers, the matter will be referred to the Tariff Board for investigation and report.

Sir HENRY GULLETT:
Minister directing negotiations for trade treaties · Henty · UAP

– The proposed concessions in respect, of goods of Czechoslovak origin will not, in any case, bring the duties below those recommended by the Tariff Board. Reductions of primage duty, and, in some instances, of revenue duties as the result of exchange adjustments, have taken place. Should it be thought that the duties are inadequate, Australian manufacturers of gum boots, and other articles in respect: of which concessions are to be given to Czechoslovakia, may, as now, make application to the Customs Department for the matter to be referred to the Tariff Board. Duties do not become fixed because concessions have been made the basis of a treaty. The treaty simply gives to Czechoslovakia the intermediate tariff rate - whatever that rate is now or may become in the future. Although concessions to Czechoslovakia are proposed in respect of sand-shoes and goloshes, no concession is proposed in respect of gum boots.

Mr Forde:

– I take it that the duties were not previously put into operation pending successful negotiations for a treaty with Czechoslovakia.

Sir HENRY GULLETT:

– That is so.

First schedule agreed to.

Second schedule.

Mr FORDE:
Capricornia

.- The Minister was good enough to grant an interview to representatives of the glass-workers’ union a few days ago. 1 a in informed that the Australian company which manufactures cut glass made a loss in its cut glass department of £.1.2,000 last year, and in the previous year, £30,0.00, and has intimated that this unprofitable branch of the industry will have to be discontinued if this treaty is ratified by the Parliament, for whereas those losses were formerly covered by profits in other departments, the removal of the protection given to those departments makes a continuation of that policy bad and impossible. The manufacture of cut glass, although unprofitable, gives employment to about 400 men, who are paid from £3 12s. 6d. to £5 15s. a week for adult male labour, but they will be thrown out of employment if the department in which they are working is closed clown, and they and their dependants will surfer want and privation. In similar works in Belgium skilled workmen receive lOd. an hour,- in England ls. to ls. 4id., while in Australia the rate is from ls. Sd. to 2s. 2¾d. In its report, the Tariff Board stated that the exchange rate of 25 per cent, represented a protection of 20 per cent, to Australian manufacturers. The company disputes that claim on the ground that the exchange referred to by the Tariff Board is between England and Australia and does not provide for a fall of exchange, between a foreign country and London. A few weeks ago Czechoslovak exchange on London dropped from 9G to 109 crowns to the pound sterling. But the Australian industry does not get any increased protection us the result of that fall because there has been no variation of the- exchange between London and Australia. The result is that goods are imported at a cheaper rate from Czechoslovakia and the duty which was previously effective is not now effective. A further reason is the manipulation of the exchange by a foreign country such as Germany. Nobody knows the ins and outs of that manipulation, but in Germany they have two different kinds of marks. The mark is the German currency and the reichmark is the standard value of the mark, but when it comes to exports Germany employs an exchange value known as the askimark, and the effect is that German goods are. landed in this country at 15 per cent, to 20 per cent, below what they otherwise would be. The manipulation is worked in conjunction with the German Government. That is a further illustration of how the 25 per cent exchange between London and Australia is not giving Australian industries the 20 per cent, protection which the Government says that it does give, but the Tariff Board’s recommendation is based on the assumption that the 25 per cent exchange is worth 20 per cent protection.

France a few weeks ago, with the approval of the United States of America and the United Kingdom, reduced the exchange value of the franc. That immediately made it possible to land French goods here at a lower cost than before. The other continental countries followed France’s lead, and that is what gave rise to the Czechoslovak variation of exchange. In March, 1926, although the Tai-iff Board recommended a protection of 50 per cent, on practically all lines of table glassware, the Government did not put it into operation. On the contrary it continued the rate of 60 per cent., reserving the rate of 50 per cent, as an intermediate tariff to be extended to countries under trade treaties. The two trade treaties, with which the House is now dealing, one with Belgium and the other with Czechoslovakia, are the first. Others will probably follow. Conditions have changed since the Tariff Board made its recommendation to the extent that foreign exchanges have varied. In short a company which has 2,900 Australian shareholders who are looking to it to pay a dividend is now faced with a reduced profit on the profitable lines and an increased loss on the unprofitable lines! Consequently something has to go ; the unprofitable lines will have to be cut out. My fear is that the 400 employees of the Crown Crystal Glass works are to be thrown out of employment if the company’s statement to the men is to be carried out. I want the Minister to go deeper into this matter and to take whatever steps may be necessary to ensure that those men will not be thrown out of employment. We have been told that, as the result of the Government’s decision, the company must cut its losses by eliminating its unprofitable enterprises, and if that comes about the men employed must lose their positions.

Window glass will continue tq come in under the quota by which the output of the Australian factory is restricted to a little more than one-half of its capacity, the effect of which is’ that the Australian company has no scope to reduce its overhead costs and prices, and the purchasers of window glass pay a higher price than they would have to pay if the whole of the market were reserved to the local industry. More than 400 persons’ are already employed by the Australian Window Glass Factory, but if it had the whole of the Australian market another 150 or 200 men would be absorbed. If adequate protection were given to all branches of the industry a further 2,000 men could be employed in the various activities of this company.

I was chided with having imposed a total prohibition against the importation of sheet glass when I was Minister for Trade and Customs in the Scullin Ministry. As a matter of fact, all that the Scullin Government did was to introduce the Pratten deferred duty on glass as soon as the Australian factory was in a. position to manufacture sufficient quantities to meet the Australian demand. When the honorable member for EdenMonaro (Mr. Perkins) was Acting Minister for Trade and Customs in 1932, the Lyons Government reduced the duties on sheet glass one week, and the next week, when the company protested, imposed a total prohibition on its importation. It was then that the Government of Belgium, for the first time, prohibited the importation of Australian beef and barley. Thus the importation of sheet glass was not prohibited during the regime of the Scullin Government; it was prohibited during the regime of the Lyons Government.

The quota now operating is fixed on an expected annual use of 12,500,000 square feet of window glass, which is described in these bills as “ plain clear sheet glass “. The Australian factory is allowed 7,500,000 square feet out of that 12,500,000 square feet, and the rest is to come from Belgium and Great Britain, but mostly from Belgium. That arrangement is not disturbed by these treaties. The Belgian Government and the Commonwealth Government evidently had in mind the possibility of their actions fore. ing the local factory to close down, because the following provision was’ made in clause 5 of the trade agreement with Belgium : -

In the event of cessation of production of plain and clear sheet glass in Australia,, thu Government in thu Commonwealth of Australia shall have the right to abolish all restrictions on the importation of this product. In that event, Belgian plain sheet glass shall be admitted into, Australia either under thu rates of duty specified in paragraph 4; or under the most favoured rates of duty granted to any other foreign country, which ever is the lower.

I hope it will never occur that a factory employing 400 men will be forced out of production. It would be a retrograde move.

Article 1 of the Articles of Agreement. Explanatory Notes (Czechoslovakia) reads -

This its a form of the “ most favoured nation “ clause which assures to each party to the agreement tariff treatment at least a.s favorable as that accorded by the other party to any other foreign nation. Thus, Australia will automatically receive the benefit of any duty concession which Czechoslovakia has already made, or may afterwards make, to any third State, and, similarly, Czechoslovakia will receive such duty concessions as Australia has afforded or may afford, to any other foreign nation.

From this it can be taken that any concession given to Czechoslovakia must also apply to Belgium. From my reading of the schedule, it would appear that, under the heading “Trade agreement in which item appears”, where Belgium is mentioned the concession applies to Belgium only, but, under the article that I have just quoted, it would also apply to Czechoslovakia and to any other foreign nation with which Australia may, in future,, make a similar trade treaty. From the Minister’s speech, it is clear that the trade agreement with Czechoslovakia shall be binding for one year from the date of its coming into force, but, according to article 8 of the agreement -

It will be open for a party to the agreement to give three months’ notice before the expiration of the said period of one year of its intention to terminate the present treaty. If that notice is not given the treaty shall remain in force until the expiration of three months from the date either of the contracting parties shall have given to the other notice of its intention to terminate it.

In the explanatory notes of article 9, it is shown that the agreement with Bel- gium is of an indefinite duration and will remain in force until terminated by six months’ notice by either party. Reading article 6 of the trade agreement with Belgium, I find that the following provision is made: - in thu event of cither party adopting any measure which adversely affects specified products reaching another country, the matter may at the request of the injured party become the subject of consultation with, a view to a satisfactory adjustment of any dispute which arises. If an understanding is not reached the party which considers that its interests have been prejudiced may withdraw a concession to balance the loss it hoa suffered.

That appears to mc to be an attempt to tie the hands of any future governments on this matter.

Sir Henry Gullett:

– A treaty can be determined at any time by giving six months’ notice.

Mr FORDE:

– That is so, but I think the Minister has shown Belgium how to retaliate should increased protection be given by any future government to Australian secondary industries, which might exclude a product of Belgium; it might lead to earlier retaliation than otherwise would have been the case.

The Minister will say that the Australian Glass Company has made profits,

  1. am not here to justify any profits made by the Australian glassworks, or any other manufacturing concern. There is a way of dealing with such a state of affairs, but it, is better to have manufacturing done in Australia, although the manufacturers may make profits, than to import manufactured goods from some other country, and thereby give employment to workers in that country at the expense of Australian workers. In any case, is it a crime to conduct an industry at a profit? If the industry were unprofitable we would be told that it was uneconomic and should not be protected further. This country has taxation laws which it can employ to check excessive profit-making. The policy of this party is that of New Protection, and, in the event of this party regaining the treasury bench, it would ensure, not only that the public was not exploited, but also that those engaged in industry were given reasonable standards of wages and conditions. I do not think that the accusation that the glass company is” making profits in other departments will remove the fear we have that the men engaged in the glassware industry are threatened with unemployment. From June, 1932, until September, 1936, a reduction of just over 45 per cent, was made in the average selling prices of the goods produced by two or three glassware factories in Australia. This reduction was due in the first place to improved organization and greater output which brought about a reduction of costs-

The TEMPORARY CHAIRMAN.The honorable member has exhausted his time.

Mr PERKINS:
Monaro · Eden

[5.20 1. - I .realize the .Minister in charge of negotiations for trade treaties (Sir Henry Gullett), in the preparation of a schedule of this kind, had a very difficult task to perform. It was like trying to make omelettes without breaking eggs. He had to consider a good many points, but it seems to me that a little more consideration might have been given to the cutglass industry. The Deputy Leader of the Opposition (Mr. Forde) has already pointed out the steps which I took as Acting Minister for Trade and Customs in 1932 to place this industry on a permanent footing. After careful inquiry, the Lyons Government decided to take a course totally different from that which it took at the outset. I had the opportunity to visit the factory where cutglass is produced, and I saw the artisans at work. Their number is 400.* They are workers who are, specially trained in this class of work, and, if the factory closed down I do not know what would become of them. Their work is their livelihood, and they have been specially trained in an industry in which special training is necessary. I hope the Minister will realize the serious consequences which would attend the closing down of this industry. The Australian Glass Company does not receive much sympathy form people who know that the price of its shares is at a high level, and that it is paying good dividends. To-day, however, the committee is dealing with a particular section of the glass industry, the cut-glass section, which is giving employment to 400 men directly and probably to a few more hundreds indirectly. It is a nonpaying branch of the industry, but its organizers are trying to place it on a sound footing. It produces a first class article, and Australiahas good cause to be proud of it.

Mr Jennings:

– Its product is equal to the world’s best.

Mr PERKINS:

– As . my honorable colleague has pointed out, the standard of its products is equal to the world’s best.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– If that section of the industry cannot make a profit with the duty at the present it is not worth worrying about.

Mr PERKINS:

– This factory, despite intense competition from overseas firms, and despite the fact that it loses on sales, has been able to reducethe prices of its products. It is not charging exorbitant,, prices. There is great hope for the industry, and it hopes to swell the number of its employees to 2,000. I do not envy the Minister in his task, but . I hope that he will give this aspect of the matter deep consideration.I saw the honorable gentleman at work overseas, and know how difficult is his job, but I should like an assurance that he has considered the matter in every detail. It should be possible to make some alteration of the agreement which will assure the continuance of this section of the industry. The company has given an assurance that if its operations are not seriously interfered with, it will establish a. plant in South Australia for the manufacture of cut glass goods.

Sir HENRY GULLETT:
HentyMinister directing negotiations for trade treaties · UAP

– In regard to cut glass from Czechoslovakia, which was mentioned by the Deputy Leader of the Opposition (Mr. Forde) and the honorable member for Eden-Monaro (Mr. Perkins), I emphasize the fact that the Government has taken the position of this Australian industry into full and sympathetic consideration. In drawing up the concessions to be granted to Czechoslovakia, the Government observed the level of duties recommended by the Tariff Board. It is true that the present level is 60 per cent, ad valorem, plus 10 per cent, primage. The rates which will operate if the treaty becomes law will he 50 per cent, plus 5 per cent, primage; but the rates actually recommended by the board were 50 per cent., without primage.

I do not intend to attack this Australian industry, but I ought to point out the extraordinarily happy financial position of this great glass company. It is true that the Crown Crystal Company is a subsidiary of the Australian Glass Company, but their interests are interwoven. Nobody can say that the finance of the one is not the finance of the other, as the capital is the same. A same remark may be applied to the sheet glass subsidiary company. I was told by a deputation introduced to me a few days ago by the Deputy Leader of the Opposition (Mr. Forde) that the Crown Crystal Company lost £12,000 or £13,000 last year, and £30,000 the year before. It lost those sums as a subsidiary of the. great parent company, whose profits and progress, even during the depression period, have been of a phenomenal kind. Since 1929 its net profits have been as follows: -

Mr Forde:

– That is on the original capital.

Sir HENRY GULLETT:

– I admit that; but so optimistic a view do the investors in Australia take of the future of this company, notwithstanding the drag of the crown crystal and sheet glass subsidiaries, the latter of which we thought was “going to the dogs “, that on the 10th of this month they offered 98s. for shares originally issued at £1 each.

Mr Forde:

– They would be getting less than 3 per cent.

Sir HENRY GULLETT:

– Yes, on the present market value; but investors do not buy those shares to earn less than 3 per cent. They have a strong belief that the company is so prosperous that the value of the shares will enhance.

Mr Curtin:

– If that be so, why does anybody sell them?

Sir HENRY GULLETT:

– That is a matter between buyer and seller. Honorable members opposite can scarcely say that a company like this is in need of very great consideration at the hands of this Parliament.

Mr.Forde. - We have expressed concern for the 400 men who are threatened with loss of employment.

Sir HENRY GULLETT:

– But are they threatened ? The company is to have the benefit of the rates recommended by the Tariff Board. In arranging these treaties the Government has in no instance gone below the level recommended by the board. Ever since this Government has been in power, it has observed that level. During its term of office, employment has steadily increased. I do not make the boast that the improvement is wholly due to the work of this Government, but it has taken place despite the fact that it has operated the policy of adhering to the. Tariff Board “ level. With the growth of employment, the enhancement of share values, and the increase of dividends, the Government was reasonably safe in entering into these treaties, and it is showing a proper concern for Australian industries by continuing to observe the level of rates recommended by the board.

On the subject of exchange, which was mentioned by the Deputy Leader of the Opposition, I point out that in this case the exchange with Czechoslovakia is still solidly in favour of Australia. Until quite recently Czechoslovakia was on the gold standard, and it is still much nearer that standard than is Australia. Taking gold as being represented by the figure 100, Czechoslovakia to-day is on 69, sterling is 61, and Australia is slightly under 50, so that Australia has, by way of exchange, a protection over and above the Tariff Board level of almost 20 per cent. The local industry has a natural protection on glass of 10 per cent., an exchange protection of 20 per cent., a duty of 50 per cent, ad valorem, and primage amounting to 5 per cent. That, I suggest, is a most reasonable measure of protection.

Mr GARDEN:
Cook

.- I should like the Minister to make the position clear in regard to the 400 skilled employees in the cut glass industry who are threatened with loss of employment. During the last four months the currency of Czechoslovakia has depreciated to the extent of 17½ per cent., and if that country continues to adopt that policy its goods may be exported to Australia at prices with which the local industry could not possibly compete. The company is in a solid financial position, but I am concerned as to the welfare of its employees, who have been informed that, if the treaty becomes law, they may be displaced. The work accomplished by these skilled men is of the highest order, the product of the company being considered equal to the Stuart crystal from Great Britain. I should like to know whether, in the event of the employment of these men being in jeopardy, the duties will be referred to the Tariff Board for further revision, or whether ratification of the treaty would prevent the matter from being further considered by the board.

Sir HENRY GULLETT:
HENTY, VICTORIA · LP

– Under these treaties no protective duties will be absolutely fixed.

Mr GARDEN:

– I am pleased to have that assurance from the Minister.

Mr GREGORY:
Swan

.- Under Item 242b the usual rates are 10s. per 100 square feet British preferential, and 15s. general, but I notice that under the treaty they are to be 10s. British, 15s. intermediate, and 40s. general. I have heard no statement from the Government to the effect that the intermediate rate was fixed by increasing the general rate.For all foreign countries other than Belgium, the duty on plate, polished and opaque glass has been 15s. per 100 square feet, but it is now to be 40s, per 100 square feet. There has been an extraordinary increase of duty; but I heard no reference in the Minister’s speech to the fact that the general rate had been increased for the purpose of making these concessions. It has only just come under my notice. I should like information on this point in respect of items 242b and 243a under which the general rate has been increased from 15s. to 40s.

Mr FORDE:
Capricornia

.- I should like to know whether the dumping provisions in the bill considered earlier, dealing chiefly with freights on imports from abroad, will apply also to the items covered by these schedules.

Sir HENRY Gullett:

– They will apply against all countries.

Mr FORDE:

– I am glad to have the Minister’s assurance; that” is quite fair. I should like to emphasize a point which I was making previously when my time expired. From June, 1932, when the Australian Glass Company first became a real factor in the cut crystal business, to September, 1936, there has been a reduction of just over 45 per cent, of the average selling price of cut crystal. Although the industry claims to be responsible for bringing the prices down by that percentage, it has really ‘been forced to do so in order to meet competition. Therefore, in spite of exchange, which is supposed to protect the industry to a great extent, goods are being landed here from overseas countries at about half the price they were bringing in 1932. The Minister, chided, the Australian Glass Company on its profits., but he has not quoted the profits of Belgian and Czechoslovak companies. “We know that at the bottom of the depression those companies were reaping twice the price in Australia that they are getting to-day, because they have now to meet the competition of the Australian company. What applies to the Australian Glass Company in that respect, also applies to Australian companies in other industries. The glass company has already cut its prices so heavily that it will not be able to withstand the reductions which the Czechoslovak and Belgian companies will be able to make as the result of the variation of the exchange rate and the -reduction of duty consequent upon these treaties.

One views with concern the effect of these schedules on quite a number of our secondary industries. The manufacturers concerned have not yet- protested because 99 per cent, of them do not realize fully the effect of these provisions, which are a maze to them. They cannot comprehend the full import of a schedule of this nature. The schedules are published in the newspapers, but the manufacturers as a whole are really ignorant of what is happening until they have to meet replies from prospective customers that they are able to get cheaper quotes from overseas factories. Some of the items affected ave ^Piecegoods (felt or containing wool), buckles, buttons, artificial flowers and apparel. Costumes (cotton or other material) show a reduction from 4s. to ls 9d. each; costumes (wool, or containing wool or silk) from 9s. to 3s. 6d. each; coats, jumpers, cardigans and sweaters, from 6s. to 3s. each ; women’s or men’s jumpers, from 13s., to 5s. 6d. each; costumes, dresses or robes (cotton), from 12s. to 8s.; costumes (wool or containing wool), from 21s. to 10s. and costumes (wool or containing silk), from 30s. to 12s. All of these goods are imported from Czechoslovakia, but such reductions will also apply to goods from Belgium or from any other country with which a similar treaty is arranged. Felt hats, (item 114c) show a reduction from 60s. to 54s. a dozen; hoods for girls and women’s hats, fur felt hoods and velour, from 39s. to 36s. a dozen; dynamo electric machines (item 179d), from 65 per cent, to 50 per cent., and white lead (item 231), from 8s. 6d. to 7s. a cwt.

I also notice that under item 242, which covers Belgian plain, clear sheet glass, there is a reduction of the primage rate from 10 per cent, to free. This applies to Britain as well as to Belgium. It is an absolute gift to the importer, because the selling price of glass in Australia will not be affected by any reduced landed cost of the glass. The whole of the trade is governed by quotas and the selling price is governed by the retail price of the Australian manufactured article which is not influenced in any way by the reduction of primage on imported glass. Thus the additional profit will go to the distributor, and not the purchaser, of glass.

Sir HENRY GULLETT:
Minister directing negotiations for trade treaties · Henty · UAP

– Replying to the honorable member for Cook (Mr. Garden) as to the possible effect upon protection in the event of the exchange position becoming altered, I point out that the pre: sent recommendation of the Tariff Board, which becomes operative under this treaty - a duty of 50 per cent. - ^provides for an increase of the protective duty as the exchange falls. Furthermore, if and when exchange returns to a parity with Australia, the rate of 50 per cent, will actually become 70 per cent. Thus there is every reason to believe that the position is quite adequately safeguarded.

As to the other point raised by the honorable member, I repeat that this new intermediate rate is not a consolidated rate but is free to go up and down as the Tariff Board recommends; and the recommendations of the board are adopted by the Government and referred to this House, before being finally included in a statute. There is nothing fixed about these rates.

Mr Forde:

– But if there is a substantial increase, will not the other countries have the right to retaliate?

Sir HENRY GULLETT:

– Not necessarily; only if it appears under what is known as the escape clause in the Belgian agreement, that one country is taking action prejudicial to the interests of the other.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– Or discriminatory action?

Sir HENRY GULLETT:

– Yes ; or if one country takes action which is against the spirit, and not necessarily against the letter, of the agreement. This safeguard has been provided for the benefit of both sides; it is similar to that provided in international treaties of one shape or another at the present time, to avoid their being determined for minor breaches. If one country is of opinion that a breach is being committed by the other side, it can withdraw certain concessions. It is then open for the parties to confer on the matters involved with a view to finding a way out of the difficulty.

The local glass industry is quite well safeguarded so far as this treaty is concerned. I cannot subscribe to the delightful suggestion made by the Deputy Leader of the Opposition (Mr. Forde) that no complaints have come from chambers of manufacturers against these two treaties because the manufacturers concerned do not understand the effect of them, or have not taken the trouble to learn what these changes mean. I am sure that the honorable member did not put that suggestion seriously before the. committee.

Mr Forde:

– The manufacturers generally do not realize the full effect of these schedules.

Sir HENRY GULLETT:

– I venture to say that every manufacturer of goods affected by these variations of the tariff levels has placed them under the microscope and is very well satisfied with the changes. If the case were otherwise he would have had his opinion expressed in this debate. As a matter of fact, how- ever, we have had extraordinarily little complaint.

I protest against a wealthy company like the Australian Glass Company, which is left with these duties on a sliding scale so that the duty will rise as the exchange goes against Australian interests, practically threatening its employees with instant dismissal if these schedules are adopted. It is not the first time that this company has acted in this manner. However, such action is quite unusual among the manufacturers of this country, and I am surprised that this practice should be followed by the Australian Glass Company. I deeply deplore it.

The honorable member for Swan (Mr. Gregory) has pointed out that the Government has increased the general rate. That is true. It has done so in order to emphasize the concession given to Belgium with respect to plate glass. It creates, however, ‘no monopoly in plate glass for Belgium. Belgium and Britain are now the two suppliers of plate glass of this kind which is not manufactured in Australia. We have increased the general rate, as apart from the intermediate rate, to make that concession to Belgium mora tangible than it would otherwise be.

Second schedule agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill - *by leave-** read a third time.

page 1897

TRADE AGREEMENT (BELGIUM) BILL 1936

Debate resumed from the 29th October (vide page 1421), on motion by Sir Henry Gullett-^

That the bill be now read a second time.

Mr FORDE:
Capricornia

.- I referred to this measure when speaking on the Trade Agreement (Czechoslovakia) Bill and I have nothing further to add.

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.

page 1898

TRADE AGREEMENT (SOUTH AFRICA) BILL 1936

Debate resumed from the 29th October (vide page 1421 ),. ou motion by Sir HENRY Gullett - . ‘

That the bill be now .read a second time.

Question resolved in the affirmative.

Bill read a second time and reported from committee without amendment or debate; report adopted.

Bill - -bv leave - read a third time.

page 1898

TRADE COMMISSIONERS BILL 1936

Second Reading

Mr THORBY:
Assistant Minister for Commerce · Calare · CP

– I move -

That the hill be now read a second time.

No new principle is involved in this measure. Its purpose is to amend the Trade Commissioners Act 1933, which provides for the appointment of Trade Commissioners and Assistant Trade Commissioners, and prescribes the conditions under which such appointments may be made. Up to the present Trade Commissioner posts have been established in Canada, New Zealand, Japan, China, and Netherlands Indies. Each post carries a Trade Commissioner and an Assistant Trade Commissioner, and the positions have been filled either by seconding officers from the Commonwealth Public Service or by appointments from the’ commercial world. These appointments have so far been limited ,to a fixed term - in the case of public servants, 3 years; and in the case of outside appointments, 5 years. It is essential that the Government should be in a position to provide, by regulations, a uniform scale of remuneration and conditions of employment for a permanent establishment; but it is also necessary for the present to retain some elasticity to permit of short-term appointments at remunerations sufficiently attractive to high grade men. Whilst it is not at present,- contemplated to provide a scale of remuneration for a permanent establishment, it is desired to prescribe by regulations a standard set of conditions covering allowances, transport, leave of absence,- and” the many miscellaneous matters which enter into the management of a personnel service. The existing act requires that the conditions of service shall be determined by the GovernorGeneral. Tills requires all the details of appointment and conditions of service to be set out in each case in a minute for the Governor-General in Council. Under existing conditions particulars have ‘to be prepared covering the appointment “;of a junior- or an interpreter who may be engaged for only a brief period, thus causing a good deal of unnecessary work and delay. The amendments proposed will overcome such delays.

The amendments proposed in clauses 2 and 3 and paragraph (c) of clause 4 have, therefore, been framed to permit of Trade Commissioners and Assistant Trade Commissioners being appointed for such periods and upon such conditions and remuneration as are prescribed by regulations, or as the Governor-General in any particular case, may determine.

The bill also provides for an amendment of the principal act in two other directions, both of which relate to officers seconded from the Public Service. Section 6(1) (b) of the principal act provides that a public servant who is appointed as a Trade Commissioner or Assistant Trade Commissioner “shall retain all his existing and accruing rights “. The intention- is that an officer should retain his Public Service rights in respect of sick leave, long:service leave, and superannuation. The words “ existing and accruing rights “ appearing in the principal act have not been assigned a specific meaning, and there is some doubt whether the declaration as it stands is fully effective in preserving the rights of public servants. To ensure that such rights are preserved, section 6 of the principal act is amended by inserting after sub-section 1 of that section a subsection applying the Officers’ Rights Declaration’ Act to public servants seconded to the Trade Commissioner Service. This is similar to the provision in the export control acts covering meat, dried fruits and canned fruits, which safeguard the rights of the secretaries of the respective .boards, all of whom are public servants. “Section 6(1) (d) of the principal act provides that a public servant who has been appointed as a Trade Com- missioner or Assistant Trade Commissioner shall, unlesshehas been dismissed for misconduct, be entitled to reappointment to the Public Service. Clause 4, paragraph (a) of the bill adds a further qualification to exclude from re-appointment to the Public Service officers who are over the retiring age.

The measure is to simplify the conditions under which Trade Commissioners, Assistant Trade Commissioners, and their staffs, are appointed. It also preserves the rights of public servants appointed to such positions should they return to Australia and be re-appointed to a government department. The bill governs the conditions generally of such men, and gives power to frame regulations setting out the conditions under which staffs shall be appointed, the remuneration they shall be paid, and the leave to which they are entitled. Honorable members will appreciate the fact that it is difficult to provide precise conditions governing the employment of nationals of the country in which a Trade Commissioner’s office is established. The measure governs the employment of persons living in foreign countries where the remuneration, cost of living, and conditions generally, differ from those in Australia. If Parliament agrees to the passage of the bill the Government will be empowered to frame regulations to deal with general conditions governing the personnel.

Debate on motion (by Mr. Curtin) adjourned.

page 1899

LANDS ACQUISITION BILL 1936

Debate resumed from the 13th November (vide page . 1864), on motion by Mr.

MENZIES -

That the bill be now read a second time.

Mr CURTIN:
Fremantle

.- The Opposition is prepared to expedite the passage of this bill. The explanation of the measure given by the Attorney-General (Mr. Menzies) in his second-reading speech indicates that its purpose is to simplify procedure in determining claims for compensation arisingout of the acquisition of property bythe Government for government purposes. Amendments of the nature of those now pro posed have been under the consideration of successive governments over a period of years.

Mr Menzies:

– The general proposals of the bill were mootedas early as 1924.

Mr CURTIN:

– As it appears desirable to incorporate theseamendments in the principal act without further delay the passage of the bill should be facilitated.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Bill - byleave- read a third time.

Sitting suspended from6.9 to 8 p.m.

page 1899

QUESTION

TARIFF PROPOSALS 1936

In Committee of Ways and Means: Debate resumed from the 29th October (vide page 1434), on motion by Sir Henry Gullett) (vide page 1422) -

That the schedule to the Customs Tariffs 1933,as amended by the Customs Tariff 1936, and as proposed to he amended by the Customs Tariff Proposals introduced into the House of Representatives on the twenty-second day of May, One thousand nine hundred and thirty-six, be further amended as hereunder set out. . . .

Sir HENRY GULLETT:
HentyMinister directing negotiations for trade treaties · UAP

– The House having this afternoon agreed to the bills confirming the Czechoslovak and Belgian treaties, I ask the committee to take the consequential step of agreeing to the tariff proposals to implement the duties covered by those treaties. These tariff alterations contain nothing but the actual changes which are set out in the two treaties.

Question resolved in the affirmative.

Resolution reported.

page 1899

INCOME TAX BILL 1936

Debate resumed from the13th November (vide page 1861), on motion by Mr. Casey -

That the bill be now read a second time.

Mr CURTIN:
Fremantle

.- The bill before the House relates to the income tax rates to be imposed upon taxpayers during the present financial year, and is the machinery measure togive effect to the relevant proposals set out in the budget. In the general debate on the budget, the Opposition indicated its views on the subject of taxation. Honorable members will note that the bill effects a. reduction of the normal rate of tax by 10 per cent. in relation to both income tax derived from personal exertion and income derived from property. This concession follows on a reduction of 15 per cent. which was made in 1933-34; also, no provision is made in the bill for the special property tax, which will, therefore, cease to operate. This omission may be counted as a substantial additional reduction of the tax on income derived from property. The effect altogether is that on the higher ranges of income both from personal exertion and from property the remissions this year are a substantial relief to the individual taxpayer, and in the aggregate, will involve the Treasury in a loss of £2,105,000 this year; that is to say, that amount of money would have been available had the remissions not been made.

Mr Casey:

– The sum of £2,105,000 is not involved this year. The remission is at the rate of that amount per annum; but this year the amount will be less.

Mr CURTIN:

– Because, I assume, the remission relates to only nine months of the financial year.

Mr Casey:

– That is so.

Mr CURTIN:

– I concede that this reduction will relate only to the balance of the financial year; but in all probability the Treasurer will continue this concession to the taxpayer for a full period of twelve months.

Mr Casey:

– I hope so.

Mr CURTIN:

– And the taxpayers of Australia will be saved £2,105,000 in a period of twelve months, whereas the Treasury will not lose all that money this year ; the balance will be lost in the following’ year. I draw attention to the fact that this bill, because the provision for the special property tax is no longer maintained, effects reductions of the tax on income derived from property to a much more substantial degree than is the case in respect of income derived from personal exertion. In the tables which were circulated by the Treasurer at the time of his budget speech, the reduction of the tax is set out as follows: -

I know that it will be urged that the greater part of these savings in respect of income from property is due to the fact that the special property tax is no longer being continued. But even if the collections from the special property tax be excluded, the remissions in favour of income derived from property are larger than are those in respect of incomes derived from personal exertion. It appears to me to be wrong for the Government to have made these larger concessions to owners of property, while at the same time asking this Parliament, in other measures, to make increased provision for defence. It is incongruous that we should be remitting substantial taxation on incomes derived from property at a time when we are committed to large-scale expenditure for the defence of Australia. If the insurance policy on Australian property is going to cost more, as appears to be the case, it seems to be an inappropriate time to reduce the payments by property for its own protection. The Opposition has no objection to the bill.

Mr NOCK:
Riverina

.- Complaints have been made by primary producers regarding the manner of assessing the value of natural increase of stock, and also in regard to allowances for depreciation. The regulations provide that depreciation on farm plant shall be at the rate of 10 per cent. per annum. It is pointed out, however, that in the case of a new machine valued at, say, £100, the full 10 per cent. of depreciation is allowed for the first year. Thus, at the end of the first year, the value of the plant is assessed at £90, and it is stated that at the end of the second year, instead of another £10 being taken off, only £9, or 10 per cent. of the remaining value of £90, is deducted. Thus, instead of the value of the plant being written off in ten years, it would take twenty years to write off a machine that is worn out in tcn. Farmers would like some information on this point.

Mr CASEY:
Treasurer · Corio · UAP

– I remind the honorable member that this is a rates bill, but I hope that, within the next ten days or so, a bill to amend the Income Tax Assessment Act will be brought down,, and I shall then have an opportunity to discuss the matter mentioned by him.

The speech of the Leader of the Opposition (Mr. Curtin) did 1101, raise any points requiring explanation. The Government has examined the whole matter very carefully, and every effort has been made to achieve fairness in regard to reductions of both direct and indirect taxation. The abolition of the special property tax will cost the revenue, for a full twelve months, just over £1,000,000, while the reduction of. the rate by 10 per cent, will be responsible for a further loss of £385,000. I do not contest the statement of the Leader of the Oppositionthat the aggregate loss in respect of all the Government’s ‘proposals in relation to income tax will be over £2,000,000 for a full twelve months.

Question resolved in the affirmative.

Bill read a second time.

In committer::

The bill.

Mr JAMES:
Hunter

.- The bill contains no provision for a concession in respect of income from personal exertion earned by taxpayers with unemployed dependants. Seeing that exemptions and remissions have been granted to the wealthy sections of the community, some consideration should be given to the class I mention. Frequent representations have been made for an allowance of £50 for unemployed dependent children over sixteen years of age similar to that granted for those under sixteen.

The CHAIRMAN (Mr. Prowse.This is a rates bill, ‘ and the honorable member may not discuss such matters on a bill of this kind.

Mr NOCK:
Riverina

.- In the third and fourth schedules to the bill, reference is made to rates of tax, and to the average income over a period of years. I point out, however, that the averaging of rates, and the averaging of amounts, are two different things. The

Parliament of New South Wales has included both provisions in its act, and that policy is much more equitable. No one escapes taxation, and no one pays more than he should.; I believe that the Royal Commission on Taxation gave the matter consideration at one time, and I should like’ to know whether the Treasurer (Mr. Casey) has given any thought to it.

Mr CASEY:
Treasurer · Corio · UAP

– The practice of the Government in this connexion has not been altered. So far as I can recollect, the report of the royal commission contained nothing to indicate that any injury or injustice is being inflicted under the present method. As honorable members know, the averaging provision was continued for some years in respect of all members of the community, but after a certain lapse of time - I think about three years - it ceases to apply to any but primary producers. There are two methods of averaging inherent in this bill; there is the averaging system proper, to which we have been accustomed for some years, and which still applies to all members of the community ; and then there is the notional income method which applies to the sale of a leasehold, but the two methods of averaging cannot both be adopted by the same individual at the same time. The reason for this was canvassed fully during the passage of the Income Tax Assessment bill through this chamber when it was pointed out that, there would be no gain to the average primary producer by the adoption of both methods.

Mr Nock:

– I was referring to the average rate and the average amount.

Mr CASEY:

– ‘I am not conversant with the practice in New South Wales, but I can assure the honorable member that the Government is not departing from its usual procedure. Adoption of the system suggested by the honorable member might give advantage in some instances to the taxpayer, but it would cause administrative complications. Indeed, during a period when ‘the income of the taxpayer was declining, it might even operate tq his disadvantage. I admit that I have not had typical cases worked out in order to see how it would apply, but during the three years thatI have been at the Treasury, I have received no representations in support of the proposal which the honorable member now mentions. I believe that the adoption of the averaging principle has been a considerable advantage to primary producers, and it” is being adhered to for the future.

Mr Nairn:

– What is meant by the expression “notional income”?

Mr CASEY:

– The expression occurs in the report of the Royal Commission on Taxation, and it has reference to the proceeds of the sale of private leaseholds. It is held that the premium obtained on the sale of a leasehold represents commuted rent. In ordinary circumstances, the amount thus received would be regarded as income for the year in which the sale is made, and would be taxed in that year, but it has been suggested that, as the proceeds of the sale really represent commuted rent, it is only fair to reduce the rate of tax chargeable on the taxable income of the. year in which the premium is received. A notional income is struck by dividing the premium by one half of the number of years of the term of the lease, and tax is charged on the amount of the premium at a rate attributable to the notional income. Of course, if the taxpayer derives other income in addition to the premium, this other income is added to the notional income to arrive at the rate. The system “ tempers the wind “ to the taxpayer.

Mr Curtin:

– But we still do not know what is meant by notional income.

Mr CASEY:

– Notional income is the income arrived at by dividing the amount of the premium - that is, the proceeds of the sale of the lease - by one-half of the number of the unexpired years of the lease. Thus, if a taxpayer sells a lease with ten years to run for £10,000, and he receives this amount during the year, the full amount is not taken into account in the year of the sale, but for rate purposes is divided by five, and taken into account at the rate of £2,000.

Mr Perkins:

– Would it not be possible for the first schedule to be couched in language that the ordinary taxpayer could understand?

Mr CASEY:

– The schedule to a bill is a legal document, and has tobe expressed in legally water-tight terms. I think that, actually, there is no great intricacy in it once we get over the somewhat formidable appearance of the formula. If honorable members will look at the formula, they will see that originally the rate was arrived at by applying

pound of taxable income up to and including £6,000, and for every £3 in excess of that amount a flat rate of 68.85d. is charged. In respect of property income, it is not quite as simple, in that the curve advances, not in a straight line, but in a series of short steps, the steps being indicated by the three formulas, which vary from each other until the total income of £3,700 is reached, and above that amount, the flat rate is Sid. in the £1. That rate, I think, will satisfy even the Leader of the Opposition.

Bill agreed to and reported without amendment.; report adopted.

Bill read a third time.

page 1902

FEDERAL AID ROADS BILL 1936

Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message) :

Mr.CASEY (Corio - Treasurer) [8.36].- I move-

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to authorize the execution by or onbehalf of the Commonwealth of agreements between the Commonwealth and the States in relation to the construction, reconstruction, maintenance, or repairof roads, and to make provision for the carrying out thereof.

This bill is for the purpose of extending the operation of the Federal Aid Roads Agreement of 1931 for six months from the 31st December, 1936, to the 30th June, 1937. The original agreement came into operation from the 1st July, 3 926, and was to cover a period of ten years. In 3933, however, when the agreement had been in force forfive years, it was revised, and its operation extended so that the original and amending agreements covered a period of ten and a half years, from the . 1st July, 1926, to the 31st December, 1936. Some months ago, it became evident that, in order that the Treasurers of the Commonwealth and States should have firm figures on which to base their estimates for 1936-37, it would be expedient to extend the operation of the agreement to cover the whole of the financial year 1936-37. This extension was agreed to by all governments and agreements have been signed to that effect. The conditions of the grant are not touched by this bill and agreement in any way. The effect is merely to extend the 1931 agreement. The rates of duty imposed on petrol, and their allocation between the Commonwealth and States are as follows : -

In the case of benzol the excise duty is 11/2d. only a gallon, the whole of which is paid to the States. It is anticipated that the total payment to the States in 3936-37 for roads purposes will be approximately £3,000,000.’ The apportionment of Federal Aid Roads moneys between the States since theinception of these agreements in 1926 has been made on the following basis: - Tasmania receives one-twentieth; the remaining nineteentwentieths is divided between the other five States on the basis of three-fifth population and two-fifths area. Tasmania received special consideration as otherwise its share would have been inadequate. The payments to the indi vidual States during the last three years have been as follows : -

The total payments to all States in each year since the inception of the agreement to the 30th June, 1936, have been : -

As tothe purposes for which the Federal Aid Roads grant is made available, under the original agreement these moneys were to be used solely on construction andreconstruction of main, trunk and arterial roads. The States were obliged to expend 15s. for each £1 granted by the Commonwealth. Under the agreement which took effect from 1931, the Commonwealth grant could be used for construction,reconstruction, maintenance or repair of roads - any roads - and the States were exempted from the contribution of15s. for every £1 provided by the Commonwealth. The 1931 agreement is still in force and with the passage of the present bill its life will be extended from the 31st December. 1936, to the 30th June 1937. A new agreement, to operate from the 1st July, 1937, is now being drafted and will be submitted later to Parliament. It will be for ten years fromthe date men tioned. and will increase by slightly more than 20 per cent. the present rate of payment to the States.

Mr CURTIN:
Fremantle

.- At this stage I indicate that the Opposition is prepared to allow thisbill to go 1:0 the second reading stage this evening. But I point out that the committee is more or less in a helpless position in regard to agreements of this kind. The resolution asks us to adopt an agreement which has already been arrived at, and if we vary the text of the agreement in any way, the arrangement will become null and void. The effect of any alteration would be that the States would lose the benefit of the contribution by the Commonwealth for a period of six months longer than that covered by the present agreement.

Mr Casey:

– The agreement is subject to ratification by Parliament.

Mr CURTIN:

– Of course it is, but it is not subject to any textual change. As a result, this committee is in the position of having to ratify or completely reject the agreements arrived at between Ministers of State representing the Commonwealth and State governments. The deliberative capacity and competence of this Parliament, and of the Parliaments of the- States, are destroyed by this procedure.

Mr McEwen:

– What different procedure would the honorable gentleman suggest?

Mr CURTIN:

– The honorable gentleman has various suggestions which he thinks ought to feature in these agreements. I tell him that there is no possibility of their inclusion because, were he to succeed in amending the agreement, it would not be the agreement that has been arrived at by the States and the Commonwealth. Possibly, after a long series of further conferences, other parties to the agreement might consent to vary it in order to meet the opinions of this Parliament. In practice, however, that procedure is impracticable and gets us nowhere. Every agreement, whether it be with respect to a trade treaty, federal aid roads, or marketing, absolutely handcuffs this Parliament; it has to say either “yes” or “ no “, and if it should say “ no “, the other party to the agreement is in all probability left high and dry, because, being unable to make a good bargain for him, we leave him without any bargain.

Mr Brennan:

– And the Commonwealth carries the blame.

Mr CURTIN:

– That is so. This Parliament has the sole responsibility of raising the money for the construction of federal, aid roads.

Mr Blain:

– And the trouble is, that there is no check on the expenditure.

Mr CURTIN:

– As the honorable member for the Northern Territory (Mr. Blain) has said, there is no check on the expenditure. The Commonwealth bears all the brunt of the criticism of the users of petrol for what is called the excessive tax imposed on petrol. A good deal of the money so raised is probably expended quite wisely by the States.

Mr Blain:

– A lot of it is not.

Mr CURTIN:

– No one will argue that all the road programmes implemented under the federal aid roads policy have been of advantage to Australia. Many of these roads have been built parallel to existing main lines of railway, and have only served practically to endanger the solvency of one of the principal instrumentalities of the State itself. The States certainly have done that deliberately. The Commonwealth has had no choice in the matter, other than to agree to provide the money. We want to be clear as to -what this resolution means. It means, in fact, that for a further period of six months the Commonwealth will hand over to the States a part of the proceeds of the tax imposed on petrol.

Mr Blain:

– For a spending spree.

Mr. CURTIN. I do not say that. In the main, I agree that the States have probably used the money as wisely as they could have used it. The fault, I think, lies in the fact that this Parliament can make only one reply - it can either reject the agreement and leave the States with no funds and no plan for road construction, or. it can accept the agreement. It has little or no voice in the working out of those general legislative details in respect of federal aid roads which I believe are a logical part of the duty of the Parliament that raises the revenue. There I leave the matter.

Mr PERKINS:
Monaro · Eden

. -It is unquestionable that when the Federal Aid Roads Act was passed in 1926 it was intended to be not a taxation measure but merely a means to derive revenue to be handed over to the States for the purpose of road construction. On the whole, it has not been contested by the users of motor cars, although there may have been some complaint as to the manner in which the money has been spent. The owners of motor vehicles have not concerned themselves as to whether the roads constructed have been parallel with or away from existing lines of railway. The average motorist realizes that he has obtained some return for that portion of the proceeds of the tax which is devoted to roads, but he is not in favour of the retention by the Commonwealth of the balance of the proceeds for general revenue purposes. He is anxious that the tax should not be used principally as a means of raising revenue for other than road purposes. The Government should recognize that the tax is an unfair one in that it is a sectional impost, a part of the proceeds of which is devoted to the carrying out of Commonwealth works, the cost of which should be borne by the whole of the community. For this reason I hope that in the new agreement provision will be made for the reduction of the amount that passes into general revenue. I should like an additional amount to be handed to the States for distribution among shires and municipalities, in order that they might devote more attention to secondary roads within their areas. Their taxation field is very restricted, and a large proportion of their revenue is absorbed in overhead expenses. Some shires that have contributed through the petrol tax to the fund for the construction of roads have not had a yard of main road constructed to their boundaries. Those that are in isolated parts of the Commonwealth are deserving of some consideration. I have no objection to the proposal of the Treasurer (Mr. Casey), who, I consider, has done well. He was not responsible for the increase of the tax to 7d. a gallon ; but he will be responsible if he maintains it at that rate for a moment longer than is necessary.

Mr FRANCIS:
Moreton

.- I appreciate what has been done in the last ten years in the matter of road construction with the revenue derived from the petrol tax. A comparison of the condition of the roads of Australia ten years ago, with their present condition, must convince all that this money has been wisely spent, The Main Roads Boards in the majority of the States have done exceptionally well with the resources made available to them by the Commonwealth Government. I am particularly appreciative of the manner in which the Commissioner for MainRoads in Queensland, Mr. Kemp, has carried out the task entrusted to him. I agree with the Leader of the Opposition (Mr. Curtin), that when an agreement such as this is placed before us there is only one course open to us - we have either to accept it as presented, or reject it in its entirety. A full opportunity to discuss the terms of a proposed agreement should be afforded to honorable members before they are asked to ratify it. I understand from observations made by the Treasurer (Mr. Casey), on a motion for the adjournment of the, House some time ago, that the Government proposes to provide in the new agreement for an additional grant of £600,000 to the States, making the total amount £3,600,000, and to stipulate that assistance shall be given to mining and forestry in addition to main roads.

Mr Casey:

– Not mining; all public works, roads and forestry.

Mr FRANCIS:

– Including bridges, and work incidental to bridge construction?

Mr Casey:

– Yes.

Mr FRANCIS:

– There is one provision that I should like the Treasurer to be particularly careful to make. For the last ten years, the motor-boat owners who use petrol, have paid many hundreds of thousands of pounds to the revenues of the Commonwealth by means of this special tax, but have not received any assistance from it, either directly or indirectly. It has also been stated that no concession is given in regard to petrol used by aeroplanes. The Civil Aviation Department has done an extraordinarily good job with the limited funds at its disposal. Many hundreds of thousands of pounds have been spent all over Australia in the improvement of aerodromes, the provision of directional wireless equipment and night beacons, and in a hundred and one other ways. The owners of motor boats who ply for hire, and fishermen who use motor boats to earn a livelihood’, although they have not’ been granted improved facilities of any kind, are obliged to pay the tax of 7d. a gallon, about one-third of the proceeds of which is devoted to main roads purposes. These men do not use their motor boats on the highways. Many of them are severely handicapped because they have no jetty at which they may land either passengers or catches. Harbour facilities could be considerably improved, havens and shelters could be provided, and anchorages could be protected from bad weather. In Victoria particularly, many vessels were wrecked recently by storms. This experience is not confined to that State, but has been shared by other parts of Australia, certainly by Queensland. Many owners of motor boats have an extraordinarily difficult task in finding a passage into port because of shifting sands, changing currents and tides. The provision of proper beacon lights is vital to them, but when they have applied for them and other much needed improvements, to the State harbour authorities, they have been told that there is no fund which could be drawn upon to defray the cost of such works. From time to time channels where these small vessels find it necessary to seek shelter in case of storm, and those which enable them to get safely back to port, should be dredged. In the main, the motor boatmen are on the breadline, and the additional handicaps and charges which are imposed on them are unnecessary and unfair.. For at least ten years they have paid the petrol tax of 7d. a gallon, and if they must continue to pay it then their conditions should be eased and the facilities. I have mentioned should be provided as a protection against storms. The new agreement will operate for a further ten years, and unless action is taken on their behalf they will continue to pay the tax and yet receive no benefit from it. I appeal to the Treasurer to make such provision as will empower the States to allocate a portion of the Commonwealth grant to be expended along the lines I have indicated for the assistance of this deserving section of the community.

Mr McEWEN:
Echuca

.- The proposal before the committee is for a temporary extension of the existing Federal Aid Roads Agreement for six months pending its renewal for a longer term along lines mentioned by the Treasurer (Mr. Casey) a short time ago. As pointed out by previous speakers, the Parliament does not often have an opportunity to assist in framing agreements between the Commonwealth and the States, but a proposal of this nature does give to honorable members an opportunity to indicate the nature of the negotiations which they think the Minister, on behalf of the Commonwealth Government, should enter into with the governments of the States. I enter my protest against the progressive manner in which the Commonwealth has proceeded to relieve the States of their obligations under the original agreement, and to permit the full and only obligation to fall upon the Commonwealth. Originally, the States were called upon to contribute 15s. for every £1 found by the Commonwealth for the purpose of road construction by the States; but since then the Commonwealth has relieved the States of every obligation, and, in addition, the various State governments have permitted revenue which had been raised for the specific purpose of road construction to be appropriated to the consolidated general revenue of the States. That is wrong, and I am confident that members generally disapprove of it.

Honorable Members. - Hear, hear !

Mr McEWEN:

– If we believe that it is wrong that revenues raised by the Commonwealth for the specific purpose of road construction should be diverted in that way, the same principle should apply to revenues raised by the States. We should not condone the action of State governments’ in appropriating revenues raised by them for the purpose of road construction to purposes which will relieve them of their obligations under the Federal Aid Roads Agreement. I. believe that my views on this subject are shared by most of the people of Australia.

The Treasurer has told the committee that when the new agreement comes up for ratification, it will contain a provision under which the Commonwealth will contribute to the States a greater proportion than hitherto of its revenue from a tax on petrol, and will authorize the States to utilize that additional money for purposes other than road construction. Against that proposal I protest. There are only two purposes towhich revenue derived from a tax on petrol should be devoted. It should be devoted either to the specific purpose of road construction - a purposewhich has a definite relationship to the tax - or to augment the general revenue of the Commonwealth. Any commodity is liable to be taxed for that purpose, if thought desirable.

Mr Lane:

– That is all that is being done now.

Mr McEWEN:

– No ; and it certainly is not all that is proposed to be done. Almost from the inception of the Commonwealth there has been a tax on petrol. At first, it was a half-penny a gallon, and later the tax was increased to a penny a gallon, the revenue derived from that source being applied to the general revenue of the Commonwealth. That tax remained unchanged until 1926, when an additional tax of twopence a gallon was imposed on petrol in order to assist the States in road construction. That proposal had the general approbation of the people. No further change was made until 1931, when in a time of financial emergency, the government of the day imposed extra taxes on petrol and on a number of other commodities to assist the Commonwealth to offset its falling revenue from existing taxation. That additional levy was not imposed specifically to assist in road construction but was for the purpose of meeting such emergency expenditure as rural and unemployment relief. The action ofthe government of the day did not meet with much criticism because the need for it was generally recognized. But, to-day, that necessity is not so acute; the need for emergency taxation is gradually passing, and it is possible for the Commonwealth Government to contemplate a reduction of the petrol tax. Indeed, it has already given to the States one half-penny a gallon more than it contracted to give under the original agreement, and has intimated to the State governments its ( willingness to. forgo another half-penny a gallon of the petrol tax. I take it that the Commonwealth has agreed to a re quest from the States that, instead of reducing the tax, it should give to the States a greater proportion of its revenue from that source.

Mr Curtin:

– That is not in this bill.

Mr McEWEN:

– I know that; but the Leader of the Opposition (Mr. Curtin) himself emphasized that this is the only opportunity that members will have to express their opinions as to what the next agreement should contain. It is in order that the Government may know my views on the subject that I speak now in this strain. The Commonwealth, having intimated its willingness to forgo an additional halfpenny a gallon of its revenue from the petrol tax, has been confronted with a request from the States that they should he given that additional money unconditionally.

The CHAIRMAN:

– The honorable member is not entitled to anticipate legislation.

Mr McEWEN:

– I bow to your ruling, Mr. Chairman, but I point out that the purpose of the measure before the committee is to give to the Commonwealth time to negotiate a new agreement. My support of this measure is conditional upon the Commonwealth Government pursuing a certain policy in its negotiations for a further agreement with the States. In my opinion, the Government would be wrong if it consented to the demands of the State governments, that revenues raised by the Commonwealth from a tax on petrol should be used by the States for purposes other than road construction. I seeno relationship whatsoever between a tax levied by the Commonwealth on petrol and afforestation or other public works undertaken by the States, and I take this ‘opportunity to protest against the lines on which the Treasurer has intimated that the new agreement is to be framed. I trust that the debate will not conclude until other honorable members who share my views have expressed themand made it clear that, even if the Commonwealth Government is prepared to accept the odium which is associated with a high tax on petrol, it should not be prepared to accept the odium attaching to the expenditure of the revenue so obtained on afforestation or ordinary public works. I should have thought that, in dealing with a measure like this, the Treasurer would take the opportunity to reply to those critics who complain that the Commonwealth levies a tax of 7¼d. a gallon on petrol for the specific purpose of road construction, and then appropriates most of the proceeds to its own Consolidated Revenue. We know that 5d. a gallon, plus a proportion representing primage, making in all about 5£d. a gallon, is levied by the Commonwealth for general revenue purposes. The Treasurer should emphasize that point, because the Commonwealth is the target of vested interests represented hy State politicians and by the oil companies, which are constantly misrepresenting the position occupied’ by the Commonwealth. The unwillingness of the people to give additional powers to the Commonwealth springs largely from a misconception as to many of the undertakings of the Commonwealth. I hope that my contribution to this discussion will do something to bring the true facts in relation to the petrol tax before the people.

I support the request of the honorable member for Moreton (Mr. Francis), that the Government should explore the possibility of exempting from tax the petrol used for purposes other than road transport by owners of motor boats, stationary engines, and tractors.

Mr LANE:
Barton

.- I support the proposal of the Government to renew the existing agreement, but I sincerely hope that the country will not lose sight of the fact that the petrol tax is levied, not merely for road construction, but also for revenue purposes. In my opinion, there is no better revenueproducing tax than a tax on petrol for, after all, it is a tax on a luxury. I can understand that the owners of “ Packard “ motor cars, which travel only about ten miles to a gallon of petrol, should desire to have the tax on petrol removed. It is strange that whenever a tax on petrol is mentioned, men who represent certain interests ask that the revenue from the tax be applied solely to the making of roads in the country. Not long ago they suggested that petrol used on farms should be free from tax, and be given a distinctive colour. The occasion of the renewal of the agreement is being seized by certain interests in the country to obtain further concessions. Up to the present a large percentage of the petrol tax revenue has been absorbed into Consolidated Revenue whilst another percentage has been used by the States for road purposes. I understand from the speech of the Treasurer (Mr. Casey) that henceforth the States’ share will be used, not only for road construction, but also for re-afforestation and other public works. The honorable member for Echuca (Mr. McEwen) contended that, as the Commonwealth raises this money, it should have the right to dictate the directions in which it shall be spent by the States. The honorable member did not raise a similar argument when this Parliament voted £13,000,000 for the adjustment of farmers’ debts. I was surprised at the attitude adopted by the honorable member, especially as he is one of the keenest supporters of the Victorian Country party Government, which is wholeheartedly behind this proposal. In my opinion there should be some specification of the conditions upon which this money shall be spent, but the States should also be allowed a certain amount of latitude in following the conditions.

The honorable member for Moreton (Mr. Francis) has submitted a proposal for the exemption from tax of the petrol used by fishermen in the pursuit of their calling. I suppose that that is a fair proposal, but I hope the Treasurer will bold fast to the petrol tax, at least until the sales tax has been removed, because if the petrol tax were lifted the deficiency in the Commonwealth’s income would have to be made good from some other source, and there would be no possible chance of the sales tax being lifted. A tax on petrol is as essential to the buoyancy of federal revenues as is a tax on tobacco. Although I have a small motor car capable of doing twenty miles to the gallon, I disagree with and disapprove of a great deal of the propaganda against the petrol tax, which motorists and motorists’ organizations have been employing for years. They write to honorable members of this Parliament and go so far as to attempt to instruct them how to vote on this tax. If there is one industry in Australia that can stand a tax it is the motor industry. It is the greatest producer of luxuries in the Commonwealth. Hundreds of thousands of cars throng . Australian roads to-day. I remember once when I visited a country district being shown more than 100 brand new motor cars. 1 was informed that the farmers had had a good season and had all bought new oars. Apparently when they get a bad season they sell them again, and the cycle goes on. Every honorable member knows that the motor industry can stand the petrol tax better than any other industry in this country can bear other taxes. The petrol tax could, therefore, be maintained until the whole of the sales tax has been wiped off the slate. That is a tax which cuts into the daily bread-and-butter items of the working man, but this fact does not prevent the luxury-producing motor industry to demand the lifting of the petrol tax, even at the expense of the maintenance of the sales tax. In my opinion -the cardinal principle of taxation is that taxes should bear on the industries best able to bear them. The petrol tax is one that accords with tha’t principle. No one can say that a tax which taxes the groceries and all other articles of food of the poor falls into the same category. Yet we have heard to-day honorable members of this House asking for the exemption from the petrol tax of petrol used in motor boats and in farm machinery. A few years ago certain honorable members went so far as to suggest that petrol used on farms should he coloured so that it would be easily discernible from other petrols, and, as the result, be capable of exemption from the tax. Is it not unfair for honorable members to be continually urging the Treasurer to release the country from the petrol tax? I meet men engaged in the petrol and motor industries just as I meet men engaged in other walks of life, but I have never clone anything else than protest that the petrol tax is a fair and equitable tax.

The CHAIRMAN:

– Order ! The committee is not discussing the tax on petrol.

Mr LANE:

– The committee is discussing bow the money raised from this tax should be distributed, and to whom the spending of it shall be entrusted, and I am urging the Treasurer to < hold fast to the agreement provided for in this measure in the future and that the petrol tax will be maintained. I am not at all concerned about t’he stigma that attaches to the Commonwealth Government for collecting the tax. What I demand is that we shall not, surrender its collection until we can release the people of the obligation to pay other taxes such as the sales tax.

Mr HOLLOWAY:
Melbourne Ports

– I regret; that whenever a subject comes before . this Parliament, especially when it deals with a fundamental national question, we get further and further away from the Commonwealth ideals, and nearer and nearer to the State ideals. To hear honorable members attempting to discriminate as to whether the petrol tax revenue should be spent on roads and highways, or whether the States should have the right to spend it in whichever directions they think right, indicates how far we are drifting from the national viewpoint. I welcome .the statement by the Treasurer (Mr. Casey) that limitations imposed on the States in the spending of the money raised by the petrol tax are to be removed. Many demands were made on the Commonwealth Government, especially during the depression years, for it to relieve unemployment by carrying out a public works policy. The answer, and I admit that it is the only answer that could be given, was that the Commonwealth Government is not an employer, and that of itself it cannot employ labour or carry on public works. As the taxing master and the possessor of a monopoly in the petrol tax field, the Commonwealth must hand the money collected to the States to enable them to carry out public services that will provide employment which it cannot provide itself. It is wrong to say that the States must not spend the money raised through the petrol tax except on roads. They should be permitted to spend their quota of the revenue on whatever public works they desire to spend it on. Everybody, no matter in which State he lives, enjoys the ‘ advantages that accrue from the services that the States provide out of this revenue. No matter what State a person may live in he is able to travel on the roads or to sail upon the seas. I think that the statement by the Treasurer should be welcomed rather than criticized. If the Commonwealth has usurped, or ha3 been granted by the

States, the right to collect a tax, and the States are thereby debarred from the field, the Commonwealth should disburse among the States an equitable share of the revenues so raised, and, in doing so, it should not impose conditions upon the spending of the money. The only thing that disturbs my mind is that the section of the community represented by the fishermen, who live on the sea rather than the land, do not get a fair share of the petrol tax revenues which they help to contribute. I cannot offer any suggestion as to means by which the suggestion made by the honorable member for Moreton (Mr. Francis) that petrol used by fishermen in pursuit of their vocation should be exempted could be carried out. Some fishermen may employ other means of transport such as electric motive power. 1 do consider, however, that a fair portion of the petrol tax revenue should be spent, either by the Commonwealth or by the States, in directions which will benefit the fishing industry. The persons who earn their living on the sea should receive services commensurate with those given to persons who earn their living on the land. Those services could be rendered without subsidizing fishermen or without giving them a rebate of the amount of petrol tax they pay for them. I believe that it would be difficult to relieve them of the tax altogether, but it. would be easy to make the incidence of the tax fall more lightly on them. We have been asking the Government to do this for years. It could be done by making the major oil companies pay the income tax and excise duty that they should pay. Millions ‘of pounds of money is owed by these companies to this Government, and .if it ‘were collected the Commonwealth could carry out a great number of services that it .is not at present carrying out. The time has arrived when those companies should be taxed’ as they deserve to- be taxed. They should be forced to pay excise on all petrol they use, not merely o’n what they sell as refined petrol. They should be taxed on the petrol which comes into this country in the form of crude oil.

Underlying this question there is a major fundamental principle, and I emphasize that Ave should welcome, instead of criticizing, the remarks made by the Treasurer.’’’ Those who wish to extend, the functions of the Commonwealth should applaud this bill. The Treasurer stated that the Commonwealth retained the right to collect the tax, but if it cannot use the revenue derived from it, it should give the surplus money to the States. Why should the Commonwealth demand that every penny of the mom.’;.’ it disburses kv the States should be spent on roads? Why should it not say to the States that they can spend it on any public services that the people of Australia need? If it is not prepared to do so it should extend its own activities in order to provide these services.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– J. support the remarks of the honorable member for Moreton (Mr. Francis). The honorable member for Melbourne Ports (Mr. Holloway) claims that the State authorities should be permitted to use the revenue raised by means of the petrol tax for any public purpose they determine, but I am not prepared to go so far as that. I suggest that the users of petrol are entitled to special consideration, particularly those who in the past have received no service whatever in return for the tax paid by them. The honorable member for Moreton advanced a plea on behalf of the owners of motor boats. The use of petrol-driven craft, both for pleasure and for commercial purposes, is steadily increasing. I realize that the Government would have difficulty in differentiating between the various users of petrol, but definite services should lie rendered to reimburse those who contribute to the revenue by means of this tax. Havens should be provided for the protection of seacraft in bad weather. Of course, this is essentially a matter for the States. Provision should be made in the new agreement “whereby the States would be required to render this service. Beacons would be invaluable to fishermen, and they are fully entitled to safe anchorages.

Although, the petrol tax has been refunded to the States in the past, what arrangements are being made for a similar concession to petrol users in the Northern Territory, who require petroldriven .engines for water pumping, and for the haulage of commodities over rough bush tracks, where transport costa are inordinately high? Are the settlers in the Northern Territory to receive no consideration? The /Treasurer (Mr. Casey) should be able to devise ways and means’ of reimbursing petrol users in the territory by providing them with definite services. No doubt the honorable member for the Northern Territory (Mr. Blain) will offer practical suggestions in this regard. Among my constituents arc many who contribute -largely to the revenue raised by means of the petrol tax, and before the agreement is completed, provision should be made to meet the needs of those petrol-users who now have no means of enforcing compliance with their requests. The honorable member for Echuca (Mr. McEwen) mentioned stationary engines, farm tractors and the like, and I commend him for his moderate statement in that respect. 1 agree with him that petrol-users who derive little benefit from money spent on roads are entitled to special consideration.

Mr MAHONEY:
Denison

.- Miles of city roads are maintained out of rates collected on city properties, and the owners of thousands of these properties do not use motor vehicles. For many years strong representations have been made to the Commonwealth and State authorities that a. portion of the revenue raised by the petrol tax should bc allocated for the maintenance of roads in metropolitan areas. The municipalities have been compelled to levy higher rates than would otherwise he necessary, because they are called upon to maintain these roads.

Mr Casey:

– There is no restriction at the present time as to the particular roads for the maintenance of which this money may be allocated. .

Mr MAHONEY:

– It can be expended only upon roads under government control, but the roads to which -I refer are not under the jurisdiction of the State governments. : “

Mr Casey:

– That is a matter for the State authorities.

Mr MAHONEY:

– In Tasmania, the money received under this scheme has been judiciously expended by the Labour Government.

As has been pointed out by other speakers, administrative difficulty would be experienced in endeavouring to dif- ferentiate between the various users of pe.trol. If a rebate were granted with respect to petrol purchased by fishermen, for instance, it is conceivable that petrol purchased ostensibly” . for fishing craft would be used for other purposes. I am not entirely in accord’ with the honorable member for Wentworth (Mr. E. J. Harrison), who advocated the erection of beacons for fishermen. The fishermen employed on the coasts of Tasmania are acquainted with every cove and other place of shelter, and, therefore, do not need beacons to guide them.

Reference was made by the honorable member for Wentworth to the use of of petrol engines for water pumping in the Northern Territory. I understand that most of the pumping there is done by means of windmills. Petrol costs 4s. a gallon in the territory, and it would be too expensive to use for pumping water for ‘stock. I have no objection to the expenditure of the money raised by the petrol tax on afforestation, the construction of bridges, or other necessary public works. I entirely approve of the scheme to distribute the money among the States, and am sure that the State authorities could be relied upon to expend it upon useful public works. The Labour Government in Tasmania is doing a good deal to solve the problem of unemployment. I assure the Treasurer that this money will be spent in a businesslike manner and not wasted as, I suggest, might be the case in Victoria. In that respect I can understand the fears of the honorable member for Echuca (Mr.- McEwen), seeing that the Government’ of that State is so extravagant.

The DEPUTY CHAIRMAN (Mr. Collins). - Order ! The honorable member must confine his remarks to the question before the Chair.

Mr MAHONEY:

– I ask the Treasurer to consider carefully the points which I have raised. No doubt the owners of luxurious cars .and the wealthy farmers desire to escape this tax, but those sections of the community can well afford to pay it even if it were used simply to maintain a few unfortunate people in. the municipalities.

Mr FISKEN:
Ballarat

.- Generally speaking, I approve of the resolution before the committee, but I agree with those honorable members who contend that this is one of the few opportunities that we get to discuss agreements of this nature. I associate myself particularly with the remarks of the honorable member for Echuca (Mr. McEwen), who put up a very strong case in support of the ideas which many municipal and shire councils in Australia, and particularly in Victoria, hold on thi3 matter. I do not agree with the suggestion of the honorable member for Melbourne Ports (Mr. Holloway) that the States should be given absolute freedom to decide how this money should be expended. Generally speaking, when money is granted by this Parliament to the States for various purposes Ave lay down the broad, general lines upon which we wish that money to be spent, but leave the intimate details of the expenditure to the States. I agree entirely with that principle. It would be quite wrong for this Parliament to tell the States exactly how they should spend the money. We should simply lay down the broad general principles as to how that money should be spent. In this instance it would be wrong to tell the States that they must spend this money on main roads only, or on by-roads only. On the other hand it is. quite right that Ave should say that the money must be spent on roads, and thus lay down the broad general principle of this expenditure. In granting certain moneys to the States in the past we have stipulated that such money should be spent on forestry, or gold-mining, but in those instances we did not lay down the intimate details of expenditure. I strongly urge that the same procedure should be followed on this occasion, but I do not wish to see the principle of expenditure made so broad that the States would be able to use money raised from the petrol tax. for forestry and other purposes. This particular tax is raised from a certain section of the Australian community.

Mr Nock:

– It is a class tax.

Mr FISKEN:

– I do not say that; it is raised from a certain section of the community. As the honorable member for Echuca pointed out, the money raised from the federal tax originally went into general revenue, and, later, a specific amount Avas raised for a specific purpose, namely, the construction of roads. I maintain that if more money is raised by this tax than we need for general revenue purposes, plus what we wish to give to the States to spend oh roads, the surplus should not be levied at all. I join emphatically with the honorable member for Echuca in urging that any money made available to the States from this fund should be used on roads only and that

Ave should leave it to the States to decide on what particular roads the money should be spent.

Mr BERNARD CORSER:
Wide Bay

– I support the continuance of Commonwealth road grants for a further period of six months. Originally, money Avas granted from this fund to the States for the specific purpose for which it was collected, namely, the construction of main roads. Suggestions have been made in this debate that the States should be allowed to use this money for the purpose of relieving ratepayers in the cities by the construction of roads through our cities. The specific purpose for which this tax

Avas originally collected was to develop Australia by constructing main roads and developmental roads in the back country. I shall not support any proposal to alter those conditions. Neither shall I support a proposal, as some honorable gentlemen, have suggested, that this money might be spent by the States on public works. It should not be spent on costly public buildings or on bridges in our cities. If such a practice were permitted, the whole of the amount granted to the States could be used up in that direction. The action of the Commonwealth Government in recent years of relinquishing control over the details of expenditure of main roads grants may not be a disadvantage, because the States should be in a position to be trusted as to how the money should be spent. I cannot see how the Commonwealth could be in as good a position as the States, guided as they are by their local authorities, to say on what roads this money should ‘be spent. For this reason, it would be better to continue the present system under which the States carry this responsibility.

Honorable members are aware that an agitation is taking place among some States to claim, not only a grant of £2,000,000 or £3,000,000 from this revenue, but also the whole of the tax itself. They claim this as a right. I do not agree with that contention. If we do not really need all of the money raised through the petrol tax we should give some relief to the particular taxpayers who contribute the tax. I insist that the States be compelled to use the whole of the money they collect by way of taxes from motor users in registration fees, &c, for the purposes of road construction. 1 do not agree with the suggestion that the Commonwealth -Government should provide from £2,000,000 to £3,000,000 yearly from the petrol tax revenue to relieve the States of payments for road construction which are their own peculiar responsibility, or of the obligation to provide employment in their boundaries by the expenditure of an amount equal to the hundreds of thousands they collect from motor users as a direct tax. That money should not be diverted to general revenue by the States. It should be expended on road improvement, because in this way more employment would be provided and more back country opened up.

There are many inequitable features of this tax. The claims of the ‘ primary producer who uses petrol to drive his milking machine or motor tractor, and the fisherman who uses a motor engine have hitherto been disregarded. No practical suggestion, however, has been advanced as to what principle could be adopted to give relief to this section of petrol users, although such a suggestion would be a most valuable contribution to this debate. One honorable member, who represents a large and very fashionable centre, suggested that users of petrol in motor boats should be given relief, and, in doing so, he made a plea on behalf of fishermen. I do not suppose, however, that fishermen would use 5 per cent, of the petrol consumed by owners of motor boats, in that district. Most of the benefit of any such relief in that locality would go to owners of pleasure boats. “We shall not achieve our objective in this respect unless some more practical suggestion is advanced. I understand that this is the third successive government that has endeavoured to devise a means by which certain sections of pri- mary producers and fishermen, and other users of petrol, may be partly relieved of this tax.

This tax is not the only source of complaint among users of petrol. When this agreement is put into operation the Commonwealth Government will retain about id. a gallon for general revenue purpose.-, such as defence. I understand that New Zealand levies a petrol tax of lOd. a gallon, whilst this tax is particularly high in Great Britain. Australia’s petrol tax is one of the lowest in the world, and I am hoping that, should we not require money from this source for federal purposes, we will reduce it still further in preference to handing over unlimited amounts to the States, to be used for public works. In addition to general Commonwealth revenue purposes there is only one legitimate direction in which money received from the petrol tax should be spent, and that is in the construction and maintenance of roads. It should not be used to relieve the States of any expenditure on their own peculiar road requirements, from motor registration fees, &c. The price of petrol is unnecessarily high, particularly in country districts, and the rate at which it is sold by the distributing companies should be considered in determining the tax to be imposed. Reports have been received from time to time concerning the activities of the major oil companies and the conditions under which petrol is sold; but no determined effort has been made to ascertain why the petrol prices are so much higher in country districts than they are in the metropolitan areas. Honorable members representing metropolitan constituencies, who refer to the price of petrol in the cities, should visit some country districts and ascertain the prices charged there. An honorable member complained of the fact that under this agreement, which is being extended for a period of six months, no consideration has been extended to the users of petrol in the Northern Territory.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– It was a justifiable complaint, too.

Mr BERNARD CORSER:

– The honorable member for Wentworth (Mr. E. J. Harrison), who made out a good case, overlooked the fact that the Commonwealth provides most of the money for the construction of railways, roads and bridges in the Northern Territory, whilst most of the money for similar works in the States has to be provided by the State governments.

Mr Blain:

– Money is being borrowed for developmental work in the Northern Territory.

Mr BERNARD CORSER:

– And that is a responsibili ty of the Commonwealth. The honorable member should not lose sight of the fact that considering the handful of white persons living in the Northern Territory, the amount of Commonwealth money expended there is large. In handing over revenue to the States for work such as is covered by the agreement, I trust that, some limitation will be placed upon the amount, and that an effort will soon be made to afford relief to those taxpayers who provide this money. I am opposed to a large proportion of the money being expended in the capital cities, particularly as it was intended originally to assist primary producers and. others who have not the advantage of highly improved bitumen roads such as are to be found in the cities or good metal roads running parallel to railways, and not serving as feeders from agricultural districts. The people in the outback districts are entitled to more consideration than they arn receiving, particularly in connexion with expenditure of this kind. Money derived from the petrol tax should be used for constructing new roads or maintaining existing roads in areas far removed from the cities, where too much money has already been expended on public works.

Mr STREET:
Corangamite

.- The resolution before the committee provides for the extension of the Federal Aid Roads Agreement for a period of six months from the end of this calendar year. Generally speaking, I approve the extension of the principle embodied in the agreement for the period proposed. I support the contention of the Leader of the Opposition (Mr. Curtin) that thi3 House is in danger of losing its deliberative function in having to debate a subject which has already been decided. That is one reason why I welcome an extension of the agreement for six months, before the expiry of which Parliament will have an opportunity to discuss the terms of any proposed new agreement. The terms of the extension covered by the resolution do not vary from those of the agreement which has been in operation for the last five years, during which its merits and demerits have become apparent. I support the remarks of the honorable member for Echuca (Mr. McEwen), who placed the position clearly before the committee, and I therefore do not propose to take up the time by recapitulating the arguments he used. I disagree with the views expressed by the honorable member for Melbourne Port3 (Mr. Holloway), who suggested tha.t the proportion of the petrol tax handed over to the States under this agreement should be used for all kinds of public works. If the money is made available under a Federal Aid Roads Agreement, it should be expended only on roads-. If the Commonwealth desires to assist the States in respect of their general public works policy, the money should be provided from some other source. Specific sums are provided from the petrol tax to assist the States in the construction and maintenance of roads, and no departure from that policy should be made. When the Commonwealth makes grants to the States for road purposes it should provide that at least 50 per cent, of the amount so granted shall be paid direct to shires or municipalities.

Mr Drakeford:

– Only in country districts?

Mr STREET:

– No; municipal rates constitute one of the greatest burdens which city and country dwellers have to bear.

Mr Casey:

– In some instances they are heavier than the land tax.

Mr STREET:

– In many instances they are. If direct grants were made to the shires or municipalities they might be able to confer a benefit on the ratepayers, not only by improving the roads under their control, but also by reducing rates. I stress the point mentioned by the honorable member for Echuca that this Parliament should assist State governments to maintain roads, provided the State governments do not divert money raised from motor taxes to purposes other than road-making. I trust that the Government will take cognizance of that point and legislate accordingly. The honorable member for. Moreton (Mr. Francis), who was supported by other honorable members, said that this tax is paid by those using petroldriven vessels to obtain a livelihood by fishing, but they derive no benefit from the proceeds. It should be within the power of the Parliament to devise some means whereby relief can be given to such persons, as well as to users of stationary engines’ and tractors. I realize that such a scheme may involve a. good deal of work, but as such obstacles have been overcome in other countries, they should not be insurmountable here. Although the honorable member for Echuca said that money derived from this source should be used entirely for roads and not for re-afforestation or public works, he will, I think, agree that the States, in co-operation with municipalities, should help in the construction of aerodromes, and .that a portion of this tax could be used for that purpose. Those using aeroplanes contribute a considerable amount to the ‘revenue through the petrol tax. With that single exception Parliament should insist that the money raised from this tax shall be used only for the purposes named in the agreement. I hope honorable members will be given an opportunity to discuss the proposed new agreement in detail and if necessary to amend it. We should not be asked to accept the agreement for a tenyear period without first having an opportunity to debate its terms. I reiterate that Parliament must not. lose it deliberative function. I trust that an assurance will be given that such an opportunity will be afforded to us.

Mr DRAKEFORD:
Maribyrnong

– I agree with the honorable member for Corangamite (Mr. Street) that unless Parliament is given an opportunity to discuss the details of the proposed new Federal Aid Roads Agreement, it will be deprived of a part of its deliberative functions. Unless an opportunity is afforded us to amend the agreement if we see fit, insufficient consideration will have been paid to the rights and privileges of honorable members. I understand, of course, that the intention at the moment is to ratify the agreement for only six months, but the Treasurer (Mr. Casey) should give a definite undertaking that we shall have an opportunity to consider any new agreement in detail and amend it if necessary. We should not be prevented from exercising our full deliberative powers in a matter of this kind. Apparently the State parliaments are able to press their various views but the Commonweallth Parliament seems to have no such opportunity.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– The State parliaments as such have very little say in the matter. The details seem to be fixed by the Premiers.

Mr DRAKEFORD:

– I strongly object to the abrogation of any of the rights of this Parliament by State Premiers, State governments or any other outside authorities. Under the existing conditions it seems that all we can do is to offer a little friendly or unfriendly criticism of the various agreements submitted to us from time to time for ratification. If sufficient honorable members carried their hostility to the terms of a particular agreement to the extent of rejecting the agreement - we have no opportunity to amend it - the defeat of a government might be brought about. The procedure adopted in connexion with some of these agreements is wrong in principle. As honorable members on both sides of the chamber desire a full opportunity to consider and to shape or amend the details of the new Federal Aid Roads Agreement, I trust that the Treasurer will give an assurance that that will be afforded them.

The manner in which the proceeds of the petrol tax is used has been discussed in many quarters. Some honorable members have suggested to-night that this revenue should be spent solely on developmental roads in country districts, but surely honorable members who represent country constituencies in which such a procedure would be popular realize that a great deal of the money raised from the petrol tax come3 from the pockets of city motorists. I realize that it is impracticable to ascertain the relative mileages of motor vehicles running on country and city roads respectively; but the density of the motor traffic in the cities indicates the probability that greater income is derived from the petrol tax in city areas than in country districts. Many motor cars owned by city people run entirely on city roads except for an occasional pleasure trip at the week-end. A strong case can be advanced, therefore, for the spending of a proportion of this money in urban areas. I offer no objection to the expenditure of even a substantial part of this revenue on the construction of developmental roads in the country, and I do not think that any honorable member who represents a city constituency such as my own, would argue against such a proposal; but I ask definitely that reasonable consideration shall be given to the needs of city areas.

I request that provision be made in the new agreement to set aside a small proportion of the roads grant for the construction of about half a mile of road which runs alongside the boundary of the cordite factory in the division of Maribyrnong. ‘ I have been trying for two years to get the Government to put this road into reasonable order, for it is used by vehicles carrying nitro-glycerine and other high explosives of a volatile character, and also the ingredients from which they are made. This road, which is in a shockingly bad condition, is used principally by the Defence Department for work mainly connected with the manufacture of munitions. It runs through the shire of Braybrook, which cannot collect any rates from the Commonwealth property which it serves, and is partly in the constituency of the Treasurer (Mr. Casey). I understand that an agreement was reached at one time between the Commonwealth Government and the Government of Victoria that the State Government would make the road, but nothing effective has been done. The Minister for Defence (Sir Archdale Parkhill) knows something of the facts of the case that I am submitting, and he must realize that it would be no more than equitable to all concerned if an amount of, say, £5,000 were set aside for the construction and maintenance of this important thoroughfare. The Braybrook district is much more sparsely populated than most areas adjacent to big cities, and the shire is not in a sufficiently strong financial position to incur the heavy expense of reconditioning this road. The Commonwealth Government takes the view that the road should be made by the State Government, but the State Government will apparently do nothing unless it is compelled. The Country Roads Board, which is the authority responsible for the construction and maintenance of arterial roads in Victoria, inspected this road some time ago, but declined to regard it as an arterial road. Consequently nothing has been done to recondition it, and the people who use it are subjected to undue risks in view of the nature of the traffic over it. The Treasurer and the Minister for Defence should negotiate with the appropriate State authority to ensure that a certain proportion of the revenue derived from the Federal Aid Roads Agreement should be expended on this road. Although the Minister for Defence may be tired of hearing me discuss this subject, he must realize that considerations of equity and safety require the rectification of this long-standing grievance. I hope that the Treasurer will also lend his influence to the support of the case that I am stating. .

Several honorable members have argued that the rate of the petrol tax should be reduced, but it appears to me that they have overlooked one important consideration. Undoubtedly, if the tax on petrol be reduced, motor vehicles and aircraft will be enabled to compete with the railways on more favorable terms than hitherto. During the last few years the Commonwealth Government has been , called upon to make substantial grants to various State governments to enable them to meet their deficits. These deficits have been incurred, in most instances, in consequence of heavy losses on the State railway systems. Obviously, if motor and air transport are enabled by a reduction of the rate of the petrol tax, to compete against the Government-owned railways on a better footing than at present, the Commonwealth Government will be required to continue making grants, perhaps of a larger nature, to State governments to counteract the ill effects of railway deficits.

Honorable members who travelled in the same compartment as I did from Melbourne to Albury last night witnessed a race between a motor car and the Sydney express between “Wangaratta and

Barnawatha. Because of the perfect state of the highway, the motor car, which may have been a passenger-carrying vehicle, was able to maintain a very high speed. Many of our best highways have been constructed parallel with railway lines, with the result that motor cars have undoubtedly robbed the railways of a considerable amount of revenue. We have, then, more transport services than are actually required. The proper way in which the collections from the petrol tax should be spent in the country is by the construction of developmental or feeder roads to the railways, so that passengers and goods traffic, which are intended for the city, be encouraged to use this form of transport. If this Parliament has the authority it should stipulate that money collected from the petrol tax and spent on roads should not be utilized for the purpose of building roads to enable private industry to compete successfully with a national enterprise.

In regard to the reduction of tax on petrol used for aviation purposes, we shall, in the near future, have to consider the effect that a reduction of the tax would have on services competing with railways; because if the losses on the railway systems increase, the consequences to the general community will be serious.

Assistance should be granted to those engaged in the fishing industry who contribute substantially to the collections from the petrol tax. It should not be beyond the capacity of the advisers of the Treasurer to devise a means of giving to this section some benefit from the proceeds of this tax: at the present time they receive no advantage from it at all. It has been pointed out that, in the event of money being so spent, pleasure boats would derive some gain from it. They should not be overlooked. The fact should not be dismissed that, at the present time, a considerable number of interstate pleasure services engaged in the tourist business have the advantage of the good roads which are made possible by the expenditure of the proceeds of the petrol tax ; that contention should apply equally to road services as well as to passenger services by water. The fishing industry lias an excellent case for special consideration. While engaged in a primary industry and making contributions to the public revenue through the petrol tax, fishermen derive no benefit from the money so raised.. The problem is not so difficult that no means of assisting them cannot be found. For instance, by the allocation of a part of the -proceeds of the petrol tax, they could be provided with better anchorages, wharfs, and lighting round the coast; that is what they desire. The Treasurer should give consideration to the representations which have been made from all sides of the House in the interests of this primary-producing section, and investigate the possibility of some of the money which is collected from the tax on petrol being used, for the purpose of increasing the facilities which motorboat users require.

Mr HUTCHINSON:
Indi

.- A misconception apparently exists among certain honorable members in respect of the powers of this House to amend this and similar agreements. The Leader of the Opposition (Mr. Curtin) said that any agreement made between the States and the Commonwealth comes before the House as a fait accompli, and that members have the alternative of accepting it in toto or rejecting it. In this way, he said, the House is deprived of a considerable amount of its authority as a deliberative assembly. That is not a true statement of the position. It is possible for th is House to amend any agreement which the Treasurer may bring forward. Such an amendment would be an instruction to the Treasurer to negotiate a new agreement, conforming to the conditions laid down by the Parliament.

Mr Casey:

– That is so.

Mr HUTCHINSON:

– I therefore welcome the’ opportunity to-night to reiterate some suggestions in regard to any future agreements which may be entered into in connexion with federal aid roads. While supporting this measure, I feel that a reduction of the petrol tax is definitely desirable. Most countries have adopted the foolish policy of imposing taxes on all forms of transport, particularly motor transport; the only country that has shown any regard at all for motor transport is the United States of America. For some years the government* of Australia have penalized motor transport by the imposition of heavy registration fees and taxing the motive power. The motor car is not such a luxury as the honorable member for Barton (Mr. Lane) considers it to be. In Australia it is a real necessity, and is a means of transport which will play an important part in opening up and developing this vast country. The age of the aeroplane also is fast approaching and aviation is being heavily penalized by the petrol tax.Under the Federal Aids Road Agreement 1926, under which a portion of the money derived from the petrol tax was allocated to the States for the making of main roads. Later the agreement was amended to allow the moneys to be made available to shire councils, and to be expended on roads of all classes. That is the arrangement at present. It appears to me, therefore, that the principle of returning a portion of the tax to the motor user has been accepted, and at this stage I can only repeat my oft-expressed request that the Treasurer, when the new agreement is being devised, will adhere to this principle. I trust that my remarks, and those of other honorable members on this subject, will not be overlooked, and that this principle will be definitely recognized in the new agreement to be negotiated next year.

Mr COLLINS:
Hume

.- I join with other honorable members in voicing my protest against the suggested allocation of any moneys obtained by means of the petrol tax for purposes other than road construction. That was the original objective in levying the tax, and it should be strictly adhered to. When the new agreement is being drawn up, the Government should definitely state that moneys derived from the petrol tax and allocated to the States shall be utilized for this specific purpose. The honorable member for Maribyrnong (Mr. Drakeford) stated that the city roads should not be neglected ; all honorable members agree with him in that contention. A big percentage of the collections from the petrol tax is derived from petrol used by motor cars on city roads; for this reason, the cities must have their share of the proceeds. Nevertheless, country members must give their attention to the necessity for spending much of this money on the construction of feeder roads to the main highways. That is a very necessary purpose.In the development of Australia, the duty of, and obligation upon, the pioneers was first to prove the fertility and productivity of the land before the Government would favour them with a road, bridge, or even a track. But since those days industries have developed, and we should now concentrate upon a plan for building feeder roads to the main highways in order to give some inducement to settlers to open up new country. We have in close proximity to the Federal Capital, vast expanses of country which are, for the most part, badly roaded. The Brindabella district, for instance, has been settled for over 75 years, but is still without an allweather road to the railway. Those settlers do not ask for bitumen roads, but merely for a good, all-weather surface, with reasonable crossings over the creeks, so that they may drive their cars or other vehicles to Canberra or other centres, and take their produce to market. Such roads, apart from serving the settlers, would open up large tracts of beautiful country, with numerous trout streams, and forests of valuable timber. A road connecting Canberra with Brindabella, and continued on to Yarangobilly Caves and Tumbarumba, would be a magnificent scenic drive, and would open up country that would make it revenue-producing.

The honorable member for Wentworth (Mr. E. J. Harrison) referred to the need for providing communications in the Northern Territory. Sooner or later, this task will have to be undertaken by the Commonwealth, whether those communications take the form of railways, or of main, concrete roads on which road trains will be run. Instead of allowing part of the proceeds of the petrol tax to be spent by the States on works other than roads, the money could very well be spent in the Northern Territory, thus obviating the expenditure of loan money. I, in conjunction with other Country party members, protest against the spending of this money for purposes other than those for which it is raised. Before any of the proceeds of the petrol tax are so spent, outback settlers should be provided with reasonable all-weather roads to give them access to markets.

Progress reported.

page 1919

ADJOURNMENT

Case of Mrs. Freer - Nutrition Investigation - Invalid and Old-age Pensions.

Motion (by Mr. Menzies) proposed -

That the House do now adjourn.

Mr PERKINS:
Monaro · Eden

– Ten days ago, I asked the Minister for the Interior (Mr. Paterson) whether his attention had been drawn to the fact that a British woman, travelling on a British ship, with a British passport, had been refused permission to land in a British dominion, namely, Australia. He told me that it was true, and added that he would give me the reasons in confidence. Subsequently, he gave me those reasons, and I have respected his confidence. Since then, however, the case has aroused much interest throughout Australia. I do not propose to discuss it to-night, but I should like to know whether the decision he gave in that case is to be taken as a precedent to be followed in future cases.

Mr PATERSON:
Minister for the Interior · Gippsland · CP

– The decision in the Freer case was reached after the consideration of very special and peculiar circumstances, and is not to be regarded as a precedent to be followed in dissimilar cases. The honorable member’s query prompts me to say that I admit that there is this grain of substance in the criticism which certain honorable members have levelled against the action recently taken. The decision to exclude a British subject was made by an individual Minister. I have given the matter some thought, and, in order to overcome that objection, I propose to recommend to the Government that, in future, in the event of circumstances arising involving the exclusion of a British subject, approval shall be given by Cabinet before a decision is announced by the Minister. It is needless to say that, in the particular case under discussion, Cabinet gave its entire approval of the action I took.

Mr CURTIN:
Fremantle

.- I desire to draw the attention of the Government to the fact that the nutrition inquiry, which is proceeding at the present time, appears to be limited to certain States, Western Australia and Tasmania being excluded from the survey of the board of supervisors appointed to assist the Commonwealth Advisory Council on Nutrition. I take strong exception to this. Apparently the Federal Council of Health decided to exclude the States of Western Australia and Tasmania because, in the university of neither of those States, is there a medical school. I point out, however, that the data collected in all States could be examined by the experts associated with the university of any one of the States. The decision to exclude Western Australia from the survey excludes a groat community living under conditions which arc, in themselves, distinctive. The gold-mining industry in Australia is to-day mainly conducted in Western Australia, and a great many men with families are working on the gold-fields there. Climatic conditions in that State, I submit, have to be taken into account with the food supply and the general dietary available to the people, particularly those on the eastern goldfields. There is at Kalgoorlie, aa the federal authorities must know, a Commonwealth laboratory, and I see no reason why work which is being carried out in the other States should not also be carried out in Western Australia, and, so far a3 the mining community is concerned, at Kalgoorlie. The men engaged in the timber industry of the south-west should also be covered by this survey of nutrition, because they, too, are living in a part of Australia which in the future will carry a large population. If we are to have a comprehensive knowledge of this subject I sec no reason why we should exclude two States from the investigation. It has been urged that the conclusion* drawn from a survey of Queensland would apply to the north-west of Western Australia, but I question very much whether that is a completely valid reply. Nor do I. think that conclusions drawn from an investigation of this kind in Victoria could be applied to Tasmania. There ia considerable criticism in Western Australia of the exclusion of that State from the survey, and I have no doubt that the exclusion of Tasmania is also a matter of complaint in that State. I ask tha Minister in charge of the House to bring under the notice of- the Minister for Health the criticism which I have mads as the result of representations made to me from each of those States.

Mr ROSEVEAR:
Dalley

.- On the adjournment of the House a couple of weeks ago, I raised the question of the imposition by Deputy Commissioners of Pensions of penalties on pensioners who, being the victims of circumstances, have been brought before the courts for offences against State food relief regulations.. At that time I thought that the Treasurer (Mr. Casey), by interjection, was sympathetic to the view which I put forward, that once a pensioner had suffered a penalty for a minor offence committed against the laws or regulations of a State, the Deputy Commissioner of- Pensions should not impose a further penalty. Unfortunately, in the case which I mentioned, I find that the Treasurer is apparently in full sympathy with the methods adopted by the Deputy Commissioner in dealing with such cases. I have received a letter from the honorable gentleman which seems to indicate that he is satisfied that the present procedure is the correct one to adopt in such circumstances. Honorable members might remember that the case to which I drew attention was one in which an old-age pensioner was brought before the court for a breach of the food regulations in New South Wales. He had been receiving food relief, though, at the same time, his daughter, who was not living at home and who was working during the day, visited his home at night to do the necessary housework, because her mother was bedridden. The daughter was deemed by the New South Wales food relief authorities to be a member of the home, and it was held that her income should have been included in the income of the home. The man committed what was, in effect, a technical breach of the regulations. The facts set out in the reply of the Treasurer entirely endorse every statement that I previously made to the House.

Mr Casey:

– Except the statement that the person in question had. committed merely a technical offence.

Mr ROSEVEAR:

– The letter states that the offence was such as did not warrant the Pensions Department inflicting any punishment on the pensioner. I take it from the Treasurer’s own words that he did not look upon the offence as one of any enormity. Imme diately the Commissioner heard of this particular case - and this is vouched for in the Treasurer’s reply - he stopped payment of the pension. The department was apparently occupied for a month in investigating the circumstances, and, durthat time payment of the pension was withheld. After I had made representations, the pension was restored, but the department continued to withhold the amount which should have been paid while inquiries were proceeding. On further representations being made, one fortnight’s pension was refunded, but the department has since resisted all claims for the remainder. The letter from the Treasurer reads -

The action taken by the Deputy Commissioner in thiB case was not intended to bo in the nature of a penalty.

As the pension was the only income into the home, and it was stopped, I should like to know what the Treasurer regards as a penalty.

Mr Casey:

– In fairness, the honorable member should read the whole letter.

Mr ROSEVEAR:

– It is rather lengthy. The honorable gentleman may check with a copy of the letter the accuracy of anything I say in regard to this matter. The first five paragraphs deal with the history of the case. The essential part of it is contained in paragraph 6 in which the honorable gentleman says -

The position was that a pensioner had been convicted for an offence in regard to social relief and the Deputy Commissioner considered it necessary to investigate the matter with a view to determining to what extent his eligibility for pension has been affected.

Mr Lane:

– Did the pensioner in question get social relief for himself as well as a pension?

Mr ROSEVEAR:

– He received relief to which it was claimed he was not entitled because his daughter’s income was treated as the income of the home. The magistrate who heard the case thought po little of the offence that be gave the defendant two years to repay the £10 which he had wrongly received. The letter continues -

It is an essential qualification for an old-age pension that a person be of good character and deserving of a pension. A conviction such as that recorded in this instance would not he regarded as a disqualification for pension as is evidenced by the fact that the Deputy Commissioner subsequently restored pension, but it was not considered that the circumstances called for the payment oE those instalments which had lapsed while the case was under investigation.

Let us consider that for a moment. The first statement is that a conviction such as that recorded in this instance would not be regarded as a disqualification for a pension. But the matter is then pursued a step farther, and the statement is made that it was not considered that the circumstances called for the payment of those instalments which had lapsed while the case was under investigation. Had I not made representations after a month had elapsed, the investigations might have continued for two or three months, and this man and his wife might have been penalized by the loss of their pension for the whole of that time. Theletter concludes with the following paragraph : -

It is considered that pensioner has not been harshly treated in the loss of one instalment of his pension. Whilst these offences may not bc regarded as serious, the number of prosecutions indicates that they are prevalent, and it is essential that some steps be taken to protect public moneys from exploitation.

That means nothing more than that an example ought to be made of this man in order to deter others who might offend in like manner. I remind the Treasurer that though these offences may be prevalent, invalid and old-age pensioners are not always the offenders, and a good example is not 3et by penalizing a pensioner in order to deter others who may not be pensioners. The point that I wish to make is that very few persons thoroughly understand the New South Wales food regulations-. I frankly confess that, although a number of these matters come under my notice, I am not fully conversant with those regulations, nor are many members of the State Parliament who deal with such cases every day. The regulations are altered almost monthly, and there is always a good deal of confusion as to what the position actually is. I shall give a single illustration. At one time, an invalid pension was taken into account in calculating the income of a pensioner’s home for food relief purposes. That regulation was later repealed, with the result that the invalid pension was not treated as income, and the pensioner was not regarded as a unit of the family.

Apparently the man whose claim I am supporting was unwittingly guilty of a breach of the law. The magistrate evidently thought so, because he merely ordered the repayment in small instalments of the amount drawn. Yet the department stopped the pension, and in defence of its action claims that, although the offence was not sufficiently serious to warrant permanent withholding of it, the pensioner should sacrifice the instalments that accrued to him while it was conducting its investigations! I suggest to the House that that is not sympathetic administration. If the offence was not sufficiently serious to warrant the stopping of the pension, there is no justification for the retention by the department of even one instalment of it.

Mr JAMES:
Hunter

.- The Treasurer to-day replied to questions that I asked upon notice last week, in relation to the reduction of invalid pensions in cases where the husband of the pensioner is employed on emergency relief work in the State of New South Wales. The reply states that the pension is not reduced in such circumstances. If that be so, a refund should be made of the amount which pensioners have thus lost. The reply of the honorable gentleman reads -

Invalid pensions are not reduced if the wages are received in lieu of sustenance or food relief for work performed under any scheme of emergency or intermittent relief work, provided the amount of invalid pension is taken into account by the State authority in determining the eligibility of the person to receive such wages.

I say that the invalid pension is taken into account. In his reply to my second question the honorable gentleman states -

So far as I am aware there is no legislation covering this matter.

I inform the honorable gentleman that there is a State regulation which deals with it.

Mr Casey:

– .The information that I have given to the honorable member was furnished by telephone by the State authorities.

Mr JAMES:

– It is definitely provided that a husband may not be employed on emergency relief work for the benefit of an invalid pensioner. The Invalid and Old-age Pensions Act also lays it down very definitely that for pension purposes the income of either a husband or a wife shall be deemed to belong to both. Therefore, when the husband earns more than the maximum amount allowable the department reduces the pension. It does not take into account the fact that the husband may be working on emergency relief work for the benefit of three, four or five children, nor does it consider his invalid wife.

Mr Casey:

– I think the honorable gentleman is misinformed.

Mr JAMES:

– I have letters from the department showing that in West Wallsend and other places the invalid pension has been reduced because of what the husband has earned on emergency relief work, on behalf of himself and his children. If the honorable gentleman is of the opinion that such conditions should not be applied, he should immediately instruct the Pensions branch in New South Wales, which has made the reductions, to refund the amount withheld from pensioners.

Mr CASEY:
Treasurer · Corio · UAP

– When the honorable member for Dalley (Mr. Rosevear), a week or so ago, raised the matter that he has mentioned to-night, I caused the Commissioner of Pensions to discuss it with the Deputy Commissioner in Sydney. In my instructions to the Commissioner I pointed out that the honorable gentleman had referred to the offence as a technical one, and requested him to inquire specifically of the Deputy Commissioner as to whether that was so; if it was, the honorable member’s representations would have full force. But I have been advised by the Commissioner that the offence was not a technical one. I have not seen a record of the court proceedings, but the fact that the man was required to enter into a bond of £10 to be of good behaviour for two years, and to repay £10 15s., rather suggests that it was not a technical offence.

Mr Rosevear:

– The payments were spread over two years, and he had to enter into a bond to maintain them.

Mr CASEY:

– I am assured that it. was not a technical offence; but if the honorable member can bring evidence to show that the offence was indeed merely a technical one, I shall have the matter re-opened.

If the honorable member for Hunter (Mr. James) will give to me particulars of a typical case along the lines that he has mentioned, the matter will be more expeditiously dealt with. My remarks in relation to legislation introduced into the New South Wales Parliament were based on information obtained on my instructions by telephone from Sydney last night.

Mr Rosevear:

– In respect to the case referred to by me, does the Minister contend that the pension should be withheld in respect of the period during which the investigation was taking place?

Mr CASEY:

– I cannot find myself in agreement with the honorable member’s contention that there should not be any distinction between an offence that is sufficiently important to warrant a complete stoppage of the pension and one that warrants a stoppage for one or two pay-days. It would be inhuman to debar a man from a pension because of some minor offence, but it might be proper to stop a pension if the offence were of a serious nature.

Mr Rosevear:

– Had I not intervened, the withholding of the pension might have continued for some months.

Mr CASEY:

– That is purely hypothetical. I repeat my assurance that I shall have the case re-opened if the honorable member can produce evidence that the offence was of a purely technical nature.

Question resolved in the affirmative.

House adjourned at 11.3 p.m.

page 1922

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Design of Postage Stamps

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

en asked the Minister representing the Postmaster-General, upon notice -

  1. Is it possible to utilize the same process of reproduction for our prospective new issue of Commonwealth stamps, as has been adopted for the new issue of King Edward VIII. stamps in Great Britain? 2.Is the machinery in the stamp issuing office not designed for this purpose; if not, what would he the cost of a machine to do similar work?
  2. Is the class of printing now adopted by the British Government much more costly than the surface-printing as adopted by the

Commonwealth with the previous King’s head 2d. Buries; if so, what would be the difference in the cost of production for each 100,000 stamps ?

Sir Archdale Parkhill:
UAP

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

  1. No.
  2. The photogravure method would involve the installation of special expensive equipment, and the maintenance of a highly specialized staff, which would be employed in stamp printing for only a small portion of the year. Actual costs are not available.
  3. The information is not available.

Australian National Travel Association

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

en asked the Minister for Commerce, upon notice -

  1. What was the reason for increasing the Commonwealth grant to the Australian National Travel Association from £ 10,000 last year to £15,000 for the current year?
  2. Has the Government any power with regard to the appointment of the employees of the association?
  3. If not, what controlhas the Government over the rightful expenditure of the association’s funds?
  4. From what other source does the association draw its funds, and what is its total annual income?
  5. What official report and balance-sheet (if any) is furnished by this association to the Government?
Dr Earle Page:
Minister for Commerce · COWPER, NEW SOUTH WALES · CP

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

  1. The association is doing valuable work in the encouragement of tourist travel to Australia. The grant is being increased to enable the association to intensify its activities.
  2. and 3. The Secretary, Department of Commerce, is a member of the board of the association. The association was established by the Commonwealth Government, and all members of the Board act in an honorary capacity. The Government has the fullest confidence in theboard. If, at any time, it ceased to have such confidence, it would withdraw its patronage.
  3. The funds of the association, in the year 1935-36, were derived as follows: -
  1. The activities of the association are under constant notice, through the Government representative on the board. The association also submits an annual statement of receipts and expenditure.
Mr James:

s asked the Prime Minister, upon notice -

In view of the widespread unemployment at the New South Wales coal-fields and coke ovens, does the Government propose to take any action to protect the interests of these Australian industries against competition from exports of coke from South Wales, from where a shipment of 5,400 tons is now on the way to Port Pirie by the steamer Shakespeare, with further shipments to follow?

Mr Lyons:
UAP

– It is understood that, arising out of industrial difficulties in the coal and coke industry, stocks of coke in South Australia were running low. Action was therefore taken to order several shipments from overseas. The need for the grant of increased protection does not arise. The existing tariff protection ensures that these shipments will land at a higher cost than that at which Australian coke can be purchased. Exports of coke from Australia have, for a number of years, exceeded by many times the quantities imported into Australia.

Mr Curtin:

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

What was the approximate amount of customs duties collected on the imports from the following countries for 1935-36 : - (a) the United Kingdom; (b) other British countries; (c) all foreign countries; and(d) the total of all countries?

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

-As the statistical figures of imports for the year 1935-36 have not yet been fully dissected it is not possible to furnish the detailed information asked for.

The only figures available at present are as follows: -

Northern Territory toWyndham: Proposed Railway

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

en asked the Prime Minister, upon notice -

  1. . Has a request been received by the Government from the Australian Meat Board, for a survey of a proposed line of railway from the western p// /It of thu Northern Territory to tlie Wyndham Meat Works?
  2. Will the Government take the suggestion into favorable consideration?
Mr Lyons:
UAP

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

  1. Yes.
  2. The matter is receiving consideration.

Wireless Broadcasting: Address by Mr. John Lawson, M.P.

Mr Ward:
EAST SYDNEY, NEW SOUTH WALES

d asked the Minister representing the Postmaster-General, upon notice -

Whether any fee was paid to the honorable member for Macquarie for his address delivered* over an A class broadcasting station upon his impressions during his travels abroad?

Sir Archdale Parkhill:
UAP

– Inquiries are being made and a reply will be furnished to the honorable member as early as possible.

Government House, Canberra

Mr Paterson:
CP

n. - On the 12th November, the honorable member for Capricornia (Mr. Forde) asked the following question, upon notice -

What is the total amount spent on the GovernorGeneral’s establishment at Canberra since Parliament was transferred here?

I am now in a position to inform the honorable member that the expenditure for the period of approximately nine and a half years amounted to £47,378.

Sandy Bay Rifle Range.

Sir Archdale Parkhill:
UAP

– On the 13 th November, the honorable member for Denison (Mr. Mahoney) asked the following question, without notice -

Can the Minister for Defence give any information regarding the agreement between the Defence (Department and the Hobart City Council for the removal of the Sandy Bay Rifle Range?

I am now in a position to inform the honorable member that some four years ago, in deference to the wishes of the Hobart City Council and other interested parties, the Defence Department agreed to transfer the small arms range from Sandy Bay to Glenorchy. The terms and conditions of transfer were accepted by the council during 1935. These were reduced to a formal deed of agreement between the two parties, the draft of which the council submitted to the Defence Department during April, 1936. Minor aspects of this agreement are ‘ now being adjusted prior to completion of the deed by the parties.

Invalid Pensions

Mr Casey:
UAP

y. - On the 13th November, the honorable member for Hunter (Mr. James) asked the following questions, upon notice -

  1. ls it a fact that the pensions of invalid pensioners arc being reduced whore the husband of the pensioner, on relief work, is earning from 27s. to 37s. a week?
  2. Is it a fact that it is recognized by the legislation of the State of New South Wales that in such a case the husband of the pensioner is working for himself and his children only?
  3. Will he consider an immediate amendment of the Invalid and Old-age Pensions Act to include the principle recognized by the Nev South Wales Government that the earnings of a husband on relief work are for himself and his children - and not for the maintenance of his pensioner wife?

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

  1. Invalid pensions are not reduced if the wages are received in lieu of sustenance or food relief for work performed under any scheme of emergency or intermittent relief work, provided the amount of invalid pension is taken into account by the State authority in determining the eligibility of the person to receive such wages.
  2. So far as I am aware there is no legislation covering this matter.
  3. The amount of wages received by a relict worker in respect of his children is not regarded as income for pension purposes, lt is not considered necessary, therefore, to amend the law in the direction indicated.

Spondylitis.

Mr Hughes:
UAP

s. - On the 12th November, the honorable member for East Sydney (Mr. Ward) asked whether in view of the decision of the Repatriation Commission not to accept spondylitis as a war disability, the Minister for Repatriation could state whether it was a fact that a present member of this House is in receipt of a war pension on account of this disability? The honorable member has been misinformed, as the Repatriation Commission pays a large number of pensions on account of spondylitis. On the 6th November, in reply to the honorable member for Lang, I stated that the Repatriation Commission could not accept all cases of spondylitis in returned soldiers as being a war responsibility.

Cite as: Australia, House of Representatives, Debates, 17 November 1936, viewed 22 October 2017, <http://historichansard.net/hofreps/1936/19361117_reps_14_152/>.