15 September 1922

8th Parliament · 2nd Session

The President (Senator the Eon. T. Givens) took the chair at 11 a.m., and read prayers.

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Sugar Agreement

Senator Buzacott brought up an interim report from the Joint Committee of Public Accounts upon sugar.

Ordered to be printed.

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The following paper was presented: - Iron and Steel Bounty Act - Particulars ol Bounty paid, &c., Financial Year 1921-22.

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Motion(by Senator Plain) Agreed to-

That the report from the Printing Committee presented to the Senate on14th September, 1922, be adopted.

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Motion (bySenator Pearce) agreed to -

That leave be given to introduce a Bill for an Act toamend the Senate Elections Act

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Bill received from the (House of Representatives, and (on motion by Senator E. D. Millen) read a first time.

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Bill received from the House of Representatives, and (on motion by Senator Earle) read a first time.

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Proposed Sale

Senator LYNCH:
Western Australia

.-I move-

That the action of the Government in deciding to dispose of the Commonwealth Woollen

Killswithout the consent of Parliament is not in accord with prudent public policy, is a violation of the responsibilities and rights of the

Parliament under the Constitution, and a usurpation of its power, and as such does not meet With the approval of the Senate.

As honorable senators will see, my motion involves two issues or two principles. I wish, before proceeding to discuss it, to thank the Leader of the Government ia. the Senate (Senator E. D. Millen) for entering into a reciprocal arrangement whereby I am in a position to submit the motion for the consideration of the ‘Senate this morning. Though it may appear to be quite simple, the motion, in my view, raises a very important principle. I have said that, it involves two issues. The first is whether or not the action of the Government, in proposing the sale of the Commonwealth Woollen Mills, is in -keeping with matured, prudent, public policy; and the next is whether this Parliament, under the Constitution, has, in the circumstances, been treated by the Government as it should be treated.

Referring to the first issue involved, I should like to remind honorable senators that the Government proposal to dispose of the Commonwealth Woollen Milte at Geelong, without the consent of Parliament, is not in accord with the wellreasoned public policy of the Commonwealth. Honorable senators will recognise how true this is when I direct their attention to a time before we indulged in many of the free-and-easy things in which we have engaged in the political field. The best judgment was brought to bear upon the question of whether or not the State should embark upon enterprises of a kind deemed advisable. In every State of the Commonwealth public opinion was flowing strongly in that direction, and exercised’ a very powerful influence! in giving effect to that policy. In- New South Wales the State acquired a coal mine. In New Zealand, which is outside the Federation, the ‘State also acquired a coal mine. In Western Australia, before the advent of Labour influence in politics, the State went in for very many things, which represented a distinct departure front previous practice. In South Australia, under a purely Liberal Government, there was set up what was known as the .State Produce Department. That Department- was availed of very freely, and was much appreciated by those who made use of it. The New Zealand Government, and also the Queensland Government, went in for insurance bud ness.

I mention these matters to show that in all the States and in the Federation the Executives abandoned the ‘ role of merely preservers of order, carrying out the civil function of seeing that individuals were given free play in their respective spheres, and engaged in business enterprises themselves. They did so because ripened public opinion had arrived at the conclusion that it was well and . wise that they should do so. We have since indulged in many big enterprises, and, in some cases, have experimented’ most rashly in the field of industry. This in no way affects what I set out to demonstrate, namely, that the decision to embark upon this enterprise for the. establishment of Commonwealth Woollen Mills at Geelong was part and .parcel of the well-reasoned policy adopted by the several communities forming the Federation. I .do not desire that my motion should give rise to a discussion of the question of whether or not it is right that the State should embark in these enterprises. -I do not want the two issues mixed up. I desire that, the proposal of the Government to sell the Commonwealth Woollen ‘Mills’ shall be decided on the merits’ of. the question of whether the. mills should be sold, and, if so, without the consent of Parliament. That, and that alone.

In addition to the development of public opinion to -which I have referred, there has been a feeling exhibited that, so far as the defence of the country is concerned, some action should be taken which, in emergency, would prove of advantage to the Commonwealth. There was no feeling in the minds of the people so apparent as a fear that they might be made victims through the letting of Government contracts during war-time. . Their knowledge of the practices of wartime contractors in the Old Country led the people of the Commonwealth to be on the- alert in this regard. It induced them to set up in the several States, and particularly in the Commonwealth, « number of adjuncts or auxiliaries of the defence system of the country, in order that, when the time came for its defence, the people would not be completely at the mercy of those who would exploit , the necessities of the nation for their own benefit. For this reason we established a Small Arms Factory, the Commonwealth Woollen Mills, and a Harness Factory, and so on. This was done at a time when the people were in a very deliberative frame of mind, and they were not rushed into the business by considerations arising out of the great struggle which afterwards took place. The public temper and feeling in 1910 were responsible for the establishment df the Commonwealth Woollen Mills. The Government came down to Parliament and asked for a certain sum of money to set up these mills on the shores of Hobson’s Bay.

Before I .touch upon the rights or wrongs of the proposal to sell these mills, so far as this Parliament is concerned in the matter, I should like to make some reference to the way in which this particular enterprise “has worked out. It has had praise lavished upon it in several forms, but I do not think that any higher praise has been given to it than was given by those who might now naturally be expected to have opposed the sale of the enterprise. When the Bill to give effect to the proposal was introduced in this Chamber I car. remember .Senator Cameron getting up in . his place here, and, though he did not belong to the then triumphant party in the ‘Senate, he welcomed the Bill for the establishment of this and other Defence mills. He cited as a valuable precedent for the proposal the action of the British Government in establishing at a place called Pimlico, in the Old Country, a manufactory for turning out uniforms for the ‘British Army. Senator Cameron .based his support of the proposal to establish the ‘Commonwealth Woollen Mills on that British precedent. The mills were established then. The war happened., and they still continued to operate with great and unmeasured benefit to this country, as I shall prove. The proof lies, in part, in what the present Minister for Home and Territories (Senator Pearce) said, as reported in Hansard of the 16th October, 1918-

I can substantiate what Senator Reid has said as to the fair price at which those woollen materials are being produced. We are manufacturing a tweed out of which we make the sac suits’ issued to soldiers upon discharge. Those are costing the Department about 30s. each - that is, for the material and to make them up. A master tailor giving evidence in Western Australia, in an arbitration case, stated that at the present price of similar tweed on the market, and for him to make it up, he could not supply the equivalent for £6.

That statement is to: the effect that suits of clothes were supplied to returned soldiers at a cost of 30s. each to the Department, and, according to the statement of a witness in the Arbitration Court in Western Australia, they could not have been made and sold elsewhere for less than £6 per suit. Thus there was a clear profit of about £4 10s. on each suit to the returned soldier. I believe that the number of men who returned from the Front was in the neighbourhood of 260,000. If we wipe off the odd 60,000, and say that 200,000 of them availed themselves of the opportunity to be supplied with a suit of clothes, we see that the mills were the direct means, of saving to the returned soldiers something like £900,000 in the supply of this particular material alone. The balance-sheets show that the mills are on a most prosperous footing. They are a well-managed, well-conducted enterprise. I do not want to read the balance-sheets at length, but the last, two that have been placed before honorable senators show that after allowing for every ‘ conceivable kind of charge that would be made in a well-managed concern, including sinking fund, interest upon capital invested, and depreciation to a very safe figure, up to 15 per cent, in the case of machinery, the mills have made £60,000 profit in five years.

Other incidental benefits are manifold. Having regard to the vast* yardage of material supplied while the war was in progress, the saving to the people of the Commonwealth by the existence of the mills, and the benefit they have been to the soldiers, would be very hard to estimate. We may be very sure, however, that, on a most modest estimate, they must have saved tens of thousands of pounds to the taxpayers of this country. The profit for the last year for which the figures are published was £22,600; the accumulated profit for five years was £60,000, and the amount owing to the Treasury, representing capital invested, was £295,000. I am now referring to the success of the mills from a purely hardheaded balance-sheet point of view. On a balance-sheet basis, they stand justified. They have saved the returned soldiers an almost fabulous sum for. suits supplied and material which, if they had not been in operation, and the Government had not been in a position to supply suits at 30s., would have cost the returned men ever sat much more. It is now proposed to sell the concern.

Senator E. D. Millen, who, I am glad to say, is by no means a weak member of our present Executive, made some apposite remarks on this subject in 1920. He said, “ I do not think we ought to consider the establishment of industries outside those which axe necessary to provide the Government with its own requirements. I do not pretend that we cannot serve the public need by utilizing factories, which were started for a purpose, when that purpose has been served, in such a way as to make their surplus products available to the general community.” That is the opinion expressed by Senator E. D. Millen as to the wisdom of continuing factories of this kind. I do not know what has been done in Cabinet, but it appears that Senator E.D. Millen, if he stood to his opinions, has been over-borne.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– My opinions are the same now as they were then.

Senator LYNCH:

– Then I hope that the Minister will reconcile his present attitude with the opinions which he expressed in that speech. I would not like to tackle him as a controversialist, for he can hold his own, and much more than his own, with any individual member of this ‘Chamber, even with a bad case. The mills were established in response to the almost overwhelming call of the people that the Defence system of this country should have some form of subsidiary help, so that when the time came to call for supplies the Government would not be entirely dependent upon private traders. It is now proposed to dispose of them. I think that is a wrong public policy.

In regard to the legislative or constitutional aspect of the question, I confess that I am very ill-equipped for the task I have taken in hand,in view of the fact that there are many professional men in the Chamber who, by reason of their calling, are much more entitled, and much better able, to argue this point than I am. I submit that the Government is not acting in conformity with the provisions of the Constitution, and that it is essentially an illegal act to decide upon the disposal of the mills without consulting Parliament. Certain definite powers have been given to Parliament under the Constitution, which makes Parliament supreme in the matter of legislation. Parliament is protected against any form of interference from any authority whatever, whether a Government, a Governor, or anybody else, and there must be no trenchment upon the almost semi-sacred right of Parliament to enact legislation and see that it is observed inviolably.

The decision to erect the mills was part of certain legislation passed through this Parliament. It is found first in Act No. 41, relating to an appropriation for works and buildings in 1910. In the schedule of the Bill the Government brought forward a proposal for the expenditure of a sum of£55,000, included in which was an amount for the erection of the mills. The Government had to come to Parliament for consent to the expenditure, which amounted, roughly, I believe, to £30,000. It was embodied in the schedule of a Bill, which became an Act of Parliament. The schedule of an Act is as much a part of the Act as is the most important section of it. It is set out in section 13 of the Acts Interpretation Act that “Every schedule in an Act of Parliament shall be deemed to form part thereof.” This sum of £30,000, or thereabouts, formed part of the schedule of an Act of Parliament, and as such it is not a kind of entity that stands apart, but operates like the Act of Parliament itself. The appropriation is part of the schedule, and the schedule, being part of the Act, it is quite clear that the proposal to sell the mills is an attempt to ignore part of an Act of Parliament. I may be met by the objection that a’ Works and Appropriation Act is of a special class that may be set aside, and that time may operate upon it and exhaust it. The following words appear in a familiar set of pages attached to every volume of Acts passed by this Parliament: - “ Chronological table of Acts passed from 1901 to 1912, showing how they have been affected by subsequent legislation or lapse of time.” I wish to direct attention particularly to the phrase “ lapse of time.” In a long list of Acts passed since 1901 there are certain Acts which time has played upon and rendered void. Supply Acts belong to that class, but when we turn to Appropriation Acts, there is no reference to time having any effect whatever upon them. The Act to which I refer is entitled Appropriation (Additions, New Works, and Buildings) Act, and is numbered 41 of 1910. Immediately preceding that measure is Supply Act No. 40, opposite which appears this note, ‘ ‘ Operation exhausted.” In other words, the time arrived when it was no longer operative; but the Appropriation (Additions, New Works, and Buildings) Act, No. 41 of 1910, in the schedule of which provision was made for the erection of the Woollen Mills at Geelong, still lives, and is part and parcel of the existing legislation of the Commonwealth. That is an opinion I express as a layman, and it is a phase of the question which, I trust, will bo discussed by honorable senators who may hold opposing views. The amount I have mentioned, which was set apart for the establishment of the mills, is shown in the schedule, which is a part of the Act of Parliament, and “still, I maintain, operates.

The authorities I shall quote, somewhat briefly, go back to the time when the power of Parliament was questioned, not only consistently, but insistently, and very effectively, because the power of Parliament then, as honorable senators are aware, was next door to nullity. The times have changed, and I shall now quote from Quick and Garran’s Annotated Constitution of the Australian Commonwealth in its reference to section 52 of the Constitution, which relates to the exclusive and almost supreme power of Parliament, and to the enactment of legislation without interference from any outside body whatever. This is what they say -

The legislative power of the Commonwealth shall be vested in a Federal Parliament which shall consist of the Queen, a Senate, and a House of Representatives, and which is hereinafter called “ The Parliament “ or “ The Parliament of the Commonwealth.”

What is the nature of the function of Parliament? This is what is to be found on page 69 of the work to which I have just referred -

Legislation consists in the making of laws. It is contrasted with the executive power, and with the judicial power which deals with the interpretation and application of the law in particular cases. “ The legislative power of ihe Commonwealth “ referred to in this section means .the legislative power in respect of matters limited and denned in the Constitution. .

The functions of the Executive are likewise defined - . . The executive authority, in the system of government established by the Federal Con stitution, includes all those discretionary or mandatory acts of government which can be lawfully done .or permitted by the Executive Government, in pursuance of powers vested in it, or in pursuance of duties imposed upon it partly by the Constitution and partly by the Federal legislation. Generally described, the powers and duties of the Federal Government relate to the execution and maintenance of the Constitution and the execution and maintenance of the laws of the Federal Parliament passed in pursuance of the Federal Constitution.

The functions of Parliament and the inherent powers which it is entitled to exercise under the Constitution are enumerated.

Senator Bakhap:

– The honorable senator can anticipate the argument that will be used in answer to his contention. It will be said that it is an executive act for which the Government will take full responsibility, I suppose.

Senator LYNCH:

– I can quite realize that during the war period, and since, many free and easy things were done for which the war, of course, was an ‘ample excuse. Pot instance, the Prime Minister (Mr. Hughes) purchased a number of ships without the consent of Parliament, and that, in ordinary times, would have been considered a most extraordinary act. We are not now engaged in war, but are living just yet in peaceful times, and there is not the slightest justification for action: such as this to be taken without Parliament being consulted. Let us see exactly what happened in days gone by, when the power of Parliament to legislate was not supreme. We are all familiar with the Bill of Rights, and with the conflicts which, occurred over 240 years ago. Kings at that time were in the happy position of doing things without consulting Parliament. The Kings in various dynasties set aside Acts of Parliament of their own: volition, and the practice became so prevalent that Parliament found it necessary to assert its privileges. The Kings in early time used what was known as the dispensary power to free some of their subjects from the’ penalties imposed under Statutes, but Parliament came to recognise and decide that Acts of Parliament were not to be lightly brushed aside as had been done in the past, as they had been framed in the interests of the people. This is what Anson says on page 301 of

Law and Custom of the Constitution -

To this remonstrance the King replied with a rebuke to the Commons for their lack of confidence in him; and it would seem that if a dispensing power claimed for such purposes and with such an intention could by any possible interpretation come, asHallam seems to think it might come, within the legal rights of the Crown, it were idle to endeavour to draw nice distinctions concerning the limits of a power which was in effect superior to Parliament. So thought the Parliament which passed the Bill of Rights, for the dispensing power is therein dealt with in such a way as to preclude its further exercise. … It is declared and enacted: 1. That the pretended power of dispensing with laws, or the execution of laws byRoyal authority, as it hath been assumed and exercised of late, is illegal. 2. In section 12, that from and after this present session of Parliament, no dispensation by non obstante of or to any Statute, or any part thereof, shall beallowed, but that the same shall be held void and of no effect, except a dispensation be allowed of in such a Statute, and except in such cases as shall be specially provided for by one or more Bill or Bills to be passed during this present session of Parliament. From these clauses of the Bill of Rights one may deduce the following propositions: -

That the dispensations granted by James II. were illegal.

That there were dispensations of older date which the Bill of Rights was not intended to invalidate.

That from the date of the passing of the Bill of Rights no dispensation of any Statute or part of a Statute was to be valid unless Parliament made provision for the same in the terms of the Statute.

The monarch of the period having been deprived of his acquired right as to the dispensing power, then turned to the practice of suspending laws that he personally did not approve. Again Parliament was called upon to assert its rights, and it did so in no unmistakable way.

Whatever might be said for the possibility that the dispensing power could be exercised with salutary effect, it was clear that the suspending power as claimed and used by James II. was inconsistent with the very existence of a Parliament, as a Legislature. The Lords and Commons might meet to vote supplies, to state grievances, to criticise the Ministers of the Crown, but it would be idle for them to make laws which the King could at any moment annul. The Bill of Rights accordingly made short work of the suspending power, enacting - “That the pretended power of suspending of laws or the execution of laws, as it hath been assumed and exercised of late by Royal authority, without consent of Parliament, is illegal.”

That is the historical origin of the determination by Parliament not to allow any outside authority, even the King, to interfere with the supreme and exclusive right of Parliament to legislate. I shall be told that Acts require the Royal assent; but in that connexion, I may refer to Tarring’s Law Relating to the Colonies in which three classes of Colonial Legislatures are referred to. They are set out by Tarring in this way -

The Colonies may be classified according to their form of government as follows: - (A) Class 1 comprises those in which the Crown has the entire control of legislation while the administration is carried on by public officers under the control of the Home Government. These are called Crown Colonies. In this class the legislative power is either entirely in the hands of the Governor, as sole legislator, at Gibraltar, St. Helena, Basutoland,&c, or it is exercised by the Governor and a Council nominated by the Crown; this Council’s authority again being derived either from the Crown only as in British New Guinea, Ceylon, Hong Kong, &c., or from the Imperial or local law, as in the Straits Settlements, &c.

The second class comprises Colonies possessing representative institutions, but not responsible Government, in which the Crown has no more than a veto on legislation; but the Home Government retains the control of public officers. Here the laws are made by the Governor, with the concurrence of either (a) two legislative bodies - a Council composed of members nominatedby the Crown, and an Assembly composed of elected members, as in the Bahamas, Barbados, and Bermuda, or of a single legislative chamber partly elective and partly nominated by the Crown, as in British Guiana, Jamaica, Mauritius,&c.

Class C consists of Colonies possessing representative institutions and responsible government, in which the Crown has only a veto on legislation, and the Home Government has no control over any public officer except the Governor. Under responsible government the Executive Councillors are appointed by the Governor along with reference to the exigencies of representative government, the other public officers by the Governor on the advice of the Executive Council. In no appointment is the concurrence of the Home Government requisite. The control of all public Departments is thus practically placedin the hands of persons commanding the confidence of a representative Legislature. To this class belong Canada, New South Wales, New Zealand, Victoria, &c. The same authority refers to Colonial legislation under which the Commonwealth power to legislate is as follows : - The Governor may directly refuse his assent to a Bill, or he may reserve it for the consideration of the Crown, when the Bill does not come into force till it has either explicitly or constructively received the Royal assent, that is, the assent of the English Minister, that is, the indirect assent of the Imperial Parliament. The Governor may give his assent, and a Bill may come into force, but it may be disallowed by the Crown afterwards within two years. That is the assent of the British Ministers which is. indirectly the assent of the Imperial Parliament. , That clearly shows that the right of veto on our legislation is held only by the Imperial Parliament. I mention these facts to show the jealous regard which Parliaments in the past have had when any attempt has been made to usurp their powers. This has happened, and I feel entitled to raise my voice in protest against the action of the Government. A fellow senator has suggested that if we do not object on this occasion, we do not know what may happen next. As a matter of fact, if there were no newspapers printed in Melbourne as in the western State we would not know even now where we stand in this matter - whether the mills were to be retained by the Government, or given over to private enterprise. Not long ago I asked the. Leader of the Senate **(Senator E. D. Millen)** if the Government would place before honorable senators particulars of the proposed sale of these mills, and give this Chamber time for consideration before any offer was finally accepted, and the answer was " No." But for the fact that there are newspapers in this city, we should not know what has been done in this matter. This Chamber has not been officially informed yet. Officially it is in blissful ignorance of any proposal for the sale of the mills. Information on this subject is obtained from' the newspapers, but for the existence of which we should be thrown back upon our imagination, or, perhaps, be obliged to go down one of the main streets of this city, and form one of a queue at some of these establishments wherein are to be found spiritualists and clairvoyants, and ask them what the Government were going to do about this matter. Or, perhaps, we might be expected to dream about it. It is quite true that, in the speech delivered by the Federal Treasurer **(Mr. Bruce)** elsewhere, we have been informed indirectly of the intention of the Government to dispose of the mills, but no statement to this effect has been made to this Chamber. As members of a legislative chamber of some importance, we should not be expected to go groping around for information as to the intentions of the Government in regard to any proposal of public importance, or seek it in utterances delivered by a Minister in another place. We have a right te expect to be informed here in the constitutional -and approved manner. We are entitled to be treated with courtesy, and not be expected tamely to submit to any kind of indifferent treatment. At all events,'4 'I shall not submit without a protest. It is not enough for me to be told in the press that the Treasurer in another place has made a statement that these mills arc to be disposed of. This Chamber had to be appealed to to pass the money to pay for the erection of those mills. That was in conformity with the constitutional rights of this Senate ; and Parliament, including the Senate, should be endowed with the exclusive authority to say whether they shall be demolished or not. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- Unless Parliament specifically delegated that power to some one else. {: .speaker-KRZ} ##### Senator LYNCH: -- "Well, I shall be pleased to hear the Minister on that point. The erection of those mills was the direct result of an Act of Parliament, which still stands; but, apparently, the Ministers have taken it upon themselves to declare, in the right royal way of a. monarch, that they are to pass out of existence as a Government institution. William the Conqueror, we are told, exercised power such as this. I do not know whether we have another William the. Conqueror, or whether he is only William the Conundrum. In my judgment, it is not competent for the Government of its own sweet will to say whether these mills shall pass out of existence as a Government activity or not. The principle of creation involves the right of demolition. The principle is wrong, and cannot be justified by any precedent, having regard, to the dignity, importance, and constitutional rights of this Chamber. Very many valuable suggestions could have been made here if only the Government had thought fit to consult us, but apparently, though we are the Senate, we ara not entitled to consideration. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- :I think the honorable senator should say that it is because it is the Senate. {: .speaker-KRZ} ##### Senator LYNCH: -- I think that, because the quality of magnanimity is so inherent in members of this Chamber, the. Government are disposed at times to overlook the importance of our constitutional position. Perhaps that is one reason why we are treated so slightingly. That, I believe, is the most charitable construction I can place upon the action of the Government in this matter. At all events, while the authority of this Chamber was sought to create this institution, when it was thoroughly established apparently it was not deemed necessary to seek authority from the Senate for its ultimate destiny as a Government activity. If honorable senators think that is the correct procedure, they are entitled to their opinion; but it will not pass without my protest, at all events. The sale of these mills cannot be justified, unless, of course, public opinion has undergone some strange metamorphosis of late, and I am not at all satisfied on that point. There has been no change, so far as I am aware, in public opinion since the time when **Senator E.** D. Millen made an unequivocal declaration of Government policy a few months ago, and, therefore, there is no warrant for the disposal of these mills. Suggestions which I have offered on other occasions in respect of various matters have been so lightly treated, particularly by the Leader of the Government in this Chamber, that I might easily be discouraged into saying nothing now. But I am not lightly discouraged, and so I suggest that, instead of selling the mills outright, and allowing them to pass entirely out of Government control, and, perhaps in the nearfuture, being compelled to go over the same track again to create and perfect the organization, the Government should lease the mills, with the definite understanding that if ever they are again required in the public interest they should be returned to the Government in their present state of efficiency. The sale of the mills is not by any means the last word in wisdom. At whose suggestion have the Government taken this action? Apparently the influence exerted by Flinderslane manufacturers is entirely responsible. Other producers and citizens do not count, and are not considered. If I went out to work a gold mine, or if I sought to produce wheat, butter, milk, or any other commodity, I should have to face the fierce blast of competition from all and sundry. But because these people are in the centres of population, and located in Flinders-lane and elsewhere as manufacturers and producers of clothing, and speak without break or interruption through their organized agencies, they possess, it seems, some magic power, and can bend the Govern ment to their will, on the plea that they must be protected. Other producers, I remind honorable senators, have no such special privileges extended to them. The mills were established to secure us against the spoliation - that is a strong word, but it fits - of these men, who would have no regard for their country's interests, as was evidenced in the Army contracts, and now on this *ipse dixit* of the Government, they are to be sold. The constitutional position is quite clear. When **Senator de** Largie was introducing a measure on the same lines in the early days of Federation, it was shown that the late Alfred Deakin believed that the Government would be within their constitutional rights in engaging in these enterprises, and, if necessary, disposing of their surplus stocks in the ordinary course of trade to supply the needs of the community. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -Not to supply the needs of the community, but to dispose of the surplus stocks. Senatorde Largie. - That is very much the same thing. {: .speaker-KRZ} ##### Senator LYNCH: -- And that is just what I am saying. **Mr. Deakin** held that, after the needs of the Government have been supplied, and in order to keep the enterprise going, it would be within the constitutional rights of the Government to allow the surplus products of the mills to be disposed of outside. {: .speaker-K1W} ##### Senator Benny: -- The late Alfred Deakin also said that it was not within our constitutional authority to nationalize a wheelbarrow. {: .speaker-KRZ} ##### Senator LYNCH: -- And no doubt he was right. The two views are perfectly reconcilable, if a wheelbarrow - to use the classic reference mentioned by the honorable senator - were used for the purpose of a wheelbarrow, and not as a State enterprise, to supply governmental requirements. All that was necessary in this instance was for the Government to approach the Senate and definitely state their policy. Everything, then, would have been in order, and the Senate would have been entitled to express its opinion upon the proposal to sell. The constitutional power that resides in this Chamber would, in those circumstances, have been respected and preserved. This principle was observed only yesterday, when there was a motion before this Chamber for the return of certain maps, valued at about 4£d., to one of the Departments. To put the matter in order, it was necessary to resort to the device of submitting a motion in the ordinary and constitutional manner. But what has been done with reference to an undertaking which cost this country over £300,000? That property, it appears, is to be disposed of without any reference at all to the Senate. It is to be kept in the dark. Surely honorable senators can see the screaming farcical inequality in the procedure of the' Government, in consulting the Senate about a trifling and minor matter, and utterly ignoring this Chamber in a case of an undertaking involving the. expenditure of a very large sum of money, and at the same time involving a radical departure in policy. This course is not conducive to the orderly conduct of business here, and it has not the indorsement of public opinion outside. There is no warrant whatever for anticipating that public opinion in this matter is behind the Government. I am now voicing my protest, and hope it will be substantially supported by other honorable senators. {: #subdebate-6-0-s1 .speaker-K18} ##### Senator BAKHAP:
Tasmania -- **Senator Lynch** has very properly and prudently confined himself to a discussion of the politic nature or otherwise of the Government's act in deciding to dispose of the Commonwealth Woollen Mills without consulting Parliament by means of a Bill. Before the Senate could deal with the matter, and exercise any power in regard to the rejection of the proposal, a Bill would have to be submitted. **Senator Lynch** has argued what he imagines to be the constitutional position very ably indeed, but I think he has made one mistake. There is no constitutional obligation on the Government to secure the consent of this Chamber to the sale of the mills, df the Government desire to sell them. It would be an Executive act. I feel sure I am to a certain extent anticipating the argument that will be used to justify this action on the part of the Government. The Government exercise their undoubted power to *do* this thing, and they are responsible to the House of Representatives for the exercise of that power. If any act of policy meets with the disapproval of that Chamber, the Government lay themselves open to dispossession of the reins of power. It is quite true, as **Senator** Lynch has pointed out, that before money could be appropriated and set aside for the erection of these buildings and the purchase of machinery, the consent of the ; Senate had to be obtained; and it is undoubtedly somewhat anomalous that it is contended that the sale of these buildings and plant could be effected without the consent of this Chamber. I have considerable sympathy with **Senator Lynch** in hia argument, and, seeing that the Senate had to be consulted before this national activity could be sanctioned, and before money could be appropriated for the erection of buildings and the purchase of machinery, it would have been more desirable on the part of the Government to take such a course as would have involved the obtaining of the formal consent of this Chamber. State rights are involved, and the Senate's duty is to protect the financial interests of the various States. It therefore seems natural that" the consent of this Senate should beobtained before disposing of the assetthat it was called upon to help to create.. I am avoiding any discussion of the question of the desirability of getting rid of these mills, but I am going to support **Senator Lynch,** because I think the Senate should retain its right - I do not say it has an absolute and literal constitutional right in this connexion - but' its undoubted, if not legislative, at least moral right to be consulted in regard to the disposal of a national asset which it had to be called upon to assist to create. I do not go as far as **Senator Lynch** does in his motion, because I do not think the action of the Government is a violation of the rights of Parliament under the Constitution. The Constitution sets out with very "great clearness that moneys cannot be appropriated without the consent of Parliament, but there are many things that a Government can do as Executive acts for which they are responsible to Parliament nominally, but not to this Chamber actually. They are only responsible to the House of Representatives. Honorable senators would do well to bear that in mind, when they try to insist on the rights of the Senate being upheld. If the action of the Government were displeasing to the other Chamber, there could be a vote of censure, and on the doctrine of collective Ministerial responsibility, the whole Government would have to go out of office. Were this doctrine not in existence, the Minister responsible for this particular act of policy -would be forced to bring in a Bill, and then the Senate would be called upon to give its consent to such a measure. But this act of public policy may be undertaken and consummated, as **Senator Lynch** has pointed out, without reference to this Chamber at all. To say that this is being done with complete disregard of the responsibility of the Government to the popular Chamber is wrong, because the Government are responsible to that Chamber for every Executive act, but the Senate has no power to impose its authority on the Government. I am carefully refraining from discussing the merit of the particular act of policy that has drawn forth recrimination from **Senator Lynch.** It may be a very good and desirable thing to sell these mills at present. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- Will you support a motion that condemns the sale on its merits *1* {: .speaker-K18} ##### Senator BAKHAP: -- No, I do not think the motion does that. If I support it, I want it to be clearly understood that I think the act of policy so important that the Senate's consent to the sale ought to be secured, even if this Chamber has no constitutional rights in this connexion. {: .speaker-KRZ} ##### Senator Lynch: -- The reservation is perfectly sound. {: .speaker-KS9} ##### Senator MacDonald: -- We had a motion in this Chamber for the restoration of some maps. {: .speaker-K18} ##### Senator BAKHAP: -- The maps were the actual property of the Senate by virtue of the Standing Orders, and they had to be restored. I do not think the present argument is amplified by the introduction of that matter. Were it thought desirable to increase the machinery or enlarge the buildings at the mills, and if those acts of policy necessitated expenditure, the Senate would have to be called upon to sanction that expenditure; but the whole box of tricks can be sold without any reference to this Chamber, because the act of policy does not come before us in the form of a Bill. There are means and ways by which the undoubted moral and legislative rights of this Chamber can be "impugned and evaded because of the existence of the present form of Ministerial responsibility. I support the motion, not because I think it is necessary to make any statement as to the virtue or otherwise of the particular act of policy- and **Senator Lynch** has to a large extent refrained from doing that - but because it is desirable . that the States Chamber of the Commonwealth should be consulted in regard to every form of Government activity that necessitates the appropriation of the moneys of the people of the various States. {: #subdebate-6-0-s2 .speaker-KUL} ##### Senator E D MILLEN:
Minister for Repatriation · NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- Bakhap has to some extent relieved me of the necessity of making more than a passing reference to one of the points that **Senator Lynch** seemed to stress, namely, that there has been some violation of constitutional rights. Whatever else there may have been, the Constitution is not involved in the slightest degree. Nowhere can the honorable senator point to a section in the Constitution that has been violated. If he could, the transaction itself would be null .and void. He may be able to make out a case for a breach in other directions, but nowhere has there been a breach of the Constitution itself. First of all, I would direct attention to what ^Senator Bakhap has said, both as to the merits of the proposal and as to whether the method of carrying the proposal out is correct or not. **Senator Bakhap** has made a very necessary and clear distinction. He is supporting the motion, not to record an opinion on the proposal to sell the mills, but because he thinks that Parliament ought to have been consulted. **Senator Lynch,** with the wisdom of an old parliamentarian, has given all sorts of reasons for has motion, so as to draw in all sorts of support. {: .speaker-KRZ} ##### Senator Lynch: -- You can make it the single issue, if you like. {: #subdebate-6-0-s3 .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- The honorable senator first said that this was not a prudent step to take, and then he went on to state that it was a violation of the rights of Parliament. First of all, I will deal with the question of whether the Government have exceeded their proper powers and functions in this matter. **"Senator Lynch,** diving into the past to refresh the minds of honorable senators as to the undoubted rights of ' Parliament, overlooked a comparatively modern, piece of legislation on which the Government can rely for the action, they have taken. This Parliament has undoubtedly the right to control the Government, but when it has specifically given a direction to the Government it must not complain if they proceed to carry out that direction. By the Defence Act, Parliament, the Senate, and **Senator Lynch,** agreed to. place a certain option in the hands of the Executive of the day. It said that the Governor-General, which, of course, means the Government, "might," and not "should," do a certain thing. The Government were directed under the Act to organize a Defence Force, and to obtain the necessary equipment and munitions for the Force. It is clear that a Defence Force without these things would be useless. Parliament went on to set out in exact words directly how the Government might provide this equipment. It practically said to the Government, " You can provide this equipment in whichever way you think best. If you like you may establish and maintain factories for the manufacture of naval and military equipment and uniforms." {: .speaker-KRZ} ##### Senator Lynch: -- Does not that "may" mean "shall"? {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- No, the matter was left to the option of the Government. They did for some time exercise their option by obtaining uniforms and equipment from private manufacturers. Later on the Government decided, in the exercise of the freedom of choice in the matter given them by Parliament, to establish factories to provide uniforms and equipment. Just as the Government exercised their option at one time to obtain necessary supplies from one source, and later found that in the circumstances then prevailing it was advisable to obtain them by another method, they have exactly the same right now to decide which method in their opinion is the best to adopt to do those things which Parliament said they might do in whichever way they considered best. There is a distinct direction in the Defence Act to the Government to provide these things in the way they think best. Until Parliament tells the Government that it is not disposed now to intrust the Executive of the day with the exercise of that option no one can make out a logical case against the Government for having exceeded its powers in this particular matter. This is not a new thing. There are being sold to-day by the various Departments of the Government hundreds of thousands of pounds worth of material. Honorable senators have seen in the newspapers recently advertisements of the sale of surplus stores by the Defence Department. Parliament was asked to vote the money to buy them, but no one has raised the question that Parliament should be consulted before they are sold. No one has said to the Government, " You shall not sell that pair of boots, that water can, or that dixie unless you come to Parliament for its consent." These sales are taking place in the discharge of a necessary Executive function. **Senator Lynch** will permit me to say that he now raises this point of the proper authority of the Government to sell the Commonwealth Woollen Mills because he objects to the sale of the mills. He is a believer in this Government enterprise, and he uses this contention as to the authority of the Government in the matter as a second string to his bow in the effort to defeat the object the Government have in proposing the sale of the mills. {: .speaker-KS9} ##### Senator MacDonald: -- They represent a most necessary Government enterprise. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- That is just the point. I am not going into the arguments for or against Government enterprises. I do not think that is necessary, but I do wish to submit that even the most ardent advocate of Government enterprises will surely pay some slight regard to the economic conditions under which they are carried on. **Senator Lynch** has paid me the compliment of quoting from a statement of mine. I was quoted also in another place. I repeat the statement to-day. It has to be remembered that at the time I made the speech from which these quotations are taken there was before the Senate a proposal not to establish mills to manufacture for public consumption, but to manufacture for the Government's own requirements. Between these two things there is a vast difference. I say that, however strongly a man may be opposed to socialistic enterprises, he may quite consistently support the idea of the Government manufacturing for its own purposes. {: .speaker-JXP} ##### Senator Drake-Brockman: -- One is constitutional and the other unconstitutional. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- That is so, but I did not intend to go into that phase of the question. I am reminded by the interjection of a reference made to the Government launching enterprises for their own purposes and selling the surplus production. I think it is held, though perhaps not too definitely,, that that would be constitutional. But the question arises : What is a surplus ? If I manufacture 100 articles and use five myself, and if I sell the remaining ninetyfive as surplus production, no one would contend that that would be a *bona fide* interpretation of the word "surplus." If I used ninety-five of the articles myself, and sold the remaining five, that would be admittedly in keeping with the spirit of the constitutional provision. To assume that we may manufacture only a negligible proportion of things for ourselves, and that the bulk of our production, upon which the success of a particular venture depends, may be disposed of to the public, if in keeping with the letter, would not be in accord with the spirit of the constitutional provision. {: .speaker-K09} ##### Senator Payne: -- Is that the position which the Commonwealth Woollen Mills occupy to-day ? {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- Undoubtedly it is. **Senator Pearce** has kindly supplied me with a reference which induces me to hark back to the question of the authority of the Government to sell Government property. If honorable senators will turn to the Audit Act they will find there provisions which were duly submitted to Parliament under which Ministers are authorized, in certain conditions, and on the signature of a Minister, to carry out such sales of Government property as I have referred to. Honorable senators will find the provisions in section 141 and following sections of the Audit Act. The Act also gives authority to the Railway Commissioner in similar circumstances to sell Government property. {: .speaker-KRZ} ##### Senator Lynch: -- I am asking what is the position under the Constitution. Of what use is it for the Minister to quote these things? {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- The honorable senator made a number of quotations. {: .speaker-KRZ} ##### Senator Lynch: -- I gave the authority of *Quick and Garran,* and the Minister gives us the Auditor-General. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- I have referred honorable senators to the provisions of an Act of this ' Parliament. I was asked by **Senator Payne** whether the position indicated in my simile is the position of the Commonwealth Woollen Mills to-day. I come now to the question of the prudence or otherwise of the disposal of the mills. When first established they were on a smaller basis than they are to-day. They were established specifically and definitely with the idea of providing for Government requirements. I do not say that a greater scope of operations was not considered advisable in the minds of some people, but I believe that those who. advocated the establishment of the mills were *bond fide* of the opinion that they should be established to meet our own needs for clothing and equipment. With that they coupled orders for the requirements of the State Governments. Some time after the establishment of the mills, the need for obtaining an enlarged output presented itself, and the scope of the operations of the mills was widened to include supplies to meet the requirements of local government bodies. At no time was any proposal made that the mills should do more than supply public needs. As the war proceeded the demand on the mills became increasingly heavy, and there was a desire to meet the requirements of many of our discharged soldiers. The result was that some additional plant wa3 put into the Factory. Since then, and this is in reply to **Senator Payne's** interjection, there has been a change of attitude on the part of the Government. It must be borne in mind that the Washington Conference has been held since, and has resulted in a vital change in our Defence policy. {: .speaker-KRZ} ##### Senator Lynch: -- The Washington Conference did not deal with warfare on land. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- It so altered conditions that to-day our requirements for Defence purposes are infinitely less than they were a couple of years ago. Let me give the figures which are supplied in a report from the manager of the mills. He says - >At the termination of the war the demand for military goods ceased immediately, but the mill was kept fully employed up to the end of 1919 in turning out the large quantity of tweed that was required for the civilian suits issued to members of the Australian Imperial Force on demobilization. (A suit was issued to each man free upon discharge.) > >Upon completion of the order for the tweed for the free suits, the Department was faced with the problem of how to keep the mill going - naval and military requirements being negligible - and it was ultimately decided to employ the surplus capacity of the mill in the manufacture of civilian tweed for sale to returned soldiers. Issues commenced in March, 1920, and from that date up to the 30th June, 1922, about 700,000 yards of tweed were supplied to the returned soldiers. > >The manufacture of civilian tweed for returned soldiers, together with such Commonwealth and State Government Department orders as were received, kept the mill fully employed until a few months ago. Towards the close of the last financial year it became evident that, owing to the falling off of orders from State Governments- Let me break in here to remind honorable senators that in Victoria, I think, the Premier has initiated a policy that the Government should not go to Commonwealth factories that pay the State no taxation, but should go to the private tenderers who are taxpayers of the State. {: .speaker-KRZ} ##### Senator Lynch: -- The supply of the requirements of State Governments was not in view when the mills were established. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- Undoubtedly it was, and I can appeal for confirmation of my statement to **Senator Pearce,** who was Minister for Defence at the time the mills were established. {: .speaker-K0F} ##### Senator Pearce: -- I say that State requirements were taken into consideration. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- It was distinctly understood that the mills would supply all public requirements for State and Federal Governments. {: .speaker-K0F} ##### Senator Pearce: -- As soon as they were established, we went out for Railway Department orders, and have been obtaining them ever since. {: .speaker-K09} ##### Senator Payne: -- Can the Ministerexplain why last year a vote of £40,000 was asked for additional plant? {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- That was for plant which it had previously been decided to add to the mills. {: .speaker-K09} ##### Senator Payne: -- No, it was for new plant to cope with increased demands. {: .speaker-K0F} ##### Senator Pearce: -- Prior to the Washington Conference we were anticipating increased Defence expenditure, in the light of the circumstances then existing. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- The manager of the mills further reports - >Towards the close of the last financial year it became evident that, owing 'to the falling off of orders from the State Governments, the decreasing demand from returned soldiers for civilian tweed, and reduced naval and military requirements for some time ahead, a full output could not be maintained unless some outlet for the product of the mill beyond the channels authorized by Government policy were opened. Upon the representations of the Department, the Government agreed, as a temporary expedient, to the mill selling up to 100,000 yards approximately to the trade, in order that dismissals of hands might be avoided, and to give time to decide what was to be done with the mill. > >The whole matter was gone into carefully, and an estimate made of the quantity of material likely to be ordered for Commonwealth and State Government requirements and for returned soldiers during the financial year 1922-23. The conclusion was arrived at that the mill could not expect to receive orders from such sources for more than 150,000 yards. The full annual output of the mill is approximately 600,000 yards ; and, as the Government did not propose to manufacture for sale to the public in competition with private enterprise, and did not desire to either partly or wholly close down the mill, it was decided to offer it for sale by public tender. "The relation of output to production costs is well known, and it is hardly necessary to add that, unless the plant is employed to its , full capacity, it is not possible to produce material at profitable prices. What I have quoted, I think, supplies a complete answer as to the wisdom of the step which the Government are taking. {: .speaker-K09} ##### Senator Payne: -- Is the staff of the mills fully employed now? {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- I have just explained that for Government requirements there is not sufficient work to keep the mills going, and pending a decision as to what should be done the Government decided to manufacture 100,000 yards of cloth to sell to the trade in order to keep the mills at work. If the mills are not disposed of in a very short time, it will be necessary to close them for nine months of the year, or alternatively, to adopt a policy of manufacturing to meet the requirements of ordinary private citizens. {: .speaker-KRZ} ##### Senator Lynch: -- Could not the Government lease the mills as I have suggested. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- That is another method of doing what the honorable senator condemns. It is a question of leasing as against selling. {: .speaker-KRZ} ##### Senator Lynch: -- Is a lease a sale? {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- A lease is a sale for a limited time. **Senator Lynch,** by a lease, would be assenting to doing for a limited period that which he says ought not tobe done by another method. We could not give a lease for a few months. It would have to be a reasonably long lease or no one would touch it. If the lease was for twenty-five or thirty years, **Senator Lynch** would say that it was right to do for that period what we ought not to do for thirty-five years. {: .speaker-KRZ} ##### Senator Lynch: -- The mills would not go out of the Government's hands, as they would in the case of an absolute sale. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- The Go vernment would still be free at any time, if they thought fit, to start a mill again. {: .speaker-KRZ} ##### Senator Lynch: -- On (the other fellow's terms. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -No. They could start an entirely new mill, or could resume the present mills if they thought fit. **Senator Lynch** some time ago asked me a question regarding Government action in this matter, and he quoted a well-known phrase. He said that "Not a single stone in the temple of Labour " would be disturbed under the new political order which arose, with his powerful support and sympathy, in a critical time during the war. The honorable gentleman seems to think that by assenting to this proposition the Prime Minister **(Mr. Hughes),** in some way or other, departed from the spirit of that utterance. I ask him to think again. There were many stones in the temple of Labour. This was not the only one. There was one particularly bright corner stone - the land tax - and the honorable senator now comes along and proposes to pull it out of the edifice by the motion which he has placed upon the business-paper. He says, " Here is a great stone which I helped to place well and truly in its position. I tapped it in the regulation way with the parliamentary mallet. I went round the country and told the people it would effect a reformation." It was one of the fundamental principles of the party, and it formed a brilliant embellishment of the temple of Labour. To-day he invites us to join him in levering it out of place. {: .speaker-KRZ} ##### Senator Lynch: -- I suggest that it should be left within the State domain. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- It was equally within the State domain when the honorable gentleman purloined it to make it part of the foundation of the temple of Labour. We cannot apply one code of ethics to the Prime Minister and another to **Senator Lynch.** If **Senator Lynch** is justified in seeking to remove from our statute-book the Land Tax Act, which was one of the stones in the temple of Labour, the Prime Minister is equally entitled, in view of the altered circumstances, to alter his attitude. The honorable senator knows that I listened to him with much pleasure in those days, when he claimed a great triumph. There was a bigfight between the contending parties in those days. {: .speaker-KL7} ##### Senator Garling: -- Those debates form very interesting reading now. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -They make wonderful reading when one compares them with the utterances of to-day. **Senator Lynch** must not take too critical a view of the attitude of the Prime Minister in this matter. I think that **Mr. Hughes'** attitude is perfectly justified and logical. {: .speaker-KRZ} ##### Senator Lynch: -- There is only one fact missing from the Minister's argument. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -I am not aware of anything that is missing from the argument, but it seems to me that it is not what is missing from my argument that is troubling **Senator Lynch,** but what is present in it. The awkward fact for him is the motion on the businesspaper asking us to throw over the land tax. I do not expect **Senator Lynch** to admit that he is wrong, but' I ask other honorable senators to form their opinions. The starting of the woollen mills by the Government was not a question of good or bad policy. The Government were not disposed, even if entitled to do so under the Constitution, to trade as ordinary traders. That was never contemplated. If, on the other hand, the Government had to supply only their own needs, there would have been only sufficient work in twelve months to keep the mills running for three months. That would have meant going slow for the whole twelve months,, which would have added to the overhead charges, or keeping the mills running for three months at full steam ahead and then dismissing the employees for nine months. Either of those alternatives was not attractive, and was certainly not sound business. In view of the fact that the Government's requirements would not provide sufficient work for the mills, it was deemed better that a private firm should come in and keep the workers continuously employed. "With regard to the alleged violation of the rights of Parliament, I have shown that Parliament itself gave the Government the option of supplying their requirements in one of any number of ways. The Government decided to supply their wants in a particular way, but circumstances have now so altered that they consider another method would be better. There has been, not only no violation of the letter of the rights of Parliament, but there has been no intention of violating the spirit of those rights. I ask honorable senators to do one thing with regard to the motion. Whatever their views may be on it, I ask them to record a decision to-day. We are inviting applications for the purchase of the mills, and a motion of this kind in suspense is not conducive to good business. Whatever the verdict may be, I ask the Senate to record it to-day, so that the cloud .of doubt and uncertainty may be removed. **Senator Lynch,** I am sure, is anxious for a decision, and I ask honorable senators to co-operate in obtaining that decision before we. rise to-day. {: #subdebate-6-0-s4 .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -- It is difficult, perhaps, to reply to such a spirited speech as that made by **Senator Lynch,** who is a patriot, an orator, a barrister, and an artist - such an artist, he paints such a vivid picture, that I think he would be very fitted to judge the next beauty competition. I have very mixed feelings regarding the contemplated sale of the Commonwealth Woollen Mills. **Senator Lynch** made the assertion that this Chamber did not know anything about the sale of the mills. I think he is wrong in that statement, for the simple reason that about three weeks ago I asked a series of questions of the Government on the subject, and received a number of answers. I wish to make my attitude clear, because I have been attacked by the Trades Hall Council, members of which have asserted that I ha.v>e changed my views. In .answer I explained that I waa committed only to the extent of having asked questions of the Government and received replies, the questions and replies being as follows: - > *Question.* - Whether the Government have decided to dispose of the Federal Woollen. Mills; if so, when, and how? > > *Answer.* - Yes. Public tenders for the purchase of . the mill, closing about the end of September, are about to be invited in Australia and Great Britain; > >Question. - If the Government have decided to sell the Federal Woollen Mills, what is the reason for such a step being taken? > > *Answer.* - Owing partly to heavy stocks and partly to reduced requirements in the future, Government work would only keep the mill employed a very small proportion of the year. As it is not proposed to manufacture for private sale, and the Government did not desire to either partly or wholly close the mill down, it was decided to offer it for sale. > > *Question.* - Will prospective purchasers be confined to Britishers? > > *Answer.* - Tenders will be open to all, but the Government will reserve the right not to accept any tender which might be considered undesirable. I can readily understand the opposition of the Labour party to the sale of the mills. It was a Labour Government that built them, and they have been a pronounced success in every way. Whilst charging comparatively low prices for splendid material, they have been able to show a substantial net profit, year after year, and employment has been under the best possible conditions. To my mind, there are many good arguments why the mills should not be sold, but I think I shall be able to produce a preponderance of evidence to show that the Government are right in their decision. The mills have tended to prevent - and I think this is a very important fact - Government Departments and returned soldiers from being exploited. For these reasons alone I would join with the Labour party in protesting against the sale of the mills; but, on the other hand, there are unfortunately the following unanswerable facta to take into consideration : - {: type="1" start="1"} 0. The manager and the Government Departments consider that orders available for some years ahead would only be sufficient to keep the mills running about three months in the year, and, therefore, a lot. of the employees would be thrown out of work. 1. Spirited competition for the mills is assured, and it. is beyond doubt that under private enterprise the scope of the mills will be considerably extended, and within a couple of years probably double the present staff will be employed, so that, from a Geelong point of view, and from a labour-employing point of view, it is desirable that the mills be sold. There is one danger, and I wish to warn the Government against it. It is the danger of a capitalistic concern outbidding every genuine prospective purchaser with the object of scrapping, or partly scrapping, the mills. I have1 been informed, on fairly reliable authority, that a combine of manufacturers, with the object of lessening competition and what they manufacture, has been formed to tender for the mills. They would probably throw the mills out of commission, after running them, on certain goods for a time. I urge the Government to be careful regarding the motives of the persons to whom' they sell, for otherwise the effect may be disastrous to employment and against the best interests of the people. Good as the mills are at present, a lot- of money requires to be expended upon new machinery, so as to enable pattern goods, blankets, rugs, and flannel to be turned out., well equiped as ' these mills are, and magnificent as they are for the purpose for which the .Government built them, they are not perfect by any means as a trading concern to sell to the general public. Nevertheless, I have such faith in the soundness of manufacturing our own requirements in woollen goods within Australia, that I wish the Government and public to know that, if the mills are to be sold, I hope to be able to get into the company or syndicate that purchases them, unless, of course," the price is too high. It will be said by some that **Senator Guthrie** is in favour of the Government disposing of the mills of which he has often spoken so highly, because ho is anxious to join :a syndicate which intends tendering for them. I wish to make my position quite clear in this matter by saying that I intend to join a syndicate which will submit an offer for the mills, and I want every one to know it. I have, however, stipulated to such syndicate that I shall not be a member of it if it is to compete against returned soldiers who may desire to sub-' mit an offer. A resolution wa3 carried at a conference of the ' Returned Sailors and Soldiers' Imperial League of Australia in Sydney to the effect that they would be tendering, and if they do submit an offer I think they should be given preference. If they decide not to do so, the second preference should be given to a co-operative organization of woolgrowers which I understand is in favour of forming a co-operative company and submitting an offer. Failing that, preference should be given to 'an Australian firm before any offer from a foreign country is considered. These mills were constructed by Australian workmen with Australian capital, and have been conducted in a most efficient manner by Australian operatives. I have been informed on good authority that a tender is likely to be submitted from America. Whether such is the case I do not know, but in any case we should not sell to foreigners. {: .speaker-KRZ} ##### Senator Lynch: -- From the information the honorable gentleman has already given, it will be seen that the undertaking is one that we should not dispose of. Competition apparently will be very brisk. {: .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -- That may be so, but I shall show shortly why it may be advantageous for the Government to dispose of the mills. I am guided solely by the information disclosed in the public balance-sheets, and do not possess, as some outsiders may 'think, any inside information such as would give me any advantage over other prospective purchasers. The mills were opened in 1915, and have proved a wonderful success. They were of great service to the Commonwealth during the war in supplying military and naval uniforms, and it is well known that no army in the field was as well equipped as the Australian Army. The mills have Tendered wonderful service during the war and since, both in manufacturing uniforms and civilian suits for returned soldiers at a price much below what privately-owned mills would have charged. Not only werethey the means of supplying material at a much reduced cost, but they also Lad a very steadying effect on profiteers, because they turned out highly satisfactory material at 5s. 6d., 6s. 6d., and 7s. 6d. per yard, when other manufacturers were charging double that price. The Federal Woollen Mills produced tweeds, samples pf which I submitted, to the Senate, and made available 700,000 yards. to returned soldiers at an average price of 6s. 6d. per yard. {: .speaker-JYG} ##### Senator Elliott: -- Would the same profit have been shown if they had had to pay taxation ? {: .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -- I shall deal with that point presently, because in giving my reasons for eventually supporting the Government in the action they propose taking, I intend quoting both sides. At the time the mills were producing the 700,000 yards at 6s. 6d. per yard, they were competing with other manufacturers who were receiving supplies of the raw material under exactly similar conditions. During' the war, owing" to special arrangements made by **Mr. Hughes** with the object of encouraging local production, Australian manufacturers had an advantage' over outside manufacturers, as they received the first choice of the wool at less than the average of 15£d. per lb. greasy wool ex seaboard warehouses, which was charged to the British Government. Notwithstanding that Australian competitors were purchasing on the same basis, private manufacturers were charging from 10s. 6d. to 12s. 6d. per yard for similar material to that being supplied by the Federal mills at 6s. 6d. In addition to the great benefits derived by the Government and the returned soldiers referred to, the distribution of the material has been a great boon to the Returned Sailors and Soldiers League, and has, to some extent, resulted in strengthening that organization. For instance, the tweeds, &c, were distributed through the agency of the league, who charged ls. per yard for the work, and I have been informed that the Sydney branch alone netted £10,000 in this perfectly *bond fide* manner. The mills, therefore, have been a great benefit to returned soldiers, and the profits made on the materials handled by the League have been largely responsible for placing it in a fairly solid financial position. At the same time I would like to ask the Minister whether lie League has taken full advantage of the Government's offer; did it lift the quantity of material originally ordered? The position has now entirely changed, and we must remember that whilst the mills have been of great benefit to the soldiers up to the present, they may in future, if controlled by the Government, come into active competition with the Returned Soldiers' Co-operative Wool and Worsted Mill which has been established at Geelong. {: .speaker-KRZ} ##### Senator Lynch: -- Even if they are under private control the same competition is likely to occur.. {: .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -- Not necessarily. I have adduced many arguments against the disposal of the property, and it may reasonably be asked why the Government are anxious *<bo* dispose of a trading concern which is showing a good profit. No doubt the Government have considered the situation from all aspects, and have not forgotten the absolute failure of State enterprises elsewhere, as, for instance, -the terrific losses incurred in connexion with the Queensland State cattle stations and meat shops, and also in connexion with the Western Australian steamers and meat depots - despite the fact that relatively inferior meat was being sold at a higher price than in private establishments - and the New South Wales Government trawlers. Most State trading concerns have been an incubus on taxpayers, and have hot been the means of decreasing the cost of living as was desired in the slightest degree. Attention might also be directed to the excessive freights being charged on wool and other produce shipped from Australia to Europe. At present we are paying 1 1/4d. per lb. on greasy wool from even Fremantle to Great Britain, whereas £d. is being charged from New Zealand, although the distance is 2,000 miles less, and the vessels picking up cargo in New Zealand have to call at at least three or four ports, whereas a steamer can secure a full load of wool at any of the big Australian ports. {: .speaker-K9P} ##### Senator Vardon: -- Are those the rates on vessels of the Commonwealth Line of Steamers ? {: .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -- Yes, and it shows that they have not been the means of reducing the freights on Australian produce as was expected. The net profits made by the Federal Woollen Mills during recent years have been : - In 1917, £22,414; 1918, £15.654; 1919, £22,689; 1920, £26,000; and in 1921, £55,934. I am surprised that **Senator Lynch** did not quote the last-mentioned amount. {: .speaker-KRZ} ##### Senator Lynch: -- I think my case was strong enough without that. {: .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -- The mills made those profits ' notwithstanding the fact that they were disposing of their product at a much lower price than other manufacturers of similar material. The advantage of continuing, however, has been altered entirely by the demand for economy, and in consequence of the decisions arrived at at the Washington Conference. The profits which have been made in recent years have been high, because the mills have been receiving Government orders year after year, and there has been continuity of employment, but it would be impossible to show such a satisfactory return if the plant was to be in operation for only three months of the year, as the Minister suggested. Honorable senators who criticise the Government for proposing to dispose of the plant must remember that conditions have altered very materially, and it is now the declared policy of the State Governments not to place orders for railway or police uniforms with the Federal Government. Purchases in the future are to. be made from manufacturers in the different States where they are required. The State Governments will no doubt regret having come to such a decision, because they have been receiving splendid material at a very low price from the Federal mills. It is true that the profits have not been liable to Federal income tax, and local rates which would have been paid by a private company have not been collected. If the mills had been controlled by a private concern, quite one-half of the profit made last year would have been absorbed in taxation, and if they are disposed of the Government, as well as deriving advantage from a good sale, will also secure an annual revenue by imposing taxation on the profits to be made by the purchaser. When the mills were first established, I think the Geelong Water Supply Commissioners supplied water free of charge, and the Geelong Harbor Trust very wisely granted the land on which to build these mills free of cost. Water is now costing 6d. instead of ls. per 1,000 gallons, as is charged to other consumers. The purchasers of the mills will therefore have to pay at least £500 per annum more for water than is being paid at present, even if the mills are not extended, and this one item alone is important. *Sitting suspended from 1 to 2. SO p.m.* {: .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -- The Government having selected for sale the most profitable concern that has been in operation, I am hoping it is their intention also to scrap or sell all other trading ventures, They made a very good profit on the operations of the Commonwealth Woollen Mills, and, in my opinion, they will make a very good profit on their sale, because, undoubtedly, there is going to be very strong competition for them, and the stocks will have to be taken at valuation. In addition to the profit % which the Government will make upon the sale of the mills, it must be remembered that under private ownership they will in future* collect 8s. 6d. in the £1 income tax from the nott profits of the undertaking, which averages about £26,000 a year. I make no secret of the fact that I am one of a syndicate that intends to tender at a price for this property, because I have unbounded faith in the wool industry. The possibilities are immense. Australia occupies a position that is quite unique. We produce more wool than any other country in the world - about 2,000,000 bales per annum. The wool produced in China and some other countries, although it is called wool, is really only hair. In Australia we produce 25 per cent, of the good wool, and 50 per cent, of the total of the world's supply of merino wool ; but, unfortunately, we are only manufacturing from 3 per cent, to 4 per cent, of our production. It is a serious anomaly that, in view of our heavy production of the raw material, we should be importing such large quantities of woollen goods. It is an economic farce - almost a tragedy, and it should be a cause for national humiliation; - that, whilst we produce so much of the beat wools in the world, we should be importing nearly 75 per cent, of our own requirements in woollen goods. I hope to see this anomaly rectified in the near future, and so far as I am concerned what little capital I have available, unfortunately not much, will be put into two or three woollen mills in country districts that are asking for money in order1 tol assist in the development of this industry, which has great possibilities, and must be encouraged. Just let us examine some statistics. In 1920-21 we imported flannel of the value of £15,207, piece-goods £5,975,696, socks and stockings £766,549, and wool yarns £1,500,000, or a total of £8,257,452. Including mixtures of wool and cotton, the value of our total imports in that year reached about £10,000,000. One of the mistakes made when the Tariff schedule was under consideration waa in deferring the duty upon woollen yarns until 1st January next, because British manufacturers have been pouring in supplies of this material and flooding the local market. During January of this year, Great Britain exported to Australia 2,575,000 square yards of woollen and worsted goods. The total value of apparel and textiles imported by Australia last year was £49,878,000, or one-third of the total imports. It is absurd to say we cannot make good material in Australia. Our mills are as good as any I have seen in any part of the world, and I have visited hundreds of such establishments, and our workmen are equal to those to be found anywhere. {: #subdebate-6-0-s5 .speaker-K09} ##### Senator PAYNE: -But, our manufacturers are not turning out some of the classes of goods mentioned by the honorable senator. {: .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -- I know that; but surely the case I have, put is strong enough. I maintain that not only should we be manufacturing for the whole of our own requirements, but that we should also be manufacturing for export. All through the East there is a strong and growing demand for our goods. There are also firm inquiries from America for huge quantities of Australian blankets, which are acknowledged to be the best in the world. To show how the woollen industry is expanding, I may state that during the last six months Bradford alone exported 10,433,000 yards of woollens and worsteds. The whole of the world is crying out for this class of goods. Medical men and scientists declare that wool is the most healthy of all articles for personal wear, so we in Australia should make every effort to cater for this ever growing demand. This development of the woollen industry is also well illustrated by the export figures for textile machinery. Great Britain, in 1913, exported £8,000,000 worth of this class of machinery, and in 1921 no less than £21,000,000 worth. Australia imported textile machinery to the value of £64,000 in 1913, and £284,000 in 1921. Fortunately, we are now manufacturing a good deal of this machinery in Australia., and very successfully, too, particularly scouring bowls and drying machines. In fact, we are building up an export trade in the Australian patent drying and scouring machinery. Japan last year took from Great Britain textile machinery to the value of £3,086,000, and China; £2,700,000 worth, but in those countries the machinery is largely used for cotton and silk as well as wool. The trade all round is expanding very rapidly, and as I have shown, there is very good demand in the East and America for our woollen goods. I have no time for pessimists, particularly those manufacturers who hitherto have had a monopoly in this field of enterprise, many of whom, I repeat, have of late charged the people of Australia exorbitant prices for their goods. The pessimists declare that we are going to overdo the business. They have been saying that for the last twenty years.. So far from this being true, we could treble the number of our woollen mills and still be unable to cope with the internal demand, because at present we are producing only from 20 to 25 per cent, of our requirements. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- Is it as high as 20 per cent. *1* {: .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -- Yes; I obtained the latest figures from the Bureau of Science and Industry yesterday. The public, I think, require to be educated somewhat as to the excellence of our woollen goods. Once we break down the stupid old prejudice there will be practically no limit to the expansion of our wool manufacturing industry. {: .speaker-K09} ##### Senator PAYNE: -- I think the millers also require to be educated as to the class of goods most suitable for Australian requirements. - {: .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -They are doing very well, and are improving every day. They are importing the very best class of machinery available. {: .speaker-K09} ##### Senator Payne: -- But I am. referring to the manufacture of light textile fabrics. {: .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -- That is a special line such as ladies' dress goods. We are not engaging in that class of manufacture yet, but we are expanding the business and doing very well indeed. At the Federal mills we are producing tweeds equal to any I have seen in the world, and our Australian blankets, I repeat, are the best obtainable. We can make very good flannels and rugs, and our fingering yarns are equal to the very best from the south of Scotland or Halifax. Our knitted goods, underclothing, stockings, and socks are also remarkably good. Those honorable senators who recently paid a visit to the Lincoln Knitting Mills' at Coburg were privileged to see fingering yam, socks, stockings, and underclothes as good as anything obtainable anywhere in any country. It is a matter for congratulation that we are progressing so satisfactorily in this industry. In 1911 Australia manufactured 2,000,000 yards of cloth and 5,299,000 yards of flannel. In 1920 the figures were 5,388,000 yards of cloth, and 4,740,000 yards of flannel. At present there is a great scarcity of blankets, flannels, and rugs. I should like to pay a tribute to the Government Bureau of Commerce and Industry for the useful propaganda work it has undertaken, and I commend **Dr. Stirling** Taylor for his enthusiasm in going about the country to induce people to invest their capital in the building of woollen mills. In Victoria alone, in 1918-19, we had 57 knitting mills, employing 1,424 people, and last year there were 142 mills, employing 2,851 people. As regards woollen mills, in 1918-19 there were 11 in Victoria, employing 1,256 people, and last year our 19 mills employed 2,090 people and several new mills are being built. Education in the textile industry is of supreme importance. I am glad to know that the town of Geelong, which justly claims to be the Bradford of Australia, has equipped the Gordon Institute of Technology with a very good laboratory and plant to carry on this useful work. It is, of course,, not so extensive as the institutes in Leeds, or Halifax, or Boston, but it will prove exceedingly valuable in extending expert education in this highly technical line of business. We know that the net profits being earned by the woollen mills in Australia are very great indeed, and the industry assists towards decentralization, which is so very desirable. As an example, I might cite the Warrnambool Woollen Mill which began in a small way in 1909. The water supply was found to be unsuitable both for scouring and dyeing the wool, but that difficulty has since been overcome by a system of filtration and by means of chemical appliances. That mill has shown large profits, and the shares are now worth 100 per cent, above par. The mill has been employing 250 hands, but in the last six months it has doubled its plant, and will very soon be .employing 400 persons and paying £1,000 per week in wages. As the young people of the town grow up, they will not need to drift to the city to find employment; and this is of great importance in assisting decentralization. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- I am unable to tell whether this is an argument for or against the motion. {: .speaker-KN7} ##### Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931 -- Perhaps so; but I have tried to sum up the position fairly and squarely. There are- many good arguments against the sale, but the preponderance of evidence supports the Government's intention to sell. If the mills were run as a private concern they would be extended, and give regular employment to more people at good wages It is because of the lack of employment likely to be experienced at the mills, and because they have outgrown their usefulness as a Government enterprise, owing to disarmament and lack of orders from State Departments, that I would like to see the mills conducted as a private concern. I support the decision of the Government to sell by public tender; but I ask that they be not sold to foreigners or some capitalistic concern that might scrap them. I urge that a condition of the sale be that the mills must not be scrapped or be used for other than for fair trading purposes. {: #subdebate-6-0-s6 .speaker-K0F} ##### Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT -- The Minister for Repatriation **(Senator E. D. Millen)** desires a vote to be taken on the motion to-day, but, as I was the Minister responsible for the inauguration of the mill at Geelong and had charge of it for the greater part of its career, I may be permitted to say a few words regarding the intention of the Government who first brought it into operation. When the mill was decided upon, the woollen industry was very much smaller than it is to-day, and it waa difficult to get adequate competition for Government contracts. When we did obtain competition Defence Department contracts were not regarded as urgent, and the private mills would only make Defence material when times were slack. When uniforms were urgently required, they could not be obtained. There was also trouble about the quality of the material supplied, and, altogether, the contract system was proving very unsatisfactory. The scheme of compulsory military training had just been brought in, and there was every reason for supposing that the number of men to be brained would be maintained for many years. The mill waa equipped wholly with a view to providing the material needed for uniforms. It was pointed out that there would be both naval and military uniforms to be made, and the mill could also turn out uniforms needed for the police, railway, and post-office officials in the various States. The first manager, **Mr. Smail,** was selected by myself while I was in England in 1911, and, in the interview I had with him there, I told him that the mill was intended for the manufacture of the uniforms to which I have referred. At his request, he was given three months in England to obtain the necessary machinery, and the result was that he secured the most up-to-date plant of its class in the world. In the year in which the mill was to be brought into operation we had to provide cloth for 140,000 citizen soldiers and 80,000 cadets, apart from naval, post-office, and police uniforms. The outlook then was entirely different from the prospect today. Owing to the Washington Conference and the Treaties made there, our defence policy has been recast, and we now have to provide for only 30,000 citizen soldiers and 40,000 cadets. The (Naval Force has been reduced, and the State Governments have been .withdrawing their orders for police and railway uniforms, orders for which are being placed with the mills established in the States. One could not find another mill equipped in the same way as that at Geelong. *Not* a single item of its equipment was installed with the idea of going in for private trading. The mill was equipped entirely to provide for the class of goods to which I have referred. It was only to meet the requirements of the returned soldiers that we allowed the mill to manufacture tweed, and even to do that additional equipment had to be introduced. The decision to sell the mill is not necessarily any departure from the policy de cided upon at the outset. Had we been faced at the beginning with the position existing now, it is very doubtful if the Government would have launched the mill. The Commonwealth has been exceedingly fortunate in the selection of the two men who have acted as managers. In **Mr. Smail** we had one of the best men in the business in Australia. It is a commentary on the meagre salaries that Parliament is prepared to vote for the management of Government enterprises that a private firm offered **Mr. Smail** a considerable increase on his salary, and, consequently, his services were lost to the Commonwealth. We were again fortunate in securing the services of the present capable manager, and to those two men is due the credit for the success of the mill. 'Never, at any time, was political influence allowed to interfere with them. They were given clearly to understand that they were to have a free hand. The sale of the mill is in no way a negation of the policy adopted at the commencement ; but it is the logical result of circumstances, the demand for the output of the mill having slackened to such an extent as to make the continuation of the establishment as a Government concern unwarranted unless the mill is to have a reduced output or a policy of supplying private requirements is adopted. {: #subdebate-6-0-s7 .speaker-JXP} ##### Senator DRAKE-BROCKMAN:
Western Australia -- Knowing that the Minister **(Senator E. D. Millen)** desires to have a vote taken on the motion to-day, I have given an undertaking not to exceed ten minutes with my remarks, and I somewhat regret having done so, because I desired to deal with some phases of the question at considerable length. **Senator Lynch** is to be commended for having taken action to conserve the rights and privileges of this Chamber. To a certain extent, he was actuated by his desire to preserve the mill at Geelong for the Commonwealth rather than to devote himself entirely to the question of the preservation- of. the privileges of this Chamber. However, he has always been very jealous of the rights and privileges of the Senate, and in that respect I am entirely with him. Any attempt made to encroach on those privileges should be at once vigorously resisted by every member. When I first saw this motion on the notice-paper, I thought I would have to support **Senator Lynch,** because it appeared to me that the Government were contemplating something that was an infringement of our rights and privileges; but on further examination I have come to the conclusion that the Government are not doing any such thing. In my opinion, they are acting within the Constitution. If the Government were going to continue the mill for the production of various woollen articles in competition with similar privately-owned institutions in Australia, they would probably be infringing the Constitution; but the Government are quite entitled to manufacture anything they need for their own purposes. Au soon -as they begin to produce articles for the purpose of competing in the markets of Australia they infringe the Constitution, although, should they produce a surplus over and above their own requirements - and this must be more or less an accidental, rather than a deliberate, over-production - they are at liberty to sell the surplus on the market in the ordinary way. It is possible that Governments in the future may evade the Constitution in this respect by taking advantage of the right to sell surplus stocks produced in excess of their requirements; but if they do so that .will be an evasion of the spirit of the Constitution. The framers of the Constitution never contemplated that the Government of Australia would do other than attend to the proper functions of government; it was not anticipated that they would indulge in general trade and commerce. {: .speaker-K1W} ##### Senator Benny: -- What about the Commonwealth Government Line of Steamers? Does the honorable senator hold the establishment and running of that Line to be a constitutional exercise pf the powers of the Government? {: .speaker-JXP} ##### Senator DRAKE-BROCKMAN: -- My time, under my self-imposed limitation, in consultation with the Leader of the Senate, does not allow me to discuss that question fully, but I hope to have an opportunity of dealing with it on another occasion. In regard to this particular matter, I have explained the views I hold with respect to the constitutional position. My original difficulty in connexion with **Senator Lynch** 's motion was overcome by a consideration of this particular aspect of the Constitution, and by knowledge of the fact that there is contained in the Defence Act, and I now discover in the Audit Act also, authority given by this Parliament to the Government to take the action they propose in this case, or similar action, whenever they so desire. The general provision is that a legislative enactment cannot be interfered with by administrative action. If this mill were brought into operation by the passing of an Act of this Parliament, and the Government were attempting to undo that work of Parliament by an administrative act, I should resist them; but the Government have, by this Parliament, been given the necessary authority to do what they propose to do, and they are within their rights in doing it without specifically consulting Parliament on the matter. There is just one other matter on which I desire to touch. **Senator Bakhap,** in addressing himself to the motion, stated in effect that any Government having* a majority in another place can do practically anything they desire, whether within the Constitution or not, provided they receive the support and subsequent approval of honorable members in another place - that in that event they would be in the position of the Crown, and could do no wrong. I join issue with the honorable senator on that contention. He went further, and said that nothing this Chamber can do can possibly control any Government. Again I join issue with the honorable senator. I think he also said that nothing which this Chamber can do can effect any change of Government, or can cause any Government to find it' necessary to resign from the Treasury bench. Again I join issue with the honorable senator. A similar view was held in France. It was thought that a majority in the Lower House could defy the Upper Chamber there, but the Upper Chamber of the French Legislature found a very simple and effective method of dealing with the matter. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- Whilst agreeing with the honorable senator's contention, I may remind him that there is a difference between the French Constitution and ours. {: #subdebate-6-0-s8 .speaker-JXP} ##### Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA · NAT -- BROCKMAN. - That is quite true, but the method adopted by the Upper House in France is one which can be applied under our Constitution. That method is the very simple one of refusing *to* pass Supply. If -we found that a majority in another place in any way encroached upon our province, or interfered with the special rights which we are here to protect - in other words, the rights of the States we represent - it would be not only our right, but our duty, to take such action as would prevent any Government doing any such thing, whether they were supported bv a majority in another place or not. I thought it as well to say so much because I did not desire that **Senator Bakhap's** contention should stand without some reply. Whilst I do not contemplate that what has been suggested is likely to occur under the present Government, I personally would not hesitate, should anything of the kind be proposed, to take action in this Chamber to prevent the present or any other Government infringing the rights of the State I represent. With regard to the question of the retention or disposal of tile Commonwealth Woollen Mill, apart from the constitutional aspect of the matter, I have no hesitation in saying that the Government are perfectly right in proposing , to dispose of it. The function of Governments is to govern, and not to trade, and I hope that this represents a beginning by the present Federal Government of a policy which has for its objective the return of the Government to the true functions of government, and their abandonment of the incursions into trade and commerce which have been indulged in in the immediate past. {: .speaker-KRZ} ##### Senator Lynch: -- The honorable senator will recollect that I drew a sharp distinction between the retention of the Commonwealth Woollen Mill and entering into general trading. {: .speaker-JXP} ##### Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA · NAT -- BROCKMAN. - I am aware that the honorable senator did so, but I am personally of opinion that all trading by Governments is objectionable. I should like to see the Federal Government, and every other Government in Australia, entirely abandon the unfortunate attempts which they made from time to time to interfere in matters which should properly be left to private enterprise. In accordance with my undertaking as to the time I should occupy on this motion, I shall content myself with what I have already said. {: #subdebate-6-0-s9 .speaker-K0S} ##### Senator PLAIN:
Victoria -- I shall not take long in making, the few remarks I have to make on this motion, in view of the fact that other honorable senators desire to speak upon it, and it is hoped that the motion will be dealt with this afternoon. I do not think that the constitutional argument used by **Senator Lynch** need be seriously considered, and it is my intention to vote against this motion. I am, however, very much con> cerne about the way in which the sale of the Commonwealth Woollen Mill will affect Geelong and its citizens. Having represented Geelong for many years in the Victorian Parliament, I know intimately the conditions of that locality. I am in a position to say that there are in Geelong some of the finest mills in the Southern Hemisphere, and as good as are to be found in other parts of the world. I say, unhesitatingly, 1 that the Commonwealth Woollen Mill is one of the leading mills in Victoria, if not in the Commonwealth. With others who have spoken, I wish to add my testimony that the management of the mill has been of the finest. The employees are absolutely efficient in every respect, and I am able to say that they have appreciated the excellence of the management. There have been no strikes and no grievances. That speaks very highly for **Mr. Smail** the original manager, and also for the gentleman who is at present in charge of the mill. Were I to take my instructions from the Trades Hall of Geelong I should vote for the motion, regardless of the effect upon the employees. That I am not prepared to do. When I consider that by the sale of the mill it is possible that employment may be given to 250 or 260 people, whereas under the existing system of Government control the prospect is that not more than one-half of that number can be employed, I should be false to my trust as a member of the Senate if I did not vote against the motion. I have every reason to believe that if the mill passes to private management it will employ at least twice the number of hands at present employed. I cannot say that I agree with the remarks which have fallen from **Senator Guthrie.** He has said that it is likely that a foreign syndicate will offer to buy the mill in order to scrap it or close it, so as to prevent competition. I cannot imagine any syndicate putting up a capital of £250,000 to purchase the mill with any such end in view. The honorable senator further informed the Senate that it is likely that some wool company, of which he hopes to he a member, will purchase the mill and will put it to the best use. fie has advised the Government that they must be very guarded with respect to the persons who are likely to tender for the purchase of the mill. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- Does the honorable senator not think 'that **Senator Guthrie's** warning may have had some reference to his own syndicate? {: .speaker-K0S} ##### Senator PLAIN: -- The honorable senator said that it would be a great pity if American capital was introduced to purchase the mill. At the same time he told us that we are at present manufacturing not more than one-fifth of our wool production. That being so, there is no reason to fear competition, and it appears to me that it is our duty to encourage the introduction of capital from America or anywhere else to increase the manufacture of the wool produced in, Australia. **Senator Guthrie** wished to impress on honorable senators that he was sure to be one of a syndicate likely to purchase the mill, and I am afraid that his remarks may create a wrong impression in the minds, not only of honorable senators, but of people outside. He warned the Government" against the introduction of foreign capital for the purchase of the mill. He suggested that a foreign syndicate might purchase 'it in< order to close its doors and prevent competition, and the impression he conveyed to me, and which his words will probably convey to the public generally, was that he desired, in effect, to armthe Government with a sand -bag to handle possible competitors for the purchase of the mill to the advantage of the syndicate to which he hopes to belong himself. I know that was not the impression which he wished to convey. That was the way his remarks impressed me, however, and it is the way they will probably impress the people of Geelong, although I know that it was the last thought that was in his mind. 'I think that, if he were here at this moment, he would see -the force of my argument, although he never for a moment dreamt of conveying that impression. I shall vote against the motion. I have no right to cast a vote in this House which may have the effect, in the immediate future, of throwing hundreds of employees out of work, and I feel justified in saying that, in less than two years from now, the action of the Government, and, I believe, of a majority of members of this Chamber, will be approved by the people of Geelong, and the woollen employees in particular. {: #subdebate-6-0-s10 .speaker-K09} ##### Senator PAYNE:
Tasmania .- It is not often that we are called upon to discuss a prosperous Government trading concern. To-day, I have been very much impressed by the novelty of it, and especially by the point of view of those honorable senators who are very anxious that the proposed action of the Government should be ratified unanimously by this Chamber. The motion submitted by **Senator Lynch** is worded in such a way that it becomes rather difficult for one to support it. I realize that the Executive of the Commonwealth, like the Executive of a State, has powers vested in it to dispose of Government concerns the creation of which had to receive the approval of both Houses of Parliament. I cannot see that there is anything unconstitutional in the action of the Government in submitting this property to public tender. It was only last year that we were given to understand by the Minister who had charge of that particular portion of the schedule of the Appropriation Bill that great expectations were held for the future development of the trade of the Commonwealth Woollen Mills. When the annual statement of the operation- of the mills was handed to honorable senators, every senator, I think, was pleased to find that the operations for the year had resulted in such a handsome profit being made. One or two honorable senators have been heard to-day endeavouring to discount the fact that the mills have been working at a profit. **Senator Guthrie** 'pointed out that the Government had special concessions from the Geelong local authorities in regard to water supply, whilst **Senator Elliott** interjected that the profit could not have been earned if the mills had been subject to the same taxation as is> levied upon proprietary mills. In dealing with, that phase of the question, I want to put before honorable senators the proof that was adduced here last year regarding the extraordinarily low price of the commodities turned out by the Commonwealth mills as compared with the prices charged by the proprietary mills; and I would point out, in refutation of the statement that the profit should be depreciated because no taxation was paid, that, if 3d. per yard had been added to the price of the total output of the mills last year, the increased revenue therefrom would have been sufficient to meet all the taxation of the year. The mills turned out tweed at 6s. 6d. per yard, and an additional 3d. per yard would have made the price 6s. 9d. per yard. Similar cloth elsewhere cost 8s. 6d. to 9s. a yard. If the management of the mills had increased the price of textile fabrics by 3d. a. yard, the resulting revenue would have dispensed with the possibility of such arguments as have been advanced this afternoon. Tenders have been invited for the purchase of the mills, and it appears to me that the Government have not adopted the most business-like method, or seized on the most businesslike time, for the disposal of this particular asset. The Minister for Home and . Territories **(Senator Pearce)** has pointed out that the trade of the mills has to a very large extent disappeared. Does it not appear to him and to the Government that, if the mills had been carried on this year as a going concern, operating every loom and with every member of the staff fully employed, there would have been more probability of getting a price equivalent to their true value? When anything is put on the market, and is handicapped by the fact that two-thirds of its trade has disappeared, it cannot be expected to command such a good price as if it had been earning its full rate of profit. The Government should have kept the mills going for another year or two, not only for that reason, but also for another. **Senator Guthrie** admitted, although he said he was personally interested in woollen mills in Australia, that the Commonwealth mills were turning out splendid goods at a low price, and were showing a reasonable profit on their output. He said that this should be a warning to other proprietary mills that they might have been indulging in profiteering. It is now proposed to remove that warning altogether. {: .speaker-K0S} ##### Senator Plain: -- There are cooperative soldiers' mills in Geelong. {: .speaker-K09} ##### Senator PAYNE: -- I understand that those mills are producing a different class of article. When the subject was before us last year, more than one honorable senator pointed to the possibility of the mills enlarging their scope of operations, so that those who found the wherewithal to run them during the last seven or eight years - namely, the people of Australia - - would reap some benefit. Every one knows that the retail price charged for woollen materials manufactured in Australia during the last few years has been " over the fence." I will never weary of drawing the attention of . the public of Australia to the fact that one particular article, in connexion with which it is recognised . all over the world that Australia can produce better value than is produced anywhere else, is being sold today at a price which is beyond all reason when compared with the value of the article. I am referring to the ordinary, every-day, natural-grey flannel, which is worn by a majority of the people of Australia, especially in the winter months. We have flannel mills in Hobart and Launceston, and additional mills, I understand, are being erected in Victoria. {: .speaker-JYG} ##### Senator Elliott: -- Will not that extra competition bring down prices? {: .speaker-K09} ##### Senator PAYNE: -- There is no competition. The more mills there are, the less competition there is. As competition has increased, prices have gone up, instead of coming down. This particular article is costing the purchaser to-day from 3s. 3d. to 3s. 6d. per yard, whereas in pre-war days it cost about ls.' 6d. a yard. Can any one justify .that increase in view of the price of wool to-day? I claim that these mills should have been a warning to proprietary concerns in Australia. I am a shareholder in more than one proprietary concern, and I have been connected with businesses all my life. I am willing to give the trading community every reasonable opportunity, provided trading is fair; but when there is an organized effort to get from the public prices which are far above what is essential to provide a reasonable rate of profit, I think it is my duty, as a public man, to enter a protest. That is why I drew special attention last year to this particular matter. In my opinion, the Government are not following the best policy in disposing of the mills. The Government will be thrown back upon the proprietary .mills for supplies of tweeds and cloths for the uniforms of members of the Public Service, and we have had the admission of **Senator Pearce** this afternoon that the mills were brought into existence, in the first instance, because the Government could not rely upon getting material when it was required, and that, later, the material was not up to the mark. It is essential that the goods which aTe necessary for carrying on the public utilities of Australia should be of the best value, and should be available when required. I think the Government would be justified in retaining the mills and in disposing of any surplus products that might arise from year to year to the general public under certain conditions. Personally, I do not think that the continued operation of the mills would have any prejudicial effects upon proprietary concerns in Australia. It has had none so far. Notwithstanding the fact that the mills have been turning out such a large quantity of material, the demand in Australia has been sufficient to encourage the installation of many other mills since this one was first established. While I strongly deprecate the disposal of the mills, I cannot vote for the motion, because I believe, with other honorable senators, that the Government are vested with sufficient power to take any action they think fit as an Executive in connexion with this matter, and that by so doing they will not infringe any of the constitutional rights which the Senate may possess. {: #subdebate-6-0-s11 .speaker-KL7} ##### Senator GARLING:
New South Wales -- I approach this question with a good deal of sympathy for the mover, and had it been framed in another form, perhaps I might have been able to support it. In supporting it in its present form I should have to assent to two or three things; one of which is "that the action of the Government in deciding to dispose of the Commonwealth Woollen Mills without the consent of Parliament is not in accord with prudent public . policy." Ali majority of the people of the Commonwealth do con sider that it would be against public policy to carry on any longer than we can help semi-trading concerns, and I agree with them; so I am prevented by that portion, of the motion from giving the honorable senator my support. According to the manner in which the motion is worded, the action of the Government is " a violation of the responsibilities and rights of the .Parliament under the Constitution, and a usurpation of its power. . ." Is it really a question of the usurpation of the power and rights of Parliament and a violation of its responsibilities ? If looked at from the point of public convenience or of public policy, it is a grave error on the part of the Government to handle a concern of this immensity in the way they propose to do, that is, without reference to Parliament. I was under the impression, when I first approached this question, that the Government took action in connexion with the foundation of this undertaking under the authority of an Act of Parliament, and I assumed that, having been vested with that power, they would have come back to Parliament, which had given them the power, before they disposed of it. Having regard to the general constitutional law, that is the proper attitude from which to view this question. In perusing the Act, however, I find that the chief executive officer under the Defence Act is the Governor-General, which really means the Executive Council, and the Executive Council is the Government. I very much regret that such is! the position, because I think that, as a matter of policy, it is a great mistake for any Government to move in this way. But the Executive being empowered to maintain and carry on the undertaking, this necessarily includes the power of winding up. I regret that I am unable to support **Senator Lynch,** and I am not prepared to go to the extent of simply moving an amendment which might be merely of academic interest, and which would not carry the matter any further. I will say, however, that I deprecate the action of the Government, after having sought parliamentary authority for the establishment of the mills, in not having brought the question of the disposal of the undertaking before Parliament for its approval. Although constitutionally within their rights, I do not think their action is altogether wise. I cannot agree with **.Senator Plain** that **Senator Guthrie** created the impression that he was endeavouring to "sand-bag" the Government- {: .speaker-K0S} ##### Senator Plain: -- Not the Government. His utterances conveyed the impression that he was endeavouring to " sand-bag " competition. {: .speaker-KL7} ##### Senator GARLING: -- That was not the impression I formed. The honorable senator is not present at the moment, and cannot, therefore, explain exactly what he intended; but I do not think his remarks could reasonably be construed in the manner suggested by **Senator Plain.** I regret that I cannot support 'the motion, because I believe the Government are acting strictly within their (constitutional rights in doing what they .propose. {: #subdebate-6-0-s12 .speaker-KS9} ##### Senator MacDONALD:
Queensland -- I have no desire to record a silent vote on this motion because, with many others in the community, I believe that the Government should <engage in public enterprises in the interests of the community generally. In this instance it has been shown that the Commonwealth Woollen Mills have operated in the public interest, although the Government Control we have had during recent years is not what would have been expected if the administration had been in other hands. I was somewhat surprised at **Senator Guthrie** using such terms as " profiteering prices " and " capitalistic concerns." What he said could have been headed, " The Success of State Enterprise," and in view of the successful manner in which this undertaking has been operating, I would like to ask the honorable senator if he can advance any valid reason why the mills should be sold. In the course of his remarks he covered a very wide range, and expressed his opposition to .State enterprises. He referred to the losses incurred on the Queensland State stations, .and said that State enterprises were doomed to failure. On a former occasion I took exception to **Senator Fairbairn's** utterances concerning the Queensland State stations, and I asked him if it was not a fact that similar losses had been incurred by private station-owners during the same period. Although **Senator Fairbairn** was not dealing with the losses of private station- owners in Queensland, he was fair enough to admit that private cattle-owners in Queensland and elsewhere had suffered in the same way, owing to the slump in the world markets last year. {: .speaker-JYG} ##### Senator Elliott: -- Did not they suffer more in consequence of the retrospective taxation ? {: .speaker-KS9} ##### Senator MacDONALD: -- That is another matter, and one which I would not be permitted to discuss at this juncture. It must hot be .forgotten that the (State stations did not gain any benefit from the high prices which ruled during the first few years of the war, when private stock-raisers in Queensland made extra profits amounting to £100,000,000. A couple of years ago a- deputation of pastoralists approached; the Federal authorities, and asked for relief because they were in difficulties during one bad year- . The **DEPUTY PRESIDENT (Senator Bakhap).** - I direct the honorable senator's attention to the fact .that his remarks are quite irrelevant, and that, as the time of honorable senators is somewhat limited, he must confine himself strictly to the motion before the Chair. {: .speaker-KS9} ##### Senator MacDONALD: -- I was led away- from the terms of the motion by the unfair references made concerning the State stations in Queensland. There have been failures in States other than Queeusland, in private enterprises, and, aa should be well known, the number of bankruptcies in connexion with private enterprise are fairly numerous. If a private firm goes out of business, however, owing to adverse circumstances, it is not contended thai private enterprise has failed. If the Australian consumers are to receive fair treatment, we should have some form of Government .competition, because it has been stated that the products of Australian woollen mills have been brought into Flinders-lane warehouses at a certain figure and, after a small book entry has been . made, has passed out to retailers at an increase of 100 per cent, in price. The need of Government competition in some form is very apparent, in order to prevent monopolistic control and unfair tactics on the part of commercial combines, and this mill should be kept going in the interests of -fair trading and the nation. The moat bitter opponent of Government trading concerns -who. contends that the function of Parliament is to govern, and not to trade, must admit that we should not allow combines to control industry in this country by charging whatever prices they like. We have heard of instances where rings and combines have endeavoured to influence Parliament, and some of the older members of this Chamber will remember an occasion on which the American Steel Trust endeavoured to "bully" the Government of the day by saying that if they did not accept steel rails at a certain price they would not be supplied. I do not think there is any organization in Australia as powerful as the American Steel Trust; but there is always the possibility of one developing. The public control of such an undertaking as the Geelong Woollen Mill is highly desirable in the interests of the people, and I regret that the action of the Government, although perhaps not unconstitutional, is not in the interests of the people. {: #subdebate-6-0-s13 .speaker-KRZ} ##### Senator LYNCH:
"Western Australia -- - The speeches of honorable senators clearly reveal a strong current of sympathy towards the- motion 1 have submitted ; but sympathy is not votes. They are willing to strike, but they are afraid to wound. I drew a sharp distinction between the Government remaining in the field as a trader and retaining this particular undertaking. They are not identical. It has been said that those who vote for the motion may be against the retention of the Commonwealth Woollen Mills, but not favorable to the course taken by the Government in disposing of them without consulting Parliament. I think I made the position quite clear. **Senator E.** D. Millen suggested that the motion embraced certain features which had been introduced with the avowed object of catching votes, namely, the declaration that it was against prudent public policy to dispose of the mills. I presume that those who would vote for the motion on that account would vote for it were that feature in the motion of not. It was not inserted with- any ingenious purpose of catching votes. The Minister also, I think, mentioned the Auditor-General as an authority in support of the Government's proposal ; but, although that official may be a very competent authority onprofessional accountancy, he cannot be re garded as equal to *Quick and Garran* on important constitutional issues. {: .speaker-KUL} ##### Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -- I quoted the Audit Act, not the Auditor-General. {: .speaker-KRZ} ##### Senator LYNCH: -- Then I must apologize to the Minister for misunderstanding him. I now take the stand that the Audit Act is subordinate to the Constitution, and cannot be quoted in regard to the disposal of surplus stocks as supporting the Government's proposal to sell the mills. I have also been told that I have borrowed from the picturesque language of the Prime Minister himself **(Mr. Hughes),** who has informed us that there would not be one brick taken from the temple of Labour, or the arch disturbed in the slightest degree; and the Minister drew attention to what he termed was my want of consistency in wishing to retain this Geelong Woollen Mill " brick " and my motion for the repeal of the Federal land taxation measure. The trouble is that when things are different they are not the same. For the reasons then stated, I wished to remove that brick - I admit it is a brick, and a very solid one, too - out of the temple of Labour, where I helped to place it myself, and shift it to the State shrine of Labour. {: .speaker-K0F} ##### Senator Pearce: -- Is there anything to prevent the States erecting woollen mills! {: .speaker-KRZ} ##### Senator LYNCH: -- Do you intend to doit? {: .speaker-K0F} ##### Senator Pearce: -- I am asking if there is any objection to the States erecting woollen mills. {: .speaker-KRZ} ##### Senator LYNCH: -- I intend to do it with regard to land taxation. That is just the difference between me and the Minister. I propose to have the thing done; he does not. The trouble is, the Minister is not quite frank enough, but he cannot stick me there. The difference is that this brick from the temple of Labour - the Geelong Woollen Mills - is now being taken out by this Government, and is being put through the stonecrusher of reaction and reduced to dust, whereas it was my desire that the other brick should still be reserved in the State sphere of action. If the States will not impose that form of taxation, I would say, keep it here. That is my position. It has been consistent throughout. I do not propose to put this brick through any stone-crusher. **Senator Guthrie** has just told us that 80 per cent, of the Commonwealth wool requirements have to be met by importations from overseas. There is a vast field for enterprise, and yet we are asked to agree to a proposal for the protection of these influential manufacturers of cloth from the puny competition of this small mill at Geelong ! **Senator Drake-Brockman** has urged that we should get out of State activities altogether. I can understand that attitude. It is a straightforward expression of opinion.. I object to any subterfuge or rambling, knock-kneed explanation of circumstances such as has been put up from the Ministerial table. Let us see what these Ministers had to say on the subject in 1910. **Senator Pearce,** speaking to the proposal to establish the Geelong Mill, said - the statement will be found in *Hansard,* on page 3241 - >When **Senator Millen** expresses a fear that State enterprise will not be payable- {: .speaker-KUL} ##### Senator MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917 -I did not express any such fear. Ah I these ghosts of the past. **Senator Pearce** went on to say - >Then I willsay that the fear which is expressed that State enterprise will not prove a payable enterprise finds its best answer in the fear of capitalists generally to be subjected to State competition. . . . **Senator Sir Albert** Gould, who followed **Senator Pearce,** said - >I assume that the *Government* merely contemplate running a woollen cloth factory for the purpose of providing the necessary cloth for making uniforms for the Defence Department, and, pos- sibly, other uniforms for certain Departments of our Public Service. It will be noted that the mill was designed to supply certain Departments of our Public Service - not the State Public Service. Then there appears an interjection by the late **Senator Vardon** - >With 200,000 yards of cloth a year! And **Senator Pearce** followed with this significant interjection - >That is the quantity required for the Defence Department alone. The figures showed that the output of the Factory a few years ago was 700,000 yards per year, so there was a margin on that comparison of 500,000 yards, which it was proposed to dispose of. When the mills were first established they were equal to a capacity of 400,000 yards, so that the problem then was as it is now; what to do with the surplus. It is no use saying that it was not in contemplation then to dispose of the surplus quantity. That clearly was in the minds of those who were responsible for the undertaking. The problem was a real one then in 1910. To say otherwise is to confess to a want of business knowledge and practice. Let us be frank about the matter. If it is necessary to get out of this business in order to shield Flinders-lane and other peoplefrom competition, why not admit it? The mills were established to meet a big demand from the Defence Department; but, as the figures show, there was then a surplus, because the stipulated demand of the Defence Department was only 200,000 yards. I feel that I have done my duty in bringing this question to an issue to-day, and in doing so I do not wish it to be thought that I am embarking on any policy of wild Socialism. Far from it. I want to put this matter in its correct position, side by side with the most ordered Liberal opinion of the day. I want this country, for defence purposes, to be in an independent position, and not at the tender mercy of army contractors in its hour of danger. I shall ask for a division, in the belief that there are still left some members of this Chamber who are not prepared slavishly to follow the Government. I stand to the opinions I held then, and which I hold still. Question - That the motion be agreed to - put. The Senate divided. AYES: 5 NOES: 16 Majority . : . . 11 AYES NOES

Cite as: Australia, Senate, Debates, 15 September 1922, viewed 22 October 2017, <>.