9th Parliament · 3rd Session
The President (Senator the Hon. T. Givens) took the chair at 3 p.m., and read prayers.
Bill presented by Senator Gardiner, and read a first time.
The following paper was presented: -
National Debt Sinking Fund Act- Second Annual Report of Commission, period ended 30th June, 1925.
asked the Minister representing the Treasurer, upon notice -
– The Treasurer supplies the following answers to the honorable senator’s questions: -
asked the Minister representing the Ministerfor Defence, upon notice -
-The Minister for Defence supplies the following answers to the honorable senator’s questions : -
asked the Minister representing the Prime Minister, upon notice -
– The information is being obtained, and the honorable senator will be advised at the earliest possible date.
asked the Minister for Markets and Migration, upon notice -
SenatorWILSON.- The answers to the honorable senator’s questions are as follow : -
Bill read a third time.
Bill received from the House of Repre sentatives, and (on motion by Senator Crawford) read a first time.
Debate resumed from 2nd September (vide page 2082), on motion by Senator Pearce -
That the bill be now read a second time.
– Yesterday afternoon, when I obtained leave to continue my remarks on the second reading of this bill, I was referring to the influence of the associated banks on the operations of the Commonwealth Bank, and had directed attention to the fact that, although the bank had been established as far back as 1911, there were less than 80 branches throughout the Commonwealth. Honorable senators expressed surprise. Perhaps they had in mind the savings bank agencies at the various post offices, but I was referring to branches of the general banking business of the Commonwealth Bank. I mentioned a town in Western Australia named Bassandean, about 11 miles from Perth, where there is a fairly large population, 90 per cent. of which is engaged in various industries. Some of the residents are employed in connexion with the State railways, and Borne are engaged on the private railways. An application was made for the establishment there of a branch of the Commonwealth Bank, but the request was refused. When the associated banks increased their rates upon primary and other products, the Commonwealth Bank, as at present constituted, immediately took . a similar stand. Instead of countering the action of the associated banks, it evidently agreed with it, and increased its own rates accordingly. During the year 1924-25 the primary producers of Australia paid in bank rates and charges millions of pounds more than they had paid in previous years. That is an indisputable fact. There was no attempt by the Commonwealth Bank to save the producers from the extra charges imposed upon them. On the contrary, it acquiesced in the action of the private banks, whose excuse for taking this step was that on account of their immense funds overseas, and a consequent shortage of money in Australia, they were unable to finance industry. They asked for some assistance in building up their reserves in Australia. They wanted a reserve in the shape of Australian notes, and that assistance was given. They undertook that if they were assisted in that way they would ease the market. The request was made in September, 1924, and was acceded to. The Commonwealth Treasureradvanced notes to the banks to the extent of £5,000,000, but what became of the promise to ease the market? The day after that concession was made by the Treasurer, the private banks increased their charges upon exportable products by 10s. per cent., which meant a profit of £750,000 at one stroke. Strange to say, early in 1924 the present Commonwealth Treasurer (Dr. Earle Page) refused to accede to the demand of the associated banks, and said that to build up an immense credit would lead to enormously increased prices that would be detrimental, not only to the working class community, but also to the primary producers. But despite that statement, eight months later he agreed to. assist the associated banks to the extent of £5,000,000 Australian notes. Having thus in a sense helped his poor relation who promised that- he would go no more to his rich uncle for assistance, and the poor relation having said that he would not increase the interest rate, the reward he received was that on the very next day 10s. per cent, was added to the charge on exportable products. Was that assisting the primary producers of Australia ? Did it help any section in this country? Waa it in conformity with the declaration of the Treasurer eight months previously that to do such a thing would bring about an increase in prices? I point out that if the bill is passed in its present form the practice will be perpetuated. I have before me a statement which proves that, not only are the associated banks acting to the detriment of the primary producers, but the Commonwealth Bank is assisting them in that action, which is also detrimental to manufacturers throughout Australia. The statement is in accord with that of the Treasurer, to which I have just referred. Its author is Mr. W. B. Bagnall, Director of the Australian-made Preference League, and it appeared in the Sydney Labour Daily of the 28th November, 1924. It is as follows: -
“CRIME AGAINST NATION.”
Action op Banks. Attitude to Local Industry. excuse of exchange.
A manufacturer of boots and shoes applied to his bank recently for an advance of £2.000 against securities of a market value of £10,000. He was flatly refused by his hanker.
An importer of boots and shoes applied on the same date to his banker for a letter of credit to be established for bini in London against an importation of £10.000. The letter of credit was immediately arranged and cabled forward. “These facts,” states Mr. W. R. Bagnall, director of the Australian-made Preference League, “ arc of actual daily occurrence, and the menace to local enterprise and initiative is becoming more and more serious. “When modern banking institutions, as we know them, first took shape,” he added, “ they began us the servants of the public - as a means for facilitating exchange and assisting enterprise. To-day they are the masters of the public and they dictate terms to merchants with no one to please but themselves as to whether they propose to assist manufacturers or to assist importers. The situation is so serious and so much fraught with danger to the manufacturers of Australia, that it is high time that the question be viewed from all aspects and the danger fully visualized.
Wbereas in the first-mentioned case £10,000 was to bc spent and was to stay in this country, and employment given to men and women here in Australia, the banks refused to give the necessary assistance in spite of sound and visible securities. In the second case £10,000 is to be spent abroad and employment given to men and women abroad, anc! tlie banks not only do all in their power to assist the transaction’, but actually give a premium on this transaction amounting to about £400. “ On the face of it these facts point to a state of things which is most menacing to Australian manufacturers, and one which requires our careful investigation immediately. “ The answer of the banks to this problem is the old worn-out excuse, ‘It is due to exchange.’ “
The excuse then offered by the banks has disappeared now that the exchange position has righted itself, but in any case it was not a legitimate excuse to put forward. “ The banks tell us that they have huge funds in London and none’ here in Australia. We are also told that owing to the rich wheat harvest and the splendid wool clip this season will mean an additional £50,000,000. Instead of this being an occasion for rejoicing, the banks tell us that it will make the position worse and money will be tighter. “ Not Satisfied.” “Hence, in spite of a wonderful season, manufacturers are likely to be still more handicapped in their work by the banks. “It seems appalling to think that such a state of tilings should be possible. If the present state of things were a true index of trade conditions, then the action of the banks could be justified, but as they have absolutely nothing _ to do with either the conditions of things in primary or secondary industries - both of which in Australia are in a flourishing and healthy condition - then the anomalous and absurd attitude adopted by the banks is not only indefensible, but amounts almost to ft crime against the nation.”
I am not holding a brief for any section of the community, ‘ manufacturing or otherwise, so far as the financial working of the nation is concerned, but I claim that we should not have had the complaints we are having to-day if the Commonwealth Bank had functioned, as it was intended to do.We should not have had this menace to which Mr. Bagnall has referred, and which is just as applicable to the primary producers as it is to the manufacturers, and, in turn, through them to the people. The bill can be improved, and in committee an attempt will be made to improve it. The primary producers have suffered. I presume that this bill is intended to benefit the primary producers more than any other section of the community, and I cannot see how the Treasurer, as leader of the Country party, can reconcile his statement made early in 1924 with his action of September last, in advancing to the associated banks £5,000,000 from the Australian Notes Fund. The principle of the bill is sound. Honorable senators of the Opposition will support the second reading, but in committee they will endeavour to have certain amendments made.
– I am pleased to hear that Senator Needham approves generally of the bill, and that he hopes to effect some improvements in committee. I also approve of the general terms of the measure, but upon some points I wish to utter a little friendly criticism. I had the idea, like honorable senators opposite, that the bill was to be individual in its scope; that is to say, that under it individuals would be able to go direct to the Commonwealth Bank and obtain advances against theirproduce, but now that I have seen the measure, I find that advances are to be made in a collective sense only, that is to say, to the institutions specified in section 60abi. This provision is as follows : - “ 60aci. Advances may be made by the Rural Credits Department, upon the security of primary produce placed under thelegal control of the bank, to -
This collective system should provide a greater measure of assistance to Australia in times of financial stress caused by inability to finance wheat or wool operations than would be afforded by the rural credits department itself making individual advances. In any case, the individual would still have the right to go to the Commonwealth Bank in its capacity as an ordinary banker, and obtain an advance, just as he might go to other banks. Indeed, he should have a much better chance of succeeding in his application, because of the certainty of the refund coming later on by reason of the collective operations provided for in the bill. Thus the measure should have a tendency to improve the. ordinary business of the Commonwealth Bank, by increasing the number of its current accounts. It should also assist the financial position, in a general way, by distributing the load of advances to be made. It seems to me it will be very difficult to synchronize the terminable periods of the debentures with the dates upon which the net proceeds of produce will be available. It may not, however, be a very hard and fast arrangement. I take it that the debentures will be a little elastic, and that the term will be sufficient to cover the period when the proceeds of the produce will be due. Another friendly criticism is that no part of the capital should be obtained from the Note Issue Department, which, I think, should conduct its operations apart from the Rural Credits Department. The capital required should be obtained by ordinary means, or by the methods mentioned in another part of the bill. It is not altogether clear whether the allotment from the Note Issue Department is to be by way of grant or loan, but I presume it will be the latter. That point was not made clear in the Treasurer’s budget speech. No part of the capital should, in my opinion, be obtained from the Note Issue Department, and it would be an improvement to amend the bill in that direction. This measure should improve the ordinary business of the Commonwealth Bank, and enable it, working with the associated banks, to meet any difficulties of finance arising at seasonal periods. I am not at all enamoured of Labour’s idea of banking, concerning which we have heard a good deal in this chamber. I do not know what honorable senators opposite expect the Commonwealth Bank board to do. It seems that they believe that any individual should be able to approach the bank and obtain an advance with or without security. It is only reasonable that the Commonwealth Bank should conduct its business on established banking principles, scan with care every application foa* an advance, and not advance money without good security. Some honorable senators have complained that the business of the bank has declined, but with that I do not agree, although its profits are not commensurate with its operations. The Commonwealth Bank has not the profitable business that some, in fact most, of the private banks have. I refer to the very large business of advancing on overseas shipments, which carries very profitable exchange returns. It is quite open, however, for it to embark upon that class of business, and it should strike out and get as much of it as it can. It is also said that its branches are few in number in comparison with those of private banking institutions, but that is due to prudent banking methods. The Commonwealth Bank Board is not likely to establish branches where there is not a reasonable prospect of profitable business being undertaken, and it is quite right to proceed slowly and surely in that respect. It is only reasonable to suppose that when the time is opportune new branches will be opened. The bank has also been criticized for its action in other directions, such as was mentioned in another place the other day, when a question was asked concerning an advance of £2,000,000 to a large Australian insurance corporation when a war loan was being floated. Such criticism is not helpful. In that particular case the Commonwealth Bank, in common with other banking institutions, agreed to advance money to its clients for investment in the loan at J per cent, under the rate of interest which the loan carried. I, in common with thousands of others, borrowed from my own bank to the extent of my financial ability at the time, and for patriotic purposes subscribed to the loan. This great insurance corporation applied for a £2,000,000 loan, which was granted by the Commonwealth Bank under the same terms and conditions as loans were granted to some of its smaller clients. When this transaction was challenged, the honorable member who asked the question was informed that the insur ance company had a credit in the bank of £50,000, that the whole of the £2,000,000 had been paid off, and the account closed. It seems to me - I hope that I am wrong - that the terse reply suggests that owing to this injudicious inquiry the account has been closed. If this is the way in which honorable senators opposite think they are going to assist the business of the Commonwealth Bank, God help the bank ! I whole-heartedly support the bill. The points I have raised may be fully explained by the Minister in reply, but, if not, they can be further considered in committee.
– I desire to congratulate the Government upon again taking a portion of the Labour party’s platform and proposing by this bill to establish a rural credits branch of the Commonwealth Bank. The provision of rural credits has been in the policy of the Labour party for many years past. When the Storey Government, assumed office in New South Wales in 1920, one of the first measures it brought before the State Parliament provided for the establishment of a rural bank to assist the primary producers in New South Wales, to get away from the financial octopus which then had the primary products of that State in its grip. When I first heard of this proposal, I was under the impression that the Government intended to initiate a scheme somewhat similar to that in operation in New South Wales, but on closely examining the bill I find the proposal entirely different. As Senator Thompson pointed out, it is not proposed to permit individuals to approach the Rural Credits Department j all applications for financial assistance must be made collectively. The measure would be of much greater benefit to the primary producers of Australia, if they were permitted in times of stress to approach the department directly. The bill provides for a continuation of the policy the Government has already adopted in connexion with the Commonwealth Bank. The policy of advancing Commonwealth funds to private banking institutions, instead of directly to the primary producers, is not in the best interests of Australia. If my memory serves me well, the Commonwealth Bank not long ago advanced a very large sum of money to the private banking institutions at the rate of 4 per cent., and they later on charged the primary producers, manufacturers, and others, to whom they made advances, from 6 to 7 per cent.
– When did that transaction occur?
– Senator Needham gave us the particulars. It occurred last September.
– And how much was advanced ?
– The Note Issue Board, and not the Commonwealth Bank, made that money available.
– But it was made available through the Treasurer.
– It was Commonwealth money, and it was made available to the private banking institutions. What difference is there between the Note Issue Board and the Commonwealth Bank Board?
– At that time the Note Issue Board was quite a separate body.
– Does Senator Gibbs take objection to that transaction? Senator GIBBS. - Absolutely.
– On what grounds?
– If the Commonwealth Bank could lend £5,000,000 to the private banking institutions at 4 per cent., it ought to have made it available at the same rate of interest to the primary producer, the manufacturers, and others who need it. Instead of doing so, it permitted the private banking institutions to act as middle men, and they made from 2^ to 3 per cent, profit on the transaction.
– I am afraid the honorable senator does not understand the nature of the transaction to which he has referred.
– I understand enough to know that if the Commonwealth Bank could lend the money to the private banks at 4 per cent., it could lend the same amount, or more, to the primary producers, manufacturing interests, or other bodies in Australia which needed assistance. Had it done so, the people generally would have benefited. I take exception to the provision in this bill which constitutes the private banking institutions middlemen as between the Commonwealth Bank and our . producers. The
Labour party established the Commonwealth Bank in the interests of the people, but in the last twelve months its purpose has been altogether altered by this Government. Instead of operating in the interests of the people and helping them in times of financial difficulty, it is to-day operating in the interests of, and providing backing for, the private financial institutions. Honorable senators on this side of the chamber hope that this state of affairs will be remedied during the next few months, for we anticipate that a change of government will occur. One of the first actions of the next Labour Government will be to place the Commonwealth Bank on its original footing. This bill does not go far enough. I recognize that the people in our rural areas need assistance, but so do those who live in our urban and suburban districts. In my opinion the Commonwealth Bank should be empowered to assist the people to solve the housing problem. No question is more important to our people to-day than that of housing. Honorable senators opposite may say that that is altogether outside the scope of the bill, but I contend that it should be provided for in it.
– It is already being attended to by the States.
– Only partially so. The South Australian Labour Government, which was recently elected, is certainly tackling, the problem in a wholehearted manner, and is making very great headway. The Queensland Labour Government is, I understand, ‘ doing likewise, and the New South Wales Labour Government is also giving attention to it. Notwithstanding all these activities, however, the housing difficulty has never been more acute, and I greatly regret that the Government is giving no attention to it. I regret that the bill provides for collective and not individual applications for advances. The individual primary producer should have the right to approach the proposed new department for the financial assistance necessary to carry ou his business. It is my intention, when the bill is in committee, to submit amendments which, in my opinion, will improve its provisions.
– I have much pleasure in supporting the bill. For a long time now I have given a good deal of thought to the need for rural credits, and I welcome this measure. I have not heard the whole of the ( debate, but I agree with the remarks of those honorable senators who have urged that the measure does not go far enough. However, it is a genuine attempt to help the most deserving class of people in the country, namely, our primary producers, and perhaps it is as well that the scheme should be started in such a way as to permit of its enlargement in the future. I propose to direct attention to certain improvements, which I think could be made in the measure; but as the Government has given us an earnest of its sincerity, I question if it would be advisable unnecessarily to harass Ministers who are responsible for the passage of this legislation.
– It may be too late afterwards.
– I do not think so. It should be possible, by regulations, to do all that may bo necessary. Undoubtedly our farmers have been severely handicapped hitherto because they have not been able to obtain adequate financial assistance to permit of the more orderly marketing of their products. Under this scheme the return to the producers will probably be appreciably increased, because they will be in a position to hold their produce against periods of scarcity. Honorable senators opposite have objected that advances to be made by the Rural Credits Department must be either through the Commonwealth Bank itself, or through other private trading banks. This provision, I submit, is absolutely necessary, because, for the present, cooperative organizations of primary producers, and individual farmers who, later, may get advances, have their banking arrangements with private trading banks. The Commonwealth Bank is not large enough. Its ramifications do not extend throughout the entire community. If, as has been urged, applications should be made either to the Commonwealth Bank or the Rural Credits Department direct, thousands of banking accounts would have to be transferred from private trading banks -to the Commonwealth Bank, and chaos would result.
– It would also mean that only producers in certain areas, where branches of the Commonwealth Bank have been established, would be able to take advantage of the bill.
– The private banks would go out of existence, and the Commonwealth Bank would be paramount.
– As it would be necessary to establish thousands of branches of the Commonwealth Bank throughout Australia, the whole scheme would break down. The bill wisely provides that advances may be obtained either through the Commonwealth Bank or other banks which hitherto have done so “much to help our primary producers.
– And robbed them, too.
– The private trading banks have been of very great assistance to1 our primary producers.
-How did they treat our primary producers in 1891, 1892, and 1893? They declared a dividend of 12 per cent., and hung outside their doors the notice - “Business suspended.”
– I question if any banks paid a dividend of 12 per cent, in 1891.
– The proposed Rural Credits Department will be a very important addition to the activities of the Commonwealth Bank. The bill provides for an advance from the Treasurer of £3,000,000, and for the issue of debentures not to exceed four times the amount of the advance. As the scheme develops it is quite possible that the trading capital of the department will amount to £15,000,000 or £16,000,000. In the proposed new Part VIb. of the act appears the definition of “ primary produce.” “Products,” in my opinion, would be the better term, because it would cover a wider range. The definition clause mentions several products against which an advance may be made, and makes reference to “such other produce as may be prescribed.” This will permit the Government, by regulation, to extend almost indefinitely the activities of the proposed new department.
– What is the difference between “produce” and “products “ ?
– It may be difficult to explain, but I should say that “ produce “ may be regarded as the result of agricultural or pastoral operations, whereas “ products “ may include timber or minerals. Timber getting is a rural industry, and is one that should have assistance. For this reason I should like timber to be included among the products against which an advance may be obtained. I am aware, of course, that reference to the tariffon timber may be out of order. I should like to refer to the tariff schedule, and I shall have something to say on that subject on another occasion. The position of our timber millers at the present time is exceedingly difficult. In the majority of cases saw -millers are relatively poor men, because the establishment of a bush sawmill does not require the investment of a large amount of capital. Timber should stand for a year to season, so that, to feed the market with a product that is usable, it would take about five times as much capital to stack timber for seasoning as is required for the establishment of the mill itself. Consequently, nearly all working saw-millers sell the timber off the saw, that is, in the green state.
– Timber is not an overseas commodity.
– I have not found anything in the bill that limits advances by the proposed Rural Credits Department to products intended for the overseas markets. I hope the activities of the department will not be so limited. If a saw-miller wishes to store his products to feed the local market in times of scarcity he should be able to avail himself of the provisions of this bill . In some of the States it is necessary to store a considerable quantity of butter in spring and. summer when the supplies are plentiful, in order to feed the local market in winter time. I hope that primary producers, who may wish to do that, will be able to take advantage of this measure, and get advances from the Rural Credits Department.
– There is nothing in the bill to limit its provisions to products to be sent overseas.
– I do not think there is. The timber miller, as I have stated, sells his product green, because he cannot afford to hold it. It is cut in the green state, and whilst still in the heaviest possible condition is carted in the winter time over roads which the Government or municipal councils have to make and maintain, and dispatched by rail to city timber yards, where it is handled by dear labour, and stacked on dear land to season. Frequently it constitutes a danger to people living in the vicinity of a timber yard. This course is adopted because the saw-miller has not sufficient capital of his own to stack the timber where it ought to be seasoned. It should be stacked in the country, with a minimum of labour and expenditure, on land near the saw-mills where it is cut, the rental value of which is practically nothing: If this were done, the timber could be carted in the summer time when roads were dry, and, consequently, they would not be damaged so seriously. Freights on the railway would also be lighter. The scope of the bill could easily be extended so as to grant assistance to saw-millers. There is often from 40 to 50 per cent. difference in the value of green timber off the saw as compared with its value when dried. If an advance was made of, say, 80 per cent. of the value of the green timber, and the timber was insured, there could not possibly be any loss on it, for it would steadily increase in value.
– How long would it be necessary to store it?
SenatorJ. B. HAYES. - It can be seasoned in from twelve to eighteen months. A saw-miller would require a sufficient advance to pay wages for a year ahead.
– Would there be any danger of the timber being attacked by borers ?
– Not much. The timber would be just as safe from borers in the bush as if stacked in a timber -yard in the city.
– It must be seasoned somewhere.
– Of course, and the best place to do it is in the bush. This would enable the saw-miller to get the benefit of any increase in the price. At the present time more than half the mills in my district are closed down.
– Why will not the banks advance money on timber now?
– I suppose they ‘do to some extent.
– What about bricks and tiles?
– That is another matter. I do not know much about them, but I do know that the bush sawmillers are a good class of men who spend their money in their own districts. They have to contend with the importation of American timber, which seems to come here at less than the cost of production. This bill could be framed to help them.
– Its scope would have to be extended to enable advances to be made to individuals as well as to corporations and associations.
– No doubt the Government has a good reason for limiting its operation in the way proposed. There are saw-millers’ associations that would probably accept advances on behalf of the millers, and be responsible for them, if it is not proposed at once to deal with individuals. I am a keen believer in co-operation. I am sure that there must be hundreds of settlers who are not members of corporations or associations, but would be glad to avail themselves of the provisions of this measure. No doubt the bill will prove a great incentive to the formation of cooperative societies; but I hope that, later on, it may be possible to deal with individuals direct.
– Would the alteration suggested bythe honorable senator lead to the continuous employment of the saw-millers in Tasmania?
– That depends entirely upon whether it will pay them to cut timber in competition with the imported article, but I am satisfied that the bill could be made to benefit them.
– Would it increase production ?
– I do not think that any new saw-mills would be erected, but the present mills could be kept working on full time. There is no danger, in the opinion of men who know a great deal more about thesubject than I do, of depleting the Tasmanian forests by cutting out the timber.
– If all the men now employed half their time were kept busy it would surely increase production.
– It is hoped that the industry is suffering only a temporary set-back. There must be hundreds of persons who, by reason of the nature of their avocation and the disadvantages under which they labour, will not be organized in corporations or co-operative societies for a long time.
– It would increase the cost of inspection and administration generally if the bank dealt with individuals.
SenatorJ. B. HAYES. - I realize that the bank will have plenty to do for the time in catering for co-operative societies and corporations, bub when it has mastered that aspect, I hope that the principle of the bill will be extended to individuals. I wish to make a plea for the adoption by the Commonwealth of the credit foncier system of lending money on mortgage. In some of the States, notably in Victoria, this excellent system is in operation. The Victorian Government, . through the State Savings Bank, lends money to farmers on good security. It would be of the utmost advantage to farmers, many of whom have valuable properties and are hard-working men, if they could renew their mortgages through the Commonwealth Bank. The interest rate would be a little less than they are now paying, and, with a slight additional effort, they would establish sinking funds that would extinguish the loans after a term of 25 or 30 years. The farmers would then have no more bother with mortgages and legal costs, and instead of getting further into debt every year, as they now are, they wouldyear by year improve their positions and finally be free from debt. There is plenty of scope in all the States for the Commonwealth Bank to enter this field of activity, and establish a branch for loans on broad acres under the credit foncier system. I do not know of anything that would be. more advantageous to the average farmer than this, for he has to go somewhere for his money. I believe that the intentions of the Government in regard to this bill are very good, and will be realized. The measure provides for a very considerable expansion of the bank’s activities, and I hope that its usefulness will be extended in the direction that I and some other honorable senators advocate.
– Like previous speakers, I am glad that the bill has made its appearance in this Chamber. The time is quite opportune for something to be done to assist a class of the community that badly needs help. Ostensibly, the bill is intended to benefit the rural community. It is quite true that that section has had various forms of assistance in the past, for the reason that it was thought that if assistance was not given the interests of, not only that section, but also the whole community, would be prejudicially affected. This particular form of assistance is not new, but we believe that the bill will provide a more ample measure of relief to the producing interests of the country than has been furnished in the past. This measure has given an opportunity to some honorable senators to indulge in rare flights of fancy. We have been reminded of what the Labour party has done in the past, and it is asserted that this Government is merely, so to speak, stealing the thunder of that party. If argument of that nature satisfies honorable senators opposite, it is an innocent form of amusement with which I am not inclined to find much fault. But those who think that the Labour party originated and brought into existence many of the reforms for which they claim exclusive authorship should remember that these things were in existence before that party was formed in Australia or even thought of. We had State railways and State steamships founded by governments and parties that never called themselves Labour. We had State steamships on the coast of Queensland run by a government of the day, which, I believe, showed a far better balance-sheet than is shown by State steamships to-day. State hotels were brought into existence by a nonLabour Government in Western Australia, and under the control of: that government flourished and did better than they have done in later days. We also had the effort of the South Australian Government to create a State Export Department for purposes similar to, ii not identical with, those this bill is intended to serve. That effort also was not originated by a Labour Government. The old Labour party, in contradistinction to the present-day Labour .party, was always prepared to acknowledge the authorship of these reforms. The State Export Department of South Australia took the- produce of the farmer, who chose to market it through the department, and either placed “it on the local market or sent it to London. By its efforts the producers were, placed in a much better position than they previously occupied. It used to advance liberal sums on produce entrusted to its care. Furthermore, whenever there was a glut to the disadvantage of rural producers, it went into the market and bought up the excess production, and so relieved the situation to the advantage of the producers.
State banks are no new thing. The Agricultural Bank of Western Australia was started by the Forrest Administration, and State banks existed in other States. Therefore, when honorable senators indulge in the pastime of claiming the authorship of many of these “reforms, all I can say in reply is that many of them existed prior to 25 years ago when the Labour’ party was first formed in Australia. It is, therefore, foolish of honorable senators opposite to claim for the Labour party all the credit for these things. They ought to be broad-minded enough to admit that other parties and other individuals, long before the Labour party had arisen in Australia, embarked upon similar enterprises with more or less success.
In regard to the bill itself, I point out that we have no certainty as to the exact position of the interests in the Commonwealth which it is intended to benefit. This condition of affairs causes me, at the risk of being considered egotistical, to recall that not long ago in this Parliament I pointed out that we were sadly in need -of a statistical department which would tell us exactly the position of any interests that came forward claiming State assistance, so that we might be in a better position to give a judgment upon the merits of the claims before granting or denying the assistance asked for. At present we can only say by way of a random shot that the rural interests of Australia stand in need of help, and that, therefore, it is right for the Government to come forward by way of a communal effort, and give help to those who are in need of it. We do not know from authentic sources that they are in need of it. We can only make, as I say, a chance calculation, and declare that we can tell from various portents, that the rural interests which stand at the basis of the prosperity of the Commonwealth, are not as well off as others in the community. On those general grounds we think that they ought ^ to be assisted, and we afford them assistance. My proposal made some time ago was that there ought to be an inter-industrial commission authorized by legislation to investigate the circumstances of every individual industry, in order that Parliament would be authoritatively informed at any period upon the position of that industry, and would thus be in a better position to judge upon the rights or wrongs of any claim it might put forward for assistance. In the absence of such an investigation, we can act only on the declarations of interested parties. I do not say that the declarations of interested parties are intended to deceive Parliament, but the evidence thus put forward could nob be as authentic as would be the evidence that would be obtained by having the statistical position of the industry determined by an independent body of the description I have mentioned. Such institutions exist in other countries. I shall quote from the researches of the institution in the United States of America to show how the rural or farming interests there stand to-day.
The resources of the United States of America are so vast that most thorough methods can be adopted in estimating even to a fractional point whether or not this or that industry is in a flourishing position. The Bureau of Agriculture in America has been able to gather statistics that throw a. flood of light on the rural interests of the States. In the absence of any information of a like character in Australia, these figures help us to form some idea of the position of the same interests here, and give us some guidance for the adoption of the policy we propose to shape in affording assistance to primary producers. The information I shall quote is taken from The World Almanac, and is borrowed ill turn from a publication of the Bureau of Agriculture in the United States of America. It gives a clear outline of the rural progress of America in the last five years. I make no apology for inserting the whole of it in Hansard, although it is very lengthy. It reads as follows: -
The United States Department af Agriculture gave out on Aug. 24, 1024, the result of an investigation covering the last five fiscal years into the condition of the American farmer. The department says that its studies “ bear out the popular impression that American agriculture since the slump of 1920 has not yielded a commercial interest return on its invested capital or a fair wage for the average farm operator and his family.” Its official summary is as follows: -
Interest paid on total farm indebtedness consumed all capital earnings in the crop years 1920-21 and 1921-22. In the next two years there was a return of 3.1 per cent, on the total capital invested in agriculture, including rewards of management. This investment, however, was written down from $79,007,000,000 in 1920 to $59,409,000,000. Land and buildings by themselves were written down from $G6,316,000,000 to $48,300,000,000.
This is the department’s estimate of the extent to which the value of property used in agriculture declined from 1919 to 1923-24. Land and buildings, machinery, live-stock and working capital make up the total agricultural investment. To arrive at its present estimate of this capital, the department wrote down the census figure of 1920 for land and buildings on the basis of the reported decline in improved farm land values in all parts of the country. lt figured the decline in value of equipment on the basis of current prices and estimated purchases of equipment by farmers. The livestock estimate rests on the department’s inventory as of Jan. 1. Working capital is estimated at 1 per cent, of the total inventory. While the decline in the current value of the country’s agricultural property represents to a large degree a paper loss rather than an actual loss, it is nevertheless important to the large number of farmers who bought land and equipment when prices were at their peak.
The following has direct application to Australia : -
The department has estimated for the fiveyear period the return on all the capital invested in agriculture. It puts this rate at 6.2 per cent, for 1919-20; 0.6 per cent, for 1920-21; 1.4 per cent, for 1921-22; 3.1 per cent, for 1922-23; and 3.1 per cent, for 1923-24. Even this meagre showing was only made by valuing the labour of farm operators and their families at no more than the current rate for common labour. While agricultural capital as a whole had only the small returns above mentioned, it was paying an average of more than 6.7 on mortgage and other indebtedness.
Some other figures compiled by the department in its study are interesting. It puts the gross income of American agriculture (that is the value of its production less feed and seed) at $15,830,000,000 for 1919-20; at $12,782,000,000 for 1920-21; at $9,552,000,000 for 1921-22; at $10,592,000,000 for 1922-23; and at $11,407,000,000 for 1923-24.
Net income to agriculture was these amounts less operating expenses, taxes and depreciation. With these deductions made, the department figures out the net income of the different years to have been as follows: - $4,954,000,000 for 1919-20; $438,000,000 for 1920-21; $805,000 000 for 1921-22: $1,916,- 000,000 for 1922-23; and $1,863,000,000 for 1923-24.
After the farmers had paid interest on their total farm debt the income left to them on their unemcumbered capital is estimated to have been $4,057,000,000 for 1010-20, a loss of $468,000,000 for 1920-21, a loss of $73,000,000 for 1921-22, a net balance of $964,000,000 for 1922-23, and of $921,000,000 for 1923-24.
I direct particular attention to the following : -
That is the argicultural position as it looks from the stand-point of the earnings of all the capital invested in the business. When it is looked at from the stand-point of the return on the -farmers’ own capital and the reward for his labour, the picture is equally unsatisfactory. On the capital owned by farm operators themselves, the rate earned is figured at 5.8 per cent, for 1919-20, minus 3.1 per cent, for 1920-21, minus 1.4 per cent, for 1921-22, 1.6 per cent, for 1922-23, and 1.4 per cent, for 1923-4. Thus, in two out of the five years farmer-owned capital earned nothing, and had to be drawn on to meet interest charges on borrowed capital.
The estimates of the net return on farmerowned capital in the last two years are more liberal than those given in a recent survey made by the department upon returns for 1923- In that survey, 16,000 owner-operated farms were covered. Allowing 870.00 dollars for the value of the labour of the operator and that of his family, it was figured that the farm studied showed a net balance for the year of 270.00 dollars, or 1.5 per cent., on the average value of the farm real estate and its improvements. That return barely sufficed to pay interest charges. It left practically nothing as a return on the farmer’s capital.
The new study, which covers the entire country, md includes tenants as well as owners, indicates that farm operations in 1922-23 yielded 1.5 per cent, on farmer-owned capital, and 1.4 per cent, for 1923-24, after deducting wages for the farmer’s labour, but nothing for his management. But this showing, it is pointed out, is due to the fact that the later study makes a more conservative valuation of the farmer’s own labour and that of his family than the former one.
Considered from the stand-point of the return for the farmer’s own labour after deducting a commercial interest return on his capital, the average farm operator, says the department, in the five-year period actually earned less than was paid to common hired hands.
That shows what is happening in the rural areas of the United States df America. It shows that not only was there no profit at all, but that the capital already invested in the industry had to be drawn upon to keep the industry going. In regard to the whole five-year period, it is shown that the average farm owner or operator actually earned less than was paid to the hired men employed. . It is as well that such facts be made known. If the position in America is to any extent a criterion of the posi- ti on in this country we must presume that farming in Australia is not in the flourishing condition that some people suppose. If the industry is flourishing in some places it is largely due to extra effort on the part of those engaged in the industry.
– But for the long hours worked there would not be the apparent prosperity which has attended their efforts. If our primary producers were to work, say, only nine hours a day, the products which are consumed in the cities would be sold at much higher rates than now prevail. It is only because the producers work longer and harder that they are able to compete with those selling similar products in the markets of the world. Farming even in the United States of America is not as profitable as many other industries. Moreover, the United States of America is closer to the large consuming centres than Australia, and if we add to the handicaps already imposed the additional disadvantage of lauding produce in the London markets, the position of AustraHan producers is much less satisfactory than that of the producer in the United States of America. It has been said in this chamber and elsewhere that the farming community is “ coddled,” and receives benefits refused to others. I have shown that it is not so. This form of assistance, which is badly needed and is long overdue, enables the producing section of the community to increase its credit facilities and prevents it being compelled to sell its produce before a fair price can be obtained. The commercial community can avail itself of far greater advantages than the farming community. What would be the position of the producer of 1,000 cases of Tasmanian fruit, 1,000 bags of Western Australian wheat, or 1,000 bales of Queensland wool? While these products were either in transit to the seaboard or on the spot where they were produced, the producer could not obtain the advantage derived by the commercial community so soon as they became the subject of a bill of lading. Immediately a consignment of fruit is placed on board and a bill of lading issued, the person handling it is able to trade upon it, and is, therefore, in a far more advantageous position than the actual producer of the commodity. Under this measure the actual producer will be placed within reasonable distance in point of advantage with the commercial men handling his product. While a consignment of wheat is on the way to the seaboard or in a granary, a higher percentage is charged on any advance made than is the case when it is the subject of a bill of lading. The banks give more favorable terms on goods which are the subject of a bill of lading than otherwise, because they as nearly approach a negotiable asset as is possible. While wool, wheat, fruit, or other produce is finding its way to the shipping port, owners cannot avail themselves of the opportunity to secure an advance, but the person who simply steps in and forms the link between the producer and the consumer is able to do so. A man who sows thousands of bushels of wheat is often termed a wheat-grower, but he is only a wheat sower, as he places the wheat in the ground and very often that is the last he sees of it. A woolgrower may figure on obtaining a certain return, but, instead of receiving what he expects, may only increase his overdraft at the bank. The fruit-growing and dairying industries are also subject to the vagaries of fortune, but immediately the produce of these industries becomes a visible and tangible asset the man who- takes it from the warehouse and places it on board a ship derives the greatest advantage. This is a long-standing anomaly under which our producers have suffered for a very long time, and one which this measure proposes in some way to rectify. There is no reason why the person who takes all the risk should be saddled with an excessive rate of interest, and at the instance of this Government an attempt is now being made to place such persons in a more satisfactory and- advantageous position than they have been before. There should be no occasion for an apology for the introduction of the bill.
One amendment, however, should be made in order to overcome an anomaly. It is proposed to provide advances on certain forms of dairy produce, but provision has not been made for advances to be made to stock and sheep owners. Advances can be made .on wool taken from the sheep’s back, and in transit to the seaboard, but similar assistance cannot be given to stock-owners. There ;s no reason why the stock %nd sheep owners should not be able to avail themselves of the benefits provided by the bill.
– But stock may die.
– That may be so, but fruit, which is a perishable commodity, is included. The bill should be amended to include stock upon which advances might safely be made. I make that suggestion in the hope that the Minister (Senator Pearce) will see the fairness of placing sheep-farmers and stockowners on the same footing as the owners of other produce.
– Is the honorable senator referring to live stock before it is marketed 1
– Advances are to be made on produce in process of marketing.
– I understood the bill was for the purpose of establishing a credit for owners until the produce was marketed.
– During the process of marketing. Sheep and cattle on the farm are not in the process of marketing.
– I do not see why an owner of 500 sheep should be deprived of the facilities provided in the measure when an adjoining farmer may obtain an advance on his wool.
– He could obtain an advance on his wool, but it would be risky to take live stock as security.
– That branch of the business is dealt with in the ordinary way.
– Sheep are as good an asset as wool. I do not think there is any occasion for the alarm expressed by certain honorable senators, particularly as regards the proposal to make advances to private banks. Money is advanced to institutions, whether incorporated or unincorporated, and to do as some honorable senators suggest would be to place those dealing with such institutions in a most disadvantageous position. It should not be thought that the private banks will obtain the money from this department, and, in giving accommodation to their clients, lend it at a higher rate than that at which they obtained it. If they did, they would be helping to boost the Commonwealth Bank. If the private banks do not give the same terms as the Commonwealth Bank, or certain incorporated organizations, it is quite clear that those who have commodities toship will give their business to the institutions which are prepared to give them the fairest deal. For my part, I see no difficulty at all in the matter. I see a direct inducement to the private banks to avail themselves of the use of the extra money and advance it to the farmers, on the same basis as the Commonwealth Bank and the farmers’ organizations of Western Australia, South Australia, and elsewhere. The bill is much needed by our primary producers. It will enable them to offer a more sturdy resistance when they are overtaken by unfavorable circumstances. Every fair-minded citizen must realize that the farming community confers a direct benefit upon all, and, therefore, merits whatever assistance he can give it If the dwellers in our cities and towns will not help the farmers, the time will come when the farmers will leave their farms and come to the cities to live. Should that happen the last state of our people will be worse than the first. The agricultural communitydeserves every assistance that wecan give it. By helping it we are helping to develop the country generally. I could be led into very seductive paths in pursuit of this topic, but I must not yield to the temptation. The farmers, as we know, are up earlier and later, and work harder, than other sections of the community.
– And so do their f amilies.
– That is so. They suffer much greater hardships than the city dwellers. One direct result of that is that we pay much less for their produce than would otherwise be the case. We ought to do everything we can to keep our people on the countryside, for that will tend to advance Australia. East and west, and north and south, there are signs of agricultural stagnation. It is well known that men frequently go out to inspect land only to return to the city determined to stay in it. The passing of this bill ought to improve, in a small degree, the lot of the farmer and primary producers generally. There is no comradeship or fairness in obliging one section of the community to work harder and longer than other sections. I accept this bill as an indication of the sympathy of the Government for the farmer. I am sure that the farmers will make full use of its provisions to our benefit, as well as to their own.
– If some honorable senators are to be believed, the farmers are in a chronic state of impecuniosity. It is positively painful to hear the prolonged and . continuous wail that is made in their behalf. I do not for a moment believe that they are in anything like the serious predicament that some honorable senators describe. Taken as a class, they are just as well, if not better, off than the residents of our cities and suburbs. With the advantages of wireless communication, cheap means of transit by motor cars, and up-to-date agricultural machinery, their lot is wonderfully improved compared with what it was years ago. It must not be forgotten that the workers in the cities manufacture the implements which make the farmers’ work easy and enable them to do far more in a given time than was possible in former days. Railway facilities are at their disposal, and, altogether, their lot is not at all hard. With up-to-date drills, strippers, and other machinery the hard manual work on the farm of to-day is negligible.
– The farmers do an immense amount of work.
– But the honorable senator cannot deny that their lot is made easy by the modern implements manufactured in our cities. Farmers now do not do one-hundredth part of the work that they used to do. I have made these remarks in fairness to the workers in our manufacturing areas. The worker in the city is just as necessary as the farmer in the country. Both are essential, and they should co-operate. To say the farmer is the backbone of the country-
Senatorguthrie. - Everybody knows that he is.
– To say that is, it seems to me, to ignore the worker in the city, who makes the farming implements.
– For which the farmer has to pay exorbitant prices.
– Largely on account of our silly policy of protection, of which the honorable senator is such a staunch advocate.
– The primary producers produce 75 per cent. of the wealth of Australia.
-By the aid of machinery manufactured in the cities. We have been assured that the farmers are obliged to pay unduly high rates of interest for borrowed money with which they carry on their operations. I am quite prepared to believe that that is so.
– Many of them pay too much for their land.
– That, also, is true. We are told that the object of the Government in introducing this measure is to enable our primary producers to obtain money at lower rates of interest. If that end is achieved there will be a large increase in the unimproved value of. our agricultural land. Probably the Government also desires that result, but it has not said so. Ostensibly the bill provides that advances may be made only on certain specified products ; but proposed new sub-section 60 aba of the proposed new Part VI. of the principal act reads -
In this Part, unless the contrary intention appears, “ primary produce “ means wool, grain, butter, cheese, fresh, preserved or dried fruits, hops, cotton, sugar, and such other produce as is prescribed.
It appears to me, therefore, that advances may be made on any produce, and not only on that specified. In that case the fears expressed by some honorable senators that the bill is not sufficiently comprehensive are groundless. The Government will have authority to make advances on any produce. I do not think there is any need for the bill, for, in my opinion, the original charter of the Commonwealth Bank was sufficiently comprehensive to enable advances to be made on any of the produce that I have just mentioned, but I do not object to it. I should like to see other departments aswell as a Rural Credits Department connected with the bank. I welcome the proposal that the accounts of this department shall be kept quite separate from those of the other departments of the bank. It would be interesting to many thousands of people if a more explicit and less complicated balance-sheet of the Commonwealth Bank could be published.However, if a separate statement is published from time to time of the operations: of the Rural Credits Department we. shall at least know how it stands. It is difficult to ascertain to what extent the department will be equipped with funds. It appears that the Treasurer will be empowered to lend up to £3,000,000, and that 25 per cent. of the profits of the Note Issue Department, representing, I understand, £250,000 annually, will be placed to the credit of the new department. This may be continued until the amount so paid reaches a total of £2,000,000. Apparently this will take eight or nine years. Thebank will also have the right to issue debentures up to, apparently, £12,000,000, and may make an advance from, I assume, the profits accruing from the operations of the bank. It would appear, therefore, that in the near future the new department will have command of from £15,000,000 to £20,000,000. This is a mere bagatelle for Australia, but it will do for a beginning. Exception should be taken to clause 60abi, which provides for advances by the Rural Credits Department - . . . upon the security of primary produce placed under the legal control of the bank, to -
I fail to see why the Commonwealth Bank should establish a rural credits department to make advances to other banks. The directors should be informed in the plainest possible terms that they are not doing their duty by persistently neglecting to open new branches of the bank. I am not quite certain how many branches are in operation, but I understand that there are only about 75 in the Commonwealth. This number is not nearly sufficient to meet the requirements of the public, and it is proposed to prevent any further extension of the Commonwealth Bank by paying to the credit of the Rural Credits Department 25 per cent. of the net annual profits of the Note Issue Department. This sourceof revenue should be used for the purpose of extending the operations of the bank. It would be far better if the directorsof the bank could be induced to open rural branches, so that producerscould take advantage of this institution.
– The directors might be able to work the new department through the savings bank branches.
– I have yet to learn that the Rural Credits Department will be attached to the savings bank branches of the bank. If that were done it would considerably extend the operations of the bank itself. I notice also that one-half of the net profits of the Rural Credits Department is to be placed to the credit of what is described as the Rural Credits Department reserve fund, and one-half to the credit of the rural credits development fund, to be used for the promotion of primary production. It is difficult to see the limitation of the powers of the board under this clause, and it is almost impossible to say where the operations of the department will extend. I do not offer any objection, but I think all that is necessary can be done without the creation of a new department at all. This, however, is a detail upon which the bank directors may better be able to express an opinion than I am; but if it is necessary to establish a special department of the bank to advance money to primary producers, I suggest that the time is opportune for the creation of another branch for the building of homes. I know that I shall be met with a statement that the savings banks of the various States are doing this work already. As a matter of fact, all exisitng homebuilding agencies are quite unable to meet the demands for housing accommodation. It would be as well, therefore, if the directors of the bank were urged to establish, as soon as possible, a homesbuilding branch on lines similar to this proposed new department, the purpose of which is to lend money on the most reasonable terms to persons engaged in primary production. Notwithstanding all that has been done to provide homes for the people, rents were never so high, and there was never so much overcrowding as at the present time. It may be urged that the creation of a homes-building department of the Commonwealth Bank would not get over the present difficulty, but it would be at least a step in the right direction. One very important result of the scheme, if it is fully developed, will be that profits derived from primary production will be greater ; people engaged in that business will have less interest to pay, and life in the country will be a great deal better than it has been. It is highly desirable to legislate for the improvement of the conditions under which our’ primary producers carry on their avocations, both with regard to the hours of labour and their returns.
– Does the honorable senator think they could carry on Avith a 44-hour week?
– I have not the slightest doubt that they could. Why should a farmer be expected Jo work excessively long hours when people in other industries are required to work only 44 hours 1 I listened very carefully to Senator J. B. Hayes, who advocated an extension of the provisions of the bill to include the sawmilling and allied industries. If advances could be made in respect of such industries, sawmills in Tasmania and elsewhere, which, I understand, are> working at only about 50 per cent, of their capacity, would be more fully employed. Production would be stimulated, and, unless there was ‘ an increase in consumption, we might be faced with unpleasant consequences in the not distant future. Another important result which I think will follow the enactment of this measure will be a substantial and permanent increase in the value of land. I hope, therefore, that when we ask our primary producers to make some recompense by agreeing to the payment of a straight-out land value tax to assist the national revenue, they will not refuse.
– I support the bill, which I welcome as a further evidence of the desire of the Government, and those associated with the Commonwealth Bank, to extend its usefulness. It is better to take one step at a time than rush into extravagant and risky expenditure by altering the bill so as to meet the objections raised to it this afternoon. Since existing financial institutions- will be interfered with, the greatest possible aare should be taken to avert a crisis. The intention of Parliament is to benefit an important section of the community, and it would be a strange bill indeed if some adverse criticism could not be offered. I realize that such criticism often tends to improve a measure, but we were told this afternoon by Senator Gibbs that at last the Government had lifted an important plank from the platform of the Labour party and adopted it as its own. Then he and other honorable senators proceeded to criticize adversely this plonk of the Labour platform which the Government was accused of stealing. This party and this Government are not so blind, and, I hope, never will be, as to refuse to adopt any measure that will promote the welfare of the people. If this bill happens to be in ac-‘ cord with the policy of the Labour party, it is well that the party in power should not refrain on that account from supporting it, and even those honorable senators opposite who are giving it adverse criticism should accord it a favorable reception. It has been said that some provisions which might have been included have been omitted. One of the matters that has caused some adverse criticism is the omission of provision for the urban home seeker. I do not know that this individual will not be provided for under the bill, since fairly extensive powers are generally taken under an act when those administering it are permitted to make regulations. This bill provides for the making of regulations, and whether under them the urban home builder will be assisted or not he is already amply provided for in most of, if indeed not all, the States. I do not know that he could be very much better served under this bill than he is by the financial organizations established under State legislation.
– “Why were not potatoes and onions mentioned as primary produce ?
– The honorable senator will see by the bill that primary produce includes “such other produce as is prescribed.” It is said that houses were never so scarce, and rents never so high as they are at the present time. This is not clue to the fact that money cannot he procured to build them. There are other reasons why homes are not being erected as quickly as people would like. Senator J. B. Hayes expressed regret that timber has not been mentioned as a class of primary produce to which the bill applies ; but it seems to me that the board would be able to make advances on timber if it considered it wise to do so. I do not know whether timber was omitted accidentally, or by design. No doubt there was thought to be some very good reason for the omission: but, so far as I can see, timber is a commodity with regard to which there would be less risk than any class of produce with which the bill specifically deals. It is one of the few products that improves with age. Of course, the demand for Australian timber is likely to be affected by large importations from overseas. I am informed that about 60 per cent, of the sawmills in Australia are now closed down.. because American timber has been rushed into the country in tremendous quantities and at a very cheap rate. I understand that after the recent disastrous earthquake in Japan, American merchants saw an opportunity to get rid of a large quantity of their timber, and large supplies were rushed to the seaboard for that purpose. But the Japanese decided to adopt the more substantial concrete for the re-building of their devastated cities and towns, and therefore the timber which was left on the hands of the merchants came to Australia. I believe that that is very largely why there is such a tremendous slump in the timber industry in Australia to-day.
There is always a danger of drought on the one hand, and overproduction on the other; but these are temporary ‘ drawbacks. which adjust themselves in the course of time. Last year we passed legislation which has, I believe, extended the usefulness of the Commonwealth Bank, and the present bill should further increase it. A board of management was appointed, in order to obtain the best financial advice available in conducting the affairs of the institution. When the bill providing for the board’s appointment was brought in, it met with strenuous opposition from the honorable senators who are now adversely criticizing the present measure, which, in my opinion, effects just such an improvement as the board was called into existence to bring about. I am sure that the bill will prove of great advantage to the primary producers. Whilst we are anxious that every section of the community should benefit by our legislation, I am confident that no measure designed to help the primary producer as this bill will do, could fail to confer a corresponding boon upon the artisan and the secondary producer. The proposal will enable the primary producer to spend more money than he has had in the past for extending his operations and adopting more up-to-date methods of cultivation, and the general improvement in his own conditions will be reflected in those of the .artisans employed by the manufacturers of agricultural machinery and other requisites of the producer. Moreover, it will enable .the primary producer to control his own produce through his own organizations. . Like other honorable senators who have offered words of criticism, I should like to see the bank deal with individuals. I recognize, however, that the measure represents a beginning in the right direction, and, as far as it goes, I am satisfied with it, in that it will enable the primary producer to control his produce through his own organizations. A few years ago, he could .not be induced to join any association for his own benefit, but to-day there arc many organizations in the States .that handle the ordinary products of the farm, and through which the farmer will, under this bill, be able to control his produce from the time it leaves his hands until it reaches the consumers. It will not be necessary for him in future, as it has been in the past, to part with his produce the moment it is marketable, whether it be butter, cheese, wheat, or anything else, but he will be able to store it and dispose of it to the best advantage. He has been obliged in the past to sell it as soon as possible to enable him to live. Now his organizations will receive an advance against the produce, and will give him out of the advance made whatever .sum they may .think proper. The organizations will be able to regulate the supply and distribution of the produce. Thinking people in Australia have long recognized the urgent need for action along these lines. No provision is made from year to year against the possibility of crop failures owing to droughts or other causes. It is within the recollection of most honorable senators that when droughts in Australia were very severe, lasting over a number of years, we were obliged to buy at high prices produce which was necessary for the existence of the people. If, as a result of the passing of 4 his bill, something is done to keep, from year to year, a reserve supply of produce so that Australia will never again be faced with the necessity of having to import wheat and other primary produce, it will be <©f great advantage to consumers and producers alike. It has been suggested that this and similar legislation is an attempt to coddle the farmer, but I should be very sorry to think that we .are ever asked to pass legislation that - can honestly .be described as an attempt to coddle any section of the community. This bill is intended to give to a very deserving .section of the community a form of relief to which it is justly entitled, and which it is in the best interests of the country to give. As every transaction carried out under the provisions of the bill will be of a purely business character, the risk of loss to the community will be minimized, as far as possible, and the interests of the bank, as well as those of the primary producer, will be safeguarded. Exception has been taken to the statement that the farmer is the back-bone ‘of Australia. I do not think any section of the community should be regarded as the back-bone of the country. Each set of industrialists is entirely dependent on every other section. No single section can last long without working in unison with every other section. It is very important that the farmers should be encouraged to gain from the soil sufficient, not only to meet the requirements of the people of Australia, but also to permit of export. We have passed, recently, bounty bills and other measures to permit of the better marketing of our produce. This bill will provide the means for rendering those measures more effective, “and more beneficial and profitable to the farmer and Australia .generally. We should not confine our efforts to markets already established. This bill will enable the farmers’ organizations to come into line for the purpose of exploiting other markets with tremendously beneficial results to the people of Australia. For instance, Australia has been very remiss in opening up markets in those eastern ‘countries which travellers tell us provide a wonderful opportunity for the disposal of oar produce. The legislation recently passed should have the effect of stabilizing .our primary industries, and maintaining higher rates of wages for the worker* .in -our secondary industries. This, in turn, should result in an increased demand for the produce of the farmers. Having regard to the wonderful conditions under which men live and work in Australia, * there should be no limit to the possibilities of our production; but we can progress only when men work in harmony with one another, and when they realize that no matter what their individual concern may fee, they are working in the best interests of the country only when they operate in combination with each other and with every desire to avoid disputes between one -section and another. The present Government has done more than any other government in Australia to assist towards that laudable end. It has made no attempt at any lime to reduce wages, cut prices, or interfere with primary or secondary production. On the contrary, its legislation has been designed to assist those who are taking part in the development of this great country of ours. Its legislation should go far to bring about more employment. ‘This in turn should induce more people to come to Australia, with a consequent increased demand for produce, clothing and manufactures of all descriptions, and, what is of far greater moment to the people of Australia, a reduction in the incidence of taxation, and, possibly, in time, a reduction in taxation itself. For all these reasons, and for many others which I could elaborate, I support this bill. One could paint a very glowing picture of what would be the position of Australia if all sections would work together as they ought to do. One very important effect of this legislation will be to free the primary producer from the middleman. I have no fault to find with the middleman. He may be a necessary part of our national make-up, but he invariably does better than the primary producer or the average consumer. At any rate, this bill will enable the farmers to organize among themselves and avoid the necessity of employing middlemen.. The share of the profits that is now taken by the latter would thus go to the producers themselves. The establishment of a rural credits department is only one of the extensions that will be made by the Commonwealth Bank from time to time. I urge those who are impatient and think that the bank is not progressing fast enough to realize that it is better that it should progress step by step to the goal we all have in mind. It is better that it should proceed on safe and sound lines rather than hastily launch out upon ventures new to 1?his and every other country. There is nothing more delicate in our national make-up than finance. Nothing is more calculated to bring disaster upon a community than undue interference with the wonderful, complex, and difficult-to-understand problems of finance. Therefore, it is well that the Commonwealth Bank and the Government should proceed gradually in seeking to extend the usefulness of the institution for the benefit of the prinia-ry producers and of every other section of the community.
.- I have been waiting to hear some honorable senator opposite express his approval of this legislation, which, containing, as it does, provisions that must be for the good of the country, is of the utmost importance to the whole community, I have been surprised to hear honorable senators opposite level criticism at this first attempt to do something of a ‘ tangible character to help the man on the land.
– It is better late than never. This bill should have been introduced years ago.
– The honorable senator and his colleagues have failed to realize that from 1914 to 1923 the ‘Commonwealth Bank was engaged, to a large extent, in work associated with the raising of money to meet our war obligations, and consequently had little time to devote to proposals such as this. I do not think the measure is perfect, but it is a beginning of what I hope will eventually develop into an extensive scheme under which all our producers -may be assisted by the Commonwealth Bank. Clause 3 restricts the operations of the bank in the matter of advances to certain, primary products enumerated, but advances may also be made on such other produce as may be prescribed. When the bank commences operations in the direction provided in the bill, it may be found possible to include other products which, at the outset, must inevitably be excluded. I agree with what Senator 3. B. Hayes has said to the effect that provision should be made as speedily as possible to extend the facilities to other producers, whose products should be included in the definition of “ produce.” One honorable senator interjected that the object of the bill is to advance money to those producing for export, but there is no such ‘ restriction in the bill. Some of the States have built up large commercial connexions with other States, as, for instance, Tasmania, which is doing a large business with New South Wales in potatoes, which should be classed as produce under clause 3. On many occasions, when there has been a glut on the Sydney market, potatoes have been sold at a price 25 per cent, below the cost of production ; but later in the year there has been a scarcity, and prices have risen to an exceedingly high level. If, by means of co-operation, the potato-growers could be assured of the necessary financial assistance from the Commonwealth Bank, they could hold their stocks until there was a shortage, and thus regulate the supply and price throughout the year. I do not suggest that advantage should be taken of the bill to enable the growers to inflate prices, but merely that it should enable them to obtain fair and reasonable rates. I endorse what Senator J. B. Hayes has said concerning the timber industry in Tasmania, where a majority of the timber mills <:are closed down, largely owing to lack of the necessary capital to enable the mill-owners to place properly seasoned timber on the market. The futility of marketing green or partly seasoned timber must be apparent. If those engaged in the industry were assured of financial help, to carry them through the season, they would be able to keep their racks filled, and timber users would be assured of a regular supply of properly seasoned material. In many of the buildings erected during the last few years, green timber has been used, and those who have erected homes have been compelled in many cases to incur further expenditure in effecting repairs. I should, therefore, like the Government to consider the advisableness of providing assistance to the timber industry under this measure. I have been astounded at the opinions expressed in different parts of Australia to the effect that we are impoverishing our forests by our sawmilling operations, and that it would be more advantageous to use imported softwoods than our own hardwoods. Any one making such state- ments must be ignorant of our forestry conditions. It is well known that only timber suitable for milling is cut, and if we had to rely upon imported soft timbers many millions of feet of marketable timber that can now be produced would rot in our forests. At a certain age trees are fit for milling, and if left, say, another ten years, the centre decays, although the exterior may appear to be sound. The only way to secure a proper system of reafforestation is to utilize to the best advantage the timber suitable for milling, and at the same .time plant young trees. During the past five or six years those engaged in farming, grazing, and other rural pursuits have found it very difficult to obtain the necessary financial assistance. I welcome the suggestion made to-day that at the earliest possible moment the credit foncier system should be introduced to enable farmers who have mortgages on their properties to obtain financial assistance through the Commonwealth Bank, as, I understand, farmers in Tasmania and other States, whose mortgages are about to mature, or have already matured, find the utmost difficulty in obtaining money. It has been exceedingly difficult to obtain advances from private banking institutions during the last few years, and when we remember that the Commonwealth Bank can safeguard its position by requiring the necessary margin before a loan is granted, no objection should be offered to this further proposal. The Commonwealth’ Bank would be utilizing the money which belongs to the people, and there is no better way in which it could be used than in the manner indicated. It is, of course, absolutely essential that it should be very careful that advances are only made on undoubted securities, because a loss to the bank would be a loss to the people. I trust the bill will receive the unanimous support df the Senate, and that during the next session the Government will extend the operations of the bank iri the direction I have indicated, and thus confer a great benefit upon deserving sections of the community.
– I have to thank honorable senators for the cordial reception given the bill. The Government cannot, of course. undertake to meet the wishes of everybody, but it is pleasing to know that there is a good deal of unanimity as to the desirableness of the general principles of the measure. Although there is not a great deal of criticism to answer, there are one or two points that were raised during the debate to which I wish to refer. In the first place the Deputy Leader of the Opposition (Senator Needham) said that under the existing act there is power to grant financial assistance to the rural producers. That is true; but. there is no provision in the existing act to supply the necessary funds. A little later the honorable senator quoted the section of the principal act which limits the power of the bank to issue debentures to £1,000,000, which would not go far in financing the extensive operations associated with the marketing of our primary products. I do not know why Senator Needham should take strong exception to the clause under which the Rural Credits Department can make advances on produce under the legal control of other banks, because there is nothing in this measure to compel producers to go to other banks. They could come to the Rural Credits Department through their associations if they wished to do so. If for convenience, or, perhaps, for the reason that they thought they could get better terms, they wished to go elsewhere, they should be at liberty to do so. In the long run, it will be in the interests of the primary producers for the Rural Credits Department to make advances to the private banking institutions. A primary producer who finds that it pays him better to obtain his advances from his own cooperative society, which deals direct with the Rural Credits Department rather than from private banks, will undoubtedly go to it. Senator Needham revived his old objection to the Commonwealth, Bank having been made a banker’s bank. That matter is quite outside the scope of this bill. I never could understand why honorable senators opposite took exception to our making the Commonwealth Bank what is called a banker’s bank. The amending bill which was before us last year certainly extended the functions of the bank in its relation to other banks, but did not take away one iota of its power to carry on general banking business.
– It enlarged its powers.
– That is so. Extra power was given to the bank, but its existing power was not weakened or circumscribed in the way that honorable senators opposite seem to imagine. It still possesses the powers conferred upon . it by the original Commonwealth Bank Act introduced by the Labour government. If there is any fault in it to-day it was in it originally.
– But intensified by the amending measure of last session.
– Not at all. The honorable senator cannot name a single section of the act passed last year which in any way limits the powers of the bank in regard to its general banking business. I invite him to search the act with the object of finding such a section, but I know that he will fail. The honorable senator claimed for the official Labour party the credit of the principle of this bill. In support of his claim he stated that the honorable member for Bourke (Mr. Anstey) moved to insert in the last amending Commonwealth Bank Bill, when it was before another place last year, an amendment on similar lines to the proposal now before us, and he took considerable pleasure in pointing out that Dr. Earle Page and his fellow-members of the Country party, as well as other supporters of the Government, voted against it. “What Mr. Anstey did on that occasion was to play an old political trick that had often been played before, and will be played again.’ Mr. Anstey knew that the platforms of the Country party and the Nationalist party provided for a rural credits scheme. As a matter of fact, the Composite Government, of which Dr. Earle Page is a member, was giving consideration to that very matter when the last amending Commonwealth Bank Bill was’ being drafted. It decided, however, to make two bites at the cherry. The provision of a rural credits scheme involved a totally different principle from that on which the last Commonwealth Bank Bill was based, and the Government decided to introduce two bills. Mr. Anstey introduced the amendment referred to by Senator Needham merely to secure for his party some slight political advantage by attempting to try to lead the public to believe that both the Country party and the Nationalist party, in voting against his amendment, had voted against a principle of their own platforms.
– He used, in his amendment, the identical language of the plank in the Country party’s .platform.
– The official Labour parly is not entitled to claim that this principle is peculiar to its platform. I think Senator Needham was unfair in his criticism of the associated banks in respect of the action taken last year to overcome a difficult financial situation.
– I was not unfair; I simply stated the facts.
– In my opinion, the honorable senator was unfair. He inferred that the difficulties that had to be met at that time were created by the associated banks, and that the associated banks were in some way responsible for the position in which Australia found herself in respect to her primary produce. Nobody with even the most elementary knowledge of the circumstances could say that, for they would know, first of all, that not merely Australia, birt practically every part of the British Empire was embarrassed. The trouble was primarily a question of exchange, but it was also a question of credits. Every part of the Empire that had exportable goods was faced with a difficult situation. South Africa, New Zealand, and also Canada to some extent, were in a like position with regard to that portion of their products that had to be sold in the European market. South Africa found a way out by means of her production of gold, and so practically pointed the way to the ultimate cure for the rest of the Empire. Undoubtedly it was the restoration of the gold standard that eventually remedied the situation. To say that the associated banks of Australia were responsible for the state of affairs that existed would be like saying that a fly on a wheel was responsible for the wheel going round. The associated banks did not create the trouble, and they were absolutely powerless to cure it. What was done at that time as a temporary means to overcome, or at least to lessen, the difficulty was that the Note Issue Board sanctioned a tem porary inflation of our note issue. Nobody pretended that it would be a permanent cure, but it was hoped that it would be a palliative. The additional currency was made available for use through the existing banking machinery. Honorable senators opposite seem to think that some injustice was perpetrated on the primary producers of this country because that course was adopted. Senator Gibbs said that £5,000,000 of additional currency was made available, handed to the private banks at 4 per cent., and retailed by them to the primary producers at & per cent, or 7 per cent. He argued, on that Basis, that- if the Commonwealth Bank could lend to the private banks at 4 per cent it could even more effectively lend direct to the primary producers at die same rate of interest. Such a statement shows an ignorance of the most elementary principles of banking, and of our existing financial machinery. The situation could be dealt with only by the whole of the financial resources of the Commonwealth. The money that was made available eased the position, but it only did so because it went through the’ private banks. If £5,00O,Q00 had been simply added to the currency resources of the Commonwealth Bank, it would only have been a chip in porridge, for the Commonwealth Bank, in its general banking operations then, was probably the smallest of the banks in Australia. What was needed was that the whole of the banks that were interested in the disposal of Australia’s produce overseas should have available sufficient currency to enable them to transact their business. The fact that the Note Issue Board made it available was beneficial, most of all, to the primary producers. Possibly, the private banking institutions made some profit out of their transactions.
– They certainly did.
– But it cannot be denied that many of our primary producers were saved from ruin because that money was made available at that time. Last year Senator Duncan, and, I think, Senator Guthrie, stated in this chamber, that unless additional currency was made available there would be no wool sales.
– There would certainly have been great difficulty in financing the wool clip.
– It would have been a calamity if the wool sales had not been held.
– That money saved the situation last year.
– While the banks may have made some profit out of the advance bo made, there is no doubt that the primary producers would have been seriously affected if this additional currency had not been made available. Apparently, Senator Gibbs thinks that the expedient that was adopted last year could be practised ad infinitum, It is quite easy to follow the honorable senator’s line of reasoning. He argues that if on one occasion we could add £5,000,000 to the currency, and lend it out at £ per cent, to meet an extraordinary contingency, we should be able to go on and UBe the printing press to overcome every financial difficulty. The answer to that argument is that the plan has been such a horrible failure in every country that has tried it - notably in Russia and Germany - that no sensible financial authorities will ever again attempt it. Senator Gibbs said that the Common-wealth Government ought to undertake a housing scheme. The time may come when it will consider it advisable to do so. but it would not be proper to introduce such a proposal into this bill. If a housing scheme is ever undertaken through the Commonwealth Bank a separate branch will have to be established to handle the business. Most, of the State Governments are dealing with housing. Western Australia has a Workers’ Home Board. The Government of South Australia is administering an Advances for Homes Act through its State Bank, and Victoria is working through the State Savings Bank. The criticism offered to the bill by Senator J. B,. Hayes was of a helpful character. He raised an interesting point in regard to -the use of the words “ produce “ and “ product,” and discussed whether tike word used at the read of the definition clause should not be “ product . “ I de not think there is very much difference in the -meaning of the two words. “ Produce,” in my opinion, is equally as wide in its application ;as “ product.” The term “ produce “ might be held to cover timber, for instance, for, after all, timber is the produce of a primary industry.
– Hay is not men- . tioned in the bill, but it is very necessary for farmers to be able to obtain advances against it.
– It was not necessary to specify every primary product, for the drag-net clause “ such other produce as is prescribed “ covers everything. Senator Payne referred to potatoes. They would come under that provision. There is a difference between timber and the other primary products that have been mentioned. The intention of the Government is that the Rural Credits Department shall deal with seasonal products, and timber can hardly be so described.
– Timber-getters have to carry over their stock for long periods!
-That may be so, but timber is not a seasonal product. Under one provision of the bill advances are limited to a period of one year, which obviously indicates that the proposal is to deal only with produce that is grown and sold in tie one year. Senator J. B. Hayes discussed the desirableness of .applying the Credit Foncier system to a scheme of rural development. That could not be done under this bill. A separate department of the Commonwealth Bank would be needed for that purpose. Some of the States are providing assistance of that description. The Western Australian Agricultural Bank, for instance, is doing magnificent work. Senator Lynch gave us an ininteresting comparison of the position of the wheat-grower in the United States of America and the wheat-grower in the Commonwealth, the comparison, as far as results were concerned, being very much to the disadvantage of -the latter, because of our greater distance from European markets. The honorable senator overlooked, however, that the central States constitute the principal wheat-producing areas in the United States of America, and that, therefore, wheat-producers of that country have to pay freight on about 1,000 miles of rail haulage to the sea-board, as against a comparatively short rail haulage in Australia.This extra charge, I suggest, more than offsets the difference in ocean freights on wheat between Australia and Great Britain, compared with similar freights from the United States of America. Another point raised by the honorable senator in criticism of the bill was that it contains no provision for advances being made against live stock. In answer to that, I may point out that the sale of live stock is not regarded as a seasonal trade. The sale of live stock goes on all the year round, and, moreover, it is a class of trade that is already dealt with by the bank in its general business.
– Will not an anomaly be created if the Rural Credits Department be prevented from rendering assistance to that class of settler who deals in live stock?
– A sheep-grower may get an advance on his wool, at all events.
– That, also, is a seasonal product. It may be argued, further, that in some States the export of meat is a seasonal industry. The killing season extends over a certain period of the year, and the meat has to be marketed within a reasonable time. The underlying principle of the bill is to render financial assistance to our primary producers to enable them to market their products overseas. We export meat, but very little of our live stock is exported on the hoof. I thank honorable senators for their friendly criticism and support of the bill. The various matters mentioned in the debate may be dealt with in committee.
Question resolved in the affirmative.
Bill read a second time and committed, pro forma.
Sitting suspended from 6.25 to 8 p.m.
– In view of the fact that a, certain inquiry is being held in Sydney, and certain persons have been called upon to account for their conduct, I consider it inadvisable at the present juncture to proceed with the discussion of notice of motion No. 1, standing in my name, in regard to a grave industrial disturbance. I therefore ask that consideration of the motion be postponed until the next day of sitting.
– Seeing that the matter with which the motion deals is sub judice, why not discharge it from the notice-paper?
– I want the persons concerned to have a fair trial.
That notice of motion No. 1 . be postponed till the next day of sitting.
Effect on Western Australia.
Debate resumed from 9th July (vide page 849), on motion “ by Senator Lynch -
That inasmuch as the Navigation Act imposes severe and burdensome restrictions on trade with Western Australia, and also in the coastal trade of that State, the Senate is of opinion that the compulsory clauses of that Act relating to trade and commerce be repealed until such time as the various interests engaged in the coastal trade are willing to accept the same terms and conditions, no more and no less, as those governing the activities and operations of the general body of citizens throughout the Commonwealth, or until the law compels the acceptance of such conditions.
That this resolution be transmitted to the House of Representatives with a request for its concurrence therein.
– A week or so ago I had occasion to reply to a proposal submitted in this chamber by Senator Ogden on lines somewhat similar to those of the present motion. The arguments that I then used will apply largely to Senator Lynch’s proposition. Senator Ogden’s motion, however, was unconstitutional in that it suggested that the coasting provisions of the Navigation Act in relation to the carriage of passengers should be suspended so far as Tasmania was concerned, whereas Senator Lynch’s proposal is that the suspension should apply to all parts of the Commonwealth. The subject of the effect of the Navigation Act has been reasonably and, I might say, almost fully debated this session, for we have had two motions dealing with it, and have also passed quite recently an amending bill. Reference has been made to the findings of the royal commission that was appointed to inquire into the operation of the Navigation Act, but I say again that the Government has not had an opportunity of fully considering the recommendations made. There are in reality three reports by the commission, and until the department has gone thoroughly into the matter, and the Minister also has considered it, the attitude of the Government on the question cannot be made known.
– Can the Minister say when the Government will be in a position to make an announcement?
– There are so many troubles facing the Government at the present time that it is impossible for me to say when it will be in a. position to come to a decision ; but as soon as normal - conditions obtain, the matter will receive the close attention that it deserves. The motion proposes to do away with all the privileges conferred by the Navigation Act.
– With a view to substituting something more reasonable.
– Whether or not an opportunity will be afforded to deal with that question this session I am unable to say, but I can assure the honorable senator, on behalf of the Government, that the recommendations of the commission will be carefully considered, with a view to studying the interests of all sections of the people. I ask, therefore, that the motion be not pressed at the present juncture.
Debate (on motion by Senator Duncan) adjourned.
Debate resumed from 13th August (vide page 1363), on motion by Senator j. B. Hayes -
That in the opinion of the Senate, all future grants for road works should be handed over to the State authorities for expenditure, without conditions, except that the money so voted should be economically expended and used for the purpose named.
That the Government is requested to consider this resolution in connexion with its proposals for future grants for road works.
– Before announcing the Govern^ ment’s intention regarding this motion, I desire to draw attention to one or two points that were mentioned by Senator J. B. Hayes in his very friendly speech. Among other statements, he said -
In Victoria there is an excellent body known as the Country Roads Board, and if it were entrusted with the expenditure of Victoria’s share of the Federal grant, better value for the money would be obtained than if the work were carried out by another authority. . . Its work is an earnest of what the Federal Government could expect if it handed its money over without conditions. I have no doubt that it would be equally well expended, and the taxpayers would be satisfied.
May I point out that this is exactly what is done, not only in Victoria, but in all the other States? Victoria, is not the only State with a roads board. Queensland and New South Wales have similar bodies, and South Australia has a roads authority of a similar nature, namely, the Engineer and Director of Local Government. In Western Australia and Tasmania, the work is entrusted by the State Governments to the Public Works Department. In every State,” the expenditure is wholly entrusted to the local authorities. They prepare and submit the schedules of roads on which the money is to be expended, and, on approval, carry out the work according to their own survey, plans and specifications, the only conditions imposed by the Federal Government being those in the Main Roads Act and the regulations regarding location, character of construction, and method of execution. Even in connexion with these regulations, I am assured, by the Minister for Works and Railways (Mr. Hill) that, on the advice or request of the State authorities, the very widest application is given. That this control has resulted in permanent benefit to the country is evidenced by the fact that from the two grants already approved, some 2,000 miles of durable roads have been constructed or are in course of completion. These roads will tend to alleviate the conditions of outback settlers, many of whom previously were practically isolated for months from their nearest railway station. It can safely be contended that had it not been for the Commonwealth grant, many of these roads, which are an absolute necessity, would not have been constructed for years to come, owing to lack of funds. In fact, various States have so advised the Minister for Works and Railways. Reverting to the passage from Senator J. B. Hayes’s speech, relative to the work of the Country Roads Board in Victoria, the following extract from that body’s annual report for 1924-5 is of special interest : -
This board, as the constructing authority for this State, desires to record its appreciation of the great value this Federal assistance has been in the provision of road facilities in portions of the State which for many years have remained unproductive and undeveloped, and also’ to record its appreciation of the courtesy and sympathy with which the Federal Director of Works has received and considered the proposals submitted to him by the board on behalf of this State.’
In the course of Senator J. B. Hayes’s remarks, he mentioned that he had recently inspected work being carried out on the Launceston-Scottsdale road. This work consists of what is known as the Sideling deviation, and was one of the works recommended by the Tasmanian Government. As in the case of all other roads being constructed in Tasmania as a result of the Federal grant, this work is being executed in accordance with the State’s own plans and specifications, and under its own direction. In submitting this proposal, the State Works Department advised as follows : -
The portion of this road, for which deviations are necessary, is 12$ miles. Some 5 miles was already metalled, and the remainder was roughly metalled many years ago, but is very narrow and has steep grades. The road serves some 80 square miles of country, a large area of which is first-class land, and the remainder good second-class land. The total estimated cost of completing the whole work Will be about £13,500. The present section, which is now under construction, is 91 chains long, and will, it is estimated, cost £2,337. The balance remaining to be completed is miles, estimated to cost £11,000.
Should the request that the minimum expenditure on each road be reduced to £500’ be acceded to, and applied to this road, ft will be seen that it would take 22 years to complete the work.
– The request of Tasmania is that it should have the privilege of spending as low a sum as £500 on any one road.
– I have no doubt that improvements could be made with regard to the conditions of the grant by meeting the .States in various ways. The speech by the honorable senator was of a constructive character, and the Government is always willing to consider helpful suggestions. As far as Tasmania is concerned, representations have been made from time to time that the conditions of the grant should be altered to meet the special needs of that State. It must be remembered that there are approved for construction in Tasmania, from the grant, 41 roads, the total estimated cost of which is many thousands of pounds. So far, the expenditure in Tasmania from the grant has been very light. During the first year that the grant was in operation, the expenditure was practically nothing, and even after two years have elapsed, and an amount of £50,000 has been voted by the Commonwealth to that State, only £10,500 had been spent to the end of June last.
– What grant has been authorized in addition to the £10’,50G al’- - ready expended I
– The department assures me that £50,000 has- been allocated to Tasmania,, and that there has been no delay on its part.
– There may be some money in hand. The Minister ought to show what amount has been approved in addition to the amount already spent.-
– Tasmanian senators cannot contend that so far the Federal grant has been responsible for interfering with the State Government’s annual grant of £45,000. During the first year the grant was in operation the expenditure by the State was- practically nothing, and even after two years had elapsed and an amount of £50,000 had been voted by the Commonwealth! to Tasmania,, only £10,500 had been spent to the end of June,. 1925. This meant that the State’s contribution to the roads put in hand under the Federal grant was only £10,500 in two years. However, I am advised by my colleague, the Minister for Works and Railways., who has- looked very seriously into the question, that he has received an assurance from the Minister for Works in Hobart that the Tasmanian Government intends to complete the roads already put in ‘hand from the Federal grant. Every State has. made overtures to have portion of the Federal grant spent on main roads already constructed.
– That is for the reconditioning of roads.
– Yes. The intention of the Commonwealth Government in affording this assistance was to give facilities to people outback to develop their properties in the way we would like to see them developed. Its main interest waa the construction of developmental roads to assist in developing new country and the natural resources of Australia. Up to the present the amount of the grant has foi- the two years totalled only £1,000,000. To have divided that small amount and spent part of it in constructing and repairing existing roads would not have been satisfactory, as the amount when so divided would have been too small for either purpose. The road problem is at present exercising the minds of central governments in many countries. The Commonwealth Government has given it its earnest consideration for some months past, and is at present formulating the policy which it proposes to- adopt in the future in regard to contributing towards the cost of the reconstruction and reconditioning of existing roads. When the policy is put forward at an early date I trust Senator J. B. Hayes will be satisfied with it. In the meantime, I ask him not to push his motion, because- the greater portion of the difficulties to which he has drawn attention will be met by the Minister for Works, and Railways in his. forthcoming allocation of the roads grant. I understand that most of the States have shown their appreciation of the way in which the Commonwealth officers have met them in regard to the present method of allocation, but the- Minister assures me that the question of reconditioning and reconstructing, existing roads will be fully considered in allocating the grant for the forthcoming year.
– Will those conditions be tabled when the road vote is under discussion?
– They will be set out then.
– If the new regulations are laid on the table when the roads grant comes on for discussion, we shall be able to take a. vote on the matter then.
– I shall advise the Minister to adopt that course. The Government is anxious to meet the wishes of the States in this matter so that the money provided by the Commonwealth will be spent to the best advantage.
– If the motion before the Senate is carried, and put into effect, it will necessitate an amendment of the Main Roads Development Act, under which about £1,000,000 has been appropriated for expenditure by the States on the development of main, roads. Of this amount, £650,000 had been spent to the end of the last financial year, leaving a balance of £350,000. To this balance the £750,000 to he voted this year has to be added, leaving a total amount of £1,100,000 for expenditure during the current year. It was clearly understood when the Main Roads Development Bill was agreed to that the money authorized by it to be expended would be spent exclusively in constructing new roads. It was never intended! that any portion of it should be used to improve existing roads. However, in giving effect to the provisions of the aci, it has been discovered that it would be a great convenience in some portions of the Commonwealth if the local authorities’ were given a freer hand in the expenditure of the money. I think that it would be a wise step to amend the act to permit of this being done. It looks all right on paper to suggest that the money should be spent entirely on new roads in the country where no roads exist, but I should imagine that the people in the States concerned are the best judges of where it should be spent. In New South Wales, this work is being done by a Main Roads Board, and I understand1 that there are similar constructing authorities in the other States. While I support the proposal to amend the act in order that the local authorities may have a freer hand in the expenditure of the money granted” by the Commonwealth, it never occurred to me that the work of making streets or roads was a function of the Federal Parliament. I am sure it was never contemplated by the framers of the Federal Constitution that the Commonwealth Parliament’ should have, anything whatever to do with. . the work of making roads. ‘ Road construction is a State function. .It is a circumlocutory method for the Commonwealth to collect money by taxing picture’ shows, and. raising revenue through Customs and excise duties, a land tax, and an income tax, and hand it over to localgoverning bodies to be spent on making roads. A very much better scheme has been evolved in New South Wales. In Sydney, it has been decided, in strict accord with the principles laid down by Henry George in his Canons of Taxation, to impose a fiat rate, without, gradations or exemptions, of id. in the £1 on the unimproved value of land. In the suburban and country municipalities and shires the rate is fd. in the £1. That is the main source of revenue of the Main Roads Board of New South Wales; but I dare say the authorities are very pleased to get finanial assistance from the Federal Government in order that they may not have the painful necessity of asking the people who own the land, the value of which is increased by the making of roads, to pay more taxation. To make the
Federal Parliament; a collecting authority, sud allow the local authorities to spend the money so collected, is a rather unusual way in which to conduct business. The decision of Parliament is embodied in an act which provides that the money collected shall be handed oyer to somebody else to spend in certain specified directions. Some of the beneficiaries, notably . those in Tasmania, believe that it could be more judiciously expended on a different basis, and, while I am entirely opposed to the whole scheme, seeing that: this Parliament has agreed to collect the money, and that other authorities should spend it. all I can do at the present juncture is to support the motion.
Senator C. W. GRANT (Tasmania) [8.331. - I also wish to support the motion moved by Senator J. B. Hayes, particularly owing to the conditions which exist in Tasmania, and the restrictions imposed which make it practically impossible for the money to be spent in the way we desire. As Tasmania is one of the oldest settled portions of the Commonwealth, most of its main roads have already been constructed, and our principal work is that of reconditioning. I was glad to hear the Minister (Senator Wilson) say that the Government is considering the question of allowing this grant to be used for reconstruction and reconditioning purposes, and if provision to that effect is made in an amending bill, under which further money is to be granted, the difficulties mentioned by Senator Hayes will be largely overcome. Under the existing arrangement, Tasmania has been unable to claim all the money to which she is entitled, but if the money granted could be used for reconditioning and reconstructing, we could obtain the full benefit of the grant. As some of the money thus voted has been expended on widening main roads which did not require widening, but needed reconditioning, money has been wasted. In other .instances, main roads’ construction has not been undertaken because the Tasmanian Government did not consider that it was justified in spending large sums on roads which would serve only one or two settlers. The State authorities are prepared to construct roads sufficient to meet the requirements of those using them, but the revenue is not sufficient to justify construction on a more permanent basis.
The minimum amount to be expended on one road is £1,000- £500 of which is contributed by the State and £500 by the Commonwealth. That is too high. The Government should consider the advisableness of reducing the minimum, and thus enable the vote to be expended to the best advantage. It is not always a satisfactory proposition from the States’ point of view to expend as much as £500 on one road. In view of the Minister’s assurance that the Government is giving careful consideration to the suggestions made, I trust Senator J. B. Hayes will withdraw the motion.
. -I am gratified to learn from the Minister (Senator Wilson) that representations repeatedly made to the Minister for Works and Railways (Mr. Hill) are being considered, and. I hope they will eventually have the desired effect. The Tasmanian people desire the grants made for the construction of roads to be used to the best possible advantage; they do not desire public money to be wasted. The conditions in Tasmania differ considerably from those in other States, and if the provisions of the act and the regulations framed under it are rigidly adhered to, the money may not be spent to the best advantage. Believing that our requests are likely to be carefully considered, I think Senator J. B. Hayes should accept the assurance of the Minister, and withdraw his motion. If it is found that our requirements have not, been fully met, further action can be taken.
– As one who has had considerable experience in municipal work I can fully appreciate the difficulties experienced by the authorities in Tasmania. I have, however, greater knowledge of municipal work in the mining centres, particularly that undertaken at Boulder City and Kalgoorlie. Those centres are about 3 miles apart, and the main road connecting them is under the control of a roads board. As road construction and maintenance is an important problem, particularly on the gold-fields and the south-west portion of Western Australia, the State authorities should have the opportunity to spend the Federal grant to the best advantage. Provision should be made in the direction of allowing the State authorities to spend a portion of the grant on reconstruction and reconditioning, as has been suggested, and it is gratifying to know that there is a prospect of some such concession being granted. I support the motion.
– I listened with interest to Senator J. B. Hayes, who, in submitting the motion, justified an amendment of the Main Roads Development Act 1925 in the direction of allowing the whole of the money voted by Parliament to be spent under the direction of the State authorities. The Minister (Senator Wilson) merely stated that the matter would be considered by the Department of Works and Railways.
– I gave a definite assurance that the suggestions would be carefully considered.
– I do not doubt the sincerity of the assurance of the Minister (Senator Wilson), or of the Minister for Works and Railways (Mr. Hill), but I do not think the main point of the motion was mentioned. It reads -
That in the opinion of the Senate all grants for road works should be handed over to the State authorities for expenditure ….
The Minister did not express any opinion on this vital aspect of the motion.
– I thought I did.
– I submit that when money is provided by the Commonwealth Government for- the benefit of the States they ought to be allowed to spend it as they think best. Western Australia is grappling with a serious problem in the development of the group settlements in the south-western portion of the State. The State officers had a difference of opinion with the officers of the Works and Railways Department as to whether the roads that link up these settlements are main roads. The difficulty is in defining the word “main.” In speaking on this matter previously in the Senate, I suggested that the trouble might be partly overcome at any rate if the act were amended and entitled the Developmental Roads Act instead of the Main Roads Development Act. I admit that in the expenditure of Federal money Federal supervision is essential, but as the Works and Railways Department is willing to accept the ex pert advice of State officers in connexion with ordinary public works which it undertakes in the States, it ought also to be prepared to accept the expert advice of the engineers of the various States in connexion with road work. I suggest to Senator J. B. Hayes that he should allow the motion to go to the vote. We ought to adopt it. It would then, in some degree, be an instruction to the Minister of Works and Railways. Seeing that, in the future, much greater sums of money will - or should - be spent by the Federal Government on road work in the various States, it is essential that we should provide that it shall be expended as economically and as effectively as possible.
– I thank the Senate for the sympathetic way in which it has received and discussed the motion. Naturally, I was very interested in the Minister’s reply. I should like to make it quite clear that nothing was further from my thoughts than even the semblance of an idea of trying to create feeling between the Federal authorities and the Victorian Country Roads Board. I knew nothing whatever about the negotiations that had taken place, or the business arrangements that had -been made, between the Works and Railways Department and the Victorian Country Roads Board. I simply referred to the board as a capable and estimable body that was doing splendid work in Victoria, and as an illustration of what capable State officers - in my mind, more capable than many of the Federal officers - can do. I trust that the Minister will accept this explanation. He referred to the great benefit that had accrued to the people by reason of the expenditure of the Federal roads grant in the various States. I heartily agree with his remarks in that connexion. I have said previously that the Government could not have designed a better method of distributing surplus funds. Road work is most important in all the States. I still think, however, that a better method of allocation, but not necessarily of expenditure, could be adopted. In moving the motion, I referred to a road- in my own district which was being splendidly constructed by a good gang of men under a capable overseer, but I pointed out that the money could have been spent more advantageously in other places in the district. 1 am not in the confidence of the authorities in this instance, but 1 believe that the conditions attached to the grant were responsible for it being spent in that place. I was more than a little surprised and sorry to hear the comments made !by the Minister on my suggestion that the minimum expenditure on a given work should be reduced from ?1;0Q0 to ?500. He said that his officers had advised him that if only ?900 could be spent on a given job it would take ‘22 years to construct a road that cost ?11,000. A child with the most elementary knowledge of multiplication could have reckoned that. It is apparent that the officers quite misunderstood my point. I did not suggest that the maximum expenditure should be ?500, but that the grant should be made under such conditions as would enable works which were estimated to cost less than ?1,000 to be undertaken. The departmental officers might have given me credit for better sense than to make such a proposal as they have discussed. I quite understand that the object of the Government in fixing a minimum of ?1,000 is to prevent the money being frittered away in dribs and drabs’; but in a State like Tasmania, where 7,000 or 8,000 miles of metal roads, containing many -dangerous bends and bad corners, have been constructed at a cheap irate, the expenditure of a mud less sum thaw even ?600 would be most use f ml, and fulfil the objects of the “Government. At a recent deputation to a State Minister in Tasmania reference was made to the Huon-road , which lias a very dangerous bend in it.
– Two people were killed there not long ago.
– That is so. I suppose the only reason that other fatal accidents have not occurred there is that the danger is well known, and extreme caution is exercised by those who use the road. The Minister, in a sympathetic reply to the deputation, said that it was hard to use the Federal grant to give relief in such cases3 because of the conditions attaching to it. The expenditure of less than ?500 would remedy that danger in the Huon-road. In hundreds of other places in Tasmania the expenditure of small sums in work of that character would be much appreciated. Local governing bodies which have no funds of their own to devote to such work would consider small grants from the Federal Government a veritable godsend. I trust that the conditions of the grant will be liberalized at least in the case of Tasmania. I was pleased with the concluding remarks of the Minister. I understood him to say that he would recommend to the Minister for Works and Railways that the regulations governing the grant should be tabled in Parliament when the bill is brought down, so that members would be given an opportunity to discuss them; that in the case of Tasmania at least, and probably also in respect to the other -States, the grant should be made available for reconstructing and reconditioning roads; and that the State authorities should be given greater power to determine where the grant should be spent. Am I correct in taking that to be the gist of the Minister’s reply?
– Yes, very largely.
– In that case honorable senators will have an opportunity of discussing this matter again. The Government has evidently decided that the grant shall in future have a wider application, for I take it that the Minister consulted the Minister for Works and Railways (Mr. Hi 13) before making his reply. We are one in desiring to see this money spent economically and where it is most Heeded. Im the circumstances I ask leave to withdraw my motion.
Motion, by leave, withdrawn, and order of the day discharged.
Debate resumed from 13th August (vide page 135.3), on motion by Senator J. Grant -
That the hill he mow read a second time.
– I am in agreement with the object of my honorable colleague in seeking to amend the principal act. I understand that, under it, the exemption, in the case of estates left to widows, is ?1,000, and the probate duty payable is two-thirds the amount paid by other beneficiaries. If the bill foe agreed te, the exemption will be raised to ?5,000. If the mother of a family dies, the father., as die breadwinner, is able to continue his ordinary avocation; but if the father dies, the widow and her family are frequently in straitened circumstances. The
Minister (Senator Pearce), in opposing the measure, said that, ifit became law, therevenue would be seriously depleted. If the exemptionwere raised to £5,000, irrespective of the value of the estate, possibly the revenue would suffer appreciably, but since the purpose of the bill is to limit the exemption to estates of the value of £5,000, there is much to commend it. Estates above that value will continue to be taxed in the ordinary way under the principal act. The bill will certainly benefit persons who should have a strong claim upon our sympathy, and it will not seriously deplete the revenue. For these reasons, and for others which I could mention, I support this bill.
– In opposing the bill, the Minister (SenatorPearce) stressed the fact that, if agreed to, about 70 per cent. of taxable estates would be affected. But he was unable then to tell us, and I have been unable since to ascertain, exactly to what extent the revenue would suffer. To make quite certain that it will not seriously interfere with the finances, I propose if the second reading be carried, and the bill goes into committee, to move for the addition of the following proviso : - “ The provisions of this bill shall not apply to any estate, the value of which exceeds £5,000. The total number of estates entered for probate in1920-21 was 5,266, and in 1921-3 5,311. In the latter year, the total loss of revenus would not have exceeded £82,774, assuming that all the estates under £5,000 had been left to widows. We know, of course, that a large proportion of the estates are not left to widows, and therefore therevenue should not suffer to the extent ofmore than about £50,000. The Income Tax Commissionerdoes not tabulate his information in such a way as to enable him to say how manywidows would be affected by the bill, or the extent to which the revenue would suffer. It is within the knowledge of honorable senators that, in the ease of small estates left to widows, considerable difficulty is frequently met with in finding the necessary cash to meet the legal charges. Sometimes first and second mortgages have to he given, and an estate becomes so involved that a widow is fortunate if it ever emerges from the hands of legal advisers. Already there is an exemption of £1,000, and, in the case of estates left to widows, the probate duty is two-thirds of the amount paid by other beneficiaries. The bill is in consonance with the general trend of public opinion. Insome of the State Parliaments, and also in this Parliament, representations have been made for the payment of pensions to widows. In view of the fact that the revenuewill notbe seriously affected, and because the finances are in a flourishing condition, I hope that honorable senators will support the second reading.
Question - That the bill be now read a second time - put. The Senate divided.
Majority … 5
Question so resolved in the negative.
Senate adjourned at 9.18 p.m.
Cite as: Australia, Senate, Debates, 3 September 1925, viewed 22 October 2017, <http://historichansard.net/senate/1925/19250903_senate_9_111/>.