10th Parliament · 1st Session
John Newlands) took the chair at 11 am. and read prayers.
Conversion of Gauge. Senator GRANT. - Can the Leader of the Government . in the Senate (Senator Sir George Pearce) say if it has been decided to convert the gauge of the Perth to Kalgoorlie railway to 4 ft. 81/2 in., and if so, when was that decision reached?
The PRESIDENT (Senator the Hon. Sir John Newlands). - I have received a communication from Senator Sir Henry Barwell intimating that he intends to move the adjournment of the Senate to discuss a definite matter of urgent public importance, viz. : - “ The action of the Government in charging a tariff duty on empty wine casks of Australian manufacture which having been exported with Australian wine are afterwards reimported to Australia for re-filling.” hour honorable senators havingrisen intheir places in support of the motion,
Senator Sir HENRY BARWELL (South Australia) [11.4]. - I move -
That the Senate at its rising, adjourn till Tuesday next at 10 o’clock a.m.
I submit this motion to give the Senate an opportunity to discuss a matter of urgent public importance, namely, the action of the Minister for Trade and Customs in charging an import duty on wine casks of Australian manufacture, which, having been exported from Australia, as containers for Australian wine, are re-imported into Australia for the purpose of re-filling with Australian wine and then being sent abroad again. The custom has been to export Australian wine, principally to London, in Australian casks. It is bottled in bond, and the empty casks are then returned to Australia with a certificate containing a declaration that they are being returned for the purpose of re-filling and reshipment overseas. The same casks have been used eight or nine times without recoopering, and as many as a dozentimes with a little re-coopering. Those who know anything about the industry will realize that it is preferable to export wine in sound second-hand casks, because the wood of which they are made, is well seasoned and they do not leak. The point I wish to stress at the outset is that the casks in question are of Australian manufacture, and are used for the purpose of exporting Australian wine. When emptied in Great Britain, they are returned to Australia for re-filling and again shipped abroad. Until quite recently the casks were re-admitted to Australia free of duty, but a month or two ago a duty of £1 9s 9d. per cask was imposed, although the second-hand value of the casks in London is only 7s. 6d. each. I had a conference with the Minister for Trade and Customs (Mr. Pratten) at which the Collector of Customs was present, but I could not ascertain on what basis a duty of £1 9s 9d a cask was fixed.
Senator Sir HENRY BARWELL.I shall refer to that in a moment. When the duty was first imposed, inquiries were made in Adelaide, and a reply was received to the effect that the duty was placed upon the empty casks in consequence of representations made to the Minister for Trade and Customs by the Coopers Union, the representatives of which maintained that the reimportation of the casks involved an interference with the trade in which they were engaged. The case is put very clearly by a leading wine exporter in this way: -
We are probably the oldest exporters of South Australian dry wine to London. We have never benefited by the bonus, and only trade in a high-class wine. Our recent system and the one our clients in London have become accustomed to is, to ship the wine to London in Australian-made hogsheads. The wine is bottled in bond, and the casks returned, with a declaration that they are the same casks, to be refilled and returned. This has worked well until now, but the last lot of hogsheads returned have been subjected to a duty of £1 9s.9d. each, although their value in London is only about 7s. 6d. (seven shillings and sixpence). On inquiry at the Customs Office,I am informed that casks may be admitted, duty free, for re-filling provided it does not interfere with industry. It is now claimed that by using the casks more than once it is interfering with the coopers’ industry - thus, the duty. As a loyal born Australian, I am honestly ashamed to write to reputable people in London, and explain that J. am forced to put up the price of my wine Ad. per gallon to make useless work fora few coopers in Australia. It would be more sensible to waythe coopers their wages, and burn the timber, than to scrap good casks, and make others.If a regulation were brought in, to prevent persons wearing boots more than once, to give work to the bootmakers it would be recognized as an act of lunacy, yet the two cases are on all fours. I only ask the right to use my casks during their natural lifetime.
When the matter was brought forward I looked up the Customs Act and regulations to see what power the Minister possessed. I find that a portion of regulation 111 reads : - 111. ( 1 ) The conditions under which goods the produce of Australia may be brought back to Australia free of duty, shall be as follows: -
the Minister must be satisfied thatthe bringing back of the goods will not unfairly disturb the market for similar goods in Australia generally, or in the place where the goods are proposed to be landed.
The claim made by the Coopers’ Union, which was supportedby the Minister, was that the re-importation of these empty casks was an undue interference with the coopering industry. The exporters claim that the casks can be used at least ten times on an average, which means that if they are not returned the work of the ‘coopers will be increased tenfold. I saw the Minister for Trade and Customs, and found him entirely unsympathetic. He advised me not to stir up the matter as it would not be in the interests of those engaged in the trade. He said the Government was only getting back a little of what it was paying in the form of bounties which, for 1925-26, amounted to £220,000. Apparently the Minister overlooked the fact that the amount paid in excise on spirit used in the fortifying of these wines, amounts to over £1,100,000 for the same year. 1 placed the whole of the facts before the Minister, who held out no hope of the duty being remitted. He said that he would go further into the matter and communicate with me on the subject. I have now received his reply which is as follows : - 11th November. 1927.
Referring to your representation in connexion with the question of the admission, free of duty, of empty returned casks brought back to Australia by Mr. H. D. Young for refilling with Australian wine, I desire to inform you that it was the practice until recently for returned empty casks, imported for refilling with Australian wine, to be admitted free of duty or upon deposit of duty which was refunded upon exportation of the casks within six months.
Under the Customs Regulations and By-laws, the admission of such casks free of duty is permissible only if the Minister be satisfied that the bringing back of the goods will not unfairly disturb the market for similar goods generally in Australia or in the place where the goods are proposed to be landed.
Protests have been made to this department by representatives ‘ of the coopering industry against the granting of concessions in connexion with the reintroduction of empty returned casks and after full inquiry into the matter, it was felt that the department was not justified in continuing to permit the admission, free of duty, of returned empty casks imported for refilling with Australian wine.
With regard to the question raised as to duty being charged on the Australian and not on the English, value of the casks, I desire to state that no documents were available as to the value and the sum of £14 17s. was tendered as a deposit of duty by the agents, Geo. Wills & Company Limited, subject to later adjustment.
According to a letter which I received this morning the last paragraph of the Minister’s letter is incorrect. George “Wills & Co. Ltd. contested every payment. Finally the amount stated was tendered hy them as a deposit, and accepted hy the department. In a letter which I have received to-day, Mr. Young, of Kammantoo, writes : -
Many thanks for the trouble you have taken over the cask fiasco, lt has got me a small refund on one small parcel which they were contesting, but the fact remains that I have had to cable to England to stop all further shipments, and that this is preventing my usual orders from coming along. This is interfering with the wine industry on which the coopers depend.
I should like honorable senators opposite to consider that point. Although the imposition of the duty is the result of representations made by the Coopers’ Union, in order to assist the coopering industry, the action of the Minister will seriously affect the industry upon which the coopers depend for their existence. Mr. Young’s letter continues : -
When the London merchants realize that they have to pay three times the ordinary price ;for casks and buy new ones every time, It will certainly cool their ardour mr Australian wine.
The absurdity of the whole thing must be apparent to honorable senators. It would be as reasonable to say that no man shall wear a collar more than once, because by so doing he is taking work from collar makers, or that, in order to provide work for Australian bootmakers, a pair of boots shall not be worn more than a certain number of times.
These used casks are better for storing wine than new ones would be; yet, because their entry free of duty might, it is alleged, interfere with an industry in which a few men are employed, they are no longer to be admitted free. I should like to know whether the Minister or the Coopers’ Union is controlling the Trade and Customs Department. If the Minister is in charge, is he acting in the interests of the coopering industry or of the whole community? Evidently the Government considers that the wine industry is deserving of, .assistance, because for some years it has paid bounties on the export of wines. The Minister said that by imposing duties on returned empty casks the Government was only getting a little of its own hack. Is that the policy of the Government - to give with one hand and to take hack with the other? The South Australian Vignerons’ Association has informed me that this duty will represent a wastage of £66,000 this year. The casks, if sold in London, will bring only 7s. 6d. each.
Senator Sir HENRY BARWELL.No. It is based on the assumption that the present trade will continue. It is estimated that this year 2,000,000 gallons of wine will be exported. On that quantity the wastage will he £66,000. That burden will fall upon the wine industry in Australia, or be passed on to the consumers. The result is already apparent in that orders are not coming forward to the same extent as previously.
Senator Sir HENRY BARWELL.That would be just as reasonable as to charge duty on returned empty casks.
Senator Sir HENRY BARWELL.Yes. I shall say no more; I shall not indulge in a trenchant criticism of the Government. , The unvarnished facts which I have given speak for themselves.
I ask honorable senators to show clearly that the action taken by the Minister does not meet with their approval.
– I have heard nothing officially from the Viticultural Council of South Australia about this mutter; but I feel so strongly concerning it that I must support* the remarks of Senator Barwell. I am indeed surprised that the Minister for Trade and Customs should have said that in imposing this duty the Government was only getting a little of its own back. > I remind the Senate that, although during the last three years bounties have been paid on wine exported, the excise duty on the spirit used for fortifying that wine represents a much greater sum of money.
– What amount has been paid as bounty on wine?
– I have not the figures with me, but the honorable senator may find them in a recent issue of Hansard, in reply to a question I asked.
– The bounties amounted to about £200,000, whereas the excise duty totalled about £1,100,000.
– That excise duty has to be borne by the wine industry. The Minister now proposes to place a further burden upon it. The Tariff Board in its last report admits that increased duties result in higher prices being charged for commodities. Then we have Arbitration Court awards and Wages Boards determinations, which further increase the price of commodities. The result is that costs of production continue to rise until further duties are sought. The cost of production in Australia is now so great that it has been found necessary to assist some of our primary industries’ by the granting of bounties. The cost of production in Australia is so high that only about 4 per cent, of our exports represent manufactured goods.
– The honorable senator will not be in order in proceeding further. along those lines.
– It is now proposed to place a further burden on the wine industry. That is ridiculous. The action.’; of the Minister -is ‘uneconomic. The Government has appointed a development and Migration Commission in order to-
– The honorable senator must confine himself to the motion before the chair.
– I was pointing out that this duty represents an additional burden on the wine industry, and that, instead of increasing cost9, the Government should make every effort to reduce them to the lowest possible level, so that our wine may have a reasonable chance in the world’s markets. Not long ago the Department of Markets and Migration was created and placed under the control of a Minister. More recently the-Development and Migration Commission was also appointed. Included in its duties is that of finding a way by which our produce can be marketed more cheaply. Yet, instead of allowing Australian-made second-hand wine casks to be used when returned foi refilling, the Government is practically prohibiting their use by imposing this heavy duty on them. That will interfere with the successful marketing of our wines. The Minister justifies his action by saying that it will provide work for Australians and build up an Australian industry. If we ruin the wine industry, the workers of Australia will suffer more than if empty wine casks are admitted free of duty, even though that may affect a number of coopers. Senator Barwell threw on the members of the Coopers’ Union the whole blame for having applied for the increased duty. I do not know whether they are solely responsible. Recently a large exporter of wine in Adelaide informed me that he could not get casks from cooperages because he had offended influential men in the wine industry through having advertised his wines in London at a certain price. The association to which those men belong, though not large, is very powerful. Honorable senators will agree that if an exporter of wine cannot get casks, he cannot export wine. By their control of casks certain men have a control on the export of wine. These men are. on the Viticultural Council, advising the Government on the growers’ behalf but the growers’ interests are that second hand casks be procurable. The Government should take steps to ascertain whether the true position of the industry has been placed before it, or whether other influences have been at work. Giving evidence before the Tariff Board, Mr. Bagenal stated that Australian cooperages do not, even use Australian timbers in making wine casks. The following statement by Mr. Bagenal appeared in the Australian Brewing and Wine Journal of 31st March last: - 1 understand there is a movement on foot to ask for an increase in the duty on oak staves, and I wish not only to oppose this application, but to ask that the present duties shall be removed. My reasons are as follows: - It has been found after much experiment that no Australian timber which is available is suitable for the exportation of the fortified sweet wines which are now being shipped under bounty. If suitable timber were obtainable it would bc used in large quantities.
In the manufacture of wine casks it is important that the staves should be uniform in quality. One bad stave will spoil a cask. Since Australian timber is unsuitable it is not being used for this purpose, rf it were an economical proposition to prohibit the return of the empty casks there might be some justification for the action. As Senator Barwell has pointed out we might with equal justification prohibit a man from using a linen collar twice because such a prohibition would mean more work in Australia for Australian workmen or go even further and prohibit the use of all secondhand goods in order to make more work in manufacturing and new goods.
– The debate is not without its interesting and humourous phases. It provides an illuminating lesson of the folly of going to extremes in matters of public policy, and is a striking illustration of the truth of the adage that even a worm will turn. Further, it brings into relief the folly of creating an idol of ungainly proportions. No member in this chamber did more than Senator ‘Barwell to place the Minister for Trade and Customs (Mr. Pratten) in his present powerful position as a dictator in Australian industry. When the last tariff proposals were under discussion in this chamber some of us hoped that Sir Henry Barwell would assist us in our efforts to ease the burden that had been placed upon primary producers in this country for so many years.
But on nearly every occasion, when a division was called, the honorable senator crossed the chamber to vote with tile Government to crush the minority who wished to see a reasonable measure of justice apportioned to the people. Now the chickens are coining home to roost and we gather from what Senator Barwell has said, that some of the chickens are roosting in South Australia. I therefore feel it my duty to remind him that the time to apply the remedy was when the tariff was under discussion. Parliament then had the opportunity to take such action as would prevent Mr. Pratten from entrenching himself in his present strong position.
– The Minister for Trade and Customs is acting under regulations.
– Over and over again, Senator Barwell argued that the importation of commodities meant the displacement of similar commodities which could be produced in Australia; and in support of his belief he was always to be found voting with the majority in favour of imposing heavy duties.
– I did nothing of the kind.
– I invite Senator Barwell to read the Tariff Board’s latest report. As I said, we looked to him then as the rising hope of the reform party in this chamber. But we were disappointed. Sir Henry Barwell did much to make the Minister for Trade and Customs virtually the master in the industrial life of this country. I do not blame Mr. Pratten so much after all. He is but the creature of this Parliament and certainly he received every encouragement from Senator Barwell who now rises to denounce him. Surely the honorable senator is making a mistake in directing attention to the position thus early in the piece. He should allow Mr. Pratten to continue along his present course of folly. Time will effect a cure. The honorable senator’s interruption of the business will only postpone th*e necessary reform. Why should Sir Henry Barwell seek now to take the bread and butter out of the mouths of a small band of Australian coopers by suggesting that returned empty wine cases should be allowed in free of duty ? For years we have been saying what Senator Barwell is now advocating, and during the tariff debate we looked, but in vain, for assistance from him. He was then shouting with the multitude. Now he is alarmed. He finds that the Frankenstein which he helped to create, is about to devour him. He wishes these empty wine casks to be allowed in free of duty. It is a long road that lias no turning, but happily the Tariff Board’s latest report is pointing the way to the turn. It indicates clearly that for some time now we have been travelling along the wrong path. The view of the minority in this chamber with regard to the fiscal policy of the Commonwealth has not always been treated with respect because our numbers have been few. Always there has been plenty of ventilation in the vicinity of these seats, and often we have looked with dismay at the crowded ranks behind the Government. Sir Henry Barwell during the tariff discussion was always one of that solid phalanx. By his attitude during that debate he greatly emboldened the Minister for Trade and Customs to take up his present attitude. But it is somewhat comforting to find another Daniel come to judgment. Truth cannot be utterly submerged for ever. We now have the Tariff Board, a Government instrumentality, telling us that it is about time we took serious thought as to where we are going. Senator Barwell is one of the JohnnycoRielately’s in this Parliament. . We who had been here before him looked to him for assistance when assistance would have been useful, but we were disappointed. Now that the chickens are coming home to roost in South Australia he is perturbed. But he thinks only of South Australia, whereas we, who for long have been in opposition to the rising tide of protection, have all along been thinking of the Commonwealth as a whole. Senator Chapman, another political fledgling, has thought fit to chide us on other occasions. Now he, too, dares to throw mud in the face of his own idol. The honorable senator would do well to concede to the minority in this chamber the same liberty of thought which we are prepared always to concede to him. I have no doubt that he will learn his lesson in time. Taking it all in all the motion, as I have said, is not without its humorous aspects. It is some comfort to us to know that at last we are being vindicated. The Tariff Board’s last report clearly shows that this and preceding governments have, by means of Customs duties, been throttling industry. I say therefore that the time has come for us to re-examine our fiscal policy. We should no longer ignore the danger signals. It is nice to have this eleventh hour conversion on the part of Senator Barwell. It is a pity that he did not reform before he had run his wild career, but -
The vilest sinner may return.
In what he said to-day, Senator Barwell may not have been all wrong, but he was more wrong than right. After much laborious effort the Prime Minister (Mr. Bruce) succeeded in persuading the British Government to grant preference to certain products from the overseas dominions. That was, if I may say so, a herculean task. Now we find Mr. Pratten nullifying the benefits of the policy by imposing Customs duties on returned empty Australian-made wine casks! The imposition of this unwarranted duty, so we are told, means an increase in the price that must be charged for the wine, because other casks of Australian material and made by Australian workmen must take their place.
– Are the casks made of Australian timber?
– I imagine that they are. Some years ago, the Western Australian Director of Forests, in ,a report to his Government, stated that our despised bluegum timber which is burnt by the million feet every year, was recognized by French vignerons as equal to the best for casks for the holding of wine. Therefore, I must conclude that the casks are made by Australian workmen of Australian timber. Even the hoops, the nails, and the clouts, are Australian. Senator Barwell, not I, is ^ responsible, with others, for the present policy.
The PRESIDENT (Senator the Hon. Sir John Newlands). - The honorable senator has exhausted his time.
– After the debate that has taken place this morning honorable senators will agree that the old saying, “ Empty vessels make the most sound,” is one worthy of all acceptation.” The discussion has been based upon the charging of a duty on returned empty Australian-made casks that are used in the export of wine. Senator Barwell confined his attention to the duty charged upon a few casks. One would have thought that a very large sum was at stake; but the fact is that only £14 17s. is involved-
– I gave that as. only one instance of what is the general practice.
– This is the only complaint that has reached the Department of Trade and Customs.
– I am complaining on behalf of the whole industry.
– I” may say that this particular charge is still under consideration, because some doubt exists as to whether the officers of the department in South Australia did not charge duty on a value greater than should have been- assessed. Senator Chapman dealt with the wine industry generally. Any one who was unacquainted with the position could not fail to gather from his remarks the impression that the wine industry had not been justly dealt with by this and other Governments. I may, therefore, very profitably devote a minute or two to the consideration of what has been done under the tariff and our bounty acts to help the wine industry. The duty on still wine in bulk is 12s. 6d. a gallon British, 12s. 6d. a gallon intermediate, and 14s. a gallon general. In bottle, it is 15s., 15s., and 18s., respectively. The biggest part of the sweet, wine exported was sold until recently at from ls. to ls. 6d. a gallon, f.o.b. If similar wine were imported in bulk, it would have to pay a duty of 14s. a gallon. It is clear, therefore, that the protection which is afforded to the wine industry under the tariff amounts to several hundred per cent.
Senator Chapman also said that the amount which was collected by way of excise duty on the spirit that is used in fortifying wine, exceeds the amount that is received by the industry by way of bounty. Almost every government in the world holds the view that the consumers of alcoholic beverages should contribute by way of excise and customs duties to the revenue of the country. Australia imposes an excise duty on not only the spirit that is used in fortifying Australian wine, but also on beer, as well as whisky, brandy, gin and any other spirit that may be manufactured in this country. The excise duty on beer is ls. 9d. a gallon. Beer contains from 6 per cent, to S per cent, of alcohol. The alcohol in our fortified wine averages about 34 per cent. and. the excise on the fortifying spirit in a gallon of this wine amounts to ls. 3d. Two and a half gallons of that wine contain as large a quantity of alcohol as one gallon of proof spirit, upon which is charged an excise duty of 30s. a gallon. Therefore, I think it will be admitted that wine Ls treated very liberally in comparison with beer and spirits.
– Is the question before the Senate the duty on returned casks or wine?
– I am dealing with the wine industry generally, because the speeches that have so far been delivered have gone far beyond the limits of the question that was raised by Senator Barwell.
– I ask the Minister to confine himself to the motion.
– In passing from the general to the specific question I merely wish to say that the .bounty paid on the wine exported last year amounted to £442,000, and that this year it will probably be about £500,000. Senator Barwell read correspondence that he had received from the Minister for Trade a.nd Customs (Mr. Pratten), setting out the law relating to this matter. It is necessary for us to take into account relative industries. It will be admitted, I think, that coopering, equally with the growing of grapes, is a relative industry. The industry has been fostered in the interest of the growers of grapes and only very slightly in the interest of importers. Senator Barwell and Senator Chapman both failed to show that what has been done by the Department of Trade and Customs lias affected adversely the interests of those who are engaged in the production of the grapes from which the wine is made. In arriving at the amount of bounty that was desirable, consideration was given to the cost of the casks - not those which could be used a number . of times, but new Australian casks. Senator Barwell and Senator Chapman must know that the whole of this trouble has arisen out of the strenuous efforts that have been made by wine exporters to get their wine out of the country before the end of August in order that they might benefit from the bounty of 4s. a gallon, and in addition, obtain the very material advantages thai accrue from the increased preference which is being given by the Imperial Government. The law on the matter is plain. The Minister for Trade and Customs must be satisfied that the bringing back to Australia of any goods will not unfairly disturb the market for similar goods in Australia generally or in the place where it is proposed that they shall be landed. That is not a new regulation; it has been operative for a number, of years. It has been, strongly represented that the importation of these casks in such large numbers is an interference with the coopering industry, which is one of considerable extent. We have in Australia cooperages that are capable of turning out several thousand casks a month, the majority of which are made from imported timbers.
– A duty is paid on that timber.
– A comparatively low duty of ls. a hundred staves undressed and 4s. a hundred when partly dressed. The wine exporters claim that casks that are made of Australian timber are not suitable. I cannot conceive of a.ny reason for declining to protect the coopering industry. No rubber is grown in Australia, yet the manufacture of rubber goods of various descriptions is protected, and a very important industry has been built up.
– That is done by forcing upon Australia uneconomic methods of marketing.
– The wine industry has never been in a more prosperous condition than that in which it finds itself to-day. The British preference was doubled only a few months ago. Considering all the circumstances, but especially those for which this Government is responsible, and for which it must be admitted that the Minister for Trade and Customs should receive some credit, the wine industry, far from being hardly dealt with, is most generously treated.
– The discussion on this subject has suffered a good deal from the introduction of much extraneous matter. The main point is that .the Minister for Trade and Customs has taken a step which has resulted in penalizing the wine industry to the extent of Sd. a gallon on the sale of wine in England. We have to work out a sum in our minds to see whether that disadvantage is outweighed by a corresponding benefit gained by the coopering industry. Bearing in mind that, in spite of the preference, we have to meet very many extremely powerful competitors in Great Britain, it seems to me that the imposition of a price such as is caused by this quaint, I might even say grotesque, class of protection, is likely, to kill the wine export industry, unless the government with its desire to help everybody, including itself, wishes to raise the bounty on exported wine by 8d a gallon. .1 do not know whether that is the intention of the government.
– Can we get over the difficulty by asking Great Britain to give an additional preference of Sd a gallon?
– I do not know that we could get over the difficulty in that way, but there is no objection to making the request. There are any amount of ways of getting over the difficulty. We might, for instance, do away with casks by inventing some other sort of container to convey our wine to Great Britain in bulk. All sorts of devices could be used to get over the difficulty; but I am afraid they would not be practicable. It seems to mt that ) the experience of centuries has shown that the only way in which wine can be carried is in casks. It’ seems to me also that this latest step in protection proves what is evident to some of us in this chamber, including my friend and colleague, Senator Lynch - the fallacy of this “ protection run mad “ policy with which we are inflicted.
– The honorable senator’s colleague was very strong for duties on timber.
– I refuse to be led aside by the disorderly interjection of the honorable senator. Nor do I intend to follow the course which I regret my friend and colleague, Senator Lynch, pursued in castigating Senator Barwell for the attitude he has taken up on .this question. Rather do I welcome a new convert to the fold, and rejoice that he has seen the right light. I hope that Senator Barwell realizes that hitherto he has been following a sort of fictitious gleam, and that he sees now where it might have led him.
– No one could have criticized the government more strongly than I have done.
– I am sorry to have been led aside. These cognate subjects will persist in obstruding themselves. It seems to me that the imposition of this duty is the height of absurdity. It would be absurd if it were not cruel. Unfortunately I know of no method by which in either House the matter can be set right. Instances like this make us realize that it is a vicious system to place in hands of one man the right to exercise power such as this. I cannot say that I have much pleasure in supporting the motion, because I regret the necessity for it; nevertheless I support it, because I believe that the step which has been taken by the government is a false step in the interests of every one, and more particularly in the interests of Australia. It bears out what I have already said, that we are - I was going to say gradually, but this is a sudden step - building round Australia a wall of protection which will . isolate us from the rest of the civilized world. We are not like other countries, able to live on our own markets. That being so, I hope that the Minister for Trade and
CuStoms will - I have my doubts about it - see the error of his ways and relax a little that inflexible predilection he has for the infliction of outrageous and,-in this case, absurd duties.
Senator Sir HENRY BARWELL (South Australia) [12.6]. - I do not know that 3 ever felt more sorry for a Minister than I did for Senator Crawford when he at- tempted to” defend what he apparently knew was indefensible, and what I think every honorable senator must feel is indefensible. The Minister said that the Senate would find that this was only a small matter, because it .dealt only with a claim for £14 by one man. It is true that Mr. Young’s claim is for £14. Mr. Young referred his claim to me, and I brought it before the Minister; but no sooner had that been done than I received a communication from the secretary of the Vignerons Association pointing out that the whole of the industry was in the same position as Mr. Young. I advised the secretary of the association not to’ take action, as Mr. Young had already seen me in reference to the matter, and that I intended to bring his case before the Government. I said that if I did not succeed with the Minister I would bring the matter before the Senate. This I have done. It does not affect Mr. Young only, and it certainly involves more than £14. Affecting as it does the whole of the vignerons who export their produce, the sum involved on this year’s estimated export is £66,000.
– We shall have that statement investigated.
Senator Sir HENRY BARWELL.The Minister can have it investigated as much as he pleases. No one knows better than the vignerons themselves what will be the wastage on this year’s estimated export of 2,000,000 gallons of wine through their not being permitted to import free of duty returned Australian made casks for refilling.
– How did the vignerons arrive at that figure ?
Senator Sir HENRY BARWELL.On the basis that while this duty is imposed, old casks cannot be brought back and used again. As long as this duty is retained it will be impossible for the vignerons to use casks more than once.
They must use neW casks each season. The vignerons know the average life of a cask, and how many times it can he refilled for export. On. that basis they are able to calculate to a nicety the amount cf wastage involved in having to buy new casks each year.
– What is the price of a. new cask?
– The price is £3 6s. 6d. Mr. Young in his letter to me says : -
The statement that Wills tendered £1 9s. 9d. per cash duty is incorrect; they contested any payment, and would only get the casks on paying this amount.
– What does it cost to bring the old casks from London ?
– I do not know, but it has been put to mc that it is impossible to make use of them if duty has to He paid in addition to the freight. Mr. Young in his letter says further : -
T have had to cable to England to stop all further shipments, and this is preventing my usual orders from coming along.
– Does the duty make old casks dearer than new casks?
– Yes, when freight and other charges are added. As for the wide range covered by this debate, my remarks in submitting this motion were confined to the one question - the imposition of this duty. Even the Minister had to be stopped by the President when he was telling us what had been done to help the wine industry. It was very interesting to hear about the amount of spirit there is in wine, but it had nothing to do with the case. The truth was that the Minister was not able to defend the action of the Government, which as I have said before, is indefensible. One argument advanced by the Minister was that we must pay consideration to relative industries, and that the coopering industry is related to the wine industry must also be protected. He said that in order to protect it we must have the absurd situation that it is impossible to bring used casks out from Great Britain and fill them again. The old season’s cask is infinitely better than a new cask which may leak and is not seasoned.
– Is it correct to say that when the amount of bounty was being calculated new casks and not old “casks were taken into consideration?
– I cannot say what was taken into consideration in fixing the bounty.
– It was estimated that casks would cost ls. a gallon.
Senator Sir HENRY BARWELL.That does not touch the point at issue.
– It has a distinct bearing on it if the rate of bounty was fixed on the use of new casks. ‘
– That might be an argument for reconsidering the rate of bounty, but it cannot be an argument in favour of maintaining an absurd and stupid practice of this kind.
– It might be an argument in favour of reducing the bounty if it were found that the wine was being conveyed in secondhand casks instead of the new casks upon which the rate of bounty was based.
Senator Sir HENRY BARWELL.I do not know how the Government calculated its bounty. It does not touch the point I am making with regard to the absurdity of the imposition of this duty.
– In view of the regulation, the Minister had no option in the matter.
Senator Sir HENRY BARWELL.What an absurd statement to make !
– Casks were being imported in such large quantities that he had to take action.
Senator Sir HENRY BARWELL.That does not matter so long as the returned casks were Australian made.
– The regulation has been in existence for years, but the casks were not being returned in such quantities before.
– If ten times the quantity were coming in it would not affect the’ position that a man should not be penalized by not being allowed to use his casks more than once. The honorable senator did not submit one sound argument against the objections I have raised. Senator Kingsmill stated that he does not know how the matter can be adjusted. I agree with him that it cannot be done by submitting a motion of this nature. If the Governmentpersists in imposing this duty I shall adopt some other course in an endeavour to secure a withdrawal of the regulation under which the duty is charged. Although I have mentioned the subject to quite a number of persons, I have not met one who has not regarded the. action of the department as the height of stupidity. How can it be viewed otherwise? I am sure the Leader of the Government in the Senate cannot defend it. The Minister (Senator Crawford), did not attempt to do so. Having brought the matter before the Senate, I ask leave to withdraw the motion.
Motion, by leave, withdrawn.
Gauge ofWestern System.
asked the Minister representing the Minister for Works and Railways, upon notice -
– The information will be obtained and furnished at a later date.
asked the Minister representing the Minister for Trade and Customs, upon notice -
– The answers are - 1. Yes.
asked the Minister representing the Minister for Trade and Customs, upon notice -
– The information desired will be supplied next week.
The PRESIDENT (Senator the Hon. Sir John Newlands). - Before proceeding with the placing of business, I desire to state that the Leader of the Government in the Senate (Senator Pearce) raised the point whether when “placing business “ was called on it was necessary to ask daily, if, with regard to each notice of motion and Order of the Day - Government business - it was desired to re-arrange or postpone it. On looking up the matter I find it has been the general practice to provide an opportunity for a re-arrangement of Government business if so desired, as at this stage it may be done without debate. It has been the practice of some of my predecessors to call on Government business en bloc, asking Ministers if it is their desire to postpone or re-arrange any item thereof, and that is the course I propose to adopt in the future.
In committee (Consideration resumed from 17th November, vide page 1535).
Clause 8 -
Section 35 of the principal act is repealed, and the following sections are inserted in its stead: - 35w. The savings bank may invest any moneys held by it: -
Upon which Senator Lynch had moved by way of amendment -
That after paragraph d, sub-section 1, the following paragraph be inserted: - (dd) in advancing money for the purpose of encouraging gold-mining in the Commonwealth.”
Senator KINGSMIIL (Western Aus amendment may seem of a somewhat revolutionary nature; but I do not think it can be regarded in that way. I look upon the powers granted to the Commonwealth Savings Bank very much in the same way as I do the articles of association of a company. The powers given to companies under their articles of association sometimes appear somewhat wide of the object for which a company is formed. Companies are formed for certain purposes; but under their articles of association they are able to deal with- matters which are not suggested by the name of the company or the object for which it is formed. It must be so in any commercial undertaking, because the ramifications of business, especially banking, are so great that no one can accurately prophesy the nature of business it may be desirable to undertake. Representing as I do a State which still produces more than one-half of the total quantity of gold produced in -Australia, I consider the amendment of great importance. I intend to support it, because I think the bank should have this power which should be exercised, it is true, with the utmost discretion, in the direction indicated in the amendment. The West Australian Bank did a good deal of business in the direction Senator Lynch suggests, and came out of its transactions remarkably well.
– And paid dividends of 20 per cent.
– Possibly so. The result might have been the other way, but that is always the case in any business.
– The funds of a savings bank should not be used in the manner suggested.
– I cannot agree with the honorable senator this time. It seems to me that the power should be given to the bank in case it may wish at some time to exercise it. I support the amendment.
– I do not consider that it should be a function of the Commonwealth Savings Bank to advance money to assist the gold-mining industry. It is quite another matter to suggest that the Government, perhaps through the Commonwealth Bank, should come to the aid of the gold- mining industry, which at present is faced with many difficulties. The Bank is to be empowered to advance money to assist other industries; but in those cases the risk is not so great as it would be if advances were made to assist gold-mining. If the principle is sound it should be extended to the mining industry generally, and every branch of primary production. I recognize the benefit the gold-mining industry has been to the Commonwealth and to Western Australia in particular, and whilst I appreciate Senator Lynch’s efforts to assist it, I think that his enthusiasm in this instance has overshadowed his discretion. The best way in which the Government can assist the industry is to make money available to assist in the discovery of new mineral fields. We can all appreciate the optimism of the men associated with mining, but they fail to appreciate that every ounce of gold taken from a mine means that there remains one ounce less to be won later. If the: gold-mining industry is to be assisted, it should be assisted by means of bounties, and not out of the savings of the people. Believing that those savings should not be expended in speculative enterprises, I cannot support the amendment.
– While sympathetic towards the mining industry, I cannot support the amendment moved by Senator Lynch. The gold-mining industry has reached its present parlous condition because of the desire of mining directors to make huge profits for their shareholders. In discarding all but the high-grade ores, they certainly made the mines pay, so that huge dividends were paid to the shareholders; but they killed the mine3. Later, when only ore of a lower grade remained, their profits decreased, until with the higher cost of production, they were converted into losses. Had the mining companies been content to work both the high grade and the lower grade ores simultaneously, those mines would still be able to carry on without loss. In that case there would’ have been no need for Senator Lynch’s amendment. At present the cost of producing gold is greater than the value of the gold that is won. For that state of affairs I blame those who, in the past, controlled the mines. While I cannot support the amendment, I should have regarded differently a proposal to provide for the granting of a bonus to the gold-mining industry. To invest the savings of the people in a risky venture, such as gold-mining undoubtedly is, would be dangerous. That precedent, once established, would lead to further fictions of a similar nature, probably with disastrous results. I agree with Senator Herbert Hays that, rather than devote the funds of the savings bank to the assistance of established mining companies, it would be better to expend them in the direction of developing new fields.
– I did not suggest that the funds of the savings bank should be expended in that direction.
– The honorable senator suggested the payment of a bounty. I agree that that would be better than granting money to continue operations in worn-out mines. Senator Andrew said that we should support the amendment because it would stabilize the gold-mining industry. I do not agree that that would be so. In any case, it would not stabilize the bank. Gold as a basis of currency has always failed in any great financial crisis. In times of financial disaster, nations have invariably resorted to the issue of a paper currency. The Bank of Venice, which is founded on a paper currency, has stood for 600 years without a failure. A bank established on a gold basis is, at best, a fairweather structure. At the beginning of the Great War the gold at the disposal of the whole of the banks in England amounted to less than £60,000,000. That sum would not have gone far towards meeting the demands of depositors had they claimed a. refund of their deposits. Senator Lynch said that private banking institutions had advanced money to assist gold-mining. We can be certain that in that case they had good security, and that the eyes had not been picked out of the mines. That is not the position to-day. Even if private banks are willing to make advances on such security as is now offering, there is no justification for the Commonwealth Savings Bank doing the same.
– I take it that the honorable senator is opposed to the Commonwealth Bank assisting gold-mining, as it is now doing.
– If Senator Lynch’s amendment were agreed to, those engaged in mining copper, radium or silver, would be entitled to claim assistance from the savings bank. Even the owners of the worn-out copper mines at Wallaroo could ask for assistance. If assistance were granted in such directions, it is not difficult to visualize the position in which the bank would soon find itself.While favorable to the granting of a bounty to assist gold-mining, I am unable to support the amendment.
Senator Sir HENRY BARWELL (South Australia) [12.38].- It is a sad reflection upon the intelligence of honorable senators that they should be found seriously discussing a hair-brained proposition such as the amendment moved by Senator Lynch.
– Is the policy of the Commonwealth Bank, by which it now assists gold-mining, hair-brained?
– It is a hair-brained suggestion that funds of the Commonwealth Savings Bank should be invested in a speculative enterprise such as gold-mining.
– The Commonwealth Bank is assisting gold-mining companies to-day.
Senator Sir HENRY BARWELL.The suggestion of the honorable senator is unthinkable: we should not be discussing it. Senator Lynch says that there has been a discrimination against goldmining. There has been nothing of the kind. No savings bank has the right to invest its funds in risky enterprises. It has always been our proud boast that a bigger percentage of the people of Australia have deposits with the savings bank than is the case in other countries. That is because Australian savings banks have been built up on safe and sound foundations. Those who are in control ofthe Commonwealth Savings Bank are merely the trustees of the savings of the people. Honorable senators know the restrictions placed upon ordinary trustees in relation, to the investment of trust moneys. They can only invest such. moneys in authorized channels. In every case they are gilt-edged investments, in which there is no element of risk. If that is the position in relation to private trustees, how much more cautious should we be when dealing with the savings of the people?
– -What proportion of the people’s savings would be devoted to this purpose?
– None of their savings should be expended in the way suggested by the honorable senator, or in any other speculative enterprise. They should be devoted to purposes unattended by risk. The question before us is not whether it is right or wrong to assist the gold-mining industry. It may be perfectly right to grant assistance to that industry; but it would not be right to assist it from funds built up on the savings of the people.
– That is a magnificent bogey.
Senator Sir HENRY BARWELL.I repeat that it is absurd for this committee to devote its time to such a proposition as that contained in Senator Lynch’s amendment.
Sitting suspended from12.45 to 2.15 p.m.
– I agree with Senator Barwell that this discussion is an absolute waste of time. The only reason which induces many honorable senators, including myself, to speak is the sympathy we feel for the mining industry. I yield to no one in that respect. I have, perhaps, given as much time to the assistance of mining as any other member of this chamber. I have been identified with Senator Lynch, the mover of the amendment, and others, in placing before the Prime Minister (Mr. Bruce) the unusual difficulties under which the industry is suffering. We all know the views of the right honorable gentleman on this subject. He believes that a bonus for the mining industry is indefensible, and that the only way in which it can be assisted is through the Development and Migration Commission. I understand that the commission has already investigated the position of mining in Western Australia, and has made certain recommendations.
Whether those recommendations will be acted upon, I am unable to say. We have a similar difficulty in connexion with the Mount Morgan mine in Queensland, and we approached the Development and Migration Commission for assistance. Up to the present nothing very material has resulted from our consultations with that body; but we are still hoping that it will be possible to do something to keep the mine going. It is unthinkable that any government financial institution should make advances to a mining company purely on the security of the mine itself, and I am surprised that any honorable senator should advocate that policy. We have been told that trading banks have given financial assistance to mines. In my judgment it is a most imprudent thing even for a trading bank to do, unless some additional security in the way of a freehold or personal guarantee is forthcoming. When, as a director of a mining company, it has been my lot to wait on a bank manager for financial assistance, I have invariably been requested to find additional securities. I am quite sure, therefore, that, on every occasion when a banking institution has come to the assistance of mining companies, it has insisted on personal guarantees being given. I feel sure, also, that if Senator Lynch and Senator Kingsmill freely spoke what was in their minds, they would admit that what I am saying is correct. For this reason I say it is impossible for the committee to agree to the amendment and allow the funds of the savings bank to be invested in such a hazardous undertaking as mining. I will cheerfully join with Senator Lynch and Senator Graham in any endeavour, at any time, by legitimate means to invoke the assistance of the Government to the mining industry; but I shall certainly resist any attempt to utilize the funds of the savings bank for that purpose. I shall vote against the amendment.
– Notwithstanding all that Senator Barwell and Senator Thompson have said, the amendment submitted by Senator Lynch is worthy of serious consideration. Until a few years ago mining was the most important industry in Australia. It has done more for Australia than any other- industry. There is no magnet like the lure of gold. Men will rush to the hottest and- the coldest places- on earth in search of it, and will put up with all sorts of hardships in the endeavour to win the precious metal from mother earth. The discovery of gold in Australia attracted some of the best men and women from all parts of the world to this1 country. But for its discovery Australia would not be in its present position. When honorable senators speak of mining as a languishing industry, do they mean that, because production has declined, the industry should not receive consideration from this Parliament?
– No one has ever suggested that.
– Who knows what the future may have in store for Australia? Who can say that new fields of great importance will not be discovered ? My memory carries me back to the days when, just prior to the discovery of gold in Western Australia, there was acute unemployment and distress in all the States of the Commonwealth. I remember, also, that Mr. Hargreaves1, who was credited with being the discoverer of gold in Australia, after examining the Western Australian mineral areas at the instance of the Government of that State’, reported that Western Australia was an agricultural and not an auriferous country. Of course, he was wrong. We all know what the discovery of gold did for that State. Some honorable senators hold the view that in no circumstances should the funds of the savings bank be utilized to assist the mining’ industry. Some believe that u would not be- proper to place- such a provision; in this bill1. Others, again, say that the proposal does not go far’ enough - that financial assistance should be given to all mining companies. If honorable senators believe that the amendment should be- more comprehensive, there is no reason why it should not be further amended. But, at the moment, we are discussing the goldmining industry. It is more important than other forms of mining, and,, therefore, it is proper that we should consider, how best we may assist it. It has been, urged that the savings of the poorer sections of the people deposited in the Commonwealth Savings Bank should1 not be utilized for this purpose. Senator Lynch does not suggest anything of the kind. Do honorable senators who are opposed to the amendment believe- that if it is: embodied in the bill,, any of the savings now in the Commonwealth Savings Bank will be utilized for that purpose ?
– Of course not. The total deposits in the Commonwealth Savings Bank amount to about £47,000,000. In the Queensland savings banks the total is £22,000,000. The Government of that State, and also Tasmania, some years ago agreed to amalgamate their savings banks with the Commonwealth Savings Bank. Under this bill, not one penny of the deposits at present in the savings banks in those States can be utilized for’ any of the purposes mentioned in the measure. It provides that 50 per cent, of the increased deposits over and above the £47,000,000 now in the bank will be available for the Government’s housing scheme and the other purposes outlined in the bill. In Queensland no money will be available for these purposes, because under the agreement between the Commonwealth and the Queensland Governments, 70 per cent, of the deposits in “the savings bank in Queensland must be set aside for State purposes, and the remaining 30 per cent, utilized for other purposes within that State. The same applies to Tasmania. Therefore the increase: in deposits in the Commonwealth Savings Bank which may be used for the purposes of this hill will be. confined to branches of the bank in Victoria, New South Wales> South Australia and Western Australia. In those four States, State Savings Banks pay high rates of interest and cater for new business by keeping their branches open on Friday evenings for the convenience of the thrifty section of the community. The Commonwealth Savings Bank pays a lower rate of interest and does not keep its branches open on Friday nights. Very little additional money will be available in the Commonwealth Savings Bank for any’ of the purposes mentioned in this bill. The bulk of the money required for the purposes of the bill will be borrowed, and if it is good to borrow money for the purposes named in the hill, surely it cannot he bad to borrow it for the purpose of preserving an industry like gold-mining. Paragraph (d) reads that the savings bank may invest moneys held by it.
In advancing money for the erection of warehouses or storage facilities intended for the warehousing or storage of primary products, including, the erection of plant for treatment to ensure their preservation and preparation for marketing.
These primary products are described as wool, grain, butter, cheese, meat, fish, fresh, preserved, or dried fruits, hops, cotton, sugar, and such other produce as is prescribed. Honorable members may say that it is not a business proposition to advance money to an industry that is not in a good position to-day unless it can provide substantial security. Do we ask an industry to which a bounty is paid to put up security for the money advanced? Bounties are almost an unconditional gift. The money has not to be paid hack nor has interest to be paid on it. We pay bounties on dried fruits, meat, wine, cotton, shale oil, and other things. I have not the figures at my disposal for the moment, but the total bounties paid amount to hundreds of thousands of pounds. Are honorable senators prepared to say that under no circumstances would they assist the mining industry? If not, let them give some evidence of the strength of their opinions by supporting the amendment. It will do no harm, and may do an immense amount of good.
– I am quite sure that my friend Senator Lynch did not expect such a long debate on this amendment which he was quite aware the Senate could not adopt. If he were trustee of a savings bank or for a private individual, he would not advance money on a mining speculation. I am astonished that he should ask the Senate to do for Western Australia what the Western Australian Government has not been willing to do. Why does not the State Government subsidize the goldmining industry? The trustees of the State Savings Bank of Western Australia would not for one moment dream of advancing money on a mining proposition.
– They have no power to do so.
– They would not do so even if they had the power. No one outside a lunatic asylum would advance money on a mining venture without proper security. A great deal has been said about the wonderful things the gold-mining industry has done for Australia. No one can deny it. But gold is not affecting the progress of any Australian State to-day, with the exception of Western Australia, and it affects that State only because it was the last to get population and develop its wealth. Queensland, when I knew it first, was living on the gold-mining industry, and there were flourishing goldmining towns south and north. I do not know of one flourishing gold-mining town in Queensland to-day. The industry has declined, because it does not pay to produce gold. It is useless to subsidize a dying industry that can offer no asset as security.
– What is Queensland living on now?
– Like other States, Queensland has had to develop its resources, and to-day it is living on the surplus of its produce from the land. In Victoria, Ballarat and Bendigo which were once mining centres are now agricultural centres. Gympie in Queensland was a wonderfully wealthy mining centre with a large population. To-day the gold-mining has ceased, but the population is large, and business is steadier than ever before, because the surrounding district has developed from an agricultural point of view. The Government has introduced this bill with the idea of helping to build up these primary industries which are always progressing and growing. Mining does not grow. As soon as a mine is opened its asset begins to decrease. Primary industries have the future in which to develop. I should like to see the mining industry come back again, but there is nothing in sight, not even in the Northern Territory, to give us any hope that it has any future in Australia. Senator Lynch knows better than any one else that on account of the cost of producing gold it is hard to get any one to advance money for the development of a mining proposition. I should support the honorable senator’s amendment if it would do any good to the gold-mining industry, but I do not see that there is the slightest inducement for it to do so. Senator Lynch is no doubt desirous of doing something to please the people of Western Australia; but he must know that even they would not expect the Senate to empower the board of directors of the Commonwealth Savings Bank to advance money on goldmining properties.
. - Undoubtedly the gold-mining industry has been a very important one in Australia. To the discovery of gold was largely due the enormous increase in our population that took place in the ten years that followed it. Our mines have been very prolific. From 1851 to 1924, no less than £619,159,653 worth of gold was extracted from the earth. But there is one outstanding characteristic of gold-mining and other mining that is absent from the production of other com-, modities - once a metal or mineral is taken out of the mine it does not grow, so far as we know, a second time. The use of savings bank money in an attempt to induce worn-out mines to produce more gold would have a most damaging effect on the institution assuming that its directors were foolish enough to agree to such a thing. As soon as gold is discovered it is dug up, very often under very unfavorable conditions, and is removed to other countries and dumped into prepared vaults, where it remains for an indefinite number of years. We have ‘only a few million pounds worth left out of our enormous production of gold. It must surely appeal to honorable senators that it would be exceedingly undesirable to give the directors of the Commonwealth Savings Bank the power to invest any portion of their deposits in gold-mining ventures. I do not think they would for a moment countenance any proposal to do so. If there is any reasonable certainty of gold being found in payable quantities, there is never any difficulty in securing ample capital from outside sources to work the venture. On the most flimsy evidence large sums of money have been invested in the most recently discovered gold-bearing areas in New Guinea. No matter where gold is discovered men will rush there and money will be invested in order to extract it from the earth. Why should we seek to incorporate in this bill a provision of which no sane body of directors’ would take advantage ? On the grounds that I have mentioned, I intend to vote against the amendment.
– Like Senator Barwell, I am at a loss to understand why this debate has been so protracted. Honorable senators, apparently, have had difficulty in framing reasons for the untenable attitude they have adopted towards my amendment. They are opposed to the gold-mining industry receiving the same treatment that is accorded to other industries. Let me briefly repeat the position. This bill proposes to separate from the trading section of the Commonwealth Bank the major portion of its resources, a sum amounting to about £46,000,000. A portion of that money is to be devoted to the encouragement of various industries. If honorable senators will bear that in mind they will realize my difficulty in understanding the attitude of those who are opposed to my amendment. The Commonwealth Bank now makes advances to assist gold-mining; but the assets of the savings bank branch when taken from it, may no longer be devoted to that purpose. Why should not the existing policy continue to be followed after those assets have been transferred? Senator Thompson referred to the quality of the security accepted by private banks. I again remind him that I have personal knowledge that the Commonwealth Bank assists gold-mining enterprises. I was a shareholder in the Mount Cuthbert mine, in Queensland, to which £15,000 was advanced by the Commonwealth Bank to assist in its development.
– What security was offered for the advance?
– The directors offered the security they had. Whatever that security, the substantial fact remains that the Commonwealth Bank did advance the money.
– We do not deny that; but we say that it must have been security other than the mine itself.
– Of course the directors’ offered security; otherwise the Commonwealth Bank would not have advanced the money. The same security that was then offered to the Commonwealth Bank can now be offered to the Commonwealth Savings Bank in other cases.
– How did the bank come out of the transaction.
– It came out better than I did. I lost all I put into the mine; but the Commonwealth Bank did not. I understand that, as first mortgagee, it came out satisfactorily. The granting of assistance to gold-mining companies is an established practice of the Comonwealth Bank today This bill proposes to terminate that practice. Why? Never before have I seen public men, interested in mining enterprises, so faint-hearted as are those honorable senators who have opposed my amendment. I have been asked what I would do if I were a director of the bank. If I. had the custody of another person’s worldly substance, I should be more careful of that trust than of my own capital. Honorable senators apparently think otherwise. They may remember that some years ago, when a number of gold-mining ventures in Queensland were in difficulties, the Queensland National Bank came to their assistance. A similar happening occurred in Western Australia. When private banks, whose funds are generally invested with greater caution than is the case with the funds of government banks, are prepared to assist gold-mining, it is reasonable to assume that a government institution may wisely adopt the same course. Yet it is proposed virtually to write on the portals of the Commonwealth Savings Bank - “Enter all except the goldseeker.” The meat producer, the fruit grower, the farmer, and all manner of other producers who have already been loaded with Government patronage, may still be assisted from the public purse; but not the pioneer gold-seeker. The Government and its supporters are endeavouring to find excuses for not being prepared to do what the hard-headed private bankers of this country are doing, and have done for many a long day.
– It is all a question of security.
– Will not the same security be available for advances from the Commonwealth Savings Bank that .is now accepted for advances from the other banks? I cannot agree with Senator Barwell that it is a waste of time for honorable senators to discuss a matter so vitally affecting men on the frontiers of civilization. Our gold-seeking pioneers, at great risk to health and fortune, and even to life itself, are searching for that which, when found, is of great value to this country. They should be assisted. I realize that it is impossible to convince people against their will. Honorable senators have had difficulty in finding excuses for their attitude towards this amendment. They should be ashamed of their unwillingness to grant this crumb of comfort and equality to the gold-seekers of this country. If there were ten’ men in this Parliament who supported the gold-mining industry, the Government would be very willing to agree to this amendment, but, because the industry is not adequately represented,, it is not possible to secure fair play for it. Gold-mining is responsible for the presence of many honorable senators in this chamber. It is responsible for my presence, and also for that of Senator Pearce. He would never have seen the inside of this chamber, but for the support he received from those connected with the gold-mining industry. They lifted him from obscurity, and placed him in his present position. A sum of £50,000,000, or more if required, can be made available for the assistance of all the other primary industries of Australia, but nothing is available to help the pioneer who goes out into the far places to win gold. The Minister spoke, about the risk involved in. advancing the people’s savings from the Commonwealth Bank. When £6,000,000 was “ risked “ and lost in the fruit industry not a word was said. There is absolutely no risk at all. Senator Findley pointed out that of the present deposits iri the savings bank, amounting to £47,000,000, not one penny will be used for the purposes of this bill. It will all be borrowed money. Why, I ask, should we draw the line at the gold industry, which many members in this chamber overreach themselves to praise, but which they will not lift a finger to help. Senator Crawford raised the bogy that savings should not be “ risked.” But they are “ risked “ now and have been “ risked “ for years. He cries, “Wolf, Wolf” to frighten these little lambs, but there is no wolf near: no wolf, in fact, ever existed. The goldmining industry was the only one. that was capable of pulling this country through the hard times previously suffered, yet it is the only one that was penalized - and penalized to the extent of £3,000,000, taken out of the pockets of those engaged in it during the war. There is plenty of talk about “ risk,” but no talk of returning that £3,000,000. It is further penalized to the extent of duties bearing from 40 to 60 per cent. on the articles necessary for the conduct of the industry. I expected to obtain more sympathy from honorable senators in this chamber for those obtaining their livelihood from gold-mining. I expected that the industry would be looked upon as a sound investment for the funds of the Commonwealth Bank.
– The resources of the private banks are available to help the industry.
Question - That the new paragraph (dd) proposed to be inserted be so inserted (Senator Lynch’s amendment )put. The committee divided.
Majority . . . . 10
Question so resolved in the negative.
Clause 8, as amended, agreed to.
Clauses 9 and 10 agreed to.
Schedule and title agreed to.
Bill reported with an amendment.
Debate resumed from 2nd November (vide page 855), on motion by Senator Sir William Glasgow -
That the bill be now read a second time.
.- This bill is entitled the Commonwealth Housing Bill, but I think it is wrongly named. It should be called the Commonwealth Money Lending Bill. As a result of it the Commonwealth Government will not build a single room ; but I suppose that, in order to keep faith with promises made before last election, it was necessary to bring in a housing scheme of some description. The head of this Government said then that it was the intention of the Government to launch a Commonwealth housing scheme, and he is now endeavouring, by means of this flimsy measure, to fulfil that promise. Personally, I do not think that the Commonwealth Government could constitutionally undertake a real house building scheme. If I interpret the Constitution correctly, it does not give power to the Government, no matter what its political colour, to build and sell houses to the general public. It could go no further than to build homes for its own employees. No one knew better than Mr. Bruce when he announced the policy of his government that it could not carry out the housing scheme. I wish it to be understood that I am not opposed to such a proposal. On the contrary, I welcome any scheme to assist persons to secure homes of their own, and particularly those who find it difficult to make ends meet. Any assistance which the Government can give to enable them to escape from the tyranny of the rack-renting landlord - that class of person is not confined to Ireland - is welcome. The 25th of this month will be the second anniversary of the last federal election. On that day two years ago this Government, by misrepresentation of its opponents, secured another lease of power. During the campaign that preceded the appeal to the people, the Government and its supporters indulged in a campaign of vilification, and abuse of their opponents. The policy upon which the Ministry was returned included child endowment, national insurance, insurance against unemployment, and a housebuilding scheme. Nothing of a concrete nature has been done, up to the present, in connexion with national insurance ; nothing has been done to prevent a recurrence of those unfortunate periods of unemployment experienced in Australia.
-What has that to do with the housing scheme?
– If I am not confining my remarks strictly to the bill, I am sure that you, Mr. President, will intervene. If Senator Payne had to wander about the streets of Hobart or Launceston seeking work, and if he had no money to payhouse rent, he would see a very definite relationship between unemployment and house building. This measure is the first instalment of the four principal planks of the Government’s election policy; but all that it proposes is that the Government, with the assistance of the Commonwealth Bank, shall raise a loan which the board of directors of the bank will hand over to an existing State authority for the purpose of house building.
– Under certain conditions.
– That is true. But the directors of the bank will not engage in the business of house building. They will not lay one brick upon another and they will have no responsibility for the carrying out of the scheme. All that they will do will be to raise the money and make it available to certain State authorities which will be responsible for the collection of the deposits, the building of the houses, the payment of interest and the return of the money. It would have been more honest if, during the election campaign, the Ministry had confessed that the Commonwealth had not the constitutional power to build houses for the people, and that any assistance which it proposed to render would be given through existing agencies. As has already been said in the debate on another measure, therewas no need for the creation of new machinery, and there was nothing to prevent the Government from rendering assistance to the various State authorities. In the case of Western Australia, for instance, the Government could have assisted the Workers’ Homes Board to make more liberal advances to home-builders, and that body could have carried out the work. There was really no necessity for an alteration of existing, or the introduction of fresh, legislation. Even now the States will do the work and the Commonwealth Government will get all the credit. In five, if not six, of the States house building schemes have been’ in operation for many years; but the amount of advance, the amount of deposit required, and the interest chargeable, vary somewhat. Were the States consulted before this legislation was introduced? I hope we shall be informed on this point before the bill is disposed of. It is important that we should know this, because of the difficulties that might arise in the event of one State not coming into line.
– Certainly the legislation was not requested by the States.
– Because, as I have already pointed out, the State schemes are functioning satisfactorily. But we should know whether the States have agreed to carry out the work. If they have not, we are wasting time in discussing this legislation. I believe it has been urged in support of the bill, that the States have some difficulty in getting the necessary money to carry out their home-building schemes. I have no personal knowledge of that. I have not heard of the Western Australian Government being in difficulty in this respect. I know that the house building scheme in that State has been in operation for many years and that the Workers’ Homes Board is doing good work. The principal reason for the introduction of this measure is, I believe, that it will enable larger advances to be made.
– It is a more generous scheme.
– I admit that, in regard to the amount of advance, it is a more liberal proposal ; but I doubt if the States ever had any difficulty in finding all the money they required.
– Queensland has had great difficulty.
– Queensland is a member of the Loan Council which for some years has been negotiating loans for the States. Consequently it cannot be argued that the Commonwealth Government can obtain cheaper money for such a scheme. As a member of the Loan Council, Queensland would be treated as generously as any other State. I am satisfied, therefore, that there is no trouble so far as State borrowing is concerned. I could imagine such difficulty existing prior to the establishment of the Loan Council because then two States might have been on the market at the same time endeavouring to float loans, with the Commonwealth standing waiting for its chance to get in. Borrowing under those adverse conditions was not always a satisfactory business, and realizing this, the Commonwealth Government and the majority of the States agreed to the formation of the Loan Council, which now has been functioning for some years. Under this bill the Ministry proposes to make advances available to persons whose salary does not exceed £12 a. week. The Government should have shouldered the responsibility for house building to a much greater extent than is contemplated under this measure. The bill is only another ex<ample of the .Government’s desire to shed responsibility by getting some one else to do its work.
– If you cannot do a thing yourself, is it not wise to have it done by some one else ?
– Yes, but this is not a house-building scheme; it is a money-lending scheme.
– It is a house-building scheme because it directs the policy of the States in regard to house building.
– I have pointed out that there are already house-building schemes in the States. This bill will simply enable the States to advance more money under their existing schemes. The only difference is that the State laws provide for, advancing money to persons with smaller incomes than those for whom pro vision is made in the bill before us. Under this bill 90 per cent, may be advanced up to a maximum of £1,800.
– That is very liberal.
– It is very liberal. I may be criticizing the procedure adopted, but I have no intention of opposing the bill. The Commonwealth Bank ( Savings Bank Bill originally provided for the separation of tlie savings bank from the general trading bank business of the Commonwealth Bank, but that has now been altered, and the Commonwealth Bank will remain, intact. There will, however, be extra bookkeeping and flotation costs. I do not think that very much money will be available under the provisions of clause 7, sub-clause 2a, which provides that one-half of all increases in deposits over the total amount of deposits now existing shall be made available for investment by the commissioners. That is the point that Senator Findley so strongly stressed on another bill, when he pointed out that 70 per cent, of the existing deposits in Queensland are earmarked for the development of the State, and the remaining 30 per cent, is to be disposed of as the Treasurer of the State determines. I understand that the terms of the Tasmanian agreement are the same. There are, therefore, only four States we can look to for money for investment by the commissioners, and in those four States only one-half of the new business will be available for investment on the Commonwealth’s housing scheme. It is clear, therefore, that we cannot get the whole of the money that will be necessary from deposits, and that we must resort to borrowing for the purpose qf this bill. There is not much more I can say on the measure. The complementary bill has passed through the committee stage. The Housing Bill is a purely machinery measure to carry out work started by another bill. I support the second ‘ reading ; but before resuming I should like the Minister in charge of the measure to answer the questions I have repeatedly put: Were the States consulted prior to introduction of this bill, and if so, what will be the position if a State declines to fall into line with this legislation? Will it mean, that the bill cannot be operative until all the States agree, or can it be put into effect if only one State agrees? I repeat that this is not a house-building scheme, but is merely a puny effort on the part of the Government to try. to fulfil an election promise”. I am always readY to do anything to help the people of Australia to get cheaper homes, but in my opinion, even without legislation of this character, they could have been helped to get homes under the schemes already in existence in the States.
Senator Sir HENRY BARWELL (South Australia) [3.40]. - Any measure which involves nu expenditure of £20,000,000 must be looked upon as one of great importance, demanding close scrutiny in order to see whether the expenditure is likely to be reproductive, or, if not, is likely to serve an essential purpose. Any one who has studied the position of Australia during the last few years must realize that its financial and economic position is unsatisfactory. There is a money stringency; there is a severe trade depression throughout the Commonwealth; and as the bill deals with the expenditure of a large sum of money, I propose to review very shortly the financial position in order to see whether this expenditure is justified. Australia has a public debt which at the end of June last was £1,016,000,000. It has an interest bill of £52,000,000 a year. That represents £1,000,000 per week to be met by a population of 6,000,000 people. The position would not be so serious if Australia was paying its way. But, unfortunately, that is not so: the financial drift is growing more serious almost every week. That is clear from a comparison of the trade balances. Australia’s adverse trade balance for the last four years has been about £140,000,000. To that extent the value of our exports has failed to meet the value of our imports and the interest on the oversea debt. Last year the average of about £35,000^000 per annum for the past four years was exceeded, for we find that the adverse trade balance was about £47,000,000, representing an excess of imports over exports amounting in round figures to £20,000,000, and interest on oversea debts amounting to £27,000,000. Already, for the first quarter of this financial year, the value of our imports exceeds that of our exports by over £13,000,000, and, in addition, the interest bill on our oversea debts is between £6,000,000 and £7,000,000. It will, therefore, be seen that for the first three months of this year we have gone back by about £20,000,000, or at the rate of £80,000,000 per annum. Those figures show the seriousness of our position, and explain why we should be exceedingly careful about spending large sums of money. That, unsatisfactory position cannot be attributed to bad seasons, or to poor prices having been received for our produce. That is our position following an unparalleled succession of good seasons and high prices for wool, wheat, and other commodities.
– The last two seasons have not been good.
Senator Sir HENRY BARWELL.Taking Australia as a whole,’ they have not been bad. There are various causes for this financial drift. I shall deal only with those connected with the expenditure of public money, because that is a matter directly associated with the bill before us. The principal causes of that financial drift are the over-borrowing of loan money, and its unwise expenditure by the various governments of Australia, both Commonwealth and State. There are other causes, such as unduly heavy taxation, the tariff, and the awards of the Arbitration Court; but I shall not deal with them now. The main cause of the drift is the over-expenditure of public money. The only remedy is the curtailment of expenditure, especially in respect to loan moneys. I do not know whether all honorable senators are as closely in touch with the affairs of their States asI am with the affairs of South Australia, but I know that in that State money tocarry out urgent public works cannot beobtained, with the result that those works are being closed down and men are beingthrown out of employment.
– The Commonwealth isin the same position.
Senator Sir HENRY BARWELL.I do not know that it is. In the case of” the States, there has been an actual curtailment of expenditure. Unfortunately,, there is little evidence of a similar curtailment of expenditure by the Common– wealth. Either the Commonwealth Government does not realize the seriousness of the position, or it is not. facing the position in a way worthy of a responsible government.
– Does not the Loan Council control this matter?
Senator Sir HENRY HARWELL.No. The Loan Council does not prescribe the amount which any government shall expend.
– It decides on the total amount to be borrowed.
– That is true; but the Commonwealth gets the amount which it says it requires if the money is obtainable. Its estimated requirements for this year arc shown in the budget. Do honorable senators think that the budget discloses any desire on the part of the Commonwealth Government to economize? Whether we consider the estimated expenditure from revenue, or from loan, we cannot see any evidence of economy. For the services of the various departments the Government is asking for £809,000 more from revenue than the amount expended last year. Is thereany evidence of economy there?
– The Commonwealth Government has reduced taxation.
Senator Sir HENRY BARWELL.Yes ; and the States, in order to make ends meet, have had to increase taxation.
– Does the honorable senator think that the position would be improved if the Labour party occupied the treasury bench?
Senator Sir HENRY BARWELL.No: the position in that case would be much worse than it is now. That, however, is no reason why honorable senators should remain quiet. It is the duty of every honorable senator to take an independent stand in these matters, and to say exactly what he thinks. At any rate, I shall do so. Let us now consider the position from the point of view of loan expenditure. The expenditure from loan last year amounted to £7,748,000 - I speak from memory. The expenditure from loan this year is estimated at £9,000,000. Again, there is no evidence of a curtailment of expenditure similar to that which has taken place in some of the States.
Moreover, this increased expenditure by the Commonwealth is contemplated at a time when the States are financially embarrassed.
– Have not the States urged that the Commonwealth should economize in its expenditure?
Senator Sir HENRY BARWELL.I repeat that, while there is every evidence of economy on the part of some of the State . Governments, there is no such evidence of economy on the part of the Commonwealth Government. We have been told that the financial relations between the Commonwealth and the States have been placed on a satisfactory footing. With that statement I disagree. Two of the States are already dependent upon the Commonwealth; South Australia is now preparing her case for assistance, and I understand thatQueensland has threatened to do the same. Our financial position is not only serious, it is getting worse. The Commonwealth Government is not doing what it ought to do in order to stop the drift. That leads me to ask whether the present time is opportune for this Parliament to authorize expenditure on the scale provided for in this bill. It is proposed to advance money on a generous, if not lavish, scale for the provision of homes for the people. Desirable though that object may be, the matter is not urgent the expenditure is not necessary at this stage. For years the States have been providing homes for the people ; and they have done the work well. They are not asking for this money. Moreover, the principle underlying this bill - that one authority shall borrow money which will be expended by other authorities - has been, roundly condemned by the Government. I ask leave to continue my remarks at a later date.
Leave granted; debate adjourned.
Extra Sitting Day - Income Taxation insolventcyofreynoldsdriver.
[3.56]. - In moving -
That the Senate do now adjourn.
I wish to intimate to honorable senators that, in view of the pressure of public business, it will be necessary to ask the Senate to sit on Tuesdays after next week. I make this announcement now in order that honorable senators may he able to make the necessary arrangements.
– May we take that announcement as definite?
– Yes, unless the business proceeds so expeditiously that the proposed alteration is found unnecessary.
– Can the Minister supply the information for which I asked some days ago in connexion with the insolvency of Reynolds Driver, and the amount due by that gentleman in respect of income tax which the right honorable senator said he would endeavour to get from the Treasurer ?
[3.58].- The information is not yet available.
Question resolved in the affirmative.
Senate adjourned at 3.68 p.m.
Cite as: Australia, Senate, Debates, 18 November 1927, viewed 22 October 2017, <http://historichansard.net/senate/1927/19271118_senate_10_116/>.