Senate
22 March 1928

10th Parliament · 1st Session

  1. Senate
  2. 10th Parliament
  3. 1928

The President (Senator the Hon. Sir John Newlands) took the chair at 3 p.m., and read prayers.

page 4022

PUBLIC ACCOUNTS COMMITTEE

Report on Federal Capital TRANSPORT Facilities.

Senator KINGSMILL, as chairman, presented the report of the Joint Committee of Public Accounts ( on transport facilities within the Federal Capital Territory.

page 4022

PAPERS:

The following papers were presented : -

Defence Act - Regulations amended - Statutory Rules 1928, No. 23.

Naval Defence Act - Regulations amended - Statutory Rules 1928, No. 2S.

Papua Act - Ordinance No. 1 of 1928 - Native Labour

page 4023

QUESTION

BRISBANE-SYDNEY TELEPHONE LINE

Senator FOLL:
QUEENSLAND

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

  1. Is it a fact that long delays take place 011. the Brisbane-Sydney telephone line on account of heavy traffic?
  2. If so, and in view of the splendid business proposition this line has proved, will the

Government consider the early duplication of same ?

Senator McLACHLAN:
Honorary Minister · SOUTH AUSTRALIA · NAT

– The PostmasterGeneral has supplied the following answers to the honorable senator’s questions : -

  1. The volume of business transmitted on the line is occasionally responsible for delays to traffic.
  2. Steps have already been taken to provide additional telephone facilities between Sydney and Brisbane, and it is- hoped to have three up-to-date channels available early in August of this year.

page 4023

QUESTION

FEDERAL CAPITAL

SURRENDER OF BUILDING LEASES.

Senator ANDREW:
VICTORIA

asked the Minister representing the Minister for Home and Territories, upon notice -

  1. Is the Government aware whether a number of the leases, both in the civic and residential centres of Canberra, are being forfeited and handed ‘ back tq the Federal Capital Commission?
  2. Will the Government have a public inquiry made into the matter, with a view to putting land-leasing of the Federal Capital Territory on a more satisfactory basis?
Senator Sir WILLIAM GLASGOW:

– The Minister for Home and Territories has supplied the following answers to the honorable senators questions: -

  1. Five commercial’ leases in the main shopping area have been surrendered by the Canberra Shops Ltd. Beyond reports in the press, the Commission has no official advice concerning any other surrenders. 2, It is not considered that any public inquiry is necessary. The company did not give any reason for surrendering the leases, but the reason is understood to have been a belief that if buildings were to be erected thereon, as prescribed, there would be a difficulty under present conditions in obtaining tenants for the accommodation.

page 4023

QUESTION

TASMANIA

Telephone Communication With Mainland

Senator HERBERT HAYS:
TASMANIA

asked the Minister representing the PostmasterGeneral, upon notice - ‘

In view of the isolation of Tasmania from the mainland, does the Postmaster-General propose instituting a telephone service either by wireless or cable between Australia and Tasmania; and if so, when?

Senator McLACHLAN:
NAT

– The PostmasterGeneral has supplied the following answer to the honorable senator’s question : -

No definite decision has yet been reached. Investigations into alternative methods of communication are at present being maae

page 4023

QUESTION

GOVERNMENT UNIFORMS AND STORES

PURCHASES in States.

Senator OGDEN:
TASMANIA

asked the Minister representing the Prime Minister, upon notice-

Will the Government consider a policy of purchasing Public Service uniforms and other necessary Government stores in the various States where they are required for use instead of, as at present, purchasing all requirements in the larger centres.

Senator Sir GEORGE PEARCE.The Prime. Minister supplies the following answer to the honorable senator’s question : -

At present all Public Service uniforms are manufactured in the Defence Clothing Factory in Melbourne and the arrangement is found to be quite satisfactory. All other general Government stores are purchased under tenders freely invited in all States. Contracts are then placed in accordance with the lowest satisfactory tenders after allowance for freight, cartage, ,&c., to the place where the stores are required. These arrangements appear to be the best possible in the public interest and a variation of them does not seem to be desirable.

page 4023

QUESTION

GEOPHYSICAL RESEARCH

Senator MILLEN:
TASMANIA

asked the Leader of the Government in the Senate, upon notice -

  1. Has the Government or any of the departments made any arrangements for Geophysical Research in the Commonwealth.
  2. What is the present position regarding patents governing Geophysical Research.
Senator Sir GEORGE PEARCE:

– The answers to the honorable senator’s questions are as follow: -

  1. Yes. The work is being undertaken by the Council for Scientific and Industrial Research and the Development and Migration Commission acting in co-operation through an Executive Committee composed of one representative from each of these bodies, one from the Australasian Institute of Mining and Metallurgy, two representatives of the States, and ft physicist.
  2. The whole position regarding patents is now under consideration.

page 4024

BEER EXCISE BILL

Motion (by Senator Crawford) agreed to-

That leave be given to introduce a bill for an act to amend the Beer Excise Act 1901-1923.

Bill presented and (on motion by Senator Crawford) read a first time.

page 4024

COMMERCE (TRADE DESCRIPTIONS) BILL

Motion (By Senator Crawford) agreed to-

That leave be given to introduce a bill for an act to amend the Commerce (Trade Descriptions) Act 1905-1920.

Bill presented and (on motion by Senator Crawford) read a first time.

page 4024

FINANCIAL AGREEMENT BILL

Second Reading

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

[3.10]. - I move -

That the bill be now read a second time.

The purpose of the bill is to approve a financial agreement entered into on the 12th December, 1927, between the Commonwealth Government and the Governments of the six States. It makes practicable a permanent solution of the longstanding difficulty that has vexed the Commonwealth and the States in their financial relations with each other. The agreement is subject to the ratification of the Parliaments of the Commonwealth and the States, and its permanency is dependent upon an amendment of the Constitution being agreed to by the people, and a validating act being passed by the next Commonwealth Parliament.

Many attempts were made by previous Commonwealth Governments to bring about a permanent settlement of this question; but they were unable to arrive at an agreement with the States. The execution of this agreement with the States which now makes the way clear for a lasting settlement of’ this difficult problem is no mean achievement. I remind honorable senators that this is the first occasion on which the Commonwealth and the States have been in agreement.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The Commonwealth is giving away everything.

Senator Sir GEORGE PEARCE:

-I shall show shortly that that is not the case. The subject of Commonwealth and State finances has been considered and dealt with’ at length by honorable senators on previous occasions, and I do not propose therefore to do more than refer to one or two incidents in connexion with the history of this agreement. In 1919 the right honorable member for Balaclava (Mr. Watt), then Acting Prime Minister, submitted the first proposal for an alteration of the capitation payment. His scheme provided for a gradual reduction of the payment of 25s. per head to 10s. per head, but it was not accepted. In 1923 and again in 1926 further proposals which provided for the Commonwealth giving up to the States some portion of the income tax field as compensation for the abolition of the capitation payments were placed before the States, but were not acceptable to them. After the 1926 conference of Commonwealth and State Ministers the Government came to the conclusion that the capitation system, which could be suspended by the will of Parliament at anytime, should be superseded by some scheme that would provide for a permanent settlement of this vexed problem. As a preliminary it brought forward a measure to discontinue the payments under the Surplus Revenue Act as from 30th June, 1927. That measure also provided for special grants on the capitation basis, for the year 1927-28, subject to any agreement that might be entered into between the Commonwealth and the States. When that measure was brought down the

Government indicated that it would hold an open conference with the States to consider the question from all possible angles, including any proposals that the States themselves might put forward. Parliament approved of the bill in March, 1927, and thus made the way clear for an open conference. Shortly afterwards a conference was held at which the Commonwealth placed before .the States further proposals which aimed at a settlement through the transfer of State debts. The proposals, briefly stated, were -

The whole of the public debts of the States to be taken over by the Commonwealth.

Properly safeguarded sinking funds to be established in respect of existing State debts and new borrowings.

The management of debts and future borrowings to be vested in an Australian Loan Council.

The Commonwealth to make substantial contributions towards interest and sinking funds on State debts ; and

A final settlement to be made in respect of transferred properties.

These proposals were carefully examined by the States, and resulted in the agreement which is now the subject of this bill. The main features of the agreement are as follows: -

  1. The Commonwealth to take over all debts of States existing on 1st July, 1929.
  2. Prom 1st July, 1927, the Commonwealth to apply £7,584,912 annually, for 58 years, from its revenues towards the payment of the interest charges on State debts ; the States to contribute the balance of the interest payable.
  3. A sinking fund of 7s. 6d. per cent, to be established on the net debts of the States as existing at 30th June, 1927. To this sinking fund the Commonwealth to contribute 2s. 6d. per cent., and the States 5s. per cent, for 58 years.
  4. A sinking fund of 10s. per cent, to be established on all new borrowings after 1st July, 1927 ; the Commonwealth to contribute 5s. per cent., and the States to contribute 5s. per cent, for 53 years.
  5. The management of Commonwealth and States debts and the conduct of future borrowings for both Commonwealth and

States to be in the hands of a newlyconstituted Australian Loan Council, consisting of a representative of the Commonwealth and a representative of each State.

  1. A full settlement to be made in respect of “ transferred properties,” whereby the Commonwealth will relieve the States of all liability in respect of, approximately, £11,000,000 of debt, bearing interest at 5 per cent. This will mean an annual gain to the States of approximately £164,000, as the Commonwealth Government at present only pays interest at 3£ per cent, on the value of the properties.
  2. An amendment of the Constitution to be submitted for the approval of the people so as to obtain the necessary power to carry out the agreement.

It is essential that an arrangement of such a far-reaching character should be supported by constitutional authority. The Constitution as it stands at present is inadequate for this purpose, and it is necessary that an amendment shall be secured. This is the only way in which the Commonwealth can give the States a guarantee of the permanency of the arrangement. Until the Constitution is amended, the agreement cannot come into full operation. It was considered desirable, however, that its benefits should at once, as far as practicable, become operative pending submission to the people of the necessary amendment of the Constitution.

Senator Needham:

– Did the right honorable gentleman say that the agreement would be embodied in the Constitution ?

Senator Sir GEORGE PEARCE.No; a section authorizing such 7an agreement will be embodied in the Constitution if the people so approve. ‘ The agreement contains certain provisions which will apply during the temporary period of two years from 1st July, 1927 to 30th June, 1929. These provisions which are set out in Part II., briefly stated, provide that the Commonwealth shall pay to the States, towards interest on debts, £7,584,912 and 5 per cent, interest on the value of the transferred properties instead of 3^ per cent. They also provide for sinking fund contributions to be payable as from 1st July, 1927, except in the case qf New South Wales which State will commence its contributions on 1st July, 1928.

The agreement will involve a substantially increased burden on the Commonwealth revenue as compared with the payments provided for under the States Grants Act, 1927. This additional charge mainly arises from the sinking fund contributions which the Commonwealth will make for the redemption of existing States debts. As the people of Australia generally will reap the advantages of co-ordinated borrowing and the establishment of sinking funds, it is felt that, the Commonwealth is justified in making an immediate and substantial contribution from its revenues to secure those advantages. In the year 1927-28 the financial position will be as follows : -

The following table sets out in detail the amounts that will be received by each State’.

It will be noted that under the agreement every State will gain a substantial benefit.

I invite honorable senators to turn to the agreement while I explain briefly some of its chief features. It is divided into four parts, namely : - Part I., general provisions; Part II., temporary provisions; Part III., permanent provisions; and Part IV., miscellaneous provisions. The most important provision of Part I. relates to the constitution and powers of the Loan Council. A voluntary Loan Council has been in operation since 1924. Up till then there was cut-throat competition between the States, and during the financial stringency in 1923 interest rates reached 6 per cent, in respect of loans free of Commonwealth and State income tax. The Loan Council has since secured co-ordination in both the Australian market and the overseas market. Each State was free to withdraw from the Council at any time, and unfortunately New South Wales did so. That action to some extent minimized the benefits of the Council; nevertheless the results exceeded anticipation and made the States realize that they had nothing to fear from a permanently constituted Loan Council. The agreement provides that there shall be on the Loan Council one representative of the Commonwealth and one representative of each State. Where a vote is necessary each State representative will have one vote and the Commonwealth representative two votes and a. casting vote. One of the most important questions to be decided by the

Loan Council will be the amount of money that can be borrowed at reasonable rates and under reasonable conditions. The decision of this question will really not be difficult, since it will be governed by the state of the money market. In times of stringency, if it is found that the total programmes of the Commonwealth and the States exceed the amount which, in the opinion of the Loan Council, is available in the market at reasonable rates and conditions, the agreement prescribes the method of apportionment of the reduced amount amongst the various governments. If the decision of the Loan Council is unanimous, the allocation of the money available will be in accord with that decision. If, on the other hand, the Loan Council fails to reach a unanimous decision the Commonwealth will be entitled to have allocated to it not more than one-fifth of the reduced amount, and the States will be entitled to share the balance in proportion to their net loan expenditure during the preceding five years. Each Government will thus receive an equitable share of any reduced sum which may be borrowed, and competition will be avoided. This arrangement will also prevent an undue inflation of the “loan estimates of any particular State in the hope that even if a reduction is made in the amount asked for the State concerned will obtain sufficient for its actual requirements. Broadly speaking, the Commonwealth is to arrange all borrowing subject to the Loan Council. There is, however,’ power in the agreement for a State to borrow money outside Australia in its own name, subject ‘ to the unanimous consent of the Loan Council. This amendment of the original agreement was made at the suggestion of the States themselves, because it was pointed out that some of them had established a certain goodwill in the London money market or elsewhere, and that by the withdrawal of the right to issue a loan in the name of a particular State the benefit of that goodwill would be lost.

Senator Foll:

– Will any amount so borrowed by a State be deducted from its proportion of loan moneys raised by the Loan Council for any particular year ?

Senator Sir GEORGE PEARCE.Yes. Any moneys so raised by a State will, be regarded as a portion of its allocation.

Senator Thompson:

– Is it proposed tocontrol borrowing by municipal authorities?

Senator Sir GEORGE PEARCE.No. The provisions of Part IL, to which I have already referred, will only operate during the temporary period of twoyears. ‘ In the event of the Constitution amendment not becoming law, and of the agreement not being validated on or before the 30th June, 1929, provision is made for the States to reap the benefit of all sinking fund contributions made by the Commonwealth during the temporary period of two years.

The provisions of Part III. of the agreement will not come into force unless, before the 1st July, 1929, the Constitution has been altered and the Commonwealth Parliament has passed a law validating the agreement. Subject to this procedure, the Commonwealth will take over the debts of the States as at the 1st July, 1929, and will assume the liabilities of the States to the bond-holders. Further provisions under this part include a payment by the Commonwealth of a fixed contribution towards interest charges for 58 years, amounting to £7,584,912; the establishment of sinking funds with joint contributions by the Commonwealth and the States ; the settlement of the transferred properties question by the Commonwealth relieving ‘the States of all liability in respect of debts bearing interest at 5 per cent., equivalent to the agreed value of the properties, totalling £10,924,323. The sinking funds to be provided will be controlled by the National Debt Commission, which will regularly apply all money paid into the fund to the re-purchase or redemption of the debts of each State. In the same way the National Debt Commission will immediately cancel all securities as they come into its hands, and thereafter during the prescribed sinking fund period, the States concerned will pay to the Sinking Fund Commission an amount equal to 4£ per cent, per annum on the cancelled debt. The sinking fund will thus receive the ‘ benefit of compound interest at the rate of 4-J per cent, on the prescribed contributions. The annual contribution by the Commonwealth to the sinking fund on debts at the 30th June, 1927, will be £801,680. The annual payment in respect of new debts will be determined by the amount of new borrowing.

Part IV. of the agreement contains miscellaneous provisions, the most important of which deals with the proposed alteration of the Constitution. It is proposed that a new section shall be inserted in the Constitution in the following form : - 105a. (1) The Commonwealth may make agreements with the States with respect to the public debts of the States, including -

  1. the taking over of such debts by the Commonwealth ;
  2. the management of such debts;
  3. the payment of interest and the provision and management of sinking funds in respect of such debts;
  4. the consolidation, renewal, conversion, and redemption of such debts;
  5. the indemnification of the Commonwealth by the States in respect of debts taken over by the Commonwealth ; and

  6. the borrowing of money by the States or by the Commonwealth or by the Commonwealth for the States.

    1. 2 ) The Parliament may make laws for validating any such agreement made before the commencement of this section.
    2. The Parliament may make laws for the carrying out by the parties thereto of any such agreement.
    3. Any such agreement may be varied or rescinded by the parties thereto.
    4. Every such agreement and any such variation thereof shall be binding upon the Commonwealthand the States parties thereto, notwithstanding anything contained in this Constitution or the Constitution of the several States or in any law of the Parliament of the Commonwealth or of any State.
    5. The powers conferred by this section shall not be construed as being limited in any way by the provisions of section 105 of this Constitution.

The precise wording of this clause has been determined after submission to the Crown Law authorities of not only each State, but also the Commonwealth, in addition to outside counsel.

Senator Duncan:

– Have all the States agreed upon it?

Senator Sir GEORGE PEARCE.They have. “When the clause is approved by the people there will be an absolute guarantee to the States that this or any agreement made in the future under the powers to be conferred by the constitu tional amendment, will have constitutional force and effect, notwithstanding any legislation passed by any parliament of Australia.

The benefiits of this agreement cannot be over-stated. It makes the way clear for a permanent and satisfactory settlement of a problem that has hitherto proved impossible of achievement. It safeguards the position of State finances, as it ensures definite Commonwealth assistance on a satisfactory basis, and the States will no longer be dependent on the will of the Commonwealth Parliament. It provides for the giving of immediate relief to the finances of the States. It provides also for the economic management of debt and borrowing operations, and entirely eliminates any danger of cut-throat competition in the future. Above all, it will result in the enhancement of Australia’s credit, and thus substantial savings of interest will ultimately be secured to the peoplp through the issue of new conversion loans on better terms than would be possible in the absence of co-ordinated debt management and adequate sinking fund provisions. To those who may cavil at that statement, I commend the position which is enjoyed by New Zealand and Canada, two sister dominions, whose assets and potentialities cannot be said to be better than ours, but whose securities are regarded more favorably than ours on the English and American money markets, because they have constituted one financial authority which speaks for the whole of the dominion.

In conclusion, I desire to say that the agreement has been the subject of most favorable press comment both in Australia and overseas.It has been signed by the representatives of the governments of the six States and the Commonwealth. Those governments represent not one party, but all parties. It has been ratified by four parliaments, namely, those of Victoria, Queensland. South Australia, and Tasmania. The Parliaments of New South Wales and Western Australia will deal with it very shortly. In view of the fact that it has received the endorsement of the governments of all of the States and the parliaments of four of the States, and that it has passed the House of Representatives, I commend the bill to the

Senate as a fair and substantial fulfilment of the promise which was made by the Government when it brought forward its proposals for the abolition of the per capita payments. We have dealt with the States both justly and generously. I ask the Senate to endorse our action by agreeing to the passage of the bill.

Debate (on motion by Senator Needham) adjourned.

page 4029

CUSTOMS TARIFF BILL

Motion (by Senator Crawford) proposed -

That the report be adopted.

Senator CHAPMAN:
South Australia

– I move -

That the bill be recommitted for the reconsideration of Item 152.

At the conclusion of the vote which was taken on another item, honorable senators had not properly settled in their places when item 152, relating to iron and steel tubes or pipes was declared by the chairman to be carried. His voice, generally, carries fairly well; but, as ‘ honorable senators are aware, the acoustics of this chamber are defective, and it is difficult to hear what is being said. At least two honorable senators, of whom I am one, did not hear the Chairman put this item ; but as soon as we realized what had been done, we endeavoured to have the matter reopened. The Chairman, however, ruled against us. I have received protests from the Stock-owners’ Association of South Australia, whose members are affected materially by this duty, and I wish to obtain information from the Government in relation to it. If the explanation is not satisfactory, I shall endeavour to secure a reduction of the proposed duty.

Senator CRAWFORD:
Honorary Minister · QueenslandHonorary Minister · NAT

– Senator Chapman’s recollection of what took place in committee is different from mine. After a vote had been taken on one item a number of other items were passed without debate before that which deals with steel pipes was put from the Chair. If Senator Chapman missed his opportunity to discuss it, that was his own fault. If we agree to the schedule being committed for the consideration of this item, we cannot reasonably decline to recommit it for the further consideration of any other item. I do not consider that the honorable senator has made out a good case. The discussion, if allowed, may develop into one embracing the whole of the iron and steel duties. I trust that Senator Chapman will not persist with his amendment; but, if he does, I hope that he will not receive the support of other honorable senators. Senator Chapman should have informed me of his intention to move for the recommittal of this item, but he did not do so. He said that he wished to have an opportunity of referring to it again, but he did not intimate that he desired to go beyond that.

Senator LYNCH:
Western Australia

– The Minister has made out a very weak case. The recommittal of an item or a clause is nothing new in parliamentary procedure. During the discussion of the various items in the schedule the Minister gained a number of victories. He did so in connexion with this item. If the reasons for the higher duties were sound when they were agreed to they should be sound still. I support Senator Chapman’s motion because I believe that it is our duty to give everyopportunity for a full discussion of each item; We should never close the door to a further review of a subject so long as the subject warrants it. It is true that some of the items were passed - shall I say expeditiously - but that is all the stronger reason why a further discussion should now take place if the circumstances warrant it. The Minister’s opposition to the motion can only be actuated by a desire to stifle discussion. The Senate should not stand for such a policy. If Senator Chapman fails to make out a good case he, no doubt, will also fail in his desire to lower the duties ; but I think he is entitled to express his views.

Senator PAYNE:
Tasmania

.- I was waiting for Senator Chapman to advance reasons why the bill should be recommitted. He did not do so. He merely asked the Minister for an explanation, and said that if it was not satisfactory to him he would move that the duties be reduced^ Until we hear the ground for his motion we are -not in a position to judge whether it should be agreed to. If the honorable senator had given his reasons I might have been prepared to support him. Unfortunately, Senator Chapman having spoken, cannot speak again other ‘than to close the debate. I shall therefore have to wait until he speaks again before I can decide, what attitude I shall adopt towards his motion.

Senator Duncan:

– Senator . Chapman would not have been in order in giving his reasons.

Senator PAYNE:

– We cannot decide the merits of the motion until we know the reason for it. If the honorablesenator can make out a good case I have no doubt that the Senate will agree to his motion. All that we know now is that Senator Chapman has received a letter from the Stockowners’ Association of South Australia protesting against certain duties ; but we do not know the reason underlying the protest.

Senator VERRAN:
SOUTH AUSTRALIA · NAT

– Senator Chapman has acted within his rights in moving for the recommittal of this item. There is nothing new in moving that an item be recommitted.

Senator CRAWFORD:

– To move for the ecommittal of an item at this stage, without notifying the Minister beforehand is quite a new procedure.

Senator VERRAN:
SOUTH AUSTRALIA

– Unfortunately for the Minister, the decision does not- rest with him, but with the Senate. It is well known that stock-owners and farmers use large quantities of steel pipes. Senator Chapman’s object in moving his motion is to put their case before the Senate, so that it will be in a position to decide whether the higher duties are warranted. I see no reason why the motion should not be agreed to.

Senator ANDREW:
Victoria

– Last night Senator Chapman intimated to the Honorary Minister (Senator Crawford) and the Leader of the Government in the Senate (Senator Pearce) that he intended to take the action he has taken to-day.

Senator Crawford:

– He did not notify me of any such intention.

Senator ANDREW:

– When Senator Chapman made his request last night the Honorary Minister said that if an opportunity to deal with the item did not present itself last night an opportunity would be given to-day. In the circumstances I cannot understand the Minister’s present attitude. Senator Chapman’s object is to obtain some relief for the primary producers, who use large quantities of steel pipes. After he has expressed his views it will be for the Senate to decide -whether, the duties shall remain or be lowered. I rose particularly to mention the arrangement which was entered into last night between Senator Chapman, the Honorary Minister, and the Leader of the Government.

Senator Crawford:

– I deny it absolutely in so far as I am concerned.

Senator CARROLL:
Western Australia

– I support Senator Chapman’s motion. This item was dealt with so quickly that some honorable senators who desired to speak missed their opportunity. Later, when they protested, the Chairman said that the item had been agreed to and that he could not allow a discussion upon it. We thought he was hasty but he was quite within his rights to declare the item passed because we were too slow. Several of us rose to protest but we accepted the Chairman’s ruling that he had declared the item agreed to because we were aware that there would be an opportunity to deal with the item on recommittal. We desire that opportunity now and I think it is only fair that we should get it.

Senator NEEDHAM:
Western Australia

– I would .be the last to help in burking discussion, because I believe in affording every opportunity for discussion on every subject that comes before the Senate; but it is usual to give very substantial reasons for submitting a motion for the recommittal of a tariff item or a clause of a bill. The honorable senator moving the motion generally intimates that he has fresh evidence to put forward, but I have heard nothing from Senator Chapman about fresh evidence. I understand that the evidence he has to-day is what he had when the item was ‘before the committee, and the only reason he has advanced for the recommittal of the item is that it was put through the committee too hastily. To my mind that is a reflection on the Chairman of

Committees and a confession of slowness on the part of honorable senators.

Senator Carroll:

– The Chairman does not regard it as a reflection on himself and no reflection was intended.

Senator NEEDHAM:

– If the Customs Tariff Bill is recommitted for the purpose of reconsidering item 152 on the flimsy ground put forward by Senator Chapman, we might just as well re-open the discussion on many other items that were put through the committee just as rapidly. If any valid reason had been offered for the recommittal of this item I should support the honorable senator’s motion, but so far I have not heard any.

Senator KINGSMILL:
“Western Australia

– This is the first time I have heard such heated objection to the recommittal of a bill or any part of a bill for a special purpose. If Senator Chapman had sought to have the whole schedule recommitted, there might have been some reason for objection. I notice that most of the opposition comes from honorable senators whose States have benefited by the tariff. This is not an effort on the part of Senator Chapman to reverse a decision already arrived at, because, in committee there was no discussion of item 152. Senator Chapman was anxious to move a request but was not given the opportunity to do so - my recollection of what happened is the same as his - and in the circumstances it is only a matter of courtesy to an honorable senator in the predicament of Senator Chapman to extend to him the privilege of saying what he wished to say, but missed the opportunity of saying, when the schedule was originally under discussion. If the Senate agrees to recommit the bill in the terms of this motion it will be for the purpose of discussing item 152 alone. I do not think it would be very long under discussion, and of course the result would be fairly well assured.

Senator Lynch:

– That is all the more reason why the Government should be chivalrous in the matter.

Senator KINGSMILL:

– Exactly. Between the permanent and temporary protectionists -

Senator Givens:

– And secondary protectionists.

Senator Herbert Hays:

– And wobblers.

Senator KINGSMILL:

– Having regard to all these, the temporary protectionists and those who have received benefits from the schedule, which in some cases have been ill bestowed, the end of the discussion is fairly well assured. ..Why, therefore, the Minister should object ,to the recommittal of the schedule for the purpose of further considering item 152 surprises me. He should be the last to deprive any honorable senator of the right to offer criticism of an item unless, possibly, that criticism is feared.

Senator FINDLEY:
Victoria

– I simply wish to know whether the Government offers any objection to the recommittal of the item. If it does not offer any objection, then we can come speedily to a decision. On the attitude of the Government depends the decision of the Senate.

Senator CRAWFORD:
QueenslandHonorary Minister · NAT

– Mr. President

The PRESIDENT (Senator the Hon. Sir John Newlands). - The Honorary Minister has already spoken.

Senator CRAWFORD:

– I rose merely to state my agreement to the recommittal.

Senator Sir GEORGE PEARCE:
Vice-President Executive Council · Western Australia · NAT

[3.58]. - As the Minister in charge of the bill. has no further opportunity to speak, I wish to say on his behalf that he will agree to the recommittal on the distinct understanding, of course, that the Government will not .accept the request that Senator Chapman will probably submit. I wish also to make it quite clear that no promise waa given last night that the Government would agree to a recommittal. This is what happened: Ministers were desirous of having the Financial Agreement Bill brought in before 10.30 p.m., and Senator Chapman was equally anxious to move for the recommittal of the Customs Tariff Bill. I turned to him and said, “ You can move the recommittal tomorrow”, but I did not promise that the Government would agree to hia motion.

Senator Andrew:

– That is so.

Question resolved in the affirmative.

In Committee (Recommittal)

The schedule -

Division VI. - Metals and Machinery. Item 152-

By omitting the whole of sub-item (a) and inserting in its stead the following sub-item: -

And on and after1st January. 1 929 -

Iron and steel tubes or pipes (except riveted, cast, close jointed or cycle tubes orpipes) not more than 3 inches internal diameter; iron anl steel boiler tubes, ad val., British 40 per cent., intermediate 55 per cent., general . 60 per cent.

Senator CHAPMAN:
South Australia

. - I draw the attention of honorable senators to the deferred duties on iron and steel tubes or pipes, which show increases of from27½ per cent, to 40 per cent. British, 35per cent, to 55 per cent, intermediate, and 40 per cent, to 60 per cent, general. Very little information has been given to us in regard to these increases which will have a vital effect on many industries. The Tariff Board, in its report on the iron and steel industry, devotes only one page to pipes and tubes. I understand that the board met in conference the managing director of the Broken Hill Proprietary Limited, and two accredited representatives of Stewart and Lloyd, of the United Kingdom, who, in conjunction with the Broken Hill Proprietary Limited, are prepared to commence at Newcastle the industry of making iron and steel tubes and pipes. The Tariff Board simply compares the high wages paid in Australia with those paid in Great Britain, and points out that the new industry, when established, will employ about 1,000 workers. The information supplied is, in my opinion, altogether too meagre when we realize how the proposed duties are likely to affect other industries.

Senator Payne:

-What was the recommendation of the Tariff Board?

Senator CHAPMAN:

– I believe that the Tariff Board recommended duties a little higher than those proposed by the Government. I shall not dwell upon the effect the new duties will have on home building and municipal undertakings, we have had sufficient talk about the effect the increased timber duties will have in those directions-but shall speak more particularly of the effect they are likely to have on the agricultural and pastoral industries and, incidentally, upon workers in the cities. There are small farmers in the new Mallee areas who are on the bread line. They could not exist by working only eight hours a day. These duties will place a further burden on them, and if they are driven out of the business ofwheat-growing, the harm done to city and country businesses and the employees will be far greater than the good that will be brought about by the establishment of this new industry of making iron or steel tubes or pipes. If men on the better class agricultural land have these added burdens placed on them they will simply turn their attention to raising sheep, in which very little labour is required; whereas if the better class land is utilized for farming considerable employment is given in the cities. “Workers get lucrative employment in making superphosphates and machinery, and considerable employment is given on the railways, which are required to convey fertilizers and produce. Many other industries indirectly benefit very materially from farming operations. If the farmers are driven to take up pastoral pursuits, they will not feel the effect of it; they will probably do as well out of sheep as at farming; but the city industries will suffer. Let me now examine the effect the duties are likely to have on those engaged in pastoral pursuits. Sheep cannot walk more than a few miles to water in hot weather. The pastoralists have overcome this difficulty by conveying water in pipes long distances across their holdings. The gentleman who represented Flinders in the South Australian Legislative Assembly, has sunk wells and run water out by pipes for 10 and 20 miles in either direction. In that way he has increased the carrying capacity of his country many times over, and he has thus provided a great deal of employment for workers in the city. “We should think twice before we put on the extra duties. I know I shall be told that this increase is “ only a little one “ which will not hurt anybody. The position reminds me of what happens very often when a couple of heavy drinkers go into an hotel for a “spot.” It is “only a little one;” but they have one and then another, and another. Eventually they get to the stage of intoxication, at which they join in singing “Another little drink won’t do us any harm.” And so they go on. We, in our tariff debates, have now reached the stage in this economic debauch when the Minister tries to justify increases of duties by saying “Another little one will not do us any harm,” but we must look at the total effect. In 1925-26, the pastoral and dairying industry of Australia exported £89,000,000 worth of produce and the agricultural industry £33,000,000 worth. Surely those are industries that should be carefully guarded. I am quite aware that tlie industry of making iron and steelpipes and tubes is a new one, but already we have had to give increased protection to established industries because of the increases of wages that have been brought about by increasing duties in other directions. First we increase duties on the recommendation of the Tariff Board, then we have the Arbitration Court awarding higher wages, and next we have further increases of duties. And so a vicious circle is set up. The Tariff Board has warned us that unless we are careful, this country will meet with economic disaster. Not satisfied with protecting established industries, they are asking for additional protection in order to start a new industry. What will be the position? We should watch the ultimate effect of these and other duties upon industry generally. I trust the Minister will give the committee further information. If he does not satisfy me that the higher duties are justified, I intend to submit a request that the. . original deferred duties of 27½ per cent. British, 35 per cent, intermediate, and 40 per cent, general, be restored.

Senator CRAWFORD:
Honorary Minister · Queensland · NAT

– I trust honorable senators will not support Senator Chapman in the reduction which he has suggested. If the honorable senator had moved the request, which he will doubtless move before concluding his speech it would have saved time. The Government approved these increased duties on iron pipes because it was considered that the old rates of 27½ per cent.

British, 35 per cent, intermediate, and 40 per cent, genera] were insufficient to encourage the iron and steel pipe-making industry in Australia.

Senator CHAPMAN:
SOUTH AUSTRALIA · CP

-They have nor, started to manufacture yet.

Senator CRAWFORD:

– No. This matter was very exhaustively inquired into by the Tariff Board, and by the Minister for Tradeand Customs (Mr. Pratten), and, as a ‘result of investigations, it was ascertained that a British company was prepared to establish large works in Australia. They have already proved their bona fides by announcing within the last few days that they intend to establish works at Newcastle. It has been stated during the tariff debate that another very strong combination has been formed to erect works at Port Kembla, and included in theiractivities willbe the manufacture of iron and steel pipes. The latest figures available in regard to importations show that 47,000 tons of pipes were imported during 1926-27, of which quantity 41,000 tons came from Great Britain.

Senator Payne:

– Will these pipes be made out of our own raw material?

Senator CRAWFORD:

– Yes, and the demand for an additional 100,000 tons of pig iron annually will substantially assist the iron smelting industry. The increase in output should enable the manufacturers to reduce the prices of other articles they are producing. Now that Hoskins Limited have announced their intention to manufacture this class of pipe, there should be wholesome competition between Stewart and Lloyds and Hoskins Limited, and there should be no danger of pipe users being charged more than a reasonable price. Honorable senators have observed that these are deferred duties which will not come into operation until the Tariff Board has reported that the Australian manufacturers are in a position to produce iron and steel pipes of good quality in reasonable quantities. The Minister for Trade and Customs will see that the manufacturers do not charge exorbitant prices. The increase in prices which may follow cannot be so great as to substantially affect the man on the land. Although we are dealing only with this item, Senator Chapman discussed the effect of the tariff generally upon settlers on the land. I do not know what would be the position of the man .on the land if it were not for the home market which our secondary industries provide.

Senator THOMAS:
NEW SOUTH WALES · NAT

– What would happen to the secondary industries if there were no settlers on the land?

Senator CRAWFORD:

– The relationship between our secondary and primary industries is so close that they cannot be separated.

Senator THOMAS:
NEW SOUTH WALES · NAT

-If it were not for our primary industries grass would be growing in the city streets.

Senator CRAWFORD:

– In such clr “ cumstances the man on the land would not have a market for a considerable portion of his produce. The discussion should, I think, be confined to the item which has been re-committed. I submit that Senator Chapman has not made out a good case for a reduction in these duties, already agreed to by the Senate.

Senator LYNCH:
Western Australia

– I believe that Senator Chapman was right when he said that this item was agreed to in a somewhat hurried fashion, because there are a number of points in connexion with these proposed duties which have not been ventilated. For instance, the Tariff Board in effect informed the applicants for increased duties that they did not know their own business. The applicants said that they were asking for a duty equal to 50 per cent., but the Tariff Board in its report said that they had understated their case, and proceeded to recommend duties of 50 per cent. British, 60 per cent, intermediate, and 75 per cent, general. It is quite clear that the board would have awarded even higher duties. I emphasize the point that I do not think it is within the functions of the Tariff Board to tell any applicant for increased duties that he is understating his case. According to the reports of the inquiry, no representative of the users of iron pipes was examined. The only witnesses were those who wanted increased duties. They were interested parties, and the Tariff Board came to a decision on ex parte evidence. To appreciate the absurdity of these increased rates one has only to refer to page 40 of the report, where it will be seen that -the board- stated that without a subsidy from another industry or very exceptional preferences over and above the tariff Hoskins Limited could not carry on the manufacture of iron and steel pipes in Australia except at a .loss. I characterize that statement as the height of absurdity. That portion of the board’s report is not in accordance with facts. What is the history of the company? I recall what was said years ago by a representative of that firm, who stayed in the galleries until the last item of the tariff affecting iron and steel duties was passed by Parliament. That gentleman and his representatives led us to believe that the industry was an unpayable one, but Mr. Hoskins died a multi-millionaire. Now the Tariff Board tells us that without a subsidy iron cannot be profitably manufactured in Australia by that firm.. Honorable senators will remember the progress the late Mr. Hoskins made in his business, how he eventually became a mighty iron master, and made millions of money in this country. Any one standing on the top of the Commonwealth Bank in Sydney can see a twelvestorey building owned by Hoskins Limited which was constructed out of the profits of an industry which the Tariff Board says could not be profitably conducted without a subsidy. These are facts which cannot be successfully challenged.. The Tariff Board was not justified in making that statement. The business record of the late Mr. Hoskins proved conclusively that he had made an immense fortune out of the iron and steel industry in this country. Why should we, by means of tariff protection, assist others to become millionaires? Let us reach finality in this matter. I hope that Senator Chapman will submit his request to another place to reduce the duty, so as to make it possible for the farmers and pioneers in our out-back country, where the rainfall is scanty, to obtain iron water pipes at a reasonable price, thus making those areas habitable and, perhaps, profitable. To farmers in such locations water is the first essential.

Senator Chapman:

– There are millions of acres in South Australia that could be occupied profitably if water could be secured at a reasonable price.

Senator LYNCH:

– I agree with the honorable senator, and having had experience of our arid areas, I can speak with, authority. We all know what the Kalgoorlie water scheme, promoted by the late Lord Forrest, meant to the people in the gold-field areas of Western Australia during the early period, and what it means to them to-day. It brought happiness and civilization to thousands of people who, till then, were suffering great privations. Under this item the Government proposes to give an additional protection of 50 per cent. British preferential to the manufacturers of iron pipes. It is about time we took stock of our position. I feel sure that no honorable senator would willingly load the scales in favour of a small section in this community, at the expense of the majority of the people who already are groaning under a heavy load of taxation. We have had a similar experience in connexion with the manufacture of harvesters in Australia. Unfortunately, the firm engaged in that business succeeded in convincing successive governments that, without high protective duties, it could not carry on. Again, the high duties sanctioned by Parliament help manufacturers to become millionaires in far less than the span of an ordinary lifetime. Why should not the unfortunate consumer - the primary producer - get a hearing? It is important to bear in mind also that the applicants made a request for duties of 30s. British, 40s. intermediate, and 50s. a ton in the general tariff on the importations of pig iron, and the board recommended duties of 30s. British, 40s. intermediate and 65s. in the general tariff - actually more in the general tariff than had been asked for. How foolish a person would be if- he insisted upon paying a shopkeeper 15s. for an article which was priced for retail at 10s., or if he insisted upon giving his tailor £9 for a suit of clothes priced at £8. Obviously the Tariff Board considered that the request for increased duties on pig iron was altogether too moderate, and, in effect, said to the applicants’: - “You are asking too little. We intend to give you more than you are asking for, because we believe that you do not know your own business.” Surely honorable senators will do something to put this matter right. Why do not we tell the board that it is not discharging its duties efficiently?

The CHAIRMAN (Senator Plain:
VICTORIA

Order ! The honorable senator’s time has expired.

Senator CARROLL:
Western Australia

– I am sorry that Senator Chapman did not submit a request for a reduction in the duties on this item. If the honorable senator does move in that direction, he will have my support. I agree with Senator Lynch that in the framing of these duties the interests of the consumer have been entirely overlooked. People settled in. the agricultural areas of Western Australia are obliged to make provision for the conservation of water, otherwise they run the’ risk of failure. The Government of that State is committed to an extensive scheme of water conservation, and accordingly it must purchase large supplies of iron pipes for the delivery of water to the various outlying areas. If these higher duties are agreed to the primary producer will again be penalized in the interests of the local manufacturers, because the State Government will be obliged to pay higher prices for the pipes and the farmers who purchase from the Government on long terms, will be called upon to meet additional capital expenditure, together with interest. The Minister (Senator Crawford) has assured us that these increased duties will not mean an increase in the price of iron pipes. I have never yet known manufacturers to reduce the price of their output following the imposition of protective duties. If, as the Minister has suggested, the iron and steel manufacturers wish to sell pipes more cheaply than at present, why did they make a request for higher protective duties? I feel certain that they know their own business well and, unfortunately, they know what this Senate will do in the matter of increased duties. They know that these added duties will be agreed to so as to make it possible. for them to enjoy higher profits. If an industry cannot carry on with a protection of 40 per cent.,- it should not be encouraged.

Senator Chapman:

– This 40 per cent, is only the starting point.

Senator CARROLL:

– Over and over again in the past representatives of various Labour organizations have declared that if an industry is not able to provide fair wages and employment under reasonable conditions, it should not be encouraged. As a matter of fact, with the exception of the wheat and wool production, no industry in Australia is in that favorable position. All have, at times, appealed to Parliament for protection, and in doing so have admitted that without assistance they would go to the wall. Those connected with secondary industries know that if they approach Parliament for protection, they will get a sympathetic hearing and be given all the assistance they ask for. In many instances the assistance is given without consideration of the effect which the duties will have on the people generally. It is the business of every Government, and I think this Government recognizes it, to hold the scales as evenly as possible between, the different sections in the community. I regret, however, that by its action in connexion with these duties, the Government is not observing its obligations. Every vessel that leaves Fremantle for the north-west coast ports of Western Australia is heavily laden with, iron pipes for water conservation purposes, because without such facilities it is impossible to occupy the pastoral areas profitably. If the owner of a run is lucky enough on putting down a well on his property to discover a good supply of water he considers it a better proposition to lay pipes to distant parts of his run for the watering of his stock than to incur the expense of searching for other supplies which, when located, might prove to be indifferent. It is important, therefore, that these water pipes should be available at a reasonable price, in order that the stockcarrying capacity of our pastoral areas may be increased. We heard a good deal during the debate yesterday about the value of the rabbit industry to Australia. I venture to say that all the revenue that might be received from rabbits and rabbit skins for countless years would never-:recoup the people of Australia the loss’ which they have incurred owing to the pest. The pastoral industry is much more valuable to Australia, and I appeal to honorable sena- tors not to impose further taxation upon it in the form of these increased duties. I sincerely hope that Senator

Chapman will move the request for au amendment that he has foreshadowed.

Senator VERRAN:
South Australia

– I was under the impression that Senator Chapman proposed to move a request for an amendment of this item.

Senator Chapman:

– I intend to do so.

Senator VERRAN:

– Senator Lynch has just told us that certain manufacturers in this country have become millionaires as a result of the protection given to their industry.

Senator Carroll:

– None of our farmers have become millionaires.

Senator VERRAN:

– In my State there are some who have done pretty well. I have in mind, however, the position of the unfortunate, struggling farmers in areas remote from centres of civilization. The Government of South Australia has laid hundreds of miles of iron piping for the reticulation of country farming districts. The water in some cases has to be carried 70 or 80 miles. We are only asking that the farmer and the pastoralist shall not be burdened with the extra cost of the proposed duties. The pastoralist may be wealthy in one year, but a drought in the following year will knock him flat. We never hear of iron foundries being in that unenviable position. The Broken Hill Proprietary Limited is not a benevolent or a charitable institution; it is out for every penny it can get. How much more protection do we want than that which is afforded by 12,000 miles of sea? I hope that the Committee will support a reduction of the proposed duties.

Senator CHAPMAN:
South Australia

.- I move-

That the House of Representatives be requested to make the deferred duty, sub-item a, British 27+ per cent.

That will restore the duty to what it was before the schedule was tabled. I do not desire to interfere with the intermediate or the general tariff.

Senator LYNCH:
Western Australia

– I had not concluded my remarks when my time expired, but the only observation I now wish to make is that on more than one occasion the Tariff Board has gone out of its way to recommend higher rates of duty than those which have been sought. Rolled iron or steel teams are a case in point. The applicants asked for 88s., 115s., and 130s., but the board recommended 88s., 115s., and 200s. The makers of iron and steel tubes or pipes asked for 35 per cent., 45 per cent., and 55 per cent. The Tariff Board in effect told them that they had asked for too little, and recommended that they be granted duties of 50 per cent., 60 per cent., and 75 per cent. The board may be likened to a mock court; it hears what the applicants have to say, and then tells them that they do not know their own business, and are too modest in their requests. It even puts words into their mouths. If the proposed duties in this case needed anything to damn ‘them in the minds of reasonable beings, it would be furnished by the action of the board. It is supposed to be the eyes and the ears of Parliament, but has failed to fulfil that requirement. Do honorable senators intend to endorse such behaviour as that to which I have referred? We would be recreant to our trust, faithless to the people who sent us here, and oblivious to the welfare of this country, if we allowed that conduct to continue. It is part and parcel of the insane policy of raising duties sky high. Has any honorable senator heard of a case where a seeker for a reduction of duty got less than he asked for? I have not. This makes one think that the Tariff Board is failing in its duty. The inevitable result is that primary pursuits will be brought to a state of stagnation. Our primary producers are fortified at present by a combination of fair seasons and good prices ; but, when prices revert to the pre-war level and adverse seasons are experienced, they will not be able to meet the demands made upon them by reason of the high duties which are imposed upon their requirements. The Tariff Board has entirely misconceived its functions. . It has no warrant to tell any applicant that the rate of duty asked for is too low: and this Parliament has no right to endorse such behaviour. We should deal with this question along rational lines. If applicants ask for duties of 35 per cent., 40 per cent., and 50 per cent., we should take them at their word and give them no more. The duties proposed by the schedule are nothing less than outrageous.

On behalf of a disorganized but deserving element in the community, I lodge my protest at such a monstrous proposal, and I shall support Senator Chapman’s request.

Senator MILLEN:
Tasmania

– I have listened with interest to this debate, and in the light of it have begun to wonderwhy certain honorable senators were so insistent last night that we should send another item to the Tariff Board. I support Senator Chapman, from the stand-point of the mining industry, which uses a very considerable quantity of piping. Any duty that is over and above a fair thing is a material handicap to this industry, which is of great importance to Australia.

Question - That the request be agreed to- put. The committee divided.

AYES: 10

NOES: 19

Majority . . 9

AYES

NOES

Question so resolved in the negative.

Request negatived.

Item agreed to.

Bill reported without further request; reports adopted.

page 4037

EXCISE TARIFF BILL

Second Reading

Senator CRAWFORD (Queensland-

Honorary Minister) [4.51]. - Imove -

That the bill be now read a second time.

This bill covers two provisions of the excise tariff. It dealswith spirits for the manufacture of scents, toilet preparations and essences, and therepealing of the excise duty on starch made from imported rice. In regard to spirits it is proposed to add the words “ and essences “ after the word “ preparation.” This amendment is proposed in order that Australian manufacturers of fruit essences may be placed on the same footing as are manufacturers of scents and toilet preparations. It will bring the item into line with the departmental practice. As honorable senators are aware, theduty on imported rice has been increased. Prior to the date of the increase, Australian manufacturers of starch from imported rice obtained their supplies of rice free of duty, but had to pay an excise duty of1d. per pound on their product. Now that rice is dutiable, it is not considered equitable that they should have to pay an excise duty. Provision is therefore made in the bill for the repeal of the excise duty on starch made fromm imported rice. This will mean that any Australian manufacturer of starch from rice will have to obtain his supplies from an Australian source or pay duty on his raw material if it is imported.

Question resolved in the affirmative.

Bill read a second time and reported from committee without request.

Report adopted.

page 4038

CUSTOMS TARIFF VALIDATION BILL

Second Reading

Senator CRAWFORD (Queensland-

Honorary Minister) [4.57]. - I move -

That the bill be now read a second time.

Honorable senators will probably remember that before the Customs Tariff Bill which the Senate has just passed was introduced into another place, three different tariff schedules were introduced. On the 11th August, 1926, proposals affecting the duties on iron and steel were brought forward; on the 23rd March, 1927, the duties on rice were increased, while, on the 28th September, 1927, increased duties were imposed on chassis, the revenue derivable therefrom to be used to assist the States in the construction of roads. Later, those three schedules were merged into the Customs Tariff Bill, with which we havejustdealt. This bill provides for the validation of the collection ofthe duties of customs contained in the tariff schedules referred to.

Question resolved in the affirmative.

Bill read a second time and reported from committee without request.

Report adopted.

page 4038

LEAGUE OF NATIONS : EIGHTH ASSEMBLY

Report of Australian Delegation

Order of the day called on for the resumption of the debate (from 30th November, 1927, vide page 2241). on motion by Senator Sir Geoisge Pearce -

That thepaper beprinted.

Question resolved in the affirmative.

page 4038

QUESTION

PENNY WIRELESS MESSAGES

Debate resumed from 15th March (vide page 3818) on motion by Senator Thomas-

That, in the opinion of the Senate, the rate paid to the Amalgamated Wireless Company for messagesfrom Australia to England, in plain language and not marked “ urgent.” should not exceed a penny a word.

Senator NEEDHAM:
Western Australia

– I find myself in a unique position, in that on this occasion I purpose supporting a motion which has been introduced by a supporter of the Government. As a rule, motions submitted by the Government or its followers are antagonistic to the ideals held by honorable senators on this side of the chamber. The motion of Senator Thomas is not, however, in that category. On the contrary it is in accordance with the ideals of the Labour party, and for that reason it has their support. It reads -

That, in the opinion of the Senate, the rate paid to the Amalgamated Wireless Company for messages from Australia to England, in plain language and not marked” urgent,” should not exceed a penny a word.

When examined thoroughly, the motion is not so impracticable or revolutionary as some honorable senators probably think it is. If it is carried it will mean the nationalization of wireless. I compliment Senator Thomas on the able manner in which he presented his case, but in my opinion it contained one weakness. I understood the honorable gentleman to say that even’ if agreement with his motion necessitated a subsidy from the Government to the Amalgamated Wireless Company, that would be worth while in order to obtain the privilege of sending messages by wireless for a penny a word.

Senator THOMAS:
NEW SOUTH WALES · NAT

– I intended to say that even if there was a loss the Government should make it up.

Senator NEEDHAM:

– I should not favour the payment of a subsidy to the company, even to get messages sent at a cheap rate. It would be better for the Government to undertake the work. Government control of wireless would mean that wireless communications would be governed in the interests of every section of the community. I understand that the motion relates only to the transmission of wireless messages from Australia overseas. I agree with Senator Thomas that the more popular we can make these messages the more closely shall we be in touch with our kinsmen in other lands. To my mind it would hasten the bringing about of what I might call an ideal Empire wireless chain, annihilating the vast distances that separate the nations of the British Commonwealth of Nations. If, therefore, for no other purpose than the sentimental one of uniting the Empire, the Senate would be justified, not only in agreeing to the motion submitted by Senator Thomas, but also in going further and seeing that it is put into practical effect. Quite recently we had a very keen debate on the agreement entered into between the Commonwealth Government and Amalgamated Wireless (Australasia) Limited. On that occasion every honorable senator who spoke admitted the great and important part that wireless was playing, not only i’i Empire, but also in international matters, and several attempted to visualize the still more wondrous results that would flow from its further development. Looking at the matter from every stand-point, not forgetting that of defence, I am under the impression that it would be better in every way to have Id. a word wireless messages instead of the charges now imposed. I am pleased that Senator Thomas has kept aloft the beacon he carried many years ago in regard to the control of public utilities and that he has not forgotten his association with the Labour party. He has already said that every Thursday his then colleague, Senator Pearce, was accustomed to- move for the nationalization of something. I hope that honorable senators -sitting alongside Senator Thomas will see the reasonableness of his request and the advantage to be derived from giving effect to it. There is something in’ the old saying that there are none so blind as those who will not see. I believe that there are honorable senators supporting the Government who, while agreeing to the principle set out in the motion submitted by Senator Thomas, may not be willing to put it into effect. I. am not a Biblical scholar, but on this occasion I ma’y be pardoned for quoting the words of the Saviour, in his parable of the sowers -

And their ears are dull of hearing and their eyes they have closed; lost at any time they should see with ‘their eyes and hear with their ears and should understand with their heart and should be converted.

After listening to the excellent address delivered by Senator McLachlan in reply to Senator Thomas, ]t” am. with all due reverence, compelled to class him among those whose ears are dull of hearing, and who shut their eyes, lest at any time they may hear or see something that their hearts will understand and that may convert them. Senator Thomas pointed out the vast difference in the cost of establishing and maintaining wireless stations as against that of establishing and maintaining telegraph stations. The. disparity is considerable. I agree with the honorable senator that just as the Government of the day in Australia controls telephonic and telegraphic communications so it should control wireless telegraphy and wireless telephony. The Government of Great Britain, which is in no sense a Liberal administration, is in full control of wireless telegraphy through its Postmaster-General. In Australia we have a very cheap telegraphic system, because of Government control, and for that reason if for no other we should seriously consider any proposal to establish government control over wireless charges. In his reply to Senator Thomas the Honorary Munster apologized for the charges i made by Amalgamated Wireless (Australasia) Limited. One would imagine “from the figures he quoted that the company had suddenly developed a philanthropic conscience and was conferring the benefit of cheap rates on the people of Australia. It has certainly done good work in Australia by pioneering wireless; but it has been well paid for what it has done. It has not been altogether free from blame in certain respects. When the royal commission was inquiring into wireless telegraphy, it was shown in evidence that Amalgamated Wireless (Australasia) Limited was not all that it -was supposed to be. The commission in one part of its report said - . ,

The evidence disclosed that the operations of this company extended over every field of radio, and in almost . every instance have created friction and dissatisfaction.

Despite the report of that royal commission, the Commonwealth Government has entered into another agreement with this company. The Honorary Minister told us the other night that Australia should be proud of the company. I am not here to pay any homage to it, or to bestow fulsome flattery upon it. Nor am I here to attack it, and I do not propose to do so. Senator McLachlan asked us not to bring within the ambit of our discussion the reasonableness or otherwise of the company’s charges. But if the charges imposed are not excessive, what has the Government and the company to fear? The company is no philanthropic institution. It is run in the interests of its shareholders. It is out for big business. Like all companies, it wants to make profits and pay dividends. I do not blame it for doing so. But that is just the. difference between a public utility controlled by a company and one that is controlled by the Government in the interests of the community. Wireless is a matter that in time of Avar should be controlled by the duly elected representatives of the people. And even in times of peace it should be controlled by the Government, so that the charges made for the service rendered may place it within the reach of all. Dealing with this aspect of the question, the royal commission said -

The interests of Amalgamated Wireless (Australasia) Limited are primarily commercial. The policy of the PostmasterGeneral is public service . at the lowest cost.

That is another difference between a public utility, Government-controlled, and one which is managed by a private concern. What would have happened if a private company had been in charge of Australia’s telegraphic service? At present, we have the most up to date and cheapest telegraphic system in the world. A private company could not have done what the Government has done in extending telegraphic and telephonic facilities in every direction, nor have taken the risks that the Government has taken ; and I venture to say that the rates charged by it would have been infinitely higher than they are under Government control. Despite our heavy cost of construction and maintenance in Australia, we have a telegraphic system second to none in the world, and the cost of sending messages to any part of Australia does not exceed Id. a word. A private company would not have given us that service. As the distance extended from 50 miles to 100 miles, so would the cost of messages have been increased. If our telegraphic system were under the control of a private company, we should probably have to pay 3d. a word for telegraphic messages.

Senator THOMAS:
NEW SOUTH WALES · NAT

– It costs 6s. to send a message of sixteen words from San Francisco to Washington ; such a message can be despatched a similar distance in Australia for ls. 4d.

Senator NEEDHAM:

– Yes ;. and if our telegraphic system were in the hands of private enterprise the people would possibly be exploited to the same extent. Portions of the speech of the Honorary Minister suggested that he was somewhat favorable to the proposal submitted by Senator Thomas, as he stated that 43 per cent, of the total beam traffic was handled at 1 5/8d. and 25 per cent, at 2d. a word. As the people are taking full advantage of these rates it appears to me that, if the rate were lowered to Id. per word the volume of business would increase tremendously. The Honorary Minister further stated that over 68 per cent, of the messages transmitted by the beam ‘ system were paid for at less than 2d. a word, and that the present inwards and outwards traffic between the United Kingdom and Australia totalled about 13,000,000 words a year. If that number of words are despatched at the existing rates we can readily imagine the great increase In traffic which would follow a reduction to Id. a word.

Senator Andrew:

– Wireless is used particularly for transmitting commercial messages. What is likely to increase? traffic ?

Senator NEEDHAM:

– If the rate were reduced t.o1d. a word, a large number of what I may term social or domestic messages would pass between Australia and Great Britain. If persons living in Australia could send wireless messages to England, Scotland, and Ireland at the cost of1d. a word, instead of sending letters in the ordinary course and having to wait over two months for a reply, the increase in the volume of traffic would he most pronounced. The Honorary Minister said he felt sure the company would seize every opportunity to advance its interests and to secure as much business as possible. It would be foolish if it did not, particularly as it is a business concern anxious to obtain all it can for its shareholders. He also said -

Having regard to the outside interests involved, it seems to me that it is impossible under present conditions to ask Amalgamated Wireless (Australasia) Limited to reduce its charges.

The Government appears to be more concerned with outside interests than it ls with the wolfare of the people of the Commonwealth. In what way are we concerned with the interests of the company apart from the shares which the Commonwealth holds in it? We should determine if it is not practicable for the Commonwealth to successfully conduct the wireless service between Australia and Great Britain.

Senator Lynch:

– Have not the Government an interest in the company?

SenatorNEEDHAM. - Yes, it owns a majority of the shares and has representatives on the board of directors; but I am sure Senator Lynch would not favour dual control of our telegraphic and telephonic system. The representation of the Government on the board does not dispose of the fact that the service wouldbe more effectively conducted by the Government. The Bri tishGovernment, which controls wireless services in Great Britain, has not yet instituted a ld.-a-word service ; but that Government, conservative as it is, may yet reduce its rate to a more reasonable figure. The wireless system, under government control, even with slightly higher rates, would be preferable to private control at1d. a word. Although it has been said that the com pany is. desirous of reducing the charges to the public, I have not as yet seen any indication Of that desire. The Honorary Minister, who did not devote sufficient time to the value of a wireless service from a defence view-point, said that a conference sitting in London was dealing with that phase of the question. Even if no other arguments could be adduced in favour of governmental control, the value of such a service to the nation for defence purposes should bc sufficiently, apparent to influence the Government to bring about a change. If, unfortunately, we should again be plunged into the horrors of war, the Government would not hesitate to assume control of wireless. If we cannot depend on private enterprise in a crisis, we should not depend upon the service it renders in times of peace. We. were also informed. that the wireless and cable companies were considering amalgamation, and this was given as one reason why the motion submitted by Senator Thomas should be opposed. I believe that immediately amalgamation was proposed, . the shares of one of the cable companies increased in price to 70s. The suggested amalgamation was only a move on the part of certain interests to increase the price of shares. In conclusion, I repeat that the Government should assume control of wireless at the earliest possible moment, and then reduce the charge for the transmission of messages to1d. a word. I do not think that there is much likelihood of Senator Thomas’s ambitions being realized whilst the service is under the control of private enterprise ; but I believe that when the people of Australia have had an opportunity to express their opinions of ‘ the present administration they will return a government which will negotiate for the control Of this essential service. I am fully convinced of the necessity and practicability of the claim submitted by’ the mover of the motion, and I trustthat we shall soon have a wireless service between the United Kingdom and Australia controlled and operated by the Government, in the interests of not only the Commonwealth, but the Empire as a whole. I support the motion.

Debate (on motionby Senator Lynch) adjourned.

Senate adjournedat 5.36 p.m.

Cite as: Australia, Senate, Debates, 22 March 1928, viewed 22 October 2017, <http://historichansard.net/senate/1928/19280322_senate_10_118/>.

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