Senate
18 June 1930

12th Parliament · 1st Session

  1. Senate
  2. 12th Parliament
  3. 1930

The President (Senator the Hon. W. Kinsgmill) took the chair at 3 p.m., and read prayers.

page 2793

PAPERS

The following papers were presented : -

Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. -

No. 16 of 1930 - Federated Public Service Assistants Association of Australia.

No. 17 of 1930. - Meat Inspectors Association, Commonwealth Public Service.

Judiciary Act and High Court Procedure Act - Rule of Court - Dated 15th May, 1930.

New Guinea Act - Ordinance No. 11 of 1930- Appropriation (No. 2) 1929-1930. Public Service Act -

Appointments - Department of -

Attorney-General - J. M. Benjamin, J. S. Hurrey, T. H. Robinson, C. A. Fox, T. Hodgkinson.

Health - W. J. Owen.

Regulations amended-Statutory Rules 1930, No. 57.

Immigration Act - Regulations amended - Statutory Rules 1930, No. 51.

Nationality Act - Regulations amended - Statutory Rules 1930, No. 58.

Northern Australia Act -

Ordinances of 1930 -

Central Australia - No. 4 - Aboriginals.

North Australia. - No. 5 - Aboriginals.

North Australia Commission - Third Annual Report, year ended 31st December, 1929.

Petroleum Prospecting Act - Regulations - Statutory Rules 1930, No. 47.

Post and Telegraph Act - Regulations amended - Statutory Rules 1930, No. 48 No. 54.

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PUBLIC WORKS COMMITTEE

Automatic Telephone Exchange., Hawthorn

Senator DOOLEY brought up the report of the Parliamentary Standing Committee on Public Works, together with minutes of evidence, relating to the proposed establishment of an automatic telephone exchange at Hawthorn, Victoria.

page 2793

QUESTION

FILMS COMPETITION

Senator DALY:
SOUTH AUSTRALIA · ALP

– On the 29th May, Senator Sir Hal Colebatch asked the following question, upon notice -

Regarding the recent competition for prizeB offered by the Commonwealth Government for Australian-made picture films -

1 ) On what basis were points allotted in determining the order of merit?

What was the maximum number of points obtainable under each heading?

What was the number of points secured under each heading by each of the two pictures placed respectively first and second by the adjudicators?

I am now able to furnish the honorable senator with the following information : -

  1. and 2. -

3.-

page 2793

QUESTION

IMPORTATION OF HOPS

Senator DALY:
Vice-President of the Executive Council · SOUTH AUSTRALIA · ALP

– On the 29th May Senator Ogden asked the Leader of the Government in the Senate, upon notice -

  1. Whether the Government has considered the question of including hops in the list of prohibited imports?
  2. Whether it has considered the question of establishing a compulsory hop pool?

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

  1. Representations regarding the hop industry arising out of the resolutions passed at. the recent conference of hop-growers in Tasmania have already been made to the Government by Tasmanian federal members. Theserepresentations, which cover the matters contained in the honorable senator’s questions, are at present under the consideration of the Government.
  2. See reply to 1.

page 2794

PERMANENT COURT OF INTERNATIONAL JUSTICE,

Optional Clause : Approvalofcommonwealth Government’s Declaration of Acceptance

Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP

.-by leave- Imove-

That the Senate approves of the declaration under Article36 of the Statute of the Permanent Court of International Justice, signed at Geneva on 20th September, 1929, in respect of the Commonwealth of Australia.

This motionasks the Senate to approve of the signature by the Commonwealth Government to its Declaration of Acceptance of the OptionalClause of Article 36 of the Statute of the Permanent Court of International Justice. The declaration reads as follows-: -

On behalf of His Majesty’s Government in the Commonwealth of Australia and subject to ratification, I accept as compulsory, ipso facto and without special convention, on condition of reciprocity, the jurisdiction of the court in conformity with Article 36, paragraph 2, of the Statute of the Court, for a period of ten years and thereafter until such time as notice may be given to terminate the acceptance, over all disputes arising after the ratification of the present declaration with regard to situations or facts subsequent to the said ratification,

Other than -

Disputes in regard to which the parties to the dispute have agreed or shall agree to have recourse to some other method of peaceful settlement, and

Disputes with the Government of any other member of the league which is a member of the British Commonwealth of Nations, all of which disputes shall be settled in such manner as the parties have agreed or shall agree, and

Disputes with regard to questions which by international law fall exclusively within the jurisdiction of the Commonwealth of Australia, and subject to. the. condition that His Majesty’s Government in. the Commonwealth of Australia reserve the light to require that proceedings in the court shall be suspended in respect of. any dispute which has been submitted to and is under consideration by the Council of the League of Nations, provided that notice to suspend is given after the dispute has been submitted to the council and is given within ten days of the notification of the initiation of the proceedings in the court, and provided also that such suspension shall be limited to a period of twelve months or such longerperiod as may be agreed by the parties to the dispute or determined by a decision of all the members of the council other than the parties to the dispute.

This declaration was signed by the representative of the Commonwealth at Geneva on the 20th September last year, and the Government now proposes to ratify this signature and bring it into binding effect. I will briefly refer to the circumstances leading up to the signature.

Article 36 of thestatute of the Permanent Court first provides that the court will deal with cases which the parties refer to it, and matters specially provided for in treaties or conventions. It then goes on to provide by the optional clause that States, parties to the statute of the Court,may agree that all legal disputes belonging to four specified classes will also be referred to the court. These classes are the same as those which, by Article 13 of the Covenant of the League, States members have agreed to be generally suitable for arbitration or judicial settlement The actual wording of the optional clause is lengthy, but the text of it is as follows: -

The members of the League of Nations and the States mentioned in the annex to the Covenant may, either when signing or ratifyingthe protocol, to which the present statute is adjoined, or at a later moment, declare that they recognize as compulsory ipso facto, and without special agreement, in relation to any other member or State accepting the same obligation, the jurisdiction of the court in all or any of the classes of legal disputes concerning

The interpretation of a treaty;

Any question of international law;

The existence of any fact which, if established, would constitute a breach of an. international obligation ;

The nature or extend of the reparation to be made for the breach of an international obligation.

The declaration referred to above may be made unconditionally or on condition of reciprocity on the part of several or certain members or States, or for a certain time.

Intheeventofadispute as to whether thecourthasjurisdiction, the matter shall be settled by the decision of the court.

The Imperial Conference of 1926 discussed whether the members of the British Commonwealth of Nations should accept the optional clause; no decision was arrived at except that none of the British Governmentsshould accept the clause until there hadbeen further consultation between them: In 1928, the Commonwealth Government decidedthat the matter should be further considered, and the Canadian Government proposed to the other governments of the British Commonwealth that further consideration should be given to the question, and some consultation took place. In August of last year the British Government advised that theyconsidered they could accept the optional clause subject to certain reservations, and expressed the hope that all the British Governments might see their way to accept the clause, during the Tenth Assembly of the League, in a form of declaration which all approved. After long consultation, all the governments of the British Commonwealth except the Irish Free State decided to accept the clause on the same terms. The Irish Free State accepted the clause without any reservation.

The result of the acceptance of the optional clause is that the Commonwealth has undertaken to submit to the court for decision any legal dispute belonging to one of the four classes mentioned which is not excluded by the reservations. This means that should the Commonwealth become involved in such a dispute with another State which has also accepted the optional clause, that State can cite the Commonwealth before the Permanent Court. Of course, the Commonwealth can cite the other State in the same way.

The reservations agreed upon after long consultation between the various British Governments exclude four classes of disputes from the compulsory jurisdiction of the court -

  1. Disputes between governments of the British Commonwealth of Nations. One British Government cannot cite another before the court.
  2. Disputes which the parties agree to settle by some other formof peaceful settlement; arbitration, for instance ;
  3. Disputes in connexion with matters. which by international law fall exclusively within the jurisdiction of the Commonwealth;
  4. Disputes which the Commonwealth considers should be submitted to the Council of the League under Articles 12 and 15 of the Covenant.

In this case the court’s jurisdiction is only suspended, and it can deal with the dispute when a certain period has elapsed since the submission to the Council. This reservation enables disputes partly political, partly legal, to be submitted in the first instance to what would probably be a more satisfactory mode of settlement than a purely judicial procedure. Finally, only disputes which arise after the declaration of acceptance has been ratified can be submitted to the court. A State cannot, therefore, cite the Commonwealth for a dispute concerning past facts or events.

Like all decisions, certain reasons could be urged against acceptance. The Commonwealth has agreed to submit certain cases, where the decision may have most important results, to a court which can give a majority decision from which there is no appeal. Moreover, international law is not a code of well-established, generally accepted rules like national law. The court, in the absence of international conventions, may, by article 38 of its statute, be guided by international custom, principles of law, judicial decisions, and teaching of highly qualified publicists. But whilst a State can make laws for its courts to enforce, there is as yet no machinery for enacting or amending such international rules.

But the reasons for acepting the clause in the opinion of the Commonwealth Government and all the other Governments of the British Commonwealth outweigh these disadvantages. On becoming members of the League of Nations we agreed to submit all disputes to some form of peaceful settlement. By the Treaty for the Renunciation of War we have undertaken to seek the solution of international disputes by peaceful means only. The necessity for providing ample means for the peaceful settlement of disputes is obvious and for disputes in which there is a conflict as to legal rights the decision of a judicial body, such as the Permanent Court, should be most satisfactory. We have accepted the optional clause for ten years and our experience during that period will, I trust, prove that the Permanent Court is fully able to discharge the powers we have decided to entrust to it.

In all, 41 States have now signed the Declaration of Acceptance of the Optional Clause, and 26 have ratified their signature.

Debate (on motion by Senator McLachlan) adjourned.

page 2796

WINE EXPORT BOUNTY BILL

Message received from the House of Representatives intimating that it had agreed to the amendment made by the Senate in this bill.

Assent reported.

page 2796

WHEAT MARKETING BILL

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

page 2796

BANKRUPTCY BILL

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

page 2796

CENTRAL RESERVE BANK BILL

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

page 2796

DEVELOPMENT AND MIGRATION BILL

Bill returned from the House of Representatives with an amendment.

In committee: (Consideration of House of Representatives’ amendment).

Souse of Representatives’ amendment. - After clause 5 insert the following new clause : - “ 5a. Notwithstanding anything contained in this act, the appropriation provided by section six of the principal act shall continue in force for the purpose of the payment of remuneration of members of the commission established under that act, in respect of any services rendered prior to the commencement of this act and for which payment has not been made prior to such commencement.”.

Senator DALY:
Vice-President of the Executive Council · South Australia · ALP

.- I move-

That the amendment be agreed to.

Honorable senators will recall that when the bill was being discussed in the Senate, it was pointed out that, since it had been initiated in this chamber, we could not insert in it the necessary appropriation clause, but that it would be moved in another place and the bill returned’ to the Senate for its approval.

Motion agreed to.

Resolution reported; report adopted.

page 2796

COTTON INDUSTRIES BOUNTY BILL

Second Reading

Debate resumed from 30th May (vide page 2349), on motion by Senator Daly -

That the bill be now read a second time.

Senator Sir HAL COLEBATCH (Western Australia) [3.27]. - I intend to ask the Senate to consider the bill not from the point of view of one who is hostile to all forms of bounties and high protection, but rather from the viewpoint of one who believes that, if we are to have a policy under which certain industries shall be assisted by other industries, that policy should be based on definite principles, which must be strictly observed. I should have thought that the present unfortunate position of the Commonwealth would warn the Ministry and honorable members of this Parliament of the danger of an indiscriminate policy of bolstering up certain industries at the expense of other industries. I feel sure that neither the Government nor the members of this Parliament nor the public generally, have paid anything like sufficient attention to the report of the Economic Committee appointed by the former Prime Minister. I offer no excuse for quoting two or three paragraphs from that report which have a particular bearing upon this measure. Let it be remembered that this is not merely a bounty bill. It is a tariff bill as well, because it is freely admitted that, without high protection for the manufacturing side of the cotton industry, the bounty would be wholly ineffective. It follows, therefore, that if we pass this bill, we shall pledge ourselves not only to the payment of a bounty, but also to a tariff. In paragraph 15 of its report the Economic Committee makes this statement: -

From these various and contrary influences we conclude that the policy of protection has not had very great net effects upon the prosperity of the community as a whole. It has not brought all the benefits expected, nor has it been disastrous. But the benefits and costs of the tariff do not march together.

As the tariff grows, the costs overtake the benefits, because the benefits have natural limits, while the costs have not. Australian experience, like that of other countries, demonstrates the natural tendency of protection to increase. The most disquieting effect of the tariff has been the stimulus it has given to demands for government assistance of all kinds, with the consequent demoralizing effect upon self-reliant efficiency throughout all forms of production.

A little later, on the same page, there appears this remark -

Our conclusions on effects indicate that the total burden of the tariff has probably reached the economic limits, and an increase in this burden might threaten the standard of living.

That is the point that I particularly impress upon honorable senators supporting the Government that has brought down this bill. The report continues- - ‘

It is important, therefore, that no further increases in or extensions of the tariff- -

And by the tariff is also meant bonuses of this character- should he made Without the most rigorous scrutiny of the costs involved.

So far we have not had that scrutiny. The report goes on - ‘

We refrain from proposing a drastic weeding out of the worst cases, because, cancellationmust involve the loss of capital invested and. specific employment. But there may be industries winch are costing more to maintain than would be lost by the withdrawal of protection. The savings so made Will allow of’ the substitution’ of any new industry which’ offers favorable prospects of becoming established at a low cost for its protection-. The total burden of protection should not be increased.

At page 86 the matter is summed up very conclusively in these words -

We say again that the resources out of which the subsidizing of industry can be paid are limited.

That is an economic fact that certainly was not realized by the previous Government, and I doubt if it is realized by this Government. The report continues -

They lie in the great natural advantagesof certain industries, including gold and other metals in the past, but now almost confined to wool and some wheat. These great natural advantages are now all exploited, unless a. new mineral field of great richness should be discovered - and our available resources for subsidizing industry are at their maximum. These resources are now stretched as far as they will go in maintaining the standard of living for a growing population. 1 Any great additional strain, such as would be imposed by subsidizing wheat exports, must result in a fall in the standard or a check to population, which might easily go beyond the cessation of immigration and lead to emigration and a decline in the birth rate. It is only, in fact, by continued improvement in efficiency of production that our limited surplus resources can continue to subsidize uneconomic industry on even the present scale.

I point out that that was written twelve months ago, and that everything that has happened since has confirmed those- arguments. We have also reached the stage when, instead of an increased population by excess of arrivals over departures, we have witnessed recently an excess of departures over arrivals. That is the first step, and the next- step, if this policy is persisted in, will be a general lowering of the standard of living of the people.

We recently discussed the granting of a wine bounty. I want to point out three very essential differences’ between that bounty and the one that we are now considering. In the first place, the wine itself pays its. own bounty out of an excise. In this case the taxpayers have to pay the bounty. Should not that fact alone cause us to pause ? We are told that the deficits of the. Common wealth and State Governments for the current year are going to reach the huge total of £9,000,000 sterling. The Commonwealth Treasurer has told the Treasurer of the States- that it is essential that they should endeavour to balance their budgets as the first step towards re-establishing Australia’s . credit. The honorable gentleman said that he intended, to make that endeavour himself in regard to the finances of the Commonwealth. That will necessitate rigorous action, and increased and extreme taxation. We are told that that will occur not only this year, but next year and the year after that. Can we with a light heart face additional burdens? Here we are asked .to commit the country to further expenditure out of the Consolidated Revenue to bonus an industry whose merits have not, I submit, been sufficiently investigated by the Government. Obviously, as the Economic Committee pointed out, this bonus will have to come out of the other industries of the country. It can come from no other source. Can those industries afford it?

The second point of difference between this and the wine bounty is that wine is a luxury and people can please themselves whether they contribute towards, the bonus. I make bold to say that it will be found that a great many will refrain from drinking wine and so contributing to the bonus. Here we are dealing with a necessity to which everybody will be compelled to contribute twice over, first as taxpayers to meet the direct bounty, and then as users of the commodity, through the indirect channel of increased customs duties. The poorer sections of’ the community will have to contribute most, through the increased cost of their clothing. There you have a direct attack on the standard of living of those who can least afford to have that, standard lowered. I do not think that there is .the slightest question that already the standard of living is lowered among a large section of the community by the present policy of ill-considered bonusing of industries. I quote only two instances, sugar and butter. I remind supporters of the Government that only recently the Melbourne Trades Hall raised a protest against the high price of butter, in respect of which there is a form of bonus not very dissimilar from this. I believe that a great many people would be shocked if they were fully awakened to the fact that the present bonus paid to the Australian sugar industry, by the increased cost imposed upon the consumers of sugar in this country, is more than £200 per annum for every person employed in that industry. If that fact were generally known people would begin to wonder whether we can go on indefinitely mak.ing the natural industries of the country support these industries for which the country apparently is not suited. We cannot ‘expect to be suited to every kind of industry.

The third point. of difference between this and the wine bounty is that wine-growing and wine-making is beyond all question an industry entirely suited to Australia. Although I do not like the manner in which the assistance is granted, I would say’ by all means help an industry for which the country is suited, and which can be made to progress. Can it be claimed that cotton is unquestionably an industry for which Australia is suited? At page 112 of its report, the Economic Committee lays down an obviously sound principle that I do not think was followed in this instance, that preference should be given to industries with the least comparative disadvantages, either present or prospective. It is a sound principle that we should endeavour to build up in Austra-

Iia those industries which have the least, comparative disadvantage with those of other countries, and not to bother about those, with the greatest comparative disadvantage. It seems to . me that the amount of protection which is alleged to be necessary in regard to our cotton industry proves beyond all question that it is an industry in which that comparative disadvantage is very great indeed. It is one of the last industries that we should ask the natural industries of this country to support.

Let. us consider the recent history of this industry, its present position, and its future prospects. In 1920 the Queensland Government provided a bonus, as-, a result of which it lost £78,929. Two years later that Government, whose Premier is now the Commonwealth Treasurer, was astute enough to persuade the Commonwealth Government to join in the guarantee. Undeterred by the unfortunate experience of the State, the Commonwealth became a co-partner in guaranteeing the industry. In three seasons the two authorities lost £359,790.. In relation to the next stage let me quote the words of the Leader of the Senate (Senator Daly) -

In view of the increasing losses and other difficulties associated with the industry, the Queensland Government in 1925 urged the Commonwealth to take over the whole matter.

One would have thought that if the losses-‘ were increasing and the difficulties becoming greater, the Commonwealth Government would have said that if theState Government had faith in the industry it should be prepared to carry theburden, seeing that it would benefit if the industry was successful. But it did not do so. On the contrary, it’ took over the whole responsibility, because “of the increasing losses and other difficulties associated with the industry.” In my opinion the personal equation had a lot to do with that decision. The then Premier of Queensland was a man of vigour who knew definitely what hewanted; the Treasurer of the Commonwealth was a man who wanted to be a. little ray of sunshine and to make everybody happy - a man obsessed with theidea that the resources at his hand wereunlimited and that he could grant assistance to all who asked for it. The fact; remains that the Commonwealth, took over the guarantee, and;in four successive seasons paid out another £320,000. What was the result ? The production of cotton fell from 18,282,643 “lb. in 1924-1925 to less than’ 8,000,000 lb. ‘of cotton in 1928- 1929. Senator Daly sought to explain that falling-off by saying that-

The. , -growers have never been able , to see ahead .’for, more than -a few years at a .time. !-:. . .. There were no elements of that stability and permanency of policy conditions and prices that are essential to;, the success of any. industry. ,

With all respect to the worthy Leader of the Senate, I can scarcely refrain from characterizing a statement ‘ of that kind as nonsense. Has any industry in this country ever had stability of- prices or labour .conditions? Does not every successful industry in any part of the world prosper by reason of the necessity for competitive effort and for meeting changing conditions as they arise? Nothing would be more certain to ruin any industry than stability of conditions, for it would destroy all initiative and effort, with the result that very soon the last state of that industry would be worse than the first. During the period that governments dissipated £750,000 of public money, -and’ there was a steady decline in the production of cotton, how did private investors fare? In the Sydney Morning Herald last week there appeared a statement in regard to the BritishAustralian Cotton Association Limited, which indicated that the association intended to sell its assets to Australian Cotton Co-operative Association Limited, a new growers’ concern. As a step preliminary to the sale the old company is asking its- preference shareholders to forgo the whole of the dividends, to which they are entitled in order that some small liquidation dividend may be paid to the ordinary shareholders. So far the preference shareholders have not received any dividend - nor indeed have the ordinary shareholders - although they put £370,000 into the project. The statement goes on to say -

A circular, to shareholders shows that the price of £137,500 in cash as for the. plant and business, and does not include stores, stock, book debts, -or cash assets, shares or bonds. The directors ‘ state that the price : is the full market value of the assets. .’ <

Only a.f ew,months earlier - in. December of: last year-r-the- association’s- balance-‘ sheet,; which, according to. the auditors, contained a truthful .record of its affairs, showed; those assets to.be worth £488,670. The report which accompanied the , balancesheet,” stated - . . . <

Of the- many factors .contributing- to, the lionsuccess,; of the- company the directors attribute as “the chief the fact that the original anticipations of the amount of cotton to’ ‘be 1 grown in Australia had never been -.realized. ‘.On the Strength: of estimates of areas under crop supplied by the Queensland Government, the company had .ordered a large amount of plant, much- of which had been erected and “never required. . ……

Honorable1 senators will see that about £400,000 of private investors’’ money that might have been profitably “invested in other enterprises, has gone) simply because those investors were induced . to place reliance on extravagant Govern-‘ ment ‘promises.’ In its report of. the 25th September, 1928, ‘ the Tariff Board referred to this matter in the following terms - ‘

About this ti me the Commonwealth authorities encouraged every body associated with the cotton industry to take an optimistic view regarding the future. The late Minister for Trade and Customs stated “… the response to the Government’s, policy had been quick and satisfactory. New capital, approximating £2,000,000, had been or would be in the near future expended to develop cotton manufacture …”

The report goes on to mention the amount of “money spent in developing the cotton industry. 1 do not know whether the contemplated sale to which I have referred will be approved by the shareholders of the British-Australian Cotton Association Limited ; but assuming that the sale takes place, it is not unlikely that the new company will again appeal to the public for funds stating that henceforth things will be all right. It will no doubt point out that the Commonwealth Government is behind the cotton industry. The result will probably be that more private money will be invested in a venture which has no more chance of success than had the previous project. The directors of the British-Australian Cotton Association Limited say -

There is some probability of the cottongrowing industry in Australia developing to an appreciable extent in a year or two, but in view of their past experience the directors wo’uld hold out no reasonable hope of that development enabling any dividend to be paid regularly on’ a capital exceeding £250,000.

The present capital of the company is £1,000,000. The directors, who have been in the business for some years, do not take so sanguine a view of the position as the Commonwealth Government does. Indeed, their outlook is so gloomy that they tell their shareholders that if they get £137,500 for assets which in December last were valued at nearly £500,000 they will be lucky.

Evidence is available that there is sufficient suitable land in Queensland for the cultivation of cotton to meet the needs of the Commonwealth, and, in the opinion of the Tariff Board, provided the growers can be assured of a market for their product at prices which will ensure them a reasonable return, the development of the cotton-growing industry in Australia and its establishment on an economic basis is not only a possibility, but is also practically a certainty.

I do not hesitate to say that this is about the most utter nonsense any responsible body has ever put in a report. Could any one imagine anything more stupid than the statement that if the cottongrowers can be assured of prices that will give them a reasonable return they can develop their industry? Under conditions like that one could grow mangosteens at the North Pole or make ice in Hades. What is the use of telling the public that if a profitable price can be assured an industry will be profitable? The Board goes on to say -

In the opinion of the Board any attempt to foster the production of cotton in Australia for export wouldbe unsound from an economic standpoint, seeing that there appears to he little likelihood, if any, of the Australian growers ever being able to secure profitable returns for cotton sold in competition on overseas markets unless perpetually aided by government bounty or subsidy.

Does not that conclusively exclude this industry from those suggested by the Economic Mission as having a minimum of disadvantage in their competition with other countries. The Tariff Board, quoting one of the witnesses who has advocated the payment of bounties, says -

It only needs one season of low world’s values, when our production is being exported, to definitely put an end to cotton-growing in Queensland.

It also says -

The Board suggests that those having a controlling influence over the cotton-growing; industry - such, for example, as the Queensland Cotton Board - should warn growers of the danger of over-production and impress upon them the desirability of restricting their production, so far as practicable, to the requirements of the Australian market.

It adds -

It is apparent that the requirements of the Commonwealth in the class of cotton now grown in Australia will very easilybe reached by the growers and the question will then arise as to the direction in which extension should be guided. In sounding the foregoing note of warning the board merely seeks to prevent the cotton industry reaching the stage of over-production reachedby certain other Australian primary industries in which production has got far beyond the requirements of Australia, thus necessitating export. The result has proved tobe disastrous in the case of those products where Australia is unable and cannot hope to compete on overseas markets with the products of other countries.

In his speech, Senator Daly said -

In 1936 all cotton bounties will cease and it is expected that the industry will then, with adequate tariff protection,be able to carry on successfully without bounties.

I draw attention to the words “ all cotton bounties will cease”, and the words “ adequate tariff protection “. Surely it is stating the obvious. What practical difference is there between a bounty and a tariff? What is the use of saying that we can do away with this bounty if we push the tariff higher up and thus give a bounty indirectly insteadof directly? The effect is exactly the same both on the industry and on the people who will have to pay. To tell us that at the end of 1936 all bounties will disappear so long as adequate tariff protection is afforded, is to indicate that the bounty will be continuous; that it will never disappear; that if the direct bounty is stopped the indirect bounty in the shape of tariff protection will have to be increased.

Senator Sir HAL COLEBATCH.The payment of the bounty.

Senator Sir HAL COLEBATCH.There is a special provision in the Commonwealth Constitution which permits the State to pay a bounty with the con sent of the Commonwealth Parliament, and Iremind Senator Daly that for a long time the Queensland Government paid a bounty on the production of cotton under exactly the same constitutional limitations as exist at present. The other day the Queensland Treasurer said thai his State was the only State that did not want to participate in the £10,000,000 loan which is now on the market, and that Queensland would be the first State to get out of. its difficulties.

Senator Sir HAL COLEBATCH.I do not care what government is responsible for the position of Queensland to-day. In my criticism I spare no government. I speak on principles. Geographers tell us that Queensland is the richest State of the Commonwealth. I think they are right. Why then should it be necessary for the industries of that State to be paid bounties at the expense of other States?

SenatorCooper. - In those figures the honorable senator is not showing special grants to the States.

Senator Sir HAL COLEBATCH.No. But in the case of Western Australia the amount can be easily ascertained. At present the State is£2 8s. per head short of its proportion on the distribution of the £6 per head of the population of -Australia, and gets something less than £1 per head in the shape of a special subsidy.

Senator CRAWFORD:

– Western Australia gets nearly £1 per head of the population under the Federal Main Roads grant.

Senator Sir HAL COLEBATCH:

– I have no desire to be led off the track, but if ever there was anything that hurt Western Australia and the other States it was that wretched roads grant. If the Commonwealth gave a bonus of £1 an ounce on the 400,000 oz. of gold produced annually in Western Australia, and 6d. per bushel on the 40,000,000 bushels of wheat produced in that State, it would total £1,400,000, which, distributed on the present population of the State, would amount to £3 7s. per head. Added to the present subsidy, it would amount to £6 19s., still £1 ls. less than Queensland gets, and ls. less than Victoria gets. Tasmania and South Australia are in the same boat as Western Australia in this respect. Not only have the people of Western Australia paid so much more than the people of other States, but as yet there are no bounties payable on wheat or gold. It is all very well to ask what we should say if we got them. We have not got them, and, so far as the gold bounty is concerned, notwithstanding the resolution of the Canberra conference of the Labour party, we are told that the Commonwealth Government is opposed to it.

The PRESIDENT (Senator the Hon W Kingsmill:
WESTERN AUSTRALIA

– I think the honorable senator would be wise to discontinue a line of argument which has so little to do with the subject under discussion.

Senator Sir HAL COLEBATCH.There is some suggestion at the present time of a contribution by the Commonwealth on wheat production, but the pertinent feature of it is that the Commonwealth Government is insisting on State participation, and that the participating States shall bear part of any loss that may result. Why is something of the same sort not done in regard to cotton?

Senator Cooper made reference to the assistance given by Japan to the growing of cotton. Does the honorable senator think that with the natural conditions existing here, compared with those in

Japan, Australia can, with any reasonable sort of bounty or reasonable kind of tariff protection, compete against Japan in the growing of cotton ? Does he suggest that we are to stop trading with all our neighbours? What is wrong with our buying from Japan things which that country can produce more cheaply than we can, and sending to Japan things we can produce more cheaply than she can ?

Senator Cooper:

– Japan saw the advantage of growing cotton and being dependent on her own labour.

Senator Sir HAL COLEBATCH.Quite so. During the last five years the average value of our exports to Japan has been £11,500,000 per annum, whereas Japan has sold to us less than £4,500,000 worth per annum. In our trade with that country we have had the advantage of over £7,000,000 per annum. Why then should we be concerned if we. buy a little more from Japan so long as we get it cheaply? What advantage is there in imposing a burden upon all the other industries of a country in order that we may buy dear cotton from Queensland instead of cheap cotton from people who are among our best customers? We cannot continue, selling goods to Japan or the rest of the world, unless we are prepared to buy from other countries. Senator Cooper’s remark exposed the fallacy of the idea that we can, by means of big tariff barriers or bounties, compete with countries specially adapted for producing goods for which Australia is not adapted. Japan buys from us twice as much as she sells to us, and we should not be afraid to buy a little more from her, particularly goods she can produce much more cheaply than we can.

I should now like to refer to the- industrial aspect of this proposal. In the first place, I maintain that the payment of this bounty is contrary to the spirit and letter of the Constitution, and that it is entirely wrong for a judge of the Commonwealth Arbitration Court to be brought into a matter of this kind. Constitutional power in industrial matters can be exercised only when an industrial dispute extends beyond the limits of any one State. Although the cotton industry is confined to one State, the bill provides that a judge of the- Arbitration Court shall have power to determine the wage’s and conditions of those engaged in the industry. Under this measure the court is to obtrude in an industrial field which the Constitution definitely provides shall be reserved to the States. The late Mr. Justice Higgins laid down the dictum that if an industry could not pay a fair wage and provide reasonable working conditions it should go out of existence. Those who think that that may be a rather dangerous doctrine have to admit that its effect would be to compel us to concentrate upon those industries best able to pay reasonable wages, and from that viewpoint it may be justified. Now we have a new theory that an industry which cannot, in the ordinary sense, pay fair wages and provide reasonable working conditions, must be supported by other industries. That embodies a principle which is far worse than that enunciated by the late Mr. Justice Higgins, and is so utterly destructive in principle that it would inevitably bring down the standard of living in Australia. It can have no other effect, because its clear meaning is that every worker in a profitable industry must contribute towards the maintenance of those engaged in unprofitable indus. tries. It is utterly wrong and entirely indefensible in principle that a highly protected industry should . give its employees wages and conditions of . labour that cannot be enjoyed by those in other industries which have to compete with the markets of .the world. It is entirely unfair, and I defy any advocate of such a policy to defend it upon any reasonable basis.

Reference was made by the Leader of the Opposition (Senator Sir George Pearce) to Mr. Geoffrey Evans, the cotton expert, who was brought to Australia by the Queensland Government. Before Mr. Evans, who knew his busi ness from beginning to end, came to Australia he was director of agriculture in the province of Bengal, and after he left Australia was immediately snapped up, and to-day is ‘Principal of the Institute of Tropical Agriculture in Trinidad. At the time the Queensland Government, induced the Commonwealth Government to take over the whole pf the hurden, the Queensland Government had ignored the advice of Mr. Evans and allowed the inr dustry to proceed along lines which he entirely condemned. Mr. Evans’s view was that the only phase of cotton-growing in Australia likely to be commercially successful was that conducted by families. If a number of families living close to each other engage in growing cotton, and the picking is done by the children,* how are these industrial conditions going to be regarded? Is the Arbitration Court to determine that these families are not. to receive the bounty because the work is not done by outside labour at wages fixed by the Arbitration Court? Are we to compel such persons to pay bogus wages to their children in order to receive the bounty or are we to deny them the right to receive the bounty and thereby drive out of the industry those most likely to succeed in iti

This .proposal embodies a part of the Government’s effort to keep up the price level in Australia irrespective of what is happening in other countries. I remind honorable senators of the trend of prices in Great Britain during the last two or three years. Taking 100 as a basis iri 1927 we find that by December. 1928, the British wholesale prices had fallen to 95, by December, 1929, to 88.33, and by May, 1930, to 80.6, or a drop of nearly 20 per cent, in three years. During a period of three years, again taking 100 as a basis, cereals and meats fell to 82, other food products to 79, textiles to 71, minerals to 84.3, and miscellaneous to 84.4. Again we have evidence of the fact that we are doing exactly what economists say we must not do. We are bolstering up an industry that has a maximum disadvantage in comparison with that in many other countries. The most pronounced drop is in connexion with textiles, which decreased to 71. No attempt has been made to disguise the fact that a cotton bounty will be utterly futile unless supplemented by high customs duties, thus enabling the manufacturer to pay an excessive price for his raw material. Can there be any other result but an increase in cost to the consumer, which in this case means the entire community? Because I am satisfied that that must be the result, and that it must mean an increase in the cost of production, and that nothing can save Australia except a decrease in the cost of production, I intend to vote against the second reading of the bill.

Senator CRAWFORD:
Queensland

– It is not often that we have an opportunity to hear a speech from a declared freetrader such as Senator Colebatch.

Senator Sir HAL COLEBATCH:
WESTERN AUSTRALIA · NAT

– I am not a declared freetrader.

Senator CRAWFORD:

– If the majority of honorable senators held similar opinions our protective policy would soon have to be abandoned, and before very long, the workers of Australia, if they did not fall to the level of the coolies of Java and India, would at least have to submit to a standard of living similar to that of the poor whites of South Africa. We must give grave consideration to any proposal which will assist in maintaining’ our present standard of living. I am sorry that in discussing this subject Senator Colebatch had so much to say concerning the State of Queensland. I do not propose to discuss this proposal from the viewpoint of Queensland, but shall endeavour to do so from the standpoint of a good Australian. We are not dealing with a country small in area, such as Great Britain or New Zealand, but with a continent in which we have every class of soil, and a full range of climate, so that we are able to produce the whole of our requirements. We have vast areas where tropical and sub-tropical conditions obtain, and if we do not encourage production suitable to such areas we shall not be able to claim that they are being effectively settled and developed. In Queensland we have a population of approximately 1,000,000 persons; but in parallel latitudes in Central and Western Australia, the total white population is less than 5,000 persons.

Senator Sir George Pearce:

– Does not the honorable senator mean 500,000?

Senator CRAWFORD:

– No. I am referring to those settled in Central and Western Australia within the same latitude as Queensland. Although Senator Colebatch finds it difficult to debate any subject without referring to the sugar industry, it is not my intention to refer to it at length.

Senator Sir Hal Colebatch:

– I make up for that by not using sugar.

Senator CRAWFORD:

– I did not think the honorable senator’s prejudice went that far. The amount which the people of the other States pay for sugar produced in Queensland is more than compensated for by what the people of Queensland purchase from the other States. The conditions of Western Australia are of course peculiar and deserve special consideration.

Senator Sampson:

– Apparently Queensland’s circumstances are also peculiar.

Senator CRAWFORD:

– I have already said that they are. But why speak of that part of the Commonwealth as Queensland ? Why not treat it in our discussions and in our legislation as an integral part of the Commonwealth which it is necessary to develop if we are to hold this great country for the white race ? After reading the report of the British Economic MissionI concluded that its members studied every subject from the standpoint of Great Britain. They did not look at anything from the Australian standpoint, and throughout their report did not get beyond generalities. In effect, they advocated that we should import from Great Britain everything which we could purchase there for less than we could produce it in Australia.

Senator Sir Hal Colebatch:

– I referred to the Australian Economic Committee and not to the British Economic Mission.

Senator CRAWFORD:

– I misunderstood the honorable senator. Professional economists are as much astray as are the members of the British Economic Mission. If this Parliament is to be guided by professional economists, we are not likely to pass much useful legislation.

Senator Sampson:

– Does the honorable senator pin his faith to the opinions, of amateurs ?

Senator CRAWFORD:

– No, to practical business men. Judged by the standard of practical business men the professional economists are amateurs. Is it not a fact that, in 1914, many economists predicted that the war would not last morethan six months, because the countries engaged would be unable to finance it? Is it not a fact also that, late in 1918, arrangements had been made, by the Allies at least, to finance the war for another two years if necessary?

Senator Sir GEORGE PEARCE:

– We are financing it now all right.

Senator CRAWFORD:

– We are all aware of the burdens laid upon us by the war, but up to the present they have not proved beyond our -capacity . to meet. Even if we had known the war would prove so costly the Commonwealth would not have hesitated for a moment to play its part.

It is true that the cotton industry has not proved so successful as was anticipated when the existing legislation was passed. But I have every confidence that if it receives the same consideration that is given to other industries requiring protection, eventually it will become a source of considerable wealth, which will be shared by all the people of Australia. Unlike New South Wales and Victoria, Queensland has not established a large number of secondary industries, so every ship which carries Queensland cotton to the southern States’ for manufacturing purposes will, on the return journey, carry to Queensland from the other States products which, compared with overseas prices, will be quite as costly as anything which the other States purchase from Queensland.

Senator Colebatch stated that conditions in the Commonwealth were not suited for the production of cotton. I entirely disagree with the honorable senator. The natural conditions of Queensland will permit of the growth of cotton equal in quality to that produced in any other country, the only difference being in the wages paid to workers engaged in the industry. This, however, is not likely to be such a handicap in the future as it has been hitherto, because of the increasing use made of mechanical appliances for the ginning of cotton. It is not now necessary to exercise the same care in separating the cotton from the boll, or from parts of the cotton bush. I understand that, in the United States of America, the practice now is to gather the boll by the process known as “ snapping and up-to-date machinery turns out lint quite as clean as when the cotton was picked carefully out of the boll. Senator Colebatch stated also that the Queensland Government was not prepared to accept any financial obligation in connexion with the industry. I presume he was not aware that the Queensland Government is guaranteeing repayment to the Commonwealth Bank of £150,000, the amount required to purchase the ginneries of the Australian Cotton Association. This includes £137,000 for the association’s ginneries or mills, and a sufficient sum for the purchase of new machinery, which is now on its way from America. When this machinery is installed it is anticipated that the cost of picking will be reduced, and since the amount of capital involved will be less, the cost of ginning will not’ be so great as hitherto. It is expected also that better prices will rule in future for the cotton seed. In view of all the circumstances it seems to me that very little objection can be taken to the passing of this bill.

As for the encouragement given to the industry by the imposition of customs duties, all I need say is that it will be on lines similar to protection given to practically every other Australian industry. We have very few industries that are not receiving assistance either in the form of customs duties or the payment of bounties. Certain classes of cotton goods are being manufactured in Australia. Two years ago I visited two factories in Melbourne. Both concerns were being carried on successfully. One factory was manufacturing weekly 2,000 dozen towels for which there was a ready sale in every State of the Commonwealth. It is true that all the yarn for the manufacture of those towels was being imported, but the manager told me that there was no reason why the cotton should not be grown and the yarn manufactured in Australia.

Senator HERBERT Hays:

– Was that cotton produced from the same variety that is grown in Queensland?

Senator CRAWFORD:

– No.

Senator HERBERT Hays:

– That is an important matter.

Senator CRAWFORD:

– I am aware of that, but I know of no variety of cotton which cannot be grown in Queensland, although I admit it would not be possible to produce every variety immediately. When the industry was established in that State it was believed that a particular variety waa the most profitable to produce and as world’s prices were then at a high level the cotton was grown with a view to export as well as for sale within Australia. Although all the necessary varieties may be grown in Queensland there is provision in the Tariff Act to permit of the importation of those kinds that are not grown, if they are considered requisite for the manufacture of cotton goods. It is possible also that the weaving of cotton goods in Australia will progress more rapidly than the spinning of cotton yarn. In this event there would be no objection to the importation of the* necessary yarn, so that no branch of the manufacturing industry need be handicapped.

In dealing with this bill we should give careful consideration to the economic position of Australia. Last year our imports were valued at over £160,000,000. If the value of our exports amounts to, say, £120,000,000, and if we cannot balance our trade figures by borrowing overseas, how are we going to bridge the gap in’ our finances? Obviously the only course is to produce locally more of our own requirements, and in this way provide for the employment of more of our own people. I admit that difficulties confront us, but we have surmounted them on previous occasions, and I have no doubt that we shall’ do so again. Many industries which to-day give employment to a large number of our people, in their earlier stages had to overcome serious obstacles to progress. I am aware that many people believe that an increase in the value of our exports is the only way to balance our overseas trade and improve our present position. I suggest, however, that if our purchases overseas are reduced by £1,000,000 the net effect upon the finances of the Commonwealth will be exactly the same as if we increased the value of our export trade by £1,000,000. It is difficult to see how, in the present state of our trade, we can materially increase exports for some time to come. We know the position of the wool industry. It . appears to me that the more wool we produce the lower will be the price that we shall receive for it, as the world’s production of wool has in- creased very rapidly during recent years. There is also a limit to the quantity of wheat that we can export. Nobody can foretell the possibilities of the world’s wool and wheat markets, but we are on perfectly safe ground in endeavouring to increase the production of those commodities that we need foi* our own consumption.. The position would be very different if we were living in a freetrade world; but we are not. So far as I am aware, there is not a freetrade country in the world to-day.

Senator Sir George Pearce:

– Great Britain is a freetrade country for our wheat and our wool.

Senator CRAWFORD:

– Great Britain believes in freetrade for the commodities that it cannot produce, and a similar position exists in a number of other countries. We can produce cotton in Australia, and I believe that it will be very much to our interest to establish the industry in this country. It is true that Great Britain does not impose a duty upon our wool or wheat, but the British buyer of. those products does not give one farthing more for a pound of wool or for a bushel of wheat because it comes from Australia.

Senator Barnes:

– Although our wool employs very nearly half its population in producing the manufactured article.

Senator CRAWFORD:

– That is very true. We know that .quite recently, in countries older than Australia, with larger populations, and industries in a more advanced condition than ours, it has been considered advisable to increase duties. That was done by the United States of America, with its population of over 120,000,000, and by our sister dominion, Canada. Probably it will not be possible, for a long time, to develop the cotton industry sufficiently to manufacture all classes of cotton fabric. I think that there are more kinds of fabric made from cotton than from any other kind of material. There are, however, certain ‘ ‘ classes of cotton goods that can’ -be produced in a large way in. a very short time in Australia, if sufficient protection is “given to the industry. I have already referred to the extent to which towels are manufactured here. I also understand that if we concentrate on the manufacture of all the different types of duck we shall need for the purpose two to three times the quantity of raw cotton that we are now producing. Australia is already manufacturing a considerable quantity of cotton tweeds. I .remember that when the last tariff schedule was brought down, increasing the duty on imported cotton tweeds, Senator Payne prophesied that garments made from that material would be prohibitive in price, because of that duty. I doubt whether cotton tweeds have ever been procurable at a lower price than they are to-day.

Senator Payne:

– I can give the reason for that.

Senator CRAWFORD:

– Irrespective of what the reason may be, I have, stated a fact. A similar remark applies to all of the items to which increased protection was given under the amended tariff schedules submitted by the Bruce-Page Government. It rarely follows that increased protection means an increase in the price of the goods affected. Our experience is that articles manufactured from cotton have decreased in price since the. last tariff schedule was approved by Parliament.

Senator Payne:

– The price of this particular commodity increased by 40 per cent.

Senator CRAWFORD:

– It is now possible to buy cotton tweed trousers for 2s. 6d. a pair. Anybody who considers that that price is too high is difficult to satisfy. That result is the very opposite from that prophesied by Senator Payne. The passing of this bill and the imposition of additional duties on imported cotton products will result in the employment of a great many more Australians, not only in that part of the Commonwealth where cotton is grown, but in those parts where it is spun into yarn and woven into fabrics. I can see no hope of improving the unfortunate economic position in which we now find ourselves, unless we are able to provide a variety of employment for our people. We must realize that it is impossible to find employment on the land for a greater percentage of our population than that at present engaged in rural industries. In all other countries having conditions comparable with ours, there has been a decline in the percentage of people engaged in land pursuits,’ although the volume of production has increased. That is due chiefly to the mechanization of the. agricultural industry, enabling one man to-day to do the work that required a number of men in comparatively recent years. I was brought up on a mixed farm, and I remember that in my early days most of the ploughing was done with single furrow ploughs. That was long before the days -of tractors or even of disc ploughs. When harvesting it was necessary to employ ten men to bind, and two men to put the sheaves into stooks. It was considered a good day’s work to harvest ten acres. Stacking and threshing were additional tasks. To-day, we have machines that enable three men to harvest completely from 40 to 50 acres a day.

A couple of years ago a very interesting report was issued by the Economic Committee that met at Geneva. It stated that while the population of the world had increased by only 5 per cent, since the termination, of the war,, the production of food-stuffs and of raw material from the land had increased by . 18 per. cent. While we may not have a surplus of certain commodities that the. world requires to-day, we certainly have more than the world is in a position to purchase.

Senator Herbert Hays:

– That may apply to cotton. .

Senator CRAWFORD:

– It may; just as it. applies to wool and wheat, and as it may apply to the flax that Tasmania proposes to grow if the Government will pay a bounty on the industry.. In view of all these circumstances it becomes imperative to produce those commodities that we can consume so that we may reduce the quantity of goods that we purchase from abroad. I am satisfied that if honorable senators will rid themselves of the idea that the purpose of the bill is merely to provide a special concession for Queensland, and, instead, will realize that it is a proposal to encourage and assist to develop an Australian industry that will benefit the whole community, it will be passed by a unanimous vote.

Senator PAYNE:
Tasmania

.- I should not have felt disposed to” speak upon this measure had it not ‘been for the challenge thrown out to me by Senator Crawford. I shall not indulge in any heroics, as did the honorable senator in his opening remarks. I shall deal with this matter as it affects Australia. For many years I have interested myself in the possibility of growing cotton successfully in Australia. Time after time I have visited Queensland to investigate the industry personally. I have done so because I looked forward to the time when we would grow cotton on such a commercial basis that, with the aid of our Lancashire friends, we should be able to manufacture in Australia all our requirements in the way of cotton textiles. I have been keen on seeing the cotton-growing industry established in Australia, provided it could be established on sound lines. The greatest danger confronting the industry is contained in this bill, in which it is laid down that the bounty will not be paid unless certain conditions with regard to labour are observed by those engaged in the growing of cotton. I say unhesitatingly that, if the ordinary conditions of labour are to apply to the growing of cotton, the cottongrowing industry in Australia is foredoomed to failure. Five or six years ago. when there was a revival in the industry, I wrote to the head of the British- Australian Cotton Growing Association. He stated that the industry could develop as a sound commercial proposition only if the growing of cotton was undertaken on a family basis as an adjunct to other forms of farming, and managed exclusively by the family. ‘ He was insistent that, if the labour conditions operating in industry generally were to apply to the cotton-growing industry, that industry must inevitably fail. Yet the bill provides for those conditions. I agree with those who say that we can grow anything, or manufacture anything, in Australia. But the point is whether we can do so within the reach of the purchasing power of our people. The bounty proposed in this bill on cotton seed and cotton yarn of the count in ordinary use, namely 16, amounts to nearly lOd. a lb., whereas the landed cost of yarn imported from America, on which the highest duty is paid, is only ls. 7£d. a lb.

I am not opposed to the establishment of the cotton industry in Australia ; but I do want to see it established on sound lines. I know of no other industry which we have attempted to assist by way of a bounty to the extent provided in this bill. There was a good deal of sound common-sense in the argument of Senator Colebatch that it would be unreasonable for Australians to expect to manufacture or produce everything they required. Senator Crawford said that Australia should be self-contained in these matters. The term “ self-contained “ is frequently used by people who give little thought to its meaning. I do not suggest that the honorable senator so used it. But to be self-contained, Australia would have, not only to manufacture all the goods her people require, but would also have to be able to consume her total primary production. If we have to depend upon the outside world to take 75 per cent, of our primary production, as is the case to-day, how can we be self-contained ? Although desirous of seeing industries established in Australia, I feel that it would be unwise to say that, because we can establish an industry here, we must do so regardless of cost. That brings me to a matter referred to by Senator Crawford, to which I had not intended to allude. The honorable senator referred to the attitude I adopted some time ago when, in connexion with a tariff schedule, the item “ cotton tweed “ was under discussion. That tariff schedule imposed an enormously high duty on a material which is used in the manufacture of clothing which is worn only by the working men of Australia.

Senator Herbert Hays:

– It is all a question of the definition of the term “ working men “.

Senator PAYNE:

– The labouring classes of Australia are the only people who use cotton tweed as a foundation for their garments.

Senator Hoare:

-I have seen a banker in cotton-tweed trousers working in his garden.

Senator PAYNE:

– In a matter with which I am thoroughly conversant, I take second place to no one. At the time of which I speak, Senator Crawford was Acting Minister for Trade and Customs, and he exhibited samples of cotton tweed which he said were produced in four Australian mills.. I visited one of these mills, in which I was financially interested, and obtained samples of their cotton tweeds. The proprietors of those mills told the Tariff Board that they were prepared to manufacture the whole of Australia’s cotton-tweed requirements, amounting to 4,500,000 yards per annum. The price charged by them for that material was from 2s. 3d. to 2s. 6d. a yard, although an exactly similar product could be landed here at from ls. 4d., to ls. 6d. a yard, duty paid. Thus they would be able to capture the market for the cotton tweed because of the tariff protection afforded the industry, namely ls. a yard plus 35 per cent. This enabled them to sell their product at a slightly lower price than that at which the imported material could be sold. The information supplied by them to the Tariff Board gave me a basis of calculation on which I submitted some figures to the Senate later. At the time I challenged Senator Crawford to disprove the accuracy of my figures, but he did not attempt to do so. I shall again give those figures, and I challenge any honorable senator to prove that they are incorrect. The 4,500,000 yards of cotton tweed, to which I have referred, if made into trousers, would produce 1,80’0,000 pairs. The mill price for the tweed is 2s. 6d. a yard, as against ls. 6d. for imported British cotton tweed before the heavy duty was imposed. That means an addition of 3s. 9d. to the ‘cost of every pair of trousers sold to the working men of Australia provided they supply the whole of the tweed required at the prices quoted. I ascertained from a British manufacturer that 108 girls would be required to tend the looms necessary to produce that quantity of tweed in a British factory. Allowing for the inexperience of Australian girls, I based my calculation on double that number, and assessed their wage at £2 10s. a week. On that basis, the wages bill for the 216 girls so employed would be £28,000 a year. I then allowed another £28,000 for the wages of the pressers, folders, packers, distributors and others. In round figures, the total wages payable, according to my estimate, amounted to £60,000. I pointed out that the new prohibitive duty would necessitate the working men of Australia paying £337,000 more for their working trousers than they paid the year before.

Those figures stand to-day. I challenge any honorable senator to disprove them. Are we justified in granting a bounty to protect an industry whose wages bill amounts to £60,000 per annum if by so doing the working men of this country are mulcted in the payment of an additional £337,000?

Senator CRAWFORD:

– They have not been called upon to pay it.

Senator PAYNE:

– They have. I took the trouble to verify my figures the next year. I went to 20 or 30 of the leading retail establishments in Australia that deal with working men. I found that for trousers which in previous years sold at 8s. 9d. a pair, they were asking 12s. 9d. - 4s. more than they paid previously. My estimate was 3s. 9d. Honorable senators will therefore see that the statement of Senator Crawford that cotton-tweed trousers can be obtained in Australia for 2s. 6d. is incorrect. My calculations were in respect of standard cotton tweed, such as was being manufactured by the Australian mills when they presented their case to the Tariff Board. In Melbourne the other day, an establishment offered for sale, at 6d. a pair, 300 pairs of women’s hosiery, the mill price of which was 27s. 6d. a dozen. That is to continue’ for a week. Would I be justified in saying that there we have an instance of the beneficial effect of the tariff? Certainly not. The firm does that solely as an advertisement. It is prepared to lose £30 a day as an- advertisement in order to draw people to its establishment where they will buy other goods which will be sold at a high profit.

Senator Daly:

– Is the honorable senator in favour of a bounty on flax?

The PRESIDENT (Senator the Hon W Kingsmill:

– The honorable senator need not answer that question. Honorable senators are showing a tendency towards irrelevancy, which is regrettable.

Senator PAYNE:

– I rose to deal with this matter on its merits, as I try to do with every measure. I can well understand an honorable senator criticizing earnestly and faithfully a proposal for the payment of a bounty in one direction, while supporting the payment of a bounty in another direction. If the present proposal had as its basis the utilization of something which we are producing in Australia and is now going to waste, but which by the granting of a bounty can be made a great asset to the country, it would be quite a different matter from a proposal to bring into being an asset that hitherto has not been in existence here.

Senator CRAWFORD:

– Land is going to waste.

Senator PAYNE:

– From what I know of the country on which cotton is grown in Australia, the fields are eminently suitable for other forms of agriculture, and in all probability would produce almost as good a result as can be secured by devoting the land to cotton production. Cotton is not grown to-day on lands not suitable for other production in the Dawson Valley or in the neighbourhood of Rockhampton.

Senator Cooper:

– A lot of new land has been thrown open for growing cotton.

Senator PAYNE:

– It could also be utilized for dairying.

Senator Cooper:

– Not necessarily.

Senator PAYNE:

– I am not opposed to encouragement being given to the cotton-growing industry. My objection to the present bill is that it lays down certain artificial conditions which, I think, will imperil the success of the industry. I refer to the introduction of ordinary industrial conditions into the small cotton-fields of Queensland. I should have liked to see a provision in the measure limiting the payment of the bounty in such a way that it would compel cotton-growing to be a small man’s task. If that were done, another 5,000 people could be put on the land in Queensland.

Senator CRAWFORD:

– The honorable senator might get that provision inserted in committee.

Senator PAYNE:

– I doubt if the honorable senator would help me to do so. If the bill does get into committee, there are points upon which a good deal of information will be required before some of the clauses can be accepted.

I want to see the cotton industry encouraged on sound and reasonable lines. But the fact that in addition to the bounty, which in itself is more than 50 per cent, on the cost of the finished article that can be imported from foreign countries, there is a proposal in another bill to increase the duty on cotton yarn from 20 per cent, intermediate and 35 per cent, general to 35 per cent, ‘intermediate and 55 per cent, general, makes one wonder how far Parliament is prepared to go in . the matter. My anxiety is to enable the people of Australia to feed, clothe, and house themselves at a reasonable cost. There is no doubt we shall have to discard some of the ideas that have permeated us. During the last ten years we have had the idea that we can maintain a high standard by artificial means. Australia, because of its recuperative powers and wonderful natural resources, has been able to do so better than any other country in the world, but the position is different to-day. We are now faced with adversity, and, as individuals and as a community, we have to meet it by making sacrifices. We must do without many of the things to which we have been accustomed, but which are not really essential to our well-being. It is only by a policy of that kind that we can hope to get through this period of adversity with anything like reasonable success.

The President having put the question and called for the “ Ayes “ and “ Noes “,

Senator MCLACHLAN:
South Australia

– Mr. President-

The PRESIDENT (Senator the Hon W Kingsmill:

– I do not know that I am entitled to allow the honorable senator to proceed now that the question has been put and the voices called, but as the voices were not given freely I shall put the question again. The question is, “ That the bill be now read a second time

Senator McLACHLAN:

– Shall I now be in order in proceeding?

The PRESIDENT:

– Feeling certain that many honorable senators wish to speak on this bill I prefer to decide the issue on common-sense grounds rather than by a strict adherence to the Standing Orders. The honorable senator may proceed.

Senator McLACHLAN:

– I am obliged to you, sir, for ruling on the principles of common sense, because in the short contribution that I wish to make to the discussion of this measure I shall endeavour to apply the same principles. If an overwhelming case has been made out for honorable senators to vote against the bill, it has been made partly by the

Minister himself. With great candour and a good deal of detail he has given the history of the endeavours to produce cotton in Australia. The efforts in this respect date back sixty or seventy years. They culminated in the assistance ultimately offered by the Queensland Government which subsequently cajoled the Commonwealth Government into coming to its aid and becoming a party to the arrangement for the payment of a bounty. It appears that already £767,000 of the taxpayers’ money has been ladled out to this industry, and no share of the amount has been contributed by the industry itself. To me it seems to be hopeless to salve the wreck under Australian conditions.

I listened with interest to Senator Crawford because I was endeavouring to keep an open mind on the question. I realize that any industry capable of development in Australia should be stimulated; but I have been driven by dint of hard reasoning to the view that cotton-growing is not one of those industries. Senator Crawford and most honorable senators who have spoken in support of the bill have invited us to regard it as a coming industry, but nothing concrete has been placed before us to indicate that it is ever likely to succeed in Australia. We know that it has failed in the past and, I understand, under most advantageous conditions. No one has pointed out what future advantage is to be derived by the establishment of the cotton industry here. Senator Crawford, it is true, has referred to the expectation of improvements in picking and ginning methods. These expectations are not new. Years ago I was approached with a view to my taking an interest in a company to be formed for the purpose of doing something in connexion with cotton, and like others, had to listen to the story told of new methods that were to be adopted to reduce expenses. Everything in the garden was to be lovely. My friend, however, says that he prefers to rely on the views of practical economists, and it is . as a practical economist that I invite honorable senators to consider the question before us to-day. At this time of strenuous financial difficulty is it wise for us to say to the world that we propose to commit ourselves to the expenditure of £800,000 to buttress an industry that has already had £767,000 of the taxpayers’ money lavished upon it, besides additional assistance in the way of a guarantee on overdrafts by the State Government of Queensland? It has had every assistance, yet it is impossible for it to carry on without further help for another six and a half years.

However earnest the Minister may be in his desire to terminate the payment of the bounty at the end of six and a half years, I am afraid that once we agree to pay it for that period we shall have to continue to pay it for a further period, or, as Senator Colebatch has pointed out, impose a prohibitive customs duty. No figures have been placed before us to indicate the stimulus to employment that has been afforded by the payment of a bounty on cotton production. It is important that we should have this information, yet it has not been supplied. What will the payment of this bounty do to relieve the present unemployment?

Senator Thompson:

– A lot of men are now employed in the industry.

Senator McLACHLAN:

– In South Australia £5,000 a week is being paid by the State Government to relieve unemployment, yet here we are being asked to ladle out £800,000 of the taxpayers’ money to keep alive an industry that has proved a failure. The predictions of the past that the industry would fail have been demonstrated to-day and surely it is time we took a stand in the interests of the sound industries of Australia.

Senator Crawford:

– The honorable senator was favorable to the payment of a wine bounty.

SenatorMcLACHLAN. - I voted for a bounty on the export of wine because there was a moral responsibility on the Government as there would be on any other government to pay such a bounty. The wine bounty, as pointed out by Senator Colebatch, differs from a cotton bounty. The wine industry bears the full burden of the bounty it receives, whereas the cotton industry never can and never will bear even a share of the burden of a bounty it receives. Nothing is more needed in this country than the production of produce for export. No bounty is paid on wine unless it is exported.

I defy any one to say that we shall ever be able to produce cotton in Australia for export. I have no desire to raise the question of freetrade versus protection in this matter although I think we might describe what is now proposed as “fool trade” instead of freetrade. I have always been a protectionist, but there is a limit to what can be done in the way of protection. We have already reached that limit in Australia. We have had our lesson in regard to cotton, and if we refuse to profit by it the blame must rest on those who support the Government in propounding a continuation of one of the most foolish policies that has ever been embarked upon in Australia. Cottongrowing is not a native industry. It has had tremendous buttressing with government money. It has failed irretrievably, and will fail again. What advantage have we derived from it? What employment will be provided by it, although it is buttressed by enormous duties amounting to 55 per cent, and by a bounty which, as Senator Payne has pointed out, amounts to 10¼d. on an article which can be imported for ls.7£d. ?

Senator Thompson:

– The bounty is to be paid only for a specified period.

Senator McLACHLAN:

– I have never known the payment of a bounty to cease at the expiration of the period originally intended. If honorable senators will refer to the records they will find that, when a cotton bounty was first provided, Parliament was told that it would be paid only for a certain period; but its payment has been continued. The original act provides for the payment of a bounty until August, 1931. The Government, having supported the principle of the payment of bounties, which, in this instance, is uneconomic and unsound, finds it difficult to recede. A case has not been made out in support of the proposals in the bill, and I believe the industry will ultimately be faced with great difficulties.. The facts disclosed by Senator Colebatch destroy any arguments advanced in favour of the payment of a bounty. If the cotton industry were native to this country, such as the pastoral, agricultural, fruitgrowing and other industries are, there would be some justification in assisting it, particularly if it could serve some useful purpose such as helping to adjust our trade balance, or providing employment. Most industries experience periods of prosperity and depression, but during recent years, when prices were high, the cotton industry should have become firmly established and shown the people of Australia that it is worthy of assistance.

Senator Thompson:

– Prices have not been high.

Senator McLACHLAN:

– During the period in which bounties have been paid, and since cotton-growing was first undertaken in Queensland, world prices have been high, although they may have dropped during the last year or two.

Senator Daly:

– Is the honorable senator of the opinion that we shall never be able to grow cotton in Australia?

Senator McLACHLAN:

– I do not think that production of cotton in Australia will ever be a commercial success. The Minister said it was the policy of the Government to give unceasing consideration to the withdrawal of bounties ; but if the Minister had applied himself more closely to the real position he would know why the industry has not developed to the extent anticipated. He would have ascertained that those engaged in the industry have had sufficient opportunities to plan ahead, to quote the words he used in suggesting that we should commit ourselves to the expenditure of £800,000 during the next six and a half years. I am not studying this subject from a parochial viewpoint. It is not a matter of the Commonwealth assisting an individual State, but of whether the industry can prosper. If a case had been made out in support of the payment of a bounty on cotton I would have supported, the measure, but I have always been of the opinion, even before I entered “public life, that the profitable production of cotton in Australia is impracticable. As that opinion has not been destroyed by thearguments advanced by those supporting the Government, I cannot vote for the bill.

Senator O’Halloran:

– Did the honorable senator oppose the measure introduced in 1926?

Senator McLACHLAN:

– I was a member of this chamber at the time, but I did not know sufficient concerning the industry to justify me in opposing that measure. Apparently, the industry is now in such a chaotic state that the Government is endeavouring to assist it in the same way as it is helping other industries which are in difficulties, and which are receiving bounties. Surely in spending a little over £750,000 we have done sufficient salvage work to assist the industry to retrieve its position. In my opinion a case has not been made out, and as experience has conclusively proved that this industry will not assist in restoring our trade balance, provide additional employment, or result in increased land settlement, I intend to oppose the second reading of the bill.

Senator O’HALLORAN:
South Australia

– Despite the pessimistic utterances which we have heard this afternoon from Senator Colebatch on the general economic position of Australia, and from Senator McLachlan on the prospects of successfully establishing the cotton industry in Australia, I am sufficiently optimistic to believe that the proposals of the Government will place the cotton industry on a sound basis. In submitting this measure for the encouragement of the cotton industry the Government has been charged with being unduly precipitate, but there are not many bills providing for the payment of bounties or for other purposes, which have received more consideration than this measure. The Leader of the Opposition (Senator Pearce) said that the Government acted with undue haste and, in the main, departed from the recommendations of the Tariff Board, which were submitted after careful investigation. Apparently, the right honorable senator was not in possession of the latest report of the Tariff Board which contains recommendations of sufficient strength and importance to justify the introduction of this bill. The Tariff Board first conducted an investigation into this industry in 1925, and furnished a report to the late Government in 1926. Subsequently, the board was directed by that Government to hold another inquiry which was more comprehensive than that first undertaken. The second report which was presented on 6th March, 1929, dealt with practically every phase of the cotton industry, and the beneficial effect of its successful establishment upon other industries using cotton as a raw material. The board obtained evidence from all sections of the community including the growers, those in control of ginneries, manufacturers and importers, and with the fullest information, that it was possible to obtain made certain recommendations upon which this measure is framed. Certain portions of the Tariff Board’s report should be closely studied by honorable senators before they record their votes on this measure. From the report of 6th March, 1929, I quote the following:

In its report of 5th May, 1926, on the question of the granting of bounty in respect of seed cotton, the Tariff Board dealt with this aspect of the matter and embodied therein statements supporting its view that the cultivation of cotton in the Commonwealth is highly desirable. It is not proposed in this report to traverse the whole of the information included in the previous report, but it may be well here to briefly refer to some of theo more weighty reasons which the board considers make it of the utmost importance to the Commonwealth that she produce as much of her requirements of cotton as is practicable. Briefly stated, the reasons are as follow : -

The cotton-growing industry provides an avenue for direct employment on a’ large scale, both in the growing of cotton and cotton seed. A considerable amount of employment is also provided by the industries in which cotton and cotton seed are used.

The industry affords a means for the utilization of large areas of land and thus assists in the matter of land settlement and, to some extent, directly and indirectly in the migration policy of the. Commonwealth.

The production of cotton in Australia means the retention within the Commonwealth of a very large sum of money which otherwise would require to be sent overseas for the purchase of cotton and cotton seed.

I commend those three points to Senator McLachlan who definitely stated that the assistance to the cotton industry provided in this bill will not result in stabilizing our finances, increasing land settlement, or providing additional employment.

Senator McLachlan:

– The industry has not been very successful in the past.

Senator O’HALLORAN:

– The honorable senator’s opinion does not coincide with that expressed by the members of the Tariff Board who conducted a thorough inquiry into the industry at the request of the Government of which the honorable senator was a member. The report proceeds -

  1. The availability of adequate supplies of cotton and cotton seed grown in Australia would place Australian manufacturers of products, into which these commodities enter, in 11 secure position in the event of any emergency arising having the effect of cutting off supplies from overseas.

It continues -

Having in view the place which cotton holds in the domestic, industrial, economic and national life of a country, the board has no hesitation in expressing the view that the development and successful establishment of the cotton-growing industry in Australia is not only desirable but is vitally essential to the welfare of the Commonwealth.

These are definite expressions of opinion in support of the measure now before the Senate, because the bill is based substantially upon recommendations made by the Tariff Board in other portions of its report.

Senator Sir Hal Colebatch quoted certain extracts from the report, and used them as arguments against the proposal. Here again there is room for differences of opinion. I had intended to quote one paragraph of, the report which the honorable senator read and use it as an argument in favour of the bill. It is as follows : -

Evidence is available that there is sufficient suitable land in Queensland for the cultivation of cotton to meet the needs of the Commonwealth, and, in the opinion of the Tariff Board, provided the growers can be assured of a market for their product at prices which will ensure them a reasonable return, the development of the cotton-growing industry in Australia and its establishment on an economic basis, is not only a possibility but also practically a certainty.

Senator Sir Hal Colebatch:

– Cannot the same be said of any other industry ?

Senator O’HALLORAN:

– Senator Colebatch went on to say that no industry in this or any other country could depend upon permanency as regard prices and world conditions. “We all agree with the honorable senator on that point. This, I suggest, is one of the reasons actuating the Government in introducing this bill. The intention is to protect the cottongrowing industry in its infancy from the vagaries of world prices and conditions. Drastic fluctuations might crush a young industry, but might not materially affect one that is firmly established on a permanent and paying basis. To charac terize the view of members of the Tariff Board as nonsense is to ignore fundamental truths in the history of development in Australia. I ask honorable -senators to consider the protection afforded to other primary industries. The comparison is quite germane to this discussion. Can they point to any primary industry which has not received assistance. Wheat-growing may be cited as one illustration. How much wheat would be grown in Australia to-day if successive State Governments had not constructed non-paying lines of railway to give growers access to their markets, and* nonpaying water schemes to aid in the occupation and development of agricultural land? These railway schemes are not always profitable even when production has increased, because the deliberate policy of successive railway administrations has been to fix low freights for the carriage of grain to encourage the outback producer, and ensure permanent land settlement. If honorable senators care to peruse the reports of the railways commissioners in the different States, they will find that millions of pounds of the taxpayers’ money has been and is being spent in maintaining railway services solely in the interests of our primary producers. I have no doubt that the position in Western Australia is much the same as in any other State.

Senator Sir Hal Colebatch:

– The only time that our railways pay is when there are huge quantities of wheat to transport to the seaboard.

Senator O’HALLORAN:

– These nonpaying lines of railway have also aided in the development of pastoral areas. The Commonwealth Government is responsible for the maintenance pf the railway line from Port Augusta to Alice Springs. That section is never likely to be profitable, but its construction and maintenance are justified for developmental purposes. Western Australia has several “ sections of non-paying railways stretching out into its pastoral areas. Without these vital lines of communication, settlement of the land for pastoral or other purposes would be impossible. We might apply the same argument to the mining industry. Tasmania, Western Australia, and Queensland have constructed hundreds, if not thousands, of miles of railway for the development of mineral fields which, after prospering for a few years, have been closed down; but unfortunately the liability in respect of railway construction remains for all time a burden upon the people.

The Government’s proposal to assist the cotton-growing industry by providing for a bounty on raw cotton and protection in the allied secondary industry, is comparable in every respect with the action of successive State governments in spending large sums of public money on the construction of non-paying railway lines and water schemes for the benefit of the wheat-growers, pastoralists and other primary producers. Another important point which honorable senators would do well to remember is that Parliament affirmed this principle in 1926, when it agreed to proposals introduced by the then Minister for Trade and Customs, the late Mr. Pratten. The underlying principle of the measure approved by Parliament in that year was identical with the principle contained in this bill. Under the 1926 proposals, the limit of expenditure over a period of five years was £900,000. Expenditure under this bill is not limited to any particular sum; but the Tariff Board, after careful investigation, estimates that the liability over a five-year period will be in the neighbourhood of £800,000. In view of the fact that in 1926 Parliament approved of a bill to stabilize the cotton industry until 1931, I submit that those honorable senators who endorsed the principle then, to be consistent, must now support this measure. ‘ It is true that, as the present financial outlook is far from satisfactory, every item of proposed expenditure should be scrutinized with the greatest care. But there was the same need for close scrutiny of the 1926 proposal. A buoyant revenue is no reason why Parliament should approve of a scheme to spend hundreds of thousands of pounds over a period of years unless it is satisfied that the project is sound. In 1926 Parliament made available £900,000, spread over a period of five years, for the encouragement of the cotton-growing industry. Of that amount only £290,000 has been spent to date. Since the actual expenditure is £610,000 less than was contemplated, the industry now has a moral claim upon this Parliament for a continuance of the assistance provided under the 1926 act. If the total expenditure over the period of five years amounts to £800,000, the sum required, over and above the amount unexpended under the 1926 proposals, is about £190,000.

It has been said that cottongrowing is a black man’s industry, that it cannot be successfully established in Australia. We have always had our pessimists. I well remember that, some 25 years ago, when South Australia was producing about 12,000,000 bushels of wheat per annum, the pessimists of the day declared that no more wheat could be produced in that State. To-day, despite the widespread drought conditions of the last three years, South Australia produces approximately 25,000,000 bushels per annum. Given a normal season, the output will probably reach a maximum of 40,000,000 bushels, and over a period of years an average of about 35,000,000 bushels per annum should be maintained.

Senator Thompson:

– That type of dismal prophet declared that the Darling Downs could not grow more than one cabbage at a time.

Senator O’HALLORAN:

– South Australia has developed hundreds of thousands of acres for wheat-growing, country that the type of prophet to whom the honorable senator refers declared to be unsuitable for wheat-growing. Although the rabid freetrader may have died out, his mantle appears to have fallen on some honorable senators, who have claimed that secondary industries cannot be established in Australia. Secondary industries have been successfully established in this country. I remember when people asserted that it was not possible to build motor bodies here; that we should have to buy them for all time from America. Holden’s engaged in the industry, and reduced the price of a certain type of body from £82 to £32. If we accepted these pessimistic prophecies in their entirety, the whole progress of Australia would be retarded, and we should retrogress, instead of advancing, as every true Australian hopes and believes will be the case.

Let me examine for a moment the effect of the successful establishment of the cotton industry on the trade position of Australia with the world generally. At present Australia imports approximately £11,000,000 worth of cotton goods annually, and about £2,000,000 worth of other fabrics in which cotton is a constituent part, so that our imports of cotton goods may be stated to be roughly about £13,000,000 per annum. According to the information contained in a report of the Tariff Board, and information supplied to the Government from other sources, goods representing at least half that amount could be produced in Australia once the industry was properly established here. A gold bonus and other benefits to improve the financial position of Australia are being brought forward for consideration. I ask honorable senators is it not better to endeavour to establish the cotton industry, at an expenditure of £800,000 spread over a period of five years, from which we could reasonably anticipate to reduce our imports by £7,000,000 annually?

Senator Sir Hal Colebatch:

– How did the honorable senator arrive at his conclusions ?

Senator O’HALLORAN:

– Some honorable senators, and probably the honorable senator who interjected, will argue that it is preferable to pay £400,000 a year on the gold now being produced in Australia, in an effort to stimulate the gold-mining industry and improve our trade position. That method of stimulating the gold-mining industry would merely increase the return to those who have capital in the industry, most of whom are living abroad at the expense of the taxpayer. By expending a much smaller amount per annum to establish the cotton industry, we shall, if our reasonable anticipations are realized, provide employment for Australians and set up for the products of our primary and secondary industries a home market which, after all, is the best of all markets for a product of any industry.

Unemployment is a very important consideration at the present time. We have a huge number out of work. I do not suppose that there is any primary industry, with the exception, perhaps, of the viticultural industry, to which passing reference was made this afternoon, that has a greater capacity to absorb labour than cotton-growing. It is essentially a handwork industry. The cultivation of the cotton plant is substantially a gardener’s job, the tilling of the soil and so on requiring a good deal of manual labour and personal supervision, while the picking of the cotton after it reaches maturity is essentially a hand labour job. So far none of the great inventors of the world have been successful in inventing a machine that will pick cotton mechanically. Those peculiarities give to the cotton industry a remarkable capacity to absorb labour. At a time like this, when practically every State in Australia is spending hundreds of thousands of pounds in doles to the unemployed, for which nothing is, or can, be received in return, the establishment of such an industry would be providential. Only last week the Commonwealth Government granted £1,000,000 to the different States to assist them to relieve their unemployment. A flourishing cotton industry in Australia would employ those people and enable them to produce something that is necessary and of benefit to the community.

The secondary side of the industry is to be assisted by the bounty and also, we are told, by a measure of tariff protection once the producing stage is reached. Here again there are great potential avenues for employment. We know that whole counties in Great Britain are dependent on the cotton industry for their maintenance, and that whole communities in the United States of America, Japan, and other countries are similarly dependent on the industry. Why should not Australia participate in its benefits?

One of the last arguments with which I shall deal is that declaring that the measure is bound to fail because efforts to establish the cotton industry in Australia during the last 70 years have been unsuccessful. I understand that cotton was first grown in Queensland about 1860, and that it has been grown there with more or less success since. Until the 1926 Cotton Bounty Act was passed, no attempt was made to stimulate the side of the industry that is essential to its establishment. Previously, efforts were concentrated mainly on the production of cotton for export. That handicap upon the industry placed it at a disadvantage. We started out to grow something that we need in Australia, but asked the growers to send the commodity abroad to be sold. That is corrected by this bill. An effective protection is to be afforded and adequate assistance given to those engaged in the manufacture of cotton products. That will provide a market for home-grown cotton, and disposes of the arguments that cotton-growing can never be successfully established in the Commonwealth.

While it at present appears that the major benefit from the measure will be derived by the State of Queensland, there is more than a possibility that its benefits will extend to other States as the years pass, when the spinning section of the industry becomes firmly established. A demand will be created for Australiangrown cotton, and the needs of the community, so far as cotton is concerned, will be provided for. In South Australia, we have a large area of land on the banks of the river Murray that has been prepared for intense culture by the State at considerable expense. Dairying is now being carried on in some of those districts. In others, grapes are grown for the manufacture of wine and spirits, while other sections are used for the cultivation of fruits for the dried fruits market. My idea of intense culture is that a man should not be entirely dependent on one branch of production, but should engage in a number of activities, so that if one source of income fails he will still receive some return from the other sources. By assisting the cottonspinning industry we shall encourage the cultivation of cotton among small growers. I visualize the day when some of the valuable land in Western Australia, as well as in the other States, which is not now put to its full use, will be devoted to intense culture.

I ask honorable senators to recognize in this measure a genuine effort on the part of the Government to establish another primary industry in Australia - an industry which the Tariff Board’s report clearly shows can be established here, and will be of great value to the nation by helping to solve its economic problems.

Senator E B JOHNSTON:
Western Australia

– The Government could not have chosen a more inopportune time to introduce a measure of this kind.

At a time of great financial depression, when the Commonwealth is faced with the prospect of another heavy deficit, the Government has introduced a bill which will impose a heavy burden on the people of Australia for the next six years. Those who are engaged in our great primary industries are tired of being taxed by way of customs duties and bonuses to assist unprofitable and artificial industries in the Eastern States. The one redeeming feature about this bonus is that it will do something for a country district. As a rule, bonuses are granted to assist secondary industries established in the cities, particularly Melbourne and Sydney. The present Government is already notorious for the burden it has added to the primary producers of Australia in the shape of tariff embargoes, increased protective duties generally, and bonuses. Practically the whole burden of these imposts is borneby our primary producers, particularly those engaged in the wheat, wool and mining industries.

Senator Cooper:

– This bonus is to assist the men on the land.

Senator E B JOHNSTON:

– The proposal of the Government will place a burden on hundreds of thousands of men on the land, as well as on workers in the cities, for the benefit of a very small section of the community, who have made a failure of their industry. The result of the Government’s policy so far has been to increase unemployment, raise the cost of living, and increase the cost of production. The Government has done things which it ought never to have attempted in a time of crisis. The present is no time to increase the burden on the producers of this country, who already have sufficient to face in the low prices prevailing for the commodities they produce.

I object to this measure because the primary producers of Australia should not be called upon to bear any further burden, and also because of the way in which the Government discriminates between industries. It says to those engaged in cotton production that if they will grow cotton they will receive a substantial bonus over a term of years, irrespective of whether the price of cotton during that period is high or low.

Senator Thompson:

– The bonus will cease entirely at the end of five years.

Senator E B JOHNSTON:

– Judging by my experience of the capable representatives of Queensland in this Parliament, I predict that long before the expiration of five years we shall have requests for more and still more assistance to the cotton industry. The people of Australia will be called upon to assist the cotton industry for five years whether or not the industry is profitable to those engaged in it. But how does the Government treat the wheat industry - a natural industry on which the prosperity of this country to a very great extent depends? It nas asked the farmers of Australia to grow more wheat, which means ‘that, instead of working twelve hours a day, they are expected to work fourteen hours. As an inducement, it has guaranteed a certain price for each bushel of wheat produced. But, in contradistinction to its attitude towards the cotton industry, the Government will not accept the whole of the risk and agree to a bonus of, say, 6d. a bushel on all wheat produced, irrespective of the price received for that wheat in the markets of the world. In inaugurating this socialistic marketing scheme, the Government expects the States, whose treasuries are well nigh depleted, to accept half of the financial responsibility, in the event of any losses being incurred, the Commonwealth paying the other 50 per cent. That meagre assistance to a vital industry is to continue, not for five years as in the case of the cotton bonus, but for only one year. When the Wheat Marketing Bill was before another place an amendment was moved to provide that, iri the event of a loss in the marketing of the wheat, the Commonwealth’s moiety of the guarantee should be paid even if a State was not a party to the pool, but the Government would not accept it. How different is its treatment of the cotton industry!

The PRESIDENT (Senator the Hon W Kingsmill:

– I ask the honorable senator not to anticipate debate on another bill already on the notice-paper or to allude to a debate on this subject in another place.

Senator E B JOHNSTON:

– It ha? been my endeavour to use the meagre assistance offered to the wheat industry merely as an illustration to emphasize the generous assistance the Commonwealth Government is prepared to extend to the establishment of the. cotton industry in Australia. If, contrary to my wishes, the bill is carried, I can only hope that the efforts of the Government will be successful. I realize that if the industry can be established by . means of political action, the Government will spare no pains to do so, and one means towards that is the payment of a bounty for a short term of six years in addition to very heavy tariff duties, which I fear will be a burden on the workers and other established primary industries. The Queensland Government is not to be asked to join in any guarantee or to participate in the payment of the bounty. The Commonwealth Government is to be the fairy godmother and to do everything possible to bring about the establishment of the cotton industry.

The discrimination displayed in this bill, which I contend is opposed to the spirit of the Constitution, is also shown in the Wine Export Bounty Act, except that the disbursements to the wine-makers and grape-growers would probably be less than the amount of extra excise duty collected on spirit used in the fortification of wine. The industry itself pays the bounty; but the bounty itself is confined to the product of vineyards established before March, 1928. In Western Australia we have huge areas of viticultural land not yet developed. If they are planted with vines the people who develop them will derive no assistance from the wine bounty.

Senator Thompson:

– Why not take advantage of the bill now under consideration and develop cotton land?

Senator E B JOHNSTON:

– I regret exceedingly that cotton-growing experiments made in the north-west on expert advice did not prove successful; but we know that vineyards can be successfully established in Western Australia. I hope that in the future we shall grow cotton there as well. We have huge areas of good viticultural land awaiting development, but those who plant them with vines will not be able to participate in the wine bounty. Only established vineyards in South Australia and the Eastern States will share in that benefit. Such is the limitation fixed by the Wine Export Bounty Act. When it comes to cotton, it is quite a different matter.

Senator Cooper:

– Is not cotton a national necessity?

Senator E B JOHNSTON:

– Certainly ; but it is far better to encourage the development of an industry whose product, like wine, can find a big market in Europe and elsewhere, than to put an excessive burden on the whole community in order to bolster an industry in Queensland that unfortunately, so far, has proved a failure.

There is another difference between this bill and the Wine Export Bounty Act. If the cotton-growers are prepared to grow more and more cotton, there is no limit to the total amount of bounty payable; whereas in the case of the bounty on exported wine, not only has the subsidy to be provided by the industry itself, but new areas devoted to vines cannot receive the bounty. The Commonwealth Government is certainly treating the cotton industry very well. But it seems to me to be a general practice to treat the industries in in the Eastern States favorably in comparison with industries that are natural to and capable of flourishing in Western Australia. The Acting Minister for Trade and Customs (Mr. Forde) is like an eastern potentate levying tribute here and distributing largess there. It may be accident, design or coincidence that meagre assistance is given by successive governments to industries natural to Western Australia,, while, at great cost, either through tariff protection or bounties, favorable treatment is extended to the industries in the Eastern States. But it seems to us in Western Australia that it is more than coincidence ; that it is something we can regard as an incurable habit. In other words the people of Western Australia are expected to pay tribute and the people in the Eastern States get whatever largess is being distributed. It may be claimed by the Government that this cannot be avoided because new industries are first started in the Eastern States.

Senator Thompson:

– In the matter of secondary industries, Queensland is not’ much better off than Western Aus-

Senator E B JOHNSTON:

– The honorable senator will not deny that his State is receiving great benefit under the sugar embargo and generally under the operation of the federal policy.

Senator Daly:

– The honorable senator must not forget the east-west railway.

Senator E B JOHNSTON:

– I am not forgetting it. The people of Western Australia greatly appreciate that the Commonwealth carried out a promise made before federation. Neither am I forgetting that the railway is costing the Commonwealth nothing for working expenses. To-day it pays its way.

I warn the Government that the burden on primary industries is becoming too heavy. In answer to a question asked by Mr. Gregory in another place on the 10th December last, the Treasurer gave the amounts paid for seven years to the different States in direct assistance from the Federal Government. The total was £4,973,543. Of that amount New South Wales received £1,969,762, of which the bounty for the manufacture of iron and steel products, represented £1,455,503. The amounts paid to the other States were: Victoria £702,240, Queensland £575,841, South Australia £963,260, Western Australia £95,209, and Tasmania £60,960. Of the amount paid to Western Australia £41,375 represented the amount of compensation paid by the Commonwealth because of an outbreak of rinderpest. Had that outbreak occurred in any other State the compensation would have been payable in that State and the direct assistance given to Western Australia reduced to £53,834 out of a total of £4,973,543. It is only natural that representatives of Western Australia, in view of these figures, should look with a good deal of anxiety at the prospect of having to share in the payment of another bounty from which, for many years at any rate, it cannot expect to get any direct benefit. I credit the Government with good intentions, but the burden on primary industries is becoming altogether too heavy. The increased unemployment in Australia to-day is largely due to the bolstering of artificial industries at the expense of the great and established primary industries. Wheat, wool, mining and timber all have to stand on their own bottoms in the markets of the world, and it is impossible for them to do so, with the prevailing low prices, while they have to continue contributing heavily to the payment of bounties and duties to foster secondary and other in.dustries

Senator DUNCAN:
NEW SOUTH WALES · NAT

– I have a great deal of sympathy with the cotton-growers because I realize the difficulties under which they are labouring to-day and the very great difficulties confronting their industry. I am rather surprised to hear those honorable senators who claim to represent primary producers urging that assistance should not be given to the cotton industry, on the ground that it imposes an additional burden on primary producers. But cotton-growing is a primary production. There is too often a tendency to regard wheat and wool-growing as the only industries that are truly representative of primary production. It cannot be urged that, by assisting the cotton-growers, we shall be placing a further burden upon the primary producers, because the cotton-growers are themselves primary producers.

Senator Sir Hal Colebatch:

– How many growers are there?

Senator DUNCAN:
NEW SOUTH WALES · NAT

– I shall tell the honorable senator shortly. It is the responsibility of this Parliament to do all that is practicable to assist those engaged in the industry. The first attempt in that direction was when the Commonwealth Government entered into an agreement with the Queensland Government, which was done with a full knowledge of the facts of the case. At that time glowing accounts were given of the future of the industry, not only by those actually engaged in the work of cotton-growing, but by the Minister who introduced the bill under which the bounty was first paid, and by those who supported the measure. It was then said that, from the stand-point of increasing primary production and land settlement, and also of the importance of the industry from a defence view-point, it should be firmly established in Australia. It was contended at that time that Australia should produce all its requirements so that, in the event of war, we would be a selfcontained nation. Many reasons were advanced why an agreement should be entered into with the Queensland Government.

Senator Sampson:

– And that agreement was adopted.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– Yes; but we are now faced with the fact that the industry has not made the progress which those who so strongly supported its establishment anticipated.

Senator Sir Hal Colebatch:

– It has gone back.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– It has to an extent; nevertheless it is to-day a very important industry, and I cannot support the opinion that it should go out of existence if it cannot carry on without assistance in the form of a bounty. In entering into an agreement with the Queensland Government, and so accepting certain obligations, the Commonwealth induced cotton-growers to establish homes and farms, and also to invest capital. They felt that the Commonwealth was behind them, and whatever the intentions of the Government may have been at that time, I am confident that it was the intention of the Parliament to assist them. The Government did not definitely tell the growers that it would stick to them whatever happened; but there was an implied obligation which we have to honour. Senator Colebatch asked how many persons were engaged in the cotton-growing industry, and for the information of the Senate I shall quote some figures supplied to me by a representative of the industry. The present production of cotton is approximately 10,000 bales per annum. There are from 2,500 to 3,000 pickers employed in the industry, who are paid £10 per bale of lint, so that £100,000 is paid to the cotton-pickers for their labour.

Senator Sampson:

– How much are they paid per pound?

Senator DUNCAN:
NEW SOUTH WALES · NAT

– They are paid £10 per bale of lint. In the ginneries 110 persons are employed from five to six months in each year, and from 50 to 100 persons, according to the demand, are employed in the oil mills for nearly the whole year.

Senator Sir Hal Colebatch:

– For how long are the pickers employed?

Senator DUNCAN:
NEW SOUTH WALES · NAT

– They are employed intermittently for a considerable period.

Senator Sir Hal Colebatch:

– For how long?

Senator DUNCAN:
NEW SOUTH WALES · NAT

– I do not know exactly.

Senator Sir Hal Colebatch:

– It would appear from the honorable senator’s figures that they are paid £400 for four months’ work.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– The total amount paid is £100,000 a year. There are approximately 2,500 cotton-growers engaged in the industry. The financial position of Australia is unsatisfactory; but it would be infinitely worse if the cotton-growing industry were to be wiped out of existence and 2,500 cotton-growers thrown out of employment.

Senator Daly:

– And who would have to be kept.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– Yes, because there would be no employment for them.

Senator McLachlan:

– The amount of money to be spent under this measure would keep them all for eight years.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– The bounty is not to be paid merely to keep men at work; but to maintain an industry which we are assured is absolutely essential to our progress. Each year we import from 3,000 to 5,000 tons of cotton seed for the manufacture of cotton-seed oil, which could be produced in Australia as a by-product of the cotton industry. If the industry is to be given a fair chance-

Senator Herbert Hays:

– It has had a fair chance.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– The industry has had some assistance and I am urging that the help now proposed should be granted to enable us to determine whether it is likely to prove successful or otherwise. Conditions have not been easy for any Australian industry, and it is unreasonable to contend that those which cannot carry on without assistance from the Government should go out of existence, as Senator Colebatch suggested.

Senator Sir Hal Colebatch:

– I referred to those which are receiving extreme and impossible assistance.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– Possibly what the honorable Senator would define as extreme and impossible assistance would be regarded by those engaged in the industry concerned as quite reasonable. The iron and steel industry was mentioned by Senator E. B. Johnston as one which, in his opinion, is receiving extreme assistance.

Senator E B Johnston:

– I mentioned the amount; but without comment.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– The honorable senator’s object in mentioning the amount was for the purpose of showing that the Commonwealth is doing infinitely more than it ought to do, and, because of its commitments in this respect, should not do any more. The iron and steel industry is an essential industry which we must maintain whatever the cost.

Senator Sir Hal Colebatch:

– Under whatever terms and conditions may be imposed ?

Senator DUNCAN:
NEW SOUTH WALES · NAT

– No. We must maintain it because it is essential to our defence system, and I have yet to learn that any unreasonable terms or conditions have been sought by those controlling it.

Senator Sir Hal Colebatch:

– Arbitration Court judges have said that it does enjoy unreasonable terms.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– Arbitration Court judges have made some peculiar statements, and I would have to see exactly what was said before accepting the honorable senator’s interpretation. Senator Colebatch said that he is opposed to the policy of bolstering up certain industries at the expense of others. That, generally speaking, is a correct view. No one wishes to see industries operating at the expense of others, but such industries often benefit others.

Senator Thompson:

– The cotton industry is starting off on a new basis.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– Yes. When Senator Colebatch was speaking I reminded him that the cotton industry is now to be conducted on a co-operative basis and he replied that he did not see any difference between the old form of control and that proposed because the people of Australia would have to pay all the same.

Senator Sir Hal Colebatch:

– I did not say that.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– There is a wide difference between the conditions upon which the industry is now being carried on and the proposed new basis. Under the old system those engaged in the industry were faced with the necessity of reducing the huge amount of capital invested.

Senator Sir Hal Colebatch:

– Who was responsible for the investment of a huge amount of capital?

Senator DUNCAN:
NEW SOUTH WALES · NAT

– I do not know, but Senator Greene will be able to enlighten the honorable senator upon that point. The growers, who are directly concerned in the industry, will, when operating on a co-operative basis, be satisfied for the time being if they can obtain an adequate return for the cotton they produce. In the absence of ginneries and mills it would be almost impossible for them to dispose of their cotton at a reasonable price ; but if the ginneries and mills are in operation they will be able to market their produce at a reasonable rate, and will not require such a big return upon the capital invested as the original promoters. As the growers are to take over the Undertaking at a reduced capital cost they may be able to make a success of it.

Senator Sir Hal Colebatch:

– Although others lost in the venture.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– Original promoters sometimes incur losses while those who follow them achieve success. If the argument which Senator Colebatch is now using had been employed when the proposal to sell the Commonwealth line of steamers was before this chamber - I am aware that thehonorable senator would have agreed to the disposal of the line - it would have been impossible to persuade any company to purchase the steamers because hitherto they had been running at a loss.

Senator Sir Hal Colebatch:

– Not at all. They would have been purchased because the new owners would know that they could escape from impossible labour conditions, which are being imposed upon the cotton industry in this bill.

Senator DUNCAN:
NEW SOUTH WALES · NAT

– Illustrations of that sort may be applied in various ways. It is the duty of this Parliament to give the fullest possible assistance to the cot ton-growing industry. The fact that finance is difficult at the moment is not a sufficient reason for abandoning the growers, with their wives and families, and allowing them to sink in a sea of industrial trouble. We certainly must do something for them. The Commonwealth, having entered into certain obligations, must honour them. For this reason I hope that the measure will receive more sympathetic consideration at the hands of those honorable senators who have yet to speak in this debate than it has received from those who have spoken already.

SenatorRAE (New South Wales) [8.33]. - It is amusing to one who holds the opinions which I do to hear the conflicting views expressed by honorable senators opposite. It is obvious that they reflect the opinions of the States in which they live.

Senator Sampson:

– They are purely geographical views.

SenatorRAE. - That is so. I hold the opinion that neither bounties nor tariffs are a satisfactory means for the solution of our difficulties. Free trade or protection, as policies, are not capable of satisfying modern requirements, whatever they may have done in the past. As for countries being self-contained, I agree with those who argue that if we export certain commodities we must, to some extent, import other commodities. I was impressed by some of the arguments used by Senator Colebatch as to the effect of bounties on production, and I am living in the hope that one day bounties will become universal and that, by paying bounties to each other, we shall eventually legislate ourselves into a degree of general prosperity. I suspect, however, that when the scheme to assist the gold-mining industry by means of a bounty is before this chamber we shall hear other views from the honorable senator.

Senator Colebatch:

– Does the honorable senator’s Government intend to introduce that proposal?

SenatorRAE. - I am not sufficiently in the confidence of the Government to be able to answer the honorable senator; but I am foretelling that some honorable senators opposite will follow a different line of argument when that long-extended golden vista is presented to our gaze.

It appears to me that the arguments against this b.ill are based mainly upon the failure of bounties to fulfil expectations. But, as one honorable senator said, we gain by experience. Consequently, former failures may possibly lead to the adoption of methods which will ensure future success. It is apparent that the original bounty provisions were not well balanced, for it is clearly impossible, under existing conditions, to build up a big export trade in cotton until we first satisfy our own requirements. Since cotton-growing is a primary, and the spinning of cotton, a secondary, industry, to make the primary industry successful it is essential that we should extend the bounty system to the spinning of the yarn. Consequently, we must consider cotton? growing as both- a primary and a secondary industry. Both branches must be equally subsidized. It is ridiculous to encourage the production of raw cotton and depend upon the markets of the world for its sale, when at the same time we require enormous quantities of cotton piece goods for the home market.

Senator Sampson:

– We could not export cotton without a bounty.

Senator RAE:
NEW SOUTH WALES

– That is another reason why we should consider this proposal from the international standpoint. Honorable senators .opposite would scout the. idea of any alliance between the workers of Australia and the workers of cheaplabour countries. That, however, is the true line of progress. Instead of encouraging importations from cheaplabour countries and breaking down Australian industrial conditions, it should he the objective of all parties to help raise the industrial standards in other countries and so make possible the fair exchange of goods between Australia and the rest of the world. At present, trade with cheap-labour countries is a menace to the industrial standards observed in Australia, The workers pf Japan, I suggest, are no more desirous of working for a miserable wage than are the white workers of this country. Consequently the soundest fiscal policy for Australia to adopt would be to spend money in sending abroad industrial missionaries to teach the people of cheap-labour countries to organize,- as we have done, and have as’ their objective higher wages and improved working conditions. They would then be less dangerous as com?petitors in trade. I firmly believe that the salvation of the nations in the future lies in the direction of improving the conditions of the ill-paid coolie workers of India, China, and other eastern countries.

Senator Sir Hal Colebatch:

– We cannot do that by depriving them of their natural advantages.

Senator RAE:

– I fail to see how we shall be doing that by any of the provisions in this bill, because the object in subsidizing the cotton-growing industry is to equalize the conditions between the workers of Australia and the workers of cheap-labour countries.

Cotton-growing has been referred to as exclusively a Queensland industry. It is true that it is confined mainly to the northern State, but there is no reason why it should not extend to other States. I have seen excellent varieties of cotton growing on the western slopes of New South Wales, and I fail to see why it should not be successfully cultivated in many parts of the Commonwealth. The climate there is not less, favorable than in certain portions of the United . States of America, where it has been grown, successfully for many years. . As. for the cost of production, a point that was emphasized by Senators Colebatch, Payne, and others, there is no reason to f fear, since this will be largely a family industry, and, therefore, will not be affected by the labour, provisions in the bill. There is nothing in it to prevent the owner of a small farm from carrying out the whole of his operations on a family basis. It is only where outside labour is employed that .the provisions of the bill relating to wages and conditions of work will operate- Where an industry is assisted by means of a bounty the Government should insist o,n the observance of reasonable labour conditions. I should oppose the payment of a bounty without this condition. I am unable to say if the insertion of such a provision is constitutional or otherwise, but there is good reason to believe that it is, because decisions of the High Court have prescribed the limits to which the Commonwealth can go. in legislation- of this kind, and it is not probable that the draftsman of this bill would include in it provisions that were unconstitutional. However, this is a matter for judicial decision. I contend that it is a necessary part of our duty to prescribe reasonable working conditions in respect of any industry that receives assistance by way of a bounty or protection through the customs.

Senator Colebatch, I understand, declared that the standard of living in Australia is not high enough.

Senator Sir Hal Colebatch:

– Of course it is not.

Senator RAE:

– I agree with the honorable senator, and for that reason I submit that every effort to ensure a reasonable standard of living in connexion with any project should be commended instead of being opposed.

Senator Colebatch:

– The provisions in this bill will bring down the standard of living.

Senator RAE:

– If that is so, the payment of a bounty on the production of gold will impoverish the people of Western Australia, and I fear that the representatives of that State in this chamber will be led astray by local agitation, and will advocate a policy which may bring ruin to their State. But, seriously, if the bounty system is good, and if it is economically sound to assist an industry for which there is room and for which the soil is adapted, as in the case of cotton-growing, there can be no reason why we should not encourage the development of that enterprise. I am not suggesting that the emancipation of labour will follow the payment of bounties, the imposition of tariff duties, or any such system. I believe that very much greater and more fundamental changes in our social system will have to be made before we can raise the general standard of living to what I hope we shall one day attain. Nevertheless, it is anomalous that a country like Australia,’ in which there are large areas suitable for cotton-growing, should import practically all its requirements in cotton goods. Any proposal to encourage the growing of cotton and the manufacture in Australia of cotton piece goods should be commended, instead of being opposed by certain honorable senators. The main burden of the attack that has been made on this measure, both by the Leader of the Opposition (Senator Pearce) and Senator Colebatch, is that past payments of a cotton bounty have not met with the success anticipated: the industry has not been placed on a sound footing. As a previous speaker pointed out the failure of one organization is not proof that failure must necessarily continue. The mistakes of the past afford us lessons for the future. The original bounty brought about an over-production of raw cotton and provided no market for it. That lesson should assist us when providing for the industry in future, and I believe that this measure will overcome the difficulty.

It must be realized that it is not only for the manufacturer of cotton goods that the raw product can be utilized. Cotton seed can be used for many purposes. I have here a paper that gives a list of the different articles and commodities into which it can be manufactured. I shall not weary honorable senators by reading the list, but I may mention that it embraces scores of substances, which in themselves form the raw material for other secondary industries. Fertilizers, explosives, and numerous other articles can be manufactured from cotton seed and cotton lint. The fact that it is possible to establish so many industries from the by-products alone should stimulate us in our endeavour to place cotton-growing on a sound footing in Australia.

Although the first benefits will be reaped by Queensland, subsequent advantages will be shared by practically every other State in the Commonwealth. If, unfortunately, Western Australia will not participate in the promised prosperity in an equal degree one must take into consideration the peculiar circumstances of that State. It has an area equal to about one quarter the size of Europe and is inhabited by less than 500,000 souls. It is unreasonable for those who represent so enormous and so undeveloped a State to hope to develop it within a short space of time. We cannot forgo the advantages enjoyed by the other States of the Commonwealth simply because it is impossible at the moment to confer similar advantages on Western Australia. On the other hand we can foresee that, in the development of this continent, which is the obligation of the whole of its inhabitants, no unfair treatment will be meted out to any State, but that steps will be taken to adjust the balance. Any disadvantage temporarily sustained by Western Australia will be eventually counteracted by the collective action of the people of Australia, and I am confident that that State will have nothing to fear when it puts forward any just claim for assistance.

A good deal of misunderstanding has arisen from statements made in a report by the Tariff Board on the cotton industry. The right honorable the Leader of the Opposition (Senator Pearce) quoted certain recommendations from that report, but he failed to refer to a later report by the board in which a number of those recommendations and statements are considerably modified in the light of subsequent experience. It is reasonable to assert that if the Tariff Board is worthy of the confidence of those who appointed it, some of the facts that have since emerged with regard to the cotton industry justify the proposals now before the Senate. As a result of the stimulus given by the Cotton Bounty Act of 1926, the cotton production of Australia increased in 1927 by more than 100 per cent, over the crop of the previous year. Unfortunately there existed a lack of means to convert that cotton into a secondary product. That fact compelled those who favoured the establishment of the industry to seek new avenues through which it should be given the necessary encouragement. They pointed out that it was essential to provide assistance for the spinning of the yarn, but it took two years before anything was really done. By that time the period of the bounty had almost expired, and those engaged in the cotton industry were in a state of uncertainty as to how they would be treated. Parliamentary delay was largely responsible for the retrogression of the industry, which was largely the result of uncertainty as to its future. If adopted, this measure will put an end to that uncertainty and give growers reasonable security for a number of years. If by that time the industry is not soundly established, provided no unforseen difficulties arise, those who see fit may offer resistance to a continuation of the bounty.

Senator Sir Hal Colebatch:

– We shall have lost a pretty penny in the meantime.

Senator RAE:

– I think that the assistance originally given to the industry and the promises that were made involve us in obligations that it would be grossly unfair to unload without notice. If the system of bounties is unsound, it is even more unsound to begin to build up an industry by such means and then, just when there is a prospect of placing it on its feet, to withdraw the assistance.

Senator McLachlan:

– It would not be so bad if the industry were on its feet.

Senator RAE:

– Then it would not require this assistance. The contention of the honorable senator is that if the industry were capable of standing alone he would be prepared to provide assistance.

Senator McLachlan:

– I should be prepared to do so if it gave any indication of being able to stand alone.

Senator RAE:

– Australia has been proved to be suitable for the growing of cotton, and, as we have a population that consumes millions of pounds worth of cotton material annually, there is no reasonable ground for asserting that it is impossible to establish the industry. I am of the opinion that we should not depend entirely upon wheat, wool and a few lesser industries for the maintenance of Australia. Each of those activities has its limits, and it is a sound old adage that you should not have all your eggs in one basket. We should endeavour to establish a multitude of industries so that a slump in one will not materially affect the country. The people of Australia require cotton goods. Australia is capable of producing cotton, and of manufacturing anything that any other nation can manufacture, given the market for it. This mania for foreign markets can be easily overdone, particularly when we make no attempt to supply our own markets. I believe that we have committed grave blunders in failing to build up our secondary industries. Australia produces infinitely more wool than it requires, and it should long ago have rectified the anomaly of having to send practically all of its wool overseas, and then to buy back millions of pounds worth. of woollens.The same remarks may. be applied to our wheat industry. We might well have concentrated upon the manufacture of flour, and the establishment of a market for it overseas.

Senator Herbert Hays:

– That has been fully exploited in the past.

SenatorRAE. - I doubt it. I mention, incidentally, that when I was a boy, flour was imported into Australia in barrels from the United States of America. We could also have done more in connexion with the manufacture of products from the offal resulting from the manufacture of flour, such as stock foods.

It cannot be gainsaid that there is a tremendous market in Australia for cotton goods of various kinds, and it is high time that we placed the industry on a sound footing. I do not urge that simply for the purpose of excluding the imports of cotton goods from other countries. It will always be found that there are special types of goods that cannot be manufactured in any one country, and that must necessarily be imported. Therefore, trade between civilized communities and nations is a natural development, There is, however, no reason why we should for ever remain hewers’ of wood and drawers of water for other nations, allowing them to carry on the profitable industries of the world while we pay top prices for their goods. In the matter of secondary industries the most progressive nations are those which are most highly industrialised. The process of industrialising this country is now going on : and even if it is not being carried out on strictly sound economic principles, it is better that it should be attempted by some means than that it should not be done at all. I look forward to the time when this country will have become so industrialised as to make the position of the Labour - movement better than it now is. To our secondary industries we must look to supply men who will see that the workers of the country receive their just share of what is offering. For that reason I welcome the establishment of secondary industries.

This bounty is one of many which this Parliament has considered. Most of the bounties which have been granted in the past have been for the benefit of certain sections of the employing capitalistic class. Anything that the workers can get out of them, particularly in the direction of insisting that the wage-earner shall be adequately remunerated, they are entitled to. Indeed, provision to that end should be an integral part of all industrial legislation.

Senator Herbert Hays:

– Within reasonable limits.

SenatorRAE. - I should not like the honorable senator to be the sole judge of what those reasonable limits should be. In my opinion, a reasonable limit means all that labour can effectively demand. As the chief producers of wealth, the workers are entitled to the lion’s share of the result of their industry. The extent to which they share those proceeds depends upon their organization. When labour is sufficiently organized it will be able to take the lot.

Senator HERBERT HAYS:
Tasmania

– Honorable senators have not shown a great deal of enthusiasm for this bill. It is indeed extremely difficult to decide the best course to take to assist the cotton industry in Australia, the history of which was given fully by the right honorable the Leader of the Opposition (Senator Pearce). The bill before us proposes to grant additional assistance to that industry by way of a bounty and additional tariff protection. It is difficult to determine to what extent we are justified in giving it artificial stimulus; but because large numbers of people have been induced to go in for cotton production, and because the bill is designed to assist them, I shall support it, although without any great enthusiasm. I am prepared to give these people a further chance to establish their industry on a sound basis. Senator McLachlan adopted an extraordinary line of argument when he said that if cotton were a commodity which Australia could export, the industry was worth assisting, but not otherwise.In my opinion, there is no essential difference between exporting cotton to the value of £1,000,000, and so increasing our own cotton production as to render unnecessary the importation of cotton of that value. By producing cotton in our own country, we shall not only employ our own people, but we shall also keep in Australia money which otherwise would be sent to other countries to pay for ootton and cotton goods imported. The honorable senator’s remarks appear the more extraordinary when one remembers his recent enthusiastic support of a bill to provide a bounty on wine.

Senator McLachlan:

– I supported that bill as a salvage measure.

Senator HERBERT HAYS:

– It is a distinction without a difference. The honorable senator says that the wine industry will pay the bounty on exported wine. That is not so ; the people of Australia will pay the bounty. It is only playing with words to say that the industry will pay the bounty.

Senator McLachlan:

– I supported that bill as an emergency measure. This is a wreck ; there is nothing to salvage.

Senator HERBERT HAYS:

– Had the Government brought down a proposal to compensate the people engaged in the production of cotton, and to set them up in some other industry which had a greater chance of success, I believe it would have been better for all concerned. If honorable senators refer to a speech I made some years ago, when a measure to assist those who had grown doradillo grapes was before the Senate, they will see that I suggested then, that it wouldbe better to root out the vines and to grant the growers compensation and establish them in other pursuits,

Rightly or wrongly, this Parliament has approved of the principle of granting bounties to assist various industries. I amsomewhat apprehensive regarding this bounty, but I am prepared to give the cotton-growing industry one more chance to establish itself on a sound footing. At the same time, I feel that the time is ripe for a careful review of the whole matter of granting bounties. In the case of the cotton-growing industry, we should insist that a competent authority shall determine the areas in which it is most likely to be established successfully, and also the varieties ofcotton to be grown. It is wrong to grant bounties indiscriminately, without proper investigation. We should embody in this legislation a provision to ensurethat the industry will be carried on in such a way as to give it a reasonable chance of success.From time to time, Tasmanian members of this Parliament have urged that assistance should be given to Tasmanian industries. I suggest that had assistance been given to the Tasmanian evaporated apple trade, thousands of bushels of apples which were left to waste, would have been turned into a marketable commodity. That Tasmania has to a great extent been unsuccessful in obtaining assistance for her industries, is no reason why Tasmanian representatives should refuse to assist other industries. I shall support the bill only in order to give the industry a further chance to establish itself on a sound footing.

Senator Sir Hal Colebatch:

– And so throw good money after bad.

Senator HERBERT HAYS:

– I quite appreciate the speech made by the honorable senator. It was beyond all argument one which it is difficult to combat ; but there isso much money involved in the cotton industry, and so many interests, that I am inclined to give it one more chance. There may be something in this bill which will give the industry a further opportunity to prove that it can be of some assistance, not only to Queensland, but also to the rest of Australia. I support thesecond reading.

Debate (on motion by Senator Carroll) adjourned.

Senate adjourned at 9.17 p.m.

Cite as: Australia, Senate, Debates, 18 June 1930, viewed 22 October 2017, <http://historichansard.net/senate/1930/19300618_senate_12_124/>.

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