Senate
29 July 1930

12th Parliament · 1st Session

  1. Senate
  2. 12th Parliament
  3. 1930

The President (Senator the Hon. W. Kingsmill) took the chair at 11 a.m., and read prayers.

page 4807

QUESTION

DISSOLUTION OF PARLIAMENT

Statement by Mr. Fenton.

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

– I have read the statement to which the right honorable senator alludes. It is one for which I am in no way responsible. In order to allay the fears of Senator Pearce, I assure him that there is a sufficient number of anti-dissolutionists in this Parliament to prevent the occurrence of any double dissolution in the near future.

page 4807

QUESTION

FEDERAL CAPITALTERRITORY

Canberra Allowance

Senator SAMPSON:
TASMANIA

asked the Minister representing the Minister for Home Affairs, upon notice -

  1. Will the Government pay the full Canberra allowance, £39 plus 20 per cent. of rental per annum, to public servants other than those compulsorily transferred from Melbourne?
  2. If not, will the Government pay any portion of the £39 (20 per cent. of the rent being paid already ) ?
  3. If not, why not?
  4. Is it a fact that the matter has been under consideration for some time and that the Public Service Board is in possession of all necessary information; if so, is the Government prepared to make a definite statement?

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

  1. Under Public Service Regulations at present in force, public servants stationed in Canberra and renting houses from the Commonwealth are as a general’ practice already being paid allowances equivalent to 20 per cent. of their respective rentals. 2 and 3. See answers to 1 and 4.
  2. The question of granting an additional amount of allowance to Commonwealth officers stationed in Canberra, other than officers compulsorily transferred, in respect of living costs other than rental, has received consideration, but a definite decision has not yet been reached.

page 4807

QUESTION

NORTHERNTERRITORY

Free Passages to Unemployed

Senator E. B. JOHNSTON (through

  1. With reference to the seventy-four free steamer passages to the various States given by the Federal authorities to unemployed residents of Darwin, does the Federal Government provide funds for the sustenance of these unemployed citizens after their arrival at the ports to which they are granted free passages?
  2. If not, is this responsibility thrown on the State Governments?
  3. In view of the fact that the States have their own difficulties through unemployment, is it the intention of the Government to continue sending the unemployed residents of the Northern Territory to the other States?
  4. Is it the intention of the Government to enter into a reciprocal agreement with the State Governments with regard to this method of solving the problem of unemployment in the Northern Territory?
Senator BARNES:
Assistant Minister assisting the Minister for Works and Railways · VICTORIA · ALP

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

  1. No.
  2. to 4. The men who have been granted assisted passages were not men born in the Territory or men who could be regardedas permanentresidents of the Territory. They were permanent residents of the various States, and had proceeded to Darwin in search of employment. The Government has, on several occasions, issued public warnings against men proceeding to North Australia in search of employment, but despite these warnings, a number continue to arrive in Darwin. On finding that no employment is available, the majority of these men request that theybe assisted to return to the States from which they proceeded to the Territory, and where, they consider, being amongst their relatives and friends, they will be better off and will have better prospects of securing employment. ‘ The Government is providing sus- tenance or relief work for the unemployed permanent residents of North Australia, and also fora large number of non-permanent residents who have arrived from the States and have decided to remain in the Territory. In the circumstances, it is not seen that any good purpose would be served by entering into anagreement with the State Governments in connexion with the matter.

page 4808

QUESTION

SALES TAX ON TIMBER

Senator J B HAYES:
TASMANIA

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

  1. Will timber from Australian sawmills be exempted from the operations ofthe sales tax?
  2. If not, will the Government seriously consider placing this product on the exempt list?

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

  1. It is not intended to tax sales of timber inthe lr«: when the sales are made to an independent miller by the person who felled the trees. Sales of sawn timber will, however, be taxable unless made to a licensed manufacturer or a licensed wholesaler. Such licensed persons will be taxable on the timber or products thereof when they sell for retail distribution or direct to consumers.
  2. Careful consideration was given tothis matter before the above decision was reached.

page 4808

QUESTION

AUSTRALIAN SEWING MACHINE INDUSTRY

Senator CARROLL:

asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. Are there any companies at present engaged in the manufacture of sewing machine beads in Australia; if so, where are the works of such companies situated, and who are the directors?
  2. Are there any companies being promoted for the purpose of engaging in such manufacture; if so, where, and who are the promoters or provisional directors?
Senator DALY:
ALP

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

  1. No.
  2. A company is in process of formation at Bendigo by Mr. J. Jeffery, of thefirm of Buckell and Jeffery. It is understood that several prominent business men will become associated with this company, but, until the company is actually formed, the names of these gentlemen cannot be announced. It is also understood that another company will be established in Sydney when the Sewing Machine Bounty Bill has been passed. It is staled that Mr. James MacDougall now president of the Victorian Chamber of Manufactures, and Mr. R. M. MacDougall, member of the firm ofR. M. MacDougall & Co. Ltd., of Sydney, will be directors of the new company, Mr. James MacDougall was general manager and a director ofRylands Bros. & Co. Ltd., Newcastle, from its inception, and Mr.R. M. MacDougall was a director of that company. Both gentlemen were previously associated with the Austral Nail Company’, Newcastle, prior to the establishment of Rylands Bros. & Co. Ltd. The persons who comprised the deputation on this matter in Sydney were: - B. M. MacDougall, of R. M. MacDougall & Co. Ltd., 397 Kent-street, Sydney; C. Squires, Managing Director, Malleable Castings Ltd.; T. Bower, Director, Malleable Castings Ltd., Marrickville ; and G.S. Caldwell, of Metal Trades Employers’ Association. ‘

page 4808

QUESTION

CARBURETTORS

Manufacture in Australia.

Senator CARROLL:

asked the Minis ter representing the Minister for Trade and Customs, upon notice -

  1. How many companies are engaged in the manufacture of carburettors in Australia?
  2. Where are the factories of the companies so engaged situated ? ‘
  3. Who are the directors, or alternatively, the managers of the companies concerned?
  4. How many employees are engaged In the industry ?
  5. What amount per annum is being paid in salaries and in wages?
Senator DALY:
ALP

– The information is being obtained.

page 4808

QUESTION

BOUNTY ON GALVANIZED IRON

Senator Sir HAL COLEBATCH:
through Senator Carroll

asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. What was the amount of bounty paid to the manufacturers of galvanized iron during the year 1929-30?
  2. What amount is provided on the Estimates for such bounty during 1930-31?
  3. How many men were directly employed in such manufacture during 1029-30?’
Senator DALY:
ALP

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

  1. £89,561.
  2. £140,000.

3.614.

page 4809

QUESTION

DIFFERENTIATION IN RATES OF DUTY

Senator PAYNE:
TASMANIA

asked the Minister representing the Minister for Trade and Customs, upon notice -

Will he take action at an early date to bring in the necessary legislation, in the form of an amendment of the Customs Tariff Act, to prevent the possibility of an anomaly existing, whereby, in the case of a vessel wringing cargo from overseas to various ports in the Commonwealth, differentiation may occur as to the rates of duty levied on the goods landed at the different ports.

Senator DALY:
ALP

– There is no differentiation in regard to goods duty paid at any particular time. The duty is chargeable at the rate in force when goods are entered for home consumption. It is considered there is not sufficient reason why goods on a particular ship should be singled out for different treatment from goods on another ship.

page 4809

PAPERS

The following papers were presented : -

Cotton Bounty Act - Return for 1929-30.

Iron and Steel Products Bounty Act - Return for 1929-30.

Papua and New Guinea Bounties Act - Return for 1929-30.

Power Alcohol Bounty Act - Return for 1929-30.

Shale Oil Bounty Act - Return for 1929-30.

Sulphur Bounty Act - Return for 1929-30.

Wine Export Bounty Act - Return for 1929- 30.

Hop Industry - Report by the Honorable J. A. Gunn (Director of Development).

Quarantine Act - Regulations amended - Statutory Rules 1930, No. 80.

The Budget 1930-31 - Papers, presented by. the Right Honorable J. H. Scullin, P.C., M.P., in connexion with the budget of 1930- 31 (final issue).

New Guinea Act - Ordinances of 1930 -

No. 12- Supply (No. 1 ) 1930-31.

No. 1 3 - Prisons.

No. 14 - Companies.

Report of the Commissioner-General for the Commonwealth of Australia in the United States of America, for the year 1929.

Seat of Government (Administration) Act, by-laws amended - Statutory Rules 1930 - No. 79.

page 4809

POST AND TELEGRAPH RATES . BILL

Second Reading

Senator BARNES (Victoria - Assistant

Minister) [11.10]. - I move -

That the bill be now read a second time.

This bill, one of the fiscal measures of the Government, seeks toalter the postal rates. Honorable senators are aware of the need to raise additional revenue, to meet the exceptional demands upon the finances of the country. The Government desires that the impost shall fall equitably upon the whole of the people. It is not a popular proceeding to increase taxation but the country’s straitened economic circumstances render the. step vitally necessary, and I am confident thatthe people generally desire to assist in pulling Australia out of the financial morass into which we have fallen. No one desires that the burden should fall upon any particular class of the community alone. Everybody is expected to shoulder his share.

In ordinary times the postal service would not be used for the production of additional revenue required forother purposes, and the Government hopes that the necessity which compels it to introduce this measure will not be of long duration.Clauses 1 to 6 make drafting amendments which give a more precise definition of the intention of the act, also greater clarity. Clause 7 is declaratory in respect of the existing practice with regard to fees prescribed for special services, such as the express delivery of mail matter, air mails, &c. The charges have been made in the past, and it is desirable to remove a doubt which has been expressed as to their validity. The material part of the bill is the increase in postal charges. These are set out in the schedule, and are expected to increase the revenue by approximately £1,000,000! It was proposed to increase the bulk rate for newspapers to l½d. per 10 ounces. The existing rate is l½d. per 20 ounces. The Government has given further consideration to that part of the hill, and I propose to move, when we reach the committee stage, an amendment that will retain the existing rates for bulk postage. Very strong representations have been made to the Government in the matter, and upon mature consideration, it was recognized that the old rates are more equitable than those proposed in the bill.

The bulk rate system of charges which is in operation with respect to newspapers is an appropriate system of charges for periodicals when posted by the proprietors of the periodicals or by newsagents. It is therefore proposed to introduce it. The old rate was Id. per 8 oz. per copy. The new bulk rate suggested is 2d. per 16 oz. of aggregate weight, and will, like newspapers, be independent of the number of individually addressed packages posted in the one consignment.

This arrangement will be in the interests of the proprietors of these publications, as, under it, the postage will not be greater than at present, although it will be slightly higher than the bulk rate of postage on newspapers.

With respect to letters and postcards, it is proposed to increase the charges by id. per oz. and £d. per card respectively.

With respect to second class mail matter the charges for printed papers, catalogues and unregistered books are proposed to be raised from Id. per 4 oz. to Id. per 2 oz., which is the present rate for commercial papers, patterns, &c.

At the present time, although there is a separate rate for catalogues, the postage is the same as that charged for other printed matter, and if one is increased so should the other be.

Third class mail matter includes books written by Australian authors in Australia, and newspapers,’ magazines and other periodicals wholly set up and printed in Australia. These publications will bear an inscription printed at the time of issue, indicating eligibility for transmission by post at third class rates. It will be seen that this designation will be of great advantage to the general public. They will be able to see at a glance the class in which the mail matter is placed, without the necessity of going right through the list to ascertain the rate of postage. The proposed increases in this class of mail are as follow: - Books, magazines, &c, from Id. per 8 oz. to Id. per 6 oz. ; newspapers from Id. per 10 oz. to Id. per 6 oz. These increases apply in respect of individual postings, as distinguished from bulk postings by newspaper proprietors and newsvendors. It will be noted that additional postage will be payable only when the publication is between 6 and 8 oz. in weight, or, of course, between 12 and 16 oz. The old rate applied to each paper or magazine posted, but the new rate will be reckoned on the aggregate weight, which will be of considerable benefit when a package contains two or more publications.

Honorable senators will be relieved to hear that the rate of postage in respect of Hansard will not be increased.

I direct the attention of all honorable senators to the improvement that is being made in the classification of mail matter. I think I can safely state that at the present time, apart from the letter rate, 95 per cent, of the people of Australia are unfamiliar with the prescribed rates of postage. Under the proposed new system there is very little for the people to learn and remember, and that little is easily comprehended.

As to the increased charges, I assure honorable senators that the distribution of the burden has been very carefully considered. Equity has been done to all classes, and for that reason I suggest to any honorable senator who may desire an amendment in respect of any special item that such a course will cause some other section of the community to bear more than its fair share. As I said in my opening remarks, in view of the necessity for raising additional revenue, there does not appear to be anything controversial in the measure. The Government confidently submits it to the favorable consideration of the Senate^ and believes that it will have a speedy passage.

Senator Sir GEORGE PEARCE (Westtern Australia) [11.21] . - I do not propose to ask for the adjournment of the debate on this bill, because all honorable senators are familiar with the subject with which it deals. Nor shall I occupy much time in deploring the necessity for its introduction. It is generally agreed that it is undesirable for the post office to be used as a taxing machine; but possibly the existing conditions may justify abnormal action on the part of the Government.

I wish to refer to a matter of which this measure furnishes an illustration. The Government has indicated its intention to increase considerably the burden of taxation, and this is an instalment of its proposals. It is estimated that these proposed increases in the postal rates will be the means of raising an additional £1,000,000 a year. That is a severe strain to place upon the community for this particular service. It is obvious that the number of newspapers, catalogues, letters and other articles that pass through the post office will, as a result, be considerably reduced. During the last eleven months, no fewer than 37,000 telephones have been disconnected, because, on account of the existing depression, many of those who formerly found themselves in a position to afford the enjoyment of this service, have been compelled to deprive themselves of it. In the same period, the number of additions to the service have totalled 11,000 compared with a demand of 40,000 in normal times. Because of the decrease in the quantity of mail matter that has to be handled, and the telephone service that has to be rendered, there ought to be a corresponding reduction in the expenditure of the post office. Yet the Government not only does not propose to reduce expenditure, but actually intends to increase it this year by £560,000 compared with last year and £900,000 compared with 1928-29.

Senator SIR GEORGE PEARCE.That is the general expenditure of the post office, apart from loan expenditure. No business man would conduct his business on those lines; if he found that his sales were decreasing, he would lower his expenditure. The post office is a business concern, and should be run on business lines. This year the expenditure should be decreased, not increased.

I am pleased to learn that the Government has decided to delete the provision in the bill that proposes to increase the bulk rates on newspapers, and I congratulate it upon its decision. The proposed rates would have been a heavy burden on country newspapers, and would have put many of them out of business.

Another matter to which I wish to refer is the rate on second-class mail matter. On this subject I have received the following circular letter from the New South Wales Master Printers and Connected

Trades Association, dated the 25th July. 1930 : -

In respect to the second-class postal matter included in these rates which are increased 100 per cent., my Association telegraphed the Postmaster-General, the Hon. J. A. Lyons, as follows: - “ The New South Wales Master Printers Association view with alarm the proposed increase of postal rates on second-class postal matter, thereby restricting the printing of catalogues and/or reducing the number of pages of those issued. The condition of the industry regarding unemployment is the worst on record, and an imposition of further rates can have but one effect, of accentuating the trouble now prevailing. Whilst fully realizing the present economic stress we earnestly urge that this increased rate may be omitted from the new postal rates. ( Signed ) Sinclair, Secretary.”

The writer quotes the reply that he received from the Postmaster-General, acknowledging the receipt of his letter, but pleading the present unfortunate financial situation as a justification for the proposed increase, and stating that the increase should be regarded as a temporary one. The circular then goes on to say-

The matter is of such vital importance to the printing industry that it is felt that the Government have not fully realized the present condition and the effect this new tax will have in bringing about unemployment in this key industry, employing 13,180 workers, as stated by the Government Statistician, for 1927/28 in New South Wales alone.

If proof was needed as to the present amount of unemployment in the industry, ‘the following extract from a Sydney leading newspaper should be convincing evidence of our claim that the conditions prevailing are the worst in the history of the trade : - “A special meeting of Unionists in the printing industry was held at the Trades Hall yesterday to hear recommendations by the executive of the Union to obtain funds for the relief for out of work members. . “ The President of the Union, Mr. Pillans, and the Secretary, Mr. Wilson, addressed the meeting. It was stated that the relief fund was exhausted and the Executive had decided to take a ballot on the proposal that all workers in the Trade earning under £7 per week should pay1s. a week and all earning over that amount 2s. a week until the end of this year. “ Last week the amount paid for relief was £250; for the last six months the Union had paid out nearly £5,000.”

As an example we have posted you under separate cover acatalogue issued by Messrs. David Jones’ Ltd., Sydney. This firm posts 70.000 of these catalogues twice each year, put owing to the increased postal rates have decided to discontinue doing so. Many other ofthese vast Emporiums throughout Australia have expressed themselves in a similar manner, that the increased postal rates make the issue prohibitive.

This class of work means an enormous a mount to printers, and the withdrawal of catalogue work can have but the effect of a considerable addition to the number of unemployed in the industry. The cost of this catalogue annually to Messrs. David Jones Ltd. is approximately £12,000, which shows the amount of labour employed in its production, and if all the emporiums adopted this attitude the amount would be colossal. The ‘ position of the Senate in budget matters;-

I particularly draw the attention of the Assistant Minister to this passage in the letter- is fully appreciated and realized, but we pray that at least a strong recommendation be made by the Senate in returning the bill to the House of Representatives to reconsider the clauses re second class postal matter, or inserting a special clause for bona fide catalogues at the prevailing rate of 4 oz.1d.

Thanking you in anticipation of your support.

The letter is signed by Mr. H. A. Sinclair, the secretary of the New South Wales Master Printers and Connected Trades Association. An increase of 100 per cent. in the postal charges on this perfectly legitimate class of mail matter is too great. These catalogues are recognized as most useful for the carrying on of the commerce of the country, andI am afraid that the Government, with its other taxation proposals, including the sales tax and primage duties, is hitting commerce very hard indeed. In the circumstances it might very well make concessions with regard to this class of mail matter. When the bill is in committee I shall submit an amendment to this end. These catalogues, which, are issued by many of the big commercial houses in the capital cities of the Commonwealth, are a great convenience to people who live in the back country, and their continued publication should be encouraged. We are informed that if the Government per sists with the proposal to levy the increased charge on this class of mail matter, the issue of these business catalogues will be altogether discontinued. If, as the outcome of the Government’s action, the printing of these catalogues is discontinued, the result will be an increase in unemployment and added inconvenience to that section of the community to whom these publications are so useful. I recognize the need for additional revenue, and I suggest that the Minister might accept a compromise by making the charge1d. for 3 oz. instead of, as proposed,1d. for 2 oz. The new charge will then be somewhat heavier than the old rate, but it will probably afford some relief, and possibly the firms concerned will not discontinue the issue of these catalogues. I am sure the Minister does not wish to see an increase in unemployment. He knows also that persons employed in the printing industry are in a particularly difficult positon during periods of unemployment, because in a sense they are specialists, and not inured to heavy manual labour, so they are not provided for in the class of relief works usually undertaken by governments during periods of industrial depression. I hope the Minister will give consideration to the suggestion made, and see whether the Government cannot reduce the proposed charges somewhat so as to meet the needs of the commercial community.

Senator PAYNE:
Tasmania

– With the right honorable the Leader of the Opposition (Senator Pearce) I appreciate the urgent need for additional revenue, and I anticipated the introduction of measures such as that now before this chamber. The right honorable gentleman stated that there seems to have been no effort to reduce expenditure in the Postal Department. This view has also been expressed locally in correspondence in the press. It is worth noting that within a few days an advertisement has been published in the Commonwealth Gazette inviting applications from lads between the ages of 14 years and 16 years to act as telegraph messengers, with a commencing salary of £90 per annum. A starting wage of 35s. for a boy of 14 years of age is too high. No department can conduct its business on such lines without imposing heavy burdens on the taxpayers. If a lad of only 14 years is paid 35s. a week at the outset of his career, what wage will he expect later in life? I mention this matter in passing, as evidence of the need for a careful examination of the expenditure of this department.With regard to the proposed increases in postal charges as outlined in this bill, I ask the Assistant Minister to give careful consideration to the fact that increased rates for the transmission of postal matter have a boomerang effect on the revenue of the department. The Leader of the Opposition has just read a circular letter from the New South “Wales Master Printers Association, pointing out that the proposed increased charges for the transmission of second-class postal matter will mean, in the case of David Jones Ltd., the payment to the department of £3,500 a year, instead of £1,750. for the distribution of its illustrated catalogue, and also that if the charge is insisted upon, the firm will discontinue altogether that publication. W e may assume that dozens of other firms will take similar action. The distribution of these catalogues plays an important part in the commercial life of Australia, and incidentally it means a considerable addition to the revenue of the department from the carriage of packages and parcels ordered by country residents as the result of the circulation of these productions. That trade will be lost to the department if the publication of these trade catalogues is discontinued. I hope that the Assistant Minister will give an undertaking that the increased rate on this class of postal matter will not be insisted on, because I believe this will be in the interests of not only thecommerical firms and people living in the back country, but also the department itself.

Senator DUNN:
New South Wales

. - Reference has been made by the right honorable the Leader of the Opposition (Senator Pearce) and Senator Payne to the increased charges proposed in this bill on the carriage by post of second-class mail matter, which consists mainly of business catalogues issued by the various commercial houses in the capital cities of the Commonwealth. It will interest honorable senators to know that many of the directors of importing firms in the soft- goods trade are also on the directorates of the leading newspapers in the State of New South Wales, and that it is from, the Associated Press in Sydney that we have heard so much lately about the proposed increased charges in the bulk newspaper rates. We all admit that a virile newspaper service is essential to the needs of a progressive community, and I think I can say without fear of successful contradiction that the newspaper service in Australia is equal to that in any other portion of the British Empire. But we should not forget that the function of the postal department is to render service to the community on reasonable terms, and that it should not be regarded as an instrument for the production of dividends for the proprietors of newspapers. Any loss incurred in the administration of the department must be made good by the taxpayers of the Commonwealth. Last year the loss on the telegraphic business of the department was no less than £224,000. During the last few weeks the Government’s budget proposals have been subjected to severe criticism, particularly in the columns of the newspapers, which have made pointed reference to the losses by the Postal Department under this and preceding Governments. But while the newspapers have been emphasizing the . discrepancy between postal revenue and expenditure, no mention has been made of the fact that the loss last year on the transmission of press telegrams and in respect of other departmental concessions made to the newspapers amounted to £300,000, which is a considerable sum of money. I do not advocate a censorship of the press, but steps should be taken by the PostmasterGeneral to avoid the present serious loss on the press telegraph services. The workers of this country, both the black coated brigade, and the manual workers in the cities and on the farms, have to pay full rates over the counter if they wish to send a telegram, either in the course of business or concerning their own private affairs. It is not right that the mass of the people should be penalized so that special concessions may be made to the newspapers.

There must always be a loss on postal services to distant places in the interior. Mails for the Northern Territory are shipped at Sydney on the Burns Philp steamer Malabar. The vessel touches at Queensland ports, and finally reaches Darwin. The mails are then transferred to a launch or government steamer, and carried up the Daly River into the interior, mail bags being dropped off at different points en route, five or six weeks after being shipped at Sydney. The cost of delivering these mails is very great. The same remark applies to some extent to the postal service in the western districts of Queensland, where mails have to be delivered to the settlers, prospectors and miners in the Diamantina and Mr Elliot areas. The Mr Isa district, where a considerable population is engaged in the pursuit of metals, is isolated and difficult of access, . and the carriage of mails is costly. At the same time we should recognize that the settlers are doing valuable pioneer work, and everything should be done to make their mail services as rapid and frequent as possible. Some of the £300,000 lost annually on the press telegraph service might well be devoted to providing better mail services for residents in the interior. It is time we examined our consciences on this point.

Senator Sampson:

– Has the honorable senator got one ?

Senator DUNN:

– Since I have become a politician I sometimes doubt .whether I have.

Because a duty of £1 a ton has been placed on newsprint, the newspaper publishing firms have increased the price of papers by id. each, so that they rake in a profit of £14 a ton on the transaction. This is the great newspaper combine which is always professing honesty of purpose, and is perpetually criticizing the Government! The PostmasterGeneral should see that this £300,000 a year “ backsheesh “ is withdrawn.

Perhaps the increased postage rates on catalogues issued by soft-goods firms may impose hardship on some of them, but we should remember that the period from 1920 to 1929 was a boom period without parallel in the history of the Commonwealth, and the soft goods firms then reaped a rich harvest. It is of no use their drawing a poor mouth now. They will be forced by the competition among themselves to continue the issue of their catalogues. Let me remind the Leader of the Opposition that a few months ago he took me to task because, on the motion for adjournment, I read a letter I had received from some certain, motor traders. He asked me whether I was stating a case on behalf of the motor accessory interests of Sydney. “With all respect to him, I now ask him whether, when he read the letter just now from the softgoods firms, he was stating a case on behalf of the softgoods interests of New South Wales?

Senator Sir GEORGE Pearce:

– I am concerned about the unemployed printers.

Senator DUNN:

– I know that the honorable senator’s heart bleeds for the unemployed! In this case he is concerned, not for the unemployed, but for the great mercantile interests. It was not the unemployed who sent the circular that the honorable senator read.

Senator Reid:

– Why?

Senator DUNN:

– Because the unemployed have not the necessary funds to send it. As an ex-Labour representative, the honorable senator who inter*jected should know that. It was the great softgoods interests which sent out that circular.

Senator Sampson:

– But does not the sending of catalogues through the post produce revenue for the Postal Department?

Senator DUNN:

– Admittedly, but that is no reason why the Post Office should be a benevolent institution, to serve the interests of the great mercantile firms.

Senator Payne:

– Does not the Post Office want the revenue they pay?

Senator DUNN:

– It is not a matter of revenue, but of hard business facts. These are hard times, and it is necessary, sometimes, to adopt harsh measures. As I have already stated, conditions will adjust themselves later. This depression is world-wide, but it will pass. It is estimated that there are 22,000,000 persons unemployed in the various countries of the world. If we admit the right of Australian softgoods houses to obtain special postage concessions for their catalogues, would not some of the great mercantile houses of London or New York which trade with Australia be equally entitled to seek concessions from the Postal Department during this time of depression?

Senator Sir GEORGE Pearce:

– The honorable senator seems to be under a misapprehension. The letter I read was not from any of the drapery firms; it was from the printers.

Senator DUNN:

– Well, that I received was from firms of master printers. I admit that many of them are having a bad time at present, but there is depression all along the business front. Those engaged in the softgoods retail trade in Sydney and other cities and who circulate profusely illustrated catalogues such as that exhibited by the Leader of the Opposition (Senator Pearce) are not likely to discontinue the practice. The competition between these large retail establishments is so keen that they will find that it is to their advantage to publish such catalogues notwithstanding the additional rate to be imposed. The public must be supplied with news at the lowest possible rate; but I cannot understand why a loss of nearly £300,000 should be incurred in transmitting press messages on behalf of the newspaper proprietors of Australia, many of whom are quite able to pay the full rates. According to the financial columns of the daily newspapers, many of the newspaper companies are making a. profit of from 8 per cent, to 10 per cent. In many instances these concerns are merely dividend making machines constructed in the interests of those who have invested capital in them. I cannot understand why the newspaper proprietors should oppose higher postal rates on newspapers since many of them have already- increased their prices by id. a copy which will more than compensate them for additional expenditure involved. Moreover, some of the newspaper employees, particularly those engaged in literary work, shortly have to fight a reduction of 10 per cent, in their salaries before the Arbitration Court. Considering all the circumstances, there does not appear to be any reason why the higher rates embodied in this measure should not be imposed.

Senator HERBERT HAYS:
Tasmania

– It is generally recognized that, in view of the financial position confronting us, the Government is justified in exploring every possible avenue in an endeavour to raise additional revenue. I do not think, however, that the anticipations of the Government as outlined by the Honorary Minister (( Senator Barnes) in moving the second reading of the bill will be realized. It has always been understood that the revenue collected by the Postal Department should be utilized to provide postal, telegraphic and telephonic services to the people, and that the department should not be used as a taxing machine for raising revenue for general purposes. The additional rates will detrimentally affect a very large number of rural settlers, many of whom are living in a state of isolation, and who depend upon mail matter to keep them in touch with current events and to provide them with information which is of use to them in the businesses in which they are engaged. Although those employed in secondary industries are experiencing a good deal of hardship, those engaged in primary production are also faced with considerable difficulties. The extra imposts on mail matter in addition to the other taxation proposals will affect country residents most severely. It was the policy of the previous Government, and I presume it is also the policy of this Government, to extend postal, telegraphic and telephonic facilities in country districts. It appears to be the policy of the Government so far as is possible to compel telephone users to become subscribers to the nearest telephone exchange, and, if they fail to do so, they are penalized by having to pay double rates. A number of rural settlers became telephone subscribers because between 6 a.m. and 8 a.m. and 6 p.m. and 8 p.m. they were able to get in touch with merchants and others with whom they transacted business. They are now compelled to be connected with the nearest telephone exchange and to pay higher rates. The PostmasterGeneral has been ill-advised in imposing these additional burdens upon the people, particularly upon country residents whom the Government should assist as much as possible. For some years it has been the policy to increase postal services, but this retrograde step which the Government is taking is causing a good deal of dissatisfaction. The imposition of higher telephone rates has resulted in many subscribers discontinuing the use of the telephone. During periods of depression, when the people can ill afford to carry additional burdens, the Government should endeavour to encourage business and generally to facilitate trade. But instead of doing that the Government is making the conditions still harder. I have received numerous complaints concerning these additional imposts. Representatives of commercial houses have informed me that the increased rates will have a very serious effect upon business and will result in a sharp decline in the volume of mail matter despatched. This will naturally lead to further unemployment. [ am afraid that the Government will not raise the additional revenue from this source that it anticipates, and that it will cause a good deal of hardship, particularly in country districts. I intend to support the second reading of the bill, but I think the Government should attempt to raise revenue in other directions before increasing rates on practically all classes of mail matter.

Senator McLACHLAN:
South Australia

– There is not a great deal of controversial matter to debate in this bill apart from the proposed increases of rates. I do not suppose that any honorable senator will take objection to the machinery clauses. We all appreciate the fact that the Government must raise additional revenue from somewhere. The Commonwealth Parliament and the various State Parliaments have always given special consideration to the carriage of newspaper publications. My remarks will therefore have no application to them. There is a good deal to be said for the view that the post office should not be made a taxing machine, but, on the other hand, it should not be administered in such a way as to involve the people in extra taxation to make up any deficiencies that may be incurred through its operations.

I was very interested in the catalogue which the Leader of the Opposition produced this morning. It has, as its frontispiece, a delightful picture, which, I have no doubt, is intended to prove attractive to country customers. The production is most artistic from many points of view, and its internal contents are, no doubt, in keeping with its covers.

Senator Crawford:

– These catalogue.are so attractive that they arealmost ruining the country storekeepers.

Senator McLACHLAN:

– Such a picture is enough to ruin any man. But apart from that it seems to me that the Government should make an investigation to ascertain definitely whether the carriage and distribution of literature of this kind - high class as it doubtless isis profitable, having regard to the heavy railway charges that have to be paid on mail matter generally. In such times as the present, the country cannot afford to carry mail matter of this class at a loss. We have, of course, to consider thepoint raised by the Leader of the Opposition that if the distribution of these catalogues, on a large scale, is too costly, a certain amount of unemployment will be caused in the printing trade, but I trust that the Minister will, in his reply, inform us definitely whether the department is handling this class of business at a profit or a loss. If the business is not profitable, the financial position of the country is such that the Government is entitled to make it so. I do not apprehend that honorable senators will support a continuation of this business at the present rates if they are unprofitable.

Something has been said during the debate about the proposed increase in the price of metropolitan daily newspapers.I do not suppose that it is any pleasure to the newspaper proprietors to increase the price of their publications, but they have, problably felt it necessary to do so because of certain other additional taxation which it is proposed to impose upon them. . 1 do not think that the levying of this increased taxationupon them would be regarded as sufficient reason for increasing prices; it is probable that thereal reason for the increase is the application of certain arbitration court awards in the industry and extra duties.

Senator Daly:

– And also because of the falling off in the purchasing power of the people.

Senator McLACHLAN:

– That falling off will probably be accentuated by the increase in prices. But I suppose that the business principle which the newspaper proprietors are applying to their business is the principle which the Government is now seeking to apply to the post office. Whatever the consequences may be, it is the duty of the Government to see that the carriage of mail matter, with the exception of newspaper matter, is done on a basis which will not involve the post office in any loss.

Senator Herbert Hays:

– The honorable senator may as well also advocate the application of that principle to our various education departments.

Senator McLACHLAN:

– The honorable senator may find that the State Governments will be obliged, before very long, considerably to curtail their expenditure on even that most excellent institution of our present social system. Times are hard, not only on the individual, but on the nation; and it would be unfortunate, in such circumstances, for the Government to continue the carriage of these catalogues at a loss. If an increase in the rates in respect of them is necessary it should be made. However, we shall be able to consider this whole question more carefully in committee, when we shall doubtless have had a definite statement from the Minister in respect to it.

Senator DOOLEY:
New South Wales

– The discussion on this measure has so far revealed a certain amount of sympathy with the Government in its financial difficulties, but has not brought to light any satisfactory solutions for our problems.

Senator McLachlan:

– The suggestion has been made that some one else should be taxed, but we do not know whom.

Senator Herbert Hays:

– If the post office were making a heavy loss there might be some justification for the introduction of this bill.

Senator DOOLEY:

– In the course of his speech, the Leader of the Opposition referred to the number of cancellations of telephone services in the various metropolitan areas, hut the right honorable gentleman omitted to direct attention to the number of new connexions that had been made. I find, from the official figures, that while there were 21,144 cancellations in Sydney, Melbourne, Brisbane, Adelaide, Perth and Hobart in the period to which he referred, there were 27,120 new connexions, or a net increase of 5,976.

Senator Herbert Hays:

– What is the normal increase?

Senator McLachlan:

– About 40,000 per annum.

The PRESIDENT (Senator the Hon W Kingsmill:
WESTERN AUSTRALIA

– I point out to honorable senators that telephone services is not the subject of this bill. While a passing reference has been permitted to that subject, because of its relation to the general financial position, it cannot bo discussed in detail.

Senator DOOLEY:

– I felt, Sir, that you would allow me sufficient latitude to prevent any wrong inference from being drawn from the statement of the Leader of the Opposition in this connexion.

Senator Payne has made a suggestion to meet the existing situation. He deplored the fact that boys of fourteen years of age were receiving wages at the rate of 30s. per week, and inferred that a reduction could be effected in this regard. But I point out that many of these boys have to travel long distances to and from their work, and at all kinds of hours. Consequently, they are not eligible to apply for workmen’s tickets, but have to pay full fares. As a matter of fact, many of these boys are not earning sufficient to feed and clothe themselves. The honorable senator also made some reference to the amount to be appropriated this year for expenditure in the Postmaster-General’s Department, but I point out to him that £277,000 less is being appropriated for that purpose this year than was appropriated last year. In my opinion, the people of Australia are receiving a better service from the post office at the prevailing rates than they are receiving from any other public utility. We have been accustomed to pay l½d. on each letter that we post, and that makes it seem hard to have to pay an increased rate ; but ifwe had had to pay a higher charge when times were better, there would not have been any complaint about it.

Senator Crawford made a pertinent observation when he interjected that the widespread distribution of catalogues had had a very serious effect on the business of country towns and country storekeepers. During the term of office of the previous Government, representations were made for a restriction to be placed upon the distribution of these catalogues. It seems to me that if the catalogues are the means of increasing the business of city commercial houses to the extent that has been suggested, an increase in the cost of distributing them by the post office is justified, in view of the existing low rates.

I believe that the second reading of this bill will be agreed to, and I shall reserve the right to discuss any amendments that may be proposed at the committee stage.

Senator REID:
Queensland

.- The Government is, doubtless, in a most difficult position financially, and must increase the revenue. It is desirable, therefore, that any increased taxation should be spread as evenly as possible over the whole community. The post office is, no doubt, rendering a most valuable service to the people, and I do not think that any injustice will be inflicted upon any one if the increased rates proposed by the Government in this bill are agreed to. I recognize that the department is bound to honour arbitration court awards, and cannot, therefore, economize in that direction, except by reducing the number of its employees; but the period of depression through which we are passing has caused a certain amount of falling off in business. The telegraph department has, of course, never paid for itself. If it were obliged to do so, its charges would have to be heavily increased. Valuable service has also been rendered by the Telephone Department. The telephone has altered- the outlook of many persons, particularly those resident in country districts. A few years ago, when its operations were confined to the cities, the department paid well; but when the late Government wisely decided to extend telephonic facilities to country districts, and to grant concessions to country subscribers, the position changed. The department is now conducted at a loss. I do not object to country residents being granted concessions, but frequently these things are overlooked by representatives of country districts. These concessions, which result in losses, must be paid for. ft may be that they are counterbalanced )y the indirect gain .to the country.

The Leader of the Opposition mentioned the effect on the printing trade of the proposed . increased charges on catalogues and similar publications. He said that the printing and setting up of catalogues was a valuable standby which enabled both men and machinery to be fully employed when otherwise work would be slack. That may be so ; but the fact remains that the distribution of illustrated catalogues by city firms has had a serious effect on the trade of country storekeepers. Almost every large city firm issues its own catalogue which it sends to residents in the country. Some families may receive a dozen such catalogues from different firms with which they have had business dealings. Some one has to pay for all that advertising. It is stated that the post office carries these catalogues at a loss. I hope that in the committee stage the Minister will be able to inform us how the three different classes of mail matter affect the finances of the post office. There was a time when nearly all the parcels traffic was handled by the railways; but during recent years, the hulk of the light parcel traffic has passed *rough the post office. The railways are left to carry the heavy goods. It is on the lighter goods purchased by country residents that the profit ‘is generally greatest. These are now sent by parcels post from the cities, resulting in loss, not only to the railways, but also to country traders. The distribution of catalogues by city firms attracts trade to themselves and deprives the country storekeepers of their profits. Honorable senators will therefore see that there are two sides to this question. The blocks for many of the catalogues sent throughout the country are imported, but the actual work of printing is performed in Australia. I am not greatly concerned about the effect which the additional postage rates on catalogues will have on the printing industry. It may be that the new rates will lead to further decentralization, which is desirable. I have no particular objection to this bill, because I realize that the present sta-te of the finances makes it necessary for the ‘Government to obtain additional revenue. In committee, the bill may be amended in certain directions with advantage.

Senator COOPER:
Queensland

.- We all realize that the Go- vernment has to find additional revenue somewhere. For that reason, it may be assumed that this bill has been introduced at the instance of the Treasury rather than of the post office. Every government desires to keep postage rates as low as possible; it .raises them only when it considers that such a course is necessary. I desire, however, to point out the effect which the proposed rates will have on technical journals and periodicals which circulate in country districts. People living in the city will be able to obtain these journals without having to meet the additional postage charges; but country residents, who can receive them only through the post, will be called upon to pay more for them. Large numbers of country residents look forward to receiving journals of this nature, because only by such means can they keep abreast of the times. I, therefore, favour the. suggestion of the Leader of the Opposition (Senator Pearce) that second-class mail matter should be rated at 3 oz. for Id. instead of 2 oz. for Id., as proposed in this bill. I commend his suggestion to the favorable considerationof the Government.

Senator BARNES:
Assistant Minister · Victoria · ALP

– The Government realizes that it will not gain in popularity by imposing additional taxation on the people; but the financial condition of the Commonwealth has forced it to face stern realities. The public must be brought to realize that the ledger must be balanced.’ In order to balance the ledger the Government is forced to adopt measures which are, perhaps, unusual. In imposing additional taxation it has endeavoured to spread its incidence as evenly as possible over the whole community.. I do not know why the firms which issue trade catalogues should expect to receive preferential treatment from the Postal. Department. At present catalogues are rated at Id. for every 4 oz. or part thereof. It is proposed that only 2 oz. shall be allowed for Id. - the rate which is at present charged for other second-class mail matter, such as commercial papers, patterns and merchandise. If the firms which issue catalogues wish to escape, the additional postage they cam do so by keeping the weight of their catalogues under’ 2 oz. The late Government found that the1 post office was making huge losses annually on account of the low rates charged for catalogues and similar publications. The new rates proposed in this measure will not entirely remove those losses; or, if they will, any profit made will be very small. <

Senator Payne:

– Special rates were charged for mail matter of this kind because of the .indirect gain to the post office through the trade they bring to the department.

Senator BARNES:

– I doubt whether that additional trade balances the ledger.

Senator Sir GEORGE PEARCE:

– Has the Minister the figures upon which his statement is based?

Senator BARNES:

– I am informed that the position is as I have stated. I have not the figures with me, but shall endeavour to supply them to honorable senators when the bill is in the committee stage.

Senator Sir George Pearce:

– Obviously, the position is determined by the rates charged by the railways for the carriage of such mail matter.

Senator BARNES:

– Many business firms find the issue of catalogues a profitable investment because of the additional business they bring:. I do1 not see why, in such circumstances, these firms should expect the department to carry their catalogues at a loss.

The Leader of the Opposition said’ that these higher rates would affect the printing trade, and, possibly, throw out of work printers and others engaged in that industry. Those firms who find the issue of catalogues to be profitable will, no doubt, continue to send them out as in the past. But if they desire to avoid the additional charges, they can do so by reducing the size of their catalogues. It would appear that hitherto many city firms have taken advantage of the low rates of postage on catalogues to bring additional business to themselves, without caring whether they represented a loss to the department. The old rates enabled second-class mail matter to be sent through the post for 4d. a lb.

Sitting suspended from 12.45 to 2.15 p.m.

Senator BARNES:

– Senator Pearce has asked for figures showing what loss was suffered by the department in the carriage of catalogues

I find on inquiry that this information cannot be obtained except at great expense. At present there are thirteen classes of mail matter and nine rates of postage. The thirteen classes of mail matter are sorted, despatched and delivered together,, and the cost of transportation is based on the distance carried and the weight conveyed. While the department has never incurred the enormous expense of ascertaining what each particular class of postal matter costs, I am informed that other countries, such as America, have done so. The investigation has been intricate and costly, and has shown that all classes of postal matter, with the exception of letters, are carried at a loss.

Senator McLachlan:

– That is secondclass mail matter.

Senator BARNES:

– Second and thirdclass mail matter. Reverting to the question of catalogues, these are issued only by large business firms, and it would be quite unfair for those firms to be singled out by the Postal Department for special treatment. The rate on commercial papers, patterns, samples, &c, is the same as the new rate now proposed for catalogues. I can see no justification whatever for- the suggestion of the Leader of the’ Opposition (Senator Pearce). I understand that under an international agreement, the unit for this class of material is the same as that proposed under the bill and to alter it from a Id. for 4 oz. to Id. for 3 oz. would involve a breach of that agreement. It is necessary to have uniformity in this regard so that the work of the department may be carried out with expedition and satisfaction to all concerned. Senator Cooper has referred to technical journals. Those publications will not be affected in any way under the bill. The rate on technical journals will remain as it is at present.

Senator Cooper:

– Do those publications come under Part I. of the schedule ?

Senator BARNES:

– They come under tho heading of periodicals and are covered by the bulk rate for that class of matter.

Senator Cooper:

– The rate is therefore 2d. for 16 oz.

Senator BARNES:

– Yes. The Leader of the Opposition has asked for a com parison of the post office expenditure for corresponding periods of this year and the previous year. That information was given by the Prime Minister in his budget speech in another place. I do not. wish to anticipate the budget debate in this chamber. When that takes place, the questions of the Leader of the Opposition, will be fully answered. The Government is unable to adopt the amendment suggested by the Leader of the Opposition. This is a common sense bill put up by a common sense Government before what it believes to be a common sense House, with the object of overcoming to some extent Australia’s financial difficulties. I commend it to the Senate.

Question resolved in the affirmative

Bill read a second time.

In committee:

Clauses 1 to 3 agreed to.

Clause 4 -

Section 0 of the Principal Act is amended (a) by omitting the word “letters,” . . .

Senator PAYNE:
Tasmania

– What is the object of paragraph a, and in what way does it affect the existing act?

Senator Barnes:

– A “ letter “ is a postal article, and, therefore, we do not want to use that Word.

Clause agreed to.

Clauses 5 and 6 agreed to.

Clause 7 (Limits of town and suburban telegraph rates).

Senator PAYNE:
Tasmania

. Is it intended to make any alteration in the rates for accelerated transmission, and is there to be any alteration of existing regulations?

Senator Barnes:

– No.

Clause agreed to.

Clause 8 -

The First Schedule to the Principal Act is repealed and the following schedule inserted in its stead : -

page 4820

FIRST SCHEDULE

Part I

Newspapers . . . One penny and a halfpenny per sixteen ounces or part of sixteen ounces on the aggregate weight of newspapers posted by any one person at any one time.

Senator BARNES:
Assistant Minister · Victoria · ALP

– I move -

That the word “ sixteen “ before “ ounces “ in the rate applying to newspapers be left out with a view to insert in lieu thereof the word “ twenty “.

The amendment, if passed, will leave the rates on newspapers posted by any one person at any one time, as they are at present.

Senator Sampson:

– That applies to bulk rates on newspapers?

Senator BARNES. Yes.

Amendment agreed to.

Senator Sir George Pearce:

– Is it proposed to make the same alteration to t he rate applying to periodicals?

Senator BARNES:

– No.

Senator Payne:

– Is 2d. per 16 oz. the existing rate on periodicals?

Senator BARNES:

– No. The existing rate is1d. for 8 oz. or part thereof. The only alteration proposed by the bill i n regard to periodicals is to apply a bulk rate to them. The alteration will provide butter and cheaper facilities for the publishers of these magazines.

Senator PAYNE:
Tasmania

.- It seems to me that the bill proposes an increase in the postage rate on periodicals. On an individual periodical weighing 8 oz. it will now be 2d. instead of1d. The publisher of a periodical may have a thousand bona fide subscribers to whom separate copies of the periodical are posted, and it seems to me that under this new proposal the postage rate on those periodicals, if they are posted separately, is to be doubled.

Senator Barnes:

– The rate is now charged on each individual article, but under the bill as many periodicals as a publisher may choose to post can be despatched through the post office at a bulk rate and not at the rate previously imposed on each separate copy.

Senator PAYNE:

– It is quite evident th at the rate for separate copies will be doubled, whether the magazines are posted in bulk or otherwise. The proprietor must pay 2d. for each copy forwarded to his subscribers whereas previously he paid1d. if the weight of the periodical did not exceed 8 oz.

Senator BARNES:
Assistant Minister · Victoria · ALP

– The honorable senator is evidently under the impression that a special stamp has to be placed on each separate magazine for delivery to individual subscribers. Such will not be the case under the bill. The publisher will send along to the post office a load of magazines for delivery, and the bulk rate will be based on the weight of the whole load. Each periodical will not have to bear a stamp.

Clause also consequentially amended and, as amended, agreed to.

Title-

Senator Sir GEORGE PEARCE ( Western Australia) [2.37]. - I was under the impression that Part II. of the schedule would be put separately.

The CHAIRMAN (Senator Plain).Both of the schedules formed part of clause8, which has already been agreed to.

Senator PAYNE:
Tasmania

.- I do not feel disposed to allow the increased rate on catalogues to pass without giving it serious consideration. It will have a damaging effect on the revenue of the post office, and also on trade generally.

The CHAIRMAN:

– I did wrong in giving Senator Pearce latitude to debate the schedule on the title, but if I also permit the honorable senator to do the same, I cannot prevent a general debate on a clause to which the committee has already agreed. I ask the honorable senator, therefore, not to discuss the schedule.

Senator PAYNE:
TASMANIA · NAT; UAP from 1931

– It was the general impression of the committee that opportunity would be given to discuss both parts of the schedule separately. As a matter of fact the debate on the second reading was mainly directed towards Part II. of the schedule.

The CHAIRMAN:

– Both schedules form part of a clause to which the committee has already agreed.

Bill reported with amendments.

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

– As the Postmaster-General has to take preliminary steps in order that the new postal rates may take effect from the 1st August, I ask the indulgence of the Senate to suspend the Standing and Sessional Orders for the purpose of enabling the remaining stages of this bill to be passed without delay. I move -

That so much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through its remaining stages without delay.

Question resolved in the affirmative.

Report adopted and bill read a third time.

page 4822

SUPERANNUATION BILL

Second Reading

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

.- I move-

That the bill be now read a second time.

The primary reason for the introduction of this measure is the necessity for an amendment of the act, to give effect to the recommendations of the Superannuation Board based upon the report of the actuary on his investigation of the state and condition of the fund as at the 30th June, 1927. This was the first quinquennial investigation of the fund, and the result was included as an appendix to the report of the Superannuation Board for the year ended 30th June, 1928, which has been laid on the table of thischamber. Another reason for the introduction of the bill is that while generally the act is working very smoothly, the board has discovered certain anomalies, which, in some cases, have operated harshly or contrary to the spirit of the act, but which could not be removed without legislation. Advantage is being taken of the opportunity afforded by the submission of this bill to provide for the removal of these difficulties where such can be done without involving the Commonwealth in any material increase in expenditure or committing the Commonwealth to any heavy increase in the years to come; also to provide for amendments to certain machinery clauses which have been found necessary or desirable.

Dealing, in the first place, with the investigation by the actuary, section 11 of the act provides that an investigation as to the state and sufficiency of the fund shall be made at the expiration of each period of five years after the commencement of the act, by an actuary appointed by the Superannuation Board. The first investigation for the period ended the 30th June, 1927, has been made by the staff actuary to the board, Mr. F. W. Barford, M.A., who reported that his examination revealed a surplus at the 30th June, 1927, of £97,862, of which sum he recommended that an amount estimated at £43,000 be expended in the following benefits not provided for under the act, and to be operative until the 30th June, 1933, only, the situation to be subject to review at the next investigation in 1932 : -

  1. £12,000 in refund, of contributions to the representatives of male officers, who have died or who die in the service, and who wereeither single men or widowers without children under the age of sixteen years; (b)£ 2,000 in increasing children’s pensions from £13 to £26 per annum in the case of children who have lost both parents;
  2. £29,000 in a cash benefit of £5 per unit on the death of a contributor or a pensioner who has been a contributor.

The actuary further recommended that the benefits under a be operative from the 5th January, 1923, the date of the commencement of contributions, to the 30th June, 1933, and those under b and c for the period of six years from the 1st July, 1927, to the 30th June, 1933. He also recommended that the balance of approximately £55,000 should be reserved. This amount the actuary considered was sufficient to safeguard the fund for the next quinquennium. The matter was considered by the Bruce-Page Government, which was averse to providing for these benefits for a limited period only, and at first decided to include them as permanent benefits chargeable against the fund. The actuary reported that he was unable to certify that the fund could, with safety, stand a permanent addition of these benefits to its liabilities. He further reported that if it were the desire of the Government to include in the bill only those benefits whichcould be reasonably guaranteed in perpetuity without an increase in contributions, it would be better to withdraw the third benefit and restrict the permanent provision to the first and second, the refunds of contributions to the representatives of single men and widowers who die in the service, and the orphans’ benefits. The board supported this view, to which the late Government agreed.

This Government has given full consideration to the position, and is in agreement with the views of its predecessor that the first two benefits should be included as permanent provisions in the act, the expenditure in each case to be wholly a charge against the fund. As regards the third benefit, the Government considers that as the actuary has certified that the amount of £55,000, which is to be placed in reserve, is sufficient to safeguard the fund during the present quinquennium, which expires on the 30th June, 1932, effect should be given to the original recommendation of the board by including in the bill provision for the cash death benefit of £5 a unit, to be paid upon the death of contributors, until the 30th June, 1933, which is a year after the expiry of the second quinquennial period, and thereafter, until a date to be notified by the Governor-General in the Gazette, upon which date it shall cease to have effect. The reason for providing that this benefit shall continue in force until 30th June, 1933, is to avoid a cessation of the payments of the benefit during the period that the fund is being investigated at the end of the second quinquennium. The actuary has reported that, allowing for the first two benefits to be paid from the fund in perpetuity, there will be sufficient money in the portion of the surplus of £43,000 to meet the payments in respect of the third benefit during the full period from the 1st July, 1927, to the 30th June, 1933. A further report has been furnished by that officer in which he states that the condition of the fund is such that it can be safely assumed that the benefit can be maintained for at least one more quinquennium, that is, until the 30th June, 1938.

The clauses dealing with these benefits are numbers 5, 11, 12, 13, 14 and 17. Clause 5 is a machinery clause, and, to gether with clause 17, gives effect to the decision to pay the death benefit for a limited period. Clauses 11, 12, and 13 provide for the additional pensions in respect of orphans; and clause 14 provides for refunds of contributions to representatives of single contributors and widowers who die in the Service. I shall be pleased to give honorable senators any information that they may desire as to the machinery of the bill when we reach the committee stage. Some explanation as to clause 4 may not go amiss at this stage. The amending act, passed in 1924, provided for the removal of the naval forces from the superannuation scheme, it being considered by the naval authorities that the deferred pay system was better suited to the navy. There were a few members of the naval forces to whom the pension system was preferable, and who stood to lose heavily if forced to accept deferred pay. The Bruce-Page Government arranged that these officers should pay contributions into the revenue at the same rate as they would have continued to pay to the fund had the act not been amended, and that, on their retirement, annual allowances would be. provided in the Estimates, year by year, equal to the pensions they would have drawn had they continued as contributors to the fund. It is desired to place these employees in the same secure position as contributors to the fund, by providing that their contributions shall be paid into the superannuation fund and that pensions shall be a legal charge against the fund, the Commonwealth bearing a share of the pensions, as provided under the act.

As to clause 6, the actuaries, in determining the rates of contribution, intended that payments in respect of each individual unit should cease an exact number of years after the commencement of the contributions in respect of that unit. The act provides that contributions in respect of all units taken up from time to time by a contributor shall cease at one date, which is an exact number of years from the date the employee first, commenced to contribute to the fund. The effect of this is that some contributors pay more, and others less, than the actuaries intended should be paid. The amendment rectifies this anomaly. Subclause b adds a new sub-section 3, which gives certain officers who had either retired or were on the eve of their retirement, and whose salaries were subsequently increased to higher salary groups from a date prior to the cessation of their contributions, the right to elect for additional units for which they could have elected had their salaries been fixed before their contributions censed. The position in which these officers are placed is the outcome of the length of time, a period of over four years, occupied by the Public Service Board in the classification of the Service, and in the review of salaries subsequent to the classification. It is only fair to the officers concerned that they should not suffer owing to cessation of contributions or retirement intervening before the Public Service Board had finally settled the rates of salary that they should receive. The officers who elect to contributeunder this amendment will be called upon to pay a full year’s contributions at therate corresponding to the maximum age for retirement. The remaining clauses may be discussed conveniently in committee.

Senator Sir GEORGE PEARCE:

– (Western Australia) [2.56]. - I have always been very proud that I was associate, with the inauguration of this legislation. I had the honour to be a member of the committee of the Cabinet that assisted in drafting the original measure. Our Superannuation Act has been of immense advantage to the Commonwealth public servants, and it was very fortunate indeed for the service that the administration of the act was placed in the capable hands ofMr. Ross. I desire to record my admiration of the splendid services that he has rendered as President of the Commonwealth Superannuation Board.

One of the principal matters dealt with by this bill came before the last Government for consideration. It arose out of the quinquennial actuarial investigation that was made in 1928, as a result of which it was disclosed that the superannuation fund had a surplus over liabilities of ?97,862. It is interesting to learn how the surplus came about. Of that amount ?46,300 was provided by excess interest profits on investments. As a result of the quinquennial investigation, the actuary made certain recommendations as to additional benefits being given to contributors to the fund. They were -

  1. That ?12,000 be refunded to the representatives of male officers who have died or who die in the Service, and who wereeither single men or widowers without children under the age of sixteen years.
  2. That an amount of ?2,000 be utilized in increasing children’s pensions from ?13 to ?26 per annum in the case of children who had lost both parents; and
  3. That ?20,000 be distributed as a cash benefit on the basis of ?5 a unit on the death of a contributor or a pensioner who had been a contributor.

The actuary reported that benefits a and b could be made permanent, but that the fund was insufficient to permit of c being made permanent. The Bruce-Page Government considered that it was unwise to make any increase of a temporary nature, and, therefore, did not propose to take any action with regard to suggested benefit c. This bill proposes to make benefit c temporary, for a period of five years. I do not think that that isa very wise action. State superannuation funds have, on occasion, proved to be unsound, because of risky administration such as that. Very great care should be exercised when there is a temporary surplus, and the Government should again weigh the circumstances before distributing the surplus in the form of increased benefits. Temporary benefits are objectionable because, once they are granted, even if for a term of only five years, those in receipt of them feel aggrieved when they are withdrawn, and agitate for their continuance. They raise hopes which may not be realized. The manner in which these surpluses have been earned indicates uncertainty. The tendency for interest rates will be downward after we get over the present depression, so interest earnings on investments are not likely to be so large in the future. I do not approve of temporary payments suggested. If we are going to distribute benefits under this superannuation scheme, they should be of a permanent character.

Senator Daly:

– They are actuarially guaranteed a continuance for a further five years.

Senator Sir GEORGE PEARCE.That must be purely conjectural. A matter was brought under my notice on behalf of the military officers, andI desire to place before the Senate their position as it was outlined to me. I may add that through the courtesy of the Minister, I had an opportunity to discuss this subject with Mr. Boss, who has shown that it is not practicable to do what has been suggested. At present, so [ understand, most army officers contribute to pensions payable on attaining the age of 60 years only, whereas in fact many of them retire at ages less than 60, majors and officers of the staff corps below that rank being required to retire at 55. In these cases contributors may, under Part IVa of the act, section 60 m, draw only the actuarial equivalent of the pension payable at 60, that is, pension of about half, or perhaps a little more, lit has been urged that, if, now, the present opportunity could be taken to so amend the act that staff corps officers «ould contribute for pensions payable at age less than 60, by contributing of course, at a higher rate, their future could be regarded with less concern and something would be done for them which might help to set off the disabilities under which they at present labour owing to rationing, retrenchment, and the like. Such an amendment to the act, it is argued, would impose no burden upon the mass of contributors to the fund, because the increased amounts payable under pensions would be paid for by an increase in the rates of contributions. It is, of course, assumed that the present Government contribution of pound for pound in the case of pensions which will later be paid would also stand, and it is hoped that the Government would be prepared to do this. I am informed that there are other cases in the Department of Defence, too, namely those of Air “Force officers, who would doubtless be glad to avail themselves of opportunity to come into the fund for the purpose of pensions payable at retiring ages less than 60. That appears on the face of it to be a reasonable proposition; but the memorandum which Mr. Boss has supplied to me shows that heavy additional payments would be necessary to make provision for these officers to retire at the earlier age and, moreover, if their claim were admitted, other sections of the Public Service would claim the right to similar treatment. I can see that this mIght he embarrassing to the adminis trator of the fund. Mr. Ross further pointed out that the amount involved would be considerable; and that if this principle were applied to the rest of the Service, the additional cost to the Commonwealth would be from £150,000 to £160,000 per annum. I should not feel justified in advocating a proposal which may have this unfortunate financial result to the Commonwealth in the present state of our finances. There is another point. I understand that if military officers retire at the age of 55 years, they are entitled to about 70 per cent, of the ordinary pension payment which they would receive on retiring al the age of 60 years. This is considerably more than one-half the pension, as stated in the memorandum of their case when it was placed before me. I have brought under the notice of the Minister a technical amendment relating to air force officers, and I understand the Minister is prepared to accept it.

Senator MCLACHLAN:
South Australia

– While I do not agree with the right honorable the Leader of the Opposition (Senator Sir George Pearce) that there is likely to be a shrinkage in the rate of interest on investments in the near future, I direct attention to the fact that this is a proposal to segregate a particular section of the Public Service for a period of five or ten years. If there is any weakness in the bill, it is, I think, in those provisions relating to the temporary nature for the disposal of this surplus £54,000 mentioned by the Minister. The calculation made by the actuary was, probably, on the most conservative lines. I assume he took the rate of interest at 4^ per cent., and when the fund would be yielding 5^ or 5£ per cent., whereas now it is yielding 6 per cent. I cannot help thinking it would have been better if the Government had arranged for a reduction in the contributions from all members of the Public Service rather than spread the payment of these excess interest earnings over a limited section. Such an arrangement would have been permanent.

Question resolved in the affirmative.

Bill read a second time.

Tn committee:

Clauses 1 and 2 agreed to.

Progress reported.

page 4826

SEWING MACHINE BOUNTY BILL

Second Reading

Senator BARNES:
Assistant Minister · Victoria · ALP

– I move -

That the bill be now read a second time.

The measure provides for a bounty of £2 on each household sewing machine head manufactured in Australia for” five years from 1st October, 1930. The bounty is linked up with- customs duties imposed as from 20th June, 1930, on household sewing machine heads, under Item 168b of the tariff. These duties are 10s. (British preferential), and 20s. (general tariff) per head. The bill is drawn on the same lines as other bounty acts, except in regard to the following matters that have particular relation to the circumstances concerning the manufacture of sewing machines: - (a) The total amount of bounty payable in any one financial year will not exceed £20,000 ; but, as usual, the unpaid balance of any financial year may be paid in any subsequent financial year, in addition to the maximum amount for that year; (b) the bounty of £2 per head will be reduced if the present effective customs duties of 10s. British and 20s. foreign on imported machine heads are increased to an extent equivalent to the increase in such duties; and (c) no bounty will be payable unless at least 95 per cent, of the factory or works cost of each Australian sewing machine head is due to the costs of material and parts made in Australia, and of labour employed in Australia.

In common with other bounty acts, provision is made for withholding the bounty in the event of the manufacturer not selling sewing machine heads at a reasonable price, or of his profits exceeding 10 per cent, per annum. Furthermore, the bill, provides that bounty will be withheld if reasonable conditions of employment a.nd rates of wages are not observed by the manufacturers in respect of employees engaged in the manufacture of the heads.

The magnitude of importations of sewing machines into Australia is not generally realized. The total imports have been from 45,000 to 50,000 each year for some time, and the present importations are slightly over 40,000 machines per annum, or 800 per week. These imports are valued at -

Until the 20th June, 1930, no duty Avas actually imposed on imported- heads ; but. since the 1921 tariff, deferred duties have been imposed on heads, namely, £2 10s. British preferential, £3 intermediate, and £3 10s. general tariff. These deferred duties have been postponed from time to time pending the establishment of a local industry for the manufacture of heads, and they now stand deferred until on and after the 1st January, 1931. In due course, if Australian manufacturers produce a sufficient number of sewing machine heads, the deferred duties will be made operative, and, in that event, the bounty of £2 per head provided by the bill will cease forthwith.

I now propose to refer to the events which led to the Government’s decision to introduce this bill. In 1924 Bendigo Sewing Machines Limited started making complete household sewing machines at Bendigo, on the understanding that the Government of the day would soon, apply the deferred duties on heads already referred to. However, the Government did not make these duties operative, and, in May, 1925, the Bendigo company applied for a bounty of £2 10s. per head. The matter was referred in the usual manner to the Tariff Board for investigation, and, after a thorough inquiry, the Tariff Board recommended, in December, 1925, that a bounty be paid for three years at the following rates: -

The then Government, however, decided not to grant the bounty. The reason given for this decision was that the Bendigo company was then producing sewing machines at the rate of only 40 per week, or 2,000 per annum, whereas it had been the practice to expect a new industry to meet at least 40 per cent, of Australia’s requirements before any tariff or bounty assistance would be given. In this case, of course, the Bendigo company was only producing 5 per cent, of the Commonwealth’s requirements. At this stage I should like to remind honorable senators that, however necessary or feasible the condition, that 40 per cent of Australia’s requirements should first be supplied by new industries, might have been from the early days of federation up to the end of the war period, such a condition, if applied today, would effectually preclude the establishment of almost any new industry in Australia. During the earlier years of the Commonwealth, there was not such a great disparity between Australian and foreign costs of production, and it was possible for a well-capitalized concern to suffer the initial losses frequently involved in producing 40 per cent, of the requirements of the Commonwealth of any particular article. When the necessary tariff protection had been given later the company could recover the earlier losses in a comparatively short time. To-day, however, that would seldom be possible, owing to the larger differences between Australian and foreign costs which now exist, and to the present reluctance of investors to face a long period of losses or absence of profits on their capital.

As already stated, the government of the day did not approve of assisting the Australian sewing machine industry either by making the deferred duties effective or by granting a bounty. The result was that the Bendigo Sewing Machines Limited failed, and went into liquidation in 1926, after producing 1,500 sewing machines.

I submit to the Senate that the failure of this company should not be taken as an indication that the successful production of sewing machines in Australia is impracticable. After all, it must be remembered that the Bendigo company’s failure was the natural result, under Australian conditions, of having to manufacture sewing machine heads oh a freetrade basis in competition with similar heads produced in other parts of the world, with much lower labour costs and under advantageous conditions as to mass production. Inquiries made by the accountant of the Department of Trade and Customs have proved that the Bendigo machine was practically identical with the best make of imported machine of that time. In a considerable number of cases investigated, it was found that after constant use from threeand a half to five years the Bendigo machine had given almost complete satisfaction. This was a noteworthy achievement, considering the brief experience of the company in a project not previously tried in Australia, and the results suggest that there is no adequate reason why the major part of Australia’s requirements for household sewing machines should not be made within the Commonwealth. The Wilson Sewing Machine Company of North Melbourne produced a few sewing machines in 1925, but it also closed down owing to lack of protection.

Some months ago, the present Government was urged to consider the best means of re-establishing this industry. After observing that a favorable report on the industry had been made by the Tariff Board in December, 1925, it directed a special departmental investigation in regard to the plans that had been drawn up for the re-establishment of a new company at Bendigo for making complete sewing machines. The investigation showed that the successful revival of the industry was well within the realm of practicability. The most skilled employees associated with the original company are still available. All production machinery, except a few obsolete machines that have been disposed of, is still held in Bendigo, and the persons behind the venture are men of good standing and financial resources. Furthermore, the Government was impressed with the assurances of those concerned that adequate capital could be obtained for re-commencing manufacture and meeting the initial difficulties of production and sales that are common to nearly every new enterprise.

The Government was also seised with the potential value of the sewing machine industry to the Commonwealth. When producing between 40 and 50 machines per. week, the original Bendigo company employed 60 hands, and this means that if Australia can make all the sewing machines she requires, constant employment will be found for nearly 1,000 workers in sewing machine factories.

Senator Sir George Pearce:

– Who estimates that that number will be employed ? Mr. Forde ?

Senator BARNES:

– An officer of the Trade and Customs Department. In addition, local manufacture will immediately create a demand for raw material of iron and wood for sewing machine stands and cabinets, respectively, and so provide further employment in the timber, furniture, iron and other industries. Further, the sound establishment of household sewing machines will most likely lead to the production of factory sewing machines, such as those used in the hoot industry. The manufacture of sewing machines does not require a large number of highly-skilled workmen, because practically all the parts of the machine are stamped out or otherwise made from master-gauges, dies, templates, &c. It is, of course, essential that gauges, dies, and templates should be exceedingly accurate, and should be maintained in that condition. This latter phase of the industry requires the employment of skilled engineers, and on this point the Bendigo company has satisfied the inquiries of the Government.

Accordingly, the Government decided to introduce the present bill. It is significant that, immediately following the announcement of the Government’s policy in this regard, the Assistant Ministor for Trade and Customs (Mr. Forde) was interviewed by Mr. R. M. MacDougall, of Sydney, whose father, Mr. James MacDougall, started the steel wire industry in Australia, and was responsible for the establishment of the huge works of Rylands Brothers Limited at Newcastle, previously known as the Austral N”ail Company. Mr. MacDougall, senior, has been for the last four years president of the Victorian Chamber of Manufactures. Mr. R. M. MacDougall was works and sales manager and a director of the Austral Nail Company, and then of Rylands, Brothers Limited. He supervised the design and building of these companies’ plants, and the training of the workmen and staff numbering between 800 and 3.000 men who were all Australians. Mr. R. M. MacDougall informed the Assistant Minister that he could obtain the necessary capital and would start a sewing machine factory in Sydney by the end of next November, if sufficient assistance is granted now. Mr. James MacDougall will be a director of the new company, and a substantial shareholder. Mr. MacDougall expects that his company’s production will begin at the rate of 5,000 machines per annum and soon develop to 10,000 per annum. Already he has a suitable factory under offer. Fifty employees will be engaged at the start, probably 100 next January, and 200 the* following June. Both vibrator and rotary types of sewing machines will be made. The company will build most of its plant in Australia, and Mr. MacDougall has already taken over an efficient engineering shop, and made tentative arrangements with two of the largest distributors of Sydney for sales, subject to the quality of the machines being satisfactory.

It is also important to note that although all sewing machine heads are now imported local industries have already been established for the manufacture of the iron-work stands and cabinets. Some S,000 machine heads each year are thus fitted with Australian stands and cabinets, which are made in Sydney, and the quality and appearance of the Australian workmanship are exceptionally good. The bill will certainly stimulate the local production of cabinets and stands, as well as render possible the manufacture of the machine heads.

It is important to note that the duties on imported heads, imposed as from 20th June, 1930, namely, 10s. British preferential, and 20s. foreign tariff, will at once return additional revenue to the extent of £25,000 per annum on the present importations. That amount will, of course, be reduced as local manufacture progresses. However, it is not expected that more than 8,000 Australian machines will be made during the first twelve months of the bounty, nor more than 10,000 to 11,000 machines’ during the second twelve months. Therefore, the duties that are already being collected will be more than sufficient to pay the bounty during the first two years. If production exceeds 10,000 machines per annum, the rate of bounty, namely, £2, will be automatically reduced, because the total sum available each year is limited to £20,000, plus any unexpended balance carried forward from previous years.

It may be noted that the Tariff Board’s recommendations of 1925 have been departed from in two respects. The first departure is in regard to the duration of the bounty. The Tariff Board recommended three years, whereas the bill provides for a term of five years. In the second place, the Tariff Board recommended a reduction in the bounty of 10s. per head when the output of any manufacturer reached between 2,001 and 4,000 machines per annum, and a further reduction of 10s. per head when the annual output exceeded 4,000 machines. The Government has decided, however, to pay the full rate of bounty for five years, without any sliding-scale reductions. When the Tariff Board made its recommendations a factory was in actual operation in Australia. It had a regular staff, and was ready to start immediately on a campaign of quick expansion, so that it might reasonably have been expected to reach such a position in three years that the imposition of the deferred duties would then have been the best course to pursue. At present, however, there is no Australian company making sewing machine heads, and the projected companies at Sydney and Bendigo will have to start de novo, and meet the usual difficulties of any new project. Moreover, the Government is of opinion, after carefully investigating the effect of production on overhead costs, that the reduction of 10s. per head recommended by the Tariff Board for an output of between 2,001 and 4,000 machines per annum, was not justified by the actual trading results of the old Bendigo company. An output of 4,000 machines per annum represents only 80 a week, which is a mere bagatelle compared with the Australian demand of 800 per week. Moreover, it was found in 1925 that an output of only 80 machines a week, or 4,000 per annum, would represent, for the first two or three years at any rate, a total cost of production - direct costs of labour and materials, plus overhead and selling expenses - which would require the full measure of assistance proposed by the Government.

In any case, the interests of the Commonwealth are protected by other clauses in the bill. Should experience provethat the bounty of £2, plus the duties of 10s. British and 20s. foreign, are too high at the stage when local manufacturers have ‘obtained a large share of the Australian market,’ and will thus have experienced lower overhead costs, then the net profits, together with the bounty, would obviously exceed the limit of 10 per cent, mentioned in clause 11. In that event, so much of the bounty as may cause the net profits to exceed 10 per cent, would be withheld from, or refunded by, the manufacturer.

The Government is also of the opinion that any provision for lower rates of bounty would cramp the industry at the very time it would need capital and resources to develop along sound technical lines, and to meet the’ intense competition that may be expected from the wellentrenched vested importing interests.

Finally, the investigations that have been made indicate that the Government’s policy will result in the public obtaining good sewing machines at less than the present average selling prices. The original Bendigo machine was usually retailed at £15 for cash, and sometimes less, whereas nearly 70 per cent, of the imported machines sold in Australia are priced at £19 4s. for cash, and £24 on terms. Both the Sydney and Bendigo interests have undertaken to sell their complete machines at substantially less than £19 4s. for cash, or £24 on terms, and the Government is of opinion, after examining all the facts, that these undertakings can undoubtedly be carried out. It is not believed that the additional duties on imported sewing machine heads will be generally passed on to the public, as the difference between the landed cost and the selling price of most sewing machines is extremely large, sometimes as much a; 120 per cent. - and affords an ample margin for the trade to bear these slight increases in the duty. Furthermore, importers are not likely to increase their selling prices in the presence of competition from Australian machines which will be appreciably cheaper than 70 per cent, of the imported machines. Although, in respect of the 30 per cent, of imported machines, which are now retailed at from £14 to £17 cash, importers may ‘find it necessary to pass on the import duties mentioned - and this will not be general - it is to ,be remembered, first, that the increase will l>e only an average nf 5 per cent, on such machines and, secondly, that the added price of 10s. British or 20s. foreign* is paid only once by each purchaser, seeing that each householder who buys a sewing machine finds it sufficient for a lifetime. Further, any extra cost which may be passed on to the public will be spread over the life of each machine and, therefore, will represent an increase so small that it could scarcely be calculated in the cost of the hundreds of articles made on the machine.

The Government believes that this bill deserves the favorable consideration of the Senate. Not only will it help to stem the flow of imports and create more employment in Australia, but the reestablishment of the factory at Bendigo will tend towards the decentralization of industries, and so provide a means of livelihood for young men in the country who would otherwise have to leave their homes to secure employment.

The bill is another attempt to foster an Australian industry and it should, therefore, have the support of those honorable senators who desire to build up industries in this country. The more self-contained we can make this country the better it will be for all of us. With the growth of our population an industry of this character will naturally expand. Australia now spends between £330,000 and £350,000 per annum in the purchase of sewing machines. That money should be kept in this country.

Until recently I did not know a great deal about sewing machines, but the other day I had occasion to buy one for a member of my family. I bought an Australian machine at a cost of £25. The cabinetwork is somewhat elaborate, which perhaps accounts for its comparatively high cost, but having had previous experience in my family of an Australian-made machine, I felt that I could not do better than buy another. If all Australians would buy Australian sewing machines the industry, which this bill seeks to stimulate, would expand. I commend the bill to the sympathetic consideration of honorable senators.

Senator Sir GEORGE PEARCE (Western Australia) [3.40].: - Towards the end of his eloquent speech the Minister told us that he had recently bought an Aus tralian-made sewing machine for £25. At an early stage of his speech I had visions of sewing machines being much cheaper as a result of the passing of this measure. I imagined that the local factories which would be established with the aid of this bounty, and an additional duty on imported machines, would, before long, turn out sewing machines at a greatly reduced price. Evidently the Minister himself did not believe that that would be the case, or he would have waited another twelve months before buying another machine, and have saved £10.

Senator Barnes:

– And in the meantime my girl might have starved.

Senator Sir GEORGE PEARCE:

– I more than suspect that the honorable senator bought that sewing machine because he knew that this bill was about to be introduced, and that after its passage through Parliament his chance of getting a machine for even £25 would be much less. I can imagine that when Cabinet decided to introduce a bill providing for a bounty on sewing machine heads produced in Australia the honorable senator decided to purchase a new machine without delay.

We must not lose sight of the fact that this bounty is to be accompanied by a duty of at least 10s. on each imported sewing machine. Already this Government has placed some tall propositions before us in the way of bounties, but surely this bill is the limit. It is the “hottest” proposition that the Government has yet fathered. Some of the statements made here to-day have a familiar ring about them. I shall analyse them later.

Senator Dunn:

– Pitcairn Island is not far away.

Senator Sir GEORGE PEARCE:

– . I can understand Senator Dunn’s mind wandering to-day; but I do not know why it should wander in the direction of Pitcairn Island. The machines which it is proposed to tax in this way are found in great numbers in the homes of the workers of this country. Many a woman left to battle for herself buys a sewing machine and takes in sewing work of various kinds. The sewing machine she buys represents the capital invested in her business. That capital the Government now proposes to tax. For the benefit of some company not yet formed we are asked to tax the households of Australia which require sewing machines. When I heard of this proposal, and recognized its extraordinary character, my mind went back to my school days when I learned “The Song of the Shirt”. I wondered whether the Government intended to bring back those terrible times when the women of another century had to earn their living by the use of the needle. While we all hope that that day has passed for ever, it might be well if we were to recall to our mind the poem of Thomas Hood, to which I have referred -

With fingers weary and worn,

With eyelids heavy and red,

A woman sat, in unwomanly rags,

Plying her needle and thread;

Stitch! stitch! stitch!

In poverty, hunger, and dirt,

And still with a voice of dolorous pitch

She sang the “ Song of the Shirt.” ‘ “ Work ! work ! work !

While the cock is crowing aloof!

And work - work - work,

Till the stars shine through the roof!

It’s Oh! to be a slave.

Along with the barbarous Turk,

Where woman has never a soul to save,

If this is Christian work! “ Work - work - work !

Till the brain begins to swim;

Work - work - work,

Till the eyes are heavy and dim!

Seam, and gusset, and band,

Band, and gusset, and seam,

Till over the buttons I fall asleep,

And sew them on in a dream!”

We have emerged from that barbarous period into a more Christian-like age, but still there are thousands of women who have to earn their living by the use of sewing machines, and, therefore, in order to bring Tom Hood’s poem up to date and apply it to thisbounty bill, we have to add an additional verse somewhat on these lines -

Work, work, work,

My labour never flags;

And what of my wage?

A part of it goes

To pay for the sewing machine.

And now from my scanty store

Tis the Labour Government’s scheme,

To add ten shillings more

To the cost of my sewing machine.

There are some peculiar features about this bill into which I should like to probe. [ am particularly interested in this industry, because some years ago, when the late Mr. Pratten was Minister for Trade and Customs, I happened to be in Bendigo, Victoria, when he paid a visit to the sewing machine factory then in existence in that city. He invited me to accompany him on his inspection of the factory. When we went through the establishment we were told all sorts of glowing stories as to what was going to happen if only those who were then engaged in manufacturing sewing machines could get a duty and a bounty. No one ever doubted the enthusiasm for, and belief in, the efficacy of protective duties or bounties that Mr. Pratten had. But he could not swallow all the stories we were told that day, and I remember his scepticism as to sewing machine manufacturing ever becoming, in this generation, at any rate, an industry that would be worth while Australia taking up. One of the faults and follies of our protective system is that we are trying to do everything in Australia. It seems to me, looking back over the past, that if we had concentrated on some of the main lines-iron and steel, timber, leather, and such like industries - giving them ample protection, and leaving out a number of little tiddly-winking industries, Australia would have been far better off to-day. Instead of following that policy, we seem to have concluded that Australia could produce anything and everything, and to have set about doing it by means of bounties and protective duties. There is not in existence to-day any company which is engaged in the manufacture of sewing machines. The company which regaled Mr. Pratten and myself with so many wonderful stories went out of existence, as it was bound to do, because it had started in an artificial industry. It was endeavouring, without a proper plant, and without sufficient capital, to compete in producing a line that cannot be produced successfully except by mass production methods. Sewing machines are produced all the world over by mass production methods. With this bounty and duty, it is proposed to set up a little tinpot industry to turn out two or three thousand sewing machines a year in competition with countries that turn them out by the million. If the bounty were double the amount proposed in the bill, and the duty twice as high as that which is proposed, the manufacturer of sewing machines could not succeed in Australia. If any country is to make sewing machines successfully it must have a big home market, and the machines must be turned out in enormous numbers by mass production methods. Australia has not reached that stage yet, and, as a consequence, to expect ‘ to establish the manufacture of sewing machines in Australia i3 like expecting an infant to compete with a giant. It cannot be done. 1 suggest that wc should leave this industry, along with a number of others, until we have a larger home market in Australia, which will permit of their being carried on by mass production methods. At any rate, that will be the only chance of successfully establishing the manufacture of sewing machines in Australia. Australia’s attempt to do everything at once, and at an enormous cost, must end in failure. There is no company in existence engaged in the manufacture of sewing machines. Mention has been made of Bendigo, but why should Bendigo be chosen for the manufacture of sewing machines? It is an industry that largely depends on iron and steel. No iron or steel is produced at Bendigo. There is no coal there. The electric power from Yallourn is certainly available at Bendigo, but iron or steel are not produced Anywhere near Bendigo. If, therefore, a factory for the manufacture of serving machine heads is established at Bendigo, all the iron and steel will have to be conveyed from Newcastle by steamer and railways. The freight cm the water and on the rail, which will have to be paid, will make the raw material exceedingly costly. Prom the frequent repetition of the word “ Bendigo “ it would seem to be claimed that Bendigo is the only place in the Common.wealth where these machines can be successfully manufactured. But to my mind if the industry is ever to be successfully established in Australia, it must be located somewhere where it will have a chance of succeeding. It certainly cannot succeed at Bendigo. I could understand a factory being established in a district producing iron and steel, but I cannot for the life of me see why Bendigo should be selected any more than Goulburn or Canberra. We might as well try to pro-

Senator Sir George Pearce. duce sewing machines in Canberra as in Bendigo. The proposition looks too much like a company-promoting scheme. All sorts of things are to be done. Certain gentlemen are to guarantee that certain capital will be raised. I do not like that kind of thing, nor do I like Parliament being asked to lend itself to company-promoting of this character. If all the things can be done which it is said can be done, why are they not done ? If for £15 15s. we can produce a sewing machine equal to any produced outside Australia, there is no need for a duty or a bounty. Our machines could be sold in competition with overseas machines, because on the Minister’s own statement the latter cost £19 4s. for cash and £25 on time payment. If the local machine could sell for £4 less than the imported machine, the margin should be sufficient to enable thousands of them to be sold, particularly if they are, as the Minister says, equal, if not superior, to the imported machine. I do not know why the Minister paid £25 for his machine. He has told us that it is Australian-made, but the vendors must have seen him coming when he went to buy it. Some very peculiar statements have been read out by him. One is that 1,000 workers will be employed in the industry. It sounds like one of Mr. Forde’s prophecies. A little while ago Mr. Forde told us that there would be an increase of employment in the Commonwealth as the result of the new tariff duties. First of all, he started off with the prophecy that the new duties would give employment to 30,000 additional hands. A few weeks later, although in the meantime unemployment seemed to be growing, he said that the duties would give employment to an additional 60,000 hands. Still later on, when fresh schedules were brought down, he said that the additional employment afforded would be 100,000 hands. But about that time figures were made available by the Statistician, showing that while the tariff schedules were being imposed the rate of employment had increased from 12 per cent, to 14 per cent., and in the last quarter to no less than 18 per cent. I have, therefore, to take with a grain of salt the prophecy that 1,000 men will find employment as the result of this bounty bill. If the Minister believes in what he says, let him read again the statement he attributed to Mr. MacDougall. I do not know whether Mr. MacDougall is the gentleman who topped the score; but apparently he seems to know something about sewing machines. He says that, if this bounty is given and a duty is imposed, he will employ 50 men immediately - there is a big difference between 50 and 1,000 - but that, of course, it will take him a little time to get going. “With the caution that i3 characteristic of his race, Mr. MacDougall therefore declares that within three months he will have 100 men employed, and that, when the factory is in full going order, 200 men will be employed. We may be gullible; but I do not think we are quite so gullible as to swallow a proposition like this. In order to get something to guide the Senate, I read the report of the Tariff Board on the application for a bounty. I find that it is dated 1925. Apparently it is the latest report by the board on the subject, and it is a very skimpy one at that; but there are one or two things in. it which I shall read. One is -

The price at which the locally-made machines are sold is £15 15s. net cash, whereas some similar imported machines are sold as low as £12 10s. Some of the imported machines ure sold at higher prices than the locally-made machines. For instance, the “ Singer “ machine is sold on extended terms for £24 4s., and for cash at £1.9 4s. Whereas imported machines can be landed in any State at the same prices, locally-made machines have of necessity to pay freight to the different States.

The last few words interest me as a representative of Western Australia. This proposition means that Western. Australians who want sewing machines are to be mulcted in a duty at least 10s. each on imported machines, or if, in their patriotism, or because the duty has been increased, they buy local machines at £15 15s. at Bendigo, or possibly Sydney, they are to be called upon to pay steamer freight at the rates charged by the local shipping companies, which are higher than those charged on similar goods imported from New York, and possibly rail freight. The Minister expects that the duty will yield £25,000, and that the amount of bounty he will pay is £20,000. As he pointed out, the duty will pay for the bounty. Incidentally, the Government will make a little side profit of £5,000 on the transaction.

That is a splendid proposition from the point of view of Mr. MacDougall and the company, but it is not a very cheering prospect for the Western Australian constituencies, who will have to find their share of the £25,000, per annum, plus heavy freight on machines manufactured in the Eastern States. It certainly does not raise any enthusiasm in my breast-

Senator Daly:

– The constituents of Bendigo have not made any outcry about the fact that they have to bear their proportion of the £780,000 interest that has to be paid under the £34,000,000 migration agreement which greatly benefits Western Australia. All the benefits are not on the side of the eastern States.

Senator Sir GEORGE PEARCE This proposal is decidedly one-sided and 1 cannot see that any benefit will accrue to my constituents from it. They will merely be told to “ pay up and shut up “.

Senator Daly:

– Surely the constituents of Bendigo are entitled to say something about the interest they have to meet under the £34,000,000 agreement.

Senator Sir GEORGE PEARCE.Bendigo enjoys the benefit of the whole of the protective policy of the Commonwealth which my constituents do not.

Senator Barnes:

– These machines will be supplied all over Australia at » uniform rate.

Senator Sir GEORGE PEARCE:

– The report of the Tariff Board states, “Whereas imported machines can be lauded in any State at the same prices, locally-made machines have of necessity to pay freight to the different States.”

Senator BARNES:

– I understand that the Government has received an undertaking that a uniform price will apply throughout Australia.

Senator Sir GEORGE PEARCE:

– How can these people vouch for companies that have not yet been formed? That is merely propaganda from the prospectus of a sewing machine company. The honorable senator was wise in buying his sewing machine before the Australian companies were established. The report of the Tariff Board also says -

The present nominal capital of the Bendigo Sewing Machine Company Limited, as disclosed by its latest balance-sheet, is £50,000 divided into 5,000 shares of £10 each; of this, amount about £1,400 has actually been paid out. it must be recollected that the Tariff Board made those comments and recommendations in . 1925, when the Commonwealth was enjoying a period of great prosperity. Notwithstanding those prosperous times, the hoard recommended that the following scale of bounties should, be granted : -

At this time of bitter adversity and tremendous taxation, when there has been an enormous falling off in our industry, a general depression and unemployment, with credit unobtainable and finance disorganized, this Government, with unparalleled generosity declares, “We shall give a bounty of £2 on each machine manufactured in Australia, and impose a duty of 10s. on each British, and £1 on each foreign machine imported”. I am against the bill, root and branch. It is premature, unjustified, and unsound. The speech of the Minister read like a company promoter’s prospectus. It was full of vague generalities and promises, and parts of it were inconsistent with the remainder. Sections of it’ appeared, to me to have been framed by that very competent investigator employed in the Department of Trade and Customs, whose phraseology I recognize, and others, apparently, are culled from a prospectus of the sewing machine company. No attempt was made to reconcile the two. It is claimed that the establishment of the industry would lead to the employment of thousands within a short time. Mr. MacDougall claimed that 200 would be employed if the bounty were granted ! I hope that the Senate will reject the bill. I speak very seriously when I say that this is not a time when we should carelessly throw money away on a minor industry such as this. There is no immediate demand for its establishment, and the acceptance of the measure would increase the prices of sewing machines, an essential article in every middle-class home. Thousands economize by using a sewing machine to make garments, instead of buying them ready made, and so assist to keep down the high cost of living. We do not desire to add a single penny to the cost of such a necessity. For that reason I shall vote against the bill.

Debate (on. motion by Senator Dunn) adjourned.

page 4834

FLAX AND LINSEED BOUNTIES BILL

Secondreading.

Senator BARNES:
Assistant Minister · Victoria · ALP

– I move -

That the bill be now read a second time.

The measure provides for bounties to be paid for five years, from the 1st March, 1930, on flax and linseed produced in Australia from flax plants of the genus Linum usitatissimum. The rates of bounty are the following percentages’ of the net cash selling value, exclusive of casing and packing, of flax or linseed at the time and place of delivery from the factory - 15 per cent. from 1st March, 1930, to 29th February, 1932. 10 per cent. from 1st March, 1932, to 28th February, 1934. 7½ percent. from 1st March, 1934, to 28th February, 1935.

These are the rates recommended by the Tariff Board in its report of the 3rd March, 1928. The bounties will be paid to the manufacturers of the flax or linseed, provided (a) he complies with the act and all regulations thereunder; (b) he pays reasonable prices, as approved by the Minister, for flax plants purchased from the growers for the purpose of manufacturing flax or linseed ; (c) that the flax or linseed is of good and merchantable quality; (d) that the selling prices of the flax and linseed are reasonable; (e) that the net profits of the manufacturer, including the bounty, do not exceed 10 per cent.; and (f) that award or reasonable wages and conditions of employment are observed by the manufacturer and by the grower of the flax plants from which the flax and linseed subject to bounty are produced.

As honorable members are aware, the flax plant produces both flax fibre and linseed. In some countries, especially the Argentine and India, certain varieties of the flax plant are grown mainly for the production of linseed. In other countries it is found more payable to grow varieties of flax plants that will give better financial results in the production of flax fibre and linseed conjointly. That is the experience in Australia. Sowing is usually carried out in spring-time ; but in Australia it may also be done early in autumn. Harvesting usually takes place in January or February. The flax plant is commercially (cultivated in Russia, which, before the war, produced well over half the world’s supply, the Baltic Provinces, India, Argentine, Ireland, and several other countries.

In Kew Zealand, a so-called flax, phormium tenax, is produced. This is really a hemp, and is much coarser than Linum usitatissimum, which is grown in Australia chiefly for the seed, and also, to a slight extent, for a rough cordage. Manufactured flax goods, as well as linseed and linseed oil, are imported into Australia from the United Kingdom, Ireland, India, United States of America, Argentine, and phormium tenax is imported from New Zealand.

The following products are the most important of those which are manufactured in other countries from flax fibres: - Linen thread for tailors’ and bootmakers’ use; thread for embroidery; twine for harness-mounting; lines and nets for fishermen ; and all kinds of cords and ropes. In the manufacture of woven fabrics, flax, when prepared and spun into yarns, is the essential fabric of lawns, cambrics, handkerchiefs, canvases, pillow-cases, sheets, linens, aprons, shirtings, collars, surgical bandages, hollands, crashes, and similar materials.

In deciding upon the introduction of this bill, the Government was impressed by the opinions of the Tariff Board that the industry is well worth establishing in Australia. On the 18th January, 1929, the board stated -

If the future establishment and success of the industry be achieved, even at a maximum bounty cost of £30,000 per annum, the cost would be small in comparison with the result obtained.

The Development and Migration Commission was also impressed with the importance of the industry, and in his report of the 13th February, 1920, the chairman of that body stated - “ A consideration of the Australian requirements for linen goods, linseed oil, and linseed meal or cake, however indicates that the industry is of considerable economic importance. It is questionable whether this industry will be able to overcome the initial stages of development without some active Commonwealth and State assistance in the form of bonuses, or organizing and educational propaganda.”

In its report of the 3rd October, 1929, the Tariff Board referred to the excessive importations of flax products and all other goods that might possibly be manufactured in whole or in part with flax as the raw material. The latest figures with regard to these importations are as follow : -

The first four items, totalling £551,670 for 1928-29, are entirely flax products. As regards canvas and duck imports amounting to £689,991 in 1928-29, the Tariff Board estimates that flax is a raw material for one-third of these goods, namely £229,997 worth. A large proportion of linen piece goods, twines other than cotton, nets and nettings, cordage and rope, is also made from flax. Taking the flax proportion of these at the low amount of one-half, this would mean another £206,018. Therefore, in 1928-29 it is estimated that £987,685, or approximately £1,000,000, worth of flax products was imported into Australia.

These figures show that if flax-growing and manufacturing industries can he established in Australia, they will be of immense benefit from the points of view of land settlement, employment, and the reduction of the amount of money now being sent from Australia to pay for imported goods.

The Tariff Board has estimated that 150,000 acres of flax plants would require to be cultivated each year to provide the 23,000 tons of linseed now processed in Australia by manufacturers of linseed oil, linseed meal, oil cake, &c. Flaxgrowing is best carried on as a three-year rotation crop. Therefore, under ideal conditions, 450,000 acres of suitable flax country is necessary, and the 300,000 acres not required for flax in any given year could be used for other crops. The estimated areas of suitable land for flaxgrowing are -

The figures for Victoria and South Australia are official. The Tasmanian estimate has been made by a flax manufacturer, and is confirmed by Colonel Bell, M.P. and others.

The industry in Australia has been carried on in a somewhat desultory fashion in Victoria and Tasmania, but mainly in Victoria, for over 30 years. In 1907, the Commonwealth granted a bounty of 10 per cent, of the value of flax fibre and linseed, but the results were very meagre, only £2,376 being paid up to 1917 when the act ceased to operate. From 1918 to 1922, the Commonwealth guaranteed flax-growers from £5 to £6 pelton, and the area under cultivation increased to 1,640 acres. This was essentially a war policy and, as such, had no assurance of continuity. Money was lost by the Government under the guarantee, and, after its withdrawal, the industry declined a good deal. .

The failure between 1918 and 1922 seems to have been due to the much higher prices for other farm products then being received by farmers, which made the return from flax comparatively unattractive to growers. Moreover, there was insufficient pure seed available to meet the suddenly increased demand at that time, and in consequence the yield of flax plants per acre was abnormally low. During the last four years, however, further attempts have been made to revive the indusry, which is now organized on a much better basis than at any previous period. Moreover, other farm products have diminished in value. Flax plants at £5 per ton are generally recognized as being a payable crop, and quite attractive compared with other productions at current values. The principal manufacturers of flax fibre and linseed include the Flax Corporation of Australia Limited, Launceston, Tasmania, Flax Proprietary Limited, Drysdale, Victoria; and the Linen Flax Products Company, Colac, Victoria. Several other manufacturers are operating, chiefly in Gippsland, Victoria. In Tasmania the area under cultivation increased from eight acres in 1926 to 87 acres in 1927, to 125 acres in 1928, and to 1,181 acres in 1929. If the bill is passed, 3,000 acres will be cultivated for flax this year. In Victoria the area has increased from 200 acres in 1926 to approximately 2,200 acres this year.

Experts have advised that the soil and climate in Victoria, South Australia, Western Australia and Tasmania are ideal, in extensive areas, for the growth of flax. All the farmer witnesses and several flax experts who appeared before the Tariff Board, expressed the opinion that, if the farmer received £5 a ton for his plants, the growing of flax, under present conditions, should be very attractive. This view appears to be sup- ported by the steady increase in production during the last four years.

The bill provides under clause 9 that the Minister may withhold the whole or any part of the bounty if he finds that the manufacturer has paid less than a reasonable price to the farmers for flax plants. This is similar to a provision, in the “Wine Export Bounty Act, which has operated successfully with regard to the growing of grapes. Flax-growers are, therefore, assured of assistance and protection. The chief difficulties now operating against a large expansion of the industry, and justifying the introduction of the bill, are the lack of any assurance that the payable price of £5 per ton will continue for a reasonable term of years, and the uncertainty as to the future, which prevents manufacturers from raising capital for the installation of the most improved machinery. Factories that have been operating during the last four years have been turning out and disposing of high quality products, but either without profit or at a loss, owing to the entire absence of assistance by way of bounty or customs duties, and owing also to sufficient supplies of raw material not being available to permit of economically-large outputs in each factory. If farmers can be assured of reasonable prices for flax plants for five years, as they will under the bill, it is believed they will grow enough flax to enable the factories to operate successfully and far more efficiently than under present conditions. Once the industry is widely established, and the farmers and millers have learned the best methods of production and marketing, it is not likely to lose its standing.

The Tariff Board and officers ~oi the Trade and Customs Department are of opinion that the flax industry is well deserving of reasonable assistance for a developmental period of five years, with the view to giving those engaged in it an opportunity to demonstrate whether it can be permanently established on a large scale. The Government believes that the bill will achieve this result, and that after bounty payments cease five years hence, the industry will be able to carry on, as the manufacturers declare, without special assistance.

The announcement in March, 1930, that the Government intended to intro duce a bill, providing for bounties on flax and linseed has already produced evidence of the benefits of the proposal. In the Melbourne Argus of the 25 th March, 1930, the managing director of the Linen Flax Products Company, a new company operating in the Colac district of Victoria, announced that a minimum of 1,000 acres would be set aside in the coming season for flax-growing, and that much enthausiasm was being shown by the farmers. He added that 45 men would bc employed at the Colac mill, and that their wages bill for the year would be about £10,000. He also stated that his company proposed to establish a chain of mills in the Colac district with subsidiary mills at outlying centres. Since then, a project has been launched by the Tasmanian company for starting flax-growing and a factory at Port Fairy, Victoria. At the present time the industry in Australia gives employment to the following persons : -

With regard to the potential market in Australia for flax products of approximately £1,000,000 per annum, to which I have already referred, it may interest honorable senators to know that, if 80 per cent, of the flax products required could be grown in Australia the industry then would give employment to the following persons : -

When the industry expands to a sufficient extent, it is the intention of some of the present manufacturers to engage in the production of canvas, duck, and linen piece goods, and to endeavour to sell a good deal more flax for the production of cordage, twine, netting, &<;., than a.i present. It is important to note that an Australian market already exists foi 23,000 tons of linseed per annum, all of which is now imported for the purpose of making linseed oil, linseed meal, oil cake, &c. If this quantity of linseed were produced from locally-grown flax plants, there would also be produced about 25,000 tons of flax fibre which is substantially more than Australia now uses in making cordage, twines and rope. However, the experts engaged in the flax industry consider that a large demand can be created in Australia for flax fibre for various manufacturing purposes, namely, canvas, duck, fishing nets, and linen, and that any surplus over local requirements could be profitably exported to other countries when the industry eventually becomes well established; When that happens, local costs of production will have been reduced by the adoption of better machinery and methods, and lower overhead costs will be the natural result of large-scale production.

It should be noted that flax is not a one-sided industry. Its value lies in the fact that it will create new wealth and employment in both primary and secondary industries, and will help to place more settlers upon the land. A further advantage is that flax is especially suitable for production in Tasmania and so should help that State, which is generally recognized to be in a weak financial position. This would tend to modify the present necessity for the younger generation of Tasmanians to depart for the mainland in order to secure employment. Without the proposed bounty the industry has neither stability nor elbow-room, nor is there a sufficient inducement to launch upon a programme of large expansion. With the bounty it is believed there will be rapid expansion, which should conduce greatly to lower costs of production and distribution, and so render the bounty unnecessary after -a few years. For this reason, the bill provides bounties on a diminishing scale ranging from 15 per cent, to 10 per cent, and finally 7£ per cent, of the net Australian market value. The manufacturers concerned have accepted these reducing rates. I desire also to emphasize that even the highest rate of bounty, namely 15 per cent., is quite a small measure of assistance. It is much less than the ad valorem equivalent of many other bounties, and of many customs duties. At the present time, the net Australian market values are approximately: flax, high grade, £75 per ton; flax, low grade, £50 per ton ; linseed, average,_ £20 per ton.

The production for 1930 is estimated at from 400 to 500 tons of flax, and from 380 to 450 tons of linseed. In this regard, the Tariff Board originally recommended that no bounty should be paid until the annual production of flax was worth £20,000, and that of linseed £70,000. On 18th January, 1929, however, the Tariff Board advised that minimum quantities of 250 tons of flax and 4,000 tons of linseed should he stipulated. After the most careful consideration, the Government decided that the existence of a hard and fast condition with respect to minimum production would militate against the development of this industry. If producers could not get any encouragement or assistance until their linseed production reached the high total of 4,000 tons per annum, it seems certain that this factor, together with past disappointments, would entirely preclude the expansion of the industry. Further, the Tariff Board overlooked the practical point that a given quantity of flax crop produces approximately equal quantities of flax fibre and linseed. Therefore, its proposed stipulation of a minimum of 250 tons of flax and 4,000 tons of linseed was not consistent. It meant that producers would qualify for. the flax bounty for years before they could obtain bounty on similar quantities of linseed being produced simultaneously.

The Government has, therefore, decided that it is in the best interests of the industry not to impose restrictions as to’ quantity, especially as inquiries have shown that the minimum production of 250 tons of flax will be considerably exceeded for 1930 - 400 to 500 tons is estimated - and that production will be appreciably greater in the following years. On the basis of a 1930 production of 500 tons of flax and 450 tons of linseed, the bounty payments for 1930 will be about £8,000. Allowing for reasonable increases in production in subsequent years, it is estimated that the following amounts of bounty will be paid under this bill.– 1930, £8,000; 1931, £15,000; 1932, £13,000; 1933, £15,000; 1934, £15,000; or a total of £66,000. The total appropriation is £20,000 per annum, or £100,000 for the five years, as recommended by the Tariff Board. This leaves a margin of £34,000 to cover a larger expansion in the industry than that fore- cast in the foregoing estimates. As already stated, the farmer will be protected by being assured of a reasonable price for his flax plants. The bill also gives protection to consumers of flax and linseed, and to employees. Honorable senators will see that, under clause 12, the Minister may withhold the whole or part of the bounty, or obtain refunds of bounty already paid, if the claimant does not sell his flax or linseed at a reasonable price. Under clause 13 the net profits of claimants are limited to 10 per cent., and the Minister may withhold the payment of any bounty, or obtain refunds of bounty already paid, should the claimant earn more than 10 per cent. net profit.

Clause 14 provides that the Minister may withhold the whole or any part of the bounty if he finds that the conditions of employment or rates of wages observed by manufacturers of flax or linseed, or by growers of flax plants, are below declared or standard conditions and rates prescribed by the Commonwealth Court of Conciliation and Arbitration, or by any other industrial authority of the Commonwealth or a State. Clause 14 is similar to industrial clauses recently adopted by the Senate in the Wine Export Bounty and Cotton Industries Bounty Acts. It also provides that Commonwealth authorities to be appointed by the Minister shall not be appointed unless there is no Federal or State award or determination, or registered industrial agreement applying to the industry. Under sub-clause 8, such a Commonwealth authority will be composed of one representative of the employers, one representative of the employees, and a chairman appointed by the Minister on the joint nomination of the representatives of the employers and employees.

In view of the considered opinion of the Tariff Board that, “if the establishment of the flax industry can be achieved even at a maximum bounty cost of £30,000 per annum, the cost would be small in comparison with the result obtained “, I submit the bill in the confident hope that it will meet with the approval of the Senate. There are reasonable expectations, even with the reduced expenditure limit of £20,000 per annum, of establishing an industry of great potential value to Australia.

Debate (on motion by Senator Sir Georgepearce) adjourned.

page 4839

SUPERANNUATION BILL

In committe: Consideration resumed from page 4825.

Clauses 3 to 16 agreed to.

Clause 17 - (1.) After section forty-six of the principal act the following section is inserted: - “46a. Upon the death of a contributor, or of a pensioner who has been a contributor, there shall be payable to his personal representatives from the fund the sum of Five pounds in respect of each unit of pension, and a proportionate part of Five pounds ill respect of a fraction of unit of pension, for which he has contributed :

Provided that in respect of the death of a person who was -

a contributor for limited purposes under section fifty-three of this act; or

an air officer contributing under Part IVa. of this act, the amount payable under this section in respect of each unit of pension for which he was contributing shall be such sum as bears to the sum of Five pounds the same proportion as the benefits for which he was contributing bear to the full benefits provided under this act.”

Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP

– To meet the point raised by the Leader of the Opposition (Senator Pearce) I move -

That the word “air”, paragraph b, proposed new section 46a, be left out.

Originally the words “air force officer” were suggested, but the Air Board and Air Commodore Williams now consider that the word “officer” will be sufficient.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 18-

After section forty-eight of the principal act the following section is inserted in Division 2 of Part IV.:- “ 48a. Where in the opinion of the Board payment of pension or other benefit under this Act should be made to a person other than the pensioner or beneficiary, the Board may, subject to this Act, authorize payment to such person accordingly.”

Senator DALY:
SOUTH AUSTRALIA · ALP

– I move -

That after the word “ pension “, proposed new section 48a, the words “refund of contributions “ be inserted.

This amendment is desired in order to make it quite clear that the section applies in the case of refunds of contributions.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 19 and 20 agreed to.

Clause 21-

Section 52 of the principal act is amended

Amendment (by Senator Daly) agreed to -

That the following paragraph be added: - “ ; and (d) by omitting from sub-section 5 the words ‘ prior to the commencement of this sub-section.’ “

Clause also consequentially amended and, as amended, agreed to.

Clauses 22 to 25 agreed to.

Clause 26 negatived.

Amendments (by Senator Daly) agreed to -

That the following new clauses be in- serted: - “25a. Part IVa. of the principal act is amended -

by omitting the words ‘ air officer ‘ (wherever occurring) and inserting in their stead the word officer ‘ ; and

by omitting the words ‘air officers’ (wherever occurring) and inserting in their stead the word ‘ officers ‘.” “20. Section sixty a of the principal act isamended -

by omitting the definition of ‘air officer ‘ and inserting in its stead the following definition : - “ officer “ means a commissioned officer of the Permanent Air Force;” and

by omitting from the definition of ‘ employee ‘ the words Royal Australian Air Force ‘ and inserting in their stead the words ‘ Permanent Air Force, but docs not include any warrant or non-commissioned officer holding an honorary commission ‘.”

Clauses 27 and 28 agreed to.

Clauses 29 and 30 consequentially amended and, as amended, agreed to.

Clauses 31 to 34 agreed to.

Title agreed to.

Bill reported with amendments.

Standing and Sessional Orders suspended.

Motion (by Senator Daly) proposed -

That the report,be adopted.

Amendment (by Senator McLachlan) agreed to -

That the bill be recommitted for the reconsideration of clause 30.

In committee (Recommittal) :

Clause 30 further consequentially amended and, as amended, agreed to.

Bill reported with a further amendment.

page 4840

POST AND TELEGRAPH RATES BILL

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

Senate adjourned at 6.3 p.m.

Cite as: Australia, Senate, Debates, 29 July 1930, viewed 22 October 2017, <http://historichansard.net/senate/1930/19300729_senate_12_126/>.

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