13th Parliament · 1st Session
The President (Senator the Hon. P. J.Lynch) took the chair at 3 p.m., and read prayers.
Senator Sir HARRY LAWSON.On the 25th July, Senator Barnes asked the following questions, upon notice: -
How many branches of the Commonwealth Savings Bank are there in each State?
How many branches of the general Commonwealth Bank are there in each State?
The Commonwealth Bank has furnished the following information relative to its branches and agencies:-
In addition to the above, there are 3,682 agencies of the Commonwealth Savings Bank of Australia throughout the Commonwealth and Territories of Papua and New Guinea and in the Solomon Islands.
On the 25th July, Senator Barnes asked the following questions, upon notice: -
How many Commonwealth loans bars teen floated since 1924, including that year?
What was the amount of each loan?
What was the percentage cost of floating each loan ? 4.Is the difference between the face value of a bond and the price at which it is put upon the market consideredas part of the cost of flotation?
The answers to questions Nos. 1, 2 and 4 were given on the 25th July. The following is the information desired by the honorable senator in reply to question No. 3:-
Senator McLACHLAN presented re ports and recommendations from the Tariff Board on the following subjects: -
Cotton Piece Goods; and Blue denims, drills, dungarees, and these types of cloths in the grey.
Minister representing the Minister for Commerce, upon notice -
Senator Sir HARRY LAWSON.The Minister for Commerce has supplied the following answers: -
Arrangements for Tour in Western Australia.
asked the Minister representing the Prime Minister, upon notice -
– The right honorable the Prime Minister has supplied the following answers: -
asked the Minister representing the Prime Minister, upon notice -
– The right honorable the Prime Minister has supplied the following answers: -
asked the Minister representing the Minister for Commerce, upon notice -
– The Minister for Commerce has supplied the following answers: -
Special Customs Duties
asked the Minister representing the Minister for Trade and Customs,upon notice - 1.Isit intended to give any relief under the budget in regard to the special (surcharge) duties on sporting goods under tariff items No. 310a (British 30 per cent, general50 per cent.), and 310b (British 30 per cent., general 60 per cent.) ?
– The Minister for Trade and Customs has supplied the following answers: -
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motion by Senator Sir Harry Lawson) read a first time.
Bill received from the House of Representatives.
Standing and Sessional Orderssuspended.
[3.14].- I move-
That the hill be now read a second time.
This is a short measure to amendthe Commonwealth Public Service Act is respect of salary payments in lieu of furlough, and also in respect of the appointment of returned soldiers to the Public Service. The first amendment relates to the salary rate upon which payment in lieu of furlough is to be calculated upon the retirement of an officer, or upon which the amount to he paid to his dependants on his death is to be ascertained. At present the different rates of salary received by the officer during a period immediately preceding his death must be taken into account. For example, an officer who retires after 40 years’ service is eligible for payment of salary for twelve months in lieu of furlough, and to ascertain the amount due to him hia varying salaries in the twelve months preceding his retirement must be taken into account. In that period he may have suffered a reduction which has subsequently been wholly or partly restored, and the amount received in lieu of furlough would be less than twelve months’ pay calculated on his salary at the time of retirement. It is considered that there should be a uniform method of payment in these cases, and that it should be based upon the salary the officer receives at retirement or at death.
Tlie other amendment relates to section 84 of the act. Under sub-section 8 of that section, a returned soldier may be appointed vo the Commonwealth Service, although not free from physical defects clue to service in the war, if ho receives a medical certificate showing that he is free from such physical defects as would incapacitate him for the efi cient discharge of the duties of the position to which he is to be appointed.
Case3 have occurred where the medical officer certifies that the returned soldier is at present physically capable of performing the duties of the position, but that the indications arc that his present fitness is unlikely to continue. In such a case, having regard to the likelihood of premature retirement on the ground of invalidity, and the consequent charge upon the superannuation fund, a returned soldier is not appointed. The proposed amendment provides that if the medical practitioner certifies that any physical defect of a returned soldier is likely to prevent continuance of efficient service up to the age of 60 years, he shall not if appointed to the Commonwealth Service, be deemed to be an employee within the meaning, and for the purpose, of the Superannuation Act. This means that returned soldiers will not be debarred from appointment, as nt present, but in view of their disability they will not be eligible to contribute for a civil pension. The amendment is suggested in the interest of returned soldiers of this class, as it will enable them to obtain appointments at present not available to them, and at the same time will safeguard the superannuation fund from the encroachment of invalidity cases which were not con templated when the fund was established.
– Will such officers be paid a pension in lieu of superannuation?
– They will be in receipt of a war pension. For some time the returned soldiers’ organizations have urged that this amendment be made. If it is agreed to, it will enable men now temporarily employed in the Public Service, and who have pasted the necessary examination, to be permanently appointed, which at present cannot bc done. The amendments proposed in the bill are not contentious, and as the session is to terminate shortly, I trust that honorable senators will agree to pass the bill through all its stages without delay.
.- As the proposed amendments appear to be necessary, I offer no objection to the passage of the bill.
– Although honorable senators on this side of the chamber intend to support the bill, certain persons in the Public Service who are not returned soldiers appear to have been treated unjustly. A few weeks ago it was discovered after a man had been occupying a position in the Post and Telegraph Department for two months that he was blind in one eye. No ordinary person could detect the young man’s disability, but after a brief period of service he was dismissed. He is only eighteen or nineteen years of age. Whilst we on this side desire to do what is fair to returned soldiers by agreeing that no obstacle should be put in the way of their earning their living because of incapacity resulting from war injuries, we consider the provision in the Public .Service Act, which caused the dismissal of this young fellow, to be distinctly unfair. He showed in the few weeks of his employment in the Service that he could do his work well, and satisfied the foreman that he was highly capable; yet he was dismissed when it was discovered that, he was blind in one eve, although that defect had existed practically from his birth. This is the hard case of a young recruit in the industrial army, against whom, because he was not born in time to go. to the war, the Public Service Act operates unfairly. I rose merely to point out that members of the industrial army also suffer disabilities.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [3.23]. - The case mentioned by Senator Brown is not relevant to this bill. Partial blindness is in ordinary circumstances a clear disqualification under the Public Service regulations.
– What would have happened if this young man had been a returned soldier?
– In that case he would not have been disqualified. The act was specially amended in the interests of returned soldiers to provide that those who suffered from defects arising out of war injuries could be admitted to the Service, but with the limitation I have already mentioned. This young man, however, not being a returned soldier, was not eligible for admission under these conditions. The regulations provide that to secure admission to the Service, an applicant must possess the sight of both eyes. The reason for that is obvious. It is a wellknown fact that when one loses the sight of one eye, there is a predisposition to lose the sight of the other. Applicants are supposed to divulge any defects of that kind. The bill does not in any way alter the ordinary conditions of entry into the Public Service, but deals only with the two points which I explained earlier.
Question resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate.
Standing and Sessional Orders suspended; report adopted.
Bill read a third time.
In committee: Consideration resumed from the 31st July(vide page 905).
Clause 3 (Definitions).
.- I asked yesterday whether bonus shares declared out of the capitalization of profits of companies, having already paid income tax, were to be classified under this bill as dividends and again made taxable. The definition of “ dividends “ in this measure includes “ the paid-up value of shares distributed by a company to its shareholders to the extent to which the paid-up value represents the capitalization of the whole or any part of the profits to the company”. These profits have, in the past, been taxed at the full rate imposed on dividends, and have been passed to reserve. Will the Minister give the committee the assurance, if he can do so, that those reserves of a company will not again be subjected to taxation if distributed to the shareholders in the form of paid-up shares ?
– Is there any reason why they should not be?
– Yes; they have already paid income tax at the full rate.
[3.30]. - This clause merely contains definitions, but it might be convenient at this stage for me to give the honorable senator the information which I promised last night to obtain for him. The present law taxes bonus shares, except those paid out of specified profits. The effect of the bill, based upon the recommendations of the royal commission, will be a reduction of exemptions in order to place bonus shares, for all practical purposes, on the same footing as cash distributions. The principle of taxing bonus shares is not introduced by this bill ; it has been embodied in the law for many years. The profits so distributed have paid tax in the hands of the company only at the flat rate of tax payable by companies, and the shareholders, when they receive the shares, receive a tax rebate at their own rate of tax or the standard company rate, whichever is the less.
Clause agreed to.
Clause 4 agreed to.
Clause 5 -
Section 14 of the principal act is amended by omitting paragraph (m) of sub-section (1.)
Section proposed to be amended - 14. (1) The following incomes, revenue and funds, shall be exempt from income toco: -
dividends, bonuses or profits, or the face value of bonus shares distributedby a company among its members or shareholders, except as provided under section sixteen of this Act.
SenatorE. B. JOHNSTON (Western Australia) [3.31]. - I move -
That the following new sub-section be inserted: -
Although in my second-reading speech I gave notice of my intention to move this amendment at the request of the Perth Building Society, it would apply also to other building societies which are purely mutual in character, and are regarded as cooperative companies within the meaning of section 20 of the principal act. The Government has shown its sympathy with thrifty people by granting assistance to life insurance companies. The result has been a lowering of interest rates and increased employment throughout the Commonwealth. For the most part building societies consist of persons who are building homes for themselves on a narrow margin of security.
– Does the Perth Building Society pay dividends?
– The only dividends it pays are to its shareholders, who are home builders.
[3.35]. - Having given further consideration to this matter in the light of the telegram from the Perth Building Society, which Senator Johnston read last night, the Government has decided to resist the amendment because it proposes discriminatory treatment in favour of building societies which is not justified. A special property tax is charged on all interest included in the taxable income of any person or company, whether the interest is derived in the course of carrying on a business or not. A large proportion of the special property tax is paid upon interest, and the removal of any considerable portion of interest from the field subject to that tax would seriously affect the revenue. It would not be possible to relieve interest from the tax simply because it is derived in the carrying on of a business, because that would mean that interest received by banks and other financial institutions, upon which a large proportion of the tax is paid, would be exempt. Building societies could not be exempted from this tax without similar consideration being given to other cooperative and mutual assurance societies which are at present liable for the tax and would remain liable even if the amendment were passed. The exemption of all such bodies from the tax would have a serious effect on the revenue. Under the present law, building societies which are co-operative companies receive a substantial benefit, inasmuch as they are entitled to a deduction, in addition to the general deductions under the act, of all interest and dividends distributed to their shareholders. Their taxable income consists, therefore, only of undistributed income, whereas the taxable income of an ordinary company includes both distributed and undistributed income. It is important to note that the royal commission is of the opinion that this proposed concession to co-operative companies is not justified, and on page 147 of its third report the commission recommends its withdrawal from the act. Although this bill does not do that, the position will have to receive serious consideration when matters affecting both the Commonwealth and the States are being discussed by the respective Governments with a view to obtaining uniformity of treatment. The only concession that these societies can expect is the lifting of the special property tax at some future date. TheGovernment could not make a special exemption in favour of building societies without causing serious repercussions throughout Australia.
Clause agreed to.
Clause 6 agreed to.
Clause 7 (Dividends).
– I shall be glad to know if the Minister has a reply to the remarks I made last night.
[3.39]. - The present law will definitely continue to apply toall distributions in cash by a company made prior to the date of assent to the bill, and, in respect of distributions in shares, to those made prior to the 31st December, 1934. The Attorney-General’s Department advises that the present wording , of clause 7 definitely has this effect.
The amendment of the clause, as suggested by Senator Millen, would frustrate that purpose. If paragraph c of subsection £ of proposed new section 16aa were to bc amended to read “before the commencement of this act” the effect would be to refer to the Income Tax Assessment Act 1922-1934, the commencement of which is a date in 1922. The “ commencement of this section “, which, is the present wording, means, however, the date of assent to the bill which introduces it into the law - the present bill. The real position is that the amendments will “ commence “ when assent to the bill is given, and section 17 does no more than state to what financial year they shall, after their “ commencement “, apply. The fears of the honorable senator are obviously based on a misapprehension.
Clause agreed to.
Clauses 8 to 10 agreed to.
Clause 11 (Deductions in case of composite incomes).
.- I move -
That after paragraph (o), proposed new sub-section 23n, the following paragraph be inserted : -
In the case of it building society which is a co-operative company within the meaning of section 20 of this act the deductions shall bo made successively from income which is not exempt from special property tax and from income which is exempt therefrom.
This amendment does not ask for any exemption from taxation. It seeks very little relief, as all it asks is that the tax, which is payable under the act, shall be taken from the income which is subject to the special property tax. It is quite clear, therefore, that the arguments advanced by the Minister in reply to my previous amendment do not apply in this case. I hope, sincerely, that out of its sympathy with bona fide building societies and its desire not unduly to oppress people who are building small homes for themselves, the Government will accept the proposal.
Senator Sir HARRY LAWSON (Victoria - Assistant Minister) [3.44]. - The Government’s objections to this amendment are dictated by the same considerations a-1. I mentioned in opposition to the previous amendment moved by Senator
Johnston. Notwithstanding what the honorable senator has said, his proposed amendment to this clause is also discriminatory in its effect. There is no principle enunciated in the proposed amendment which could “logically be confined to building societies. If the principle were justified in connexion with building societies, it would be equally applicable to all persons and companies, part of whose income is subject to the special property fax. Any such proposal generally applied would seriously affect the revenue, and would greatly add to the complications of assessment. It is to be remembered that the purpose of the bill is to achieve simplification with as little disturbance of the revenue as possible. The acceptance of the principle laid down iu the proposed amendment would seriously disturb tho balance now obtaining in the bill, and would amount to a remission of taxation, which the Government is unable at present to grant. The confining of it to building societies, however, would be productive of many anomalies which would not be justified.
Clause agreed to.
Clause 12 agreed to.
Clause 13 (Division 2, private companies, definitions) .
Senator Sir HARRY LAWSON (Victoria - Assistant Minister) [3.45]. - In regard to this clause Senator Plain made certain representations last night on behalf of the Melbourne Chamber of Commerce, and handed to me the following telegram which he had received front that body : - -Melbourne Chamber of Commerce strongly objects Income Tax Assessment Bill provisions relating private companies for reasons firstly power placed hand’s Commissioner far too wide, secondly the legislation is direct interference with rights conferred under State Companies Act. Considers stringent provisions in bill unjustified and urges that division 2 be withdrawn. Will be grateful if you will place our views before House.
I have ascertained that many representations were made on this matter while the bill was being dealt with in committee in the House of Representatives, and I also understand that Sena tor Grant has an objection to lodge in terms almost identical with those in the telegram I have read. This bill is the outcome of the prolonged and impartial investigation by the Royal Commission ou Taxation. The reports of the commission have been made public for months past, and the recommendations, which are being implemented by the bill, have been considered by a conference of Taxation Commissioners, the Federal Taxation Department, and the Government. The portion of the bill relating to private companies is based entirely upon the recommendations made by the royal commission after consideration of all the evidence given before it on the subject, and is necessary to remove dissatisfaction existing under the present law, and to prevent tax evasion. As regards the specific matters mentioned in the telegram received by Senator Plain, the bill removes tho discretionary powers now vested in the Commissioner in relation to insufficient distributions by companies, and makes the operation of the section automatic. The Melbourne Chamber of Commerce states that this legislation is ft direct interference with rights conferred under the State Companies Act: without some elaboration of this objection, I can only reply that it is considered that the bill does not interfere with any such rights. It is not reasonably possible at this stage to withdraw this portion of the bill, as ample time has been given to all persons affected to make any representations in regard to it, and the large number that have been made on every conceivable point has received full consideration. At an earlier stage, I informed honorable senators that the fullest publicity was given to the bill and its provisions, and advice and suggestions were invited from all quarters concerned. As a result of representations received, certain1 amendments were made in the House of Representatives. This clause is an integral part of the bill, and the Government must insist on its retention.
.- This morning I received from the Hobart Chamber of Commerce the following telegram : -
Only able to see bill this morning. Consider amending act only adds to burdens imposed on bona fide private companies which morally should not have profits taxed ns property income at all. Suggest you urge postponement of measure and full consideration of whole taxation position in connexion with private companies. - Smithies, President, Hobart Chamber of Commerce.
I agree with the contention by several honorable senators that we have not had time to consider this bill fully. Although the report of the Taxation Commissioner was published, there was no suggestion that the Government intended to act on the recommendations contained therein, lt was not until early in July that this bill, embodying many of those recommendations, was introduced in the House of Representatives, lt has been stated that copies of the bill were forwarded to the bodies concerned, but according to the telegram I have just read, members of the Hobart Chamber of Commerce had not seen a copy of the bill until this morning.
– The second reading of the bill was moved in the House of Representatives on the 5th July, but it was not proceeded with at once, so there has been um pie time for consideration of its provisions. Furthermore, this matter has been the subject of investigation for months by the royal commission.
– I am aware of that; but I rem in;! lbc Minister that governments do not invariably accept in full the recommendations of royal commissions. In a number of instances a government has taken different action as part of its general policy. After this bill Was introduced into the House of Representatives, certain statements, based on incorrect information, were made by the Minister. This is why I think that a decision with reference to these proposed new provisions should be deferred until we get some idea of the extent to which they Will affect the interests concerned. I should also like an explanation of paragraph c, which state’s that -
A company shall be deemed to be under the control of any persons where the major portion of the voting power or the majority nf the shares is held by those persons or is held by those persons and nominees of those persons, or where thu- control is, by any other means whatever, in the hands of those persons.
I always thought that I could interpret the language of company law, but I must confess that I find it extremely difficult to understand what this provision means.
Senator Sir HARRY LAWSON (Victoria - Assistant Minister) [3.54]. - Senator Grant said that when the bill was explained in the House of Representatives, the Minister in charge of it made an incorrect statement. I assume that the Minister was speaking in general terms. The provisions of section 21 will, under this amendment of the law, apply to private companies which are covered by the definition, and I think the measure will, in that respect, clear up a doubt that has existed hitherto. It may happen that a company which does not now come within the definition, has been regarded as a private company for the purpose of the application of the provisions contained in section 21, but those cases are, I suggest, very rare.
– The company to which I referred is an important public company. Its shares have been quoted on the Stock Exchange for many years. Yet the statement was made that this amendment of the law would apply only to private companies.
– Generally, the statement made by the Minister in the House of Representatives was correct. The present law, in its terms, is not limited to private companies, but, generally, it has been applied to companies of that description. It is quite possible also that section 21 has been applied to a few companies which will not come within the definition of private companies in proposed new division 2.
As to the doubt expressed by the honorable senator concerning the precise meaning of paragraph c of the definition clause relating to private companies, I remind him that it should be read in conjunction with the definition of a private company - “ Private company “ means a company which is under the control of not more than seven persons, and which is not a company in which the public are substantially interested, or a subsidiary of a public company.
If there are only three persons interested, or if the shares are controlled by them or on their behalf, the company shall be deemed to be a private company, and, as recommended by the royal commission, will come under the provisions of proposed new division 2.
This matter has been the subject of a great deal of discussion. The proposals now before the committee have been designed with a view to simplification of the law and to remedy a very vexatious problem in administration. Assessments issued under the old law met with considerable opposition, and have caused a great deal of dissatisfaction. This bill, it is hoped, will put the matter on a definite basis. Every private company will know what are its obligations.
.- In view of what the Minister has said, I should like to have his assurance that, because of the doubt that has arisen, the department will reconsider its decision, in respect of the company to which I referred, and, if it can be shown that the tax was levied without justification, refund the amount paid.
Senator Sir HARRY LAWSON (Victoria - Assistant Minister) [3.57] . - I am unable to give the honorable gentleman the assurance he has asked for. The assessments were issued pursuant to the law as interpreted by the department. If mistakes have been made, doubtless the remedies are available to the persons concerned.
– But the Commissioner has sole discretion in this matter.
– If a mistake has been made, I have no doubt that the case will be reconsidered. Without being in full possession of all the facts it would be improper for me to give an assurance which might cause very considerable embarrassment. If the honorable gentleman will make representations to the department, I can assure him that they will receive every consideration.
Clause agreed to.
Clauses 14 to 17 agreed to.
.- I move -
That the following new clause he inserted: - 18. - Section 88a of the principal act is hereby repealed.
Honorable senators will recall that yesterday I referred to the incidence of section 88a in respect of preference shareholders in a company. That section reads as follows : - 88a. Where a company has paid or is liable to pay, in addition to income tax payable at the rates fixed for companies, further income tax of a specified percentage of its taxable income which is derived -
No one expected when this provision was inserted in the act in 1931 that its effect would be to penalize a considerable number ofthe poorer people in the community who had invested their savings in preference shares. Certainly no one thought that they would be called upon to pay one of the highest rates of tax imposed under the Commonwealth law. Yet that has been the result. The department states that an alteration of the law in the manner I have proposed would entail administrative difficulties. I am not concerned with administrative difficulties so much as with the distinct hardship that is inflicted on a very deserving section of the community, which we profess to protect in the drafting of our taxation measures. Parliament, in its wisdom, decided that persons whose means are small shall be exempt from taxation. Yet this provision which may have been justifiable in its application to certain companies, actually places a heavy burden upon the shoulders of small investors who own preference shares. Their position is, I think, familiar to most honorable senators, because I have referred to it on other occasions, and it should not now be necessary for me to emphasize the injustice of this tax as it affects them. The deduction of the tax by the company from dividends paid to its shareholders is optional. Some companies contend that it would be unjust to the ordinary shareholders if the special property tax on dividends declared on preference shares were not deducted, irrespective of whether or not the recipients were persons enjoying exemption’ under the Income Tax Act because of their limited income. Let us see how this provision operates. If a company has sufficient profits to pay its preference shareholders the dividend at the rate provided, and the ordinary shareholders a similar rate of dividend, those preference shareholders whose income is so small that they are exempted under the principal act, have to pay this special property tax, whilst ordinary shareholders with a similar dividend and similar income are not called upon to paythe tax. Both are exempted under the act, but in practice one section, the preference shareholders, has to pay the tax. For example, Brown may have invested £500, representing perhaps his life’s savings in preference shares, and Jones a similar sum. in ordinary shares. The former, under section 88a, is required to pay the tax, but the latter is exempted. Fifty persons may be ordinary shareholders and another 50 persons preference shareholders in the same company; not having an income exceeding £250 a year, all of them are exempt under the act, but one section only has to pay the tax. A continuance of the present system cannot be justified. Where the tax has been paid by a company to the department on behalf of those who, under the act, are not taxable, it should be refunded.
– Would the adoption of the honorable senator’s request mean a heavy loss of revenue?
– The amount involved cannot be large; but if it were the department should devise some other means to make up the loss. Even a considerable loss of revenue does not justify the department in making an exempt person pay at the highest rate levied under our taxation legislation. I consider that I am justified in testing the opinion of the committee as to whether the present unjust system should be continued, because under it a heavy burden is imposed upon those least able to bear it. 1 have no axe to grind in this matter. I am a shareholder in companies from which I derive dividends on preference shares, but I am in a fortunate position in that I obtain ‘the full exemption of £250, and a rebate of the amount which the company has paid on my behalf. Those more favorably situated enjoy the privilege of exemptions, deductions and rebates, while poorer- persons who should not have to pay anything at all have to pay the heaviest tax imposed by the law.
Senator Sir HARRY LAWSON (Victoria - Assistant Minister) [4.8]. - The Government cannot accept the request moved by Senator Payne, and I trust that it will be rejected by the committee. The honorable senator has been so persistent in his efforts, and’ appears to have made out such a good case, that I should like to meet him if that were possible. I have examined this proposal in proper perspective, and after consultation with the taxation officers I am satisfied that section 88a of the principal act is sound. That section was embodied in the Income Tax Act in 1931 because ordinary shareholders in companies said that it was unjust that they should have to carry the whole burden of the special property tax. When the position is analysed we can readily perceive that that is correct. In prosperous times ordinary shareholders in a company receive large dividends, but they do not always enjoy that privilege. During periods of depression preference shareholders are assured of receiving some definite amount, while ordinary shareholders have no such assurance.
– Many do not receive anything.
Senator Sir HARRY LAWSON.Much depends upon the prosperity of the company concerned, and the state of trade at the time; but if the company did not make a profit, it did not have to pay the tax, which is a tax upon income. Section 88a was introduced in 1931 at the request of ordinary shareholders, who contended that it “was unfair that they should bear the full- weight of the special property tax payable by a company; df the whole of the property tax were paid out, the fund from which ordinary dividends were declared, obviously the amount available to ordinary shareholders would be reduced. Although the adoption of such a provision may have introduced anomalies, its purpose was to endeavour to do justice to both sections of shareholders. The preference shareholders would receive their full dividend at the rate provided for in the articles of association, the tax on preference dividends would be paid out of a common fund, and the rate of dividend to ordinary shareholders consequently reduced. This was an attempt to spread the burden equitably between the two sections of shareholders.
A plea is now being made on behalf of preference shareholders because the act empowers, but does not require, a company to deduct from a preference dividend the portion of the special property tax paid by the company proportionate to that dividend. But where a company does exercise that power, the preference shareholder is, in effect, not in a worse position than the ordinary shareholder. As regards the latter, the fund available for distribution by the company is diminished by the amount of the special property tax paid by the company, and the dividend which the company can pay is correspondingly reduced. Preference shareholders desire to be assured of being in a better position than ordinary shareholders, namely, that they should get their full dividend without deduction in respect of the special property tax imposed as an emergency measure. If any relief is to be given, it could not be limited to companies with preference shareholders; neither could it be limited to holding companies nor to the dividend income of a company. The grievance really relates to the assessment of a company for special property tax at all. It may be said that any income upon which a company pays the special property tax would, if distributed to shareholders, and liable only in their hands, pay either no special property tax or a greatly reduced amount of tax because of the operation of the flat rate deduction of £250 which each such, shareholder would enjoy. The matter is bound up with the general scheme of company taxation, and it could be urged with equal strength that a company should not pay ordinary income tax upon that part of its income, which, if distributed to its shareholders would not be liable to tax in their hands, because their net income is less than the statutory exemption. It could also be said that such a shareholder should be entitled to a refund of the tax paid by the company on the profits distributed to him. That involves a vital principle, the general application of which would bc too costly, and its limitation to specified types would not be justified because of the serious anomalies that would arise. For the reasons given by the department, the request moved by Senator Payne cannot be accepted.
.- I was interested in the remarks of the Assistant Minister (Senator Lawson), and I had no difficulty in concluding that the information he supplied had been furnished by the department.
– Part of it was my own, but the best portion was supplied by the department.
– I remind the Assistant Minister that the department has made one or two errors. For instance, the Assistant Minister stated that the original super tax of 10 per cent., or 2s. in the £1 caine out of the funds of tho company, so in that respect there was a. differentiation between the tax imposed on preference shareholders and that imposed on ordinary shareholders. Dividends are always followed by the department into the hands of industrial shareholders and included in their assessments. To those having a taxable income a rebate is allowed; but shareholders whose income is below the statutory exemption of £250 do not get the rebate.
– The company pays the tax, and not the individual shareholder.
– I can assure the Assistant Minister that dividends are included iti assessments and rebates are then allowed at the company rate. As the department always follows dividends to individual taxpayers why should they not pay the tax? The department includes dividends in the assessment of an individual taxpayer, so that on the graduated scale he may be assessed at a higher rate even if a rebate is allowed subsequently. A special property (ax is imposed on companies, but if a company does not have any property income it does not, of course, have to pay the tax. It has been said that preference shareholders have been holding out for their pound of flesh in the matter of dividends; but it seems to be forgotten that preference shareholders have had to submit to a compulsory deduction of 22-^ per cent. I think that the majority of companies have deducted the full 22^ per cent., and the shareholders in such companies have, therefore, suffered to that extent. I agree with Senator Payne that> on an income of £100 a year, the department should not impose a property tax, as there is a statutory exemption of £230 a year. It is easy for the department to say that it is impracticable to give effect to a request which would benefit the small taxpayer. If a suggestion is made in the interests of taxpayers tho department says that relief cannot be afforded, but no difficulties ure raised when the burden upon the taxpayer can be increased. A company should be deprived of the right to deduct the tax, and ‘the department should be compelled to follow the dividend to the shareholder who receives it. Tho amendment, if .carried, would cause practically no loss of revenue. If any resulted, it would be only reasonable and proper for the revenue to bear it, seeing that; the existing act professes to grant the statutory exemption to every taxpayer.
– Does the honorable senator know if this matter was brought before the Royal Commission on Taxation?
.- I can answer the question by the Minister for Defence (Senator Pearce). I understood that the matter was to be brought under the notice of the royal commission, and prepared a case for a certain gentleman to put, but, having other work on his hands, he was not able to carry out his undertaking. I am fairly sure, therefore, that the matter did not come before the commission. Two statements that have been made by the Assistant Minister (Senator Lawson) call for a reply from me. I do not blame the department. My grievance is against the Government. The department must carry out the law as it finds it, and its officer? cannot consider equity. Equity, however, should exercise the mind of the Government. If they feel that a proposal is inequitable, they should take steps to remove it. The department, if so instructed, will find a means of working the machinery in such a way as to avoid injustice. The Assistant Minister said that a preference shareholder would under the 1931 provision be in no worse position than an ordinary shareholder, but that is not true where a company pays a dividend of an equal amount to its ordinary and preference shareholders, as many companies are doing. Some companies are paying to ordinary shareholders a dividend at least three times as great as that paid to holders of preference shares. The Minister is misinformed when he says that preference shareholders are suffering no more than ordinary shareholders. An ordinary shareholder receives his dividend, but if his net income is less than £250 a year, he is not deemed to be an income tax payer at all, whereas a preference shareholder in a company that exercises the power given by the act of 1931, even if his total income is only £50 h year and that is all he has to live on, must suffer the company ‘to deduct 6 per cent, of his dividend. In 1931-32 the tax was 10 per cent., and in the following year 7i per cent. The amount deducted” is handed to the Income Tax Commissioner, although the preference shareholder’s income from all sources is £50 a year; so notwithstanding the general exemption of £250, the department receives from him the highest tax levied in the Commonwealth. The Government must do something to cure this evil. It is unfair to allow it to continue. I have shown conclusively that ordinary shareholders are paid their full dividends, receiving at the same time all the benefits of the act in the way of exemption and deduction, whereas the unfortunate preference shareholder has to pay the highest rate levied, is allowed no deduction, and does not participate in the general exemption which is supposed to apply to the whole community.
– If it was not done in this way, the money would still have to be found by somebody. If the company had to pay it, would not that be unjust to the ordinary shareholder?
– The Assistant Minister further objected that, as the general exemption from the special property tax is £250 a year, the amendment would cause a heavy loss of revenue. Does the honorable senator mean that, although Parliament in its wisdom has decreed a general exemption of £250 a year, yet through the ramifications of a section of another act, which has nothing to do with the exemptions under the principal act, some people are compelled to pay the special property tax, and have no right or opportunity to participate in the general exemption? Does he mean that the department is justified in swelling the Consolidated Revenue by such means, in spite of the fact that the law enacts that the people thus penalized shall not be taxed at all? The Assistant Minister’s statement that a loss of revenue would be caused is surely an admission that the receipts of the department have been wrongly inflated by imposing taxation on those whom Parliament exempts in the Taxation Act. These people are justified in expecting the Government to realize promptly the unfair position in which they have been placed, and to refund every penny they have had to pay in excess of what the principal act requires. I hope that the committee will support the amendment, the acceptance of which may necessitate some other provision to assist companies. That, however, is a matter for future consideration. My present object is to remove this burden from people who are least able to bear it.
Senator Sir HARRY LAWSON (Victoria - Assistant Minister) [4.26]. - There is no fear of double taxation under the existing law. The section which imposes the special property tax includes the following sub-section : -
Where income tax is payable by a company under this section, income tax shall not be payable under this section upon any taxable income derived by any person in consequence of the distribution by that company to its members or shareholders of the income upon which tax is so payable by that company, or in consequence of a succession of such distributions through another company or through other companies of that income or any part thereof.
– I said that it was collected, and had to be refunded by the Department.
– I understood the honorable senator to say that there was a possibility of double taxation, and that probably the excess would be refunded. There is in the law a special provision that money which has already paid tax in the hands of the company shall not be called upon to pay again in the hands of the individual, and shall not affect the rate at which tho individual is assessed.
– It is included in the assessment. I have had it included in my own and have paid it, and the full amount has afterwards been refunded. It does, however, affect the rate of tax.
– I am advised by the experts that that is not the case under the section which Senator Payne is seeking to repeal. Senator Payne, in his endeavour to bring about the reform which he seeks, is being unfair to the ordinary shareholder and giving priority or preference to the preference shareholder over and above what he is now allowed.
– The preference shareholder obtains his preference, because he has accepted a smaller return on his investment.
Senator Sir HARRY LAWSON.What the honorable senator suggests is, administratively, practically impossible. It would be burdensome and too difficult to administer. Section 88a was put in the act of 1931 by the Scullin Government in an endeavour to do justice as between the two classes of shareholders. A refund to preference shareholders would involve so much vexatious administration that it is considered impracticable. The 22$ per cent, deduction from dividends of preference shareholders has nothing to do with any Commonwealth act. It is made under the financial emergency legislation of the State in which the preference shareholder derives his income.
– It does not apply to ordinary shareholders, so that, in that instance, it is a disadvantage to preference shareholders.
– The preference shareholder is not a shareholder in the ordinary sense. He has lent his money for the purpose of investment in tho company at a fixed rate of interest. In pursuance of State financial emergency legislation, some States apply the 22^ per cent, deduction to preference shareholders; others do not. In any event, it is beyond the power of the Commonwealth to interfere. As such deductions,, wherever made, are in no way due to Commonwealth legislation, the Government must oppose the amendment.
.- I intended to suggest to the Assistant Minister (Senator Lawson) that, if he was prepared to promise definitely that the Government would look into the matter with a view to refunding all money collected through the operation of the 1931 section from people who are not liable to pay income tax, I would withdraw the amendment, but as the Assistant Minister has definitely stated that the administrative difficulty would be too great, I have no option but io press it to a division. Otherwise, 1 should have been glad to withdraw it. I have no grievance against the companies or the department. My complaint is that the Government is allowing the department, through the operation of this section, to extract money from people who are by the principal act exempt from taxation.
.- Whatever the Minister may say, the people of Australia are evidently only now waking up to the fact that this bill is before Parliament. 1 have already received two telegrams on the subject this afternoon. The president of the Launceston Chamber of Commerce has telegraphed me as follows: -
Chamber mainly concerned with the unfairness of retrospective action, and trust it will be wiped out.
– That arises from a misunderstanding of the provisions of the bill, which has no retrospective operation.
Question - That the proposed new clause (Senator Payne’s amendment) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)
Majority . . . . 9
Question resolved in the negative.
Proposed new clause negatived.
Title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
[4.40]. - I move -
That thebill be now read a second time.
The estimates of expenditure from the Consolidated Revenue Fund for additions, new works, buildings, &c., for the year ending the 30th June, 1935, provide for a total expenditure of £1,624,880. The following table shows the distribution of that amount over the various sections of the new works estimates, and gives a comparison with the expenditure for the financial year 1933-34: -
The amount provided in these estimates for new works from the Consolidated Revenue Fund is £184,423 less than the amount expended from revenue last year; but I remind honorable senators that provision is made in the works loan estimates for £1,000,000 for postoffice undertakings. The total estimated expenditure from revenue and loan fund, including the balance of the loan fund appropriation of last year, is £2,845,051, compared with £1,667,910 actually expended during 1933-34. The estimated increased expenditure of £1,177,141 is exclusive of £1,160,000 to be expended on defence works from the amount to be specially appropriated for that purpose from the accumulated excess receipts in the Consolidated Revenue Fund at the 30th June, 1934. It will be seen that the Government is making substantial provision for additional expenditure on works during the current financial year. Owing to financial stringency, works expenditure has necessarily been curtailed during recent years. It is now necessary to provide for much more liberal expenditure in order to meet the growing needs of the various departments and to supply the public with postal and other facilities in respect of which increased revenue is being received. The larger expenditure on new works will aid in the alleviation of the unemployment problem. I commend the measure to the favorable consideration of the Senate.
.- I congratulate the Government on its attempt to relieve unemployment, although the effort is very belated. The bill will provide work for a comparatively small number of men ; it will not go far towards fulfilling the Government’s promise to provide work for the workless. Notwithstanding that this measure is brought forward practically on the eve of an election, I am glad that, at last, the Government is attempting to do something forthe unemployed, and I shall not delay its passage.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motion by Senator Sir George Pearce) read a first time.
In committee: Consideration of report of Standing Orders Committee presented to the Senate on the 31st July, 1934, together with amendments and additions recommended by the committee.
Standing Order 6 (on motion by Senator McLachlan) verbally amended.
Whenever the office of President becomes vacant whether such vacancy shall take place in terms of section 17 of the Constitution or of the immediately preceding Standing Order the Clerk shall act as Chairman of the Senate prior to the election of the President.
Committee’s recommendation -
Add to Standing Order - “and shall have the powers of the President under the Standing Orders whilst so acting “.
– I move -
That the amendment be agreed to.
In the past there has been some doubt in the minds of honorable senators as to what powers the Clerk posseses while presiding during the election of the President. This amendment is designed to give the official all the powers of the President on such occasions in order that he may have full control of the debate.
– Nothing has occurred to warrant a departure from what has been the procedure in the Senate for over 30 years. This is an elected chamber, and I cannot agree with any proposal that would take control of the business of this chamber out of the control of the elected representatives. If the proposed procedure were applied to similar occasions in the House of Representatives, and all things were equal, one might be tempted to fall in with the wishes of the Government.I do not know what the Government has in mind when it proposes to give this drastic power to an official of the Senate.
I am not going to say that the Clerk, whoever he might be, would abuse the power proposed to be given to him under this amendment. As a labour senator, however, I always look forward to the swing of the. political pendulum, and with that in mind I suggest that this proposal may have a boomerang effect. Of course it can be contended that the framers of the Constitution clearly contemplated that the Senate should not be a party chamber. We have, however, seen the Senate change from a chamber of review to a strictly party chamber, in which partisan feeling at times has been bitter. I do not intend to support the amendment.
– I desire to remove a misapprehension from the mind of the honorable senator. This amendment has not been proposed by the Government. It is the unanimous recommendation of the Standing Orders Committee, and in submitting this and other recommendations to honorable senators I am merely acting for the President. There is no doubt that the power proposed to be given to the Clerk is inferentially contained in the existing Standing Order. Unless the Clerk has some such control over debate the proceedings of the Senate might get. into a hopeless state. A certain amount of trouble has occurred in the past.
SenatorRAE (New South Wales) [4.59]. - I join with my colleague in objecting to this proposal. With all due respect to whoever might be occupying the position of Clerk, I can see no reason why the control of an elected chamber like this should be given to any one not elected by the people.
– The Standing Order already provides that the Clerk shall preside.
– The power given by the existing Standing Order to the Clerk is so slight as not to be dangerous. Somebody must preside while the President is being elected, and for the sake of convenience the Clerk is named. But an occasion might arise when there would be considerable friction between parties over the choice of a presiding officer, and I do not think the onus of giving a ruling on such occasions should rest on a paid official of this chamber.
– To whom would the honorable senator give the power?
– We have not yet given it to any one. Under the existing Standing Order the Clerk presides in a limited sense only. He is in the same position as the corresponding official in the British Parliament or in other parliaments of the Empire. He can indicate by pointing which honorable senator is to speak when two or more rise simultaneously, but he can go no further than that. In the event of a brawl occurring on these occasions there are other means of settling it, and I do not think that the Clerk should be placed in the invidious position of having to give a ruling should any friction occur. Under such circumstances the Senate should settle its own quarrels. Bather than give the proposed powers to an official it would be better to provide that the honorable senator previously occupying the position should fill the presidential chair until his successor was elected. Failing that, some other means preferable to the proposal contained in the amendment could be devised for controlling the business on such occasions. In the past we have always managed to get along without any serious disagreement.
– There was considerable misbehaviour on one occasion.
– It was not of a serious character. Even the press, which at any time is eager to magnify anything in the nature of disorder,made little reference to the incident of which the right honorable senator spoke. I am not opposed to changes where they are needed, but I do not see any need for this change.
– It is difficult to understand the opposition of honorable senators who have just spoken to this amendment. It only authorizes the Clerk to apply during the election of the President the powers contained in the Standing Orders.
– It is the interpretation of the Standing Orders that matters.
– The Senate still remains the final judge.
– During the election of a President, the Clerk who. presides on such occasions is not now armed with any authority or rules to control the debate. I think honorable senators’ will agree that it is most desirable that he should be given such powers. The amendment will not put the Clerk in an invidious position, as has been suggested by Senator Rae. On the contrary, he is in such a position when he has no standing orders or rules to help him effectively to control the proceedings. The amendment should be carried unanimously.
– What is wrong with the present procedure, which is adhered to in the British Parliament?
– We do not know that the same procedure does apply in the British Parliament or in other parliaments of the Empire. What objection can be offered to observing for the election of President, the same rules as govern the conduct of senators at any other time?
– I think I understand the reason for the apprehension which, apparently, exists in the minds of Senators Dunn and Rae as to the consequence of vesting in the Clerk of the Senate the authority of the presiding officer in all proceedings for the election of the President. But it will be admitted that it is advisable to clothe some one with authority in order to reach finality. At present, there is a great deal of indefiniteness about the proceedings. Honorable senators can, if they wish, take a whole day over the business. Need I remind Senators Dunn and Rae that, in the State which they represent, on one occasion the choosing of a speaker for the Legislative Assembly gave rise to a discussion which lasted for many hours. Probably the less said about its conclusion, the better; it ended rather ingloriously. The motion now before the Chair defines clearly the procedure to be followed. If it is objected that it is unwise to give to the Clerk the powers of the President, I remind honorable senators that the privileges enjoyed by the presiding officer are subject to certain limitations, and the Senate may disagree with his ruling; so also, would the Clerk, if be offended, be subject to correction by the Senate, in which power finally resides. This recommendation of the Standing Orders committee is an attempt to end the uncertainty which exists at present concerning proceedings for the election of the President, and I think it will appeal to the good sense of honorable senators generally. We may take it that the Clerk will not act unfairly, because, for one reason, he will be clothed with the powers of the presiding officer for only a limited period, and if he offends he can be quickly called to order.
– It is not my intention to oppose the motion, because in view of what has occurred in the past, it is desirable to agree upon some procedure for the election of President. Nevertheless, it seems to me that the amplification of the powers of the Clerk may place him in an invidious position. He will be expected, for the time being, to assume all the powers of the President. In view of what has taken place during the term of this Parliament, I am somewhat in sympathy with the views of Senators Rae and Dunn, whose desire is to ensure the fullest measure of debate in respect of any question that comes before this chamber, It is obvious that the Government did attempt to have the rules of debate altered so as to limit discussion on the first and second reading of important bills, and I am glad to know that the Standing Orders Committee did not lend its support to that suggestion. It is desirable that the freest discussion should be permitted in connexion with all bills brought before the Senate. Only to-day we passed, without discussion, a measure involving the borrowing of over £1,250,000. As the items in the schedule were taken as a whole, honorable senators bad no opportunity to deal with details of the bill. There is an undoubted tendency on the part of the Government to shorten debate on measures that come before the Senate, and to prevent honorable senators from being heard as they should be heard when they think that any particular measure affects the people whom they represent. I do not intend to oppose the motion to vest the Clerk temporarily with the powers of the President, but with other honorable senators I look with sus picion on this tendency to shorten debate. We have evidence of it in the fact, that although so far as we know, Parliament will be adjourned to-morrow night, there is a long list of bills to be dealt with. I view almost with alarm this tendency to restrict debate on important measures that come before this chamber.
– I think we may assume that the Standing Orders Committee would not have submitted this recommendation unless it was convinced that there was good reason for it. The procedure suggested, of course, is a departure from a very old established custom in connexion with the election of the presiding officers. I have not had time to find out how long it has been observed, hut I know it has been the practice in the House of Commons for a great many years. This recommendation is a definite departure from the custom which lays down, in effect, that just as members of Parliament have freedom from arrest in Parliament House, so members cannot on the motion to choose the member who shall preside, be subject to any authority over them within their own Parliament. There was substantial reason for the adoption of that course. The only reason, I take it, for the alteration now proposed - I think it is a valid reason - is that it has been somewhat abused. I do not say that it has been abused in this chamber, but to my knowledge it has been taken advantage of in the House of Representatives, one member in particular making very long speeches about anything and everything, simply because there was no specific Standing Order governing the procedure by which he could be checked. We may quite properly assume that the Clerk, who knows the Standing Orders if anybody does, is not likely to adminster them unwisely, because, for one thing, his reign is short and the day of retribution would come soon. But apart from that fact, any one who has risen to the position of Clerk of the Senate or of the House of Representatives is not likely to be a person to take momentary advantage of his authority.
– He would still be under the control of the Senate.
– I am not quite certain to what extent he would be forced to accept a motion that his ruling be dissented from. He might rule it out of order, and for the moment, be in complete control. Under the present system the Clerk is under the painful necessity of having to point. As we were taught, when children, that it is not good manners to point, we should not require the Clerk to be guilty of what* is regarded as bad form! That procedure, I think, is somewhat farcical. I see no objection to giving the Clerk power to call upon individual senators by name. I agree with that part of the recommendation which suggests that speeches in support of nominations for the presiding officer should be limited to fifteen minutes. That time ought to be quite sufficient for any honorable senator to extol the merits of even the greatest President or future President. Above all, the Senate, in surrendering temporarily by this proposal its right, does not give away its power. If any attempt were made to abuse the authority which it gives to the Clerk, or if the new procedure were found to be unworkable, it could be changed. While the suggested procedure is a definite departure from an old-established custom, I think it is justified. I intend to support the motion.
– It seems to me that the reasons advanced in support of the proposal to change the procedure for the electionof the President emphasize the arguments of those who are opposed to it. Senator Duncan-Hughes mentioned the trivial objection that, under the existing arrangement, the Clerk is obliged to point to the honorable senator who shall next address the Senate. That objection can be overcome quite easily. I have not the slightest objection to the Clerk being authorized to call an honorable senator by name. I have always thought the present practice rather foolish. As to the main objection that there has been a certain amount of abuse under the existing procedure or lack of it, I do not think that any one can accuse me of taking advantage of any situation to abuse fellow senators or any one else. While I admit that, in a moment of anger, I might feel impelled to say something which I would regret afterwards, I am not prone to abuse my fellows. It is, however, desirable that there should bo a clear distinction between abuse and candid criticism. In the ordinary conduct of business in the Senate no opportunity is afforded to criticize candidly the presiding officer, as is the case when the Senate is called upon to choose its President.. It is only right that, when an honorable senator is nominated for the position, our right of criticism should be unrestricted. We should be able to say exactly what we think of his fitness or unfitness for the position. Short of offering a deliberate insult to a candidate to whom we might be opposed, we should have the full opportunity to criticize his conduct in the chair, if he is seeking re-election, or his fitness if he has not had previous experience in the chair. If the recommendation be adopted, we shall he rigidly bound, not merely by the rules, but by the practice in this chamber, and shall be denied the opportunity to say anything detrimental to the character or capacity of the honorable senator nominated. Ineffect honorable senators will be prevented from criticizing an honorable senator selected to hold the highest office which the Senate has to offer, and who, in their opinion, may be unsuitable for the position. It would be preferable to incur the risk of an honorable senator abusing his rights rather than to prevent legitimate criticism. Senator Herbert Hays said that the Clerk of the Senate should be as capable of controlling the proceedings in this chamber as is a duly elected president; but on such occasions we should not permit an officer over whom we would have no authority to exercise such power. I oppose the motion.
Question - That the motion be agreed to - put. The committee divided. (Temporary Chairman - SenatorJ. B. Hayes.)
Majority . . . . 18
Question so resolved in the affirmative.
Motion agreed to.
A senator, addressing himself to the Clerk, hall propose to the Senate for their President, some senator then present, and move that such senator do take the chair of the Senate as President. Such motion, before being entertained by the Senate,shall be seconded by some other senator.
Committee’s recommendation. - Add to Standing Order - “ Provided that the senator in proposing the motion and any senator addressing himself thereto may not speak for longer than fifteen minutes.”
Motion (by Senator McLachlan) proposed -
That the amendment he agreed to.
– I intend tooppose the motion.
– I expected opposition from the honorable senator.
– If the Leader of the Government were a candidate for the office of President it would take me a week to say what I think of him, and if SenatorRae or Senator Barnes was proposed I could dilate upon their good qualities for more than fifteen minutes. As I consider that the time provided is too limited, I move -
That the following words be added to the motion : - “ with an amendment making the time thirty minutes “.
– If thirty minutes were allowed, and each honorable senator exhausted his time, eighteen hours would elapse before the President would be elected. I ask the committee to reject the amendment.
Question - That the amendment (Senator Dunn’s) be agreed to - put. The committee divided. (Temporary Chairman - Senator J. B. Hayes.)
Majority . . . . 16
Question so resolved in the negative.
Motion agreed to.
At the commencement of the session, after each periodical or general election of the Senate . . . the Senate may appoint a senator to be chairman of committees who unless otherwise determined, shall hold office until the thirtieth day of June following the next periodical election of the Senate . . .
Committee’s recommendation -
Amend the Standing Order by leaving out the words “ session, after each periodical or general election of the Senate “, and insert in lieu thereof the words “ sittings next ensuing after the thirtieth day of Juno following each periodical election or at the commencement of the session after a general election of the Senate “.
– I move -
That the amendment be agreed to.
The amendment is formal. When the present standing order was adopted, the intention was that the Chairman of Committees, having been elected, should hold office until at least the 30th June following the next periodical election of the Senate. It was not anticipated that a session would be commenced between the date of an election and the 30th June following, but such has been the case, and the amendment is proposed in order to meet that position.
Motion agreed to.
Standing Order No. 66a -
The following business shall be placed on the notice-paper as “business of the Senate”, and shall take precedence of government and private business for the day on which it is set down for consideration, viz.: -
a motion for the disallowance of a regulation or ordinance.
Committee’s recommendation -
At end of paragraph (c) add the words “or the disapproval of an award made under the authority of any act which provides for the award being subject to disapproval by either House of the Parliament “.
.- I move-
That the amendment be agreed to.
The amendment is considered desirable in order to place the disapproval of an award on the same footing as the disapproval of regulations and ordinances. It brings the whole scheme into harmony.
– Does the amendment affect industrial awards in any way?
– No. Since the standing order proposed to be amended came into force, power has been given to the Senate to disallow awards, and there must be some method of fixing the time during the sittings of the Senate when a motion to that effect can be taken. The amendment merely provides the procedure. The committee saw the necessity for it, and agreed to recommend it.
Motion agreed to.
Proposed new Standing Order - 66b. The following business shall take precedence of any other “ general business “ on the day on which it is set down on the noticepaper, viz.: -
A motion for the consideration or adoption of the report from any standing committee of the Senate or joint standing committee of the two Houses. (A note to be put in the Standing Orders to the effect that where the words “ Private Business “ are used the words “ General Business “ shall be read in place thereof.)
– I move -
That the proposed new Standing Order he agreed to.
After the present Standing Orders were drafted, certain joint standing committees and other standing committees were brought into being. The proposed new standing order allocates the time at which such business may be dealt with.
Proposed new standing order agreed to.
After the second reading unless a motion (of which notice need not be given) be moved for referring the bill to a select committee or a standing committee, or unless notice of instruction has been given, the Senate shall forthwith resolve itself into a committee of the whole for the consideration of the bill: Provided that when the second reading has been agreed to pro forma, on the first occasion for consideration of the bill in committee of the whole Senate the question shall be proposed “ that this bill be now committed,” and such motion shall be open to debate as though it were a motion for second reading.
Committee’s recommendation -
Leave out Standing Order 196 and insert the following new Standing Orders in lieu thereof, viz. : - 196. After the second reading, except as provided for in Standing Orders196a and 196b, the Senate shall forthwith resolve itself into a committee of the whole for the consideration of the bill. 196a. Immediately after a bill has been read a second time - a motion (of which notice need not be given) for referring the bill to a standing committee or a select committee; and/or an instruction of which notice has been given - may then be moved. 196b. Where the second reading of any bill has been taken pro forma, on the first occasion for consideration of the bill in committee of the whole, the question shall be proposed “ that thisbill be now committed “, andsuch motion shall be open to debate as though it were a motion for second reading.
– I move
That the amendment be agreed to.
This matter has been the subject of careful consideration. In March, 1932, the present Standing Order196 was adopted. The manner in which it was expressed did not make for clarity. It was onlya few days ago that Senator E. B. J ohnston proposed a motion to refer a bill to a select committee, and the question of procedure cropped up. Standing Order 195a, adopted at the same time as Standing Order 196, is as follows -
When it is the intention of the Senator ire charge of a bill to move the bill be referred to a select committee or standing committee, the second reading may be moved pro formar and in such case there shall he no speech by the mover and no debate: Provided the notice of intention to move pro forma must he given either at the time of fixing the date for second reading or not less than two clear sitting days before the date fixed for second reading, and such motion shall be placed on the Notice-paper.
That is to say, the Minister or private member introducting the bill has the right to say that he is moving the second reading pro forma, and then no debate is allowed, provided that an intimation has been given of the intention to move the reference of thebill to a select committee or standing committee. The proviso ensures that all honorable senators shall be advised of the position, but honorable senators other than the mover, who have no rights up to this stage, have had their rights provided for in Standing Order 196. All that has been done by the Standing Orders Committee in the amendments now proposed is to simplify the method adopted in Standing Order 196. The recommendation of the committee is that present Standing Order 196 be left out and that three new Standing Orders should embody the whole of the provisions now contained in it. Proposed new Standing Order 196 repeats the ordinary practice of the committal of the bill after the second reading. By proposed new Standing Order 196a a motion to refer the bill to a standing committee or select committee, and/or an instruction, may be moved immediately after the second reading. Proposed new Standing Order 196b provides that where the second reading of any bill has been taken pro forma, on the first occasion for consideration of the bill in committee of the whole the question that the bill be now committed shall be proposed, and the motion shall be open to debate as though it were a second-reading motion. The committee has not interfered with Standing Order 195a at all relating to the pro forma introduction of the bill if the honorable senator in charge of it intends to have it referred to a committee, but it has preserved all the rights of debate given in Standing Order 196. There were some suggestions of limitation.
– The only complaint was that it was not in clear language.
– I suggest that that objection has been met. As regards the possibility of repetition of debate, raised by proposed new Standing Order 196b, under our old procedure the proposal to refer a bill to a select committee was made as an amendment to the motion for the second reading. Under the new procedure the action will be taken as the result of a substantive motion made after the second reading. In the former case the following rules of debate would apply - (1) Senators who had spoken to the motion for the second reading could speak again, but only to the amendment; (2) Senators who had not previously spoken would, if speaking after the amendment had been moved, be taken as speaking both to the original motion and the amendment. In the latter case the remarks of senators speaking to thesubstantive motion would be confined to the subject-matter of it, and they should not discuss the bill itself. What, then, are the possibilities for repetition of debate? Presuming that the amendment was moved practically at the close of the debate on the second reading, any senator who had already taken part in the debate could speak again to the amendment. In such circumstances the opportunity for debate would be very little less than would arise as the result of the moving of the substantive motion. Repetition would occur if senators, in speaking to the substantive motion, digressed into a discussion of the bill itself, but such digression would not be in order and could be checked by the President or by senators themselves.
Motion agreed to.
Motions - “ that the Committee do now divide “, “ that the chairman do report progress and ask leave to sit again “, and “ th at the chairman do now leave the chair “, shall he moved without discussion, and be immediately put and determined, provided that a vote on the question “ that the committee do now divide “…
Committee’s recommendation -
That the words “Committee do now divide “, wherever occurring, he left out and the words “ question he now put “ inserted in lieu thereof.
– I move -
That the amendment be agreed to.
It is considered that the proposed alteration provides a better form of putting the question for the peremptory closing of a debate. Under the present Standing Orders, after the Senate has divided on the question “ that the Senate do now divide “, should the question be resolved in the affirmative, the Senate must at once divide again on the main question. The Senate may not desire to divide on such question, but may be prepared to allow it to go on the voices. The amendment really effects a cleaning up.
Motion agreed to.
Consequential amendments in Standing Orders 431 and 433 agreed to.
No senator shall speak for more than one hour in any debate in the Senate, except that in the debate on the Address-in-Reply or on the first reading of a bill which the Senatemay not amend, or in moving the second reading of abill, he shall be at liberty to speak for one hour and a half. Any senator may move that the limit of one hour, or of one hour and a half, may be extended for thirty minutes. . . .
Committee’s recommendation. - After the word “ for “ third occurring, insert the words “ any period up to “.
Motion (by Senator McLachlan) proposed -
That the amendment be agreed to.
SenatorRAE (New South Wales) [5.52]. - I do not wish to debate the committee’s recommendation, which appears to be merely a drafting amendment, but I would like to know whether, at this stage, I may mention another matter which seems to have been omitted.
SenatorRAE. - Some time ago it was suggested that, a few minutes before the termination of his allotted time, a speaker should be notified of the time still remaining to him. so that he could round off his speech before being compelled to resume his seat. I should like to know whether the Standing Orders Committee gave that matter consideration.
– Unfortunately, the suggestion of SenatorRae was not brought forward until after the Standing Orders
Committee had made its decisions. The subject was not one covered by the reference to the committee.
I have discussed the proposal contained in the motion with several honorable senators, and they appear to think that it is somewhat unfair to ask the Senate to determine on each occasion the length of any extension of time which should be granted to a senator. Under the existing standing order, a senator who is granted an extension of time is entitled to an additional 30 minutes; the amendment suggested by the Standing Orders Committee provides that the duration of the extension shall be stipulated in the motion proposing it. When the matter came before the Standing Orders Committee I was not favorably impressed with the proposal to vary the time of the extension ; but I assure honorable senators that the Standing Orders Committee made its recommendation on the understanding that the standing order would be administered in a friendly spirit. It was not aimed at any one honorable senator, and was not intended to prevent a speaker from completing his remarks, if he had sufficient material for a speech of a little longer duration than the usual time allotted to him. The committee had in mind occasions when senators had intimated that an additional few minutes would be sufficient, for them to complete their remarks. The unanimous view of the members of the committee was that an honorable senator who desired an extension of time should indicate the length of the extension necessary, and that, if the motion for such extension was agreed to, no objection would be raised if he took an additional 30 minutes. The committee has endeavoured to amend the standing order with a view to shortening the time of debate without infringing upon the rights of honorable senators. If the new standing order is administered in the spirit in which it was framed, no injustice will be done to any member of this chamber.
– Senator O’Halloran stated the objections which could be raised to this amendment in order that he might meet them; but I do not think that he did meet them. Frankly, I do not see that anything is to be gained by the proposed amendment. Under the existing standing order, any honorable senator may move that the limit of one hour, or one and a half hours, may be extended for 30 minutes. If such a courtesy is extended to an honorable senator, it does not impose on him any obligation to speak for the full 30 minutes.
– There is grave danger that the 30 minutes will be fully availed of.
– The tendency to utilize the full 30 minutes of additional time is not general. Surely an honorable senator who is granted an extension of time will recognize the obligation to complete his speech in the least possible time!
– Under the existing standing order, the Senate must agree either to an extension of 30 minutes, or to no extension at all.
– That may be; but the honorable senator need not avail himself of the full 30 minutes. Senator O’Halloran said that a speaker sometimes intimated that a further five minutes would enable him to conclude his argument, and that it was a pity means did not exist to grant him that extension of time. Is the honorable senator sure that means do not. exist? If an additional five minutes will suffice to conclude an address, what harm is done by granting an extension of 30 minutes?
– It has sometimes happened that a speaker who has intimated that five minutes more would meet his requirements has spoken for the full 30 minutes allowed.
– There is probably not any member of the Senate whose speeches would not be improved by condensation ; but it may sometimes happen that ‘ a senator honestly finds that he cannot say in five minutes what he thought he could. If he wants another extension of time must some one move that he be allowed a further five, ten, fifteen, or 29 minutes? So far, no solution of the difficulty mentioned by Senator O’Halloran has been offered. In m.v opinion, the amendment will present difficulties; the Senate may be placed in the invidious position of having to ask an honorable senator how much more time he desires for the completion of his speech.
– Honorable senators may sometimes have to nsk themselves how much more they can stand.
– I question the wisdom of the amendment, which I do not think is necessary.
Senator Rae suggested that a speaker should be given a signal when the time allotted1 to him has nearly expired. The purpose of the honorable senator can be achieved without a standing order. The Clerk keeps a record of the time at which each honorable senator commences to speak, and he could intimate the approach of the termination of the time allowed, either by a memorandum to the honorable senator speaking, or by informing the occupant of the chair, who, in turn, could advise the speaker. I agree with Senator Rao that it is a convenience to a speaker to know when his time is about to expire, so that he may round off his remarks in the time still remaining to him ; but there is no need for a standing order to enable such notification to be given.
Senator MacDONALD (Queensland) 1 6.4]. - When I read in the report of the Standing - Orders Committee the phrase “ except a slight modification of the provision with regard to extension of time,” I was inclined, to think that nothing of great importance was proposed. I have had sufficient industry to refer to the existing Standing Order, and I have come to the conclusion that the words proposed to be inserted will very materially alter it. I base that conclusion on the experience of this Parliament. I listened with great attention to the arguments advanced by Senator O’Halloran, but they did not convince me, although I regret to have to disagree with my deputy leader. I think Senator Brennan dealt with this matter very fully and convincingly. We have to provide for such contingencies as might arise from party bitterness in the future. I am not saying that any power of restricting debate would be used more maliciously by one side than by the other. We have to remember ‘that, if drastically-minded, either party might use the provision now suggested, simply for the purpose of harassing an opponent. If a leader should suggest that an opponent be stifled by the application of the Standing Orders, members of his party would naturally support him in the carrying out of that suggestion.
– An opponent could be more effectively stifled under the existing standing order because he might not be granted any extension, and, in any case, he can continue his speech for only an extra 30 minutes.
– If the proposed amendment to include the words “ for any period up to thirty minutes “ is adopted, a ridiculous position might arise. If honorable senators on this side wished to curtail an opponent’s speech they could do so very easily by moving a contemptuous motion. Or a member of the majority party might move that a speaker be allowed to continue his speech for a minute. All honorable senators cannot express themselves succinctly; some are naturally verbose and discursive, but that is no reason why their right of speech should be limited by their opponents. I read recently of a very fine journalist who won his case at law but obtained a verdict for only one shilling. That verdict was contemptuous. Under the proposed amendment a speaker might be facetiously or contemptuously granted an extension for 30 seconds. The modification of the existing Standing Order, although described by the Minister as slight, can have very serious consequences. It could be used purely as a means of wasting the time of the House. Senators could move for an extension of 20 seconds or half a minute or any other such ridiculous period and upon the rejection of the motion, a further motion for a slightly longer extension could be made. These trifling motions, and amendments upon them, could continue almost indefinitely.
– The honorable senator forgets that no debate is allowed on motions to extend the time of a speech.
– Nevertheless the proposed amendment would open the way for the moving of a succession of contemptuous motions, thus wasting time. I think it would be far better if a definite time for the extension of speeches were stated. Otherwise it would be better not to permit any alteration at all. It appears to me that the Standing Orders Committee did not give to this proposal adequate consideration ; probably it was pressed by a strong member of the committee and passed without its implications being fully appreciated. I hope that the committee will reject the amendment.
– Personally I would have been very pleased to support the amendment if it stated a definite period for the extension of speeches. The freest possible discussion should be allowed on matters of national importance, especially as during this year the Senate has met for only comparatively a few hours. Senator Sir George Pearce has been so long a member of this chamber that he has reached a stage when he cannot really enjoy a good discussion on anything. Probably if I had been a senator for so long a period I should feel the same. From what I can see of the honorable senator, he is very happy in limiting discussions and curtailing speech on matters coming before the Senate. I have noticed a look of boredom on his face.
– The honorable senator is not in order in making personal references.
– The personal boredom of any one individual should not cause him to support any amendment of the Standing Orders which will limit the time for discussion of questions of national importance.
– This proposal does not limit the time allowed to a speaker, if the Senate desires to grant him leave to continue.
– It is most unfair to limit an extension to half an hour or less. The present standing order is not abused. If a senator is granted an additional 30 minutes, he does not occupy the full time if he can complete sooner what he wants to say.
– If he is refused the 30 minutes, he gets nothing.
– Under the proposed amendment the speaker’s time may be extended for periods of ten minutes, fifteen minutes, and so on. That will get us nowhere. Surely, having regard to the irregularity of the meetings of the Senate, there should be no objection to giving an honorable senator permission to speak for a greater length of time if he desires to do so.
Sitting suspended from 6.15 to 8 p.m.
– Having regard to the objections that appear to have been taken to this suggested amendment, I have consulted with some of my colleagues and Mr. President, who is chairman of the Standing Orders Committee, and I am willing, if the committee so desires, that this amendment shall not be agreed vo.
Motion (by Senator MoLachlan) agreed to -
That the report from’ the committee be adopted, and the amendments and additions to the Standing Orders come into force from 1st October, 1934.
[8.4]. - I move -
That tho hill be now read a second time.
The purpose of this measure is to appropriate £4,160,000 out of revenue for defence expenditure of a capital nature. This amount will be paid to the credit, of the Defence Equipment Trust Fund, and will be applied to naval construction, purchase of armaments, aircraft, munitions, equipment, machinery, plant, and reserves of ammunition and oil fuel; for defence works and buildings, and for the acquisition of sites therefor. When speaking on another measure this afternoon, the Assistant Minister (Senator Lawson) indicated the origin of this money, and explained how it came to be available, so it is not necessary for me to say anything further on that point.
On the 25th September, 1933, when speaking in Sydney, I outlined to the [Ml people of Australia the Government’s defence policy. I pointed out then that owing to the financial stress through which Australia had passed, our defences had fallen below a reasonable margin of safety. I did not then, and I do not now, place any of the blame for that state of affairs on the preceding Government. The Scullin Administration was the victim of circumstances. During its regime the financial position of Australia was so serious that drastic reductions had to be made in all forms of governmental expenditure. But with the revival of our finances, and in view of the condition of world affairs to-day, it becomes the bounden duty of this Parliament to make more adequate provision for the protection of Australia than we have to-day.
One of the most serious aspects of defence is that owing to the period, of financial stringency through which wo have passed, not only was there insufficient money available for the upkeep of existing defence services, but, in addition, our reserves were exhausted. As honorable senators are no doubt aware, we are not selfsufficient in this respect, so if, unhappily, war again broke out, and Australia were attacked, we should have to depend very largely upon our reserves. A start was made last year to make good the deficiency. Provision for the continuance of that important, work is contained in the bill now before honorable senators.
I am aware that there are in Australia many people who cavil at this proposed expenditure; but I suggest to honorable senators that if there is one country on earth with peaceful intentions, that country is Australia. We have no intention or desire to interfere with any other nation. All we ask is to be allowed to continue the peaceful development of this country. No matter how strongly some people may be opposed to expenditure on defence, and how firmly convinced they may be that it takes two to make a quarrel, they must realize that circumstances may arise in which it takes only one to make a quarrel - if, for example, one government has peaceful intentions, and the government of another country is aggressive. Ju recent history there have been many instances of peaceful nations having been attacked by other nations. Therefore, it behoves us to make more adequate provision for the defence of Australia against attack.
Another serious phase in connexion with our defence is that all the material for the three arms of the Service - the Navy, the Army and the Air Force - has become obsolete at about the same time. On the naval side the cruisers Sydney and Adelaide are obsolete. The same may be said of our fixed defences. The guns in our forts were installed in 1911, and to-day are out of date. In the air force the trouble is not so much obsolescence of equipment as wastage of material duc to ordinary wear and tear. Thus it happens that capital expenditures for the three arms of the Service synchronizes in this particular period.
When I outlined the Government’s defence programme in September last, I emphasized the necessity for a long-term policy, and urged that the defence of Australia should be treated as a non-party question, pointing out that it would be a waste of money for one government representing a particular political party to lay down a policy if, later, with a change of government, that policy were materially altered or perhaps abandoned.
The Government is now asking for the necessary appropriation to give effect to this policy. We should like to feel that no matter what change takes place as a result of the ensuing elections, the defence programme for Australia will be carried on by the succeeding government. I need only point to the position of our fixed defences to bring home to honorable senators the urgent need for a long-term policy. Obviously it is impossible to provide the whole of the necessary equipment for land defence in one year. The expenditure must necessarily be spread over three or four years before the most vital ports in Australia are placed in something like a reasonable state of defence. It would be aif absolute waste of money if we were to spend a large sum. on this year’s -programme and then, because of a change of government or some other untoward happening, the programme were abandoned next year. I, therefore, hope that whatever may be the ‘result of the coming election we shall be able to ensure, under the provisions of this bill, a coherent and continuous defence programme for Australia. This, I think, is a reasonable request to make, and it is one to which I hope all parties in this Parliament will subscribe.
The first arm of the Government is to restore the defence forces from the weakened condition to which they were reduced by the radical cuts in expenditure in 1930-31 and 1931-32; and having established the permanent organization on n satisfactory maintenance basis, then proceed with the programme, the fulfilment of which will be a step towards those strengths which I outlined in my speech in Sydney last year. This developmental programme has been planned for a period of three years at an estimated cost of £6,200,000. ‘ Of this amount £5,000,000 is to be applied to capital expenditure, and £1,200,000 for an increase of maintenance expenditure consequent upon the capital expenditure referred to. The appropriation of £4,160,000 in this bill is towards that capital expenditure. The maintenance expenditure for 1934-35 is (included in the estimates of expenditure for ordinary services. Of the total amount of £4.160,000 the sum of £2,250,000 is to be applied to naval construction. Practically the whole of this sum is required- for the purchase of a new cruiser to be named H.M.A.S. Sydney, and a second sloop. One sloop is already under construction at Cockatoo Island Dockyard, the money for it having been provided during the last financial year. An amount of £50,000 appears on the Estimates towards the construction of the second sloop.
In pursuance of the Government’s policy to maintain the Royal Australian Navy at an effective strength, and as a fair contribution to Empire naval defence, in April of this year the Government decided to replace H.M.A.S. Brisbane, a cruiser of 5,120 tons, and armed with eight 6-in. guns, and which became over age in 1932, by a new ship of the Leander type, to be named
H.M.A.S. Sydney. The following description of that vessel will be of interest to honorable senators -
Cruisers of this class are of 7,250 tons. The armament consists of eight6-in. guns, four anti-aircraft guns, and six 21-in. torpedo tubes. The speed is32½ knots, and oil fuel is used in the engines. The machinery includes Parsons-geared turbines and four screws. The6-in. guns are in four turrets, and are of an entirely new model. The new cruiser will be the most up-to-date vessel of the kind afloat. Its length will be 564½ feet, the beam 55 ft. 2 in., and the mean draught 16 feet.
The approximate cost of building the vessel in Great Britain will be £1,800,000, and, with about £450,000 added for exchange, the total cost will amount to £2,250,000.
The types of cruisers and the ships we have on the Australian station are not selected haphazard. In this matter the Commonwealth Government is in direct consultation with the Committee of Imperial Defence, and that committee is in consultation with the Admiralty in the selection and stationing of ships, with a view to the service which they would have to perform in time of war. I know that some ill-informed critics, who have discussed the merits of the ships that we have on the Australian station, have endeavoured to show that we have been ill advised in selecting particular types. All I can say on that point is that, if we have been ill advised, it is a poor lookout for the British Empire, because those advising us are responsible for British naval strategy, not merely on the seas surrounding the United Kingdom, but also on the seas in every quarter of the globe. Every ship on the Australian station is there as the result of such advice. The. role which such a squadron willplay if war should eventuate has already been predetermined in the naval strategy of the Empire, and surely those responsible for this plan are qualified to know in what part of the Empire a particular type of ship can perform the greatest service.Some ill-informed persons also speak of the ships as if their role in the defence of the Australian coast is not determined with that object in view. The task of the fast cruisers of the Empire navies is to defend the trade routes, and the tradeand commerce of the Empire, and for such a taskthese ships, and particularly those of the type
I have described, are the most suitable. In the southern hemisphere there are other British squadrons which, in time of war, would act in co-operation, and quite probably would be under one command. The composition of them is determined by the knowledge that on the Australian station there are ships of certain types, speeds, and armament. “With the possible exception of New Zealand, Australia is more vitally interested in the protection of trade routes than is any other portion of the British Empire. Our whole economic life depends upon the seas being kept open. I ask honorable senators to visualize what would happen to this country if our overseas trade were interrupted for even a month.
– We would not starve.
– Unfortunately, during the depression, there were some who came very near to starvation. If the whole of our overseas trade were interrupted, what would be the effect upon our finances, trade and economic life? This country would be practically paralyzed. In these circumstances, it is vital that, in any emergency, the trade routes between Australia and the Mother Country, and other parts of the Empire, should remain open. For that purpose no ships are more valuable than the types that are being placed on the Australian station.
There is another aspect to this question to which I invite the attention of the Senate: In our treaties with foreign countries, in relation to disarmament, the British Empire is regarded as one unit. In the treaty that resulted from the Washington Disarmament Conference, the fleets of the Empire are regarded as one, and the quota of ships allotted to the British Empire includes the Australian squadron. In that treaty a certain life is allocated to each of various classes of ships, and at certain periods the nations which are parties to the treaty are entitled to replace with modern vessels those that become obsolete. H.M.A.S. Brisbane became over age in 1932, and, from that year, was regarded as obsolete; the British Empire was not entitled to replace it in 1932, but is entitled to do so in 1935.
– In acquiring the new ship, is Australia being induced to do something that Great Britain itself cannot do in accordance with the Washington treaty?
– I shall answer that later. Australia was a signatory of the Washington Naval Agreement, under which the battle-cruiser H.M.A.S. Australia was declared to be one of the ships to be disposed of, and as a voluntary act on the part of the Commonwealth was sunk outside Sydney Heads. If we do not replace H.M.A.S. Brisbane in 1935, some other ship of the British quota will have to be replaced, and the British Government will re* place one of its cruisers of thi* type with an up-to-date cruiser of the type I have indicated ; but it will have to scrap a. more modern vessel than H.M.A.S. Brisbane. By retaining that vessel in the Empire’s fleets we would be keeping the more obsolete of two cruisers. If the Commonwealth Government had wished to build the new cruiser in Australia to replace H.M.A.S. Brisbane in 1935 steps to that end should have been taken in 1931 at the latest, because, in view of our experience in the construction of the Brisbane, four or five years at least would be required to construct a vessel of the Le.and.cr type. That was not done, because the necessary money was not available, but to-day we are able to provide the money with which to replace the Brisbane by 1935 with one of the most modern cruisers in existence.
It is also interesting to note that when Mr. Scullin, as Prime Minister, was in England in 1930, he gave the British Admiralty an undertaking that if the financial conditions permitted, H.M.A.S. Brisbane would be replaced in 1935 with an up-to-date cruiser. In these circumstances I feel confident that the Government will have the unanimous support of the Senate in the action which it is taking in this regard.
In regard to the sloops that are to be built in Australia, an order for one has already been placed with the company at present controlling the Cockatoo Island Dockyard. Honorable senators will remember that at a time when the Government was losing £60,000 a year on the dockyard It entered into an agreement with a company to lease it and a grant from the Treasury had to be made to make up the deficiency. At that time 350 men were employed at Cockatoo Island, but on the sloop now being constructed there 150 men are at work. Later the number will be increased to 350. On this one job which the Government has already given to the dockyard, as many men will be employed as were engaged in the whole dockyard when it was controlled by theGovernment. It is proposed to place an order for a second sloop this year, which will provide employment for au additional 350 men, and it is estimated that within six or nine months the number of men working on the sloops will be 650. The total number that will be employed at the dockyard when the two sloops are fully under construction will be 1,000. If, therefore, anything were needed to justify the action which the Government took at the time it handed over the dockyard, those figures amply demonstrate its wisdom.
In addition to this programme, it must be remembered that the Navy to-day lives on oil, and as Australia is not yet selfcontained in the matter of oil fuel, although we have hopes in regard to Newnes, and trust also that some day supplies of flow oil may be struck, we must provide for reserves of fuel in Australia until those hopes are realized. Therefore, towards the capital expenditure on these matters, provision is here made for : “ Reserves of stores, £109,395 “, and “ Oil fuel tanks at Darwin and Sydney, towards cost, £26,810”, or a total of £136,205.
The capital expenditure on the Army for this year will be as follows: - Coast defences £141,500, anti-aircraft defence £28,000, mechanization £3,000, gun ammunition £42,126. technical stores £9,020, or a total of £223,646. That is the amount to be provided from this trust fund, but additional sums are included in the ordinary Estimates. As regards the fixed defences, we are not relying merely “ on the judgment of local experts, but have the benefit of the advice of the Committee of Imperial Defence, as to which, in their opinion, are the most vital points that need adequate coastal defence and also the nature of that defence. In that regard too, we have acted upon the best advice that the British Empire can produce, as to both the points to be defended and the class of the defences there. In the provision now being made, a considerable step will be taken in that direction.
As to the Air Force, for the replacement of damaged and lost planes we are providing in the ordinary Estimates for eighteen Hawker Demons, those being the latest type of aircraft advised by the British Air Ministry and our own Air Force officers. We have also made provision for the purchase of 24 seaplanes of the amphibian Seagull Mark V. type, which is the latest type now being used by Great Britain. In addition, we are in this bill providing for the extension of the Air Force. The provision to which I have just referred will make up the wastage, but by the use of this reserve fund, which we are setting aside, we propose to put into operation the remainder of tho first portion of the plan which Air-Marshal Salmond gave to Australia some years ago. To that end, out of this vote we are providing for the following capital expenditure: Technical equipment, including aircraft engines, motor transport vehicles, ammunition and technical stores £162,400, and for build* ings, works and sites £88,600, making a total of £251,000. This will entail the formation of the following new units: Two general purpose squadrons and one wing head-quarters, with stores depot, aircraft repair section, and engine repair section at Richmond, New South Wales; one general purpose squadron at Laverton, Victoria; coastal reconnaissance flight at Point Cook, Victoria, and Citizen Air Force squadron at Perth, Western Australia. These additions will considerably increase our strength in the air as compared with what has existed hitherto. They will enable us, if necessary, to put the seaplane carrier Albatross in commission again and equip her with modern amphibians.
– Which she has not had hitherto.
– We have not had them before. We had Seagulls, which are to-day obsolete. Another factor provided for in this bill and also partly in last year’s estimate is this : There has been adopted in the British Navy what is known as the catapult contrivance for launching seaplanes from ships, and our cruisers and also the carrier Albatross are being equipped with catapults, so that they will be able to make a much more effective use of their seaplanes than has hitherto been the case. In this regard the opening up of the new air mail service will have an important bearing on the air defence ‘ of Australia. Honorable senators know that there have been some developments at Darwin in connexion with its defence and also in connexion with the air mail service, which will result in making Darwin a very important air port for Australia. These developments include, not only the aerodrome, but the hangar and the repair workshops, which will be an important factor in the air defence of Australia, if any threat should come from the north.
Another factor in our defence, partly covered by this bill - a factor which does not excite quite so much public attention as do other branches of the service, but still is in- itself of almost vital importance -is the development of the manufacture of munitions in Australia. I am glad to announce that Australia can conscientiously say that there are no millionaires within its borders making profits out of the provision of armaments. We have no armament firms whatsoever in Australia. Our armament and munition factories are not owned by private enterprise and therefore the element of profit does not enter into the production of these needs. I have read many sensational stories and allegations of the part that the proprietors of munition works play in promoting war. These can never be told of Australia, because our munition factories are owned, not by private enterprise, but by the people. It is pleasing to know that in this regard Australia is more self-reliant to-day than it ever was before. In this bill, and also in the Estimates, provision is made for a considerable extension of these works. The vote in this bill for capital expenditure in the Munitions Supply branch is £5,000 for machinery and plant, and £15,000 for buildings, works and sites, or a total of £20,000, but a very much larger vote is provided for in the ordinary budget proposals. With the money that is to be made available this year, Ave shall be able to commence the manufacture in Australia of the special class of cordite, the most up to date in existence, used particularly by the Navy. Whereas we depended previously for many of these requisites on importations from overseas, we shall not only be able to supply our own needs, but, pursuant to the co-operation that has taken place in the last twelve months “with the sister dominion of New Zealand, will be able to supply, and, indeed, are supplying, to that dominion a considerable proportion of the munitions required for its local defence. This progressive policy will also be most valuable should any trouble approach from, let me say, anywhere in the vicinity of India, because, by these means, we, in Australia, should be able, in view of the comparatively short distance involved, to provide many munitions if they’ became necessary in that quarter. I was recently furnished with a list showing that no longer than five years ago, the munitions imported for our peace-time requirements largely exceeded what we made in Australia. I am glad to be able to state that Inst year the munitions made in the Commonwealth -far exceeded those which we imported. In a large proportion of these votes, and especially in the case of munitions, and the building up of our reserves, we are giving employment locally, and also making ourselves self-contained, so that if “we should be for a period cut off from other portions of the Empire during a war, we should be better able to defend ourselves. As I have received resolutions from people who seem to think that this expenditure could be better made in giving employment in other directions, I wish to emphasize that the employment given by it is no mean item. I have already stated that work is to be given at the Cockatoo Island Dockyard to as many as 750 men, all of whom will be earning substantial rates of pay. In addition, we are this year recruiting for the Navy, in order to man the new cruiser in August, 1935, just under 700 men. These are adults, not boys, who will enter the service and to that extent relieve the labour market. It is also gratifying to know that whereas, before the war, 75 per cent, of the personnel of the Australian Navy were officers and men of the British Navy, to-day 98 per cent, of the personnel, both officers and men, are Australians, who entered the service and received their naval education and training in the Commonwealth. We are progressing towards the ideal of self-reliance. It cannot be said that our defence preparations savour of militarism, in any degree whatsoever. Our system of defence is based entirely on the belief that the citizens of this country should be trained to defend themselves and their homes. Our permanent army consists of a small number of men whose sole duty is the training of officers and rank and file in their military duties. If war came, our army would consist of citizen forces, officered by citizens trained by this small cadre of permanent officers. The position of the navy is different; it must be prepared to act on short notice. We must have a naval reserve of Australian citizens capable of manning any vessel which is in reserve.
I have taken up more time than I intended, in an endeavour to make the position clear to honorable senators, so that they, and. indeed the country generally, may realize that the proposals of the Government are a substantial step towards the defence of Australia. I assure the Senate that these proposals contain nothing that can be dispensed with; they are the minimum which considerations of national safety permit. In my opinion anything less would be evidence of foolishness. Unless in peace we are prepared to train men and provide ships, materials and arms to defend this vast and. rich country we cannot hope to hold it.
– Australia has an untrained population.
– That is so. Some persons in the community think that- we could, at short notice, mobilize the men of Australia and make soldiers of them ; but their contention is not borne out by the experience of the last war. Notwithstanding all the enthusiasm with which the youth of Australia rallied to the colours and threw themselves into the work of training; despite their natural ability which impressed observers in other countries many months elapsed before they could take the field as trained soldiers. We have no guarantee that, in the event of another war, an opportunity would be given to us to train our citizens. We may improvise an army, but we cannot improvise a navy or an air force, or at short notice provide docks or the equipment necessary for our defence. I ask the Senate to support the bill without regard to party considerations.
.- The Leader of tho Government (Senator Sir George Pearce) has made an eloquent speech in support of the proposals of the Government for the defence of Australia. I have no desire to offer factious opposition to this bill, and, therefore, I shall not seek tho adjournment of the debate. If a country is made a desirable place for men to live in, there will be no hesitation on the part of its citizens in rallying to defend it.
– By making a country a desirable place to live in, do we not make it more attractive to an enemy?
– A country which is not worth living in, is not worth fighting for. If the leaders of a nation are wise they will make conditions such that, at the first approach of danger, its citizens will rally te defend their liberty.
The only feature of the bill to which I object is the proposal to purchase a cruiser. Each of the three arms of defence - the navy, the army, and the air force - thinks that it is the most important in the defence of any country. The army believes that it is indispensable; the navy recalls the days of Nelson and Drake, and argues that, as the navy saved England in the past, so to-day it is the nation’s greatest bulwark; the air force claims that future wars will be fought in the air, and that only by providing adequate air equipment can the safety of the nation be assured. In 1925 when the Bruce-Page Government decided to purchase two cruisers of 10,000 tons each, I opposed tho proposal, because I did not think that the money would be expended in a way which would provide the best means of defending Australia. I had previously had a conversation with an air force expert, in which I asked him what would happen if a battleship and a number- of aeroplanes were opposedHe said that, given six aeroplanes with two men in each, he would sink the biggest battleship afloat. He expected that in the conflict two aeroplanes and four men would be lost. His argument appealed to me, and I opposed the spending of £5,000,000 to purchase two cruisers. I believed then, as I believe now, that the money would have been better spent in equipping an up-to-date air force, so that no ship would venture near our shores. I do not believe that it is necessary to purchase the cruiser which the Government proposes to obtain. The BrucePage Government said that one of the two cruisers then thought necessary would be built in England, but that no decision regarding the building of the second vessel would be arrived at until after Parliament had been consulted. Notwithstanding that undertaking, both cruisers were ordered from England before Parliament had an opportunity to discuss the matter. At a cost £5,000,000 to Australia, the two cruisers were obtained, but their condition wai such that no one knows what would hav, happened had they met an enemy battleship.
– The vessels are thoroughly efficient to-day.
– It is difficult to say what would happen if they had to undertake duty under active service conditions; so far they have been kept, for the most part, in calm water. In acting without the authority of Parliament, the present Government i3 following tha example of the Bruce-Page Government. Already it has committed Australia to the purchase of a new cruiser. I object to Parliament being disregarded in this way. We on this side of the chamber disagree with many items of the Government’s policy; but we are not opposed to the taking of adequate measures to protect this country. We consider, however that, as the representatives of a large section of the people, we should be consulted in these matters.
Yesterday the Postmaster-General (Mr. Parkhill) said that considerations of u rgency and cost had decided the Government to purchase the cruiser overseas. Let us examine the claim of urgency. Every citizen who reads bis newspaper knows that a state of tension exists in Europe; but Australia is an isolated country.
– Now that it is possible to travel to England in ten days, Australia’s isolation is rapidly disappearing.
– That is progress and we cannot escape such developments. When our fathers and mothers came to Australia the voyage occupied six months, and many of them were lucky to get here at all. We are the children of sturdy and courageous pioneers, and all of us must feel eager to preserve the liberties they won for us. I think we can depend upon the progeny of such forebears to protect the country they helped to settle. But what is the urgent need for acquiring a battleship ? The vessel which is to be brought from England will have taken three years to construct, and has already been on the stocks for two years. Even if Australia did require this vessel urgently, I emphasize that Australian workmen, backed by the Australian nation, would be game enough to try to build a bigger and better battleship than it would be possible for England to send to us. But there is no urgent need for this battleship. The time is approaching when Australians will have so developed the resources of this country that its workmen will be capable of building anything, including a battleship. We have already built a battleship and we can do it again.
– What battleship did we build? We built the cruiser Brisbane.
– At any rate Australia built me, and I am not a bad battleship. I do not see the necessity for Australia to spend about £3,000,000 on the purchase of a vessel that is to be built in another country. The work will employ people who are our kinsmen certainly; I do not necessarily object to that, but when we have among our present hungry population unemployed workmen well equipped in technical knowledge; when we have the dockyards and the country can supply the necessary materials for the building of the vessel, the sending of money abroad is indefensible. If the Government challenged the workmen of this country to build this warship they would build it in half the time that will be required to bring the vessel from England. I, and members on this side of the chamber, will certainly not vote for the proposed purchase. The Postmaster-General (Mr. Parkhill), when discussing this matter in the House of Representatives, said that the stationing of this vessel in Australian waters was part of a scheme for Empire defence, and that its urgency arose out of that. This evening the Minister for Defence said that one of the purposes of Empire defence was to protect trade routes. Certainly the protection of trade routes is very vital to Great Britain. This was one of the reasons why Great Britain built its navy to such proportions that prior to 1914 it was equal to the next two most powerful navies. That naval superiority was necessitated by the fact that Britain was an isolated country, which, could not feed itself and so was driven to take measures to keep trade routes open for the carriage of foodstuffs from its colonies and dominions, and other parts of the world. Thus it was Britain’s particular responsibility to protect the trade routes. But is that aspect of the matter of so much importance to Australia? Would it matter to Australia if the trade routes of the world were not open? We could not be starved. So far as I can see any interruption of the trade routes would, affect this country only to the extent that we would not be able to pay our debts to the landlord, as we do now with revenue received for our exports. In a local sense it is the landlord’s job to keep the footpath open to facilitate his collection of the rent. So we say to the landlord of this nation, “ If you want to gather the rent from this country it is your job to keep the road clear.” Only the United Kingdom would be embarrassed if we could not send our produce abroad to pay our debts. The Minister for Defence stated that the new cruiser is to be a unit in the system of Empire defence. If that is so, it is immaterial whether the vessel belongs to Australia or to Great Britain. In either case the vessel will be part of the defence of the Empire. Australia did not place the order for the cruiser to be built;
Great Britain must have been constructing it to replace another cruiser. The Mother Country, like other countries, is embarrassed, and involved in the European embroglio. In protecting itself it has entered into agreements with other countries for the limitation of armaments by the restriction of naval building to certain quotas and classes of ships. Now, apparently, something has gone wrong. Great Britain has reached the danger limit, and has decided to sell to Australia a cruiser of the Leander type, so that it may be able to build a new one without exceeding its treaty obligations. I admit gladly and earnestly that Great Britain has done more than any other country to secure the peace of the world. And I am glad that it has done so. We are continually being reminded of what the Mother Country has done for Australia; but, as I said a few days ago, the boot is on the other foot. Australia has been doing a great deal for the Mother Country. If Great Britain wanted to evade its compact with other nations it would be a more graceful action on its part if it treated Australia as a sturdy father would treat a sturdy son, and said “.Tack, you had better take this job on: I will give you the ships with which to do it.” In 1925 the cost of building a 10,000 ton cruiser wa3 estimated to be £2.!879,000. Since then the cost of living index figure has dropped from 1.844 to 1.459. The cost of living makes a tremendous difference to the cost of building a warship; on such work a large number of men is employed, and the cost of living regulates the wages. It has been stated that, if this vessel were built in Australia, approximately £1,000,000 only would be expended here on material and labour. If with that money we could employ 1,000 men on this work, I think it would be well worth our while to adopt that course, considering that there are 300,000 men out of work in Australia to-day, and that many of them are skilled tradesmen. In addition, their sons are leaving school, and seekiii: any job that will .provide them with a living. Why should we send money out of this country for anything? Even at the risk that if Australian artisans were given this work they might build a ship that would sink as soon as it left
Sydney Harbour, this work should be undertaken locally. I oppose strongly any proposal that such a large sum of money as £3,000,000 should be sent out of this country to build a ship that can be built at the Cockatoo Island Dockyard. The Government expended a lot of money in developing and equipping that establishment, and we have the opinion of experts that our workers are competent to build ships. I am aware of the agreement the Government has made with the company which recently took over these docks, and I think that the company, with a guarantee of work front the Government to the value of £40,000 annually, is “ on a good wicket.” Notwithstanding my love for Great Britain, I resent this purchase. It is time that Australian workmen were given the opportunity to show what they can accomplish in this -field of industry, and it is for this Parliament to provide that opportunity. I disagree entirely with the suggestion inferentially contained in this proposal that Australia has not the workmen capable of building a warship. In 1926 the then Prime Minister, Mr. Bruce, speaking at Glasgow, said -
I give you fair warning that Australia is going ahead at such a pace that she will soon build all her own vessels. It is essential from a defence point of view that we should build our own.
That statement was reported in the Melbourne Herald of the 25th November, 1926. Speaking in the House of Representatives on the 27th March, 1925, Mr. Bruce said this -
The Government is very anxious that at least one cruiser should be built in Australia. Many reasons for this must he immediately obvious to any one. One is that the Government would naturally be desirous of promoting industry in Australia. Another is that unless it is to come about that defence will not be required wu should in future years have to make provision for the construction of further units of the- Australian Navy. To do that it will be essential that we should have a first-class dockyard and first-class staff in Australia, capable of doing the work. Apart from this we have the fact that from time to time w» should inevitably require to repair our ship*. We should not be in a position to do that until we have actually built in the Commonwealth ships of the class we require.
I commend Mr. Bruce for the wisdom which he displayed and the sentiment* expressed on that occasion. I agree with him that if we are to defend this country, weshould he in a position to supply all our own equipment. We might very well tell the “ old man “ 12,000 miles across the sea that we want to build some of these vessels ourselves. 1 view this matter not as a soldier, a sailor, or an airman, but as a citizen of this country who is proud of the achievements of his fellow Australians. Iamfirmly convinced that the day will never come when it will be possible for an aggressor to invade Australia successfully. I agree entirely with Commander Wackett whose seaplane design attracted somuch attention a few years ago, that the future of Australia’s defence is in the air. Commander Wackett assured mo that with sis of his Widgeons he would be able to sink the greatest battleship that was ever built.
– That is unsound.
– I can readily understand that a military man should have a special pride in his arm of the service, and be unable to appreciate the importance of, say, the naval arm or the air force. Some permanent naval men, I believe, are under the impression that the mere landsman is unable even to stagger home properly. My honest opinion is that we should not depend upon squadrons of soldiers alone for the defence of Australia. Science, as applied to warfare, has made that impossible. A military aeroplane, supplied with a few poison bombs, can decimate an army. I t would be wise to build in Australia, all the naval vessels we require, hut my view is that small ships such as the one now under construction at Cockatoo Island Dockyard are sufficient to police our waters. With an efficient air force I doubt that any battleship could come within 300 miles of the Australian coast without being sunk.
SenatorMacDONALD (Queensland) [9.21]. - I agree with Senator Barnes that it is necessary to take measures for the defence of Australia, and I am in accord with some of the remarks of the right honorable the Leader of the Senate (Senator Pearce). As an integral part of the Empire. Australia should be prepared to hear a reasonable proportion of the expenditure required for that defence, and allow the experts to determine the means to be employed, though.I believe that the major portion of the ex penditure on defence should be confined to Australia. The Minister for Defence (Senator Pearce) mentioned that Australia was now exporting munitions to New Zealand. It is only necessary to pursue that policy a little further to reach the stage at which we should be building all the naval vessels required, as well as naval and military aeroplanes for the defence of Australia.
Although one would like to think that, in this 20th century, war between the white races is impossible, we remember that war did take place some years ago, and we must face the fact that, in all probability, it will occur again. Therefore, repugnant as expenditure of this nature may be to the majority of the citizens of Australia, it is our duty to put the defence of this country on an organized basis. Towards this end we should, as far as possible, manufacture all the necessary equipment, and not, as in the past, depend so much upon the Mother Country. I agree with the sentiments expressed by Mr. Bruce some years ago, that we should endeavour to build in Australia warships required for the defence of this country. Naval construction is not such a formidable proposition as some people believe it to be. The cruiser which the Government is purchasing is, I think, of 7,250 tons. A vessel of that size could be constructed at Cockatoo Island Dockyard, and the money kept in this country. Certain of the equipment would, of course, have to be imported. I was surprised to hear the Minister say that the main armament of the new cruiser will be only 6-in. guns. I doubt that guns of that calibre will be an effective protection, because we all remember that, during the Great War, the German cruisers Scharnhorst and Gneisenau, armed with 8-in. guns, wrought havoc off the coast of South America with the Good Hope and other British cruisers of the older type, but in their turn were destroyed by British battle cruisers of the Invincible and the Indomitable class with 12-in. guns, which I saw at Spithead twenty years ago. It would, therefore, appear that the new Australian cruiser, with a main armament of 6-in. guns, will not prove a very formidable opponent to modern war vessels, which might be sent to harass Australian shipping. As it was known that the Brisbane was becoming obsolete, action should have been taken earlier to provide a more up-to-date cruiser for Australian defence. Certainly the proposal should have been brought before Parliament before the Government committed itself to the expenditure of a large sum of money for the purchase of a vessel in Great Britain. Apparently there has been a grave oversight on the part of some one in authority. Honorable senators on this side of the chamber cannot be held responsible. I understand that the new cruiser was laiddown about two years ago during the term of the present Government. My principal objection to this bill is that the vessel was purchased wi thout the consent of Parliament, and that arrangements should have been made for its construction in Australia.
I believe that a stronger air force is essential for the effective defence of Australia. Some experts hold that an effective air force will be the deciding factor in future wars; but my sympathies are with the land forces, and I should not be surprised if the final issue in future wars rests with the land armies of opposing forces as in past centuries.
– How much will the cruiser cost?
– I understand that the cost is estimated at £3,000,000. I repeat that it should be possible to build a cruiser of that type in Australia, and that, in developing our defence policy, we should endeavour to manufacture all the equipment and munitions required. Although the Minister for Defence stressed the point that our trade routes and those of the Empire generally must be kept open, there is the possibility that, as the result of some terrible disaster, we may be completely isolated from Great Britain and other parts of the world and we should be as ready as possible to defend ourselves.
.- The statement of the Minister for Defence (Senator Pearce), based as it was upon his personal knowledge of the subject, was so comprehen sive, clear and convincing, that there does not appear to be any need to elaborate the subject, or to criticize any of the points he raised. The right honorable gentleman referred to the fact that the Government’s defence proposals embrace the three arms of defence, as is necessary since knowledge and experience have proved that no country can be defended by only one arm of the service. In listening to the Leader of the Opposition (Senator Barnes) and his account of a conversation he had with an airman, it was not difficult to understand how ideas originate, and to realize that they usually have their genesis in the fact that a man has pride in the service of which he is a member. In primeval days, when personal contact became inevitable, the weaker sought protection by arming himself with a sling while his opponent assumed suitable armour to protect him from the assault of his rival. The same principle is being adopted to-day,and battleships with the protection they enjoy are equal to the onslaughts of modern aircraft.
The. Minister mentioned that H.M.A.S. Brisbane will be obsolete in 1935, and as she must be replaced next year by a modern ship, it is impossible to build such a vessel in Australia. I am strongly in favour of units of the Australian fleet being built in Australia whenever practicable, but unfortunately we have not reached the stage when that can be done economically.
The Minister mentioned that the primary function of H.M.A.S. Sydney will be to protect our trade routes, that her speed will be 32 knots, and that she will carry eight6-in. guns. These are light guns of high velocity and of extreme range, and are particularly suitable for vessels travelling at a high speed. The lighter guns are often more effective under certain conditions than are those of a heavier type. I have heard the Leader of the Opposition deliver a number or interesting speeches in this chamber, but I have never known him to display less enthusiasm for his subject than he did to-night, possibly because he was endeavouring to express opinions in which he did not honestly believe. The honorable senator knows that adequate defence of Australia is essential, and that if one portion of the Empire fails to provide a proper defence system, Empire defence becomes ineffective.
– The subject of defence has been discussed in this chamber so often that it is not my intention to labour it to-night. On this occasion I believe that the Government is submitting additional defence proposals on the eve of an election in an endeavour to stampede the people. The members of the Labour party do not apologize for the attitude they adopt towards defence. As was stated by the Leader of the Opposition (Senator Barnes), one ot the main planks of the Labour party’s pintform is the adequate defence of Australia. I presume that, the order for a vessel costing £3,000,000 was placed in Great Britain by the High Commissioner in congenial company and in the most attractive surroundings, in an endeavour to assist British workmen regardless of the strong claims of the unemployed in Australia. Some time ago, Mr. Bruce conducted negotiations with the British Government, which resulted in orders for ships required in Australia being placed with British shipbuilders at a time when the slipways on the Clyde were empty and the British people were on the verge of an industrial revolution. Although certain vessels are becoming obsolete, suitable cruisers could be constructed at Cockatoo Island Dockyard. Senator Grant will endeavour to justify before the Tasmanian electors the vote which he proposes to give on this bill, but I know that there are many in that State who would prefer to see £3,000,000 devoted to industrial developments in Australia. When I commenced to learn my trade in 1913 in what were then the State workshops adjacent to Balmain, on Sydney Harbour, large contracts were accepted by those works from the Sydney Harbour Trust and from other similar undertakings. There were also State works on what was then known as Biloela. Under the name of Cockatoo Island that establishment was transferred by the State to the Commonwealth Government, whose property it became. Australia at that time was embarking on a comprehensive policy of defence, and the then
Minister for Defence (Senator Pearce) came from Melbourne and met the men at a mass meeting at what was known as the 25-ton steam crane on the island. He made a very fine oration to them. I heard it, because I was one of them. His speech was indeed a classic, because at that time he was younger and more vigorous; he had a punch, and he was a member of an energetic fighting party - the Australian Labour party. He pointed out the ideals of the Australian nation, stressed what Australian workmen could do, and wished the men Godspeed in their mission. The first unit constructed at Cockatoo Island was the Warrego, a Baver type of torpedo destroyer. She came out in cases and was assembled at the island, and her launching was made the occasion for a- great festival. It marked an epoch in Australian shipbuilding, and the progress of the handicrafts connected with it. The gentleman who at that time enunciated the principles of naval shipbuilding in Australia was no other than the present Leader of the Senate. No doubt he recollects the occasion when he stood on top of the 25-ton steam crane in 1913. The men employed there next built the Parramatta, and then went on to bigger jobs, turning out the cruisers Brisbane and Adelaide in a very efficient manner. If those vessels and their auxiliaries, the aeroplane carrier Albatross, and merchant vessels, such as the Fordsdale and the Ferndale, which became merchant cruisers, could be built by Australian workmen, why in the name of commonsense cannot this 7,250-ton cruiser be built in Australia? The Minister for Defence (Senator Pearce) has stated that it is required straight away, but the Government will not receive it at once. We know that in the British shipbuilding yards, which were the cradle of an industry that has now spread all over the world, it takes two and three years to build cruisers of this kind. The Sydney Morning Herald definitely stated that the new cruiser was one of the stock vessels, that her keel was not laid down to the order of the Commonwealth Government, but that she was already under construction. She is not nearly finished, yet the Government rushes in to spend £3,000,000 on her purchase.
The platform and objective of the Australian Labour party lays it down that naval and military expenditure must be allocated from direct taxation. Consequently the whole of the money required for this purpose will have to be found by the people of Australia. Appeals are constantly being made by bishops and clergymen of all denominations, and public men, including shire presidents and mayors of suburban councils, for the provision of work for the idle youth of Australia. A well-known distillery firm, whose head-quarters are in Adelaide, publishes a feature “ stunt “ in a leading newspaper, covering many subjects of topical importance. I read one a few weeks ago entitled “ The Call of South “. It asked what Australia was going to do for the youth of the nation. Only a few short months ago the Prime Minister (Mr. Lyons) met a deputation of lads between the ages of 15 and 23 who had never worked. It represented 1,500 young men in one centre of the northern coal-fields alone, and it met the right honorable gentleman at Kurri Kurri. Similar critical conditions exist throughout all the other States. Business men, big and small, including manufacturers, who are capable of tendering for the supply of the machinery and other essentials for the construction of a cruiser, are given no opportunity to undertake this important work, with the result that the young men of the nation are still compelled to stand idle at street corners. It may be argued that Australia is not in a position to build this vessel, but that, excuse is mere “ eye-wash “. The Minister for Defence admitted in reply to a question which I placed a few weeks ago on the notice-paper, that during a period of a little over twelve months, the present lessees of the vast establishment at Cockatoo Island paid only £1,300 in rent for the use of machinery and plant, which cost Australia nearly £2,000,000. The Government no doubt will claim that it is giving work to the shipbuilders, artisans, and skilled labourers of Sydney in the construction of a sloop and three auxiliary vessels, but that does not alter the fact that £3,000,000 has to be found out of direct taxation to pay for the building of a cruiser on the other side of the world, notwithstanding the fact that the competent tradesmen and draftsmen of Australia successfully built the Brisbane and the Adelaide, which worthily played their parts during the late world war. 1 appeal to the Government to recognize that it is wrong both in principle and in practice to allocate such a huge sum for the performance of this work overseas. Major Elliott, a member of the Ramsay MacDonald Government, is preaching in and out of season in the House of Commons the doctrine of economic nationalism for Great Britain. How can tho Australian Government justify to the. primary producers of Australia, thu taking out of circulation of £3,000,000 raised by direct taxation in Australia? The farmers as well as the Government know well that the best market for the products of any nation is its home market. There are to-day in Australia 500,000 men and women living in the shadows of dole relief. They may be regarded as practically unemployed because they have to work for sustenance. No right thinking man feels that he is holding his proper place as a unit in the nation unless he is working a,t his calling for full award rates and conditions. It is useless for Ministers to quote the figures of the Commonwealth and State Statisticians to prove that employment is on the increase. No doubt they are true as the statisticians see them; but they are wrong as we see them. We are in a better position than Ministers of the Crown or officials who compile statistics to know the facts, because it is the section of the community we represent in this chamber that is to-day suffering the awful penalties of unemployment. The expenditure in England of £3,000.000 which should be circulated in Australia will have a serious effect on primary production in this country. Money which, if paid to Australian workmen, would be expended by them in the purchase of fruit from Tasmania, wine from South Australia, sugar from Queensland, boots and shoes from Victoria, and in Australian products generally, will now circulate to the advantage of primary producers and manufacturers on the other side of the world. In asking the Senate to vote to send £3,000,000 overseas for the purchase of a cruiser the Government is asking that the door be bolted and barred against Australian producers. Why not ensure this country’s safety by manufacturing in Australia aeroplanes which would be of more value as a weapon of defence than any cruiser could possibly be ? God forbid that Australia should ever be embroiled in another war, but should that catastrophe overtake us, does any honorable senator imagine that our safety would be assured because of our possession of a 7, 250-ton cruiser? The £3,000,000 would be expended to far greater advantage in the manufacture of aircraft. The Minister for Defence (Senator Pearce) spoke of Australia’s danger in the event of war. I remind him of the vulnerability of the steel works at Port Kembla and Newcastle. These establishments are situated practically on the coast, and are not immune from attack by naval vessels whose guns have a range of over 25 miles. Britain showed wisdom when it established its great steel works and munition factories inland, where there is at least a fighting chance of their being successfully defended by fleets of aeroplanes. European countries, such as France, Austria, Italy, and even Turkey, have displayed similar caution. How can one cruiser patrol the thousands of miles of Australia’s coastline, to say nothing of the trade routes between this and other countries? The Leader of the Senate has the audacity to ask Labour senators to agree to send £3,000,000 out of this country when by expending the money here employment would be provided for Australian workmen. At Cockatoo Island there is the necessary equipment for the manufacture of the cruiser,” as well as capable shipwrights, electricians, moulders, plumbers, carpenters, and other artisans, who have already displayed their skill in the construction of the Adelaide and the Brisbane. The Government having the numbers, will no doubt go ahead with iti proposals; but I assure it that a higher authority than this Parliament is awaiting an opportunity to pass judgment on it. Australians pride themselves that nothing necessary for the development of their country need be imported. In our forests and fields, our mines and our factories, there are the materials and the men to build as many modern cruisers as we require. I strongly oppose the proposal to send out of this country money which should be expended here.
Senator RAE (New South Wales) [10.9 j. - I shall not appeal to the Government to change its mind in regard to these proposals, because I know that it would be useless to do so. Instead, I, and those who think as I do, will appeal to the electors who, after all, make and unmake governments. It is true that the platform of the Labour party provides for the adequate defence of Australia against invasion; but I feel impelled to ask myself, first, whether Australia needs a cruiser, and, secondly, whether the need is urgent. If the urgency alleged by the Minister for Defence is due to the disturbed state of Europe, I remind him that, ever since the close of the world war, Europe has been in a state of unrest. The terms of the treaty forced on enemy nations, and the artificial subdivision of certain European States, have intensified the resentment and racial antagonisms which existed previously. If, however, the urgency is due to causes which have had their culmination in resent events in Europe, it is possible that hostilities may break out at any moment. In that case we would have been wiser had we purchased a completed vessel, so that it would have been available for our defence when needed. If the urgency is only relative, there is no need to do more than set to work immediately to establish in Australia the means of defending ourselves. If a vessel such as that proposed to be bought in England is essential to the safety of Australia, it should be built here. Senator Barnes spoke truly when he said that the first line of a nation’s defence is a country worth living in. From a defence point of view it is not a sane policy to have thousands of people in enforced idleness.
– Let us build a dozen battleships, and give all the unemployed a job !
– We shall not dispose of our unemployment problem by sending money overseas. I cannot see that Australia is in imminent danger. Even in the great war, Australia was in danger only because its leaders chose to enter the war, having been persuaded by the press that otherwise Australian citizens would be enslaved. The consequences of that war have been disastrous to the world; yet European nations, including Britain, are now engaged in another armaments race. There is, however, no reason why Australia should follow their example. The quarrels and territorial ambitions of European nations are no concern of ours ; our sole duty in matters of defence is to protect ourselves from invasion. Until that danger is manifested, we should take no other steps for the provision of defence than we have done as part of the ordinary programme in recent years. The demand at present for this orgy of expenditure on defence is due to the hysteria generated a few months ago by the press and by public men in search of a new means of publicity. To me it appears that the bounden duty of Australia to herself, and the world in general, is to keep out of the old world’s quarrels, and to steer clear of the disagreements between the nations in Europe, which is the stormcentre of the world. We appear to be ambitious to become an imperial power ourselves, and to take part in the business of other nations, thus inviting reprisals. In my opinion, we could justifiably make neutrality treaties and peace pacts with other nations, and by those means keep clear of any war of aggression, and confine ourselves to defending Australia against attack. Practically every male citizen will be prepared to do his share to defend his country against any wilful or deliberate aggression on the part of any foreign nation. I regard the proposal now before us as nothing less than a political crime, which is being perpetrated upon the people of this country. I cannot describe otherwise the Government’s action in contracting to spend this money on the other side of the world, when we have available numbers of artisans skilled in every class of labour who have already demonstrated their capacity by the construction of warships of considerable size in a manner that elicited favorable comment from competent judges overseas. It has already been demonstrated that we have the men to build ships, whether they be required for the merchant service or for war purposes, and, should war threaten, we would have ample time to carry out defence measures.
– You do not want any defence ?
– I say we do not want to establish any means of defence other than those for which we already have the material in this country.
– I understood the honorable senator to say that he wants no defence.
– I am not an advocate of peace at any price. I appreciate the fact that circumstances can arise under which an appeal to armed force becomes necessary; but the only justification for that is a foreign invasion. I agree with the statement recently made by a distinguished statesmen, when he said that his country did not wantto take a foot of territory from any other country, but would resist to the last ditch any attempt to steal a foot of its territory on the part of any other country. I would sanction and advocate any means of defence that would be rendered necessary by an attempted invasion of this country.
– The honorable senator believes in locking the stable door after the horse has gone.
– I do not. I have already said that we could make nonaggression pacts with othercountries. If all nations would come to an agreement that they would fight only when invaded, there would be no war.
– None of them would agree to that.
– We are in the most favorable position of any section of the white race to-day to decline to go to war for any reason except to withstand an attempted invasion to deprive us of our national rights. I admit the logic of the argument that there may not be any clear line of demarcation between defence and aggression; but, as we are an isolated country, thousands of miles from any other country, we are in a position to foresee when war is threatening. For the present, we should provide ourselves with the raw material of defence, by qualifying ourselves to construct whatever is necessary to defend us from attack, as we are doing in the manufacture of up-to-date cordite more than ample to supply the needs of Australia. We should supply our own materials for defence, and keep them in reserve. In thi3 way we can conserve the skill of our artisans, who at present are being driven to other countries in search of work. In practically every country one can find skilled- Australians occupying positions they could not have hoped to obtain “in their own country, because of the imperialistic notion held here that kinship with Great Britain justifies us in getting everything done there, sacrificing our own people in order to feed others distantly related to us. I dissent altogether from that view. The principle under which this Government is working is repugnant to Australian opinion. The Government is abusing the position it gained by breaking the promise made at the last election, in order to embark on a course of action that does not. meet with the approval of the average citizen. The people of Australia are desirous of having adequate means of defence, but they are still more desirous that those means should be built up in the Commonwealth ; they do not approve of purchasing a ship overseas on the grounds of urgency, and overlooking the fact that there is an equally urgent need to provide employment for our own people.
– lt is always interesting to listen to Senator Bae. His speech is invariably clear and logical, and it is easy to follow his arguments, whether one agrees with them, or not. I do not agree with him on the subject of defence. For instance, he said that many Australians occupy positions overseaswhich they would not have had the chance of gaining in their own country, because of the failure of the Government to utilize their skill when opportunities offer. One might reply that many people not born in Australia are occupying high positions here, and that the Governments of their native lands failed to provide sufficient opportunities in industry for the utilization of their services. Such men have included Mr. W. M. Hughes, Mr. Andrew Fisher, Sir George Reid, and Sir Joseph Cook, each of whom became Prime Minister of Australia, and it could not reasonably be argued that they would all have achieved similar eminence in the countries of their birth. The conditions which have forced Australians to go abroad in search of high position have operated equally in the other direction to induce people from other countries to come here. This will be found to be a tendency in business generally. We find that in engineering and commercial circles not only Britishers, but also foreigners, who have migrated to these shores have attained the highest distinction without influence and through sheer intelligence. This is the result of freetrade in brains. I do not see anything wrong in an Australian of ability going abroad to make his mark in his particular calling. Of course, his departure is a loss to his native land.
– Especially when he had to go abroad because of the want of a job in this country.
– So far as general opportunities in industry are concerned, Australia is a relatively small country. We cannot afford to pay for skilled services what the older and financially stronger countries can pay, and it is only natural that able men should aspire to greater conquests in the outside world. A medical man, after he has made his name in this country, will want to win additional laurels in such medical centres as London, Vienna and Berlin. That is both natural and desirable.
Senator Rae said that this Government is indulging in a perfect orgy of expenditure on defence. I do not suggest any ill-faith on their part, but the remarks of some honorable senators have been hopelessly wide of the truth. The summary of expenditure involved in the budget this year shows that war and repatriation services and invalid and oldage pensions are costing this country £31,000.000 per annum, whereas on defence we are expending a little over £4,000,000. Docs that appear to Senator Rae to be a fair apportionment; that we should spend, as it were, £3.1,000,000 on the past, and £4,000,000 on the future. Is that carrying out our obligations to future generations?
– The £31,000,000 is largely the result of our participation in the last war.
– I ask the honorable senator again if, taking the broadest view, it is sound policy to spend £31,000,000 this year on what practically refers to the past and only £4,000,000 on the future?
– It is quite a fair distribution when we consider the amount we are spending in interest on loans that have been squandered.
– I consider that the vote for defence is disproportionately low, and quite inadequate, having regard to what we are expending on social services. The honorable senator also said that any one in Australia would be prepared to do his share in defending this country against invasion. I do not doubt that, but how is any one to be able to do his share unless he has been provided with the means to do it - unless he has been trained to shoot and drill and has assimilated some idea of discipline? If an invader threatened our land, what would be the use of a volunteer coming forward and saying, “ I have never had any training; compulsory training was done away with at about the time when I came of age for training; I have never lived in the country, and thus never had an opportunity to learn to shoot; and I do not care for discipline in any case ; but I am anxious to do my share for my country “ ? It would be of no more use for us, as someone once said in the House of Representatives, than if the honorable member for Bourke went out to defend this country with a soap box in his hand. It is idle to talk about defending Australia to tho !a3t ditch, because, I put it to honorable senators opposite, with us the last ditch is the first ditch.
– “Who defended Australia in the last war except the men who took the soap boxes?
– I remind the honorable gentleman that, leaving the soap boxes behind them, they went out to fight with rifles in their hands.
I should again like to pay a tribute to the old Labour party, of which the right honorable the Minister for Defence (Senator Pearce) was a prominent member many years ago, for the part which it played in the building up of the defence force of this country by instituting the system of compulsory miltary training for the youths of Australia. Every historian I have read admits that the establishment of the Australian Military Force on . that basis was of the greatest value, not only to the Commonwealth, but also to the Empire during the war years. This tribute is applied, not merely to the men in the ranks, but to the officers who were trained at Duntroon, and it so happened that they were just ready for service when war broke out. It is fitting that I should say a word or two on this subject because the Minister for Defence moved the second reading of this bill to-night. Probably no man living has done more for the defence of Australia than the right honorable gentleman. He held the portfolio of Minister for Defence during the whole period of the war. No one can deny that the old Labour party recognized that acceptance of the privileges which this country affords to its citizens also implied the duty to be ready to fight for it when the need arose. I am glad to be able to say a word or two in support of the excellent speech which the right honorable gentleman delivered to-night, although, as on other occasions, I did not find myself in complete agreement with everything that he said. I admit, however, that he is in a much better position that I am to state the facts about the defence of Australia. The right honorable senator expressed the hope that the Government’s proposals would be treated in a non-party spirit. I regret that that is not possible. He said he hoped that this defence expenditure would be spread over a period of about five years, and that all parties would agree to carry out the programme. That also I say is impossible because, as at present constituted, the Labour party has turned its back on the defence of Australia. The only form of defence which it is prepared to concede is that which will give work to artisans in Australia.
– That statement is untrue. The Labour party is not against the defence of Australia.
– Some branches of the Labour party at least are against this policy for the defence of Australia.
– SenatorRae is not opposed to defence.
– It may interest honorable senators to know what is the defence policy of the Labour party. I propose to state it, by quoting from an interesting document which has not before been mentioned in this debate. I refer to the resolutions of the conference of the Victorian Labour party, held in Melbourne on the 13th January, 1934. They are in the following terms: -
That the Australian Labour party forbids any Australian Government to participate in any war -
Against the Soviet Union.
That apparently is the really outstanding feature of the resolutions agreed to at that conference. Australia, we are told, must not make war against the Soviet Union, not indeed that with our 80 odd obsolete aeroplanes, or with our present naval forces, we are likely to engage the Soviet Union, in either the East or theWest.
– Why not read the whole of the resolutions and make comment afterwards?
– Perhaps it would be better if I accepted the honorable senator’s suggestion. We find then that the Victorian Labour Conference resolved -
That the Australian Labour Party forbids any Australian Government to participate in any war -
Against the Soviet Union.
To suppress any movement for the independence of India, Ireland, or South Africa.
To suppress any movement for the emancipation of India or China.
Arising from the existence of the Polish Corridor.
Arising from any Balkan disturbance.
Arising from the French ownership of Alsace Lorraine or the Saar.
Arising from the union of Austria and Germany.
Arising from the violation of the neutrality of Belgium or Denmark.
To maintain British control of Egypt or the Suez Canal.
To further capitalistic ends in Levantine or any other countries.
Arising from the conduct of law proceedings in any countries.
Against the United States of America.
Senatorbrown. - Evidently the conference overlooked the contest in the Gran Chaco between Bolivia and Paraguay.
– I am satisfied that, if anything was left out of these resolutions, it was of rather a minor nature.
– What objection has the honorable senator to the Christian spirit expressed in that resolution?
– Personally, I am all for peace when peace is practicable. But I had between three and four years of war, and I know what it means. I did not want to fight. Fighting was forced upon me, and, having had experience of it, I endeavour to recognize facts when I see them, and do not go about crying peace, peace, when thereis no peace. No one can look at the general conditions of the world to-day without realizing that the nations are not at one another’s throats simply because they are not in a financial position to carry on a war. This inability to finance hostilities is the only thing that prevents the outbreak of war instantaneously.
– We are a peaceful people in Australia. I would not like to quarrel with the honorable senator.
– I am sure the honorable gentleman would not. Senator Barnes is, at the moment, so amicable, that I must return to Senator Rae, who has invited me to comment on the resolutions of the Victorian Labour Conference.
It is, I think, significant that the Soviet Union is the first country against which no Australian government must engage in war. It is strange that the United States of America is down at the bottom of the list. That arrangement, I suggest, is a little hard on that country, because so many citizens of the United States of America are sprung from the same stock as ourselves, although a century or two earlier. This being so, why should the United States of America be twelfth in this peace list of the Victorian Labour Conference, and the Soviet Union first? Apparently, also, no Australian government is permitted to suppress any movement for the independence of Ireland, India, or South Africa. In other words, we are, presumably, to encourage any movement in those countries to break away from the Empire. Further, we are not to engage in any war arising from the violation of the neutrality of Belgium or Denmark. Our participation in the Great War was due to the violation of the neutrality of Belgium. Apparently, that was a grave mistake in the opinion of the Australian Labour party, and wc must not make the same mistake again.
Now, I have something to say to Senator Barnes. One of the resolutions of the Victorian Labour party states that Australia must not participate in any war to maintain British control of Egypt or the Suez Canal. This, I feel sure, will interest Senator Barnes, because Egypt and the Suez Canal are one of the main links in our trade routes. Much of our commerce goes through the Suez Canal. If, because of some trouble in Egypt, British control of the canal is jeopardized, Australia must not, wc are told by the Victorian Labour Conference, do anything to assist the Mother Country. It follows then, that if that trade route is closed to us, we must find some other route by which to send our commerce to overseas markets.
– I challenge the honorable senator to find in my remarks any reference to the Suez Canal.
– I may not lie able to do that directly, but the honorable gentleman did say that a few aeroplanes could beat off any naval vessels that attacked Australia. Apparently, he entirely overlooked the fact that, even assuming Australian aeroplanes succeeded in bombing opposing war vessels off the Australian coast, the use of aircraft would not, of itself, be sufficient to keep open our trade routes, the chief of which is through the Suez Canal. I suggest that it is at least as important to Australia to be able to send our wool, wheat, wine, fruit, and dairy produce overseas as it is to defend our coast line against naval attacks. I do not know whether the honorable senator realizes even now the trend of my argument, which is that it would be useless to defend the coast line of Australia unless at the same time we could secure the safe passage of our produce, which represents the true wealth of Australia, to overseas markets where it could be sold, and get something in return for it. It would bc useless for thousands of farmers to grow sheep and produce wool if, owing to the closing of our trade routes in time of war, that produce could not be disposed of. The Leader of the Opposition (Senator Barnes) and Senator Bae said that we should endeavour to make Australia a place worth living in. It is generally agreed that the standard of living in Australia and the number of persons employed is at least as high as it is in any other part of the world, though thousands who have no work to do know no such standard.
– Why should not Australia bc the spearhead of civilization ? Why should the people go hungry in a country in which there is an abundance of food?
– That is a big question, and one which I cannot debate at this juncture. It is difficult to say why Australia with a population of 0,500,000 persons should be expected to give a lead to the world.
– It has already done so.
– I once - tried, I believe in Parliament, to answer that contention, and came to the conclusion that Australia led the world in three respects. The first was in the production of fine merino wool. No other country has ,yet beaten us in that respect, although some honorable senators opposite are loath to believe that pastoralists possess the modicum of brains necessary to achieve such a result. The second is in the cricket field ; but after all cricket is only a game; and the third is that Australia produced Madame Melba, who was once the world’s greatest singer. I do not know that Australia has ever led the world in medicine, law, commerce, engineering or politics. The Torrens title system also originated in Australia, but such things are not vital matters. Even if a doctor discovers a remedy for one complaint, he is not regarded as leading the world, seeing that there are many other complaints to be remedied. We should not think that Australia, with a population of 6,500,000 persons can achieve what other nations with ten times that number of highly intelligent persons, and with a long history, can achieve.
– One brain may revolutionize the world.
– That may be so. Sometimes more can be done by one brain than by many. In drafting a report it is often found that one person who knows the subject can produce a better result than 50 persons.
– What is the honorable senator’s opinion concerning the building of cruisers in Australia?
– Australia should be able to defend itself, and wherever practicable manufacture its own equipment, provided that it can be produced at a reasonable figure. We should manufacture our own ammunition, shells, guns and ships, if we can do so on a proper commercial basis. A reasonable allowance should be made in favour of Australia, but that is now provided by the tariff. I am not in favour of producing equipment in Australia simply with the object of producing it here, and unless such equipment is capable of performing the functions for which it is produced, its manufacture should not be undertaken in this country. The building of ships of any kind is a highly intricate and specialized work, and cannot be done without proper preparation, or with any more possibility of success than a nation can defend itself without adequate preparation. It is a question of whether ships can be built in Australia at a reasonable figure and properly equipped for the work which they are intended to perform. I am opposed to paying for locally-constructed ships a price two or three times higher than that at which they could be obtained overseas.
-Australia should be able to do what other countries are doing.
– I have not made a very close study of this aspect of the subject, but I think that the bulk of the guns and ammunition is manufactured in Germany, Great Britain, America or France. The majority of countries do not produce their own munitions.
– Why do they not do so ?
– Because some men are trained to a higher degree of efficiency than others. The Leader of the Opposition suggested that Great Britain should do more than she has been doing for Australia in the matter of defence. I have not the actual figures before me, but for many years past the cost of defence per head of population has been infinitely higher in Great Britain, where the people on the whole are poorer, than it is in Australia. The Leader of the Opposition, who suggested that Great Britain should present the Commonwealth with a cruiser, should remember that only a year ago Great Britain loaned five destroyers to Australia free of cost.
SenatorRae. - They are obsolete.
– They are not.
– On the 25th May the Prime Minister (Mr. Lyons) said -
When the Attorney-General (Mr. Latham) was in London in August, 1032, he discussed with the British Government certain phases of Australian defence, and particularly the age of our destroyer flotilla. The outcome of the conference with the British Government is that certain vessels will be loaned to Australia to replace similar vessels which are approaching the end of their useful lives.
Five of such vessels were loaned to Australia and the only obligation upon the Commonwealth is to maintain them.. I do not think that they have to be returned. The Prime Minister continued -
The generous action of the Government in loaning these additional vessels to Australia means that this Government will he saved the capital expenditure in replacing our present destroyers when the time comes to scrap them.
That completely answers the assertion of the Leader of the Opposition that there is an obligation upon Great Britain to do anything more for Australia in the way of supplying naval equipment. There are other points upon which I could comment, but I do not propose to do so. I did not, however, wish the debate to conclude without other honorable senators on this side of the chamber stating that they firmly disagree with what has been said by honorable senators opposite in respect of the fundamental subject of defence. If, unfortunately, war should occur, I do not wish any one to be able to toll me that I knew that the position in Australia was not as it shouldbe, and that although it was my duty to say what I thought should be done to ensure an adequate system of defence, I remained silent. So long as I am a member of this chamber I shall advocate a system of adequate defence for Australia as upon that the life of the nation depends.
– I should not have spoken on this subject but for certain utterances of honorable senators opposite that require a reply different from that given by previous speakers.I congratulate the Minister for Defence upon his thoughtful speech, which should impress intelligent people.From information obtained from reliable sources I know that our present defence system is inadequate. We have a duty, not only to Australia, but also to the Mother Country, and we would be recreant to our trust if we did not keep our defence system up to a proper standard. I have listened tosome extraordinary remarks to-night from Senator Rae, who professes to believe in an adequate defence policy for Australia. Is that also the belief of those with whom I understand that he is associated in a certain organization? If it is, how did it happen that a member of that body was detected in an attempt to distribute seditious literature on an Australian warship, evidently with the view to create disaffection among the ratings? If he and the members of the society of which I believe he is a member stand for an adequate defence policy, why are they trying by revolutionary processes to create disaffection in the navy? I know the facts, and I have to accept the honorable senator’s statement with a good deal of doubt as to his earnestness.
– Was the man you speak of a member of the Labour party?
– He is a member of the Friends of the Soviet Union, and boasts of it. He is the recognized representative of that body in a certain town in Tasmania. He distributes Soviet literature and never wearies of advocating Soviet doctrines and urging their acceptance by the Australian people.
– The Soviet believes in total disarmament.
– In view of the military preparations being made in Russia, its professions of belief in a disarmament policy go by the board. It is necessary to have adequate defence in Australia against not Only aggression from without but also internal foes. Why is so much energy being expended to create in Australia so many branches of the organization which calls itself the Youth Anti-War Movement? Who is behind it?
– I do not know who is behind it, but I know many who are in it.
– The honorable senator has good reason to know both who is in it and who is behind it. He also knows that the same organization is creating, wherever possible, what it calls cells in every industry and using every possible means to capture the imagination, particularly of educated people who they think may become fanatics. An instance was recently brought to my notice in which those tactics succeeded. A broken-hearted mother told a friend of mine that her daughter, who had been in a State Education department for years - she was an accomplished girl - had been, owing to her peculiar temperament., so impressed with these teachings that she resigned from the Education Department in order to enter a factory as a worker, for the purpose of creating a communistic cell in it. That was in Melbourne.
– What has that to do with the building of a cruiser here? ?
– I am showing that the danger is not only external but internal, and necessitates the creation of an adequate defence force.
– The honorable senator’s argument is simply an inferior edition ofthe Sydney Morning Herald editorial.
– I do not take my views from that paper. I am speaking of what I know and what the honorable senator knows. It is high time that this matter was made more prominent by public men who believe in protecting the best interests of the people. The sooner the public are warned of the danger which is not only apparent but real, and do something definite through their representatives in Parliament to eliminate it, the better it will be for the Commonwealth. Senator Barnes said “ Let us make Australia a place worth fighting for “. My reply is that in no other country in the world are the conditions nearly so good as those existing in Australia. No other country has so many blessings to the square yard as we have to the square foot. Honorable senators opposite know and appreciate that fact, but they depend for their political existence on sowing the seeds of discord and discontent among the people of Australia. I know that economic conditions are not so good here as one would desire, but they are much better than in any other part of the world. I rose principally to say that I accept not at its face value, but at its real value, the statement I heard from Senator Rae to-night that he believes in adequate defence, in view of the experience I had in connection with a unit of the organization to which the honorable senator some time ago said that he was proud to belong.
– On a point of order, is it parliamentary for the honorable senator to refuse to accept at its face value Senator Rae’s statement th.-it he believes in adequate defence?
– I say distinctly that I accept Senator Rae’s statement at what I believe to be its real value, and I cannot say more. There is nothing offensive in that remark. The honorable senator and I simply differ as to the value of his assurance. Others may take a different view of it. I sincerely hope that the policy of the Government will, as the Minister for Defence (Senator Pearce) suggested, be a continuous one, and that all future governments will carry out the programme, the beginning of which is laid down in this measure.
– I did not intend to speak to-night, but I could not sit silent after listening to the remarks of Senator Payne. His observations were utterly lacking in intelligence. I am surprised at a man of the honorable senator’s calibre ‘ speaking in that manner. I have the greatest respect for him, but I am afraid that to-night he has slipped from the path of intelligent discussion and allowed his prejudices to overcome his judgment. He made unwarranted statements in regard to
asked that he be called to order. If he had spoken frankly what was in his mind, he would have said that he regarded Senator Rae as a liar. It is better for men to speak the truth than to camouflage their utterances in the way Senator Payne did. In my hearing, and that of several others, Senator Rae stated plainly that he believed in the adequate defence of Australia. No man, except some old troglodite who did not understand the correct use of the English language, could cavil at or misinterpret that statement. It is well that we should speak in clear and straight-forward terms. We on this side of the chamber say that Senator Payne is losing his perspective when he makes the statements he made to-night with regard to the Labour party. That party believes in adequate defence, but not in wars of aggression. If it was possible to educate the people of Australia to understand the difference between defence and aggression they would all stand solidly by the intelligent electors who comprise the Labour party, instead of being led away by the utter absurdities offered to the Senate to-night by Senator Payne. I hold no brief for Russia, but I believe in fair play. I know that representatives of Russia have stated at disarmament conferences that they arc working for the complete abolition of armaments. I ask Senator Payne if it is not true that at a meeting of the Disarmament Conference, Litvinoff said that Russia would entirely disarm if the other countries of the world would do the same? Until the nations take up that Christian attitude there will always be war, or the possibility of it. The Australian Government is simply trifling with the position. The Minister for Defence spoke to-night of providing so many aeroplanes and ships. Sinking an obsolete ship outside the Sydney Heads will not solve the problem of war. Honorable senators opposite who pride themselves on their Christianity and intelligence arc afraid to take up a Christian stand by saying, “We shall disarm altogether.” Rather in a petty, smug, parochial way they accuse an honorable senator on this side of disaffecting the personnel of the navy. I have known Senator Rae for 25 years, and can say, with confidence, that no cleaner man has ever drawn breath in this chamber. He has fought for disarmament and peace so long as I can remember, and I take off my hat to him. He lost two sons in the war. Senator Payne has no right to accuse such a man of spreading disaffection in the navy. His speech was a disgrace, and he should have been made to withdraw the charge. I speak with some heat, because it is time we faced the issue properly. No honorable senator should speak in the way Senator Payne has spoken to-night, with his innuendoes and stupid utterances. Only the other day the Graziers Association approached the Government with the suggestion that an understanding should be reached with Russia, in order that a trade in wool and sheep should be established with that country. Does Senator Payne accuse the graziers of being Communists desirous of disaffecting the Australian Army and Navy? They are after trade. We should follow the example of other nations which are seeking opportunities to trade with Russia,” and should hold out a friendly hand to its people. In my opinion, no nation is more eager for peace than Russia is: if every country were equally peace loving, there would be no more war. I disagree with the Leader of the Senate that the new cruiser should not bc built in Australia. Senator DuncanHughes said it was a matter of money. Unfortunately, like those persons who would offer their fellowmen as a sacrifice to the God of war, some honorable senators opposite are obsessed by financial considerations. I have never heard so ridiculous an argument as that we should not build a ship in Australia because the poorly paid artisans of Britain could build it more cheaply. If I were an imperialist, I would say that one of the first things Australia should do is to take adequate steps to supply its own requirements of war vessels and munitions. Even if it cost, several millions of pounds to establish the ship-building industry in this country, from, a defence point of view that money would be well spent. We are asked to approve of the expenditure of £4,000,000 on naval construction. Would it, not bc better to spend some, if not all that money, in training Australian artisans to build ships? Any true patriot must agree that if Australia needs a cruiser it should be built in this country. It is ridiculous to say that those who object to its purchase abroad do not believe in the defence of Australia. I conclude by saying that I hope Senator Payne will cease to be so stupid, and will reason things out before he again speaks in this chamber.
– Senator Duncan-Hughes said that he did- not believe in crying “ peace, peace “ when there is no peace. I say that we should not cry “ war, war “ when there is no war. The world claims to be seeking peace; but on every hand we see evidence of the war spirit. Even in Australia that spirit is manifest in the existence of war museums, captured guns and other war relics. Unfortunately the spirit of War, instead of the virtue of peace, is being instilled into the minds of our young people to such an extent that one is inclined to think sometimes that the Prince of Peace lived and died in vain. Even many who claim to have espoused Christianity cry “ war “ not “ peace “. Unhappily that tendency exists in every civilized country. People who believe in peace should not be afraid to proclaim their views, for -so long as nations talk war, and prepare for it, we cannot hope foi; peace. Before he is trained, a prizefighter might be a peaceful man-; but when his training has progressed far enough for him to know his own capabilities he develops combativeness ; having learned the art of fighting, he is keen to test his skill in combat. The same thing is true of nations.
The Minister for Defence (Senator Pearce) said that the Australian cordite factory was supplying New Zealand as well as Australia with munitions. In other countries the manufacture of munitions is in the hands of private enterprise, and so long as that continues there will be wars. The shareholders of armament firms look for dividends, and they do not care if, to that end, the world is plunged into war. Until total disarmament takes place, the nations of the world would do well to follow Australia’s example, and have the manufacture of war materials confined to factories controlled by governments. The prohibition of private armament making would go a long way towards restoring peace to this war-stricken world.
I disagree with those who claim that the League of Nations is impotent and valueless, although I admit that the League lost a golden opportunity in failing to take decisive action when Japan declared war on China. Offenders against the civil and criminal code are punished; and, similarly, nations which offend against international peace should be firmly dealt with.
It is just as important that we should manufacture in Australia engines for use in aeroplanes as that we should manufacture our own munitions. I do not think that there is at present any factory in Australia in which aeroplane engines are manufactured. That state of affairs should bo set right, for I agree with Senator Barnes regarding the value of aeroplanes in Australia’s defence.
Every gallon of petrol used in Australia has to be imported. The position is so serious that no effort should be spared to ensure supplies of oil fuel in Australia, so that we may be independent of outside sources.
Ever since Australia demonstrated its ability to construct naval vessels, I have been opposed to cruisers or other vessels of war being purchased outside this country. I disagree with the statement of Senator Duncan-Hughes that other countries have more skilled workmen than are to be found in Australia.
– I did not say that.
– The only inference possible from the honorable senator’s remarks was that men in other countries are better fitted to build ships than are Australian workmen.
– I said that trained men are better than untrained men, irrespective of the country of their birth.
– And also that the trained men were to be found outside of Australia. Everything must have a beginning. If Australia does not possess men with the necessary skill - and I disagree with those who say Australia has not such men - we should bring to this country men of special ability to train Australian workmen, who can hold their own with the workers of any other country.We have proved that we have the men in Australia with the energy and the skill to construct vessels of war that will compare favorably with any that have been constructed in other parts of the world. All that our workmen require are opportunities to apply their skill. Senator Duncan-Hughes agreed that war vessels should be constructed in Australia but only if they can be constructed as cheaply or nearly as cheaply as they can he built overseas.
– If they could be constructed at a reasonable figure.
– The logic of that argument is that England should never build any of her own vessels of war because she can get thembuilt much more cheaply in Japan or some other country.
– But those ships would not be nearly so good.
– I contend that if the new cruiser were built in Australia by day labour it would be as good as any built in England. Under the contract system, the tendency is to scamp the work. The contractor must push his men in order to secure as big a profit from the job as possible.
– Are not contractors subject to supervision?
– Yes, but often there is a need for somebody to inspect the inspectors. I would much prefer to have a vessel constructed by daylabour than by contract.
– Some of the 10,000-ton cruisers were constructed by day labour, and they were obsolete before they were finished.
– That might happen in any part of the world. Often a war vessel is obsolete before it is completed, and because of rapid improvements in design a vessel has been known to be obsolete almost as soon as its keel was laid.
– It took five years to build the Brisbane at Cockatoo Island, although the estimate was two years. That was a day-labour job.
– As Senator DuncanHughes contended, no doubt, the men were in need of some training in this class of work, and I feel sure that, having got that measure of training, their work would continuously improve with the construction of each subsequent vessel. Even if the cost of local building were greater it would be worth something to keep the money involved in the country. In connexion with the proposed purchase, we shall be sending overseas £3,000,000 in the form of goods, in return for which wc shall get a warship which could have been constructed in Australia. There has always been a tendency on the part of non-Labour governments to purchase overseas ships and almost everything else. My policy is “Australia first, second, and always “. Experts arc not agreed as to what are the best means of defending Australia. It would be foolish for me as a layman to argue on this point, but I have read the opinions of several men, who can speak authoritatively. Some of them are in Australia and others are overseas, but all of them agree as to the defensive value .of air forces. I am inclined to concur in that opinion. Senator Duncan-Hughes says that we must have means to keep our trade routes clear, and I agree that that could not bc done with an air force only, but it is a great pity that one nation should be forced to expend millions of pounds upon armaments merely because another nation is doing so. It is deplorable that some reliable agreement cannot be reached between the nations of the world. Only when a universal treaty for the abolition of war has been made can the nations be regarded as truly Christian and civilized.
Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [11.38]. - I suggest that Senator Hoare should read very carefully in Hansard the speech he delivered to-night; threefourths of it was an exhortation to peace, and one-fourth a belligerent declaration of war. Referring to the dispute between Japan and China the honorable senator contended that the League of Nations should have declared war on Japan.
– To stop the slaughter of China.
Senator Sir GEORGE PEARCE.Does the honorable senator realize the full meaning of his suggestion? It would have meant another world-wide war. I remind him of the immense naval and military power of Japan and the remoteness of the other nations which would have had to act on behalf of the League of Nations, and invite him to visualize the conflagration that would have resulted had his suggestion been carried out. He also advocated disarmament. If the other nations were without armed forces, how could they possibly discipline Japan on behalf of the League of Nations? I do not know whether the honorable senator contemplated that Australia, as a member of the League, would take part in the adventure; if so, he opened up a prospect that offers little comfort to lovers of peace. I agree with Senator Hoare that it is desirable that Australia should manufacture aeroplane engines, but Senator Duncan-Hughes has rightly said that such production must be on an economic basis. I am pleased to be able to inform the Senate that, under the contract which we let recently in Great Britain for eighteen aeroplanes and 24 seaplanes, we are to receive copies of all the plans mid specifications, and are to have the right to manufacture the engines in Australia.
Honorable senators of the Opposition spoke as though this Government were doing nothing to encourage the building of warships, in Australia. They have ignored the fact that two sloops are to be built at Cockatoo Island Dockyard at a cost of £500,000. The difference between the construction of sloops and cruisers is that the material for the former can be obtained in Australia. For instance, the plates for the sloops are obtainable here, because they are not nearly so heavy as those required for the cruiser. If we were to undertake the rolling of plates for cruisers, we would require to expend £300,000 in laying down the necessary plant, and it would tak? two years before a single plate could be rolled out. That possibility has been investigated through the Broken Hill Proprietary Limited.
– What would that matter to Australia?
– It would not matter if we were content to receive the vessel ten years’ hence. The estimated life of thi3 particular class of cruiser is 25 years. That would mean that we would have to wait practically half the life of the cruiser before we could utilize it. The construction of the cruiser Brisbane at the Cockatoo Island Dockyard took five years, and the vessel cost more than double the cost of its sister ship, the Melbourne, which was built in England in under two years. This meant that the Melbourne was in commission for three years before the Brisbane, which was laid down at the same time in Australia, was completed.
– The estimated life of those cruisers was only twenty years.
Senator Sir GEORGE PEARCE. That is so. Thus, a quarter of the life of the Brisbane was lost to us because of the time occupied in its construction. The Brisbane was a more difficult ship to build than the sloops, but the new cruiser will represent the latest achievement in naval architecture, and will be much more difficult to build than wasthe Brisbane. Its great cost indicates that. The Melbourne cost £350,000, and, although there is a difference of only 2,000 tons in the size of the vessels, this new cruiser will cost £1,800,000. The higher cost is due to remarkable developments in recent years in internal construction features, engines, armaments, and all the paraphernalia required for the equipment of a modern war vessel. Great Britain is, and has been for some considerable time, the greatest ship-building nation in the world. The vast experience of the Mother Country in this business has resulted in the building up of a trained personnel unsurpassed in the world, and the establishment of a vast specialized plant and machinery. If we contemplated the building of a modern cruiser of this class in Australia, we should require to import practically one-half of the material, all the engines and all the armaments, as well as a very considerable proportion of the trained personnel. Then, having built one vessel, our activities would cease, and the whole of the skilled personnel would have to be discharged.
– The right honorable gentleman means that we have not the trained personnel in Australia?
Senator Sir GEORGE PEARCE.That is so, as regards this particular class of naval architecture. When I was in England in 1911, I saw the Melbourne and other naval vessels under construction for the Australian Navy, and, such is the reputation of British naval shipbuilders that side by side with them were battle ships and cruisers being built for Turkey, Spain, and Brazil. I thought it only right that these points should be made clear to honorable senators.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 - (1.) For the purposes of this act there shall be a trust account which shall be known as the defence equipment trust account.
.- I move-
That after the word “ account “ the words. “ such defence equipment to he built in Australia “, be inserted.
In the second-reading debate, we heard many references to the need for loyalty to the Empire. This amendment will test the sincerity of the Government and its supporters to the Australian people, its unemployed, its manufacturers, its primary producers, and also its taxpayers, who will have to find the money to send overseas for the new cruiser which this Government has contracted to buy. “ Australia will be There “ is sung at luncheons and dinners attended by Ministers and their supporters. This amendmen t will give honorable senators a chance to show their loyalty to this country.
Question - That the amendment be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)
Majority . . 7
Question so resolved in the negative.
Clause agreed to.
Clauses 3 and 4 agreed to.
Preamble and title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Motion (by Senator Sir Harry Lawson) proposed -
That the billbe now read a first time.
– In the debate on the Defence Equipment Bill, which has just been passed by the Senate, a good deal was said about expenditure on the other side of the world for the defence of Australia. I now invite the Senate to consider the advisability of spending money for defence purposes on the other side of Australia. The Minister for Defence (Senator Pearce) this evening spoke of the need for a continuous defence policy, and expressed the wish that even if there was a change of government after the next election, the defence programme which he submitted should be continued. In that respect I entirely agree with the right honorable gentleman. Before I resume my seat, I intend to remind him of a continuous defence policy which, 21 years ago, he advocated in equally eloquent terms. I consider that it is about time that effect was given to the programme which he then submitted so convincingly and with the same mastery of the subject which he displayed to-night when moving the second reading of the Defence Equipment Bill. This is not the first occasion on which I have endeavoured to obtain information from the Leader of the Government (Senator Pearce) as to the assistance to be given to Western Australia in the matter of providing a dock at Fremantle or in resuming the work at the Henderson naval base on which £1,250,000 has been spent. Realizing the liberal way in which the Government assists projects in Eastern Australia, I have endeavoured to ascertain principles upon which it gives such assistance. Last week, Parliament voted a. balance of £600,000, making £3,000,000 to complete the River Murray waters scheme, and I also find that nearly £5,000,000 has been spent in constructing the Kyogle to South Brisbane railway. When I asked the Minister the principle upon which £3,000,000 had been allocated for irrigation works on the River Murray he said that it was for the good of Australia. He said that that is also the dominating factor in connexion with the Queensland sugar embargo, which can be regarded only as an incubus and not in the interests of the Australian people. Why was not that principle observed when a reply was made to a request recently submitted to the Commonwealth Government by the Government of Western Australia? A few weeks ago a deputation of Federal and State members, which included Senator Collett, asked the Government of Western Australia to proceed with the construction of a dock at Fremantle. The Premier, Mr. Collier, pointed out that the State Government could not finance the project, but that the Commonwealth Government had commenced a work of that nature near Fremantle some time previously upon which £1,250,000 had already been spent. He further stated that all that he could promise was that he would place the request before the Federal Government and ask it to contribute one-third of the cost. He said that as it was a defence measure the Imperial Government should also contribute one-third and that he had every hope, seeing that the good of Australia was involved, and that defence is the responsibility of the Commonwealth Government, that therequest would, at least, receive the same consideration as is given to requests made by the more populous and wealthy States in the East. The request was placed before the Government in most, convincing terms by Mr. Collier. The Daily News of the 19th July last published the following report of the Premier’s reply to Mr. Sleeman, member for Fremantle in the Legislative Assembly of Western Australia : -
The Premier’s letter, which came to hand to-day, reads: -I desire to inform you that, in accordance witha request of the deputation which waited on me on January26th, representations have been made to the Prime Minister for assistance by the Commonwealth and Imperial Governments in the construction of a dock at Fremantle. The Prime Minister has advised me that from a naval defence point of view, either a dry or floating dock located at Fremantle, would, if of suitable dimensions, be of undoubted advantage to the Commonwealth in meeting the docking requirements of the ships of the Royal Australian Navy, but that the construction in recent times of a naval base at Singapore had greatly improved the docking facilities in the Indian Ocean.
As usual, Western Australia received sympathy, but no assistance; sympathy without help is as useless as mustard without beef.
Thursday, 2 August 1934
– If the money were spent and Western Australia seceded, would it be refunded ?
– I shall have something to say about secession before I conclude. Surely Senator Payne does not suggest that because the people of Western Australia supported secession they should not be treated on the same basis as other States!
– I did not suggest that.
– If the honorable senator is reminding me of the threat made by the Prime Minister I can only say that I regret that such a statement was ever uttered. I hope that the Prime Minister is big enough to deal with a request of this kind on its merits. The report continues -
The Prime Ministerstated that after careful consideration of representations made and reports which have been obtained in connexion with this question the Commonwealth Government is unable to see its way at the present time to make available for the project any of the funds which it is in a position to provide for defence purposes.
To-night the Senate voted £4,160,000 for defence purposes, which includes £2,260,000 for a new cruiser which is to be purchased in Great Britain. Yet, in the western State there is not a dock in which the vessel to be purchased, or other ships of the Australian Navy, can be accommodated. The Minister for Defence has urged the adoption of a continuous defence policy. I have before me the report of a speech delivered by the right honorable gentleman in May, 1913, when work at the Henderson Naval Base at Cockburn Sound was commenced. The speech does the right honorable gentleman credit, and I can readily imagine him bring ing tears to the eyes of members of the audience as he submitted a policy which he urged should be continuous. That speech was on exactly the same lines as the speech he delivered this evening. At that time the Minister favoured a start being made with the Henderson Naval Base, but I am inclined to believe that he is responsible for the work having been discontinued. His speech to-night was very impressive, and I believe that that delivered 21 years ago was equally impressive to the thousands who heard or read it. In the West Australian of the 18th May, 1913, the following report appeared : -
They were gathered there that day, the Minister said, to witness the opening ceremony in connexion with one of the two primary naval bases, which were part of the Commonwealth’s scheme of naval defence. Before unfurling the Australianflag he wished to announce on behalf of the Commonwealth Government that it had decided out of respect to the naval officer who had selected that site as a primary base to name it the Henderson Fleet Base.
What has become of the primary base in Western Australia? Although the great admiral recommended the construction of two primary bases of equal importance, one on each side of the Continent, and after spending £1,250,000 on it the work in Western Australia has been abandoned, and naval expenditure concentrated at Port Jackson and Sydney. The report continued -
They were now met together to give effect to that report in starting the permanent works for the naval base. The latter he might inform them would, when completed - and it would takesome years to complete - comprise a complete dockyard with shipbuilding arrangements and docking facilities. In connexion with the plans they were taking into consideration complete slips for the laying down and building of battleships and cruisers as well as ship repairing sections.
What do the members of the Labour party think of such a proposal, which, as they should know, embraced shipbuilding and repairing sections? It met the wishes of the West Australian community. It is interesting to notice the influence which the Minister for Defence exercised over his western constituency at that time. At the time I have mentioned he painted a beautiful picture of the work to be undertaken, but which, unfortunately, has since been abandoned by this Government. Persons visiting the locality to-day naturally think that the federal blight has fallen upon the site; it looks like federal territory, as all progress has ceased.
-Will the honorable senator inform the Senate who was responsible for the project being abandoned ?
– I have asked for that information.
– The honorable senator can tell those who wish to know that it was a Liberal government in which the late Senator E. D. Millen was Minister for Defence that was responsible.
– I have asked the Minister numerous questions on the subject, and it is refreshing to obtain some information.
– The honorable senator has been acquainted with the facts for years.
– This is quite incorrect. This is the first time that I have been informed that it was a government in which Senator Pearce was not Minister for Defence which was responsible. Even if the work was abandoned in the circumstances mentioned the right honorable gentleman has been Minister for Defence sufficiently long to have rectified the great mistake then made. What has he done to resume the works he promised? The Minister proceeded -
A floating dock, capable of accommodating the largest warship afloat, would be provided, in addition to which there would be numerous workshops and foundries for carrying out those ship-building works. Accommodation for submarines and torpedo-boat destroyers in seabasins, fitted with special berthing, would also be provided.
Sitting suspended from 12.15 to 12.45 a.m.
– The expert knowledge that the right honorgentleman displayed then did him credit. Every word that he said was correct; the facilities which he outlined were necessary; and everything that has occurred since then has made them more necessary, particularly having regard to existing world conditions. I find myself unable to reconcile with his declaration of policy on that occasion the refusal of the Government only a fortnight ago to contribute one-third of the cost of the dock at Fremantle, as requested by the Government of Western Australia, although the Prime Minister (Mr. Lyons), in communicating that refusal, admitted that the dock would be of great value for defence purposes. Senator Pearce continued -
Then there would be coaling stations, oil fuel tanks, and oil stations, for supplying the fleet. They would also take into consideration the question of the establishment of a naval store department, from which would be supplied all the stores required by the fleet.
It was also intended to provide inthe scheme for barrack buildings for the seamen when ashore. Provision would be made for a reading room, recreation rooms, kitchens and drill grounds for training purposes. In addition, provision would be made for hospitals for the sick, including sick and attendants’ quarters, administrative blocks, hospital stores, surgeons’ and workmen’s quarters, and kitchen blocks. Consideration would also be given to the matter of constructing a naval arsenal, which, when the scheme was completed, would be provided with magazines, buildings, laboratories, and store houses for storing quick-firing ammunition, shells, and projectiles for the fleet requirements. This arsenal would be designed in every respect so as to safeguard the life of workmen and property. It was proposed to create one large danger zone, and in that zone arrangements would be made for the new State explosivedepot. In a large naval establishment, such as he had outlined, it would necessarily be required to have large quantities of stores in readiness. He might explain that the Director of Naval Works, and his department, would design, construct, and control the immense works under the Naval Board’s administration. In following out Admiral Henderson’s report, it had been decided to create a sub-base at Albany shortly. The Director of Naval Works would take up preliminary data in connexion with that subbase, which would come under the control of the Western Base. It would be admitted he thought, that the Federal Parliament was giving effect to Admiral Henderson’s report and naval scheme. The Federal Government was now taking up the work in earnest, and he __ for their co-operation in thecarrying out of that immense scheme. He need hardly say that the works he had referred to would give employment to a large number of men forseveral years.
When we consider this wonderful scheme, we must regret the circumstances which led to its abandonment and the fact that Senator Pearce’s promises are unredeemed. In view of the unsettled state of the world, the resumption of the scheme is more than justified. From the point of view of employment, the time is opportune for the carrying on of the work, particularly as £4,000,000 is available for defence expenditure. The right honorable gentleman went on to say -
From now onward, every effort would be made by the Naval Board and the Director of Naval Works, to push the scheme to its completion. In conclusion, he wanted to say that the State Government had been most considerate in its dealings with the Commonwealth Government in regard to the question of the lands at Cockburn Sound, and in the acquisition of the present explosive area. Their action, he thought, was a fine example of the spirit of co-operation.
In spite of that declaration, when the State Government, which had set such a fine example of co-operation, sought the assistance of the Federal Government in the building of a dock at Fremantle, the Prime Minister was not able to agree to the request.
Other speeches followed. Responding %o the toast of “ The Minister for Defence,” Senator Pearce replied -
He had had the honour of making the suggestion that the Australian Government should ask the Admiralty to send out an expert to advise them in its policy of defence. Admiral Henderson came to Australia, without any preconceived idea as to what nature his report would take. His recommendations had been influenced neither by anything he had heard in England nor by local considerations in Australia. He was given every assistance by the State governments of Australia, and they had placed in Iws hands all the documents at their disposal. He went right around the Commonwealth, visited all the important strategical points, and fathered that monumental scheme that would be associated with his name aa long as the history of Australia would endure.
To-day that site is almost a deserted waste: Is the Commonwealth in such a sound financial, position that it can afford to waste the £1,130,000 expended on this site?
– How much would the work cost now?
– I do not know exactly, but it would be better to complete the work and thus save the £1,130,000 expended on it.
– Would Western Australia pay back the money if it seceded from the Commonwealth?
– That would depend on whether the money was provided from loan or from revenue. If the former, it would be paid back; if the latter, it would not. The Minister’s speech continued -
As one of the chief primary bases of Australia, he had chosen Cockburn Sound.
The other base was to be at Sydney. The two bases were to be equal in every way -
From the description of the base, they might gather the extent of tho work that had to be thought out by .the Naval Board experts before operations were commenced. It would have been foolish and childish on the part of the Federal Government, if it had begun that work without looking to the developments that must come in a few years’ time. He hoped the problem would broaden into something bigger than Australian naval defence. They were there as one of the young British nations of the Pacific, and they must contemplate a policy that had for its outlook the whole Pacific Ocean. They recognized ‘that the interests of New Zealand, Canada, and South Africa were intimately associated with those nf Australia, and he hoped that the time was approaching when the dominions would shoulder their responsibilities, and keep the flag flying in those waters. Cockburn Sound would bo more than a base for the Austraiian Fleet.
The more I read these noble sentiments, the more thoroughly do I agree with every word of them, and the more am I convinced that they apply with greater force to-day than when they were uttered. The right honorable gentleman proceeded -
It would be a base which the British Fleet would make its- rendezvous. It must be taken into consideration that the work had to be thought out to its ultimate end, and was not a stop-gap policy for this year or next year, or the next ten years. The plans were now so far advanced that practical steps could be taken in the immediate future to begin the actual work of the naval base.
In urging that it should be a policy for more than a decade, the Minister was treading similar ground to that which he so properly trod to-night, when he urged that the defence policy of the Commonwealth should be continuous, and not affected by changes of government or of ministers. The Minister who put forward this scheme in 1913 is still in charge of the department-. His speech proceeded -
He waa glad to be able to say that in the next few weeks there would be before them a demonstration of what that statement meant. The question of defence was above party politics, because it was an association for national safety, which was of infinitely greater importance than the safety of a political party. That did not mean that the administration of the Defence Department should ever be above criticism. The department welcomed all Criticism of administration, but he hoped that that criticism would be directed towards getting good results and promoting a clear-cut naval and military defence scheme, which would never become the sport of party politics.
That speech meets the conditions and requirements of to-day, so far as the naval defence of Australia i3 concerned. Its outlook is national, and its policy comprehensive. It covers not only the proposed naval base on the Western Australian coast below Fremantle, as recommended by Admiral Henderson, but also the sub-base at Albany, both of which are still non-existent. The Government is fortunate in having a big majority in both Houses, and in charge of the department a Minister who has shown enthusiasm in the past for this work. Including the £4,160,000 that wo voted to-night in another measure, we are spending well over £5,000,000 this year on defence. The State Government has asked the Commonwealth to join in seeking the assistance of the British Government to defray the cost of a dock for Fremantle - an undertaking which is entirely beyond the finances of the State. The Commonwealth could find £3,000,000 for the River Murray wafers scheme.
– The Commonwealth is not finding £3,000,000 for that scheme.
– I meant from the beginning. We voted £600,000 last week for that purpose.
– That is for the next two years. The intention of the honorable senator’s statement was to suggest that the Government was about to find £3,000,000 for Murray waters.
– -That was not my intention. I was speaking of expenditure covering a period. The Commonwealth has found and is finding a total of £3,000,000 for Murray waters. lt actually agreed originally to find £3,750,000, but a reduction has since been made in the estimated cost.
– What have Murray waters to do with Western Australia?
– The people of Western Australia have to pay their share of the money which the Commonwealth finds for that purpose, but when we ask for assistance in respect of what is largely a defence work, and therefore a federal concern, it is refused to us.
– How much money has the Commonwealth spent on defence in Western Australia in the last few years ?
– I do not know, but I am sure the total is small. In the pamphlet issued by the Government in opposition to the secession movement, the cost of defence is- charged to Western Australia on a per capita basis, but T. am one of those who believe that nothing like that proportion was spent in Western Australia, nor do we expect it to be. That is one reason why we prefer a system of government of our own.
– At least it shows that Senator Pearce is not pandering to Western Australia although he is a Western Australian representative.
– I have not made any such charge against the right honorable gentleman. I complain that he has violated his promises in regard to the Henderson naval base. <I have simply reminded’ him of the policy that he put forward in regard to this naval work, and have asked him to induce the Government, in view of the large sums now being found for defence, and of the fact that £1,130,000 has been already spent on the Henderson base, to resume construction there as soon as possible. If the Government does that, it will perform a great national service, and show the people of Western Australia that they are not entirely forgotten, so far as their requests for docking facilities and a naval base at Fremantle are concerned.
[1.5 a.m.]. - I know that Senator E. B.. Johnston is not concerned about the Henderson naval base. His real object is to show that Senator E. B. Johnston is a better friend of Western Australia than Senator Pearce is.
– It would not be very difficult to show that.
– Of course not, in the honorable senator’s opinion. In view of the imminence of the election, we quite understand why this is being done. I suggest to the honorable senator that in his spare time he should read The Case for Union, in which he will find an authoritative story of the Henderson naval base. The account is compiled, not by me, but by the naval authorities. On page 117 of The Case for Union, commenting on statements being made in the Case for Secession in terms similar to those used by the honorable senator to-night, the following appears : -
Dissatisfaction is expressed in the case for secession with the non-attainment of the strengths recommended in the Henderson and Jellicoe reports which would have enabled ships to be stationed in Western Australia after provision of the necessary base facilities . . Changes in circumstances since the date of the Henderson report in particular are another factor to be allowed for. The occurrences of the Great War, with its added burdens of war debt and repatriation expenditure radically altered the budget position. There has also been the development of the Singapore Naval Base and the growth of importance of Darwin. The consequence of the financial aspect has been that the limited amount available for naval defence has been absorbed in maintaining the Royal Australian Navy Squadron at a much lesser strength than that envisaged by the reports……
It may be added that no development in the naval policy of the Commonwealth takes place without the advice of the authorities in Britain being sought, and it was they who recommended, in view of all the considerations referred to, that the development of Cockburn Sound as a repair port be abandoned.
I specially commend the last statement to Senator Johnston. I may also say, for his information, that he could not have cited a better illustration of the necessity for adopting the policy which I suggested of continuity irrespective of party. It was the Fisher Labour Government that began the establishment of that base. It was the Liberal Government, led by Mr. (afterwards Sir Joseph) Cook, and including Senator Millen, that on taking office abandoned work on the base, after trying unsuccessfully to find a foundation for a graving dock. Owing to the limestone and cave nature of the country a foundation could not be obtained. The State Government had already had a similar experience in Fremantle Harbour. The war then broke out, and, after peace was established, Australia had to face a great war debt; and the responsibilities of repatriation. The government of the day was therefore not prepared to undertake any new defence expenditure. In the meantime, strategy had altered, and the British Government had approved of the establishment of the Singapore naval base. It was the Admiralty which, after the decision to construct the Singapore base had been reached, recommended that the Henderson base should not be re-started on the lines originally put, forward by Admiral Henderson. It should be remembered that when the Admiral made his report, the Singapore base was not contemplated or even thought of. I trust that Senator Johnston, when he ‘–appeals to the electors of Fremantle, will tell them these facts also.
– “Will not the honorable senator come and tell them something?
– I. have not bothered to do so. I have allowed Senator Johnston and other critics to gain all- the glory and credit or discredit arising from attacking me and saying to the electors of Fremantle that Codlin, and not Short, is their friend. For many years I have allowed the honorable senator and others to put all the blame for this policy on my shoulders, knowing all the time that I could have proved from the official documents, including the authorized history of the Commonwealth, that it was not the government of which I was a member, but. the Liberal Government in which Senator Millen was Minister for Defence, that stopped the work at the Henderson naval base. I could have shown, also, that the work was not resumed by a later government to which I belonged, on the advice of the Admiralty, because the Singapore base was being developed. Perhaps the honorable senator, when be is addressing the electors, or sending his speech to the Fremantle newspapers, will send them these facts at the same time.
Question resolved in the affirmative.
Bill read a first time.
[1.10 a.m.]. - I move -
That the bill be now read a second time.
Supply has already been granted for tho first three months of the present financial year, that is, to the 30th September, 1934. This bill provides for expenditure for a further three months - up to the 31st December next - including provision for salaries due on the 21st December. The bill is based on the Estimates of expenditure for the present financial year. It is not possible to base this Supply Bill on last year’s appropriations because certain proposals outlined in the budget provide for expenditure in the present year on a slightly higher scale than that of last year. The budget proposals involving increased expenditure have been, or are being, implemented under special bills, such as the Financial Belief Bill. By that bill, portion of the salaries and wages deductions made under the Financial Emergency Act is being restored. Therefore, it is necessary, in order that salaries and wages may be paid on the higher scale, that the present Supply Bill should be based on the Estimates for 1934-35. The Estimates for 1934-35 also include increased expenditure for carrying on the ordinary services of the various departments, and particularly the increased expenditure which tho Postmaster-General’s Department must incur to deal with the greater volume of business. This also makes it necessary to base the present Supply Bill on the new Estimates. As all tho major policy proposals of the budget affecting expenditure have been, or are being, deB.lt with in special bills, they do not call for explanation or debate in the consideration of the Supply Bill now presented.
The total amount to be appropriated for 1934-35, under Annual Votes, but exclusive of special appropriations, is £22,516,417. On this basis, the amount required for the-first six months of the year would be £11,258,209. Tho first Supply Bill for 1934-35 covered a total sf £6,079,175. The total of the present bill is £5,819,030. Taking the two Supply Bills together, the total is £11,898,205. Comparing this sum with half the amount to be appropriated for the year, it is found that the provision in the Supply Bills exceeds half the necessary annual appropriations by £639,996. This excess is chiefly accounted for by the fact that more than half the annual appropriation in respect of Treasurer’s Advance was included in the first Supply Bill, so that there would be a margin for contingencies. The total provided in the Estimates for the year for Treasurer’s Advance is £2,000,000, while the amount included in Supply Bill No. 1, in respect of Treasurer’s Advance, was £1,500,000. It has also been necessary to provide in this bill the full amount required to cover the cost of the elections, namely, £111,000. Under refunds of revenue and certain other votes in relation to which periodical payments fall due, the provision in the Supply Bills for the first six months slightly exceeds half the amount required for the full year. The amounts shown in this bill may be summarized a* follows : -
As the general position of the Commonwealth finances was placed before the Senate recently, I do not think that any further explanation regarding them, or the moneys included in the present bill, is necessary. I commend the measure to the Senate. Tt must he passed, and it is hoped that it will he given a speedy passage. There have been abundant opportunities for discussion on previous Supply Bills and other measures that have been submitted.
– I have no desire to’ obstruct the passage of the bill, but it is fair to point out that the Government, after a recess of seven months, is springing many important measures upon Parliament. That may be quite satisfactory from the Government’s point of view. But from the point of view of the people as a whole, the Government has failed to achieve much. Now, e<n the eve of a general election, the’ Government has submitted a number of proposal*, which we shall have no opportunity adequately to consider. Honorable senators, apparently; are anxious to hurry back to their constituents. Tills Government is supposed to be the custodian of the destinies of this country, but 1 wonder whether Ministers are concerned with the welfare of Australia so much as they are concerned about themselves. At the moment, war is in the air. The Government wants to go to the country. So do we, and, for our part’, the Government may bring forward any number of measures to bo rushed through in the last hours of the session. They ave the Government’s responsibility; not ours. AVo shall offer no opposition to them.
Question resolved in the affirmative.
Bill read a second time, and reported from “committee without, requests or debate; report adopted.
Bill read a third time.
Motion (by Senator Sir George Pearce) agreed to-
That the Senate at its rising adjourn till to-day at 1 1 a.m.
Senate adjourned at 1.22 a.m. (Thursday).
Cite as: Australia, Senate, Debates, 1 August 1934, viewed 22 October 2017, <http://historichansard.net/senate/1934/19340801_senate_13_144/>.