17th Parliament · 2nd Session
ThePresident (Senator the Hon. Gordon Brown) took the chair at 10.30 a.m., and read prayers.
– Will the PostmasterGeneral lay on the table, or make available to honorable senators, the Webb Report on War Atrocities, to which reference was made in a statement in the House of Representatives yesterday?
– I shall consult with the Attorney-General, and ascertain whether -the request can be complied with.
– I regret to announce to the Senate the death yesterday afternoon of Mr. Grosvenor ArundellFrancis, a former member of the House of Representatives. The late Mr.Francis was elected to the House of Representatives for the Division of Kennedy, Queensland, in 1925, and was re-elected for the same division in 1928. He was a member of the Public Accounts Committee from March, 1927, to September, 1929, being chairman from August, 1929. I move -
That the Senate expresses its deep regret at the death of Mr.Grosvenor Arundell Francis, former member of the House of Representatives for the Division of Kennedy, places on record its appreciation of his meritorious public service, and tenders its sincere sympathy to his widow and family in their bereavement.
– On behalf of the Opposition, I second the motion, and join with the Postmaster-General in expressing appreciation of the services of the late honorable gentleman, and sympathy with his widow and family in their bereavement.
Question resolved in the affirmative, honorable senators standing in their places.
– by leave - Yesterday, the Leader of the Opposition (Senator McLeay) inquired whether a secret meeting of senators and members would be held to discuss defence matters, including movements of the Australian Military Forces. I have discussed the matter with the Acting Prime Minister (Mr. Forde), who has assured me that the request will be seriously considered by the Government before the Parliament re-assembles next year.
– by leave - As this is the last meeting of the Senate for the year, I direct the attention of the Acting Minister for the Army (Senator Fraser) who represents the Minister for Munitions in this chamber to what I consider to be a serious charge in connexion with the modern X-ray plant at Penfield, Salisbury, in South Australia. It appears that the men working in the munitions factory at .Salisbury are asked to do work which is injurious to their health. The policy of the Government has been to have its employees at that factory X-rayed periodically, in order to discover whether they have contracted tuberculosis. I make no charge against Ministers because I realize that it is impossible for them to keep closely in touch with all that takes place in such establishments. The woman- in charge of the X-ray plant at Salisbury is highly qualified, having Melbourne University degrees, but, for some unknown reason, from the 1st January to the 30th June, 1943, she was allowed to X-ray only 257 employees, whereas she states that she could deal with 240 employees during a week of six days. Since the Government has an expensive and modern X-ray plant there, and a qualified operator, it is difficult to understand where the blame lies.
– - The tubes may be faulty.
– The plant is in first-class- order. The operator states that she has uncovered the machine only on 95 days in, six months. The most efficient and modern method of detecting tuberculosis is to use a plant of this description, and great dissatisfaction has been caused by the recent dismissal of many thousands of employees without an X-ray test. The operator further says that two of the dismissed employees were working in the canteens, and, after their dismissal, they were examined by outside medical men, who found them to be suffering from tuberculosis in a very advanced form. 1 have received the following letter from one of the dismissed men -
I was examined and X-rayed before being sent to employment at Penfield on the 25th of January, 1943.
I was placed in T.N.T. approximately April, 1943, contracted n rash and was receiving the health rate of ls. (id. a day from them right up to the date of my dismissal on 10th November, .1943.
I was sent to a Dr.- once in about every three weeks, and he did not even examine me only asked one or two questions regarding how I felt. On my last visit to him he asked me how I felt and I told him I was not at all well. His reply was to go and see a doctor. I then told him that I thought I was seeing one then, and he swore at me and wrote on my papers and sent me away. I then received my notice of dismissal from the factory. One “of the chemists inquired into my case and was told it was for health reasons that I was being dismissed.
Had I allowed Dr.- to have cleared me, and the health rate suspended, I may have still .been left at Penfield. I was dismissed on 10th November, 1943, from Penfield without a medical examination or X-ray, and I was also paid the health rate right up to and including 10th November, 1943, which clearly points out that I was not clear of the T.N.T. rash. I am still suffering from same, and the reason I have not reported back, being that I doubted if I would get a fair deal. 1 should therefore come under compensation for neglect of treatment, also not being cleared of T.N.T. rash before I was dismissed.
I shall hand this letter to the Minister representing the Minister for Munitions. The operator in charge of the machine states -
I know this man. I can give him a good reference. He is a returned soldier with three years service in World War 1. He was dismissed in November, 1943, and during that month the X-ray plant waa not used to X-ray one person.
In view of the muddling that is evidently going on, it is high time to hold an independent inquiry into this specific charge. “Will the Minister give an assurance that when persons bring these matters to the notice of members of Parliament they will noi; be victimized? The Labour party has always supported that principle, which ] think is just. If the circumstances are as stated in writing, an independent inquiry is obviously necessary. It is dreadful to think that thousands of employee? of the Government, some of whom are engaged in, dangerous work, have been dismissed without a medical test, although a modern X-ray plant is available. Somebody appears to be guilty of what could be termed criminal neglect.
– I draw the attention of the Senate to’ the fact that a statement has been made by leave which should more properly have been made on a motion for the adjournment of the Senate. In Rulings of the President of the Senate I find that President Givens ruled on the 6th November, 1918 - 532. A senator, in asking for leave to make a statement, should indicate the nature of it, thus enabling the Senate to judge whether permission should be granted, but the Standing Orders limit such statements to matters of a personal nature or concerning the business of the Senate.
I hope that in future when matters such as the Leader of the Opposition (Senator McLeay) has just raised are brought before the Senate, the proper course will be followed, and that they will be raised on the motion for the adjournment of the Senate.
Raymond Terrace Go-operative Dairy Company.
– “Will the Minister representing the Acting Minister for Trade and Customs inform the Senate whether it is a fact that, by a mutual arrangement, the Raymond Terrace Co-operative Dairy Company, in the interests of all suppliers to its factory, struck an average cartage charge for the conveyance of milk from the farms to the factory, and that because such action in some way breached the Prices Regulations, the Prices Commissioner directed the company to revert to its old practice? Is it also a fact that the company frankly sought the authority of the commissioner to make the changes which it did make, and was given authority to do so by the Deputy Prices Commissioner in New South Wales, but has since attempted in vain for about nine months to have the matter legally determined by the commissioner, in a manner already agreed upon as being satisfactory to all the parties concerned, and in a manner which in no way affects the price of milk or butter? Will the Anting Minister for Trade and Customs take such steps as are necessary to have this long drawn out negotiation determined by the Prices Commissioner at a reasonably early date?
– As the honorable senator informed me earlier that he would bring this matter forward, I have consulted with the Acting Minister for Trade and Customs, who assures me that he will discuss the question immediately with the Acting Prices Commissioner and see that an early conclusion if arrived at.
– Will the Minister for the Interior take the necessary action to ensure that adequate accommodation will be made available in Canberra for those whose business will necessitate their being here for the opening of the next session of the Parliament by the GovernorGeneral elect, the Duke of Gloucester ? Will he also take steps to prevent increases of tariffs, so that the public may not be exploited?
– This matter is under consideration by the Government. In view of the limited accommodation available in Canberra only those people who will have business here in connexion with the meeting of the Parliament will be able to get accommodation. I assure the honorable senator that the matter is being watched closely.
– In view of the representations that have been made by local governing bodies in outback districts for better telephonic facilities; the increased revenue of the Postmaster-General’s Department ; as well as the extension of social services in accordance with the policy of the Government: will the PostmasterGeneral review the condition* under which telephonic services are provided in country districts? Will he regard such services as a necessity and, ae far as is practicable, provide outback areas with telephonic facilities?
– During the last sittings of the Parliament, I intimated that it was the policy of. the Government to provide better telephonic services to people living in outlying areas. Accordingly, I appointed a committee to make investigations with a view to reducing the cost.
asked the Minister representing the Minister in charge of War Service Homes, upon notice -
– The Minister in charge of War Service Homes has supplied the following answers: -
asked the Minis ter representing the Attorney-General, upon notice -
– The AttorneyGeneral has supplied the following answers : -
Bill returned from the House of Representatives without amendment.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motion by Senator Ashley) read a first time.
Second Reading. Senator ASHLEY (New South WalesPostmasterGeneral) [10.55]. - I move - That the bill now be read a second time.
The object of this bill is to ratify an agreement dated the loth November. 1944, entered into between the Commonwealth and the States for the amendment of the Financial Agreement. The amendment is principally designed to clarify certain matters of sinking fund procedure. Under the Financial Agreement, whichwas entered into between the Commonwealth and the States in December, 1927, and was later validated under the provisions of the new section 105a of the Commonwealth Constitution, the Commonwealth took over all State debts, and provision was made forthe establishment of a sinking fund for the redemption of those debts. With the exception of specified classes of borrowings, the sinking fund contributions were fixed at 7s. 6d. per cent, per annum on the debts of the States as at the 1st July, 192-7, and 10s. per cent, per annum on loans raised for and on. behalf of the States subsequent to that date. Of the amount of 10s. per cent, per annum, the State concerned was required to pay 5s. and the Commonwealth a similar amount. The principal exception, to this sinking fund contribution of 10s. per cent, per annum on loans raised after the 1st July, 1927, related to loans raised to finance State revenue deficits. In, respect of such loans the Financial Agreement provides that the Commonwealth shall not be required to make any contribution to the State sinking fund, and the State concerned is required to make a sinking fund contribution at the rate of not less than 4 per cent, per annum for a period sufficient to liquidate the loan, these contributions being deemed to accumulate at the rate of 4i per cent, per annum compound interest. During the depression, years, from 1929-30 onwards, abnormal deficits were experienced by all State Governments, and the Loan Council arranged, where necessary, to finance those deficits up to and inclusive of the year 1934-35 by means of borrowings from the Commonwealth Bank under the security of Commonwealth treasury-bills. The total amount so borrowed was approximately £53,000,000. The treasurybills issued as security for these borrowings had a currency of three months only, and were taken up by the Commonwealth Bank. They were renewable from time to time. It was considered that the Financial Agreement did not specifically provide for sinking fund contributions in respect of borrowings of this, character, but the Loan Council agreed that some sinking fund provision should be made for such borrowings. Accordingly, arrangements were made for contributions to be paid on the same basis as in respect of loans raised for purposes other than revenue deficits, viz., a sinking, fund of 10s. per cent, per annum, of which the Commonwealth provided 5s. and the State concerned 5s. Contributions on that basis have been paid to the- National
Debt Sinking Fund for each year up to the 30th June, 1944. A question was recently asked as to whether this procedure was strictly in accordance with the provisions of the Financial Agreement, and legal advice on the question was sought. Opinions have now been received from four leading counsel, who agree that the proper contributions pay.able in respect of these borrowings are contributions by the States concerned and not by the Commonwealth, and at a rate of not less than 4 per cent, per annum, as in the case of ordinary loans raised to meet revenue deficits. In other words, the loans in question should be liquidated by State sinking fund contributions for approximately 17 years, instead of by contributions for 53 years, and no pa;v ment should be made by- the Commonwealth. The deficits totalling £53,000,000 were, as I have already stated, incurred in abnormal circumstances, and had the Sinking Fund contributions at the time been paid at the rate of 4 per cent, per annum, they would have involved still further increased deficits and consequent, further borrowings to enable the additional Sinking Fund contributions to be paid.
The circumstances arising out of these transactions were carefully considered by the Loan Council, as the result of which a recommendation was made to the Commonwealth and State Governments that action be taken to amend the Financial Agreement to validate the Sinking Fund contributions that have already been made up to the 30th June, 1944, and to establish,, as from the 1st July, 1944. a Sinking Fund contribution at the rate of 1 per cent, per annum. The States have undertaken to redeem £7,000,000 of the bills from their cash resources. The National Debt Commission is to apply £3,000,000 during 1944-45 to the redemption of treasury-bills,, this being approximately the total Sinking Fund contributions to date in respect of these treasury-bills. The new Sinking Fund of 1 per cent, per annum is estimated to liquidate the remainder of this debt, viz., £43,000,000,, in a period of 39 years, from the 1st July, 1944. Of the amount of 1 per cent, per annum, 5s. per cent, will be paid by the Commonwealth and 15s. per cent, by the States- concerned. The
Commonwealth Bank has agreed “to convert these treasury-bills, which have always been, regarded as a short-term debt, into debentures with a fixed currency of 39 years, and under the proposals, the debentures will be redeemed from to time from the 1 per cent, contributions to which I have referred. These proposals provide a definite arrangement for the redemption of the treasury-bills which were discounted -by the Commonwealth Bank to finance the abnormal deficits arising out of the depression, and I believe that they are reasonable in all the ‘circumstances. The proposals have been incorporated in the amending Financial Agreement which is bow being submitted in this bill for ratification by the Parliament. The proposals involve a contribution of 5s. per cent, per annum on the part of the Commonwealth towards the States’ debts in question,. This contribution was also considered reasonable in view of the very serious financial position in which the States found themselves during the depression years, and having regard to the difficulties which the States were experiencing in place their finances on a more stable basis, lt is considered reasonable that the Commonwealth should continue to extend this same degree of assistance towards the liquidation of those particular liabilities:.
Provision is also made in the amending Financial Agreement, which the Parliament i3 being -asked in this bill to approve, that the Sinking Fund contributions prescribed by the Financial Agreement shall be calculated on the basis of the mint par of exchange prevailing on tha 1st July, 1927, i.e., the date from which the original Financial Agreement took effect. When the Financial Agreement was entered into in 1927, Australian and sterling currencies were at par, that is to say, the Australian £1 was the equivalent of the £1 sterling. By January, 1931, the £1 Australian had depreciated to the basis of £130 Australian equal to £100 sterling. That was, in December, 1931, varied to the rate £125 Australian equal to £100 sterling, and that rate has- been maintained unaltered since that date. During that period the exchange rate between London and New York has fluctuated considerably. These variations in the exchange rate between Australia and London and New York were never contemplated when the Financial Agreement was entered into, and contributions throughout the whole period, from the 1st July, 1927, to date, have been made on the basis of the mint par of exchange as existing at the commencement of the agreement.
Legal opinion has now been received to the effect that in respect of the new loans raised after the 30th June, 1927, sinking’ fund contributions in respect of overseas debts should be calculated in the currency of the country in which the loan was raised or its equivalent in Australian currency converted at the current rate of exchange at the time the payment is due. The contributions actually paid, as I have explained, -axe not in accordance with this opinion. Bates of exchange have always been subject to variations, but it was never contemplated that the prescribed annual sinking fund contributions would vary in accordance with movements in the exchange rates. Moreover, it was no doubt intended, and is obviously desirable, that the annual charges to the State budgets should be reasonably stable. The prescribed sinking fund contribution of 10s. per cent, per annum for 53 years provided a reasonable margin to cover normal variations of exchange rates and other factors such as differences in market prices of securities re-purchased from sinking fund moneys. The very substantial variation of the exchange rate which had occurred in the period to 1931 was, however, one which could not be foreseen and was not provided for. The effect of this variation on the incidence of the sinking fund scheme inherent in the original Financial Agreement will depend upon future movements of exchange rates during the period of 53 years which commenced on the 1st July, 1927. It is, of course, not possible at this juncture to make any forecast as to whether the present rates will be maintained or whether there will be any change. For these reasons the Government supports the amendment in the new agreement, which requires contributions to be calculated on the basis of the mintpar rate prevailing on the 1st July, 1927. It is proposed that this provision be made retrospective from the 1st July, 1927, in order to validate past procedure.
The amending Financial Agreement also makes provision for the member representing the Commonwealth to be the chairman of the Loan Council. Up to the present the Commonwealth representative has been made chairman of the Loan Council by resolution of the council itself. The amending Financial Agreement makes this a statutory provision.
The Financial Agreement prescribes that the Commonwealth and each State shall from time to time submit to the Loan Council a programme setting forth the amount it desires to raise by loans for each year. In actual practice it has not been practicable to relate the borrowings during a year to the actual loan expenditure during that year. Public loan raisings must be arranged at convenient intervals, and it has been customary for moneys to be borrowed towards the end of each financial year sufficient to meet the requirements during the early part of the new financial year until a further loan raising becomes practicable. This procedure is not strictly in accordance with the Financial Agreement, and it is now proposed in the amending Financial Agreement that the loan programmes to be submitted by the various governments shall be the programme of amounts desired to be raised during each year and not loans raised for each financial year. This involves no alteration of procedure but merely brings the provisions of. the agreement into line with the present practice.
The Financial Agreement authorizes the Loan Council to determine each year the amount of money which shall be borrowed to meet the requirements of governments and to allocate that total amount by unanimous decision amongst the governments concerned. If the members of the Loan Council fail to arrive at a unanimous decision as to this allocation, the total amount borrowed is required to be allocated in the following manner : -
Up to the present it has always been possible for the Loan Council to arrive at a unanimous decision in regard to the allocation . of the total annual loan borrowings, but in the event of the formula being applied at any time the question would inevitably arise as to the inclusion or otherwise in the term “ net loan expenditure “ of amounts applied from loan borrowings during the preceding five years for the purpose of financing State revenue deficits. This matter was recently considered by the Loan Council and it was decided to recommend to the various governments tha< the Financial Agreement be amended to provide that the term “ net loan expenditure “ shall not include expenditure for the funding of revenue deficits or tomeet revenue deficits. All governments have agreed to this proposal and it is incorporated in the amending Financial Agreement for which approval is now sought.
Further, in the immediate post-war period it is anticipated that relatively large sums will need to be included in the annual programmes of the various governments for the purpose of financing projects for post-war reconstruction such as housing, soldier land settlement, &c. The arrangements that may apply in connexion with the implementation of these post-war schemes may possibly be such as to render it inequitable for such borrowings to form the basis of allocation of the programmes of future years. Moreover, transactions have occurred in the past which the Loan Council has agreed should not be regarded as expenditure for the purpose of the formula for allocation of annual loan raisings.In accordance with the recommendation of a recent conference of Commonwealth and State Ministers, provision has now been made in the amending Financial Agreement which will enable the Loan Council by a unanimous decision to declare that any specified amount or class of expenditure shall not be included in “ net loan expenditure “ for the purpose of the clause in the Financial Agreement which provides for allocation on the basis of the “ formula “ in the event of the Loan Council failing to reach a unanimous agreement.
There is no provision in the Financial Agreement at present to enable any State government to make a contribution to the sinking fund, for the purpose of redemption of. State debt, in excess of that which is provided for in the agreement. In the past, amounts have been received by the National Debt Commission in excess of the prescribed contributions and have been applied to the redemption of debt. These transactions have always been regarded as outside the scope of the Financial Agreement and have not been incorporated in the returns compiled by the commission. It has now been agreed by all governments to give statutory cover in the Financial Agreement for any future voluntary contributions which the States may wish to make to the National Debt Sinking Fund.
For many years it has been the practice in cases where loans are converted at a discount, for the National Debt Commission to be asked to apply sinking fund moneys to the redemption of’ unconverted stock to an extent equivalent to the total amount of the discount on the converted loan. In 1937 the National Debt Commission raised an objection to this procedure on the grounds that whilst sinking fund moneys could be legally used in this way, it was not a desirable practice, as it had the effect of expending sinking fund moneys without any resultant reduction of debt. The National Debt Commission suggested to the Loan Council that it would be prepared to continue this procedure provided the government concerned in any such case agreed to reimburse the sinking fund from revenue by equal annual instalments over the period of the new loan. The Loan Council agreed to this procedure, which has been in operation since that date. These repayments are, however, outside the scope of the sinking fund provisions of the Financial Agreement, and the arrangement in regard to the annual repayments is therefore one which could not be legally enforced by the commission. It is therefore desirable that statutory provision be made in the Financial Agreement to cover this procedure, in order to put the approved arrangements on a more satisfactory basis. The governments have unanimously agreed to this course and provision has accordingly been made in the amending Financial Agreement now submitted for parliamentary approval. The proposed amendment is to take effect from 1st July, 1937.
In preparing the amending agreement, the opportunity has been taken to consolidate the original Financial Agreement by including therein the amendments previously approved, together with those provided for in the present amending agreement, and to re-number the clauses throughout in such a manner as to facilitate reference. The consolidated Financial Agreement appears as the schedule to the amending agreement. Legislative action is being taken in all State parliaments with a view to ratifying the amending agreement. The agreement will come into operation when the necessary legislation has been passed in all parliaments. The ratification of this amending Financial Agreement will clarify a number of questions now at issue and will place the operation of the Financial Agreement on a more satisfactory basis.
Debate (on motion by Senator Leckie) adjourned.
Debate resumed from the 30th November (vide page 2457), on motion by Senator Fraser -
That the bill be now read a second time.
– I support the second reading of this bill. Criticism of the measure has been directed mainly against the Government for not supplying honorable senators with sufficient information. The information supplied could have been made available some time ago, in order to give honorable senators an opportunity to inform their minds on some of the details of the project. They would then have been able to form a more considered judgment on the proposal to produce aluminium ingots in Tasmania. .The preamble to the bill states why the industry is to be established in the Commonwealth. During the last war, two essential commodities in Australia were zinc and steel, both of which were required for defence purposes. ‘Prior to that war, the bulk of Australian zinc concentrates was sent to Germany, but when war broke out that trade was discontinued, and Australia found itself extremely short of zinc. The smelting of zinc concentrates was accordingly undertaken in Tasmania. Tasmania lias now been chosen as the State in which the aluminium industry is to be established - as near as possible to the source of the necessary electric power. A number of criticisms was levelled, even in those days, against the establishment of the zinc industry in the ‘Commonwealth. Aluminium is as essential as. zinc and steel for the manufacture of machines and materials . required for defence purposes. Several honorable senators have reminded us of the intensive campaign carried on some time ago to collect scrap aluminium all over the Commonwealth in order to meet the pressing needs of the Government for the manufacture of aeroplane parts and other war equipment. That should be a lesson to us. Those who are responsible for proposing the establishment of this industry are to be commended for saving Australia, I hope, from another such experience. “We cannot altogether disregard the probable cost of the industry, and its prospects as a sound business undertaking, but I suggest to those who insist that sound business principles must be applied to this undertaking that the first consideration is to establish the industry in the Commonwealth in order to meet national needs. For the last five or six years, if not longer, a great deal of thought has been given to that objective. Many honorable senators will agree that private enterprise is quite properly entitled to play a very important part in the development of Australian industry. That applies even to honorable senators opposite, who decry private enterprise because they say that the first consideration of private enterprise is to make profits. At the last general elections, the Prime Minister (‘Mr. Curtin) said that the Government’s policy was to engage in certain commercial activities, and also to encourage private enterprise to co-operate, with the Government in the development of the resources of the Commonwealth. The production of zinc from concentrates was established in Tasmania because , of the cheap electric power available. .For the same reason this industry is .to be established in that -State. -Senator leckie said that, as large deposits of bauxite existed in Victoria, the obvious thing to do was to establish the industry where its heavy raw material was to be obtained. That practice is not followed in respect of all industries. .The Broken Hill Proprietary Company Limited transports its iron ore from Iron Knob to Newcastle, and 300,000 tons of limestone is sent each year from Tasmania to Newcastle, so that that company is taking the heavy material to the source of power. The same thing applies to the manufacture of superphosphates. Comparatively little power is required for that industry, but I am sure that Senator Leckie would not suggest that superphosphates should be manufactured at Ocean Island and Nauru and thence transported to Australia. The zinc industry transports its heavy raw material from Broken Hill to Tasmania. Large Canadian industries carry their heavy material to the source of power. I would not suggest that Senator Leckie id parochial, or that he advocated the establishment of the industry in Gippsland because he represented Victoria, but I remind him that the Premier of Victoria (Mr. Dunstan) undertook a campaign in which he advanced all the reasons he could for establishing the aluminium industry in that State. Senator Leckie asked if any individual would think of investing his money in this industry. I remind the honorable senator of what has happened in regard to the establishment of industries generally in Australia. Would any individual have invested his money in any of our manufacturing industries in Victoria or in any other State without the assurance of tariff protection? All those enterprises were undertaken only when their promoters were assured of adequate protection, so that they would not be exposed to outside competition in the early stages cif their development. Indeed, the protective duties on products of most of Australia’s industries have never been lowered since they were first imposed. What was said of the establishment of the paper-making industry and the steel industry is being said, now of this undertaking.. It was claimed that steel and papercould be imported much cheaper than they could be manufactured in Australia; but surely we should profit by experience and take steps to ensure that never again shall we be caught in the position in which we found ourselves during the war of 1914-l8 and this war. We must learn the lessons of history. Without reservation, I pay a tribute to the remarkable achievements of the captains of industry in this country. They have played a great part in the development of industrial undertakings, and in the course of this war, have co-operated with the Commonwealth Government to the greatest degree possible to bring about a total war effort. There are other vital war materials besides aluminium, the supply of which was cut off when war broke out. Take for instance quinine, which plays a vital part in tropical medicine: All our supplies of quinine came from what are: now Japanese-held territories, but. thanks to the efforts of the: Council for Scientific and Industrial Research,, we are. now. almost able to. meet our. own requirements by the manufactureof quinine substitutes. The necessity was. such that. our. best scientists got. to work.. Similar achievements have been made inthe production of other essential commodities including serums of various types, and. of course, optical lenses. Today lenses of a quality equal to the best in the world are being, manufactured by Australians from Australian raw materials, the production of which has been developed following intensive research., Now we are to be self-sufficient in another, vital war material, aluminium. Itis asked what the cost of production will be: We have not been given details of: estimated! costs, but the benefit of undertakings such as this cannot be measured in pounds; shillings and. pence. Take, for instance,the Sydney Graving Dock: I should not be surprised if the final cost of that undertaking proved to be more than: double the original estimate.; but. whatever the cost, the completion of. the dock will be a. great accomplishment.. The work has been carried out in. the face of many difficulties which could not be forseen when. the. project was first undertaken.
Australian engineers- and artisans have done a. magnificent job. The provision of major docking facilities in this country is a substantial contribution to the defence not only of Australia, but also of the Empiregenerally. I cannot say, nor doI think the Government can say definitely what the establishment of the aluminium industry will. cost. Although it may not be regarded truly as a war undertaking - we all hope that the war is now drawing to an end - it will be of immense importance to the future defence of. this country. I recall that during the last war, when Senator J. B. Hayes’ was: Minister for Works in. the then Government of Tasmania of. which I also was a member, an agreement’ was signed with Electrolytic Zinc Company of Australasia Limited which led to the establishment of the zinc industry in Tasmania. That was a war measure, although production was not actually commenced untilabout1919 or 1920. The industry was soundly established, and has been carried on ever since as a commercial enterprise. To-day it is comparable with- the Broken Hill Proprietary Company Limited, and has been able to make a substantial contribution to the defence of Australia in this war.
It is argued by some honorable senators that this proposal should be submitted to the Tariff Board for examination and report; but what would be the TariffBoard’s attitude towards the general defence policy of his country? The: proposal! to construct the Sydney Graving! Dock was not submitted to the Tariff Board, nor were other projects such as the establishment of the shipbuilding industry at Whyallar. There was a crying need for thesethings, and immediate steps were taken to fill that. need-. I do not suggest that industries: should be established throughout the length and breadth of this country regardless of cost. The money involved must always be a consideration. At the Imperial Conference held in London, just prior to the outbreak of war Australia was advised of what was likely to happen to the supply of certain essential materials should war occur. It was made clear that in certain circumstances the export of these commodities from. Great Britain to this country might cease, and, in fact, those circumstances did arise. We should learn the lesson of those times, and ensure that a similar position shall not arise in the future. It is true to say that in order to keep peace throughout the world we must he prepared for war, and to defend ourselves. I am not in a position to say whether or not this industry will be profitable in pounds, shillings and pence, but nothing has paid such valuable dividends to the Australian people - the shareholders in this nation - than our war industries without which our contribution to our own defence and to the war effort of the United Nations generally would have been insignificant.
Naturally I am pleased that the aluminium industry is to be established in Tasmania. I can assure honorable senators that the choice of Tasmania has not resulted from any undue influence being brought to bear upon the Commonwealth. Investigations were made all over Australia and the deciding factor was the supply of cheap electricity. I am sure that no honorable senator will grudge Tasmania this concession, and no matter what location had been decided upon for this undertaking, I am sure that every good Australian would have been willing to concede that the choice had been made without prejudice and with the best interests of the country in view.
There is one other aspect of this matter to which I shall refer. At Wangaratta in Victoria a factory has been established for the processing of scrap metals and I take it, aluminium. Critics of this measure have claimed .that the £3,000,000 to be subscribed by the Commonwealth and the State of Tasmania, for the establishment of the industry will :be wasted, and that in any case Tasmania will not be able ito provide its share of the money. Tasmania has always met its financial obligations. Like some other States Tasmania suffers certain disabilities under federation, but provision is made in the Commonwealth Constitution for the payment of compensation for these disabilities. Tasmania has a population, of only 250,000 people but we were enterprising enough to launch out on a hydro-electric scheme during the war of 1914-18. On that occasion the Government of Tasmania expended £3,000,000, without assistance from the Commonwealth, upon the encouragement of war industries. Also, during the construction of our hydro-electric undertakings, the interest rate on loans was as high as 7i per cent. The foresight which was shown by Tasmania then, has been amply justified by results. To-day we have a hydroelectric scheme which is capable of enormous further development. Tasmania has invested between £7,000,000 and £8,000,000 in its industrial undertakings.
This is not a nationalization scheme. Private enterprise did not have sufficient encouragement to establish this industry. No doubt in normal times sufficient aluminium to meet this country’s needs could be imported at a reasonable cost, but looking to the future, I am sure that the people of Australia will approve of what is being done.
– Any anxiety that I might have had regarding the fate of the measure now before the Senate has been dispelled by the enthusiastic support it has. received from several honorable senators opposite. Reviewing the measure, I should say that there were three considerations to be faced. First, is the aluminium industry necessary in this country? Secondly, if so, where should it be established? Finally, can it be conducted on an economic basis? There are several alternatives open to any nation.
The nations could try to attain the Utopian ideal that each should concentrate on the production of those articles which climate, situation and other factors peculiarly suited it to produce. If the nations concentrated on such a scheme the need for international money would probably be eliminated. I believe that we should certainly eliminate wars. But any scheme which prevented international trade would be entirely subversive of all national ideals; it would reduce a country like Australia to the level of hewers of wood and drawers of water. That is not a scheme that I personally support. On the other hand, each nation might concentrate on being wholly selfcontained in its production. That, of course, leads to rivalries, and is a fruitful cause of wars. I do not subscribe to that idea, either, but I think that the middle course is the one that the nations must choose. It is necessary for a nation to be self-sufficient in those matters which are vital to its preservation. Whilst there are nations and national ideals the establishment of an industry, such as that which we are now considering, should be regarded as a matter of the greatest importance. It is the duty of the Government to look to the future preservation of the nation. I said that in my first speech in this chamber. I expressed the hope that an international body would be established which would be capable of not only eliminating war, but also convincing the people that it would give effect to that ideal. Until that ideal is attained, I desire to see Australia ready for defence in all circumstances. That is the duty of whatever government happens to be in control in this country.
Australia is an island continent. It can be approached only by the sea. Our first line of defence must necessarily be in the air, the second is the Navy, and the third the Army. The importance of the air arm cannot be over-estimated. My late friend and partner, Mr. Ogilvie, a former Premier of Tasmania, was in Russia in 1937. He had a conversation with Mr. Molotov, who said to him, “You will live to see the day when the cities of Australia will be bombed from the air by the Japanese “. Parts of Australia were bombed, but Mr. Ogilvie did not live to see the day; he died three months before the outbreak of the war. In 1939, the government of the day sought to raise a loan of about £8,500,000 in this country, but only some £4,000,000 was subscribed. A significant cable was despatched from Berlin on that occasion stating -
The failure of this loan shows that people holding an area of 3,000,000 square miles are not prepared to adequately defend themselves. Such a country constitutes a great attraction to nearby overcrowded Asiatic peoples.
Those facts were before us in 1939, and I hope that they will never cease to be before the minds of the governments of Australia. I hope that what Mr. Ogilvie urged at that time, that we shall see the skies of Australia black with aeroplanes, will come true. I want them to be made in this country from materials produced by ourselves. T applaud the Government’s announcement that it proposes to take over the control of interstate airlines, and I commend it for having undertaken the construction of aircraft. The complete success of both those undertakings will depend upon the development of the aluminium industry in Australia.
To those who urge that we should depend on stock piles in other countries I say that it would be uneconomic and unsafe ito do so. We rely at present on plants situated in America. It is not_ absurd to say that, through robot bombs launched, perhaps, from Japanese submarines, those plants are liable to attack even during this war. There is no certainty that the war will end in two years. We all hope that it will, but we cannot visualize the line-up of great nations in the future, and we may need aluminium which we produce in our own country before the present war ends. The suggestion has been made that we should need a stock pile of some 20,000 tons of aluminium. If we had it, even at £75 a ton, the price ruling at the commencement of the war, it would cost £1,500,000, which is the sum to be expended by the Commonwealth in the development of the aluminium industry in Australia. Having regard to storage and sinking fund charges, and the handling work connected with such a stock pile, the Commonwealth would be committed to an annual expenditure of at least £100,000, so that in fifteen years it would have dissipated in those overhead charges the total sum which it is now proposed to put into a permanent asset. If we are to foe dependent on overseas interests for the supply of aluminium, we shall be entirely in their hands in the matter of price. Honorable; senators know that, although a contribution was made to the Arvida plant, in the hope of ensuring safe supplies, and steadiness of price, Australia was placed on a differential basis at the beginning of this year. The price was increased by from 17 to 21 cents a ton, whilst at the same time the aluminium cartel reduced the price only to Canada and the United States of
America. I prefer that this country should control its own fate with regard not only to supplies but also the cost of production.
Other honorable senators have dealt fully with the great demand for aluminium and have referred to the fact that, since the advent of the metal in about 1890, it has become one of the major items of primary production in the world. We are aware of the enormous increase of the use of aluminium in this country, and I think that we are only at the beginning of the uses to which it will be put. Relying upon experience, and having regard to the development which we can envisage in the use of the metal, there is no danger of disposing of what stocks we may ‘have on hand at the end of the war, in addition to the total production that the Tasmanian plant in duc course will be capable of yielding. Prior to the outbreak of the war, thirteen countries had established aluminium plants. It will be noted that most of them have been engaged in the war. They are the United States of America, Canada, France, Germany, Switzerland, Austria, Great Britain, Norway, Italy, Russia, India, Japan and Hungary. The vital powers of the world have already discovered what Australia is only now about to recognize - that aluminium is a vital basic product. As to whether the plant to be established in Tasmania will bc an economical unit, I point out that the plant in Austria handles only 2,100 tons of alumina per annum, whilst the plant, in Japan deals with only 4,000 tons annually. In India and Hungary the plants are even smaller, but they have been established as commercial enterprises and not as governmental activities. The plant proposed to be established in Tasmania will be capable of producing 10,000 tons of aluminium annually.
The bill and the accompanying agreement show clearly that this industry i3 being launched solely for the purpose of promoting the naval, military and air defence of the Commonwealth and its territories. If there were any doubt about that, a perusal of the agreement itself would dispel it. Paragraph 3, subparagraph i, shows that the Commonwealth Government, in entering into the agreement, has seriously in mind the defence of this country, because the agreement provides that no action, question or decision relating to or affecting the policy of the Commonwealth in connexion with the naval, military and air defence of the Commonwealth and its territories, or with external affairs, shall be dealt with without the consent of the Commonwealth. A similar condition applies to any proposed sale of the undertaking, or of the products of the industry to aliens, or for export. The commission being set up by virtue of thus agreement is not to be allowed to enter into contracts for any lengthy terms which might interfere with the sudden defence needs- of the Commonwealth. A sufficiently good case has been presented by honorable senators to show that this industry is vitally necessary as a defence measure.
I shall now consider whether the Commonwealth has acted wisely in establishing the industry in Tasmania. Quite apart from defence strategy, the move should be applauded as being in the interests of decentralization, a policy which the present Government has adopted for the. purposes of encouraging an even development of this country.
As an enemy would need to have long lines of communication down the east coast of Australia before he could reach Tasmania, it will be seen that that State is considerably less vulnerable than is any other State. A further reason for the establishment of this industry in Tasmania was mentioned by many honorable senators when they stressed the availability of hydro-electric power and that State’s freedom from troubles in the coal-mining industry. Those power resources, already ample, are capable of extensive .development. I have been informed by the. Government of Tasmania - I cannot vouch for the statement - that the importance of electricity in the production of aluminium is such that- an increase of one-tenth of Id. in the cost of. a unit of electricity would add £10 a ton to the cost. As I have said, Tasmania has ample hydro-electric power available at a rate cheaper than it can be provided elsewhere in Australia. The proposal cannot be attacked successfully on the ground that the wrong site has been chosen for the establishment of this industry.
I come now to the question as to whether the plant can be worked economically. I point out first that cheap power is available, and secondly, that materials will not have to be transported great distances. Even should the Tasmanian bauxite deposits become exhausted within a comparatively short period - and I understand that that is a possibility, as they are not extensive - supply routes to and from Sydney, Melbourne, Adelaide and Perth naturally converge at Tasmania. In transporting the bauxite to the smelters, there are no great distances to be traversed as in the United States of America and Canada. In that respect at least, we shall have an advantage over the cartel.
A feature of the Government’s plan which I applaud is the personnel selected for the commission. If I dwell more on one of the individuals chosen than on the others it is because I know him better than the others. Mr. Smith and Dr. Wark, who will represent the Commonwealth, are well known as men of vision, experience, and administrative ability. Tasmania’s two representatives will be Mr Williams, the Director of Mines, a man with high technical qualifications, and Mr, L. R. Benjamin, the general superintendent of the Australian Newsprint Mills. I have the highest confidence in Mr. Benjamin. He is not only a great Australian, but also in the newsprint mills at Boyer, near New Norfolk, he has made a success of a project which in the early days had to encounter and overcome many difficulties and much hostility and criticism. Mr. Benjamin was told, both in Australia and in other countries, that paper could not be made from Australian hardwoods ; but he overcame the difficulties associated with the processing of those timbers. There is now a thriving industry and township at Boyer, and the company -contemplates expanding its premises at the cost of millions of pounds. More important still, from his company’s viewpoint, is the fact that the enterprise is being conducted at a substantial profit. Mr. Benjamin is a real Australian, a man of vision, ability, perseverance and courage. I expect him to play a live part, not only in establishing this industry on an economic basis, but also in conducting it in such a way that it will return profits to the Commonwealth and Tasmania.
There has been some criticism of the bill on the ground that sufficient foresight has not been exercised in determining the processing methods to be employed, and because detailed estimates of the costs of production have not been made available to honorable senators. In my opinion, these matters should properly be left to the decision of the commission. The agreement setting out the functions and powers of the commission leaves specifically to that body the responsibility for acquiring lands, obtaining supplies, determining processes, and making all other arrangements connected with the industry. I pass from the economic aspects of this industry confident that they are in safe hands in the men who have been selected for appointment to the commission.
My one regret with regard to the bill is that the activities of the commission are to be confined to the manufacture of ingot aluminium. The pure product is, T understand, not extensively used; its alloys are in much greater demand. I trust that in time, when this project has justified the confidence which I certainly have in it, the charter of the commission will be extended to enable it to produce aluminium alloys, and also to develop by-products.
I understand that in the House of Representatives a proposal was accepted by the Minister that no sale of the undertaking may take place without the consent of, not only both Houses of this Parliament, but also both Houses of the Parliament of Tasmania. That amendment will, I understand, he moved in this chamber when the bill is in committee, and I am sure that it will have the support of all honorable senators.
I regard the establishment of the aluminium industry in Tasmania as a long overdue recognition of a somewhat neglected small State. In this connexion, I pay tribute to the vision and enterprise of the Cosgrove Labour Government of Tasmania in recognizing the strategic importance of that State, and for urging so strongly Tasmania’s peculiar advantages in connexion with the production of aluminium that the Commonwealth authorities not only became interested, but also agreed to allow Tasmania to participate in the establishment of the industry. The co-operation of Tasmania has constitutional advantages. The contribution by Tasmania of £1,500,000 shows the faith of the Government of that State in the economics of the industry. As a general rule it is unwise to adopt the role of prophet, but I predict that the establishment of this industry will mean profits to Tasmania and the Commonwealth, and that every thoughtful Australian will have a feeling of greater security in the matter of the defence of this country. I trust that the bill will have a speedy passage.
– I was greatly interested in the speech delivered by Senator McKenna, particularly his references to the defence of this country. I hope that we shall all learn lessons from the immediate past, and that in future both Houses of this Parliament will discuss the matters which come before them in an atmosphere less saturated with party politics than has sometimes been the case. I commend the honorable senator for his comments on that aspect of the subject. Other honorable senators from Tasmania - Senators Herbert Hays, J. B. Hayes and Sampson - also stressed the defence aspect of the establishment of this industry. Although I could offer some criticism of the bill, for defence reasons alone I am compelled to support it. In saying that, I do not suggest that it will be possible for the industry to be in production in time to be of Value during this war; but I hope that in every move that this country makes in the future, the question of adequate defence will be a prime consideration. In view of the wide publicity given to certain comments made in connexion with this bill, I take this opportunity to say that, when I was Minister for Supply, I became associated with some of the men who have been criticized. It is regrettable that members of Parliament under cover of parliamentary privilege malign public men without proving their case, or even stating facts. I was personally associated with Mr. W. SI Robinson in the difficult early days of the war, and I found him to be a man of wide experience and great knowledge. He did a- splendid job for Australia in the darkest days of the war. I do not know whether he supports the United Australia party or the Australian Labour party, but I do know that when the Government of which I was a member went out of office, he was prepared to render the new Ministers, particularly the Minister for Supply and Shipping (Mr. Beasley) and the Minister for External Affairs (Dr. Evatt), all the assistance within his power. It is only right that I should pay that tribute to him. Reference has also been made to certain gentlemen of Collins House. I do not think that any one will deny that the late Sir Colin Eraser, or Mr. Essington Lewis, or Mr. Harold Darling and other men who have been so prominent in establishing various industries in this country, have rendered splendid service to Australia in this war. I had the privilege of appointing Mr. Harold Darling to the Australian Wheat Board, and I regret very much that the present Minister for Commerce and Agriculture (Mr. Scully) should have dismissed him and appointed in his place another man whom I think is less capable. When after the war we look back over the years that have passed we shall realize better than we do now what men associated with the iron and steel industries have done for the Empire in this war. I am reminded that the Minister for Munitions (Mr. Makin) when speaking at Whyalla said that he could not but praise Mr. Essington Lewis and the Broken Hill Proprietary Company Limited for the vision and splendid service that they had rendered to Australia. From time to time I have ex- pressed myself as not being in favour of government-controlled undertakings. I have criticized some persons who are frequently referred to as .bureaucrats - and my experience of some men is that that term is properly applied to them - but in Mr. A. V. Smith, the chairman of the commission, we have a man of great knowledge and experience. He has represented Australia in the United States of America and India with credit to himself and great benefit to the nation. He took control of the Department of Supply in the darkest days of the war, and when the history of Australia’s war effort is written it will be found that no man in the Commonwealth Public Service rendered greater service to his country during this war than he did. In matters of practical experience and general knowledge Mr. Smith can hold his own with the leading commercial men of this country. My criticism of government-controlled undertakings is due to the fact that, unfortunately, we have developed the habit of appointing inexperienced men to important positions. That is because Ministers are frequently influenced by political considerations. In saying that, J. do not suggest that that fault is confined to Labour governments. One reason why government-controlled and government-owed enterprises have been such a dismal failure in the past is that Ministers have not been strong enough to discipline those who have not been prepared to play the game. From experience, I should be more satisfied of the prospect of success, if the proposed undertaking were controlled by private enterprise. I have in mind, particularly, its ability to produce at prices below those which will be the case as the result of government control. A greater incentive to efficiency would exist in the industry were it controlled by people who had cash at stake in it. I repeat that very often capable public servants are not given a fair deal because Ministers have not the courage to stand up to their obligations. That is the fundamental cause of the failure of many publicly-controlled industries. In this respect I mention the Broken Hill Proprietary Company Limited and State-owned railways. “Whereas the former practically saved this country on the outbreak of war, the latter were a menace. Yet, when the iron and steel industry was established in this country many people said that it would not succeed. The fact is that owing to the high standard of efficiency in that industry, Australia, to-day, isproducing steel at a lower cost than any other country. The establishment of industries of this kind is linked with the problem of increasing our population. We shall never be able to develop this country unless we increase our population substantially. In this matter we must, perhaps, act somewhat selfishly. At the same time, when establishing large secondary industries we must always have regard to the maintenance of markets overseas for our surplus primary products. Otherwise, we shall find ourselves in serious difficulties. In 1939, the value of our imports from Canada totalled approximately £10,000,000, whilst we exported to that country exports valued at only £2,000,000. We must try to persuade Great Britain, the United States of, America and other Allied countries that it is to their own interests to help us to maintain markets for our surplus primary products, and, at the same time, realize that we must also develop our secondary industries as a means of increasing our population. Having regard to our geographical position, it is of the utmost importance from a defence point of view to not only ourselves but also Great Britain and the United States of America that we double our population as quickly as possible. The policy of the Government is to make money available to the States for the settlement of ex-service personnel on the land. This involves an increase of primary production, and an expansion of our markets overseas. In implementing such a policy, the Government must safeguard the interests of ex-service personnel who are established on the land. I believe that within three or four years’ after the cessation of hostilities we shall find it very difficult to find adequate markets for our surplus primary products at prices that will enable us to compete with other primary-producing countries. I have said on previous occasions that the greatest problems confronting Parliament are to establish peace in industry and to decrease costs of production in order to enable us to compete in overseas markets. Senator Herbert Hays has said that the Parliament of Tasmania welcomes the establishment of an important industry like this in that State. Tasmania is the worst placed of all the States from a population point of view. “We should do all we can to help the less populous States to help themselves, and thus enable them to avoid the necessity of relying on the Commonwealth for special payments to help them balance their budgets. I know of no more effective way to achieve that objec-
Jive than by establishing industries of this kind in the States which have a small population. It has been suggested that this proposition should be referred to the Tariff Board because more information should be available to Parliament to enable it to make up its mind that the venture has a reasonable prospect of success. The Tariff Board has rendered very valuable service to this country, and [ should be happier had it investigated this proposal. However, that body itself would be more or less groping in the dark so far as certain features of the proposition are concerned. The industry may not be able to compete with overseas production. Nevertheless, we must ensure that this country will not lie stranded in time of emergency; and, having regard to the value of the industry insofar as the future defence of Australia is concerned, I support the bill.
.. - in reply - On behalf of the Government I express appreciation of the reception given to the measure in this chamber. I endorse the remarks of the Leader of the Opposition (Senator McLeay) and Senator McKenna concerning the high standing of the personnel of the commission. I, personally, have good reason also to pay tribute to the capable service rendered to this country by Mr. A. V. Smith with whom I was associated when I. was Assistant Minister for Supply and Shipping. It is pleasing to note that the Government’3 choice of the personnel of the commission, has been commended by honorable senators on both sides of the chamber. The Leader of the Opposition agrees that it would be very difficult at. this stage to examine costs satisfactorily. In that respect, the proposal comes within the same category as the manufacture of munitions and war material when production in those industries was undertaken on a cost-plus basis because of the difficulty of obtaining reliable estimates. I have no doubt that after the industry has been in operation for some time, Parliament will be givenan opportunity to deal fully with that aspect of it. The Leader of the Opposition and others have also pointed out that electricity can be made available to the industry in Tasmania at cheaper rates than in any other State. The Government close Tasmania for the establishment of the industry having regard to the natural resources of that State. It is correct to say that each one-tenth of a penny in the cost of electric power represents £10 a ton in the cost of the finished product.
Question resolved in the affirmative.
Bill read a second time.
In committee -
Clauses 1 to 8 agreed to.
Clause 9 -
The sale or disposition of the whole or any part of the undertaking of the Commission shall not be effected unless approved by resolution passed by both Houses of the Parliament.
Amendment (by Senator Fraser) agreed to -
That after the word “ Parliament “ the following words be- added: - “of the Commonwealth and by resolution passed by both Houses of the Parliament ot the State of Tasmania.”
Clause, as amended, agreed to.
Clauses 10 to 15 agreed to.
Schedule agreed to.
Title agreed to.
Bill reported with an amendment; report adopted’.
Bill read a third time.
Bill received from the House of Representatives.
Standing and -Sessional Orders suspended.
Bill (on. motion by Senator ASHLEY read a first time.
– I move -
That the bill be now rend a second time.
It has been the policy of the various governments of the Commonwealth since 1924 to render assistance to the wine industry by way of a bounty on fortified wine exported. The rate of bounty at present payable is ls. a gallon. The present act has been in operation since 1.939 and will cease to operate on the 29th February, 1945, if no action be taken to renew it. The payment of a bounty on wine exported has, no doubt, been of assistance to the wine industry and has helped the trade through many troublesome periods, when stocks have increased to what appeared to be dangerous proportions. The immediately preceding period of five years has, however, been a unique experience for those responsible for the success of the wine industry. It wai feared at the commencement of the present hostilities that our export trade in wine, which had developed to approximately 3,500,000 gallons of fortified wine a year, would, bo seriously interfered with owing to the exigencies of war. This fear was realized but, owing to the buoyancy of the local market, no detrimental effect lias been felt by the industry. The local market at the present time is able to consume all the wine that can be made available, and present consumption is approximately 7,000,000 gallons a year. I t is not considered, however, that this prosperity will continue -indefinitely into the post-war period, and the trade is strongly of the opinion that it will have to look to overseas markets to absorb some of its production when normality returns. The continuance of the assistance rendered to the industry by the payment of a bounty under the Wine Bounty Act has been considered and, although the trade has requested that the act be renewed for a period of ten years from the .28th February next, the Government considers it advisable at this juncture to re-enact the legislation for a period of two years only. This will enable the industry to .be examined in the light of conditions which are likely .to exist in the immediate post-war period. I should like it to be distinctly understood that the continuance of the act for the comparatively short period of two years is not to be construed as an indication that the Government is considering the withdrawal of the bounty in 1947 or that no action- will be taken to review the act at an earlier period if the necessity arises. On the other hand I inform honorable senators that, should the necessity arise due to an early end of present hostilities, the act will be amended to meet conditions likely to arise in the post-war period. The Excise Tariff provides for the payment of an excise duty of 6a. 6d. a proof gallon on fortifying spirit used in the manufacture of fortified wine, and the present legislation provides for the payment into ‘a trust fund of 2s. Od. out of the duty collected on each gallon of fortifying spirit. The bounty provided for in this act is paid from this trust fund and, owing to the shrinkage in exports which has taken place since 1939, the total amount standing to the credit of the trust fund is now £708,285. This sum is sufficient to pay a bounty at the present rate of ls. a gallon on approximately 14,000,000 gallons of wine and, although it is anticipated that the demand in the United Kingdom for Australian wine in the post-war period will be heavy, there is no indication that there will be an insufficiency of money in the trust fund to meet, in full, all claims for bounty that may be made on wine exported during the next two years.
– At about this time last year we requested the Minister to increase the price paid to grape-growers, but we did not get the satisfaction which we thought we deserved. In view of the proposed continuation of the wine export bounty for another two years, does the Government propose to do anything to enable the grape-growers this year to obtain at least some increase on the price which they have hitherto been paid? Prices have increased in other directions, and growers’ costs are considerably greater than they were. They were allowed a small increase, but that has not been equivalent to the increase in tha cost of production.
– I shall supply the honorable senator with an answer when the bill is in committee.
Debate (on motion by Senator Leckie) adjourned.
Sitting suspended from 12J17 to 2.15 p.m.
.- This measure seeks to extend the period of the bounty on fortified wines exported from Australia under existing conditions. The Opposition supports the bill.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed (vide page 2561.)
.- It is with a good deal of trepidation that I address the Senate on a complicated measure such as this. The bill involves intricate actuarial calculations and cannot be explained in a few words. Once again I feel impelled to protest against the practice that has been adopted by this Government of introducing important measures into this chamber in the concluding hours of a sessional period, and expecting honorable senators to debate them intelligently at a moment’s notice. Such action belittles this chamber. I do not blame the Acting Leader of the Senate entirely, because I realize that it is not altogether his fault; but surely members of this chamber have as much right as members of the House of Representatives to a reasonable opportunity to examine the details of involved legislation such as this before being asked to debate it.
– The bill is only to ratify an agreement.
– Yes, an agreement arrived at between the Commonwealth and the States; but the circumstances in which that agreement was made require some explanation. A careful perusal of the information which has been made available to honorable senators shows that very largely this bill is designed to benefit the State of New South Wales. That, of course, is only natural considering that all the senators representing New South Wales are on the Government side of the chamber, and that a majority of members of the House of Representatives representing New South Wales electorates are also Government supporters. In effect, the bill will assist the States which have been most profligate in the expenditure of their funds, and will penalize other States which have exercised reasonable care and thrift. In 1928, an agreement was made under which the Commonwealth assumed responsibility for the total debts of the States, under certain conditions. One condition was that future borrowings were to be made through . the Loan Council, and that all such loans should provide for a sinking fund contribution of 1 per cent. The agreement provided also, that on loans obtained by the States to carry out national works, the sinking fund contribution should be 1 per cent., and that on loans raised to meet budget deficits, the contribution should be 4 per cent. Therefore, there was a distinct difference between loans to carry out national works and loans to finance deficits. Of course, hard times followed, and all the States had deficits, with the- result that they paid very little into the sinking fund. For the whole period during which they should have paid approximately £i7,000,000 or £20,000,000, they ‘ contributed, only £130,000. For some extraordinary reason, the National Debt Sinking Fund Commission also decided to make a contribution of 5s. per cent, to the fund. That was done illegally, and probably due to a misunderstanding, and this bill will legalize that payment. Out of the accumulated deficits of the States, totalling £53,000,000, only £1,000,000 had been paid when this’ agreement was made, despite the fact that, due to war-time conditions, the States had built up substantial cash reserves. For instance, increased traffic for defence purposes greatly increased the receipts of the State railways, particularly those of New South Wales and Queensland, to a lesser degree Victoria, and to a minor degree, the other States. The report of the Commonwealth Bank Board on this matter estimates that the accumulated cash reserves of the States amount to £41,000,000, but they have made no attempt to meet their obligations to the Commonwealth. I am unable to say in what proportion the cash reserves of £41,000,000 are held by the various States, but I understand that Queensland and New South Wales have the greatest share. In this agreement the States have undertaken to subscribe £7,000,000 from their cash reserves, and the Commonwealth has agreed to pay £3,000,000 towards liquidating the total indebtedness. That means that the total liability will bc reduced to £43,018,000. That debt will be liquidated, not in seventeen years as originally provided, but in 39 years, because the States willi now be paying not 4 per cent., but only 15s. per cent., whilst the Commonwealth will also pay 5s. per cent., making a total of 1 per cent. This agreement must have some effect upon the confidence of investors in Commonweal^ loans. There is no reason why the States should be permitted to evade their obligations in this way. To date, there has been great confidence in Australian stocks, and rightly so, because it was laid down years ago that provision should be made in each loan for a sinking fund so that the liability would be met in a certain num!ber of years. But it will now take 39 years instead of seventeen years to liquidate this £43,018,000. That requires some thought. The reason why I said earlier In my speech that this measure was largely to benefit New South Wales is that of the £53,000,000 which was short paid by the States, £32,000,000 was owed’ by New South Wales. The agreement shows that, of the £43,018,000 still! left to be redeemed, New South Wales will to pay £26,120,000, Victoria £3,995,000 Queensland £2,148,000,
South Australia £4,920,000, Western Australia £5,390,000 and Tasmania £445,000. New South Wales should have paid a little over £1,000,000 a year, but under the new agreement it will have to pay in round figures only £195,000. The comparative positions of the various States under the old and new agreements is shown, in round figures, in the following table : -
The bill arouses a good deal of suspicion as to whether New South Wales has not engineered the Commonwealth into such a position that that State has got rid of a large amount of its immediate financial obligations, as compared with the other States. I protest against the inequality of the treatment of the different States. I objected, when the uniform taxation scheme was inaugurated, to Victoria being robbed of £4,000,000 a year under the new arrangement. No premium should be given to States which expend their money too freely. This agreement is rather vague, and I desire information as to future borrowings by the States. The time will come when the States will have to borrow again, in order to make up, at least temporarily, their deficits. I understand that, in any new borrowings by the States to liquidate their deficits, they will have to pay 15s. per cent.; or will they have to pay the 4 per cent, charged previously? Any other arrangement would encourage them to produce deficits.
From the financial point of view, I am rather worried over another matter. New South Wales and Queensland have accumulated a fairly large amount of cash . reserves. That is money which, under the old agreement,, should have been repaid to the Commonwealth, but those States have invested it. They are actually investing it in Commonwealth loans, and getting 3$ per cent, for money belonging to the Commonwealth. That is a most peculiar financial transaction.
– They are putting over a bankers’ trick.
– It is certainly a smart action. Although they owe that money, they are investing it in Commonwealth loans, and receiving 3i per cent, from the Commonwealth for the loan of the money. Some of the States have been in the habit of reducing their deficits by means of loan moneys. By using a trust fund, and making a deficit appear smaller, they pay 4 per cent, on the smaller amount instead of on the larger sum.
The Auditor-General of Tasmania, in. giving evidence before a select committee appointed to inquire into statements contained in his annual report for 1942-43, said that portion of the loan balances or trust accounts in that State had been utilized for some years to finance temporarily the revenue deficit in the Consolidated Revenue Fund. He added that that practice was neither regular nor desirable, but that the possible explanation was that the 4 per cent, contribution would have to be provided under the Financial Agreement. That can mean only that the actual revenue deficit of Tasmania had been greater for some years than had been disclosed to the Commonwealth. The balance has been made up by loan funds on which the State contributes only 5s. per cent, instead of 4 per cent. There are substantial reasons for believing that Queensland has acted in a similar manner. It was stated in the Queensland Parliament on the 24th October of this year that various expenditures of the State Railways Department have for some years been met out of loan funds, instead of Consolidated Revenue. The total of such payments, which was stated as being over £500,000, would consequently affect State revenue accounts over a period of some years by disclosing fewer revenue deficits than had .actually occurred. By this device the Queensland
Government would escape further sinking fund contributions at 4 per cent, .per annum on the amount of the undisclosed revenue deficits. It seems to me that that is a matter which the Commonwealth should investigate.
I realize that the bill will be passed. It is being rushed through the Senate in the closing hours of the present sittings, but it is a far-reaching measure that requires most searching investigation by independent auditors or men skilled in finan.ee. I confess that I have not the necessary qualifications to pronounce judgment on the present proposals. I have endeavoured to explain to honorable senators, as far as I can, what the agreement implies. It seems that the States will come out very well and that the Commonwealth revenue will be adversely affected. One State will derive a great advantage over the other States, and the States will be encouraged to incur heavy expenditure.
– The provisions of the agreement are highly technical.
– Yes, I have had only two hours in which to grasp th, implications of the agreement, and I am indebted to Treasury officials for some enlightenment. This measure should not be accepted as a matter of course, because it provides for a vital alteration of the financial arrangements between the Commonwealth and the States, and requires a most searching investigation. Honorable senators should not be asked to pass the bill in so short a time. The Senate should not he made to appear a mere cipher in the eyes of the people. I believe that the agreement has been forced upon the Government. The Commonwealth has been very generous1 indeed to the States. Those which have been able to stand up to their financial obligations - and they should have been, .able to do so in the last four or five years1 - have deliberately withheld money due to the Commonwealth. Payment of that money fens been forgiven, because only a small proportion of it is to be returned. I hope that the Treasurer (Mr. Chifley) will see that no departures occur in future from the liberal provisions made for carrying the -Sta tes over a time of stress.
– I agree with Senator Leckie that the measure now before the Senate is one of the greatest importance. I am not aware that the Government is anxious to rush the bill through this chamber, as has been suggested by the honorable senator. I feel confident that the Acting Leader of the Senate (Senator Ashley) is willing to grant the fullest facilities for debate oh the measure. Criticism has been levelled against it on the ground that the Commonwealth has made a payment which it had no legal obligation to make, and that it will make further contributions of that nature in future. That would lead one to think that the Commonwealth did not play an important part in contributions to the National Debt Sinking Fund in relation to State debts. It is well to go back to 1927. when the financial agreement between the Commonwealth and. the States was signed. It operated for a period of two years, until the referendum of 1928 was held. Following that referendum, which was carried by a large majority, the agreement was enshrined in the Constitution by the insertion of section. 105a. That validated the agreement and. enabled it to have permanent effect. Before July, 1927, the Commonwealth and the States had been competing formoney in the world’s markets and were paying different rates of interest; one State was being played against another S.fate, and all the States were being played against the Commonwealth. That practice was eliminated by the adoption of a financial agreement which provided that all future borrowings, whether on behalf of the Commonwealth or the States, should be made only by the Loan Council, a body comprising representatives of the Commonwealth and the States. The Commonwealth made what I consider to be a magnificent gesture to the States at that stage. It took over from the States debts amounting to the net sum of £641,000,000, and in respect of debts that were owing by the States on the 1st July, 1927, it established a sinking fund on an actuarial basis calculated over a period of 58years. To that sinking fund, the Commonwealthcontributed 2s. 6d. per cent, per annum, whilst the States contributed 5s. per cent. per annum. In respect of that debt of £641,000,000, the Commonwealth was contributing one-third of the sinking fund. The agreement provided that, in respect of borrowings after the 1st July, 1927, even though the borrowings were made by. the Loan Council for the States, the Commonwealth would contribute onehalf of 10s. per cent. per annum towards a sinking fund to operate for 53. years. In respect of all borrowings by or on behalf, of the States, from the 1st July, 1927, the Commonwealth contributed 5s. per cent. and the States a similar amount. It will be seen, therefore, that there were two separate bases for contributions by the Commonwealth ; first, 2s. 6d. in every £100 in respect of debts totalling £641,000,000, that being the net amount of. the public debts of the States prior to the 1st July, 1927. and thereafter contributions on an equal basis with the States in respect of further loans. As has been shown by Senator Leckie, it was provided in the agreement that, in respect of loans to cover revenue deficits of the States, the States were under an obligation to repay them at the rate of 4 per cent. per annum over a term of approximately seventeen years. The Commonwealth was under no obligation to contribute to those deficits. The Commonwealth also contributed, on an entirely different basis when loans were raised by the States, through the Loan Council, for expenditure on wasting assets, and accordingly a shorter term for repayment had to be arranged. The Commonwealth was contributing only 5s. per cent. per annum, whilst the States made up the whole of the balance required to amortize the loan in the shorter period,. The Commonwealth now proposes to contribute to a new sinking fund established in respect of revenue deficits oftheStates5s. per cent., as it did between the 1st July, 1929, and the 30th June, 1944, whilst the States will contribute the remaining 15s. per cent. It iswellto remember thatin addition to the capital contributions made by the Commonwealth to the sinking fund, the Commonwealth will, for a period of58 years, contribute £7,500,000 a year towards the interest on the debt that has to be paid by the States. From the beginning there have been substantial contributions by the Commonwealth, not only of capital for the sinking fund established on behalf of the States, but also £7,500,000 a year towards the interest bill of the States on their public debts. When the Commonwealth took them over the public debts of the States amounted to £672,000,000. That amount was reduced, as between the Commonwealth and the States, by the value of the properties which the Commonwealth took over from the States at the beginning of federation. That matter, although argued long, was not settled definitely until the Financial Agreement was entered into.
– The Commonwealth gained an advantage from that deal.
– That may be; but it made generous contributions towards the sinking fund.
– It had every right to do that, as it took away from the States the revenue which they derived from customs duties.
– The honorable senator cannot tempt me to argue that matter. The value of the transferred properties was about £11,000,000. That reduced the debt to £661,000,000. The value of the sinking funds that were taken over from the States, and included in the National Debt Sinking Fund, was another £20,000,000, thus rendering the net debt of the States taken over by the Commonwealth to £641,000,000. In 1934 those figures were found to be slightly wrong, and they were amended in an agreement which was drawn up in that year. Taking £672,000,000 as the debt of the State’s on the 1st July, 1927, we find that the public debt of the States at the 30th June, 1944, was £890,000,000, despite the fact that in the intervening years the States had paid to the National Debt Sinking Fund a total of £86,500,000, of which £8,000,000 was contributed last year.
The bill has five main headings. There are certain machinery provisions about which there can be no dispute, and therefore I shall not dwell on them. It makes certain alterations of the formula that is to be applied should the members of the Loan Council not be unanimous as to die amount to be raised, and the amount to be allocated among the various States. Those matters have not been questioned and I shall not dwell on them, except to say that they are wise provisions.
I come now to a most important matter which has been the subject of comment by Senator Leckie “in this chamber and by honorable members of the House of Representatives, where, in my opinion, extravagant language, calculated not to serve, but rather to damage the interests of the country in the minds of people. who do not fully understand the implications of these alterations, was used. We must face the fact that these special deficits, amounting to £53,000,000, arose between 1929 and 1935 when all the States were suffering from the depression, and when money was required to promote all kinds of national works and to enable people to be paid the dole. My only regret is that the money raised during those years for such purposes did not exceed £53,000,000, particularly when I reflect that it was raised at the very economical interest rate of 1 per cent, per annum. The whole of that money was borrowed, not from the people of Australia, but from the Commonwealth Bank, the security given for it being treasury-bills which had a currency of three months. The whole of that £53,000,000 has been outstanding, although a long time ago those treasurybills were said to be payable, or renewable, in three months. If the legal view now taken be correct, namely, that these moneys were borrowed to clear up revenue deficits of the States, 4 per cent, per annum should have been paid to the National Debt Sinking Fund in respect of them., in which event those loans would have been cleared off in seventeen years. Difficulty arose because the States were in grave difficulties, but, apart from that, there was a belief that moneys borrowed for these temporary purposes did not come within the ambit of the Financial Agreement. That there was ground for that belief is indicated by the fact that the treasury-bills had a tenure of three months. Despite the opinion of learned counsel given to the National Debt Commission - an opinion with which I agree - I admit frankly that I should not be embarrassed if I were called upon to argue that these moneys were borrowed for temporary purposes by the States, and, accordingly, were not subject to the 4 per cent, contribution. In order to justify the view that has been taken down the years, I shall refer to Part I. of the Financial Agreement, particularly the definition of “ net public debt of a State “. It is set out that the net public debt of a State as at the 30th June, 1927, “ includes the debts of that State secured by - viii Treasury-bills not repayable within twelve months from the date of issue.” The public debt at the 30th June, 1927, was accepted regardless of all treasury-bills which had a tenure of less than twelve months. I refer also to the end of Part I of the Financial Agreement where it is stated -
Notwithstanding anything contained in this agreement, any State may use for temporary purposes any public moneys of the State which are available under the laws of the State, or may. subject to maximum limits (if any) decided upon by the Loan Council from time to time for interest, brokerage, discount and other charges, .borrow money for temporary purposes by way of overdraft or fixed, special or other deposit, and the provisions of this agreement other than this sub-clause shall not apply to such moneys.
It was by reason of those expressions in the financial agreement that it was understood in the early stages that the Financial Agreement did not apply to those borrowings amounting to £53,000,000. Later, it was recognized by the Loan Council that, even if that were so, it was desirable to take steps to amortize them. The Loan Council agreed that they should be dealt with on the same basis as borrowings after the 1st July, 1927, namely, that the States should contribute 5s. per cent, and the Commonwealth a similar amount. That went on from the depression years to the 30tb June. 1944. During that time, there was an accumulation including interest compounded at 4£ per cent, per annum, amounting to £3,000,000. Senator Leckie said that £3,000,000 was being contributed by the Commonwealth, but that is not so. The money will be found by the National Debt Commission and has already been contributed to that body in equal shares by the Commonwealth and the States. The remaining £7,000,000, now to be contributed by the States, will be provided in varying proportions. Comments have been made that this arrangement whereby the Commonwealth will in future continue those payments of 5s. per cent, while the States go on with the payment of 15s. per cent, per annum will damage Australia’s credit, and is disruptive of all contracts. I take the following from a report published in the press to-day: -
The Leader of the Australian Country party said he challenged the accuracy of certain reports of the National Debt Commission.
That is a tilt at one body. He continued -
Hie proposals in the bill were a direct contravention of the sanctity of contract, adherence to the rule of law, the reliability of public documents, and strict accuracy of financial statements. He would ask for a royal commission into these matters.
He complained that the treasury officers were wanting in their duty in not adverting to this position, and seeing that it was disposed of down the years. While tilting in this manner, he also threw a brick at various States in respect of their failure to pay 4 per cent, in respect of certain portions of their deficits that were dealt with by a transfer of loan funds. The right honorable member for Cowper (‘Sir Earle Page) also made some very iconoclastic statements. He said he regarded the alteration in respect of the point I am dealing with as a permanent injury to Australia’s national probity.
Let us see what has been done. We have treasury-bills amounting to £53,000,000 with a three months’ currency. The Commonwealth Bank now suggests that the National Debt Commission pay the first £3,000,000, that the States pay £7,000,000, and that the remaining £43,000,000 be funded in debentures bearing 1 per cent, interest for a period- of 39 years. I ask the Senate: What does it matter whether the public debt is paid off in 17 ) 39, 53 or 58 years? The Commonwealth stands . behind these borrowings. It is primarily liable for them; it is liable for them under the agreement. I submit that the States at. present are not in a position to contribute very much more than they have contributed. In fact, they were asked by the. Commonwealth Bank to contribute a total of only £14,000,000, and the Commonwealth Bank is the sole creditor. The sole creditor asks for a contribution of £14,000,000 and is in fact receiving at the moment £10,000,000. Senator Leckiespoke of the heavy cash resources of the. States. He must bear in mind that against those cash resources are liabilities, both contingent and immediate, and they include the holdings which the States have in respect of deposits such as insurance, &c. But more important is the fact that during the war, owing to shortage of both man-power and materials, the States have not been able to undertake the maintenance of railways, or other capital assets, and the expenditure to which they will be committed in that direction after the end of the war is exceedingly difficult to calculate as the Commonwealth Grants Commission has pointed out. That body says that it is perfectly clear that it will be an enormous sum. One can hardly blame the States, in. view of the. uncertainty in the years that lie ahead when the war ends, desiring to have something in hand, believing that a bird in the hand is a good deal tetter than two in the Loan Council, with the possibility of the application of a very disadvantageous formula. It has been saidthat this bill is a breach of contract. It is, a mere variation of contract. The parties entered into the financial agreement, and by a course of conduct, concurred in by their representatives in the Loan Council, by this Parliament year after year in settling its accounts, andby every State of the Commonwealth, the 5s,. from the Commonwealth and the 5s. from the States has been continued right up to 1944. There is the clearest evidence of an agreement between all the parties to, vary the agreement accordingly; and all that this bill does is to, crystallize in the agreement itself what has been done from 1929 up to the present time, and is proposed to be continued but for a shorter period.The proposal has the approval of not only the Loan Council, the various States and the Common wealth, but also the National Debt Commission which in its last report drew particular attention to it, as it has done in some of its previous reports. I take the following from the 21st report of the National Debt Commission: -
Having regard to what I have said, the attack made upon the National Debt Commission is completely unjustified, because it has drawn attention to this matter in not only this report but also earlier reports. Those who constitute the National Debt Commission are very responsible citizens,who wouldbe certain to take steps to ensure that nothing was done that would damage the credit of this nation either at home or abroad. The membersof the commission are the Treasurer of the Commonwealth, the Chief Justice of the High Court, the Governor of the Commonwealth Bank, the Secretary to the Treasury, the Commonwealth Solicitor-General, and Mr. T. D. Kelly, the representative of the States. Asto whether, as Senator Leckie suggests, we are disturbing the confidence of investors by making this new arrangement with the Commonwealth Bank, I remind honorable senators that there is only one creditor to whom the £53,000,000 is owing. That is the Commonwealth Bank; and that one creditor concurs in the arrangement that is being made, and is a party to it. The £53,000,000 was not contributed to hy any person overseas or any individual in this country.. T fail to see how any arrangement, whether it be varied or not, that is made between the only two parties interested in the particular debt, can affect the credit of the nation either internally or externally. I reject that view entirely.
Senator Leckie also referred to the fact that millions were involved in this agreement. Millions are involved, in that we are dealing with a balance of £53,000,000 ; but I do not want the impression to go abroad that the ‘Commonwealth is being committed to millions in this matter. As a matter of fact, from this date onwards, pursuant to the arrangement whereby tie Commonwealth contributes 5s. per cent, and the States 15s. per cent., the Commonwealth will be involved in a payment of only £107,000 per annum. That is the sole commitment that this Parliament will undertake, and it is not very high.
The other provisions of the bill have not been seriously attacked. The agreement contains no provision up to date whereby voluntary contributions may be made. The Commonwealth, in its legislation, has power to make voluntary contributions towards the reduction of its sinking fund indebtedness. The States will now be in a position not only to do that, but also to direct the particular sources to which those moneys shall be applied. There is a sensible provision in respect of liquidation where loans are converted at a discount. Instead of the States being called upon to find those moneys in one sum, they will be spread over the period of the converted loan, and will be paid in annual instalments. There has been no criticism of the provision that exchange which now operates adversely with New York and London should be added to the sinking fund payments already paid by Australia. Sinking fund contributions over the 53 and 58 years period were settled on the basis that there was equality of exchange between London and Australia. That position has varied very considerably; and it is only one more instance of the finite nature of man, and his lack of vision. In spite of all the care with which. the original agreement was prepared, it was impossible to visualize the depression, or to foresee .the changes in exchange that would take place. That matter has now been crystallized to contributions on the basis of Australian currency, adjustments to be made whenever necessary. Exchange may swing in our favour, or vary up and down, throughout the period; but the original sinking fund basis, actuarially calculated, did not allow a fair margin in that respect. Provision is not made to cover the present big difference in exchange ‘between Australia and abroad; but I think that if there is any shortage at the end of the 53 or 5’8 years period from the 1st July, 1927, that difficulty can be faced when it arises. Perhaps it iB a consoling point that none of us here to-day will be worried about the position when it does arise. In view of what I have said, the criticism of Treasury officers in relation to this matter is completely unjustified. I advert to the fact that no one, but several governments, have been concerned in this particular arrangement. Three or four Commonwealth Treasurers have been concerned in the arrangement that is now so strongly criticized in relation to the funding of these special revenue deficits, and not one of them took any action to rectify it. The matter was first raised in the Loan Council in 1937 by the Tasmanian representative, but the council agreed to defer the position; and the problem as to what should be done with this £53,000,000 came and rested on the doorstep of the Labour Government when it took office in 1941. Under this measure, the £53,000,000 will now be liquidated on. a much more favorable basis, namely, at the rate of 1 per cent, per annum instead of at the rate of 10s. per cent, per annum contributed in equal proportions by Commonwealth and States. I compliment the officers who drew up the amendments and incorporated them in what is an exceedingly complicated agreement, cleared up many defects, and eliminated portions of the original agreements that are now archaic and without effect. It will be a great convenience to those who have to handle the matter to be able to pick up the newly amended agreement, which has been consolidated, re-numbered, and greatly simplified in its set-out. I feel that the agreement as amended will serve a very real need, and clear up many vexatious matters. I disagree entirely with the view that it can in any way impair the credit of Australia here or abroad.
– in reply - After Senator McKenna’s speech, and in view of the reluctance of members of the Opposition to make any further contribution to the debate, there is not much left for me to enlarge upon. The Senate is indebted to Senator McKenna for the clarity with which he placed the case before honorable senators. Senator Leckie made a point of the fact that of the total of £53,000,000 no less than £32,000,000 was owed by New South Wales. That is true, but Senator Leckie could have made a somewhat similar comparisons had he taken, for example, the amounts relating to Victoria and Tasmania, respectively. He should recognize that just as Victoria, having greater responsibilities and obligations and a. larger area than Tasmania, required to borrow more money than Tasmania, so New South Wales has a larger area, greater population and greater responsibilities than the other States, and necessarily its borrowings appear huge compared with those of other States. He also complained about certain States having surpluses, but he knows as well as I do that the States are not required to pay their surpluses to the Commonwealth. He objected to the manner in which loan moneys were being used by the States, but when loans are arranged the Commonwealth does not stipulate how the States shall spend the money, nor does the Financial Agreement do so. Lt merely provides that sinking fund contributions of 10s. per cent, for works and 4s. per cent, for t revenur deficits shall be paid. If any farther information is required than that which has already been given, by Senator McKenna and myself, I shall be glad to furnish it in committee.
Senator Leckie complained because important measures were brought before the Senate on the last day of sessional periods. I agree that it is difficult to arrange the business between this chamber and the House of Representatives in such a way that the Senate will. receive bills in ample time for study and consideration, but in previous years senators have often had to wait around for hours until the bells were rung, awaiting business from the House of Representatives.
– Not an important . bill like this.
– Yes, important measures too. I do not advance what previous governments have done as an excuse for what we do. I think that there should be a conference between the Prime Minister or Acting Prime Minister and the Leader of the Opposition in the House of Representatives, and the Leader of the Senate and the Leader of the Opposition in the Senate in an endeavour to make some satisfactory arrangement. An attempt was made to improve matters during this sessional period by arranging for the Senate to meet a week later than the House -of Representatives so that it would not have to wait for business. Still, I agree that there has been some haste in regard to this measure. It will, however, be admitted that it is a highly technical bill, to which, I confess, like Senator Leckie, that I, as a layman, am unable to do justice. Even the Leader of the Australian Country party (Mr. Fadden) in the House of Representatives found it so complicated that, after studying it for days, he thought it advisable to read the whole of his speech on it. I do not agree with Senator Leckie’ s suggestion that measures have been put through this chamber with indecent haste. When business reaches the Senate, it is brought on in agreement with tie Leader of the Opposition, of whose co-operation in the amicable conduct of the business I wish now to express my appreciation. As to the lateness of the arrival of important business in the Senate, I point to what happened on Thursday, the 7th December, and Friday, the 8th December, 1939. On the firstmentioned day, fourteen bills were passed by the Senate.
– Those were only excise bills.
– They were very important. On the second day no fewer than seventeen bills were passed, including the Appropriation (Works and Buildings) Bill, which would be regarded as important. The following bills were also passed: - Appropriation Bill, Raw Cotton Bounty Bill, Air Force Bill Motor Vehicle Engine Bounty Bill, Defence Bill (No. 3), Postal Bates (Defence Forces) Bill, Wheat Industry (War-time Control) Bill, Supply and Development Bill, Commonwealth Public Service Bill, Northern Territory (Administration) Bill, Seat of Government (Administration) Bill, Canvas and Duck Bounty Bill, Tyre Cord Bounty Bill, and several customs tariff bills. The fact that only one honorable senator on the opposite side rose to criticize this bill to-day does not bear out Senator Leckie’s remark about the bill being put through with undue haste. There is still ample time for any honorable senator to criticize it in committee or move for an amendment if he wishes to do so. Had I known last night that the bill had passed the House of Representatives at 10 o’clock, arrangements might have been made to bring it to the Senate then. That would have given honorable senators opposite a little more time to consider it. I have been as considerate as possible in trying to arrange the business so that every honorable senator who desired might have an opportunity to speak. I have endeavoured to give every facility for the consideration of all measures, and have furnished information whenever it has been sought.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
– In conformity with the sessional order that, unless otherwise ordered, the motion for adjournment shall he put on Fridays at 3.45 p.m., I formally put the question -
That the Senate do now adjourn.
Question resolved in the negative.
Message received from the House of Representatives intimating that it had agreed to the amendment made by the Senate in this bill.
– On the 30th August, 1944, the Minister for Trade and Customs (Senator Keane) laid on the table of the Senate the recommendations adopted at the 26th Session of the International Labour Conference, and the declaration concerning the aims and purposes of the International Labour Organization adopted at that session. On the 29 th September, 1944, I laid on the table of the Senate the report of the Australian Government delegates to the 26th Session of the International Labour Conference. The reports of the Australian employees’ and workers’ delegates have now come to hand. Accordingly, 1 now lay these additional papers on the table-
International Labour Organization of the League of Nations - Twenty-sixth Session (Philadelphia, April-May, 1944) -
Declaration concerning Aims and Purposes of the Organization.
Reports by Australian Delegates.
Ordered to be printed.
Motion (by Senator Ashley) - by leave - agreed to -
That leave of absence be granted to every member of the Senate from the termination of the sitting this day to the date on which the Senate next meets.
Motion (by Senator Ashley) agreed to-
That the Senate, at its rising, adjourn to a date and hour to be fixed by the President, which time of meeting shall be notified to each senator by telegram or letter.
Superphosphate -nurses - canberra :
Railway Station; Accommodation - Wheat Industry: Power Alcohol - Interstate Airlines - Australian Army: Malaria; Destruction op Private Property; Discharged Personnel; Employment - Commonwealth Railways: Watson v. Collings - Woodenships - Valedictory.
Motion (by Senator Ashley) proposed -
That the Senate do now adjourn.
Senator O’FLAHERTY (South Australia [4.7]. - I bring to the notice of the Minister representing the Minister for Commerce and Agriculture two matters relating to the supply of superphosphate. The first is the proposed reduction of the quantity of superphosphate available to South Australia. In view of the fact that the allocations to certain other States are to be increased, I ask the Minister to go into this matter thoroughly before a final decision is made to reduce South Australia’s quota.
There is an arrangement whereby a subsidy is paid upon the manufacture of superphosphate, and, for the purpose of allocation, it appears that this subsidy is paid on a cost-plus basis, but so that no payment is made which would allow the manufacturer a greater profit than that derived in a fixed base year or years. The result is that where efficiency in production makes for a cheaper article and better returns, the producer receives a smaller subsidy than does a combine which can load its costs by increasing the emoluments, expenses, payments, &c, of its controllers, and so show a smaller profit. Thus we find that Cresco Fertilizers Limited, a co-operative concern, receives a subsidy of 5s. a ton, whilst the fertilizer combine receives more than 9s. a ton. Apparently it is not possible to impress upon the authorities what is required to rectify this position, because in reply to correspondence, one generally receives a letter dealing with an altogether different point from that raised. That is the position as I understand it, and without going into details. I ask the Minister representing the Minister for Commerce and Agriculture to make the subsidy of 5s. a ton uniform., sothat the Cresco Fertilizers Limited will not be at a disadvantage compared with the fertilizer combine.
– I draw the attention of the Minister for Health and Social Services (Senator Fraser) to the following press report which appeared in a South Australian newspaper recently: -
Tubercular patients chances of recovery were being jeopardized and their lives endangered because they could not be taken into hospital for treatment, said Dr. Cowan to-day. Dr. Cowan is the physician in charge of the chest clinic at the Royal Adelaide Hospital. The pressing need was for more beds and more nurses, especially more nurses. Must the authorities wait until nurses become exhausted from overwork and patients die unattended beforethe Minister took action ?
Yesterday I dealt with this matter fully, and I shall not repeat what 3 said then. The position is becoming desperately urgent throughout the length and breadth of Australia. Hospitals require increased nursing staffs, and this Government must do something to ensure that more nurses shall be made available. The position is alarming and immediate action is called for.
– I shall bring that matter to the notice of the Minister for Health and Social Services.
.- I ask the Minister for the Interior (Senator Collings) is it imperative that the Canberra railway station should be in a partial blackout when night trains are leaving ? I realize that the restricted lighting was introduced primarily for security reasons, but surely those reasons no longer exist. One has to grope to find one’s carriage and often there are trucks at a platform as well as carriages. I know that honorable senators will sympathize with me in this matter because quite recently I tore a first-class pair of austerity trousers trying to find my compartments. I should like to know also if it would be possible to make available accommodation for wives of members and senators in Canberra when the next session of this Parliament is opened by the Duke of Gloucester. Naturally, members of Parliament wish to bring their womenfolk to attend the celebrations on that occasion, and I should like to know whether that will be possible if early bookings are made?
– As security reasons for the restriction of lighting no longer exist, the question raised by Senator Leckie regarding lighting at the Canberra railway station should be capable of easy remedy. I shall attend to the matter.
In regard to accommodation at Canberra next session, my department is taking steps to ensure that members themselves shall be accommodated satisfactorily, and I do not think that there willi be any difficulty in providing accommodation for their wives also. Orders have been issued to all Canberra hotels, hostels and boardinghouses, that casual guests can be accepted only on the understanding that they must leave when Parliament meets. Naturally we are very glad to have visitors in the Federal Capital, and wherever possible we endeavour to provide accommodation for them, but obviously when Parliament meets memhers must have first preference. I have no doubt that some time before their Royal Highnesses arrive at Canberra, an endeavour will be made by individuals who have no real business here to book accommodation in this city. Senator Leckie can rest assured that we are watching the matter very closely.
To-day Senator Gibson (through Senator James McLachlan) asked the Minis? te] representing the Minister for Supply -and Shipping, upon notice^
The Minister for Supply and Shipping has supplied the following answers: -
On the 28th November, Senator Poll asked the Minister representing the Acting Minister for Air, upon, notice -
The Acting Minister for Air has supplied the following answers, and as they are lengthy I shall, with the permission of the Senate, incorporate them in Han&ard :-
Australian National Airways Pty. Ltd. - All services.
Qantas Empire Airways Ltd. - BrisbaneDarwin.
Aircrafts Pty. Ltd. - All services.
Airlines (W.A.) Ltd.- Perth-Port Hedland (inland route).
Ansett Airways Ltd. - Melbourne-Hamilton; Melbourne-Mount Gambler. “ Mileage “contracts.
MacRobertson-Miller Aviation Coy. Ltd. - All services, with the exception of the Port Hedland coastal service for which no payment is made to the companies.
Butler Air Transport Coy. - SydneyCharleville. (No payment is made for the Sydney -Bega or Sydney-Coonamble services.)
Connellan Airways - All services.
Qantas Empire Airways Ltd. - CloncurryNormanton.
Guinea Airways Ltd. - Services from Adelaide to Whyalla; Port Pirie; Kingscote; Port Lincoln-Cowell-Cleve. (A fixed annual payment is made for these services provided a minimum mileage is flown.)
Airlines (W.A.) Ltd.- PerthWilunaKalgoorlieFerth. (No payment is made for Perth-Norseman service.) “Other” Contracts.
Qantas Empire Airways Ltd. - SydneyTownsville Flying Boat Service operated jointlywith Australian National Airways under “ charter “ arrangement.
– Honorable senators know the effects that malaria has had upon the movements of our troops in the territories north of Australia. I recently asked to be informed as to the incidence of malaria in the Army to-day as compared with the opening months of the operations in New Guinea. The answer received was that, at the peak period in 1942, the maximum number of cases among operational troops was about 120 a 1,000 a week. At present the weekly rate is one in every 1,000. That change reflects much credit upon MajorGeneral Burston and the Australian Army Medical Corps for their work. I trust that they will have equal success in the treatment generally of those affected with malaria and in the destruction of the bacteria in their systems.
On the 15th October, 1943, I drew the attention of the Senate to the way in which claims for damage to private property by members of the fighting services are dealt with. I instanced the case of, Mr. B. J. Coath, of East Rockingham, South Fremantle. Some time ago, Mr. Coath secured employment at a naval dockyard. He and his wife left their home at East Rockingham, as they found it necessary to live elsewhere. Mr. Coath closed the house, leaving in it furniture, house linen, clothing, jewellery, a radio receiving set and many personal effects. It is reported that large numbers of troops subsequently operated in that area, and that, during the absence of Mr. Coath and his wife, a military kitchen was installed in a shed adjacent to the house on Mr. Coath’s property. When Mr. Coath was informed of the intrusion he returned to his home, only to discover that various articles had been removed from the house and damage done to the building, both internally and externally. His losses, which included the head of a windmill, represented a total value of £90. The damage must have been committed almost about two years ago. The matter came to my notice in June, 1943. It was referred to the Department of the Army, the secretary to which stated that gross acts of vandalism were committed and almost certainly by Army personnel. The department repudiated any liability in respect of acts done by troops “ when not on duty”. I put forward my view regarding the case, and early this year the Attorney-General (Dr. Evatt), in referring to my complaint, said that he agreed with that view. He also said that the Commonwealth should not shirk its responsibility, but should give to the citizens the protection to which they were entitled. The case is still unsettled. A few months ago I asked whether any decision had been reached in the matter, and the reply given was that it was still under consideration. The statement was made that what had been done by the troops was in the nature of a “ frolic “. That is not a very satisfactory explanation to convey to Mr. Coath. I again submitted the case to the department recently, and I have been further informed that the matter is still under consideration. In other words, the Government is not standing up to its responsibilities, despite the opinion expressed by the AttorneyGeneral that it should do so. Mr. Coath is a returned soldier, and he is entitled to more than lip service.
– in reply - The matter raised by Senator Collett will be brought to the notice of the appropriate Minister, in order to ascertain what can be done with regard to it.
On the 29th November Senator Leckie asked me whether I would place before the Senate a copy of the report of the Crown Law authorities relating to consideration of the High Court judgment in the case of Watson v. Collings. I am now in a position to inform the honorable senator that the Acting SolicitorGeneral did not furnish a written report, but conveyed his views verbally to the Attorney-General (Dr. Evatt), who, as stated in the House of Representatives on the 27th November, concurred in the views of the Acting SolicitorGeneral.
To-day Senator Collett asked the Minister representing the Treasurer, upon notice -
Inquiries are being made, and replies will be furnished to the honorable senator as soon ‘as possible.
On the 24th November, Senator Collett asked the Minister representing the Minister for Labour and National Service, upon notice -
With reference to the Rehabilitation Section in Western Australia -
How many person, who (a) served beyond Australia, (b) served only within Australia, having been discharged from the services, have applied for employment?
How many have been placed in employment?
Is there any system of classification of types of employment?
If so, how many persons have been placed in each type of employment enumerated in such classification ?
Is it a fact that persons have been sent to work of an unsuitable or temporary character on the understanding that they would not be kept there and, later, been refused permission to accept a better type of work when offered?
The Minister for Labour and National Service has supplied the following answers : - 1 and 2. Statistics are not available in the form desired by the honorable senator. Particulars are not recorded separately for home service and overseas service personnel. The records are kept in the form of “ placements “, and because some individuals are placed in new employment more than once, the number of separate individuals dealt with cannot be ascertained without a special analysis of the individual records. However, of the total number of service personnel discharged in Western Australia up to the end of October. 1944 (including approximately 8,400 discharged in the preceding twelve months alone), only 110 were, at the end of October, awaiting first placement and 86 a second or subsequent placement. The figures may include some whose leave had not expired at the 31st October. Only eleven persons were in receipt of temporary unemployment sustenance from the Repatriation Commission.
I take this opportunity to express, on behalf of the Leader of the Senate (Senator Keane), my colleagues and myself, our appreciation of the assistance that has been given to us throughout the year by members of the Opposition in conducting the business of the Senate. I also acknowledge the loyal support received by the Government from honorable senators who are members of the Labour party. I convey to you, Mr. President, the good wishes of all honorable senators, and express the hope that you will have a happy Christmas. I trust that the new year will usher in the victory in Europe to which we are all looking forward, and that before long victory will also be achieved in the Pacific wai theatre, with which Australia is vitally concerned.
– by leave - On behalf of the Opposition, I compliment the Acting Leader of the Senate (.Senator Ashley) upon the way he has conducted the business of .this chamber, and I thank him for the courtesy he has extended to members of the Opposition during the sittings this year.
– I have pleasure in acknowledging the seasonal greetings expressed by the Acting Leader of the Senate. (Senator Ashley) and the Leader of the Opposition (Senator McLeay). My duties as President have been made very pleasant during my term of office because of the kindness and consideration shown towards me by all honorable senators. My rulings have seldom been disputed, and honorable senators have promptly complied with directions given from the Chair. Occasionally some honorable senators have become rather ruffled,, but, for the most part, they have conducted themselves in an exemplary manner, and that, of course, has made any task easy and agreeable. I have received every possible assistance from the Clerk of the Senate, and I do not know how I should have managed without him. He is an excellent officer.
Honorable Senators. - Hear, hear!
– Had he been a member of the Senate, he would have made a good President. The Clerk Assistant has also rendered good service. I also pay a tribute to the members of the Senate staff, who have rendered . loyal and valuable service. I express my appreciation of the services of all workers in this building, and of workers generally. Sorrow has fallen heavily on the hearts of many of our people, owing to casualties suffered during this war. At this season of the year, we must not forget the members of the fighting forces, and all others who are assisting to bring about a speedy victory. We should never forget what is happening in the outside world. Christmas - that season of goodwill to all men - is drawing near, and I know that I echo the sentiments of every honorable senator when I say that the hope is strong within us that before another Christmas season comes around the war will be over and the world will have entered into a period of peace for. all people.
Question resolved in the affirmative.
The following papers were presented : - .
Arbitration (Public Service) Act - Determination by the Arbitrator, Ac. - No. 28 of 1944 - Postal Telecommunication Technicians’ Association (Australia).
Commonwealth Railways Act - By-law No. 84.
Lauds Acquisition Act - Land acquired - For Postal purposes - Glen Davis, New South Wales.
Senate adjourned at 4.30 p.m. to a date and hour to be fixed by the President.
Cite as: Australia, Senate, Debates, 1 December 1944, viewed 22 October 2017, <http://historichansard.net/senate/1944/19441201_senate_17_180/>.