2 November 1954

21st Parliament · 1st Session

The President (Senator the Hon. A. III. McMullin) took the chair at 3.30. p.m., and read prayers.

page 1124


Assent to the following bills re ported : -

War Pensions Appropriation Bill (No. 2) 1954.

Pay-roll Tax Assessment. Bill 1954.

States Grants (Special Financial Assistance) Bill1954.

Wine Overseas Marketing Bill 1954.

Wine Grapes Charges Bill 1954.

Papua and New Guinea Bill 1954.

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– Can the Minister for National Development say whether a copy of the report made by the North Kimberley survey party, which has just returned to Perth, will be made available by the Western Australian Government to the Australian Government?

If so, will the Minister make the report available to honorable; senators? Will the Minister also endeavour to arrange for the film, which was taken during the survey, to be shown at Parliament House, so that members of the Parliament may have an opportunity to see something of this little-known area of the Commonwealth ?

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– That expedition was undertaken on behalf of the Western Australian Government, and the Australian Government lent a helping hand. The report that becomes available will, of course, go to the Western Australian Government, and there is no arrangement for that government to furnish the Australian Government with a copy of it. I should rather expect that the Western Australian Government would do so, as a matter of courtesy and interest. 1 shall make representations to that government in an endeavour to obtain a copy, but I think it wouldbe necessary to ascertain its views before the report could be tabled in this Parliament. Offhand, I doubt whether the Australian Government could table a report which was the property of another government. I think that the permission of the government concerned would have to be obtained first. I had not heard previously that a film had been made, but I shall certainly act on the suggestion of the honorable senator and see whether it is possible to obtain a copy of it, so that it may be shown here on one of our weekly film nights.

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Senator McLEAY:
Minister for Shipping and Transport · SOUTH AUSTRALIA · LP

– On the 26th

October, Senator Fraser sought information on the shipment of steel to Western Australia. I have now obtained the following information in reply to the honorable senator’s question : -

With the exception of 6,891 tons of steel at Port Kembla, for which a vessel will be allotted as soon as a loading berth is available, all cargo offering for Western Australia is covered by current fixtures which are -

Koomilya - sailed from Newcastle with 2,600 tons of steel for Esperance, Albany and Fremantle. This ship calls at Sydney and Melbourne where general cargo will be lifted.

Woomera - to commence loading 2,000 tons of steel at Newcastle on 4th November for Fremantle, calling at Sydney and Melbourne for general cargo.

River Mitta - to commence loading 8,000 tons of general cargo for Fremantle on 3rd November.

Recent sailings which cleared big consignments of cargo for Western Australia were -

River Hunter - departed Newcastle on 19th September with 5,227 tons oi general cargo.

River Burdekin - departed Port Kembla on 17th September with 7,034 tons of steel; departed Melbourne on 21st September with 030 tons of cargo and agricultural machinery.

River Burnett - departed Newcastle 13th October with 0,110 tons of coal; departed Melbourne 10th October with 775 tons of general and agricultural machinery.

Senator GUY:

-Will the Minister for Shipping and Transport inform the Senate whether the Premier of Tasmania has approached the Australian Government asking on what terms and conditions Commonwealth ships may he purchased or leased by the Tasmanian Government? ‘If so, have any negotiations been entered into for such purchase or lease?

Senator McLEAY:

– So far, I have not received, either directly or indirectly, any communication from the Premier of Tasmania in relation to the matter raised by the honorable senator.

Senator HENTY:

asked the Minister for Shipping and Transport, upon notice -

  1. Is it a fact that the Strahan report on Tasmanian shipping recommends many practical and urgent reforms to be undertaken by the shipowners, the Australian Stevedoring Industry Board and the Waterside Workers Federation for the improvement in the turnround of ships in Tasmanian ports?
  2. What steps does the Minister intend to take to translate these recommendations into action ?
  3. Aa any consequent reduction in freight charges is of the utmost importance to Tasmanian primary and secondary industries, will the Minister assure the Senate that this report will not be relegated to a departmental pigeonhole until every avenue to help the State of Tasmania has been explored?
Senator McLEAY:

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

  1. Yes.
  2. Action is already in hand with the appropriate authorities concerning the items referred to in 1 above.
  3. Yes.

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Senator PEARSON:

– Has the Acting Minister for Commerce and Agriculture read a statement that was published in the Adelaide Advertiser to-day in which a spokesman for the Millers and Mill Employees Association was reported to have suggested that the wheat industry was subsidized to the extent of lid. on a 2-1 b. loaf of bread? If the Minister has considered the statement, does he not agree that the contention of the millers’ representative is contrary to the fact? Does he not agree that the wheat industry, far from being subsidized, has made a substantial contribution towards keeping the cost of bread down in Australia by reason of the fact that home consumption wheat prices have .been much lower in recent years than either world parity or the international wheat agreement price ?

Senator McLEAY:

– I have read the statement to which the honorable senator has referred,’ and I cannot understand what the spokesman for the millers’ interests was trying to imply when he said that the wheat-growers were receiving a subsidy. As Senator Pearson has said, wheat-growers have been supplying wheat for a number of years at prices below export parity. I have referred the newspaper report to officers of the Department of Commerce and Agriculture, with the object of ascertaining whether the spokesman for the millers was correctly reported. I know that honorable senators are desirous of obtaining the facts about these matters.

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Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– On the 27th October, Senator Robertson asked the following questions, without notice: -

Can the Minister representing the Minister acting for the Postmaster-General inform the Senate whether the alterations to the Canberra Post Office are nearing completion? When is it expected that the work will be completed? Will the Minister arrange with the contractor, before he leaves the site, to provide a ramp on the steps leading into the postal hall for the use of mothers with perambulators?

The Minister acting for the PostmasterGeneral has supplied me with the following information in reply to the honorable senator’s questions : -

It is expected that the work of remodelling the Canberra Post Office building will be completed by the end of this month. The matter of providing a perambulator ramp has been given further consideration, in the light of the suggestion put forward by the honorable senator, but it is felt that one is not justified, as ample postal facilities are available in the residential sections of the city. Moreover, the slope would be fairly steep, and could constitute a danger to women and children.

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Senator COOPER:

– On the 26th October, Senator Arnold asked the following question : -

Last year the Minister representing the Minister for Health obtained from his colleague an estimate of the cost of health services, including medical, hospital and auxiliary services. Would the Minister have those figures revised and made available to the Senate?

The Minister for Health has now furnished the following reply: -

Particulars of the estimated expenditure for the Department of Health for the financial year 1954-50 are shown in the printed Estimates of receipts and expenditure. Details are appended -

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Senator SPOONER:

– On the 27th October, Senator Henty asked the following questions: - 717311 the Acting Minister for Commerce and Agriculture inform the Senate when the next meeting of the Fruit Industry Sugar Concession Committee will be held? Will minimum prices to be paid by processors for berry fruits in the coming season be fixed at that meeting? When will the prices be announced to the growers?

The answers to the honorable senator’s questions are -

  1. The meeting of the committee originally scheduled to be held on the 29th October, 1954, has, owing to the temporary illness of the chairman, been postponed until the 12th November, 1954.
  2. The determination of minimum prices toiberry fruits is listed on the agenda for discussion at the meeting on the 12th November.
  3. As soon as these prices are determined, the representative of the growers, the Tasmanian Stone and Berry Fruits Board, who will be advised by telegram.

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Senator BENN:

asked the Minister representing the Minister acting for the Treasurer, upon notice -

Is it a fact that the publication of the Labour Report, compiled by the Commonwealth Statistician, is to be discontinued?

Senator SPOONER:

– The answer to the honorable senator’s question is “ No “.

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

  1. Is it a fact that, in every call-up for National Service training, approximately 15 per cent, to 16 per cent, of the intending trainees are rejected on medical grounds?
  2. Is a comprehensive medical record kept of the various categories under which these young men are rejected?
  3. Is any positive action being taken through Government agencies, in conjunction with the medical profession and national fitness organisations, to try and arrest the degree of unfitness in the youth of this young nation?
Senator McLEAY:

– The answers are as follow : -

  1. Of 133,849 young mcn medically examined for National Service up to the 21st July, 1954, 80.4 per cent, were classified as fit for all duties, 5.1 per cent, as fit for limited duties 2.7 per cent, as temporarily unfit for duties and 5.8 per cent, as permanently medically unfit for service duties.
  2. No centralized record is kept.
  3. The Commonwealth makes national fitness grants to State Education Departments for the promotion of physical education programmes in schools and to State National Fitness Councils for stimulating physical recreation through voluntary youth organizations and sports organizations. As far as possible, the co-operation of the medical profession is enlisted through State National Fitness Councils and the schools medical services in the States.

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tariff Board Report.

Senator SPOONER:

– I lay on the table the report of the Tariff Board on the following subject : -

Sulphur and sulphuric acid.

Ordered to be printed.

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Report ofpublic Accounts Committee.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– I present the following report of the Public Accounts Committee : -

Sixteenth Report. - Treasury minutes on reports of the 1952-54 Joint Committee of Public Accounts.

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Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner) read a first time.

Second Reading

Senator SPOONER:
Minister for National Development · New South Wales · LP

.- Imove-

That the bill be now read a second time.

This bill contains two important changes of benefits provided by the War Service Homes Act, and alters some sections in order to clarify their meaning and to accord with practices which have been followed from the commencement of the act in 1919. The changes of the benefits are -

  1. An increase of the maximum loan for the financing of homes which have not been built under the pro visions of the act. The maximum for these homes will be £2,750, which is the same as the maximum amount provided at present for homes built under the act; and

    1. The extension of the provisions of the act to eligible persons residing in the Territories of Papua and New Guinea, and Norfolk Island.

Under normal circumstances, an exserviceman has the right to choose the type of home he wants, and the War Service Homes Division restricts itself to ensuring that the home proposed to be purchased or built will be a sound investment within his resources. In his interests, precautions are taken to see that the price is reasonable. The raising of the maximum amount for existing homes will give greater freedom of choice to Australian soldiers as to the type of home they wish to purchase than they have at present, with the existing limit.

The increase in the maximum amount was approved in order to give effect to the promise in the joint policy speech of the Government parties to increase from £2,000 to £2,750, the advance available under the War Service Homes Act for the purchase of existing homes. The decision means that the present maximum loan of £2,750 for all types of assistance will be increased to a maximum of £2,750. This will include the maximum loan for the purchase of existing properties as well as the maximum loan for the discharge of mortgages on existing properties.

In certain conditions, for example, when there is an extreme housing shortage or full employment in the building industry, the Government may decide to adjust the annual programme of the division to accord with overall government economic and social policy and, consequently, priority may be given to certain types of the division’s activities. Whilst the provision of new homes, as distinct from financing the purchase of old ones, is a greater contribution to a reduction of the general housing shortage, the stage has now been reached at which the inflationary trend has been arrested :and an optimum building rate achieved. It is now desirable to give persons who are not able to have new homes built for thom an opportunity of becoming home owners by purchasing existing properties. The change will also reduce the demand for building materials and building labour.

This year there will probably be an increase in the number of applications for loan under the War Service Homes Act for the purchase of old homes and some reduction in the number of applicants desiring to build homes, but it is thought that the increase will not be as great as it was in 1950-51 and 1951-52. The number of effective applications for War Service Homes is about 15,000 yearly which is 60 per cent, of the total number of 25,000 applications received each year. There is an accumulation of 20,000 applications on hand and it is thought that a total of about 150,000 applications will be received in the future, of which 90,000 will be effective.

It is hoped that the following number of war service homes will be provided this year : -

The number of houses under construction at the 3Ot,h June, 1955, will be greater than at 30th June, 1954, .and the benefit will be evident in the increase in the number of homes completed in 1955-56.

Waiting periods for homes will not be materially affected. The average waiting period in respect of application for a loan for the construction of a house is twelve months. In New South Wales, difficulty has been experienced in obtaining satisfactory tenders and again, in the past year, and unprecedented increase in the number of building applications. In that State the waiting period has been sixteen months.

If 7,000 contracts can be let during 1954-55, it is expected that the waiting period throughout the Commonwealth will be reduced to an average of eleven months, and in New South Wales to fourteen months. In other States the waiting periods are reasonably the same and the Director’s programming has always been planned in an endeavour to provide a uniform period throughout the Commonwealth. This waiting period is from the date of receipt of the application to the date on which the division commences processing the case.

In cases involving the purchase of existing properties the waiting period during 1953-54 for both new and old homes was six months. This waiting period was suspended in March, 1954, because of the unavoidable disruption of the building programme. The waiting period will have to be re-introduced as from the 1st November, 1954, as a consequence of the large increase of the number of applications now being received for this kind of assistance.

So far, there has been no waiting period for the discharge of mortgages on new homes in respect of which the application is submitted before building commences. With the increase of the maximum loan to equal that of building loans, it will be necessary to introduce a waiting period of six months as from the 1st November, 1954. Otherwise the fortunate applicant who has sufficient funds to obtain temporary finance from outside will have an unfair advantage over other kinds of applicants. It is not practicable to re-introduce the discharge of mortgages on old homes as a general policy as it is essential that the money available should be used to help those who do not own homes.

In addition to the decisions to increase the maximum loan for existing properties, it has been decided to remove the present administrative limit bf £3,500 on the total purchase price of an existing property.

The figure of £3,500 was determined previously on the basis that an applicant who had at least 40 per cent, of the value of the home he desired to purchase was in a better position to make arrangements for outside finance than an applicant who was not so fortunate. With the increase of the maximum loan to £2,750, it would have been necessary to increase the limitation to £4,500 to maintain the same 40 per cent, equity. It is considered that, to place a limit of £4,500 on these homes, would not result in any worthwhile saving in. total expenditure and that, therefore, it would be better to remove the limit altogether. In other words, the limit of £3,500 did save expenditure at the expense of those who were reasonably well off and, therefore, enabled a greater number of the less fortunate to be assisted, but a limit of £4,500 would not now serve any useful purpose.

In my opening remarks, I referred to the two main changes of benefits provided for in this bill. In the subsequent general survey, the reason for the first benefit, that is the increase of the maximum loan for the financing of existing properties, was explained. The other benefit is the extension of the provisions of the act to eligible persons residing in the Territory of Papua and New Guinea, and Norfolk Island. This question has been considered by the various governments since 194.5, but there were certain problems which delayed the adoption of the proposal. It is now considered that the benefits can be extended with advantage to eligible persons who reside in these Territories and desire to become home-owners. Honorable senators will, I arn sure, heartily approve of this proposal. The other amendments are to clear up certain doubts in the interpretation of the act relating to the practices which have been followed from its inception. They will be dealt with, in detail, at the committee stage. Briefly, they are to ensure that an applicant, who is eligible at the time his application is lodged, will not lose . that eligibility been use of something that hap pens during the waiting, period which is beyond his control and, secondly, to ensure that applicants get the benefit of the full period of repayment provided for in the act, from the date the home is available for occupation, despite the time taken in building a home.

In the 1954-55 budget, the vote for the War Service Homes Division has been increased to £30,000,000. This will be £3,100,000 more than was spent in 1953-54. The Australian Government accepts the responsibility to encourage home ownership and home building within its constitutional powers and will do whatever it reasonably can in order to ensure that this great responsibility to establish the basic conditions of family life is provided.

The good work of past years is being continued. The provision of homes is a proud and continuing responsibility. It is confidently -expected that, ill the year 1954-5-5, at least as many homes will be provided throughout Australia as were provided in each of the last few years, and that the War Service Homes Division will make a worth-while contribution to the provision of homes for the people of Australia. I commend the bill to the Senate.

Debate (on motion by Senator McKenna) adjourned.

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Second Reading

Debate resumed from the 2Sth October (vide page 1123), on motion by Senator Cooper-

That thu bill be now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

– The bill now before the Senate provides for the orderly marketing of wheat and wheat products, and for a stabilization scheme to operate for a period of five years. One feature of the scheme spills over into another measure, the Wheat Export Charge Bill 1954, which has yet to be debated by the Senate. The purpose of that bill is to impose a tax on wheat and wheat products exported from Australia. The proceeds of the tax will be paid into a stabilization fund which is to be applied for the purposes set out in the bill. The Wheat Export Charge Bill is a separate measure, for the very good reason that section 55 of the Constitution provides that legislation which imposes a tax shall not deal with any other matter. That is the reason why this feature of the stabilization scheme is projected beyond the bill we are considering now, and is dealt with quite separately.

I say, at once, that the Opposition supports the bill .which is now before ,the Senate. The governments of the five wheat-producing States are in favour of it, and the growers themselves, by an overwhelming majority, have approved the scheme. The Australian Government and the State governments are concerned, of course, with the interests not only of those engaged in the industry, but also of the Australian community at large in this matter. Because I have said that the Opposition supports the measure, and that it has the approval of the State governments and those in the industry, it might be thought that it would be unnecessary for anybody on the Opposition side to comment further. I think that that would be wrong, because the bill is too important and too interesting to be dismissed so summarily. It is important, first, because it ‘deals with a commodity that is needed by the whole world, and secondly, because it is our second most valuable item of primary production. It has a great deal to do with establishing our overseas balances. In fact, the greater portion of the wheat crop is exported from Australia and not consumed locally. The export of this commodity enables us, partly, to buy the various raw materials and other articles that are required for our manufacture, and to keep our standard of living at a high level. Finally, the bill is important because it affects not only those engaged in the industry who, I understand, number approximately 90,000, but also every other Australian, because every one is a consumer of wheat, in some form or other, each day.

The bill is interesting first, because of its importance, secondly, because of its complexity, thirdly, because of the legal and constitutional issues it raises, and fourthly, because of the Government’s belated acceptance of the principle that it is desirable, in more than one field, to have something in the nature of a planned economy. I propose to restrict my comments, by and large, to the legal and constitutional issues involved in this measure, and the acceptance by the Government of the principle of orderly marketing and stabilization.

I think that the Minister in charge of the bill missed several good opportunities when making his second-reading speech. Anybody who picked up the secondreading speech or who read the bill expecting to find a national scheme for orderly marketing of wheat, would be shocked to discover the absence of a complete story in relation to the Australiawide position. If one looks at the bill, one finds that the only wheat that can be acquired under it is wheat in the Australian Capital Territory which, as everybody will agree, is of insignificant proportions compared with the total production of Australia. The truth is that the main portion of the scheme is implemented by State legislation. There are five States involved, and nobody who approached this problem could get an adequate picture at all by looking only at this bill. I regret that the Minister missed the opportunity to go, at some length, into the overall position, to describe the nature of the State legislation, and to point out how that legislation, being complementary to the bill now before us, helps to build a complete picture of orderly marketing and wheat stabilization. I know that the Minister has been engaged in lengthy negotiations with the various State governments and has had to await the result of a referendum of the growers. I am sure that the Minister must have deplored his opposition to, and the people’s rejection of, the 1946 referendum, when power was sought for organized marketing of primary products, and when it was further proposed that-

Without in any way limiting the generality nf the expression “ primary products “ in new paragraph .1 [a), that expression shall bc deemed to include flour and other wheat products, butter, cheese, and other milk products, dried fruit and other fruit products, meat and meat products, and sugar.

There was a further paragraph which it was proposed to write into the Constitution, in the following terms: -

Thu power of the Parliament to make laws under paragraph 1 (a) of sub-section (1)-

That was the proposed paragraph relating to organized marketing of primary products - may be exercised notwithstanding anything contained in section 92 of this Constitution.

It is the presence of section 92 of the Constitution that makes it necessary to have this complicated system of complementary State and Federal legislation, and that makes for all the delays. I am sure that the present Minister for Commerce and Agriculture (Mr. McEwen) would have been very happy, during the last year or two, had that power been written into the Constitution. Even now, with all the difficulties experienced by draftsmen in Commonwealth and State offices, there is no absolute certainty that any scheme of orderly marketing or stabilization put forward in Commonwealth or State legislation is immune from successful attack in the courts. There is always that feeling of uncertainty. It is deplorable that the National Parliament, facing a national problem of this type, has not the power to proceed alone towards a solution, only consulting the States and those engaged in the particular industry where necessary. I hope that the difficulties encountered by the Minister in getting the present stabilization scheme established might induce him and his colleagues, at some future time, to promote a referendum in these terms, or support any referendum of a similar nature that might come forward.

The bill implements a principle that was set up by the Australian Labour party in the matter of orderly marketing. It is quite in line with the stabilization scheme that was set up in 1948 by a Labour government, and was operative up to the end of the wheat season in September, 1953. It may differ in detail, but the broad principles are the same. As I listened to the second-reading speech of the Minister for Repatriation (Senator Cooper), I was impressed with the oddity of the fact that, in the very first sentence, he should say -

This bill has been introduced in pursuance of the Commonwealth’s obligations, as a partner with the States, in the proposed new wheat stabilization plan which has been developed in consultation with State Ministers and the Australian Wheat Growers Federation.

It is odd that the Minister should claim a partnership with the States in this matter, when only last week, in this chamber, the Government, by its own action and in the teeth of opposition from the six State governments, abdicated the field of controls over hides and leather. There seems to be something quite inconsistent in the Government’s approach to matters of this nature. Last week, the Government negated partnership with the States. This week it seeks the plaudits of the Senate because of its entry into a partnership with the States in the field of wheat marketing. The absence of coherency or settled principles in the Government’s policy is easily seen when that sort of thing can happen within a few days. I believe that this is the first bill to provide for orderly marketing of wheat that has been introduced in Australia by any but a Labour government, and the Opposition congratulates those responsible for following what is, and has been for a long time, a line of Labour party policy.-

One interesting aspect of this bill is the high degree of ministerial control that is to be retained. Again and again, I have heard members of the Government claim, in connexion with primary producers’ boards, that the commodity concerned belonged to the growers and the producers. Those supporters of the Government have insisted that the management of the commodity should be left entirely to the representatives of the producers, and that a Minister had no right to interfere with things that did not concern him where the Commonwealth had no direct ownership. In this bill, the Government has abdicated that position, because clause after clause confers powers upon the Minister. Under the provisions of clause 10, the Minister may even prevent delegation by the board of its power or authority to a committee of its own members. Under clause 12, the Minister may even veto the appointment of agents of the Australian Wheat Board overseas. Under clause 17, subclause 4, no advance payments may be made without the prior approval of the Minister. The overriding clause is clause 13. Sub-clause (2.) of clause 13 states specifically -

The Minister may give directions to the board concerning the performance of its functions and the exercise of its powers, and the board shall comply with those directions.

I am not saying that the Minister should not have that power in a matter that affects, not only the industry and those engaged in it, but the whole Australian community and an important section of Australia’s overseas trade. Perhaps the Minister should have such powers. That type of power was reserved under Labour legislation, but it was criticized to the limit by those who were then the Opposition, and now support the Government.

Senator Hannaford:

– When 1

Senator McKENNA:

– On bill after bill that was introduced by the Labour Government in the Senate.

Senator Hannaford:

– On the last wheat stabilization scheme?

Senator McKENNA:

– I shall not be particular about the measure, but I do confirm the fact that, again and again in this chamber, I have heard those who support the present Government objectto a degree of ministerial control in relation to primary production. I am not prepared to commit myself at the moment about a particular measure, nor have I refreshed my memory by reading the debate on the 1948 stabilization scheme.

Senator Hannaford:

– I believe the honorable senator is wrong on that point.

Senator McKENNA:

– I shall not be dogmatic and claim that it happened on that occasion, but I emphasize that the settled policy of those who support the present Government has been an objection to a degree of ministerial responsibility. I applaud them for their recognition of the fact that the paramount duty of the Government in a matter of this sort is to assume proper responsibility to the people of Australia. Apparently the matter was considered at Perth by the wheat-growers’ representatives within the last day or two, because a telegram has come from them, addressed to one of my colleagues, and stating -

Wheat federation in conference in Perth carried following resolution on wheat stabilzation legislation : - “ That in the event of any ministerial direction being given to the Australian Wheat Board for withholding or forcing sales, or through deterioration of quality of wheat, and any financial loss thereby incurred to growers as determined by the board shall be borne by the Treasury.” We require above being incorporated in the federal act.

That viewpoint can be understood. If a foolish or wrong exercise of his overriding power by the Minister leads to loss to the growers, it might well be argued that the Government, and not the growers, should stand the loss. The telegram limits its proposal to the withholding of wheat from sale abroad, I should imagine, or a compulsory sale under broad terms and conditions that are unfavorable. Further, the wheat-growers’ representatives have referred to instances where wheat stored pending sale might deteriorate through no fault of the growers. The point is that the wheat, having been passed over to the Australian Wheat Board, is sold as the property of the board. I refer to that matter to show that the wheat-growers’ representatives, assembled in conference, do not give their unqualified blessing to every aspect of this scheme. They invite the Government to express an opinion whether the measure should be reviewed in accordance with the terms of their resolution.

Two other interesting aspects of the bill relate to the freight differential. One acknowledges the freight advantage that Western Australia has in relation to its export of wheat. The allowance of an additional 3d. a bushel to Western Australian growers is only proper and fair. Also, I am grateful that Tasmania is to be brought into the scheme in a way that will enable wheat to be landed at Tasmanian ports at the same price as that paid at ports in the mainland States. The question of the freight on wheat sent from the mainland to Tasmania has had, so to speak, a very difficult run. First, the Australian Wheat Board bore the cost, tn that way, the growers themselves were required to bear it. Later, the Commonwealth assumed responsibility, and then the Tasmanian Government had to carry it for a period. Now the cost will be met by a charge of 1-Jd. a bushel that the board will levy on all wheat sold for human consumption in Australia. In that way, all the wheat consumers in Australia, including those in Tasmania, will contribute, at the rate of 1-Jd. a bushel, to a fund from which the freight on wheat sent from the mainland to Tasmania will be paid. Therefore, people in all parts of Australia will be in a relatively equated position. Undoubtedly Tasmania is grateful for the special consideration that has been given to it, and I am sure the growers will not be sorry that that consideration will impose no additional burden on them.

Let me take a look at the position of wheat in the world to-day. I understand there is a very heavy carry-over of wheat from the last season, which ended on the 30th September. I have seen various estimates, but I do not know which of them is correct. I have seen the figure placed as high as 100,000,000 bushels. If that estimate is correct, there has been a particularly heavy carry-over. The harvest prospects for the current year are excellent. There have been good rains, and there is a general expectation that there will ,be a .bumper ‘crop. Therefore, unless the carry-over from last .year is sold and cleared with some degree of rapidity, there may be a great banking up of wheat in this country. We are faced at the moment with the fact that there are large

Surpluses of wheat in other countries, notably Canada and the United States of America. It has been said that those countries have a wheat surplus of something like 1,500,000,000 bushels. Those concerned with the future of the wheat industry in Australia are very much afraid of what would happen if the great wheat surpluses of Canada and the United States of America were unloaded on the world market. Last year, there wa3 a very good European wheat season, and Australian wheat is becoming harder to sell in Europe. Incidentally, the world price of this very important commodity is tending to fall.

Those facts indicate that, in order to keep our position in the world wheat markets, we must do something to ensure that our wheat is of the best quality. I understand that much criticism has been levelled at the quality of our wheat. We have some experience of that ourselves in the bread that is made in Australia. Un- questionably, in the difficult times or, to put it more accurately, the more difficult times that appear to be ahead, it behoves everybody concerned with this industry to take every step possible to ensure, not only that the quality of Australian wheat will be improved, but also that the improved quality will .be maintained. I can well believe there is not much incentive to produce wheat of a particularly good quality when all wheat is sold in bulk and, regardless whether the quality of consignments is good or indifferent, growers receive, in effect, the same return. A psychological factor is involved to which regard must be paid. A special effort should be made to ensure that the quality of our wheat will be established at a good level and maintained at that level.

I propose to say a few words about the stabilization fund. The fund is to be built up of the excess of the export price over the cost of production, up to, but not exceeding, lSd. a bushel. It is quite certain that if wheat sales are slow, or if low prices are realized on the world, market, it will take a very long time to build up the stabilization fund. It may well be that the Treasury will have to pay substantial amounts. Some questions arise that interest me. Assume that the Treasury, pursuant to its guarantee that the cost of production will be reached, is called upon to pay to the board in any one year a substantial sum, the stabilization fund having been exhausted, and that later, after bumper years, the fund recovers. Is there any provision either in the bill or in contemplation whereby the Treasury could be reimbursed the amount it paid out in a disastrous year? Assuming that lean years are followed by bumper years, with high prices and a recovering market, and that the stabilization fund is rapidly re-established, is a transaction in respect of a disastrous year to be deemed to be closed, or will the Treasury then be able to reimburse itself? I can find nothing in the bill to indicate that that will take place. Has the Government considered that position? Has it rejected the thought that the Treasury should ever be reimbursed, and has it accepted the proposition that each year shall stand entirely alone?

Some interesting questions arise in relation to how the money in the fund will be repaid eventually. From my reading of the bill, I gather that if the growers of one year make a contribution to the stabilization fund and need no assistance, either from the fund or from the Treasury, when a distribution is to take place, either when the fund has risen above £20,000,000 or the period of the scheme has ended, the growers of that year will be repaid the amount of the charges they paid into the fund. But if, let us say, the growers of the first and second year, needing no contribution from the fund and needing no help from the Treasury, have their money taken in the third year to assist the third-year growers in their difficulties, when the fund has been built up again and a distribution is to take place, the growers of the first year and the second year will still be repaid their charges in full. I understand that to be the position. I think clause 28 of the bill provides that, on the winding up of the fund, there shall be repaid to the growers the amount of the charges, less any amounts paid from the fund to the growers of a particular year, which amounts shall be deducted from the payments that otherwise would have been made to those growers. I wish that the Minister in his second-reading speech, had dealt with the position of what is termed the revolving fund and had elaborated some cases of the nature I have just indicated.

Although the wheat stabilization scheme introduced by a Labour government in 1948 was designed to operate for a period of five years, the Opposition feels it would have been better to accept the viewpoint of the present Government parties, who were then in opposition, that the scheme should operate for a period of ten years. It may be said to me that the Government has indicated that it contemplates that, before the expiration of the five-year period of this scheme, a continuance of the scheme, either on the same or a revised basis, will be negotiated. But, when all lias been said and done, if stability is to be achieved in this industry, it is well to take a long-term rather than a shortterm view. It is noteworthy that, under clause 17, the guarantee given by the Commonwealth will be restricted to wheat that is, in fact, exported by the board, or that has been sold for export, and wheat that is in the process of being exported. The guarantee will be restricted to 100,000,000 bushels of wheat in two categories. In view of the difficulties that seem to lie ahead, why should the Commonwealth’s guarantee stop short at 300,000,000 bushels? “Why should it not extend to all wheat exported ? It would only be reasonable. I invite the Senate to consider that the glut of wheat in the world could saturate the world’s markets, and that, for a period, it may be difficult to sell Australian wheat at all. Certainly Australia would not be able to consume the whole of the wheat produced in this country. I suppose I am right in saying that only about one-third of our production is consumed in Australia. If a position arose in which it was diff- cult to dispose of Australian wheat, the guarantee by the Commonwealth would not come into play. Because the fund will be established by a charge on exports, the guarantee will only apply to wheat exported or in process of being exported.

The only other comment that I should like to make at this stage is in relation to the cost of production, which is referred to in clause 5, which provides that, as for last year, the cost of production shall be deemed to be 12s. 7d. per bushel. Subclause (2.) of that clause provides -

The Minister shall determine the cost of production on the basis of fair average quality bulk wheat free on rails at the ports of export.

He has told us that he must so determine the cost of production. Sub-clause (3.) reads -

In determining the cost of production of wheat of a season, thu Minister shall: (a) take as a basis the sum of Twelve shillings and seven pence as the cost of production of wheat of the season that ended on the thirtieth day of September, One thousand ni,ie hundred and fifty-four; and (6) make such increase or decrease in that sum as he considers appropriate by reason of increases or decreases in costs.

Those of us who are concerned with matters governmental, know that the term “ cost of production “ means a good deal more than is generally implicit in that term. When one normally speaks of the cost of production of a particular industry, one allows for no element of profit. But the 12s. 7d. a bushel that has been taken as the Minister’s starting point, as from the 1st October, this year, includes many elements of what might normally be termed profit, such as interest on capita] invested, and a reasonable return for the efforts of the wheat-grower and his family. It is not understood by the general community that the cost of production, in its application to wheat, has that wider basis and wider understanding. I think that the Minister missed an opportunity by not devoting, in his second-reading speech, some attention to that aspect of the matter, because it is important that this bill shall be acceptable, not only to all political parties of the Parliament, but also to the wheatgrowers of Australia. There is no broad feature of the bill to which the Opposition takes exception. As I indicated earlier, we support it. I have addressed these remarks to the Senate, not in derogation of the bill, but as a mark of respect to a measure of such very great importance.

Senator PEARSON:
South Australia

– I support the bill, and I say at once that I agree with the Leader of the Opposition (Senator McKenna) that a measure of such importance should not be hurried through either. House of the Parliament. Having regard to the importance of the wheat industry to Australia, it is imperative that a measure such as this should receive close attention ‘by every member of this chamber. A searching analysis of it was made by the Leader of the Opposition. I appreciated the way in which he stated what he considered were fair explanations of its various clauses. The Minister acting for the Minister for Commerce and Agriculture (Senator McLeay) stated that this bill had been introduced as a result of an agreement between the Commonwealth and the States on the one hand, and between the Commonwealth and the Australian Wheatgrowers Federation on the other hand. It is pleasing to note that the measure has the overwhelming support of a great majority of the wheatgrowers of this country. As the Minister stated, approximately 47,000 wheatgrowers voted in favour of the plan, and 3,000 against it. Overwhelming support for it was forthcoming from the wheatgrowers of all States, including Victoria. Indeed, in that State, the growers recorded the largest vote of all States in favour of the proposal, and thus expressed their utter contempt for the attitude of the Victorian Government over many months in connexion with the stabilization proposal. By its action, the Victorian Government held up the introduction of this important measure. It prevented a poll of the growers for many months. The Victorian Government was out of step, not only with the governments of the other States, but also with the wheat-growers. It was tragic that that Government did not come into line earlier. When the 1953-54 wheat crop was marketed about ten months ago, it was not known whether a stabilization plan would operate. A decision should have been taken more than twelve months ago, so that the growers would know the con ditions that would operate in relation to the crop that they delivered last year. However, as I have said, the matter was ultimately submitted to the growers, who indicated their overwhelming support for a continuance of stabilization. Their vote showed that they appreciated the security that a continuance of stabilization and orderly marketing would provide for them.,

I want to pay a great tribute to the Minister for Commerce and Agriculture (Mr. McEwen), who is absent overseas on important matters. It is unfortunate that he is not in Australia to see this measure pass through the Parliament. If ever a man displayed tolerance, patience and skill in endeavouring to organize a stabilization scheme, it has been the Minister for Commerce and Agriculture. A great tribute must be paid to him for the success of his deliberations. The Minister for Shipping and Transport (Senator McLeay) acted for the Minister for Commerce and Agriculture on a number of occasions, and his efforts should also be commended most heartily. Unfortunately, during some of the discussions, the Minister for Commerce and Agriculture was laid aside by sickness and the Minister for Shipping and Transport then stepped into the breach and conducted some of the negotiations at a difficult stage. He has assisted materially in making the introduction of this bill possible.

As the Leader of the Opposition said, the States have agreed to fix the home-consumption price for wheat at 14s. a bushel for the period of operation of this legislation, namely, five years. The legislation will expire with the sale of the 1957-58 wheat crop. This Government has undertaken, in this legislation, to guarantee the cost of production for every bushel of wheat exported up to a total of 100,000,000 bushels. I have no objection to what the Leader of the Opposition said concerning that proposal; but perhaps 100,000,000 bushels will be about the total amount of wheat exported each year. I remind honorable senators that Australia’s average wheat crop would total about 170,000,000 bushels. I understand that this year’s crop will not total more than 140,000,000 bushels. In spite of what the. Leader of the Opposition said, certain areas in Australia are not enjoying a bumper harvest. I should think that the quantity of 100,000,000 bushels which will be guaranteed for export, plus the amount that we normally use in Australia for various purposes, namely, about 70,000,000 bushels, would about equal the total quantity of wheat produced in an average season. It will be in the interests of primary producers to pass this valuable legislation

The wheat-grower is entitled to the degree of security that he will be afforded by the bill. That security has not been achieved easily. It has been achieved because the growers, over a period of years, have organized themselves to some extent and have been able to thrash out their points of difference and reach u. certain measure of agreement. They have informed the Government of the manner in which they would like it to co-operate with them. Having achieved that amount of agreement, the growers are able to speak with some unanimity. On more than one occasion, the Minister for Commerce and Agriculture has expressed his appreciation of the extent to which the industry is able to speak for itself. In view of what has happened during the recent five-year period of wheat stabilization, the wheat-farmer is entitled 1o some security. Various estimates have been made of the additional amount of money that the farmer would have received during the last five years had there been no stabilization scheme during that period. I am not quibbling about that.

I supported the last stabilization scheme and I support the present scheme for this industry. I am prepared to support a stabilization scheme for any other primary industry that expresses the wish to have one. However, in the past five or six years, under the terms of the old legislation, wheat has been sold in Australia at prices far below those which could have been obtained had there been no stabilization- scheme. During the whole period! of the stabilization scheme, world parity wheat prices have been greatly in excess of home consumption prices. In view of the advantage that the Australian consumer has received during that: ‘period he should not now quibble at the measure of security that has been provided for the v/heat-grower in this legislation. I am afraid that some people rather envy the wheat-grower Ais present comparative security. I wish to show these people how the consumer has benefited as a result of the previous stabilization scheme. Various estimates have been made of the amount that the farmers may have lost as a result of the legislation that has operated in the last six years. Some people have estimated the amount at £200,000,000. I am not in a position to make an estimate. But the sum would amount to many millions of pounds. The home consumption price for wheat six years ago was about 6s. 9d. a bushel and not long afterwards world parity price was over £1 a bushel. I am not criticizing the previous stabilization scheme. But the wheat industry is entitled to the measure of security that this bill will afford.

The Leader of the Opposition, to whom I listened with great interest, commented on the world wheat market. I am not in a position to contradict what he said but I think that, perhaps, he was being rather despondent in regard to the future of wheat marketing. Perhaps we have been through the dullest period of wheat marketing outside- Australia. It is true that the big wheat producing countries, particularly Canada and the United States of America, have accumu-lated very large surpluses which did threaten, and perhaps still do to some extent, the successful marketing of wheat. But I am not unduly pessimistic about that. I believe that, like Australia, those countries are experiencing a rather lean season. That is particularly true of Canada, and it may easily be- that, within twelve months or so, the wheat market will be restored to normal. There is no need for panic at this stage. The outlook is much better than it was a year ago. Even at that time, I felt that there was no need for panic. Much less is there any occasion for panic now. I believe that wheat importing countries such as the United Kingdom will find it necessary to start buying wheat again in large quantities in the near future. We all know that, for certain reasons, Great Britain and other nations accumulated substantial surpluses of wheat. No doubt they act wisely. But those surpluses are now being used up, and it will be necessary to buy wheat again. I understand, from reliable sources, that wheat is already being sold overseas more readily than was the case a few months ago. I believe, therefore, that normal trading conditions are likely to be restored very soon and that wheat will once again now to the world markets. I am reinforced in that opinion by the fact that Australia can produce wheat considerably cheaper than it can be produced by competing countries. I have it on the authority of people whose business it is to assess these things, that the cost of producing wheat in Australia to-day is approximately 12s. 7d. a bushel, whereas in the United States of America, it cannot bc produced for less than the equivalent of 15s. a bushel. While we have that advantage, we have nothing to b<? afraid of. This is one industry in which our production cost is lower than that of most of our competitors. Unfortunately, some other industries are not so fortunate, and are rapidly reaching the stage at’ which production costs will virtually put us out of the world’s markets. But’ that does not apply to the wheat industry.

I, too, have received the telegram from the Wheat Growers Federation, now deliberating in Perth, to which the Leader of the Opposition referred. I remind the Senate that the Minister, referring in his second-reading speech to the matter of ministerial direction to the board, said -

There” is a provision- in the hill that will enable the Minister to issue directions to the Wheat Board on wheat-selling policy, if that should prove to be necessary at any time.

The Minister went on to say -

It is far from thu Government’s intention that that provision should open” the way to government interference in the wheat-selling operations of the board, but it will be obvious, and it lias, in fact, been clearly stated to the Wheat Growers Federation, that as the Commonwealth assumes the financial responsibility of guaranteeing the plati from public revenue, then, in the interests of the taxpayers generally, it cannot bo indifferent, for instance, to the price at which the board may be willing to sell’ wheat at some particular time or to sortie particular market

It was interesting to hear the’ Leader, of the Opposition raise this point to-dap

I am confident that no Minister’ of this Government would ever direct the board to sell wheat for less” than the price that it could otherwise obtain. In spite of frequent denials by honorable senators opposite, it is oil record that a Labour Minister sold Australian wheat to New Zealand’ at- far below the ruling price. That is why I say it was rather interesting to hear the Leader of the Opposition criticize a certain clause which, I am sure, the Minister is most eager to see retained in the bill. Candidly, I am not so happy about that clause myself, because, although I have no doubt that no Minister of this Government would ever give a wrong direction to the board, there is a possibility, however remote, that this Government will not always be in office. In that event; with this clause remaining in the legislation, the way would be open for some future Scully or Pollard to give a direction to the board to sell Austraiian wheat for less than the normal price. I should like some comment from the Minister, either in his reply to the second-reading debateor at the committee stage”, on that point.. Apart from that, I heartily commend th,legislation. It has already been approved by a vast majority of wheat-growers, and. I congratulate the Government upon tb.iv fact that, after a period df negotiations,, it has been able to introduce this measure.

Senator BENN:

– Every one agrees that the wheat industry is one of Australia’s most important industries. I regard it as an important industry because it is the foundation of our food-producing, industries. It is” directly related to the- bread, biscuit, and’ cake” manufacturing industries. It is” not possible- to think about wheat without giving some* consideration to the pig and poultry industries: So, I think’ one can- truthfully claim” that the wheat industry is the basis’ of politics in. Australia. This measure has many important aspects. The Leader of the Opposition (Senator McKenna) has- stressed the economic importance of the wheat industry and has emphasized how the sale of Australian wheat overseas assiststo maintain our credit balances. We arenow considering a stabilization plan. On various occasions- 1 have heard honorable- senator’s opposite say that the law of supply and demand should be allowed to operate. I have heard them advocate that principle. I ask them to consider what the price of wheat would be at the present time in Australia, and also overseas, if that principle had been allowed to operate. I do not suggest that we are adopting a false method of assisting the wheat industry. I support the measure for sound reasons. I believe that those who work in the way that wheat-farmers have to work are entitled to suitable payment for their labours. I also firmly believe that the wheat-grower is entitled to a reasonable return on his capital investment. We on this side of the chamber would have no objection to the measure if it proposed to do no more than guarantee to the wheat-grower his costs of production.

I do not view the future of the wheat industry with any great optimism. Indeed, I can see nothing but gloom for the industry, not only here but also in other countries of the world. The Leader of the Opposition dealt with some of the legal aspects of this bill, but I propose to indicate the factual position of the wheat industry. I understand that the harvest year commences on the 1st November of each year. At the commencement of the harvest year 1952-53, wheat stocks in Australia amounted to 38,000,000 bushels.

Senator Seward:

– Is not the honorable senator referring to 1953-54, instead of 1952-53?

Senator BENN:

– If the honorable senator will bear with me, I shall clear his mind on that point. As I have said, at the commencement of the last harvest year, 38,000,000 bushels of wheat were carried over. Production during the last harvest year, which ended only yesterday, was 199,000,000 bushels, so that during that period of twelve months, our stocks of wheat amounted to 237,000,000 bushels. In other words, the Australian Wheat Board had to dispose of 237,000,000 bushels of wheat.

Honorable senators who have spoken during this debate have not referred to Australia’s annual consumption of wheat, and I propose to do so. It is estimated that our annual consumption of wheat for all purposes, including milling, stock feed, and quantities held by farmers for various reasons, amounts to 80,000,000 bushels. Therefore, last year the Australian Wheat Board had 157,000,000 bushels available for export. The board sent some of its officers to Asian countries, including Japan and Malaya, in an endeavour to sell the wheat, but they were not very successful. So far, no more than 60,000,000 bushels has been sold. According to my calculations, 97,000,000 bushels of wheat are held in storage at the present moment. We have just entered another harvest year, and although it has been said that this harvest will not be as good as those of previous years, nevertheless we have to face the situation that millions of bushels of wheat will be harvested and added to the carry-over of 97,000,000 bushels. That is not a very bright outlook for Australia. As I said a while ago, I regard the wheat industry as important for various reasons, perhaps the main one being that it is a family industry. If honorable senators go around the wheat farms they will find that many of them are operated by fathers and sons. The industry is also important from an employment point of view.

The Australian Wheat Board has been confronted with the problem of finding storage space for our excess wheat production. I have examined the situation and have found that the board is about to expend approximately £3,500,000 in connexion with the storage of excess wheat in Australia. Just how long we shall continue to store up these surpluses, I do not know, but I do know that the quality of wheat deteriorates when it is stored, and that weevils can destroy the grain completely.

I have given honorable senators a glimpse of the condition of the industry in Australia. However, we have also to be concerned with marketing and production problems in other countries, because it is an international industry. It will be found that the position in other countries is somewhat worse than it is in Australia. Production in the four major wheat-producing countries - the United States of America, Canada, the

Argentine and Australia - amounted to 2,200,000,000 bushels during the 1953-54 season. The only way in which I could arrive at the quantities of wheat sold by the various countries during that harvest year was to ascertain the quantities shipped from those countries. In 1952-53, shipments from the four countries to which I have referred amounted to S50,000,000 bushels, whilst last year, they amounted to only 635,000,000 bushels. It is, therefore, apparent that exports of wheat from the major exporting countries of the world decreased by 215,000,000 bushels. That decline will present problems not only for Australia, but also for other countries.

I propose to cite a very reliable statement on the wheat industry in order to indicate the seriousness of the position throughout the world. The statement, inter alia, is as follows : -

The changed circumstances since 1048 are well exemplified by the situation which prevailed during the 1953-54 international wheat year, which has recently closed. Production of wheat in the four major exporting countries, the United States, Canada, the Argentine and Australia, totalled 2,200,000,000 bushels, a figure only slightly smaller than the record output of 1952-53, and about 740,000,000 bushels higher than the average pre-war level. Shipments by the four countries fell sharply from 850,000,000 bushels in 1952-53 to only 035,000,000 bushels in 1953-54. The country affected most by the drop in exports was the United States of America, whose share of the total trade of the four countries was reduced by 7 per cent. The Canadian and Australian share of the available market was also reduced, mainly as a result of the resurgence of Argentine exports, following the more favorable harvests of 1952-53 and 1953-54. Shipments by the Argentine increased from 40,000,000 bushels in 1952-53 to more than 100,000,000 bushels in 1953-54, and her share of trade rose from 4 per cent, to 16 per cent. By the end of June, the total Argentine exportable surplus had been sold, and Plate wheat has now disappeared from world markets until the new crop becomes available towards the end of the year. In striking contrast to the Argentine position, end of season stocks of wheat held in North America established a new record of nearly 1,500,000,000 bushels. Total stocks in the four major exporting countries, on the 31st July last, were estimated at about 1,700,000,000 bushels, compared with approximately 1,200,000,000 bushels on the same date last year.

That statement indicates the position of the wheat industry in Australia and other countries of the world.

I do not propose, at this stage, to say anything about the guarantee for which the bill provides. I have been unable to obtain information about the formula which the Government uses to ascertain the exact cost of producing a bushel of wheat. I know, however, that costs vary. In Queensland, foi* instance, artificial manures and fertilizers are not required for the production of wheat, whereas they are required in other States. Transport costs also vary. Perhaps some honorable senators opposite will be good enough to indicate, during the debate, the method which the Government will adopt to ascertain the cost of production. I have spoken to experienced wheat-farmers on this subject, and I have been informed that it costs at least 10s. to produce a bushel of wheat, an estimate which I am prepared to accept.

An important feature of the bill is the fact that, in certain circumstances, the Treasury will be involved in these wheat marketing arrangements. The people of Australia also will be involved, because they, as taxpayers, will have to provide the funds should the price of wheat on the export market fall below the cost of production. I notice also that the guarantee in respect of export wheat is limited to 100,000,000 bushels. I do not say that that indicates- a limitation of the area to be cropped. I do not believe that the Government had any intention of limiting wheat production when it set the quantity that would be subject to the guarantee at 100,000,000 bushels. Provision is made in the bill for the payment of a premium to Western Australia, and for the payment of freight on wheat that is shipped to Tasmania. The Opposition has no objection to those provisions. The two States referred to are a part of the Commonwealth of Australia, and it is of the essence of federation to regard the nation as a whole. We support a policy of economic justice to all States. The Opposition believes that the scheme for which provision is made in the bill is essential for the wheat industry because of its economic value to Australia, of its effect on the wheat-growers and their families, and of its significance as one of the basic food industries.

Senator REID:
New South Wales

– I join with other honorable senators in supporting the bill which is of importance to the economy of Australia. Wheat production is Australia’s second biggest industry, and it plays an important part in our overseas trade. I believe that we should do everything possible to contribute to the security of such an important industry. About 70,000 farmers voted in the referendum on the proposed stabilization scheme. In addition to those 70,000 wheat-farmers and their families, thousands of workers are interested in the success of the wheat industry. Many are engaged in milling, and the manufacture of implements that are required for the efficient production of wheat. Honorable senators on the Opposition side have stated that the first wheat stabilization scheme wa3 introduced by a Labour government. I recall that a scheme for the stabilization of the wheat industry in Australia was introduced in 193S. At that time, the overseas price of wheat was exceptionally low, and the States were called upon to discuss a proposal to keep the wheat industry going on a sound basis. After considerable discussion, it was agreed that a stabilization scheme should be introduced. Speaking from memory, I believe that the price fixed for wheat for home consumption was 5s. 2d. a bushel. That scheme was inaugurated by the Lyons non-Labour Government at the request of the States, and it was still functioning when the Government led by Mr. Menzies, went out of office in 1940. I do not agree, therefore, with the statement that only the Australian Labour party has been responsible for, or interested in, the stabilization of the wheat industry.

The policy of the party that I support has always favoured the orderly marketing of primary products so long as they are handled by producer representatives or producers form a majority on the responsible boards. That policy has great advantages. The party that I support has always been opposed to any stabilization scheme or board that is under the control of the Parliament or a Minister. We do not believe that the wheat industry should be a political football. For that reason, I take exception to some provisions of the bill. When farmers put their products under the control of a board, or into a pool for orderly marketing, the products still belong to them. Surely nobody will deny that that principle should apply to primary producers, just as it applies to the labour of the ordinary man in the street who believes that he has the right to sell his labour as he sees fit. Surely farmers have the right to control the products they grow so long as they are within the laws of the land. I have always been opposed to any bill that gives to any Minister the right to say to a board set up for the marketing of primary products that it must do this or that in the handling of the products. I object to clause 13 of the bill which provides that the Minister may give a direction and that the board shall implement it. I agree with the terms of the telegram from the wheat-growers conference in Perth that has been read by the Leader of the Opposition in the Senate (Senator McKenna). Irrespective of the political character of the government that is in power, I believe that no Minister should have the right to dictate to the producers about the handling of their products.

As Senator Pearson has said, we remember one Minister who compelled a wheat board to sell a quantity of wheat to another nation at a price other than the rate that the board could get elsewhere for every bushel it handled. It was a long while before the details of the sale were made public. In defence of that action, it might be claimed that the producers were paid for the wheat, but the government of the day agreed to make up the difference between the sale price and the price that should have been paid only after pressure had been brought to bear from outside. I should not like to see that transaction repeated. In compliance with various plans that are, or have been, evolved to try to raise the standard of living in South-East Asia and elsewhere, the Government might decide to supply millions of bushels of wheat to one country or another for nothing or at a price below export parity. If that should happen, the wheat producers should not have to meet the loss involved. That should be borne by all the people of Australia. Then the farmers, as well as other sections of the community, would pay a fair share.

I agree with the statements that were contained in the telegram from the Wheat Growers Federation of Australia that was read by the Leader of the Opposition. I discussed this matter only a fortnight ago with representatives of of the Farmers and Settlers Association of New South Wales. The association believes that a clause should be written into this bill to protect the farmers if losses are incurred as the result of a direction by the Minister. Surely there is nothing wrong with that proposal. If a Minister is foolish enough to give directions that the Australian Wheat Board must accept, and the transaction results in a loss, the Treasury, representing the taxpayers, should be prepared to meet the loss. A Minister might direct that a certain amount of wheat must not be sold, .and the wheat might deteriorate while it is held in store. A loss might be incurred because the wheat was not sold when a profitable market was offering. I believe that a clause should be written into the bill to protect the interests of the wheat-growers. We only ask that the farmers should receive for their products the equivalent of the market price available.

Senator Wright:

– Is not the Minister in the position of guarantor?

Senator REID:

– I am referring only to a direction that the Minister might give. I admit that, as a Minister of the Crown, he must be prepared to watch the interests of the taxpayers, and make sure that nothing foolish is done by the board, either by refusing to sell when a market was available or by selling at a price with which the Minister does not agree. However, in spite of the gloomy predictions of Senator Benn, it will be some time before the Australian Government gets into the picture at all, and before it is asked to contribute to the stabilization of the industry financially. I am referring to the action that should follow a direction by the Minister resulting in a loss to the growers.


– Like the wheat agreement with New Zealand.

Senator REID:

– Yes, after that style. The wheat-growers suffered a temporary loss then, and it would have been a permanent loss if the government of the day had not been forced to remedy the situation. I suggest the inclusion in the bill of a new sub-clause or clause along the lines that I have indicated. There is nothing wrong with the principle of that proposal which has the support of the wheat-growers. I believe that that aspect was considered when the Minister for Commerce and Agriculture (Mr. McEwen) had discussions with the Australian Wheat Growers Federation. If my recollection is correct, he took the view that there was no harm in the inclusion of such a provision in the bill. When similar opinions are expressed by the wheat-growers, they should be accepted, and an appropriate clause inserted in the measure. I support the bill because it gives the wheat-growers some security for the future. I have not the gloomy outlook of Senator Benn. I believe that the position will correct itself in a year or two because nature is a great leveller as it has shown in the past. Although we have had good rains, I do not agree with .Senator McKenna that we shall have a bumper wheat harvest in Australia this year. The estimates that have been made do not support his view. In New South Wales, the prospect is that this year’s wheat crop will be small, probably between 30,000,000 and 50,000,000 bushels. Some of the other States may be better off than New South Wales. Queensland for example, is considerably better off, because there has been ample rain there over a period.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– What is the normal wheat crop in New South Wales?

Senator REID:

– It is between 85,000,000 and 90,000,000 bushels. Speaking from memory, I think the average crop is about 80,000,000 bushels, but sometimes it is as much as 100,000,000 bushels. I do not take a gloomy view of the world wheat situation. The last estimates indicate that both the Canadian and the American wheat crops this year will be many millions of bushels below the average. That is the position throughout the world. It has been estimated that the French crop will be considerably smaller than usual, and it appears that France will have to import wheat during the coming year. Those are factors that we must take into consideration.

I do not think there is any need to be pessimistic about the future prospects of the Australian wheat industry, but I believe our wheat-growers should be treated in such a way as to give them a feeling of security. As Senator Pearson has said, the contribution that the Australian wheat-producers have made to the economy of this country over the years justifies them in asking now for some security in the years to come. The wheatconsumers have played their part to assist the wheat industry. In 1938 and 1939, when the export price of wheat was 2s. 9d. a bushel, they were charged 5s. 2d. a bushel for wheat for human consumption, but fortunately that state of affairs did not continue for very long. The wheat consumers played their part when the wheat-growers were in a difficult position. Over the years, the wheat-growers ‘have played their part to assist the consumers and the country in general when called upon to do so, and they feel they are justified in asking now for the security which this bill is designed to give to them.

Senator McKenna referred to what is known as the revolving fund. I have not been able to get uniform interpretations of the clauses that relate to the fund. I have not been able to ascertain exactly how it is proposed that the board shall distribute any moneys in excess of £20,000,000 standing to the credit of the fund, or, at the end of the five-year period, the whole of the money in the fund if another fund is not to be established. I think the wheat-producers are entitled to know exactly how the money will be distributed. I have heard it suggested that the pool for each year will be treated as a separate entity, and that the growers who contribute to the pool for a particular year will receive a proportion of the surplus, if any, for that year. I have heard it suggested also that that will not be the case, and that a loss in respect of any one year will be spread over the whole of the five-year period, so that growers who sell wheat to the board only during years when the Commonwealth is not required to make a contribution to the fund will be compelled to bear a proportion of the loss incurred in a year when the

Commonwealth makes’ such a contribution. I believe that the pool for each year should be treated as a separate entity, as was done in the past. The participants will not be the same each year, because during the operation of the scheme growers will be coming into and going out of the industry. If the pool for each year were not treated as a separate entity, people who had contributed nothing to the fund, because they operated in a year when prices were very low, might reap the benefit of payments made to the fund by other growers in other years. I should like this matter to .be clarified, because I believe we are entitled to know exactly what will be done. I have heard three different interpretations of the clauses given by people who should know what they are talking about, and I understand that the Minister who introduced the bill in another place gave yet another interpretation.

The bill will help to stabilize a very important industry. I agree with Senator Pearson that great credit is due to the Minister for Commerce and Agriculture and Senator McLeay for their fight to bring the scheme into existence. The Minister, in the early stages of the negotiations, did his very best to bring all the States into line so that the scheme could be ready in ample time to deal with the last harvest. I understand that he had about 20 conferences with the Australian Wheat Growers Federation, and that he presided at many meetings of the Australian Agricultural Council at which the matter was discussed. He was able to persuade every State except Victoria to agree to a stabilization scheme. Victoria withheld its approval. When the Commonwealth and the other States, faced with the position that the wheat harvest was on top of them and that no legal marketing organization existed, suggested that an orderly marketing scheme be instituted, Victoria agreed to come into that scheme, but it withheld its approval of a stabilization scheme. It did so, as we saw later, only with the object of making a political football of the Australian wheat industry, because during the last general election compaign the Leader of the Australian

Labour party, with, the full approval of Mr. Cain, the Premier of Victoria, came out with a wheat stabilization policy. As Senator Pearson has said, Mr. Cain was answered emphatically by the Victorian wheat-growers when they voted on the stabilization scheme. The scheme was carried by a greater majority in Victoria than in any other State. The Victorian Government was mean enough to refuse, purely for political purposes, to agree to a plan that would have given the wheat producers of Australia a feeling of security. Mr. Cain and the Australian Labour party received their answer in May of this year.

Senator Courtice:

– The honorable senator does not suggest that Labour was opposed to wheat stabilization, does he?

Senator REID:

– I have not said that. Mr. Cain prevented a wheat stabilization measure from being placed upon the statute-book, not only of the Commonwealth but also of the States, because it is necessary for the State parliaments to pass complementary legislation. He was responsible for creating the situation that, when wheat was about to be harvested in Australia, there was no stabilization scheme in existence and no legislation empowering the Australian “Wheat Board to market the wheat. There was almost a state of chaos. Had it not been for the endeavours of Mr. McEwen and Senator McLeay, there would have been chaos in the wheat industry during the last harvest.

I compliment the Government on this bill, but I repeat that there should be written into it a provision to protect the wheat-growers from any loss incurred as the result of a ministerial direction. We know from experience that a Minister can give directions that are not in the best interests of wheat-growers. I say that any loss incurred as a result of a ministerial direction should be borne by the Treasury.


– Does the honorable senator say that merchants as well as the Minister should have control of the sale of Australian wheat?

Senator REID:

– The Australian Wheat Board should have complete control of the disposal of Australian wheat, and the majority of the members of the board should be wheat-growers. I do not say that the merchants should have more control than anybody else. The wheat belongs to the growers. A board will be appointed to control its sale, and that board should have complete control. I do not propose to deal with matters such as how the cost of production i3 calculated, although the formula is something about which the Australian Wheat Growers Federation, as a whole, is not very happy. The federation believes there are many items on which the cost of production is based that should be examined very carefully, because they may operate unfairly to the wheat producers. I understand that at a meeting of representatives of the Commonwealth and the States one matter that came up for discussion was the land value that should be assumed for the purposes of the formula. If my information be correct, the Commonwealth and State representatives at that meeting agreed that the figure should be in the vicinity of £14 an acre, but the formula figure is £6 an acre. That figure should be considered again with a view to deciding whether it is correct. If investigation shows that it is a fair figure, I think the wheat-growers will be quite happy to accept it.

The bill will give security to the Australian wheat-growers, but . it will not impose an undue burden on wheat consumers. Therefore, I support it, but I again express the hope that the Government will agree to write into it a provision to protect farmers from the effects of wrong ministerial directions.

South Australia

– A number of years ago, some men who were producing wheat and other primary products had a dream. They dreamed of a scheme that would give farmers some stability of prices and some control over the sale of their products. But those men were told that they were years ahead of their day, that their heads were in the clouds and that their ideas were far-fetched. All kinds of epithets were hurled at them for advocating such a scheme. It was suggested that it would be possible to organize the primary producers of Australia in an organization, similar to a trade union, thai, would protect their interests and place their views before the various parliaments, but many of the people then in power ridiculed the idea. To-day Senator Reid has told us that the farmers’ organizations have always believed in orderly marketing. They started with an orderly marketing scheme, not with a stabilization scheme. Do not forget that. There is a difference between the two things. They thought, they ought to handle their own affairs.

Sitting suspended from 54-5 to 8 i?.m.


– Prior to the suspension of the sitting, I reminded the Senate that Senator Reid had stated that the Australian Country party favoured orderly marketing, but that there was a difference between orderly marketing and stabilization. The bill before the chamber provides for a stabilization plan. Previous speakers have criticized some of its clauses, and claimed credit for what previous governments, of Various political colours, did for the wheat industry. Both Senator Pearson and Senator Reid condemned the action that was taken by the previous Labour Government in connexion with the supply of wheat to New Zealand. But they omitted to mention the reason why Australian wheat was made available to New Zealand at a relatively low price. Ever since I attained the age of reason, I have believed that when one enters a fight on the side of someone else one should stick to him and do everything possible to keep him in the fight. I remind the Senate that, at the time the wheat agreement with New Zealand was made, both countries were engaged in a war, and New Zealand needed wheat. At that time, also, New Zealand shipped other commodities overseas in ships provided by the British Government. A great cry was raised about the relatively low price that was stipulated for our wheat by the agreement. However, neither Senator Pearson nor Senator Reid mentioned that, due to the operation of a stabilization plan in Australia, the wheat-growers of this country did not lose under that agreement. Although certain persons have claimed that pressure was brought to bear on the government of the day, I remind the Senate that that government, on behalf of the people of Australia, paid to the wheat-growers the difference between the price under the stabilization plan and the lower price at which our wheat was sold to New Zealand. Irrespective of the criticism that has been directed at the Minister for Commerce and Agriculturein the previous Labour Government, who. negotiated the wheat agreement with. New Zealand, it was necessary for Australia to help its ally at that time. Noprevious speaker has mentioned that aspect of the matter. All that Government supporters have done has been to allegethat the wheat-grower 3 of this country were robbed by the agreement. Senator Pearson did not himself state the amount of money that he considered the wheatgrowers had lost under it, but said that it had been estimated that they lost about £200,000,000. He might just as well have said that they lost that amount of money. The honorable senator did not admit that, at that time, due to the shortage of shipping to transport our wheat to the other side of the world, our surplus wheat was almost worthless. Neither did he admit that the Labour Government that was then in office stood behind the wheatgrowers, up to a point. That government guaranteed the wheat-growers a certain return on their produce, and subsequently an agreement was negotiated with Great Britain, under whichthe wheat-growers derived a certain benefit. Although honorable senators opposite have made a great song about the alleged losses incurred by the wheat-growers at the time, I remind the Senate that the prices of other commodities were controlled. Furthermore, the wheat-growers received their cut from subsidies that were paid to other primary producers. Some primary producers are still receiving subsidies that were introduced at that time, although the amounts of the subsidies have since been reduced. I point out that, at the time that the agreement with New Zealand was negotiated, it was impossible for merchants to obtain ships to transport our wheat tome other side of the world. In point of fact, by the government of the day guaranteeing to the wheat-growers theircost of production, the wheat-growers were saved from incurring substantial losses. Indeed, that government protected wheat-growers from the merchants.

I shall return now to my opening theme. In days gone by, when Labour sought to introduce a plan to provide for continuous stabilization of the wheat industry, the opponents of Labour claimed that that was a Utopian ideal, and the merchants opposed us for all they were worth. The Liberal party stood behind the merchants, and stated that Labour wanted to interfere with private enterprise. Certain honorable senators who now sit on the Government side of this chamber stated that Labour should not impose conditions in relation to wheat which would preclude the merchants from getting their cut. But what is the position to-day? Despite the agitation that the opponents of Labour engaged in at that time, the Minister now tells us that the stabilization plan for which this bill provides is a good plan. The 1939 plan, to which Senator Reid referred, was not a stabilization plan. It was an orderly marketing plan, under which the government provided a certain guarantee to the wheat-growers, through the financial institutions of this country. I am not complaining about that, because even on that occasion the wheatgrowers were saved by the government stepping in to save them from being exploited by private enterprise. We have heard a lot about alleged interference by Labour with private enterprise. When the Government parties were sitting in Opposition in this Parliament, they complained bitterly about the fact that control in relation to wheat was vested in the Minister for Commerce and Agriculture. Indeed, the present Minister (Mr. McEwen) stated that, when the antiLabour parties gained office, they would correct that state of affairs. In 1948, when referring to the provision for outright control by the Minister, Mr. McEwen stated, as reported in Hansard of that year, at page 2396 -

We shall resist that principle whenever a Labour government applies it, and we shall alter it when the Australian people put us in the position to do so.

Although the people have since returned the anti-Labour parties to office, that principle is still applied -

I refer to the principle of private ownership of property.

Senator Reid claimed that a producer of wheat should have a right to say what should be done with his produce. The honorable senator is apparently the only one left of the old school who fought this principle when Labour was in office. He complained bitterly against the provision of the bill under which the Minister shall have the right to direct certain operations of the board, which will acquire all of the wheat crop, except portions that farmers may need for sowing and other purposes. In certain circumstances, the board will be subject to the direction of the Minister. It is true that Ministers seldom interfere in these matters, but I emphasize that the present Minister for Commerce and Agriculture, when sitting in Opposition, stated that he would remove this provision if and when he had the opportunity to do so. But it is still in the bill. Of course, I am not complaining about that. Indeed, I am glad that certain supporters of the Government have, to a degree, adopted socialism. I am glad that they have seen fit to interfere with private enterprise to the extent of taking over the control of the marketing of wheat, and guaranteeing to the wheat farmers the cost of production, thus protecting them from the merchants. I am glad that certain supporters of the Government have come round to our way of thinking.

I come now to the question of wheat sacks. The previous government, through the board, imported wheat sacks. This bill makes provision for the supply, and selling of wheat sacks, under guarantee by the Government, in the way that was done by the previous Labour government. Therefore, to a degree, this Government has adopted socialism in relation to certain primary producers. The Government has even gone to the extent of guaranteeing payment to the wheat producers for the wheat that they deliver to the board,- but the majority of wheat-growers do not realize that they might not be paid for their wheat until after it has .been sold. Therefore, despite the guarantee, wheat-growers might have to wait five, six, or seven years before receiving payment in full for their wheat. The bill does not provide that the wheat-growers shall be paid at the end of a certain pool, or within a certain period after that time. This applies particularly to the 1953-54 wheat crop. The Government has paid the guaranteed price of 12s. 7d. a bushel in respect of some millions of bushels of wheat of that crop, but two or three years may elapse before the accounts in relation to that crop are finalized. If that wheat is sold for less, a loss will be incurred by the Government. However, even if that happens, the wheat-growers will receive from the Government something that they did not expect to receive.

Senator PEARSON:

– Does the honorable senator suggest that that might happen in connexion with the 1953-54 crop?


– Yes. About 100,000,000 bushels remain to be exported and there is no possibility of selling it for some time. Some payment has been made to the growers in respect of that wheat hut they have no chance of receiving full payment unless the wheat is actually sold.

Senator Reid said that credit should be given to the Minister for Commerce and Agriculture and to the Minister for Shipping and Transport for the magnificent work that they had done in order to make the stabilization scheme possible. Senator Reid also said that the Labour party had made political capital out of the stabilization scheme. The facts are that, two years before the cessation of the last wheat stabilization scheme, arrangements had been made to hold a conference on the formulation of a further scheme but the Government did not take the necessary action. It held one or two conversations with the parties concerned but did nothing of an official nature for the purpose of continuing the stabilization plan. The Government did not take any action until five months prior to the end of the last plan. Then it arranged for headlines to appear in the press stating that the Labour party had prevented the formulation of a wheat stabilization plan. The fact is, of course, that the Labour party was the only party that had supported a stabilization plan for primary producers. The Literal party and the Australian Country party, with the support of the wheat merchants, opposed the proposal of the Labour party, claiming that a go vernment must not interfere with private enterprise. Honorable senators opposite knew that the Labour party’s plan was similar to the Government’s with the exception that the Labour party proposed that the home-consumption price for wheat should be based on the cost of production. Government supporters wanted the price to be a little higher. Certain sections of the Labour movement opposed that proposal and the Government parties made political capital of that opposition in the areas in which it was expressed and it was only in those areas that the propaganda of the Government parties was useful to them.

In 1939, it was proposed that a wheat stabilization scheme should operate for a period of three years. This proposal met with opposition and later on, when a Labour government was in office, a period of five years was suggested. I think that every member of the then Opposition parties agitated for a ten-year plan. Even at the last election, Government supporters contended that ten years would be an appropriate period for a stabilization scheme. Now Government supporters say that the plan should operate for five years. I do not think that the period of operation should be fixed. The scheme should operate continuously. It should not have to stop every five years for further discussion. If any amendment were necessary to the formula it could be arranged during the operation of the act. A continuous scheme of stabilization should apply to all primary produce, particularly that which is exported. I cannot find any suggestion in the bill that a conference should be held within the next five years for the purpose of extending the operation of the plan.

The wheat-growers of Australia have become so strong that they are able to make demands on the Government. A five-years’ plan of orderly marketing at a selling price based on the cost of production has been one of those demands. I think that the cost of production of wheat at the beginning of this month was 12s. 7d. a bushel and the Government has agreed to pay 14s. a bushel in respect of wheat used for home consumption. An extra ltd. a bushel has been charged in order to cover the cost of transport to Tasmania.

This additional charge will be paid by the consumers. The Government has stipulated that if the cost of production falls, the guaranteed price will fall also. That was what the Labour party proposed in the first place. The Government has proposed a term of five years for the plan so as to obtain the agreement of the wheatgrowers’ associations. The wheat-growers realize that at the end of five years they may be able to induce the Government to accept a proposition which will be more profitable to them. The wheat-growers’ associations have already commenced making representations to the Government because the bill includes a provision for ministerial control of - the scheme. As Senator Reid said, the wheat-growers have held a meeting in Western Australia and have sent telegrams to various members of parliament stating that the wheatgrowers should not have to suffer because of the decisions of the Minister who controls the stabilization scheme.

The wheat-growers want to be compensated for any mistakes that may be made by the Minister. I have no doubt that the Government will be responsible for any losses under the plan. Losses might not occur for the period of the current agreement But the time may come when circumstances similar to those of 1938 and 1939 will operate as they did prior to and just after the last war. In 1939, the bottom fell out of the market and wheat could not be sold. That might happen again. Then the Government will have to help the wheat-growers, as it has done in the past. Pressure will be brought to bear on the Government to give assistance. As the Minister for Commerce and Agriculture said in a speech in 1948, if a Labour government introduced a wheat stabilization plan with provision for ministerial control, a Liberal-Australian Country party government would remove that provision when it assumed office. Yet, the Menzies Government has provided for ministerial control in this bill. Of honorable senators opposite, only Senator Reid has raised objection to this phase of the legislation. Other Government senators have forgotten that they are pledged to support private enterprise. It will not be long before they will apologize for being socialists. I may ask one or two questions concerning certain clauses of the bill in committee but, apart from those clauses, I have no objection to the bill. My only objection to the measure is that the plan should operate continuously instead of being limited to a period of five years.

South Australia

– I am glad of the opportunity to speak on this bill, because it is a matter in which I am particularly interested. I was glad to hear the remarks of certain honorable senators opposite. Even senator O’flaherty gave a grudging acceptance to the bill. If all honorable senators indulged in Senator O’Flaherty’s habit of delving into forgotten events, the Senate would achieve nothing. Senator O’Flaherty claimed that the Government had had no intention of instituting a wheat stabilization plan before now, and that it deferred its action until 1954, when it made the matter an election issue. I flatly deny such a suggestion. I can speak with assurance on this subject, because I know the amount of work that the Minister for Commerce and Agriculture (Mr. McEwen) and the Minister for Shipping and Transport (Senator McLeay), who assisted him, did in order to bring into operation a scheme which would immediately succeed the previous scheme. Negotiations between the States and the Commonwealth, which were necessary under the Constitution, continued for many months until agreement was reached between five States and the Commonwealth. The Premier of Victoria stood out against the plan, which, he said, was unacceptable to that State. However, pressure was brought to bear upon him by the other Premiers, and finally, the interim plan which we now hope to put into operation, was agreed to.

Senator Wedgwood:

– The Victorian Premier was compelled to agree to it by the Victorian wheat-farmers.


– That is true. Considerable pressure was brought to bear on Mr. Cain by the Victorian wheat-growers, and as Senator Pearson has said, the ballot recently conducted showed in no uncertain terms how the Victorian wheat-growers felt about the matter. I do not go so far as to say that there was collusion - a real conspiracy if you like - between the federal Labour party, as represented by the Leader of the Opposition in the House of Representatives (Dr. Evatt), and Mr. Cain, to make this matter a political football for election purposes, but the situation could be interpreted in that way, and that is being charitable. Senator O’Flaherty claimed that the Australian wheatgrowers lost nothing as the result of the sale of Australian wheat to New Zealand just after the war. That is the most laughable statement I have ever heard made in this chamber. The truth is that Labour supporters have tried to keep this matter dark. I was in the State political sphere at that time and was not concerned with federal politics, but, being a wheat-grower, I knew the implications of the deplorable deal made by the then Minister for Commerce and Agriculture, Mr. Scully. To say that the Australian wheat-growers lost nothing is completely ridiculous. A very short time after the agreement had been signed, the price of wheat on the world’s markets rose to 12s. or 14s. a bushel. Did the then Labour Government subsidize the Australian Wheat Board ? It did not. The board, and therefore the Australian wheat-farmers, had to bear the expense of providing cheap wheat to New Zealand.

Senator O’Flaherty:

– How long did that agreement last?


– Subject to correction, I believe that it lasted for at least three years, and probably five years. Many millions of bushels of wheat were involved, and the wheat-growers of Australia lost many millions of pounds. 1 believe in the stabilization of the wheat industry and I have always believed in it. It is part of the policy of the party that I support, and we make no pretence about it or apologies for it. Our policy was outlined in the speech of the present Prime Minister (Mr. Menzies), in 1949. The right honorable gentleman said then that we, as a party, believed in the stabilization of primary industries, subject, of course, to the concurrence of those industries. The Leader of the Opposition described the Government’s action in relation to the hides and leather industry as a negation of the principle of stabilization. He said that if the Government had really believed in stabilization, instead of decontrolling hides and leather it would have introduced a stabilization scheme. The honorable senator forgot, apparently, that the producers of hides and leather have made no request to the Government for any such scheme. That is where we on this side of the chamber differ from honorable senators opposite. The Labour party would introduce stabilization schemes at every possible opportunity, and without consulting the industries concerned. Labour would not hesitate to socialize any industry that it thought should be socialized. But we, as a government, believe in private enterprise, and we shall interfere as little as possible with primary and secondary industries. If an industry does not want a stabilization scheme, why should we endeavour to force one upon it? I do not think that Senator McKenna’s comparison will stand the light of day.

I know something of the wheat industry. I have grown wheat practically all my life. I am still growing it, and I realize the tremendous value of a stabilization scheme to the wheat-growers and to the Commonwealth itself. At present, wheat is our second biggest exporting industry, and plays a major part in the maintenance of our overseas balances. It is elementary that we must export to pay for our imports. Another important feature of the wheat industry is that it provides a balance in our agriculture. It is true that wheat is not grown in every part of the Commonwealth, but the industry plays an important part in the economy of most States. Even in Queensland there is a considerable production of wheat, and there is every likelihood that the acreage will increase. Tasmania, of course, produces very little wheat. Wheat-growing is closely associated with the grazing industry. Wheat does not do very well in high rainfall areas, but in areas where the rainfall averages, say, between 20 and 25 inches a year, wheat is a tremendously important rotational crop and it is vital to the maintenance of soil fertility. The applications of superphosphate necessary to the growing of wheat play an important part in soil improvement. Wheat-growing also provides enormous quantities of hay for stock feed. This is particularly valuable in times of drought. Another important advantage which is seldom mentioned is the value of wheat-growing in weed control. On my farm in South Australia, I have found the rotational cropping of wheat of great assistance in this way.

The ramifications of the wheat industry are extensive. Wheat is vital to other primary industries including pig-raising and poultry-farming. Above all, of course, the value of wheat lies in its use for human consumption. As the Leader of the Opposition has said, about one-third of our annual wheat crop is used for human consumption. One of the great advantages of wheat for foods and for fodder is that it can be stored against bad times. Not very long ago, after one or two bad seasons, the production of wheat in this country had declined so much that there was a real danger that wheat would be scarce, not merely for stock feed, but for human consumption. A very serious position might easily have arisen.

I have dealt with the production of wheat and its value to the community. I should like now to say a word or two about the quality of wheat in Australia. The present low quality has resulted mainly from the introduction of high-yielding varieties which have a comparatively low protein content. Unfortunately, many varieties of wheat grown in the past, which had a high protein content and produced flour with good baking qualities, produced relatively small yields. Consequently, under our f.a.q. standards, there was no incentive to continue to grow these varieties. The trend towards the growing of low quality, but high yield wheats has been counteracted to some extent in recent years by research and by the application of science. The Roseworthy Agricultural College in South Australia has probably done more than has any other institution to improve wheat varieties. We have had excellent men in charge of that college. Indeed, the present South Australian Director of Agriculture, Dr. Callaghan, was formerly a principal of the Roseworthy College. He and his associates have done valuable work in improving the quality of wheat with the result that South Australian wheat to-day compares more than favorably with that of the other States. I believe that there has been some improvement also in the other States. In New South Wales, the standard fell to a very low level due largely to the production of a high yielding variety known as Bencubbin. This deterioration of quality has had a serious effect on baking properties. That reminds me that the bread rolls that we had for dinner to-night were probably baked from poor quality flour. Previous speakers have emphasized that it is not now as easy to sell wheat on the overseas markets as it has been. Big reserves have been built up in wheat-producing countries, such as Canada, the United States of America, and some in Europe. We have not been able to sell wheat as freely as we could in previous years. I believe there has been a recent improvement, and I do not expect any grave difficulties in the marketing of our wheat, provided that we meet the market. The Australian Wheat Board is charged with the duty of selling our wheat to the best advantage.

I am not pessimistic about our ability to dispose of our wheat on the world market, because our’s is soft wheat which is needed by the flour-consuming countries of the world for blending purposes. If we increase the protein content of our wheat and continue the manifest improvement in quality, we shall be able to market it as a soft wheat that will not need blending. If we continue the application of science to the growing of better quality wheats, I think that we shall achieve that objective. A higher protein value can be brought about by various means. For instance, we can grow varieties of wheat, which, under test, have higher baking qualities and higher protein values. Then again, the quality of our wheat can be improved by increasing our soil fertility. Both of those matters are being actively considered by the departments which handle the scientific side of our wheat industry. Although the marketing position is not as good as it could be, I am not pessimistic about it. I believe that Australian wheat is needed by other countries of the world and that we shall continue to be successful in placing our wheat with advantage on the markets of the world.

We, in Australia, are favorably placed in relation to wheat production. Due, in the first instance, to the efficiency of our wheat-farmers, and secondly, to soil conditions, we are able to produce wheat at a lower cost than is possible in practically any other wheat-producing country. Although our costs ‘ of production may seem high to us, they are not really high when compared with the costs in other wheat-producing countries. That is a very strong point in our favour.

I wish to touch upon the history of organized marketing. Senator Benn rather sarcastically referred, this afternoon, to our adherence to the law of supply and demand. It is true that we still believe in that law. It is operating now in this country, and will continue to operate. We also believe that it is necessary to have orderly marketing of wheat and other products which have to meet competition in the markets of the world. The orderly marketing of wheat is carried out by the board, as laid down in the bill. Labour, of course, takes great credit for the 1948-53 stabilization plan. I do not wish to deny the Australian Labour party any credit for that plan, but I point out that the wheat-growers would have been a great deal better off had no such plan existed, because in fact, we had a plan when we did not need one. We enjoyed extremely high overseas prices at that time; we had no difficulty in selling our wheat and, therefore, we could have done without that plan. Of course, the same conditions do not apply to-day. I think it was ‘Senator Pearson who stated that the wheat-growers had subsidized the consumers of wheat and wheat products in Australia to the extent of approximately £150,000,000. Back in the thirties, admittedly the wheat-growers received help from Commonwealth revenues. They required assistance at that time, and it was either that or complete bankruptcy for the industry. That financial assistance amounted to £12,000,000 or £14,000,000, but much more than that sum has been repaid since then. It has been estimated that, during the period of the war, and also during the time of the stabilization scheme which concluded recently, the Australian wheatgrowers paid out of their own pockets, in effect, £150,000,000 to the consumers, because of the home-consumption price which had been fixed for wheat. Surely, the people of Australia will not begrudge the wheat-grower a scheme to give him security and enable him to plan ahead for the ensuing five years.

It has been suggested that a stabilization scheme operated during the early years of the war. I cannot recall any such scheme, although I remember that, during the years up to 194S, there was a plan under which wheat was acquired. That wheat was handled by the Australian Wheat Board and marketed in an orderly fashion by it, but the stabilization scheme that the Australian Labour party introduced in 1948 was on an entirely different basis. It was a contributory scheme. As I said eaarlier, although the growers knew that, under that scheme, they were paying through the nose, they did not quibble because they had voted in favour of the scheme. They had expressed their belief in stabilization, and they accepted the principle of a fixed home-consumption price. Nevertheless, that scheme was responsible for great financial loss to them. As far as I can see, the principle of the plan initiated by the Labour Government in .194S originated in the minds of two previous members of this Parliament. I refer to the late Senator Uppill and Senator K. C. Wilson, as he then was. Those two men gave an enormous amount of attention to this matter. In the late thirties, the price of wheat had not made any appreciable recovery. In the middle thirties, it recovered to a degree, but there was a further decline in the late thirties until the outbreak of war, when the price was controlled. The WilsonUppill plan was the origin of the scheme that was eventually put into operation by the Australian Labour party. In that respect, the members of the Opposition have been guilty of plagiarism, as it were, because I do not believe that they had any such plan in their minds until Senator Uppill and Senator K. C. Wilson, after long consultation, formulated the scheme which was the genesis of the plan we have before U3 now. I pay a tribute to those two gentlemen for the work they did in connexion with the welfare of our wheat-growers.

Throughout the years, we have had a wheat stabilization scheme which has proved more or less satisfactory. Prior to the last general election, however, the Australian Labour party put up, as a sop to the wheat-growers, a scheme which, in my opinion, was completely fantastic. It had no regard at all to the Treasury obligations involved in it. The sky was the limit to the amount of wheat that could be produced and exported at cost of production. The scheme would have involved the Treasury in the expenditure of hundreds of millions of pounds. Senator O’Flaherty told us this afternoon what Labour had done for the wheatgrowers. In my opinion, the Jess said on that subject, the better. Labour’s scheme, to which I have referred, could have placed this country in a very difficult financial position. Its adoption could have led to a return of the conditions which applied in the early war years, when it was necessary for the government to pay wheat-growers not to produce wheat. I assure honorable senators that we can produce wheat in much greater quantities than it is being produced at the present time. There are many areas in Australia which could produce wheat, but which are not doing so. If we guarantee the growers a remunerative price for their wheat, and should the price of wool fall, there could be a tremendous stepping up of the production of wheat. In those circumstances we could see again the conditions that applied in the early ‘war years, when a Labour government paid wheat-growers in Western Australia 12s. an acre not to ‘grow wheat. Of course, it may be part and parcel of Labour’s policy to ‘ increase wheat production and then impose restrictions on the industry. Nothing pleases a Labour government more than to be able to apply restrictions.

I think that this is a good bill. As I said earlier, I believe that adequate provision is being made for the growers to make a sensible contribution to the fund which will be on the basis of approximately £20,000,000, and that it will provide stability for the industry during the next five years. I am not in favour of extending that period, because I think that five years is long enough. We have the assurance of the Minister that, when that period is coming to a close, further consideration will be given to the matter with a view to implementing another five-year plan, if it is found to be necessary. That this measure has the support of the majority of wheatgrowers has been made plain by the result of the recent ballot. I think that we in this chamber should give the bill our full support in the hope that it will stabilize an industry which is of tremendous economic importance to the Commonwealth.

In conclusion, I wish to refer to telegrams that I received from Perth to-day. To a point, I agree with Senator Reid, that there must be a degree of ministerial control when a financial commitment by the Treasury is involved, but if, as one of these telegrams points out, a ministerial direction to the Australian Wheat Board caused loss to wheatgrowers, I think the bill should contain provision for the recouping of such loss. I have another telegram with regard to the amount of money that would remain in the fund at the end of five years. The representatives of the wheat-growers in conference in Perth suggest in the telegram that the amount provided should be disbursed at the conclusion of the stabilization scheme. It is all very well to make a proposal of that kind, but I believe the growers would have derived more benefit if the £9,000,000 that was left in the fund in 1953 had been retained vo form the nucleus of a fund for this stabilization scheme. Therefore, I cannot support the second proposition that has been advanced by the Australian Wheat Growers Federation. However, I am an ardent advocate of wheat stabilization, and I have pleasure in supporting the bill.

Senator SEWARD:
Western Australia

– I rise to support the bill. Most honorable senators who have spoken in this debate have referred to the limited scope of the measure. I do not intend to repeat what they have said, although generally I support their statements. I congratulate the Minister for Commerce and Agriculture (Mr. McEwen) on the successful termination of his strenuous efforts on behalf of the wheat industry. Senator O’Flaherty said that the Minister had forgotten all about the wheat stabilization scheme until a few weeks before the general election for the House of Representatives, and that he then came forward with this scheme. That is not true. The Minister was endeavouring to get unanimity among the wheatgrowers for about two years before the election. The vote that should have been taken of the growers was not taken. A. plank of the Australian Country party’s platform sets clown that it will support legislation to give the Government control over the marketing of primary products only if the growers desire it. It was necessary to have a. poll of the wheat-growers a few weeks before this legislation could be introduced. The poll was taken, and a decision was reached. The bill was then brought forward, and I congratulate the Minister on his painstaking efforts and the successful termination of his work. I also congratulate the Acting Minister for Commerce and Agriculture (Senator McLeay), who also took a prominent part in the negotiations when the Minister was not able to attend to the work of his department.

Senator Benn painted a gloomy picture of the prospects for the sale of wheat. He said the wheat-growers would not get paid for years or, if they were paid, they would get the money from the Treasury, which would be the loser. “Whether those predictions will materialize it is difficult to tell, but some of the statements of honorable senators were so far from the truth that they are hardly worthy of contradiction. The position with regard to a surplus of wheat can change suddenly and dramatically. At the beginning of this year, we were seriously considering whether we should curtail the acreage of wheat in Australia because there was such a huge carry-over of wheat in other parts of the world. That concern was quite genuine. Provision was made for building additional storage in Western Australia, Victoria and New South Wales to cope with the big inflow of wheat that was expected, and for which the existing storage facilities were inadequate. Conditions have altered now even in Australia. Western Australia is faced with a serious decline in the wheat output this year. I believe that 199,000,000 bushels were available last year. This season production is expected to be down to about 135,000,000 bushels. It might be lower, because the finishing rains did not materialize >n Western Australia, and in some parts of the State there will be a serious reduction. Senator Hannaford said that wheat could be grown profitably in South Australia in areas where the rainfall was 20 to 25 inches. In Western Australia wheat can be grown profitably with 7 inches of rain or less.

Reverting to my references to the rapid changes that can take place in the wheat market, I shall read to honorable senators some extracts from a report on the wheat position in the world that I consider to be the best available in Australia. This report is supplied periodically ‘by the Trustees of the Wheat Pool of Western Australia. Reviewing the position of the wheat industry in the world, the report stated-^

News from Canada emphasizes the harm done to wheat crops by severe early frosts. Coming on top of damage from stem and leaf rust, this indicates further downward revision of the harvest estimate. This is now put at under 1.3 bushels an acre, which compares with about 25 bushels last year and 264 the year before. More serious still are the fears about the quality of the new crop. According to the Saskatchewan Department of Agriculture, as mUch as 85 per cent, of the crop in that province will grade No. 4 or worse. Another source estimates that taking Canada as a whole, not more than two-fifths of the new crop will be “ milling grade “.

If so, stress on quality may be the keynote of the world wheat trade in the season ahead. Perhaps a tenth of Western Europe’s new crop is quite unsuitable for human consumption and it is, in fact, selling as stock feed . The rest, though fit for human consumption, is Still weak wheat. In particular, the quality of the gluten is said to have suffered from “ the pronounced absence of sunshine “ in the ripening period. As a result, While last year most English mills used about one-third homegrown wheat in their grists, this year they may not use more than one-fifth or one-fourth, and whatever goes for English wheat this season goes for most French wheats also. In consequence, more hard wheat must be used.

Australia’s crop prospects have deteriorated lately. The position is worst in Western Australia and in parts of New South Wales. In Victoria, much depends on whether rain comes in the very near future. On present indications, the Commonwealth’s total Crop may not exceed 145,000,000 bushels, against 190,000,000 bushels in ]!)53-54.

Western Europe’s wheat crop, taken as a whole, is fractionally larger than last year. But this is a misleading picture. Several European countries have harvested smaller crops. Exceptionally severe frosts about February raised the curtain on an unfavorable spring growing season. This aggravated the situation, especially in Germany, Italy and Yugoslavia. Finally, the weather at harvesting time was generally abominable. England. France and Italy suffered particularly from the heart-breaking storms and rains that marked what should have been the summer As the summing-up communique of the United Kingdom Meteorological Office innocently put it: “A contributory factor to the unpleasantness of the summer . . has been the pronounced deficiency of sunshine”.

The rest of Europe, especially France, sowed a. much larger acreage this year than last, but man proposes and God disposes, and the yield has turned out smaller. The biggest reductions will be 60,000,000 bushels in Italy, 27,000,000 in Jugoslavia, 17,000,000 in Germany, 12,000,000 bushels in Greece, 5,000.000 in Britain and 0,000,000 in Belgium, Holland and Denmark together. These amount to a total fall of 127,000,000 bushels from last season’s good yield.

I invite honorable senators to consider that report in association with their knowledge of the yields in the United States of America and Canada, and the fact that the Argentine has used up all its stocks. That is ample evidence of the change that can take place in the wheat position in a few days. At the beginning of this year, we expected difficulty in selling our wheat. The position has changed, and I believe that the surplus will gradually disappear and we shall return to normal stocks. Under the provisions of this measure, growers will have an opportunity to contribute to a stabilization fund while prices are relatively good, and the fund will be available to assist them should prices fall below the cost of production.

I wish to refer to one matter that was touched upon by the Leader of the Opposition in the Senate (Senator McKenna) and by Senator Hannaford. They spoke of the growing deterioration in the quality of the bread that is sold in Australia, and they appeared to believe that this was due to the production of an inferior quality wheat. I challenge that contention. I admit, as Senator Hannaford has said, that many growers are more interested in varieties that give heavy yields than they are’ in those with a high protein content. That is largely because, in many instances, a premium is not paid for high protein wheat, and the growers are content to produce fair average quality wheat. If premiums were paid on high protein wheat, more of that type of wheat would be grown. I should like to see extensive experiments carried out in the production of bread. I believe such experiments would reveal that the deterioration in the quality of bread is, not due to a decline in the quality of wheat. In my opinion, the quality of bread has deteriorated because bread cannot be made by the clock. If bakers are to work only at certain hours, irrespective of atmospheric conditions, the quality of bread must vary. Yeast will not work in the bread the same way in all atmospheric conditions. It takes longer in cold or wet weather than it takes in hot, dry summer weather. When rules and regulations are introduced providing that bakers must not arrive at work until a particular hour, and must finish at a certain time, the inevitable result is bread of an inferior quality.

Senator Henty:

– Day baking is the trouble.

Senator SEWARD:

– Yes, it cannot be done successfully. I should like to see more inquiries made into that matter. I believe that the weather, would be found to be the cause of the trouble, and not any change in the quality of wheat. I support this bill in all but one particular. Senator O’Flaherty said that when the Minister for Commerce and Agriculture was a member of the Opposition, he said that if he were given the opportunity, he would remove certain sections from certain acts. I refer to the commodity control legislation. Each act contained a section unlike anything I had previously seen in 22 years as a member of Parliament. That was the section that gave the Minister power to over-ride decisions of the relevant board. It was removed from the three acts applying to meat, dairy products and dried fruits, by the Minister for Commerce and Agriculture. It is not true, therefore, to state that the Minister failed to do what he said he would do when he was a member of the Opposition.

I was astonished when I saw a similar clause in this bill, and I immediately got into touch with wheat-growers’ representatives in Western Australia. I believe that my communications to them led to the resolutions of the conference and the telegrams that honorable senators have received. I could not convince myself that this bill had ever been shown to the wheat-growers’ associations, and I wanted to verify that it had been. I do not believe that, if it had been shown to them, they would have accepted it with a clause giving the Minister power to direct the board. I do not agree with the clause, and in committee I shall move for it to be amended. I should never support a clause of that kind in any bill that came .before the Senate. I do not know whether it has the full agreement of the Ministers concerned, but I do not like it.

The point was made that the Minister will act as the representative of the Government, because a government guarantee is involved. To a limited extent, a government guarantee is involved. But Senator 0’Flaherty made some wild statements to the effect that, when a wheat-grower has put his wheat into a pool, he will be paid for it, although the wheat will not be sold for some years, and if the wheat is sold for less than the price paid to the grower, the Treasury will pay the difference. That is such a fantastic idea that I do not know where the honorable senator got it from. The wheat-grower will get an advance from the pool when he delivers his wheat, but he will not receive subsequent payments until the wheat has been sold. The board will not pay out money on wheat that has not been sold, especially when it has no idea what it will get for the wheat. The wheat-grower will not receive a final payment for his wheat at the end of the year he puts it into the pool. He may have to wait for three or four years before the pool is finally wound-up. In normal circumstances, the Treasury would not be required to find any money at all. It would have to find money only if there were no money in the stabilization fund and the overseas price of wheat were less than the cost of production figure. Then the Treasury would be required to pay the difference between the overseas price and the cost of production. However, there was no question of that during the last stabilization scheme, because there was always ample money in the fund. As Senator

Hannaford has said, when the scheme came to an end, the money in the fund was repaid to the growers. There was never any need to draw on Treasury funds. The chairman of the Australian Wheat Board, who will advise the Minister, knows more about the marketing of wheat than anybody else in Australia. Nobody can equal him in his knowledge of that subject. He, the other members of the board and the Minister apparently have agreed that there is a reasonable prospect of the stabilization fund being able to meet any calls made on it during a five-year period. Consequently, they have agreed to the scheme we are considering. So I think it would be quite wrong to give the Minister power to dictate to the board in any way, and in committee I shall move an amendment of the clause. I hope it will be agreed to by the Senate.

The stabilization scheme will operate for five years. It can be renewed only if, at a ballot, a majority of the growers express their desire for a renewal. In the event of the growers not approving of an extension of the scheme, doubtless any balance in the stabilization fund will be repaid to them, but if they agree to an extension, the money in the fund will be available to enable them to carry on in succeeding years.

Senator WARDLAW:

– I also support the bill, and I am glad to know that it has the general support of honorable senators on both sides of the chamber. As previous speakers have said, it relates to one of the largest - I understand, the second largest - of our primary industries. I believe it is very important to stabilize the prices of primary products for a period of years, and in this instance the period is five years. I regret that, owing to the opposition of one of the State governments, this scheme did not come into force in 1953, because the delay may have had a great effect on the overseas price of our wheat. The change from government-to-. government trading to contracts on a trader-to-trader basis has brought about many changes in the industry. At the time the change was made, it would have been very desirable for us to be in accord on a stabilization scheme for the industry and working together to keep the price of wheat as stable and as high as possible, because it is almost impossible to persuade overseas consumers to pay higher prices than we are prepared to pay in our own country. Without stabilization, orderly marketing would be destroyed. That would cause chaos in the industry, which must be avoided at all costs.

Under the dual plan presented to us, the Government not only has protected the wheat industry, but also has assured that production will be ample to meet the needs of Australian consumers, which is very important. The plan will tend to strengthen our overseas funds and protect the taxpayers against unreasonable inroads on the national purse. It honours definite promises made to the wheatgrowers. It is on all fours with Government policy, and recognizes the fundamental principle of orderly marketing, with guaranteed prices that give a reasonable margin of profit to the wheatgrowers. That, very reasonably, is a part of the policy of primary producers throughout Australia.

The Government has taken the producers into its confidence in making contracts with the United Kingdom and the people of Australia, so the producers have confidence in the Government, and will do their best to satisfy the food requirements of this country. It has been proved that the Victorian Government is very much, out of touch with primary producers in that State. It refused to accept the scheme proposed by the Commonwealth last year, but the recent poll at which 46,000 growers voted for the scheme and only 3,000 voted against it proved the contention of the Commonwealth that the scheme was acceptable to growers throughout Australia. I am a firm believer in orderly marketing and guaranteed prices, based on the found cos’of production plus a reasonable margin of profit. The production of food in quantities sufficient to feed the nation is a national problem and, in my opinion, also a national responsibility. I think farmers should be given a guarantee by the Government that it will take all it asks them to grow, particularly products that cannot be kept from year to year. I believe there should be no speculation in the food of the people, and I think that schemes which protect consumers, taxpayers and growers should be welcomed.

Senator Seward referred to the quality of bread and the reason why the quality is not as good as it was in the old days. I think day baking is the principal reason for the deterioration of quality. In the old days, bakers set their bread in the afternoon with cold doughs. Very often they got up at midnight to break down the doughs and let out the various gases. In the morning, if the night had been cold enough to affect the doughs, the bread was not baked until the doughs were quite ready. To-day, however, the men go to work at a certain time and the bread has to be ready for delivery to the roundsmen at a certain time. I remember the days when sometimes we did not get our bread until mid-day. If the baker considered that his doughs were not sufficiently forward to be made up for baking everybody had to wait, but the bread was of first quality.

I congratulate the Minister for Commerce and Agriculture- (Mr. McEwen) for the trouble he has taken to bring this scheme to fruition. I congratulate also the Minister for Shipping and Transport (Senator McLeay), who acted for his colleague on some occasions. Both Ministers went to a great deal of trouble to bring the scheme into operation, in the interests of the wheat-growers, and I am sure all honorable senators wish to pay them a tribute for their work. I support the bill.

Senator COOPER:
Minister for Repatriation · Queensland · CP

in -reply - Many of the honorable senators who have spoken to the bill have asked for information on the same points, so in replying to the debate I shall not reply to individual senators. I have been asked to indicate the nature of the State complementary legislation. The State legislation will follow the pattern of the Commonwealth legislation, but will omit provisions that relate to purely Commonwealth matters. I refer to the guaranteed price for export wheat, the stabilization fund and refunds of tax. Reference was made to a telegram from the Australian Wheat Growers Federation relating to one of the points of the bill. The bill is intended to put into operation a stabilization plan which the growers approved by more than 46,000 votes to less than 3,000 votes. It was endorsed by the growers’ organizations before the ballot was taken.

I agree it is essential to improve the quality of our wheat. That matter is being considered by the Australian Agricultural Council, and the Commonwealth Scientific and Industrial Research Organization and State Departments of Agriculture are pressing forward with scientific investigations to evolve better varieties of wheat. Senator McKenna suggested that the period of the scheme should be ten years, instead of five years. The previous scheme operated for a fiveyear period. The Government considers that five years is a convenient period, but I understand it is intended, before the expiration of the period of this scheme, to negotiate with the wheat-growers for an extension.

The clauses of the bill relating to the stabilization fund are designed to give effect to point No. 6 of the stabilization plan. The Commonwealth will underwrite the fund. Should there be a deficiency in the fund at any time, the cost of meeting the guarantee to the growers will be borne by the Treasury. Any balance in the fund at the end of the period of the plan will be carried forward to finance a new plan, if a new plan is approved by the growers. Otherwise, the money will be returned to the pools concerned, so that the growers contributing to each pool will receive a refund. The amount to be refunded will be the amount actually paid into the fund by each pool, with interest, less any amount paid out of the fund that is debited to the respective pools.

The Leader of the Opposition (Senator McKenna) asked for the factors which are taken into consideration in establishing the cost of production to be explained. This is a difficult and technical question, which has been explained in publications by the Bureau of Agricultural Economics. Senator O’Flaherty referred to the outlook in relation to the export market for wheat. This now seems to be brighter than it was a few weeks ago. Produc- tion in Canada and the United States of America is expected to be lower than last year, and the European crops have been affected by bad weather. Recent sales for export have indicated a firmer market price, and reports from the International Wheat Council, at its meeting in London, in mid-October, indicate that world exports are likely to rise again, to about S50,000,000 bushels in the wheat year which ends in August next. There are indications of a better demand for Australian wheat, and it seems likely that the outlook in the coming months will be favorable.

Senator Seward referred to subclause (2.) of clause 13, which provides -

The Minister may give directions to the board concerning the performance of its functions and the exercise of its powers, and the hoard shall comply with those directions.

The corresponding sub-section of the 194$ act reads -

  1. – (1.) The board may, subject to any directions of the Minister, for the purposes of the export of wheat and wheat products, the interstate marketing of wheat and the marketing of wheat in the Territories of the Commonwealth, or for the purposes of, or purposes incidental to, any international agreement to which Australia becomes a party-

This matter was discussed with the chairman of the Australian Wheat Board, who expressed the opinion that that section only gave to the Minister the power of veto. Clause 13, which I have cited, was drafted in its present form in order to clarify the position. I remind the honorable senator that this matter was referred to in my secondreading speech.

Senator Reid:

– Has the wording been altered in order to ensure that there shall be no loophole ?

Senator COOPER:

– I stated in my second-reading speech -

There is a provision in the bill which will enable the Minister to issue directions to the wheat board on wheat selling policy, if this should prove necessary at any time. It is far from the Government’s intention that this should open the way to Government interference in the wheat selling operations of the board, but it will be obvious-

This is the important point - and it has in fact been clearly stated to the Wheat Growers Federation, that as the Australian Government assumes the financial responsibility of guaranteeing the plan from public revenue then, in the interests of the taxpayers generally, it cannot be indifferent, for instance, to the price at which the board may be willing to sell wheat at some particular time or to some particular market.

I understand that this matter was discussed fully by the Australian Agricultural Council at its meeting on the 15th June, 1953, at which representatives of the Australian Wheat Growers Federation were informed of the council’s resolution in relation to wheat stabilization, which read, inter aiia -

Having regard to the great Treasury liabilities in respect to the guarantee and the position of wheat as an essential commodity the same kind of reserve ministerial responsibility in respect to the Australian Wheat Board as exists under the present plan should be maintained.

In March, 1951, at a meeting with representatives of the Australian Wheat Growers Federation, the Minister for Commerce and Agriculture (Mr. McEwen) stated the Commonwealth’s attitude in relation to sales of wheat by ministerial direction in the following words : -

If the Commonwealth wished to arrange a -ale at a concessional price, it would make up the difference to the Wheat Board.

It will be seen that the Minister for Commerce and Agriculture pointed out that, as the Government accepted liability to provide certain finance in connexion with the stabilization plan, it was considered that a measure of control by means of ministerial direction should be retained. It was also considered desirable to reserve to the Minister a power of direction, to be utilized only in the event of a big liability being entered into, or a serious fall of the price of wheat. As far back as June, 1953, the Australian Wheat Board was informed that such a provision would be made by the bill.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 4 agreed to.

Clause 5 (Cost of production).

Senator MeKENNA (TasmaniaLeader of the Opposition) [9.41]. - This clause enables the Minister to determine the cost of production from time to time, starting with a basis of 12s. 7d. a bushel in relation to the season which ended on the 30th September, 1954. The Minister for Repatriation (Senator Cooper) has indicated that the determination of the cost of production involves technical and complicated calculations. In these circumstances, I do not expect the Minister to outline all the details that are taken into consideration when establishing the cost of production, but I should like him to indicate whether I am right in saying that the cost of production includes, in addition to outofpocket expenses, a reasonable amount of remuneration for the grower and members of his family, as well as interest on his equity, if the property is mortgaged, or interest upon the total value of his capital investment, if the freehold is noi mortgaged.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– The cost of production includes interest on the capital investment as well as an allowance for the labour of the farmer and his family.

Clause agreed to.

Clauses 6 to 9 agreed to.

Clause 10 (Executive committee).

Senator MeKENNA (TasmaniaLeader of the Opposition) [9.4’4].- Thcclause provides - (1.) The Board may appoint any number of its members to be an Executive Committee, and may delegate to that Committee such of its powers and functions as the Board, subject to any direction of the Minister, determines.

(2.) . . .

Will the Minister inform me how the Minister for Commerce and Agriculture (Mr. McEwen) will know what goes on in the board? Is there any obligation on the board to keep the Minister informed in these matters? Although clause 35 provides that the Governor-General may make regulations in relation to the conduct of the proceedings of the board, J. should like the Minister to inform me of the manner in which the responsible Minister will become aware of what transpires at meetings of the board.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– The Minister receives a copy of the minutes of each meeting of the board.

Senator McKenna:

– As a matter of law, or practice?

Senator COOPER:

– Only practice. There is no provision in the bill making it mandatory for the board to supply copies of its minutes to the Minister.

Senator Spicer:

– Provision could be made by regulation.

Senator McKENNA:
Leader of the Opposition

– It will not enable the Minister for Commerce and Agriculture (Mr. McEwen) to have control of the board, if he is only advised of the decisions of the board after those decisions have been implemented. Has he no representative on the board whose duty it is to keep him informed? If the principle of ministerial control is to be operative, why should the Minister not be advised of the intentions of the board ? Should not such a provision be incorporated in the bill or regulations and not left as a matter of practice? Otherwise, on many occasions, it may be too late for the Minister to act when he finds out what has been done.

Senator Wright:

– Then there will be no direction from the Minister.

Senator McKENNA:

– Quite so. There is ample power under another clause for the Minister to give directions and the obligation is placed on the board to comply with those directions. Accepting the principle of ministerial control, how does the Minister become aware of what the board intends to do? The Minister for Repatriation (Senator Cooper) has replied that a copy of the minutes of the board meetings is sent to the Minister from time to time as a matter of practice. -That act represents an acknowledgement of the fact that the Minister should be informed of what is happening. But why does not the bill require that the board shall keep the Minister advised of its actions?

Senator Spicer:

– If the board did not :send the minutes to the Minister, he could direct it to send them to him under another clause.

Senator McKENNA:

– That point involves a consideration of a clause which is not now before the committee.

Senator Wright:

– Let the honorable senator leave it until that clause comes before the committee.

Senator McKENNA:

– I think that 1 had better do that. Part of clause 13, to which the Attorney-General (Senator Spicer) has referred, reads as follows: - (2.) The Minister may give directions to the Board concerning the performance of its functions and the exercise of its powers . . .

Senator Wright:

– One of which is delegation.

Senator McKENNA:

– That is true. That clause may provide an answer to my question. However, I am seeking information as to how the Minister becomes aware of what the board intends to do. If it is left to the Minister to take action under clause 13 (2.), would it not be better to impose an obligation on the board to keep the Minister advised? Then there would be no doubt about the position. If the answer to my question is that action may be taken under clause 13, then the Minister would have to initiate the move, and it seems to me that the board should be under an obligation to keep him informed at all times.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– I do noi think that the Leader of the Opposition (Senator McKenna) understands the position. I did not know that it was a principle of the Labour party that all aspect? of administration should be sealed up in watertight compartments. The board has been operating for fifteen years. The chairman of the board is appointed by the Government and he is in constant touch with the Minister for Commerce and Agriculture (Mr. McEwen), just as the head of my department is in constant touch with me. The policy of the board must be discussed with the Minister, who will be aware of the matters that the board will consider. Consequently, it is not necessary for the bill to provide that he shall be given that information. Just as the general manager of a company discusses the affairs of the company with the directors, so the chairman of this board discusses with the Minister for Commerce and Agriculture anything that it may be necessary to discuss with him. In order to make certain that the Minister shall have complete knowledge of the actions of the board, he has been supplied, from time to time, with a copy of the minutes of the meetings.

Clause agreed to.

Clause 11 agreed to.

Clause 12 (Overseas agents).

Senator McKENNA:
Leader of the Opposition · Tasmania

– I should like to know why, under this clause, power is reserved to the Minister to approve of agents appointed by the board. Why could the board not have full authority to appoint its overseas agents? Apparently under the clause, the prior approval of the Minister is required for the appointment of such agents. I recognize that the clause refers to agents who will be of some importance to the activities of the board. But would the Minister for Repatriation (Senator Cooper) say why such a careful reservation in favour of the Minister has been made in relation to this matter?

Senator COOPER:
Minister for Repatriation · Queensland · CP

– I understand that a clause similar to this one was part of the war-time legislation. If a dispute occurred between the board and its overseas agents, under this clause the Minister would be able to settle the dispute. It is not likely that the Minister will have to exercise that power but it has been thought advisable to retain it in case the need for its use arises.

Senator McKENNA:
Tasmania Leader of the Opposition

– I am not satisfied with the Minister’s explanation. I suggest that the clause does not relate to disputes between the board and its overseas agents. The clause reads -

The board may, subject to the approval of the Minister, enter into an agreement with a person or authority in a place outside Australia providing for that person or authority to act as the agent of the board in respect of such matters and for such remunerations as are provided in the agreement.

The clause is merely concerned with the appointment of agents. The board cannot appoint an overseas agent unless it first obtains the approval of the Minister to that appointment. Surely the clause is not intended to cover the case of a dispute between the board and agents that have already been appointed by the board.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– This clause is exactly the same as the corresponding provisions in the 1948 legislation. This power may not be required by the Minister, but it has been provided in case it becomes necessary to use it. The power referred to may not be required in order to deal with a. dispute. Some other matter may arise and, under this clause, the Minister will have power to settle it.

Clause agreed to.

Clause 13- (1.) The Board may, for the purposes of the export of wheat and wheat products from Australia, the interstate marketing of wheat and the marketing of wheat in the Territories of the Commonwealth, or for the purposes of, or purposes incidental to, an international agreement to which Australia is a party - (2.) The Minister may give directions to the.

Board concerning the performance of its functions and the exercise of its powers, and the Board shall comply with those directions.

Senator SEWARD:
Western Australia

– This is the clause to which, during the second-reading debate on the bill, I stated that I would move an amendment. I move -

That, after sub-clause (2.) the following new sub-clause be inserted: - “ (2a.) In the event of any Ministerial direction being given to the Australian Wheat Board for withholding or forcing sales, any financial loss thereby incurred to growers, as determined by the Board, shall be borne by the Treasury.”.

I said during the debate on the second reading of the bill that I was opposed to the provision that the Minister should have power to override the decisions of the board. I do not now propose to have that provision removed from the bill, but I propose to insert a clause providing that if the Minister gives an instruction to the board regarding the sale or withholding from sale of wheat, and that action results in a loss to the growers, that loss shall be borne by the Treasury and not by the growers. I understood the Minister for Repatriation (Senator Cooper) to say that the Minister for Commerce and Agriculture. (Mr. McEwen) had stated that if a loss was due to any such circumstances, the Government would bear that loss. If the

Minister for Commerce and Agriculture said that, it is in accordance “with the proposition that I have put forward.

Senator Cooper:

– The Minister did say that, but it is not the equivalent of the honorable senator’s motion.

Senator SEWARD:

– It was stated by the Minister for Repatriation that l’u was not, in general, the intention of the Minister for Commerce and Agriculture to intervene in th» selling of the wheat, although there would probably ‘be an exceptional occasion on which he would intervene. If that is so, I think that we should stipulate that if a loss is incurred as a result of the Minister’s intervention the grower should not have to bear that loss. The Treasury should accept the responsibility. The board is composed of responsible men. The chairman is appointed by the Minister for Commerce and Agriculture. The members of the hoard are not likely to reach irresponsible decisions which would invite the intervention of the Minister.

My proposal for the Treasury to accept financial responsibility for losses incurred on the sale of wheat raises the question of whether the Minister should be represented on the board. However, the Treasury would be called upon to reimburse the board for losses incurred only in the event of the stabilization, fund having insufficient money left in it to pay the grower the export parity price or the cost of production. If the price of wheat fell so far as to reduce the- fund to that level, I cannot see how a decision by the Minister would result in any financial loss to the grower.

It is my intention merely to protect the interests of the grower. I have complete confidence in the present Minister for Commerce and Agriculture. But at some time in the future another Minister for Commerce and Agriculture may not inspire the confidence that I have in the present Minister. I am opposed to ministerial intervention, no matter what government may be in office. That attitude has prompted me to move this amendment. I could not understand why the Australian Wheat Growers Federation has agreed to clause 13. I communicated with the federation at the week end and that communication probably resulted in the telegrams that the federation has sent to members of this Parliament. Apparently, the federation had not, up to that time, seen a copy of the bill because no request was received until I brought the matter to its notice. For those reasons I have submitted my amendment.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– The Minister for Commerce and Agriculture (Mr. McEwen) conferred with representatives of the Australian Wheat Growers Federation on the 12th April, 1953. The federation’s proposals were discussed, and the Minister made the following remarks on the power of direction: -

There is no ministerial interference in the selling operations of the board and I am willing to have that in legislation, but as there is a Treasury liability there must be a reserve power to assess that liability, and no Minister could go to Parliament with an act where he had to say that there was a liability attached which was outside the control of the Government.

At the Australian Agricultural Council’s meeting on the 15th and 16th June, 1953, the representatives of the Australian Wheat Growers Federation were informed of the council’s decisions on the details of the wheat stabilization plan. They included the following:-

Having regard to the great Treasury liabilities in respect of the guarantee and the position of wheat as an essential commodity the same kind of reserve ministerial responsibility in respect of the Australian Wheat Board as exists under the present plan should be maintained.

In March, 1951, at a meeting with representatives of the Australian Wheat Growers Federation, the Minister stated the Commonwealth’s attitude to sales of wheat by a ministerial direction. He said that if the Commonwealth wished to arrange a sale at concessional prices, it would make up the difference to the Wheat Board. That relates to the present position. The Commonwealth is making gifts of wheat to the Colombo plan countries, and is purchasing wheat from the Australian Wheat Board. It pays the full price to the board. That is what the clause refers to. I remind the committee that this bill has already passed the scrutiny of the House of Representatives. The matter to which Senator Seward’s amendment relates has been fully considered, and I regret that I am not in a position to accept the amendment.

Senator WRIGHT:

– This matter was referred to from time to time during the second-reading debate, and I found the theme most interesting. When the Minister for Repatriation (Senator Cooper) disclosed in his reply that sub-clause 2 had been expressly written into this bill in amplification of a provision which had given rise to a doubt as to whether it only conferred the power of veto on the producer, I was more than ever interested because I feared that the Minister had not expressed the full import of sub-clause 2. When the Minister quoted the Minister for Commerce and Agriculture (Mr. McEwen) as having stated that if the Minister took power to negotiate sales, the Treasury would make up to the board any difference between a concessional price and the current price, he was referring to transactions to which the Government was a party. Wheat that is disposed of under the Colombo plan is, no doubt, purchased by the Government from the Australian Wheat Board, and, if the Government chooses to give it to the Colombo plan countries, anybody’s sense of equity would require that the Government should pay the current prices for it. But that is not the problem that Senator Seward ha3 in mind in submitting his amendment. This provision does not say that the board may negotiate with the Commonwealth and make sales to the Commonwealth. If it said that, it would be quite right and proper that we should leave it in the expectation that, as a negotiating party, the Commonwealth would pay the , current price to the board. But this is a power of the utmost amplitude. Indeed, I cannot imagine anything that would give the measure a more overriding power in relation to all the functions and authorities of the board. A clause of this kind would have been an anachronism in board legislation fifteen years ago. A. similar problem arose when we were dealing with the Atomic Energy Commission Bill six months ago. Some of us engaged in earnest discussion with the Minister for Supply (Mr. Beale) on that occasion and I was convinced, because of the exceptional affinity between the. work of the Atomic Energy Commission and defence, and the degree to which the Government financed the Atomic Energy Commission, that it was proper; that the Government should have power, to direct the commission. But here we are not dealing with a defence authority’ or with a body financed by the Govern-: ment. We are dealing with a body that, is carefully constituted to provide balanced representation.; Clause 7 provides that the board shall consist of a chairman appointed by . the Minister, a’ person engaged in commerce, a finance member, a representative pf flour millers, a representative of employees, and repre. sentatives of the various wheat-growers’, organizations of the States. The purpose’ of that section is, most importantly, to provide a balance of ‘ experience and’ judgment on this board which is to have1 final judgment as to when and where’ to buy and sell wheat:’ The clause that Senator Seward seeks to amend simply provides, in effect, that ‘ the board shall have certain powers and functions, but that the Minister of the day may give directions to the board1’ concerning the’ performance of those functions and the exercise of those powers, and the boardshall comply with those’ directions. That is a complete subordination of the board to the Minister in relation not only to buying and selling, but ‘ also in relation to such matters as the delegation of power to an executive committee, provided for in clause 10. I conceive that, in the fullness of the expression of sub-clause 2, the Minister would have a right to say, “ You. shall delegate this, -but you shall not delegate that “, or “I do not like X but I do like Y”. Whilst the present Minister for Commerce and Agriculture and his representatives in this, chamber have our fullest confidence, and deserve the commendatory references that have been made to their skill, judgment, and painstaking management of this industry legislation, there is always the possibility of political, change, and, in possible successors to these worthy gentlemen, I might not the same confidence. I ask the Minister to reconsider this matter, particularly in the light of what he says the Minister for Commerce and Agriculture said about the producer organizations. Having said that, however, I should like to make it clear that I do not go the whole way with Senator Seward because he would leave the Government exposed in consequence of any direction given by the Minister. The Government would be liable to repay to the board such losses as the board determined. That is a very important factor. The determination of a loss sustained as a result of a direction would be difficult, and I should not be prepared to leave it for final decision by the board. The Minister seeks this power only because there is a possible Treasury liability under the bill. As I interjected during the second-reading debate, it is a liability in the nature of that of a guarantor. If a guarantor is called upon to meet his guarantee, he can take over the securities. I understand that Senator Seward challenges the view that the Government is in the position of a guarantor, but I point out that, under clause 27, sub-clause 4, the Treasury may be called upon to make good any deficiency in- the stabilization fund. To that extent^ I submit that the position of the Government is scarcely distinguishable from that of a guarantor. There is- an indemnity liability, and to the extent to which the Treasury is exposed to that liability, it is right that it should be able to say “ You must not hold on to that wheat and sell it in six months time at 6s. a bushel whereas by selling it now, according to our judgment you could get 10s. a bushel”. The suggestion I make is that the clause should be amended to read -

The Minister may give directions to the Board concerning the performance of its functions and exercise of its powers, and the Board shall comply with those directions, unless the Board renounces its right to have recourse to the Treasury contribution under Section 27 for that year.

Then, if the board sought to escape a ministerial direction, it would renounce its right to recourse under section 27. I offer that suggestion as a possible solution of the difficulty.

Senator McKENNA:
Leader of the Opposition · Tasmania

.- I think that the Minister put the position accurately when he stated that this power was a reserve power. I know that, under the old stabilization scheme, the Minister intervened very rarely. He did not interfere in matters day by day. The truth is that when the Government guarantees an export price for up to 100,000,000 bushels, a very large sum of money is involved. It could happen that the board, realizing that it had that guarantee, could be careless in making sales. Perhaps it might .not canvass adequately the markets of the world, or it might not appoint the right agents. That power is there to enable the Minister to keep an overall view of the situation. I agree with Senator Seward that, if, to quote an extreme case, the board is about to sell the wheat remaining in the pool to a certain country at 16s. a bushel, and the Minister intervenes and says “We shall sell it to another country at 14s. a bushel “, it is unanswerable that the Government and the Minister must accept responsibility to make good to the growers the difference between 16s. and 14s. Like Senator Wright, I do not agree that the assessment of the loss should be left to the board, which is an interested party in a dispute between it and the Minister. I think that the honorable senator might achieve his purpose if the words “ as determined by the board “ were deleted. The amendment would then read -

In the event of a ministerial direction being given to the Australian Wheat Board for withholding or forcing sales, any financial loss thereby incurred to growers shall be borne by the Treasury.

Then, in the event of a dispute arising, an obligation would be cast upon the Treasury or the Government, and the quantum of loss would be a matter for determination by a court. I think it would be quite wrong, in principle, to leave such a determination to the board.

I think, too, that it is fair to criticize the drafting of the amendment, which apparently follows the terms of a telegram received from a federation of wheat-growers in Western Australia. I suggest that the reference to the Treasury is not quite appropriate. The words “ shall be borne by the Government might be better. I do not like the expression “ a ministerial direction being given to the Australian Wheat Board for withholding or forcing sales “. I think happier terms than those could be selected.

I am in complete sympathy with the spirit of Senator Seward’s amendment, but as I say, I am against the proposal that one ofthe interested parties, namely, the board, should determine the quantum of loss. In strict law, I suppose that the Australian Wheat Board is the legal owner of the wheat.

Senator Seward:

– The board acts as a trustee.

Senator McKENNA:

– Yes, but it is the legal owner and its beneficiaries are the wheat-growers. In terms of exact drafting, I imagine that the words “ any loss thereby suffered by the Board “ might be an improvement. I should be prepared to lend my personal support to the amendment if the honorable senator felt disposed to defer it, for the time being, in order to let the Parliamentary Draftsman have a look at it. I suggest that an amendment which is drafted at short notice, such as this one has been, is liable to have imperfections in it. In its present form, I could not invite my colleagues in this chamber to support it. Perhaps it might be better for the committee to report progress and ask leave to sit again. I should be prepared to accord my support to the amendment, if it were re-drafted in proper form, and also to solicit the support of my colleagues. If the honorable senator agrees to defer consideration of the amendment, so that the Parliamentary Draftsman can have a look at it, an amendment may be evolved which will be satisfactory to everybody on the Opposition side.

Progress reported.

page 1163


Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator McLeay) read a first time.

Second Reading

Senator McLEAY:
Minister for Shipping and Transport · South Australia · LP

– I move-

That thebillbe now read asecond time.

Honorable senators are requested to consider a bill to effect certain amendments to the Customs Act relating to the making of customs entries, to the provision of suitable office accommodation for customs officers at licensed warehouses, and to the period of operation of customs warrants.

Section 37 provides that entries shall be made by the delivery of the entry by the owner to the Collector of Customs, and on delivery of the entry the goods specified therein shall be deemed to be entered. It may happen that after the making of an entry for home consumption in terms of section 37, but before payment of duty, there is an alteration in the Customs Tariff which has the effect of reducing the amount of duty payable on the goods covered by. that entry. In such cases it has been the practice for some importers to prepare a new entry and. to pay duty on the goods at the lower rate in force when the second entry was made. No action is taken by the owner in respect of the first entry. The Crown Law authorities have advised that the making of a second entry is contrary to the intention of the Customs Act, as under the terms of section 132 duty becomes payable at the rate in force when the goods are entered for home consumption, thatis, at the time when the first entry is lodged with the collector. The goods having already been entered for home consumption in terms of the Customs Act, the second entry is a nullity. The proposed amendment of section 37 provides that, where an entry for home consumption has been made in respect of goods, a person shall not purport to make a further entry for those goods unless the approval of the Collector of Customs for the withdrawal of the first entry has first been obtained. A penalty of up to £100 is provided for any contravention of the proposed provision.

Although section 92 of the Customs Act specifies certain requirements to be complied with by a licensee of a customs warehouse, it does not place any obligation upon him to provide suitable office accommodation for the use of the customs officer employed at the warehouse. Consequently, the conditions under which officers are compelled to carry out their duties are often most unsatisfactory. A departmental committee dealing with amenities has laid down a standard for office accommodation in customs warehouses, but the Department of Trade and Customs at present has no legal authority for enforcing compliance with such standard. The terms of .the proposed new sub-section will require the licensee of a customs warehouse to provide reasonable office accommodation for the use of the -customs officer employed therein. The new provision will be similar to that which is contained in section 19, under which responsibility is placed on a wharf owner to provide suitable office accommodation for the customs officer employed at the wharf.

The period of operation of a customs warrant, schedule IV., relating to the searching of premises, is limited, under the terms of section 199, to three months. The duties of a number of customs officers require them to be in continuous possession of these warrants for periods far in excess of three months, and it is necessary, under the present limitation, for fresh warrants to be issued to the officers after each period of three months. The proposed amendments will facilitate administration by extending the period of operation of customs warrants from three months to six months. The bill is commended to the favorable attention of honorable senators.

Debate (on ‘ motion by Senator McKenna) adjourned.

page 1164


Bill received from the House of Representatives.-

Standing Orders suspended.

Bill (on motion by Senator McLeay) read a first, time.

page 1164


The PRESIDENT (Senator the Hon. A. M. McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Senate do now adjourn.

Question resolved in the negative.

page 1164


Second Reading

Senator McLEAY:
Minister for Shipping and Transport · South Australia · LP

fMO.30].- I move

That the bill be now read a second time.

This bill is to authorize the payment of a bounty of 6d. per lb. on continuous filament acetate rayon yarn produced in Australia. This yarn is used in the weaving and knitting of piece goods, ribbons and apparel, either alone or in admixture with other fibres. Continuous filament acetate rayon yarn is produced in Australia by Courtaulds (Australia) Limited, at Tomago, New South Wales, by a very modern and efficient process.

The decision to assist the industry by bounty follows a recommendation of the Tariff Board in a report published recently. The Tariff Board found that material costs are of greater significance than labour costs, and that the cost of cellulose acetate flake is the most important. The industry is at a total disadvantage, in respect of raw materials, amounting to about 5$d. per lb. of finished yarn. Cellulose acetate flake is produced in Australia by C.S.R. Chemicals Proprietary Limited. This material forms the subject of a separate report in which the Tariff Board recommended that, on economic grounds, no assistance should be given to its production in Australia. The Government has adopted this recommendation also. The local industry is also at considerable disadvantage against its United Kingdom competitors in respect of labour costs. The question of assistance in the production of continuous filament acetate rayon yarn has been considered on the basis of Courtaulds (Australia) Limited being able to obtain supplies of cellulose acetate at the cost at which it could be imported duty-free from the United Kingdom. Taking all factors into account, the Tariff Board found that assistance of 6d. per lb. would be required to enable the industry to continue production on a reasonably profitable level.

It would be normal to assist the industry by means of protective import tariff duties. In this case, the imposition of a protective rate of duty on imports of acetate yarn would tend to swing demand from acetate to viscose yarns, with which they are competitive in many applications. Such a result would be detrimental rather than helpful to the industry. In turn, the duty on the yarns would need to be compensated by duties on fabrics and made-up articles, including such fabrics and articles of mixed fibres, to maintain the existing competitive position of Australian weavers and processors. There is no justification for imposing duties on the whole range of these goods to protect the manufacture of part of Australia’s requirements of rayon yarn. It has been estimated that the maximum local production of continuous filament acetate rayon yarn represents less than 10 per cent of requirements of rayon in all forms. Bounty assistance can be rendered to the industry without disturbing the market relationship between the different yarns, and it would not have the undesirable effect of increasing the costs of the basic product entering into the manufacture of other goods - additional costs which would grow as the yarn passed along the chain of manufacture and distribution until the final product reached consumers in the form of clothing and other goods.

In these circumstances, the Government has decided that assistance should be given to the industry by the provision of a bounty of 6d. per lb. on production of continuous filament acetate yarn for a period of three years commencing on. the 1st November, 1954. Before this period expires, arrangements will be made to have the industry examined again by the Tariff Board. The bill provides for bounty payments to be reduced when profits exceed 10 per cent, on capital used in the production and sale of the rayon yarn. The maximum amount of bounty payable in any bounty year is fixed at £100,000. The Government considers that the provision of the assistance envisaged by this bill will enable the industry to pass through its formative stages with least disturbance to other sections of industry and the economy generally. I commend the bill to honorable senators for favorable consideration.

Debate (on motion by Senator McKenna) adjourned.

page 1165


Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator McLeay) read a first time.


SenatorMcLEAY (South AustraliaMinister for Shipping and Transport) [10.35].- I move -

That the bill be now read a second time.

The purpose of this bill is to authorize the payment of bounty on scutched flax fibre produced from flax grown in Australia. The fibre is usedby the Australian spinning industry to produce yarns suitable for the manufacture, primarily, of flax canvas and sewing threads. The bounty is to operate from the 1st November, 1954. This is the date on which the Flax Commission, established under the Flax Industry Act 1953, took over the direction and control of Commonwealth flax undertakings, which produce the major part of Australia’s requirements. The bounty will, of course, be payable on the same basis to the only other producer, the Blackwood Flax Cooperative Company Limited, of Boyup Brook, Western Australia.

It will be recalled that the Flax Industry Act received the Royal assent on the 15th April, 1953. Before it could be brought into operation, however, a sharp fall occurred in the overseas price for flax fibre. Users of Australian flax fibre were thus placed in a difficult position in regard to meeting competition from overseas. It was found necessary, therefore, to reduce the price paid by spinners of Australian flax fibre to the level at which comparable grades of fibre could be imported. Fending examination of the industry by the Tariff Board, . establishment of the Flax Commission was deferred. The Tariff Board, in its report on the flax industry, which was tabled in Parliament last month, recommended that a bounty should be paid on flax fibre produced during the next two years. There was, in the hoard’s opinion, scope for some improvement in costs of production of the local industry by the introduction of modern plant and machinery. The board considered that the position should be examined in two years’ time when the economies expected to result can be measured and the need for assistance to the industry re-assessed.

The Tariff Board considered that, if these economies are effected, the industry has sound opportunities for success.In order to ensure sufficient production of Sax to supply the requirements of the Australian spinning and weaving industries, some assistance is necessary. Assistance by subsidy is granted in most overseas countries enjoying a good standard of living.

The Blackwood Flax Co-operative Company Limited, a grower-owned organization operating in Western Australia, is at some disadvantage with the Flax Production Commission as all the spinning mills, which use the flax fibre, are situated in the eastern States. The board has recommended that flax fibre produced by the co-operative be purchased by the commission at a price which will take into account the pooling of freight from Western Australia and its spread over the cost of the whole of the flax fibre produced and sold in the Commonwealth. The Government will ensure that equitable treatment is afforded to the Western Australian section of the industry. Bounty is more appropriate than import duties as a method of assistance to this industry, particularly while it is re-organizing. In addition, import duties on flax fibre would require corresponding increases in the duties on finished products and would be unsuitable and ineffective because of the frequent wide fluctuations in world prices of fibre.

The Tariff Board has recommended, and the Government has adopted’ the recommendation, that a bounty of £35 a ton of flax fibrewould be appropriate at a parity price level of about £330 c.i.f.e. a ton for standard grade B fibre. This rate is to be adjusted according to fluctuations in that price’ level. I need not stress the importance from a defence point of view of ensuring an adequate supply of flax fibre and of maintaining the facilities to enable it to be processed. The Government considers that the provisions of this bill will materially assist the economic and efficient production of Australia’s requirements of flax fibre.

It is proposed to refer the question of assistance to this industry to the Tariff Board again for further inquiry at the appropriate time. I commend the bill for favorable consideration.

Debate (on motion by Senator McKenna) adjourned.

page 1166


The followingpapers were presented: -

Apple and Fear Organization Act - Eighth Annual Report of the Australian Apple and Pear Board, for year. 1053-54.

Audit Act - Pinance - Supplementary Report of the Auditor-General upon other accounts for the year 1953-54.

Public Service Act - Appointments - Department -

Civil Aviation - K. J. Darby.

Supply- R. K. Battersby, P. A.

Bridgewater, D. Fairbairn, J. R. Disher, G. G. Germer, B. A. Halliday, J. W. Johnson, H. F. McKenzie, W. Matley, E. H. Percy, M. S. Rutter, A. H. Segnit, J. L. Smith, A. L. Warren, W. N. T. Welsh.

Sugar Agreement Act - Twenty-third Annual Report of the Fruit Industry Sugar Concession Committee, for year ended 31st August, 1954.

Senate adjourned at 10.40 p.m.

Cite as: Australia, Senate, Debates, 2 November 1954, viewed 22 October 2017, <>.