Senate
20 September 1955

21st Parliament · 1st Session



The President (Senator the Hon. A. M. McMullin) took the chair at 3 p.m., and read prayers.

page 181

QUESTION

ALUMINIUM

Senator GUY:
TASMANIA

– On the 24th August, I asked the Minister representing the Minister for Supply the following questions : -

  1. Has the Minister given any consideration to the advisability of installing rolling mills to operate in connexion with the Australian Aluminium Commission’s works at Bell Bay?
  2. Is it a fact that if rolling mills are not established at Bell Bay, the main plant for the production of ingot aluminium, costing over £10,000,000, will provide a comparatively small return for such a large investment, as ingots command a much lower price than aluminium sheets?
  3. Would the establishment of rolling mills on the site of the main plant greatly increase the revenue from the industry and provide a sound investment?
Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– The Minister for Supply has furnished the following reply to the honorable senator’s questions: -

For many years Australian industry has been able to meet local requirements of rolled aluminium sheets; these have been produced from imported ingots and billets. The Australian Aluminium Production Commission was established to provide a secure local source of supply of aluminium metal in primary form. The commission’s plant at Bell Bay was constructed to produce aluminium at the rate of 13,000 tons yearly.

However, in common with other industrialized countries, Australia’s demand for aluminium has risen steeply over the last few years, and it is apparent that the output of primary metal will have to he increased if Australian industry’s needs are tobe satisfied from domestic sources.

Australian industry’s capacity to produce rolled sheets from ingot and billets is being rapidly expanded; whereas to-day the capacity is in the region of 6,000 tons per annum, it will exceed 14,000 tons per annum during 1956. This is, of course, in addition to the capacity for producing extrusions, pressings, drawn tubes and other products of pure or alloyed aluminium.

Senator ARMSTRONG:
NEW SOUTH WALES

– In view of the Minister’s statement in reply to Senator Guy, that it is already recognized that the production of ingot aluminium at Bell Bay will not be sufficient for Australia’s requirements, will he, even at this late stage, give consideration to at least duplicating the plant, so that in the near future a reasonable amount of aluminium, in relation to our needs, will be produced there?

Senator COOPER:

– I shall be pleased to bring the suggestion made by the honorable senator to the notice of my colleague, the Minister for Supply.

page 181

DISTINGUISHED VISITOR

The PRESIDENT (Senator the Hon. A. M. McMullin). - I have to advise the Senate that the Right Honorable the Earl of Home, Secretary of State for Commonwealth Relations in the United Kingdom Government, is in the precincts of the Senate. With the concurrence of honorable senators, I propose to invite Lord Home to take a seat on the floor of the Senate.

Honorable Senators. - Hear, hear !

The Earl of Home thereupon entered the chamber, and was seated accordingly.

page 181

QUESTION

AUSTRALIAN BRANDY

Senator HENTY:
TASMANIA

– My question is directed to the Minister for Trade and Customs. In view of the Government’s recent reduction of excise on Australian brandy to stimulate local consumption, will the Minister approach the management of Trans-Australia Airlines to seek its co-operation in the Government’s policy, by offering Australian brandy for sale in the bars of its aircraft in place of the imported French cognac which is being sold at present at 3s. 3d. a nip size bottle ?

Senator O’SULLIVAN:
Minister for Trade and Customs · QUEENSLAND · LP

– I do not underestimate the importance of the honorable senator’s question, and I shall discuss the matter with my colleague, the Minister for Civil Aviation.

page 181

QUESTION

HOUSING

Senator KENNELLY:
VICTORIA

– I ask the Minister representing the Minister for the Interior whether he will lay upon the table of the Senate the file dealing with the sale to the Government of Victoria, for temporary housing purposes, of the buildings that comprised the Indonesian army camp which was situated in Albert Park reserve, Melbourne? If not, will he permit me to peruse the file?

Senator SPICER:
VICTORIA · LP

– I shall make inquiries from the Minister for the Interior to ascertain whether he can make the file available.

page 182

QUESTION

PETROL

Senator PALTRIDGE:
WESTERN AUSTRALIA

– My question to the Minister for National Development arises from a statement that he released on the 18 th September referring to the consumption of Australian-refined petrol, and the export of such petrol. To what country or countries was the 10,000,000 gallons of motor spirit, which was refined in Australia, exported during the first half of the financial year ? Oan the Minister indicate the ultimate quantity of petrol that will be exported to those countries Australia is already supplying, and what steps are being taken to find new markets for Australian-refined motor spirit?

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

– For fear that I may lead the honorable senator astray in my reply, I ask him to put that question on the notice-paper. I believe that a substantial proportion of the petrol we export goes to New Zealand, but I should like to check that statement, and give the honorable senator a considered reply later.

page 182

QUESTION

IMPORTS OF STEEL

Senator ARMSTRONG:

– The question which I now direct to the Minister for National Development is not based on facts; it is am explanatory question. I have beard that. Australian steel, which had been exported from this country, has been re-imported for use here, and I have also heard that some of it has been used by the Snowy Mountains Hydro-electric Authority. Will the Minister investigate this matter and inform the Senate whether there is any truth in the rumour ?

Senator SPOONER:
LP

– I shall certainly make inquiries about the matter, and inform the honorable senator of the result of those inquiries. Does he suggest, that the exported steel is fabricated overseas and then sent back to Australia?

Senator Armstrong:

– I have no details at all about the matter.

Senator SPOONER:

– I believe that it is extremely improbable that we should import steel that we have already exported.

Senator Sandford:

– Nothing is improbable while this Government is in power.

Senator SPOONER:

– It is unlikely that such an efficient organization as the Snowy Mountains Hydro-electric Authority would be led astray.

page 182

QUESTION

ATOMIC ENERGY

Senator ANDERSON:
NEW SOUTH WALES

– I ask the Minister representing the Minister for Supply whether it is a fact that tenders from construction companies are being considered in respect of the erection of the Australian Atomic Energy Commission’s research laboratories and nuclear reactor buildings at Lucas Heights near Sydney. Is it a fact that these tenders have been made on a basis of cost plus fixed fee? Will the Minister give an assurance that before any tender is selected, the possibility of obtaining firm tenders will be fully explored?

Senator COOPER:
CP

– I am not able, ai the moment, to give the honorable senator a complete answer to his question, but I shall bring it to the notice of my colleague, the Minister for Supply, and let him have a considered statement al an early date.

page 182

QUESTION

REGISTRATION OF MEDICAL PRACTITIONERS

Senator FRASER:
WESTERN AUSTRALIA

– Some time ago. I directed a question to the Minister for Trade and Customs, in connexion with the Commonwealth registration of medical practitioners. At that time, I asked the Minister whether the Government would consider bringing such a proposition before a conference of Commonwealth and State Ministers, and I outlined to him the idea that I had in mind I now ask him whether the Government has given consideration to that matter and whether it has been placed before a conference of Commonwealth and State Ministers.

Senator O’SULLIVAN:
LP

– I think it was eighteen months or two years ago that the honorable senator asked me that question. So far as my recollection goes, I mentioned the matter to the Minister for Health, but I am not in possession o. any recent information. I shall again take up the matter with the Minister for Health, and if I am able to elicit any information, I shall pass it on to the honorable senator. No doubt he appreciates that this is hardly a matter in respect of which the Commonwealth itself can take the initiative. The final say must rest with the State authorities with whom medical practitioners are registered in the various States. Although I know very little about the matter, nevertheless I see a lot of merit in Senator Fraser’s proposition, and I shall again take it up with my colleague, the Minister for Health.

page 183

QUESTION

REPATRIATION APPEALS

Senator COOPER:
CP

– On the 7th September, Senator Sandford asked the following question : - fs tin: Minister for Repatriation aware of the very serious delay in the hearing of repatriation appeals? If so, what steps, if any, have been taken to avoid those delays? Does the Minister know that the onus of proof, which is supposed to rest on the department, does in practice rest very heavily on the appellant? Can the Minister say’ how many appeals were heard in the State of Victoria in the twelve mouths ended the 30th June this year, how many of those .”.ppca! . were granted and how many rejected?

I now inform him that there is no serious delay in the hearing of appeals to entitlement appeal tribunals, and the three entitlement appeal tribunals at present operating are able to cope with the number of appeals at present being lodged. There has, however, been some delay in the hearing of appeals to war pensions assessment appeal tribunals, and although five assessment appeal tribunals are at present in operation, I have arranged for the appointment of a further tribunal in order to overcome the delay in the hearing of this class of appeal. I do not consider that the onus of proof which, under section 47 of the Repatriation Act rests upon certain persons or authorities, does in practice rest very heavily upon the appellant. In Victoria, during the year from the 1st July, 1954, to the 30th June, 1955, assessment appeal tribunals heard and decided 1,668 appeals and, of this number, 943 were allowed and 725 disallowed. For the same period, entitlement appeal tribunals heard 1,730 appeals and allowed 295 and disallowed 1,435.

page 183

QUESTION

SHIPPING- FREIGHTS

Senator WRIGHT:
TASMANIA

– My question, which I address to the Minister representing the Minister for Commerce and Agriculture, refers to recent negotiations that have taken place with regard to overseas shipping freights. I have been pleased to notice that the Minister for Commerce and Agriculture (Mr. McEwen) participated in those talks, to ensure that any increase in freights would not exceed the actual cost justification that could be shown hy the shipping interests. Can the Minister say when a decision is likely to be announced on this matter, particularly in view of its importance to current trade ?

Senator SPICER:
Attorney-General · VICTORIA · LP

– Offhand, I cannot give the honorable senator the information he asks, but I will endeavour to obtain it from the Minister for Commerce and Agriculture.

page 183

QUESTION

WAR SERVICE HOMES

Senator HENDRICKSON:
VICTORIA

– I direct a question to the Minister representing the Minister administering War Service Homes. Some time ago, I asked a similar question relating to the payment for war service homes which had been accepted by the department, and I asked that such payment be expedited. The position now is that builders of dwellings are prepared to sell them to returned soldiers after approval for purchase has been given by the department, but the builders are forced to wait for as long as twelve months before payment is made. The tradesmen build houses as a speculation and cannot afford to wait so long. I ask the Minister again whether he will confer with his colleague to expedite such payments. A builder must recover the money he has spent on a new building so that he may proceed to the next. Consequently, this matter is of considerable importance to him.

Senator SPOONER:
LP

– I take it that the honorable senator is not’ referring to progress payments while a new building is in course of erection, but to an advance to an ex-serviceman who wishes to purchase a dwelling already built.

Senator Hendrickson:

– That is so.

Senator SPOONER:

– The budget provides for an appropriation of funds for war service homes, which my colleague the Minister for the Interior distributes, in accordance with priorities, to those eligible for it. There is a waiting period before all who desire war service homes assistance can have their requirements fulfilled.

page 184

QUESTION

TELEPHONE SERVICES

Senator SHEEHAN:
VICTORIA

– -I ask the Minister representing the Postmaster-General whether it is the intention of the PostmasterGeneral’s Department, by introducing the duplex telephone system, to depart from the long-established practice of allowing subscribers to the telephone service to have an individual connexion? If this is so, can the Minister say why the department is taking this action ?

Senator COOPER:
CP

– I cannot say exactly what is the policy of the PostmasterGeneral’s Department in connexion with this matter. I know that there is a lag in the provision of telephones, and the duplex system is being used so that applicants for service may have the benefit of one. I will bring the honorable senator’s question to the notice of the Postmaster-General and obtain a reply as early as possible.

page 184

QUESTION

WAR SERVICE HOMES

Senator HENDRICKSON:

– I think the Minister for National Development in his reply to my previous question misunderstood what I really wanted to know. I quite understand there are justifiable delays because of the number of houses that are wanted, but the case I am interested in is that of an ex-serviceman who has been fortunate enough to obtain a home completed by a speculative builder and the department has agreed to make the finance available. If the department is not prepared to pay within a month, or six weeks, the builder must sell to some one who will buy the home outright so that he can go on building further houses. In these special cases of new homes built by speculative builders -would it be possible to have the payments made within one month or six weeks if the department has agreed to accept the liability?

Senator SPOONER:
LP

– If an exserviceman is eligible for an advance and has received approval for the advance from the War Service Homes Division the only delay experienced would be that taken to have the legalities attended to. I shall certainly bring the matter to the notice of my colleague.

page 184

QUESTION

ATOMSFORPEACE CONFERENCE

Senator LAUGHT:
SOUTH AUSTRALIA

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

  1. Is it the intention of the Government to make available to honorable senators a precis or resume of the principal papers delivered at the recent Atoms-for-Peace Conference in Geneva? If so, what is the earliest date upon which these will be available for study by honorable senators?
  2. Will the leader consider making a statement on behalf of the Government at an early date of thu particular implications of this conference for Australia? In particular will he deal with the reported statement of Sir John Cockcroft, head of Britain’s atomic research programme, to the effect that nuclear power could bring industry and population to remote and waterless parts of Australia?
  3. If such a statement is made by the leader, will opportunity be provided for debate on the important question of development of our north?
Senator O’SULLIVAN:
through Senator Spicer · LP

– I now have the following information in reply to the honorable senator’s questions : -

  1. A decision on this matter must await the receipt and examination by the Government of the papers referred to. These are numerous and voluminous and are not expected for some time.
  2. A statement was made by the Minister for Supply during the recent budget debate in the House of Representatives, which dealt with several aspects of the conference and included references to the use of nuclear power in Australia.
  3. The question of a debate on the above matters will be considered when further information is available.

page 184

QUESTION

UNIVERSITY OF WESTERN AUSTRALIA

Senator TANGNEY:
through Senator Harris

asked the Minister representing the Prime Minister, upon notice -

  1. Is it a fact that, despite great financial difficulties, the Western Australian Government is proceeding with the establishment of a medical school at the University of Western Australia?
  2. As the Commonwealth Government has created a precedent by giving a capital grant for buildings to the University of Sydney, will the Prime Minister reconsider his previous decision that all expenditure on universities should be paid from the Commonwealth grants to universities,, and make a specific grant towards the building of a medical school in Wsetern Australia?
Senator SPICER:
LP

– The Prime Minister has supplied the following answers : -

  1. T understand that steps arc being taken to provide facilities for undergraduate training in medicine in the University of Western Australia.
  2. The Commonwealth in recent years has not made any capital grant for buildings to the University of Sydney. Representations have been made to me from a number of States suggesting special grants from the Commonwealth for particular university projects, hut I have consistently taken the view that it is not appropriate for the Commonwealth to provide financial assistance for university development in any other way than that provided for since 1950 by agreement with the States, under the States Grants (Universities) Act. The act does not provide for capital grants but each State may make funds available to its own universities for capital purposes from its portion of loan funds raised in Australia for the purposes of States’ works programmes. The development of State universities is essentially a matter for the States and I believe this position should be maintained.

page 185

QUESTION

BROADCASTING

Senator MARRIOTT:
TASMANIA · LP

asked the Minister representing the Postmaster-General, upon notice -

When is it proposed to permit and encourage the introduction of frequency modulation broadcasting in Australia, and will both the Australian Broadcasting Commission and commercial stations be permitted to change to this improved system of broadcasting?-

Senator COOPER:
CP

– I have received the following reply from the PostmasterGeneral : -

The first step in this matter is to repeal the existing provision of the Broadcasting Act which prohibits the use of frequency modulation by commercial broadcasting stations. This will be done as soon as practicable. The introduction of this form of broadcasting into the Commonwealth involves some difficult problems which cannot be considered till this provision is repealed.

page 185

QUESTION

TELEVISION

Senator MARRIOTT:
TASMANIA · LP

asked the Minister representing the Postmaster-General, upon notice -

  1. In view of the fact that several mainland States in .the comparatively early future will be provided with television stations, would it be possible for the Postmaster-General’s Department, in conjunction with the Australias Broadcasting Commission, to provide displays of television in the other States?
  2. If so, could the Tasmanian demonstration be given at the Royal Hobart regatta in February, 1956, which event is the largest attended public gathering held during the year?
Senator COOPER:
CP

– I have received the following information from the PostmasterGeneral : -

The Postmaster-General’s Department does not possess any television equipment which would enable displays to be arranged in the various States, and the apparatus held by the Australian Broadcasting Commission is required for training purposes in connexion with the proposed national television service in Sydney and Melbourne. In the circumstances it is regretted that arrangements cannot be made for a television display at the next Hobart regatta.

page 185

QUESTION

TELEVISION FILMS

Senator ASHLEY:
NEW SOUTH WALES

asked the Minister for Trade and Customs, upon notice -

  1. Has the Government decided to refuse import licences to firms, other than those holding transmission licences, for the importation of television films?
  2. Will any such prohibition apply to advertisers owning their own films from abroad I
  3. Will it apply to Australian film producers importing pilot programmes as the basis for Australian productions?
  4. What is the amount of currency, both in dollars and sterling, to be allocated per annum to (a) the Australian Broadcasting Commission, and (6) each commercial television station ?
  5. Has the department been informed as to the number of hours of film entertainment such allocations will bring into this country?
  6. In the event of Sydney and Melbourne Stations exchanging films, will their currency allocations remain the same?
  7. Will the allocations be reviewed in the light of whether the companies use such film to the exclusion of the Australian-made product?
  8. Will the allocation be exclusive of any use of imported film at present in this country, for which payments will have to be remitted through film distribution houses?
Senator O’SULLIVAN:
“through Senator Spicer · LP

– I now furnish the following answers to the honorable senator’s questions : -

  1. It is proposed that initially the allocation of oversea exchange for the importation of television films will be restricted to holders of television transmission licences.
  2. The holder of a television transmission licence will, with approval of exchange control, be free to transfer any part of his exchange allocation to any Australian distributor of television films or any Australian sponsor of a television programme.
  3. The foregoing arrangements do not apply to material imported for “ know-how “ purposes by an Australian producer of television programmes. Ordinary import licensing procedure will apply to such imports.
  4. It has been decided that, in respect of the period up to the 31st March, 1956, each of the four holders of commercial transmission licences will be given an exchange allocation of £30,000, of which not more than two-thirds may be spent and/or committed in the dollar area. For the same period, the exchange allocation for the Australian Broadcasting Commission, which initially will be operating transmission stations in both Sydney and Melbourne, will be £60,000, of which not more than two-thirds may be spent and/or committed in the dollar area.
  5. The views of the interested parties as to the extent to which the transmission stations will have to use imported films for their programme requirements were taken into account in determining the allocations referred to in No. 4 above.
  6. Yes. In fact, the allocations referred to inNo. 4 above were determined on the understanding that each Sydney holder of a commercial transmission licence will enter into arrangements with a Melbourne holder for the exchange of films.
  7. The present arrangement applies only in respect of the period up to the 31st March, 1956. A decision as to arrangements after then will be taken in the light of all relevant facts.
  8. No.

page 186

QUESTION

BUILDING MATERIALS

Senator GUY:

asked the Minister for

Trade and Customs, upon notice -

  1. From what countries was prefabricated building material imported during the years 1943 to 1945, and from 1950 to the present time?
  2. What were the quantities and value of such imports for each of those years?
Senator O’SULLIVAN:
through Senator Spicer · LP

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

During the years 1943 to 1945, statistics of importations of prefabricated houses were recorded under the general heading “ Manufactures of wood “ and “ Manufactures of metal ‘. It is not possible, therefore, to supply the information sought in respect of that period. Values shown below in respect of prefabricated houses and buildings include the value of parts of such houses and buildings. However, the quantities referred to in the undermentioned tables refer only to complete houses or buildings. From 1st July, 1953, quantities were not recorded.

page 187

QUESTION

PUBLIC SERVICE

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

asked the Minister representing the Prime Minister, upon notice -

What was the number of public servants employed by the Commonwealth in each of the years 1948 to 1955?

Senator O’SULLIVAN:
through Senator Spicer · LP

– I have obtained the following information in reply to the honorable senator’s question: - ,

Thu number of public servants employed by the Commonwealth under the jurisdiction of the Public Service Board in each of the years 1948 to 1955 is set out in the following table: -

page 187

QUESTION

GIFT DUTY

Senator WRIGHT:

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

  1. Has the Minister acting for the Treasurer given any consideration to adjusting the minimum amount of gifts for gift duty to the present level of values?
  2. Will the Minister make a statement to the Senate on the matter?
Senator SPOONER:
LP

– The Minister acting for the Treasurer has supplied the following information in reply to the honorable senator’s questions: -

At the inception of the gift duty in 1941, duty was payable in respect of gifts exceeding £500 in value. It is now payable only in respect of gifts exceeding £2,000 in value. Proposals for a further increase in the amount of the exemption were among the numerous requests for taxation concessions which were considered by the Government in the budget review. As announced in the budget speech, the Government found itself unable to allow any taxation concessions at the present time, having regard to the state of the economy and thu inflationary tendencies which have become evident. The question of increasing the exemption has, however, been noted for consideration when the law is next under review.

page 187

QUESTION

COMMONWEALTH WORKS

Senator GUY:

asked the Minister representing the Minister for Works, upon notice -

What is the percentage of works completed by the Department of Works, compared with works let by private contract and supervised by the Department of Works, for the years 1950-51 to 1954-55?

Senator SPICER:
LP

– The Minister for Works has supplied the following answer to the honorable senator’s question: -

I am unable to give accurate figures at short notice for the first three years of the period mentioned, but can give an assessment in respect of the years 1953-54 and 1954-55, which is as follows: - 1953- 54. - Capital works carried out by contract, £15,500,000, equals 62.6 per cent.; by day labour, £9,300,000, equals 37.4 per cent. 1954- 55. - Capital works carried out by contract, £14,900,000, equals 64.5 per cent.; capital works by day labour, £8,200,000, equals 35.5 per cent.

It can be stated that during the preceding three years there was a steady movement from day labour towards contract, and this continues, as is evidenced by the figures just given, throughout the years 1953-54 and 1954-55.

page 188

QUESTION

SUPERPHOSPHATE

Senator SEWARD:
WESTERN AUSTRALIA

asked the Minister for Trade and Customs, upon notice -

What amount was paid in bounty, under the Sulphuric Acid Bounty Act 1954, to each superphosphate manufacturer during the year ended the 30th June, 1955?

Senator O’SULLIVAN:
LP

– I now furnish the following answer to the honorable senator’s question: -

page 188

REPATRIATION BILL 1955

Motion (by Senator Cooper) agreed to-

That leave be given to bring in a bill for an act to amend the Repatriation Act 1920-1954.

Bill presented, and read a first time.

Standing Orders suspended.

Second Reading

Senator COOPER:
Minister for Repatriation · Queensland · CP

– I move -

That the bill be now read a second time.

This bill has for its prime purpose the amendment of the Repatriation Act to give effect to the increases in war pensions included in this year’s budget, and with those increases I feel sure all honorable senators will be in entire agreement. In addition, the bill also makes certain desirable amendments to the Repatriation Act.

Since 1949, this Government has kept under constant review the rates of all pensions payable under the Repatriation Act, and in each budget that it has presented, some increases have been granted. As a result, the annual expenditure on repatriation pensions has risen from over £19,000,000 in 1949 to an estimated £47,500,000 for the year 1955-56. The proposed increases, which will benefit all the main classes of pensioners, are -

  1. The special rate under the Second Schedule - the rate payable toa member for total and permanent incapacity - is being increased by 10s. a week, to £9 15s. a week;
  2. The general rate pension is being increased by 5s. a week, to make the new rate £4 15s. a week;
  3. The attendant’s allowance payable under the second and fifth schedules is being increased by 20s. a week. The present rates of £1 15s. a week and £3 10s. a week will, therefore, be increased to £2 15s. and £4 10s. a week respectively;
  4. The war widows’ pension is being increased by 10s. a week to £4 10s. a week.

Service pensioners, also, will receive an increase of 10s. a week, which is equivalent to the increase that is being granted in the rate of an age and invalid pension under the Social Services Act. In addition to the above increases, all war pensioners, including war widows, stand to benefit considerably by the repeal of section 91a of the Repatriation Act, as the result of which the ceiling limits have been removed. Later, I shall deal in some detail with the extent of that benefit; for the present, I shall confine my remarks to the increases in the various rates.

In 1949, when the previous Government left office, the special rate pension - the rate for totally and permanently incapacitated ex-servicemen - stood at £5 6s. a week. It had been increased by only 10s. a week since 1943. The new rate for a member will be £9 15s. a week - an increase of £4 9s. a week since this Government assumed office in 1949. If honorable senators will compare that increase with the rise in theC series index cost-of-living figures over the same period, they will find that the pension rate has risen by 84 per cent. since 1949, whilst the cost-of-living figures have risen since the September quarter, 1949, by only 67 per cent. The new amounts payable for total and permanent incapacity, therefore, will be £9 15s. for an unmarried man, and £11 10s. 6d. for a man and his wife, whilst for a family consisting of a father, mother and two children aged, say, twelve years and fourteen years, the family’s income from war pension, education . allowance and child endowment will be £14 19s. 6d. a week.

The proposed new rate for the general rate pension of a member is £4 15s. a week, which is an increase of £2 a week over the rate payable in 1949. Again, if percentages are compared, it will be found that the general rate pensioner has received over that period an increase of 73 per cent. as against the rise in the C series index figures of 67 per cent. The increase of £2 a week granted by this Government since 1949 compares more than favorably with the increase of only 5s. a week between 1943 and 1949, when the previous Government was in office. As a result of this present increase of 5s. a week, a member and wife receiving pension at the full general rate - the 100 per cent. rate - will have a total war pension between them of £6 10s. 6d. a week. If they have two children under sixteen years of age, they will receive in respect of them, by way of war pension and child endowment, a further £2 2s. 6d. a week, making the family pension income up to £8 13s. a week, which is free of means test and income tax.

If we turn now to the war widows, wo find that the proposed rate of £4 10s. a week represents an increase of £1 10s. a week on the amount payable in 1949. or an increase of 50 per cent. However, this increase does not present the whole picture. The domestic allowance must be taken into account. In addition to pension, a domestic allowance is payable to a war widow who -

  1. has a child who is under the age of sixteen years, or is over that age but is undergoing education or training;

Since it came into office in 1949, this Government has granted substantial increases in the rate of domestic allowance, as a result of which the present rate is £1 14s. 6d. a week. This rate, compared with the rate of 7s. 6d. in force in 1949, represents an increase of £1 7s. a week and is equivalent to an increase of 360 per cent.

The total increase, therefore, of war widows’ pension plus domestic allowance since 1949, including the increase of 10s. a week in pensions proposed in this bill, will amount to £2 17s. a week, which represents an increase of 84 per cent. over that period. The total of pension and domestic allowancewill now be £6 4s. 6d. a week. As at the 30th June. 1955, there were 28,292 war widows receiving pension, and of these 25,950, that is, 92 per cent., receive domestic allowance as well. It will thus be seen that 92 per cent. of the war widows will actually be receiving the 84 per cent. increase I have mentioned. A war widow with two children aged thirteen and eleven years will now receive a total of £9 16s. from pension, education allowance and child endowment, and as each child reaches fourteen and sixteen years of age a higher rate of education allowance becomes payable.

An attendant’s allowance is payable under the second and fifth schedules to the act in certain cases where, because of the nature of their war disability, members require daily attention for some of their bodily needs. These rates vary according to the nature and degree of the incapacity. There are two rates payable. £1 15s. a week and £3 10s. a week, and each rate is to be increased by 20s. a week, making the new amounts £2 15s. and £4 10s. a week respectively.

A member entitled to a service pension will receive the same increase in service pension as is being granted to an age or invalid pensioner under the Social Services Act, namely 10s. a week. As the total amount which a service pensioner is able to have by way of income, plus pension, is being raised from £7 to £’7 10s. a week, all will benefit by the rise. It will now be possible for a married couple, both of whom are entitled to a service, age or invalid pension, to receive from all sources an amount of up to £15 a week between them before there is any reduction of their service pensions.

I turn now to a very significant provision in the bill. Section 91a of the Repatriation Act is being repealed, and the effect of this repeal will be to grant a widespread benefit to war pensioners, particularly those who are getting on in life and have no source of income other than their pensions. Prior to 1948, a war pension was taken into account as income for the purpose of the means test when assessing a service pension. In 1948, the government of the day decided that where a person was qualified to receive both a war pension and a service or social service .pension, the Commonwealth liability for the two pensions should be limited to something less than the total pension he would otherwise receive under the means test, and section 91a was inserted in the act. That further limit was commonly known as a “ ceiling “.

The following example will show just how that ceiling limit applied. An unmarried war pensioner whose sole income was his 100 per cent, general rate war pension of £4 10s. a week could receive a service, age or invalid pension of only £1 2s. 6d. in addition, because the ceiling rate for a single man was fixed by section 91a at £5 12s. 6d. a week. On the other hand, a person with an income of £4 10s. from sources other than war pension was able to receive a service, age or invalid pension of £2 10s. a week to bring him up to the means test limit of income plus pension of £7 a week. The rates quoted in this example are those operating prior to this amending bill. The Government has decided that such a ceiling operates unfairly against the war pensioner, and has, therefore, decided to repeal section 91a.

The effect of this repeal is that an unmarried war pensioner receiving pension at the general rate under the first schedule will now, subject to the means test, be able to receive, in addition, a service pension up to the full amount of £4 a week, provided the amount of both pensions does not exceed a total of £7 10s. a week. For example, such a member receiving the full general rate, often referred to as the 100 per cent, rate, would receive war pension £4 15s. and service pension £2 15s., a total of £7 10s. a week. If he is receiving war pension at 50 per cent, of the general rate, that is, £2 7s. 6d. a week, he will receive the full amount of service pension of £4 a week, making his total weekly pension £6 7s. 6d. a week. In the case of a married couple who are war pensioners and are both eligible for service, age or invalid pension, they may be able to receive between them an amount up to £15 a week.

For example, a married couple in receipt of the full general rate war pension, £4 15s. for the member and £1 15s. 6d. for his wife, would both, subject to the means test, be eligible to receive the full amount of a service, age or invalid pension of £4 a week each and so, between them, would have a total pension income of £14 10s. 6d. a week. If they had two children aged, say, twelve and fourteen years, they could receive in respect of them additional amounts by way of pension and child endowment which could bring the family income up to £17 7s. a week.

In the case of a married member whose pension is assessed at 75 per cent, of the general rate, and who has two children aged twelve and fourteen years, the following amounts could be paid: -

A totally and permanently incapacitated member and his wife have been debarred by the ceiling limit from receiving a service, age or invalid pension in addition to their war pension. As a result of this bill, they will now, subject to the means test, be able to receive a service or social services pension. This means that, either from Commonwealth sources alone or from those sources, plus some income of their own - for example, superannuation - they will now have a guaranteed income of at least £15 a week. Towards this amount, the Commonwealth will contribute at least £11 10s. 6d., the amount of their combined war pensions, subject to the means test, which takes their war pensions into account as income, they may also receive up to £3 9s. Gd. service, age or invalid pension between them, to make up the combined income of £15 a week, the limit of income, plus, pension under the means test.

In the case of a man and wife with one child aged twelve years, they could now, subject to the means test, be able to receive between them war pension of £11 10s. 6d. a week and service, age or invalid pension of £3 9s. 6d. a week, and in respect of the child, additional amounts for pension, education allowance and child endowment, making a total family income of £17 ls. 9d. a week.

The removal of the ceiling limits will bc of particular assistance, not only to the old diggers of World War I., whose average is now about 64 years - at 60 years of age they qualify for a service pension - but also to all the more seriously disabled ex-servicemen. I should like to emphasize the fact that in applying the means test, the pension, education allowance and child endowment paid to or in respect of a child is not taken into account as income of the parent. This bill also provides that, in future, the amount of an attendant’s allowance payable under the second or the fifth schedule to the act will not be regarded as income for the purpose of the means test.

I turn now to consider the improved position of a war widow. A war widow receiving a. widow’s pension and domestic allowance of £6 4s. 6d. a week in all, may. subject to the means test, be able to receive by way of age or invalid pension a further £1 5s. 6d. a week, making her total income, all from pension, up to £7 10s. a week. Any pensions or allowances payable in respect of her children will be additional to that amount. A widow over the age of sixty years may receive war widow’s pension £4 10s., domestic allowance £1 14s. 6d., and age pension up to £1 5s. 6d., making a total of £7 10s. In other words, she will have a guaranteed income from all sources of £7 10s. a week.

As an example of a war widow’s family income, we can take the case of a war widow with two children aged eleven and thirteen years. In addition to her own war pension and domestic allowance of £6 4s. Gd., she will receive, iii respect of the children, the’ following amounts: - War pension for both, £2 5s. a week, education allowance for the elder child, Ils. 6d. a week, and child endowment for both, 15s. a week. This will give a total family income of £9 16s. a week, and in addition, the widow and the children receive certain free medical attention. If a widow had three children aged fourteen, fifteen and seventeen years, with the eldest child at the university, the total family income would be £13 7s. a week. Schooling and university expenses would be paid by the department.

The bill also amends the provisions of the act relating to the eligibility for pension of dependants of female members who served in World War II. or the Korea or Malaya operations, and removes two restrictions which now apply. The provisions that the mother must be receiving a pension of at least 50 per cent, of the general rate before the child could receive a pension is being repealed, as is the one which limited eligibility to a child born of a marriage that took place before or during the mother’s service in the forces. In future, where the mother is the breadwinner of the family, a pension will be paid to a child irrespective of the rate of pension payable to its mother, or the date of the marriage of which the child is the issue.

The other provisions contained in the bill do not affect eligibility for pension or the rates of pension payable. They make certain necessary or desirable amendments to the machinery provisions of the act, which it will be more appropriate to explain at a later stage.

Honorable senators will be pleased to know that the disabled members and widows’ training scheme, which commenced to operate in January, 1953, is fulfilling expectations. This scheme has two objectives: first, the training of ex-service men and women, who become substantially handicapped through warcaused incapacity, to enable them to be satisfactorily re-established in civil life, if training is necessary for their reestablishment; and, secondly, the training of war widows who desire training to enable them to follow a suitable remunerative occupation. A comprehensive review of the scheme was made at the end of the first two years of its operation, and the results achieved are ample to justify its continuation. The success of the scheme has been due to a co-operative effort, and the Government offers its thanks to the various technical schools and other training establishments, and, in particular, to the employers’ and employees’ organizations whose combined efforts have meant so much, not only in the training, but particularly in placing in employment disabled exservicemen. I commend the bill to the Senate.

Debate (on motion by Senator Critchley) adjourned.

page 192

SEAMEN’S WAR PENSIONS AND ALLOWANCES BILL 1955

Motion (by Senator Spicer) - agreed to -

That leave be given to bring in a bill for an act to amend the Seamen’s War Pensions and Allowances Act 1940-1954.

Bill presented, and read a first time.

Standing Orders suspended.

Second Reading

Senator SPICER:
AttorneyGeneral and Minister for Shipping and Transport · Victoria · LP

– I move-

That the bill be now read a second time.

The Seamen’s War Pensions and Allowances Act, which first came into operation in 1940, has since been amended on six occasions. The main purpose of the amendments on the last three occasions, namely in 1952, 1953 and 1954, was to provide increases in pensions of Australian mariners and widows of Australian mariners equivalent to increases granted to ex-members of the forces and war widows under amendments of the Repatriation Act in the years mentioned.

It is the practice to maintain pensions, payable to Australian mariners and their dependants under the Seamen’s War Pensions and Allowances Act, at the same level as those payable to corresponding classes of pensioners under the Repatriation Act. The latter act is being amended to implement the Government’s decision to increase pensions of incapacitated exmembers of the forces and war widows, and in the bill now before the Senate provision has been made for the amendment of the Seamen’s War Pensions and Allowances Act to provide similar increases.

The rate of a pension payable to an Australian mariner incapacitated by war injury is assessed on the basis of percentage of incapacity. Existing general pension rates for totally incapacitated mariners range from £9 to £10 16s. a fortnight, and the Government has decided on an all-round increase of 10s. a fortnight. This will increase the fortnightly rates to amounts ranging from £9 10s. to £11 6s.

The general pension rates of widows of Australian mariners will be increased by £1 a fortnight. The existing scale of rates varies from £8 to £9 16s. a fortnight and these rates will be increased to range from £9 to £10 16s. a fortnight.

In a case where a mariner is partially incapacitated, and is in receipt of a reduced pension determined on the basis of the percentage of his incapacity, the pension increase will be such percentage of the amount of 10s. a fortnight as corresponds to the percentage of his incapacity. Where an Australian mariner is incapacitated by reason of a disability described in the second schedule to the act, and the Repatriation Commission is of the opinion that he is in need of an attendant, he is granted a fortnightly allowance for an attendant. The allowances at present payable are £3 10s. a fortnight in the case where the incapacity results from a disability other than the loss of two arms, and £7 a fortnight where the incapacity results from the latter disability. Provision is made in the bill for the allowances mentioned to be increased by £2 a fortnight, namely, to £5 10s. and £9 a fortnight respectively.

The Government has decided also to amend the Seamen’s War Pensions and Allowances Act to permit of the grant to certain wives, widows and children of Australian mariners, of pensions for which they are at present ineligible owing to the restricted definitions of the words “child”, “wife” and “widow”. At present, a wife or widow who married an Australian mariner after the date on which the war injury was sustained is ineligible for a pension, as also are children born after that date. Provision is made in the bill for the amendment of the definitions of “ child “, “ dependant “, “ wife “. and “ widow and these amendments will bring the provisions of the Seamen’s “War Pensions and Allowances Act governing eligibility for pensions to wives, widows and children of Australian mariners into line with the corresponding provisions of the Repatriation Act. The amendments will give a right to pensions to the wife and children of an Australian mariner incapacitated by war injury and to the widow and children of an Australian mariner whose death resulted from a war injury irrespective of the date on which the marriage took place.

The increased rates will be payable from the first pension pay day occurring after the bill receives the royal assent. The amendments proposed will, I am sure, commend themselves to all honorable senators, and I look, forward to their assisting in the speedy passage of the bill.

Debate (on motion by Senator Critchley) adjourned.

page 193

LOAM (EMERGENCY WHEAT STORAGE) BILL 1955

SECOND Reading.

Debate resumed from the 7th September (vide page 26), on motion by Senator Spooner -

That the bill be now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

.- The bill now before the Senate has a single and simple purpose. The Opposition has no objection to the general purpose, which is to convert from a short term to a long term basis finance made available to the Australian Wheat Board to provide emergency wheat storage accommodation. We deplore the necessity for the building of this further accommodation, but it is due to factors mentioned by the Minister (Senator Spooner) when introducing the bill. He intimated that, simultaneously in the northern and southern hemispheres last year, there were bumper wheat harvests, and many countries, formerly unable to supply their own requirements were now able to meet them. Many other countries, formerly importing wheat were now, from their viewpoint, in the happy position of being able to export it.

Honorable senators are only too familiar with the fact that there have been vast accumulations of wheat in Canada and the United States of America. Consequently, the world position makes a difficult selling market for Australian wheat. In addition to a carry-over of approximately 90,000,000 bushels from the previous year’s crop, it was estimated that at the end of last season about the same quantity would be carried over, and unless some emergency provision were made, 45,000,000 bushels of wheat would not be adequately protected and housed. That situation contained the elements of a great loss, not only to the individual wheat-growers involved, but also to the Australian nation. The Opposition agrees that arrangements had to be made to meet this emergency, and the Australian Wheat Board was asked to provide that accommodation, which it did in conjunction with State authorities. The Australian Government properly guaranteed finance through the Commonwealth Bank, on the understanding that it would not be left long on a short-term basis. The Australian Loan Council was asked to consider the need, and it faced the necessity of finding £3,500,000 for Commonwealth purposes.

It is obvious that in this year - the first in a long period - the Australian Government will have a share in loan raisings. That may well predicate some reduction in the amount of money made available to the States. It may even be that the Commonwealth will have to find further money from revenue to make up whatever deficiency is caused. However, I find something to rejoice at in noting some faint stirrings of conscience on the part of the Government, and that at last it is moving in to take some of the burden off the taxpayers. Instead of providing all capital works out of revenue, it proposes to appropriate some loan money for what may be properly termed capital purposes.

I hope that this action is an indication of a complete change of heart on the part of the Government. It is one that I welcome, small though it is, having regard to the order of the capital works to be undertaken by the Australian Government this year. Pursuing a theme that I have advocated in this Senate on many occasions, I should like to see the Australian Government move further into the field by providing for its own capital works out of loan money, and not leave the burden of providing the whole of the capital expenditure upon the taxpayers in an individual year. Under a scheme which would make loan money available for the purpose,- the burden would be spread over the taxpayers during a. period of 53 years, as contemplated .by the Financial Agreement.

Senator Mattner:

– Would not works then cost two and a half times as much? For every £1 borrowed, the Commonwealth has to pay out £2 10s. in interest and debt extinction over a period of 53 years.

Senator McKENNA:

– It, obviously, involves additional interest payments. It is a case of paying cash as against paying on time payment, and that inevitably involves the payment of interest. It also inevitably involves over the whole period higher costs, and I would not attempt to deny that proposition. But as the benefit will be spread, in normal circumstances over a long period - twenty years is contemplated pursuant to this bill - one cannot argue against the proposition that it is fair that all of the taxpayers who will derive a benefit during those years from the expenditure and the works should bear their proper share of the burden. In those circumstances the burden would fall very lightly upon the taxpayers in any particular year. On that phase of my few remarks on this bill I content myself by saying that I welcome the approach of the Government in this particular matter, small though it is in the total scheme of things.

The . bill obviously contemplates that the moneys that are so raised under the authority of this bill will be made available to the Australian Wheat Board and it is intended that with the moneys the board will pay off the short-term accommodation made available through the Commonwealth Bank and will apply the balance of the proceeds to completing whatever must be done to finalize the construction of the emergency accommodation. The Treasurer is authorized under clause 7 of the bill to make the money available on such terms and conditions as he may determine. In other vords, the Parliament is giving to him a completely blank cheque so far as writing the terms and conditions is concerned. I am disappointed that in the course of his second-reading speech the Minister gave no indication as to what terms and conditions the Treasurer might impose. I do not for one moment believe that this bill has been brought before the Senate without discussions having taken place between the Treasury and the Australian Wheat Board. I have no doubt that the terms and conditions which are contemplated have already been determined. However, I should like to be informed by the Minister in due course whether I am right in putting that proposition. It would be very loose business if the whole of this authority to raise money were simply put to the Parliament without conclusions having been reached between the Government and the Australian Wheat Board. It is conceivable that the Treasurer might impose terms and conditions so onerous, and possibly so unfair, that the Australian Wheat Board would decline to take advantage of the offer to lend the money. I am sure the Treasurer would not put this bill before the Parliament unless he had made up his mind about the terms and conditions. Obviously, he contemplates repayments by the Australian Wheat Board. It is not a case of an amount being lent without interest and allowed to remain static over a very long period because clause 8 of the bill has specific reference to the National Debt Sinking Fund Act. Imported from that act an obligation is placed under this bill upon the Treasurer to .pay to the National Debt Sinking Fund such moneys as are received in repayment from the Australian Wheat Board. So, there are to be repayments; that much is established.

Although, it is not indicated in the bill, it was indicated in the speech of the Minister that these emergency stores might endure for a period of only twenty years and, by inference, one gathers that the repayments are to be spread over that period. They will include interest payments year by year and also some payment off the .principal; and I should imagine that that would be determined in equal amounts year by year. If that is the case, it poses the problem that there is an emergency in relation to surplus wheat at the moment. .One may well expect that that state of affairs will not endure but that there will be a change, that we will get rid of our surplus and that the emergency accommodation will lie idle, maybe for years, and maybe for the bulk of the twenty-year term.

One point which the Minister did not touch upon, but which, I think, he should make plain when he is replying to this debate, is what pools are to bear the cost. It is conceivable that somebody will come into the wheat industry in fifteen years time and will be obliged, no doubt, to make some contribution towards this storage. The Minister should make plain to the Senate in the course of the discussion on this bill whether the position is that year by year those who happen to be in the different pools will bear their proportion of the cost. I can see an argument in favour of that; but it is so obviously a matter which needs to be cleared up and stated that I express surprise that that was not done on the introduction of the measure.

Senator Spooner:

– How could it be done?

Senator McKENNA:

– I can see that it would be an undue burden upon the growers of the present pools if they had to bear the whole of the capital cost and I can foresee that the provision of emergency storage accommodation, even though it may not be immediately wanted, is a safeguard for the whole of the industry down the years. I recognize that; but it is reasonable, I think, that it should be stated quite clearly that that is to be the position. It has not been stated in the Parliament up to date so far as I have been able to gather.

Senator Spooner:

– It has to be depreciated over twenty years. .

Senator McKENNA:

– If by depreciation the Minister means it is to be amortized over that period, depreciation could merely be writing off in the books of the board. Paying it off over a period of twenty years is another matter ; but it still leaves open the question as to who is to bear the burden of the principal and interest repayments. I want that to be clearly stated and understood. I also ask the Minister to indicate what other terms and conditions the Treasurer proposes to impose? Are those terms and conditions already reduced to writing? If they are, will he make them available to the Senate so that we may consider whether they are reasonable and fair so that above all those engaged in the industry may be able to assess them? It would be quite wrong if this bill were to pass through this chamber without those points being made crystal clear to those engaged in the industry.

That poses another question that intrigues me. It seems to me to be a very short life for expenditure of this nature, that the temporary accommodation should be expected to last for only twenty years. I frankly do not know the nature of the structures that have been erected, but it seems- to me that something more substantial is called for than a structure that would endure for only twenty years. One must expect that the production of the industry in the normal course of events, with our growing population and with the growing population of the world, will not be less but more down the decades; and that what is regarded as emergency storage accommodation to-day might be regarded as normal accommodation in a decade or so. Why has the building been embarked upon of a type of structure that is expected to endure for not more than twenty years? I am not criticizing the type of structure ; I am merely asking for information. I do not even know whether the stores are built of wood, iron, steel or brick, and I should like the Minister to give some information to the Senate about, the type of structure.

One other aspect of the bill comes to mind, from a consideration of the secondreading speech of the Minister. The

Minister indicated that the States, which normally provide and control wheat storage accommodation, would ‘have an opportunity or an option to buy the stores. I have no complaint about that, but I say again that the Minister might indicate to us just what are the terms of that option. Is it given in writing? Is it a firm arrangement, or is the Minister merely making a statement of the intention of the Australian Government? Have the States been granted an option, and, if so, what are the terms of it? At what figure will the States be entitled to buy? Will it be a figure that takes account of proper physical depreciation of the structures, or will the States buy for the amount that remains owing after the sinking fund and interest payments have been made? It could be either of those figures. If it turns out that the buildings will endure for, perhaps, 40 years, the Commonwealth might make a very bad deal, from a business point of view, if it sells on a basis of twenty years amortization. The Government should, when putting this matter before the Parliament, say something about the durability of the structures, and it should give details of this option that is to be granted to the States.

The Government has already guaranteed - I suppose that is the correct term - to the Commonwealth Bank the money required to make the initial payment of 10s. a bushel, and, accordingly, the Government has what might be called a contingent liability approaching £50,000,000 arising out of the latest wheat crop.

Senator Hannaford:

– It is 10s. 4d. a bushel.

Senator McKENNA:

– I am using the round figure of 10s. in order to arrive at a broad total of £50,000,000. The Commonwealth is committed to a guarantee of that amount, and apparently, it will be really difficult to sell the surplus wheat that Ave have on our hands at present. With that commitment, the Government has a real interest in disposing of the wheat, because I imagine that the Commonwealth Bank would not want to carry the finance involved for too long. In all these dealing arrangements affecting agricultural produce the bank makes the advance on the guarantee of the Government, but in the expectation that the temporary overdraft will be cleared very rapidly as the produce is disposed of. We may find that a further problem will arise very soon, when the bank asks for that temporary overdraft to be repaid. That possibility gives this Government a very vital financial interest in this wheat crop, and its finances for the current year could be seriously disrupted if it had to find an additional £50,000,000 to discharge its guarantee to the Commonwealth Bank. I shall repeat a suggestion that I made in the Senate not long ago. Consideration should be given to the sale of wheat on long-term payment if necessary. The Australian Government could, no doubt, ask for and receive the guarantee of the government of the country to which the wheat is sold. I merely make the suggestion that that avenue is well worth while exploring. The adoption of such a plan would mean that the wheat would be moved, storage charges in this country would be saved, and the wheat would be sent to areas where it may be badly needed. It would also make room for next season’s crop, and remove a great deal of anxiety particularly in view of the fact that the Government has this commitment of approximately £50,000,000.

As the Opposition is not opposing this measure, I do not propose to debate the matter further. I have, deliberately, confined myself to the direct purpose of the bill, and to the matters that are within the ambit of its clauses. There are colleagues of mine, I think, who are interested in the wheat position generally, and I propose to leave any such considerations to them, as they are no doubt better qualified than I to deal with those aspects. At this stage I say no more than that the bill is necessary to relieve the immediate position, but that it does leave unanswered a lot of questions that the Government should answer before the debate concludes. The Minister could, of course, give us those answers when he makes his reply. If he is not in a position to give us the answers then, no doubt he will be able to do so during consideration of the bill in committee.

Senator SEWARD:
Western Australia

.- The Leader of the Opposition (Senator McKenna) said at the beginning of his speech that there was one principle involved, in the bill. That is a point on which I differ from the honorable senator. There are two principles in the bill. One is the making of provision for long repayment as against short repayment. The other, and by far the more important, principle is whether the Australian Government or the wheatgrowers should bear the cost of this additional storage. When it became apparent last year that additional storage was needed to cope with the surplus wheat, we in Western Australia had storage capacity for 125 per cent, of the normal harvest, which in ordinary circumstances was sufficient for our requirements. In addition, the wheat-growers in Western Australia were perfectly willing to pay for additional storage for last year’s surplus of wheat, provided that that storage could be included in the permanent wheat-handling installations in that State. Unfortunately, the Western Australian Government would not grant land adjacent to the existing terminals. The result was that a site had to be obtained twenty miles from the storage bin. That, of course, involved double handling, and in those circumstances, and in view of the fact that the Australian Government was going to find money, not only for surplus accommodation, but to bring some States up to the position of handling, I think, 100 per cent, of the normal harvest, we in Western Australia considered that we were entitled to a share of the money that was being made available. Unfortunately, we did not get our full share. We received about £500,000, but the work in Western Australia cost more than £700,000, so that the wheatgrower had to make a direct payment last year of £200,000 to provide this additional storage.

I do not know whether honorable senators know the history of wheat handling in Western Australia, but I will give hem some information on the matter. My remarks in this connexion have reference to Senator McKenna’s question about the permanence or otherwise of these structure which are to be erected. In 1935, the wheat-growers in Western

Australia decided to install a bulkhandling system for wheat. They erected eight or ten bins in the country, and they had constructed a large number of steel trucks to demonstrate to the railway authorities the rapidity and facility with which wheat could be moved under a bulk-handling system. Unfortunately, the railway authorities in those days - and I do not know that they are very much better disposed towards the proposition now - would not do anything about procuring such trucks. However, the trials were such a success that the wheatgrowers went ahead and constructed their bins in the country, but, in order to use the railway trucks that were in use, they had to obtain linings to prevent the wheat from leaking through the wooden floors of the trucks. They also had to obtain extensions so that the trucks could carry their full load of wheat. Otherwise, ten-ton trucks would have had only 8 tons in them. They had to pay the freight on the materials required and all these expenses have made the system more costly to the wheat-growers. It proved an undoubted success, and last year there was a storage capacity equal to 125 per cent, of a normal harvest.

When this scheme was put into operation, £500,000 was spent on new storage at Midland Junction. Tor the benefit of the Leader of the Opposition (Senator McKenna), in particular, I wish to inform the Senate that it is a particularly strong structure, far stronger than those usually provided in country districts. All bulk-handling stores in country districts are of galvanized iron and can be built up in sections. If an area goes out of production of wheat, sections of the bulk store can be removed. This new structure, to which I have referred, is particularly substantial. It has concrete foundations to a height of 10 or 12 feet, and after that it is all steel and aluminium with an aluminium roof. The present bulk-handling installations in the country districts have been in use for twenty years. On that basis, I should say that this store will last for 50 years, at least, and will be much above requirements in Western Australia when the wheat that is stored is sold.

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

– To whose design was it built?

Senator SEWARD:

– It was built by the Australian Wheat Board, which engaged the contractors for the Geelong bulk-handling facilities. This was an urgent job. A decision to build it was reached only at the middle of last year. Construction was rushed, but even then wheat was being received into the bin before it was finished.

Again the wheat-growers of Western Australia were penalized. The objective was to get the store built in time to receive last season’s wheat. In the circumstances, we were fortunate to obtain the services of the contractor who built the Geelong bin. He had to get steel and aluminium for the job, and it was available to him in Italy because he had already obtained some material from Italy for the Geelong bin, and the specifications and other details were known in Italy. Material was also available in Great Britain, but they did not have the specifications there, and much of the material had to be prefabricated. There was no hope of getting it from Great Britain in those circumstances in the time available, and be had to get it from Italy. The result was that customs duty had to be paid on it, and that probably accounted for the extra cost which the wheatgrowers had to pay. The wheat-growers of Western Australia have had to meet the cost of the double handling and the duty.

This year, accommodation has to be found for another surplus, estimated at 10,000,000 bushels if the harvest is normal, but unless there is a calamity within the next two months, the harvest will be above normal. Therefore, extra accommodation will have to be found for more than 10,000,000 bushels surplus, and the wheat-growers will have to pay for it.

That brings me to a short review of the position of the wheat industry. I have been pressing the Minister for Commerce and Agriculture (Mr. McEwen) for a determination whether we should go on producing wheat and accumulating ever-increasing surpluses. I asked a man who has a considerable knowledge of the wheat industry when we might expect to get rid of our surplus in view of the world storage of wheat. He considered that we would be lucky to get rid of it in the next ten years. In the circumstances, we have to consider whether we shall continue to produce wheat and store it and involve the growers in extra charges so that eventually they will be faced with a loss instead of a profit.

Senator Sheehan:

– Who told the honorable senator that it would be ten years before we could catch up with the surplus?

Senator SEWARD:

– An authority on wheat to whom I spoke several weeks ago. I shall give figures which might indicate that that is a possibility. I have been endeavouring to influence the Minister for Commerce and Agriculture to get the interested parties together and determine a policy on wheat production for the future. Honorable senators will remember that about two years ago Sir John Teasdale recommended to the wheat-growers that there should be a temporary reduction of wheat’ production. No man in Australia, and possibly in the world, is better qualified than is Sir John Teasdale to give advice on wheat marketing and the prospects ahead. Unfortunately, the Prime Minister (Mr. Menzies) repudiated Sir John Teasdale’s statement promptly, and said that that was not the policy of the Government. If it is not the policy of the Government to reduce production of wheat, it is the Government’s responsibility to provide storage for the surplus that accumulates. We now have provision in Western Australia for the storage of 160 per cent, of a normal harvest. That is storage for almost two years. When the surpluses are removed, even if it is ten years hence, that storage will be left on the wheat-growers’ hands.

Senator Gorton:

– There is nothing to stop anybody from ceasing to produce wheat.

Senator SEWARD:

– There will be chaos if the honorable senator’s suggestion is acted on. The store at Midland Junction is on railway property. It will not be wanted later because it is 20 miles from the wheat terminal. Storage is required at a terminal. When an attempt is made to sell this hulk storage, few people will he interested because it is built on railway property and it is enormous. It can be seen for miles before one reaches Perth. Not many persons will want it.

Senator Benn:

– It is built of galvanized iron?

Semi tor SEWARD.- It is built of concrete and iron and aluminium. It will stand for 50 or more years. As I have said, Sir John Teasdale advised wheatgrowers to reduce production, and his advice was repudiated by the Australian Government. Are we going to continue to produce wheat and store it? What is the position now? A friend of mine who has just returned from Great Britain wrote to me from ‘Surrey on the 20th lune last. I propose to read some extracts from his letter -

Friday I had a luncheon with the Minister for Agriculture and his Chief Parliamentary Secretary ( Mr. Nugent M.P. ) when for lj hours we discussed the falling off of purchase of Australian wheat by the U.K. and as a result of that discussion a luncheon was arranged for rue with the Grain Section of the Baltic Exchange. The names of those who attended the luncheon are in my case in London but they represented the President of the Corn Trade of the U.K. and several members of the Exchange who were mostly chairmen of the various sections of the trade and buyers’ representatives, including the largest millers in the U.K. Prior to the dinner I had met representatives of Berry Barclay & Co., Australian Outturns and with them representatives of whea t buyers. As with Mr. Heathcoat Amery T was careful to advise these people I had no standing as a spokesman for anyone. I was a wheatgrower, a member of the Handling organisation and an M.P. representing wheatgrowers. Mine was a private fact finding mission, of one who was concerned that the U.K. was not purchasing our wheat as formerly; as one who was concerned at the growing resentment of Australian wheatgrowers towards the U.K. Government and to find out for myself, if a change from the F.A.Q. to grade selling would be of advantage to Australia, and lastly, were we in Australia growing the type of wheat acceptable to the English trade. All were most helpful and friendly … I did not minimise the resentment and growing hostility towards the U.K. who, during a fiveyear period, had availed herself of the favourable prices under the I.W.A. which had made it possible for purchases to bc made of i:p to more than 5s. below world parity prices. I was reminded by all at my various’ interviews that whereas during the period of the I.W.A. the U.K. had been the purchasers of all overseas wheat, now the business was entirely in the hands of merchants who had no obligations to anyone except their shareholders to give dividends and to the customers to sell Hour and grain at the lowest possible price. They advised Government to Government policies did not in any way interest them. They bought in the cheapest market and the Australian wheat was no longer an attractive proposition . . . They preferred our Australian wheat to the U.K. and France but we cannot compete. I understand U.K. millers use 50-UO per cent, hard wheat from America and for the balance Australia is in competition with England and France and to a lesser extent Turkey and Argentine. But at present millers are purchasing from U.K. farmers at £22 10s. ton ( 1 2s. 3d. bush. ) and approximately same from .France. Australian C.I.F. price is £20 17s. (id. ton (15s. bush.). They admit the U.K. wheat is 17-18 per cent, moisture and mi rs on delivery 12-13 per cent, but English wheat is immediate delivery, French 2 weeks and under the conditions of Australian sales, 3-4 months.

Australian wheat is bought in England mostly for the making of biscuits and some kind of Scotch bread, and also the soda bread trade in Scotland and Ireland and for the manufacture of self-raising flour. That wheat has to meet the competition of wheat from England and France. About an hour ago I received a telegram from my friend. It states -

Since my June letter English millers reduced price of United Kingdom wheat to twenty pounds ton sterling stop Australian wheat purchased at same figure would return growers nine shillings bushel Australia Fremantle . . . Ackland

What are we going to do about it ? Shall we continue to grow wheat? The indications are that we shall have more than a normal harvest this year. In that event, we shall have more wheat to put in the stacks, which means more wheat to be eaten by weevils. Surely it is time that we adopted a reasonable policy. It is not as though we are asking a man to discontinue the growing of merino wool, to produce fat lambs, because that would mean a complete change of his whole flock. The process would probably take five years; and if he then desired to resume the production of merino wool, that would take another five years. We could, however, go out of wheat production for two years, if necessary. We have two years’ supply of wheat on hand. At the end of the two years’ period, we could again resume wheat production, and even increase the quantity of wheat previously produced. It would mean only a change of activity, and the production of some other crop instead of wheat.

A few days ago Senator Kennelly said that one factor which contributed to the high cost of producing wheat was the fact that the price of wheat land had risen from £20 to £50 an acre in some districts. In my opinion, a man who sets out to grow wheat on land which costs £50 an acre should have a look at himself. Land that costs £50 an acre should be put to better use than the growing of wheat. It would pay better to grow oats or barley on such land or, better still, use it as pasture, and put stock on ‘it. Some years ago a man I knew well came to me in trouble. In fact, he overtook me after driving about 20 miles. When he caught up with me, he said that he was concerned, because he was about to be put off his farm. He went on to say that those who had been financing him had said that they could not advance him any more money. He asked me if I could help him, and I arranged for something to be done. “With that assistance he discontinued growing wheat, and improved his pastures. To-day, he is one of the leading sheep producers in Western Australia, and is independent of financiers. There are plenty of places where there could be a change from the growing of wheat to other activities. I do not know why the Government does not do something in that direction.

There is another important fact. The International Wheat Agreement was entered into by four countries which exported wheat - Canada, the United States of America, Argentina and Australia. To-day, there are six big wheat exporting countries, because France and Turkey are now exporting wheat. Indeed, the wheat exports from France are only about 14,000,000 bushels a year below the quantity of wheat exported by Australia. An important fact is that France is right in the heart of things, and can put its wheat on the market at short notice. That gives France a great advantage in the competition for United Kingdom trade. I have here some figures to show how we have lost trade with the United Kingdom, although we have maintained our trade with Middle East and Far East countries, and with Ceylon. However, the fact remains that Great Britain is taking considerably less wheat from us than was the case some years ago. The figures that I shall now cite have been obtained from notes published fortnightly in Western Australia. Taking the five years from 1934-35 to 1938-39 as the pre-war base, the world’s flour exports averaged 2,368,000 tons a season, of which Australia’s share was 24.8 per cent. In 1953-54, the world’s flour exports totalled 2,700,000 tons, which was 350,000 tons greater than the prewar production, but Australia’s share was only 19.8 per cent. Although Australia had held its flour trade with the Near East, the Middle East and the Far East, it had lost a large part of its trade with Britain. Since 1950-51, Britain has been only Australia’s second-best customer for flour, its purchases being less than a half of the flour sold to Ceylon. On the other hand, Britain was easily Canada’s best, customer, as it took 38 per cent, of that, country’s exports of wheat, compared with 12.5 per cent, from Australia. Those facts show clearly that we are not maintaining our position in the export markets of the world. It is time that the Government called the wheat-growers together, and gave them the information necessary to enable them to come to a sensible decision. Senator Gorton interjected just now that Australians are not compelled to grow wheat, and could reduce the area under wheat if they so desired. That is true, but if we want to bring about a state of chaos, that is the way to do so. If that policy were introduced, some men, who realized the true situation, would reduce their production, but other farmers would grow more wheat. At a conference of farmers held in Perth last February, the president of the wheat section advocated a reduction of the area sown to wheat. He had no chance of succeeding, but if the Commonwealth Government had then said that it would not provide the money for additional wheat storage, and if the State governments had taken a similar stand, that advice would have had some backing, and some results would have been achieved. That advice was not given, however. About two weeks later I met a friend who grew wheat, and I asked him what he intended to do. He replied that he intended to grow more wheat, and when I asked why he had come to that decision, he said that he had had a lean year in the year before, and so he intended to increase his acreage this year. That is what will happen if we leave this matter to individuals to decide for themselves. The same thing will happen as between States ; one State will reduce its acreage under wheat, and another will grow more wheat. Therefore, it should be done in an orderly fashion.

Senator Gorton:

– Does the honorable senator mean that it should be done under compulsion?

Senator SEWARD:

– No, not under compulsion, but by negotiation. If we were to bring the State Ministers for Agriculture together with the Commonwealth Minister for Agriculture, the wheat-growers’ representatives and the chairman of the Australian Wheat Board, that conference would probably give our wheat-growers all the information that they require really to understand the position and come to a reasonable decision. At present, the wheat-grower has not at his disposal a vast amount of information about the wheat position throughout the world. If the representatives of the wheat-growers could meet the Government authorities and the Australian Wheat Board, they could be informed of the world position. A reduction of acreage of 30 per cent, or more could then be made, with the concurrence of the growers throughout Australia. However, if the reduction of our wheat acreage is left to the individual growers, there will be chaos in the industry. Therefore, I appeal to the Government to take steps to establish the conference and inform the growers as I have suggested.

The most important aspect of this bill is whether the Australian Government or the wheat-grower should meet the costs involved. I am speaking mainly for the wheat-grower in Western Australia, and I know that he is required to pay the cost of the extra storage and to pay for double handling. It is of interest to note that quite recently I was asked to try to have dollars released so that a special fumigant could be purchased to fumigate wheat against weevils. If I am successful in having dollars allocated to buy this fumigant, which I believe is called cynogas G, it will save a large sum of money in the fumigation of wheat. I believe the company that uses it has reduced the .strength of the fumigant to about a quarter the recommended strength. The company has found that, unless it can get the fumigant, the cost of fumigating a shipment of 9,000 tons of wheat will be £1,125 instead of £188. Because of the reasons that I have put before the Senate, I say that the charge involved should fall on the Australian Government and not on the wheat-grower, and for that reason I cannot support this bill.

Senator SHEEHAN:
Victoria

– This bill is very important, and at the outset I wish to congratulate my leader, Senator McKenna, for his very pungent criticism of the Government for the cavalier manner in which this Senate has been treated on the introduction of this important measure. The bill is designed to make available £3,500,000 to provide emergency storage for our surplus wheat. The proposal is that instead of the shortterm arrangement now in existence between the Australian Wheat Board and the Commonwealth Bank, the Government will make arrangements for the Australian Loan Council to make the necessary money available, the loans to have a currency of twenty years. I believe that when a proposition of that nature is placed before the Parliament, we are entitled to more details than were presented to us by the Minister for National Development (Senator Spooner) in his second-reading speech.

Surely we have not reached the stage when the Government, because of its secure position, can treat the Parliament with such scant consideration. Surely the Parliament is a representative institution, and there is a duty upon governments when presenting propositions to the Parliament to set forth all the facts so that the members of the Parliament can consider the measure on its merits. However, I suggest that the Minister has not put facts before us ; he has merely thrown out statements.

Some very important objections have been lodged against the Government’s proposals in this measure. For example, who is to pay the interest on the loan money, and what is to be done in the future about wheat storage? Senator Seward has given us the benefit of his experience in the wheat industry, and has described the proposed buildings to us, but he has given us his own opinion, and we have not received any factual information from the Government. I do not know whether the buildings that will be erected are of such a substantial nature that they will last longer than twenty years, although I have seen some new buildings in Victoria because I take more than a passing interest in the future of wheat production in this country. I am fully aware that wheat plays an important part in our economy, and I know of the difficulties that the wheat industry has faced in the past. In past years, the wheat industry has operated in precarious circumstances, and this bill brings home to us the fact that the industry again finds itself in such circumstances.

Last year, there was a surplus of about 90,000,000 bushels of wheat, and it is expected that this year the surplus will be about 93,000,000 bushels. We are at present enjoying a bountiful season, but the indications are that the market for our wheat has contracted. Great Britain is no longer a party to the International Wheat Agreement, but that country has been one of our best customers. NowGreat Britain can please itself where it buys its wheat, and because of the state of its economy it will purchase foodstuffs in the cheapest markets. Indeed, it is necessary for the survival of Great Britain that it should do so, and, consequently, we find ourselves in a rather serious position. I believe that it is the duty of the Government to give the Australian people and the wheat-growers full information about its proposal. I was most interested in Senator Seward’s remarks about the future of the wheat industry, and whether it was necessary to continue increasing production or whether we should restrict the wheat acreage. Nobody has had sufficient courage to suggest, officially, that the acreage of wheat should be restricted. As Senator

Seward stated, it was suggested by Sir John Teasdale that there should be a shrinkage in the acreage, a suggestion which was immediately countered by both the Minister for Commerce and Agriculture (Mr. McEwen) and the Prime Minister (Mr. Menzies), in intimating that that was not the policy of the Government. I do not know whether the Government has a policy at all in this matter. What do we find in connexion with other commodities that are exported from Australia ? Some time ago, the Government guaranteed prices for butter,, pig-meats, and so on. Then the prices for those commodities slowly, but surely, began to decline, as a result of which the producers of pig-meats, for instance, went out of production.

There is a lot of truth in Senator Seward’s contention that under the system of guaranteed prices, one lot of primary producers will increase production, whilst others will cease production. When the price of pig-meats and other commodities fell, much of the production of those commodities ceased. In the case of wheat, however, the position is different. This Government, following the excellent example of previous governments which came to the assistance of the wheat industry when it was in dire trouble, has continued to guarantee a price to the wheat-grower, a price which is sufficient to keep growers in the industry. They will not leave the industry as long as they receive cost of production, plus a reasonable margin of profit.

We should have had some intimation already, but not having had it, we should have immediately a statement from the Government concerning the markets on which it intends to sell our surplus wheat. We should be given an idea of what it is proposed to do with that wheat. I understand that there are millions of people in the world who are on the point of starvation, and I also understand that wheat is one of the best possible foodstuffs.

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

– It is the staff of life.

Senator SHEEHAN:

– That is so. Yet, we in Australia are talking of restricting the production of this valuable commodity. Surely, we are not going to adopt the attitude that, because of a temporary disadvantage concerning one consuming nation, we are not going to devote our energies to seeking other markets for our wheat. What would happen if the Government were to withdraw its guarantee?

I was amazed by some of the statements that were made by at least one honorable member of the House of Representatives who represents wheat-growing constituencies. A certain honorable member drew attention to the fact that, in previous years, before this bureaucracy, as he termed the Australian Wheat Board, came into existence, private enterprise was able to deal with wheat harvests as they came. He said that there was an almost automatic flow from the wheat farm to the railway station, from the railway station to the boat, and from the boat to the market overseas. Of course, there was that automatic flow in those days, hut would the wheat-farmers like to see a return of those conditions? Of course, if those conditions operated to-day there would be no necessity for the Australian Parliament to pass a measure of this kind. The Parliament and the people of Australia would not have to find the money to store the wheat. That would be done by the exporters, the people who, in the past, made the profits. They would provide the facilities for storing the wheat until they were able to make a profit on it. Surely, we do not want to see those conditions return ! Surely, we do not want to see the wheat-farmers again assembling at the stations or siding, waiting for the local buyer to come along, and most eager to know whether the price of wheat had risen by a penny, a halfpenny, or even a farthing a bushel.

As the Leader of the Opposition (Senator McKenna) has said, the Parliament should have before it more information on this matter. I suggest that, before this bill leaves the Senate, the Government should make a statement on the position. As I have said, the scanty consideration which the measure received in the House of Representatives, particularly from honorable members who are the direct representatives of wheatgrowing areas, amazed me. Although we in the Senate represent the States as a whole, we in fact represent the wheatgrowers as much as we do other members of - the community.

Before this debate is concluded, I hope we shall know where we are going in relation to this important industry. The Prime Minister is calling together the representatives of all sections of the community because of the financial position into which, it is suggested, the country is drifting. The Government is deploring the loss of our overseas trade balances. At the same time, it is proposed, by means of this bill, to provide £3,500,000 with which to keep locked up in Australia one of the most lucrative commodities that we have been exporting for many years. The Government has not said a word about the possibility of sending this wheat overseas and thus increasing our overseas credits. To my way of thinking, that is indicative of the lack of policy of the Government in respect of all our important export commodities. The Government asks the Parliament to approve a loan of £3,500,000 as though it were asking for the loan of a few shillings.

In these circumstances, I agree that we must support this measure, because already, some of the work has been performed, and the remainder of the buildings will be completed at an early date. In view of the present policy of the Government, it is necessary that the wheatfarmers should have somewhere to store their wheat, in order to keep it away from weevils and mice, which have destroyed wheat crops in the past. Therefore, I support the motion, and I express the hope that further information will be forthcoming from the Government at a later stage.

Senator PEARSON:
South Australia

– I, too, rise to support the bill. I am pleased to think that this is a bill which will go through the Senate with scarcely a dissentient voice. I agree with the reasons put forward by the Leader of the Opposition (Senator McKenna) and Senator Sheehan concerning the need to support the bill. The facts are that, last year, it became apparent that, in November, 1954, there would be a very large carry-over of wheat, some 45,000,000 bushels of which could not adequately be stored unless special provision were made. At that time the Government, I think quite rightly, decided to make temporary financial provision which would enable additional storage to be provided. Senator Seward concluded his speech by saying that he could not support the bill. I cannot understand hL attitude. I listened to him with a great deal of interest, but .1 cannot agree that his intention to oppose the measure is a proper one. What would be the position if this bill were defeated ? The Government has agreed, with all those concerned, to provide extra accommodation to store the surplus wheat and some one has to agree to a method of paying for the provision, of those storages. When this matter was first dealt with it was agreed that special temporary financial accommodation should be made available and that, later, a more permanent policy of financing the increased storages would be followed. If Senator Seward decides to oppose this bill and persuades a sufficient number of his colleagues in the Senate to do likewise, and the measure is defeated, what will happen? Does Senator Seward seriously advocate that we should accept what has been done and make no permanent provision for meeting the cost of doing it? In effect, that must be the alternative. I hope that Senator Seward will give some further consideration to this matter and decide not to oppose the bill. Whatever his objections may be to various provisions in it, he must agree to some permanent method of financing what has already been done.

Senator McKenna pointed out that last November 45,000,000 bushels of wheat in Australia could not be adequately stored. I wish to cite some figures, which I think are reasonably accurate, to show the present position. The carry-over at November, 1954, proved to be 93,650,000 bushels. The harvest which was reaped nine months ago at the end of the 1954-55 season yielded a further 150,920,000 bushels. That is a total of 244,570,000 bushels. Estimated sales of wheat for flour, stock feed and so on, during the current year, are expected to absorb 56,800,000 bushels, which would leave for export 187,770,000 bushels. The estimated sales for the current year amount to 94,140,000 so that the expected carry-over for 1955 is 93,630,000 bushels.

So, there will be no more wheat in Australia at the 1st November this year than there was at the same date last year. Those figures lead me to point out to Senator Seward that I do not despair of the wheat surplus now in Australia.

During the past year great difficulty has been experienced in disposing of our wheat, and Senator McKenna and Senator Sheehan and other senators havegiven the reason. But the Australian position has not deteriorated in spite of tremendous surpluses and pressure on the part of other countries overseas in selling their wheat, or the fact that Great Britain has been tardy in its purchases of wheat from Australia, although it is now outside the international wheat agreement. Nevertheless, some regard must be had for the future of the wheat industry of Australia. I do not despair, as Senator Seward seems to do. Australia’s wheat position is not any worse than it was twelve months ago. All the wheat-producing countries have enjoyed a succession of bountiful seasons over a long period. Australia has had ten years of extraordinary seasons. We hope that they will continue, although we have no right to expect that they will do so.

Senator Kennelly:

– Australians hope that other countries will have a bad season.

Senator Sheehan:

– That is what the Government hopes.

Senator PEARSON:

Senator Kennelly is wrong; Australians hope nothing of the kind. However, experience through the years has taught us that nature will take a hand in the future.

Senator Kennelly:

– Does the honorable senator intend to rely on nature to get us out of our troubles?

Senator PEARSON:

– If Senator Kennelly does not realize that what I have said is true, he has not been a student of the way in which nature works. Nature has remarkable ways of correction. We have seen nature suddenly dispose of world surpluses of primary products. Governments have advocated policies of despair such as Senator Seward proposed to-day - restricting the acreage sown to wheat. The honorable senator did not suggest compulsory restriction but if his proposal were implemented it would amount to compulsory restriction. His is a policy of despair. It has been unwarranted in the past and it will be unwarranted again. Whatever the size of the surpluses overseas - I do not deny that they are huge - it will only take one bad season throughout the wheatgrowing areas of the world to bring the surpluses back to more manageable proportions. Nature does that sort of thing repeatedly, and will do it again. At this stage, Australia, with a comparatively small exportable surplus of wheat, would be doing itself a great disservice if, alone of the countries which produce wheat, it were to advocate a policy of restriction of acreage. I cannot agree with my colleague, Senator Seward, on this matter.

The Leader of the Opposition rejoiced over the fact that the Government was now making this financial provision by way of a loan, and he said that he hoped the Government had had a change of heart in regard to financing capital works.

Senator Kennelly:

Senator Kennelly interjecting,

Senator PEARSON:

– Did I hear Senator Kennelly say he did not agree with his leader ? It would not be the first time. During the budget debate, the Leader of the Opposition expressed himself at rather greater length on this particular subject. He said, in effect, that all Commonwealth works should be financed by way of loan, and when somebody suggested that loan money was not so readily available, he went on to expound his own views, suggesting ways and means by which people could be induced to lend money to the Australian Loan Council. Among those suggestions he put forward the rather fantastic idea that the Government should offer a fixed term and that persons who lent money should be informed that if interest rates generally increased during the currency of the loan the rate applying to the particular loan would also be increased. That method of raising loan moneys in Australia is completely novel for any government to my knowledge. His previous leader, the man who is often held up here as an authority on monetary policy, the late Mr. Chifley, never advocated such a. policy as that.

Senator Armstrong:

Mr. Chifley had no trouble in filling his loans.

Senator PEARSON:

– I think what 1 have said is fair comment on what the Leader of the Opposition advocated. However, he did not indicate whether he would lower the interest rate at a period during the currency of the particular loan if interest rates fell. I should like to hear him develop his argument on that point at some future date. The people who are now leading the Australian Labour party have forsaken some of their former ideals in regard to finance; and that probably reflects the reckless line of succession which the Labour party has entered upon. It is more evidence of the fact that the present financial wizards of the Labour party are far more reckless than was Mr. Chifley, for whom we had the highest regard.

I desire now to refer to the financial position in which the wheat-grower find? himself as a result of legislation passed by this Government and by previous governments. I give credit where credit is due. I believe in stabilization for my wheat-grower friends and I say at once that the basis of the present scheme was laid when the Labour Government was in office. But this Government has carried on that policy and improved upon it.

Sitting suspended from 5.S0 to 8 p.m.

Senator PEARSON:

– Before the suspension of the sitting, Mr. President, T was trying to point out that there was no real cause, in my humble opinion, for pessimism at this time regarding the outlook for the wheat industry. I have said that although the surpluses which have been built up in the wheat-growing countries of the world are certainly embarrassing, they may disappear much more quickly than we now imagine possible. I have expressed the view that nature itself will undoubtedly take a hand, under the law of averages, before many months or years have passed. I have also expressed the very definite view that we should not adopt at this stage a panicky attitude which would force us to advocate a policy of acreage’ restriction. The United States of America which has now, and probably will have for many years to come a most important effect on the world wheat market, is itself curtailing wheat acreage to some extent. If America, with its tremendous influence on exports and world surpluses, is adopting that policy, there is all the more reason why Australia, which has very little effect on world prices, should not adopt a policy of that kind.

As a wheat-grower, I am very much consoled by the fact that successive Australian governments have presented schemes to the wheat-growers which, in their wisdom, the wheat-growers have accepted. Those schemes now offer a basis of comparative security for the average wheat-grower. We can claim that that will, perhaps, in the future, cushion the effect of a fall in the price of wheat. I think that honorable senators are aware of what has happened in the wheat industry under those schemes. For the duration of the present scheme, which I think has about two years to run, the wheat-grower is guaranteed the cost of production for the portion of his product which is consumed locally, and, because of the magnificent offer of the Menzies Government in the latest plan, he is guaranteed his cost of production to the extent of 100,000,000 bushels of wheat for export. I was astounded when that offer was made to the wheat-growers. I did not think it possible that any government would contemplate a guarantee to that extent for wheat exported from Australia.

Senator KENNELLY:
VICTORIA · ALP

– What is the cost of production now?

Senator PEARSON:

– I do not want to go into the detail of all these things, but if the honorable senator presses his question I will be only too happy to tell him the details of the scheme. They are well known to the Senate and, I think, to the honorable senator.

Senator Kennelly:

– The honorable senator has done pretty well up to date by side-stepping.

Senator PEARSON:

– I do not think I have. I do not think that that is a true impression. I have said some very definite things about this matter. The guaranteed’ price at present is 12s. 7d. a bushel, and the honorable senator probably knows that for the wheat used in

Australia the consumer is charged 14s. a bushel. The grower is guaranteed the same cost of production, 12s. 7d. a bushel, for the 100,000,000 bushels for export. To those who may suggest that the wheat industry is in a privileged position among the primary industries of Australia, I say that a basic feature of the plans put forward by this Government and its predecessor is that the wheat-grower is prepared to help himself by providing a fund which will be his guarantee in days of stress. To build up that fund, which now stands at £20,000,000, the wheat industry has been, and still is, contributing 2s. a bushel by way of export tax on all wheat exported. If ever wheat prices fall below the guaranteed level, and assistance has to be given to the industry, no taxpayer will be called upon for that assistance until the £20,000,000 in the fund has been completely used up.

Senator Kennelly:

– What a magnificent sum on the profit that is likely to be made next year !

Senator PEARSON:

– The honorable senator can express that opinion if he likes, but it has been agreed by the wheatgrowers and the successive governments that the fund will be limited to £20,000,000, and if the honorable senator thinks that that is not a sufficiently large amount, then he has the previous Labour Minister, as well as the present Minister, to criticize. The fact remains that the wheat-grower has been prepared to back his own security to this extent, and no taxpayer’s money will be required to make up the guaranteed price until at least this £20,000,000 has been used to bolster up the price to the farmer. If, after that fund has been used, the taxpayer does have to make some contribution, the farmer will still be in it because he is a taxpayer himself. If that day comes, the wheat-grower will surely have justification for asking for assistance, because we all know that while this legislation has been in force the wheat-growers have subsidized the consumers in Australia to the extent of many millions of pounds. Various estimates have been made of this figure, and I should not be surprised if it amounted to £200,000,000. When wheat was selling overseas at about 22s. a bushel, the home consumer still bought his wheat, whether it was for flour, stock feed, or any other purpose, at 10s., Ils., 12s. 7d., and now 14s. a bushel. Therefore, I contend that nobody in this country should quibble if a time comes when the taxpayer has to honour this guarantee. I only wish that every primary industry in this country had the same feeling of security as the wheat industry is entitled to at present. I wish the dried fruits industry, for instance, was in a like position to the wheat industry. I wish that that industry had taken steps years ago to formulate a plan such as that adopted by the wheat-grower. If other primary industries had adopted similar plans, there would be much less heartburning about their future than there is to-day.

I do not want to say anything further about this matter. I think that the bill must receive the approval of the Senate. After all, its simple purpose is to provide for the ultimate payment for storages which have had to be provided to hold the wheat which is surplus for the time being. 1 look forward with confidence to the day when those surpluses will disappear, and that day may come more quickly than honorable senators think.

Senator CRITCHLEY:
South Australia

– This is a most remarkable bill. However, the Opposition is left with no alternative ; we must support it. The purposes of the bill are defined as follows: -

To authorize the raising of moneys by advances to the Australian Wheat Board, for the purpose of enabling the Board to meet its liabilities in relation to emergency wheat stores, and to empower the Board to borrow moneys to be so advanced.

Honorable senators have said why, in their opinion, action should be taken to provide emergency wheat storage. Responsibility for the present situation rests upon the Government. It was returned to office with a mandate from the people, and the responsibility of finding a solution for problems such as that associated with wheat marketing. Despite requests by supporters of the Government and members of the Opposition for information upon results, if any, achieved by the Government, in its efforts to dispose of Australian wheat, nobody has been able to obtain anything but the vaguest replies.

I have been in public life for more than 30 years, and I do not know any section of the community that has had more advice on how to run its business than have the primary producers. They have been told to increase the acreage under production, and then they have been told to decrease it. They have been told to become more efficient and to produce more. The difficulties of the present situation have been accentuated by the Government’s action in refusing to make a deal with Great Britain for the sale of wheat. Nobody can hoodwink the Australian farmers. They are as wide awake to their own interests as anybody else, but they have not had a fair deal from this Government, although it was elected to office on its assurances that the farmers, among others, would be protected.

I was pleased to hear Senator Pearson refer to the good achievements of the previous Labour Government. While it was in office, it instituted an efficient system of marketing. This Government did not maintain that system, but reverted to trading on a trader-to-trader basis. Many sections of primary producers have been assisted by a merciful providence. They have had bountiful crops and good prices, but the wheat-growers have not been paid in full for crops they grew two or three years ago. The Government fully realizes the situation and, obviously, there is something wrong with its administration.

Because of the existing circumstances, the Opposition has no alternative but to support this bill, and thereby approve the expenditure of money for the storage of wheat. However, as the Leader of the Opposition in the Senate (Senator McKenna) has said, there was no indication in the second-reading speech of the Minister for National Development (Senator Spooner) what the stores and buildings that would be erected when the money was allocated. The Opposition hopes that the Minister will give some details when replying to the debate.

A few weeks ago, it was my privilege to visit the town of Cummins, in South Australia. No doubt Senator Pearson has a personal interest in some of the wheat there. Until recent years, that district was regarded as the far outback of South Australia. Its people battled hard, and showed themselves to be progressive. When I was at Cummins recently, 980,000 bags of wheat were stacked there, and the total will rise above 1,000,000 bags when accommodation is provided. Those people are still producing wheat, and they are faced with a black future because there is no indication that their wheat will be sold overseas or that it will find a ready home market. They know that this Government’s policy has also had an adverse effect on the shipping problem.

Honorable senators have stated during this debate that we have lost markets for our primary products. We have also lost a number of flour mills which were an asset to Australia. Much of the blame for that situation can be laid at the door of the Government for its continued inactivity along appropriate lines. In South Australia, the number of flour mills is decreasing, and those still in operation have fewer employees. The flourmillers want to know where they can sell their products. It would be easy if there were markets available overseas, but countries that were torn asunder by war are producing as much as, or more than, they produced before the war. Turkey and France are producing heavier crops of wheat.

Meanwhile, Australia is spending money to store foodstuffs for which the present Government cannot find markets. At the same time, we are supposed to be seeking world peace and a better understanding between nations. While the Senate is discussing the bill before it, two-thirds of the world is hungry. It is easy for a government to do small things. It should not be beyond the capacity of this Government to do big things and relieve hunger. The Government should be prepared to confer with the governments of other nations on the disposal of foodstuffs, and revert to the trading practices that were instituted so successfully by the Labour Government. I hope that the Minister, in his reply, will tell the Senate whether there is any prospect of negotiations for the sale of our surplus wheat so that we may give a glimmer of hope to the people who are producing this vital commodity. Minister after Minister has returned to Australia from a visit abroad to tell us that, although things are difficult, he is hopeful that they will improve. This year there are signs that Australia will again reap a bountiful wheat harvest. I have never seen the wheat lands of South Australia look more promising than they do at the present time. The Government cannot accept;any credit for that state of affairs. We are approaching another wheat harvest, and under this bill we are asked to authorize the expenditure of money to build storage for the wheat that will be reaped, although, so far, there is nothing to show, either that the wheat is likely to be sold, or, if there are buyers, that transport will be available to carry it. In the long run, it would be better for the Australian people, and the Australian Government, if, instead of voting money to do things which have been rendered necessary because of the failure of the Government to examine the situation thoroughly, we gave the wheat to the starving peoples of the world, rather than store it in large quantities, and have it destroyed by weevils and other pests.

Senator Kendall:

– Who would pay the farmers if that were done?

Senator CRITCHLEY:

– The Australian nation would pay them. The people will pay, in any event. Questions like that leave me unmoved. The honorable senator cannot deny that the Australian taxpayers, including the wheatgrowers who expect to be paid a reasonable price for their product, will be called upon to pay for the storage of their wheat under conditions that will maintain it in a saleable condition, for an uncertain period. Although the present Government has been in office for over five years, it still has no policy to meet the present situation. Earlier to-day, Senator Seward said that a person who attempted to grow wheat on land that cost £50 an acre should have his head read. I think that even South Australian supporters of the Government will agree that, during the last ten years, persons in search of agricultural land suitable for growing wheat have had a better chance of obtaining it in Western Australia at prices which would enable them to make a living, than they have had in South Australia. When I was a young man, good wheat land in South Australia was obtainable at from £2 to £3 an acre. Similar land cannot be bought now for less than £30 or £35 an acre. I am not unmindful of the fact that the question of land values is a matter for the State governments, rather than the Federal Government, but, as members of the National Parliament, we must admit that something is wrong when men try to grow wheat on land that costs such exorbitant prices. It is the duty of the Government to do something in this matter. Perhaps, even now, it is not too late, because, according to press reports, there is to be a conference to consider such matters. One of the major problems confronting governments in this country, particularly the Australian Government, because it is the Government that levies taxes, is that of doing something to bolster up a foodproducing industry. I realize that the world “ bolster “ is a terrible word, but I cannot avoid using it. The problem is all the more difficult when we remember the high prices that are charged, and paid, for land on which to produce that food. The price of land is so excessive that no man who is not of independent means can make a living from it. I can never understand how the farming community has so quietly submitted to the dictates of people who have never produced anything in their lives.

I realize that no good purpose will be served by prolonging this debate, but I cannot but deplore the inactivity of the Government in this field. On a number of occasions since 1949 the Government has been returned to office because of the assurance given by its candidates that, if elected, they would find markets for our products. The wheat-farmers, in particular, have been promised much by successive governments, particularly Liberal governments. The promises made to them have exceeded the promises made to other producers. We are asked to pass this bill, but we have not been given any assurance by the Government that there is a chance of selling even a proportion of the wheat that is to be stored. Honorable senators opposite are disposed to ask where the money is to come from to pay the farmers if the wheat, or some of it, instead of being stored, were made available to feed the starving peoples of the world, but the adoption of such a policy would bring its own reward in the years to come. Such an action on our part would be commended, and would do us more good than if we followed the practice so often resorted to in the past - the practice of wilfully destroying foodstuffs.

Apart from the duty of seeking markets for our wheat, or providing storage facilities, it is the bounden duty of the Australian Parliament to take steps to ensure that land for the production of food can be obtained by those who need it, at prices which will enable them to make a reasonable living. I am not concerned about a man who is prepared to give £50 an acre for 1,000 acres of land. I am concerned about the young men who, because of the price of land, and because of the difficulty of obtaining finance, have no hope of getting on the land. They will never obtain their own land unless they are prepared to hand themselves over body and soul to those who are responsible for our primary industries being in the condition that they are in to-day.

Senator GORTON:
Victoria

.- The object of the bill before the Senate is to provide storage for any wheat that we may grow between the 1st December this year and the 30th November next year, which is in excess of the quantity that we can consume here, or sell overseas. Nobody can be sure just what quantities of wheat are involved. The best that can be done is to make estimates. The bill is wanted by the wheat-growers, and has been approved by the Government and the Opposition. There has been little or no debate on the proposal itself, although there have been legitimate requests for information about the type of building to be erected and so on.

The debate has ranged over a much wider field in matters connected with the wheat industry. Some honorable senators opposite and at least one honorable senator on the Government side are worrying lest we are now in an era of vast over-production of wheat. That is an ominous phrase - over-production of wheat. However, I do not believe that an impartial examination of the wheat position will show that we are now at a stage of vast over-production. My colleague, Senator Pearson, has shown that during the current year we consumed in Australia or sold overseas the total amount of wheat that was grown in this country during that period so that there has been no addition to the carry-over of wheat stocks this year. We have coming up a bumper harvest in all the States. In my own area of the Mallee I have not seen such a good wheat harvest as the present one promises to be. Therefore we are likely to have a crop of something like 1S5,000,000 bushels of wheat, and to sell overseas and consume here something like 155,000,000 bushels if there is no increase of overseas sales or of consumption within this country. There is likely to be some increase of home consumption, and nobody can say for sure that there will be no increase of sales overseas. Great Britain appears to be coming back into the wheat market now that the large stocks that the British Ministry of Food held, and released at the conclusion of the bulk buying agreement, are being depleted.

We are all dealing with probabilities, and we cannot be sure of one thing or another, but we certainly cannot be sure that we shall not sell more abroad this year than we did last year. If we do well, we shall cut down the estimated carry-over, but if we find ourselves carrying 120,000,000 or 130,000,000 bushels of wheat, is that such a vast quantity for this country to carry, and is it so terribly dangerous? We have had seven or eight or nine of the best pastoral and agricultural years in our history. In the nature of things - I believe in the far future, but possibly in the near future - we can run into a drought. Indeed, we must expect it. A drought could cut the wheat crop to ribbons, as I have seen droughts do in the area in which I live. If we were carrying 130,000,000 bushels of wheat, which is two years’ supply for internal consumption without selling a bushel abroad, and if a drought should cut down our wheat crop, we could well find ourselves by November, 1957, or November, 1958, with only 60,000,000 bushels in store in Australia, or only one year’s supply for this country.

Over-production may come, but it is far too early to suggest that it has come, and the evidence, I believe, indicates that it has not yet come. But we have been told that we should curtail the wheat acreage, and that must involve compulsion. I am one of those who believe that the best way to get a farmer to produce what is needed in this country is to leave it to the farmer to produce what he thinks is needed, instead of compelling him to grow or not to grow this or that commodity. I have recollections of not so long ago when a man had to get a licence to grow wheat in this country. In those days, farmers had to get licences to grow wheat, and in Western Australia farmers were paid not to grow it. Yet, because Nature enters into this matter, within a year or two of that time wheat was so scarce that all sorts of exhortations were made to the wheat-growers to get them to grow more wheat, and so come to the country’s rescue. I believe that, especially at the present time, any attempt at compulsory curtailment of wheatgrowing is wrong, and is not in the interest of Australia.

It has been suggested that we should give our wheat away, or sell it on longterm credits to such Asian countries as have people who are prepared to eat wheat. But that might not be as easy as it looks at first sight, because there has been a bumper rice crop in all the rice producing areas of Asia, and the vast majority of the people living in those areas would rather eat rice than wheat. But assuming that we could make wheat available on long-term credits, say £50,000,000 or £60,000,000 worth of it, it is necessary to consider the financial implications of such a transaction. The farmer will have to be paid for producing the wheat, and then will have to join with the rest of the people in paying for the gift. We cannot pour £50,000,000 or £60,000,000 into the economy of this country completely unbacked by any goods whatever - which is what this proposal envisages - without raising taxes or adopting some other method of paying for the transaction - which, I admit, would be far more moral than the proposal to limit the wheat acreage in a starving world. When one considers the size of the budget of Australia as it is, to take £50,000,000, £60,000,000 or £70,000,000 out of circulation, which would have to be done if this plan were followed through, would be a dislocating undertaking.

I have only one more thing to say in this debate, and that is a suggestion I make to the Government, because I believe that in this industry, as in all industries, we should take all possible steps to sell abroad what the people abroad want to buy. It is reasonably clear that at least some of our customers - and I believe most of them, particularly Japan, which is a large potential customer - do not want soft Australian wheat. They want hard wheat with a high protein content. We have markets which could be expanded greatly if we supplied the kind of wheat which the buyers in those markets want. The reason we are not now providing that type of wheat is that we buy all wheats on a fair average quality basis, so that a man can grow a soft wheat which will yield highly and produce a lot of bushels, and thus earn more than the man who grows a hard wheat which gives a small yield and not so many bushels per acre. It is my belief that in this, as in all things, higher payment should be made for higher quality. In that way, we could add to our export income and help to solve the wheat question we have been discussing to-night.

Senator KENNELLY:
Victoria

– I congratulate Senator Gorton on his speech, particularly on the last proposition he put forward. I trust that he will use his influence with the Government to have an attempt made to grow wheat more for quality than for quantity in this country. To my mind, that would at least help the flour-milling industry, which, perhaps, has suffered more than any other industry. However, I am not so much in accord with other statements of the honorable senator. For instance, he said that there is no such thing as over-production.

Let us consider the countries of the world that grow wheat. Canada, I am informed, has not yet sold completely its 1952-53 crop. That information was given to me by a gentleman who sat in this chamber as an honoured guest, I think it was last week. I happened to travel on an aeroplane with him between Melbourne and Canberra. Next, let us look at the United States of America. I do not know whether we shall adopt a similar course in this country, but the farmers of the United States have curtailed production of wheat because the Government of that country said that it would give them a guaranteed price only in respect of a certain acreage or a certain number of bushels. Russia is the other great wheat-producing country. I have heard a lot of talk of markets existing in the East for our wheat, but having regard to the policy of this Government of no trade with China, I ask whether there really is a potential market in the East. I believe there is a market for our flour. As Senator Gorton rightly said, we had such a market there until we started growing soft wheat because it produced a greater number of bushels than does hard wheat. As the honorable senator also correctly stated, the gluten content of hard wheat is much greater than that of soft wheat. Therefore, we did not continue to produce the kind of wheat required for that market, and to a large extent, though not completely, we lost our flour market in China.

Senator Gorton apparently believes that we must have droughts. If a drought came-

Senator Henty:

– We could not stop a drought.

Senator KENNELLY:

– I know. I do not think anybody could do so. I admit we have had a good run of seasons, but I contend that science has played a remarkable part in bringing unproductive land into production. Consider what is happening in South Australia, for instance, and the results achieved by one of our big insurance companies by adding trace elements to the soil there.

Senator MARRIOTT:
TASMANIA · LP

– That is what private enterprise does !

Senator KENNELLY:

– I do not wish to speak to small men, but to men who think. That kind of thing is not confined to this country. I welcome such a development, because it means that land that was once unproductive is now being made productive by the application of science.

Senator Laught:

– There is not much wheat grown on the Australian Mutual Provident Society project.

Senator KENNELLY:

– The fact is that we have done it on a small scale in this country, and it is reasonable to suppose that older nations of the world have done just as much, or even more, in this respect. I do not wish to be unkind, but I think it is unsound to argue that if a drought came, everything would be all right as long as we had wheat storages.

Senator Gorton:

– ¥e may not want to die, but we insure our lives, nevertheless.

Senator KENNELLY:

– That may be true. I have heard not only the honorable senator, but also Senator Pearson, speaking along the same lines before. I sincerely hope that I misinterpreted the words used by the honorable senator. I certainly do not wish for a drought.

Senator Gorton also said that the only way to curtail acreage was by compulsion. There are lots of things that we are compelled to do for the good of the many. I should like to see a few more such things. We cannot always do as we like, and indeed it would not be much good if we could do so. We pass laws to compel people to do certain things. Some time ago, Sir John Teasdale spoke of curtailing wheat acreages. If I were forced into the position of having to say “ Yes “ or “ No “ to that proposition, a.t the moment I do not know which I should say. This industry needs some planning, because it affects not only this country, but others also. We cannot build a wall around ourselves. Government supporters are saying, “ A drought may come and fix it “, but I remind them that thei r Government lifted controls, and consequently is responsible for the present situation. Wheat-growing land in Victoria at Jung, near Horsham, was sold for £54 an acre, and in order to recover his production costs the farmer must receive 18s. or £1 a bushel, and keep on getting it. As every one knows, he does not grow wheat twice in succession on the same area. He takes off one crop, and the next season allows the land to lie fallow.

Senator Gorton said that there was danger in selling wheat on long-term credit. Canada sold wheat on long- term credit, and the Australian Wheat Board wanted to do the same. I shall refer later to a statement on this subject by Mr. A. C. Everett, a grower member of the Australian Wheat Board. Reference has been made to the carry-over of surplus wheat, both last year and this year, and Senator Pearson said, in effect, “Thank goodness the position did not become any worse “. The fact is, however, that it did not become any better. I have heard rumours that the weevils are already in this stored wheat. I hope they are false. However, mine was not idle comment, because my information came from a responsible person. Honorable senators are well aware of wheat being exported from European countries which formerly imported it. . Who would ever have dreamt of Turkey exporting wheat? If there were a market for wheat in China to feed its population of 600,000,000 I doubt whether this Government would supply it. I would be willing to sell wheat to China, and I think the sooner that the Government adopts a sensible attitude towards that country and tries to manage Australia as we manage our own homes, the better. The farmers have been paid 10s. a bushel on the 1954-55 season’s wheat in storage, and under a three-year agreement the Government has agreed to advance the same price for the 1955-56 and the 1956-57 crops. But the fly in the ointment is the cost of production, which to-day is 12s. 7d. a bushel. Surely honorable senators will not say that that figure is represented entirely by wages costs. I admit that wages cost are involved in operating the machinery, but 1 recall reading a report of the remarks of Professor Waddell, of the Melbourne University, dealing with the number of people engaged in rural production, and costs now compared with twenty years ago. To-day, wheat costs 12s. 7d. a bushel to produce. In 1948-49, the cost was 7s. 2d. a. bushel. I do not want the wheatfarmer to sell his commodity at a figure below the cost of production any more than I want the wage-earner to sell his labour at a rate lower than he is entitled to receive.

In order to catch votes the Government, wherever it had the power, lifted controls, and its colleagues in State parliaments lifted others, irrespective of whether it was economically wise or not. I was a member of a State house at the time, and when I asked a member who was a director of the National Bank in Victoria how the ordinary person would fare if controls were lifted, he replied, “It will right itself in a matter of only two or three clays “. No sooner were controls lifted than all sorts of economic troubles arose. It is no good for the Government and it3 supporters to wish for a drought to solve the problem of wheat surpluses. The responsible Minister of this Government would not sign a wheat agreement providing for an export price of 18s.; he wanted 18s. 5d.

Senator Grant:

– That was the price that America wanted.

Senator KENNELLY:

– That may be so. I wonder whether the present Government rules this country or is it ruled by Mr. John Foster Dulles? I am not unfriendly towards the United States of America, but I believe that that country should be friendly with Australia on an honorable basis. It should not be dictating to this country. In a journal entitled the Victorian Wool and Wheatgrower, Mr. A. C. Everett, a grower member of the Australian- Wheat Board, is reported to have told the Wimmera District Council -

Poland, Hungary, Yugoslavia and Brazil all wanted Australia to sell wheat on credit. As the Board was trustee to growers and had no power to run financial risks, it had asked the Commonwealth on numerous occasions to set up this export credit insurance scheme.

Then he said that nothing had been done. He added -

The Canadian Government had enabled the Canadian Wheat Board to sell 10,000,000 bushels to Poland on twelve months’ credit, with a deposit of only 15 per cent.

I do not want this Government or any other Australian government to embark on hare-brained financial excursions that may adversely affect other people. I should not like it to do such a thing on my behalf, but if it is good enough for the Canadian Government to do that on behalf of the wheat-growers of that nation, to my mind it cannot be such a bad thing. This Government has caused the present trouble and it is up to it, instead of wishing for droughts, to suggest a proposition which will at least keep one of the most important industries of this nation on its feet. I do not wish to traverse the facts relating to other industries, but it is a sorry picture. If the Government will not stand up to its responsibilities, all I can say is that it is a very sad day for Australia. I hope at least that the Minister, when he replies, will give to the Senate some concrete proposals as to what the Government intends to do to cure the evil which I honestly believe it has caused.

Senator HANNAFORD:
South Australia

– After listening to the honorable senator who has just resumed his seat one would think that the wheat industry in Australia was in a state of dire calamity and that planning along the lines that he has somewhat vaguely put to us would extricate it from its difficulties. I do not look at the problem in the same light. I know that we have a large quantity of surplus wheat and that in order to store it we have to provide this emergency storage. However, I believe the wheat industry itself does not view the situation with any great degree of alarm. Personally, I have been interested in the industry virtually all my life and I endorse sincerely the remarks that have been made by m.y colleagues on this side of the chamber.

The present debate has ranged over a very wide circumference and has departed considerably from the bill that is before the Senate. The bill, of course, is designed to transfer from a short-term financial arrangement to a long-term financial arrangement - actually to transfer to the loan account - the sum of £3,500,000 that was originally raised through the Commonwealth Bank and which will be depreciated over a term of twenty years. The interest and redemption will be met by the Australian Wheat Board and will be a charge against the wheat-growers. The necessity to provide emergency storage was quickly realized by the industry itself and by the board, and an approach was made to the State governments and the Australian Government asking for the necessary storage to be provided. The language of the bill may be somewhat inadequate, but I do not know how it could have been otherwise expressed. It does not give much detail as to how the money is to be allocated, but I have no doubt that the Minister will give some information on that score.

From information I have been able to obtain, I understand that wheat storage is not a federal but a State responsibility. However, owing to the fact that it was necessary to provide for some 45,000,000 bushels at the close of last season in addition to the amount of wheat that will be harvested during the current season, it was necessary to provide this extra storage. The allocation is along these lines: In New South Wales, a sum of £1,400,000 is to be spent; in Victoria, £1,100,000; in Western Australia, £525,000; in South Australia, £335,000; and in Queensland, £70,000. Those are the amounts that will be allocated to the various States. In New South Wales and Victoria, as we all know, State-owned authorities - actually monopolies - take charge of the wheat on behalf of the Australian Wheat Board and are recouped by the board for their handling and storing charges. Those two States handle their wheat by the silo system and the expenditure involved in providing storage would be along the lines of building further concrete silos somewhat on the pattern that already exsits in those States. In Western Australia, the Growers Cooperative Bulk Handling Authority has designed a particular type of wheat storage. I have not had the pleasure of seeing that bulk storage. I understand that it differs .materially from the bulk storage system that exists in the eastern States; but it has been an eminent success. It is controlled by the growers in the form of a co-operative society. It is a bulk handling system just the same as in the eastern States but operates along different lines.

I pass now to South Australia and Queensland. I do not wish to exclude Queensland because it is becoming a very important wheat-growing State. It produces extremely valuable wheat which has a very high protein content. I agree with previous speakers that we must concentrate more and more on producing high-protein wheats. In a world of highly competitive selling, it is essential that we produce and sell wheats that are desired by buying countries. Japan, particularly, requires and demands a highprotein wheat. The system in operation in South Australia and Queensland is different from that in operation in the other States in that the bag-handling system is used. The Australian Wheat Board operates through licensed wheat receivers. Storage and the handling charges are made against the wheat that is received by these licensed receivers. The Australian Wheat Board itself is primarily a selling organization. It pays for the handling and storage, the amounts paid being deducted from moneys received from the sale of the growers’ wheat.

I would like to know how the scheme will work out, comparing the position of New South Wales, Victoria, and even Western Australia on the one hand, and that of South Australia and Queensland on the other. I understand that the State authorities may be invited to purchase these emergency storage facilities at any time, at their depreciated value. If, for instance, after five years, a wheat handling authority in New South Wales decided to purchase whatever type of bulk storage facility is provided in that State, it would be entitled to do so at the depreciated value. As far as New South Wales, Victoria and Western Australia are concerned, the amount involved could be easily ascertained, and the storage facilities could be quite simply transferred to the State handling authority. But in South Australia and Queensland the storage facilities will consist simply of the material that is required to cover the bagged wheat. In those State there will be no asset. Consequently there is no possibility in South Australia of handing over to a wheat-handling authority an asset that would have cost originally £335,000. Perhaps the Minister could explain to me just how these charges will be allocated between the States. Will these amounts be all charged against the board itself, against the growers’ wheat, or what will happen in the final analysis? I believe that New South Wales, Victoria and Western Australia will be in a much more favorable position than the other States which are using a different kind of storage.

The wheat industry, as has already been pointed out, has been carried on over a number of years under a stabilization plan. That plan has been very effective, although in saying that I realize that I am conceding quite a lot to the previous Government. The present stabilization plan is operating most successfully. “We hear a little criticism at times about the amount the wheatgrower is obtaining for his wheat, but when one remembers how much the wheat-grower has contributed to the welfare of the Australian community, there can be no complaint about anything he may be receiving under the wheat stabilization plan. It must be remembered that the present scheme, and the previous one, have not cost the taxpayers of Australia one penny, and I think it is reasonable to expect that the present scheme will not cost the taxpayer anything in the future. The present stabilization plan has three years to run, and, considering the way in which the wheat is being sold at present, there is a reasonable prospect that the amount of money that will be placed in the stabilization scheme from the wheat we have to sell will be sufficient to meet the Government’s commitment, without recourse to taxation revenue.

Comment has been made on the effect of the International “Wheat Agreement. I would like to correct Senator Kennelly’s statement that that agreement expires in 1956-57.

Senator Kennelly:

– I did not say that.

Senator HANNAFORD:

– I thought the honorable senator made that statement, but I was evidently wrong. The International Wheat Agreement was ratified in this Parliament in October, 1953, and its three years of operation included the seasons of 1953-54., 1954-55 and 1955-56. Does Senator Kennelly agree with that?

Senator Kennelly:

– I thought that it would go into 1956-57.

Senator HANNAFORD:

– I think I am correct in this matter, but it is more or less a minor point, and I am not making any song and dance about it. The International Wheat Agreement was negotiated over quite a long period prior to October, 1953. There was a long process of negotiation between the principal wheat-exporting countries and the wheatimporting countries. The maximum price agreed was 2 dollars and 5 cents, which is approximately 18s. 3-£d. Australian. At the same time, there was a minimum price of 1 dollar and 55 cents, or 13s. lOd. Australian. I do not know why any complaints should be levelled against the Australian Government for negotiating that agreement and becoming a signatory to it. It has been stated that we kept the United Kingdom Government from the scheme because we haggled over 6d. a bushel.

Senator Kennelly:

– But the United Kingdom Government did not sign, and we cannot sell wheat to that country.

Senator HANNAFORD:

– I want to go further on that aspect of the matter. We have not been able to sell a lot of our wheat, under the present quota, to a good many importing countries.

Senator Kennelly:

– But we did not sign the International Wheat Agreement. I think that, as a rule, we sold 40,000,000 bushels or more to Great Britain each year.

Senator HANNAFORD:

– We did sign the Intel-national Wheat Areement. We ratified it in this Parliament. Senator Kennelly has shown that he is completely ignorant on this matter. We signed the International Wheat Agreement, to which Great Britain was not a signatory, and we ratified it in this Parliament on the 13th October, 1953.

Senator Kennelly:

– Great Britain wanted to buy our wheat at 18s.

The DEPUTY PRESIDENT. - Order 1

Senator HANNAFORD:

– I do not know whether Senator Kennelly is in order in making a second speech. The fact remains that we were a party to this agreement, and we have been supplying our quota, or as much of our quota as the importing countries will buy. There is nothing to compel them to buy their quota. We have been selling our quota, or part of it, ever since the International Wheat Agreement was signed. I am of the opinion that Great Britain never had any intention of being a party to the International “Wheat Agreement.- It could be seen quite plainly that there was a tendency for the price of wheat on the international market to fall, and it was good business on the part of Great Britain not to sign, and, therefore, she stood out. That did not debar us from selling our wheat to England, as we have clone in the past, but not under the International Wheat Agreement. In my opinion, the agreement has some value, but not a great deal, because a publication produced by the Bureau of Agricultural Economics states that, in 1953-54, Australia sold only about 28,000,000 bushels, or 60 per cent, of its quota, under the agreement. The most important customers for Australia were -

The publication states that, in the current year, sales have been proceeding at a much faster rate, and there is every possibility that our quota for the current year will be much higher than previously was the case.

The point is that Great Britain did not see fit to enter the International Wheat Agreement because of the so-called high level of prices fixed by the countries that negotiated the scheme. The maximum price was 18s. 3d. a bushel, but honorable senators should not forget that there was a minimum of 13s. lOd. Since the collapse of the scheme, I doubt very much whether wheat has been sold in England at less than the minimum price provided in the agreement. Therefore, if Great Britain had entered into the agreement, it could have bought wheat just as cheaply as it is buying wheat now on the outside market. Therefore, Britain’s refusal to enter the scheme has not had the slightest bearing on the collapse of the wheat market, and it has no relation to the fact that we are unable to place all the wheat we can produce.

I believe that the proposed storage for Australian wheat is essential. I have studied the figures given by Senator Pearson, and I agree with him. We have not gone back, so far as our carry-over is concerned. The carry-over is approximately the same as it was at the end of 1954, and I do not despair about the possibility of an improvement in the wheat market as time passes. There are signs now of a better demand for wheat and increased consumption.

I agree with Senator Kennelly that we should explore all possible avenues for the marketing of wheat. I have no quarrel with his statement that we should sell wheat to China. I would sell wheat anywhere if the market were available and the nation concerned had the necessary currency to pay for it. The purpose of the bill is to provide money for emergency storage of wheat. Most of the money has been spent, the storage is almost complete and that is all there is to it. I commend the Government for transferring this project from a shortterm financial arrangement to a longterm one, and I believe that it will be completely satisfactory to the wheatgrowing industry.

Senator COOKE:
Western Australia

– I have listened with interest to the submissions of members of the Government and their supporters on this measure. Neither the Government nor the Opposition is complaining because it has become necessary to provide £3,500,000 to provide storage for surplus wheat. It must be done. The wheat is available. We cannot sell it or export it. On that point I have no quarrel with the Government myself, but I blame the Government for having neglected the situation too long. In complete contempt of the Parliament, the Minister for Commerce and Agriculture (Mr. McEwen) has not told honorable senators or honorable members in another place why this position has come about. He has not stated whether the Government proposes to do anything to correct the situation.

Senator Vincent:

– The Minister has made a very full statement on the matter.

Senator COOKE:

– The position has not been improved as a result of his statement or the submissions that have been made to-night in this chamber. The Government is barren of ideas in regard to the wheat-growing industry. Honorable senators on the Government side have suggested that the outlook is not so alarming. They appear to be fairly satisfied with the situation. They state that the cost of production has risen tremendously. They have stated that wages have risen, and that there is nothing in wheat-growing at the prices offering. They say they are losing money.

The fact is that the price the wheatgrowers are getting is a guaranteed price, but it is not the price at which the nation is selling its wheat. The industry has been stabilized, and fixed prices are paid to farmers under legislation introduced by the Chifley Labour Government and previous Labour governments. This Government is getting the benefit of what Labour governments have done.

I do not agree with honorable senators on both sides of the chamber who have stated that it will be easy to market our wheat. It will not be easy. The price of wheat was not the only factor in negotiations for an international wheat agreement. I agree that the price was an important factor, but this Government failed to provide for a reasonable continuation of the agreement. The previous Labour Government found that, in order to get an international agreement, it had to speak on equal terms with the United States of America, Canada, Great Britain and other nations of lesser importance in the matter of wheat production and consumption.

Supporters of this Government have claimed that they are opposed to restrictions. The Government of the United States of America controlled the acreage under wheat, and reduced it consistently. The result of negotiations was a balanced agreement. In addition to an agreement on prices, the countries concerned agreed to restrict acreages, plan world markets and provide an even flow of trade. Australia had further security in the arrangements to ship its wheat to markets where it would ultimately be sold. This Government had plenty of warning about the prospects for the marketing, of wheat, but it did nothing. That is in accordance with its policy of laisser-faire. It failed to take advantage of valuable national agreements, and allowed the shipping companies to hold this country to ransom in connexion with many commodities besides wheat. Because of the policy of the present Government, the cost of production has risen so much that we cannot sell our wheat at world parity prices, and cannot make the industry of wheat growing attractive. The Government foresees an accumulation of wheat, and while, like Micawb’er, it waits for something - perhaps a drought - to turn up it brings in a bill to provide for the storage of excess wheat in the hope that things will turn out all right. To say that under the original agreement, Great Britain agreed to pay 18s. a bushel for wheat is not sound reasoning. Either the Government is hypocritical, or it has not been sufficiently interested to analyse the position properly. In 1953, the Bureau of Agricultural Economics, which is associated with the Department of Commerce and Agriculture, issued a report on the wheat situation, which contained the following statement: -

During the four years of the 1949-53 agreement, an average of only 25 per cent, of Australia’s exports was sold on the free market. Under the new circumstances, if total exports remained at the same average level, about GO per cent, *ould require disposal at “ free “ market prices. This situation will assume more importance from the harvesting of the next crop onwards as the larger part of the 1952-53 exportable surplus had been disposed of before the beginning of August.

That was a warning, but the Government failed to do anything about it. There was a guaranteed price for 75 per cent, of Australia’s wheat production, and, in addition, there were assurances in regard to shipping and other matters. For some years, cither by the grace of God, or as the result of good fortune, we enjoyed good markets, and most of our wheat was disposed of. Later, only 40 per cent, of our wheat was disposed of under guarantee, so that 60 per cent, of the wheat exported had to be sold in the free market, at fluctuating prices. During that period, inflation raised the cost of production. Yet we are told that the outlook is bright ! I cannot see anything before us except a huge carry-over, with probably additional storage to be provided at further heavy coat. If we do not get better treatment from the shipping companies, which the Government and its followers support, our burdens will be increased. The experience of two wars has justified the policy of the Labour party, that shipping should be provided on a national basis to carry goods to and from this country. Not only has thE present Government failed to do anything in this field, but its inaction has retarded Australia’s development as a nation by at least a decade. Yet honorable senators opposite say that everything is all right. They say that, despite the fact that they do not know whether the wheat that will be harvested will be sold, and if sold, whether it can be moved. This bill seeks approval for the expenditure of £3,500,000 to store wheat for the weevils.

Senator Pearson:

– Nonsense !

Senator COOKE:

– That happened before. This Government has failed to discharge its responsibiilty.

I shall now refer to another matter which has been raised in this Senate on a number of occasions, but has received no attention on the part of the Government. We are losing the markets for our flour and other wheat products, with the result that flour mills are closing down and mill workers are being thrown out of work. Perhaps the fact that mill workers are without jobs does not worry the present Government, but that is not all. It is difficult for primary producers to obtain bran and pollard.

Senator Mattner:

– Surely the primary producer is entitled ‘ to something better than bran and pollard?

Senator COOKE:

– Some of the people whom honorable senators opposite claim to represent will not get much more than that if the present Government’s policy is continued. Notwithstanding scientific advances in many fields, our markets have dwindled because of this Government’s maladministration. Both exporters and importers are greatly concerned. There was a time when flour-milling in Australia was a flourishing industry, but that is not the position to-day. It may be argued that £3,500,000 will be well spent if used to provide bulk storage for wheat, but that is not the opinion of Senator Seward who put his case well. The honorable senator said something about not voting for the measure, but I cannot see that we can do otherwise than vote for it. As a representative of the primary producers of Western Australia, the honorable senator said, in effect, that this legislation is necessary.

The Minister should tell the Senate how the £3,500,000 to be expended under the authority of this measure will be allocated between the States. Western Australia has in operation a co-operative bulk-handling scheme which has worked well, provided market conditions have been reasonable while the wheat is stored awaiting shipment. In Western Australia there are silos which, under normal conditions, provide excellent service, whereas South Australia deals mostly in bagged wheat. The several States handle wheat differently - both wheat for export and wheat for home consumption. We are entitled to know the Government’s intention regarding the allocation of expenditure between the States, and to have some assurance that the Commonwealth will accept some responsibility for the handling of wheat on a national basis. We should not run the risk of being told that the disposal of the wheat is the responsibility of the State governments. The Senate is entitled to much more information than, so far, has been supplied.

Senator HENTY:
Tasmania

– I did not intend to deal with any matter other than Clause 3 of this measure, but in this debate honorable senators have been allowed to range rather widely, and I therefore desire to comment on some matters raised by honorable senators opposite and by some of my own colleagues. To-night, we have heard exhortations by some honorable senators to the effect that the acreage of wheat should be compulsorily restricted. It is amazing what short memories some people have. The last time the restriction of wheat acreage was mentioned in the Senate was when a bill, which had been introduced by Sir Earle Page, was being debated. Mr. Scully, the then Labour member for Gwydir, while speaking during that debate, said -

One of the most objectable features of the plan is the proposal to restrict the acreage to be sown next season. . . . The restrictions being imposed on the growers under this plan are intolerable, and should not be accepted. … I wonder whether the farmer will be supplied with a collar, and ordered to wear it round his neck. It is clear that the growers are to be at the mercy of the board. … I have yet to witness the successful operation of a wheat scheme under departmental supervision.

And, bless him, I agree with him. All that happened a short fourteen years ago, and now we have another recommendation before the Senate from honorable senators of the Opposition that we should again impose a plan for the compulsory restriction of wheat acreage. Let us look on this matter as a reasonble business proposition. Of course, none of us wants to see droughts here in Australia, but we have had nine or ten of the best season’s that the Commonwealth has ever seen and, according to the cycle of the seasons, we are sure to have droughts in the years to come. After this measure has been passed, there will be storage in this country for only two season’s supply of wheat for our own needs. Surely that is not too much.

I am sorry that Senator Cooke has not remained in the chamber to hear my criticism of his speech. He blamed the Government for something that it had not done. He made up a fairy tale, and then proceeded to attack the weak points in it. No honorable senator on this side of the chamber has ever suggested that the wheat position is particularly bright. Of course it is not. We have a lot of wheat to sell, but we should now learn the lesson that we cannot sell just whatever we want to produce. If we want to sell our goods in the markets of the world we must find out what the people of the world want, then grow the products that they require. After that, it is a comparatively simple matter to sell those products overseas. One honorable senator opposite said that as Canada could sell wheat to Great Britain, why should not Australia be able to do so. The simple answer is that Canada can sell wheat to Great Britain because it grows the particular kind of hard wheat that Great Britain wants. In order to get our markets back in the near north and the Near East, we must grow what the people of those areas want.

About fourteen years ago the Government restricted the wheat acreage, but only a year or two after that it was endeavouring to get people to grow more wheat. In fact every postage stamp bore the exortation, “ Grow more wheat “. But finally we had to import feed wheat from Argentina because of the stupid policy of restriction of wheat acreage. I suggest that with the greatest good faith Mr. Scully opposed the measure to restrict wheat production in this country, but after the Labour party attained office it controlled wheat-growing right through the war, and for many years after its conclusion.

I have a brother who went on the land after he returned from the war. He had a farm in New South Wales, but was not allowed to grow wheat on it because he had not grown wheat before the war. He had not grown wheat before the war because he had not been on the land before the war. I believe that a one-time member of this chamber, Senator Gibson, had a licence to grow wheat. He had 500 acres of his land prepared on one side of the road, but was given a licence to grow 500 acres of wheat on the other side of the road. He sowed the 500 prepared acres, and then the authorities refused to allow him to sell the wheat. He said, “Very well, I shall use it for pig feed “, but the authorities said, “ You cannot do that, either “. That is the sort of absurd thing that developed under the Labour Government’s restrictive policy.

Surely we have learned from experience that we cannot dictate to mother nature. The Labour Government tried to tell mother nature how to arrange the seasons, but mother nature said, in effect, “You haven’t any wheat now through your restrictive policy, and this year and next year you won’t get any wheat at all because of drought “. Mother nature won, and we had to import stock feed in the end. Let us learn from the lessons of history, and let us not consider that the restriction of wheat acreage is the only way to deal with the problem of wheat storage in this country. As a rule, Tasmanians do not talk much about wheat in the Parliament because very little wheat is grown in Tasmania. However, when we do grow it we get crops of 60 bushels to the acre, which is rauch more than anybody gets on the mainland. Moreover, we can fell every bit of our wheat for making biscuit flour in Sydney, and get a premium price- for it. This debate has been allowed to range widely over most aspects of the wheat industry, but I now desire to refer to clause 3 of the measure.

Senator Benn:

– We do not know anything about the wheat industry.

Senator HENTY:

– I am glad to hear Senator Benn say that, because he usually talks about those things that he knows nothing about. Clause 3 of the bill refers to the building of emergency wheat stores. I ask the Australian Wheat Board and the Government to consider the building of bulk wheat storages in Tasmania, because they are badly needed in that State. Both in Hobart and in Launceston, the flour millers are continually being faced with the position where they are down to their last bag of wheat and do not know whether the ship will arrive in time to enable them to continue production. If some of this money could be diverted for the purpose of providing wheat storage in Tasmania, as well as in the mainland States, it would be of great service.

At the moment, we in Tasmania can buy only bagged wheat. Consequently, we are restricted so far as quality is concerned.

Senator Mattner:

– Tasmania gets only the best quality from South Australia.

Senator HENTY:

– No, it is not always the best. If South Australia produces the best wheat, it must keep it there. It certainly does not send it to us. We are constantly in trouble because of the quality of the wheat we get for the manufacture of flour.

Senator Benn:

– Queensland has the same difficulty with Tasmanian potatoes.

Senator HENTY:

– The honorable senator is certainly talking about something of which he knows nothing now, because if he goes to the Queensland potato markets he will see bags of the best Brownell potatoes in the world, and they come from Tasmania. The Tasmanian baking trade has difficulty in obtaining a supply of good-quality wheat, and if we could get bulk storage of wheat we could ensure a steady supply of baking wheat.

Senator Kendall:

– Why do not the flour millers provide the storage? It is their job, not that of the Government.

Senator HENTY:

– Then why do not the flour millers do so in other States of the Commonwealth? I am asking that some of this money, which is to be spent on providing storage accommodation, should be made available for Tasmania. The Labour Government of Tasmania has been going to build wheat silos for umpteen years. It has sent people round the world to investigate silos in other countries, and each one has come back and made a report. Then somebody else has been sent. I think the Chief Secretary is now having a look at more silos overseas. Why should not some of this money be used to help the Tasmanian Labour Government to provide bulk storage in Tasmania ?

Senator Benn:

– That is the most absurd proposition ever put to this Senate.

Senator HENTY:

– I can well understand such an interjection from a Queenslander. I represent Tasmania, and 1 propose to put Tasmania’s case. Whether or not the honorable senator thinks it is absurd for me to do so, does not interest me.

Whatever else we do, surely, at this stage of our history, we are not going to adopt the defeatist attitude of suggesting that the only remedy for the wheat crisis is restriction of acreage and all the stupidity that went with such action during the years of Labour governments in the federal sphere. We have been challenged over and over again by the Opposition on the ground that we believe in laisser-faire, and in doing away with controls. Of course, we do ! That is what we stand for and what we believe in. The people put us here in 1949 because they were fed up to the teeth with the restriction of wheat acreage and other controls. While the members of the Opposition stick to this silly socialism, which is against the wishes of the Australian people, this Government will remain in office, and honorable senators opposite will still have to do their best to find something to talk about.

Senator ARMSTRONG:
New South Wales

– I hope that the few words I wish to say will be on a higher level than those to which we have listened during the last quarter of an hour. I want to say something constructive. This bill is before the Parliament because of the failure of the Government to sell wheat - nothing more, nothing less. Because of that, we have to spend £3,500,000 on the erection of bulk storage to accommodate the carry-over wheat. The Government, at a very late stage of its career, has at last realized that, if we wish to sell merchandise, we have to engage in a business. Merchandise cannot be sold unless definite efforts are made to package it and present it in such a way that the people who have the money to buy it will do so.

During the last few months, the Government has begun to awaken from its torpor, and it has made available £267,000 for advertising our primary products in other parts of the world. That is a worthwhile step, and I congratulate the Government on having made it, but of course it is only the first feeble step. Already, reports from the United Kingdom indicate that the results of this advertising campaign are very good. This should be merely the beginning of a virile campaign throughout the world. The provision of £267,000 is only a small beginning.

After all, in terms of world wheat production, Australia is a relatively small producer. Some interesting figures which I have before me indicate that Italy, France, India and the Argentine are substantially greater wheat-producing countries than is Australia. It perhaps needs a little less effort to sell our wheat than is the case with the other great wheat-producing countries. I should think that an advertising campaign which was planned to boost the qualities of Australian flour would have worthwhile results. That is being shown in respect of other Australian primary production sold throughout the world. Advertising is just as important to Australia as a country as it is to companies such as the Colgate-Palmolive Proprietary Limited. Proper advertising might well get the results that orderly marketing, in the last year or two. has failed to get us. The Department of Commerce and Agriculture has taken an important step, but it does not properly touch the problem. The department is expanding its trade commissioner service, and that is important if the right persons can be obtained. There is no reason why they should not be, because advertisements have been inserted in the press throughout Australia and hundreds of applications have been received from men with most diverse backgrounds, who are eager to work for Australia as trade commissioners overseas.

I bring to the notice of the Senate a country which is importing its supplies of wheat from Turkey, the United States of America and Canada, and I am confident that if Australia had a trade commissioner there, a good market for Australian wheat could be established. I refer to Spain. According to statistics, the per capita consumption of bread in Spain is higher than in almost any other country. The standard of living is low, and the people depend primarily on bread. Research has shown that, as the standard of living in a country rises, the people individually eat less bread. For a long time, Spain has been socially and economically depressed, but it is emerging from that depression. Under a loan arrangement with the United States, a substantial number of dollars has been made available. Spain sent a representative to Australia with the idea of establishing diplomatic relations with this country, but the Government would not even appoint a trade commissioner to Spain, and we have been unable to do any business by selling our wheat. Spain has turned to Turkey to obtain supplies. Its local production of wheat is almost as large as that of Australia, but because the population is greater so is the consumption. It is most important at this time, when Australia cannot sell her wheat, to search the world for customers, and where there is a likely market it should be exploited. Australia cannot expect to sell wheat in Spain through the agency of the British ambassador ; I could not imagine anybody less interested. I have tried to make a constructive suggestion, because these facts about Spain have been brought to my knowledge.

There must be many other countries needing wheat, and buying it on the world’s markets. They would possibly buy Australian wheat if it were properly advertised and pushed by efficient trade representation. We must advertise our goods if we want to sell them. In the old days, it was part of the duty of the Department of Commerce and Agriculture to apportion the Australian export wheat supply among various countries. Years ago, I asked the department to supply wheat to one of the South American countries but nothing was done. There seemed to be no ambition to sell to a new customer. All the available wheat was being placed, and a potential new consumer did not have a chance because it was not on the list. It was a sellers’ market then, and it would be easier to get into heaven than to persuade the department to sell to a new customer. I am glad that the approach of the department is now different. Australia must send its trade representatives to all parts of the world where possible consumers may be found, and by good salesmanship, sell Australian wheat.

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

in reply - I am charged with the responsibility of piloting through the Senate a bill which provides for an advance of £3,500,000. The proposal in the bill has been approved by the State Premiers, and Senator McKenna said that it had the support of the Opposition in this chamber. I thought that I should have a comparatively simple task in replying, but the fact that the debate has proceeded since 4- o’clock this afternoon is an indication of the widespread interest in the wheat industry. Honorable senators have dealt with subjects far afield from the immediate provisions of the bill, and have covered almost all aspects of the wheat-growing industry.

I do not propose to reply to all the arguments that have been advanced, nor do I feel myself competent to make declarations of Government policy on the various questions that have been addressed to me. I should like to deal with some of the general matters raised. To use a vernacular expression, the wheat industry at the moment is “ batting on a sticky wicket “. At the beginning of this year

Canada, the Argentine, the United States of America and Australia - the four major wheat-exporting countries - had a total carry-over of 629,000,000 bushels, or approximately two years’ supply. Some honorable senators have been illogical when trying to state the causes of this situation, and remedies for it. The main cause has been a succession of years of high production, particularly in North America and in all the wheat-growing countries. Added to that, wheatimporting countries have themselves had a higher wheat production. Rice production in Asian countries has increased, and as inevitably happens in such circumstances there has been timid, handtomouth buying on the part of purchasers, who are looking for a weakening of the market.

At once I wish to repudiate the approach of Senator Kennelly to this matter. He sang the theme song that all things can be dealt with by price control, and if only that were instituted, all would be well in this best of all worlds. Australian wheat is the cheapest of any from the four major exporting countries. The case that Senator Kennelly tried to make concerning Australia’s difficulties has no basis. He suggested that the price of Australian wheat was high. During his speech on the budget, he suggested that the way to get rid of Australian stocks of wheat was to reduce the price. In a world which has surplus stocks of wheat, for one of the major exporting countries to begin a price-cutting campaign would produce consequences that would be felt, most keenly by the wheat-farmers of Australia, and possibly throughout the world as well. Commodity markets could be undermined and destroyed. In all these things there is always the thrust and parry of debate, but we should approach certain matters with some degree of responsibility. I charge Senator Kennelly with irresponsibility in his approach, irresponsibility in attributing the present situation to the high cost structure in Australia when, in fact, our wheat is cheaper than that of any other country. He was completely irresponsible in a previous speech when he suggested that the cure for the situation was for Australia to commence a price-cutting war in the sale of wheat throughout the world. What we have to hope for is that in this temporary phase the price of wheat will be maintained and, as a result, the prosperity of the wheatfanner in Australia and in other countries will be maintained.

In discussing this problem, in criticizing the Government and demanding that it say what it proposes to do, it is necessary to go back to the foundation of the wheat arrangements in Australia. That foundation is that the sale of wheat in and outside of Australia is under the control of the Australian Wheat Board, the majority of whose members are representatives of the wheat-farmers. The wheat-farmer grows the wheat and owns the wheat, and his association controls the selling of the wheat. With the greatest of respect to those who hold a contrary view, that is a very good arrangement. The people who own the product have the care and responsibility for it and they can ensure that the best precautions are taken and that all transactions are approached in a keen and businesslike way so that they can feel satisfied that the best results will be achieved. That is the foundation of the wheat industry and when honorable senators opposite ask, “ What is the Government doing?” and “What does the Government propose to do ? “ the answer is, “ There is the growers’ organization and alongside that organization stands a sympathetic government that will extend to it every assistance in every reasonable way. And in that Government is, perhaps, the most knowledgeable Minister for Commerce’ and Agriculture who has graced the treasury bench in Australia, a man in whom the wheat industry has implicit confidence and of whom it has expressed appreciation “.

Senator Kennelly, most inaccurately, accused the Government that it missed the market on the International Wheat Agreement. I wish the honorable senator were present so that he could listen to my reply. The fact is that next to the Australian Wheat Board is the Wheat Growers Federation, which is an association of growers. This association advises the Government; and it was upon its advice that all moves were made in regard to the International Wheat Agreement. It is true that the Australian Govern ment made the actual decision; but the decision was, in effect, that of the wheatgrowers of Australia.

I shall now reply as briefly as I can to some of the points made by the Leader of the Opposition (Senator McKenna) and other speakers. The Leader of the Opposition was not quite accurate in his statement that the Government was drawing on its share of the loan moneys for the first time for many years. The circumstances were that this was not a case in which the Government drew on its 20 per cent, share of loan money. I remind the Leader of the Opposition that the Federal Government can have recourse to that 20 per cent, only if there is disagreement between the members of the Australian Loan Council. The Government is not automatically entitled to take 20 per cent, of loan moneys but can exercise that right only if the members of the Australian Loan Council do not agree upon the way in which the money shall be apportioned between the various governments. What happened this year was that the loan raisings were fixed at £190,000,000, which was apportioned between the various governments. This Government was apportioned £33,200,000 for housing. After that was done this matter of finance for wheat storage arose. The loan money had been apportioned and the Australian Loan Council decided that the additional £3,500,000 should be obtained on loan and that that amount should be added to the Commonwealth’s share of loan moneys. It is rather more than a fine point; there is substance in it, because it. is an allocation by the Australian Loan Council as between the various governments, and not a matter of this Government exercising a right to take a proportion of the loan money and use it as it decided. The Australian Loan Council decided that the loan raisings should be used in a certain way and that this amount should be added to the Commonwealth’s share.

That is not as important as the very interesting views expressed by the Leader of the Opposition on this point. He expressed approbation of the Government’s action in taking its share of loan money and using it as it thought fit. That is a very interesting point, but I remind the honorable senator that from that flows the implication that he would advocate the Federal Government appropriating for its own purposes portion of the loan raisings, and that carries in its train the further result that he would advocate that the share to go to the State governments should be reduced. One can only get 100 per cent, from the whole. If the Commonwealth takes a proportion of the loan money and uses it as it thinks fit, then the share available to the States must automatically be reduced to that degree. I suggest that the Leader of the Opposition would have difficulty in selling that policy to his colleagues who are Labour Premiers.

Then, the Leader of the Opposition said that no indication had been given of the terms and conditions under which the money will be made available. Again, I go back to the principle involved. This i3 a case of the Commonwealth lending to the Australian Wheat Board, which represents the wheat-growers. All that has been done at this stage is that there is a general agreement that the wheat board will borrow the money and repay it over twenty years. The actual terms and conditions have not as yet been finalized. I think it fair to say that the Australian Wheat Board, representing the growers, can be trusted to bargain so as to obtain from the Treasurer arrangements which are satisfactory to it. The Leader of the Opposition also inquired as to which pools are to pay the costs. The answer is that this has relation to the ordinary administrative costs of the board. The administrative costs are distributed year by year, pool by pool, and each pool will bear its share of the costs. As one honorable senator has said, these are unusual circumstances. The wheat storage facilities are usually owned bv the State governments. In New South Wales and Victoria the State governments own the silos and other storage facilities, for which the Australian Wheat Board pays the charges. In Western Australia the storage facilities are owned by a growers’ co-operative society. The transaction proposed in this bill is a departure from those methods. I think the history of tha matter is that the wheat board asked the State governments to provide storage facilities. Those governments said that they were unable to do so, and the Aus tralian Government came to the rescue and provided the finance so that the board could arrange for the provision of such facilities. The State governments, at the Australian Loan Council, were consenting parties to those arrangements.

I think that I have answered most of the questions that have been raised. 1 want to say to my colleague, Senator Seward, that most of his complaints should have been addressed to the Government of Western Australia, and not to the. Australian Government. Senator Seward complained that the grower has been subject to additional costs because the storage space was not made available, or because it was made available in a somewhat remote area. That matter is within the control of the Western Australian Government, which is primarily responsible for such things in that State. In all other States the State governments own the storage facilities. I think that Western Australia is the only exception to that rule. Much as I regret that. Senator Seward is not completely in favour of the bill, I put the point of view to him that this proposed transaction merely means that the Australian Government will come to the assistance of the wheat-growing industry and will lend money upon reasonable terms and conditions for the provision of storage facilities which, normally, are provided by the State governments.

Question resolved in the affirmative..

Bill read a second time.

In committee:

Clauses 1 to 5 agreed to.

Clause 6 (Treasurer may make advances to Australian Wheat Board).

Senator McKENNA (Tasmania - Leader of the Opposition) [10.25J. - I would like the Minister to consider this proposition : While it may be argued that the wheat-growers of Australia are largely looking after their own product and carrying their own burdens, it is true that the Government has come to their aid to a very considerable degree, not only by guaranteeing the initial advance of 10s. 4d. a bushel, but also by guaranteeing this loan of £3,500,000. I put this question to the Minister, and I would ask him to deal with it in due course: While stabilization is established at present for a period of three years only, it is conceivable that at the end of that time, or at any time in the subsequent twenty years, the wheat-growers may decide against a stabilization scheme. In that event, would the Australian Wheat Board be largely without assets, apart from the wheat storage facilities that are being built under this scheme, and might the Commonwealth eventually have to depend only on the realization of that asset to get it out of difficulty in respect of its guarantee of £3,500,000 ? When the Commonwealth in that way, as well as in other ways, is giving substantial assistance to wheat-growers, we might as well face the fact that it is taking a real risk, and might eventually be compelled to look to the security of those emergency storage facilities to get itself out of difficulty under the guarantee.

The other matters to which I wish to advert are three in number. The Minister indicated that the terms of repayment between the Australian Wheat Board and the Government have not- yet been determined. I am surprised at that answer, although, of course, I accept it. I should have thought that those terms and conditions would have been determined when the Commonwealth decided to enter into this commitment. I would like the Minister to comment on that and on two other aspects.

The Minister announced in his secondreading speech that it had been agreed that the States had an option to take over the wheat storage facilities at their depreciated value, depreciation taking place over a period of twenty years. We have heard from a well-informed senator that these structures will have a life of at least 50 years. That honorable senator pointed out, if I remember correctly, that the structures have a concrete base of 12 feet or 15 feet and that they are constructed of steel and aluminium. In other words they are structures of real substance, which might be expected to endure for at least 50 years. The question that I am posing is this: Upon what basis of depreciation is the sale to take place to the States in the event of their exercising the option? If repayment are to be made over a period of twenty years, will the purchase price be merely the amount outstanding and unrepaid or will the proper depreciated value of the buildings be the basis, having regard to their physical condition?

Senator Wright:

– The honorable senator is a pretty harsh mortgagee, is he not ?

Senator McKENNA:

No ; this if plain, ordinary business. There are the two alternatives, and I am asking the Minister what basis has been agreed. I am using his own word there. He said that an option has been given, that it has been agreed. If there is an agreement, what is the basis of it? It should be a simple matter to answer that question. The question I pose is simply this : How is the value to be determined in the event of the option being exercised?

The third matter upon which I would ask the Minister to comment, is this: The suggestion has been made by one of the Minister’s own supporters that these structures will endure for at least 50 years. Why, in those circumstances, has a period of twenty years been selected as the period for amortization or depreciation ?

Consideration interrupted.

page 225

ADJOURNMENT

The TEMPORARY CHARIMAN (Senator McCallum). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Chairman do now leave the chair and report to the Senate.

Question resolved in the negative.

page 225

LOAN (EMERGENCY WHEAT STORAGE) BILL 1955

In committee: Consideration resumed.

Senator McKENNA:

– I ask the Minister to comment upon the durability of the structures. I should also like him to comment upon another point. If the Australian Government borrows on the open market under the financial agreement, it will have 53 years to effect repayment. If the structures have a physical life of 50 years, why should it impose a tight mortgagee arrangement on the Australian Wheat Board to repay the money in twenty years? If the answer is that the buildings will be finished as a physical proposition, in twenty years, I have no argument to offer and no further interest in the point. But if, as has been suggested they are likely to endure for 50 years, why should not the Government extend to the board and, through it, to the wheat-growers, the long terms available to it under the financial agreement? Why should it hold the board to a tight arrangement of twenty years ?

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

. - The first question asked by the Leader of the Opposition (Senator McKenna) relates to the suggestion that the limited life of the Australian Wheat Board may result in the Australian Government having a somewhat weak security. A fair reply would be that that is correct, but it also might be fair to add a rider that it is rather a theoretical proposition. If the board were to go out of existence, it must do so in some legal fashion. Therefore, it would have a legal obligation to discharge its liabilities before it could fully distribute its assets. If the board went out of existence, some practical arrangement would be made, and the Commonwealth’s security would not be impaired. Some incoming authority, or the State government concerned would purchase the asset. The Commonwealth’s position is that of a mortgagee and it has the right, as a mortgagee, to see that adequate arrangements are made. I am informed that the terms of the repayments have not yet been determined.

Senator McKenna:

– I accepted that fact.

Senator SPOONER:

– If the Leader of the Opposition agrees that the terms of repayment have not yet been determined, that rather conflicts with the next question asked by him as to whether the States have the right to take over the silos for wheat storage. There must be a series of understandings and, apparently, they have not yet been finalized. I stated in the course of my second-reading speech that the States are authorized to take over the silos. Legal ownership of them is not vested in the Australian Government but in the Australian Wheat Board. Therefore, if they are to be taken over, they cannot be taken over from the Australian Government, but from the board. Manifestly, there must be a background to this arrangement, but I have not all the details.

Senator Wright:

– Have not the States the right to take over the loan from the board and become the mortgagees?

Senator SPOONER:

– I do not read the provisions that way. As I read them, the States have the right to take over the storage at the written-down value at the time of the transaction. I read them to mean that the States have the right to take over the physical assets. The bill is silent on the point. The only information is that contained in the secondreading speech. I am instructed that there is an understanding that the board will sell the silos to the States if the States desire to acquire them at the written-down value at the time of the transaction. I think that can be understood because, in most of the States, the normal thing is for the State itself to own the assets. In reply to the third question put by the Leader of the Opposition, I am told that the opinion of the various parties interested was that the average life of. the structures would be fairly estimated at twenty years. The repayments were arranged on that basis.

Senator McKENNA:
TasmaniaLeader of the Opposition

– I thank the Minister for National Development (Senator Spooner) for his replies to my questions. They do not give me all the information I want, but I leave them at that and pose one further question. The comment has been made that storage facilities generally in the States have been erected to fit in with existing State storage facilities. In whom is vested the freehold of the land on which the structures are erected ? Do the States own the land or is it owned by the Australian Government? An interesting point is involved. If the State concerned owns the land and the Commonwealth has put buildings on it, the buildings are immediately vested in the State and, clearly, the Commonwealth should have made an arrangement to meet the position.

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

– The structures were built by State authorities upon State land, it being agreed on the part of the States that they would give title, lease, assignment or some legal authority of that nature to the Australian Wheat Board. I do not know whether the agreement is in perpetuity or for a long period of years. Whatever may be the intricacies of the present situation - and they are probably incomprehensible to a layman - the main fact is that the point has been covered between the State governments concerned, the Australian Wheat Board and the Australian Government.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I thank the Minister for National Development (Senator Spooner). I should have been astonished if there had not been an agreement in connexion with structures erected on State land. I quite appreciate the value of the Minister’s reply, and the wisdom of the Australian Government in entering into such an agreement. The

States would obtain an option to buy at the depreciated value under some agreement. I could not imagine an agreement covering that matter wholly omitting a clause dealing with the option to purchase. Now that we have established that there is such an agreement, can the Minister tell me what is the basis of depreciation? Does the depreciation take place on the basis of repayments over a period of twenty years, or is the physical condition of the buildings to be taken into account at all?

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

– Buildings will be depreciated 5 per cent. each year. The States will have the right to take them over at any time, in their written-down value.

Senator McKenna:

– Depreciation will be at the rate of 5 per cent, per annum

Senator SPOONER:

– Yes.

Clause agreed to.

Clauses 7 and 8 agreed to.

Title agreed to.

Bill reported without amendment : report adopted.

Bill read a third time.

Senate adjourned at 10.43 p.m.

Cite as: Australia, Senate, Debates, 20 September 1955, viewed 22 October 2017, <http://historichansard.net/senate/1955/19550920_senate_21_s6/>.