1940-08-07 15 2 2 REPS 246 0 House of Representatives. 1940-08-07 Mr. SPEAKER (Hon. 6. J. Bell) took the chair at 3 p.m., and read prayers. 246 Questions 246 246 F4U 0 0 FORDE, Francis Michael Mr FORDE - Can the Prime Minister say whether there is any foundation for the rumour in the lobbies that the Government intends to adjourn Parliament at the end of this week with a view to holding the general elections at the end of August? 246 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - I can only answer that the possibilities of an election have not been entirely absent from the mind of the Government. 246 246 JOM 0 0 BEASLEY, John Mr BEASLEY - In view of the developments overseas, will the Minister for External Affairs allay the fear that Australia is not exercising sufficient influence in the formation of Empire foreign policy, particularly in matters relating to the Far East, by giving an assurance that Australia is not merely following blindly the decisions made at Downing-street? 246 009MB CP 0 0 MCEWEN, John Mr McEWEN - Happily, I am able to give to the honorable member, and to the House, the most explicit assurance not only that Australia is constantly and intimately in consultation with the United Kingdom Government and the governments of the other Dominions which are concerned, but also that there is ample and recurring evidence that Australia's opinions weigh heavily and effect decisions made. 246 246 KRE 0 0 SHEEHAN, Thomas Mr SHEEHAN - Has the Minister for the Army been informed that the call-up of the various age groups of compulsory military trainees covers large numbers of pupils at aeronautical engineering schools, and will interfere with their studies, which are primarily designed to fit them for defence activities? Will the Minister take such action as will ensure that these students shall be exempted from the obligation to render compulsory military service? 246 KVN UAP 1 0 STREET, Geoffrey Mr STREET - If the individual* referred to are engaged in reserved occupations, they will automatically be exempted from the compulsory provisions of the Defence Act. If not, and there are special circumstances surrounding their training, which would warrant their exemption, I guarantee to investigate their cases with a view to having these men released from the obligation to render military service. 246 246 KLC 0 0 MAHONEY, Gerald Mr MAHONEY - Can the Minister for Commerce make a statement to the House regarding the stage which has been reached in connexion with the proposal to build ships at Hobart? 246 JTY CP 0 0 CAMERON, Archie Mr ARCHIE CAMERON Certain interviews have taken place between the people at Hobart who are interested in that aspect of the industry and the Engineer Rear Admiral of the Navy Department. At the moment we are awaiting replies from the people at Hobart as to the next move to be taken. 246 246 K0K 0 0 CONELAN, William Mr CONELAN - In view of the position in the Far East, can the Minister for the Army say what steps have been taken by the Government to protect from aerial attack the petrol tanks in various parts of Australia which are so openly situated as to invite attack by an enemy? 246 KVN UAP 1 0 STREET, Geoffrey Mr STREET - A considered reply to the honorable member's question would take a great deal more time than I should be allowed, but, replying broadly to it, I can say that ample steps are being taken by the Government .to deal with the possibility which the honorable gentleman somewhat pessimistically envisaged. 246 246 KJQ 0 0 JAMES, Rowland Mr JAMES - Is the Minister for Supply and Development still of the same opinion as when he compiled a report, following his visit to England and the Continent, of Europe, regarding the extraction of oil from coal, in which he said that it was as much a commercial proposition as was the manufacture of guns and munitions? If so, will he give to the company operating at Baerami, or any other company which is prepared to extract oil from coal or shale, assistance similar to that which was given to the company operating at Newnes? 247 KV7 UAP 1 0 STEWART, Frederick Sir FREDERICK STEWART - The honorable member's question relates to a matter of Government policy, and it is not usual to announce the Government's policy in response to questions without notice. 247 247 JNX 0 0 BARNARD, Herbert Mr BARNARD - I understand that men on the reserve list for service 'with the Royal Australian Air Force have already been provided with badges. Can the Minister for the Navy say whether badges will also be provided for men who are on the waiting list for service with the Navy? 247 JTY CP 0 0 CAMERON, Archie Mr ARCHIE CAMERON - The matter referred to by the honorable member is receiving attention. 247 247 KHL 0 0 HOLLOWAY, Edward Mr HOLLOWAY - Has the Minister for Supply and Development, or his department, yet had time to canvass the possibilities of employing partially crippled persons as process workers in munition establishments and other engineering works? 247 KV7 UAP 1 0 STEWART, Frederick Sir FREDERICK STEWART - The section of the factories to which the honorable gentleman's question refers is no longer under the control of the Department of Supply and Development, but I can inform the honorable member that, during the period of my control of that activity, I consulted freely with those v ho were responsible for the engaging of staff as to the possibility of finding some place in our industrial economy for partially crippled people. 247 247 JTY CP 0 0 CAMERON, Archie Mr ARCHIE CAMERON I am now able to inform the honorable member for Lang (Mr. Mulcahy)that the rate of interest on advances made from the No. 2 Wheat Pool which formerly was 3^- per cent, was reduced to 3^ per cent, as from the 1st July, 1940. 247 247 L08 0 0 ROSEVEAR, John Mr ROSEVEAR - On the 21st June last I questioned the Minister for Supply and Development concerning a statement by Mr. Storey, Assistant Director of Aircraft Construction at Chullora, to the effect that 33 per cent, of the parts were missing from bombers that were being brought to Australia for assembling. The honorable gentleman promised u» make an inquiry into the subject and inform me of the result. Has he made that inquiry, and can he tell me whether the statement is true or otherwise? 247 KV7 UAP 1 0 STEWART, Frederick Sir FREDERICK STEWART - As I indicated a moment ago, the manufacture of munitions, which includes aircraft construction, is no longer under the control of the Department of Supply and Development. I understand that in a report which was published only this week by Mr. Essington Lewis, the Director-General of Munitions, reference was made to the subject referred to by the honorable member. Later : 247 L08 0 0 ROSEVEAR, John Mr ROSEVEAR - In view of the very serious statements made by Mr. Storey regarding the shortage of parts for bombers imported into Australia, does the Minister for Supply and Development consider that he has carried out the promise given on the 21st June last by saying that the responsibility now rests on Mr. Essington Lewis? If so, will the Minister suggest how it is possible for information to be secured in this House from Mr. Essington Lewi?, who is not a member of this Parliament* 247 KV7 UAP 1 0 STEWART, Frederick Sir FREDERICK STEWART - I shall refer the honorable member's question to the Minister for Munitions in order that a reply may be furnished. 247 247 KYC 0 0 POLLARD, Reginald Mr POLLARD - Will the Minister for Commerce inform me how mud. longer it will take him to make a reply to representations submitted to him ou hp 23rd July last by the Melbourne Wool Merchants Association? 248 JTY CP 0 0 CAMERON, Archie Mr ARCHIE CAMERON - I have no doubt that both the honorable member and myself have considerable regard for the cardinal virtue of patience. I shall do my best in the matter. 248 248 K9A 0 0 GANDER, Joseph Mr GANDER - I ask the Prime Minister whether his attention has been drawn to an apparently authentic announcement in the Sydney Daily Tehgraph to the effect that the Chief Justice of Australia, Sir John Latham, intends to leave the High Court Bench in order to become Australian Ambassador to Japan? "Will the Prime Minister confirm or deny that statement? 248 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - The reply to the first part of the honorable gentleman's question is " Yes ", and to the second part of it, " No ". 248 248 KF9 0 0 GREEN, Albert Mr GREEN - I ask the Minister for Commerce whether it is correctly rumoured that the Government has made arrangements to afford interim relief in the form of recoverable loans to employers in New Guinea and Papua, other than companies, engaged in planting who notify in writing that they are unable to meet their obligations? Is it proposed, under this form of relief, that the Administration shall advance money to pay the current wages of native labourers and also to pay off time-expired labourers, and to pay the cost of their sustenance pending repatriation and also of their repatriation? Is it proposed that licences essential to the operation of plantations shall be issued without payment in cash of the essential fees, and that the fees shall be debited to the persons concerned? .Is it also proposed that advances shall be made to cover premiums on securities which are obtained in respect of licences issued under the explosives ordinance? 248 JTY CP 0 0 CAMERON, Archie Mr ARCHIE CAMERON - That matter is under the control of the Minister in Charge of External Territories (Mr. Nock), who is not present at to-day's sittings. I assure the honorable member that the whole matter is receiving the attention of the Government. The difficulties have been brought about by the unfortunate position of the copra industry in Papua and New Guinea as the result of the happenings of the last few months. 248 248 KK7 0 0 JENNINGS, John Mr JENNINGS - In view of a statement that has been attributed to the. Chief Secretary of the Government of New South Wales that the granting of the Eight Hours Day holiday in New South Wales this year is dependent upon the attitude adopted by lie Commonwealth Government, I ask the Prime Minister whether this matter is subject to control by the Commonwealth Government or the State authorities? 248 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - It is a matter which falls within the jurisdiction of the State Government. 248 248 KZX FLP; ALP from 1936 0 0 LAWSON, George Mr GEORGE LAWSON - As I understand that although the members of the waterside workers' organization were anxious to interview the Attorney-General by deputation during his recent visit to Brisbane, but were not able to do so, I ask the right honorable gentleman whether the Government has finally considered the report of the honorable member for Macquarie (Mr. John Lawson) upon the working conditions of waterside workers? If so, does the Government intend to suspend the application of the Transport Workers Act to ports at Brisbane and elsewhere in Queensland as was recommended in that report? 248 DQC UAP 1 0 HUGHES, William Morris Mr HUGHES - The honorable gentleman is in error in supposing that I did not see the representative of the waterside workers while I was in Brisbane. I saw representatives of the employers and also the secretary of the union. The suspension of the operations of the Transport Workers Act, is, as I have said on other occasions, receiving consideration by the Government, but no decision has yet been reached in relation to the ports of Queensland. 249 249 C7E 0 0 PAGE, Earle Sir EARLE PAGE - Is the Prime Minister able to inform honorable members on which days Parliament is likely to meet for the remainder of this week, and during next week? 249 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - It is proposed that the House shall meet to-morrow morning but not on Friday of this week, and I have in mind that it will meet on Wednesday, Thursday and Friday of next week. 249 KLC 0 0 MAHONEY, Gerald Mr Mahoney - Why not come back on Tuesday? 249 N76 0 0 MENZIES, Robert Mr MENZIES - I shall be here on Tuesday. Will the honorable member for Denison (Mr. Mahoney) be staying here over the week-end? 249 KLC 0 0 MAHONEY, Gerald Mr Mahoney - I have got to stop here. I cannot go home. 249 N76 0 0 MENZIES, Robert Mr MENZIES - No doubt we all shall miss the honorable member after the next election. 249 KLC 0 0 MAHONEY, Gerald Mr Mahoney - I rise to order. I resent the remark of the Prime Minister that I shall not be missed after the next election. 249 N76 0 0 MENZIES, Robert Mr MENZIES - I said that the honorable member would be missed. 249 KLC 0 0 MAHONEY, Gerald Mr Mahoney - Why does not the Prime Minister play the game? 249 10000 0 0 BELL, George Mr SPEAKER (Hon G J Bell Order ! The honorable member for Denison must resume his seat. 249 N76 0 0 MENZIES, Robert Mr MENZIES - I regret it if I have said anything offensive to the honorable member. Had I said that he would not be missed, that would be offensive. What I said was that he would be missed. 249 miscellaneous Motion (by Mr. Menzies) proposed - That the House, at its rising, adjourn until 10.30 a.m. to-morrow. 249 009FQ Fremantle Leader of the Opposition 0 0 CURTIN, John Mr CURTIN . - The object of the motion is, of course, to provide that Parliament shall meet to-morrow morning but not meet on Friday, and the Prime Minister (Mr. Menzies) has intimated that he expects that the first meeting of the House next week will be on Wednesday. I wish to make clear the position of the Opposition. We are in entire agreement that the Government should be given the utmost facility to conduct its business. If it needs the week-end to prepare business for submission to Parliament, it is; perfectly fair and proper that parliamentary arrangements shall be such as will convenience it. But there must be some definiteness about this business. I take it that when the Prime Minister says that he has in mind that the House shall meet on Wednesday of next week, he intends that the House shall meet on that day. 249 N76 0 0 MENZIES, Robert Mr Menzies - -What is the apprehension of the honorable Leader of the Opposition ? 249 009FQ 0 0 CURTIN, John Mr CURTIN - There is no apprehension. There is, however, an obligation on the members of this Parliament who have been called together in pursuance of their own resolution on a given date to deal with matters that appear on the notice-paper. I have in mind, in particular, a bill which is an essential part of the Government's financial policy for the conduct of the war. This particular bill was referred to in the budget, but the proposal has not yet been passed into law. The right honorable gentlemen will perhaps recollect that on the day when the House decided to adjourn until yesterday's date, I asked the Treasurer (Mr. Spender) whether the failure of the Government to put this bill through the Parliament before the adjournment would affect the amount of revenue which he expected to be collected in this financial year pursuant to its provisions. The honorable gentleman said that it would not affect the amount of revenue which he anticipated collecting by that tax. He said that representations had been made that the incidence of the tax should be reconsidered and that for that reason the matter was being held over until the next period of the session. The bill should be dealt with before this Parliament re-arranges its sittings in such a way as to permit the termination of the Parliament without the bill being passed. That is what I have in mind. The other taxes affecting individuals, either directly or indirectly, which were outlined in the budget, have been considered by the Parliament; but the company tax has not yet been completely dealt with. I think it is fair to say that the general support for the financial programme which the Treasurer outlined in the Budget was related to the fact that the company tax was an essential part of the whole programme. I think it was implicit in the statement of the Treasurer that that tax would be made law. I submit that it is fair and proper that the taxation proposed to be levied in order to finance the war, as introduced by the Treasurer, and as approved by the Parliament, should be completely carried insofar as its mechanics are concerned. 250 N76 0 0 MENZIES, Robert Mr Menzies - We shall be ready to proceed with the bill immediately after dinner to-day. 250 009FQ 0 0 CURTIN, John Mr CURTIN - I take it that we shall also be given an opportunity to review the very important statement of the Minister for Commerce (Mr. Archie Cameron) last night, and also to complete the consideration of the important statement made by the Minister for External Affairs (Mr. McEwen). I am not humbugging myself; I merely wish to know whether it is intended to deal with the matters on the notice-paper and, whether I may go on making my own arrangements as Leader of the Opposition in the knowledge that this Parliament will assemble on Wednesday next? If the right honorable gentleman is agreeable to that I am quite content. 250 N76 0 0 MENZIES, Robert Mr Menzies - Is the honorable member suggesting that we should meet on Tuesday? I am prepared to consider that. 250 009FQ 0 0 CURTIN, John Mr CURTIN - My answer to that is that I am quite agreeable to the Parliament meeting regularly and on such days during each week as are found by the Government to bemost convenient in order to enable it to submit its measures for the consideration of the Parliament. I have no finicky objection to Wednesday which would disappear if Tuesday were suggested. That is a matter on which I offer no criticism at all. I merely say that if the right honorable gentleman says that Parliament will meet on Wednesday, I take it that he means Wednesday, Thursday and Friday of next week, and, in any event, he means not so much absolute adherence to the notice-paper as the assurance that Parliament will deal with the company tax which is on the notice-paper, that the Parliament will be given an opportunity to complete its consideration of the statement made by the Minister for External Affairs and also reasonable opportunity to deal with the tremendously important statement which the Minister for Commerce was given leave to make last night. The debate on international affairs was interrupted last night in order that the Minister for Commerce might be given leave to make his statement and to have copies of it circulated to honorable members, so that they would be able to consider it fully before the resumption of the debate. I ask for an assurance that these arrangements will stand. 250 JOM West Sydney Leader of the Australian Labour party - nonCommunist 0 0 BEASLEY, John Mr BEASLEY . - The main consideration is not so much on what days the Parliament shall meet next week as on what days it will meet in succeeding weeks, and for what length of time Parliament will be kept in session. If the Government could make up its mind in regard to this matter, it would be very helpful. There is some advantage in being able to look into the future and having some idea as to what is to happen. 250 KHL 0 0 HOLLOWAY, Edward Mr Holloway - The sooner we have an election, the better for every body. 250 JOM 0 0 BEASLEY, John Mr BEASLEY - Quite right. I agree that it might be difficult to make a decision between now and next Wednesday on the big question of the date of the elections, but I should like an indication from the Prime Minister (Mr. Menzies) as to what is intended in respect of the succeeding weeks of the session. Is it proposed to meet Tuesday, Wednesday and Thursday in one week and Wednesday, Thursday and Friday of the following week? The Prime Minister might well indicate the length of time remaining to us to complete what the Government regards as its important business. If the right honorable gentleman will do that, I shall be obliged, for we can then pretty well guess for ourselves what the future holds for us. 250 N76 0 0 MENZIES, Robert Mr Menzies - Nothing would give me greater pleasure than to oblige the Honorable member. 251 JNX Bass 0 0 BARNARD, Herbert Mr BARNARD .- While I associate myself with the remarks of the Leader of the Opposition (Mr. Curtin) in regard to meeting the convenience of the Government, it is rather amazing that the Government should find it necessary to have what we call a long week-end after the Parliament has been sitting for only three days. I have complained about the arrangements for sitting days and of the lack of consideration for honorable members from distant States ever since I have been a member of this House. I regret to say that the present Prime Minister (Mr. Menzies) has done no better than his predecessor in that regard. I fully realize that we are passing through difficult times, and that fact must influence the decisions of the Government, but Ministers should not be altogether unmindful of the convenience of . honorable members. As a representative of a distant State, I, hi common with other honorable members, find difficulty in getting back to my home or making any arrangements for week-ends unless the Government arranges the sitting days with this in view. The Prime Minister should give some indication of what is intended so that private members can make their arrangements accordingly. Perhaps the right honorable gentleman will be good enough to say if it is proposed to sit on three days or four days a week during the present session, so that honorable members representing the more distant States may make arrangements to visit their homes and interview their constituents. 251 KLC Denison 0 0 MAHONEY, Gerald Mr MAHONEY .- I was disappointed to hear the statement of the Prime Minister (Mr. Menzies). We have been brought here from distant parts of the Commonwealth to attend to urgent business associated with the prosecution of Australia's war effort. Now we are told that the House will rise to-morrow and meet on only Wednesday, Thursday and Friday of next week. Having regard to the crisis with which Australia is confronted, the Government is doing its best to bring Parliament into ridicule. If there is important business to be done, Parliament should sit every week from Tuesday to Friday if necessary. If there is anything that will tend to discredit and defeat democracy it is the employment of these " Fifth-Column " tactics by the Government, which is playing up to the electors, pretending that it wants nothing so much as to get on with the nation's war effort, which the Labour party is preventing. This afternoon I asked the Prime Minister (Mr. Menzies) a civil question, and am not disposed to accept his insulting remarks in reply. While honorable members from distant States are compelled to remain in Canberra, members of the Government are conducting their election campaign " under the lap ". We know that the Nationalist party organizations throughout Australia are using the national broadcasting service for party purposes, saying that they do not want an election, but that it is being forced on the country by the Labour party. I challenge any one to say that I have ever done anything to hinder the Government in the sincere prosecution of our war effort, but I object to Parliament being made a laughing stock by meeting on only two or three days in the week, and then adjourning for a long week-end. Members of the Government can go to their electorates, but members representing Tasmanian constituencies must remain here. I maintain that I am just as much entitled to return to my home, and to my wife and children, as is the Prime Minister to return to his. If the Prime Minister intends that an election shall be held, he should say so. If it is intended that Parliament shall sit beyond next week, let us have regular sittings on four days a week if necessary, and let the Government not continue to give the impression that it is anxious to set up a totalitarian State in Australia. That certainly seems to be what the Prime Minister is aiming at. I am opposed to that tendency, just as I object to his sneering remark that I would not be missed from public life. I can say without hesitation that my record in public life is as clean as that of the Prime Minister. 251 JSC Batman 0 0 BRENNAN, Frank Mr BRENNAN .- -I have never known a government which, in the matter of the meeting of Parliament, pursues a course of such unpredictable irregularity as this Government does. I have complained of it before. We never know what the sitting days of Parliament are to be, and we are precluded by that fact from making any arrangements ahead for any length of time. That is a source of irritation and discomfort to every body concerned. The Leader of the Opposition (Mr. Curtin) is satisfied to give the Government what time it requires in the week-end for the preparation of its programme, and I am offering no special objection to the adjournment to-morrow night. I point out, however, that members come to this Parliament from very distant parts of the Commonwealth, and that the assembling of this Parliament is no light matter, having regard to the distances which must be covered. If we adjourn tomorrow, we shall be practically wasting Friday of this week, whereas, if Parliament were to meet on Friday as usual, honorable members could, even on a motion for the adjournment of the House, impart much useful information to the Government and to the country about matters which they have too few opportunities to discuss. This could be done without mating any demands on the attention or energies of members of the Government. My protest has greater significance if, as we are led to believe, the Government is not candid with us, but is merely sparring for time while it makes its own arrangements for an election campaign about which it does not take the House into its confidence. Having registered my protest, I leave the matter there for the moment. 252 KYC Ballaarat 0 0 POLLARD, Reginald Mr POLLARD .- For my part, I am not much concerned as to whether the Government adjourns Parliament for a long week-end or a short one. As a matter of fact, I would not object to being here in perpetuity. However, I think that the Prime Minister (Mr. Menzies) should inform us as to what time this week or next week he intends to see His Excellency the Governor-General for the purpose of tendering advice which will have the effect of giving the Government an opportunity to scrape the Country party barnacles off the ship of state. Question resolved in the affirmative. 252 Questions 252 252 JXL 0 0 FROST, Charles Mr FROST - I ask the Minister for the Army whether arrangements have been made for the evacuation and provisioning of the civil population of coastal towns in the event of -an invasion of Australia? 252 KVN UAP 1 0 STREET, Geoffrey Mr STREET - If the honorable member is referring to his own State of Tasmania, I suggest that the information he seeks may be made available to him toy the Premier of that State. 252 Sales to Unauthorized PERSONS 252 JOM 0 0 BEASLEY, John Mr BEASLEY - I ask the Minister for the Army whether the Government intends to issue regulations for the prevention of the sale of military, naval and airforce uniforms to unauthorized persons? Can the honorable gentleman explain why this action has not so far been taken, particularly in the light of the number of public statements that have been made in regard to the matter? 252 KVN UAP 1 0 STREET, Geoffrey Mr STREET - It is the intention of the Government to issue regulations designed to prevent the sale of service uniforms to unauthorized persons. Those regulations, I understand, are at present in draft, and should shortly be approved and published. 252 Recruiting 252 JLZ 0 0 ANTHONY, Hubert Mr ANTHONY - I have received from recruiting committees on the north coast of New South Wales, notably at Murwillumbah and Lismore, the complaint that men who enlisted for the Australian Imperial Force as far back as the 25th May have not yet been called up, and that these committees have received from the recruiting depot at Newcastle the notification that, for the present, no further call-up is to be made. The circumstances of these men preclude their acceptance of positions in civil life, and their minds are in an unsettled state. Will the Minister for the Army state what is projected in respect of them? 252 KVN UAP 1 0 STREET, Geoffrey Mr STREET - If the circumstances are as the honorable member has stated them to be, I regret the fact, and shall take steps to correct them. 253 253 L1L 0 0 WILSON, Alexander Mr WILSON - In view of the extremely serious financial position of the majority of the wheat-growers of Australia, due to low and fluctuating prices and to other serious circumstances caused by the war, will the Prime Minister state whether the Government has in view arrangements for the preservation and continued operation of the wheat industry, and avoidance of the dispossession of the growers of their farms and implements? 253 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - The whole of that very important matter is under the constant consideration of my colleague, the Minister for Commerce. 253 253 KWC CP 0 0 THORBY, Harold Mr THORBY - Yesterday the honorable members for Griffith and Moreton asked questions concerning the despatch of mails to members of the Australian Imperial Force on service abroad. I now inform those honorable members that direct mails are despatched by the Postal Department to the different vessels of the Royal Australian Navy, to Army Base Post Offices in Palestine and England, and to any units of the Royal Australian Air Force abroad by every available vessel. T.he mails are made up and labelled in accordance with secret instructions issued by the Service Departments concerned. In addition, mail matter for certain units of the Australian Imperial Force which are abroad is forwarded by the Postal Department to an Army post office in Melbourne, where the correspondence is checked with special records in order to ensure that it is correctly routed to Palestine or England, as the case may be, and is then returned to the Postal Department for despatch overseas. At the request of the Service Departments concerned, mail matter for members of the Commonwealth Forces abroad is to be addressed as follows : - Navy. - The addressee's rank or rating and name, together with the name of the ship to which he is attached, followed by the words "Care General Post Office ". Army. - The addressee's number, rank and name, together with the unit to to which he is attached, followed by the words " Australian Imperial Force abroad ". Air Force. - In the case of individual units, the addressee's number, rank, initials and name, together with the unit to which he is attached, followed by the words " Royal Australian Air Force abroad ". In the case of trainees sent to Canada under the Empire air training scheme, the addressee's number, rank and name, followed by the words " Care Royal Canadian Air Force, Ottawa, Canada ". Since the departure from Australia of the Australian Imperial Force, soldiers' mail has been despatched on ten occasions to Palestine and on five occasions to England. Certain mails despatched to Palestine contained mails for the troops who were diverted to England, and the Department of the Army has made all the necessary arrangements for such mail matter to be re-despatched from Palestine to England without delay. The Empire air mail service is regularly utilized for the conveyance of mail matter to the Australian Imperial Force which is fully prepaid for aerial transmission at ls. 6d. a half oz. The air service operates to a weekly frequency in each direction between Australia and Durban, via Egypt. Mails for the United Kingdom are conveyed by the first available transport. The frequency of the Empire air mail service will be increased to twice a week on the 24th August next. Information concerning the extent of the censorship imposed on mail matter to and from the Defence Forces is not available to my department, but it is understood that such mail matter is afforded priority of treatment and that no delay occurs in the transmission of harmless correspondence on account of censorship requirements. The postal service provided within the Australian Imperial Force abroad is conducted by the Army Postal Service. The facilities comprise the delivery and despatch of mail matter. Information concerning the detailed arrangements in operation in Palestine and England is not available to my department at present. It is understood that at least two mails - those despatched in June - have now been delivered to the Australian Imperial Force in England. The statement mentioned in the press of the 5th August refers to the loss of mails for Palestine and the Middle East, which closed in Melbourne about the 20th May. 254 KMW 0 0 MARR, Charles Sir CHARLES MARR - Did I understand the Postmaster-General to say that all mails for members of the Australian Imperial Force abroad are first sent to Melbourne to be checked by the military authorities, and are then returned to the different States for despatch? 254 KWC 0 0 THORBY, Harold Mr THORBY - Not all mails; only certain mails. 254 Output at Sarina. 254 KMZ 0 0 MARTENS, George Mr MARTENS - Have representations been, made to the Department of Supply and Development regarding an increase of the output of power alcohol at Sarina? If so, to what extent is it proposed that the plant shall be increased? 254 KV7 UAP 1 0 STEWART, Frederick Sir FREDERICK STEWART - As the result of consultations between the distillery company at Sarina and myself some time ago, steps were taken by the company to increase its capacity to produce power alcohol, but difficulty has been experienced in obtaining increased supplies of molasses. It may interest the honorable member to learn that the Government has recently decided to establish a special committee, under the presidency of the Assistant Minister for Supply (Mr. Fadden), to discuss ways and means of increasing the production of power alcohol, not only from molasses and other by-products of sugar, but also from other local products. 254 254 KK7 0 0 JENNINGS, John Mr JENNINGS - Can the Attorney-General say when it is intended to proceed with the Trade Marks Bill and the Patents Bill now on the notice-paper? 254 DQC UAP 1 0 HUGHES, William Morris Mr HUGHES - The honorable member will recall that, following a consultation with the leaders of the various political parties in this House, it was decided to refer the bill to a committee. I cannot say whether the bill will be proceeded with in the near future, because there are forces at work which may disturb the best schemes of men. 254 254 KLL 0 0 MAKIN, Norman Mr MAKIN - Can the Attorney-General say whether there is a prospect of legislation being introduced in the immediate future to safeguard the interests of members of the Australian Imperial Force in respect of claims for rent and interest on mortgages? 254 DQC UAP 1 0 HUGHES, William Morris Mr HUGHES - The question of a moratorium for members of the Australian Imperial Force is under consideration. As the honorable member will readily agree, the matter is not without its difficulties. However, it is hoped that in the near future a regulation will be promulgated in this connexion. 254 254 KA9 0 0 JOLLY, William Mr JOLLY - If it be necessary, as was stated . yesterday, for single men serving in military camps situated outside their electorates to transfer, after three months, their electoral enrolment to another division, will the Prime Minister take action to enable them to retain their enrolment for the divisions in which they normally reside? 254 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - The matter is engaging the attention of the Government. 254 254 KCF 0 0 DEDMAN, John Mr DEDMAN - Can the Minister for Supply and Development inform the House when the munitions establishment at Geelong, which was completed many months ago, will be brought into production? 254 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - I shall ascertain the facts and let the honorable member have an answer to-morrow. 254 254 KX7 0 0 WARD, Edward Mr WARD - 'Can the Minister for the Army say whether it is a fact that certain voluntary women war workers, who were engaged upon censorship work in Sydney, divulged the contents of letters passing between members of the Navy and their relatives and friends ashore? If so, what action does the Minister propose to take? 254 KVN UAP 1 0 STREET, Geoffrey Mr STREET - In any cases which are brought under my notice, or the notice of the censorship authorities, of individuals on the censorship staff breaking their oath of secrecy such persons will .be immediately dismissed. If the honorable gentleman will give to me any specific instances in which such oath has been broken and no action taken, I shall cause an investigation to be made. 255 KX7 0 0 WARD, Edward Mr WARD - Can the Minister for the Navy say whether it is a fact that, as the result of inquiries made following an interview which I had with him recently, it was found that the complaints were justified and that he communicated with the Minister for the Army with a view to appropriate action being taken? Can he say whether he has yet been advised what action the Minister for the Army proposes to take, and if action has not already been taken, what he himself proposes to do in the matter? 255 JTY CP 0 0 CAMERON, Archie Mr ARCHIE CAMERON - The complaints lodged by the honorable member, and others, in this connexion were proved to my satisfaction to be well founded. I have every reason to believe that the Minister for the Army dealt with the matter in a satisfactory way. 255 255 L07 0 0 LAZZARINI, Hubert Mr LAZZARINI - In order to prevent confusion among the electors, will the Prime Minister see that new rolls are printed before the next elections take place? 255 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - I shall do my best in the matter, 255 KMZ 0 0 MARTENS, George Mr MARTENS - Will the Minister representing the Minister for the Interior endeavour to get the assistance of the police authorities in the States in which separate electoral rolls are used, in order to obtain as complete rolls as possible for the forthcoming federal elections? There was a time when this course was followed, but recently it was discontinued. 255 N76 0 0 MENZIES, Robert Mr MENZIES - I shall have pleasure in conveying the honorable member's suggestion to my colleague, the Minister for the Interior. 255 255 KQB 0 0 SCULLY, William Mr SCULLY - Some time ago a deputation waited on the Minister for Commerce asking for the restoration of the fertilizers subsidy. Is the Minister yet in a position to make a statement on the subject? 255 JTY CP 0 0 CAMERON, Archie Mr ARCHIE CAMERON - Not at present. 255 255 JLZ 0 0 ANTHONY, Hubert Mr ANTHONY - Has the Minister for the Army noticed in the press a statement by the secretary of the Royal Agricultural Society of New South Wales that the society hopes, if the Army will co-operate with it, that the Sydney Show will be held next Easter? Has he also seen the statement that the loss to Sydney traders if no show be held will be between £1,500,000 and £2,000,000? Has the Minister any statement to make in regard to this matter? 255 KVN UAP 1 0 STREET, Geoffrey Mr STREET - As I have not yet seen either of the statements referred to, I am not in a position to comment on them, but I shall read them in order to inform my mind on the subject. 255 255 JOM 0 0 BEASLEY, John Mr BEASLEY - Is the Minister representing the Minister for Trade and Customs in a position to comply with the request which I made during the earlier period of the session that he should make available to honorable members the Townsend report on shipbuilding in Australia ? 255 KUG UAP 1 0 SPENDER, Percy Mr SPENDER - I shall consult with my colleague, the Minister for Trade and Customs, and see what can be done. 255 255 K9A 0 0 GANDER, Joseph Mr GANDER - Has the Postmaster-General yet made representations to the Treasurer regarding the issue of wireless listeners' licences free to invalid and old age pensioners, as was requested by a recent deputation? 255 KWC CP 0 0 THORBY, Harold Mr THORBY - Following the representations that were made to me, the matter was inquired into. A statement in reply to the deputation is now ready. 255 255 L1L 0 0 WILSON, Alexander Mr WILSON - Is the Minister for the Army able to indicate the attitude of the Government towards the numerous requests from country centres for the establishment of what may be termed primary military camps, so that recruits may receive their initial training locally? 255 KVN UAP 1 0 STREET, Geoffrey Mr STREET - The Department of the Army establishes camps in various country centres where railways, light and water, and other facilities are available. and considerable numbers of men can be housed satisfactorily. Obviously, it is impossible to establish camps in numerous country centres because of the heavy expenditure which would be involved and the difficulty of providing equipment and instructors. 256 256 KJQ 0 0 JAMES, Rowland Mr JAMES - Is the Minister for Defence Co-ordination aware of the serious position that has arisen because work on defence undertakings has been suspended through lack of funds? I refer particularly to defence works in one of the most important industrial centres of Australia. If so, will he take immediate action to ensure that further sums of money shall be made available, thereby enabling men who have been put off to be re-employed? 256 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - I am certainly not aware that any essential defence works have been suspended for lack of funds. I assure the honorable member that that is not the case. 256 256 KLC 0 0 MAHONEY, Gerald Mr MAHONEY - Is it a fact that men engaged on home defence are receiving lower rates of pay for the same class of work than are paid to men' who have volunteered for active service but are still in Australia? If so, will the Minister for the Army take steps to see that all men doing similar work are paid at the same rates? 256 KVN UAP 1 0 STREET, Geoffrey Mr STREET - The allegation contained in the honorable member's question has no basis in fact. The same rates are paid for similar work up to the time of embarkation. After embarkation, deferred pay is credited to men of the Australian Imperial Force. 256 256 L08 0 0 ROSEVEAR, John Mr ROSEVEAR - Has the attention of the Minister for Defence Coordination been drawn to the fact that a large proportion of men who have enlisted in the Australian Imperial Force have not been supplied with some details of their equipment? Some me:n who have been in camp for about a month are still without hats. Is this due to the excessive efficiency of the recruiting authorities or to the lack of efficiency of the Department of Supply and Development ? 256 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - I am informed by the Minister concerned that there is no foundation for the statements that have been made to the effect that a substantial number of men in the Australian Imperial Force are without some part of their equipment. It may be that ou some rare occasion an individual is minus an item of his equipment, but . such instances are inevitable. Speaking broadly, there is no truth in the charge. 256 L08 0 0 ROSEVEAR, John Mr ROSEVEAR - I ask the Minister whether, in order to test the truth of _the prompting he received from the Minister for Supply and Development, to the effect that there was no shortage- 256 10000 0 0 SPEAKER, Mr Mr SPEAKER - The honorable member is not in order. 256 L08 0 0 ROSEVEAR, John Mr ROSEVEAR - How are we to get satisfaction on this matter? 256 10000 0 0 SPEAKER, Mr Mr SPEAKER -The honorable member was not in order in asking that something be done in order to test the truth of a Minister's statement. 256 L08 0 0 ROSEVEAR, John Mr ROSEVEAR - I ask the Minister for Defence Co-ordination whether he will call for a report from the authorities at the Ingleburn and Tamworth camps, as to whether there is any shortage of equipment among the troops, so that we may be informed as to the truth regarding the position? 256 10000 0 0 SPEAKER, Mr Mr SPEAKER - I ask the Minister not to reply to that question. Later: 256 L08 0 0 ROSEVEAR, John Mr ROSEVEAR - Will the Minister for Defence Co-ordination call for a report from the authorities at the Ingleburn and Tamworth camps to discover whether the soldiers in those camps are without any of their equipment? 256 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - I have actually anticipated the honorable member's question, and have asked my colleague the Minister for the Army to obtain a report on the subject. 256 256 L1L 0 0 WILSON, Alexander Mr WILSON - As surveys show that there will probably be a demand - for wheat when the war is over, I ask the Minister for Commerce whether the officers of his department have made an investigation, or whether they contemplate doing so, with the object of providing storage on farms or at the seaboard for our surplus wheat, so that thu demand which may arise for it may be met, and so that continuity of operations in this industry may be possible in the interim. 257 JTY CP 0 0 CAMERON, Archie Mr ARCHIE CAMERON - The Department of Commerce has given consideration to this subject, but we always come up against the insuperable obstacle that no one knows when the war will end, 257 257 KJQ 0 0 JAMES, Rowland Mr JAMES - As it is quite obvious that the Prime Minister is not aware of the deplorable ineffectiveness of our defence measures- 257 10000 0 0 SPEAKER, Mr Mr SPEAKER - Order ! 257 KJQ 0 0 JAMES, Rowland Mr JAMES - I ask the Prime Minister whether, in view of the knowledge which many honorable members on this side of the House possess, concerning our unpreparedness to defend Australia, he will endeavour to arrange a meeting of all the parties in the House to discuss the whole subject, as honorable members do not desire to discuss it publicly, for that might create something of a panic. We desire a secret session of the Parliament to be held at which the whole situation may be openly discussed. Is the Prime Minister prepared to summon a secret session of Parliament, in order that honorable members may be informed of the true position and may not be tempted to divulge facts which have come under their notice, with the idea that to do so would be to render a service to th, country ? 257 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - I anticipate saying something about that subject to-morrow. Later: 257 KFE 0 0 GREGORY, Henry Mr GREGORY - Before the Prime Minister gives favorable consideration to the request for a secret session of Parliament, I ask him whether he will read the report that appears in a section of to-day's press respecting a secret meeting of the Country party that was held last night - a report that consists almost wholly of untruths? 257 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - I shall consider the honorable member's suggestion. My experience of secret arrangements is that " there is nothing hid that shall not be known ". 257 257 KLC 0 0 MAHONEY, Gerald Mr MAHONEY - Will the Minister for the Army inform me whether it is a fact that not one Tasmanian who joined the postal unit was given a commission? Is it a fact that Tasmanians who had high qualifications and were capable of holding commissions were not wanted ? If so, why? 257 KVN UAP 1 0 STREET, Geoffrey Mr STREET - If the honorable gentleman will give me particular cases I shall be prepared to consider them. It is difficult to reply to generalities. I assure the honorable member that, contrary to his repeatedly expressed opinion, Tasmanians have not suffered any in* justice in respect of appointments. 257 257 KX7 0 0 WARD, Edward Mr WARD - I ask the Prime Minister whether, in view of the fact that the basic wage was recently increased in consequence of the higher cost of living, he will consider a request by invalid, old-age and war pensioners that their allowances be increased? 257 N76 UAP 1 0 MENZIES, Robert Mr MENZIES - I shall bring the matter under the notice of my colleagues. 257 KJQ 0 0 JAMES, Rowland Mr JAMES - In view of the fact that petitions bearing many thousands of signatures have been presented to this Parliament by honorable members of all parties, except the Country party, for an increase of the rate of invalid and old age pensions to 303. a week, I ask the Treasurer whether the Government proposes to take notice of the submissions that have been made? Will he indicate whether it is proposed to increase the pension rate in consequence of the increase of the cost of living? 257 KUG UAP 1 0 SPENDER, Percy Mr SPENDER - The question deals with a matter of policy. 257 257 L08 0 0 ROSEVEAR, John Mr ROSEVEAR - I ask the Minister for Supply and Development whether he was responsible for a report which appeared in the press to the effect that the best guarantee he could give that petrol rationing would not be brought into effect was that he had bought a new car? Seeing that, following his example, a great many other people bought new cars about the same time, does the Government propose to provide any compensation for them? 258 KV7 UAP 1 0 STEWART, Frederick Sir FREDERICK STEWART - The implication in the honorable member's question is as incorrect as the implication in an earlier question which he directed to the Minister for the Army concerning supplies. However, no such statement was ever made by me. 258 miscellaneous 258 258 Mr. SPEAKER (Hon. G. J. Bell).I have received from the right honorable member for Cowper (.Sir Earle Page) an intimation that he desires to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely, " The necessity for substituting a plan of rationalization of transport and of voluntary regulation of petro] consumption by and under the direction of the industries themselves, with a view to stopping the alarming growth of unemployment in the transport industry and consequent dislocation of the national economy and the national war effort, in the place of the Government's plan for the compulsory rationing of petrol to secure savings in Australia ". 258 C7E Cowper 0 0 PAGE, Earle Sir EARLE PAGE .- I move - That the House do now adjourn. 258 10000 0 0 SPEAKER, Mr Mr SPEAKER -Is the motion supported ? Five honorable members having risen in support of the motion, 258 C7E 0 0 PAGE, Earle Sir EARLE PAGE - I shall advance several reasons for this motion. First, I direct attention to the extraordinary importance of the subject, for it is obvious to every one in the community that we must have sufficient petrol for defence purposes, and also that we must provide employment for the 365,000 people engaged in our road transport industry. My second reason is that the subject is extraordinarily urgent, for the longer we are without a definite policy on the subject the greater will be the momentum of the unemployment which is being caused, and the more serious will be the losses of those who have invested their money in our transport system. A very serious dislocation of the efficient organization that has been developed over a number of years is also occurring and the longer this is allowed to continue the greater will be the difficulty in restoring it to its full functioning, which I am sure will be absolutely needed before the war is over. Further, I differ from the Government as to the principle of the methods it is adopting to meet the situation that has arisen. I believe that the compulsory rationing of petrol in Australia will be difficult to administer, and police, and that it may very easily be unduly harsh in its application. I am satisfied also that the system that has been adopted by the Government may result in the goodwill and co-operation which a large section of our motor vehicle users and traders have hitherto shown towards the Government war effort being replaced by either sullen acquiesence in what U being done or active evasion by people who consider that they are being unjustly treated. The results desired by the Government may be more effectively and quickly obtained by an elastic scheme of voluntary regulation within the industry itself. Government schemes must necessarily be rigid and less rapid in action than voluntary schemes. They must also cause anomalies which can only be remedied with difficulty. I do not think, that *he importance of our road transport system to the national life of our country is generally realized. The only true comparison that I can make is to liken it to the blood circulation system of the human body. Damage to that system is . much more likely to be far-reaching in its effects and to have serious repercussions than is damage to any single organ of the body. Just as the blood system touches every organ of the body, so does our road transport system touch every activity of our national economy. We should, therefore, exercise extraordinary care in adopting any system that is designed to effect a curtailment of the activities of our road transport system, in order to ensure that any such action is taken in a way which will be least harmful to the whole organization. Unless we exercise this vigilance, we may damage not only the transport interests directly concerned, but also all those interests which are essential to the maintenance and development of our national war effort. It seems to me that, most of the difficulties arising at present in this regard are due to the narrow view that has been taken of the problem. The tendency is to treat the rationing of petrol as an isolated subject, rather than as an action which must be adjusted to the fundamental and essential activities of the whole community. Rationing in itself is not a cure for our condition. It may help to tide us over a temporary emergency, but it is no m'ore a cure than the indiscriminate bleeding practised by my colleagues in the medical profession on their patients hundreds of years ago was a cure for al] bodily ills. A good many people died under that treatment. An illustration that rationing is not the best, way to deal with this matter is provided by the fact that the war circumstances have already brought about a very considerable amount of voluntary rationing already; it is stated that the consumption of petrol by private and commercial users has fallen by 25 per cent, since the outbreak of the war, that there has been a 45 per cent, decrease of employment in the industry, the registration of new motor cars has fallen by 75 per cent, and the whole motor transport industry is in a state of chaos. We must look at this matter from the broadest possible view-point before we take a step which might have very undesirable consequences. I should like to point out how much has been done during the last 20 or 30 years to make the road transport system of Australia one of the most important arches of our whole national economic structure. During the last 150 years a remarkable change has taken place in the standards of living of the people, their comfort, the manner of their life and the variety of their food. In a large measure this has been due to the improvement of world transport, the harnessing of steam, electricity and oil and the advent of the internal combustion engine. In the last 40 years the extraordinary improvement of road transport, particularly noticeable in the last two decades, has transformed commerce and production especially in countries of huge expanse such as Australia, the United States of America and Canada. I venture to say that in considering the subject of petrol rationing we should not make comparisons with countries smaller than our own, such as New Zealand and Great Britain, which are relatively better served by railways than is Australia, and have more coastal sea-borne traffic. Let us give thought for a moment to the tremendous progress that has been made in this industry within recent years. Only 40 years ago the first motor car came to Australia, and only in the last 20 years has the motor industry become a big factor in this country. To-day, the capital invested in the industry is staggering. Practically all of that money has been privately subscribed, and the investments have proved profitable. I find on examination that to-day the capital invested in the actual business of road transport approximates £200,000,000. In. Australia to-day there are something like 850,000 registered motor cars, lorries and vehicles of a value of at least £80,000,000. During the last 20 years something like £40,000,000 has been provided by the Commonwealth a.nd another £60,000,000 has been provided by the States under the federal aid roads scheme and their ordinary activities. In other words the road transport industry represents an investment of a total of approximately £400,000,000, which about equals the total capitalization of our Australian railways of £350,000,000, and is twelve times the capitalization of the whole of the shipping on the Australian register. The effect of this huge expenditure of money in connexion with the transport of this country has been to stimulate development and production in areas previously unthought of. It has enabled us to tap resources hitherto regarded as inaccessible and has transformed progress in commerce, particularly in the last ten years, during which practically no railways have been constructed. It has permitted the continual expansion of suburban factories and dwellings around capital cities, and has enabled the population to live in semi-rural conditions, while at the same time enabling extraordinary growth of country towns which .previously were stagnating. Towns like Grafton, Casino, Taree, Kempsey and Coffs Harbour have doubled their population during that period, because the utilization of motor transport has enabled the people to go 20 or 30 miles farther to get their timber resources from stands never before capable of exploitation. It has enabled dairymen to settle on land 70 or 80 miles away from a dairy factory, whereas in the horse and buggy days the limit was 20 or 30 miles. "We must do nothing to damage that structure; we must do everything in our power to develop and expand it. We cannot go back on our tracks if we wish to retain the solvency and production of this country. It is obvious, of course, that we must have sufficient reserves of petrol for our defence needs; but at the same time we must not forget that the future of this country, as well as its present defence, depends to a great degree upon the maintenance of adequate supplies of petrol to business and commercial users. Three reasons have been given for the imposition of rationing and the need to make drastic curtailments of our petrol imports. It is said, firstly, that there is a shortage of storage facilities in Australia; secondly, that there is a shortage of tanker shipping; and, thirdly, that this action is necessary in order to conserve foreign exchange. With regard to storage facilities, I point out that the Lyons-Page Government had definite plans to increase the number of storage reservoirs. How far has the present Government carried out those plans? I was informed last Monday by the president of the Service Garages Association that its members have storage space for approximately 30,000,000 gallons of petrol, only one-half of which is at present being used. That space would be invaluable for the storage of petrol for use by our mechanical arms of the defence forces should it be desirable to move troops rapidly in country centres. 260 KV7 0 0 STEWART, Frederick Sir Frederick Stewart - That is a grossly extravagant statement. 260 C7E 0 0 PAGE, Earle Sir EARLE PAGE - The association states definitely that there is to-day in garages throughout Australia unused storage space of about half of the 28,000,000 or 30,000,000 gallons. Most of the storage tanks installed in country garages are not more than 25 per cent, to 40 per cent. full. Then, there are other means of increasing our storage facilities which should be explored. I understand that an offer has recently been made by a large construction company to build, inside three or four months, 100 concrete tanks, each capable of holding 1,000,000 gallons, for £5,000 each. If that offer were accepted we could double our present bulk storage facilities and distribute it more safely. The second reason advanced for the imposition of petrol rationing is the shortage of tanker shipping. I am informed that tankers are still fairly freely available, but that the present system of discharging their cargo at different ports is wasteful. Under the present arrangements, a tanker may be hired by any one of the four or five major oil companies and unload its cargo at the depots of that company at Rockhampton, Brisbane, Sydney, Newcastle and Melbourne before returning empty. If arrangements were made between the companies for tankers to discharge the whole of their cargo at one port, for all of the oil companies instead of for one particular organization, the total quantity of petrol transported by them could be doubled because of the time saved on the Australian coast. The Government should seriously consider the utilization of tanker space in the best possible way. The third reason advanced for petrol rationing is the need . for the conservation of foreign exchange. In regard to that I am in a position to say only that unless we do something to enable us to use to the fullest degree what productive resources we have in this country, insufficient wealth will be produced to supply foreign exchange for our own needs. We must do everything we can to improve our position in this regard. I fully realize that the consumption of petrol by the civil population under present circumstances must be reduced in order to ensure a sufficient margin for defence purposes. We should however, immediately do everything possible to build up a large reserve of petrol in this country in order to lessen the curtailment of supplies to the civil population at the earliest possible moment. As I have said, the war has already brought about a considerable reduction of the use of petrol by the public generally. The additional tax of 3d. a gallon imposed by the Government as a means of increasing the revenue for war purposes, the extra 4d. imposed by the oil companies because of higher shipping charges, and the depreciation of sterling and Australian exchange in relation to the dollar, have had a cumulative effect in bringing about a reduction of the demand for petrol. In addition to this, the war has caused considerable dislocation of exporting and importing businesses and that has had its effect on petrol consumption. Many exporting and importing firms to-day enjoy nothing like the volume of business they enjoyed before the war, and many have had to make very serious reductions of staff. The heavy general taxation imposed by Australian governments has also lessened the amount of money available for pleasure riding and, in addition, a considerable number of young men - nearly 200,000 - are now in military camps. Many of those young men would be large users of pleasure cars. It is true that the reductions brought about in this way will offset our heavy defence requirements, but, of course, not completely. A further reduction, and a wider use of what is available, can be obtained through the organization of the use of petrol for private and business purposes in such a way as to eliminate waste in every direction, abolish duplication, and wipe out unhealthy and excessive competition. 261 KV7 0 0 STEWART, Frederick Sir Frederick Stewart - What about the employment issue there? 261 C7E 0 0 PAGE, Earle Sir EARLE PAGE - I shall deal with that in a moment or two. A number of methods should be used simultaneously. The Commonwealth and State Governments could do their share by eliminating waste in government services. The locations of military camps affect the rate of petrol consumption in the defence services to a great degree. Many camps are distant from railway stations, with the result that large quantities of petrol are used for the purpose of transporting officers and men between railway stations and the camps. One instance I shall cite is that of the Evans Head training camp, which is 30 miles from the nearest railway centre. It could have been conveniently situated at Coffs Harbour,' Casino, Grafton, or Kempsey, or a dozen different places which are close to a railway line. [Leave to continue given.] Petrol is wasted also by the use of heavy lorries to transport small parcels to military camps. Such parcels should be carried on motor cycles whenever possible. No blame should attach to any Minister for wastage which occurs in this way; the matter should bc dealt with by sergeants and sergeant-majors. Another practice that should be discontinued is the transport of heavy loads by defence lorries on routes running parallel with main .railway lines. Such loads could be moved by rail ; the extra work involved in transhipment from lorries to railway trucks would be more than offset by the saving of petrol. An appeal should be made to the patriotism of private consumers of petrol in order to induce them to use petroldriven vehicles as little as possible. More force would be given to the appeal if the Government could first say that it had instituted economies in its own services. The appeal could be launched by means of wireless broadcasts and publicity in newspapers and could be strengthened by obtaining the co-operation of motor-trade organizations. Consumers could be asked to drive their vehicles at a. more economic speed, which would tend also to decrease the accident rate on public roads. They could be asked to curtail motor travelling for pleasure. In many cases, one car could be used in place of two or three for combined family outings to the seaside. Speed contests for petroldriven vehicles could be banned by State laws or Commonwealth regulations. A definite limitation of trading hours at motor garages and service stations on both week-days and Sundays might also effect, an economy. Speed limits have already been fixed in New South Wales and trading hours at petrol stations have been reduced in Victoria. The most effective way to reduce petrol consumption would be to organize commercial transport services throughout Australia in order to prevent overlapping. This work could be delegated to State transport boards, which could be strengthened and assisted by representatives of motor-trading organizations and commercial petrol users. In order to illustrate the way in which transport services overlap, I shall quote from a letter I have received from the manager of one of the dairy companies in my electorate. I asked that gentleman to give me some instances of overlapping and he responded by giving me five. His letter stated - Lawrence has three separate services and also a mail service which carries cream. Contractors for Grafton, Ulmarra and Foley Brothers all run a lorry each, and none of them' is paying:, whereas one lorry could carry the whole of the cream for eight months in the year. Lawrence is 20 miles from Grafton and it would be possible to save 700 palIons of petrol monthly if the services on the five routes mentioned were coordinated. I believe that if similar overlapping throughout the northern districts of New South Wales were eliminated, the saving effected would amount to 1,000,000 gallons a year. 262 KV7 0 0 STEWART, Frederick Sir Frederick Stewart - It would also cause the dismissal of many motor drivers and others depending upon the services for a living. 262 C7E 0 0 PAGE, Earle Sir EARLE PAGE - Not as much as rationing. I shall deal with that problem later. Action could be taken in city areas. Wastage occurs in cases where several milk delivery cars visit the same area; arrangements could be made for one car to do the work of all of them in that locality. The distribution of goods by retail trading establishments to suburban areas also involves a great deal of waste. In order to prevent this, the firms could establish a joint clearing house from which goods could be taken to their destinations. In that way, one lorry could perhaps do the amount of work in one suburb that is now done by three or four vehicles that cover the same ground. This would effect a saving of thousands of gallons of petrol annually. The economies effected in these ways need not last only for the duration of the war. They could be made permanent in order to help the nation to pay its com mitments arising out of the war. Waste could also be prevented by eliminating unnecessary competition between the State railway systems and private transport companies using petrol-driven vehicles. This would be particularly effective if applied to interstate traffic. As the Minister has said, men might be thrown out of employment and motor vehicles might be forced into idleness if these restrictions were enforced. But some of these vehicles and many men could be used for defence purposes. Other vehicles could be held in reserve in order to replace those which would go out of service as the result of wear and tear. In order to show how a use could be found for displaced vehicles - and this can be multiplied all over Australia - I refer to a country district where there are a sawmill employing twelve men, five dairy farms, and a number of stockmen, making a total of seventeen families. Most of these families own dilapidated motor cars which they drive to the nearest town at regular intervals, thus using large quantities of petrol. Lorries which had been put out of service in other areas could be used to provide a cheap and profitable transport service for that and other districts, thus eliminating the use of the numerous privately-owned vehicles. It might be necessary to impose a higher rate of tax on petrol used in nonessential activities if other measures failed to cause a satisfactory reduction of consumption. The tax could be levied universally, with rebates for commercial users and operators such as farmers, commercial travellers and lorry owners who depend upon their vehicles for a livelihood. All the measures that I have suggested so far could be put into operation immediately. I also had in mind two long-range proposals which, although they might not give immediate relief, would benefit the nation eventually. The first of these is to increase as quickly as possible the rate of manufacture of power alcohol in its various forms. I am glad to know that the Government is already taking action to bring about such an increase. The second proposal relates to the use of producer gas units. These units will not come into general use unless prices fall considerably below their present level. The Government could pay a subsidy on their manufacture and standardize the various types in order to reduce their retail price to £15 or £10. No man, struggling for a livelihood, could afford to pay £60, £70 or £100 for one of these machines. The expedients which I have suggested would reduce the rate of petrol consumption without imposing hardships on commercial users such as timbermillers and dairy-farmers, who depend almost entirely upon motor transport for a livelihood." The prosperity and integrity of the nation depend in a great measure upon these people, and they should be provided with all of the fuel that they require. In time of war many industries may need more petrol than they use in time of peace in order to help the war effort. The timber industry has been expanded in order to supply an additional 200,000,000 feet of timber in place of overseas timber which can no longer be imported. The value to the country of this increase will more than offset any loss of dollar exchange due to the consumption of larger quantities of petrol for transporting timber. The implementation of my proposals would meet, with the approval of almost everyone in the transport industry in Australia. The Government should first decide upon a definite policy. Then it should introduce a scheme which could be strengthened without costly changes of administration. Industries handling petrol should be used as far as possible to regulate its use. The Government should also make a definite plan now for the expansion of industry as soon as war conditions permit. Australia will not be able to wage war successfully unless this important problem of national economy is dealt with immediately. 263 KV7 Parramatta UAP 'Minister for Supply and Development 1 0 STEWART, Frederick Sir FREDERICK STEWART . - There can be no dispute about the important part that transport, particularly petrol-using transport, plays in our industrial and social economy. I shall be very happy to elaborate the theme upon which the right honorable member for Cowper (Sir Earle Page) based his speech in that connexion. The Government, and I may modestly say the Minister concerned, did appreciate the important position that transport has in our economy in time of war and the injury that would be done to the whole community if transport facilities were unduly restricted. Therefore, we were reluctant to introduce any petrol rationing scheme and because of our reluctance we have left ourselves open to criticism. I was pleased to note that the right honorable member for Cowper did not deny the desirability of reducing petrol consumption. He merely suggested various methods by which reductions could be effected. In dealing with the subject of unemployment which might arise from the curtailment of transport facilities, he overlooked what ought to be an elementary fact - that the effect on employment of reduced petrol consumption would be the same whatever method might be employed. 263 KYI 0 0 PROWSE, John Mr Prowse - Not necessarily. 263 KV7 0 0 STEWART, Frederick Sir FREDERICK STEWART - Indeed, in some of the illustrations which the right honorable gentleman gave this was abundantly clear. He spoke of four lorries engaged upon transporting cream to a butter factory when the work could bc done effectively by one. If that means anything, it means that, if the suggested economy wore effected, three drivers could be displaced and the business of the service station associated with the maintenance of the lorries would bo reduced. In replying to the points made by the right honorable gentleman, my style is somewhat cramped because, as I stated yesterday, the Control Board which is at present devising a plan of rationing, pursuant to the Government's directions that there must be an economy of 33$ per r.ent. in the use of petrol for civil purposes, is sitting in Melbourne at this moment, and I expect its report to-morrow The Government does not yet know what proposals the board will make, and I am therefore handicapped in discussing the alternative suggestions put forward here this afternoon. 263 F4U 0 0 FORDE, Francis Michael Mr Forde - Will the scheme be announced in detail before the elections? 263 KV7 0 0 STEWART, Frederick Sir FREDERICK STEWART - The honorable member is now trying to obtain by subtle means information which I am. not able to give him. I take this opportunity to emphasize that the Government, so far from having been guilty of contemplating a plan that would inflict injury on a great body of people in Australia, has left itself open to serious criticism because of its reluctance to take action. If there is any matter upon which the Government can claim acquittal without a stain on its character it is this one. Honorable members know that, on the outbreak of war, it was found necessary to pool the foreign exchange resources of the Empire in order that we might acquire by purchase those commodities which are essential to the conduct of the war. Australia is a partner in that Empire pool, and one of the conditions upon which we were granted participation in Empire resources was that we, in common with the other parts of the Empire, should use every endeavour to curtail the purchase of peace-time requirements so that our resources might be used for the purchase of essential war needs. In application of that policy many restrictions have been placed upon the purchase of peacetime requirements. Newsprint has been rationed, and consumption reduced by 35 per cent. The importation of motor cars has been reduced by 45 per cent., as has also the importation of some important textiles. Certain other goods, previously imported to the value of £10,000,000 a year, have been banned altogether. The petrol rationing scheme has been on the stocks since the outbreak of war. On the 2nd and 3rd September last, there was a conference between the Commonwealth Oil Board; and representatives of the various State transport organizations, which considered a scheme of petrol rationing somewhat similar to that now suggested. The fact that, up to now, we have not actively moved in that direction does at least acquit the Government of a lack of concern for the interest of those whose livelihood depends upon the motor industry. However, there is more in this than the conservation of exchange, both sterling and dollar. A new issue has obtruded itself because of the increasing petrol needs of the defence forces. I am not at liberty to say what those needs would be in the event of general mobilization, but I can say that, if they were Sir Frederick Stewart. fully met, they would absorb a very great proportion of the petrol stored in the Commonwealth. There is also the further point that no one can guarantee with certainty the uninterrupted receipt of seaborne supplies of petrol, or of any other commodity. 264 K2A 0 0 RANKIN, George Mr Rankin - Can the Minister say whether the Government is making any arrangements for petrol storage, other than in coastal tanks, which are so vulnerable? 264 KV7 0 0 STEWART, Frederick Sir FREDERICK STEWART - Yes, and I shall deal with that in a little while. For the reasons I have stated, the Government was most reluctantly compelled to decide that the consumption of petrol for civil purposes must be reduced by 33^ per cent, as compared with the pre-war figure. It was obviously impossible for Cabinet itself to work out the complex .plan which would be necessary, and so a control board was formed on which there were two representatives of petrol users. This board met, and made certain preliminary suggestions as to the method by which the Government's decision should be carried out. Those suggestions were not endorsed by the Government, and the board was enlarged to include three more representatives of petrol users, so that it should be directly representative of the .petrol users of Australia. The board is now meeting in Melbourne, and the Government expects to receive its report to-morrow. The Government has not varied its decision that there should be a reduction of consumption by 33£ per cent. It is, however, quite prepared to consider alternative methods by which the same end may be achieved, methods which, in the opinion of the direct representatives of the users of petrol, will cause the least inconvenience to the community. 264 KXY 0 0 PERKINS, John Mr Perkins - What will a saving ot 33^ per cent, represent? 264 KV7 0 0 STEWART, Frederick Sir FREDERICK STEWART - The normal consumption of petrol is 360.000,000 gallons a year. We are trying to save 120,000,000 gallons a year. 264 KNX 0 0 HARRISON, Eric Mr Harrison - What will that represent in foreign exchange? 264 KV7 0 0 STEWART, Frederick Sir FREDERICK STEWART - I cannot say precisely. I point out that, even if we achieve a saving of 33£ per cent, of the quantity of petrol used for civil purposes, we shall not save a proportionate amount of foreign exchange as compared with pre-war expenditure. One reason for this is the greatly increased consumption of petrol for defence purposes, and another is the increased overseas cost of petrol, the price of which has risen by 3d. a gallon since the beginning of the war. The Government is also taking constructive action to meet the situation, and is seeking to exploit in every way possible means for the production of substitute fuels from local resources. Our activities in this direction cover four or five fields. As the result of arrangements made between the Commonwealth Government and the Government of New South Wales, the Newnes shale oil-field, which was out of production for some years, is again being worked. Had it not been for an unfortunate mechanical mishap a few weeks ago, the ultimate refinement of the petrol for commercial use would have been commenced last Saturday. It ha3 now been postponed for a fortnight. The output of petrol from this source is expected to amount to 10,000,000 gallons a year, and this rate of production will be increased. We are expecting and hoping that other shale-fields in Australia will be developed. In order to encourage that development, the Government decided a few weeks ago to extend the protection, which it is giving to the Newnes enterprise, to any other concern in Australia which engages upon the production of oil fa* om shale or coal. This means that any producer of shale oil or coal oil will be entitled to protection against imported petrol to the amount of 7|d. a gallon, and will obtain a remission of 5-Jd. a gallon excise as compared with petrol refined locally from imported crude oil. The Government has also increased the excise remission on benzolathe fuel which is manufactured -by the gas companies, and we are hoping, by cooperation with those companies, to reach an annual production of 4,000,000 gallons of benzola. For months past, the Government has been in consultation with the sugar companies and distilleries in connexion with the production of power alcohol. In the past, this fuel has been produced at the rate of about 2,000,000 gallons a year, and it is hoped to increase the rate of production considerably. We have encouraged the companies to increase their storage capacity, so that, as soon as we are able to arrange for additional supplies of raw material, production may be increased. A committee of inquiry, under the presidency of the Assistant Minister for Supply (M*r. Fadden), will be constituted to encourage the production of power alcohol from various commodities, not excluding our surplus wheat. The right honorable member for Cowper suggested that the Government might give more attention to proposals for encouraging the production of producergas units. Many months ago, the Government encouraged the production of hundreds of producer1, gas units by a somewhat novel, but, I contend, effective method. We induced a number of manufacturers to make units on the understanding that, if they did not sell them to the public within a certain period, the Government would buy them. In this way a great many units of an approved type have been made, and are in use in various parts of Australia. Other manufacturers have now entered the field, and we are expecting that this fuel will become a permanent substitute for a considerable portion of the petrol which we have been importing up to date, thus enabling us to save some part of the millions of pounds which has been going overseas every year to foreign petrol corporations. I can claim, therefore, that no one has more understanding of, or sympathy with, the motor industry than have members of the Government, or a greater reluctance to affect injuriously the prosperity of that industry. Certainly, no one in thi9 House has more personal sympathy with those engaged in the industry thaw I have. This is the best assurance I can offer that the rationing proposals, reluctantly adopted, will be administered in the most, sympathetic way. 265 F4U Capricornia 0 0 FORDE, Francis Michael Mr FORDE .- The motion of the right honorable member for Cowper (Sir Earle Page) should commend itself to honorable members of all parties. I believe that if a vote of the House were taken it would clearly indicate to the Minister for Supply and Development (Sir Frederick Stewart) that the drastic petrol rationing scheme proposed by the Government is quite out of favour with the people of Australia, and that there is no justification for it. With due respect to the honorable gentleman, who is a hardworking Minister, I am not satisfied with his speech; it contained too many pious hopes. The honorable gentleman expressed the hope and the confident belief that additional shale-oil fields will be opened up, and said that, but for a mechanical accident at Newnes, that field would to-day be in production. He made the further statement that for many months the Government had been in constant touch with the sugar companies, and that full and scientific consideration is to be given to the possibility of increasing the production of power alcohol, from various commodities, including surplus wheat. We have had statements of that kind ad nauseam. The Government has not come forward with a clear-cut policy, but on the contrary has made contradictory statements which have undermined the confidence of those engaged in the transport industries. These industries, according to the right honorable member for Cowper, have already reduced the volume of their employment by nearly 45 per cent. Indeed, in this matter, as in most of the other matters handled by the Government, hesitation, vacillation, and procrastination seem to have been the outstanding features of ministerial policy. Characteristic of its blundering was its handling of the Department of Information, a dictatorship over which it gave to Sir Keith Murdoch, the controller of a monopolistic group of newspapers and broadcasting stations in this country. The motor industry is of too great importance to Australia to be handled as the Government obviously has handled it. Directly invested in the motor transport industry and associated industries is the sum of £200,000,000; and 265,000 persons, or 13 per cent, of all wage and salary earners in Australia, are engaged in it. In a paragraph that appeared in the Sydney Morning Herald of the 24th November, 1939, it was stated that an estimate had revealed that a 10 per cent, loss of employment would be caused by a 20 per cent, rationing of petrol consumption, and that this would involve the loss of £2,700,000 in wages. The motor industry, with all its ramifications, provides revenue amounting to £31,000,000 annually, or nearly 26 per cent, of the total revenue collected by the Governments of the Commonwealth and the States. The executive of the Associated Motor Transport Industry of New South Wales, in a considered statement published in the Sydney Morning Herald of the 31st July last, pointed out that a 33 per cent, cut of petrol supplies would throw out of employment in Australia 26,000 drivers and owner-drivers. Different figures have been given as to' the unemployment that would be caused by the application of the policy of the Government. Those figures quoted by the right honorable member for Cowper will bear investigation. Severe restrictions would seriously affect the economic life of all industries, and be extremely prejudicial to many thousands of persons who are in employment to-day, as well as to the thousands of purchasers of machines on time-payment, who will find it almost impossible to meet their commitments, and who will be involved in a sacrifice, because so many second-hand machines will be offered for sale on an unresponsive market. The Australian Labour party has clearly enunciated its policy in regard to the necessity to adopt an extensive oil storage scheme. The Leader of the Opposition (Mr. Curtin) in his policy speech in 1937, and prior to that date, stressed the vital necessity to accumulate reserves of oil to meet a period of emergency, in order to avoid a haphazard, last-minute rush by the Government to institute drastic rationing of petrol consumption, such as is now proposed. The predicament in which the Government now finds itself is the result of its failure to take practical steps along the lines then suggested. On the 27 th November. 1939, the Minister for Supply said - In view of the possibility of petrol rationing next year, the Supply Department had decided upon an extensive development of substitute fuels. What practical steps have been taken in that direction? Apart from communicating by letter with the Colonial Sugar Refining Company Limited and other sugar companies, nothing of a practical nature has been accomplished since the day on which war broke out. In the Sydney Morning Herald of the 27th November, 1939, the Minister said that the Government would not impose rationing unless compelled to do so by circumstances, those circumstances being - 1, necessity for the conservation of dollar exchange; 2, the possibility of nonavailability of tankers to bring petrol to Australia; and 3, the needs of the defence forces. I am not convinced by what the Minister has said, or by anything that I have heard from other Ministers, that there is the slightest justification from the point of view of dollar exchange, the tanker position, and defence needs for rationing to the degree proposed by the Government. The fundamental benefit that would accrue from the rationing of petrol consumption in Australia would be the awakening of people of Australia to the necessity to make some sacrifice in their mode of living, and to appreciation of the fact that this country, although far removed from the actual theatre of war, is nevertheless at war ; but it cannot be said to be justified to the extent proposed. The Government has failed to convince the House that petrol rationing is necessary for the conservation of dollar exchange. This argument, which is often used by Ministers, is a myth. In effect, approximately Sd. a gallon has to be remitted in payment for every gallon of petrol brought into this country, plus shipping and exchange, and the whole of the proceeds of all companies are remitted in sterling to London, the bulk of the petrol supplies to Australia coming from non-dollar countries. 267 KV7 0 0 STEWART, Frederick Sir Frederick STEWART - They are paid for in dollars. 267 F4U 0 0 FORDE, Francis Michael Mr FORDE - At the outbreak or war, Great Britain had 3,000,000 tons of tankers. From September, 1939, to May, 1940, Great Britain lost 4.5 per cent, of its tanker fleet, France a little over 1 per cent., and Norway about 3 per cent. Since the invasion of the low countries by Germany, the tanker fleets of Norway, Denmark and France have been in the service of Great Britain and the Empire, with the result that to-day Great Britain has at its disposal 6,256,000 tons of tankers. This information has been made available by the petroleum press service, the authentic channel through which are published facts regarding the petroleum industry of the world. [Leave to continue given.'] The United States of America, which produces 60 per cent, of the world's petroleum, has a large fleet of tankers. The use of common sense will convince anybody that, because of the inability of the United States of America to ship oil to Europe, that country must have a. very large surplus of tankers. Because of the position in Europe, and the fact that American shipping has been cut off, the price of petroleum in the United States of America is most satisfactory. The glut on the market, due to inability to export, has resulted in production having overtaken consumption in the United States of America and the Netherlands East Indies, which are the principal producing countries; consequently, whoever attempts to justify rationing in Australia on the basis of the availability of tankers can be proved to be working on incorrect facts. There is scope for considerable expansion in respect of storage. The Government has asked the oil companies to utilize their storage tanks to the fullest capacity. I have been informed that the Shell Oil Company has its storage tanks utilized to 82 per cent, of their capacity; the figure in respect of the Vacuum Oil Company is 60 per cent. ; Commonwealth Oil Refineries Limited 40 per cent.; and other companies 23 percent. This matter requires investigation. It is true that thedifferent companies have gone to considerable trouble to increase their storage capacity. One of the biggest companies in Australia has almost completed the installation of additional storage at the request of the Commonwealth Government. But has the Government done everything possible in this regard? I am not satisfied that it has handled this matter with the enthusiasm for which the Minister for Supply was noted in respect of the national insurance scheme. If the companies marketed a one-grade petrol, a large number of garage tanks throughout Australia would be available to be filled on behalf of the Government and sealed securely for future use. This, plus hoarded supplies - and hoarding has been encouraged among the consumers of Australia - would enable up to nine months' supply of petrol to be held. Conditions in England are entirely different from those in the Commonwealth. Australia, with its far-flung areas and the demands of timber merchants, dairymen, farmers and others who are dependent upon oil for their livelihood, has needs different from those of a small, compact area like England. I believe that the Government will make a grave blunder if it imposes rationing to the extent of 33^ per cent. If some rationing scheme be necessary, it should be possible to introduce a system which will be less severe than the public has been led to expect. I have not been convinced by the Minister's speech. He admitted that he himself was largely in the dark, because this matter had been handed over to a board. Before this country is plunged into an election campaign, the people should have some details of the proposed petrol rationing scheme so that they may vote upon it. If we can take statements in the press as a criterion of public opinion, it is clear that a vast majority of the travelling public will reject the proposed rationing scheme, and the Government which sponsored it. 268 KXY Eden-Monaro Monaro 0 0 PERKINS, John Mr PERKINS . - I do not wish any remarks of mine to embarrass the Government, particularly as I do not question its bona fides in relation to the matter before the House. The rationing of petrol is a subject of great concern to the public generally, because vital interests are at stake. For that reason some credit is due to the right honorable member for Cowper (.Sir Earle Page) for bringing this matter forward. I shall not, at this juncture, support any scheme of rationing of which I know nothing. Even the Minister for Supply and Development (Sir Frederick Stewart) himself knows nothing of what is proposed. 268 KZF 0 0 LANE, Albert Mr Lane - He knows, but he will not tell us. Mir. PERKINS.- Before the Minister sanctions any scheme of rationing, I hope that he will give to the proposal of the right honorable member for Cowper his most serious consideration. The original scheme of the Minister provided for sufficient petrol to enable private users of cars to travel 40 miles a week. 268 KV7 0 0 STEWART, Frederick Sir Frederick Stewart - I did not bring that proposal forward. 268 KXY 0 0 PERKINS, John Mr PERKINS - That scheme has, however, been thrown overboard. 268 KV7 0 0 STEWART, Frederick Sir Frederick Stewart - I threw it overboard. 268 KXY 0 0 PERKINS, John Mr PERKINS - The scheme that u to come forward to-morrow may also be thrown overboard. The proposal to limit private motorists to 40 miles a week was ridiculous, although the Minister might have thought that it was sound. 268 KV7 0 0 STEWART, Frederick Sir Frederick Stewart - I did not. Mir. PERKINS.- The proposal was ludicrous. In my electorate there are people who live 100 miles from the railhead, and others whose homes are situated 50 or 60 miles from the nearest township. Of what use to them would be a scheme which enabled them to travel only 40 miles a week? There is no guarantee that any new scheme which will emanate from the board will not be equally ridiculous, because I have no great confidence in its members. Most of them live in the cities and are not sufficiently acquainted with country conditions to propound a scheme to cover country users of petrol. Any system of rationing which gives the same quantity of petrol to all users of cars, irrespective of where they live, would be most unjust. Every day one can see on the Sydney Harbour Bridge, hundreds of cars each containing only one person. In a district well served by trams, trains, omnibuses and steamers, many men still drive their own cars to and from their employment. Their position is entirely different from that of men who live, say, 8 or 10 miles from the nearest country town, and would have to walk if not provided with more than sufficient petrol to convey them 40 miles a week. Any scheme of petrol rationing which is brought forward will need to be examined most carefully. I do not altogether agree with the remarks of the right honorable member for Cowper as to the effect on employment of the rationing of petrol, although I admit that any system of rationing must cause some unemployment. Already work on road construction has been seriously curtailed, and many men have been thrown out of work. Even without compulsory rationing, there has already been a considerable reduction of the consumption of patrol. The Minister may be able to say to what degree the public has voluntarily reduced its travelling and saved petrol. I imagine that the saving is appreciable. That opinion is based on my own observations, and the statements of people who say that the traffic on the south coast roads of New South "Wales has fallen by 50 per cent, during recent months. If voluntary rationing has had that effect, it should not be necessary to take such drastic action as has been rumoured in the press in order to bring about a 33$ per cent, reduction of Australia's petrol consumption. As the right honorable member for Cowper pointed out, there are many ways in which petrol can be conserved without causing the hardship which the scheme envisaged would entail. For instance, by a system of zoning, it should be possible to reduce (the amount of travelling now done by milk vendors and other trades-people. By eliminating overlapping, beneficial results could be achieved. I admit that there must be some restriction of the use of petrol, and that, whatever form the restriction takes, there will be some further unemployment; but we should reduce as much as possible the hardship inflicted on the community. I hope that the Minister will not adopt the attitude that whatever the newly constituted board proposes must necessarily be right, but will give consideration to other proposals. I believe that an appeal to the motoring public to economize in the use of petrol would effect a great saving of motor spirit. There are great possibilities in regard to the extraction of oil from coal. I have brought under the notice of the present Minister, as well as his predecessor, one such scheme. Some honorable members accompanied me on a visit to a plant for extracting oil from coal conducted by a young Sydney man, who claimed that his process would enable oil to be obtained from coal at a cost of not more than 5d. a gallon. He has received no encouragement from the Commonwealth Government, although the Government of New Zealand was willing to investigate his claim. I have asked the Minister to inquire into this claim, but apparently it will not do anything in the matter unless it first learns the secret of his process of extraction. If the inventor of the process gives away that secret, he will be undone. The Government which gave to the proprietors of the Newnes project a grant of £300,000 should do something to encourage others like the young man to whom I have referred. I am convinced that there is something in his claim. 269 KV7 0 0 STEWART, Frederick Sir Frederick Stewart - He now has as much protection as is given to the Newnes people. 269 KXY 0 0 PERKINS, John Mr PERKINS - That may be so theoretically, but he is a poor man; whereas the company which the Government assisted was not without considerable funds. It is true that the Government sent an officer to investigate this man's process, but only to reject his claim. I again plead that his case be investigated, because I believe that it is worthy of the Government's interest. 269 JOM West Sydney Leader of the Australian. Labour party - nonCommunist 0 0 BEASLEY, John Mr BEASLEY . - Eleven months have elapsed since war was declared, but it would appear that the Government is no further ahead to-day in respect of a policy for safeguarding fuel supplies than it was at the outbreak of hostilities, although the fact must have been obvious at the outset that problems of foreign exchange and the provision of uninterrupted supplies of oil fuel would have to be faced. If the Government did not realize the importance of those two factors early in the war, it had no proper conception of its responsibilities. The Government has taken nine months to consider these matters. 269 KV7 0 0 STEWART, Frederick Sir Frederick Stewart - The position has deteriorated lately. 269 JOM 0 0 BEASLEY, John Mr BEASLEY - The Government claims to have done well in disposing of Australia's primary products, but, after providing for the full requirements of sterling countries, arrangements could have been made with the surplus to provide for the necessary foreign exchange, thus making provision against the necessity for rationing petrol. These foreign exchanges could have been built up in friendly countries. The necessity to ensure continuous supplies of petrol, and protect trade routes against the enemy, should have been obvious to the Government from the beginning. 270 JLZ 0 0 ANTHONY, Hubert Mr Anthony - Who was the enemy? 270 JOM 0 0 BEASLEY, John Mr BEASLEY - If the honorable gentleman does not know who Australia's potential enemy is, he never will know. The contradictory statements of Ministers in regard to fuel oil supplies have made them ridiculous in the eyes of the people. Last week the Minister for Supply and Development (Sir Frederick Stewart) said that the public need not be unduly alarmed at the decision to ration petrol, because the effect of the Government's proposal might not be so serious as was generally believed. On the day that he made that statement, the Minister for Air (Mr. Fairbairn), speaking at Perth, said that the rationing scheme would have to be more drastic than was at first contemplated. When two such contradictory statements by Ministers appear in the press on the samo day, the public cannot be other than uncertain as to what is intended. As reported in the Sydney Morning Herald of the 2nd July, the Minister for Supply and Development deplored any tendency towards panic. He then said - Perhaps the best re assurance that I can give is the fact that, with complete knowledge of the Government's intention, X myself recently bought a new car. As I understand that he has since denied making that statement, I leave it to that reputable journal to say whether or not its report was correct. I imagine that the statement was made by the Minister in an interview with representatives of the press. With such contradictions before them, the motorists of this country do not know whether they are going or coming. If the rationing of petrol be necessary, why did not the Government take steps nine months ago to introduce a moderate scheme of rationing, instead of inflicting on the public the drastic scheme which has now been outlined in the press ? 270 KV7 0 0 STEWART, Frederick Sir Frederick Stewart - Does the honorable member think that that should have been done? 270 JOM 0 0 BEASLEY, John Mr BEASLEY - Had a moderate scheme of rationing been introduced following the declaration -of war, the commercial interests of this country could have arranged to equip their vehicles with producer-gas units, and the change-over from petrol to producer gas could have taken place gradually. By that means drastic rationing now might have been avoided. For its neglect in this matter the Government must accept the responsibility. It should have foreseen the present situation, and taken precautionary steps. However, it seems clear now that petrol is to be rationed, largely because of the greatlyincreased consumption of the commodity by the Air Force and other services. Probably that increased consumption will more than counteract the saving of petrol by the public, following the raising of the price of petrol and the application of voluntary rationing. A matter to which the Government should direct its attention is the position of people who have entered into obligations in relation to the installation of producer gas units in an effort to meet the wishes of the authorities. Some people have, after considerable investigation, established plants to" manufacture producer gas units and other people have invested capital in partially installing such plants. They are both in difficulty now, as they do not feel justified in proceeding further, because they are unable to ascertain the exact intentions of the Government. There is undoubtedly a feeling abroad that the Government does not know what to do about this subject, in that it has not announced the degree of rationing which is to be applied. Its vacillating attitude has left many people in suspense. For this reason, I submit that individuals and companies which have almost completed their preparations for either the manufacture or the installation of new equipment should be given special consideration. The statements of responsible Ministers seem to carry little weight. People are being denied information which should be made available to them. This uncertainty has led to delay in the manufacture of producer gas units. Steps should have been taken a considerable time ago to encourage the marketing of this equipment at reasonable rates. As the right honorable member for Cowper has said, the Government should have announced its willingness to subsidize this new manufacturing industry so as to put the new equipment within the reach of all who depend upon motor transport. 271 L08 0 0 ROSEVEAR, John Mr Rosevear - The trouble is that the Government cannot make up its mind. Air. BEASLEY. - It has no mind, and the further we go, the worse becomes the situation. The proposal of the right honorable member for Cowper that some financial assistance should be afforded to people who are prepared to install producer gas units is a good one, but nothing definite in that way has been done. The trouble is that what we hear from Ministers to-day may be cancelled by what they say to-morrow. No business man of this country would be prepared to take the word of the Minister for Supply and Development on any of the aspects of this important subject. The Minister would have to put his name on the dotted line for his word to carry weight. We expected a definite declaration from the honorable gentleman to-day, but he merely said that his "style was cramped ". The style of the public is cramped, and so is that of the motor traders and motor users, and of the thousands of men who look to the motor industry for their employment. It is high time that the Government crystallized its ideas on this subject. A definite policy should be announced without delay. However, it is probable that, at a not distant date, the Minister and his colleagues will be replaced by others who will make definite decisions on this subjest and others and give effect to them. 271 KNX Wentworth UAP; LP from 1944 0 0 HARRISON, Eric Mr HARRISON . - There have been occasions when I have listened with a great deal of interest to speeches by the honorable member for West Sydney (Mr. Beasley), and have admired his clear thinking and capable exposition of ideas, but any such opinion that I may have had concerning the honorable member has been entirely changed by his speech on this subject. He said that the Government would not make up its mind on the subject, but I may well ask whether the honorable member himself has made up his mind. From time to time in this House he has stood as the champion of the unemployed, and, in speaking about the machinations of big business as it affected unemployment, has alleged that the big commercial interests of this country were particularly friendly to this Government. But on this occasion it is hard to tell where he stands. The honorable member said in one breath that we should not in any circumstances cause any additional unemployment, and in almost the next breath he said that for nine months the Government had done absolutely nothing in respect of petrol rationing. He remarked that it is now eleven months since war was declared and he went on to imply that petrol rationing should actually have been applied nine months ago. In these circumstances, I am entitled to ask the honorable member where he stands. Is he favorable to the preservation of normal employment in the petrol industry, or does he consider that rationing should have been enforced nine months ago? It seems to me that, in order to secure a political advantage, he is prepared to throw overboard his previous views on this subject. Looking at another aspect of the whole problem, I direct attention to the foreign exchange position, as presented to us by the honorable member. He said that the Government had sold our primary products to sterling countries, and implied that it should have sold them, not to the United Kingdom in order that thu people there might be saved from starvation or from the rationing of foodstuffs as it is enforced on the Continent of Europe, but to non-sterling countries. He would seem to advocate that we should have sold our primary products to Germany. 271 JOM 0 0 BEASLEY, John Mr Beasley - That is a lie. 271 10000 0 0 SPEAKER, Mr Mr SPEAKER -Order ! The use of the word "lie" is distinctly unparliamentary. 271 KNX 0 0 HARRISON, Eric Mr HARRISON - At any rate, the honorable gentleman questioned the propriety of our selling our primary products to sterling countries. Does he imply that we should have sold them to Russia? .Surely not; he belongs to the non-Communist party! Does the honorable gentleman suggest that we should have sold our foodstuffs to Germany, Japan, or any other country in preference to the United Kingdom? Where is his clear thinking on this issue? He has accused the members of the Government of not thinking clearly, but he has lamentably failed to give us any indication that his own thinking is clear. Before he made any accusation against the Government in this connexion he should have set his own house in order. The right honorable member for Cowper (Sir Earle Page) referred to our lack of storage for petrol, but he is not altogether blameless on this count. This Government was in office for only a few months before war was declared. If responsibility must be placed upon any Government for our lack of petrol storage facilities, it must be placed upon the Government of which the right honorable member himself was an influential member for a number of years. It ill becomes him to whip this Government for the absence of storage facilities, for he was the Deputy Prime Minister of a Government which had ample opportunity to provide such facilities. 272 C7E 0 0 PAGE, Earle Sir Earle Page - This Government did not carry out our plan. Honorable members interjecting. 272 10000 0 0 SPEAKER, Mr Mr SPEAKER - Noisy interjections must cease. The honorable member for Wentworth (Mr. Harrison) is entitled to be heard in silence. 272 KNX 0 0 HARRISON, Eric Mr HARRISON - When the Menzies Government assumed office just before the declaration of war it faced a very difficult situation. When the war occurred, it was given some small allotment in the foreign exchange pool. It then had to determine upon what commodities it would expend the sum allotted to it. Does the right honorable member for Cowper suggest that it should have spent its allotment exclusively on petrol? Does he suggest that the Government acted unwisely in using its money to buy a variety of necessary commodities? Surely he does not say that the whole of our foreign exchange resources should have been used to obtain petrol supplies. 272 C7E 0 0 PAGE, Earle Sir Earle Page - The Government of which I was a member laid its plans, but this Government did not give effect to them. 272 KNX 0 0 HARRISON, Eric Mr HARRISON - The right honorable member cannot get away from the fact that, in spite of our increased petrol storage facilities, we have supplies sufficient to meet normal needs for only fourteen weeks. The Government of the United Kingdom has supplies available for eighteen months and the Government of Canada has supplies to meet its needs for two years. 272 C7E 0 0 PAGE, Earle Sir Earle Page - I still say that our plans were not put into operation. This Government gambled on the preservation of peace, and unfortunately war occurred. 272 KNX 0 0 HARRISON, Eric Mr HARRISON - The right honorable member made some remarks concerning the number of tanks available. The Government knows that it could get tanks if it required them. In my opinion, the decision to develop our power alcohol industry will do something to solve the difficult problem that we are facing. At any rate, it will be more effective than the introduction of such fanciful ideas as asking people voluntarily to curtail their use of petrol. Some system of rationing is undoubtedly necessary. May I remind honorable members that the Sydney Metropolitan Water Sewerage and Drainage Board some time ago made a request to the people of Sydney to curtail their use of water. The request was practically unheeded, with the result that the board has now found it necessary to introduce a continuous and drastic rationing system. In my opinion, it would be foolish to rely upon people to observe a voluntary rationing scheme. Compulsion is essential. Some modification should perhaps be made to the Government's scheme, 'but undoubtedly compulsion must be applied. The Minister for Supply and Development has told us that a scheme of petrol rationing has been in " cold storage " for some time. We all know why it has not been introduced. The honorable member for West Sydney suggested that all our unused resources - should be transferred to defence, and he added that there was still unemployment in the community. It may be necessary ultimately to transfer our resources, both used and unused, to the control of the defence authorities, but things must be done in their proper order and I do not think that the time has yet come for that action to be taken. We are all aware that many economic theories are being expounded, but surely no one would advocate the premature transfer of all of our resources to the defence and munition works. It would seem that the honorable member for West Sydney is of the opinion that the time for such a step had arrived nine months ago. I do not think so. We are all aware of the circumstances that are forcing the Government's hand at this moment. These are entirely apart from any consideration of the foreign exchange position. In my opinion, the time for rationing has come, though there is room for some difference of opinion as to the degree to which rationing should be applied. If the financial situation were the sole consideration of the Government at this moment I do not think that rationing would be enforced, but that is not the position. We are facing quite different possibilities. I wish to deal briefly, in the remaining few moments at my disposal, with one or two suggestions made by the right honorable member for Cowper. He said that the co-ordination of transport services was necessary. Such co-ordination is already in operation in our capital cities, but the right honorable member must realize that it is not possible to co-ordinate all transport services. For example, the delivery of fragile goods cannot be made at the same time as heavy loading, and by the same vehicles. Fragile and perishable commodities cannot be transported with tons of bitumen, balks of timber, and the like. Some perishable commodities would 'be utterly destroyed if they were loaded on vehicles containing certain other commodities. For this reason, transport can be co-ordinated only in a limited way, and where such co-ordination is possible, it is already being practised. The right honorable member referred to the possibility of increased unemployment in the transport industries. It is one thing to mention this important subject and quite another thing to pull down some bright and easy solution from the atmosphere. As I see it, the right honorable member's submissions in this connexion answer themselves. I know very we'll that there is a surplus of oil supplies in the world, and particularly in the United States of America. Oil is available there at probably a lower cost than ever before. 273 10000 0 0 SPEAKER, Mr Mr SPEAKER - The honorable member has exhausted his time. 273 KZ9 Kennedy 0 0 RIORDAN, William Mr RIORDAN .- I desire to address myself briefly to the motion, particularly as petrol rationing affects a great number of persons in parts of the continent that have never yet seen a Minister or an Assistant Minister of the present Government. I refer to those who live far beyond the limits of our capital cities. I listened with interest to the Minister for Supply and Development (Sir Frederick Stewart) say that the Government was reluctant to introduce a scheme of petrol rationing. It is obvious that on the eve of an election the Government is hesitant to introduce any scheme which might incense the people. The Government knows very well that if it faced the people after having initiated a petrol rationing- scheme such as has been suggested, the people would rise up in their wrath and deal with it as it deserves to be dealt with. It is obvious that in this matter, behind the scenes, unseen and unheard, pressure is being brought to bear on the Government. The announcement of a scheme by the Minister for Supply and Development and the complete inability of the Government to make up its mind to implement or reject it have brought about chaos, not only in the motor industry itself, but also in other industries which depend for their existence on adequate supplies of petrol. The blundering on the part of the Government in connexion with this matter has left the people in a state of uncertainty. Almost immediately after the proposed rationing scheme was announced it was withdrawn following a public outcry, and steps were taken to delay a decision in regard to the matter. In the meantime the economic organization of the country and our war effort have been jeopardized. All the time the Government has its ear to the ground, endeavouring to find out what are the political reactions to its decisions. After the 7th September, however, when the people will have an opportunity to pass judgment on this Government, a very different state of affairs will prevail. Already the increased price of petrol has brought about a considerable diminution of- the demand. Those who formerly used their motor vehicles purely for pleasure now think twice before deciding on pleasure jaunts. The right honorable member for Cowper ('Sir Earle Page) has pointed out the disastrous effects that indiscriminate petrol rationing would have on the dairying industry. The Government should give very earnest consideration to the desirability of allowing liberal allocations of petrol to all primary producers. Any diminution of the supply of petrol to those engaged in the timber industry in the northern parts of the continent, and particularly in Queensland and Western Australia, where the timber industry is in a flourishing condition, will bring about widespread unemployment. We must also consider the effect of rationing on Australia's great pastoral industry and other important primary industries. Great difficulties will arise during the shearing season if the rationing scheme does not provide a reasonable allowance to shearers who are obliged to use motor transport in moving from station to station. To cite an example, in Queensland a gang of shearers may start shearing at, say, Logan Downs, near Claremont, proceeding from there to Carrondotta, near Cloncurry, 600 miles away, and finishing up at Charleville, 500 miles further south. In order to cover this large area, they are compelled to provide their own motor transport. It is customary for four or five shearers to share a car between them. Should any interruption of the normal procedure of shearers take place following petrol rationing, not only will the pastoral industry suffer through lack of shearers but also the earnings of shearers will be considerably reduced. Already there is a shortage of expert shearers because of enlistments in the Defence Forces. When dealing with the subject of the utilization of producer-gas units, the Minister for Supply and Development said that be had great hopes in that direction. His speech might aptly be labelled with the title of a song we hear so often these days, " Land of Hope' and Glory ". Among other things the honorable gentleman said that he hoped that the use of producer-gas units would be continued even after petrol rationing became no longer necessary. But what has the Government done to make these units available to the public at a reasonable price? We know very well that in failing to do anything in that regard it is merely obeying the dictates of the oil combines. It is understood that the objective sought by the Government in the institution of a petrol rationing scheme is a reduction of the civil consumption by 33$ per cent. What has the Government done to foster the local production of motor spirit? The Assistant Minister (Mr. Fadden) is to be chairman of a committee to be set up to inquire into the possibility of expanding the production of power alcohol. Why has the Government delayed until now the institution of an inquiry into Australian sources of supply? On one of the first occasions on which I spoke after I first became a member of this House three years ago I urged the Government to do something to develop the power alcohol industry. We have been at war for eleven months and the Government has only now decided to appoint a committee to inquire into this matter. Earlier in the year in answer to a question, the Minister for Supply and Development informed me that he had been in consultation with representatives of the cane-growers in Queensland regarding the manufacture of power alcohol. 274 10000 0 0 SPEAKER, Mr Mr SPEAKER - The honorable member has exhausted his time. 274 JLZ Richmond 0 0 ANTHONY, Hubert Mr ANTHONY .- The speech made by the honorable member for Wentworth (Mr. Harrison) was what might he expected from one whose national vision extends around the shores of Rose Bay, and is bounded on the east by Bondi and probably on the west by King's Cross. The honorable member lauded the Government and praises the Minister for Supply and Development (Sir Frederick Stewart) for having procrastinated in regard to this matter ever since the outbreak of war. He said that the Government deserves great praise for having done nothing until the situation became so bad that it was compelled to do something. I suggest that if the honorable member for his livelihood were dependent upon the foresight of the Government for the means of getting to and from market, or to and from his farm to the nearest town some distance away - he would not be praising the Government quite so lavishly to-day. The honorable member is so fortunately situated that if a petrol rationing scheme were to be brought into operation to-morrow he could jump into the nearest 'bus, tram or train and be transported to the city or to his place of business without delay. If any of his constituents live more than five or ten minutes walk from a tram-stop, they probably write a complaint to their State member about it. The position of those who reside in country areas is very much different. Any scheme of petrol rationing must envisage the difficulties not only of those living in country areas but also of those whose livelihood depends on the use of motor transport. I think I can claim to have exhibited some degree of foresight in this matter because in May or June of last year, before the outbreak of the war, I directed a question to the Minister for Supply and Development suggesting that in view of the possibility of war and of petrol restrictions being imposed, some effort should be made by the Government to subsidize the manufacture of producer gas units. I pointed out to the honorable gentleman that although they provided an alternative means of fuel conservation these units were too costly for the man on the land to buy. Since then, however, practically nothing has been done to encourage the manufacture of cheap producer gas units. Every advantage should have been taken of the opportunity to utilize our vast charcoal resources. This phase' of our war problem should have been foreseen when the war broke out. It was contemplated by many, but their warnings were not heeded by the Government. I regard the encouragement of the manufacture of cheap charcoal and gas producer units as a very definite part of the Government's responsibility. To encourage the use of such units in this country we must first have adequate supplies of charcoal distributed throughout the length and breadth of the land. What has the Government done to ensure that? The State governments have taken some action but, so far as I know, nothing has been done by the Commonwealth. 275 KV7 0 0 STEWART, Frederick Sir Frederick Stewart - The State governments are acting as the agents of the Commonwealth. 275 JLZ 0 0 ANTHONY, Hubert Mr ANTHONY - -I inspected producer gas units with a view to purchasing one for my own use, but I have not bought one because charcoal supplies are not available in my district. Although thousands of gallons of petrol are used daily in the northern districts of New South Wales, no charcoal depots have been established north of Newcastle. I would willingly install a producer gas unit in my motor truck if I could obtain fuel for it. The subject of employment, which the honorable member for Wentworth (Mr. Harrison) mentioned, is a vital one. But there could be no better way of ensuring continuity of employment for men thrown out of work because of petrol rationing than to encourage the use of producer gas units. Thousands of unskilled men could be engaged in the production of fuel charcoal at a reasonable cost. Another obstacle to the general use of these units is their high cost, which at present is beyond the purse of the ordinary individual. In making its plans for the manufacture of Australian motor cars by one company, the Government was careful to ensure that the vehicles could be produced at a low cost. On the other hand, it is allowing every small manufacturer to make producer gas units, with the result that few of them will be able to increase the volume of their production sufficiently to bring about a reduction of the cost of individual units. Since the Government has shown such concern for the economic production of an Australian motor car, it should be equally solicitous for the economic production of producer gas units, whose use will help the nation to conserve petrol supplies. So far as I am aware, the only oil fuel depots in New South Wales are at Newcastle, Sydney and Port Kembla; the whole of the north coast area is cut off from fuel supplies and we should be in a sorry plight if the north were invaded. The Government should encourage every private individual to purchase 40 gallon or 80 gallon drums of petrol if it really believes that additional fuel storage is required. Unfortunately, those people who had the foresight to store large supplies of petrol are threatened that any quantity above what may be permitted under a rationing scheme may be requisitioned. The Government has been inconsistent in this matter. It has changed its tune so often that the public is too confused to know why rationing is necessary. I believe that petrol should be rationed to a degree and I commend the right honorable member for Cowper for having raised this issue, although I do not necessarily agree with all of his suggestions. I sincerely hope that the board to which the Minister for Supply and Development referred will make recommendations that will be more acceptable ' than those first brought forward. 276 L08 Dalley 0 0 ROSEVEAR, John Mr ROSEVEAR .- Members of the Australian Labour party - non-Communist support the proposals of the right honorable member for Cowper (Sir Earle Page) ; a scheme to avoid the Government's drastic proposals for petrol rationing is long overdue. It is not unusual, when motions of this kind are under discussion, to hear the Government damned with faint praise, but to-day it has been praised with faint damns, even by its most ardent and slavish advocates, such as the honorable member for Wentworth (Mr. Harrison). The arguments of that honorable gentleman centred on the contentions of the honorable member for West Sydney (Mr. Beasley). He is either abysmally ignorant of the principles of relevant argument, or he wittingly put up a tawdry defence of the incompetence of the Minister for Supply and Development. The honorable member for West Sydney said that, as the result of contracts made by the Government, Australia had sold the major portion of its primary products to countries which pay in sterling, whereas the countries from which it bought its petrol supplies were non-sterling countries. The honorable gentleman then rightly adduced the argument that a government with any business acumen must have foreseen that one or both of two things could happen as a result of the war. It was almost certain that there would be a difficulty in finding the foreign exchange required for our purchases of petrol, or there would be a shortage of tanker transport due to enemy action. Neither of these two things was taken into account by the Government, which should have introduced rationing on a small scale at the beginning of the Avar in a way that would have caused inconvenience to no one. Motion (by Mr. GANDER) put - That the question be now put. The House divided. Ayes . . . . 89 (Me. Speaker - Hon. G. j. Bell.} 0 84 Majority AYES NOES Question so resolved in the negative. Debate interrupted under Standing Order 257b. Sitting suspended from 6.17 to 8 p.m. 277 bill Motion (by Mr. Spender) agreed to - That he have leave to bring in a bill for an act to amend the Gold Mining Encouragement Act 1040. Bill brought up, and read a first time. 277 277 KUG Warringah UAP Treasurer 1 0 SPENDER, Percy Mr SPENDER . - by leave - I move - That the bill be now read a second time. The Gold Mining Encouragement Act 1.940, was assented to on the 4th June, and regulations designed to give effect to the provisions of that act were made on the 17th July. The purpose of the amending bill is to remove certain drafting defects in the original act, and to make other adjustments of a minor character which are considered advisable in the light of advice offered by mining experts, whose assistance the Commonwealth invited and obtained during the drafting of the regulations. The proposed amendments are four in number - (a) Section 7(1) relating to refunds to prospectors, is being amended to remove an ambiguity in the existing wording of that section as regards " fine gold ". (6) Section 10(l)a is to be amended to alter the basis of determining the cost of mining and treating ore. Section 10(1) c requires amendment to correct a drafting error in fixing the maximum allowance of £2 an ounce of fine gold for development. New section 10a to give a dis cretion to the Commissioner of Taxation to adopt a variation of the quarterly period, as defined in the act, for the making of applications for refunds. Section 7(1) of the principal act, which relates to refunds of gold tax to bona fide prospectors, provides that - The Commonwealth eha.ll, subject to the regulations, refund to a person who is u bona fide prospector the amount of tax upon the first twenty-five ounces of gold upon which he directly or indirectly pays tax in any year. It is proposed to insert the word " fine " before the word " gold " in this subsection, in order to remove an ambiguity inherent in the existing wording. The intention of the section is that a refund shall be made of the amount of tax on 25 ounces of fine gold, and not on 25 ounces of gold, as expressed in the subsection. The present provision in section 10(l)a relates the cost of production to average cost of gold production in the quarter during which the gold is produced. The difficulty with this is that the ore, from which that gold is produced, is not itself necessarily mined in the same quarter. It sometimes happens that no actual ore is mined during a quarter, even though the ore, previously mined, is treated during the quarter. The Commissioner of Taxation is convinced, as the result of advice tendered by gold-mining experts and Mines Department officials in the various States, that the present provision is inequitable, and should be altered so that the cost of production shall have reference to the cost of the actual ore treated. A drafting correction is necessary in section 10 (a) c in order to ensure that the maximum amount to be taken into account as the average cost of development shall in no ease exceed the sum of £2. This was the definite intention set out in the second-reading speech on the original bill, but the existing provisions fail to give proper effect to that intention. In connexion with new section 10a, mining experts consider that a fixed quarter is not a convenient period for all producers in the industry. Books, statistics and records are, in some cases, kept either on a weekly or four-weekly basis. The proposal is that the act be altered to provide for variation of the period of a " quarter ". A new section is being inserted so as to give discretion to the Commissioner of Taxation in determining the exact period, on an application from a producer. Debate (on motion by Mr. Green) adjourned. 277 bill Message recommending appropriation reported. In committee: (Consideration of Governor-General's message). Motion (by Mr. Spender) agreed to - That it is expedient that an appropriation of revenue be made for the purposes of a bill for an ant to provide for the payment of a bounty on the production of raw cotton. Standing Orders suspended ; resolution adopted. Ordered - That Mr. Spender and Mr. Fadden do prepare and bring in a hill to carry out the foregoing resolution. Bill brought up by Mr. Spender, and read a first time. 278 278 KUG Warringah UAP Treasurer 1 0 SPENDER, Percy Mr SPENDER . - I move - That the bill be now read a second time. The bill provides for the payment of bounty on raw cotton produced during the years 1941 to 1945 inclusive. The basic rates of bounty for each successive year will be 4 3/4d., 4£d., 4£d., 4d. and 3£d. per lb. respectively, when the Liverpool spot price of American middling raw cotton is 6d. per lb. As the Liverpool price varies up or down from 6d. per lb., each basic rate of bounty will be reduced or increased by an equivalent amount, except that in no circumstances will the bounty be allowed to exceed 5£d. per lb. The bill also provides that the basic rate of bounty, and, therefore, all adjustments thereof in accordance with fluctuations of the Liverpool price, will be reduced at any time to the extent that any customs duty may be imposed on imported raw cotton. As it is possible that the Liverpool Cotton Exchange may close during the war, the bill enables the Minister to use the New York spot price of American middling raw cotton, and other factors, as a basis for determining an equivalent Liverpool price, so that Australian cotton growers may receive equitable rates of bounty. An annual sum of £150,000 will be provided from Consolidated Revenue for paying the bounty, and, as usual, the unexpended balance in any year will be available for bounty in any future year under the act, in addition to the £150,000 provided for that year. Other provisions in the bill merely give the usual powers which are essential to the efficient administration of the bounty, and the safeguarding of the interests of the Commonwealth. Existing raw cotton bounty legislation will expire on the 30th November next with the completion of the harvesting and ginning of the 1940 cotton crop in Queensland. Early adoption by Parliament of the present bill is essential, in view of the great need for substantially increasing local cotton production for war-time needs. These needs apply particularly to summer uniforms, and various items of equipment, including tents, canvas, &c, for all the fighting services, and the manufacture of certain high explosives. Australia's raw cotton requirements have advanced from 35,000 bales for the yea)1 ended on the 30th June, 1940, to at least 65,000 bales for the coming year. The 1940 Queensland crop will produce only S,000 bales. Were it to remain at 8,000 bales, much of the balance of 57,000 bales would have to be imported from the United States of America, involving a serious drain upon the Empire's sterling funds in that country. Largely increased production of raw cotton in Australia would permit of a considerable reduction of American imports, as both countries produce similar kinds of raw cotton. Hence, more of our foreign exchange resources would be available for the purchase of aeroplanes, machine tools, and other American commodities of great importance to Australia's war effort. A marked expansion of local cotton production will require considerable organization by the Queensland Government and its Cotton Board, and also much preparatory work by present and prospective cotton-growers in clearing many thousands of acres in light-timbered country, and preparing the land for planting by next October. This expensive work could not very well be undertaken without the security assured to growers by Parliament's early approval of the bill. The present legislation arises mainly from an exhaustive investigation of the industry made by the Tariff Board, the results of which are contained in its report of the 3rd April, 1939. In that report the Tariff Board drew attention to various unsatisfactory phases of the industry which had combined to cause the average yield an acre to fall to a very low level, now much below the yields in many other countries. The board found that Queensland climatic conditions were too variable and prone to dry periods to enable reasonably good yields to be obtained, and it suggested the obvious solution of growing cotton under irrigation, as has been done with great success in certain other countries. Cotton yields in Egypt, certain American States, Peru and Russia, where irrigation is utilized, are from three to four times as high as in Queensland, and the crops never fail. The Tariff Board also reported adversely on the efficiency of the industry in regard to cultural and rotation practices, weed control, and the selection and breeding of varieties which will resist pests, disease, and dry weather. Failing substantial improvement, the cost to the Commonwealth of making cotton-growing attractive would become too heavy a burden on the community to be economically justified. At the same time, the board declared that the presence of a cotton-growing industry in Australia was a form of insurance that, in times of emergency such as the present war, a considerable quantity of cotton would be available to Australia. It was not possible last year for the Government, with its manifold activities in organizing the effective prosecution of Australia's war effort, to give adequate consideration to a suitable long-term cotton policy which would solve the difficult problems mentioned by the Tariff Board. The Government had to be content to renew the bounty for a period of one year at a basic rate of 4£d. per lb., which was Id. per lb. higher than the rate recommended by the Tariff Board. It was granted for the purpose of encouraging an increase of production for urgent war needs, .and also to meet undoubted increases of the cost of raw cotton production brought about by the war. A few months ago, however, the Government was able to complete negotiations with the Queensland Government for satisfactory measures to cope with the problems noted by the Tariff Board. The Queen.=land Government has definitely undertaken, in writing, that its plans for improving the efficiency of the cotton-growing industry will pre eminently, and almost exclusively, provide for - the quickest possible conversion of cotton production from dry farming to irrigation by the most economic means for each selected locality; a special campaign by enough thoroughly qualified men to instruct all farmers personally and quickly as to the absolute need for practising correct rotations and other essential cultural methods; such campaign to be followed up persistently with the object of ensuring that the best practices shall be adopted by the bulk of the farmers in the shortest possible time. This campaign will include the circulation of suitable literature; a substantial increase, in quality and number, of the personnel of the Cotton Research Section, for the specific purpose of accelerating vital scientific work on plant-breeding, pests, diseases, soils, fertilizers, cultural practices, and especially the new problems that are sure to be encountered with production under irrigation; anything related to these measures. The ultimate cost to the Queensland Government of fully implementing these undertakings will be at least £650,000. That government has also agreed to ensure complete co-operation between its Department of Agriculture, the Queensland Cotton Board, cottonspinners and the Department of Trade and Customs on all relevant matters, particularly in regard to the supply at all times of the types of raw cotton needed by Australian users. A fully representative committee will be appointed soon to advise both governments on these matters. As evidence of the Queensland Government's recognition of the economic burden, and the grave risk of continuing to produce raw cotton in Australia wholly under dry-farming conditions, and of its good faith in relation to the undertakings to which I have referred, I mention that that government provided £65,126 during the financial year 1939-40 for loans to cotton farmers and scientific research, including £21,500 for irrigation works and experiments, and will provide a much larger sum for similar work during 1940-41. In addition, the Premier of Queensland has signified his government's intention to proceed with plans for the exploitation of underground water supplies, the provision of finance for individual pumping schemes, and for the construction of an additional irrigation weir on the Dawson River north of the town of Theodore. The Queensland Government has already inaugurated a scheme to ensure the adoption by cotton farmers of the best cultural methods, and the personnel of the Queensland Cotton Research Station is being augmented for the specific purpose of facilitating work on plant breeding and the control of pests. A special soils officer from the Waite Institute at Adelaide is at present actively engaged in the Callide and Theodore areas on the location of soils most suitable for cotton production. The Commonwealth Council for Scientific and Industrial Research will assist in locating better rainfall areas. The Premier of Queensland has advised the Prime Minister that his Government is endeavouring in- every possible way to improve and intensify the cotton yield, in order to develop an important Australian primary industry, with consequential benefits in the reduction of overseas purchases, and the maintenance of adequate supplies for Australian manufacturers. In view of these arrangements, the Government has brought down the present bill, which provides for gradually reducing rates of bounty during the next five years. The basic rate for the first year (1941) will be 4|d. per lb., as against the present basic rate of 4¼d per lb. The increase of id. per lb. is considered essential, partly in order to cover further probable increases of production costs due to the war, and to machinery, pipes and water for irrigation, but mainly in order to encourage a marked increase of production by making the industry reasonably attractive to farmers. After 1941, the basic bounty will fall by id. per lb. each year until 1945, when the basic bounty will be £d. per lb. less than for the 1944 season. These reductions of bounty are designed to meet the ifr. Spender. gradually lower costs of production which must flow from the steadily increasing degree of production under irrigation. It should be noted that the basic rates of bounty mentioned by me are related to a Liverpool price of 6d. per lb., and that they vary up or down as the Liverpool price varies from that figure. Since the war began the Liverpool price has always been higher than 6d. per lb., and is now 7.95d. per lb. If the last named Liverpool price should be maintained throughout the 19.41 period of production, the basic rate of bounty for that year of 4£d. per lb. would produce an actual rate of 2.8d. per lb., which would cover a total production of 25,700 hales of raw cotton under the annual appropriation of £150,000. This quantity is 8,000 bales more than Australia's record output. If the 1941 production should be less than '25,700 bales, the corresponding saving of bounty would be carried forward to any future year in addition to the regular provision of £150,000 for that year. Moreover, a large increase of production will reduce ginning costs per pound, and thus further benefit cotton-growers. In the cotton-growing industry there are now approximately 2,700 growers, 1,000 field workers and 2,000 cottonpickers. The ginneries employ 170 persons, the total number directly employed thus being 5,870. Advices just to hand from Queensland indicate that possibly 80,000 acres will be planted to cotton in Queensland for next year's crop, as against only 38,000 acres for the 1940 season. If this estimate should be realized, cotton-growers will have rendered good service to the Commonwealth in connexion with its war effort. It is worth while remembering that the cotton industry in all its phases is the largest individual industry in the world, and that, under conditions of the highest efficiency, this industry - in both the primary and the secondary branches - has every chance of becoming one of the largest in the Commonwealth. When cotton-growing has been converted almost wholly to production under irrigation, the cost of producing raw cotton in Australia will become substantially lower than it has ever been, and this will enable the industry to be continued on a much larger scale at lower rates of bounty or, alternatively, with tariff protection. Incidentally, a great expansion of cotton-growing will create opportunities for other farmers who may, through stress of war or shrinkage of exports of their present products, find it necessary to seek another vocation. Finally, the bill constitutes a cooperative effort by the Commonwealth and the Queensland Governments to raise the cotton-growing industry to a level of efficiency not nearly approached previously in -this country. Both Governments are sharing the necessary expenditure to this end. If this joint policy succeeds - and there is no reason why it should not do so - the total number of farmers and workers now engaged in the industry will be greatly increased, and Australia will be far less reliant upon overseas sources of supply than it is at the present time. I strongly commend the bill to this House. Debate (on motion by Mr. Forde) adjourned. 281 bill 281 Debate resumed from the 9th May (vide page 637) on motion by Mr.SPENDER - That the bill be now read a second time. 281 F4T Darling Downs CP Minister without portfolio assisting the Treasurer 0 0 FADDEN, Arthur William Mr FADDEN . - When this measure was previously before the House, the debate was adjourned in order to enable the provisions of the bill to be considered, and in order to afford to those interested an opportunity to make representations to the Government for the improvement or modification of the bill. In the intervening period, full advantage has been taken of the opportunity, and a large number of representations has 'been received and considered. They fall principally within two categories - those from prospective taxpayers who have sought amendment of the bill in order to remove or reduce their own liability, and those from representative bodies and taxation experts who have made valuable suggestions in relation to the drafting and operation of the bill. All of the representations have 'been carefully considered on their merits. As a result, it is proposed, when the hill reaches the committee stage, to submit certain amendments. A memorandum setting out these amendments, with a short explanation of each, will be circulated to honorable members for their information. I shall refer to the principal matters dealt with by the amendments. Provision is made in the bill for the appointment of a Board of Referees to deal with certain matters. It is relevant to point out that this hoard is not in any sense an appeal board. Under the bill, appeals from assessments of the Commissioner of Taxation will go either to the High Court or to the present Taxation Board of Review. The proposed Board of Referees will discharge different functions. It will exercise discretionary powers in relation to prescribed matters. These relate to concessions and not to the interpretation of the law. Under the bill, the board has power to recommend to the Minister that a higher statutory percentage than that prescribed by the bill should be allowed in respect of any class of business in which there is " an exceptional degree of risk". Upon examination, these words have been found to be too limited in scope. It is proposed, therefore, to alter the wording in order to enable the Board to recommend a higher statutory percentage to be applied to any class of business with which is associated some " unavoidable condition " which makes it just that a higher statutory percentage deduction should be allowed. 281 JOM 0 0 BEASLEY, John Mr Beasley - What is meant by " unavoidable condition " ? 281 F4T 0 0 FADDEN, Arthur William Mr FADDEN - That will be for the board to decide. There are such conditions as a series of droughts preceding a good year, and certain conditions associated with the mining industry. This alteration will allow consideration to be given, not only to cases where there is an exceptional degree of risk of loss, but also to other kinds of cases, such as those in which there are wasting assets. It is proposed also to amend the bill in order to permit the Board of Referees to grant a higher percentage standard to a company within a class where the profits of an accounting period relate to a period greater than that accounting period. The Board of Referees has power alao to allow to a company a greater amount of capital than that calculated under the provisions of the hill. Doubt has 'been expressed in some quarters as to whether the board would be limited in its determination to the methods of computation of capital set out in the bill. This was not the intention, and a simple amendment is proposed to allay these fears, and to make it clear that the 'board is at liberty to determine the true capital employed in Australia, irrespective of the provisions which bind the Commissioner in his computation of capital. Another important matter dealt with in the amendments relates to the adjustment of the capital computation in respect of non-purchased assets. Under the bill it was proposed that where such an asset appeared in the books of a company at the outbreak of war, viz., the 3rd September, 1939, the value then ascribed to the asset should be adopted for purposes of the computation; and that, where such an asset was created or acquired after that date, it should be taken into account at its value at the date of creation or acquisition. This provision has caused more controversy than any other. Although its inclusion in the bill was a genuine attempt to deal equitably with assets of this nature, a further consideration of the matter, in the light of a wealth of expert opinion which has been made available, has led to the conclusion that it would be unwise to retain the provision. Although it was thought, when the bill was drafted, that it would not be unfair to take companies at their own valuation with regard to assets created or acquired before the 3rd September, 1939, the fact is that much discontent has been evinced by companies affected, because lone which had adopted a conservative policy in relation to the writing down of assets would be worse treated than one which had permitted them to remain in the accounts at a higher value. It has been suggested, that, if the provision remains, it will be exploited by companies which will now write into their books large amounts of goodwill and other similar assets, greatly reducing or removing their liability for the tax. The consensus of informed and unbiased opinion on the subject is that the only way to prevent evasion in this connexion, and to place companies affected by the tax on a basis of parity, is to allow nothing at all, in the computation of capital, in respect of non-purchased assets of the nature of goodwill, trademarks, copy-rights, &c. The matter of dividends paid by one company to another has had to be considered. It has been alleged that to tax profits of an operating company, and then to include dividends paid out of those profits, in the taxable profit of a recipient company would amount to double taxation, and a variety of devices to avoid this has been suggested. After consideration of all of these, an amendment is proposed to delete altogether from the taxable profit of a company any dividend that it receives from another company. Thus profits will be decided to be taxable or non-taxable in the hands of the company which makes them, and will not be followed into the hands of any other company which may receive part of them in the form of dividends. A consequential amendment will be the exclusion from capital of the amount invested in the shares. Prom some quarters, the request has been received that, with regard to the deduction of State taxes, the basis of allowing taxes paid should be departed from, and taxes payable should be substituted. It should be pointed out that one of the things most keenly sought in the drafting of the bill was to adhere as closely as possible to the taxable income, for income tax purposes, for the ascertainment of liability under this law. This has such obvious advantages, both to the taxpayers in the checking of their assessments and to the department in simplicity of administration, and, therefore, the reduction of the costs of collection, that it need hardly be stressed. While State taxes paid in the accounting period are the criterion for income tax purposes, the Government would be most reluctant to prescribe any other basis for the purposes of this tax. It must also be remembered that what would suit one company in this respect would not suit another. The income tax law at one time permitted a company to elect whether it would have a deduction of taxes paid or taxes payable in arriving at the distributable income. An almost negligible percentage elected for taxes payable, the large majority preferring to have the deduction of taxes paid, this being a fixed, certain and unvariable amount which, over a period of years, arrived at the same result as the allowances of taxes payable. After considerable discussion, it has been decided to provide for the deduction of State taxes payable only in the first accounting period of a company formed after the 1st July, 1939; otherwise, such a company would obtain no deduction in respect of State taxes. After its first year, such a company, in common with all other companies, will be entitled to the deduction of taxes paid. Difficulties have been encountered in connexion with life assurance companies. Those that are purely mutual have no paid-up capital or shareholders' funds in the ordinary sense; in their case policyholders' funds are the nearest approach to shareholders' funds. It would have been possible to introduce a rather complicated provision to treat such funds as capital, but, as the Government is convinced that these societies do not make on these funds profits equal to the statutory percentage, and that the result would have been to render them non-taxable, the straightforward course of exempting them from the tax has been adopted. It may be mentioned that the War-Time Profits Tax Assessment Act 1917-18 similarly exempted these societies. Another point arises in the computation of the capital of a life assurance company which is not wholly mutual. It is not proposed to exempt these companies. For income tax purposes, they are allowed a deduction of four per centum of the actuarial value of their liabilities. Where the amount of liabilities, as calculated in the accounts of the company, exceeds the amount upon which the income tax deduction is based, it is proposed to treat the excess as accumulated profits and, therefore, as capital, in accordance with the general scheme of the bill. While on the subject of insurance, inference may be made to another proposed amendment. This relates to insurance business other than life assurance. Many companies carrying on business in Australia re-insure risks with companies outside Australia. The income tax law provides that they shall not be allowed any deduction in respect of the premiums that they have to pay to the absentee companies for this re-insurance. Thus, in effect, their taxable income includes, not only their own profit, but also the profits made on the business by the absentee companies with which they re-insure. The Government has recognized that it would be unfair to relate the total taxable income to the capital of the local company, as the percentage would be inflated by the inclusion in the taxable income of the reinsurance premiums paid out. It has, therefore, been decided to remedy this position by providing for a pro rata increase of the capital. Clause 21 of the bill deals with the computation of capital. It has been re-arranged for greater clarity, and to enable a more speedy understanding of its import to be reached. In addition, other matters have been provided for: - Reserves created out of the issue of shares at a premium are to be treated as capital. They are, in fact, in the nature of capital, and the purpose of the amendment is merely to make it clear that they are to be so treated. The provision to reduce capital employed, by the amount of a profit and loss debit, has been deleted. While this process would be correct in the technical ascertainment of capital, the Government is now satisfied that it would cause hardship if the amount upon which the statutory percentage deduction is to be calculated were to be reduced by the amount of temporary trading losses which will have to be made good out of future profits. An amendment is also to be made to ensure that capital invested in assets which have been thrown out of production a3 the result of war or other causes shall not be excluded in the computation of capital. Where a company receives a premium in respect of a lease, the whole of the premium comes into its taxable income and thus into its taxable profit. This will naturally result in a high percentage to capital. An amendment is proposed to apply to the taxable profit a rate approximate to a spreading of the premium over the period of the lease. This follows the principle of the income tax. These represent the principal amendments which the Government proposes to make. There are others of less importance to which no particular reference need he made at this stage but which will, of course, come up for the consideration of honorable members when the bill is in committee. Needless to say, there' have been many representations which the Government has been unable to approve. These vary from those that suggest that the bill should be widened in its scope, to those that suggest that it should be further limited. It has been alleged that small companies will be taxed while large companies will escape. As a general statement, this is not borne out by departmental investigations. Any company, large or small, will be liable to the tax if it makes more than the statutory percentage on its capital, and will be free from the tax if it makes less. It is unreasonable for critics to select certain companies of large capital and arrive at the conclusion, on their own calculations, that such companies will not be liable for the tax, and that therefore the tax is unsound. These critics, of course, have no information as to what is the taxable income of such companies, as distinct from their published profits, or what would be the capital they employ as distinct from their published figures. The basis of the tax was fully explained by the Treasurer in his speech introducing the bill, and need not be recapitulated. Et is obvious that there will be companies, both large and small, which will not be liable for the very reason that they do not make more than the statutory percentage upon their capital. The tax does not purport to be a tax upon all companies; therefore, nothing is proved by showing that certain companies will not be liable. It has been asserted in certain quarters that it is wrong to treat as capital for the purpose of this tax, the reserves and accumulated profits of a company. Unfortunately, these assertions have not been supported by any logical reasoning. There is nothing in the underlying idea of the tax which would justify the limitation of the statutory percentage to paidup capital. The idea is to base the deduc- tion upon the funds which the shareholders have at stake. Paid-up capital may be broadly referred to as the money which the shareholders originally contributed. Accumulated profits and reserves represent amounts which, instead of being withdrawn and utilized in personal expenditure or other investments, are permitted to remain, or, in effect, to be re-invested in the company. They are just as much entitled to be treated as capital, for the purposes of this tax, as if they had been distributed and further capital had been issued or called up to the amount of the distributions. 'Where shareholders have permitted profits to be retained in the business, to ensure its financial stability -a policy which cannot be criticized - it would be most unfair to deprive them of the statutory percentage deduction in respect of these accumulations. It has to be borne in mind that what are described as large companies usually have their shareholdings widely spread over the community, whilst small companies often represent merely the incorporation of certain activities of one or more wealthy men. It would be most misleading to gauge the special ability of a company to bear a war-time tax merely by reference to the amount of its profit. Regard must be had to its ability to pay special taxation and still distribute to its shareholders a reasonable dividend upon their invested capital. There seems to be some misconception regarding the computation of capital where companies have issued bonus shares or have created reserves by the writing up of the value of assets. Honorable members may be sure that the bill adequately prevents the inflation of capital by such methods. It is questionable whether bonus shares so issued could be regarded as " capital paid up in money or other valuable consideration." The bill does not leave this matter to conjecture. It prescribes the value at which assets shall be taken into account in the computation of capital, and where assets appear in the books of a company at values in excess of the prescribed value, the amount of the excess is deducted from capital. The amendment proposed in respect of non-purchased assets in the nature of goodwill further tightens up this aspect of the matter, for it is proposed to attribute no value at all to these assets in the computation of capital, whatever value may be attributed to them in the books of the company. It has been urged in some quarters that private companies should be excluded from the operation of the tax on the ground that they are already sufficiently heavily taxed. Whatever argument may have existed in favour of this view fails, because of the amendment of the Income Tax Assessment Act this year which imposed a tax upon the undistributed income of public companies. The Commissioner of Taxation has stated that, by the imposition of this tax, the majority of public companies will have to pay more tax upon their undistributed income than they would pay if their liability were ascertained in accordance with the provisions of the law which apply to the undistributed income of private companies. It is further alleged that the high rate of profits made by private companies is due largely to the exceptional ability and energy which their proprietors display in the conduct of their business and that, to the extent that it is due to these factors, the company should be relieved from special taxation. This argument cannot be accepted. Everywhere, the product of ability and energy is subjected to specially heavy taxation. If a man can make only £250 a year, he pays no federal income tax at the present time. If he makes £500 he pays relatively little; but if by the exercise of exceptional ability and energy he can make £2,000 he pays income taxes, Federal and State, out of all proportion to the amounts, if any, paid by those able only to make smaller incomes. It has been claimed that the tax should be applied to .individuals and partnerships as well as to companies. The Treasurer in his financial statement, delivered on the 2nd May, stated the reason why the tax is confined to companies. In seeking for the sources from which money for war-time expenditure should be obtained, the Government sought to strike a fair balance between individuals and companies. By an increase of the graduated rates, individuals are to be called upon to pay considerably increased income tax for the current financial year. As was explained by the Treasurer in his financial statement, it was necessary to obtain further taxes from companies. This could have been done, in a somewhat unscientific, although easy, manner, simply by increasing the flat rate of tax upon the taxable income of all companies. In preference to this, the Government decided to obtain the amount which seemed, at the time, to be required from companies by the undistributed profits tax, which applies only to public companies, and the war-time (company) tax which applies alike to public and private companies. For a proper appreciation of the matter, therefore, it is necessary to recognize that this tax is merely one of the forms chosen to obtain from companies what, in any case, it had been decided to obtain from them in some form or another. From this angle there would be no justification for the extension of the tax, at the present time, to individuals or partnerships. What the future may hold, in this regard it is at present impossible to say. It has to be borne in mind that an individual, whether deriving his income from a partnership or not, has to pay income tax at the graduated rates applicable to the whole of his income and is unable, as is a company, to have a portion of his income relieved from the graduation and assessed at a flat rate. It has been urged that the statutory percentage deduction should be extended to any capital which plays any part in the production of the taxable profit, whether that capital is employed in Australia or not. It must be said at once that this would cause a considerable reduction of the estimated revenue from the tax and would possibly necessitate a revision of the rates of tax in order to produce the required amount. To that degree, it would operate to the detriment of companies which employ the whole of their capital in Australia. The Government has decided not to accede to this request. It sees no reason why, for instance, a company should be allowed a deduction in respect of capital invested in head-office premises in London or New York, which in all probability it would have if it carried on no business at all in Australia. To the degree to which a company employs its capital in Australia, with the benefits which arise to the community from that employment, the deduction will be allowed. It is desirable to make some reference to the position of mining companies under this bill. Gold-mining is exempt from income tax, and as companies engaged in that industry have no taxable income they consequently have no taxable profit for the purpose of this tax. They are, however, subjected to special taxation under the Gold Tax Act. Leading representatives of the mining industry as a whole have been at pains to assure the Government that they desire no special treatment under the bill; but on the other hand are prepared to bear their share of the tax in common with other sections of industry. Representations have been made, however, on behalf of individual mining companies asking, as a maximum, for the complete exemption of all mining companies from the tax. The Government is unable to accede to this request, particularly in view of the attitude of the industry generally, as I have already mentioned. It is to be remembered that the Income Tax Assessment Act allows deductions in respect of expenditure upon plant and development of the mining property and that the taxable income, and taxable profit, for this tax are arrived at after the allowance of these deductions. There is no doubt that this completely meets the position with regard to the large majority of mining companies and obviates the necessity for any special treatment in this bill except as may be available to companies generally. Consideration of the individual cases mentioned has, however, revealed that the provision in the Income Tax Assessment Act does not, in all cases, work satisfactorily to allow a recoupment of capital expenditure upon plant and development over the life of the mine. It is, however, thought that this is not a matter for adjustment in this bill, and consideration is being given to an amendment of the Income Tax Assessment Act in order to extend the deduction in respect of plant and development. Companies carrying on mining businesses will be able to apply to the Board of Referees for an increased statutory percentage. While it is not possible to anticipate what the board might do with such an application, it is obvious that those companies on whose behalf special representations have been made have taken the pessimistic view that no such higher percentage would be awarded to the mining industry. The matters to which I have referred represent the main features in connexion with which representations have been made to the Government. There have been others relating to individual cases and to alteration of the verbiage of the bill, to which it is unnecessary to make detailed reference at this stage. From what I have said and the explanatory memorandum which will be available to honorable members, they will be able to obtain an understanding of the intentions of the Government with regard to the bill. 286 F4U Capricornia 0 0 FORDE, Francis Michael Mr FORDE .- The Opposition agrees with the principle of company taxation, and consequently intends to support the second reading of the bill, although some of my colleagues will doubtless have a good deal to say concerning certain provisions during the committee stage. The object of the measure is to extract from companies a portion of the additional revenue required to meet our war expenditure. It cannot be said that this is a popular measure, as it has, as the Assistant Treasurer (Mr. Fadden) admitted, met with a good deal of criticism. The Government has received representations from various sections of the community, and when the proposed amendments have been moved honorable members will be in a better position to debate the bill. At present we are at a disadvantage, because we have not before us the specific amendments to which the Assistant Treasurer referred, but I feel sure that the measure will be criticized somewhat severely by the representatives of small companies with respect to the incidence of the tax. A leading financial writer in Australia dealt with the measure in the following terms- 286 KUG UAP 1 0 SPENDER, Percy Mr SPENDER - Whom does the honorable member propose to cite? 287 F4U 0 0 FORDE, Francis Michael Mr FORDE - I propose to read a portion of an article which appeared in the Brisbane Courier-Mail on the 23rd July of this year. The writer stated - The Federal Government will meet with considerable criticism if, in the bill now before Parliament, it intends to proceed with the proposed tax on all profits over 8 per cent. In its present form the tax will not reach some of Australia's 'biggest and wealthiest companies. An analysis of the latest profits of 60 major companies shows that only fifteen, or a quarter of them, will come within its scope. Many companies, leaders in their particular industry, employing millions of pounds in their business, and whose names are household words, are among those which apparently will be missed. The measure has been criticized largely on the ground that large companies will not be Drought within the scope of this measure, and, if I understood the Assistant Treasurer correctly, he endeavoured to make a number of excuses for large companies not being brought within the ambit of the bill. 287 F4T 0 0 FADDEN, Arthur William Mr Fadden - I gave reasons and not excuses. 287 F4U 0 0 FORDE, Francis Michael Mr FORDE - I suppose that they have been excluded because they have been, able to use their influence with the Government. The measure has been roundly condemned by various income tax experts. It is unnecessary for me to mention the names of many large companies, some of which are well known in Australia, which will not be affected by this legislation. There is a general conviction among those to be affected by the taxes to be imposed under this measure that to tax profits on the basis of the capital employed is entirely wrong. Numerous complaints have been made by the representatives of small companies, and I trust that when the measure is in committee the Treasurer will accept amendments which will meet some of the complaints. It has been contended with a good deal of force that a badly managed company in -which a large amount of capital is employed may not show any profits, whereas a small company in which a small amount of capital is employed may be managed with such ability and care that it can show huge profits. It has been contended that this measure is a deliberate attempt to injure small companies in which a small amount of capital is employed; to do that would be wrong. At present a public company cannot be forced to distribute its profits and so has been able to accumulate large reserves upon which no taxation has been paid. Private companies have been compelled to distribute two-thirds of their profits, or in the case of holding companies, the whole of their profits. Accordingly it has been the practice and still is that (a) both companies pay on their profits; (?;) shareholders pay on their distributed dividends; and (c) in the case of a private company either dividends must be distributed or the company must pay the shareholders' tax on undistributed profits. Private companies have been at a disadvantage in every respect. "When the measure was introduced by the Treasurer (Mr. Spender) it was estimated that this tax would yield £5,300,000 per annum ; but in view of the numerous amendments which the Government proposes to introduce, can the Treasurer give us some idea of the amount which this tax is now estimated to produce? We were informed that for the year 1940-4:1 £4,250.000 would be collected. Apparently the Government is not following the legislation introduced during the last war. because we recall that it was roundly condemned by taxation commissioners, one of whom referred to it in his seventh annual report in these words - The tax is unequal and harsh in its incidence. These features of it are due to its peculiar construction, which, as shown by the figures quoted, permitted escape from the tax of the vast majority of large and old established businesses which have made consistently substantial profits, both in amount and in percentage on capital employed, whilst small and struggling businesses, particularly those which were commenced shortly before or after the outbreak of the recent war. were obliged to pay relatively heavy amounts in tax. Many young businesses, however, find themselves in positions of technical difficulty, from which there was no relief for them under thu law. Some of those businesses had clearly benefited by the war, though it was impossible to ascertain whether their prices had been reasonable or unreasonable. Others of the youn,:;' businesses had clearly made profits, apart from war conditions, and would probably have made greater profits if the war had not occurred. The Government had good reasons for declining to follow closely the previous war-profits legislation. The present Minister for Information (Sir HenryGullett) when a private member said " It was for the rich more than for any other class that the war was fought ". He used those words in urging that the additional revenue necessary for the defence of the country should be obtained by imposing heavier taxes on the wealthy classes of the community. In my opinion, such a proposal can he amply justified, because the rich have everything to lose if we lose the war. This bill provides that no business with a taxable profit of less than £1,000 will be liable to pay the tax proposed by the Government. The Government intends to impose certain rates upon the taxable profits of companies which exceed a certain percentage standard, namely, 8 per cent, of the capital employed by it. A special board, which will have power to increase this percentage in certain circumstances, will be set up. The rate of cax is to be graduated, commencing at 4 per cent, on the first 1 per cent, of the capital employed by which the taxable profit exceeds the percentage standard already mentioned. That is to say, if a company makes a profit of 9 per cent, on the capital employed, it will be taxed at the rate of 4 per cent, on 1 per cent, of such capital. On the second 1 per cent, profit on the capital employed by which the taxable profits exceed the percentage standard the rate will be 8 per cent., and so on. Although it is proposed that a company earning over 22 per cent, on the capital invested shall pay 60 per cent, tax, that rate does not apply to the whole amount over and above the percentage standard of 8 per cent., because the various increases are averaged; it means that the 14 per cent, profit over and above the 8 per cent., equalling 22 per cent, profit, will pay at an average rate of 30 per cent. During the last war the Government collected £7,800,000 in war-time profits tax ; this year it proposes to obtain £5,300,000 per annum. Although this latter amount is nearly as much as was received for the whole period of the last war, in view of the enormous profits which some companies have made, I wonder whether a still greater effort cannot be made by the wealthier companies. 288 KUG 0 0 SPENDER, Percy Mr SPENDER - How does the honorable member suggest that that should be done? 288 F4U 0 0 FORDE, Francis Michael Mr FORDE - I shall not discuss the details at this juncture. The Treasurer has at his disposal the services of an army of experts in the Taxation Department who, within 24 hours, could prepare a scheme to meet the situation to which I have referred. There are some wealthy companies in Australia. For instance., General Motors-Holdens Limited made a profit of over £1,000,000 in 1937, and last year its profits amounted to over £700,000. I desire to know to what degree the Government proposes to call upon that and other companies to pay taxes over and above what they were called upon to pay in peace-time. For the six years 1933-34 to 1938-39 the Government remitted taxes amounting to £5,500,000. Indirect taxes in 1919-20 amounted to £21,500,000 and during that period direct taxation yielded £20,100,000. In 1938-39 indirect taxes provided £58,700,000, whereas the proceeds from direct taxation fell to £15,200,000. In other words, while indirect taxes increased the revenue by £37,000,000, direct taxes yielded £5,000,000 less. For some years the Government has reduced direct taxation, whilst at the same time it has refused to make any provision whatsoever for better social services. To-day, with the country at war, there may be some excuse for not increasing social services, and the Government's policy in this connexion will bts accepted temporarily; but there was no justification for remitting in prewar days large amounts payable by the wealthy friends of the Government, such as big property owners, the Bank of New South "Wales, leading newspaper companies, and others. Although the Government proposes to obtain another £20,000,000 in taxes, of which £10,000,000 is to be derived from indirect taxes, I do not consider that the rich man is being called upon to sacrifice as much as the soldier, hi9 dependants and those associated with war activities will be .required to contribute. In his budget, the then British Chancellor of the Exchequer, Sir John Simon, pointed out that 10,000 persons in England with an income of £10,000 per annum and upwards had an aggregate income of £180,000,000. He went on to say that income tax, surtax and death duties absorbed £160,000,000 of that total. In a speech, in January last, Sir John Simon said - lae burden put on the budget by those who pay income tax and surtax may be realized when I remind you that the graduating scale rises to a figure of 17s. in the £1. I ask the Government to say to what degree it has followed the example of Great Britain in imposing taxes on the wealthy classes in the community. I realize that, in order to provide adequately for the defence of Australia, heavy expenditure will be necessary this year and probably for some years to come. I do not think, however, that all of the revenue required will be obtainable from taxes. I believe that the credit resources of the nation would have to be utilized in order to provide many defence works which to-day are financed by measures imposing taxes. The Government will be forced to incur much heavier expenditure on defence than in the past. After the next election, which appears to be not far distant, a Labour government will utilize the credit resources of the nation to carry out, not only reproductive works, but also defence works which to-day are financed chiefly by taxes imposed upon the masses of the people. Such a change of financial policy can be brought about only by a change of government. I realize that I should not be in order in pursuing that subject further at this stage, and therefore I shall await the committee stage of the bill before making any further comments in relation to it. 289 JNX Bass 0 0 BARNARD, Herbert Mr BARNARD .- I find myself at some disadvantage in discussing this measure, because the Assistant Treasurer (Mr. Fadden), in explaining certain proposed amendments, has just made what might ib termed a second second-reading speech. Ever since the measure was circulated some time ago, there has been considerable controversy in relation to it. Representations have been made to me in relation to two cases of hardship in my electorate. They are typical of many others which will arise if this bill becomes law. I tried to follow the Minister's reasoning, but I was not able to determine whether his proposed amendments will afford relief in such instances. I wish to refer to the position of certain small proprietary companies which are operating in Tasmania. One was started in a small way by a man who has paid all of his profits into the business, with the result that from time to time the enterprise has been enlarged. I am informed that if this special tax be imposed and profits be taxed on the basis proposed by the Government, this industry, which deals with the scouring of sheep skins and employs a number of Australian workers, will be ruined, because it will not be able to meet its liabilities without raising additional money. This company is typical of many others that will be affected if this bill becomes law. No doubt the Assistant Treasurer and his officers are fully cognizant of the fact that in Tasmania there is special legislation covering proprietary companies. Perhaps honorable members will be told something about that when the bill is in committee. At least I hope the Assistant Treasurer will be able to satisfy the taxpayers on that point. I should like to deal now with the tin-mining industry. From information which I have received it appears that for a considerable time past correspondence has been passing between the Treasurer and certain taxpayers who will be affected by this legislation. I refer first to the Aberfoyle Tin Mining Company. A letter was written by it to the Treasurer on the 22nd May last, but no reply was received to the representations made. On the 2nd August, the company wrote to the Treasurer - We beg to remind you that a reply to our letter dated the 27th May last has not yet been received from you. Surely ordinary courtesy required that a reply should have been sent to the company, which had taken the trouble to set out the full particulars of its position including its capital, expenditure, profits, &c. The circumstances surrounding this case call for some explanation. The letter continued : - In that letter we refuted the statement made to us in your letter dated the 24th May last and also made in the press on the 1st June last that "in arriving at the taxable income a deduction is allowed to a mining company in respect of its capital expenditure on plant and development", and we informed you that in actual practice that deduction amounts to the allowance of a small portion only of such expenditure. 289 F4T 0 0 FADDEN, Arthur William Mr Fadden - That has been amended. 290 JNX 0 0 BARNARD, Herbert Mr BARNARD - I know that amendments have been circulated, but honorable members are at a disadvantage because no opportunity has been given to discuss them. 290 F4T 0 0 FADDEN, Arthur William Mr Fadden - What is the name of the company to which the honorable member has referred? 290 JNX 0 0 BARNARD, Herbert Mr BARNARD - The Aberfoyle Tin Mining Company. It is a Tasmanian company, but so far the Assistant Treasurer has not favoured Tasmania with a very long visit, and I am afraid that it is now too late for him to do so because after next month the portfolio will be in different hands. The Assistant Treasurer has indicated by interjection that an amendment covering the matter to which I have referred is to be made, but we do not know whether or not the amendment will give the required relief. I am raising this matter now so that when the bill reaches the committee stage the Assistant Treasurer will be able to amplify his interjection and satisfy honorable members on this point at least. I have received a letter from the Tasmanian Tin and Tungsten Producers' Association, which has its head-quarters in Launceston, in my electorate. The secretary of the association writes - We desire to suggest that profits arising from tin production ho exempted from the war time company tax or that some special provision be inserted in the act to meet the peculiarities of the tin mining industry. 290 F4T 0 0 FADDEN, Arthur William Mr Fadden - That has been done. 290 JNX 0 0 BARNARD, Herbert Mr BARNARD - That is included in the proposed amendments? 290 F4T 0 0 FADDEN, Arthur William Mr Fadden - Yes. 290 JNX 0 0 BARNARD, Herbert Mr BARNARD - I should like to know whether or not the amendments go far enough to meet the situation in connection with which this company made representations to the Government. Here again honorable members are at a disadvantage in discussing this matter. The letter continued - The basis of this new taxation as set out in the bill is to be the income as assessed for Federal income tax. This assessable income is determined in the case of mining companies before making adequate provision for amortisation of the wasting capital oyer the life of the mine. Unless full allowance is made for writing off capital expenditure which cannot be otherwise recouped, it is obvious that the assessable income will include part of the capital which has been realized during the assessable periods. Our mines like all others are a wasting asset. In order that tin mining companies may be placed on an equitable basis with taxation, there should be some special provisions in the act to meet the different conditions. From the earnings of a tin mine there should be a sum set aside in such ;i manner that when the mine is exhausted the original investment will have been restored. It is the balance remaining after this sum is set aside which should be treated as assessable income. That seems to me to be a reasonable line of argument. After all, these mines are a wasting asset, and unless more generous treatment be afforded under this legislation, not only w,ill profits be taxed but also the wasting assets will cut into the capital and will not be recouped. There are some saving features in this measure. One is the setting up of a board of referees to deal with certain specific matters. I take it that the board will have power to deal with any grievances which may arise from time to time. That seems to me to be a very wise provision. In his second-reading speech the Assistant Treasurer said that a higher statutory deduction was to be allowed. I hope that the Assistant Treasurer will give the House further information on both of these matters when the bill is in committee, and will reply to the matters which I have raised in connexion with the small companies which are operating to a greater degree in Tasmania than in the mainland States. Also, I should like to hear something about how this measure will affect the mining industry, which is flourishing not only in Tasmania but in all parts of the Commonwealth. 290 KMZ 0 0 MARTENS, George Mr Martens - Languishing. 290 JNX 0 0 BARNARD, Herbert Mr BARNARD - I do not think that mining is languishing to any great degree in any part of Australia at present, because of the high prices of metals. The tin-mining industry suffered some setbacks for a while because of the low price of tin, but the price has now been pegged at a fairly remunerative figure and the position is very much better. As the Deputy Leader of the Opposition (Mr. Forde) said, the Opposition does not propose to oppose this measure. However, I think that some features of it will impose very great hardship on some sections of the community. The Government should have given more thorough consideration to all phases of this matter before introducing the bill. The Deputy Leader of the Opposition has pointed out that indirect taxation has been levied for a number of years, and that in some cases exemption has been allowed in respect of direct taxation. There is ample scope for investigation of what use can be made of the credit resources of this country to meet the financial exigencies of the present in a way which will benefit the general community. Every care should be taken to lighten not only the burden which this generation has to carry, but also the obligations which will be handed on to future generations. 291 KFE Swan 0 0 GREGORY, Henry Mr GREGORY .- I do not propose to deal with any of the details ot this measure. The bill is very complicated, and I am satisfied that my knowledge of taxation laws is insufficient to enable me to judge the effect of many of its provisions. It is noticeable, however, that every care is being taken in this bill to see that no injustice is done to any organization. I was rather afraid that the legislation would penalize some companies more than others. Certain organizations which have been hiding their profits for a number of years are now rushing them forward and making huge bonus share issues, which will be counted as part of the capital of the company before any tax is imposed. The honorable member for Bass (Mr. Barnard) need not worry about the effect of this taxation; the companies to which he refers are arrnply protected. Honorable members in this Parliament should realize that there is a war on and that every effort should be made to ensure that nobody will benefit to any great degree as a result of that war. Already the prices of many essential commodities have increased, and steps should be taken to ensure that such increases are not exorbitant. As an example of the contribution that the primary producers are making to our war effort, I cite the case of a small town in Western Australia which I visited recently in connexion with an appeal for war funds. There we managed to raise £2,700 free of interest, showing that the people in outback areas fully appreciate the fact that there is a war on and are prepared to make sacrifices. Unfortunately, only too often the people who are prepared to pay are allowed to do so, while others who are not so patriotic profit handsomely. During the last war, certain companies managed to evade the payment of both income tax and the special war-time profits tax, whilst other concerns, which perhaps did much less business, paid large sums in income tax and tens . of thousands of pounds in war-time profits tax. If honorable members opposite will look at the March issue of The Round Table they will find an interesting article on taxation in Germany. The article states that a single man earning 2,500 marks a year is called upon to pay a little more than 20 per cent, of that amount to the Government in taxes. A man with a wife has to pay a little less than that, while a man with a wife and children has to pay still less. All companies are taxed on profits over 6 per cent. The bill, as drafted, provides that no company shall pay the war-time profits tax until its profits exceed 8 per cent, after all Commonwealth and State taxes, except the war-time profits tax, have been paid. The rate of tax increases only gradually in the early stages. A company with a paid-up capital of £100,000 which made £15,000 in profits would pay £3,373 in Commonwealth and State taxes, which would leave it with £11,625. On that amount it would pay only £340 as war-time profits tax. I ask the Minister to alter the basis of the bill in order to provide that the war-time profi'ts tax shall be levied on profits exceeding 6 per cent. The increase could be small until a profit of 10 per cent, was reached. For my own part I would be in favour of the Government taking the whole of the profits in excess of 15 per cent. Certain companies have made very large profits through their war activities. That, in my opinion, is entirely wrong. All profits in excess of 15 per cent, or, it may be, even 10 per cent., after State and Commonwealth taxes have been paid, should become the property of the Government. I desire to keep costs in industry down and I am totally opposed to the making of huge profits. Before the war is over the Commonwealth Bank, and also all the trading banks, must issue unduly large credits which may tend to increase costs, and our people will be required to pay very much heavier taxes than they do at present. We shall undoubtedly have to increase the rate of income tax. The Government is spending many millions of pounds on war equipment, and money will have to be found to pay the bills. In these times of stress certain action may have to be taken to provide money, and something in the nature of inflation may become necessary, but our bills will have to be paid by money raised through the production of wealth ultimately. The only fair system to adopt is to oblige those who make big war-time profits to pay heavy taxes. I therefore propose to move at the committee stage of the bill that the tax shall operate in respect of all profits in excess of 6 per cent. The rate should be increased steeply after a profit of 10 per cent, is shown. We all know that many companies have increased their capital by the issue of bonus shares. The original 8s. shares of the Broken Hill Proprietary Company Limited, for instance, were, in a very short while, declared paid up at £1. The Australian Glass Company Limited has made huge profits, and it should have been " cracked " long ago. We should not expect our people to make heavy sacrifices in their private capacity, while we allow wealthy companies to continue to make exorbitant and untaxed profits. I shall not discuss the details of the bill, some of which, I frankly confess, are quite beyond me. I have no doubt, however, that the increased cost of living will impose a heavy burden upon the workers of this country, and that, while they are carrying this burden, they will also be expected to submit to heavier taxation. This bill should be sufficiently severe to ensure that no company will be permitted unduly to exploit the community. Exploitation has occurred. We all remember the experience of Great Britain in relation to its war-time profits taxation. In spite of the legislation in force in that country many industrial organizations made enormous profits for their shareholders. That kind of thing should not be permitted in this country. For that reason I trust that the Government will accept amendments to this bill in order to ensure that all undue profits shall be heavily taxed. 292 KX7 East Sydney 0 0 WARD, Edward Mr WARD .- The Opposition is under a distinct disadvantage in discussing this bill, for the numerous amendments that have been tabled make the measure practically a new one. We are not opposed to the bill. My own opinion is that, unlike most of the measures that have been introduced by the Government, it will not result in the giving of anything to the companies that will be affected ; but neither do I think that it will take very much from them. It i3, in fact, an innocuous piece of legislation tabled for the purpose of deluding the public into the belief that something is being done to ensure more equality of sacrifice. The Labour party believes that all excess profits should be confiscated during the war. No company should be permitted to increase its rate of profit in consequence of our participation in the war. Some honorable members on the Government side of the House formerly expressed the same opinion. The fact remains, however, that certain companies have been making an enormously increased rate of profit through their war activities. Such profits should be confiscated. One of the most amazing things in connexion with the bill was the admission of the Assistant Treasurer (Mr. Fadden) to-night that as the result of certain representations made to the Government numerous amendments were to be proposed. The practice that has been adopted in this connexion is applied only to legislation affecting big business. It will be remembered that some time ago the Parliament appointed a royal commission to inquire into monetary and banking operations. After incurring considerable expense the commission made certain recommendations affecting big financial institutions in Australia. Certain legislation was then drafted to deal with the subject. The then Treasurer (Mr. Casey) subsequently held a secret conference with the representatives of these financial institutions, the decision of which he declined to divulge. One result however was that no further action was taken in respect of the amending legislation that had been prepared. No doubt influence was brought to bear upon the Government with that object. When this bill was first under notice a well-known chartered accountant of Sydney, Mr. Rydge, who conducts a financial journal in New South Wales, made some outspoken comments on the Government's proposals. He said that the provisions of the bill would not affect many big companies which were making enormous profits in consequence of the war. The inference from Mr. Rydge's remarks was that certain companies would be affected in some way, and that they had something to fear from the operations of the hill. A careful examination of the companies which have distributed bonus shares recently will indicate that their directors knew the best time to act and that, in fact, they had been forewarned of the Government's intentions. Some companies were not forewarned, and it is, no doubt, from these that the proposed amendments have come. I predict that the Commonwealth Treasury will not receive very much revenue from the operations of this measure. I wish to examine some of the remarks made by the Assistant Treasurer to-night concerning the meaning of the amendments that are to be moved. The honorable gentleman read very rapidly the speech that had been carefully prepared for him by his departmental officers, and it was therefore difficult to follow his reasoning. I was able however to scribble some notes while he was speaking. I understood him to say that exemptions might be granted in the case of companies which undertook a greater element of risk than other companies. He said that a board of referees would be appointed to decide what constituted " greater risk " but he did not say who would constitute the board of referees. Judging from the appointments that this Government has made to boards of one kind or another in recent months, J shall not be surprised to see appointed to the board of referees the directors of certain wealthy companies which will be expected to pay this tax. We may be very sure that persons directly interested will be put in the position to regulate the imposition of the tax. The Assistant Treasurer did not mention the kinds of businesses which in his opinion incurred greater elements of risk. I should like to know what kind of businesses he has in mind. Apparently the averaging system of taxation which was discarded a year or two ago, is to be revived. 293 F4T 0 0 FADDEN, Arthur William Mr Fadden - That is not right. 293 KX7 0 0 WARD, Edward Mr WARD - I understood the Assistant Minister to say that if a company made large profits in one year it would be entitled to offset them against the lower profits made in previous years. Under that system we may be quite sure that the companies will be able to show that they are not earning sufficient profits to become liable to this taxation. 293 KFE 0 0 GREGORY, Henry Mr Gregory - I take it that that statement referred to pastoral companies which might have a good year following upon two or three bad years. 293 KX7 0 0 WARD, Edward Mr WARD - The Assistant Treasurer did not say anything about pastoral companies. Perhaps he will tell us whether he had them in mind. It is well known that big pastoralists very often have interests in other than pastoral activities. They may reap a large profit from those interests and only a smaller profit from their pastoral activities. Apparently the Government proposes to permit them to offset their smaller profits against their larger profits without reviewing, in any way, their ability to pay. That factor should undoubtedly be taken into consideration. Although a worker, who has only his labour to sell, may be unemployed and receive no income in any particular year, he is not permitted to offset his lack of income in that year against his income in a subsequent year when he may earn just sufficient to become liable for the payment of tax. This Government, or this Parliament, has never suggested that a concession of this kind should be applied in such cases. Unless it takes into consideration the circumstances of each taxpayer, as it does the circumstances of each industry, it is useless for the Government to talk about equality of sacrifice. The board of referees is to compute the capital employed in any company, and that body will not be governed by the limitations set out in the original bill. Incidentally, the Minister has not indicated who the referees will be. In view of past experience I imagine that these referees will discover many ingenious methods whereby the larger companies will be enabled to escape a considerable amount, if not the whole, of the tax. I understood the Minister to say that dividends from subsidiary companies could not be taken into account in computing the tax. What constitutes subsidiary companies? The definition in the bill is not convincing. For example, the Broken Hill Proprietary Company Limited has a number of subsidiary companies which are engaged in many activities. I feel certain that that company will be able to regulate its profits by increasing costs of production in its various subsidiary companies. By this and other methods it will be able to evade considerable tax under this legislation. Many other companies fall within the same category. How often have we been told that the Colonial Sugar Refining Company Limited does not make any appreciable profit out of its operations in Australia; that the bulk of its profits is made in Fiji and other countries. That argument has been put forward by certain honorable members on many occasions. In view of cases of this kind, how can we provide adequately for the determination of the amount of capital involved in the production of profits in our larger companies ? The Minister also said that it was desired to allow reasonable dividends to companies. The honorable member for Swan (Mr. Gregory) said that he would confiscate all dividends over 15 per cent. The average man would be happy if he had profitable investments and would readily agree to the Government confiscating all dividends over 15 per cent., The Labour party believes that it would be reasonable to confiscate war-time profits entirely. What does the Government propose to do with regard to watered stock? The Minister said that, in computing the capital upon which the rate of dividend was to be determined it was reasonable to include cash reserves, or reserves built up out of profits of other years, because, he contended, those reserves belonged to the shareholders, and as they were provided for the purpose of solidifying the position of the company, were employed to some degree in the production of profits. However, the Minister knows that reserves are built up for the purpose not only of solidifying the position of a company but also of hiding the company's true financial position. A method commonly employed is to build up large reserves, and, when the time is opportune, to increase capital through a distribution of bonus shares. In most cases the money devoted to the extension of plant and operations for the purpose of increasing profits is not new capita], but money accumulated in reserve through exploitation of the public. If we were able to get down to bedrock we should find that many companies which now possess large capital started with very little and built it up as the result of their power to exploit the public over a number of years. Unless the Government is prepared to take cognizance of facts of this kind, it will not be able to provide for what it terms reasonable dividends, but, on the contrary, will only enable these companies to continue to exploit the general public and to evade making their just contribution towards the cost of carrying on the war. I agree with the Deputy Leader of the Opposition (Mr. Forde) that people who have invested money in profitable undertakings have much more at stake in this war than have workers who have enlisted in the Army, Navy and Air Force. In order to enlist numbers of our soldiers have relinquished good jobs, carrying comfortable salaries, and have been prepared to accept miserable pay for military service because they believe that their duty is to make some contribution towards the defence of their country. On the other hand, however, the Government not only intends to relieve the large corporations from any risks in regard to their investments, but also is determined to protect them in every possible way. For instance, as the result of Government war expenditure, these companies are being provided with greater opportunities to increase their profits. I repeat that this measure does not meet with my full approval. As I have already said, whilst this bill will take very little from these companies, at the same time it will not give anything to them. However, if we on this side of the chamber were to oppose the measure, the Government would say that we were opposing its proposals to tax the larger companies. No doubt after the election we shall be occupying the Government benches. In the interim we urge the Government to oblige the larger companies to make a fair contribution towards the cost of our war effort. In introducing this measure, the Government simply seeks to place itself in the position of being able to say to the electors that, whilst it has asked the average citizen to contribute towards our war effort, it has asked the big companies also to make their fair share of sacrifice. This bill is merely electioneering propaganda and window dressing. If the Government were sincere in its expressed desire to prevent the big companies from making increased profits in war-time, it would confiscate all war profits. On the contrary, however, it proposes to appoint a board of referees which will be able to devise ways and means to enable the big companies to evade this tax. 295 JVR Perth 0 0 NAIRN, Walter Mr NAIRN .- The Opposition, I assume, approves of this measure for political reasons, but, at the same time, reserves the right to criticize it. The Minister estimates that this tax will yield £5,000,000 annually. In view of that fact, this measure cannot be described as a mere electioneering gesture. We must remember that the tax has been designed solely as a tax on war profits over a certain limit, and that profits to be made in this war are not likely to be so great as was the case during the last war. It is to the Government's credit that early in the war it took steps to keep down the cost of commodities. That necessarily limits profits. In view of this fact I was agreeably surprised to hear the Minister say that he anticipated that this tax would yield £5,000,000 annually. Indeed, when this bill was before the House last session I entertained a great deal of doubt as to whether it would meet the situation satisfactorily. Certainly, it represents an improvement upon legislation of a similar character passed during the last war, when the more powerful companies were allowed to escape their fair share of tax, whilst, at the same time, injustice was inflicted upon many concerns, especially those which had just commenced operations, or made accidental profits during the war. It would appear, at first glance, that many of the most powerful financial institutions in this country are likely to escape payment of this tax altogether, and I am still of opinion that some ground exists for that view. I formed that opinion after I had had the benefit of a conversation with the honorable member for Lilley (Mr. Jolly), than whom, perhaps, there is no better authority in this House on the subject of company taxation. It appears to be very doubtful whether many of the old established and more powerful financial institutions will pay any appreciable tax under this measure, because those institutions have been pursuing a conservative course over the years, seldom paying more than 8 per cent, dividend, but, at the same time, establishing reserves and increasing their capital by the issue of bonus shares. 295 KXT 0 0 PATERSON, Thomas Mr Paterson - That aspect is covered by this measure. 295 JVR 0 0 NAIRN, Walter Mr NAIRN - To some degree that is so ; indeed one reason why I shall support the bill is because it provides for the checking up of capital used in the business. On the other hand, this is a tax on war profits over a certain limit, and we must fix some limit, whether it be 8 per cent, or any other figure. The logical way to fix such a standard is on the basis of profits earned. It would not be logical to fix it on capital, or on the extent of a company's operations. Dividends of S per cent., or over, will be liable to this tax. It is proposed also to appoint a board of referees to determine the capital upon which the rate of dividend shall be based. I hope that these referees will examine very astutely the balance-sheets of the larger companies. There is a very strong suspicion that the most successful companies employ the best accountants and lawyers and that to a great degree they succeed in concealing their assets. They also proceed on the conservative basis, perhaps on the whole a wise basis, of not distributing too much of their profits but of holding a safe margin by way of capital. One purpose for which they have done that is that they have not desired to appear too affluent in the statements which they present to the public. I believe there is some ground for the suspicion which exists that there is need for a very close examination of the balance sheets and the books of the larger corporations extending back over a number of years. 296 F4T 0 0 FADDEN, Arthur William Mr Fadden - The expert officers of the Taxation Department have conducted such investigations for a number of years. Their tax reports are based on these investigations. 296 JVR 0 0 NAIRN, Walter Mr NAIRN - I know that the Taxation Department has been very efficient, but taxation is an ever increasing business, and it is no small task for the comparatively small number of expert examiners in the Taxation Department to go into the past transactions of hig corporations. I have a good deal of confidence in the officers of the department, and I hope that when a year has expired and we know the result of this taxation, the Treasurer will be able to inform us, without giving names, that this legislation has been attached to the big financial companies such as the Colonial Sugar Refining Company Limited, whose profits amount to approximately £1,000,000 a year. 296 F4T 0 0 FADDEN, Arthur William Mr Fadden - Profits made in Australia ? 296 JVR 0 0 NAIRN, Walter Mr NAIRN - There is a good deal of suspicion in my mind as to the value of the claim made by the Colonial Sugar Refining Company Limited that its profits are earned outside Australia. That subject has been discussed in some detail in this House, and I believe that there is a great deal of doubt as to whether the company could uphold its claim that its profits are really made outside Australia. The original draft of this bill has been improved very substantially by the amendments which have been incorporated in it. In reply to the honorable member for East Sydney (Mr. Ward) I would say that those amendments have been dictated not by big business, but on the contrary have been inserted for the purpose of giving relief to smaller business men. Undoubtedly this bill will hit proprietary companies, not the largest, and perhaps not the smallest, but mostly private companies. Many of them, of course, are making large profits. Where any company is making a profit of 8 per cent, or more, there is no reasonable ground for saying that it should not pay some extra taxes during the war period. I wish now to deal with the position of private companies consisting of one or two persons, or of a few persons, whose capital is small, but whose real assets consist of the personal capacity of the working members rather than the amount of subscribed capital. Some of those conducting these companies are making good incomes on a very small nominal capital, but they should not be taxed unnecessarily or unfairly on what would otherwise be nominally income from personal exertion. 296 F4T 0 0 FADDEN, Arthur William Mr Fadden - Such companies are provided for in the bill. 296 JVR 0 0 NAIRN, Walter Mr NAIRN - I am relying on the Assistant Treasurer (Mr. Fadden) to give a better explanation of that provision than I am able to obtain. 296 KXT Gippsland 0 0 PATERSON, Thomas Mr PATERSON .- There is not a great deal left to be said on this bill. What I propose to say can be said in a very few words. The bill represents a substantial improvement on the War-time Profits Tax Act passed during the 1914-18 war. This bill as proposed to be amended by the Government represents a very great improvement upon the form in which it was originally drafted, and to a considerable degree will remove certain anomalies and inequalities which were found in the original measure. It is apparent thatvery considerable care has been taken by the Treasurer and the officers of his department to arrive at a just basis for the computation of working capital. That is a most important matter when one is attempting to decide the rate of interest which shall escape taxation and that which shall be called upon to bear it. Contrasting the legislation passed during the 1914-18 war with this bill, if my memory serves me rightly, the act passed to take toll of war-time profits in the Great War dealt with excess profits only rather than excessive profits. There is a distinction, I think, between the two terms. In the act dealing with excess profits made during the Great War, the factor which decided whether a company should be taxed was whether or not the company had made profits in excess of what it had been making prior to the war. So, under that act a company might have been making huge profits before the Great War, but unless it made a still higher profit during the war, it would escape liability for tax under that measure. On the other hand, a company making relatively small profits prior to the Great War, whose profits during the war period went up to some degree, would be taxed on whatever that excess might be. This bill, in my opinion, contains a very great improvement on that principle because it imposes tax on excessive profits rather than excess profits. The distinction which I am trying to draw between the use of the words " excessive " and " excess " is simply that profits under this bill do not require to be in excess of what a company was making before the present war. So long as profits are excessive from the point of view of what they should be in war-time they are taxable. In the bill now before us a common figure of 8 per cent, is laid down above which taxation shall commence for all companies. The tax rises by steps of 4 per cent, to a maximum limit of 60 per cent., which limit is reached when a company is making profits that would represent interest of 23 per cent, on capital. The attempt to make this a graded tax is in strict accord with what we do in connexion with personal income tax. We make the man who has a big income pay at a much higher rate than the man whose income is small - that is reasonable - and in this bill we propose to tax much more heavily companies making high rates of interest on their capital than those whose rate of interest on their capital is less. If this bill were as unalterable as the laws of the Medes and Persians, I would be opposed to it, because it does not go as far as I feel sure will later become necessary. I would not be satisfied to leave as a permanency any war-time tax which loaves companies with about 80 per cent, of the profits that they make up to 23 per cent, on their capital, and with 40 per cent, of anything they make in excess of that 23 per cent. That is how it works out. Honorable members will realize that the first 8 per cent, is not taxable, and that on the next 15 per cent, the gradations of tax rise until the cm full 60 per cent, is reached at the top figure, so that half of the 60 per cent, is really the average that is taken from the difference between 8 per cent, and 23 per cent. About 30 per cent, is taken of the profits in excess of 8 per cent, and up to 23 per cent., and if one spreads that 30 per cent, over the whole of the 23 per cent., really about one-fifth or 20 per cent., is taken in taxation from the company, which is left with SO per cent, of the first 23 per cent, dividend that it makes. In excess of that, it is left with 40 per cent., because 60 per cent, is the maximum percentage of taxation imposed. Whilst I look upon that as insufficient, I do not think that it will be permanent, and I think it wiser to put the taxation screw on gradually rather than do it with a full twist, because if it is done gradually, there will be less risk of a heavy slump of values of shares and of reduction of employment through companies curtailing their activities owing to excessive taxation. I think, though, if the war lasts, it will be necessary to make increasingly heavy levies upon profits, and I believe that this bill will leave room to do so in three ways. The time may come when it will ba necessary, if this war lasts for any considerable time, to lower the standard of 8 per cent. That is one way in which this taxation can be increased. Another way is by increasing the height of the gradations, making them, for instance, 5 or 6 per cent, instead of 4 per cent., and the third way is by carrying the gradations up to a greater final height, perhaps up to 80 per cent, or even to 100 per cent, over and above a certain profit level. That may have to be done in the future, but I am content with the bill as it is for the present because of the wisdom of tightening the taxation screw gradually. 297 009FQ 0 0 CURTIN, John Mr Curtin - The total yield from this tax in one year will be approximately £5,000,000. That does not appear to be a substantial contribution to be made in war-time by all companies whose dividends exceed 8 per cent. 297 KXT 0 0 PATERSON, Thomas Mr PATERSON - That is so, but £5,000,000 is not the total of the taxes which companies will pay. They will be called upon to pay the ordinary company rate of tax. 298 009FQ 0 0 CURTIN, John Mr Curtin - Quite so, but that point appeared to me to be relevant to the honorable member's argument about the obligation to tax excessive profits regardless of how they are earned. 298 KXT 0 0 PATERSON, Thomas Mr PATERSON - I see the honorable gentleman's point. Reference has been made to-night to large and powerful companies, and they have been contrasted with smaller companies. It has been suggested that some of them may, or, indeed, will, escape this particular tax, whilst small companies with much less capital will be taxed. Well, the basis of taxation in this bill is dependent on not the size of the company, but the rate of profit which the company is making in relation to its capital. One might have a large and powerful company making a profit of 5 per cent, on its capital and a small company making 50 per cent. The small company would he taxed because it was making an exceedingly high rate of profit on its capital, and the large would escape because the rate of profit which it was earning on its capital investment was relatively small. Then, again, large and powerful companies very often consist of a large number of small shareholders, whereas often the shareholders in small companies are a few wealthy men. Some of the sympathy given to the smaller companies in that respect is perhaps wasted. 298 L07 0 0 LAZZARINI, Hubert Mr Lazzarini - Mo3t of the capital of big companies consists of watered stock. 298 KXT 0 0 PATERSON, Thomas Mr PATERSON - I think that the Treasury is taking care of the position regarding what can be accepted as working capital. 298 KRH 0 0 MCHUGH, Sydney Mr McHugh - It needs to do so. 298 KXT 0 0 PATERSON, Thomas Mr PATERSON - Yes. Great credit is due to the Treasury officials who have put that matter on a proper basis and excluded, for example, goodwill unless it is paid for in hard cash. 298 009FQ 0 0 CURTIN, John Mr Curtin - Otherwise, it is an endowment provided by the community. 298 KXT 0 0 PATERSON, Thomas Mr PATERSON - Exactly. I support the bill, but I do not regard the rates as final. They are the start, but I believe that they will have to be raised. Question resolved in the affirmative. Bill read a second time and committed 298 adjournment Tamworth State By-election : Censorship. Motion (by Mr. Fadden) proposed - That the House do now adjourn. 298 KX7 East Sydney 0 0 WARD, Edward Mr WARD .- I bring under the notice of the Government what I consider to be a very serious infringement of the rights of the Labour party in this country. The Labour party at the moment in New South Wales is engaged in a by-election campaign in the Tamworth State electorate, and we find that it has been seriously handicapped by the censorship authorities, which, we consider, were actuated by nothing more than political motives. The purpose was to hinder the Labour party's campaign. The Labour party had proposed to make recordings of speeches by prominent- members of the movement and broadcast them throughout the electorate. The script of these speeches was handed to the censorship authorities, who took no exception to it. Doubtless they read it and disagreed with the subject-matter; but they were not prepared to say that that was why they took action to ban the broadcasting of these speeches. They said that the script was all right, but they objected to artificial sounds which were introduced into the recordings at different periods to denote applause and interjections. In order that honorable members may understand the position I shall read one or two extracts from one of the banned speeches. No doubt members of the Country party and the United Australia party will then understand why the censorship authorities, because of their political bias, used their power to prevent these recordings from being broadcast to the people. The script read - It lias been loosely and falsely stated by United Australia party propagandists that Labour has no practical policy for successful prosecution of the war against Fascism. 1 now want to give that imputation the lie direct. Let us first of all take a glance at current history. France has surrendered. The terms imposed on our former ally by Hitler and Mussolini mean the complete domination of France by the Fascists. How was this surrender brought about? This point is important. It was not brought about by the mass of the people who loved their country. France surrendered as a result of intrigue on the part of wealthy bankers, big business men and monopolists - men who would rather sacrifice their country than their business and their profits. Very well. To-day, Australia faces the crisis - a crisis brought about, not by the Australian people, who also love their country, but by the Government, which in the past supported Chamberlain's policy of appeasement. Let me remind you, my friends, that to-day Chamberlain and Daladier have been condemned by the very people who supported them. We are called upon - and rightly so - to be anti-Fascists in every thought and deed. 299 KZF 0 0 LANE, Albert Mr Lane - Mr. Speaker, I rise to a point of order. The honorable member for East Sydney (Mr. Ward) is not reading the script correctly. It contains more than he has indicated. Artificial applause is inserted in the script. 299 10000 0 0 BELL, George Mr SPEAKER (Hon G J Bell There is no point of order, but I remind the honorable member for East Sydney (Mr. Ward) that he must accept responsibility for what he says when he makes a quotation in this House. 299 KX7 0 0 WARD, Edward Mr WARD - I accept full responsibility, Mr. Speaker. The script continued - But let me ask you, " Who are Fascist in this country?" Let me tell you, "The Labour movement - the workers - are anti-Fascist, the defenders of freedom, security and democracy." Cast your mind back a little while. Who was it demanded the deportation of the Nazi spy, Von Luckner? 'J.he Labour movement. Who was it that entertained and feted the Nazi count? Prominent members of the United Australia party! Cries of " Shame " are inserted at this stage - Let mc remind you of something else. It was the Labour Government that demanded, "No war materials for confessed enemies of Australia". It was the United Australia party-United Country party Government which coerced the waterside workers into loading scrap iron for consignment to an Axis power. Make no mistake, Labour is the strongest bulwark of all against Fascist oppression. The Australian Labour movement will fight to the death against Hitlerism and Fascism in all its forms. But Labour does not agree that the way to defeat Fascism is by Fascism. This is the kind of speech that I should like to make in the Tamworth by-election campaign, because it coincides with my views and those of the Labour party generally. The remainder of the script is very interesting. On some other occasion I shall probably read it to this House. I have read these brief extracts in order to indicate to honorable members what kind of a speech had been banned by the censorship authorities. Immediately I learned that exception had been taken to these recordings I attempted to communicate with the Prime Minister (Mr. Menzies), who was then in Brisbane, but I was unable to get in touch with him. I spoke to his private secretary, who advised me to communicate with Sir Keith Murdoch, who is in charge of the Department of Information. I then telephoned Sir Keith Murdoch in Melbourne and he said that, although he had discussed the matter with the Chief Censor, Mr. Jenkins, he himself was not responsible for the decision of the authorities ; it was a matter entirely for Mr. Jenkins. I next spoke to the Chief Censor, who said that the authorities had taken exception to the recordings because they regarded them as " fakes ". They considered that, as the speech had not been delivered at a meeting, the recording conveyed a wrong impression. Anybody who knows anything about radio broadcasting will agree with me that 60 per cent, of radio programmes on all matters are what might be called " fakes " in the sense that various sounds are introduced in order to create certain impressions in the minds of listeners. The fact that applause is indicated at periods in the speech is not misleading, because if that speech were delivered to an intelligent audience anywhere it would be applauded to a greater degree than the sound effects in the recording actually suggest. I submit that the whole of the script is an accurate record of how Labour supporters and, in fact, any democrats in this country, would express their opinions of the present Government. The most serious aspect of this matter is that the censorship organization was established not for the purpose of exercising political bias but for the purpose of preventing the dissemination of news or views likely to be prejudicial to national defence. It is a ridiculous state of affairs if the censorship authorities, who are not answerable to the people, can set themselves up as judges, not only of what might be considered to be valuable information for the enemy, but also of what is permissible for political organizations to place before the general public. The practice of making recordings to be broadcast during political campaigns is not new. The United Australia party and the United Country party have used similar propaganda. 300 KZF 0 0 LANE, Albert Mr Lane - Their records were usually truthful. 300 KX7 0 0 WARD, Edward Mr WARD - In previous political campaigns the United Australia party and the United Country party have sent their sound trucks travelling round country districts in order to broadcast such recordings. In those recordings applause has been indicated at appropriate places and no exception has been taken to them by the authorities. It is .remarkable that on this occasion, the first upon which any exception has been taken to this procedure, the action was taken against the Labour party during the course of the Tamworth byelection campaign. I bring this matter before Parliament now so as to indicate to honorable members, and to the public, the manner in which the Government, through, its officials, is allowing power to be abused. This action indicates the handicap which is likely to be placed upon the Labour party in the forthcoming elections. We have been told that public servants should have no political opinions in the conduct of their departments - that they should have no "political bias on the job. That, we have been assured, is the principle that has always guided the Public Service. Now, it would appear, the Government is selecting, as officials, particularly for the Censorship Branch, officers whose political opinions it approves, knowing that those officials can be relied upon to prevent the Labour party from presenting its case properly and fairly to the public. I ask honorable members what is the really important part of any speech. It is not the applause or the cheers or the cries of " Shame ", but the matter contained in the speech, whether that matter be conveyed over the radio, or by the printed word, or personally by a candidate addressing an audience. The action of the Censorship Office is an infringement of our rights. Mr. Rorke, of the Sydney censorship Office, was asked whether he would permit the records to be broadcast if they were made at a meeting convened by the Labour party, and addressed by Labour speakers, and, to our surprise, he said that there would be no objection to that procedure. Yet the records of which I nave spoken were banned because it was alleged they were fakes. As to that, I need only point out that instalments of a play are broadcast over the national network every Sunday night, and in the theatre where the broadcast is made a man with a large cardboard placard on which is printed the word " Applause " comes to the front of the stage every time that the producer of the play wants the audience to applaud. It is obvious, therefore, that the objection of the censorship official to the broadcast of the Labour party's records was based on a mere pretext. Apart from that, I maintain that it is not the function of the censorship officials to say whether such things are a fake or not. Their job is to prevent valuable information from reaching the enemy. In this instance, the officials have exceeded their authority. If the defence of the Government is that this action was taken on the responsibility of the Censorship Office, then the Government can prove its good faith by immediately giving instructions that this stupid proceeding must cease. 300 10000 0 0 SPEAKER, Mr Mr SPEAKER - The honorable member has exhausted his time. Question resolved in the affirmative 300 papers The following papers were presented : - Northern Australia Survey Act - Aerial, Geological and Geophysical Survey of Northern Australia - Report of Committee for period ended 31st December, 1939.' Ordered to be printed. Commonwealth Public Service Act - Appointment of L. G. Alexander, Department of the Interior. Landa Acquisition Act - Land acquired for Defence purposes - Heidelberg, Victoria. National Security Act - National Security ( General ) Regulations - Orders - Taking possession of land, &c. (15). Use of land (9). Rabbit Skins Export Charges Act - Regulations Amended - Statutory Rules 1940, No. 149. 300 22:35:00 House adjourned at 10.35 p.m. 301 ANSWERS TO QUESTIONS The following answers to questions were circulated: - 301 301 KZX FLP; ALP from 1936 0 0 LAWSON, George Mr GEORGE LAWSON n asked the Minister for Munitions, upon notice - How many annexes hae the Government established in Brisbane? Where are they located? Are any of them, at the present time, engaged in manufacturing war materials? If so, to what extent? 301 N76 UAP 1 0 MENZIES, Robert Mr Menzies - The answers to the honorable member's questions are as follows : - The scheme in respect of annexes did not provide for the establishment of any in the Brisbane area, but the honorable member can be assured that the possibilities of this area will be taken fully into consideration in connexion with the munitions production programme which is now being actively developed. 2, 3 and 4. See answer to No. 1. New Airport at Melbourne. 301 KLM 0 0 MALONEY, William Dr Maloney y asked the Minister for Air, upon notice - Will he lay on the table any reports made to the Defence Department by any official of that department as to the suitability of airports near Fisherman's Bend? Is it a fact that the City Council of Melbourne offered £50,000 to establish a suitable airport in Melbourne, excluding Essendon! What is the policy of the Government as regards accepting such sum and is it desirable to have it available, if required? Will the Government open negotiations with the city council to have this sum available for the Commonwealth Government for the purpose of establishing an airport near Fisherman's Bend. 301 KEM UAP 1 0 FAIRBAIRN, James Mr Fairbairn - The answers to the honorable member's questions are as follows : - A select committee of the Legislative Council of Victoria inquired into and reported on a site for an airport at Fisherman's Bend and this report was printed on the 20th August, 1035. The Melbourne City Council in May, 1938, offered to the Victorian State Government £50,000 in yearly instalments of £10,000 for the purpose of making an aerodrome at Fisherman's Bend, conditional upon the Government of Victoria making the land available and providing funds towards the capital cost. The Government of Victoria declined to make the land available. The offer was not made to the Commonwealth Government. No. In October, 1930. the Commonwealth Government offered the Victorian Government £100,000 towards the cost of establishing an airport at Fisherman's Bend, but when the State Government refused to make the area available the offer was withdrawn. The Commonwealth has since further developed the aerodrome at Essendon. The Government of Victoria has not 6ince made any proposal to establish an airport at Fisherman's Bend, or to make a suitable area available. 301 301 KYI 0 0 PROWSE, John Mr Prowse e asked the Minister for Supply and Development, upon notice - In view of the great economic importance of the supply of fertilizers, is he satisfied ''.hat the increase of price is justified; if so, will the Government make good at least a substantial portion of the increase? 301 KV7 UAP 1 0 STEWART, Frederick Sir Frederick Stewart - Fertilizers are declared goods and the recent increases of prices were made with the approval of the Commonwealth Prices Commissioner, who was satisfied that they were fully justified by increased costs. The second portion of the question should be addressed to the Minister for Commerce. Mai l for tilts Australian Imperial Force. 301 K0K 0 0 CONELAN, William Mr Conelan n asked the Postmaster-General, upon notice - On what date does he anticipate that the Queensland troops, who left Australia in May and have been in England for nearly two months, will receive their first mail? Will he elaborate his statement, which appeared in the press, that several mails had been lost at sea? 301 KWC CP 0 0 THORBY, Harold Mr Thorby - The answers to the honorable member's questions are as follows : - It is understood that mails despatched from Australia in June have now been received by members of thu Australian Imperial Force in England. The statement mentioned refers to the loss of mails for Palestine and thu Middle East which closed in Melbourne about the 20th May. " This Tangled World " Broadcasts. Mr. Blackburn asked the Postmaster-General, upon notice - Was a series of seven broadcast talks entitled "This Tangled World- A Way Out" arranged by the Australian Broadcasting Commission to be broadcast from Sydney? What was the title of each talk of the series ? What talks were actually given, and by whom? Was the completion of the series forbidden by the Minister, and, if so, why? 302 KWC CP 0 0 THORBY, Harold Mr Thorby y. - The answers to the honorable member's questions are as follows : - Yes, from 2BL Sydney relayed to regional stations 2NC and 2CR and to 4QR Brisbane. 2. (i) "A Way Out- Co-operatives." By Mr. George barwell; (ii) "A Way OutDouglas Social Credit." By Mr. C. Barclay Smith; (iii) "A Way Out- Socialism." By Mr. J. O. A. Bourke; (iv) "A Way Out- A Capitalist New Deal." By Mr. H. D. Black; (v) "A Way Out- Henry George's Single Tax." By Mr. A. G. Huie; (vi) "A Way Out - There is no Way Out - Nihilism." By Mr. H. D. Black; (vii) "Which Way Out?"- A Discussion. 3. (i) "A Way Out-Co-operatives." By Mr. George Far well; (ii) "A Way OutDouglas Social Credit." By Mr. C. Barclay Smith. The series was not forbidden; it was suspended in order to review the presentation of the talks. The talks as previously arranged presented only one point of view. In future the talks in this scries and other series will be presented by two speakers, who will place before listeners two different points of view, and, in the case of discussion groups, set out clearly a number of debatable points for the evening's discussions. The series as reorganized will be resumed on Monday next, the 12th August. No talks will be permitted which are considered detrimental to Australia's national defence effort. 302 302 KF9 0 0 GREEN, Albert Mr Green n asked the Minister in charge of External Territories, upon notice - What was the amount of compensation paid to the widow of the late Lionel Hartley, of Wau, who was killed in a mine at Edie Creek, New Guinea, in July of last year? 302 K4X CP 0 0 NOCK, Horace Mr Nock - The information is not available but inquiry has been made of the Administrator, Rabaul, and I shall advise the honorable member when a reply is received. Munitions Annexe at Launceston. 302 N76 UAP 1 0 MENZIES, Robert Mr Menzies s. - Yesterday the honorable member for Bass (Mr. Barnard) asked me what was the position in regard to the establishment of a munitions annexe at the Launceston railway workshops. I am now in a position to inform the honorable' member that arrangements for the establishment of the munitions annexe at Launceston are in the hands of the Board of Area Management for Tasmania, one member of which is the manager of the railway workshops. Two members of the board are at present in Melbourne obtaining the technical information necessary. Unemployment owing to Steel Shortage. 302 N76 UAP 1 0 MENZIES, Robert Mr Menzies - Yesterday the honorable member for Cook (Mr. Sheehan) asked me whether a number of men had been dismissed from Cockatoo Dock, Mort's Dock, and some small industrial undertakings at Sydney and Newcastle because of shortage of raw materials, especially steel bars ? I am now in a position to inform the honorable member that the coal stoppage is partly responsible for the interruption of supplies of steel to these industries, but the main reason is that the resources of the Broken Hill Proprietary Company Limited steel works are being increasingly requisitioned for essential requirements of steel for both local and overseas purposes. Those requirements are being distributed under Government control. Brisbane Show Day Holiday. 302 N76 UAP 1 0 MENZIES, Robert Mr Menzies s. - Yesterday the honor* able member for Brisbane (Mr. George Lawson ) asked me the following question,without notice: - I direct the attention of the Prime Minister to the following telegram which I have received from the representative of the Commonwealth Public Servants employed in Brisbane : - Commonwealth Public Service anxious regarding show Wednesday public holiday; State holiday definitely proclaimed. I ask the Prime Minister whether he will take steps to ensure that Commonwealth Public Servants in Brisbane shall be granted the same privilege as State Public Servants, and be accorded a holiday next Wednesday on the occasion of Show Day? I desire to inform the honorable member that a holiday will be observed as usual in the Commonwealth Service in Brisbane on Wednesday next, the 14th August, in connexion with the Royal National Show. Postal Department: Premises in Melbourne. 302 KYC 0 0 POLLARD, Reginald Mr Pollard asked the Postmaster-General, upon notice - Has the Postal Department leased a portion of the old Melbourne Tramways Board building near Spencer-street, Melbourne? What proportion of the total area of the building hus been leased by the department? Who is the lessor to the Postal Department? What rental per week is the lessor paying the Melbourne Tramways Board for the whole building? What rental per week is the Postal Department paying to the lessor of this building? 303 KWC CP 0 0 THORBY, Harold Mr Thorby y. - The answers to the honorable member's questions are as follows : - Yes. All except four shops on the ground floor frontage and portion of the basement. The Bank of Kew South Wales is the sublessor in respect of the first, second and third floors and Australian Cricketer Proprietary Limited is sub-lessor in respect of the basement and ground floor. The department is not in possession of this information. fi. The total rental being paid by the department is £67 per week.