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Thursday, 8 August 1946

Mr ARCHIE CAMERON (Barker) . - I was Minister for Commerce for some months in 1940, and, therefore, may be presumed to know something about the arrangements made in regard to wool at that time, although the matter was dealt with mainly by my colleague at that time, Senator P. A. McBride. It was in able hands, for he knew much more about the wool industry than I did'. I understand, however, the principles upon which the Commonwealth Government acted. It acquired the wool clip, not exactly for the purpose of selling it to the United Kingdom Government, but in order to ensure, in collaboration with that Government, that the great bulk of the wool clip would remain under the control of Great Britain and its allies throughout the war. In principle and in fact, the clip was acquired by the Commonwealth under the National Security Regulations. Therefore, the Commonwealth Government is legally and morally obliged to pay to the owners of the wool the full realization from it. If this measure, be legally sound and morally justifiable, there is no reason why the Commonwealth Government should not say to the dairymen, the meat producers, the wheat-growers, the applegrowers, the wine makers, and, in fact to any other primary producers whose property has been acquired, that the money resulting from subsequent sales must be paid into a trust fund.

In connexion with trust funds, I bring to the notice of honorable members a letter which the Leader of the Australian Country party (Mr. Fadden) has received from the Prime Minister and Treasurer (Mr. 'Chifley). It is dated the 2nd August, and reads -

During question time on Thursday, you naked me without notice whether the am:um" luted funds. which had accrued from activities of the Central Wool Committee in skin wools. wool-tops and noils, and the export nf manufactured woollen .goods, .had been appropriated to a tr.u t account within- the meaning of section 62a of the Audit Act

You also sought information as to whether the balance in such a trust fund had been used by the Government for general purposes.

I desire to advise you that these moneys have not been used for governmental purposes nor have they yet been appropriated to a trust account.

Clause 4 of the Wool Industry Fund Bill now before Parliament provides for the establishing of a trust account within the meaning of section62a of the Audit Act and for the appropriation from Consolidated Revenueof the moneys in question. When this bill is approved and becomes operative, the necessary action will be taken to give effect to the provisions which it contains.

In view of the information contained in the letter, I should like to know where the money is at present. Has the Government put it under a mattress, or in a jam tin on the mantelpiece, or behind veterinary medicines at the back of a stable?

Mr.Ward. - We dare not tell you.

Mr ARCHIE CAMERON - I can quite understand that.

Mr Ward - There are some suspicious characters about the House.

Mr ARCHIE CAMERON - It would be of interest to the wool-growers, who are legally and morally the owners of the money, to know where it is and to what purpose the Government has put it. The principles under which this wool was acquired were clear. It was arranged that there should be an appraisement by Commonwealth appraisers of all the wool handled for the Wool Realization Committee. The appraisements took place. At the end of the year the growers were to be paid 90 per cent, of the appraised value. This arrangement was made in case the wool had been over-appraised. The actual fact was that in every year the appraisements were under the correct value. Therefore the growers received the 10 per cent, that had been held back, and also a dividend on account, to bring the total value of the clip up to the appraisement value that had been agreed upon between the United Kingdom Government and the Commonwealth Government. There was also an interesting provision in regard to profits that might arise, chiefly from the re-sale of wool by the United Kingdom Government to other countries. I make it clear that there was no formal agreement between the two governments on this matter.

Certain cablegrams passed between the governments which dealt with the various points at issue. It was laid down in regard to re-sales by the United Kingdom Government that half of the profits should go to the United Kingdom Government and half to the Commonwealth Government, but by no stretch of the imagination could it be argued that the Commonwealth Government could use the money it received for Commonwealth purposes. It was to act as trustee for the Australian wool-growers. It had compelled the Australian wool-growers to hand over their wool. There can be no such thing as sale and purchase unless there is a free buyer and a free seller. In. this case there was neither. The Commonwealth Government acquired the wool by compulsion, for the simple reason that there was no other way to handle it, and it had had experience of such acquisitions during World War I. In short, a Commonwealth instrumentality was established to administer the scheme. In connexion with the dealings with wool during World War I. the half of the profits which accrued to the Common - wealth Government was paid to the Australian wool-growers in dividends.

In regard to skins I may not be in agreement with some of my colleagues. The skins were acquired by the Commonwealth under National Security Regulations, just as the wool was acquired, and the owners are entitled to the full realization. I do not know what amount is available for distribution in respect of dealings in skins.

Mr Lemmon - About £2,500,000.

Mr ARCHIE CAMERON - That is due to the fact that skins are in a very different position from wool. As the honorable member for Forrest knows, when the collapse of France occurred the whole position in regard to skins changed immediately, for 80 per cent, of Australia's sheepskins were then being purchased by France. The Minister for the Army will know something about this subject for when he was Minister for Trade and Customs in the Scullin Government, he perpetrated the dreadful sheepskin embargo. He well knows, to his cost, what happened as the result of his attempt to interfere with the normal course of trade. The right honorable gentleman took this action in order to compel the manufacturers to deal with the sheepskins within Australia. He failed dismally, as every sheep man in Australia knows. On this occasion, with the collapse of France, other means had to be devised to dispose of the skins. Had the Commonwealth said : " On account of the situation that confronts us as a result of the downfall of France, we shall not interest ourselves in sheepskins ", the value of sheepskins and the price obtainable for them in Australia would have crashed, tremendously; but that did not occur. The Commonwealth rightly continued to exercise control. Now, however, we are asked to agree that a sum said to be £7,000,000 - other authorities say it is much more than that - shall be placed in a trust fund, ostensibly for the purposes of the woolgrower. "Whether the amount be £7,000,000 or. £7,000, the legal and moral ownership of it resides in the woolgrowers of .Australia, and nobody else. When I first saw the bill, I was reminded of the tale of Ali Baba and the Forty Thieves, which I read away back in my school-days. Then, glancing round me, I. came to the conclusion that the number should be about 48. That, however, is by the way. This is merely an indication of the lax, loose method which the Commonwealth Government employs in its handling of what, after all, are trust moneys. A trust account under government control is no more than a polite fiction. If, in private life, any person attempted tq deal with .a trust account as the Commonwealth Treasury deals, with this one, he would be given seven years hard labour. I have been associated with trust accounts. The first requirement is that a trust account shall not be used for any purpose other than that for which it is established.

Mr Dedman - In other words, the honorable gentleman admits that had he done in civil life what he did as a Minister, he would have received seven years hard labour?

Mr ARCHIE CAMERON - I have not said that of the Minister. I am talking of the system of government that we now have. If a person in civil life did with trust funds what governments do, he would be given seven years hard labour. Any lawyer, accountant or other person handling trust- moneys will agree that such moneys must be used only for the purposes for which they have been provided. The Commonwealth places all such moneys in a common pool, and uses them to bolster up loans, or for any other purpose it deems necessary for the time being. There is no greater fraud or fiction than that, of a trust fund under Commonwealth administration to-day, and it is time the matter was cleaned up.

The opening remarks of the Minister who introduced the bill (Mr. Chifley) were interesting. He said that its purpose is " to provide for the application of certain moneys which had accumulated in the hands of the Central W ool Committee during the war in respect of activities outside the provisions of the Wool Purchase Agreement with the United Kingdom ". That, of itself, shows that the Commonwealth Government recognizes that it has a responsibility outside the Wool Purchase Agreement with the United Kingdom. The question naturally arises, to whom does it owe that responsibility? I claim that the Government is responsible to the growers who produced the wool, and to nobody else, and that those growers are entitled to no less than the full realization value of what the Commonwealth compelled them, under the Constitution, to surrender to it. All the arguing in the world will not enable the Government to get away from that salient fact. I know that we are "approaching the end of the session ; therefore, I do' not want to prolong the debate, and shall say briefly what I think in regard to this matter. The wool-growers of Australia will not accept the Government's contention. They were taxed under Commonwealth law in 1944, at a special rate of 2s. a bale, for the establishment of a research fund, for advertising and for other purposes. Unless tho Government proposes to be as extravagant in this matter as with most other matters, it will not be able to use this £7,000,000 for advertising and research. Furthermore, it will be hard put to use, in addition to the 2s. a bale, the interest it would receive if it took the £7.000,000 f rom the trust fund, as doubtless it will, and invested it in Commonwealth bonds or treasury-bills.

Mr Scully - It has not collected the 2s. a bale.

Mr ARCHIE CAMERON - Am I to understand that the Wool Tax Act is not to operate?

Mr Scully - Only that part of it which provides for a contribution by the Commonwealth. The other provision has seen suspended. .

Mr.- ARCHIECAMERON. - That la* is on the statute-book. What right has the Ministry to say that a tax imposed by this Parliament shall not be COl.lected?

Mr Dedman - The collection of 2s. :a bale was suspended by a subsequent act.

Mr ARCHIE CAMERON - The whole matter needs much more complete, careful and detailed examination than is likely to be given to it to-day. The bill should not .pass. This money belongs to the wool-growers of Australia, and the passage of any legislation which takes it from them and places it in a fund, trust or other, is, in my opinion, an unlawful arid immoral act on the part of the Commonwealth Government.

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