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Friday, 7 May 1920

Mr HILL (Echuca) .- I take this action reluctantly, but my patience and that of the members of the Country party and of the growers of wheat throughout the Commonwealth is about exhausted. I have tried by every means in my power to obtain a satisfactory answer from the Prime Minister to questions on this subject, and have been unable to do so. On two occasions I have placed questions on the notice-paper. Yesterday I asked -

When will the House he given an opportunity to discuss the question of the continuation of the Wheat Pool?

To which the reply was -

As soon as the state of public business permits of this being done.

There is no more pressing public business at this moment than a solution of the difficulty regarding the Wheat Pool. I have on more than one occasion approached the Prime Minister regarding it, and when lie was last approached by the mem? bers of the Australian Wheat Board, who had carried a resolution in favour of the continuation of the Pool for this year under existing conditions - and I am speaking now' only of the continuance of the Pool for this year, not of a compulsory Pool for succeeding years - the right hon- orable gentleman said that, owing to the manner in which the Pool had been criticised, he did not propose to continue it for another year. It seemed to me that he suggested that I was one of those who had criticised the Pool unfairly. I have criticised the administration of the Pool, but not the creation of "the Pool. The conception of the Pool was good, but the administration has been very bad, and, in some instances, scandalous. To my mind, the greatest offender was the Prime Minister, and I shall instance just one act of his- the sale of 1,000,000 tons of wheat made by him without any authority at all, in the early part of July, 1919. I do not wish to be vindictive, but I wish to clear myself and the growers of the country of the charge of having unfairly criticised the administration of the Pool.

Mr RODGERS (WANNON, VICTORIA) - Did not the Board ratify the bill?

Mr HILL - The sale was made without any authority, and under conditions of which the Board knew nothing until some time later. On the 24th June last, a cable message was received from the Prime Minister stating that it might be possible to sell 500,000 tons of wheat, and asking what was the lowest price the Board would be prepared to accept. The ' Board was. hurriedly called together, and, after consultation, decided to cable to the Prime Minister that 5s. should be the irreducible minimum at which wheat should be sold. But it was also understood that the message should intimate to the Prime Minister .that, although, that minimum had been fixed, he should gel; a better price, and he was left to do that. The next information we received was that the Prime Minister had sold " 500,000 tons of wheat at 5s. 6d. per bushel. That was all right; he had authority to do that.

Mr Stewart - The Board would not have mentioned such a low price as 5s. per bushel had it known the state of the world's market at that time.

Mr HILL - Unfortunately, we did not know, and had no means of ascertaining, the state of the world's market. I will admit, in justice to the Prime Minister, that he had been in Great Britain for at least fifteen months and had not been able to sell a single bushel of wheat, even although during part of that time he had authority to sell at 4s. 9d. But the wheat market was advancing, damage was being caused to our stocks by weevils and mice, storage charges were mounting up, and we were compelled to ask for a better price. The next thing we heard was that the Prime Minister had sold 1,000,000 tons of wheat at 5s. 6d. per bushel, and had given an option over a further 500,000 tons ofwheat at the same price, making 1,500,000 tons in all, of which 1,000,000 tons was sold without the authority of the Australian Wheat Board. That option was exercised by the British Government very shortly afterwards. This was a very satisfactory arrangement to the British Government - it meant, " heads the British Government wins, and tails the Australian Wheat Board loses." However things happened, the British Government stood to win in regard to that option, for the simple reason that, if the price of wheat advanced, the Imperial Government would exercise its option, but, if wheat declined, the option would not be exercised. That 500,000 tons of wheat was tied up for the period for which the option was given - given, I may remark, without any payment, a thing which no business man would do. The Prime Minister has frequently stated that he obtained for our wheat 6d. per bushel more than was asked by the Australian Wheat Board. That statement is not correct. Within twelve days after the Prime Minister had sold the additional 1,000,000 tons of wheat without authority, the Argentine market appreciated 2s. per bushel, and within three weeks a further1s., making a total advance of 3s. per bushel. The Prime Minister should have been better advised than to make this sale. A London agency has been established, and it would always be at the disposal of the Prime Minister for the purpose of finding out the latest information regarding the state of the crops and the markets of other countries. That agency should have been consulted, but I understand that the Prime Minister made the sale of 1,500,000 bushels without consulting the agency at all. The House will be interested to hear the sums of money that have been paid to the London agency for work done in connexion with what were supposed to be f.o.b. sales, but which were conceded to be c.i.f. sales. From the inception of the scheme, on the 31st December, 1916, the firms of John Darling and Son, James Bell and Company, Louis Dreyfus and Company, and Dalgety and Company received, in commission, at 3/10ths per cent., a sum of £61,928, and, at3/8 per cent., £129,298, making a total commission paid to 30th November, 1919, of £191,226. These commissions were quite apart from the handling charges and commission for work done at this end. The Prime Minister had no right to commit the growers to a sale of over 1,000,000 tons of wheat, involving an amount of £10,000,000, without consulting the Australian Wheat Board. I come now to the aftermath of the sale. We were left so short of wheat that in November last, when the Egyptian Government offered 94s. per quarter c.i.f. for wheat, and £32 per ton for flour c.i.f., it was deemed inadvisable to part with so much foodstuffs pending a knowledge of what the coming harvest would be. I made a statement at that time that an offer to buy wheat and flour at prices equivalent to10s. per bushel had been received. That statement was questioned, and I therefore wrote to the manager of the Australian Wheat Board to ascertain exactly what the position was. I received the following letter: -

The following is the telegram regarding the Egyptian inquiry for wheat and flour: -

Egyptian Government want offer 90,000 tons wheat and flour - wheat preferred - about equal monthly shipments seven months, indicate wheat, 94s.; flour, £32 c.i.f.

These prices of 94s. per quarter for wheat and £32 for flour, are c.i.f. The wheat would be worth l1s. 9d. per bushel c.i.f., and if Commonwealth Government freights were available at £6 5s. per ton, equal to nearly 8s.6d. f.o.b.

The pre-war freights from Australia to the United Kingdom and the Continent averaged about 9d. per bushel. Yet the Commonwealth Government steamers were apparently asking for £6 5s. per ton, equal to 3s. 4d. per bushel, for freight from here to Egypt. The letter continues -

The flour, at £32 per ton' c.i.f., would give a return of about 10s. l1/2d. per bushel f.o.b.

We will be able to continue selling the flour to the Egyptian Government, but we will be unable to supply the wheat.

In the first place, we do not have it to spare, and, secondly, if we had the spare wheat, we would require the Commonwealth Government line for flour, and we would have to pay a rate of freight which would reduce wheat values below 8s.6d.

I draw the attention of the House to the statement,"In the first place we do not have wheat to spare." What was the reason? Simply that the Prime Minister sold 1,000,000 tons of wheat without authority at 5s. 6d. per bushel, and we are left to-day absolutely stranded.

Mr Poynton - There was general rejoicing throughout the farming areas when the sale was announced.

Mr HILL - I do not care what the rejoicing Was.

Mr Stewart - That was because the farmers did not know the facts.

Mr Richard Foster - I hope the Department will makean official statement about this.

Mr HILL - I shall welcome any official statement that the Department can give.

Sir JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) (Minister for the Navy) - The honorable member does not want an official statement. He has not had the courtesy to inform the Government that he intended to move this motion.

Mr HILL - The Government do not deserve any courtesy because of the way in which the Prime Minister has treated the growers. He has been approached in a gentlemanly way. by a representative of the growers, and he has not deigned to give them any reply. He has acted in an absolutely autocratic manner, and I rise to-day toprotest against his action.

Opposition Members. - Hear, hear ; it is time somebody protested.

Sir JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) (Minister for the Navy) - Loud and unanimous cheers from the Labour party.

Mr HILL - I shall quote to the House a circular distributed by the National Federation during the election, and entitled, " Facts," but which contained more lies than any other circular which the Federation issued.

Mr Richard Foster - The honorable member ought to read his own speeches in Victoria.

Mr HILL - The honorable member does not like the truth. These " Facts " were distributed by the National Federation, and I can only characterize them as worthy of that body. The pamphlet showed that the London parity for wheat was 2s. 9d. f.o.b. in November, 1918, and basing their calculations on that assumption, they proceeded to show that the splendid sales made by the Prime Minister had resulted in placing an additional £10.000,000 in the pockets of the grower. Unfortunately, I have lost the pamphlet,' and am speaking from memory. On the 16th December the Australian Wheat Board met, and a statement was placed on the table, dealing with the purchase of 2,200,000 bushels made by the British Government -

This figure of 2,200,000 bushels represents a sum of £522,500, at 4s. 9d. per bushel, or based on the existing overseas value of, say, 8s. per bushel, £880,000.

That is to say, although the Prime Minister tried to hoodwink the farmers into the belief that he had put money into their pockets by selling wheat at 5s. 6d. while it was worth only 2s. 9d., the Australian Wheat Board officials say it was worth 8s.

Mr Fleming - Would it not be only fair to bring up this matter when the Prime Minister is here to answer?

Mr HILL - I wish the Prime Minister were here. My friends on the Labour side stress the high cost of living, and I agree with them ; but the producers accept no responsibility in this regard. Our primary products are, and have been, cheap; and during the war period wheat for flour never cost the Australian consumer more than 4s. 9d. I can well remember that when wheat was sold at 5s. at country stations the price of the 4-lb. loaf was 5d.; and yet, during the later war period, with wheat at only 4s. 9d., bread was sold in the country at10d. At present, the various State Governments have enough wheat at 7s.8d. to last to the end of the year; and they have made an excellent deal. Without "giving away " anything, I say that the price of 7s. 8d. per bushel, although it might seem to be high, would not have been paid if certain gentlemen had had their way.

Mr Austin Chapman - Who are they?

Mr HILL - I do not like to say too much about the matter.

Sir JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) (Minister for the Navy) - You ought to say.

Mr HILL - Then I will. I do not like to say these things, but the Prime Minister fought against that price. I shall not say anything more in the matter at the present time; but, if the Prime Minister chooses to deny or explain, I shall take an opportunity to tell the whole story. Last week, when I was coming from Bendigo, I saw large trains of the finest wheat that could be produced in the world going away at 5s. 6d. per bushel, while to-day the price of wheat in America, f.o.b., is at least 16s. 6d., and in the Argentine at least 13s. 4jd. These are the prices at which wheat in those 'countries is being sold; and I should say it could not be landed here, in view of the high freights and the adverse rate of exchange, at anything under 22s. or 23s.

I think the information I have given to the House justifies me and the party to which I belong in criticising the Prime Minister. I have given, only one instance in which that honorable gentleman has done things he should not have done, and has taken into his hands the sole responsibility for disposing of, at least, £10,000,000 worth of wheat without any authority whatever. There is continued silence o:n the part of the Prime Minister in regard to the Wheat Pool for the coming year. I unhesitatingly say that the Pool as conceived was a good thing, but that the administration, particularly from the political side, has been bad.

I desire to make my position clear in regard to the Victorian Pool. For the officials who are working with the Board I have the highest regard; and when the Pools are settled up I believe that the Victorian Pool will compare more than favorably with any other.

Mr RODGERS (WANNON, VICTORIA) - What do you suggest as the future policy in. regard to the Pool?

Mr HILL - We ought to know at the earliest possible moment what the Prime Minister intends 'to do. He promised a guarantee, and he gave a guarantee, of 5s. per bushel for wheat, grown in Australia and delivered at country stations for the last year and for the coming year. The honorable gentleman takes every credit to himself for having given that guarantee ; but it was given too late for last season - just before the harvest - to induce anybody to grow any more that year. Further, it was too late to induce anybody to fallow last year for this year. Had it been given earlier, as it should have been, the chances are that a very much larger increase would have been seen this year; at any rate, it was given too late to influence the area sown last year, or the quantity likely to be produced this year. It is absolutely impossible to deal with this year's harvest without a Pool- that is, if we are going to have any harvest, in view of the unprecedentedly bad conditions in the northern parts of Victoria and the wheat belt generally. It is absolutely necessary for the Government lo take such steps as will create confidence amongst the growers, who wish to know what is going to happen in the future. They ought to know how the guarantee of 5s. is to be made operative unless we have a Pool, and how the wheat is to be got away unless shipping is available. We recognise the troubles in regard to. freight, and that the farmers will have to face almost insurmountable difficulties in getting back to the private system from the pooling system. In view of the fact that the Prime Minister guarantees 5s. for this year, and that freights are altogether abnormal, we should have, at the earliest .possible moment, an intimation from him as to what he is going to do. On behalf of the wheat-growers of Australia, I appeal for early and favorable information.

There is absolutely no risk to the Government in connexion with the guarantee, and this the Prime Minister knew full well when he gave it; as a matter of fact, any man in the street would have given the guarantee, so that no credit is attached to the honorable gentleman. When there was some risk, however, the Government refused to face it. It has been shown that the production of wheat in Australia decreased during the war period by 4,500,000 acres, Victoria alone showing a decrease of 1,500,000 acres; and this because of the absence of a guarantee to the growers of the cost of production.

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