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Wednesday, 12 May 1920

Mr HIGGS (Capricornia) .- I move -

That the following wordsbe inserted at the end of sub-clause (1) : - "and of any person, firm, or company carrying on business in which the Government of the Commonwealth is pecuniarily interested, or from which the Government expect to derive a share of the profits arising out of the said business ".

I have heard what the Prime Minister (Mr. Hughes) has said concerning the new agreement between the Colonial Combing, Spinning, and Weaving Company, but the clause referring to audits of these accounts has been amended, and Mr. Allard's name has been distinctly mentioned as the person who is to conduct the audit. It may be, as the Prime Minister states, that the Auditor-General cannot audit these accounts without some enactment declaring that agreement null and void, or without some amendment of the agreement. In any future agreement entered into by the Commonwealth Government with any company the AuditorGeneral should have power to inspect the books, accounts, vouchers, and all documents concerning that company and its business. I think that is only reasonable, and the Auditor-General in his report has asked for that power.

Sir JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) (Minister for the Navy) - It is very difficult to define it.

Mr HIGGS - It is not difficult, and there should be no objection to the addition of the words embodied in my amendment. I am not making any reflection upon the ability of Mr. Allard--

Mr Hughes - It is perfectly clear that he cannot do it, and we cannot allow him to under this agreement.

Mr HIGGS - I think it can be done, and I am prepared to leave it to the Prime Minister and the honorable member for West Sydney (Mr. Ryan), who says it can be done, to thresh it out.

Mr Hughes - It is perfectly obvious that it cannot be done.

Mr HIGGS - The honorable member for West Sydney says that there is nothing in the agreement to prevent it.

Mr Ryan - For every public purpose the Auditor-General should have the right to audit.

Mr HIGGS - There is a new agreement between the Commonwealth Government and the Colonial Combing, Spinning, and Weaving Company under which the Government are to receive 80 per cent, of the profits,which nominally means a large percentage. What objection can there be to the Auditor-General inspecting the books and accounts?

Mr Hughes - I see no objection; but the time for that to be done has passed, as it should have been provided for when the agreement was drawn up. The Crown had an opportunity of saying who was to be the auditor.

Mr HIGGS - If the Crown had ample opportunity that means, in this case, that the Government had the opportunity. The late Lord Forrest in 1917 was in favour of the Auditor-General inspecting the books, but Sir John Higgins said that it could not be done.

Mr Hughes - The agreement was drawn up by the Solicitor-General and on his advice. He took all steps to safeguard the interests of the Crown, and recommended me to accept it, whichI did. I am perfectly clear that he took all the necessary steps to safeguard our interests.

Mr HIGGS - Perhaps the SolicitorGeneral was not aware that when, as Trea surer, the late Lord Forrest received the balance-sheets of the Colonial Combing. Spinning, and Weaving Company, he expressed the opinion that the Government should have further information, and asked the Auditor-General to obtain it. Sir John Higgins said that the information the Government desired must be obtained from the company. The company, however, refused to supply it, because it said it would be disclosing their business to the general public. If a company enters into a business arrangement with the Government, it must necessarily incur the risk of having its business disclosed, although there is no reason why its private business or secret processes should be made public.

Mr Hughes - We should not pass laws affecting an agreement that has alreadybeen adopted by both parties. I do not think a Court of law would allow us to do so.

Mr HIGGS - Does the Prime Minister say that is a reason why the AuditorGeneral should not inspect books?

Mr Hughes - Not on the part of the Crown.

Mr HIGGS - What is the reason on the part of the company?

Mr Bowden - An agreement has already been arrived at, and we cannot depart from it unless there is a mutual arrangement.

Mr HIGGS - Are we to believe that there is a difference between the audit of Mr. Allard and that of the AuditorGeneral? Honorable members will see that the auditing of accounts must be either full and complete or only partial.

Mr Bowden - An audit by Mr. Allard would not disclose information to the same extent as one by the AuditorGeneral.

Mr HIGGS - There may be something in the contention that the audit of Mr. Allard would be of a more secret nature, or that he would not disclose to the public the business of the company in such a way that it might act detrimentally to their business in competing with other companies. We cannot imagine for a moment that the AuditorGeneral would be so unfair to the company as to disclose the operations of their business in a way that would be disadvantageous to them.

Mr Hughes - Does the honorable member suggest that under this agreement the Crown is not protected, and that under Mr. Allard's auditing we would be deprived of something we should receive?

Mr HIGGS - Perhaps not under the agreement, but an audit by the AuditorGeneral might disclose that the agreement is bad, and that the system of arriving at the 80 per cent, of the profits is such that the bargain is not a very good one for the Commonwealth.

Mr Hughes - I should be glad to make arrangements with other people throughout the country for 80 per cent, of their profits. We should dovery well by such arrangements.

Sir JOSEPH COOK (PARRAMATTA, NEW SOUTH WALES) (Minister for the Navy) - I understand that the function of the Auditor-General is not to pronounce on the quality of an agreement, but on the correctness of the accounts connected with it.

Mr HIGGS - The payment of 80 per cent, of the profits to the Government may be in the nature of an act of restitution by the company. Having found that it made such enormous profits out of the first agreement, the company might, in the goodness of its heart, have decided to give 80 per cent, of the profits to the Government because the agreement had only a few months to run.

Mr Tudor - Another fairy godmother !

Mr HIGGS - I imagine that the 80 per cent, will not represent anything like the amount which the Commonwealth expects to receive from the original agreement. In reply to the interjection by the Minister for the Navy (Sir Joseph Cook), I do not suggest that the Commonwealth will not get from the agreement all that it is entitled to, but the public ought to know the value of the concession that was given to the Colonial Combing, Spinning, andWeaving Company. I understand that the Commonwealth proposes to pay the whole of its share of the profits into the Wool Pool.

Mr Hughes - No; only half.

Mr HIGGS -What is the value of the agreement if the Prime Minister gives the profits away in this fashion?

Mr Hughes - The grower gets 40 per cent of the profits, the Commonwealth gets 40 per cent., and the manufacturer receives only 20 per cent.

Mr HIGGS - And the unfortunate fellmongers and scourers, who do all the dirty and disagreeable work in connexionwith the manufacture, will get nothing. The Prime Minister was absent from Australia when we sought in vain to get 20 per cent, of the profits for the employees in the fellmongering industry. They ought to receive a share of the profits. Some members are setting up an extreme claim when they ask that the profits made out of the manufacture of the wool shall go to the Wool Pool.

Mr Hughes - I did not agree to that, but I agreed that they should receive half of the profits on the raw material.

Mr HIGGS - If the contention of the Prime Minister be correct, that we cannot interfere with the agreement by appointing the Auditor-General over the head of Mr. Allard, no harm will be done by this amendment; it can only apply to future agreements. I hope that it will be accepted.

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