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Wednesday, 30 November 1938

Mr PATERSON (Gippsland) .- T. begin by congratulating the Minister for Commerce (Sir Earle Page) and the Postmaster-General (Mr. Archie Cameron), who was, until recently, Assistant Minister for Commerce, on the parts which they have played in helping to bring about what must be regarded as a political miracle in Australia - unanimity of opinion among seven governments.

I have listened with great interest this afternoon to the speeches of .the Leader of the Opposition (Mr. Curtin), the honorable member for Henty (Sir Henry Gullett), the honorable member for Kalgoorlie (Mr. Green), the honorable member for Gwydir (Mr. Scully) and other honorable members. The Leader of the Opposition, the honorable member for Henty, and the honorable member for Kalgoorlie and others who oppose or criticize this bill have one thing in common. They show to my mind a deliberate putting of the blind eye to the telescope in that they blindly refuse to see that the excise which it is proposed shall be paid by millers will operate entirely within the limits of the price-fixing legislation passed by the various States. I emphasize that point. Therefore, the price of flour having been fixed by the States, the action which this Parliament proposes to take in imposing this excise does not, and cannot, in the slightest degree affect the interests of the consumers. I say that advisedly, and without any reservation whatsoever. I defy any honorable member to contradict that statement.

Mr Beasley - Then where does the money come from ?

Mr PATERSON - I shall describe later where the money comes from. The whole purpose of our legislation in this Parliament - and the sole purpose - is merely to ensure that the homeconsumption price which the State governments - three of them Labour governments - in their wisdom have agreed upon, shall find its way equitably to the growers. This bill will not fix the price of flour or wheat, and will not affect the consumer. It will merely ensure that the price-fixing legislation adopted by the State governments, unanimously, shall be affected on-y in the respect that each grower shall be able to receive his fair share of the homeconsumption price, irrespective of whether or not his wheat happens to be sold in Australia, or is exported, or is partly sold in Australia and partly exported, in any ratio. It is to ensure that each grower will receive a fair share of the price which six State governments have determined to be a fair price. The Commonwealth Government, as honorable members are aware, has no power to fix the price of anything; that power rests with the State governments, which have now boldly used it in order to do justice to the wheat-growers. All that the Commonwealth Government does is merely' to provide the supplementary or complementary legislation necessary to ensure that each grower shall receive his fair share of the price which the States have decided should be paid.

The six States have unanimously agreed that the grower shall receive a price equivalent to 2d. for the wheat contained in a 2-lb. loaf. Does any honorable member suggest that that remuneration is too high? I do not believe that any one could hold that belief, especially iu view of the fact that the New Zealand Labour Government has taken steps to ensure that wheat-growers in New Zealand shall receive not less than 5s. 8d. a bushel for locally-consumed wheat. The price which the State governments have agreed upon is at least 6d. a bushel lower than that figure, being 5s. 2d. at the port, or 4s. 8d. on the average at country stations, "if honorable members opposite acclaim the action of the Labour Government of New Zealand in fixing 5s. Sd. a bushel, then they cannot take exception to the Australian State governments' proposals for the fixing of a home-consumption price of 5s. 2d. as a fair price to be paid.

Mr Curtin - The honorable gentleman knows that I have agreed unreservedly that that price should be paid. What the Opposition is concerned with mainly is the source from which the money is to be drawn.

Mr PATERSON - I am glad to hear the assurance by the Leader of the Opposition that he agrees with the price fixed. I should like now to deal with the remarks of the honorable member for Henty. I shall endeavour to show the absolute necessity for Commonwealth legislation such as this which we now have under consideration. Were the Commonwealth not to act in the matter, there. would be a chaotic state of affairs. If the States alone took action and fixed the price of flour as they are doing, and if the Commonwealth failed to impose this excise duty or adopted the alternative of raising the necessary money by imposing ordinary taxation - the method proposed by both the Leader of the Opposition and the honorable member for Henty - the position would be that the millers would pocket an amount of something like £4,000^000. If honorable members will think the matter over, they will find that that is so. The States having agreed to fix the price of flour at, say, £12 10s. a ton, the miller would still be in a position to buy wheat at export rates, and if the difference between the price he actually paid for the wheat and the home-consumption price relative to the fixed price of flour were not extracted from the miller, by means of excise, for the benefit of the grower, millions of pounds would be left in the pockets of the miller, .while the Treasury - which means the general taxpayer - would be raided to find the money for the grower! Such a position would be absolutely ridiculous. I am amazed that a gentleman of the perspicacity of the Leader of the Opposition, for whose powers of analysis I have a great deal of respect, has failed to realize that point. I am also surprised that the honorable member for Henty has not appreciated it. lt may be easy to laugh at my argument, but it is not so easy to refute it. The huge gap between the price which the miller will obtain for his flour and the price paid for wheat to the growers must be bridged. This Government is merely bridging that gap by means of this excise strictly within the limits of the prices fixed by the States.

Let us assume next that, instead of fixing the price of flour, the States had merely decided to fix' the price of wheat consumed within Australia, and the Commonwealth did nothing. The position would then be that some growers who were able to dispose of the whole of their production in this country, would receive that homo-consumption price for all the wheat they produced, whereas other growers, particularly those in Western Australia who have to export almost all their wheat, would receive little or uo benefit. The means which the Commonwealth Government is employing in -imposing the excise tax to extract from the millers the difference between the export parity price which they will continue to pay for the wheat and the home-consumption price for wheat agreed up'on by the States will give equal benefit to all growers in Australia, irrespective of the ratio of the quantity of their product consumed locally to the quantity sent overseas. That scheme will bo to the benefit of a State such as Western Australia.

Mr Curtin - The honorable member knows that prices are fixed as the result of the proclamatory power of the State Governors in Council. If the Commonwealth does not impose this excise, the legislation of the States need not be proclaimed.

Mr PATERSON - That shows the necessity for the Commonwealth Government to take action to assist the wheatgrowers by passing legislation supplementary to that passed by the States. A difficulty always arises in connexion with the disposal in fair proportion of a home-consumption price to the grower of a commodity which is produced in such large quantities that there is an exportable surplus. Unless some kind of machinery, or system of accountancy, or method of organization, is applied to ensure that each grower will receive a fair share of that home-consumption price, we might just as well not introduce the scheme, because some growers 'will receive a lion's share while others receive none at all.

I submit to honorable members that the means now being employed to impose an excise tax entirely within the price limits fixed by the States is the only practical course left to the Commonwealth now, since, by the decision of the Privy Council on section 92 of the Constitution, .it has been robbed of powers it was formerly supposed to have.

Mr Curtin - The State legislation does not fix the price. It merely provides that the State Governors in Council may fix the price.

Mr PATERSON - That is mere casuistry.

Mr Curtin - The honorable member is using a word to suit his argument.

Mr SPEAKER - Order ! The honorable member for Gippsland must be allowed to pursue the debate in his own way without interruption.

Mr PATERSON - The honorable member for Gwydir said that he hoped that this measure would be only a temporary one, and expressed the view that a pool should be set up to handle, not only the one-third of wheat produced and sold in Australia, but also the twothirds exported. The honorable member knows that on some occasions the figures are four-fifths and one-fifth, respectively. Apparently the honorable gentleman believes that, were such a pool in existence, it would solve the whole problem of overproduction. I am sure that he cannot be unaware of the fa*ct that to-day there is an exportable surplus of about 1,000,000,000 bushels of wheat. Several European countries, owing to the fear of war, are producing wheat for themselves at a greater cost than it can be bought at in other parts of the world. Thus, the world demand for wheat from normal wheat-buying countries has shrunk from something like 800,000,000 or 900,000,000 bushels per annum to a little more than 500,000,000 bushels. That is to say, there is an overseas market for only 500,000,000 bushels of wheat per annum in the world to-day, whereas there is in sight a surplus for export of 1.000,000,000 bushels. While I agree that organization through a pool may cut down selling costs to the minimum and enable growers to obtain the maximum return for their product, I do not agree that that would be a permanent solution of the difficulties in which wheatgrowers find themselves to-day owing to over-production.

I entirely disagree with those who advocate a guaranteed price for all wheat produced. I am not sure whether or not the honorable " member for » Gwydir advocated that, but I was under the impression, that he did. I believe that the provision of a guaranteed price for all wheat produced, as has been suggested by some honorable members, would be utterly uneconomic -and extremely dangerous. It would simply provide an incentive for the production of an enormous quantity of unwanted wheat for which the. world to-day cannot find a market. I have always advocated, and still advocate, that the producers of butter, wheat, or any commodity in Australia which is produced in large quantities for export, is absolutely entitled to a fair Australian price in accordance with Australian living standards for that part of his product used by Australians; but for that part of his produce which is sold outside Australia he must be prepared to accept whatever the world will give him for it.

Mr Pollard - It is a matter of averages.

Mr PATERSON - Yes, but it is fundamentally unsound to talk about providing a guaranteed price for the whole of a commodity which can be produced if it is merely to be the means of providing an incentive to the productionof an enormous quantity of unwanted goods for which a market cannot be found. The better way is to confine ourselves to providing a fair Australian price for what is used by Australians, and to say that, for whatever we produce in excess of our requirements we must beprepared to take the risk of what the world will give.

The Leader of the Opposition and the honorable member for Henty made statements to the effect that, while they believe in a home-consumption price, it should be provided out of revenue, or that a substantial part of it should be provided out of revenue. I do not regard that as a home-consumption price at all. I simply regard that as what it is, a dole, nothing more nor less. The wheat- grower does not desire a dole; he wants a fair home-consumption price, to which he is entitled as a right, for that part of his production which is consumed in Australia. Every honorable member who says that the consumer should continue to buy his wheat, flour or bread on a basis which simply represents sweating to the wheat-grower, does not believe in a home-consumption price at all ; he simply believes in the perpetuation of the dole system.

Mr Beasley -The honorable member will agree that the worker is also entitled to his means of livelihood?

Mr PATERSON - I do. And I believe that the worker who enjoys an award of the Australian Arbitration Court based upon the cost of living will not demand that he should receive his wheat, flour or bread at a price which would force the wheat-growers to produce under conditions of absolute sweating. Again, even in the event ofa slight increase of the cost of bread - and I think it will be very slight indeed - as the result of the price of flour which the State governments propose to fix, the wage-earner is protected by the fact that his wage is determined by the cost of living. It is all very well for honorable members to smile. Although there may be some lag at times between the increase of the cost of living and the increase of the basic wage, inevitably the two come together in the course of time. I am one of those who firmly believe that the wheat-grower is as much entitled as a right not to a dole, but to ahome-consumption price, as is the man who consumes his wheat in the form of bread entitled to have his wages adjusted to meet variations of the cost of living, per medium of the Arbitration Court.

Sir Henry Gullett - Does the honorable member say that 4s.8d. is a fair price?

Mr PATERSON - The price of 4s. 8d. at country railway stations compares very closely, I believe, with the average price for the ten years prior to the depression, and is lower than that ruling in New Zealand. With respect to the price of bread, I think we can without any qualms leave that matter to be dealt with by theState governments. They have the power, we have not; and I do not believe they will be afraid to use it, despite what some honorable members have said about the upper houses of the State parliaments. Legislation dealing with the fixation of the price of flour must be passed through the upper houses of the various State parliaments, and if the Houses pass that legislation surely they could not consistently refuse to take similar action if legislation was placed before them dealing with the price of bread. I believe that the State governments, having decided to fix the price of flour, will regard it as their responsibility to watch the price of bread in order to see that consumers are properly protected and if necessary to fix the price of bread.

Mr CURTIN (FREMANTLE, WESTERN AUSTRALIA) - Why was not the price of bread included by the conference as a supplementary piece of price fixing?

Mr PATERSON - I cannot answer that, but I say that I have very little fear that the States will not look after the interests of the consumer in that regard. The State parliaments represent just the same people as we in this Parliament do ; they are just as anxious to do the fair thing by the consumers as we are, and I believe, that if the price of bread rose to an unfair level, the States could be relied upon to take immediate action.

I come now to the criticism of the Loader of the Opposition, which I think was also shared by the honorable member for Henty, with respect to the £500,000 which it is proposed should be taken from the home-consumption price fund in order to assist necessitous growers who have no crop at all. The argument of the Leader of the Opposition, as I understood it, was that it was unreasonable to take this money from the flour tax, and that it should be taken out of general revenue. Again I would point out that the taking of that £500,000 from this source does not, and will not, in any way, affect consumers, for the simple reason that that amount of money would have gone as an additional payment to the growers had it not been decided unanimously by the seven Australian governments that that part of the levy obtained from the excise should go to growers suffering distress. It is, therefore, the grower who is fortunate enough te have a crop this year, who is himself providing part of the money, which he would have received, in order to assist his less fortunate brother. I. do not think it is unreasonable that he should do so, because it will be realized that the grower who this year has a good crop - and I believe that the growers in the electorate represented by the honorable member for Gwydir (Mr. Scully) have particularly good crops this year - will be advantaged very substantially by the misfortunes of the growers who have none. "Why do I say that? 1 do not say that because I think the world price will be affected by any shortage in Australia - it obviously will not - but because the growers who have a crop and who will share this homeconsumption price will enjoy that homeconsumption price on a much bigger percentage of their total crop than they would if all the growers of Australia had normal crops. If those mcn who have nothing to-day, who have not even got their seed back, had secured 10, 12 or 14 bushels, this home-consumption price would have been spread over a far bigger area and growers who have had good crops would not have received so much out of the fund as they will get. Instead of getting .perhaps 5d. a bushel they will probably get 7d., solely because of the misfortunes of their fellows who have no crop at all. This £500,000 merely represents a part, and only a .part, of the additional advantage which the grower who has a crop this year will reap from the misfortunes of his fellows, who have none. The equivalent of about Id. a bushel will go to the grower who has no crop, which otherwise would have gone as an extra Id. to the grower who has a crop despite a bad year.

There may be some points which I have missed, but I have endeavoured to deal with the main principles. I hope that honorable members will pass this measure. I trust that they will realize that it is tremendously difficult, in connexion with legislation of any kind, to get the unanimous consent of seven governments. We have secured that; yet some boggle over legislation which has been unanimously agreed upon - not merely by the Commonwealth Government, but also by the six State governments, three of which are Labour governments. I hope that the House will pass the bill and will make it possible for the growers to receive a homeconsumption price for their wheat instead of leaving them in the future, as they have been in the past, simply on a kind of dole which this Parliament has had to find from time to time. This legislation is not of the " double-headed penny " kind which would permit the growers to enjoy this fair home-consumption price when the world's price is low and to receive the world's price when that happens to be the higher. If the world's price does go above the level of the homeconsumption price - and I remind honorable members that less than eighteen months ago it was 6d. over that level - the Australian public will still get their wheat and flour on that fixed level. In other words, the grower will not have the. advantage of the fixed price when the world's price is low and the world's price when that is higher than the fixed price. One of the taxing bills brought down by the Treasurer (Mr. Casey) was for the purpose of ensuring that the grower in Australia will only receive the fixed price for wheat and flour in years when the world's price is higher than that price just as he will receive it in years when it is lower. I commend the bill to the House and I trust that it will have a speedy passage.

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