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Thursday, 28 March 1957

Mr POLLARD (Lalor) .- This is another small measure which deals with a primary product. It is a bill to amend the Cotton Bounty Act 1951-55. Before I proceed any further, I should like to point out to those who have been throwing bricks at the Australian Labour party for its socialistic tendencies that we appear to have in this measure a substantial instalment of socialism. I say that because this Parliament is being asked to provide a guaranteed price of 14d. per lb. for seed cotton to the Queensland cotton-growers. That means that a guarantee is to be given to the cottongrowers because it is feared that, during the currency of the agreement that is already in operation, it might so happen that the price of cotton will be so low that the taxpayers of Australia should put their hands into their pockets and fork out money to make up the price of cotton to 14d. per lb.

That looks to me like a little piece of socialism. The Government is prepared to collect money from the taxpayers in order to give a socialized price to the Queensland cotton-growers. As one of those who believe in the democratic socialistic policy of the Labour party, I am all for the payment of the cotton bounty.

Mr Wight - Why did not the honorable member agree to it in 1949?

Mr POLLARD - The loud-mouthed member from Lilley has asked me why 1 was not in favour of a cotton bounty in 1949. The honorable member knows that there is in Australia an instrumentality known as the Tariff Board. That board exists to make inquiries from time to time into requests by industries for assistance on a socialistic basis from the taxpayers.

The cotton-growers of Queensland approached the Commonwealth Government in 1949, several years after World War

II.   had ended. They had been through a difficult period during the war, and hat..' turned from other branches of primary industry to dairying, cattle-raising, &c, for which they were suitably equipped. They approached the Government, and stated that they would like to resume production of colton, and believed it could be a profitame proposition, but they would need some assistance from the Government.

We reminded the cotton-growers that a Tariff Board had been set up to consider such requests, and I remind honorable members that it was established by an antiLabour government, lt is, in effect, this Government's own instrumentality. Its function is to advise governments whether they should, or should not, pay away the taxpayers' money to assist industries that request aid.

The Labour Government of the day referred the request of the cotton-growers to the Tariff Board, and I shall tell the honorable member for Lilley what it reported. It was not a socialistic Tariff Board, and it was not appointed by a socialistic government. The members of the board at that time were Mr. M. E. McCarthy, who was chairman, Messrs, H. F. Morris, Walter J. Rose and H. E. Guy. None of them had any association with the Australian Labour movement. This is what they reported in their summary of conclusions in 1949 -

Judged on purely economic considerations, the conclusion must be reached that no measures of further assistance by the Commonwealth to the growing of cotton in Queensland, other than that recommended herein, can at present be justified.

That conclusion does not result from a conviction that cotton cannot be efficiently grown in Queensland, but from the conviction that no measures of governmental assistance will bring that result, whilst current conditions in the potential producing areas continue.

The Tariff Board then remarked, in the course of its report, that the essential requirement in Queensland for successful cotton-growing was that there should be rotation of crops with Rhodes grass. It pointed out that there was great need for mechanization, and that cotton should be grown on small areas ranging from 25 acres to 100 acres. There was a need for the Queensland Government and the farmers themselves to ensure that the cotton crops were irrigated. The board recommended that the economics of the ginneries should be studied. At that time, they were situated at Whinstanes, Gladstone and Rockhampton, and I believe that they are still there. I am not one of those who believe in unquestioning acceptance of the recommendations of advisers of governments. Far from it.

Mr Pearce - The honorable member accepted the board's recommendation in this case.

Mr POLLARD - I am not prepared to tell the honorable member for Capricornia what I did. The government of the day reached a decision, and it was not a bad decision, either. Incidentally, it might raise a question in connexion with the bill before the House. The Tariff Board recommended that the only further assistance that should be given by the Commonwealth Government to the Queensland cotton-growing industry was the maintenance of the existing relevant tariff items and the relief of the Cotton Marketing Board from its liability in respect of the remainder of a loan that had been made by the Commonwealth Bank. That liability was £66.000 which the Chifley Labour Government liquidated, on the recommendation of the Tariff Board, for the benefit of the Queensland Cotton Marketing Board It was a very acceptable measure of socialism for people who had gone into the industry at their own risk. They had borrowed money from the Commonwealth Bank, produced cotton and established ginneries, but, unlike some people in private enterprise who get nothing back when they go broke, they were able to persuade the Commonwealth Government to liquidate their debt to the Commonwealth Bank. I do not disagree with that, because I believe that primary industry should be assisted. That was the situation at that time.

Mr Pearce - The industry was given a decent burial.

Mr POLLARD - One of these days the honorable member for Capricornia will be buried, but no one will miss him. Let us examine what happened next. This Government came into office in 1949 and said that it was going to do great things for the cotton industry, but it was two years before it did anything for the Queensland cottongrowers. Then it suddenly realized or was told that the sum of £66,000 provided to liquidate the Queensland cotton-growers' debt had proved to be inadequate, notwithstanding that the Labour Government had accepted the recommendation of the expert advisory authority. Then the Government, I think rightly - I do not want to criticize it on this score, because I want to be fair - said, "In view of world marketing conditions, the dependence of Australia on its own products in time of war and the demonstration by the Queensland farmers that they want to continue in the industry, some assistance should be given ". So a measure was introduced into the Parliament to guarantee the payment of a bounty for five years which would bring the price paid to the Queensland cotton-growers up to 14d. per lb., but all the time the Government hoped that the world price of cotton landed in Australia would remain at such a level as to render bounty payments unnecessary.

I daresay that the honorable member for Capricornia, who apparently represents Rockhampton here, went to the Minister, blew in his ear and said, " Promise them a guaranteed payment of 14d. per lb., Mr. Minister. Probably it will not cost you anything, because the indications are that world cotton prices will remain at a high level ". The honorable member does not deny that. Under those circumstances, the Government agreed to guarantee to the growers for five years a return of 14d. per lb. for Queensland-produced seed cotton at the ginneries.

Mr Wight - Labour was not prepared to do that.

Mr POLLARD - The Labour party, for which I led in the debate, ardently SUP.ported the proposal.

Mr Wight - Why did you change your mind?

Mr POLLARD - The honorable member for Lilley can make all the apologies he likes for this Government, but I have never had to make apologies for the Government of which I was a member. He does not deny that it was hoped that there would be no necessity to pay a bounty, and I think that was a very proper hope. Who wants to pay out the money of the taxpayers unnecessarily, even if it is in the form of socialistic assistance?

The. first bounty was payable in 1953. or thereabouts. It might have been a year earlier. In 1953, the payments amounted to only £17,651 - a mere drop in the ocean, i do not think that the Minister who granted the bounty ever thought, even in his wildest imaginings, that substantial payments would be necessary. The granting of the bounty was intended to be an empty gesture, but now the Government is faced with the position that, as the world price of cotton decreases progressively, so the bounty payment that it has to make to the cottongrowers increases. Whereas, in 1949, cotton could be produced in Australia comparatively cheaply, it is necessary now, owing to the failure of this Government to keep down production costs, put value back into the £1 and stabilize our economy, to pay a bounty double that which would have been paid in 1949 if one had been granted then. Let the Government think that one out.

Mr Wight - Why is it necessary?

Mr POLLARD - Why does not the honorable member listen? In 1953, a bounty of £17,651 was paid. It rose to £25,243 for the 1954 harvest and to £67,284 for the 1955 harvest. The payment for the harvest just completed is expected to be in .the vicinity of £120,000. 1 noticed that the Minister did not give us in his second-reading speech any indication of the present acreage. He did not tell us whether there had been a substantial acreage increase during these years. We know that in 1952 the target for 1957-58 set by the Australian Agricultural Council was 60,000 acres, with a production target of 20.000, bales. Those were very desirable targets. 1 want to know, first, by how much the acreage has increased. If I know that, ! shall be able to assess more accurately whether the increase of expenditure to £120,000 is due to very desirable increases of acreage and production, or whether the main reason is a fall in the price of cotton. Those are very important aspects of this matter. The Minister is always very obliging, and no doubt he will give me the facts.

Mr Pearce - The acreage has gone up to four times what it was.

Mr POLLARD - I know that it has gone up, but it has not nearly reached the target. I wish it had done so. because I wish the industry well.

Mr Wight - Do not you know why the price of cotton fell?

Mr POLLARD - Of course 1 know.

Mr Wight - You have not said why it fell.

Mr POLLARD - I will leave that for the honorable member for Lilley to deal with when he makes his speech. He knows everything, and, no doubt, he will be able to give us some very valuable information, or perhaps inflammation would be the better word.

Let me deal with the purposes of the bill. I have engaged in what might be called an historical survey, provoked by interjections which I greatly appreciated. It has been found that the bounty should be paid to the growers before their cotton has been actually sold and the money obtained for it. Naturally, the growers want their money as soon as possible. Therefore, to clear up some doubt whether that can be done, the bill proposes an amendment of the principal act to authorize the board to make interim payments.

Further, doubt has arisen in the minds of the authorities controlling this matter whether it is legal at present to pay a bounty making the growers' return up to 14d. a lb. without taking into consideration the fact that some of the properties of the board - in other words, the growers, because this is a co-operative industry - are providing a substantial revenue. In the early days of the industry in Queensland, three ginneries were built. It was discovered later that, in view of the decrease of acreage and of the quantity of cotton produced, there were more premises in the possession of the board than were required for its purposes. So, very wisely I think, the board let some of its premises. The seed-crushing machinery in one of the ginneries is being used to do contract work, as i suppose it is, for the Peanut Marketing Board. It is being used to process and extract oil from peanuts. If those revenues were taken into consideration in the assessment of the bounty payment, the result could well be that the growers, instead of receiving a guaranteed price of 14d. a lb. for seed cotton, would receive a lesser amount. So the bill proposes an amendment of the principal act to make sure that it will be legal to take that income into account. I remind some of those people who are pitching round interjections and queries that the revenue which the Queensland Cotton Marketing Board is receiving from the rental of properties is augmented by another sideline in the extraction and processing of oil from peanuts. In the wheat and dairying industries this, technically speaking, would be classed as sideline income in the assessment of costs, and the guaranteed price would be adjusted accordingly. In those industries, the sideline income would be derived from propertyownership to which the Commonwealth and State Governments had made no contribution. In the cotton-growing industry, however, this sideline income of the Queensland Cotton Marketing Board is not taken into account notwithstanding the fact thai it is derived from ownership of property to which the Commonwealth Government made a contribution of £66,000 in 1949.

In those circumstances, it might be questionable whether the present proposed procedure is justifiable; but, as the industry is struggling, I and my party are willing to let that point pass because, after all, the board might be so encouraged to engage in further sideline activities. I do not know, but, eventually, it might be encouraged, for instance, to bottle peanut butter for the peanut board, lt now extracts oil from peanuts, and it might even let its rentals go and embark on all sorts of sidelines. It might even manufacture oil cake for the dairying industry, because, from its cotton seed oil it can make available to the industry a most valuable high-protein stock food. Whether the Queensland Cotton Marketing Board makes oil cake now, I do not. know. Possibly, it does not. I presume that it crushes the seed and sells the oil and meal to other manufacturers who make up poultry nuts and poultry meal. If the board can enter profitably into the processing of those products, good luck to it. Whether a future government will come down on the board and re-assess the bounty payments. I do not know. At all events, the Labour party supports the proposal contained in the bill and hopes that it will give a further meed of assistance and encourage the industry not only to increase its production, but also to improve its efficiency and thus become a greater asset to the people of Australia than it has been hitherto.

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