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Thursday, 5 August 1926


Senator McLACHLAN (South Australia) . - The debate on the budget is one of the opportunities we have of reviewing the legislation which has been introduced by the Government. We are probably so close to the events which are taking place that we are in danger of viewing them narrowly. Later generations, when reviewing the work accomplished during this session, will admit that at least the

Bruce-Page Government strove to do right. While there may be differences of opinion regarding some of the legislation introduced by the Government, it cannot be gainsaid that its programme makes for the advancement of Australia. The Government's attempt to deal with the difficult subject of finance in a scientific manner, and to adjust the relations between the States and the Commonwealth. is deserving of our support. We have already had an opportunity to express our views regarding the Government's migration policy. The programme is indeed a national one, having for its object the advancement of Australia, so that we -may be able to tak 6 our place worthily as the lonely sentinel of the white races in the Pacific. The Government is to be especially commended for its effort to secure a measure of industrial peace in this country. In no country is co-operation between all classes of the community more essential than it is in Australia. One factor which influenced the electors at the last election was the intention of the Government, if returned to power, to make some adjustment of State and Commonwealth finances. The Government proposes no longer to collect the entertainments tax, land tax, estate duties, and 40 per cent, of the tax on the incomes of individuals; and ultimately to abandon entirely the field of direct taxation. It cannot 'be denied that the present system is unscientific, and can only lead to disaster. Some years ago, it was suggested by the then Commonwealth Treasurer that the per capita payments should be reduced by 2s. 6d. each year. That may have been a more diplomatic proposal; but it would not have been so satisfactory as the proposal to discontinue them altogether. By the Commonwealth vacating the field of direct taxation, the taxpayers of this country will be placed in a better position than if the per capita payments were continued. In my opinion, the closer the taxing authority is to the taxpayer the better, because he is then able to keep a better check on expenditure. The revenue of the Commonwealth should be derived from Customs and excise duties alone, as by that means it would be taxing the whole of the people of Australia. The several States levy taxes upon only a section of the people. It has been suggested that the Government's proposals are unconstitutional; but there is no foundation for fear in that direction. We must not lose sight of the fact that, allied with the Government's proposal to discontinue the per capita payments is its intention to reduce direct taxation. If the Customs revenue continues to flourish, it should soon be possible gradually to reduce the taxation of incomes until the Commonwealth disappears entirely from that field.

The Government is also submitting a national roads policy to assist the development of the Commonwealth. I do not think one member of this Parliament, or of the State legislature, would say that road-construction -is not a necessary work. An extensive migration policy is closely associated with roadconstruction, which leads to further development and settlement. We have scarcely awakened to the fact that future railway construction must be confined to main trunk lines, as in many instances the country can be more satisfactorily and economically developed by good roads. As it is utterly impossible for settlers to transport their produce to market unless good roads are provided, the Government at the last elections, announced its intention to ' submit a main roads scheme. This proposal, which I supported, was also strongly favoured by many candidates, and an overwhelming majority of the electors, but it was quite obvious that a policy of road-construction could not be embarked upon unless the necessary funds were provided. The necessity for goods roads is manifest. In South Australia the Government has imposed a tax on petrol consumption in order to provide money to meet the cost of main roads development and maintenance. It is competent for the Federal Parliament to make advances to the States, and also to enter into agreements with the States, but the obstacle in this instance is that the financial control ultimately rests with the Commonwealth. Some of the States have already recoiled from the position which they adopted in the first instance, and have decided not te accept the benefits or burdens imposed by the agreement. It is unlikely that the Commonwealth would levy a tax and hand over the proceeds to the State Parliaments or to any State body to spend without exercising any control whatever. It would, of course, have been much easier for the Government to constitute a board consisting of State Ministers for Public Works and the Commonwealth Minister for Works and Railways, or to appoint an independent board, but probably it would then have been said that the Government had already appointed too many boards. The scheme has, however, been embarked upon, and has beeu accepted by some of the States.


Senator Pearce - Three States have accepted the agreement.


Senator McLACHLAN - Yes, I think Western Australia, Queensland and Tasmania have accepted it, but why Tasmania, whose allocation will be on the basis of three-fifths as to population and two-fifths as to area, should do so I do not know, because she is bound to suffer. New South Wales has positively and definitely declined to be a warty to the agreement, but, judging from recent experiences in that State, considerable sums of money could be spent to advantage in New South Wales, particularly on some roads in the vicinity of Sydney. In the first place, the South Australian Government expressed its , intention of accepting the agreement, but later the State Parliament unanimously decided not to have anything to do with it. Our migration and land settlement policy is so closely associated with the construction of main roads that I am hopeful that practically all the States will bc parties to the agreement.

There does not appear to be any justification for an increase in the price of petrol in consequence of the imposition of a petrol tax, as has been suggested. I am a motor owner, but I do not think for a moment that motor users will be affected to the extent that some suggest. A person of some experience in the motor trade in Australia assured me the other day that motorists will ultimately accept this policy with open arms. There are about 300,000 motor users in Australia, and if each averaged 5.000 miles a year the additional cost they would incur if a petrol tax were imposed, and added to the price would not exceed £2 a year, but that expenditure would be. more than compensated for by the reduced wear and tear on their cars, as the result of better roads.


Senator Needham - Of what advantage will better roads be to a man who does not use them?


Senator McLACHLAN - I do not think, fora moment, that the Government has any intention of taxing persons who use petrol for other than transport purposes; and in such cases probably provision will be made for a draw-back, as was done in South Australia. It is the duty of members of this Chamber, and of another place, to deal with this matter in a businesslike way, and, when the opportunity arrives, to ensure that no hardships are imposed upon any one. Under this arrangement, South Australia would receive a little more on a 2d. tax than is at present being collected on a tax of 3d.

Frequent reference has been made to the increasing expenditure of the Commonwealth, but according to the figures submitted by the Treasurer there is very little expenditure to which the pruning knife could reasonably be applied. The estimated revenue for the ensuing year is £51,382,000, and the estimated expenditure, exclusive of business undertakings, territories under Commonwealth control, and payments to or for the States is £49,287,443. The principal items of expenditure include war and repatriation services, £29,219,906; Department of Defence, £3,800,000; special defence, £1,000,000 ; interest on sinking fund, £1,152,000; invalid and old-age pensions, £9,000,000; maternity allowance, £675,000; and wine export bounty, £150,000. In passing, I may say that the wine export bounty is, I believe, the only revenue-earning bounty in existence. The figures show that the extra excise which the Government is receiving from spirits used for fortifying wine shipped overseas almost equals the amount of the annual bounty to the wine producers. That is a matter which should not be overlooked by the Minister representing the Minister for Markets and Migration. Other items of expenditure include iron and steel products bounty, £250,000; bounty on cotton and cotton yarn, £150,000 ; other special appropriations, £401,000; ordinary votes of departments, £2,794,000; and miscellaneous services, £494.000. These items of expenditure, including those already mentioned, amount to £49,287,443. Notwithstanding that, there is a deficit of £317,848 on business undertakings. An honorable senator suggested this afternoon that the Government should enter upon some other commercial enterprise. The contributions from the general revenue for payments to or for the States amount to £1,226,789.

The proposed payments to the States have been worked out on a Commonwealth basis, but I understand, from observations made in another place, that, whatever method is adopted, the Commonwealth Government will from time to time see that the States are not the losers. Duringthe delivery of his budget speech the Treasurer (Dr. Earle Page), in reply to an interjection, said that the matter had to be adjusted from year to year as occasion arose. There need be no fear on the part of State Treasurers that the position will not be met. This Parliament - at all events this Chamber- can be trusted to see that that is done. The policy with which I was dealing before I passed somewhat cavalierly to the figures, which I have just quoted is one that I think appeals to Australians, and should appeal to our national sentiment. Although we may criticize the Government for loose business methods we must realize the difficulty of exercising supervision over expenditure in a country so vast as Australia. I have particularly in mind the construction of the Grafton to South Brisbane railway. It appears to me that that matter could have been handled in a more business-like way. It would have been much more advisable if firm tenders had been obtained for the construction of that railway. The Commonwealth would then have known where it stood in relation to the cost.


Senator Crawford - The tenders were firm enough. The States cannot exceed the amount at which they tendered.


Senator McLACHLAN - Why, then, was it necessary for this Parliament to make available a further £500,000?


Senator Pearce - The tenders exceeded the estimate of the Railway Council.


Senator McLACHLAN - A centralized administration, such as the Commonwealth Government must be, is not so well equipped for dealing with matters of that sort as is the authority which is on the spot. In such matters the Government should, where possible, enter into contracts, so that it would know what it had to pay, and would not subsequently have to meet claims based on additional wages or shorter working hours.


Senator McHugh - Does not every contract contain a provision that the Government shall make good any extra cost caused by increased wages ?


Senator McLACHLAN - Not as a rule. A wise contractor seeks to have that provision inserted in his contract. As a rule contracts in which that provision is inserted are for cost, plus commission. Then it does not matter to the contractor if wages are increased, because he receives commission on the additional cost. That is not a desirable contract for any government to enter into. Linked up with the policy of high protection is. no doubt, the movement to increase the flow of migrants to Australia. The migration scheme of the Government is a big and a bold one, and we all hope that it will prove successful. . Associated also with that scheme is the policy of national roads.

A matter about which we have not heard a great deal this session is the marketing of our produce overseas. The slogan, some little while ago, was" Men, markets and money." We are to get the men and the money, but we are far from securing a stabilized market for our products. Last year 1 had the privilege of investigating the marketing of our produce overseas. I arrived at several conclusions from the lessons of a practical nature that I then learned. I may be prejudiced in favour of Australia, but I know of no produce that for flavour, quality, and appearance is equal to some of the Australian produce that could be sent overseas. We must see that only the quality which is acceptable to the people of the United Kingdom is sent there. That is my first postulate. I saw on my voyage to England apples that I have since ascertained were permitted to be exported from Tasmania. It would have been better for the Government, for the good name of Australia, and the reputation of Tasmania, if those apples had been dumped into the Hobart Harbour at the expense of the Commonwealth Government. They were an exceedingly bad advertisement. They pursued me throughout England. I met them going overseas; I mot them in the provinces, and at Keswick, near the Lakes, where a man refused to expose them for sale because they would have a detrimental effect upon the other produce in his window. As a contrast, let me say that I was told by the man who was in charge of that very same shop that no better canned pears ever went across the seas than those which he stocked. They were sent from South Australia, and they bore the brand, " The Keswick Fruit Preserving Co." I have since been informed that they were packed by Henry Jones and Company. The price which was paid for those pears was 17s. 6d. a dozen, compared with 14s. 6d. for the Californian pack. The people of Keswick, which is not a small town, purchased them in preference to the Californian article on every occasion. The man to whom I spoke was so pleased with them, that he not only kept them for his own use, but also pushed their sale. They were a good advertisement for Australia. In the back room of his shop were the apples that had been sent from Tasmania.


Senator H Hays - They passed the inspection of a Commonwealth officer.


Senator McLACHLAN - I have been informed that special permission was given for them to be exported.


Senator Pearce - At the urgent request of Tasmania.


Senator McLACHLAN - I am not blaming the Minister. It is unfortunate for Australia that they were exported. I have fed pigs on better apples. In the markets which I attended I saw those apples being sold for whatever they would fetch;


Senator Hoare -What was wrong with them?


Senator McLACHLAN - They appeared to be poor in quality; they were very small; and they were marked by hail or something else.


Senator Pearce - Black spot.


Senator McLACHLAN - That may be so. There are no better purchasers in the world than our brothers and sisters in Great Britain, and none are so anxious to take our produce provided it is up to standard. My second postulate is that we must maintain continuity of supplies, and at all times keep open our overseas trade routes. At Colombo I found that canned fruits and other products of the IXL Company were in universal use and stocked by the big emporiums. Colombo has a very big European population, which lives tolerably well. When I arrived there the overseas shipping strike was, unfortunately, in progress, and no Australian produce was on the market. A cable for supplies was sent, not to Australia, but to California, and that market was lost to us. It may be possible for us to regain it. Another, and an even more important, matter, is the supervision of our produce when it arrives overseas. It may astound honorable senators to learn that some friends of mine purchased at Wembley a commodity labelled "Australian Honey," in the making of which no bee had participated. It had been synthetically made. In a shop window at Dorset I saw stuff marked " Colonial Lamb," It was one of the worst forequarters of a lamb that I had even seen. I was told by the man in charge of the shop that it was Canterbury lamb. When I questioned the accuracy of his statement he promptly produced a ticket with the mark " N. Z. lamb." He may have had that ticket for several years. The one thing certain is that our produce is not getting a fair deal, and it is necessary for steps to be taken to appoint men who are skilled and versatile in the business, to see that it is not misrepresented by retailers and others who are charged with its disposal overseas. We were given a wonderful advertisement at Wembley, and unless it is followed up by further publicity the money which we then expended will have been thrown away. New Zealand sets us an excelleut example by having in the Strand a refrigeratedshop, where its produce is kept fresh from day to day. For every person who passes Australia House, where our produce is displayed, I believe I am not exaggerating when I say that from 500 to 1,000 pass the New Zealand shop in the Strand. It is necessary that our publicity shall equal that of New Zealand. Our produce will stand any inspection that is applied to it, and we should take the necessary steps to bring it before the notice of the best consumers. Organization is necessary to achieve this result. I made a suggestion for what it was worth to the Agent-General of my own State that in the heart of London - say, in Piccadilly Circus - there should be a moving exhibit under glass of Australian products in a refrigerated condition. Large business establishments in Great Britain are holding out their hands towards the Australian producer, and it might be wise to employ their organizations and knowledge in the interests of this country. I heard Senator J. B. Hayes say the other day that the prices realized for our products were unsatisfactory. I examined the books of a number of wholesale houses in London - they were put before me quite openly - and I came to the conclusion that the toll they were levying on the producer was small indeed. But the price that has to be paid for the Australian article to the retailer is exceedingly high, and it seems to me that a selling organization on business lines must be established to enable the trade to be developed. Efforts are being made by various bodies throughout Great Britain to promote Imperial trade, and we should seize every opportunity to assist people overseas to obtain an article superior to any procurable from other parts of the world.

I urge honorable senators, in considering the legislative programme of the Government, to keep in mind the larger issues that are at stake. Whatever faults may be found regarding the details of the policy can be remedied; but as a young member of this Chamber I hope that we shall all assist in legislating in a manner that will lead to progress on a national basis, and on broader lines than heretofore, remembering that this is a young country situated, almost in isolation, in the Pacific.







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