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Thursday, 12 November 1936


Senator DUNCAN-HUGHES (SOUTH AUSTRALIA) - HUGHES. - Nevertheless, I have read in the press that they are not in favour of it.


Senator Sir George Pearce - They do not want government marketing schemes; they have their own.


Senator Guthrie - They do not want interference at all.


Senator Sir George Pearce - That is not to say that they would refuse the Commonwealth power to legislate in respect of marketing schemes for some other commodities.


Senator DUNCAN-HUGHES - If the Commonwealth obtains the power which is sought in this bill, the wool industry is liable to he controlled under it, and some of the wool-growers, at least, are aware of that. I say further that if there is any doubt on the subject, and the wool interests are asked their opinion in regard to it, they will he found not to be in favour of the extension of the Commonwealth's power. Large numbers of wheat-growers also are not in favour of it. With regard to the general question of control, I remember fighting when I was a member of the House of Representatives against government control of apples. Despite my opposition, however, the bill was carried by an overwhelming majority, and became law, but the apple-growers themselves turned down the scheme; they refused to be controlled.


Senator Sir George Pearce - That shows that control legislation cannot be brought in against the will of the producers concerned. In every case the industry is consulted.


Senator DUNCAN-HUGHES - Tha t may be so at present, but it docs not follow that it will be the case with any government if the powers sought in this bill are granted.


Senator Hardy - The proposed power will not give the right compulsorily to acquire.


Senator Grant - Ifthis power be granted, it will be possible to stop interstate freetrade in goods.


Senator DUNCAN-HUGHES - This bill has not, by any means, the support of producers generally. I do not think that I should have much difficulty in proving that. On the 23rd October last, the Interstate Fruit-growers Conference met in Adelaide, and the Adelaide Advertiser on the following day published this paragraph relating to the proceedings of the conference: -

Although several speakers urged delegates to the Interstate Fruit-growers Conference yesterday to endorse the Federal Government's marketing proposals and to give it the power it asked for provided no other powers were requested, a motion to that effectwas lost after a long and spirited debate.

The motion was lost by eighteen to fifteen. Many present did not vote.

Does that look like enthusiasm on the part of the fruit-growers for the proposed referendum? Is it to be expected that they will canvass for an affirmative vote? In my judgment, the only wayan amendment can be carried in Australia is by getting the general assent of the States and having real enthusiasm behind it. So far as I can form an opinion on this matter - I am speaking of my own State - there is a general apathy in regard to this proposed referendum.


Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - There is apathy in regard to every referendum.


Senator DUNCAN-HUGHES - And a good deal of lack of knowledge about it. Real interest is concentrated in two small groups, one of which is for the amendment and the other against it.


Senator Hardy - Wait until the issue becomes definite and the people are seised of the importance of the request.


Senator DUNCAN-HUGHES - Nothing could have been more important than the government control of essential services. When that issue was before the people, in addition to canvassing my own electorate, I went into a Labour district whose representative was not allowed to speak in favour of the amendment. The proposal was turned down by the people in both electorates by a majority of something like two or three to one.


Senator Foll - Possibly as the result of the honorable senator's visit.


Senator Dein - The honorable senator does not suggest that he is helping the Government by opposing this bill?


Senator DUNCAN-HUGHES - I am not concerned with helping or hindering the Government. I am here to assist to represent the whole of the people of my State; my job is to consider whether there is justifiable ground for altering the Constitution, and if in my judgment there is not, to vote against such a proposal. And, so far as I can judge, in so voting I shall bc in exceedingly good company when I get back to my own State.


Senator Hardy - The honorable senator cannot presuppose the defeat of the referendum until the issues are placed before the people.


Senator DUNCAN-HUGHES - That brings me to the whole subject of pools, particularly compulsory pools ; I am noi a pooler. I think that in pools there is difficulty in detecting mistakes, which does not obtain in connexion with what some might term disorganized marketing. It is very difficult to follow the financial side of the operations of pools; all we know is that so much of a certain commodity is sold for so much, but we cannot check up on the various operations, and judge whether or not those in control of the pool have exercised good judgment. Moreover, there is almost invariably a tendency when pools are formed to attempt to dictate prices. Everybody knows that that has happened in the past in connexion with various pools that have been established; and some of the difficulties associated with the wheat industry in Australia during recent years have been due to the establishment of wheat pools in North America. In' Great Britain to-day there is increasing public opinion against the British attempts to bolster up the prices of primary products. I may be asked whether I think there should be any form of control. I have for years said that there is one form of control, one step essential if we are to sell our goods overseas, and that is that, such goods shall be passed as suitable for export abroad. After that, I would leave it to the growers to sell how, when, mid to whom, they desired.


Senator Foll - In fierce competition with each other?


Senator DUNCAN-HUGHES - Ali business is competitive. Why should it be different in these industries?


Senator Foll - That is what brought about the slump in prices before.


Senator Arkins - Sugar, cotton, coffee and tea have been controlled in every producing country.


Senator DUNCAN-HUGHES - I should like to give the honorable senator an instance in connexion Avith the former honey pool in South Australia. Following the establishment of the pool, prices were raised, with the result that a considerable number of additional persons engaged in bee-farming, with consequent over-production. But contemporaneously there were fewer -buyers because of the rise of prices. People said : " We shall not buy honey; we shall buy jam." The result was that the honey producers received the double impact of high prices causing a reduction of the number of purchasers, and an increase of the number of producers because of the high prices. Eventually the pool went out oF existence.


Senator Millen - We had the same experience in Tasmania in connexion with the hop pool.


Senator Arkins - The pools established for the control of tea and rubber are a shining example of the efficiency of such methods.


Senator DUNCAN-HUGHES - I do not propose to deal Avith those commodities; there may be instances where a government is so whole-heartedly behind an industry that it is bound to succeed in any circumstances. I have indicated the only form of control that I think necessary. I do not oppose the establishment of voluntary pools; all competition is good as it tends to better the article produced. Let the voluntary poolers combine together, and trade as other traders have to do.


Senator Dein - Does the honorable senator think that if there were no control at all it would affect our exportable surplus overseas?


Senator DUNCAN-HUGHES - That is a question I could not answer. I am giving my general views on the subject of pools. Nobody can predict exactly what will happen in regard to the proposal in this bill. I may say, however, that several years ago I predicted what would happen in later stages of this matter. Hitherto it has happened. I also prophesied that if a referendum were taken on it, a negative vote would be recorded unless the subject-matter were clearly restricted, and if this referendum is taken it may meet with no better success than earlier stages.


Senator Hardy - That has to be proved.


Senator DUNCAN-HUGHES - Nobody who has heard me speak in this Senate will suspect me of being opposed to the primary producers. I have fought for them in regard to customs tariffs, and other imposts. But I fear pools, because I know that they can, and, in my opinion, will inevitably, be turned against the primary producers seeking them. The control which they seek in order to get a maximum price will be utilized to force on them a minimum price because they will be in a minority.


Senator JAMES McLACHLAN (SOUTH AUSTRALIA) - Under this proposal could the Government force the establishment of a compulsory pool?


Senator DUNCAN-HUGHES - Senator Hardy says " No", but I hope that the Minister will give us an assurance on that point. The Attorney-General (Mr. Menzies) said that, of its own motion, the Commonwealth could not force a compulsory pool. He went on to say that there would be a sub-structure of State legislation and what perhaps might be termed a coping stone of Commonwealth legislation.


Senator Hardy - I said that a compulsory pool would be impossible because the States have not the power of compulsory acquisition.


Senator DUNCAN-HUGHES - If several large States apply for compulsory pools, they will probably force the smaller States to fall into line.


Senator Hardy - No.


Senator DUNCAN-HUGHES - Other people think so. It is said that there was a general belief that the Commonwealth had the power, but it is obvious to any one who reads the report of the federal convention that the framers of the Constitution had no such intention. Frequently in this chamber the Leader of the Opposition claims that what matters is not the letter of the law, but its intention. I disagree with him, for in dealing with laws, we must follow the letter. We can only guess the intention. However, the intention of the framers of the Constitution is clear. Mr. Deakin, Mr. Barton, Mr. Turner, Sir John Downer, and Sir Isaac Isaacs spoke in favour of absolute freetrade. Of their intention in that respect there can be no doubt. They insisted that trade should be absolutely free. We have, therefore, not only the intention, but also the legal judgment of the Privy Council, which shows that that intention was expressed in legally sufficient and effective words. Any one who has any doubt about it has only to read sections 92 and 107 of the Constitution. Section 92 is known to every honorable senator, butthe provisions of section 107 are not so well known. That section provides - 107. Every power of the Parliament of a colony which has become or becomes a State, shall, unless it is by this Constitution exclusively vested in the Parliament of . the Commonwealth or withdrawn from the Parliament of the State, continue as at the establishment of the Commonwealth, or as at the admission or establishment of this State as the case may be.

In other words, powers not delegated to the Commonwealth are reserved absolutely to the States. This is the way that the man in the street, particularly in the smaller States, regards the situation; and that is what will be the main factor in this referendum. I do not say it for the purpose of disparaging any government, but the man in the street is of the opinion that there has been a reaching out by the Commonwealth for additional powers, insteadof attention to those powers, such as defence and external affairs, which were specifically delegated to it. He believesalso that there has been an intrusion into fieldsof taxation which was not intended in the days of the federalconvention. That intrusion may, or may not, have been justified, but the fact remains that itwas not intended. There has been an intrusion also into matters of health, because of the power delegatedto the Commonwealth in regard to quarantine, and because of the power ofthe purse. In regard toroads also, the power of the purse has led the Commonwealth to intrude. The Commonwealth has also assumed powers in regard to wireless broadcasting and aviation. People are asking why no referendum has been held with regard to those subjects, failing agreement with and action by the States. I understand from the press that a referendum will be taken in regard to aviation.


Senator Guthrie -That is becauseof a decision in a recent case.

SenatorDUNCAN-HUGHES.- There is anotherlotof powers which the Commonwealthhasassumed, but which have since been taken from it. The situation which has arisen bears out what some of us have been saying in this Parliament for some time, namely, that the Parliament has gone a long way beyond the powers which were allotted to it. Whether or not the Commonwealth should have those extra powers, the fact that it has exceeded its powers is made evident by the quashingby the High Court of regulations, and by decisions in some cases which upsetwhole systems of laws. The decision of the Privy Council show's clearly that the Commonwealth has assumed powers which, in fact, it does not possess; and, consequently, the man in the street asks why the Commonwealth has assumed them, and then, when it finds that it does not possess them, asks the people for such power.

SenatorGuthrie.-Every one thought that the Commonwealth possessed those powers.


Senator DUNCAN-HUGHES -i have already dealt with that aspectof the subject. Again, the man in the street asks why no convention has been held to consider alterations of theConstitution which are considered necessary.


Senator Brennan - A royalcommission investigated the subject a few years ago; the proposal before the Senate is one of its recommendations.


Senator DUNCAN-HUGHES - If there is a desire for the States and the Commonwealth topulltogether, why has nothing been done tocall a convention, wherepeople who arecompetent to deal with these thingscan discuss them in all their aspects?


Senator Sir George Pearce - In 1920 theStates unanimously agreed tohand tothe Commonwealth powers in respect of aviation. Theyre-affirmed that decision six years later, but they have not acted on it.


Senator DUNCAN-HUGHES - If, in respect of aviation, the fault is withthe States, can the same be said inregard to broadcasting?


Senator Sir George Pearce


Senator DUNCAN-HUGHES -I am notat allconvincedof the powers of the Commonwealth in respect of broadcasting.


Senator A J McLACHLAN (SOUTH AUSTRALIA) - The High Court hasmadeapronouncement in regard to broadcasting.


Senator DUNCAN-HUGHES - Is there any likelihood of its decision being upset ? Personally, I am in favour of the control of aviation and broadcasting by the Commonwealth, for noother authority could control them effectively. If it is obvious that certain powers should be vested in the Commonwealth, why not approach the people, by way either of a convention or a referendum, and ask for them? It would be better to do that before assuming such powers, than to act, only to find later that the Commonwelalth is legally incompetent to dowhat it has done.


Senator Sir George Pearce - That has not been done because the States have already agreed to act.


Senator DUNCAN-HUGHES - Why not ask the people?


Senator Sir George Pearce - And in the meantime leave aviation unregulated?


Senator DUNCAN-HUGHES -Is it not better to have the power from the people before an assumed power is exercised? That legislation passed by this Parliament should be declared ultra vires is undesirable.


Senator Sir George Pearce - When the legislation was passing through Parliament, did the honorable senator or any one else point out that it would be ultra vires?


Senator DUNCAN-HUGHES - I cannot answer with respect to all the legislation; but I remind the Minister that, even when I have pointed out things of that nature, my view has not always been accepted, although it has been accepted in relation to one or two regulations. A private senator must carry a lot of weight to get the Senate, on his statement alone, to agree that a bill which has the approval of the Attorney-General of the Commonwealth is ultra vires. In effect this proposal asks for the restoration of something which had no legal existence. Behind all this is a direct drive towards unification.


Senator Hardy - Is not unification a feature of every successful federation in the world?


Senator DUNCAN-HUGHES - I do not know. Some day the people of Australia may agree to some form of unification voluntarily; but it will be only after they are convinced that it will provide a fair deal all round. They have not that confidence at present. In saying that, I am not saying that the present Government has not done move for the smaller States than any other Government has done. The fact remains, however, that dissatisfaction is still very evident in the smaller States. I should think that senators representing the three smaller States may fairly be expected to take a stand against the drive towards unification.I read in the newspapers recently that the Government is going ahead with its referendum proposal, having reached an understanding with a group of members of Parliament that, later, consideration will be given to the granting of fuller industrial powers to the Commonwealth. In other words, it is being allowed to bring in this referendum proposal as a return for something larger which it may give in the future.


Senator Dein - That was promised by the Prime Minister in 1931.


Senator DUNCAN-HUGHES - Prime Ministers, and private members also, have promised a good deal at times. I am concerned not so much with promises, as with performances.


Senator Sir Walter Massy-Greene - In 1926 the honorable senator supported a proposal for the granting offull industrial powers to the Commonwealth.


Senator DUNCAN-HUGHES - I think not.


Senator Sir Walter Massy-Greene - I can assure the honorable senator on that point.


Senator DUNCAN-HUGHES - I assume that the honorable senator is speaking of the industry and commerce power, concerning which it was proposed that section 51 of the Constitution be altered by omittingparagraph(xx) "Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth ".


Senator Sir Walter Massy-Greene - Several alterations were proposed, one of which dealt with industry, by omitting the limiting words and adding another paragraph.

Sena tor DUNCAN-HUGHES. - To which does the honorable senator refer? Does he mean the proposal - (xli). Investing State authorities with powers as the Parliament confers on them with respect to the regulation and determination of terms and conditions of industrial employment and of rights and duties of employers and employees with respect to industrial matters and things; or -

(xli)   Investing State authorities with any power which the Parliament, by virtue of paragraph 35 (xxxv) or paragraph (xl) of this section, has vested or has power to invest in any authority established by the Commonwealth. or does he mean that which related to trusts and combinations - (xlii). Trusts and combinations (whether composed of individuals or corporations or both) in restraint of trade, trade unions and associations of employers or employees for industrial purposes, including the formation, regulation, control and dissolution thereof.


Senator Sir Walter Massy-Greene - The first one struck out the limiting words in section 51.


Senator DUNCAN-HUGHES - I am prepared to hand these papers to Senator Massy-Greene if he will point out in what respect my attitude to-day differs from that which I adopted in 1926. ft seems to me that the two matters are entirely dissimilar. As I was saying, the suggestion that we should now seek to get an amendment accepted by the people, and later on have a wider referendum, does not appeal to me. I am not prepared to give a possible something for what I regard as an almost' certain nothing. That is my attitude. It is not for me to say what other course the Government should adopt. That is its responsibility. My concern is to say that I consider that this referendum will not be passed by the people, and that in my judgment the Government's best course is to act within its existing powers. lc has the power to act, and why does it not use it instead of asking for powers which, in my opinion, will not be granted?'


Senator Sir George Pearce - Would the honorable senator support an excise duty and a bounty for every primary industry that cared to ask for them?


Senator DUNCAN-HUGHES - That is not suggested. We are told that under this referendum proposal it is not intended to exercise universally the powers which are sought, but merely to keep alive the industries at present affected.


Senator Sir George Pearce - Would the honorable senator support an excise and bounty scheme for the butter, wheat and dried fruits industries, which are th*s industries affected?


Senator DUNCAN-HUGHES - I shall wait till that issue arises. It is preferable for the Government to act within its powers. The question now before us is not how I should vote, but how the problem confronting the producers should be dealt with.


Senator Collings - Does the honorable senator propose to vote for this bill?


Senator DUNCAN-HUGHES - Most certainly I do not. I invite the attention of honorable senators to an excellent speech made on this subject in the South Australian House of Assembly on the 29 th September by Mr. R. J. Rudall, who represents the Barossa electorate. He traversed, rather from the State point of view, the whole history of the legal actions associated with this matter right down to the present time, a task which he is eminently competent to do. Although he said that he desired to know the exact terms of the amendment before stating whether or not he would oppose it, his whole speech was a criticism of the proposal to deal with this matter by a referendum to secure more powers for the Commonwealth rather than by the exercise of the powers of excise and bounty which the Commonwealth already possesses. He dealt, for instance, with the intention of the founders of the Constitution, and went on -

The point now arises as to whether there are any other unchallengeable powers in the Constitution by which the same end may be achieved. I address myself, therefore, to this question at issue and say most emphatically that the same object can be achieved by other means: that although one road to the desired objective has been declared closed another remains open, and no constitutional objection can bo raised to its use. Is there any one bold enough to assort that by the exercise of the excise and bounty powers contained in the Constitution the Commonwealth Parliament cannot achieve the same objective? If the end desired by the legislation is the maintenance of prices in Australia which would compensate for the unremunerative prices which may from time to time he received in the export market, than an excise duty, the proceeds of which will bc ultimately distributed in the form of a bounty, will meet the same objective. This was the remedy which, I understand, was asked by those concerned in the industries immediately affected. From thu practical aspect, therefore, it seems apparent that this remedy would be sufficient. From a constitutional point of view it cannot he attacked, and my authority for this is the speech of the Commonwealth Attorney-General himself.

Then he said -

I am perfectly aware that the present occupants of the Government benches in the Commonwealth Parliament are drawn from my own party, but the relationship of the Commonwealth and the States is not a matter of political parties. It is the fight of the States to maintain that sovereignty which it was thought was guaranteed to them by the Commonwealth Constitution, and which under federation should remain a.nd belong to them.

He ended -

The rights of the States, and the smaller States in particular, nest in the Senate. At present I am convinced that it is essential for the smaller States to stand firmly together, and if the people of the smaller States desire to resist, as I believe they should resist, the inroads of unification and the usurpation of their rights, then they must send to the Senate only men prepared to fight upon that ground, and who are prepared even to refuse the acceptance of any office that may weaken the unbroken front they should present. Unless they do this then the smaller States will continue to lose their attributes of sovereignty which are their rights and will increasingly become merely subordinate departments of a Parliament in which the predominating influence will be the larger cities of Australia.

I agree very substantially with what he said. He is a man, as the PostmasterGeneral (Senator A. J. McLachlan) knows, of great legal ability, particularly on the constitutional side, and of high character also.

Senator Sir WalterMassy-Greene contrasted my attitude towards this proposal with my attitude in 1926 when I supported an amendment to confer further industrial powers on the 'Commonwealth.


Senator Sir Walter Massy-Greene - If that amendment had been carried the entire industrial powers would have been given to the Commonwealth.


Senator DUNCAN-HUGHES - tion. It was proposed to delete the words "extending beyond the limits of any one State " from paragraph xxxv, of section 51 of the Constitution. That has nothing to do with marketing.


Senator Sir Walter Massy-Greene -^' I did not say that it had, but the honorable senator is talking about the danger of extending the Commonwealth powers, whereas in 1926 he supported a proposal that the Commonwealth should possess full industrial powers.


Senator DUNCAN-HUGHES - I accepted that proposal and supported it and tired myself in speaking in support of it. I do not apologize in any way for that. The honorable senator is suggesting that my action to-day is inconsistent with my attitude in 1926. The two issues are entirely different. So far as giving general powers to the Commonwealth is concerned, if, after ten years' experience in this Parliament, during which I have observed the raising of the tariff wall and the gradual financial drift of the smaller States, I say that I am not now prepared to give to the Commonwealth the extended powers which I was prepared to give then is inconsistent, I shall accept the odium for such inconsistency.

I appeal to honorable senators to conelder this question independently and regardless of party allegiance. It has been staid that the Ministry affirms that this is not a party question. It is a que?' tion of one point of view against another point of v.ew he.d by people in the same State, the two very often conflicting. I suggest that we ought to exercise our own fully-considered judgment on this matter. It is very likely that the strong States will, in the main, vote for the amendment, and that the smaller States will vote against it, but I urge honorable senators to regard this proposal oil its merits as it appears to them in the light of all the information that they can get. I was struck the other day by these sentences, written by an English philosophical writer of the last century to the Duke of Devonshire concerning the Home Eulo Bill -

I think we may go right or wrong about Ireland, or almost any great matter, and, if wrong, recover from our mistake, but the one thing from' which I think there is no salvation is when men begin to have no confidence in themselves and their own opinion, and to become the mere instruments of party . . .

I hold that the Senate primarily represents the States. That may be an additional reason to give to Senator MassyGreene for my apparent change of attitude. When in the Lower House I represented a district, whereas to-day 3 represent a State. I think that we should exercise our full and impartial judgment. This is not a party House, and I hope that every honorable senator will consider the bill on its merits, and regardless of party affiliations.







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