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Wednesday, 18 November 1936

Senator J B HAYES (Tasmania) . - Honorable senators will admit that it is becoming apparent that the primary industries cannot continue to produce their commodities under Australian conditions and sell them at world's parity. Without entering upon a discussion of high tariffs and Arbitration Court awards, I consider that the policy which has been adopted for years by successive Commonwealth governments has made primary production increasingly difficult and expensive. In view of the fact that all other sections of the community have derived protection and advantages from Arbitration Court awards or high tariffs, the primary producers are surely entitled to similar consideration. In past years, in order to assist this section, the .Federal and State governments initiated marketing schemes, the basis of which was 1o export the surplus, and to charge a higher home-consumption price for that which was consumed locally, in order that the average of the two returns would give to the producers a reasonable margin over costs of production. The butter equalization authorities initiated a scheme along these lines and declared a quota for export and a home-consumption price for the remainder. The governments of the various States could have acted on their own initiative in fixing such a price, but it was obvious that the butter-makers in one State would not export their commodity to England at lOd. per lb. if the price in another State was ls. 4d. For that reason the Commonwealth Government was requested to declare that butter could not be sent from one State to another without a licence, which could not be granted unless the producer had shipped the declared quota overseas. That arrangement continued for some time, until the Privy Council declared in the James case that the legislation under which the scheme was operated was ultra vires the Constitution. At the present time it is found to be desirable to return to the position which existed before the decision of the Privy Council. When I first read this bill I came to the conclusion that its provisions went a great deal further than the powers previously exercised by the Commonwealth, and that the States were being asked to surrender too much. Many people are resentful of any new encroachment by the Commonwealth on section 92 of the Constitution. They regard absolute freetrade between the States as a right and a necessity. The Leader of the Senate (Senator Pearce) stated that this bill could only be effective in conjunction with complementary State legislation. Unfortunately, that assurance is not contained in the bill itself, and That omission renders it, more difficult for honorable senators to persuade the Australian public to approve of this principle at the referendum. This legislation has not only to pass this Parliament, but also must be approved by the electors, and numerous objections will certainly be raised, because of the absence of such a safeguard in the bill. In the circumstances, Senator Payne has forecast an amendment which, if inserted in the bill, will make the position doubly secure, from the viewpoint of those who are jealous of State rights. My reason for rising to speak on this bill is to ask the Government to accept the amendment, because I am sure that i.t will be of material assistance to honorable senators in their efforts to secure the approval of the electors at the referendum. The Postmaster-General (Senator A. J. McLachlan) stated that the proposed alteration does not go far, because it is limited by section 51 of the Constitution. Unfortunately, we cannot explain that to th$ people in the country so. clearly as we could explain the bill if this amendment were incorporated in it. The amendment sets out distinctly that, unless the States agree to pass complementary legislation, the Commonwealth cannot exercise any control over the marketing of any commodity. I therefore ask the Government to accept the amendment. I want the proposed alteration to be carried at the referendum. I am at. a loss to know what other course will be open to the Government in or-der to assist the primary producers if this appeal to the people should fail. In my opinion, an excise and bounty scheme could not be sati$factorily administered. The purpose underlying this bill is sound; Commonwealth legislation, at the request of the States, can be of great advantage to the producers. But honorable senators when taking the bill to the country desire to be able to tell the public that the bill means exactly what it says - that Commonwealth legislation cannot function unless in conjunction with State legislation. If the amendment of Senator Payne be accepted that position will be quite clear to the public. The public are genuinely afraid that the bill goes further than we are asked to believe. In my opinion, this fear may defeat the proposal at the referendum. The few words which Senator Payne has suggested would dispel these doubts, and be of great assistance to us in securing the people's approval of the proposed section 92a.

Senator Collings - The amendment would create new difficulties.

Senator J B HAYES - Its purpose is quite plain. It is what we want, and what the Leader of the Senate (Senator Pearce) has explained is the objective of the Government in introducing the bill. In those circumstances, I fail to see any reason for opposing the amendment.

The butter equalization scheme declared that a quota of this commodity produced in Australia should be exported; but a difficulty arose in connexion with dairyfarm butter. Hundreds of farmers make from 20 to 30 lb. of butter weekly, and either sell it to the local storekeepers in exchange for goods, or to private customers. This has been a lifelong practice with them; but they obviously could not export their quota, because they do not possess the expensive appliances for pasteurization or freezing chambers. Foi this reason they are unable to produce butter which would keep for export purposes, and they, therefore, continued to sell it locally. But the men who sent their cream to the factory were paid for a portion at the Australian price, and for the export quota at world's parity, which was lower than the home price; but the men who made butter on their farms received the Australian price for the whole of their output, simply because they were not in a position to export. The equalization control authority in Tasmania, realizing the unfairness of the position, instituted a system whereby dairy-farmers who could not export their quota were compelled to put a 3d., subsequently 2d.; stamp upon their butter. This caused considerable bitterness and heart-burning. Men said that they had been marketing butter all their lives, that they had never stamped it. and never would. Other men spent £50 or £60 on stamps which they could ill afford. Eventually, conditions 'became so chaotic that the Government of Tasmania held a referendum to ascertain the producers' views upon the matter. Although there were reasons for the smallness of the poll, there was a substantial majority agains' the equalization scheme which had to be abandoned forthwith. "When we go to the public next year to ask them to vote for the referendum, the fear will bc expressed that their previous experience may be repeated. The producers arc not afraid of a marketing scheme, but they will say, "Before I vote 'Yes', I want to know what sort of marketing scheme I shall get, and will the necessity arise for placing more stamps on butter?". At the present time, I am not in a position to answer these questions.

Senator Collings - There must bc some uniformity.

Senator J B HAYES - At this juncture, I propose to suggest a method to overcome this difficulty. The proportion of farm butter is small in comparison with the total production in Australia. Owing to Tasmania being a small State, and the large number of small farms in it, the proportion of faim butter is probably bigger there than in any other State. To overcome the difficulty - and it would be only in conformity with the practice of subsidizing industries - I consider that the State and Commonwealth Governments should vote a small subsidy from which any levy could be paid. Only a small sum of money would be involved, but the farmers would not have to purchase stamps. Those who make butter on the farm are in a small way of business; those who have big herds of cows naturally send their cream to the factories. My suggestion affects only the small men, and Ave would be quite justified in assisting them if a levy were imposed. Such consideration on the part of the governments concerned would materially assist to carry the referendum proposal. The only obstacle to success at the referendum will be that the people will think that the request of the Commonwealth goes too fat. A number of constitutional authorities hold the same view, notwithstanding what has been said in this chamber. The bill may mean more than what honorable senators think.

This difficulty can be settled by accepting the amendment moved by Senator Payne. If the Government would grant a subsidy in order to help the small farmers instead of having this wretched system of affixing a stamp to each pound of butter, an affirmative majority would be almost certain. I do not blame the Butter Equalization Board for the imposition of the stamp duty, because it was called upon to protect the dairy-farmer who was sending his cream to the factories. But if the public are in doubt as to the limits to which the proposed alteration will enable the Commonwealth to go, they will not vote for it at the referendum.

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