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Wednesday, 25 June 1941

Senator A J McLACHLAN (SOUTH AUSTRALIA) - Does the honorable senator suggest that the Prices Commissioner should limit his investigations to any particular period!

Senator FRASER - The Prices Commissioner was appointed after the .war broke out, and, as far as I have been able to gather, he cannot investigate, conditions and prices prior to. the 31st August 1939. . That- is a very important point. A motion was moved in the Legislative Assembly . in Western, Australia, on the 23rd October last, asking for the appointment of a select committee to investigate the price of superphosphate because, soon after the Prices Commissioner had fixed the price, a rise of 10.3. a ton was approved. Shortly after that the Commissioner approved of a further increase of 20s. a ton; but later he. changed his mind - on what grounds I am unable to say - and reduced the price by 4s. a ton, making the total increase since the outbreak of war 26s. a ton.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - Is not the price of superphosphate determined by the cost of phosphatic rock imported into this country from Nauru?

Senator FRASER - I shall' deal with that.

Senator McLeay - Does the honorable senator think that he knows more about the subject than does Professor Copland?

Senator FRASER - I have made no sur-h claim. I simply say that neither the people nor the Government of Western Australia are satisfied that the price is a fair and just one.

Senator McLeay - Does the honorable senator say that the decision of the Prices Commissioner was wrong?

Senator FRASER - My sole purpose in asking for the appointment of a select committee is to ensure that the whole matter be investigated. Although the Leader of the Senate may he able to enlighten us as to the justification for these increases he cannot get away from the fact that since the war broke out the price of superphosphate has been increased by 26s. a ton.

Senator McLeay - By how much have freight rates increased?

Senator FRASER - As far as I know, by 40 per cent.

Senator McLeay - And Avar risk marine insurance?

Senator FRASER - If the honorable senator will have patience I shall tell him all I know about this commodity. The bulk of the phosphatic rock imported into Australia comes from Nauru, an island about 2,000 miles from the Queensland coast. It will therefore be difficult to explain the increases that have taken place by claiming that they can be attributed largely to the increase of freight rates. Neither can it be contended that war risk marine insurance enters largely into the cost of superphosphate. The waters between Nauru and Australia arc not regarded as highly dangerous to shipping. The whole question of the manufacture and sale of superphosphate was discussed at a meeting of the Australian Agricultural Council last year, and on the motion of a South Australian Minister of the Crown, who is a supporter of the party to which the Leader of the Senate belongs, the council carried the following resolution : -

That the Commonwealth .Government make every endeavour to reduce the cost of Mme.phosphate to pre-war levels and if these efforts prove inadequate, that the price he pegged at tlie figure existing on the 31st December, 1930, as is the case in New Zealand.

According to Western Australian Ilansard, No. 19, of the 4th December, 1940, page 2529, the Western Australian representative, in seconding that motion, said : -

I have no doubt that the Commonwealth Government, through its officers, has already made some investigation of the position. Substantial reductions will have to be effected, however, if primary production is to continue as it should do in these da' s. If. as w:is stated a while ago when we were dealing with wine, the Commonwealth Government cannot, under existing machinery, instruct the Commonwealth Prices Commissioner to investigate prices ruling prior to the. 31st August. 10SB, it should make provision to do so. I am anxious to ascertain whether the ruling prices of superphosphate at the 31st August were fair or unfair. It may be that profiteering was going on then. If that is so. it would be illogical and unjust to fall ben vii v on the wartime profiteer but to allow the peace-time profiteer to continue his profiteering in wartime. Under thu Western Austin' ian legislation the State Prices Commissioner may investigate whether prices were fair or unfair prior to the 31st August . . .

It may bc that substitutes may bo found for some of thu high-priced imported ingredients pf superphosphates. I hope that we shall be able to produce, in Western Australia, some of the ingredients that are now being imported at a high price and in the near future may become still more expensive. Surely the Commonwealth and State Governments, acting both separately and conjointly, can do something to meet this situation. It will be foolish for us to sit back and accept these increases' of prices as inevitable.

Immediately following the announcement of the increase of the price of superphosphate in July of last year, the Premier of Western Australia, Mr. Willcock, in a communication to the Prime Minister, said :-

I desire to urge that the Commonwealth Government, which has already recognized the necessity for providing' assistance to farmers in their time of trouble and to various forms of primary industries, particularly thu wheat industry by means of the flour tax, should extend very favorable consideration to this matter. I sincerely trust' that you will find it possible to take action to counteract to some extent the serious effect upon these industries of this heavy increase in the cost of production.

I understand that the Prime Minister promised an early review. Subsequently he said that he was prepared to investigate the matter thoroughly on the lines requestedby Mr. Willcock. Following more recent protests an investigation was made by the Commonwealth Department of Commerce. This report was forwarded to the Western Australian Government, but in spite of that the Western Australian Parliament carried a motion for the appointment of a select committee to inquire into and report upon all matters relative to the manufacture and sale of superphosphate in Western Australia. I am not in a position to say whether the price of superphosphate is a just or an unjust one; but, like the members of the Western Australian House of Assembly, I say definitely that if the Prices Commissioner has taken as the basis for his computations the price ruling at the , 31st August, 1939, his decision may , not be a just one because the manufacturers may at that time have been indulging in profiteering.Let us consider how the increased price of superphosphate affects the farmers in my own State. The latest decision of the Prices. Commissioner means that an increased annualburden of between £360,000 and £400,000 willbe placed on Western Australian farmers.

Senator McLeay - The honorable senator cannot blame the Prices Commissioner for that.

Senator FRASER - I am not doing so; he cannot go beyond the terms of his appointment. It cannot be denied, however, that the high price of superphosphate will retard production and react detrimentally, notonly to the primary producer but also to the country as a whole.

Senator E B Johnston - The primary producers are threatened with a further increase of £2 a ton.

SenatorFRASER.- I shall deal with that later. On an average, the farmers of Western Australia use 300,000 tons of superphosphate annually, at a cost of £1,500,000. That figure is rapidly increasing, owing to the greater use of superphosphate for top-dressing. Reporting on the 27th September, 1932, on the superphosphate industry, the Director of

Development, Mr. J. Gunn, and his colleague Mr. Jas. A. Stevenson, Acting Chief Investigating Officer, stated -

It is of interest to record that in 1913-14 when the price of rock was approximately £2 7s.6d. per ton, of sulphur £418s.6d. per ton, and ofbags6s. 7d.per dozen, the list price of 17 per cent. water soluble superphosphate was £4 7s.6d. per ton. Just after the war, the price of raw materials increased considerably, and the price of 17 per cent. superphosphate went up to £6 3s. per ton. In 1931-32 with rock costing an average of £25s.10d. per ton, c.i.f., and sulphur averaging £7 10s. per ton,landedin store, Melbourne, and withbags at an average price of9s. per dozen, the list price of 22per cent. superphosphate (20.5 per cent. water soluble) is £415s. per ton for terms, and £4 10s. per ton for cash. The price of £4 10s. for 20.5 per cent. water soluble is equivalent to £3 14s.8d. per ton of 17 per cent. water soluble. In 1913-1914 there was no difference between terms and cash prices.

The figures indicate that although there has been an increase in the cost of raw materials (excepting phosphate rock) since 1913-14, the price of superphosphate to the farmer has decreased by 14.70 per cent.

I emphasize that the resolution of the Legislative Assembly of Western Australia for the appointment of a select committee to inquire into this industry was adopted with full knowledge on the part of that chamber of the representations made by the State Government, and the resolution of protest adopted by the Australian Agricultural Council as well as the representations madeby the Premier of Western Australia and the investigations already made by the Commonwealth Government into the industry. All of those phases of the matter were carefully examined. There can be no doubt that the growers are not satisfied with the present position. They demand a Commonwealth inquiry. Should such an investigation prove the Prices Commissioner tobe in the right, no harm willbe done.

Senator McLeay - In order to justify the appointment of a select committee, the honorable senator should prove that the Prices Commissioner has acted wrongly.

SenatorFRASER. - As I have already stated, the Minister for Lands in Western Australia pointed out that the Prices Commissioner is not empowered to inquire into conditions existing prior to the 3lst August, 1939, in order to ascertain the profits then made. The present dissatisfaction of the farmers is aggravated by the fact that a further increase of price is contemplated.- Tn these circumstances it is desirable that the fullest possible information should be furnished regarding existing stocks of phosphate rock in this country. The farmers are entitled to be assured that unfair profits are not being made. They cannot shoulder a further increase of price. To-day many farmers not only in Western Australia but also in other States, are in serious financial difficulty. Many of them are on the verge of bankruptcy; they are simply holders of properties for the banks. An inquiry by a select committee of this Parliament would also disclose whether or not the present scale of shipping freights is fair.

Senator McLeay - Has not the honorable senator heard about mines and German raiders?

Senator FRASER - Yes; but I have also heard that, despite such risks, to shipping, big profits are still being made by the shipping companies.

Senator Herbert Hays - The companies handling superphosphate are cooperative concerns.

Senator FRASER - I can best answer that interjection by the following quotation from a speech made by Mr. Boyle, a member of tlie Country party, in the Legislative Assembly of Western Australia on the 23rd October, 1940-

Perhaps the members of the select committee could find out. through a railway department witness, whether the increase of 10 per cent, from port to the super works a few miles away has represented a. profit. The Cresc o works Iia ve to pay 4s. fid. per ton to land supplies at Bayswater from Fremantle. I suggest that a trainload of superphosphate from Fremantle to Bayswater at 4s. Od. per ton would certainly be payable.

The MINISTER roil WORKS - Who holds the shares in Cresco?

Mr. BOYLE.; Cresco is a farmers' company, and therefore it is socked for 4s. (id. per ton.

Mr. Cross.; The select committee can investigate that point too.

Mr. BOYLE; A good case can he made out for an inquiry regarding the whole of the superphosphate business in this State. I was in touch with Mr. Holyoake - T think that is his name - who is the son of the founder of the Pivot Company in Victoria, The concern was established in 1927 as a farmers' company and worked on the basis that anything over cost, was rebated to the shareholders. A farmer there is entitled to a ton of super phosphate for every share he holds. Evidently they have gone into the matter very closely because I notice that when our superphospte - it had a 23 per cent, content - cost us ?3 12s. (id. per ton, the Victorian farmers were paying ?2 17s. per ton net. That represents a difference of Jos. Gd. per ton, or nearly 30 per cent. For the five years from 1934 to 1939 the company sold superphosphate at under ?3 per ton to its shareholder -farmers in Victoria. To-day the Commonwealth Price Fixing Commissioner has forced the company to increase its price to ?4 IBs. per ton, less 5s. per ton for cash, which is the same as the rate charged in Western Australia.

Senator Leckie - Forced ?

Senator FRASER - Yes, forced. That is the sort of thing which should be investigated; no one can charge less than the price fixed by the Prices Commissioner.

Senator Dein - Does that apply only in respect of superphosphate?

Senator FRASER - I am quoting a statement made by a responsible member of the Country party in Western Australia, who understands this matter thoroughly. In any case that statement has hot yet been denied. However, such thoughts are running through the minds of farmers to-day. They want reassured that the basis upon which the Prices Commissioner fixed the price of superphosphates is fair and just.

Senator Herbert Hays - Does the honorable senator say that the Pivot Company was forced by the Prices Commissioner to charge the price fixed by him?

Senator FRASER - I am reiterating a statement, made by Mr. Boyle in the Western Australian Parliament, when he moved for the appointment of a select committee to inquire into all matters relative to the manufacture and sale of superphosphate in that State. That statement has not been contradicted. The price of superphosphates was increased, first, by 10s. a ton and later by 20s. a ton. Apparently the Prices Commissioner was not sure of the basis on which he awarded the latter increase, because shortly after it was announced he reduced the price by 4s. per ton. Thus, the price of superphosphate has increased by 26s. a ton over the pre-war price. I again warn the Government that many primary producers in Western Australia will be driven off the land if the price be further increased. Whether the representations

I have placed before the Senate be proved to be right or wrong, the appointment of a select committee to investigate this matter will be justified' if thereby the primary producers of Australia as a whole can. be assured that the present price is fair.

Debate (on motion by Senator McLeay) adjourned.

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