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Wednesday, 16 September 1942


Senator AYLETT (Tasmania) . - After listening to several speeches on rationing and inflation, I propose to deal with something more concrete. To start where Senator Foll concluded a few moments ago,. I contend that man-power is one of the problems confronting Australia. Not only is the Captain's Flat mine, in. which the honorable senator has told us he is personally interested, short of man-power, but every line of industry is affected, and every body is calling for extra man-power. I wish to deal first of all with the way in which the shortage of man-power is affecting the rural production of Australia generally, and is likely to affect the rural outlook throughout the Commonwealth more and more seriously as time goes on. The majority of farms throughout Australia are being seriously affected by many causes, one of which is the shortage of man-power mentioned by Senator Foll, another is the shortage of fertilizers, which neither this nor any other Government has the power to rectify, and a third is the shortage of materials such as wire, wire netting, galvanized iron, timber, machinery and facilities for machinery repairs. The absence of facilities to keep a farm in operation tends to depreciate the value of its productive capacity. In spite of all that, and in spite of the crisis with which we are faced, in order to save the nation from a shortage of food supplies we have had to follow the policy supported by the Opposition when in power, by a system of fixing prices, controlling production,' and getting away from the old orthodox system of supply and demand. In starting to control prices and production, the Labour party is not bringing something new into operation.


Senator Spicer - Does the honorable senator believe in the law of supply an I demand ?


Senator AYLETT - Definitely not. As I said. Labour to-day is in that regard carrying out the policy that was supported by its predecessors, and that has proved most successful in the greatest crisis with which Australia has been confronted. In spite of this, properties throughout Australia are still deteriorating, and, no matter what government was in power to-day, it could not rectify the position, for the reasons I have previously stated. Seeing that we have to control production and .prices to ensure the supplies that the country needs, it is evident that we have adopted a policy that is here to stay if this country is to progress. This war is teaching us something at least, and that is that the old orthodox system of supply and demand is of no use at a time of national crisis. 'Going back a little further, I can point to two instances where the orthodox system was ineffective at a. time of financial crisis. Let me go back to 192:9, and study the position at that time and several years later. We were then working under the system of supply and demand and we were flooded with low prices. Low prices for farm products result in farmers losing tha: capital, buildings and fences are not maintained, and soil fertility is lost; the farm decreases in value, and farmers and the nation's capital is destroyed. The destruction of capital, when it ha." reached a certain point, means social revolution. Countries without capital invariably become totalitarian, because that is the only way they can keep going. J.n 1929 we were on the very verge of entering into a state of totalitarianism. The only thing that helped us out was the possibility of war. We had low prices, and many farmers from one end of Australia to the other were ruined. Some walked off their farms because of low prices, their farms went to ruin, and the country's capital was being destroyed.


Senator Gibson - What about the workers ?


Senator AYLETT - Is there any greater worker than the farmer? I am surprised that the honorable senator who is himself a farmer draws a distinction between farmers and workers. Does he not profess to be a worker as well? As I have said, low prices brought about the ruin of thousands of farmers, and then as the war clouds rolled up, pros-, perity started to return, workers went back into production, and once more capital went into circulation. With an increased amount of capital in circulation, more people were able to buy the goods that were produced, and once again prices rose because of the restricted production brought about by the depression. Then, as soon as prices increased, there was a glut of production. To illustrate my argument, I point out that were it not for the control of prices to-day the price of certain farm products would be absolutely beyond the reach of working-class people. Immediately the price of commodities gets beyond the purchasing capacity of the people, there is a decreased demand, with a consequent drop in prices. 'So, we have the spectacle of prices rising and falling in cycles. On the one hand the farmers are driven from their farms, and on the other, consumers are short of essential foodstuffs because of the lack of balance in supply and demand. That balance can be brought about only by controlling the price, production and distribution of all farm products. As an illustration of how such control can benefit an industry, I draw the attention of honorable senators to conditions in the sugar industry in Queensland. That industry is controlled both as regards production and price. Every grower knows how much sugar he is permitted to produce, and what remuneration he will receive for his product when it is put on the market. The Queensland sugargrowers would not countenance a return of the old system on any account. When the war started the Commonwealth Government found it necessary to apply price control to many other primary products including wheat, barley, wool, butter, cheese, meats, potatoes and other vegetables. Only a few primary products are not now subject to price control. Had control of farm products not been exercised we would be short of some lines to-day whilst there would be an over-abundance of other foodstuffs which would be of no use to us. If such control can operate successfully during the greatest crisis in our history, surely it can operate with equal or more success in time of peace and so provide some measure of stabilization for rural industries throughout the Commonwealth. I agree that prices must be stabilized at a figure that will give to the farmers an adequate remuneration for their labour, and enable them to pay at least the basic wage to their employees, with margins for skill where necessary. Our secondary industries provide a striking example of how industrial development can be bolstered up against the law of supply and demand. If it were not for excise duties, customs duties, and protective tariff.* generally, how many secondary industries would we have in Australia to-day? These secondary industries are one of the greatest blessings ever conferred upon this country. Without them we would hr> in a serious position, and the organization of our war production would have taken much longer than it has. In addition, our expanding secondary industries have been a valuable source of employment. To-day almost every industry in this country has been stabilized with th, exception of rural industries.


Senator Spicer - But the honorable senator wishes to socialize them does he not?


Senator AYLETT - There is no need to socialize them immediately in order to put them on a stabilized basis. I point out, however, that had there been some restriction of monopolies in past, years it would not have be-m possible for two or three huge concerns to obtain control of almost all our secondary industries as they have done, and we would be in a much sounder position industrially than we arc to-day. Our rural industries can be stabilized by controlling production and prices so that the farmer, his wife and family, and his employees, will be on an equal footing so far as wages are concerned, with the factory manager and industrial workers. I see no reason why a factory manager should be in a better position so far as income, privileges, and social standards are concerned, than the manager of a station, or the farmer who manages his own property and produces food for the nation. After all, without the rural industries, no other industry could exist in this country. The rural industries could exist without the secondary industries and without the towns and cities if need be, but the secondary industries could not continue without rural production. Nobody can deny that the primary producer is at the back of every industry in this country. "When this war has been brought to a successful conclusion - I do not say " if ", because I am confident of the outcome - our farms will be by no means in the same condition as they were when the war started. Their productive capacity will have deteriorated considerably, because of the lack of fertilizer and such capital assets as fences, buildings, &c., will be in a state of disrepair. Therefore, when the war is over, whatever government is in power will be faced with the difficult problem of restoring farm properties to their pre-war standard of production and efficiency. That will be one avenue of employment for the surplus labour which will be offering. However, the restoration of the farms must not be accomplished under a loan system, which would place a heavy burden of interest upon the farmers. A plan must be devised whereby any primary producer whose farm has deteriorated due to war conditions will be able to place his case before a special committee or board which will assess the deterioration. In some cases, where farmers have been hard hit, it may be necessary to make straightout grants to have the reconstruction work done under supervision. Farms which are in production to-day are playing a most vital part in our war economy, and it is not the fault of the farmers that plant is deteriorating. I have no doubt that in the case of the secondary industries plant will be restored to its pre-war efficiency without delay, and every effort must be made to see that the same treatment is applied to the farms, whether it be done by means of special grants, interest-free loans, or straight-out gifts.


Senator Spicer - What about post-war credits? They would make provision for reconstruction.


Senator AYLETT - Honorable senators opposite are raising a hue and cry about the danger of inflation through too much credit, but now they seem to favour issuing more credits for the reconstruction of farm properties. Would that also not lead to inflation? In my opinion, inflation is impossible so long as production, profits and prices are controlled.


Senator Spicer - That cannot be done if inflation occurs.


Senator AYLETT - 'Our aim is to prevent inflation by adopting the system which I have just outlined to the Senate. One does not have to consult a medical adviser to know that prevention is better than cure. Therefore, to honorable senators opposite who ask how the Government intends to bridge the gap in our war finance, I say that that problem does not trouble us because so long as we can control prices we have no fear of inflation. The Opposition's proposal for bridging the gap is the taxing of lower incomes and the introduction of a system of compulsory loans. The more loans we raise during this war the greater will be the financial difficulties not only during the progress of the war but also after it. Those who are now fighting for us, and those engaged in the production of food and munitions, will be called upon to pay interest on the money to be borrowed. Such a. policy would spell ruin to Australia for centuries. If the Government adopts a borrowing policy, whether it raises compulsory loans with interest or voluntary loans-


Senator Spicer - That is the policy of the present Government..


Senator AYLETT - I cannot help it if my views are in conflict with those of the Government, but I point out that this Ministry will not borrow so extensively as the Opposition would like it to do. Members of the Opposition claim that the Government should collect increased income tax from persons in the lowerincome groups and that the balance should be raised by loans, even if compulsion be necessary. There is only one way in which to bridge the gap when taxation and loans fail, unless we are to tie a stone around the necks of future generations, and that is by the issue of bank credit, but it must be properly controlled. How much of the £300,000,000 required could be obtained by taxing more heavily people on the lower-income groups? It would be only a drop in the ocean. During the depression, persons on the lower incomes had little or nothing. Now they are receiving a little by way of reward for their labour, but the Opposition wishes to screw them down again and make them pay for the war effort. I ask honorable senators opposite whether the " underdog " is ever to receive fair treatment. They cannot get a " go " when wages are at a reasonable level, and they cannot do any good for themselves when wages are low. Are they to be crushed all the time? I do not favour taxing more heavily than at present the people on the lower incomes even by means of indirect taxation, because I think that we have already gone to the limit, if not a little too far. There are otherways in which we can save the nation from some of the financial burdens with which it is confronted.

We have established new industries in Australia that are essential to the war effort, and one of them is the flax industry. I have dealt with this subject previously, but I now propose to furnish information to the Senate which will open the eyes of members of the Opposition who were in power when I took up the matter of the racket in this industry. For the first season the industry showed a loss of £146,761, with the price of topline fibre at £220 or £240 a ton. In order to balance the ledger it would have been necessary for the Commonwealth Government to have obtained in the vicinity of over £400 a ton for its line fibre. That is a matter that the present Government will have to rectify. The figures that I have given do not take into account the capital outlay and the cost of plant, but only the costs paid out for raw material and wages, plus interest on capital. The Flax Production Committee submitted the following items for the 1940-41 season: Line fibre, £118,630; tow, £41,180; seed, chaff and miscellaneous items, £107,499; and straw on hand, partly processed, £7,412.


Senator J B Hayes - - When did the season end?


Senator AYLETT - On the 30th November, 1941. Will the Minister representing the Minister for Supply and Development obtain for me more details as to the miscellaneous item totalling £107,499 ? I asked a question previously regarding flax tow or partly processed straw, which was stacked throughout Victoria and Tasmania. There were thousands ofbales in paddocks and sheds. According to evidence given before the Joint Committee on Rural Industries by the chairman of the Flax Production Committee, by putting that straw through a rolling plant or decorticating machine, a tow could be produced which would sell at from £40 to £60 a ton; but he sold that tow at 50s. a ton, which, he said, when previously giving evidence before the joint committee, was all that it was worth. I should also like to know what the amount of £7,412 actually represents.

According to an answer I received to a question, straw under 21 inches in length was to be put through a threshing machine and afterwards put out to ret, for the purpose of producing tow, but that is all "hooey". At Strathkellar, 180 tons of straw was taken from a threshing machine; but afterwards the Flax Production Committee could not ret it or get tow out of it, and consequently it was burnt. When flax below 21 inches in length is put through a threshing machine, I want to know what is to be done with it. If it is put out to ret it willin patches rot to pieces. In view of the evidence given before the joint committee by the chairman of the Flax Production Committee and his mill managers, I wish to know whether we want the flax industry to succeed or whether any efforts are being made to cause it to fail. I wish to know why the decorticating plant is not being used, and why such a plant was not sent to Tasmania and some parts of Victoria in order to treat straw, of which there are thousands of bales, if a commodity worth ?60 a ton could be produced from it, as the joint committee was assured by the Flax Production Committee. It has been proved that there are machines that can treat straw below 22 inches in length and produce a commodity worth up to ?100 a ton. I shall have more to say on the subject of flax later if I do not hear a ministerial explanation that will throw more light on this matter.

Referring to the supply of carrots to the Department of Supply and Development, Melbourne, at ?12 10s. a ton f.o.b. Tasmania, I desire to know whether the department requires carrots for processing purposes. Shipping space is scarce and valuable, yet a factory in Hobart that is not fully supplied with carrots for processing purposes is doing its best to get them, but the department will offer only ?9 a ton for them. In the question that I submitted to the Government on this matter I did not ask anything about the guaranteed prices for next year. I merely asked why the department, which .was purchasing carrots to be processed by Henry Jones and Company Proprietary Limited for the department, was not prepared to pay ?12 10s. a ton, the price it was paying for a similar article in Melbourne. It is not correct to say that the factory in Hobart is working on carrots that have been frozen in order to keep it in operation. That factory is idle for the want of carrots, which are being sent to Melbourne. Processed carrots would not occupy the shipping space that would be required in conveying carrots from Tasmania to Melbourne in the raw state. Moreover, 40 tons of carrots to the acre were left to rot in the ground, notwithstanding that there was a shortage.

The man-power of Australia has to be organized with a view to supplying all phases of industry. That, means that, in addition to maintaining the fighting strength of our forces, wc must have mcn to manufacture munitions, and provide food. Australia's total population is fewer than 8,000,000 people, and one of the nations we are fighting has a population of over 90,000,000 people.

Senator Follsaid that the manpower authorities had fallen down on their job because mcn could not be obtained for such an essential industry as the mine at Captain's Flat. That, however, is the position throughout Australia. The difficulty is to maintain an even balance. Every man in Australia should serve where he can be of most use, but I would not leave the decision to an old, worn-out general who is in his second childhood and cannot make a speech in this chamber, but has to have it written out for him. lie does not know where men can render the best service. I admit that the honorable senator was a great general in his day, but he seems to have overlooked the fact that he i* getting old. He has cast a slur on honorable senators on this side of the chamber, some of whom are working up to twelve hours a day or more in the interests of the nation. The honorable senator, who is not in u position to judge of the value of their services, said that there were at least half a dozen men on the Government side of the chamber who could serve their country better in uniform in some phase of war work than in Parliament. I am the second youngest man in this chamber, but perhaps the honorable senator does not know that I offered my services to the Army authorities for the defence of Australia and they were refused. My only child is a pilot officer in the Royal Australian Air Force, and is prepared to go anywhere in the world in the service of his country.. When Parliament is not sitting, I am working up to twelve hours a day. The old gentleman who ha3 cast this slur on other honorable senators could not follow me for one week in what I am doing, and therefore it ill becomes him to criticize others just 'because they are not in uniform. I could be in uniform, drawing military pay, in addition to my parliamentary allowance, and no doubt I, like some other members of this Parliament, could obtain leave to attend Parliament without causing much inconvenience. Although I am not in uniform, I consider that I am rendering greater service to my country than if I were in uniform and could walk out of my military job whenever I desired in order to attend Parliament because of the unimportant nature of my so-called military duties. No man who is doing his job properly as a representative of the electors in this Parliament can also serve in the Army and do that job properly. That is my reply to the remarks of an honorable senator who has forgotten that age is creeping on him.

Debate (on motion by Senator James McLachlan) adjourned.







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