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Thursday, 19 December 1912

Senator MILLEN (New South Wales) . - This is the clause under which we are asked to provide money for bounties under this Bill. It therefore affords an opportunity of dealing with some of the statements made by the Minister in charge. I wish to point out to him in the first place that my original request was for information which would enable us to determine, as business men, whether or not the payment of this bounty was necessary to keep the industry going. The Minister said that he had information, and would give it to us. I venture to saythat no information has been given which indicates whether the financial position of this industry is such as to require further assistance. The Minister stated that he had the assurance of two names, which he gave to the Senate. The first was that of Mr. Gee, who is a member of the alleged Meat Ring, and an opponent of Mr. Hughes' company. His statement is that if the bounty is withdrawn the business will cease. Surely it is an unusual thing for a Minister to take a statement from one whom he himself declares to be an opponent as authoritative in such a matter. The second authority quoted was Mr. Hughes himself, the gentleman who comesalong and asks this Parliament for assistance, though he furnishes noproof as to whether the industry needs this £10,000 a year or not. Does Senator Findley think that any one in Mr. Hughes' position would not say the samething ?

Senator Findley - When a man saysthat an industry could not be carried on but for the bounty, that is enough.

Senator MILLEN - Apparently then all that I have to do to get money out of this Government is to start a business, and' then get some one else to tell the Government that my industry will fail without a bounty. I shall then get what I want. There has been no examination of the books of the company to show whether the- bounty is necessary or not; but merely because some interested people approach the Minister, and are enabled to tell him their confidences, thousands of pounds are to be taken out of the pockets of the people and put into the pockets of these persons. I see no reason why the money of the taxpayers should be disposed of in this manner.

Senator Needham - Is the honorable senator an authority on this question?

Senator MILLEN -I am merely asking for information. Is Senator Needham prepared to put £10,000 into the pockets of a firm without knowing whether the claim that it makes is justified or not ? Of course, the company wants this money. Whether they need it is another question, but they certainly want it. Hughes Brothers are smart business people.

Senator St Ledger - What is the name of the company?

Senator MILLEN - It is Hughes Limited. I supported the original proposal for a bounty, and, therefore, showed my bona fides in assisting a promising industry. But we voted the bounty on the assurance that if the persons interested were given help for five years to enable them to get over their initial difficulties they would be able, to use a familiar expression, to " paddle their own canoe." But they now come along and say that they want assistance for a further period. Surely we are entitled to ask for proof, which can only be obtained from the books of the company which is asking for the subsidy. The Minister made some extraordinary statements in the course of his last speech. He dealt with thecapital invested in the concern, as though that were evidence as to why the bounty should be paid.

Senator Stewart - What is the capital ?

Senator MILLEN - The company was attempted to be floated for £250,000; and it is a curious thing that immediately the company got this concession in the shape of a Bounties Bill, a prospectus was issued. By the way, the Hughes Brothers took a mighty big parcel of shares out of it for themselves. Of course, they were perfectly justified in that. But we have no right to allow a bounty to be used to enable persons to float companies for their own advantage.

Senator Lynch - Why did not the honorable senator vote against this Bill on the second reading?

Senator MILLEN -As a matter of fact, I was called out of the chamber for a few minutes, and the Bill was read a second time in my absence. Otherwise, I should have called for a division. There is another justification for those who abstained from calling for a division on the second reading, and that is this : I am standing here, not as an opponent of any bounty proposed under this Bill, but to demand inquiry into the circumstances of the industries for which subsidies are asked. I cannot understand the position taken up by some honorable senators, who seem to think that, merely because an industry demands a bounty, we have to pay it.

Senator Stewart - Have you any information as to the capital of the company?

Senator MILLEN - The information which I have was put forward in a prospectus issued by Hughes Limited.

Senator Stewart - £150,000, of which £100,000 was reserved.

Senator MILLEN -Of the £150,000 worth of shares offered to the public, £91,000 worth were taken up by the Hughes Brothers.

Senator Stewart - You want to know how much water there is in the company.

Senator MILLEN -I do. When the concerns of the Gas Company in Sydney were under discussion, all this information was demanded. An inquiry was held, and matters were probed to the bottom, in order that Parliament might be fully possessed of information which would enable it to act. But here we do not know whether the company is putting the whole of the bounty into its pocket or whether the bounty is necessary to continue the industry. I am surprised that any honorable senator should resent the attitude which I am taking up. I ask now, can this company carry on the industry without public aid? If it can, there is no reason why public aid should be extended to it. What does the Minister say in reply to that ? He did not bring forward any figures, or go to the trouble of turning up the public records, to find what dividends this company has been paying. The reason why the Minister did not bring forward a statement showing the dividends the company was paying was that the statement would show that this is a very wealthy company. As far as wool tops are concerned, the Minister could obtain the information in the way I indicated during the second-reading debate - that is, by calling upon the recognised accountant of the company to furnish replies to two or three questions. The first question is, " What is the amount of capital employed in this wooltop making branch of your business. ?" And then other figures should be required to be supplied to enable us to determine what profit is being made on that branch of the business. If the profit is . shown to be sufficient to enable the company to carry on the business, there is no reason why we should tax the people in order to subsidize this company.

Senator Lynch - Can you throw any tight on the subject ?

Senator MILLEN - I am pleading for light.

Senator Lynch - In addition to that, you are throwing some suspicion on it.

Senator MILLEN - I venture to say that if I went to Senator Lynch and said to him, " I want you to give me £1,"Senator Lynch would ask, " What for ? " I would say, " I want to do so-and-so," and he would thereupon want to know everything about it. I am asking him, when he comes here as a custodian of the public money, to be just as careful and cautious regarding it as he would be regarding his own money. The simple question which ought to be the test is this : Is it necessary in order to secure a continuance of this business that we should appropriate this amount of public money for the company ? What is the answer of Senator Findley? He brought forward no facts or figures to show the position of the company, but he raised the cry that the company was in opposition to the Meat Ring. The statement is made that this industry cannot continue any longer unless we continue the bounty. The industry has been going for three and a half years, but we are in possession of no information which will enable us to determine whether it can continue without further spoon-feeding from the Government. It is time we recognised the position, and made up our minds whether we are going to continually bolster up this business, or whether we will let the thing drop at once. I ask Senator Lynch is he prepared for all time to subsidize industries which cannot stand on their own legs?

Senator Lynch - No, it would not be worth while.

Senator MILLEN - That is what I am saying. I want to know what are the prospects of this business getting on its own legs. If the prospects are good, I shall vote as heartily for this proposal as I voted for the original Bill, but I want some proof that what we are doing now is not to be repeated every few years. The Minister, instead of bringing forward information which would show whether this business was a profitable one or not, and whether or not it was dependent on this bounty, immediately appeals to the prejudices of some honorable' senators by referring to the Meat Ring. But that does not affect the simple question, Is this business capable of being conducted as a selfsustained, profitable business? The Minister gave no information on that point. If he has any information, I am entitled to assume that he is purposely suppressing it. If it would have helped his case, he would have undoubtedly given it to this House.

Senator Lynch - Rather strong.

Senator MILLEN - It would be strong to picture the Minister in the possession of information which he withheld from this Chamber. If he has that information it is his duty to give it to us, and I assume he has not given it to us because he has not got it. The Minister appeared to dispute my statement as to the wages paid in this industry. If the honorable senator will refer to Hansard he will find first of all two statements. One is that the total amount of wages paid by Hughes Limited last year was £31,596, and by the other firm ,£3,653, which is approximate to the £35,000 which he said was paid in wages. When " he was trying to show that I was wrong, he coupled in one item those items which I gave separately. The Minister of Trade and Customs made the statement that Hughes Limited were paying in wages in the whole of their businesses ,£3 1,596, and that is borne out by the fact that in the official report to which I have referred the weekly wages paid by Hughes Limited are stated as: - 127 washers, £306; j/27 machine hands, £254; 52 female machine hands, £46. The two last lots only are connected with the wool top industry. If the Minister takes that amount and multiplies it by fifty-two he will find that the total amount paid yearly in wages by Hughes Limited in connexion with the whole of their businesses is ,£31,000. That averages .£104 for each of the employes engaged in these businesses, and against that we are paying a bounty of £50 each to those employes. We have no right, however, .to take into consideration the whole of the employes of this company. We have only a right to consider the bounty in relation to those employed in the industry in respect of which the bounty is paid. If we do that, it means that there are only 200 hands employed at the outside in respect of whom we paid .£15,000 in one year, or £76 per head.

Senator St Ledger - That is to say, we are paying half of' the wages paid in the whole of the businesses carried on by that company.

Senator MILLEN - Yes. But if we take only the hands employed in the wooltop industry, it will be found that we are paying 30s. a week to every employ^ engaged in that industry. It is quite evident that Hughes Limited would not carry on that business if they were dependent on the bounty for 75 per cent, of the wages paid, and it is quite evident also that some considerable portion of the bounty is represented in the dividends paid to the shareholders of the company. The Minister has made the extraordinary statement that the dividends are beside the question, but they seem to me to be the whole question.

Senator Findley - It has nothing to do with the wool-top business, because we know that the company is not paying dividends on the wool-too business.

Senator MILLEN - Has the Minister got any evidence that it is not?

Senator Findley - You have no information to disprove the statement that the company is not doing so.

Senator MILLEN - Of course I have not, but the Minister should give us proof of the affirmation which he makes.

Senator Findley - You stated that it was a dividend-paying concern.

Senator MILLEN - So it is. That is shown by the particulars published with regard to companies.

Senator Vardon - This new prospectus promises high dividends.

Senator MILLEN - I find, on turning to the prospectus, that they estimate a profit of ,£50,000 on a called-up capital of £150,000. The Minister says that it is of no concern to us what dividends the company pays. But when a company is carrying on a profitable business and paying big dividends, we have no justification for paying any bounty to it out of the public Treasury.

Senator Gardiner - Is there any justification for paying a bounty to a company that is not carrying on a successful business?

Senator MILLEN - May I assume that Senator Gardiner is in agreement with me that if this company is paying decent wages and high dividends, there is no need for us to subsidize it?

Senator Gardiner - I am not seized of all the conditions. I know that the company pays exceptionally good wages, and deserves encouragement.

Senator MILLEN - Does Senator Gardiner say that if this company is paying exceptionally good dividends, it deserves encouragement in the way of a bounty? I know that the honorable senator's heart is in my argument. He has no more heart in the proposal to swell the dividends of big companies than I have.

Senator Gardiner - It is paying exceptionally good wages, and that carries my vote. I am battling for the workers all the time.

Senator MILLEN - Senator Gardiner may seek to lull his political conscience into a period of temporary rest by an observation of that kind ; but it has to be remembered that the company is paying wages under an award fixed by a Wages Board, and if, in addition to paying good wages, it is able to pay very handsome dividends

Senator Stewart - Do you know what the dividends are?

Senator MILLEN - I cannot say what the last dividend was, but the company never paid less than 6 per cent, before the bounty was paid to it.

Senator Stewart - That is not much.

Senator MILLEN - That was before they received the back instalments - when they were getting to work - and, further than that, a great many shares in the company are held by the Hughes family, whose members are all engaged in the business, and whose wages, I venture to say, are much above the market rate for their services. When a company is being run by a family, they can smother and hide their dividends by paying, for instance, a manager £2,500 a year, who is entitled to £1,000' only. It makes no difference to them, as shareholders, but it does disguise the amount they earn. I am in the unfortunate position that I can only bring forward these matters as reason for doubt and inquiry. The Government should present us with a business-like statement, showing whether the amount disbursed by the company is reasonable, or is so high as to represent a payment from the Treasury that is little short of a public crime. i take strong exception to the remark of the Minister that the opposition to this wool-top business is due to a grudge against Messrs. Hughes Limited. Certainly, he qualified that statement by saying he did not mean to apply it to honorable senators. Personally, I do not know anything about the members of the Hughes family, nor do I know, except in the most casual way, any one connected with the wool-scouring or associated industries. Apart from this, I would like to know how grudges could influence honorable senators, and how they could affect the responsibility of the Government to lay before us a business statement. No one is more anxious than T am to encourage legitimate industry ; but I want to see the public money spent in a manner calculated to bring about the best results. In view of the attitude assumed by honorable senators opposite towards other large public companies, one is rather curious to know why this company has been marked out for special favour.

Senator de Largie - It is the industry, and not the company.

Senator MILLEN - What is the industry? Can the honorable senator say whether or not this company could carry on without the bounty?

Senator de Largie - Apparently, they could not.

Senator MILLEN - What is the reason for the honorable senator's statement?

Senator de Largie - They made no headway until they received the assistance of the bounty.

Senator MILLEN - But they told us that they wanted the bounty for only five years. Now they say that, unless further assistance is granted, the industry must go down. When the proposed further period is at an end, are we to expect that they will ask for a further extension? We are entitled to be informed whether or not the industry has made such progress that it will shortly be able to stand by itself?

Senator Long - Is it a fact that, in 1 9 10, the profits amounted to only 3 J per cent, on the capital?

Senator MILLEN - My information is that the company have not paid less than 6 per cent., and that that low rate was paid before they received the benefit of the bounty and expanded their business. However, our concern is not so much with what the company have done as with what they are doing to-day ; and it appears that, while handsome dividends are being paid by the parent company, they have engaged to guarantee 10 per cent, dividends for a subsidiary company.

Senator Findley - They are making that profit out of another branch of the industry.

Senator MILLEN - We have a practical admission from the Minister that the company are paying handsome dividends, and we are, in effect, being asked to pay bounties for the purpose of swelling the dividends of this already well-to-do company.

Senator McGregor - The bounty will enable the company to pay higher prices for sheep, and this will benefit the sheepowners.

Senator MILLEN - All the sheep purchased by the subsidiary company are exported, and it is most interesting to have the admission of the Vice-President of the Executive Council that the bounty is being paid to encourage the exportation of sheep, while, on the other hand, we know that strong demands have been made on the State Government in New South Wales to stop the exportation of sheep in order to bring down the price of meat. It would appear that the protests that have been made by the Labour party against the operations of the Meat Ring in keeping up the price of meat have been misdirected. There is no need for a Meat Ring to keep up prices whilst the Federal Government are encouraging the exportation of meat, and thereby bringing about high prices.

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