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Thursday, 29 May 1930

The PRESIDENT - I regret that I had temporarily lost the connexion of the honorable senator's remarks.

Senator Sir HAL COLEBATCH - -In yesterday's issue of the Sydney Morning Herald there appeared this paragraph from Melbourne -

Trade union officials to-day forecasted that an attempt will be made to have the bounty of 3d. a lb. on butter payable by local consumers under the Paterson plan abolished. This would result in a considerable saving to householders us butter is one of the chief portions of the food supply.

I should say that the additional amount paid for butter by the Australian consumer under the Paterson scheme is more than 3d', per lb. Then we have a similar position in respect of the increased bounty on galvanized iron that the Senate passed towards the close of last session. The effect of that bounty was to give to the manufacturers of galvanized iron a subsidy equal to £4 10s. per man per week for every man employed in the industry. We are now receiving complaints about the quality of that product. According to newspaper reports, two tanks erected about two years ago are now riddled with rust. Another settler says that black wire on his property, which was bought in 1886, was still giving good service, while another brand would not give eight years service. He contended that there was something wrong with the wire that was being sold to-day and that it was the manufacturers' duty to tell the settlers what it was. Another settler claimed that blacksmith's iron became pitted with rust very quickly. Another said that wire that he had recently purchased would not stand the strain put on wire of the same brand that he had used previously. Then we received an intimation that the importers of galvanized iron had increased the price to the local consumer by 30s. a ton in order to compensate them for the difference in exchange between London and Australia. That shows what a tremendous bounty is now being given to the Australian manufacturers of galvanized iron. It is something over 6 per cent, on exchange alone. It must be remembered, when considering this bill, that sugar, butter, and galvanized iron are all necessaries, and people cannot do without them. The local consumers are being penalized to enable our surplus products to be exported at a loss; but I suggest to the growers of grapes and the makers of wine that wine is not so necessary to the Australian people as are sugar, butter and galvanized iron, and it is doubtful whether the people will buy wine in the event of the price being increased. In the wine-drinking countries on the Continent, where wine does make a substantial contribution to the public revenue, one can enter a restaurant and obtain a bottle of good wine for two or three lire or francs, as the case may be; but if one goes into any ordinary popular restaurant in Melbourne or Sydney and asks for a small bottle of Australian claret, one has to pay from 2s. to 2s. 6d. for it. It is even more expensive than an imported Scotch whisky and soda. Does the winemaker think that he will develop a taste for Australian wines among the people by carrying out a policy of that kind? It has always been admitted that the home market is the best market of all. Had this bill been introduced to discourage wine drinking, had members of the extreme temperance party had a hand in the framing of it, I would say they had done their work well, because this bill will have no other effect than to discourage the consumption of wine by the Australian people. But I believe that we can develop in this country a taste for good wine, which, to a large extent, would ultimately take the place of imported spirit, of which so much is consumed at the present time. I ask honorable senators supporting the Government, in considering this bill from the point of view of its probable effect on unemployment, to think for a moment how the wage fund of Australia will be affected by selling our foodstuffs abroad at less than it costs us to produce them. Let us assume that some one has a wage fund of 20s. with which to give employment for a single day. If the labour engaged for that day for the 20s. produces 22s. worth of value it means that the employer would have on the following day 22s. in his wage fund, representing a daily increase of 10 per cent. If in the course of time that daily increase continues, more and more men can be brought into the industry and its prosperity will gradually expand. Now let us assume, still starting off with the 20s. as the wage fund for a single day, that there is produced by the labour employed only 20s. worth of value. In that case the employer is not in a position to employ more labour on the next day. He must employ exactly the same amount of labour as on the previous day and his industry does not expand. The slightest calamity may bring it to an end at any time. What happens if the labour employed by the wage fund of 20s. a day produces only 18s. worth of value? The next day the employer has only 18s. in his wage fund. He has lost 10 per cent., anc! if he goes on losing 10 per cent, each clay it is not very long before his wage fund has gone. The biggest factor in our unemployed difficulty in Australia to-day is that there are too many people engaged in industry the result of whose work has been to diminish the wage fund. It is a state of affairs which honorable senators can see should not be allowed to continue.

Clause 14 of the bill, relating to industrial conditions, is, to my mind, contrary to the Constitution. I do not care if similar provision is to be found in other bounty measures: The fact of the matter is that it is an attempt by the Commonwealth to invade the rights of the States to determine industrial conditions within the States. The point was decided by the High Court in Barger's case. In an Excise Act the Commonwealth had attempted to impose industrial conditions. The High Court held that the Commonwealth had no power over industrial matters except the power given under paragraph xxxv. of section 51 of the Commonwealth Constitution, and that the excise power did not authorize it to take to itself industrial power belonging to the States. What have we in this bill but an attempt to do the same thing under the bounty power? Clause 14 empowers the Minister to " make application to the Chief Judge or a Judge of the Commonwealth Court of Conciliation and Arbitration or to any Commonwealth authority established for the purpose of determining wages and conditions of employment, for a declaration as to what wages and conditions of employment are fair and reasonable for labour employed " in the wine industry. What can the Commonwealth Conciliation and Arbitration Court do in the matter? Under the Constitution it is restricted to dealing with interstate disputes, and it has no power if the Minister chooses to go before it to set up wages and conditions of employment in an industry in regard, to which there is no dispute.

Senator McLACHLAN (SOUTH AUSTRALIA) - He would be restrained anyhow.

Senator Sir HAL COLEBATCH - But what advantage is to be gained by inserting in the bill a clause which is ultra vires of the Constitution?

Senator Daly - Does the honorable senator suggest that .the Minister could not refer a case to the Federal Arbitration Court?

Senator Sir HAL COLEBATCH - I do, unless it be in regard to an industrial dispute extending beyond the limits of one State. But the clause makes no provision for the Minister approaching the court only in the case of a dispute extending beyond one State. It confers a power which is not given under the Constitution. Let me assume that in all the States participating in the wine bounty the employers and employees are agreed upon a scale of wages that the Minister and those behind the present Government regard as far too low or as below the general standard. Does Senator Daly suggest that under this clause the Minister could go to the Arbitration Court and say, " Wc do not propose to pay this bounty unless you declare that these conditions are fair ".

Senator Daly - No. The Minister could not do that.

Senator Sir HALCOLEBATCH.Then what is the meaning of the clause?

Senator Daly - It means that under proper conditions the Minister may approach the Arbitration Court,

Senator Sir HALCOLEBATCH.If there are two States engaged in making: wine, and there are high wages in one and: low wages in the other, and if the people engaged in the industry in the State iti which the low wages are paid are satisfied with them, realizing that the industry is not in a position to pay higher wages, does Senator Daly suggest that the Minister could refuse to pay the bounty in the case of the State in which the low wages are paid or could approach the court and ask whether the wage paid in that State was fair or not? If so, he would be asking the court to interfere in a dispute which was not of an interstate character, and to do something it had not the power to do. The clause as it stands suggests something entirely contrary to the Constitution.

Senator Pearcemade an important reference to the probable effect of this legislation on Australia's trade with other countries. Whilst we are loud in our protests against the dumping of goods in Australia by other countries we are ourselves doing nothing but dumping our surplus products in other countries. We are dumping butter and sugar, and it is now proposed to dump our wine. Other countries are bound to protest. Already France and Egypt have taken action detrimental to our interests.

Senator Guthrie - And Germany has done so in regard to our wheat.

Senator Sir HAL COLEBATCH - The Egyptian Government has not touched our wheat, but has touched our flour, with the result that there is imminent danger of large numbers of men engaged in our milling industry being thrown out of employment. Our milling capacity is far in excess of our ability to consume flour, and we are dependent upon export. Our old customer, Japan, is now making all its own flour, aud is also exporting it to many of our previous customers. Egypt has put a heavy duty on Australian flour. Italy and Japan are smarting under our prohibition of exports and our high tariff. These are countries that to-day are buying from Australia £4 worth of goods for every £1 worth they sell to us. Where shall we get if we continue doing things that are absolutely hostile to our own interests? At the same time we have nothing but vague threats of what the Government proposes to do in regard to luxury importations from America, in which case the trade balance is tremendously against us. To-day I asked Senator. Daly for a reply to a pertinent question on a matter affecting the encouragement of the moving picture industry in Australia, and the reply I got was that the facts would be ascertained. I do not blame Senator Daly. The answer must have been placed in his hands, but one would think that I had asked a most abstruse question, whereas the information I sought must have been in the hands of the Government for weeks past. I hope the Leader of the House will keep the matter in mind, because I do not think the Senate should be denied the information required. For the reasons I have given, I shall oppose the bill. It is utterly wrong in principle and, I am confident, will have a harmful effect on the wine industry. It will delay the development of a local market that in every respect would be very much more valuable to the producer than the overseas market which the Government is now attempting to cultivate.

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