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Wednesday, 18 June 1930

Senator O'HALLORAN (South Australia) . - Despite the pessimistic utterances which we have heard this afternoon from Senator Colebatch on the general economic position of Australia, and from Senator McLachlan on the prospects of successfully establishing the cotton industry in Australia, I am sufficiently optimistic to believe that the proposals of the Government will place the cotton industry on a sound basis. In submitting this measure for the encouragement of the cotton industry the Government has been charged with being unduly precipitate, but there are not many bills providing for the payment of bounties or for other purposes, which have received more consideration than this measure. The Leader of the Opposition (Senator Pearce) said that the Government acted with undue haste and, in the main, departed from the recommendations of the Tariff Board, which were submitted after careful investigation. Apparently, the right honorable senator was not in possession of the latest report of the Tariff Board which contains recommendations of sufficient strength and importance to justify the introduction of this bill. The Tariff Board first conducted an investigation into this industry in 1925, and furnished a report to the late Government in 1926. Subsequently, the board was directed by that Government to hold another inquiry which was more comprehensive than that first undertaken. The second report which was presented on 6th March, 1929, dealt with practically every phase of the cotton industry, and the beneficial effect of its successful establishment upon other industries using cotton as a raw material. The board obtained evidence from all sections of the community including the growers, those in control of ginneries, manufacturers and importers, and with the fullest information, that it was possible to obtain made certain recommendations upon which this measure is framed. Certain portions of the Tariff Board's report should be closely studied by honorable senators before they record their votes on this measure. From the report of 6th March, 1929, I quote the following:

In its report of 5th May, 1926, on the question of the granting of bounty in respect of seed cotton, the Tariff Board dealt with this aspect of the matter and embodied therein statements supporting its view that the cultivation of cotton in the Commonwealth is highly desirable. It is not proposed in this report to traverse the whole of the information included in the previous report, but it may be well here to briefly refer to some of theo more weighty reasons which the board considers make it of the utmost importance to the Commonwealth that she produce as much of her requirements of cotton as is practicable. Briefly stated, the reasons are as follow : -

1.   The cotton-growing industry provides an avenue for direct employment on a' large scale, both in the growing of cotton and cotton seed. A considerable amount of employment is also provided by the industries in which cotton and cotton seed are used.

2.   The industry affords a means for the utilization of large areas of land and thus assists in the matter of land settlement and, to some extent, directly and indirectly in the migration policy of the. Commonwealth.

3.   The production of cotton in Australia means the retention within the Commonwealth of a very large sum of money which otherwise would require to be sent overseas for the purchase of cotton and cotton seed.

I commend those three points to Senator McLachlan who definitely stated that the assistance to the cotton industry provided in this bill will not result in stabilizing our finances, increasing land settlement, or providing additional employment.

Senator McLachlan - The industry has not been very successful in the past.

Senator O'HALLORAN - The honorable senator's opinion does not coincide with that expressed by the members of the Tariff Board who conducted a thorough inquiry into the industry at the request of the Government of which the honorable senator was a member. The report proceeds -

4.   The availability of adequate supplies of cotton and cotton seed grown in Australia would place Australian manufacturers of products, into which these commodities enter, in 11 secure position in the event of any emergency arising having the effect of cutting off supplies from overseas.

It continues -

Having in view the place which cotton holds in the domestic, industrial, economic and national life of a country, the board has no hesitation in expressing the view that the development and successful establishment of the cotton-growing industry in Australia is not only desirable but is vitally essential to the welfare of the Commonwealth.

These are definite expressions of opinion in support of the measure now before the Senate, because the bill is based substantially upon recommendations made by the Tariff Board in other portions of its report.

Senator Sir HalColebatch quoted certain extracts from the report, and used them as arguments against the proposal. Here again there is room for differences of opinion. I had intended to quote one paragraph of, the report which the honorable senator read and use it as an argument in favour of the bill. It is as follows : -

Evidence is available that there is sufficient suitable land in Queensland for the cultivation of cotton to meet the needs of the Commonwealth, and, in the opinion of the Tariff Board, provided the growers can be assured of a market for their product at prices which will ensure them a reasonable return, the development of the cotton-growing industry in Australia and its establishment on an economic basis, is not only a possibility but also practically a certainty.

Senator Sir Hal Colebatch - Cannot the same be said of any other industry ?

Senator O'HALLORAN - Senator Colebatch went on to say that no industry in this or any other country could depend upon permanency as regard prices and world conditions. "We all agree with the honorable senator on that point. This, I suggest, is one of the reasons actuating the Government in introducing this bill. The intention is to protect the cottongrowing industry in its infancy from the vagaries of world prices and conditions. Drastic fluctuations might crush a young industry, but might not materially affect one that is firmly established on a permanent and paying basis. To charac terize the view of members of the Tariff Board as nonsense is to ignore fundamental truths in the history of development in Australia. I ask honorable -senators to consider the protection afforded to other primary industries. The comparison is quite germane to this discussion. Can they point to any primary industry which has not received assistance. Wheat-growing may be cited as one illustration. How much wheat would be grown in Australia to-day if successive State Governments had not constructed non-paying lines of railway to give growers access to their markets, and* nonpaying water schemes to aid in the occupation and development of agricultural land? These railway schemes are not always profitable even when production has increased, because the deliberate policy of successive railway administrations has been to fix low freights for the carriage of grain to encourage the outback producer, and ensure permanent land settlement. If honorable senators care to peruse the reports of the railways commissioners in the different States, they will find that millions of pounds of the taxpayers' money has been and is being spent in maintaining railway services solely in the interests of our primary producers. I have no doubt that the position in Western Australia is much the same as in any other State.

Senator Sir Hal Colebatch - The only time that our railways pay is when there are huge quantities of wheat to transport to the seaboard.

Senator O'HALLORAN - These nonpaying lines of railway have also aided in the development of pastoral areas. The Commonwealth Government is responsible for the maintenance pf the railway line from Port Augusta to Alice Springs. That section is never likely to be profitable, but its construction and maintenance are justified for developmental purposes. Western Australia has several " sections of non-paying railways stretching out into its pastoral areas. Without these vital lines of communication, settlement of the land for pastoral or other purposes would be impossible. We might apply the same argument to the mining industry. Tasmania, Western Australia, and Queensland have constructed hundreds, if not thousands, of miles of railway for the development of mineral fields which, after prospering for a few years, have been closed down; but unfortunately the liability in respect of railway construction remains for all time a burden upon the people.

The Government's proposal to assist the cotton-growing industry by providing for a bounty on raw cotton and protection in the allied secondary industry, is comparable in every respect with the action of successive State governments in spending large sums of public money on the construction of non-paying railway lines and water schemes for the benefit of the wheat-growers, pastoralists and other primary producers. Another important point which honorable senators would do well to remember is that Parliament affirmed this principle in 1926, when it agreed to proposals introduced by the then Minister for Trade and Customs, the late Mr. Pratten. The underlying principle of the measure approved by Parliament in that year was identical with the principle contained in this bill. Under the 1926 proposals, the limit of expenditure over a period of five years was £900,000. Expenditure under this bill is not limited to any particular sum; but the Tariff Board, after careful investigation, estimates that the liability over a five-year period will be in the neighbourhood of £800,000. In view of the fact that in 1926 Parliament approved of a bill to stabilize the cotton industry until 1931, I submit that those honorable senators who endorsed the principle then, to be consistent, must now support this measure. ' It is true that, as the present financial outlook is far from satisfactory, every item of proposed expenditure should be scrutinized with the greatest care. But there was the same need for close scrutiny of the 1926 proposal. A buoyant revenue is no reason why Parliament should approve of a scheme to spend hundreds of thousands of pounds over a period of years unless it is satisfied that the project is sound. In 1926 Parliament made available £900,000, spread over a period of five years, for the encouragement of the cotton-growing industry. Of that amount only £290,000 has been spent to date. Since the actual expenditure is £610,000 less than was contemplated, the industry now has a moral claim upon this Parliament for a continuance of the assistance provided under the 1926 act. If the total expenditure over the period of five years amounts to £800,000, the sum required, over and above the amount unexpended under the 1926 proposals, is about £190,000.

It has been said that cottongrowing is a black man's industry, that it cannot be successfully established in Australia. We have always had our pessimists. I well remember that, some 25 years ago, when South Australia was producing about 12,000,000 bushels of wheat per annum, the pessimists of the day declared that no more wheat could be produced in that State. To-day, despite the widespread drought conditions of the last three years, South Australia produces approximately 25,000,000 bushels per annum. Given a normal season, the output will probably reach a maximum of 40,000,000 bushels, and over a period of years an average of about 35,000,000 bushels per annum should be maintained.

Senator Thompson - That type of dismal prophet declared that the Darling Downs could not grow more than one cabbage at a time.

Senator O'HALLORAN - South Australia has developed hundreds of thousands of acres for wheat-growing, country that the type of prophet to whom the honorable senator refers declared to be unsuitable for wheat-growing. Although the rabid freetrader may have died out, his mantle appears to have fallen on some honorable senators, who have claimed that secondary industries cannot be established in Australia. Secondary industries have been successfully established in this country. I remember when people asserted that it was not possible to build motor bodies here; that we should have to buy them for all time from America. Holden's engaged in the industry, and reduced the price of a certain type of body from £82 to £32. If we accepted these pessimistic prophecies in their entirety, the whole progress of Australia would be retarded, and we should retrogress, instead of advancing, as every true Australian hopes and believes will be the case.

Let me examine for a moment the effect of the successful establishment of the cotton industry on the trade position of Australia with the world generally. At present Australia imports approximately £11,000,000 worth of cotton goods annually, and about £2,000,000 worth of other fabrics in which cotton is a constituent part, so that our imports of cotton goods may be stated to be roughly about £13,000,000 per annum. According to the information contained in a report of the Tariff Board, and information supplied to the Government from other sources, goods representing at least half that amount could be produced in Australia once the industry was properly established here. A gold bonus and other benefits to improve the financial position of Australia are being brought forward for consideration. I ask honorable senators is it not better to endeavour to establish the cotton industry, at an expenditure of £800,000 spread over a period of five years, from which we could reasonably anticipate to reduce our imports by £7,000,000 annually?

Senator Sir Hal Colebatch - How did the honorable senator arrive at his conclusions ?

Senator O'HALLORAN - Some honorable senators, and probably the honorable senator who interjected, will argue that it is preferable to pay £400,000 a year on the gold now being produced in Australia, in an effort to stimulate the gold-mining industry and improve our trade position. That method of stimulating the gold-mining industry would merely increase the return to those who have capital in the industry, most of whom are living abroad at the expense of the taxpayer. By expending a much smaller amount per annum to establish the cotton industry, we shall, if our reasonable anticipations are realized, provide employment for Australians and set up for the products of our primary and secondary industries a home market which, after all, is the best of all markets for a product of any industry.

Unemployment is a very important consideration at the present time. We have a huge number out of work. I do not suppose that there is any primary industry, with the exception, perhaps, of the viticultural industry, to which passing reference was made this afternoon, that has a greater capacity to absorb labour than cotton-growing. It is essentially a handwork industry. The cultivation of the cotton plant is substantially a gardener's job, the tilling of the soil and so on requiring a good deal of manual labour and personal supervision, while the picking of the cotton after it reaches maturity is essentially a hand labour job. So far none of the great inventors of the world have been successful in inventing a machine that will pick cotton mechanically. Those peculiarities give to the cotton industry a remarkable capacity to absorb labour. At a time like this, when practically every State in Australia is spending hundreds of thousands of pounds in doles to the unemployed, for which nothing is, or can, be received in return, the establishment of such an industry would be providential. Only last week the Commonwealth Government granted £1,000,000 to the different States to assist them to relieve their unemployment. A flourishing cotton industry in Australia would employ those people and enable them to produce something that is necessary and of benefit to the community.

The secondary side of the industry is to be assisted by the bounty and also, we are told, by a measure of tariff protection once the producing stage is reached. Here again there are great potential avenues for employment. We know that whole counties in Great Britain are dependent on the cotton industry for their maintenance, and that whole communities in the United States of America, Japan, and other countries are similarly dependent on the industry. Why should not Australia participate in its benefits?

One of the last arguments with which I shall deal is that declaring that the measure is bound to fail because efforts to establish the cotton industry in Australia during the last 70 years have been unsuccessful. I understand that cotton was first grown in Queensland about 1860, and that it has been grown there with more or less success since. Until the 1926 Cotton Bounty Act was passed, no attempt was made to stimulate the side of the industry that is essential to its establishment. Previously, efforts were concentrated mainly on the production of cotton for export. That handicap upon the industry placed it at a disadvantage. We started out to grow something that we need in Australia, but asked the growers to send the commodity abroad to be sold. That is corrected by this bill. An effective protection is to be afforded and adequate assistance given to those engaged in the manufacture of cotton products. That will provide a market for home-grown cotton, and disposes of the arguments that cotton-growing can never be successfully established in the Commonwealth.

While it at present appears that the major benefit from the measure will be derived by the State of Queensland, there is more than a possibility that its benefits will extend to other States as the years pass, when the spinning section of the industry becomes firmly established. A demand will be created for Australiangrown cotton, and the needs of the community, so far as cotton is concerned, will be provided for. In South Australia, we have a large area of land on the banks of the river Murray that has been prepared for intense culture by the State at considerable expense. Dairying is now being carried on in some of those districts. In others, grapes are grown for the manufacture of wine and spirits, while other sections are used for the cultivation of fruits for the dried fruits market. My idea of intense culture is that a man should not be entirely dependent on one branch of production, but should engage in a number of activities, so that if one source of income fails he will still receive some return from the other sources. By assisting the cottonspinning industry we shall encourage the cultivation of cotton among small growers. I visualize the day when some of the valuable land in Western Australia, as well as in the other States, which is not now put to its full use, will be devoted to intense culture.

I ask honorable senators to recognize in this measure a genuine effort on the part of the Government to establish another primary industry in Australia - an industry which the Tariff Board's report clearly shows can be established here, and will be of great value to the nation by helping to solve its economic problems.

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