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Friday, 20 June 1930

Senator GREENE (NEW SOUTH WALES) . - I appreciate the point raised by Senator Sir George Pearce. At the same time I consider there is not much difference between the provisions in this bill and those to be found in other bounty . acts. . In this measure the bounty is on a diminishing scale. This principle definitely places a limit upon the actual expenditure.

Senator Sir George Pearce - Meantime vested interests will have been created and will clamour for a continuance of the bounty.

Senator GREENE (NEW SOUTH WALES) - I suppose we" must always expect that to happen. But as the bounty payable will be on a diminishing scale, in the natural course of events it will, disappear. Our objective is to encourage the cotton-growing industry. Even Senator Colebatch agrees that if this is the wish of the Senate, we should have " something for our money," as he put it.

Senator Sir Hal Colebatch - Does the honorable senator suggest that we develop the cotton-growing industry beyond the requirements of the Australian market?


Senator Sir Hal Colebatch - Then why object to a proposal to limit the total amount of bounty?

Senator McLachlan - Will this proposed bounty of £120,000 per annum be payable in respect of seed cotton ?

Senator GREENE (NEW SOUTH WALES) - Senator ' Pearce has suggested that the total bounty paid on seed cotton should be £100,000. . Does the right honorable senator know how many bales of 'cotton that will provide for?

Senator Sir George Pearce - It should be ample.

Senator Sir William Glasgow - It will provide for a bounty ' on about 13,000 bales.

Senator GREENE (NEW SOUTH WALES) - Roughly, it will provide for 12,500 bales.

Senator Sir William Glasgow - At the higher rate of bounty.

Senator GREENE (NEW SOUTH WALES) - At the ratel½d. per lb. of seed cotton. This year, if seasonal conditions are favorable, the crop should be 10,000 - bales. Much depends upon the weather during the next six weeks in the cotton-growing districts of Queensland. If there is a mild winter the crop will probably be heavy. The crop under existing conditions may be anything from 8,000 to 10,000 bales. The total of the bounty now suggested in respect of seed cotton will not provide for any increase in the crop. I come now to the point raised by Senator Colebatch, who urged that the industry should not be encouraged beyond the absorptive capacity of the home market. I agree, but the manufacturing industry in Australia requires this year 11,000 bales of Australian cotton, and cannot get it.

Senator Sir Hal Colebatch - What is the total requirement of the Australian market in pounds?

Senator GREENE (NEW SOUTH WALES) - The honorable senator can find, out for himself by multiplying the number of bales by the weight - 500 lb.

Senator Sir Hal Colebatch - The Tariff Board states the Australian requirements at 13,200,000 lb.

Senator Dunn - The Tariff Board is not always right.

Senator GREENE (NEW SOUTH WALES) - I think it can be said of the Tariff Board that it has done a great work; but when it considers the future of an industry like that of cottongrowing, it cannot do more than make a guess at the requirements of the home market. When it presented its report,, it estimated that £100,000 would be sufficient to provide a bounty on the probable crop of seed cotton. If it were now asked to make an estimate, with the knowledge it now has of the progress of the manufacturing side of the industry, which, as I have stated, requires 11,000 bales this year, it would probably fix the maximum bounty payable at £200,000, instead of £100,000.

Senator Sir George Pearce - According to evidence given before the Tariff Board, the total quantity of yarn required by the Australian knitting and cotton tweed industries was stated by one witness to be 4,000,000 lb., and by another at 6,000,000 lb. per annum.

Senator GREENE (NEW SOUTH WALES) - But I am giving fact's in relation to the industry.

Senator Sir Hal Colebatch - On the honorable senator's own showing, the Australian requirements are about 5,600,000 lb. per annum.

Senator GREENE (NEW SOUTH WALES) - I am speaking of seed cotton but the honorable senator is referring to cotton lint. We have to divide the quantity of cotton lint by three to ascertain the quantity of cotton seed. If honorable senators had a knowledge of the industry they would not make such mistakes.

Senator Sir George Pearce - The evidence to which I referred relates to cotton lint.

Senator GREENE (NEW SOUTH WALES) - I know that ; but I am speaking of seed cotton on which the bounty is to be paid.

Senator McLachlan - Is it possible to estimate Australia's requirements of cotton yarn for some time ahead?

Senator GREENE (NEW SOUTH WALES) - This year the spinners are asking' the Cotton Board for 11,000 bales of cotton lint, which is equivalent to three times that quantity of seed cotton. That quantity cannot be supplied. The limitation of £100,000 suggested by Senator Sir George Pearce will cover approximately 11,000 bales. We have been informed by the spinners that with the introduction of new machinery, quite apart from the new works for which I understand arrangements are in hand, they will require 14,000 bales next year. I do not know whether the Queensland industry can supply that quantity; but surely we should make provision which will enable the bounty to be paid on the quantity of cotton to be used. When dealing with the payment of a bounty to growers how is the Cotton Board to apportion the 1½d. on a basis lower than the actual production? According to the vote on the second reading of the bill yesterday, the Senate is of the opinion that this industry should be developed and givenevery opportunity to expand. We wish to give the cotton-growers sufficient encouragement to produce all the cotton that is required by the local manufacturers, who are being asked to develop their works and to increase the production of goods manufactured from locally grown cotton. As we are providing in this bill for a diminishing bounty which will ultimately disappear we should, in view of the vote recorded yesterday, be content with the appropriation provided. The Tariff Board correctly stated that it did not think the industry should be encouraged to produce more cotton than the local marketcan consume. This industry, as I endeavoured to show yesterday, is controlled under a compulsory co-operative system in which every cotton-grower is concerned. The cotton-growers fully realize that if they produced more than the local industry requires they would have to export the surplus on which they would lose 2d.a lb. The Cotton Board, which consists of growers, is in control of the industry and will take every care to see that the ultimate returns to individual growers are not reduced by having an exportable surplus which' must be sold at a lower rate. Sufficient safeguards are provided to prevent overproduction. If the sugar-growers in Queensland organized on the same basis a few years ago - -

Senator Sir William Glasgow - And also the wine-growers.

Senator GREENE (NEW SOUTH WALES) - Yes, the position in both those industries -would not be as it is to-day. As the Cotton Board has absolute power to control production, then the committee is perfectly justified in adopting the bill in its present form. I appreciate what Senator Pearce has in mind ; but there is a limitation inasmuch as the bounty, which is on a diminishing scale, will ultimately disappear. The Senate has agreed to assist the development of this industry, and the committee should be prepared to give that measure of assistance which is now sought, particularly as it can rest assured that under the present method of control there is not likely to be over-production.

Senator Sir GEORGEPEARCE (Western Australia) [11.52]. - I trust that the committee will not totally disregard the sworn evidence given by spinners and others interested in the business before the Tariff Board. On page 10 of the Tariff Board's report of 1929, I find the following : -

In evidence tendered to the Tariff Board, Mr. McLean, representing Geo. A. Bond and Co. Ltd. (in liquidation), estimated the total quantity of yarn required in the Australian knitting and cotton tweed industries to be 4.000,000 lb. per annum. Mr. W. L. Hicks, Chairman of the Hosiery and Underwear Manufacturers Association of Victoria, estimated the total requirements of the hosiery and underwear manufacturers throughout Australia at 5,000,000 lb. per annum.

Senator GREENE (NEW SOUTH WALES) - Of cotton yarn?


Senator GREENE (NEW SOUTH WALES) - That is not lint.

Senator Sir GEORGE PEARCE - The report continues

Mr. D.T. M. Davies, of Davies Coop, and Coy. Pty. Ltd., Melbourne, manufacturers of knitted goods, estimated the total Victorian (evidently intended for Australian) consumption of yarns at 6,000,000 lb. per annum.

It is difficult to arrive at anything like an accurate estimate of the requirements and even if a reliable figure could be arrived at it would not give an accurate indication as to the demand likely to exist for the yarns which the Australian manufacturers are in a position to supply and which comprise only some of the various classes of cotton yarns used.

In the opinion of the board the total annual requirements of the Australian industries in the yarns of the classes produced by local spinners would probably be somewhere between 3,500,000 and 4,000,000 lb.

It takes approximately 1.1 lb. of lint to produce 1 lb. of cotton yarn, so that if the local spinners were operating to their full capacity, they would be in a position to use nearly '5,500,000 lb. of lint yearly. The production of 5,500,000 lb. of. lint would require something like 10,500,000 lb. of seed cotton. It should be noted that the 5,500,000 lb. of lint does not represent the present needs of the spinning industry or what would be required to spin yarns sufficient to meet the estimated, present requirements of the underwear and hosiery trade.

Senator Greenesuggested that the board did. not take into account the possible expansion of the industry, but it did. The report continues -

The quantity named is what the Australian spinners could consume if their, mills were operating at full capacity. As shown later in this report, to produce the 4,000,000 lb. of yarn estimated as the present annual requirement of the underwear and hosiery trade, about 13,000,000 lb. of seed cotton (approximately 4,400,000 lb. of lint) would be needed.

The maximum production of lint in Australia in any one year to date has been between 5,000,000 and 0,000,000 lb. (this occurred in 1925) so that if the production of yarn in Australia to the full capacity of the existing spinners could be brought about, there would be a sufficiently large local market to absorb the output of Australian cotton to the extent to which it has so far been produced. The use of the Australian cotton by spinners would, of course, depend upon whether or not conditions made it -more profitable for the spinners to purchase locally than to import.

As, in the opinion of the board, the key to the situation is really the creation of a local market for Australian cotton by the development of the spinning industry, the matter resolves itself into one of granting to that industry such assistance as may be deemed necessary to place it in the position of using the Australian production of cotton.

It goes on to point out that the amount recommended is a reduction of £20,000 on seed cotton as compared with that provided in the existing act.

Senator Sir Hal Colebatch - That is a deliberate recommendation.

Senator Sir GEORGE PEARCE - Yes; and after taking evidence from the spinners, who hope, under this proposal, to capture the whole of the Australian market, it has made a definite recommendation. Surely we are not going to ignore the recommendation of a board appointed by Parliament to make investigations of this nature and at the same time give the Government a blank- cheque? I intend to press for a limitation of the amount on the basis of the board's recommendation. Senator Sir Hal Colebatch referred to a total limitation. The amount of appropriation should have been included when the bill was before another place. We cannot fix the amount, and the only way is to provide for a limitation of the total amount.

Senator Sir Hal Colebatch - We could provide a limit for each year.

Senator Sir GEORGEPEARCE.But that would be excessive, as over a period of five years at £260,000 a year the amount would be £1,300,000. If the amount recommended by the board was considered adequate, obviously, £800,000 will be ample.

Senator Crawford - The committee can determine that the total amount shall not exceed a certain sum.

Senator Sir GEORGE PEARCE - I propose that in any one year the bounty on seed cotton shall not exceed £100,000, and on cotton yarn £160,000. The total amount for the whole period covered by the bill would then be about £800,000, which is the amount the Government estimates will be required.

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