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Wednesday, 30 July 1930

Senator DALY (South Australia) (Vice-President of the ExecutiveCouncil) . - I hope that the Senate will not reject this bill. I entirely agree with many of the sentiments expressed by SenatorColebatch and by the right honorable the Leader of the Opposition (Senator Pearce) regarding bounties. I invite honorable senators to study the matter since the present Government has been in office. It did not bring into being, for example, the iron and steel bounty. But it did attempt to introduce a marketing system to encourage the wheat producer.

Senator Sir George Pearce - Not by bounty.

Senator DALY - This Government believes in tackling these problems in a scientific manner. The right honorable senator knows that the Government was faced with the alternative of assisting the wheat industry by bounty or by the establishment of a scientific marketing system. The granting of a bounty to that industry would merely have resulted in an increase of the profits of the wheat merchants. I agree with Senator Guthrie that it is the man on the land who needs encouragement. The middleman in King William-street, Adelaide, can look after himself. This Government assisted the cotton industry by a bounty and now it seeks to establish the flax industry in Australia. I suggest that those honorable senators who refer to our financial position, should try to appreciate the fact that the real reason why 200,000 men are walking the streets of our capital cities to-day is that this country cannot absorb its population. Its absorptive capacity is such that we have an over-supply. I know of no permanent solution of unemployment except by increasing the absorptive capacity of the nation in which the unemployed are living. I invite Senator Colebatch to study the report of the Tariff Board on flax and linseed production in Australia. At page 9 ' of its report the board states -

Estimated on actual production in Australia in former years the 70-acre crop of. flax in Victoria for the year 1927 included with the 150-acie crop of Tasmania would produce approximately 8 tons of flax fibre, and18 tons of linseed, and seeing that the requirements of the Commonwealth are estimated at 1,370 tons of fibre and 22,300 tons of linseed, it is evident that Australia does not supply any appreciable quantity of her requirements.

I suggest that SenatorColebatch should calculate by how much the absorptive capacity of this Commonwealth would be increased if we were to produce sufficient flax for our own requirements.

Senator Sir HAL COLEBATCH (WESTERN AUSTRALIA) - Not by one man if the flax were produced at s loss.

Senator DALY - I did not- expect the honorable senator to discuss the obvious with me. If, although we are now sustaining a temporary loss, we are enabled to increase our absorptive capacity, surely it follows that later we shall be able to carry on the industry concerned at a profit.

Senator Sir HAL COLEBATCH (WESTERN AUSTRALIA) - Already £130,000 has been thrown away on the flax industry.

Senator DALY - I entirely agree with Senator Oolebatch that the principle of bounties has been tacked on to our political system. Industries have come along to governments, pointed out the disadvantages under which they were labouring, explained the objectives at which they were aiming, asked for a bounty, and suggested that within a certain period they would reach their objective. As soon as they obtained the desired concession they, like Micawber, washed their hands of the affair, saying, in effect, ''Thank God that's settled." That is not what this Government intends to do with its system of bounties.

Senator Sir HAL COLEBATCH (WESTERN AUSTRALIA) - That is what it did with the iron and steel industry.

Senator DALY - I have already pointed out that that was not the baby of this Government. When the Government assumed office its baby had already been reared, and ' we could not allow it to remain out in the cold to die. The babies that have been born of this Government are the cotton and wine bounties.

Senator Sir George Pearce - And the sewing machine bounty.

Senator DALY - That baby is not yet born. I have no doubt that, if the Senate passes the Sewing Machine Bounty Bill, it will have no cause to regret its step. I suggest to honorable senators chat, if there is an industry that warrants assistance from the Commonwealth in order that it may be placed on a basis whereby it can produce and increase our absorptive capacity, it is the flax industry. A market exists for all the flax we can grow, just as it does for cotton. The extra taxation that will be imposed upon the people as a result of the bounty will be infinitesimal, and if there is any risk attached to the scheme it is well worth taking.

I ask honorable senators not arbitrarily to turn down proposals for bounties. I do not object to their raising objections after due consideration; but I believe that the more carefully one considers the possibilities of the flax industry in Australia the more probable it is that the majority in this Senate will vote for the bill. I urge honorable senators, before contemplating the rejection of the proposal of the Government, to consider the report of the Tariff Board - an independent body. I ask them not to concern themselves with its conclusions, but to study the facts that were elicited by that board, and then to consider is it worth while our attempting to put the industry on a profitable basis. As Senator Sampson pointed out, it is anticipated that within a very short period the industry will be carrying on at a profit.

Senator Lawson - I draw the attention of the Minister to the conditions embodied in paragraph 9, on page 17, of the Tariff Board's report. Are they incorporated in the bill? If not, why not?

Senator DALY - I am not in a position to answer that question at this stage. I suggest that it would be more fitting to submit it during the committee stages of the bill. I have no doubt that, if that condition is not in the bill, there is a very good reason why it should not be there.

Senator Sir HAL COLEBATCH (WESTERN AUSTRALIA) - Because the Government does not propose to adopt the board's report.

Senator DALY - SenatorColebatch has a very happy knack of misconstruing the intention of the Government. It is not because the Government does not propose to give effect to the recommendations of the board. That bodv's recommendations have received the fullest consideration from the Government ; but, as Senator E. B. Johnston pointed out, it is some years since the report of the board was submitted.

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