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Tuesday, 31 July 1906

Mr GLYNN (Angas) .- I desire to deal briefly with the provisions of the Bill, which should not be allowed to pass without a critical examination of its scope and the probable efficacy of its provisions. We have heard a good deal front time to time from the Prime Minister as to the possibility of great good being done by the granting of bounties to rural industries. If the farmers of Australia rely upon this Bill as a stimulus to the agricultural and associated industries throughout the Continent they will be somewhat severely disappointed. The policy of bounties is one that we ought not to launch without being fairly sure that the limits of its application are likely to be adhered to, and that it will probably be successful. In nearly all cases bounties are continued after the period during which they were intended to apply, and in most they are increased. The position is the same, whether it be a bounty or a protective duty. In 1789, when Madison in troduced his first Tariff, and placed a duty of7½ per cent. on cotton in order to stimulate the industry, he said that it was to be imposed for only a few years, and that the industry, being once established, could continue without adventitious aid. But the duty was increased to 35 per cent. in 1812. Cotton is one of the lines which, under this Bill, is to be stimulated into productivity in Australia by means of a bounty. I may also point to the experience of Canada. Although I do not wishto specify the articles in respect of which the bounties were given, we know that the original policy, both with regard to period and amount, was never adhered to. Some of the commodities that are to be the subjects of bounty under this Bill have already had the bounty system applied to them in Australia. I think that fifteen or twenty years ago Queensland granted a bounty to stimulate the cotton industry. In 1892 some 700 or 800 acres there were under cotton, and produced over 200,000 lbs. of ginned cotton. According to recent information, the industry has not progressed. It is now practically non-existent, or, at all events, insignificant, so that we have practical experience as regards the effect of granting a bounty on cotton produced in Australia.

Mr Ewing - It fell very much in price.

Mr GLYNN - We are not going to get an assurance of high prices or regularity in prices in the future any more than we did in the past. As regards cotton, within the last fifteen or twenty years there have been serious fluctuations in price, but they are likely to continue. Between 1860 and 1870, owing to the American war, there were bigger fluctuations. But as regards the future, it must be remembered that during the last ten years the demand for cotton has fluctuated a good deal ; on the whole, it has been on the increase. Considering that certain parts of New South Wales and Queensland have been declared to be fairly well suited for theproduction of cotton, that the price is good, that cotton goods production and their exportation are increasing in England, there is every inducement to private enterprise, even without a bounty, to enter into the cotton industry in Australia. With a bounty it has not been a success in the past. I mentioned that in England the demand for cotton is increasing. " The figures forlast year show that, notwithstanding the allegation of Mr. Chamberlain and some of his followers, the cotton industry there is particularly strong. The actual profit made by the industry in Lancashire last year was estimated at £668,000. There is a very big demand for cotton within the Empire itself if it can be produced here. Let me take some of the other items. To a large extent, coffee production depends for success, not so much on any bounty - and certainly not on the bounty offered in this Bill - but on the quality of the article. This is a bounty on production, and not a bounty on quality. That is, I think, the. experience of the commercial world. Coffee is now produced in Australia, but the small amount offered here as a bounty is not likely to induce a much larger production. Coffee of fair quality - and I have drunk some of it - is, I understand, produced in Norfolk Island. I believe that it is produced in parts of the Commonwealth. What we want to do is to get a reputation for coffee, and that will depend upon its quality. The offer of this bounty - which, if it does anything, may perhaps draw into the industry a few small men, who generally fail - is not likely to lead to a very great stimulus in production. On many lines we have had bounties in operation in the States. In' South Australia, for instance, there was a bounty on the production of olive oil. It will show how unequal bounties are when I mention that practically that bounty was drawn bv one or two men. I think that one man derived the principal advantage from it. It has beer, in existence in South, Australia, and I do not think that the fact that the Commonwealth offers a bounty which, under the terms of this Bill, could not last for more than a year, would act as a stimulus to production. I do not know what the draftsman about when he drafted the Bill. It seems to me to have been drawn' by an amateur rather than bv a professional draftsman. I believe that olive trees do not bear until about nine years after they have been planted. The bounty which is to induce Production is to expire at the end of ten years, therefore it will last for only one year.

Mr Ewing - Did not the Minister explain that he intended to make the bounties operate for five years from the time of the trees bearing?

Mr GLYNN - Of course, if the Minister intends to amend his Bill out of recognition it is not worth our while to discuss it.

Mr Ewing - He will only do what is right.

Mr GLYNN - I have not had an opportunity of reading his speech. Unfortunately, I was not in the Chamber when it was delivered - I could not be here - but I have read the newspaper reports.

Mr Ewing - The Minister will not be deaf to any reasonable suggestion made by honorable members.

Mr GLYNN - Our amendments might be so numerous as to occupy more space than the text of the Bill, and the policy, as a policy, would, in effect, disappear. I understand that the Minister has given up the proposed bounty on chicory production, and now we are told that the terms of the bounty on olive oil, which is utterly incapable of affording, an incentive under the text of the Bill, because it would last only one year, are to be amended.

Mr Ewing - The Minister is not going to give it up.

Mr GLYNN - Either the bounty must be given up or the Bill must be remodelled in that regard. There is one objection to the whole scheme. Bounties ought to be given for the production of commodities which are likely to be produced over a fair area throughout the Commonwealth. In other words, the benefit df the bounty ought to be fairly well distributed throughout its territory. It is a great mistake to introduce bounties, the benefits of which can be enjoyed by only one State, or, at most, by one or two States. This is a subvention chiefly to the industries of Queensland and New South Wales, if to any extent it is likely to be availed of.

Mr Ewing - The honorable member does not mean that, surely ?

Mr GLYNN - I do. I believe that the bulk of the articles mentioned in the schedule are not likely to be produced by three of the States.

Mr Ewing - Take' South Australia.

Mr GLYNN - The honorable member alludes to rice, I suppose?

Mr Ewing - No; to fibres, fish, milk, and oil.

Mr GLYNN - Milk is produced already, and I do not think that the industry, as regards production., requires to be stimulated. The panacea which has been urged has been protection.

Mr Ewing - Suppose that we take in the Northern Territory?

Mr GLYNN - The honorable member proposes to give a bountry on the produc- tion of certain commodities in the Northern Territory with white labour. There lies the difficulty. A bounty on cotton production' would amount to absolutely no stimulus in the Northern Territory, where the plant grows wild and in abundance-

Mr Ewing - The honorable member's statement was that some of the States would not participate, and my reply was that in South Australia almost all of these articles could be produced.

Mr GLYNN - I quite understand the statement of the Minister. But I repeat that the bounty would be availed of largely, if not exclusively, by New South Wales and Queensland. Certainly, the articles mentioned by the honorable member are produced at the present time.

Mr Ewing - And the rest of them can be produced in the Northern Territory.

Mr GLYNN - I beg the Minister's pardon, the conditions under which they are to receive the bounty are not existent in the Northern Territory. It is of no use to offer a bounty for the production of cotton in places where it could not be produced by white labour. The honorable gentleman offers a bounty with one hand, and practically takes it away with the other. Within the settled district's of Australia, so far as bounties are likely to be effective, they would operate chiefly in Queensland and parts of New South "Wales. The reports say that cotton can be produced here; but, leaving out the Northern Territory, I have not seen in a report a reference to any other part of Australia where the cotten industry is likely to be successful. We have had from the Treasurer to-day figures showing that in bounties on sugar production alone Queensland and New South Wales have received, in the last five years, over ^700,000, and that there has been an average shrinkage of ,£100,000 a year from import duties on sugar. So that, in connexion with the sugar industry, those States have received a subvention of over ;£i, 200,000 ; and the operation of this Bill will be, although in a comparatively small way, in further aid of industries in those territories. I am not seeking to draw any distinction between the States. What I submit is that bounties ought to be given in respect of such commodities as are likely to be produced over a fairly wide area of the States, or, at all events, be applied to commodities the production of which would not be confined to one or two States. Because, so far as production was likely to be confined to one or two States^ those States could produce the article unaided. This is an Australian policy, or it is nothing. But if a bounty on the production of commoditieswhich are almost peculiar to a State be desired, then that State, with the consent of the Commonwealth, has the powerto make the necessary provision. The duty rests upon the Stales to stimulate certain classes of production. Talking of the probability of the success of bounties, I said in the beginning that in many cases they have failed. I remember reading in the report of the Tobacco Commission that the bounties given in the State of Victoria for the production of tobacco had failed. The amount was, I think, 3d. per lb. ; and1 for reasons which one may or may not accept, given in the Commission's report, and* for causes which are also explained in Coghlan and other authorities, the bounties-' were not a success. That, at all events, suggests that we should be cautious before launching out on a system of bounties, the extension of which is almost certain to be demanded.

Mr Isaacs - The excise killed the tobacco industry in Victoria.

Mr GLYNN - Perhaps sp. But, at all events, bounties could not keep it alive, and we cannot afford to forfeit excise for the sake of bounties on tobacco. I do not quite understand the scope of this Bill. The Minister of Trade and Customs mentioned, and' clause 3 describes, what bounties shall be given in respect, of the goodswhich the Minister is to find to be " of a merchantable quality." This is one of those Bills which prescribes a number of duties that necessitate the Minister being an expert. Under clauses 5 and 7, for instance - and in the latter clause, althoughthe Governor-General is mentioned, the Minister is meant - the Minister is to do certain things. He is to find what is the standard rate of wages in a particular industry. Paragraph b of clause 7 prescribes that he is to determine the market value of certain commodities, All that I cansay is, that if the Minister efficaciously discharges the duties imposed on him bv theBill, he must become an expert. Then thebounty is to be given to' a number of persons. It is to be given to the grower or producer of the goods in question ; but we also find in clause 4 that - the owner, occupier, or lessee of .any land or factory in which the goods were produced. or in which they may 'have gone for any process of manufacture, shall be deemed to be a producer. If the bounty is .to be given to the grower or the producer, and also to all the persons mentioned in clause 4, who are also to be regarded as producers, it seems to me that the amount which each of them will get must be very small. Some portion of it will go to persons who have absolutely nothing to do with the production of the commodities. There seems to be something wrong, either in the draftsmanship or in the policy of this Bill. Surely the, lessee of land as well as the owner ought not to share in the bounty. The lessee may be the producer or he may not. The owner may be the producer or he may not. But you cannot have both the owner and the lessee as producers of a particular commodity - except under the definition of this Bill. We ought to be careful before we consent to the system proposed. It is not likely to be attended with any benefit to the genuine producer on whose behalf the Minister professes to be so solicitous, and its benefits will be less than the producer had a right to expect, after reading the platform generalizations of the Prime Minister as to what he was going to do for the agricultural industry. The Bill and the policy which it represents are not likely to lead to that extended production throughout Australia which we have been led to expect, and if the farmers have any such hopes, they are likely to be falsified.

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