10th Parliament · 1st Session
Mr. Speaker (Hon. Sir littleton Groom) took the chair at 3 p.m., and read prayers.
– On Friday last the Minister for Home and Territories informed me that a contract had been entered into between the Federal Capital Commission and Mr. E. L. Holmes in regard to a transport service in Canberra to commence to-day. Has that service commenced; if not, why not?
– I am not in possession of the facts relating to the proposed bus service, but if the honorable member will give notice of his question I shall endeavour to get the information for him.
Iron and Steel Duties - Tariff Board’s Reports
– According to the Tariff Board’s report upon the iron and steel industry, amongst those who gave evidence in favour of higher duties was the chairman of the Victorian Iron and Steel Merchants’ Association. In view of that fact, will the Minister for Trade and Customs lay upon the table the agreement alleged to have been made between the manufacturers and the trade, in order that honorable members may be able to judge whether there is any collusion to keep up prices?
– I have no knowledge of any such agreement, but I shall peruse the evidence given before the board and if it includes nothing confidential I shall make the papers available to the honorable member in the Library.
– As the various items in the schedule are dealt with, will the Minister for Trade and Customs afford the committee an opportunity to vote upon the duties recommended by the board as against those proposed by the Government.
– The Tariff Board merely recommends to Cabinet through the Minister. The Government, having considered the board’s recommendations, arrived at certain conclusions which are embodied in the schedule of duties submitted to the House.
– The Minister for Trade and Customs has informed the House that the Tariff Board’s reports contain recommendations to the Government, but that it is the tariff schedule which has been presented to this House us a Government measure. 1 ask him whether it is not possible for this House to be given a free hand in discussing these reports, without making tariff amendments a party matter. Cannot the whole House decide what shall bo done with the various items?
– I am not aware that the House does not now decide everything that is laid before it. I should like further to say that the report of the Tariff Board contains recommendations showing what the board thinks should be done. In one case the recommendation had a tag on it in connexion with an industrial problem, and an investigation was made by three of our highest departmental officers, who made the most detailed analysis of the whole position, with an exactness which I have never seen equalled before. The Government took these matters into consideration, and as a result the present proposals have been presented to the House.
– In view of the very keen desire of the majority of the members of the House, and the great anxiety on the part of the manufacturers of Australia, will the Minister for Trade and Customs give an assurance that the tariff will be finalized before we rise at the end of next week?
– I cannot give the assurance the honorable member desires, but as far as the tariff is concerned T am hopeful it will go through before the Houses rises. That, however, depends on the state of Government business.
– Has the Prime Minister received any communication from Victoria in regard to the conference held this morning in connexion with the industrial trouble on the waterfront ?
– I have just received a telephone message that the case was called on in the Arbitration Court this morning when the presiding judge defined the attitude of the court. It is possible that the two parties will meet in conference this afternoon.
– On Friday last a quorum was called for immediately after the luncheon interval. The bells summoning senators to another place had not stopped ringing when the bells connected with this chamber were set ringing a second time because ‘of a call for a quorum. In consequence many honorable members were not aware that a quorum had been summoned. Will you, Mr. Speaker, endeavour to arrange that the bells of both chambers shall stop ringing simultaneously in order to obviate any future error of this kind?
– I shall see if arrangements can be made for the bells of both chambers to stop ringing simultaneously.
Conference with Missionaries.
– Will the Minister for Home and Territories make available to honorable members copies of the proceedings at the conference between the Administrator of New Guinea and the missionaries in July last? Will the
Minister also make a copy of the report available to the League of Nations Union ?
– Four weeks ago I laid upon theTable a detailed statement and report of the proceedings for the information of honorable members, and extracts from the report were published in the press.
– I ask the Minister for Home and Territories if it is a fact that, although the latest edition of the Commonwealth Year-Booh has not yet been distributed to honorable members, it was on sale in Melbourne three weeks ago? Is it not possible for this publication to be available to honorable members within a reasonable time after the close of the financial year?
– In accordance with a promise to the honorable member, I made inquiries regarding the Year-Booh and ascertained that it is now being distributed. Some honorable members have received their copies, and other honorable members will receive theirs within a few days.
– Will the Minister for Home and Territories inform the House whether Dr. Woolnough, the oil expert, has yet reported on his recent inspection of the Roma oil bore?
– Dr. Woolnough returned to Canberra only to-day, and I have not yet had an opportunity to discuss fully with him his visit to Queensland.
Competition with Pacific Cable Co.
– Will the Prime Minister enlighten the House as to the progress of the controversy proceeding abroad regarding the competition between beam wireless and the cable companies? How will the competition of wireless affect Australia’s interests in the Pacific Cable Company? Is the Commonwealth Government,as shareholder in Amalgamated Wireless Limited, in terested in the beam wireless service between Australia and the United Kingdom?
– The competition between beam wireless and the cable companies has created a serious and acute problem, which will be accentuated if the beam system should prove over a period of twelve months as effective as it has been for the few months it has been in operation. The cable systems are considered vitally necessary for defence purposes, and possibly they will be required also as an auxiliary means of communication. A committee representing the governments concerned, namely, those of Great Britain, Canada, Australia and New Zealand) is to be appointed to investigate the relationship between beam wireless and the cable system, and to submit’ recommendations to the various governments. It is not finally determined that that committee shall be set up, but the matter has been practically decided, though no appointments have been made. Only experience can show what will be the effect of the competition of the beam system on our revenue from the Pacific Cable Company, in which we are the largest shareholder, our interest being 6-18ths, Canada’s 5-18ths, Great Britain’s 5-18ths, and New Zealand’s 2-18ths.. We have a very real interest in the beam system itself, as we are shareholders in the Amalgamated Wireless Company, which is conducting the service, on a reciprocal basis, by which it receives messages from Great Britain and despatches messages to Great Britain from Australia.
– I ask the Prime Minister whether the Auditor-General’s report has been submitted to him or to the House. If not, I would like to know the reason for the delay, and whether he will endeavour to have the report submitted to Parliament as early as possible after the beginning of each financial year ?
– I shall look into the question.
– In connexion with the proposed sale of the Australian Commonwealth Line of Steamers, will the Prime Minister inform the House whether tenders have yet been invited for their disposal? In further reference to the reply which he gave me a few weeks ago that no changes were contemplated in the board of directors, will the right nonorable gentleman state whether any action has been taken to renew the appointments?
– No tendershave yet been invited, and it is not proposed to invite tenders untilcertain information which is not available in Great Britain, but has now been despatched from Australia, has arrived there. This information was sent a week ago, and will reach Great Britain towards the end of Decem- ber. In regard to appointments to the board, Sir William Clarkson’s extended term expired on the 30th November, and it was not considered desirable to prolong it further, as the only function of the board now is to carry out the work in connexionwith the disposal of the Line, a letter has been written informing him of the termination of his appointment, and expressing appreciation of his services since he was appointed in 1923. In order to fulfil the statutory requirement that there shall be three members, Mr.Kneen, the general manager of the Line, has been appointed for three months, with an addition of £200 to his salary. In this way £3,000 has been saved in the way of salary; with the offset mentioned.
– I ask the Prime Minister whether, in connexion with the proposed sale of the Australian Commonwealth Line of Steamers, full information will be available in each capital city for inspection by intending tenderers and by the public, so that the public may know exactly the terms upon which it is proposed the Line shall be sold?
– Full particulars of the terms and conditions of the tenders will be available throughout Australia, and Great Britain as well.
Allowances to Postal Employees - Civic Representations
asked the PostmasterGeneral, upon notice - .
Is he yet in a position to reply to the representations made by the Fourth Division Postmasters,Postal Clerks, and Telegraphists Union, regarding the extension of the contract or noil-official post office systemand the payment of special allowances to postal employees in the FederalCapital Territory?
– No reply is outstanding in connexionwith the first-mentioned matter, and I have promised to receive a deputation from the union at Sydney when opportunity offers. There is no record of any representations regarding the payment of a special allowance to postal employees in the Federal Capital Territory. The latter matter is one for consideration by the Public Service Board.
asked the Minister for Home and Territories,, upon notice -
– The newspaper report to which the honorable member refers deals with a number of subjects, and consists largely of a recital of inferences drawn by the writer from remarks attributed to me. I am not prepared to offer any comment in regard to the report, except to say that, in the course of the interview which preceded the publication of the report, I did not make any statement purporting to be an announcement of the intentions of the Government regarding the important questions of policy mentioned by the honorable member.
Report on Dairying Industry - Mount Morgan Mine.
asked the Prime Minister, upon notice -
– The Development and Migration Commission has not specifically investigated the position of the dairying industry and its possibilities of development, and has given it consideration only in so far as this question has come before it in connexion with various schemes submitted by the States under the £34,000,000 agreement. The commission, at the request of the Minister for Markets and Migration, assisted at discussions with the department, the Council for Scientific and Industrial Research, and the Australian Dairy Council, regarding the whole question of dairy research in Australia.
asked the Prime Minister, upon notice -
– I would refer the honorable member to pages 13, 24 and 25 of the first annual report of the Development and Migration Commission in relation to this particular matter. During the recent visit of the chairman of the Development and Migration Commission to Queensland with Mr. L. M. S. Amery, Mr. Gepp discussed this matter further with the Queensland Government, and with representatives of the Mount Morgan Co-operative Mining Committee. With the agreement of the State Government, arrangements were made for Mr. T. M. Owen, a highly-skilled rnining and metallurgical engineer with both Australian and American experience, to immediately visit Mount Morgan to confer with the management of the mine and the Mount Morgan Co-operative Mining Committee, and to further investigate and check the economic possibilities of the continuance of mining operations,.on restricted scale, which had previously been discussed in considerable detail by Mr. Gepp with Mr. Boyd, the manager of the mine, on the one hand, and with the Co-operative Commitee on the other. Mr. Owen arrived at Mount Morgan last Thursday, 24th November, for this purpose. Mr. Owen’s visit has been made with the full agreement of the liquidators of the Mount Morgan Gold-Mining Company, who have instructed the manager of the mine to render all possible assistance. The Development and Migration Commission has reported verbally from time to time to the Commonwealth Government of the progress of this investigation, and will submit a report when the investigation into the economics of the proposal is sufficiently advanced.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
– It was the intention of the Government to proceed with the amending Workmen’s Compensation Bill this session, hut owing to the pressure of parliamentary business, it has been found impossible to do so. The necessary legislation will, however, be introduced as early as possible. The representations of the various organizations concerned in the matter have been considered.
Dismissed Telephonists: Reclassification: Mail Services in South Australia and North- West or Western Australia.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
Regarding his statement on 28th November last (Ilansard, page 2070), in connexion with the Engineer’s Branch of the PostmasterGeneral’s Department, will he say whether it is intended to make the increment available before appeals are heard and completed?
– On the 29th November the honorable member for Angas (Mr. Parsons) addressed to me the following questions, upon notice -
I am now able to furnish the following information : -
asked the PostmasterGeneral, upon notice -
In view of the infrequent mail service at Wyndham, Kimberley District, Western Australia, will he, pending the institution of the aerial mail service, consider the question of extending lettergram privileges to that centre for at least one night a week?
– This cannot be arranged under the general conditions governing the provision of lettergram facilities, which are extended only to those places where the telegraph office is open after 7 p.m.
– On the 18th November the honorable member for Swan (Mr. Gregory) asked the following question : -
What was the output in gross number of boxes of matches of the Australian match factories during the year 1925-26 ?
I am now able to furnish the honorable member with the following information : - 1,777,353 gross boxes.
Home Consumption and Exportation
– On the 30th November the honorable member for Lang (Sir Elliot Johnson) asked the following questions : -
I am now able to furnish, the honorable member with the following information : -
The total consumption of wool in Australia cannot be given, as particulars in respect of wood, combing and knitting establishments are not collected in all States. An estimate published in the Commonwealth Year-Book places the figure in the vicinity of 45,000,000 lb.
– On 24th November, 1927, the honorable member for Ballarat (Mr. McGrath) asked the Minister for Health, the following questions, upon notice -
I am now in a position to furnish the following replies : -
– I lay on the table further reports by the Tariff Board dealing with barbed wire, fencing wire and other wires and wire netting, cast iron pipes and fittings, and vessels up to 1,000 tons, and I move -
That the reports be printed.
I regret that I am unable as yet to make available the department’s dissections of the iron and steel industry.
– Since the tariff is now being debated I fail to see the necessity for printing these reports. Their purpose, I imagine, is to advise Parliament as to the need or otherwise to increase or decrease certain duties. Many of these reports have been prepared for a long time, and it was within the power of the Minister to present them immediately upon the assembling of Parliament. I refer particularly to the report relating to the iron and steel industry. In the circumstances it seems to be a waste of money to have the reports printed.
– I fail to get the point of view of the honorable member’s observations. I anticipated the desire of the committee to have the reports printed, and the principal reports have been available for honorable members any time during the last week or two. An important report which I have tabled to-day is already printed and will be available to honorable members when they want it.
Question resolved in the affirmative.
– (By leave) - I move -
That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-21, the following work be referred to the Parliamentary Standing Committee on Public Works for investigation and report, viz. : - Federal Capital - Extension of the sewer from the northern main sewer 071 Garden-Circuit toInter-Range-avenue to serve the north-western portion of the city.
The Public Works Committee has already investigatedand reported to Parliament concerning the general sewerage system of Canberra, which comprises a main outfall sewer and a main intercepting sewer, and other sectional sewers in the principal valleys of the city. These have been duly reported upon, approved by Parliament, and constructed, and are now in operation. It is now necessary to consider a further extension of the main sewerage system to cater for existing and projected development in the north-western portion of the city, which contains the site for the University, the scientific area, the Australian Museum of National Zoology, as well as the projected minor industrial area to the west of Northbourne-avenue. The present proposal is to construct an intercepting sewer leading from its junction with the northern intercepting sewer at Gardencircuit, northward to Inter-Range-avenue. It is proposed that the sewer shall be laid in the form of pre-cast concrete pipes in similar construction to that of other intercepting sewers recently laid after investigation by the Public Works Committee, and approval by Parliament. A plan indicating the proposed route of the sewer and sections showing the construction are submitted herewith. The total estimated cost of the sewer, excluding interest during construction and overhead charges, is approximately £57,000. It is not proposed to proceed immediately with the whole of the work, but in the first instance to carry it out in sections as required. It is proposed to proceed immediately with the first section of the work, which is estimated to cost approximately £24,000, and should be carried out in from six to twelve months. I lay on the table plans, &c, in connexion with the proposed work.
Question resolved in the affirmative.
The following papers were presented : -
International Labour Organization of the League of Nations - Tenth Session, heldat Geneva, 25th May, to 10th June, 1927. Draft Conventions and Recommendation adopted by the Conference.
Ordered to lie on the table.
Tariff Board - Reports and Recommendations -
Barbed Wire, Fencing Wire, and other Wires, and Wire Netting.
Cast Iron Pipes and Cast Iron Fittings for Pipes of more than 2 inches internal diameter.
Vessels up to 1,000 ton’s gross register.
Ordered to be printed.
Public. Service Act - Appointment of H. W. Mylius, Department of Works and Railways.
Customs and Excise Duties
In Committee of Ways and Means :
Consideration resumed from 2nd December (vide page 2530), on motion by Mr. Pratten -
That duties of custom and duties of excise (vide page 1,881), first item (27), be imposed.
. -I regret that I cannot comply with the suggestion of the Leader of the Opposition (Mr. Charlton) that the debate on the general question should be curtailed as much as possible so as to enable members to deal with the individual items of the schedule. This is the only opportunity afforded to honorable members to discuss the policy that lies behind the resolution itself and the Government’s proposals to increase the duties on various items. The time has passed when the discussion of this policy can airily be waved aside on the plea, so often heard, that protection is the settled policy of Australia. If any policy is found, after trial, to be inimical to the best interests of the country it should be capable of amendment. How does any policy become the immutable and unchangeable policy of a country? As a matter of fact there is no reason why protection should be regarded as the law of the Medes and Persians, which altereth not, because, for many years, the people who, in the long run, have to determine the policy of the country, have had little opportunity, in fact, no opportunity, of voting upon the continuance of this principle. Time after time, when elections have been pending, other important questions have been introduced to divert the attention of the people and to deprive them of the opportunity to consider and to vote upon the tariff policy. A noticeable change is to-day taking “place in Australian public opinion. Many people are asking themselves how long is this oppressive policy of protection to continue, and where is it leading us. They are showing impatience and distrust because the tariff has failed to bring about the results that were claimed for it. It is time that this policy, which is fraught with such direful consequences to the whole community, was made a vital issue at an election, and discussed thoroughly before the people, so that they may have an opportunity to express their opinion on it.
This policy of constantly raising our protective duties has a much wider effect than that referred to in the speeches of the Opposition during this debate, and so 1 am compelled to crave the indulgence of the committee to permit me to review the situation somewhat more thoroughly than lias yet been done, because the tariff policy has become of great and pressing importance, not only in our domestic affairs, but also in our imperial and international relations. As regards our domestic affairs, I propose to make no plea for any local or class interests. J should be entirely justified in discussing this policy from the viewpoint of my own State, but I do not intend to do so. It would also be within my right to enlarge upon its application to certain sections of the community, noticeably the primary producer, but, to a great extent, that has already been done by other members of the committee. Therefore, ‘I propose to discuss it in its relation, not to any particular territory of the Commonwealth, but to the federation, the effect upon farmer and worker, upon the great mass of people in the cities who are more or less on fixed salaries, and upon our national prosperity and development as a whole.
The Government could not have chosen a more inopportune time than the present for placing further tariff’ burdens upon the people. The position to-day is serious for a number of causes, the effects of which have been gradually accumulating. I do not wish in any way to speak in a lugubrious tone, or to tell a. doleful story, but it is necessary that we should pay heed to the warnings and statements of authoritative men in this community who have for some time been telling us that we are proceeding along the wrong path of government. The particular directions in which they have found fault with us, are these - they say that we have been guilty of maintaining an artificially high standard of living, due to our fiscal policy, and its natural corollary, arbitration. I shall deal with the interaction of these two forces directly. They also point out that we have adopted an attitude in defiance of the teachings of economists in relation to the post-war situation and international relations; that, because of the deliberate exclusion of competition, we are faced with a fallingoff of productiveness, and a failure to develop to the utmost our resources of material wealth; that this policy has caused interference with private enterprise, ingenuity, and individuality; and that we have failed to take our competitive place in the world’s market, simply because the artificial maintenance of the high cost of production has crippled successful trade, which is the real life blood of national wealth and power. For a long time the people have been realizing that the artificial standard of living that we have built up is getting more and more shaky every day. .For the last two or three years we have heard authoritative men say that it only wants one setback, say, a drought in Australia, to bring us to our senses, and make us realize the falsity of the doctrines that we have supported. That drought has .come, and many of those prophecies to which I have referred are being fulfilled. A further instalment of the protectionist policy is included in this motion at a time when the policy is coming into grave disrepute among the people. During the past few months an important series of public statements have appeared in Australia, and I wish to refer to them as evidence that the opinions that I am expressing to-day are held by a large number of able and responsible men in’ the community, who would not say these things unless they really meant them. The first statement appeared a few months ago in regard to our great meat industry, which was showing signs of distress, and for this the blame, after careful discussion of the whole position, was attached to the difficulties imposed upon the industry by the tariff. A little later we had a remarkable statement regarding the wool industry from Mr. Niall, the chairman of directors of Goldsborough, Mort and Company. That statement has already been referred to in this chamber, and therefore I shall not deal with it at length; but the deductions in it were similar in effect to those contained in the report on the meat industry. Then we have had scathing reports by the Commonwealth Auditor-General and the Auditors-General of South Australia and Victoria on public finance and its influence on public policy. A panicky deputation representing the Industries Preservation League also waited upon the Prime Minister concerning the position of manufacturers who, notwithstanding the fact that their industries have been fully protected were said to be in extremis.
– It was a panicky deputation.
– Yes. Their representations were an admission of the failure of the policy that Parliament has been advocating for so long, and under which we have been imposing a burden upon the people of Australia. Then there is the remarkable publication known as the festo, issued in the Old Country, which points out how intimately the financial and economic troubles of the world are associated with the necessity for greater freedom of trade between the nations. A little later there was the remarkable conference held at Geneva known as the World’s Economic Conference, which met in May of last year, and with which I shall deal later. I may also mention the Tariff Board’s reports of 1926 and 1927, which are extraordinary documents, showing how protection is failing to fulfil the object which it was alleged it would bring about. The explanations of the Tariff Board are rather remarkable, and in some cases somewhat amusing, because, in explaining the necessity for higher duties, they blame everybody and everything but themselves. They fail to see that the trouble has been brought about largely by their own recommendations regarding the needs of industry. There have also been comments by the judges of the Arbitration Courts which again show what an impossible position the policy of protection is bringing about. A few weeks ago the South Australian Government appointed three prominent business men in that State to report upon public finance, and in their report we find points which I have enumerated, strongly emphasized. The Government of South Australia was so impressed with the recommendations of’ these men that the Premier (Mr. Butler) is now convening a special economic conference to study the cause and the best means of meeting the present economic depression.
These utterances may seem to suggest that I am indicating that this country is on the high road to ruin. I do not think that for a moment. I have wonderful confidence in its resources, and the vitality and energy of its people. I know Australia can be made one of the most glorious countries on God’s earth if it is only properly governed. The point I am trying to make is that whatever may have been the original intention of a protective policy - I have no doubt that the men who introduced it seriously and earnestly thought that they were right - it has been clearly shown by a long trial that such a policy is not efficacious, and has not produced the result predicted. If the Commonwealth is to arise to a true conception of nationhood and its responsibilities as a nation, we must have the courage to grapple with those problems which are retarding our progress, and exert sufficient strength of mind, foresight, and courage to amend our ways in the light of experience. In spite of the warnings contained in the statements I have enumerated the Government has shown no inclination whatever to recognize the seriousness of the position. Experience has proved that whenever a country is confronted with economic stringency every effort should be made to use the minimum of revenue consistent with the absolute necessities of government, and to return any balance to the community by way of remissions of taxation. When a country is faced with financial stress the proper course is to enable private enterprise to become stronger and to adjust itself to the conditions which are apparent. I quoted in the House last week a speech of the president of the Bank of New South Wales upon this subject which I need not repeat.
It is for the committee to realize that for four years the Government, in addition to budgeting on a no means niggardly scale, has spent over £.16,000,000 of surplus money. Although the Treasurer boasted of a reduction of over £S,000,000 in direct taxation, indirect taxation has been increased by £17,000,000. To put it in another way the indirect taxation per head in Australia in 1921-22 was £5 0s. 3$d.; whereas in 1926-27 it had risen to £7 3s. 9½d. It has, therefore, overtaken altogether and outrun the growth of population. I have already pointed out on more than one occasion that indirect taxation imposes a burden upon the people equal to at least four times the amount of the actual revenue received into the Treasury. I do not intend to prove that, because it has been affirmed by every student cf the subject. Therefore, if we take the indirect taxation at £7 3s. 9£d. per head, the real burden is four times that amount, or £28 15s. 2d. per head. The indirect taxation of a man, his wife, and three children is, therefore, £143 15s. per annum, which is surely a burden grievous to be borne. That being so, we cannot wonder that the country is faced with financial and economic distress. As a matter of fact, the more we study the subject the more readily must we recognize that, although there are many causes contributing to our present financial position, the starting point of the trouble is our fiscal policy. I wish to show how this is so. First of all, under a protective policy the cost ‘of living is increased. I know the Minister for Trade and Customs will say that that is not so, and that he has shown before that prices of protected commodities have fallen under our present system. Honorable members opposite have also been very insistent upon the fact that if protection is only carried far enough prices must be reduced. There are few such instances which could be quoted ; and whenever one has been, the fact has been revealed that the drop in Australia has been in consequence of an immense fall in prices in the markets of the world. Therefore, the effect of our protective policy is not only to raise prices directly, but also to prevent a lowering of the prices of commodities which, in the absence of such a policy, we should be able to obtain more cheaply from overseas. The cost of living figure to-day is, I believe, 170, compared with 100 in 1911. Therefore, we are still paying practically war rates, notwithstanding the fact that the war terminated nine years ago. Every other country has been labouring strenuously to reduce the cost of its living and production, realizing that it must revert to competitive conditions and face the facts. On the other” hand, we in Australia have been endeavouring to persuade ourselves that it is within our power to maintain the artificial conditions that were rendered possible only by the blockade that was enforced upon our trade during the war. Trade from every corner of the globe is knocking at our doors, but we foolishly shut it out, and decline to act in a way that would make our living cheaper, easier, and happier. The most extraordinary feature is the attitude of the Australian Labour party to the policy of protection. I have made a careful study of the matter, and have obtained particulars respecting the view-point of the Labour party in every leading country. Without exception it is the opponent of high protection in those countries, because it realizes that the duties fall with particular severity upon the labouring man and the man of small means, to whom slight rises in the prices of commodities are a very serious matter. 1 have never been able to understand why the Labour party in Australia advocates a policy of high protection. I believe it is acting against the interests of its own people. The excuse, of course, is that under such a policy higher rates of wages can be obtained. That is one of the great fallacies of the system under which we live. A workman thinks that so long as he can secure higher wages, his condition is being improved. He overlooks the truth of the saying, “While wages climb the stairs prices take the elevator.” Although wages have continued to soar, their purchasing power has decreased. I followed closely the speech of the honorable member for Dalley (Mr. Theodore), on Friday afternoon. He said that the only criterion of effective protection was the exclusion of goods from Australia, and added, “ If it only raises prices it is a fallacy and should be abolished. If it is not effective the Government must take the responsibility.” The honorable member then proceeded to lay at the door of the present Minister (Mr. Pratten) the blame for the existing volume of imports; but he had to admit that that gentleman has at his disposal a battery of legislation, tremendous power, and the sympathetic support of a majority of honorable members for almost any proposal that he cares to make in the way of increased protection. Surely if the system has failed it would be better for us to say, “ Let us get rid of it,” instead of Let us have more of it.” The honorable member for Dalley was obliged to admit that effectiveness could not be secured; therefore, the only conclusion to which one can come is that the tariff is responsible for the raising of prices, and consequently, in the honorable member’s view, is a failure and should be abolished. Instead of arguing along those lines the honorable member suggested further duties, and even went so far as to urge a tax on brains and knowledge, in the form of books. No more foolish tax could be imposed. The raising of prices has a reaction upon the Arbitration Court. That court, as [ have said before, has shown itself to be a logical absurdity, for the reason that no court can fix wages except on the basis of the cost of living, whereas they ought to be influenced by production.
– That is only one factor.
– It is the principal factor. The Arbitration Court has avoided it because it could not adopt any basis other than the cost of living. I do not agree with the absurd recommendation which is sometimes made by the Tariff Board, that a duty should be imposed only on the understanding that the workmen should not ask for higher wages.
– That is an absurd proposal.
– Of course it is absurd. It is also illogical and outrageous. The suggestion is that only one section of the community shall bear the burden of higher duties. When workmen see that r higher subsidy is being paid to manufacturers to enable them to carry on their industry, they do quite right to say, “ We are entitled to a certain share of that subsidy.” One is constrained to take the view that when they make that recommendation the members of the Tariff Board have their tongue in their cheek. They must know that it is impossible to impose such a condition. As a matter of fact, the Government has brought forward proposals for the imposition of the duties recommended, and has entirely disregarded that advice. If the Board recommends the Government to impose such a condition, and it is found impossible to do so, the Government ought not to propose the duty. As I have said previously, the workmen act quite rightly when they claim a share of this public subsidy; but they are unable to obtain it because the court fixes wages on the basis of the cost of living, which, ab a consequence, is further raised. Thus we have the spectacle of these two factors racing each other up parallel step-ladders, and the result is absurdity. Every body sees it ; every body knows it ; but no party has the courage to stand up and say that it must stop. This Government is not merely perpetuating, but also accentuating, the evil, by the imposition of additional duties.
– The honorable member’s voice is as the voice of one crying in the wilderness.
– I scarcely expect the honorable member to agree with me. When the present Arbitration Court was appointed I remember distinctly the Prime Minister (Mr. Bruce) saying it was hoped that it would investigate in a more scientific manner than formerly, applications for higher wages, and would pay regard to economic conditions, so as to determine whether it was economically possible for industry to pay what was asked. The other day Chief Judge Dethridge felt obliged to make the following statement -
This court is unable to find any economic basis upon which it can give its awards. We are, therefore, obliged to meddle and muddle through.
That is due to the fact that we are continually interfering with the awards of the court, and introducing conditions which lead to their being upset. One of the principal factors of trouble is our customs law and administration. The policy of protection is responsible for one of our greatest evils: I refer to the over-population of the cities, and the illbalanced distribution of the population throughout the country. By stimulating industries, which are established chiefly in the cities, we encourage the population to go there. It is lured to the cities by artificial conditions in relation to wages and employment, which cannot be extended to the outlying parts. The result is that the conditions of life in the cities are seriously at variance with those which obtain in the country districts. Such a condition of affairs acts as a hindrance to migration. Huge sums of money are being expended in an endeavour to induce settlers to fill what we call our empty spaces. In round figures it costs about £2,000 to settle a migrant upon the land.
– We are settling precious few.
– We are; and the number will become fewer, because we ask these men to live in places and under conditions that are not attractive. Our policy for years past has been directed towards encouraging life in the cities, and discouraging life upon the land. While that is going on what folly it is to spend huge sums of money on all sorts of fanciful immigration schemes whicn are opposed to the present political and fiscal policy. We are doing a cruelty tv the men whom we induce to come here. Many of the new settlers on the land are merely taking the places of others who found the conditions so irksome that they got rid of their holdings and returned to the city. I heard of one district which boasted of having 71 new settlers, but later had to admit that exactly the same number of older settlers had left the land and gone into the cities. What is the use of spending millions of pounds in trying settle people on the land when our economic policy has the effect of drawing them off?
When carefully studied, this system has an ill effect upon our internal affairs. We frequently hear the statement that it matters not how much commodities cost so long as the money expended on their purchase is kept in the country. This is a glib, but meaningless statement. Money in itself is nothing, but the Government’s fiscal policy, by artificially raising costs and prices, is reducing the exchangeable value of the labour of our people so that we cannot obtain sufficient surplus wealth for the development of our country and are obliged to borrow. The surpluses which labour would otherwise produce and which could be accumulated for developmental purposes are non-existent.If a pipe is corroded, water will not flow through it, because all the pressure is nullified by internal friction. Similarly, this policy of high protection, by creating internal friction, uses up the energy and resources of our people, which should be devoted to furthering the progress of the country. Importations also are increased, partly by’ borrowing and partly by other causes. I do not propose to dwell at length upon the subject of borrowing, and its influence in creating an adverse trade balance. Sufficient has been said already to indicate that this factor is very imperfectly understood and has been greatly exaggerated.Nevertheless the policy of borrowing abroad is unfortunately developing our imports at a rate with which our export trade cannot keep pace. The high customs duties, in conjunction with the awards of the Arbitration Court, cause unemployment. An extraordinary fallacy is current that if the hours of employment are reduced, more work will be provided for those not now fully engaged. The effect of that policy is to cause more unemployment, because it reduces the productivity of labour and depletes that wages fund, from which all labour must be remunerated. Nothing has been more harmful to this country than the erroneous thinking on this subject. I have never been an advocate of the excessive hours and low wages for which men had to work a few score years ago, but when other countries are realizing the necessity for increasing their productivity, for us to reduce the hours of labour, thereby reducing output and raising costs, is to create further unemployment. Similarly, high customs duties, by increasing costs diminish production and the demand for labour. Both these factors operating together contribute seriously to the creation of unemployment. When honorable members prescribe higher duties as a cure for unemployment they are advising a form of treatment which will only aggravate the disease. Honorable members opposite have urged the Minister for Trade and Customs to have this schedule dealt with at once, so that many people now workless may look forward to a happier Christmas. God knows I would like the unemployed to have a happier Christmas than seems to be in prospect for them, but an increase in customs duties will not give it to them. Even the Leader of the Opposition admitted that the increase in duties last year merely relieved the unemployed problem for the time being. By this treatment a temporary stimulus was given to industry, but a reaction followed, and in the end the industry was weakened rather than strengthened. This policy is equivalent to feeding a person on tonics instead of solid food.
Another reason for altering our fiscal policy is that it protects and encourages inefficiency. I agree with honorable members opposite that the blame for inefficiency in industry must not be )aid entirely on the Australian workers. There is a good deal of inefficiency in the management, manifested either in out-of-date processes and machinery or in failure to grasp the economic factors essential to success. I have repeatedly heard advocates of high protection say in this chamber that such and such a company has the most up-to-date machinery and appliances for the cheap and efficient conduct of its business. How have they become qualified to express an opinion as to what is the most up-to-date machinery? They are merely repeating what they have been told by the managements. I have in mind one big plant that is supposed to be as efficient as any in the world, but an expert steel engineer told me that its equipment is laughable when compared with that in up-to-date establishments elsewhere. In another instance, the machinery and plant imported and erected in Australia had been acquired from a company in England which was glad to get rid of its obsolete plaid; in order to substitute something more efficient.
– That is absolutely incorrect. Mention the names of the establishments to which you are referring.
– The honorable member may pose as an expert on machinery; I do not, but I am prepared to take the word of men whose knowledge and experience are sufficient guarantee that they know what they are talking about. “
– To whose plant does the honorable member refer?
– I know of at least two. It is common for honorable members to say that industries starting in this country have the latest plant and machinery, but often that is not so. I have seen some of the plants.
– The experts of the world say so.
– Who are the experts of the world? What means has the honorable member of getting their opinion ?
– I will tell the honorable member their names. That is more than he is prepared to do in connexion with the statements he has mentioned.
– I am not going to mention names for the honorable member to bandy about as I know he would do. The fact is this : Protection in theory sounds well, and will bring about the results desired, if it is applied to one or two, or, at any rate, a very limited number of industries. The public, however, should thoroughly understand that it is going to cost them more; if they understand that, then the policy of protection is no imposition on them. The trouble is that, proceeding from the particular to the general, people arrive at the fallacious conclusion that what is good for one must be good for all. If protection is applied to the whole range of industry the benefits cancel each other. The finished product of one factory is the raw material of another, and the result of universal protection is to send up the price of goods all round the circle, at a cost to the community which it cannot bear. This is the effect produced if protection is applied to more than a very limited number of industries. If one asks what industries it should be applied to the advocates of protection will reply that it should apply to our key industries. If it is applied to any industry at all, the last one it should apply to is a key industry, because that is an industry upon which many others are vitally dependent, and if the price of its products are raised, the prices of all the dependent products are raised also. Then, again, it is said that we should protect the industries necessary for defence in war time. That implies that we are to live in a condition of preparation for, and expectation of war, but I say that every nation should live in expectation of peace. Apart from that, however, what industries are necessary to us iu wartime? Some say, the steel industry; but is that more important to us than the clothing industry, or is clothing more important than food? There are hardly any industries, except those dealing with luxuries, which however small, may not prove of vital importance to us in time of war. The range of protection cannot be limited in that way. Besides, in time of war, the country would be in a better position if we had the nation’s wealth untramelled and unrestricted, so that it might be invested in the things necessary for war, which has always been the case in England. Her position enables her to marshall her resource’s in time of war and meet it when it comes; that is why, as a rule, England is not ready for war when it comes, but is always ready in time to win the last battle, and that is the most 1 important.
Protection is a thoroughly discredited policy. The trials we have made, and the facts and figures coming to light every day, show that there is something wrong with it. It is daily demonstrating its failure. In view of its past history, every fresh application for increased duty is a fresh condemnation of it. It seems almost ludicrous to read that at the beginning applications were made for 5 to 10 per cent, duty on different articles. The applicants said that that duty was not a very high duty, and that when the industry was established it could be taken off. The imposition of those duties was followed by further impositions of 15 per cent, and 20 per cent., and then of others up to 30 per cent., 40 per cent., 50 per cent., and even 100 per cent., while in some cases the rate is as high as 200 per cent.; and this sort of thing is still going on. Still the industries complain “not enough, not enough “ ; their cry is that of the daughters of the horse leech, “ give, give.” Where is it all gating to stop? The Minister for Trade and Customs (Mr. Pratten) the other day resented the implication contained in a letter written by the chairman of 6. “A. Bond and Company in regard to the failure of that firm. The firm said that its failure was largely, though perhaps not entirely, due to its not getting increased protective duties. I do not wonder that the Minister became indignant. Increased duty! Already there is a duty of 60 per cent, on the class of goods produced by this firm, and that is not sufficient for them, while on top of that a bonus of £45,000 was paid in respect to manufactured goods during the year. A few months ago, when the company made application to the public for increased capital, it tried to show that its financial position was sound, and that it had made a profit of £55,000 in the year. When it wanted to get fresh capital from the public it could put up a pretty tale of successful trading, but when it wants increased duty, it makes the pitiful plaint that it is impossible to carry on. At last this firm is exposed, and its employees are threatened with loss of work. It is because of trouble of that sort t6 working people that I raise my voice now, because the working people are being gulled into a false sense of the position -1H which protection will place them. Now this firm has the audacity to say that, in spite of high duties, and in spite of 7.he. bounty which a bountiful government has paid to it, it is unable to carry on because the duties are not high enough. The same sort of thing is revealed by Some of the Tariff Board reports. If honorable members will read those reports quietly and dispassionately, they will not fail to observe the absurdity of some of the recommendations made. The reports sketch the history of a firm, stating how successful it has been, and emphasizing the profits it has made. In one case a report stated that a certain firm already has 86 per cent, of the Australian market, and yet the board proposes that it should have a further protective duty. What justification can there be for things like that?
In addition to its failure as a practical policy - and I submit it has failed and is failing lamentably - protection ‘has a bad effect on our public life. I want to quote two statements on this point. One is made by Professor Page, chairman of the Tariff Commission of the United States of America, in a book entitled Making the Tariff in the United States of America. In this book he describes the method by which high tariffs are attained through the board. He says -
They are attained by liberal campaign contributions, by expensive and misleading propaganda, by costly and expert lobbying, and hy astute distortion of evidence.
It would be easy to quote instances of all those things in this country, and these tilings are not making for purity in our public life, but are a degrading influence. For some months past, on many of our railway stations, there has been an elaborate system of advertising indulged in by a certain firm. Posters are displayed which depict two anxious parents bending over their son, who is studying a book. The poster bears this caption, “Where will your son get a job? Every boy cannot be a farmer.” It extols the excellency of secondary manufactures, and shows how they ought to be encouraged. This firm, which is so anxious about the future of the boy, and which points out that everybody cannot be a farmer, has shown its interest in this matter by discharging the whole of its night staff comprising 112 men, and retaining the girls. It is propaganda of this sort which is corrupting and degrading public life, and which the protectionist system encourages and permits. I wish now to read a statement made by Mr. T. F. Bayard, formerly the ambassador of the United States of America to Britain, when speaking at the Philosophical Institute in Edinburgh. He said -
In my own country I have witnessed the insatiable growth of that form of State Socialism, styled protection, which, I believe, has done more than any other cause -
To foster class legislation and create inequality of fortune;
To corrupt public life;
To banish men of independent mind and character from the public councils;
To lower the tone of national representation ;
Blunt public conscience:
Create false standards in the popular mind;
To familiarize it with reliance upon Stateaid and guardianship in private affairs;
Divorce ethics from politics, and place politics upon the low level of a mercenary scramble.
That is a withering condemnation by a representative of one of the greatest protectionist countries in the world of the policy which we are trying to carry out and extend in this country. This policy is also becoming one of increased importance in connexion with our relations with other countries, and with other parts of the Empire. This very schedule embraces proposals for increasing’ British preference. This question of Imperial preference is one which ought to be given careful consideration by honorable members. In July, 1923, I spoke in this House at length on British preference, and again on the Government’s proposals to increase the proportion of British labour or materials from 25 per cent, to 75 per cent., entitling such goods to preference. On both ‘ occasions I said that the system was illusory in its benefits and entirely insincere in its methods. I doubt if what I am saying is likely to make the” slightest impression upon certain honorable members; but that is a matter of indifference to me. I intend to state my views on this important issue, irrespective of any other consideration, because I am now speaking to a much larger and a much more influential audience than that within these walls. The people of Australia expect the position to be placed frankly before them. They should not be able to plead ignorance as to the consequences of this tariff, of be led astray by it.
I have already said that imperial preference is illusory in its benefits, and insincere hi its methods. This is now being recognized in Great Britain. I am afraid that I shall have to trespass upon the patience of honorable members while I read a number of extracts on this subject from journals published recently in England. In the trade and engineering supplement of the London Times, of the 6th August last, there appeared the following paragraphs -
In an interview published in The Times last week, Mr. Pratten, the Australian Minister of Trade and Customs, made some surprising statements. It will come as a shock to many British citizens to find that Mr. Pratten likens their attitude to that of Oliver Twist, who had the temerity to ask for more. Possibly Mr. Pratten overlooked the fact that Oliver had hail an insufficient ration and, therefore, had an extremely good case, but most English people are under the impression that of late Australis! has been showing a disposition to reduce the generous allowance formerly made to British trade, and that the present position is th-is the wool and other industries would be only too glad to go back to the conditions ruling before Mr. Pratten revised the Australian Tariff.
Mr. Pratten made no secret of his belief thar the bounty of nature in showering raw materials on Australia put that Continent in a position to develop practically every essential industry, and that Australians were determined to develop them as quickly as possible, “using the tariff” as the quickest and best method of stimulating their growth. He insisted, however, that Australians were enthusiastic loyalists and expressed his own belief, that, in the preferential treatment given to products of the Mother Country through the tariff, it was possible that further development might take place in the direction of Imperial trade cartels. He added that, povided her national development was not arrested, he believed Australia would do everything possible to protect Imperial tracks against foreign aggression, and suggested that the thought was well worth pursuing in the interests of the Empire. It is not quite clear what Mr. Pratten meant by Imperial trade cartels, as he went on to say that it must be realized that “ our first duty is to Australia and not to the British trader, whose only m forest in us concerns his profits on the goods: which he sells.’’
On the 20th August the same journal stated -
Coming after the rather narrow views of Mr. Pratten, to which we drew attention recently, the speech at Newcastle-on-Tyne by Sir George Pearce, Vice-President of the Executive Council of the Commonwealth of Australia, is very welcome. He had, he said, been impressed with the growth of Empire consciousness in Great Britain -
I wonder when Great Britain was ever unconscious of the Empire? and went so far as to declare that in Australia they ‘would have to adopt more vigorous measures if the)’ were to keep pace with the people here. He expressed his appreciation and gratitude for the steps taken by the United Kingdom to assist the marketing of certain Australian products, but he frankly admitted that in Australia duties have been imposed on imports with the object of shutting them out and giving the Australian market to the Australian manufacturer.
In addition, practically all Britishmanufactured goods imported, whether such article are manufactured in Australia or not, receive a preference of from 10 per cent, to 20 pur cent, over the products of foreign competitors. Sir George Pearce characterized as foolish the idea that it is not only possible, but advisable to build a wall of exclusion around Australia and to shut out people and goods. Equally foolish is the idea that migration means un: employment, but he insisted that these views were not shared by the majority of Australians, and declared that nothing was more likely to prevent the spread of such pernicious? doctrines, and to encourage good will towards a more determined migration policy, than the realization in Australia of the determination of the people here to assist Australian development by helping to market and sell Australian goods. We hope Sir George will, in duo course, give his fellow-citizens the reverse of the story. He should point out to them that nothing is more likely to discount the efforts made to popularize Empire produce here than hick of sympathy towards British exports, whether expressed in tariff legislation or public speeches.
Mr. Walter Runciman, speaking of these mythical gifts from Australia to Great Britain, said -
If we are to be told, as we are very often, that the preference given is a gift to this country, let us see how it is measured. I think Mr. Bruce estimates that it is a gift of eight million pounds, and in his valedictory speech before he came here he once more made remarks about this gift of eight million pounds That eight million is calculated on a. rather curious basis. You take first of all the tariff imposed on foreign goods, and then you taKe the . tariff imposed under the preferential duties on British goods; and the difference between the two comes to eight millions. Therefore, says Mr. Bruce, that is a gift to Grout Britain of eight million pounds. Let us see what would happen if the tariff on foreign goods were doubled and the tariff’ on British goods remained somewhat where it is. You can easily see that the gift might be represented, not as eight millions, but as eighty millions. The fact is that it is impossible to measure what is inaccurately called the “ gift.” The main object of the tariff is to overcome the competition of all other countries in the world, British as well as foreign; and if the burden put upon the British manufacturer is less than that on the foreigner, that is not a gift made to Great Britain, it is only an advantage given to certain British exporters and manufacturers which is not given to others. These are individual privileges given to individuals. There is a selection of individuals. There is no gift to the nation. (Cheers.) The less Australian representatives talk about gifts the better. Let me. if I may, through the means of this audience, refer to the subject of the greatest gift from the Government of Great Britain, and that is the gift of Imperial defence. In Imperial defence it is still this country which bears the lion’s share.
In consequence of duties which were imposed by the last schedule, the Australian and New Zealand section of the London Chamber of Commerce, wrote to the Sydney Chamber of Commerce, respecting the effect of the Australian tariff on British trade. The memorandum, which was endorsed by the Council of the Chamber, stated- “ The campaign which has been inaugurated by the Empire Marketing Board to induce the housewife in this country to buy Empire produce, even if she has to pay rather more for it, is meeting with a considerable amount of success.” The momorandum proceeded : - “ It is, therefore, all the more dis- appointing to those of us who are pushing this campaign in Great Britain that it should receive a severe check from time to time through the action of the dominions themselves. It is useless to ask English workpeople to buy Imperially, regardless of other considerations, if they are to be put out of work by having the products which they themselves manufacture excluded from Empire markets.” Examples were given of the average prices of various English textile manufactures, the Australian duties on them, and the consequent resulting prices in Australia.
The Secretary of the London Chamber of Commerce has now received a letter from Mr. J. N. Bell, secretary of the Sydney Chamber of Commerce, dated 7th September, stating that the memorandum was referred to a subcommittee of the Chamber, and that the following reply was adopted by the Council of the Chamber : - “ While we appreciate the action of our Federal and State’ Governments in inaugurating an Empire marketing scheme, for the purpose of inducing consumers in the United Kingdom to use more extensively Australian products, we also realize that Australia has imposed unduly high duties on many imports The fact should not be overlooked that almost all British goods imported from the United Kingdom enjoy preference in the tariff rates ; even so, the duties on most British manufactures still run unreasonably high. We cannot, however, disregard the fact that the volume of imports of manufactured goods into Australia has increased notwithstanding these high duties.
So long as Australia continues borrowing money heavily from Great Britain and America and exports its surplus products mainly to Europe, it must accept from these countries imports on a correspondingly high scale - regardless of cost. An increasing number of Australians is realizing that the abnormal duties have created an artificial and uneconomic position.
The illustration in the London Chamber’s report is one of many ‘which could be given. Whether the present duties shall bo maintained or altered is a political question. As Australian people are beginning to see that high duties are largely responsible for the excessive cost of living, also for the abnormally high costs of locally-manufactured goods, the tariff is becoming a live question within the Commonwealth.
In many directions throughout Australia strenuous efforts are being made to induce our Federal Parliament to reduce the tariff - especially for imports of machinery and other articles used by primary producers. It has been shown that these producers are, because of the tariff, heavily handicapped as compared with similar producers in other countries which compete with Australia in oversea markets.
We will bring under the notice of our Prime Minister the memorandum of the Australian and New Zealand section of the London Chamber, hoping that it will induce him and party to view this question in the same light as you do.”
It is added that the Council of the Sydney Chamber has approved of a copy of the reply being forwarded to the Bight Hon. S. M. Bruce, the Prime Minister, for his favorable consideration.
The Melbourne Argus of the 25th November, commented on the present schedule in the following terms -
Much has been made by Mr. Pratten of the advantage that he is offering the British manufacturer in the shape of additional preference. Here, again, his policy of taking away with one hand what he gives with the other is repeated. Of this there are many notable examples. Leather cloth was, for instance, dutiable at 5 per cent. British preference, and at 10 per cent. .and 15 per cent, against the foreigner. The new duties are 20 per cent., 25 per cent., and 35 per cent. No doubt Mr. Pratten’s generosity will be warmly welcomed by the British manufacturers, whose goods will be subjected to a duty of 20 per cent, instead of 5 per cent. His compensation is a trifle higher preference against the foreigner. Many other “ concessions “ could be quoted. Examination of the whole of the alterations leads to one conclusion only. It is difficult, if not impossible, to run with the. hare and hunt with the hounds. Mr. Pratten professes to have framed duties which will encourage the Australian manufacturer, and will at the same time enable the British manufacturer to extend his trade relations with the Commonwealth. He increased the duties on a variety of British goods, but at the same time his preferences are slightly increased. No one will be pleased. The entire schedule reveals an utter lack of thought for the consumer.
Speaking in the House of Representatives on 11th August, 1920, he said - “British industry was suffering severely owing to importations into Groat Britain of European steel manufactures. The quantity of iron and steel imported into Great Britain last year amounted to approximately 1,500,000 tons, valued at nearly £8,000,000. The same invasion that was crippling British steel interests also menaced Australia. The Ministry felt that it must do something to meet the competition of the gigantic German steel trust which had been formed to develop the export trade of that country. Members would appreciate the condition of the iron and steel industry in Great Britain owing to German competition and to the disastrous coal strike. Even if the strike was settled soon, it would be some time before the British industry would have recovered from the blow. In those circumstances the Ministry felt that there was no real urgency to deal with the British preference schedules, and that consideration could be postponed until next year. Tie gave a definite promise on behalf of the Ministry that members would have the opportunity of considering British preference rates which should be provided to safeguard the industry against British competition.” Mr. Pratten has waited until Great Britain has shown signs of recovering from’ the blow of the general strike, and he thinks that the time has now come to give her another kick. The pity of it is that he should attempt to -excuse his action by hypocritical professions of an earnest desire to foster the trade of the Motherland.
One more extract, and I shall have finished. The Sydney Evening News stated -
As to the gesture of increased preference to Britain, this is a mockery. Thus Mr. Pratten declared that the preference to British manufacturers of steel rails is increased. This is gratifying, but how? By increasing the duty against those British rails by 15s. a ton, while the general tariff is increased by 25s. a ton. Mr, Pratten increases the duty against British rails, so as to keep them out of Australia, and then declares that he has given them a preferonce by making the duty against rails from other countries still higher. If British rails are kept out, what comfort is it to the British manufacturer that other rails are also kept out?
Is that preference? The principle of Imperial preference must embrace the whole Empire, but the tariff schedule before us contains specific duties levied admittedly against New Zealand, while the whole history of tariff relations with South Africa, New Zealand, and Canada, as an example of imperial sentiment, is not particularly edifying. One of the most extraordinary statements concerning the Government’s policy that has come to my hands recently is contained in an official report concerning foreign affairs. These reports are regularly issued by the Prime Minister’s Department, and there is a file of them in the Parliamentary Library. This particular report is on that file. It is headed “ Geneva Economic Conference,” and was issued on 9th November, 1927. As I shall show, the attitude of the Government towards the Economic Conference has been one of contemptuous disregard. This report circulates among the press, schools, and universities throughout the Commonwealth. The introduction to it rather minimizes the importance of the Geneva Conference so far as Australia is concerned, but it goes on to say, “Australia’s economic policy is based on (1) Self -development, and (2) interimperial f freetrade and reciprocity.” “With freetrade. there would surely be no need for reciprocity, but still we have the declaration that the Australian policy i3 inter-imperial freetrade. I do not know where the policy was framed, or when approved. I am beginning to wonder how policies are framed, how they get their birth, and how they spring to adult life. I certainly should have no objection to inter-imperial freetrade, as part of general free trade, but how can a government be sincere when it issues a statement like this, broadcasts it throughout Australia, and then introduces a tariff schedule increasing the duties against British goods? That is a glaring example of the insincerity and unreality of this alleged imperial preference. I should like to know whether the schedule is the outward and visible sign of the inward and spiritual grace of imperial loyalty. If so, it is certainly manifested in a curious way. The Government, by preaching with one voice high protection and with another imperial freetrade is making a hopeless attempt to reconcile two mutually destructive policies. What an extraordinarily ungenerous spirit these increased duties indicate. We have taken advantage of the generosity of the Imperial Government by establishing an Empire Marketing Board, whose object is to carry out a campaign to induce English people to buy Australian goods. A large amount of money has been expended on that project. Over and over again I have received letters from Englishmen stating that the people of Great Britain are getting thoroughly disgusted because, while meetings are being held there at the instigation of the Australian Government to improve Empire marketing, itis imposing at this end duties against British trade. I have already referred to the loans issued to us by the Imperial Government to further immigration. We are asking for and getting every assistance to develop this country, yet our response is a stab at British trade whenever we get the chance.
– Should we not build up a trade of our own?
– I see a grave danger in the proposal to build up an imperial selfcontained trade, but I shall deal with that later. If I were the Minister I should not consent to one increase of duty against British goods; The Mother Country is having a difficult time. We owe much to her, and we are doing little credit to ourselves by adopting this hostile policy against British trade and industry.
– Our policy is anything but hostile.
-I cannot understand the honorable member’s views, because the tariff policy is distinctly hostile to Great Britain. One has only to refer to the statement by the Minister himself concerning the iron and steel duties that we are just as much concerned in preventing British manufacturers as in preventing foreign manufacturers from doing business with Australia. We are piling the duties to a height which we think will be effective against British trade. That is the first consideration.
-It has notbeen the effect in the past.
– I am speaking of the intention and not of the effect of the ; tariff. Hostility is rife in this schedule, because its intention is to stop English trade, and it is to-day stopping it to a great extent. When that endhas been achieved then the higher dutiesare scheduled against foreign trade. This slogan of imperial preference is like the Trojan horse, fair seeming and friendly in appearance, but containing in its bowels the very elements of hostility and hate. Hostility is founded on hate, and there is in this country on the part of a large number of people hatred of the success pf British industry and jealousy of her enterprise.
– There is no hatred of British industry.
– I cannot interpret the Government’s policy in any other way. We have only to read the speeches of public men. If we put our interests first we shall be taking very good care not to help the British Empire. Our whole attitude is hypocritical and insincere. That has been evident in the past, and there is no change to-day. What is the use of such farces as that which, according to the press, took place at the Manision House a day or so ago, where public men mixed the King’s pudding made of Empire products, as part of the propaganda to increase the sale of Empire goods in Great Britain, while we, at this end, are piling up duties to prevent the expansion of British trade?
– Is not our first duty to develop the trade of Australia?
– We owe an immense obligation to Great Britain, and we depend upon her for our very existence. As Mr. Runciman has said, the great burden of imperial defence is almost wholly borne by Great Britain, and from a sense of loyalty we have no right to repudiate our family obligations by hindering British trade in the way that We are doing. The evil or immoralityof the protectivesystem is that it must prevent the entry into this country ofgoods of other countries, and we therefore cannot escape the fact that we are trying to prevent the entry of British goods.
The most important aspect of the policy of protection is its effect uponour international relations, and in this respect I refer honorable members to the great
Economic Conference which took place at Geneva in May last. For a long time the efforts of the League of Nations towards effecting international disarmament have admittedly been a disappointment to those who are deeply interested in that project. At most of these conferences there has been much talk, but little result. Those in the League itself who have studied this subject have been gradually forced to the conclusion that before physical disarmament can be brought about mental or moral ddisarmament, including, of course, commercial disarmament, must first be attained. In consequence increasing efforts have during the last two or three years been made by the League to bring about international agreement on economic questions, and last year a preparatory committee was appointed by the Assembly of the League to prepare the way for a great world Economic Conference. It will be remembered that, the agenda for that conference, as suggested by the preparatory committee, was the subject of discussion in this Parliament over twelve months ago. The committee ob- tained a most remarkable collection of documentary evidence from experts and financiers throughout the world, supported by the international chambers of commerce, and the co-operativesocieties of Europe, representing about 50,000,000 members in Europe alone. It would be no exaggeration to say that this conference was probably the most important that the world has ever seen.It was supposedto be a gathering not of politicians, but of economists and experts, who were to give judicial consideration to the questions submittedto them. Fifty nations, represented’ by 194 accredited delegates, who were accompanied’ by 157 experts and advisers, attended the conference, which has been described as the largest world conference ever held. Two hundred representatives of the world’s press also attended, and. at a subsequent conference at Geneva Lord. Burnham urged upon those presentthe necessity of the press giving more attention, publicity, and support to the recommendations of the GenevaConference than it had hitherto done: The conference which sat foraboutamonth arrived at some very important conclusions and presented a wonderful report. As I have said, it was purely an advisory conference of experts, and it was understood that the subjects were to be discussed without political bias or any view to political advantage. The conference submitted a number of conclusions, two or three of which are most important. One reads -
Also, that the attempt to attain selfsufficiency is an unattainable ideal for most nations, that it is a mistake to suppose that it is always more advantageous for a nation to diminish its imports than to increase its exports, and that excessive protection, which reduces national production and purchasing power, in the end defeats its own object.”
The report refers, also, to the false ideal of basing revenue upon high duties, which, it says, has placed some countries in a precarious position, and continues -
The attempts after the war to seek prosperity by a policy of economic isolation, have, after an experience of nearly nine years, proved a failure. The opinion of the world is beginning to understand that prosperity is not something which can be enjoyed in small compartments.
– From what document is the honorable member quoting?
– I am quoting extracts from the report of the Geneva Economic Conference.
– Has that report been tabled?
– It has been tabled and printed, together with the report of the Australian delegates. I have also a copy of the official report issued by the conference, which Ishallbepleasedto hand to the right honorable member if he desires to read it. The recommendation continues -
No machinery forthe settlement of inter- national disputes can be relied upon to maintain peace if the economic policies of the world sp. develop as. to. create, not only deep divergencies of economic interest between the different masses of the world’s population, but a senseof intolerable injury and injustice.” The Conference declares that the time has come to put an end to this increase in tariffs, and to move in the opposite direction.
Mr.G. Francis.:- How many freetrade nations were represented in the 50 mentioned by the honorable member?
– About three or four.
– America, which imposes higher customs duties than any other country in. the world, should set an example to other nations.
– Australia, and not America, imposes the highest duties. The conference submitted important decisions upon the three main questions with which it ‘ dealt, namely, commerce, industry, and agriculture. It carefully considered the conditions in every country, and concluded that the world is over-industrialized. In effect, too much attention is being given to the establishment of secondary industries, which are being encouraged to the detriment of other industries. This results in much economic waste.
– The representatives of industrial nations say that because they do not want further competition.
– -That is not so. This section of the report is particularly well worth reading, as it shows that agriculture, which is in a depressed state all. over the world, is neglected. The report states -
Agriculture is the occupation of the majority of workers throughout the world; its various products represent in value the greater part of human labour, and the exchange of its products against industrial products forms, indeed, the basis of world trade.
If honorable members will read the report on the subject they will realize how the agricultural industry is suffering. It shows how agriculturists are compelled to submit to a lower standard of wages and conditions than those engaged in other industries, owing to the pressure to which they are subjected and the manner in which they are neglected. As the report is one of the most important issued I wish to discuss the Government’s attitude towards the decisions reached, and to the subsequent development of questions arising out of the conference. The conference was supposed to be nonpolitical, and to consist of economic experts.
– And was it not?
– In the main it was. Unfortunately ,our principal delegate was not permitted to act as a non-political representative. Although the Government was entitled to send five delegates it sent only three, and of that number only one was selected and instructed^ before he left Australia. The other ‘two were apparently obtained under a method which is becoming rather common, bysecuring the services of two Australians visiting the continent. In his speech, the principal Australian delegate expressed the views of the States.
– Was that Sir David Gordon ?
– Yes; and I quote from his speech accompanying the report of the Australian delegation which is attached to the papers laid upon the table.
– Sir David Gordon was an able representative.
– 3 am not questioning that, but the attitude of the Government. I feel convinced that Sir David Gordon would hardly have given utterance to the opinions he expressed had he not received instructions to preserve the political independence of Australia at the conference. He said -
Several declarations of fiscal faith have been made, and it becomes necessary for me to point out that Australia is committed to a protectionist tariff on at least two grounds - the building up of essential industries in a commercially young country, and for revenue purposes. Whatever may be the necessities of Europe, the requirements of Australia and the policy of tha<t country must be left to Australians themselves.
That utterance embraces one of the inconsistencies commented upon in some of the speeches subsequently made. It was not a political gathering, but was supposed to consist of independent experts considering economic questions. It was an advisory expert committee, and its findings were to be forwarded to the different governments for an expression of opinion. It is wrong for the representatives of the government attending such a conference to be instructed in such a way that they could not have an open mind. Notwithstanding the statement I have quoted, the findings of the conference were unanimous. Every nation signed the report. When such an attitude was adopted, how could our- delegate sign a report which said that we ought to review the tariff? But he did sign the report. The important aspect of this matter is that whilst the report of the conference has received “world-wide attention, it has received very little consideration in Australia. The Prime Minister (Mr. Bruce), who, apart from the brief reference in the press to the document, to the effect that the conditions in Europe do not affect Australia, has not made a public . statement concerning an important international finding. It is true that we have been supplied with mimeographed circulars from the Prime Minister’s office concerning this conference with other members of the League. Subsequently, at a conference on customs prohibitions following the Geneva Conference, the Australian representatives again said that it did not matter what decisions were reached, Australia intended to adhere to its own opinions. The report of the speech of General Ryrie, as published in the Melbourne Herald of Friday, the 21st October, was in words similar to those used by Sir David Gordon. An announcement has since appeared in the press to the effect that Australia’s attitude towards the second conference is to be one of indifference. Since then. a conference consisting of SOO delegates of the Chambers of Commerce of the world, met at Stockholm, and has unanimously approved the recommendations of the Geneva Conference and submitted a detailed report. Notwithstanding this, the Commonwealth Government has not taken any action to carry out or even show respect to the decisions of such an important conference established under the auspices of the League of Nations. By the proposals now before the committee, it is exhibiting an utter disregard of the decisions reached at that conference.
– How many nations have taken action?
– I was just about to inform the honorable member. The conference was held in May, and immediately it concluded its deliberations the German Government took the report into consideration and passed the following resolution, which has been published -
The Federal Government approves the whole report of the World Economic Conference, and agrees with its resolutions. It is prepared to co-operate energetically towards the realizations of the recommendations and initiatives of the World Economic Conference.
. . It considers it urgently desirable that the labours of the League of Nations necessary for the realization of the conference’s resolutions should be speedily taken in hand and carried through.
The German Government instructed the Economic Council of the Reichstag to immediately prepare a new tariff to give effect to the findings of the conference.
– Has it done so?
– It is doing so at present. At the meeting of the Council of the League of Nations on the 16th June, Dr. Stresemann reported the above decisions of his government. He emphasized the finding of the conference that “ The time has come to put an end to an increase in tariffs, and to move in the opposite direction.” He urged that the League of Nations Council which had convened the conference - lies under a strong moral engagement to do everything in its power to see that these recommendations are embodied in the actual economic and commercial policies of the governments of the world, and particularly of those which each of us directly represents on this council.
Seven of the other nations on the Council of the League gave their assent to those recommendations; Great Britain was the only nation which appeared to boggle at them. Doubtless, Great Britain’s representative was influenced in his decision by two considerations; first, the attitude of the dominions; and secondly, the fact that the present Ministry in Great Britain is trying hard to introduce a considerable measure of the pernicious system of protection, in opposition to the findings of this very conference, the prejudices of its own people, and the promises it made to the electors. It appears as though the other nations of the world realize the value of these decisions and are endeavouring to give effect to them.
– Great Britain is still practically freetrade, whilst their policy is protection.
– I am afraid that the honorable member is not aware of the extent to which it is being sought to introduce protection into Great Britain. I agree that there is room for a considerable reduction in the tariff of almost every country which adopts the report of this conference. It is clear, however, that those countries which have protection are beginning to realize its disadvantages, and are exhibiting good sense in trying to get rid of it. This matter affects in an important way our relations with other countries in the League of Nations. The conference brought forward certain recommendations, and the Economic Committee of the League is endeavouring to carry them out. Many of the nations are prepared to co-operate, and it seems that only the British Empire stands in the way of the realization of those ideals. That isa sorry spectacle. If it is largely on account of the attitude of Australia or the other dominions, we must seriously consider whither we are tending.
– Which nation is carrying the world’s burden to-day?
– I do not see the relevancy of that question ; but I ask the honorable member what part are we playing in world politics, and how are we influencing the Empire? What is our conception of our relations towards other countries in the League? We make vague references to our having entered the League as a new nation, untrammelled by old intrigues and inherited hostilities. We speak as though we carry with us into the counsels of the League an atmosphere free from the heritages of the past and are endowed with qualities that fit us to teach the older nations how to conduct their business. We propose to teach them new and better ways than those which they now employ.
– I cannot remember having heard an Australian boast that we were going to do that.
– I have heard frequently in this chamber speeches to that effect, especially in connexion with disarmament. Yet when this important proposal, which would be more effective than any conference in bringing about disarmament, is placed before us, we stand aloof, disown the moral principle that we have been so eager to inculcate, and wash our hands of all responsibility. We are acting foolishly, because a likely development is that the trade dominance of Europe will be given entirely into the hands of Germany. Germany is to-day governed by a man of considerable foresight. I do not care what opinions other honorable members have of him, I believe that to-day, Dr. Stresemann is one of the greatest statesmen in Europe, and is doing wonderful work to bring about peace and a good understanding among the nations, and to retrieve the folly which his country committed in the Great War.
– What person is in a position to determine who are the great financial or economic experts in the world to-day ?
– I should say those who themselves have an extensive knowledge of finance, and enjoy a world-wide reputation on that account. When great economists like Sir George Paish, Sir Josiah Stamp, and others who are recognized all over the world as authorities, are chosen, one may be sure that they are the best judges of economics.
– I asked the honorable member that question merely because be asked the honorable member for Newcastle a similar one.
– They received the assistance of the co-operative associations of Europe, which are large business institutions, and know the men with whom they are dealing. The chairman was Mr. Layton, the editor of the London Economist, and a world-wide authority on economics. There were many others of the same stamp.
The mental and moral disarmament which we all desire is a necessary preliminary to physical disarmament. 1 maintain that the attitude we are at present adopting with respect to commercial matters will eventually, though not immediately, sow the seeds of discord. We are not playing the game with other countries, and we shall have them arrayed opposite to us. We are not recognizing obligations that must be mutually observed. Wn are sowing the seeds of national hostility and national hatred. Only the other day, I received a very remarkable letter from a gentleman in Japan, the head of a large manufacturers’ association in Osaka, whom I do not know, and of whom I had not previously heard. He happened to read one of my speeches. The subject of his letter, which is written in somewhat quaint langauge, is trade relations between Australia and Japan. He says-
Australia is literally the neighbouring State of Japan beyond the sea, and we must do our best to improve the facilities of mutual intercourse and communication. In the midst of the European war, when Australia despatched her troops to Europe, Japan placed them under the escort of her fleet. It is that fact which explains our friendship and mutual aid by giving an example. But now Australia has broken up our friendliness.
His reference is to tariff decisions that have been given against Japanese goods. He continues -
Under such circumstances, we earnestly want to leave this to the thoughtful men of your Commonwealth to judge what result mightbe produced.
– Is not Japan a highly protective country?
– In some respects it is; but not nearly to the same extent as Australia. Tlie policy of protection is bad wherever it is enforced ; but its effects are becoming more apparent in Australia because it is here being carried to its logical conclusion. Another result of the adoption of this policy by Australia, and of the operation of the alleged British preference towards Australia, is this : - It is being suggested that the world should be divided into regional tracts, that zollvereins should be formed, one comprising the European area - which would be very powerful - another the continent of America, and a third the British Empire. I ask honorable members to consider the implications. Under such a scheme the world would be divided into three camps that from the outset would be commercially hostile, and that, before very long, would almost certainly become hostile in another sense. The last war was essentially a trade war; it was brought about by trade rivalry. Tradewars have been the cause of most of the trouble which the world has experienced. When the honorable member for Dalley (Mr. Theodore) referred to freetrade as an antediluvian policy, he showed that he lacked not only historical knowledge but a sense of historical proportion. Protection is the bad old system, and an inheritance f rom the past. Ithas been in existence for over 4,000 years; but freetrade was devised as a definite system little more than100yearsago.
– Freetrade is not historical, but hysterical.
– Then it ought to commend itself very highly to the honorable member. Freetrade is the . new. the modern thought; and it is the best thought in the world,because it is devoted tothe preservation of international peace. Under it, goodwill and understanding are promoted among the nations.
Protection, on the other hand, promotes hostility. When,in the earlydays, the Phoenicians sailed the coast of Europe as traders, they had tolls levied upon them by the rulers of the nations, out of a protective instinct.
– It was not a protective but a money-making instinct, which is a vastly different thing.
– The honorable member sees nothing but good in protection. I see in it nothing but a sordid, money-making system. Clothed in pseudo-patriotism, andexploiting all the best instincts of the people, protection is, nevertheless, nothing but a greedy, money-making system for the benefit of the few. I desire to see Australia play its part worthily in the League of Nations’; but it will not do that by high-flown phrases and merely rhetorical allegiance tothe principles of ‘the League. Let us show our earnestness and sincerity by doing some of those things which the other members of the League are asking us to do. We shall achieve no good by a selfishattitude, claiming to be independent of the others in the League in tradematters, and yet expecting to have our counsels in world affairs heeded. There is much trouble ahead of the world. We hear Tumours and see indicationsof impending war. If we are serious in our professed desire for disarmament, let us demonstrate it by helping forward the movement inaugurated inthis great gathering ofthe nations to promote “on earth peace, good will to men.” Reciprocal tradewill help towards the realization of that grand ideal, for it establishes an international relationship that can be of advantage to both parties to it. The idea of some honorable members, that by trading with other people we do ourselves an injuiry, is ridiculous. Trade brings benefits to us, and if we shut: off our trade with the rest of the world we shall do harm to ourselves. The very state of mind which inhibits any policy that would be of benefit to other countries shows that our system of protection is based upon hostility to the rest of the world.
– Extendthat argument and show us the benefit of trade with America? She sells tous four times as much asshe buys from us.
– Perhaps the honorable member owns a motor car?
– I neither own, nor desire to own, one. But, if I were buying one, I would buy a British car.
– The honorable member would be quite within his rights in doing so; but he should not condemn another person who thinks he can get better value for his money by buying the product of some other country. I do not say that he would get better value; but he is entitled to follow his own judgment in that matter. I have no sympathy with the proposals for foisting British commodities of an inferior character upon* this country.
The evils of the protective system, in its reactions upon our own community, its effects Upon our imperial relations, and its implications concerning other nations, are intensified by the methods of administration. I regret to have to criticize the Minister. He may think that he is doing right, and if I criticize his administration I do not question his integrity. But I doubt his capacity to judge what is the best for this country. Some time ago I aroused considerable feeling in the House by referring to the Customs Department as an Augean stable. An endeavour was made to construe that statement into a reflection upon a lot of worthy officers. It was nothing of the sort. I was referring to the chaotic state existing in the department, the multitudinous rules, regulations and interpretations with which the department is encumbered and traders are handicapped.
– The honorable member admits that the statement was strong.
– It was intended to be strong. The Hercules of the Ministry took up the challenge by saying that he would simplify procedure, clean up the department, and remove the causes of complaint. I am sorry to say that he has not done so ; conditions are not improved and procedure is more complicated than it was. There are more orders and interpretations, and the Minister’s discretionary power is exercised in extraordinary ways never intended by Parliament, and not justifiable. I have before me two instances in which the Minister has by interpretation or decree, entirely altered the form of the items and the rates of duties pres’cribed by Parliament. I referred a few days ago to chemical manures, and particularly diammon phos. To those representations I have received no reply. Since then another instance has come to my notice. A ruling has been issued which actually recasts the item in the tariff and puts it in a form entirely different from that in which it was passed by Parliament.
– What is the item?
– Nitrate of soda ; and the decision is No. 27/648.
– Perhaps the honorable member will tell the committee what was done.
– -Under the item approved by Parliament nitrate of soda - Chilian nitrate - was subject to a certain rate of duty. The Minister has decided that it shall be admitted at that rate only if it complies with a certain chemical standard. He has prescribed two rates and created two items out of one.
– I daresay the Commonwealth Analyst had something to say about that.
– But the Minister is responsible.
– I accept the responsibility.
– Very often in the administration of the department the interests of one firm are disclosed to its commercial rivals. A firm refers to the department certain items for a ruling as to the duties that will apply to it. The department consults the trade rivals of the applicant firm, and if they say that they produce some article that is approximately equivalent to that which was the subject of the inquiry, the would-be importer is denied any concession. In other words, the local manufacturer is practically allowed to a’dvise the department as to the rate of duty that shall be imposed.
– Has he not to produce his samples, too?
– Certainly. About five weeks ago I represented to the department the injustice of its decision in regard to certain timber working machines. Although I was promised a reply within a fortnight; it has not yet readied me. Some people desire to import timberworking machines of the latest design.
They were told that these articles could not be imported under the concession item because a local manufacturer made something similar. The firm desiring to import obtained particulars from the local manufacturer, and ascertained that he had no stock, and could not supply within less than sixteen weeks. The machines could be imported from abroad in about a month. Although it was shown conclusively that the local machines were vastly inferior, and much more expensive than the imported ones, and that delivery would be delayed, the department refused to permit importation at the concession rate of duty. I represented that it was necessary for the development of a local industry that it should be allowed to import the most up-to-date and efficient machines. The reply was that it did not matter whether the local article was as good as the other; if the person desiring the machine could manage to use the Australian one at all, he must do so.
– The honorable member will understand that all applications for concessions go before the Tariff Board.
-I did not know that.
– That is doubtful sometimes.
– From what I can gather the negotiations ure conducted entirely by the department in accordance with direct instructions from the Minister.
– I deny that statement.
– Obviously the Minister does not give instructions to the Tariff Board.
– Without doing an injustice to officers, I cannot supply proof of the statement I have made.
– The honorable member should accept the Minister’s denial.
– I do not. I am pointing out what I consider abuses in the administration. Such things have occurred frequently. I have interviewed officers of the department, and I remember the replies they gave to me. I have been told that certain action was taken at the express direction of the Minister.
– The statement may be wrong.
– The honorable member should accept the Minister’s repudiation.
– No. I am stating my own opinion, and it is well founded. My remarks appear to annoy the honorable member.
– It annoys me that the honorable member will not accept the Minister’s statement.
– That is no concern of the honorable member. Another injustice is that some people can get concessions from the department that are refused to others. A friend of mine recently applied to the department for the admission of certain machinery under the concession item. His request was refused. Coming out of the department he met an officer of the Industries Protection League, who asked him what he wanted in the department. Having been told of the request that had been refused, that officer said, “ If you had given that to me I could have got it through for you.” I say deliberately that the Industries Protection League has too much influence in the department.
– Does the honorable member say that in that case one man was refused a concession that was given to another, or is he merely repeating idle gossip heard in the lobby?
– The Minister is very sure of his position, because he knows that the proof he would demand cannot be furnished.
– I challenge the honorable member to prove any definite instance of favoritism in the department.
– Favoritism is going on all the time.
– I challenge the honorable member to prove it.
– I do not propose to answer that challenge. This is not the place in which to answer it.
– The honorable member is’ repeating idle gossip.
– As the Minister knows, I have myself protested to him against the action taken in regard to certain matters bought before him, and the fact that these matters were referred to trade rivals. Complaints of this sort are frequent amongst merchants.
– They are frequent, perhaps, among those who have been disappointed by tariff changes.
– I say further that nore of these merchants, nor their champions, are prepared to take the matter further because it would mean that they would be discriminatedagainst in regard to further tariff changes.
– I object to these statements being made by an honorable member, when he does not lay before his chamber one scintilla of evidence to prove them.
– Does the honorable member raise a point order ?
– Yes. I protest against such statements being made.
– There is no point of order. The methods he will adopt in placing statements before the committee rest with him.
– I made no reflection againt the Minister. I say that these things are done in the department in order to comply with the Minister’s instructions; but is not right. If the Minister thinks they are consistent with the protectionist policy, it is a poor reflection upon that policy. The attitude of the department in matters of this kind is to take the word of the manufacturers against the word of the importers. That is not fair.
– The honorable member thinks, perhaps, that the department should take the word of the importer against that of the manufacturer?
-Weknow from the Minister’s own words his attitude towards the importers. He is always talking about them, as if they are foreign thieves. The Minister wants a proof of that, perhaps. If so, I will supply an instance. In the Melbourne Herald of the Sth October, there appears an article by him headed “ My Busman’s Holiday in England,” in the course of which he says-
In the course of my busman’s holiday in Great Britain, undertaken partly for health reasons, and partly, though at my own expense, thatI shouldbethe better able to discharge my obligations to this country as one of its Ministers,I tried to find a line of demarcation with regard to Empire affairs and tariffs. Ifoundit. It divided sharplythe selfish from the unselfish Britisher. On theonehand, I found the internationaltraders and financiers, whose God was profit. The source of the money they made was immaterial as long asit was plentiful ; it mightrun as muddily as might be, so long as the stream did not slacken. These men know no country, no nation, no sentiment. The world is their milch cow, and consequently anything done by Australia to help her own development was resented in proportion as it interfered with the profitmaking of these money machines.
That is an extraordinary attitude for a Minister, whose business it is to look after a department of trade.
– Has the honorable member seen the black list at the customs office ?
– No, I have not seen the list. That article by the Minister is intended to be a reflection on English traders.
– All the Minister said w.as that these traders did not care where the profits came from. There is nothing wrong in that.
– Will the honorable member read the whole of the context? Do I refer in the course of the article to anybody else? Do I speak of a pro- British section in that article ?
– There is reference to a pro-Empire section.
– Well, read that as well.
– Yes; but apparently they are not traders.
– I should think the Minister refers to those whose operations are world-wide, and are not necessarily citizens of Australia at all.
– They are not citizens of Australia.
– Will the honorable member, in fairness, read what I said in regard to the pro-British traders ?
– I do not think there is anything about them here. There is something about the British manufacturers. I suggest, , and I think I am justified in suggesting, that this is a reflection on the men who develop international trade. The Minister implied that those who develop international trade are dishonest. He says of them that it does not matter how they make their money ; “ The stream might run as muddily as might be, so long as it did not slacken. These men know no country, no nation, no sentiment.” These remarks are in accord with statements made frequently by the Minister in this House when introducing new tariff schedules. He always speaks of the international trader as a despicable being, almost a dishonest, being. I do not think that he, of all men, should make a statement like that. To view international trade in this way is & great mistake, and is putting this country in a false position in regard to other countries. Such statements are indicative of the spirit in which the affairs of the Customs Department are ordinarily administered, and of the kind of reception given to those who try to promote trade with other countries. Their profits are scrutinized and their rights questioned, as if they had no right to exist at all ; while the statements of manufacturers are always taken as true. Those who ask for increased duties are certainly making application for a personal advantage to themselves, even though what they ask may also advantage the country; it is to increase their profits or, at any rate, to prevent their profits from diminishing. On the other hand, international trade is a matter of mutual benefit. That constitutes the difference between the two.
– Do not those advantages apply also to local trade?
– We are endeavouring also to give a good deal of additional protection by means of what I have reason to stigmatize as illegal preferences. There is an act on the statute book in New South Wales - I believe it is still in existence - by which in all government contracts Australian goods are to be given a specific 10 per cent, preference. I do not know for certain whether a similar law operates in other States; but I know that in some States instructions have been issued by the Government to local authorities that they are to give similar additional preference in regard to tlie purchase of goods, and such preference” is also being given by the Commonwealth Government. I notice that in some Commonwealth departments preference is to be given to Australian tenderers over any others. This Parliament determines, through the customs tariff, what advantage an Australian industry is to have over outside competitors. This Parliament alone has the right to do this, and when action :is taken by other Governments, or by local bodies, in a similar direction, they are usurping the rights of this Parliament. When the South Australian Government imposed a tax on petrol the Commonwealth Government took action against it for doing something unconstitutional. Yet it allows the same government to do a similar thing by imposing an extra tax on the people in this form. These are extra taxes imposed by authorities in Australia who have not the right to impose them. This Government, however, never thinks to take any action in this regard. As a matter of fact, it commits the same offence itself. If the Government allows preference to be given in this way, it is increasing the effect of the duties. Another step has now been taken. I was recently informed in Perth that certain trades unions have imposed a special penal rate of pay on work when other than Australian materials is used.
– That is over the fence.
– The honorable member says that such action is over the fence, yet he defends the other form of additional preference to which I referred.
– A person can choose to pay a higher rate and take an article produced outside the Empire- in preference to one produced inside. The same thing does not apply in the case the honorable member has just quoted.
– The enforcement of a penal rate is being widely practised in Australia.
– Where is it being done ?
– I understand that it is being done by the Boilermakers’ Union in the Government workshops at Perth, and in other workshops in Western Australia ; and I ‘am informed also that it is the recognized custom in most of the workshops in the eastern States. The extra rate is simply imposed by the unions, and if it is not paid there is trouble.
– Oh, well, you cannot blame them for that.
– It is imposing an award over and above the Arbitration Court award.
– After all, they are Australians. I agree that it is wrong; -still, everybody is doing it.
– I cannot help repeating what has recently been said by a writer on this subject -
There is no more alarming symptom ot modern politics than the tendency of party leaders to bid against one another in the distribution of public favours and the use of public funds for distribution of benefits and favours to sectional interests.
That is what is being done to-day under this tariff. It is most regrettable. It is the cause of much trouble in our public life, and the people are getting tired of this system.
– Would the honorable member advocate absolute freetrade for Australia?
– I would myself. I have been asked over and over again “ What is your remedy ?” I am glad of this opportunity to state my views on this particular issue, because so often they have been misrepresented by my critics in this chamber. The application of the remedy calls for the display of a certain amount of courage. In this connexion I am reminded of the answer given to a university professor who put a particularly difficult question to a number of students in physics. He put to them this question : “ If you found yourself in the midst of a frictionless surface, how would you get off it ?” One student who did not know the correct answer nevertheless obtained full marks by replying : “ By reversing the process by which I got there.” Now that is just the position in which we find ourselves in regard to the policy of protection. We can only get out of our present difficulties by reversing the process that was responsible for landing us in our troubles.
– Did the honorable member tell that story because, like the student in physics, he didnot know the answer ?
– No. I have some remedial suggestions to offer. If we look at the history of the fiscal movement in Great Britain, we find that protection was gradually built up and then was finally abolished.
– Is it not a fact that further customs duties have been imposed in Great Britain?
– Customs duties have been imposed there, but they are going to be abolished in two years’ time. I am, unashamedly, a freetrader, and I say definitely that a tariff based on freetrade principles can raise more revenue, and raise it more easily, than is possible by means of a protectionist tariff.
– But the poorer sections of the community would have to bear the burden.
– The burden on the poorer classes would not be nearly so heavy under a tariff framed on the lines I suggest. Make no mistake about that. At present, the burdens are extraordinarily heavy.
– Other students of economics do not share the honorable member’s view that under protection the poor man carries the burden.
– I think the honorable member for Henty (Mr. Gullett) showed that he did. The truth of this basic principle was recognized at the last Geneva Economic Conference. In the discussion at that gathering it was generally acknowledged that it was impossible, under an artificial fiscal system like protection, to give the people relief from the burdens of indirect taxation. The only remedy is a gradual reversal of the process that has got us where we are. The established objective of freetrade is customs revenue on revenue items. I differ from the honorable member for Henty and others who urge the elimination of the revenue producing items of the tariff in favour of protective duties. My remedy for our present troubles is to get rid of the protective duties. England raised more revenue, and raised it more easily, when she had only six items in her tariff schedule than when she had 2,000. The honorable the Minister has urged that he cannot dispense with the revenue duties because of their effect upon the revenue.
– He wants to block all imports.
– Great Britain imposes a duty on tea.
– A small duty on tea would be nothing to the working man compared with the burden he has to bear through the indirect taxation on his clothing and other commodities. Revenue duties on tea, sugar, tobacco and spirits fall much more lightly on the community and on the poorer sections of it than high protective duties.
– The duty on tea in Great Britain is about 9d. per lb.
– It may be as high as that, but I very much doubt it. In any case such a duty would not press so heavily on the poorer sections of the people as the protective duties in the schedule which we are now considering. The trouble is that under a system of indirect taxation the taxpayer does not know how great is the burden that is laid upon him. The Government has no reason to fear a loss of revenue through the imposition of revenue duties. On the contrary it will thus raise more, and raise it more easily,/ I urge Ministers, therefore, to remove the essentially protective duties. I freely admit that if we are to avoid a cataclysm and suffering, as well as disorganization of trade, the process must be gradual. I have a firm conviction, however, that if we reduce these duties gradually we shall be able to give muchneeded relief to industry. It is of no use railing against the Arbitration Court and complaining of its awards. It is of no use saying that the Arbitration Court is the cause of all our troubles. You cannot get rid of the Arbitration Court without first altering the tariff . The fault lies with our customs tariff. If we can reduce the duties gradually it may be possible to afford relief without too great a dislocation of industry. We must allow industries time to re-adjust themselves. In any case dislocation of industry due to a reduction of customs duties would be nothing compared with the trouble that may come upon us if we continue along our present fiscal path. I am. speaking with the greatest sincerity, and in the full belief that what I am saying is true. One firm has already gone. The Broken Hill Proprietary Company has lately put off 2,500 men. Bonds, another big concern, has dispensed with the”*” services of 2,000 employees. These two industries between them’ are languishing, and 4,500 employees have been thrown out of work.
– Does the honorable member suggest that they are suffering because of the high customs tariff ?
– They are suffering because of the faults in the economic system which I have been describing. I need not recount them all. We have to choose the less of two evils. I am speaking, as I said, in all sincerity. I impress on those honorable members who. disagree with me that a great and solemn duty is laid upon this committee. The responsibility is on us to make a great decision in the near future. If I have presented my case wrongly or unfairly, or if I have stated my views imperfectly, I ask them to overlook my shortcomings and weigh the issue in the full light of the knowledge which they themselves have of the present position.
– From the honorable member’s point of view the case has been logically stated.
– It is the point of view of very many people in this country. I feel sure that I am representing the opinion of the people of my State. Unfortunately this Parliament considers that two years ago it was commissioned by the electors to continue these high duties. I say that the fiscal issue was not discussed then. As a matter of fact, it was not mentioned except in my own State, where most of the supporters of the Ministry were returned on the distinct understanding that relief would be given. The Government, with its unbroken forces, and the personal prestige of its leader, never before had a chance like this to bring about a change in policy, especially since one-half of its members - the Country party - were once opposed to this policy, though they may have foresworn themselves since. The time was never more opportune for the Government or Parliament to do the courageous thing and bring about a change in our fiscal policy that every one so earnestly desires. I now ask that this issue be made a vital issue at the next election, so that it will be settled by the people and we shall know where we are.
– I thought it was settled by the people 25 years ago.
– No doubt the honorable member for Darling thinks it was. I do not agree with him. I doubt if he understands the position. He may know the opinion in his own division, but he does not know what the people generally are thinking. I fully believe that they are ready, and are looking for a change in our fiscal policy.
.- The committee listened this afternoon to a very able and carefully prepared speech by the honorable member for Perth (Mr. Mann) from the freetrade point of view. It was also a lengthy speech. During the 165 minutes which the honorable member occupied in delivering it, I found myself in agreement with him for five minutes. Throughout the history of the world many men have suffered, because of being ahead of their time, and while the honorable member was propounding his theories of freetrade, the thought struck me, that the free traders in this country are suffering, because they are half a century behind the time. The speech of the honorable member would have made some impression 50 years ago, but it makes none today. He made some remarkable comments on the tariff schedule, which, he said, was framed on a policy of hatred of Great Britain. It was an extraordinary statement, because my complaint against the tariff schedule is thatit disregards Australian industries to give preference to Great Britain. If the honorable member for Perth had been as eloquent in support of Australian industries as he was in advocating trade for Great Britain, he would have rendered a very much greater service to this country, an important part of which he is representing in this Parliament.
After having spent considerable time on. a diatribe against the Government for its policy of hatred of Great Britain, the honorable member then criticised British statesmanship and eulogized that of Germany, simply because a Ger-‘ man statesman had advocated a reduction of tariff, while the statesmen of Great Britain, according to what the honorable member told us, were not carrying out the decisions made at Geneva. He also told us that protection was a sordid money-making system, and he took the Minister for Trade and Customs, whom I have no doubt can capably defend himself, severely to task, because he had made derogatory statements about certain British traders. * If the honorable member in reading the report had quoted about two paragraphs more, he would have been a little fairer to the Minister. The Minister said that when in Great Britain, he was entitled to dra* a line of demarcation, and he found it distinctly drawn, there being on the one side selfish interests, and on the other a predominance of men with Empire vision; so that his remarks about the minority who were selfish and out for profits, I think, were quite true. If it is wrong for the Minister to return from Great Britain and to criticize some of the British capitalists and their methods, how much more wrong is it for the honorable member for Perth to say that men, who are building up industries iiAustralia, are operating under a system of sordid money making ? I ask the honorable member what of the importers. Are they all patriots? Are they pure souled philanthropists that we should give them free opportunity to import goods from anywhere? Are not the importers out for profits too? I admit that we have money-making,, and sordid moneymaking interests to satisfy in this country. I admit that under our protectionist policy, some manufacturers in Australia have taken toll of the people, but prior to that the importers took toll of the Australian people without giving any service in return. It is our duty to see that when we impose duties to protect the industries of this country and to develop it as a nation, we so hedge them around that no one, whether importer or manufacturer, can take toll of our people. Failing that, if we have to choose between being exploited by importers or by Australian manufacturers, then I prefer to be exploited by our own people. Had the community sufficient wisdom to grant to our Australian Parliament the powers that it should have under the Constitution, and if effect could be given to what is known in politics as new protection in order to safeguard the interests of Australian consumers, then we should have a really genuine, sound and scientific system of protection. The honorable member’s remedy is not a remedy at all, and if given effect would produce nothing but chaos. He said that the protectionist policy has brought about centralization and stimulated industry in the cities. I thank him for admitting that it has stimulated u Australian industries. It is better < ‘for them to be stimulated in the cities of Australia than in the cities of other countries, and while I regret our policy of centralization, I prefer to see people working under reasonable conditions in the cities of Australia than under the sweated conditions of manufacture in the cities of the old world.
The honorable member then told us that in Australia it takes £2,000 to settle a migrant upon the laud. Is the protectionist policy responsible for that? I suggest to him that he show the connexion between the protectionist policy of this country and the cost of settling immigrants upon the land.
– I spoke of that aspect as showing how foolish it is to expect, under our protectionist policy, to settle migrants on the land.
– High tariffs must necessarily increase the cost of settlement.
– The cost of settling an immigrant on the land is primarily tlie cost of the land.
– It is. The protectionist policy has not increased the cost of land in Australia. The honorable member for Perth, also told us that high duties brought about unemployment. He lives in a world of his own. He is away up in the skies with his freetrade theories. I ask him to come to earth to look round the cities of Australia and in the provincial centres, and see what is the prime cause of unemployment to-day. If he does he will find that it is the imports that year after year flow into this country and eventually close down Australian industry. To say that high ‘ protection is the cause of unemployment is to misrepresent the position.
The tariff schedule that has been placed upon the table by the Minister is from my point of view as a protectionist, a most attenuated document. It has been prepared, as I have said before, more with an eye to British preference than for the protection of Australian industries. While I have no objection to reciprocal trade with Great Britain and. other countries, I say that it must not be at the expense of Australian industries. I should really like to know what is the Government’s policy on the fiscal question, because I am at a loss to understand it. The honorable member for Perth quite surprised me to-day when he read from a circular” issued by the Prime Minister’s Department. I confess that I had not seen it. In that circular is the declaration that the economic policy of Australia is (1) self development, with which I agree; and (2) interImperial freetrade and reciprocity. First of all inter-Imperial freetrade is a distinct contradiction of reciprocity. When in the name of fortune has this country ever declared for inter-Imperial freetrade ? I see the stamp of inter-Imperial freetrade throughout this tariff schedule. Its weakness, and also that of the previous schedule, is the weakness of Imperialism - too much regard for British preference and too little regard for Australian industry. To give some idea of the Prime Minister’s outlook on the fiscal question, let me quote from his remarks on the amendment moved by the Leader of the Opposition (Mr. Charlton) to the Budget. He said -
An additional tariff, barrier would certainly be a means of encouraging inefficiency and of maintaining conditions under which men can demand hours and wages that are not economically sound.
In view of that statement, and that of the honorable member for Wimmera, (Mr. Stewart), respecting the action of the Leader of the Government in the Senate in entering into a semi-freetrade pact in Western Australia prior to the last election, it is very difficult to obtain an effective protectionist policy from the Ministry. The view of the other leader in . the team is interesting. Last August the Treasurer told the settlers and farmers of New South Wales that lower wages and lower tariffs would prove more protective to Australian workers and industries.
The honorable member for Perth said, during the course of his speech, that he feared that he was making no impression upon the Minister. I sincerely hope that his fear was well founded. I believe that the Minister is a protectionist, but too much impression has already been made upon him. He is after all only a member of the Government team, and what a team it is on the fiscal question ! Half of it is in the shafts pulling well, hut the other half is yoked to the hack of the wagon pulling in the opposite direction. The result is that the wagon is creaking and nearly broken, and the team is afflicted with spavin, windgall and stringhalt, so far as the tariff is concerned. We cannot expect any progress in the protectionist policy, especially when the Treasurer, co-partner with the Prime Minister in the Government of this country, says that we should get more protection for our workers and industries by having lower wages and lower tariffs, which he believes would reduce cost of production and enable us to compete successfully with the world. It sounds well in theory to those who theorize and ignore realities. If we were starting among the nations from scratch, our onlyconcern would be to see that wages and conditions were such as to enable the’ workers to enjoy the comforts of life. The theory of deflation, if applied to-day”, would immediately bring us up against realities.
What are the realities? They are that -we have a burden of Commonwealth and State debts on which a fixed interest of £50,000,000 a year has to be paid. In addition there are private borrowings on which, roughly, another £100,000,000 a year has to be paid. . These interest rates are fixed for long periods, and if what is called the policy of deflation is introduced we shall be playing into the hands of persons receiving a fixed, unalterable rate of interest on their bonds and other securities during the term of the loans. By halving the cost of commodities and reducing the wages to the same extent we would double the value of their interest. Those loudest in their demand for deflation are the persons responsible for inflation. I refer te the profiteers, who during the war inflated the cost of everything. Prices having been built up, wages had to try to follow. As the honorable member for Perth (Mr. Mann) said, wages went up the stairs and prices went up the elevator. These people inflated prices and made huge profits by profiteering methods and scandalous lack of patriotism during the nation’s agony. They invested their ill-gotten gains while men were suffering in the trenches. They waved the flag whilst they made their profits, which they invested in long-dated loans at fixed rates of interest. Now they wish to bring down prices and wages so that the purchasing power of their returns in the form of interest may be increased. The suggestion has been made that, when customs duties are increased, the workers should not ask for higher wages, irrespective of whether they have a just claim or not. That suggestion is made in portions of the Tariff Board’s report. Let me say, in reply, that wages are fixed and determined by tribunals in Australia, based, presumably, first of all as a basic wage, upon the cost of living, to which an addition is made for skill. At any rate, wages are determined by a tribunal. I should like to ask those gentlemen who say that the workers have no right to submit their claims to a tribunal, what they would think of a tribunal to fix the prices the workers have to pay. Are they, like the workers, prepared to go ‘before a tribunal which shall determine a fair price or profit? Of course, they are not.
It is fallacious to say that the whole of our customs duties are a charge upon the people. They are to some extent, but not to the full extent. We receive, roughly, £30,000,000 * year in customs duties. This, some say, is the price we pay for protection. That is incorrect, because in the first place a large percentage of that amount is not paid at all by the consumers of Australia, but by the importers and manufacturers of foreign goods. There is evidence - I am not going to quote it as the Minister has placed it on record, but I and others have seen it recorded in many instances - that the imposition of customs duties has in many cases brought about a reduction in prices charged in Australia. I will not claim that that is true in every instance; but it justifies a reduction from the £30,000,000. Then, again, approximately £13,000,000 of the £30,000,000 is frankly admitted to consist of revenue duties - quite apart from excise duties which reduces the amount of protective duties to £15,000,000, of which a fair percentage is not a charge at all upon the Australian consumer. Another percentage is what we are paying for the right to get work in our own country, for developing OU] own industries and keeping our own people employed.
I agree with the Leader of the Opposition that this is not an occasion for a general debate on the tariff.- The fiscal issue has been thoroughly threshed out, and irrespective of what any one says to the contrary, protection has become the settled policy of Australia. It is necessary, however, to examine the schedule closely and to particularize in some instances, because there is. a great need for a revision of many of the items and an urgent need for immediate application of such revision. There should not be any delays or adjournments, but we should as quickly as possible proceed to discuss the items. I propose not to speak at length at this juncture, but to examine some of the items in the hope that some impression may be made upon the Minister, and that when the items are reached some amendments will be made in the interests of Australian industries. Let me give some illustrations. I do not intend to cover in detail the ground which the honorable member for Newcastle (Mr. Watkins) will traverse; but I should like to refer to the iron and steel industry, which has been exhaustively inquired into by the Tariff Board. Probably no more exhaustive inquiry has been made into any industry for a longer period. Attention has been called to it again and again in a forceful manner by honorable members, and particularly by the honorable member for Newcastle, who represent a very important part of Australia in which this important industry is situated. It was my good fortune to visit the works quite recently. I do not claim to be an expert, but as an ordinary interested observer I consider that the plant at Newcastle is one of the best and most complex we have in this land of ours. There cannot be anything much better in any part of the world. It is an industry which we should strain every effort to keep going. It is in competition with a huge European combine. The war had no sooner terminated than overtures were made by the great iron and steel masters of Germany, Prance and Belgium for co-operation? to exploit the world’s markets. They have succeeded to-day in exploiting the British market.
They have their agents in Britain, and foreign manufactured goods are sent to Britain to be finished off, and then exported to Australia as British articles entitled to come in under a preferential duty. That is what the Australia iron and steel industry is competing with at present. I was given to understand that the Government or the Minister had followed very closely the recommendations of the Tariff Board, but in turning to this big key industry of Australia, one of our foundation industries, I find that the Government has not followed the board’s recommendations. Take, for example, item 130 (a) relating to pig iron. The Tariff Board’s recommendations were 30s. British preference, 40s. intermediate and 45s. general. The schedule shows that no alteration has been made. The old rates remain : 20s. British preference, 30s. intermediate, and 40s. general. Take item 136 b, ingots, blooms, &c. The Tariff Board’s recommendation was 52s., British preference, 72s. intermediate and 140s. general. There has been no alteration, and the old rates of 32s. British preference, 52s. intermediate and 65s. general remain. In respect of item 136 c, bar, rod, red, angle and tee iron, the recommendation of the board was 75s. British preference, 95s. intermediate and 150s. general. The rates in this schedule are 70s. British preference, 100s. intermediate, and 120s. general. In respect of item 152 a iron and steel tubes or pipes, the board recommended that “ on and after 30th June, 1926, the duties should be 50 per cent. British preference, 60 per cent, intermediate and 75 per cent, general.” The schedule shows that the date has been altered U» “ on and after 1st January, 1929. “ Surely after careful investigation the board knew what it was recommending. Surely it realized the menace of a deferred duty in such a case.
– That branch of the industry is yet to be established.
– This report is dated 11th June, 1926, and if I remember aright was tabled only last week.
– On Friday last.
– The board recommended that the increased duty should come into operation on the 30th June, 1926. The Government proposes that the increase shall take effect as from the 1st January; 1929; and that instead of the duties being 50 per cent. British preference, 60 per cent. intermediate, and 75 per cent. general, they shall be 40 per cent., 55 per cent. and 60 per cent. respectively. Take item 154 a relating to rails, 50 lb. to the yard and over. The board recommended a duty of 60s. British preference, 85s. intermediate and 150s. general per ton, but the schedule shows duties of 50s., 85s., and 100s. respectively. Under item 154 b rails less than 50 lb., the board recommended 70s. British preference, 95s. intermediate and 160s. general, whilst the schedule provides for 45s., 100s. and 125s. respectively. In regard to item 154c, fish plates, tie plates and rods, the board recommended duties of 75s. British preference, 85s. intermediate and 180s. general, whereas the duties set down in the schedule are 48s., 100s. and 125s. respectively. In the case of rails of 50 lb. or over, the recommendation is for a British preferential duty of 60s. a ton, whereas the schedule provides only 50s. For rails less than 50 lb. the board recommended a preference duty of 70s. and the schedule provides for only 45s. In the case of fish plates, tie plates and rods the recommendation of the board is a preference duty of 75s. whereas the schedule provides for a preference duty of only 48s. The same disparity exists practically through the whole schedule.
– What is the use of the Tariff Board?
– I am not going to argue that the Government should slavishly accept the recommendations of the board. That would be an absurd position to take up, I suggest, however, that when a Minister introduces a tariff schedule, which differs to such an extent from the Tariff Board’s recommendations as this one does, he should at least explain to the committee the reason for the disparity. After all, the board recommends to this Parliament, and the Government should pay some regard to its recommendations otherwise it should disband the board. If the board recommends certain duties to this Parliament and the Government in its wisdom or otherwise or for reasons of political expendiency does not follow the recommendations of the board, the Minister should explain the reason. I expect him to do so in regard to a number of the items.
– That will be done.
– I now turn to item 105 aa, which covers knitted goods. Last year Parliament imposed a very substantial duty upon these goods and rendered what it thought a very good service to the trade. To a large extent our action appeared effective as the manufactures of knitted goods were for a time progressing. When we are dealing with foreign manufacturers and importers, however, we are dealing with very shrewd people. These people found an important loophole in the tariff of 1926, through which they brought in piece goods knitted in tubular form, which only had to be cut into lengths, a few stitches inserted and the finished garment was produced. It is now proposed to remove this loophole, because it has been shown that importations have been coming in through it from Britain and Japan. In 1924-25 the importations of cotton piece goods in tubular form, were valued at £6,000 in 1925-26 at £72,000; and in 1926-27 at £175,000. By sending the goods out in that form, the oversea manufacturers defeated the intention of this Parliament, as expressed in the 1926 tariff. From July to September of. the present year the value of the imports of these goods was -
That rising tide of imports furnishes a cause of our industries going to the wall. The duties proposed in the schedule represent about one-half of what the industry asked for. I repeat that the Government is not bound to give all that is sought; but it must be conceded that some explanation ought to be forthcoming as to why it has been cut in half.
The fatal feature of the item, however, is that the duty is to be deferred until July, 1928. Those who are interested in the trade say that since the inquiry wasconducted in March last the importers have . stacked up their warehouses with supplies sufficient to last for twelve or eighteen months, and, in some cases, for two years, simply because there was a firm belief that the duty on these goods would be increased. In the face of that, what explanation does the Minister offer of the proposal to defer the operation of the new duty for a further seven months? I admit that he cannot prevent shrewd men, who keep themselves apprised of the trend of events, from anticipating what goods are likely to be protected and what are not. Even if they make a few mistakes by importing goods upon which the duty is not increased, they lose only the interest for the time being on the amount they have invested; but, on the other hand, when they correctly gauge the position they are enabled to increase their profits as the result of the increased duty.
– The honorable member criticized the Government because it did not follow the report of the Tariff Board in respect to iron and steel. In fairness to the Government, it should be mentioned that the proposal to which he now takes exception was recommended by the Tariff Board.
– The Minister will admit my having said that I did not expect the Government to follow slavishly the reports of the Tariff Board ; but when it declines to do so it should give the reason. I should have refused to adopt the report of the Tariff Board to defer this duty ; and I could give sound reasons for my refusal to any Parliament that wished to protect an Australian industry. There is an aspect of this matter which has been overlooked. Before the mills put anything on the looms they seek orders. In January of each year they take orders for articles that will be required for the ensuing summer trade. Next January they will seek orders for the 1928 summer trade. What hope will they have of obtaining any orders when there is a deferred duty on these goods that will not come into operation until July next?
– It will give the Japanese an opportunity to send their goods here.
– Those who import goods from Japan will be able to fill their warehouses with thosegoods.If this is a duty that ought properly to be imposed, the Ministry should allow it to operate from the moment it was tabled. When the Australian millers seek orders next January for the followingsummer’s trade they will find every warehouse filled with imported goods from the cellar to the garret. It will be twoyears at least before the Australian industry will derive any benefit from this duty, and in the meantime it will probably go to the wall. The biggest hosiery and underwear spinners and weavers in Australia - George Bond and Co. Limited, of Sydney - have gone into voluntary liquidation. That may not be due entirely to importations, but I believe I shall be safe in asserting that they are largely responsible for the difficulties in which that firm finds itself. The flood of imports has affected that industry just as it has affected many others. One of the stated reasons for the liquidation is that the banks will not advance further moneys. If that firm could turn into cash the goods it has produced the banks would not be asked to advance further moneys.
– Did it not make a profit of over £50,000 net during each of two recent years?
– It did.
– That was largely expended on its works.
-The honorable member for Franklin (Mr. Seabrook) probably knows that a firm may go into liquidation and yet be able to pay a great deal more than 20s. in the £1/ It may show a handsome profit when its goods are being sold, andyet be uuable to finance the business in the event of failure to sell. It is of no advantage to a firm to have hundreds of thousands of pounds’ worth of stock in its mills if it is not able to dispose of it. George Bond and Company may be worth not less than 30s. in the £1. I believe the firm made a profit of over £60,000 in one year, and £50,000 in another, and I have no doubt that if it could now sell its goods it could make a profit of £50,000 this year. We are passing through a period of financial stringency, and if the banks will not advance the money necessary to enable it to carry on until it can sell its goods, there is no other course open to it than to go into voluntary liquidation. The interjection of the honorable member strengthens the argument for a protective duty that will keep out imports and allow the Australian article to he sold on the local market. I have read in the press the report of a statement that has been made by .Mr. A. C. Wilkinson, managing director of the Globe Worsted Mills, Marrickville, who returned last October from a visit to Great Britain and the United States of America. He points out that half of the machinery in the textile industry in Great Britain is idle, and says that the depression is due to the importation of cheap worsted and other articles from Belgium and Germany. I have not’ the slightest- doubt that Australia is importing large quantities of those cheap commodities from Belgium and Germany, under the British preferential tariff, and with the label “ British goods “ attached. Whatever action was taken it would not prevent that sort of thing. With a high duty under the general tariff, and a low one under the British, there is the temptation to cheat, and foreign manufacturers will always take advantage of it.
I wish also to direct the attention of the Minister to the item “ Timber,” and I believe that in this I shall have the support of the honorable member for Franklin. The difference between honorable members who sit on this side and some honorable members opposite is that we are protectionists with respect to all Australian industries, not alone for those that are in our own electorates or our awa States. There are no forests in my electorate; there are a few old red gums on the river flats, and that is all; but I, nevertheless, wish to see our timber industry encouraged. I have a passing knowledge of Australian, certainly of Victorian forests: There * is no important part of our Victorian forests in which I have not been. I lived my young life in the bush, and took an interest in our timbers’. One of my saddest contemplations, looking back over a period of 25 or 30 years, is the sinful waste that has taken place of our beautiful Australian hardwoods. Little encouragement is given to the utilization of our harwoods, but on the other hand, we import every year millions of feet of timber that in most cases is not the equal of, and in the balance of cases, is certainly not superior to, our own. The hardwood industry is an important one. There are over 100 mills, about 75 of which are operating at the present time, employing probably 1,600 men. If they were doing normal business, they would be employing a number approaching to 3,000. The saw-milling industry has to contend . against very keen competition. In this schedule an attempt is made to protect it, and in so far as it relates to Oregon, it meets with my approval. That is one of the bright spots in the schedule; so far as the timber industry is concerned, it is the only bright spot. But if it is desired to protect Australian timbers, why not place an effective duty on all imported timbers, and not confine it to Oregon? Japanese oak is a serious competitor of our Australian woods; so, also, is Pacific maple and Borneo cedar. Why not include those in the schedule? Japanese oak competes with Tasmanian oak and Australian blackwoods. . The importations of that timber in 1921 amounted to 4,300,000 super feet, and in 1926 to 6,600,000 super feet, an increase of 2,300,000 super feet. It is remarkable, however, that the value dropped from £175,000 in 192.1 to £135,000 in 1926, a decrease of £40,000; showing that the cheap labour of Japan has become cheaper, whilst our standard of labour has remained at relatively the same level, since 1921. There is no hope of an Australian industry competing on those terms. The old duty on all timbers was 3s. British preferential, 3s. intermediate, and 4s. general. The new proposal, which applies to Oregon only, is 8s. in each case. That would be all right if it were not confined to Oregon. It will be found that hemlock, spruce, and other timbers will take the place of Oregon as a competitor of our timbers, with the result that the local industry will again be , without protection. I would like to hear what explanation can be offered of what, appears to me an inexplicable anomaly. Item 291 (h) reads : “ Timber, undressed, in sizes less than 7 inches by 2$ inches - (1) Oregon,” British preferential tariff lis., intermediate lis., general lis. In the existing tariff Item 291 (l), “ Timber, dressed, n.e.i.,” bearing duties of 6s., 7s. 6d., and 8s. 6d., is unaltered. The effect of that is that undressed oregon in sizes less than 7 inches’ by 2^ inches will have to bear a duty of
Ils.; but if it comes in dressed it will be admitted at duties varying from 6s. to Ss. 6d. One would imagine that when more labour had been added to the article it would1 bear a higher duty.
– So it should in any p roperly arranged schedule.
– I agree with the honorable member that this is not a properly arranged schedule. The anomaly is so glaring that I can only attribute it to an oversight, which I hope will be rectified. Some people may say that the prices being charged for Australian hardwood are so high that imported timbers will be able to compete with them. I find, however, that whereas the price of Australian hardwood has increased only ls. per 100 super, feet since 1921 - from 28s. to 29s. - the price of Oregon has fallen from 40s. to 29s.; so that whilst the Australian timber had a natural protection of 12s. in 1921, to-day there is no margin in its favour. Mr. A. Nichol, secretary of the North-western Millers Association, said in the course of a published statement -
It had been agreed that if the tariff was increased on Baltic pine and foreign hardwoods, there would be no increase in prices.
He also said that the proposal to increase the duty on Oregon only had created consternation amongst those engaged in the industry, and I can quite believe that it did.
I turn ‘now to the smaller but, nevertheless, very important industry of smallware weaving. Three companies are operating in this industry, the capital employed is £100,000, the annual bill for wages and salaries is £131,000, and about 200 persons are employed. The largest of these is the Australian Weaving Company at Collingwood, Victoria, which in 1910 pioneered this industry. I would like honorable members to pay a visit to that mill. They would spend a most interesting couple of hours, and would appreciate the enterprise of ‘its founders. Prior to 1910 all the articles now manufactured in that and the two other Australian mills, were imported. For a while the local industry did very well; but a slump came after the war, when the manufacturers abroad did everything possible to recover their trade. They were prepared to, and did, sell articles ‘ much below the cost price in the country of origin. Notwithstanding the assistance given by the Industries’ Preservation Act, or the anti-dumping duties, that process continues, the prices quoted in Australia being lower than those, in the United Kingdom. The products of this industry are covered in the existing tariff by item 107a, “ Woven materials, badges, hat and cap fronts, medal ribbons, loopings for boots and shoes, labels and hangers, &c.” The old duties were 35 per cent. British preferential, 40 per cent, intermediate, and 50 per cent, general. In this schedule the British preferential tariff is unaltered, the intermediate tariff has been increased to 45 per cent., and the general tariff to 60 per cent. The serious flaw in. this re-arrangement is the failure to increase the British preferential duty, although the principal competition comes from the United Kingdom. Large quantities of imports from Germany, Switzerland, Czecho-Slovakia and Holland are re-boxed in England by agents of the foreign manufacturers, and sent to Australia. The result is that many looms in the Australian mills are idle to-day. The local companies asked for duties of 45 per cent. British preferential, 55 per cent, intermediate, and 65 per cent, general. The request put before- the Tariff Board referred to “woven and embroidered materials,” but in this schedule the word, “embroidered “ is omitted. That means that embroidered materials will come under item 106b, and will be subject to duties of 15 per cent. British preferential, and 25 per cent, general. “ Slipper, shoe, and blazer bindings “ have been taken from Item 404, and have not been included elsewhere in the schedule. The trade suggests that those bindings also should be included in item 107a. I am informed that one firm in England, the name of which I can furnish to the Minister, is quoting these articles at half the price at which it was selling them in
Great Britain. A short time ago it was reconstructed after going bankrupt - a fate that is not surprising if it is dumping goods in Australia at half the price at which it can sell on the home market. The local industry should be protected against this unfair competition.
I draw the attention of the Ministtr to Item 384, panchromatic dry plates. The old duties on these were 25 per i ent.
British preferential, 30 per’ cent, intermediate, and 35 per cent, general. Under the new schedule this photographic material will be admitted free from the United Kingdom, and will bear duties of 15 per cent, and 20 per cent, under the intermediate and general tariffs respectively. The Kodak Company Proprietary, of Collingwood, has asked that the old duty be restored, or that the item be omitted from this schedule. It is suggested that the new duties are based upon a misconception. Eighteen months ago inquiries were made by the department to ascertain if the Kodak Company was manufacturing panchromatic plates, and the answer was that experiments with them were being conducted, but they were not then being produced for sale. Since that time the firm has succeeded in producing large quantities of these plates, which are giving satisfaction to their customers. In the interval no further inquiry has been made by the department, and the company, not anticipating that this item would be altered, made no representations to the Tariff Board. All that it is asking now is that the old duty be continued. I am informed that panchromatic plates can be substituted for the dry plates ordinarily used for photography. If they were admitted free, they would compete with ordinary dry plates, and there would be a reduced output by a department that now employs 500 hands. The Kodak Company now manufactures 90 per cent, of all sensitive materials used by photographers in Australia, and a serious blow will be struck at this industry if panchromatic plates from the United Kingdom are placed on the free list.
The last item to which I wish to refer at this stage is 204 “ aluminium cooking utensils,” the British preferential tariff on which has been increased from 25 per cent. to 35 per cent., and the general tariff from 35 per ‘ cent. to 60 per cent. Those in the trade are satisfied with the duty in the general tariff, but I am informed that some branches of the local industry will be compelled to close if not. given greater protection against Great Britain, from which the principal competition comes. As the general tariff is being increased by 25 per cent., I sug- gest that the British preferential tariff be increased by 20 per cent., and so enable a struggling industry to carry on.
Prom his utterances, the Minister appears to be by conviction a protectionist; but this schedule is not soundly protectionist. I realize that the honorable gentleman experiences difficulties owing to the coalition in the ministerial party of freetraders, protectionists and revenue tariffists. For instance, the honorable member for Perth announced himself, a freetrader, and then said that more revenue would be raised by a freetrade tariff than by a protectionist one. The freetraders and semi-freetraders in the Ministry and on the Government benches are never tired of condemning Australian industries, and slandering Australian workers. Foreign goods seem to be their delight, and they have a passion for cheapness. I asked the honorable member for Perth if he advocated absolute freetrade, and he replied in the affirmative. Asked how he would bring it about, he said that he would reverse our present policy; in other words, he would step backwards. Do the advocates of freetrade ever contemplate what would be the effect of introducing their policy into Australia ? It would mean the scrapping of the machinery in our factories, because they could not possibly carry on, and their buildings would be utilized as storehouses for foreign goods that would come from all parts of the world. The cheapest and nastiest labour one could imagine would be producing those goods, and we would be using them whilst our own people were turned into hewers of wood and drawers of water.
– What would happen to the primary industries?
– How would the dried fruits industry fare under a freetrade policy? What would happen to the fine town of Mildura if the products of the district surrounding it had to compete with those of cheap-labour Mediterranean countries? The dried fruits industry, sugar-growing, and other primary industries have been fostered and maintained by protective duties. But the honorable member for Perth advises us that the discarded and discredited policy of freetrade, which no State in the Common- wealth would revert to, is a new and a better system. I am reminded of the lines -
Faith, fanatic faith, once wedded fast
To some dear falsehood, hugs it to the last.
Traders of the old world are struggling to recover from the effects of the war; their industries have been reconstructed, and they have progressed sufficiently to be serious competitors with each other. While engaged in the war, Britain lost much of her trade ; but her industries are becoming restored, and competition is in progress between her and the continent, and between the various continental countries. The struggle is keen and brutal, and Australia will be made a dumping ground for the exportable surpluses of Europe if we do not adequately protect our industries. Our imports last year, as honorable members heard many times during the budget debate, exceeded our imports, and the arrivals in the country also exceeded tlie departures by 40,000. Therefore, we are in the position of importing more goods than we export, and importing workers to do work here while sending work abroad. If that policy is persisted in, serious depression must come, bringing with it dislocation in trade and disaster to the people.
– The* committee should consider carefully the proposed alterations of the tariff submitted by the Minister, and ought not to complain when honorable members take advantage of the opportunity now afforded for reviewing the economic and financial position of the country. It may be fairly contended that economic problems dominate our national life, and determine the means by which wc carry on the various operations essential to the welfare and progress of the community. The honorable member for Perth this afternoon dealt at some length with the position in which Australia finds herself to-day. With much that he said I can agree; from some of his statements, and particularly from his diagnosis and conclusions, I dissent very strongly. When he said that this country was taxed too highly, 1 do not think that any man would deny that he was right. If we took a referendum of the people on that question, it would be decided in the affirmative with loud acclamation. It is the only subject on which the people are likely to have an undivided opinion. Unhappily, it is true, as the honorable member pointed out, that our indirect taxation has jumped from £13,000,000, in 1918-19, to £44,000,000, in 1926-27, and has doubled since 1919-20. It was then £22,000,000, and is now £44,000,000.
It is a melancholy reflection upon the vanity of human wishes, and the limitations which the Deity imposes on human ambitions, that this should have occurred during the regime of the Government of which the present Treasurer is a distinguished member. He assumed office to reduce taxation, and that is the result ! The honorable member for Perth has pointed to the consequences of excessive taxation upon industry. I, myself, had the honour of drawing the attention of the Treasurer to that a week or so ago. I quoted the Treasurer’s own words to the effect that inevitably industry must be hampered when called upon to pay excessive taxation, because in such circumstances, the fructifying stream of capital without which industry cannot bear fruit abundantly, was diverted from its proper channels. Our present standard of living cannot be continued without an abundance of capital. This is true, not only of this country, but of the civilized world, and particularly of that part of it which was engaged in the Great War, and has to bear the heavy burdens which it imposed. We have evolved a high standard of living, and in order that we shall produce .sufficient, an abundance of capital is necessary. Therefore, anything which diverts capital, the handmaiden of industry, from its proper uses is inimical to the welfare of the country. So much for that.
Now we come to the diagnosis of the honorable member for Perth. He says that the cause of the existing depression, and of the ominous rumblings which fill us with misgivings of failure in industry, is the country’s policy of protection. He instanced two or three firms that have closed, or are on the point of closing, dismissing their employees, and sending thousands of men and women; shortly before the festive season of Christmas, to join the ranks of the unemployed. It is a bleak outlook for those people. Bat is protection the cause of their misfortunes? According to the honorable member protection is a parasitical growth, and the only proper occupation for us is what he calls primary industry. I do not agree with that. I pointed out my objections at some length last year, so that it is only necessary now to say that the honorable gentleman ignores fundamental facts. His view, which professed to be all-embracing, was confined to one narrow portion of the stage of human activity. He forgot the age in which he lives. His mind is riveted to the past. There was a time when people believed that the sun went round the earth, and there are some who, so far as their economic opinions are concerned, still maintain a like doctrine. Notwithstanding all proofs to the contrary, some still believe that the world is flat. So the honorable member considers that what is wrong economically is that the world is too highly industrialized, and that the way to political salvation is to follow the “back to the land” cry of some new Peter the Hermit.
Those who are loudest in their denunciation of the present fiscal system, and eternally urging men to go on the land, almost invariably do it while enjoying the snug comfort of a great city. It is with the utmost reluctance that they bring themselves even so far into the country as Canberra. There was a time when the bulk of the world’s population was settled on the land. Will any one say that it was a better time to live in than now? When all were settled on the land, it was because there was no other way in which they could live. The methods of production were so primitive that only by consistent toil, from early morn to dewy eve, could a livelihood be won. That was the agricultural age, the elysium which the honorable member regrets, and to which he bids us return. What he does not recognize is that now we are living in the machine age; that man has wrested from nature her most cherished secrets; that he is now able to produce in one day as much as once took weeks. The bulk of mankind was then” compelled to grow food. But those days have passed and a few can now produce all the food that the many require. If most of our people were now to direct their attention to the production of food, as nine-tenths of them were doing even as little as 100 years ago, we should have a glut of primary products, which would prove beyond doubt that farming did not pay.
The gamut of men’s requirements and demands is limited by their circumstances; it is now immensely extended beyond the limits of a century ago, and is being further extended every day. We now require a thousand things unknown to our ancestors - pianos, motor cars, radios and picture films - and men released from the necessity of producing food are engaged in making them. The honorable member fails to understand that the world as we know it to-day differs very greatly from the world as it was. He does not understand that society to-day is a wonderful and complex thing; that wealth is being poured out so lavishly that the life of a poor man is more richly endowed today than was that of a nobleman in the 12th century. It is literally true that the workers of this country are better off than many in the middle classes in England of to-day. I am not saying that this is right or that it is wrong. This is not a* court of ethics; we are here to deal with facts. Now it is a fact that the tendency of humanity to congregate in great cities is world-wide. It is not a feature of life in protectionist countries alone, but is more noticeable in the highly civilized countries than in those at a less advanced stage. England is a freetrade country. It was once an agricultural country, but it is now dependent for three-fourths of its food requirements on overseas supplies. America has protection. By reason of its circumstances and its vast extent, there is naturally a bigger proportion of its population settled on the land. But that country, in which an ever diminishing proportion of the people is engaged in rural industries, has made itself a force in world politics by means of its great cities and the wealth that has been built up by the very system which the honorable member has denounced. Let us consider also tlie position of Russia - an agricultural country. There the people for all practical purposes are where they were 50 or 100 years ago, and probably’ where they will be in 100 years to come. It cannot’ for one moment be said that their condition is due solely to the new fangled phase of government known as the Soviet system. It was the same under the Czars. The bulk of the population of Russia is settled on the land. The standard of living there is low; the standard of culture, of education, is low. The condition of the people in agricultural Russia and in freetrade England will not bear comparison with that of the people of this country. It is clear that protection is not the prime cause of the troubles that exist in Australia. These are. general; they prevail everywhere; even in freetrade England, where agriculture is neglected, and in Russia where it is the principal industry. I shall not pretend that protection is a panacea for all industrial ills, or that it is more than a means to an end. But it certainly does afford an energetic, versatile and industrial people an opportunity to express themselves. It affords them a wider sphere for ambition. It gives them an opportunity to exercise that skill that is characteristic of our race.
If I were asked what was the immediate cause of our present troubles I should say - apart from our own sins - the sins of the Government - that it was the effect of the war. In our case, this has been accentuated by excessive taxation, by the unfavorable balance of trade which has been responsible for pouring into Australia £19,000,000 worth of imports in excess of exports and so depressed the local markets and thrown large numbers of people out of employment. We must add to these excessive borrowing and Government extravagance, both of which have exceeded all previous records - and the violation of the principle which should govern all administration, that those who raise the money should spend it, perhaps the most effective check upon extravagance. If one government raises money_ and another spends it, Parliament is helpless. It cannot criticize expenditure, or if it does the answer is made that the money has been handed over to another government for purposes that are entirely proper, and that is the end of it. But apart from these things for which we are responsible, the effects of the war overshadow all. It has impoverished the world; we have felt its repercussion in this distant land. Australia suffers because the world is very poor. The honorable member for Perth spoke as though Eng-, land were a paradise. It is not. As though low wages were a cure for all economic ends; as if the workers of this country were indulging in a senseless scramble for high wages without regard to circumstances; and as if, by some hocus pocus or reversal of the natural order of things, the position could be made different if wages were drastically cut down. It is clear he does not understand the position. What is the trouble in England? Last year a long drawn out industrial dispute there, culminated in the greatest industrial crisis in the history of the world. For a few days the industrial and commercial life of Great Britain was brought to a stand-still. What was the cause of that trouble ? The coal-miners, as we know, were asked to work for less than what they thought a fair and reasonable wage. Consequently they went on strike. Protection was not responsible for that. The honorable member for Perth also denounced the Arbitration Court. I remind him that the Arbitration Court had nothing to do with the industrial upheaval in Great Britain. I am not blaming any one for what happened in the Mother Country. I am merely stating the indisputable fact that it is impossible for the coalmining industry to prosper unless coal can be placed on the surface at a cost below the selling price, whether the policy of the country be protection or freetrade. The honorable member does not appreciate the fact that arbitration is not primarily responsible for the industrial unrest that is troubling Australia to-day. Arbitration deals with effects of industrial unrest; over the basic causes it has no control. America has not set up a system of arbitration for the settlement of industrial disputes. Strikes, when they occur there, are settled by other methods. In England also there are no industrial courts, but industrial turmoil occurs there from time to time. Arbitration is merely a means of dealing with disputes; if there are no arbitration courts there is no alternative but strikes. I do not pretend that the tariff is without flaw. I question if the Minister would say that it is; every human institution has its defects; but the duty of this Parliament is to decide what is the best policy foi- this country.
The honorable member for Perth railed against indirect taxation. His remarks in that connexion were most disappointing to me. By a process of reasoning entirely his own he showed that it would be possible to get more money for governmental purposes from a revenue tariff than from customs duties.
– And the burden on the people would not be so great.
– All I can say is that, if the high cost of living is due to customs taxation, then the greater the customs revenue the higher must be the cost of living. I do not champion indirect taxation, but think it perhaps a. necessary evil. If the tariff is really effective in protecting our industries it will not bring in . much revenue. The high cost of living in Australia is due to the high standard of living enjoyed by our people. What is the remedy? A lower standard of living? What is the matter with the world? Is it too rich, or too poor? Is it not a fact that, if the people of Europe were better off than they are, that is to say, if they now enjoyed the prosperity which was theirs before the war, it would be a very good thing for Australia ? The honorable member for Perth speaks about production. Let me say this to him.: It is a condition precedent to production, that there must be an effective demand. People do not produce merely, for the sake of producing. They produce in order to sell at a profit; if they are to achieve their purpose, there must be buyers. There cannot be an effective demand for any commodity unless the people have the means wherewith to purchase it, in the form of money or its equivalent. It follows, therefore, that the greater the effective demand the greater the impetus to production. Australia, with its 6,000,000 people, enjoying a high standard of living, creates a more effective demand for goods than do any other 6,000,000 people in the world, not even excepting the people of America. Certainly the demand they create is greater than any 6,000,000 of people in England or Russia which, according to the argument of the honorable member for Perth, should be a paradise, because there practically everybody is on the land- at all events, all but those who have not been put under it by the Soviet Government.
To reduce wages is to weaken the mainspring of industry. I fail to see how, by reducing the standard of living we are going to stimulate industry. If it were possible to raise the people of all countries to our own -standard of living, that, perhaps, would be a great step towords the peace of the world, and certainly towards the happiness and prosperity . of mankind. The most effective way to stimulate production is to create the demand. Production does spring, ab initio, out of nothing. It starts in response to a demand. Taking industry by and large, we can lay it down as a sound axiom that an effective demand is a condition precedent to production and an effective demand amongst the great mass of the people is measured by their wages, and what those wages will buy. I say emphatically that, no matter what, may be the cost of living in Australia, the wages of the working man here are higher and his conditions are better than in any other country, not even excepting America. The honorable member cannot, on a quiet review of the position, convince members of this Parliament, or any one else, that there is any practical alternative to our present fiscal policy. If the 6,000,000 of people in Australia turn their .backs on what has rightly come to be regarded as the national policy of this country, what would be the position? It is customary for some people to speak of Australia as if it were under a ban, and avoided by other countries as though smitten with a plague. Yet no other country has advanced in population and wealth so rapidly during the last 25 years. And it has achieved its present remarkable position under a policy of protection. I do not deny that there are defects in our fiscal system. All I say is that it is impossible to attain perfection under any system. It is easy, of course, to criticize the tariff, and say that here and there there are faults in it. I do not deny that instances of this can be cited. All I say is that taken by and large it is the best policy for this country. There is no such thing as a perfect policy. But I point out to the honorable member for Perth that he has not been able to show us one progressive country that has not the policy of protection. It is perfectly true that England adopted freetrade, and that it served her well for a time, but that many industries would not do better under- protection is now the conviction of many of her leading men. “We all admire the splendid character of the British. We realize that Great Britain is staggering under a colossal burden, and we wish most devoutly that her ‘ conditions were better than they are. In the position of England, unhappily there is not much to give satisfaction. The honorable member for Perth said nothing at all about the dole. Is that a mark of freetrade? Is that one of the blessings of the freetrade policy? At least we have not that in Australia.
As regards the tariff alterations proposed by the Minister. I shall at this stage content myself with mentioning three great industries which seem to be in a very serious, if not a parlous state. One of these is the great iron and steel industry - the basic industry of all. It depends no doubt upon coal, but coal, iron, and steel, grouped together, may fairly be regarded as symbolic of the machine agc. The Tariff Board in its admirable report has dealt with this industry at length and a perusal of that report should satisfy anybody in this country that whatever may have been said about inefficiency, such a charge cannot be laid at the door of the great industry instituted by the Broken Hill Proprietary Company, Hoskins’, and other firms engaged in the manufacture of iron and steel, lt is very necessary that this point should be emphasized. The Tariff Board in its report says -
That the company can fairly claim to have faithfully laid the foundation stone of a mighty industry, that the organization is good anil the expenditure of capital has only been made after careful consideration of the expressed opinion of. highly trained experts, and that wherever possible labour saving devices have been installed, giving a maximum output with a minimum of effect, and that it is the equal of any amongst its overseas competitors.
The industry generally in all its ramifications directly employs close on 12,000 persons. If we are to accept the Tariff Board’s opinion, we must realize, however, that it is in a most unsatisfactory position. The report says, “ The prospect is somewhat ominious to Australia, and calls for very serious consideration.” It must not be thought that because I have singled out the basic operations of the iron and steel industry that I think the efforts of the committee should be directed entirely to the raw material out of which machinery and other iron and steel goods are made. But this is a basic industry, in which an enormous amount of capital has been sunk. Those engaged in it have by their efforts done, and are doing, everything to ensure efficiency. The enterprise is enormously important to the country. It is impossible that Australia can come into its own unless upon the basis of an up-to-date and comprehensive iron and steel industry, which shall serve our purposes in peace and war. No community can call itself a nation unless it has, at its disposal and under its control, the means of carrying on operations to serve its purposes in time of peace and to defend itself in time of war.
I come now to the textile industry, which is typically Australian. Its relation to primary industries is direct and obvious; but, unfortunately, it is now in a most unsatisfactory state. We read a fortnight ago that the works at Marrickville had put off one shift, and last week that Messrs. Bond and Company had been compelled to close down their works. Whether that firm will be able to carry on in some reconstructed form I cannot say. At any rate, it has reached a crisis. If any enterprises are entitled to consideration, surely it is those that minister directly to. the primary industries of Australia. They go hand in hand with each other. Wool-growing is our greatest staple industry, and the textile industry is a natural development of wool production. Then there is cotton. We have done muck to encourage the growth of cotton, and there is no reason at all why Australia should not become a great cotton-producing country. These industries ought to flourish; but they are in a depressed state. I am not suggesting for one moment that there may not be causes other than the lack of more adequate tariff protection for the failure of Messrs. Bond and Company. I know nothing at all about the circumstances of this firm, but I say that it has done everything that an enterprising firm can do to build up the textile industry. It is in a bad way. Two thousand five hundred of its employees have been dismissed. “Whether they will be re-employed I do not know. There remains the timber industry. This is also a typical Australian industry. It came to my knowledge the other day that Oregon can be bought today in Sydney at a price nearly one half of that which ruled a year or so ago, and other soft timbers are being dumped upon our market at prices which make competition impossible. This has demoralized the timber industry of Australia. This is one of our native industries, and should be encouraged. If we ‘ever wake up sufficiently to the enormous importance of reafforestation and the vast potentialities of timber-growing as a crop, I venture to say that the industry will become one of the greatest in Australia.’ It is now so seriously menaced that, unless something is done, thousands of men will be thrown out of employment.
The tariff schedule proposes to deal with those three industries, and, of course, many others, by raising duties and in other ways. We can discuss each item on its merits when it comes before us; but as a general principle I take exception altogether to the Minister’s method of dealing with the reports of the Tariff Board. That board was established for a definite purpose, to deal with certain conditions about which there had been considerable complaint. This Parliament is necessarily not the best fitted institution to make inquiries into the circumstances of industry. We, who believe in protection and are not ashamed to advocate it whole-heartedly, are, nevertheless, reluctant to see assistance given where it is not deserved, and the- Tariff
Board was established in order to make diligent inquiries in no partisan spirit, and to make recommendations for the guidance of Parliament. The board has no interests at stake, no axe to grind. It is not affected by political bias. That was the reason for the introduction of the measure under which it was appointed. In my opinion, it was never intended, when that bill was introduced, that the Minister should alter the recommendations of the board before they were introduced into this Parliament. This committee was to be the final tribunal. If we thought that the board had not dealt adequately with any industry it was for us to express our opinion and do what we thought was necessary. . And in this committee the Minister for Trade and Customs could ask us to fix the rates of duties higher than were recommended by the board if, in his opinion, they were not high enough. In my opinion, the proper course to pursue is for the Minister to bring down a schedule as recommended by the Tariff Board. If he thinks that the duties ought to be higher, he can move to increase them. It is then competent for honorable members, if they agree with the Minister, to raise the duties ; but once the Minister has submitted a schedule of duties, honorable members are not in a position to increase any item in it. As it is now, if the Minister has reduced the rates recommended by the Tariff Board, it is impossible for us to move to raise them. That is not fair to the committee. In one set of items in the schedule before us, the Minister has reduced the duties below the rates recommended by the Tariff Board. In another case the rates in the schedule are higher than those recommended by the board. We do not want that. We want the recommendations of the board, and then we can hear what the Minister has to say, and come to a decision. I am nol criticizing the Minister in any adverse spirit, but, in my opinion, he ought not to have acted in this way. Those who believe in a protective policy are always willing to listen to anything that can be said from any quarter, especially from the Minister, who must be in a position to give us information. But as things are now, what are we to do when we are considering, say, a duty of 25s. and the Tariff Board has recommended 30s.? We are not allowed to move to increase the rate, and, therefore, can do nothing hut indulge in arid discussion. Of course, we can move to reduce rates; but that is nothing new; we have always had the right to do this. The intention of Parliament in creating a Tariff Board was that the board should supply it with a basis upon which it could act - recommendations arrived at after the most careful inquiries without bias and unaffected by any political consideration. The board’s reports which I have perused show abundant evidence of the most careful inquiry. I do not agree with all the board has recommended, but no one can 1 say that it is not carrying out its work in an admirable way. It would be far better if the Minister would give us an opportunity to discuss the tariff on the basis of the Tariff Board’s recommendations; if he did not agree with those recommendations we’ could hear his opinions and choose between them and the recommendations of the board.
I am pleased that this amended schedule has been submitted and I shall give the Minister general support. I shall not commit myself in any way to support every item. It is our duty to exercise the most diligent and careful scrutiny over the industries that are protected, so that we may get full value for our money. Those industries that are not efficient - there are some of them - inflict a grievous wrong on Australia and on other industries that would be a credit to any country in the world. For that reason we ought not to support by our votes and our influence industries which the Tariff Board has pointed out are not efficient. The Minister knows very well that one industry was distinctly referred to as not being efficient. We ought to be told what that industry is. The Minister has no business to withhold that information from the committee. It was given by the board for a definite purpose.
– It was not given to me.
– I hope the Minister will agree that if the information was given to him, as I am led to believe it has been, it is his duty to divulge it to Parliament. Does the Minister agree with that?
– It depends on the conditions under which the information was given.
.- In view of the report of the Tariff Board, the existing unemployment, the country’s adverse trade balance and the general admission that the tariff has failed, I feel like confining my remarks on this debate to one sentence, “I told you so,” and to the simple question, “ What are you going to do about it?” The honorable member for Perth (Mr. Mann) has given a constructive and intelligent address on the present situation, but the right honorable member for North Sydney (Mr. Hughes) has simply floundered from pillar to post making references to Russia and other countries, and not offering one constructive suggestion to remedy our present economic position. One was entitled to expect from a gentleman of his experience some constructive suggestion; but although he endeavoured to make the committee feel that what he was saying was of constructive value, he failed to put forward any practical suggestion. He has advised us to consider the facts. Let us have a glance at the facts. I was in this Parliament when the Massey Greene tariff was introduced. We were assured that it would decrease importations and build up a market for the primary producers of Australia; that it would not affect primary production; and that as the result of it there would be uo unemployed in Australia. Of course, I did not believe that such results would follow the imposition of that, which was then the highest tariff that had been tabled in the Commonwealth Parliament, and I claim to-day that the results, have been exactly the opposite of those which were predicted by the then Minister. We. have had an increase in importations. The real effect of the tariff has been to decrease our exportation^, increase our unemployment, and bring about an adverse trade balance. If that tariff had done for Australia what its supporters claimed it would do, there would have been little or no importation of goods and consequently little customs revenue. We are advised that because other countries have their tariffs, we, too, must have one. It is not sufficient to tell any thinking man that in the United States of America there is operating a high tariff without pointing to the other conditions which exist in America. The two countries, America and Australia, are not alike. For instance, wages in America are based on results, whereas in Australia our wages are based on the cost of living. We have an Arbitration Court which merely assesses the cost of living in order to fix rates of wages. It is not an arbitration court; it is simply an assessing court. A proper arbitration court would take into consideration the special circumstances of an industry. It would ask, “ If the industry pays so much wages, what will be left to the manufacturer? How can he sell his goods to the community?” All these things ought to be taken into consideration. When we claim that Australia must show a white country’s efficiency in order to maintain its White Australia policy, we are told that we are advocates of black labour. As a matter of fact, honorable members must know that it is not black countries but the white countries that are our competitors. Honorable members who are great protectionists are also great believers in the Tariff Board. They have in the past stated their willingness to accept every recommendation made by it; but I want to know whether they are willing to abide by one strong recommendation made by the board which calls for attention. Perhaps in their perusal of the annual report of the board they have taken to heart the following paragraph : -
It is the profound desire of the board that this aspect of Australian industry should be considered without imparting into the matter political consideration and charging the board with any particular bias. The situation is too critical to waste time on such trumpedup charges and calls for the serious consideration of all parties, classes, and individuals in the Commonwealth, otherwise as the board has previously said, it can see nothing but disaster ahead.
– To what is the board referring?
– As the honorable member seems to be ignorant of the contents of the board’s report, I shall read the whole of the paragraph. It states -
The Abuse of Protection.
The board regrets being compelled to place on record its conclusions, arrived at after the most intimate touch with all phases of industry within the Commonwealth, that there isa prevailing tendency which is calculated to abuse the protective system, and by forcing the pace ‘under disadvantageous conditions to actually endanger the efficacy of the system. This tendency is not confined to one section alone, but is common to the industrial unions, the secondary producers and the primary producers of the Commonwealth. It is proposed to deal later with each group separately and to justify this far-reaching assertion. The board is profoundly convinced that if Australian industry is tobe maintained and safeguarded, it is absolutely essential that the leaders of industrial unions should recognize this serious menace of rising costs of production which the board has indicated. The board wishes it to be understood that it is not desirous of taking any side in the industrial disputes within the Commonwealth, but it cannot be blind to the fact that simultaneously with the board being asked to consider large increases in duties on such important industries as timber, engineering, iron and steel, brushware, copper (bonus), butter and cheese, glassware, clothing, . textiles, with the object of enabling such industries to exist, applications had been lodged and Arbitration Courts - Federal and State - had been, and. were; being asked to grant not only increased wages but further improved conditions and shorter hours, and State Governments were introducing legislation at the time which further added to the already high cost of production.
It must be borne in mind that evidenceat the public inquiries revealed the fact that all these and other industries were in jeopardy that some of those engaged as proprietors were threatened with ruin, and that unemployment wasserious.
Then follows the portion I have already quoted. Perhaps that is clear to the honorable member for Maribyrnong.
On several occasions I have pointed out that there are two great combines - the manufacturers and the unions which represent the employees - sheltering behind the tariff walls built up by this Parliament. As the Tariff Board distinctly states, these two bodies have at the expense of the consumer, and the primary producers, abused the protection afforded to them. That is the phase of the question we should study if the Government’s tariff’s proposals are to be properly considered. The right honorable member for North Sydney spoke of our standard of living. Aman who has much capital and chooses to live on it, can have a lively time for a short while; but this nation is living on its capital, and a nation or an individual that is living on his capital has not much to boast about. Nations, like the average individual, should live on earnings, not on capital. For the information of the committee I wish to read the following extract from Circular Read Chronicle of Tasmania, in which there is a good deal of common sense -
Has Australia for tlie last 27 years been engaged in a great fight between her right hand, and the left ? The Minister for Trade and Customs, Mr. Pratten, seems to think so, and lias some warrant for his opinion. Since its inception at the beginning of the century, now more than a quarter gone, the Australian Parliament has devoted more time to the tariff than to anything else. We have been passing real tariffs ever since, and each time the same tiling has happened. Imports instead of decreasing, have increased.
Mr. Pratten was the latest man to introduce a real tariff, and we gave him a free hand, just let him do as he liked without any discussion in Parliament or anything of the kind, though there is a sort of understanding that there is to be one some day. And yet Mr. Pratten is faced with the same old astounding result; imports are increasing faster since his new tariff than ever they did before, which is enough to make Mr. Pratten scratch his head. As u result of the scratching he has come to the conclusion that our borrowing habit is to blame. The only thing to which the Commonwealth Parliament has devoted more energy than passing tariffs iri borrowing money. Now Mr. Pratten works it out that there are only three forms in which the money we borrow can come to Australia; gold, securities, and goods. Cold and securities we export, so they can be left out of the calculation. So, by u good deal of head scratching a really clever man can see that when we borrow money from England we must take it in goods (bar what stays in England to pay interest on what we have borrowed before) .
Mr. Pratten has worked it out, and he asks indignantly what is the earthly use of his passing tariffs to keep goods out of Australia, when his colleague, Dr. Earle Page, the Treasurer, floats loans at a still greater rate to force thom to come iu? Dr. Earle Page will no doubt ask - the freetrade newspapers are already asking it fur him - what is the earthly use of his borrowing money to develop Australia when Mr. Pratten imposes duties to increase the cost of goods which Dr. Earle Page is introducing to develop her with?
We may take it that Dr. Earle Page is Australia’s right hand, and Mr. Pratten her left; and that they are engaged in a great battle. “ How can 1 hope to win,” asks Mr. Pratten plaintively, “ when the right hand, who is stronger than I, keeps hitting back? There is no sense in it.” Neither he nor Dr. Earle Page aor anybody else seems to think that the only sensible thing for Australia to do would be to give up fighting herself - that is to say, give up borrowing money and increasing tariffs - and sot to work producing wealth with both hands instead.
That, is good advice. The Australian workmen would be entitled to the wages they are now receiving if their production leaves a margin sufficiently large to enable industry to be properly carried on. The American manufacturers pay wages as high as, and in many cases higher than the wages we pay, and yet we have to set up against them items in our tariff ranging from 20 per cent, to 60 per cent. Their goods are produced, not by black, but by efficient white labour, and with the use of uptodate machinery. I have shown honorable members that the American manufacturer buys in the same market that we do his raw material for the manufacture of rubber tyres, and can sell a small Ford tire f.o.b. New York for £1 5s. 6d., while we require a duty of £1 10s. 7d. on it entering Australia. That is tantamount to a declaration of our inefficiency. Does Australia benefit from the manufacture of tires in Melbourne or Sydney? No. The transport of this country has to pay for it. Our production is handicapped because of the costliness of everything that runs on wheels. Instances similar to this could be multiplied. No person objects to Australians being paid good wages so long as they earn them, but until we adopt the basis of fixing wages according to the principle of productive value, we shall not bc on firm ground. On the basis of the cost of living it would be possible to put Australia in an insular position. “As the article which I have read points out, a greater amount of time has been spent by this Parliament in considering revisions of the tariff than on any other subject. What does it all mean ^ Australia? We have had a drought, and our exports will decline still further than they have already declined, and our adverse balance is estimated this year to be between £40,000,000 and £50,000,000.
What can be done by our secondary industries to meet the situation with which we shall be faced? Will they be responsible for the introduction of any more wealth ? Not a penny. During this year it will be made apparent that they have so far been carried on the back of primary productions. It is not to be’ wondered at that there has been a slackening in our exports. Honorable members cannot dispute that fact. A list of Australia’s exports for* the year 1926-27, which has been compiled from Commonwealth official statistics and issued by the Town and Country Union of New South Wales, shows that the value of the exports of primary production was £144,775,511, and that that of all exports, apart from primary production, was only £10,168,293. Who provides the money which makes it possible for emplyoment to the found for those who produce that £10,168,293 worth of goods? The primary producer.
The State of Western Australia has been struggling under a great hardship in that she has had to buy in the clearest market, and sell her produce in open competition with every other nation. The right honorable member for North Sydney (Mr. Hughes) on more than one occasion has declared his commercial faith in the following terms: “ We want to buy in the cheapest and sell in the dearest market.” He said once that we ought to pray for a rise in the prices of the goods that we had to sell, and for cheapness in those that we needed to buy. The day of reckoning is close at hand. Last year Western Australia purchased from the eastern States goods to the value of £9,000,000, while those States bought from her to the value of only £1,500,000. The adverse balance against her was, therefore, £7,500,000. Out of that £9,000,000, if allowed to buy in the cheapest market, she would have saved at least £2,500,000 for developmental purposes. Personally, I do not wish to see the establishment of factories in Western Australia under the conditions in which they are maintained in the eastern States. They are an incubus on the country. Western Australia was prevented from having factories by the eastern States manufacturers. It proved to be one of the best blessings that could possibly have beel bestowed, although it was not the result of any good intention on the part of the eastern States - because it forced her people on to the land to produce real wealth that would maintain and feed her people, and export her surplus, bringing new capital into the State. If that and every other State had failed to have a yield this year, who would have paid for Australia’s costly manufactures; and whence would have come the money necessary to meet our interest bill and other obligations?. Factories would have closed down right and left. The right honorable member for North Sydney said that England lives almost entirely on her manufactures. Quite so. Mauritius lives almost entirely on her production of sugar, and Fiji formerly occupied a similar position in relation to her banana industry. Can Australia expect to live on her manufactures? She cannot produce for her own needs without hobbling and handicapping her own people. Primary production could be made Australia’s emancipation. The world will not take our manufactured goods because the cost of production is too great. But we could treble the output of our primary products, which we can sell, if they were not handicapped in order to foster secondary industries.
– If there were no local secondary industries we should not be able to purchase our goods as cheaply as we do now. The importer would raise the prices of those goods just as he did previously.
– If we were not saddled with these exotic industries; or, as the honorable member for Perth (Mr. Mann) has said, if we had only a few, such as munitions supply and others that are necessary to the defence of Australia, our potential wealth is such that there would not be any rise in the cost of living. A revenue tariff, of course, is necessary. A vicious circle has been created. The Treasurer (Dr. Earle Page) has advised those primary producers who are not already there to get into that vicious circle so as to make it complete. What would happen if they did?
– The primary producer is in it to a big extent.
– He has been forced into it by the burdens which have been placed upon him. Common justice demands the policy which the Treasurer suggested, but statemanship repudiates it. The primary producer has as much right to receive bounties and tariff protection as has any other section.
– He does get them when he wants them.
– The exporting primary, industries are in no sense comparable with the non-exporting secondary or primary industries. You cannot protect export industries, but they must bear the cost of the protection of other industries. Honorable members, however, will continue this’ blind orgy of meddle and muddle, disregarding the warnings of even their precious Tariff Board, and ignoring economic facts, until Australia is compelled to walk a much harder road than that on which it is travelling now. This country’s resources will enable it to stand up to a great deal, but unless we are prepared to base payments Upon results, we shall be unable to meet our great obligations.
The right honorable member for North Sydney spoke of the high standards of living enjoyed by almost every individual in the community. Burdensome tariff duties have been in operation mostly since the war, and during that period Australia enjoyed an apparent prosperity. Our people have been spending easy money that came to them in various ways - the high prices of our wool and wheat during the war, the subsequent distribution of the accumulated profits of the wool and wheat pools, the back pay drawn by the soldiers, the war gratuity, and heavy expenditure upon war service homes. All these extraordinary disbursements have created an evanescent prosperity ; we have been “ kidding “ ourselves that we have been making money and spending income. No Parliament has power to maintain the prices of wool and wheat, the two commodities from which the income of the nation is mainly derived. The primary producers are obliged to accept the world’s market price for their produce, and upon the proceeds from this source our credit abroad is based. The burden that the export industries can carry is limited. It would not matter if only a few industries were being protected; but when every factory has to be bolstered up with high duties, it is impossible for the primary producers, who have to sell their surplus in the markets of the world, to carry the burden and pay interest on £1,000,000,000 of debt.
I appeal to members of the committee to put aside their shibboleths and do some serious thinking on this problem. It is idle to answer me by saying that I want to see a black Australia. I want
Australia to remain white, and if the workmen were advised differently this country could become a paradise for the white worker. Let a minimum wage be prescribed if necessary, but pay every many according to results so that each may, according to his physical and melita! powers, earn as much as he can. Every man’s labour should show a profit, and the country should get something from his services.
– And what would the honorable member do with the old men? After they had made a profit, would the honorable member send them to the graveyard as the Americans are said to do?
– American industrial efficiency has been often referred to during this debate. The American community puts this argument to the working man -
The more you produce per man the more there is to divide per family - that is our philosophy. Wages, dividends, and profits are up, and costs are down. The increase in the use of machinery has not meant unemployment. When a magnetic crane handled by two men began doing tlie work done the day previously by 128 men, it did not mean that 12G men were discharged.
That view is the reverse of that which is taken in Australia. Our working man thinks that if the hours of labour are reduced there will be more work available and less unemployment. No greater fallacy was ever conceived by thinking nien. The greater the production, the greater the employment. I have said before that if we want to go forward, we must first step backward, as it is often necessary to pull down in order to build up. If the incomes of all of us, whether from wages or profits, were reduced by 33$ per cent., there would be no unemployment in this country, we would be able to sell our manufactured goods abroad- and develop our primary industries. The 66$ per cent, would buy as much as the 100 per cent, buys to-day, because the purchasing power of money would be greater. Of course, I am asked where this policy of reduction is to commence. My answer is that if our heads do not prompt us to make a start, our stomachs will’ later on. It is all very well to boast of our standard of living, but of what advantage is it to us, if our secondary industries cannot compete with those of other countries, if we are able to maintain only a limited population, and cannot settle more migrants on the land?
The Australian people must abandon some of their impracticable and uneconomic ideals and face the facts. I have never advocated that this country should dispense with its secondary industries; they should flourish equally with the primary industries, but the latter maintain our people; they get no protection and bear the load of protection given to other industries. Our secondary industries have, in their distance from the old world, a natural protection that ought to be sufficient. The water freight ought to be a distinct protection to Australian manufacturers.
– Is that not overcome by mass production in the other parts of the world? The honorable member knows it is?
– There is much in what the honorable member says. We have a lot of tiddly-winking little factories doing work here that could be better clone by a less number of large ones. ‘We should also practice mass production.
– ‘The honorable member should not talk about restricting the number of factories. That would restrict the distribution, of profits.
– The honorable member’s attitude is un-Australian. What is protection to secondary industries is a burden on primary industry. He must carry his products to the market further than other competitors. Why should the secondary manufacturer be given protection at the expense of the man who goes on the land, and. endures the labour of clearing, burning off, ploughing and growing crops? This excessive protection is the cause of the present centralization in the big cities; and that is bad . We find that the worker in the city, who after all is being paid from the products of the land, votes for the continuance of protection because it is the immediate means of providing him with his wages. He approaches the Arbitration Court and asks for higher wages. He proves that the cost of living has gone up, and so he receives his in crease. When wages go up the manufacturer goes to his faithful friend, the Minister for Customs, and obtains just as much extra protection as he needs to meet the increased wages. Who pays for this, if not the primary producer? The farmer is not only saddled with the duty on machinery, which appears striking because it is most obvious, but protection also imposes many other extra charges upon him. He has to pay a higher railway freight because the railway workers demand higher wages, and he has to pay more to his employee because the latter has to buy dearer clothes. Thus it has gone on until we have an adverse balance this year of £19,000,000. The farmer has not been, able to keep up the volume of exports because these burdens have been against him, and secondary industries have not been able to make good this loss. I ask honorable members to consider in what lies the real interest of Australia - the fostering and developing of these exotic industries that are penalizing a young country like this, or the development of those industries the products of which we are able to sell overseas ?
The subjects of immigration and population are very important, and I say as a man who was born an’d bred on the land, who has always been interested in it, and who knows what it is to make a living on it, that it is futile to expect people to come from the Old Country and eke out a living on the land under the conditions which we have set up in Australia. The high standard of living that has been spoken of is forcing up the cost of production to such a level that we cannot find a market for our products. It is unreasonable to take up, as we have done, the attitude that we should set up a high wall of protection against anything we would buy from other countries and then expect those other countries to give us a free port for our products. We are running the risk of incurring reprisals. I am in sympathy with all reductions in the tariff, and I am going to vote against any increases in it, but there is one item I would like the Minister to examine very closely before it is brought into- effect, and that is the duty on coffee. A great deal of coffee comes to Australia from the Dutch East Indies. The imposition of a duty on this article will be a further heavy blow to Western Australia. The Dutch Eas< Indies constitute an important natural market for the products of Western Australia. The people there are buying our flour, wheat, fruit, and potatoes; they are helping our immigrants to live on the land, and they are giving us a free port for our products. The Dutch people are giving consideration to the adoption of reprisals by way of duties on our goods. A similar thing happened when we put the embargo on the importation of bananas from Fiji. We lost the trade with those islands, and it has nor gone to New Zealand or somewhere else. It is unreasonable to think that a country will continue to give us free ports for our goods, while we practically close our ports against them. If we are going to consult our best interests, we should be very care ful before we close our ports. The people of other countries are not asleep, and when Ave take action against them, Ave can expect them to take action against us.
– I hope the Dutch people do not forget that their tea and kapok is coming in free.
– I am not forgetting that, but I would like honorable members to give some thought to the subject of trade relations. The Dutch people were terribly incensed when Ave imposed a duty of Ss. id. a cental on bananas for the sake of protecting a few bunchy-top bananas grown in tlie North. We in Western Australia were glad to make some reciprocal arrangement Avith the people in the Dutch East Indies, but the Commonwealth Government by its action is taking that opportunity away from us. This schedule, if agreed to, will give another blow to trade in Western Australia, and I hope the House will give much consideration to the matter before offence is given to these people who are good customers. It is not sufficient that I and a £&w other members in this House are able to say, “I told you so.” This scheme of high protection has utterly failed, and unless wo retrace our .steps, the country will be plunged into further difficulties.
– I should like to refer briefly to an anomaly in the customs law which Avas brought forcibly home to those affected when the amended schedule was laid on the table on the 24th November. On that day two overseas vessels, the Oronsay and the Anchises, had discharged the whole of their cargo, Avith the exception of that consigned to the port of Brisbane, at the old rates; but the cargo consigned to Brisbane Avas dutiable at the new rates of duty. Thus the importers of Queensland alone were called upon to pay at the amended rates. This is an old story - a long-standing complaint - but I make no apology for bringing it before the committee again. Recently I asked the Minister for Trade and Customs whether a decision had been arrived at Avith reference to the strong recommendations that had been made for uniformity, by an amendment of the Customs Act, to enable imports to be made dutiable at the rate existing on the day of the vessel’s arrival at the first port of call in Australia. The. Minister stated that the representations made had received careful and sympathetic consideration; that the matter had several complications and that the action desired would remove one set of anomalies only to create others.
– Did the Minister mention any of those anomalies?
– He mentioned some of them. It would, he added, cause the utmost confusion to all concerned at the time of tariff revision and be extremely difficult from the administrative point of view. Goods in bond at the time of tariff alterations could bc cleared at any future time at the old rates. If goods in bond were excluded it would mean differential treatment between bonded and other goods. Similar goods would be landing at a port at the same time and paying different rates of duty. . I understood tlie Minister to refer to the possibility under the proposed amendment of a vessel arriving at. Fremantle with cargo dutiable for all ports at rates existing on the date of its arrival and reaching Melbourne on the same day as a vessel making Melbourne its first port of. call. - Between the departure .of the first vessel from Fremantle and its arrival at Melbourne a new tariff schedule had been introduced. Obviously the same cargo on these two vesselswould be subject to different rates of duty. At the moment such an anomaly exists in connexion with the same cargo on one vessel. In the case of tariff reductions, everything then in Australian waters would have to pay the higher duty in spite of the reduction in the tariff. This objection, I would point out, does not command serious consideration, as reductions in tariff do not come into force until passed by Parliament. When at any time a by-law was made which reduced the duty, and such by-laws were frequent, nothing already in Australian waters at the time could obtain the benefit of the by-law. Personally, I fail entirely to understand this particular contention of the Minister. The Chambers of Commerce of Australia, said the Minister, were not unanimous as to the advisability of the proposed change, and it had been suggested by one important chamber that the matter needed further deliberation. Under all these circumstances it was not proposed to take any action at present in the direction mentioned.
This question has been raised from time to time since the introduction of the first federal tariff. Those who have urged the amendment maintain that they are seeking for adherence to various sections of the Constitution: Section 88 provides -
Uniform duties of customs shall be imposed within two years after the establishment of the Commonwealth.
Section 92 states -
On the imposition of uniform duties of customs, trade, commerce and intercourse among the States …. shall be absolutely free.
Section 99 provides that
The Commonwealth shall not …. give preference to one State or any part thereof over another State ….
At the 22nd annual conference of the Associated Chambers of Commerce, held in 1926, . the following resolution was passed : -
That it be a recommendation to the Commonwealth Parliament that the Customs Act be amended to provide that as soon as an overseas vessel has arrived and reported to the customs at its first plaee of call, the rate of duty enforced on that date shall be the legal rate for the whole of the ship’s cargo, and that the Customs Act be amended as follows : -
Amend section 132 of the Customs Act 1901-1925 to read - “ Except as otherwise provided in this act all import duties shall he paid at the rate in force when the ship, boat, or aircraft by which the goods were imported was reported at the ship’s, boat’s, or aircraft’s first place of call in Australia on the voyage on which the goods were brought to Australia.” “As to goods imported by post, duty shall be paid at the rate in force on the date the ship, boat or aircraft carrying the mail in which the goods were contained was reported at the ship’s, boat’s, or aircraft’s first place of call in Australia.”
This resolution was carried unanimously. The Prime Minister, before proceeding to Britain to attend the last Imperial conference in 1926, visited Queensland and addressed the Chamber of Commerce. The question of uniform duties was brought up’. The Prime Minister expressed sympathy, and advised the members of the Brisbane Chamber to seek an amendment of the Customs Act, as only by so doing could they secure the relief desired. On the 12th January of this year I introduced a deputation from the Brisbane Chamber of Commerce to the Minister (Mr. Pratten), who was visiting Brisbane. This matter was again discussed at great length. Disappointment was expressed that the Government had apparently ignored the representations of the Associated Chambers of Commerce of Australia as expressed in the resolution passed at the annual conference held in Sydney in 1926. The Minister, in replying to the deputation, referred to the question of uniform duties as an old sore. So old, in fact, that, to use his own words, it had grown whiskers. He reminded the deputation, also, that there were two, points involved - the constitutional aspect and the question of departmental administration. He expressed the opinion that the associated Chambers should get some interpretation of the legal position with regard to uniformity of duties, and gave an assurance that he would, upon his return to Melbourne, refer the whole matter to the Crown law authorities. At the 23rd annual conference of the Associated Chamber of Commerce of Australia held at Perth last March, the following resolution was carried: - 1. (a) In the opinion of this conference the customs regulations resulting in varying charges for duty against the same cargo in the same vessels operate harshly as between State and State.
The opinion of Mr. T. S. OHalloran K.C., was obtainod. He concluded that there was nothing in the constitution to prevent an alteration of section 132 of the Customs Act in such a way as to give effect to the desire of the Associated Chambers of Commerce. The opinion of counsel was referred to the Chambers of Commerce in the capital cities. The Sydney chamber considers that there is full justification for pressing. the Commonwealth Government to have the necessary alteration made in the Customs Act. The Melbourne chamber is of the opinion that many difficulties are in the way of carrying out the resolution, and suggests that as the matter is of such importance, it will be better to defer taking action with the Government until after the next conference. This would give the various chambers an opportunity to consider it fully, and delegates to the conference would be able to discuss it with full knowledge of the views of their respective chambers. The Brisbane chamber presumes the matter will be proceeded with by submitting the resolution and copy of counsel’s opinion to the Minister, and, if the opinion of the Crown Law officers coincides with it, an alteration to the Customs Act in the direction desired would relieve the State of a very great disadvantage under which it has been suffering. The Adelaide chamber considers that the present is not an opportune time to approach the Federal Government with a request to amend section 132 of the Customs Act. Perth chamber reconfirms its support of the resolution, while the Hobart chamber holds that the Minister should be asked to reconsider the position in the light of counsel’s opinion, and consult with the Federal Attorney-General. The position now is that the Attorney-General agrees with Mr. O’Halloran’s view that there is no constitutional objection to the making of the change desired by the associated chambers. The constitutional objection which has been raised so often’ is wiped away. To my mind, the existing practice with regard to the incidence of the tariff taxation is unconstitutional. TheMinister maintains, however, that new anomalies would arise and the administrative difficulties of the department would, be greatly increased if the proposed amendment to section 132 of the Customs Act were made. No doubt the matter will be reintroduced at the next conference of the Associated Chambers to be held at Hobart early next year. I should like to have the Minister’s assurance that the fullest consideration will bc given to the resolutions passed at both the twenty-second and twenty- third annual meetings of the Associated Chambers in conjunction with the opinion given by Mr. O’Halloran and confirmed by the Attorney-General, and that the Minister will communicate with the President of the Associated Chambers of Australia without delay. I would also ask that details be given of the administrative difficulties and fresh anomalies which the Minister affirms would arise if the suggested amendment were made in the Customs Act. This will enable the conference to arrive at a definite and final conclusion. I feel sure that the Government realizes that full and sympathetic consideration should be given to the requests of the conference, representative as it will be, of the commercial life of the nation.
I do not intend to refer in detail to the tariff schedule, but I should like to read one letter that I have received from the chairman of directors of a firm of structural steel contractors, engineers and iron-founders, of Brisbane. It is dated 1st December, 1927, and reads -
We have taken the personal opportunity of wiring you as follow: -
Extra tariff steel not justified; will delay building progress in Queensland. You know already delays automatic exchange.
The above wire, as you will understand, is in relation to the increase from 48a. to 70s. per ton on steel structural sections, which is in our own, and the ironmasters’ opinion, a severe set back to Australia, and Queensland in particular.
We would be the last to turn down Australian manufactued goods, -but in this vase vrc appeal for a fair deal for Queensland employers and employees, which appeal is indeed applicable to the whole of Australia, from the writer’s own personal ‘knowledge, having just returned from a visit to Sydney and Melbourne.
The Broken Hill Proprietary cannot supply the demand for structural steel, and it is, therefore, unfair to (five further protection, at least until they give -evidence of becoming more efficient.
As an instance, we would state, that it took them some eight months to supply us with SOO tons of steel for a contract, which we could have obtained from Gi-eat Britain in three months in one ship. That they cannot supply the -demand, is also proved by the -stocks which they hold on hand, and which a fortnight ago, did not equal by half the amount -of our own stock, and we arc only a small firm.
We have tried for Australian rolled sections on every occasion before placing any orders, and in the majority of coses, the delivery has been double what could be obtained elsewhere, and in one cose we were notified that no orders for Queensland could be accepted.
The present situation is such, that the extra tariff will make the importation of steel prohibitive, and as the demand cannot be supplied in Australia, we would ask, what are we to do with our employees?
We hare laid ourselves out for the specialization of structural steel work, and consider that our appeal should have some consideration, otherwise we say emphatically that this trade is doomed, and as the particular class of machinery used cannot be adapted for any other purpose, we must go out of existence.
We earnestly appeal to you to use every endeavour to right matters, when wc can look forward with confidence to the future.
I particularly wish the Minister to deal with the points raised in that letter, and to give a reply later in the debate. If there is one industry that should be protected under the tariff, it is the great key iron and steel industry, but the statements contained in the letter I have just received give me considerable concern. Any other remarks that I wish to make regarding the schedule I shall defer until the - individual items are under discussion.
Motion (by Mr. Bruce) agreed to-
That the House at its rising adjourn until
I I o’clock a.m. to-morrow.
House adjourned at 11 p.m.
Cite as: Australia, House of Representatives, Debates, 5 December 1927, viewed 22 October 2017, <http://historichansard.net/hofreps/1927/19271205_reps_10_117/>.