10th Parliament · 1st Session
Mr. Speaker (Hon. Sir littleton Groom) took the chair at 11 a.m. and read prayers.
Mr. MACKAY, as chairman, brought up reports of the Parliamentary Standing Committee on Public Works, together with minutes of evidence relating to -
Ordered to be printed.
– A few days ago the
Minister for Home and Territories promised to lay on the table of the Library the papers relating to the purchase of billiard tables for Parliament House. The papers are not yet in the Library. Will the Minister make them available to-day, because I have been asked to move the adjournment of the House so that the imposition which has taken place in connexion with this contract may be exposed ?
– I promised to make the papers available to the honorable member, not to lay them on the table of the Library. I shall see that the honorable member has access to the file to-day.
– Has the notice of the
Prime Minister been drawn to a statement made by Mr. Beckett, the Minister for Forests in Victoria, as reported in yesterday’s Age, in which he made a series of complaints against the Commonwealth Government, including the following : -
Recently the Commonwealth had created a Forestry Bureau and appointed a DirectorGeneral of Forests, whereas the forests now under the control of the Commonwealth were about the size of a cabbage patch. Tofind work for this bureau the Commonwealth proposes to take over control of all the forest activities of the States. He had yet to discover what was the good purpose of this.
Will the Prime Minister enlighten the House as to what is intended by the establishment of the Forestry Bureau in Canberra?
– My attention has been drawn to the statement by Mr. Beckett, and I can only think that he was not fully seised of the facts when he so misrepresented the purposes of the Commonwealth Forestry Bureau. This institution has been established in Canberra to enable the proper training of foresters for the control and management of forests throughout Australia. After endeavours extending over several years an agreement was arrived at about two years ago between the Commonwealth and the States to provide facilities for the proper training of Australian citizens in the science of forestry.Pending the completion of the forestry school at Canberra the work was carried on temporarily in Adelaide by courtesy of the Adelaide university. The Forestry Bureauis now in operation at Canberra and is training students for the various States who, upon completing their course, will return to their States, which will reap the full benefit of their knowledge.
– Are not students from every State attending the school ?
– Yes. There is no justification for the suggestion that in establishing this bureau the Commonwealth has any intention of endeavouring to take endeavouringto take from the individual States the control of their forests. The Commonwealth is merely making an effort, in co-operation with the States, to ensure the proper training of foresters for the benefit of Australia as a whole.
Cost of Hotels - Furnishing of Residencies of Governor-General and Prime Minister - Dangerous Roads
– On the 30th November I, as Chairman of the Public Works Committee, asked these questions of the Minister for Home and Territories: -
The Minister replied on the 20th December -
In the third annual report of the Federal Capital Commission, the following costs are mentioned: - Hotel Ainslie, £27,996 as against £24,847 mentioned in the answer to my question; Hotel Wallington, £25,840 as against £23,166. There is a serious discrepancy between the figures supplied by the Minister and those contained in the commission’s report. The Public Works Committee takes a very serious view of this, and Ishallbe glad if the Minister will have full inquiries made to ascertain how apparently misleading information was furnished in answer to my questions.
– I had noticed the disparity between the two sets of figures, and I shall certainly have full inquiries made as to the reason for it.
– In view of the statements that have been made from time to time in regard to the excessive cost of Canberra buildings, I ask the Minister for Home and Territories to urge the Public Accounts Committee to inquire into these matters immediately, so that Parliament may know if everything is right.
– I cannot refer a matter to either the Public Works Committee or the Public Accounts Committee ; that can be done only by the executive. But I can order a full inquiry into the matter of which complaint has been made.
– In view of the expenditure of £23,000 in furnishing the Governor-General’s residence at Yarralumla and the Prime Minister’s residence, without tenders being called, and the payment of a large sum in fees and expenses to the lady who was appointed to supervise the furnishing, will the Minister for Home and Territories have a full inquiry made into this matter, especially as Senator Elliott stated in another place that the large expenditure on the remodelling of Yarralumla homestead suggested corruption?
– I have already supplied the honorable member with full particulars of the costs in connexion with both the Governor-General’s residence and the Prime Minister’s residence, and of the payments in connexion with the furnishing of both. If the honorable member desires any further specific information, I ask him to place a question upon the notice paper.
– I understand that Mrs. Lane-Poole, who was in charge of the furnishing of the two residences, is the wife of a highly paid public servant. Does the Minister for Home and Territories consider it fair that she should have been paid nearly £1,500 for her services? Apart from the fact that she, as the wife of a public servant, is depriving somebody else of work, does not the Minister think that £1,500 was an excessive amount for the service that was rendered?
– I ask the honorable member to give notice of the question.
– As the curves, crossings and narrowness of many of the Canberra roads make them quite unsuitable for motor traffic, will the Minister for Home and Territories inquire whether it is possible to have some of them redesigned and widened before the hedges and trees with which they are lined grow to such an extent as to render them still more dangerous to all who have to use them?
– I said in answer to a question regarding the fatal accident that occurred on the Queanbeyan-Canberra road on Sunday last, that inquiries would be made to ascertain whether some of the more dangerous intersections in the city can be made safer for motorists and pedestrians.
Precautions Against Entericfever
– In view of the grave risk which is causing anxiety to medical men of an outbreak of enteric fever among the men employed in the construction of the North-South railway, will the Minister for Health take steps, first, for the purpose of isolating any “ carriers “ of the disease who may be among the men; and, secondly, for the compulsory inoculation of the men against enteric fever?
-Full inquiries have been made in regard to the possible outbreak of enteric fever in connexion with the construction of this line. Certain arrangements have been made by the Department of Works andRailways after consultation with the Department of Health, but compulsory inoculation is not possible under either State or Federal law. Every effort will be made to induce the men to submit to inoculation, which is certainly a preventive for two years.
– Some days ago the Prime Minister intimated to me that the Government intended to introduce a bill to amend the Workmen’s Compensation Act. Will that measure be submitted to Parliament before the Christmas recess?
– Will the bill to amend the Arbitration and Conciliation Act be circulated before we adjourn for the Christmas vacation?
– It is proposed to ask for leave to move the motion for the second reading of the bill to-morrow.
– Will the Minister for Trade and Customs institute inquiries to ascertain the extent to which the power to censor literature is exercised in Australia? I have had two letters from the professors of the Sydney University protesting strongly against the nature of the censorship which is being conducted, and drawing attention to the fact that certain monthly publications have been prohibited from entering Australia, although no proper examination of them has been made to ascertain whether or not they are seditious. The publications have been banned on one issue or one article. I suggest that such a procedure is unsatisfactory and that inquiries should be made into it.
– If the honorable member will make available to me, confidentially if necessary, the letters which he has received, I undertake to review the matter as soon as I have an opportunity to do so.
Housing - Investments of Administrative Officers
asked the Minister for Home and Territories, upon notice -
With reference to the 55 unoccupied houses erected by the Federal Capital Commission for the accommodation of public servants -
For how long have such houses remained unoccupied ?
What is the reason for their being unoccupied?
When is it anticipated that the whole of these houses will be occupied?
– The reply to the honorable member’s question is as follows -
asked the Minister for Home and Territories, upon notice -
With reference to the three separate contracts for the erection of 100 cottages each, which were let to Messrs. Bruce, Eden and Griffiths, Mr. W. H. Mason, and the Monolyte Construction Company, upon which work was commenced in May, 1920 (vide page 44 of the Becond annual report of the Federal Capital Commission), will the Minister state -
– The reply to the honorable member’s question is as follow : -
Messrs. Bruce, Eden and Griffiths, ?129,000; Mr. W. H. Mason, ?129,500; The Monolyte Construction Co.; ?122,500. (This contract was reduced to comprise 25 houses instead of 100, the revised contract amount being ?30,625 ) . In each contract the commission has power in certain circumstances to take the work out of the contractor’s hands and complete it at his expense. This power has been exercised in the case of Mr. W. H. Mason’s contract. The contracts also provide for the recovery by the commission of liquidated damages at the rate of ?1 per cottage per week for such time as the contract remains uncompleted beyond the time stipulated in the contract.
asked the Minister for Home and Territories, upon notice -
With reference to the. question asked on the 4th November by the honorable member for Hunter regarding investments of administrative officers of the Federal Capital Commission in companies operating in the Federal Capital Territory, to portion of which question the Minister replied on 8th December (Hansard, page 2857), will the Minister reply in the affirmative or negative to that portion of the question of 4th November which reads as follows : - “ Are those officers in a position to make recommendations directly or indirectly affecting these companies “ ?
– The officers concerned, at times, in the ordinary course of their duty, are required to deal with matters affecting one or other of the companies, but they have discretion only to apply prescribed rules and decisions. Any other matters must be referred to the commission for decision, for which the commission takes full responsibility.
On the 12th December, the honorable member for Eeid (Mr. Coleman) asked me a question, under three headings, in relation to residences that have been erected for the accommodation of public servants and others in the Federal Capital Territory. Further information in regard to paragraph (2) of this question is now available, and it is as follows : -
The amount expended on the 556 residences erected by the Government, or by the commission -is ?009,400, excluding interest, overhead charges, fencing, kerbing, . guttering and footpaths.
Wherever works havebeen carried out by contract the estimated cost has not been exceeded. In certain of the work carried out by day labour, however, the estimates were exceeded by approximately 6 per cent.
asked the Minister for Markets and Migration, upon notice -
– The replies are as follow : -
RE-CLASSIFICATION - Non-Official Postmasters.
asked the Prime Minister, upon notice -
Whether the re-classification of the clerks in the Telephone Manager’s Branch of the General Post Office, Sydney, has been completed; if so, will the Minister state the earliest date when the re-classification will be published?
– The information will be supplied as early as possible.
asked the PostmasterGeneral, upon notice -
– The replies to the honorable member’s questions are: -
asked the PostmasterGeneral, upon notice -
Will he, in the interests of public health, give directions that all windows in the Sydney General Post Office be opened during the summer weather, especially where glass screens are provided immediately behind windows?
– I shall investigate the matter and furnish a reply to the honorable member’s question at the earliest possible date.
asked the PostmasterGeneral, upon notice -
– The replies to the honorable member’s questions are as follow : -
The difference in the rate of postage according to the route followed operates only in respect of newspapers addressed to the British Isles. The respective rates are: -
Transmitted wholly by sea, lid. per 16 oz.
Via America, Id. per 4 oz.
asked the PostmasterGeneral, upon notice -
– The replies to the honorable member’s questions are as follow : -
asked the Postmaster-
General, upon notice -
Will he supply the following information in respect to broadcasting companies in Australia: -
The amount of capital subscribed originally ?
The total value of bonus shares paid out of profits?
The total amount paid to shareholders since incorporation, whether in the form of directors’ fees, dividends, shares, or bonuses? 4.Each year’s real surplus of receipts over expenditure without any provision whatever for directors’ salaries or other benefits to shareholders ?
The total amount paid in shares, cash or dividends for certain “ rights “ to associated companies; the actual amount paid for an average weekly programme in fees to artists alone?
The total annual amount (if any) paid to non-profit societies, religious bodies, &c, for the privilege of broadcasting their programmes or services?
– Inquiries are being made and the information asked for will be supplied as soon as it is available.
asked the Treasurer, upon notice -
In view of the fact that there is £425,000 worth of British Government coinage in circulation in Australia, on which the profit to that Government has been over £200,000, will he open up negotiations with the British Government with the view to allowing Australian coinage to circulate in Great Britain on a parity with British coinage; if not. why not?
– The Government is not prepared to enter into such negotiations because of the arrangements made with the British Government for the withdrawal of British coin circulating in Australia.
asked the Minister for TradeandCustoms, upon notice -
Whatwasthetotal value of exports to and imports fromFiji during each of the years 1922, 1923, 1924, 1925, 1926, and 1927?
– These figures are recorded in fiscal years. The figures for the year 1926-27 are not immediately available, but will be communicated direct to the honorable member as soon as received from Melbourne. The details for the other years mentioned are:
– On the 5th December, the honorable member for Reid (Mr. Coleman) asked me the following questions, upon notice -
I am now in a position to inform the honorable member that the answer to No. 1 is “No.”
– On the 12th December and on previous occasions, the honorable member for Reid (Mr. Coleman) asked, without notice -
Whether the report of the Commissioner of Pensions had been received in regard to the request made to me by a deputation of pensioners at Charters Towers in August last that the amount that old-age pensioners are allowed to earn should be increased?
I am now in a position to inform the honorable member that the report in question has been received. It has been given careful consideration, but the Government regrets that it is unable to approve of the request of the old-age pensioners.
– I ky upon the table a plan containing the names of the suburbs and streets of Canberra proposed by the Canberra National Memorials committee. As honorable members are aware, Canberra is being developed by the Federal Capital Commission in strict conformity with a predetermined plan. A number of streets and avenues had been named in the original plan by the designer, Mr. Griffin, when it was adopted by the Government and the Parliament of the day, but it is considered that the names do not sufficiently represent Australian sentiment and history, and the street nomenclature was by no means complete. The whole matter was carefully studied by the Federal Capital Commission, which formulated a complete scheme of nomenclature for the city, both as to suburbs and streets, but reported that in view of the national importance of the subject, it was of the opinion that the scheme should be reviewed by a special committee before the high honour of having his memory perpetuated in the National Capital should be accorded to any individual. The Government then decided to set up a special committee consisting of the Prime Minister, the Minister for Home and Territories, the Chief Commissioner of the Federal Capital Commission, Professor Ernest Scott, Proffessor of Modern History of the University of Melbourne, and Mr. G. V. F. Mann, a vice-president ‘.of the Australasian Pioneers’ club and a member of the Historical Society of New South Wales to review the matter. The scheme, as adopted by it, is that indicated in the plan which I have now tabled. In view of the historic interest attaching to the street nomenclature of Canberra, it is proposed to issue an ordinance to govern the matter and to set up a permanent body to review the proposals of the Federal Capital Commission and determine all matters connected with national or historic memorials) whether in the form of street names or monuments. It id proposed that this body shall consist nf the following gentlem’en: - The Prime Minister, the Minister for Home and Territories, the Leader of the Opposition, the Deputy-Leader of the Opposition, the Chief Commissioner of the Federal Capital Commission, and two gentlemen to be appointed by the Governor-General in Council, who shall be specially qualified in Australian history. It is proposed that thereafter no modifications or additions to the street nomenclature or historic memorials at the national capital shall be made except on the recommendation of the Federal Capital Commission and with the endorsement of thu Canberra National Memorials Committee. It is intended that the street nomenclature set out in the p]an which I have tabled shall be effective immediately, but in order that honorable members may have an opportunity to examine the scheme and express their views upon it, I propose to leave the plan, on the table until the proposed ordinance has been gazetted and tabled. During the period provided by the ordinance for objections to be made an opportunity will be available for ‘honorable members to express any views they may have on the matter.. With two exceptions, the name of no living person appears in the scheme. The exceptions are that a park has been named “York Park” to commemorate the visit of Their Royal Highnesses the Duke and Duchess of York on the 9th May last ; and that the name “ Symon “ has been introduced, it being considered that any scheme for perpetuating the memory of the principal characters connected with Federation would be incomplete without the introduction of Sir Josiah Symon’s name. The Federal Capital Commission is now preparing a copy of the plan for reproduction purposes. As soon as it is complete it will be made available to the. press for publication. I also have a full report from the committee which it is intended to make available to honorable members and the public generally who, I am sure, would be glad of an opportunity to consider the proposals that have been made. We are contemplating the taking of a most important step in renaming our suburbs and streets, and the Government proposes to provide the House with an opportunity in, say, four or five months’ time, to discuss the subject. I suggest that that would be amuch wiser course to adopt than to allow the report to be discussed immediately. I have little doubt that there will be considerable differences of opinion as to the wisdom of adopting some of the names that have been suggested, and strong objections may be raised to them. If, however, an opportunity is provided for a fullc onsideration of the reasons which actuated the committee in adopting these names, it is more than likely that they will be accepted. It is desirable in the circumstances that a reasonable time should elapse to enable the report to be considered. For the present I content myself with moving -
That the paper be printed.
.- The Prime Minister has, in my opinion, adopted a wise course.. Honorable members will be glad of on opportunity to consider this matter without haste; and to ascertain the minds of their constituents and the public generally upon it. The people should certainly be, given a voice in determining the names of the suburbs and streets in our capital city. I therefore support the motion.
Question resolve,d in the affirmative.
The following papers were presented : -
Canberra National Memorials Committee - Report (with map) in regard to the naming of Canberra’s streets and suburbs.
Ordered tolie on the table, and that report be printed.
Defence Act -
Australian Junior Cadet Regulations - Statutory Rules 1927, No. 138.
Regulations Amended - Statutory Rules 1927, No. 139.
Naval Defence Act - Regulations Amended - Statutory Rules 1927, No. 137.
New Guinea Act - Ordinances of 1927 -
No. 36- Supply (No.4) 1927-28.
No. 37- Stamp Duties.
No. 38 Succession Duties.
No. 39 - Appropriation (No. 4) 1928-27
Norfolk Island Act - Ordinance of 1927 - No. 5 - Executive Council.
Northern Australia Act - Regulations Amended Statutory Rules 1927, No. 134.
Papua Act- Ordinance of l927-No.10- Land
– I move-
That Government business shall take precedence over general business to-morrow.
In moving this motion I am not unmindful of the fact that the notice-paper contains a number of items of importance in the names of private members. There is, for instance, the motion of the honorable member for East Sydney (Mr. West) for the establishment of a research institute, station and farm. I am aware that the honorable member desires his motion to be considered at an early date, because he feels that it affects the welfare of the country. Nevertheless, I think that honorable members generally would prefer that we should continue with the discussion of the items connected with the tariff. For that reason I have considered it advisable to move this motion. I point out, however, that motions now on the noticepaper in the names of private members will remain there. There is no intention of proroguing Parliament, that there will be an opportunity for those motions to be discussed when we re-assemble after the Christmas adjournment.
.- If this motion is agreed to, no member of this House will be affected more than I shall be. The notice of motion in my name to which the right honorable gentleman has referred deals with a matter of national importance. I have been characterized as a member who at all times endeavours to deal with the various matters which come before us from the national point of view. I therefore feel very keenly this proposal to take from private members their opportunities to have their motions discussed. The chancellers, vice-chancellers, deans of the faculty of science and other professions of severaluniversities of Australia arenot directly represented in this Parliament; I therefore feel that the shelving of my motion is a grave matter.. I feel aggrieved “ particularly because the reduction of the: land tax . will deprive the country of revenue amounting to about £1,250,000 per annum - a sum larger than that which. I propose should be set apart to endow the institute. Were a reseach institute established and endowed as set out in my motion, the benefits to Australia would be incalculable. However, I realize that there is little hope of my motion being discussed to-morrow. The Prime Minister, who may be described as the Mussolini or Czar of Australia - I mean no disrespect to the right honorable gentleman - will have his way, and his motion will, no doubt, be agreed to. For many years I have been endeavouring to get something done along the lines proposed in my motion.
-The honorable member may not discuss his motion now.
– It deals with a matter of national importance. The Prime Minister himself realized that when he saw it. Indeed, he delivered a very fine address, in which - he pointed out that Australia was losing millions of pounds-; -
– The honorable member must not discuss his motion at this stage.
– I was pointing out, Mr. Speaker, that in pursuing the course he proposes the Prime Minister is not acting in the best interests of the country. I realize that it is useless for me to oppose the motion, but I find some consolation in the hope that the gentlemen in the press gallery will give some prominence to my protest. I can assure honorable members, however, that an oratorical treat is in store for them when I deal with the motion in my name. They will then obtain information which they do not now possess.
.- I was under the impression that the Prime Minister some time ago gave a promise that an opportunity would be given to the House to deal with a motion on the noticepaper which is of very grave importance to the people of Australia : I refer to the motion in the name of the honorable member for Franklin (Mr. Seabrook) in relation to the repeal of the coastal trade sections of the Navigation Act.
– I was asked to provide an opportunity for that motion to be discussed, but I gave no assurance that it would be discussed.
– Western Australia has protested time after time against the retention of the coastal trade sections of the Navigation Act. Australia is suffering from the operations of those sections.
– On a point of order; is the honorable member in order in discussing the effect of certain sections of the Navigation Act?
– The honorable member for Swan was not discussing the provisions of the Navigation Act. So far he is in order.
– The motion to which I have referred is of the greatest importance to Australia. That motion is on the notice-paper; but if the motion now before us is agreed to, no opportunity will be given to us to discuss it tomorrow. We should have an opportunity to discuss a matter of such importance.
.- The notice-paper contains a motion in my name which I think all honorable members recognize deals with a matter of great importance, in that it affects returned soldiers suffering from tuberculosis. If the motion now before the House is agreed to, there will be no opportunity, for perhaps two or three months for my motion to be discussed. In the meantime the returned soldiers concerned will continue to suffer. I point out that some returned soldiers who have not produced evidence that they contracted tuberculosis because of their war service, have obtained pensions under the Australian Soldiers’ Repatriation Act, because they have been able to get a member of Parliament to make representations to the Minister in their behalf. There are, however, many others who cannot approach the Minister in that way. I suggest that during the Christmas adjournment the Government should deal with such cases in the manner I have suggested in my motion. To grant this concession would not represent a heavy expenditure, but it would mean a lot to those men who, by reason of the assistance they gave to their country in time of need, have contracted a disease.
– Order! The honorable member may not discuss his motion.
– I suggest that without waiting for the motion to be discussed, the Government should take action along the lines I have indicated.
– I can assure the honorable member for Adelaide (Mr. Yates) that everything that can be done under the legislation now in force, is being done for those returned soldiers who have developed tuberculosis. The honorable member will agree that the administration of the Australian Soldiers’ Repatriation Act by my colleague, Sir Neville Howse, has been most sympathetic.
Question resolved in the affirmative.
Message recommending appropriation, reported.
Ordered - That the message be taken into consideration forthwith.
In committee (Consideration of GovernorGeneral’s message).
Motion (by Mr. Bruce) agreed to -
That it is expedient that an appropriation of revenue and moneys be made for the purposes of a bill for an act to approve an agreement between the Commonwealth of Australia of the first part and the States of Kew South Wales, Victoria, Queensland, South Australia, Western Australia, and Tasmania of the second, third, fourth, fifth, sixth, and seventh parts respectively and for other purposes.
Motion (by Mr. Bruce) proposed -
That the Standing Orders be suspended to enable the remaining stages to be passed without delay.
.- No doubt the right honorable gentleman has moved this motion in order to enable him to make his second-reading speech without delay, but he might have shown the House the courtesy of informing it of his intention. Surely we are entitled to some consideration from the right honorable gentleman. I do not know his intentions. I am aware that similar motions have frequently been made to enable the Minister in charge of a bill to deliver his second-reading speech, so that honorable members might have opportunity to consider the measure before the debate was resumed. If that is the right honorable, gentleman’s intention on this occasion, he should have informed u3 accordingly. He has, however, merely asked the House to agree to the suspension of the Standing Orders to enable the bill to pass through all its stages without delay. The right honorable gentleman appears to be developing the habit of imposing upon the good nature of honorable members. He expects honorable members to assist him in expediting business merely to suit his own convenience. We had an example of that in connexion with the debate on the Estimates. No adequate opportunity was given to honorable members to examine the affairs of the several departments, or to discuss matters of administration. The action of the Prime Minister in forcing the Estimates through this chamber in one sitting was inexcusable. I have never previously heard of such a thing being done.
– The honorable member was not here on that occasion.
– That is why I now call attention to the malpractice. It is true that I was away from this chamber on that occasion, but that only accentuates my grievance. My absence from one sitting deprived me of the opportunity of discussing any item in the Estimates.
– We shall have to arrange for proxy voting.
– The honorable member for Bass (Mr. Jackson) apparently fails to recognize that the electors whom he represents might have suffered from the - action of the Prime Minister on the occasion to which I have referred. This is not a matter for the Government. Parliament should uphold its own rights. Honorable members should unite in protesting against any invasion of their rights.
– Who is the leader of the Labour party in this chamber?
– The leader of the Labour party in this chamber is the honorable member for Hunter (Mr. Charlton), who is respected by every honorable member on this side. Would the honorable member for Moreton (Mr. J. Francis) deny to any honorable member, whether the leader of a party or another, the right to protest when he thinks that the rights of Parliament are being invaded? The honorable member for Moreton made a stupid interjection, and implied a lack of respect on my part for my leader. I resent that suggestion. The honorable member ought to uphold the rights of the House. I protest that the Prime Minister is pursuing the wrong course in inviting the House to expedite the passage of the bill. Against this particular measure I havo nothing to say; but I do object to the cavalier fashion in which he brings the measure before us. I think that honorable members are entitled to know fully what his intentions are with regard to it. He should tell us how far he intends to proceed with it during this session, or this sitting, for he has asked for permission to have the measure passed through all stages during the present sitting.
– What is the procedure in State Parliaments?
– That does not ooncern us a great deal. I do not suggest that the proper procedure is not laid down under our Standing Orders, nor do I contend that any departures should be made from the practices and usages of the past. These demand that Parliament should be taken fully into the. confidence of the Leader of the House when he makes the unusual request that a bill shall pass through all stages in one day.
. -I may say that I was fully acquainted with the action to be taken by the Prime Minister. It is unfortunate, perhaps, that the right honorable gentleman omitted to mention that his object was to move the second reading of the bill, so that we might have time to give consideration to the measure during the recess. I should like to add that the Prime Minister adopted this course at my suggestion. I asked him, if possible, to have the Amending Arbitrataion Bill and the Financial Agreement Bill brought to the second reading stage before the close of the session, so as to give honorable members and the people outside an opportunity to fully consider them. Because I had that knowledge, I did not rise in my place as Leader of the Opposition and take exception to the course adopted by the right honorable gentleman ; I thought that it was in the best interests of all.
– In view of the remarks of the Leader of the Opposition, there is little need for me to say anything on the. point raised by the honorable member for Dalley; but, had it not been for the explanation tendered by the Leaderof the Opposition, I should have felt impelled to defend myself against the charge of discourtesy to, or cavalier treatment of, the House, and particularly of the Opposition. I discussed this matter with the Leader of the Opposition. We thought it desirable that the bill should be brought down and the second reading speech delivered, but that the measure should be taken no further than that before the Christmas adjournment, so that the House and the people of Australia might have an opportunity of considering it in all its aspects before the final discussion took place. I ask the honorable member for Dalley (Mr. Theodore) to acquit me of any discourtesy. The universal practice in the conduct of the business of the House is that the Leader of the Government discusses with the Leader of the Opposition any action he proposes to take.
– He then announces to the House the course that has been adopted, so as to inform all honorable members.
– It would be quite impracticable to consult every individual member. The practice that I have mentioned has always been followed, and no doubt it will be continued, whatever Government is in power. Where such an arrangement has been arrived at, it is assumed that honorable members generally will fall in with it.
– On a personal explanation -
– Does the honorable member intend to refer to a matter on which he has been misrepresented?
– I wish to make a personal explanation. I have not the slightest intention of being disloyal or discourteous to my leader, and I am prepared to acquiesce in any arrangement that has been made by him with the Prime Minister; but I contend, with the honorable member for Dalley, that the Prime Minister should have made a clear statement.
– Order ! The House listens to a personal explanation under the belief that other matters will not be debated.
Question resolved in the affirmative.
Motion (by Mr. Bruce) proposed -
That the resolution be adopted.
.- May I clear up the point that the honorable member for Ballarat (Mr. McGrath) was endeavouring to make by way of personal explanation? I do not question the practice that the Prime Minister has adopted for himself, nor do I impugn his politeness, nor his courtesy to honorable members generally; but I do suggest that the right honorable gentleman implied that a lack of recognition had been shown for what was due between leaders in this House. I do not question the right of the leaders to make these arrangements, nor, indeed, do I doubt their convenience to the House. I know that business would be hampered if arrangements of that character could not be made; but, when they involve to some extent the rights of all honorable members, the Leader of the Government, for the purpose of conveying information to the House, might have intimated the nature of the arrangement entered into, and explained that he intended to proceed with the bill so far and no farther. That would have obviated possible misunderstanding or apprehension on the part of members that their rights were being whittled away and they were being deprived of opportunities for debate.
– Everything that the honorable member for Dalley has said, may be perfectly true; but, speaking in this House last Friday on the adjournment, I announced the arrangement that had been made. Honorable members know all about it, and we are now in the act of giving effect to it.
Question resolved in the affirmative.
That Mr. Bruce and Dr. Earle Page do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Bruce and read a first time.
– I move -
That the bill be now read a second time.
This is a bill to approve an agreement entered into, subject to Parliamentary approval, between the Government of the Commonwealth and the six States, and I think that it is, without question , the most important financial measure that has ever been submitted to this Parliament. It provides for a permanent and final settlement of the financial relations of the Commonwealth and the States, a matter which has occupied the attention of every government since federation. Finance was one of the most difficult problems facing the founders of the Federation. It is particularly gratifying that this arrangement has been arrived at by a cordial agreement between the Commonwealth and all the States, and that the negotiations have been conducted in a most friendly spirit. Unquestionably, as a- result of the satisfactory arrangement that has now been completed, the good feeling between the Commonwealth and the States has been materially increased, and this will pave the way for increased co-operation with regard to the national problems of Australia-
To make the agreement clear, it is necessary to go shortly into the history of this matter, but I need not do so exhaustively. In pre-federation days the subject occupied probably more of the time of the conferences that were held, and certainly presented more difficulties than any of the other problems of federation. Eventually, when the needs of the Commonwealth and the States had been considered, it was recognized that the financial security and independence of the States must be safeguarded, and that the Commonwealth must have adequate financial resources for both its known and its possible requirements. In the end a compromise, which is generally known as the Braddon “blot” was arrived at. That compromise provided for the first ten years, and under it three-fourths of the customs and excise revenue collected by the Commonwealth was returned to the States. Indeed, in addition to that three-fourths, a very substantial amount of the remaining one-fourth was also returned to them. Inthat period the requirements of the Commonwealth were comparatively small. At the end of it the matter was again considered, and the basis of payments to the States was reviewed ; but no final solution of the problem was found and it was determined that for another ten years the Commonwealth should pay to the States 25s. per head of their respective populations. That arrangement was come to in 1910 and it was provided that after ten years the per capita payments should be continued only until the Commonwealth Parliament otherwise provided.
During that second decade the financial position of Australia completely changed. The war broke out, and the Commonwealth Government, on behalf of the people of Australia, shouldered the. burden of Australia’s great military effort, and thus found itself needing very large revenues for war purposes, and to meet other obligations which it had undertaken during that period. The Commonwealth’s responsibility for the payment of old age and invalid pensions had been established, and an expanding obligation for defence quite apart from expenditure in connexion with the war.
In 1919 the. Commonwealth Government invited the Governments of the several States to meet in conference to consider the financial relations of the States and the Commonwealth, and the proposal then made by the Commonwealth was to diminish the per capita payments progressively by 2s. 6d. per annum, until the amount payable to the States should be reduced to 10s. per head. That proposal was not acceptable to the States. The only point which I desire to stress in connexion with that conference is that the contributions of the Commonwealth to the States would have progressively diminished and the States would have received no compensation for that.
This problem was discussed again in 1923, at a conference held just after the present Administration assumed office. The Commonwealth Government then put forward certain proposals, and the representatives of the States submitted counter proposals; but it was not possible to reach an agreement, although at one time itlooked as if a satisfactory solution of the problem would be achieved.
The next conference was held in 1926.. The Government realized that since it… was not possible to arrive at an. agreement on the basis of joint action by the Commonwealth and the States, any proposal submitted to the States must be within the financial competence of the Commonwealth. The States again were not prepared to accept the proposals submitted, andwould not discuss with the Commonwealth a solution of the problem on the basis submitted. I do not now offer any opinion as to whether they were right or wrong in that attitude. Fortunately, the time has gone by when we need consider that phase of the matter. The States at the 1926 conference claimed definitely that under the Constitution they had a moral right to participate in the customs revenue collected by the Commonwealth. The Commonwealth Government took the contrary view. It submitted that the States had no constitutional, legal, or moral right to participate in the customs revenue. It is impossible to conceive of two parties being farther apart than were the representatives of the Commonwealth and the States upon that fundamental principle. No agreement could be reached because it was impossible to persuade the States that they had no right to the enjoyment of any portion of the customs revenue. Accordingly, the Commonwealth Government took definite action to obtain finality in the matter by proposing the repeal of the Surplus Revenue Act of 1910 . under which the per capita payments to the States were being made. That action was the subject of considerable debate in this Parliament. At the time, however, I made it clear that the Government did not propose to exercise its full legal rights after the repeal of the Surplus Revenue Act, by withholding from the States that financial assistance which they had been enjoying under its provisions, and was prepared to negotiate with the States with a view to arrivingatafair and equitable arrangement. In the course of the debate I gave this definite assurance to the States on behalf of the Government -
If the States will meet us, we are prepared to consider any scheme and any method that may be suggested …. It is our desire not merely to give the States absolute justice, but so far as lies in our power to deal with them generously.
This Parliament willnotpermit injustice tobedonetothem . The purpose of this measureisto give them fair andequitable treatment in a financial readjustmentwhich is , essential to the interests of the whole of the people and particularly of the State authorities themselves.
Despite the hostility and opposition shown to the Government’s proposal, Ministers felt that it would not be in the interests of Australia that the States should continue to be at the mercy of a chance majority in the Federal Parliament. That was the fundamental reason that actuated the Government in submitting that measure. There were, of course, other reasons which in the opinion of the Government made it desirable that its proposals should be carried into effect. There was, for instance, the objection that exists to one government raising revenue by means of taxation and handing it over to another government to spend. It was thought that that was a state of affairs which should not continue. This Government, however, was in no sense responsible for that arrangement, and its existence alone would not have caused the Government to take its life in its hands as it did by proposing the repeal of the Surplus Revenue Act. A further reason was the advisability of doing away with the duplication of taxation. For that again this Government was not responsible. Duplication in taxation came about because of the urgent need for revenue to prosecute the war. By itself, it was not an issue upon which a government would take its life in its hands. The real reason actuating Ministers was that we were not prepared to go out of office and leave the States at the mercy of any chance majority in this Parliament.
– That was an afterthought.
– The honorable gentleman may suggest that that was not the chief reason which actuated the Government, but I can assure him that it was. I have heard it suggested also that we introduced legislation to repeal the Surplus Revenue Act in order to secure some financial advantage to the Commonwealth. Surely honorable members cannot advance that opinion seriously; because every move that we have made with regard to this matter has involved the Commonwealth in additional financial obligations. I feel sure that upon mature consideration honorable members will acquit the Government of attempting in some mysterious way to secure to itself some advantage by discontinuing the per capita payments to the States. In the recent debate on the budget honorable members opposite, and a number of honorable gentlemen supporting the Government, pointed out that financial salvation lay in the direction of reduced taxation. I agree that if we had surplus revenue in hand it should be possible to reduce taxation, and if we had not come to this arrangement with the States, but had gone on paying them 25s. per head of their population, we should have had surplus revenue in hand and could have made a generous gesture of that kind. No Commonwealth Government would make an arrangement with the States involving it in heavier payments than it was under an obligation to make unless it sincerely believed that some fundamental principle impelled it to that course.
After the passage of the measure through this House authorizing the withdrawal of the per capita payments, this Government again invited the States to meet it in conference. That conference was held in Melbourne in June last, when we submitted certain proposals to the States, which, I am glad to be able to say, were cordially received. We proposed, in the first place, that the Commonwealth should take over the whole of the. State debts. This is provided for in section 105 of the Constitution. The presence of that provision in the Constitution is an illustration of the wisdom and statesmanship of those who were responsible for the framing of the document. We have discovered many defects in the Constitution, but we must recognize nevertheless that it is a wonderful constitutional instrument whose provisions testify plainly to the breadth of vision and almost unparallelled statesmanship of its framers. The Commonwealth Government offered to take over the whole of the debts of the States and to make a contribution towards the payment of interest upon those debts to an amount equivalent to the per capita payments for the year 1926-27. In addition it proposed the creation of a sinking fund of 7s. 6d. per cent. in respect of those debts.
To that sinking fund of 7s. 6d., the Commonwealth will contribute 2s. 6d., or an annual expenditure of £801,000 for the next 58 years, when the debts will be extinguished. In addition a sinking fund of 10s. will be provided for all future loans raised either by or on behalf of the various States, and to that the Commonwealth will contribute 5s. The obligation of the Commonwealth for future sinking funds will, therefore be £100,000 a year for a period of 53 years for every £40,000,000 that is raised by or on behalf of the States. Thi scheme provides for the permanent establishment of the Loan Council which has been in voluntary operation in regard to five States for the last four years; and also for a settlement of the difficult problem of fixing the rate of interest ‘to be paid on the valuation of the transferred property. The Commonwealth has agreed to increase the interest rate from 3$ per cent, to 5 per cent., and this will involve an annual increased payment to the States by the Commonwealth of from £163,000 to £164,000. In evolving this scheme, the Commonwealth has considered the necessity of the reduction of Australia’s debt, the provision of sinking funds for all its past indebtedness, the assurance of sinking funds for future indebtedness, and the co-ordination and mobilization of Australia’s credit. The Commonwealth and the States have been subjected to virulent and, generally speaking, unjustified attacks upon their finances. Unquestionably the competition that has taken place in the past between the States and the Commonwealth for the loan moneys that they require, has had a detrimental effect upon the rate at which Australia’s public borrowings have been undertaken. It must also be remembered that the lenders of money are becoming more insistent upon the pro? vision of sinking funds for loans that are issued by the States, and New South Wales, in particular, has recently been forced to provide sinking funds not only for the loans that it has issued, but also for some of its previous loans. The Government, therefore, felt that it was essential to deal with this problem of the financial relations of the Commonwealth and States on the basis of cooperation, and when the States met in conference to discuss this subject, it was decided to alleviate, if possible, Australia’s indebtedness, mainly by the pro vision of sinking funds to cover past and future loans. It was realized that nothing could have a greater effect on Australia’s credit than some action on those lines I shall give only two instances to support that view. There is no doubt that Australia does not enjoy the cre’dit to which her resources and financial position entitle her. Take the position of New Zealand, our great sister dominion. I am prepared to admit that New Zealand is a great country; but her natural resources, her population and her general - position are not to be compared with those of Australia, and therefore Australia’s credit should stand the higher. Because of our having seven Governments operating as borrowers, with no co-ordination between them, and . no mobilization of our credit, New Zealand’s credit is very much higher than that of Australia. Taking our loan requirement for the year 1927, the Treasury officials have estimated that if we could have obtained them on the same terms as New Zealand obtained hers, we should have received an additional £1,000,000 for the same amount of interest. That is a startling fact. Then compare Australia’s credit in New York with that of Canada. Canada is close to the United States of America, and the two countries have many things in common, and while that might perhaps account for the credit of Canada being slightly better than that of Australia, there is not the slightest justification for the difference of some five points that exists at present between our credit and hers- It is solely due to the fact that we are not borrowing on behalf of Australia as a whole, and individual States have approached the New York money market prepared to pay interest rates quite unjustified for a firstclass borrower. The proposals which are now submitted will certainly overcome that difficulty. As to the position in Australia, had we not co-ordination of borrowing we should1 inevitably be faced with competition between the States, and the weaker States would be prepared to pay more than was justified for the money they required.
That would force up the rate against other States, and as a result the whole of the people of Australia would be at a disadvantage. Prior to the formation of the Loan Council, interest rates in Australia for government loans increased to nearly 6-& per cent. That was due entirely to the competition between the States and the lack of co-ordination in borrowing. The general rates of interest on loans for commercial and industrial purposes were also affected, to the detriment of the general prosperity of Australia. New South Wales refused to remain in the Loan Council, although that State was a member when it was originally formed. The Loan Council met and decided the rate at which money should be borrowed by Commonwealth and State Governments, and in December of 1925 the’ council, consisting of the representatives of five States, came to the conclusion that no Government should pay more than an interest rate of 5 J per cent., and that loans should be issued at par. That rate of interest was maintained and the Commonwealth raised £18,720,000 of new money and converted £28,380,000 of maturing war loans, amounting in all to £47,100,000. The last Commonwealth loan on that basis was completed in June of this year, and it was over subscribed. The then Premier of New South Wales, Mr. Lang, authorized his Treasury officials to issue a loan at 5£ per cent., arid that rate existed in New South Wales until, a few weeks, ago, when the present Government reverted to the rate fixed by the Loan Council. The effect pf the operations of New South Wales, was that, instead of the Commonwealth . issuing at par its £36,000,000 conversion loan, which has to be raised during the present month;- that loan had to be issued at £98 10s. That was entirely due to the fact that, all the States we’re not represented on the Loan Council and to the lack of co-operation and lack of a uniform interest rate. That difficulty has now been overcome under the agreement . which has “been signed by all the States. .A uniform rate will now. be paid throughout Australia.’ ‘ The “. conference; which’ was held “iri “junie’ df this /year agreed’” to ‘the general ‘principles, of . the scheme. A. further “conference was’ held- in July, and an agreement was arrived at, subject to certain alterations and the approval of the Crown Law authorities in each of the States. Certain drafting amendments were suggested and certain legal points emerged regarding the exact form that the proposed alteration of the Constitution should take, but by correspondence it was found possible to come to an agreement with the States, with the exception of New South Wales. Because of the political circumstances of New South Wales at that time, it took no action and no suggestions were made. It was only after the elections there, when the present Government came into power, that it was possible for- New South Wales to consider the scheme. Certain alterations were made in the drafting of the agreement at the request of that State. We were able to communicate those by telegraph i to the various States. The present position is that the agreement has been signed by all the States. The debts which the Commonwealth is to take over from the States are set out in the agreement. They amount altogether to £672,007,000, and the annual interest contribution of the Commonwealth will be £7,584,912 for a period of 58 years, when the debt will he extinguished.
– The interest contribution is the amount of the per capita payment’ for last year.
– Yes, for the year 1926- 1927. .The Commonwealth will also contribute 2s. 6_d. to a sinking fund of 7s. 6d. for the; whole, of the past debts of the States. That contribution will amount to £801,000 per annum,. aid will continue, for 58 years. In addition, the Commonwealth will contribute 5s. to a sinking fund of 10s.’ for new loans raised on behalf of or by .the States. In addition, the Commonwealth agrees in effect to increase the rate of interest paid: on the valuation of the transferred properties ‘from 3-J per ‘cent, to 5 per cent. When the provisions of the permanent agreement are in operation, -the Commonwealth will take over 5 per cent: stocks of the States to an amount equivalent to the valuation of the transferred ‘property:’ This represents ari additional- payment by: the Common-wealth to the States of between £163,000 and £164,000. The fixed contribution of the Commonwealth towards interest charges is to be £7,584,912. Our sinking fund contribution - this figure is higher than that which I previously gave because it includes our contribution in respect of the new debt for the year 1927-28 - amounts to £885,000, and the increase in the interest rate on the transferred property is £163,865, making a total payment by the Commonwealth to the States of £8,633,777 per annum, tinder the *per capita system the payment by the Commonwealth would have been £7,734,990; so that the payment by the Commonwealth to the States for 1927-28 will be £898,787 more than we should have paid if the agreement had not been entered into, and the per capita arrangement had continued. We should not have undertaken this additional obligation had we not believed that a fundamental principle rendered it necessary. Of the amount of £898,787, New South Wales will receive £325,888, Victoria £199,087, Queensland £132,999, South Australia £113,081, Western Australia £90,729 and Tasmania £37,003. The following table sets out in detail the amounts that will be received by each State.
The fact that the Commonwealth will pay more does not mean that the taxpayers of Australia will be levied on for a greater amount. The taxpayers in some of the States will have to contribute a slightly larger amount in order to bring the sinking fund up to the figure at which it ought to stand. On the other hand, some of the States will be relieved of some part of their present obligation, and will thus have money available for other purposes, or the remission of taxation.
A point of great interest to all the States, and one which was very fully debated at the conferences between Commonwealth and State Ministers, is the position in which the States would have been placed if an agreement had not been reached, and the 25s. per capita payment had been continued. At present, although the States receive 25s. per. capita, no regard is paid to their needs or requirements. There is already murmuring that the per capita system is unjust, as it benefits the richest States and is detrimental to those less populous. New South Wales, which now has a population of over 2,300,000 must continue to expand, and under the per capita system is at an advantage compared with a State like Western Australia, which has a population of only 390,000. Under the per capita system the State which least requires assistance receives a continually increasing amount. The Government has said, quite frankly, that it thinks the per capita system unjust. There may not be a majority of the people who say that to-day; but I am certain that the iniquity of the system will become more and more apparent, and ultimately an overwhelming majority will revolt against it. Any State basing its case on the receipt of the per capita payment for 20 years and comparing what it would thus have received with its position under this agreement is building on an unsound and unstable foundation. If honorable members will throw their minds back, they will recall that most of the opposition to the Government’s proposal to dispense with the per capita payment was based on the buoyancy of the revenue of the Commonwealth. We have to consider what the position would be if the revenue became depleted. Honorable members opposite are particularly anxious for higher duties, which, if imposed, may have the result of decreasing the customs revenue. That would have the almost inevitable result of a complete reversal of the financial position of the past few years, when the Commonwealth has been able to deal generously with the States and the Commonwealth might then be compelled to reduce the per capita payments to the States. I put two points forward for the earnest consideration of those who are inclined to oppose the agreement, and who may have the idea that the States would have received more under the per capita system. The first is that it is incredible to think that this system should be allowed to continue much longer. The second is that there is grave doubt whether the Commonwealth will have the revenue in the future to make payments to the States at the rate of 25s. per capita particularly in view of the growth of population. There are certain persons who can mislead themselves to think that if the Government’s proposals are adopted the unfortunate taxpayers in the States will be placed in a difficult position. Of course, this aspect was fully discussed at the conference, and the considered opinion of the representatives of the States after going exhaustively into the matter, was that it was in the interests of the States to enter into this arrangement.
Under the agreement, the stability of the finances of the States is assured for 58 years. At present they do not know where they are. It enables the Commonwealth to determine its financial obligations to the States during that period. T submit that that is infinitely better, from the view-point of both the Commonwealth and the States. The agreement also provides for the establishment of a loan council, on which all the States are to be represented. The object of the loan council is to ensure co-ordination in the borrowing of governmental arid public authorities, and a proper mobilization of the credit of the people of Australia. The permanent establishment of the loan council presented considerable difficulties. It was recognized that we could not have a loan council which could be regarded as an authority superior to the Commonwealth Parliament, or to the State Parliaments, which possess sovereign powers. For some time the State representatives were a little apprehensive; but they eventually recognized that the Commonwealth was in exactly the same position as the States. They could see that we all had a common interest, and that it was our desire that the rights and privileges of the Commonwealth and the State were not in any way interfered with. When this was realized, a different atmosphere was created. We have managed to achieve our objective, which was to avoid any suggestion that the Loan Council would be some sort of super parliament that could override or interfere with the decisions of either the Commonwealth or the State Parliaments. The only matter which the Loan Council will determine by a vote is the amount which can be borrowed at rates and terms right and proper for a first-class borrower such as Australia. That will be decided by a majority vote of the Loan Council. Should the majority of its members decide that Australia shall not pay more than 5£ per cent., and that the loan shall be issued at par, that would over-ride any minority opinion that, say, the rate should be 5$ per cent., and not more than 5£ per cent, would be paid by the States or Commonwealth for any loan. Everything else is to be done either by agreement or by an automatic adjustment.
The amount to be borrowed was the next thing to be considered. The arrangement is that the Commonwealth and the States shall submit their loan programmes to the Loan Council. Those programmes are considered by the Loan Council, and if, in the opinion of the council, it is possible and desirable to raise the amount required by the full loan programme, and at the rate that the Loan Council has determined upon, the matter goes automatically forward. It must be clearly understood that the Loan
Council has no power to deal with the Estimates of either the Commonwealth or the States. That condition is essential. No sovereign parliament in Australia would allow any outside authority to determine such a thing. If it is not possible, in view of the position of the money market, to obtain the full requirements of the Commonwealth and States, the following basis has been set down, after exhaustive discussion. The Commonwealth is entitled to take onefifth of the amount available for its own purposes. Of course, it need not take the full one-fifth if it does not require that amount. The remaining four-fifths is divided among the States in proportion to their loan programmes over the preceding five years.. Obviously, it would be an impossible basis to accept the current loan programmes, as the Estimates could be inflated. At one time we seriously considered a proposal to create a formula upon which the amount available could be distributed, based upon increases in population, in production, and land alienation or land settlement for the preceding five years. Increases in land alienation or settlement were put in to balance the population and production, as those two factors would be more in evidence in the two big eastern States, Victoria and New South Wales, which have such extensive secondary industries. We came to the conclusion that such a formula would be very desirable; but that it was not practicable, as it would be difficult to make people understand it.
– Is not the accepted basis rather penalizing economic resources ?
– No. When there is difficulty in raising money, on the terms usually associated with a first-class borrower, it indicates that the financial position is very straitened. It is recognized that, where any State has had a big loan programme for the preceding five years, it will probably be committed to a large expenditure for the current year, and that it would be a hardship if the amount available to it were cut off suddenly. Therefore, such a State will be given a fair allocation of the moneys available.
– What would happen if any State could not obtain the money it required? Gould it borrow outside?
– No, it could not borrow anything, anywhere. The Commonwealth is to be the common borrower, except in cases where, with the unanimous approval of the Loan Council, stock can be issued in the name of an- individual State instead of being issued in the name of the Commonwealth. That has been arranged deliberately to meet the condition which will probably continue in Great Britain for some time, where certain States have attracted their own clientele of subscribers to their loans. It may be considered desirable to issue a number of smaller loans in the names of individual States than two or three large loans in the name of the Commonwealth. But such loans would be subject to the jurisdiction of the Loan Council.
– Will the other loans be in the name of the Commonwealth Government or of the Commonwealth and the States?
– They will all be in the name of the Commonwealth, except in the instances I have given. It is permissible to raise a certain amount outside the Loan Council by way of temporary loans and overdrafts, and provision has been made in the agreement to preserve certain systems which are operating in -the States at present, by which loans are obtained in those States either from Savings Banks or other institutions. They are somewhat complicated and are set out in detail in the bill. These arrangements with savings banks will be allowed to be continued, but if they are for anything more than temporary loans the amount will have to come out of the quota of the State concerned for the next financial year.
– Does the Loan Council determine the time and place of floating a .loan ?
– Yes, the time, place, and rate are determined by the Loan Council.
– Is any provision made for municipal loans?
– No. The only raising of money permissible outside of this agreement is that for Commonwealth defence purposes. The Commonwealth Government felt that it could not possibly give way on that matter, and the States agreed with it. The Commonwealth is taking over the debts of the States, and is assuming primary responsibility really for the indebtedness of the Commonwealth. The basis of the issue of future loans is a matter of vital importance to the Commonwealth because, if loans are issued at an ever-increasing rate of interest, this must depreciate existing securities. After considerable discussion the States have agreed, and the arrangement is embodied in the agreement, that the Commonwealth shall have two votes, and each of the States one vote, and that the Commonwealth shall have a casting vote. I consider that to be a fair arrangement. I do not think that the Commonwealth could have gone so far as to demand the right to veto. On the other hand, I do not think the Commonwealth could have left itself exposed to being out- voted by the four smaller States, even when it had the support of the two larger States. If all the States vote against the Commonwealth, no question arises. If five vote against the Commonwealth, no question arises; but if only four of the States are against the Commonwealth, it can insist upon its view prevailing.
The other provisions of the bill deal with the temporary period of two years which is allowed for the alteration of the Constitution. The Commonwealth cannot take over the whole of the debts of the States and enter into an arrangement of this character if there is any possibility of any State at any time withdrawing from it. The arrangement has to be permanent - at all events for a period of 58 years - and an alteration of the Constitution is therefore contemplated. There are provisions in the agreement which cover the temporary period of two years allowed for the alteration to the Constitution. During that temporary period the Commonwealth Government will pay its proportion of the interest, and also its proportion of 2s. 6d. of the 7s. 6d. of the sinking fund to redeem the existing debts of the States, and it will provide its half of the sinking fund for future loans. It will also pay the higher rate of interest for the transferred properties. We shall continue to carry on under those temporary provisions, but there will be no actual taking over by the Common wealth of the debts of the States or the securities in relation to transferred properties until permanent conditions are operating under an altered Constitution. The alteration of the Constitution is a matter of the most profound importance. The actual wording of the proposed alteration has been decided upon by the Commonwealth and the States, and is embodied in this agreement. The problem that has to be faced is to avoid entering into an agreement which a subsequent Parliament in either the State or the Commonwealth might repudiate; it must be both permanent and definite.It would obviously be impossible to embody in the Constitution such a lengthy document as this agreement; and its actual terms and conditions are not susceptible to reduction. Again, even if it were so embodied it would be absolutely inflexible, and could not be altered without the approval of the people. The agreement is the result of the application to the problem of the collective wisdom of the Commonwealth and the States at the present moment. But some modification might be found desirable at a future date. To ensure that every party will be bound, and at the same time to avoid the rigidity that would be caused by embodying in the Constitution provisions that could not be altered without a further reference to the people, it is proposed to insert in the Constitution a new section, 105a, reading as follows : -
The Commonwealth may make agreements with the States with respect to the public debts of the States, including -
That sets out the action that is contemplated by and under this agreement. Other provisions are -
That proposed new section recites the matters with respect to which there will be the power to make an agreement. The latter portion gives to the Commonwealth Parliament the power to pass a law validating any agreement entered into prior to the amendment of the Constitution - including the agreement now before us - and to give effect to any alteration of any agreement that may be decided upon by the Commonwealth and the States. The power thus given will not extend beyond the making of a law to give effect to agreements that are entered into, and any alterations thereto that have the approval of all the States, without referring the matter further to the people. I have no doubt that honorable members will wish to study the exact wording of the proposed alteration. The matter “has been examined exhaustively by the Crown Law authorities of the Commonwealth, and every one of the States. It has been altered considerably since it was originally drafted, but the law authorities of both the Commonwealth and the States agree that in its present form it will give effect to what is the intention of all. That is, it will validate this agreement and leave the way open to its being altered at any future date if all parties are agreeable to such an alteration being made.
I have brought the measure before the House at this particular time because I believe it to be one of the most important that this Parliament has ever had to consider. It is essential that honorable members should have ample time and opportunity to devote to its consideration… It should also receive .the attention of the general public, because it: is .necessary that they should understand the principles which are involved in these proposals for the settlement on a permanent basis of. the financial relations of the Commonwealth and the States. I commend the agreement to the House because it appears to me to contain a harmonious settlement of one of the most difficult questions that has existed since federation. It will mean the consolidation and the mobilization of the credit of Australia, in which direction it will be increasingly beneficial to the whole of the people. It should also ensure our being able to make loan arrangements upon more favorable terms than have hitherto obtained. It makes provision for the establishment of a proper system with respect to the redemption of Australia’s national debt. This Parliament already has the power to make provision for the redemption of the Commonwealth debt, including the war debt. That power will be extended in such a way as to cover the whole of the indebtedness of both the Commonwealth and the States, past, present, and future. The States will be assured of a permanent arrangement under which they will have financial stability. The lack of that stability, I suggest, has been one of the greatest dangers that has confronted Australia. The financial stability of the States might have been upset at any time by the illconsidered action of a chance majority ii. this Parliament. I trust that the House will accept the measure. I am certain that if the agreement is put into force it will make for a better understanding in the future between the Commonwealth and the States, and will pave the way to increased co-operation and more harmonious relations between them. Apart from the greater stability, which this agreement will guarantee to the States in their future financial arrangements, one of the chief features of the measure will, it is confidently anticipated, be reflected in the enhancement of Australia’s credit in the money markets of the world. With the Commonwealth assuming responsibility, for both the past and ;the future debts of the States, and with adequate sinking funds provided for the extinction of those debts, the investor abroad will be much more ready to . buy our bonds than if he were offered bonds issued in the name of an individual State only, without the tremendous resources .pf the
Commonwealth being guaranteed for its repayment, which will be the case under the new arrangement.
Debate (on motion by Mr. Charlton) adjourned.
Sitting suspended from 1.10 to 2.15 p.m.
In Committee of Waysand Means : - Consideration resumed from 13th December (vide page 3133).
On motion by Mr. Pratten -
That the schedule to the Customs Tariff be amended.
– I hope there will be no serious opposition to the Government’s proposal for an increase in duty. Provision is made for a duty of £2 10s. a ton on imported potatoes, which is an increase of £1 10s. a ton, or ls. 6d. per cwt., over the duty that existed prior to the introduction of this schedule. The conditions in this industry are peculiar, in that, generally speaking, an increase in duty will not have the effect of raising the price of the article. In an average year we produce sufficient potatoes to meet our own requirements. It is only from New Zealand that potatoes are imported, and then only in an extraordinarily good season, when that country produces a large surplus over her own requirements. Even though the price paid here may be low, they send their surplus potatoes in times of plenty in that country. Both in Australian and New Zealand the production varies greatly from year to year owing to the uncertainty of the seasons.. The cost of producing potatoes is very high, and, consequently, if prices are low, the loss to the grower is very serious. The price of potatoes in Australia is, in certain seasons, considerably below the cost of production, while in other years, I admit, that the price is high. When New Zealand potatoes are imported during periods of local shortage, they compete very seriously with the Australian product. It is claimed on behalf of those who support the present increase in duty, that the Australian grower is entitled to the Australian market, and inasmuch as he provides the commodity in certain seasons at much below the cost of production, he is entitled to the enhanced price received during times of shortage. I have heard arguments put forward against that contention, and to the effect that it is only in times of shortage that potatoes are imported. I maintain, however, that the consumer has no right to complain because, in some seasons, he pays a high price for his potatoes, if, during other seasons, he gets them below cost price. Speaking generally, this increase in duty will not have the effect of raising the price of potatoes. During a greater part of the time the duty will be of no great benefit to the growers. If we produce sufficient potatoes to meet our own requirements, the duty will hardly operate at all, but in seasons of plenty in New Zealand, when they have large quantities of potatoes for export, these are sent into Australia to compete against the Australian article, and the growers here feel that they are not being treated fairly in regard to our present policy of protection when outside competition is allowed to rob them of the due reward for their labour. When there actually is a shortage, the duty will, I confess, have the effect of increasing the price of potatoes by ls. 6d. a cwt. This, however, is justifiable on the ground of the uncertainty of the reward which the potato-grower may expect. Unless a greater measure of security is afforded, the position of those engaged in this industry will become so precarious that they will give up growing potatoes. The result will be that, over a long period, the Australian consumer will have to pay a higher price for his potatoes than now. I claim that the growers are entitled to a reasonable measure of protection against importations from New Zealand, so that they may be ensured a fair price for their products.
– Do we ever send potatoes to New Zealand?
– We have done so, but only in very small quantities. The Year-Boole shows that the quantity sent to New Zealand over the last seven years is hardly worth considering. It was shown in the evidence given before the Tariff Board that the cost of producing potatoes varied as between the different States. The, growers of Victoria estimated the cost at £17 10s. an acre, while the Tasmanian growers estimated their cost at £?0 an acre. The cost varies as between the different States according to the nature of the country, the cost of working the. ground, and the climatic conditions. Taking the returns in Tasmania over a period of years, the production costs work out at about £7 10s. a ton on an average crop of 2$ tons an acre. At certain periods during the last five years potatoes have been sold in Sydney at less than £5 a ton, and within the last month they have been sold in Tasmania for as low as £2 10s. a ton, or, approximately, one-third of the cost of production.
– Surely it does not cost £7 to produce a ton of potatoes?
– It does. The figures I have quoted have been examined carefully by those most nearly concerned, and they have been checked by myself, and f know a good deal about this industry. By the cost of production I mean the cost of growing the potatoes and marketing them.
– Do those costs include freight from Sydney?
– No. That is the cost of getting them to the port at Burnie or Devonport. It is the cost as estimated by those putting their case in Tasmania. On the other hand, the cost of production in Victoria is about £1 a ton less.
– Does not the cost depend on the yield per acre?
– Obviously it does and the yield per acre varies extraordinarily throughout Australia, and even in the same district, according to the season and the quality of the land. It varies much more than does the cost of production. The Tear-Book gives the average yield per acre for Tasmania at 2J tons over the last seven years, while the average yield in Victoria is just under 3 tons an acre. As against the increased cost of production in Tasmania, potatoes from that State always fetch a higher price on the Sydney market than do those from Victoria or New South Wales. They are of better quality, or it may simply be that they suit the taste of the people, there better than do other potatoes. The fact remains that at Sydney, which is the chief market for Tasmanian potatoes, their average price is from £2 to £2 Ss. a ton higher than that for Victorian and New South Wales potatoes.
– What has been the average price over the last five years ?
– According to the evidence given before the Tariff Board the average price has been about £7 a ton. That is, it has about equalled what is claimed to be the cost of production. There has been no margin of profit over a period of years. Because of fluctuating prices, uncertain seasons, and the prevalence of disease in certain areas, the Australian potato producer earns little more than a living wage. I understand that the cost of production given in the Tariff Board’s report is estimated on a wage of 9s; a day. The worker engaged in the potatogrowing industry very rarely earns more than 10s. a day, but 10s. a day is about the ruling wage in the district where I live in Tasmania. If it were £4 a week, the cost of production would be very much higher, than is quoted in the Tariff Board’s report. Certain honorable members seem to be surprised at the figures I have given relating to the cost of production.
– I am.
– The land that produces potatoes in Gippsland and in the northwest of Tasmania was originally covered with forests. The work entailed in removing the heavy timber can be imagined if not easily understood by honorable members. Potatoes are mostly grown in Tasmania in hilly and broken country, which does not permit of the employment of up-to-date machinery such as can be used in growing wheat. In these circumstances, the cost of production is higher than it ought to be, and land values are high, not because of the operations of speculators, or because of the dearth of suitable land, but because of the extraordinary cost involved in cutting down the heavy growth of timber and in bringing the land in a condition suitable for growing potatoes. If we took into account what would represent a fair rent, based on the actual cost of bringing the land into a state of productivity, it would be very much higher than the figure mentioned by those who put the case for the potatogrowers before the Tariff Board. I think it is generally understood that those engaged in the task of bringing forest areas under cultivation are never paid an adequate reward for their labours. Among those are the potato-growers. There are some exceptions. In some parts of New South Wales and Victoria the land on which potatoes are grown is reasonably level, and special machinery can be used, but in these more favoured districts the production is less than it is elsewhere, and the value of the potato produced is not so high. Because of the heavy costs of production, and the other conditions, such as varying seasons and the liability to disease, with which the potatogrowers have to contend, they are entitled to a reasonable measure of protection against importations when there is an excess over requirements in other countries. I do not care to use the word “dumping” - it is a word which, in my opinion, is very often misused - but if it means that a commodity is sold for export at less than the cost of production, or even less than the price obtaining for it in the country of production, I must say that sometimes potatoes are dumped into Australia. As I said at the outset of my remarks, I do not expect that there will be much opposition to the duty proposed, and I shall not speak at greater length, but I do wish to say that the duty asked for by those who gave evidence before the Tariff Board was £4 a ton. They considered that a duty of £4 was absolutely necessary to ensure to the potato-growers a return over the cost of production. I am sorry that the Minister has not been willing to fix the duty at at least £3 a ton. I am dissatisfied with the £2 10s. a ton provided in the schedule, but if the Minister had made the rate £3, the committee would have agreed to it willingly. Although I understand that a private member is not permitted to move to increase any item in the schedule, if other honorable members will urge an increase in the rate to £3, I shall be prepared to make an attempt to bring about that increase. I think the duty should be at least £3, but a duty of £2 10s. will be of value to the potatogrowers.
Mr.FENTON (Maribyrnong) [2.38]. - If the honorable member for Darwin can persuade the Minister to increase the duty to £3 a ton I shall support him. At the same time it seems to me that the primary producers get a very fair deal in this schedule. I do not begrudge it; but the extra protection afforded to them appears to me to be higher than that which has been accorded to secondary industries.
.- I commend the Minister for having adopted the report of the Tariff Board. The duty on potatoes will do a vast amount of good to some of our primary producers. Parts of my electorate are the largest potato-producing districts in Australia; Bungaree and Warrenheip being particularly noted in this respect. It is a matter of regret to me that the duty proposed is not higher, but the potato-growers realize the difficulties of the Minister and are willing to accept it as an instalment.
– Would the honorable member support an increase in the duty to £3 a ton?
– I should be pleased to do so.
– Why not make it £5 a ton?
– I have no desire to prohibit the entry of potatoes unless they are likely to spread disease. In that respect I am pleased that the Minister for Health is not permitting potatoes to be imported from New Zealand while potato diseases are prevalent in that dominion. The potato-growers of the Ballarat district are mainly protectionists. If the adoption of a protective tariff increases the price of the commodities they use, they are willing to pay those prices in order to assist secondary industries. For years they have paid those increased prices without demur, and now the Minister has partially yielded to the request of a large deputation representative of all parts of Australia, and including many potatogrowers, for the imposition of a duty on potatoes. I trust that the item will be agreed to. The potato-growing industry is worthy of the assistance that has been given to it.
– As the representative of one of the principal potato districts of New South Wales - the higher tablelands of New England - I support the request of the honorable member for Darwin (Mr. Bell) that the duty should be increased to £3 a ton. There is no need for me to take up time in giving my reasons^ for supporting an increase to £3, because the Tariff Board’s report deals with the whole position, but in view of the fact the growers applied for a duty of £4, I think £3 would have been a very fair compromise. The Minister has given us plenty of precedents for not following the recommendations of the Tariff Board in their entirety, and in view of the opinion of honorable members representing potato-growing districts, I think he would be quite safe in adding another 10s. a ton to the duty on potatoes. I trust that he will do so before it is too late, because, as the honorable member for Darwin has shown, the £2 10s. a ton, while acceptable to the potatogrowers’ association, is not in accord with their wishes.
– I have much pleasure in supporting the request made by the honorable member for Darwin. While I am pleased that the Minister has proposed some increase in the duties on potatoes in order to safeguard the interests of a large number of primary producers, I think that rs the growers asked for a protection of £4 a ton, they might reasonably expect at least £3 a ton.
– Many people ask for about twice as much as they expect to get.
– No doubt the Minister has had that experience in connexion with other industries. The growers asked for £4 a ton, and the Tariff Board recommended £2 10s., and that recommendation the Minister has adopted. I was surprised to read in the report of the. Tariff Board that during 1925-26, 163,514 cwt. of potatoes were imported into Australia. As we can produce all the potatoes we require, it should not be necessary for us to get any supplies from abroad. By patronizing the local producers we would be giving more employment to our own people. Very few potatoes are grown in my electorate, but I regard this item from the point of view of the primary pro’ducers of Australia. They naturally argue that as protection is afforded to all the secondary industries they also are entitled to protection against potatoes imported from overseas. I agree with the policy of building up secondary indus tries by the aid of protection, and I am prepared to apply the same principle to primary products, including potatoes, sugar, butter, and cotton. I understand that in some years large quantities of potatoes are imported from New Zealand by speculators, middlemen, and market-riggers, who batten on the primary producer. I know the Minister is sympathetic towards Australian industries, and I ask him to reconsider his decision and increase the duty by 10s. per ton.
.- The electorate I represent is one of the biggest producers of potatoes in the Commonwealth, and plays a very big part in the interstate trade in that commodity. In proposing a duty of 2s. 6d. per cwt., the Tariff Board and the Minister are doing a fair thing by the industry. What the grower is most concerned about is the danger of importing diseases from other countries. That is the greatest menace that the industry has te fear. In a normal year the” growers do not fear importations. The duty will operate only when the Australian potato crop has partially failed, and limited supplies of the local product are available on the market. When the crop is limited, the grower needs, and should be able to get, a greater return, but that is the time when the importer seeks to take advantage of our market when short supplies produce higher prices. On the whole, the Minister has fairly met the desire of the growers.
Item agreed to.
By omitting the whole item and inserting in its stead the following item: - “Rice - (a) Uncleaned, per cental, British intermediate, and general, 3s. 4d. ; (b) n.e.i. including rice meal and rice flour, per cental, British, intermediate, and general, 6s.
.- This is the sixth food duty that has come, before this committee. Before I deal with it specifically, I desire to repeat the protest I uttered on a former occasion regarding the manner in which this duty was imposed without Parliament being afforded an opportunity to discuss it. The schedule containing it was laid on the table in March last; it was not discussed, but has been in operation ever since. It is not fair to honorable members to use the forms of the House to prevent discussion as was done on that occasion. I am glad that the Government is affording ample time for the discussion of the schedule now before us, but I advise the Minister against any repetition of the action taken by him in March last, and also in the previous August, when he introduced new duties, and then moved to report progress, so that no honorable member might say a word for or against them.
Rice, hitherto, has been admitted free of duty, but as a result of the inquiry by the Tariff Board, a duty of 3s. 4d. per cental was imposed to assist certain settlers on the irrigation areas of the Murrumbidgee, who have bern induced to grow rice. I am not familiar with the conditions of that settlement, but I suppose that, as in all settlements of the kind, the selectors received some advantages to induce them to settle there. The Tariff Board inquired into the subject of rice cultivation in June, 1926, and recommended the duty which is now submitted to the committee. The applicants told, a lugubrious story about the probable returns from their crops, and induced the board to believe that they were in a bad way. Since the board’s re.port was published, more than one statement has been published regarding the condition and prospects of the rice,-growers. One is an article published in the Agricultural Gazette of the Department of Agriculture, New South “Wales, on the 1st October, 1926. Nobody will accuse the department of publishing faked figures; in fact, the terms of this article show that the writer was particularly careful to obtain authentic information. For the enlightenment of the committee, I quote it in its entirety -
The Cost of Production
The manner in which the crops grew last year showed that soil and conditions were suitable for the production of good yields, but from a commercial point of view the cost of production had to be ascertained, and this was not possible till after harvesting. The heaviest yield was obtained from a 10-acre crop at Caloro, which averaged 1444 bushels per acre; in this case a record of ali costs was kept. It must be considered that the cost of production depends to a large extent on the individual, and in this case all operations were thoroughly, yet economically carried out.
It must also be remembered that these figures are from the first year’s growing of what may be termed a strange crop. The figures supplied are as follows: -
– Yes. As against a total cost per acre of £11 2s. 6d. mentioned above, the Tariff Board’s report shows the cost to he £11 12s. lOd. per acre; the difference is comparatively small. Honorable members will concede that a net return of £17 9s. 6d. per acre is a magnificent result for any agricultural operation.
– The article, mentions a gross return per acre of 144^ bushels; the average yield is about 70 bushels.
– Seventy bushels is the Tariff Board’s estimate, but it is based on the statements of the growers, who would certainly not exaggerate their returns. “We know that rice is a heavy crop, and if 144 bushels to the acre is in excess of the average yield, certainly 70 bushels per acre is below the average. On the 15th March last, which was prior to the introduction of this duty, a lengthy article’ appeared in the Age purporting to give a careful account of the rice-growing operations in the irrigation areas. It is headed, “ Rice Growing in New South Wales; success on irrigation areas; some wonderful returns.” The article is written in most laudatory terms and suggests, if it does not actually say so, that a bright future is before any one who takes up rice growing on the Leeton section of the Murrum’bidgee area. It reads -
An inspection during the week of the rice- ‘ growing areas on the Yanco (Leeton) section of the Murrumbidgee irrigation areas gave convincing evidence of the vast improvement in cultural methods, following on the experience of recent years, and of the wonderful potentialities of rice growing in a financial sense.
It then describes how the inspection came to be arranged, and proceeds -
The first crop inspected was that of Mr. H. TJ. Tooth, at Murrami. Mr. Tooth has 75 acres under rice, and it is estimated that his return will be easily more than 100 bushels to the acre.
– 1,500 tons of rice were obtained from 2,000 acres.
– I am informed that about 45 pounds of rice go to the bushel. The article also states -
The plantings near Leeton are of considerable extent, some of them up to 700 acres, and big returns are confidently expected. These present big yields can scarcely continue at that level, as it is considered that over a term of years one ton of rice to the acre will be the limit, whereas several growers now on new soil will harvest two tons per acre. Their yield will run into thousands of pounds from comparatively small outlay. One thing is abundantly plain - that rice growing will give a good living on suitable land.
Marketing problems are then dealt with, after which the following paragraph appears -
It was stated that there were no fewer than 90;000 acres of- land under the control of the Water Conservation and Irrigation Commission suitable for rice culture, and that this would more than supply the whole of Australia’s requirements, estimated at 17,000 tons per year, but there was an assured export market.
The concluding paragraph is as follows -
The chairman of the gathering (Mr. Duffy) said in the 1924-25 season there were but 200 acres under rice; in 1925-26 this had increased to 2,200 acres, and this season there were just under 6,000 acres under crop - over 5,000 acres in the Leeton district, and only SOO acres in the Griffith section.
The article shows conclusively that before this duty was imposed the industry was developing splendidly under normal conditions and giving those engaged in it a lucrative return. The area under crop has been increased greatly, which in itself is trustworthy evidence of the soundness of the industry. The summary of the Tariff Board’s report on rice contains this sentence -
It has been amply demonstrated that ricegrowing in Australia is a commercial proposition.
In the face of that article, published under the authority of the Government, and the newspaper article from which I have just quoted, which was probably written at the instigation of the Irrigation Commission, it is impossible to justify this duty. The industry was expanding excellently without an economic stimulus of this description, and I sub-‘ mit that it does not need bolstering up in this fashion. Rice has been described as the poor man’s bread. Although I do not regard that as an apt description of it, it is unquestionably one of our most important starch foods. It is regrettable that in the application of our protectionist policy we should he taxing so many of the people’s foodstuffs. I feel sure that this will have the effect of causing a change of thought in the community. The. Government will find, as a British Government did, that when it pinches the stomach of the people they will turn upon it and rend it. The continual taxing of our foodstuffs may bring in Australia days which may be compared with the bad days of the hungry ‘forties in England.
. ^-1 congratulate the Minister for Trade and Customs upon having introduced this proposal. Until this duty was imposed the rice-growing industry was struggling hard. Had the duty not been provided I am afraid that it would have disappeared. Every fair-minded person who is properly informed on the subject must admit the justice of this proposal. Even freetraders must agree that if protection is the settled policy of the country it is fair that our primary producers should get their share of the benefit. Seeing that ricegrowing is in its infancy here, it needs protection a good deal more than some of our established primary industries. The rice-growers should not be penalized for their enterprise. The figures quoted by the honorable member for Perth (Mr. Mann) are misleading. He estimated that the cost of producing rice was £11 2s. 6d. per acre, and the net return £17 9s. 6d. per acre; but he took as the basis for estimating the return a yield of 144 bushels per acre. That is far above the average yield, which may be put down at 70 or 80 bushels per acre. If the average yield were1 as high as 144 bushels per acre, rice growing would certainly be profitable. I suppose that on selected patches a yield of 144 bushels per acre could be obtained; but the average for the whole area would not be anything like so large. By the intense cultivation of a small area of land it is possible to obtain a very large yield of almost any crop; but it is quite a different thing to maintain such a yield over a large area. Rice is a precarious crop to grow, and the watering, the keeping down of weeds, and the harvesting are all difficult operations. A good deal of land in the Mumimbidgee irrigation area is too heavy, low-lying, and wet for wheat cultivation, but admirably suited for rice-growing; consequently we should put it under that crop. The rice yield this year on that area should be sufficiently large to supply more than half the requirements of Australia, and next year the growers there hope to supply the whole of the rice requirements of the Commonwealth. Surely an industry such as this deserves a little encouragement in the shape of an ordinary duty. The honorable member for Perth said that rice could be grown profitably without the impost. But should all primary products be deprived of the benefits of the protective policy that applies to the secondary industries f I hope that the item will be passed.
.- I congratulate the honorable member for Riverina (Mr. Killen) on his defence of the primary producers. I agree that a duty should be imposed to encourage ricegrowing ; but I remind him that the argument he used with regard to rice applies equally to glucose and maize. When we are considering duties on primary products, it seems that the great majority of members of the Country party are prepared to display a vision that does not extend beyond the boundary of their own electorates. As the honorable member pointed out, it will not be long before the industry under review will be able to supply all the rice that the Commonwealth consumes.
.- I congratulate the Minister on the encouragement to be given to those engaged in rice culture. My support of the proposal is not due to geographical considerations, because no rice is grown in my constituency; but I am ready to go to great lengths to encourage its production in Australia, so that we shall not have to import it from black-labour countries. I listened with interest to the remarks of the honorable member for Perth (Mr. Mann), and, while I do not doubt the authenticity of the article quoted by him, it sounded as though it had been prepared by a commission agent who had land to sell in the irrigation areas. Astonishing progress has been made by the industry in five years, and Australia is now almost independent of outside markets for its rice supply. The honorable member based his argument on a crop of 144 bushels to the acre, which is an abnormal yield. He quoted from the Tariff Board’s report figures that suited his own contention, but he did not give the text of the report in its entirety. After having taken exhaustive evidence on the subject, the board reported in reference to the returns that the growers obtained : -
Assuming a yield of 70 bushels per acre, the gross returns to the grower at £10 10s. per ton would be £13 16s 7id. per acre. Against this, the total cost of production, as estimated by the accountant, is £10 12s. 10d., leaving an estimated net return to the grower of £3 2s. 9id. per acre. The addition to the amount of £10 12s. lOd. of the amount of £1 per acre for fallowing, referred to herein under “costs of production,” would, of course reduce the estimated net return by that amount, leaving such return at £2 2s. .94d.
I take it that £2 2s. 9½d. is assumed to be the net return on a crop of 70 bushels per acre. In the summary of conclusions, to which the honorable member for Perth referred, the board stated: -
It has been amply demonstrated that ricegrowing in Australia is a commercial proposition.
That is the first paragraph in the board’s summary of conclusions ; but it is obvious that the industry cannot be a commercial success unless encouragement in the form of a duty is given? The board added: -
Sufficient protection to assure to local growers the Australian market and to develop the industry should be assured by the provision in the tariff of a deferred duty at adequate rates, such duty to operate immediately the local industry is in a position to meet a reasonable proportion of the requirements of Australia.
That is the crux of the position. Mr. Michael Duffy, one of the growers, said that it was possible under abnormal conditions to obtain a profit of £16 per acre ; but nobody assumes that that will be the fair average return. The proposed duty is not asked for to encourage the most successful growers, but to put the struggling farmers upon their feet. I congratulate the Minister upon having dealt with this industry, and I hope that at no distant date rice culture will have assumed sufficient proportions to warrant us in reviewing the position with a view to placing a complete embargo upon black-grown rice.
. I support the contention of the honorable member for Perth It is peculiar that, as soon as one makes a plea on behalf of the wage-earners and the poorer classes of the people, by objecting to taxes on their food and clothing, one is subjected to an inordinate amount of heckling and interruption. Honorable members who invariably advocate protective duties should be prepared to listen to a little criticism, particularly as they have an overwhelming majority of the committee on their side. The proposed duty is not designed to establish a new industry, because the rice-growers are already supplying the market for rice with apparently much profit to themselves. Nothing has been said to show that we should bolster up this industry at the expense of the consumers of rice by the imposition of this duty. Notwithstanding any opposition I may encounter, I intend to oppose every thing in the nature of duties that are likely to increase the cost of food to the people.
Already the cost of living is unnaturally increased without placing additional tariff burdens on the family breadwinner. The Minister has said nothing to justify this impost. The honorable member for Perth has quoted statistics from a reliable source, which seem to indicate that there is not a shadow of an excuse for the proposal. He pointed out that without the stimulus of a tariff, the industry had gone ahead by leaps and bounds. At a luncheon given recently by the Rice-growers’ Association in the Murrumbidgee areas, the chairman, Mr. Duffy, said that ir. 1924-25, only 200 acres of rice were under cultivation. In the 1925-26 season, the area under cultivation had increased to 2,200 acres, and last season no fewer than 6,000 acres were under crop, 5,000 acres had been sown in the Leeton district and 800 in the Griffith district- That vast increase in acreage under crop is, perhaps, the best proof we could have that the proposed duty is unnecessary. Nobody imagines for a moment that the growers would put so much land under cultivation unless they were confident of a return that would repay them for their . outlay. The fact that since 1925 the area under rice cultivation has been increased from 200 to 8,000 acres proves conclusively that this industry can stand on its own feet without the necessity of increasing the price of this food to the people by the imposition of the proposed duty.
– The figures supplied by the honorable member for Lang (Sir Elliot Johnson) actually make the case for the duty, because it was only after consideration had been given by the Tariff Board and the Government to the rice-growers, in order to shelter them from the importations of black labour countries, that the area under cultivation increased from 2,000 to 6,000 acres. This duty was absolutely the salvation of the Leeton rice-growers, because abnormal importations were coming into Australia and an attempt was being made to squeeze them by a reduction of price. I am sure that the action of the Government in imposing this duty will be confirmed by the committee.
Item agreed to.
By omitting the whole item and inserting in its stead the following item: - “101. Vegetables (excepting tomatoes), dried, drysalted, concentrated, compressed, or powdered - ad val. British 20 per cent.; intermediate 25 per cent.; general, 30 per cent.”
– I feel that I should be failing in my duty to the Minister if I did not take this opportunity on behalf of the tomatogrowers in whom I am particularly interested, to thank him for the very prompt way in which he came to their assistance by correcting an anomaly in the tariff that was seriously affecting the development of their industry.
– Tomatoes now come under the definition of fruit.
– That anomaly has been rectified because of the action of the Minister in submitting it to the Tariff Board for decision. Last year considerable resentment was expressed by the tomato-growers of Australia at the action of the Department of Trade and Customs in reducing, under its regulations, the duty on tomato concentrates from 20, 25 and 30 per cent, to free and ;10 per cent. These concentrates were entirely the product of foreign countries, and the concession was given to the tomato sauce manufacturers because of an alleged shortage of local supplies of pulp. Strong protests were made to the Minister by several honorable members representing Queensland electorates and the growers throughout Australia, and he agreed in the Parliamentary recess last year to visit Queensland and to make inquiries first-hand. It was during this visit that a serious anomaly was noticed; that tomato concentrate was permitted to come into Australia at a much lower duty than that applying to tomatoes and tomato pulp. The position was that these articles came within different items of the tariff. Tomato concentrate, known as tomato puree, is a highly concentrated article produced only in foreign countries. It can be purchased for from £26 to £28 per ton f.o.b., and is dutiable at 30 per cent., representing from 2 12s. to £2 16s., which must be added to the purchase price. Australian pulp can be purchased from £8 to £12 per ton, but puree is credited with four times the strength of pulp. The Minister saw the serious consequence’ of such an anomaly, and submitted the position to the Tariff Board for adjustment. After calling evidence, the board recommended that tomato puree be transferred from item 101, dutiable at 30 per cent., plus the statutory 10 per cent., to item 54, which imposes a duty of 3s. a gallon. That recommendation has been accepted by the Minister, and its effect, based on the value of Australian pulp at £12 a ton, is that the duty on tomato pulp represents approximately £28 a ton, which is equivalent to an ad valorem duty of 200 per cent., or six times that charged on puree. It has been computed that there are from 150 to 200 gallons in a ton of puree according to its specific gravity, so that the duty of 3s a gallon represents a substantial protection to the Australian tomato industry. I wish to thank the Minister on behalf of the growers, for his promptness in adjusting this very serious anomaly, which should now secure to the primary producer a fair return for his labour. It will also make possible the expansion and development of this important industry, which is now carried on extensively in all the Eastern States of the Commonwealth. The number of growers in Queensland alone totals approximately 1,500. It should also save this industry from the unfair competition of low wage foreign countries. I hope the committee will readily approve of this important adjustment of the tariff.
.- The decision of the Minister in respect of the designation of tomatoes is long overdue. ‘ It will be remembered that the action of the department last year was most reprehensible, and the tomatogrowers of Queensland lost at least £30,000 because of the issue of a regulation altering the duty on tomatoes. I think that it was in the early part of this year that the Government reduced the duty on tomato pulp, and it was done after a brief inquiry by the Tariff Board, no evidence at all being taken from the tomatogrowers of New South “Wales and Queensland.
– That inquiry took place eighteen months ago.
– I am speaking of a certain inquiry that wa”s made between June and .November of 1926, and resultant action by the Minister this year and I do not wish to see a recurrence of it. Admittedly a mistake was made, and the tomato-growers in Queensland suffered in consequence. The action of the Government at the time caused a reduction of £3 a ton in the price of tomatoes grown in Queensland. To-day tomatogrowing is a very important industry in the northern State, extending as far north as Cooktown. As a result of the reduction in duty brought about after a brief and desultory inquiry by the Tariff Board in the latter part of last year, 1,000 tons of highly concentrated tomato pulp and 16,500 cases of tomato puree were dumped in Melbourne from abroad. This caused about 1,500 struggling tomatogrowers in New South . Wales and Queensland to suffer a considerable loss.
The CHAIRMAN (Mr. Bayley).I have allowed the honorable member the latitude that was given to the honorable member for Moreton (Mr. J. Francis), and I now ask him to direct his attention to the item, which he will notice, specifically excepts tomatoes.
– The item is placed in the schedule specifically to except tomatoes from it.
– Does the honorable member desire to move that tomatoes shall be included in the item?
– Tomatoes have been excepted from this item for a certain purpose. They were previously known by the customs as a vegetable, but are now a fruit. The only reason for the item is to increase the duty on tomatoes and that, I consider, to be absolutely necessary.
– I cannot allow the honorable member to enter into a detailed discussion of tomatoes.
– The honorable member for Moreton was allowed to do so.
– I have allowed the honorable member the latitude that was given to the honorable member for Moreton, and I now ask him to confine hia remarks to the item.
– I rise to a point of order. It seems to me that the only reason for the item appearing in the schedule is to increase the duty on tomatoes, and surely a discussion upon tomatoes, and the effect of the increased tariff on the industry, is germane to the item.
– The item before the Chair deals with vegetables, excepting tomatoes; therefore I cannot allow the honorable member for Capricornia to deal at length with tomatoes.
– I rise to a point of order. Assuming that I wished to oppose the increased duty on tomatoes, under what item would I be able to discuss it?
– The honorable member would not be in order in discussing any item that is not specifically mentioned in the schedule.
– The reason for including this item in the schedule is to increase the duty on tomatoes.
– The honorable member must resume his seat if he continues to discuss tomatoes.
– I know that you, Mr. Chairman, as a Queenslander, will realize the importance of an increased duty on tomatoes from the point of view of the Queensland growers.
– Order! The honorable member must not continue along these lines.
– I wish to take this opportunity of pursuing my few remarks on behalf of the tomato-growers of Queensland, whom I represent, and to point out the disabilities under which they labour.
– Order ! The honorable member will not be in order in doing that.
– The Chairman allowed the honorable member for Moreton to go into a detailed discussion of the subject.
– Order! The Chair permitted nothing of the sort. The Chair permitted the honorable member for Moreton to make passing reference *o tomatoes, as it also did the honorable member for Capricornia, but the honorable member for Capricornia proceeded to discuss in detail a matter which ha was informed was out of order.
– I rise to a point of order. I do not wish to prolong the debate, but, as the honorable member, for Dalley (Mr. Theodore) so tersely put it, it is clear that the only reason why item 101 is on this schedule is to eliminate tomatoes from an existing duty. The honorable member for Capricornia and other honorable members may want to argue that that action should not have been taken.
– TI. e Chair would not have interrupted the honorable member for Capricornia had he followed that line of argument.
– I was speaking of the increased duties, and the necessity for them, and pointing out the disabilities under which the tomato-growers of Queensland labour as the result of the intervention of the Minister last year, which was based on an inadequate inquiry into the position without consulting the growers.
– I take it that the honorable member is permitted to object either to the exemption or non-exemption of tomatoes from duty.
– The honorable member is permitted to follow that course.
– I wish to occupy the few minutes at my disposal in referring to the disabilities under which the tomato-growers of Queensland labour.
– The honorable member is not in order in pursuing that line of argument.
– If the Chairman intends to act in that manner, the item will be held up for some considerable time.
– Order! The honorable member will resume his seat if he does not continue the discussion.
– I have been asked by the tomato-growers qf Queensland to make reference to the loss that they sustained last year as a result of the unwarranted intervention of the Minister.
– Order. The honorable member is not in order in doing that. This is a tariff discussion.
– But this item is inserted for the purpose of giving an increased duty on tomato pulp. Surely I have a right to discuss the merits or demerits of the action of the Minister, and to give reasons why the Minister should alter the heading under which tomatoes come. It would have taken me only a few minutes to do that, but now, owing to my having been harassed, I have taken about twenty minutes.
– Order! The honorable member cannot discuss that phase of the matter. I ask the honorable member not to discuss tomatoes in detail. The honorable member is perfectly in order in congratulating or condemning the Minister for his action.
– I congratulate the Minister on having seen the light in regard to the tomato industry. The tomato-growers of Queensland suffered great losses as the result of the policy of the honorable gentleman before he saw the light. The Minister reduced the duty on tomatoes, and allowed southern manufacturers to buy tomatoes from abroad to the value of £30,000, while there were on the Queensland market 160,000 cases of tomatoes that could have been used for pulping purposes. Tomatoes can be grown all the year round in Queensland.
– Order! Now the honorable member is going beyond the item.
– The Chairman is not a very patriotic Queenslander when he makes such rulings. I strongly resent the action of the Chair in allowing one honorable member to discuss the matter and preventing me from doing the same thing.
– Order! The Chair resents such an insinuation.
– The Chairman’s ruling is very unsound on this point.
– Although the ruling of the Chairman may be unsound, ‘I have no intention to give the Chair offence. If the Government repeats its action and again involves the Queensland tomato growers in a loss of £30,000, I shall move the adjournment of the House. I intend to assert my rights, despite any obstacles that may be placed in my way by the Chairman or anybody else.
– Order! The honorable member must withdraw that statement.
– Despite any obstacles put in my way by any honorable members, I shall continue to fight on behalf of the tomato growers of Queensland.
– Order! The honorable member must withdraw his statement with regard to the Chair placing obstacles in his way.
– I withdraw if it is objectionable to the Chairman.
– Order! The honorable member must withdraw his statement unconditionally.
– I did not wish to hurt the feelings of the Chair.
– Order! It is not a question of my feelings, but of the conduct of this committee.
– I congratulate the Minister upon having seen fit to exempt tomatoes from section 101. I think that action is very advisable. It indicates that the Minister for Trade and Customs has been forced to a realization of the enormous importance of the tomato industry in Queensland. I trust that when the honorable gentleman is dealing with “vegetables, dried, drysalted, concentrated, compressed, or powdered he will not let the matter escape his attention, but will take the opportunity to see that the tomato industry is protected throughout Queensland. If the honorable gentleman will on future occasions remember that ie exempted tomatoes for a specific purpose, and will watch the interests of the tomato growers of Queensland, those producers will benefit enormously, and will be able to participate in the pulping of tomatoes, which they now have in contemplation.
. I hope that I shall not run counter to the ruling of the Chair, for I really do wish to discuss tomatoes. I shall quote from the report of the Tariff Board, upon whose recommendation this item was brought before the committee. That board investigated the question, - which was submitted by the Minister on the 22nd March of this year, the inquiry being conducted in Sydney and Brisbane. After summing up the position of the tomato industry and the nature of the competition, which was very largely a foreign competition, the board made this recommendation, which I should like the Chairman to follow, as it seems to be so apposite to the reference by the honorable member for Capricornia (Mr. Forde) -
The Tariff Board is satisfied that the present wording of item . 101 of the customs tariff constitutes an anomaly is so far as the charging of duty on tomato puree and tomato pulp is concerned, and also that itis desirable that such anomaly be removed.
With this end in view the board recommends the adoption of the proposal put forward by the Department of Trade and Customs, namely, that tariff item 101 be amended by the insertion therein of the words “ excepting tomatoes “ after the word “ vegetables.” The item quoted will then read - “ Vegetables, excepting tomatoes, dried, drysalted, concentrated, compressed, or powdered ad val., 20 per cent, 25 per cent., 30 per cent.” and the amendment will have the effect of bringing tomato concentrate, within the operation of item 54 (1) of the tariff, and the rates of duty applicable thereto will be the same as those applying to tomatoesin their natural state and tomato pulp.
The report indicates that there will be an increased protection on tomatoes, tomato pulp, puree, and concentrates by bringing the duty up to 3s. per gallon. Surely, as that is the intention and the consequence of the item, a reference to tomatoes such as was made by the honorable member for Capricornia must undoubtedly be in order, unless there is something very anomalous and paradoxical in our standing orders.
The CHAIRMAN (Mr. Bayley).Order! I was not aware that the honorable member for Dalley had risen to a point of order. I refer the committee to the fact that the memorandum specifically mentions that tomato concentrates now came under item 54 (1). This is purely a consequential amendment, and tomatoes may not be discussed in detail on this item. Realizing the close association of tomatoes with the items, I allowed the honorable members for Moreton and Capricornia to refer to the subject in passing.
– The Chairman has not a leg to stand on.
– Order! The honorable member for Capricornia will withdraw that remark.
– As it is unparliamentary, Mr. Bayley, I withdraw what I suggested.
Item agreed to.
Item; 105 -
By omitting the whole of sub-item (aa) (three times occurring) and inserting in its stead the following sub-item: - “ (aa) Piece goods, cotton, silk or containing silk, artificial silk, or containing artificial silk, but not containing wool, knitted, in tubular form or otherwise -
For the manufacture of goods other than apparel, as prescribed by departmental by-laws, ad val. - British, free: intermediate, 5 per cent.; general, 15 per cent.
Other, ad val. - British, 20 per cent. ; intermediate, 30 per cent.; general, 35 per cent.
And on and after 1st July, 1928 - (aa) Piece goods, knitted, in tubular form or otherwise, of cotton, silk or containing silk, artificial silk or containing artificial silk, or being an admixture of wool with other fibres -
For the manufacture of goods other than apparel, as prescribed by departmental by-laws, ad val. - British, free; intermediate, 5 per cent.; general, 15 per cent.
Other, ad val. - British, 30 per cent.; intermediate, 40 per cent. ; general, 50 per cent.
Or per lb. - British, 2s.6d. ; intermediate, 3s. ; general, 4s. whichever rate returns the higher duty.”
By omittiug the whole of sub-item (b) and inserting in its stead the following sub-item: - “(b) Cotton and linen piece goods defined for cutting up for , the manufacture of hemmed or hemstitched handkerchiefs, serviettes, tablecloths, or window blinds, as prescribed by departmental by-laws, ad val. - British, free; intermediate, 10 per cent.; general, 20 per cent.”
By omitting the whole of sub-item (e) and inserting in its stead the following sub-item: - “(e) 1. Velvets, velveteens, plushes, sealette, and cloths imitating furs, astrachans; italians containing wool, ad val. - British, 15 per cent.; intermediate, 20 per cent. ; general, 25 per cent.
Lace for attire, lace flouncings, millinery and dress nets, veilings, embroideries in the piece, tucked linens or cottons, ad val. - British, free; intermediate, 15 per cent.; general, 25 per cent.”
By omitting paragraph 2 of sub-item (f) and inserting in its stead the following paragraph : - “ 2. Piece goods, woollen, or containing wool, n.e.i., ad val. - British, 35 per cent.; intermediate, 45 per cent. ; general, 50 per cent.
And on and after 1st July, 1928 -
Piece goods, woollen, or containing wool, n.e.i., but not including knitted piece goods being an admixture of wool with other fibres, ad val. - British, 35 per cent.; intermediate, 45 per cent.; general, 50 per cent.”
By omitting paragraph 3 of sub-item (h) and inserting in its stead the following paragraph : - “ h. Leather cloth, ad val. - British, 5 per cent.; intermediate, 10 per cent.; general, 15 per cent.
And onand after 1st July, 1928 - “ h. Leather cloth, ad val. - British, 20 per cent. ; intermediate, 25 per cent; general, 35 per cent.”
– This item refers principally to knitted goods in tubular form, either of cotton, silk or mixtures. The most important aspect of the item is the deferred duty contained in section aa and the consequential deferred duty included in f 2 in connexion with piece goods. Should the duty in aa operate it would, of course, take the place of the duty that now operates, which includes knitted piece goods in the woollen item. Consequently, knitted piece goods being an admixture of wool and other fibres would be excluded from the second item. There has been a considerable amount of controversy in connexion with this particular material. I am confining my remarks to item 105. The hosiery duties themselves come in under item 115. It will be remembered that the Tariff Board took a great deal of evidence regarding this line of goods, and in a report dated the 8th October, it recommended that a deferred duty be imposed, because, in the opinion of the board, the local manufacturers of knitted tubular piece goods would not be able to supply the requirements of Australia until that date. Moreover, there are about 1,000 employees engaged by makers-up - those who import piece goods and use them as the raw material for making the finished article - and the Tariff Board thought that many of those workers would risk unemployment if supplies of raw material were not available from local sources to keep them occupied. That was why the board recommended a deferred duty. Since then, however, many representations have been made to me, and a very large deputation, consisting of representatives of practically all the New South Wales and Victorian factories, waited upon me, and furnished me with information which, I understand, was not available or, at any rate, was not tendered, when the Tariff Board was taking evidence. As a result of those representations, I am of opinion that a further inquiry should be made, with a view to the more immediate application of the duty. There have been very large importations of this- material from abroad, and during the last five months these importations have been larger than ever. We are entitled to believe that there is now a fair . amount of foreign material ‘in stock in Australia, and we should not allow an avenue to be opened for further very large importations. Therefore, on behalf of the Government, I move -
That the item be amended by omitting from sub-item ( aa ) the words, “ 1st July,” and inserting in their stead the words, “15th January.”
– Why not make it the 1st January? Let the change come with the new year.
– It is a fair thing that a further inquiry should be held as to the actual truth of the representations made. Honorable members know as well as I do that some of the statements made in connexion with duties are not always accurate. This matter has to be approached from the stand-point of 1,000 employees engaged by the makersup of this material. Nobody will be prejudiced; no one will be hurt. I have brought the deferred duty five and a half months nearer, provided satisfactory evidence is given that the duty ought to operate.
– Why fix on the 15th J January ?
– I have been in communication with the Tariff Board, and the members have informed me that the 15th January is the earliest date upon which they could make a report. Visits have to be made to Melbourne and Sydney, and evidence taken. In view of the representations made, the Government very carefully considered the matter, and has practically met the requests of the industry in all particulars. This proposed alteration will make it necessasy to move that paragraph 2, of sub-item f, of item 105 be amended also by omitting the words “1st July, 1”28,” and inserting in their stead the words, “ 15th January, 1928.”
.- I regard the division which we are now considering as one of the most important in the schedule, as it affects the whole of the textile industry of Australia. I think honorable members realize’ how necessary it is that we should protect thisindustry from foreign competition. With that object in view, we passed a tariff in this House in 1925. That tariff was drawn in such a way that it applied to finished apparel, and everything went well for some time. For the first six or eight months at least after the duty was imposed, the manufacturers obtained the protection they desired, and it enabled them to enlarge their output. On the strength of the duty, many of them increased their plant, and installed new machinery. Subsequently, the Japanese found a way by which they could get round the tariff. Instead of sending in the finished apparel as formerly, they sent in the goods in tubular form at a much lower duty. The result has been that to-day some of the most important factories in Australia are feeling the position acutely, and in one case, at any rate, a firm has had to be reconstructed. Of course, it may be said that there were other reasons for the reconstruction, but I do not think such is the case, inasmuch as practically every factory in Australia is experiencing similar trouble. They are all complaining of the foreign competition, and in support of that may I quote one or two extracts taken from a letter prepared by the Associated Chambers of Commerce?
The importation figures of cotton piece goods in tubular form for apparel hereunder disclose the growth of the “ making up “ business : -
Where the fabric is of material other than cotton the importations to the 30th June, 1927, are not obtainable, such goods being classed as piece goods, but large quantities of knitted fabric partly or wholly composed of wool, or artificial silk are undoubtedly imported largely by “makersup.”
Since 1st July, 1’927, more detailed statistical information has been kept, and for the three months ending September, 1927, importations are shown as under: -
Cotton piece goods in tubular form . . 95,500 Cotton tubular fabric total importations were: -
and for the first three months
If we multiply that sum by four it will give us the amount of approximately £3S0,000 for this year. As a matter of fact it will probably exceed that amount, because the importations are growing every month, and the sum may be nearly half a million. This is alarming, and should convince us that we cannot expect our textile manufacturers to compete successfully against such large importatations. The letter goes on to say -
The most serious part of the schedule is that it is a deferred duty, and will not come into operation until July, 1928.
I am pleased that the Minister has agreed to bring the date forward, but his proposal does not yet entirely meet our objections. A statement issued on behalf of Bond & Company, who are probably the largest manufacturers of this class of goods in Australia, says -
With reference to tubular piece goods, knitted, the new tariff rates that are recommended are fairly satisfactory. However, the proposed delay until July of 1928 is astounding, inasmuch as the knitting manufacturers of Australia, immediately the tariff was brought down in September, 1925, realized that a large demand would be made on them in regard to supplying heavy fleeced cotton and brushed underwear for men, women and children. Our firm immediately placed large orders oversea for machinery in anticipation of the trade that would come to us. On arrival of the machines they were erected, samples were produced and offered to the trade, with the result that we received no business, as, unfortunately for the knitting trade of Australia generally, a loophole had been left in the tariff. Importers were able to bring in tubular knitted piece goods at a very low rate of duty.
Those extracts show the disability under which the manufacturers labour, and they justly complain against the proposed duties being deferred. Although the ^Minister has made a slight concession by proposing that the duties shall become operative in January instead of in July, he has not gone as far as is necessary. In order tha the committee may be acquainted with the conditions of this industry, I quote from the Tariff Board’s report -
Among the duties which became operative in September, 1925, were a number of increases in the duties on apparel generally, and some of these increases covered articles of knitted apparel of various kinds, both for outer and inner wear (Tariff Item 110 b). These increases imposed heavy duties on apparel, and the object clearly was that the apparel industry in Australia should have adequate protection against competition from abroad, with a view to the work involved being performed in this country.
The effect of these duties was a very material diminution in the value of importations of apparel from abroad. When, however, traders found they were unable any longer to profitably import such articles as knitted underwear and. other knitted goods, they realized that cotton knitted goods . in the piece (whether tubular or otherwise) were subject to the very moderate duty of 20 per cent, ad valorem (United Kingdom) ; and 35 per cent, ad valorem (general tariff), and they at once turned their attention to the importation of tubular fabric, to be made up into garments in Australia. The greater quantity of this fabric is imported from Japan.
In regard to the rapid growth of this trade, the board said -
The development of the manufacture in Australia of garments made from imported tubular fabric has been very rapid, and is now of very considerable extent. On these points the following evidence is of interest: -
T. Davies, Melbourne. - “ The fact is that we have built up a tremendous industry here in eighteen months, and we are manufacturing in Australia those garments which were once imported in a made-up state.” “ You will remember that the tariff came in about eighteen months ago, and we have built up this industry at least 2,000 per cent, in eighteen months.” “ We have the most modern machinery.”
H. Spring, Melbourne. When asked the total weight of his requirements in (imported) knitted fabric, he was making up at present, said - “ I should say about 4,500 lb. per week.”
A Brisbane witness said that his firm (a wholesale softgoods house), imported the tubular fabric, and the work of making it up into garments was let to private contract workers. “
It is clear that after the duty on knitted apparel came into operation, the importation from Japan of tubular fabric to be converted into garments in Australia, developed very suddenly.
– Most of that material comes from Great Britain.
Mi-. CHARLTON. - I repeat that it comes from Japan, and the import statistics show how rapid has been the growth of the trade, which at the present rate of increase, will total £382,000 this year. The Tariff Board said -
The Tariff Board has very definitely arrived at the conclusion that higher duties on knitted piece goods are necessary to protect the Australian knitted goods industry, and in fact it regards higher duties on such goods as only the necessary corollary of the increases made in the duties on apparel in September, 1925, and considers that if the trade had foreseen the development which has since taken place, and brought the possibility of it under notice, steps would have been taken to prevent the intention of the tariff from being defeated. It now h:is to bc recognized that a number of thriving businesses have been created on account of the loop-hole that was left, and these businesses having been legitimately established ure entitled to some consideration.
We have, on the one hand, the evidence of the manufacturers that their business is suffering because of these importations, and, on the other hand, the statement of the Tariff Board that the duty which was imposed in 1925 has been rendered ineffective by the cute Japanese discovering the possibility of sending goods in tubular form to be made up in Australia. It is futile for us to impose a duty for the protection of our industries, if we leave loop-holes by which foreign countries with lower conditions of labour can undersell our local production. A few people are now employed in making up these tubular goods to the detriment of thousands who would be employed in local factories if this apparel were knitted in Australia. I can see no reason why the proposed duties should not operate immediately. The Minister considers that he is acting generously by advancing the date on which the duty will come into operation from July to the 15th January. In the next five weeks, however, all the material now in bond will be cleared, and ships carrying cargoes of imports from Japan will expedite their deliveries so that the cargoes may be landed in Australia, and put through bond before the 15th January. The Tariff Board received evidence that there is sufficient tubular material in Australia to supply the market for the next twelve or eighteen months. The importers will be able to continue the manufacture of apparel from tubular material for a considerable time, even with the supplies at present in Australia, and if we give them another month’s grace they can cable to Japan foi immediate shipments of further supplies and accumulate sufficient material to hold the market against the local knitting mills for perhaps a couple of years. That will mean that people now unemployed in the textile industry will be kept still longer out of work. The importers of this material are keen business men who will take advantage of every loophole, and probably have already made pro vision for extra shipments to arrive before the deferred duty can operate. I cannot understand why the Minister should make a distinction between this duty and the duties on other articles.
– The honorable member is overlooking the Minister’s explanation, that he is adopting the statutory course of referring this item back to the Tariff Board.
– There is no need to do that. The board has recommended that the duty be deferred, because apparel is at present being manufactured in Australia from imported tubular material, and if the duty became operative at once none of the factories in Australia would be capable of supplying the market. But Mr. Bond has stated that he is ready to supply the trade, and that his machines are lying idle. Other manufacturers in Melbourne have stated their readiness to manufacture these goods. The very fact that the Minister has advanced the date of operation of the duty from July to January, is proof that he realizes that there is no need to defer it.
– That really means that the inquiry by the Tariff Board, as to whether the duty should become operative on the 15th January or be further deferred must be held early in January.
– I object to further inquiry by the Tariff Board. It has made a recommendation and the Minister without referring back to the board has advanced the date on which the duty will operate. The Government apparently has recognized that it is necessary to depart from the recommendation of the board. If this committee agrees that the duty shall operate in January, it will so operate. If, on the other hand, the committee decides that the duty shall become operative forthwith, it will become so. I do not think that the Tariff Board has the right to a further say on the subjectIt has made its inquiry and report, and the responsibility of acting rests upon the Minister. He, of course, should be guided to some extent by the recommendations of . the board. The point at issue is whether this duty shall be imposed from the 1st January or immediately. I intend to move an amendment the effect of which will be to make the duty applicable immediately.
– 1 could not accept such an amendment, for it would increase the amount of money received.
– I am not surprised that you have ruled in that way, Mr. Chairman, but I doubt whether your ruling is sound. Perhaps the Minister would be prepared to amend his amendment as I he ve suggested. I can see no sound reasin why the increased duty should not hive immediate application. It would affect stocks held in bond; but, unless heavier imposts are placed upon these goods, they will enter into competition with locally manufactured articles to the detriment of the industry here. Protection is undoubtedly the fiscal policy of this country. We discovered during our last tariff debate that only seven or eight members of this committee were against it. The vote that was taken last night in respect of butter indicated that only twelve out of 55 honorable members were against the proposed duty. The general community knows that this is a protectionist Parliament, and has invested its money in many industries believing that if necessary they will be protected.
– Unfortunately, even a protectionist Parliament cannot control economic conditions.
– I disagree with the honorable member. We can control the economic conditions of our own country. We have built up a standard of living in Australia, which I hope to see still further improved, which makes it impossible for us to produce at the low production costs of various low-.wage countries abroad. We ought, surely, to insure that our home market shall be available to our local producers and manufacturers. As I pointed out yesterday an increase in duties does not necessarily mean an increase in the price of commodities to our customers. Prices depend to a considerable extent on methods and volume of production. It is well known that Messrs. G. A. Pond and Company have a most up-to-date factory. Their methods are efficient and their staff thoroughly qualified. They are admirable employers, and since the inception of their business, have not had any trouble whatever with their employees. But on account of the severe competition to which their products have been subjected by those of manufacturers who operate in low-wage countries overseas, the company has been compelled recently to go into liquidation. It would be disastrous for us to allow an industry like this to languish and die. I have been asked what the policy of the Labour party is on migration. We believe that as many people should be absorbed here as can be provided with employment under Australian conditions. The larger our population, the bigger is the local market available for our primary and secondary producers. I maintain that primary and secondary industries should be developed side by side if our country is to progress. The best market that our people can have is the home market. On further consideration I shall definitely submit my suggested amendment. I move -
That the words “ loth January “ he omitted from the proposed amendment with a view to insert in lieu thereof the words “ 15th December.”
– I decline to accept the amendment, on the ground that to do so would increase the amount of money received under the tax.
– I rise to a point of order. I submit that Standing Order 171, which covers this point, does not justify the rejection of the amendment. The Standing Order reads -
No amendment for the imposition or for the increase of a tax rate or duty shall be proposed by any non-official member in any committee on any bill.
The amendment does not impose ner increase a duty. There is nothing in the Standing Order to indicate that an amendment which had the effect of increasing the revenue receivable from duty is out of order. When the Income Tax Assessment Bill was before the committee recently, the honorable member for Swan moved an. amendment with the object of levying income tax upon Australian residents in respect of profits earned outside of Australia. It was accepted and voted upon, notwithstanding that had it been agreed to it would have had the effect of increasing the amount receivable under the tax. I presume that it was accepted on the ground that it did not impose a new tax, nor increase the rate of an existing tax. I submit that that precedent is good ground upon which the amendment of the Leader of the Opposition could be accepted. v
– I suggest, Mr. Chairman, that you have given too narrow an interpretation of thi. Standing Order governing this matte*. Surely our Standing Orders were framed to enable us to conduct our business in a reasonable and common-sense manner. The principle upon which this Standing Order is founded is sound. It is that there shall be no irresponsible interference with governmental proposals relating to the imposition of duties or taxes. I support the contention of the honorable member for Yarra that this amendment does not impose nor increase a duty, and that, therefore, it is in conformity with the Standing Orders. In my opinion, it would be in order for a private member to propose an amendment to an Income Tax Assessment Bill which would have the effect of altering or modifying a provision even though the amount of taxation to be received under the proposal was varied so long as the amendment did not interfere with the rate of tax; and similarly I submit that a private member would be entitled to move an amendment to an Appropriation Bill to modify or disallow any of its .provisions, so long as it did not interfere with the appropriation. I submit, Mr. Chairman, that you might allow the interpretation to be modified, so that the amendment could be accepted, otherwise you would establish an undesirable precedent out of keeping with the tradition that Parliament should have full freedom, consonant with the main principles that govern our procedure.
– We should consider, as a guiding principle, whether the motion is one to increase a tax. If we increase the. period over which the tax is to b* collected, we shall increase the tax, and, therefore, I think that the. ruling is quite sound.
– Standing Order 171 reads -
No amendment for the imposition or for the increase of a tax, rate, or duty shall be proposed b’y any non-official member in any committee on any bill.
That relates actually to the imposition of a tax; but the amendment by the Leader of the Opposition relates more particu larly to the incidence of a tax. In any case, before a further limitation if imposed upon the rights and privileges of honorable members with regard to a subject that is always considered from a non-party stand-point, I submit that the Chairman should give a considered opinion. I also submit, with all due respect, that he might consult Mr. Speaker on the matter. To indicate the exceedingly liberal interpretation that the first Federal Parliament placed on this Standing Order, I direct attention to the fact that when the point was raised in 1901 by the then honorable. member for Kennedy, the late Honorable Charles McDonald, who moved, “ That the item ls. 6d. be increased by ls.”, the Chairman of Committees, Mr. Chanter, allowed the amendment, and claimed that Standing Order 171 did not affect the position. I refer honorable members to Hansard, of November, 1901, page 7,133. I take it that Parliament, in its first session, took the view that the tariff, so far as its protective incidence was concerned, was more to be considered from that stand-point than as a taxing measure. The point was referred to the Speaker, the late Sir Frederick Holder, who sustained the Chairman’s ruling. His decision was that nonofficial members could move for increases in duties. I have consulted the present Speaker, Sir Littleton Groom, and I have reason to believe that Sir Frederick Holder subsequently ruled that a nonofficial member could not introduce an item that would add to duties; but, so far as 1 am aware., no considered decision has been given by the Speaker in the ^Commonwealth Parliament upon the general principle since 1901. I mention this to show that the liberal interpretation first given to the Standing Order has been narrowed down, since I understand that Chairmen of Committees have invariably ruled out of order motions for increases of duties. If the Chairman rules to-day, as I understand that hp intends to do, the rights of honorable members will be further limited. From inquiries made from the present Speaker, I understand that the practice obtaining in the House of Commons has been ascertained. The Speaker of the House of Commons contends that there is a difference between the practice in Great Britain and that in Australia as decided by Sir Frederick Holder. In any case, I direct the attention of the Chairman to the fact that no decision has been given other than the ruling of the late Sir Frederick Holder, on the 12th November, 190J. I refer honorable members to Sir Harrison Moore’s Commonwealth of Australia, which shows that there is nothing in the Constitution to limit the right of honorable members to move for increases in duties. In the second edition of his work, published in 1910, Sir Harrison Moore stated in a footnote at page 138d -
It will be noticed that the prohibition does not extend to taxation, and it was resolved during the first session of Parliament that it was competent for a private member to move an increase in the amount of a proposed customs duty.
It seems to me that all we have to guide us is the past practice. There is no reason why under our Federal system of government we should be guided by rules laid down iri the British Parliament. The committee invariably accepts the Chairman’s ruling on the subject ; but that is no reason why it should not be challenged.
– The present opinion goes very much further than the previous ruling.
– Yes, and if accepted will render much of our discussion fruitless. It rests largely with the Minister to state whether a duty involves an increase in taxation or an increase in appropriation, and by the Minister’s statement the Chairman of Committees is invariably guided. Parliament should have the utmost freedom in considering duties that are intended to be protective in their incidence and are not previously imposed for revenue purposes. It is an absolute anomaly that honorable members may move for reductions of customs” duties, but are not permitted to move for increases. This limitation certainly impedes the exercise of the prerogative of Ministers under the system of responsible government. Therefore, the suggestion that if honorable members had the power to move for increased duties it would interfere with responsible government is ludicrous. The question whether the Government’s responsibility is involved can always be decided by the Minister in charge refusing to accept an amendment, or regarding it as a want-of confidence motion in the Government. I protest against this antiquated procedure, which stultifies honorable members. I hope that the ruling will not involve a further whittling away of the rights and privileges of this Parliament.
– I well remember that, when the subject was ruled upon in the first Federal Parliament, during the longest and most protracted tariff debate in the history of federation, the parties were equally divided, and a liberal interpretation was placed upon the standing order.
– Liberal or sane?
– Sane and also liberal, as compared with the previous practice. It was only by that means that the discussion during that long period could be carried on. Nobody would dispute the able manner in which the first Speaker discharged his onerous duties. But the amendment now proposed by the Leader of the Opposition does not seek to increase the rate of the tax. If the most strict interpretation were placed on the standing order, it would at least allow the amendment to be moved. The amendment might affect the amount of revenue raised, but the standing order does not mention revenue.
– Does not the honorable member admit that the tax would increase the amount collected during the year?
– I contend that the standing order merely deals with the tax rate. 1 Mr. Mann. - Is not the honorable member forgetting the first standing order ?
– No. No standing order can nullify the effect of this one. This Standing Order provides for work in committee, because it states that no amendment for the imposition or increase of a tax, rate, or duty shall be imposed by any non-official member in committee. I trust that you, Mr. Chairman, will reconsider the application of this Standing Order to the amendment, otherwise, if we are to have strict interpretations - and, in my opinion, wrong interpretations - placed upon the Standing Orders, we shall narrow down the rights of honorable members and interfere with the successful working of parliamentary proceedings.
– I assure honorable members that the Chair’s one object is to maintain their rights and privileges. In case there is any doubt, I shall quote the Standing Orders. Standing Order 171 reads -
No amendment for the imposition or for the increase of a tax rate or duty shall be proposed by any non-official member in any committee on any bill.
I direct honorable members’ attention to these words “ no amendment for the imposition of a tax rate or duty.” The amendment certainly provides for the imposition of a duty and its effect would be to increase the revenue. Apart altogether from standing orders, I must be guided by precedents that have been established in this chamber, and failing that, try to discover from May’s Parliamentary Practice the rulings that have been given in the House of Commons. The honorable member for Reid and other honorable members stressed the point that the privileges of honorable members are being whittled away;, but it is in the hands of honorable members themselves to amend the Standing Orders if it is considered that they are not sufficiently elastic. This question is an old one. The honorable member for Reid referred to a ruling that was given in 1901. That was given because, at the time, the members of another place claimed the right to submit amendments to this chamber, but that right was not acknowledged, and, in order to overcome the difficulty, a ruling was given that corresponding amendments could be moved in this committee.
– At that time the amendment proposed an increase in duty.
– It was moved, but only because there was a difference of opinion between the two chambers, and to overcome the difficulty the Speaker gave the ruling that I have referred to. This question goes back to the right of the Crown to ask Parliament to vote moneys. In the 10th edition of May, page 515. appears the following: -
The Sovereign, being the executive power, is charged with the management of all the revenues of the State, and with all payments for the Public Service. The Crown, therefore, acting with the advice of its responsible Ministers, makes known to the Commons the pecuniary necessities of the Government; the Commons, in return, grant such aids or supplies as are required to Satisfy these demands; and they provide by taxes, and by the appropriation of other sources of the public income, the ways and means to meet the supplies which they have granted. Thus the Crown demands money, the Commons grunt it, and the Lord* assent to the grant; but the Commons do not vote money unless it be required by theCrown; nor do they impose or augment taxes,, unless such taxation bc necessary for the public service, as declared by the Crown throught its constitutional advisers.
In this case, the amendment proposes to augment taxes by dating back the operation of the duty by fourteen or fifteen days. Some years ago, the late Speaker of the House of Commons, then acting as Chairman of Committees, was written to, and asked whether it was competent >- for a private member to propose an increase of any rate or duty in excess of such rate or duty proposed in a resolution of the Government. To this Mr. J. W. Lowther replied : - “ Certainly not, according to the present practice of the House of Commons.” In 1901, Mr. Chanter, then Chairman of Committees, ruled that a private member was in order in moving for an increase of duty in Committee of Ways and Means. That ruling has been quoted by the honorable member for Reid and other honorable members. It was upheld by Mr. Speaker Holder, but was apparently modified by a later ruling given in 1906, when a point of order was raised because the amendment in question involved taxation. The late Mr. McDonald, then Chairman of Committees, ruled first, that as the amendment involved additional taxation, it could not be moved by any honorable member other than a Minister of the Crown; and, secondly, that as metals were hot part of the proposed schedule, it was a new item of taxation and consequently he ruled it out of order. The committee desired that the ruling should be referred to the Speaker for decision, and the Speaker, Sir Frederick Holder, supported the ruling of the Chair that, as the amendment involved additional taxation, it could not be moved. Therefore, in 1906, the Speaker, by upholding the ruling of the Chairman, modified the ruling given in 1901. When the
Massy .Greene tariff was being discussed in 1920-21, Mr. Chanter, then Chairman of”-‘ Committees, allowed private members to” move for increases in duty and no objection was raised at the time. We have, therefore, the original ruling given iu 1901, which was modified in 1906, and the ruling given in 1920-21. Under the circumstances and taking into consideration Standing Order 171, also the prevailing practice of this Parliament and that of the House of Commons, I have no option but to rule the amendment, as proposed by the Leader of the Opposition, out of order on the ground that it proposes to augment taxation.
– It is with great regret i that I move -
That the Chairman’s ruling be dissented from.
I wish to point out to you, Mr. Chairman, that the authorities that you have quoted, and the reasons that you have given, do not support your ruling. In the first place, you rely upon Standing Order 171, and I merely repeat what 1 said earlier, that that Standing Order does not forbid the moving of an amendment to aiter the date upon which a duty shall come into operation. The honorable member for Perth (Mr. Mann) addressed himself to that one point, and he argued that the amendment proposed to increase the period during which the tax would be collected. The honorable member has no knowledge of the subject, nor has this committee, or even the Chairman. No one can say that by bringing a duty into operation on the 15th December instead of on the 15th January, it will necessarily increase the period of time during which the tax is collected. The duty may lapse at any time. Np one can peer into the future. We cannot tell what would be the effect of this amendment on the revenue of the Commonwealth. It has been ruled that the Chairman does not rule against an amendment such as this unless the Minister in charge declares that its effect would be to increase the tax. The Minister has made no such declaration, and I think that he has lost the opportunity of doing so at this stage. I know of no precedent, even when the amendment in question does propose an increase in taxation, of the Chairman ruling against it unless the Minister in charge has declared that that would be its effect. In any case, I contend that no one could declare that. The amendment proposes, not to increase taxation, but to alter the date on which the duty shall come into operation. If the rights of honorable members are to be taken away in this fashion, we shall soon have few privileges left. Let us examine the precedents that the Chairman is relying upon. We are indebted to the honorable member for Reid for his industry in turning up earlier rulings given in this Parliament. En 1901, the Speaker upheld the ruling of the Chairman that a private member could increase the rate of duty notwithstanding that Standing Order No. 171 was in operation. Then, in 1906, the Speaker ruled first that a private member could not move an amendment to increase taxation.; and, secondly, that the amendment related to an item which was not in the schedule, and was therefore out of order.
– What were the terms of the amendment?
– I have not that information, but the Chairman has the rulings before him. I understand that in 1906 there was no item in the schedule covering metals. A private member moved that that new item be inserted in the schedule.
– Replying to the interjection of the honorable member for Fawkner (Mr. Maxwell), the Chairman of Committees ruled the amendment out of order on two grounds.
– What were the terms of the amendment?
– They are indicated by the ruling. I have not the specific amendment before me at present. The ruling of the Chairman of Committees was-
The amendment is one that involves additional taxation, and it should not, in my opinion, be introduced by any member other than a Minister of the Crown.
The Chairman ruled the amendment out of order on two grounds, first, that as the amendment involved additional taxation it could not be moved by a private member; and, secondly, which is not germane to this discussion, that metals are not part of the proposed schedule, therefore that would be a new item under discusion
– With due deference, I submit that the second part is germane to this discussion, as the fact that it was a new item proves that it involved additional taxation.
– Would this not mean the imposition of a duty which would not otherwise be involved ?
– The standing order does not provide for that. It simply says that a private member cannot impose a duty. The endeavour of the Leader of the Opposition (Mr. Charlton) is not to impose a duty, but merely to alter a date: The Minister proposes to impose the duty. It is merely hypothetical whether this will increase taxation. It cannot be said that if an earlier date is fixed it will increase the tax. The matter involves a very important point. It is not .merely a matter of imposing rate of duty, but whether the duty shall be defeated by the action of somebody importing goods before the date it is imposed. The Leader of the Opposition emphasized the important point that a cable could be sent to Japan and that, within a month, goods could be landed in. Australia. The object of the amendment is to bring the duty into operation immediately. Honorable members should at least have some voice in conditioning the taxation imposed, and in providing amendments upon conditions surrounding that taxation. If precedent is urged, I direct the attention of the committee to the latest precedent established in this chamber, when the honorable member for Swan (Mr. Gregory), on the Income Tax Bill, moved a resolution that Australian residents should be taxed upon profits earned outside of Australia. Unquestionably, that enlarged the field of taxation, but it did not impose a rate of tax, or a new tax.
– So far as I recall the amendment moved by the honorable member for Swan, it occurred during the debate on the Income Tax Assessment Bill, and not on the Income Tax Rates Bill. The Income Tax Assessment Bill has nothing to do with increasing taxation.
– I am obliged to the Chairman for that further ruling, because it strengthens our case. It makes a fine distinction between the imposition of a tax and the conditions which surround it.
Wo honorable member can deny that certain amendments to an income tax assessment bill have not the effect of increasing the amount of taxation.
– This depends upon section 55 of the Constitution. The High Court has drawn a distinction between a bill imposing a tax and an assessment bill. It held that an assessment bill does not impose a tax.
– The AttorneyGeneral helps our case still further. The distinction that I have drawn right from the beginning is the very distinction emphasized by the Attorney-General and the Chairman of Committees. This, it is true, is legislation to impose duties; but the amendment does not seek to impose duties. The amendment has the same relation to the rate of duty as an income tax assessment bill has to an income tax rates bill. The distinction drawn by the High Court gives honorable members the right to move amendments in income tax assessment bills, and a similar amendment should be permissible here, because it does not interfere with the rate of duty. That is why Standing Order No. 171 is provided.
– Does the Chairman base his ruling on Standing Order No. 171?
– Yes. That Standing Order reads -
No amendment for the imposition or for the increase of a tax rate or duty shall be proposed by any non-official member in any committee on any bill.
Only two things are forbidden. One cannot impose or increase a tax rate or a duty. There is no punctuation in the paragraph.
– Are they not three different things - rate, tax, and duty?
– No. If they were, there would be a comma after the word “ tax.”
– There is no comma at all.
– A comma is not required, as the conjunction “ or “ is there. Tax is one thing, duty another. The word “rate” would be meaningless otherwise. This Standing Order could really be read to mean that it does not apply to a tax, but only to a tax rate, and it is the
Standing Order, upon which the Chairman relies. The amendment moved by the honorable member for Swan on the 30th November reads -
That, at the end of clause f), the following paragraph be added: - and (i) Income derived by any person resident in Australia from investments outside Australia.
We are told that the distinction was permitted because it was an income tax assessment bill and did not relate to the imposition of an income tax. This matter has a far-reaching effect, and no precedent has been quoted to indicate that honorable members have not the right to move an amendment similar to that moved by the Leader of the Opposition. It is, therefore, with great reluctance that I submit my motion to the committee.
– The question raised by this motion is an important one, as the Deputy Leader of the Opposition (Mr. Scullin) has said. I suggest to the committee that the simplest way to regard the matter is from this point of view. The proposal of the Minister :s that a tax shall be imposed upon certain goods on and after a certain period, subject, it is true, to the conditions which apply to deferred duties. I do not think that that proviso affects the matter. What concerns us is the imposition of a tax on and after the 15th January, 1928. The amendment provides for the imposition of a duty over a period from the 15th December, 1927, to the 15th January, 1928. It therefore provides for the imposition of a tax during a period in which that tax would not otherwise be imposed. It appears to me that the amendment is directly one for the imposition of a tax, and that, under standing order No. 171 it is admissible if moved by a non-official member. I put it to the committee that that argument in itself is sufficient to settle the matter. The amendment imposes upon the subjects of His Majesty the King an imposition from which they would otherwise be free during the time which I have mentioned. The Deputy Leader of the Opposition has referred to the position of an Income Tax Assessment Bill, and an Income Tax Rates Bill. The Constitution contains provisions in sections 54 and 55 - of which 55 is the one relevant to this matter - designed to protect the right of another place to amend certain legislation, and conserving this chamber to the ultimate financial control. Section 55 of the Constitution provides -
Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall he of no effect.
Laws imposing taxation, except laws imposing duties of customs or of excise shall deal with one subject of taxation only ….
It has been the practice, since the inauguration of the Commonwealth, to distinguish in the case of Taxation Bills, Land Tax Bills, Income Tax Bills, and Entertainment Tax Bills, between Assessment and Rates Bills. Take the recent Income Tax Assessment Bill. According to the ruling of the High Court that did not impose any taxation. Had Parliament not subsequently passed a rates bill, no taxation would have been imposed by virtue of the assessment bill. One of the reasons for adopting the practice of separating the assessment bill from the rates bill is to meet the requirements of section 55, that bills imposing taxation shall deal with the imposition of taxation only, and also to allow freedom of discussion and amendment in determining the provisions of an assessment bill. Section 53 is directed to the relations between the two Houses, and is not really relevant to this discussion. I only mention it because the significant words, “ Imposing taxation “ arise in connexion with the interpretation of Standing Order 171.
– Has the word “ rate “ any significance in connexion with No. 171?
– I suggest that the word “ rate,” as inserted in the standing order may have been taken from a rule of the House of Commons, where there may be bills for the imposition of rates, as well as for the imposition of taxes-. It might well be that bills are introduced there which impose charges which are known by the name of rates, rather than as taxes.
– Is the word “ rates,” as used here, a noun ?
– I suggest that it is a noun ; but it is immaterial to this argument, because this is certainly a tax, and is also a tax rate ; but the particular point upon which I rose to offer my opinion is that the effect of the amendment is to impose a tax which is additional to the tax proposed in the schedule. It provides for the collection of a tax between the period from the 15th December to the 15th January.
– This discussion is an important one, and it is a pity that it should not have taken place in such a way as to secure from the committee a nonpartisan decision. The point is not designed to ‘ benefit one party more than another; but is raised for the purpose of clarifying the interpretation of the standing orders, or their application to this particular matter, and to lay down an acceptable procedure for the committee. You, yourself, Mr. Chairman, at the outset of your ruling, stated that you wished to preserve tha rights of honorable members in this matter, and stated that you were in the. hands of the committee, and that it was for the committee or the House to determine the correct procedure. As the standing order is at present framed, it seems to me to be perfectly consonant with common sense and the assumption that the amendment moved by the Leader of the Opposition should be considered in order. The AttorneyGeneral would have a stronger case if the term in Standing Order 171 was broken up into a reference of three kinds - the imposition of taxation, rates, and duties. In this case taxation has undoubtedly a much wider import than a tax rate. For example taxation is effected by a tax assessment bill. The rate is a much more circumscribed thing. No one can deny that. If the standing order applied to taxation generally, there would be a great limitation upon the rights of honorable members in regard to a taxation assessment bill. When we were recently considering such a bill no point was raised as to the right of honorable members to move an amendment of any kind, and the Attorney-General will agree that it was not necessary that an amendment should be moved by a Minister of the Crown. In clause 14 of the Income Tax Assessment Bill ‘reference is made to deductions and the. manner in which they may be made, and in this case a time limit is imposed. Paragraph b of section 2 states -
No deduction shall be allowed of any amount of loss which would have been allowable as a deduction in an assessment for any financial year preceding the financial year commencing on the first day of July, One thousand nine hundred and twenty seven if the provisions of this section had been in force for the purposes of assessments for all financial years subsequent to the financial year commencing on the first day of July, One thousand nine hundred and twenty-two, and had applied only to losses incurred and income derived on or after that date, or on or after the commencement of the accounting period substituted for the financial year commencing on that date under sub-section 3 of section 32 of this act.
If an alteration had been made in that date there would have been an alteration in the effect of that clause as to the amount of deduction allowed, and, therefore, in the amount of revenue received.
– That would be so, but not by virtue of that bill. That is the point of distinction.
– What the Leader of the Opposition wishes to accomplish may have an effect on the flow of revenue to the customs tariff, but not by virtue of his amendment alone, but only by virtue of the whole item.
– By virtue of this amendment the tax would be imposed for a period during which it would not otherwise have been imposed.
– The schedule has to be carried before the item could operate.
– That applies to all the item3.
– The point I am making is that we must distinguish between the term taxation in a generic sense, and the special sense in which tax rates are referred to in Standing Order No. 171. There is not much in May’s Parliamentary Practice which throws light on this point; but there is one reference to it on page 534, whereon it is stated -
Thus, on the 19th March, 1845, resolutions were reported from a committee on the Customs Acts by which the import duties on glass were reduced from and after a prescribed date. In the committee on the bill introduced upon those resolutions, it was proposed to postpone the period at which such reduction of duty would take place; and the amendment was ruled. privately, by the Speaker, to be regular, although the amendment postponed the relief from taxation beyond the time voted by the preliminary committee, and agreed to by the House.
– That is not imposed taxation.
– No, it is a postponement of relief, and it might he contended that it would have the opposite effect of the amendment moved the Leader of the Opposition.
– It postponed the date of relief.
– Yes; it meant that there should be a more continuous flow of revenue, or that the flow should continue for a longer period. The ruling in that case dealt specifically with the date on which the action should take place. Therefore, I take it, Mr. Chairman, that you have not in your ruling sufficiently distinguished between an amendment which affects the tax rate, or the duty, and an amendment which sets up a different condition relating to that duty, and on those grounds I think the ruling should not be upheld.
– As this matter may come to a division, I should not like to give a silent vote on it, because, in this instance, I must vote against my leader. The Standing Order says -
No amendment for the imposition or .for the increase of a tax rate or duty shall be proposed by any non-official member. “When the schedule was placed on the table of the House it imposed an increase in duty; but the duty did not become effective until this House had passed it. Therefore, the rate remained really as it stood in the old schedule.
– The new rate has been in operation from the date the schedule was tabled.
– I know it is in operation, but if the schedule is not passed by the House, a refund must be made of the duties collected. It is not law until it has the approval of this Parliament, which is now being sought. If we seek to impose this duty on the 15th Decern-, ber, as against the 15th January, we are endeavouring to initiate legislation designed to bring about the imposition of a tax which is new taxation as much as that proposed by the Minister. I may be wrong, but that is my conception of it. If I. am asked to vote on the point I do not want my vote to stare me in the face in the future, as something which I did contrary to common sense, merely for the sake of following my party. I want to vote according to my convictions in regard to the meaning of the Standing Orders. If the Minister would accept the proposal contained in the amendment I should be very pleased. My view is that we are taking the matter out of the hands of the Minister for Trade and Customs, and instead of increasing the rate as from the 15th January, 192S, we are proposing to increase it from the 15th December of this year. The amendment does not affect the rate proposed by the Minister, but whoever moved it; it is a new rate as against the existing one, and is, therefore, an increase which the Standing Order states “ shall not be proposed by any non-official member,” and it does affect the amount of duty which we shall collect.
– The Standing Order says that a member may not move to impose a duty or increase a duty.
– Quite so. It says that no motion may be .moved for the imposition or the increase of a tax rate. Until the House has passed the .schedule, the old tax rate is the one actually in force. Assuming that the Minister has not behind him a sufficient number to carry this schedule, and it is not adopted, we have not increased the tax rate at all.
– If we pass a measure for the imposition of a duty on the 15th July, would the honorable member say that that will not be the imposition of a tax, even though it does not come into operation until the 15th of that month?
– If English means anything, and if the tax does not come into operation until the 15th July, we do not collect any taxation until that date; but there is no gainsaying that we have altered the old rate to take effect on the date mentioned. I am in the unusual position of stating a view in opposition to that of my leader. Having regard, ho-1 ever, to the intention as well as the actual wording of the amendment, I am convinced that by advancing the date from which the proposed duty shall operate, we shall be increasing the tax upon the people, which is disallowed by the Standing Order under discussion.
– The honorable member for Dalley, when quoting from May. omitted to read the following paragraph, which preceded the passage upon which he relied : -
The House accordingly, can make amendments which diminish the amount’ of a reduction of taxation, or postpone the day when the reduction takes place, although the amendments may so far increase the charges upon the people. So long as an existing tax is not increased, any modification of the proposed reduction may be introduced in the . committee on the bill, being regarded as a question, not for increasing the charge upon the people, but for determining to what extent such charge shall be reduced.
– That does not vitiate my contention that the amendment relates only to the date upon which the tax shall become operative.
– If a Minister proposed to reduce an existing tax, a private member could move to increase the Minister’s proposal within the limits of such existing tax. If the Minister for Trade and Customs moved that this deferred duty should become operative in January, 1929, and an amendment were proposed that it should operate a year earlier, would any honorable member contend that that would not be imposing a tax upon the people ?
– The duty might have the effect of keeping out a lot of imports, and in consequence less duty would be collected from the people.
– This amendment is to impose a duty on goods that are imported
– W; should be very careful to preserve, the rights and privileges of honorable members, and should be guided as far as possible by precedents. I arn sure that the Chairman does ret regard this motion to dissent from his ruling as a personal reflexion upon himself.
-Hear, hear! It is not intended to. reflect upon the Chairman.
– I agree with the honorable member for Adelaide (Mr. Yates), that in deciding a question of this kind we should not be influenced by party considerations; but something more than a mere technicality is involved in the point of order. In construing the Standing Orders and the forms and precedents which govern the conduct, of business,” any doubt should be resolved in the direction of enlarging ths freedom of private members. If we are bound by precedents, as no doubt we are, at least they should be liberally construed in favour of popular rights. The first ground upon which I support the motion to disagree with, the Chairman’s ruling is that there is no proof before the committee that the. proposal of the Leader of the Opposition imposes an additional tax upon the people.
It has been rightly pointed out that a tax involves payment by the subject in some way to the services of the Crown. That is not implied by the amendment before the committee.
– How can the honorable member affirm that?
– On the face of it the amendment is not necessarily an exaction upon the people. And it is for those who say that ii is tj prove their contention before the Leader of the Opposition can be disqualified from moving his amendment.
– Th?. purpose of the amendment is to impose a duty.
– If a tax is being imposed it is by the motion of the Minister that certain duties shall be collected on and after the 15th July. There are not before the committee two proposals for the imposition of a tax or duty. Is not the proposal that the duty shall operate from the 15th July the motion, if any, for an imposition of a tax or duty?
– Does not that preclude a motion by a private member that the duty shall be imposed before that date 2
– That begs the question. There cannot be two impositions of a tax or duty, assuming that either the motion or the amendment has a taxing effect. If it is a fact that a tax is being imposed from the 15th July an amendment to make the tax effective earlier is not a motion to impose a tax or duty.
– Does not the amendment of an unofficial member supersede the motion by the Minister?
– No. The proposal of the Leader of the Opposition is an amendment to the motion of the Minister for the imposition of a tax on a certain date.. The amendment is not a proposal to impose a tax; that proposal is contained in the original motion, and it becomes the privilege of any member of this committee to suggest a time when that tax or duty shall take effect. What will happen as a result of such imposition is merely a matter of speculation.
– If the motion imposes a tax on the 15th January, is it not possible by an amendment to impose the tax at an earlier date?
– We are merely fixing the date on which a duty already imposed shall .operate. The tax will be unaltered, but a different date will be substituted. Eoi- these two reasons - first, that when refinements in regard to procedure are being considered, the committee should resolve in favour of the more liberal rights of members; and, secondly, that the amendment is quite justifiable, inasmuch as the rate or duty is imposed by the item in the schedule, and that the amendment is merely directed to the time at which the tax proposed by the Minister shall take effect. I must support the motion to dissent from the ruling of the Chairman.
– The honorable member for Batman has contended that any doubt in regard to the meaning of the Standing Orders should be resolved in favour of extending the rights and privileges of honorable members. Nobody is more keen than I on preserving those rights, but opinions differ as to what they are. The privilege which honorable members opposite desire to preserve is that of imposing a tax, but members of Parliament first were elected to curtail the King’s power of taxation. It was the privilege of private members to stand on behalf of those they represented against unjust and unnecessary taxation, and upon that right many of the rulings mentioned in May are based. The whole structure of parliamentary practice is based upon this: that members of Parliament gather together to see that the Crown does not unnecessarily tax the people. The rights and privileges of honorable members were first granted to enable them to resist the demands of the King. Private members should not be allowed to propose unnecessary taxation, and they have rights and privileges to prevent this from being done.
– This is a new conception of democracy.
– Democracy may be as tyrannical as autocracy; but I shall not discuss that subject. We are here primarily as the representatives of the people to prevent, so far as we can, the imposition of taxation. A tax is essentially an evil thing and a burden which should not “be cast upon the people except in so far as it is necessary to provide the minimum amount necessary for the conduct of public business.
– We shall not in any manner reflect upon the ability of the Chairman of Committees if we carry this motion of dissent, but by doing so we shall protect our privileges. I appeal to Government supporters to assist us to liberalize rather than restrict the rights and privileges of honorable members. Standing Order 171, which I point out has remained unaltered since it was first agreed upon in 1901, has relation only to a bill and not to a tariff motion such as the committee has been discussing. The wording cannot by any stretch of imigination be held to cover anything but a bill. Honorable members appear to have overlooked that important point. Consequently, the Chairman’s ruling is an indefensible and unwarranted interference with the rights and privileges of private members, who are entitled to exercise every power that they have in dealing with the business that is placed before them. The Standing Orders Committee should have taken steps long ago to clarify the position and define without ambiguity the rights of private members to deal with tariff proposals. We should look at these proposals from the point of view of their protective incidence, and not from that of their revenue-producing value.
– That is only a theory.
– The honorable member for Perth made some archaic observations a few moments ago about ancient British parliamentary procedure and the origin of the parliamentary institution. I submit that a matter of this kind should not be left entirely in the hands of a small coterie of Ministers of the Crown. Why should not honorable members have the power by a majority vote to determine whether a duty should be increased or decreased? A decrease in duty is in a measure a bigger invasion upon the prerogative of government than an increase of it. It is an anomaly that a private member should have the power to move for a decrease of duty but not for an increase of it.
Mr.Scullin. - This does not increase the duty.
– That is so. All that the Leader of the Opposition desires is that the duty shall become operative at once instead of at a later date. The quotations which have been made from the rulings of various Speakers of the House of Commons and ancient tomes of parliamentary law such as May will not deter me from expressing my view that we should be governed by the Standing Orders which we have framed for ourselves. Seeing that Standing Order 171 does not in any way whatever affect our power to amend motions of the character that the committee has been considering, I strongly support the motion of dissent. We- should be permitted to deal in the freest possible manner with the imposition of protective duties in the interests of our struggling manufacturers, who are complaining bitterly about the effect of deferred duties on their business. Eighty per cent. of the honorable members of this Parliament would vote for the imposition of this duty at an earlier date if they were left free to do so, and I submit that they should not allow a narrow interpretation of a Standing Order to stultify them, but should use their common sense in dealing with the situation.
Question- That the Chairman’s ruling be dissented from (Mr.Scullin’s motion) - put. The committee divided.
Majority . . 25
Question so resolved in the negative.
.- I have just taken part in a division affecting the constitutional privileges of honorable members. I voted against your decision, Mr. Chairman, for two reasons. In the first place, I believe that it was wrong; and, secondly, it gave one an opportunity of voting on a matter which the Standing Orders, as interpreted by yourself, would prevent me from voting on. Even at this late hour, after a party division has been taken, excepting the votes of two members, I urge that the Minister for Trade and Customs should at least fix a date that will preclude the possibility of ships arriving from Japan and depositing in an Australianport large stocks of the material against which our own manufacturers desire protection. Possibly cables will be sent to Japan to-night. I have no doubt that the manufacturers of garments from tubular material already have been informed of the decision of the
Minister, either by their agents at Canberra or by other means. It is only necessary to ascertain the time-tables of steamers and find” out whether stocks are available in Japan that could be delivered in Australia on or before the 14th January.
– For instance, ships could be diverted from their usual course to Brisbane, if they were bound for Sydney.
– They could be sent to Thursday Island or the Australian port nearest to Japan, and within 21 days of the date upon which the Minister made his declaration, sufficient of this material could be landed in Australian waters to practically thwart the intention of the Parliament to protect the Australian industry. We had previous experience of such action when cotton tweeds were under consideration. To the knowledge of honorable members, whether freetraders or protectionists, Australian manufacturers can supply the whole of the cotton tweed requirements of this country. They have been doing that for some time past, and they will continue to do it. If, in the case of cotton tweeds, Australia can do the job, there is no reason why it should not also make tubular knitted goods. ‘The Tariff Board arrived at a certain decision, which was available on the 25th September; but while the textile Rome was burning, the Government fiddled away in recess. Nothing whatever was done to protect the industry from the evasion of the determination of this Parliament. We cannot escape from’ our responsibility for the way in which we misled the manufacturers. We did not do it deliberately, but- we allowed a loophole which permitted the makers of garments from imported material practically to throttle the Australian industry.
– Does the honorable member know when our attention was drawn to the matter?
– I have no knowledge of that; but my own attention was directed to it some eight or nine months ago. The duties were placed upon tubular knitted goods in a bona fide manner. Parliament agreed to them by an overwhelming majority, and almost immediately the makers of the garments evaded the intention of Parliament. Had the duties determined on the 25th September been effectively imposed, the position of the tubular knitted goods industry would have been totally different to-day, because the manufacturers who then refrained from erecting their plants would have had their machinery now in operation. A number of samples of the goods that are being manufactured in Australia have been submitted to me in a variety of colours. The material is knitted in lengths, maybe, of thousands of yards. Unfortunately, it is made from imported yarns ; but I hope that ere long this Parliament will see that these yarns are made in Australia. The manufacture of not only the yarns, but also the garments, should take place in this country. It will be seen from the samples that the work done in Australia leaves nothing to be desired. About eleven manufactories are already equipped with the necessary machinery to turn out tubular knitted goods, and two manufacturers, Messrs. Eppstein and Henry, recently erected another new plant. The evidence placed before the Minister by a deputation that waited upon him impressed him sufficiently to cause him to bring the duties into operation some five and a half months earlier than had been intended. The various firms were represented, and because of the representations made to the Minister, he was satisfied that they are now in a position to do this work. But, before the Minister will arrive at a determination to bring the duties into operation at an earlier date, he desires an- investigation by the Tariff Board. What will be -his position if the board recommends that the duties be not brought into force before the 1st July?
– I must take the responsibility for it.
– That is so, and I think that that is the proper procedure, and, next to the Minister, this Parliament should accept responsibility for such an action. The committee is quite willing to relieve the Minister of the responsibility in that connexion. His only reason for favouring the 15th January as the date is that he wishes to have the matter investigated. I think that it will be found that the Tariff Board will be convinced by the fresh evidence available that the 15th January is not too early a date upon which to bring the duties into , operation. Therefore, I think that the Minister should agree to the 1st January. . Then, if it is decided to submit an amendment to alter the date to the 15th January, or even the 1st July, I have no doubt that honorable members who dislike these duties will be found willing to adopt that course.
Sitting suspended from 6.80 to 8 p.m.
– It is important that honorable members should understand what is taking place in regard to the importation of tubular goods, including cotton for the manufacture of singlets and underclothing, fleecy-lined, or brush variety of tubular cotton goods, and artificial silk goods. Many honorable members are aware of the extraordinary growth of the importations of this class of material. In 1925^26 the value of the importations of tubular cotton, artificial silk and silk goods was £920; in 1925-26, £71,959; and in 1926-27, when a duty had been imposed to protect the Australian . industries, £175,000. From the beginning of July to the end of September the value of the importations of silk piece goods in tubular form was over £4,000; of artificial silk piece goods in tubular form, £44,000; and of cotton piece goods in tubular form, £95,000. At that rate of increase .we shall soon be importing annually anything up to £380,000 worth of knitted goods, including cotton, artificial silk and silk, and the whole of that could and should be manufactured in Australia. The Tariff Board has practically issued a challenge to the manufacturers of Australia in respect of the deferred duties, because its report contains the following statement
Such deferred duties will be a challenge to the Australian manufacturers to be equipped and ready to supply tubular fabric to all who require it, and only by doing this can they obtain the benefit for themselves of the deferred duty.
I know of eleven manufacturers who have knitting machines suitable for the making of tubular goods whether cotton, artificial silk, silk, or a mixture. They are in a position to supply the needs of Australia. In order to evade the payment of duties, some fairly shrewd importers established an extensive industry, and employed many hundreds of women and girls cutting up imported tubular goods and making articles of wearing apparel. Some of these manufacturers appeared before the Tariff Board and pointed out that certain importers of tubular goods who themselves were making up garments would not supply other manufacturers. But the importers had now guaranteed to those who have established factories and installed machinery for the making of garments, a plentiful supply of tubular artificial silk, wool, and cotton. To-day the manufacturers are in a good position to supply the needs of Australia. I am perfectly certain that the majority of honorable members would have no objection to the Minister altering the date of the operation of this duty from the 1st July to 1st January, 1928.
.- As it seems to be the desire of the majority of honorable members to alter the date of this deferred duty, I ask leave to withdraw my amendment with a view to moving another.
Amendment, by leave, withdrawn.
Amendment (by Mr. Pratten) agreed to.
That the item be amended by omitting from sub-item (a.a.) the words “‘lst July,” and inserting in lieu thereof the words “ lst January.”
Item, as amended, and as consequentially amended in sub-item (f), agreed to.
Item 106 agreed to. “
By omitting the whole , of item 107 (twice occurring) and inserting in its stead the following item: - “ 107 (a)’ Woven materials in the piece or otherwise: - Badges, hat and cap fronts (badged) , medal ribbons, looping for boots and shoes; labels and hangers for all purposes, including plain hanger material; tubular tie material in the piece; galoons bands or bandings, tapes and the like, having printed woven or embroidered lettering badge trade name mark or design thereon ad valorem, British 35 per cent., intermediate 45 per cent., general 00 per cent.
Amendment (by Mr. Pratten) agreed to-
That the item be amended by adding the following: - “And on and after 15th December, 1927. 107 (a) Woven and embroidered materials in the piece or otherwise: - Badges, hat and cap fronts (badged), medal ribbons, looping for boots and shoes; labels and hangers for all purposes, including plain hanger material; tubular tie material in the piece; galoons bands or handings tapes and the like having printed woven or embroidered lettering badge trade name mark or design thereon; slipper, shoo, and blazer bindings, ad valorem, British 35 per cent., intermediate 45 per cent., general 60 per cent.
Ribbons and galoons having not more than 48 ribs to the lineal inch and being notmore than three and a half inches in width, ad valorem, British 35 per cent., intermediate 40 per cent., general 50 per cent.”
Item, as amended, agreed to.
Items 108, 112, and 113 agreed to.
By omitting the whole item and inserting in its stead the following item: - “115. Socks and stockings for human attire, viz. : -
Amendment (by Mr. Pratten) agreed to-
That the item be amended by omitting from sub-item (a) the words “1st July” and insorting in lieu thereof the words “ 15th January.”
Item, as amended, agreed to.
Item 118 agreed to.
By omitting the whole of sub-item (c) and inserting in its stead the following sub-item: - “(c) (1) Bar, rod other than wire rod in coils, angle, tee; bars of fancy pattern in the state in which they leave the rollers, per ton, British 70s… intermediate 100s., general 120s.
.- When we were discussing the previous tariff schedule, the Minister promised that he would make further enquiries respecting the duties on iron and steel. Before this item is debated I should like to know whether he has any statement to make, and for what reason is the Government departing to a great extent from the recommendation of the Tariff Board? The Tariff Board possibly took longer to inquire into this than into any other industry. It first had the services of two certificated accountants from the Customs Department - one from New South Wales and one from Victoria. At the conclusion of its proceedings the board thanked those officers for the thorough manner in which they had investigated the subject. Yet that board made a second inquiry, assisted by two other certificated accountants, who were employed to dissect the reports made by the first two accredited accountants. Surely that was a very unusual procedure. The decision of the Government was made after the second inquiry, and we have no information other than that the Government has arrived at a decision which differs considerablv from that come to by a majority of the Tariff Board. The Tariff Board is in existence to advise the Government, but it is also there to advise honorable members. That being so there should be a weighty reason to justify the recommendations of that board on one of the principal items in the schedule being reduced by two-thirds. Wemight as well have no Tariff Board if that course is followed. I could understand the Government differing to some degree from the conclusions of the board, but its action represents practically a negation of the recommendations of the board. No doubt honorable members are aware that the Tariff Board is comprised of gentlemen who have a thorough knowledge of and a long experience with all phases of the fiscal position. I await the reply of the Minister as to whether a further inquiry has been instituted, and I ask for his explanation of this drastic disregard of the recommendations of the Tariff Board.
– The remarks of the honorable member for Newcastle (Mr. Watkins) deserve some reply from me both in my capacity as Minister in charge of the tariff and as the representative of the Government. It must always be remembered that, in addition to being a very vital industry for the development and defence of Australia, the iron and steel industry produces many types of raw material for other industries.
It is therefore an industry that needs to be very carefully reviewed. The Tariff Board, after a somewhat exhaustive inquiry, placed its recommendations as to this industry before the Government. If honorable members carefully peruse the recommendations of the board they will find that they are all based upon the difference between the cost of wages in Australia and in other countries. After an analysis of the bases that guided the Tariff Board in making its recommendations the Government decided that the whole matter required careful review. I shall read to the committee the conclusions arrived at after an examination of the bases that were the foundation of the report of the Tariff Board. They were -
Careful examination of the evidence given at the public inquiry held by the Tariff Board into the iron and steel industry of Australia, and of the board’s report thereon, clearly shows that the applicants base their request for increased duty on the disparity between the Australian and British labour costs in the production of iron and steel.
There is no quarrel with that. Mr. Rowe, of the Broken Hill Proprietary Coy. Limited, who conducted the case for the company before the Tariff Board -
Quoted in evidencea British authority on the manufacture of steel as claiming that if a ton of steel were made by the one company, and no profit charged until after the total and final cost, the real labour cost would be nearly 97½ per cent. Another British authority is cited as stating that of the total contract price for constructing a ship, at least 80 per cent. is spent in wages, from the coal and ore stage upwards.
Mr. Rowe, therefore, assumed that in iron and steel, whether in the form of pig iron, ingots, bars, or similar forms, 80 per cent. of the selling price is represented bylabour costs. He then quoted Australian wages as being 88 per cent. higher than British, and by applying these two factors he arrived at the conclusion that 56s. (id. per ton should he the duty on pig iron, based on the difference between United Kingdom and Australian wages. The absurdity of this conclusion is shown by the fact that the request of the Broken Hill Proprietary Company is for a duty of 30s. per ton, a little less than half of the difference as ascertained.
The Tariff Board followed this method in considering the whole matter, but did not accept Mr. Rowe’s figures as to the difference between United Kingdom and Australian wages. The Board ascertained that on the basis of labour employed in the actual productiou of steel at Newcastle Australian labour costs 108.26 per cent. more than British labour.
The board accepted the statement that the wages costs in all forms in the iron and steel industry under notice is represented by a uniform proportion, namely 80 per cent. of the f.o.b. selling price.
The factors considered by the board in arriving at the disadvantage under which the Australian industry labours, are: -
United Kingdom f.o.b. prices.
United Kingdom labour represents 80 per cent, f.o.b. prices.
Australian labour is 108.26 per cent. higher than British.
Less freight advantage, or
Plus freight advantage.
Evidence was taken from Mr. Hoskins, who made certain statements with regard to the costs of iron ore and the percentage of wages paid by British manufacturers, that did not agree with the other representations, and then an investigation was held in regard to the actual labour costs in the various countries, and as to their output. The report continues -
It is considered that this basis is unsound, and that the following factors should have been taken into account in determining what extra protection, if any, is required by the industry:
relative costs of ingredients in the United Kingdom and Australia;
relative output, in the respective countries;
the magnitude of importations and the percentages which such importations bear to the total consumption in Australia of each particular line;
the percentageof the total consumption in Australia supplied by Australian manufacturers;
the cost of production in Australia and competing countries;
the duty paid landed cost of imported iron or steel.
the selling price of the Australian article ;
profit made by the Australian manufacturer ;
the advantages accruing to users of Australian products by reason of having iron and steel works at their door, thus obviating storage of large quantities, and interest on money expended when large quantities have to be purchased over seas.
The position has been examined in Newcastle confidentially. In certain branches of the industry, the local manufacturers hold considerably over 90 per cent. of the trade in Australia. That leaves only a small margin for expansion.
– What particular manufacturers are those?
– In regard to’ pig iron for one thing. I ‘ propose to give the figures. Passing on to the analysis of the basis upon which the Tariff Board reported, consideration was given to the amount required to cover the difference between wages less freight protection, or plus freight disadvantage, as the case might be. These amounted, in the case of pig iron, to £2 8s. 7d., and the duty asked for was £1 10s. ; on billets they amount to £4 12s. 2d., and the duty asked was £2 12s.; on bars they amount to £6 12s. lid., and the duty asked was £3 15s.; on angles they amount to £5 15s. 7d., and the duty asked was £3 15s.; on rods they amount to £6 12s. Id., and the duty asked was £3 15s. ; and so on in regard to heavy rails, light rails, and joists. That is the basis on which the whole thing was calculated, namely, the costs, the profit, the output, the room for expansion, and the competitive importations. On each and every line in the iron and steel schedule 1 have the fullest possible information with regard to all these points. This was considered by the Government, and the result of that, consideration was the schedule which honorable members have now before them.
– Has the board expressed any opinion on the criticism levelled against its recommendations?
– Nothing has been published with regard to criticisms of the board. It should be clear that the duty of the board is to recommend to the Minister after inquiry, and the hearing of evidence taken on oath, in camera if witnesses so desire, but it is the responsibility of the Minister and the Government to consider the board’s report. 1, for one, so long as I hold office, will never consent to be a rubber stamp, and I take the responsibility for the proposals put on the table of the House. As a rule, the Tariff Board’s recommendations can be accepted.
– Has the Minister a copy of the special recommendations for perusal by members?
– No, they contain confidential information. I am prepared to give honorable members, item by item, the conclusions come to? after the most careful analysis, which resulted in the imposition of the generous duties, and the almost prohibitive foreign duties now placed before this committee. Honorable members will see that the foreign duties proposed here are practically the same as those recommended by the Tariff Board, and are proposed in order practically to prohibit the attempts that the Germans have been making and the attempts made by the Continental steel Kartel, to dig deeply into our steel industry.
– The trouble is that they are doing it.
– My informs lion is that they are not, and that imports from those sources have practically disappeared.
– The goods are coming in here as British.
– Honorable members will recollect that two years ago this House passed a measure whereby it was made obligatory upon those exporting goods from Britain to make a declaration, if they wished to obtain the benefit of the generous preferential treatment accorded to British manufactures, that the goods contained a minimum of 75 per cent, of British labour and/or material. Unfortunately, the British iron and steel industry has lately gone from bad to worse, and to-day, out of a total home consumption and export of 6,000,000 tons of iron and steel manufactures in the United Kingdom, nearly half is of foreign and continental origin. 1 freely admit that the iron and steel industry in England is in a very parlous condition, and manufacturers are advocating that the industry should come under the provisions of the “ Safeguarding of Industries Act.” That is, of course, a local British concern, and I express no opinion on it except as to the bearing these heavy importations of continental goods have upon British exports to Australia. There have been complaints for the last two years, ever since the act was put into operation, that some of the imports of iron and steel products from Britain were not entitled to British preference. I am the first tq admit that proper administration of the preference tariff under the circumstances that exist in . Britain is very difficult. However, as Minister responsible to this House for these matters, I have ‘not neglected my duties and we have conducted an interminable correspondence, and made numerous inquiries, regarding this matter. We have had black lists of linns. We have surcharged suspected firms with foreign duties. We have tried to make the declarations required as water tight as possible. I have received letters that certain things were being done in England, and I took the opportunity when I was there myself last June and July, to learn the real position. First of all I called on those people who made certain definite statements, and said to them, “ Where is your proof ; give it to me and I shall act at once.” They could give me no proof, only the airy nothings they had heard. I got to work with the officer of our department in London, interviewed the representatives of the pukka or bona fide British traders, and had proffered to me all the help possible. I sent round to the ‘ suspected firms, and ordered that every one of them who wished to trade with Australia, should keep a record of the continental iron and steel which they used so that none of it might be employed in manufactures sent to Australia.
– But suppose a firm used continental iron and steel in the manufacture of goods sold in England, but used English steel for the goods exported to Australia?
– The law is the- law, and as long as a firm conforms to it, what they do is no concern of ours. So much for the basis upon which we have dealt with these duties; so much for the almost prohibitive foreign duties in the schedule placed before the committee. We have omitted from the schedule pig iron, blooms, ingots, slabs and billets. The other day I told the House the position in regard to pig iron. In 1825-26 the total production in Australia was 450,000 tons, and the total imports were 11,752 tons. The local companies supplied over 90 per cent, of merchants’ requirements, in addition to supplying the whole of their own requirements. The selling prices after allowing for a very fair margin of profit, were appreciably below the selling prices of the imported pig iron. Some of the pig iron imported that year was im ported because it was not made in this country. The total production of ingots, including the quantities, used in the works amounted to 388,000 tons for the year 1925-26, and the total importations amounted to 2,413 tons. In 1926-27 the imports amounted to 2,809 tons. The local companies produced 99 per cent, of the ingots, blooms and billets consumed in Australia, so that no duty could enable them to reduce the cost of production. I can explain to the committee why some of the smaller items have been left as they were. There are bounty items in the schedule, such as fencing wire and wire netting. It is the policy of the Government to admit British fencing wire and netting free, and to adjust the position when it is necessary by a bounty in order to encourage local manufacture. That, I think, covers the position in regard to the iron and steel schedule of duties. I have endeavoured to explain the methods that have been used by the. Government in arriving at what it considered to be a fair proposal to place before the members of this committee. I repeat that the duties against foreign countries were imposed in August, 192C, to stop a very real and grave threat to the Australian industries by continental interests. At that time the flood of imports from abroad, had reached its maximum, but not many weeks after the duties were imposed the imports practically ceased, proving that the duties were having the effect for which they were designed. It is admitted that what the former schedule lacked was fair and adequate duties upon British bars, beams, girders, and heavy rails. The duty on bar iron has been increased from 44s. to 70s. per ton; on girders and beams, from 48s. to 70s., and on heavy rails by 15s. a ton. Not much more than half of the standardized sections of girders and beams used in Australia are yet made locally, and those that are imported to be used by local manufactures as the raw materials in their industry, are” admitted under special bylaw. The bounty items will receive the attention of the Government, but a good deal of further inquiry will be necessary before considered proposals can be submitted to Parliament. We pay a bounty of £2 12s. per ton upon fencing wire, and over £3 per ton on wire netting. The manufacturer who produces both fencing wire aud wire netting in the same factory is not entitled.to draw both bounties ; but if he sells the drawn wire to somebody else for manufacture into wire netting, the latter may get the bounty on wire netting while the drawer of the wire receives the other bounty. I think the Iron Bounty Act will require to be amended, so that this difficulty may be adjusted. The Government does not profess to have dealt finally in this schedule with fencing wire aud wire netting, but its policy is to keep those articles free on the British schedule and to make whatever further adjustment is required by way of a bounty.
– If those articles are to be free from Britain, why not withdraw them from the provisions of the antidumping law? The Minister knows how that operates.
– If it is clearly proved - and the anti-dumping law never operates in the absence of clear proof - that even British exporters are sell] ‘ig for the Australian market at prices lower than those at which they were selling for home consumption, if, in other words, they are dumping their goods in Australia to the detriment of the local industry, it is right and proper that the Industries Preservation Act should operate against them.
– We have heard that rubbish before.
– Unless I receive clear and irrefutable proof in regard to two or three firms in Great Britain who are making wire netting for export to Australia that they are not using German wire, they will have to pay the foreign duty. That practice is not very general now. During my visit to the Old Country, I endeavoured to reach a clear understanding with the exporters, and 1 know that wo have the sympathy of the whole of the British manufacturers who deal only in British iron and steel. I believe this problem will be solved, but not until some of the importers of. mongrel material - half foreign and half British - pay the foreign duty which will not be refunded. In dealing with this most difficult problem the Government has tried to give a fair deal. It has proposed what are practically prohibitive duties against the foreigner and generous duties on British materials. No attempt has been made to deal with fencing wire and wire netting iri the British schedule; but I can prove conclusively in some other items that what has not been done is not required.
.- Relating, as it does, to a basic industry, the item now before us is one of the most important in the schedule.’ The future of this country is largely dependent upon the successful development of its iron and steel industry.
– What is the price of coal?
– The local industry is being hampered not so much by the price of coal or labour as by the importation of cheap continental material that is arriving here from Great Britain. The duties at present in force are . 44s., 65s., and 80s. per ton. The local manufacturers asked for duties of 75s., 95s., and 110s.. The Tariff Board recommended duties of 75s., 95s., and 150s. This schedule provides for duties of 70s., 100s., and 120s. The Minister is proposing that the duty in the British schedule shall be 5s. per ton less than was recommended by the Tariff Board after a careful and exhaustive investigation of the industry. If the iron and steel industry is to be stabilized, we must look further afield than Australia, and its greatest danger to-day is the competition under the British preferential tariff. We all desire to assist Great Britain as far as possible, but selfpreservation is the first law of nature. Australian interests must be* protected first, and in respect of articles we cannot produce locally we should give the preference to the Mother Country. We know from many sources that the iron and steel industry in Great Britain is not prosperous. The Minister has related that, when he was in Great Britain, the industry was languishing, and in consequence the coal trade also was depressed. Yet more iron, and steel is being exported from Great Britain to Australia than in past years. In 1922, when I stated in this House that iron and steel were being purchased on the continent, taken to Great Britain and re-exported to Australia under the preferential tariff, I was told that I was stating a supposititious case; but, subsequently, the present Minister for Trade and Customs admitted that my information was correct, and I am able to quote, various authorities to show that the warning I then gave was well-founded. I shall first quote what the British Prime Minister (Mr. Baldwin) said of the steel industry as far back as December, 1925, and its condition is certainly worse to-day than it was then. In presenting the report of the Civil Research Committee in the House of Commons on the 21st December, 1925, Mr. Baldwin said, inter alia -
Tlie evidence revealed a serious situation. The pressure of foreign competition, aided by long hours, low -wages, and depreciated currencies, is being severely felt by our manufacturers, and had His Majesty’s Government been able to deal with the iron and steel industry in isolation, we might have regarded the case for inquiry as complete.
That is an ‘admission that the industry in the United Kingdom is in a parlous condition in consequence of the competition from abroad, yet we are asked to give preference to imports of iron and steel containing at least 75 per cent, of British labour and material. The Iron Age of New York, in the issue of 3rd February, published this statement -
British Firms Import Billets and Sheet * Bars
In Great Britain there are many rerolling plants, custom mills that do “ rolling for hire,” and also a great many steel works that buy cold pig-iron and scrap. Only a trifle over one-fourth of British pig-iron is used in the molten state, and over two-thirds of the output is made for sale. All these firms that do not own blast furnaces, and even some that do (especially those located near seaboard) have found it convenient from time to time to buy. foreign billets or sheet bars. Even American semi-finished steel has been imported for rolling in England.
While these practices are not in harmony with accepted ideas of economy, their advantages in the way of flexibility of operations were proved again during the recent strike, which, beginning ou lst May, dragged well into November before the miners began straggling back to work in large numbers. Despite the stoppage of all but five of the blast furnaces, and a slump in ingot production from 784,100 tons in March, to 32,100 tons in July, exports maintained the remark-
Able average of (May to October) 211,000 tons monthly, only 32 per cent, less than the average during 1925. In the case of sheets and pipe, the drop in exports was even less, and wire manufacturers actually showed an increase.
Britain was experiencing industrial trouble, its furnaces were cold, and it was unable to produce iron and. steel in great quantities; yet almost as much material was being exported to Australia as in normal times. If the British mills were not producing iron and steel, whence did it come? It was bought cheaply on the continent, and the exporters passed it on to Australia, where it was represented as containing 75 per cent, of British labour and raw material. There must be a loophole somewhere in the tariff administration. The Minister and the department, no doubt, have done everything possible to safeguard Australian industries, but notwithstanding their vigilance it is evident that foreign steel is reaching us through Great Britain. We never intended that the preferential treatment we grant to our kinsmen in the Old Land should be abused to enable continental firms, whose people work long hours for low wages, to send their products here to the detriment of our own mills. Yet that is the position into which we have drifted. These are startling facts which we cannot overlook. Britain cannot expect us to continue granting her preferential treatment in respect of iron and steel if she permits speculators to buy cheap material on the continent, take it to England and roll it, and then ship it here as her own product. We should make sure by some means that all the iron and steel that enters Australia under the British preferential duty is actually British. In The Iron and Goal Trade Review of the 29th April, 1927, the following paragraph appeared -
The only marking that should be done was to mark British iron and steel goods as “ British “ or “ British made,” and that could be done as blatantly as one liked. If there were any passing off of foreign goods as British, they were the semi-products which, after importation, were transformed into different shape here and exported as English steel.
That is a strong statement, which shows that while our duty is designed to assist the British industry and the British workmen, it is really assisting foreigners. In the same journal there appears on the 6th May, 1927, a report of evidence which Mr. John Hodge, who was the Minister for Labour in the MacDonald Labour Government of Great Britain, gave in respect to the marking of steel. I abstract from it the following paragraph
Under cross-examination, Mr. Hodge said he wanted to protect the community as a whole and to let it be able to see whether the material was British or foreign, because he knew personally of cases iu which foreign material rolled in this country had been palmed off as British. Whilst he did not think a marking order would restrict the importation, he hoped it would
The following paragraph is taken from a report which appeared in the same publication on the 13th May last -
As regards the claim No. 1, the employers felt that in the present conditions this claim could not bc increased, but they safeguarded the position of the lower-paid men by increasing their present ex gratia bonuses of 35 per cent, to 37i per cent.
That deals with the wages aspect to which the Minister for Trade and Customs referred. Iron and steel is the base of many industries, and we should do our utmost to encourage its production here. The Government is not justified .in allowing the British preferential duty to be applied to iron and steel which, in the face of the facts that I have placed before the committee, cannot be considered as anything like 75 per cent. British. This is not a party matter. I am prepared to assist the Mother Country to provide us with necessaries which we cannot produce for ourselves; but I am not willing to grant her a preference to enable her to send foreign manufactures here as her own products. Although the iron and steel industry of Great Britain is in a parlous position, more allegedly British iron and steel is being imported into Australia than for years past - so something is wrong somewhere. . The Newcastle Steel Works had to close down in 1922-23 because of importations from abroad. I made a speech in this House at that time on similar lines to that which I am making to-night, and I was told that the position was not as I declared it to be; but within two years the Minister for Trade and Customs confessed that I was right. All that I said on that occasion may be applied with equal, if not with greater, force to the existing situation. The iron and steel magnates of Germany, Luxemburg, France and Belgium have formed themselves into a combine and have been in- strumental not only in temporarily destroying the British iron and steel industry, but in sending their products to England for export to Australia as British goods. We have evidence to that effect from the Prime Minister (Mr. Baldwin) and many reputable citizens of Great Britain. In the circumstances, we are entitled to take every means in our power to prevent the importation of these goods. Within the last two or three weeks 2,000 men have been put out of employment by the management of the Newcastle Steel Works, and this has had a serious effect upon other industries. The coal mine at Wallsend, which has been working for seven or eight days a fortnight supplying the steel works with coal, has lost its market, and several other coal mines have been adversely affected. When the steel works are in full operation they consume at least 20,000 tons of coal per week. It will thus be an extremely serious thing for the coal miners if the works have to close down altogether. Many of them, as a matter of fact, will receive no Christmas pay this year. The Wallsend miners, for instance, had no pay last week, and they have done no work this week so far as I know. The closing down of the steel works will also affect the employment of men in every city in the Commonwealth. It was demonstrated during the war that this industry was of immense value to the nation. The proprietors of it had the opportunity at that time to. increase the price of the commodities they were supplying, but to their credit they refused to do so. As they are having great difficulty at present to maintain their industry, I submit that we should come to their assistance. Our market should not be given over to the manipulators of the industry in Great Britain and on the continent who are concerned only with the making of profits for themselves. They care nothing for Great Britain or Australia; they only want to increase their wealth. I am disappointed that the Government has not proposed a larger increase in these duties. Had I the power to do so, I should move for a considerable increase in them. I am strongly of the opinion that the Government should appoint a committee of honorable members, or take some other effective step, to review our tariff position. If the preference we are granting to Great Britain is not having ‘the effect that we intended, we should amend it. I favour granting a preference to the Mother Country on all products which we are not able to supply for ourselves, although I am strongly of the opinion that we ought to consider our own industries before even those of Britain. We should give work to our own people first of all. If after having done that we are able to provide employment for some of the millions of workless persons in Great Britain, I shall be very glad for us to dp it. But we cannot allow commercial speculators in Britain by a subterfuge to send continental products to Australia as British goods. I am informed that the iron and steel industry of Australia has dependent upon it no fewer than 100,000 people. It is, therefore, worthy of protection. I believe that the Minister for Trade and Customs is alive to the importance of .the industry, but I am distressed that he has not been able to give it more adequate assistance than that provided in the schedule. Unless something more is done for it it may disappear within the next six or twelve months. I should be prepared. to go to the extent of prohibiting the entry into Australia of iron and steel in order to stabilize our industry. It has been said . that wages in Australia in this industry are 100 per cent, higher than those which prevail in Great Britain. I am glad that Australia has been able to increase the standard of living of these people. We should do our utmost to maintain and, if possible, improve their standards. I urge the Government to increase the duty to ensure the future prosperity of this great industry.
– As the Minister for Trade and Customs has stated, iron and steel is the basis of practically all industries. It typifies the machine age in which we live. After many years of effort the industry has been established in Australia upon sound lines. The great firms which are conducting it have spurned to adopt any but the best methods of production. As the Tariff Board has pointed out, our works will bear comparison with the greatest iron and steel works in the world. Millions of money have been invested in the industry here; 12,000 men are directly engaged in it, and many thousands more find employment in the subsidiary industries for the establishment -Ot which it has been responsible. Unless it is further protected, it cannot hope to hold its own. It is exposed to the full blast of the most intense and relentless competition in the civilized world. There has recently been formed in Europe, as the Minister pointed out, a combine or cartel which now includes many of the great continental firms, in which it is probable that France and Belgium will shortly be included, and which is reaching out its tentacle to envelope Britain herself. The German competition is, as might be expected, most serious because it is most efficient. That country pulls a very poor mouth when it is asked to do anything to make good the losses of the Allies ; but it is, perhaps, in many ways more efficiently organized industrially than it was before the war. British manufacturers have’ been feeling this competition seriously. British traders, on the other hand, whose object is merely to make money, have welcomed this combination with open arms, and have placed their orders with the very firms whose avowed purpose is to crush British and all other competition, or else compel Great Britain to enter into this trading alliance. To what extent it has gone may be gathered from the fact that British imports last year from the continent of Europe exceeded 4,000,000 tons. How much of this found its way out here, or, which is the same thing, what equivalent quantity of British iron averaged with this Continental iron found its way to Australia I cannot say; but I agree with those who hold that there is grave reason for believing that some British manufacturers ure evading the spirit of the law, and, under cover of compliance with the regulations under which they enjoy preference, are using cheap foreign material, or, alternatively, British material for export to Australia, covering themselves with purchases of cheap Continental material for their own purposes in the home market. The Leader of the Opposition pointed to, and so did the Minister, the many difficulties upon which we labour in Australia, and once more emphasize, as previous speakers have done, the fact that it will make little difference to us who crushes us, if we are to be crushed; whether it be competition from foreign nations or competition from Great Britain that destroys us. If this great industry, which has been reared with such infinite labours during a period of trial and tribulation extending over so many years, totters and falls, with the far-reaching depression that will inevitably result, its collapse will be due to the importation of British goods. The Minister has reminded us that we have extended to Great Britain real and valuable preference, which amounts over the whole range of the articles covered by our customs tariff to £8,000,000. This is no light thing, and the whole history of the world can be ransacked in vain for a parallel to it. We show Great Britain that «we regard her as a friend, and a very dear friend; but, after all, our first and obvious duty is to Australia. It is not denied by the British that their first duty is to Great Britain. The British Government has _ recognized the serious position in which the British manufacturer finds himself, and has sought by two methods for his relief. The manufacturer himself has granted rebates to those consumers who undertake to place the whole of their orders forheavy steel in Britain, and the Government there has established a system of preference for ‘foreign orders, for which the British manufacturer is guaranteed payment. If the foreign buyer fails to meet his obligations, the British Government foots the bill. By these methods the British manufacturer is placed in an exceedingly strong position. If by a system of rebates he is able to draw to himself many of the orders that would otherwise find their way elsewhere, he is, of course, much better able to dispose of his surplus in this or any other country. The secret of cheap production is mass production, and, once the home market is secured to the British manufacturer, whether in iron,, structural steel, pails, or whatever it may be, he will be in a fortunate position. British people have a genius for manufacture, and they will soon be able to equal any nation in the world in that respect, even Germany and America. But their prosperity, at which we should rejoice, ought not to bo secured by the destruction of our own industry. While we shall infinitely rejoice to see the wave of depression that has recently affected Great Britain spend itself, our duty is to ourselves, and we should see to it that we extend to our own manufacturers at least the same protection that Great Britain is granting to hers. Let us consider the actual position. I shall . take three items that will serve well enough - pig iron, rails and fishplates, and corrugated iron. I am afraid that the Minister is not seised of all the facts with regard to pig iron, as they were given to the Tariff Board, or, at any rate, as they are. The Minister says that the proposed increase in duty in respect to pig iron is sufficient, and he states that only 2.7 per cent, of the pig iron consumed in this country is imported. The facts are otherwise. It is perfectly true that 462,721 tons is the total production for 1926-27, and that the imports, about which I shall say something shortly, are a very small proportion of that quantity; but that is not a fair way of putting the case, because, of the 462,721 tons of pig iron, 370,385 tons did not appear on the market as pig iron, but passed directly and immediately into finished steel. Therefore, we must not compare the pig iron proportion of the imports with the total production of pig iron, but only that proportion that was placed on the market as pig iron, roughly about 92,000 tons. The true ‘comparison to beinstituted is between 92,000 tons of foundry iron, and 6,686 tons of similar iron imported into Australia. That is a much more formidable proportion. Take the years 1925, 1926, and 1927. The Minister will forgive me if he has already quoted the figures that I am about to give; but, at any rate, they will bear re-statement. The annual average importation of foundry iron amounts io 10,’357 tons. This tonnage, compared with the total production of foundry iron in Australia, represents an average of 10.7 per cent., not 2.7 per cent., so that the importation is a very serious item. There is another point, too, that needs stressing. We are led to infer that the quantity of pig iron that is placed on the market as foundry iron is ever increasing - that the industry is holding its own, and that the imports are gradually decreasing. But the converse is the case. It is true that in the early part of this year, particularly owing to the British coal strike, the importations fell off; but, for the first three months of 1927-28, they amounted to 613 tons in July, 643 in August, and 1,293 in September. These figures disclose that the importations for those three months show the same annual average as that for 1925, 1926, and 1927; that is to say, 10,357 tons. It is worth noting, too, that these monthly returns show a progressive increase. Taking the local production of pig iron for foundry purposes, in 1925 we produced 101,266 tons ; in 1926, 96,799 tons, and in 1927, 92,336 tons. While the importations of pig iron have increased, the local production of pig iron for foundry purposes is decreasing. As our population is increasing, we should be holding more than our own in this industry, but it appears from these figures that there has been a retrogression. I turn from pig iron to steel rails.- The following telegram, dated 29th November, 1927, was received .by the Broken Hill Proprietary Company Limited from the Commissioner of Railways, Tasmania: -
After allowing for duty at increased rate the British tender is lower than yours. Am willing place order with you for Hobart portion of our inquiry at £11 15s. per ton for rails and £15 13s. per ton for fish plates. These terms are equivalent to English prices. Advise now whether you agree to supply on these amended terms.
That is proof positive that despite this increased duty, Great Britain can still undersell the locally made steel rail.
– According to the Tariff Board’s report the Broken Hill Proprietary Company Limited is making little or no profit on the manufacture of steel rails.
– That is so. Had the duty that was asked for and that was recommended by the Tariff Board been granted the company would have been able to secure this business without the aid of State preference. This instance speaks for itself, and can be multiplied. Turning now to galvanized iron, the following quotation is illuminating : -
English corrugated iron “ orb “ brand, 26 gauge, 10 case lots, price £25 5s. for cash, forward prices’ £24 5s.
That is the wholesale price, and it is extremely significant that the forward price is £1 less than the spot price, because it indicates that the market is falling. Even if the duty proposed by the Minister is sufficient to-day it will be inadequate in three months’ time. There i3 no escape from that conclusion. The iron and steel industry is a base industry. It is the foundation of the pyramid, and if it is undermined the whole pyramid falls. I am not blind to the faults of protection, and it certainly has defects, but we have to face the world as it is to-day. It is of no use babbling about peace to a world in arms, and it is of no use talking freetrade to countries that bar their gates against our goods. Vast combinations of capitalists are deliberately setting themselves out to capture the world’s markets, and if they are able to batter their way into Australia’s market they will destroy our standard of living, and incidentally all that is worth having in this country. While I must be classed as a whole-hearted supporter of the Minister in his efforts to improve the position of the ‘ iron and steel industry, I cannot but regret that he has not followed the recommendations of the Tariff Board. That board was appointed by Parliament as an impartial body so that it might make careful and unbiased inquiry before submitting its recommendations to Parliament. We must as sume that all the facts before the Minister were also before the board when it made its recommendation, and if the board has omitted certain vital facts from its report, it should be dismissed and sent about its business. “ The recommendations of the board as they are made should be placed before this Parliament, and if the Minister disagrees with them he should state his reasons to honorable members, and this Parliament should be the final, arbiter. The board is our agent. We are unfit to make inquiries into the circumstances of industry, be cause of our partisanship, and because we have not the time nor the means for doing that. Therefore, we have appointed the board to carry out essential inquiries. No one has pointed a finger at the board or has suggested incompetence or corruption on its part. The board lias gone about its business and made its recommendations. The iron and steel industry is vital to the welfare of Australia. If every other industry failed and this stood fast we should still be worth calling a nation, but without that industry, Australia could not maintain its position among the nations of the world. In peace and in war a flourishing iron and steel industry is essential to the welfare of a country. I hope that the Minister will even now reconsider. his decision and give the committee an opportunity of expressing its opinion on the Tariff Board’s recommendations.
– I do not wish .to delay the committee unduly, because there are a number of items in the schedule still to be considered. The iron and steel industry is perhaps the most important of the secondary industries of Australia. The right honorable member for North Sydney (Mr. Hughes) and also the Leader of the Opposition touched upon the application and trend of preference, and this is a very vital point. “We have to ask ourselves what is involved in this preference which the Minister has stressed so much in the tariff schedule. Is it a preference to Britain over foreign competitors or is it preference over Australian producers? That question has to be answered by this committee. There is of course a virtue in preference in the way it is usually understood to apply in Australian fiscal policy, but if it is to favour Great Britain against Australia, then of course we should take serious objection to it. I am afraid that in connexion with this item the Minister has been more concerned with strengthening the policy of preference to the United Kingdom than with preserving and strengthening Australian industries. This item constitutes a radical departure from the recommendations of the Tariff Board. I do not go so far as the right honorable member for North Sydney, who has said thai the Tariff Board’s recommendation should come before the committee, and that the board is answerable to Parliament and not to the Government. That would be a dangerous precedent. I think that the Tariff Board should make its recommendations to the Minister, and he in turn should make his recommendations to
Parliament in the form of a tariff schedule expressing for the time being the policy of the Government. But it seems to me that as there has been a thorough inquiry by the Tariff Board into the conditions of the iron and steel industry, which is of so much importance to Australia, its recommendation should not be lightly brushed aside, and that the Minister should be able to produce the most convincing reasons for any departure from them. I cannot feel that he has so far justified his action in departing from the Tariff Board’s recommendation. The Minister has alluded to his personal examination of the Tariff Board’s recommendations, and the dissection of its findings and data by expert departmental accountants. He has given the committee meagre reasons for his disregard of the Tariff Board’s recommendations. I think it a great pity that in so vital a matter they were disregarded. It is far better for the Minister to err on the side of over-protection than on the side of under-protection. He holds up a sheaf of documents which he may consider sufficient justification for his action- possibly they arp. confidential documents which cannot be disclosed publicly t»> this committee or even privately to honorable members - but to me there seems to be no justification for what he has done. The Tariff Board has made an exhaustive inquiry into this mattei in a public way, and its findings have been set forth in a perfectly clear way, aud should not be set aside even though the Minister feels that it is erring on the side of generosity to this particular industry. The Deputy Leader of the Opposition (Mr. Scullin), on the general discussion on the first item, traversed very effectively the position arising from a departure from the Tariff Board’s recommendations, and I do not want to go over that ground again; but there are two or three items on which the Tariff Board made definite recommendations which the Minister has seen fit to ignore either by bringing in no item for an increased rate or by bringing down a proposal for a lower rate than was recommended by the board. In the case of pig iron the Tariff Board recommended an increase of the existing rates by 10s. British, 10s. intermediate, and 25s. general; but the Minister has seen fit to submit no item at all. In introducing the duties this afternoon he told us that because the quantity of pig iron that is coming into Australia is negligible compared with the quantity used in Australia, no further protection was required on this item. The right honorable member for North Sydney (Mr. Hughes) has dealt effectively with that statement of the Minister by pointing out that the amount of pig iron made available for foundry purposes by the Australian manufacturers, and against which the imported article comes into competition, is not nearly the quantity the Minister indicated. The quantity made available is only 90,000 tons, while importations have been as high as 13,000 tons in one year. There is one significant feature about the importations of pig iron not touched by the right honorable member for North Sydney. He did not indicate that for the last seven or eight years there has been a progressive increase in importations. The figures for the various years are as follows : -
– The Minister quoted the lowest year for many years. .
– Yes ; the Minister quoted 1926-27. when only 6,686 tons were imported, but it is understood that that diminished importation was the direct result of the coal strike in Great Britain, and does not represent a real diminution in importations. There would be no great significance in these figures, even though they do amount to 10 per cent, of the total consumption of pig iron for foundry purposes in Australia, if the industry under the present tariff could successfully compete on a remunerative basis with overseas competitors; but the recent experience of the principal producer of pig iron in Australia, the Broken Hill Proprietary Company, is that it cannot now successfully compete, and that it is running the risk of losing a great, deal of its existing trade. I have been supplied with particulars of a quote made to one of the largest users of pig-iron in Australia - his name can be given if there is any question about the authenticity of my statement; - for 1,000 tons of Middleborough No. 3 pig- iron at £4 19s., c.i.f. and e. Adding £1 a ton for the existing duty, and 2s. 6d. a ton for wharfage, the price of this pig-iron at an Australian port is £6 ls. 6d. a ton. The lowest price the Broken Hill Proprietary Company can quote for a similar product is £6 14s. 6d. a ton. The position in this respect is serious, and if it can also be shown in regard to some of the other products of the Australian manufacturers, that they do not get adequate protection, it is a serious menace to their industry, unless, of course, we are to assume that they are making large profits, that they are inefficient, that they are paying wages which are too high or are unreasonable, or that they are involving themselves, in costs and expenses which are not warranted. When the case is fully stated, I am sure that it will show that none of these assumptions are correct. I find that the total importations of steel products for which the Broken Hill Proprietary Company made application to the Tariff Board for increased protection amounted in 1925-26 to £1,481,865 ; and in the following year to £1,683,543. These figures show that there have been very large importations of products which could be manufactured by the Broken Hill Proprietary Company or Hoskins Limited, affording employment to a large number of men and placing the manufacturers in a position to reduce still further the prices of their products to Australian users. It is a. very important fact to bear in mind that, since 1921 the prices of the principal products of the Australian companies, instead of steadily increasing as the result of increased protective duties, have been steadily reduced. It is possible that the competition the companies have had to meet from overseas suppliers has been one of the biggest factors in bringing down the price of the Australian products, but the fact remains that prices have come down, as is indicated in the following table: -
A letter forwarded by Briscoe and Company, wholesale hardware and iron merchants, of Melbourne, to the Broken Hill Proprietary Company, indicates clearly, andinamanner that cannot be ignored, the critical position facing the Australian manufacturers of iron and steel as a consequence of unfair overseas competition. The letter is as follows: - 7th October, 1927.
We regret to say that there is at present a good deal of dissatisfaction existing in the trade in connexion with the prices you are quoting for mild steel, wire netting, and galvanized wire.
When you undertook to manufacture the above articles in Australia, the wholesale distributing trade, right throughout Australia, allied itself with you, and undertook to distribute your products. You on your part undertook that the prices you would charge would be fairly competitive.
Both sides of this arrangement have been loyally carried out. The distributors have been loyal to the manufacturers, and confined their trade to the local article, and have been particularly well served regarding both quality and price.
The Australian product is now recognized on this market as being equal to anything that can be imported overseas. In the matter of steel, it is recognized that the Australian product is superior to the English.
Unfortunately, however, owing to the continual dropping of prices overseas, your prices are no longer competitive, and the trade have to seriously consider the position.
You will understand that we cannot continue to buy your products when they can be bought cheaper from overseas, and while the recognized distributing houses of Australia wish to continue distributing Australian products, the same cannot be said of people outside our ranks, who are only too anxious to take advantage of cheap oversea prices to fill this market with both British and foreign products.
Not only do we take the risk of losing our position in the distributing trade, but products that you manufacture will accumulate in your works, and will not be able to find a market.
You will appreciate the fact that we cannot stand aside and let outsiders usurp our position in the distributing trade.
We have, therefore, arrived at the position when we must ask you to drop your prices to meet the overseas competition.
Failing this, we fear that there is nothing left but for the distributing trade to go overseas for their supplies, and break up the connexion with you which has been very satisfactory from, we believe, your side, and certainly ithas been from ours.
It is only after very long and serious consideration that we have arrived at this position, and it would be with extreme regret if wefind that the severing of our long association has to be accomplished.
On to-day’s prices we cannot see that there is any chance of you selling your products. We must compete with overseas importation, and unless youcan see your way to help us by reducing your prices, you will naturally see that we are compelled to go overseas.
We recognize that this would be disastrous for the manufacturers of steel, netting, and wire, but us conditions are at present we see no way out of the difficulty except to import.
As chairman of the Victorian Hardware Association, it is my duty to the members to release them from the obligation in which they have voluntarily placed themselves to buy Australian products, and allow them to go overseas for their supplies.
I sincerely hope that some other way will be found out of the difficulty, but I see no way of altering this decision unless you can reduce your prices to meet this competition.
I need not tell you that action of this kind is forced upon us to the extreme regret of the whole of the members throughout Australia, and I personally view with alarm the breaking up of the association with the local manufacturers that has been eminently satisfactory to them, to the distributors and to the users.
I enclose a few comparisons between your prices and the overseas goods of the same kind.
I think you will admit that we have no choice in the matter but to go further afield for our supplies. - Yours faithfully,
The comparison of prices is as follows : -
In each ofthose items the advantage is with the imported article in the matter of price, where the two are put on a fair competitive basis, with duty paid and other conditions allowed for. It would be quite unreasonable for the Australian producers of those articles to expect the distributers to continue to confine themselves to the Australian product, and to allow others to import the cheaper goods from overseas, and thus capture the trade. They are unable to continue to handle the Australiangoods, and that creates a serious position. Many of these items are covered in this schedule. but inadequately. The Tariff Board recommended that the duty on pig iron should be increased to 30s. per ton, but no such increase is provided for in the schedule. It recommends an increase of from 44s. to 75s. on bar, rod, angle, tee, and bars of fancy pattern in the state in which they leave the roller, while the Minister brings down a proposal for 70s. It recommends an increase from 32s. to 52s. on ingots, blooms, slabs, billets, puddle bars and loops, or like crude manufactures of the steel furnaces, but the Minister saw fit to ignore that recommendation, and nothing is provided in the schedule. Two other very important recommendations were made, one in connexion with rails, and the other on beams, channels, joists and so on. The board recommended that there should be an increase from 35s. to 60s. on rails weighing 50 lbs. per yard and over, while the Minister brings in a proposal for 50s., or 10s. less than the recommendation. For rails weighing less than 50 lbs. per yard the board recommended an increase from 45s. to 70s., but the Minister ignored the recommendation altogether. The board recommended an increase from 48s. to88s. per ton on rolled iron or steel beams, channels, joists, girders, &c, but the Minister saw fit to bring in a rate of only 70s., or 18s. less than the recommendation of the board. These departures from the recommendations of the Tariff Board may have serious consequences upon the industry. In his explanation this afternoon, the Minister did not justify his departure from the recommendations of the board. The honorable gentleman cannot justify it on the grounds that the industry is not efficiently carried on.
– The honorable gentleman gave us the new arrangement, but no information as to what that was based upon. This committee is entitled to that information.
– It is entitled to have absolutely and completely the information upon which that recommendation has been set aside. It would be a dangerous departure from the practice adopted in the past if the Minister continued to resort to the procedure followed by him in this matter. Having obtained the recommendations of the Tariff Board, arrived at after a protracted and comprehensive inquiry, in which a great many people participated, the honorable member disregarding them and acted upon something which is less authoritative - to use a euphemistic term. One could quite understand the honorable gentleman not being satisfied in his own mind and, as a result, either having further inquiries made, or resubmitting some aspects of the matter to the Tariff Board. The Minister would be entitled to go into consultation with the board, and traverse the whole subject, its it is an important one. The honorable gentleman has not done that; he has chosen to ignore the Tariff Board. The facts disclose that a wide divergence of opinion exists between the Minister and the Tariff Board, as to what should be done to assist the iron and steel industry. One cannot question the efficiency of this industry in regard to its management, supervision, the com- pleteness of its plant, or to the practice it adopts. According to all investigations the efficiency of the industry is on a. high plane. Even the Minister must acknowledge that the iron and steel industry, as carried on in Australia, is as efficient as similar industries in the United Kingdom. The Tariff Board regards it as being unexcelled, even in Great Britain. There has been a great deal of misunderstanding as to the efficiency of our labour. It has been frequently reiterated in this chamber that increases in duty are rendered necessary either because of the exorbitant demands of the workers, or because of their lack of efficiency. The Tariff Board investigated the circumstances very carefully, and I shall quote from the paragraph from their report, which deals with efficiency. It reads -
In this opinion the board considers that the method adopted by it finds support in the fact that all the principal factors entering into cost of production are: -
The efficiency of the plant.
The efficiency of the management.
The efficiency of the labour engaged in production.
Having regard to all these factors, in the board’s opinion, the industry in Australia as presented by the Broken Hill Proprietary Limited is equal if not the superior to the industry in the United Kingdom. The board has specially selected the Broken Hill Proprietary Limited as a standard of comparison because it has concentrated its investigation chiefly on that company, and because the company’s standard of efficiency is second to no other industry of any kind in Australia. So that any recommendation the Board may make will have been based upon the most and not the least efficient representative of the industry in Australia.
Respecting the efficiency of labour in Australia the Tariff Board has from time to time consulted general mangers of big overseas undertakings who have been for a term or permanently engaged in local industries and have had previous experience of labour in the United States of America and other countries. Without exception their firm opinion was and is that Australian labour, given encouragement, is up to the standard of the best in any other part of the world. .
That is a very generous and very comprehensive statement. There is no doubt - although I realize that there is no necessity for me to go into it more fully - that a comparison of wages in Australia and other countries discloses the fact that the wages paid in Australia are a great deal higher than those paid in competing countries. As a consequence of the higher wage scale and the higher standard of living prevailing in Australia, it is impossible for our iron and steel industry to produce at as low a cost as is done elsewhere. That cannot he urged as an argument that the industry should not secure adequate protection. On the contrary it is an argument why protection should be extended in Australia. The industry is not responsible for the wages paid. It is governed by the award of the Arbitration Count, which lays down standards of wages and ‘determines the cost of living. This Parliament is responsible for the system of arbitration, and it insists on the standards of wages and conditions Of living being adhered to. Therefore, Parliament must grant our industries adequate protection to enable them to observe those standards and to carry on in competition with the low-wage countries of the world. A comparison of wages paid in Australia with those obtaining in other parts of the world reveals a startling result. The report of the Tariff Board gives a comparison of groups of wage-earners, and, taking the mean of the rates specified for skilled fitters and unskilled labourers representing the average weekly wage, the following position is given : -
It is necessary to have a tariff that will protect Australian industry, recognizing the disparity in the wages paid in competing countries. It cannot be alleged that the duty asked for and recommended by the Tariff Board is too high on the grounds that these companies are making large profits.
– This is the first we have heard about the financial side of th.e matter.
– The Tariff Board investigated that phase very carefully, and there are paragraphs in its report detailing the results of its investigation. I have extracted only one paragraph, but it is a very apposite one. It is taken from page 40 of the report, and reads : -
Financial Position of Applicants.
As a result of the examination of the financial statements, books, and cost sheets of the two large producers of iron and steel in the Commonwealth, e.g., Hoskins Iron and Steel Company, Lithgow, and the Broken Hill Proprietary Company Limited, Newcastle, the Tariff Board can affirm with confidence that in neither case do any profits they may now be making come from the manufacture of iron and steel in Australia.
I understand that a couple of qualified accountants were seconded from the Customs Department to the Tariff Board to make an exhaustive investigation of this matter. The Tariff Board made a very comprehensive inquiry, and acted in a conscientious and thorough manner. On its investigations, which covered practically every phase of the industry, it made its recommendations. It is unfornate that the Government has seen fit to disregard those recommendations, and to bring in more meagre proposals for the protection of this great industry. I fear that, as a result, the industry may suffer a set-back. It is possible that Parliament may move rapidly if the industry does suffer a serious set-back, but it is far preferable to have an adequate provision than to regret later the injury done to the iron and steel industry. It is not merely a key industry ; it is a base industry. It supplies the essential raw material of a great many other industries, and it is only in its infancy in Australia - or, at least, that is the hope of a great many members of this committee. They hope that the iron and steel industry of Australia will continue to extend, and use the latent resources’ of this country for the purposes of manufacture, so enabling subsidiary industries to be built up. That will assist Australia to become more self-reliant than it has been heretofore, or is at present. The industry is capable of a great deal of expansion. It is neither an artificial nor a spoon-fed industry, but one that can be as stable and as necessary to the nation’s welfare as any other. Recognizing the vital character of the industry, I hope that even now the Minister will make adequate provision for its protection.
.- During this debate some startling statements have been made. Among them was one by the right honorable member for North Sydney (Mr. Hughes) who expressed the view that the tariff schedule should have been introduced on the basis of the Tariff Board’s recommendation. The right honorable gentleman has been described as an autocrat. That may or may not be a correct description of him, but I can imagine his indignation if, when he was Prime Minister, any honorable member had dared to suggest that an outside body such as the Tariff Board should have greater power than that possessed by the Minister. Referring to galvanized iron he said that the tariff should be so arranged as regarding rise and fall of prices that any company carrying on operations here would be able to survive against competition from other countries. Surely no more extraordinary contention was ever put forward ! Next we shall have an honorable member suggesting that the tariff should be raised or lowered to meet the requirements of certain industries.
– There should be a tariff sub-committee to deal with tariff matters.
– I thank the Leader of the Opposition (Mr. Charlton) for drawing attention to the closing down of the Broken Hill Proprietary Company’s works in 1923. In consequence of his remarks I made some inquiries and found that that year the company made a loss of over £100,000 due to the great coal strike. That loss is explained in the Commonwealth T ear-Book in the following terms : -
The most extensive dispute in 1923 was that which affected fifteen coal mines in the northern coal-fields of New South Wales.
The trouble arose from an objection by the miners to a further sitting in the district of a police magistrate who had judicially dealt with several miners in what was considered an unduly harsh manner. The stoppage lasted 88 days, and the men ultimately resumed work on antecedent conditions.
Nearly £1,000,000 was lost in wages because those works closed down. The honorable member used that as an argument in. support of increased duties.
– The works were closed down for fourteen months.
– It necessarily took the company some time to re-start operations. Evidently the honorable member for Newcastle (Mr. Watkins) believes that men should be at liberty to strike whenever they choose, and that any loss occasioned thereby should be made good by imposing additional duties.
– Is not the honorable member making a mistake in assuming that the company is now asking for increased duties because its works were closed down in 1923? The company is not now concerned with what took place four years ago, but with the situation confronting it to-day.
– During this debate it has been contended that the losses incurred by the company were due to shortage of orders. I shall explain later why there was a shortage of orders. Mention has also been made of the low profits made by the company, but I shall show that its profits have not been low.
– The company did not make its profits out of iron and steel.
– If its profits were made out of sulphate of ammonia, then I say that it has robbed other Australian industries, and that the sooner sulphate of ammonia is allowed to enter this country free of duty the better.
– The company’s profits are derived from silver and lead.
– The company should be called upon to show how its profits are made. So far as I am aware no evidence, other than that it is asking higher prices for its products than are being asked by others, has been brought forward to show that the company cannot compete with imported iron and steel. The trouble is that it is asking for higher duties all the time. Had the Tariff Board made its inquiry three nr four months ago, before the Lang Government in New South Wales was dismissed from office, I wonder what, recommendation it would have made. Since its report was made the 44-hour week has been introduced into the iron and steel industry; the Workers Compensation Act, which imposed heavy obligations on the company, has been passed; legislation providing for child endowment has been enacted; in addition, the Piddington award providing that only unionists are to be employed in the mines has been made If the Tariff Board had made its report with those conditions operating in the industry it would be interesting to know “ what its recommendations would have been. I believe that the works of the Broken Hill Proprietary Company are up-to-date, and that its employees are efficient; but that is no reason why the rest of Australia should have to pay a heavy penalty to enable the industry to be carried on when such conditions are imposed. We have heard many ta r.radiddles about increased duties, and the cry “ f freetrade “ when objection has been raised against them. From a study of the balance-sheets of the Broken Hill Proprietary Company I find that in 1920 it made a. profit of £850,599. After making deductions for depreciation and interest on borrowed money its net profit for that year amounted to £517.663.
– Those profits were not derived from iron and steel.
– I should like to know how they were made. In 1920 ingots, blooms, cheeses and blanks were free, British, and 5 per cent, foreign, while bar, rod, Jingle and tee-bars of fancy pattern were respectively free and 5 pei- cent. Yet in that year the company made a net profit of £517,663.
– The company would not be asking for increased duties if it could compete with foreign iron and steel.
– Prior to March, 1920, the duty on pig iron was, British, free, and -foreign, 5 per cent. Under those conditions Hoskins built up a great industry in iron and steel, notwithstanding that his works were situated 70 miles from Sydney, necessitating heavy charges for transport.
– He received bounties.”
– The bounties were very small - only 12s. a ton, with a reduction to 8s. a ton in 1912-13. Hoskins needed no assistance when he commenced his business. When honorable members compare the conditions in Australia with those in other countries they should not lose sight of the fact that other countries do not obtain their ore in the comparatively pure state in which it is obtained by the Broken Hill Proprietary Company. Ore mined in Great Britain contains only about 32 or 33 per cent, of pure iron, as against from 66 to 6S per cent, in the case of the ore treated by the Broken Hill Proprietary Company Limited. It has been stated that it takes two tons of British ore to produce as much iron as one ton of Australian ore will produce. Moreover the ore supplies of the Broken Hill Proprietary Company Limited are situated not far from the coast, so that no heavy expenditure for railage is incurred. These increased duties will increase the cost of the implements required by orchardists and farmers to whom the honorable member for Reid (Mr. Coleman) referred last night. Among the witnesses who’ gave evidence in support of the request for increased duties was Mi-. George Russell, managing director of George Russell Proprietary Limited, and chairman of the Victorian Iron and Steel Merchants Association. The Tariff Board expressed surprise that no person seemed willing to give evidence against the request for increased duties. It felt that it might be necessary to compel the attendance of witnesses. What is the. matter with the people? I suppose, like honorable members here who want to keep the duties down to something like a reasonable level, they became disgusted and disheartened, realizing how useless it was to go before the Tariff Board to give evidence. Recently the board was almost insulting to a professor of economics who dared to give evidence against an increase of duty. If is no wonder one finds advocates of freetrade. Personally, I have never advocated freetrade in this House, and I do not believe the country as a whole objects to moderate protective duties being imposed. It is patent, however, that, no matter what duties the Minister asks for, there will come touts round the building who will try to influence honorable members, and honorable members will be only too pleased to do something that will help them in their constituencies, or that will give the impression that they are trying to be helpful. What will be the result of these duties? Will they not mean an increase in costs. The company has given to the Tariff Board an assurance that there will not be an increase in prices. Promises like that have been given before. It is true that a company will try to make a profit, and if you increase duties prices must increase. Let us examine the financial position of the Broken Hill Company, as revealed by its own balancesheet. As the result of a letter published in the Countryman by Mr. Hume Cook, I went very carefully into this question, and secured the figures relating to. the company’s operations up to 1919. I wrote a letter in reply to Mr. Hume Cook, and in the course of that letter I stated -
Mr. Hume Cook asks where I got my figures from when I stated that the steel works were started with a capita] of £380,000. He must know that the company published a mag nificent work, entitled “From Silver to Steel,” and therein is given the history of their establishment up to the close of 1919. The first share issue approved in 1912 was that of 240,000 shares of £2 each paid up to 8s., the sales realizing £384,000; increased in the following year to £472,000. Mr. Cook ridicules these figures by pointing out that in 1915 the works had cost £1,500,000, but he forgot to state that the company had raised a considerable sum by the issue of debentures. Up to 1918 the capital remained at £472,000, and if Mr. Cook will look up pages 278-9of”From Silver to Steel,” he will see how the company wasreconstructed by the further issue of 318,904 shares at 40s. paid up to 8s., which realized £637,988, and then reconstructing the company into 3,000,000 shares of £1 each, converting 1,500,000 shares of 8s. to £1 shares by transferring £900,000 from reserves to capital, and giving to shareholders one fully paid-up £1 share for every2½ shares held, this necessitating a further contribution of £600,000 from reserve to capital. The cash invested capital, therefore, consists of £472,000 plus £637,988, a total of £1,109,988 plus any shares sold since 1919. In May, 1919, £2,845,400 was expended, of which £472,000 was from capital, £901,700 from debentures and £1,463,700 modestly stated as from their own resources. To-day capital is given as £2,687,708, this including £1,500,000 taken from reserves, and the reserves now stand at £3,505,225.
That is the position of a company which is supposed to be unable to carry on.
Their net profits over a series of years have been as follows: -
Even allowing for the fact that the company’s stock was watered until the capital is shown as £2,687,708, the profit over the last three years has averaged over 12 per cent. That was before these duties had been imposed. Surely it cannot be contended that a company which, over three years, has shown a net profit of 12 per cent. is not in the position to compete with other countries. I dare say it is quite useless to worry about these things, or to try to impress the committee with the seriousness of the position. Let me now quote from the Tariff Board’s report as to the effect of increased duties on other industries. It states -
There can be only one result from this procedure, the ever-increasing tariff, with its recurring failure to afford the necessary protection accompanied by an ascending scale in the cost of living and an ever-swelling customs revenue. Ultimately the board can see nothing but a dead endto this procedure, which really amounts to a looping the loop preparatory to a nose-dive to disaster.
In this case we are dealing with a key industry. I admit that the country should be prepared to keep an industry such as this going. We must have an iron and steel industry here, and if moderate duties are not sufficient for the purpose, the Government should pay a subsidy. The things made in this industry enter into almost every manufacturing plant in Australia, and if the cost of iron and steel goods is increased, that increases the cost of other articles of manufacture throughout the country. The Minister may flatter himself with the idea that the company has given a promise that prices will not be increased, but he knows that conditions have altered even since the report was made. I have already pointed out how conditions have altered in New South Wales. Because some mad government gets into power which cares nothing about the conditions of industry, and lays increasing burdens upon the people, are we to have the duties on necessary commodities increased to a prohibitive level?
As the Minister took no notice when I was quoting the profits made by this industry, I propose to quote an extract from a speech made by Lord Rosebery on protection. He said -
The third point to which I would call your attention is this: - That under the baneful influence of protection there grows up every form of interest and almost every species of corruption. You may, after a trial of protection, wish to retrace your steps and go back on the path on which you have entered. You cannot! The moment you try it a hundred giants spring up to bar your path - giants, or trade interests which have become giants under protection, and which aic determined that by no means shall you ever be allowed to return to the free air of freetrade. Why? The reason is obvious. Under protection every protected trade becomes s vested interest and defends itself by the methods which are known to vested interests. If they are threatened they combine in trusts. They fight every election, political or municipal. They haunt the lobbies of your Parliament and corrupt your legislators.
– (Mr. Duncan Hughes). - Order! I think the honorable member is getting away from the item under discussion. I am sorry to interrupt his interesting quotation but I do not think it is pertinent to the matter with which we are now concerned.
– I am sorry, Mr. Chairman, because it is a very interesting quotation. We have been asking for reciprocal treatment. We have heard a great deal of cant and hypocrisy regarding our desire to help the Mother Country. In 1925-26 practically all our imports of iron and steel came from Great Britain . The foreign trade was almost negligible. Ingots were imported to the value of ?31,000, and practically oil of them came from the United Kingdom. Pig-iron importations were valued at ?55,600, plates and sheets at ?49,490, and galvanized iron at ?1,500,000, plain iron, at ?731,000^ wholly from the United Kingdom; turned iron at ?1,279,000, wholly from the United Kingdom, structural steel at ?269,000, almost wholly from the United Kingdom; channel steel at ?53,000, almost wholly from the United Kingdom; ste’el nail wire at ?56,000, almost wholly from the United Kingdom. These duties will seriously injure that trade. The general tariff on barbed wire is now ?9 a ton. Almost the whole of it comes from the United States of America.
I understand that four or five months ago barbed wire was selling in New York at ?12 a ton. If we allow ?3 a ton for natural protection in the form of freight, the landed cost is ?24 a ton. The local article is selling for ?23 10s.
– The Arbitration Court awards have whittled down the effective protection.
– Not on barbed wire I understand, but I should say that the provisions of the Navigation Act have affected the local industry.
– Is not the allowance of ?3 a ton for natural protection rather high.
– That is what it costs to bring it to Australia.
– If the industry were established in the honorable member’s own State, would he complain?
– I should not care if 50 factories were established in my State if the cost of the product were too high to the purchaser. Are the people who go out to develop this country to receive no consideration in the fixing of these duties. It is evident that the Minister has no thought for them. So far as the northern portion of Australia is concerned I should be in favour of absolute freetrade for the next 25 years, so that the people who settle there might have an opportunity to make good. Why not grant a subsidy on iron and steel products instead of imposing these heavy duties? Shortly after the duties were imposed in 1920, I received letters from manufacturers complaining that owing to the increased prices charged for the raw materials required by their industry, they would be unable to carry on unless they also were given additional protection. That is the inevitable result of the imposition of high duties in these key industries. Immediately we get an increased cost production and an increased cost of living, then come demands for more protection in other industries, and so the vicious circle is continued. I am quite sure that, if the Minister were absolutely frank he would admit that if the Tariff Board had to make its recommendations to-day it would suggest even higher ‘ duties than have been imposed.
– The conditions have altered somewhat since the Tariff Board made its recommendations.
– Notwithstanding all that has been said, the balance-sheets of the Broken Hill Proprietary Company disclose that for the last three or four years the company has paid 12 per cent, on its capital.
– In dividends?
– My informant has assured me that the figures have been taken from a true copy of the company’s balance-sheets, which show that for the last three or four years the company has made a profit of over £300,000 a year.
– On its output of iron and steel?
– That I cannot say. I understand, however, that the company has made large profits on its output of sulphate of ammonia.
– A considerable proportion of the profits is made out of the by-products.
– The by-products, I presume, include sulphate of ammonia, benzine, and tar. Are they not important sections of the industrial activities of the company? I know it is useless to oppose the item, but I cannot help thinking that it is a disgrace that Parliament should be called upon from time to time to grease the fatted pig by increasing the duties on these items.
.- In his opening remarks the honorable member for Swan (Mr. Gregory) was very unfair to the Leader of the Opposition (Mr. Charlton). He said that honorable members on this side took exception to the action of the Minister for Trade and Customs (Mr. Pratten) in over-riding the recommendation of the Tariff Board. He did not state that we objected .because the Minister had failed to give adequate reasons for his action. We realize, of course, that the Minister has to accept full responsibility on such issues as these; but honorable members also have a responsibility m this matter. Their duty is to obtain from the Minister a satisfactory explanation for any departure from the recommendations of the Tariff Board. The Minister would not have taken up a certain attitude this afternoon with regard to deferred duties, except under pressure from honorable members on this side, and he should now give his reason for departing from the recommendations of the board.
– What particular item has the honorable member in mind.
– The duties on iron and steel
– If the honorable member will name one I shall endeavour to give him my reasons for not accepting the recommendations of the board.
– The Minister offered an explanation this afternoon, but it did not satisfy me or other honorable members on this side. The honorable member for Swan (Mr. Gregory) indulged in a strong criticism of an ‘ industry which is carried on in my electoral division. He is never satisfied unless he is indulging in accusations against the workers of this country. The honorable member said that the coal strike was responsible for the Broken Hill Proprietary Company’s reduced output, and for the closing of portions of the works. That was not correct. The honorable member allows his prejudices to influence his judgment, particularly iu any matter that concerns the workers. It is well known that the dumping in Australia of cheap steel goods from Germany so seriously affected the operations of the Broken Hill Proprietary Company that it was obliged to close down. The coal strike was not a factor in that decision. As a matter of fact many of the mines which were affected by the strike did not produce the type of coal required by the Broken Hill Proprietary Company. It obtains its supplies chiefly from the south coast and western fields. Therefore the strike in the northern mines did not seriously affect operations at Newcastle. In any case both Hoskins and the Broken Hill Proprietary Company manufactured all their own coke. The honorable member for Swan also complained that the prices charged for the Australian products in iron and steel are too high. I shall allow the honorable member for Newcastle (Mr. Watkins) to deal with that phase of the problem. He has had a life-long experience of the industry in his district, and is in a position to speak authoritatively, particularly from the point, of view of the workers. The honorable member for
Swan spoke also of the effect on the industry of child endowment, of workers’ compensation, and the 44-hours’ proposals of the New South Wales Government, and suggested that they were largely responsible for the present stagnation in industry.
– The Tariff Board’s report was presented before those social reforms had had time to make their influences felt.
– Yes. Of course the honorable member for Swan prefers the product of cheap-labour industries in other countries. He wishes to encourage the importation of iron and steel products from Belgium, France, and Germany. Firmly though I believe that this country will never reach full nationhood until its basic iron and steel industries are firmly established, I pray to God that they may never be developed under the conditions that prevail in European countries. There is no room in Australia for any industry to which such conditions are essential, and, because of that, members of the Labour party are prepared to give industrial enterprises ample, protection against the cheap labour products of other countries. The honorable member for Swan (Mr. Gregory) spoke of the balance-sheet of the Broken Hill Proprietary Company. I hold no brief for any big company. In regard to its mining operations, the record of the Broken Hill Proprietary Company is by .no means creditable, and it is in trouble to-day because of its watered si nek and overcapitalization, and because it is futilely trying to earn interest on capital that was never invested. If, as the honorable member for Swan has said, the company is making 12 per cent, profit, that result is probably due to the mining operations and the sale, of by-products; but if the iron and steel manufacture were isolated from the other operations of the company, I believe it would show for the last couple of years either a loss or at best a very small profit. Australia has reached that stage when if it does not develop its secondary industries, and engage in mass production, if its iron and steel works are not able to produce machinery for the farmers and tools of trade for the artisans, it will retrogress. Primary production is no longer sufficient to maintain the country, and because the iron and steel industry is so vital and basic, I am prepared to give it thorough protection against foreign goods manufactured by sweated labour. I am disappointed that the Minister has not taken these fa.-9 into consideration and given the iron and steel industry the protection it requires. The wonderful progress and development of Great Britain were founded upon she development of the iron and steel, and other basic industries in the United Kingdom before they had attained any magnitude in. other countries. I do not wish to see Australian industries developed under the sweating conditions which characterize the factories of Great Britain;, but. the fact remains that the development of the. British Empire is largely due to its early paramountcy in the production of iron and steel. If Australia is to become a great nation, it must foster these industries and protect them, not only from, the competition of the cheap manufacture of foreign countries, but also the unscrupulous methods of commercial, manipulators in the United Kingdom. British commercial interests cannot be allowed to threaten our people. If Australian industrialists are to be ruined it will be little comfort to them to know that. they suffered that fate for the sake of British industries. Preference to Great, Britain is all right, provided our own industries do not .suffer by it. I am satisfied that much of the iron and steel that is imported from Great Britain is not manufactured there. Unscrupulous traders have taken advantage of favorable exchange rates to buy material -two-thirds manufactured on the Continent, send it to Great Britain, and then, export it to Australia, taking advantage of the preferential tariff and not only destroying industries here, but injuring those, iu the United Kingdom, also. I suppose that in insisting upon the policy of preference to Great Britain the Minister is actuated by motives similar to those which prompted the Government to send Australian money abroad for the building of Australian cruisers in British shipyards, while British patriots were having ships built in the dockyards of Germany because of the cheap labour and favorable conditions. The talk of empire trade and patriotism is humbug so far as the trader is concerned; he knows no country but operates wherever the greatest profit can be made. He is prepared to take advantage of the economic situation in continental countries to compete unfairly with the industries of Australia and to lower the good labour conditions that have been established by insisting on fair wages and reasonable hours in industry, and giving the manufacturers adequate protection to enable them to comply with those requirements. Comparing the labour conditions of other countries with those in Australia one wonders how the foreign workers manage to exist. I would sooner see this country without any industries than that it should acquire prosperity by the sweat and tears of the workers. The duties proposed by the Minister are inadequate. and he has not satisfactorily explained his reasons for departing from the Tariff Board’s recommendations, which, if not conservative, proposed at the best bare justice. The destruction of the iron and steel industry in Australia would cause grave unemployment and distress to tens of thousands of families.
– Does the honorable member realize that the British preferential duty on bar iron, which is the item under discussion, is equivalent to 50 per cent. ?
– The Minister cannot deny that so far as the steel industry generally is concerned he has without adequate reason departed from the recommendations of the Tariff Board. I do not wish unduly to prolong the discussion ; I want to see the schedule passed quickly because though some of the duties it contains are inadequate they will at least give some relief to our manufacturers. I have registered my protest against the inadequacy of the protection that the Minister is affording an industry that is vital to the country, but I hope that when he realizes the views of the committee he will retrace his steps and give effect to the proposals of the Tariff Board. It is unfortunate that private members are so shackled by ancient precedents and parliamentary traditions that we are not masters of our own business, and cannot move to increase duties with which we are dissatisfied. I trust it will not be long before the present system will be altered, and honorable members will be able to freely give effect to their opinions. It is the duty of the Government to protect this industry, which is so vital to Australia’s development to the fullest possible extent.
– During the general debate on the tariff I stated my attitude towards this schedule. I do not wish to traverse the ground already covered by honorable members on both sides of the chamber, except to say that this industry is of great importance to Australia. My attitude may be described by saying that whatever assistance is to be given to the industry, it should be in the form of a bounty instead of a duty, as has been done in connexion with other important commodities which are on the free list. I rose more particularly to refer to a statement made by the Minister for Works and Railways (Mr. Hill) when I was speaking during the general debate on the tariff, and charged the members of the Country party with not adhering to their platform. At that time the Minister, by interjection, made a charge against me which I feel it incumbent upon me to refute.
- (Mr. Duncan-Hughes). - I think the honorable member is getting away from the item under discussion.
– I was referring to fencing wire, and was about to say that the interjection to which I referred was as follows: -
Tlie duties on fencing wire were imposed when the honorable member was a member of the cabinet, and he never raised his voice against them.
If that charge were true, it would brand me. as an arrant hypocrite. It would make it appear that I was guilty of the charge, and the Minister was innocent. What are the facts? No duties upon fencing wire were imposed while I was a member of the Cabinet, and no one knows better than the Minister that his statement is totally incorrect. As a matter of fact, the duties on fencing wire - I refer more particularly to the intermediate and general duties - were increased on the 12th August, 1926. The duties on fencing wire were increased from intermediate 5 per cent, to 100s., and from 10 per cent, to 120s. general tariff. That definitely disproves the Minister’s statement. Later he made another charge in connexion with wire netting, which I connot discuss under this item. But any alterations to that item while I was a member of the Cabinet were made, as the Minister for Trade and Customs admitted, by administrative act under the Industries Preservation Act. To-night the Minister for Trade and Customs, in referring to wire netting said -
If overseas manufacturers are exporting wire into Australia and selling it at a price lower than the price ruling in their own country, it is right and proper that the provisions of the Industries Preservation Act should be enforced to prevent such dumping.
So much for the wire netting duties. Subsequent to the imposition of these duties on fencing wire the Minister is reported in the official organ of the Country party, the Countryman, of the 6th November, 1926, as having said -
There has not been a single increase since the present Government took office in the duty on any article used on the farm.
Curiously enough, for some reasons which I cannot explain, the Minister, with that capacity for blundering which seems to be characteristic of him, mentioned in support of his statement that the duties on fencing wire had been reduced from the former rates of British preference 52s., intermediate 72s. 6d., and general 90s., to British preferential free, intermediate 5 per cent. and general 10 per cent. I remind the committee that this was three months after the duties had been increased to the extent I have mentioned. I presume the matter was’ discussed in Cabinet, and I think I can safely say in the party room. Notwithstanding this, the Minister made the astounding statement that the Government of which he was a member had not increased the duties upon any articles used on the farm. On the contrary, he said that duties had been increased when I was a member of the Cabinet, which I have shown is incorrect. I do not wish to be harsh in this matter, or to pursue a personal dispute; but I regard it my duty to record the actual facts.- I am unable to discuss the particular matters that I wish to speak on in connexion with a motion which I moved on the 25th March, 1926, having regard to the reduction of duties on agricultural implements, but upon which the Minister and some of his colleagues refused to vote by absenting themselves when the division was taken. The Minister’s attitude has been extraordinary. If he frankly stated that he had made a mistake, or that, as a Minister in the present Cabinet he has to compromise, I should have nothing further to say. When, however, he makes a statement which on the face of it is absolutely incorrect, I must raise my voice in protest. I consider that it is his duty to withdraw his statement or prove its correctness.
– During the general debate on the tariff 1 quoted to the committee a letter which I had received from a firm of structural steel contractors in Brisbane. It has since been pointed out to me that one statement contained in the letter may have been incorrectly taken to refer to the Broken Hill Proprietary Limited, possibly to the detriment of the company. The chairman of directors of Harvey and Son, Brisbane, in pointing out the great difficulty which his company is having in securing its requirements for the completion of several large buildings under construction in Brisbane, said that it had some difficulty in getting supplies from the Broken Hill Company. Later in his letter appeared the following remark: “In one case we were notified that no orders for Queensland could be accepted.” I should point out that that notification was not received from the Broken Hill Proprietary Company, and I think it is only fair to add that the Brisbane company in writing to the Minister as recently as the 7th December, said -
We give every opportunity to the Broken Hill Proprietary Limited and receive every satisfaction from them; but in this case we consider that owing to the difficulties which they have been up against during the last three months, as well as the fact that a greater portion of the sections were not rolled by them, we could do nothing else but place the order overseas, and we trust therefore that you will give the matter every consideration.
This letter refers to the order which they have had to send for overseas and which is about to arrive by the Osterley. In . another letter which I have received from the company in Brisbane, dated 10th December, the following appears -
The Australian mills roll a variety of sizescertainly not all that is required by the trade.
I know that the Australian mills do not claim to roll all the sizes required - I think there are 73 - but they are endeavouring to extend in that direction. The letter continues -
But unfortunately the cycle of rollings is such that the rolling date of any particular section is so far ahead that you could import from overseas and send’ the same material back again in the same time that the Australian mills would require to deliver the goods in Brisbane. There are instances, of course, where you may be lucky enough to strike the rolling, but we find that these arn very rare cases, and even then, as certain correspondence would show, are not certain.
I quote extracts from this correspondence which, in fairness to the Broken Hill Proprietary Company, I think I should do. I realize the difficulties which this industry has to face, and, as I have said before, I recognize that it is our most important industry. I appreciate the patriotic attitude of the Broken Hill company and those associated with it during the tragic years of war, but in justice to this Brisbane firm, I wish to point out the difficulties with which it is confronted in securing its requirements. This is often due to the fact that architects specify certain sections, and also stipulate in some instances that the material must be imported. Personally I think that’ our architects could do a good deal more than they have done to assist this industry by stipulat-* ing that the sections which it is able to supply shall be used.
.- I regret that the Minister for Trade and Customs has not informed the committee why the Government did not grant the duties recommended by the Tariff Board. The Minister knows that this is a basic industry and the foundation of a thousand other industries in Australia. It ought therefore to be placed upon a proper footing. I understand that the average rate of duty on the items which this industry manufactures in Australia is a little more than- 16 per cent.
– The duty on bar iron is £3 10s. per ton.
– It u ot as much as was recommended by the Tariff Board. In certain instances the Government has granted a duty in excess of that recommended by the Tariff Board.
– I think that the honorable member is mistaken.
– If I am incorrect I shall withdraw the statement; but is it not a fact that a higher duty than that recommended by the Tariff Board is recommended on certain pianos?
– We have followed the Tariff Board’s recommendation in respect to the British preference in practically every item.
– But what about the foreign duty? If there is one industry which more than another can help Australia to greatness it is the steel industry, and I regret that the Government is proposing to restrict its operations at this juncture by not granting the protection recommended by ‘the board. It cannot be denied that many business houses in Great Britain have taken an unfair advantage of our British preferential duties to send to Australia as British products articles which do not contain the required percentage of British material and labour. The Broken Hill Proprietary Company has undertaken that it will not increase its prices if additional tariff protection is granted to it; but even if it did attempt to exploit the people, it would be doing only what the British firms are doing. If exploitation is to be carried on, surely it is better that Australian firms should do it, for we can tax any inordinate profits that they may make, whereas the profits of British and foreign firms are beyond our reach. Although the average duty on the products of the Broken Hill Proprietary Company is only a little over 16 per cent., the average duty on the fabricated goods made from them is about 30 per cent. I submit, therefore, that the Broken Hill Proprietary Company is entitled to greater protection than it is receiving. It is well known that the German iron and steel interests have organized a combine which includes French and Belgian interests. On that point the following report which appeared in the Tariff Review is interesting : -
Germany and the Dawes Plan. An English Impression.
Sir John Poster Fraser asserts that two thousand industrial cartels in Germany are regulating output and controlling prices which, speaking generally, ave higher in Germany itself than abroad.
In steel production Germany has brought France and Belgium into her trust, and now the move is to get Britain within the ring.
– .That is hardly a recent pronouncement.
– The position is worse to-day than when it was made If the continental iron and steel interests succeed in getting the British manufacturers into their combine the outlook for the Australian iron and steel industry will be dark indeed. I realize that just as the budget was that of the Government, and not that of the Treasurer, so this schedule is that of the Government, and not that of the Minister for Trade and Customs ; hut I should like the Minister to explain why a departure has been made from the recommendation cf the. Tariff Board?
– T have listened with interest co this debate, which, owing to the leniency of the Chair, has developed into a general discussion on our iron and steel industry. I am glad that it has dome so, for it has indicated to me the views of the committee on the subject. Honorable members opposite have declared that he proposed duties are not high enough adequately to protect this industry, and have criticised the Government for departing to some extent from the recommendations of the Tariff Board; but some honorable members on this side of the committee have expressed diametrically opposite opinions. Persons interested in this industry abroad have complained that our duties are prohibitive, while those interested in it in Australia have made it clear that they regard them as too low. The view has been unanimously expressed locally, however, that the foreign duties are adequate, and should not be disturbed. Consequently, I shall deal only with the British preferential duties. The three import-ant items which Britain imports: *to Australia are bar iron, girder iron, and heavy rails. The Government has proposed a duty of £3 10s. per ton on bar iron, although the Tariff Board recommendation was £3 15s. per ton. Our proposal in respect of girder iron and rolled iron is that the duty shall be £3 10s. per ton, although the Tariff Board recommended that it should be £4 8s. per ton. The honorable member for Brisbane (Mr D. Cameron) has disclosed that local manufacturers are not in a position to supply all our girder requirements. They, can only fulfil orders for certain sections. The Government proposal in respect of heavy rails is that the duty shall he £2 10s. per ton, although the Tariff Board recommended £3 10s. The difference in bar iron is only 5s per ton. I have explained why there is a difference of 18s. per ton in the case of girders. The Customs department is today allowing concessiais in respect of the importation of thousands of tons of girder iron into Australia owing to the local manufacturers being unable to supply the sections required. They are only making about 40 of the 70 odd sections standardized here. They are increasing their sizes, and as they do so their output must grow. I have received a letter from a prominent iron and steel manufacturer in which satisfaction is expressed ‘with what the Government has done. I was reading this afternoon the report of the Tariff Board on tabular knitted goods. It pointed out that only about half the rate of duty asked for had been recommended. When those interested in this industry ascertained that the Government was only prepared to grant ‘ the duty contained iia this schedule, they frankly admitted that the concession was “not too bad.” I appreciate, the desire of honorable members to play fairly by this big industry. I may say that it costs one secondary manufacturer who uses the material manufactured in our steel works £100,000 .a year to support .he local industry. All of these matters have to be considered on account of the infinite repercussions they sometimes have throughout secondary industries of the. Commonwealth. There has been severe criticism of these duties in Great Britain.
– -Now we are ‘being given the truth.
– There has been severe criticism, also, in this committee because the duties are said to be not high enough. It seems to me that the Government has hit upon the happy medium and has done tlie fair thing to this very vital industry. The proposals of the Government in regard to the increased duty on these three main commodities, plus the deferred duty upon pipes and tubes, will mean an increased output at Newcastle of over 100,000 tons.
– If they get the business.
– Surely they can expect to be given orders to supply half the quantity of .British bar iron that was imported during the last twelve months, in addition to a similar quantity of girders, and to retain the whole of the business in rails, which they have never lost. In addition, from 50,000* tons to 60,000 tons of wrought iron tubes and pipes will be manufactured as a result of these duties. I am. now able to disclose the fact that the great firm of Stewart and Lloyd’s, of Glasgow, the biggest firm in the world in its particular line, proposes to establish works in Australia.- It will use the raw products of this vital industry in the manufacture of pipes and tubes, and that will, mean the output of a further 50,000 tons. I have been challenged, to state the reasons that actuated the Government to decline to increase the duties on pig-iron, blooms, and billets. The summary of a long dissection that I have says, of pig-iron, that the local companies supply practically the whole of the requirements of Australia; that the importations of pig-iron are decreasing, while local production is rapidly increasing; and that there are no importations from any source other than the United Kingdom, with the exception of 258 tons from India, during 1925-26, and 1,139 tons from New Zealand during 1926-27.
– Has that position not altered since the report was printed?
– These are the latest figures that I can give. They include the fiscal year which ended on the 30th June last. Another reason mentioned is that additional protection has been given to the manufacturers of pig-iron by the imposition recently of a requested duty on scrap iron and steel; the proposals which are now being put forward in relation to further manufactured products should assure to the two local companies an additional output of 100,000 tons of pig-iron, which should materially reduce the cost of production, and the present profit which is made on the production . of pig-iron appears to he reasonable. This report has been brought quite up to date by the inclusion of the 1926-27 figures. Is there any case for au additional duty upon pig-iron, seeing that it is a raw material for many other important industries? Let me now analyse the position with respect to blooms and billets. First of all, it is noted that there is a great discrepancy between the cost of manufacture of ingots by the Broken Hill Proprietary Limited and Hoskins’. That discrepancy amounts to about £2 a ton.
– If tlie Minister does not propose to grant the concession that is sought, why does he stone-wall?
– Various speakers to- night have accused me of not being able to give, on behalf of the Government, adequate reasons for the course it has pursued and the recommendations it has made.
– The Minister has not yet done so.
– This report says :-
The two local companies now produce !19 per cent, of the Commonwealth’s requirements of blooms and billets. As the great bulk of the local production is used by those companies in future manufacture, it is evident that they must look for their main profits to the steel finished ‘ products, such as merchant bars, joists, and rails, made from the ingots and bolts. It is with respect to these finished products rather than the ingots, &c. from which they are made that the question of adequate protection is vital.
On those commodities we have provided practical and generous duties in the schedule. The report goes on to say -
Therefore the best, way to assist this branch of the industry appears to be to make such provision as will result in an increased production of tlie finished products, with con sequent increased output of ingots and bolts. Seeing that the local companies have already virtually obtained the whole of the Australian market in ingots, bolts, &c, any increase in duty would- not result in an increased output, with consequent lessening of cost of production. Increases are suggested in the duties on finished products - bars, joists and rails made from the ingots and bolts. The proposals for increased duty on further manufactured products would assure an additional .100,000 tons of ingots and bolts to the two local companies, which would reduce their cost of production. The importation from countries other than the United. Kingdom during the last four years was only tons from Czecho Slovakia, 15 tons in one year from the United States of America aud 28 tons in another, and 38 tons from Germany the next year.
On that summary the facts have been adequately substantiated. How, then, can we justify any further interference with this item that is a raw material for other manufacturers? These are dissections upon two of ‘ the items that have been alluded to in the course of the debate and upon which I have been challenged to give adequate reasons for the proposals of the Government. I trust that, after summing up the points that I have made, the committee will be satisfied that those proposals are fair and reasonable and are adequate for the protection of this vital industry.
.- I have listened with great interest to the case that has been made out in favour of the duty that is sought by the industry, which has the support of the Tariff Board’s report and recommendation, and to the proposals that are advanced by the Government. I do not propose to quote any figures or to traverse the arguments that have been so capably advanced by members of the committee; but I wish to say that we are confronted with a position that is extremely perplexing. On the one hand we have the statement of the Minister, supported -by the result of inquiries that he set on foot and that were conducted by himself and his department; and in contrast to that we have the result of the inquiries which were conducted by the Tariff Board over a very long period. I suggest that the Minister ought not to ask the committee at this juncture to accept as conclusive proof of the case he seeks to make out the evidence that he has tendered to the exclusion of the Tariff Board’s conclusions and recommendations; that he and the industry should be content for the time being with the schedule that has been submitted; and that he should not clinch the matter by giving it the force of law and thus removing the opportunity to make a further investigation.
If the Minister will withdraw the whole of the item, the duties will still operate and no injustice will be done. The matter could again be referred to the Tariff Board and another inquiry could be held into this, the greatest and most important of our basic industries. In the closing hours of the session the committee should not be asked to arrive precipitately at a decision upon two conflicting reports I have read the list of the witnesses who opposed these duties, and it has amazed me to find that highly protected subsidiary industries do not wish to give a fair measure of protection to the parent industry. That is a most remarkable position. I draw the attention of the Prime Minister (Mr. Bruce) to the fact that the committee is in a very discontended frame of mind. It has witnessed the resolute determination of the Minister not to hear or determine anything except on the basis of the final analysis which has been made’ by his officers. I do not indict those officers. According to the Minister and his officers there is an advantage to the industry in having iron and requisite supplies at their doors, thus obviating storage, and the necessity to increase their expenditure in . the purchase of larger quantities overseas. The source of supply of ore is in the State of South Australia, and that ore has to be transported by water to the works at Newcastle. The statement which has been prepared by the officers of the department is palpably incorrect. Other statements of a similar nature may be in the same category. The lime has to be brought from Tasmania and the coal from Maitland. None of these commodities are at the door of the works. That is another wrong statement by the department upon which the Minister relies for his information. I know of no other instance in which the Tariff Board’s decision has been departed from without the subject of the inquiry being referred back to it and an opportunity given for fresh facts to be ascertained and further conclusions arrived at. We are establishing a very dangerous precedent, and I regard this difference of facts as a vital clash, between two sections of one great organization. I do not know whether the Tariff Board had at its disposal the information that was obtained by the officials of the Customs Department, but I know that the members of the board have a great knowledge of Australian industries, and their sole business is to investigate the condition of industry in Australia. They are. engaged on their work throughout the year and their analysis of evidence is generally careful and their recommendations generally sound.
– Does the honorable member suggest that the Minister is not capable of gaining knowledge for himself?
– He has not the same opportunity as the Tariff Board to obtain information. If the honorable member had spent one week in the Trade and Customs Department he would know that the Minister has little opportunity or time for getting facts first hand. There is no department so overloaded with work as the Customs Department. At the same time we have established a Tariff Board to inquire into the conditions of industry, the men of high standing have been appointed to it. The personnel of the board is generally approved by the country. The iron and steel industry is the greatest basic industry of Australia, and upon it some day we may have to depend for our national safety, because it is to that industry that we shall have to look for means of arming and defending ourselves in the hour of danger. Yet we are discussing matters vital to its destiny in the closing hours of Parliament. The Minister has placed the committee in an invidious position, and I regret that he does not intend to re-submit the items of the board. The board has had no opportunity to reply to the case put by the Minister and his officers. The honorable member for Swan (Mr. Gregory) and the honorable member for Wimmera (Mr.’ Stewart) were inclined to view this great basic industry from the viewpoint of the man upon the land only. I am as keen for the welfare of the man on the land as is either of those gentlemen. I have made an examination of the output of this industry and I find that 35 per cent, of it is devoted to national works, such as sleeper rails and fishplates for the Commonwealth railways, rails and fishplates for the various State railways, and pig iron, structural material and sundry products for Commonwealth and State Government departments. The output for agricultural purposes is only 3 per cent, of the total output of this great industry. Are we to have the destiny of this great national industry jeopardised because of the opposition to it of ‘a section of that community which takes only 3 per cent- of the output of the works? In respect of some items the community bears the cost under bounties. There are certain items in the schedule with which I do not agree, but they are minor matters and I shall have an opportunity to vote upon them separately. It is amazing that we cannot deal with this industry from the big point of view, and that we cannot realize that the needs of our basic industries should be the first consideration of this national Parliament. I regret sincerely that the Government intends to force this item through the committee in defiance of the opinion of the members of the Tariff Board The Newcastle Steel Works has at its helm men of capacity and enterprise. The undertaking is efficient from beginning to end. Its workmen are capable, and the whole business is based upon right lines. It is no use my protesting any further against the action of the Government, because it has made up its mind to pass this item, but at some future time when the Government required favours of honorable members, they may not be forthcoming. The Government is treating shockingly this request for the resubmission of the Tariff Board’s report on this great industry. Notwithstanding what the Minister has said, I consider that it is deserving of better treatment. I believe that before long an opportunity will be given to investigate the industry from beginning to end.
.- I realize the futility of attempting to persuade the Government to adopt the recommendations of the Tariff Board. The procedure laid down under the Standing Orders, as interpreted by the Chair prevents private members from moving for an increase in the duties on iron and steel. Under the circumstances, we on this side have no alternative but to support the item. We are prepared to make the best of a bad job. I see no good purpose in prolonging the discussion, and I hope that the manufacturers interested will ‘bring influence to bear upon another place, with a view to securing the rectification of anomalies which appear in the schedule.
– Unfortunately, the Senate cannot reduce or increase duties.
– It can make requests, and probably the Minister in the light of further representations may yield to them. I believe that “the best interests of the industry would be served by taking a vote on this item at the earliest opportunity.
.- I should not have risen to speak had it not been for the suggestion of the honorable member for “Wannon (Mr. Rodgers) to defer the consideration of this item. We have now for some weeks been working at high pressure. Every honorable member is suffering more or less from brain fag, and is, therefore, not capable of giving careful and proper consideration to the vital questions that are under the consideration of the committee. I have had the privilege of inspecting the works at Newcastle in company with the honorable member ‘for Newcastle (Mr. Watkins), and I realize the great importance of the iron and steel industry from a national stand-point. I strongly deprecate its destiny being decided by this committee at the fag end of the session, because honorable members arc unable to grasp the salient fact that the existence of this industry is in jeopardy. I was astounded at the magnitude of the works at Newcastle, and the efficiency of those employed there, and we should do everything possible to preserve this great industry to Australia. It is a key industry, and I strongly support the honorable member for Wannon in his request that the item be deferred, particularly as the proposals of the Government are in contradistinction to the recommendations of the Tariff Board. The board was appointed for a specific purpose. Parliament has not the time or opportunity to investigate the condition of industries, and, therefore, the board was appointed to make careful inquiries and to take sworn evidence from all available sources. Our desires that Australia shall develop and progress and take its proper place among the nations of the world. I nsk the Minister to agree to the request of the honorable member for Wannon to defer this item so that the fullest investigation may be made into the conditions of the industry.
Mr. WATKINS (Newcastle) [12.14 a.m. . - I have listened attentively to the discussion on this item, and am surprised at the callousness of the Government in refusing to give proper assistance to the great iron and steel industry. Under many of these items increased duties have been imposed to benefit primary production and in some cases protection to the extent of 150 per cent, has been given. The iron and steel industry has been assailed by the Minister, who has absolutely misrepresented the facts. His argument respecting the importation and local production of pig iron has been completely answered by the right honorable member for North Sydney (Mr. Hughes). I pass over that. The Minister picked ou.it one ‘item in which the duty he has proposed is somewhat close to the rate recommended by the Tariff Board; but he omitted to mention other items in which his duty falls very short of what has been recommended by that board. For instance, on rails he has proposed an Increase ot only 1.0s., whereas the board’s recommendation was an increase of 20s. ; and on rails of less than 50 lb. in weight he has provided no increase at all. He has tried to lead the committee to believe that the local manufacturers are not suffering from importations because of the action of his department; but where is the £1,250,000 worth of iron and steel product coming from? He says that he has increased the preference to Great Britain; but as a matter of fact the preference goes to the Continental manufacturers, and not to British manufacturers. When he saw how many honorable members were asking for fair play for the iron and steel industry, he tried to make it appear that one manufacturing firm was satisfied with the Government’s proposal. I cannot understand how he could so far forget himself as to say that he had received a letter from that firm stating that it was perfectly satisfied with the duty. I know that it applied with others for an increase in duty, and appeared before the Tariff Board asking for the rates for which the others were asking. The gentleman from whom the Minister received the letter is now in a lobby pf this building, asking for the increased duty recommended by the Tariff Board. As a matter of fact the Minister quoted from a letter in which this gentleman welcomed him back to Australia, and thanked him for giving the industry something; but did not express his satisfaction with it.
– That is an additional reason for having these duties referred back to the Tariff Board.
– Of course. The firm of Hoskins was represented before the Tariff Board, and submitted the same claim as the other manufacturers. A cable which I shall now quote shows how far-reaching is the unfair competition of continental manufacturers. It is as follows : -
LONDON”, 9th December.
The Iron and Steel Wire Manufacturers’” Association informs tlie Australian Press Association that British manufacturers greatly sympathize with Australian steel interests in endeavouring to protect themselves against grossly unfair competition from the Continent, based on a level of wages little more than half those ruling in Britain, and almost unrestricted working hours.
The association suggests an import duty might be imposed on Continental material reflecting the relation between labour conditions on the Continent and in Australia. British manufacturers would cordially welcome any proposals for co-operation with Australian manufacturers, as they fully recognize Australia’s policy is that local makers shall have the first consideration, and British makers can only expect to handle tlie surplus which their works cannot undertake.
The benefit afforded by our preferential duties is Secured by English traders who import from the Continent, and not by the British manufacturers. Speaking on the first item, I mentioned that out of 409 blast furnaces in England there are only 16.1 in operation to-day. A big combine of Austrian and German steel manufacturers aims at crushing not only British but also Australian manufacturers. The honorable member for Swan (Mr. Gregory), has once more tried to show the effect of these duties on the prices of steel1 products ; but the honorable member for Dalley (Mr. Theodore) has clearly demonstrated that from 192.1 until the present time there has been a drop from approximately £17 to £13, £11, and £10 in the prices of various classes of steel products of Australian manufacture.
The steel industry was started in Australia during the war period, and, at the instance of the Government, machinery for rolling steel was installed much ahead of the Broken Hill Proprietary Company’s building programme. We know that, although the price of galvanized iron rose to £70 and £S0 a ton when we could get none from the outside world, Australia was supplied from Newcastle without any increase ir price. Yet this is the treatment those people now get from a Government which was returned to power mainly on its promise to afford protection to Australian industries. I wonder sometimes if the hand of Amery is not behind all this. We know that the traders of England - not the manufacturers there - are complaining about this tariff. They want to carry on their nefarious practice of securing preferential treatment on the products of continental manufacturers. It is admitted on all sides that the steel industry is tlie industry upon which the nation must be built. We must have it established for the defence of Australia, so that as we did during the last war we may be able to depend upon it when the sea routes are closed. Yet the only increase of duty it is to get on one of its important lines is 5s. It is the only increase it has had since a protective duty was first imposed by this Parliament on iron and steel manufactured goods-. It is useless for the Minister to say that he has built up the wall against foreign commodities. He is shutting the front door and leaving the back door open. We gave a preference to Great Britain willingly and freely, but it was never intended that the traders of Great Britain should hand it over to people on the Continent. The time has; come when we should either ask the British Government to. see that these: traders, give us fair play or withdraw the preference. Do honorable members know what they are talking about when they say that the Broken Hill Proprietary Company has closed down a furnace? Do they realize what this, means, and what it will mean if a second furnace closes down as is likely to happen at any moment? The closing down of one furnace means the nonconsumption of one-third of a million tons of coal a year. One range of coke ovens is already closed down at Newcastle, meaning the loss of by-products from which the company was making a little profit. If the second furnace is closed down honorable members will then realize how close they are to the closing down of the whole plant. I hope now that the Minister will agree to refer these items back to the Tariff Board. I am pleading on behalf of the wives and children of the men who will be. thrown out of employment, and condemned once again to face what they faced not long ago - for over thirteen months, misery and starvation in a land of plenty. It is not right that this matter should be treated in the light and airy manner with which some honorable members have received it. What was wrong with the opinions of the first two accountants? Could their word not be taken? I consider the action of the Government to be a direct insult to the Tariff Board. Dissecting tariff board reports will not help the iron and steel manufacturers to burn one additional ton of coke. We merely know that they are closing down and that their men are being discharged. It is up to this National Parliament to study the interests of Australia and to help the industry that has done so much in the past for this country. The Tariff Board admits that during the war, the iron and steel industry saved Australia £2,000,000, while other figures show that at least £6,000,000 was saved as a result of the advantageous prices which then obtained in Australia. The industry receives no thanks for that. This Government prefers to place the trade in the hands of overseas combinations, who will bleed the country again as they bled it before, and who have recently been kept in check only by the competition of our own industry. If the Minister continues to be adamant and refuses to give relief to our iron and steel industry, he must remember that there are honorable members in this Parliament who will watch events and who, when he requires help, will probably be found wanting.
. Throughout the debate not one word has been said on behalf of those who will pay for the upkeep of this industry. Much has been said about those employed and unemployed in connexion with the industry, and about its unprofitable character. The Minister pointed out that Australian labour costs 108.26 per cent, more than does British labour.
– The honorable gentleman quoted those figures, but he stated that he would not accept them.
Mr- PROWSE.- Does the Minister consider who should buy the output of this very appropriately termed key industry? It is an industry upon which many other industries depend, and upon which, to a great extent, the development of Australia depends. This Parliament intends to act contrary to the recommendations of the Tariff Board. The Government has been given an extremely solemn warning, and it does not appear to be taking much notice of it. It has got into a vicious circle. It has increased duties on glucose, butter, potatoes and other foodstuffs, and the burden will fall on the workers. The Arbitration Court will be called upon to remedy the position and the increased cost of production will cause the manufacturers to return to this Parliament to ask for still greater protection. The report of the Tariff Board has this to say, and I desire honorable members to take notice of it -
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 is a 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 to be 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, hut it cannot be blind to the fact that simultaneously with the hoard being asked to consider large increases in duties on such important industries as -
Iron and steel,
Butter and cheese,
If there are so many unemployed in this industry, which it is said is on the bread line, it is up to the unions to get together in the endeavour to meet overseas competition. They should say, “ We have a heavy protective tariff in favour of the industry; we have the coal and the raw material, and, as big Australians, we should do something for the people of Australia who are buying .this commodity.” As soon as we start to build a big bridge in Sydney, or railways in the hinterland, those enterprises are loaded by the heavy cost of the basic material. One of the chief causes of all our troubles is our excessive borrowing. That retards the development of our industries. Other countries are developing their industries on much more economical lines. It is all very well to set up a high standard of living; but if, in maintaining that standard, we crush the industry of the country, Ave should not adhere to it. The mere sending up of wages and so depreciating the purchasing power df money, will not achieve a high standard of living. We must take some cognizance of the solemn warning issued by the Tariff Board. I am deadly opposed to increasing the tariff when it means an increase in the cost of living, which must ultimately fall on the primary producer. Our primary industries alone bring revenue in’to Australia. I think that we are on the wrong track. Manufacturers and unions ask for more and more, and the burden falls on our primary producers, who must necessarily reduce their output. Later, timber will come on for discussion, and I shall also oppose any increase in that tariff. If a vote were taken on every item which increases the tariff I should vote against it.
– I ani sick and tired -of the attitude of the honorable member for Forrest (Mr. Prowse). I do not know how he can give utterance to such sentiments. Australia has decided upon a protective policy, and, to carry out that policy, we must have effective duties. The report of the Tariff Board is not of much use to those who have empty stomachs and nothing wherewith to fill them. The honorable member for Forrest does not complain when the price of wheat is raised By 3d. per bushel, or when the Government subsidizes steamers so that we may travel on them more cheaply; but whenever anything is proposed that will benefit the industrial section of the community, it meets with his strenuous opposition. No doubt the recent tour of the Minister for Trade and Customs was most satisfactory to the honorable gentleman, both from a financial and health point of view. But if the influence of those with whom he came into contact has caused him to adopt his present attitude, it has resulted in something adverse to the best interests of Australia. I really believe there was something sinister to Australia in the recent visit of Mr. Amery. I do not make any insinuations against the personal character of that gentlemen; but his visit did nothing to make Australia more self-contained or to give employment to our workers. I have no doubt that Mr. Amery, as the representative of the British Government, acquitted himself with credit. So far as he was able, he conveyed to members of this Ministry and the representatives of the people, the views of his Government on many subjects, including the industrial situation in the Mother Country. For that he is to be commended; but I should be sorry to think that his visit to Australia influenced the attitude of the Ministry towards these tariff items, so far as they affect British industries. The progress of Australia is intimately associated with the success of its secondary industries, and particularly those industries that have to do with the production of iron and steel. The duties imposed under this item apply to a key industry, the products of which play an important part in the development of all other secondary industries. Practically the only objection to these duties has come from the representatives of people who appear to be engaged chiefly in the growing of apples or other fruits. The
Broken Hill Proprietary Company obtains the raw material for its Newcastle works from Iron Knob in South Australia, and conveys it to Newcastle, where the process of converting it into iron and steel gives employment to a great number of people. It benefits all sections of the community. The steel industry is too important to be allowed to languish for lack of sufficient encouragement by way of tariff protection from the products of cheap labour countries. I agree with the honorable member for Newcastle (Mr. “Watkins) that not much is to be gained from representations to the Ministry. It has decided upon a certain course of action, and whether it is right or wrong, will not depart from it. No Government in the history of Australia has been so humiliated as this Government has been of late in regard to important items of its policy. I could not give a silent vote on this item. Generally, when I speak I utter a few pearls of wisdom in the hope that I may be able to put the Ministry on the right path. Its attitude towards this great industry is not in keeping with the accepted policy of the country. The late Sir George Reid, the great protagonist of freetrade, acknowledged to me at the close of the first tariff debate, that freetrade had gone by the board, and that we could all be friends again. He added that since protection was the declared policy of the Commonwealth it was the clear duty of the representatives of the people to see that tlie duties imposed effectively protected those who established, industries in this country. After all, the opponents of this policy are now few in number, and, generally speaking, they continue to adhere to the antiquated principles of John Stuart Mill, Adam Smith, and other out-of-date economists. They effect to regard with horror the requests of unions to obtain from the Arbitration Court higher wages and improved conditions of labour in order that unionists with their wives and. ‘families, may have a little more leisure, and enjoy a brighter life. What a glorious country this would be if all people were’ happy and none was hungry.
– I should like to know how the honorable member proposes to connect his remarks with the item before the committee.
– By suggesting that opposition to these duties will lead to unemployment, that unemployment means empty stomachs, and empty stomachs make for discontentment among the people. All those who have ‘the welfare of this country at heart, should support any legislative proposal that will do away with unemployment, and make for contentment.
.I endorse the appeal that a number of honorable members have made for more liberal treatment for this great key industry which is of vast importance to us, not only as a means of providing employment for our people, but as a major factor in the defence of our country. We shall have to rely upon this industry in an hour of national emergency. I trust that even at this late hour the Minister will agree to revise the schedule in respect of these items in accordance with the recommendations of the Tariff Board. Many millions of pounds have been invested in this industry in Australia. The Minister has said that he cannot adopt the Tariff Board’s recommendation because the Broken Hill Proprietary Company is not able to supply the whole of Australia’srequirements. I am given to understand that the company will undertake to doso, and as everybody knows it never makes a promise without first making a thorough investigation into the position. It has a reputation for always fulfilling its undertakings. In that respect it islike the Mount Lyell Company in Tasmania. We have been assured that if these increased duties are agreed to the company will not increase the price of its products to the Australian people. In consideration of these guarantees, surely there could be no harm in the Ministeramending the schedule as we suggest. T am not an extreme protectionist. I believe in considering every case on itsmerits. If I consider that an increase of duty is justifiable for business, pins patriotic reasons, I press for it; but if I think that a reduction in duty is desirable,. I do not hesitate to- express my opinion. It would be disastrous for us to allow this great key industry to- suffer on account of our failure to protect certain of its products to the extent of a few shillings more per ton. The Minister’s reasons for refusing to go as far as the Tariff Board recommended, are unconvincing. If he is not willing even now to agree to an increase in the duties, I trust that he will at least accept the suggestion of the honorable member for Wannon (Mr.Rodgers) and postpone the item to allow further inquiries to be made.
Mr.RODGERS (Wannon) [1.7 a.m.]. - The committee is agreed, I believe, that the protection accorded to this great industry under the general tariff is satisfactory ; but we feel strongly that the British preferential duty is inadequate. The Tariff Board is of the opinion, after a most careful inquiry, that certain duties should be imposed, while the Minister and his officers, for certain reasons which the Minister gave, are of the opinion that somewhat lower duties should be granted.. The main reason in the categorical list of eight which the Minister gave for not falling in with the recommendation of the Tariff Board was that hecould not accept the evidence of Mr. Rowe, an expert representative of the Broken Hill Proprietary Company, as to wages costs. The Broken Hill Proprietary Company is quite prepared to standor fall by the evidence which Mr. Rowe gave on this point. It has declared definitely that it requires only such protection as will enable it to meet the disparity betweenthe wages in its works andthose which obtain in the works of its competitorsoverseas. In these circumstances surely the Minister ought to agree to allow thematter to be again investigated. We should not be forced to decide between the Tariff Board and the Minister and hisofficers on this issue. This is one of the great basic industries of the Commonwealth, the magnitude and importance of which it is difficult to overstate. The margin between what the Government and the company consider tobe reasonableprotection is comparativelysmall.The honorable member for Forrest(Mr. Prowse), in the logical argumentwhich he submitted from his point of viewtothe committee against the imposition of further duties on irononand steel importations, stated that the primary producers of Australia would be adversely affected if the provisions of this schedule were approved. I have made a careful investigation into that aspect of the case, and I find that the proportion of the products of the Broken Hill Proprietary Company which is required by our agriculturists is comparatively small. The great bulk of the output of the industry is used in connexion with our railway systems, ports and harbours, and other big public undertakings. An increase in these duties will not seriously affect our agriculturists. I do not see eye to eye with the Minister or with some other honorable members in respect to some of the minor items in this schedule; and I point out to the honorable member for Forrest (Mr. Prowse) that I had a good deal to do, during my term of Ministerial office, with relieving the primary producers of some of the tariff burdens which were then pressing upon them, particularly in relation to wire, wire netting, and galvanized iron. I was largely responsible, after the Massy Greene tariff was in operation, for substituting bounties for the duties on those items. Those duties were as follow : -
These duties I convertedinto bounties which the whole community pays. The present proposals of the Government inrelationtogalvanizediron and tractors will afford greater relief, for which I give the Minister credit. As he shows no inclination to meet the wishes of what I believe to be the majority of the committee, by postponing items 136c to 159, I move-
Thattheitembepostponed because of the disparity between the recommendations that are contained in the report of the Tariff Board of the 11th June,1926, and the proposed duties, and as an instruction to the Government to again submitthemattertothe Tariff Board for further inquiry and report.
Mr.SCULLIN (Yarra) [1.19 a.m]. - I supportthe amendment, andurge the Ministerto acceptit. The facts of the case have been well placed before, tho committee by previous speakers ; but I wish to stress one or two outstanding aspects. There is a conflict of judgment between the two bodies that have investigated this industry, aud an extraordinary position has arisen. Many years ago a Tariff Board was appointed, and subsequently this Parliament declared that all it? evidence should be taker; in public and, together with its report, submitted to us, so that we might have an opportunity to come to a personal judgment. A recommendation has been made in this case. While I agree with others who have spoken that the Government is not bound to give effect to any recommendation of the Tariff Board, I submit that it must advance very strong reasons for disagreeing with the board, p.nd explain why, in this instance, it appointed another tribunal to investigate the industry. On the one hand there has ben a public inquiry, and, on the other hand, a private inquiry. That furnishes a strong reason foi the postponement of these items, and their reference to the Tariff Board for further consideration and report.
– In no other case has a private inquiry been held.
– That practice has not been adopted with respect to any other industry since the Tariff Board was appointed. Although I do not condemn the course that was followed, I should like to know where it’ is likely to lead us if it is continued. 31ow many more boards are to be appointed to investigate industries? If the findings of departmental officers are to be given preference, we may as well disband the Tariff Board.
– It is very unfair to the Tariff Board.
– I can quite imagine members of the Tariff Board wishing to resign their positions. I wish to emphasize one of the reasons which, supports the contention that; the Tariff Board should again make a thorough investigation of the industry. The Minister has related certain facts that are based upon the report of the departmental officers who investigated the, industry. Those facts have been seriously challenged by different speakers iin ihe committee. The Minister made out what appeared to be a most convincing case in regard to pig iron, when he pointed out that the imports of that commodity represented only 2.7 per cent, of the local production. When it is realized that the basic pig iron, which goes straight into steel, is included, and that the imported iron is foundry iron, it will, I think be readily admitted that the percentage of imports is not less than 10 per cent. Another statement which the Minister made was that imports were on the decline and local production was increasing. The figures which have been provided by the industry are to the opposite effect. Those are two grave mistakes which were made by the officers who investigated the matter privately. There is also a serious conflict in regard to the cost of production. That, surely, is capable of demonstration without its accuracy being questioned. We are not in a position to investigate it, but we have a perfect right to ask the Tariff Board to do so. TEat would be a sensible action for the Minister to take. The duties could operate in the meantime, and next year we would have before us the whole of the facts, and be able to come to an intelligent decision. I agree that this is a basic industry, and that if it is not adequately protected, we ought not to say that we are a protectionist country which is desirous of establishing secondary industries. I have read a great deal with regard to the conditions that have operated in Europe since the termination of the war, and I am satisfied that there is no closer corporation in the world to-day than that which is connected with iron and steel. Old enemy countries have come together, and in regard to coal and iron have formed a huge world-wide combine with the object of capturing the trade of the world. Despite the assertion of the Minister that proof cannot be furnished in regard to dumping of foreign goods under the label “ British,” I have not ‘the slightest doubt that those foreign goods are receiving the advantage of the preferential duties. The honorable member for Wannon (Mr. Rodgers) and other speakers, have rightly said that on the basis of the general tariff the industry has been very well protected, but that under the British preferential tariff such is not the case. Preference to Great Britain can be carried too far. f agree with the Leader of the Opposition (Mr. Charlton), the honorable member for Dalley (Mr. Theodore), and others that we might give prefernce to Great Britain when it does not conflict with an Australian industry, but that when it does it simply amounts to giving preference to British manufacturers over those who are established in Australia. What is the result? For years we have been building up a
Tariff wall and inviting the manufacturers of Great Britain to establish their industries in Australia and be safeguarded by our tariff wall against the competition of other parts of the world.
– - We had with us to-day a member of the House of Commons who has come out to Australia with that object.
– Quite so. I can mention a British manufacturer who only eleven or twelve years ago, brought to Melbourne the whole of his machinery and trained operatives and became established in that city. He then proceeded to train Australians to do that special class of work. ‘ To-day, under the British preferential tariff, that industry is being cut out of the business by the British manufacturer who remained in his own country, ls that the way to encourage the British manufacturer to set up his industry in Australia? It is not. When the Minister was in England he announced “ I want the migration of capital and industry. We will give you encouragement to that end.” What has he done? He has brought down a tariff schedule which has on it the brand of preferential trade, to the detriment of Australian industries. What is the use of inviting Britishers to establish their industries iu Australia when preference is given in the Australian market to goods that are manufactured in Great Britain, to the detriment of British firms that have established branches in Australia, to say nothing of the Australian companies. If we are not prepared to establish and maintain industries like the iron and steel industry in such a way that they will be free from the competition of low wage countries, we ought not to declare that it is our ambition to have secondary industries in Australia. The amendment gives the Minister an opportunity to retire from a very difficult position. If he has listened to the debate he must realize that, with one or two exceptions, the committee is unanimously in favour of additional protection. Surely Parliament cannot be thwarted for all time? Under our Standing Orders we are prevented from moving for an increase in the duty proposed. That is a wretched position for any parliament to occupy. But we have the power to postpone an item. I hope, therefore, that the committee will vote for the amendment. This is not a party issue, and it has not been made so since the discussion began. I should prefer the Minister to send the matter back to the Tariff Board with the -request that it investigate the findings of the special tribunal which conducted its enquiries privately. If that is done I am satisfied that we shall have an improved schedule and shall be able to establish the industry on a more solid foundation, thus advancing the progress of this country.
.The honorable member for Wannon (Mr. Rodgers) is generally fairly logical in his arguments, but he appeared to be slightly astray to-night. He took me somewhat at a disadvantage by misinterpreting certain remarks of mine when I had not the opportunity to reply to them, since I was acting as Temporary Chairman. I now have that opportunity. He seemed to infer that I had said that the costly methods of production in’ the iron and steel industry had so affected the cost of farming^ machinery that the burden of that industry fell upon the farmers. I did not refer to farming machinery at all. I first of all referred to the Sydney Harbour Bridge .and the railways in the hinterland of this country. The honorable member for Wannon (Mr. Rodgers) has protested against the borrowing of money. He said that the root of the evil in. this country was borrowed money.’ We have had to borrow a tremendous amount of money foi- such works as bridges and railways, and even this building in which we are housed. That expenditure ultimately, either directly or indirectly, will fall upon the primary producer of this country because he alone is producing an exportable commodity. He is establishing the financial credit of this country and making it possible for us to borrow money. The honorable member for Newcastle (Mr. Watkins) referred to the great advantage that the iron and steel industry conferred upon this country during the war. I am not denying that, but does he know that the wheat-growers conceded over £S0,000,000 to the Empire during the war? What would the Newcastle works or any other secondary industry do without the credit established by “the primary producer? They would have to close down at once. Honorable members seem to appeal very pathetically on behalf of the workers employed at the steel works and in the coal mines. Those men are receiving excellent pay, the highest rates in the world, but no regard is given to the men, women and children who are working on the land producing the real wealth of this country. Honorable members do not seem to think that these people buy the output of the steel works, and then have to compete in the markets of the world with their products. The Leader of the Opposition (Mr. Charlton) wanted to hold up the business of this Parliament in order to censure the Government because of our adverse trade balance. Is it any wonder that there is an adverse balance of trade in. this country when industries are fostered and spoon-fed under the policy of protection? The honorable member for Yarra (Mr. Scullin) pointed out that other nations were co-ordinating and trying to recapture trade lost during the war. With all our raw materials in joal and iron and the great natural protection that we have from the competition of the world, what are honorable members doing to develop them except to go to the old milch cow - the Customs Department? That is the biggest piece of stupidity that I know of.
– We have to protect ourselves from the importers.
– I hope that the Minister will have the backbone to. stick to his argument and not to increase the duty under this item.
.-First of all I should like to answer a remark that was just now hurled across the chamber at the honorable member for Forrest (Mr. Prowse) reflecting upon the importers, who seem to be the subject of undeserved jibes from many honorable members. I served my apprenticeship with the importing and manufacturing company of D. & W. Murray Limited.
– The honorable member does not seem to have lost that influence.
– It was an influence for good. Generally speaking the importing firms did not make the exorbitant profits during the war that they are supposed to have made. I myself was able to buy goods from time to time at a price much below that at which they could be replaced by the manufacturer, and I .in turn gave the benefit of that to the public. I say that, in common justice to a large number of people in this community - men who are honorable citizens and in many cases fought overseas for this country.
– Is the honorable member indigenous?
– I am indigenous to this country, and I have a great regard for it. I should never attempt to belittle it or the Old Country as some people do.
– Does the honorable member know what he is talking about?
– At any rate I did not make one of the most disloyal speeches that has ever been heard in a country district of South Australia. The iron and steel industry is a key industry. Because of that it has received generous treatment and is now to receive yet another instalment. I suggest that that industry would have been in a much better position had it adopted the profit sharing system which obtains in the Wunderlich Steel Company. That company has been free from industrial troubles for a number of years simply because it has carried on the industry efficiently under that system. The trouble in the iron and steel trade is that there has been unnecessary interference with it because of strikes.
– When has therebeen any trouble in the iron and steel industry? The honorable member should not make wild statements.
– The iron and steel industry has been handicapped because of industrial disturbances which have taken place from time to time, not actually in that industry, but in industries upon which it is dependent. It has been suggested that because the Tariff Board has made a certain recommendation the Government should swallow it holus bolus. That would be absolutely wrong. Honorable members opposite would not agree to the Government accepting a recommendation of the Tariff Board, which, in their opinion, provided for an inadequate duty, and so in this case the Government has a right to give full consideration to the board’s recommendation and to take whatever action it thinks fit.
– To do otherwise would be an abrogation of responsible Government.
– That is so. The duty of the Tariff Board is to investigate the conditions of various industries and to make recommendations to the Government. It would be exceedingly dangerous for the Government to accept unconditionally every recommendation of the Tariff Board, and I feel certain that if the committee give’s calm consideration to this matter it will fall in with my view. I am sure that the majority of honorable members are prepared to congratulate the Minister for standing behind the very convincing case that he has put to the committee.
Question - That item 136 be postponed (Mr. Rodgers’ motion) - put. The Committee divided.
Majority . . . . 9
Question so resolved in the negative.
Item agreed to.
Items 152, 154, 155, 157,158, 159, 164, 175, 176, and 179 agreed to.
By adding a new sub-item (g) as follows: - “ (g) Storage batteries suitable for use in motor cars otherwise than for propulsion purposes, ad val., British, 35 per cent.; intermediate, 47½ per cent.; genera],60 per cent.”
Amendment (by Mr. Pratten) agreed to -
That the item be amended by adding to subitem (g) the following: - “And on and after 15th December, 1927 -
Storage batteries suitable for use in motor cars otherwisethan for propulsion purposes, ad val., British, 40 per cent.; intermediate,47½ per cent.; general, 60 per cent.”
Item, as amended, agreed to.
Item. 197 agreed to.
By omitting the whole item (twice occurring) and inserting in its stead the following item: - “204. (a) Kettles and cooking utensils (but not including stoves) of cast iron (tinned or plain), ad val., British, free; intermediate, 15 per cent.; general, 25 per cent.
– I move -
That the item be amended by adding the following: - “And on and after 15th December, 1927 - 204. (a) Cooking utensils, cast iron (tinned or plain), viz.: - Kettles, saucepans, and oval boilers, ad val., British, free; intermediate, 15 per cent.; general, 25 per cent.
Alumimumware and enamelledware, n.e.i., but not including stoves and baths, ad val., British, 35 per cent.; intermediate, 45 per cent.; general, 60 per cent.”
This amendment, the purpose of which is to exclude one or two cooking utensils now on the free list, has been recommended after inquiry by the Tariff Board.
.Seeing that the Minister agrees that the aluminium ware industry needs a higher protective duty against the foreign aluminium ware, I think he will also agree that the duty of 35 per cent. ad valorem on imported British aluminium ware should not remain unaltered. It has already been pointed out that frequently goods which are imported as British are made in foreign countries. I should like the Minister to consider increasing the rate of duty in the British column.
– Increasing the cost of the cooking utensils of the poor !
– If the honorable member for Forrest was not so obsessed by his freetrade views, he would make some study of the industries established in Australia; he would know that one of the first results of the establishment of the aluminium ware manufacturing industry here was a reduction in the price of imported ware. But to the honorable member Australian industry is anathema. He scorns everything made in Australia. He does not know of the splendid work done in the manufacture of aluminium ware in Australia, and of the splendid quality of the ware that is turned out by Australian manufacturers.
– Why do they need a duty of 60 per cent.?
– Because they are afraid of the cheap labour of other countries. Much of the imported ware that comes into close competition with Australian aluminium ware is made in Great Britain and gets the advantage of the preferential duties, and I trust that the
Minister will see his way to increase the duty against the British manufacturer. It is useless to talk of getting British people to invest millions of pounds in Australian industries if, when we get them here, we give them no encouragement to remain here in successful competition with overseas manufacturers. Although much of the aluminium ware that comes in to Australia under the preferential duty is alleged to be made in Great Britain but is not, we know that a great deal of it is made in Great Britain, where there is a close combine competing strongly with Australian manufacturers. I appeal to the Minister to grant the local industry additional protection against this combine.
– It is all right. Sit down.
– By all means, if that is so.
– This industry is a very creditable one to Australia, and all that the Deputy Leader of the Opposition (Mr. Scullin) says about it is quite true. It employs some hundreds of hands and, to my own personal knowledge, has been the means of very considerably reducing the price of aluminium ware. Only last week the Sydney newspapers advertised the further reduction of that product. It is the duty of this committee to assist, as far as possible, such an industry. I therefore ask leave to amend the amendment by providing that the British preferential tariff, in respect of item 204 b be 40 per cent. instead of 35 per cent.
Amendment, by leave, amended accordingly.
.- South Australia is very much interested and busily engaged in the aluminium industry. It is endeavouring to capture a considerable portion of this trade. I have a practical knowledge of the trade, as I worked for seventeen years in it in South Australia. I am indebted to the Deputy Leader of the Opposition (Mr. Scullin) for his successful attempt to introduce a more generous tariff. Although the improvement is not as generous as those in the trade expected, it is certainly helpful.
Amendment agreed to.
Item, as amended, agreed to.
By adding a new sub-item (c) as follows: - “(c) Single lever mortice lock sets, ad val.,
British, 45 per cent.; intermediate, 50 per cent.; general, 00 per cent.”
By adding a new sub-item (d) as follows: -
– The matter of the manufacture of barrel and socket bolts was referred to the Tariff Board, but that board misunderstood the nature of the application and the description of the goods. I believe that the firm principally concerned is making a fresh application. Oan the Minister tell me what has been done in the matter?
– I am sorry that, on account of the complicated work that has come before mc during the last few days, I have had no opportunity to give this matter attention.
– Seeing that these people have suffered an injustice through a mistake on the part of the Tariff Board, I should like to know whether the Minister will undertake, when Parliament next meets early in the new year, to bring the item before the committee and have the omission rectified.
– I am afraid that I can give no undertaking on a matter which I do not fully understand.
Item agreed to.
Items 242 (glass) and 243 (glass, n.e.i.).
.I wish to refer to the item “hoodlights for motor cars.” I have taken a great deal of interest in the development of this industry in Australia, and I was instrumental in introducing the matter to the Tariff Board on hebalf of the manufacturers of Adelaide. I have received a wire thanking me for my efforts in the matter, and I extend to the Minister my appreciation for his consideration to the industry.
Items agreed to.
Item 278 agreed to.
Message received from the Senate intimating that it had agreed to the amendment of the House of Representatives upon its amendment.
Bill returned from the Senate without amendment.
Bill returned from the Senate without amendment.
Debate resumed from 7th December (vide page 2760), on motion by Mr. Pratten -
That the bill be now read a second time.
– I desire to thank the Minister for the attention he has given to my representations in connexion with tractors. It is true that there has been some delay, but that was not the fault of the honorable gentleman. When the request was made to him he paid a personal visit to the factory and saw what was actually being done. The result is contained in this amending bill. This industry, which started a comparatively few years ago, originally imported practically everything. Later it started to manufacture tractors and is now turning out an article which will bear comparisons with anything manufactured anywhere else in the world. Its trade has hitherto been limited, owing to the previous interpretation of the Bounties Act. Last yearAustralia imported tractors to the value of £1,000,000 from America, a trade that should and could be retained in Australia. I honestly believe that, after the passage of this bill, with one slight amendment, we shall establish an industry as important to wheat-growers as was the introduction of the McKay Harvester Company to Australia generally. The makers of this tractor know local conditions, and realize in what respect the imported tractor has failed. It has rectified the weaknesses of the imported article, but unfortunately it has not been able previously to compete outside of Victoria because of the lack of a bounty. The passage of this bill will enable the one firm I have in mind, Ronaldson and Tippett, to make from ten to twenty tractors a week, which will mean a trade of at least £250,000 a year. The oversea manufacturers of tractors are not conversant with local conditions, and are manufacturing an article to cope with land that has been cultivated for hundreds of years. This firm has disposed of something like 150 tractors, and there has not been a defect to the extent of ls. in any of them. I plead with the Minister to make one slight alteration in the bill. I candidly admit that the bill now before the House is as actually asked for by the manufacturers; but they made a slight mistake in their calculations when they informed the Tariff Board that 70 per cent, of the article manufactured by them was of Australian material. Evidently they had not been careful enough in their calculations. “When the bill was introduced they discovered that to secure the bounty, 70 per cent, of the value of the tractor must be Australian made. They found that they could not comply with that condition, the proportion of British made materials being slightly more than 30 per cent. If the bill passes in its present form, their position will not be better than it was before. Even if Australian labour and material do not represent 70 per cent, in value of the tractor, I contend that the firm should still be entitled to the bounty since with a little extra assistance it will be producing at least twenty tractors where previously it produced one. This increased production will lessen the cost of the machine, and will disturb the ratio of value between Australian and British labour and materials. The manufacturers are not in a position yet to make all the engines, radiators, or roller bearings. I hope that when the bill is in committee the Minister will amend it so as to enable the firm to enjoy the bounty. The position will be met by making the bounty payable if British labour or materials represents not more than 40 per cent. instead of -30 per cent., as provided for in the bill. if this is done substantial assistance will be given to an important agricultural industry, the products of which will be largely used throughout the Commonwealth. The local manufacturers are in a’ much better position to supply the needs of local users, and also to give a better service than are the agents of imported machines. I congratulate the Minister upon introducing the bill.
– I cordially support the remarks of the honorable member for Ballarat (Mr. McGrath). No firm has done greater pioneering work than the firm which is established in Ballarat. Hitherto Australian requirements in tractors have been almost exclusively supplied by American, British and oversea manufacturers. Up to the present this enterprising firm has been running the tractor section of its business at a loss. It has persevered until it has produced a tractor that completely meets Australian conditions, and the firm, being located in Ballarat, is easily accessible. I agree that the bill should be amended so as to provide for the payment of the bounty, if the cost of material or parts not produced or manufactured in Australia is higher oy 10 per cent, than is provided for in the bill. That is to say 40 per cent. If the Minister will consent to this amendment he will be conferring a distinct benefit on an important pioneering industry, which will provide considerable employment in the near future.
.- I should like to have some explanation from the Minister as to the reason for not accepting the recommendation of the Tariff Board with regard to the bounty on galvanized iron. At present this industry, which is carried on in my district, is closed down. I understand that the firm was induced to establish the industry in Australia as the result of consultations between the Prime Minister (Mr. Bruce) and Mr. Lysaght in London. The Tariff Board recommended that the bounty should be increased by £2 a ton, but the bill provides for an increase of only £1 a ton.
– The board recommended a deferred duty.
– The firm brought out a number of workmen who are now thrown out of employment. Many of them are living in homes which they are purchasing on the time payment system, and they are much concerned about, their future prospects. , I am satisfied that if any honorable member saw them at work, there would be no talk in this House about laziness or loafing on the part of workmen in Australian industries. The Tariff Board inquired into this matter and made a recommendation which it appears has been cut in half by the Minister, with the result that the industry is now closed down. A deferred duty would not be of much use. What, is wanted is immediate help. Mr. Lysaght told me that whereas in England it was somewhat difficult to secure always the right constituents for the galvanizing, they did not have the same trouble in Australia.
.I should like to know what amount of bounty the Government has paid to these two firms. This proposal represents an increase of 60 per cent, upon the bounty already given to one firm in respect of roofing iron, an important article largely used in country districts. Some years ago this Parliament decided to give a bounty instead of imposing a duty. We are entitled to know what the people of Australia are paying in the way of bounties on these items.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 3 agreed to.
Clause 4 - “(2.) Where the cost of materials or parts not produced or manufactured in Australia represents more than thirty per centum of the total factory or works cost of the traction engine no bounty shall be payable under this Act in respect of that traction engine.”
.- I have listened to the representations made by the honorable members for Ballarat (Mr. McGrath) and Wannon (Mr. Rodgers). The Government is seized with the importance of this industry. There is a considerable importation of foreign made tractors to Australia. It is highly desirable that the Australian industry should be encouraged. The Ballarat firm mentioned by the honorable member (Mr. McGrath) has been struggling for years. It has received assistance only to the extent of a few hundred pounds. Parliament would gladly have given tens’ or scores of thousands of pounds in this way to assist the industry in Australia)-. It is the desire of the Government that it. should be encouraged. I move therefore -
That the n ord “ thirty “ be omitted with a view to insert in lieu thereof the word “ forty.”
Amendment agreed to.
Clause, as amended, agreed to.
Clause 5 (Amendment of Schedule).
– Will the Minister for Trade and Customs inform me why the recommendation of the Tariff Board in respect of galvanized iron has not been adopted by the Government? This proposal is for a duty of about 20s. per ton below that recommended by the board. The industry was established in Australia largely on an undertaking given by the Prime Minister when he was in England that it would be adequately protected.
– The Tariff Board report in that connexion states -
In conclusion, the Tariff Board desires specially to invite attention to the circumstances under which the industry under review was originally established. The Commonwealth Government, as a result of the serious shortage of galvanized iron during the war, after negotiation with tlie representatives of John Lysaght Limited, Bristol, directly encouraged the establishment of the industry in Australia. At a later stage the Prime Minister (Mr. Bruce), when in London in 1023, had a conference with representatives of John Lysaght Limited, Bristol, and gave them the assurance of the Commonwealth Government that, provided the company proceeded with the further equipment of ils plantin Australia to the extent of making it capable nf meeting tlie whole of the Australian requirements, the industry would, after report by the Tariff Board, be adequately protected.
, - I explained the position frankly when I made my second-reading speech in introducing the bill. 1 pointed out that the report of the Tariff Board was based ou the assumption that the company would be able to supply much more of our requirements in galvanized iron, which amounts to about 100,000 tons per annum. At present the output of the works is only 28,000 or 30,000 tons per annum, which is little more than half the total requirements of the State in which the works are established. Under these circumstances it would not be a fair thing to pay an extra bounty, on galvanized iron which was sent to the other States for the purpose of paying freight.
Clause agreed to.
Preamble and title agreed to.
Bill reported with an amendment; report adopted.
Bill read a third time.
Motion (by Mr. Bruce) agreed to -
That the House at its rising adjourn until )’l H.rn. this day.
Motion (by Mr. Baucis) proposed -
That the House do now adjourn.
.When the Land Tax Assessment Bill was being considered in committee I was given an assurance by the Treasurer that if I withdrew an amendment which I had proposed with the object of excluding from taxation land actually used for agriculture, he would consider having it inserted when the bill was before the Senate. On the strength of that assurance, I withdrew the amendment, although I was of the opinion that, owing to the heavy burdens that are placed upon agriculturists to-day their land should be exempt from land taxation. The amendment was not made in the other place, and the Treasurer has not made any explanation in respect of it. I regard this as amounting almost to a breach of faith.
– I shall draw the attention of the Treasurer to the remarks of the honorable member, but I do not think that he would desire to persist in his suggestion that there has been a breach of faith, at least, until after he has ascertained the facts from the Treasurer.
– In fairness to the Treasurer, I ought to have said that he mentioned to me after the bill was returned from the Senate that no message had been sent to that chamber recommending the insertion of my proposed amendment.
Question resolved in the affirmative.
House adjourned at 2.38 a.m. (Thursday).
Cite as: Australia, House of Representatives, Debates, 14 December 1927, viewed 22 October 2017, <http://historichansard.net/hofreps/1927/19271214_reps_10_117/>.