12th Parliament · 1st Session
Mr. Speaker (Hon. NormanMakin) took thechair at 11 a.m., and offered prayers.
Investigationby Mr. Coleman
– I ask the Prime Minister whether the Government will consider the advisability of terminating the authority of the honorable member for Reid (Mr. Coleman), who has had no administrative experience, to inquire into the administration of Australia House ?
– The Government asked the honorable member for Held while he was in London to make a preliminary investigation of the organization of Australia House so that an independent report would be ready for me before I reached London. His examination is to occupy not more than four weeks, probably only three weeks, and this report will be sent to my department for perusal, so that the departmental observations thereon also will be available to me. Whils t the honorable member has not had administrative experience he is chairman of the Public Accounts Committee. The Government wants an investigation of Australia House by an independent authority, assisted, of course, by the officials in London, and has no intention to terminate the inquiry.I hope that the small expense involved will be more than repaid by the saving that will result from a reorganization of Australia House.
– Will the honorable member for Reid return at the end of the inquiry?
– When his inquiry is completed he will cease to draw expenses until he goes to Geneva as a delegate to the conference of the League of Nations Assembly.
– Did the Minister for Trade and Customs (Mr. Fenton) while in London investigate the organization of Australia House?
– No. My multifarious other duties kept me fully occupied.
– Will the Minister say whether there is any truth inthe cablegram published in Australia that at one period he was so tired of his stay in London that he declared that unless the Naval Conference came to an early decision he would leave for Australia without awaiting the completion of the conference, as he had nothing to do?
– I would be sorry to accept responsibility for every statement published in the press regarding myself.
Adminisrtation by Mr. Brown.
asked the PostmasterGeneral, upon notice -
Departments, Water Boards, and all other public bodies?
– The answers to the honorable member’s questions are as follow : -
Australian Broadcasting Company - Relay Transmitting Stations
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Health, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Health, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
What are the names, occupations and amount of fees paid to the representatives of the Government on the Board of Commonwealth Oil Refineries Limited?
– The representatives of the Commonwealth on the board of the Commonwealth Oil Refineries Ltd. are: - Sir Robert Gibson, chairman of directors, director; Sir Nicholas Lockyer, retired civil servant; Hon. Edward Findley, printer. The directors do not receive fees. Under the articles of association of the company each director (other than the managing director) receives a salary of £300 per annum.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
Subsidies - Grantsof Equipment
asked the Minister for Defence, upon notice - 1. (a) How many Moth ‘planes have been issued to the Aero Club, Sydney?
What charge, if any, was made for machines and parts?
– The information is being obtained, and a reply will be furnished to the honorable member as soon as possible.
asked the Minister for Defence, upon notice -
Is a subsidy paid by the Government to
– The information is being obtained, and a reply will be furnished to the honorable member as soon as possible. .
asked the Treasurer. upon notice -
– The information desired is set out in the following statement : -
Grants to States
asked the Treasurer, upon notice -
Whether the Victorian State Government has yet received the whole of the money apportioned to that State by the Federal Government for unemployment relief work; if not, can he inform the House as to what amount is still available to that State when application is made for same?
– No. Victoria’s share of the £1,000,000 provided for roads work was £180,000. Of that amount £121,597 2s.11d. has been paid to the State, and £58,402 17s.1d. is still available. Yesterday I advised the House as to the position in regard to the grant of £1,000,000 which the Commonwealth recently undertook to make to the States for the relief of unemployment. Certain information is desired from the States. When that information is furnished the money will be made available in monthly instalments.
asked the Treasurer, upon notice -
How much of the £2,000,000 federal grant for the relief of unemployment has been asked for by each of the States?
– The position in regard to the £1,000,000 to be provided for roads work is as under: -
As regards the grant of £1,000,000 which the Commonwealth recently undertook to make to the States for the relief of unemployment, the position is that the Commonwealth is awaiting the receipt from the States of certain information in regard to the relief works to be undertaken.
Compensation to Dismissed Officers
asked the Minister for Defence, upon notice -
When naval officers of the rank of lieutenant and lieutenant-commander were retired or permitted to resign from the Royal Navy in 1922, what compensation was given to them by the British Government?
– Inquiries will be made, and a reply will be furnished to the honorable member as soon as possible.
Heinz and Company
asked the Minister for Trade and Customs, upon notice -
Did he receive a protest from the Amalgamated Food Preserving Employees Union, claiming that they are greatly affected by the action of the Acting Minister (Mr. Forde) in lifting the embargo on imported preserved vegetable products, thereby admitting American foodstuffs after the manufacturers of Australia had enlarged their plant and machinery, and employed more men to satisfy the whole local market with local production and by local labour ?
– Such a letter was received, but it made no mention of manufacturers having enlarged their plant and machinery, which was impossible within the time that had elapsed between the date of the prohibition and the date of the permission. It is not true that they have been adversely affected. As a matter of fact, the permission granted, which wasfor a small percentage of their annual importations of the lines affected, has not yet been availed of. Furthermore, the company in question has definitely stated, that when the Australian factory is in operation approximately 350 persons will be employed manufacturing not only the lines that were affected by the prohibition, but all their other lines, sold on the Australian market, and, in addition, products for export to the Eastern markets and New Zealand.
asked the Minister for Trade and Customs, upon notice -
– The information is being obtained.
asked the Ministerfor Trade and Customs, upon notice -
– The primage duty applies with insignificant exceptions to all imported goods except bullion and specie, and will, therefore cover the articles enumerated.
Payment to Penfold’s Wines Limited
asked the Minister for Trade and Customs, upon notice -
– The information is being obtained.
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
– On the 15th July, the honorable member for Moreton (Mr. Francis) asked me the following questions, upon notice: -
– Yesterday the honorable member for Adelaide (Mr. Yates) addressed to me the following questions, upon notice -
I am now in a position to inform the honorable member as follows : -
Motion (by Mr. Scullin) agreed to -
That the House, at its rising, adjourn until 10 a.m. to-morrow.
In Committee of Ways and Means:
Consideration resumed from16th July (vide page 4221) on motions by Mr. Forde -
That in addition . . . there be imposed a special duty of customs at the rate of 50 per centum on goods as specified (3rd April, vide page 819).
That the schedule to the Customs Tariff 1921-1930 be amended . . . (19th June, vide page 2947 ) .
That the schedule to the Excise Tariff be amended . . . (19th June, vide page 2997).
That in lieu of the special duty specified in the resolution of 3rd April there be imposed a special duty at the rate of 50 per centum on goods as specified ( 19th June, vide page 2999”) .
And on motions by Mr. Fenton -
That the schedule to the Customs Tariff 1921-1930 be further amended … (9th July, vide page 3904).
That the schedule to the Excise Tariff 1921- 1930 be further amended . . . (9th July, vide page 390(i).
That in addition . . . there be imposed an ad valorem duty of customs (primage duty) at the rate of 2½ per centum on all goods which are entered for home consumption (9th July, vide page 3906).
Upon which Mr. Gregory had moved by way of amendment -
That after the word “That” (first occurring) the following words be inserted: - “ consideration of the Tariff be postponed with a view to determining what action is advisable with a view of granting relief to the producers and people of Western Australia whose progress and prosperity are seriously imperilled by the high tariff policy of the Commonwealth.”
.-I agree almost entirely with the observations of the honorable member for Wimmera (Mr. Stewart) regarding the procedure of presenting tariff schedules’ to Parliament. The Tari if is not only a feature of economic policy, it is an instrument of taxation, and the” responsibility for its application should rest entirely upon the Parliament and not upon the executive. . I know that there is ample precedent for allowing tariffs to operate for some time in order to get some indication of the incidence of new duties before asking Parliament to come to a final determination upon them. Nevertheless,.! believe that the nation has a right to look to Parliament for an early and final decision regarding proposed taxation. However wise in some respects may be the practice of seeking experience of customs duties before definitely enacting them, it gives the executive too much authority, and is in principle an infraction of the responsibility of this Parliament for the imposition of taxes.
Throughout the history of federation the people have regarded tariffs as an important and fundamental feature of federal policy. There have been, so far as I can learn, seven previous major applications of tariff policy, with, on the average, equal intervals between their appearance. About six years elapsed between the introduction of the Kingston tariff and that of Sir William Lyne. Six years after that what is generally known as the Tudor tariff was introduced, and another seven years passed before the introduction of the Massy Greene tariff in 1920. The schedule was amended in important respects in 1922, when Mr. Rodgers was Minister for Customs. Four years later Mr. Pratten brought “down his tariff schedule, and he amended it within two years. It is correct, as the Deputy Leader of the Opposition said, that the major responsibility for the fiscal policy of this nation is to be laid at the door of the party with which he is associated, and with its progenitor, the Liberal party. Responsibility for the use of the tariff as a feature of government, and an important means of taxation, belongs to honorable members opposite, and to the party to which they belong. The Deputy Leader of the Opposition emphasised the difference between the present tariff schedule and those previously in operation, but’ he admitted to me that had his government remained in office, and had he continued as Minister for’ Customs he would have amended the tariff in the direction, I understood him to suggest, of imposing higher duties.
– I said that any amending tariff I introduced would bear no resemblance to the present schedule either in the manner of its making or in its intensity. The honorable member should consult Hansard to learn what I did say.
– I have no need to look up the record. The honorable member yesterday said two things : First, that his party had given to Australia the measure of protection it now enjoys.
– Not that it now enjoys.
– Secondly, the honorable., member said that the whole history of protection as far as it applied in this country was a record of the changes made in the tariff by the party of which he is a member. . I then asked him what would have been the position if he had continued in office, and he said he would have brought down an amending, schedule.
– Hear, hear ! .
– I then asked him whether the amendments would have taken the form of a reduction of duties, and. he did. not say that it would.
– I said that it would probably provide for some increases and some reductions.
– The present, schedule provides for some reductions. Certain commodities are exempted from the payment of duty.
– Any amended tariff introduced by me would not have set up wholesale monopolies.
– It is of no use for the honorable member to wrangle with me on this point. If there are monopolies they are the result of the fiscal policy pursued by the last government. They have not been incubated since this Government came into power. If there is restraint of trade, if there- is anything inherently wrong with the system of protection which operates here,’ it is due to the policy which the party of the honorable member carried into effect. He cannot say, as the honorable member for Swan (Mr. Gregory) has said, that corruption is infecting the commercial life because of our protectionist policy, and at the same time claim, as he has claimed-
– Who said anything about corruption?
– The honorable member for Swan.
– I did not say it.
– I wish to deal with the criticism levelled against this schedule, and I am taking it all in one sweep. The Deputy Leader of the Opposition dealt with the subject according to economics, but honorable members in the Country party corner, who were partners and collaborators with the Nationalist party when it was in power, seek to attack the schedule by making charges of corruption. Honorable members opposite fire two barrels at the schedule. In the city constituencies the attack is such as to appeal to the manufacturers, while in the country electorates an appeal is made to the prejudices of the primary producers. When answering criticism of the tariff I find that I have not only to meet the objections of the Deputy Leader of the Opposition whose remarks are tempered with respect for the great metropolitan constituencies in Melbourne and Sydney, but must also repel the attacks of the honorable member for Swan, who represents almost exclusively primary producing interests. Moreover, I have to contend with the right honorable member for Cowper (Dr. Earle Page), who is itching to demonstrate the fallacy of all the tariffs with which he has ever been associated. I have not onlyto deal with each of these separately, but to consider how, when compounded, they affect the policy of this party and its influence on the country.
– Does the honorable member approve of this schedule?
– I shall discuss this schedule presently. I propose to quote what the Tariff Committee said about the schedules which the Deputy Leader of the Opposition has quite properly said were the work of his party. They were evolved in collaboration with the Country party which he described yesterday, inadvertently perhaps, as the protectionist country party. It would be ridiculous for the Country party to deny that ever since 1922 it has played as powerful a part in increasing duties on commodities entering Australia as has the party with which the
Deputy Leader of the Opposition is directly associated. But for the coalition of those two parties, however much they may sing the same words to different tunes in different parts of the country, they could not have kept in their hands the reins of government practically ever since the war. The Massy Greene tariff schedule could not have been enacted without the active participation of the Country party, while for that of the late Mr. H. E. Pratten, the right honorable member for Cowper must accept direct ministerial responsibility.
– We fought the Massy Greene tariff for two years without any assistance from the Labour party with the exception of the honorable member for Angas (Mr. Gabb).
– The Tariff Committee’s report signed on June 20, 1929, deals with a period during which there was no interference with tariff policy by a Labour Government, nor had there been any such interference since 1914. This committee, which was appointed at the instance of the late Prime Minister (Mr. Bruce), said that some applications for the extension of protection had been wasteful, and had cost more than the benefits gained. If that is an argument against the present schedule, I have only to remind honorable members that the same criticism is valid against previous schedules.
– Two wrongs do not make a right.
– Honorable members opposite must take their own medicine. They cannot change their attitude towards our fiscal policy because they change their positions in the House. Not only did the Governments supported by honorable members opposite raise the tariff wall very substantially, but they did so, not so much to afford protection to Australian industries as to substitute indirect taxation for direct taxation. They departed from the fundamental democratic principle that taxation shall be levied according to the capacity of citizens to pay. The evidence that the last Government made such a change is overwhelming. The rate of direct taxation per head was reduced considerably during the régime of that Government, while the rate per head of indirect taxation was increased. The best proof that the tariff amendments of the last Government were not designed for the protection of Australian industries, however much the Deputy Leader of the Opposition may desire the country to believe that they were, is found in the fact that actually they did not have the effect of protecting industry. The volume of imports rose consistently from 1922 until 1929. Even though the Bruce-Page Government was not in office for the whole of 1929-1930 we know that the momentum of public policy goes on for a period’ after those responsible for it have ceased to direct the affairs of government -
Tlie evil that men do lives after them;
The good is oft interred with their bones. lu 1922, which was a tariff year, the value of imports into Australia aggregated £103,000,000. Although the tariff allegedly had been designed to protect Australian manufactures against overseas competition - that is, against the products of countries in which labour conditions are said to be not so costly as they are in Australia - it will be found that in 1925 the total value of imports to Australia was £157,000,000, an increase of practically 50 per cent, since 1922. There was a slight drop in 1926, which also was a tariff year; but in 1927 the upward movement continued until it reached a total of £164,716,000. There has since been a falling off ; and for the year ended the 30th June, 1929, the latest year for which I can obtain authoritative figures, the total value of imports was £143,62S,000. That is to say, from June, 1922, to June, 1929, our imports under a succession of tariffs imposed by an administration for which the Deputy Leader, of the Opposition claimed credit, jumped from £103,000,000 to £143,628,000.
There is another matter that I should like to emphasize. The year 1922 was a peak year for world prices of manufactured goods, while in the year 1929 a considerable portion of the downward curve had already been traversed. Therefore, although the £143,628,000 represents an increase of only 50 per cent, in terms of money, if allowance is made for the reduced price level in 1929 compared with 1922 it must be conceded that the volume of imports increased to a much greater extent. Then again, the fact was revealed in the budget speech that the Treasurer (Mr. Scullin) delivered last week, that during that six-year period, excluding bullion and specie, our exports fell short qf our imports by £70,000,000. There is no justification for the claim of the Deputy Leader of the Opposition that the last Administration would have been able to correct the position by means of its tariff policy, even with the amendments that he said it proposed to make, but the nature of which he did not give us an opportunity to apprehend. The honorable gentleman went on to say, to the accompaniment of cheers from certain honorable members opposite, that had the last Government continued in power it would have righted the adverse trade situation by allowing the exchange rate to effect the requisite correction. Any such action would be an entire evacuation of parliamentary responsibility in a matter like this. Who fixes the exchange rates? The result, would have been to leave to banking institutions the determination of *thc extent to which the trade balance should be adjusted. The honorable gentleman would hand over this important national function to those who are engaged in business for the purpose of making profits.
– The operation of exchange rates is more or less automatic everywhere.
– Exchange is a relationship that exists between commercial communities; it arises in the ordinary process of business. But it is subject to arbitrary interference, in the same way that trade vends, rings and cartels can arbitrarily affect the price of goods irrespective of the law of supply and demand, although the principle of that law operates all the time.
Let me give some figures to fortify the point that I made earlier that customs and excise duties were imposed in order to increase revenue and not to protect. Australian industries. From the 30th June, 1920, to the 30th June, 1929, the revenue that the Commonwealth collected by means of customs and excise duties was practically doubled, the respective figures being £21,574.000 and £41.058,000. The indirect taxation per head of the population rose from £4 2s. 2fd. to £6 9s. 7d. Yet, with that staring them in the face, honorable members opposite have the hardihood to complain in the press about the increases of taxation that this Government proposes with a view to the correction of the serious economic position in which Australia finds herself to-day. I make the further observation that during the period that this enormously increased taxation per head was being collected by the Government that honorable members opposite supported, that Government had large surpluses, not in one year only, but in a number of years. During the whole of that time it stressed the importance of the primary industries of Australia, and declaimed in the rural electorates regarding what would happen to the primary producers if ever the Labour party obtained power in the Commonwealth Parliament. Yet at the same time it was levying this enormous indirect taxation upon themen, women and children who were engaged in those primary industries! In 1926-27, the peak year, the revenue from customs and excise was £43,500,000, equal to £7 2s. 6½d. per head of the population. Honorable members opposite now allege that the tariff schedules that have been brought down by this Government impose an unfair and improper burden upon the primary industries of Australia. What sort of a burden was imposed by them in that year?
– At that time the Leader of the Country party was Treasurer of Australia.
– That is so. If at that time there had been a world situation such as exists to-day, with falling prices on the world’s markets for our primary products, what would have been a fitting description to apply to the burdens of taxation then imposed upon the primary producers? Those burdens were imposed by the political party that the primary producers sent to this Parliament to reduce them.
There is an important question of national policy that must be considered in connexion with the tariff. I do not, acceptwithout reservation a great deal of what is said in connexion with the effects of tariffs generally. But I have come to the conclusion that every nation in the worldno matter to what extent it may accept the philosophy of economists that freetrade is the ideal commercial arrangement, has none the less found freetrade utterly unworkable. There is no such thing as freetrade. Every country has found it imperative, if not as a matter of permanent policy, at least as an expedient to tide over an adverse situation, to impose duties either for revenue purposes or for the purpose of safeguarding certain industries. The United Kingdom derived an advantage from the fact that it was the first country in the world to apply machinery to the process of manufacture. It had available enormous power resources, and cheap labour. It was further assisted by the fact that its industrial development coincidedwith the most active era in the history of British colonization. An enormously increased productive capacity was developed side by side with the opening up , of new markets almost annually. Britain had the world to exploit, and thereby obtained powerful assistance in the disposal of the results of its ever-increasing efficiency. But since that period, in which the United Kingdom held the advantage that industrial leadership always gives, two other great countries have emerged into the cosmos of inindustrial competition; I refer to Germany and the United States of America. Those two countries found that they could not develop their manufactures to an extent that would enable them to become front rank industrial powers, unless they ensured to their own manufacturers the monopoly of their own market. In a variety of ways, either by subsidies or the imposition of tariffs, they have wet-nursed their secondary industries. It is too late in the day for us to argue that this is an uneconomic arrangement.
That brings me to a point in which I have been interested for some time in connexion with other measures. I find inthe introduction to the report of the economic committee that investigated the tariff an epigrammatic phrase taken from a letter that was written by Alfred Marshall to Louis Fry in 1914. It reads -
My favourite dictum is: Every statement in regard to economic affairs which is short is a misleading fragment, a fallacy or a truism.
The meaning of that is, that economic subjects are extraordinarily difficult to define in set terms. When honorable members opposite say that the tariff is an uneconomic, instrument, in that it adds to the cost of production, they do not dispose of the question. It does add l,o the cost of production. I frankly - and, I hope, with a due regard for facts - concede that any agency - whether it be shorter hours, higher wages, increased taxation, greater transport charges, higher interest charges, or anything else - that adds to the cost of production, inevitably raises the price level.
– Did not that committee report that the tariff had reached the economic limit?
– The tariff committee, the British Economic Mission, and the Development and Migration Commission, all of whom have reviewed this question from time to time, have said in effect that no case has been made out to show that Australia could have developed its industries under freetrade as effectively as they have been developed, and they were all in agreement that Australia could not have carried its present population had it not resorted to the expedient of tariff protection. The freetraders in this Parliament will find neither solace nor comfort in the report of the British Economic Mission.
– Where are the freetraders in this Parliament?
– In Western Australia. The honorable member for Forrest (Mr. Prowse) says that he is a freetrader.
– What does the honorable member for Fremantle say that he is?
– The Labour party’s fiscal policy is so clearly defined that the statements I make here will also be made in Fremantle or in any other part of the Commonwealth. As I have said, Germany and the United States of America had necessarily to develop their industries under some form of protection. We should remember that in many respects the conditions in Germany and in the United States of America are similar to those in Australia. Those countries have what may generally be termed federal systems of government with a distribution of legislative authority. They, too, have fiscal anomalies, and it appears that in ail federal legislative systems there is an incapability of providing a protective policy that will apply equitably over the whole territory controlled by a federation. I say with perfect candour that the tariff policy of Australia, like that of the United States of America, has favoured certain geographical areas at the expense of others. This arises because of the distribution of industry, because certain commodities have a profitable local market, and the products of some other industries must be sold in the markets of the world. The middle west of the United States of America, therefore, suffers a3 a result of the fiscal policy of that country, in the same way as do the primary industries of Australia in consequence of our protective policy. It seems extraordinary that Australia should have become a nation politically before becoming a nation economically. In such circumstances anomalies and inequities must arise, causing discontent in certain portions of the Commonwealth owing to the application of a policy which cannot be applied equitably. Subsidies to Australian industries in the shape of bounties amount to about £36,000,000, which is equivalent to £6 per capita. That is the figure determined by the Tariff Committee, which was reached in this way : The committee said that the production of manufactured goods in Australia cost about £26,000,000 more than importations of similar goods, and that the consumption in Australia of the production of primary industries cost about £12,000,000 more than would be the case if free importations were available. I have not been able to cheek those figures, but the general conclusion of the committee was that the effect of our fiscal policy is to raise the cost of living in Australia by about 10 per cent. About £150,000,000 worth of Australian production is able to raise the ‘price of commodities, but the balance is incapable of doing so. That £150,000,000 represents about 40 per cent, of the total amount available for commercial exchange. I have said that the British Economic Mission, the Tariff Committee, and the Development and Migration Commission have expressed the view that our economicpolicy is not fundamentally unsound. I submit, with, a certain amount of justification, thatwe have to develop a continent for the occupation of the white race. This country possesses certain physical characteristics which distinguish it from many other countries. Furthermore, its comparative isolation, in the sense that it is separated by immense distances from other countries, makes it unique both physically and economically. What was the hope of the founders of federation? They had - I say this to my friends on this side of the chamber- - not only to endeavour to create an economic and political unity “in Australia, and, in so doing, to establish, as it were, a national barrier against the products of other countries; but also to establish absolute internal freetrade. This is an extraordinary paradox. If protection is necessary in order to develop Australian industries in the face of world competition, obviously those States, such as Tasmania and Western Australia, which are separated by distance from the more populous centres, must be at a disadvantage. If honorable members on this side of the chamber are right in their philosophy, we cannot expect the manufacturers of Western Australia and Tasmania to successfully compete for trade within Australia with the manufacturers in Victoria and in New South Wales any more than we can expect the manufacturers of New South Wales and Victoria to operate effectively under a freetrade policy against the manufacturers in Great Britain or in the United States of America. The fiscal policy, which has been pursued since the inception of federation, is inevitably bound to result in an unfair distribution of its benefits. This Parliament has been asked from time to time, to make special grants to certain States in order to equate the disabilities which our national policy has imposed upon them. From my own study of the subject, I agree entirely with the views expressed from time to time that South Australia, Western Australia, and Tasmania do not derive anything approaching the same advantage from our fiscal policy as do Queensland, Victoria, and New South Wales. Subsidies to protected production, taking all forms of assistance into account, per head of population in each of the States the year before last worked out in this way : - Queensland, £8; Victoria, £7; New South Wales, £5.5; Tasmania, £4; South Australia, £3.7 ; and Western Australia, £3.6.
– What would be the amount per capita for Western Australia, including special grants?
– I have not the figures. The specialgrant for this year is - I speak from memory- - £360,000.
– There is also the grant in connexion with the Wiluna gold-mines.
– I think the special grants would increase the amount by about 16s. per capita. Surely it is not suggested that the special grants entirely overcome the disadvantages which Western Australia suffers as a result of our fiscal policy. Those grants were given not solely in consequence of disabilities which that State experiences as a result of our fiscal policy. As other important considerations are involved, it would be unfair to take the whole of the grants into account in thatrespect. Tasmania, Western Australia, and South Australia, which derive less benefit from our fiscal policy than the other States, have, from time to time, justified their claims before the investigating authorities. I quote the following opinion of the Tariff Board with respect to Western Australia as it is affected by the tariff, which appears in paragraph 128 of the report of the Royal Commission on the Finances of Western Australia: -
Whatever additional cost the policy of protection may add to the price of goods and material imported by the Australian consumer, the citizens of the eastern States gain as a compensating advantage, the presence of a large production and manufacture. Such is not the case with Western Australia, which is so placed that at present it has to bear whatever burden may arise under the protection of tariff without reaping any of the accompanying advantages.
If I remember aright, Mr. Commissioner Higgs was strongly in favour of the development of Australian industry, and espoused the policy which the Deputy Leader of the Opposition (Mr. Gullett), in his speech yesterday claimed to be one of the great achievements of his party. ‘ Paragraph 129 of that report reads -
Your commission is of opinion that if the State of Western Australia had not joined the federation, that State might have- imposed customs duties, partly protective and partly revenue-producing, and derived advantage therefrom ;
– He was a Treasurer in a Labour Ministry. Why drag him in ?
– Because he was the chairman of a royal commission which reported upon the effect of our fiscal policy upon Western Australia. Among the distinguished achievements of the Government of which the Deputy Leader of the Opposition was a supporter, was the appointment of this gentleman as chairman of that royal commission. The report continues - that, having joined the federation, whatever benefit the Commonwealth protectionist policy may have conferred upon other States of the Commonwealth, it has not benefited the Statu nf Western Australia; that the primary producers of the State of Western Australia have to pay more for their agricultural machinery, &c, than the primary producers of the eastern States ; that the primary producers of the State of Western Australia have not the benefit of home markets like Sydney, with its 1 ,008,500 population, or Melbourne, with its 885,700 population - home markets of such value that three-fourths of the primary products of New South Wales and Victoria, other than wheat or wool, are consumed within those States; that the primary producers of the State of Western Australia have to sell their products in the markets of the world; that it is impossible to give the primary producers of Western Australia relief by way of reduced customs duties without injuring the secondary industries of the eastern States; and that the only effective means of removing thu chief disability of the State is to restore to the State, for a period of years, the absolute control of its own customs and excise.
– What is the date of that report?
– It was ordered to be printed on the 23rd September, 1925. Curiously enough the case prepared for Tasmania is in almost identical terms. The proponents of the case, including economists and representative State citizens, reported -
Evidence of unequal effects of the tariff as between the States is given in the reports of tlie commissions which investigated the claims of Western Australia and South Australia, for Commonwealth assistance. The Royal Commission on the Finances of South Australia (report,’ paragraph 45) states its conviction, that inequalities do exist although they refuseto accept measurements of the burden.
Any measurement of that burden is bound to be more or less inexact. At best only an approximation can be arrived at. They further stated -
They quote the case of the southern Statesof the United States of America to show that this inequality of incidence is inherent in all federations.
They then refer to the fact that I have already mentioned, that the Royal Commission on the Finances of Western Australia had come to the same conclusion. The Tasmanian committee urges that the State depends to a large extent on primary production and the electrolytic zinc industry, which is an exporting industry, bearing the cost of production without receiving any assistance whatever.
– What is the honorable member demonstrating?
– I am trying to demonstrate that the fiscal policy of this nation has operated since federation with the concurrence of all parties in this Parliament. I am endeavouring to show that it is a sound national policy, but that it operates unjustly in respect of certain sections within the nation. I hope to show that the federal policy of providing special grants for certain States is inevitable, because of the application of the tariff policy now under discussion. We cannot expect a few States or sections of the community to pay the price of national development. Benefits to the nation as a whole should not involve special contributions by sections or industries. There must, in effect, be, as a sort of corollary to the fiscal policy of this country, a compensating policy of rectification for the industries and States that do not participate in the nation’s benefits. Among the many features of this tariff is its emergency feature for the correction of the balance of trade. I agree with the contention that it would have been wise to separate that feature from the others, but -still the items concerned are in the schedule as a whole, and can be picked out.
– At least, we hope so.
– There is a lot of “hope” about this tariff.
– The Liberal party hoped, in 1902, that it had provided abundant protection against the storms of world competition. Only the other day the honorable member said that had the Bruce-Page Government remained in office, he, as Minister for Trade and Customs, would have altered the tariff. In that case the hope of the honorable member died a natural death.
– The tariff policy of the Nationalist party did not increase unemployment by over 5 per cent. in six months.
– Does the honorable member suggest that any one policy could do that?
– It has done it.
– Does the honorable member audaciously say that the recent enormous increase in unemployment in Australia is the direct consequence of tariff schedules brought down by this Government ?
– Almost entirely.
– It has been responsible for the hopeless dislocation of industry and commerce.
– I had hoped that we would discuss this subject on somewhat sound premises. If honorable members opposite really believe that the unemployment now rife in Australia is the outcome exclusively-
– Almost entirely.
– Does the honorable member urge that the diminution of the national income by £60,000,000 in one year has not contributed to the growth of unemployment?
– I do not.
– Yet the honorable member has said that the tariff policy of this Government has been “almost entirely “ responsible for the existing unemployment.
– I stick to my statement.
– Do honorable members urge that the tremendous diminution in the national income of £60,000,000 within one year has had only a slight effect upon unemployment?
– Income has diminished with awful rapidity since this Government instituted its tariff policy.
– The effect of any policy is not immediately felt. The income of this nation did not fall last year to any great extent, but it has fallen enormously this year. May I answer the honorable member, not by quoting figures, but by reminding him of what he should remember himself, that, according to the budget statement presented last week, the revenue from income taxation collected last year did not show that relationship with the fall in the national income, which a reduction of £60,000,000 should make manifest.
– The honorable member cannot; have it both ways.
– The honorable member might even argue that the £70,000,000 of adverse trade balance was not the fruit of the Nationalist party’s policy. Bur if he does that, he cannot also argue that it has no relationship whatever with the causes of unemployment.
– But that is overa period of six years.
– Of course. We have to find £70,000,000 to make good our obligations overseas, and, as a matter of fact, if the Treasury officials were in a position to give the exact amount, it would be found that the real financial commitments of this nation, which are immediately collectable overseas, would approximate, almost to a decimal point, to £70,000,000, which represents the difference between our exports and imports during the period that the Bruce-Page Government was in power.
– The honorable member should be in the Treasury.
– I am at least able to know that two and two make four, and that four and one make five. I am able also to understand that a policy which has been in force for six years, and which leaves us at the end of that period owing £70,000,000 to tbe world, cannot be said to have beena huge success. Inevitably, if in the next year there are pains and penalties imposed upon the country generally to make good this deficiency of £70,000,000, those responsible should bear them without flinching. Our obligation; have to be faced, and I should refuse to support a government that sought to evade its duty. Parliament should do the manly thing and meet its obligations in regard to Australia’s national debt. The honorable member for Henty (Mr. Gullett) is continually attacking this Government because of its alleged wasteful expenditure, but he must have known that this country was getting further into debt at the time he wrote a press article, the keynote of which was that we should expend £50,000,000 bravely.
– That was nearly ten years ago.
– I also remember a somewhat impassioned speech by the honorable member for Henty (Mr. Gullett) about a tragic Treasurer.
– I have been urging that our fiscal policy has many inequalities in respect of certain sections of the community. Western Australia occupies, among Australian States, a unique position in respect of trade. Honorable members opposite have made comments about our tremendous adverse trade balance, but let me inform them that last year, Western Australia sold, overseas, £15,300,000 worth of goods, and it bought, outside of Australia, goods to the value of £9,400,000. Therefore, Western Australia’s trade overseas represents a favorable trade balance of nearly £6,000,000 out of a total trade turnover of less than £25,000,000, including both imports and exports.
– That is because Western Australia is a primary producing State.
– Precisely. The advantage that Western Australia gained as a result of trade with the world, was offset by its trade with the other States of the Commonwealth. Western Australia, hoping of course, that the arrangement for the return of surplus Commonwealth revenue would be continued, has maintained a statistical department which keeps figures in relation to interstate trade tabulated and classified as in the case of oversea trade. Whereas that State had a favorable trade balance with the world, it bought from the other States goods to the value of £10,600,000,’ and sold to them commodities to the value of less than £1,250,000. Obviously,
Western Australia provides one of the most profitable markets for the manufacturing industries of Victoria and New South Wales, but those States provide no market in return for the products of Western Australia. That is a fiscal inequality. This trade differentiation is the result of the growth of manufacturing industries in one part of the Commonwealth, and of the fact that another part of the Commonwealth is obliged naturally to develop its primary industries. The development of primary production in Western Australia has to be undertaken on the basis of high costs for money and material, whereas the development in Victoria and New South Wales, having been effected many years ago when prices were low, has involved those States in considerably lower overhead expenses. May I remind the right honorable member for Cowper (Dr. Earle Page) that of every £100 expended in the development of Western Australia during the six years that he was Treasurer, an amount equal to 22½ per cent. of it was paid into the Customs Department as revenue for this Commonwealth. That placed an extraordinary burden upon Western Australia in order to give effect to the policy of national solidity. Not only does Western Australia pay toll on its imported goods to the Customs Department, but it suffers another disadvantage. It gets no. additional employment for its contribution to the Commonwealth revenue, whereasthe other States do:
Broadly stated, the present tariff position has arisen because of the circumstances of the country. The tariff policy pursued by honorable members opposite did not protect Australian secondary industries. They levied a tax indirectly upon the consumers of Australia. They perpetuated the policy of giving to the wealthy remissions of their obligations to the country, by imposing upon the family life of Australia increased burdens in order to make good the national deficiency. The policy they pursued contributed greatly to the present national emergency. Steps to deal with that emergency are embodied in the budget and the tariff proposals of the Government. I agree that emergency measures should not remain a permanent feature of any fiscal policy; but when honorable gentlemen opposite asked the Government to stipulate a definite period, they simply invited it to tell manufacturers in other countries to go on manufacturing ad lib. in preparation for the time when the restrictions would be removed, and in those circumstances there would be no guarantee that Australia would continue with her policy of endeavouring to adjust the trade balance. What would happen if a period of three, six or even twelve months were fixed in respect of these embargoes and prohibitions? Using mass methods, manufacturers in other countries would continue to manufacture their goods; and immediately the restrictions were removed, those goods would be landed here in large quantities, with the result that our last position would be worse than the first.
– Will that not happen, in any event, when the embargoes are lifted ?
– If there is justification for not informing the world of the date on which duties will be imposed, there is equal justification for not making public the date on which a tariff policy will be varied.
– Is that the official reason for the Government’s action?
– No; it is my own opinion. The Minister may have something to say later.
Respecting the detailed items in these schedules I agree that there is room for differences of opinion. Every tariff creates anomalies because it disturbs the relationship existing between industries. For that reason, I reserve the right to vote for or against the various items on their merits. The important thing is that honorable members should treat each item on its merits. In my opinion, it is ridiculous to imagine that Australia should manufacture everything it requires.
– The honorable member is now talking sense.
– I have said the same thing before. It is not practicable for us to manufacture the whole of our requirements. I believe that world trade contains elements of great value to every country. Just as Victoria is becoming the home of the boot-making industry, and Queensland the home of the sugar industry, so are some countries peculiarly suited to the production of certain articles. I see no inherent reason why each country should not take advantage of the special circumstances and conditions which favour it. Our trade with the Continent of Europe has been increasingly in our favour. It would be unwise to adopt a policy which would make European countries less disposed to purchase our goods than hitherto. That is an argument for a variation of the preferential tariff with Great Britain.
– The present preference is not worth twopence.
– I believe that the tariff should be used as an instrument to protect Australia against the importation of luxuries manufactured, for the most part,’ in the country with which we have the greatest adverse trade balance. Anything that would contribute towards correcting our grievous trade balance with the United States of America should be attempted.
I conclude with the observation that no new principle is embodied in the policy adopted by this Government. Honorable gentlemen opposite claim the credit for what the protectionist policy has done for Australia since the Commonwealth was formed. In that case, they must accept their share of the criticism, which the introduction of these schedules has evoked throughout the country. Whatever the case against protection, it must be directed as much against honorable members opposite as against those who support the present Government. The Leader of the Country party (Dr. Earle Page) must accept the responsibility for the effect of the various tariff schedules which were introduced during his seven years of office. The present Government, is responsible only for what happens from now on.
– It is responsible for everything after November last.
– I submit that the right honorable member for Cowper, will not do justice to himself, or show consistency, if, during the course of this debate, he attempts to show that there is in the policy of protection to Australian industries something which is necessarily detrimental to our national life. It will not do for him to say that that policy favours the manufacturers while injuring the primary producers. If this tariff will have that effect, then every tariff introduced during his term of office also had that effect. Nor will it do for him to say that certain States will suffer more than others by reason of this tariff schedule. The right honorable gentleman oan only do what I shall probably do. He may disagree with particular items, while accepting the broad principles underlying the tariff, which involves expedients to correct the adverse trade balance, restore to industry the capacity to compete with the manufacturers of the world, and, as a matter of national honour, put the country in a. position to face its obligations squarely.
– The honorable member for Fremantle (Mr. Curtin), in an able speech, proved himself to bo the greatest economic acrobat that this Parliament has seen. It was impossible to follow his movements; at one moment he appeared on the’ parallel bars; a moment later he was swinging on the rings; next we saw him on the. trapeze, first near the roof and then almost on the floor. When he was asked whether he was a freetrader or a protectionist, or of some other fiscal faith, he suggested that honorable members should journey to Fremantle and listen to him for u couple of hours while lie addressed a gathering in the town hall there. The honorable member reminded mc of a story of a man who attended a political meeting, but left after it. had been in progress a couple of hours. When he returned home ho was asked about the meeting and the views of the speaker. He replied that he had been there for only two hours, during which time the candidate did not say what he was talking about. The attitude of the honorable member is very strange. Indeed, the attitude of the Government is strange. It has brought down an unprecedented tariff, conraining a series of prohibitions and embargoes. It is a super tariff. Most of the members who have spoken during this debate have spoken in opposition to the Government’s ‘ proposals. Government supporters have found it difficult to find reasons to justify them. When I asked the honorable member for Fremantle, by way of interjection, whether the reasons he gave for supporting those proposals were the official reasons of the Government, he replied in the negative. He stated that it was merely his own opinion, and that probably the Minister would have something to say later. So far, no official reason for objecting to a time limit on the embargoes has been given. The honorable member said that he believed in discriminating in favour of those countries which are good customers of ours, and against the United States of America with which country Australia’ had the greatest adverse trade balance. But what is the position in this tariff? It destroys the preference previously given to Britain, and has given rise to threats of retaliation by countries which buy more from us than we buy from them. Yet the honorable member professes to support the Government’s policy. He went on to say that the parties represented by honorable members on this side had in the past adopted an ultra-protectionist policy. He immediately added that the protection afforded by previous tariffs had been ineffective, and in support of his contention he pointed to the huge volume of imports and the immense customs revenue. His way of remedying the position is to go a step further, and impose prohibitions and excessive and discriminatory duties on over 400 items. He described the Government’s proposals as sound national policy but, later, he admitted thai three States out of six had been adversely affected by the imposition of customs duties, and said they should be compensated. The honorable member said that I had made one speech in Sydney, and another in Calare. During the ten years that I have been in this Parliament I have been consistent in tariff matters. When the Massy Greene tariff was introduced I tried, with members of the Country party, to secure some amendments that would make the tariff equitable in its incidence, particularly in relation to duties on raw Materials, such as copper. I said thai rather than impose duties on such articles it would be better to grant bounties so that our secondary industries should not be affected by the unnecessary high price of raw material. My proposal was rejected, and a 10 per cent, duty on copper was imposed. That meant that, in order to give effective protection to secondary industries using copper as their raw material, an additional 10 per cent, duty hud to be imposed on all articles manufactured from copper, as well as these protective duties with the result that the cost of such articles was increased and their purchase limited. The Country party fought for the elimination of electrical and other machinery from customs duties, but its efforts were defeated. Honorable members will recollect that the Labour party joined with ihe Nationalist Government in putting heavy duties on such articles. When the Composite Government was formed the Country party again examined the position. It found that it was impossible to bring about the reforms that I, as leader of the party, had said were necessary. In 1924 and 1925 I told the primary producers that it was impossible to alter the fiscal policy of Parliament because so many political forces were in favour <>f high duties. I pointed out that the only thing left for them to do ill; that time was to get into the vicious circle themselves and secure the maximum protection obtainable for the goods they produced, so that, so far as the home market was concerned, the primary producers would be in as good a position us were the manufacturers in obtaining an Australian price. I said that, not at. some obscure gathering in the country, but in public meetings in Sydney and Melbourne, and, indeed, throughout Australia. When the tariff policy of the Bruce-Page Government was being formed, I accordingly urged in Cabinet that protection should be given to the primary industries of the country. But I never suggested that by the imposition of customs duties indiscriminately the position would be put right. I felt in regard to tariff matters as a doctor feels when consulted by a patient suffering from a boil or a deep-seated abscess. A doctor knows that in such a case it is useless to operate until the boil or abscess comes to a head. If an operation is performed too soon, the trouble is only aggravated. I, therefore, welcome this particular series of excessive tariff schedules, for I realize that it Wil bring the tariff question to a head in Australia. As surely as the sun will rise to-morrow, the day of reaction in tariff matters will come, and come soon. That day will come in Australia as it came to the United States of America one hundred years ago. And when it comes, we shall arrive at a sane policy, by which essential industries will be assisted, leaving goods which the people of other countries can make better and more cheaply than we CRU, and are necessary for the equipment of our factories, and their productions to come here free. Australia has startled the world during the last nine months with its kaleidoscopic tariff changes. Already the present Government has introduced five different schedules - in November and December of last year, and April, June, and July of this year. So far as I can ascertain those schedules cover about 440 items. The duties on some of those items have changed with each new schedule. Many duties have been changed without preliminary inquiry by the Tariff Board. There has been such an avalanche of new duties, alterations of duties and rumours of tariff changes that even the manufacturers themselves are crying out for a halt to enable them to realize where they stand.
– That, is not so.
- Mr. Marks,. President of the Chamber of Manufactures, stated the other day that the uncertainty that has been created has tended to paralyse commerce and industry. Many importers have been ruined and many manufacturing establishments have been forced out of business. Countries that have been good customers of Australia are now talking of retaliation, and somehave already retaliated against us. Undoubtedly, a few men should have mademoney as the result of the tariff policy. Old Court Whisky, for instance, is an Australian product; it was highly protected by this tariff, but, soon after thenew duties on whisky were imposed, the proprietors sold out -to the importers. There is now a demand that the duties on whisky be reduced.
This tariff schedule, which was supposed to correct unemployment has enormously increased it. Unemployment is greater to-day than ever before in the history of the Commonwealth.
– It would have been much greater if we had not adopted the policy of protection.
– What is the use of indulging in suppositions? Let us face the facts. In the first quarter of 1929, unemployment amounted to 9.3 per cent., and in the corresponding quarter of 1930, it was 14.6 per cent.; in the second quarters of those years, it was 10 per cent, and 18.5 per cent., respectively. The Massy Greene tariff, which was as comprehensive in its range though much lower, as that now under consideration, was submitted in 1920-21, and unemployment ran to a high level for the two subsequent years. Economists generally recognize as a truism that sweeping tariff alterations can be safely made only at a time of great national prosperity, and should not be attempted at a time of great adversity, because of their effect in dislocating business and causing unemployment. Proof that there is less employment in Australia today than formerly is found in the quantity of electricity being produced and used at the present time. Figures showing the business done by city power stations indicate that in the last few months their output has remained practically stationary, or in some cases has even decreased, while previously there was continual increase.
Australia is now face to face with an issue that it has long evaded. It must ask itself whether high duties will enable it to pay it’s debts- abroad,, and maintain sufficient employment for its people.. We have reached the high-water mark of protection, in this- country. We have imposed embargoes, and the duties are so high in many cases that they practically amount to prohibition. There will now be a straight-out test of the value of this policy of prohibition, which has been adopted under cover of the national emergency, and we shall see whether it has the effect that its sponsors anticipate. If it does, it will become the accepted policy of Australia; but if it fails, proof will be afforded that it is an unsafe policy, and that a different method of administering encouragement to industries must be adopted. The protective policy of this country resembles a balloon that has been blown up to bursting point. One of two things must happen; either the balloon will burst, or the texture of the material will give way so that the air will leak out and the envelope will gradually collapse.
As 1 have already said, the high- water mark has been reached, and the tide must now recede. There will be a reaction in Australia that will bring about conditions similar to those experienced in the United States of America in like circumstances about a century ago. It is worth while recalling what took place in that country after the war with England in 1814.. During the war with Napoleon, British and French ships had practically prevented other vessels from trading with America, with the result that a number of exotic manufactures were begun there. When . that war was over, other countries began to send their goods across the Atlantic to America, and in 1816 the United States of America levied a long list of import duties. In 1818, and again in 1824, the tariff wall was raised even higher, and, finally, in 1828, when further increases were made on practically everything grown or made - on earth or in water - the primary producers found themselves’ in the same position as that of Australian producers to-day, and they demanded protection for their products. A tariff schedule was eventually passed by Congress which protected rice, cotton, tobacco, and other raw materials; which were exported in large quantities as well as manufactured goods. The result was exactly the same as has been experienced in Australia - indiscriminate and universal protection proved to have the effect of removing any real protection from those industries that deserved to be encouraged. The’ tariff of 1828 was called the “ tariff of abomination,”’ and it brought about such reactions that South Carolina and Other Southern States took action to secede from the rest of the United States of America, just as Western Australia and South Australia talk of seceding from the federal union to-day. South Carolina passed a nullification ordinance, and de- clared that it would resist the duties with armed forces raised within the State. As a result of its action, Mr. Clay, the Leader of the Protectionist party, brought down a tariff in 1833 which removed the anomalies and effected reductions in duties. That proposal provided that for the following eight years there should be further reductions every alternative year, so that by 1842 no duty in the United States of America would exceed 20 per cent. Thus, the duties were reduced from 70 per cent. or 80 per cent. to 20 per cent. Prom 1833 to 1861, with the exception of a short period in the middle of the ‘forties, there was a steady decline in the tariff duties in the United States of America, consequent upon the reaction due to excessive protection. During that period, it is interesting to note the great cotton and woollen manufacturers, and the iron and steel industry, were placed on a sound basis and were enabled to expand. The number of bales of cotton used in manufacture doubled every five years, while the duties were being reduced. Those industries increased in efficiency, andthe goods that had to be imported were obtained at a reasonable price.
Australia to-day is being subjected to a very interesting experiment by this Government similar to that made in the United States of America. Just as a physiologist makes experiments upon a guinea pig or a rabbit in a laboratory, this country is feeing given large tariff injections, and we shall soonknow whether the treatment is beneficial or otherwise. Whatever the effect may be, we can console ourselves with the knowledge that, even though the experience may be extremely unpleasant, a good deal of valuable information will be obtained for the benefit of the next generation, and this may easily determine the future and permanent tariff policy of this country. Whether or not the new tariff schedule produces the effects desired by its sponsors, I regard it as being of some value, because it will enable us to ascertain whether the Labour party’s policy of prohibition and extremely high protection can really assist or whether it will retard the development of a young country such as Australia. If the experiment fails the policy of the present Government may, in the longrun, confer benefits not contemplated by the Ministry.
Among the 440 items to which increased duties have been indiscriminately applied, many without preliminary investigation by the Tariff Board, there must be some duties that will prove beneficial. It would be contrary to the law of averages to impose increased duties on 440 items without benefiting certain essential and valuable industries. One can hardly fire a shot gun at short range at a target without a few of the pellets hitting the bull’s eye. These are the industries that the Minister has made such a song about; but I think that our experience will be the same as that of the United States of America. Mr.Rice, of Massachusetts, said in 1860 -
The manufacturer has learned, among other things, that the greatest evil, next to ruinous competition from foreign sources, is excessive protection, which stimulates a similar ruinous and irresponsible competition at home.
Already we find that, as the result of the embargoes imposed, many manufacturers are. complaining that others are coming to Australia to share the golden eggs, and they fear that the eggs will not go round. We have the instance of a foreign company being invited to come to Australia and compete with local manufacturers and given very special concessions. I refer to. the special concessions offered to the Heinz Company.
Sitting suspended from 12.45 to 2.15 p.m.
– The embargoes that this Government has placed on imports may have real value because, although they intensify the present crisis, will probably lose us the goodwill of our customer countries, lose us their trade, and do not touch the root of the trouble; they have forced upon the minds of the people the fact that the country is in the midst of a real crisis. Particularly should that be impressed on the minds of those immersed in amusements, the class war, and other such hobbies. It is quite possible that such action was necessary. The spectacular action of the Bruce-Page Government in staking its own existence on the legislation that it introduced to effect the necessary change in existing methods of production and industrial regulation, and its reasoned advice as to why that course should be taken, failed to convince the people that a crisis existed. The present Government has not staked its existence on its action, but it has staked the livelihood of hundreds of thousands of workers on the issue. The proclamation of embargoes has intensified and starkly outlined the crisis that has taken possession of Australia, and we are forced to consider the root causes of the evil, and the remedies that will have to be applied.
It is quite evident that the main cause of the existing difficulty is that we have been living beyond our means, both individually and nationally. By a system of universal time-payment, the future has been mortgaged, and not only governments, but men of experience in commercial life, have gambled on the continuance of high prices for our products. Unfortunately, like so many gambles, this has been an unsuccessful one, and the world-wide economic disturbance, caused largely by the appalling drop in prices, has also brought about a cessation of foreign loans. We have no alternative but to face the position, and consider what we should do.. The first thing that we have to face is that under the tariff protection of the past we have built up many exotic industries that are non-essential and unsuited for the natural environment of the country. Though an ice-making industry may be desirable in hell, it would be totally unsuited to that environment, and could not be satisfactorily established there. So with these exotic industries of ours. We have established many uneconomic practices by our wage regulating for conditions that were sheltered behind a high tariff wall. Now we have to find the means to reduce the cost of production, and to get the workers of Australia back to productive work at competitive rates at the earliest possible moment.
The test of the action of the present Government in connexion with these tariff schedules and embargoes is, will they help to pay our debts abroad, or even to pay the interest on those debts which have brought about the exchange crisis that now exists? Will they decrease the cost of production, equip our factories more efficiently, and so increase the output per man and the national output, at prices that will enable us to keep in the markets of the world. Further, will they increase employment in Australia ? If we examine the pepper-pot nature of the indiscriminate tariff brought down by the Government, we will realize how it has, in many cases, without proper investigation, imposed duties that must inevitably result in increased cost of. production and a reduction of the efficiency of our industrial equipment. The saleability of our goods will be lessened by the same means by which we destroy our customers’ goodwill. Recent tariffs include duties on raw and finished materials alike. They have been imposed on such articles as light woollens that are not made here, and have not been manufactured successfully in the United States of America even up to the present. The Government, in its ignorance, has blissfully imposed this tariff, expecting industry to spring up in Australia in the course of a year or two. As was truthfully pointed out last night by honorable members supporting the Government, it took 150 years successfully to develop the woolmanufacturing industry in other countries. By placing this indiscriminate rain of duties on raw materials and partlymanufactured and finished articles, and particularly on goods that cannot be manufactured here, the whole tariff tends to defeat the object it sets out to achieve. It must inevitably increase overhead production costs, and the cost of industry generally, so making it even more difficult for our industry to carry on.
There are two factors that are essential for the success of manufacture. The first is that the raw material must be obtainable at reasonable prices, and the second is that industries themselves must have efficient and cheaply-equipped factories. Unfortunately, our policy in the past has tended to boost the price of raw materials through increasing the cost of production under the indiscriminate protection given. At the same time heavy duties on capital, plant, and equipment have lessened the number of efficient and cheaply-equipped factories. The present tariff accentuates and aggravates those conditions, and will make the load more burdensome. An examination of the effect of the policy from the point of view of factory production makes clear its evil effects. Factory production falls into two groups of products, the first con- sisting of readily consumable productions - hats, boots, jams, &c. - and the second of capital plant equipment - the machines that make the goods. In the past our policy has been to protect both classes indiscriminately, and as a result of the new tariff confusion has become worse confounded. Raw materials for secondary manufacture, and, in fact, readily consumable articles generally, for which there is a prompt sale if the prices are reasonable, will undergo increases in price. In addition, the capital plant has become more expensive and difficult to install. An investigation reveals that, with our population of 6,500,000 people, we have a sufficient market for our readily consumable articles to warrant mass production at prices low enough to enable our buildingup of export trade at competitive prices. That can be done only if we reduce price levels in Australia. This is quite impossible, in connexion with our capital plant equipment output, except for those few for which, however, we have special manufacturing facilities. Our iron and steel industry is extraordinarily well favoured, because .we have iron ore of a very high quality available. It is. easily mined and easily handled; we have the coal necessary to convert it into iron and steel in huge deposits, and very accessible at a navigable port. All the necessary ingredients can be brought together at the least possible cost, and with the greatest expedition. That should not only enable us to supply Australia with iron and steel products, but to export them to other countries. Last year Canada, which has a much lower range of duties, averaging less than 20 per cent., and in no case exceeding 37-i per cent., and with 5S9 out of its 1,188 tariff items free to Great Britain, exported iron and steel products to the value of £.1G,500,000. That country was also able to export non-ferrous metals to the value of £24,500,000 last year. So that, if the proper conditions prevailed in Australia, we should be able to build up very much bigger industries in the readily consumable lines, and to extend our sales in other directions. A typical instance was given last night, that of Hoskins and Company, who successfully contracted to sell iron pipes to Western Australia before federation, one of the biggest pipe line contracts in the world at that time. That was done in open competition wit every other country, at a time when New South Wales was practically a freetrade community. It was possible, because raw materials were available at reasonable prices, and because the excellence of our Australian workmen enabled Us to compete satisfactorily with the world.
History teaches us that the. natural industries of Australia are those that produce readily-consumable products, such as I have already instanced. Before we went tariff -mad we were able to export a good quantity of those goods, even to the extent of sending £1,000,000 worth to New Zealand in one year.
– When did we go tariffmad?
– I have already dealt with that matter, and will return to it before concluding my speech. Before we introduced this indiscriminate protection we were able to export, not only consumable products, but some articles of capital plant equipment. It is preferable to establish industries that produce readily consumable articles, because they tend to stabilize employment. There is a fairly constant demand for jams, boots, socks, hats - of which every family purchases a set quantity throughout the year - while in bad times, there may be no demand for heavy rails, bridge-building material and so forth. The building of the works for which those items are necessary might easily be postponed for many years, but we cannot postpone taking food for more than three or four days without very unhappy results. If we concentrated upon readily consumable products it would tend to stabilize the position when we encountered a tradedepression. I point out how weak the economic structure of the country is rendered by the undue encouragement of these heavy engineering industries. The great purchasers of these goods are the governments of Australia. When a time of depression comes they cannot borrow money, and the whole of the industries are simply like an inverted pyramid standing oh the apex of a government loan. At the apex of the inverted pyramid is the government loan, then. the governments, and then the subsidiary industries, and on top of all are the workmen. When the day . comes that the governments cannot purchase the goods, the structure crashes because the government loan is withdrawn. I recall the recent dismissal of 1,500 men from the Clyde Engineering Works, a concern concentrating upon the production of heavy engineering products largely for government requirements. It seems to me that a sane national policy would tend towards importing a. certain, quantity of these heavy engineering commodities, so that if we strike bad times when we have to curtail borrowing or capital expenditure we may still be able to keep the factories going in Australia, and the people who will not get work from us will be those who are employed in foreign factories. At any rate such a policy would help to stabilize our position very much better than the present policy is capable of doing.
Our present tendency to encourage engineering industries to too great an extent has been one of the factors that have disturbed the balance of the development of Australia. Under present conditions these industries must be established at the seat of export and import, because much of their raw material is brought- from overseas and because steam power has been the only power available to them in the past, and this has only been available in the big capital cities or at places adjacent such as Newcastle. But industries such as the manufacture of biscuits, flour-milling, boot-making, and the conversion of hides into leather can better’ and more economically be carried on in country towns close to the source of the raw material, than in other situations. A policy of decentralization in that respect would tend, not only to bring about a better balance in the distribution of population, but also to improve the railway position. At present the raw material which is conveyed to the capital cities .where the majority of the manufacturing establishments are located is carried over the railways at low fates, with the result that nearly every State railway system is not paying. If, instead of the raw material, goods in a manufactured state were conveyed over the railways to the various points of distribution, a very much higher railway freight could be earned on them because of their increased value compared with the same weight of raw material. Electrical development now gives an opportunity to break away from the bad old system of the past under which industrial establishments had to be situated where steam power’ was available or where it was easy to get coal. The fact that electrical power can be transmitted hundreds of miles away affords an opportunity never previously available in Australia for the establishment of factories at the source of supply of the raw material. I hope that the inevitable reaction of the present tariff proposals will secure an altered outlook and the adoption of a policy which will enable a proper balance to be struck in the development of Australia.
During the last 30 years we have had many tariffs brought down to this Parliament ; the Kingston, the Lyne, the Tudor, the Massy Greene, and the Pratten. Each Minister has said that his tariff proposals were designed to correct , all anomalies and put all industries in a position to steadily improve production in Australia. Each Minister succeeding Mr. Kingston has said that his predecessor’s tariff was ineffective, but in’ the . same breath, in order to prove the. soundness of the policy of protection, has always- cited the development and improvement brought about in Australian production by preceding tariffs. If the figures which are quoted by Ministers who submit new tariff proposals are quite correct, and I have no doubt they are, it seems to me that what they prove is not the need for additional protection but that the protection already afforded must have been effective. Personally I think that if greater discrimination had been shown in our tariff proposals there would have been a greater development in Australia, more employment, more population and more wealth produced ; much more satisfactory industries would have been established than we have at the present time, and our industries would have been using mass production methods in a way which under existing conditions is not possible.
Although we have had 30 years of effective tariffs since federation, and we have at the present time 464,196 persons employed in 22,775 factories, an average of just over twenty men per factory, there are not more than 707 factories which employ over 100 hands; At the time of federation the average number of hands in each factory was twenty. The census of 1921 showed that there had been a great increase in Australia in the number of factories in which one or two men are employed - they are family partnerships or arrangements of that sort ; and it is evident that such factories cannot have- efficient plants. The experience of older manufacturing countries is that the cost of production cannot be kept down except by means of mass production by large units. It is worth while our asking ourselves whether our failure to produce more factories of the larger type is due to our past policy of taking away with the one hand what has been offered with the other. Instead of continuing that policy we should en-, courage, by tariffs if necessary, factories which use our staple products, wool, flour and so forth. Other industries like brick and tile making can carry on without a tariff, because the weight of bricks and tiles makes it impossible to bring them to Australia. That we have been overdoing protection can be seen by looking at the way in which Australian production has been built up. In 1927-28, our total production was estimated at £417,000,000. Mr. Dalton, British Trade Commissioner, pointed out that of this total, £260,000,000 represents the value of goods produced in Australia, for which our country is specially suited, and in regard to which importation is practically impossible. Under this heading come such industries as light, power and heating - we cannot import these - flourmilling, jam-making, fruit-canning, tanning, brewing, metal and ore extraction, fellmongery, soap and candle-making, butter-making and sugar-milling. These are industries which are really not subject to competition from importations of any magnitude from overseas. In addition, there is £60*000,000, which covers the value of work which is also outside competition from overseas. Under this heading comes work done in railway and tramway workshops, valued at £16,000,000 - we cannot send away our locomotives to be repaired - the printing of newspapers and periodicals amounting to £16,000,000, furniture-making amounting to £10,000,000- furniture is too bulky in the main to be made overseas for the Australian market - and repairs to motor cars, bicycles and motor cycles amounting to £5,000,000. There is, therefore, a balance of £100,000>000 worth of production which is really subject to outside competition, but if we examine the position closely, we find that even much of this is not subject to intense competition from overseas. Indeed, there is every need to examine the position closely, because only by doing so can we see exactly what particular portion of industry should be encouraged by protection, so that we may concentrate on it, and what portion should be left alone. Undoubtedly we can make almost anything in Australia, but the question is whether we can do it economically or commercially. “We realize that in our present state of development and population the local market is too limited for many industries, but in addition to that factor the position must be closely examined to see that certain industries are not protected to the detriment of more essential or more profitable industries. For example, at the present time there is very little profit in rural industries because the cost of production is so high. The indiscriminately applied protection of the past has undoubtedly been one of the main factors in bringing about that condition of affairs. If we examine the duties imposed by the 1927-28 tariff, to take it as an example, we find that, under the item metals and machinery, on capital plant, equipment and machinery valued at £16,250,000, needed for building up industries in Australia, or for replacements, £3,000,000 duty was paid. Altogether on all capital equipment material brought into Australia, including motor lorries, which are essential to production, £10,600,000 duty was paid in 1927-28. According to the Tariff Committee’s report presented last year, the cost of similar equipment made in Australia is increased by approximately £9,000,000, owing to the price levels consequent upon the operation of our protective policy. That means, therefore, that approximately £20,000,000 has been added in this way to the capital cost of this equipment, but it is probable that by the time the plant passes through the intermediate hands of the importer or the manufacturers and retailers an additional 20 per cent, is added, so that we can say that approximately £24,000,000 was added in one year to the capital cost of plant purchased in 1927-28 for use in this country. That is an intolerable burden. We cannot expect r.6 compete in overseas markets at the present time because the cost of production is too high in comparison with the prices realized by the sale of our produce overseas. Later on I shall point out how materially this factor has affected the mining industry. Australia has had relatively no increase in the development of mining since federation, whereas Canada has trebled the output of her mines because Canadian mining companies can import their machinery free of duty or at a very low rate of duty. Australian railways are very much more costly to work than they should be. AH these things mean additional costs, which affect the returns to the farmer and the pastoralist for the produce’ they have to sell overseas. It is quite obvious that if we overcapitalize the plant required by the grazier or the farmer the profit to the owner of the equipment is interfered with. It is also inevitable that if we increase unnecessarily the capitalization of the equipment used by the primary producers or manufacturers we interfere with the standard of wages the employees are subsequently able to get. It is interesting to note that the production per individual of primary producers in Australia is very much greater than that of the industrialists of Australia.
– That figure varies very considerably according to seasonal conditions.
– But it is always bigger. I defy the honorable member to quote one year in which the production per head among primary producers has been lower than the production per head among industrialists.
– I grant the honorable member that.
– If we follow a policy that tends to drive out of his present occupation the man who is capable of a greater production per head than he would be capable- of in any other occupation we tend to destroy the surplus which is available for raising the standard of living for those who reside in the cities.
– I agree with that, but natural conditions enter much more into the valuation of production than even the labour element itself.
– That is so, but if on top of seasonal uncertainties, unnecessary increases in the cost of production help to drive off the land men capable of increased production, it must tend to lower the standard of living in Australia. Consequently, I have suggested that we should really get a new orientation of our fiscal policy. We should draw a definite line of demarcation between the readily consumable things which we could make here easily from our own staple products, and encourage the manufacture of them, and the intricate machinery required for factory equipment, which we should not protect to anything like the same extent, if at all. The imposition of heavy duties on machinery of that kind only adds to the cost of production, increases unemployment, and makes impossible the development of an export trade. We should make much greater progress if we were to confine our attention to the manufacture of those things for which we have the raw material readily available.
The mining industry has declined in Australia, not because we have no mort: minerals available, for we have a wonderful, if not an inexhaustible supply of all kinds of minerals still undeveloped and unexported; but because the high cost of production has made mining unprofitable. Many towns, like Kalgoorlie, have practically disappeared before there was any necessity for them to disappear. Numerous old mining fields in Australia have millions of tons of low-grade ore still in sight in them, but it is impossible to raine the ore because of the high cost of production, due, not so much’ to high wages, but to the impossibility, on account of our fiscal policy, of installing up-to-date machinery. If these ores could be mined we should add to the total wealth of Australia, and make possible the payment of higher wages and the maintenance of a higher standard of life. But instead of developing a fiscal policy that would have this result, we are pursuing one which is continually increasing the burdens on both primary and secondary industry. “Whenever we have a succession of poor seasons a good many properties which are profitable in a good season have to be abandoned, because the cost of production does not leave a sufficient margin to enable the occupiers to carry on in a poor season. If we would filter our fiscal policy, and protect only natural industries to a reasonable extent, we should increase the purchasing power of the people, make possible the settlement of more people in Australia, and build up a good local market.
The imposition of high duties would not, matter very much if we were h completely self-contained country; bur, we are not so. We have to soil overseas at a competitive price about £120,000,000 worth of our products annually to enable us to buy the bare necessaries of life, and the raw materials for our industries, and to meet our interest bill and pay dividends on public and private money invested here. Unfortunately, the price of wool, wheat, and other products which we sell overseas is not fixed here. This means that we Iia ve to accommodate ourselves to conditions made for us by other people. If we were to cheapen the cost of our factory equipment, we would do more than we could do in any other single way to re-adjust ourselves to world conditions. The price of practically all the equipment required by those engaged in primary industry is much higher in Australia than elsewhere. If the cost of the plant necessary to produce this equipment were reduced, our price levels could be brought clown very considerably. We should make it possible for our railways and other big business concerns, as well as for our farmers and the people engaged in primary industry generally, to obtain modern equipment at the lowest possible price.
This is specially necessary in regard to electrical equipment. We are living in an electrical age. The last 30 or 40 years have witnessed an industrial revolution in America, Trance, Germany, and Great Britain and other countries in consequence of the increased use of electricity; but in. Australia the transfer to electrical power has been very seriously handicapped by our tariff policy. We. have in this country 4,872 persons, many of them girls, engaged in the industry of producing electrical equipment. That is only about 1 per cent, of the total number of factory workers employed here. To protect that 1 per cent, we are penalizing tlie other 99 per cent. In 1927-28 the value of the electrical goods brought into Australia was ‘ something between £5,000,000 and £6,000,000, upon which no less than £1,260,713 had to be paid in duty. This was equivalent to £260 per employee. The added value given to electrical goods in the process of manufacture is only £296 per employee. To obtain this added value the community has to pay £199 towards the wages of each employee, so it seems that we are going to the bad to the extent of £163 in respect of each of them. Because of this the cost of electrical equipment in Australia is so high that many factories and many homes have to dispense with it. In the factories of the United States of America 4 horse-power of electrical power is used per employee, while in Australia only 1.6 horse-power per employee is used. If we put one horse-power down as the equivalent of ten men, it means that in. Australia we have, roughly, sixteen invisible electric slaves assisting every worker, while in the United States of America they have 40. Because America has taken advantage of the use of electric power her people enjoy a higher wage standard and produce more wealth per employee than the people of Australia. The adoption by Australia of the American policy in this regard would undoubtedly make it possible to develop certain manufacturing industries successfully here.
I propose to give two or three illustrations of the serious effect on Australia of her present tariff policy. The first of these relates to the wood-working industry. A letter which I have received from a person engaged in this industry sets out the position very clearly. It is as follows: -
After 25 years’ experience in the sale of wood-working machinery, we have no hesitation in saying that the majority of woodworking plants, particularly in this State, are about fifteen years behind their overseas competitors, chiefly due to the machinery in use, and unfortunately, still being installed. In the vast majority, the whole plant is run from a single motor, sometimes running into 16 h.p., and in very many cases there will be one or two machines in operation at the same time. Also, the practice is still in use of using a 12-in. machine with a 3 h.p. motor to do a job of 4-in., which could be done economically on a 4-in. machine with i h.p. It is safe to say that hardly one of the heavier machines is working up to 20 per cent, of its capacity. This is repeated in hundreds of shops, dozens of times per day, with an enormous waste, both in current and expenditure, on plant and upkeep. We Can quote one shop, with a capital outlay on plant of £450, taking 55 minutes to do a” job, which is done in another shop, with a capital outlay plant of £125, in seven minutes. The former is a constant applicant for more tariff; the latter stated frankly that they did not require it. The tariff, as it stands now, is simply an excuse to continue uneconomical and inefficient ways, and justly so. If- you Will peruse the list enclosed and see the vast difference, made up of duty, between the price paid by the user in the United States of America and that which the same machine must be sold for here, it is excusable, and there is no incentive to bring their plants Up to date. Most of these machines have the motors built in as an integral part of the machine, and wo state, without fear of Contradiction, that to build them locally would be suicidal for the manufacturer, as they have not even attempted to do so in England, with a world’s market available, and a splendid reputation at the back of them in this direction.
The next illustration relates to the manufacture of gears for motor cars. “We hope some day to be. able to produce an allAustralian motor car, so that we may be able to retain in this country some of the money spent on motor cars which at present goes abroad. Surely it must be apparent that in preparation for the day when we shall make our own motor cars we should do all possible repair and replacement work for the motor cars already here in the best possible way. To that end the best available machinery should be secured. But our tariff policy has made the price of such machinery almost prohibitive. The letter I received in connexion with this matter read as follows : -
Just about a month ago, all kinds of grinding machines were made 45 per cent, and GO per cent. duty. Not one of the grinding machines on the illustrations enclosed can be made locally, commercially, yet the high rate of duty has now to be paid. Grinding machines are most necessary in the motor car industries. Australia is hoping to build an all-Australian car, and nearly all the engine and gear box parts are finished on grinding machines: Crankshafts, camshafts, gudgeon pins, axles, shackle bolts, bushes, internal bearings for gears, &c. All of these parts have to be finished on grinding machines. Now, a grinding machine that was usually sold for £700 and delivered to clients on terms ranging from two to five years, to enable them to do work for the motor trade, this machine is now £1,200 owing to the high rate of duty. You will therefore see what a great injury a high duty on machine tools is of which there is only one maker in the Commonwealth, who makes one type of lathe out of the 50 types that are in use in other parts of the world, and another maker who makes only one type of press out of the 50 types in use in other parts of the world, when these firms have only just to inform a customs officer that they can quote for any machines, and the high rate of duty can be charged.
The third instance to which I shall refer has relation to the manufacture of metal syphons for use in flushing systems. The manufacturer who wrote to me in this connexion was put into a very awkward position because of the action of the Customs Department. His letter reads -
In my business, I have for many years past imported thousands of cast metal syphons used in flushing cisterns. I am connected with a foundry and we tried to cast these syphons by hand locally, only to find the finished article was dearer, and was not up to the standard of the imported fitting, owing to the latter being cast in iron chills. I approached a local engineering works, the Star Machinery Co., of Alexandria, Sydney, and they undertook to make a chill within eight weeks which would produce a syphon equal in finish, &c, to the imported sample syphon submitted. A chill was made, after a delay of nine months, but after several trials the result was. so unsatisfactory that I refused to accept delivery. The Star Machinery Co. then entered a claim against me for the cost of the chill. The case was .heard in the District Court before Judge Curlewis. The chill, together with the original syphon, also sample syphon produced from the locally-made chill, were produced in court, and before I gave evidence the judge stopped the case, as he said it was plain to any sane man that the chill made was useless for its purpose, the article made from it was nothing like the sample, and he gave my foundry a verdict with full crista. Having lost twelve months in all in production, 1 then asked my London agent to purchase six chills in all. He found, after numerous inquiries, that none of the British engineering firms would take on the manufacture, as they stated they were difficult fittings to make, but at last he succeeded in yetting them made in Germany. I then made application to have these articles admitted at a reduced rate of duty, as they were required to establish an Australian industry. My application was followed by a visit from an officer of the Customs Department, who wanted to know “ if I had made any attempt to have these chills made in Australia “. I replied yes, and told him the circumstances. He asked for the loan of a set of photographs which the makers of the chills had sent me, showing the operations and the finished article. The officer then took these photographs out to the Star Machinery Co., the firm who had failed as stated above to make ‘a proper article. This firm immediately recognized the fitting from the photographs, knew who they were for, and stated “Yes, they had made similar articles . and could do so again.” They were anxious, no doubt, to get even for losing their case, and succeeded, as the customs, report was “‘That due inquiries had shown that these chills were made by the Star Machinery Co. of Alexandria, and under the circumstances, I must pay the full 60 per. cent, duty “. I had no appeal, and such are the methods which help to cripple business, and strongly support the statements you have made.
Such cases as these inflict grievous hardship on manufacturers who are doing their best to develop Australian industries.
– 1 assure the right honorable member that the Customs Department gives very sympathetic consideration to all cases of the kind he has mentioned. If au assurance is given that the machinery required is not being manufactured in Australia it may 4e imported at ‘ concession rates.
– While the Minister for Trade and Customs (Mr. Fenton) was absent from Australia, I brought this and several other cases under the notice of his department, and I assure him that, notwithstanding the investigation that has been made, the firm to which I have just referred was obliged to pay the full duty. I shall, a little later on, indicate how we could overcome troubles of this kind. In a country like Australia we should be able to reap a great advantage in relation to internal transport compared with a country like Canada. I suppose the greatest distance that any of our producers would have to haul their products to the sea would be 400 miles; while in Canada the average distance goes up to as much as 1,000 miles. But this and certain other favorable conditions which prevail here are more than offset by the disadvantages of our fiscal policy.
Earlier this week we had a discussion on the ship-building industry. The cost of sea transport is increased in the same way. In August, 1926, the Queensland Labour Government called for tenders for two hopper barges. The successful tender was that of Fergusson Brothers, of Glasgow, for £58,000. Sir W. Armstrong Whitworth tendered at £5S,075. There were three Australian tenders - New South Wales Government Dockyard, £134,800; Morts Lock, £119,000; Poole and Steele Limited, £93,000. Because of the enormous disparity in prices the Queensland Government was forced to ac1’ cent tha overseas tender. One of the causes of the high cost of shipbuilding in Australia is the expense of equipping factories with the necessary machinery. ‘ If we examine the principles applied to the tariff by other dominions with problemssimilar to those of Australia, we are astonished at the contrast bet-ween their policy and ours. In Canada the highest duty is 37£ per cent. ; there are a few of 35 per cent., but the vast majority’ of them do not exceed 20 per cent. In the Australian tariff, duties of 55 per cent., 60 per cent., and 70 per cent, are common;. I shall quote shortly the relative duties on iron and iron products, which Australia is unable to export, whereas Canada exports £16,500,000 worth. The Canadian tariff includes 1,18S items, of which 589 are free to Great Britain. Construe-“ tion machinery for the making and main”tenance of highways is admitted free f romGreat Britain, and the rates against other countries were reduced in May last. All agricultural machinery from Great* Britain is free, and the duties on tractors, from all countries are reduced. The great bulk of mining machinery is free, and all the duties are low. Refrigerating and metal-working machinery, internal combustion and steam engines, are free from all countries; switches and switchboards, steam and other shovels from Great Britain are free; s6 also are nuts, bolts, screws, tools of precision, bath tubs, lavatory equipment, wheelbarrows, electric light fixtures, and enamelled hollow ware. This policy has been pursued by Canada for twenty years, and a comparison of the progress of that country and Australia is interesting. In 1901 Canada’s population was 5,571,315, and in 1929 it had grown to 9,796,800, an increase of 4,420,000, or 84£ per cent. Australia’s population in 1901 was 3,763,339, which had increased by 1929 to 6,374,177, an increase ot 2,610,000 or 70 per cent. In regard to population, Canada has been growing absolutely and relatively faster than Australia. The total trade of Canada in that period increased from £71,177,S0ti to £530,000,000, an increase of £460,000,000, or 746 per cent. The total trade of Australia grew from £90,495,000 to £28S,49S,000, an increase of £198,000,000 or 320 per cent. Again, the increase in Canada has been absolutely and relatively faster than in Australia. Canadian imports increased from £34,000,000 to £253,000,000, an advance of 760 per cent., and Australia’s from £42,000,000 to £143,000,000, an advance of 340 per cent. The exports of Canada grow from £36,000,000, in 1900, to £277,000,000 in 1929, a gain of nearly 800 per cent., whilst Australia’s rose from £49,000,000 to £144,000,000, an increase of 300 per cent. The area under cultivation in Canada grew from 19,763,740 acres in 1907, to 58,635,791 acres in 1929, an increase of 39,000,000 acres. Australia’s increase was from S,000,000 acres to 21,000,000 acres, an advance of 13,000,000 acres or just one-third of that of the dominion. Because of its huge expansion, Canada has been able to absorb large numbers of migrants, who came to help in development. In 1929 167,000 persons were admitted, whereas the new arrivals in Australia in 192S were only 27,232, and in 1929 many fewer. These various advances in Canada were attended by a huge increase in the total production of wealth, which, in 1929, was £1,162,000,000, as compared with £453,000,000 in 1928. The value added by manufacture has grown in Canada from £96,210,675 in 1901 to £685,095,708 in 1929. Australia’s total added value for 1929 was £167,000,000. The use of electrical power is a good basis for judging industrial development. Australia, in 1927-1928, produced 2,194,486,414 units, and Canada, 16,000,000,000 units. The capital invested in electrical development in Canada was £190,000,000, and, in Australia. £18,231,000. The horse-power installed’ was - Canada, 5,349,232; Australia, 758,673. This development has a very close relationship to the free admission of electrical machinery. Canada has done everything possible to encourage the consumption of electricity, whereas Australia, by high duties, has impeded electrical development. The effect of the different outlooks on the protection of the machinery of production is best illustrated by the growth of mining in each country. In Canada, the total output of minerals increased from £13,000,000 in 1901 to £60,775,200 in 1929, a growth of over 450 per cent. In Australia, the production of minerals in the same period increased from £21,816,000 to £23,085,000, an increase of less than 10 per cent. Investigations by various commissions have shown that one of the greatest obstacles to mineral development in Australia has been the huge cost of equipping the mines, owing to the high protective duties. During the period under review, Canada, with a lower and discriminating tariff, became a great exporter of secondary as well as primary products. For instance, its export of iron products increased from £755,770 to £16,451,000; of non-ferrous minerals, from £6,679,000 to £24,531,000 ; non-metallic minerals from £1,671,000 to £2,500,000 ; and chemicals, from £158,000 to £3,380,000. During those years the Dominion was able to overcome an adverse trade balance, and, except for last year, when exceptional circumstances prevailed owing to the difficulty it experienced in selling its wheat, it was able to show a large excess of exports. The attitude of the Canadian legislature to the subject of tariff protection is best set out in a statement by the Finance Minister, Mr. Dunning, in May last -
It must never be forgotten that a large and increasing proportion of our producers and manufacturers are vitally interested in the maintenance of friendly markets for their products outside Canada. Indeed, our national well-being depends largely upon exporting freely those commodities which we produce greatly in excess of our own needs. This budget is frankly framed to enable us to buy more freely from those countries which buy from us most freely those commodities which are of vital importance to us, and in the confident belief that by this means we shall help to develop and stabilize export markets for our surplus products. Canada will not engage in a tariff war with any country. Thu world shows at the present time too many examples of disaster following such a course. As a great exporting nation, our course must be the contrary one of facilitating trade with those who facilitate trade with us. Those who raise prohibitive barriers against our products entering their markets must expect that we will extend favour to our own good customers- rather than to them. I speak in tin spirit of retaliation. I would much rather extend lower tariff favours to those who extend them to us than to impose prohibitive tariffs in return for like treatment. Lower tariffs to those who buy most freely from us makes for trade extension and wider markets for our products, while prohibitive duties to meet prohibitory duties generally applied would constantly tend to restrict our export markets.
These words should be published in every newspaper, and posted on the walls of every legislature and at every railway station and post office. A comparison of the duties imposed by the two countries on iron and steel products is informative. By reason of its rich deposits of iron ore and coal, Australia is naturally adapted for the cheap production of iron and steel. But it is unable to export these commodities, although Canada has been able to develop a huge export trade. The duties are -
Canada, with a huge export of secondary products, has been able to treble the value of its export trade in fourteen years, whereas Australia, during the last twenty years, has not been able to send abroad more than a beggarly 2£ per cent, of its secondary products. The policy it has pursued has given Canada, despite its small population, fifth place amongst manufacturing countries. The value of its industrial production in 1929 was £800.000,000. The statistics of value added per worker in industry place the dominion close to the United States of America, which, in this respect, leads the world. It is interesting to compare the development of the Commonwealth with that of the United States of America in the early years of the last century, when its problems were similar to those of the Commonwealth to-day. At the time when the foundations of the wool, iron, steel, and cotton industries were laid in America, from 1833 to 1861, there was a continual reduction of tariffs except between the years 1842 and 1846. But statistics show that the increase of protection during those four years tended to keep in use inefficient methods and plant which otherwise would have been forced out by competition. Honorable members supporting the Government seem to be aiming to emulate the United States of America. It is clear that the foundations of the present manufacturing prosperity of that country were laid during the period of reasonable protection, in fact of reducing duties. Australia should not be too wise to learn from others. We should reduce our duties in order that we may get, at a reasonable price, those goods which we cannot produce economically.
I trust that the committee will endeavour to apply some of the principles I have laid down. We must replace indiscriminate protection by a system of discriminating tariffs. A clear line of demarcation should be drawn between articles that are readily consumable and capital plant equipment. The whole tariff should be re-classified. It consists of about 600 items, whereas the Canadian tariff includes 1,188 items, and the United States of America tariff 10,000 items. The classification of the latter was drawn up after consultation with the best business and commercial brains in the country. We should do the same, and then the tariff should be made definite and absolute, instead of leaving, as we do at present, too much to ministerial discretion and departmental interpretations. Uncertainty as to the application of the tariff is more harmful to business than are high duties. Let us have a comprehensive classification, and then set to work to eliminate all duties on machinery and capital plant equipment that cannot be made commercially in Australia. The immediate effect of such a policy would be a drop in price levels in this country; then, a lower duty would effectively protect other .commodities. Our face would . be definitely turned towards lower prices, better methods of production, bigger output, and greater purchasing power. Instead of being affected by the vicious circle in which we are enmeshed at the present time - a high tariff, unprofitable production costs, lower purchasing power, general unemployment, and difficulties of every kind, both governmental and private - we should enjoy the benefits 6’f a’ beneficial circle. We should be able to develop a very extensive field for the operation of British preference, and would have an instrument that would enable us to bargain with Great Britain for substantial assistance in the marketing of our staple commodities. Mr. Dalton has pointed out that, at the present time, Great Britain supplies Australia with 85 per cent, of her requirements of certain commodities, the value of our imports of which is £55,000,000 annually; but she supplies only 30 per cent, of our requirements of other commodities, our imports of which have an equal value. I am satisfied that, if we were to make this gesture, we should not merely help ourselves materially, but also be able to bargain with Great Britain.
– We have a great deal now with which to bargain.
– We should then have a great deal more. If, at the same time, we can benefit both ourselves and Great Britain, we should do so. If we were to obtain from Great Britain nothing more than the imposition of . dumping duties with respect to the surplus production of other countries of ‘ commodities that we produce, that would tend to stabilize our prices and to improve materially the return that is received by our primary producers. We should also be in a position to bargain with other countries, . as Canada does. , Canada has adopted the policy of entering into a special arrangement with countries that agree to do so, to keep her duties on the same level as theirs. Such a practice would have the effect of improving our relationship with other countries. [Quorum formed.]
I regret that Government supporters are not sufficiently interested in this matter to listen to the debate upon it. They should give us the reasons that have actuated them in lending their support to such a restrictive tariff, and some indication of the period for which they desire that these embargoes shall operate.
We must try to understand that commerce means the transfer of goods from one individual to another, and from one nation to another. The state of mind that views imports as something vile and offensive is absolutely illogical. Imports are what we receive as payment for our exports. If there are goods that can be produced more cheaply and more satisfactorily in other countries, we should take them in return for those that we can produce more cheaply and more satisfactorily. If we did that, more employment would be provided for our people, and our country would develop at a more rapid rate. Such a policy would ensure the most economic use of our man power, and the continuous improvement of our equipment. We have the great staple commodities that the world needs. If we can supply at a reasonable price the products that the world must have and must buy we should not place any restriction upon their production here at the cheapest possible rate and in the most efficient way. The first step towards that end is to cheapen the machines of production. That would increase the power and the working capacity of the nation as a whole, even without a greater population. It would tend to enlarge output, cheapen prices, improve the saleability of our goods, increase employment, enable us to keep pace with Canada in regard to population and wealth production, and provide us with a beneficial instead of a vicious circle. We should then be enabled to maintain our standards of living, improve our position economically and cope with all our difficulties much more satisfactorily than we have done in the past.
.- I have been deeply interested in the debate so far as I have heard it. The further the discussion has gone, the more complicated the position has become in its application to honorable members opposite. One minute some of them are protectionists, and the .next they are free traders. I admit that quite a number of them have been outspoken in their views on the fiscal question.
The fiscal question is a very serious matter to Australia to-day, and I congratulate the Government upon the attitude that it has adopted towards it. The right honorable member for Cowper (Dr. Earle Page), early in his speech, dealt with the iron and steel industry and it3 subsidiary industries. Unwittingly, he made a slightly inaccurate statement in connexion with the early days of that industry in Australia, when he said that it had commenced and languished under freetrade conditions. That is only partially true. It is refuted by the following paragraph that appears in a report of the Tariff Board, issued in 1926-27:-
In 1875, the first blast furnace was erected at Lithgow for the production of pig-iron, and continued struggling for existence until 1882, when the production of pig-iron was discontinued. The industry here was kept alive by Mr. Sandford, by the production of merchant bar iron. In 1900 he erected the first steel furnace in Australia, .with a capacity of four tons per cast.
A better and larger type of blast furnace was erected in 1907, but the rest of the plant had become antiquated owing to the rapid development that had taken place in the economical production of iron and steel.
I wish to lay particular stress upon the following : -
The New South Wales Government had endeavoured to assist Mr. Sandford by assuring to him contracts for railway supplies over a number of years. In spite of this he was compelled to abandon the project, which was taken over by Messrs. C. and G. Hoskins, with the assurance of the backing of the New South Wales Government, which guaranteed the firm contracts until December, 1916.
I may say in passing that the New South Wales Government at that time was a Labour Government; showing that the policy of this Government in the wider sphere of the Commonwealth is truly in accord with the policy of the Labour party. It was rather amusing to listen to some of the remarks of the right honorable member for Cowper in regard to what had happened to the iron and steel industry during the six and a half years of the regime of the Government of which he was a member. A government holding similar political views had charge of the affairs of the Commonwealth during the previous six and a half years. It is interesting to note what was done by those governments to develop the iron and steel industry in Australia. In the year 1921-22 the value of metals, metal manufactures and machinery imported into Australia was £25,096,571. In 1926-27 the value of the imports of those commodities under, the last Government had increased to £45,498,794. Those figures furnish a sufficient and an effective reply to the statement of the right honorable member regarding what the last Government did towards developing the iron and steel industry in Australia. T am particularly interested in this industry, having spent the whole of my life in it prior to entering this Parliament. I take pride in the fact that Australian artisans are second to none in the world in their intelligence and their will to work. The opportunities of employment were restricted under the tariff policy of the last Government. The work turned out by Australian artisans is more than comparable with that turned out in any other part of the world. Following upon the figures that I have already quoted, I propose to give others showing the value of the importations of manufactured and partially manufactured goods and raw materials in this industry during three periods. They reveal the fallacy of the argument that has been put forward by the right . honorable ‘ gentleman. In 1925-26, the value of the imports of the materials that I have mentioned was £7,375,000. In 1926-27 the value decreased slightly, to £6,171,000. But, strange to relate, in the last year of the regime of the Bruce-Page Government, the amount increased to £8,739,000. Why should that have been when we have in Australia 98 per cent, of the raw materials that are needed for the manufacture of anything that we require in the iron and steel and subsidiary industries. It may be interesting to some honorable members who scout the possibility of this industry developing in Australia, to learn that, in spite of the disabilities that have had to be overcome by those who desire to develop it, considerable progress has been made in it. I shall now quote a few interesting facts from the résumé of the Newcastle Steel Works, better known as the Broken Hill Proprietary Company Limited. These facts should effectively answer the point raised by the right honorable member for Cowper (Dr. Earle Page) in respect of the supply of raw materials. The Broken Hill Proprietary Company Limited at Newcastle, Iron Knob, Whyalla, Devonport, and its various quarries, have invested capital totalling £6,250,000. On the 24th January,1913, the first test pile was driven for the blast furnace foundations, and the first vessel carrying plant and material arrived in September, 1913. The works were built on what was previously regarded as waste swamp land. During the first five years, 44,250,000 firebricks were used in the building of furnaces, &c, at these works. Furthermore, thousands of tons of steel, used in the various extensions to the plant, and all the plates and structural steel work required for the blast furnaces were supplied from the works themselves. Yet honorable members opposite decry the possibility of developing the iron and steel industry in Australia. The first blast furnace was “ blown in “ on the 9th April, 1915, and the first rail was rolled on the 24th April of that year, two years and three months from the date of commencement of construction. More than 95 per cent. of the materials used at the steel works are produced in Australia. There are 26 miles of standard gauge railway and 3¼ miles of narrow gauge track in use at the steel works. A wharf 1.800 feet long has been constructed and well equipped for the rapid discharging of raw materials, such as ironstone, limestone, &c, and outward loading of pigiron, steel products, benzol, &c. Under normal conditions, the number of men employed by the Broken Hill Proprietary Company Limited directly in the industry are: - Newcastle, 5,739; Iron Knob and Whyalla. 700 ; and at various quarries, 150, making a total of 6,589 employees. In addition, it is estimated that the following men are afforded indirect employment: - On the company’s and other steamers carrying raw materials and products, 500; in allied industries - Messrs. Rylands, and Messrs. Lysaghts, of Newcastle and Sydney - 1,200; on the supply of coal and other materials, apart from the company’s employees, 3,500 ; or a total of 18,378 employees in this industry alone. The number of shareholders in this company, at present, is 10,300. This is one of the industries that will benefit by the Government’s tariff policy. The weekly wages paid under normal conditions amount to - Newcastle Steel Works £30,000; Iron Knob and Whyalla, South Australia, £3,250 ; Devonport, Tasmania, £250 ; and at the various quarries, £500; making a total of £34,000, equal, per annum, to £1,750,000 direct, without taking into account any subsidiary companies or allied industries. I have visited these works, although they are not in my electorate. I represent an electorate in the city of Sydney. The steel works are in Newcastle, and Newcastle is in Australia. As a member of this Parliament, it is my duty to make myself conversant with anything that is likely to benefit this country, irrespective of what part of the Commonwealth may be affected. The iron and steel products despatched from the works total per annum - by steamer 155,000 tons, and by rail 93,000 tons; a total of 248,000 tons of manufactures. Approximately one-third of the Kalgoorlie to Port Augusta railway was laid with rails from the Newcastle Steel Works, and 10,000 tons of steel plates for use in the steamers constructed at Walsh Island, Williamstown, Cockatoo Island Dockyard and other places for the Federal Government, were produced at Newcastle. Yet honorable members opposite had the temerity to state, during the debate on the proposed new lighthouse steamer, that only 14 per cent. worth of steel products manufactured in Australia would be used. Those honorable members are in this Parliament under a misapprehension, because they know nothing about the industries of a country, which they are supposed to assist in governing. I am loath at all times to raise the question of the war, because I think that the sooner we forget it and its aftereffects the better it will be for everybody. We should instil in the minds of the people the spirit of peace. We should strive for peaceful development and not for the destruction of human life. On this occasion I shall refer to the war, because the Newcastle Steel Works played a certain part in it. This Government, despite the lament of the honorable members opposite, has instituted a policy that will allow this industry to develop. During the war the Newcastle Steel Works supplied munition steel and rails for service in France. A high opinion was expressed by English and continental experts of the munition steel, of which 17,900 tons were rolled and shipped to England, and 5,600 tons of rails were also rolled for war purposes. I cannot understand why honorable members opposite should belittle the activities of our workers who have spent their lives in industry, and should wish to deny them the right of developing those industries in the interests of Australia.
– I do not think that the Australian workmen have been belittled by honorable members.
– Quite a number of honorable members have done that.
– I have not heard them.
– The coal consumption for all purposes at the steelworks is approximately 16,500 tons a week. The quantity of water consumed is 8,250,000 gallons of fresh water, and 280,000,000 gallons of salt water per week. Surely this industry is worth protecting under the tariff policy of this Government. The following are the quantities of raw material produced by the steelworks: - pig iron, 1,827,300 tons; steel ingots, 1,794,600; blooms and billets, 61,300 tons; rails of all sizes, 634,800 tons; structural steel, 134,100 tons; steel plates, 13,700 tons; fish plates, 36,000 tons; guard plates, 5,200 tons; munition steel, 17,900 tons; merchant bar, 282,400 tons; wire rods, 245,000 tons; sulphate of ammonia, 24,800 tons; tar, 18,845,800 gallons; and benzol 1,839,700. In addition, when the coke ovens are working at full capacity the works produce weekly 100 ton3 of sulphate of ammonia; 82,000 gallons of tar; and 25,000 gallons of benzol. Is not this industry worth protecting, particularly when* it is but the master portion of the whole? I come now to the subsidiary industries. The iron stone received by steamer from the company’s quarries at Iron Knob in South Australia, is mechanically discharged by means of two electric grabs, each of a capacity of 300 tons per hour. Yet the right honorable member for Cowper has said that Australian machinery is fifteen years behind the times. The ironstone, together with the fluxes - limestone and silica rock - and the coke fuel is mechanically discharged into the furnace at the top. The plant consists of three blast furnaces - one with a daily producing capacity of 600 tons, and two with : daily capacity of 450 tons, producing a total of 9,800 tons per week. In addition to these three blast furnaces, one small blast furnace with the capacity of 600 tons per week is held in reserve for the production of ferro manganese, or special grade foundry iron. The steam is supplied by twelve Babcock and Wilcox boilers, heated by waste gas from the blast furnace. These furnaces, when all are in blast, would consume per annum 800,000 tons of ironstone from Iron Knob, Spencer’s. Gulf ; 500,000 tons of coke from the coke ovens at works from Newcastle coal; 26,000 tons of silica rock from Gosford, New South Wales ; 193,000 tons of limestone from Devonport, Tasmania, and Taree and Attunga, New South Wales; and 300,000 tons qf phosphate rock from Nauru and Ocean Pacific Island. Those particulars relate to raw material. I shall now refer ‘ to the Walsh Island works which face the works of the Broken Hill Proprietary Company Limited on the opposite bank of the Hunter River. The ship-building industry is under the disadvantage at the present time of a tariff of 25 per cent British, 30 per cent, intermediate, and 35 per cent, general on all vessels up to 1,000 tons. After a close investigation, the Government has decided to grant to the shipbuilding, and to the iron and steel industries generally increases in duties from 25 per cent. British, 30 per cent, intermediate, and 35 per cent, general, to 50 per cent., 60 per cent, and 70 per cent, respectively. Australian merchants, erstwhile importers and Australian purchasers now have an opportunity to show their loyalty to their own .country by assisting in the development of these industries. [Quorum formed.’] In dealing with the “Walsh Island Dockyard, I intend to show that the tariff proposals of the Government can be justified.
For the benefit of those honorable members who are not familiar with the ramifications of the iron and steel industry, I may mention that the “Walsh Island works were established on an area of land that has been gradually extended until it now covers 145 acres, and there is a wharf frontage to the southern arm of the river of 2,000 feet. Originally equipped for ship-building and ship-repairing in all its branches, bridge-building and general engineering, it has, through slackness in the ship-building trade in Australia, developed other outlets for its activities, including all-steel car construction for railway work, railway rolling stock, electrification work, welded steel pipe lines and cast iron pipes for all services. These works attained such, a high state of efficiency in 1927 in the construction of steel carriages that these were being turned out at the rate of one a day ; but the Government of New South Wales, which was of the same political colour as the so-called Nationalist party, ceased to give contracts to Walsh Island, and ordered its rolling stock from overseas, although carriages now used in Sydney are better than any others seen on Australian railways, and were made at Walsh Island.
– Has the honorable member gone into the subject of comparative costs?
– That question was raised on Tuesday in connexion with the proposal for the construction of a lighthouse steamer at Cockatoo Island. Do honorable members opposite ever consider the deplorable condition of the families of the workers of this country, who are crying out for sustenance and cannot get it, because their bread-winners are refused the right to work, owing to the policy of the late Government in flooding Austra lia with the manufactures of cheap-labour countries ?
– That is due to this tariff.
– =The underlying reason is that the party opposite favours the policy of importation from abroad, rather than that of development of local industries. Taking the average wages paid for skilled and unskilled labour, a workman in Australia receives 99s. per week, compared with 53s. in Great Britain, 33s. 3d. in Germany, 33s. in France and 26s. lid. in Belgium in the same industry. That is why . honorable members opposite are anxious to let contracts abroad for work that could be done in Australia.
– What is the use of high wages if 20 per cent, of the workers are not enjoying them?
– The honorable member for Henty (Mr. Gullett), would not care if 85 per cent, of the workers were unemployed.
At the end of 1928, the Walsh Island Dockyard and Engineering Works gave employment to 2,500 men, and it is the aim of the management to maintain and increase the activities of the works and to improve the methods adopted there.
The drawing office, from which are issued all plans, specifications and instructions for work which is to be carried out in the various Shops, has a floor space of 3,300 square feet. It is well lighted and well equipped with all necessary instruments for duplicating, printing and photographic work, and attached to it is a fire-proof safe, in which are kept the office records. In passing, I may say that I had the pleasure of making a thorough inspection of these works, and, as a practical man in the industry, I applaud the action of the management in providing equipment that compares, perhaps, more than favorably, with any other plant in Australia. The following particulars of the. plant and of the work that can be done in these yards were published in January, 1929: -
There are three slipways or building berths in the shipyard, on which have already been constructed vessels up to 6,000 tons deadweight, and two patent slips for ship repairs and cleaning. The slips are spanned by two 4-ton Sir William Arrol’s cantilever cranes with 95-feet radius, and a 4-ton cantilever travelling crane, designed and ‘built at Walsh Island, and they are also served by two 10-ton Goliath Alliance travelling cranes. All cranes are electrically operated. At the present time the wide, or No. 4, slipway, is occupied by tlie new “15,000-ton floating dock, which is now being constructed for use at the island.
On Friday, the 5th October, 1928, the Hon. £. R. Bavin, K.C., Premier of New South Wales, launched the centre or main section of this dock, which has been designed to suit local conditions, coupled with Admiralty requirements in terms of the Commonwealth subsidy. As originally arranged, it will be in three sections of approximately equal lengths] and of the self-docking type, any two sections being capable of docking the third section, and also, for quick docking of the smaller coastal vessels, the dock will be operated in two separate units, one length of 210 feet as one unit to lift 4,000 tons, and one unit of two -lengths 420 feet, to lift 11,000 tons. Both of these units are self-contained, electric power being generated on the dock by Diesel-driven generators. When the two units are connected together, the lifting capacity is 15,000 tons; length 030 feet and clear width of entrance 82 feet. Two sections of the dock have now been built, and are being completed as the larger of the two units mentioned above. This dock, which, under naval agreement, must be available for service anywhere, will be capable of being towed to sea in one length and moored in open water. Whilst at Walsh Island, however, it will be moored off the foreshore by three steel lattice booms, each 126 feet long, secured at the shore end to anchorages of concrete.
– What is the object of furnishing all these particulars?
– To justify the Government’s protective policy. I have said that quite a number of jobs have been done at Walsh Island for the Commonwealth Government, and much work has also been carried out there for the New South Wales Government. I now turn, to the carriagebuilding sheds, in which all-steel car bodies are constructed. Again, 98 per cent, of the material used is of Australian production -
In the northern end of this shop are placed the jigs on which the body, sides, ends, roofs, &c, are built before being placed in position on the underframes ; further down the shop the construction and fitting of the cars is finished, windows, seats, lights, and fittings put in, and the cars are then painted ready for shipment. The, cars - the output of which equals one per day - are now transferred from the shop by a traverser and run on to a special punt for use with rail ramps, one at a point on the south end of the island, and a corresponding landing ramp on the mainland, so that the cars or t other rolling stock can be directly transferred to the main line for de livery to the Railway Department. Coining back to the executive offices, we can visit the joiners’ shop on the way. This shop, which is under the same roof as the loft, has a floor space of 15,133 square feet. It is fitted with the most modern wood-working machines, and can undertake all classes of work, including ship joinery, cabin furniture, and fittings for both ships and railway cars. Other shops are the paint shop, electricians’ shop, and the upholstery department, all arranged to economically handle their particular class of work. To complete this brief description of the establishment, it is necessary to state the nature of the power available. As far as the main driving power is concerned, the plant is well equipped with motor-driven air compressors, hydraulic pumps, motors, &c, for the whole of the works at its busiest periods. The electric power is supplied through three submarine 3-core paper insulated lead-covered double steel wire armoured cables. This current supply is from the Railway Department’s power house, ‘at 6,600 volts.
– In discussing the first item of a tariff schedule, an honorable member is expected to deal with tariff matters generally, and not to discuss an individual item in great detail.
– My object is to show that the proposals of the Government are justified. With all due respect, I. .claim that I am within my rights in dealing with this important industry at some’ length. Honorable members opposite who have criticized these tariff schedules have shown that they know very little about some of the industries to which they have referred, and I feel that I am entitled to reply at some length to their remarks. The cheap criticism of the Australian workers which is all too frequently indulged in in this chamber, is altogether unjustified. On the occasion cif the launching of the second section of the floating dock at Walsh Island last year, certain speakers referred favorably to our tariff policy in general, and to the Australian workers in particular. The account of the proceedings on that occasion which was published in the Newcastle Sun of the 16th March, 1929, was most interesting. The following paragraphs are from the report of the speech of Mr. Buttenshaw, Minister for Works in the New South Wales Government : - “ Many people,” said Mr. Buttenshaw, “ are opposed to State industries; but as long as they are paying concerns they will have my support, and I :will always give my fullest support to make them pay. To-day we have seen the fine result of work being carried out on this island. The floating-dock, which was to make such a difference to Newcastle, and, in fact, to all Australia, went to show what could he achieved under clever management and with co-operation of mcn and manager.” Such industries, he continued, must be recognized as doing a great national service, and there was no reason to despair about such an enterprise. He congratulated Mr. Waters on his great perseverance in making the island pay, and he congratulated the men on what had been achieved by them. In referring to the steel carriage, Mr. Buttenshaw said that it was owing to clever organization and much thought that the contract was gained by Walsh island. Already 000 carriages had been ordered, and 2(;(i have been handed over to the Railway Commissioners, who were very pleased with thu work. In speaking of the price of the carriages, Mr. Buttenshaw said that they were built at the present time at £1,000 less than they could have been two years ago. And we can still show a profit. Prices can only be reduced by keen competition,” he said.
The newspaper reported the remarks ofMr. A. C. Waters, the general manager of the dockyard, as follows: -
There are no ships under construction in Australia, to-day. The reason for that position is that there is a meagre duty of 25 per cent, on ships up to 500 tons gross, and at the [) resent time there is no duty on any vessel over this tonnage. In Australia we have a protective policy, therefore our materials cost us nearly twice as much as the materials cost the overseas ship-builders. The wages paid here are twice as high as those paid overseas, ti nd the working hours are shorter.
I have already quoted figures to show that the wages paid in Australia in this industry are 87 per cent, greater than those of the United Kingdom, 200 per cent, greater than those of Germany, 202 per cent, greater than those of France, and 207 per cent, greater than those of Belgium. Mr. Waters went on to say -
Wo would expect the cost of the whole job to be about twice as much as one from overseas, but with the present activity in other linos which we have had to seek through the dearth in ship construction, and consequent turnover, and conditions existing in the establishment, we could build ships in Australia to-day with a 50 per cent, tariff wall.
The Government has now granted that measure of protection, and it rests with those engaged in the industry to carry out their undertakings. The report continued as follows: -
Mr. Waters added that whether the protective policy bc right or wrong, wise or unwise, they, as engineers, were interested in seeing a consistent policy in Australia - a policy which would extend activities in this country, and allow of a training ground for the younger members and the gradual establishment of such an important industry as ship construction.
I believe that this industry is of national importance to Australia and that it should be established here on sound lines.
Certain honorable members, a few days ago in another debate, said that the cost of ship construction, and of other manufactures in Australia, was excessive. Seeing that I represent the workers in some of these industries, I feel that I should refute the charges that have been made. The honorable member for Perth (Mr. Nairn) accused the Government of adopting a policy which would retard the industrial development of Australia, and wrongly accused the workers of acting in a way which was not in the best interests of the country. In this connexion he said : -
The chief advocacy of this ridiculous expenditure comes from honorable members from Sydney, who are anxious to provide work for the benefit of the staff at Cockatoo Island Dockyard. For too many years the taxpayers have been called upon to provide nourishment and succour for that class of worker. I have no bouquets to throw at the men employed at that dockyard. If they can build only one ship at the cost at which two vessels can lie obtained from overseas, the staff there has not done its duty to this country, and if such men are out of employment it serves them right.
The honorable member went on to say -
A man who loafs on his country is no friend of mine.
I agree with that remark, but the loafers are not all in the ranks of the workers. He proceeded as follows: -
Unemployment is what he deserves. The record of Cockatoo Island Dockyard ever since its establishment is that the work that it turns out costs about double that of the same class of job overseas. Furthermore, it hai not done good work.
I should be unworthy of my position if I failed to deny emphatically a statement like that; but I do not ask honorable members to accept only my word that the statement is incorrect. I refer them to certain passages in the evidence given before the Public Works Committee on the proposed construction of a steamer for the lighthouse service. I asked Mr. Thomas” Hill, Commonwealth DirectorGeneral of Works, what he thought of the Australian workman, and he replied, “We have found the Australian workman quite all right.” Mr. George Hastie, mechanical engineer in charge of ships, Commonwealth Department of Works, was also examined on this subject, and in reply to a question by myself he said -
The Australian artisan is just as good a workman as the overseas mau. Australian workmen would be quite competent to handle a job of this description.
Incidentally, Mr. Hastie made these remarks -
Seeing that the ship-building industry has yet to bc established I should certainly say that it would be a good thing to have the ship built in this country and to keep the money here.
L consider that those statements are a sufficient reply to the unfounded charges of the honorable member for Perth (Mr. Nairn), who showed a complete absence of understanding of the calibre and character of the Australian workman. But I have replied to his statements by quoting the evidence of expert engineers who have been in close touch with our workers, and who know what they are talking about. A legal practitioner, like the honorable member, who does not appear to know the first thing about the environment of the Australian workers, or the workers in any other part of the world for that matter, should not criticize them.
I wish now to deal briefly with the desirableness of manufacturing motor cars in Australia. Like the right honorable member for Cowper (Dr. Earle Page) I look forward to the day when we shall be manufacturing complete motor cars here. If I had my way we should be manufacturing them here now or going without them. I know that the Minister for Trade and Customs (Mr. Fenton”) has had many matters to occupy his attention since he has “been in office, and that he is performing his duties capably and well. Possibly, he is doing more work than he should be doing. Consequently, I am not altogether surprised that the necessity for providing adequate protection for the manufacture of shock-absorbers for motor cars has escaped his attention. At the present rate of new car sales in Australia it is estimated that from SOO to 1,000 sets of shock absorbers could be placed every week, and that this trade would represent about £200,000 per annum. In addition to that, many sets of shock-absorbers could also be sold through the motor accessory houses, which would increase the business appreciably. Messrs. Duly and Hansford, of Carrington-road, Marrickville, Sydney, New South Wales, have a thoroughly up-to-date plant, staffed with first-class mechanics, for the manufacture of these accessories. The worksare in my electorate, and I am, therefore, well acquainted with them.. This firm has always paid well above the award rates to its employees, and has done everything possible to develop this industry, but, owing to the fact that adequate protection has not been granted, it has had recently to dismiss a few of its employees. If the Minister will agree to the imposition of an additional duty the men whose services have been dispensed with would be re-engaged, to the advantage not only to the industry, but indirectly of the whole community.
– What rate of duty does the honorable member suggest?
– The rate suggested was mentioned in a communication I received from the firm, which I handed to the Minister for his information. I do not think it is a big increase on the existing duty; but it would be sufficient to enable the industry to carry on successfully. 1 think I have dealt rather extensively, and as effectively as my ability permits, with the iron and steel industry. I trust that those honorable members who are not fully acquainted with the potentialities of the industry I have just mentioned will be sufficiently broad-minded to view an increased duty from a national viewpoint, and give it that additional protection to which it is entitled. Honorable members opposite will, I am sure, realise that whatever the Government does in this respect is with a sincere desire to develop the secondary industries of this country. I have referred somewhat at length to the necessity of encouraging the ship-building industry in Australia, because we shall never be a self-contained nation until we construct in Australia the vessels required in our mercantile marine. I shall conclude by heartily congratulating the Government upon its efforts to stand whole-heartedly behind its fiscal policy in an endeavour to encourage Australian secondary industries.
.- The honorable member for Swan (Mr. Gregory) has moved the following amendment : -
That after the word “That” (first occurring) the following words be inserted: - “consideration of the tariff be postponed with a view to determining what action is advisable with a view of granting relief to the producers of Western Australia, whose progress and prosperity are seriously imperilled by the high tariff policy of the Commonwealth.”
I move -
That after the words “ Western Australia “ in the proposed amendment the words “ and South Australia “ be inserted.
– Why not include New South Wales?
– It may be desirable to include the primary producers of New South Wales who are adversely affected by the present tariff; but that is a responsibility of honorable members representing that State. Before dealing with the general question of the adverse effect of the Government’s fiscal policy upon the primary producers of Australia generally, and South Australia in particular, I wish to strongly protest against the unnecessary delay which has occurred in making available to Parliament the reports of the Tariff Board in connexion with the various investigations which have been undertaken during the last few months with respect to certain items in the tariff schedules. I believe many of these reports would have been available some weeks ago but for the return from abroad of the Minister (Mr. Fenton). The Assistant Minister (Mr. Forde) definitely promised that some of these reports would be available three weeks ago.
– Why does the honorable member blame me?
– I am not blaming the Minister for the promises made by the Assistant Minister; but I assume that he is in some way responsible for the delay which has occurred in presenting them to Parliament. It is regrettable that the committee is not in possession of the information contained in these reports, and of the evidence given on oath. Conflicting evidence is often given, and if the reports and evidence were before us, honorable members would be able to determine the value of the evidence tendered to the board. Frequently witnesses appearing before the board supply honorable members with copies of the evidence they have tendered; but that is not as valuable as the complete evidence and the recommendations in the Board’s reports. [Quorum formed.]
– I can assure the honorable member that I am not personally responsible for the delay in the presentation of the Tariff Board’s reports. The printing of the budget papers and other work has caused congestion at the Government Printing Office, and the reports cannot be made available in less than a week.
– I accept the Minister’s assurance that he is not personally responsible; but it is regrettable that some of these reports were not placed at our disposal some months ago. As some of the itemsconcerning which inquiries have been conducted are included in the schedule, the board must have dealt with them some time ago, and I do not know why the reports were not printed before any congestion occurred at the Printing Office. In addition to the difficulty which honorable members experience in considering the tariff schedules, the public has not been informed concerning the representations made for higher duties, and why certain interests have received special consideration. Honorable members have received circulars concerning the alterations made in the import and excise duties on alcoholic liquors. In the first tariff schedule introduced by this Government, discrimination is shown between spirits bottled in bond under customs supervision, and spirits removed from bond in bulk and bottled outside, or, in some cases, not bottled and sold over a bar. The suggestion in one circular is that this discrimination is to suit one firm of distillers to the detriment of another distillery. But since the schedule was introduced the firm that was supposed to be penalized has amalgamated with its competitor, and I believe honorable members have to-day received a further communication to the effect that the first circular was incorrect. The latest circular states that a big Scottish combine made no representations in the matter of discrimination, although after such discrimination has been made it considers it satisfactory from its view-point. I find it difficult to believe that the first circular sent out by the Queensland Licensed Victuallers Association is entirely .accurate. In one instance discrimination was shown in the November schedule with respect to local spirit, but it was not extended to the imported spirit until the December schedule was issued. It would appear that the Scottish combine did not influence the Government, or whoever was responsible for drawing up the schedule, in making this distinction in our customs and excise laws. The facts of this case have gone from one end of Australia to the other, and the only way in which public opinion can be satisfied is by giving the House the full facts concerning the representations made by the different parties and submitting the evidence given in support of such a partial policy. The firm mentioned in the circular which has specially benefited by this discrimination has a monopoly of the production and sale of locally-manufactured bottled whisky, and in order to determine the value of the circular we should know who is interested in the business. There is nothing of which the public is more jealous than the creation of monopolies, through tariff legislation or any other action hy a government. Until the reports are available, one cannot judge of the extent to which a monopoly has been created in. this case; but a list of the shareholders has been taken from the records of the Victorian Companies Office, .which were examined towards the end of last year after the introduction of the tariff schedule that made this innovation. At that time there was only one debenture holder - the Bank of New South “Wales. There were 365,000 shares paid lip, out of a total capital of £566,000. The shares were held by different holding companies. The Australian Distillery Coy. Ltd. held about 159,345 ; a firm named C. W. L. Propty. Ltd., 264,375; Brinds Ltd., 119,273; Breheny Bros., 22,000; ?and J. P. Breheny, F. E. Thoneman, and C. L. Brind one share each. The holding company of whose identity I was not aware, is C. W. L. Propty. Ltd. Its shares number 370,000, the largest shareholders being P. F. Cody, 92,105; John Wren, 92,105; F. A. Leigh, 44,452; T. H. Connell, 10,742, and others holding from 20,000 shares downwards. I submit that, it is of very great importance that the public should be acquainted of the representations that have been made, and the consideration that has been given to them, at the earliest possible date after tariff schedules have been laid upon the table. This is not the only monopoly, or comparative monopoly, that has been created. Professedly in the interests of local tinmakers, a discrimination has been drawn between petrol that is imported in bulk and petrol that is imported in containers. Up to the present time, that has had the effect of making it’ very difficult for small oil-producing firms to send their petrol to Australia. Only the very large companies own tank steamers; therefore, the number that can market their product economical^’ in Australia is small, and it is generally supposed that they work under an agreement. The importation of petrol in bulk certainly provides some work in Australia for those who make containers; but, on the other hand, there is very much less handling because the petrol is pumped from the ship to the bulk storage, and is distributed in bulk wagons. Labour charges, therefore, are very low. When petrol is imported in packages, it has to be handled at many points. It would be interesting to learn what percentage of the price of bulk petrol is represented by labour, compared with petrol imported in containers. A charge of this sort is a direct tax upon those who are compelled to use petrol that is sold iri containers. They are the people who live in outside areas, and are too far from a bulk station to store their own petrol in 40-gallon drums. It is those people who are paying for this monopoly that is being given to practically the biggest oil interests in the world. Information in relation to such cases should be available to the public and to the House, for the purpose of discussion, at the earliest possible moment. Duties that are imposed, or bounties that are given to one section, or one pet industry, raise disquietude in the minds of the public. I entirely dissociate myself from any suggestion of the least departure from personal integrity by the Minister. That gentlemanis much better known to other honorable members than he is to me, and they all speak in the highest terms of his personal integrity; and what I have seen of him amply confirms that opinion. But, however high above suspicion he himself may be, he and the Government owe to this Parliament and to the country as a whole, the duty of seeing that cases like this receive the fullest possible publicity and are made a question of government policy only after there has been the most careful public inquiry by the properly constituted authorities.
The policy of developing secondary industries, if it is to be carried out up to the hilt, with a reasonable measure of economy, must be a centralizing policy. New industries, if they are to be carried on as cheaply as possible, must be situated near the source of their raw material. The most important raw material is power. The situation of the coal-fields of Australia is fairly central; and it is near the coal-fields that one would expect secondary industries to grow up, and there it is inevitable that they must develop. The best coal-fields are situated in the eastern States. But an industry that is to produce on a large scale must not only be situated in close proximity to the best coal-fields but must also be as near as possible to the centre of its market; and in Australia the largest market is in the two most densely populated States, Victoria and New South Wales. Costs fall evenly upon all the consumers in the Commonwealth; and so far as they can pass them on they do so, until eventually the largest portion settles on a few industries, of which the most important are the export industries. It is the export industries upon which States like South Australia, and to a greater extent, Western Australia, depend. To show that that is not the extreme statement of one who is wilfully opposed to the building up of new industries in other parts of Australia, I shall quote the opinion of the Labour Premier of South Australia, expressed on the 19th May last, soon after he assumed office. He is reported as follows: -
Mr. Hill complained bitterly of the effect of the tariff in South Australia, which, he said, as a rural community, suffered from it far more than the eastern StateR. As a result “? representations to the Federal Ministry, a grant of £360,000 a year for three years, to meet the tariff losses had been made to the State, but this was considered quite inadequate.
Within a day or two of the introduction of the June schedule, the chairman of the Chamber of Manufactures in South Australia stated publicly to the press that, although its operation had benefited certain industries in South Australia, on the whole the disadvantages suffered by other industries were considerably greater than the benefits derived by those that were suited by it. According to a report that appeared in the Adelaide press of the 8th instant, . that’ chamber is calling a meeting of the Chambers of Commerce, the Employers Federation, and the Chambers of Manufactures in the States of Western Australia, Tasmania and South Australia, to determine what action can be taken to meet the disabilities that arc being suffered. At a time like the present the effects of additional costs are felt in a particularly heartrending way in ‘ a State like South Australia. They manifest themselves principally, not in a reduction of profits or a dispensing with luxuries, but in the spread of unemployment. The honorable member for Lang (Mr. Long) said that the policy of protection put into operation by this Government had been the means of providing additional work for men in his electorate. I am quite prepared to believe him; but I contend that many of those new jobs have been provided at the expense of men in other parts of Australia. To some extent that is inevitable with any tariff policy. When, times are good and industry is expanding, the additional costs are not noticeable ; but when employment is restricted, in a time of depression such as that through which we are now passing, some men are compelled to work short time and others lose their jobs. Besides causing men to lose their jobs, heavy customs duties fall with great severity on the primary producers in export industries. On other occasions I have quoted figures to show ,he precarious condition of those who depend on the growing of fruit and wheat for a livelihood, and also the smaller graziers. In many cases these primary producers are receiving less than the’ basic wage; indeed, many farmers are carrying on at a loss. Despite the seriousness of their position, the Government has imposed a duty- on fertilizers. It is generally recognized that Australians do not use sufficient fertilizers. It would be better both for the farmers and for the country as a whole if more fertilizers were used. Although the Government knew that many primary producers find it exceedingly difficult to purchase adequate supplies of fertilizers, it has now placed a primage duty of 2^ per cent, on many of the raw materials used in making them, either directly or indirectly. This duty will affect phosphate rock, corn sacks, twine, jute, timber, and other materials used by primary producers. Where are they to find the money to pay this additional duty? Those who are operating on a large scale may be able to find the money by discharging some of their employees; but surely honorable members will agree that the imposition of duties which will have that effect is about as cruel a thing as any government could do at the present juncture. The Government has gone still further, in that it has placed an embargo on the introduction of certain classes of agricultural machinery. I admit that, simultaneously with the imposition of that embargo, there was a reduction of 5 per cent, in the price of locally-made agricultural machinery. I also admit that, compared with the protection given to other industries, the protection afforded to the implementmaking industry is small. Probably, that industry is as efficient as is any industry in Australia. That it needs protection at all is due to the excessive protection given to some of its essential raw materials. The Deputy Leader of the Opposition (Mr. Gullett) told us yesterday that the reason why a section of that industry was leaving Australia was that it could not get one of its essen- ‘tial raw materials at world parity for the export portion of its business. The serious effect of imposing duties on raw materials is not always realized. For that reason, there should be the most careful investigation before additional duties are placed on such articles as. steam shovels, about which I shall have more to say later.
There are certain industries which every one is prepared to protect. Industries which are essential for defence purposes come within that category. There are other industries which have a reasonable hope of becoming firmly established if given a measure of protection at the beginning. But there are some industries which, at least for many years to come, can be only cripple industries in Australia. In my opinion, an industry which requires more than 50 per cent, protection has little likelihood of ever becoming an asset to the country. On the contrary, it is likely to place a heavy burden on other industries. Every cripple industry which is encouraged not only places an undue burden on the exporting industries; it also takes something from the common stock of resources which would otherwise be available to assist industries for which the country is suited. A study of the bulletin of trade statistics for 1929 reveals that many industries are able to carry on with a protection less than 25 per cent, ad valorem. Nearly one-half of the total duties collected is in respect of items on which the duty is between 25 per cent, and 45 per cent. Duties collected in respect of items on which the protection is over 45 per cent, represent approximately £4,000,000 per annum, or about 10 per cent, of the total duty collected. Industries which require a protection of from 45 per cent, to 60 per cent, ad valorem in order to compete with the products of other countries cost the country more than they are worth. No private business man would expand his business without carefully considering whether it would pay. It is true that in boom times optimists expand their businesses too rapidly; but frequently they burn their fingers badly. It is unfortunate that economic facts are so often lost sight of by governments. They seem to think that any additional production is something necessarily added to the wealth of the country, irrespective of whether that producton costs more than it is worth. If we are to have a policy of protection, it should be reasonable. That is to say, it should be on such a scale as not to amount to a monopoly.
– What does the honorable member mean by reasonable protection?
– With the exception of key industries which are necessary for the defence and stability of the country, no industry is worth encouraging if it needs a duty of more than 25 per cent. A protectionist policy; in addition to being rational, should be applied only to such industries as will be able to supply the bulk of Australia’s requirements of the particular commodity concerned. In some cases, a duty which will give the local manufacturer almost the whole of the Australian market, while not entirely cutting out competition, is justified more than a lower duty, which only secures a portion to him. If a local manufacturer cannot secure from 90 per cent, to 100 per cent, of the Australian trade with a reasonable amount of protection, then he is engaged in a parasite industry which takes more out of the country than it contributes. The difference between catering for 95 per cent, of the local market, and granting a monopoly is small; but that 5 per cent, of competition forces the local manufacturer to maintain his quality and keep his price reasonable. Only by meeting competition will a-ny industry become progressive. The granting of a monopoly destroys enterprise and restricts scientific research, with the result that the industry becomes flabby, and more parasitical as time goes on. It is important that there should be some check on the quality of the goods turned out by protected industries. The protection given to the Australian implement-making industry is, as I have said, moderate. It is not the amount of protection that an industry receives that costs the farmer money. It is the cost put on that industry because of industrial conditions and the excessive protection given to some of its raw materials. There is one phase of the iron and steel industry that certainly needs watching, and that is the quality of castings. The work of casting is one of the most technical engineering processes in the world. I doubt whether the British castings are as good as Swedish castings. There is no comparison between the castings of Australian implements and those of Canadian implements. But that does not directly affect the farmer in the cost of his implements. It affects him considerably more in the cost of spare parts. Many farmers who use Australian implements of the same pattern as Canadian implements, use Canadian, spare parts in preference to Australian spare parts. . Pipe castings have been given heavy additional protection, but, unfortunately, the quality of local castings is not such that the lives of stock should depend upon them. Because of those things, the protection which is given to those products should be reasonable and not prohibitive. Another difficulty in respect of the tariff policyand it applies not only to this tariff, but also to previous tariffs - is the vexatious manner in which it is administered. Much of that is due to overwork and congestion in the department, the uncertainty that exists in respect of many items, and the discrimination which is allowed in varying certain duties. Again - and this does not apply to this Government only - tariff methods are particularly harsh in respect of goods which are already on the water for Australia. That sort of thing is most crippling to the distributing trade in certain States which is mainly dependent on imported goods for its ordinary necessaries.
– The honorable member does not suggest that that has happened recently ?
– I said that it applied not only to this tariff, but also to others. When this Government introduced its embargoes, it did institute a precedent, which, I hope, will be extended to tariff schedules. It allowed goods, which were on the water when the embargo was introduced, to come into this country. I hope that it will extend that encouraging precedent to tariff schedules, and so eliminate the unfair distinction which has been previously made between different parts of Australia, and which has in addition imposed tremendous hardships on certain sections of the community. Certain of the administration is particularly vexatious. I refer to the taxation by Weight on some of the spare parts of essential implements and motor cars. That has led to all sorts of administrative friction and obstruction. Only the other day an assembled sample motor car, imported into this country, had to be dismantled so that the weight of the springs could be checked and the duty paid. In another case protection has been given to an industry which seems to be promising, without any regard being paid to its suitability for the comparatively small Australian market;’ I refer to the carburettor industry. There are something like 50 different kinds of carburettors in use. They are most carefully designed and tested to suit the particular engines for which they are made. They are manufactured cheaply under mass production conditions. The number of machines of any particular make which come to Australia, is comparatively small, and it is inevitable that any type of carburettor must be more costly to make in Australia than in the country in which it is manufactured in mass production for .a certain class, of engine. This, protection which has .been given to the Australian carburettor will con,siderably increase the cost of. imported carburettors for motor-car engines, machine engines, stationary engines, outboard motors, light generating plants, motor tractors, motor lawnmowers, aeroplanes, &c. It is a short-sighted policy to place an additional tax on these engines merely because it is possible to make in Australia carburettors for, say, the Chevrolet or the Ford car, of which there are large numbers in use in this country. Then, in reference to the taxation of capital plant, I have little to add to what was said by the Leader of the Country party. I shall refer only to one case of which I heard the other day. It relates to large excavators, of which, I understand from the evidence before the Tariff Board - and it has not been contradicted - there are only six or seven required each year in Australia. They cost some thousands of pounds each, and the duty is something over £2,000. That is . placing a heavy obstructive tax upon the development of an industry which would probably give permanent employment for years afterwards. Then there is the question of using the tariff to try to effect some immediate improvement in the exchange position. Had the exchange position not been tinkered with by the financial authorities it would probably, by now, have started to correct itself-.
– That is happening now.
– Only to some extent. Had it not been for the tinkering of the banks the exchange position would have undoubtedly provided assistance to our export industries. For instance, the wheat-grower would have gained assistance equal to what he would have obtained if the guarantee of 4s. a bushel had been put into operation. It would automatically have increased the protection to every Australian industry. It would have undoubtedly cost the Government more in buying exchange on London. It would have led to an increase in the price of certain essential imports, such as cornsacks and phosphate rock, but that disadvantage would have been more than offset by the benefit given to industry in respect of the finished product for export. It would have avoided stirring up trouble with other countries, as this Government’s tariff policy has done. It’ would have avoided the danger of the anti-dumping duties as introduced in Germany, and a great deal of the danger of retaliation which has been instituted against Australia. For instance, the wheat industry is seriously affected by the wheat duties of other countries.
– Surely the honorable member is not trying to lay the blame for that at the door of this Government!
– A great deal of it can be laid at the door of this Government. This tariff policy will not help public opinion in England in regard to any extension of the preferences given to our exports. I am not defending the tariff policy of the Bruce-Page Government. That was bad enough, and I did not believe that any policy could be worse until this one was introduced. This Government’s tariff policy is mania run wild, compared with the policy of the previous Government. I shall not add anything to what has been said about trading with the people who trade with us. That subject has been dealt with by the Deputy Leader of the Opposition and the Leader of the Country party. The question of British preferences should have the most serious consideration of every honorable member who speaks on this debate. This tariff has done nothing to assist in extending British preference to’ Australia. In fact, it may even make more difficult our task of maintaining it. To-day, when one part of the world after another is forming blocs and cartels, it is very important that the different parts of the British Empire should co-operate, and, whenever they trade outside their borders, direct it as much as possible to other parts of the Empire. Lately, the Canadian Government has made very substantial tariff concessions to Great Britain, and I hope that our Prime Minister will be able to pursuade the British Government to go a step further in its preferential tariff treatment of the dominions. It is not only a matter of patriotic sentiment, but essentially in our own interests that we, in turn, should extend every possible preference to British goods.
– Why should not the same doctrine be applied to Australia?
– Great Britain gives us very substantial preferences, andI hope that they will be extended. We enjoy one very substantial preference from Great Britain that has no relation to the tariff, and is very frequently lost sight of by the people of Australia, that extended to us when raising money. Until we became involved in our present financial morass Australia was able to borrow in London at a considerably cheaper rate than was obtainable there by some of the large European countries. That was partly on account of our reputation, but it was largely due to the preference that we receive under the Colonial Stock Act, which makes Australian and other dominion stocks trustee securities. That has the effect of giving us a substantial preference with regard to investments on behalf of widows’, orphans’ and various other trusts in Great Britain. That has a far greater tendency to balance our account abroad than many people in Australia realize.
I have one other matter to deal with in connexion with the tariff; that is its effect upon the revenue. If additional employment could be made available in Australia without excessive cost to the people who bought the goods, it would producea very strong case for an extension of the tariff. It is not only the cost to the consumers that has to be taken into account; there is also the cost to the taxpayers. Since the introduction of the new tariff, gin has been manufactured: in Australia, and I understand that the new industry gives employment to four men.
– As many as four ?
– I am not quite sure whether the figure is not two, but I am quoting four to be on the safe side. During 1929, Australia imported 320,000 gallons of gin, and the difference between the excise and the duty is about 15s. a gallon. I do not know what effect the new industry will have on our revenue, but the adverse balance will certainly be vastly greater than the aggregation of the wages of four men engaged in the local industry. We, at least, have the consolation that we shall have the benefit of this “ key “ industry to provide cocktails should we engage in another war. Only during the last few days our revenue has had to be augmented by the imposition of new taxation, including a primage duty, about which I am so much concerned, on box timber and on phosphatic rock. Such taxation, surely born of desperation, can only be paid out of somebody’s employment. That is a very important factor that was not considered sufficiently when these various schedules were hastily evolved. I do not believe that the new tariff schedule will make the difference in the exchange that is claimed. I believe that had the exchange been left alone our recovery would have been more rapid, and that it would have resulted in a less serious spread of unemployment. I am also of the opinion that it would not have stirred up so much trouble for us overseas. Further, we should not have superimposed costs upon the primary producers and on the weaker and poorer States.
I hope that, at an early date, a discussion will take place upon the individual items of the tariff schedule. It is urgently necessary that they should be subjected to the fullest criticism, and the Minister should provide the necessary time for their discussion. No doubt a number of the most costly items would then be sacrificed, to the relief of those who have been hit so badly by the tariff experiments of the Government.
.- I shall address myself briefly to the main principle of protection rather than to individual items of the new tariff. To me protection is an economic weapon and, frankly, I have admitted allegiance to it only as such. I do not approve of protection as a means for raising revenue. Unless it is a weapon of economic value to the country, protection means nothing to me.
Changing circumstances make it necessary for us to revise some of our ideas with regard to protection being an economic weapon. Whether we like it or not we cannot afford to emulate the ostriches by burying our heads in the sand and refusing to acknowledge that we live in a rapidly changing world. Originally the Labour movement had an open mind on fiscal matters. Its followers were freetraders or protectionists, according to their inclination. But as time passed the movement found that it was necessary to incorporate a protective policy in its platform in order to safeguard the conditions for which our workers had fought and which they had obtained against the cheap labour conditions prevailing in countries where organized labour had not made the same progress. Protection, isolated from the human equation, means nothing to me. My experience is that our manufacturers, who are always soliciting protection, are the first to hurl their organization, their prestige and their money against the efforts of the workers. It is imperative, therefore, that the Labour movement, should revise its attitude towards protection.
It is a singular thing that those industries which receive the largest measure of protection are the greatest exploiters of the workers. It is evident that protection to-day does not mean the erection of an economic standard for the workers, but rather the bringing about of pleasant affluence for the captains of industry. Daily the human equation is becoming less, and it seems assured that eventually the workers will be eliminated as an economic unit just as the motor car has eliminated the horse as a beast of burden. In support of my contention I shall quote a statement by Mr. Hoskins, Chairman of Directors of a greatly protected iron and steel industry. Speaking before the Institute of Engineers in Sydney on the 11th March last, Mr. Hoskins said that at Port Kembla they were turning out in one hour what it previously took three days to achieve. He also stated that, aided by modern machinery, three men working at Port Kembla did as much as 75 men on similar work at Lithgow ; that six men at Port Kembla did the same work with one-tenth of the effort, as that performed by 150 men at Lithgow. I am not complaining about that, but I point out that the main purpose of these highly protective tariffs appears to be to encourage the use of labour-saving machinery and to safeguard the investments of capital.
– It is a pity that we cannot invent a cheaper machine to do the? work of Parliament.
– It is, particularly if it would displace the honorable member. I shall quote another example, this time second-hand information. However,I believe that the man who gave it tome knew what he was talking about and considered that it was true. I am told that a short time ago two efficient tradesmen, receiving the full margin for skill over the normal basic wage, did good work if they turned out three enamelled baths in a day. Now, with the aid of up-to-date machinery, two men are turning out 80 baths a day. Yet immediately this tariff came into operation, porcelain baths went up in price to the extent of 13s. each.
I rose particularly to protest against the attitude of certain manufacturers whose industries are highly protected. In the iron and steel industry unskilled workers are employed in relays for a couple of weeks, and then dismissed, and other men are taken on in their places.
Mr.Prowse. - That is rationing.
– This reprehensible practice was adopted before rationing was introduced. I am referring to Hoskins, and Australian Iron and Steel Limited. A workman with sound industrial principles has no hope of getting a job with Australian Iron and Steel Limited, and a union organizer cannot get within rifle shot of it. It is adopting the American method of breaking up industrial organization. Whenever capital from outside Australia is employed by a company it endeavours to introduce the woeful industrial principles to which overseas employers are accustomed.
Recently, the Bavin Government initiated a particularly pernicious type of wage-slashing in New South Wales. When the Bruce-Page Government endeavoured to destroy the federal arbitration system, a huge advertisement appeared in the Sydney Sun showing that the manufacturers’ organizations were behind the movement. These are the bodies which cringe to Labour Governments for tariff assistance.
– They are supporting the present Federal Government.
– I do not want their support.
– The Labour party is getting it.
– It is well known that at the last election one of the biggest manufacturers in the Lang electorate sent his motor cars out in support of Sir Elliott Johnson, a free trader, in opposition to the Labour candidate . who was a strong protectionist. There is clear evidence that Lysaght’s used every possible means of employing “ scabs “ in their industry in preference to unionists. I protest against the action of such manufacturers, who expect the people of Australia to purchase their goods. I regard an employer who wishes to .force wages down as requiring the services of a mental specialist; but there is no, doubt that many large manufacturers ‘eagerly participate in every wage-cutting campaign. I recognize that some manufacturers are prepared to recognize the claims of the workers; by their, organization they take every opportunity of reducing wages. In this age of mechanical production we must see that protection is given to the workers, and that their economic standards are not lowered.
There is an industry at Port Kembla which the Tariff Board agrees is deserving of better consideration than it has received. It is a comparatively small industry, but it employs a good deal of labour, and if certain duties were imposed on the goods that it manufactures, it would provide work for an additional 150 men, who are now living in tents or amid even less hospitable surroundings ; I refer to a metal manufacturing industry, which has installed new machinery that is ready for operation when the necessary tariff protection is afforded. Owing to the present tariff, some of the articles that this factory could supply are coming in from Great Britain and Germany.
– What is the present duty?
– These goods have not been manufactured in Australia in the past, and they are coming in practically free. I refer to various lines of wire and cables that are used by the Postal Department. An industry such as this, in which a comparatively large body of men could be employed, is more entitled to protection than the iron and steel industry, because many of the workmen now employed by the latter industry are merely engaged in installing laboursaving appliances. I object to the antiAustralian attitude of greedy, grasping manufacturers, who are ready to resort to any subterfuge to obtain increased duties, and to ally themselves with any movement to reduce the economic standards of the workers, and break up organized labour.
. -I believe in, and have always believed in, since I have been a member of this Parliament, and am definitely committed to support, a policy of sane protection for those of our primary and secondary industries which need it. I have also a full realization of Australia’s unfortunate economic position. I do not doubt the honesty of the efforts of the, Government to assist the country to a speedy recovery, but I find it quite impossible to agree with the course which it is now pursuing in its endeavour to bring about that speedy recovery. I am referring, of course, to the general tariff policy of the Government. From my point of view it is altogether too drastic. I maintain that the various increased duties and prohibitions have been imposed without proper consideration of the effect they are likely to have. It is true that a few may derive immediate benefit from the operation of the Government’s policy, and no doubt others may benefit in the course of time. But for a long time to come the people as a whole will be very much worse off, as a result of these increased duties and prohibitions. It must be admitted by even the stoutest supporters of the Government that it will be quite a long time before any good will be achieved as the result of the present tariff proposals, whereas their evil consequences are now being felt. A good deal has been said, especially by the Assistant Minister (Mr. Forde), who was Acting Minister for Customs while the Minister was abroad, about the additional employment which was to be brought about as a direct result of the Government’s action; but I think it will be admitted that it was a case of the wish being father to the thought. At this time of the year work is more abundant in the pastoral and sugar industries than it is at other parts of the year, and one would have imagined that this fact, together’ with the fact that the States have been active in taking steps to relieve unemployment would have considerably reduced the figures relating to unemployed. Such has not been the case, because, by the operation of the Government’s fiscal policy, larger numbers of workers have lost their employment altogether, or have had to be satisfied with reduced employment. Figures which have been quoted during the debate show that the rate of unemployment in the Commonwealth to-day is appreciably greater than it was three months ago.
I do not overlook the fact that the Government has just announced its intention to subsidize the States to the extent of £1,000,000 to provide work; but that, of course, has nothing to do with its fiscal policy, and may almost be considered as a salve to its conscience, or as something to make up in some small degree for the mischief due to the application of that policy.
Among the causes of Australia’s present position are over-borrowing, overimportation of manufactured goods, the fall in the value of our principal exports, and last, and most important, the high cost of living and of production. Perhaps “ over-borrowing “ is not quite the right expression to use, for it is not so much the amount of money we have borrowed as the lavish and unprofitable way in which a very large part of it has been spent, which has helped to bring us to the present pass. That fact was fully realized, and the necessary steps had been taken by the Federal and State Governments to remedy this state of affairs, before the present Government came into power. Restricted overseas borrowing, together with the action of the. banks in curtailing London credits, and the unprecedently high rate of exchange, were beginning to show the desired result. If that result was not very perceptible at the start, it must be remembered that the present acute position was only realized a few months ago with the sudden great drop in the values of wool, wheat, and butter, and the reduced wheat harvest, and that commitments entered into before this was fully realized, had to run on. But there can be no reasonable doubt that the position would have rectified itself in due course without any interference by the Government. As a matter of fact, that interference has made it worse.
I- do not under-value the importance to’ Australia of its manufacturing industries, which are entitled to and should, receive every possible assistance, but the prosperity of the country rests upon its primary industries. Instead of applying itself to the task of reducing the cost of living, thereby making possible a reduction in the cost of production, the Government, by the excessive increase of customs duties, has added to the burdens of the primary producer, and made it still harder for him to compete in the markets of the world. [Quorum formed.] It is absolute nonsense for any one to say that the higher duties will not be passed on to the consumer. They must be, and to that extent the cost of living, and with it the cost of production, must go up, although the most vital necessity for Australia to-day is that they should come down.
Apart from the primary producer, it is necessary also to consider the manufacturer and the people employed in the secondary industries, and whether under existing circumstances they - -and through them the country at large - are likely to benefit to the great extent the Government would have us believe is possible.
The high duties, combined with the prohibition of certain imports, the rationing of others, the rationing and surcharging by 50 per cent, of the customs duties on many more, and the surcharging by 50 per cent, of the customs duties on a large number of articles which through long usage have become of practically every-day requirement would, on the face of it, hold out to local manufacturers the prospect of greatly increased trade and prosperity. So far, stocks in hand and on. the water at the time of the Government’s pronouncement of its new policy on the 3rd April, have been sufficient to meet the public demand, but in a very short time there will be a pronounced shortage of all goods affected, and our manufacturers are not in a position, and will not bo for a long time to come, to meet the increased demand which will arise for. similar Australian-made goods. They will first have to enlarge their plants, and though a great deal has been said about the new factories to be established in the Commonwealth by people from overseas, so far the only definite announcement has been of a new tobacco factory to be erected in Melbourne. Nor is there any indication that Australian manufacturers are rushing to enlarge t heir factories and plant; and no wonder! No sensible person will risk his capital without reasonable security, and the Prime Minister has stated officially that his proposals of the 3rd April are only a temporary expedient. If, notwithstanding this statement, manufacturers do take the risk and enlarge factories and plant, and if in a year or two this Government if still in power, or its successor, tries to abrogate this special form of protection, nothing is more certain than that the vested interests created by it will be so strong as to enforce its continuance, to the lasting cost of the primary producers and of the whole consumers of Australia. The result I foresee is, therefore, scarcity of commodities for a long time to come, and higher prices all the time.
We must consider the effect on the Treasury of the higher duties, and also of the Government’s proposals for restricting imports. On the goods actually prohibited there will be a total loss of revenue. On imports rationed to one-half the loss will be one-half, modified by the higher rates to be enforced; on those rationed to one-half, but surcharged by 50 per cent., the loss will only be 25 per cent. of the former revenue, but this, also, will be considerably modified by the higher rates. It is not anticipated by those competent to express an opinion that there will be any very marked de crease in the importation of goods which are not restricted, but which are surcharged by 50 per cent.
The Government has asserted that its policy is intended to benefit all the people; but if the result of that policy is a loss of revenue, which has to be made up in other ways, all the people should be taxed equitably to make up the deficiency.
But whatever may be said for or against the schedules which we are now considering, there is no doubt whatever that the overwhelming majority of our people believe in the protective policy. This policy is the expression of the national aspiration to develop the resources of the country and to make the nation strong and self-supporting, so far as that is possible, by establishing and extending our industries, and providing decent conditions for a much larger population. It is generally recognized that it is of vital importance to the Commonwealth that her population must be substantially increasedif the country is to be securely held for the white race. The history of other countries demonstrates clearly that countries which become extensively industrialized increase most rapidly in population. The countries whose people devote themselves solely to pastoral or agricultural pursuits increase slowly in population ; their standard of living is not high, and, as a rule, they count for very little in the world’s councils. On the other hand the nations which become industrialized invariably increase their populations rapidly.
One lesson which the war taught us was the desirableness of developing certain key industries in Australia which would serve as a source of strength for national defence in a time of emergency. Industries cannot be created at a moment’s notice. It must, therefore, be the settled policy of this country to encourage, in times of peace, a diversification of secondary industries such as will supply our needs. As a more rapid growth of population is one of the certain results of an extension of secondary industries, the rate of increase in our population will depend mainly upon the extent to which such industries are established and extended.
The Deputy Leader of the Opposition (Mr. Gullett), in his speech yesterday said that the Nationalist party, which I have the honour to support, had been, and is, the standard-bearer of the protectionist ideal. I was interested to hear the honorable member for Fremantle (Mr. Curtin) make a statement to somewhat the same effect in the interesting address which he delivered this morning. I cannot quite understand why the honorable member was so keen to make the point, but he certainly made it. With the exception of the 1914 tariff, which moderately increased the protection granted by the 1908 tariff, and some minor amendments in 1910 and 1911, all the tariff legislation of the Commonwealth has been introduced by the Nationalist party, or by the earlier Liberal party, of which it is the legitimate successor. That party introduced the Kingston tariff in 1901, and the Lyne tariff in 1907. But I think that the tariff introduced by Mr. Massy Greene in 1920 can reasonably be regarded as the first truly comprehensive protectionist tariff of the Commonwealth. It was an earnest attempt to maintain and safeguard the progress in industry which had been achieved during the war. Protective duties were then, for the first time, for example, provided for the important Australian iron and steel industry, and other new duties were introduced and already existing duties strengthened. Parliament was given a good opportunity to discuss that schedule in detail, and I sincerely regret that it has not been possible for the Government to give us a similar opportunity to deal with the specific items in this schedule. I am firmly of the opinion that the earlier an opportunity can be afforded for such a discussion the better it will be for the whole community.
In the circumstances in which we find ourselves, I do not desire to embark upon a lengthy discussion of particular items in the schedule; but I feel obliged to refer to the increased duties on lightweight woollen piece-goods. In this connexion, I direct the attention of the Minister for Trade and Customs (Mr. Fenton) to the following press report, which was published recently : -
Five of the leading retail organizations in Melbourne who sell wearing apparel have written to the Minister for Customs (Mr.
Fenton) protesting against the proposed new duties on lightweight woollen piece-goods. The letter is signed by the managing directors of Buckley and Nunn, Ltd., Myer Emporium, Ltd. Craig Williamson Pty., Ltd., Ball and Welch, and Hicks, Atkinson, and Sons Pty., Ltd.
These firms have informed Mr. Fenton that it is their opinion the new duties would entail a change over to the cheaper fabrics of artificial silk and cotton, inevitably affect the prices for Australian wool, and cause a serious reduction in the value of Australia’s exports ut a time when large exports alone could bring salvation to the country. To install the necessary plant to manufacture these fabrics in Australia would entail a risk that manufacturers, for a comparatively insignificant market, could not afford to take.
They asked that full investigation should be made into the effects of this and certain other tariff increases before the schedule became law.
A report which appeared in the Sydney Morning Herald of the 28th June also stated that the recent increases in the tariff on fine woollen fabrics was more serious than was at first anticipated. The report contained the followingstatement by Mr. George Wright, President of the Retail Traders Association : -
Fear is expressed regarding the general effect these duties will have on fine woollen fabrics manufactured abroad from Australian merino wool. 1 am unable to give any actual facts as to the country of origin of the raw wool from which these garments are made, but as Australia is such a large producer of wool, and this wool is purchased by all countries from which these goods are imported, it is obvious that the customers for our Australian wool are very largely the manufacturers in Great Britain and elsewhere who make and export woollen materials. Reviewing the position generally, however, one is forced to the conclusion that these lighter weight fabrics are not made in sufficient variety and quantity in Australia to justify the present rates of duty: in fact, a much broader question arises as to whether goods which cannot be made in Australia without such an enormous duty being imposed upon them should be persevered in.
The honorable member for Fremantle has frequently made the same point in his speeches in this chamber. He does not believe that it is wise to encourage the establishment of industries here unless there is some hope that ultimately the products of them will be made available to. the consumers at a reasonable price. Mr. Wright continued as follows : -
It would seem that an article which requires such a high rate of duty to enable it to be made in Australia can only be produced under conditions which makes its cost to the consumer prohibitive.
I have also received a letter from the President of the Brisbane Retail Traders Association, protestingagainst the increase in duties on light-weight woollen piece goods, or light-weight piece goods which contain wool. I urge the Minister to make a careful investigation into this subject in order to ascertain whether the new duties will not have a seriously detrimental effect upon our wool industry.
The tariff is a matter upon which all honorable members hold definite views-
– I have seen some very mixed votes on tariff items.
– That is so, and that is another reason why it is regrettable that we cannot without delay proceed to a discussion of the specific items in the schedule. I do not doubt, as I have already said, that the Government, in tabling these schedules, has made an honest attempt to solve the serious financial difficulties which face the country; but there is a marked difference of opinion as to the wisdom of its action in regard to particular imports. The frequent introduction of tariff schedules does a great deal to create confusion and unrest in business, and I trust that we shall before very long be able to deal with the items in the schedules, and so revive a sense of security in our business community.
Sitting suspended from 6.13 to 8 p.m.
.- I did not at first intend to take part in this discussion on the tariff. I thought that the attitude of Australia in regard to protection had been settled definitely and for all time. It seemed to me that those who desired prosperity for Australia, although they may have started before federation with freetrade theories, had since abandoned them when they saw the effect of protection on Australian industries and Australia’s progression. I remember that in the 1901 Parliament, Sir George Reid led a large body of free traders, mostly from New South Wales. He became the protagonist right throughout the Commonwealth of the freetrade movement, but before he retired from active political life to accept the High Commissionership, he admitted that, so far as Australia was concerned, the question of freetrade and protection had been definitely settled. Now the matter has been brought up again. It was raised first by the Nationalists, who take up the position that they are moderate protectionists, although some of them do not seem to know just what they are. The honorable member for Henty (Mr. Gullett) admitted that, had he remained Minister for Customs, he would have brought in an amended tariff somewhat on the lines of the present. Sometimes he appears to be in favour of protection, and, at other times, he says that our protectionist policy has gone too far. [Quorum formed.] It used to be said of those persons who say they are moderately protectionist, that they would probably describe a moral person as one who was moderately moral. If we have protection at all, we ought to have sufficient protection. It is like protecting a garden. If a 5-feet wall is not sufficient for the purpose, one should build a 6-feet wall. It is no use trying to compromise with possible burglars outside by saying that you believe in only moderate protection for your garden, and for that reason intend to build a wall only 3 feet 6 inches high.
This afternoon the right honorable member for Cowper (Dr. Earle Page) quoted, with great approval, various statements relating to conditions in Canada, and gave the committee to understand that Canada was progressing by leaps and bounds under its moderate tariff, while Australia was retrogressing because it had what we regard as a sufficient tariff. He quoted figures which, I believe, were inaccurate and unreliable. He stated - and this I know to be inaccurate - that the population of Canada was increasing more rapidly than that of Australia. I know that that is incorrect, because only recently I have been reading some Canadian statistics. He said that, over a period which he did not name, the population of Canada had increased by 84 per cent., while that of Australia had increased by only 62 per cent. I have been able to consult authorities which place it beyond doubt that, during the period from 1901 to 1921, the population of Canada has increased, not by 84 per cent., but by 62 per cent. The Canadian Year-Book for 1929 states that the Commonwealth of Australia is the only British dominion of which the population grew more rapidly in the second decade of the twentieth century than in the first. It increased by 22.04 per cent. as against an increase of 21.95 per cent. in Canada. I regret that the honorable member for Wimmera (Mr. Stewart), in his very intelligent and temperate address last night, also committed himself to the fallacy that Canada had some advantage over Australia, particularly as regards its farming population, because of its lower tariff. When dealing with Canadian matters, it is well, I think, to refer to Canadian authorities themselves. During a discussion in the Canadian Parliament on the 24th February of this year, Mr. B. V. Bennett, Leader of the Opposition, spoke on conditions in Canada, and is reported in The Journal of the Parliaments of the Empire as follows: -
Hon. E. B. Bennett (Leader of the Opposition) declared that it was not sufficientto say that in 1929 the country enjoyed a prosperity which they did not at the present moment enjoy.The cost of living was160 as compared with 100 in pre-war times. The adverse balance of trade was something over $90,000,000. There was abnormal unemployment. During the winter they had seen greater suffering than they had known during the last quarter of a century,and yet the Government had absolutely failed to take any steps to deal with the problem.
The following is another contribution to the debate:-
Mr. J. C.Brady (Conservative, Skeena, B.C.) stated that there were two main classes affected by unemployment, and their numbers were increasing year by year. The first class was composed of industrial men, who owed their unemployment to depression in industry. The second class was composed of men unable to get employment because of the fact that, by new methods in industry and labour-saving devices, they were not able to fit in. To-day it was almost impossible for a man of 40 years who was out of employment to get a job.
The next speaker, Mr. J. Evans, is associated with the Country party in Canada, as Iam here. It is true that I belong to the Labour party, but we who represent country districts are the real country party in the Australian Parliament. Mr. Evans is reported as follows: -
Mr. J. Evans (Progressive, Rosetown, Sask.). Because of the tariff, as it stood, the farmer, too, was precluded from any hope of success. He had to find his market price against the competition of the whole world, andhe met the competition of cheap labour of even Asia and Europe. Yet he had to buy his supplies in a protected market, where as a consumer he was discriminated against. . . Three years ago the Government had brought about the Australian treaty, which was a direct sacrifice of the interests of agriculture for the purpose of giving freer entry into the Australian market for Canadian manufacturers. The Government had brought into force such restrictions last year in respect to the British preference that actually forbade any British goods coming to Canada under the preference during many months of the year.
Mr. M. C. Senn, Conservative member for Ontario, also spoke, and the honorable member for Henty (Mr. Gullett) should be able to sympathize with his views, which, being conservative, should suit him. His contribution was as follows : -
Mr. M. C. Senn (Conservative,Haldimand, Ont. ) said that there wereseriousconditions of unemployment in the country, and a serious lack of prosperity in the rural sections. Many farm holdings were being totally abandoned, and values had depreciated by at least 30 per cent. to 40 per cent. Rural depopulation was continuing at an alarming rate. Farmers were becoming more and more convinced that the greatest asset agriculture could have was the home market, and that the tariff schedules on farm products were not’ in accord with those which other lines of industry enjoyed. They realized that the last vestige of protection for the farmer had been removed by the present Government. The comparison between the rates on agricultural products as they were under the general tariff and as they werenow under the New Zealand order in council definitely proved that the Government, in entering this trade agreement, had taken away from the farmer the meagre protection he had for some time enjoyed. If there was one industry which needed the attention of the Government, it was the dairy industry.
Mr. W. T. Lucas, of the United Farmers party, Alberta, had this to say
Mr. W. T. Lucas (United Farmers). The efforts of those who urged the opening up of new agricultural areas . could lead only to a condition of further depression in the agricultural industry. Anything that would reduce the standard of living would simply mean a greater exodus to the United States.
That brings us again to the population argument of the right honorable member for Cowper (Dr. Earle Page). Mr. Lucas is a practical farmer, who belongs to the Farmers party, and is himself a farmer. He is not a physician who knows so much about farming that he leads the Country party. He continued -
When they looked at results they could only conclude that the vast expenditure had largely been wasted. In July, 192!), the population was 9,790,000, an increase of 38,000 over the previous year. The number of immigrants was 167,722. If they added to that number their natural increase, which amounted to 127,255, they should have had a total increase in population of 294,977. and yet their increase was only 38,000. They had lost 256,977 of their population.
This is what happened in Canada, which the honorable member for Wimmera (Mr. Stewart) and the right honorable member for Cowper spent much time in glorifying because of its tariff. The right honorable member for Cowper, in the course of his rattling, machine-gun speech, stated that much of the industrial prosperity of the United States of America was due to the fact that many of her factories had branches established in Canada. When he was speaking, I was reading an article on “American Industries Abroad,” from the publication Foreign Affairs, for July, 1930. I was aroused from my reading by a statement of the right honorable member just as I came to the following passage, which should refute him most completely: -
In general, the establishment of branch factories for the manufacture of such commodities as have already found a place in the American market is motivated essentially by the desire to bring the product within the purchasing power of the foreign consumer by saving on transportation and import duty, or by inducing the foreign consumer to buy the product of the foreign branch plant when he is prejudiced, for some reason or another, against foreign products in general or against the American product in particular.
The writer then goes on to show why American factories are established in Canada, and how American manufactures are admitted, under our preferential tariff, as Canadian goods. He further states -
Of the factors which I have called negative, the one that comes first into the mind of the American manufacturer when he plans to send his product to a foreign market is undoubtedly the tariff. The migration of some of our industries to Canada presents the most striking manifestation of the tariff’s influence. In the case of Canada, moreover, the advantage of manufacturing inside the Canadian frontiers is enhanced by the fact that Canadian products enjoy preferential treatment throughout a large part of the British Empire. Consideration of the tariff factor is particularly likely in the case of a product adapted to assembling, such as the automobile, where the lower import duty on parts offers an opportunity for savings in duties without going to the extent of building a foreign plant adequate to manufacture the entire product.
That may be a revelation to the Minister.
– It is only what Mr. Ford is doing in Great Britain and Australia; he is coming inside the fence.
– From what I have quoted it will be seen that the principal parts of the products of these Canadian branches of American factories, particularly those on which there is a high tariff, are manufactured in America, are then sent to Canada, and eventually treated as Canadian productions. Consequently, when we hear of preference being given to Canadian products we are safe in assuming that in many cases they represent American goods with a Canadian label.
I also quote the following from Foreign Affairs: -
Estimates of the amount of American capital invested in Canadian industries have been published for several years by the Department of Trade and Commerce of the Dominion of Canada. According to the estimate for the end of 1927, the latest available, American investments in Canadian industries exceeded $1,300,000,000, of which about half was in pulp, paper, lumber and mining industries, which are based primarily on natural resources and power; the other half was in manufacturing proper. Current estimates of investments in Canada or in the rest of the world mustbe sheer guesswork.
– That does not prove the honorable member’s case.
– I can give the honorable member for Warringah (Mr. Archdale Parkhill) information, but I cannot give him intelligence.
– Because the honorable memberhas not sufficient himself.
– The honorable member, in criticizing me, reminds me of a boy who puts his finger to his nose before the Sphinx. The Leader of the Opposition in the Canadian Parliament speaking on this subject as recorded in the Journal of the Parliaments of the Empire, states -
They were confronted with a condition in which their internal trade had been destroyed by the penetration of the United States, who had compelled Canadians to seek abroad a market for their products.
There are at present 3,000,000 persons unemployed in the United States of America.
– There are more than that.
– It is incorrect to say that the imposition of higher tariff duties is largely responsible for the increase of unemployment in Australia ; the number of unemployed in other countries is also greater perhaps than it has ever been. The Leader of the Opposition in the Canadian Parliament, in speaking on the discrimination which Canada has shown to other countries in order to retain its trade, said -
Canada had made a treaty with France by which it bound itself to permit French goods to enter under certain specific tariff rates, and France gave them certain benefits.
The honorable member for Swan (Mr. Gregory) said last night that as a result of our tariff imposts other countries were adopting retaliatory measures. It has been said that Belgium, Italy and France have already imposed additional import duties on Australian butter, wheat and skins, but that Italy has not yet adopted a similar course. The fiscal policy of this Government has been condemned by members of the Opposition because of the retaliatory measures which may be adopted by other countries. The Leader of the Opposition in the Canadian Parliament, who knows more on this phase of international trade than the honorable member for Cowper (Dr. Earle Page), said -
In May of last year the French Government increased the duty on Canadian wheat to 53 cents a bushel, practically’ a prohibitory rate. Did Canada in any respect touch the French tariff or raise the duty on French goods? No. The only answer the Government had was: We pay the minimum duty on our goods entering France. Germany had increased her rates on wheat so that American wheat went into Germany for 6 cents a bushel less than Canadian wheat. Why that discrimination? Where was the voice of Canada then? Their trade with the Empire last year was less than the preceding year, and their trade with foreign countries showed some small increase and their trade with the United States reached the highest point in history. Their purchases from the United States were larger than ever before.
– If Canada can afford to do it that is not a reason why Australia should do the same.
– Some of the arguments used against the tariff are that by imposing additional duties we shall lose some of our overseas trade, but from the speech I have quoted it will be seen that France increased the duty on Canadian wheat 53 cents although Canada had not raised its tariff against French goods.
The honorable member for Swan (Mr. Gregory) said that the effect of the tariff would be to seriously injure primary production; but I remind the honorable member that primary producers all over the world are experiencing severe hardships. In Great Britain, where a freetrade policy has been in operation for the last 80 years, the agricultural industry is confronted with great difficulties. If we turn to the United States of America, a country in which an enormous amount of capital is invested, we find that similar conditions exist. In that country bills have been introduced into Congress with respect to farm redemption and to assist farm production in order to help the primary producers. Both Mr. Hoover, in his Republican address, and the democratic candidate made the increase of primary production and assistance to primary producers a real issue. Honorable members opposite who represent the capitalists of this country should realize that the difficulties experienced by our primary producers are not peculiar to this country. They are world wide and are largely the aftermath of the war. Enormous sums of money have been collected from the people and those controlling primary as well as secondary industries are still feeling the effectsof that great international conflict. It is ridiculous to say that our present economic conditions are due largely to the imposition of higher customs duties or that our primary industries are in a worse condition than those of other countries. I venture to say that if a free trade policy were in operation in Australia our farmers would be the first to suffer. The largest and most profitable market for our primary products is in Australia itself, and unless we have a large army of industrialists and artisans employed in our secondary industries, the market for our primary products would be exceed- ingly limited. If many of our secondary industries were compelled to close down owing to inadequate tariff protection, what would become of the Paterson butter stabilization scheme; or any other such systems which have been established for the protection of primary producers ? The secondary industries which are established in the big cities are able to keep our primary industries going.
There is only one other point that I desire to make.
– That is the best thing that the honorable gentleman has so far said.
– The ignorance of the honorable member for Warringah is so profound that he expresses sorrow when I attempt to educate him. I hope that he will endeavour to appreciate my efforts on his behalf. I object very strongly to his display of an absolute lack of desire for improvement.
It is too late to rail at protection, which is now universal. Those who speak against it are at variance with the universe. The only movement of importance in England at the present time is the movement towards protection. Not one of the countries that has adopted protection has any wish to discard it. Although we may not approve many of his methods, we must admit that Bismarck was a great statesman. Notwithstanding the fact that his economic upbringing bred in him opposition to protection, when he found that Germany was suffering from an economic disease he adopted protection as the only means of placing that country on the road to prosperity and ultimate success. The new Balkan States that have been carved out of the old Austrian monarchy also have adopted protection to promote progress and prosperity within their borders. It is only those out-of-date people who are representedby the honorable member for Warringah (Mr. Archdale Parkhill), the growth of whose mind has been stunted, and whose intelligence has been atrophied, who can find a good word to say for the constantly declining doctrine of freetrade.
.- In my opinion the Government, in introducing additional tariff schedules and imposing embargoes at this juncture, has disregarded every economic law, and has taken no notice of those who are competent to give, and have given, advice on our economic problems. It is clear to me that the new tariff will place Australia in greater difficulty than she had to face previously, and that we are going further than we were along the wrong road. The people in the country appear to have realized that that is so. When the present Prime Minister (Mr. Scullin) sat in Opposition in this Parliament, he wanted to know why it was that every addition to the tariff resulted in. increased unemployment. He is not the only man who has made that discovery. I have received the following communication from a Mr. Clark, written from the outback of Western Australia: -
Box 25, Kulin, 25th June, 1930
Dear Mr. Prowse,
There is much talk about the necessity to balance the external trade of Australia.
For 45 years, starting with the Victorian tariff of 1885, they have been trying to decrease imports by manufacturing in Australia, and the more they tried the worse the balance went against us.
Has it ever struck you that the very thing they have been trying to do to rectify the balance of trade is the cause of the imports exceeding the exports?
By manufacturing they have built up huge cities that export nothing but import whole heaps. Primary producers can import because they export and thus balance their trade. City industries cannot export; therefore, anything they import injures the balance of trade.
By building up the populations of the cities the percentage of the exporting part of the population has been vastly decreased, while the percentage of consumers of imported goods who export nothing has been vastly increased. I think this is sound argument, and, if it is, why marvel that the balance of trade is against Australia?
I submit that that is sound logic. The five economists who proffered their services to the last Government, to inquire into the effect of the operation of the tariff in Australia, estimated that it had then reached the economic limit, and that it had placed a 9 per cent. handicap upon the exporting primary industries of this country. It would be interesting to ascertain what is the increase under these additional imposts and embargoes. Probably the handicap on our exporting primary industries is now anything from 10 per cent. to 12 per cent. Already we have had an object lesson. There has been set in motion a new scheme for balancing our imports with our exports, and the Treasurer (Mr. Scullin) is budgeting for a deficit of from £12,000,000 to £14,000,000. Who is going to make up the deficiency? If the handicap on primary production in Australia last year was 9 per cent., and if it is now 11 per cent, or 12 per cent., how are our primary industries, which are our only hope of financing this country, to compete with other countries on the markets of the world ?
– The honorable member for Bendigo reminds me of a mammoth toad in a pool; he is croaking all the time.
I wish to make a few quotations from a booklet issued by Edward Shann, M.A., Professor of History and Economics at the University of Western Australia. He refers to many factors that it is well we should bear in mind if we are to follow the ideas and the thoughts of men who have been educated and have lived on economic lines. He says -
Hard times, no doubt, may be turned into good times if they are so faced that they teach the lesson of more effective mutual service. For the moment it is imperative that we should all live more sparingly. The immediate call is for funds in London to take the place of those we can no longer borrow. But the outcome of the crisis - whether we emerge as an impoverished or as a progressive people - will depend not on saving only, but on our ability to make headway under circumstances so radically changed.
The change has been radical in a very short period, the main reason being the fall in the price of wool and wheat. As a national household we have less money to spend, and must cut our cloth accordingly. Are we cutting it right? Are we adopting a correct attitude ? I think that we are not. This work was written so recently that it contains a reference to the present Minister for Trade and Customs (Mr. Fenton’s) visit to London, where he went to teach his grandmother how to suck eggs. Professor Shann says -
London opinion, though it has commended our shipments of gold to steady the exchanges - a measure which eases the city’s immediate troubles as well as our own - shows no confidence in our prospective handling of the crisis. The Times is protectionist in sympathies, but it made this acid comment on Mr. Fenton’s speech at the Australia Day. dinner: “Eis assurance that the Commonwealth Government is fully alive to the difficulties of the present situation, and will, so order its acts as to ensure a return to normal financial and economic conditions as soon as possible, would have had a greater influence ad he given examples of the practical application of this policy. Not only is there considerable uneasiness in this country as to the probable effects on British trade of the newAustralian tariff, but there are serious doubts whether the higher tariff will not accentuate one of Australia’s chief problems - namely, excessive costs of production.”
That is exactly how I feel about the matter. The emancipation of this country, and the re-establishment of its financial credit, lie in the development of our primary resources. Anything that hinders that development is undoubtedly detrimental to the progress of this country. Professor Shann makes the following further observation -
To make sure’ of additional exports - high costs to the contrary notwithstanding - Mr. Scullin and his henchmen propose to guarantee the farmer four shillings a bushel at the siding. “ It is not enough,” cry the New South Wales farmers. Give us five, or we won’t vote for your compulsory pool”. The statisticians shake their heads. In America the Farm Board, facing a formidable carry-over of 1929 grain, is telling the farmers to grow less wheat. The present price of wheat, 3s. 8Jd. a bushel at fourpenny sidings (21st March, 1930) makes it look long odds that the Commonwealth Bank would be called on to find part of the guaranteed 4s. from sources other than the proceeds of the pool’s wheat sales.
For a time, while wheat and wool remain low in value, we must meet the London bill partly by “banting,” partly by more effective work. But the question of vital importance is how to enforce the latter all round. It is of small use appealing to all and sundry to work harder. Every one applauds and waits for the other fellow. Mr. Scullin appeals to the farmers, of all people. Does he think they have been “ running stiff.” To egg them on he proposes to tax petrol more, and thus to load the farm and station costs to find pay for road-making gangs!
Those are the observations of an economist who has made a life study of the matter. When the “ Big Four “ came here they told us that we in Australia were attempting to do too much. That is true. If Australians had stopped to ask themselves what primary and secondary industries were natural to the country, and could best be developed for the good of the people already here, and the further increase of the population, we should not now be in the position in which we find ourselves. Had we done that, our iron and steel industry and our machinery industry would have developed to such an extent that not only would our own requirements have been met, but we should have been exporting machinery, as we did when the tariff wall was lower and the cost of living less than it is to-day. Moreover, we should not now have so great an army of unemployed in our midst. Had we concentrated on the manufacture of woollen goods, realizing that we held the key to the situation in wool - seeing that Australia grows 50 per cent. of the world’s fine wool - we should, as it were, have brought Bradford to Australia. Instead of Australia importing manufactured woollen goods our factories would have been exporting them. But, because we have attempted too much, we have accomplished little or nothing. Instead of concentrating on our natural industries, we embarked on the making of matches and a few “ tiddley-winking “ things of no use to the country. While busying ourselves with artificial industries we crippled our natural industries.
Has the prophecy of Mr. Delprat, when the Newcastle Steel Works were opened, been fulfilled? He then said that the new industry would need no protection. Had we not attempted to develop a number of’ small unnatural industries, the industry in which Mr. Delprat was interested could have got along without assistance; but, because the protection afforded to those unnatural industries increased the cost of living, the iron and steel industry had to pay increased wages, based on that higher cost of living, with the result that the competition became so strong that, eventually, Mr. Delprat was obliged to ask for tariff assistance. Australia is being placed in an insular position so that we can make no real use of our secondary industries - even those which should benatural industries.
– The late Government, which the honorable member supported, is to blame.
– During this debate there has been a continual bleating from the Government benches that the parties represented by honorable members on this side are to blame for the present state of affairs. Unfortunately, tariffs have been regarded as non-party questions. I should like to see a low tariff party in this House. There is some justification for the remarks of the honorable member forFremantle (Mr. Curtin), as to the responsibility of honorable members on this side for agreeing to previous tariff schedules. Nevertheless, the fact remains that the Labour party is the highest tariff party in existence in Australia. To see that one has only to study the party’s platform. When, during the regime of the Hughes and the BrucePage Governments, a few honorable members fought against the tariff schedules that were introduced, they were helpless, because, with the assistance of the Labour party then in opposition, the schedules were agreed to. During election campaigns I have frequently been asked why I supported a government which imposed increased duties. My reply was that the only alternative was equivalent to jumping from the frying pan into the fire. To-day we are realizing the truth of that statement. A Labour Government is in office and I am still forced to continue to oppose tariff schedules knowing that my opposition will be of little avail. When twitted in this way I am inclined to adapt the lines of Dryden to make them read -
When I consider politics, it’s all a cheat,
Yet fooled with hope, men favour the deceit,
Trust on and think to-morrow will repay.
To-morrow’s falser than the former day,
Lies worse, and while it says we shall be blest
With some new joy, cuts off what we possessed.
Trade is but the exchange of commodities. It depends on a man’s environment and industrial education whether he can produce more wealth by making silk, serges or stockings, than by growing pineapples, pumpkins, or potatoes. A writer in Rydge’s Business Journal, says -
Being a cooper, were it not an absurd waste of wealth for me to spend a month weaving
By weaving the carpet, I “keep the money at home “ - and that is the essence of protection; but I keep a much larger amount away. The same law that applies to individuals applies to nations. The more commodities we import the wealthier we become, for we exchange that which cost us little to produce for that which would have cost us much.
I believe in that policy. I believe that we are trying to make that carpet in Australia and are losing more in the making of it than we save. If, instead of making it ourselves, we buy it, we can release our man power to produce as much as a dozen carpets would cost. That has been our mistake in the past, and consequently we are in difficulties to-day.
The question is frequently asked how we shall find employment for our people if we import so many goods. I reply that, although Australia has carried out a policy of protection for many years, unemployment is increasing. Surely that fact should make men think. Imports mean employment. The more commodities we import the more employment there will be for domestic labour because all imports must be paid for in “exports. If we pay for manufactured products in wool or wheat we must get it from the land.
We appear to have forgotten the good old word “ reciprocity “. We in Australia have reached the stage in which we believe that other countries must buy from us, although we buy nothing from them. No nation can progress without reciprocal trade. In this connexion the writer in Rydge’s Business Journal makes some remarks which might well be assimilated by this assembly.
I am a great believer in reciprocity - I believe it to be the grandest word in the English tongue - and it i’b my firm conviction if we had a large measure of it throughout our Empire it would settle most of our troubles on Freetrade v. Protection. We, in Australia, have resorted too hurriedly to a drastic protective tariff on imported goods in a frantic effort to found our secondary ‘industries while our rural spaces are as yet practically empty. In this sense we have put the cart before the horse and it is a fatal mistake. America did not resort to high tariffs until McKinley’s time, when her population was 80,000,000, which warranted a domestic demand and home consumption market. The cost of production, distribution and exchange have become so enormous here, that events
How long will this young debit country - a primary producing one - consent to swallow the protective tariff panacea before it learns in the bitter school of experience that it is rank poison - that dear living, low wages and idle labour are the logical sequence of Australian therapeutics) What are the “ Powers that be “ doing for the relief of the people. They are raising the tariff - giving the country the 6ame old dough pill that has been so. often tried without beneficial .result. They are instrumental in perverting and distorting Australia from its grand national destiny - that of a great primary producing country, to become a parasitical manufacturing one.
I have always believed in a revenue tariff. Had the Government attempted to reverse the fiscal policy of the past and reduce the tariff in addition to asking the farmers to grow more wheat ; had it called upon the manufacturers of this country to do more for themselves, instead of sheltering behind the farmers, our revenue would have increased, the cost of living would have gone down, and we should have been in a better position than we are in to-day. We have to extract money from a highly taxed people, who have already been bled white, in order to spoonfeed secondary industries and make up the national deficiency. I belong to a party whose platform provides for a revenue tariff. I believe that even a freetrade country can logically adopt a revenue tariff. I say if we had no debt we should have a revenue tariff to carry on the services of . the country efficiently. The tariff then would or should be on tobacco, spirits and suchlike non-necessaries of life. That would be a logical form of taxation. The following statement sets out various errors in respect of our protectionist policy: -
The honorable member for Swan (Mr. Gregory), in his excellent speech last night, gave some instances of the corruption practised by the distributors of Australian manufacturers, who have battened on the consumers of Australia. Even the honorable member for Werriwa (Mr. Lazzarini), is beginning to feel that in voting for this tariff he is voting for certain- combines which have impoverished and bled this country. The statement continues -
That must be correct, otherwise employment would not be rife in Australia today. The statement further reads -
When the Wheat Marketing Bill was before this chamber, I suggested that it should be altered in such a way as to relieve unemployment. Even had that been done, the principle of the bill would have been economically unsound. Had the Government been sincere in introducing that legislation in the interests of the farmers, when it found that, because of the Senate’s action, it would no longer have to provide millions of pounds in the event of there being a loss on the pool, why did it not relieve the farmers of taxation instead of placing additional burdens upon them by imposing a primage- tax- on their wheat sacks and fertilizers^ and duties that will increase railway freights, making it still more difficult for them to compete in the markets of the world. The farmers are told to produce more wheat, and to make slaves of themselves.
We should take the burden off the shoulders of the’ farmers and allow them to stand, on their own feet. . Only in. that way can we make Australia a great nation.
Under this tariff policy, we are preventing the wool and wheat-growers from increasing their production, thus mitigating against the effectual occupation of this country^ This Government has introduced drastic retrenchment in the Defence Department. Its representatives have gone to the League of Nation’s to advocate peaceful arbitration in place of war for the settlement of disputes. But do honorable members supporting the Government think that other nations whose people are crowded together - 200 and 300 people to the square mile - will long tolerate their surplus population being denied the right to migrate to Australia with its vast spaces, and sparse population - one or two persons to the square mile. We must effectually populate Australia if we are to hold it. We have been told by the protectionists in this chamber that we cannot have population without secondary industries. This Government by legislative acts is preventing white people from coming to this country. It has placed Australia in an insular position so that to-day its secondary industries cannot compete in any market of the world. We have made enemies of other countries, and they have already retaliated. We buy from Belgium £910,000 worth of goods, and that country buys from us goods to the value of £9,044,000, yet this Government has placed impositions on our imports from that country. We sadly need the trade of Belgium because it is a trade balance in our favour of £8,133,000. We had similar trade relations with France. We have now antagonized that country, and it has already instituted reprisals by placing prohibitive duties on the importation of our wheat. We are just as readily offending Japan, although we sell to that country approximately £16,000,000 worth of goods, and buy from it only £4,000,000 worth. Does the Minister for Trade and Customs think that that nation will long tolerate that state of affairs? It is foolish of us to arouse the enmity of other nations, especially when we are not in a position to fight to defend our privileges. We have not a leg to stand on at the Geneva Conference, because we are making no reasonable effort to. occupy this country. It is nice to have a high standard of living if we can pay for it and earn it, but if we cannot pay for it, let us, as common people, attempt to put our house in order. The man on the’ land who is bearing the heat and burden of the day is beginning to wake up to the fact that the courts that have been set up in this country to fix wages and hours for the workers, provide conditions and wages that have to be paid for out of the farmers’ pockets. The following is a resolution that was passed at a representative gathering of wheat and wool growers recently: -
As the reduced prices of world wheat have already lowered the standard of living of the primary producers, this conference of farmers calls upon the Federal and State Governments to take such steps as will bring about an adjustment of standards with other sections of the community who in the last issue depend upon the wealth created by primary producers.
That is not an unreasonable resolution. If the primary producers were relieved of the burden of their taxation, the cost of producing wool and wheat in Australia would be lower than it is in any other part of the world. Our primary producers are called upon to do more than anybody else in the community to aid Australia in this time of national stringency. The Prime Minister has said in this chamber that any attempt to reduce the cost of production or wages will be challenged.
– The Prime Minister said nothing about the cost of production.
– If the honorable member will read the actual statement of the Prime Minister he will find that it means what I have said. The Defence Department can be retrenched, and the farmers can be made to work long hours, but that section of the community which put the Prime Minister and his supporters in office are not to suffer. Had this Government any sympathy with the farmer it would not have placed further burdens upon him under this tariff schedule.
– Yet the honorable member supported thetariff schedules introduced by the Bruce-Page Government.
– I did not support one of them. The statement in respect of protectionist error’s, from which I have already quoted, continues -
Mr.Fenton. - Protection does not cost us that.
– This is an extraordinarily mild statement. Actually protection must cost Australia more like £120,000,000 per annum, because when the Bruce-Page Government was in power the customs and excise duties amounted to over £40,000,000. In addition, we have to take into account the increased prices charged for the goods made in Australia and the profit made on their sale. The statement continues -
That has proved to be the case. So soon as a secondary industry is able to supply the local market it comes to a dead end. It cannot employ more people. The statement proceeds -
That is exactly what we shall have to do under the tariff policy of this Government. According to the budget, we are to be taxed an additional £12,000,000 or £14,000,000 simply because embargoes and prohibitive duties have been imposed. The statement continues -
According to the newspapers to-day, Sir James Mitchell, the Premier of Western Australia, is reported to have said that the last man in Australia to support the high protectionist policy of this country should be the working man; that it hits him harder than it does anybody else. It is rather strange that labour in England is of the same opinion as Sir James Mitchell. Why the working men of Australia think that the protectionist policy is helping them I am at a loss to know. They have been able to acquire from the Arbitration Court certain conditions and high wages, but they forget that, automatically, the cost of living increases, and that in the end they are not better off ; indeed, they are worse off, because the so-called high standard of living does not give permanent employment. Actually it interferes with the progress of the country. Taking the wage in 1911-12 at £1, in 1927-28 it increased to £1 15s. 6d. Taking costs in 1911-12 at £1, in 1927-28 they increased to £1 16s. So actually the working man is 6d. worse off. Yet he does not seem to realize that. In addition, thousands of our workers are unemployed because, under the higher standard of living and additional costs, we are unable to compete in the markets of the world. The figures that I have given were com puted by the Commonwealth Statistician, and, in the face of them, it is strange that the working people as a whole are not alive to the true industrial position. I support the motion moved by the honorable member for Swan (Mr. Gregory), and I endorse all his remarks. I certainly expect the honorable member for Fremantle, judging by his remarks this afternoon, to support the motion. It has already been supported by the honorable member for Wakefield (Mr. Hawker), and I should be surprised if the representatives of Tasmania did not support it also. Western Australia is almost in a state of desperation. At a large gathering held on the 9th July at the Perth Town Hall, under the chairmanship of the Lord Mayor of Perth, the following resolution was carried -
That an emphatic protest be made against the action of the Federal Government in imposing such prohibitive duties as, in the opinion of the meeting, are detrimental to the best interests of Western Australia and prejudicial to the unity and progress of the Commonwealth.
At that meeting the Town Hall was packed; and the resolution was carried unanimously with the exception of three votes. This further resolution was carried -
That this meeting protests against the delay in bringing before Parliament the revision of tariff duties, and urges that an amendment to the Customs Act be passed, making provision for ratification or otherwise of tariff revisions within 30 days from date of regulation.
The people of Western Australia take strong exception to the introduction of this tariff. They are of opinion that no government should be permitted to introduce a tariff schedule which immediately becomes operative, and to delay its consideration for over twelve months. That is not democracy; it is autocracy in the highest degree. When I consider the trade relations that obtain between Western Australia and the other States I ask, on behalf of the people of my State, “Who are our neighbours?” The Minister for Trade and Customs (Mr. Fenton) is familiar with the question asked of the greatest Teacher of all time, “Who is my neighbour?” A certain man on the way from Jerusalem to Jericho fell among thieves, who stripped him of his raiment, wounded him, and departed leaving him half dead. And by chance there came along a priest who, when he saw the man, passed by on the other side. And, likewise, there came along a Levite, and he also passed by. But a Samaritan, with whom the Jews had no dealing, as he journeyed, saw him. And he went to that man, bound up his wounds, pouring in oil and wine, set him on his donkey, and took him to an inn. On the morrow, when he departed, he gave the innkeeper money and charged him to take care of the man. And then the great Teacher said to His questioner, “Which now df these three, thinkest thou, was neighbour unto him that fell among the thieves?” And the questioner replied, “He that showed mercy unto him.” As a Western Australian, 1 want to know who is the friend or neighbour of that State. Is it the Eastern States, or is it Belgium or France? Last year, my State bought goods to the value of £10,600,000 from the Eastern States, the highest market in the world, and in return they bought from us goods to the value of £1,200,000, an adverse balance of £9,400,000. And to-day Western Australia, the State that is producing such wealth and providing that market for the Eastern States, is having placed upon it burdens that it can no longer bear. There is nothing more calculated to disrupt the Commonwealth. Can it be wondered that Westralian talk secession and ask to be allowed to fight their own battles and develop that great country without being penalized by the ignorance that prevails in this Parliament and in the Eastern States with regard to the conditions that exist. The biggest saving that I can think of in a time of emergency such as the present is to dissolve this Parliament for a period of 25 years. Can any one imagine a machine or any protective factory whose output is costing so much to produce so little? What is the output of these 111 men, who have a retinue of from 50,000 to 60,000 servants and an establishment costing about £11,000,000? Are they rendering advantage to the country? We have gravely prejudiced the future of Western Australia. I was glad that the honorable member for Fremantle (Mr. Curtin) made it so clear this afternoon that that State was at such a serious disadvantage as a result of federation; if the honorable member had not been leg-ironed because of his allegiance to his party he would have had more to say on the subject. The honorable member referred to the advantage that federation conferred on the various States, Queensland reaping the greatest benefit. Western Australia has to contribute £400,000 a year to support Queensland’s principal industry. That retards Western Australia’s development and makes enemies of its natural Customers, Java and Singapore.
– Does the honorable member want to patronize black labour?
– Their money is as white as that of the honorable member, and they have as much right to live on this planet as he. We want markets more than anything else to assist us to develop and populate our country. Western Australia could purchase its sugar from Java in the process of reciprocal trade, at £11 or £12 a ton, paying for it with its own produce, whereas it has to pay £37 6s. Sd. a ton for the local article. My State could also purchase bananas from Java, the entry of which fruit is at present practically prohibited. The development of Western Australia has been retarded at every point by its old man of the federation. No one can truly claim that the eastern States of the Commonwealth are neighbours unto Western Australia. The operation of the coastal clauses of our Navigation Act involves our primary producers in exorbitant freights on all their agricultural machinery. Messrs. Hugh V. McKay Limited have their farm implement factory at Sunshine, where people are employed to make the machines that are needed and purchased by Western Australia. The highest freight in the world . is incurred in the transportation of those farm implements from Victoria to my State. In the circumstances I ask is it any wonder that we are complaining?
– The honorable member would complain if he were in Paradise.
– That is an inane remark. I certainly do not think that I shall see the honorable member there. To-night the honorable member for
Corangamite (Mr. Crouch) referred to Canada’s tariff policy; but. I was unable to gather from his remarks whether he thought it hindered or helped that country. Canada is a moderate tariff country, and its position is set out in an interesting way by Professor Shann, who writes in the following words: -
No paper manipulation can evade the fact that falling prices have converted us suddenly from an exceptionally lucky people, recklessly borrowing up to our full credit, into an unlucky folk faced by the bill. To maintain our future credit we must pay the interest in cash, and that means at the moment economy and heavy taxes. But to restore our fighting weight, tomake our prospects what they were in, say, 1926, we need (i) a big increase in exports, and (ii) profits from them which will finance our further progress. Such an expansion of our exports seemed to the five who wrote the 1929 apology for the tariff a task beyond our powers. But Canada expanded her export trade from £33,800,000 in 1900 (when Australia exported £45,000,000) to £256,000,000 in the twelve months that ended with October, 1929, as compared with Australia’s export of £145,000,000 (1928-29). Why should we, with a twelve months’ working climate, take second place to Canada?
Australia has not been assisted by high tariffs; but Canada, with its low tariffs, outclasses us completely in its export trade. It is time the people of this country realized the seriousness of their position. The question is often asked, “What is the remedy?” The following quotation from Rydge’s Business J ournal furnishes the answer in a concise form : -
Cut down the hyphenated word “overhead “ ; our expenses of administration are entirely too great for services rendered. Our economics are upside down. It is costing Australia at present £70,000,000 annually in the various ramifications of Government. Every one man in seven is a government servant. Inculcate the gospel of work and more selfreliance. Discourage government interference in business. It is the association and cooperation of private individual enterprise that develops a nation. Abolish all arbitration awards - Federal, State and municipal - then pay on results. Australia can provide work for 20,000,000 population in developing its primary resources in rural areas. Borrow externally as little as possible and spend borrowed money only on reproductive works up country, not on bricks and mortar in our big cities. Unlock the land; bring Nordic races here. Sell them the land cheaply, and on extended payments. Stop the centralization that is eating out our very vitals, comb out the big cities; quadruple our production of primary produce; exploit newmarkets, particularly the Orient; cut out all non-essential secondary industries; buy what we want on the same basis as that on which we are forced to sell - world’s parity prices. Then we will develop our resources and have money to throw at the birds.
.- I have listened attentively to the speeches of honorable members opposite. They all realize that there is great prosperity in every country where manufactures flourish, and they know that unemployment is rife in Australia ; but, despite the financial depression, they advocate a continuance of imports. We know that the outside world dumps in Australia its surplus production, and endeavours to. cripple the industries that we try to establish here. The effect of this outside competition has been felt to a marked degree in Tasmania. The carbide industry, for instance, was established in my State, where, thanks to our excellent hydro-electric system, power is obtainable at as cheap a rate as anywhere in the world. In that industry, overseas competition had to be faced, and some brands of foreign carbide were sold at far cheaper rates in Tasmania than in other countries. The object was to cripple the Tasmanian industry. These tactics met with success for a number of years, and the State Government had to come to the assistance of the industry by taking over the works. That action saved the industry from complete failure. With the protection that the present Government has given, however, Tasmanian carbide is now marketed at a price £4 a ton lower than the price charged for the foreign article. The product is shipped to all ports of the Commonwealth at a uniform rate, consumers in Western Australia paying no more than those in New South Wales. Manufacturers should not be permitted to charge different prices for the same article in the various States. If the Government took this matter in hand, uniform prices could be fixed for all the products of secondary industries. The carbide industry in Tasmania provides employment for over 200 persons. The past year is the first in which the industry has been conducted continuously for twelve months. Previously employment was provided for only about nine months in the year, and for the remaining three months the employees had to be given relief work by the State Government. This was due to the importation of carbide from countries which do very little trade with Australia.
In the past Australia has imported a great deal of timber from overseas. In Tasmania, as in the other States, foreign timber has been used to such an extent that the local industry has not had a chance. In 1923-24, 167,000,000 super, feet of timber was produced in New South Wales, and, in 1927-28, the output was 146,000,000 super, feet, a decrease of 21,000,000 super, feet. The demand for timber increased, but there was a decrease in the use of the Australian product. In portion of Tasmania 63,000,000 super, feet was cut in 1923-24, and 53,000,000 super, feet in 1927-28. Mr. Firth, of the Tasmanian Forestry Department, estimates that Tasmania has 2,250,000 acres of forest lands, and that 10,000,000,000 super, feet of log timber is available. Assuming there is a loss of 50 per cent, in the conversion process, the acreage of forest lands is estimated to yield 5,000,000,000, super, feet of sawn timber. Therefore, based upon the average yearly cut over a period of 29 years, Tasmania should have 108 years’ cutting. This shows that there is little danger of depleting our forests. There is more danger of depletion if the old timber is not removed than there is through cutting. A number of pests such as borers affect our timber, and bush-fires destroy more than is cut for commercial purposes.
Our hardwood forests do not require re-planting, because re-afforestation takes place naturally. A number of these forests in southern Tasmania, which were cut 30 years ago, are now being re-cut. Mr. Lane-Poole states that Australian forest areas are estimated at 12,500,000 acres. Assuming we had an output of 5,000 super, feet per acre, that would yield 62,500,000,000 super, feet of sawn timber, or in other words 62^ years’ cutting. On the north-east coast of Tasmania, the mills have a cutting capacity of 43,000,000 super, feet per annum. The total cut for 1929 was 11,500,000 super, feet. Only eighteen mills out of 75 on the north coast worked full time; 27 worked intermittently; and 29 are out of commission. Fifty per cent, of all the mills are closed down. If all those mills were working, an extra 2,000 men would be provided with employment. Taking their wages at £4 a week we find that a total sum of £384,000 per annum would be paid in wages alone. At the present time, however, 50 per cent, of the capital invested is lying idle. The mills in Tasmania are capable of producing sufficient timber to meet Australia’s requirements.
Australia imports about 23,000,000 super, feet of shooks for case-making, thus depriving the people of Tasmania and other timber-producing States of a great deal of wealth and employment.
The Timber Worker of the 29th May last, states -
During the financial year 1028-1929, 23,000,000 feet of imported shooks cut to size arrived in Australia. Of this amount, Victoria is responsible for 14,311,166 super, feet; New South Wales, 3,844,519 super, feet; South Australia, 3,271,550 super, feet. The balance, 1,532,322 super, feet, was distributed between Queensland, Northern Territory, Western Australia, and Tasmania. The latter two States practically used their own local-grown hardwoods .for the manufacture of boxes. Tasmanian fruit-growers are the largest exporters of apples, and have proved beyond a shadow of a doubt that Australian hardwoods are suitable for box-making. In face of such evidence, a representative of Victorian fruit-growers definitely informed the Tariff Board that the fruit-growers of this State objected to any embargo being imposed upon imported shooks.
When the honorable member for Wimmera (Mr. Stewart) moved the adjournment of the House the other day in order to consider the position of the dried fruits industry he said that it was necessary to use imported cases for the export of dried fruits, but hardwood cases have been found more suitable than pine cases for the export of fresh fruit, and the more extended use of them would afford employment to many hands throughout Australia, and put hundreds of thousands of pounds in the pockets of small millowners and their employees in Tasmania. Furthermore, as each mill employs about twenty hands, it would be the means of finding employment for about 450 during the fruit export season in Tasmania. Not only is the duty not high enough, but a drawback is allowed on any imported timber which is made up into fruit-cases, and re-exported. I do not think that that should be permitted. The fruit-growers of Western Australia, who are also large exporters of fresh fruit, use practically all hardwood cases. One of our troubles is that the fruit-buyers are also importers of timber. They offer 6s. 6d. a bushel for fruit deliveredin pine cases, and 6s. a bushel for fruit delivered in hardwood cases. The effect of that is that the fruit-grower has to buy cases from the importerwho is also the fruit-buyer, and it is a source of serious trouble in different parts of Tasmania. Tasmanian oak and Tasmanian blackwood have been proved to be among the most suitable timbers for furniture making. There is sufficient blackwood available in Tasmania for furnituremaking purposes for the next 50 years, and it could be supplied to the trade at a reasonable rate, but instead of our Australian furniture-makers using these native timbers they are importing their requirements from Japan and other Asiatic countries.
– America is importing Australian timbers for use as veneers.
Mr.FROST. - According to the latest reports that is so. Our Australian timbers are the best that could be procured for the purpose. The manager of a Tasmanian co-operative concern, who is now in Great Britain after having visited the Continent, has declared that the hardwood case can stand the extra handling it has to undergo on the Continent better than the pine case can. I trust that in future the Minister will not allow any drawback on foreign timber re-exported as fruit cases.
I cannot understand the attitude of the Opposition towards the tariff. What would be the position of the hop industry of Australia without a tariff? Hops that are grown in other parts of the world can be imported and sold here even after a duty of1s. is paid.
– All the protection and all the assistance the hop industry of Australia has received came from the previous Government.
– I understand that the present Government is now considering the need for giving better protection than was afforded by the last Government. There is an honorable understanding by which the brewers have agreed not to import more than 15 per cent. of their requirements.
– I was responsible for that.
– I am well aware that the honorable member when he was a Minister was responsible for a good many things, and I have told the people of Tasmania that he was the only man of brains in the previous Ministry. If there were no duty on hops at the present time the Australian hop-growers would be thrown out of employment. At the present time the industry provides employment for thousands of people in the Derwent Valley and other parts of Tasmania, and also in Victoria. It needs further protection, so that other countries may be prevented from dumping their surpluses here as they have done in the past.
It is true, as honorable members opposite have said, that the increased duty on motor spirit will be a hardship on the primary producers who use tractors, but they will not be hit any harder than any other section of the community, and, in any case, it will be open to them to revert to the use of horses. It is not the intention of the Government to inflict any more hardship than it can help on the primary producer, but it realizes that it has to get money from somewhere, and I am sure the primary producer will be willing to play his part in helping the Government to overcome its difficulties. I do’ not agree with the honorable member for Wakefield (Mr. Hawker) that coal is the principal item for providing power for our industries. We should rather develop our hydro-electric power. There are millions of horse-power available in many of our lakes if we would only harness them. It has been mentioned that the use of machinery has been responsible for depriving many of employment, but there is another aspect to be considered. Half our mines could not be worked at a profit or half our cultivated land without the latest labour-saving appliances. Before we talk of exporting our goods to other countries we should be in a position to supply our own markets. We can balance our trade better by avoiding the importation of several millions of pounds worth of goods than by sending out a Certain quantity of produce and bringing into the country a great deal more. Although the honorable member for Forrest(Mr. Prowse) says that the tariff will hurt the working man the hardest of all, I oan assure him that the working man is quite agreeable to stand up to whatever his Government is doing, and his representives in this Parliament will see that his interests are cared for.
– So far his interests have not been cared for too well.
– What would have been the state of the country if Labour had not come into power? Where was it drifting?
– The position of the country could not possibly be any worse than it is.
– When this Government has had the opportunity and time it will show what it can do. If it had not been for the advent of Labour to the treasury benches, from 1,500 to 2,000 would have been dismissed from the post office, and I have given an instance of where others, who were due for dismissal, were kept employed. If Labour had not come into power there would have been more unemployed than employed to-day. I think honorable members opposite should allow the Government to carry its tariff into effect so that we can see how the country will get on with a proper protection policy.
.- This discussion on tariff item 1 affords a welcome opportunity to review, as a whole, the tariff policy and to endeavour to form sound conclusions as to its effect on our economic development. There are few people who do not agree that protective duties are necessary in this country, which is young in the manufacturing sense, and that so long as they are applied with careful discrimination and wise restraint, their benefits may greatly outweigh their disadvantages. There is an old adage to the effect that fire and water are good servants but bad masters, and I think that the same philosophy might well be applied to the tariff. This is a fitting time to inquire if the tariff is ministering to our needs as a loyal servant or obtaining the mastery over us and putting Australia in subjection to it. I am becoming more and more satisfied that we have been for some time, and are now to au increasing and dangerous extent using this weapon without proper discrimination and wise restraint. The financial difficulties, which Ave are facing to-day, are, to some extent, traceable to our unwise use of this great economic weapon. It will be infinitely more difficult for us to retrace our steps now, than it would have been to have avoided the wrong path some ten years ago. I speak of ten years ago because it was about that time - and before I became a member of this Parliament - that the Massy Greene tariff was introduced. By adopting that tariff, Australia definitely changed from a moderate tariff policy to a high tariff policy. .But while it will be more difficult to retrace our steps now than it would have been to have avoided taking the wrong track at that time, we shall nevertheless have to retrace those steps before we can give our exporting industries the stimulus they must receive before we can get out of our present difficulties. It will be necessary for us entirely to remodel our tariff before we can permanently overcome those difficulties.
A great many unthinking people in these days measure a citizen’s patriotism by his willingness or unwillingness to approve of high and ever higher tariffs upon goods manufactured overseas. It seems to me that there are at least two widely differing schools of thought as to what a tariff is intended to do. One school holds the view that the tariff is a means of capturing for particular industries practically the whole of the local market by virtually excluding external competition and permitting mass production methods to be used in the manufacture of these commodities locally. When a moderate tariff is used to achieve this end, and cheap production results, the tariff may be beneficial to a country. But there is another school - and this is the more popular one - which holds that the tariff is a means of raising the price levels of external competition to a height that will enable local manufacturers to make a large profit even though they are manufacturing on a (.mall scale, and with a degree of efficiency far below that of their overseas competitors. The tariff is surely a dangerous weapon to place in the hands of people who use it in this way.
I shall first deal briefly with the mass production proposition. It must be remembered that we have in Australia only about 6,500,000 people, and that, therefore, mass production here must necessarily be confined to certain articles which are required by all classes and practically all individuals in the community. Only in respect of these commodities can a young country like Australia successfully adopt mass production methods on a large scale. We all need food, clothing, hats, footwear, and certain other articles, and for these we have a sufficiently large market to justify the adoption of mass production methods. There should be no obstacles, except those which we have created for ourselves, to prevent our manufacturing our own requirements of these commodities economically and efficiently. It is quite easy to understand that we could manufacture the whole of our requirements in these lines more economically than we could manufacture only half of them. If a moderate tariff were provided to enable the Australian manufacturers to capture practically the whole of the local market in these industries by underselling their overseas competitors, it should be a good thing for the country. But if a tariff is to be used to achieve this end - not to increase prices, but to capture the market, and with the aid of mass production methods to produce and sell cheaply - it is absolutely essential that such manufacturers shall be able to secure their machinery and plant, as well as their raw materials, at the lowest possible prices. It is futile to grant manufacturers what may be described as a reasonable tariff to enable them to undersell their overseas competitors, and then load up their overhead costs by imposing foolishly high duties on machinery and plant. It is equally foolish to impose heavy duties on what may be the finished product of one industry, if it is the raw material of another industry. A 20 per cent, increase in the cost of production brought about in this way means that a 20 per cent, duty is rendered nugatory, while even a 40 per cent, duty is deprived of half its efficacy. Duties which merely raise manufacturing costs and price levels reduce the value of money and rob our wage-earners of part of the purchasing power of their wages. It is futile for us to boast that we receive 30 per cent, more wages, on the average, than the people of some other countries, if the wages are only nominal, and the good effect of them is negatived by a 30 per cent, higher price level.
No factor is more potent in raising price levels than the indiscriminate granting of tariffs for the protection of all sorts of industries regardless of their kind, size or efficiency. The honorable member for Wimmera (Mr. Stewart) said last night that our textile manufacturers had an advantage over their competitors in that they were able to buy their raw material, wool, without the added cost of ocean freight. Our tanners are also able to buy their hides and skins at a lower price than most of their overseas competitors, who have to buy raw materials imported from distant countries. Likewise, our manufacturers of fur felt hats have an advantage over most of their competitors, because they can obtain their rabbit fur at a lower price. The price of the raw materials for these industries is lower here because freight charges are, to a large extent, avoided. Yet we have to face the position that none of these manufacturers are able to export any of their products; or at least only to a negligible extent. One reason for this is, as the honorable member for Wimmera pointed out, that our manufacturers start off with a tremendous handicap through having to commence their operations in expensive buildings - probably more expensive buildings than those occupied by their old-established competitors in other countries - largely because of our protective policy that may be used in them. Then, again, our manufacturers have to pay very much higher prices for their machinery and plant than the manufacturers in other parts of the world. This, also, is chiefly because of the high duties that we foolishly impose upon imported machinery. The result of all this is that the overhead expenses of our secondary manufacturers are abnormally high and their industries are overcapitalized. Another reason why we are not able to make great advances in manufacturing is, as I have already indicated, that we impose heavy duties on partly manufactured goods which have to be used as the raw materials of other in- dustries. We are imposing these heavy duties on an ever-widening range of products. This has the effect of seriously reducing the purchasing power of our money. Unfortunately, all this seriously affects our producers of wool, wheat, meat, dairy produce and fruits, who find the struggle to market their products overseas on a competitive basis harder and harder until the point is reached - and it has been reached - when the prices which we can obtain overseas are insufficient to enable our producers to make ends meet in this country where, generally speaking, the cost of manufactured goods is higher than the cost of similar goods in any part of the world. It is true that our tariff policy has had the effect of extending the range of our manufacturing industries to include, not only those which should be our great natural secondary industries, but we have destroyed the potential capacity of these industries to compete in the markets of the world, by attempting to carry too many pensioners in the shape of small, inefficient industries, which can only exist, like hothouse plants, in the warm rays of protective tariffs, completely sheltered from the winds of competition. Such industries, by raising the average price of manufactured goods, and by increasing the cost of living, do much to hamper production of any kind. They reduce the purchasing power of money, and the effective living wage. They prevent cheap production of any kind, whether primary or secondary, and they prevent the great secondary industries from selling their products outside Australia. They prevent the profitable export and discourage production for export of our primary products. I believe that if wo had in earlier days restricted the range of protection to fewer secondary industries; if we had resolutely refused to use the tariff to create a great number of small, parasitical industries, there would be more men and women employed in secondary industries to-day. The number of our secondary industries would be smaller, the range of manufactured articles would not be so diverse, but the volume of production would be greater. The secondary industries would have been able to export their products, and share with the primary industries the task of meeting our overseas monetary liabilities. They would have been able to help in maintaining the balance of trade in our favour, and to capture the great markets to the north of Australia, where the backward peoples are becoming more and more westernized in their ideas, and more favorable towards western clothing.
One great natural secondary industry for Australia is the agricultural implementmaking industry. This is an agricultural continent, and there is a sum,ciently large demand for agricultural implements here to make mass production methods possible. Very efficient machines are built in Australia, and very efficient workmen build them. I have seen men on piece-work at the Sunshine Harvester Company’s factory working with marvellous precision, speed, and efficiency, but even in this industry, which ought to excel in every respect, prices are much higher for the finished product than in the sister dominion of Canada, where wages are quite as high, if not higher, than here. Why does the Sunshine Harvester Company need to open up in Canada in order to build machines for export? Why can it not build such machines by mass production methods in Australia? One reason is that cheaper steel and cheaper timber may be obtained in Canada than in Australia. Again, why is this? Why should they be cheaper in Canada than in Australia ? Mr. Delprat, manager of the Broken Hill Proprietary Company, who was referred to during this debate by the Minister for Customs (Mr. Penton), declared some years ago that Australian iron ore contained 67 per cent, of iron, while the ore produced from the Longwy mines in France, which might be regarded as competing against the Broken Hill works, contained only 34 per cent, of iron. That means that in France it takes three tons of ore to make one ton of steel, while in Australia three tons of ore make two tons of steel. In Australia we get twice as much steel from the same quantity of ore as they get in France- In this respect we have a tremendous advantage over other countries, because of the extraordinary richness of our ore deposits.
– The honorable member is overlooking the fact that in France the coal and iron deposits are close together.
– I am not overlooking that, and I shall deal with the subject of coal separately. Mr. Delprat was convinced some years ago that, because of the richness of Australian ore, we could produce iron and steel which could compete successfully without any tariff protection against the products of any country in the world. Since that statement was made conditions in Australia have become such that we cannot compete with other countries in the production of iron and steel. The price of coal, for one thing, has advanced enormously. Then the cost of transporting the ore to the coal has grown tremendously, because the cost of running our railways has increased, largely due to the general effect of the tariff policy. The cumulative effect of all these things tends to make manufacture of every kind more expensive and more difficult. Consequently, the iron and steel industry, which some years ago could boast of its ability to compete without any protective duty against the whole world, had some time ago to approach the Government for a protective tariff, and later on had to ask for a still higher tariff. The duty on timber has also been raised, so that the two commodities, timber and steel, which enter chiefly into the structure of agricultural implements, have both increased in cost. That, at any rate, is part of the reason why our agricultural implementmakers cannot compete on even terms with Canada, despite the great natural advantages we possess. There can be no doubt in the mind of any one who thinks at all that high duties on basic raw materials impose upon the ultimate consumers burdens many times greater than the original duty. It is like an inverted pyramid. It starts small, but it keeps on increasing the cost in every branch of industry of which it is the base until, by the time it reaches the consumer, the original duty has been multiplied many times over. That is one reason why the primage duties which the Government proposes to impose constitute one of the most deadly taxes that could be levied. Probably the primage duty of 2^ per cent, on the landed cost of goods will become at least 10 per cent, on landed cost by the time the tax is passed on to the ultimate consumer. To put taxes of that kind on such basic necessities as phosphatic rock, and bags in which we export grain, appears to me to be the height of fiscal folly.
If we had modelled our tariff from the beginning with the object of building up a few selected and natural secondary industries the country would be in a better position than it is today. “When I say a few industries, I remind the committee that our great exporting primary industries are not more than half a dozen in number. We should have confined our tariff assistance to a few carefully selected secondary industries, which under a sound economic policy might be capable of exporting as well as of meeting outside competition in the local market. . We should have set our faces against granting any protection which would add to the cost of those selected industries. Then, in regard to manufactured woollen goods, for instance, we might have been able, not only to supply our own needs, but to export great quantities of the most commonly used items such as blankets, rugs, flannels, and hosiery. We might have had a huge export trade in leather, not only for the manufacture of boots, but also for the manufacture of leather upholstery, the demand for which is so great in connexion with motor car body building. We might have supplied all the boots for our own requirements, and also for the large populations north of Australia which are getting more and more into the habit of using modern footwear. We might have become world suppliers of agricultural implements, and have been able not only to meet the requirements of our own farmers at keenly competitive rates, but also to build up a big export trade. Instead of doing that, we have built up a number of comparatively sickly, pampered, and spoon-fed industries whose horizon is bounded by the needs of a limited Australian population, which is compelled to pay more than the goods are worth.
– Will the honorable member apply that criticism to the Pratten tariff?
– Generally speaking, I apply it, regardless of party, to the fiscal policy which we have adopted in Australia. I have come to the conclusion that for the past decade we have been on the wrong track in tariff matters, and that the sooner we retrace our steps towards lower tariffs the .better it will be for the whole Commonwealth. Whatever measure of blame may be due to me as a member of the late Government, I am prepared to take. My view, however, is that the sooner the mistakes of past and present governments are rectified the better. If we had fewer, but more important, secondary industries, we should be in a position to employ far more labour than is employed to-day, under our present system of protecting scores of industries, suitable and unsuitable.
– Which would the honorable member dispense with?
– I shall come to that. An unreasonably high tariff destroys those whom it seeks to serve. We have heard a good deal of boasting about increased tariff duties being instrumental in bringing overseas firms to Australia. In discussing the measure providing for the payment of a bounty on sewing machines, the honorable member for Bendigo (Mr. Keane) said that the payment of a bounty and an increased duty would not only have the effect of establishing the sewing machine industry in Bendigo and probably in Sydney, but that the Singer Sewing Machine Company was likely to establish a factory in Australia. I pointed out that if that should happen it would be a calamity, since we should have three or four manufacturers doing what one manufacturer was capable of doing. It is quite a: mistake to take it for granted that it must be advantageous to Australian industry for overseas firms to establish factories in Australia. I shall give one or two illustrations to prove the accuracy of my statement. When such firms come to Australia it is generally because they have already lost a substantial portion of their Australian business to Australian manufacturers. Who has taken it from them? The Australian manufacturer, working on Australian capital, who commenced operations, perhaps, under a moderate tariff, and who has been making steady inroads into importations. If given suffi cient time under the original tariff, such a manufacturer would probably secure practically the whole of the Australian market, the overseas supplies continually decreasing. Then some one whose enthusiasm is greater than his foresight or thinking apparatus submits that what is being achieved slowly and steadily could be done quickly under a prohibitive tariff. Instead of the manufacturer steadily gaining on the Australian market at a healthy rate of progression, he seeks a higher tariff, and as a result brings his overseas competitor to Australia. In many cases, the Australian market is not big enough for both, and if the overseas firm is the stronger financially the Australian manufacturer using Australian capital is forced out of business. That is what has already happened. For instance, the hosiery manufacturing business in Australia is already hopelessly overdone. We have more factories producing hosiery in Australia to-day than are required to meet the needs of the Australian people. These factories cannot hope to compete in the export trade. Some of them have already gone out of business, and their capital, which has been absolutely wasted, might have been employed in profitable undertakings. Standford Proprietary Limited and the Felix Hosiery Manufacturing Company, of Williamstown, in Melbourne, have gone out of business because the high tariff duties have induced too many people to enter the business. In many cases overseas competitors have driven Australians, who were doing very well in the business, out of the trade. These firms coming here after years of experience, and, in possession of a large amount of capital, find very little difficulty iri securing the finance they require, whereas the Australian firms, which have not had so much experience in the business and whose financial resources are not so great, have difficulty in obtaining capital. When it comes to a question of collecting income tax, the department is faced with more difficulty in taxing profits going overseas. A similar position exists in connexion with the manufacture of cotton tweed, which is hopelessly overdone. In some instances cotton tweed factories are working only part time, as they cannot obtain sufficient orders to keep their machinery fully in operation. This position has been brought about by the high protection afforded to the industry, which has excited the cupidity of those interested in the business. Speaking to one of the biggest merchants in Gippsland the other day, who until a few years ago was purchasing all his requirements in cotton tweeds from one of the best known English firms for something like 50 years, I was informed that, as the firm with which he had been doing business was beginning to lose its Australian trade, it had been induced to come to Australia and start manufacturing in the expectation that it would be in the firm’s interest. It has already discovered that the business is overdone, and that there are more cotton tweed manufacturers in Australia to-day than are necessary to meet our requirements.
That is the position we are reaching in connexion with some of our industries. Australian industry, to say nothing of the general public, is better off with a reasonable amount of overseas competition, than to be driven out of business altogether by overseas firms coming here, where there is not a big enough market for both. I have given only one of many evil repercussions resulting from an unreasonably high tariff. Whatever tariff excesses former governments may have been guilty of, they are as nothing compared with the fiscal crimes already committed during the present Government’s brief regime.
I do not wish to occupy unduly the time of the committee, but I desire to give one or two illustrations of very high imposts which, to my mind, are extremely harmful. Take for example the duty on petrol. , This tremendous imposition on commercial transport must add greatly to its cost. While the extent of the tariff on petrol under the regime of the last Government was 3d. a gallon, 2½d of which was placed in a fund for road construction, and only -Jd. went into general revenue, to-day the taxation amounts to 7d. a gallon ; and in the case of petrol that is imported in containers, the duty from the 1st November next is to be 8-Jd. a gallon. I shall endeavour to show the1 Minister what will be the effect of discrimination between petrol that is im- ported in containers and petrol that is imported in bulk. The proposal is that a deferred duty shall come into operation on the 1st November next. Doubtless the Government has the worthy object of encouraging, if possible, the making of containers in Australia. I do not object in the slightest degree to that idea. It would be a good one, if it stopped there. But it will go much further than that. It has to be remembered that there is a number of small firms importing petrol who carry on a very valuable business, because they compete with the big firms that import petrol in tank steamers. The volume of their business is not sufficiently great to enable them to import petrol in tank steamers, and they are compelled, by force of circumstances, to have it brought to Australia, in American containers. It is impossible for them to import it in Australian containers because it is shipped from America in that form. While the Government may have the very best intentions, it should realize that this action will assist two or three huge importing concerns and drive out of existence the smaller importing firms that act as a healthy competitive corrective to those big concerns. The result will bc the destruction of the, healthy competition that exists to-day between the smaller firms that import petrol in containers and the big firms that can bring it here in tank steamers. I ask the Minister to weigh this matter very carefully and to consider seriously whether the proposed action will not do Australia more harm than good.
I wish to show the extraordinary height to which some of the duties have climbed particularly those that are imposed on hardware. They are not in the vicinity of 70 per cent, or 80 per cent.; they do not reach their limit at even 700 per cent, or 800 per cent. Some of the highest duties amount to thousands per cent, upon articles that are sold in large quantities to the working women of this country. I have a list that shows that on certain culinary utensils the recent duty, if calculated on the basis of the f .o.d. cost of the article, is 4,800 per cent. The f .o.b. cost of patty-pans is 9d. a gross, and the duty imposed upon them is 36s. a gross - 48 times the cost of the article.
The result has been that the firms which imported them paid for the last shipment and left the consignment with the Customs Department. It paid them better to cut the first loss than to pay such a prohibitive tariff. Some of the duties are, 4,800 per cent., 3,600 per cent., and 1,600 per cent. If the Government believes that measures of this kind will tend to bring down the cost of living, it is profoundly mistaken. Lamp-glasses are used principally by people who live in the country, and have not the advantage of electric light. The duty on lamp-glasses, if taken in relation to the factory value of the article, is 425 per cent. I could multiply these examples. It appears to me that the Government has failed to take into consideration the tremendous natural protection that in some cases is afforded to certain goods - goods that are weighty and bulky, and that accordingly have a tremendously high natural protection in the shape of packing, ocean freight, and so oil. In many cases that protection alone amounts to as much as 70 per cent, on the factory cost.
The question arises, why have these tremendous increases been permitted? Have some of these matters escaped the notice of the Tariff Board; or what is the explanation? The Government has several times brought down schedules that have not been even considered by the Tariff Board, and it has anticipated the decision of the board on numerous occasions, while the Tariff Board, itself frequently hears only one side of the question. Why? An invitation is issued to those who are interested to give evidence; but in many cases those t who could give valuable evidence dare not do so, I am thinking at the moment of firms that are engaged in the hardware business. At one time they were regarded as importers because practically the whole of their business related to goods that were imported from overseas. To-day they are distributors rather than importers, because a very substantial proportion of their business is the distribution of goods that are manufactured in Australia, and a steadily diminishing proportion is concerned with the distribution of imported goods. Let us consider the position of those firms, When Australian manufacturers place before the
Tariff Board a case for an enormous duty on some particular article, these firms could give very valuable evidence to prove the unwisdom of such action, and the extent to which the public would be fleeced if the application were granted; but they dare not open their mouths to counter the statements of the manufacturers because, in the event of the application succeeding, they will be compelled in the future to obtain that particular article from those manufacturers. Consequently, they would be driven out of business if they opposed too strongly the arguments advanced in favour of the additional duties. That is one reason why the Tariff Board on many occasions gets a one-sided view of the position.
I wish to say a word regarding the embargoes that have recently been imposed by the Government. I believe that those embargoes have increased unemployment, by a- very considerable dislocation of trade. I am more satisfied than ever that if the exchange position had been allowed to operate without embargoes or anything of the kind, it, together with our inability to buy imported goods, would have sufficed to do everything that was needed. The exchange position in London to-day is tremendously helpful to our exporting industries. On all our exports we receive a premium of from 6 per cent, to 7 per cent, by way of exchange. That means about 3d. a bushel on wheat, and a proportionate amount on other commodities. Just as the exchange is working to encourage exports from Australia, it is, in an even more salutary way, discouraging the Australian importer by imposing upon him a greater amount of additional tax than the benefit which the Australian exporter enjoys. I believe that the embargoes that the Government » has placed on imports have inflicted harm unnecessarily. The exchange position would have been sufficient to put us right. These embargoes, harmful as they have been in their application, may be quite as harmful when the time comes for their removal. I know that many honorable members opposite hope that these embargoes will never be removed. When they say that, they give their party away, and show that, so far as they are concerned, there is not much sincerity in the plea that the embargoes were imposed purely to meet an emergency. The extreme action of imposing an embargo is like the tariff gambler’s last desperate throw.
I believe that before we are much older we shall see in Australia a reversal of the present high tariff policy. I believe also that the demand in Australia for a reduction of tariffs will be quite as insistent and general as in past years was the demand for tariff increases. In my opinion, the first step which will be urged when that demand makes its full force felt will be to free the machinery of production from heavy tariff imposts. In the case of electrical equipment, the tariff taxation which we pay on power plant, and equipment generally, is greater each year than the total capital invested in the electrical equipment industry in Australia.. That shows that in order to save a very small industry, we are imposing enormous taxation on our sources of power, as well as on labour-saving appliances. We are also imposing taxation on machinery for which there is only an intermittent demand. It may be that a couple of machines of a certain type are required in twelve months, or even only one such machine in two years. Yet, because some Australian manufacturer says that he can make those machines - although he may be unable to guarantee that they will do the work - au enterprising firm which wishes to import machinery in order to make something which has never been made here before, is compelled to pay 50 per cent, or 60 per cent, duty, thus making successful competition practically impossible. These people are loaded from the outset. We shall have to reverse this foolish policy before we shall be able to run our secondary industries on a competitive basis.
The next demand will probably be for duties to be taken off raw materials required by our secondary industries. Then it will not be long before we shall have to deal with those little petty pensioner industries which can only exist with an enormously high tariff - industries which are purely parasitical in their nature. Again, and again we have had quoted in this House the words of the late Mr. Justice Higgins that unless an industry can carry a certain wage standard we are better without it. We could adapt that to the circumstances of this case, and say that unless an Australian industry can carry on without extremely high duties - duties exceeding 20 per cent, or 25 per cent. - we should be better without it. If we get back to a sane basis in tariff matters, some of these industries which we have coddled, and can now carry on only with exceedingly high duties, may be able to carry on with lower duties j because their costs will also come down. If we could adopt a tariff on the Canadian basis our future prosperity would be better assured.
I desire to read an extract from the last Canadian budget, delivered on the 1st May, 1930, by the Minister for Finance, who, in the sister dominion, deals with fiscal questions. In his budget speech, Mr. Dunning, the Minister for Finance, said -
It must never be forgotten that a large and increasing proportion of our producers and manufacturers are vitally interested in the maintenance of friendly markets for their products outside of Canada. Indeed, our national well-being depends largely upon exporting freely those commodities which we produce greatly in excess of our own needs. This budgot is frankly framed to enable us to buy more freely from those countries which buy from us most freely those commodities which arc of vital importance to us, and in the confident belief that by this means we shall help to develop and stabilize export markets for outsurplus products.
Canada will not engage in a tariff war with any country. The world shows at the present time too many examples of disaster following such a. course. As a great exporting nation, our course must be the contrary one of facilitating trade with those who facilitate trade with us. Those who raise prohibitive barriers against our products entering their markets must expect that we will ‘ extend favour to our own good customers rather than to them. I speak in no spirit of retaliation. I would much rather extend lower tariff favours to those who extend them to us than to impose prohibitive tariffs in return for like treatment. Lower tariffs to those who buy most freely from us make for trade extensions and wider markets for our products, while prohibitory duties to meet prohibitory duties generally applied would constantly tend to restrict our export markets.
The outlook shown in those words is broad and statesmanlike. If we contrast it with a policy which closes the door on our former customers - as we are doing in this country - Australia appears at a very great disadvantage., I do not hope to convert the present Minister for Trade and Customs (Mr. Fenton), or the gentleman who recently acted for him (Mr. Forde). They are both so firmly wedded to their extreme fiscal creed that I believe that they would sink with the ship rather than part with it or even modify it. I believe that they trill go down holding tightly to the leaden lifebelt of their present fiscal faith. But I also believe that the time is not so far distant as some honorable members believe when we shall have a Minister for Trade and Customs, the policy of whose government can be expressed in such statesman-likewords as those which 1 have just quoted from the lips of the Minister for Finance in Canada.
Bill returned from the Senate with intendments.
House adjourned at 10.51 p.m.
Cite as: Australia, House of Representatives, Debates, 17 July 1930, viewed 6 July 2017, <http://historichansard.net/hofreps/1930/19300717_reps_12_125/>.