House of Representatives
5 May 1931

12th Parliament · 1st Session



Mr. Speaker (Hon. Norman Makin) took the chair at 3 p.m., and offered prayers.

page 1569

LIFE INSURANCE BILL

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES

– In view of the confusion arising from existing and proposed State insurance legislation, and the necessity for properly protecting the public, will the Prime Minister afford an opportunity this week to advance a further stage the Life Insurance Bill introduced byme?

Mr SCULLIN:
Minister for External Affairs · YARRA, VICTORIA · ALP

– I shall consider the matter.

page 1569

QUESTION

MR. JACOB JOHNSON

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– Will the Attorney-

General lay on the table of the House or the Library the report made by an investigator in his department about December of last year regarding Mr. J acob Johnson ?

Mr BRENNAN:
Attorney-General · BATMAN, VICTORIA · ALP

-I shall look into the matter to ascertain if the report is one that may properly be laid on the table.

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– Has the Government come to a final determination regarding Mr. Jacob Johnson’s case?

Mr BRENNAN:

– Some matters arising out of the case are still receiving consideration in my department.

page 1569

QUESTION

TARIFF BOARD REPORTS

Mr FRANCIS:
MORETON, QUEENSLAND

– On Friday last, I asked the Minister for Trade and Customs to lay on the table the reports of the Tariff Board on certain commodities that are the subjects of new duties in the tariff schedule now before the House. In respect of some of those reports decisions were reached eighteen months ago, yet the reports have never been submitted to Parliament. The Minister promised to investigate the matter; has he done so? If so, when will the reports be available?

Mr FORDE:
Minister for Trade and Customs · CAPRICORNIA, QUEENSLAND · ALP

– I instructed that the reports should be brought before me. I shall inquire if they are available, and if they are I shall place them on the table. I know of no reason why they should be withheld.

page 1569

QUESTION

NORTH AUSTRALIA

Tobacco Experimental Plots - Air Mail

Mr NELSON:
NORTHERN TERRITORY, NORTHERN TERRITORY

– Will the Minister for Home Affairs consider the advisability of planting in North Australia tobacco experimental plots with a view to establishing tobacco-growing in that territory, thereby providing remunerative employment for the unemployed there ?

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– I shall inquire regarding the possibility of planting experimental plots on the research farms already established in North Australia.

Mr WHITE:
BALACLAVA, VICTORIA

– The last issue of the Sunday Guardian states, inter alia -

The weekly plane lands at Daly Waters, and the mail is taken an 54 miles to the railhead at Birdum by truck in the “ dry “ and by packhorse in the “ wet “. If it ishalf an hour late, the train goes on without it, despite the fact that at Pine Creek, afew hours run up the line, there is an all-night stop of fifteen hours.

Will the Postmaster-General investigate this matter with a view to establishing complete co-ordination between the railways and postal departments, thus avoiding further undue delay of the mail?

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– That is the first complaint I have had regarding the North Australia air mail, and I shall have it investigated.

page 1570

QUESTION

AUSTRALIAN AND CANADIAN TRADE TREATY

Mr PATERSON:
GIPPSLAND, VICTORIA · CP from 1922; ST CP from 1937; LCP from 1940

– The following cablegram was published in the Argus of the 4th May : -

Treaty With Canada..

Vancouver, May 2.

The Ottawa correspondent of the Vancouver Sun states that far from the general belief that the negotiations for the treaty between Australia and Canada have not been completed, it is expected that the treaty will be ready for parliamentary approval this session. The final word is being awaited from Australia.

Has the Minister for Markets any comment to make on that message?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I have nothing to add to the statement I made last week in answer to the honorable member forWentworth (Mr. Murks). I said then that the Canadian Minister for Commerce, with whom I negotiated, had been absent from the Dominion on account of illness. To-day I received a cablegram stating thathe had returned to Canada, and that during this week I might expect a further message regarding certain matters upon which a decision has not yet been reached. That shows that the proposed treaty is still under consideration by the Canadian Government. The message quoted by the honorable member for Gippsland (Mr. Paterson) is not official; it is merely an incorrect newspaper statement.

Mr Crouch:

– Is the Minister responsible for the delay?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I have just shown that the Canadian Government is still considering the matter.

page 1570

UNEMPLOYMENT RELIEF

Issueof Boots

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– The surplus mili tary clothing which has been made available by the Defence Department for distribution to the unemployed has been gratefully received, but there has been a notable shortage of boots. The Defence

Department is able to buy on contract much more cheaply than the general public, and I ask whether the Government will inquire regarding the possibility of arranging for municipalities, unemployment relief committees, returned soldiers’ organizations, and other bodies engaged in the distribution of relief clothing, to obtain supplies of boots at less than the ordinary market price.

Mr SCULLIN:
ALP

– The suggestion will be referred to the Minister for Defence who, I am sure, will give to it sympathetic consideration.

page 1570

QUESTION

GOVERNMENT SAVINGS BANK OF NEW SOUTH WALES

Trade Union Accounts

Mr HAWKER:
WAKEFIELD, SOUTH AUSTRALIA

– Has the Prime Minister received any request from the Trade Union Secretaries Association of New South Wales that the Commonwealth Bank should be asked to give preferential treatment to trade unions in respect of the funds that may be withdrawn by depositors in the Government Savings Bank of New South Wales?

Mr SCULLIN:
ALP

– I have received no such communication.

page 1570

QUESTION

WHEAT ACREAGE

Mr HAWKER:

asked the Minister for Markets, upon, notice -

Whether the Commonwealth Statistician has received estimates of the approximate acreage which will be seeded for wheat this year; if so, what is the acreage in each State, and what was the acreage in each , State last year?

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The Commonwealth Statistician has not received estimates of the acreage which will be seeded for wheat this year, but he considers that approximately 13,500,000 acres will be sown. It is not yet possible to give the acreage likely to be seeded for wheat in each State during this year. The acreage seeded for wheat in each State during 1930 was as follows: -

page 1571

QUESTION

COMMONWEALTH BANK

Mr WARD:

asked the Treasurer, upon notice -

Is ita fact that between the 22nd and 24th April last, an amount approximating £400,000 was withdrawn from the Commonwealth Bank by British merchants trading in Australia, and placed in private banks with British charters?

Mr THEODORE:
Treasurer · through Mr. Holloway · ALP

– The question has been referred to the Commonwealth Bank, and I hope to be able to furnish a reply at an early date.

page 1571

QUESTION

TARIFF PROTECTION

Effect on Industry.

Mr KEANE:
BENDIGO, VICTORIA

asked the Minister for Trade and Customs, upon notice -

  1. How many overseas firms have announced that they propose starting works in Australia as a direct result of the tariff, and what industries are included in the list?
  2. What is the approximate capital that will be invested in such industries?
  3. Approximately how many persons will be employed in such factories?
Mr FORDE:
ALP

– Information is being obtained.

page 1571

QUESTION

CANBERRA SWIMMING POOL

Mr WARD:

asked the Minister for Home Affairs, upon notice -

  1. In regard to the filtration plant at the Canberra swimming baths, will he state under what authority, statutory or otherwise, quotations were asked for the supply of this plant?
  2. What firms were asked to submit quotations ?
Mr BLAKELEY:

– The following information has been furnished by the Department of Works : -

  1. Quotations were invited by the Department of Works from firms in Australia manufacturing this class of plant. The quotation of Filtration and Water Softening Proprietary Limited was accepted under the authority of the Minister for Works.
  2. Messrs. Ferrier and Dickinson Limited, Sydney; Messrs Crossle and Duff, Melbourne; Filtration and Water Softening Proprietary Limited, Melbourne.

page 1571

QUESTION

SALES TAX

Mr JONES:
INDI, VICTORIA

asked the Treasurer, upon notice -

Willhe consider the question ofeither exempting firewood from the provisions of the Sales Tax Act, or else bringing its competitors, coal and briquettes, under the provisions of the act?

Mr THEODORE:
through Mr. Hollow ay · ALP

– The matter will receive consideration.

page 1571

QUESTION

STOUT IMPORTS

Mr FROST:
FRANKLIN, TASMANIA

asked the Minister for Trade and Customs, upon notice -

  1. What were the imports of stout from the United Kingdom for each year from 1924-25 up to 1929-30, and for the ten months ending 30th April, 1931?
  2. What is the value of exports of hops from Australia to the United Kingdom for each of the years mentioned above?
  3. What percentage of the Australian market for stout is supplied by Australian breweries ?
  4. What is the present surplus production of Australian hops?
Mr FORDE:
ALP

– Information is being obtained.

page 1571

PAPERS

The following papers were presented : -

Air Navigation Act -Regulations amended - Statutory Rules 1931, No. 41.

Audit Act- -Regulations amended - Statutory Rules 1930, No. 39.

Seat of Government Acceptance Act and Seat of Government (Administration) Act-

Ordinance of 1931 - No.6 - Advisory Council.

Advisory Council Ordinance - Regulations amended.

page 1571

NORTHERN TERRITORY (ADMINISTRATION) BILL

Report of Conference Managers.

Mr BLAKELEY:
Minister for Home Affairs · Darling

– I bring up the report of the conference of managers appointed by the House of Representatives and the managers of the Senate on the amendments made in the bill by the Senate to which the House of Representatives insisted upon disagreeing. The report is as follows: -

The managers for the House of Representatives have met the managers for the Senate on the subject-matter of the amendments made and insisted upon by the Senate in the Northern Territory (Administration) Bill, and. to which the House of Representatives insisted upon disagreeing. The managers of the respective Houses have, after conferring, mutually agreed to deal with such amendments as follows: -

That amendments Nos. 1, 3, 4, and5 made by the Senate be not agreed to.

That amendment No. 2 made by the Senate be not agreed to, but that certain amendments be made in proposed sections 4b, 4k and 4l.

This report was delayed in the hope that by this time the bill would be returned from another place. Since another place has not yet concluded its deliberations upon the report of the managers, I move -

That the report be taken into consideration at the next sitting.

Motion agreed to.

page 1572

TARIFF

In Committee of Ways and Means:

Consideration resumed from the 1st May (vide page 1568), on motion by Mr. Forde -

That the schedule to the Customs Tariff 1921-1930) be amended as hereunder set out (vide page 682 ) .

That the schedule to the Excise Tariff 1921- 1928 be amended as hereunder set out (vide page 740).

Item . 1 (Ale and other beer, porter, cider and perry, spirituous).

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– Of the many important subjects on which this Parliament has been called upon to ‘deliberate, none exceeds in importance the tariff, which affects vitally the interests of all sections of the community. Therefore it is appropriate that the fullest opportunity should be given to honorable members to discuss the many issues which it raises. It has been said by a number of honorable members who object, on principle, to tariff protection, that one of its effects is to encourage the establishment of industries which, like hothouse plants, cannot stand the cold blast of open competition. Members of the Country party have reminded us on many occasions that our rural industries have been developed to their present state of efficiency without tariff assistance. No one will deny that the pastoral industry has made wonderful progress, and I think we all take off our hats to those sturdy pioneers who went into our remote areas and, isolated from civilization, devoted the whole of their lifetime to the perfecting of that industry, which, from the point of view of efficiency, is unsurpassed in the world. To-day it is one of our financial mainstays. Likewise, we all acknowledge the great work done by our wheat-growers. They also deserve well of this country. Last year enough wheat was produced in Australia to feed 30,000,000 persons, and enough wool to clothe 100,000,000 people. Both industries have been established on a very firm foundation. Among others that have also done well may be mentioned the dairying industry. We now have an important export trade in butter. But, while we give all credit to those who built up our rural industries, we must not forget that the people living in our capital cities have clone their share in the development of this country. Without the construction of railways and roads and the provision of postal, telegraphic and telephone facilities, and without the important home market which they find in our principal cities, it would have been impossible for our primary industries to forge ahead. City dwellers pay their full share of taxation on capital expenditure for all those utilities which make life in outback areas more bearable for the man on the land. Indeed, it may be said, without fear of contradiction, that without the hearty co-operation of the people living in our capital cities, it would not have been possible for many primary producers to carry on their avocations and build up an export trade. Millions of pounds have been expended on the construction of wharfs to accommodate shipping required to export our surplus primary products, and large sums have been spent on the erection of silos for the storage of grain.

In view of these facts, I hope that our friends in the Country party will not object to a certain measure of protection being given, through the tariff, to those who are endeavouring to build up our secondary industries. Australia, which is slightly larger in area than the United States of America, has a population of only6,500,000 persons, compared with the population of 140,000,000 in the United States. Our position suggests the need for an adequate tariff protection if our secondary industries are to be developed. For many years prior to the imposition of the tariff duties which wo are now considering, we imported heavily in many commodities which might well be manufactured in this country, with the result that we had a heavy adverse trade balance. Only within the last twelve months has the position been adjusted. The figures are in our favour this year to the extent of at least £13,000,000, and that speaks well for the tariff policy of the Government.

Mr Paterson:

– Docs the honorable member seriously contend that the reduction of imports is due to the tariff?

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– Yes. The object of the tariff is to prevent imports, and thus encourage the manufacture in Australia of the goods that can be made here. Naturally, this policy has resulted in a lo9s of customs revenue, and it is now necessary to turn to other channels of taxation. Why should we send money out of Australia to enable other countries to manufacture goods that might well be made here?

I am proud of the fine factories to be seen in my electorate and in other parts of Australia. The buildings and the machinery installed indicate that enterprise and engineering skill have been exerted, and, while the manufacturing efficiency already attained may not be all that could be desired, a step has been taken in the right direction. Australia now produces practically all the boots that its people require, and the hats manufactured here are equal to the best that have been imported. A similar remark applies to locally manufactured cloth and hosiery. With suitable encouragement, our secondary industries will be able to meet all the requirements of our people in the way of manufactured goods, but tariff protection is essential. Our secondary industries cannot be expected to compete with those overseas in countries where the standard of living of the workers is lower than that of the industrialists of Australia. If we were to revert to the policy of freetrade, Australia would be merely a producer of raw materials for export to manufacturers abroad. All countries that have been successful have developed rural and secondary industries simultaneously. I believe that the majority of honorable members are anxious to encourage secondary industries. I ask them to take a broad view of the tariff question. The only remedy for our present overproduction is increased population. That would provide a larger local market, which is the best market for the man on the land. At the present time, however, unemployment is so widespread that the purchasing power of the community is seriously contracted. I realize that the problem of unemployment cannot be solved by means of the tariff alone, for the difficulty is an economic one.

We are now living in a mechanical age. Every year new machinery is introduced for the purpose of saving labour. This problem is common to the whole civilized world, and as a palliative measure, it is necessary to provide as much employment as possible for the people. Therefore, I think that the time has come- for a reduction of the number of hours of labour.

Mr Archdale Parkhill:

– An increase in prices would have the same effect.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– -No. A reduction of prices is desirable. It is impossible, of course, to prevent the introduction of improved machinery; but we should endeavour to reduce prices, and at the same time provide a reasonable standard of comfort for the workers.

Mr Mackay:

– Lower prices would mean a bigger demand for goods.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

– That would depend on circumstances. I recollect a period when low prices obtained-

Mr Gullett:

– But the honorable member has never seen so much unemployment as there is to-day.

Mr E RILEY:
SOUTH SYDNEY, NEW SOUTH WALES · ALP

- No, but low wages would not provide a solution of the problem. We know the unenviable condition of the workers in such countries, as China, Japan, and India, which have free labour, and no factory or arbitration laws. I would prefer to see the secondary industries of Australia pass out of existence than to have such conditions introduced in this country. I believe that every section in this Parliament favours the maintenance of a decent standard of living for the workers. Personally, I give my wholehearted support to the tariff schedules before us. They have been prepared by thorough protectionists, each item has been carefully considered, and I believe that the effect of the tariff will be beneficial, helping to bring about prosperity and happiness among the people.

Mr MORGAN:
Darling Downs

.- This is probably the most important measure that has been brought down this session. It is one of the five important tariff alterations introduced since the inauguration of Federation.

The first of these was the Lyne tariff, which was considered in 190S, and then followed the Tudor tariff in 1914, the Greene tariff in 1921, and the Pratten tariff in 1926 and 192S. Those are the tariff periods which have punctuated the deliberations of this Parliament in fiscal matters. I feel disposed to describe this as the “ panic “ tariff of 1931. Generally, tariffs have been introduced on the broad ground that they will protect existing industries, and encourage the establishment of others that are desirable. The same arguments that have been advanced in connexion with other tariffs have been put forward in support of these proposals; but probably they have never been advanced with less sincerity than in this case. Australian tariffs have been designed principally to give protection to wages, and it must be conceded that in that respect they have succeeded. It may be claimed that previous tariffs have given expression to the accepted ideals of our Australian democracy. The tariff which was introduced by the Deakin Government to give effect to what was then described as the “ new protection “ gave to Australia the idea of a wage policy along the lines laid down later by Mr. Justice Higgins. It led to the creation in Australia of a living wage standard as we know it to-day. From that period our ethics and economics have been inextricably tangled, culminating in the chaos which is so apparent to-day. Australia’s fiscal policy has not taken into consideration, as it should have done, the claims of the primary producers. It might be said that had they revolted against that policy they would have shown wisdom. That they did not revolt is largely due to the astuteness of the honorable member for Gippsland (Mr. Paterson) who, shortly before his elevation to office as a Minister in the Bruce-Page Government, introduced a new economic theory, to which Australia has more.or less definitely pledged itself ever since. The new doctrine then enunciated can, perhaps, be best described in the honorable member’s own words - lt ia now generally accepted that, in a country where wages and the price of secondary products are removed from the field of intense overseas competition by means of the Arbitration Court and the customs tariff respectively, the dairyman is entitled to a failAustralian price, based on Australian living standards for that part of his output which is consumed by Australians, and that he should not be too rigidly governed by conditions ruling at the other end of the world.

That was the farmers’ reply to the entanglement of ethics and economics which varying tariffs, based on a policy of high protection, had produced in this country.

It was a very effective reply, for from that policy the farming community has derived considerable benefits. By such processes as these we have reached what i may call the economic limit of our protectionist policy. The problem to-day is not whether there should be protection, but what limits should be set to that policy, and how those limits should be determined. That is the problem that this Parliament will have to determine when considering the schedules to this bill. It must be apparent to every one who is familiar with the history of the policy of protection in Australia that the increasing costs of protection are endangering the essential principles of the policy as it was conceived by its founders, and enacted by this Parliament. The attitude of the present Government towards the principle of protection is entirely irresponsible.

Mr Keane:

– The Government believes in placing. Australia first*

Mr MORGAN:

– Either the Government has not considered the effect of the extreme proposals in these schedules on the primary producers, or it is indifferent to the effect on them. They do not admit the cost because it appears to be some one else’s cost. On the other hand, the Government, in devising tariff schedules and in imposing duties and taxes generally, weighs carefully their effect on the wage-earners in the cities. “While listening with its ear to the ground for any sound of approval or disapproval from the workers in the cities, the Government adopts towards other sections of the community an attitude which has already done, and will continue to do, incalculable harm to our primary industries.

Mr Martens:

– How does the honorable member know what the Government proposes to do? He is merely guessing.

Mr MORGAN:

– I am not guessing, for the tariff schedule is before us. We know precisely what the Government intends to do. The schedule discloses that it intends to maintain the attitude towards the primary producers of Australia which it has adopted in the past. The present tariff makes the essential requirements of the farmer, so expensive as almost to put them in the category of luxuries. The increase of 1½d. per gallon on petrol may help the manufacturers, but it certainly will not help the farmers. The extremely high duty on galvanized iron is designed with the sole object of helping the manufacturers; but it reacts disastrously upon the primary producers.

I do not think any honorable member will deny that a reasonable measure of protection should be accorded to such secondary industries as may be established in Australia for the benefit of the whole community. I endorse that policy. But I am not prepared to lend my assistance to a policy of unreasonably high protection which, inevitably, leads to the exploitation of the primary producer.

Mr Jones:

– What about the sugar industry?

Mr Yates:

– And what about the tobacco industry?

Mr MORGAN:

– I am not prepared to give an unreasonable degree of protection to our secondary industries, particularly in cases where’ it will react injuriously upon the primary producers. A halt must be called in our practice of granting lavish protection to secondary industries, irrespective of the effect that it may have upon the producers. This country has in the past been entirely dependent upon its primary producers, and it will continue to be dependent upon them for a long time to come. Consequently, any fiscal policy which is hurtful to primary production is not calculated to serve the best interests of the country, even though it may have some passing or transient advantages. Our existing tariff has multiplied the imposts placed upon our producing community. That statement may be a platitude; but if it is, it is a platitude well worth repetition. We cannot allow the continuation of a tariff which discriminates against the primary producers.

No one can truthfully deny that the net result of all our tariff-mongering has been to increase taxation in Australia. Almost every time the Minister for Trade and Customs (Mr. Forde) has laid a new tariff schedule on the table, he has said that it will result in an increase in employment. That statement is a platitude. The result of the tariff policy of this Government has actually been substantially to increase unemployment, and there has been no countervailing increase in production. The Minister has told us, time and again, that certain duties would result in the establishment of new industries and the expansion of existing works ; but those statements have not been borne out by experience. Even if it be said by some honorable members that the tariff has not caused an increase of unemployment, it cannot be argued that it has reduced the number of persons out of work in this country. If there is to be a revision of the tariff, the trend must be downward. The first flush of novelty in the statements by the Minister for Trade and Customs and the Prime Minister that our increased tariff duties would increase employment has faded, and the Government is to-day confronted with the absolute f allure of this policy. There has been neither an increase in production nor an increase in employment. We can now realize that in order to improve the position of the country we must revise our tariff duties in the interest of the primary producers.

I have made it clear that I approach this subject, from the angle of the primary producer. The increased duties and prohibitions on imports provided for by the present Government have oppressed the primary producers, and we can now see that substantial reductions of duties are’ essential for the restoration of prosperity. I trust that when the items of the schedule are under specific consideration, honorable members will divorce their consideration of them from the venalities of party politics. The tariff should be considered from the point of view of the primary producers, who, for many years, have been carrying this country upon their backs. Is it right or fair that the costs of our primary producers should be just as high to-day as they were when their products were bringing peak prices in the markets of the world? No one can say that this is just. One of the main contributing factors to this state of affairs is, undoubtedly, the high tariff policy of the Government. It has not been so much high wages, and heavy taxation, that has imposed definite hardship upon, the primary producers of Australia, but the operation of high tariff schedules in conjunction with the imposts inflicted upon the community generally by the wage exactions of the Arbitration Court.

Mr Martens:

– Not upon the farming community?

Mr MORGAN:

– The honorable member has such an obtuse mind that he cannot see that although the farmer is not immediately affected by awards of the court, the awards of the court have a direct bearing upon his activities. Let me endeavour to penetrate the obtuseness of the honorable member’s mind by telling him that the awards imposed by the Arbitration Court have affected the cost of every commodity used on a farm, from the piece of material used by the farmer’s wife in making the children’s garments to the most expensive piece of machinery used in tilling the soil. The awards of the Arbitration Court are reflected very definitely and disastrously in the cost of primary production. To-day, when the returns from primary produce are in many cases below the cost of production, farmers are compelled to pay as much for the commodities they require as they were paying when their produce was bringing pinnacle prices. That is a point that must not be overlooked. Although primary produce is bringing prices which in many cases are below the cost of production the costs of the primary producer are 70 per cent higher than they were in 1914. In other words agriculture to-day is occupying the lowest rung of the economic ladder. That is a disastrous admission to make, but no good purpose can be served by blinking it. Arbitration Court awards and high tariffs are largely responsible for our present economic position, and until Parliament removes these obstructions we cannot look for a silver lining to the present economic clouds. One way out of our present difficulties is to alter our present wage system by dispensing with the Arbitration Court and the economic fallacies which it has forced upon the country. There is also an obligation upon this Parliament to so amend the tariff that primary producers will have ait. opportunity to reduce the cost of production. It has frequently been stated in support of high duties such as thosenow under consideration that it has been impossible to check the current demand for duties. I do not think that that contention can be substantiated, but if it can, the obligation is upon this Parliament to check the demand. Hitherto the course adopted has been to allow the tariff to inflate itself until it bursts, but that- policy cannot be followed any longer.

This tariff represents, perhaps more definitely than any other that Parliament has considered, an inflated tariff which, has practically reached bursting point. We have been compelled to submit to extremely high duties and prohibitions introduced at a time of panic that will not stand in the light of cool, cairn and deliberate criticism. When the items are under consideration it is my intention to support the imposition of reasonable duties on commodities produced by industries capable of expansion, and to remove as far as possible the unnecessarily heavy costs placed upon the shoulders of the primary producers. It shall be my endeavour to assist in framing a tariff that will tend, not to increase but to decrease the costs of production, and thus give some measure of relief to all the producers of this country. This is not a party question, and I know that a good case can be made out for the farmers, not only by honorable members on this side but by honorable members opposite, many of whom represent and are anxious to assist primary producers. I hope that as a result of our combined efforts the schedule will be amended and the primary producers relieved of a heavy burden which they are now carrying. I know that there is not likely to be a renunciation of the principles of protection, and I would not associate myself with any such policy. Protection must be fashioned, not as it has been in the past, but on the lines of equity and justice. For that reason I shall seek to have the schedule amended. At the present stage I content myself with saying that I support generally the idea of protection, but am not favorably disposed towards the tariff as it stands.

Mr JONES:
Indi

.- I am pleased that honorable members have been accorded the opportunity for which they have been clamouring for so long to discuss the tariff schedules of this Government. In common with other honorable members* who have already spoken, it is my desire that the debate shall not savour in any way of party feeling, but that a broad view shall be taken of the matter.

In the ease of probably a big majority of the bills that are introduced into this Parliament, the voting on them is not affected by the speeches, no matter how long the debate may be prolonged. The tariff, however, is on an altogether different plane. In its consideration honorable members are not bound by party ties, but are free to deal with each item from the standpoint of what, in their judgment, appears to be most advantageous to the country.

I agree with the honorable member for Darling Downs (Mr. Morgan) that the prosperity of Australia depends mainly upon its primary producing industries; but I disagree with his contention that the tariff is causing incalculable harm to those industries. He alleged that the Government had done, and that it intended to do, harm to those industries by means of the tariff, and instanced the cases of petrol and galvanized iron. I support his view that, in the interests of primary producers, the duty on petrol in containers ought not to have been increased by 1-Jd. a gallon. I was opposed to that increase when it was made, because of the hardship that it was likely to inflict, and I have not since found cause to alter my opinion.

Mr FORDE:
ALP

– It does not apply to petrol in drums.

Mr JONES:

– There is at present an agitation to have it extended to 40-gallon drums; but I hope that the Minister will not accede to such a request.

The honorable member for Darling Downs referred to the price of galvanized iron. I am opposed to the exploitation of the people by any manufacturer who is given protection by means of the tariff. The present Minister for Trade and Customs (Mr. Forde) and his predecessor (Mr. Fenton.) have stated on many occasions that the power which grants protection can also take it away. I trust that if any cases of exploitation are brought to light the power in question will be exercised.

The honorable member for Darling Downs refused to be drawn into a discussion of the sugar industry. He accused the Government of having an eye on community votes when framing the tariff; but he would not utter one word against the embargo imposed on the importation of foreign-grown sugar, nor would he discuss the cost of that embargo to the people of this country. I remind him that the sugar industry is a primary industry which gives employment to a large number of workers. His silence on the subject of the embargo led me to believe that he is in favour of it. Therefore, his attitude towards protection is inconsistent. He said that the primary producers are being oppressed by the tariff. If that oppression is no different from what is suffered by the sugar producers, the primary producers have little of which to complain.

Mr Gullett:

– But the two greatest of our primary industries get nothing except penalties.

Mr JONES:

– That interjection leads me to another primary industry. In 1929, the honorable member for New England (Mr. Thompson) moved for the appointment of a select committee to inquire into the tobacco-growing industry. The statistics then showed that for a number of years that industry had been in a languishing condition, and that unless something was done on its behalf, it would go out of existence. The Deputy Leader of the Opposition (Mr. Gullett), who was then Minister for Trade and Customs, strenuously opposed the appointment of that committee.

Mr Gullett:

– “What good has it done ?

Mr JONES:

– I shall tell the honorable member what it has done.

Mr Gullett:

– All that it did was to spend a great deal of the public’s money. Its report is not worth twopence.

Mr JONES:

– The strenuous opposition offered to the appointment of that committee by the Deputy Leader of the Opposition was noted with pleasure by the legal adviser of the big tobacco combine, who was within the precincts of the chamber at the time. The honorable gentleman said, “I hold no brief for the great tobacco trust”; and a little later, “I reiterate that I have no “brief for this big tobacco combine. I do not love big combines any more than other honorable members do “. Yet he was strongly in favour of, and gave his blessing to, the rubber merger. He went on to say -

I do not think that the interests of the growers are likely to be particularly served by the motion now before the House. In view of the investigation at present proceeding, and the undesirability of incurring what 1 look upon as unnecessary expenditure, I appeal to the honorable member for New England to withdraw his motion.

Mr Morgan:

– Will the honorable member tell us in what way the tariff is helping the farmer?

Mr JONES:

– It is affecting advantageously the particular industry to which I am referring. So that he might run true to form, after the select committee had furnished its report the honorable member for Henty belittled it. Yet the newspaper circulating in . the Victorian district where one-half of the tobacco grown in Australia is produced, said that that report ought to be in the hands of every leading tobacco-grower. That is the opinion held of it by practical tobaccogrowers. Apparently the honorable member considers that his opinion is more valuable than theirs.

The Deputy Leader of the Opposition declared that there was no justification for the appointment of the select committee of inquiry into the tobacco industry. I shall quote a few figures which prove conclusively that the recommendations of that committee have conferred substantial ‘benefit on our tobaccogrowing industry. In 1914-16 the percentage of Australian-grown tobacco leaf used in this country was 13.79. Gradually that decreased until, for the year 1928-29, the last for which figures were available, it had fallen to 5.11 per cent. The answer to a question recently asked by me in this chamber disclosed that last year the quantity of Australian leaf used showed an increase of 44 per cent, on that used in the preceding year. That is definite proof of the advantages which have resulted from the tariff that was imposed upon the recommendation of the select committee.

Let me now deal with our wine industry. The Bruce-Page Government reduced the export bounty on sweet wine from ls. 9d. to ls. a gallon, with the result that it became unprofitable for manufacturers to export. That had its effect on the growers, many of whom were returned soldiers who had been persuaded to go into the business with the promise that it would return them a lucrative living. Thus because of the action of the Bruce-Page Government, those unfortunate people were faced with the prospect of having to leave their grapes to rot on the vines, while the wine-makers had their cellars stocked to capacity with wines that they could not profitably export. When this Government assumed office, it took prompt steps to reinstate the bounty of ls. 9d. a gallon, with the result that the stocks of the makers went from the cellars overseas, and the grapes of the growers were utilized to make more wine. What better example could there ‘be of the practical manner in which this Government assists local industries. It also made’ an endeavour to help the wheatgrowers, but unfortunately that effort was stultified by the action taken in another place. Our rice-growing industry has benefited as a result of the protective tariff imposed by this Government. Those illustrations of the advantages resulting from a protective tariff effectively offset any drawbacks mentioned by the honorable member for Darling Downs (Mr. Morgan) .

Mr Martens:

– The honorable member for Darling Downs was careful not to say anything about Mount Morgan.

Mr JONES:

– He did say something about the Arbitration Court and the alleged necessity for a reduction in wages. The abolition of the Arbitration Court was the principle issue on which the last general election was fought, and the electors recorded their opinion in no uncertain manner. Yet the honorable member and his colleagues refuse to accept that verdict, and still urge that the Arbitration Court should be abolished, and wages and industrial conditions adjusted by Rafferty’s rules.

The honorable member for South Sydney (Mr. E. Riley) hit the nail on the head when he stated that for many years we have imported goods that should never have been brought into the coun- try. Even the Deputy Leader of the Opposition (Mr. Gullett) cannot deny that. The Government of which he. had the honour to be a member imported millions of pounds worth of goods such as should have been made here. Had they been produced and manufactured in Australia, thousands who are now walking the streets would be in employment.

Mr Gullett:

– This Government has been in office eighteen months, during which it has endeavoured to persuade manufacturers to make those goods here; yet unemployment has increased by over 1,000 a week in that period.

Mr JONES:

– Had this, tariff not been imposed the percentage of unemployment would be much greater than it is. In one year alone, £14,000,000. went out of Australia to purchase motor cars; and parts. I favour the erection of a tariff wall which would compel those who want such a market to manufacture in Australia. That would keep those huge sums circulating in the country. Last year between £4,000,000 and £5,000,000 went abroad to purchase timber. Australia has magnificent forests and timber resources, and’ many of its mills and millhands are idle. In my electorate there is a big wooden guest house, constructed exclusively of foreign timber, right in the heart of the forest. That Gilbertian situation should be righted. As an indication of the esteem in which our timber is held abroad, I mention that the United States ©fi America is now importing large quan-titi.es of our beautiful woods, which are used as veneers. We import between £2,000,000 and £3,000,000 worth of tobacco each year. Australia’ sends too many millions abroad to purchase things that could be produced and manufactured here. I would impose duties on anything that can to advantage be produced or manufactured here. I am pleased to see that the tariff has, at all events, given protection to our tobacco and timber industries, and I am hopeful that much of the money that has previously gone abroad for those commodities will in future remain in the country. There are 702 registered tobacco growers in Australia, of which 414 are in Victoria. On the 30th June, 1930, there were 352 registered tobacco-growers in that State. Within six months of the imposition of the tariff that number had increased by 62. That was one improvement which resulted from the recommendations of the special committee on the tobacco industry.

The honorable member for South Sydney said that we should take a broad view when discussing the tariff. That elicited “hear, hears” from honorable members opposite. I trust that they will enlarge their vision and adopt a broad view. Some honorable members on the other side, particularly those of the Country party, are inclined to take a one-eyed view of tariff matters. They would like to have their machinery brought into the country duty free, but they would be up in arms against any proposal to allow Russian wheat to be dumped into Australia at, say, ls. a bushel’.’ They would be ardent protectionists then. I believe that our primary industries should be built up side by side with our secondary industries. Of course, we all know that unless the primary industries are prosperous, the secondary industries cannot thrive. The honorable member for Darling Downs (Mr. Morgan)’ dwelt on the hardships being endured by those engaged in the primary industries at the present time. Unfortunately, those hardships are only too real, but it is also true that the secondary industries are having a lean time. The warehouses of the boot manufacturers and clothiers are filled to overflowing, with boots and clothes, while thousands of men, women and children are walking about ill-clad, because they are unable to buy the things they need. There is something radically wrong with a system which allows people to go in want when there is more than enough of everything for every one. Yet some honorable members opposite say that to cure our troubles we must have lower wages. Surely it is evident that if the purchasing power of the people is not sufficient with wages as they are, it cannot be improved by. making wages still lower.

Mr Gullett:

– Who has suggested that in lower wages lies the solution of our difficulties 3

Mr JONES:

– The honorable member for Darling Downs said that industry was being crippled by the conditions imposed upon it by arbitration court awards.

I do not agree with him. I believe that the Arbitration Courts have done, and are doing, good work. At the last election the people declared in favour of arbitration, and I accept their verdict.

Mr Gullett:

– There will be another decision soon.

Mr JONES:

– Possibly. It is for the people to say, and for us to accept their decision.

I am in agreement with the proposal to impose a heavy duty on imported timber. If a man who desires to build a house is not satisfied with local timber, let him use imported timber, but make him pay for it. All the timber used in Parliament House is Australian grown, and this building is good enough for any one to live in.

Mr Keane:

– It will do us!

Mr JONES:

– If people insist on smoking imported tobacco, let them do so. Let them have their tobacco grown by negroes and negresses in America, but make them pay for the privilege. If a man is determined to have a “ Stetson “ or a Borsalino hat, there is no reason why he should not, but make him pay for it. In that way those with fastidious tastes, who insist on having something other than what is produced in Australia, will be made to contribute to the support of Australian industry.

The honorable member for West Sydney (Mr. Beasley) referred a few nights ago to the tobacco industry. Representations had been made to him, he said, by the Federated Tobacco Workers Union of Australasia. In the letter which the union wrote, it was stated that the late director of tobacco investigations (Mr. C. U. Slagg) had said, in evidence, to the Select Committee on the Tobacco-Growing Industry in Australia, that, in his opinion, 5s. 4d. per lb. was an unnecessarily high duty to impose on imported tobacco leaf. Mr. Slagg was not in this country for very long, and, with all due respect to him, I prefer to accept the opinion of another witness, Mr. H. H. Jennings, of Texas, Queensland, whose evidence before the select committee is recorded as follows : -

By the Chairman. - Are you a tobaccogrower? - No, not now.

When were you growing? - I was growing for the British-Australasian Tobacco Company from 1904 to 1020. I grew tobacco and conducted experiments all over Australia.

In what capacity? - First of all I was in the old Cooper-street factory in Sydney. I had charge of our domestic leaf operations for some time.

What sort of experiments? - Growing experiments in different parts of Victoria, Queensland, and New South Wales.

In what places? - On the Ovens River at Wangaratta, Bathurst, Tumut, Tamworth,and here in Texas. Also in different places on the North Coast of Queensland, including Proserpine, Caldwell, Coomera, and Cairns.

Do you think the growers would need £100 an acre profit? - It depends on whether a man is growing on tribute or straightout.

That has nothing to do with the buyers? - While we permit the importation of American leaf, the Australian public will not buy much else. If we put a duty of 10s. per lb. on American tobacco the public will very soon learn to smoke the Australian product.

The duty imposed on tobacco imported into Great Britain is considerably more than the price at which Australian-grown tobacco sells here. In the course of the letter read by the honorable member for West Sydney, it was stated that the selling price of Australian aromatic tobacco was 7s. per lb. ; the duty alone on that class of tobacco in Great Britain is 8s. 10d. and 9s. 9½d. per lb. In view of the fact that revenue is so urgently needed by the Treasury, and having in mind that the duties and excise on tobacco sold in this country are not unreasonably high, I trust that no alteration will be made in the direction of reducing them. I hope that the House will consider these tariff items on their merits. Some of them I favour, and those I shall support; others I do not like, and those I shall oppose.

Mr KILLEN:
Riverina

.- A great deal of time has been taken up, not only in this Parliament, but also in many other Parliaments in debating the important subject of freetrade versus protection. In this instance the debate is somewhat different, because we are discussing high tariff versus low tariff, and the reason for that is that we have not one single declared Freetrader left in this chamber. It appears to me that the usual academic and theoretical discussion of this problem does not get us much nearer its solution. I am a strong believer in the maxim that an ounce of fact is worth a pound of theory, and it is from the stand-point of practical experience that I propose to approach this subject, so to discover, if possible,what has been the result not “only of the tariff policy generally, but also of the extremely high duties which have been operating during the last eighteen months, although this is the first, opportunity that honorable members have had of expressing an opinion on them. The debate, so far as it has gone, has disclosed the fact that members on this side of the chamber have considerably modified their views in regard to protection. They have become lower tariffists than they were when the last discussion on this subject took place. I am one of those who have, to some extent, changed their views. “When I was elected to Parliament about nine years ago, I considered myself a moderate protectionist, and I believed that it would be ^possible for primary and secondary producers to work hand in hand for their mutual benefit under a system of moderate protection. I confess that I have since been disillusioned. To-day our tariff duties and our costs of production are higher than those of any other country in the world. Who is benefiting from that policy? In the first place the manufacturers asked the Government for higher duties, contending that they must have more protection to enable them to compete successfully with the manufacturers of other countries. Their request was granted.

Mr Forde:

– And so was the request of the rice-growers of Leeton and Griffith. .

Mr KILLEN:

– Surely they had the right to participate in the policy of this country, at a time when they were being penalized by having to pay extreme prices for their requirements.

Mr Forde:

– That is why I granted their request, although it was refused by the Bruce-Page Government.

Mr KILLEN:

– Because of the higher duties the cost of living increased, and the workers approached the Arbitration Court for increased wages. They had a perfectly good argument. They said that they were entitled to additional wages because their cost of living had increased. The court granted their request.’ As a result, a further increase took place in the cost of production, and the manufacturers demanded still higher duties. Those duties were imposed, and in turn the cost of living increased. The workers

1.543

then approached the Arbitration Court, asking for still higher wages, and the court granted their request. So the vicious circle has gone on until we have now arrived at the breaking point.

Mr Riordan:

– Is not the primary producer better off as a result of the higher tariff and higher wages?

Mr KILLEN:

– The primary producers were very rauch better off when the tariff and wages were low. No one ia the community is better off because of our policy of extreme protection and inordinately high wages. Certainly the manufacturers are no better off. Their costs of production have increased while their profits have remained stationary. The workers are no better off, because the high nominal wage which they now receive does not purchase more of the necessaries of life than did the lower wage “which ruled previously. The nominal wage is higher, but the effective wage has not been altered. The primary producers - the mainstay of the country - produce from 96 per cent, to 97 per cent, of our exports, which represents over 70 per cent, of the wealth of Australia, yet they are worse off to-day than they were a few years ago. They have been hard hit by the increase in the tariff. Since 1 entered this Parliament the tariff has been increased no fewer than four times, and unemployment has spread enormously. The duties have been practically doubled. The depression which was bad enough then has become much more pronounced. Every one is worse off than before. Our present system of high tariff protection has inevitably broken down.

Mi Riordan. - It has not yet started. According to the honorable member it came into being about eighteen months ago when the Labour party took office.

Mr KILLEN:

– This policy has been operating for eighteen months. Surely we have had sufficient experience of the results of high protection and prohibition.

Mr Riordan:

– Why did the honorable member support the .Massy Greene tariff ?

Mr KILLEN:

– I did not support it. I was not then a member of this chamber. I have been trying to arrive at the average duty which was operating when I was elected to Parliament and the average duty now, hut I find that it is practically impossible to do so. However, I do not think that I am far wrong in saying that during that period the average dutylias increased from between 20 per cent, and 25 per cent, to between 50 per cent.and 60 per cent. In addition to tariff protection there is the natural protection, which is a considerable item. The cost of freight, handling and insurance gives a natural protection of from 15 per cent, to 25 per cent. It may, perhaps, be 30 per cent., and the probability is that it averages over 20 per cent. In order, therefore, to arrive at the actual amount of protection that is afforded to the manufacturers of this country, we must add 20 per cent, for the natural protection. Eight or nine years ago, before we set about increasing the rates of duty, the average customs duty was, I think, about 25 per cent., which might be regarded as a moderate rate. Properly managed an industry should be amply protected by a customs duty of 25 per cent., and a natural protection of 20 per cent., which means 45 per cent, over all, and it is outrageous that the consumers have now to pay double that impost.

Another aspect, which we cannot afford to overlook, is the effect of these enormously increased rates of duty on our revenue. The importation of a great many articles is absolutely prohibited, mid the effect of extremely high rates of duty has been to prevent the importation of others. The result is that the customs revenue has fallen by from £10,000,000 to £12,000,000 at ‘a time when the revenues of the Commonwealth and the States have diminished by £25,000,000. One of the greatest problems of the Government is how to make up that loss in . customs revenue. It is, in my opinion, impossible to do so by direct taxation. Already an effort has been Hinde - most unfairly in my judgment - to increase the revenue from land tax. Although, during the last two years, land values have fallen by from 30 per cent, to 60 per cent., government valuers are at present engaged in increasing valuations for land tax purposes. Already in some cases they have increased valuations by 100 per’ cent.. If that is not robbery, I should like to know what is. This effort, however, will fail because a great majority of land-owners cannot afford to pay an increased land tax.

Mr Riordan:

– Yet the honorable member is supporting a party that will permit of interest on overdrafts being increased to 8 per cent.

Mr KILLEN:

– I am not. I have frequently said that the rate of interest must come down. Everything else is coining down, and interest should likewise pome down.

We have heard a good deal about the need for a scientific protective tariff and I quite agree that a more scientific method of framing our customs duties is necessary. But the Government has done nothing in that respect. There are industries in Australia which should never have been established, because they cannot economically produce the goods that are protected. Many of them give employment to very few people, but in order to keep them going, a great number of people are penalized by the high prices they have to pay for the goods produced by these few under high protective duties. That is not scientific protection. Industries which penalize the whole community to keep a handful of people employed should not be afforded protection.

As I have said previously, the system of high protection has been tried in Australia and found wanting. Our costs of production are now the highest in the world, our tariff is the highest in the world, and under present conditions Australian manufacturers have no hope of producing goods at world competitive prices. They are obliged to depend entirely upon the home market. If protection will not enable them to manufacture for the outside world, as well as for the home market, it has failed in itspurpose, and should be withdrawn.

Mr Lewis:

– Have not we a big enoughjob to supply our home market first?

Mr KILLEN:

– I do not think so. The primary producers are penalized by high duties at a time when they are getting the lowest prices for their products, particularly wool and wheat, that Australia, has ever seen, and are actually selling them at less than the cost of production. The majority of these producers, are working on overdrafts and loans.. They are struggling to keep going until times get better, and costs of production become lower. But they cannot continue doing so indefinitely. Every one agrees, that if the primary industries, upon which the country is dependent, are to be allowed to go out of existence, it will mean disaster to the whole community. A common-sense study of the results of the present policy reveals the extent to which it has failed, and the time has come to call a halt. If the present Government will, not change the policy, assuredly another government will have a chance before long to do so. [Quorum formed.’]

Mr GIBBONS:
Calare

.- I propose to confine my remarks to a few general principles that, in my opinion, should receive consideration. I recognize that the circumstances of Australia do not admit of the adoption of an absolutely freetrade or protectionist policy. Any tariff system we adopt should have regard to the circumstances of the industry to be benefited, and also the likely effect of its protection upon the primary industries. We must realize the interdependence of primary and secondary production, and tariff policy must be designed to balance internal trade in such a way as to give the maximum amount of employment, and, while developing manufacturing activities, do no injustice to the man on the land. Since the Commonwealth policy of tariff protection was first introduced, the need for assuring to those engaged in primary production a reasonable living standard, and security in their investments, has been recognized. Upon those industries the existence of the nation depends, but we are forced to the conclusion that sufficient regard has not been paid to them. A few of them are required to bear the burden of a fiscal policy adopted to foster certain secondary industries, and to secure to those engaged in them generous wages and working conditions. When the strain upon the primary industries becomes so great that those engaged in them cannot have anything like the standard of living which is claimed for the secondary industries, disorganization is inevitable. In formulating a fiscal policy, the scales of equity should be held evenly, and should not be weighted against any one section of the community. The ultimate effect of a policy that bears inequitably upon one class of industries is their gradual disorganization and the insolvency of those engaged in them. That the scales are weighted against one section, of producers we cannot fail to recognize., I do not wish to be over pessimistic, but all must agree that Australia to.-day is living on its. till money; the income received from primary production has fallen to such an extent that it is no longer sufficient to carry on the affairs of the nation, meet its obligations, and give to all sections of the community those conditions which we, as a democratic people, desire.

The present fiscal policy encourages the aggregation of people in and about centres where secondary industries are established, and ignores the need for a proportionate development of primary production. Whilst people may be artificially maintained in the big centres for a period, eventually the industries which support them will cease to exist. That tendency in Australia is demonstrated, in two definite ways. At the present time the whole transport system is utilized to carry foodstuffs to idle people in the large centres of population, while the very existence of those who are creating the basic wealth of the country is being jeopardized to such an extent that many of them are ceasing production. If that policy is continued, the inevitable result will be bankruptcy. Last week an honorable member referred to sewing twine as an illustration of the grave disregard of the consequences that must ‘follow the artificial stimulation of purely ephemeral industries. Sewing twine was in general use by the farmers, but in order to foster an Australian secondary industry, the price has been increased, its use is being discontinued.

Mr Cusack:

– What substitute is the farmer using for closing his bags?

Mr GIBBONS:

– A small steel wire spear; in one afternoon the farmer can prepare enough of these to supply his requirements for the season. In framing the tariff, consideration should be given to the possible duration of the industry to be benefited. The artificial maintenance of secondary industries that are inefficient places a direct charge upon primary production. For a considerable time Australia’s tariff policy has given evidence of that defect. We are in danger of losing sight of the fact that although scientific developments may tend more and more to displace human energy, particularly in industrial centres, the only means by which we can maintain industry is by enabling each member of the community to become more self-supporting. I do not wish to be misunderstood; I believe in a policy of protection for the development of industries, but only upon a basis that will be equitable to all sections of the community. I am not in favour of a policy which increases the cost of commodities in order to bolster up inefficiency. Whether we like it or not, the manufacturing methods of other countries will continue to become more efficient, and we must require for our protected industries that they also shall keep abreast of the times.

The effects of the present tariff policy can be simply illustrated. The first requirement of a man who goes out to develop the outer zones is an axe. At one time an imported axe handle could be bought for 10d., and it would stand up to hard work for a very long time. The tariff has increased the price of this article, in order to protect an industry for the production of hardwood handles, which snap very readily under strain. After all, we are considering a bread and butter problem; we must do nothing that will deprive any section of the community of food, clothing and shelter.

Let us ^consider the position of our primary producers, upon whom our secondary industries depend. Can any one deny that they have to pay unduly high prices for very many of the commodities which they use? Any fiscal policy which ignores the interdependence of primary and secondary industries must fail in its true purpose, which should be to ensure the maximum volume of employment in ‘both primary and secondary industries. It has been said that the agricultural implement manufacturers gave an undertaking that, in return for a certain measure of tariff protection, which would secure to them the home market,’ there would be a reduction of 5 per cent, in the prices charged to our farmers for their agricultural implements. But we now learn that although the manufacturers have had . their wages costs decreased by 15 per cent. their profits on the finished commodities are greater than prior to the arrangement entered into with the Government; and of my personal knowledge there has been an increase in the prices charged to farmers for duplicate parts since this Government imposed additional duties and embargoes on the entry of certain classes of machinery from overseas. It is only reasonable to expect that, in any such arrangement due regard should he paid to fluctuations in the cost of production, and that if costs fall the primary producer should get his share of the benefit.

Mr Lewis:

– That should apply to the cost of imported goods also.

Mr GIBBONS:

– Quite so. There is another important principle involved in this question - the annual capitalization of the assets of the people operating in our primary and secondary industries. A fiscal policy which does not ensure an equitable distribution of the nation’s income will result sometimes in a reduction of the values of such assets. A tariff designed to maintain the level of fixed charges in the centres of population for primary products, and fixed prices also for manufactured commodities, is beneficial so long as the assets of the nation remain in a normal state. Immediately the value of. assets in centres of population increases beyond a certain limit we have a condition of inflation, due to the reaction from our fiscal policy, in much the same sense that inflation in prices may be due to over borrowing or an over liberal flow of currency. Whenever that condition obtains in a community, undue encouragement is given to the expenditure of money, and the inevitable consequence is a decline in the value of assets, with all its attendant hardships upon the community as a whole. I do not suggest that the fiscal policy of the nation may be wholly responsible for this condition of affairs; the point I wish to emphasize is that if proper regard is not paid to the necessity for the development of primary industries in co-ordination with secondary industries it is a contributing factor, and, as such, should claim the attention of honorable members at this juncture, because at no time in our history have we been confronted with problems so portentous to the nation. We should consider also this phase of the problem: If any section of the primary producing industry is called upon to bear too great a part of the nation’s burden - I exclude those particular primary industries which supply exclusively the home market - and ii that burden prevents the persons engaged in it from carrying on their business profitably, the whole range of our industries will be affected. The honorable member for South Sydney (Mr. E. Riley) this afternoon paid a well-deserved tribute to the pioneers in our pastoral and wheat-growing industries, which he said had been developed on a firm foundation. I say with deep regret that at no period in our history have those industries been in a weaker condition than they are to-day.

Mr Lewis:

– The same may be said of every other industry.

Mr GIBBONS:

– I thought I had made .it clear that our primary and secondary industries are interdependent, and that “we looked to the former to supply credits overseas to meet our external obligations. If they fail to do that, the whole economic structure of the nation must collapse:

At a later stage in the discussion on the tariff I shall refer in detail to particular items in the schedule which, in my judgment, seriously hamper the development of our primary industries. The present fiscal policy of the Commonwealth finds support in the larger centres of population because of the hope that it will mean permanency in employment; but an obligation rests upon this Parliament to so mould that policy as to ensure a more equitable distribution of the population, in order that one individual may be less dependent upon another for his livelihood. It has been said recently in this House by way of interjection from some honorable members, and in the speeches of others, that our present problem is due to over production, and that the situation will be accentuated if production is increased. There might have been some ground for this belief a couple of months ago, but more recent world movements have been such as to encourage the hope that the future holds more promise for our primary producers. I believe that we could dispose of the whole of our enormous wheat crop by the end of June, and developments in the wool market overseas indicate that there is now a definite demand for the remainder of this season’s wool. Nevertheless he would indeed be a brave man who ventured to prophesy what would be the position in overseas markets twelve months hence. To meet our own difficulties our fiscal policy should bc so framed as not to require the haulage of foodstuffs over long distances to supply the needs of over-large populations in our capital cities. The people should be encouraged to engage in rural occupations - to become the producers of those commodities which the world requires. We should, in short, have as our objective a more equitable distribution of our population. Many persons would mould our fiscal policy in such a way as to retain our people in the large centres of population. They would adopt the fiscal policy of other countries, whether importing nations or those having a huge surplus of manufactured products; but Australia’s position is exceptional, and I cannot see any hope in the near future of our competing with other countries in manufactures, unless there is a definite expansion of our marketing activities so that we can avail ourselves of our trade possibilities in the Near East. It is to be hoped that a marketing organization will be put into operation that will recognize the necessity for the development of both our primary and secondary industries in a manner that will result in the utmost national security. We are now embarking upon a definite fiscal policy, but it is necessary, at the same time, to inaugurate a definite marketing policy in order to avail ourselves of all possible opportunities for disposing of our surplus products.

Mr D CAMERON:
BRISBANE. QLD · NAT

– Last week, the Leader of the Opposition (Mr. Latham) reminded us that, in dealing with the tariff, the committee was discharging one of the most important functions of the legislature, and he stressed the fact that such a discussion furnished an opportunity to deal with the general economic position of the country, particularly as it is affected by tariff policy. The importance of this debate must be appreciated if one recollects that as a result of the fiscal policy adopted in Australia in the last ten years, the public have been called upon to carry a burden of indirect taxation amounting to between £380,000,000 and £400,000,000. It has been estimated that if every member of the committee spoke for the full time permitted under the Standing Orders, the discussion on the 375 items in the tariff schedules would extend over a period of about 50 years.

Mr Latham:

– It will not take so long as that.

Mr D CAMERON:
BRISBANE. QLD · NAT

– Heaven forbid that it should.

I believe in a policy of sane protection for those of our primary and secondary industries which need it, but I am convinced that this Government’s tariff policy has been too drastic, and has been put into operation without due consideration for the general effect of many of the increased duties and prohibitions that have been imposed. After all, our adoption of the policy of protection is nothing more than an expression of our national desire to develop our resources, to make the country self-supporting, to establish industries, and to enable a decent living to be obtained by a large and increasing population. As the result of the Government’s policy during the last eighteen months, some citizens have undoubtedly benefited immediately, but I maintain that the people as a whole are really worse off, and will be worse off for a long time to come. Whether good will eventually result to the community remains to be seen; but the evil effects of this policy are apparent at present. Much has been said during the last eighteen months, particularly by the Minister for Trade and Customs (Mr. Forde), about the additional employment created as a direct result of the Government’s fiscal policy, yet there is definite proof that because of this policy a number of employees have been dismissed or have had to he satisfied with less employment. Recently the Minister contributed two interesting articles to the Brisbane Standard; I am not aware whether they were published in any other newspaper. The articles were signed by the Minister, and I read them with keen interest. I” the first, the Minister endeavoured to show that the Government’s policy had corrected the adverse trade balance, and in the second he claimed that unemployment had been reduced by the tariff.

He referred particularly to the position of the dry battery industry, and maintained that as the result of the policy of the Government 400 extra men had been employed in it. I do not doubt that statement for a moment, but the Minister did not mention that though many new employees had been put on, a large number of the expert workmen on the import side in that particular industry had been put off. I believe that as many men were dismissed as were given employment.

Mr Forde:

– Oan the honorable member give definite proof of a number of experts being put, off?

Mr D CAMERON:
BRISBANE. QLD · NAT

– I have been assured, that in consequence of the tariff policy a great number were dismissed. We should not undervalue the importance of our secondary industries, and I have no wish to do that ; they are entitled to every possible assistance; but I say, without hesitation, that the prosperity of this country depends in the first instance upon the success of the primary industries.

The excessive customs duties imposed by the Government in the last eighteen months have, undoubtedly, added greatly to the burden of the primary producers by making it still more difficult for them to compete in the world’s markets. It may be thought that I am making a somewhat venturesome statement for one who is privileged to represent a metropolitan and industrial constituency, hut I am merely repeating what I have always asserted in this chamber. I have consistently held that a policy of protection is needed for our industries, but I have also been quite definite in expressing the view that such a policy could be too drastic and could have a far more serious effect on the other sections of the community than any benefits conferred by it would warrant. Manufacturers and those employed in secondary industries are entitled to every consideration, but before taking action to assist them by means of protection, the fullest investigation should be made to ensure that what is proposed will not detrimentally affect other and equally important sections of the community. The high duties introduced by this Government, the prohibition of certain imports and the rationing of others should, in ordinary circumstances, hold out to manufacturers expectations of greatly increased trade and prosperity.

The Prime Minister stated definitely in April of last year that these drastic proposals were of a temporary nature. If manufacturers, notwithstanding that statement, had greatly increased their factories and plants, the vested interests created would be so strong that neither this nor any other government would find it an easy matter to abrogate the special forms of protection thus introduced, notwithstanding the statement that they are of a temporary nature. This policy has been costly to the primary producers and to the consumers generally.

In considering the subject of higher duties it must be remembered that all tariff charges fall directly on the primary producer, who has no way of passing them on. Practically the- whole wealth of this country - 96 per cent, of it, measured for export purposes - is produced by the man on the land, who, therefore, should receive first consideration when we are talking of new imposts. Whether the tariff is applied to farming machinery or to any other goods that come into this country, the money that pays the tariff charges represents the wealth created by the primary producers, those who furnish 96 per cent, of what we send abroad and produce our national income. The effect upon living costs under an already high tariff, which the Government proposes, in some instances, to make higher, is worth considering. Where high duties are imposed, whether on machinery, hosiery, or other articles, the increased cost is automatically added to the price of the goods. It is true that these duties are designed to protect industry and. to afford employment; but, in many cases, the cost of the article manufactured overseas, plus a reasonable tariff, is less than the cost of the locally made article. In other words, overseas manufactures can be imported and a considerable tariff paid, and yet these goods can be sold more cheaply in Australia than the price charged. by local manufacturers. Obviously, therefore, with a high tariff such as we now have, the living costs of the consumer must be adversely affected. It is argued, and rightly so, that living costs have lately been reduced; but I maintain that it would be wrong to attribute that reduction entirely to the tariff. The Statistician’s figures show that living costs have fallen in the past twelve months, and that the fall has been brought about, not by tariff imposts, but in spite of them. It has been brought about in a great measure by the reduced prices which the primary producers have been compelled to accept for their commodities. Of course, reduced prices are not peculiar to Australia; they are world wide. As every one knows, they have meant very difficult times for the man on the land. The reduction in the prices of goods is due to the reduced purchasing power of the people, which makes it impossible for them to pay the prices which they paid in 1928 and 1929, and also to the forced liquidation of many trading concerns throughout Australia. The events of the last eighteen months show conclusively that a high tariff policy has failed to remedy the evil of unemployment. It may be that a few score, or perhaps a few hundred, manufacturers have been helped by it to the extent that they have not been called upon to share the sacrifice that others are making.

Mr FORDE:

– The honorable member will admit that the Government’s tariff policy has been a good thing for the sugar, cotton and banana industries of Queensland.

Mr D CAMERON:
BRISBANE. QLD · NAT

– Before I conclude, I shall express my views on those matters. Against the gain which a few manufacturers have derived from high tariffs, we must set the loss of revenue to the Government, the loss to the buyers of manufactured goods and, above all, the loss to the primary producers. The Government would do well, even at this stage, to revise its tariff policy in the light of facts which can be only too plainly seen. ‘

When the new prohibitive duties were imposed, it was urged that they would be the means of finding employment for large numbers of workers. They have now been in operation for nine months, and, unfortunately, they have not had that result. It is true that here and there work has been found for a few score employees; but, generally, they have not assisted to relieve unemployment. The Statistician’s figures show that during the last twelve months unemployment in Australia has increased by 81 per cent., whereas in Britain, the increase during the same period was only 43 per cent. Indeed, the figures that are available show that unemployment has increased in Australia to a greater extent than in most, if not all, European countries. Local manufacturers have not found it possible to provide the work that was expected, because they are so harassed by taxation, and their confidence is so shaken by talk of inflation, that they are afraid to extend their factories or launch out in any way.

Mr Forde:

– The honorable member must know that the chief cause is the low prices obtained for our wheat and wool.

Mr D CAMERON:
BRISBANE. QLD · NAT

– I admit that the low prices obtained for those commodities have added to our difficulties. Later, I shall refer more particularly to the effect of the tariff on the woollen industry. The falling off in shipping activities, due to the discouragement of trade, has thrown hundreds, probably thousands, of seamen and waterside workers out of work. On each overseas ship hundreds of pounds are lost in wages. And it is largely the reason why the dole system costs £3,000,000 annually in New South Wales alone. The high tariff policy followed by the present Government has also meant heavy losses of customs revenue at a time when revenue is most needed. For the eight months ended February last, the loss of customs revenue was £6,000,000; it is expected that the loss for the year will be £9,000,000 or £10,000,000. It is obviously impossible to make up that loss by direct taxation. Yet we are not told how the Treasurer (Mr. Theodore) proposes to make it up.

Honorable members on this side- do not object to a substantial measure of protection ; but they claim that the Government has overshot the mark, and that in so doing, while not helping business or relieving unemployment, it has made the solution of its financial problems more difficult. The policy pursued by the Government has reacted on itself. I have already referred to the loss of customs revenue, find to the dislocation, of trade and shipping which has thrown thousands of workers out of employment. In addi tion, it has added greatly to the burdens of the primary producers by increasing the cost of their tools of trade.

In the case of many of the items in the schedule, we do not know whether the proposed changes have been recommended by the Tariff Board. The Government is inconsistent in that at times it accepts the board’s recommendations and at other times rejects them. I maintain that such, inconsistency is unfair to Parliament arid to the country.

Mr Forde:

– The late Mr. Pratten, when Minister for Trade and Customs, did not always follow the recommendations of the Tariff Board. He did not do so, for instance, in the case of cotton.

Mr D CAMERON:
BRISBANE. QLD · NAT

– The tariff ought not to be made the football of any political party. Members on this side are prepared to accept the recommendations of an expert tribunal whose members have no political axe to grind. Unless its advice is taken, the Tariff Board merely becomes another useless expense to the country. In the absence of information as to whether the changes proposed have the sanction of the Tariff Board, we are asked to vote in the dark. I enter my protest against this clumsy and unscientific way of dealing with so important a question as the tariff. [Quorum form.ed.] Some honorable members profess to be in favour of a scientific tariff. In my opinion, the only way to get a scientific tariff is to follow the practice adopted by the late Government of having every application for higher duties fully investigated by an independent hoard of experts.

In view of our serious position to-day, it is of paramount importance that we consider the economic aspect of our protective tariffs. The members of the British Economic Mission in their report of the 7th January, 1929, stated -

We recognize that protection is the settled policy of Australia; that it would be idle to suggest its abolition, even if wc thought that such a course would be expedient.

It is true that the majority of the people of Australia believe in a policy of protection. Even the honorable member for Swan (Mr. Gregory), who is sometimes classed as a Free Trader, believes in the imposition of some duties ; certainly those imposed” for revenue purposes. The report to which I have referred continues -

Protection, us its very mime implies, is designed for the wenk, and the weakness may lie that of infancy, that of temporary ailment, or that of inefficiency. It may well be expedient to give artificial assistance from the public to a promising infant industry, though, since its output must necessarily in the early stages be small, such assistance is in our judgment bettor given by way of bounty, the cost of which can he exactly measured, than I by way of a protective customs duty which will raise, to ari extent difficult to compute, lim cost to the community of the whole of its supplies of thu commodity which the infant industry is designed but is not yet abb.” sufficiently to produce. But it is to bo observed that infant industries tiro apt to take a long time to grow up and to be ready to dispense with their swaddling clothes, und the process of reaching maturity tends to bc further delayed when the costs of the products of other industries required by the infant industry ure increased by measures similar to those which have been adopted in its own case. It behoves the State, therefore, to keep a very careful watch upon the whole range of protected industries, and to be sure that protection or bounties are not continued so long or given so freely (hat their cost outweighs the benefit to be derived by the community from the establishment of the industries in its midst . . .

The protection of the inefficient is something which, we imagine, no one would be prepared tn defend, but it is in practice not easy to avoid it. . . .

The vase for protection is strongest in regard to those industries which can claim that, having tha home market secured to them and mainly using home-produced commodities as their raw material, they can, and do, supply the community with their goods at a price equal to or not materially greater than that at which similar goods could be imported from oversea without a duty, but that tha protection is necessary because, but for it, powerful combinations of oversea producers could, by undercutting their prices, drive them out of business, and having done sn could for the future charge as much as the Australian consumer could be forced to pay. . . A further condition of protection should be that every recipient of it should be liable at any time to be called upon to furnish the Government with the fullest information as to the costs of his products, the prices at which they are sold, and the conditions of his industry generally. The recipient of protection is obtaining a benefit from the public mid should he required in return to give to the trustees for the public all the information necessary to enable them to satisfy themselves that the benefit is not being abused..

We are confident that it is urgently necessary that a full scientific inquiry and investigation should forthwith be instituted by the Commonwealth Government into the wide question of the economic effect of the tariff and the incidence of, its duties, with the particular object of furnishing reliable advice to the Government as to the removal of any extravagances and anomalies which it may bo found to contain, as to the confinement of its benefits to industries which may reasonably be regarded as efficient, and as to the reduction of its total cost to the community . . .

We consider that while the investigation is proceeding legislative or administrative action to increase duties or impose deferred duties should, so far us is consistent with the continued effective working of the existing tariff, bo avoided, in order that the investigation may proceed so far as possible untroubled by disturbing changes in its subject-matter.

Those views are interesting, and, to a great extent, I agree with them. The Government has, however, increased the duties very greatly in many respects, and in directions which I think cannot be justified.

There is an urgent need for a complete review of the tariff with the object of securing a balanced development of our primary and secondary industries. In this connexion the former Prime Minister (Mr. Bruce) in his policy speech delivered at Dandenong on October 8th, 192S, said-

It is also essential that we should expand our secondary industries. The history of the older countries of the world, and particularly of Great Britain, has shown how fatal it is to concentrate solely upon the development of either primary or secondary industries. In Australia we are determined to have a wellbalanced development with primary and secondary industries developing together. Our expanding secondary industries provide a home market- which is the best of all markets - for our primary products. In order to promote the development of both our primary and secondary industries, we have adopted a policy of protection to which the overwhelming majority of the people of Australia subscribe. In the interests of the people we will continue that policy in order in the first place to safeguard the industries which we have established, in which millions of pounds have boon invested, and upon which tens of thousands of our citizens are dependent for employment, and in order in the second place to provide for the progressive establishment of new industries.

A definite necessity exists for reciprocity of trade between the nations; but we must realize that the tariff policy of this Government invites tariff retaliation by other countries. Although I do not know of any country which has actually adopted retaliatory measures, I believe that the people of some other countries would not object if their governments took some steps in this direction.

The excessive duties, embargoes, and prohibitions which have been imposed must adversely affect our import trade with countries with which Australia now enjoys a favorable trade balance. I refer particularly to Eastern countries, and have Japan especially in mind, for she is one of the principal buyers of our wool. “We have certainly placed a restriction upon the importation of many Japanese goods into Australia, and that must inevitably create a bad impression in that country.

We cannot over emphasize our dependence on primary production. Restric tions upon reciprocal trade between Australia and other countries must make it more difficult for us to maintain our primary industries. Excessive duties undoubtedly make it impossible to sell in Australia a great deal of Britain’s manufactured goods. This must cause dissatisfaction in that country. The workers of Great Britain are being urged daily, by newspaper advertisements and otherwise, to buy Australian goods, but at the same time they are being told that Australia has made it impossible for British manufacturers to export to Australia many lines manufactured in Great Britain. There can be no doubt; therefore, that many people in the Old Country regard Our tariff policy as a big contributing factor to their unemployment and misery ; and we cannot truthfully deny that this is so, at least, to some extent. It is true that Great Britain enjoys a measure of preference from Australia.

Mr Fenton:

– And has done so for over twenty years.

Mr D CAMERON:
BRISBANE. QLD · NAT

– That is so. I

Suppose the benefit of this preference has amounted, in the course of the years, to many millions of pounds. But of what use is a preference if the duties still remain so high that British goods cannot be sold here? 1 am quite ready to admit that it would he unreasonable to blame the tariff for iti! the depression that exists in Aus.tralia just now; but undoubtedly it is partly responsible. I believe in a policy of sane protection. We should protect our essential existing industries, and establish other necessary industries; and the people must be prepared to make some sacrifice in order to achieve that end.

Such industries should be given that measure of protection which will make it possible for them to be carried on under conditions which will be fair to those engaged in them and to the country generally. There arc many things which we can and should manufacture in Australia; but I do not think it would be wise for us to attempt to protect any and every article that is manufactured in even those industries. Take the woollen industry for instance. This, surely, must be regarded as an essential Australian industry. But it would be absurd for us to attempt to manufacture every piece of woollen goods or every woollen garment that we need. I regard the leather industry as an essential industry. The agricultural industry is alao of primary importance to Australia. We should manufacture in this country breakfast foods, biscuits, and other commodities, the bulk of the raw material of which ve grow in Australia.

Reference has already been made to the iron aud steel industry. This, of course, is one of the key industries of the country, which has been given a very large measure of protection, but we must bear in mind that iron and steel are the raw material for many other industries. If we impose too high a duty upon iron and steel products we shall make it much more difficult for other industries to maintain their operations.

Certain other industries could be established in this country which would provide a great deal of employment foi” our people, and we should give consideration to ways and means of establishing these. In cases where the raw material of certain essential industries is present in Australia in large quantities we should use it for the manufacture of local requirements.

The only scientific method of affording protection to an industry is for an independent board of experts to consider each case upon its merits. The schedule now under consideration provides for tremendous increases in previously existing duties which in many instances are not justifiable. Many of these imposts will undoubtedly have a tendency to create monopolies. The honorable member for Moreton (Mr. Francis) referred to this danger. Surely it will not be denied that a monopoly which has complete control of the local market is extremely dangerous. The creation of such monopolies is one of the great risks that are taken in providing excessively high duties.

We ought always to bear in mind that one of the justifications for a tariff is that it can be used to promote Empire trade, lt is sometimes urged that Great Britain does not grant sufficient reciprocity to Australia. But if we were to place on one side all that this country owes to the Motherland, and on the other side the value of the preferences that we grant to her, we should find that we still had a long way to go to repay her for all that she has done for us.

In justification of the embargo policy of the Government, it has been said that it has rectified our adverse trade balance; but there is every reason to believe that the exchange position, and the cessation of overseas borrowing, would have had this effect. Unfortunately we are not permitted, in this debate, to discuss the full effect of the prohibition of importations.

We must consider each item in the schedule upon its merits and upon nonparty lines. In addition to considering the effect of each specific proposal to increase or decrease - in rare instances - the degree of protection to the particular industry concerned, we must also consider the effect upon the people of the Commonwealth generally. (Quorum formed.]

Mr LEWIS:
Corio

.- -In common with all the other honorable members who support this Government, I was elected, on a policy which provides very definitely for the protection of the secondary industries of Australia. One of the important planks of the platform of the Labour party is that adequate protection shall be provided to encourage and develop our secondary industries. We undertook to provide, within the limits of our constitutional power and authority, not merely protection for the manufacturers at the Customs House, but protection also for the workers in industry, in. regard to wages and conditions of employment, and for the consuming public against anything in the nature of extortionate charges for manufactured products.

I find myself in agreement with the declaration made by the honorable member for South Sydney (Mr. E. Riley) that the protectionist policy of the Government, or of the nation generally, is not to be regarded as a panacea for all our social ills, and a remedy for all the wrongs that exist. But we look upon the development of our secondary industries as absolutely essential to the economic well-being of the country, and as a means of providing work in diversified industries for the ever-growing population, of this country which cannot find employment in our rural industries. The problem of whether or not we should encourage the development of secondary industries goes back to the earliest days of settlement in Australia. The earliest newspapers published iti this country contain reports of the existence of an army of unemployed persons who could not find work on the land. It has always been necessary to build up secondary industries to provide avenues of employment for people who would otherwise have to remain idle, or vainly walk the streets of the cities looking for work. The early history of the protectionist movement in Australia shows that it received its greatest impetus in Victoria, which made more rapid progress in the matter of development and settlement than any of the other Australian colonies. The then neighbouring colony of Kew South Wales possessed a larger area, greater mineral resources, and had raw materials far in excess of those in Victoria, but the population of Victoria increased to a far greater extent than that in the neighbouring territory of New South Wales. At the inception of federation the population of Victoria and New South Wales were about the same; but after the establishment of the Commonwealth, and the introduction of a protectionist policy nation-wide in its incidence, the industries of New South Wales, for the first time, developed more rapidly than those in Victoria, and New South Wales began to boom in a manner unprecedented in its history. It is true that at that time Victoria was seriously affected by what was known as the Kyabram reform movement, the policy of which was reform, retrenchment and economy, and, therefore, resembled that of the present Opposition. As a result of the mistaken policy of the then Irvine Government of Victoria, industry in that State languished to such an extent that for the first time for a very considerable period, Victoria found that the departures exceeded the arrivals and the natural increase in population. At that time New South Wales was wise enough to avoid the mistaken policy which had been adopted in Victoria, and having done so, commenced to progress. At present NewSouth Wales is suffering very acutely as a result of the maladministration of the Bavin Nationalist Government that was defeated at the last elections, and left a heritage to the Lang Government similar to that left to this Government by the Nationalist Administration which was defeated in October, 1929. It is useless denying these facts, as the figures are available to those who wish to peruse them.

We had a most extraordinary speech the other evening from the honorable member for Forrest (Mr. Prowse). I was very much surprised to find that one having reached the age of discretion should live in a world so unreal as that in which the honorable member seems to live. He would have us believe that the sole cause of all the difficulties confronting the primary producers of this country are clue to the tariff, which, he contends places a very severe burden upon the primary producers. If the duties which the honorable member mentioned were abolished, the position of the primary producer at present would not be any better. The present position of the primary producers is due to causes entirely different from those mentioned by the honorable member who should produce evidence to show in what country the primary producers are better off than they are in Australia. The Australian primary producers are in a similar predicament to those in practically every other country irrespective of their fiscal policies. The difficulties of the primary producers are due to the prices at present ruling for their products.

Mr Bayley:

– But the duties which this Government has imposed aggravate the position.

Mr LEWIS:

– Even if that were so, there are corresponding advantages accruing to primary producers in Australia which outweigh any of the alleged disadvantages supposed to result from a protective tariff.

Mr M CAMERON:
BARKER, SOUTH AUSTRALIA · LP; NAT from 1925; UAP from 1931

– The honorable member should enumerate them.

Mr LEWIS:

– In the first place, we provide a considerable home” market for those engaged in primary production in Australia. Under the “Paterson “ butter scheme a bounty is paid on the production of butter.

Mr M CAMERON:
BARKER, SOUTH AUSTRALIA · LP; NAT from 1925; UAP from 1931

– Who pays it?

Mr LEWIS:

– The Australian consumers of butter. We pay a considerable amount annually to support the sugar industry in Queensland, and provide bounties and duties to encourage those industries engaged in the production of cotton, wine, dried fruits,, bananas, and quite, a number of other commodities. As a matter of fact, there is scarcely any item of primary produce that is not protected by a tariff. We protect local dairymen against the importation of butter from New Zealand, and those engaged in the leather industry against the importation of hides and skins from that dominion.

Mr Forde:

– We also protect the ricegrowers.

Mr LEWIS:

– The growers of rice are protected from competition from cheaplabour countries overseas. We also impose duties upon the importation of oats, maize, and hops in order to prevent these products from coming into competition with those produced under sweated labour conditions in other countries. Honorable members will find that the problems confronting’ the primary producers in Australia are also being faced by those engaged in primary production in practically every other country. In the Journals of the Parliaments of the Empire, there is a report of a discussion in the Parliament of the Irish Free State, and in that of Northern Ireland, in which complaints were voiced against the dumping of Russian oats.

Sitting suspended from 6.15 to 8 p.m.

Mr LEWIS:

– The representatives of the rural districts of both Northern and Southern Ireland complained that it was not possible for those districts to compete successfully with Russia in the production of oats. That is significant in the light of the fact that neither Northern nor Southern Ireland is “ cursed “, as the Opposition would say, with a protectionist tariff that imposes difficulties, hardships or burdens upon the primary producers, nor with an arbitration court or other wage-regulating system which compels the payment by secondary industries of unnecessarily high wages which are reflected in the prices charged to the farmers for agricultural machinery. This goes to show that the phenomenon which is being experienced in Australia to-day is not due to the operation of the tariff. The progressive decline of agriculture in Great Britain also indicates that there are other factors altogether apart from the incidence of a protective tariff which are responsible for the difficulties confronting primary production in every country in the world. In Canada there is a similar outcry against the importation of Russian wheat; and in the United States of America an agitation has been going on for the exclusion of the products of Russia from that country. Then, too, we have the significant statement of Mr. Legge - who, I believe, is about to retire from the position of Chairman of the Farm Board of the United States of America - that the American wheatgrower cannot compete successfully with wheat produced either in Soviet Russia or in Australia. America is lauded and boomed as the home of industrial and economic efficiency ; yet we have this very definite declaration by the Chairman of the Farm Board of that country that it cannot succeed in producing wheat at anything like the price at which it is produced in Australia.

The conditions affecting primary production, as I have said previously, are not peculiar to Australia. The Leader of the Opposition (Mr. Latham) in another debate in this chamber, referred to the fact that the time was fast approaching when it would be necessary to apply to the rural industries of this country the methods that have been applied so successfully to production in the secondary industries. He said that if primary production was to be carried on economically and successfully it would be necessary to apply to it large scale or mass production methods. It will be seen, therefore, that there are factors altogether apart . from the tariff which contribute to the predicament in which primary producers find themselves to-day. I make bold to assert that, had it not been for the excessive and abnormal decline in the prices of primary products, this country would not be in the economic and financial position in which it finds itself to-day. The Governments of both the Commonwealth and the States appealed to the primary producers to grow more wheat for the purpose of export. There was a note of buoyant hope in that appeal, and the primary producers responded magnificently to it. So far as I am aware, no member of this chamber and no public mau foresaw the disastrous decline in prices which subsequently occurred. Had those prices remained at the level at which they stood when the appeal was made Ave would have surmounted by now the difficulties with which we are confronted, and instead of being still in the throes of adversity we would bc enjoying at least normal prosperity.

An army of unemployed is an inherent and inevitable condition arising out of the existing order of society. It was left to a journal called The New Leader, which is issued by the left wing of the independent Labour party in Great Britain, to publish a very remarkable article dealing with the appeal that was being made to the wheat-growers of Australia to grow more wheat. That article, which appeared some months ago, had the rather striking caption “ Grow more wheat, and starve”. Every -prediction made in it was justified by subsequent events. It pointed out that there was an immense surplus of wheat in the world. The only satisfaction which their extra labour has given to the farmers is that, the export of a larger quantity of wheat than is normally sent overseas has resulted in an additional contribution having been made by them towards the discharge of our interest commitments. Had it not been for the increase in our wheat production, and the export of a larger quantity than had been exported at any previous period in the history of this country, the probability is that we should not have had the favorable trade balance that has been commented on during the course of this debate. Neither the honorable member for Wimmera (Mr.

Stewart) nor any other representative of the primary producer was able to forecast, when that appeal was made, the abnormal decline in prices that took place in the markets of the world. That decline is responsible to a greater extent than any other factor for the present conditions of the primary producers. The honorable member for Forrest (Mr. Prowse) would have us believe that if we were to wipe out the duties, then the whole of the difficulties with which the farmers are confronted would immediately be solved. 1 join issue with him upon his conclusions. I am of the opinion that, far from solving those difficulties, the primary producers would find themselves in a very short period in exactly the same predicament with which they are faced to-day, particularly if we were to throw open the ports of this country for the introduction of primary products from other parts of the world. Therefore the honorable member for Wimmera cannot have that which he hopes for and preaches, namely, free conditions for the farmers. What would be the immediate effect of the removal of the duties that are said to be hampering the primary producer at the present time?

Mr Paterson:

– An increase in the exchange rate.

Mr.- LEWIS.- Immediately farming became a little more profitable than it is to-day there would be an increase in land values throughout the farming areas of this country. The honorable member for Gippsland cannot escape from that fact. High land values are the chief cause of the difficulties with which the farmers are confronted. During the war period, when abnormal prices ruled for all classes of primary products, there was an artificial increase in land values, and those who desired to participate in the prosperity associated with rural production, were compelled to purchase land at inflated figures. That inflated capital value, in conjunction with the high interest rates charged by those who made advances to the purchasers of land, is responsible for the predicament in which the farmers find themselves to-day.

Mr Gibbons:

– It is only incidental.

Mr LEWIS:

– It would be incidental if we were to wipe out ‘the ‘duties which it is said are hampering primary industries to-day. Immediately an industry becomes profitable or prosperous there is a rush to take advantage of the ruling conditions; and land responds more readily than anything else to those circumstances, by a rise in the price levels.

Mr Stewart:

– The Stock Exchange does the same thing in relation to shares, and the Arbitration Court in regard to the wages of the workers.

Mr LEWIS:

– Increased production, as a result of increased competition, will inevitably bring about a readjustment of price levels in those directions; but the available area of cultivable land is limited and cannot be extended.

Mr Gibbons:

– The productivity of the land can be increased.

Mr LEWIS:

– That is true, by the application of improved cultural methods and scientific knowledge; hut that improvement also has the effect of increasing land values. It is this factor which, more than any other, is responsible for the predicament in which primary producers find themselves.

Mr Stewart:

– It is a very big factor, I admit.

Mr LEWIS:

– It is the principal factor. If you could reduce the artificially inflated values of land, if you could wipe out the inflation that occurred during the war years, and reduce the capital value to what it was in 1914, there would not he the outcry that is being made to-day by the farming section of the community.

Mr Stewart:

– The weak point in the honorable member’s argument is that Crown land, which has not the inflated value to which he refers, is unprofitable to-day.

Mr LEWIS:

– For the most part Crown land is either less fertile or more inaccessible than .alienated land. Difficulties of transport are another phase of the question. Mon have been forced on to the margin of cultivation - on to the unsettled areas in the outback, and freight charges on the railways are a big factor in piling up their costs.

That brings me hack to the interjection of the honorable member for Barker earlier in my speech, in which he asked what advantages the primary producers derive as a result of a policy df “protection. One of the things which enables the farmer to have his produce carried on the railways, at -a comparatively ‘low rate, is that secondary industries are established in the large centres of population, and the changes levied for .the .carriage of manufactured articles are so fixed as to make good the loss incurred’ on the carriage of products 6i the land.

Wo have established throughout Australia agricultural schools and colleges for the training of young men about ‘to embark upon rural production. We have agricultural societies subsidized by the Government–

Mr Stewart:

– And technical schools.

Mr LEWIS:

– That is so; technical schools have also been established in the city areas to assist those about to engage in secondary industries. Experimental farms have been brought into existence, and farmers have had expert advice placed at their disposal. Cattle and swine compensation acts have been introduced^ and everything possible has been done to help the farmers to overcome their difficulties, particularly those natural ones which confront them from time to time. Costly irrigation systems have been provided that would not have been possible had it not been for the existence of our secondary industries. Yet there are those who have the audacity to ask what use are secondary industries to the primary industries of the country ?

Mr Stewart:

– What does the honorable member mean by his reference to “ we “ having established all these things ?

Mr LEWIS:

– I refer, for the most part, to those living in the metropolitan districts. By far the greater portion of the revenues raised by Federal and State taxation is levied upon those engaged in our secondary industries ; upon those living within the confines of our metropolitan and provincial areas. Take the imposition of motor registration fees. For the most part, that money is raised from the owners and users of motor cars in the metropolitan areas. With it different governments have provided a system of roads that is hardly to be equalled, and certainly not excelled, in any other country in the world. People engaged in primary industries have been relieved of much of the burden of taxation; for instance, farm vehicles’ have been exempted from motor’ taxation’, and everything else that is possible h’a’s been done by those who represent the Working classes lib’ give attention and relief to the heeds of the primary producers. While we recognize that primary production is essential, we believe that it is also necessary to encourage its hand-maid - secondary production.

Mr Stewart:

– Will the honorable member explain why primary producers are down and out, in spite of all those advantages ?

Mr LEWIS:

– I have d’one so. It is largely because of the inflation of land values; the result of the extraordinarily high levels which prevailed during the war period.

Mr Gibbons:

– Does that apply only to lands producing primary products?

Mr LEWIS:

– I am now answering the argument advanced by honorable members opposite, that the difficulties of our primary producers are directly attributable to the imposition of tariff duties by this Government. I deny that that is so, and contend that if those duties were eliminated our farmers would still be confronted with the existing problems; which are not peculiar to Australia. During this debate, Denmark has been quoted as a country that has not been smitten with the curse of unemployment. I point out that the latest returns disclose that that essentially primary producing country is at present subject to unemployment, as are all other industrial countries. That is not because of the imposition of tariff duties, or the lack of primary products. Examine the case of India, China, and Japan. Can honorable members opposite point to any other country on God’s earth that has a more industrious race than has China? Yet the people of that country are dying by hundreds of thousands, in the midst of plenty. And that is not because of high tariffs.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– ;-Does the honorable member know anything about China?

Mr LEWIS:

– I know as much as does the honorable member.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I lived there for six months.

Mr Curtin:

– If a low tariff does’ not remove the problem,- apparently a high tariff does not remedy if.

Mr LEWIS:

-That may’ toe true. I h’ave yet to’ learn th’a’-fi it makes the position any worse than it was. It nas at least provided Australia with a very considerable home market, through the establishment of secondary industries which could not survive but for the encouragement given them by the Government’s protectionist policy. Honorable members may turn to old newspaper files dealing with our early settlement some 50 to 75 years ago, and they will find therein reports of the prevalence of unemployment. The people of that period were not troubled with any protectionist policy. The big trouble is essentially that lands have been locked up; that the public estate has been made private property

Mr Bernard Corser:

– That does not apply to Australia generally.

Mr LEWIS:

– It does. Can the honorable member point to any public lands that are available to-day in Victoria?

Mr Bernard Corser:

– Only 7 per cent, of the public lands of Queensland have been alienated.

Mr LEWIS:

– In Queensland the unemployment problem is less grievous than in any other State.

Mr Bernard Corser:

– Because it has not a Labour Government.

Mr LEWIS:

– That happy position is the direct result of Labour’s policy. When the Moore Government came into power Queensland had a smaller percentage of unemployment than had .any other S’ate in Australia, and latest returns disclose that that percentage is now only about half as high as that of its neighbours. In addition, Queensland is still the cheapest State in Australia in which to live. The Moore Government inherited a substantial surplus from its predecessors in office - a Labour Government. That cannot be said of any Labour Government which succeeded a Nationalist Government. When the present Commonwealth Government assumed office, it found a deficit of nearly £5,000,000 in the federal revenues, and similar remarks apply to South Australia and Victoria. It was left to the Labour Government to make the first serious effort to remedy the position. Unfortunately, owing to the deflation of price levels, over which the Labour Government has no control, the national income has dropped so materially that, despite the drastic nature of the remedies employed, it has been impossible to arrest the downward progress.

Mr Archdale Parkhill:

– This Government now has a deficit of some £20,000,000.

Mr LEWIS:

– That is quite true, but had the honorable member and his friends remained in office, notwithstanding the reductions that they would have made in old-age, invalid, and soldier pensions, and probably in the maternity allowance, they would now have a deficit of £40,000,000, and not £20,000,000. Instead of arresting Australia’s adverse trade balance, the honorable member’s government would have permitted it to grow by leaps and bounds. After this Government had assumed office we found that during the first eight months of the financial year, 1929-30, Australia’s adverse trade balance had reached the enormous total of £31,000,000. Courageously grappling with the position the Government introduced prohibitions, imposed embargoes and surcharges, and rationed importations from overseas. That course of action would have done much to restore our position had it not been for the disastrous fall in world price levels, which none could foresee. In confirmation of that I refer the committee to the speeches made by honorable members opposite on the budget. All that they could suggest was that the Government should reducePublic Service salaries by £1,000,000, cut £2,000,000 off the federal aid. roads grant, and by other small economies effect a total saving of about £4,000,000. That, they declared, would balance the budget. Had matters economic remained normal the steps taken by this Government would have been sufficient to balance the budget for the year 1930-31. The Government is not responsible for existing economic conditions; they are world-wide. It is simply the victim of circumstances.

The honorable member for Riverina (Mr. Killen) complained about the loss of customs revenue. Admittedly very considerable losses of customs revenue have resulted from the policy introduced by this Government. In their addressesin this chamber at the time the embargoes were imposed, both the Prime Minister (Mr. Scullin) and the Treasurer (Mr. Theodore made pointed reference to- the fact that there would be a considerable reduction in customs revenue as a result of the application of the Government’s policy to correct the adverse trade balance. They intimated that it might be necessary to. seek new sources of revenue to make good those losses. Let me refer to some interesting statistics with regard to the importation of goods. In 1926-27 the Bruce-Page Government collected £43,000,000 from customs duties, at, a time when Australia’s imports amounted to about £167,000,000 per annum. To-day our imports total only about £70,000,000 to £75,000,000 per annum. What a remarkable difference. Naturally that would result in a fall in customs revenue. Unfortunately, honorable members opposite will not tell the general public that the extraordinary volume of imports in 1926-27 was due to the Bruce-Page administration’s overseas borrowing policy, which made it necessary for the Government to accept goods to the value of all loan moneys raised overseas which were not devoted to the payment of interest. With such huge quantities of imported goods coming into the country, it was but natural that the Customs House revenues should soar. That policy is responsible for our present, economic and financial position and those are the circumstances which are responsible for the position in which the primary producers find themselves.

The CHAIRMAN (Mr. McGrath).The honorable member’s time has expired.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

.- Parliament has before it the task of examining the cumulative effect of eight separate amendments of the customs tariff effected since this Government took office eighteen months ago. A new tariff schedule has been brought down, on an average, every two months. It is obvious that there can be no stability in business when the tariff is subject to such constant, and often violent, alterations. Traders cannot, draw upa schedule of prices, or correctly assess their costs. The people of Australia insist upon having some goods other than those produced in Australia, so that goods will be imported in spite of the restrictions which have been imposed. These frequent variations of the tariff have introduced an element of undesirable uncertainty into business affairs. For instance, a man who is lucky enough to get a quantity of imported goods out of bond just before an increase of the tariff, obtains an undue advantage over his competitors.

Another undesirable feature associated with this frequent amendment of the tariff, particularly as practised by this Government, is the long time which the new duties remain in force before Parliament is given an opportunity of expressing its opinion upon them. This is the first regular discussion of the tariff since the present, Government has been in power. The first amending schedule was introduced by the honorable member for Maribyrnong (Mr. Fen ton) a few days after the new Parliament met, and the duties imposed in that schedule have been in operation ever since. Customs and excise duties are really only a form of indirect taxation, and for eighteen months Parliament has acquiesced in taxation of the people by executive action. When the people send their representatives to Parliament, they expect them to control the taxation levied upon the community. Members of Parliament, apart from those in the Cabinet, have had no say whatever during the last eighteeen months in the imposition of customs and excise taxation. The Cabinet has been making a travesty of democratic government. The practice has been for the Minister to lay an amending schedule on the table of the House, and from 9 o’clock the following morning, the duties imposed therein become operative. During the last eighteen months millions of pounds have been collected from the public without Parliament having had any say in the matter whatever. I protest most strongly against such a practice. I have made my protest in the strongest terms outside the House, and I desire to do the same here.

Mr Keane:

– Well, don’t do it again.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– If the honorable member for Bendigo (Mr. Keane) is con - tent to put himself in the hands of the Ministry, so as to become, in effect, only a marionette, I do not intend to do so. Even honorable members who support the Government cannot, in their hearts, endorse the principle of taxation without the concurrence of Parliament. The recognized principle is that Parliament, and not the Ministry, should impose taxation.

Mr Lewis:

– Has the honorable member only just discovered that?

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– No, but this is the first opportunity I have had, during the last eighteen months, of expressing the resentment I feel at the Government’s action.

Mr Lewis:

– Why did not the honorable member protest when the BrucePage Government did the same thing?

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– This Government has put up a record in the matter, but, in any case, I arn referring now to the principle involved, rather than to the action of any particular government.

Mr Curtin:

– - This Government has collected less by way of indirect taxation than did any of its predecessors.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– The amount does not matter; the fact remains that the Government has collected millions of pounds without the sanction of Parliament. The Customs Act ought to be amended so as to make it necessary for any amendment of the tariff to come before Parliament for ratification within 60, or at most 90, days after the amending schedule is tabled.

In the past there have been two kinds of customs duties - revenue and protective. Most excise duties come under the heading of revenue duties, as do those imposed upon goods classed as luxuries. The Government has recently added two other forms of duty, one for the avowed purpose of correcting our adverse trade balance, and the other, which has been called a primage duty, has been superimposed upon all the duties previously in existence. It is an axiom that if revenue duties are raised beyond a certain point they will defeat their own object. In many cases the present Government has gone far beyond that point. It has done so in regard to whisky, the revenue from which has, in one year, fallen from £1.750,000 to £750,000. It is no doubt very difficult for a government to determine, in advance, the point of maximum return from a revenue duty, but when it is found in practice that the volume of revenue is declining rather than growing, it is time to amend the duty. If, by exceeding the proper point, revenue is lost, that revenue must bc made up by direct taxation. Go vernments generally prefer to raise money by the taxation of luxuries rather than by means of direct taxation, because, by the former means, only those persons who choose to buy the luxuries pay the tax. In the case of direct taxation the people have no choice. Take the case of scent, for- instance. A revenue duty imposed on this article is calculated to return so much revenue, but if the duty is raised beyond a certain point most people will cease buying scent. However, those who desire to pay for that article and thus contribute to the revenue of the country, do so willingly. If direct taxation is substituted for that indirect taxation there is not, on the part of the community, the same willingness to pay. Direct taxation was to the old Labour party, before it was disrupted, a cardinal principle, but, apparently, that principle has recently been thrown overboard. The Federal Labour Party now believes in a scheme of indirect taxation which permits of little discrimination. Take for example a commodity such as tea. A man on a salary of £10,000 a year pays for his tea the same as a man on £250 n year. The duty on tea i3 a flat rate of so much per lb. It is not an ad valorem duty. Therefore, all persons in the community, irrespective of their station in life, contribute to the revenue according to the quantity of tea they consume, because the duty is based on the quantity and not on the quality of the article. There should be some discrimination shown in respect of the incidence of the tariff on the different sections of the community. The fourth class or type of duties is the primage duty. I have already referred to revenue duties, protective duties and prohibitive duties for the restoration of the trade balance. The rectification of our trade balance has beenbrought about not so much by the prohibitive duties and embargoes that have been levied as by the high rate of exchange and the decline in the purchase of imports due to the decreased spending power of the community. The effect of prohibitive duties in rectifying the trade balance has been infinitesimal. This Government has shown no discrimination in the imposition of the primage duty. Take one instance. We import corn sacks, fill them with wheat and export them; yet ordinary duty and primage duty is paid on those cornsacks, no rebate being allowed. The honorable member for Corio (Mr. Lewis), dealt in his usual ignorant wa.y, with the difficulties of the primary producers. I point out to him that had the Government exercised a little discrimination in respect of the primage duty on cornsacks the farming community would have greatly benefited. This Government was the first to introduce primage duties into this country, and a most unholy mess it has made of things. It has, in addition, shown a lack of discrimination in respect of the imposition of protective duties. The reports of the Tariff Board’ show that little or no discrimination is exercised even by that body. Any persons who desire to start industries in Australia usually make application to the Minister for the imposition of protective duties on the article that they intend to manufacture. The majority of these applications are granted despite the fact that the price of the article., that is being protected, will be increased to the consumer. “We have had some wonderful examples of that. Some time ago the honorable member for Swan (Mr. Gregory) referred to an industry which had been established for the manufacture of shovels in Australia, and he showed that only 35 men were engaged in it. Shovels are used throughout Australia not only by the primary producers, but also by the people generally. Yet the cost of that article was increased by the imposition of a duty merely to keep these 35 men in employment. Economically, it would have been far better to retire those men and to pay them a pension of four times the amount of their wage. Unfortunately, there are too many of these little industries in Australia. Recently, the Government paid a subsidy to a firm manufacturing galvanized iron in Australia to enable it to keep 900 men in employment, but it would have been far preferable, in the interests of the community generally, to continue to pay those men their wages, and to close down the works. Protection given to an industry like that is mad protection.

It is not uncommon for duties of 300 per cent, and 400 per cent, to be imposed on certain articles. Mr. Justice Higgins at one time said that if an industry could not pay the artificial wages prescribed by him it should go out of existence. We should apply that principle to many of our industries for the protection of which applications for increased duties have been made first to the Tariff Board, secondly to the Minister, and thirdly to members of Parliament. To enable those industries to exist, protective duties of from 300 per cent, to 1,000 per cent, have been necessary. Any industry that cannot live when given a maximum of 50 per cent, protection, added to its natural protection, is of no use to Australia. The principle laid down by Mr. Justice Higgins might well be applied by this Government to the tariff. At present, the tariff provides for a flat rate or an ad valorem duty, whichever returns the higher rate. Let me give one example of the operation of the flat rate. Last Christmas a person in Canada sent a present to some kiddies in Australia. The cost of the present was a dollar in Canada. The retail price of a similar article in Australia was 7s. 6d. Yet the duty charged on that present was 17s. lid. That is carrying customs taxation to an absurd length.

Protection up to 50 per cent, might reasonably be given in respect of key industries. We have, unfortunately, been caught in a vicious circle, consisting of the Tariff Board, the Customs Department and the Arbitration Court. The manufacturers ask for, and obtain, increased duties on goods which they are able to manufacture, and immediately their employees approach the Arbitration Court for increased wages.

Mr Lewis:

– Are not applications made for lower wages?

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– The honorable member is a union secretary, and I ask him whether he has ever asked the court to grant a reduction in wages?

Mr Lewis:

– No, but the employers have asked for, and obtained, reductions in wages.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– I ask the honorable member to use his common sense, and not to talk drivel. This is the usual procedure. An application is made to the Tariff Board for an increase of duty. The board prepares a report which invariably contains a comparison of the costs in Great Britain or in some other country with those in Australia, and it recommends that the application be granted. The Minister then introduces a tariff schedule embodying the increased duty, honorable members are given no opportunity to discuss it, and the duty is immediately imposed. Not long afterwards an application is made to the Arbitration Court for increased wages. So the vicious circle goes on, and until we get out of it this country will not progress.

Mr Lewis:

– Since this Government has been in office, all applications to the Arbitration Court have been for reductions in wages.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– It has been said that the United’ States of America is the most protected country in the world. It might interest honorable members to know that five well-known gentlemen in Australia have published a book upon the effect of the Australian tariff, in which it is shown that 64 per cent, of the articles, imported into the United States of America are free of duty, whereas only 36 per cent, of the articles imported into Australia are on the free list.

Dr Earle Page:

– No articles are imported into Australia free of duty now that we have a primage duty.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– That is so; but in 1926-27, when this committee was examining the position, there were only 36 items on our free list. The committee also pointed out that the addition to Australian prices due to a protective tariff was £36,000.000. It is probably £40,000,000 to-day, because of the increases of duties since 1926-27. How does that added cost affect the people of Australia? The people living in the cities have not, at any rate until recently, been affected by it, because the added cost of commodities passed on to them by storekeepers and others has been made up to them by automatic increases in arbitration awards based on cost of living figures. When high prices were ruling for our exports the primary producer was not very much hurt by the insidious rise in his costs of production. He felt it only when a sudden drop in the overseas value of his products brought him into a position of extreme difficulty. He cannot pass on his added costs. He is possibly the only individual in the community who cannot do so. The same cannot be said of the people who live in our big cities.

The last 30 years have witnessed a wonderful growth of population in Sydney and Melbourne, the population of Sydney having increased by 154 per cent., and that of Melbourne by 106 per cent. But the people who live in these cities do not to any material extent add to the actual wealth of Australia. Under the protection of a tariff wall they are able to pass on their costs of production, and’ whatever they produce has an artificially inflated home market. They pass their costs of production on to the unsheltered primary industries, which have to compete in the world’s markets. I ask honorable members to say honestly which is of greater benefit to Australia - the primary industries, which produce 97 per cent, of Australia’s wealth, its real money, or the secondary industries, partly rural and partly urban, which produce only 3 per cent, of Australia’s exportable commodities. The answer is plain enough. From an economic point of view, the two great cities of Sydney and Melbourne are worth nothing at all to Australia, and from a national point of view it would be better for Sydney to be razed to the ground than for Australia to lose its wool industry or its wheat industry. If grass grew in the streets of Melbourne and Sydney, Australia would be no worse off economically. In these two great cities, a fungus growth on the body politic, are to be found exotic industries which have grown up under the shelter of a tariff wall, and are able to- pass on all additional costs of production. The added cost of production is no handicap to the manufacturer or his artisan. The former can pass it on to his consumers; the latter is provided for by automatic rises of wages granted by the Arbitration Court. But what of the States of Australia which are dependent upon primary production? Western Australia, South Australia, and Tasmania, which are all primary-producing States, have been obliged to ask for and have received financial assistance from the Commonwealth. The Joint Committee of Public Accounts, reporting upon the disabilities of Tasmania, made this very significant remark -

Tlie high protective tariff was an almost unmixed burden to Tasmania with very little compensating benefit. It increased costs in tlie export industries by something like 10 per cent, but caused very little protected industry to be established in Tasmania.

I was one who signed that report, and I remember the evidence that the committee was tendered. Since that investigation was made the Joint Committee of Public Accounts has been investigating the disabilities of South Australia. The South Australian Government had its “ Case for South Australia, 1930 “ drawn up by an advisory committee on finance, and that committee made some very pertinent remarks upon the tariff. Here arc some of them - i

While the apparent prosperity of South Australia was partly duc to the heavy expenditure of borrowed money, it was also due to the high prices received for her principal crops, for South Australia’s prosperity depends largely upon the condition Of her export industries and upon prices in overseas markets . .

Tlie burden of the tariff tends to fall ultimately upon export industries, upon whose prosperity South Australia depends for the collection of her revenue. Had the high prices of her principal exports been maintained. South Australia would now lie in a position to face better the continually increasing burden placed upon them by federal policy. The recent fall in the price of wool and wheat, however, combined with a succession of inferior seasons and a reduction, and now the cessation, of the expenditure o:f borrowed money, has greatly reduced the prosperity of her industries and their ability to bear the burden placed on them by the Commonwealth, and has made it difficult for the State to find increased revenue. Recent increases in the tariff and the imposition of the sales tax must inevitably retard the process of recovery in South Australia …

According to Mr. .’Justice Powers, if the Arbitration Court fixed wages which an industry could not afford to pay, this industry would have recourse to the Tariff Board, which has been created by the Federal Parliament to make necessary recommendations for the granting of whatever protection was necessary. This system has been made possible by the infliction of penalties on unsheltered export industries, a great proportion of which obviously lias no refuge such as the Tariff Board from which to seek protection since the products have to bc exported and sold at world parity. Thus the high protectionist policy of Australia has benefited and fostered protected industries at the expense of export industries. Owing to recent price movements, the export industries arc to-day in a very parlous condition, and are unable to meet the increased costs due to protection. Naturally, those States largely dependent upon such industries are placed in a difficult position.

The five gentlemen, whose report upon the effect of the tariff I have mentioned earlier, found as follows: -

We have found that these excess costs are borne in the last resort partly by luxury expenditure and fixed incomes and protected production itself, but most of all by the export industries.

What is Australia to do? It is already hard up because of a sudden drop in the prices obtainable overseas for its exportable products and this tariff will make it even more difficult for the unsheltered primary industries to compete on the world’s markets. We shall find, as indeed we are finding now, that our primary industries must cease when it is no longer possible to produce at- a cost below the price obtainable on the world’s markets. A tariff is necessary. on readily consumable articles, but duties of over 100 per cent., and in some cases they are as much as 1000 per cent., are absurd. They are a sad comment on the efficiency of Australian manufacturers and workmen. It should not be necessary to add to the natural protection of freightage and cost of sea carriage, enormous customs duties, such as are proposed in the schedule now under consideration. Australia will not prosper under those conditions.

I have one last quotation to make. Professor Perkins, Director of Agriculture in South Australia, gives the following example of added costs : -

In 1013 I had occasion to put on record current values for farm machinery, essential material, tools, &c. ; these values arc shown below in contrast with corresponding 1980 figures -

Hence, on the items indicated above alone, purchase costs since 1913 have increased by 53.8 per cent., and allowing 16 per cent, for interest and depreciation, these increases would represent on an average farm au additional yearly charge of £54 13s. 9d., or an additional cost of 4d. to 5d. a bushel on a 3,000 bushel harvest.

The TEMPORARY CHAIRMAN (Mr Francis:
MORETON, QUEENSLAND

– The honorable member’s time has expired. [Quorum formed.]

Mr KEANE:
Bendigo

.- I have been much amused at the attitude of members of the Opposition during this longawaited debate on the tariff. Nearly every member of the Opposition during the last eighteen months has pleaded for an opportunity to discuss the tariff schedules introduced by this Government. The opportunity is now presented, and the interest of those honorable members in the discussion has so far been conspicuously lacking. The fact is obvious that the Labour party is the only one with a strong protective policy. It is the only solid fiscal party in this House.

Mr Latham:

– Which party?

Mr KEANE:

– The Labour partyone party, one leader, one tariff! The Government was returned to office pledged to a certain policy, of which the protection of Australian industries was part. I intend to support generally the schedules that are before the committee, but there are some items which should be re-considered. I join with other honorable members representing rural constituencies in asking for a revision of some items that affect particularly the man on the land. There are errors and anomalies which should be, and, I believe, will be rectified. .Despite minor defects in the schedule, the gratifying fact remains that it has been the means of rectifying the trade balance. During the last eight months of the Bruce-Page administration, imports exceeded exports by £31,000,000. During the eight months of 1930-31, thanks to the policy adopted by the present Government, exports exceeded imports by £11,000,000. The success and wisdom of that policy are attested by Sir Robert Gibson, who stated in the last annual report of the Commonwealth Bank -

Owing to the adverse trade balance which has latterly operated as against Australia, it became necessary to adopt the most drastic measures to control the situation. This position has brought about legislation which had for its purpose the limitation of imports, in addition to which drastic control of the issue of oversea credits by the banks generally had to be .carried into effective operation. Unfortunately, these necessary measures have had the effect of creating adverse criticism overseas on the part of those who have failed to realize the absolute necessity for the measures adopted. In spite of some hostility engendered therefrom, it must be obvious that the only course open to Australia was to refrain from importations which the country was unable to pay for.

This banking expert to whom the last and the present Government have referred for guidance, supported the increased duties and prohibition of imports as justifiable measures to rectify the trade balance. We were hopeful that that policy would also producemore employment than can be proved at the present time. It is impossible for the Minister for Trade and Customs to say how many industries have been started ns a result of the new schedules.

Mr Latham:

– But he says it all the same.

Mr Paterson:

– He makes a valiant effort to do so.

Mr KEANE:

– The Minister stated that a certain amount of additional employment would be given in various industries, but the slackness of trade has operated against the full realization of his optimistic predictions. It is true’, however, that the four or five manufacturing industries in the Bendigo electorate are working full time and some of them overtime. The sewing machine industry, despite the fact that it was refused the bounty to which I think it was entitled, is now a going concern, and producing machines which are sold cheaper than the imported article. Its success is a triumph for the Labour representative of that district. The tariff has been used by the Government as a means of restoring equilibrium in overseas trade and stimulating secondary production. The value of imports has been reduced to £70,000,000 a year as against £150,000,000, during the regime of the Bruce-Page Government. The. manufacturing industries generally are improving, but to what extent is difficult to say. The honorable member for Indi (Mr. Jones) dealt ably this afternoon with the tobacco and timber industries and justified the imposition of special duties to help them. I believe that the tobacco industry will employ thousands of men at highly remunerative wages in producing an article for which there is an assured market, thanks to the duties imposed by this Government. The Australian likes to smoke anything that comes from overseas; in my opinion he should not be allowed to smoke imported tobacco and if he does he should be sick.

Mr Paterson:

– Does the honorable member always smoke Australian tobacco ?

Mr KEANE:

– When I can get it; if 1. smoke anything but Australian leaf, I feel queer.

Some of the items in the schedule should be reconsidered. For instance the primary duty on cornsacks is not justified and when the item is reached, I shall oppose it.

Mr Gullett:

– Will the honorable member vote against it?

Mr KEANE:

– When I say I shall oppose an item, I mean what I say. In regard to agricultural machinery, the representatives of the rural industries should have regard to the fact that this machinery can be bought in Australia. In return for the higher protection given by the Government, the manufacturers offered to reduce their prices for certain implements by 5 per cent. That reduction has been made but it has been nullified through the manufacturers altering their terms of business. Special protection is given to an industry because owing to certain conditions it cannot otherwise compete against imports. One of the principal reasons for giving tariff assistance is that Australian wages are higher than are paid by the overseas manufacturers. On that ground a duty of say 20 per cent, is imposed. But since that special protection was given, wages in some industries have been reduced 20 per cent.; the manufacturers are still enjoying the high duty but the consumer is not getting any advantage from the reduction of wages. Some of the duties should, I believe, be lowered. If I were Minister for Trade and Customs, I would have prepared a list of all manufacturing firms that have cut wages. I would compare the wages at the time the high duties were imposed with those prevailing today; I would, consult the consumer to ascertain if prices had been reduced, in proportion to the decrease in wages, and if X found that they had not I would declare that the unfair handicap on the consumers should not continue. Protective duties are imposed because of certain circumstances which militate against production in competition with overseas manufacturers; when those circumstances disappear or are qualified in favour of the manufacturer, the duties should be reduced proportionately or the consumer should get tlie advantage of a cheaper article. That is a reasonable attitude to adopt. Unfortunately, there are firms which have incessantly clamoured for high protective duties and yet have endeavoured to extract the last half-penny from the consumer.

The primary producer says that his production costs must be reduced. I cannot find any avenue for reduction, unless some of the articles he uses can be cheapened by reducing the duties on them. Wages are not an important factor in the cost of production, because I have yet to learn of any rural industry that has been covered by an award during the last four years.

Mr Latham:

– Shearing, mining, sugar, fruit-picking, dried and preserved fruits, and cotton.

Mr KEANE:

– I concede the mining industry, but not the sugar industry, for obvious reasons. The fruit industry, except in respect of canning, is not governed by awards, and so great has been the surplus of labour that orchardists have been able to engage pickers at almost any wage that they chose to offer.

Mr Lewis:

– What proportion do wages bear to the total cost of induction ?

Mi-. KEANE. - The wheat-grower does most of his own work ; if he employs labour, the rates of pay are the subject of mutual agreement. I admit that high railway freights may affect his production costs; but I submit that his ordinary wage costs are not so high as some honorable members opposite would have us believe. There are other factors. One is the high interest charge on capital invested in industry, the effect of which is to increase the cost of articles used in almost every walk of life. I appreciate all this, but the point I wish to make is that, in any review of the tariff special attention should be directed to those industries which are affected by Arbitration Court awards. If the court orders a reduction in wages, the consumer should reap the benefit or the duty should be altered.

This brings me to the consideration of another aspect of this Government’s policy - its list of prohibited imports. I have no hesitation in saying that the circumstances amply justified its action. Here are some items from the list of prohibited imports. In 1929-30, the last year of the Bruce-Page Government regime, we imported biscuits to the value of .£40,000, and cheese valued at £45,000, notwithstanding that in Australia factories in practically all States can supply more than the demand. With confectionery works in every capital city and in a large number of provincial centres, our imports of confectionery totalled £137,000. We imported also £6,000 worth of eggs from, of all places - China! In my own electorate enough eggs are produced annually ro supply the whole of the demands of the Commonwealth. In the same year wo imported £7,000 worth of lemons, notwithstanding that lemons are produced in large quantities in every State, and thousands of cases are unsaleable every year. With oranges being grown in every State, except Tasmania, our imports totalled £6,000. Our imports in dried fruits amounted to £45,000, with Mildura packing sheds loaded to the ceiling with dried fruits which in normal times are unsaleable. We even imported £9S,000 worth of vegetables; and although we have factories and fruit preserving works in every State, £13,000 worth of jams and jellies. Our lard imports were valued at £11,000, and our meat imports, £78,000. This, notwithstanding that Australia is not one of the greatest meat producing countries in the world. Our imports of onions in the same year totalled £22,000. All the onions that Australia requires can be produced in the Ballan and Bungaree districts in Victoria. Of pickles, sauces and chutneys we imported £S0,000 worth in .1929-30, and soap to the value of £116,000. I admit that some lines of soap may have been necessary, but no one can deny that all kinds can be manufactured in this country. Our imports of skins and furs totalled £88,000. This was due, I presume, to the unreasonable prejudice against any- thing Australian. I assume that the ladies said “Australian fox, no good; Siberian fox, just the thing we want “. But this Government took a hand and said “No more foreign foxes. A good Aussie ‘ fox will do you “. Accordingly, imports of skins and furs were prohibited. One of the most amazing items in the prohibited list is bolts and nuts, of which, our imports in 1929-30 totalled £238,000. We can supply all our requirements in a thousand workshops throughout Australia with machines operated by Australian lads. Our cement imports totalled £56,000. The State which I assist to represent in this chamber can produce cement in sufficient quantities to supply the whole of our requirements. We also imported £11,000 worth of glue, wines to the value of £41,000, and, of all things, locomotives valued at £104,000. We have government railway workshops in every State, and. private workshops in three States all capable of catering for our requirements.

Mr Gullett:

– Why were those locomotives imported ?

Mr KEANE:

– Because of the preference on the part of governments, Federal and State, for overseas products.

Mr Gullett:

– Not at all. It was because overseas firms could pay heavy freight charges, and still undersell the local manufacturers.

Mr KEANE:

– I do not admit that. Mr. Webb, the South Australian Railways Commissioner, imported from England and America railway rolling-stock to the value of £1,500,000, and when an inquiry was held it was disclosed that the whole of it could have been manufactured at the Islington workshops in that State. Nearly all honorable members will, I believe, agree that this Government was amply justified in prohibiting the further importation of the commodities which I have mentioned. And yet supporters of the previous Government have the temerity now to criticize this administration for adopting the only reasonable attitude to correct our serious overseas trade position. Importation of the items having ceased, they are now being manufactured in Australia. I do not suggest that we are in a position yet to export, but some of the lines are, I believe, being placed in markets outside Australia. But for this Government’s action that over- seas market would not have been exploited. These are some of the facts which honorable members opposite are called upon to answer.

It has been contended that, as a result of these embargoes, the unemployment problem has been rendered more acute. I admit that the importing interests have been hit hard, aud that the staffs of some firms have been depleted, but it should surely be possible to re-absorb these employees in the distribution of the Australianmad <! goods.

I agree that all new tariff schedules should be discussed by Parliament within a reasonable time after their submission to Parliament. That was not possible in the case of the several schedules which the Government has brought down, because of the pressure of other legislative work; but wherever possible Parliament should have an early opportunity to consider all alterations to the tariff, and if anomalies are disclosed, they should be rectified. If, upon inquiry, it is found that Arbitration Court awards have reduced wages in industries which receive tariff protection, either the price of the commodity concerned should be lowered to the consumer or there should be an alteration in the duty. I agree with honorable members that, wherever possible, the fullest measure of relief should be given to our primary producers, and, in this connexion, I have in mind the primage duty on cornsacks mentioned by the honorable member for Wimmera (Mr. Stewart).

Mr Stewart:

– I mentioned that by way of illustration.

Mr KEANE:

– That is so. I have no doubt that other items will be mentioned during the debate. Our purpose should be to ease, a3 much as possible, the burden upon the man on the land, having due regard, of course, to the interests of our secondary industries. This tariff has been amply justified. I believe that, when some measure of prosperity returns to Australia, it will be the means of providing employment for a large number of Australian workmen. Possibly we shall have reprisals from the governments of other countries, but I believe that we shall be able to adjust all these differences satisfactorily. The rates are reasonable. They represent an honest attempt by this Government, supported by Sir Robert

Gibson, to do something in the interests of the people. This debate will enable every honorable member to know the angle from which other members view the various items, and to make full allowance for the differing points of view.

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA · ALP; FLP from 1931; ALP from 1936

.- This discussion gives honorable members an opportunity to consider the economic position of the Commonwealth, and make suggestions for the more equitable application of a scientific tariff designed for the protection of industries that are calculated to provide remunerative employment for our people. A tariff is necessary to provide revenue, and to safeguard our primary and secondary industries. In a young country like Australia, with a small population, we must look mainly to our primary industries to produce the wealth required to meet its overseas obligations. I wish to make it perfectly clear that protection is my fiscal belief. I advocate a fiscal policy that will increase employment both in primary and secondary industries. We must develop our agricultural, pastoral and mineral resources. We have depended for many years on our primary industries, and the way in which Parliament helps those industries will determine whether Australia can play its part in promoting, the progress of the Empire. I realize, at the same time, that the secondary industries are valuable in providing employment for a large section of the people who cannot be placed on the land. It has been aptly said that for many years the people of Australia have been riding on the sheep’s back. The great primary industries of wool and wheat-growing have been seriously handicapped by taxation through the Customs Department and by direct taxation. I understand that eight separate tariff schedules have been tabled during the last eighteen months. The Minister for Trade and Customs (Mr. Forde), in introducing the present tariff alterations said that the object was to create employment for thousands of men, and yet we find unemployment more widespread now than it was when this Government took office.

Judging by its fiscal policy, this Government expects the outside world to purchase our primary products although we erect a tariff wall that prevents other countries from selling their goods to us. How long can those countries he expected to submit to that treatment? Even a great protectionist country such as the United States of America is not entirely self-contained. Despite its great manufacturing achievements, particularly in the iron and steel industries, when a locomotive is built in the United States of America it is necessary to import various materials used in its construction from no less than 47 different countries. The peace of the world depends upon international trade. We hope to retain the friendship of other nations, and we must do so largely through the channels of trade. The sale of Russian wheat on the world’s markets, and particularly in Great Britain, has adversely affected the sale of Australian wheat.

Mr Stewart:

– But Russian wheat had nothing to do with France virtually placing an embargo on the sale of Australian wheat in that country.

Mr MARR:
PARKES, NEW SOUTH WALES

– The French duty was imposed by way of reprisal.

Mr Archdale Parkhill:

– The Russian wheat was bought in Great Britain by the Labour co-operative societies.

Mr MARR:

– If we desire to remain friends of France, we must trade with that country, and only by that means can wc retain the recently acquired friendship of Germany. We should trade with the countries that do business with us. I have no sympathy with the United States of America, which is well able to look after itself. Australia has bought millions Of pounds worth of goods from that country, but it has purchased very little from us in return.

Mr Killen:

– It has placed a heavy duty on our wool.

Mr MARR:

– That is so.

I think that, every member will agree that the hope of Australia, and of the Empire as a whole, depends on interImperial trade. I understand that the Minister for Markets (Mr. Parker Moloney) has been endeavouring to arrive at a trade agreement with Canada, and I hope that, for the mutual benefit of that dominion and Australia, he will be successful. By means of trade within the Empire, the interests of the various self-governing dominions may be advanced. We should look to the other parts of the Empire for the goods that we cannot successfully manufacture here at the present time. Certain classes of goods cannot be manufactured in Australia on a commercial basis. Although I am a Protectionist, I do not believe in protecting backyard industries.

Mr Beasley:

– All big things have had small beginnings.

Mr MARR:

– Yes. I have seen industries in Australia grow from very small beginnings, but the working classes must pay, ultimately, for the policy of high protection, and it is our duty to safeguard the interests of those who can least afford to pay high prices for commodities.

The position of the wheat industry is one of the causes of the present depression. In New South Wales, we find that the silos are filled with wheat, locomotives are standing idle in the railway sheds, and engine-drivers are rationed because there is little work for the locomotives to do. The coal-miners are not producing so much as formerly, because less coal is required by the railways. Trucks are empty, and wharf labourers are drawing the dole. All this is due to the fact that a market cannot be found for our wheat. In Sydney, today, wharfs, which were formerly busy with shipping that was bringing goods to this country and taking our produce away, are now idle. I do not suggest for a moment that goods should be imported in such quantities as would deprive our own people of employment, or destroy local industries which can be carried on successfully; but we cannot escape the fact that, if vessels como to Australia with empty holds, the freight charges on the goods we must export will be twice as heavy as they would be if those vessels carried goods to Australia.

Does any member imagine that every article required in this country could be manufactured here at the present time on a commercial basis ? Such a desirable condition of affairs cannot be brought about by the mere waving of a wand. When we consider the progress made in some of our secondary industries, and compare them with those of other countries, we are naturally proud of them. They have been built up from small beginnings by hard work and long hours of labour. They have resulted from the application of brains and brawn. I do not believe in spoon-feeding any industry.

A certain amount of protection is desirable, in order that our manufacturers may compete with the rest of the world. The policy that the Minister espouses on behalf of the Government is one of prohibition of imports, but that would affect the freight charges on the goods* that we must export. If the population of Australia were sufficiently large to enable us to become a comparatively self-contained country, so that we could sell our own products here, it would not matter much what wages were paid, or what hours of labour were observed. The wheat and wool-growers would not need to worry over industrial conditions, because we could arrange those matters in Australia to suit ourselves; but our primary producers have to compete with the rest of the world. If we expect other nations to buy our goods, we must be prepared to trade with them in a reasonable way.

I have said that we must adopt either a revenue tariff or a protective tariff. The Government has chosen a prohibitive protectionist tariff, which has deprived it of the large revenue that has been derived for many years through the Customs Department. We cannot have it both ways. If we protect all industries up to the hilt, as the present Ministry proposes, we cannot have the former customs revenue. What industry in Australia con continue under the burden of taxation that is now imposed upon it? Every honorable member will admit that the more industry is taxed the greater the unemployment which is created. We are all desirous of raising additional revenue; but how can it be done?

Mr Beasley:

– We are told that we must balance our budgets.

Mr MARR:
PARKES, NEW SOUTH WALES · NAT; UAP from 1931

– Had the Government of which the honorable member for West Sydney (Mr. Beasley) was until recently a member, made an attempt to balance its budget, we should not now be in the position in which we find ourselves. Unfortunately, the Government has made no attempt to do so.

Mr Yates:

– We are where we are because of the administration of the Government of which the honorable member was a Minister.

Mr MARR:

– That Government put the country on a better footing than ever before.

Mr Yates:

– On borrowed money and good seasons.

Mr MARR:

– Almost the whole of the £220,000,000 to which the honorable member has referred several times was borrowed on behalf of the States. I remind him that the Bruce-Page Government created the Loan Council and the National Debt Sinking Fund, which have made it impossible for Mr. Lang’s Government to raise all the millions which he promised the people of New South Wales he would raise.

Mr Stewart:

– The rest of Australia has to pay the debts of New South Wales.

Mr MARR:

– It is true, for the moment, the Commonwealth is bearing the burden ; but eventually the State must meet its obligations. I feel sure that no honorable member, not even excepting the honorable member for West Sydney, desires that Australia should repudiate its obligations. When the honorable member speaks in support of the Lang plan I am afraid that he speaks with his tongue in his cheek.

Mr Beasley:

– That is not fair.

Mr MARR:

– If the honorable member objects, I withdraw the statement.

The introduction of these tariff proposals provides an opportunity for a discussion of our whole economic position. We all desire to assist industry, solve the problem of unemployment, and bring back a return of good times. But good times will not return so long as the Government pursues its policy of prohibiting imports. The embargo on imports is depriving the country of revenue which it badly needs, and, moreover, is creating a certain amount of ill feeling among nations which wish to sell us their goods. It has been stated on good authority that every man who goes on the land, and becomes a successful farmer, provides work for five men in the cities. Conversely, every farmer who fails throws five men out of work. In the light of that statement, we should do all we can to assist our primary industries, not only in the interests of the primary producers themselves, but also in order to find employment for dwellers in the city. Probably nothing so affects the general prosperity of the community as does its fiscal policy. The tariff proposals of the Government have made prosperity well nigh impossible.

Unfortunately, because of lack of trade our ports are idle and our wharfs empty.

Before there can be a revival of shipping, there must be a return of prosperity in our great primary industries, mineral, agricultural, and pastoral, particularly the two last named.

Mr Watkins:

– How is it possible for all. our ports to be busy with the railway system as it is in New South Wales?

Mr MARR:

– The honorable member for Newcastle (Mr. Watkins), who was at one time a member of the New South Wales House of Assembly, knows that numbers of expensive railways have been constructed in localities where they could never pay.

Mr Watkins:

– The trouble is that everything is brought to Sydney.

Mr MARR:

– This’ Parliament cannot rectify that position. The question that faces u3 now is how to sell our primary products in the markets overseas at prices which will be satisfactory to the growers. In this connexion shipping freights are of great importance. I take it that all honorable members, irrespective of party, are desirous of doing everything possible for Australian industries, particularly our primary industries. Some of our secondary industries are also worth protecting. Among thom is the iron and steel industry. There are, however, other industries which, at the moment, are not worth worrying about, although at some other time we might do well to assist them.

Mr Beasley:

– What about the manufacture of sewing machines?

Mr MARR:

– That matter has been dealt with fully by the honorable member for Bendigo (Mr. Keane).

The committee should use its best endeavours to solve satisfactorily the great economic questions which are bound up in the tariff. This is not a party subject. We should all do our best to find some means of alleviating the suffering caused by the prevalence of unemployment. But in doing so we must remember that primary production is the basic industry of the country. The Minister for Trade and Customs (Mr. Forde) has’ shown great energy and enthusiasm in his office. While I do not agree with all the honorable gentleman has done, I must admit that he has worked hard.

Mr Archdale Parkhill:

– Yes; he has visited six factories before breakfast.

Mr MARR:

– I should like to ask what use it is for us to pay a Tariff Board unless we intend to take notice of its recommendations. If the Ministry does not intend to give effect to the recommendations of the board it should abolish it.

Mr Lewis:

– It is a costly excrescence.

Mr MARR:

– The board devotes the whole of its energies to its inquiries into the position of various industries in Australia. I do not think any honorable member would suggest that the members of the board are more concerned about their fees than they are about the prosperity of our industries. If the Government is not prepared to accept the recommendations of the board it should tell us why.

Mr Jones:

– The Government of which the honorable member was a member did not always adopt the recommendations of the board.

Mr MARR:

– In the cases in which it did not do so it made an explanation to the House. The Tariff Board worked so hard that two of its members died while still in the prime of life. I know that during the regime of the last Government the board found it impossible to inquire into all the industries which requested tariff assistance.

Mr Forde:

– That is the experience of this Government. So many applications were made for assistance that it would have been unwise to delay action until the board made an inquiry in every case.

Mr MARR:

– But even the reports which have been presented have not been acted upon.

Mr Forde:

– They have in many cases.

Mr MARR:

– An explanation should have been given in’ the cases in which the Government did not accept the advice of the board. I believe that all tariff questions should be inquired into by a competent body; and the present Tariff Board is that.

Mr Forde:

– The board was only intended to act in an advisory capacity.

Mr MARR:

– I do not suggest that the Government is bound to accept every recommendation of the board, but it certainly should give careful consideration to any proposals which the board might make.

Mr Forde:

– The honorable member for Moreton (Mr. Francis) quoted some paragraphs from the 1928 report of the

Tariff Board, in which a complaint was made that the Bruce-Page Government did not accept the recommendations made by the Board.

Mr MARR:

– Surely it must be realized that while some honorable members of the House are well informed in regard to particular industries, no honorable member has a thorough knowledge of all industries. It is for this reason that an expert body was set up to make recommendations in regard to tariff questions.

I have several other points to which I wish to refer and I ask the Minister to report progress.

Progress reported.

page 1609

ADJOURNMENT

Commonwealth Bank Board : Re-appointmentofsirrobertgibson.

Motion (by Mr. Scullin) proposed -

That the House do now adjourn.

Mr BEASLEY:
West Sydney

– It is necessary for me to make a further statement on the subject of the reappointment of Sir Robert Gibson to the chairmanship of the Board of Directors of the Commonwealth Bank, following upon the statement made in the House last week by the Prime Minister and the further statement made by him in the press. The circumstances which have arisen in this controversy between myself and the Prime Minister are such that the right honorable gentleman has, either consciously or unconsciously, inferred that the statements made by me are untrue. I cannot allow the matter to remain there. It was not my desire to enter into lengthy details on this subject, but asthe truth of what I have said has been challenged it is necessary for me to amplify my previous statements. The Prime Minister said in the press report to which I have referred that the re-appointment was made by Cabinet on the 4th August last, and confirmed at a subsequent meeting on the 8th August. It will be remembered that when this matter was mentioned in the House last week the Prime Minister said that the reappointment was agreed to unanimously on two occasions, and clearly left it to be inferred that I was associated with it. During the week-end I made a careful check of my movements during August, and I am now able to say, without hesitation, that I was not present at the

Cabinet meeting on the 4th August when Sir Robert Gibson was re-appointed.

Mr Scullin:

– That is quite true. Still, the decision was unanimous.

Mr BEASLEY:

– I was in Sydney on the 4th August, and did not return to Canberra until the 5th August. As a matter of fact, Senator Daly was not present at the meeting of the Cabinet on the 4th August, because he, also, was in Sydney. I believe that he and I were at that time dealing with the question of shale oil deposits in New South Wales. I was present at the meeting of the Cabinet held on the8th August, when the minutes of the previous meeting were read, and I protested against the decision to reappoint Sir Robert Gibson; but it is not customary for protests made, or divisions taken in Cabinet to be noted or recorded. I based my protest on the fact that this question was regarded as one of great importance by the supporters of the Government because some months earlier, in the party room, members expressed strong opposition to his being reappointed. It was felt that the monetary policy of the Government could not be given effect if this man were allowed to continue to carry on as he had done during the years that he had been chairman of directors of the bank.

Mr Crouch:

– But the decision of the Cabinet on the 4th August was unanimous.

Mr BEASLEY:

– I was accused of not having told the truth in regard to this matter, and that is the reason for the statement that I am making to-night.

Mr Scullin:

– The statement made by me, which the honorable member challenged, was that the decision was a unanimous one - that is all.

Mr BEASLEY:

– The Prime Minister said the decision was a unanimous decision. I said it was not. It is useless for the Prime Minister to attempt to get away from the inference which his remarks conveyed to this House.

Mr Scullin:

– I am getting away from nothing.

Mr BEASLEY:

– At the conclusion of the right honorable gentleman’s statement the other night, he said that because the decision was unpopular in Labour circles I was trying to run away from it. I interjected then that he would run away when the full story was told, and that is exactly what he is doing to-night. The only inference that could be drawn from his remarks that I was running away was that I was present when the appointment was made, and that I was a party to it in every respect.

Mr Scullin:

– The honorable member was present when the appointment was confirmed.

Mr BEASLEY:

– As I have already pointed out, this matter was discussed in the party room. It is because of that fact that the whole matter is fresh in my memory. The Prime Minister at that time felt that it would not be altogether a judicious act for the supporters of the Government to place him in the position of being forced to do certain things in regard to this matter. Because of that he gave an undertaking to those who were interested that before this appointment was made an opportunity would be given for further consultations to be held. It was on that account that I raised my protest on the Sth August. It is true that there is no record of that protest; but there is at least one member of the Cabinet who will support my statement that it was made. It was on the 8th August that the appointment was confirmed, and on the same day this House went into recess. Therefore, if the appointment was made on the 4th August, and was known officially to me on the 8th August, there was a period of four days in which the information could have been conveyed to those members of the party who were interested, because they were still hi Canberra. The promised opportunity for a further consultation in regard to the matter was denied them. I say that the Prime Minister had an opportunity to consult with them, because they were still in Canberra.

Mr Crouch:

– What has that to do with the statement that-

Mr BEASLEY:

– I am not going to allow the honorable member to act as back-stop in this affair. The matter was further discussed in Melbourne on the 6th September. It was on that date that the honorable member for Bourke (Mr. Anstey) handed in his protest - which the Prime Minister denied that he had made - against the appointment. The right honorable gentleman was not present on that occasion.

Mr Scullin:

– That was not what I denied.

Mr BEASLEY:

– He was then on his way to the Imperial Conference. There is one aspect about the meeting on the 6th September that has never been satisfactorily adjusted so far as I and also many members who sit on this side of the House are concerned. We discussed the matter on the 6th September and after the decision was arrived at I said that I felt disposed to go back to those who were interested and inf orm them of the decision of the Government on the matter. Those who were present at that meeting declared that I was entitled to do so. I did go back to New South Wales and discuss it with a number of members from that State, and there are men here who know what happened on that occasion when I told them of the decision of the Government. It was felt that, following upon the decision of the 6th September, a further opportunity would be given to those who were opposed to the appointment to express their views before the appointment was finally dealt with by the Executive Council. To my astonishment, I found that it “was sanctioned at a meeting of the Executive Council held on the 3rd September before certain Ministers left Canberra for Melbourne. We were not advised when we discussed the matter in Melbourne on the 6th September, that it had been finally disposed of at a previous Executive Council meeting held in Canberra.

There is another aspect which those who are interested in the matter consider requires explanation. It was not necessary to deal with the appointment of this gentleman until the 10th October, because the commission granting him a seven years’ tenure of office was not issued until that date. It seems strange to me that such extraordinary haste should have been shown. The Prime Minister has admitted that the departmental file discloses the fact that, on the 11th August, Sir Robert Gibson was advised of his re-appointment; yet the necessity for re-appointing him did not arise until the 10th October, because that was the date upon which the commission was issued.

I place these facts before the House to show, first of all, that I was not present at the meeting of the Cabinet on the 4th August. I have plenty of evidence to prove that-

Mr Gullett:

– Was the honorable member for Bourke present at that meeting?

Mr BEASLEY:

– I do not know; I was not there.

Mr PATERSON:

– Does the honorable member wish to- disclaim any connexion with the one good deed performed by the Government ?

Mr BEASLEY:

– I am exceptionally pleased to have that interjection, because it further establishes me in my position. It proves that my opposition to the appointment is based upon sound principles, from a Labour member’s point of view and that it ought not to have been made.

Mr Latham:

– I associate myself with the remarks of the honorable member for Gippsland (Mr. Paterson).

Mr BEASLEY:

– We all know that the Leader of the Opposition (Mr. Latham) is “ in the joke and that the appointment certainly pleased him. The expression of his opinion, strengthens my case and helps mc considerably.

Mr Latham:

– It is the best thing the Government has done.

Mr BEASLEY:

– All that I am concerned about is to establish the fact that when I make a statement either in this1 House or anywhere else, I tell the truth. I have always prided myself upon that. There are times when the truth is unpopular ; but never during my association with the Labour movement, whether politically or industrially, have I shirked it. I wish to place it on record that when the Prime Minister said that the decision to reappoint Sir Robert Gibson was unanimously agreed to, he directly inferred that I was associated with that decision and wanted to run away from it. I have shown the House that I was not at the meeting of the Cabinet on 4th August, when the decision was arrived at, and that when the matter was next discussed, it was a question merely of confirming the minutes of the previous meeting. I claim that I then protested emphatically against the decision. The haste shown in finalizing the matter in September when the appointment need not have been, made until October proves that some strange influences were at work.

Mr FORDE:
Minister for Trade and Customs · Capricornia · ALP

.-In fairness to the Prime Minister I wish to say, as Secretary to the Cabinet, that his statement is correct that the decision te reappoint Sir Robert Gibson wa3 made unanimously at a meeting, of the Cabinet on the 4th August last. The right honorable gentleman was also correct when he said that the minutes of that meeting were read at a subsequent meeting on the 8th August and that no objection was. offered to the appointment. I was present at both of those Cabinet meetings. It is true that the honorable member for West Sydney (Mr. Beasley) was not present at the meeting of the Cabinet held on the 4th August. The Prime Minister has admitted that.

Mr Beasley:

– He did not make that fact clear in his statement. Had he done so, I should not have risen to-night.

Mr FORDE:

– The honorable member was present at the Cabinet meeting on the 8th of August, when the minutes were again read, and unanimously confirmed. It is true that some time later - the 6th September - after the right honorable the Prime Minister had left for England, the honorable members for West Sydney and Bourke protested against the appointment of Sir Robert Gibson.

Mr BLAKELEY:
Minister for Home Affairs · Darling

– I desire to record my recollections of this incident. I do so because of the direct attack that has been made on the Prime Minister (Mr. Scullin). I attended the Cabinet meetings that were held on the 4th and Sth of August, and also on the 6th of September. On the 4th of August absolutely no protest was raised against the re-appointment of Sir Robert Gibson. On the Sth of August, the only protest was that made to me personally by the honorable member for West Sydney (Mr. Beasley) who was seated next to me. On the 6th of September the honorable member for West Sydney and also the honorable member for Bourke (Mr. Anstey) certainly did make protests. The statement of the Prime Minister is quite correct in regard to the time and date when the resolution was carried, and as to its having been unanimously agreed to.

Mr SCULLIN:
Prime Minister · Yarra · ALP

– It is very regrettable that an ex-minister should discuss Cabinet matters in the House.

Mr Beasley:

– The right honorable gentleman began the controversy, and he gave dates.

Mr SCULLIN:

– I made a perfectly frank statement in relation to the reappointment of Sir Robert Gibson. At the time I had not any Minister or exminister in my mind. I was simply announcing the re-appointment of Sir Robert Gibson. I make no apology for having recommended that re-appointment and I believe that the Government was well justified in making it. I stand by that recommendation to-day as strongly as I did when I made it to the Cabinet.

Mr Eldridge:

– The honorable gentleman knows that the party did not approve of the intended re-appointment of Sir Robert Gibson.

Mr SCULLIN:

– The honorable member for Martin (Mr. Eldridge) asked the party to disapprove of my action. When I explained the reasons why I made the recommendation the motion that my explanation be accepted was carried unanimously. The honorable member was there, together with the honorable member for West Sydney.

Mr Beasley:

– I was not. I was then taking part in the East Sydney byelection campaign. The right honorable gentleman is wrong again. He does not know what he is saying.

Mr SCULLIN:

– I repeat that the statement I made was that the appointment was agreed to unanimously by the Cabinet. I did not say that the honorable member for West Sydney waspresent at the Cabinetmeeting on the 4th of August. He was not. He was at the meeting that was held on the 8th of August.

Mr Beasley:

– The right honorable gentleman said that there were two meetings.

Mr SCULLIN:

– I did, and I do so again.

Mr Beasley:

– And the Prime Minister tried to connect me with them.

Mr SCULLIN:

– The recommendation was made at the meeting of the 4th of August, when it was unanimously approved. The appointment was reaffirmed unanimously at the meeting of the 8 th of August.

Mr Beasley:

– It was not.

Mr SCULLIN:

– What happened on the 6th of September I do not know, as I was not there.

Mr Beasley:

– You denied that portion of the honorable member for Bourke’s (Mr. Anstey) statement?

Mr SCULLIN:

– I did not.

Mr Beasley:

– You are impossible.

Mr SCULLIN:

– The honorable member is not fair. I denied the statement of the honorable member for Bourke that he had protested when the re-appointment of Sir Robert Gibson was being made. I say that no such protest was made. What the honorable member for Bourke (Mr. Anstey) said on the 6th September I do not know, but it had nothing whatever to do with the making of the appointment, because that had already been decided. Any protest that was made on the 6th September therefore was immaterial.

The honorable member for West Sydney (Mr. Beasley) suggests that there is something sinister about the alleged haste in which the re-appointment was made. There is something at the back of the honorable member’s mind that suggests that sinister motives underlie a great many actions. There was nothing sinister about the re-appointment of Sir Robert Gibson. I took the responsibility of making the recommendation and having the re-appointment confirmed before I left Australia. It would not have been right to leave the Chairman of the Board of Directors of the Commonwealth Bank in the dark as to his position right up to the day when he had to be re-appointed. He was carrying on very important negotiations on behalf of the Commonwealth, and was held in very high esteem here and by people on the other side of the water with whom I had to make negotiations.

Mr Beasley:

– Of course he was!

Mr SCULLIN:

– The honorable member sneers. He implies that one should not negotiate with anybody excepting those of whom he approves.

Mr Eldridge:

– The honorable gentleman knows that the party did not approve of the intended appointment.

Mr SCULLIN:

– The Government takes full responsibility for Sir Robert Gibson’s re-appointment, which hadthe unanimous approval of Cabinet on both occasions when the matter was submitted to it.

Question resolved in the affirmative.

House adjourned at 10.36 p.m.

Cite as: Australia, House of Representatives, Debates, 5 May 1931, viewed 6 July 2017, <http://historichansard.net/hofreps/1931/19310505_reps_12_129/>.