12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took the chair at 11 a.m., and offered prayers.
– I ask the Minister representing the Treasurer whether it is a fact that some returned soldiers, including two limbless men, who are temporarily employed in the Melbourne office of the federal taxation branch, and have had from twelve to fifteen years of service, recently received notice of dismissal? If this is so, will the Government inquire into the matter, especially in view of the fact that further appointments have recently been made to the taxation branch on account of the increase of work involved in the administration of the sales tax?
– I shall endeavour to let the honorable member have a reply at a later hour this day.
– I ask the Minister representing the Treasurer whether the Government has yet arrived at a decision regarding the application of the five-day week in the offices of the taxation branch in Sydney and Melbourne, to which it could be conveniently applied in accordance with the policy of the Government?
– The matter is still under consideration.
– I ask the AttorneyGeneral whether the Government proposes to accede to the Convention between His Majesty the King and the President of the German Republic regarding legal proceedings in commercial matters, and if so, when? If the Government does not propose so to do, what are its reasons? Failure to accede to this convention imposes a great disadvantage on Australian citizens in respect of’ legal proceedings involving the taking of evidence in Germany.
– I shall endeavour to make a statement on the subject before the House adjourns to-day.
– As the larger banking institutions in New South Wales have announced their conformity with the plan for the reduction of rates of interest on deposits and overdrafts, will the Minister representing the Treasurer inform the House when the Commissioners of the Government Savings Bank of New South Wales will permit their clients, including home buyers and farmers, to participate in the benefits accruing from the Melbourne agreement which included a decision that the rate of interest on all overdrafts should be reduced by 1 per cent. ?
– Ordinarily I would ask the honorable member to give notice of his question, but in view of the probability of the House adjourning to-day for some weeks, I shall endeavour to let him have a reply later to-day.
– In regard to Communist propaganda from Moscow, will the Attorney-General cause investigations to be made into the proprietorship of the Workers’ Weekly, a newspaper which bears an imprint of the hammer and sickle, the insignia of the Soviet? The journal is printed in Sydney, and claims to be the “ official organ of the Communist party of Australia, Australian section of the Communist Internationale”.
– I assure the honorable member that my department, particularly the investigation branch, is fully aware of the circulation of literature of this class ; in fact I have a large collection of numbers of the journal mentioned, and if ever I should have a year to spare, I shall peruse them.
– I ask the Minister representing the Treasurer (1) whether the superannuation payable to retired postal employees was reduced by the recent amending legislation; (2) what proportion of the contributions to the superannuation fund, does the Government make, and is the superannuation payable to the employees reduced by a proportionately greater amount than 20 per cent, of the Government’s contribution ?
– The honorable member being wise in his day and generation notified me of his intention to ask these questions, and I am, therefore, able to let him have the following replies: - (1) Yes; (2) The Government does not make any payment to the Superannuation Fund until a pension becomes payable. The proportion of pensions paid by the Commonwealth is at least SO per cent. In many cases it is much more. This is caused by the fact that at the commencement of the scheme, the older employees were permitted to contribute for the first £104 of pension at the reduced rate for age 30 years, the Commonwealth bearing the greater proportion of the pension. To quote a striking instance, the Commonwealth’s share in one case was £102 of the total pension of £104., No superannuation pension has been reduced by a greater proportion than 20 per cent, of the Commonwealth’s contribution.
– Section 84 of the Constitution provides, inter alia, that officers transferred from the State service to the Commonwealth service shall retain all their existing and accruing rights. Will the AttorneyGeneral state whether recent legislation, which reduces the superannuation payable to postal officials who were transferred from the State to the Commonwealth service and are now in receipt of pensions, is valid?
– The honorable member is doubtless aware that it is not customary or even proper to give legal opinions in answer to questions. Nevertheless, I shall, at a convenient time, endeavour to let the honorable member have a reply which will not be a breach of the Standing Orders.
Broadcasting of Political Speeches - Wave Lengths
– I ask the PostmasterGeneral whether it is a fact that at least two B class broadcasting stations in
Sydney very frequently broadcast political addresses? If so, doeshis department censor or scrutinize in any way the substance of those addresses before they are delivered?
– I am not aware that any B class broadcasting station in Sydney neglects to inform the department of its intention to broadcast matter of a controversial nature. I shall, however, inquire into the honorable member’s allegation.
– Is the PostmasterGeneral aware that from 2FC station a person under the pseudonym of “ The man outback” broadcasts each morning a commentary on news items which is extremely biased against Labour policy ?
– This matter has not previously been brought to my notice, but I shall inquire into it.
– The Postmaster-General appears not to be aware of what happens at Sydney broadcasting stations. I ask the honorable gentleman whether he concentrates his attention on the B class station in Adelaide, and particularly the activities of the Citizens’ League?
– No complaint has previously been made regarding the Sydney B class stations, but complaints have been made of the matter broadcast from the B class station in Adelaide.
-Will the PostmasterGeneral state whether any, and, if so, what alteration has been made in the regulations governing broadcasting by virtue of which a new form of censorship is being applied to broadcast speeches?
– The regulations have not been altered since the present Government assumed office. There has been a tendency lately, however, for irresponsible persons, who are not representative leaders of political parties, to broadcast statements of a highly controversial character. Such activities have to be dealt with as the occasion requires.
– Does the Postmaster General’s Department contemplate altering the wave lengths of B class broadcasting stations below 200 metres? If it is not intended to apply the alteration to all stations, what stations will be
– I replied to that question yesterday, but I shall have further inquiries made, and let the honorable member know what is to be done.
– Does the PostmasterGeneral regard it as a function of the post-office to prevent the broadcasting of controversial statements other than those made by persons whom he has described as leaders of parties or other political leaders? If so, will this rule be applied to A class as well as B class stations?
– I shall be very pleased if the honorable member will put that question on the notice-paper.
Report on Agricultural Lands.
– On the 17th of July the honorable member for Robertson (Mr. Gardner) asked a question relating to a report by Mr. E. N. Robinson, of the Development Branch of the Prime Minister’s Department, regarding leasehold values in the Federal Capital Territory. I now lay Mr. Robinson’s report on the table for the information of honorable members.
Payment with Commonwealth Bonds.
– Yesterday I asked the Minister in charge of War Service Homes whether it was a fact that instructions had been issued by the Commissioner of War Service Homes to his deputies in the various States that Commonwealth bonds are not to be accepted in part payment for homes. Has the Minister a reply to the question?
– The position, as I understand it, is that the Treasury issues instructions to the various departments regarding the acceptance of treasury bonds in payment on amounts due on war service homes. It is pointed out that if bonds were accepted for war service homes repayments, it would be difficult, if not impossible, to refuse their acceptance for other payments due to the Commonwealth, such as income tax, land tax, sales tax, telephone rentals, &c. If bonds were accepted in payment of these services it would be necessary to eonvert them into cash for the purpose of receiving the money due to the Government, and this could be done only by selling the bonds on the market. If this were done on a large scale, as quite likely it would be, it would have the undesirable effect of depressing the market for Commonwealth securities.
– Has the War Service Homes Commission yet given consideration to the reduction of the assessed capital value of the homes, and if not, when is it proposed to consider their revaluation ?
– I replied to a similar question yesterday. Representations have been made by various bodies, and the matter is under consideration.
– What are the conditions and rates of premium paid by occupants of war service homes for the insurance of the properties? Is it possible for the Minister to state the total amount paid to insured persons with respect to fires and other damage to their homes, and what is the amount to the credit of the fund? It is generally believed that the amount is considerable, and that therefore the premium rates should be reduced. I do not expect a reply off-hand, but I would be glad to have an answer to my question on the adjournment of the House ?
– I have the information desired by the honorable member, and I shall convey it to him on the adjournment.
– Has the Minister for Home Affairs (Mr. Blakeley) noticed a letter from a correspondent, published in the Canberra Times this morning, in which he alleges that the Minister has given misleading replies to questions asked in the House? As this is a serious statement, of public importance, what action does the Minister propose to take to clear his name, and restore the confidence of the House in himself, and in his department?
– I do not feel that my honour has been impugned by the representations made by the correspondent referred to,
-In view of complaints received from Australian tobacco-growers regarding the price now being offered for their leaf, will the Minister for Markets make inquiries with a view to ascertaining whether the price offered is reasonable, in view of the fact that the high protection given to the industry under the tariff is intended for the benefit of the Australian growers of tobacco?
– I shall make inquiry into the matter, and let the honorable member know the result.
– Has any word been received from the High Court judges signifying their intention, voluntarily, to accept a reduction of their salaries?
– I understand that some consultation has taken place between the Prime Minister and the Chief Justice in regard to the matter, but nothing final has been determined.
– Does the Government intend to make available the letter that was written by J udge Lukin to the Prime Minister setting out the reasons why he will not accept a reduction of his salary?
– The question raised is one for determination by the parties to the correspondence. I am not in a position to say anything further about it now.
asked the Prime Minister, upon notice -
What steps have been taken by the Government to secure a reduction of the interest rate on overseas loans?
– The Government has been unable to give full consideration to this matter, pending the putting into operation of the plan for financial rehabilitation in Australia.
asked the Minister for Home Affairs, upon notice -
Didhe, during July, 1931, issue the following instructions to the Canberra police: -
Have these instructions since been amended or cancelled?
– See my answers to questions by the honorable member for Richmond on the 15th July, 16th July, and 28th July.
Inclusion of Sales Tax
asked the Minister for Home Affairs, upon notice -
Will he arrange that the Commonwealth Statistician takes into consideration the sales tax on cost of living commodities?
– The matter will reaeive consideration.
Value of Importations - Duty
– The honorable member for Kooyong (Mr. Latham) has asked a series of questions regarding the importation of petroleum. The information is being obtained.
asked the Minister for Home Affairs, upon notice -
Referring to the information supplied to this House by him on the 22nd July last in relation to the reduction of charges to Members of Parliament and officers of the Commonwealth Public Service, at hotels in Canberra, in consequence of the 20 per cent. reduction in salaries, and in view of the reduction in rents already granted to householders in consequence of the salary reduction referred to, will he arrange for an appropriate reduction, without further delay, in the rates charged to members of parliament and public servants who reside at government hotels in Canberra, such reductions to operate as from the date the reductions in salaries became effective?
– As I havepreviously stated, this matter is now being investigated, and will be reported on by a special committee appointed by the Government.
Bill returned from the Senate with amendments.
In committee (Consideration of Senate’s amendments) :
Clause 9 -
After section eighty-eight of the Principal Act the following section is inserted: - “ 88a. Where a company is liable to pay, in addition to income tax payable at the rates fixed for companies, further income tax of a specified percentage of its taxable income which is derived -
in the course of carrying on a business, where the income is of such a class that, if derived otherwise than in the course of carrying on a business, it would be income from property, the company may, notwithstanding anything contained in the memorandum or articles of association of the company, or in any other document or agreement, deduct from any dividends payable to the preference shareholders of the company an amount equivalent to that percentage of such portion of the dividends as is distributed out of the taxable income of the company which is so derived.”.
Senate’s amendments -
After the word “ company “, proposed new section 88a, insert the words “ has paid or “.
Omit from proposed new section 88a paragraphc the words “ to that percentage of such portion of the dividends as is distributed out of the taxable income of the company which is so derived “, and insert in lieu thereof the words, “to the amount of that further income tax which has been paid or is payable by the - company upon taxable income which has been distributed to its preference shareholders “.
– Representations have been made to the Government to the effect that the provision in the bill which authorizes a company to deduct from dividends payable to preference shareholders the special income tax of 10 per cent. which may be payable by the company on its income from property out of which dividends to shareholders may be distributed, will not assist a company which has already distributed that particular income, because the provision in the bill does not permit the company to charge the tax against future dividends which may become payable to the company. The intention of the provision is to enable a company to recover the income tax from the preference shareholders. It is now realized that the provision is defective, and the amendment now proposed is submitted by the Crown Law Department to provide the desired remedy. So far as I understand the matter, this is a draftsman’s amendment, and it is designed to give effect to the intention which Parliament had in mind when the bill was passed. I move -
That the amendments be agreed to.
.- Is the Attorney-General in a position to state what relation this amendment has to ordinary shareholders? The amendment is designed to clarify the position by enabling a deduction of tax that has been paid, as well as tax that a company is liable to pay. It relates to dividends payable to preference shareholders, but why does it not extend to dividends payable to ordinary shareholders?
– I understand that the amendment has special application to preference shareholders, inasmuch as their dividends may not have been actually paid or declared at the time of the imposition of the tax, and it is desirable to make the provision apply to those dividends when so declared or paid. This provision has special application to the class mentioned in the amendment.
– There may be some unexpected results from this legislation.
Motion agreed to.
Senate’s amendment - After clause 10 insert the following new clause: - “ 10a. The application of section twenty of the Commonwealth Debt Conversion Act 1931 shall extend to such Commonwealth Treasury Bills issued to banks in Australia, on or after the thirty-first day of July, One thousand nine hundred and thirty-one, as the Australian Loan Council, constituted in pursuance of the schedule to the Financial Agreement Validation Act 1929, determines.”.
– I move -
That the amendment be agreed to.
This amendment is necessary to secure that interest on treasury-bills which are issued or renewed at reduced interest comparable with the rates of interest to be paid on converted stocks and bonds of the Commonwealth Loan, shall receive the same treatment as regards rate of income tax in future as was accorded with respect to loan interest by section 20 of the Debts
Conversion Act 1931. On the 31st July, 1931, the Australian banks renewed Commonwealth treasury-bills in Australia for an amount of nearly £21,000,000. About two-thirds of those bills are held by the trading banks. On previous occasions, treasury-bills have been discounted at 6 per cent., but on this occasion the banks were asked to discount them at 4 per cent., the rate provided under section 17 of the Debt Conversion Act, being a 331/3 per cent. reduction compared with 22½ per cent. applying to ordinary debt. The banks asked whether, if they discounted the bills at 4 per cent., they would enjoy the same privileges in regard to income tax as if the Debt Conversion Act had been in operation onthe 31st July, 1931. It was found that if the acf had been operative on that date, the banks would not have obtained any reduction of tax, because section 20 of the act, which fixes the maximum rate of income tax which may be imposed on interest on converted loans, does not apply to interest on treasury-bills. When the measure was being finalized, it was decided to deal fully with treasury-bills under section 17 of the act, and subsection 2 of that section definitely states that the other provisions of the act shall not apply to treasury-bills. That has had an unexpected effect, because this differential treatment of interest on treasury-bills was clearly unintentional. It was intended that, if the banks discounted bills at the rate of 4 per cent., they should receive treatment similar to that accorded to those who converted ordinary bonds. They were not to be subject to special income tax on property, or to a further increase on the rate of normal taxation above the rates in. force in 1930-31. It is impracticable now to amend the Debt Conversion Act to meet the situation, so that a suitable provision should be inserted in the bill to amend the Income Tax Assessment Act. This amendment, in the opinion of the taxation experts, gives effect to the intention of Parliament when the bill waa before the House on a previous occasion.
.- In section 20 of the Commonwealth Debt Conversion Act it is provided that the interest on new securities taken in pursuance of the conversion authorized by the act shall not be subject to Commonwealth income taxation beyond that payable under the legislation referred to in the section, and shall not be subject to income tax under the law of a State. This new clause, by which it is proposed to amend the Income Tax Assessment Act, extends the exemption to treasury-bills which are Commonwealth securities held by the banks. It provides that, the interest on these bills having been reduced from 6 per cent, to 4 per cent., it shall be free from the taxation specified in section 20 of the Debt Conversion Act. One can understand the reason for applying that provision to the treasury-bills now current. They represent moneys lent to the Commonwealth, and are on the same plane as ordinary Commonwealth bonds. The insertion of this provision would only put the holders of treasury-bills on the same footing as the holders of converted bonds.
– It would simply bring them into line with others who have accepted a lower rate of interest.
– That is so. If honorable members examine the clause, however, they will see that the exemption from further taxation is not confined to the interest on treasury-bills on which the interest has been reduced, but may apply at the discretion of the Loan Council to treasury-bills issued on or after the 31st July, 1931.
– No matter what the rate of interest?
– Nothing is said about the rate of interest. I presume that, in exercising such discretion, the Loan Council would have regard to the rate of interest being charged, but that the liability of interest to income taxation should be dependent upon the decision of the Loan Council, introduces an element of bargaining regarding the applicability of the ordinary law of the land which is, perhaps, undesirable. In future, apparently, when accommodation is sought from the banks, it will be open to the Loan Council to say whether or not the interest payable on treasury-bills should be subject to certain forms of income tax. There is a very important principle involved. I. realize that this power to exempt interest from State and Commonwealth taxation will help the Government to get money on better terms, but we should not forget that treasury-bills may be issued to other institutions than banks. Dp to the present, the FederaIncome Tax Act has been administered by the Commissioner for Taxation, and if income is taxable according to the act, the tax must be paid. The object behind this amendment is good, but I doubt whether Parliament should delegate to the Loan Council authority to say when income tax shall be paid.
– When the Financial Emergency Bill was before the House, the group to which I belong opposed the proposal that certain sections of the community should be relieved of the payment of further State taxation. We considered that in accordance with the declared policy of the Government during this time of crisis no section should receive preferential treatment. We opposed the giving of such treatment to bondholders, and now oppose the giving of it, to private banking institutions. “ No such relief has been given to” other sections of the community affected by the plan. They must pay all the various kinds of taxation, direct and indirect ; but throughout these emergency measures a tendency has been displayed to go out of the way to protect those who, in my opinion, need no protection whatever. The financial institutions wield at the present time an economic power greater than that of Parliament itself, and on that ground alone, I oppose granting to them preferential treatment of any kind. It may be argued that, as we have extended concessions regarding income taxation to those bondholders who will convert their holdings, it is only logical to extend the same concessions to the private banks which have agreed to accept a lower rate of interest on the treasury-bills they hold. The honorable member for Gippsland (Mr. Paterson) said that this clause, proposed merely to bring all sections into line. When we were discussing the conversion of bonds, the argument stressed by honorable members opposite was that we should not make the conditions on bondholders too severe, because many of them were far from wealthy. Whatever force there may have been in that contention as applying to ordinary bondholders, the argument cannot by any stretch of the imagination be made to apply to the private banking institutions, which hold treasury-bills issued by the Government. Ever since the war these institutions have been reaping enormous profits from their trading operations. The figures are available, and cannot be refuted. During the war, and since, the banks have been in clover. They have, indeed, such a grip on the monetary system of this and other countries that they have been able to manipulate it to their own selfish ends. I contend therefore that, although certain concessions were granted to bondholders in a previous measure there is no reason for extending them now7 to private banks.
The Deputy Leader of the Opposition (Mr. Latham) questioned the wisdom of placing in the hands of the Loan Council power to determine whether or not the interest on treasury-bills shall be exempt from certain taxation. I also question the wisdom of such a course, ‘and I point out that if power of this kind is to bo vested in outside authorities independent of Parliament, we might as well dissolve both the Commonwealth and the State Parliaments altogether.
– There would be no harm in dissolving the New South Wales Parliament, anyhow.
– That may be the opinion of the honorable member for Warringah. I hold a different opinion, and I am entitled to do so. Just now it suits the honorable member for Warringah and his friends that certain bodies outside Parliament should dictate the policy of this Parliament and the State Parliaments; but the pendulum may later swing the other way, and then, if this practice has become established, the honorable member may have cause to regret that he did not protest against it now. To-day the Loan Council is the real governing body of the Commonwealth. Even when we were discussing in this Parliament the measures designed to put into effect the Premiers’ plan, the Prime Minister told us that we could not alter the proposals of the conference in any way, because they had been agreed upon by the Premiers and others present at that conference. This, the Parliament of the Commonwealth, is thus made subservient to a conference of Commonwealth and State Ministers. Under such conditions there was hardly any purpose to be served by discussing the emergency proposals in this Parliament at all. As has been pointed out, we have .probably not yet heard the last of emergency plans. Already the Premiers of South Australia, Tasmania and other States are talking of the failure of the present plan, and, no doubt, other plans will be submitted in due course, thus bearing out the truth spoken by mc and others associated with me when wis were discussing the present plan. It is wrong that the Loan Council should have power to say whether certain forms of income taxation shall or shall not be paid. The Government supporters have their way to-day, because they have a majority on the Loan Council which enables the policy enunciated by that body to be given effect. Perhaps within a few years this Parliament will have a different political complexion, and in that case the power that this Government uses to-day to suit its own interests will be used by us to suit our interests.
– If .taxation were at the nadir instead of at the zenith, there might be some ground for complaint in this matter ; but as no one expects income taxation to be any higher than it ia today, it seems to me that the concession’ now being made is more nominal than’ real. We are inclined to magnify this apparent concession. The remarks of the honorable member for West Sydney (Mr. Beasley) were somewhat irrelevant, as no real concession is being made at the present time.
– Will the honorable member deny that preparation is being made for such a concession?
– I deny that any preparation is being made for concessions to any section of the community. The only point that is arguable at the moment is whether tho Loan Council should be the deciding factor in a matter of this kind. I can conceive that some circumstances may arise in which it may be necessary to vary the procedure; but I am willing to trust tho Loan Council, particularly in view of its present composition and voting strength. I feel that the council has recently carried out important work in a business-like manner. Some one must be .trusted and regarded as an authority in determining the particular class of treasury-bills to which this clause shall apply. It is possible that the Commonwealth Parliament may be the best judge in a matter affecting the Commonwealth revenue; but I am not prepared to raise any serious objection to the Senate’s amendment.
Mr.FENTON (Maribyrnong) [11.49]. The honorable member for Warringah (Mr. Parkhill) has raised an important point. I, myself, do not care to hand over to any body, however reputable it may be, the duties that should be performed by this Parliament, and we should amend the Senate’s amendment to the effect that any determination of the Loan Council must be subject to the ratification of Parliament. I shall vote against the Senate’s amendment.
– It is realized and admitted that the duty which is imposed upon the Loan Council under this clause is, from a certain point of view, anomalous ; but the honorable member for Warringah (Mr. Parkhill) has rightly pointed out that this function has to be discharged from time to time by some responsible authority. I suggest that for practical reasons it it not a function that ought to be discharged by this Parliament as a whole. The particular class of treasury-bills to which the clause applies will have to be determined for the purpose of keeping guard over the rates of interest. The main purpose of the Senate’s amendment is sound, and not objected to. Theonly criticism of the amendment relates to the power which is given to the Loan Council; but I am informed - and, naturally, I have to depend entirely upon the views of experts - that this matter has been carefully explored to ascertain the best method of giving effect to the intention of the clause. I hope that the committee will accept the amendment.
Question - That the amendment be agreed to - put. The committee divided. (Chairman - Mr. McGrath.)
Majority . . . . 20
Question so resolved in the affirmative.
Motion agreed to.
Resolutions reported ; report adopted.
– I move -
That orders of the day Nos. 1 to 5 be postponed until after order of the day No.6, Government business.
I move this motion merely for the purpose of calling on order of the day No. 6, so that it may be discharged from the notice-paper. The Income Tax Assessment Bill to which it relates is deceased. It is proposed, after this motion is agreed to, to debate the tariff until the Appropriation Bill is received from the Senate.
.-I suggest that, as the dead are being buried, the Minister might also discharge from the notice-paper order of the day No. 7, relating to an old wheat bill which hat long since died. Order of the day No. 12, relating to the Commonwealth Bank Bill, and order of the day No. 13, relating to the Shale Oil Bounty Bill, are matters of which we have not heard for a long time, and shall not hear of again.
Question resolved in the affirmative.
Order of the day for the resumption of the debate from 22nd April (vide page 1161), on motion by Mr. Theodore -
That the bill be now read a second time, called on, and (on motion by Mr. Brennan) discharged.
In Committee of Ways and Means: Consideration resumed from the 11th June (vide page 2646), on motion by Mr. Forde -
That the echedule to the customs tariff be amended.
Item 136 (a) (Wire of 15 gauge, &c.) postponed.
– I should like the Minister to explain the changes that have been made in the duties on the articles included in this item.
.- The only amendment to the existing rates of duty is an increase on aluminium pipes and tubes from free British, 5 per cent. intermediate, and 15 per cent. general, to 15 per cent., 20 per cent., and 25 per cent. respectively. The Tariff Board recommended these increases because it considered that the duties on pipes and tubes should be the same as those on aluminium wire, bars, rods, strips and sections, and the Government agreed with that view.
Item agreed to.
Items 138 and 143 agreed to.
Item 145 (Iron and steel plates and sheets, &c.) postponed.
Item 148 (Leaf and foil).
– Gold leaf in rolls has been imported for many years, but it is now proposed to place a much heavier duty upon it. I do not regard this as a suitable industry for Australia. The rolls are obtainable only upon the continent, and the duty which it is proposed to impose upon them is practically prohibitive. It will not benefit any considerable manufacturing industry in Australia, and will not increase employment to any great extent.
– The honorable member for Warringah should confer with the honorable member for Balaclava (Mr. White) on this item.
– I confer with nobody on tariff items. There has been altogether too much conference on the various tariff items, and too little consideration of the general public. The report of the Tariff Board on gold leaf shows clearly that only one manufacturing firm would benefit by this duty, and that is a family concern which provides employment for only four persons who are not members of the family. I do not believe in using the tariff for the purpose of building up monopolies of this kind. Paragraph 10 of the report of the board, which refers to our sole manufacturer of gold leaf, reads as follows : -
Besides members of his own family he has at the present time two adult male gold beaters and two female gold cutters engaged in the production of gold leaf. The number of employees estimated to be necessary to produce the requirements of the Commonwealth are 80, and the wages would be approximately £260 per week.
Such an industry cannot, by any stretch of the imagination, be regarded as of national importance, and it is absurd that this Parliament should be devoting its time to it. The company is quite evidently not disadvantaged by reason of the existing duty, for it has been able, so far, to cope with outside competition. I protest against the granting of a monopoly in this industry to what is virtually a family concern.
.- This increase of duty has not been granted hurriedly. When the application for the increase was first made to me I hesitated before I referred it to the Tariff Board for investigation and report. However, I did ultimately submit the matter to the board which in its report made the following comments : -
The board sees no reason why the Australian requirements in gold leaf should not be produced locally. The raw materials are available in the Commonwealth and in the production of the leaf considerable labour is involved.
Gold beating is a trade-calling for special training and experience. In view of the fact that in the past the local demand for skilled men has been limited, and there has also been little opportunity for training operatives locally, it occurred to the board that if the desired additional protection were granted the local manufacturers might find themselves unable to produce to any great extent owing to lack of suitable labour. However, since the inquiry the board has been satisfied that the necessary labour would be available.
From the evidence and samples submitted the board is of opinion that the quality ‘of the local product is. satisfactory, and docs not lose by comparison with any of the imported leaf.
The evidence as to the competition as regards price is not altogether conclusive, but there is, in the opinion of the board, little doubt that, under normal trading conditions, the locally-produced’ leaf would be at a disadvantage in this respect in competition with the overseas leaf, more especially that from Germany.
An assurance has been given by the applicant that if the desired additional protection is granted, it will not take advantage of 8 llc] protection to increase its selling prices beyond those current at the time of the board’s inquiry, other than may bo found necessary by reason of. fluctuations in the prices of the metals used. He stated also that if the duties sought are imposed a reduction in selling prices is anticipated as the result of increased output. The evidence indicates that the selling prices of the local leaf have been reasonable, having regard to costs of production.
It is difficult to assess what the added cost to users would be if the desired duties are provided, but on the figures before the hoard it would appear that even if the prices of the leaf, current at the time of the inquiry, arc maintained, some additional cost to conBurners will be entailed. The board is satisfied, however, that such added ‘cost would, on the basis of the average selling prices of the imported leaf, be relatively small in comparison with the amount that would be expended in direct labour in the production of the goods locally. Furthermore, as already stated, the whole of the raw materials used are of Australian origin.
The board considers that the industry is worthy of encouragement and that the rates of duty sought by the applicant are justified by the circumstances.
Some honorable members have severely criticized me at times for disregarding the reports of the Tariff Board. On this occasion I have given effect to the board’s recommendation, but I am still subjected to criticism.
The manufacture of gold leaf was com menced in Australia some six or seven years ago. The history of the local company clearly indicates that headway cannot be made against the free importation of British gold leaf and foil, and a duty of 15 per cent, on foreign -importations. The company has achieved remarkable results considering the competition with which it had to contend. Seven operatives were employed in the industry prior to the imposition of the new duties, and it is estimated that 80 hands would be required to supply Australian requirements.
– What is the value of last year’s importations?
– The figures for 1929-30 were, gold leaf and foil, £17,536; and other, £83,733.
It will be seen that the new duty is only 10 per cent, on gold leaf from the United Kingdom, whilst 40 per cent, has been imposed on the foreign leaf, an increase of 25 per cent. A comparison of prices has shown that a 10 per cent, duty is sufficient to allow the local manufacturer to compete successfully against the United Kingdom. These duties should assure that practically the whole of the local demand will be supplied with gold leaf of Australian manufacture.
The Australian product, made almost wholly by hand, is of excellent quality, and many users were prepared to support the local industry, but owing to the action of their competitors in importing their requirements of gold leaf at a lower price than that for which the local manufacturer could supply, they were forced to emulate their example.
The rates now imposed are those recommended by the Tariff Board, which held an inquiry into the industry. It cannot bo said that the Tariff Board is a body which errs on the side of recommending unnecessarily high duties.
.- Thi3 appears to me to be one of our “backyard” industries. The value of our imports of gold leaf and foil in 1929-30 amounted to £17,536. At present, our one firm is producing slightly over 4 per cent, of what its proprietor estimates to be Australia’s requirements. So that it will be seen that the total market in Australia is approximately £18,237. Gold leaf is an article for which there cannot be a very extended market in the Commonwealth. It is stated in the Tariff Board’s report that, besides the members of his own family, the proprietor of this business has, at the present time, two adult male gold beaters and two female gold cutters engaged in the production of gold leaf, but that it is estimated that 80 employees would be necessary to produce the gold leaf requirements of the Commonwealth.
There are differences of opinion as to the quality of the gold leaf which can be made, but the critical point that I see in the report is this: The industry was established in Australia in 1924, and for the last three years the manufacturer has been producing an average of 10,000 leaves a week. He stated, in a sworn statement, that if the requested duty is granted there will be no increase in the present selling price, except, of course, that caused by the fluctuation of the gold market. The industry has been able to manufacture and compete with the imported article without a duty. It has the benefit of being on the spot, and of paying no exchange, which now amounts to 30 per cent. How in the world can it be suggested that such an industry can fairly ask for a dutyof 30 per cent. British, 30 per cent. intermediate, and 40 per cent. general tariff? Most of our fold leaf requirements come from the United Kingdom, their value being £9,595 in 1930, while our imports from Germany were, for the same period, £5,905. The manufacturer has been able to carry on without a duty, and develop the industry to its present standard, and there is nothing in the report to indicate that he will not be able to go further in future without a duty.
Mr.White. - The answer is that Germany would dump gold leaf in Australia at a price against which this firm could not compete.
– The opportunity has always existed for Germany to dump gold leaf in Australia. This is a very unconvincing report.
– I have always been told that if the Tariff Board inquired into an industry and recommended certain action its recommendations would be regarded as satisfactory.
– The Minister has never been told by me that if the Tariff Board makes a favorable recommendation I shall support it. Tariff Board reports are presented for the information and assistance of members of Parliament, not to control their opinions. Isee no reason why this industry should be given tariff protection. It is conducted in the electorate of the honorable member for Balaclava (Mr. White), and no doubt we shall hear an impartial statement from him on the subject. His contention as to dumping is pure speculation.
– If the honorable member will read paragraph 3 of the report of the Tariff Board’s summary, he will see that my statement is not mere speculation.
– That paragraph indicates that, without tariff protection, the manufacturer has built up his business to its present standing. I do no! accept the proposition that Australian industries are to be free from all competition. I am glad to learn that this industry established itself against competition, and it is far better that it should continue as at present, than that a tariff barrier should be set up on the assurance that there will be no increase in the selling price apart from fluctuations in the price of gold. Honorable members know that it is becoming practically a common form to say that there will be no increase in the selling price of protected commodities. 1 should think that there would not be any such increase in this instance. If the industry obtained the benefit of a duty and secured the local market, there should definitely be a reduction in price. It is always possible to find somespecial reason such as changed business conditions or the like to justify an increase in price. I admit that, generally, these are bona fide undertakings ; but, speaking generally, if under ordinary conditions of fair trading a man is able to obtain more for his commodity he will do so unless there is competition. I do not blame this manufacturer for endeavouring to obtain a duty; but it is surprising to me that the Tariff Board should have presented a report that is not justified by the evidence appearing in that report.
– I make no apologies for defending this little industry. The honorable member for Kooyong (Mr. Latham), who is ordinarily very fair, has on this occasion been distinctly unfair to this business, which he terms a “ backyard “ industry.
Are we, then, to be defenders only of the strong, and not of the weak? We have heard honorable members on this side who profess to be protectionists putting up a splendid case for strong concerns, and gallantly - fighting the efforts of the Country party to bring down duties. In this instance, because a new industry has been brought to Australia by an English family, it is not to receive any encouragement. Apparently the family may pack up and go back to Great Britain. So far as I know, there are no manufacturing industries in the electorate of Kooyong.
– Oh, yes; there are plenty.
– Then some day we may hear the Deputy Leader of the Opposition espousing the cause of some manufacturer in his electorate. a
– Why not speak to the item, and leave personalities alone?
– The honorable member opened the subject, and I am entitled to reply. I remember hearing the honorable member for Fawkner (Mr. Maxwell), who enthusiastically supported the remarks of the Deputy Leader of the Opposition to-day, championing the cause of a small straw hat factory in his electorate. So successful was he that the Minister altered the tariff.
This industry has asked for protection in the way that is laid down in the statutes of the country. The firm of H. Stagg and Company, which has its business at Ripponlea, in my electorate, intimated to me its intention of applying to the Tariff Board for protection. I asked what were the circumstances, was given information similar to that embodied in the report of the Tariff Board, and recommended that the firm should go ahead with its representations. The Stagg family came from Birmingham to start this little .industry in Australia. After all, it should not be dismissed as a “ backyard “ industry simply because it is small. We cannot expect to have many Broken Hill Proprietary Companies in Australia. With only a few hands, principally drawn from the family, the. firm began operations in the Commonwealth. As has been pointed out, the value of the total importations of gold leaf into Australia for the year 1929-30 was £17,536.
Faced with overseas competition, largely German, the firm made application for protection, and on reading the report of the Tariff Board, I am struck by the modesty of the applicant. Instead of asking for a duty of 50, 60, and even 100 per cent., as some larger and more powerful firms do, the applicant asked for merely a duty of 10 per cent. British, and 40 per cent, foreign, and that in relation to gold leaf only. Foil and other products mentioned in the Tariff Board’s report are still being admitted free. There are very few items in the tariff that are admitted free, or even at a duty so low as 10 per cent. The board recommended that the protection asked, for should be granted. Our aim should be not only to increase the population of Australia, but to encourage the establishment of new industries. This gold leaf industry has been established by an immigrant family, and its appearance here proves that industries will migrate from Europe Ja Australia if given reasonable protection
– The manufacturer is said to have an advantage by virtue of the adverse exchange, but the premium he pays on the gold purchased by him is equal -to the rate of exchange.
– That is so. This firm is capable of supplying Australia’s requirements of gold leaf, and it has promised to reduce the price of it. It is certain, also, that sooner or later it will have to -meet internal competition. As the firm can supply the local market, applied for only a modest duty, and promised a reduction of price, I make no apology for supporting an industry that deserves protection, and sought it in the right way.
– The honorable member for Balaclava (Mr. White) should have apologized for the weakness of the arguments with which he supported the claims of a small industry in his own electorate. If I were the proprietor of the industry I would expect my representative in this House to make out a stronger case in my favour. The honorable member said that we should support the weak as well as the strong. Presumably that is the sort of Christian appeal he makes to the commercial firms with which he has dealings, and I can imagine the replies he receives from hard-hearted business men. We are told that this duty is necessary to enable the industry to compete against overseas competition. The testimony of the Tariff Board is that the firm is already successfully competing, and during the last three years has produced at the rate of 10,000 leaves weekly. The industry is already established, without capital we are told, and is able to hold its own against outside competitors. Now the Minister proposes to grant to the firm a monopoly by shutting out all overseas competition. The honorable member for Balaclava says, that, notwithstanding the higher protection that is granted, prices will be reduced, but the Tariff Board says -
It is difficult to assess what the added cost to users would be if the desired duties are provided, but on the figures before the board, it would appear that even if the prices of the local leaf current at the time of the inquiry are maintained some additional cost to the consumers will be entailed.
That is a flat contradiction of the statement by the honorable member for Balaclava. This industry is too small to engage the serious attention of the committee; it can already compete without additional protection, and I am opposed to dutieswhich will merely create a monopoly by shutting out external competition.
– The Tariff Board didnot say that the firm will increase prices; it records that the firm stated that it will reduce prices.
– Is any other reply ever given to the stereotyped question by the board as to whether an increase of duty will result in the raising of prices? The plausible assurances of the applicants are invariably accepted without further investigation. No security against the increase of prices is asked for or offered, and I have evidence of wholesale advances following the imposition of new duties.
– Do not forget that the industry will employ 80 men.
Mr. ARCHDALE PARKHILL.There is no guarantee of that; we are told merely that if the firm supplied all the gold leaf requirements of the Commonwealth, 80 men would be employed. That is not a very bright prospect for men who are looking for work. No valid reasons have been advanced to justify the additional protection, and the committee would be wise to allow competition in the. industry to continue.
– There is an amusing aspect of this discussion. The industry to which the item relates is conducted in the electorate of the honorable member for Balaclava (Mr. White), and I have no quarrel with the representative of that division for supporting the claims of his constituents. As a general rule it is the duty of honorable members to put before Parliament the claims of the people whom they represent, a fact that the honorable member for Balaclava is sometimes inclined to overlook. He told the committee that the manufacturer of gold leaf interviewed him, and stated that he thought of applying to the Tariff Board for a protective duty. The honorable member cordially said in effect, “Yes, goahead. “ Then as an afterthought he asked, “ What are the circumstances of your industry?”. In other words, he recommended the manufacturer to apply for a duty without having any knowledge of the facts on which the claim would be based. Gold leaf is used principally for signwriting, and the stamping of leather. It may be that the additional duties will restrict the use of gold leaf, and I ask the Minister to inform the committee of their likely effect upon other industries. It is possible for the decrease of employment in them to outweigh greatly the additional employment given in the production of gold leaf.
Sitting suspended from 12.45 to 2.16 p.m. [Quorum formed.]
Bill returned from the. Senate without requests.
In Committee of Ways and Means (Consideration resumed) :
Item 148 (Leaf and foil).
.- Increased duties have been imposed without comment, although the increases may cost the community thousands of pounds.
– Name one item.
– Cotton piece goods. Immediately the duty had been increased, the wages of the employees in the industry were raised.
– Keep to the facts.
– I ask that that remark be withdrawn, because I regard it as offensive.
The CHAIRMAN (Mr. McGrath).I ask the honorable member for Moreton (Mr. Francis) to withdraw those words:
– I withdraw them; but I point out that the honorable member for Balaclava (Mr. White) said that honorable members had allowed duties to go higher and higher without comment, whereas the debate on some items occupied the greater portion of a day.
– I am dealing -with the request of a firm engaged in the manufacture of an article which waa on the free list. The firm was threatened with the danger of having to close its doors unless it received the protection asked for. The duty provided is less than that on almost any other item in the schedule. The arguments advanced in this chamber against the duty are, first, that this is a backyard industry, and not worth protecting; and, secondly, that since it has been able to keep going since 1924, it should not need protection. But honorable members cannot have it both ways. If this is a backyard industry, it is nevertheless a useful one, and we should be prepared to support an industry, however weak it may be, financially or otherwise, in preference to industries not yet established. I have frequently seen honorable members support a duty for a proposed new industry, the success of which was only problematical.
In reply to the argument that, as this industry has been able to keep going since 1924, it should not need protection, I point out that the duties on gold leaf that have been imposed are very light, being 10 per cent. British preferential, 30 per cent. intermediate, and 40 per cent. general, and the duties n.e.i. are British preferential free, intermediate free, and general 15 per cent. The object of the duties is to retard the business of continental manufacturers of gold leaf, to prevent them from dumping it into Aus tralia. The honorable member for Kooyong (Mr. Latham) said something about the Australian firm interested in these duties being engaged in business in my electorate. I consider that it is the prerogative of any elector to approach the member for his district on any matter. In this instance I referred the firm in question to the proper authorities, namely, the Tariff Board, as I hope any other honorable member would do. That board is composed of experts, who are competent to take evidence on a matter of this kind, and arrive at a decision. The request made to the board was most modest, and the evidence on the matter is clear. To continue the paragraph regarding the probable increase in price which the honorable member for Warringah (Mr. Parkhill) left unfinished, the board in its report remarked -
The board is satisfied, however, that such added cost would, on the basis of the average selling prices of the imported leaf, be relatively small in comparison with the amount that would be expended in direct labour in the production of the goods locally. Furthermore, as already stated, the whole of the raw materials used are of Australian origin.
The honorable member also stated that these duties would prohibit the importation of gold leaf, but I cannot imagine that that would be the result. The business will be shared between the British and Australian industries, and the Government will gain some much needed revenue. On examining the report of the Tariff Board one notices that the application for these duties was opposed by Alfred Lohmann, manager of Lohmann and Company, Hardy’s Chambers, Hunter-street, Sydney; David Logan Leslie, representing Ideal Agencies, Bond-street, Sydney; and by Arthur Peter Turner, commercial traveller, employed by Lohmann and Company. So, although one firm made the application for duty, as stated by the honorable member for Warringah, they were only opposed by two firms of importers, the third person being an employee of one of the importing firms. David Logan Leslie stated in evidence -
He is an importer of “ rolled leaf “, which is used in automatic machines for gold stamping. . . . While not offering any objection to increased duty on gold leaf in book form, he opposed the inclusion of gold foil in roil form.
It is clear, therefore, that one of the importing firms is in favour of the duty provided the commodity is imported in a certain form. It is surprising to find th at so much interest has been aroused in this small item; and I submit that, on the merits of the case, the duty should be allowed.
Item agreed to.
My omitting the whole of sub-item (c) and insertingin its stead the following subitem : - “(c) Wrought iron and malleable cast iron fittings for pipes, and cast iron fittings for pipes of less than 2 inches internal diameter -
Galvanized, per lb., British, 1s.; intermediate,1s. 3d.; general.1s.6d.
Other, per lb., British, 9d.; intermediate,10d. ; general. 1s; or as to the goods covered by paragraphs (1) and (2) of sub-item (c), ad val., British, 35 per cent. ; intermediate, 45 per cent. ; general, 50 per cent., whichever rate returns the higher duty.”
– In discussing the previous item, the Minister took great credit to himself in adhering to the recommendation of the Tariff Board, and in view of the rarity of such an occurrence, credit is certainly due. I point out, however, that the Tariff Board recommended that sub-item c be not altered. It relates to” wrought iron and malleable cast iron fittings for pipes, and cast iron fittings for pipes of less than 2 inches internal diameter “. The duty imposed in the November, 1929, schedule was directly contrary to the board’s recommendation. It is equivalent to an increase of 250 per cent. on galvanized iron fittings, and 200 per cent. on black iron fittings. Since these extortionate increases have been made, the Australian manufacturers have increased their prices on two occasions. The extent of the increase may be judged by the following example: - In November, 1929, the price of half-inch galvanized “T’s “ made in Australia was 9d., less 65 per cent., or 3.15d. net. On the latest price list, the price for the same article is 9d., less 50 per cent., or 4?d. net, an increase of nearly 50 per cent. All the prices of locally-made fittings have been increased from 20 per cent. to 50 per cent. This is particularly interesting in view of the promise given by many firms that, if increased duties were granted, increased prices would not result. In this connexion, the following extracts from the evidence given by manufacturers at the inquiry made by the Tariff Board are interesting : -
Mr. BROOKES. Are you making a loss now? No.
Mr. MASTERTON. If you got the additional duty, would you still further reduce your prices on the basis of the increased output? - If we could get an increased output, we should certainly reduce our prices. We would do so the same as we did last year, when we dropped our prices considerably.
Mr. BROOKES. You think that reduction in price would tempt the people who now purchase the imported fitting to buy the local article? I am perfectly sure it would, because 75 per cent. of the plumbers would buy on price, not on quality.
This report was issued in 1927, I admit, but it is the most recent available on the subject.
– World prices have varied considerably since that report was issued.
– At the conclusion of the same inquiry a manufacturer was asked whether he could make fittings of 2? inches or over at a price which could compete with the imported article. His reply was that he could make pipes of over 2 inches diameter at a price considerably below that at which similar pipes could be imported, and he added, “ There is no duty on such pipes now and, we can lose our overseas competitors.” No request has been made for a duty on pipes over 2 inches in diameter, and it is on record that the Australian manufacturers can successfully compete against the imported pipes.
In some way or other a comma, which should not have been there, has crept into this item, and has produced an effect not originally intended. The item now reads -
Wrought iron and malleable oast-iron fittings for pipes.- and after the word “ pipes “ comes the comma. It then goes on - and cast-iron fitings for pipes of less than 2 inches internal diameter.
The presence of this comma has induced the department to interpret the item to mean that wrought iron and malleable east-iron fittings for pipes of all sizes shall pay the duty, the limitation of less than 2 inches applying only to cast-iron fittings. The item should be worded, “ Fittings of wrought iron, malleable cast iron, and cast-iron for pipes of less than 2 inches internal diameter.” Then the meaning would have been clear.
The imposition of a duty at a specific rate per lb. on this item reveals an extraordinary lack of consideration of the effects of such a duty. Of malleable castiron fittings, there are 5,000 different varieties and sizes carried in stock in Australia, while the range manufactured in Australia comprises only 261 lines. On the remainder, duties which can only be described as fantastic, have to be paid. As the value per lb. weight of the fittings varies immensely with the different varieties, a duty of ls. per lb. might represent anything from a moderate impost up to 600 per cent, or 700 per cent, on the value of the goods. If the users have the alternative of buying locally-made fittings, the hardship imposed upon them would be restricted to the excess coat of the local article ; but as only 261 lines out of 5,000 stocked in Australia are produced locally, it has been necessary, during the past eighteen months, to pay these absurdly excessive duties of up to several hundred per cent, on those articles which have to be imported. For most of the types of fittings not made in Australia, the demand, though regular, is not large. For this reason the manufacture of anything approaching the entire range may never be attempted here, and certainly will not be attempted while costs of production in Australia render the exportation of such goods impossible.
These fittings are used for either water, gas or steam pipes. The sufferers, therefore, are those engaged on building, water, irrigation, and gas undertakings. The farmer installing pumps, windmills, &c., and irrigating his land, is a particularly heavy loser by these duties. The fittings are an absolute necessity to him. His requirements are usually in the larger sizes, of which the proportion manufactured locally is even less than of the sizes below 2-in. diameter. There is no justification for the proposed duties, amounting to ls., ls. 3d. and ls. 6d. per lb. on galvanized iron fittings, and to 9d., 10d., and ls. on black fittings. The Tariff Board recommended that there should be no alteration in the ad valorem duty of 35 per cent., 45 per cent., and 50 per cent. I move -
That the item be amended by adding th» following to sub-item (o) : - “And on and after 7th August, 1031 - Fittings (wrought iron, malleable cast iron and cast iron) for pipes of less than 2 inches internal diameter, ad vol. - British, 35 per cent.; intermediate, 45 per cent.; general, 50 per cent.”
– I support the amendment of the honorable member for Gippsland (Mr. Paterson). It is proposed in this item to change the duty from an ad valorem to a fixed duty of so much per lb., and its effect will be to increase the duty, in some instances, by as much as 400 per cent. The Government appears determined to impose this duty, irrespective of whether the articles are being made here, or of the uses to which they are being put. The new duties have been in operation for seventeen months, but still only 261 of the 5,000 varieties concerned are being manufactured locally. Owing to the variations in weight relative to value, the goods affected are totally unfitted for the application of a duty based on weight. The duties impose an almost intolerable burden on the primary producers, because the articles subject to the duty are used wherever water, gas or steam pipes have to be installed. The farmers who install pumps and windmills, and who irrigate their land, will be severely affected. The duties are being raised, in some instances, by as much as 600’ per cent, and 700 per cent, in order to protect the local manufacturers, although it has been shown that they make only 261 items out of a total of 5,000. The Minister stated, with great satisfaction, that he had acted in accordance with the recommendation of the Tariff Board regarding the last item, but what has he to say when confronted with the recommendation of the board, as quoted by the honorable member for. Gippsland, that there should he no variation of the duty on this item.
– The report from which the honorable member for Gippsland quoted was issued four years ago; the one upon which I am acting was issued only three months ago.
– Has that later report been circulated? The only report available is that issued in 1927, and in that report the board recommends that the duty should not be varied. If the Minister has a report issued only three months ago, copies of it should be in the possession of every honorable member in this House who is interested in the subject. Tariff board reports are not the exclusive property of the Minister; they are the property of this House. Unless the Minister produces the report of which he speaks, no credence can be given to his mere statement that he is acting in accordance with the recommendations contained therein. It is a gross misuse of parliamentary privilege for the Minister to retain a report of the Tariff Board, and to refuse to reveal its contents to other honorable members. The amendment of the honorable member for Gippsland (Mr. Paterson) is a reasonable one, more particularly with regard to the misplacement of a comma, which enables the department to interpret the provisions of the act in a way not originally intended. At the time the Tariff Board made its investigation the duties asked for were 9d., 10d., and ls. per lb. The duties are now ls., ls. 3d., and ls. 6d. per lb. galvanized, and 9d., 10d., and ls. other. What justification can there be for this increase of duty? If the Minister has in his possession a report which shows that there has been a change of opinion on the part of the Tariff Board, then in simple justice to the board he should produce it.
– If there is no such report, the board, in view, of the changed conditions, should have been asked for an expression of opinion on this item.
– If there is no such report the Tariff Board should have been asked to make another investigation. The report now available was made in 1927, and the duties were imposed in 1929. Since then conditions have changed. This increase of duty is entirely unnecessary. It imposes a severe disability, not only upon the primary producers and those engaged in the building trade; but also upon other citi zens, who are being called upon to pay prices considerably in excess of what they are entitled to pay. Although it is being constantly reiterated that the increased duties are not taken advantage of by the manufacturer in increasing his prices, let me say that in 1929 the price of a half -inch galvanized T made in Australia was 9d. less 65 per cent., or 3.150d. net. In the latest price list the price for the same article’ is 9d. less 50 per cent., or 4£d. net - an increase of nearly 50 per cent, in the net price. Since the imposition of the new duties all local prices have been increased from 20 per cent, to 50 per cent, to the consumer, the home builder, and everybody engaged in plumbing in its various ramifications, including gas and electrical fittings. That action is unfair, unjust, and unwarranted.
.- I assure the honorable member for Gippsland (Mr. Paterson) that I shall examine the amendment that he has moved. As it is impossible for me to do that during the short time at my disposal before Parliament adjourns, I am prepared to postpone the item, and to bring it forward so soon as we meet again, say, in five weeks’ time. In the meantime, I shall fully consider his representations.
Malleable iron fittings are manufactured in Australia from raw materials wholly of Australian origin, and the Australian factories are capable of producing Australia’s requirements of fittings up to and including six inches. Cast iron fittings for pipes of the size covered by the item are also manufactured in Australia, but wrought iron fittings are not at present produced locally. Wrought iron fittings definitely compete with malleable fittings produced in Australia, and as a general rule it can be stated that for every ton of wrought iron fittings imported an. equivalent quantity of Australian malleable fittings is displaced. Representatives of gas companies .claim that malleable fittings are not suitable for gas reticulation in view of the greater liability to corrosion, and the fact that they will not stand the same bending strain, but local manufacturers are emphatic that malleable fittings are more suitable than wrought iron fittings for gas reticulation, and are prepared to submit their fittings for test alongside any imported malleable steel or so-called wrought-iron fittings. It is stated also that gas companies used Australian malleable fittings during the war period when imported fittings were not available, and ‘ did not submit any complaint regarding the unsuitability of the Australian fittings.
A3 an indication of the fact that Aus tralian manufacturers were losing business, figures covering sales made by Edward Weir Ltd., Marrickville - now E. W. Malleable Fittings Ltd. - and wages and salaries paid for the years 1926-1929 are quoted hereunder : -
After the amendments made to this item by the tariff resolutions of November, 1929, and December, 1929, this firm increased its output by 30 per cent., and increased its employees to the same extent. This state of affairs continued until July, 1930, when the effects of the depression caused a diminution of output. At present the output is only half of what it was for the preceding twelve months. Stocks are gradually being worked out in certain sizes, and it will not be long before they will have to be replenished, when it is expected increased production will result. The firm of Andrew Thomson & Scougall Ltd. increased the number of its employees by 56 per cent, immediately after the increased tariff was imposed, but owing to the depression the company has been working half time with a reduced staff for the past few months. It is anticipated, however, that with the restoration of normal times, the staff will be at least quadrupled.
The Tariff Board reported on the industry in 1927, and recommended no variation in duties, as a comparison of prices indicated that Australian fittings were not being undersold by the imported fittings. Subsequent to the receipt of the board 3 report in 1928, Australian manufacturers were compelled to make substantial reductions in prices - Edward Weir Ltd. had reduced the list price of their black fittings by 14 per cent., and that of their galvanized fittings by 26 per cent. - in an endeavour to maintain trade. Later in 1928 the Tariff Board held an inquiry into the question of the application of the provisions of the Industries Preservation Act to malleable tube fittings, and as a result’ of the board’s report, these fittings of German origin were gazetted under section 4 of th, Industries Preservation Act, as the evidence indicated that they were sold for export at a price less than the domestic market price.
– Can the Minister say whether the reduction of 14 per cent, in the price of the Australian manufacturer still left him a fair margin of profit?
– So soon as that reduction was made, the importer of German fittings reduced his prices correspondingly. The Tariff Board then reported that the anti-dumping provisions of the act should , De applied in respect of imported fittings, otherwise the Australian manufacturer would be unable to compete with the German manufacturers. The evidence before the Tariff Board in 1927 indicated that the quality of the Australian fittings was satisfactory and in accuracy of machining, local fitting* compared favorably with the imported product. [Quorum formed.’]
The honorable member for Warringah suggested in his speech that I had in my possession a report of the Tariff Board on this subject which I have not made available to the committee; but that is not so. I thought that I had made it clear that I have followed the recommendation of the board of April, 1931, and have refused to follow its recommendation of 1927.
I am at all times willing to give consideration to representations made to me in respect of any item in the tariff schedule. The honorable member for Gippsland (Mr. Paterson) has submitted his amendment in a reasonable way, and I assure him that I will have the whole subject re-examined during the coming recess with the object of ascertaining whether the duties which he has suggested would give reasonable protection to the Australian industry, prevent the dismissal of men at present engaged in this work, and make possible an extension of operations. In these circumstances, 1 move -
That item 152 (c) be postponed.
Mo’tion agreed to.
– The Government is proposing to increase the duties on item 152 d from, ad valorem, free British preferential, 5 per cent, intermediate, and 10 per cent, general, to ad valorem 40 per cent., 55 per cent., and 60 per cent, respectively. Such a large increase should not be made except for very substantial reasons, and no such reasons have been given by the Minister. I have been furnished with a statement, signed by eight representative firms which use this tubing in their businesses. It reads as follows : -
Welded conduit tubing is, as far as we cao ascertain, manufactured in Australia only by the Amalgamated Conduits Proprietary Limited, of Melbourne. This firm is now producing i-in. and J-iu. sizes, and we are informed that they will shortly have 1-in. in production. With regard to the other sizes in common demand, i.e.., li-in., lj-in., and 2-in., we aru informed by a representative of the manufacturers that these will not be in production for at least six months, and even then it has not yet been decided whether any or all of these sizes will be produced.
The prices at which the Melbourne manufacturers are offering their -in. and i-in. conduit tubing to us as wholesalers of electrical materials is considerably less than the prices at which we could import from English manufacturers, exclusive of customs duty.
Welded conduit tubing is used extensively for the installation of electrical connexions to a vast range of electrical appliances, including the following: - Motors and generators, transformers, switchgear, heating appliances, lighting installation, and particularly where outdoor installations of any typo are necessary.
Amongst the users of this type of tubing are the following: - Factories, industrial undertakings, electric light and power authorities, government departments, e.g., Railways and Public Works Departments, water supply and sewerage authorities, large commercial buildings, &o. lu most installations of lighting and heating appliances in private residences this tubing is also necessary.
We therefore strongly protest against the imposition of the new rates of duty, which we consider altogether unnecessary for the following specific reasons: -
The Australian manufacturers sell already a.t a price lower than the imported price, exclusive of customs duty.
The Australian manufacturer is not producing the full range of sizes required. He possibly may not manufacture the larger size at all, and the imposition of duty on these sizes will Ibc an unfair burden without any corresponding benefits.
If advantage is taken of the duty by increasing prices of the Australian-made tubing, the cost of installation and use of electrical machinery and appliances in a great number of useful and necessary works will be considerably increased.
In view of the fact that the goods of this class which are already being manufactured in Australia can be sold for less than similar imported goods, exclusive of customs duty, there is no reason why any duty should be imposed. Certainly no additional protection is required by those engaged in the industry.
Another reason why these duties should not be imposed in this general way is that certain sizes of conduits required in Australia are admittedly not being manufactured here. In fact, it is doubtful whether the manufacture of them will ever be undertaken, and, if it is undertaken, whether it will be profitable. In these circumstances I cannot understand why the Government should inflict- these veryheavy increased duties on the users of these pipes, for the only effect will be that the prices which the consumers will hove to pay for these goods will be increased substantially.
Tubing of this description is required for the installation of electrical machinery and appliances of all kinds, and if these duties are insisted upon, the cost of such installations must be heavily increased. We are doing our best to reduce the cost of production . in this country by the introduction of electrical appliances and machinery of all kinds, for the purpose of helping the Australian citizens to do their work as comfortably and as efficiently as- possible. Apparently, the Government has no desire to assist in the achievement of these ends. It certainly seems to have no desire to extend the introduction of electrical appliances in homes for the relief of housewives and domestic workers. Its only desire, apparently, is to increase prices to the Australian public, irrespective of whether the added imposts can be justified or not. The statement from which I have already quoted also contains the following observations: - (4.) The imposition of the proposed duties is in our opinion altogether unjustified as the local manufacturer has not yet proved that he can successfully manufacture this commodity, particularly so as he is entirely dependent upon the importation from abroad of the steel strip necessary for the manufacture which gives employment to a very infinitesimal number of people only.
There is only a comparatively small demand for these products, and it is most unlikely that large amounts of capital will ever be invested in the manufacture of them in Australia. In these circumstances, increased duties cannot be justified. There is no Tariff Board report to assist honorable members to form an opinion on this subject, and we are entitled therefore to accept the views of the users of these pipes which are definitely against any increase in these duties.
– I remind the honorable member for Warringah (Mr. Parkhill) that there is provision under the departmental by-laws for the Minister to admit free any welded pipes and tubes, or any other commodities included in the tariff schedule that are not being manufactured in Australia.
– What about the Manly gasometer on which duty to the amount of £2,000 was imposed ? It could not be manufactured here, yet the action of the Government will have the effect of increasing the price of gas to the people of Manly for all time.
– If the honorable member will submit that case to me I will give it personal consideration.
The sum of £15,000 has been invested by the Automatic Tube Company Limited, of Melbourne, in plant for the production of these tubes, and it is in a position to produce annually tubes to the value of £25,000. The applicants for the increased duty hope to be in a position eventually to supply the whole of the Australian requirements of welded conduit tubes, the value of which they estimate to be £35,000. At present, very little welded conduit of local manufacture is being sold, because of the fact that very few new buildings are being erected, and practically all importers are well stocked. When trade conditions brighten there is little doubt that the volume of business will quickly exhaust existing stocks, and enable the local manu facturer to meet the demands with welded conduit at prices satisfactory to users.
The rates mentioned in the schedule in respect of 152d are the same as the deferred rates under 152a. Prior to the incorporation of a special heading for automatic welded conduit tubes, these goods were classifiable under item 152a, and the applicants would have had to wait for the imposition of the deferred duties, which in turn depended on the progress of the wrought iron and steel pipe and the tube industry, before they could hare secured the desired protection. I think that the committee should agree to the item.
,- I oppose high duties when applied to phantom industries such as this. Conduit tubes are essential for the construction of city buildings and for general building purposes, and if these duties are agreed to, there will be a further retardation of. building activities. From what the Minister has told us, this industry has not- yet been established, and it is problematical whether it will be. Already excessive taxation is adversely affecting the building industry, and when primage duty, sales tax, and shipping charges are added to this proposed 40 per cent, duty under the British preferential tariff, the additional impost amounts to over 100 per cent. In difficult times like the present, unnecessary duties such as these could well be waived, and protection given only to the industries which have established themselves.
– I should like to have heard a reply by the Minister to the arguments of the honorable member for Warringah (Mr. Parkhill). The Minister made a statement indicating in rather general terms the reason why this increase in duties is proposed by the Government. The honorable gentleman failed to deal with the specific and very important remarks of the honorable member for Warringah. This is a proposal to increase the rates of duty on welded conduit pipes and tubes to 40 per cent. British, 55 per cent, intermediate, and 60 per cent, general tariff, from free, 5 and 10 per cent, respectively. Those are very sudden jumps of duty, and one might expect some particularly special reason to justify their imposition on an article which enters into the construction of nearly every building in ‘ our cities and towns, and many of the buildings constructed in the country. The honorable member for Warringah said that the users of this article have informed him that the prices at which the only manufacturer in Australia is offering f-in. and $-in. conduit tubing are considerably less than those at which tubing could be imported exclusive of the customs duty. If that is so, it is plain that the matter should be very carefully examined before the proposed increases are agreed to.
It is hardly a matter for wonder that the existing depression in the building trade has been greatly aggravated by the increased cost of many building materials and appliances, resulting from the operation of this schedule. During the last three years building has decreased in Melbourne by 85 per cent., over a tenmile metropolitan radius. I am aware that there are many reasons for that, and I - do not suggest for one moment that any particular impost or series of imposts in the tariff is entirely responsible for the position. However, having regard to the enormous amount of unemployment in the building trade, it is as important to consider that trade, as it is- to consider a relatively small industry such as this. In sayang that, I am not decrying the industry. I am glad to see it established in Australia. At the same time, its interests and those of scores of other minor enterprises, cannot be compared with the interests of the building industry, either in respect of the number of men- to whom employment is given or to the benefits conferred on the community. Sales taxes, primage duty, tariff increases and the general depression have all had their effect on the building trade. Numerous tariff increases are being made for relatively small industries, which will inevitably increase the burden of the Australian consumer, without conferring a corresponding benefit on the industry concerned.
I admit that I do not approach these matters from the point of view of the Minister. Apparently he considers that, prima facie, any request fbr protection is to be granted. In these matters one has to consider and balance the advantages and disadvantages. In this case it is not contested by the Minister that certain important sizes of welded conduit pipes and tubes are not manufactured at present’ in Australia.
– The Government has already, allowed a shipment of the sizes not manufactured here to come in under the old conditions. There is no point in applying the impost to tubes not manufactured in Australia.
– The Minister says that an admission may be made under by-law. I recognize that there has to be a certain amount of flexibility in regard to some customs items, but the provision in the tariff under which free admission may be granted of articles which cannot be commercially manufactured in Australia is the source of as much difficulty and misunderstanding as any other provision in our law. In some cases it may be that it is impossible to have a customs classification which is sufficiently precise to obviate the necessity of occasionally utilizing ministerial discretion, but wherever it is- possible the items should be precise and particular.
If it be . a fact that certain conduit pipes above f-inch are not made in Australia, this item should, for the present, be confined to sizes manufactured here. It is all very well to say that applications can be made for admission under by-law. Since I have been in this Parliament I have had brought to my notice a number of cases of persons importing goods who looked at the tariff schedule, saw an item there covering what they were importing, and paid the duty in the ordinary way. Of course it was accepted. I do not suggest that the officers of the Customs Department are to say to importers, “You should make an application to get this in free “. That is not their job. They are there as revenue collectors. A considerable time after the importers discover that, had an application for admission free been made, it might have been granted. In my experience, the department has not looked kindly at applications for retrospective free admissions. The result is that, in order to protect themselves, importers have had to employ customs agents. It would be better to confine this duty to the articles which are at present made in substantial quantities in Australia.
Balance of item agreed to.
Item 153 (Cast iron pipes, &c.).
.- I should like to know the significance of these duties. It is always difficult for one who is not familiar with a particular industry to know what the ad valorem equivalent of a specific duty amounts to. Here we have specific duties of 48s., 65s., and 85s. per ton proposed. What do they amount to as ad valorem duties?
.- The importations of these goods have been recorded separately only for the last two years, and practically only since the increased duties have been in operation; consequently the figures before honorable members do not indicate the extent of the importations prior to the increases. The proposed amendment is made to give further protection to the manufacturers of cast-iron soil and rainwater pipes from 2 inches to 6 inches internal diameter, and fittings therefor, and the rates proposed represent increased British preferential and general tariffs by 20 per cent., 15 per cent. respectively. No alteration is proposed on the pipes and fittings covered by sub-items a and c. The Tariff Board furnished a report in October, 1927, and recommended the duties incorporated in the present schedule. The board expressed the opinion that the industry could not compete, owing to the low landed duty-paid cost of British cast-iron soil and rainwater pipes and the higher Australian manufacturing costs due to high wages, short hours, and greater costs of raw materials. In January, 1930, information furnished by the . Iron” Foundry Employees Association indicated that only 20 pipe moulders were employed in Victoria out of a total of 300. In Brisbane one firm which employed 128 men early in 1928, was in January, 1930, employing only 60.
– Was that due to the cessation of waterworks construction or to the competition of imports?
– It was partly due to the prevailing depression and the consequent decreased demand for pipes and partly to the big slump of world price levels and the dumping of products from Great Britain and other countries.
Prior to the imposition of the increased duties, Australian manufacturers were relying for their orders mainly on the preference given by municipal councils and like bodies to products manufactured in Australia, but it was found that because of the financial stringency many of these bodies were placing their orders in the cheapest market. Only by appealing to their patriotism were orders for local firms obtainable. The importation figures show that the ad valorem duties are effective inasmuch assuch demand as exists is being supplied by local manufacturers.
.-I have no objection to the proposed duties. This industry is already well established in Melbourne; for the last 30 years local foundries have been producing all requirements, and have supplied pipes to some of the biggest waterworks in the Commonwealth, including the goldfields water scheme in Western Australia. There is plenty of competition, and prices are keen.
– Nevertheless prices art prohibitive.
– They are reasonable and the quality is all that can be desired. The industry gives employment to a large number of men, and is deserving of every encouragement by the Government.
Item agreed to.
– At this stage I should like the committee to reconsider item 114g.
– On a point of order. Should not the Minister move for the recommittal of the item after the discussion of the whole schedule has been completed ? The honorable member for Balaclava (Mr. White) was not permitted to have an item reconsidered. The bringing on of an item out of its order appears to be unfair to members who are absent.
The CHAIRMAN (Mr. McGrath).The honorable member for Balaclava was rightly ruled out of order, but I discovered subsequently that there were precedents for a Minister obtaining leave to have an item reconsidered without a formal motion for its recommital. The Minister will have to obtain the leave of the committee to deal with item 114.
– Can any honorable member ask for leave to have an item reconsidered ?
– It has not been the general practice for private members to be granted such leave. Is it the pleasure of the committee that item 114g be reconsidered?
Honorable Members. - Hear, hear !
Item 114 (g) (Hoods other than of felt).
.- By a motion introduced on the 29th July, 1931, item 114g was amended to read -
Hoods other than of felt -
So far as panania and pandan hoods are concerned, the posi tion is the same as that obtaining when the committee passed an amendment of the item on the 5th June last. The item, as originally introduced by a motion on the 11th December, 1929, read -
– Are the consumers equally satisfied?
– I feel sure that the item, as amended, is in the interests of the consumers.
– Have they been consulted ?
– I am their representative. It was found that the item of the 11th December, 1929, imposed hardship in the case of certain hoods which, through not coming within the terms of sub-item g, fell under sub-itemf, and became liable to a duty of 60s. a dozen. The amendment already made in the subitem by the committee did not quite meet the situation; but the wording now proposed will meet the conflicting interests of the millinery trade in both New South Wales and Victoria, and certain hoods of a class not made in Australia will now be admitted at 24s. per dozen, in lieu of 60s. When I was in Melbourne recently T visited the factory of Headwear Proprietary Limited, one of the largest establishments for the manufacture of women’s hats, and the manager told me that he is well satisfied with the item as amended a few days ago. Whereas his factory employed only seventeen hands in 1929, it now employs 200, and they are working overtime. After a good deal of trouble, the department has drafted an item which, apparently, meets with the satisfaction of the manufacturers in Sydney and Melbourne.I move -
That thesub-item be amended by adding the following: - “And on and. after 30th July, 1931-
Hoods other than of felt -
1 ) Panama and Pandan plaited from the tip of the crown to the base of the brim and which do not contain any thread straws or other material joining the plaits or other material together, ad val., British, 45 per cent.: intermediate, 55 per cent. : general,60 per cent.
Other, per dozen, British, 18s.; intermediate, 20s.; general, 24s.; or ad val., British, 45 per cent.; intermediate, 55 per cent.; general, 60 per cent., whichever rate returns the higher duty.”
.- If the increase of employment to which the Minister referred could be attributed to the latest amendment of the item, its claim to our approval would be much reinforced; but that can hardly be so, as the amendment was introduced only a few days ago. I do not profess to be an expert on the subject of fur, felt, panama, and pandan hoods. The Minister has assured us that everything is all right; but I wonder how many honorable members who heard his explanation understand what they are asked to do. We are informed by the Minister that the milliners of Sydney and Melbourne concur. I have no suspicion of them ; but, naturally, they will look after their own interests, and for that I do not blame them. In reply to a question asked by the honorable member for Warringah (Mr. Parkhill), as to whether the consumers are satisfied, the Minister made one of the best jokes of the season by saying that he was their representative! The only evidence before the committee is that the milliners who are directly affected by these changes approve of them; so does the Minister; and possibly some honorable members know what they mean. I unfortunately am quite unable to make up my mind regarding the merits of the proposal. If the committee is not being left in the darkness, it is being asked to legislate in rather dubious twilight.
– I am of the same opinion as the* Deputy Leader of the Opposition (Mr. Latham). The Minister suddenly informs us that he has seen certain manufacturers in Sydney and Melbourne, and they are agreeable to the proposal.
– No; I sent one of the tariff experts to see them.
– The tariff expert has made his report, and the Minister is apparently satisfied to ask the committee to vote for the duty. After all, tariff experts are not experts on matters of policy. I suppose that they do not take into consideration the incidence of duties, and their effect on the consumers.
– The Minister claims to represent the consumers, but how many nf them were consulted on this matter ?
– The Minister’s claim that he represents the consumers is the greatest joke he has perpetrated this session. All we know is that a departmental expert has come to an arrangement with manufacturers in Sydney and Melbourne, and they have agreed that certain duties are fair. After all, the expert is a departmental officer. Is that the way in which a tariff schedule should be prepared? These manufacturers have fixed up their own duties.
– No; on one line there is a reduction of the duty. . The manufacturers were consulted by the officer regarding technical details. The officer
Drought the matter before the Government, which then came to its decision.
– The rapid statement made by the Minister is not sufficient. I ask that consideration of the item be postponed.
.- I suggest that the Minister should postpone the item. It appears that there is to be added to item 114 o a certain type of hats which were not formerly included. Instead of there being merely an ad valorem duty, there is to be a fixed rate of 18s., 20s., and 24s. per dozen. It is suggested by the Minister that this meant a reduction in duty, but we have no proof of that. If the 24s. had been intended to apply to item 114 v, which relates to felt hats, in respect of which there is a fixed as’ well as an ad valorem rate, going up to 60 per cent., one might have regarded the item with a certain amount of satisfaction; but we have a fixed rate of 18s., 20s. and 24s. per dozen on an item on which formerly there was no fixed rate. This requires further explanation by the Minister, before the committee can accept his assurance that this represents a reduction of the duty.
.- I ask the Minister whether this item affects a matter which I have placed before him by correspondence within the last three or four days? A manufacturer of hats communicated with me stating that the effect of the Government’s tariff proposals would be practically to close his business.
– Reference was made to. the anomaly which is now being remedied.
Amendment agreed to.
Sub-item, as amended, agreed to.
Item 105 k - by leave - reconsidered.
.- The honorable member for Balaclava (Mr. White) desires to deal with this matter on behalf of the honorable member for Henty (Mr. Gullett), who, unfortunately, is sick in hospital. I take this opportunity of expressing the hope that he will be sufficiently recovered to resume his place in this chamber when Parliament re-assembles five weeks hence. [Quorum formed.’]
.-As the Minister has mentioned, this is a matter that was to have been taken up by the honorable member for Henty (Mr. Gullett) concerning an industry in his electorate; but on account of his illness I am dealing with it. On artificial silk and silk in the piece there are duties of 25 per cent., 30 per cent., and 35 per cent., which apply to all articles of silk; hut necktie manufacturers have been in the habit of buying the cheaper class of silk, and the increased duty is seriously interfering with their business. I have received a letter from the Britannia Tie Company, Melbourne,which states -
The Associated Tie Manufacturers of Victoria and the Associated Tie Manufacturers of New South Wales have requested the Minister to put our raw material into a sub-item 106 (d), thereby separating our silk and silk and art-silk piece goods from the general item ofsilk piece goods. Under the present item, our raw materials are dutiable at 30 per cent. for silk, and 35 per cent. where it contains artificial silk. The Minister has viewed this factory, and at my special request he sent officers of the Customs Department to investigate the books of the various tie manufacturers, who were able to prove that they were not able to carry on under the present rate of duty.
Most honorable members will applaud any reduction of the tariff, which is now pressing heavily on all sections. In the case which I have brought under notice, the factory has been established for many years. The workers have been employed under ideal conditions, but they have been reduced to a low ebb because of this increased duty. In Canada, there is a special duty covering silk for the manufacture of neckties. The position might be met by an item on the following lines - “Woven fabrics, wholly or in chief part by weight of silk or artificial silk, or both, imported in the web in lengths of not less than five yards each, by manufacturers of neckties”. A duty of, say, 10 per cent. less throughout would be appreciated, and would allow these factories to resume. There would be no loss of revenue, but on the contrary a probable increase through the stimulation of business in this industry.
– This matter was brought to my attention by the honorable member for Henty (Mr. Gullett) in whose electorate, I think, one of these manufacturers lives. I told him that I would instruct an investigating officer of the department to examine the manufacturers’ books, to see what position they were in, and that I hoped to be able to come to a decision before consideration of the tariff was resumed.
– That is an extraordinary power for the Minister to possess.
– I extended the same courtesy to the honorable member for Gippsland (Mr. Paterson) in regard to a matter he brought before me. The tie manufacturers in Australia have been having a bad time lately.
– They, are enjoying a considerable amount of protection under the tariff.
– Yes ; but their raw material is not manufactured in Australia, and they have to pay high duties on it. In the Canadian tariff there is a special provision for dealing with cases of this kind. In order to meet the position, I have agreed to introduce a new sub-item k. I have satisfied myself that the request for a reduction of duties is reasonable, and I submitted a proposal to a sub-committee of the Cabinet, which approved of it. I move -
That item 105 be amended -
By adding a new sub-item (k) as follows: - “(k) Piece goods of a class or kind not pro duced in Australia which would otherwise be dutiable at a higher rate than that payable under this sub-item imported for use in the manufacture of neck-ties, as prescribed by departmental by-laws -
1 ) Silk or in chief part by weight silk ad val., British, 10 per cent. ; intermediate, 15 per cent.; general, 20 per cent.
Other ad val., British, 20 per cent.; intermediate, 22½ per cent.: general, 25 per cent.”
This amendment is for a reduction of duty on piece goods of a class or kind not produced in Australia, imported for use in the manufacture of neckties. On silk piece goods the reduction will be 10 per cent. general tariff ; on artificial silk piece goods, 5 per cent. British preferential tariff, 74 per cent intermediate tariff, and 10 per cent. general tariff; while on woollen piece goods the reduction will be much more considerable. The purpose of the amendment is to relieve the tie manufacturing industry of part of the duty on its jaw material. The industry was able to carry on fairly successfully under the old rates of revenue duty, but since the imposition of the increased revenue duties under the old item itself, and under the primage resolution, it cannot pass on the added’ cost to the public, because the public is not in a position to pay the increased prices demanded. The amendment proposed is in accordance with a practice which has been followed in Canada for a number of years. I could, of course, admit these materials under tariff item 404, under which the duty is, British, free, and general tariff, 10 per cent.; but it is considered that those rates are too low.
.- Has the Minister received an assurance from the manufacturers that any relief obtained from the reduction of the duty will be passed on to the public in the form of lower prices? Necktie manufacturers already enjoy a very considerable measure of protection. I do not complain of that, because they, in common with other clothing manufacturers, are entitled to protection. The present duty on neckties is 6s., 7s. and 7s. 6d. per dozen, or 60 per cent., 65 per cent, and 75 per cent, ad valorem. That is a very generous measure of protection, especially when we realize that the raw material employed in the industry is mostly artificial silk which, to some extent at any rate, competes with wool, one of our own staple products. In my opinion, the revenue is entitled to more than a 10 per cent, duty on the raw material used in this industry. I am not disposed to support the proposal for reduced duties, unless the Minister can give an assurance that the public will benefit by lower prices. The Minister said that the workers, owing to reduced wages and salaries, could not afford to pay as much for their clothes as previously, and they are, therefore, entitled to benefit by any reduction of duty.
.- The only doubt I have regarding the wisdom of this proposal is that the raw material upon which, the duty is to be reduced enters into competition with wool. I am at present wearing a tie which, I think, will compare favorably with any tie produced in any part of the world, and it contains 95 per cent, of wool.
– It is proposed to reduce the duty only on raw material not produced in Australia.
– I know that; but such raw material competes with wool, which we produce in this country. The time is fast approaching when wc must protect our raw materials as well as our manufactured goods. I agree with the honorable member for Cook (Mr. C. Riley) that if the duty on raw material is reduced, the price of the finished article to the public should also be reduced.
.- I support the amendment moved .by the Minister. What is needed in this country more than anything else at the present time is to provide employment for our workers, and if we make raw materials cheaper, the manufacturers will be able to provide more employment. It is amazing to me that anyone who supports the Labour party should object to this proposal, the object of which is to assist a local industry so that it may keep in employment all those at present engaged, and absorb some of those now out of work. In the past extraordinarily high duties have been imposed on this raw material, and it is proposed to grant some measure of relief, while retaining a duty which will return a substantial revenue to the Treasury. The honorable member for Cook (Mr. C. Riley) seems to be afraid that the workers may not derive any benefit in the way of cheaper prices for the finished article, but I am convinced that competition is so keen nowadays that reduced prices will follow immediately on the reduction of duties. The cost of living figures show that there have been enormous reductions in two items - rent and wearing apparel, and the goods we are now considering constitute an article of apparel. We need all the revenue we can get at the present time, and if we prohibit the importation of goods we derive no revenue from them at all.
– It is not suggested that the importation of these goods should be prohibited.
– If a reasonable duty is imposed on an article, it will probably be imported in large quantities, but if the duty is made prohibitive, or nearly so, importations will fall off I see in this proposal an opportunity to stimulate the industry, to provide occupation for those at present employed, and employment for those out of work.
– I suggest that the Minister should go through the whole tariff schedule, and enumerate, for the benefit of the committee, all the items covering raw materials not manufactured or produced in Australia, so that we may deal with them all at once. It is unfair, in my opinion, to select for special treatment one item of raw material not produced in Australia, while the schedule is full of other items equally deserving of favorable treatment. This afternoon I brought under the notice of the Minister several items which are not being produced in Australia, and will not be produced here for a considerable time, but the Minister does not offer any relief in respect of them. In the present instance a heavy duty has already been imposed on imported ties, but the local manufacturer finds that, because of the excessive duty on silk, the only silk which he can afford to import is” of a most inferior quality - the mere rags and tatters and ends. The tie manufacturers are unable to produce in Australia anything like the article which they produced before these heavy duties were imposed, when they were able to compete satisfactorily with the best Spitalfield and other English ties. It is necessary to encourage this industry by providing it with raw material at a reasonable cost, and the amendment of the honorable member for Balaclava has that object in view. These palpable errors in the tariff are a clear indication of its unscientific preparation, and this is one glaring instance out of a tremendous number of others.
– The honorable member’s previous grievance was that the Government would not yield to any pressure from the Opposition.
– I do not admire the obstinacy of the Minister. It is not to his credit that he has refused every reasonable request of the Opposition. That he is conceding something on this item, is no reason why we should feel grateful to him. This is a matter of policy. It is either fair or unfair. It is in the interests of Australia or it is not. I shall vote for the amendment, because it is in the interests of Australia to decrease the duty on the raw material for Australian ties. Raw materials that we do not produce here should be admitted at a low rate of duty or duty free, if necessary, in order that our industries may be encouraged and established.
.- The honorable member for Cook (Mr. C.Riley) has pertinently said that, if my suggested amendment is conceded and the duty it decreased, there should also be a reduction in price. Of course that goes’ without saying. As the honorable member for Moreton (Mr. Francis) has said, prices will fall because of the keener competition within Australia. It might be as well for the Minister, if the amendment is carried, to indicate to the trade that in giving this concession the Government expects in return a concession in the price to the consumer. The honorable member appreciates though, that if there is a reduction in duty of 10 per cent, on the raw material, it does not follow that there should be a similar reduction in the wholesale and retail prices, because any reduction would only be a fraction of that.
Amendment agreed to.
Item, as amended, agreed to.
Item’ 154 (Fishbolts)
– The committee should know why it is necessary to impose this excessive duty on fishbolts. This commodity is essential in connexion with the railways of this country, and I think that the Minister should explain the reason for this heavy duty in view of the fact that fishbolts are not manufactured to any extent in Australia.
.- Fishbolts can be made in Australia. The Australian manufacturers are capable of supplying the whole of our requirements. There are no engineering difficulties in the manufacture of fishbolts, and they are used largely in our railway systems. Although the quantity imported is not considerable, the duties have been increased to safeguard the Australian market for the local manufacturers. There is practically no difference between the manufacture of fishbolts and that of ordinary bolts and nuts, and the duties imposed are in accordance with the recommendations of the Tariff Board for the protection of the holt and nut industry of Australia.
Item agreed to.
Item 155 (Iron or steel beams, channels, joists, girders, columns, trough and bridge iron and steel.)
– The duties on these items are excessive. The demand for these goods is so small and intermittent that it does not permit of their mass production locally. [Quorum formed.] Some discrimination should be exercised in imposing these duties, greater preference being given to Great Britain, which manufactures all of these goods.
Item agreed to.
Item 159 agreed to.
Item 160 (Cotton gins; hand-worked rakes and ploughs combined, &c).
.- The original sub-item 160 a included testers and pasteurizers. Pasteurizers have been taken out of that sub-item and included in item 164, but there is no mention of testers. Are they now on the free list?
.- The only alteration in this item is the deletion of the words “ Testers and pasteurizers, n.e.i. “, in view of the proposed amendment of item 164, to cover jacketed vats or jacketed tanks, lined or unlined, including those fitted with agitators or stirrers capable of use as pasteurizers and, or, coolers or as storage receptacles. This alteration has been made for drafting purposes only.
– What has happened in respect of testers?
– I propose to move an amendment to item 164 which will cover testers.
Item agreed to.
By omitting the whole item and inserting in itsstead the following item: -
Agricultural, Horticultural, and Viticultural Machinery and Implements, n.e.i.; Cane Loaders, CaneUnloaders and Cane Harvesters; Channel-making Graders ; Garden and Field Spraying Machines, not including Spray Pumps operated bv hand or foot; Garden and Field Rollers; Garden Hose Reels; Horse Road Rollers and Machines; Lawn Sweepers; Road Scoops and Scrapers; Scoops; Stump Extractors’; Fibre Scutching Machines; Milking Machines; Potato Raisers or Diggers; Potato Sorters; Root Cutters, Pulpers and Graters; Straw Stackers ; Sub-surface Packers, ad val. British, 20 per cent.; intermediate, 25 per cent.; general, 30 per cent.
Lawn mowers, viz.: -
1 ) Electrically or petrol driven, ad val. British, 30 per cent.; intermediate, 40 per cent.; general, 45 per cent.
Hand, ad val. British, 45 per cent.; intermediate, 55 per cent.; general, 60 per cent.
N.E.I., ad val. British, 20 per cent. ; intermediate, 25 per cent.; general, 30 per cent.
.- I ask the Minister to postpone sub-item 161 a in view of the small number of members present in the committee. We were led to expect that Parliament would adjourn last week, and as a result many honorable members made arrangements which they could not break in order to attend here this week.
– To meet the convenience of. the Deputy Leader of the Country party (Mr. Paterson) and other honorable members, I move -
That sub-item 161 a be postponed.
Motion agreed to ; sub-item postponed.
.- I wish to refer to lawn mowers under subitem 161 b (1) about which there has evidently been a misunderstanding. This increase of duty was imposed without full inquiry being made and I suggest that the words “ or petrol driven “ he deleted from the item. Electric lawn mowers are made in Adelaide, but petroldriven motors have not yet been manufactured in Australia. I believe that in a few instances imported parts have been assembled here. The largest users of petrol-driven mowers are municipal councils, which have large areas of grass to mow. This additional duty will mean that many of these councils will be unable to afford the expense of maintaining large plots of grass, and as a result more men will be thrown out of work, men of the type that it is most difficult to employ. At present, petrol-driven mowers pay a duty of 20 per cent. The costs are: 33 per cent. exchange; 20 per cent. ad valorem duty, which is equivalent to 25 per cent.; 10 per cent. primage duty; 6 per cent. sales tax, and 10 per cent. shipping and other charges. That is approximately an additional cost of 85 per cent. which, if increased by another 10 per cent., as is now proposed, will make it impossible for the municipal councils and other users to purchase this sort of machine. Furthermore, I would point out that the few experimental machines which have been assembled here have no range in sizes, although the sizes of the imported machines range from 16 to 42 inches. If this increased duty is imposed, the Government will lose a revenue that it urgently needs at the moment. I am of the opinion that the words “ or petrol driven “ crept into this item in this large schedule by accident and that petroldriven lawn mowers should come under the n.e.i. classification until such time as they can be produced economically in Australia.
– I move -
That the item be amended by adding the following: - “ And on and after the 7 th August, 1931 -
Lawn-mowers, viz.: -
This amendment gives effect to the recommendations in the Tariff Board’s reports of the 3rd October, 1929, and the 2nd April, 1931, and in respect of hand mowers will result in a reversion to the 1921-28 rates of duty on mowers with train gears and those specially designed for the combined purpose of trimming and edging, which are types not being manufactured in the Commonwealth. Petrol-driven lawn-mowers, which were included in paragraph 1 of sub-item b by the resolution of the 26th March, 1931, at rates of 30 per cent., 40 per cent., 45 per cent. are omitted from that paragraph by the present amendment and will become dutiable under paragraph 3 at rates -of 20 per cent., 25 per cent., and 30 per cent. The Tariff Board’s report, which was received subsequent to the tabling of the March resolution, showed that no evidence was tendered at the inquiry by the local manufacturers of petrol-driven lawn-mowers in favour of increased duties, and, as investigations by departmental officers indicate that the industry, as at present established, is not capable of supplying certain of the Commonwealth’s requirements, especially in the large lawn-mowers used by municipal bodies, the Government feels that the retention pf the duties on petrol-driven lawn-mowers proposed on the 26th March last would amount to an unjustifiable tax on public undertakings.
The manufacturers who had intimated their intention to manufacture petrol- driven lawn-mowers found on further investigation that they could not undertake the work. Consequently there is no good purpose to be served by retaining the existing duty.
– While the Minister seems willing to give consideration to municipalities and other users of petrol driven lawn-mowers, he is not prepared to give similar consideration to the unfortunate householders who spend their Saturday afternoons pushing hand lawnmowers over their lawns. These individuals are considered when an election is imminent; but at other times they are made the victims of unnecessarily high charges for the manufactured goods that they must buy. The increase in the duty on hand lawn-mowers is from ad valorem 20 per cent. British, 25 percent. intermediate, and 30 per cent. general, to ad valorem 45 per cent., 55 per cent., and 60 per cent. respectively. The immediate result of the imposition of the new duties was a loss of revenue. Under the old rate of duty local manufacturers were selling hand lawn-mowers for 10 per cent. less than the landed cost of the imported article so that an increase of the tariff was not warranted. Many of the parts required for the locally-made article have to be imported, so that the industry is largely an assembling and fabricating enterprise. Some of the companies manufacturing these mowers showed highly developed powers of anticipation, for just before the imposition of the new duties, the price of locally-made hand lawnmowers was increased by 10 per cent. Twelve-inch hand mowers, which cost 31s. 6d. prior to the imposition of these duties, are being sold to-day for 42s. 6d. Comparative prices for 14-inch hand mowers are 35s. and 45s. In my opinion the only result of these increases in duties has been to increase the cost of lawn-mowers to the general public, and to reduce the revenue of the Government. Seeing that, prior to the imposition of these duties, the price of the locally-made mowers was 10 per cent, lower than the price of the imported mowers, the Government should not have taken this step.
I regret that the interests of the consuming public are receiving very little consideration from the members of this committee. We hear often enough what the manufacturers of Melbourne and Sydney, jointly and severally, think about various propositions that are made for increase of duty; but we are never told how the members of the general public view such proposals. The Minister seems to give less consideration to the welfare of the general public than any other honorable member of the Parliament. In view of the fact that we have to import many of the parts required for making lawn-mowers, and that much of the raw material has also to be obtained from abroad, I cannot understand the attitude of the Government. I enter my emphatic protest against the imposition of these duties, because the only people who will benefit by them are a few manufacturers and a limited number of workers engaged in the industry, and many thousands of other workers will be penalized by them.
.- As an ardent advocate of the protection of Australian industries, I must. express my disapproval of the amendment moved by the Minister. The reasons which originally caused the Government to impose the higher duties are still sound.
– That is not so, for the Government was led to believe that, if the higher duties were imposed, the manufacture of petrol-driven lawn-mowers would be undertaken in Australia. The company which intended to manufacture them found later that it could not do so.
– By proposing a reduction of these duties, the Government is showing a lack of faith in the manufacturers of Australia, and is not giving any encouragement to our engineering firms to undertake the manufacture of these machines. Our imports of lawnmowers are valued at £100,000 per annum, and I submit that this money should not be allowed to go out of Australia. What applies to hand lawnmowers applies, in my opinion, with equal force to petrol-driven machines. The policy of this Government is to prevent the importation into Australia of any goods that can be manufactured here. For my part, I would prefer to see some of our unemployed pushing hand lawnmowers than to see “ large petrol-driven machines in use. It has been said that the retention of this duty on petroldriven lawn mowers will penalize local governing authorities. Those bodies are unable to find the wherewithal to purchase blue metal to repair their roads, let alone buy petrol-driven machines to cut lawns. The committee should not concern itself about that matter, but instead should endeavour to do something that will make employment for our own factories and workshops. I am in touch with a manufacturer in New Zealand, who has a patent covering lawn mowers, and is willing to undertake their manufacture in Australia, if conditions are satisfactory here.
– - What is the nature of the patent ?
– I cannot go into details, but I can assure the honorable member that this man is an enterprising person, not so much concerned about making huge profits as of being of some use to his country. A reduction of these duties would prejudice the endeavours of such persons; therefore, J. am opposed to the amendment.
– J ask whether it will be possible to tak* these sub-items separately. The honorable member for Cook (Mr. C. Riley) deals with them as one item, and the Minister has moved an amendment that covers the whole of them. I think that if the honorable member for Cook had expert knowledge of petrol-driven lawn mowers he would not adopt his present attitude. I have personal knowledge of these machines, which are made in sizes of from 16 in. to 42 in., the latter being practically comparable with a motor car. If it were possible to manufacture them in Australia my own firm would be prepared to engage in that activity. However, the demand for such machines is limited. I point out to the honorable member for Cook that the Melbourne City Council employs some80 men for lawn maintenance, which would not be possible if it did not use petrol-driven lawn mowers.
– Are not hand-driven machines used?
– Only for special work. Prior to the introduction of petrol-driven lawn mowers, it was not practicable to cut the large areas that they mow now. Very few petrol-driven machines have been made in Australia. Some experimenters have attached a motor-cycle engine to a lawn mower, but the result has been an indifferent machine. The Tariff Board has already inquired into and arrived at decisions with regard to electricallydriven machines now being made in Adelaide, and the hand-driven lawn mowers manufactured in Melbourne and Sydney. It is only reasonable that we should accept the Minister’s amendment. Motor-driven mowers cost as much as £250, so that exchange, primage duties, sales tax, packing charges, and so on, amount to a formidable imposition. The Government would lose a substantial amount of revenue if the duty were prohibitive. [Quorum formed.]
Amendment agreed to.
– I protest against these duties being increased from 20 per cent., 25 per cent. and 30 per cent. to 45 per cent., 55 per cent. and 60 per cent. Spray pumps are used by orchardists, whose purchasing costs may be greatly increased by the proposed duties. I point out that the difference between the first set of duties and those now proposed is very much greater than would appear from a superficial investigation. Since the 1921- 28 schedule was brought down,local manufacturers have enjoyed tremendous advantages from the protection afforded by a 10 per cent. primage duty, and an exchange of £30 10s. per cent. The 20 per cent. duty provided in the early schedule actually amounted to a protection of 22 per cent., as it was imposed upon a value of £110 instead of £100, in conformity with the practice of adding 10 per cent. to the invoice price. Working on that basis the present duty of 45 per cent becomes 50 per cent., to which must be added the primage duty of 10 per cent., and the exchange advantage of £30 10s., making a total of £90 10s., British preferential rate. I submit to the Minister that there is no necessity for that tremendous increase, which can only result in great hardship being imposed on primary producers. I oppose the sub-item, and think that the committee should vote it out.
– I think that I shall be able to remove the misunderstanding that evidently exists in the mind of the honorable member for Gippsland (Mr. Paterson). These goods can very easily be manufactured in the Commonwealth, and it was anomalous that they should be dutiable at such low rates. One of the largest manufacturing companies, which had twenty-five employees engaged in making these articles, stated that if granted adequate protection, it would increase its staff by 100 per cent. It subsequently forwarded information that this had been done, due to the increased orders received. However, because of the depression, only twelve additional hands are at present employed. It also gave an undertaking that prices would not be increased. The company anticipated that with the increased trade which would accrue as a result of the increased duty imposed it would be able to sell at lower prices. Further plant has been installed which is wholly of Australian manufacture.
Since this industry was established in Australia it has been the means of reducing the purchase price of the goods to the public by from 5 per cent, to as much as 33$ per cent. The new duties have enabled firms to launch out in the manu- facture of several lines which previously were not made in the Commonwealth, such as knapsack sprayers and barrel sprayers for orchards, which are now being manufactured successfully at highly satisfactory prices.
The March, 1931 schedule added to this sub-item atomizers and vaporizers of the type used for spraying insecticides. When the June, 1930 schedule was tabled covering increased duties on certain spray pumps, one large company erroneously assumed that the new duties applied to atomizers and vaporizers of the kind used for spraying insecticides, and accordingly placed a large order with the local manufacturers at the time, stating that the order would have gone abroad if - the duties had not been imposed. This order brought about the employment of an additional 25 hands. Those facts indicate that the local product is satisfactory, and that while the goods can be imported at a low rate of duty, even though the local prices are competitive. Australian manufacturers cannot expect to extend their activities. Our manufacturers have reduced prices by upwards of 30 per cent., and the fruitgrowers are much indebted to them. Before these secondary industries were established, the primary producers were mulct by importers, who bought goods abroad at very low prices, and made fabulous profits in the distribution of them. The Australian manufacturer sends his travellers into country districts and sells direct to the orchardist, and the agents, who formerly obtained a big rake-off in respect of imported sprays, are now eliminated.
.- I was glad to hear from the Minister of the extension of this industry. That indicates the way in which the protective policy should operate, namely, by increas ing the market for the local product, and reducing its price. But the Minister went on to say that the local industry cannot be expected to extend unless competition from overseas is excluded. To that proposition I am not prepared to accede. The possibility of external competition is beneficial to the consumers, and promotes the efficiency of our industries. What the Minister has said does not confirm the need for the duty now proposed. On his own showing, it is prohibitive.
– No; only 45 per cent, and 60 per cent, ad valorem.
– But the honorable gentleman said that unless foreign competition were excluded from the local market the local manufacturers would not be able to carry on. I do not think we should be content to accept such an admission of inferiority in respect of Australian industries generally. To what the honorable member for Gippsland (Mr. Paterson) said in regard to the additional protection given to the local manufacturer by the primage duty and exchange, the Minister replied that such advantages were only temporary. The primage duty is part of the. law of the land. ^
– Laws can be altered when times change.
– Quite so. Meanwhile primage is an additional protection; so also is the heavy exchange. I would like to be able to believe that at an early date normal trading conditions between Australia and the rest of the world will be restored. I am unable to do so, and while extraordinary conditions continue we must legislate with due regard to them. Most of the duties in this schedule were first imposed in November, 1929. A duty of, say, 40 per cent., which was regarded as necessary and justifiable then, has now become 80 per cent, because of the operation of primage and exchange. Nobody can justify the imposition of an 80 per cent, duty when, after full inquiry, the Government was satisfied that 40 per cent, would suffice. The committee should take into consideration existing factors, and vary the schedule as those factors change. I see grave danger in ignoring the elements of increased primage and exchange. If as industry is producing and selling under the equivalent of 80 per cent. protection in addition to freight how will it fare when normal conditions return? I fear that in agreeing to a schedule based upon the conditions in 1929, which have since completely changed, we are giving to some industries encouragement, to the extent of almost the prohibition of competition, which further experience may not justify. We may indeed be doing a great disservice to those industries. Accordingly it seems to me that some of the duties are too high as protective measures, because df the radical change in conditions since they were first introduced. It is a mistake airily to wave aside primage and exchange as merely transient factors. Even if they are likely to pass soon, we should legislate with regard to the actual commercial conditions under which manufacturers are operating, and not upon a basis which has in fact disappeared.
.- Spray pumps are used in the production of exportable commodities, and should be treated differently from articles that are used in the production only of goods to be locally consumed. The Minister invited honorable members to visit a factory in Sydney at which these machines are produced. I shall avail myself of the invitation, and if the manufacturer tells me the same story as the Minister has related this afternoon, I shall say franklythat I do not believe it. I reciprocate by inviting the Minister to visit the fruitgrowing areas in my electorate.
– I shall be delighted to accompany the honorable member on such a visit, but there are fruit-growers in my own electorate, and I know their views. This protection of a local manufacturing industry has given the orchardists the advantage of a 33 per cent. reduction in the prices of spray pumps.
– If the industry is operating so successfully, this additional protection is not needed. The Minister has stated that primage duties and exchange are only passing factors, but I cannot see any indication of their removal in the near future. Parliament should legislate to meet existing conditions, and not base its tariff policy on optimistic guesswork as to what may be the economic circumstances in the future. This item involves a fundamental principle, which is worthy of special consideration, and, therefore, should be dissociated from ordinary tariff policy. Having knowledge of the actual facts I can assure the committee that even though the wholesale prices of spray pumps may have been reduced to the extent that the Minister has stated, the reduction is not reflected in the retail prices paid by the users of these machines. I ask the Minister to give further consideration to this item with a view to making these duties conform with the existing conditions of exchange, which, so far as we can see, are likely to last a considerable time.
.- The proposed additional protection to the local manufacturer of spray pumps is fully warranted. I am an orchardist and represent a fruit-growing area, in which more spray pumps are used than in any other electorate in Australia. The orchardists in my district prefer the product of local manufacturers, who understand our requirements and cater for them.
– How long have they been buying local products?
– For several years. The prices have been reduced, and we believe that if the Australian manufacturers secure the whole of the trade, they will lower their prices still further. Those who use spray pumps recognize that the home market is the best market for their produce; if they buy their implements of production outside of Australia, they are damaging the market for their own products. The primage duty and adverse exchange are only temporary factors and the manufacturers have not taken advantage of them. The prices of many commodities have been reduced. The manufacturers realize that the present Minister for Trade and Customs (Mr. Forde) will not tolerate any hanky-panky tricks, and they know if they take advantage of the increased duties to advance their prices, they will not enjoy this protection very long. If we want to preserve the local market for our own producers, primary and secondary, we should do everything possible to prevent the importation of goods that our own people can. manufacture efficiently.
– I am opposed to the increased duty on spray pumps. [Quorum formed.] The honorable member for Franklin (Mr. Frost) stated that Australian-made pumps have been used in his district for years, and have been found satisfactory. If that is so, why should the duty be increased by 20 per cent.? This is but another instance of the willingness of the Government to grant any increase of duty asked for. I am not a rabid protectionist, nor am I a freetrader; but if we go on increasing duties at the present rate we may go too far. I agree with the Deputy Leader of the Opposition (Mr. Latham) that, in considering tariff matters, we should have regard to the exchange rate and to production costs. If we continue the present policy of extreme protection, the experience of honorable members may resemble that of the Gadarene swine, which “ ran violently down a steep place into the sea, and perished in the waters “.
– The honorable member for Franklin (Mr. Frost) has informed me that the spray pumps commonly used in his district are power pumps, and that in recent years they have come down in price.
– The price of handoperated pumps has been reduced by as much as331/3 per cent.
– I point out that no increase in duty has been made with respect to power pumps. The increase is on the smaller sprays that are operated by hand or foot, and I wish primary producers in a small way of business to be able to purchase their sprays on a reasonably competitive basis. I am entirely in agreement with the honorable member for Franklin that it is desirable to use Australian-made sprays. I merely wish to have a “ rate of duty imposed which will make it impossible for the local manufacturer to profiteer. I con tend that the duties of 20 per cent., 25 per cent., and 30 per cent. provided on power sprays would be sufficient to cover hand and foot-operated sprays. It has been said that the 10 per cent. primage duty and the 30 per cent. exchange are merely temporary; but it is doubtful whether those charges will be reduced for a considerable period. We should take such factors into consideration in framing the tariff. If there should be a fall in production costs in future, wecould make such an adjustment as might: then be considered necessary. I move -
That the sub-item be amended by adding the following: - “And on and after 7th August, 1931 -
Spray pumps, hand operated, n.e.i. including atomizers and vaporizers of the type used for spraying insecticides ; spray pumps, foot operated; garden syringes; lawn sprinklers, ads val., British, 20 per cent.; intermediate, 25 per cent.; general, 30 per cent.”
That would bring the rate of duty on hand and foot-operated spray pumps- down to the same rate as that charged on power spray pumps.
Question - That the amendment (Mr. Paterson’s) be agreed to - put. The committee divided. (The Chairman - Mr. McGrath.)
Majority . . . . 12
Question so resolved in the negative.
Item, as amended, agreed to.
By omitting the whole item and inserting in its stead the following item: - “164. (a) Hand churns, cheese presses, ad vol., British,22½ per cent.; intermediate, 30 per cent.; general, 35 per cent.
Churns n.e.i. ; dairy coolers; pas teurizers; jacketed vats or jacketed tanks lined or unlined, including those fitted with agitators or stirrers, capable of use as pasteurizers or coolers or as storage receptacles; enamelled vats or tanks not jacketed, ad val., British, 45per cent.; intermediate, 55 per cent. ; general60 per cent.”
– The Tariff Board recommended that the duties under this item should be 22½ per cent., 30 per cent., and 35 per cent. ; butthe Government has fixed them at 45 per cent., 55 per cent., and 60 per cent. Thus the Government has doubled the Britishpreferential rate recommended by the Tariff Board. On some tariff items, the increase is even greater than that. Item 164 a relates to churns and cheese presses, and item 164 b covers “ Churns, n.e.i. “. Under the 1921-28 tariff,all churns, whether hand or power-operated, were bracketed itogether, and the British preferential duty was 22½ percent; but to-day that duty applies only to churns operated by hand, those operated by power having to bear a duty of 45 per cent. The duties on pasteurizers, which are included in this item, were originally “ Free, 5 per cent., and 10 per cent. “. The board recommends that the British preferential tariff should be 22½ per cent., but under the present tariff the duty is 45 per cent. It seems inexcusable that the Government should grant twice the duty recommended by the Tariff Board, more particularly in connexion with machinery used for the production of a commodity very largely exported. These pasteurizers and jacketed vats and power churns are all used in the manufacture of butter, and this year our exports of butter have been even greater than the quantity consumed locally, the first time an our history that this has occurred.
We should not do anything that would injure this important industry. I move -
That the item be amended by adding the following to sub-item (b) : - “And on and after 7th August, 1931 -
Churns n.e.i.; dairy coolers; pas teurizers; jacketed vats or jacketed tanks lined or unlined, including those fitted with agitators or stirrers, capable of use as pasteurizers or coolers or at storage receptacles; enamelled vats or tanks not jacketed ad val, British, 22½ per cent.; intermediate, 30 per cent.; general, 35 per cent.”.
That will bring the item into strict conformity with the recommendation of the Tariff Board.
– I cannot accept the amendment moved by the honorable member for Gippsland (Mr. Paterson) to item 164 b. I have a great deal of respect for the honorable member who so ably argued the merits of the Paterson butter scheme before the butter factory interests of Australia. This scheme has now been accepted by the consumers of Australia.
– It has never been accepted by the consumers.
– Many persons are employed in manufacturing articles required by the dairying industry, and those persons are consumers of butter affected by the Paterson scheme, which provides what is practically a bounty of between £3,000,000 and £4,000,000 for the butterproducers. I have no fault to find with that. I represent a large dairying district and, in my opinion, the dairyfarmers are entitled to what they . are getting. We cannot expect them to work forsixteen hours a day, and sell their butter at a price to compete with the product of coolie labour. We have pledged ourselves to the White Australia policy, and we should not shrink from what is necessary to put it into effect. If there was not a market here for a large proportion of the butter produced, the Paterson butter scheme would be unworkable. I ask the honorable member for Gippsland to withdraw his amendment. All we ask is that the butter factories, which are benefiting under the Paterson butter scheme, shall buy Australian-made machinery.
Under the 1921-28 tariff pasteurizers were classified under item 160 a, free British preferential tariff; 10 per cent., general tariff; while diary coolers and churns were provided for under item 164, 22^ per cent., British preferential tariff; and 35 per cent., general tariff. Australian manufacturers of jacketed vats complained that certain vats useable both as dairy coolers and pasteurizers were being admitted at the lower duties under item 160 a, to the detriment of the local industry. To secure uniformity of classification, the department, in 1928, issued a decision classifying all glass-lined tanks, capable of use as both pasteurizers and dairy coolers, as dairy coolers, under item 164- 22-^ per cent., British preferential tariff, and 35 per cent., general tariff.
– I have not objected to that.
– The honorable member has moved to reduce the duty.
– Yos; in accordance with the recommendation of the Tariff Board.
– The Tariff Board’s report is three years old, and manufacturing costs in the countries which compete with Australia have fallen considerably more than they have here. The greater the number of persons we can employ in making the machinery and other equipment U3ed in the dairying industry, the better the chance for success of the Paterson butter scheme.
– I am rather surprised that any objection to this duty should have been raised, even by the honorable member for Gippsland (Mr. Paterson). The manufacturers of butter-making machinery have served the dairying industry of Australia remarkably well. A few years ago- the combined churn and worker was manufactured only in the United States of America. An Australian firm obtained from the American manufacturers the right to manufacture in this country on a royalty basis. By the exercise of Australian ingenuity, the machine has been greatly improved, and the locallymanufactured article is in use practically throughout the whole of Australia. The use of the combined churn and worker results in a considerable saving to the butter manufacturer. Much of the finest machinery in the butter factories of
Australia is made here. Australia’s chief competitors in the manufacture of such .machinery are Denmark and Sweden, and we have very little hope of competing with them on an equal footing, either in regard to this or any other article. In my opinion, the almost unanimous verdict of the butter factories would be in favour of the Australianmanufactured machine, even though they had to pay a little more for it.
– Then what is the need for an increased duty ?
– At the present time, the Australian industry is protected by the high rate of exchange, the primage duty, arid the 50 per cent, surcharge imposed for the purpose of adjusting our trade balance. All these advantages are of a temporary character, but the tariff schedule, we hope, will be permanent. Every one who has studied world affairs knows that, owing to the world depression, the manufacturing countries of the world are trying to push their goods on to new markets, and unless we take steps to protect our own industries they will be ruined. I am prepared to gO before any audience of dairymen, as I have done before, and defend the protection of Australianmade dairying machinery.
.- It appears to me that it would be very difficult for the dairymen to object to paying increased prices for manufacturing machinery, if such increased prices were demanded as a result of tariff protection. The butter-makers of Australia have evolved a self-protective system under which they enjoy a favorable local price, so that it ill becomes them to complain because they are asked to pay a higher price for Australian-made machinery. At the same time, I feel that the protection which the butter-makers have given themselves by their own action, without any legislative assistance, is so high that they may shortly over-reach themselves.
– It is lower now than at any time since its inception, and I am glad of it.
– It will probably haveto fall lower yet. All honorable members: are aware of the anxiety felt in the dairying industry, because of the greatly increased consumption of such butter substitutes as margarine, peanut butter, audi
Kopha butter, articles which, until a little while ago, were not seen in Australia. Indeed, most Australians became acquainted with them for the first time when they went abroad. In recent years, however, we have been getting down to a lower order of food substances. The quantity of such substitutes used is increasing from month to month. It may be that before very long the dairymen will not be in such a happy position as they have been in for some time past.
The articles with which we are now dealing have been made in Australia for a long time. One of the oldest established industries in Victoria is a churn manufacturing concern, and it has got on in the past without very much assistance from the tariff. In the case of ^pasteurizers and jacketed vats or tanks, ‘capable of use as pasteurizers, a rather remarkable thing has taken place. The Minister said that manufacturers found that they were being undercut by the admission of these articles under item 160 a, and an application was made for an increase of duty. If honorable members look at the memorandum before them they will find that it was proposed to amend 160 a by a resolution of this House introduced on the 21st November, 1929, proposed rates being 3 per cent., 5 per cent., and 10 per cent. That was under the regime of the present Government, and at that time, evidently, the Government was not impressed with the need for altering the item dealing with pasteurized vats and tanks capable of being used as pasteurizers. In 1931, however, it is proposed to increase the duty on these articles from free, 5 per cent., and 10- per cent, to 45 per cent., 55 per cent., and 60 per cent. That is an enormous increase. It is really amazing. However well the dairymen are doing, one cannot help feeling some apprehension that there may conceivably be an increase in price.
– There have been reductions in price.
– I remember a few minutes ago, when we were discussing the item of spray pumps, that the Minister read from a prepared statement that there had been reductions in various classes of spray pumps and similar articles, varying from 5 per cent, to 33^ per cent., but before he finished his speech he said that there had been a reduction in price to 33J per cent., as if that were the general reduction. He said that at least half a dozen times, so his statements as to reductions in price cannot be regarded as very accurate. This is a tremendous increase of duty and when one takes into account the exchange and primage duty, which cannot be ignored, it seems to me that in spite of the other considerations to which I referred at the outset of my observations, the Minister has not succeeded in justifying this increased duty. Some rate of duty is probably justified, but it seems to me that the Minister always misses the precise point - the particular amount of duty proposed. There surely must be a reason why the duty should be 45 per cent, rather than 10 per cent., 15 per cent, or 30 per cent., but we hear nothing about that at all. We have been asked to accept this increase of duty as fixed arbitrarily by the Government. Certainly no reason has been adduced to justify the proposed increased rates of duty on any item that has to-day been discussed by the committee.
, - The Minister has suggested that, as the dairyman is receiving substantial protection, he should not object to the manufacturer who produces the machine for obtaining the dairy product being also protected. Let me inform the Minister that the dairyman is “getting whatever protection the Tariff Board has recommended, and no more. He is taking advantage of that protection to the extent of less than one-half under the scheme which bears my name. The point which I wish to make is that the protection that he is receiving is just what the Tariff Board recommended. My amendment provides - that the manufacturer of this machinery shall get the protection which the Tariff Board has recommended, neither more nor less. That, I submit, is a reasonable: proposition.
Item agreed to.
Item 168 (Sewing machines, treadle or hand).
– I ask the Minister to , postpone this item.
– I have no objection to the postponement of this item, particularly as I understand that the honorable member has some additional information for the committee. I move -
That the item be postponed.
Motion agreed to ; item postponed.
Item 169 agreed to.
By omitting the whole of sub-item (a) and inserting in its stead the following subitem : - “ (a) (1) Earth and rock cutting, dredging, and excavating machinery, n.e.i., ad val., British,” 27½ per cent.; intermediate, 35 per cent.; general, 40 per cent.
Dredging and excavating machinery of dragline, shovel, grab, and similar types: -
Up to and including 1½ cubic yards capacity, ad val., British, 45 per cent.; intermediate, 55 per cent.; general,60 per cent.
Over1½ cubic yards and up to and including 2 cubic yards capacity, ad val., British, 27½ per cent. ; intermediate, 35 per cent.; general, 40 per cent.
Over 2 cubic yards capacity, ad val., British, free; intermediate, 5 per cent.; general, 15 per cent.”
.- I move-
That the item be amended by adding the following to paragraph 2: - “ And on and. after 7th August, 1931 - (2.) Dredging and excavating machinery of dragline, shovel, grab, and similar types: -
Up to and including 1½ cubic yards capacity, ad val., British, 45 per cent.; intermediate, 55 per cent.; general, 60 per cent.
Other, ad val., British, 27½ per cent.; intermediate, 35 per cent.; general, 40 per cent.”
The rates proposed in the resolution of the March schedule of 1931 were based on the recommendation of the Tariff Board, which arrived at its conclusion on the evidence at its disposal. The board was asked to report on the necessity for the increased duties under item 170a. 2, but several prominent local manufacturers of dredging and excavating machinery were under the impression that the inquiry was in connexion with a request for additional duties to those imposed by the Government, by resolution of the 11th December, 1929, and, accordingly, did not attend the inquiry. The result was that the board, fully justified in the circumstances, recommended a reduction of the rates on dredging and excavating machinery of over1½ cubic yards capacity. The rates suggested by the board appear in the March schedule of 1931. The Government is satisfied, however, that those manufacturers who failed to attend the Tariff Board inquiry constitute almost important section of the industry, particularly in the manufacture of dredging and excavating machinery of large capacities. The admission of such machinery over 2 cubic yards capacity at rates of, free,British preferential tariff, and 15 per cent. general tariff, under the March resolution, was an unexpected blow to the industry, and it is quite evident that the report tendered by the board is not a true reflex of the position. The amendment now moved is in agreement with the rates imposed in March, 1931, so far as machines up to and including1½ cubic yards capacity are concerned, and agrees with the 1921-28 tariff rates in regard to larger machines. The Government has referred the question to the Tariff Board for further inquiry in the light of the additional information supplied. The rates proposed in the amendment represent an increase of 17½ per cent. British preferential tariff, and 20 per cent. general tariff, on machines up to and including 1½ cubic yards capacity, thus increasing the margin of preference accorded to Great Britain by 2½ per cent. Dragline excavators and steam shovels to the value of approximately £25,000 per annum, are at present manufactured in Australia, principally of a capacity up to1½ cubic yards, and these machines are giving every satisfaction, so that purchasers of imported excavators of the type covered by the item must be influenced solely by the lower price of the imported machine. The business which Australian manufacturers have obtained up to the present is mainly due to the preference over and above the tariff protection accorded to Australian manufacturers, given by Government bodies and municipal councils to machines of Australian manufacture. It may be mentioned, to indicate the efficiency of one of the Australian manufacturers - Armstrong, Holland Limited - engaged in the manufacture of excavating machinery, that roller-bearing concrete mixers, manufactured entirely in Australia by that firm, are available at prices lower than those of similar machines manufactured in the United Kingdom. Given efficient protection, there is no reason why similar conditions should not operate in respect of excavating machines. The deeper one probes into this item, the clearer it becomes that this protection is justified.
.- This class of machinery is, indeed, important in a new country like Australia, where roads are being made and railways constructed. It is heavy machinery, which has a large natural protection. There is no reason at all why Australia should not make this machinery as well as any other country, and apparently we are doing so. The demand, however, is for machines of about 1 cubic yard capacity or under. This class of machinery is, under sub-itemb, to be charged a high duty - 45 per cent., 55 per cent., and 60 per cent. The Tariff Board reported that only about six of these machines are required annually, and the point is whether it is worth while handicapping ourselves in respect of road construction by imposing such a heavy duty on this particular class of machine. The Australian manufacturer is substantially confined to the smaller machine. The Tariff Board reports that in only one instance has a machine of over 2 cubic yards capacity been manufactured in Australia, and that the maker does not expect to manufacture another. Therefore, machines of over 2 cubic yards capacity will rightly be admitted free so far as Great Britain is concerned. With respect to the smaller machines, the Tariff Boardsays -
Evidence is conflicting in regard to the matter of price. The Victorian manufacturer Admitted that he could compete in price inde pendent of the preference given to local manufacture by government and municipal bodies. He recognized that his firm had lost sales to imported machines because of inability to supply on demand.
The New South Wales applicants submitted figures to show that they were beaten in price by importing firms. The board considers that the imposition of the duties now recommended should give the local manufacturers the market in the smaller machines, and, if this should result, a reduction in the selling price of the locally-made machines should be possible.
The board did not recommend an increase in duty on the smaller machines. The Minister explained why he does not propose to follow that recommendation. It was a strange explanation. It was that the manufacturers did not know that the board was inquiring with respect to machines of over1½ cubic yards and up to and including 2 cubic yards capacity. The board made its report onthe 30th June, 1930, and since then the manufacturers have informed the Minister that they had not expected the report, and were considerably shocked when it was published. The Minister, without referring the matter again to the Tariff Board, has overruled its recommendation, which in this case was in accordance with the evidence, and has asked the committee to agree to a large increase in duty on machines of over1½ cubic yards and up to and including 2 cubic yards capacity.
– I have had the subject investigated, but not by the Tariff Board.
– What facts were ascertained as the result of that investigation? The mere making by manufacturers of an application for additional duties means nothing to me. It is perfectly natural for them to obtain additional protection if they can, human nature being what it is. Such an application is in no sense evidence that additional duties are needed.
Assent to the following bills reported : -
Gold Bounty Bill (No. 2).
Appropriation (Works and Buildings) Bill 1931-32.
Appropriation Bill, 1931-32.
In Committee of Ways and Means: ( Consideration resumed ) .
Item 170 (Earth and rock-cutting, dredging, and excavating machinery, &c.).
.- I direct the attention of honorable members to the following remarks made in a book by Professors Shann and Copland, entitled : The Crisis in Australian Finance, 1929-31, which are based upon evidence given before the Tariff Board in connexion with’ the application for additional duties on excavating machinery -
The selling price of an excavator (half-yard capacity) manufactured in Australia was given as £2,300, while the f.o.b. price of a comparable excavator calculated back from the landed cost given in evidence would be approximately £1,450 in the United Kingdom.
If this difference is due to the extremely high duties that are imposed on this machinery we have the strongest possible argument for voting against the amendment.
Amendment agreed to.
Item, as amended, agreed to.
Item 176 (Cylindrical cement driers and coolers, &c.).
– I hope the Minister will give us some information about this item.
– Driers and coolers of the types covered by this item are manufactured in the Commonwealth. The locally-manufactured lines are as efficient as the imported lines, but owing to the cost of raw materials, and the low wages paid in the particular competing country, local manufacturers are unable to secure a reasonable proportion of orders. The action taken in imposing the increased duty on these goods is part of the policy to rehabilitate the engineering industry. Further details concerning this industry will be given when item 176f (1) is under consideration.
Bill returned from the Senate with amendments.
In committee (Consideration of Senate’s amendments) :
Clause 2 -
Section 11 of the principal act is” amended.
by adding at the end thereof the following sub-sections - “ (12.) This section shall not apply to any person other than a person who is engaged in -
the manufacture or sale of goods upon the sale value of which sales tax is payable by him under this act; or
other transactions, acts or operations in connexion with which sales tax is payable by him.”.
Senate’s amendment. - Leave out “ This section “, proposed new sub-section 12, insert “ The provisions of this section relating to securities “.
– I move -
That the amendment be agreed to.
As the bill stands, manufacturers and wholesale merchants who deal only in exempt goods, or who otherwise manufacture or sell goods in such circumstances that they are not liable to pay sales tax, are exempted from the obligation to become registered and to furnish securities. This provision was intended to relieve such persons from unnecessary burdens. An examination of the position since the bill was drafted indicates that, if a manufacturer of exempt goods or a wholesale merchant selling raw materials to manufacturers, or goods to other wholesalers, does not become registered, he will have to pay tax on his purchases. This was not intended. It is, therefore, necessary to ensure that such persons shall become registered. This amendment will achieve that result.
Motion agreed to.
Clause 3 -
Section 18 of the principal act is amended -
. . .
. . .
Senate’s amendment. - Leave out paragraphs (a) and (b), insert the following new paragraphs : -
by inserting, before the proviso to subsection (1.), the following proviso: - “ Provided that, where the goods are sold by retail, the sale value of the goods for the purposes of this act shall be the amount which would be their fair market value if sold by wholesale, but if the Commissioner is of opinion that the amount set forth as the” sale value of any such goods in any return furnished under this act is less than the amount which would be their fair market value if sold by wholesale, the Commissioner may alter the amount set forth in the return to the amount which, in his opinion, would be the fair market value of the goods if sold by wholesale, and the amount as so altered shall be the Bale value of the goods for the purposes of this act: “;
by inserting in sub-section (1.), after the word “ Provided “, the word “ further”; (ba) by inserting at the end of sub-section (2.) the following proviso: - “ Provided that, where the amount set forth as the sale value of any such goods in any return furnished under this act by the manufacturer is less than the amount which, in the opinion of the Commissioner, would be their fair market value if sold by wholesale, the Commissioner may alter the amount set forth in the return to the amount which, in hia opinion, would be the fair market value of the goods if sold by wholesale, and the amount as so altered shall be the sale value of the goods for the purposes of this act.”; and
– I move -
That the amendment be agreed to.
This is merely a drafting re-arrangement of provisions which are already in the bill. The proviso in paragraph a of the amendment was drafted while the bill was in committee in another place, and in the hurry of drafting, the fact that there was already a proviso to section 18, 1 was overlooked. This amendment will place the several provisions in their proper order.
Motion agreed to.
Senate’s amendment. - Insert the following new clause: - “ 5a. Section twenty-six of the principal act is amended hy omitting from sub-section (2.) the portion commencing with the word Where ‘ and ending with the words ‘ to be a bad debt ‘, and inserting in its stead the words -
Where a registered person has sold goods upon the sale value of which he has paid tax, and has subsequently written off as a bad debt the whole or any part of the amount for which the goods were sold, the Commissioner may -
– I move -
That the amendment be agreed to.
Under the existing law a refund of tax is made where there is a sale of goods which is subsequently written off as a bad debt, and the refund can only be made where tax has been paid on the amount for which the goods were sold. The bill now contains several’ provisions which have the effect of imposing the tax on amounts other than the sale price of goods, for example, on the wholesale selling value of goods which a manufacturer sells by retail. It would be inequitable to refuse a refund of tax where a manufacturer incurs a bad debt in respect of goods which he has sold by retail, and upon which he has paid tax on some other value than the actual sale price. This amendment will enable refunds to be made in any case where goods upon which sales tax has been paid have been sold, and the whole or any part of the sale price has subsequently been written off as a bad debt. A similar amendment is included in Assessment Bills Nos. 2, 3, 6 and 7.
Motion agreed to.
Clause 9 -
After section 70 of the principal act the following sections are inserted: - 70a. Where an agreement for the sale of goods has been made, whether before or after the commencement of this section, and, after the date of the agreement, an alteration has taken place in the rate of sales tax, as the result of which the amount of tax payable upon the sale value of any goods sold in pursuance of the agreement is affected, then, unless the agreement contains express written provision to tho contrary, or it is clear from the terms of the agreement that the alteration of the rate of tax has been taken into account in the agreed price of the goods, the agreement shall be altered as follows: - “70c. - (1.) In the case of a sale of goods by a taxpayer by reason whereof he becomes liable to pay sales tax, the taxpayer shall state upon the invoice delivered by him to the purchaser in respect of the transaction the amount of sales tax payable in respect thereof.
Penalty: One hundred pounds. (2.) The taxpayer shall have the same right to recover from the purchaser the amount of the sales tax payable by him and stated upon the invoice as he has to recover the price or other payment for or in respect of the goods.”
Senate’s amendment. - Leave out “ to the contrary” proposed new section 70a, insert “ that the price at which the goods shall be sold shall not be altered on account of sales tax or any alteration in the rate of sales tax.”
– I move -
That the amendment be agreed to.
In some cases which have been brought under notice, sales which will be subject to the increased tax of 6 per cent, are being made under contracts which were made years prior to the inception of sales tax, and contained provisions to the effect that the agreed prices should not he altered unless an alteration in the marketprice of the goods took place. Such contracts might be construed aB containing express provision to prevent the vendor from adding the increased sales tax to the agreed price. It is considered that vendors should not be called upon to bear the full burden of the tax in cases where they fixed their prices without any knowledge that the Governmentintended to introduce the sales tax. Some such vendors have carried the burden of the 2£ per cent, tax for the last twelve months, but the increase of the rate of tax to 6 per cent, is so serious that vendors, in some cases, will be unable to continue in business unless something is done to enable them to pass on the tax to their purchasers. It is considered, however, that where the parties to a contract specifically agree that the prices shall not be altered on account of sales tax or of any alteration in the rate of sales tax, they should be bound by their agreement. The effect of the amendment will be that unless the parties to a contract have incorporated some such specific stipulation in their contracts, a vendor selling goods on or after 11th July under a contract entered into prior to that date will be in a position to. pass on the increased rate of 3£ per cent, to his purchasers.
Motion agreed to.
Senate’s amendment. - After “ goods “, subsection 1 of proposed new suction 70c, insert “ by wholesale “.
Amendment agreed to.
Senate’s amendment. - Leave out “ the taxpayer “, sub-section 2 of proposed new section 70c, insert “Notwithstanding anything contained in section seventy a of this act, the taxpayer “.
– I move -
That the amendment be agreed to.
This amendment will ensure that after the commencement of the amending act every vendor who sells goods by wholesale will be entitled to recover from the purchaser the full amount of the sales tax payable by him in respect of the sale. That was the intention of new section 70c which is inserted :by clause 9; but it has been pointed out that, as the bill is drafted, new section 70c might be construed as applying only to sales to which new section 70a does not apply. To ensure that that construction shall not be given, it is considered advisable to provide expressly that new section 70c shall apply notwithstanding anything contained in new section 70a. The effect of the amendment on new section 70a will be that that section will only be applicable for the following purpose: -
Motion agreed to.
Section seventy-three of the principal act is amended by omitting paragraph (a) and inserting in its stead the following paragraph : -
for prescribing cases in which refunds may be made for the purpose of obviating double taxation of the sale value of any goods under one or more acts relating to the payment of sales tax, and cases in which payments in respect of tax included in the purchase price of goods may be made to the purchaser of those goods; and”.
Senate’s amendment. - Leave out, “ in respect of tax included in ‘the purchase price of goods may be made to the purchaser of those goods “, insert “ for that purpose may be made to the purchaser of goods where sales tax has been included in the purchase price of the goods, or has been passed on to the purchaser in any other manner “.
Hr. BRENNAN (Batman- AttorneyGeneral) [6.24] . - I move - That the amendment be agreed to.
This amendment is for the purpose of expressing the intention of the clause in clearer terms. The object of the part of the clause with which the amendment deals,- is to enable rebates to prevent double taxation to be made to a person who has had sales tax passed on to him, notwithstanding the fact that he is not technically a taxpayer.
Motion agreed to.
Verbal amendment to clause 12 agreed to.
Clause 11 -
The first schedule to the principal act is amended -
by inserting . . . the items -
Senate’s amendments -
Insert “Agricultural and mining machinery, and implements, including er…. and duplicate parts “.
Insert “Materials for use in the manufacture of spraying and wheat pickling preparations.”
.- I move-
That the amendments be disagreed to.
The amendment which provides for the exemption of “ agricultural and mining machinery and implements, including spare and duplicate parts “ would, if persisted in, mean a loss of revenue for the current year of approximately £200,000. The additional exemptions already granted by the Government since the estimates of revenue from sales tax for the current financial year were taken out, will result in a reduction of the estimated revenue by from £500,000 to £750,000. If the £200,000, involved in the exemption of agricultural and mining machinery, is added to the loss resulting from the exemptions already granted, it will be necessary for the Government at an early date to increase the rate of sales tax all round, with the consequence that the general public, including those who are now claiming the benefit of this exemption, will have to make up the loss involved by the granting of the exemption. The support given to the claim for this exemption on the ground of the existing exemptions of tobacco, cigars, wines, &c, are based on an entire ignorance of the incidence of the special duties of excise and customs which have been imposed on those commodities. The excise dutiesimposed last year on tobacco, cigars, cigarettes, &c, amounted to increases of duty of from 50 per cent, to 75 per cent., and the customs duties which were imposed in respect of importations of similar goods amounted approximately toadditional duties of 50 per cent. TheSales Tax Assessment Acts Nos. 1 and 5r in substance, impose duties of excise and of customs respectively. Any possiblefield of revenue from sales tax to be received from such commodities was .excluded by the fact that customs and excise proper had already occupied the whole of the possible field of taxation. The Government realizes that the sales taxation which is being imposed is severe and onerous. I assure the committee that every possible exemption has been most carefully considered. In view of the fact that the committee previously discussed and rejected a proposal to exempt agricultural and mining machinery, it would be embarrassing for it to recede from that position.
The amendment which provides for the exemption of “ materials for use in the manufacture of spraying and wheat pickling preparations “ would, if granted, involve a loss of revenue of approximately £5,000. It would be extremely difficult to justify exemption of these materials, iri” view of the refusal of exemption to other classes of goods equally worthy of consideration, e.g., sheep dips, other insecticides, and manufactured spraying preparations.
.- I support the amendments made by the Senate. It appears to me that while a sales .tax for revenue producing purposes can well be levied on finished products such as boots, hats and similar articles, it is entirely wrong to impose it upon machinery which is used for primary producing purposes. It merely adds to the cost of production.
.- I agree with the honorable member for Gippsland (Mr. Paterson) that it is desirable that no taxation should be imposed that increases the cost of production. I should like to see explosive^ for mining purposes added to the list of exemptions.
– The honorable member cannot deal with that subject now.
.- I support the amendment made by the Senate. When speaking on the Wheat Marketing Bill I said that I would support the exemptionof agricultural implements from sales tax as one means of affording relief to the wheat-growers.
– Ordinarily, I am prepared to support any measure to assist the primary producers and reduce their costs of production, but if agricultural and mining machinery were exempted from the sales tax, the revenue would suffer to the amount of £200,000, which would have to be recouped by increasing the rate of sales tax on all other sections of the community. In the long run, even the primary producers would not benefit from such a procedure. Under existing circumstances, it would not be fair to tax all other sections of the general public at a higher rate than 6 per cent. in order to exempt the agricultural and mining communities. I shall vote against the Senate’s amendment.
Motion agreed to.
Resolutions reported ; report adopted.
That Mr. Brennan, Mr. Blakeley and Mr. A. Green be appointed acommittee to draw up reasons for the House of Representatives disagreeing to amendments8 and 9.
.- On behalf of the committee I bring up the following reasons, and move that they be adopted : -
As to amendment No. 8. - That it would involve a serious loss of revenue amounting approximately to £200,000.
As to amendment No. 9. - (1) That it would involve a loss of revenue amounting approximately to£ 5,000: (2) That it would amount to discrimination against the manufacturer of prepared sprays.
Motion agreed to; reasons adopted.
Sitting suspended from 6.36 to7.30 p.m.
(Nos. 2 to 8) 1931.
Bills returned from the Senate with consequential amendments.
In committee (Consideration of Senate’s amendments):
Consequential amendments to clauses agreed to.
Amendments to schedule disagreed to.
Resolutions reported; report adopted.
Reasons for disagreeing to amendments to schedule adopted.
Bill returned from the Senate without amendment.
SALES TAX BILLS (Nos. 1 to 9) 1931.
Bills returned from the Senate with requests.
In committee (Consideration of Senate’s requests) :
On motion (by Mr. Brennan) the requested amendments were made.
Resolutions reported; reports adopted.
Sitting suspended from 8.14 to 11 p.m.
Bill returned from the Senate without amendment.
Bill returned from the Senate with a message intimating that the Senate did not insist upon its amendments disagreed to by the House of Representatives.
Bill returned from the Senate with a message intimating that it had agreed to the amendments recommended by the Governor-General, and made by the House of Representatives.
SALES TAX BILLS (Nos. 1 to 9) 1931.
Bills returned from the Senate with a message intimating that it had agreed to them as amended by the House of Representatives at the request of the Senate.
(Nos. 2 to 8) 1931.
Bills returned from the Senate with messages intimating that the Senate did not insist upon its amendments disagreed to by the Hou3e of Representatives.
Motion (by Mr. Brennan) agreed to -
That the House, at its rising, adjourn until Wednesday, 16th September, 1931, at 3 o’clock p.m., unless Mr. Speaker shall, prior to that date, by telegram addressed to each member of the House, fix an earlier day of meeting.
Motion (by Mr. Blakeley) - by leave - agreed to -
That leave of absence be given to every member of the House of Representatives from the determination of this sitting of the House to the date of its next sitting.
The following paper was presented: -
Public Service Act - Regulations amended - Statutory Rules 1931, No. 8o.
Sitting suspended from 11.17 p.m. to 12.1 a.m. (Friday).
– by leave- To-day the honorable the Deputy Leader of the Opposition (Mr. Latham) asked the Minister representing the Prime Minister a question without notice relating to certain returned soldier employees, including two limbless men, of the Federal Taxation Office, Melbourne. I have made inquiries, and find that the Public Service Inspector in Melbourne has pointed out that it is necessary to dismiss seven returned soldiers, including two limbless soldiers, in order that they may be replaced by permanent officers from other departments whose services are not required by those departments on account of diminution of work, and who are being transferred to the Taxation Department. Under this arrangement, four returned soldiers mentioned would be replaced on the 19th August, 1931, and the remaining three on the 30th September, 1931. The Second Commissioner of Taxation reports that the returned soldiers have given good service for some years, and would not be dismissed in ordinary circumstances. The matter is before the Prime Minister, as Acting Treasurer, for consideration, and has not yet’ been dealt with.
– by leave- To-day the honorable member for Balaclava (Mr. White) asked the Minister representing the Prime Minister a question without notice regarding the position of the Commonwealth in relation to the AngloGerman Civil Procedure Convention of 1928. As promised, I have made inquiries, and have ascertained that this convention, which provides for the reciprocal facilitation of the conduct of legal proceedings between persons resident in the territories of Great Britain and Germany, is under reference to the State governments for consideration as to whether they are prepared to give effect to the provisions of the convention with a view to its extension to Australia. Replies have so far been received from Victoria, Queensland, Western Australia, and Tasmania, and action is being taken with a view to expediting the conclusion of this matter. The matter is also receiving attention so far as the territories of the Commonwealth are concerned. Similar conventions with France and Belgium are in operation in Australia, and conventions with Czecho-Slovakia, Spain, and Sweden, in addition to Germany, are at present under reference to the States. The Commonwealth Government, of course, cannot take any final action with a view to the extension of the Anglo-German Convention to Australia until the necessary machinery for giving effect to it has been brought into existence in the States and Territories.
– by leave- To-day the honorable member for Calare (Mr. Gibbons) asked me a question without notice as to when clients of the Government Savings Bank of New South Wales, including home-buyers and farmers, might expect a reduction of interest payable by them on moneys advanced by the bank. I now desire to inform the honorable member that no information on the subject has been received by the Commonwealth Government
– I move -
That tha House do now adjourn.
Although this is not a Christmas adjournment, it is fitting, as we are about to go into recess for several weeks, that I should pay a tribute, on behalf of all honorable members, to the Hansard staff, the clerks at the table, and the other officers of the House, for the excellent work that they have done under most trying circumstances. Every one of us has felt the heavy strain of the last few months. We should, therefore, be the more appreciative of the splendid work that has been done during that period by our officers.
.- On behalf of the honorable members who sit on this side of the chamber, I join in the expression of appreciation of the Minister for Home Affairs (Mr. Blakeley) of the work of the Hansard staff the clerks at the table, and the other officers of the House. We have been sitting for several months, for four days a week, and the pressure upon the officers whom I have mentioned has been particularly severe. Their work has been done, however, with that efficiency and success to which we have become accustomed, and the least we can do is to express our sense of the value of’ their services.
Question resolved in the affirmative.
House adjourned at 12.3 a.m. (Friday) until Wednesday, the 16th September, 1931, at 3 p.m.. unless previously called together by Mr. Speaker.
Cite as: Australia, House of Representatives, Debates, 6 August 1931, viewed 22 October 2017, <http://historichansard.net/hofreps/1931/19310806_reps_12_131/>.