12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took the chair at 3 p.m., and offered prayers.
– I have received from Mr. Stott, secretary of the Wheat-G rowers Protection Association, the following telegram : –
Bounty ‘ on production basis unsuitable wheat-growers. This will lose £1,000,000 to wheat-growers in all States. On productionbasis Queensland benefits; on export basis the extra finance goes to exporting States.Export bounty will automatically raise home prices. This provides sufficient benefit to Queensland.
I ask the Minister for Markets and Transport the reason for the Govern- merit’s decision to pay the £3,000,000 wheatbounty on a production basis instead of on an export basis as originally proposed? Has consideration been given to the fact that payment on an export basis would automatically raise the price of wheat for home consumption throughout Australia?
– The Government has not. come to any definite decision ; the matter is still receiving full and careful consideration.
– I ask the Prime Minister whether the Government intends to make funds available for the relief of the unemployed over the Christmas period, as was done last year?
– Honorable members must be aware that the Government is endeavouring to get works started for the relief of the unemployed much earlier than Christmas. Being unable to approach the loan market at the present time, the only other source of help is the banks, which the Government has been approaching consistently and persistently.
– That is all the Government has been doing.
– What else would the honorable member do?
– I ask the Prime Minister whether the Government intends to re-appoint as a member of the Commonwealth Bank Board. Mr. C. H. Reading, whose term will expire shortly? If not, why not?
– It is not customary to announce matters of government policy by way of answers to questions.
– Some time ago the Postmaster-General informed me that in future the cost of lighting the post office clocks in Melbourne, Sydney, and Adelaide would be borne by the local authorities, and not by the Government. Has effect been given to that decision?
– I shall make inquiries, and let the honorable member have the latest information.
– Last week I asked the Minister for Markets and Transport a question regarding shipping freights to the Far East. He informed me that he was giving to the matter full, careful and earnest consideration. Has he vet done anything?
– The answer I gave last week was full and complete. I advise the honorable gentleman to refer to it.
– by leave - Before the recent adjournment of the House, the honorable member for West Sydney (Mr. Beasley) had recorded in Hansard a statement dealing with the Canberra Hog Farm, which, in the main, was an attack on an officer of my department. The whole of the assertions contained therein have been personally investigated by me, and 1 find, as a result of this inquiry and a perusal of the departmental papers, that on the whole, the allegations are either a distortion of facts or untruths. In respect of the farm occupied by Mr. Dennis, the statement included about 25 definite allegations of which, I find, not one is correct.
With regard to the farm occupied by Mr. Coles, I find that the officer named was not responsible for the establishment, of the farm, or for any constructional work other than fencing. On the administrative side, there is no question that everything possible was done by him, both during the time the farm was being developed, and subsequently to assist the lessee and to protect the interests of the Commonwealth and the lessee. The documentary evidence in the departmental papers in support of this includes tributes from the lessee immediately prior to his occupation in 1929 and recently, and there is no evidence that any matter bearing on the farm has been neglected by the officer concerned.
It is admitted that some delay in the development of the existing farm occurred. This was recognized before the lessee went into occupation, and at a conference with him and his solicitor, it was agreed that as compensation for this delay, the lessee should receive a rebate of rental for a period covering the first three months of his occupation. Some time after Mr. Coles entered into occupation, he revived the subject of the delay in granting him possession of the land, due, in my opinion, to the depression in the pig industry, and also to the fact that the lessee’s financial backing had not been realized. In order to meet the lessee, and recognizing that the Administration was obtaining a service in the removal of wet garbage from hotel and boarding establishments, Mr. Coles’ rent-free occupation of the farm was extended until the end of 1930. It was also agreed to refund the amount of £121 6s. lid. paid by him- as a deposit when he accepted the lease. At a later stage, the Administration agreed to remit the rental due to the 31st December, 1931, and in addition, waived its claim to an amount of £25 6s. 7d., due to it under the terms of the lease for the supply of water to the farm. It will be seen that, up to date, no rent has been received by the Commonwealth from this undertaking. A considerable amount has also been expended by the Administration in endeavouring to supplement the water supply and in alteration of the feeding system, and at the present time further representations by the lessee are receiving consideration..
I do not doubt, for one moment, the bona fides of the honorable member for West Sydney in bringing this matter before the House. I do, however, take - the greatest exception to the honorable member’s informant supplying him with particulars which are proved to be false, apparently with the object of damaging the reputation of one of my officers. Officers of the Service have no means of refuting allegations made against them in the House, and I feel I would be remiss in cay duty to my staff if, after satisfying myself that the allegations are false, I did not refute them in this House. The statement made by the honorable member on information supplied to him is damaging to the reputation of Mr. Brackenreg. 1 take this opportunity of assuring the honorable member that he has been misled, and of making public the fact that all the allegations regarding Mr. Brackenreg are groundless. Mr. Brackenreg, who is a reliable officer, has carried out his duty as a government servant in- a most creditable and honorable way, and there is not the slightest justification . for the attack which has been made upon him.
– It has been reported ‘ in the press recently that the Government has been in communication with the banking authorities with a view to pegging the exchange at a rate lower than that at present prevailing. Will the Treasurer say if action has been taken in this matter?
– There has been a full discussion between the Prime Minister and myself, and representatives of the Commonwealth Bank Board. At present it would be inadvisable to make a statement as to the nature of the discussion and the points that were under consideration ;. but a representative of the Commonwealth Bank Board is to consult with the representatives of the trading banks, and some action will be taken later with regard to the exchange rate. An announcement will then be made. The Government and the Commonwealth Bank Board agree that it would be inadvisable at the present time to make any change that would cause too sudden a change in the existing rates.
Deductions for Unemployment Relief Tax
– As payment of State unemployment relief tax is allowable as a deduction in respect of federal income tax in some States, and not in others, and as this discrimination is contrary to the spirit of federation, I should like to know if the Treasurer will take steps to rectiify this anomaly by allowing State unemployment relief tax as a deduction for federal income tax purposes in all States?
– The matter mentioned by the honorable member has been under consideration. It is not strictly accurate to say that there has been discrimination between taxpayers of the various States in respect of allowable deductions for federal income tax purposes. There is a wages tax, or impositions in the nature of a wages tax, operating in Victoria, New South Wales and Queensland, and so far such payments have not been allowable deductions for federal income tax purposes. In South Australia, Western Australia and Tasmania, the additional revenue required to finance unemployment relief is incorporated in the ordinary income ta* law. Therefore, payments made in thai way are allowable deductions. Thi1 matter has been brought under the notice of the Federal Commissioner for Taxation, who has undertaken to reconsider the decision which he gave with regard to unemployment relief tax payments in Victoria and the other States.
Mr.WHITE. - In the absence of the Minister in charge of war service homes, I ask the Prime Minister if it is a fact that a committee is being appointed to consider whether “ relief can be given to ex-soldiers who are in arrears with their repayments for war service homes, and if so have representatives of the United War Service Homes Purchasers Association been invited to become members of the committee? In view of the urgent need for relief, will the Minister say when the committee will meet? -
– There is no foundation whatever for the newspaper statements that the appointment of a committee is contemplated to consider the matter mentioned by the honorable member. A sub-committee of Cabinet is dealing with the whole position. An inquiry into individual cases is necessary, and, as the Assistant Minister in charge of war service homes has already announced, every case of individual hardship is being dealt with on its merits. Every case of hardship is being met, and, where possible, relief will be given. The sub-committee of the Cabinet is going into the question of whether general relief is possible; but a complete and permanent writing-down of the capital cost of war service homes, amounting in the aggregate to about £28,000,000, at a time when nobody can say with any degree of accuracy what is the real value of property, is not contemplated, because such a suggestion is unsound. I agree that a position of great difficulty is arising, and we are considering that aspect of the matter with a view to making the burden as light as possible for all concerned. We have already reduced the rate of interest by 1 per cent.
– By½ per cent.
– It has been reduced by 1 per cent, in the case of loans to the States for soldier settlers, and by½ per cent, in the case of purchasers of war service homes. The interest charged to the various State Governments in respect of advances to soldier settlers is now 4 per cent., and the State Governments make an additional charge for administration. The Commonwealth Government is charging 4 per cent, interest on war service homes and½ per cent, for administration. The relief by way of reduction of interest by ½ per cent, is undoubtedly going to returned soldiers in the case of occupants of war service homes, and some relief will, 1 believe, be given to returned soldier settlers.
– Has the reduction of 1 per cent, in the case of soldier settlers been passed on?
– I think only part of it; a portion is going to administration.
– What safeguards are being adopted to ensure the State Governments will pass on the relief to returned soldiers ?
– We trust that the State Governments have as great a sense of honour as any other administration, and will pass on the relief given by the Commonwealth Government. We havenot yet been able to ascertain the exact figures involved in regard to war service homes, but we are giving consideration to the question whether some relief could not be given in respect of payments on account of principal for, say, a period of twelve months where the circumstances warrant such action.
– All valuations are down.
– I have already pointed out to the honorable member that no one is in a position to place an equitable value upon property to-day.
– The municipalities are doing it.
– It is impossible, under existing conditions, to value war service homes in a. way that would be fair to the buyer, the Government, and the community. I also remind the honorable member that municipal valuations for rating purposes may rise and fall from year to year ; whereas a writing down of values of war service homes for Commonwealth purposes would be permanent. There is therefore no analogy between municipal valuations for taxation purposes and Commonwealth valuations for repayment’ purposes. The Government is considering the whole question of capital costs, but I do not see how it is possible to write them down permanently at this stage. Values are fluctuating so greatly that no government, with a sense of responsibility, would undertake the task.
Relief Work in Federal Capital Territory.
Mr.WARD. - Can the Minister for Home Affairs inform the House whether award rates and conditions are at all times observed on relief work carried out in the Federal Capital Territory?
Allegations of Sweating
– I ask the Prime Minister, if, in view of the repeated allegations of sweating in the clothing and textile industries, published in the Melbourne Age newspaper, the Government will consider the necessity of appointing special inspectors to police arbitration court awards?
– The AttorneyGeneral’s Department is in communication with the Registrar of the Arbitration Court, who has been asked to furnish a report upon the matter.
Dissenting Bondholders: Interest on Unconverted Stock.
– I have been approached by a lady who is a holder of Commonwealth Bonds, amounting to £900, which have not yet been converted, and asked to . inquire if, in the event of her consenting to convert the holding into the recent’ Commonwealth debt conversion loan, it will be possible for the Treasurer to arrange for the repayment of the loan in 1988?
– Provision has been made in the conversion operation to enable the Loan Council, and, by delegated authority, the chairman of the Loan Council, to arrange for the consolidation of smaller amounts, such as the one mentioned by the honorable member, to mature at the earlier dates provided for under the conversion plan.
– Is £900 regarded as a small amount?
– Yes, all amounts under £1,000 arc so regarded. The chairman of the Loan Council has authority also to include sums exceeding £1,000 where special circumstances warrant such action.
– Is it a fact that interest accruing since July on bonds or inscribed stock, the holders of which have dissented from conversion, has not yet been paid, and. if so, can the Treasurer say when it will be paid?
– I understand that the position is that in cases where halfyearly dates for the payment of interest have occurred since the conversion loan was launched, the rate of interest payable to those who have dissented is that which would have been payable had the holdings concerned been converted. This course has been adopted pending a final decision as to what shall be done with the unconverted portion of the outstanding loans.
– Am I to understand that interest due on unconverted holdings in the loan which matured on the 15th August has been reduced to 4 per cent., and that the amounts due have been paid ?
– The rate of interest that has been paid is in accord with the rate provided for under the conversion scheme. It would depend upon the interest payable on the original bonds whether the rate paid was 4 per cent, or a little higher than 4 per cent.
– The interest has not been paid at all.
– The dissenting bondholders to whom interest has become due have been paid the rate which would have been payable to them had they converted. ‘
– Is the Prime Minister yet able1 to supply me with the information, for which I asked the week before last, with regard to the amount of unconverted securities and the dates of maturity?
– I made inquiries on that subject this morning. The information which the honorable member requires is still being prepared.
– I direct the attention of the Treasurer to the very deserving case of Mr. P. A. Hendrick, which is typical of many cases. This man holds an overdue New South Wales bond, which matured on the 10th August last. I ask what steps- have been taken by the Com- monwealth Government or the Common- wealth Bank to relieve such bondholders who cannot obtain money in respect of their bonds?
– Provision was made for the conversion of that loan in the conversion scheme, and a considerable amount of the holdings in that loan were converted; but some dissent notices were received. The mode by which unconverted bonds will be dealt with is now under consideration, and a proposal will be submitted to Parliament in regard to it in the course of a few days.
Mr.R. GREEN.- In view of the fact that the Senate will resume next Wednesday, has the Government given any consideration to the practicability^ of subdividing the tariff schedule into parts, so that the members of another place may be able to enter upon their discussion of the tariff items without waiting for the completion of the whole schedule by this chamber ?
– Consideration has been given to that matter. The Government desired to divide the schedule into two parts, and submit the business to another place in two separate bills with the object of facilitating the discussion there; but when the proposal was carefully investigated it was found that the practical difficulties were too great. It would impose a very great strain upon the departmental officers concerned in this business to watch the passage of the schedule through two Houses at the one time. I am afraid, therefore, that we shall have to abandon that idea. But, with the co-operation of all honorable members, this House could complete its discussion of the schedule in about two weeks.
Australian Short-term Indebtedness.
– Will the Treasurer inform me whether there is any truth in the reported statement that the Commonwealth Government will be asked to pay an increased rate of interest of between 2¼ per cent, and 2¾ per cent, for a renewal of treasury-bills to the value of £5,000,000, which mature with the Westminster Bank to-day?
– The treasurybills with the Westminster Bank, which cover obligations of certain’ State governments, mature to-day, and arrangements have been made for their renewal for three months at an increased rate of interest.
– Will the Minister for Trade and Customs announce the names of the members of the Cabinet sub-committee, which approved of the duties contained in the schedule now under discussion?
– It is not usual to make statements in Parliament about happenings in Cabinet.
– Is the Prime Minister aware that at least one State Minister has announced that there is no obligation on State governments to passon the reduction of 1 per cent, in the interest on loans for soldier settlement in cases where the interest charged to the settler does not exceed 5 per cent? If so, is that statement in accord with the decisions of the Premiers Conference? Will the right honorable gentleman also say whether there is any honorable understanding or agreement among the members of the conference to the effect that the full reduction in interest will be passed on to the settlers?
– When the reduction was made in interest rates the Commonwealth Government reduced by 1 per cent, the rate of interest on all moneys advanced by it to State governments for soldier settlement purposes. It was pointed out at the Premiers Conference, that some of the governments had not been charging for administration, and it was felt that they were entitled to do so ; but I did not understand that that charge would in any case exceed one-half per cent. My impression was that at least one-half per cent, reduction would be made in the interest charged by State governments on all moneys which they had advanced for soldier settlement purposes.
– I ask the PostmasterGeneral if any proposal has yet been received by the Government from the National Broadcasting Company or any other company concerning the future control of “ A “ class stations, and, if so, will he give honorable members an assurance that, before any new agreement is ratified, it will be brought before the House for discussion?
– The question is under discussion.
– Can the Prime Minister inform me, whether any new broadcasting proposals have been actually received by the Government?
– No new proposals have yet been received, because the Government has not yet invited any one to make them. That matter has not yet been dealt with.
– I have received a letter from the widow of the late Hon. Hugh Mahon, thanking the House for its resolution of sympathy.
– In reply to an inquiry made by the honorable member for
Corangamite (Mr. Crouch), on the motion for the adjournment of the House on Friday, I am pleased to be able to advise honorable members that ten additional copies of the Macmillan report have been secured by the Library from the Prime Minister’s Department, and these are now available for use. In view of the very great demand for this report, I ask honorable members not to retain copies longer than is absolutely necessary.
– I have received from the honorable member for Wimmera (Mr. Stewart) an intimation that he intends to move the adjournment of the House this afternoon for the purpose of discussing a definite matter of urgent public importance, viz., “ The failure of the Government to give effect to the Wheat Advances Act 1930 “.
Five honorable members having risen in their places,
.- I have moved the adjournment of the House because of the statements that have been made that, as a result of the recent Premiers Conference, it is proposed to distribute £3,000,000 in relief to the wheat-growers of Australia, as a bounty upon the coming crop. I am aware that legislative proposals will come before the House which will give honorable members full opportunity to discuss matters relating to the wheat industry, and I do not intend to anticipate them. My reason for sponsoring this motion is to ask for a definite statement from the Prime Minister (Mr. Scullin) in answer to a question that is being asked by wheatgrowers from one end to the other of the Australian wheat belt : “ Why is the Government coming forward with proposals for relief in connexion with the comingcrop before it honours its obligation to growers with regard to the last wheat crop?”
– Does not the honorable member want any relief for this crop?
– If the honorable member will listen I shall try to make clear what I think the wheat-growers want. A brief review of the attempts of the Government to assist ‘the wheatgrowers of Australia is necessary in order fully to assess the position. In February, 1930, the Prime Minister made an appeal to the growers of wheat throughout the Commonwealth to “ Grow more wheat.” That was backed by a “ Grow more wheat” campaign sponsored by the various State governments. Associated with the appeal was a projected guarantee of 4s. per bushel of wheat, cash on delivery at railway sidings. A bill to give effect to that guarantee was brought before Parliament and passed this chamber, but was rejected in another place.
– By members of the Country party.
– I am not going, into details. I am merely mentioning facts. I make no party issue of this matter, and am not speaking in any party spirit. As a result of ‘the failure to provide that guarantee of 4s. a bushel, a serious position was created in the wheat belt. At the time I moved an adjournment of the House, and appealed to the Government to take action to give some relief to the growers, pointing out that, otherwise, a disastrous state of affairs would arise. I was supported by honorable members on both sides of the House, also by the leaders of all parties. As a result a bill was drafted which provided for the payment of 3s. a bushel f.o.b., of which 2s. a bushel cash was to bc paid at local sidings. The subsequent payment, on the basis of 3s. a bushel f.o.b., would have given to the growers an average of 2s. 4d: a. bushel at country sidings. That measure passed both Houses, on the voices. Certainly there was criticism regarding details of the bill, but the main principle - that of granting assistance to the wheat-growers - was supported by the leaders and members of all parties in this House and in another place, lt received the Royal Assent on the 23rd December last, and is still upon the statute-book, but its provisions have not yet been honoured by the Government. Not one wheat-grower has received a penny as a result of the passage of that legislation. The reason given for the non-fulfilment of the terms of that act is that the Commonwealth Bank stated that, under the provisions of the measure, it could not adequately secure itself for repayments of any advances made. I am somewhat hazy, and I think most people are, as to the actual reasons which prompted the Commonwealth Bank to refuse to provide the money, but I shall not go into details. All I and the growers of wheat are concerned with is that the money has not been paid.
– It is no use gliding over the difficulties.
– I do not intend to do so. The Prime Minister or the Minister concerned will have an opportunity to reply to my motion, and I am confident he will not attempt to glide over the difficulties. A definite authoritative statement should be made in connexion with the non-fulfilment of the terms of that measure.
There is a further bill, of which notice appears on the business-paper. This, the Prime Minister has definitely stated, will not be proceeded with further.
It is a short measure to provide for an advance of £6,000,000, £2,o00,000 of which was to go to necessitous wheat-growers, the remaining £3,500,000 to be ‘paid as a bounty at the rate of 6d. a bushel.
The latest proposal emanating from the recent Premiers Conference is a projected bounty of 6d. a bushel on export wheat. The point that I desire to emphasize, and that governs ray action in moving the adjournment of the House, is that it refers only to the coming crop, and makes no reference whatever to that of last season. As a result of the appeal to the growers of Australia, a crop was produced last year estimated to be 212,628,699 bushels, of which approximately 198,000,000 bushels was marketed by the growers at au average price of about ls. 9d. a bushel at country sidings. The difference between that price and the 4s. a bushel guarantee that had the approval of this House is 2s. 3d. In other words, the farmers received less than half the amount that they expected when the crop was sown. Assuming that the growers lost 2s. 3d. a bushel on the 198,000,000 bushels marketed last year, their collective loss on that crop amounts to £22,275,000. The trouble is that the debts incurred by the farmers because they did not receive that money have not yet been liquidated. Unfortunately, many hundreds of them in all parts of the Commonwealth have been driven off the land, their properties have been sold, and there is no more pitiable sight than the mortgagees’ sales in the wheat belt to-day. There we have the spectacle of hard-working men, who need never har,been sold up, going off their properties practically without a penny, because the assistance promised them by the Government has not been forthcoming. Th? land and farming plant are, in most cases, sold for much less than their value, because, everybody being in an impoverished condition, no” one can afford to pay much for anything.
The farmers cannot get credit, and they are now faced with the task of taking off the coming crop, an expensive undertaking which is beyond their resources. I have here two telegrams received from different areas in my constituency, and the condition described in them is typical of that prevailing throughout the wheat belt, not only in Victoria. but in the other’ wheat-growing States of the Commonwealth as well. My friend, the honorable member for Swan (Mr. Gregory), has informed me that the same state of affairs obtains in Western Australia, and I know that things are no better in New South “Wales and South Australia. The first is from the wheat-growers’ association at Berriwillock, and is as follows: -
Implore Government’s assistance; facing calamity. Crops cannot be harvested. Banks not financing cornsacks; people’s feeling incensed to limit. Action must bc prompt.
The second is from the secretary of the Wheatgrowers Association at Culgoa, and is in these terms -
Wheat-growers here cannot finance jute goods, duplicates, &c. Assistance imperative and immediate.
The farmers need money to harvest this year’s crop. Apparently a sum of £3,000,000 is available for the assistance of growers, and I urge the Government to make that money available in respect of last year’s crop, so that the farmers may be able to use it to defray harvesting expenses this year. There is a moral obligation, not only on the Government, but also on this Parliament, to see that the farmers receive some assistance in accordance with the terms of the Wheat Advances Act passed last year. The honour of Parliament is involved. I suggest that the Government should proceed with the bill now on the notice-paper, but of which notice of withdrawal has been given. With some amendment of its machinery clauses, that measure would furnish a means of distributing the sum of £3,000,000 which is supposed to be available. Such legislation would be a fair substitute for the 1980 Wheat Advances Act, and would enable the Government to carry out the promises made to the growers. Governments in every other country in the world where wheat is grown have come to the assistance of. the growers. In Canada to-day the Government is making an advance of 5 cents - a small sum it is true - towards trans.portation costs in connexion with the crop now being taken off. In New Zealand the wheat-growers have been protected. On the Continent of Europe, France, Germany and other countries have taken steps to protect and assist the growers. In the
United States of America, action has been taken by the Federal Farm Board to help the wheat-growers. In no other country in the world have the wheat-growers been promised so much, and received so little, as in Australia. Now the Government suggests that the money available should be paid on the coming crop, and regards this, presumably, as honoring the promise made last year in respect of the previous crop. Such a proposal cannot be permitted to pass without protest.
By our action in passing the previous wheat bills, we have created a feeling of expectancy among the growers, most of whom are now smarting under a keen sense of political injustice. If the Minister would adopt my suggestion, it would give the growers finance at a time when they badly need it. To-day, a spirit of indifference, amounting almost to despair, prevails among settlers in the wheat belt. The land is not being fallowed, and the farmers are becoming demoralized through repeated disappointments.
– If the honorable member’s proposal is accepted and adopted in regard to the last crop, will he make a further appeal in regard to the corning crop ?
– I am glad that the honorable member asked that question, because he has reminded me of a point which I was in danger of forgetting. We know that a definite loss was incurred by growers in respect of the last crop, but we do not know what the price will be for the coming crop. Last week the price of wheat rose 6d. a bushel in the overseas markets, and at the seaports of the capital cities of Australia there was a rise of 4d. to 4½d. a bushel in one week. It is possible that this upward trend may be maintained. I make no predictions, but it is possible. Conditions are unsettled in the Far East to-day. I mention this only as a contingency which may arise. There are rumours of trouble between Japan and Russia in Manchuria. A declaration of war would send wheat prices soaring, in a night. That is a powerful reason why this money should be made available to the farmers to repay them in some slight degree for the definite losses which have occurred. As for the coming crop, we shall have to deal with that when the time comes.
If the banks have made certain stipulations regarding the advance of this money, the Minister should inform honorable members what they are; whether the Government has protested against them; whether it acquiesces in them; what further negotiations are proceeding, or whether it is necessary to approach the banks again. 1 suggest that the leaders of all parties in this House, and in another place, should confer with the Government, decide on a common policy, and should together urge upon the banks the necessity of enabling the Parliament to honour its promises in respect of last year’s crop. This is a matter in which the responsibility of, not only the Government, but also the Parliament is involved. At present, there is an act upon the statute-book that has not been repealed, and to which effect has not been given. This is unparalleled in the political annals of this country. From one end of Australia to the other, the wheatgrowers are asking why effect has not been given to the Wheat Advances Act of 1930. I urge the Minister to make a definite statement to the House regarding the actual position, more particularly with respect to the developments which have occurred since the last conference of Commonwealth and State Ministers, li is true that, brief paragraphs have appeared in the newspapers from time ‘.o time, and that the Minister, in reply to a deputation which I introduced to him in Melbourne, outlined the position as it was at that time; but no official pronouncement has been made in Parliament. I have submitted this motion to enable the Minister to make a complete statement regarding the position, ai<d to say whether it is not possible to make the sura of £3,000,000 available in connexion with the 1930-31 harvest, and thus assist the wheat-growers in financing this season’s crop.
.- T second the motion. I agree entirely with the views expressed by the honorable member for Wimmera (Mr. Stewart). I look upon the present position of the wheat-growers in Australia as one of grave importance. The manner in which they have been treated is a reflection upon the honour of, not only the Government, but the Parliament itself. The
Government’s inactivity seems to savour of something in the nature of repudiation in its ugliest form. I am speaking, not only on behalf of those who have suffered so severely in the past, but in the interests of those who are now faced with tremendous responsibilities. I honestly believe that if action is not immediately taken Australia will find it exceedingly difficult to retrieve its position. Acute distress was prevalent in the new wheat areas in Western Australia in 1912, when the harvest was a failure. In traversing the district at that time I could not help but admire the steadfastness and determination of the wheat-growers, and thu courage and fortitude of their womenfolk. In some instances, I found that the children were being fed on grain and clothed in bags. The majority of those settlers have, in consequence of their determination, since made good; but it was because of the conditions of these people and the high cost of their requirements owing to our tariff policy that I became determined to resist the demands to exploit them further. Since that time further new areas have been opened up for wheat-growing, but owing to the heavy cost of commodities, due largely to the fiscal policy of the Commonwealth, the settlers are faced with difficulties similar to those experienced by others in earlier years. These settlers, who did wot have the slightest opportunity to take advantage of the high pi-ices which ruled after the termination of the war, are now in the wretched position of the growers in 1912 to whom I have just referred. History is repeating itself. The position of many of our wheatgrowers is hopeless. Many of them are bankrupt, and desperate, and unfortunately, others have forsaken their holdings upon which they had hoped u> make homes for themselves and their families. No country can afford to forsake settlers of this class. Their present position has been greatly intensified by their loyalty to their country and their desire to assist the Government.. They listened to the pleadings of the right honorable the Prime Minister (Mr. Scullin) who exhorted them, on many occasions, to produce more wheat, and told them that if they did they would receive the benefit of a guaranteed price. Since this Parliament passed an act providing for the payment of 3s. a bushel f.o.b. the Government has found that finance is not available. A proposal submitted by honorable members on this side of the chamber, to impose a sales tax upon flour, which would have provided sufficient money to pay 3s. a bushel^ did not meet with the approval of the Government. At the time the proposal was- made, I urged the Minister for Trade and Customs (Mr. Forde) to issue negotiable bonds equivalent to 6d. a bushel which would have shown the farmers that the Government was endeavouring to honour its promises.
– Without any gold backing such as the honorable member advocates.
– If the honorable member for Herbert (Mr. Martens) believes in repudiating the pledges made to the wheat-farmers, I do not. An increase in our wheat exports, it was pointed out, would assist in reducing our adverse trade balance, and, consequently, the farmers were urged to produce more. The wheat-farmers loyally responded to the Prime Minister’s appeal and, as a result, their losses are much greater than they otherwise would have been. A record area was placed under crop last year, but this year the area will be reduced at least 25 per cent. In travelling through portion of my electorate, I found many instances in which farmers who had commenced fallowing had later abandoned the work. When I questioned them as to their reason for so doing they replied, “ If we continue it will only mean getting further into debt. Look at the market “. They stated that they were fed up with promises, and demanded the honouring of the Wheat Advances Act. The area under crop this year will probably be 25 per cent, less than last year, and in the following year the reduction may be still greater. At the present price of wheat it is impossible for the wheatgrowers to purchase their requirements or to employ labour, and this is accentuating the financial difficulties confronting the country. The members of farmers’ organizations in- Western Australia and South Australia have definitely stated that owing to the failure of the Government to redeem its promises they intend to hold this season’s wheat. I do not wish to harass the Government iD this connexion. I know the difficulty it has had in connexion with financial matters; but a determined effort should be made by it to honour its promise. The small area that is being placed under crop this year, and which will be further reduced in the following year, is of more significance than the threatened hold-up of next season’s crop. It is the responsibility of Parliament to act promptly in this matter, and I trust that the motion will receive the support of the Government and a majority of honorable members. H; is very easy for the Minister to say that £3,000,000 is to be made available in connexion with the coming season, but payments based on last year’s crop would enable the farmers to place land under fallow as well as to make purchases to assist them in taking off the coming crop. In that way additional employment would be available; more money would be in circulation, not only in the country, but in the cities, and trade generally would be stimulated. The fate of the agricultural industry is largely in the hands of the Government, and in the interests of the nation, it should give immediate effect to the Wheat Advances Act passed last year. It may be advantageous to make a promise with respect to next season’s crop; but the present position of the wheat-growers^ particularly in the new areas in Western Australia and South Australia, where they have experienced several years of drought, is exceedingly precarious. I am hopeful that, as a result of this debate, the Government will make a special effort to see that something is made available to the farmers this year. If the money cannot be advanced through the Commonwealth Bank, I think the Government would be justified in issuing bonds up to, say, 6d. a bushel payable in nine or ten months. If that were done it would not only tend to increase production and make ‘ a considerable addition to the number of people employed this year, but would also give the farmers an opportunity to make preparations for next year.
– As the honorable member for Wimmera (Mr. Stewart), in submitting his motion, confined his remarks almost entirely to the payment of a guarantee of 3s. a bushel,
I do not propose to go very much outside that aspect of the question, except to deal with one or two matters incidental to it. The honorable member said- that no definite announcement had been made as to why this payment of 3s. was not made. I cannot understand why the honorable member should say that, because time and again the Prime Minister (Mr. Scullin) and I have told the honorable member and the country why the payment was not made. But if it be true that the honorable member does not know the reason for the non-payment, it would have been more generous on his part if he had not in hismotion spoken of “ the failure of the Government to provide the 3s.” The honorable member knows perfectly well why the payment was not made. I have the minutes of a deputation, one of many on this subject, introduced to me last week by the honorable member, and on that occasion his words were more generous than they have been to-day. Speaking of the first Wheat Marketing Bill, he said -
I may say that I have discussed the wheat question through and through with Mr. Moloney, and, in justice to him, I want to say that he did everything that a man could do as Minister in charge of the 4s. bill, to get it through Parliament. He did everything possible in my presence to induce senators in the other House opposed to the bill to withdraw their opposition, and he gave away more than I thought he could do in that endeavour. The suggestion has been made that the Government were notsincere in reference to that bill. I think that is an unfair charge, as I believe the Government made every endeavour to implement that promise.
– We are dealing with the next bill.
– It will be seen that there would have been no need for the next bill if the first had been carried. The farmers would have received, not 3s., but 4s. a bushel. I do not suppose that the honorable member for Swan (Mr. Gregory) forgets that he voted and worked against the Wheat Marketing Bill, yet he would have the wheat-growers believe that he stands four-square for them in every effort made to help them. If the honorable member for Wimmera is really serious about the matter-
– Is the Minister suggesting that I am not?
– I am giving the honorable member credit for being sincere. He, in turn, I believe, will give me credit for being sincere in my efforts to help the wheat-growers. I have done everything that I could do, and the Prime Minister has done everything he could do, to let the farmers know exactlythe position of the Government in regard to the 3s. guarantee, and I cannot believe for a moment that there is any great misunderstanding in the minds of the wheat-growers in regard to the matter.
– The point is whether the Government intends to honour the guarantee.
– If the honorable member for Wimmera wants the statement to be made again, I have no objection to making it; but it will be merely telling the wheat-growers what they have been told many times. The honorable member for Wimmera said that the Prime Minister had appealed to the farmers to grow more wheat, and the Government was, therefore, under an obligation to assist them. I said from the beginning, and the Government recognized it, that because the Prime Minister had appealed to the farmers to grow more wheat it was under an obligation to them; and in order to give them some recompense for having responded to the Prime Minister’s appeal, we introduced our first Wheat Marketing Bill. It embraced what was the definite policy of the Government in regard to wheat, and that was to establish a compulsory pool. The honorable member for Wimmera was with me in that; he has been generous enough to admit it; and I also called to a conference other honorable members from all parties in this House. They stood by me throughout all the debates on the bill. To the proposal for a compulsory pool were tacked provisions to provide for a guarantee of 4s. a bushel, and if those provisions had become law, there would have been no further difficulty. The responsibility for any failure to give assistance to the wheat-growers of Australia rests, not on the Government, but. on those senators who rejected the first Wheat Marketing Bill. The Government would have been justified in going no further when that bill was defeated, because it represented its definite policy; but., in view of the fact that the farmers were in a very serious plight, and because the Government was anxious to help them, the then Acting Minister for Markets (Mr. Forde), after conferences with wheat-growers and honorable members opposite, brought down another bill, which provided for a payment of 3s. a bushel.
– That bill was passed through both Houses.
– Yes, and now the honorable member for Wimmera wants another statement as to why the 3s. was not paid. When the bill was passed, the Acting. Minister went to the Commonwealth Bank and asked that the advance should be made available.
– Which he should have done before.
– The Minister had, I understand, made personal representation to the bank. If the Deputy Leader of the Opposition (Mr. Latham) will listen to me, I shall cell him exactly what took place.
– I think I have already beard this speech four times.
– That is just what I have been telling the honorable member for Wimmera. I am saying now what has already been said on several occasions. But, apparently, the honorable member is not satisfied that he has heard it often enough. It is exactly the statement made in the House by the Prime Minister. When the Acting Minister for Markets went to the Commonwealth Bank, the board said that it had received legal advice that, under the Constitution, the bank could not be protected against loss if it advanced the money.
– If there was any defect in the legislation, it must have been in the Commonwealth Bank Act or in the Wheat Act. It could not have been in the Constitution.
– When the Minister consulted the bank, its reply was that its legal advisers expressed doubt as to the power under the Constitution to protect itself against loss. That position has not altered. It has been stated by the Acting Minister for Markets and myself, time and again, and it has been set but by the Prime Minister, I repeat to-day that the bank would not provide the necessary money on account of constitutional difficulties alleged to be in the road.
– Not under the Constitution, but under the terms of the act.
– I laid the papers relating to the matter upon the table in the Library, in reply to questions asked in another place, and honorable members of this House, as well as the members of another place, have perused the documents, and were thus made fully acquainted with the whole position. That is another answer to the allegation of the honorable member for Wimmera that a definite statement has not been made.
– Is the Government now in a position to help the farmers?
– The Government has made a proposal to the banks, and it has, in part, been accepted. The banks are to advance £3,000,000, which they declare is the utmost they can provide. The Government realizes that the farmers are in a serious plight, and nobody could be more willing than the Government is to provide all the money that is considered necessary to help the farmers out of their difficulty; but we cannot produce money by turning a handle.
– Will the Government pay that £3,000,000 on last year’s crop?
– Earnest representations have been made to the banks that the money should be paid with respect to last year’s wheat. That was the unanimous opinion of the conference that was held recently in Melbourne. But those who are providing the money say that they cannot advance it for last year’s wheat. Therefore, the Government had no option but to accept what it could get.
No one knows better than the honorable member for Wimmera that, even after the bank would not provide the 3s. a bushel, the Government endeavoured to relieve the farmers by other means. As honora’ble members know, the bill introduced by the Government to provide for a fiduciary note issue was rejected in another place. Had that bill been passed, the Government proposed under it to raise finance to the extent of £6,000,000 for the relief of the wheat-growers, £3,500,000 to be paid in the form of a bounty, and £2,500,000 to be distributed among necessitous farmers. After the rejection of that measure, the original Wheat Marketing Bill was re-introduced, and although it did not provide for a guarantee, if it had been passed, as honorable members opposite admitted when [ was discussing the matter with them, it would have enabled the Wheat Board to fix the price of wheat for local consumption which, on the estimate of this season’s production, would have provided the equivalent of a bounty of 6d. a bushel. That would have meant 6d. a bushel in addition to the £3,000,000 proposed to be advanced by the banks, so the farmers of Australia would have received an extra ls. a bushel for their wheat. But the Wheat Marketing Bill was again rejected by the Senate. When the honorable member for Wimmera spoke of the failure of the Government, he might have tried to show that tho responsibility lay at the door of those who frustrated every attempt by the Government to help the farmers. The first and second wheat marketing bills, and the proposal for a fiduciary currency, were rejected by the Senate.
– The proposed fiduciary payment was never before the Senate.
– Upon the passage of the Government’s fiduciary currency proposal depended the fate of the scheme to raise £6,000,000 for the wheat-growers. That fact was definitely stated in this House by the Prime Minister (Mr. Scullin). Those three bills were rejected by the Senate, :ind in regard to the other measure, referred to by the honorable member for Wimmera (Mr. Stewart) in submitting his motion to-day, my reply is that when the Commonwealth Bank was approached for the money, it said that its advice was that it could not constitutionally be protected against loss. I remarked to the honorable member at the recent deputation which he introduced to me, “ Suppose you were in my place, and the banks said to you, ‘We cannot provide this money,’ what would you do in the circumstances,” and he replied, “ I realize the great difficulty that you are in.” He knows that if he had approached the bank, as the Government had, and if the bank had declined to advance the necessary money, he might have objected, as the Government did ; but, when we get down to tin tacks, what further could have been done?
The honorable member for Wimmera now has an answer in which the Prime Minister and the Government concur. Everybody can see that it would not be right to build the farmers up with false hopes. They ought to be told definitely, and I wish to make it known to them, that so far as the 33. per bushel is concerned, the position is that the Commonwealth Bank was asked for the money, and it replied that its legal advice was that it should not make it available under the circumstances. I would do anything whatever to relieve the position in which the farmers find themselves to-day. The honorable member for Wimmera admitted at the deputation that I could not have done more than I have done. He has now asked me to make known the present position. My reply is that this Government, in conjunction with the State governments’, has asked the banks to do their ‘utmost to afford relief, and their response is that they will make £3,000,000 available for distribution on the basis of next season’s crop. That is the most that we can get at the present time. I only wish the amount was three times as great.
My final word is that this Government had a definite policy in regard to this matter, and has done everything humanly possible considering that it has control in only one house of this legislature. Had we had control in both branches of the Parliament, the legislation that we have brought forward with the object of assisting the farmers of Australia would have been passed, and they would now be much better off. The failure in that direction must be placed, not at the door of the Government, but at the door of those who have frustrated every attempt that has been made by the Government to relieve the position.
.- The honorable member for Wimmera (Mr. Stewart) brought forward and dealt with his motion to-day in terms to which no exception could be taken. He handled the matter “on purely non-party lines, and made an appeal to the Government to come to the assistance of those whom he directly represents. The Minister for Markets (Mr. Parker Moloney), on the other hand, has, as usual, grasped the opportunity to make a purely party political appeal. The whole of his time was devoted to that object, and he has failed to make the position any clearer than it was before he spoke. Such an utterance will not get us anywhere, nor will it afford relief to those for whom the honorable member for Wimmera has made his appeal. That honorable member made absolutely and emphatically clear the serious difficulties under which the wheat-growers are trying to carry on today. He has shown unmistakably that they are not in a position to undertake the harvesting and marketing of the next crop, and has asked the Government to make the £3,000,000, promised by the banks, available in such a way that the’ farmers will be able to harvest and market that crop.
– Has not the Government endeavoured to do that?
– The Minister for Markets has said that, on statements made by him exactly along the lines recommended by the honorable member for Wimmera, the Prime Minister (Mr. Scullin) made representations to the bank, and that the bank had complied with the request of the^ Government. How can that be, when, as the honorable gentleman has pointed out, there has been no compliance with its terms?
– This £3,000,000 is to be a loan, which will have to be repaid.
– I am merely quoting the
Minister’s own words. At one stage he said that the bank had complied with the request of the Government, and at a later stage that it had not complied with the terms. of the request; and he has placed on the shoulders of the banks the responsibility for the failure of the Government to do what the honorable member for Wimmera asks should be done. The position, as I see it, is that, whether the payment be made with respect to the last or the next crop, we are dealing with the same set of people; and what the honorable member “ for Wimmera has asked is that the Government shall utilize the £3,000,000 in such a way as to place the growers in a better position than that in which they otherwise would be to deal with the coming crop.
– That proposal was made to the bank.
– This assistance is of only a temporary nature, and only touches the fringe of the question. The proposition that has been advanced appeals to me, and I believe that it is a practical one. But it is not sufficient merely to provide £3,000,000 to help the wheat-growers over a temporary difficulty when the market price of wheat is below the cost of production. We have to do something more than meet the position from crop to crop. Honorable members on both-sides of the House have urged that the wheat-growers be put on a better basis for the future. Since the previous proposals of the Government were discussed, it has appointed a secretariat committee on employment and production, and that committee has reported on this very question. After pointing out the serious position of the wheatgrowers - which needs no emphasis - the committee declared that while most export industry was more or less unprofitable at present, it was hoped that much of it would contrive to hold out on credit in the hope of future recovery. The report continued -
The possible exception on a large scale is wheat. There is real danger -that the strain in wheat-growing may be too great.
The present position was set out by the committee as follows : -
The report added -
The future is therefore entirely without hope for a large proportion of wheat-farmers.
The suggestion was made that each State should tackle the problem separately, but on uniform lines, and that a small committee should be appointed representing bankers and mortgage companies, merchants and storekeepers, fertilizer companies, oil companies, and State Governments, to make recommendationsin regard to the- measures that should be adopted to deal with the problem that confronts the wheat-growers. The report also stated -
The necessity for further help will depend largelyon the price realized next season. If the price rises to something over 2s. on the farm, which is not unlikely, it would be just possible for most farmers to hold out with suspension of interest and postponement of depreciation and repairs, but the living would be a very hard one. .
That committee was appointed by this Government, with the approval of all the Governments of Australia, to investigate this and other- questions affecting unemployment, and its report shows the very serious plight in which the wheatgrowers find themselves to-day.
– We are all aware of it.
– Of course we are. What I am trying to point out is that we are doing nothing practical to get them out of their difficulties.
– The honorable gentleman was a member of the Government when the 3s. a bushel was refused by the bank. He knew what the position was then.
– That is so. The Minister has argued that it is useless to talk about making money available if there is no responsibility in connexion with it; that we have to go to the banks for it; that it cannot be obtained by the turning of a handle. A little later, however, he indicated that the Government could have raised the required amount in that way, but that the Senate would not provide the handle to turn it out. The committee from whose report I have quoted has made certain recommendations; and those recommendations* have been largely backed up by a conference of Victorian wheat-growers which met at Bendigo recently, and urged that the Federal Government appoint immediately a committee of agricultural and economic experts to -determine the added cost borne by the wheat-growing industry in Australia, due to legislative action in support of sheltered industries; to report on means of reducing handling, transport, and marketing costs; and to determine the assistance required by the growers to return to them the cost of production pending the resultant effect of the recommendations made.
– The honorable member’s time has expired.
, - In reply to the accusation of the Leader of the Opposition (Mr. Lyons) that the speech of the Minister for Markets (Mr. Parker Moloney) was full of party significance, I remind the House that the motion of the honorable member for Wimmera (Mr. Stewart) refers to- the “ failure “ of the Government to give effect to the Wheat Advances Act of 1930, and, therefore, may be said also to have a party political colouring. The speech of the Minister for Markets was not partisan; it was a clear and concise resume of what has been done by the Government.
– What has not been done by the Government.
– What has been attempted by the Government to give relief to the wheat-growers. I agree entirely with the honorable member for Wimmera that the bounty should be paid on last year’s crop, and the Government is prepared to do that if the banks will agree, but they have said definitely that the £3,000,000 is available only for the payment of a bounty on the 1931-32 crop.
– What difference will it make?
– No difference. The banks might fairly make the money available to the Commonwealth Government to pay a bounty to the growers of last year’s crop, in accordance with the promise of the Government and the legislation of this Parliament. The Leader of the Opposition was Acting Treasurer in December of last year, and knows what happened then.
– And he could not see a way out of the difficulty then.
– The Government has done everything possible to make the money available for payment of the bounty to the growers, but is prevented from doing so by the attitude of the banks. That attitude is wrong. The bounty should be paid on last year’s crop, because many hundreds of the farmers who produced that crop have not an acre under wheat this year. Many were prevented from sowing by the wet season; Others had not the money with which to buy seed and manure.
– The implements of some were seized.
– That is so; forced sales of machinery and stock took place, and the farmers were turned adrift. Last year’s growers should be recouped for their efforts, and the Government would welcome the assistance of the Opposition parties in negotiating with the banks to have the conditions removed from the £3,000,000 that is to be made available for the wheat bounty.
– I definitely requested that the Government should get the assistance of the leaders of all parties in both Houses in again approaching the banks in the light of this debate.
– I think that should be done.
– What reasons do the bunks give for. their refusal to allow the bounty to be paid on last year’s crop?
– The banks said that the money was being made available to finance the new season’s wheat for export, thu bulk of last year’s wheat having been already exported. That attitude is wrong. Anything that can be done to induce the banks to make the £3,000,000 available for last year’s crop should be done. I was not a member of the Government last year, but I have no hesitation in saying that it did everything possible to find money to finance the guarantee of 3s. a bushel.
– The Government could have imposed a flour tax.
– The money might have been provided by that means, but such a tax would have to apply throughout the Commonwealth. Would it be fair to impose a tax of £7 4s. a ton on flour in Queensland and New South Wales, where 4s. a bushel was guaranteed to the farmers for their wheat?
– Of course it would.
– I do not think so. The Wheat Marketing Bill embodied a definite scheme for the marketing and financing of the wheat; the principle of compulsory control, which it contained, is in accordance with the policy of the Labour party. If the Senate had not rejected that measure the necessary money to finance the growers would have been found, the Australian people would not have felt the small levy they would have been required to pay in respect of the exportable surplus, and certainly the wheat-growers,” and the community generally, would have been better off if the primary producers had received an increased price for their grain. Every man must recognize that if the primary producers collapse, business people, workers, and all sections of the community will suffer. Therefore, the aim of the Government is to assist the primary producers in every possible way. Had it had a majority in both chambers the guarantee of 4s. a bushel would have been paid. But as the Minister for Markets pointed out, the Commonwealth Bank shut down absolutely when its legal adviser, who is an opponent of wheat pools and of government enterprises generally, advised that the Wheat Advances Act was not valid.
– He advised that under that legislation the bank would not be safe.
– Order ! The honorable gentleman’s time has expired.
.- I register my protest against the action Or inaction of the Government in respect of the legislation approved by both Houses of this Parliament last year, providing for a guarantee of 3s. a bushel f.o.b. in respect of the wheat of the 1930-31 harvest. The speech of the honorable member for Wimmera (Mr. Stewart) was almost too moderate.
– He referred to the “ failure “ of (he Government.
– I hope the Minister does not think I made an attack upon him.
– The speech of the honorable member was temperate and in good taste; it stated the position fairly. The opinion of the ordinary farmer regarding the Government’3 promise of n bounty in respect of the next crop is conveyed in the following letter I have re- ceived from ‘ Mr. W. Dunstone, of Wanurp, via Mitiamo: -
The announcement that the Federal Government intends to pay the proposed export bounty on wheat on next year’s crop has caused consternation among growers in the district, and yesterday I forwarded to you a telegram, setting out their disapproval of such a course. The opinion generally held is that as lust year’s crop was the one grown in response to the Government’s appeal to grow more wheat, and was also the crop on which so many promises were made, and none of which were fulfilled, it is only right that any bounty now proposed should be paid on that, and not on the incoming . crop. . Under the present proposal hundreds of wheat-growers will receive nothing whatever, as the extreme wet at sowing time prevented them from getting any crop in. in this district it is safe to say that not more than 30 per cent, of the crop was sown. It also seems certain that if the bounty is to be paid on the exportable surplus it will bc at least fifteen mouths before it can be paid at all, as it is obvious that the wheat must be sold before they know what the exportable surplus is. In fact, so fed up are the growers with the promises of the present Government, that they have made up their minds that if this bounty is to be postponed to next year’s crop it will undoubtedly prove another dud which will be about dud No. 4. Under the circumstances, I have been asked to write to you setting out our opinion on the matter, and would like you to let us know whether anything can be done to have the bounty distributed among last year’s growers.
I support the request of the honorable mcm her for “Wimmera that the bounty be paid on last year’s crop. There is no difficulty in paying a bounty on production, and it. could be more easily paid on last year’s crop than on that for next season. If the money were made available on, say. the 1st November, in respect of last year’s crop, it would go a long way to pay for cornsacks and- other necessaries to enable the next crop to be harvested. To-day many farmers in all States are in such desperate circumstances that they are unable to purchase cornsacks or other necessary commodities for the next harvest, and they would have appreciated assistance much more this year than in respect of next year’s crop.
– I agree with the honorable member, and so does the Government. There is no difference of opinion on that point. I said I would be prepared to do anything to help the farmers.
– Although wheat prices overseas might appear to be fairly reason- able, it is necessary to subtract a number of charges before it is possible to ascertain what is the net return to our wheatgrowers. Assuming that the London price is 19s. per quarter - it is a little more than that now, owing to the depreciation of sterling rather than to any world movement in wheat or any failure in crop prospects - we get this position : -
If we take into account the cost of bags, the price to the farmers is ls. 2fd per bushel on the farm.
– But is not wheat being sold to-day at 2s. 6d. f.o.b. in Australia?
– As a matter of fact, on the 8th of this month, wheat was selling at 17s. 6d. per quarter in London. On that basis, the net return to the farmer at country railway sidings would be about ls. per bushel.
I should like these facts to sink into the minds of honorable members in order that they may realize how desperate is the position of our wheat-growers. The honorable member for Wimmera (Mr. Stewart) pointed out that we had just reaped a harvest of 212,000,000 bushels, and he dwelt at some length upon the promise of the Government to pay a guaranteed price of 4s. per bushel. Most of last year’s crop has been sold, and, as nearly as we can ascertain, the average price received has been ls. 8d. per bushel, so that, assuming the cost of production to be 4s. per bushel, our growers have lost about 2s. 4d on every bushel reaped. This would amount, in the aggregate, to £23,100,000.
– If the Government had been permitted to handle the harvest, it would have made a success of its operations.
– I am convinced that the Government could not have found the money to finance its proposal to pay 4s. per bushel. As a matter of fact, it was unable to operate its later scheme to pay 3s. a bushel, which really was ls. 7¼d. per bushel less, because the original proposal provided for 4s. a bushel at country railway stations, whereas the later bill stipulated for the payment of 3s. f.o.b., which, as I have explained, was really 1s. 7id. below the return to be guaranteed to the farmer under the original sell erne. It was the duty of the Government, before introducing those measures, to ascertain definitely if finance could bo made available to meet its obligations.
– The then Acting Minister for Markets said that ho did take the necessary steps.
– The Government took no ti i’ ti on to find out if the money could be obtained, and, therefore, its proposals were foredoomed to failure.
.- It lias been urged by opponents of the several legislative proposals of the Government to assist our wheat-farmers that because of defects in the more recent legislation, the Commonwealth Bank was unable to provide the necessary finance; that because of constitutional objections, the bank could not accept responsibility in the matter,
– It was because the bill was faulty.
– I could understand the reluctance of the Commonwealth Bank to undertake financial responsibility in respect of a product that has already been sold; no doubt it is this objection that prompted the bank to take up the present attitude. But I cannot dispel from my mind the lurking thought that, in this debate honorable’ members opposite wish it to be inferred that the Government is not sincere in its endeavours to help our wheat-growers. The failure of the Government- to give effect to- its proposals has been due largely to the legal objections raised by the Deputy Loader of the Opposition (Mr. Latham) whose attitude in this chamber profoundly influenced the members of another place in rejecting the bill which provided for the payment of a guaranteed price of 4s. per bushel to our wheatgrowers. It is, however, significant that the financial policy for which the honorable gentleman and his supporters stand has been abandoned now by almost every European country. The Commonwealth must, if we are to assist our wheatgrowers, come into line with them. If the fiduciary notes issue proposal had been adopted, it -would have been possible for the Government, with the assistance of the banking institutions, to provide the necessary finance to maintain the solvency of our wheat-growers.
I am prepared, at all times, to justify the Government with respect to the many measures which it has introduced in the interests of our primary producers. Since the rejection of its original proposal, despite the fact that finance could not be obtained for the payment of a guarantee of 3s. per bushel, the banking institutions of this country are making credit available to the extent of £32,000,000 to maintain the solvency of the nation, and I now submit that, if the Government’s original scheme had been adopted, and if credit had been allowed to flow in the ordinary channels of commerce, the actual measure of inflation necessary would have been less than half that which has taken place since then. The policy adopted by the Commonwealth Bank and the private banks is in accordance with the financial ideas of the majority constituting the Opposition in the Senate. The banks have maintained the solvency of our governments to the. extent qf £50,000,000, but have, at the same time, withdrawn from industry credit necessary for the maintenance of employment and the solvency of those engaged in our primary avocations. Responsibility for the maintenance of that policy, and for the rejection of the Government’s financial proposals, rests with those in this House, and especially with the Opposition in another place. Had the necessary additional note issue been authorized, it would have been possible for the Government, without unduly straining the credit of the country, to pay our farmers 4s. per bushel for their wheat, ‘and so to have assured their solvency. Reference has been made to the ‘ fact, that at a recent meeting of farmers in Bendigo, a resolution was carried in favour of a fiduciary note issue with a view to financing next season’s wheat crop. But what is the position to-day? The British £1 note is worth only 15s. In other words, there has been an inflation of British currency to the extent of 25 per cent. This will affect all sales of Australian primary production.
The depreciation of British sterling to the extent of 25 per cent, will increase the purchasing power of those who buy our primary products. If we had departed from the orthodox methods of finance by adopting the scheme outlined in the proposal to pay our wheatgrowers 4s. per bushel, would not that have increased the purchasing power of our consumers, so that our farmers, and our wool-growers, would have received higher prices for their products? The members of the Opposition party, and some members, of the Country party, so far as the guarantee of 3s. is concerned, together with the Senate, must accept responsibility for the position in which our people are to-day. I am as familiar with the position of our farmers as is any other member of this House. Not long ago, a farmer in my district, when about to commence hay-cutting, applied to the Rural Industries Board for three bales of twine, but because his credit was absolutely exhausted, his application was rejected. The desperate position in which that farmer, in company with thousands more in the various States find themselves, is largely due to the action of members of another place in rejecting this Government’s legislative proposals for the maintenance of our credit and the solvency of our people. It is high time that we ceased worshipping this fetish of the gold reserve, the calamitous effects of which have been evident in the Mother Country ever since the House of Commons, in 1925, passed a measure authorizing the return to the gold standard. That measure brought Great Britain, as well as other countries which followed the example of the Mother Country, to a condition bordering on bankruptcy.
.- The honorable member who has just re sumed his seat (Mr. Gibbons), has had much to say in criticism of those who were responsible for the rejection of the Government’s proposal to pay our farmers a guaranteed price of 4s. per bushel. In that regard I have only to remark that they would have been still better off had the Government been able to honour the other impossible promise of 6s. 6d. per bushel made by the honorable member during the 1929 elections.
The temperate speech of the honorable member for Wimmera (Mr. Stewart), and the moderation of his proposals certainly deserve more sympathetic consideration than has been given to them byMinisters .and government supporters. I except the sympathetic reply given by the Minister for Health, but the Minister for Markets seemed to take the attitude that, because two of the colleagues of the honorable member for Wimmera (Mr. Stewart) voted against the first wheat pool, the Government was absolved from even considering any proposals emanating from the Country party. For my part, I make no pretence that I ever gave any support to the compulsory pool proposal. When the Government found that the strength of opinion was against , it, there was, in my opinion, an obligation upon it to find other means of helping the farmers. “ I believe that when the Government introduced the Wheat Advances’ Bill it made an honest effort to help the farmers. There was, on the whole, a sincere attempt by honorable members in all parts of the House to discover a “way by which help could be given to this hard-pressed section of primary producers. While I admit that the Government on that occasion showed some goodwill, and a sincere desire to help, I cannot go so far as to say that it went about the matter efficiently. The Minister has stated that there was a consultation between the Government and the Commonwealth Bank Board before the bill was passed. It is evident from the speech of the Minister who introduced the bill just what was the extent of the consultation.
– The Minister who introduced the bill was not the Minister for Markets.
– No ; it was his colleague, the honorable member for Capricornia (Mr. Forde).
– The honorable member is referring to the bill guaranteeing 3s. a bushel.
– Yes. The following is an extract from the report of the proceedings in the House when the Minister introduced the bill. Mr. Forde said -
A letter in which is enclosed a cony of this bill, has already been forwarded to the chairman of directors of the Commonwealth Bank.
– When was that done?
– The letter was posted to-day. As the Minister dealing with this measure, I deemed it my duty to communicate personally with the chairman of directors of the hank and advise him of the action that the Government intended to take. I told him that the bill would be presented to Parliament immediately, and that the Acting Prime Minister would communicate with him in regard to it. I consider that that courtesy was due to him.
That courtesy consisted of posting a copy of the bill.
– He said that he consulted personally with the chairman of the Bank Board.
– -He said in his speech that he posted a letter on the day on which he introduced the bill into the House. That, evidently, was the full extent of the consultation that took place. The report continues -
The bank is being asked to help the nation in its emergency by making the advance on the guarantee of the Government, backed by the resources of the whole of Australia.
– If an unfavorable reply is received, what does the Government propose to do?
– An , experienced political friend of mine once advised me never to jump until I. came to the stile.
The bill provides for a guaranteed price of 3s. per bushel for wheat of the 1930-31 season, of f.a.q. quality, less dockage in respect of wheat below f.a.q. quality.
So now we know how much consultation there was. The Minister was apparently leaving it to chance. Honorable members on this side of the House are complaining, not that the Minister did not jump before he came to the stile, but that when hecame to it he lay down in front of it. The Minister for Markets has said that the chairman of the Commonwealth Bank Boardstated that it would be contrary to the provisions of the Constitution for the bank to make the advances according to the terms of the bill; whereas the Minister who represented him when the bill was introduced stated subsequently that the hitch occurred because of the manner in which the bill was drafted, or words to that effect. I know that the bill was drafted in a great hurry during the last few days before the Christmas recess; but, if a mistake had been made, it could have been corrected. That is what honorable members on this side of the House complain of. We do not particularly enjoy calling attention to the shuffling which has been indulged in by members of the Government; we want to see whether anything can be done to make good the Government’s omission. This sort of bungling is merely increasing the misery and destitution prevailing in the farming districts.
I have before me newspaper reports of statements made by the Minister between the 17th December, when the bill was finally passed by both Houses of Parliament, and the time when the measure was finally abandoned by the Government instead of being amended. During that interval marketing conditions in Australia became chaotic. Nobody knew what was going to happen. A great many farmers held their wheat while the price was falling as much as 3d. and 4d. a bushel. I know neighbours of mine to whom the loss of those few pence a bushel made all the difference between solvency and being placed in a position in which they could carry on only at the mercy of their creditors. There is undoubtedly an obligation on this Parliament to make good some of the losses incurred by the farmers.
I do not entirely agree with the honorable member for Wimmera that it would be justifiable to divert the money which the banks are able to make available from a bounty on next year’s crop to a payment in respect of lastyear’s crop. In my own district the crops were good last year, but in some other districts that was not the case, while there are good prospects this year. On the other hand, there are districts where no crops have been sown this year on account of floods. It is important- that the farmers should be given to understand that funds will be available for marketing and fallowing expenses, ana that those who make the money available should be given a reasonable assurance that they will get their money back.
– Do I understand the honorable member to 3ay that he would prefer the money to be advanced on next season’s crop?
– I believe that it would be a better economic proposition for the country to make the money available in such a way as to enable the farmers to keep going. If it is paid on last year’s wheat, I am afraid that the great bulk of it will merely go to the farmers’ present creditors, and will not help the growers for the future. Of course, in those cases in which the farmers had a good crop last year, but have been unable to sow this year because of floods, it would be not only just, but also a good business proposition, to divert a portion of the funds to a payment in respect of last year’s crop, so that the farmers may have finance for fallowing this spring, and for seeding next year.
– The honorable member’s time has expired.
– The honorable member for Wimmera (Mr. Stewart) complained that the Government had made to the wheat-farmers promises which it did not carry out. I remind honorable members that the Government promised to raise £18,000,000 to relieve distress; £6,000,000 to be allocated to the farmers, and £12,000,000 to relieving unemployment. I represent a city electorate, and I know something of the hardship occasioned by unemployment. There are 110,000 persons on the dole in New South Wales, and the number is increasing. . It is necessary that the Government should obtain money to solve the unemployment, problem, and it is desirable that it should get assistance from the banks.
– But the banks cannot deal with that matter.
– But they can advance money for the assistance of the farmers. Throughout Australia to-day there are between 360,000 and 400,000 persons out of work, yet there is no suggestion that the banks should advance money for their relief.
– It would be a great help to Australia if the banks could obtain relief from some governments.
– Order ! The House is dealing with a motion in respect of the Wheat Advances Act 1930, and I ask honorable members to confine their remarks to that.
– The Government promised to provide work for the unemployed. It tried to get the money from the banks for this purpose, and it failed. I do not blame it for that. A bill was passed through this House, and submitted to another place, which rejected it. I am pleased to learn that the honorable member for Swan (Mr. Gregory) favours the proposal to issue bonds to help the farmers out of their difficulties. In my opinion, neither the wheat-farmers nor the unemployed can be effectively helped unless we have an emergency currency. The gold standard has been proved to be a myth. As a matter of fact, we have had no gold standard for years. The banks oppose the issue of an emergency currency, but there is plenty of wealth in the country to back such an issue. If, at the present time, I had a property worth £12,000 or £15,000, the banks would probably not advance me anything on it. They are tying up credit. The farming community is suffering from the same thing, the banks having foreclosed on many farmers, who have been put off their land. There is loud complaint because the farmers have been forced off their land; but. in the cities thousands of persons have been put out of their homes, and are living’ in camps. The Government has a responsibility towards these people. We must strike out on new lines. We cannot content ourselves with saying that we have had a conference of Commonwealth and State Ministers, which carried certain resolutions that cannot be put into effect because the banks -will not agree. We are in the midst of a crisis, and must grapple with it, and one way of doing this is to increase the currency issue. If war were declared to-morrow we should not hesitate to do it. If we would be justified in issuing new currency to defend the country, surely now that the country is over-run by a vast army of unemployed, we would be justified in adopting similar measures. I sympathize with the man on the land. I know the bad position he is in, and my vote went in favour of giving him a guarantee of 4s. a bushel for his wheat. Unfortunately, that projectwas rejected by another place, to its everlasting disgrace. Had that 4s. a bushel been granted and the money put into circulation, the farmer would have benefited, and Australia would have overcome many of its difficulties.
-We had not the 4s. a bushel to pay for the wheat.
– It could have been found. It is strange that any honorable member should claim that Australia is too poor to give a guarantee to find a few million pounds to pay for wealth produced by the country. Certain hon- orable members are too prone to utter jeremiads decrying their country. Had the Labour party a majority in both Houses, 4s. a bushel would have been paid to the farmers. I believe that the primary producers of Australia could be relieved of much of their distress if we expanded our currency and increased the purchasing power of the community.
I welcome this motion, because it has ventilated a grievance, but I point out that our farmers are not the only sufferers. There are 400,000 out of employment in the Commonwealth, and in New South Wales alone 110,000 persons are on the dole.
– That unemployment results largely from the decreased spending power of the farmers.
– I agree. Had the 4s. a bushal guarantee been provided, the position of the farmers would have been relieved, and the money placed in circulation, to the benefit of the community generally. It is futile to carry motions such as this if we do not go further and increase the purchasing power of the community, by providing additional currency.
.- During question time to-day the Prime Minister (Mr. Scullin) stated that he hoped that the sense of honour possessed by the State governments of Australia would be equal to that of the Federal Government. I hope that it, is superior to it. The outstanding feature of the ministerial statement of policy delivered by the Prime Minister on Wednesday,the 12th March, 1930, was a reference to the development of our primary industries. The right honorable gentleman said -
Development of primary industries for the production of exportable wealth and the ex tension of Australian manufacturing will help to balance our external trade and enable us to employ our people’ and eventually to maintain a larger population.
The Prime Minister went on to say -
The Government devoted much attention to the necessity for stimulating the export of primary producers . . . The Commonwealth Government has invited the State governments to join with it in guaranteeing the growers for the first year 4s. per bushel, payable at country sidings.
I hope that honorable members and the people generally will realize that the Commonwealth Government did not undertake to give the guarantee of 4s. a bushel. It desired to create the most unprecedented position, and make the State governments contribute towards the guarantee. It was because the Minister in charge of the measure refused to relieve the State of Western Australia of the obligation to meet its share of the guarantee to the farmers that the bill was rejected in another place.
The promise of this Government to help the wheat industry was definite, and the need of assistance urgent. The following message was broadcast by the Prime Minister in March of last year. In addition, the States made strong appeals in the matter, and the machinery of the post office was used to give publicity to the request urging farmers to grow more wheat. The right honorable gentleman stated -
We must grow more wheat and we . must export more wheat, but if the wheat-growers of Australia are prepared to heed appeals to increase the. area under cultivation they are entitled to some guarantee in the matter of price and to assurances that their wheat will be marketed in a businesslike way.
The Commonwealth Government is offering to the wheat-growers a charter. We appeal to them to take it with the price guarantee and the assurance ofbusinesslike marketing that go with it. We also appeal to them earnestly to increase the acreage under production.
Theway in which wheat-growers responded to the call for increased production was magnificent. Aided by a good season, Australia produced a record wheat crop - and the growers accumulated a record debt in the effort. That is the greatest default that has been perpetrated by any parliament in Australia. Despite the appeal of the Prime Minister (Mr.
Scullin) to the patriotism of the growers, and his admission that the problem is of the utmost importance to Australia, the right honorable gentleman is now absent from the chamber. He has left the Minister for Markets (Mr. Parker Moloney) to reply to this motion on behalf of the Government. Honorable members know that the Minister has done nothing but make political capital out, of this matter. He has endeavoured to persuade the people of Australia that his Government could have provided a guarantee of 4s. a bushel, but although the necessary legislation had been passed, it could not provide 3s. a bushel for the farmers. It was claimed that there was a technical fault in the Wheat Advances Act. Why aus it. not rectified?
The Government also refused to assist cbe wheat-farmers by putting into operation the carefully planned scheme evolved by Professor Perkins of South Australia, which provided for a sales tax on flour consumed in the Commonwealth. That scheme, which could have been put into operation promptly and effectively, was rejected. The Government has done nothing to fulfil its promises to the farmers. On the other hand, it has, through the medium of tariff schedules, loaded them with staggering burdens. Hitherto, the farmers have been mulcted in order to provide for the people of the .cities. To-day the farmers have nothing: consequently there is much unemployment in the metropolitan areas. The man on the land is over-burdened, 30 our cities are languishing. Yet the Government persists in placing further penalties upon the farmers to provide profits for Lysaght Limited and such concerns, while it neglects to fulfil its promises to our primary producers. No other government in the world has been guilty of more disgraceful conduct’.
– I have only a few minutes at my disposal. I marvel at the attitude of honorable members opposite who prevented the Government from providing a guarantee of 4s. a bushel, and have thwarted every other effort on the part of the Government to help the wheat-farmers. The honorable member for Forrest (Mr. Prowse) complained that
Although the Government declared that it could provide 4s. a bushel for wheat iri the early part of 1930, it was unable to find 3s. a bushel in December of that year. The reason is that early in 1930 wheat was bringing from 4s. to 4s. 6d, a bushel, whereas in December it had; dropped to 2s. 6d. a bushel. I cannot, understand why honorable members opposite persist in nullifying’ the efforts of the Government on behalf of a community so worthy of assistance. I fully believe that the honorable member for Wimmera (Mr. Stewart) is sincere in his desire to help the farmers, but it must be recognized that it is quite impossible to persuade the Commonwealth Bank to provide 3s. a bushel for wheat at this juncture. The Government has exploited every avenue in an endeavour to assist the farmers. It introduced a Fiduciary Notes Bill. Honorable members opposite found fault with that. They know very well that it was no wildcat scheme, but that it would have returned a tenfold benefit to and indirectly assisted many unemployed workers in Australia. The Government is on the eve of making another endeavour to assist the wheat-farmers. It realizes that the scheme will not do half as much as is needed, but it is the best that can be done now. One great drawback is that prices have fallen disastrously. I am confident that when they are restored to something like normal, Australia will hark back ‘to the good times. Until then, our path will continue to be bestrewn with difficulties. All should do their utmost honestly to assist the farmers and the country generally. I urge honorable members from now on to set aside party issues and endeavour to make brighter the lot of our primary producers.
Debate interrupted under Standing ‘ Order 257b.
asked the Minister for Trade and Customs, upon notice -
What are the names of individuals and firms to whom payments under the Wine Export Bounty Act have been made during the last financial year, and what was thu amount paid to each?
– This information is contained in the return which was laid before both Houses of Parliament in July last as required by section 16 of the Wine Export Bounty Act’ 1930.
asked the Minister for Trade and Customs, upon notice -
What amount of revenue has been received for periods of twelve months from the imposition of duties on films (tariff item No. 320), under the tariff schedules of 1921-28, and the customs tariff resolutions ‘of the 22nd August, 1929; 21st November, 1929; and 9th July, 1930?
– In the following table the gross revenue collected during the last three financial years on kinematograph films, exposed or developed, representing dramatic or Australian subjects (excluding films for home kinematographs and advertising articles) is apportioned to the various rates of duty operat ing during those years under the schedule and resolutions mentioned: -
asked the Minister for Repatriation, upon notice -
What is the number of persons receiving imperial war pensions in (a) the Commonwealth; (b) each State; and (c) the Federal Capital Territory, and what is the amount of money involved in each?
– The number of British and Indian pensions payable as at 30th June, 1931 was -
The annual liability involved is as under -
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Minister for Home Affairs, upon notice -
– A reward has not been offered for the purpose mentioned.
Disconnexion of Services
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
Imports - Duty
– On the 25th Septem ber, the honorable member for Boothby (Mr. Price) asked the following questions, upon notice : -
I am now able to furnish the honorable member with the following information : -
Primage duty is not recorded separately, and the amount collected on any class of goods cannot be stated exactly. Based on the imports during the period 1st November, 1930’, to the 30th June, 1931, it is estimated that the amount of primage duty collected on tea was -
Destruction by Postal Department.
– On the 24th September, the honorable member for East Sydney (Mr. Ward) addressed to me the following question, upon notice: -
Is it a fact that on the 28th August last, some thousands of copies of a paper called the Red Leader were destroyed by the Postal Department in Sydney; if so, will he state the reasons for such action?
I am now in a position to inform the honorable member as follows : -
Yes. The posted copies of a certain issue of the Red Leader were destroyed on legal advice that they offended against the laws of the Commonwealth.
– On the 17th September, the honorable member for Fremantle (Mr. Curtin) asked me, without notice, whether it is possible to refund the amount of sales tax paid upon the purchases, by an unemployment relief committee, of clothing and leather in order to make boots and other wearing apparel available to necessitous cases.
I have now had an opportunity of considering this matter, and find there is no provision in the Sales Tax Assessment Acts under which this relief could be granted. If the acts were amended, it would be necessary to extend the relief to all bodies which are maintained by voluntary subscriptions. This would involve additional administrative expenditure to provide for a reasonably effective check of the transactions and might result in a substantial loss of revenue. In all the circumstances, I regret I am unable to. provide for the relief desired.
– On the 24th September, the honorable member for Bass (Mr. Guy) asked the following question, upon notice : - .
Will the Minister approach the management of the Australian National Airways, or any other company contemplating an aerial service to and from Tasmania, and ascertain the possibility of making suitable arrangements whereby mails and passengers may he set down and picked up on Flinders Island, whilst the aeroplanes are travelling to and from Tasmania?
The question of establishing a landing ground for aeroplanes on Flinders Island is receiving consideration, and the possibility of arranging for calls in the event of the Tasmanian aerial service being re-established is being explored.
The following papers were presented : -
Arbitration (Public Service) Act - Determination by the Arbitrator,&c. - No. 23 of 1931 - Commonwealth Public Service Artisans’ Association.
Conciliation and Arbitration Act - Regulations amended - Statutory Rules 1931, No. 118.
Customs Act - Regulations amended - Statutory Rules 1931, No. 90.
Papua Act -
Infirm - and Destitute Natives Account - Statement of Transactions of Trustees. 1930-31.
Ordinance of 1931- No. 2- Supply 1931-32.
Public Service Act - Regulations amended - Statutory Rules 1931, No. 113.
River Murray Waters Act - River’ Murray Commission - Report for year 1930-31; together with Statements showing gaug- ings made at Gauging Sta tions, and quantities of water diverted from the River Murray and tributaries.
Transport Workers Act - Regulations uiuended^Statutofv Rules 1931, Nos. 100. 101. 104.
Consideration resumed from the 25th September (vide page 302), on motion by Mr. Forde -
That the schedule to the Customs Tariff be amended -
Postponed item 176 f 1 -
By omitting the whole of sub-item (f) and inserting in its stead the following sub-item: - “(f) (1) Machines and machinery, n.e.i., ad val., British,55 per cent.; intermediate,65 per cent.; general, 75 per cent.”
The CHAIRMAN (Mr. McGrath).For the convenience of the committee, item 176 f 1 “ Machines and machinery, n.e.i.”, and item 178 d, “ Motive power machinery and appliances except electric “, will be considered together, but the votes will be taken separately.
– The duties recommended in each of these cases are similar. The duties on the machinery covered by sub-item 176 f 1 were 45 per cent., 55 per cent, and 60 per cent.’ under the 1921-28 tariff, and those now proposed are 55 per cent., 65 per cent, and 75 per cent., respectively, the increases thus being 10 per cent. British and intermediate, and 15 per cent, general. The additional imposts have been designed for the purpose of rehabilitating one of our principal key industries which has fallen on very evil times, The engineering industry has never been in such a perilous condition since the inception of federation, and as it is of very great importance to Australia, it is desirable that it should be afforded adequate protection. Whenever a depression occurs the engineering industry is the first to be hit hard. The history of the present depression shows that the first section of industry to-“ be adversely affected is that which has to do with capital costs. The installation of machinery is, of course, capital expenditure involved in establishing a factory. Machinery production is essentially concerned in capital costs. The conditions that have been created by the tariff are such that with the upward trend of prices, due to a trade recovery, there should be a considerable expansion in machinery manufacturing in Australia. The upward trend in the prices of our exportable products will make more money available for industry, and this will enable manufacturers to buy machinery. An examination of the conditions of the machinery trade, even during the depression, shows that machinery manufacturers have received orders for aconsiderable quantity of machinery which will be needed for the manufacture of goods which have been granted adequate protection. Take, for example, the manufacture of wireless sets. The prohibition of the importation of wireless sets into Australia has caused great activity in the local factories which manufacture these sets, and they have placed orders for the machinery they need to turn out sets to meet the demand. The tariff has definitely enabled machinery manufacturers to widen their range of designs and types of. machinery.
As the result of my inspection of many factories throughout Australia, I have learned that manufacturers generally are well satisfied with the efficiency of Australian-made machines. The average man in the street has no conception of the wide range of machinery that is being manufactured in Australia. It was a revelation to me to find that such a high percentage of the machinery in operation in our factories lias been made here.
The granting of adequate protection to the engineering industry must have an immediate effect on other key industries, such as the coal, iron and steel, copper and timber industries, all of which are closely allied to our engineering enterprises, and depend on them, to a large extent, for prosperity. The engineering industry as a whole has been subjected to very keen competition by overseas manufacturers. A large amount of the work obtained by engineering establishments throughout the Commonwealth of late years has been secured as the result of the policy adopted by government departments, semi-government bodies, and municipal councils of granting a measure of preference to local tenderers when deciding to’ let contracts. The preferences accorded have usually, amounted to from 5 per cent, to 15 per cent, over and above the duty payable under the tariff. This policy is very patriotic. That additional degree of preference has frequently made all the difference in determining whether particular work would be done in the Commonwealth or overseas. A large number of establishments have been kept supplied . with work on account of the additional preference extended to them in this way by government bodies. But owing to the curtailment of loan moneys, government expenditure throughout Australia has been reduced to a minimum, with the result that our engineering establishments have been affected more than any others. It is now essential that this industry should obtain orders from private firms which, in the past, have, in a large number of cases, shown a distinct apathy towards the local metal working trade when they have required machinery for the extension of their factories or for replacement purposes. This disinclination on the part of private enterprise to purchase its requirements from local machinery manufacturers is not new. It has been our experience, unfortunately, that while certain private firms desire 100 per cent, protection in respect of their products, they also wish to be free to b uy the equipment for their factories in , any country in the world.
– To what firms is the Minister referring?
– It has been the practice for manufacturers generally to ask for adequate protection for their products, and for freedom to buy their machinery in Germany, the United States of America, or any other foreign country. Many firms have shown a complete ignorance of the fact that much of the machinery that they required could be produced in Australia. Often manufacturers have learned only when they have applied for the admission of certain machinery under departmental by-law, that three or four Australian engineering firms could provide their requirements, and have been manufacturing such machinery for a number of years. The Tariff Board, in its annual report for 1927, commented upon . this subject in the following words: -
A situation that has come under notice is the unreadiness of many Australian manufacturers to use locally-made goods. If protected by the tariff, the local manufacturer of the secondary product has little cause for complaint if the materials and machinery he uses enjoy the protection of a duty.
The former Prime Minister, Mr. Bruce, in addressing manufacturers in July, 1929, said that he found “ a great number of partial freetraders - gentlemen who wanted the utmost protection for all they sold and freetrade for all they bought.” The right honorable gentleman continued -
I ask you, are you as sound protectionists’ in regard to machinery as in regard to the things you want to sell? I am amazed at the number of applications from manufacturers for the concessional introduction of machinery.
Mr. Bruce was Minister for Trade and Customs for about twelve months, and was conversantwith the apathy shown by many Australian manufacturers to the welfare of the Australian engineering industry. There has always been a tendency to place machinery orders abroad. With manufacturers who will not support local industries, the current of protection flows in one direction only. It is useless to appeal to them to change their policy, particularly as a 5 per cent, or 10 per cent, difference in price in favour of an overseas machine has, in a large number of cases, been a sufficient reason for them to refuse to patronize the local industry. The only method by which they can be brought to a realization of their duty to other Australian industries is to increase the duty and compel them to support the local - machinery manufacturers.
In the engineering industry the proportion of labour to material is very high, the approximate average ratio being 70 per cent, to 30 per cent. The industry, therefore, offers potential employment to a large number of skilled Australian workmen. The skill and efficiency of the Australian artisan is beyond question, and the Government, therefore, feels that it is incumbent upon it to take such measures as will provide work for them. The following is a summary of the importation statistics for the years 1928-29 and 1929-30, from the point of view of the country of origin: -
Of the total value of importations for 1928-29, £1,492,153 worth, or more than 50 per cent., was admitted under by-law at British, free, or general, 10 per cent. For 1929-30 the total importations were valued at £2,686,986.
Dr.Earle Page. - What do those figures include?
– Machinery covered by item 176 f 1. Motor cars are not included. The value of the machinery admitted under by-law in 1929-30 was £1,163,636, or 43.3 per cent, of the total. These figures indicate that when definite evidence is produced that necessary machinery cannot be commercially manufactured in the Commonwealth, the Minister does not hesitate to exercise the power conferred upon him by Parliament to admit it at concessional rates of duty. On the basis of the 1929-30 importations, after deducting the value of machinery admitted under by-law, there existed a potential market for Australian machinery manufacturers to the value of £1,500,000. Through the imposition of these increased rates of duty the Government trusts that this trade will be diverted to the Australian engineering industry.
With respect to item 178D, “ motive power machinery and appliances, excepting electric,” the duties were increased from 45 per cent. British, 55 per cent, intermediate, 60 per cent, general, to 55 per cent. British, 65 per cent, intermediate, and 75 per cent, general. The importations under this heading in 1928- 29 totalled £1,048,386, and in 1929- 30, £1,139,290. This sub-item now includes goods previously covered by subitems 178B and 178 c of the 1921-28 tariff. These goods comprise cylindrical boilers, water tube boilers, furnaces for boilers, gas producers, steam condensers, and ships’ propellers. From an analysis of the importation figures, it has been ascertained that, of the total value of the importations for 1928-29, machinery to the value of £248,089 was admitted under departmental by-law either free of duty or at a duty of 10 per cent. This figure represents 26 per cent, of the value of total importations. For the year 1929 the value of the machinery admitted under by-law was £390,374, representing 34.2 per cent, of the total value of the importations. These figures indicate that the by-law provisions of the tariff are sympathetically administered, when it can be shown that machinery of the type under consideration cannot be commercially manufactured in Australia. If an importer applies to the Minister or to the Comptroller-General of Customs with respect to importations, an officer of the Department of Trade and Customs is instructed to ascertain whether machinery of the typeproposed to be imported can be manufactured in Australia. If that officer finds that it can be commercially manufactured in the Commonwealth, he submits a report to that effect to the tariff branch.
– What is meant by “ commercially manufactured “?
– The honorable member for Warringah (Mr. Parkhill) knows as well as I do what is meant by those words. The head of the tariff branch of the Customs Department then submits a recommendation to the Minister, stating whether in his opinion such machinery should . be admitted under departmental by-law, or whether the duties stipulated under the tariff should be imposed. In view of the substantial quantity of the machinery, admitted under departmental by-laws, it should be evident to honorable members that a sympathetic view is taken with respect to such importations without in any way depriving Australian manufacturers of the protection which Parliament intends should be afforded to them. After deducting the value of the machinery admitted under departmental by-laws for 1929-30, a total of 748,000 remains. As, this machinery can be manufactured in the Commonwealth, the Government has imposed the increased rates with the intention of forcing purchasers to obtain their requirements in the Commonwealth. As previously mentioned, it requires, in a large majority of cases, an increase of 10 per cent, or 15 per cent, in the rates to divert this trade to the Australian engineering industry, which the Government is determined to do. As the ex-Prime Minister, Mr. Bruce, said to a gathering of Australian manufacturers in 1929, while many of these people require adequate protection for the commodities they manufacture, they are prepared to absolutely disregard the Australian manufactures of the goods they require for their own equipment. 1 trust that this item will receive the support of a majority of the committee.
.- I am. glad to learn that it is the intention of the Minister (Mr. Forde) to include the discussion of this subitem, which relates to motive power machinery and appliances with machinery included in other sub-items, as I am thus afforded an opportunity to test the feelings of the committee on the question of extending greater preference to Great Britain. Everything that the Minister has said indicates the wisdom of dealing with this item in the manner that I shall indicate in an amendment which I intend to move. If that amendment is carried, it will force the Government . to re-classify all these sub-items, and will thus ensure that machinery of the type covered is really being manufactured commercially in Australia. If, it is not, it should be placed in a separate item instead of being grouped in what may be termed a nondescript collection. The Minister said that during the year 192S-29 roughly 43 per cent, of the machinery imported into Australia under sub-item 176 r was admitted into Australia free of duty. That is to say, that the Customs Department, after carrying out the fullest investigation, admitted that the equipment was not being manufactured in this country. A careful investigation of the whole position would show that fully one-half of the remaining 57 per cent, should also have been admitted free of duty for the same reason*, that should be dont if Australian industries are to be cheaply and efficiently equipped. I hope the committee will adopt the amendment I propose to move, under which the rates would be 25 per cent. British, 55 per cent, intermediate, and 60 per cent, general, instead of the existing rates of 55 per cent. British, 65 per cent, intermediate, and 70 per cent, general. The adoption of that amendment would necessitate a reclassification of these sub-items.
– The adoption of the rates suggested by the right honorable member would mean imposing lower duties than existed under the 1921-28 tariff.
– I am satisfied, from my own investigation, that, in view of the peculiar circumstances which have since arisen, this Parliament must reduce the duties in the interests of the Commonwealth and of Great Britain. What is the present position in Great Britain ? It is one of great difficulty. ‘ Great Britain has been forced off the gold standard, and is experiencing great trouble in providing employment for over 2,000,000 persons in that country now out of work. Great Britain can speedily be placed upon a better economic basis by those units which comprise the British Empire diverting to Great Britain the maximum volume of trade that is possible at this juncture. Not only can Great Britain be assisted out of her present difficulties, but I venture to- assert that, by the adoption of the proposal I am now submitting with respect to the duties on machinery, the dominions and other pol tions of the Empire can also be assisted to overcome the financial and economic problems now confronting them. The British Empire, which controls onequarter of the world’s services and has one-quarter of the world’s population within its territory, produces 70 per cent, of the total production of gold, 60 per cent, of rubber, 47 per cent, of tin, and 90 per cent, of nickel, as well as immense quantities of other raw materials. The British Empire, while endowed with such magnificent resources in the matter of raw materia^ finds herself short of £100,000.000 worth of gold to meet her external short-term indebtedness. We must develop and manufacture customs machinery required by the whole of the Empire, in order to utilize the resources of the Empire, and thus ensure that in each of the dominions, especially in Australia, we have the machinery to enable them to utilize these resources to the best possible advantage.
– Great Britain should take the lead.
– Great Britain was the leader of the great industrial revolution, and is one of the principal producers of metals and machinery. Her scientists and inventors have been the leaders in practically all the mechanical development that has taken place throughout the world. In Australia we need cheap and efficient mechanical equipment, and we can get it. The figures quoted by the Minister show conclusively that we have to import a great deal of the machinery required in (.his country. An extraordinary feature of the figures quoted is that for many years the quantity of machinery n.e.i. has remained practically stationary, showing that a continual market is developing for this particular class of machinery in Australia that is not covered by local Manufacture. The inclusion of items 174, 404, 405 and “219 in the schedule was made to -ensure that particular types not manufactured commercially .in Australia shall be admitted free of duty. That principle is recognized in our customs tariff, and I am now suggesting that we shall carry out the principles to the fullest possible extent. “What is the position with respect to the importation of machinery? Very high duties are imposed, and as a result only those articles which are not being commercially manufactured in Australia are imported. Yet in 1929-30 we imported no less than £.14,730,000 worth of machinery.
– Under what items?
– I am referring in ( he value of the whole of the machinery imported, as set out in the customs figures and classification. If we dissect the figures we find that, of the £10,600,000 imported under one group, Great Britain secured only 34 per cent, of the trade, but nf the £4,069,000 worth under another group she secured 81 per cent, of the trade. I am satisfied that if our tariff schedule were amended in the direction I suggest Great Britain would receive a decided advantage and would be able materially to increase her proportion in that big group of which she now only receives 34 per cent. I shall point out shortly how the position could be materially improved tinder this particular item. Although the figures from which I am quoting are not so complete as those which the Minister used, I find that the total importations of machinery in 1928-29 were valued at C1,S0S:000, of which Great Britain supplied £853,000 and foreign countries £955,000.
– The right honorable gentleman should mention the type of machinery to which he is referring.
– Although 45 per cent, of that trade was obtained by Great Britain, I believe that, under a revised tariff schedule, fully one-half of the r’mainder could also be supplied by the Mother Country. In this belief I am supported by the opinion of British manufacturers, who contend that by an amendment of the tariff they could obtain a large proportion of the trade. It is quite evident that some of this machinery has been manufactured in Australia only because it has been too costly to import it; but as I previously stated, the value of importations has not varied to any extent, year by year. There is every reason that at this particular juncture we should endeavour to give Great Britain ‘…. maximum share of our trade, li. 1927-28 the total importations under thi.’ particular item, so far as I have been able to gai ker, were valued at £1,559,000, of which Great Britain supplied £840,000 worth, mid foreign countries £719,000 worth, as compared with the subsequent year in which Great Britain supplied £853,000 worth and foreign countries £955,000 worth. In that, period Great Britain’s exports of machinery to Australia decreased from over 50 per cent to less than 45 per cent. “When 1 came to examine the items I found that in 3927-38 there Was admitted free of duty £332,000 worth of machinery out of Great Britain’s contribution of £840,000. and £265,000 worth out of .7.19,000 worth imported from foreign countries-, and that the duty paid totalled well over 50 pgr cent, on the remainder. What is the result? This machinery was noi really competing with ordinary Australian machinery. It had to be bought overseas; but, as a result of these high duties, such machinery installed in Australian shops has actually been overcapitalized to the extent of 50 per cent. The effect has been to increase production costs generally and the cost of establishing new industries. It has also meant an increase in the prices at which good? generally can be sold in Australia.
-If a machine cannot be commercially manufactured iti Australis it is admitted free of duty.
– The honorable member for Gippsland (Mr. Paterson) will produce correspondence between manufacturers, importers of certain machines and the Customs Department, showing the real value of the phrase, “ Commercially manufactured in Australia “. He will show that the Customs Department, after a year’s argument, has allowed single machines to come in duty free to serve as patterns for the development of new industries in Australia, thus admitting the previous impossibility of making these machines commercially in Australia. Otherwise there would have been no justification for its ultimate surrender.
– lt shows how fair the department is when further .investigation proves that Australian manufacturers cannot make a particular type of machine.
– I am not discussing the fairness or otherwise of the customs officials. 1 am arguing that the officials and the Government - and not’ merely this Government, because the figures I am quoting relate also to the period when the Bruce-Page Government was in power - should not be put in an unfair position in regard to these matters. There should be a proper reclassification of the items so that the attitude of the customs officials should be perfectly clear to every one, and if Australian manufacturers could successfully establish their claim to be able to manufacture certain machines commercially in Australia, they could have special items in the tariff schedule protecting their machines. That would be the right way to manage the business. The present system puts an undue and unjustifiable strain upon the intelligence, ability, and capacity of the Minister for Trade and Customs and his staff. In this connexion I am speaking of governments in general. The more I have seen of the matter, the more I am satisfied that this change should have been made earlier, and the more I regret that the late Government did not do what T am now advocating. It did take steps to make certain goods duty free under bylaw. What I am saying now is not in condemnation of the Government or the officials; I am merely indicating what I think should be done. When we find that >i course we have been following is unduly penalizing the industries of Australia by piling up their costs, it is useless to continue upon it, particularly at a time when prices are falling.
I find that in 1927-28 the duty collected on machines, omitting those that have been admitted duty free, or at 10 per cent, under by-law, was approximately from 50 to 60 per cent. In two years for which I took out the figures the value of machinery imported amounted to from £5,000,000 to £6,000,000, and in one year the total importation of machines and metals from Great Britain was £4,572,000.
– Through Great Britain.
– The Customs Department is quite capable of seeing that the law is obeyed in that direction. When Mr. Pratten was Minister foi Trade and Customs, he made certain that goods purporting to be British would be British in fact, by insisting that 75 per cent, of the value must be of British origin.
Of the total value of £4,572,000 worth of goods imported from Britain in the year of which I am speaking, £1,226,000 worth was imported duty free, leaving £3,300,000 worth on which over 50 per cent, duty was paid. In the last seven years approximately £100,000,000 worth of machinery has been imported to establish and equip new industries in Australia with capital plant. The Labour party talks about the adverse trade balance. If it would look at the page of the Commonwealth Year-Book on which the trade figures are given, it would find that the Statistician says that the adverse trade balance is largely offset by the introduction of private capital due to the establishment of new industries because of the protective policy which was being pursued during the period of which I am speaking. The adverse trade balance is really more than covered by the new machinery imported, which as the Statistician points out, has not yet had the opportunity to produce exports commensurate with ii> capital cost. Nor could we expect ii to do so immediately. The additional capital cost of installing thi? machinery in Australia over its actual cost in the country of origin’ was £45,000,000, leading naturally to an increase in the cost of goods generally. extra transport charges, and extra wages. I should like to illustrate the point by quoting some figures relating to the export mutton trade. This is one of our great industries, and. one we must extend, yet, because of the increase in the general cost of living, as the result of the over-capitalization of our industries by the imposition of these high duties, the cost of exporting mutton has increased by 6G per cent, since pre-war years, making if, almost impossible for the man who is growing sheep to carry on an export trade at a profit. It is worth while to try to ascertain how the increase in cost has been brought about. Not long ago Mr. Tout, speaking in Sydney, pointed out that the cost of shipping J 2,000 sheep from the station to London was £3,668, or 6s. 1½d. per carcass, in 1914. whereas in 1930 the cost was £6,15S, or 10s. 3d. per carcass, an increase of 66 per cent. The details are exceedingly interesting, and are also relevant to the other item which the Minister is including in this discussion. They are set out in the following table: -
– How does the honorable member connect his remarks with the tariff?
– The machinery used in freezing works is charged the exorbitant duty of 50 per cent. The Tariff Board has reported that locomotives made in Australia cost 20 per cer.t. more than the imported locomotives, on which duty has been paid. One of the causes of this high cast is the high cost of installing machinery in the various shops which turn out locomotives. Throughout the whole gamut of costs generally we find that they are increased by reason of the fact that the capital cost of the machinery installed to make goods for general use in Australia, whether for export or local consumption, has been enlarged, and as the result the costs are ever so much higher.
– A good deal of that machinery has been here for years.
– Some of it has been here for years, but much of it has to be renewed every year. Otherwise, why should it be necessary to import £42,000,000 worth of machinery and manufactured metals, and pay such a heavy duty upon it, when there was a reduction of imports generally amounting to £20,000,000 ? Why should the Minister have admitted 43 per cent, of the importations duty free? He did so because there was no chance of having it manufactured in Australia.
I come now to consider the effect on employment. In 1922-23, 43 meat factories, employing 4,820 hands, gave an added value of £1,900,000 to output. In 1930, there were only 33 factories, employing 3,178 hands, giving an added value to their output of £1,387,000. This morning’s Sydney Morning Herald pointed out that in 1930 there were in Sydney 919 more factories than there were in 1929, yet there were 29,000 more men out of work. One of the causes for this are these stupid duties, which induce men to start machinery and metal factories, which have no real future before thorn, and their capital is ultimately lost without having conferred any benefit upon the community at large.
– There are many factories in Great Britain which ar* to-day idle.
– What is the position in Great Britain ? Does that country try to make all ito machinery and machine tools? It will be found that Great Britain imports 43 per cent, of it? machine tools, because it does not pay ii to specialize in those particular lines. Iti the year before last Germany sent 6,263 tons of machine tools into Belgium, 7,193 tons into Great Britain, and 11,854 tons into Prance. Even a highly protectionist country like France is not foolish enough to put a burden on its own back in the way Australia is doing by increasing unnecessarily the capital cost of its mechanical equipment.
– In looking through the tariff, one sees the need for a complete reclassification of the duties.For instance, there is a duty of 60 per cent, an die heads. Nobody makes die heads in Australia, yet dies should be made here as cheaply as possible.For blacksmiths’ hammers, a special steel is required, and it does not pay to make them in Australia, yet the heavy duty of 60 per cent, is imposed on them. Onbrickmaking machinery there is an impost of 65 per cent. No doubt a reduction of that duty would bring down the cost of bricks and the cost of houses and so stimulate the building trade. A plant costing £51,000 at a European port was required in Australia for the purpose of converting coal into fuel oil. We do not produce oil at the present time, and the plant to which I refer was a complete one, yet” an average duty of 60 per cent, was imposed, because certain parts of the plant could be made in Australia. Owing to those heavy duties that industry has not been established, and a tremendous economic waste continues. On a great proportion of the imported machine tools used in Australia high rates of duty are charged, despite the fact that there is a special provision in the tariff for admitting, them duty free if they cannot bo commercially made in this country, and it is not possible to convince the Minister that they cannot be made here economically. Many articles that are admitted practically duty free at the present time could be made here commercially if the necessary machinery for their manufacture were allowed in free of duty. The honorable member for Adelaide (Mr. Yates) referred to certain stamping machinery, and pointed out that a statement by men who had not seen that type of machinery that it could be commercially made in Australia hud prevented the establishment of a local industry. The object of the amendment that I am about to submit is to extend tariff preference to Great Britain, to a much greater degree than has been possible in- the past,by reducing the British preferential ruth. That would force a reclassificationof the series of sub-items with which the committee is now dealing. If an articlecould be made in Australia, it should be put into a special class for duty purposes, and articles that cannot be made commercially in this country should be admitted duty free. I move -
That the paragraph he amended by adding the following: - “And on and after 1st October, 1931 -
1 ) Machines and Machinery, n.e.i., ad val., British, 25 per cent.; intermediate, 55 per cent.; general, 60 per cent.”.
.- I support the amendment. It seems to me that these duties, which were too high_ before, and which will be still higher if the rates in the schedule are agreed to, are the last that should be increased at the present time. If there is one thing that should be as cheap as possible in Australia it is the machinery of production, whether in the factory or on the farm, because it is highly desirable that the overhead costs of manufacture and production should be kept as low as possible. When a new enterprise is started in Australia, and a person wishes to manufacture goods which have never been made here before, he naturally looks -round for the best type of machinery for the purpose, but he is tremendously handicapped, in many cases, by the Customs Department.He begins with the initial handicap of having to pay a good deal more than is charged in any other country for the cementused in thefloor of his factory, for the glass in the windows, and for the iron on the roof. On proceeding to install his machinery,he finds, possibly, that Great Britain is the best place in which to buy the particular plant required, or, if his purpose be to establish a fruit-canning factory, for example, he may find that the United States of America is the only country in which efficient machinery of the desired type can be obtained. Then, because a particular engineer who has probably never seen such a plant before, and could not guarantee that a similar plant made in Australia would work satisfactorily, declares that such a machine could be produced in this country, the business man has to choose between a plant which could not be guaranteed to work satisfactorily and an imported plant on which the duties are - 55 per cent. British preferential, 65 per cent, intermediate, and 75 per cent. general. The heavy duty on machinery has brought about the failure of many an enterprise that should have resulted in the establishment in Australia of a new industry. I shall give a concrete illustration.
– It is not the fault of the present Government.
– I began my remarks by saying that these high duties were too high previously, and the Government which the honorable member supports is making matters worse by seeking to raise them still higher.
The fishmeal industry nourishes in Europe. In Germany, so much of this material is used for stock food that the local supply is insufficient to meet the demand, about 100,000 tons being imported annually. I understand that this meal is made from the cheaper classes of fish, and also from fish offal. Proposals for the establishment of the fishmeal industry were made recently in, I believe, more than one State, but they have been abandoned, owing to the particular duties which we are now discussing, despite the fact that the makers of the plant required - a British firm - were prepared to take three-fourths of the payments in fishmeal, which could have been exported after the plant was in operation. Yet, we have such a distorted sense of proportion, apparently, that we throw away a mackerel to catch a sprat. In order to provide a little temporary employment for a few men in the engineering trade, we lose an opportunity for the establishment of an industry which would provide work for a larger number of persons. Owing to the general depression, the fishing industry is in sore straits. A considerable section of the public are now unable to purchase fish, being compelled to depend on cheaper forms of food, and the demand for fish has fallen off to such an extent that fishermen have been forced to restrict their catches. If the fishmeal industry were now in existence - and I claim that it would have been established, had the tariff in. respect of the machinery required been administered in a sane way - those fishermen who find difficulty in making a living to-day would have had an additional outlet for a consider able part of their catch. Those who contemplated establishing the industry required a plant capable of processing 25 ton3 of fishmeal per day. They approached the Customs Department, and asked whether they would be permitted to bring the plant in from Great Britain duty free. They stated that they believed that such a plant had never been made in Australia before, while it was being manufactured satisfactorily in Great Britain, and could be guaranteed to give the desired results. The cost of the plant f.o.b. Great Britain was £3,150, and it was capable of processing 25 tons of fishmeal daily. The Customs Department made inquiries, and it was- ascertained that certain engineering firms in Australia were of the opinion that they could make some parts of this plant, such as elevators and so forth. Naturally, the British makers were not prepared to guarantee that the plant would work satisfactorily unless they provided the whole of the parts; nobody could blame them for that. A good deal of correspondence ensued between the promoters of the enterprise and the Customs Department, but I shall not weary the committee by reading the letters. The department held the view that as some parts of the plant could be made in this country, duty would have to be paid on it if it were obtained from Great Britain. I shall show the committee what the increased price would have been if the present duties of 55 per cent., 65 per cent., and 75 per cent, on “ Machinery n.e.i. “ had been paid. I have already remarked that the f.o.b. price of the plant in Great Britain was £3,150. Freight and insurance would have amounted to £588; the duty under the British preferential rate of 55 per cent., £1,906; the primage duty of 10 per cent., £346 ; the duty of 20 per cent, on the cost of packing, £30; the landing and delivery charges, £75 ; the exchange at 30£ per cent., £1,140; and the sales tax of 6 per cent., £434. That would have brought the total cost to £7,669. Some of these items, such as insurance, landing and delivery charges, would have been the same if the plant had been admitted duty free. Part of the sales tax would have been charged, but it would not have amounted to nearly so much if these duties had not been imposed, because the sales tax is assessed on the total cost, including all the duties. The price that the plant would have cost was so great that the project for the manufacture of fishmeal in Australia was abandoned. I believe that the dried fish weighs only about one-fourth qf the raw material; therefore, about 100 tons of fish would have been required daily to produce 25 tons of fishmeal.
– Why cannot the necessary plant be made in Australia?
– It was claimed that certain parts could be made here, if the specifications were given. But specifications could not be supplied. It was known that a plant capable of producing 25 tons of fishmeal daily was required, but they did not know the exact measurements of” the machine. Strangely enough, the Department of Trade and Customs would not permit them to import one plant so that it might be copied by Australian engineers, and thus make possible the building of further plants in Australia. The following letter was written to the Controller-General of Customs on the 6th July last by the firm who desired to import this machine: -
We desire to acknowledge receipt of your letter dated 2nd instant, and to request that we be informed as to reasons which have caused the Minister to refuse our application.
The correspondence submitted by us discloses that this plant is not, and, under present conditions of small demand, cannot be, commercially made in Australia. The number of plants which might be used in this country would not be sufficient to reimburse local manufacturers for their preliminary expenses, such as the cost of patterns, dies, &c, or to repay the cost of drawings provided by overseas manufacturers.
Moreover, a first Australian-made plant could hardly be completed in less than eighteen months, and meanwhile large numbers of fishermen would continue to suffer unemployment. Moreover, the number of men employed in manufacturing the plant in Australia would be comparatively tew - probably not more thantwenty, which figure bears no comparison with the number of fishermen , and operators to which these plants would give employment.
Under the circumstances, it is difficult to understand the decision of the Minister, specially in view of the anxiety of the present Government to relieve unemployment and to* create new industries, and the attitude of the Minister in this direction would not appear to compare favorably with that of the British manufacturers of this plant, who have expressed their willingness to accept 75 per cent, of their payment - spread over a considerable period - from the proceeds of the sale of fishmeal in Great Britain produced by the plant.
That is one of the most glaring examples that could be quoted to show the folly and the short-sightedness of the policy that apparently is being adopted by the Minister for Trade and Customs (Mr. Forde) in connexion with the admission of plant that is required by a new industry in Australia. I could add illustration to illustration; but I shall content myself by supporting the amendment of the right honorable member for Cowper (Dr. Earle Page), because I consider that we should give a much more substantial preference to Great Britain than is given by the duties that appear in the schedule. It is all very well to say that a duty of 55 per cent, against Great Britain, compared with 65 per cent, intermediate and 75 per cent, general, gives a preference to Great Britain. Undoubtedly it does; but what is the advantage of any such preference if the duty itself is so high that it is practically impossible to compete against it? It is like loading on a man a burden that it is impossible for him to carry, and urging that the treatment meted out to him is very favorable because another person is asked to carry a burden that is twice as great. The amendment is an eminently reasonable one, and should be accepted by the committee.
.- I, also, support the amendment of the right honorable member for Cowper (Dr. Earle Page). I consider that this is one of the most ill-considered duties that has ever been applied. If we are to bring down production costs, whether in primary or secondary industries, we must at least make machinery for production as cheap as possible. I am an advocate of the principle of establishing Australian manufactures, so far as that is reasonable and economically possible. In this case, however, industry is being taxed unnecessarily, by the extortionate duty that is imposed. The amendment proposes that the duty on British machinery shall be 25 per cent. I point out that tie present duty of 55 per cent., being on an ad valorem basis, is equal to 60 per cent. Then there is a primage of 10 per cent., an exchange of approximately 30 per cent., a packing case duty which approximates 2 per cent., and shipping, insurance and other charges, which vary from 10 per cent, to 15 per cent. Adopting the former figure, it will be found that the total is 112 per cent., which, added to the price of an engine costing £100 f.o.b. in Great Britain, would make the price landed in Melbourne or Sydney considerably over £200. The cost to the primary or secondary producer would be raised proportionately. No more flagrant example of the effect of the application of this duty can be quoted than is to be found in the case of engines of the crude oil type, particularly those of larger horse-power. Those large oil engines comprise a variety of designs and types. A common design of any type could not be made to suffice for all purposes; standardization is not possible. Any honorable member who is at all acquainted with machine shops knows that, in order to produce machinery, drawings have to be prepared, patterns made, and certain tools manufactured. If made for one machine only, the cost becomes ridiculous and out of all proportion to the usefulness of the machine. In the case of engines, some of these machines’ may be of horizontal type and others of vertical type, some heavy running at low speeds, others light running at high speed, some on the two-stroke, and others on the four-stroke principle. In order that the most suitable type may be obtained to meet the particular circumstances of the case, and the purpose for which it is required, it is necessary that the whole of the above range should be available within Australia, because at the moment all types are being used. .No country in the world has reached a higher standard of quality in engine manufacture than has Great Britain. In that country are established numerous firms which are noted for their production of a particular type of engine. If a provincial town in Australia wishes to install its own lighting plant it must purchase a certain type of engine to drive the dynamo ; but simply because one firm makes a certain type of engine in this country, the Government endeavours to compel that municipality, which may be hard-pressed for funds, to purchase its engine from that particular manufacturer, even though that engine may be unsuitable. Unless the council can induce the Minister to allow the duty to be lifted for the occasion, it is obliged to suffer that enormous- penalty. Is it to be wondered at that we cannot bring about decentralization, and that there are thousands of unemployed in our cities? The people will not live in our country towns because they are penalized in regard to their transportation charges, first, on the goods that they obtain from the cities, and, secondly, on the products that they send to the coast. In addition, they have to pay excessive duties on the equipment that is necessary to provide them with some of the benefits of civilization.
One of the worst features of this duty on machinery or that type of engine is that, under a by-law, either the Minister or the department may be induced to lift the duty so as to allow the machine to come in free. Let us consider how that by-law may be applied. I have particulars of goods that were landed in Melbourne in February last for tariff decision. In the case of a vertical oil and gas engine of 400 horse-power, the duty was lifted for a day and the engine was allowed in free. On the same day another ‘300 horse-power engine of the crude oil type also was allowed in free. The ordinary honest firm that is asked by an urban or country municipality for a quotation for an English or continental engine that cannot be made in Australia, would estimate the cost on the basis of, the English f.o.b. price, to which it would add all the other charges that I have enumerated. But another indentor who felt that he was on good terms with the Customs Department would say, “ I can get the duty lifted in your case “. I do not say that there is anything dishonest in that practice. But what is the result? An engine worth something like £1,000 or £2,000 would, in the case of the straight-out trader, cost” an additional 112 per cent., while the other indentor who knew that the Customs Department would allow the machine to be imported without payment of duty, would be able to quote .a figure so much lower. Is that any inducement for factories to equip themselves with uptodate machinery, and is it fair to the importers or even to the manufacturers of machinery?
The purpose of the amendment is to make the Minister enumerate the different types of machines, and to state specifically the duties that apply to each, instead of having a drag-net item with power in the hands of the Minister to say, when the occasion arises, whether the duty shall be applied or not. Some honorable members must know how the process works; I do. An importer places an order with a firm on the other side of the world. When the goods arrive he interviews an official of the Customs Department. Two or three other machinery firms in Australia are shown a catalogue of one of the best-known makers of engines overseas, and are asked to say whether they could make, the particular type of engine on which it is sought to have the duty lifted. In 90 cases out of 100 the reply is : “ We could “. The question asked should be : “ Could you make it economically, at a price that would pay the man who buys it?” The customs official, knowing very little about the quality of the machine to be imported, accepts the word of the local manufacturers. The manufacturers of machinery in Australia, if we exempt agricultural machinery, employ only a handful of people; yet on their assurance that they could make the machines, a 55 per cent, duty is imposed. There are thousands of firms in. Australia who could copy most machines, but could not make them economically, or turn them out on the same scale or of the same quality as .those turned out by overseas manufacturers. This would be admitted by any manufacturers who did not want to see the public fleeced by excessive costs. If, when the matter was placed before them, they had the courage to say: “We could make them, but not at a reasonable price “, the imported article would be admitted duty free. They are rarely frank enough to make that admission, especially in these depressed times when they want work at whatever cost. Because both primary and secondary producers are being penalized, and on the ground that costs would be reduced if our machinery were available at as cheap a price as possible - a condition that must be present if we are to regain economic equilibrium - I have much pleasure in supporting the amendment.
.- The immediate effect of a reduction of the tariff upon machinery has been belatedly realized by certain honorable members who have preceded me; but the principle which the amendment embodies is absolutely opposed to the practice that has been adopted in the past by governments that have not hesitated to impose revenue tariffs against the particular items that have been discussed this evening. The Leader of the Country party (Dr. Earle Page) said that he had moved the amendment with a view to helping British manufacturers and encouraging trade with Great Britain, at a period when it is suffering extraordinary economic distress. My knowledge and experience of the manner in which the department exercises its right to waive the duty cm machinery that cannot be commercially manufactured in Australia, convinces me that the administration is absolutely efficient and sensible. Unfortunately, this debate is degenerating into a general attack upon the protectionist policy. The contention in favour of a reduction of the duties on railway_ rolling-stock might be all right if we could expect reciprocal treatment from the countries likely to be benefited. If such duties were removed, we might get our rolling-stock from the United States of America ai slightly cheaper rates, but we have to remember that that country imposes a duty of 13¼d. per lb. on Australian wool, a prohibitive tax which makes it impossible for us to sell our wool in America. Yet honorable members opposite have pleaded, ostensibly for the benefit of the primary producers, that we should admit free of duty the machinery manufactured by a country that deliberately excludes one of our primary products. As for the plea on behalf of the manufacturers of the United Kingdom, the fact has be«n convincingly demonstrated that some of the goods imported from Great Britain are the products of other countries, and it would be impossible for the Customs Department to police imports in such a way as to ensure that the preference granted to Great Britain applied only to goods manufactured there. I have expressed on other occasions my view that the tariff is not scientific, and that it . places on industry direct burdens that could be avoided, especially having regard to the changed economic conditions thai have resulted from the adoption of the financial emergency plan. Therefore, I regret that honorable members opposite, instead of concentrating on those items which could be immediately amended without detriment to the policy of protection, are making a general attack upon the tariff. The machinery produced within the Commonwealth, particularly agricultural machinery, is designed to suit Australian conditions, and its efficiency has been proved. I have always maintained that the interests of primary and secondary industries interlock. Our fiscal policy should be designed to hold, the balance evenly between those two sections, but the scales are in some respects weighted unduly in favour of the manufacturing and urban interests and against the primary producers. Such injustices which result from the unscientific application of the tariff could be removed, but I can see no justification for the proposal of the honorable member for Gippsland (Mr. Paterson) that Australia should “adopt a flexible tariff which would enable it to exchange its primary products for machinery and other manufactures of America. Such a policy would disregard the general development of the country, and would tend to break down the tariff barriers behind which our young industries are establishing themselves. Machinery that can be commercially manufactured in Australia and sold without increasing the burden on industry should be manufactured here. The elimination of such manufactories or any other secondary industries that are on an economic basis must reduce the consuming power of the community by lessening the market for other products. In regard to the claim that greater preference should be shown to the product? of Great Britain, leading economists in the United Kingdom hare admitted recently that one reason why she is losing trade in machinery and in other manufactures, i3 that she is 25 years behind some of her competitors. That contention has been advanced by those who advocate that Great Britain should alter her fiscal system in order to protect and develop her manufacturing industries. I f Great Britain is manufacturing machinery which is necessary to the development, of Australian industry- and such machinery cannot be commercially manufactured here no duty on it is charged. Surely that preference is ample. When we are asked to lower our protective duties in order to relieve the economic distress in the Mother Country, I remind honorable members that we are dealing with an emergency tariff, formulated to cope with an extraordinary economic position in Australia. Those who fail to realize that the present tariff policy has been rendered necessary in order to maintain the solvency of Australia are ignorant of facts which should be known to all students of public affairs.
– The items in this particular section of the tariff furnish the clearest evidence of the slip-shod methods adopted by the Government in the compilation of the schedule. Articles covered by some items undoubtedly should be protected - every honorable member approves of the protection of legitimate Australian industries - but others which cannot be manufactured in Australia should not be subject to the heavy rates of duty that have been imposed. It is remarkable that, in respect of 108 items, the ra’te of duty is to be “ as prescribed by departmental by-laws “ - further evidence of the ruleofthumb method followed in the classification of these items. In many instances the Minister, or a departmental officer, will determine whether or not certain articles can be manufactured in Australia. Upon his decision will depend the rate of duty to be levied and whether those engaged in the industry concerned will get a fair deal. This is a singular and, I submit, altogether too great a power to place in the hands of the person who, for the time being, is Minister for Trade and Customs. The trading community is entitled to know where it stands, and what rate of duty is payable upon certain classes of machinery without having to appeal to the Minister or the department for n decision. The tariff, and particularly this section of it, is, I repeat, full of absurdities. In some items the rate of duty will depend upon whether the article in question pmu he “commercially manufactured” in this country. I have asked the Minister for a definition of this term, but the honorable gentlemanhas declined to say just what is meant and, as we all know, his interpretations and definitions are as variable as the winds that blow during the equinox.
– Apparently the Minister takes the view that because an article can be manufactured in Australia it can be “ commercially manufactured,” which, of course, is absolutely wrong.
– Exactly. On several occasions when applications have been made for the admission of machinery or other commodities duty free on the ground that they cannot be manufactured in Australia, the persons making the applications have been required to produce blue prints or plans. These have been shown to local firms, who thereupon alleged that the articles could be manufactured in Australia, with the result that the duties have been imposed and the public of Australia penalized. I have in mind a case which aptly illustrates my point. Recently ‘ the Manly Gas Company obtained quotations from Chicago for a spherical gasometer, the landed cost of which was £3,129.When application was made for its admission duty free, the Minister made inquiries and informed the company that the gasometer could be manufactured locally by the Cockatoo Island Dockyard for £6,520. Apparently, this is the Minister’s interpretation of the phrase “ commercially manufactured “ which appears against so many items in the tariff. As a result of the Minister’s activities in this matter, the Manly Gas Company was compelled to pay duty amounting to £2,005 on a gasometer costing £3,129, making the total cost £5,134, which was still £1,386 below the quotation obtained from Cockatoo Island Dockyard. The Manly Gas Company will be unable to show any tangible assets in its capital account for the £2,006 duty paid on the gasometer, and, in addition, the users of gas in the Manly district will be forced to pay for all time approximately ¼d. per foot more for all gas consumed. This is the direct result of the absurd fiscal policy of this Government.
– To be logical the Minister should have levied sufficient duty to cover the difference between the cost of the imported gasometer and the Australian quotation.
– Evidently he did not think of that; otherwise he would have done so. All honorable members agree that the costs of production must come down ; but, when supporters of the Government make use of this argument, they have in mind the costs, not of secondary, but of primary production, and in- continuance of its policy to assist manufacturers, this Government persists in imposing duties which work the greatest harm to primary producers. Apparently Ministers and their supporters fail to realize that, unless costs are reduced in our secondary industries, it will not be possible for our primary producers to reduce their costs to a material extent, and yet this is essential if they arc to market their products overseas on a competitive basis. I could cite many instances to prove the harm which this Government, through its tariff policy, is doing to Australian industries. Although the Diesel engine provides the world’s cheapest form of engine power, it is subject to the same duties in Australia as the ordinary petrol and . kerosene engines. One well-known British Diesel engine reduces the cost of running, as compared with a petrol engine, by 75 per cent. This particular engine represents the very latest developments in engineering, and experimental work, which is still proceeding, has already cost the makers more than £30,000 on the new model alone. Similar engines are admitted free of duty to New Zealand. As 90 per cent, of the importations are for the use of primary producers, one has not far to look for at least one of the reasons why the primary producer in Australia is so much worse off than - the primary producer in other parts of the Empire. This item is typical of the treatment accorded to the primary producers in hundreds of items in the tariff. There is no justification whatever for these particularly heavy duties upon articles which are not manufactured in Australia.
Mr.Forde. - They are admitted duty free from Great Britain if they cannot be manufactured in Australia.
– I have just cited an instance of tariff blundering in connexion with the Diesel engines.
– Gasometers can be manufactured iti Australia.
Mr. ARCHDALE PARKHILL.That is not denied ; but, as I have shown, at what price! The Australian price obtained by the Manly Gas Company was £6,520, as against the Chicago quotation of £3,129 landed at Manly. It is hopeless to expect anything from a Minister holding such an oblique, and, I suggest, idiotic view on tariff matters.
It has always been a rule, when machinery has been allowed in duty free on the ground that it cannot be manufactured in this country, to permit local manufacturers to inspect it with a view to its reproduction in Australian workshops. And yet I have a case in which the Minister has withheld permission on the ground that, if it were permitted, he would be favouring one competitor at the expense of another! The Minister has altogether a mistaken conception of his position. That particular machine was admitted duty free on the understanding that it would be open to inspection by Australian engineers with a view to its manufacture in Australian engineering establishments. The Minister said that the person who desired to inspect this machine was entitled to do so provided he made arrangements with a certain manufacturer. The necessary arrangements were made, even to the fixing of the day and hour; but when the time came, the manufacturer refused to allow the inspection to take place. A report to that effect was made to the department, and the gentleman was informed that he was entitled to inspect the machine. The manufacturer again agreed to allow the inspection to take place, but later again withdrew his consent. For some inexplicable reason, the Minister, who is a Czar for the time being, issued a ukase that, no one was to inspect the machine. I do not know whether he has since made an order that the machine must be kept covered for fear some one might surreptitiously inspect it; but those are the facts to which I direct attention. The Minister has my correspondence with the department, and to that extent has the advantage over me, for I am speaking from memory. I have, however, given the salient facts of the case.
I entirely repudiate the absurd suggestion of the honorable member for Calare (Mr. Gibbons) that honorable members on this side of the committee are discussing the general fiscal policy of the Government. Under the able direction of the Chair, the debate is being kept close to the items under discussion, which throws up in bolder relief the nonsensical statement of the honorable member. The hard, cold facts are that, although this honorable gentleman is supposed to be representing the primary producers, he very rarely has. sufficient courage to support his sentiments by his votes. As his constituents are almost wholly wheat-growers and other primary producers, it would be reasonable to expect the honorable member to champion their interests, and do his utmost to see that they obtain their” machinery under reasonable .’conditions; but he is full of inconsistency. He had something te say about holding the scales evenly between the secondary and primary industries. Everybody desires to do that, of course, but it will hot , be done by the methods which the honorable member has adopted. We are not here to talk as he has been talking. The Minister may laugh, but. that does not alter the fact that it is our business not to talk aimlessly around the subjects before the Chair, but to make some useful contribution to the discussion with the object, of assisting the community at large.
I direct the attention of honorable members to certain statements about tariffs which were made by Mr. Henry Ford in an interview published in the New York Telegram on the 20th May, 1930. The first of these is as follows :-
In Ford’s opinion a high tariff will not stimulate industry but will slow it down by s process of stultification. It will not do away with unemployment, but will eventually increase it by limiting or killing world trad* without, which business cannot properly expand.
Mr. Ford then goes on to make some apt remarks about the value of competition in business. It appears to me to be the ambition of the Minister and some of his colleagues to put an end to all competition in business in Australia, and to make impossible the adoption of new ideas and progressive business methods by creating monopolies. In this connexion Mr. Ford says -
Business thrives on competition. Nobody does his best if lie knows that no one is competing with him. Comfortably tucked away behind a tariff wall which completely shuts out all competition, and which gives industry an undue profit which it lias not earned, the business of our country will grow soft and neglectful. ‘ Instead of enlarging and putting on an increasing number of workers, the tendency would bo to be satisfied with things as they were, and to stand still.
Despite these Himalayan tariff imposts, business is at a standstill in Australia to-day. In to-day’s newspapers, the statement is made that, notwithstanding the promises of the Government, there are 29,000 fewer workers in the factories of New South Wales than there were last year.
– What is the position in America ?
– I am dealing with bur own country. I shall leave the honorable member to deal with America. The Minister has stated, not once or twice, but a score of times, that the result of the imposition of these duties would be to increase the number of our factory employees by at least 50,000; but the actual position is that there are to-day about 100,000 fewer employees in the factories of Australia than there were before the Minister attempted to bolster up industry by embargoes, prohibitive duties and similar impositions.
In his concluding remarks Mr. Ford, in the article from which I have already quoted, referred to prohibitive pretention in the following words: -
Tt is just a final belated effort on the part of a small group of men to have one last, fruitful, dig Into the pockets of the masses.
The one inevitable result of the operation pf these duties will be that a relatively small handful of people will dig deeply within the pockets of the primary producers and the wage-earners who constitute the masses of this country. I am unable to understand bow it is that our wage-earners do not realize that the result of the piling up of high prices must mean the scaling down of their wages. The pushing through of this tariff schedule is neither more nor less than a base attempt on the part of a Labour government to reduce the wages and the scale of living of the workers of this country, without pro viding them with a single compensating advantage.
I shall support the amendment, but 1 regret that it does not go far enough. It will still allow the imposition of duties of 60 per cent, and 65 per cent. Such protection, plus the primage duty of 10 per cent., exchange of 30 per cent., and freight and insurance charges, should be sufficient for any purpose. But all through the items of this tariff schedule one finds anomalies and evidence of injustice and unfairness. No honorable member has any desire to deal unfairly with the manufacturers of this country; on the other hand, we wish to do everything we can reasonably do to help them. But we also have a duty to the men living in the bush who have to struggle foi a living without any protection whatever, They have to sell their products at world parity prices without the adventitious aids which those engaged in secondary industries receive. Then, too, we are surely under an obligation to consider the interests of the mass of the consumers who constitute the majority of our citizens, and who, while receiving the rawest deal that any government has given them since the consummation of federation, are eing entirely forgotten by honorable members opposite.
– The honorable member for Warringah (Mr. Parkhill) has stated that the department has meted out unfair treatment to one of his constituents who desired to inspect a certain machine which had been admitted duty free under departmental by-law. I shall not mention the name of his constituent, but his letter to the honorable member read -
My principals about a year ago imported a machine from America, and have been so successful that they now desire to increase their plant and consequently will be giving more employment to Australians.
Later, the letter stated -
It occurred to me that I should avail myself of the opportunity of inspecting a machine for a similar purpose which was imported some time ago duty free under a customs by-law.
The departmental attitude in connexion with such applications is set out in the following letter: -
I desire to inform you that in dealing with applications for admission of goods under by- laws the fundamental fact to be established is whether the article’ is or is not being commercially made in Australia. If the article is not being made in Australia, the Minister may then admit such goods under the appropriate by-law item of the tariff. This principle lias been followed by the department under various Ministers since the inception of federation.
During the time the late Mr. Pratten was Minister for Trade and Customs, a system was instituted whereby recipients of tariff concessions should, if further supplies were required by them, endeavour to have their subsequent requirements manufactured in Australia. A form of guarantee was drafted, the terms of which are very wide, but the application of .which has always rested in thu hands of the Minister. In the late Mr. Pratten’s time it was laid down that although the importer would be required to furnish satisfactory evidence that he had endeavoured to obtain future supplies in the Commonwealth before a further concession would be granted, it was not intended that any importer or manufacturer should bc forced to disclose to a competitor the details and knowledge which he had spent money abroad to obtain.
In the case now under review, it is acknowledged that the principals imported a machine from America about a year ago, and yet the applicant desires on their, behalf to inspect a machine imported by a competitor. This, the department does not consider equitable, and for this reason the Minister has not .insisted upon the firm concerned permitting the applicant to view the machine imported by that company.
The grievance was that this gentleman was not allowed to insta machine that had been brought in b,y his competitor. My department has been subjected to a good deal of criticism because that machine was brought it; free, but the competitive company also brought in a machine duty free When the late Mr. Pratten was Minister for Trade and Customs, he laid down a certain principle that has been invariably followed by his successors, and from which I have not departed.
The honorable member for Gippsland (Mr. Paterson) said that he could quote an instance showing where the machinery duties had prevented the establishment of the fishmeal making industry in Australia. He said that my department had notified the company that the necessary plant could not be admitted under by-law because certain portions of it could be made in Australia The actual position is thru the managing director of the Fish Meal Company, the concern that had allegedly gone out of existence because my department would not allow it to bring in a machine duty free, notified my department to this effect -
The managing director stated that he has. had a number of interviews and discussions with Mr. J. W.” Stamp, regarding the manufacture in Australia of a plant suitable for treating wet fish for fishmeal, with the result that he is now satisfied that the plant offered by J. W. Stamp would be entirely suitable for the requirements of Marine Industries Limited The same gentleman also stated that negotiations with Mr. J. W. Stamp have been so successful that it has been definitely decided by his company to place an order with Stamp to proceed with the manufacture of a plant for erection at- , in New South
Wales. He further stated that in addition to being absolutely satisfied that the plant offered by Stamp would be efficient and suitable for treating wet fish for fishmeal, its cost to his company would be approximately one-half of the f.o.b. price of the English unit. He also stated that although the plant offered by J. W. Stamp is of a smaller capacity, and operates differently from the unit offered by the English manufacturers, lie is satisfied that it will bc ;i success as a fishmeal making plant.
Another company intends to establish a plant. I think in Sydney, and it needs some special machinery. Its representative called to see me a few days ago, and I asked him to consult with Mr. J. W. Stamp. He did so, and then told me that Stamp could not manufacture the type of machine required. If that is the case, the special machine needed will be allowed in duty free. No department could d’-al more sympathetically with such rases than mine has done.
The right honorable member for Cowper (Dr. Earle Page) said that during the last seven years Australia had imported over £100,000,000 worth of machines and machinery. Unfortunately, for purposes of analysis, the statistical item “ machines and machinery,” covers a wide range, including cash registers, cooking appliances, cable wire, electric fans, lamps, telephones, wireless sets, lawn mowers, typewriters, and so on, all of which can hardly be described as machinery necessary for the production of consumable commodities. When it comes to a matter of production of highlyspecialized articles, my department takes a most sympathetic view of the matter. The right honorable gentleman said that we should seek by preferences to give Great Britain orders for machinery that is now purchased from the United States of America and Germany. Later in his speech, he declared that British manufacturers were not foolish enough to manufacture highly-specialized machinery that could be bought to greater advantage in the United States of America and Germany. The right honorable member’s speech was illogical. The Government is making every endeavour to have these machines made in Australia, bin, where that is not possible, it is realized they must be brought in from overseas - at times from the United States of America and Germany.
.- This is one of the most important items in the tariff. It is a drag-net item, providing that all machines and machinery n.e.i. aru to bear a duty of 55 per cent., 65 per cent., and 75 per cent. The British preferential rate is being increased from 45 per cent, to 55 per cent. As the Minister said, it is a very general item, which applies to many articles.
We have to draw certain distinctions in order to arrive at a wise conclusion on the proposal of the Government. In the first place, as the right honorable member for Cowper (Dr. Earle Page) pointed out, ii is very important to do everything in our power to reduce the capital costs of industry. There have been examples where, owing to. the imposition of heavy duties upon machinery imported to make consumable goods in Australia, very heavy costs indeed have been permanently imposed upon an industry* I agree, in a general way, with the idea that we ought to remove the duties from the capital assets where we import for the purposes of further production. That, however, is only one side of the matter. The other side is that “it is quite impossible for Australia to obtain any real success in manufacture unless there is an efficient and effective engineering industry here. An engineering industry cannot be efficient if it is confined to casual repair work. There must be an opportunity for manufacture, as well as for repairs. Any one who is interested in the matter must be aware that - and I do not reflect upon anybody - the engineering industry in Australia is a deplorable one. It has been so for some years past. Recently, there was an in quiry in the Arbitration Court into this industry which showed the need for some rationalization, and indicated that the engineering industry in Australia required overhauling. It is a pitiful thing to see how Australia is losing engineering work. Speaking generally, no ship repairing is now being done in the Commonwealth. Owners prefer, if possible, to have the vessel towed to another country to have the repairs effected.
– By cheap labour.
– lt is a matter of costs, as against those of the whole world.
– Does the honorable gentleman suggest that Australian artisans are not efficient?
– No. I say that our costs are so high that our ship repair work has gone. Everybody who has any information with respect to the engineering industry in this country, knows that. At the present moment, a leading Melbourne firm that used . to do thousands of pounds worth of repair jobs a year is in liquidation. Cockatoo Island Dockyard and Mort’s Dock are also in an unfortunate position. The costs are too high. It is all very well to deplore that fact, but that does not make jobs for men. This work has practically vanished. So long as the costs remain high in Australia, the work will not be done here. “"”What are we going to do about it? Are we going to remain at zero point, or try to recover this and other work? Certainly, we should try to recover it. Higher duties have been imposed upon machines, machinery, and machine tools. Is it likely that the result is going to be a diminution of costs in engineering work done in this country? It is hardly pretended that that is likely. I urge that there should bc a very careful reconsideration of the duties which affect the engineering industry. Take the New South Wales figures of work in engineering shops. I have not the precise figures in my mind, but I know that they are in the proportion that a factory which three years ago had 850 hands, to-day has only 12; another factory which a few years ago employed 1,400 hands now has only 300. In dealing with this item, we ought to consider the .engineering industry and other in- dustries which are dependent essentially upon it. Is it going to help those industries t Probably some honorable members opposite believe that the imposition of .these additional duties will provide more work in the engineering trade. It is a sad thing that there was far more work in the trade many years ago, when the duties were considerably lower than is the case to-day. This has to be borne .in mind. Many of the products of the engineering industry are implements of production, not consumable articles themselves, so that when costs are high the articles are simply not produced, because they are not ordered. The question then arises whether we are not going exactly the wrong way about effecting a revival in one of the most depressed industries in the Commonwealth. The number of men out of work in the engineering industry is probably proportionately greater than those unemployed in any other industry. There arc one or two honorable members here with special knowledge of this matter. I do not profess to any special knowledge, but those who do will, I think, agree with me that unemployment is worse to-day in the engineering industry than in any other. The condition of many former employees is’ pitiable. When the Arbitration Court inquired into the industry, this fact was recognized, although the inquiry was held before the present depression had become acute. The position is worse to-day, and I do not think that we shall help matters by imposing these’ duties. They will serve merely to aggravate the slackness of industry in general, and of the engineering industry in particular.
This ha& always been a general item. In ray opinion, the time has arrived when wo ought to differentiate between those machines which can be made perfectly well in Australia, and which there is no need to import, and other types of machinery which cannot be made here on an economic basis. Under this item, machinery is dutiable at 55 per cent., 65 per cent., and 70 per cent. I have here a pamphlet which illustrates lathes made by McPherson’s Proprietary Limited, Melbourne, and I have been interested to ascertain the reputation they have in the trades in which they are used. I find that they have an admirable reputation; they are apparently first-class machines.
– Are they for steel turning, or for wood turning?
– For both; and they are, I understand, highly efficient.
Let us give protection such as is fair and reasonable in respect of those and similar articles; but do not let us mix up machines like that Avith other machines of an entirely different kind. Owing to the high duties imposed, some machines are, in effect, being excluded from Australia to-day, to the detriment of various industries. They will probably never be made here, yet they are most necessary to certain Australian industries. If they are imported, such heavy duties are imposed that they amount to a handicap on our own industries, and our own people. It is true that item 415 a provides for the admission, free from duty, as prescribed by departmental by-laws of manufactures imported for use “ in the development of an Australian industry”, aud I particularly draw the attention of honorable members to that phrase “ or of the natural resources of Australia, or for use in public hospitals, or public educational institutions, or for use by public utilities established under Commonwealth or State law, and not conducted for private gain “. The item provides that such machines may be brought in duty free, if they are of a “ class or kind not commercially manufactured in Australia or the United Kingdom “ or of a “ class or kind not commercially manufactured in Australia “ and not admissible under certain other items. The honorable member for Warringah (Mr. Park hill) referred to a case in which a machine had been admitted under this by-law, and the Minister replied to the honorable member’s statement. Ever since I have been a member of this House I have had a quarrel Avith the Customs Department as to the interpretation of this provision. My quarrel has been, not Avith the present Minister particularly, but Avith all -those who have administered the department since I have been in Parliament. I take the present opportunity of referring to the matter, because it has a particular bearing on the item we are considering. In the first place, I have always understood that, as the honorable member for Warringah pointed out, when a specialized machine was admitted duty free under this item to a particular manufacturer, A.B., so that he might use it to develop an Australian industry, it was a condition that the machine could be viewed, and used as a model by other manufacturers engaged in the development of an Australian industry.
– By other engineers?
– Undoubtedly ; that is the whole purpose of the provision. If A.B. is allowed to import the machine duty free, why should X.Y., his competitor, have to pay 55 per cent, or 65 or 75 per cent, duty on a similar machine? Surely A.B. is not to be given the benefit of a duty-free machine for his own private profit! The essence of the provision is that a machine is to be used in the development of an Australian industry, and the Customs Department has generally interpreted that as meaning that, if if allows A.B. to import the machine free of duty, he must allow his competitors to see it.
M r. Jones. - Could not the competitor import another machine duty free?
– No, because one machine has already been imported, and it is supposed to be available for copying.
M r. Martens. - If the competitors of the first importer were allowed to import machines also, then there could be no restriction upon anybody importing them.
– I have always understood that the department had in mind the development of an Australian industry, and not the benefiting of a particular person. It is only a competitor who has any use for a machine imported on these terms, and the competitor should have the right of access to a machine admitted duty free. This idea of excluding the competitor would, if logically applied, result in the exclusion of everybody who was interested in the industry, because only competitors would be interested.
– If a machine is not commercially manufactured in Australia, why should not the competitors be allowed to bring in machines under similar conditions to those enjoyed by the first importer? ‘
– The practice has been to admit a machine not hitherto manu factured here, so that it may be used as a model for the manufacture of similar machines here.
Mr.Forde. - There is very little demand for the particular machine which has been referred to. In this case, both the interested parties were allowed to bring in machines duty free, because there was not sufficient demand for them to justify any one making them here.
– If the Minister will allow everybody to import the machines duty free when they are not manufactured here, I have no complaint.
-Did the Minister allow the man to whom I have referred to bring in a machine duty free?
Mr.Forde. - He had brought one in duty free twelve months before the other was imported.
– I shall content myself with re-stating my contention as follows: If a person is allowed under item 415 a to import a machine duty free, either everybody else who wants to import a similar machine should be allowed to do so without payment of duty, or the first importer should be compelled to permit any one who desires to do so to inspect that machine.
My real quarrel with the department is over the interpretation of the phrase, “ being of a class or kind not commercially manufactured in Australia “. It appears to me that, both under the present administration and past administrations, the Customs Department has interpreted the phrase “ not commercially manufactured “ as if it were “ not commercially manufacturable “. This Parliament has not authorized the Customs Department to say to manufacturers, “ Can you make this machine here if you get an order?” Such an inquiry is irrelevant to this provision. The only inquiry authorized is whether the machine’ is already being commercially manufactured in Australia. That is the plain meaning of the item. The present Minister and his predecessor have accepted, the interpretation of the officers of the department that if a machine can be made - which is often a matter of opinion - on a commercial basis, item 415 a cannot be applied in favour of an intending purchaser of a machine from another country. Plainly, the words of the item refer to articles now actually being made, or which have been made, and there is a great deal of difference between the phrases “ not commercially manufactured in Australia “ and “ that cannot be commercially manufactured in Australia”. The first phrase refers to a matter of fact, the second to a matter of opinion. The best test of what I may call “ commercial manuf acturability “ is whether the article in question, is, in fact, being manufactured at the time. If a machine or article has never been manufactured in Australia, it is unlikely that it can be manufactured here in any quantity on a payable basis, because there are so many persons out to make money that if it could be manufactured commercially some one would have already begun to do it. The question whether a machine can be manufactured here commercially is disputable and doubtful, and has led to many injustices in the administration of the Customs Department. If the words were applied in what seems to me to be their plain meaning, many of the difficulties which have arisen in the administration of the law under item 415 a would disappear, and the intention of Parliament would be carried out. This is a discretional item. There has to be a departmental by-law before there can bo an admission, and citizens are not in a position to test the matter. I urge the Minister’s earnest consideration of what I suggest is the plain meaning of the phrase. The true intention of Parliament should be carried out in the administration of the tariff.
The right honorable member for Cowper (Dr. Earle Page) proposes to effect a reduction of from. 45 per cent, to 25 per cent.
Mr.Forde. - That would be bringing the duties below those imposed under the 1921-28 tariff.
– I am prepared to vote for a reduction, but not by way of a jump like this. Even with the exchange rate as it is, it seems to me that a reduction of from 45 per cent., ‘as was imposed under the 1921-28 tariff, to 25 per cent, is very serious.
– Only 20 per cent.
– It has been 45 per cent, since 1928, and at present I feel that a reduction to 25 per cent, over all is rather heavy. On the other hand, I feel, as I have said, that over the whole range of articles covered by this item, the duty is absurd. With the knowledge that has been gained by years of administration it will be admitted that a reclassification is necessary. On some articles this protection may be justified ; on others it is not. In many instances, we arc only injuring Australian industries by imposing these duties. It is not as if revenue were obtained from them. Often their operation frequently means that manufacturers have to do the best they can with inefficient plant, and therefore find it more difficult to compete with imported goods. The real remedy is to be found ina reclassification. I therefore ask the Minister to consider whether it would not be practicable to select’ some articles on which high protective duties can be justified, and in the interests of all sections of the community to reduce the duties on the others. Although I feel that at the present moment there ought to be a real reduction in many of the duties imposed, I am inclined to think that a reduction of 20 per cent, is rather heavy. I should like to hear more on the subject before definitely making up my mind on that aspect of the question. I shall listen with interest to the debate before I finally determine how I shall vote.
– I do not profess to be an authority on mechanical engineering, but I know something of the difficulties encountered by those who have to install different types of machinery. During the last eighteen months, applications were made by the City Council of Cairns and the Town Council of Thursday Island in my electorate for the free importation of certain machinery which they desired to install. I unsuccessfully endeavoured to obtain a remission of duty on those two particular plants, as the Minister contended that they could be manufactured in Australia. In each case, reputable machinery merchants called for tenders for the supply of these plants, and in one case an incomplete tender was submitted, but in the other no tender at all was forthcoming. It is therefore reasonable to assume that the complete plants could not be manufactured in Australia otherwise those engaged in the manufacture of such machinery would have submitted tenders. Although some parts of the plant may be made in the Commonwealth, the fact that no tenders were received was a clear indication to me that the complete plant could not be commercially made in this country. In the two instances I have mentioned, machinery was required by public bodies which cannot raise revenue very readily) and which have to conserve the interests of the ratepayers. I do not suggest that these plants could not be manufactured in Australia, but the fact that no offers wore received surely suggests that their manufacture was not a commercial proposition to Australian engineers. I am anxious to encourage Australian manufacturers, and I admit that in some cases very generous treatment is meted out to those controlling Australian industries. But, in the cases 1 have quoted, great hardship was inflicted upon two public bodies. I understand that» when a tender is submitted by an overseas manufacturer the whole plant must be taken, otherwise a higher rate of duty is imposed, which naturally presents a difficulty to those who wish to install machinery. If duties are imposed for the purpose of raising revenue’ the people should be told. The late Government imposed duties purely for revenue purposes, and, in fact, obtained most of ils revenue from that source. I am opposed to this or any other Government imposing duties merely for the purpose of raising revenue unless it distinctly states that that is its intention.
.- This is a dragnet item in which all classes of machinery which are not covered by other items are included. The reason for the increase of duties under this item which embraces an enormous quantity of machinery and parts has not been given. I am not one of those who approve of the Minister for Customs possessing the extensive powers which he now enjoys of increasing or remitting duties, lt places too much power into the hands of influential people. The imposition of these additional duties is having a most disastrous effect upon production throughout Australia. It has not even been contended that as a result of these unnecessarily high rates the number of persons engaged in industry has increased. When we reach electrical machinery I shall direct’ the attention of the committee to the opinion expressed by Sir George Julius, in Hobart, some time ago, who said that rather than have these heavy duties it would be better to pension off every electrical engineer in Australia, and allow electrical machinery to come in duty free. The first inquiry made by a British or American manufacturer who proposes to establish a factory in Australia is the price at which he can obtain power,- the first essential for cheap production. Honorable members opposite and . some on this side of the chamber seem to think that anything that is cheap is inferior. The honorable member for Calare (Mr. Gibbons), who is pleased to think that the Government of New South Wales pays a higher price for the rails and locomotives used in his electorate merely because they are’ manufactured in Australia, apparently, disregards the additional burden which is placed upon the primary producers in the matter of freight. In connexion with the contract let to Messrs. Thompson and Company, of Castlemaine, some years ago for the supply of fourteen locomotives for use on the Port. Augusta to Oodnadatta railway, the extra price involved in giving the work to an Australian manufacturer necessitated an additional interest payment of 6 per cent, in the £1 and 10 per cent, in the £1 sinking fund which is equivalent to £570,000. Notwithstanding these unnecessary additional imposts, some still ask for lower freights upon our railways. A little while ago an American engineer who came to Australia submitted an adverse report upon a big mining venture, because the necessary plant which could have been obtained in the United States of America for £250,000 would cost £525,000 in Australia. He said that the amortization was so great that the proposition was unprofitable. The tender of a Melbourne manufacturer for a plant capable of boring an 11-inch hole to a depth of 4,000 feet was £11,800, whereas that of an American plant capable of boring a 20-inch hole, 9,000 feet was £6,322. Imagine a government imposing a duty of £1,950 on the American plant that was to be used for boring for oil in Australia ! The
Government should have been agreeable to subsidize a company engaging in such an important work. I have received a letter to the effect that in connexion with a certain college building at Cannington, a merchant had under offer a power pump, which was lying in bond, and on consignment from the manufacturers. It was selected as the most desirable for the job, and was understood to be ordered, but with 75 per cent, plus 10 per cent., plus 4 per cent, primage, plus 33^ per cent, exchange, 2£ per cent, sales tax and 10 per cent, profit, the cost of the pump which would be £68 f.o.b. New York had to be quoted at £188, which would rise to £200 with the proposed increase to 10 per cent, primage and 5 per cent, ‘sales tax. The cost of the American plant was £6S, but the quote of an Australian manufacturer was £1S8, and in consequence of the excessive cost the work was not proceeded with. The Canadian duties on machinery such as that now under consideration are 15 per cent., whereas those proposed by the Government are 45 per cent.
– Canada has not the same advantages as Australia in the matter of natural protection.
– No; and Canada does not pos;ess the same facilities. A little while ago we dealt with the duties on pig iron, an essential commodity in the manufacture of machinery.- The British preferential duty on pig iron imposed under this tariff is 25s. a ton, but in
Canada importations from Great Britain are dutiable at only 2s. 9-&d. a ton. Is it possible to expect our manufacturing industries to progress when such high duties are imposed on raw material essential to production ? On iron and steel ingot3 we impose a duty of 42s. The Canadian duty is 10s. 3d. Is it any wonder that we cannot build up industries? We start at the wrong end. We make everything as expensive as we possibly can; first, the raw material, and, lastly, the machinery required for converting it into the finished article. How can we expect an industry to flourish under such a burden? There is every
Justification for the reduction asked for by the Leader of the Country party (Dr. Earle Page). I trust that common sense will prevail, and that the committee will agree to the amendment. [I’ll
– According to honorable members opposite who have spoken to-night, the time has arrived for a revision of our whole tariff policy. The* Deputy Leader of the Opposition (Mr. Latham) says that the metal trade is more depressed than any other industry in the country. As a matter of fact the depression in this industry is due to a change of conditions in the engineering world. Formerly, the steamers which visited Australia from overseas ports were of comparatively small tonnage, and a great deal of their repair work was done in Australia. Those steamers have now been replaced on the Australian trade by vessels of considerable tonnage, which carry their own engineering staffs, and undertake their own repairs. Modern, engineering methods have led to the adoption of standardization and mass production, and spare parts are produced by the thousand. This has had a depressing effect upon the Australian engineering shops, but the Australian metal trade would have been in a very much worse position if it had not been for the protection afforded by these duties.
I have had occasion to interview previous Ministers for Trade and Customs asking for the remission of duties on certain machinery, and upon sufficient justification being shown to them, the Ministers have acceded to my requests.
– What about the present Minister?
– So far I have had no occasion to submit any request to him.
The right honorable member for Cowper (Dr. Earle Page), who was a member of the Government when Mr. Pratten was Minister for Trade and Customs, is now asking the committee to reduce the duty below the rate fixed in the tariff schedule introduced by Mr. Pratten. Evidently, with him, a thing is all right when he is in a Ministry, and all wrong when he is in opposition.
The honorable member for Warringah (Mr. Parkhill) spoke of the additional cost of a gasometer purchased by the Manly Gas Company. Surely he is aware that the Manly Gas Company, having a monopoly, can impose whatever charges it likes upon its customers. I am a customer of the Manly Gas Company, arid 1 am obliged to submit to whatever conditions it lays down. According to the honorable member the company will be obliged to increase the price of its gas by ^ thousand feet because it has been called upon to pay £2,000 in duty upon a gasometer. Yet it cain still pay handsome dividends. The honorable member alao Spoke of the Ford monopoly in America. I remind him that the Ford works were built up under a protective tariff. The United States of America would riot be the country it is to-day if it had not had a protective tariff.
– If it had riot been for its population.
– The tariff has increased the country’s population. One purpose of the Austraiian tariff is to in.crease population in Australia. If we abolished our protection what chance would we have of attracting population to tills country? If the right honorable member for Cowper had his way, population would increase in Other countries at our expense. It is nonsense to say that Australians cannot make the machinery required in this country. It is true that we cannot do it at a price which would accord with the ideas of honorable members opposite. “We have no coolie or black labour to use. Our workers do not work for Wages such as are paid in Japan of China, or even in Great Britain. In Australia we have built up a wage based on a high standard of living.
The metal trade has as much right to be protected as any other industry in Australia. Some of our engineering shops are equipped with thoroughly up-to-date plants. “We have to choose between employing Australians in the manufacture of the goods we require and sending money overseas to enable our needs to be supplied from abroad. Of course, the question of
S minds, shillings and pence arises, but theovernment is not prepared to lower the workers’ standard of living.
-What is the use of high wages if there is no work?
– There would be little benefit to the Country if the workmen had pirn ry to do. but received starvation wages. If Australia is to progress, it must have, a protective tariff. The strength of a country is dependent to a large ex-teat upon the skill of its workers. If we do not protect our own engineering industries, the time may come when we shall need trained mechanics, and shall not be able to find them.
.- - I intend to reply to certain statements of the Minister regarding the importation of machinery. He said that he was willing to admit, free of duty, machinery that cannot be made in Australia, and the honorable member for South Sydney (Mr. E. Riley) remarked that we should do nothing that would result iri sending work out of Australia to cheap-labour countries; but, owing to the duties now under discussion, the Minister has actually caused work that Could have been done in Australia to be given to Japan. There was an opportunity for the erection of seven fishmeal plants at various points on the Australian coast. The Minister has been considering this matter since the 19th November last, and as I understand the last letter on the subject is dated the 10th June, the correspondence has extended over a period of eight months. The Minister now states that an order for one machine has been placed in Australia ; but I shall shew that this machine is of an obsolete type, and will prevent the success of the industry. The seven other plants, which would have provided work in Australia for hundreds of men, are not in operation to-day, because they could not be imported under present conditions, and fishmeal, which might have been made in this country by Australians, is being imported from Japan. The Minister has prevented the importation of certain machines, the manufacture of which in Australia, would have provided work for only a few mcn, but. hundreds of men would have been employed continuously in operating such machines. The sole effect of the Minister’s action has been to make a certain amount of extra work in Japan in the manufacture of fishmeal.
I shall quote extracts from some of the letters written by manufacturers to those who desired to import these, machines. In a letter dated the 19th November, permission was sought to bring into Australia a machine which would operate continuously under a solvent process for the manufacture of fishmeal and fish oils, which would have been suitable for human consumption as well as for consumption by stock.
– Does the right honorable gentleman say that seven different companies wanted to import machines?
– No; the original company has inquiries from seven different places in Australia where the machines could have been used, if their importation under reasonable conditions had been allowed.
– They have accepted an Australian machine, and are quite satisfied with it.
– The Minister speaks as though the manufacture of this machine was completed. Apparently, in despair, after trying for months to import suitable machines, somebody has given an order for a plant to be made in Australia, which, I shall show, will be obsolete when finished, and will hamper the industry from the beginning. In the first place, permission was desired to bring in, duty free, a machine which would work continuously with the solvent process. Various manufacturers were written to, but none had seen such a machine working in Australia. The Comptroller-General of Customs had suggested that certain, firms be written to, and every one of them replied that they could not make this machine unless they received a licence from Messrs. Hose, Downs and Thompson Limited, who hold the patent rights. In the event of that permission being given, they were willing to pay a 5 per cent, commission on all machines manufactured by them. An importing company, which was also a machinery manufacturing company in Australia, had a right under licence to manufacture a certain type of fishmeal plant which was not up to date. In a letter dated the28th January, 1931, this firm stated -
We know these firms, and would state that hitherto they have only made abattoir machinery for turning out manure, but the plant underconsideration is of a different type, and is for producing meal for feeding stock, and, possibly, also for human consumption.
This type of plant has only been evolved within the last few years, and hitherto there has not been a demand for it in Australia, so that Australian manufacturers have not had cause to study the problems attached to the successful production of fishmeal.
The company sent to the Minister copies of the correspondence that it had received. It was stated that the correspondence showed that one firm was not in a position to quote for the plant required, and admitted that no one in Australia had made a plant for the manufacture of fishmeal by these methods. The letter continued -
From the latter letter it is evident that these people have never made a fishmeal plant, and are not in a position to quote for a plant of the type required. They state that the continuous type of plant has not, in their experience, proved satisfactory.
But this type of plant has been in use in Great Britain, having been made by Messrs. Rose, Downs and Thompson Limited. The Australian manufacturers said that they would not turn out a continuous machine but one similar to that which was used in the making of manure, and added that the solvent process was not used. Horrocks, Roxburgh Proprietary Limited, however, pointed out that in England and Germany, where this industry is carried on successfully, the solvent process which the Australian manufacturer says is impracticable is the standard process. The letters that ] have in my possession demonstrate conclusively that, had the request of the firm been acceded to, there would be operating at the present time in Australia - on the Clarence, in Gippsland, in Sydney, and in Western Australia - from five to seven plants employing several hundreds of men, producing what we have now to import. It is not right for the Minister to suggest, in view of these letters and their dates, immediately a request is made, that there is a satisfactory answer to it.
I wish to place on record, also, the position in connexion with another machine that is used in the production of oil from copra. At the present time copra is somewhat of a. drug “on the market, yet coco-nut oil, which is extracted from it, finds a ready sale, and is worth twice as much. If we had copra mills in Australia we should be able to procure practically the whole of the copra that is grown in our island dependencies, and the other islands adjacent to Australia, and be able to sell the oil readily in Canada and the United States of America; but, when application is made for the admission duty free of a special type of oil-making machine, it is refused on the ground that certain portions of it can be made in Australia. Thus we are prevented from establishing a new industry and of doubling the value of the exports from Papua and New Guinea. Is not that a stupid position for us to be placed in?
I trust that the Minister will reclassify the whole of this item in such a way that protection will be given only to those machines that are actually being made in Australia, so that the. development of new industries will not be impeded by the exclusion of those the manufacture of which in Australia is merely problematical.
I understand that there is a feeling in the minds of some honorable members that, notwithstanding the present primage duty, a British preferential rate of 25 per cent, would not afford sufficient protection to those machines that are made in Australia. I therefore ask that leave be granted to amend my amendment to make the rates read, “British, 35 per cent. ; intermediate, 55 per cent. ; general, 60 per cent.”
Leave granted; amendment . amended accordingly.
.- The Minister has assured the committee that sympathetic consideration is given to every application for admission under by-law of machinery for specialized purposes. I shall give an example which I consider reveals anything but sympathetic consideration by the honorable gentleman. There is in Western Australia a company named Plaimar Limited, which has most successfully exploited a number of the local industries in the direction of producing chemical products and synthetic compounds, having been particularly successful in connexion with extracts from boronia and sandalwood. Its exports amount to approximately £120,000 per annum ; therefore it may be taken to be thoroughly bona fide. Its efficiency, and the capacity of its managers to deal with different industries, aro undoubted. Some years ago, with a view to extending its business, this company laid- down at a cost of £5,000 a farm for the growing of herbs, from which to extract essential oils and the like. Last year, when the farm was approaching the productive stage, the principal expert of the company visited Europe, and selected machinery suitable for the purposes of the new industry which if was intended to establish; and an application was made to the Minister, for permission to import the machinery free under by-law. Following . his usual practice, the honorable gentleman sent out his scouts to ascertain whether any manufacturer was prepared to undertake the manufacture of this particular type of machinery; and it was not surprising that some one was found who was prepared to take the risk-. A firm of metal workers in Adelaide whose business was connected with motor cars, having been given a general idea of the class of machinery required, and being incited by the prospect of securing a monopoly and of making high profits, expressed its willingness to undertake the manufacture of this machinery. It had the impudence to request that the specifications, which it was necessary for the overseas manufacturer to lodge with the department with his application for the admission of the machinery under by-law, should be handed over to it in order that they might be copied. It was unacquanited with the type of machinery in question, but felt that if supplied with the specifications it could make a success of the venture. It is to the credit of Plaimar’s that they refused to be a party to this piracy of other people’s ideas, and the specifications were, not handed over. Nevertheless, the Adelaide company persisted with its claim that it could manufacture this machinery. Later, I believe, the Minister discovered some Melbourne manufacturers who said that they, too, were prepared to take a chance on it. Mr. Marr, the technical manager of Plaimar Limited, went to the trouble of making a special trip to Adelaide to interview those who claimed that they were able to make this machinery; and he was absolutely satisfied that they were not competent to undertake the work. This machinery is in a highly specialized class; it is used in connexion with a new chemical business, in which Australia, and indeed Great Britain, is not able to specialize. Mr. Marr was not prepared to run the risk of paying for the experiment, to be performed by the
Adelaide manufacturer. The Minister after delaying the applicant from October, 1930, until March of this year, refused the application, on the ground that there were in Australia manufacturers who were prepared to undertake’ the manufacture of this machinery, the result being that “Western Australia was deprived of a promising industry, and neither the department nor the manufacturers have derived any benefit from their dog-in-the-manger policy. The Minister and many other honorable members have expressed a pious desire to give every facility to industry in order that work may be provided for the unemployed ; but the manner in which the tariff is administered precludes all possibility of that desire being realized. Machines are amongst the tools of trade of industry, and we cannot expect to be able to produce in Australia a very large proportion of the many classes of machines used here. Some oil engines and the less intricate classes of machinery may be made locally, but the more specialized machines, which are the product of extensive and costly research, and are required in only small numbers, cannot be economically manufactured here. Unfortunately, the administration of this schedule is controlled by a Minister whose enthusiasm for high protection amounts almost to an obsession. I commend that portion of the amendment which seeks to give a more effective preference to British products. Great Britain is Australia’s best friend and customer, and to her more than to any other country in the world must we look for the restoration of our prosperity. But effective preference to Great Britain is not conferred by the present .schedule. When tariff duties are so high as to operate prohibitively the preference which the schedule purports to give becomes a mockery. I agree that the Minister should exercise his discretion, particularly in the direction of excluding American goods. Australia loses on almost all of its transactions with the United States of America, and the ministerial discretion should be exercised iii the direction of curtailing imports from that country. But with Great Britain the administration should be more sympathetic. Moreover, when persons are trying to establish new industries, the Minister’s first consideration should be, not the interests of a few employees in some small factory, but the larger interests that will be promoted by assisting the establishment or development of some other industry. I cordially support the amendment.
– “Machines and machinery n.e.i.” excludes locomotives, tractors, internal combustion engines and all sorts of other machinery specifically mentioned in the schedule. Therefore, the item relates only to undefined machines and machinery which, so far as we know, are not made in Australia at the present time. The Minister may at any time propose a duty which he regards as essential, or admit duty free any machines that are not commercially manufactured in Australia. Therefore, the amendment moved by the right honorable member for Cowper (Dr. Earle Page) does not introduce any important principle. Although the right honorable member made a great onslaught on the tariff policy generally, and appealed strongly for greater preference to the products of Great Britain, his remarks were not particularly applicable to this item. Of course, every part of the Empire deserves to get the benefit of preferential duties, and how the amendment would help the Empire I cannot understand. The schedule provides for duties of 55, 65 and 75 per cent., and the amendment proposes that they be reduced to 35, 55 and 60 per cent. I fail to’ see that American goods will be excluded by reducing the duty on them from 75 to 60 per cent. I would prefer that the general tariff duty proposed by the Minister should be doubled against the United States of America. If the arguments that’ have been advanced by the members of the Opposition were applicable to the item? I would oppose the amendment. We have been told that £100,000,000 worth of machinery was imported into Australia during the last seven years. Presumably the importers were influenced by the knowledge that the tariff would protect the product of such machinery, and I shall not be a party to removing that protection, and thereby possibly rendering the machinery useless. I shall support preference to Great Britain wherever it does not involve the denial of adequate protection to those industries which can be, and should be, established here in the interests of the country, and for the employment of our people. There are many items that need all the protection that this schedule provides. That applies to some articles of machinery, but in respect of unspecified machines it is safe to leave to the administration discretionary power to collect duties or grant free entry, as the circumstances may dictate. I cannot support any general move for the reduction of the tariff duties, for I know that many primary as well as secondary industries would suffer considerably if the present policy of protection were tampered with. There are many who would reduce the duty on our primary products to favour importations.
Question - That the amendment (Dr. Earle Page’s) be agreed to - put. The committee divided. (Chairman - Mr. McGrath.)
Majority , . . . 10
Question so resolved in the negative.
Question - That the . paragraph be agreed to - put. The committee divided. (Chairman - Mr. McGrath.)
Majority . . . . 12
Question so resolved in the affirmative.
Paragraph agreed to.
Item 177 (Traction engines.)
Mr.FORDE (Capricornia - Minister for Trade and Customs) [10.50].- The rates on locomotives and road rollers have been increased by 15 per cent, in the British preferential and intermediate tariff, and. by 20 per cent, in the general tariff. There are several engineering shops in Australia quite capable of producing all the locomotives and road rollers required. It will be noted that the importations of locomotives are of considerable value. The increased rates are proposed in an endeavour to secure to Australian engineers work which should undoubtedly be undertaken in this country. The duties imposed on these goods arc part of the Government’s plan to rehabilitate the engineering industry. Provision exists under the tariff for the ad mission of machines, machinery, &c, under by-law where it is proved that certain types cannot be manufactured in A ustralia. During 1928-29, locomotives to the value of £74,721 were admitted under by-law, and in 1929-30 importations so admitted were valued at £79,847. The administration of the by-law items enables the railways to import at nominal rates of duty any locomotive of a special design, or of a type not manufactured in Australia.
Question - That the item be agreed to -put. The committee divided. (Chairman - Mr. McGrath.)
Question so resolved in the affirmative.
Item agreed to.
By omitting the whole item and inserting in its stead the following item: - “178. Motive Power Machinery and Appliances (except Electric), viz. : -
N.e.i. ad val., British, 55 per cent.; intermediate, 65 per cent. ; general, 75 percent.
.- This item deals with various forms of motive power machinery concerned with generating other than electrical power. Practically every argument that was advanced against the increase in the rates of duty in connexion with item 176 f 1 applies with equal force against the increase in these duties. I shall quote what the Minister for Agriculture in the Labour Government of New South Wales stated regarding the action of machinery, firms generally when they were put in the position of monopolies by this Government. I quote from the Daily Guardian, Sydney, of 26th January, 1931-
To-day’s Australian Labour Party country conference was remarkable for an outburst by the Minister for Agriculture (Mr. Dunn), directed against Australian machinery firms. They had held a gun at his ear to get financial guarantees, and were he said, “ worse than Ned Kelly.” Mr. Dunn was particularly caustic in his criticism of Australian machinery firms. After the Federal Government had wiped out their competitors with prohibitive tariffs they held a gun at his ear to extort financial guarantees, he said. They demanded that the Government guarantee one-third of the cost, otherwise they would not deliver machinery to farmers. “Their actions have been reported to the Federal Government,” he said, “but in order to help the farmers we made the necessary guarantees so that the crops could be harvested.”
That, coming from a sympathetic source, shows what is liable to happen when a federal government, whether it be Labour or otherwise, grants a monopoly to any section of manufacturers. I have here a copy of a letter written by the New South Wales agent, of a Victorian firm engaged in the manufacture of chaffcutters and other machinery. It is dated the 23rd of this month. ‘ It was sent to a farmer who had made inquiries as to the cost of improving his chaff-cutting plant, and who wanted, among other things, a boiler to steam his chaff. The letter states -
Prices of new boilers to-day are particularly high, and in this connexion, you may decide to advertise in the Sydney Morning
Herald for a good secondhand boiler.
That is clear evidence that the manufacturers of, at any rate, one item of power machinery, have taken advantage of the additional protection handed out to them so indiscriminately by the present Government. I move -
That the sub-item be amended by adding the following: - “And on and after 1st October, 1031, (n) n.e.i., ad valorem, British, 35 per cent.; intermediate, 55 per cent. ; general,” 00 per cent.” ^_
.- I congratulate the Government very heartily upon the absence from the item as it stands to-night of the sub-item “ carburettors, British, £3 ; intermediate, £3; general, £3.” Although this schedule was introduced as the last word in tariff protection, I am glad to see that the Government has had enough sense to omit that sub-item.
.- The sub-item referred to by the Deputy Leader of the Opposition (Mr. Latham) was included in the tariff schedule, and has now been omitted. It was never approved by Parliament, and I wish to learn from the Minister whether any duty was ever collected under it, and if so, whether it has been refunded?
– This item covers, among other things, diesel engines, which are now being manufactured by Walkers Limited, of’ Maryborough. This engineering firm has been established for the last 60 years, and has manufactured, with credit to itself and to Australia, a great’ many of the railway locomotives used by the various Australian governments. During recent years the firm has given consideration to the manufacture of other heavy machinery as there is but little demand to-day for railway locomotive construction. The general manager of Walkers Limited, Mr. BE. S. Goldsmith, toured the world in 1928 to acquire information, and, as a result, decided to make arrangements for the construction of diesel engines at the works in Maryborough. He visited various overseas works at which such engines were being made, and concluded an agreement with Messrs. Mirrless, Bickerton and Day Limited, of England, for their manufacture in Aus tralia. Upon his return to this “country, a request was made to the last Minister for Trade and Customs (Mr. Gullett) whether he would afford the new industry adequate tariff protection if the company proceeded to establish works here, and was given an emphatic answer in the affirmative. Since then honorable members have received literature supplied to them by the Australian Association of British Importers urging that this tariff protection should be withdrawn. The honorable member for Warringah (Mr. Parkhill) has even used in this committee some of the arguments supplied to him by the association. Honorable members have been furnished by a section of the Sydney Chamber of Commerce with similar literature, which misrepresents the position in regard to the manufacture of diesel engines. Since receiving the promise of tariff protection from the honorable member for Henty (Mr. Gullett), Walkers Limited sent to Britain two of its engineers to study the manufacture of these machines. These gentlemen have now returned, and the necessary plant has been installed for proceeding with the work. Both the former Minister for Trade and Customs (Mr. Fenton), and the present Minister (Mr. Forde) have honoured the promise given by the honorable member for Henty. In the literature supplied by the Australian Association of British Importers, it is stated that the imposition of the duty provided in this tariff schedule on the importation of diesel engines would be a hardship on the primary producers. The honorable member for Forrest (Mr. Prowse) agrees with that. Let me inform him for his edification, and in order to contradict the statements which have been made, that “Walkers Limited has no intention under its agreement to manufacture engines of less than 100 horsepower.
– Up to what size can the firm, manufacture?
– Up to 1,000 horse-power. In the literature which has been distributed here, it is stated that no diesel engine of 1,000 horsepower has ever been manufactured in any part of the world. It is stated that no diesel engineering firm turns out fixed engines of 1,000 h.h.p. It goes on to say that the local manufacturers, Walkers Limited, have undertaken to do what the more experienced engineering firms of the world do not attempt to do. That statement hasbeen placed before honorable members in the hope that they will oppose this item. I have here an engineering journal dated 30th April, 1931, advertising a Crossley heavy oil horizontal diesel engine of 1. 000 horse-power; yet the Association of British Importers state that such a thing has never been made.
– Does the advertisement say they are diesel engines?
It is stated that this firm cannot manufacture diesel engines of over 200 horsepower, but it is clear that they are able to do so. The first diesel engine manufactured by the firm was of 200 horse-power. Yesterday I received a telegram to the effect that orders for diesel engines have just been received from Sydney, Melbourne, and from Central Queensland, and that the firm is hopeful of the immediate future. I have a copy of the tender by Walkers Limited for the supply of a diesel engine of 720 brake horse-power which shows that the information supplied to those opposed to the encouragement of Australian industry is incorrect. This is an Australian matter. I am not opposed to assisting British industries, and intend to support them whenever necessary; but this is an instance in which we can assist an Australian industry and provide employment for our own artisans, who are equal to those in any part of the world. The Australian firm producing diesel engines, Walkers Limited, has been in operation for 60 years, and is co-operating under licence with Mirrless, Bickerton and Day Limited, a British firm which has been manufacturing diesel engines for the last 30 years.
Mr.archdaleparkhill. - Importing most of the necessary parts.
– That statement is inaccurate. Honorable members have received damaging information regarding the actions of Walkers Limited to prove that they are making only a small part of the engines in Australia. A paragraph in a circular issued by the company reads -
In view- of the extreme importance attached to the proper selection of material and to the heat treatment of same, we propose to adopt a safe course in this particular case by incorporating in the construction of the engine, cylinder liners, pistons, cylinder covers, crankshaft, and possibly one or two minor details to be brought from the works of our licensees.
Honorable members should realize that the importers quoted only the portion of the circular which suited their case; but deliberately refrained from quoting subsequent paragraphs which clearly explain what actually occurred. The next paragraph not quoted reads -
We are producing these items in our own works at present;but we desire to avoid. the possibility of the article not giving satisfaction and to leave no reason to doubt that the engine will give the maximum of satisfaction that would be obtained from an imported engine.
– They imported the parts from Great Britain.
– The honorable member for Warringah knows that certain parts that were imported were to be used in the . construction of the engine referred to in the circular quoted, but that subsequently all the necessary parts have been manufactured in Australia. The Sydney Chamber of Commerce, and the importers who supplied some honorable members with the information they have given to the committee, did not quote all the facts. It was not fair enough to say that the parts are now manufactured in Australia. Another paragraph reads -
Any industry should be in a position to. obtain its motive power machinery at the lowest possible price, and should be able, without incurring penalties, to purchase the most efficient machinery the world can produce.
The Mirrless diesel engine manufactured in Australia is equal to the best that is manufactured in the world, and it was for that reason that Walkers Limited selected that design. The Mirrless Company has had the longest and best experience in diesel engine building in Great Britain. If it is in our interests to protect the manufacturers of Australian locomotives, why should we not protect the manufacturers of other types of machinery? Such machinery cannot be profitably manufactured unless fairly heavy customs duties are imposed. The Australian workmen must- be protected. We have also to remember “.hat, in Australia, the raw material costs more than it does in other smaller and more compact countries. The -Australian Association of British Importers, further speaking of another type, says -
They expend immense sums on research work, the benefit of which goes to the users of their product.
It is the same with the engines manufactured by Walkers Limited. Built into the engines is not only their own 60 years’ experience, but also the 30 years’ experience of the British company. The laboratories and experimental works of the British firm are available to Walkers Limited in connexion with their diesel construction. The association also says -
As 00 per cent, of the importations are for the use nf primary producers one has not far to look for at Cat one of the reasons why the primary producer in Australia is to much worse off than the primary producer i.’i other paris of the Empire.
That is absolute nonsense. The primary producer is not likely to require an engine of from 100 up to 1,000 horse-power, but there is another company in Australia manufacturing smaller engines of this type. In another part of its communication the association goes on to say -
The parts which they admit they would import comprise all those which are most difficult to manufacture leaving only the castiron work to bo produced locally. It would be very interesting to know how much extra employment is actually created in the Australian works by this duty. Obviously, it cannot be substantial in view of the comparatively small proportion of the work that will be done locally on any order that the Australian company can secure.
At present, 85 per cent, of the engine turned out by Walkers Limited has been made by that firm. Of the later engines, 95 per cent, will be completely manufactured by Walkers Limited, and by the time the present contracts are completed lOO per cent, of the engine will be manufactured by it. The firm would not rush in to carry out the whole of the technical work on the first engine, and possibly bring about a failure. lt thought that its best policy was to look before it leaped. It is to be hoped that’ most people, whether they are opposed to a protective policy or hot, will agree that there are some essentials which can be manufactured with advantage in Australia, and surely there is nothing more essential for Australian development than the manufacture of crude oil engines which it is possible to turn out in Australia up to 1,000 horsepower. For marine purposes, these engines are built up to 10,000 horse-power, and there is no reason why Australian artisans who have been associated with engine construction for 50 or 60 years should not be protected to enable them to undertake the construction of diesel engines now that steam is going out of favour as a motive power. I hope that the propaganda which has been distributed among honorable members will not bring about a vote hostile to these duties.
– I would not have risen hut for the extraordinary speech of the honorable member for Wide Bay (Mr. Corser). It was a series of incoherent and unconnected statements. Although Walkers Limited has not been mentioned to-night; although no word has been said against the firm, he has referred to what he called a statement, and has proceeded to tilt at what it contains. The honorable member constitutes himself the advocate for Walkers Limited. He cares more for that firm than for any other interests in Australia; but it would have had a higher reputation in the committee and in the country generally if the honorable member had not spoken in its defence. We are told that it has now started to manufacture diesel engines. On the strength of an order for three engines, the honorable member has claimed that no one should say a word against the duty. But he has told .us that when this great establishment was asked to manufacture an engine of 100 b.h.p. it said, “ We can manufacture everything except the external parts and the internal parts; in effect, we can merely put a case around it.” At any rate the honorable member produced a statement to that effect. He has therefore actually done damage to his clients’ canst’. No one would have known of the firm’s disability if the honorable member had not mentioned it. I pointed out in an earlier speech that British firms had spent £30,000 in perfecting, these engines, but all that the honorable member can say is that his firm has an order for “ three whole engines “. If the firm for which the honorable member makes so many appeals to the committee is such a wonderful concern, why does it need 100 per cent, protection?
– It does not get it.
– It gets 70 per cent, under this tariff, 10 per cent, primage and 30 per cent, exchange. The honorable member talks unconvincingly about the merits of a firm which has been in .existence for 60 years, and yet still needs prohibitive protection ! The object of tariffs is to protect embryonic industries, so that on reaching maturity they may be able to do without duties, and withstand the competition of the world. After an industry has been in operation in his electorate for 60 years, the honorable member now wishes to give it a protection amounting to over 100 per cent., to enable it to carry on. That firm might well say - “ Save me from my friends!” The honorable member belongs to the Country party, I understand ; but,- judging by his utter disregard ‘ of the interests of the primary producers, including those in his own electorate, I should say that his proper place is among the disciples of extreme protection. The firm in question will wish that he had not spoken on this matter, because lie has done neither it nor the Country party any good.
– The Minister has a discretionary power with regard to admitting into Australia engines designed for the purpose of assisting production. One of the most successful power undertakings in Australia is the Nymboida hydro-electric scheme, and a 1,000 horse-power diesel engine is required in connexion with its work and extension. Tenders have been called in Australia and overseas, and it is found that the tenders from the Australian companies are 2D per cent, higher than the cost at which a suitable engine from overseas could be landed in Australia, after paying all costs, including exchange; customs and primage duty. Surely it cannot be contended that these engines could be commercially made in Australia, when there is such an enormous disparity between the local and overseas prices. If the Government insists* on the payment of the high duty imposed* on engines of this type, the primary producers will have to pay a higher rate than would otherwise be necessary for the electric current required by them for their ordinary undertakings as the Nymboida undertaking supplies hundreds of farms, and will not, in any case, spend the additional 20 per cent, to get an untried Australian machine. Before tenders were called for, I urged the Minister that he should use his discretionary power in this matter. The undertaking to which I have referred is carrying on a work which will give employment to 360 men in the next two years at a time when unemployment is rife. If it is forced to pay an excessive price for this engine, it will not be able to provide the employment that would otherwise be given in the extension of its work. I am satisfied that, if the Minister looks carefully into this matter, he must give it favorable consideration.
.- I was rather surprised and amused at the speech of the honorable member for Wide Bay (Mr. Corser). I had supposed thai members of the Country party were low tariffists, but, judging by the honorable member’s speech, and hie support of bounties on cotton and certain other primary products, they may be more correctly described as primary and geographical protectionists. The honorable member said thai members of the Nationalist party had beer guided in their attitude by certain literature, but 1 say emphatically thai I have not read any of the literature to which he referred. I am sure- that, the honorable member for Henty (Mr. Gullett), when Minister for Trade and Customs, made no promise of a 55 per cent. duty. Such an impost would give an actual protection of 112 per cent., or more. The engines under consideration” are used for pumping plants for irrigation work, and in butter factories, and the heavy duty imposed on them will penalize the man on the land just as much as the duties on engines of a smaller type. The honorable member for “Wide Bay spoke as though diesel engines were used only for particular purposes; but I point out that they will shortly be employed even as the power units of aeroplanes. I give the firm at Maryborough full credit for enterprise, and it well deserves to be classed as a first-rate engineering concern. It has survived adversity, and has turned out efficient, work. The honorable member remarked that this firm is making engines in all sizes from 100 to 1,000 horse-power. On referring to the Tariff Board’s decisions, Nos. 221 to 227, I find that on the 6th February, 1931, an engine of 400 horse-power was admitted free. On the same day another engine of 300 horse-power was admitted duty free.
– The firm had not then made one; this is only a new enterprise.
– The honorable member is shifting his ground. This duty was in operation before that date.
– It took them two years to get ready.
– The houorable member has claimed that this firm can make engines of all sizes.
– So it can.
– Yet engines have been admitted duty free.
– Before they were made in Australia.
– They would be admitted again to-morrow if the request were made to the Minister. The honorable member does not realize, what is well known to any man who has had experience of a machine shop, that the making of engines ranging from 100 to 1,000 horse-power would mean the employment of more capital than any engineering firm in Australia possesses.
– The honorable member knows nothing about the matter.
– Walkers Limited know more than the honorable member will ever learn.
– The honorable member should know that drawings, patterns, tools and jigs are necessary.
– They have the drawings, patterns and tools.
– In Great Britain, where the highest standard in engine construction has been reached, and where various types are made, the different firms specialize in one type. Having had an experience of something like half a century, those firms would not attempt to tackle the range that the honorable member blithely says this firm is prepared to undertake. I support the amendment.
Question - That the amendment (Mr. Hawker’s) be agreed to - put. The committee’ divided. (Chairman - Mr. McGrath.)
Question so resolved in the negative.
Item agreed to.
Item 179 (Electric fittings, &c).
– This item deals with switches, fuses, and lightning arresters, the duty on which is 65 per cent. British, 70 per cent. intermediate, and 75 per cent, general. I have no objection to a duty being imposed on certain types of switches which are very simply made, and can be turned out in large quantities, and the price of which has been reduced; but there are other types of a highly technical and very expensive character, which are not being made to any extent in Australia, and which it is absolutely* necessary should be thoroughly guaranteed because on their integrity depends the safety of thousands of pounds worth of machinery. I desire an undertaking from the Minister that duty will not be imposed on that particular type of switch.
.- The duty on switch gear was increased in 1926 by 5 per cent, under the British preferential tariff, and 10 per cent, under the general tariff. The hulk of the importations have been from the United Kingdom. As a matter of interest,’ it may be stated that apart from the home market Australia in the past has been Great Britain’s best customer for electrical goods. There are ten manufacturers in Australia to-day making this switch gear. They are in a position to supply practically all types of industrial switch gear, and a substantial percentage of switch gear for power stations and substations, particularly that with voltages under 33,000.
– What about the higher voltage?
– Anything that is not made in Australia is allowed to come in duty free under by-law. There have been no cases of hardship.
– Is the course indi- cated by the Minister being pursued ?
.- The effect of the item is to increase the British preferential duties on electrical fittings from 35 to 65 per cent. No reason for the increase has been given. We are told that these switches are being made in Australia. They were being made here when the duty was only 35 per cent.; why has it been increased to65 per cent?
– Prices have been reduced by from 5 to 15 per cent, since the duty was increased.
Question - That sub-itemsB andC be agreed to - put. The committee divided. (Chairman - Mr. McGrath.)
Majority . . 16
Question so resolved in the affirmative.
House adjourned at 11.57 p.m.
Cite as: Australia, House of Representatives, Debates, 30 September 1931, viewed 6 July 2017, <http://historichansard.net/hofreps/1931/19310930_reps_12_132/>.