12th Parliament · 1st Session
Mr. Speaker (Hon. Norman Makin) took the chair at 2.30 p.m., and offered prayers.
Deduction in Income Tax Assessment.
– by leave - On several occasions during the past few months, members of both Houses of this Parliament have complained of unfair discrimination between the citizens of different States by reason of the fact that, in two States, a deduction in income tax assessments on account of unemployment relief tax is being refused, because the tax is not described as State income tax, whilst in other States the corresponding tax has been levied as an additional State income tax, and is, therefore, an allowable deduc tion. In consequence of those representations, the Commissioner of Taxation gave, further consideration to the possible removal of this discrimination, and sought the advice of the Attorney-General’s Department. That advice has been received, and discloses a curious position.
The legal opinion on the subject is that State unemployment relief tax, which is levied as such by reference to income, is an income tax, and that, in accordance with the provisions of paragraphb of sub-section1 of section 23 of the Income Tax Assessment Act, it falls within the deductionallowable for State income tax if it is annually assessed. Unemployment relief tax which is not annually assessed, but which is deducted from salaries and wages at the source, is not a permissible deduction. It appears that all the State acts which impose unemployment relief tax, provide that in the case of salary and wage earners, it shall be deducted at the source, and where this is the only manner in which the tax is calculated and collected, the tax is not an allowable deduction in the federal assessments of the persons concerned. Thus one discrimination is removed by the opinion, namely, that previously existing between the several States as States, whilst another discrimination has been discovered as between the citizens ofa State. It is intended to remove this newly discovered discrimination as early as possible.
It may be added that the foregoing observations regarding unemployment relief tax apply equally to the Western Australian hospital fund tax, because that tax also is a tax on income. The Commissioner of Taxation has decided, in the light of the Crown Law Department’s advice, to allow deductions of State unemployment relief tax and the Western Australian hospital fund tax in those cases in which it is legally deductible; that is, where it is annually assessed. The Commissioner intends to apply his decision retrospectively to past assessments in which the deduction has not been allowed, provided, as required by section 37 of the Income Tax Assessment Act, the tax on these assessments was originally due and payable not more than three years prior to the 1st October, 1931.Unemployment relief tax which is deductedat the source, and, therefore, is not annually assessed, cannot be allowed as a deduction underthe present law. The Government will consider an amendment of thelaw to remove this anomaly.
– I ask the Treasurer whether, in connexion with the recent debt conversion loan, the Government Savings Bank of New South Wales consented to convert its holding of Commonwealth stock? If so, what was the amount converted?
– It is not usual to publish particulars regarding individual holdings of stock, whether converted or unconverted, except with the express approval of the stock-owner. Such a disclosure would be embarrassing to individuals, and, although it might not affect institutions. I am not prepared at this stage to make any statement on the subject.
– I ask the Treasurer whether a substantial payment of interest in respect of Australian loans floated in New York fell due on the 1st October? Did the Commonwealth have to pay £167 in Australia to cover each £100 of the obligation in New York? Does not this heavy exchange charge place a prodigious burden on the Australian taxpayer?
– An amount of about £200,000 became due in New York on the 1st October. As there is no exchange market in that city for Australian currency, payment had to be remitted through London, and the Commonwealth was mulct in heavy exchange discounts on both Australian sterling and English sterling. This heavy burden on the taxpayer will, we hope, be lightened as the exchange position improves.
– In view of the fact that enormous quantities of rock salt and coarse salt are used by primary pro ducers, who are hard hit by the depression, will the Government consider the advisability of amending immediately the Sales Tax Act to give a general exemption to those commodities?
– The Government will consider the suggestion.
Possibility of War
– Having regard to the ominous developments in the Far East, will the Prime Minister give an undertaking that in no circumstances will Australian lives be sacrificed in the event of a war for Chinese markets?
– We are all watching with a great deal of interest and anxiety the developments in the Ear East. I do not think they will culminate in war; at any rate, we hope not. We shall be wise if we do not anticipate trouble, and refrain from making statements that might aggravate the present strained relations between China and Japan.
– I rise to a personal explanation. Last evening when speaking on the motion for the second reading of the Public Accounts Committee Bill, I stated that members were paid a sitting fee of 30s. a day, and travelling expenses at the rate of £1 a day while absent from Canberra. The honorable member for Reid (Mr. Coleman) is reported to have interjected that members of the Public Accounts Committee received no allowance for meetings held at Canberra, but that for other meetings they were paid at the rate of 25s. a day, less 20 per cent. I have since learned that members of the committee receive 25s. a day when sitting in Canberra, and £2 5s. a day when sitting elsewhere. I make this explanation in justification of my statement last night.
– Can the Prime Minister state on what date the House is expected to complete the business programme now before it? Members from distant constituencies are anxious to make arrangements to return to their homes during the period over which the House will be adjourned, while the Senate is dealing with the tariff.
– Probably the programme which the Government has in mind will be completed next week.
– The right honorable gentleman stated a few days ago that the business was to be completed at the end of this week.
– I do not think that is practicable.
The Bellona Bust
– As a tribute to a great Australian, and because it is an excellent example of the work of Australia’s greatest sculptor, will the Minister for Home Affairs have the bronze bust which was presented to the Commonwealth by the late Sir Bertram Mackennal, and is now on the Commonwealth-avenue, removed from its present unsuitable position to a more appropriate one? Also, will he see that it is properly titled, so that the public may appreciate this work, and understand the sculptor’s symbolism, which expresses his revulsion from war?
– The matter will receive consideration.
Assistance to Growers
– Will the Minister for Markets indicate whether there is any possibility of the Government granting financial assistance to the wheat-growers for their 1930 crop, and whether any of the amount that, is to be allocated as a bounty on the 1931 crop can be used for this purpose?
– The assistance of growers in connexion with their last season’s crop is a matter which is still being investigated. The Commonwealth Government was able to secure assistance from the Commonwealth Bank to finance a bounty on wheat only on the condition that it would apply to next season’s crop.
Evasion of Taxation
– Will the Treasurer advise what steps the Government is taking to collect income tax from oil companies, which, according to a recent report on petrol prices, are inflating their invoice costs, and thus evading the payment of a certain amount of income tax? I am informed that in one instance the evasion amounted to £2,000,000 sterling last year?
– The Commissioner of Taxes does not necessarily accept the figures that are submitted by overseas companies trading in Australia as the actual cost of the commodity in which they are dealing. I am not sure what action has been taken with regard to oil companies, but I understand that there has been some investigation. I shall endeavour to supply fuller information to the honorable member.
Lyons Brothers’ Plant, Wallsend
– In view of the statement made by Senator Daly when he visited Wallsend to inspect the oil extraction plant of Messrs. Lyons Brothers, that the pioneering spirit displayed by that firm deserved every encouragement, and that he would do everything that he could to help those activities,”will the Prime Minister indicate whether Senator Daly made any report to the Government on the subject; if so, what is its nature? Further, does the Government contemplate assisting this young industry? If Senator Daly has not made any such report, will the Prime Minister request him to do so as expeditiously as possible ?
– I have discussed with Senator Daly his visit to Wallsend. The honorable senator expressed to me opinions somewhat on the lines of those indicated by the honorable member for Hunter (Mr. James). He appeared to have been much impressed with the endeavours of Messrs. Lyons Brothers, and suggested that an investigation of the matter should be made by departmental experts. The proposal has been left in the hands of Senator Daly, who will, I am confident, deal with it most sympathetically.
– Is it a fact that Mr. M. Wallace, of Brisbane, has been appointed Chief Dairy Inspector in Great Britain ? If so, is the position a new one; what are Mr. Wallace’s qualifications for it, and what will be his duties ?
– The position is not a new one; Mr. Wallace is taking the place of Mr. Wigan, who has returned to Australia. His duties are those attaching ordinarily to the office; he, will report on the quality of Australian dairy produce which arrives in Great Britain. His reports will be made to the Department of Markets and through that department’ to the Australian dairying industry.
– Will the Prime Minister inform- the House what has been the result of the investigation of experts of the Council for Scientific and Industrial Research into the ravages of thrips. As the pest has already caused damage to the amount of £1,000,000 in Victorian orchards, will the Government arrange for the co-operation of experts from the Council for Scientific and Industrial Research with Victorian officers and experts from the other States in an endeavour to minimize the ravages of the pest?
– I shall go into the matter with the Council for Scientific and Industrial Research and advise the honorable member as to the position.
– Is it a fact, as reported in the press, that Messrs. J. F. Coates and F. Strahan have been appointed to the Board of Amalgamated Wireless (Australasia) Limited in the place of Sir George Mason Allard and Sir William Vicars, who have resigned?
– Has the Government taken any further steps to provide a transmitting radio station for Western Australia ?
– Following on an inquiry made by the honorable member last night, I have ascertained that advice has been received from Melbourne by telephone that quotations are being invited from Australian manufacturers for two self-supporting steel towers each 180 feet high, complete with the necessary winches, the closing date of the tenders being the 17th November.
– Was a payment recently made by the Government to the West Australian Airways as compensation; if so, what was the amount, and what was it for?
– I am not aware of the circumstances to which the honorable member alludes. I will obtain full information on the subject, and supply it to him.
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow : -
Contract with Gardiner Construction Company.
asked the Prime Minister, upon notice -
– The Government is not in possession of any information regarding this matter. Inquiries will he made with a view to obtaining the particulars desired by the honorable member.
asked the Repatriation Department, upon notice -
– The War Service Homes Commissioner did sue, and judgment was given in favour of the Commissioner. An appeal has been lodged against the judgment, and as the matter is at present sub judice it is not considered advisable to discuss it.
asked the Minister for Trade and Customs, upon notice -
Will he state what are the existing duties on tobacco entering the United Kingdom?
– The latest United Kingdom tariff in the possession of the Department of Trade and Customs shows that tobacco entering the. United Kingdom is subject to the following customs duties : -
asked the AttorneyGeneral, upon notice -
For the information of the honorable members and the many people Who are vitally interested in the matter, will he inform the House when he anticipates being able to introduce amending bankruptcy legislation ?
– The amending bill is now in course of preparation and will be introduced as soon as practicable. .
Inquiry Into Loss of “Love Bird”.
– The honorable member for Balaclava (Mr. White) has asked a number of questions regarding the loss of the aeroplane Love Bird. I will look into this matter and furnish replies to the honorable member as early as possible.
– On the 1st October, the honorable member for Perth (Mr. Nairn) asked me whether I would make available to honorable members, and also to women’s unions, a copy of the report by the Secretary-Geueral of the League of Nations, dated 27th July, 1931, on the subject of the nationality of women.. I have made inquiries and have ascertained that very few copies of this report were received by my department from the League of Nations. A copy is, however, being placed on the table of the library for the information of honorable members, but, owing to the extra expenditure for printing which would be entailed, it is regretted that it will not be possible to make copies generally available.
The following papers were presented : -
Defence Act - Regulations amended - Statutory Rules 1931, No. 120.
Papua Act - Ordinances of 1931 -
No. 3 - Supplementary Appropriation 1930-31; together with Supplementary Estimates of Expenditure for 1930-31.
No. 8 - Appropriation 1931-32; together with Estimates of Revenue and Expenditure for year ending 30th June, 1932.
Railways Act - Report on Commonwealth Railways Operations, for year ended 30th June, 1931.
Notice of motion (by Mr. Watkins) with reference to bimetallism - by leave - withdrawn.
– I move -
That the bill be now read a second time.
I propose to deal briefly with this measure, which embodies minor amendments to the Financial Emergency Act. There are only four clauses involved, two of which are purely machinery in nature. Section 10 of the principal act dealt with the general reduction of wages and salaries. The amending bill is designed to prevent any misinterpretation. It makes the provisions of the principal act clearer, and is in accordance with the intention of the framers of that legislation.
The existing provision adequately covers officers whose salaries do not vary after the date of the operation of the section, but as regards officers whose salaries are increased or decreased after that date, there is a lack of specific provision for corresponding variation of the amount of reduction. As an example, I instance the case of an officer receiving £300 per annum when the section came into operation, who was reduced to £240 per annum, a drop of £60. If he subsequently becomes due for an increase of £18, his salary, for the purposes of the act, might be regarded as still below £300, instead of being £318, which is the new minimum upon which the percentage reduction shall be effective. The proper reduction in the latter salary would be £64 per annum, which is the amount which officers receiving that salary - £318 - at the commencement of the section were reduced. Similarly, if an officer’s salary is decreased, for example, as a punishment, the reduction to be made from the decreased salary may, under the existing provision, be on the higher salary which he formerly received, and not on his new rate.
The proposed amendment of the section will ensure that variations are made in the amounts of reduction in keeping with any rise or fall in the salaries normally due to officers. The amount’ of reduction will remain constant only where there is no variation of the normal rate of pay. In the event of any variation in salary having occurred since the commencement of the act, provision is proposed to ensure that the amendment will cover those variations.
Section19 of the principal act deals with State taxation in respect of salaries and allowances paid by the Commonwealth. This clause amends section 19 in order that the protection sought to be provided by that section may be effectively secured. Section 19 of the principal act is, in effect, a limitation of the Commonwealth Salaries Act 1907, which authorizes a State to tax the allowances, or salary and allowances of any member of the Commonwealth Parliament representing that State or a constituency therein, and the salary of any officer or employee of the Commonwealth carrying out his duties in that State, subject to the rate and extent of that taxation not being in excess of that applicable to any other citizen of the State having a similar amount and class of income. Section 19 of the principal act provides that the remuneration referred to shall not be subject to taxation in a State to any extent above the tax payable under the State taxation law in force at 30th June, 1930, except to the extent prescribed. Power was granted under the section to the GovernorGeneral to prescribe, from time to time, the rates or percentages for the additional tax mentioned, but this power of prescription was limited to the prescription of a uniform rate or percentage for the Commonwealth as a whole, and forbade the prescription of different rates or percentages for different States.
Subsequent to the passing of the Financial Emergency Act, State rates -of income tax were increased in some instances. It was considered desirable that any limitation of further taxation by the States on the Commonwealth remunerations under notice should be fixed by reference to the new State rates, rather than to those in force on 30th June, 1930, as the latter rates had, in effect, become obsolete. It was thought to be more desirable to employ somewhat different terminology to express the powers of prescription. The clause, therefore, authorizes the pre- scribing of the maximum amount, rate, percentage, or extent to which the remuneration of the member of Parliament, official, or employee, may be subject under an income tax law of a State.
It is believed that it would be equitable to select, as the maximum rate of ordinary income tax to be levied by any State on the Commonwealth remuneration of federal servants, the present’ income tax rates in force in South Australia. This does not mean that the Commonwealth remuneration .in any other State than South Australia would thereupon become subject to income tax at the South Australian rate. It would’ merely authorize that other State to collect, tax at its own rates of income tax on the Commonwealth remuneration, up to, but not exceeding, those rates at present in force in South Australia. In other words, the South Australian rates become the maximum. The proposed schedule is as follows : -
Section 29 of the principal act deals with maternity allowances paid in connexion with the Maternity Allowance Act 1912-1927. The Maternity Allowance Act as amended by the Financial Emergency Act 1931, provides that a maternity allowance shall not be paid in any case where the total income of the claimant and her husband, or of the claimant where there is no husband, for the twelve months preceding the date of the birth exceeded £260. It has been found that this provision is causing hardship in cases where the income had ceased or materially diminished at the date of the birth. Realizing the position, it is proposed to provide relief in these cases by giving to the Commissioner the power to make payment of a maternity allowance where he is satisfied that at the time of the birth the claimant and her husband were not in receipt of income exceeding £260 per annum.
Clause 5 corrects a drafting error.
.- I do not think that honorable members on this side of the House will ask that there should be any delay in proceeding with the bill. ‘ It seems a pity that this Parliament should find it necessary to pass legislation to safeguard any one against what I may call the taxation depredations of any State. It ought to be necessary only to provide that members of the Federal Parliament and officers of the Federal Public Service shall be subject to the same taxation as applies to others in the State of which they are citizens. We realize, of course, that because of the proposals put forward in one State recently, it was necessary to protect members of Parliament and officers of the Public Service against exorbitant taxation, but I hope that such a position will not arise in the future. Lest there should be misunderstanding in the minds of the people, we should make clear that it is not proposed in this bill to grant any concession to members of the Federal
Parliament or officers of the Public Service, but only to ensure that they shall not be discriminated against. I support the bill. Regarding the other points dealt with by the Minister, there can be no argument. The bill is designed merely to clear up certain outstanding matters, and the sooner it is passed the better.
– I listened attentively to the speech of the Minister, but I confess that I was not able to follow the whole of his explanation. For instance, he referred to the various rates of taxation which would be allowable on various incomes. Starting at £250 a year, the rate would be 3d. in the £1, and so on. I suppose a further explanation of this part of the bill will be given during the committee stage.
– These details will be provided for in the regulations, and not in the bill. The bill merely gives power to make regulations, and the Minister has indicated what the nature of the regulations will be.
– I am pleased that the Government has seen fit to amend the bill with respect to the payment of the maternity allowance. On the 17th September, on the adjournment of the House, I and other honorable members of this group brought this matter under the notice of the Government, because, in a number of instances, Ave had. found it necessary to make representation to the Commissioner that hardship had been imposed on. certain persons by the refusal of the department to pay the allowance because the husbands of the applicants had been in receipt of an income of £200 during the previous year. Many of those husbands were at the time on the dole, notwithstanding that in the previous year they may have received £260 in wages. Yet at the time extra comforts had to be provided in the home. Every honorable member can easily appreciate the unfortunate circumstances of these persons. I take it that it is now to be provided that if the husbands of applicants are unemployed to-day, the fact that they received £260 last year, will not be taken into consideration. If that bc the case, the position will be relieved in some measure, and therefore I propose to support this clause -in the bill. 4
.- I have no desire to delay the passage of the measure; but considerable controversy has arisen on account of serious objection having been taken by the Premier of South Australia to the action of the Federal Government in introducing a bill of this character. Others have commented upon the remarks of the Premier of South Australia, and the statements published in the columns of the press have suggested that members of the Federal Parliament, and of the Commonwealth Public Service, are trying to escape from taxation to which they should be subjected. I understand, from the remarks of the Minister who introduced the bill, and from the interjection of the Prime Minister, that the measure has been brought down merely with a view to clearing up the position. There is an opinion abroad to-day that men who occupy seats in Parliament are allowed to escape taxation. So far as my experience goes, members of the Federal Parliament receive Federal and State income tax assessment notices, and if they own laud, they are served with land tax assessment notices. They also receive assessment’ notices for the payment of unemployment tax. Therefore, all ordinary taxes are paid by members of this Parliament. It has been suggested in the public press that an effort is being made by the Government and the Federal Parliament to relieve members of this House from payment of the unemployment tax. I am sure that no member in this chamber wishes to evade that. As this bill makes the position clear, I have no objection to it,
.- I understand that the purpose of this measure is to improve on the wording of the bill brought down a 3hort time ago with the object of preventing a Commonwealth public servant in one State from being so heavily taxed that his net remuneration compared unfavorably with that of a public servant in another State where the State taxation happened to be a good deal lighter. Is the purpose of the bill to set a limit to possible variations in the net remuneration left to Commonwealth public servants in different States?
– I understand that the bill is designed to make clear the object of the provisions in the act dealing with public servants and pensioners which relieved them of liability to pay tax in excess of that levied at the 30th June, 1930. Does the bill give the State authorities power to tax to a greater extent than previously, or can a flat rate of taxation be imposed along the lines suggested by the honorable member for Gippsland (Mr. Paterson), so that the federal public servants in the various States may be subjected to a uniform tax?
– The provisions embodied in the Financial Emergency Act wore intended to protect the Common wealth Public Service from what might be described as punitive taxation that might be imposed by any State. The circumstances in which these provisions were inserted are well known. At that time it was proposed by New South Wales to impose a very high rate of tax, amounting to 5s. in the £1, for the purposeof providing for the unemployed. It will be remembered that at the Premiers Conference we discussed proposals for certain economies, and it was unanimously agreed, amongst other things, to make a reduction of 20 per cent. ofall adjustable expenditure. For that purpose each government brought down certain proposals. The unemployment tax in New South Wales of1s. in the £1 was taken into the calculations by the State Government when arriving at the reduction of wages necessary to make the 20 per cent. reduction in adjustable expenditure. It was then considered by the Commonwealth Government that, if the1s. in the £1 was to be calculated when making a. reduction of the salaries of the New South Wales public servants, it was not reasonable that, the whole of the tax should be imposed upon Commonwealth public servants residing in that State. It was not easy to adjust the matter, but in the act we took power to make a regulation that would provide what should be the amount of tax imposed upon Commonwealth public servants in excess of the taxation in operation on the 30th June, 1930. An impression gained ground that we were trying to prevent the States from imposing extra taxation, but that was not the intention. The act, of course, would prevent any increase over the taxation in force on the 30th June, 1930, until such time as a regulation was issued, but provision was made in the section for the issuing of a regulation. I notice that the Premier of South Australia has declared that we are trying to relieve members of this Parliament and Commonwealth public servants residing in South Australia from paying as much State taxation as is payable by other residents of that State.
– That is not the position.
– No, it is not. A later statement made by the South Australian Premier was that the Commonwealth Government intended to repeal the section of the act to which he referred. We are not repealing it, but merely making it more effective for carrying out our original intention. We have to proclaim by regulation what rate of income tax should be payable, and we cannot discriminate between States. But as the Assistant Minister explained, we intend to issue a regulation setting out what the maximum in any State shall be in respect of income taxation. At present the maximum tax is being imposed in South Australia, and that will be made the maximum in the regulation. If any changes take place, adjustments will have to be made; but the Government will be able to issue an amended regulation without, any alteration to the law. We shall have to watch the position from time to time. We do not desire to make a privileged class of theCommonwealth public servants; but we do intend to protect our servants from being treated in an abnormal way, for they are already bearing their share of the general economies. The fact that the regulation will provide that the maximum tax shall be the rate at present payable in South Australiadoes not mean that that rate will become the effective rate in every other State. Commonwealth publie servants in Victoria, New South Wales, and the other States will pay the same rate of income taxation as other citizens in those States.
– The rate for Commonwealth public servants will not be increased above the rate applicable to ordinary citizens of a State.
– It will not be. No State will have the power to impose a super tax on Commonwealth public servants. There will be no discrimination against our officers. For instance, the New South “Wales 5 per cent, unemployment tax is calculated by the State Government as part of the economy plan, but we do not propose that the whole of it shall apply to our public servants, for they have been involved in other sacrifices. That is the only distinction made in the whole proposition.
The amendment in regard to the maternity allowance is to give effect to the original intention of the Government, and it will apply to every case. Recently the honorable member for “West Sydney (Mr. Beasley), in speaking to the adjournment motion, directed attention to’ the case of the wife of a man on the dole, who had been refused the maternity allowance. I said at that time that it was never intended that the act should operate in that way, and that I would look into the case. I subsequently made inquiries, and found that while the husband had been in receipt of an income of more than £260 in the preceding twelve months he was actually out of work when his child was born. But a strict reading of the act prevented the authorities from granting the allowance in that case. The amendment now being effected will bring it into conformity with the old-age and invalid pensions law, under which present earnings are taken into consideration. A discretion is being left with the Commissioner, who will now be able to carry out the original intention of the Government. In the future those who are in receipt of more than the stipulated income, will be debarred from obtaining the allowance, but those who are not in receipt of it will not be debarred from receiving it. Every case that has been dealt with since the Financial Emergency Act was passed will be reviewed.
– Will the Prime Minister inform me whether taxes imposed by the States will be deductible from income for Commonwealth taxation purposes?
– The Treasurer made a statement on that subject to-day. There is an anomaly in the law which will be adjusted by an amendment of the act that the Government hopes to introduce very shortly. The Crown Law authorities have advised that unemployment taxation, such as that imposed in New South Wales, or hospital taxation, such as that imposed in Western Australia, which are collected on an annual basis, may be deducted, but that taxation of a similar character, which is collected at its source from wages, may not bc deducted. All such taxation, however collected, is taxation on income, and the Government will introduce an amendment of the act to provide that it may be deducted.
– That is only fair.
Mr. ARCHDALE PARKHILL (Warringah) [3.14J. - Honorable members are indebted to the Prime Minister (Mr. Scullin) for the clear and lucid statement that he has made. The right honorable gentleman has entirely removed any objections that I may have had to the bill, and has made it clear that no” concession is being given to members of the Commonwealth Parliament or to Commonwealth public servants, but that evenhanded justice will be dealt out to all. I. arn now strongly in favour of the bill.
Mr. GABB (Angas) [3.15’ .-I, also, thank the Prime Minister (Mr. Scullin) for the clear explanation lie has given of the bill. Honorable members who have read statements which have appeared in the South Australian press to the effect that members of the Commonwealth Parliament were “bounders” who desired to enjoy the privileges of citizenship without accepting its full responsibilities in regard to taxation in South Australia, have been gratified to hear the remarks of the right honorable gentleman. I hope that a copy of his speech will be forwarded to the Premier of South Australia, Mr. Hill.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 (Constitution of committee).
. -I, and, no doubt, other honorable members, have received a circular letter from the Postal Workers .Union of New South Wales, which sets out in detail under specific headings how the Premiers plan has affected the members of that organization. A comparison is made between the wages received by these men and the basie wage paid in New South Wales, particularly specifying a section of the workers in the Postmaster-General’s Department. It also deals with the subject of time off in lieu of Sunday and holiday work, and with reductions that have been made in allowances and the like. I have no doubt that the Assistant Minister (Mr. Cunningham) has received a copy pf this letter, and I should like him to reply to the statements contained in it. The Prime Minister (Mv. Scullin) has pointed out that, if the till is passed, the Government may issue regulations which it may vary from time to time. He has also said that it is in tended to make the rate of income tax at present in force in South Australia the maximum rate that may be applied to Commonwealth public servants. Will the Assistant Minister inform me what that rate of taxation is?
– I am obtaining that information.
– I should also, like to know what unemployment taxation is being levied in South Australia.
– There is no unemployment tax there.
– It appears that wo shall have to consider this subject from the point of view of unemployment taxation in New South Wales and income taxation in South Australia. I should like to know whether the combined income and unemployment taxation in New South Wales is heavier than the income taxation in South Australia. In any case, Careful consideration should be given to this subject with the object of insuring that the sacrifices which various workers are being called upon to make in the way of wages reductions, reduced allowances, and the like are equitable, and not in excess of 20 per cent, in any case. The members of the Postal Workers Union naturally do not wish to be, and should not be, more heavily penalized than other workers. I admit that it is difficult in the bill to adjust all thu circumstances in these cases, because, after all, while the bill gives certain power to the Government, it does not state, at the moment, what these postal workers will be called upon to pay in unemployment taxation in the different States. It leaves the question open, but no doubt that is necessary, because the Government may from time to time find it necessary to amend the regulation. As this is a matter for future determination, it is difficult for me to answer or explain the circular which has been received from this section of Commonwealth employees.
– I can supply the honorable member with the information which he desires.
– Is the honorable member referring to the unemployment tax?
– Yes. This situation arises. In South Australia, there is no such thing as an unemployment tax, but there is an income tax which provides for unemployment relief. In the other States, there is an unemployment tax. .
– We have not been able to ascertain from South Australia what amounts are allocated as unemployment, tax and as income tax. At present only an income tax is levied.
Mr.’ - BEASLEY. - Will the Government consider taking the whole thing as one tax, including the unemployment tax and the income tax?
– We cannot do that.
– The next point is whether in South Australia where the tax is heaviest, it will be necessary to have a regulation different from that in New South Wales, or is this regulation to be of a general character throughout the States? Commonwealth employees who live in South Australia will certainly bc affected more than other public servants by this legislation. They will he called upon to carry a greater responsibility than the Commonwealth employees, say, in Victoria. If the Government has any further information on this subject, it should give it to the House.
– Regarding the information asked for by the honorable member for West. Sydney (Mr. Beasley), let. me say that wc can divide the regulation into two propositions. One regulation will certify what shall be income tax, and another regulation what shall be the unemployment tax that may be imposed as a maximum in any State. Income tax, as I have pointed out, will be that described as the maximum ruling, say, in South Australia, and as that State imposes the highest tax it means that every
State oau apply existing taxation to Commonwealth public servants in that State. It is quite true that Commonwealth employees in South Australia will pay more than those in other States, because South Australia is the most highly taxed State. The only answer that we can make to that is that we cannot discriminate between Commonwealth public servants and other citizens. Every citizen and every worker of South Australia receiving the same wage as a Commonwealth employee will pay the same taxation. ‘But in New South Wales there would be discrimination if we imposed the whole of the unemployment tax on Commonwealth public servants, because that was taken into calculation when making the reductions in the wages of State employees. We wish, as nearly as possible, to treat our Commonwealth public servants in the same way under this emergency legislation as each Government is treating its own employees. “Mr. Coleman. - What will be the effect in New South Wales?
– The only differentiation will be in New South Wales. Take one of the junior officers receiving, say, £105 ii year. Previously, he paid an unemploy ment tax of £5 5s. a year. Now he will pay £1 6s. 3d., an advantage to him of £3 18s. 9d. On a salary of £203 per year, the unemployment tax was £10 3s. Now it will be £2 10s. 9d., an advantage of £7 12s. 3d. On a salary of £235 per annum, the tax was £11 15s. Now ii will be £2 18s. 9d., an advantage of £8 16s. 3d. On a salary of £274 per annum, the unemployment tax was £13 14s. Now it will be £6 17s., an advantage of £6 17s. On a salary of £293, the unemployment tax was £14 13s. Now it will be £7 6s. 6d., an advantage of £7 6s. 6d. On a salary of £302 per annum, the tax was £15 2s. Now it will be £7 lis., or an advantage of £7 lis. These sums can readily be calculated by honorable members. The Minister gave the details in the schedule which will be set out, not in the bill, but in the regulation. If any anomalies or injustices arise, the regulation can be amended. We have set out to make this tax as equitable as possible. On salaries up to £250 the maximum unemployment tax will be 3d. in the £1. On salaries ex ceeding £250 and not exceeding £500 tha maximum will be 4£d. in the £1. On. salaries exceeding £500 and not exceeding £1,000 the maximum will be 6d. in the £1. On salaries exceeding £1,000 and not exceeding £1,400 the maximum will be 7id. in the £1. On salaries exceeding £1,400 and not exceeding; £1,800 the maximum will be 9d. in the- £1. On salaries exceeding £1,800 and not. exceeding £2,500 the maximum will be* ls. in the £1. On salaries exceeding’ £2,500 the maximum will be ls. 3d. in the £1. I think that honorable members will realize that this tax has been adjusted fairly equitably. It is not possible to make for uniformity. Soma Commonwealth employees take the view that as they are receiving salaries which apply all over Australia, we should endeavour to place them on a uniform basis ; but that is impossible because, under the Constitution, we cannot discriminate between one State and another. In adopting this legislation we are not discriminating, because we are imposing the maximum applying in each State.
– That is being done under regulation?
– Is provision made for the payment of unemployment tax fortnightly? There was a complaint previously about the tax being assessed annually.
– Representations were made to us by a number of organizations that it was difficult for the employees to pay an annual sum, and that they were prepared to suffer a fortnightly deduction from their wages. As honorable members know, the States have no power to impose a wages tax upon Commonwealth public servants, therefore, the tax had to be imposed in the form of an income tax, but we have decided, and we have power to do it, to enter into an agreement with any State Government, where such action is desired by the Commonwealth employees in that State, to have the tax deducted from the fortnightly pay.
– If the employee volunteers to pay the tax fortnightly it will be deducted from his pay automatically f
– Yes. As a matter of fact, in New South Wales, where the organizations have asked for this legislation, we have been in touch with the Government, and it is willing to come to such an agreement. In some of the other States the Commonwealth employees do not desire this action, and we are not pressing for an agreement in their case.
.- By imposing this unemployment tax on Commonwealth public servants, we appear to be compelling them to bear a sacrifice greater than that borne by the other sections of the community since the passing of the Financial Emergency Act. That legislation provided for a 20 per cent, reduction in wages, which Drought the basic wage down to £3 10s. per week. Now an additional tax of 3d. in the £1 is to be inflicted upon the lower-grade Commonwealth employees. In Queensland this is being made a sort of class tax. When the Financial Emergency Act was passed, it was understood that where taxation or additional taxation in regard to wages was levied by State Governments, the Commonwealth public servants in those States would be protected. In Queensland, State public servants are better paid than Commonwealth officers, yet the latter have to bear heavier taxation. I understand that recently Public Service organizations interviewed the Prime Minister and the Treasurer regarding this matter.
– That is the reason why the bill is introduced.
– I receive deputations from all sections of the community.
– Surely the workers’ organizations have as much right to approach Ministers and members as have the Employers Federation and the Chambers of Commerce. After all, we are discussing taxation which produces the money by which government is financed, and it is our duty to ensure that the burden does not press unfairly on any section of the community. For that reason, I ask the Prime Minister to promise that if this taxation is found to (dace federal public servants in Queensand fit a disadvantage as compared with the State public servants, it will be amended.
– We cannot discriminate between the public servants in Queensland, and those in any other State.
Constitutionally it would be impossible to exempt the federal public servants in Queensland.
– But we could increase their salaries by -3d. in the £1.
– That also would be unconstitutional discrimination. It is because Commonwealth servants in some States suffer disabilities that this bill to afford relief to them is proposed. In Victoria the unemployment relief tax is slightly over 6d. in the £1; in Queensland slightly under 6d. ; and in Tasmania a little less. Western Australia imposes no unemployment relief tax, but collects a hospital fund tax, which this legislation will take into account. In South Australia the unemployment relief contribution is included in the State income tax, which is very high; unfortunately, wo cannot ascertain the exact proportion allotted for the relief of unemployment. In New South Wales the unemployment tax is ls. in the £1 in addition to the income tax. One of the defects of the federal system. is that six State parliaments are giving effect to varying ideas of government and taxation, and legislation such as the Government, is proposing is needed to rectify some of the anomalies thus created. At one stage the Government of New South Wales proposed a. tax of 5s. in the £1.
– That was actually passed by the Legislative Assembly.
– That is so. Such an impost would have been an unfair, burden upon the federal public servants resident in New South Wales.
– And other people also.
– Those who are perm’anent citizens of a State have to put up with their lot, but to make a federal public servant, who, perhaps, had been transferred from some other State, subject to Commonwealth economy and also the full brunt of State taxation, would be a tremendous hardship.
.- The remarks of some honorable members suggest the possibility of Commonwealth public servants in New South Wales being placed at a disadvantage as compared with State public servants. Members have received correspondence from the Commonwealth Public Service organizations in New South Wales complaining that this Parliament has treated them
Unfairly. They point out that the State
Parliaments, when imposing a 20 per cent, reduction of salaries, took into account the unemployment relief tax. As the Commonwealth Parliament did not extend that consideration to its servants, they are suffering a greater reduction of income than are the members of the State Public Service. The organizations complain, also, that the Commonwealth basic wage is lower than that for the servants of the States. Those who are not in receipt of the prevailing basic wage should be exempt from the unemployment relief tax, and if that necessitates a further adjustment, I suggest that members of Parliament pay the full one shilling in the pound, instead of 6d. in the pound, as proposed for those in receipt of salaries ranging from £500 to .-£1,000. Pew members of Parliament are dependent on their salaries; most of thom hold Ministerial office or positions on committees, which entitle them to fees and travelling expenses, and, therefore, they are well able to pay the unemployment tax of ls. in the ±1. Those officers who are receiving £500 and upwards are fortunate in being linked with members of Parliament. The representatives of New South “Wales are more concerned about the reduction of salary they will suffer and the amount of unemployment tax they will pay than with the lot of the public servants.
– That is one of the mean things the honorable member would say.
– I can. quite understand the Minister for Defence being hit on the raw when I mention pounds, shillings and pence, because money considerations alone are responsible for his position in the House.
– That statement is offensive and should be withdrawn.
The CHAIRMAN” (Mr”. McGrath).I ask the honorable member for East Sydney to ‘withdraw his offensive remark.
– I withdraw it. I regret having to hurt the feelings of honorable members, but there is no disguising the fact that when their own rights and privileges ave at stake, -champions arise on every side to defend them. But when wc are discussing pensions, some honorable members are very ready to point out that the aged and the invalid can well bear a reduction of 2s. Gd. a week. Any diminution of the income of honorable members, however, is regarded as unfair. I am prepared to say this in the constituencies, and even to follow the Minister for Defence .into his electorate to defend the attitude I have adopted to-day. I know that the numbers are available to pass this bill, but I believe that there has been unfair discrimination between Commonwealth and State public servants in respect of the 20 per cent, reduction of salaries. It is not fair to say that Statepublic servants have been placed at a disadvantage, when we have appeals from the Commonwealth service organizations to redress what they regard as unfair discrimination against them.
.- One of . the decisions of the Premiers Conference in June last, was that Commonwealth and State Governments should reduce their adjustable expenditure by 22 J per cent. The Parliament of New South Wales applied that deduction to State public servants, but took into account the unemployment tax of ls. in the £1. The Commonwealth public servant resident in New South Wales was subject to the same percentage reduction of salary, but has to pay the unemployment, tax also. Thus he is placed at a disadvantage in comparison with the State public servant. The Minister in charge of the bill has. stated that regulations will be promulgated to allow the Commonwealth public servant to take credit for his payment of State unemployment relief tax. I can see no objection to this measure. I remind the honorable ‘ member for East Sydney (Mr. Ward) that members of this Parliament reduced their own salaries by 20 per cent.; in addition those who represent New South Wales Iia ve to pay the State unemployment tax of ls. in the £1.
– Are they not to be relieved in that regard ? Will they not have to pay only 6d. in the £1 on income over £500?
– This measure will not give that relief. But in any case does not the honorable member consider that members of the Commonwealth Parliament are entitled to bc placed on the same footing as the members of the New South Wales Parliament?
– Members of the New South Wales Parliament did not cut oldage pensions.
– Much is heard about the Government’s- action with regard to oldage pensions. Undoubtedly, it has caused hardship, but it was inevitable. The Government tried to alleviate the position by making the reduction only 12£ per cent. I am confident that, if the bill is studied closely, and attention paid to the lucid explanation that was made by the Prime Minister, it will be agreed that the measure is a legitimate endeavour to bring about equity of treatment between Commonwealth’ and State public servants. The committee should agree that Commonwealth public servants are entitled to at least the same treatment that is extended by State governments to State public servants.
.- I regret exceedingly that the Deputy. Leader of the Opposition (Mr. Latham) is not present to participate in the debate. The early history of this legislation may not be known to some honorable members. Originally trouble arose over the taxation of State instrumentalities by the Federal Government, and vice versa. The idea originally at the bottom of this legislation was that, if the Commonwealth Government were to tax State public servants, it would interfere with State rights. It was also considered that, if a State had the power to tax the incomes of federal public servants resident in the State, it would be an encroachment of the administration of the federal body. The case of D’ Emden v. Pedder in Tasmania, concerned the right of a State to charge stamp duty on the salary received by a federal public servant. It was decided by the High Court of Australia that the State of. Tasmania had not the right to insist upon federal public servants paying such stamp duty. That decision still applies, and through it federal public servants escape quite a large amount of taxation.
Then arose a question as to the power of a State to tax federal salaries at’ all. A test case was instituted by the Victorian Commissioner of Taxation, Mr. Prout Webb. It was decided that two members of the then Federal Government,the Prime Minister and Treasurer, Mr.
Deakin, and Sir William Lyne, should represent the Ministry, that I should represent the members, and that Baxter and another, two public servants, should represent federal public servants. The case went to the High Court. For the first time in Australia, that court applied a decision given in the United States of America - that of McCulloch v. the State of Maryland - which provided that States could not tax a bank instituted under federal authority in the United States of America, a decision that still holds good in that country. The finding of the High Court was in favour of Mr. Deakin and Sir William Lyne, myself, and the two public servants. In 1907, the Commonwealth Parliament passed legislation to meet what was regarded as a possible anomaly, and enabled State taxation to be applied to the salaries of federal public servants resident im States. Sir Thomas Bent, Premier of Victoria, was very dissatisfied with the position as it stood, and he induced Mr. Outtrim, Deputy Commissioner of Taxes, and then on the eve of retirement, to defend a case brought by Mr. Prout Webb, Commissioner of Taxes for Victoria, in the Supreme Court of that State. The decision was against the Commissioner of Taxes, and was based on that given in the case that I have already narrated. Mr. Webb appealed direct to the Privy Council, which decided that States possessed the right to apply their income taxation laws to salaries received by federal public servants resident within their borders. Sir Thomas Bent then applied to the Privy Council for the rehearing of the cases covered by Webb v. Deakin and others. However, in view of the act passed by the Federal Parliament in 1907, the Privy Council refused leave to appeal, on the ground that any decision reached would bc useless, as it was unnecessary in view of the legislative action of the Commonwealth Government. There have been no further appeals to the Privy. Council in the matter. I venture the opinion that, if an appeal were made under this section, the legislation that we are now passing would be declared ultra vires. There is not the slightest doubt that, so long as we retain in our Constitution the right to appeal to the Privy Council, and recognize the decision of that body as final, the finding in the case of Webb v. Outtrim must hold good.
There will be difficulties in connexion with this legislation. To begin with, previous Commonwealth legislation provides -that, for taxation purposes, every public servant resident in a State is to be treated similarly to State public servants resident in that State. To my mind that is only fair. The Commonwealth public servant receives the same protection from the State laws as does his colleague in the State Service, and he must, therefore, accept his share of the responsibility for the mismanagement and extravagance of that State, if there has been such. I believe that, by this legislation, we shall bring about an anomaly which will cause resentment against the protection afforded to Commonwealth public servants resident in States. I do not think that a federal member of Parliament, who is resident in a State, should escape taxation similar to that levied upon a State member. This act provides that, by proclamation of the Governor-General, federal members and federal public servants shall be exempted from certain phases of State taxation.
– It will not have that effect in Victoria. This Parliament could pass legislation that would .produce that result, but it is not doing so.
– There might be a Premier in Victoria who would decide to introduce income tax legislation, declaring that any person resident in Victoria, and receiving over £500 a year, should be subjected to a. full 100 per cent. State tax on the excess over £600, as was recently proposed by Mr. Lang in New South Wales. If that were done, these provisions would apply to Victoria. In my opinion, it is a mistake to distinguish between citizens living in and enjoying the amenities of the same State in regard to taxation, whether their salaries are paid by the Commonwealth Government or by a State Government..
– It has been done because in New South Wales, taxation is calculated on the basis of a wage reduction which complicates the position. We must try to meet that complication.
– I agree with that; but New South Wales State public servants must pay the full amount of the taxation, whatever it is.
– Their taxation is calculated as including the reduction.
– In my opinion, all citizens, whether Federal public servants or State servants, should be placed on the same basis in regard to taxation within the State of which they are common citizens.
– That is what we are doing as nearly as we can.
.- I believe that the honorable member for Corangamite (Mr. Crouch) ‘has been convinced by the explanation given by the Prime Minister by way of interjection. This bill, I understand, provides for certain adjustments in regard to New South Wales.
– That will be its effect. If any other State were to raise its unemployment taxation or insurance contributions to a higher rate than provided for in the schedule to this measure, it would apply to them also.
– Until such time as The provision is made by regulation to apply to other States, its operation will be confined to New South Wales.
– The regulations will apply uniformly to all States, but for the moment the only State which will be affected is New South Wales.
– I believe that members of the Federal Parliament, other than those representing electorates of New South Wales, and members of the Federal Public Service other than those stationed in New South Wales, are paying the full amount of taxation imposed by the Parliament of the State of which they are citizens. Every tax payable by private citizens in Victoria is also payable by members of the Federal Parliament, and by officers of the Public Service who are citizens of that State.
.- Queensland has recently increased its unemployment insurance tax, and I understand the explanation of the Minister to mean that the Commonwealth Government will have power under the law to ensure that Commonwealth public servants will pay neither more nor loss by way of taxation than other citizens of Queensland. The honorable member for East Sydney (Mr. Ward) suggested this afternoon that the Commonwealth Government was the only Labour Government in Australia which was careless of the interests of the poorer sections of the community, or of those who were unable to defend themselves. He referred to the legislation passed by this Parliament reducing salaries and pensions, and one might imagine from his remarks that the Government ofNew South Wales, of which the honorable member is a supporter, is particularly zealous in the interests of the poorer sections of the community. As a matter of fact, I. do not think that the citizens of New South Wales are any better off under the unemployment insurance legislation than are those of Queensland. A charwoman in New South Wales, even though she earns only 15s. or £1 a week, must pay her tax at just the same rate as a person earning £1,000 a year, although it bears much more heavily upon her.
– Only those receiving £2 a week and over pay the tax.
– Members of the New South Wales Parliament do not pay unemployment taxation at a higher rate than does the person in receipt of £2 a week, so that I cannot understand why members of this Parliament should bo asked to make greater sacrifices. I do not wish to make the charge that any honorable member obtains election to this Parliament simply for the sake of what he can make out of it. Most of us believe that we can do something as members of this House better than others could do it. We like to get here and try ourselves out. I strongly resent the suggestion that this is the only Government which has imposed sacrifices on the poorer sectionsof the community; all other Governments in Australia have done the same thing.
.- I have no doubt that the Government is well intentioned with regard to this matter, but it has opened the door wide to action on the part of the Commonwealth Government as against the States - action which may prove very unfair. I do not know under what section of the Constitu tion the Government has power to restrict the right of the States to impose taxation.
– The Commonwealth Government does not propose to interfere with that right.
– If New South Wales imposes very heavy taxation upon one section of public servants, this Government can, by regulation, fix the amount at which they are taxable.
– That does not impinge on the right of the State government to impose taxation.
– If it cannot collect the taxation, what is the use of imposing it?
– Suppose one State made the whole of its reduction by way of taxation, and the Commonwealth did it by means of a reduction of salaries, would it be fair to allow that State to impose that taxation on Commonwealth employees whose salaries had been reduced ? It would be a double impost.
– But under what power can the Government take action?
– No State government has power to impose taxation on Commonwealth public servants, or on members of the Commonwealth Parliament, except by virtue of legislation passed by this Parliament. It was a Commonwealth act passed in 1907 which gave them power to impose such taxation. The matter was tested in the High Court, and after its decision had been given, the legislation of which I speak was passed.
– I understood that the States had full power of taxation, except that they could not tax Commonwealth property, and the Commonwealth, in turn, could not tax State property.
– And except that the States have no power, except by virtue of special Commonwealth legislation, to tax members of the Commonwealth Parliament, or officers of the Commonwealth Public Service.
– That section of the Constitution has escaped my notice. In view of the decision of the court, however, I must be silent.
– I wish to correct a wrong impression in the mind of the honorable member for East Sydney (Mr.
Ward). It is not our taxation with which we arc concerned. The Commonwealth Government has been moved to take this action because of the taxation imposed by the honorable member’s leader, Mr. Lang. 1 f the honorable member feels that he has a grievance, he should direct his batteries upon Mr. Lang, not upon this Government. Wc are trying to protect those under our control from the unreasonable taxation imposed by the Government of New South Wales. The Treasurer explained that the present New South Wales Government has refused to fall in with a uniform plan for the relief of unemployment. The Government of New South Wales has chosen to regard the reductions as a cut in wages, while the honorable member for East Sydney referred to them as income tax. Because i lie Premier of New South Wales has refused to co-operate with the other governments, we have been compelled to rake action in order to adjust some of the worst anomalies for which he is responsible. It is ridiculous for the honorable member for East Sydney to lecture this Government for something with which it has nothing to do. If he feels that there is a case for the lower paid salary-earners in New South Wales, let. 1 i i i n. go to Mr. Lang and ask him to remit the tax. His place is there, not here. The deception has been carried on for in on the that the Commonwealth Government is the only Labour Government which has cut wages. As a matter of fact, the New South Wales Government has cut wages; trade unions in that State have cut wages; even the Labor Daily itself has cut wages.
– The Labor Daily works under Arbitration Court awards.
– The Labor Daily has put men off. When the honorable member feels inclined to lecture this Government for putting off men, he should remember that the organization which has the support, of his leader in New South Wales has done the same thing.
Clause agreed to.
Clauses 3 to 5 agreed to.
Title agreed to.
Bill reported without. -amendment; report adopted.
Bill - by leave - read a third time.
In Committee of Ways and Means: Consideration resumed from the 19th June,, 1930 (vide page 3004, vol. 125), on motion by Mr. Forde -
That in lieu of the special duty of customs specified in the resolution introduced into the House of Representatives on the third day of April, One thousand nine hundred and thirty, there be imposed, on and after the twentieth day of lune, One thousand nine hundred and thirty … in addition to the duties of customs collected in accordance with the schedule to the Customs Tariff 1921-1930, fis proposed to lie amended by the tariff proposals, a special duty of customs, at the rateof fifty per centum of the amount of duty calculated in accordance with the duties imposed by the Customs Tari IF .1921-1930 as proposed to lie amended by the tariff proposals on such of the goods included in the items specified in the first column of the schedule hereto as are specified in the second column of that schedule (vide page 2999, vol. 125). and upon amendment moved thereto (by Mr. Fok.de) on the 23rd July -
That the resolution introduced into the House of Representatives on the nineteenth day of June. One thousand nine hundred and thirty, imposing a special duty of customson goods included in certain tariff items specified in column one of the schedule thereto beamended by omitting from column two of that schedule opposite the figure 1 in column oneof that schedule the words “Whole item” and inserting in their stead the words “Whole item except porter and stout “ and that on and after the twenty-fourth day of July, One thousand nine hundred and thirty-one at nine o’clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, the special duty of customs specified in that resolution be imposed in accordance with that resolution as so amended.
– A special duty schedule was brought down on the Srd April, 1930, and an amendment was moved on the 23rd of July last in relation to porter and stout, and the sale of Tasmanian hops. Immediately this special schedule is passed a bill founded on it will be submitted to the committee, and when the primage and excise schedules have been dealt with, measures founded on them will also be .brought down. The special imposts now under consideration are commonly known as the 50 per pent, surcharge duties. The Prime Minister, when explaining the
Government’s policy, and the reasons for the introduction of the special duties, stated that these proposals were not in any way associated with the Government’s protectionist policy, hut were put into operation as part of a plan having for its object the correction of our adverse balance of trade.
– They have an added protectionist effect, also.
– Yes. It is illuminating to peruse a statement that has been circulated showing the effect of the 50 per cent, duty on imports into Australia. It will bo found that the value of the imports affected by this duty amounted to £10,905,673 in 1929-30, and to £3,124,063 in 1930-31, a reduction of about £7,000,000. A comparative statement of the imports during 1929-30 and 1930-31 of goods, the importation of which was restricted by the proclamation of the 4th April, 1930, shows that the value pf these goods was £5,495,355 in 1929-30. and £1,34S,232 in 1930-31. The Prime Minister further stated that in selecting the items upon which special duties were being imposed, it was recognized that the action being taken would have a beneficial effect on the Australian industries that were manufacturing the commodities concerned. It is true that in addition to restricting imports and enabling us to rectify our adverse trade balance, the action taken has had an additional protective effect.
I propose, briefly, to give the reasons which prompted the Government in taking these special emergency measures. In the first place, it is necessary to review the Commonwealth’s external trade balance over the past eight or nine years. From 1923 to 1929, that is, during the regime of the Bruce-Page Government, our total adverse trade balance amounted to £7S,000,000, excluding bullion and specie. In addition to having to meet the deficit occasioned by these adverse trade balances, interest had to be found on both Commonwealth and State oversea loans.
– Was there an adverse trade balance each year from 1923 to 1929?
– No, there were certain favorable balances; but, in the aggregate, the adverse balances far exceeded them.
The annual amount of interest that accrued in the period mentioned was a gradually decreasing one, but the total interest which had to be paid overseas during the regime of the BrucePago Government was, approximately, £175,000,000, which, added to the £78,000,000 excess of imports, gave a total of £253,000,000. Now the greater part of this amount was converted into loans, and a small proportion remained as part of the floating debt. At the present time, our overseas annual commitments for interest alone amount to approximately £29,000,000 exclusive of exchange, or, roughly, £4 10s. per head of the population. The enormous task confronting the people of the Commonwealth in meeting this interest bill may best be judged by a comparison with the indemnities which Germany has been required to pay. Under the Dawes plan, assessed on its capacity to pay, Germany was called upon to find approximately £125,000,000, or £2 per head of its population. Later, under the Young plan, this amount was reduced to £85,000,000, or less than 30s. per head of population. As against this figure, Australia has an amount of £4 10s. per head to meet- in overseas interest annually, which is almost a superhuman task, and, if this commitment is to be met in full, it is essential that imports bc kept at a minimum. If imports are not’ restricted, the Commonwealth and the States will be unable to pay their overseas interest bill.
When the present Government assumed office, remedial action, which had been long delayed, was essential. This could be effected by an increase of exports, a reduction of imports, or a combination of both. As regards the proposal to increase our exports, any one who has studied the problem knows the great difficulties confronting a country which sets out to increase its exports to a considerable extent in a short period. In the first place, production must bc increased, and, secondly, overseas markets must be found.
– Were the unemployment figures taken into account in determining these increases in duty?
– If I were to give all such statistics I should-be going beyond the scope of the schedule, and prolonging this debate, lt is true that the whole world is economically sick, and Australia is affected by that position, being faced with widespread unemployment, and remarkably low prices for products that have to be sold overseas. Usually, sales in overseas markets can be increased only by displacing the products of competing countries. These countries will not allow trade to be lost to them without making special efforts to retain it, and it is usual for them, in- the last resort, to reduce the prices of their products. Thus the endeavour to increase exports may lead to lower total returns by reason of the reduced prices obtained. This is well exemplified in Russia’s effort to capture a larger share of the world’s wheat market. Although Russia has recently been exporting more than previously, her returns have been cut by nearly half, and it is quite impossible for her to maintain the large volume of imports that she formerly brought in when she was paying for them by obtaining phenomenal prices for her products, and borrowing approximately £40,000,000 a year abroad.
In view of the great difficulties on the export side, the Government had, perforce, to concentrate its attention on imports, in order to obtain immediate results. It was most unfortunate that the prices of our principal exports should have fallen so tragically. Had they remained at the same level as that obtaining at the beginning of 1930, the need for these measures would not be felt today. As it is, however, the effectiveness of the Government’s plan may be judged from a comparison of our imports and exports for the last two years. In 1929- 30, the excess of imports over export’s amounted to £32,000,000. From the 1st July, 1930, the Government’s plan began to operate, and for the year 1930-31, exports exceeded imports by £28,500,000. This represents a change- over of about £60,000,000, and it is a feat of which any government might well be proud. We had to run the gauntlet of severe criticism for having taken, such drastic steps to restrict imports. I was discussing this matter with a leading banker recently, and he declared that Australia would make a great mistake if she removed her tariff-restrictions at the present time, because we have not yet fully rectified our adverse trade balance. The figures that I have quoted relate to merchandise only, and do not include gold or bullion.
It will be noted that the excess of exports over imports for the last financial year is not quite sufficient to meet our overseas annual interest charges, but for the forthcoming year the excess of exports should enable all interest payments to be met, and, in addition, I hope that such excess will permit of a substantial reduction being made in the overseas floating debt. The need for these measures will disappear when the annual excess of exports pays our overseas interest bill, and also enables our overseas floating debt to be liquidated. Honorable members must realize that the importing habit must not be allowed to impair our ability to meet our overseas obligations, and if they are not prepared to support the Government’s plan, they must accept responsibility for the default to overseas creditors which must follow the non adoption of this and other allied measures that were decided upon after mature consideration, and on the advice of financial authorities.
.- I shall not delay the committee very long, but I feel that I must direct attention to the astounding attitude which the Minister has adopted. He has said that the Government cannot see its way clear to cancel any of the special high duties that are at present being imposed, because the adverse trade balance has not yet been entirely rectified; but instead of asking that they be continued for only a limited period, he is asking that they shall remain in force for an unstipulated time, and in fact, until Parliament chooses to repeal them. If he had asked for a continuance of the duties for a year or for two years, we should have, known where we stood; but he is asking for an unlimited approval of them. Apparently they are to be continued until a new government comes into office which will cancel many of them, and reduce many others. We cannot close our eyes to the fact that in Victoria, the home of protection, there are at present fifteen or twenty different organizations pledged to work for the return of candidates who will support a reversion to the 1908-11 tariff. The members of these organizations recognize that industry is being stifled in Australia. The Minister has said a good deal about the period when heavy imports were being made; but he was not generous enough to admit that this was due principally to enormous overseas borrowing principally by the State Governments - in fact, almost wholly by them. Everybody knows that when this money was borrowed overseas it was sent to Australia in the form of goods. With the cessation of overseas borrowing there has naturally been a reduction of importations. If it were possible to-day to borrow £50,000,000 or £60,000,000 overseas, we should find goods from abroad flooding into this country, in spite of the heavy duties that are in operation. I have, for a very long while, strongly opposed heavy overseas borrowing. I hope that we shall not borrow one penny that we can avoid borrowing. We have boon landed in our present dreadful position because of this overseas borrowing, and the policy for which honorable members opposite stand. We hear members of the Labour party talk in a general way about “ our wool and our wheat “, while at the same time they support a policy which doubles, trebles, and in some cases quadruples, the price of the goods which our producers need, forgetting that, all our primary production must be sold at competitive prices in the world’s markets. However, when the various items of this schedule are under discussion, I shall enlarge upon these points. We all know very well that the economic commission appointed by the Bruce-Page Government showed clearly that the high duties that we have imposed on clothing and many other commodities have cost the people hundreds of thousands of pounds more than the wages paid in these industries in Australia. The giving of concessions to various secondary industries is having the effect of ^destroying the primary industries from which we obtain our wealth.
– I wish to direct attention to one aspect of this subject, and I frankly admit that I do it in the interests of my electors. It has been said on behalf of the Government that these duties were imposed, not for revenue-producing purposes, but for the purpose of correcting our adverse trade balance. It is admitted that many of the items included in this schedule are not being manufactured in Australia, and that no one has any intention of attempting to manufacture them here. The Minister for Trade and Customs (Mr. Forde) has told us that our adverse trade balance has been rectified to a large degree. If that is so, why should it be necessary to continue all of these imposts ? This policy may have been necessary at the time when it was adopted, but is it still necessary?
– It is for the time being. The whole subject can be re-considered when the position has been entirely rectified.
– The honorable member for West Sydney is worried about the effect that this policy has had on the Sydney wharf labourers.
– I have alreadyadmitted that I am arguing from the point of view of an important section of my constituents. In the interests of these men, I ask the Government to consider carefully whether it is really necessary to continue this policy, at least to the present extent, in view of the fact that our adverse trade balance has been largely rectified.
– lt has not been rectified sufficiently to enable us to pay our interest bill. Even when.it has had that effect, it will still be necessary foi- us to provide £9,000,000 for exchange.
– I do not want to enter upon a discussion of the exchange position, although that, is a subject of very deep interest, particularly in view of the value of the pound sterling in Great Britain to-day. One would be justified in arguing that under present circumstances we are being robbed of about £11,000,000 per annum in consequence of Great Britain’s departure from the gold standard.
– There is a mistaken idea abroad that the banks get £30 out of every £100 that they send overseas. As a matter of fact they get only 10s.
– There can be no doubt whatever that the exchange position is regulated by some central authority on which the banking institutions arc strongly represented.
The question I ask is why the Government cannot see its way clear to remove some of these imposts with the object of assisting the waterside workers in every Australian port. If the present policy could bc modified, these men would be helped, and so would all who are engaged in the transport industry, such as carters and drivers, storemen and packers, and others associated with the handling of goods which come to Australia from other parts of the world. I supported the imposition of these duties originally, although I knew that the policy would adversely affect many of those whom I represent in this Parliament. At that time I hoped that the policy would have the effect of developing secondary industries, which would provide employment for the men who would be displaced in transport industries; but, unfortunately, that hope has not been realized. To-day many men who are ordinarily engaged in secondary industries are receiving State aid by the dole and per medium of the coupon system, and there is no opportunity for waterside workers to transferto occupations such as these. If the Government is not permitted, by the organizations which control the financial situation, to do all that it desires to do to help the unemployed, I ask it to do something to help the waterside workers by modifying these duties, particularly in view of the fact that our adverse trade balance has, to some extent, been corrected. I ask the Minister to give fair and honest consideration to that aspect of the subject.
– A great, deal has been published at, home and abroad recently about, what this Government has done in the way of correcting our adverse trade balance. and it is high time that the public should be informed that the actual facts of the case do not harmonize with the statements made on behalf of the Government. The Minister for Trade and Customs (Mr. Forde) has said that the imposition of the embargoes and surcharges was not part of the protectionist policy of the Government. I do not for a moment believe that that is so, nor do I think many people in Australia “accept that view. It is my firm conviction that these embargoes and extortionate duties were imposed by the Government in fulfilment of promises made by the Labour party to certain manufacturing interests during the last election campaign. The Government, in my opinion, adopted this policy in order to satisfy the manufacturing interests which had not been given assistance under the heavy and punitive duties provided in the tariff schedule.
– I assure the honorable member that that is not so.
– I hope the Minister will not feel annoyed when I say that, with very great respect, I hardly feel inclined to accept his assurance. I suggest that the discussions in connexion with this matter were conducted not by the present Minister for Trade and Customs, but by the master mind of the Government - the mind which controls the destinies of the Government in these and many other matters.
– Is the honorable member referring- to the honorable member for Maribyrnong (Mr. Fenton) ?
– Oh, no. I think the honorable member for Dalley (Mr. Theodore) can easily be recognized by my description. In any case, the Minister has not put the position fairly. He has said that during the seven years in which the Bruce-Page Government was in office, our adverse trade balance amounted to £78,000,000, but he did not say that in at least one of. the closing years of that regime we had a favorable trade balance. That would be too much for the Minister to admit. It does not necessarily mean, as the Minister suggests, that a country with an adverse trade balance is running hopelessly towards a state of bankruptcy. A country with an adverse trade balance may not have the necessary funds to meet all its overseas commitments, but, it may possess goods which are of real value, and in some respects may be of more service than actual cash. Moreover, the difference in the country’s trade balance is simply the difference in the amount of money we are borrowing from overseas.
When the honorable member for Maribyrnong (Mr. Fenton) was Minister for Trade and Customs, he intimated during his peregrinations abroad that these embargoes and impositions were merely temporary expedients. The right honorable the Prime Minister (Mr. Scullin), when in Great
Britain, made a similar pronouncement. Notwithstanding these definite assurances, there is not any sign of the embargoes being lifted or of a reduction of the duty of 60 per cent, placed on many importations. The honorable member for “West Sydney (Mr. Beasley), who for a time strongly supported the protective policy of the Government, and was apparently in favour of these embargoes, now finds that the port of Sydney has been practically denuded of shipping.
– What rot !
– The high protectionists who temporarily represent the industrial constituencies in the vicinity of Sydney apparently do not agree with the views which I am expressing. I am justified in saying that these honorable members only temporarily represent these constituencies, because the political history of this country records that every representative of industrial constituencies who has consistently voted for harsh, extortionate and punitive customs duties, and has thereby placed an unnecessarily heavy burden upon the working class, has not survived a succeeding election.
– That is nonsense.
– The political records show that such is the case.
– That cannot be said of the honorable member for Newcastle.
– It is difficult to define the fiscal policy of the honorable member for Newcastle (Mr. Watkins). The honorable member for West Sydney now sees that the vaunting boast of the Minister for Trade and Customs (Mr. Forde) that unemployment would diminish, and that work on the waterfront and industry generally would be rehabilitated by the imposition of high customs duties, has not materialized. It has proved as inaccurate as many of his other statements. An extraordinary feature of the protective policy of this Government is that employment has not increased, and that although the position was serious when this Government came into office, unemployment has increased fourfold since that time.
– But for high protective duties it would be worse than it is to-day.
Mr. ARCHDALE PARKHILL.Notwithstanding the fact that we have the highest tariff of any country, we have also the highest percentage of unemployment ever recorded in Australia. Nothing will convince the unemployed man walking the streets with an empty stomach, and with a wife and family to support, that the protective policy of this Government has been of any benefit to him. It is of no satisfaction for him to be told that the position would have been worse had this policy not been brought into operation. Our adverse trade balance could have been rectified by the rate of exchange and the lower purchasing power of the people without the imposition of embargoes. What importer is likely to import goods when there is a 30 per cent, exchange against him? The exchange rate, which would have been sufficient to check imports, would not have had the effect of destroying businesses over night, aud the incomes of a large number of those engaged in the industry, as this policy has done. The Minister speaks in a sneering way concerning the activities of those engaged in importing.
– The Government professes to be endeavouring to encourage exports, which become imports in other countries.
Mr. ARCHDALE PARKHILL.Exactly. Our export trade is largely responsible for the country’s financial position. Buyers come from Japan to purchase our wool, and from Belgium to obtain commodities which we produce; but, owing to the fiscal policy of this Government,. Japan, Belgium, France, Italy and other countries have become disgruntled potential commercial enemies. Apparently, this Government considers an adjustment of our trade balance of more importance than a balanced budget. Of what benefit have these embargoes and heavy duties been to the country? The only Australian industries in operation at present are those established under the Pratten tariff introduced by the BrucePage Government. The duties imposed by this Government have not increased secondary production, but may have resulted in the introduction of some exotic industries which, under a sound, economic and scientific tariff, would never have been established in Australia.
– The honorable member would have opposed the Pratten tariff had he been a member at the time it was introduced.
– The honorable member for Reid (Mr. Coleman) should not make such a senseless remark. He does not know the attitude I would have adopted towards that tariff.
– If the honorable member were consistent, he would have opposed it. –
Mr. ARCHDALE PARKHILL.That is the sort of argument that one expects to hear from those supporting this Government’s prohibitive protective policy. Of what benefit has this tariff schedule been to the secondary industries? The value of our exports has not increased by ls. in consequence of its operation.
– The volume of our exports is greater.
Mr. ARCHDALE PARKHILL.The secondary industries are still unable to export their products, as was the case before these duties were imposed.
– That is not so.
– It is. No benefit has accrued to the country as a result of the protection afforded to secondary industries. The Government should recognize that primary production is of the greatest importance to Australia. What has the Government done since it has been in office to make it easier for the primary industries to carry on their important work? Its only act, as affecting primary production, has been to impose, at the instance of the honorable member for Cook (Mr. E. C. Riley), an export duty on sheepskins, which was precipitately removed. It has imposed embargoes on importations, and sales tax on many commodities which the primary producers find essential fj production.
– The honorable member said that the trade agreement entered into with Canada was one of the best that we have ever had.
– I shall come to that in a. moment. The only industries that are of real benefit to Australia in a rehabilitation scheme are the primary industries, but nothing has been done by this Government to assist those industries which are so essential to Australia’s prosperity. I did pay tribute to the Minister for Markets (Mr. Parker Moloney) for the agreement entered into between the Commonwealth and Canada; but I hope that my approval of that agreement will not for ever stand to my discredit. I congratulated the Minister for having consummated a commercial treaty between the two countries. I saw so much resentment being caused by Australia’s fiscal policy that I welcomed an agreement which would keep one country at least out of the disgruntled group of nations that are imposing retaliatory duties against us. Whilst the Canadian agreement is of advantage to Australia in some respects, it ‘ is equally advantageous to Canada in other respects, and I remind the committee that the benefits to both those countries are at the expense of Great Britain. With that consequence of the agreement I expressed dissatisfaction on a previous occasion. The statement made by the Minister for Trade and Customs was entirely unsatisfactory. It is high time that the embargoes were removed. The friends of the Government have had a fair run; they should now let up and give the general public a chance. Parliament should immediately remove the embargoes and 50 per cent, surcharges and substitute an economically sound tariff.
.- The Australian people were given to understand that the surcharges and embargoes were only temporary. What the Government’s policy has achieved in improving the trade balance does not give much justification for boasting. Because of this policy the revenue from trade and customs is approximately £12,000,000 short, and the people of Australia have to make up that amount by direct taxation. The manufacturers have taken advantage of the surcharges and embargoes to maintain prices, and the consumers, whose buying capacity has been reduced, are forced to pay. more for their goods. That is retarding the great primary industries. The Prime Minister, when shamefacedly announcing the embargoes, admitted that the financial stringency would have regulated the imports.
– The banks declared that that would be an unnatural means of regulation.
– It would have been a natural way. Unnatural embargoes are consolidating certain interests in sheltered positions during a time of general depression, and to bolster some industries others have to accept more than their share of sacrifice. I hope that the Government will not continue the surcharges.
– The Senate will knock them out.
– I hope that the Senate, Australia’s most representative chamber, will put this schedule in its proper place, the waste paper basket.
.- I do not desire to deprive the Government of any credit which may be due to it for the completion of the Canadian trade agreement; but it is fair to remember that the treaty was first negotiated by the late Mr. Pratten. The Government is to be commended for having continued and extended the scope of the arrangement he made.
It is remarkable that men who are apparently of normal intelligence should imagine that they have explained the trade balance completely when they have struck a balance between imports and exports. The Minister for Trade and Customs stated that, during the period 1023 to 1929, Australia’s accumulated adverse trade balance was £78,000,000. No doubt the honorable gentleman totalled the imports and exports in that period, and convinced himself that the whole case had been completely stated. Other factors have to be taken into consideration when determining whether a country is going backward or forward economically. In connexion with the annual stocktaking of a business it would be ridiculous for a proprietor to attempt to determine the prosperity of the enterprise merely by comparing sales and purchases. He must take into account the extent to which stocks and plant have increased or decreased during the year. It is possible for a business to i,are been really profitable during a particular period despite the fact that its outgoings were greater than its incomings, if it has built itself up by additions of stock and plant which make it capable of conducting its operations more efficiently and extensively. That applies also to a farm. A fanner may find at the end of a year that his receipts from sales total less than his purchases. Yet he may have done quite well during the twelve months ; he may have increased his stock and plant to such an extent that his enterprise is in a much stronger position than it previously occupied. In considering the financial position of the country also, we have to take into consideration not only sales and purchases, but another very important factor: additions to stock and plant. Only a few days ago the right honorable member for Cowper (Dr. Earle Page) pointed out that during the last seven years about £100,000,000 worth of machinery had been imported into Australia. That is productive plan t which enables this country to produce more, and better, than it did before. Obviously, when extensive borrowing takes place over a long period, an adverse trade balance cannot be avoided, because the loans come to us in the form of imports. During the seven years 1923-29 the States of Australia, not the Commonwealth, increased the national debt by £207,000,000. The amount borrowed. came to us, not in gold, but in the form of machinery. and other imports. We have to bear that factor in mind when reckoning whether the country has gone forward or backward. The national prosperity cannot be gauged by merely setting the amount of exports against the imports during a given period. Some of the greatest’ industrial nations had long successions of adverse trade balances, while building themselves up industrially. The United States of America, while progressing from a debtor country to one of the principal creditor nations, had a long and unbroken succession of adverse trade balances. During those years it was strengthening itself by purchasing abroad machinery and other means of production. Australia has been doing the same during the last decade. I do not contend that all the money borrowed was wisely expended, but the importation of £100,000.000 worth of machinery during the last seven years is an item to he entered on the credit side of the ledger. It is manifestly unjust to blame the Government of the Commonwealth during the years 1923-29 for the increase in importations that resulted from the extensive borrowing by the States. The Minister for Trade and Customs only half stated the case, and reached an erroneous conclusion when he said that because the Commonwealth had had a series of adverse trade balances, it had necessarily retrogressed. In any case, borrowing has now ceased, and I believe that the adverse trade balance would have been rectified automatically without resort, to those extreme measures to which the Minister attributes the reduction of imports. Even had no embargoes or surcharges been imposed importations would have been substantially diminished. The principal factor in redressing the adverse trade balance has been the reduced purchasing power of our people. After the boom and collapse of 1893, New South “Wales, which was a freetrade State, had a long succession of favorable trade balances, because its people were too impoverished to import. That is the position of Australia to-day. I believe that if the tariff wall were to fall to-morrow there would be an incentive to certain people to import, with the result that a further demand would bc made upon exchange, the effect of which would be to raise it to whatever point was necessary to prevent our importing more than we could afford. That exchange would take the place of these duties.
– Of what benefit would that be?
– It would be of very great benefit to many of the Minister’s constituents who export largely, because exchange would rise to its natural level instead of being prevented to a certain extent from doing so by high import duties.
I merely wish to add that I have little objection to offer to surcharges on what are actually luxuries. There are many articles in these items, however, which cannot be so described, and it is quite time that the 50 per cent, surcharges were removed from them. At the appropriate time I shall avail myself of the opportunity to vote against the proposals of the Government with respect to them.
If it be accepted as a fact that it is beneficial to have an adverse balance of trade, why has it been necessary for Great Britain to change her fiscal policy, and to adopt something in the nature of a tariff in order to assist her industries? The honorable member for Gippsland (Mr. Paterson) was a Minister during the period when there were heavy imports into Australia. Motor cars figured largely in those imports. In the garages of Australia to-day can be seen cars that were then imported for £700 or £800, and that can how be bought for as low as £2. How can it be argued, therefore, that such a policy is beneficial? The honorable member said that the position of a farm was improved by going into debt to purchase machinery. To what extent was farm machinery purchased while the last Government was in power?
– What I said was that the purchase of stock was an improvement in connexion with a farm.
– The importation of silk stockings, which laddered during the first week that they were worn, and had to bc discarded, and other similar useless articles, was responsible for our adverse balance of trade. Australia was flooded with such articles. The changed attitude in Great Britain has caused a Contretemps in the financial affairs of many other nations. I should like to see this Government not only improve the position in Great Britain, but also increase the credits that we hold there, by an expansion of our exports of perishable products. We are benefiting to-day because we are exporting more than we are importing.. Consequently, I stand for the policy that has been enunciated by the Minister for Trade and Customs (Mr. Forde) . I agree that this policy does not suit the constituents of the honorable member for West Sydney (Mr. Beasley), who are suffering to-day because of the diminution of shipping, and the lessened volume of imports that have to be handled. But to the nation generally it has been of immense benefit.
– I do not wish to take from the Minister for Markets (Mr. Parker Moloney) the. credit that is due to him for having successfully negotiated the Canadian trade agreement. I point out, however, that in the making of that agreement he departed from the policy of protection of which this Government boasts so much. The basis of the agreement is that import duties as between Australia and Canada are not to be applied.
The Minister for Trade and Customs (Mr. Forde) is not entitled to anything like the measure of credit that he claims in connexion with the correction of the trade balance. It is true that for some years our purchases exceeded our sales. That will inevitably occur when a country has money to spend. For years, Australia lived above her means, because of the plentiful supply of money in this country, chiefly loan money. That is the explanation of our adverse trade balance. But even without a trade embargo it would have been quite impossible for us when the conditions changed to continue our- purchases on the scale to which we had become accustomed. No loan money was available, and comparatively little was being received from our export trade. Embargoes unquestionably have contributed to the correction of the trade balance, but at what a cost to our trade with other countries ! They have resulted in retaliation by many of our best customers’, and, unfortunately, that retaliation has been visited on our primary industries.
– Where has that happened ?
– In Germany, France, Italy, South Africa and other countries retaliatory laws have been passed, and it is acknowledged that in many cases those laws have been enacted as a counter to the prohibitions that have been imposed by this Government. The idea of Australia living to herself and not trading under ordinary conditions with the rest of the world, will get us nowhere. We are too far away from the world’s markets, and have too small a community, to attempt to be self-contained. If we wish to develop to any extent we must be prepared, while maintaining a policy of fair and reasonable protection, to. trade with other countries who are prepared to trade with us. The effect of a policy is best judged by the general results that it produces. While I do not suggest that we should enjoy anything like prosperity whatever policy was adopted, I do say that Australia is in a worse position today after an experience of nearly two years of the protectionist policy of this Government, than it had been in previously within the memory of honorable members ; and it is a striking fact that the period of acute depression commenced when these embargoes were imposed by the present Government. I do not say that our position is due entirely to the operation of these embargoes, nor to the general policy of the Government; but it can be argued that we are worse off than we might have been had we continued a moderate, reasonable policy, and one more in keeping with the tariffs of those countries with whom Ave trade. Australia is in the extraordinary position, of having a tariff higher than that of any other part of the world. I know that we do extraordinary things by legislation in Australia. This is one of the greatest experiments that we have made, but it has not brought prosperity in its train. It has not improved our internal industries ; because they are less prosperous now than they have been for years. They are not producing as much now as they were before. In fact, during the last two years, apart from the favorable trade balance, there has been nothing to which we can point with any degree of satisfaction. I am asking for a fair measure of protection. It seems to me that our present tariff policy, which we were promised would be only of a temporary character, is altogether excessive. If these heavy duties and prohibitions were at the time of their imposition to any extent necessary, at any rate they have now accomplished their purpose. There should be a remission of all these embargoes and excessive duties which have been imposed by this Government.
.- I desire to say a word or two on the tariff, because it is a real reflex of the Labour party’s policy, and, as such, I am prepared to support it. The honorable member for Perth (Mr. Nairn) has said that our tariff policy has restricted our overseas markets, but he knows that he has not stated the facts. I have not heard from honorable members opposite one speech in which they have come down to tin-tacks, and shown where our overseas trade has been detrimentally affected by the tariff policy of this Government. Within the last month our overseas trade has shown a distinct improvement. According to the newspapers wo exported over 30,000,000 eggs. That is a record. The whole of our dried fruit has been sold. Within the last few weeks wool prices have firmed, and the newspapers contain illustrations of woolbuyers wildly competing for the various lots offered at the sales throughout Aus-., tralia. Wheat prices are recovering, and many people contend that Australia has now turned the corner to prosperity. The Government’s tariff policy has certainly been in the best interests of Australia. The honorable member for Perth has said that the depression dated from the time the Government introduced its tariff proposals, but he well knows that that is a misstatement. The depression started from the time we were unable to borrow money abroad for the employment of our people. As Professor Irvine recently said in Sydney, the biggest buyer of our commodities, whether manufactured here or imported, is ‘ the worker, and once the source of his income dries up the effect is soon felt throughout the community. Two years ago I tried to promote employment by advocating an expansion of credit of £20,000,000, but my efforts were unsuccessful. Since that time the banks have advanced more than that sum, but in dribs and drabs, thus nullifying any beneficial effect. The Governments of Australia have been trying to balance their budgets, at the same time starving the people instead of giving them work which would develop the secondary industries of this country and afford some evidence of prosperity. It is not the tariff that has brought about the depression in this country, but the cessation of borrowing abroad, and the load of interest which we are being asked to carry and which we cannot carry. It is the failure of the Government to provide finance from other sources that has heightened the depression. Some people are now preening themselves on the fact that the rehabilitation plan is beginning to have good results, and that there is less unemployment in South Australia. A representative of the Citizens League in that State has made such statements in Melbourne and Sydney. But let me say that if we cannot, by natural means, relieve the unemployment in our midst while spring is with us, God help, those who are out of work when winter comes. There must come a point at which no further unemployment is possible. Unemployment to-day is a black blot upon Australia. The honorable member for Perth (Mr. Nairn) talked about a fair measure of protection, but if I had something to protect, and it were threatened by some one else, I would use my physical powers in an effort to give him a knockout. That is what I call fair protection. Let us get down to the tariff.
– Is it not a question of getting up to the tariff?
– Honorable members opposite have had to swallow this tariff, and surely that is a downward process. The honorable member is in favour of assistance being given to the wheat producers to the extent of £3,000,000. Yet the unfortunate unemployed are to be left to the mercy of the banking institutions. In 1929-30, we imported 7,879 cwt’. of glucose valued at £8,270. The imports of glucose have now been reduced to 62 cwt., valued at £28. Will any honorable member contend that that is not in the best interests of Australia and of the primary producers generally? If we manufacture glucose, and in the process make use of the maize grown in Australia, are we not acting in the best interests of this country? It is ridiculous to say that we should continue to import glucose. Our imports of biscuits have fallen from 500,000’ lb. to 34,000 lb. Why should we import biscuits when we can manufacture them as well as people overseas? Is there anything wonderful in the manufacture of laundry blue? It is merely a household article which should be manufactured here. Our imports of cheese have fallen from 500,000 lb. to 30,000 lb. Is that not in the interests of the primary producers? Under tariff protection, we are increasing our exports of cheese. I challenge honorable members to point to any primary product -which has been detrimentally affected by our tariff policy. We shall not get rid of the depression until there is an alteration of the system under which we live, and until we can give to t he worker who is now on the dole’ an opportunity to work and to regain his self respect, so that he may meet his fellow men on equal terms instead of having to line up in a queue awaiting the dole. The dole system is demoralizing this nation. We must adopt a. sane policy of development in order to enable our people to return to work, and to enable this country to progress in respect of both its primary and secondary industries. The Australian workman has been more than once eulogized for his skill.
– He should bc left alone.
– The honorable member is no doubt suggesting that the worker should be free altogether from the influence of the trade union organization and its officers. It must, not bc forgotten that these organizations have come into being for the purpose of self-protection, and whatever may be said about their methods, they do not interfere with the personal liberty of their members.
– Is the honorable member in favour of passing a simple measure forbidding all importations?
– I cannot answer the honorable member’s question better than by referring to what I said on one occasion to Mr. Holden, of Holden’s motor body works, Adelaide. After inspecting the big establishment and the plant laid down by the older Mr. Holden, with a foresight which has now been amply justified, I made a few remarks as the representative of Adelaide. I said that I would be prepared to compel Australians to wear tweed hats until they could make fur hats. i. am a whole-hog protectionist. I am in favour of going without things until we can make them for ourselves.
– That is a long answer to a simple question.
– I would have all things made in Australia that we can produce in Australia, not at the highest cost at which they can be imported, but at a reasonable cost. If we can make socks from wool we should go on making them until we can make them of synthetic silk. I am a sound protectionist, and I support these special duties. I hope that the schedule will be increased by other items if it can be done with advantage to Australia. I commend the Government for this schedule. It cannot be contended by honorable members opposite - by any logical argument at any rate - that the “Government did not do the right thing in imposing these duties.
.–’ When these special duties were first imposed I asked the Prime Minister whether the question of Empire trade had been taken into consideration, and his answer was that it was not a fiscal matter. Yet to-day the Minister for Trade and Customs (Mr. Forde) has shown that it was a fiscal matter, as I have all along said it was. He has claimed that the imposition of these special rates of duty has been the means of creating employment.
– I did not use the terra “It is not a fiscal matter”. I think I said “ It is not a question of protection “.
– The right honorable gentleman said that it was not a fiscal matter.
– I would not so misuse the word “ fiscal “.
– I think that I can show the right honorable gentleman that he did so. The circumstances to-day are quite different from those in existence when these special duties were applied. At that time our trade balance was an adverse one, and the prohibitions and super taxes imposed by the Government received a measure of support from the Opposition because we were alive to the fact that many of the items affected covered foodstuffs which need not be imported. Circumstances, however, are now entirely different. The adverse trade balance has been adjusted, possibly, as the honorable member for Gippsland (Mr. Paterson) has suggested, as the result of the heavy exchange rate. At the outset I contended that one effect of these prohibitions and super taxes would bo the destruction of our trade with Great Britain, our best customer for all our products, and capable of absorbing the whole of our exports if we go the right way about it. The prohibitions have not been the means of increasing employment. On the contrary, since their imposition unemployment has increased. There has been a reduction of customs revenue. The moderate duties on many of these items prior to the imposition of the super taxes and prohibitions brought in some revenue, the loss of which has had to be made up by imposing heavy primage duties on essential imports. Some honorable members, like the honorable member for Indi (Mr. Jones), claim that they ure 100 per cent. Australian. I hate to think that any Australian is so dense as to think that a nation can live to itself. Isolation always reacts on those people who seek to apply it. Even the hoarding of gold has had a reactionary effect upon those countries that have attempted it. Honorable members who cannot see further than their own noses in that respect are only bringing trouble to their own country. To say that we shall make everything within our own country implies that we intend to sell to everybody and buy only from ourselves.
– It is said only by people with an absolutely narrow vision.
– That is so. It is the old parish-pump idea. No business man could apply it with success to his own business. Yet honorable members preach it in their trade unions, and they are loudly applauded by the unthinking. These abnormal schedules which the Minister has brought down from time to time have not given the work that was intended of them. [Quorum formed.]
The selfish, narrow and reactionary policy of trying to live to ourselves alone not only increases unemployment, but also brings about a reduction of customs revenue which means that a heavier burden of taxation has to be borne by the remaining taxpayers. This policy, when applied, has also a reactionary effect internationally. The honorable member for Adelaide (Mr. Yates) is not aware that certain countries with which Australia formerly had a favorable trade balance have reacted most unfavorably towards our exports. France, Italy and Germany have each placed heavy duties on Australian wheat and other products. I brought under the notice of the Minister a threat of retaliation from a French agent.
– The honorable member does not suggest that it was Australia’s action which brought about the higher duties imposed in the countries he has mentioned?
– Yes. When the Commonwealth imposed a duty on Vichy water, a mineral water bottled in a French town under the supervision of the French authorities, the French agent for this water held up his hands in horror, so to speak, and exclaimed, “ This stupid Government believes that it can make Vichy water!” He concluded a communication on the subject by threatening retaliation by France on some of the produce France purchases from Australia. Fortunately, the Commonwealth Government saw fit to alter the duty.
The honorable member for Adelaide has had a lot to say about what harmless people trade union organizers are. I have frequently spoken my mind about these gentlemen, and I do not wish to say any more about them, but I point out that the present Government is exploiting unionism. Tender forms submitted to the Postmaster-General’s Department must indicate whether unionists are employed.
– The honorable member must not proceed on those lines.
– I am merely replying to what the honorable member for Adelaide said. By its policy of high duties, supertaxes and embargoes, assisted by an adverse rate of exchange, and heavy shipping freights, Australia is reaching an unstable situation. It is somewhat like an inverted pyramid, about to topple at any moment. If we add to the policy already in operation, that of seeking to isolate ourselves from the outside world, the whole structure is bound to fall. Unless Australia makes up its mind to get back to a sensible basis of selective protection, and accepts the advice of the Tariff Board in the matter of imposing duties, we shall not get back on to the road to recovery. The recent slight rise in the price of wool is merely a passing phase; the price may drop again in a month or two.
– What has the honorable member to say in regard to the increase in the price of Australian stocks?
– That increase has come about because the world has recognized that, with the rehabilitation plan, in a measure Australia is determined to put its house in order. Australia now has greater prestige in the eyes of the world.
– These duties are part of the rehabilitation plan.
– They were never part of it. Circumstances are entirely different from those which existed when these special duties were imposed. At that time the rate pf exchange was slightly above par. Now that the need for these special duties has passed, the whole position should be reviewed, and with that end in view, I move -
That in view of thu altered circumstances since these special customs duties were applied, they be referred to the Tariff Board for report.
The TEMPORARY CHAIRMAN.There 13 already an amendment before the Chair.
– As I have already explained to the committee, the amendment referred to by the Temporary Chairman is that moved on the 23rd July, dealing with beer and stout. I hope that it will be agreed to. I cannot accept the amendment foreshadowed by the honorable member for Balaclava (Mr. White) to refer the whole matter to the Tariff Board. Parliament must decide the question. The Government must accept the responsibility.
– The Minister must not discuss an amendment which is not before the Chair.
– In the course of his speech the honorable member for Balaclava said that these surcharges minimized the degree of preference given to Great Britain. If the honorable member will turn to the memorandum on page 12, he will see that in the case of motor car bodies, the protection to Great Britain has been increased from 40 per cent, to 60 per cent. As to the duties on chassis, instead of being 5 per cent., 35 per cent., and 45 per cent., British, intermediate and general, respectively, the surcharge of 50 per cent, has increased them to 7£ per cent., 52£ per cent., and 67^ per cent., respectively. It is amusing to hear the critics of the Government speaking with different voices regarding the effect of these duties. Some of. them say that the duties will make no difference whatever, because a restriction of imports would have been brought about by the rationing of credits by the banks, while other honorable members of -the same party say that these duties have increased unemployment. The Opposition cannot have it both ways. The fact is that these duties have minimized unemployment; had it not been for them many thousands more of our people’ would now be out of work. The items were carefully selected by the Government, and they have also been subjected to the most careful scrutiny by officers of the department, as well as by the Tariff Board which was called into consultation. The Tariff Board was asked for suggestions as to items which might be eliminated or new items which might be inserted. The schedule contains a number of luxury lines which can” be manufactured in Australia or done without. Although Australia produces large quantities of dried fruits, it imported from other countries considerable quantities of dried fruits before these duties were imposed. Now the importation of dried fruits has been prohibited.
– What about onions?
– Prior to the imposition of these duties, we imported large quantities of onions, yet we have difficulty .in finding a market for those grown in Australia. As a result of representations made by growers of oranges and lemons in the Macquarie electorate, the importation of oranges and lemons has been prohibited, and Australian fruit-growers have benefited accordingly. The same may be said of pork, milk, and other commodities. The honorable member for Gippsland (Mr. Paterson) said that there was nothing wrong with having an adverse trade balance.
– I said that an adverse trade balance was not necessarily wrong.
– The previous Prime Minister (Mr. Bruce) was in the habit of endeavouring to justify the orgy of extravagance in which bis Go- vernment indulged. He said that there was nothing wrong in borrowing £40,000,000 a year and, in addition, importing goods valued at £150,000,000. But the end df that orgy had to come. The present Government, and, indeed, the nation as a whole, is reaping the harvest that was then sown by a government whose reckless Treasurer was the leader of the party lo which the honorable member for Gippsland belongs. The honorable member referred to the United States of America. I remind him that that country and Great Britain differ from Australia in that they are creditor nations.
– At the time to which I referred, the United States was not a creditor nation.
– These countries have huge investments abroad on which interest is earned. When the United States of America erected a high tariff wall against articles which competed with its
Own products it received payment in gold. The result is that that country now holds over one-half of the gold of the world, and does not know what to do with it. The honorable member for West Sydney (Mr. Beasley) deplored the policy of prohibiting imports, on the ground that it adversely affected Australian wharf labourers. To follow that lo its conclusion we should wipe, out our secondary industries and import everything. The result, however, would be the unemployment of nearly 500,000 persons engaged in our factories. The late Government encouraged imports to such an extent that many additional men were recruited to the waterfront, so that when the time came when we could no longer pay for imported goods, there was a surplus of labour on the waterfront. That labour will have to be absorbed in other avocations, as will also the 200,000 workers who were kept in employment by reason of the expenditure of loan moneys. As they cannot all be absorbed in primary production, seeing that our primary producers are already experiencing difficulty in finding markets for their products and many lines are already overproduced, they must be absorbed in secondary industries. The Government is seeking new avenues of employment. In the tobacco-growing industry there is scope for the employment of a good number of workers in growing the tobacco for which we previously paid £3,000,000 a year to the United States of America. The Government has laid the foundation on which a number of secondary industries can be built. It is wrong to say that protection has failed. The growth of unemployment is due, not to our policy of protection, but to the fall in our national income by £200,000,000 a year because of the lower prices now obtaining for our staple primary products and also because of the reduced purchasing power of the people. I ask what would have happened had these duties not been imposed, seeing that prices have fallen in other countries? But for the duties, many of our secondary industries would have had to close down altogether.
The honorable member for Warringah (Mr. Parkhill) said that an exchange rate of 30 per cent, was a sufficient restriction on imports. The Government, after consulting with a number of leading bankers, realized that a curtailment of credits by the banks was not sufficient to restrict the importation of luxury lines, and, therefore, it decided to put into effect a scientific restriction of imports. Previously, numbers of people were obtaining credit overseas by selling wool and other Australian products, and purchasing motor cars and other luxury lines with the proceeds. The banks admitted that they could not restrict such action.
– Several shipments of wool were exported in that way.
– That is so. I know of an instance in which a man sold out his interests in Australia and purchased wool to the value of thousands of pounds, and established credit for himself in London by selling it there.
-Was he a politician ?
– No. I do not know of any politician who could indulge in such huge transactions. The Government’s action affects luxury lines, which would not be hit by a restriction of credits. The honorable member contended that the exchange rate was a sufficient protection in itself. I remind him that when the
Government took action to restrict: imports, the exchange rate was more favorable than if, is now. In April of last year, the exchange rate was about 8 per cent.; by February of this year it had risen to 30 per cent. These restrictions on imports were imposed nearly twelve months previously.
However politically biased honorable members may be, they must admit that, whereas in 1929-30 Australia had an adverse trade balance of ?3.2,000,000, it had a favorable trade balance of over ?28,000,000 in 1930-31. Since Australia has to find an additional ?9,000,000 per annum for exchange and other charges in London, making a total of over ?30,000,000 a year, it will be realized that the time has not yet arrived for taking ofl the surcharge. This is only a temporary expedient, and the Government must bc the judge of the time when it should be lifted. Sitting suspended from 6.1^ to S p.m.
The CHAIRMAN (Mr. McGrath).The honorable member for West Sydney having given notice of an earlier amendment., .1 propose to ask honorable members to consider it before dealing with that submitted by the Minister.
Amendment (Mr. Fordes) temporarily wi thd raw: i .
. I move
That thu words “ the rate of fifty per centum “ be omitted, with a view to insert in lieu thereof the words “a rate determined each month in accordance with the balance of trade “.
– The amendment is so indefinite that I cannot accept it. Further, its effect may be to increase the revenue, and a private member may not submit an amendment to do that.
– The Minister stated that the object of the surcharges of 50 per cent was to correct the adverse trade balance, and he has submitted evidence that this has been largely corrected.
– Duties determined in the manner suggested by the honorable member would, in all probability, lead to au increase of revenue as the result of a larger volume of imports.
– I submit, Mr. Chairman, that on the information given by the Minister, that position is not likely to arise.
– -out the Minister’s statement is only a statement of opinion.
– I take it that the figures quoted by the Minister were supplied from authoritative sources and, as such, they must be accepted. The Minister has had an opportunity to test the accuracy of the information placed at his disposal for the purpose of determining the rates of duty to be’ imposed, and I contend that, as all the evidence points to an improved trade balance, my amendment should be accepted.
– It is too indefinite.
.- I move -
That the word “ fifty “ be omitted with a view to insert in lieu thereof the word “ five “.
There is no justification whatever for these extraordinary special duties of 50 per cent. Prior to these increases, the duties imposed on dress-making material and millinery were worth ?1,905,000 per annum to the industry if it took full advantage of them, yet the wages and salaries paid in the industry totalled only ?1,507,000. Since then the Minister has trebled the tariff on such articles. Under the old rates the duties on hats and caps were worth ?637,000, yet the total of wages and salaries paid in the industry was only ?622,000. Similarly, the duties on shirts, ties and underclothing were worth ?2,209,000, yet the salaries and wages paid in the industry were only ?1,547,000. These figures, I again remind the committee, relate to customs collections on the items enumerated prior to the trebling of the duties by the Minister in this most arbitrary manner. Apparently also the Government was so “ flush “ of money that it could afford to dispense with revenue amounting to ?119,000, obtained from the duty on matches, because the Minister imposed an embargo on the importation of matches and, so far, has not made any attempt to get anything by way of excise duties from the local manufacturers who are profiteering on the community.
– The cost of clothing has not been increased as a result of these higher duties.
– But some dreadful things are happening in the clothing industry. If the honorable member cares to study the history of the clothing industry in Victoria from 1890 to 1897 he will be amazed at the conditions then obtaining. The Melbourne Age has f from time to time graphically described the sweating that took place, and the dreadful condition of the workers under the high tariff policy of the Victorian Government. And only a few days ago the Deputy Leader of the Opposition (Mr. Latham) directed attention to the sweating that was reported in the clothing industry in Melbourne, and the Prime Minister has called for a report upon the subject. Many people who advocate these excessive duties forget that, in the long run, the public have to pay. If the, honorable member is satisfied with the embargo on certain classes of agricultural machinery and with these special duties on metals and machinery, I am not.
– The honorable member would never be satisfied with any measure of protection for secondary industries.
– I represent a great number of people who have shown sufficient courage to go into our outback country to develop new areas, and in that way build up the wealth of Australia. These people are doing something to provide employment for the workers of this country, and yet the tariff policy of this Government is absolutely destroying what chance they might have of being successful.
– Is it not a fact that agricultural machinery is cheaper to-day than it was prior to the imposition of “ these special duties ?
– Any person with common sense will admit that in 1920 production costs all over the world were abnormally high. But I invite the honorable member to consider the cost of agricultural machinery in 1913 and compare it with present-day costs. In Germany manufacturing costs are now lower than in pre-war days, and the cable news of yesterday reported that costs in Great Britain had dropped to 98 per cent, in comparison with 1913 figures. In protesting against these excessive duties I have in mind particularly the hardship which they inflict upon the poorer sections of the community. Surely no one will attempt to justify the trebling of the duties on clothing. In addition to the high rates obtaining prior to the imposition of these special duties there is a natural protection of 30 per cent, representing the adverse exchange. We were told, when these duties were brought down, that their special purpose was to correct the adverse trade balance.
– And that is being done.
– But at what cost? Unemployment is now widespread throughout the Commonwealth.
– Commodities affected by these special duties are cheaper now than before the duties were imposed.
– But wages in industry are lower, and they are likely to recede still further, because, unfortunately, there are so few buyers and so many people are being thrown out of employment in a number of industries in order to provide special conditions for a favoured few. No one can persuade me that the special duties on matches are justified. Their only effect has been to increase greatly the cost of matches in every household. This may be a small item, but it is one of hundreds to be found throughout the tariff, in which there have been extraordinary increases. The Government is losing well over £100,000 a year in customs revenue on matches alone, merely to give a concession to a few firms. Can any honorable member tell me how many Swedes are associated with the match industry in Australia? A somewhat similar position developed in connexion with the duties on galvanized iron. Because £500,000 of the “shares in Lysaght Limited, Newcastle, is held by John Lysaght, Bristol, as payment for the use of trade marks, brands and processes, the Minister was persuaded that the duties on galvanized iron should be high enough tq ensure to that concern an adequate dividend on the excess capital, and, unfortunately, honorable members supporting the Government appear to be only too anxious to look after the interests of these manufacturing concerns, so many of which are exploiting the .people. I hope, however, that the committee will realize that the Government has already gone too far with its protectionist policy, and that in this matter it will clip the wings of the Ministry by voting for my amendment.
Question - That the word proposed to be omitted (Mr. Gregory’s amendment) stand part of the question - put. The committee divided. (Chairm an - Mr. McGrath.)
Majority . . . . 11
Amendment (by Mr. Forde) restated and agreed to.
Motion, as amended, agreed to.
Resolution reported; Standing Orders suspended and resolution adopted.
Motion (by Mr. Forde) agreed to -
That Mr. Forde and Mr. Scullin do prepare and bring in a bill to carry out the foregoing resolution.
Bill brought up by Mr. Forde and read a first time.
Motion (by Mr. Forde) proposed -
That the bill be now read a second time.
.- I move -
That all the words after “be” be omitted with a view to insert in lieu thereof the fol lowing words, “ withdrawn and that in view of the altered circumstances, the question of special customs duties be submitted to the Tariff Board for consideration and report “.
These prohibitions and super-charges were imposed when the exchange rate was about at par, for the purpose of correcting our adverse trade balance. That has now been done, but the duties have incidentally created much unemployment, besides dislocating industry, and upsetting business. Therefore, the whole subject calls for investigation and report by the Tariff Board, which should be called upon to recommend what items ought to be prohibited, and whether the 50 per cent. surcharge should continue to apply to any of them.
.- I cannot accept the amendment of the honorable member for Balaclava (Mr. White). These items were carefully selected, first by the officers of the department in consultation with the Minister, and secondly, by the Tariff Board, which was asked to come to Canberra for the purpose. We spent a whole day going into these matters with the board. I feel sure that it would be only a waste of time to refer them to the board again. The matter is urgent, and we wish to have the duties ratified.
– If this amendment will satisfy the condition I have previously laid down concerning the waterside workers, I amprepared to support it. These special duties were imposed for the purpose of correcting our adverse trade balance. According to figures supplied to this House, the trade position has, to a large extent, been remedied, and the necessity for these duties no longer exists.
– The necessity still exists, and will probably continue for at least another twelve months.
– The duties cannot be justified now when we consider the grounds submitted by the Minister when they were imposed. From my point of view, this matter resolves itself into one of employment. Those whom I directly represent in this Parliament have been adversely affected by these special duties, and I am seeking an opportunity to lighten their burdens in some small measure. That may seem to some honorable members to be a selfish attitude, but we in this House are the direct representatives of specific areas, and it is our duty to watch the interests of those living in such areas, and also, of course, to conserve the interests of the country as a whole. The condition of some of those whom I represent could not be worse, and for this the duties we are now ‘ discussing are largely responsible. As I pointed out before, it would not be so bad if the men for whom I am speaking had been absorbed into secondary industries when they lost their employment on the waterfront, but this was not possible, because credit was not made available to develop these industries and provide employment. The power to make credit available has been allowed by the Government to remain with the banks, which saw fit to adopt another policy than, that of stimulating secondary industries. Since those of my constituents who have been affected have obtained no relief because of the failure of the expansion of secondary industries, I regard . it as my duty to do what is possible to secure the removal of these duties. Their removal is vitally necessary to those engaged in waterside occupations. The Minister said that the prosperity enjoyed in recent years drew to the waterfront a great many workers who might otherwise have been profitably engaged in other occupations. That may be true, but it is also true that hundreds, and even thousands, of the original waterside workers are now denied the opportunity of securing employment in their former occupations. That also applies to those engaged in various branches of the transport industry associated with the waterfront. The policy of the Government has been one of protection for our secondary industries, and the removal of these special imposts does not’ interfere with that policy because the goods affected are not manufactured in Australia. As these impositions rebound to the detriment of workers, whom I represent, and who are in need of assistance and, as the amendment before the House provides for an investigation that may result in the correction of this existing evil, and will probably help those who badly need help, I shall support it.
.- If the mover of this amendment could give honorable members some idea of what he expects to have revealed, I might feel inclined to support it.
– There are some items in the list which ought not to be prohibited.
– The number is very small. The figures giving our importations for 1930-31 do not bear out the contentions of the honorable member.
While I do not doubt that the honorable member for West Sydney (Mr. Beasley) has some legitimate grounds for his argument, I submit that his attitude on this matter is an ultra-selfish one. What is to happen to those who are now employed in different factories if we allow unlimited importations of these commodities into Australia? Although wharf labourers may represent a fair number of our great army of unemployed, I believe no good could be served by throwing additional men out of employment, and so swelling that army. The honorable member had an opportunity to correct this evil two years ago, when he was a member of the Government. Time after time it was pointed Out that the Government should endeavour to absorb the production of the country by providing employment. This Government was returned to power to introduce an effective tariff, and it is putting its policy into force. Other governments were afraid to grasp the nettle, and give our industries proper protection. I invite honorable members opposite to take these items one by one, and give some valid reason why any should be excluded. It could not be done. Every member of the Country party should be behind this action of the Government, which benefits primary producers in addition to those in our secondary industries.
– There is something wrong when tallow is included in the list.
– It is the policy of the Government to encourage the manufacture of as many commodities as possible in Australia. The honorable member attacked our match industry, declaring that it is capitalized with Belgian money. I suggest that he should endeavour to ascertain the source of the capital of a number of other concerns in Australia,
The matches manufactured in the Commonwealth are a credit to the country. Is it not better to have them turned out under white Australian conditions than to revert to the barbarism of sweated labour that obtained in Victoria years ago ? And that was not the result of any tariff. It was brought about by the inherent desire of capitalists to get labour as cheaply as possible, and to treat human beings as part of their machinery plant.
– Those conditions exist in Melbourne even now.
– If the Government can find out who is responsible for them they will quickly be ended. The honorable member and his colleagues were out to scrap arbitration so that their friends might have an open go in the economic ring. Heretofore those people have won the day because they had a shoe in the glove. In a fair, open go, the workers would put them “ out “ in two rounds. No other country in the world has better workers than those to be found in Australia. Unfortunately, for many years a coterie of capitalists dominated this and other Parliaments, and nobodydared defy them. The honorable member for Balaclava (Mr. White) indicated that the existing rate of exchange caused much of our trouble. That rate is not the outcome of normal trading. It went up by leaps and bounds because capitalists bought up all the English credits that they could in order to get their money out of the country. That is why we are. paying some £10,000,000 per annum more than we should.
– Their action in leaving the country shows what they think of this Government.
– It indicates their mean, anti-Australian attitude. They made their money in Australia, and they should have the decency to support the country in a time of stress.
I worked in a factory in the bad old sweating days, and can tell of the awful conditions to which human beings were subjected. I have witnessed the progress of industrialism until now workers have earned for themselves the right to a place in the sun. It was not granted to them voluntarily by the capitalists. Every little advantage had to be wrested from the employers, as the result of careful organization and self-denial. Now Labour dominates this and other Parliaments, and it has been able to place enlightened laws on the statute-book.
The Tariff Board should not have the right to determine the policy of the Government. It should be our object to bring about a self-contained Australia. We should import only those articles that cannot be produced here.
– They certainly can be produced - at a price.
– The honorable member for Swan (Mr. Gregory) referred, in his speech, to the prices charged for kiddies’ dresses. Would they be any cheaper if we had an open economic ring? Of course not. The capitalists would corner the market, as they always do, and fix their own price.
I am glad that the Government is doing something which it was elected to do. I hope that before long it will take courage and carry out its complete policy. Then a few bank managers and financiers will no longer be able to determine what shall be done. I direct attention to the appalling conditions that exist at La Perouse. On the one side, blacks; on the other, whites. I admit that the blacks have every right to be there. The country is theirs. The whites, too, have a right to a proper existence. Those people have built up the country just as much as have our pioneers. Unf ortunately, the land has been “ soonerized “, and the “ soonerizers “ will not get off it : They hold more ground than they need. I look forward to the day when there will be a re-distribution of holdings, and God’s law, that every man has a right to live, given effect.
– Will they have any greater right to live if this amendment is not carried?
– The action of the Government will prevent undesirable importations. Even in this House I have seen pencils stamped “Made in Czechoslovakia “.
– That is no reason why the Government should defend employers.
– I defend the Government when I think it is doing the right thing, as in this instance. The honorable member should do likewise.
– The policy of the Governmentis throwing men out of employment every day of the week.
– Statistics irrefutably prove the contrary. When the honorable member for Corio (Mr. Lewis) was speaking, an honorable member declared that he had not done any productive work during his life. Certainly very few honorable members opposite have. Personally, I worked in a factory for seventeen years, after which I went forwarding, then became traveller, and later “counterskipper “, all with the one firm ; so that I know how business is carried on. This Government is certainly rectifying an evil, but the only real solution of the problem is to place our people on the land. I have watched the progress of this country from the time when we were told that if we were not satisfied with the laws of the land we should enter politics. One of the first actions taken in South Australia under Labour rule was to break up the big estates for the purposes of closer settlement ; but now, when a large estate is cut up, the blocks are purchased by those who already have more land than they require. Men in South Australia who obtained land under the soldier settlement scheme are snowed under by the values at which the land had to be purchased.
Motion (by Mr. Thompson) negatived -
That the questionbe nowput.
– I shall not pursue the subject further at this stage, but I can assure the honorable member for New England (Mr. Thompson) that I shall not forget his action this evening.
Question - That the words proposed to be omitted (Mr. White’s amendment) stand part of the question - put. The House divided. (Mr. Speaker - Hon. Norman Makin.)
Majority . . . . 10
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 5 agreed to.
.- This clause provides that duties imposed pursuant to the customs tariff proposal introduced on the 3rd April, 1930, shall be deemed to have been lawfully imposed. A period of eighteen months has elapsed since the imposition of these duties. In September, 1929, or over two years ago,, large increases in duty were imposed, and even now, those proposals must be passed by the other branch of the legislature before they become law. For over two years heavy imposts have been placed upon the people, without parliamentary approval, and I contend that the practice is utterly wrong. I hope that, in the near future, the law will be amended so that duties will not be effective until they have received parliamentary approval, as is the position in the United States of America, or unless they are approved within 90 days. We have before us a list of embargoes on over 80 items. It was never intended that the Minister should have power to say that Australia shall not trade with other countries. I am not discussing the merit of any particular duty ; I am merely contending, on broad principles, that tariff imposts and embargoes should not operate until parliamentary approval has been obtained.
Clause agreed to.
Clause 7 agreed to.
Schedule and title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
– I move -
That in addition to the duties collected in accordance with -
the schedule to the Customs Tariff 1921-1930 as proposed to be amended by Customs Tariff proposals ; and
the resolution introduced into the
House of Representatives on the nineteenth day of June, One thousand nine hundred and thirty, imposing special duties of customs or that resolution as subsequently amended ; and in lieu of the primage duty specified in the resolution introduced into the House of Representatives on the tenth day of July, One thousand nine hundred and thirty-one, there be imposed on and after the fifteenth day of October One thousand nine hundred and thirty-one, at nine o’clock in the forenoon reckoned according to standard time in the Territory for the Seat of Government, ad valorem duties of customs (in this resolution referred to as primage duty) at the rates hereunder set out on the undermentioned goods which are entered for home consumption on and after the said fifteenth day of October One thousand nine hundred and thirty-one, except such goods as are hereunder specified as being exempt from primage duty -
Goods exempt from primage duty -
goods covered by items 368, 370, 371, 372, 373, 400, 401, 409 and 423 of the Customs Tariff 1921-1930 as proposed to be amended by Customs Tariff proposals;
agricultural and horticultural seeds not covered by any item in the Customs Tariff 1921-1930;
Bibles, and the New Testament; bullion and specie; bags sacks packs and bales for bran, chaff, potatoes, onions, coal, corn, flour, sugar and wool; calico and hessian for use in the manufacture of bags of a size capable of holding at least fortyfive pounds of flour; fruit wrapping paper admissible under item 334 (c) (2) of the Customs Tariff 1921-1930; manures and fertilizers; materials for use in the manufacture of agricultural horticultural and viticultural spraying preparations; materials for use in the manufacture of cornsacks floursacks and other sacks ; nitrate of soda, for use as a fertilizer or in the manufacture of fertilizers ; potash, for use as a fertilizer or in the manufacture of fertilizers; outside packages and outer coverings, including the sole containing package, containing solely goods exempt from primage duty; radium ; rock phosphate; and sulphur ;
any other goods which are from time to time exempted from primage duty by Proclamation made by the Governor-General with the advice of the Federal Executive Council and published in the Gazette.
Goods subject to primage duty at the rate of four per centum ad valorem - (a.) goods covered by items 174, 219 (n), 404 and 415aof the Customs Tariff 1921-1930 as proposed to be amended by Customs Tariff proposals ;
books and periodicals imported for public libraries; calcium cyanide; cream separators; fibres for use in the manufacture of binder twine; fuel oil and coal consumed in Australian waters; goods for public hospitals; newsprinting paper; outside packages and outer coverings, including the sole containing package, containing any goods subject to primage duty at the rateof four per centum ad valorem but containing no goods subject to primage duty at the rate of ten per centum ad valorem; potassium cyanide ; power kerosene; rock salt; sheep shearing machines; soda ash, caustic potash and causticsoda, for fellmongering purposes; sodium cyanide; stud stock; and vessels exceeding 1,000 tons gross register ;
any other goods which are from timeto time, by Proclamation madeby the Governor-General with the advice of the Federal Executive Council and published in the Gazette, added to the list of goods upon which primage duty at the rate of four per centum is imposed.
Goods subject to primage duty at the rate of ten per centum ad valorem -
All goods whatsoever, which are not, in pursuance of the foregoing provisions of this resolution -
exempt from primage duty; or
subject to primage duty at the rate of four per centum ad valorem.
That where by this resolution any goods are exempt from primage duty or are subject to primage duty at the rate of fourper centum ad valorem, on the condition that those goods will be used for a purpose specified in relation thereto in the resolution, the ComptrollerGeneral of Customs may require security that those goods will be used for the purpose so specified.
That in this resolution “ Customs Tariff Proposals “ means the tariff proposals introduced into the House of Representatives on the twenty-sixth day of March, One thousand nine hundred and thirty-one, and includes any amendment of such proposals and any tariff proposal introduced into the House of Representatives subsequent to that date.
This motion is designed to give effect to the Government’s desire to remove certain disabilities under which primary producers have been labouring, because of the imposition of primage duty on bran, onion, potato, and ore bags. These goods are being added to the list of goods exempt from the payment of primage duty. Under the primage resolution of the 10th July, 1931, such bags were specially included as being subject to primage duty at 4 per cent., and the most convenient way to give effect to the Government’s intention is to table a new resolution. Under the provisions of this motion “ bags, sacks, packs and bales for bran, chaff, potatoes, onions, coal corn, flour, sugar and wool “ will be exempt from primage duty.
Following on a recent decision of the Government, Bibles and the New Testament have also been included in the list of goods exempted from primage duty.
The opportunity is also being taken to include in the resolution the variations made by proclamation to the resolution tabled on the 10th July, 1931. The following minor alterations have also been made to give better effect to the intention of the previous resolution: - The words “ agricultural, horticultural and viticultural “ have been added before “ spraying preparations “, and the word “ sheep “ has been inserted before “ shearing machines.” Apart from these additions and exceptions the resolution is similar to that previously tabled.
The primage duty was increased to 10 per cent. on the recommendation of the experts who were consulted in connexion with the financial rehabilitation plan agreed to at the Premiers Conference.
– Some of the experts recommended the increase, but not Messrs. Pitt and Strutt.
– Practically all the experts agreed to this recommendation. The Government expects to receive £4,250,000 in additional revenue in the current financial year through the imposition of the extra primage duties, but if the numerous requests made for exemptions were acceded to, there would be practically no increase in revenue. Every day new applications come to hand f orexemptions from this duty of articles upon which the taxation is at present being collected. The Government’s experience in regard to primage duty has been similar to that in regard to sales taxation. Everybody can make out a good case for the exemption of the particular lines which he handles, but the exigencies of the financial situation are such that, although sympathetic consideration has been given to all the requests made for exemptions, many of them have had to be rejected. I regret to have to inform honorable members that no additional exemptions can be granted.
If the Government is to honour the undertaking given by the Prime Minister and the Treasurer at the Premiers Conference, it must insist on the resolution being agreed to in its present form. The line’ of demarcation between goods exempt and other goods is no doubt somewhat arbitrary, but it is necessary to adhere to it, otherwise there will be a serious diminution of revenue.
Preliminary matter postponed -
Goods exempt from primage duty - (a)…..
.- I move-
That the following item be inserted: - “Fibres for use in the manufacture of binder twine “. “Fibres for use in the manufacture of binder twine” are at present included in the list of goods on which primage duty is imposed at the rate of 4 per cent. This seems to me to be an oversight. As bags, sacks, packs, and bales are exempt from this duty, it is reasonable and consistent that the twine used for sewing them should also be exempt. It has been recognized by the Government that every assistance should be given to primary producers, particularly in regard to the provision of containers for their produce, and there is, therefore, every justification for removing “ fibres for use in the manufacture of binder twine “ from the 4 per cent. list, and placing them on the free list.
.- The Government has given very careful consideration to the compilation of the lists included in the motion, and it has also sympathetically considered every application made for exemption from primage duty. I think every impartial honorable member will realize, if he examines the lists, that a great deal has been done to assist the primary producers. We should very much like to enlarge the free list; but, as I have already pointed out, it is essential that we shall obtain sufficient revenue to enable us to carry out the undertakings that have been given to the Premiers Conference. I regret, therefore, that I am unable to accept the amendment.
.- Although “bags, sacks, packs, and bales for bran, chaff, potatoes, onions, coal, corn, flour, sugar, and wool “ are on the free list, bags and sacks used for the marketing of many other articles may not be exempt. I am afraid that the Commissioner of Taxation may rule that only bags and sacks used’ as containers for the commodities specified in the resolution will be exempt from this duty.
– I rise to a point of order. I should like to know whether the honorable member for Darwin (Mr. Bell) intends to move an amendment?
If he moves an amendment in regard to bags, sacks, packs, and bales, will it preclude another honorable member from moving an amendment to any preceding item in the list?
The TEMPORARY. CHAIRMAN (Hon. R. A. Crouch).- I shall follow the usual practice, and ask the committee to agree to the motion in sections.
– I suggest that it would be desirable for us to make a general provision for the exemption of bags, sacks, packs, and bales used as containers for produce. I point out that bags are used for pollard and turnips and many other things. Unless these commodities are specifically mentioned, or the provision is passed in more general terms, the primary producers may be obliged to pay duty on their sacks.
– I assure thehonorable member that sacks for pollard will be free of duty. The provision is intended to cover sacks and bags purchased for use for the purposes mentioned by the honorable member, and they will be exempt from this duty.
Bibles and the New Testament.
.- Included in the list of goods exempt from primage duty is the item “ Bibles, and the New Testament “. That is rather ambiguous, because the Bible comprises the Old and the New Testaments, and if the New Testament is mentioned separately from the Bible it would appear that the only portion of the Bible that would be exempt would be the New Testament. If the item were amended to read “ The Bible or any portion thereof “ it would give the British and Foreign Bible Society, and other similar organizations, an opportunity to import portions of the Bible free of primage duty. I understand that it is the intention of the Government to admit any portion of the Book free of primage duty.
– If the honorable member will move to amend the item to read “ Bibles, or any portion of a Bible “, I shall accept it.
– I move-
That the words “ and the New Testament “ be omitted with a view to insert in lieu thereof the words “ or any portion of a Bible “.
– I accept the amendment, and assure the honorable member that no portion of the Bible will be liable to primage duty.
Amendment agreed to.
Bullion and specie.
.- Under this resolution bullion and specie are exempt from primage duty, but there appears to be an obvious anomaly. Gold is exempt from primage duty, as also is gold containing platinum. Platinum is not produced in any quantity in Australia, and is subject to 10 per cent, primage duty. Gold containing platinum can be imported for dental purposes in 3 dwt. portions, free of primage duty. There is, therefore, unfair competition between Australian makers of dental gold and those using gold containing platinum, the former ‘ having to pay a primage duty of 10 per cent, on the platinum so imported. The matter should be cleared up. one way or the other. Gold containing platinum should bear a 10 per cent, primage duty or platinum should be placed on the exempt list. Those using gold containing platinum on which a 10 per cent, duty is imposed on the platinum cannot compete with those who have no such duty to pay. I move -
That after the word “ specie “ the words “ also platinum “ be inserted.
.- Platinum is produced in Australia, and I understand that the miners engaged in the production of this metal at Highfield have experienced considerable difficulty in finding a market overseas for a considerable portion of that exported. The price has been considerably reduced during the past eighteen months owing to the lack of demand.
– If the honorable member for Calare (Mr. Gibbons) is correct in his assertion that those producing platinum cannot find a ready market for their product, the commodity should not be placed on the exempt list, but I doubt that such is the case. If the Minister cannot accept the amendment moved by the honorable member for Balaclava (Mr. White), will he adopt some other means to overcome the difficulty ? It would appear that regulations are sometimes framed to meet the peculiarities of importers who wish to evade the payment of duty. I ask the Minister to see if some subterfuge is not being indulged in in order to have this metal placed on the exempt list.
.- I regret that I cannot accept the amendment moved by the honorable member for Balaclava (Mr. White). Platinum is used chiefly by dentists and jewellers who, I do not think, are in need of relief in this direction. A number of other requests have been refused, and if the word “ platinum “ were inserted it might be held that jewellery in which platinum is used was also covered. As only £10,000 worth is imported annually, it would mean giving relief to the extent of only £1,000 a year which, in view of all the circumstances, is not worth worrying about. It is not likely that any dentist will go out of business if platinum is not placed on the exempt list.
.- I ask the Minister (Mr. Forde) to indicate if he is willing to include books on the exempt list. The position generally is that the booksellers in Australia are in a very precarious position as a result of the imposition of this and other duties. They are compelled to rely upon overseas sources for their supplies, because, in the main, the books used most extensively in Australia are not produced in this country. In view’ of the customs and primage duties, and sales tax, as well as incidental charges, 70 per cent, of the value of books has to be added before they can be offered for sale. Any one who knows anything of the bookselling business will realize that this is a severe impost upon the intellectual and .book-reading section of the community. The net result of this and other imposts is that the booksellers -have had to increase their prices to the reading public, which has been correspondingly penalized. These duties have also resulted in increased unemployment.
– How many people have been affected?
– I cannot say; but I can definitely state that a number of persons in the capital cities have lost their employment because of the diminished trade in the bookselling business. The importation of books has dropped to such an extent that the revenue has also been seriously affected. This proposal has the support of those who are in a position to speak with authority on the subject. We are dealing with the food of the nation’s mind. In considering this subject the Tariff Board said - . . that the extra duty would actually be a tax on the acquisition of knowledge.
The board also stated its conclusions in the following recommendations: -
The board is emphatically of the opinion that to place a duty upon books or periodicals would be seriously detrimental to the best interests of Australia, for the following reasons : -
The increased employment in the printing industry would be but slight;
The dislocation of the bookselling trade would be severe, and must result in considerable unemployment, probably far exceeding any additional employment which might arise from the imposition of the duty;
The imposition of the duties sought would, of course, result in gain to the revenue. Against any such benefit, however, there would be the serious difficulties in the administration of the suggested exemptions which would, without doubt, present themselves;
The inevitable increase in the price of books would make the gaining of knowledge more difficult, and would be a definite tax on the acquisition of such knowledge;
Scarcely any single action that the Commonwealth could take in connexion with the tariff would cause more resentment and misunderstanding in the United Kingdom.
– Those findings relate to ordinary import duties.
– That may be so; but they apply with equal force to primage duties. The importance of this matter does not need stressing. I wish, however, to make one or two observations in support of an amendment by moving which I propose to conclude my speech. The list of exemptions from sales tax does not include such items as bacon, hams, bread, and a number of other articles of diet. If we can exercise that gustatory discrimination, we ought to be able to make an equally discriminating selection in connexion with food for the mind.
– By what means?
– By means of the amendment that I propose to submit to the committee.
I have given in the main the points that I wished to stress. I sum up by saying that this duty on books greatly increases their cost; actually the increase has been over 70 per cent. As the Tariff Board has reported, it provides very little extra work for printers, and- on the other hand has actually deprived many booksellers of their living. It substantially reduces the possibility of Australian authors placing their works ahead, and in addition prevents Australia from being given, by one of the most effective means available, that world-wide publicity which it needs. If it were so disposed, the Government could amend the schedule of duties so as to secure the ends that I have in view. By so doing, it would give relief in circumstances that very definitely call for relief, without interfering with the mental food of the people of this nation. I move -
That the following item be inserted: - “ books, other than fiction “.
– I support the proposal of the honorable member for Darling Downs (Mr. Morgan). This is a reasonable proposition, and it would not involve the Government in any considerable sacrifice of revenue. I would not argue the matter if I thought that it would do so. I realize, of course, that the principal objective of the Government is to obtain revenue, so as to give effect to the agreement arrived at by the conference of Commonwealth and State Ministers, and that otherwise a duty would not have been imposed on many of these items. But ought not our educational facilities to be given due weight by the Government ‘( While books and periodicals that are imported for public libraries are permitted to come in at the rate of 4 per cent., school books, which are equally deserving of consideration, have to carry the higher rate of duty. That is a direct impost upon education. The Minister would have every justification for including them in the list of exemptions. Thi.tax, in conjunction with sales tax and exchange, makes the importation of book1 prohibitive. A book that formerly could be purchased for 10s. or 12s. 6d. costs to-day considerably over £1. It cannot make for the welfare of this country that books which are in circulation in other countries should be prevented from coming here, and enlarging the knowledge of our people. As the honorable member for Darling Downs has pointed out, the Tariff Board, in a most exhaustive and valuable report that has as its basis the evidence of university professors, and of practically every educational society in Australia, has expressed the view that a tax on books is a tax on education, and that it places upon the people of this country a disability that is not borne by the people of any other country in the world. We should not add to our other distinctions by making costs so prohibitive that technical, school, or rare books cannot be introduced into Australia. I invite the Minister to give this matter sympathetic consideration.
– I have listened with interest to the representations that have been made in regard to the duty on books. Those representations had already been placed before me by letter and deputation, and I assure honorable members that I and the Government are entirely sympathetic towards them.
– Why not give your sympathy practical expression?
– The spirit is willing, but the pocket would not stand it. The value of the importation of books and periodicals for 1929-30 was £1,265,000.
– Can it be shown what percentage was fiction, and what other works ?
– It is quite impossible to make that distinction. With imports amounting to £1,000,000 annually, the revenue that would be lost by the removal of the primage duties would be £100,000 per annum. Unfortunately, tbe Government cannot afford to forgo such a large sum. The honorable member for Darling Downs (Mr. Morgan) has quoted from the report of the Tariff Board. That board reported with respect to a protective duty, which is very different from this duty. If the protective duty that was sought by certain printers and publishers were granted, it would make the importation of books practically impossible. Primage is purely a revenue duty.
– But it has increased the price by 70 per cent.
– Exchange has increased the price to a three times greater extent than the primage duty. The honorable member for Warringah (Mr. Parkhill) cited the case of a book costing 10s. The addition of 30 per cent. to that figure would raise it by 3s. 4d., whereas the primage would amountto only about 1s. 4d. It is true that sales tax, also, has to be added. Many of the arguments that have been used by booksellers with a view to showing that the primage duty has been responsible for the falling off that has taken place in the sales of books, are fallacious. The depression has hit the bookseller probably more severely than any other business man. Thousands of persons who formerly spent pounds annually in the purchase of books have had to curtail their expenditure in that direction.
– Is that not a good argument for loosening up in regard to duties? Mr. FORDE.- In the case of books and periodicals that are imported for public libraries, the duty remains at 4 per cent. I believe that booksellers generally would be satisfied if that rate were applied to all books. The Government would like to do that, but finds itself unable to do so. It must raise the necessary revenue to carry out the decision of the Premiers Conference, to approach as closely as possible to the balancing of the budget without making any further cuts in essential services; consequently, it must adhere to proposals that bring in such substantial sums as this. Honorable members cannot point to any other avenue in which £100,000 per annum could be raised without inflicting even greater hardship upon the community.
.- I support the amendment of the honorable member for Darling Downs (Mr. Morgan). I realize that the Government is out to obtain revenue, and must exploit whatever source promises results. But. it ought to keep out of this particular field. Does it wish to place a tax on knowledge, and to encourage intellectual starvation in Australia? When one looks round this chamber one is inclined to feel that we are already suffering from that malady. Because of her isolation, Australia is cut off from the culture of the old world, and if we. have not ready access to books, particularly educational works, we must suffer in consequence. The primage of 10 per cent, is a very severe tax,- because, coupled with other taxes, it makes almost prohibitive the importation of books. I quote the following article that appeared in the Melbourne Herald of the 6th instant, evidently from the pen of an Australian writer: -
The writer suffers in common with bookseller and book-buyer. Primage and sale taxes on books in themselves arc severe. Here is an illustration - the cost involved in landing in Melbourne a recent consignment of 12 cases of books valued in London at £317 lis. 5d. : -
In view of those charges for some of which - such as exchange - the Government is not to blame, it is difficult and expensive to import books into this country. At a recent exhibition in London of Australian literature, which did not receive very favorable report, the London Times said that Australia had produced no literary Melba. Is it any wonder that we have produced no great literary men when these handicaps are being placed on booksellers and writers?
– Australia has produced some good writers.
– Yes; but no outstanding writer. If an Australian produces a book, no matter what it is like, he finds great difficulty in having it published in Australia. The reading public in this country is exceedingly limited.
– Authors like Dickens are not produced every year.
– At least great writers are being produced in other parts of the world.
– Australia has produced the finest poets in the world.
– Shakespeare was certainly not an Australian. Australian writers have found the greatest difficulty in getting their books published here, and if their books are published in Great
Britain they have to bear heavy income taxation. If a book written by an Australian and published in the Colonial edition were sold . at, say, 9s. 6d., the royalty on it would be approximately 2d. So it is evident that the bookseller, the author and the employees in the book trade suffer from the slightest taxation on literature. The Minister has intimated that he will not consider placing books upon the free list, and I, therefore, give notice that I shall move that educational books be added to the list of books and periodicals imported for public libraries and subject to a 4 per cent, primage duty. 1 urge the Minister to make this concession in respect of educa*tional books, particularly in this time of depression.
– What does the honorable member mean by educational books?
– That can be denned by the department in consultation with the booksellers. At the moment the citizens of Australia are finding exceptional difficulty in attending to the education of their children. Those who hitherto have sent their children to public schools are now, in many instances, transferring them to State schools. So that if the Government is producing a revenue of £100,000 by means of the primage tax on books, it would be no exaggeration to- say that it will lose more than .that because of the increased cost of educating those children who are now being transferred from public to State schools. I earnestly urge the Minister to reconsider this matter. I know that representations have been made to him by the Australian Society of Authors, various booksellers associations, and other organizations connected with the trade. If he will not place these books on the free list I hope that he will at least place them in the category of books for public libraries, which are subject to a primage duty of 4 per cent.
.- 1 feel inclined to favour the amendment foreshadowed by the honorable member for Balaclava (Mr.. White). I hope that the Minister will make some concession in respect of books that are required for educational purposes. By interjection I asked the honorable member for Balaclava what he meant by educational books, and he replied that the department could arrive at a definition. I suggest that it is not fair to ask the department to do that.
– Will the honorable member provide a definition?
– I suggest that books in use by educational institutions should be made available at the lowest cost. I realize that many books, including fiction, as has been suggested by the honorable member for Darling Downs (Mr. Morgan), are of value to the community. I also appreciate the fact that, as the Government has to obtain revenue, it is difficult to exclude books and periodicals from the primage duty. But I suggest that books used for purely educational purposes should be in the category of books for public libraries. Books used in the education of our young people should at least be made available to educational institutions at no greater cost than at present, and I even suggest that they be admitted free. It is all-important that literature should be made available to the community. I agree with the honorable member for Fawkner (Mr. Maxwell), who interjected, that it is a pity that this revenue has to be raised by way of a tax on books, because literature is of real value to mankind throughout the world. But we are in the unfortunate position of having to raise money in an effort to balance the budget. The honorable member for Darling Downs has emphasized the fact that there has been a falling-off in the demand for books. I suggest that there has been a falling-off in every direction so far as the purchasing power of the people is concerned. The necessaries of life are more vital to the community than books, and it is difficult to-day for many of our people to feed and clothe themselves. They can do without books, but not without food and clothing. I urge the Minister to accept the suggestion of the honorable member for Balaclava (Mr. White), and to place books used for educational purposes in the category of books for public libraries. [Quorum formed.]
.- If we were members of an oligarchy, or had we a despotic form of government in this country, it would be a matter of small moment were all books denied to the public; but we are members of a democracy in which every man is equal at the ballot-box. We should, therefore, strive to provide educational facilities for the people. The greatest danger that a democracy has to overcome is ignorance and any increase in the cost of books will make it increasingly difficult for the general public to obtain information which should rightly be given to the people of a democracy. Therefore, I am heartily in agreement with the amendment of the honorable member for Darling Downs (Mr. Morgan). He has shown by quotations from the report of the Tariff Board what is its opinion, I wish also to draw the attention of the committee to the evidence given before the board. As honorable members know, there are few publishing houses in Australia, and one of the largest is the firm of Angus and Robertson, Sydney. Mr. Robertson, a member of that firm, when giving evidence before the board, said that he was opposed to any duty on books, not for business reasons, because undoubtedly a duty on books would assist his firm, but on principle. I think that the community owes a debt to Mr. Robertson for making that statement. This firm, in addition to being publishers, is one of the largest book-selling organizations in the Commonwealth, but the publishing side of the business is Mr. Robertson’s baby; he takes a keener interest in publishing than in any other ramification of the business. He stated before the Tariff Board that he did not desire, nor did he deem it advisable to impose, a duty on books. The Minister for Markets, prior to entering politics, was connected with the educational system of this country. He knows full well the absolute necessity for placing knowledge as cheaply as possible before the public. To that end great publishing firms, not only here, but also in “Great Britain, have placed popular editions of books upon the market with the sole object of bringing the great classics to the meaner homes of the world. We, in Australia, pride ourselves upon our educational facilities and upon the standard of education which is open to every boy and girl in the community. But now, through this Government, we are placing an almost prohibitive duty upon books which should be available to the younger generation at the lowest cost. I recognize that the Government must find revenue; but I prefer that it be obtained in some way other than by placing a tax on literature, which is the life-blood of this nation. If we are to survive as a democracy we must do nothing to restrict the opportunity of our poorer citizens to obtain the greatest literature of the world. I am confident that every honorable member is in sympathy with the amendment of the honorable member for” Darling Downs. Indeed the Minister stated that the Government is sympathetic. Surely there can be some point at which we can meet. The honorable member for Darling Downs does not suggest that all books should be admitted free of primage duty, but there are some that should, and I hope that the Government can see its way to make a line of demarcation permitting books on one side of the line to be admitted free and compelling books on the other side which Australia could very well do without, if necessary, to pay an increased rate of duty.
.- The quest of knowledge should be as inexpensive as possible, and I should like to know if the Minister, who has intimated that he cannot agree to the amendment, would agree to strike out of the line “books and periodicals imported for public libraries “, to be charged 4 per cent, primage duty, the words “ imported for public libraries “ ?
– Would the honorable member agree to an excise duty on butter to make good the £100,000 loss of revenue ?
– I should also like to know whether the word “ corn “ will cover wheat, because in America “ corn “ means “ maize “, and in Scotland it means “ oats “.
– Corn means all cereals. I have not been able to accept the amendment to reduce the primage on books, but as soon as the financial position improves I will recommend Cabinet to take action under the authority conferred by 2 “c which permits an alteration to be made at any time by proclamation.
– Though the Minister cannot agree to making books free of primage duty, the omission of the words “ imported for public libraries “ would bring them into the 4 per cent., instead of the 10 per cent, section.
– That would mean a reduction forthwith while there is yet no improvement in our financial position.
– It would merely mean a reduction from 10 per cent, to 4 per cent.
– While I am entirely sympathetic, I could not do it at the present time.
.- There is a general impression among honorable members that books of a technical character not printed in Australia pay customs duty. That is not so. As a matter of fact, I believe they are admitted free. Honorable members must not run away with the idea that printers and publishers in Australia are not capable of doing first-class work. They are doing wonderful work. Henry Ford’s recent book, My Life and Work, has been printed and published in Australia, and sold at about half the price charged in America. It was not a cheap book in the sense that it was printed on cheap paper, and with poor type. Taking into consideration our population the circulation of the work in Australia was larger than in any other country of the world. When I was Minister for Trade and Customs I was gratified at the very fine range and variety of books which I found were being published in Australia. There has been mention of school books to-night. I think that if honorable members took the trouble to inquire at the State Government Printing Offices they would find that the great bulk of the State school-books in use in Australia to-day are printed in Australia. When I was on the other side of the world a deputation of publishers introduced by Lord Riddell, one of the leading newspaper proprietors and publishers of Great Britain, waited on me. It produced several books published in Australia, and said that the British publishers had no objection to the imposition of customs duty on that class of books, but they protested against duties being imposed on books of a highly technical nature published in very expensive volumes which could not economically be produced except in one part of the world for distribution to the rest of the world.
Such books are already admitted duty free into Australia.
– But they are expected to pay primage duty.
– The primage duty is imposed for the purpose of raising revenue. Were it not for the special financial circumstances hooks of the type of which I am speaking would not be taxed. My reason for speaking now is to put in a special plea for the Australian compositor, the Australian reader, and the Australian editor. All the printing that can be done in Australia ought to be done in Australia. The Minister has promised that if the financial position improves he will recommend to Cabinet an alteration of the- primage duty on books. I could suggest a dozen articles on which primage duty should be remitted before it is remitted in regard to books which can be printed in Australia.
.- I should not have spoken had it not been for the remarks of the honorable member for Maribyrnong (Mr. Fenton). The honorable member made out an excellent case for the free admission of educational text-books. He said that many excellent books are printed in Australia; but I challenge him to produce Australian books on many technical subjects. If the honorable member were to write a book, and attempted to get an Australian publisher to publish it, he would realize some of the difficulties associated with the printing of books in this country. A publisher has regard only to the requirements of the reading public. I give the honorable member credit for consistency; but blind consistency only leads to trouble, and protection with him has become an obsession and a menace. Surely the honorable member for Maribyrnong realizes the great advantage to the youth of this land, as well as to their parents, of having educational books made available at the lowest possible prices. I could enumerate instances of Australians who have tried unsuccessfully to get Australian publishers to publish their works. I cannot claim that my literary qualifications rise to those dizzy heights necessary to qualify me for a position on the Broadford Howler. The great publishers of the world are not to be found in Australia. The best educational text books are printed overseas, and we should not insulate ourselves from the culture of the old world. I regard education as the greatest asset of democracy, and therefore I maintain that books should not be subjected to that blind protection, amounting almost to a disease, of which the honorable member for Maribyrnong is so strong a supporter. I urge the Minister to accept the amendment.
.- I shall support the amendment, but in case it is defeated, I give notice of my intention to move a further amendment to admit at 4 per cent, all text-books, and books for educational purposes. [Quorum formed.] There are strong reasons why educational publications, school books and text-books should be made available to the people at the lowest possible prices. It is true that some valuable text-books are printed in Australia, but many of them must necessarily be imported. These books are used chiefly by students, who do not earn large salaries, and, therefore, cannot afford to pay high prices for them. It is proposed to allow books required by public libraries to pay a primage duty of only 4 per cent. As I understand that there is only one public library in each capital city of Australia to which the reduced rate would apply, I propose to ask the committee to extend the definition of “ public library “ to include any ( library maintained by public subscription. That would include mechanics’ institutes, and other institutions maintained wholly by public subscription, which, perhaps, render a greater service to the community than do the public libraries, inasmuch as they provide educational facilities without drawing upon public funds.
– I appeal to the Minister to reconsider this duty in the light of its effect on the educational life of the people. The Minister said that my amendment would involve a loss of revenue amounting to £100,000 per annum. Even if that were the case, I submit that it would be a small price to pay in order to provide educational facilities for the people of Australia.
– The Minister will have power to bring the rate back to 4 per cent, as soon as the financial position improves. At present the Government cannot afford to reduce the rate. Moreover, to do so would be to break away from the Premiers Conference plan.
– Seeing that the Labour party has always claimed to be solicitous regarding the education of the people a proposal to tax educational textbooks ill-becomes a Labour Government.
– The Government wants to keep the people ignorant.
– I cannot endorse the interjection of the honorable member for Warringah (Mr. Parkhill), because 1 know that in the past the Labour party has striven to improve the educational facilities available to the people. For that reason, it gave me a shock to find that this embargo on learning emanated from a Labofur Government. I hope that the Minister will accept the amendment.
Question - That the amendment (Mr. Morgan’s) be agreed to - put. The committee divided. (Temporary Chairman - Hon. R. A. Crouch.)
Majority . . 7
Question so resolved m the negative.
Paragraph, as amended, agreed to.
Goods subject to primage duty at the rate of 4 per centum ad valorem -
.- I move -
That the item be amended by adding the words, “ and books for educational purposes “.
I am aware that some difficulty may be experienced in defining educational books, but I feel certain that, if a conference is arranged between the customs officials and the book trade, this matter may be arranged satisfactorily.
Question - That the amendment (Mr. White’s) be agreed to - put. The committee divided. (Chairman - Mr. McGrath.)
Majority . . . . 2
Question so resolved in the negative.
.- I observe that potassium cyanide is subject to a primage duty of 4 per cent. Will the Prime Minister consider placing gelignite in the same category?
– Ninety-five per cent of the gelignite used in Australia is manufactured here, so that the primage duty is really of no importance.
– If what the Minister says is true, my request is not important, but I know that when I was Minister of Mines, in Western Australia, there were very large importations of gelignite. I remind the Minister, however, that there are 10,000 or 15,000 men out prospecting in Australia at the present time, and anything in the way of excess charges on explosives might seriously hamper their work They are engaged in an occupation which may have most valuable results for Australia. If any of them were responsible for the discovery of a rich gold-field, or of any other precious metal, the country would benefit greatly. My impression was that the importation of explosives was very large. However, in view of the assurance given by the Minister, there would be no great advantage v secured by reducing the primage duty as I suggested.
.- Newsprint paper is allowed into Australia at a primage duty of 4 per cent., whereas the better class of paper, used chiefly for the printing of periodicals, is required to pay 10 per cent. It is an anomaly that the higher rate of duty is charged on the better class of paper used chiefly by small firms engaged in the printing of periodicals, -while the big newspaper corporations are required to pay only 4 per cent, on the paper they import. They should all be placed on the same footing. The present rates of duty penalize the small firms, which are already subject to competition from the dumping of imported magazines. Practically every publishing house has communicated with the Minister and circularized honorable members with regard to this matter. American publishers make a point of printing large quantities of magazines in excess of their home sales as their claims to a great circulation brings in ample advertisements. A great quantity of the surplus production, is shipped to Australia at a big loss and sold here in competition with our own journals, the publication of which gives work to printers, compositors, blockmakers, bookbinders, and so on. It is unfair to penalize small firms by subjecting them to a primage duty of 6 per cent, greater than that which applies to the large newspapers. To rectify the anomaly I move -
That the item be amended by adding the words “ and paper for the production of periodicals and magazines “.
– I am sorry that I cannot accept the amendment. Representations were made to the Government and, on investigation, it brought all newsprinting paper under the 4 per cent, primage duty, specifying that glazed, unglazed, and mill-glazed papers should be included at that rate. If the Government were to exempt all newsprinting paper from the 10 per cent impost, it would mean that all paper that is brought into Australia and used by printers would come under the 4 per cent, tax. To that the Government is unable to agree.
.- When I previously referred to dynamite and gelignite, the Minister asserted that less than 5 per cent, of our explosive requirements was imported. On examining . the list of importations I note that Australia imported something like £170,000 worth of explosives last year. On the estimate of the Minister the total value of our requirements would be over £2,500,000. I feel satisfied that we do not use anything like that quantity of explosives in Australia. Every encouragement should be given to our prospectors. If new gold-fields were discovered it would bc a wonderful thing for the Commonwealth. Day by day we hear of new discoveries of some importance, and we should endeavour to make explosives, which is such an important, item to prospectors and miners generally, as cheap as possible. I shall not move an amendment, but I urge the Government to bring this item under the lower rate.
.- I gathered the impression, after conversation with the Minister, that any item not mentioned in the list would be exempt from this duty, also that we imported only about 5 per cent, of our explosives requirements. Already the cost, of this commodity is great. Explosives sell in North Queensland at 12s. 6d. a packet. On my representation the Customs Department made inquiries into the price charged, as also did the honorable member for Flinders (Mr. Holloway) when he was a Minister. When I was recently o.n the Etheridge gold-field, I found that the State Government was supplying its wardens with dynamite at 8s. 6d. a packet, as against 12s. 6d. charged by storekeepers. On making inquiries from the storekeepers I was informed that it was a commodity that they did not wish to handle. Generally the purchasers were prospectors. If they were lucky they paid; otherwise they did not. The man who struck it lucky made up for his less fortunate colleagues. The storekeepers preferred that the Government should handle the sale of explosives through the Department of Mines. I urge the Minister to give favorable consideration to the suggestion of the honorable member for Swan (Mr. Gregory).
.- I also urge the Minister to agree to the suggestion made by the honorable member for Swan (Mr. Gregory) with regard to reducing the primage duty on explosives. No section of workers is suffering as much from the prevailing depression as that engaged in the mining industry. There is no better body of workers, nor one more willing to submit to hardship in an endeavour to make a living rather than draw the dole. Those who are engaged in mining in a big way are merely struggling along, without making any profit, keeping their men employed. Explosives represent a very important item to the miner, and the Government should do everything it can to make this commodity as cheap as possible. I make a special appeal to the Minister to consider the suggestion that has been made.
.- I am willing to support any action that will tend to reduce the cost of gelignite to the men out in the country who are striving to find gold, because there is no commodity of which Australia stands in greater need to-day. Many miners who are engaged in doing dead developmental work, require considerable quantities of explosives for the purpose of moving solid rock ; but they may receive no reward for their labours, even after all that preliminary work has been done. I have suggested on previous occasions that the explosives used in mining should be exempt from the sales tax and the primage duty.
– I, too, wish to reduce the cost of explosives to the men who use them; but, if we reduce the price to one section engaged in mining, the interests of all classes of miners should be considered. Practically all coal-miners work on contract, and have to buy their own explosives.
– So do metalliferous miners.
– I am not making invidious comparisons. The bulk of the explosives used in Australia are manufactured here, and the primage duty upon the imported explosives will protect the local manufacturers; and it should have a tendency to encourage local production and bring down the price. Can the Minister show that the reduction or abolition of this duty on explosives wil. mean a reduced price to the users of the commodity ?
– The bulk of the explosives used in mining is made in Australia, and SO per cent, is used in the metalliferous mines, the cost being carried by the big mining companies.
– If the local manufacturers can capture 80 per cent, of the trade without protection, primage duty which is not imposed upon the local product should have a tendency to reduce the local price. There is not sufficient evidence before the committee to warrant me in believing that the amendment suggested by the honorable member for Swan (Mr. Gregory) would benefit those using explosives, and, therefore, I shall vote against it in order to help the local industry.
.- I hope that the committee will not agree to the abolition of the primage duty on explosives. The effect of this duty on the price of explosives is infinitesimal. As a matter of fact, the 10 per cent, primage has only recently been imposed, and no material change has occurred in the price of this commodity.
– Every year the local production is increasing.
– Yes. If, as has been suggested, the price of locallymanufactured explosives is too high, it is because the price of imported explosives is also too high. At the present time gelignite is used mainly by the big metalliferous mining companies.
– By the prospectors, too.
– Only to a small extent, in cases where they are working reefs; the great majority of the men who are now engaged in the search for gold are operating on alluvial fields.
– They use the local product.
– And it is no dearer than the imported article. There has been no change in the price levels.
– An increase in price has occurred.
– Then it is not due to the primage duty. If we abolished this duty, the price of explosives would probably remain the same, because of the exchange position, which causes practically a 30 per cent. increase in the landed cost of the commodity. At Deer Park, in Victoria, there is an extensive and efficient explosives manufactory.
– Which is exploiting the poor workers.
– No; the honorable member is shedding crocodile tears. Probably he has never done a fair day’s work in his life.
– Fancy a trade union secretary talking like that to a fanner!
– The trade union secretary will pit himself against the honorable member for Gippsland for a day’s work at any time.
– The miners in my electorate have complained bitterly about the price they have had to pay for their explosives.
– It is not the 10 per cent. primage duty which makes the price high. If the primage duty were removed altogether, there wouldbe very little, if any, reduction made in the cost of the explosives to the ordinary miners. I do not suppose it would be even½d. a packet.
Prices are at their present point because of the conditions under which explosives are manufactured and sold. We are quite capable of producing all the explosives we need.
– Is the concern in the honorable member’s electorate a monopoly?
– Virtually, it is; but that is largely due to the fact that the promiscuous production of explosives by any one who cared to enter upon such an enterprise could not’ be allowed. In addition to the explosive factory at Deer Park, Nobels (Australasia) Limited are producing explosives for mining purposes, and they have done so without asking for any protection whatever. They are carrying on their operations in competition with the explosive manufacturers in other parts of the world. The local manufacturers have given satisfaction to the Australian users of explosives, both in regard to quality and price. If the Government were to place explosives on the exempt list, it would lose £10,000 in revenue, and it would not confer any benefit whatever upon the people using the explosives. It would merely give those engaged in this business an extra profit of 10 per cent. The reduction- of 10 per cent, in wages which has been made in certain industries lately has simply meant that the employers engaged in those industries have been given an additional 10 per cent. profit. In view of the fact that in normal times about 1,000 persons are engaged in the manufacture of explosives at Deer Park, the industry deserves some consideration.
.- The honorable member for Swan (Mr. Gregory) did not actually move an amendment and since he has already spoken twice he is debarred from speaking again on this item. On his behalf, I therefore move -
That the following item be inserted - “dynamite and gelignite”.
If this is agreed to it will mean that explosives used for mining purposes will be removed from the 10 per cent. list and placed on the 4 per cent. list. I well remember some nine or ten years ago, before I was a member of this Parliament, reading a newspaper report of a debate on this subject in the Federal
House. At that time two strong protectionists, the present honorable member for Newcastle (Mr. Watkins) and the then member for Hunter (Mr. Charlton) staunchly supported a proposal that explosives for mining purposes should be admitted free. I sincerely hope that the honorable member for Newcastle and the present member for Hunter (Mr. James) will follow the example that was set at that time.
.- It is quite true, as the honorable member for Gippsland (Mr. Paterson) has pointed out, that the two honorable gentlemen to whom he has referred voted against the imposition of a duty on explosives for mining purposes. But I want to remind the committee that explosives fall into two classes, namely, those required for sporting purposes and those required for mining purposes. The manufacture of ammunition for sporting purposes is carried on principally by the DuPont organization, and that required for mining purposes by the De Beer and the Nobel enterprises. The De Beer company carries on its operations in South Africa with coloured labour, whereas the Nobel company is manufacturing explosives in Australia under Australian conditions. When I have to make a choice between an industry operated by coloured labour and one operated by white men working under Australian conditions, I am not in any difficulty at all. I would vote every time for the protection of the Australian industry.
.- Twelve months ago I took this matter up with the Government, because it has a big bearing upon an important industry which gives employment to a large number of men. The cost of a case of explosives in Australia is 77s., as against 30s. in America.
– About two and a half times as great!
– Upon making inquiries, I found that one of the reasons for the great difference in price is that the precautions taken in Australia in regard to the packing and carriage of explosives in trains and otherwise are very much greater than in America. The Australian explosives are packed in steel tubes. In reply to representations that were made to him on this subject on the 28th May last, the Minister for Trade and Customs (Mr. Forde) made the following statement in August: -
In regard to the cost of explosives in Australia, I desire to state that the investigations which have been made in the matter show the position to be as follows: - Over 90 per cent, of the mining explosives used in Australia are manufactured in Victoria by Nobel (Australasia) Limited. The balance is imported by the company from the United Kingdom.
This company, therefore, has a monopoly of the distribution of explosives in Australia, and the Commonwealth Government has no power to fix prices, even in such circumstances. The statement by the Minister continued as follows: -
In regard to the comparison of a case of explosives costing 77s. iri certain places in Australia, as against 30s. in America, the company claims that its explosives are equal in quality to the best in the world, whereas many grades of explosives are made in America which could not be used in Australia owing to the requirements of the State laws. It is stated, also, that the cost of packing Australian explosives to comply with those laws is considerably higher than the cost of packing in America, where defined methods of packing are not prescribed. In addition, explosives here have to be packed in steel tubes for transport, and the costs of the latter are high. It appears, however, that in order to relieve users in States outside Victoria of transport charges as far as possible, the manufacturers’ prices at main ports are the same. It may be mentioned that under the tariff the duties on explosives are free (United Kingdom), and 5 per cent, (general). (Latterly, of course, primage duty has been added.) The manufacturers contend that if their prices were not competitive, foreign manufacturers would certainly have been on the market. I may say that a comparison of the company’s present prices with those of the past few years has shown that the prices have, since as far back as 1924, shown a gradual reduction until January of this year. In January and again in March prices had to be put up to cover the higher cost of imported materials used in manufacturing here, which was occasioned chiefly by the increases in the exchange rate.
– What a number of excuses are made in support of increased prices !
– Prices were reduced as far back as 1924, but they were increased in January and again in March of this year. The figures quoted by the honorable member for Swan (Mr. Gregory) show that the explosives annually used in Australia are valued at £3,500,000 if the percentage of locallymanufactured explosives given during the debate is correct.
– The trust that is manufacturing in Australia is also manufacturing in Great Britain, and if the primage duty were removed the price of its explosives would not be reduced by Id.
– There is something radically wrong wilh the cost of explosives, when it is realized that those manufactured in America are sold at 30s. whereas the cost of the .Australian product is 77s. a case. The landed cost of American fracture in Cairns shows a difference of over 40s. a case in favour of the American product. In discussing various items in. the tariff schedule I have always spoken and given my vote in support of duties that will provide employment for our people. Practically every newspaper published in Victoria, New South Wales, or Queensland contains notifications of new mineral discoveries, showing that a number of prospectors are actually engaged in searching for minerals without assistance from the Government rather than existing on the dole, which in the aggregate is costing the Commonwealth £13,000,000 annually. This is one of the avenues in which relief can be afforded, and if a reduction in any customs duty will be the means of providing employment, such a reduction will have my support. The letter continues -
These increases affected also, of course, the small proportion of explosives which ure imported. It may be mentioned, however, that the present prices arc, if deduction is made of the increased costs mentioned, slightly lower than they were in December, 1930.
Can the Minister or the officers of his department say what has been responsible for the variation in importations? The Minister has said that explosives are slightly cheaper than they were in December, 1930. The wages of workers in practically every industry have been reduced by 20 per cent., and overhead costs generally have also been lowered. It would be interesting to know whether, in view of all the circumstances, those in control of our State railways intend to reduce railway freights, and if these and other companies are to be allowed to continue to exploit those engaged in the mining industry. Earlier in the debate
I mentioned that the Queensland Government is selling explosives to miners at 8s. 6d. a packet as compared with 12s. 6d. charged by the storekeepers. Why do not the Mines Departments in the various States purchase the whole of the requirements of their States and supply them at a reasonable price to the miners? Why should Nobels Limited be allowed to import to make up any deficiency? The letter further states -
The company controls the prices at which its agents sell, but in regard to sales by retailors in country districts, states - “It will bc readily understood that it is quite impossible for us to control the prices at which country storekeepers sell in small quantities. We have attempted to prevent overcharging by such retailers, but it has been urged that in many cases the storekeeper is not paid at all unless the prospector is successful, and we hare been compelled to abandon the idea of controlling retailers’ selling prices.” The situation is peculiar in that the whole of the business is in the hands of One company, but the conclusions arrived at from the investigations are that the company acts fairly in the matter, and that the prices at which it supplies the explosives are not excessive.
In my opinion, the prices charged are excessive.
– That is not due to the primage duty.
– The honorable member for Corio (Mr. Lewis), who ‘dealt fairly extensively with this subject, did not explain why unnecessarily high prices are charged by local manufacturers. As the honorable member appears to be an expert in this matter, he should explain the difference in cost.
– How can a 10 per cent, primage duty materially increase the cost?
– It is equivalent te 2s. in the £1, and a sales tax of 6 per cent, is also imposed.
– We are not dealing with the sales tax.
– The honorable member for Corio does not like to be reminded of the fact that explosives have to bear a 10 per cent, primage duty, a sales tax, handling charges, and the cost of special packing. As the mining industry is in a precarious position, it is the responsibility of the committee to do all that it can to encourage it. I intend to oppose this item.
Question - That the amendment (Mr. Paterson’s) he agreed to - put. The committee divided. (Chairman - Mr. McGrath.)
Majority . . 3
Question so resolved in the negative.
– I wish to allude briefly to stud stock. I propose to move that this item be omitted from the list of goods that are subject to primage duty at a rate of 4 per cent., and included in the list of goods that are exempt. I cannot mention any item, the arguments in favour of the exemption of which are as strong as those that can be urged with respect to this particular item. As is well known, stud stock are used in Australia in connexion with the cattle, sheep, and horseproducing industries as well as the dairying industry.
– The committee has already agreed to paragraph 1 of the resolution, which deals with goods that are exempt from primage duty, and cannot again give consideration to it at thisstage. The effect of omitting the words “ stud stock “ in paragraph 2 would be to make stud stock liable to a primage duty of 10 per cent. At the report stage the honorable member may, if he wishes, move for the resolution to be further considered in committee of ways and means. That is the only course that is open to him in the circumstances.
Paragraph agreed to.
Amendment (by Mr. Paterson) negatived -
That theword “ten” be omitted, with a view to insert in lieu thereof ‘the word “ five “.
Paragraph agreed to.
Preliminary matter agreed to.
Remainder of motion agreed to
House adjourned at 11.20 p.m.
Cite as: Australia, House of Representatives, Debates, 14 October 1931, viewed 22 October 2017, <http://historichansard.net/hofreps/1931/19311014_reps_12_132/>.