House of Representatives
1 September 1932

13th Parliament · 1st Session

Mr. Speaker (Hon. G.H. Mackay) took the chair at 2.30 p.m., and read prayers.

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MedicalOfficers-CommercialMail Matter.


– Will the PostmasterGeneral explain why he has refused toallow the Postal Workers Union in Sydney to nominate two medical officers to inspect, in company with the Government Medical Officer, the mail-handling plant of the General Post Office?

Postmaster-General · MARIBYRNONG, VICTORIA · UAP

– The department employs a medical officer, who ia responsible for. safeguarding the health of the employees at the General Post Office, and I see no necessity to allow other medical men to participate in this duty. I assure honorable members that all necessary attention is being paid by the Government Medical Officer to the health of the staff of the Postal Department.


– Will the Postmaster-General say whether it is true that his department has undertaken the addressing and marking of catalogues and circular letters from business firms? If so, is not this departure a violation of the policy of the United Australia party to encourage private enterprise and discourage the entry of governments into business ?


– The innovation mentioned by the honorable member is not yet in operation. It is the subject of a good deal of misconception, and after a full examination of it, further information will be given to the House.


– I ask the PostmasterGeneral whether the report is true that the Postal Department hasrecently reduced the postal rates on commercial papers and business circulars?


-With a view to increasing the revenue of the department, the regulations were amended recently to allow of a personal note being included in a general business circular. That is the only concession that has been made.

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– I ask the Prime Minister whether the Government of New South Wales has promised to make any provision for the repayment of interest paid by the Commonwealth on behalf of that State? .

Prime Minister · WILMOT, TASMANIA · UAP

– The Government of New South Wales has accepted liability for the amounts paid by the Commonwealth on behalf of that State during the Lang regime, and all contractual obligations entered into by the State since the Stevens Ministry came into office.

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– Has the PostmasterGeneral any control over the Australian Broadcasting Commission? If so, why does he allow that body touse for broadcasting purposes American pianos when Australian instruments of equal, if not superior, quality are available?


– Under the act passed earlier this year broadcasting is entirely the responsibility of the Commission. I was not previously aware that the Commission is using imported pianos; probably the instruments are those which were in use when the control of broadcasting was transferred to the Commission.

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– From whom are this Parliament and the people of Australia to receive official information regarding the decisions of the Imperial Economic Conference at Ottawa? Are honorable members to accept the statement made in the House yesterday by the Prime Minister or the speech by the right honorable member for Flinders (Mr. Bruce), which was broadcast from America last night?


– The official statement on behalf of the Government was that which I made in the House yesterday, and I am not aware of any conflict between it and statements broadcast by the Minister without Portfolio (Mr. Bruce).

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– Can the Assistant Minister for Trade and Customs give to the House any information regarding the manner in which the BritishAustralasian Tobacco Company and other manufacturers are . honouring their agreement; withthe Commonwealth Government to purchase over 7,000,000 lb. of Australian tobacco this season? Have complaints been made to the honorable gentleman recently by growers that the buyers are purchasing only the best of the crop, and leaving what they consider inferior leaf in the hands of the growers?

Assistant Minister for Trade and Customs · EDEN-MONARO, NEW SOUTH WALES · UAP

– Some minor complaints have been made, but in each instance the rejected leaf was found to be of inferior quality, and worth only a small price. The reports made by the various purchasing companies indicate that the arrangement made by agreement with the Government is operating satisfactorily. The latest statistics I have show that already 2,000,000 lb. of leaf has beenpurchased at an average price of approximately 2s. 3d. per- lb., which was the price stipulated in the understanding between manufacturers and the Government. I have every reason to believe that the policy adopted by my colleague, the Minister for Trade and Customs (Mr. Gullett) is wise, and that his hopes in respect of it will be realized.

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– Is the Prime Minister aware that the basic wage in New South Wales has been reduced by 12s. 6d. since the advent of the Stevens Government? In view of that fact will he consider the advisability of re-enacting the

Financial Agreements Enforcement Act to ensure a refund to the workers of the amounts of which they are being deprived ?


– The reduction of the basic wage in New South Wales is the result of a decision by a properly constituted tribunal. This Government has no responsibility to interfere in this matter, and has no intention to do so.

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– Will the Prime Minister inform the House of the date on which the right honorable member for Flinders (Mr. Bruce) will take up his duties as Resident Minister in London, and whether the Commonwealth is bearing the cost of that gentleman’s present tour of the United States of America to engage in golf competitions?


– The question is intentionally offensive, and I decline to answer it.

Mr SPEAKER (Hon G H Mackay:

– I assure honorable members that if I regarded a question as offensive I would not allow it to be asked. The first part of the honorable member’s question was quite in order; but the right honorable the Prime Minister was at liberty to say whether he would answer it, and to form his own opinion regarding the latter portion of it.


– Without qualification I decline to answer the question. I ask that notice be given of further questions that honorable members may desire to submit, or that they be reserved until to-morrow.

Mr Beasley:

– Do you, Mr. Speaker, intend to allow the last remark of the Prime Minister to pass without calling upon him to withdraw it?


– Does the honorable member for West Sydney rise to a point of order?

WEST SYDNEY, NEW SOUTH WALES · ALP ; LANG LAB from 1931; ALP from 1936; ALP (N-C) from 1940; ALP from 1941

– Yes. Itake it that the remark of the Prime Minister was offensive to you, as Speaker. It is for you to determine whether questions and answers are in order, and I desire to know whether you will call upon the Prime Minister to withdraw his reference to the honorable member for East Sydney (Mr. Ward).


– A Minister may please himself whether he answers any question asked of him in this House. I do not regard what was said by the Prime Minister as reflecting upon myself, and I do not consider that he intended it as a reflection upon the Chair.

Mr Lyons:

– I did not.

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asked the Treasurer, upon notice -

  1. Hashis attention been drawn to the press statement that the Turkish Government has decided to re-introduce silver coinage?
  2. How many countries are definitely using the gold standard, and what are the names of such countries?

– The answers to the honorable member’s questions are as follow : -

  1. My attention has not been drawn to the statement referred to.
  2. Five, the countries being the United States of America, France, Switzerland, Holland, and South Africa.

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asked the Prime Minister, upon notice -

  1. Has his attention been drawn to an article in the Age of the 24th ultimo, as tothe inefficiency of the Weights and Measures Act in regard to the sale of food, fuel,&c., to the public, wherein it is stated that “ the public are fleeced every day”?
  2. Will he communicate with the various States in regard to adequate legislation to prevent dishonesty in the sale of foods, Ac, to the people of Australia?

– The answers to the honorable member’s questions are as follow : -

  1. I have seen the press report referred to.
  2. The honorable member’s suggestion will receive consideration.

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Grants to Western Australia


asked the Treasurer, upon notice -

  1. What amount of the £145,000 allocated to Western Australia under the Loan (Unemployment Relief Works) Act 1932 has been drawn by the Western Australian Government to date?
  2. Was it a condition of the grant that works controlled by local governing bodies should have preference over State Government works?
  3. If so, have these conditions been observed by the Western Australian Government?

– The answers to the honorable member’s questions are as follow : -

  1. Works estimated to cost £299,967 have been approved by the Employment Council of Western Australia, and the State Government has been advised that funds covering the Commonwealth proportion of thisamount will be made available as and when required. No application for these moneys has yet been received.
  2. No. Authority to approve of works upon which these moneys for the relief of unemployment may be expended was vested in the Employment Council, in accordance with the provisions of the Loan (Unemployment Relief Works) Acts 1932.
  3. See answer to No. 2.

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asked the Assistant Minister for Trade and Customs, upon notice - 1.Is it a fact that clause (f) of the sugar agreement is not being, and neverhas been, adhered to, because grocers in one of the main distributing centres, viz., Launceston, cannot secure sugar in that centre at prices provided for by the agreement?

  1. If so, what action will the Government take in respect to the continued violation of the agreement, and will the Government insist upon refunds being made to the Launceston grocers who have been obliged to pay prices for sugar in excess of the prices provided for in the agreement?

– The answers to the honorable member’s questions are as follow : -

  1. Advice has to-day been received from the Commonwealth Crown Solicitor that paragraph (f) of clause 1 of the sugar agreement is being adhered to by the Queensland Government.
  2. As refined sugar and other sugar products may he purchased from the Queensland Government (or its agent) by Launceston retail grocers at the prices specified in the sugar agreement, there is no necessity for taking the action suggested by the honorable member.

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asked the Postmaster-General, upon notice -

What royalty does the Australian Broadcasting Commission pay to the Australasian

Performing Right Association in respect to copyright music which is used inproviding programmes for the national broadcasting stations ?


– It is understood that the Australian. Broadcasting Commission is at present negotiating with the Performing Right Association on the question of copyright charges, and that a’ decision has not yet been reached.

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asked the Assistant Minister for Trade and Customs, upon notice -

  1. Is he in a position to supply information in connexion with the importation of (a) petrol and (b) kerosene, showing the number of gallons and the values for tne years 1931 and 1932?
  2. What are the rates of customs duty on (a) petrol, (b) power kerosene, and (c) illuminating kerosene ?

– The answers to the honorable member’s questions are as follow : -

  1. Imports of -

    1. Petroleum and shale spirit, including petrol, benzine, &c. - Year ended 30th June, 1931, 170,690,045 gallons; value, £4,054,265. Year ended 30th June, 1932, 155,998,184 gallons; value, £2,621,547.
    1. Kerosene and other refined petroleum burning oils, n.e.i. - Year ended 30th June, . 1.931, 35,158,991 gallons; value, £707,806. Year ended 30th June, 1932, nil. Kerosene, power - Year ended 30th June, 1931, nil. Year ended 30th June, 1932, 10,830,711 gallons; value, £172,370. Kerosene and other refined petroleum burning oils, n.e.i. - Year ended 30th June, 1931, nil. Year ended 30th June, 1932, 15,132,946 gallons; value, £202,353. Total imports of kerosene - Year ended 30th June, 1932, 25,963,657 gallons; value, £434,723.

The figures for the year ended 30th June, 1932, are advance and subject to revision. Power kerosene was recorded separately as from 1st July, 1931, only.

  1. Present duties on -

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asked the Prime Minister, upon notice -

Whether .the Government is prepared to give favorable consideration to the removal of eales tax from all foodstuffs?


– The policy of the Government in regard to the sales tax will be set out in the budget speech.

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asked the Treasurer, upon notice -

  1. Has the Commonwealth Bank Board exercised the powers conferred upon it by the Commonwealth Bank Act 1932 to convert any portion of the Commonwealth Gold Reserve it deems advisable into sterling?
  2. Has any gold been shipped overseas for this purpose?
  3. If so, what amount, and on what date?

– These questions have been referred to the Commonwealth Bank for advice.

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asked the Assistant Minister for Defence, upon notice -

Whether a rumour current in Western Australia, that £100,000 is being, or is about to be spent, at Darwin, on forts and military equipment for defence purposes, is correct?

Minister in charge of War Service Homes · MORETON, QUEENSLAND · UAP

– The rumour is incorrect. The amount to be spent will be disclosed in the budget.

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asked the Prime Minister, upon notice -

  1. Whether the Government is prepared to increase the federal aid roads grant from £1,400,000 to the original £2,000,000 per annum in accordance with the agreement entered into with the States under the federal aid roads scheme?
  2. If not, will the Government reduce the duty on petrol from 7d. to 3d. per gallon, the duty which obtained under the old agreement?
  3. What is the amount of the duty collected per annum over the last three years, and the total amount per annum allocated to the States during the lost three years?

– The answers to the honorable member’s questions are as follow : -

  1. Under the federal aid roads agreement the amount payable to the. States is not a fixed sum of £1,400,000, but depends upon consumption of petrol. The amount paid last year was £1,81.2,139. Any variation of the agreement is a matter of policy.
  2. In 1929 and 1930 increases in petrol duties were imposed for revenue purposes. The old agreement, which provided for a fixed grant of £2,000,000 a year, contained no provision relating to the amount or rate of duties on petrol.

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asked the PostmasterGeneral, upon notice -

  1. Has he been able to give further and more favorable consideration to a proposal to issue licences to owners of crystal sets at half the annual fee charged for a wireless valve set?
  2. If so, when will it come into operation ?

– The ‘ answers to the honorable member’s questions are as follow : - 1 and 2. Crystal set users are served with broadcasting facilities in the same manner as all other listeners; ‘ moreover, it would be impracticable to establish a differential listeners’ fee bearing any relationship to the type of receiving equipment used by a listener.

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The following papers were presented : -

Australian Imperial Force Canteens Funds Act - Twelfth Annual Report by the Trustees, 1st July, 1931, to 30th June, 1932 (including the Sir Samuel McCaughey Bequest for the Technical Education of Soldiers’ Children).

Meteorology Act - Regulations amended - Statutory Rules, 1932, No. 83.

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Leave was given to bring in the following bills : -

High Commissioner Bill.

Jury Exemption Bill.

High Court Procedure Bill.

New Guinea Bill.

War Service Homes Bill (No. 2).

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Messages reported transmitting estimates of revenue and expenditure and estimates of expenditure for additions, new works, buildings, &c., for the year ending 30th June, 1933, and recommending appropriations accord ingly.

Ordered to be printed, and referred to Committee of Supply.

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BUDGET, 1932-33

In Committee of Supply:

Prime Minister and Treasurer · Wilmot · UAP

– Early last year it became apparent that it was impossible for government finance to be maintained on the level to which the Commonwealth and the States had become accustomed during the last decade. The national income had fallen from £650,000,000 to £450,000,000. Oversea loans to the States and the Commonwealth which during the ten years ended 30th June, 1930, amounted to £216,000,000, or an average of £21,600,000 per annum, had been abruptly cut off. The combined deficits of the Commonwealth and the six State Governments for the year 1930-31 amounted to the huge sum of £27,202,000, and it appeared as if that amountwas likely to be increased to the colossal total of £40,000,000 for the financial year upon which Australia was about to enter.

It was therefore abundantly evident that unless drastic steps had been taken immediately, Australia must have met with disaster. Had a policy of inaction been followed there is no doubt that this country would have been plunged into a condition of financial chaos, involving all our people in loss the magnitude of which no one could compute, from which recovery would be long delayed, and only effected after the most bitter suffering.

Premiers Plan

It was in these circumstances and under the pressure which compelled the resolute facing of inexorable facts that the historic gathering in Melbourne in May, 1931, evolved what has become known as the Premiers plan.

It may not be out of place here to remind the House of the salient points of the plan as epitomized on page 171 of the report of the conference -

  1. A reduction of 20 per cent. in all ad justable government expenditure, as compared with the year ending 30th June, 1930, including all emoluments, wages, salaries and pensions paid by the Governments, whether fixed by statute or otherwise, such reduction to be equitably effected;
  2. Conversion of the internal debts of the Governments on the basis of a 22½ per cent. reduction of interest;
  3. The securing of additional revenue by taxation, both Commonwealth and State ;
  4. A reduction of bank and savings bank rates of interest on deposits and advances ; (e)Relief in respect of private mortgages.

The dominant note of the plan was the sure but progressive balancing of budgets. It was obvious, of course, that any attempt to give full effect to the recommendations at once would involve too drastic a cut and too much dislocation. The plan contemplated a series of steps taken surely but progressively towards the objective which the plan envisaged.


Before dealing with the Government’s budget proposals, which constitute the immediate further steps towards national safety and solvency which the Government believes tobe necessary, I think a glance in retrospect over the path Australia has trodden during the last financial year will help us to realize the nature of the abyss from which we have been saved. It should hearten us to continue to follow the path of financial rectitude as that which in the long run is the surest way back to prosperity.

Striking proof of this has been afforded to the people of Australia by the course of events in New South Wales during the past twelve months. The late Government of New South Wales did not take the necessary measures to implement the provisions of the Premiers plan agreed upon at the Melbourne conference of June, 1931. In consequence, the other governments of Australiawere seriously hampered in their work of reconstruction. The position of New South Wales in relation to the Premiers plan was reflected, too, in the deplorable position of our credit overseas during last year.

In the circumstances, the Common-“ wealth Government felt impelled to take action designed ultimately to enable the State of New South Wales to co-operate to the fullest extent with the Governments and people in other parts of the Commonwealth, and to assume a full share of responsibility for the measures of rehabilitation that were necessary. This result has now been brought about, and it can be said that all the Governments of Australia are pledged to the principles of the Premiers plan.

To-day -we have the satisfaction of knowing that our people have earned the respect, and even admiration, of the world for the way they have faced, and dealt with, their difficulties. We are not yet out of the wood. But when we look back, when we realize where we were and where we are, when we see from what we have been saved and where we might have been, we have reason to be thankful for, and proud of, the manner in which the Australian people have faced their difficulties up to the present. We feel happy in the certainty that they will see the struggle through until they emerge triumphant from the present depression.

Improvement in the Position.

Let us look for a moment at what has been done to retrieve the position : -

  1. Deficits for 1931-32 have been cut down from a contemplated £40,000,000 to £20,147,000, of which £13,570,000 represents the deficit of New South Wales. Had it not been for the policy followed by the late Government of New South Wales this last mentioned figure and the total deficits for the States would have been much smaller. For 1932-33 the estimated deficits of the Commonwealth and States have been further reduced to £9,000,000.
  2. The £556,000,000 conversion loan has been successfully carried through, with consequential interest savings of £6,500,000 per annum.
  3. Bank and private interest rates have been materially reduced and this process is still going on.
  4. A distinct advantage towards balancing budgets, involving substantial reductions in expenditure and heavily increased taxation, has been effected.
  5. Costs of production have been reduced and the cost of living index figure has come down from 1866 in 1929 to 1477 in 1931.
  6. The adverse trade balance (merchandise only) of £33,000,000 sterling in 1929-30 has been converted into a favorable balance of £31,000,000 sterling in 1931-32.

It cannot be denied that these steps have involved all our people in great sacrifices. And yet, had they not been taken, the general smash that must have followed would have involved our people in far greater sacrifice in the long run.

When the Premiers plan was evolved Australia’s credit both at home and abroad had been steadily falling for some time. The catastrophic fall in the prices of our exportable products caught us ill prepared to meet the blow. Something akin to panic set in in relation to ©ur stocks.

Commonwealth 5 per cent, securities in London fell to the extraordinarily low level of £55 15s. on the 28th September, 1931. In New York, similar Australian securities touched 35 dollars. There is now, however, a bright side to the picture. To-day these stocks are quoted at £101 4s. in London, and at 77 dollars in New York. This result, following directly from the action taken under the Premiers plan, is of supreme importance.

Conversion of Overseas Debt

On the 1st November, a New South Wales loan of over £12,000,000 will fall due in London and has to be converted. It is proposed to raise this conversion loan in the name of the Commonwealth under the terms of the Financial Agreement. This is the first conversion operation with which we have been confronted since the full force of the depression was felt. Before the Government assumed office and for some time thereafter it did not seem that this could be accomplished at all events at an interest rate which a responsible government could contemplate with equanimity. In fact, default or the acceptance of humiliating terms seemed to be inevitable. To-day that task, which appeared to be so impossible, can be faced with comparative confidence. Provided we take no foolish step meanwhile there is every prospect that the loan will be converted without difficulty and at a favorable rate of interest.

No one can deny that such a result flowing from the recognition of Australia’s effort to restore her credit through the adoption of the Premiers plan is of outstanding importance. The debt of the Commonwealth and the States in London amounts to £554,528,000. The annual interest on this totals £26,301,000, to which has to be added £6,674,000 for exchange at the existing rates. The lowest interest rate we pay on current London loans is 3 per cent.; the highest 6½ per cent.

Excluding Australia’s war indebtedness to the Government of the United Kingdom, the rates in groups are as follow : -

It will be seen, therefore, that the greater portion of our loans has been contracted at, the higher rates of 5 to 6½ per cent. Of these we have current optional conversion rights over £96,000,000. Naturally much depends upon the terms upon which we can convert the November loan. It will be an indicator for any later conversion operations that may be attempted.

It was because of the great importance of this matter that quite early in its period of office the Government decided to arrange for the Minister without Portfolio (Mr. Bruce) to go to London so that we might utilize his wide experience and ability in handling financial matters at the point where he can do the most effective service for Australia. It is hoped that as a result of his efforts substantial relief will ultimately be afforded to all Government budgets. It is clear that the British Government, proposes to direct its policy to securing and maintaining a lower interest rate, and it is essential, therefore, that, despite the hardship it may entail, Australia should so direct her policy as to be able to reap substantial benefit from the low interest rates now obtainable overseas in the case of first-class securities. There is no doubt that either advocacy of repudiation or political action to inflate the currency would prevent the achievement of this result, which is so desirable in the interests of all sections of our people.

So far as lies in our power, it is our duty and our responsibility to see that nothing is done which, by shaking confidence in Australian finance, will prevent a satisfactory settlement of our oversea obligations and a lightening of the burden of oversea interest.

Evidences of Recovery

There are other signs which indicate that the policy Australia is following has produced results of’ great benefit to our people. Nothing that is possible for us to do, however, can compensate fully for the loss we all suffer through the fall inthe value of primary products. Causes outside our control have dragged prices down, and it is to the operation of the same causes, working in a contrary direction, that we must look for their recovery. Yet there are signs of material improvement in our internal conditions.

The value of our principal stocks on the stock exchange has increased, as may be seen from the following prices : -

The marked improvement in Australian consols from the low point of £79 to approximate parity is most gratifying, and fully justifies the action taken to convert our internal debt into lower interest bearing securities.

The following comparison of prices of securities in the Australian market before the debt conversion operation, and at a recent date, indicates clearly that, despite the reduction in the rates of interest, the capital value of our securities has been preserved as the result of the financial reforms effected : -

A marked improvement has also taken place recently in the values of general industrial shares on the market. An examination of a list of sixteen representative stocks of companies with a paid-up capital of £29,976,883 shows that, whereas on the 28th June last the market value of these shares was £39,129,969, to-day the marketvalue is £44,241,682. There has thus been a rise of £5,111,713 in the market valuation of these sixteen companies in two months. This rise represents an appreciation of 13.06 per cent. on the market value in the period stated and a capital appreciation on the par value of the shares of 17.15 per cent.

The telephone service also provides some indication of general conditions. The net loss to the post office system in the month of July, 1931, was 2,374 telephones; since that date there has been consistent recovery up to the month of July, 1932, when an actual gain of 88 telephones was recorded. The evidence points to the fact that, from now onwards, a regular net increase in business may be anticipated. Both the post and telegraph branches show similar signs of recovery, and, so far as broadcasting is concerned, the rate of development is rapid, the exist ing number of licences being higher than ever before in the history of broadcasting in Australia. The figure at the end of July, 1932, was 376,759.

In other ways there are signs of increased business activity to which the reduced rates of interest have materially contributed. The Government welcomes all these signs of returning confidence - a confidence without which no progress is. possible.

Interest Rates

Interest rates have fallen very materially. High interest rates paid on government securities during the days of our prosperity were, in a large measure, responsible for an unhealthy atmosphere in monetary circles. The savings banks, able to earn big returns on government loans, paid interest rates which should have been entirely foreign to that class of business. That led in turn to these banks’ attracting large sums of money which were not legitimate savings bank business. This made necessary a very high fixed deposit rate, with the trading banks and a relatively high interest rate to the borrowing public. Naturally this has taken some time to break down and the end is not yet in sight. Further falls in interest rates must take place, but, allowing for variations in taxation, the money market is approaching an equilibrium with the new 4 per cent. level of Australian consols which is shown by the approach of these securities to par. We may see these bonds at an appreciable premium if interest rates fall materially from their present level. However, interest rates on fixed deposits have fallen from -

Rates on advances by the banks have been reduced by½ to1½ per cent., with every indication of early further reduction, which will become more pronounced as the banks are fully relieved of their obligation to pay high interest rates on existing deposits.

Primary Production

One of the outstanding features of Australia’s economic life over the past few years has been the very heavy increase in primary production with a resultant advance in the volume of produce marketed overseas.

The wool clip for 1930-31 was 912,141,253 lb. and for 1931-32 950,000,000 lb. This compares with the record clip of 968,152,935 lb. for the year 1928-29. Forecasts for the forthcoming season point to a satisfactory clip both from the stand-point of volume and quality. Much depends upon wool prices and whether the hardening tendency which was recently noted in London will result in substantial improvement in the price during the forthcoming selling season.

The wheat harvest for the past season reached the very high figures of 189,500,000 bushels. A bounty of 4½d. per bushel on all wheat of the season’s harvest which was sold was granted by the Commonwealth Government. This proved to be of considerable benefit to the grower. The payment of the bounty is almost completed and the total disbursements will reach approximately £3,400,000. It is estimated that this financial assistance, together with the exchange, brought the return to the grower up to 3s. per bushel on the farm. Taking everything into consideration, this must be considered a satisfactory result. It is proposed to amortise this loan over a period of fifteen years and provision has been made in the budget this year on that basis.

Many o’ther primary industries increased their production to a marked degree, with the result that the surpluses for export reached high figures. A statement showing the increases in shipments overseas of the principal of these products is set out hereunder: -

The total value of exports from Australia, excluding bullion and specie, amounted to £95,190,452 (Australian currency) in 1931-32.

The commodity balance of trade brought about is shown by the Commonwealth Statistician to have been £30,691,000 (sterling) in favour of Australia. It is to be noted that this position has been brought about not only by the fall in imports but by the heavy volume of exports going forward. This estimate of the favorable trade balance makes no allowance for new production of gold £3,500,000 (sterling) and export of silver bullion £500,000 (sterling) in 1931-32.

Australian-Canadian Trade

Although Great Britain continues to be the principal country in which Australia finds outlets for its surplus export of foodstuffs and raw materials, it is encouraging to find that an increasing demand exists in other countries, notably in Canada and the East.

Canada has now become a very valuable market for Australian dried fruits. Of the 1932 Australian crop, 14,500 tons have already been shipped to the dominion, as against’ a total export of 7,435 tons two years ago.

Whilst at Ottawa recently, the Australian delegates conferred with the Canadian Government regarding certain difficulties which have arisen in connexion with the trade agreement. These will be dealt with by the Government as soon as the delegation returns.

Australian Trade with the East.

The value of the exports of merchandise from Australia to eastern countries during the past three years is as follows : -

The principal items of export are wool, wheat, flour and butter, but a valuable trade is also carried on in a wide range of commodities, including such lines as meat, milk, tallow, horses, soap, and canned fruits.

The importance of this market can be butter from Australia to the East during gauged from the following table showing the past *three years: -* the exports of wool, wheat, flour and These figures show that', contrary to the opinions expressed from time to time, Australia has developed a very substantial market for its productions in eastern countries. The Department of Commerce is in close touch with the British Trade Commissioners and commercial counsellors in various Eastern centres. The action of the British Government in making these facilities available to the Commonwealth is much appreciated. The information received covers a wide range of commodities, and has proved of very great value to Australian traders. It is intended to extend, as far as possible; this association between the Commonwealth and the British trade representatives in Eastern countries. {:#subdebate-21-8} #### Gold One of the most gratifying examples of new activity is gold-mining. The reaction of the general fall in the' price level of all commodities has been particularly advantageous to the goldmining industry. Notwithstanding the temporary abandonment of the gold standard by many nations, all currencies are still measured in terms of gold. The high price of gold expressed in Australian currency has led to a considerable expansion of the industry. It makes possible the working of very large bodies of comparatively low-grade ore which it was unprofitable to work with fine gold standing at £4 4s. lid. per ounce. The present price at the Melbourne Mint is £7 6s. lid. per fine ounce. This illustrates how far the Australian £1 has drifted from its old parity. The fall in internal costs is also assisting in the development of this industry, and it is hoped that Australia will increase her output of the precious metal to such an extent that the production in 1932 will exceed the average annual production in the three years 1928, 1929, and 1930 by 250,000 ounces, with a promise of still further development next year. Gold played a very prominent part in rescuing Australia from the trough of the depression in the 'nineties, and it will undoubtedly help Australia to recover from the present crisis. {:#subdebate-21-9} #### Gold Standard Amongst the outstanding events of the past year was the abandonment of the gold standard by Britain on the 21st September, 1931. The result of course was beneficial to Australia, as it had the effect of raising the sterling price of all Australian exports and of offsetting to a very great degree the continued fall of gold prices. As most of our oversea debts are payable in sterling the fall in sterling assists us in meeting our interest and sinking fund obligations. It is impossible to say at what level sterling will be stabilized, but it is not without interest to recall that since the Premiers Conference was held in Melbourne in April last there has been a substantial fall in sterling. The effect of this movement is of advantage to Australia in two ways - {: type="1" start="1"} 0. It tends to increase the sterling price of our exports to the same extent as if the Australian exchange rate on London were increased proportionately. 1. This result is achieved without any addition to the charge on the service of our London debt and without consequential additional taxation to meet that service. *ExchangeRate.* It is desirable that the circumstances surrounding our exchange rate with Britain should be clearly stated. After Britain went off the gold standard on the 21st September last, the London balances of our trading banks and of the Commonwealth Bank began to accumulate rapidly. It is not possible to give complete figures of the London balances of all Australian banks. In November last, however, an acute stage was reached, the trading banks obviously being apprehensive of a fall in the exchange rate with consequent serious loss to themselves. After protracted negotiations, the Commonwealth Bank ultimately made an agreement with the trading banks to purchase their surplus London funds and accepted the responsibility of fixing the exchange rate from time to time, thus taking all the risks attendant upon a rise or fall, and relieving the trading banks of any risk of loss on that account. After this arrangement was made, the bank fixed the buying rate at £125. Had this action not been taken there is no doubt that the uncontrolled rate, which is sometimes described as the natural rate, would at that time have fallen very materially. This arrangement is still in operation. In view of the additional responsibilities which the Commonwealth Bank assumed, an amendment was introduced into the Bank Act to give the Commonwealth Bank control of any premiums arising from the conversion of any part of the gold reserve into sterling. The amendment enabled the bank to use these premiums to strengthen its position in the control of the exchange rate. Whilst the power of the bank to fix the rate of exchange as it thinks best in the interest of the country is not in any way fettered by legislation, the bank is of course influenced in this matter by those trade conditions which ultimately determine the amount of funds which are available. The Government has been, and is still, prepared at all times to give sympathetic consideration to any representations from the bank in relation to this matter. When the Premiers met in April the Federal Government, having considered the report of the economists, announced its acceptance of the recommendations submitted. The recommendations were as follow: - {: type="1" start="1"} 0. That equilibrium between costs and prices be sought as a basis for the restoration of employment. 1. That Parliament authorize the Commonwealth Bank to manage the exchange rate to this end taking into account economic conditions. 2. That the State Parliaments take the necessary action to empower arbitration courts and wages boards to fix wages in accordance with economic conditions. 3. That all wage-fixing authorities complete the reduction of real wages by 10 per cent. below the level of 1928 where this had not already been done. 4. That the State Governments take action to complete the reductions in rates of interest contemplated in the Premiers plan. , 5. That the budget deficits for 1932- 33 should not exceed £12,000,000. 6. That any Government loan expenditure or assistance to private industry made during the period which must elapse before restoration of employment be subject to the safeguards set out in the report. 7. That the Commonwealth Parliament systematically revise the tariff with the objective of promoting the greatest employment throughout industry, and not only in the industry directly concerned in each item. 8. That Commonwealth and State employment councils be constituted to bring together the best organizing ability of each State, and that these councils push on with measures to realize the possibilities of substituting employment for sustenance and, of promoting subsistence farming and to advise on all measures for the betterment and relief of unemployment. In placing these recommendations before the conference I said, on behalf of the Commonwealth Government, in reference to exchange - >This question is very fully dealt with in the committee's report, and my Government concurs in the views that are expressed. It, however, very strongly holds the view that the rate of exchange "should not be' a matter controlled by governments, nor should governments be entitled to dictate to those who ure controlling the exchange what the rate should be. Were such a position allowed to grow up, the exchange would be governed by political and not by economic considerations, and the result would inevitably be disaster to the country. The Government agrees with the committee's report that the exchange rate should bc controlled by the Commonwealth Bank, which is now, in fact, the central reserve bank of Australia. In controlling the exchange, the bank should be, in the words of the committee's report, " free from both the fact and the four of political control ". > >In exercising that control, however, it . is necessary for the bank to take into account economic conditions. The present world crisis, and the chaos into which price levels and exchanges have fallen, have placed upon the shoulders of central banks new and difficult obligations. > >No longer can exchanges be determined by the relatively simple and well-defined principles which operated when the currencies of the nations were based upon gold. Many new and complex problems have arisen involving the relation of exchanges to the economic circumstances of countries and the level of costs and prices. These difficult questions are being faced the world over by central banks, and have to be faced by the central bank in Australia. > >By the manner in which the board of the Commonwealth Bank has discharged the onerous and difficult duties that have rested upon their shoulders during recent years, they have earned the trust of the people. The nation will look to them with confidence to carry out in the best interests of every section of the community the grave responsibility of determining the level at which the exchange rate should from time to time be fixed. This was a carefully considered statement. The Government sees no reason to alter it, and still considers that any other policy would involve political control of the bank, with all its disastrous consequences. {:#subdebate-21-10} #### Empire Currencies It may be of interest at this stage to point out the relative position of all the currencies of the Commonwealth of British Nations in z-elation to gold. The position at the 20th August, 1932, was - It will be noted that Australia's currency has departed from gold further than all the rest. {:#subdebate-21-11} #### Floating Debt This review of Australia's position would be incomplete without some reference to the floating debt. This has assumed huge proportions, the amount at 30th June, 1932, being £82,670,000, of which the Commonwealth's share is £16,730,000 .and the States' share £65,940,000. The short-term debt in London totals £37,325,000, whilst the total in Australia is £45,345,000. "With the exception of treasury-bills held in London by the Westminster Bank' amounting to £4,250,000, the whole of the floating debt has been met by the Commonwealth Bank discounting treasury-bills or taking up debentures. Of the short-term debt domiciled in Australia, £45,000,000 consists of treasury-bills issued through the Commonwealth Bank. That bank has in turn rediscounted these bills to a large extent with the trading banks. It is due to this measure of co-operation amongst the financial institutions that it has been possible for Australia to meet the pressing difficulties created by the crisis. The Government willingly acknowledges its indebtedness to the banks for their help. At the same time the right of the banks to rediscount these bills with the Commonwealth Bank involves an element" of risk and there must be a limit to this method of finance. These bills represent £45,410,000 which has been raised to finance deficits and £37,260,000 for loan works by the Commonwealth and States. The figures are as follow: - The floating debt is still increasing. The estimated deficits of this year, which must be financed by treasury-bills, amount to £9,000,000, and it will probably be another year after this before we will be able finally to check additions of this kind to the floating debt, though we may be able to finance our future works programmes by direct loans. Much must necessarily depend upon the state of the money market, but still more will depend upon the measure of world recovery that we may see in the next year or so. {:#subdebate-21-12} #### Unemployment The Government has given much anxious thought to the question of unemployment, and, at the Premiers Conferences which have taken place since the Government assumed office, much time and consideration have been given to trying to find a way out of the difficulty. Fortunately, it was found possible to make some practical contribution to the solution of the problem. In April last the Government decided, in conjunction with four of the States, viz., Queensland, South Australia, Western Australia and Tasmania, to raise £3,000,000 for winter relief. £600,000 was devoted by the Commonwealth to help the unemployed in New South Wales, and since the present State Government came into power the Commonwealth Bank has agreed to find an additional £600,000 to assist in the relief of unemployment in that State. The elections delayed the completion of plans in Victoria. It was determined to spend the money as far as possible on reproductive works and all the States are now carrying out an extensive programme of works. At the last Premiers Conference further consideration was given to this subject, and a plan is now being evolved designed to employ the taxation which is raised forunemployment relief and which to-day is devoted to paying what is commonly described as the dole, for the purpose of creating useful employment on works which will be reproductive and self-supporting. The doll has a depressing effect on the morale of our people and should be discontinued as soon as possible. It is hoped that circumstances will enable this plan to be developed further at the next Premiers Conference. There is, however, no doubt that it is to private enterprise and the recovery of industry that we must look for real relief. One of the things which is hampering recovery is the heavy load of taxation which our people are carrying, and it is of paramount importance that at the earliest possible moment we should relieve them of this burden. At the same time we must not lose sight of the necessity for maintaining budget equilibrium. The added taxation which the Commonwealth has imposed to meet the crisis is extraordinarily heavy. During the last two years, Parliament imposed the following special taxes which it will be necessary to continue to collect during this year : - In addition to this huge total, extra duties of both customs and excise were imposed by the previous Parliament. It is proposed to invite the House to reduce many of the customs duties in conformity with recommendations of the Tariff Board. The result will be a real relief to the community as a whole, though it will involve a considerable loss of revenue. All this special taxation should be removed as early as practicable, but it can only be done when circumstances make it possible. Meanwhile, every effort must be made to bring governmental expenditure down to a level more compatible with our reduced national income. Payments that may have been justifiable when we had abounding revenues can no longer be justified. The reduced cost of living must be taken into account in determining the extent of the social and other services which any government can properly provide. What we might like to do and what we can do to-day are two very different things. {:#subdebate-21-13} #### Conferences Three very important conferences have been held during 1932- the World Disarmament Conference and the Reparations Conference at Lausanne - at which Australia was represented by the Attorney-General and Minister for External Affairs **(Mr. Latham),** and the Empire Conference >at Ottawa, at which our representatives were the Minister without portfolio **(Mr. Bruce),** and the Minister for Trade and Customs **(Mr. Gullett).** The Attorney-General has already ^reported to Parliament upon the Reparations Conference and will take an early opportunity to report .upon the World Disarmament Conference. The conference at Ottawa was of the first importance both to Australia and the Empire. It was not to be expected that we could go to such *st* gathering and obtain either all that we would like to' get in our favour or all that we might hope that other parts of the Empire might concede. Since 1849 Britain has adhered to a rigid free trade policy. Taxes on food have been especially condemned, except for revenue purposes. Until recently there was only a very limited -field over which it was possible for Great Britain to extend any preference to dominion exports. It was therefore no light task which confronted our delegates. We have -every reason to be satisfied with the way in which they prepared themselves for and carried out their difficult task, and with the results achieved. The benefits secured for Australia as a result of the Ottawa Treaty are substantial and far reaching. The agreement covers 65 per cent, of our total exports to the United Kingdom and should result in our producers getting substantial benefit by raising the level of export prices. There will be other opportunities for a full consideration of the significance and results of this important conference. Following upon and complementary to the very important and successful conference held recently at Lausanne, it is anticipated that a world economic conference will be held towards the end of the year. Though this conference may be unable to unravel all the complex problems that will confront it, there is a general hope that at least a way will be found finally to settle the vexed questions of international war debts and reparations. The stage will then be set for trade to function with greater freedom than is possible so long as the shadow of these payments hangs over international exchange. *Effect of Ottawa Treaty on Revenue.* It is difficult to forecast with certainty what will be the net effect' on revenue arising from tariff alterations made in pursuance of the Ottawa agreement. We can be reasonably certain that they will bring about a reduction of revenue with consequent relief to the taxpayer. To some extent the increased preferences to Britain will result in increased importation of British goods, to the exclusion of foreign goods. The Ottawa agreement with Britain will produce a double effect on revenue - {: type="1" start="1"} 0. The reduction of a number of duties will reduce revenue from the importation of the present volume of British goods. 1. The substitution of British for foreign goods will result in lower duties being payable on these imports. It is necessary to emphasize that in existing circumstances the total volume of possible imports is strictly limited by the amount of funds in London arising from the sale of our exports in excess of our London and foreign obligations, public and private, as they may exist from time to time. This excess or surplus, whatever it may amount to, can only be increased by one or more of the following four factors: - {: type="1" start="1"} 0. An increase in the actual volume of production ; 1. An increase in prices of our products ; 2. An inflow of capital from abroad; 3. Loans raised outside Australia. As to the first, any increase is conditioned to a great extent, in this country, by the character of the seasons. It is expected that the wool clip will be large, but a material increase in sterling prices will be necessary in order to realize the same amount of London funds as was received last year. Dairy produce is lower than at this time last year. Wheat is materially higher, but it is too early to forecast the probable crop, and it is the price during the export season, of course, that determines the ultimata return. The next two factors depend essentially upon world conditions which it is beyond the power of Australia to control. W« can help in part by conserving our solvency and by general sound policy. But a prudent survey leads to the conclusion that we cannot confidently predict any increase in imports, and that, therefore, we are likely to collect less revenue through the Customs House this year than during the past twelve months. As to the last, the Government recognizes that it is impracticable to approach the London market for new loans, nor has the Government any intention of doing so until arrangements have been made to fund the floating debt. {:#subdebate-21-14} #### Taxation There are many uncertain factors in the existing situation, but the Government has prepared the budget on a basis which it believes to be safe. s In the opinion of the Government the results aimed at will be realized, and the budget will be balanced. If world conditions improve during the year there is reasonable expectation that the final results will show an improvement upon the figures now before you. Although the Government feels that there is certain taxation of a particularly onerous character which should be remitted at the earliest possible opportunity, it has not been found possible, except as to some items which will be referred to later, to make any reduction of taxation. However, should it become apparent as the year proceeds that such a course would be justified, the Government will not hesitate to take the necessary action and ask Parliament to endorse it. In the meantime the Government proposes to explore the position and to review the whole incidence of taxation with a view to devising a more equitable distribution of the burden. The complexity of our Federal and State taxation systems, and the absence of uniformity in them which is so apparent, have been the subject of frequent and not unjustifiable complaint. It is, therefore, proposed to appoint **Mr. Justice** Ferguson, who has had long experience upon the Bench of the Supreme Court of New South Wales, as a commissioner to examine both Federal and State taxation law with a view to the simplification and standardization of direct taxation legislation. **Mr. Justice** Ferguson has generously offered to act without remuneration. It is hoped that with the co-operation of the governments and Parliaments of the States it will be found practicable to adopt uniform and simplified taxation legislation. Several of the State Governments have already intimated that they are prepared to co-operate with the Commonwealth. The adoption of a common form of income tax return alone would save the community a great deal of trouble and expense. {:#subdebate-21-15} #### Tariff and Trade Restrictions In fulfilment of the policy outlined by me, and fully dealt with in February last by my colleague, the Minister for Trade and Customs **(Mr. Gullett),** the Government has inaugurated an extensive revision of the tariff based on the recommendations of the Tariff Board. At an early stage in the present session of Parliament, the Government introduced proposals to reduce duties in 73 instances. In addition it continued the fifteen reductions brought about by the previous Government. A further schedule is being tabled providing further reductions in duties. In the earlier proposals increased duties were imposed in twenty instances and are accounted for as follows : - Seven for revenue purposes. Eleven for protective purposes based on the recommendations of the Tariff Board. One for protective purposes at the direction of Parliament (almonds). One for the purpose of substituting a duty for a bounty. The restrictions imposed by our predecessors in office for the purpose of assisting in the rectification of the adverse balance of trade have been largely curtailed. These restrictions took the form of- {: type="1" start="1"} 0. The prohibition of importation of certain specified items; and 1. The imposition of a special duty of 50 per cent, of the ordinary customs duty payable on certain classes of goods. The importation of seventy-eight items was prohibited by the last administration. The Government has repealed the prohibition in fifty-four cases and is now taking action for their total removal. It will be remembered that the special duty was removed from twenty-two items out of fifty-eight affected when this Government assumed office and a resolution is about to be tabled providing for the removal of the special duties from a further seventeen items. It is considered that it will not be long before the whole of these restrictions on trade will have been removed. The tariff schedule which will be introduced makes provision for decreased duties in respect of the following goods : - {:#subdebate-21-16} #### Matches Cotton tweeds Knitted piece goods Wool piece goods Certain types of apparel {:#subdebate-21-17} #### Towels Galvanized iron Pipe fittings Dairy coolers, pasteurizers, &c. Cement making machinery, &c. Machinery, n.e.i. Motive power machinery, n.e.i. Crude oil engines Dynamo electric machines Static transformers {:#subdebate-21-18} #### Firebricks Sheet glass Cutlery cases Woollen yarns and wool tops (United Kingdom rate ) and the removal of the deferred duties in respect of - Pipes and tubes under 3 inches internal diameter Vessels over 1,000 tons This action has been taken following on recommendations made by the Tariff Board. "When **Mr. Gullett** returns a complete tariff schedule will be tabled at the same time as the Ottawa Treaty is submitted for ratification. It may then be necessary to modify to some extent the schedules now before the House. Further revision of the tariff will be undertaken as the Tariff Board presents additional reports. {:#subdebate-21-19} #### Primage Duties It has been necessary for revenue purposes to retain the primage duties, but several, exemptions, chiefly in the interests of the primary industries, have been made. Action is being taken by proclamation with a view to affording further relief to the agricultural, pastoral, dairying, and mining industries from the burden of these duties. {:#subdebate-21-20} #### Public Debt In accordance with the Premiers plan, the whole of the internal public debt of the Commonwealth and the States, amounting to £556,000,000, was converted into new securities as from the 1st August, 1931. This conversion was designed not only to give relief from the heavy annual interest burden but also to postpone the dates of repayment of the debts. The relief to budgets will be experienced in full for the first time this financial year - the total annual saving in intorest being approximately £6,500,000. By this operation, the total internal debt liability was increased by £4,282,000, but the average annual interest rate was reduced from £5 5s.10d. per cent. to £318s. 9d. per cent. Generally, bondholders were asked to accept a reduction of 22½ per cent. in their rates of interest. The conversion was undoubtedly a great national achievement, and demonstrated that the Australian people not only had a true appreciation of the financial difficulties that confronted the nation but were also courageous enough to make the sacrifices necessary to overcome those difficulties. There were no public issues of loans during 1931-32, finance to the amount of £24,260,000 having been provided during the year for the Commonwealth and the States by the issue of short-term treasury-bills to the Commonwealth Bank and trading banks. The public debt of the Commonwealth itself on the 30th June, 1931, was £388,718,545. On the 30th June, 1932, the debt was £398,884,730, an increase for the year of £10,166,185. During the year 1931-32, an adjustment was made between Commonwealth and State debts in respect of the relief granted by the Commonwealth to the States in 1925 and 1930 on loans for soldier land settlement. By this adjustment the debt of the Commonwealth was increased by £7,597,783, and the debtsof the States were reduced by an equal amount. The agreements between the Commonwealth and the States in this regard require ratification by Parliament. The balance of the increase in Commonwealth debt during last year was £2,568,402. This increase was due to the payment of wheat bounty out of the proceeds of treasury-bills, to additional capital debt created as a result of the conversion loan, and to the issue of debentures in reduction of the London overdraft existing at the 30th June, 1931. The aggregate public debt of the Commonwealth and the States at the 30th June, 1931, amounted to £1,156,034,917. At the 30th June, 1932, the debt amounted to £1,187,827,868, an increase for the year of £31,792,951. This increase is due to the issue of new treasury-bills in Australia for £24,260,000 to finance deficits and loan expenditure, the issue of debentures for £5,000,000 in reduction of London overdrafts, capital adjustments in connexion with the conversion loan, &c, less redemptions. {:#subdebate-21-21} #### Debt Redemption {:#subdebate-21-22} #### Commonwealth The amount made available for the redemption of Commonwealth debt in 1931-32 was £3,372,963. The sources from which these funds came were - * The amount which will be available for 1932-33 is estimated at £3,275,000. {:#subdebate-21-23} #### States The amounts paid to the National Debt Sinking Fund for the redemption of States' debts in 1931-32 were- The amount to be provided in 1932-33 is estimated at £4,000,000. {:#subdebate-21-24} #### Total Debt Redemption Combining the Commonwealth and States' figures, the total amount made available last year for the redemption of* Australian debts was £7,201,381, whilst the total to be provided in 1932-33 is estimated at £7,275,000. *Effect on Deficits.* If the moneys made available for debt redemption be set off against the combined deficits of the Commonwealth and the States, the deficits become £12,946,000 for 1931-32 and £1,725,000 for 1932-33. {:#subdebate-21-25} #### Debt Relief In considering the transactions for last year, and also the estimates for 1932-33, it is necessary to bear in mind the amount of relief to the Commonwealth budget through postponement of debt payments. For 1931-32 and 1932-33 the British Government generously agreed to suspend repayment of principal moneys amounting to £1,628,000 sterling a year under the Funding Arrangements Act. As the result of reparation and debt postponements under the Hoover moratorium, further relief to the extent of £3,090,000 sterling was obtained last year. Including exchange at current rates, the total relief is approximately £5,900,000 per annum. A final settlement of the reparation and war debts problem has still to be accomplished, but it is hoped that Australia will be relieved of the necessity of meeting any payments this year. No provision is, therefore, being made in the budget, and if we are subsequently called upon' to make payment the budget will be affected accordingly. {:#subdebate-21-26} #### The Yeah 1931-32 When the budget was brought down last year it was estimated that there would be a deficit of £5,176,300. With the subsequent relief under the Hoover moratorium, the estimated deficit was reduced to £1,148,300. The actual transactions for the year resulted in a surplus of £1,314,091. If we had continued to receive reparations, and had been required to meet war debt obligations to the British Government, instead of a surplus there would have been ,a deficit of £4,600,000. The following statement shows the comparison of the actual results with the estimate : - As compared with the estimate, the actual transactions of the year showed an improvement of £2,462,391. On the revenue side income tax collections were abnormal, being £3,661,000 above the estimate. Other increases were - Land tax, £357,000; profits from the note issue, £706,000, due to the higher rate of earnings of London investments and the benefit of the exchange rate in transferring profits to Australia; and coinage revenue, £91,000, due to unexpected demands for silver coinage. These abnormal increases were partly offset by decreases in customs and excise, £194,000 ; sales tax, £75,000; entertainments tax, £47,000; post office, £159,000; railways, £43,000. On the expenditure side there were unavoidable increases compared with the budget estimate. Invalid and old-age pensions cost £11,126,000, or £276,000 above the estimate. War pensions cost £7,449,000, or £489,000 above the estimate, due partly to the necessity for meeting 27 paydays, the last pay falling on the 30th June. Other increases were - Miscellaneous services, £329,000, due almost wholly to charges for exchange and interest; grants to States for federal aid roads, £412,000, due to consumption of petrol on which the grants are based being much greater than anticipated; contributions to States sinking fund, £83,000. Unemployment relief also cost £250,000, for which no provision was made in the budget. On the other hand, some items showed decreases, for instance, ordinary votes of departments, £93,000; post office, £178,000. {:#subdebate-21-27} #### The Year 1932-33 The estimated revenue for 1932-33 is £65,986,000 made up as follows: - {:#subdebate-21-28} #### Revenue, 1932-33 The estimate for customs and excise revenue is £806,000 less than the actual receipts last year. Notwithstanding some buoyancy of receipts in the first two months of this financial year I do not think it safe to budget for a greater revenue than £27,600,000 for the reasons already given in my remarks relating to the Ottawa Treaty and in view of the proposed reductions of customs duties. The estimated revenue from income tax is £3,482,000 less than last year. This may appear low, but the tax is collected on incomes of the previous year and as 1931-32 was the worst year since the depression commenced I do not think it would be safe to budget for any greater sum. A striking reflex of the growth of the depression is provided by the following figures, showing the financial results of 266 Australian companies : - This is fairly symptomatic. Moreover, the full effect on income tax of salary reductions, trading results, and so on had not been felt until the year 1931-32, on which this year's collections will be based. The estimated revenue from land tax is £357,000 less than last year. In view of the serious difficulties of taxpayers the Government considers that it will be necessaryto extend the operation of section 66 of the Land Tax Assessment Act, under which relief from tax may be granted in cases of hardship. This will involve remissions of taxation. {:#subdebate-21-29} #### Remission of Taxation The estimated revenue from sales tax is £175,000 less than last year. The original estimate was greater than last year, but the Government has decided to exempt the following items from the tax : - {: type="1" start="1"} 0. Agricultural and other machinery and implements, viz.: - Chaff cutters and horse gears. Chaffcutter knives. Cheese presses. {:#subdebate-21-30} #### Churns Combined corn shelter, husker and bagger. Corn shellers and corn buskers, and combined corn shellers and buskers. Cotton gins. Cream separators. {:#subdebate-21-31} #### Cultivators Dairy coolers. Discs for agricultural implements. Drills- seed, grain and fertilizer. Farm tractors. Field mowers. Garden and field spraying machines and spray pumps. {:#subdebate-21-32} #### Harrows Hay presses. Hay rakes - horse drawn and hand worked rakes and ploughs combined. Hay tedders. Lucerne bunchers. Maize harvesters and maize binders. Milking machines. Pasteurizers and jacketed vats or jacketed tanks, and also enamelled vats or tanks not jacketed, including those fitted with agitators or stirrers, capable of use as pasteurizers or coolers or as storage receptacles. Ploughs, plough shares, plough mouldboards, and mouldboard plates in the flat. Potato planters, raisers, diggers and sorters. Reapers and binders. Reaper threshers and harvesters. Seats, poles, swingle-bars, yokes and trees for agricultural machines. {:#subdebate-21-33} #### Scarifiers Sheep shearing machines. Straw stackers. Strippers and stripper harvesters. Sub-surface packers. Threshing machines. Winnowers and winnower forks (wood and steel ) . Wool presses. and parts thereof, not being parts of a kind that are ordinarily used for any other purposes. {: type="1" start="2"} 0. Agricultural, horticultural and viticultural spraying and dusting materials, and preparations to he used in the checking of plant and seed insect pests and plant and seed diseases. 1. Sheet iron galvanized - flat and corrugated. 2. Machinery and parts thereof to be used in the mining industry. 3. Rabbit poisons. 4. Rape seed for pasture purposes. 5. Sheep washes and sheep dips. 6. Traps for rabbits and dingoes. 7. Wire - fencing,barbed, netting. 8. Water bore casings. 9. Water pipes when imported or purchased for use by a person in connexion with agricultural, dairying, grazing or mining activities carried on by him. 10. Stockinette and hessian to be used in the manufacture of meat wraps. All these items are also being exempted from primage duties. In addition, primage will not be payable on cheese cloth, rennet and annatto. These items may at present be imported or purchased free of sales tax by a manufacturer of cheese as being raw materials for use in the manufacture of cheese. The estimated total loss of revenue is as follows : - The present time is most inopportune for the reduction of taxes, but these exemptions are proposed because the Government recognizes the difficult position of the primary producer. The reductions of tariff, the removal of surcharges and prohibitions, and the exemptions from primage and sales tax (as well as the modification of the administration of the " hardship " provision of the Land Tax Act) will bring an instalment of relief from the high costs which press upon the export industries. These remissions are a real contribution to the reduction of costs in a form which is most positive and enduring. It is proposed to correct an anomaly in regard to the taxation of interest received by companies from Australian Consolidated Securities. This interest is exempt from the 10 per cent, super tax and from any increase in the rate of income tax, but where dividends are paid out of such interest, the dividends are now taxable in the hands of shareholders. The law will be amended so that the exemption will extend to the dividend. The estimate of miscellaneous revenue is £789,000 less than last year. This is mainly due to a loss of £305,000 in profits from the note issue resulting from the reduced earning capacity of investments. Revenue from coinage will also be £170,000 less. No new taxation is proposed. {:#subdebate-21-34} #### Expenditure 1932-33 Turning to the expenditure side of the budget the Government found itself faced with a serious position. All estimates were subjected to thorough scrutiny and after most careful pruning the amount was reduced to £68,767,000. With an estimated revenue of £65,986,000 this left a deficit of £2,781,000. I again remind honorable members that this omits obligations arising out of the war debt to the British Government of £6,900,000 per annum, or £4,900,000 if we take interest only into account. If these sums had been included the deficit, £2,781,000, would have been increased to £9,681,000 or £7,681,000, respectively. The Government set itself the task of bridging the gap of £2,781,000. In the first place it is proposed to carry forward last year's surplus of £1,314,000. In ordinary circumstances this surplus would bo applied towards wiping out part of the accumulated deficit which stands at £17,216,000. Such a course would have involved the whole of the gap being made good by reduction of expenditure. This would have caused such hardship that the Government decided, in view of the abnormal conditions now existing, to' apply the surplus of last year towards meeting the deficit for the current year. After deducting the surplus of last year from the deficit on this year's accounts the Government was still faced with a gap of £1,467,000 by which it was necessary to reduce the expenditure side of the budget. To bridge this gap the Government submits the following proposals : - These reductions will bring the expenditure down to £67,287,622, and leave a surplus of £12,000 which, of course, will be turned into a deficit of £4,900,000 if we have to resume payment of the interest on the British war debt this year. In these circumstances, and bearing in mind that this prospective deficit of £4,900,000 is only arrived at after bringing last year's surplus forward to assist in balancing the budget, the Government feels that, however undesirable the reductions in expenditure may be in the view of those who are affected, no other course is open. The mounting expenditure of the Commonwealth must be reduced. However desirable it might be to maintain the present high level of social services we must recognize that- there is a limit to what the country can afford. The following is a summary of the estimated expenditure for 1932-33 after mating these adjustments. The comparative expenditure for 1931-32 is also shown : - The total estimated expenditure is £2,930,585 less than last year. The estimated expenditure for invalid and old-age pensions of £10,500,000 contains provision for new pensions expected to be granted during the year, whilst allowance is also made for the estimated saving of £1,100,000. If will be noted that the estimated expenditure on ordinary services of departments (omitting business undertakings, defence, &c.) is £2,348,500. This is £13,270 less than last year and is £602,000 less than the expenditure in 1930-31. Had it not been necessary to provide for the Council for Scientific and Industrial Research to the extent of £29,000 this year the Estimates would have shown a correspondingly greater saving. The investigations of the council have been financed out of the Trust Fund established in 1925, but on the 30th June last only £35,000 remained towards this year's programme. The provision for defence, omitting new works, is £101,000 less than the actual expenditure last year. No actual diminution of the services is contemplated. The reduced expenditure is in the main accounted for by reductions in salaries and wages owing to the decrease in the cost of living. The reduced appropriations during recent years have involved curtailments of certain activities, these modifications having been effected so as to produce the least detrimental effect upon the efficiency of the forces generally. So far as funds permit, effect' is being given to the general principles agreed upon at the Imperial Conference in 1923, at which it was decided that each dominion should provide for its own local defence. Naval, military and air forces' activities will continue on practically the same lines as in 1931-32 though, in the case of militia forces training, it has been decided to re-introduce in 1932-33 camp training of six days' duration and six days' home training in substitution for six days' bivouacs and seven days' home training as in 1931-32. The voluntary training scheme which has been in operation since 1929-30 will continue in 1932-33. As regards civil aviation, the Government, having in view the fact that, with one exception, all existing contracts for air mail services in Australia expire towards the close of 1932-33, recently approved of the appointment of a committee to investigate and report fully upon those air communications as well as upon all factors associated with the establishment of a service between Australia and the United Kingdom. On submission of the report, the Government will decide the future policy to be adopted in this connexion. Assistance to aero clubs will continue practically on the same lines as in recent years. The Government is fully cognizant of the importance of munitions factories as part of the defence scheme, and has made provision for the continued maintenance of those establishments on a satisfactory basis. The post office estimate shows a decrease of £57,000. The estimate for war pensions is £6,950,000, or £499,000less than the actual expenditure last year.War pensions may definitely be regarded as hav ing reached their peak a year ago and a steady annual decline may now be anticipated. The annual liability decreased by £825,266 between 30th June, 1931, and 30th June, 1932, resulting mainly from the provisions of the Financial Emergency Act. The provision for repatriation of soldiers is £655,000 op £253,000 less than the provision last year. The actual ex- penditure from the Trust Fund on repatriation services will be about £800,000 which is approximately the same as the expenditure last year. The differences between this figure and the provision in the two years is accounted for by a balance of over £100,000 in the Trust Fund on the 30th June last. The aggregate saving in the last financial year on general repatriation expenditure - excluding war pensions - was £290,000. It is proposed to suspend payment of the gold bounty on gold produced after 30th September, 1932. In the opinion of the Government, the bounty payments should not be renewed until the mint price of fine gold in Melbourne falls to £5 per ounce. If, however, the gold-mining industry desires to make representations to the Government on this point, the Government will be glad to discuss the matter further with representatives of the industry. When this Parliament first agreed to the bounty the mint price of gold was £4 lis. 6d. per fine ounce, or, 6s. 7d. above par. When the bounty was altered in July last year the price was £5 9s. Id. Now the price is £7 6s. lid., or £2 15s. 5d. above what it was when the bounty was first agreed to. In these circumstances the continuation of the bounty as a charge on the revenue account could not be justified. The stimulation which was given to the industry when the bounty was first fixed will thus be maintained and the industry will be assured that the. bounty will be resumed should the price of gold fall to the level named. Bounty will be payable under the present law in respect of excess production for the nine months ended 30th September, 1932, the estimated coat of the bounty being £100,000. Last year the wine export bounty resulted in a charge to the revenue account of £131,000. The bounty promised to assume large proportions this year and the Government felt that here again a definite limit must be set to our liability.. It is proposed, therefore, that the charge to the revenue account in respect of. bounty payable this year shall not exceed the charge in. 1930-31, namely, £96,000-, The required legislation whi'ch it is hoped to adjust with fairness to all concerned will be submitted to Parliament at an early date. It is proposed to make a further reduction in members' and ministers' allowances. This will bring the total reduction to 25 per cent, on members' allowances and 30 per cent, on those of ministers. The adjustment of Public Service salaries and wages under the Financial Emergency Act last year included a reduction to conform with the fall in the cost of living, together with a further reduction on the remaining salary varying from approximately 3 per cent, to approximately 24 per cent, according to the amount of salary. The cost of living reduction referred to was based on the index number for March quarter, 1931. There has been an additional fall in the cost of living and the index number for the twelve months ended 31st March, 1932, warrants a further reduction at the rate of £8 per annum for each employee. It is proposed to amend the Financial Emergency Act to make this further reduction at the rate of £8 per annum in. all salaries and wages about the end of September. The Government sees no reason why the salaries of the Public Service should be especially exempted from the automatic operation of 'the cost of living index figures in the same way as they apply to all people working -under industrial awards. {:#subdebate-21-35} #### Invalid and Old-Age Pensions The Government regrets that it is necessary to propose a further reduction in invalid and old-age pensions. Twenty years ago the provision of,,these social services cost approximately. £2,000,000 a year. Last year, even with the reduction effected, the cost was £11,126,000 or about six times the original cost. If there had been no reduction from the maximum rate of £1 the cost for the present year would have reached £13,500,000 or almost seven times the original cost. When the rate was increased to 15s. in 1920 the index figure for the cost of living- (food and groceries) was 1823; for the last quarter it was 1,448. The sum of11s.11d. will therefore now purchase what could be purchased for 15s. in 1920 when the pension was increased to that figure. The following tables show particulars of the growth of the pensions bill. In the last few years the increase has been very pronounced. The country simply cannot afford this increasing charge, and in addition to reducing the pension rate something must be done to see that the service is limited to those for whom it was really intended. Cases of fraud have been coming to light of such a nature that it has been decided to experiment with a system of inspection which, if it is found to justify itself, will be extended. The fact that such a system of inspection exists will be a deterrent against fraud. The Government has reason to believe that fraudulent practices very materially swell the pension bill, and it is in the best interest of those who are genuinely in need of help that every case of fraud should be weeded out. The Government also proposes an amendment in the pension law to provide that the amount of pension paid shall be a first charge against the pensioner's estate at death. Should the pensioner become possessed at any time of property cancelling the right to receive a pension, it is also proposed that the pension shall be a charge against such property. These provisions will be subject to certain exceptions and exemptions. {: #subdebate-21-35-s0 .speaker-F4O} ##### Mr LYONS:
UAP -- If within the twelve months' period under review the pensioner becomes entitled to certain property he will have to declare that property and the pension will be a 'charge against it. The provision is not retrospective. The intention is to cause those who refuse to maintain their parents in their old age, and who desire to share in the property left by those parents, to contribute something towards the amount that the nation has contributed to maintain those parents. The Government will endeavour to devise a contributory system of old-age pensions, but the problem is so complex, particularly in the present time of depression, that it is not prepared to give any definite undertaking as to the introduction of such a system. {:#subdebate-21-36} #### Maternity Allowances Last year the maternity allowance was reduced from £5 to £4 and payment was discontinued in cases where the income of the claimant and her husband exceeded £260. It is now proposed to limit payments to those cases where the income is £208 per annum or less. By this means a further saving of £60,000 is anticipated for 1932-33. {:#subdebate-21-37} #### Grants to States The special grants made to the States in 1931-32 were:- The claims of these States for increased grants for the present year .have been carefully reviewed and it has been decided to ask Parliament to continue the grant provided last year for South Australia and to increase the grants to "Western Australia and Tasmania. The grants proposed for i932-33 are: - The Government considers that these large grants are justified only because of the difficult and special circumstances now existing and that grants of such magnitude cannot be taken as a basis for permanent or long-term relief. It is, however, undesirable that annual applications should be necessary from the States for Commonwealth assistance and the Government is convinced that, as soon as normal conditions return, some definite plan must be adopted for determining what grants should be made to the States over a period of years. *Amalgamation of Departments.* "With a view to effecting economies in administration and to securing greater efficiency, the Departments of Home Affairs, Works, and Transport were recently amalgamated into the new Department of the Interior. In effecting this amalgamation considerable savings totalling at least £29,000 will be made during 1932-33, and' when the full effect of the re-organization is complete the total will be about £36,000. {:#subdebate-21-38} #### Petroleum Prospecting While it has been found necessary seriously to curtail operations in connexion with the search for oil in Australia, it is the intention of the Government to continue to render technical assistance in every way to those engaged in legitimate activities. It is, unfortunately, impossible to continue to grant subsidies for drilling and prospecting at the present time. The Government has undertaken, however, to demonstrate the value of new forms of technique which, though extensively used in countries where the production of oil in large quantities provides funds for experimental purposes, have not yet found a place in Australia. Notable among these is aerial photographic survey. At the present time an extensive aerial reconnaissance survey of most of the potential oil-producing areas in Australia is being carried out in co-operation with the Air Board. {:#subdebate-21-39} #### Legislation The legislation regarding the gold bounty, wine bounty, old-age and invalid pensions, maternity allowances, and salaries and allowances, will be included in a bill to amend the Financial Emergency Act of 1931. Other measures arising out of the budget will be amendments of the States Grants Acts, the Sales Tax Assessment Act, the Land Tax Assessment Act, the Income Tax Assessment Act, and the Income Tax Act. These measures will be proceeded with at the earliest possible date. It will be necessary also to introduce a Supply Bill within the next fortnight. {:#subdebate-21-40} #### Public Accounts A Joint Select Committee of Parliament submitted a report in May last on public accounts. The report contains many important recommendations for alteration of existing practice relating to the Estimates, budget papers, and public accounts generally. The report was received too late to permit of its recommendations being exhaustively examined with a view to making comprehensive reforms in the current estimates and budget papers. A few alterations have been made and the whole of the recommendations willi be examined with the object of effecting further reforms next year. {:#subdebate-21-41} #### Conclusion After careful review of all the circumstances, I believe that we can say with assurance that the position of Australia has very materially improved over the. period of the past twelve months. When at the last 'Federal elections I spoke to the people of Australia on the issues then before them, I declared that the restoration of complete confidence must be the first duty of any government which truly serves the people. Confidence has, in a large measure, been restored. All that is necessary now to enable us to reach the haven of complete recovery is an increase in world commodity prices. Having already achieved so much towards assisting our own economic rehabilitation, it would be foolish for us now to order our affairs in anticipation of an immediate change for the better in world. affairs. Indeed, without serious risk to our future prospects,- we cannot do so. The estimates of the Government's revenue and expenditure for the present financial year which have been placed before you we believe to be sound. It is the duty of the Government to do its utmost to live within its means. In the final result, that must be not only the safest course for us to pursue, but also the only honest course. Let us take heart to-day in the task of examining our present position and our future prospects. There is no cause for despondency. We have been through difficult and painful experiences, but we have weathered the storm. Our position to-day is a far happier one than that of many other, nations. Until prosperity is definitely restored, however, our resolution must remain unimpaired. By our own efforts we have achieved so much that we cannot now afford to relax. Knowing the sacrifices that would be involved, we have, as a nation, chosen the way of honour and self-help. Let us continue along that path with determination. If we do so, we may be sure that when the world enters upon happier and more prosperous days the people of Australia will reap, in full measure, the benefit of all the sacrifices that they have .made. Our economic and financial structure will stand upon a sounder base. The returning prosperity which a rise in the world prices of primary products would undoubtedly bring will be built upon solid and enduring foundations. The supreme task before us all is, therefore, to maintain intact the improvements in our national organization that have already been brought about. In doing so we shall show that we have faith in the future of our country, that we are prepared to make sacrifices for its welfare, and that we give precedence to no other nation when it is a matter of the earnest fulfilment of a national purpose. I move - >That the first item in the Estimates, under Division I - The Parliament - namely, " The President £1,300," be agreed to. Progress reported. {: .page-start } page 106 {:#debate-22} ### PAPER The following paper was presented : - >The Budget 1932-33 - Papers presented by the Right Honorable J. A. Lyons, P.O., M.P., for the information of honorable members on the occasion of the opening of the Budget of 1932-33. Ordered to be printed. {: .page-start } page 106 {:#debate-23} ### PRIMAGE DUTIES AND IMPORT PROHIBITIONS {: #debate-23-s0 .speaker-KXY} ##### Mr PERKINS:
Monaro- Acting Minister for Trade and Customs · Eden · UAP *. - by leave* - The Treasurer **(Mr. Lyons)** made reference in his budget speech to the intention of the Government to exempt additional classes of goods from primage duties and to lift the prohibition against the importation of certain other goods. I wish to supplement his remarks in that connexion, and to lay certain papers on the table. Honorable members will recollect that primage duties were imposed originally by the previous Government with the approval, to some extent, of honorable members who were at that time sitting in opposition, purely for the purpose of obtaining revenue to assist in balancing the budget and maintaining the services of government. The revenue from these duties has become very substantial, the total in 1930-31 being £3,657,426. Considerable agitation has occurred from time to time for the exemption of certain goods from primage duty, but it can be readily understood that in the face of the difficult task of balancing the budget for this year the Government could not agree to any action which would seriously jeopardize the revenue from this source. The Government has on various occasions taken action to ease the burden of the primage duties in certain directions. For instance, at the first opportunity after assuming office it exempted draught horses, cattle, sheep and pigs, for stud purposes, from primage duty by proclamation. {: .speaker-F4U} ##### Mr Forde: -- What Government removed the primage duties on stud stock? {: .speaker-KXY} ##### Mr PERKINS: -- The Scullin . Government reduced the duties, but we removed them. Similar action was taken in regard to vessels over 1,000 tons gross register, books for university libraries, books and historical records for State public libraries, hymn books and prayer books designed for. congregational use at public worship, while printing paper for use in the production of registered newspapers and periodicals was added to the list of goods paying 4 per cent, primage duty. Many other minor concessions were also authorized. With a desire to grant further relief from primage duties, the Government has very carefully examined the incidence of these duties, and it is my pleasure to announce to the House that a special proclamation has been gazetted providing for the exemption from primage duty of many lines of goods, the principal of which are - >Fencing wire. > >Barbed wire. > >Wire netting. > >Galvanized iron. > >Agricultural implements and appliances. > >Machinery to be used in the mining industry. > >Milking machines. > >Cream separators. > >Annatto, cheese cloth and rennet to be used in the cheese industry. > >Agricultural, horticultural and viticultural spraying and dusting materials and preparations to be used in the checking of plant and seed insect pests and of plant and seed diseases. > >Rabbit poisons. > >Sheep shearing machines. > >Sheep washes and sheep dips. > >Farm tractors and parts thereof. These exemptions will operate from 9 a.m. to-morrow, the 2nd September, 1932. Honorable members will receive a copy of the proclamation, together with a statement of items, which will make them *au fait* with the details of the latest exemptions. It will be noted that the important agricultural, dairying, grazing and mining industries will benefit from these concessions. The Government would like still further to curtail the operation of the primage duties, but the revenue position effectively precludes any more concessions, at least: until the financial situation definitely improves. I have also to announce that action has been taken to-day to revoke the proclamation prohibiting the importation of the following goods : - {:#subdebate-23-0} #### Cheese {:#subdebate-23-1} #### Lemons {:#subdebate-23-2} #### Oranges Dried fruits, excepting dates and figs. Fruits preserved in liquid. Vegetables, salted or preserved in liquid or partly preserved or pulped. Jams and jellies. Jelly crystals and powders. Coco-nut, prepared. Pickles, sauces and chutney. Wireless headphones. Batteries and accumulators, but not including dry batteries or dry cells. Bolts, nuts, rivets, engineers' set screws. Kail dogs and spikes. Wireless receiving sets partly or wholly assembled. Wire and other nails. Plated ware other than spoons, forks and cutlery. Aluminium ware other than spoons and forks. {:#subdebate-23-3} #### Tiles Sanitary and lavatory articles of earthenware and glazed or enamelled fireclay. Cast-iron pipes and cast-iron fittings for pipes. Shafting (other than flexible). Iron and steel beams, channels, girders, joists, columns, trough and bridge iron and steel. Matches and vestas including book matches. It will be remembered that the previous Government, as part of its policy for the rectification of the adverse trade balance, prohibited the importation of many lines of goods, but this Government did not favour such restriction of trade. In all, the importation of 78 lines of goods was prohibited by the Scullin Government, and honorable members will call to mind that previous actionby this Government removed the restriction in respect of 54 lines. Consequent upon the gazettal of the necessary proclamation to-day, the remaining prohibitions have been lifted. {: .page-start } page 108 {:#debate-24} ### PAPERS The following papers were presented : - >Imports - Statement showing classes of goods in respect of which prohibition of importation has been repealed. Primage Duty - Proclamation, dated 1st September, 1932, showing goods exempted from payment of primage duty on entry for home consumption. Statement showing particulars of goods covered by the various Tariff Items mentioned in the Proclamation. {: .page-start } page 108 {:#debate-25} ### TARIFF PROPOSALS {:#subdebate-25-0} #### Customs Duties (No. 6): Special Duties (No. 3) {:#subdebate-25-1} #### In Committee of Ways and Means: {: #subdebate-25-1-s0 .speaker-KXY} ##### Mr PERKINS:
Monaro - Acting Minister for Trade and Customs · Eden · UAP -- I move - {: type="1" start="1"} 0. That the Schedule to the Customs Tariff 1921-1930 as proposed to be amended by Tariff Proposals be further amended as hereunder set out, and that on and after the second day of September, One thousand nine hundred and thirty-two, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Customs be collected in pursuance of the Customs Tariff as so amended. That in this Resolution " Tariff Proposals " means the Customs Tariff Proposals introduced into the House of Representatives on the following dates, namely : - 3rdMay, 1932 ; and 24th May, 1932. That, excepting by mutual agreement or until after six months' notice has been given to the Government of the Dominion of New Zealand, nothing in this Resolution shall affect any goods the produce or manufacture of the Dominion of Now Zealand entering the Commonwealth of Australia from the Dominion of New Zealand. {: type="1" start="2"} 0. That, in addition to the Duties of Customs collected in accordance with the Schedule to the Customs Tariff 1921-1930, as proposed to be amended by Tariff Proposals, there be imposed, on and after the second day of September, One thousand nine hundred and thirty-two, at nine o'clock in the forenoon, reckoned according to standard time in the Territory for the Scat of Government, a special duty of Customs at the rate of fifty per centum of the amount of duty calculated in accordance with the duties imposed by the Customs Tariff 1921-1930 as proposed to be 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 which were exported from the country of export after the third day of April, One thousand nine hundred and thirty, and which are entered for home consumption on and after the said second day of September, One thousand nine hundred and thirty-two ; That in this Resolution " Tariff Proposals " shall mean the Tariff Proposals introduced into the House of Representatives on the third day of May, One thousand nine hundred and thirty-two, and shall include any amendment of those proposals and any Tariff Proposal introduced into the House of Representatives subsequent to that date ; and That, excepting by mutual agreement or until after six months' notice has been given to the Government of the Dominion of New Zealand, nothing in this resolution shall affect any goods the produce or manufacture of the Dominion of New Zealand entering the Commonwealth of Australia from the Dominion of New Zealand. I do not propose to speak at length on the tariff resolutions now submitted to the committee. The resolution covering import duties provides for reductions in duty in respect of 23 classes of goods affecting 34 items and sub-items. A memorandum which has been distributed to honorable members, shows fully the alterations in detail. The variations have been made on the recommendation of the Tariff Board in conformity with the policy previously announced by the Government of following in broad principle the recommendations of that body. I shall briefly refer to some of the items in the schedule. Since assuming office, many representations have been made to the Government, particularly by or on behalf of country municipalities, seeking the admission, at concessional rates of duties, of crude oil engines. In order that the Government might be fully acquainted, with the position of this industry the' matter was referred to the Tariff Board, and the industry thoroughly investigated. As a result, the schedule now tabled makes provision for reduced duties on crude oil engines. The duties on engines not exceeding 100 horse-power have been brought back to 45 per cent. British, and 60 per cent, general, which rates are in accord with those imposed by the Bruce-Page administration. Provision is also made for duties of free British, 15 per cent, general on crude oil engines exceeding 100 horse-power, and by-law items have been framed which will give the Minister power to admit crude oil engines of foreign manufacture free of duty when in his opinion such action would not be detrimental to British manufacturers. The duties on galvanized iron have been reduced from 110s. per ton British, and 150s. per ton general, as imposed by the Scullin Government validated tariff to 90s. per ton British, and 130s. per ton general. The Scullin Government added a proviso to the item, that when the Minister was satisfied that in any one year the Australian requirements of galvanized iron had reached 60,000 tons the duties should he reduced to 90s. British, and 130s. general. The Tariff Board has since held a further inquiry into galvanized iron, and has recommended that the duties of 90s. per ton British, and 130s. per ton general be imposed provided that the present gross list price *ex* store he reduced from £26 10s. per ton to £25. The local manufacturers have agreed to this reduction, which is to operate from the 2nd September, 1932. This reduction in price following on the £2 reduction already in operation is substantial, and will be of considerable advantage to the primary producer. An inquiry has been conducted into the electrical machinery industry, and the duties previously operating have been considerably revised. The maximum duties now provided on this class of machinery are 45 per cent. British, 60 per cent, general, which are again in accord with the duties prevailing under the Pratten tariff. An innovation in the method of application of duties has been made by the provision in the case of induction type alternating current motors exceeding 150 horse-power of a sliding scale which gradually reduces the duties from the maximum of 45 per cent. British, 60 per cent, general, to a minimum of free British, 15 per cent, general. A similar principle has been adopted in connexion with transformers. I draw particular attention to the very substantial reduction in the duties imposed by the Scullin validating tariff on dairy coolers, pasteurizers, jacketed vats and tanks. The proposed duties are 22^ per cent. British, 35 per cent, general, as against 45 per cent. British, 60 per cent, general, previously operating. By the adoption of a different basis for the collection of duty on plain clear sheet glass, the duties will be considerably decreased. This will benefit the users of horticultural glass, such as tomatogrowers, while at the same time being of advantage to the building industry. Provision has been made for deferred duties, which in accordance with the provisions of section 11 of the customs tariff, may be applied when the Australian manufacturer is in a position to supply reasonable quantities of plain clear sheet glass of satisfactory quality. Deferred duties, which were provided in respect of vessels over 1,000 tons gross register, and of certain pipes and tubes not exceeding 3 inch internal diameter have been deleted. In its report on vessels the Tariff Board expressed the opinion that the commercial manufacture in Australia of vessels over 1,000 tons gross register is not likely, in the near future, and there is therefore no reason for the inclusion in the tariff of a deferred duty on such vessels. The Tariff Board is also of opinion that the continuance of the provision for deferred duties on pipes and tubes would lead to further unwise efforts towards local manufacture when under existing conditions this industry would be uneconomic. Information elicited at the public inquiry held by the board, demonstrated that with the present limited demand a protection of 75 per cent., made up of an import duty 40 per cent., exchange 25 per cent., and' primage 10 per cent., against the United Kingdom, would be insufficient in some cases. The board does not consider that local manufacture will not be a commercial proposition should the demand revive, but the increased demand can only be brought about if costs of production are brought more- into line with costs in other parts of the world. Honorable members will notice that an alteration has been made in the wording of the sub-item covering cotton yarns; but this has been done solely for administrative purposes, to give effect to what was originally the intention of the item. Duties have been reduced on cotton tweeds, which resemble woollen piece goods in pattern, design or appearance, but the weight limit in the sub-item has been altered from 5 oz. to 3 oz. per square yard, which brings the weight into line with the weight of woollen piece goods. This will result in increased duties on cotton tweeds between these weights. An examination of the memorandum supplied to honorable members will indicate that, in many cases, such as woollen piece goods, apparel n.e.i., churns, cheese presses, &c., cement-making and roadmaking machinery, &c, machinery n.e.i., motive power machinery n.e.i., refractory bricks, and plain clear sheet glass, the duties have been brought down to the level of the duties in force under the BrucePage Government, whilein other cases, that is to say, matches, cotton tweeds, and knitted piece goods, the duties have been reduced below those imposed by the 1921-28 tariff. This definitely indicates that the present Government's tariff policy tends towards lower duties, but it must not be construed as indicating that the Government intends to depart from the policy of protection. In no case, in the schedule just tabled, has the Government reduced duties below those recommended by the Tariff Board as being necessary for the protection of the particular industry. This Government believes in the protection of industries which can be economically established and efficiently carried on in this country, but favours the minimum protection necessary for that purpose. The resolution dealing with special duties has the effect of removing those duties from the following lines: - 105 (aa) (2). - Knitted piece goods. 109. - Artificial flowers. 1 10. - Apparel. 116. - Parasols, sunshades and umbrellas. 231 (c).- Putty. 231 (g). - Paints and colours. 232 (a). - Varnishes, lacquers. 325. - Leather manufactures. 326. - Belting. 328. - Rubber sandshoes, goloshes, &c. 32!). - Leather boots and shoes, &c. 338 (a). - Advertising matter, &c. 340 (a) (b) (c). - Stationery and Manufactures of paper. 376 (a) (b) (c) and (f). - Bags, baskets, boxes, &c. 380 (a) (1). - Brooms, whisks, mops. 381 (f). - Brushes, hair, cloth, tooth, nail and varnish. 430. - Straw envelopes. The previous Government imposed special duties on 58 lines of goods, and it will be remembered that previously the Government removed this restriction on 22 lines. Action taken to-day removes the special duties from a further seventeen lines. Based on the import figures for the year 1930-31, the value of the goods affected annually by the special duties in operation prior to the present resolution was £2,237,183, while the value of the goods which will now be affected, again based on the 1930-31. figures, is £1,176,410. The special duties have been retained on what might be termed luxury goods and on goods imported principally from countries with which Australia has an adverse trade balance. Progress reported. {: .page-start } page 120 {:#debate-26} ### SOUTH AUSTRALIA GRANT BILL 1932 Message recommending appropriation reported. *In committee* (Consideration of GovernorGeneral's message) : {: #debate-26-s0 .speaker-F4O} ##### Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP -- I move - >That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund a sum for the purposes of financial assistance to the State of South Australia. I have submitted this resolution to enable the bill to be broughtup, and the first reading to be carried. We propose to move the second reading at a later stage. {: #debate-26-s1 .speaker-JOM} ##### Mr BEASLEY:
West Sydney -- I am not prepared to accept such statements as the right honorable the Prime Minister has just made. The phrase " at a later stage " is too indefinite. Apparently, the Prime Minister has decided that the members of the party of which I am the leader are not to be informed in advance of the order in which business is to be taken, and must be content to be guided solely by the notice-paper. I have had sufficient parliamentary experience to know that the order of Government business must be changed from time to time to meet the convenience of the Government; but it now appears that the members of the party with which I am associated are to be left without information of such changes; we are not to be informed in advance of the order in which business is to be taken. It is not my intention to accept purely formal and vague notifications of the character just given. Honorable members should know from day to day the nature of the business the House is to be asked to discuss, and I shall oppose this motion until more definite information is conveyed to the committee. {: #debate-26-s2 .speaker-F4O} ##### Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP -- The honorable member for West Sydney **(Mr. Beasley)** is not justified in saying that I propose to leave the members of his party without information. I intend at all times to extend to them the courtesy to which all honorable members are entitled, and to supply them, so far as I can, with any information at my disposal with respect to the order in which Government business is to be taken. The intention in this instance is to take the bill to the firstreading stage, so- that the measure may be circulated, and honorable members may have the information which the honorable member for West Sydney is now seeking. If the bill is introduced and the firstreading stage passed, I propose to move the second reading on Wednesday next. {: #debate-26-s3 .speaker-F4U} ##### Mr FORDE:
Capricornia .- As the Prime Minister **(Mr. Lyons)** proposes to take this measure up to the firstreading ' stage, and to make the second reading an order of the day for Wednesday next, I do not intend to oppose the motion; but the members of the Opposition will insist on every opportunity being given to fully consider the measure before it is passed by the House. {: #debate-26-s4 .speaker-JOM} ##### Mr BEASLEY:
West Sydney -- The right honorable the Prime Minister has given the committee some additional information as a result of the complaint which I have made. I appreciate the remarks of the Deputy Leader of the Opposition **(Mr. Forde),** and I trust that he will assist honorable members in this corner, who are determined to know exactly the order in which Government business is to be taken. If the Government fails to recognize the members of this party as we think we should be recognized, I trust that he will co-operate with us in any action which we may take with the object of compelling the Government to recognize our position. We have now been informed that the second reading of the bill will be taken on Wednesday next, and honorable members will come prepared, to discuss its provisions then. We accept the statement of the Prime Minister that these bills will be discussed when Parliament meets next Wednesday, and that no other business will precede them. We shall therefore come here next Wednesday prepared to discuss this particular bill and the others which the Prime Minister has mentioned. {: #debate-26-s5 .speaker-F4O} ##### Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP -- I have said that I shall extend every courtesy to all honorable members alike, and so far as possible inform them what business is to come forward; but I am not. prepared to accept direction or dictation from the honorable member for West Sydney **(Mr. Beasley)** as to what business shall be proceeded with. It is the intention of the Government to proceed with this measure on Wednesday next, though, of course, circumstances may arise which will compel us to vary that procedure. The Government at all times has the right to decide the order of business, but in doing that we shall extend every courtesy to honorable members generally. {: #debate-26-s6 .speaker-L08} ##### Mr ROSEVEAR:
Dalley .- I think that the honorable member for West Sydney **(Mr. Beasley)** has been misunderstood in respect of his demand, on behalf of those whom he represents. {: .speaker-KEV} ##### Mr Fenton: -- The honorable member for West Sydney should have made a request, not a demand. {: .speaker-L08} ##### Mr ROSEVEAR: -- His contention is that we, the paid representatives of the people, should have the opportunity to make ourselves conversant with any subject which we are to be asked to discuss, and that, therefore, reasonable notice of any discussion that is to take place should be given to us. {: .speaker-F4O} ##### Mr Lyons: -- We shall ensure that honorable members will receive reasonable notice. {: .speaker-L08} ##### Mr ROSEVEAR: -- Since I have been in this Parliament I have been somewhat disillusioned upon many measures. _ This afternoon, the budget papers and the Estimates were brought down and placed on the table and ordered to be printed without honorable members being given any information as to their contents. Indeed, had the Prime Minister had his way, he would have used his steamroller majority to push through to-day the first item of Estimates. If there were any honour left in politics wo should be able to accept the word of the Leader of the Government or of- any other honorable member. But let me remind the Prime Minister that some time ago he promised honorable members a discussion on the proposals that were to be placed before the Imperial Economic Conference at Ottawa, a subject iti which we were deeply interested. On the 5th May last, he gave the solemn undertaking that before the delegates left for Ottawa to attend that all-important conference, honorable members would have an opportunity to discuss the policy of the Government and the matters to be placed before that conference; yet that promise was not kept. {: #debate-26-s7 .speaker-10000} ##### The CHAIRMAN: -- The honorable member must confine his remarks to the question before the committee. {: .speaker-L08} ##### Mr ROSEVEAR: -- We are demanding that we be given proper notice when certain matters are to be discussed in this chamber, so that, when the discussion takes place, we shall have a proper grip of the subject. The Prime Minister gave an assurance that a discussion would take place on the matters to be placed before the Imperial Economic Conference at Ottawa. As he did not honour that promise, we are justified on this occasion in raising our protest, and making our position in this House felt, though we are admittedly a small party. We are small in numbers, but we would not lose by a comparison with members of the Government if intelligence were the criterion. Surely we should be able to rely on the word of the Prime Minister. If we are not to receive that recognition, to which we as a party and as individual members are entitled, we shall use every parliamentary form at our disposal to compel such recognition. "We are trying not to control the business of this chamber, but to conserve the rights of individual members and parties. {: #debate-26-s8 .speaker-KJQ} ##### Mr JAMES:
Hunter .- It is only reasonable and fair that the Prime Minister should give proper recognition to the leader of this section in respect of matters that are to be brought before the chamber. It is apparent that other sections are given every consideration by the Government, yet on many occasions this party has been utterly ignored. The leader of this party should be given the facilities enjoyed by the leaders of other parties. Yet when the budget speech was being made, a copy of it was given to the Leader of the Opposition **(Mr. Scullin)** and another to the Leader of the Country party **(Dr. Earle Page),** and the leader of this party received none. On many other occasions this party has been ignored by the Government; "We receive proper recognition from the Chair and in the *Ilansard* record, and surely we should begiven some consideration by th© Prime Minister. We claim that ordinary courtesy should be extended to us, and we shall not fail to lodge our protest at any time when business is brought before this chamber without an intimation being given in advance to the leader of our party. {: #debate-26-s9 .speaker-K9A} ##### Mr GANDER:
Reid .- I protest against the action of the Prime Minister **(Mr. Lyons)** in not giving the leader of the party to which I belong due notice of what is to transpire in this chamber. Not long since, on the opening of the new broadcasting system, a station was placed at the disposal of the Prime Minister **(Mr. Lyons),** the Leader of the Opposition **(Mr. Scullin),** and the Leader of the Country party **(Dr. Earle Page),** a similar privilege being denied the leader of our party. {: .speaker-10000} ##### The CHAIRMAN: -- The honorable member's remarks are not relevant to the motion before the Chair. {: .speaker-K9A} ##### Mr GANDER: -- Nevertheless, I am mentioning facts. When the Government notifies the Leader of the Opposition and the Leader of the Country party about the business of Parliament, the same courtesy should be extended to the leader of our party. As a party, we are recognized by the Chair, and in the *Hansard* record. We therefore request - if the word " demand " is too severe - that the Prime Minister should, on future occasions, give proper recognition to this section. The other day, the AttorneyGeneral **(Mr. Latham)** recognized this party by writing to its leader asking it to appoint a representative to sit on a committee to be constituted to make an, inquiry in connexion with the bankruptcy law. He and other Ministers are prepared to give proper recognition to this party, but the Prime Minister seems to go out of his way to deny us the courtesy to which we, as a party, are entitled, in view of the fact' that we represent 540,000 electors of New South. Wales, which is the largest State of the Commonwealth. {: #debate-26-s10 .speaker-F4O} ##### Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP -- I think that I have answered the complaint about information not being given to honorable members generally, and I shall deal now with the claim that recognition should be extended to the group that sits in the corner. {: .speaker-KX7} ##### Mr Ward: -- It is a party, not a group. {: .speaker-F4O} ##### Mr LYONS: -- The Government recognizes the Opposition proper, led by the Leader of the Opposition **(Mr. Scullin),** and also the Country party, which has developed over a long period in this country, and whose members are representatives of not one State only but of many State constituencies. We cannot go beyond that, and recognize every group in this chamber. If the claims of honorable members opposite were granted, we should have to extend the same recognition to the honorable member for Angas **(Mr. Gabb),** or the honorable member for Fremantle **(Mr. Watson).** I cannot recognize, as parties, every small section, but to all honorable members I shall extend every courtesy. As to the distribution of copies of the budget speech, I only wish that it had been possible to distribute a copy to every honorable member, and then I should have been saved the trouble of reading it. Mr.ROSEVEAR (Dalley) [6.18].- I resent the statement of the Prime Minister **(Mr. Lyons).** He has clearly admitted, despite what he said earlier, that he has studiously ignored honorable members who sit in this corner. He refuses to recognize the leader of this party. He recognizes only the leaders of the Opposition **(Mr. Scullin)** and the Country party **(Dr. Earle Page),** to whom we owe no allegiance. It is remarkable that the Leader of the Country party should have extended to him the same recognition as is given to the Leader of the Opposition, with whom he jointly sits in opposition, because, if the press is to be believed, he recently stated that he intended to demand the right to be known as the Leader of the Opposition proper. {: .speaker-KXT} ##### Mr Paterson: -- The honorable member should not believe everything that he reads in the press. Mr.ROSEVEAR. - Despite the earlier statement of the Prime Minister that he has on all occasions recognized our leader, his admission now that he cannot recognize other than the leaders of the Opposition and' the Country party is a clear intimation that he intends to continue his attitude of indifference and disrespect to the members of this party. We shall return the compliment with interest'. The **CHAIRMAN (Mr. Bell).Order!** I cannot allow the discussion to continue along these lines. Any debate should be in the direction of opposition to the motion. I admit that, at the outset of the discussion I allowed a certain amount of latitude, for the reason that there appeared to be some justification for the protest of the honorable member for West Sydney **(Mr. Beasley)** that he had been ignored. But that debate has now gone further than it ought to have proceeded. I hope that honorable members will recognize that the position occupied by the cornerparty has nothing to do with the motion. {: .speaker-L08} ##### Mr ROSEVEAR: -- The essence of our complaint is, that the leader of our party is being studiously ignored by the Prime Minister. If our request for recognition is not acceded to, we shall be obliged to adopt other methods to achieve our object. It is unfortunate that such a position . should have arisen, when it could quite easily have been avoided by the Prime Minister exhibiting to our party that courtesy which he shows to other party leaders whether they be off-sided allies of the Government or an Opposition leader that will not fight. Question resolved in the affirmative. Resolution reported. Standing Orders suspended; resolution adopted. *Ordered -* >That **Mr. Lyons** and **Mr. Fenton** do prepare and bring in a bill to carry out the foregoing resolution. Bill brought up by **Mr. Lyons,** and read a first time. {: .page-start } page 123 {:#debate-27} ### WESTERN AUSTRALIA GRANT BILL, 1932 Message recommending appropriation reported. *In committee* (Consideration of GovernorGeneral's message) : Motion (by **Mr. Lyons)** agreed to - : >That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund a sum for the purposes of financial assistance to the State of Western Australia. Resolution reported. Standing Orders suspended; resolution adopted. *Ordered -* >That **Mr. Lyons** -and **Mr. Fenton** do prepare and bring in a bill to carry out the foregoing resolution. Bill brought up by **Mr. Lyons,** and read a first time. Motion (by **Mr. Lyons)** proposed - >That the second reading of the bill be made an order of the day for the next sitting. {: #debate-27-s0 .speaker-JOM} ##### Mr BEASLEY:
West Sydney -- The Prime Minister **(Mr. Lyons)** is bunching these measures together in such a way that we cannot know what procedure is to be followed next Wednesday. Are all of these bills to be proceeded with then or will their consideration be spread over several sitting days? {: #debate-27-s1 .speaker-F4O} ##### Mr LYONS:
Prime Minister and Treasurer · Wilmot · UAP -- This is purely a formal motion, the object of which is to put the measures on the notice-paper. I have already said that it is intended that they shall be proceeded with next Wednesday. It is hoped that **Mr. Speaker** will then permit one debate, embracing all three bills, on the principle of giving Commonwealth assistance to necessitous States. Question resolved in the affirmative. {: .page-start } page 124 {:#debate-28} ### TASMANIA GRANT BILL 1932 Message recommending appropriation reported. *In committee* (Consideration of Governor-General's message) : Motion (by **Mr. Lyons)** agreed to - >That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund a sum for the purposes of financial assistance to the State of Tasmania. Resolution reported. Standing Orders suspended; resolution adopted. *Ordered -* >That **Mr. Lyons** and **Mr. Fenton** do prepare and bring in a bill to carry out the foregoing resolution. Bill brought up by **Mr. Lyons,and** read a first time. {: .page-start } page 124 {:#debate-29} ### TARIFF PROPOSALS (No. 3) {:#subdebate-29-0} #### Customs Duties *In Committee of Ways and Means:* Consideration resumed from the 31st August, 1932 *(vide* page 66), on motion by **Mr. Gullett** - >That the schedule to the Customs Tariff be amended - Division 5 - Textiles, Felts and Furs, andManufactures Thereof, and Attire. {:#subdebate-29-1} #### Item 106 (Buttons) {: #subdebate-29-1-s0 .speaker-K6Q} ##### Mr BERNARD CORSER:
Wide Bay -- This item has been the subject of a certain amount of criticism by honorable members. Whatever may be said on general principles in regard to a tariff item, it is generally admitted by all sections of the House that, if a commodity can be produced without an excessive degree of protection, and so as to permit of reasonable importations, that aspect of the matter ought not to be overlooked. An inducement recently was held out with the object of promoting the manufacture of this article. It is known that the manufacturing side is not hampered because of a shortage of finance. The industry was established under protection given by a recent government, and it appeared that the funds necessary for its expansion were assured. A firm reputed for its business methods assumed a controlling interest in the manufacture of pearl buttons in Australia. Here is an industry that is converting into a finished secondary product raw material obtained in Australian waters, and we are asked to abolish it on the pretext that we shall be offending Japan if we do not allow it to exploit the Australian market. The manufacturers of shirts and pyjamas assert that an injustice would be done to Japan if we do not deprive of their employment 65 men now engaged in the manufacture of buttons and render idle machinery installed at a cost of £20,000 - the first unit of the plant necessary to supply all the requirements of the Australian market and a surplus for export. We are told that buttons can be produced in Japan more cheaply than in Australia. If that contention were carried to its logical conclusion, we should prevent the manufacture of shirts and pyjamas in the Commonwealth. The honorable member for Wentworth **(Mr. E. J. Harrison)** stated that a duty of 1,100 per cent, is imposed on Japanese buttons. Those buttons are produced, not from pearl shell such as is obtained on the Australian coast, but from shell almost as fragile and worthless as egg shell or snail shell. Such rubbish should not be admitted to the Commonwealth, and the manufacturers of garments who use it are robbing the workers. It would be more just to the consumer to use a serviceable Australian button, even at greater cost. But the manufacturers demand the opportunity to use a rotten Japanese product so that they may make a greater profit out of the unfortunate workers who wear their garments. This committee should protect the Australian consumer against the introduction of worthless buttons that may hold together in the factory but will scarcely survive the washtub. Honorable members have clamoured for efficiency in Australian secondary production. I have visited the button factory and seen proof of its efficiency. The operatives are being trained by five experts engaged from Europe. The honorable member for Wentworth has not been fair to this promising enterprise. He has not given credit to the firm for what it has already achieved or. for its readiness to agree that buttons made in Great Britain shall be admitted free of duty. Apparently he insists upon cheap Japanese stuff. If the policy of encouraging secondary industries is to continue,' we should at least assist to consolidate an enterprise that has been started under those conditions of efficiency which the Government has stipulated. There is no justification for rendering idle the employees and plant of this factory. As for the pretext that the Japanese might be offended by a heavy duty on their buttons, they continue to buy our wool, although members of their race are not admitted to Australia except by permit. They are not likely to be offended by a resolve on the part of this Parliament to preserve to Australian workmen the industry of manufacturing a local raw material into a finished product. I appeal to the committee not to destroy an industry of great promise, and do an injustice to Aus tralian workmen and a firm that has invested capital in the establishment of an enterprise which is already a credit to all concerned. {: #subdebate-29-1-s1 .speaker-JUD} ##### Mr DEIN:
Lang .- As a result of my visit to the button factory and the discussion which has taken place on this item, I am convinced that the duty imposed by the Scullin Government in 1931 was excessive, and that the duty imposed by the present Government early this year is totally inadequate. An intermediate rate would probably do justice to the industry. When this matter was brought to the notice of the Minister some months ago, he was sufficiently impressed to promise to refer the item back to the Tariff Board. If the case presented by the manufacturers had been without merit he would not have given that undertaking. Unfortunately, although the item was referred back to the board it was not made the subject of further public inquiry. This industry was commenced about eighteen months ago. A few hands were employed immediately. At the present time the number- of those permanently engaged is 65, and no vote of mine in this committee will deprive them of their positions unless they can be established in some other walk in life. According to the honorable member for Wentworth **(Mr. E. J. Harrison),** this industry is uneconomic. But can the honorable member tell me of any secondary industry in Australia at the present time which is economic? All our secondary industries are passing through a time whey they are being hard pressed, and the fact that at the moment the pearl shell button industry may seem uneconomic to the honorable member for Wentworth, is no justification for throwing a number of employees on the industrial scrap-heap. The honorable member for Forrest **(Mr. Prowse),** who waxed eloquent in his admiration for the Japanese, is remarkably consistent in *hia* inconsistency. A few months ago we heard him holding out for the highest possible duties on tobacco. To-day he is . a rabid freetrader. The existing duties on pearl shell buttons are totally inadequate, and I am opposed to the Government's proposal in this respect, as I am in regard to other proposals contained in this schedule. {: .speaker-KNP} ##### Mr Maxwell: -- What evidence has the honorable member of the inadequacy of the rates proposed ? {: .speaker-JUD} ##### Mr DEIN: -- If we are to allow the Japanese to send their rubbish to Australia to compete with good Australianmade buttons, why not allow them to send in all sorts of other rubbish to the detriment of other articles of Australian manufacture! I move - That the item be postponed. If that motion should be carried,I want it to be regarded as ' an instruction from the committee to the Government to impose rates of duty as follows: - British, free; intermediate and general, up to 40 line, per line per gross *id.* and 25 per cent, ad valorem. I am suggesting a compromise between an extremely high duty and an extremely low duty, and if my proposal is accepted it will be carrying out the decisions arrived at by the Imperial Economic Conference at Ottawa. The Government's proposal imposes a duty of 15 per cent, on British importations. I would allow them to come in free. I feel, however, that the committee is justified in affording the local manufacturers sufficient protection to keep out foreign buttons, particularly the rubbish from Japan, and thus maintain in employment those already engaged in the industry. It may be that the industry itself has been wrongly set up, but we cannot rectify that position by doing another wrong. Two wrongs will not make a right. The industry is already here, and we should allow it to live, in the interests of those who are employed in it. After what I regard as a fair and unbiased examination of the position, I have come to the following conclusions: The industry is conducted upon sound financial lines, its equipment is modern and efficient, it affords full-time employment to 65 employees, and, given adequate protection, the extent of employment could be increased by as much as 400 per cent. Plans have already been prepared for that .future development. A continuance of its activities would provide a market for raw materials that can be supplied in any quantity from Australian waters; The manufacture of pearl shell buttons having already been well established in Australia, it is our duty to encourage its development rather than let the industry disappear, and inflict great hardship on persons already employed in it, at the same time depriving hundreds of persons of the prospect of employment. {: #subdebate-29-1-s2 .speaker-KXT} ##### Mr PATERSON:
Gippsland -- When the previous Government imposed high duties on pearl shell buttons I opposed that as strongly as I could, and I am only too glad to support the present Government's proposals to reduce the rates very considerably. It must be borne in mind that, although the ad valorem rates of 15, 20 and 25 per cent, appear to some honorable members to be low, primage and exchange have to be added to them. Actually the protection against Great Britain is 52£ per cent, instead of 15 per cent., with primage, exchange and the statutory addition of 10 per cent, on the f.o.b. price made by the Customs Department. I should like to know from the Minister in charge how the Government reconciles these duties of 15 per cent. British and 25 per cent, general with the undertaking given at the Ottawa Conference that in no case would the duties on British goods be higher than were recommended by the Tariff Board, which, I understand, recommended that the rates of duty on pearl buttons should be British free and foreign 15 per cent. The rates proposed by the Government are a welcome reduction, but they are still higher than were recommended by the Tariff Board. I understand that the exchange against Japan is 15 per cent., which really means that on the present proposals Great Britain has no preference against Japan. If to the 15 per cent, duty against Great Britain is added 25 per cent, exchange, and 10 per cent, primage, and to the 25 per cent, against Japan, plus 15 per cent, exchange and 10 per cent, primage, the gross amount in the two columns of the schedule are equal. I do not understand why some honorable members appear to think that we are engaging in an almost immoral practice if we buy a few buttons from a country like Japan. We must remember that Japan buys over 600,000 bales of wool from Australia. Last year, Japan was our second largest customer for wool. Great Britain purchased about 32 per cent. and Japan 20 per cent. {: .speaker-K9A} ##### Mr Gander: -Would Japan buy wool from Australia if it could produce its own wool? {: .speaker-KXT} ##### Mr PATERSON: -- Adjustments of credit may be made from time to time as between one country and another, but in the long run goods can be paid for only by goods, and why we should refuse to take the goods that Japan produces in payment for the goods that Japan buys from us passes my intelligence altogether. If it is true that the Japanese buttons are trashy compared with the splendid articles we are making in Australia, surely ours ought to be able to defeat the competition ofinferior articles. {: #subdebate-29-1-s3 .speaker-JVT} ##### Mr NELSON:
Northern Territory -- The arguments put forward by honorable members of the Country party, with the exception of the honorable member for Wide Bay **(Mr. Corser),** when dealing with the protection that should be afforded to Australian industries, are incomprehensible. The honorable member for Gippsland **(Mr. Paterson)** did not tell the committee that duties of £8 per ton on onions, 6d. and 7d. per lb. on butter, 2s. 6d. per cwt. on potatoes, and suchlike duties on primary products, are excessive. I remind the honorable member that he cannot have things both ways. The possibilities of the industry covered by the item under consideration are tremendous, and it is well for the committee to understand something about the industry. The report of the Administrator for the Northern Territory shows that the value of the mother of pearl exported from Darwin alone for the year ended the 30th June, 1931, amounted to £81,520, and Darwin is the smallest centre of production in Australia. More than three times the quantity of shell now produced could be supplied, if the embargo were lifted. The primary industry is in a difficult position. Last week news came from the United States of America, which is one of the principal buyers of Australian pearl shell, that the banks had refused to finance the purchase of shell. Australia meets 80 per cent. of the world's requirements of mother of pearl, and in that respect the industry needs no assistance in competing in the overseas markets ; but protection is urgently necessary against the importation of the spurious stuff that is placed on the Australian market. The average number of buttons on a working man's shirt is about four, and, therefore, the additional cost of each garment due to the use of Australianmade buttons of high quality is infinitesimal. This Australian industry, if adequately protected, could supply 80 per cent. of the world's demand for the finished product. The superiority of the Australian article is beyond doubt. Those engaged in pearling activities in this country now dump hundreds of tons of shell into the sea, because they have a restricted market for their output. Sometimes pearl shell is found to be worm eaten in the heel, and this defect renders it second class. Owing to the restrictions imposed by the Commonwealth authorities, this otherwise perfectly good shell is wasted, although it is infinitely superior to any trochus shell that the world produces. {: .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- All the more reason why the industry should be able to export. {: .speaker-JVT} ##### Mr NELSON: -- It is prepared to do that, but it is not permitted to do so. The pearlers in Darwin are able to produce thousands of tons a year, but their output is limited by the Government to 250 tons. {: .speaker-KRD} ##### Mr McGrath: -- The honorable member remained quiet about that. {: .speaker-JVT} ##### Mr NELSON: -- I was in touch with the pearlers all the time; but even if I had remained quiet, the restriction would not have been justified. Some of the pearlers lost as much as £2,400 on last year's operations, because of the restriction placed upon them. I suggest that the pearlers themselves should be allowed to decide what quantities they should export. Since the primary industry is capable of supplying the whole of the raw material required for the secondary industry, and the shell is superior to that produced elsewhere, it should not be hampered by the importation of cheap and nasty articles from overseas. If honorable members are consistent, they will give the industry at least sufficient protection to enable both the raw =material and the finished article to be exported. It can be proved positively that foreigners fish for shell within three miles of the coastline, instead of confining their operations to international waters. They take all the shell they require, and yet the Australian pearler is not allowed to take more than a fixed quantity. .Can such a position be justified? The fact remains that our pearlers could obtain thousands of tons of shell, and market it in London and on the Continent of Europe, if they were permitted to do so. It should not be imagined that the greater part of the shell is used for the manufacture of buttons for the shirts of the -workers. Shell is also employed extensively in the manufacture of many other articles, including -women's wear. Those who require good buttons will always prefer those made of mother of pearl. Buttons of the " egg-shell " type are most inferior. We should make up our minds that the Australian pearl shell industry can, and must, dominate the world's market, and that result can only be achieved by assisting both the primary and the secondary industries. I am sure that if adequate protection were afforded this industry, it would soon become established on such a sound basis that it would require no protection at all. I trust that the committee will agree to the restoration of the rates provided in the Scullin tariff. {: #subdebate-29-1-s4 .speaker-KXQ} ##### Mr ARCHDALE PARKHILL:
Minister for the Interior · Warringah · UAP -- If this industry can be justified as a sound economic proposition that is deserving of protection, there is no industry on the face of the globe that could not be described as sound, provided there was. a Parliament that would agree to such protection as is asked for, and there .were consumers who were prepared to pay the price. In giving evidence before the Tariff Board, the representative of this company stated that it was impossible to establish the industry with less than 500 per cent, protection, and the present protection is equivalent to 1,100 per cent. Such a duty should form no part of a sound protective policy. The report of the board is dated the 11th November, 1931, and there is a further statement among the papers of the Assistant Minister **(Mr. Perkins)** from the chairman of the board that, despite all the representations made to the Minister, the board was still of the same opinion as that expressed in its report. {: .speaker-KX9} ##### Mr Watkins: -- Should the board "run" the Parliament? {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- It would be absurd to suggest that it should. I am prepared to accept the board's recommendation, because it is impossible for me, or any other member, to go as closely as does the Tariff Board into the merits of individual cases, but I do not regard the board's decisions as infallible. I see nothing wrong in its report regarding pearl shell, and I am ready to accept its recommendation as being the result of an intelligent and painstaking investigation. *Sitting suspended from 6.15 to 8 p.m.* {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- I repeat that although I do not accept the Tariff Board's report as being always infallible, I regard it as a useful guide because it represents the well-reasoned conclusions of men of acknowledged ability after a careful investigation of subjects referred to them for inquiry. {: .speaker-JOM} ##### Mr Beasley: -- Then how would the Minister discriminate between the various reports submitted by the board? {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- By exercising my own judgment and knowledge of the subject. I now direct the attention of honorable members to the board's summary of evidence given by several witnesses examined when the board inquired into this subject last year. The first was. **Mr. W.** Swinton, shirt and pyjama manufacturer, of 111 Campbellstreet, Sydney. The board states - >Witness's Ann has an extremely large output, manufacturing approximately 10.200 garments weekly in the shirt and pyjama section requiring the employment of 200 operatives, with a total weekly wage of £450. The total cost of imported buttons used by the firm in twelve months is £967. Working on the basis of the price list of the Pearl Button Manufacturing Company Limited of the 10th June, 1.931, the cost of the same quantity of buttons of local manufacture would be £5,540. The use of locally produced buttons would, therefore, impose on the firm an additional burden of £4,579 per annum. {: #subdebate-29-1-s5 .speaker-F4U} ##### Mr FORDE: -- Prices- have been cut by one-half since then, {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- The honorable member would have us believe that he has ari intimate knowledge of the industry, but his interjection is not a true statement of the position. The board states - >In conclusion the witness said - "While I am, as a manufacturer, an advocate of protection for secondary industries, I look upon the present duty, as one that is outside the protectionist class, and is really prohibitive, and results in special consideration being given to a very small section of trade at a" cost quite beyond the ability of the larger industries using the products to carry, and is one of those duties which is a factor in making it necessary for secondary industries in Australia to seek higher and still higher protection. . . . Because of the absence of competition from either within or without Australia a monopoly will be created, which will be able to take practically full advantage of a prohibitive duty equal in some cases to 1,100 per cent., and to increase the price to the wearer of shirts." Full weight must be given to the evidence of this witness, who is a protectionist and a manufacturer. He stated that the duties brought in by the Scullin Government would mean the imposition of an additional burden of £5,000 a year on his firm. Another witness, **Mr. E.** Grotjan, senior member of the firm of Grotjan and Company, of 3 Hosier-lane, Melbourne, informed the board that the protection afforded by the duties brought, in by the Scullin Government in respect of the cheaper class of button, namely, the sazae ken, dobu and tamagai ranged from 375 per cent, to 1,100 per cent, and in respect of the trochus shell button from 260 per cent, to 280 per cent. Still another witness, **Mr. A.** T. Palmer, representing Dudfields' Proprietary Limited, of 19 McKillop-street, Melbourne, and also of Sydney, informed the board - >The pearl button industry would provide only a small measure of employment. On the other hand, the cost of such an industry would be borne by the important manufacturing clothing industry which employs 41,000 persons. This means that to encourage an industry giving employment to anything from 50 to 70 persons, the clothing manufacturing industries, employing over 41,000 persons, would be unfairly penalized. **Mr. R.** 3ST. Shimmin, the production director of Pelaco Limited, shirt and pyjama manufacturers, Richmond, Victoria, stated in the course of his evidence: - >When the duty was 15 per cent., the company paid approximately £2,000 for imported buttons, which represented .56 per cent, of the company's turnover. Under the new duties, the cost of imported buttons would be about £5,000. If locally made buttons were used, the cost would be about £6,000, representing 2.5 per cent, of the value of the company's turnover. > >In the year 1930, Pelaco Limited showed a substantial loss. The increased cost of buttons will mean a greater loss for the current year. If honorable members wish to avoid a loss of employment in the clothing industry they should take the broader view, and consider the position of those industrial concerns which, under existing conditions, are losing money from year to year. Many of them have been compelled, by stress of circumstances, to restrict their activities. Another witness before the board, **Mr. L.** W. Torode, a director of T. A. Maxwell Proprietary Limited, manufacturers of shirts and pyjamas, Carlton, Victoria, told the board that - >The cost of the buttons under the former rate of duty of 15 per cent, was about £500 per annum. Under the proposed rates of duty the cost of imported buttons would be increased to £1,900. If local buttons were used, the cost would be £2,250 per annum. In the latter case the garment manufacturer's cost would 'be burdened by an additional £1,750 per annum. Surely that should be sufficient to convince honorable members of the wisdom of adopting the new duties imposed by ; the Government. I come now to the following comments made by the Tariff Board itself : - >Based on the figure last-mentioned, and taking the landed duty paid cost of importations under the former duty of 15 per cent, at £40,000 per annum, the quantity of pearl buttons represented by the Australian requirements would be 640,000 gross per annum. > >The above table shows that imported buttons which previously cost £2,012 would, under the proposed duties, cost £5,265. If Australian mother-of-pearl buttons were used, the cost would be £6,272. If, however, Shark's Bay shell buttons were used to replace the Same buttons, the total cost would be £6)128, which represents an increase in cost of £4,1.16 or over 200 per cent. These views, I remind the committee, are opinions expressed not by manufacturers but by members of the board, and I submit that they clearly indicate that the Scullin tariff would impose an unduly heavy burden upon the companies concerned and, through them, upon the general public. The board went on to say - >Taking all these aspects into consideration, the board is forced to the conclusion that the Australian company cannot succeed in displacing more than half of the imported pearl buttons, i.e., even with the assistance of the proposed high duties. The effect of the smaller output would obviously be higher cost of production which would militate against possible increase of production as time goes on. Another effect would be the reduction, by half, of the quantity of shell which the applicant company estimated it would use, a reduction in the employment which the company expected to provide, and a general lessening of the anticipated value of the industry to Australia. At the same time the disadvantage to users of buttons would not be diminished. I direct the attention of the honorable member for Northern Territory **(Mr. Nelson)** to this statement. Naturally enough, the honorable member is anxious that the wealth in the vicinity of the Darwin waters should be utilized to the fullest extent, but I put it to him that if ho votes for the higher duties, he will, in fact, be doing something to restrict the use of Australian pearl shell, and to that extent will do a disservice to the people he desires to assist. {: .speaker-KX9} ##### Mr Watkins: -- The honorable member for Northern Territory is a good Australian. That cannot be said of the ^Minister {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- While, in tariff matters, I am prepared to give preference to every efficient' Australian industry, I do not believe in the exploitation of Australian sentiment and patriotism. The Tariff Board goes, on to state - >Having regard to all the factors mentioned, the board is convinced that the -project to manufacture pearl buttons in Australia is ill conceived. It aims at making a class of button which is higher in price (in world acceptation ) than the vast majority of buttons in usual demand, and even the proposal to utilize Shark's Bay shell to manufacture a somewhat lower priced button does not justify its existence. It concludes with this recommendation - {: type="1" start="1"} 0. The proposed duties are excessive, and vary in terms of ad valorem equivalent from 160 per cent, to 965 per cent. The evidence shows that the local manufacturers would require to take advantage of the duties to their full extent. 1. The effect of the operation of the duties will be to increase the cost of pearl buttons to garment manufacturers by approximately 250 per cent. 2. The increased cost must dislocate industry and tend to create unemployment. 3. While the locally-made button is of good quality, it is considered that manufacturers should not be forced to use costly buttons when cheaper buttons have proved satisfactory for their purposes. It is a matter of the most poignant regret to me that I am not able to remove the burdens which press harshly on the public at the present time, and I will certainly never be a party to imposing further burdens on the people by means of duties which, as in this instance, range from 200 per cent, to 900 per cent., and of which the local industry would take full advantage. It must be evident to any one who has the welfare of the workers at heart that they cannot afford to bear impositions of the kind suggested. One honorable member opposite, speaking in support of high duties, said that low prices were of no account. The idea that cheapness was something to be sought after was, he said, entirely exploded. I wonder whether the honorable member puts that principle into operation in his own private shopping. I venture to think that he buys where he can get what he wants at the lowest price, and he is wise to do so. The theory of honorable members opposite is that the more a man pays for a thing the better it is for him. We have heard a good deal about the need for bringing back price levels to what they stood at in 1929. Apparently, the honorable member for Darling **(Mr. Blakeley)** believes that he will be doing his bit towards bringing prices back to the 1929 level if he insists on the workers paying twice as much for the pearl buttons used on their clothes. That is not my opinion. When the company which manufactures these buttons in Australia began operations it did not install the most up-to-date machinery. Now it claims that, having established itself, it is entitled to the Australian market, and suggests that when it has made sufficient money by selling its product at excessive prices it will put in modern plant. Surely it does not expect the Government to support a proposition of that kind. Honorable members opposite have claimed that the buttons imported into this country during .the last half -century have been rubbish. They speak as if all buttons except those made in Australia were of the worst possible quality. They overlook the fact that they themselves, and their parents before them, have been using such buttons for years. Only now, after a most assiduous canvass by the representatives of the local manufacturers, have they become aware of the demerits of the imported article. This argument has no weight with me, and it is evident that it has had no weight with the Tariff Board. The recommendation of the board cannot be overlooked. A very complete investigation was carried out, and the board's recommendations in respect of this industry are most emphatic. The Assistant Minister stated that representations on behalf of the industry were made to him, and that he was sufficiently impressed to forward those representations to the Tariff Board. Having perused that information, the chairman of the board has stated that there is no reason for altering the previous decision. {: .speaker-KNP} ##### Mr Maxwell: -- Why has a higher duty been imposed than that recommended by the board? {: .speaker-KXQ} ##### Mr ARCHDALE PARKHILL: -- Very few buttons are imported from Great Britain, so that ordinary preference considerations do not apply. Seeing that buttons would continue to be imported irrespective of the operations of the local manufacturers, the Government fixed the rate of duty so as to obtain some additional revenue from this source. Most of the pearl buttons imported come from Japan, and I join with the honorable member for Gippsland **(Mr. Paterson)** and other honorable members in supporting the principle that we should give favorable consideration to those countries which buy goods from us. I am a native of Australia, and I am just as keen as any one else to support Australian industries, but I am not prepared to support them merely because they are Australian. I claim the right to use my intelligence to determine whether an Australian industry is being conducted on a sound, economic basis. If it is, I shall support it as strongly as any one. The pearl button manufacturing industry in Australia is not on a sound, economic basis, and I will not' support it unfairly, nor can any one do so who has at heart the interests of the Australian public. **Mr.** WATKINS (Newcastle) [8.25 J.One might be pardoned, while listening to the debates on this item, for believing that this Parliament was anything but an Australian assembly. A good deal has been said about the report of the Tariff Board. That body inquired into matters relating to both trochus shell buttons and mother-of-pearl buttons. The only reason why the board has recommended that the duties be reduced is that Japan buys some wool from Australia. The comparisons of prices which have been made are not comparisons between one pearl button and another, but between pearl buttons and the cheapest rubbish that can be put on the market. Honorable members opposite have spoken of helping the working man. Their idea of helping him is to compel him to wear shirts on which the buttons will not last a week. The imported rubbish which they favour will not stand washing or mangling. The only imported pearl shell buttons which we see in Australia come from America. Cheap trochus shell buttons are brought here from Japan, but no pearl buttons come from that country. We are asking for a reasonable duty to protect the local industry, not from imported pearl buttons, but from the rubbish that serves only to cheat the public. This is an industry which could be established in every capital throughout Australia. The supply of mother-of-pearl round our coasts is unlimited, as the honorable member for the Northern Territory **(Mr. Nelson)** has told us. At the present time the shell is often dumped back into the sea, because there is no market for it. The industry provides employment for skilful operators, it uses the product of our own waters, and supplies an article for our own people. {: .speaker-KNP} ##### Mr Maxwell: -- Is it a fact that most of the raw material is obtained from our territorial waters by coloured labour? {: #subdebate-29-1-s6 .speaker-KX9} ##### Mr WATKINS: -- No. There is" a great difference between employing our own aborigines and employing Japanese for this class of work. In any case, the luggers used in the industry are owned by Australians; and if the colour line i3 to be drawn, surely our own natives are entitled to preference! {: .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- All the divers are Japanese. {: .speaker-KX9} ##### Mr WATKINS: -- That is not so. Pearl shell is obtainable in large quantities in Australian waters, and, by using it for the manufacture of buttons, we should be giving employment to our own people, as well as providing Australians with good buttons, instead of asking them to buy articles which are not fit to place on a shirt. The question for us to decide is whether Australians shall continue to dump pearl shell into the sea or make it into buttons for our people to wear. My vote shall be cast in favour of this industry, which I hope will spread until eventually the whole of Australia's requirements of pearl buttons are being produced in this country. Motherofpearl is used for the manufacture of articles other than buttons, and we should encourage Australians to develop these other branches of the pearl shell industry. I opposed the appointment of a tariff board because I saw at the time what it would mean. The Tariff Board has always reported in accordance with the policy of the government for the time_ being in power. In its summary the Tariff Board merely states that, in its opinion, the proposed duties are excessively high as against trochus shell, and that practically the whole of the buttons which are' imported into Australia come from Japan, and. that country is a large purchaser of Australian products. Yet do honorable members think that Japan would no longer buy our wool if we made our own buttons in this country? . I shall support these duties, because I believe that this industry should be established in order to provide employment for Australians. {: #subdebate-29-1-s7 .speaker-K9A} ##### Mr GANDER:
Reid .- In considering this item, we have to choose between an Australian industry and a Japanese industry. I rise in the interests of the Australian industry. One of the reasons advanced against these duties is that Japan buys Australian wool. Do honorable members think that Japan buys our wool because of her love for Australia ? Were J apan able to produce wool, she would not buy our wool; similarly, if we can produce buttons we should not gp to Japan for them. I was surprised to hear the Minister for the Interior **(Mr. Parkhill)** say that because Japanese buttons were good enough for our mothers and grandmothers, they should be good enough for us. Such a statement is in keeping with the honorable gentleman's politics generally. Yet despite the Minister's advocacy of bullock-dray conditions, he flits about the country in a beautiful limousine of the most up-to-date type. In this National Parliament we should endeavour to cultivate an Australian sentiment, and to foster Australian industries with a view to making this country self-supporting. I agree with E. J. Brady, the great poet, who, when speaking of the potentialities of this country, penned the following beautiful lines : - >Her destinies are ours to shape, > >Her land is ours to hold; > >The plastic clay of nationhood is here to shape and mould. > >In spite of strangers, Tory bred; of foreigners, or fools, > >I'd write Australia on the walls and teach it in the schools. We in this group believe in placing Australia first; we want this country -to go forward, not backward. " {: #subdebate-29-1-s8 .speaker-KIU} ##### Mr HUTCHIN:
Denison .- This debate has been somewhat amusing, as well as protracted. It amazes me that this National Parliament can deliberate on a tiddly-winking item such as pearl buttons for so long. I would not care to estimate the cost of the debate which has taken place on this item; it must be considerable. I shall not add greatly to that cost, for I shall not say much. I am informed, from a source which is generally reliable, that a German gentleman came to this country with a proposal to manufacture buttons in Australia, and was successful in interesting a certain group in the matter. He said that buttons could be made in Australia for a certain price, and was able to persuade the members of the group to commence their manufacture. They found, however, that his predictions were not realized, and they are now endeavouring to recover on their investments by means of high duties. {: .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- The persons concerned control the pearl shell industry of Australia. {: .speaker-KIU} ##### Mr HUTCHIN: -- They are asking the Australian public to pay the price of their foolishness. {: .speaker-K9A} ##### Mr Gander: -- Who are these people? {: .speaker-KIU} ##### Mr HUTCHIN: -- If the honorable member does not know who they are, then the gentleman who is representing them has not done his job properly. {: .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- They are four Austrians. {: .speaker-KIU} ##### Mr HUTCHIN: -- Bluntly, the position is that certain people who have had their fingers burned are now asking the people of Australiato pull them out of the mess of their own creation. {: .speaker-KX9} ##### Mr Watkins: -- Would not the industry provide employment for Australians ? {: .speaker-KIU} ##### Mr HUTCHIN: -- I give place to no one in my desire to promote useful Australian industries; but I state emphatically that stupid ventures should not have the support of this Parliament. I believe in an Australian sentiment ; but I believe also in mixing common sense with it. These excessive duties are not justified, and it is indeed pitiful that this National Parliament should devote so much time to their consideration. {: #subdebate-29-1-s9 .speaker-KMZ} ##### Mr MARTENS:
Herbert .- Every one knows that the firm to which reference has been made is an offshoot of Burns, Philp and Company. As for the four Austrians referred to by the honorable member for Wentworth **(Mr. E. J. Harrison),** I can only say that if they are not better Australians than he is, they are not of much use to Australia. The honorable member spoke of the much greater cost to the wearer of a shirt if mother-of-pearl buttons were used instead of trochus buttons. Presently, I shall give some figures to show that there is not much in that argument. Yesterday, the honorable member for Wentworth said that Shark Bay mother-of-pearl buttons are objectionable because they are too dark. It may be that some buttons made of this material are dark; but in that respect they are not worse than buttons made of trochus. The honorable member for Adelaide **(Mr. Stacey)** complained that pearl buttons will not pass through a wringer without injury. I am prepared to take the honorable member into the factory where these buttons are made, and I challenge him to break one of them. According to the Minister for the Interior **(Mr. Parkhill)** buttons of trochus have been in use for 40 or 50 years without any complaint having been made concerning them. I can imagine that the Minister would indulge in a considerable amount of grumbling if he had had to use those buttons. Buttons made of trochus shell are practically worthless. I can understand the interest of the honorable member for Wentworth in this matter ; the firm which he represents sells buttons made of trochus shell. The statement of the honorable member that in the case of Shark Bay mother-of-pearl buttons, the increased duty was 1,100 per cent., was denied by the Minister for the Interior, who pointed out that the difference between the duty on these buttons and on trochus shell buttons is about 200 per cent. The net landed cost of Maru sazae shell buttons, excluding duty, is 5s. 3d. a gross, as against a selling price of1s. 9d. a gross for Australian motherofpearl Shark Bay buttons. The difference between the costs of shirts fitted with the different buttons is negligible, as will be seen from the following figures : - While the difference between the cost of the two buttons is so little, the greater worth of the Australian product is tremendous. When a person sends to the laundry a shirt that has Maru sazae buttons, it is returned with the buttons in a sadly mutilated condition, whereas our own product comes back intact. The honorable member for Wentworth **(Mr. E. J. Harrison)** is connected with the shirt-making business, and he should know something about the matter. I challenge him to prove that my figures are inaccurate. Now let me compare the cost of takase shell buttons with Australian motherofpearl Shark Bay buttons. The net landed cost of the former, excluding duty, is 2s. per gross, while the selling price of the latter is1s. 9d. per gross. This is how the cost works out when they are attached to a shirt - The slight difference is in favour of the Australian article. Again, dealing with " line 28 " buttons, the net landed cost, excluding duty, of the fresh water pearl shell product is ls. 11.61d. per gross, while the selling price of the Australian mother-of-pearl Shark Bay button is 3s. 9d. per gross. The relative cost of four buttons of each type on a garment is 655d. against 1.205d., the cost of our own article being .55d. higher than the fresh water pearl shell button. The net landed cost, excluding duty, of takase shell buttons of the same line, is 3s. 9.76d. per gross compared with the selling price of 3s. per gross for Australian motherofpearl Shark Bay buttons, the respective costs of four buttons on a garment being 1.27ld., and 1.205, or .016d. in favour of our buttons. The superiority of the Australian mother-of-pearl Shark Bay button is so pronounced that it outweighs any slight difference in cost. I suggest that the honorable member for "Wentworth should induce the company in which he is, interested to use Australian buttons on the shirts that it makes. At present his company uses trochus shell buttons, which are cheap rubbish. One can break nine-tenths of them in one's fingers, for there is no grain in the shell. It is urged that because Japan buys certain of our commodities we should allow this trade to remain in the hands of that country. The industry is said to be worth £64,000 a year to Australia. If I had my way no one would fish for trochus shell.. The honorable member for Wentworth **(Mr. E. J. Harrison)** gibed at the honorable member for Newcastle **(Mr. Watkins)** and stated that the Japanese fish for trochus shell. I may tell him that there are no Japanese on the boats that fish for trochus shell, a product which is not used to any considerable extent in this country. I am aware that a certain proportion of the shell sent to Japan comes back to Australia in the form of manufactured buttons. On the other hand, granted proper encouragement, we could enormously increase our trade in the Australian mother-of-pearl Shark Bay product. Unfortunately, the American firm of Girdau and Company, our greatest buyer, has notified pearlers at Thursday Island, that it can no longer finance our shell buying and selling. I hope that efforts to find another avenue of marketing our product will be successful. I have gone through the factory in Sydney to which reference has been made, and I know that the work performed there is highly efficient, and is carried out under Australian labour conditions. The allegations that the machinery is obsolete are unfounded. The machinery is firstclass, and the young Australians employed in the factory are turning out worthy articles. In addition to manufacturing buttons, that firm is also making buckles and other dress ornaments which appeal to women, and the industry, although not very big, is capable of considerable extension. It is significant that when we introduced the tariff schedule a comparatively few months ago, there were only eight employees in the business, whereas they now number 65. Unfortunately, an unsuspecting public has been sold trochus shell by unscrupulous dealers under the guise of pearl shell. Until quite recently it was almost impossible to buy the genuine article in Australia. The amendment moved by the honorable member for Lang **(Mr. Dein)** warrants support, as the industry is worthy of protection. It is claimed that it is uneconomic. I should like to know what Australian industry is conducted on economic lines. Every one has sought government assistance. {: .speaker-JVR} ##### Mr Nairn: -- What about the wool industry? {: .speaker-KMZ} ##### Mr MARTENS: -- The wool industry has been asking for government assistance for as many years as the honorable member has lived. The pastoralists of Australia are known to governments as among the keenest in this direction, and are always seeking reduced freights and other concessions - with considerable success. There can be no harm in keeping this industry going. In hie budget speech the Prime Minister **(Mr. Lyons)** urged that private enterprise should do everything possible to assist the Government to overcome its difficulties, a view that is also held by members of the United Australia party. Here is an opportunity for the Government to avail itself of such assistance. Despite what the honorable member for Denison **(Mr. Hutchin)** said, the man at the head of this firm is capable and shrewd. The industry has produced 80 per cent, of the world's supply of pearl shell, and it can produce on a greater scale when the market warrants it. I admit that on a previous occasion I, and other honorable members, did not urge the extension of the industry, but. we acted *on* advice from the buyers of pearl shell that it would be useless at that time to produce any more shell, as the- market was not available. The opportunity now presents itself to expand the industry in Australia. Incidentally, in addition to the other lines I have enumerated, our mother-of-pearl shell can be used for motor number plates and name-plates for homes. That may not appeal to the motor speed artist, as number plates made of this material are particularly conspicuous, but they are also durable and handsome. If that section of the industry is exploited, an enormous quantity of pearl shell would be used. I sincerely trust that the Government will either accept the amendment of the honorable member, or postpone the item in order to give further consideration to the suggestions that have been made during this debate. {: #subdebate-29-1-s10 .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- I rise principally to clear up a few misunderstandings and to refute certain mis-statements. Particularly do I direct my attention to the remarks of the honorable member for Wide Bay **(Mr. Corser),** who is a member of the Country party, and, allegedly, a low tariffist. He comes from Queensland, the State that exports something like £64,801 worth of trochus shell to Japan. Yet he advocates a duty increase of 1,100 per cent, to protect a secondary industry that is of no economic value to Australia ! If he were consistent, he would select an industry of greater importance to the country, such as wheat or wool, when he asks for such heavy protection. The honorable member for Herbert **(Mr. Martens)** is in a similar category. He comes from Queensland, yet he would definitely cut the throat of this exporting industry, to pander to a few interests that have approached him for his help. The honorable member for Wide Bay has asked me "What do you call this stuff; how do you pronounce the word?" So much for his knowledge on the subject. The arguments that I have heard in this chamber this evening speak strongly in favour of the retention of the Tariff Board. Members of that body hear evidence from manufacturers, importers, and consumers, and arrive at an unbiased conclusion, upon which they base their recommendations. Thank God we had a tariff board to deal with these matters. It would be a poor look out for the country if they were left for determination by a crowd of union secretaries and organizers, such as the honorable "member for Darling **(Mr. Blakeley),** whose only desire is to add to the number of our factories so that they may continue their work as organizers and extort the pennies of girls and men in union subscriptions to keep them in jobs. They evidently realize that they are incapable of earning a living in any other trade or calling in this country. If honorable members opposite are ever fortunate enough to again place a government on the treasury bench, I trust that they will take every care to put in charge of our various departments practical men who understand what they are doing. It is of no use to put in charge of important government departments mcn who have spent their whole lives in trotting round various factories and organizing various unions with the object of stirring up strife. Men with business experience and wide outlook and not pursons with narrow and intolerant views should have the administration of our public affairs. It was characteristic of the honorable member for Darling that he should refer to coolies, wearing loin cloths, making shirts as good as Australians, but I assure him that even coolies would definitely object to the exploitation of their fellow; workers as practised by union secretaries and organizers. The honorable member made certain requests for information as to the number of buttons, on a shirt, and tried to throw doubt upon the accuracy of my statements. I suggest that he should consider, not the fashionable coat shirt but the shirt of the working man whom he is supposed to represent. Such a shirt has seven buttons. The honorable member said that the Scullin duty added only a fraction of a penny to the cost of the buttons on such a garment, but his information was very much astray. I can substantiate my statement that the duties imposed by the Scullin Government added 3fd. to the cost of each shirt. Before the Scullin tariff was imposed the price of sazae buttons landed in Australia from Japan was approximately 4s. per great gross. I presume that the honorable members who have spoken to this subject have sufficient knowledge of the industry to know what a great gross is. It would take seven dozen buttons for one dozen shirts, which would equal 2½d. per dozen shirts. The price of the local button was 4s. 3d. per gross, which equalled 2s. 5fd. per. dozen shirts. Subtracting the cost of the imported button at that time we get 2s. 3:Jd. per dozen shirts. If there be added to this the usual manufacturers' profit of 25 -per cent., 6$d., and the retail profit covering all other charges, say 50 per cent., making ls. 5d., we get a total of 4s. 3d., which makes 4Jd. per shirt. It will be seen, therefore, that my last night's estimate of 3fd. per garment was on the conservative side. I am amazed that honorable members opposite, who have so much to say about the plight of starving women and children, can face their constituents after endeavouring in this chamber to force up the price of garments in this way. The amount of protection which they wish to afford this industry is in the neighborhood of £100,000 per annum. Let us look at the wages sheet of this button manufacturing company to see whether there is any justification for such a degree of protection. The fact is that this company pays only between £7,000 and £10,000 a year in wages. In these circumstances it is ridiculous to suggest that protection to the extent of about £100,000 should be granted. It would pay the Government and result in a big saving to the com- munity to give the employees of this company their wages and allow them to sit down, and twiddle their thumbs, rather than impose these extraordinary duties. *We* have had a good deal of experience in Australia in regard to the button industry. I draw attention to the parallel case of ivory buttons used in the manufacture of men's clothing coats vests and so on. The tariff imposed by the Scullin Government lifted the duties on these buttons from 15 per cent, to 50 per cent. This immediately increased the cost of the buttons on a man's suit from 4-Jd. to 2s. 2d. Now let us look at the experience of the individual who applied for and so easily obtained this increased duty. He brought out one machine "for the manufacture of these buttons, but could not handle the business and had to close down. But the increased duty of 50 per cent', is still being imposed, although the individual it was designed to assist has gone out of the business. Something has been said about the quality of the trochus shell buttons that are put' on manufactured garments. One would imagine that these' buttons were rubbish, but I doubt whether many of the honorable members who have participated in this discussion could distinguish a good trochus shell button from a pearl button. Trochus shell buttons have been used by our grandmothers and mothers for upwards of 40 years, and I have not until recently heard any serious objection to the quality of them. But even if the buttons are rubbish, it is the intention of this wonderful . Australian firm - managed by Austrians and giving employment to Austrian workmen - which is supplying the Australian public with such excellent pearl buttons, to install a plant for the stamping of buttons from trochus shell. It actually is using Queensland trochus shell for the manufacture of buttons to supply the Australian market! The honorable member for the Northern Territory **(Mr. Nelson)** made an interesting contribution to this debate, but when he was asked several pertinent questions with relation to the limitation of exports of trochus shell he was considerably upset. He said that the bottom had dropped out of the pearl shell market in the United States of America. Does he not realize that it will not help the position by taking action which will cause us also to lose the Japanese market ? That would be the result of the imposition of a prohibitive duty. The Japanese manufacturers will not buy Queensland trochus shell if the duties imposed upon their manufactures are too high, and we shall lose that market just as we have already lost the American market. Surely the £64,000 trade which we do in trochus shell with Japan is worth preserving. The honorable member is not consistent in his arguments. I direct the attention of honorable members to the effect of the Scullin tariff. The price list of the Pearl Button Manufacturing Company, dated the 7 th May, 1931, shows that eighteen line buttons were then 3s. *Sd.* per gross, but on the 10th June, 1931, after the new duties had been imposed, the same buttons were priced at 4s. 3d., per gross. This shows that the company took the fullest possible advantage of the higher duties to the detriment of the Australian consumer. I am quite agreeable to the imposition of a moderate duty on this item. I do not want these buttons put on the free list, but I am totally opposed to the imposition of a prohibitive duty. I am not' prepared to accept the amendment, because I believe that it would have the effect of automatically restoring the duties imposed under the Scullin tariff. I warn honorable members who are tempted to support the amendment' that this may be the effect of their action. If this button manufacturing industry were valuable to Australia it' is reasonable to expect that the Australian Industries Protection League would support it, but I place before honorable members a letter written by **Mr. J.** Hume Cook, the secretary of the Australian Industries Protection League, under date the 9th July, 1931, which reads as follows : - >In reply to " Interested Merchant " permit me to say that in all human affairs a margin must be allowed for special circumstances and for errors. No one contends that the present tariff is perfect; nor that it represents the Protectionist ideal. " For financial reasons, the Federal Government has been compelled to impose duties which, in other circumstances, would not be countenanced. *Ho* far as the imposts upon pearl buttons arc concerned, I have to say that they were neither recommended nor supported by the Tariff > >Board nor the Australian Industries Protection League. It may be that " Interested Merchant " considers the word " goods " in the statement made by **Mr. Paterson,** M.P. - which statement I criticized - referred to pearl buttons. I do not think so; but if it does, then I suggest that my remarks be treated as being within the " margin of error " abovementioned. Otherwise they stand. Even this league is not prepared to accept this industry as a bona fide Australian enterprise. If honorable members opposite, who are agitating for a higher duty on this item, were not class biased, they would realize that their action is quite inconsistent, but, unfortunately, they imagine that everything that comes from this Government must be wrong. They are not at all tolerant in their outlook. This industry is not worth protecting, yet' honorable members opposite are prepared to support it even though to do so would mean penalizing the Australian public to the extent of £100,000 per annum. As an indication of the way in which this firm is prosecuting its activities, I may say that it has travellers soliciting orders for indents of trochus shell buttons from Japan, thereby placing the Japanese exporters in direct opposition to their own factory. The company, which, we understand, has 65 employees, has taken full advantage of the privileges which it enjoys, and indents freely. It is manufacturing other articles, such 'as buckles, that Are manufactured from mother-of-pearl, and is undertaking the production of buttons as a side line. The conclusions of some honorable members opposing the reduction in duties are illogical, and I have sufficient confidence in the intelligence of honorable members generally to believe that the duties recommended by the Tariff Board will be adopted. {: #subdebate-29-1-s11 .speaker-JOM} ##### Mr BEASLEY:
West Sydney -- I am sure that all honorable members who preceded the honorable member for Wentworth **(Mr. E. J. Harrison)** must have sat in fear and trembling while he addressed them on this subject. The honorable member for Wentworth reminded me of a professor debating a matter of which he alone possessed expert knowledge. He suggested that he was the only member of the committee who has any knowledge of the value of this industry to Australia. He endeavoured to magnify his own importance. Although the honorable member for Wentworth is a new member of this Parliament, he should have sufficient experience to realize that other honorable members have some knowledge of the subject under discussion. I have been associated with the electrical industry for some years, but I would not suggest that I am the only honorable member who has any knowledge of the trade, and lecture other honorable members on the subject. I recognize that there are other honorable members who know a good deal about this industry, and I would not dare to attempt to lecture them. It is wise to approach a consideration of all these matters in a humble way. It is frequently found that the person who knows most concerning a particular subject is the one least inclined to speak in the way in which the honorable member for Wentworth did. He has severely criticized the utterances of the honorable member for Wide Bay **(Mr. Corser),** and the honorable member for the Northern Territory **(Mr. Nelson)** ; but those honorable members are quite capable of answering for themselves. The honorable member for Wentworth discussed this matter, not from the view-point of his constituents, but in the light of the advantage which a lower duty would be to the firm with which he was or is still associated. I could pardon the honorable member if he debated it from the view-point of his constituents; but, to support a lower duty merely from the view-point of his former or present employers, is to adopt an attitude which is not expected of a representative of the people. I feel satisfied that the retail organization of Murdoch's Limited, in Sydney, whose interests, no doubt, he has been representing in this instance, is anxious that the prices of certain commodities used in the business in which itis engaged shall be kept as low as possible. I do not suppose that that firm cares whether the articles it requires are imported from China, Japan, Russia, or anywhere else, so long as it can obtain them at a low figure. That firm is not concerned with the interests of those employed in the industry, or with the attempts of others to build up Australian manufacturing concerns. The honorable member for Wentworth referred to the extra cost of buttons manufactured in Australia; but I would suggest that, in order to reduce retail prices, the distributors should forgo some of the 50 per cent. profit which he admitted they are making. I do not profess to have any extensive knowledge of retail business establishments such as Murdoch's Limited; but I have been informed that these "rag shops" are the best profit-making establishments in the country. We have only to see the extent to which businesses such as Myer's, in Melbourne, have developed even during periods of depression to realize how profitable they must be. Surely it is unnecessary to put forward a plea on behalf of retail business establishments such as these in an endeavour to answer the case brought forward by the honorable member for Lang **(Mr. Dein).** In view of what I have heard from those who have an extensive knowledge of the industry, I intend to assist it by supporting the additional protection proposed. The honorable member for Denison **(Mr. Hutchin)** also endeavoured to lecture the committee with respect to the duties, and as to the time that is being taken in discussing this subject. He may be amused, as he says, at the timethat has been occupied, but he should realize that the members of this committee are entitled to discuss the subject from every possible angle. We hardly need to be lectured by the honorable member for Denison. {: #subdebate-29-1-s12 .speaker-JOS} ##### The CHAIRMAN (Mr Bell:
DARWIN, TASMANIA -- I remind the honorable member that he is referring now to the utterances of honorable members and not to the item before the Chair. {: .speaker-JOM} ##### Mr BEASLEY: -- The inference then, is that these honorable members did not refer to the item. {: #subdebate-29-1-s13 .speaker-10000} ##### The CHAIRMAN: -- The honorable member must discuss the item, and not other honorable members. {: .speaker-JOM} ##### Mr BEASLEY: -- It has been said that those conducting this industry employed a few Austrians, but it is not the first manufacturing firm that has engaged foreigners to assist an industry in its initial stages. Shortly after the termination of the war, the State Electricity Commission of Victoria brought out a number of Germans to advise it in the establishment of a briquetting factory at its works at Yallourn. {: .speaker-10000} ##### The CHAIRMAN: -- I again ask the honorable member to discuss the item. {: .speaker-JOM} ##### Mr BEASLEY: -- As reference has been made to the importation of several Austrians to assist the button manufacturing industry in its initial stages, I feel that I am entitled to show that other industries which have proved successful have had the help of foreigners. Surely we are not justified in refusing to render assistance to an industry merely because several foreigners are engaged in it. We are justified in supporting it to enable it to produce a commodity now imported from Japan. The experience I gained in the electrical trade justifies me in refusing, whenever possible, to be associated with Japanese productions. I have found that in most cases they are most unreliable and inferior. The honorable member for Wentworth quoted a letter dated July, 1931, written by **Mr. Hume** Cook, the secretary of the Australian Industries Preservation League. I noted that the letter was written over * twelve months ago. There have been many changes during the last twelve or eighteen months. Matters that were regarded as in keeping with proper policy have since been denounced. There have been remarkable changes in public opinion in connexion with current topics, public policy, and tariff matters during the last twelve months. Notwithstanding the statements made by the secretary of the Australian Industries Preservation League, I am inclined to take the opposite view. The opinion expressed by that league strengthens my determination to assist to protect this industry to the fullest possible extent. **Mr.** BERNARD CORSER (Wide Bay) [9.28 . - I shall not endeavour to soar to the oratorical heights attempted by the honorable member for Wentworth **(Mr. E. J. Harrison),** who, perhaps quite unintentionally, mislead the committee in connexion with certain facts which should be apparent to him. He referred in flowery language to the pearly beauty of buttons on a night-shirt, and endeavoured to make honorable members feel that they should apologize for having expressed themselves in the interests of the workers engaged in this industry. The honorable member is the representative of a firm engaged in the manufacture of shirts. He endeavoured to criticize me, as a member of the Country party, for saying that workers are entitled to hold their jobs. I wish to be consistent. I claim that those secondary industries that are of value to Australia should be protected. Those engaged in them provide a market for the products of primary producers. The members of the Country party realize that if our secondary industries went out of existence, an attack would then be made upon those engaged in primary production, and butter, maize, and other primary products produced by black labour would be allowed to enter this country to compete with commodities of Australian production. {: .speaker-10000} ##### The CHAIRMAN: -- The remarks of the honorable member would be more appropriate to a general tariff discussion. He must confine his remarks to the item before the Chair. {: .speaker-K6Q} ##### Mr BERNARD CORSER: -- I shall do so. This is an illustration of the operation of the freetrade policy as advocated and pursued by a number of urgers in Australia in an effort to break down the industries of this country. The attack on this industry is in line with the attack on Australian industries generally. It might be asked - why waste so much time discussing this industry? Let me say that we are fighting for a principle, and if we do not take a firm stand now respecting this industry, we might just as well place in the hands of the freetrade exploiter the future control of Australian industry generally. If the honorable member is fair, he must admit that the Australian workman is entitled to a reasonable wage. I read in a newspaper a few days ago a statement by the Right Honorable Stanley Bruce to the effect that what the world wanted was not cheaper commodities, but higher prices for commodities; not lower wages, but higher wages throughout the world. Some lon.orable members in this House take an opposite view. They want to encourage the use in Australia of Chinese and Japanese cheap labour commodities, and to deprive the Australian worker of any opportunity of employment. Because I am a member of the Country party, the honorable member . for Wentworth considers that I should assist in depriving the Australian workmen of employment. {: .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- I am asking the honorable member to be consistent, but I know that that is a difficult task for him. {: .speaker-K6Q} ##### Mr BERNARD CORSER: -- The honorable member and some of his friends are consistent in their efforts to break down this and other Australian industries by encouraging the use of cheap foreign articles. The honorable member referred to the Australian Industries Protection League, and quoted a letter which he had secured from a friend. I have with me a letter from an opposition firm - Pelaco Limited - which was written to the proprietors of the pearl button industry on the 1st December, 1931. It reads - >Referring to your recent delivery of mother of pearl buttons in 28 line. We desire to congratulate you upon the out turn of these goods, hoth in appearance, finish and durability. We may state that we have tested these buttons, and have had them subjected to a pressure of 4,000 lb. hydraulic pressure. Some one wanted to know whether these buttons would break if they were put through a mangle. Let me say that the buttons, the use of which the honorable member for Wentworth is so strongly advocating, would burst off the garments of the wearer if he attempted even a decent sneeze. The letter continues - >This, we consider, a very severe test, and as the buttons themselves come in contact with steam heated beds and have lost none of their lustre, it speaks well for the prospect of your Industry. It is our intention to use mother of pearl buttons almost exclusively on Pelaco guaranteed products in future, and look forward to continued business relations with your company. The honorable member for Wentworth, who represents an opposition firm, is anxious to close down this industry, yet Pelaco Limited desires to increase its business with it. That absolutely refutes the statement of the honorable member that the industry with which he is connected will not use these buttons, and does not want them. The figures quoted by the honorable member were taken from the report of the Tariff Board, but they were out of date even before the report was written. The Tariff Board stated that there were 25 persons employed in the industry. Today, 65 persons are employed in the industry. According to the report the selling price of 18-line buttons, at the time the evidence was taken, was 3s. 5£d. per gross. To-day the price is ls. 9d. per gross. {: .speaker-KNX} ##### Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944 -- It is a different button. {: .speaker-K6Q} ##### Mr BERNARD CORSER: -- I have already shown that the honorable member's statement is wrong. The whole argument against this industry is based on inaccurate figures. It may be said that the decrease in price has been considerable, but it must be realized that when the industry was in its infancy, the men employed at the works in Sydney were unaccustomed to the work. The whole of the cutting and polishing is done by hand. While the employees were becoming familiar with the work, naturally costs were high. The honorable member ' also stated that this industry was worked and managed by foreigners. I have visited the works and ascertained for myself that only three foreigners are employed there, and that the management is directly under the control of Burns, Philp and Company. The three foreigners were imported so as to teach Australian workmen to make buttons. Any Australian industry that is willing to operate and at the same time to give Great Britain an opportunity to export certain articles to Australia free of duty in competition with it, is- at least acting fairly, is deserving of every encouragement, and should be protected from foreign countries which manufacture buttons under cheap-labour conditions. It is only by building up our industries and encouraging other countries to pay decent wages that we shall be able to solve many of the problems with which we are confronted to-day. The statements of the honorable member for Wentworth are not in accordance with fact, and have done considerable harm to the industry. I hope that honorable members will insist on giving it fair protection so that it may become established on a fair and reasonable basis. {: #subdebate-29-1-s14 .speaker-JUD} ##### Mr DEIN:
Lang .- There are one or two points which I wish to make clear. The Minister stated definitely that the new duty was not protective. I am more- or less a strong protectionist, and I contend that any industry which has been started in Australia is entitled to a certain measure of protection. When moving my amendment, I said that the duty under . the Scullin tariff was excessive, that, on the Minister's own admission, the new duty afforded no protection at all, and that the object of my amendment is to avoid the two extremes. Having listened to the debate, I feel more convinced than ever that it is necessary for the amendment to be accepted by the committee. The Minister for the Interior **(Mr. Parkhill),** in the course of his ' remarks, said that he had a great deal of sympathy for the workers. I believe that he has, but the fact that my views are different from his is no reason why he should infer that I have not the same degree of sympathy for the worker as he has. He mentioned the class of machinery in operation at the factory. There is a good deal of truth in what he has said, but the industry, being at the moment in its infancy, needed a certain type of machinery to enable its employees to learn to manufacture pearl buttons. Different machinery will be required when the men become thoroughly accustomed to the work. The honorable member for "Wentworth stated that if the amendment were carried) the duty under the Scullin schedule would operate. Perhaps that is so, but if the amendment were carried, there would be nothing to prevent the Minister from laying on the table of this chamber to-morrow a schedule providing for a new duty that would immediately become operative. It has been said that the industry enjoyed a protection of up to 1,100 per cent.; now the Minister admits that it has no protection at all. If the amendment is carried, we shall avoid the two extremes. I ask honorable members to consider the position of the employees" who rightly or wrongly have been engaged for the last eighteen months in an industry that is working full time, and producing a 100 per cent. Australian article. If we give the industry some encouragement, it will increase its efficiency, and reduce its prices. Its output will expand, and ultimately, it will employ an additional 200 hands. {: #subdebate-29-1-s15 .speaker-F4U} ##### Mr FORDE:
Capricornia .- Those who are opposed to the amendment have endeavoured to prove that this industry is uneconomic. So far as I can remember, every exponent of freetrade has used a similar argument against every Australian industry that has been established. When industries were set up for the manufacture of shirts and pyjamas, about which the honorable member for Wentworth **(Mr. E. J. Harrison)** knows so much, it was said that they were uneconomic; that cheaper garments could be imported from Japan, Europe and Great Britain, and that Australia should be content with exporting the raw materials and purchasing the finished products from the factories of the old world. But a new generation of Australians decided that charity should begin at home, and that, if Australia was to increase her population substantially, she must have, not only primary, but also secondary, industries. Consequently, shirt factories and other factories were established, and gave employment to a considerable number of our people. If the honorable member for Wentworth carried his argument to a logical conclusion, he would say that we should remove all tariff barriers and allow every finished article to be purchased in the cheapest market. In that event, whence would they come? They would be supplied by the factories of Japan and China, in which child labour is employed to turn out shirts, pyjamas, cotton piece goods and tweeds. I recall an eloquent speech that was delivered some years ago by the right honorable member for Flinders **(Mr. Bruce),** in which he castigated that type of Australian manufacturer who wanted 100 per cent, protection for his products, but at the same time wished to purchase his raw materials in the cheapest market in the world in preference to Australia. The right honorable gentleman then said " We must have consistency ". If he were here to-night, he would probably ask the honorable member for Wentworth to be consistent; not to come, cap in hand, to the Government, as some one-eyed manufacturers did while I was Minister for Trade and Customs, asking for a virtual prohibition with respect to their products, and at the same time strenuously resisting the suggestion that they should purchase their raw materials in Australia. I have had quoted to me by manufacturers cases in which they could procure their material from Japan, Europe and England at a much cheaper rate than that at which it could be obtained in Australia. They wanted all kinds of duties taken off those raw materials. The honorable member for Wentworth is a sample of that type of inconsistent Australian manufacturer. What do we find that other countries are doing? This morning's *Canberra Times* publishes a cablegram from Calcutta, which reads - >Mainly as a result of abnormal imports at low prices by the Japanese, through the depreciation of the yen, the Indian Government yesterday increased the import duty on cotton piece goods, not of British manufacture, from 20 per cent, to 50 per cent, nd valorem. {: .speaker-10000} ##### The CHAIRMAN: -- -The honorable member is not dealing with the item. {: .speaker-F4U} ##### Mr FORDE: -- I am endeavouring to show that, instead of reducing the duties on goods imported from Japan, India is increasing them. Because of the depreciation of the Japanese exchange, the 25 per cent, duty imposed on these buttons will be completely counterbalanced and will prove useless to the Australian industry. let us examine the assertion of a threatened retaliation by Japan because of the imposts on her products. The total imports of buttons amounts to £35,000 per annum. Yet we are told that Japan is going to retaliate, and that' she will not purchase Australian wool if these high duties continue to be imposed. The duties on silk, as well as on piece goods and shirts and pyjamas, hit Japan very much more severely. In 1921 the duty imposed on apparel from Japan waa 40 per cent, ad valorem. In September, 1925, it was increased to 60 per cent, ad valorem, by a political party of the same brand as that which now sits behind the Government. The value of the imports of apparel from Japan fell, as a result, from £126,000 per annum to £39,000 per annum. The value of the imports of shirts, collars and pyjamas,, which as apparel pay the rates of duty I have just mentioned, fell from- £32,000 in 1922-23 to £859 in 1926-27, when the- higher duties imposed under the Massy Greene tariff commenced to operate. {: .speaker-10000} ##### The CHAIRMAN: -- The honorable member is getting away from the item. {: .speaker-F4U} ##### Mr FORDE: -- I was replying to the argument that we mud dispense with the duty on pearl buttons lest Japan should refrain from purchasing our wool. Notwithstanding all the nonsense that is talked by freetrade advocates of " hands off the products of J apan " it will be found that in 1930-31 that country purchased ' from Australia 1,535,000 centals of wool, valued at £6,477,000 - the largest quantity ever imported by Japan from this country. The assertion that Japan will retaliate is merely a subterfuge that is resorted to by the advocates of freetrade, or the big softgoods merchants in Australia, who are opposed to the establishment of Australian factories because they wish' to purchase in the cheapest markets of the world their apparel and everything else that they sell. Any one who has followed the debate impartially must come to the conclusion that this young industry, which to-day is employing 65 persons, needs reasonable protection in order to develop and increase the number of its employees to 250. It is not necessary that it should be given , the protection afforded to it by the Scullin Government, because to-day it is on a better footing than it then was, and could manage on one-half of what was then afforded to it, as the honorable member for Lang **(Mr. Dein)** proposes. The honorable member for Wentworth says that it is not worth protecting, because there are in it three foreigners who were brought to this country to teach Australians the trade. Is it not a good thing in the case of new industries to bring foreigners to this country to teach our artisans? The boys and girls who are now being trained will one day be able to do without the advice and the tutelage of these foreigners. No case has been made against the amendment. If honorable members are free to vote according to their opinions, they must support it. {: #subdebate-29-1-s16 .speaker-KFK} ##### Sir LITTLETON GROOM:
Darling Downs . - The misunderstanding appears to exist, that, if this matter were postponed, the rates imposed by the Scullin Government would immediately come into operation. That is not the case. Honorable members need have no fear that, by voting for the amendment, they would revive what they regard as excessive rates. All that is asked is that the debate shall be postponed.. The honorable member who moved the amendment stated that it was his intention that there should be a revision of the excessive rate previously imposed, and indicated a lower rate of duty. I have listened to the debate throughout the day, and have considered the matter very carefully. I liked the tone in which it was introduced by the Minister. He practically informed the committee that the matter had been before the Tariff Board, which made a report upon it, and that it was then referred back to the board, which stated that it could see no reason for altering its recommendation. The honorable gentleman, in effect, left it to this committee to decide whether something ought to be done. His was not an attitude of rigid opposition, but a particularly fair one. Therefore, I was rather surprised when, later, another Minister intervened, and spoke strongly against any alteration of the proposal submitted by the Government. He left the impression that no other idea could be entertained. I prefer to pin my faith to the Minister who is in charge of the business of the committee. Having listened to the debate, and having read carefully the report of the Tariff Board, I am satisfied that under existing conditions the duty asked for by the applicants is excessive. I can understand the reason for the tariff that was imposed by the Scullin Government, though I might not agree in detail with their proposals. At the time that Government commendably had in view the object of reducing imports and thus obtaining for Australia a favorable trade balance. {: .speaker-KFE} ##### Mr Gregory: -- That is a charitable way in which to look at the matter. {: .speaker-KFK} ##### Sir LITTLETON GROOM: -- It was the proper way. That Government was perfectly justified in taking whatever steps it considered necessary to put Australia on a sound basis. Its example, I remind the committee, was followed by Great Britain. But in the circumstances of to-day the rate then imposed has become excessive. Therefore, we are perfectly justified in asking for its revision in a downward direction. I consider that this Parliament, having deliberately imposed a duty, issued an invitation to those who had capital and were willing to establish an Australian industry, to invest their money in such a venture. These people, on the faith of the action taken by Parlia ment, established this industry, and induced a number of working men to invest their capital, which is their labour, in it. Consequently, it seems to me that Parliament cannot say " Having induced you to erect this structure, we shall destroy its foundations regardless of what happens to your capital." I shall vote for the amendment, not for the purpose of indicating the particular duty that should be imposed, but so that the matter may be further investigated with a view to seeing whether justice cannot be done to those who have put their capital and labour into the industry. I trust that the Minister still has the state of mind that he exhibited when he opened the debate, and that he will reconsider the whole question. {: .speaker-KYI} ##### Mr Prowse: -- And go back to the Tariff Board's report? {: .speaker-KFK} ##### Sir LITTLETON GROOM: -- No. The Minister should reconsider the proposal that he himself has submitted, with a view to seeing if it is not possible to give some relief at least to those who have put their money into the industry on the faith of the action taken by Parliament when it imposed the duty. {: #subdebate-29-1-s17 .speaker-JVT} ##### Mr NELSON:
Northern Territory -- I do not know whether the Minister for the Interior **(Mr. Archdale Parkhill)** deliberately so intended, but his statement in reference to the effect of the acceptance of this amendment was certainly misleading. The honorable gentleman stated that that effect would be a reversion to the Scullin tariff. That is not correct. The schedule that has been tabled would continue to operate until another was brought down. Honorable members should thoroughly understand that that is the position. I wish to reply briefly to the interjection of the honorable member for Fawkner **(Mr. Maxwell)** concerning the employment of Japanese in the pearling industry. Japanese divers are employed solely because white divers will not do the work. One diver in a season may produce 30 tons of mother-of-pearl . shell, which would be sufficient to keep eighteen or twenty Australian workmen engaged for a year in the manufacture of buttons. The Pelaco Company, the leading Australian manufacturers of shirts, collars, and pyjamas, has gone out of its way to pay a tribute to Australian pearl buttons, and has undertaken to use them. The Minister for the Interior **(Mr. Parkhill)** said that I .was endeavouring to bolster up the pearl shell industry in North Australia. That is true. I believe in encouraging any industry which I think can be operated on an economic basis. That is the case with the pearl button industry, because the raw material is produced in Australia. Eighty per cent, of the world's output of pearl shell comes from Australian waters, and our manufacturers of buttons should be in a commanding position to capture the local market and export extensively. Great Britain will not give concessions in respect of Australian meat, because it can obtain its supplies more conveniently and more cheaply from Argentine; but it is obliged to buy pearl shell from Australia. Many Australian industries are being bolstered up by bounties and other means, but the pearl shell industry, in both the primary and secondary branches of production, will not need such artificial assistance. Once manufacture has become established with the aid of reasonable protective duties, it will be able to stand on its own feet. If the honorable member for "Wentworth **(Mr. E. J. Harrison)** had his way, Australia would soon see a reversion to those deplorable conditions which have caused some of our leading citizens to form anti-sweating leagues in the various cities. Australia has an opportunity to establish a profitable natural industry and to supply buttons to the world. This committee has to decide whether that valuable opportunity shall be taken or neglected. {: #subdebate-29-1-s18 .speaker-KFE} ##### Mr GREGORY:
Swan .- I hope that the Government will not depart from the attitude it has adopted. One is tempted to wonder how many honorable members have been " buttoned " by the representatives of the manufacturers. How many representatives of the workers have read this paragraph in the Tariff Board's' report - >Witness's firm has an extremely large output, manufacturing approximately 10,200 garments weekly in the shirt and pyjama section, requiring the employment of 200 operatives, with a total weekly wage of £450. > >The total cost of imported buttons used by the firm in twelve months is £967. Working on the basis of the price list of the Pearl > >Button Manufacturing Company Limited of the 10th June, 1931, the cost of the same quantity of buttons of local manufacture would be £5,546. The use of locally-produced buttons, would, therefore, impose on the firm an additional burden of £4,579 per annum. The difference in the price of buttons would increase the cost of the workers' shirts and pyjamas by £4,579 for no other purpose than to help an industry which the Tariff Board has declared to be ill conceived. The granting of a concession to one firm of manufacturers would treble the cost of buttons required by the shirtmakers, and add to the cost of living. The honorable member for Capricornia **(Mr. Forde)** spoke of the number of people who would be employed by the pearl-button industry. I do not forget the huge importations of galvanized iron and other commodities before the honorable member imposed embargoes on exports in order to increase employment. Ever since 1920 we have been told of the increased employment which high duties would give, but each little addition to the rates has added something to the cost of living, which is now higher than in any other country in the world. The higher cost of cotton yarn is an illustration of the consequences of the high protection policy. The Tariff Board reported strongly against the claims of the pearlbutton company. Out of consideration for honorable members, the Minister referred the item back to the board, which has since declared that it sees no justification for altering its recommendation. I hope the committee will endorse that attitude. {: #subdebate-29-1-s19 .speaker-L08} ##### Mr ROSEVEAR:
Dalley .- It is obvious that the industries at present established in Australia are incapable of providing work for all our people, and all honorable members profess to be deeply interested in increasing the avenues of employment by the development of new industries. Although the amendment before the committee will reduce by 50 per cent, the protection previously afforded the manufacturers of pearl buttons, it will at least give to the industry an opportunity to continue and expand. It would mean a new avenue for the absorption of surplus labour. If honorable members accept the Government's proposal the industry will go out of existence. Our choice to-night is not between protection and free trade, but between a white Australian labour and cheap coloured labour - between keeping in existence an industry capable of giving clean employment to many of our growing youths, and letting it disappear. The .people engaged in it are not afraid of competition from buttons manufactured by white labour in any other part of the world, but they say that they cannot face the competition of the cheap labour products of Japan under the rates proposed by the Government. Some honorable members say that Japan will not buy our wool if we exclude cheap Japanese competition. But that country does not buy Australian wool because Australia buys Japanese buttons. Japan buys our wool because it needs it and will still need it, no matter what tariff we impose on buttons. The honorable member for Wentworth **(Mr. E. J. Harrison)** is opposed to this new industry because he says that if we afford it adequate protection the price of a few buttons used on a shirt would be increased. {: .speaker-KYZ} ##### Mr Riordan: -- To the extent of less than Id. a shirt. {: .speaker-L08} ##### Mr ROSEVEAR: -- That is so. Assuming that the argument of the honorable member for Wentworth is correct, the increased cost of a shirt would not be Id. I hesitate to think that the workers of this country, badly placed as they are to-day, would not pay Id. more for a shirt if they realized that the buttons on it were produced by Australian labour instead of cheap foreign labour. Although many eulogies have been uttered about the Tariff Board, it is a notable fact that even the Government itself, when it suits it to do so, departs from the recommendations of that board. The members of the board cannot rid themselves of their political leanings, and it is quite probable - although they may not make the fact public - that they allow those leanings to influence their judgment. I give the honorable member for Swan **(Mr. Gregory)** every credit for his views. {: .speaker-KYZ} ##### Mr Riordan: -- He is against all duties. {: .speaker-L08} ##### Mr ROSEVEAR: -- Yes, he is as well meaning a gentleman as has ever ruined his country's prospects. He has, how- ever, no reason for opposing every secondary industry. I cannot accept the figures he has quoted. {: .speaker-KFE} ##### Mr Gregory: -- They are based on the report of the Tariff Board. {: .speaker-L08} ##### Mr ROSEVEAR: -- That board was dealing with the whole of the output of Australia, involving millions of shirts, when it assumed that shirt-buyers would be called upon to pay an extra £5,000 because of the duties on pearl buttons. I pass now to the attitude taken up by honorable members of the Country party. There is an analogy between the tobacco-growing industry and the pearl button "industry. Both were encouraged to expand under a high tariff wall, but that tariff wall has suddenly been knocked away, and both are now at the mercy of unfair competition from cheap labour countries. In other words the arguments that appealed to honorable members of the Country party to preserve the tobacco industry, apply with equal force to the need for preserving the pearl button industry. An attempt has been made to belittle the latter because of the importation of a few foreigners to instruct Australian workers. But many industries now carried on in Australia have been successfully established by the importation of overseas craftsmen, both British and foreign, to instruct Australian workers. The Minister for the Interior **(Mr. Parkhill)** quoted from the Tariff Board's report to show that the effect of the operation of the duties asked for by the industry would be to increase the cost of pearl buttons to the clothing manufacturers by about 250 per cent. As I have already said, the cost of the buttons on a single garment is so trifling, compared with the total cost, as to be almost negligible. If the inferior buttons made in cheap-labour countries were used on the shirts of the workers they would be wholly unsatisfactory, because they would probably disappear after the first washing, and the COSt of replacing them would outweigh the initial advantage of the cheapness' of the article. I am concerned not so much about the establishment of a new branch of private enterprise as about the preservation of an avenue of employment for the workers. Ample proof has been afforded in the last few years of the incapacity of the present industries in this country to provide sufficient work to keep our people employed. . Honorable members who oppose the company's request might reasonably be asked to sacrifice even something of their freetrade principles in the interests of the workers. Even if this industry has been established by means of high protection, it will open up a further avenue of employment, if its continuance is made possible by adequate duties. The amendment submitted by the honorable member for Lang **(Mr. Dein)** strikes the happy medium between an extreme protectionist policy and an attempt to break down the tariff wall. {: #subdebate-29-1-s20 .speaker-KFA} ##### Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP -- I have risen because of the remarks of the Minister for the Interior **(Mr. Parkhill).** He quoted extensively from the report of the Tariff Board; but I point out that that report is considerably out of date. It was presented many months after the examination of the witnesses who appeared before the board, and it contains errors on major matters, with regard to both the number of men engaged in the industry and the prices stated. The honorable member for "Wide Bay **(Mr. Corser)** gave instances of that to-night. It was unfair for the Minister to suggest that the industry was receiving protection equivalent to 1,100 per cent. The board, in mentioning that figure, was comparing the thin and cheap Japanese shell with the first-quality mother-of-pearl shell which was then, being manufactured by the Australian company. The honorable member for Wentworth **(Mr. E. J. Harrison)** , adopted similar tactics to those employed by the Minister. The Australian-made button is far superior in quality to the inferior article usually imported, and it is unfair to compare the prices. The local company is different from many others, which have admittedly indulged in profiteering practices on the Australian market. It introduced three overseers from abroad to teach Australian workers how to make buttons. Naturally some time elapsed before our workers gained any degree of efficiency; but, with increased experience, their output correspondingly grew, and the company was able to reduce its prices. The honorable member for Wide Bay showed to-night that the price of one class of button had been lowered from 3s. *5id.* to ls. 9d. per gross. Some honorable members unwittingly, perhaps, have been quite unfair to the industry. As was pointed, out by the honorable member for Darling Downs **(Sir Littleton Groom),** the British preferential rates under the "Scullin tariff were ½d. per line per gross and 15 per cent, ad valorem up to 20-line, and -Jd. per line per gross and 30 per cent, over 20-line. Under the general tariff the duty was Id. per line per gross and 25 per cent, up to 20-line, and Id. per line per gross and 50 per cent, exceeding 20-line. The request of the company is for exactly half the general rate validated under the Scullin tariff. We are told that, as a gesture of goodwill to Great Britain and the Empire generally, a further tariff schedule will be brought down after the return from ( Ottawa of the Minister for Trade and Customs **(Mr. Gullett).** This company, as I have explained, has already made this gesture of goodwill. It asked for a general tariff of about one-half the protection already given and offered no objection to British preferential tariff being, free, as against the present rate of 15 per cent. I appeal to the committee to agree to the postponement of the item so that the Government may give it further consideration and, possibly, alter the duties in the direction indicated. I leave this matter to the good sense of the committee, believing that honorable members will appreciate the generosity of the company concerned. {: #subdebate-29-1-s21 .speaker-KYX} ##### Mr RILEY:
Cook .- This item affects an industry which was established by an enterprising Australian firm under protective duties introduced by the Scullin Government and accepted by this Parliament. In the circumstances the committee has a tremendous responsibility, for while the industry concerned may be comparatively small it gives employment to 50 or 60 operatives, and there are encouraging possibilities of expansion. The opinions expressed by honorable members of the respective parties in this chamber justify the acceptance of the amendment. Much has been said for and against the industry, and I regret that many statements entirely foreign to the debate have been imported into it. We have been informed by the Prime Minister **(Mr. Lyons)** that important tariff changes will be made following the return of the Minister for Trade and Customs **(Mr. Gullett)** from the Ottawa Conference. To what extent those tariff alterations will affect this and other items in the schedule before us I do not know; but, in view of the early possibility of Parliament being called upon to consider further amendments to the tariff as a result of the Ottawa Conference decisions, the Minister might very well agree to the postponement of this item. Like other honorable members, I desire to do all that is possible to foster industries which will utilize Australian raw material, and I am convinced that if further consideration is given to this item our trade with Japan and other countries will not be prejudicially affected. Japan is one. of our best customers in the wool trade; but as we all know, Japan buys our wool because she needs it for her manufacturing industries. The honorable member for Wentworth **(Mr. E. J. Harrison)** went out of his way to oppose the views of honorable members on this side of the committee. I regret his general attitude to the item. He is identified with a branch of the clothing industry that enjoys adequate protection, and I suggest that if protection is necessary for the manufacturer of articles of men's, boy's and women's wear, it is equally necessary for those engaged in the manufacture of articles required by the clothing trade. This industry, I repeat, is capable of expansion. I am looking forward to the time when it will embark upon the manufacture of a vast range of buckles and fancy lines which at present are imported. I hope that the Minister will sympathetically consider the points of view that have been advanced. The committee, I believe, is fairly evenly divided upon this item. It will not be satisfactory to the Government if it is passed by only two or three votes, nor, on the other hand, will it be satisfactory to those interested in the industry to know that its continued existence depends on the same slender margin of votes. For this reason I appeal to the Minister to accept the amendment of the honorable member for Lang **(Mr. Dein)** and agree to the postponement of the item so that it may receive further consideration. I am not satisfied with the way in which this matter was referred to the board. No fresh evidence was placed before it, and the board could not be expected to vary its recommendations in the absence of such evidence. If a new inquiry were ordered, I feel confident that the information which would be placed before the board would induce it to bring in a recommendation different from the last. Question - That item 106 be postponed (Mr. Dein's amendment) - put. The committee divided. (Chairman - Mr. Bell.) AYES: 23 NOES: 35 Majority . . . . 12 AYES NOES Question so resolved in the negative. Item agreed to. Progress reported. {: .page-start } page 148 {:#debate-30} ### ADJOURNMENT Restraint of Trade - Division on Tariff Item: Pair. Question (by **Mr. Lyons)** proposed - >That the House do now adjourn. {: #debate-30-s0 .speaker-KFE} ##### Mr GREGORY:
Swan .- On several occasions Ihave drawn attention to reports of restraint of trade. Yesterday I made a request of the Assistant Minister for Trade and Customs **(Mr. Perkins)** and have since received the following reply: - >Yesterday the honorable member for Swan **(Mr. Gregory)** asked what action had been taken in respect of certain allegations of restraint of trade in connexion with the sale of wire nails and barbed wire. The honorable member referred to an allegation that, unless the manufacturer refrained from selling his goods in New South Wales and Queensland and raised his prices £6 per ton, reprisals would follow. > >I take it that the reference is to a manufacturer of wire nails and barbed wire in Victoria, and to reprisals by the New South Wales manufacturers of wire from which wire nails and barbed wire are produced. > >There are a number of manufacturers in Victoria of wire nails and of barbed wire. These are dependent on the New South Wales manufacturers of wire for supplies of the wire from which the nails and barbed wire are made. The New South Wales manufacturers mentioned also make barbed wire and nails. > >Some time ago complaint was made by the Victorian manufacturers that the New South Wales makers had reduced their prices of nails and barbed wire considerably, but had not reduced their prices of the wire, so that the Victorian manufacturers of nails and barbed wire were placed at a considerable disadvantage. > >Investigations made by the department indicated that for some time there had been a "price war " amongst the Victorian makers which had reduced the prices of their nails and barbed wire to levels which appeared to be unpayable. Their goods were being sold in New South Wales and Queensland at these low levels and the New South Wales manufacturers were forced they stated to reduce the prices of their goods to compete, and pointed out that such prices could not be maintained without heavy loss. > >The matter was referred to the Tariff Board for inquiry and report. This was in March last, but the Victorian manufacturers advised that they desiredto withdraw from the inquiry by the board, indicating that they had come to a satisfactory arrangement with the New South Wales manufacturers. The matter was therefore recalled from the board. The complaint was that the manufacturers of wire nails and barbed wire, who were also the drawers and suppliers of wire, dumped their goods in Melbourne, and insisted on the Melbourne merchants refraining from selling their goods in New South Wales and Queensland, and increasing their price in Victoria by £6 a ton. Section 15 of the Tariff Board Act provides - >The Minister shall refer to the board for inquiry and report the following matters: - > >any complaint that a manufacturer is taking undue advantage of the protection afforded him by the tariff and in particular in regard to his - > >charging unnecessarily high prices for his goods; or > >acting in restraint of trade to the detriment of the public . . . Here is a definite charge of a restraint of trade. It appears that the influences which were brought to bear were sufficient to induce those who complained to withdraw their opposition. The Government should insist on the Tariff Board making a full inquiry into this matter. Eighteen months ago I read in this House a letter from Lysaghts stating that, owing to complaints in Parliament, they had decided to sell their goods to all and sundry, and adding that those merchants who were in the association would receive a special rebate which would enable them to undersell their opponents and still make a fair margin of profit. I trust that the Government will cause the fullest investigations to be made in order to ascertain whether or not undue advantage is taken of the policy of protection. {: #debate-30-s1 .speaker-KZF} ##### Mr LANE:
Barton .- I desire to make a personal explanation. Through an inadvertence I voted in the division just now when I had arranged to pair with the honorable member for Martin **(Mr. Holman).** I regret having done so; it was purely an error on my part. {: #debate-30-s2 .speaker-KXY} ##### Mr PERKINS:
Monaro- Assistant Minister · Eden · UAP -- The matter to which the honorable member for Swan **(Mr. Gregory)** referred was dealt with by my colleague the Minister for Trade and Customs **(Mr. Gullett),** who called the parties concerned to Canberra and had an interview with them. I was present during only a portion of the interview. As a result, correspondence continued between the companies concerned, and eventually the steps pointed out, in my letter were taken. Later, the case was withdrawn from the Tariff Board. I cannot see how the primary producers have suffered; they had the benefit of the trade war. Now that that trade war is over, and the companies are selling at legitimate prices, I do not know what can be done. I am not acquainted with all the details of this matter, and shall have further inquiries made. Similar complaints of restraint of trade have been made with respect of other articles, chiefly those in which iron and steel are used. The Government has done what it could, but its powers in these matters are limited. An investigation by the TariffBoard and a report by that body does not clothe the Government with any greater powers. I am of the opinion that in some of the States wrong things arc done; but the remedy lies with the States rather than with the Commonwealth.I shall cause further inquiries to be made, and will let the honorable member know the result. {: #debate-30-s3 .speaker-C7E} ##### Dr EARLE PAGE:
Cowper -- I was surprised at the Minister's remarks in reply to the honorable member for Swan **(Mr. Gregory).** Instead of the primary producers having benefited from a trade war they have been seriously disadvantaged by reason of their having been exploited by a combine which has a monopoly of the trade of Australia in certain lines, as the result of action taken by this Parliament. The position is that various manufacturers of barbed wire in Australia - not merely the firm mentioned bv the honorable member for Balaclava (Mr.White) - found themselves obtain their raw material at a lower price than Lysaghts charged for the completed barbed wire. Lysaghts tried to prevent other manufacturers from competing with them, and eventually they forced their competitors out of business. The matter was brought before the Minister, who threatened an examination by the Tariff Board. The firm having a monopoly then went to the other manufacturers, and entered into an agreement with them to raise the price of barbed wire by £2 5s. a ton. That was done on the 11th May last, at which' time the price of wool was lower than it had been for five hundred years. **Mr. Scullin,** when Prime Minister, said that if any cases of exploitation and profiteering were brought under the notice of his Government he would appoint a committee to inquire whether there had been a restraint of trade. This is a case where the Minister should examine the whole of the facts. When Iraised the subject the Prime Minister said that the allegations were not correct, that the prices of certain other types of wire had been reduced. I pointed out that the price of this particular wire had been increased. **Senator Greene,** the Assistant Treasurer, said that the Government of New South Wales was the right tribunal to deal with the matter. The government of every State in the Commonwealth will have to deal with it, because prices are being pushed up in every State. But it is not the task of State governments to police the tariff; that comes within the province of the Federal Parliament, and I trust that this Parliament will take some action in the matter. {: #debate-30-s4 .speaker-KZR} ##### Mr WHITE:
Balaclava .- As I originally asked the question regarding this matter of restraint of trade, I feel that, in the absenceof the Minister for Trade and Customs **(Mr. Gullett),** I ought to explain exactly what action was taken by that gentleman. The nail manufacturers of Victoria complained that wire nails and barbed wire were being sold by a subsidiary company of the Broken Hill Proprietary Company Limited at a price which was about equivalent to that of the raw materials. They had to buy their raw materials from the Broken Hill Proprietary Company Limited. I asked if the manufacturers could have their material brought in under item 404, and the Minister promised to refer the proposal to the Tariff Board. An inquiry would have been made, but the . parties concerned evidently got together, and agreed that the matter ought not to be proceeded with. The Minister did the right thing, and all that could be done to investigate the matter. The fact that prices have gone up indicates that the price war is ended, and that prices are now more or less normal. I speak from the point of view of the Victorian manufacturers. It is difficult to see how the Government could have done any more. Had witnesses been subpoenaed they would have been hostile. {: .speaker-F4Q} ##### Mr Scullin: -- What is the charge - that the manufacturers were undercut in their prices, or that they were penalized for under selling? {: .speaker-KZR} ##### Mr WHITE: -- They were penalized. The company insisted that they should sell their products in Queensland and New South Wales at stated prices. Also, their products were being undersold in Victoria and Tasmania. I think it only right that I should explain that the Minister for Trade and Customs did everything possible. {: #debate-30-s5 .speaker-F4Q} ##### Mr SCULLIN:
Yarra .- The matter that has been raised is undoubtedly serious and should be investigated. However, I understand that the Minister has undertaken to have it investigated. It is quite true, as the right honorable member for Cowper **(Dr. Earle Page)** said, that, when I was Prime Minister, I repeatedly stated that, if cases of tariff exploitation werebrought forward, they would be investigated, and that, as head of the Government, I was prepared to take action to prevent it. {: .speaker-KXQ} ##### Mr Archdale Parkhill: -- But the right honorable gentleman never took that action. {: .speaker-F4Q} ##### Mr SCULLIN: -- Because no charge was proved. The honorable member and the present Minister for Trade and Customs **(Mr. Gullett)** were particularly free in making charges of tariff exploitation; but both have backed down since becoming responsible Ministers. I repeat what I said when Prime Minister - that if advantage is taken of a protective tariff to exploit the community and restrain trade, I shall be prepared to use every power the Government possesses to punish offenders. In fairness to the firm now charged, an investigation should be made, and in fairness to this Parliament that provides the protection, the evidence should be sifted carefully by an impartial inquiry. Unfortunately, the powers of this Government are limited by the Constitution. It should possess the powers over trade and commerce that are possessed by the States. It is also unfortunate that, if a tariff rate is removed because of the action of one person or body of people, many who are innocent may be penalized. I recall that in all the cases investigated by my Government the exploitation took place in distribution. Honorable members will remember that the names and addresses of those concerned were announced in this chamber. That is a power that this Government possesses. Where it cannot deal directly with those concerned, it can at least give them an advertisement which will not be to their advantage. {: .speaker-KZR} ##### Mr White: -- In this case the exploitation is by a monopoly. {: .speaker-F4Q} ##### Mr SCULLIN: -- And, therefore, much easier to deal with. I warn honorable members to keep their minds open on the subject, because I recollect that in so many cases where charges were made, it was proved on investigation that matters were not as bad as had been alleged. If the charges are not true, that should be revealed by investigation. If they are true, that fact should he communicated to this Parliament, so that it may know what to do. Question resolved in the affirmative. House adjourned at 11.6 p.m.

Cite as: Australia, House of Representatives, Debates, 1 September 1932, viewed 22 October 2017, <>.