13th Parliament · 1st Session
Mr. Speaker (Hon. G. H. Mackay) took the chair at 2.30 p.m., and read prayers.
– I ask the AttorneyGeneral whether in the calculation of the income of sons, before requiring them to maintain their parents, who otherwise would receive invalid or old-age pensions, war pensions are to be taken into account ?
-I do not know whether that point has been previously considered, but I undertake that it will be investigated.
– I ask the AttorneyGeneral whether the Government is prepared to direct that if a review of recent pension reductions should disclose that some of those who arc in receipt of a partial pension are entitled to the full pension they will be paid the full rate from the date of the recent reduction?
– I shall see that the honorable member’s question is brought to the notice of the Treasurer for early determination.
– I ask the AttorneyGeneral (1) is it a fact that the Queensland Government, through the Bureau of Economics and Statistics, is imposing unnecessary difficulties on persons who desire to purchase commodities in the southern States? (2) ls it not a fact that flour sent from the southern States to Queensland is handicapped to the extent of £3 10s. a ton, with a view to excluding it from that State? (3) Do not such practices constitute a violation of the fundamental constitutional provision for freedom of interstate trade? (4) Will the Government inquire into the matter, and take such action as may be deemed necessary ?
– From time to time it has been represented to the Commonwealth Government that the practices of various State governments conflict with section 92 of the Constitution. Recently the attention of the Commonwealth Government has been directed to the requirement’ of the Queensland Bureau of Economics, and Statistics that certain declarations shall be made by persons in that State who purchase goods from other States. That information is required for statistical purposes. The State Parliaments have powers as well as the Commonwealth Parliament to legislate in regard to statistics, and if the information now obtained through the bureau were not. available, almost certainly the Commonwealth would have to establish an agency for collecting it. , Accordingly, as at present advised, I cannot see that there is any real ground of objection to the Queensland procedure. “With regard to flour, I have not been informed of any facts which would indicate an infringement of section 92. If a State is able to make such arrangements for, in effect, increasing the local price of a commodity produced by its own people, at the same time allowing free entry to commodities from other States, the arrangement would not be inconsistent with section 92.
Investigation of TARIFF Items.
– I ask the Attorney-General whether the Government has made any arrangement to expedite an examination by the Tariff Board of the huge list of tariff alterations that have been necessitated by the Ottawa agreement? If so, what arrangements have been made?
– In accordance with the statement of policy made by the Prime Minister during the last election, the board is now engaged in the review of many items qf the tariff. Some of these items necessarily are affected by the Ottawa decisions. The board is at present so busily engaged that the Government cannot reasonably ask it to work with more expedition.
– I ask the AttorneyGeneral whether the inter-departmental report on civil aviation has yet been presented to the Cabinet? If so, when will its contents be disclosed to honorable members ?
– The committee was asked to investigate an .intricate and difficult subject. Civil aviation is still a relatively new activity, and the determination of a policy after some years of experience and experiment requires time. The inter-departmental committee’s report has been formally presented to Cabinet, a sub-committee of which is now dealing with it. I cannot promise that within a few days it will be made available, because the Government desires to consider the matter carefully in all its aspects before making any declaration of policy in relation to it.
– Does not the Attorney-General consider that the treasury officials have had ample time to ascertain the facts in relation to StarrBowkett Societies, and to decide whether they should be relieved of taxation to which they were not subject until recently ?
– The matter has been considered by the Government, and an early announcement regarding it will be made by the Treasurer.
– Will the AttorneyGeneral indicate the nature of the action which the Minister for Defence (Senator Pearce) stated yesterday was pending against a Melbourne weekly paper which had published an article relating to alleged disaffection in the Royal Australian Navy?
– Certain action is being taken and when a particular stage has been reached, which I hope will be Soon, I shall be able to furnish full information to honorable members who are interested.
– Has the AttorneyGeneral read the report in to-day’s newspapers of further disaffection amongst the ratings on H.M.A.S. Penguin11. Will he say whether the report is correct, and, if so, has he any information to give to the House on the subject ?
– I have not seen the report to which the honorable member has referred. I heard something of the matter yesterday, but I have not seen, and I do not think the Government has received, a full report upon the incident. The information received yesterday was to the effect that the discussion of certain matters had taken place, but I understood that there was no evidence of anything that could fairly be called disaffection.
– In view of the result of the presidential election in the United States of America, does the Commonwealth Government propose to cable to the President-elect congratulations on the marked change of heart amongst the American people, particularly in regard to tariff policy?
– The Commonwealth Government has almost enough to occupy it in relation to Australian political questions, without concerning itself with those of other countries.
– What amount of money is now being or will be made available by the Commonwealth to the Government of New South Wales to be expended on public works for the relief of the unemployed in that State, and what is to be the expenditure during the present financial year?
– The amount which the Commonwealth is authorized to expend on unemployment relief in New South Wales is £600,000. The payments are being made direct by the Commonwealth, and not through the State Government. The amount expended to the 31st October, 1932, was £406,000. This provision is additional to the £600,000 which the State Government is itself authorized to expend for the same purpose.
The following papers were presented : -
Northern Territory Acceptance Act and Northern Territory (Administration) Act - Aboriginies Ordinance - Regulations amended (Half-caste Apprentices).
Railways Act - Report on Commonwealth Railways Operations, for year ended 30th June, 1932.
Motion (by Mr. Lyons) agreed to -
That the House at its rising adjourn until to-morrow at 11.30 a.m.
Mr. LYONS (Wilmot- Prime Minister and Treasurer,, [2.43]. - by leave - Honorable members will recall that when the budget was brought down I pointed out that there were many uncertain features in the financial outlook, but the budget was prepared on a basis which was believed to be safe, and was adopted in order to secure the balancing of the accounts. I then made the following statement : -
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 its 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.
The financial statement issued to-day covering the transactions of the first four months of the present financial year reveals a surplus of £2,707,000. Allowing for the usual lag in the expenditure which is customary in the early months of the year,’ and which for the last four months amounts to about £900,000, the accounts to date reveal pro rata an actual surplus of £1,800,000 above the budget estimate.
For customs and excise the budget estimate was £27,600,000, For the first four months the revenue realized from this source was £11,069,000 which pro rata is approximately £1,800,000 above the estimate. The imports during this period have been higher than was expected. We have reason to believe that the increased importation has been due in part to the necessity to replace depleted stocks. No one expects that importation will continue on this scale unless there is an appreciable improvement in world prices. Nevertheless, there are clear indications that the revenue from customs for the year will exceed the budget estimate. At the same time, the position with respect to the balance of trade must be carefully watched, and, if action to correct an adverse trade balance should become necessary, it will be impossible, particularly at the present juncture, to predict the exact financial consequences of any such action.
The income tax collections to date represent arrears from last year’s assessments. These arrears are not now coming in as freely as in July and August, and income tax collections will be low during the next three months. On the whole, income tax is not expected to yield any considerable sum beyond the budget estimate. There is, however, evidence of a slight revival in trade and spending power of the community, which is exemplified by a steady increase in the returns from sales tax and excise. On the other hand, the four months’ expenditure figures, which are £900,000 below the pro rata budget estimate, do not reveal the true expenditure basis for the year in various ways, such as interest and works. There will probably be an increase in the estimate for invalid and old-age pensions of from £300,000 to £400,000, and taking the expenditure side of the budget as a whole, the probabilities are that the estimated expenditure will be exceeded by at least £250,000.
After carefully considering the whole of the budget, the Government believes that there will be a surplus of £3,500,000 above earlier anticipations. It must be remembered that the last budget benefited by two large fortuitous sums in the surplus of £1,314,000 brought forward from last year and the relief of £6,900,000 from interest, sinking fund, and exchange on the war debt due to Great Britain.
In considering the proposals which the Government is now submitting to the House, honorable members must bear in mind that we are unable to anticipate at the moment what our financial position is likely to be when Ave shall be called upon to frame next year’s budget. It is highly probable that, even if a settlement is arrived at in regard to war debts and reparations, some substantial sum will have to be found on account of our war debt to Britain next financial year, and, though the Government is this year proposing further substantial reductions in taxation, no guarantee can be given that these reductions will be continued in the next financial year or that they will be augmented. While, at the moment, the Government feels that it can justify the steps it now proposes to take, it must be distinctly understood that the reimposition of this taxation next year may be unavoidable.
In view of this expected improvement of the revenue by £3,500,000, the Government is taking the earliest opportunity to review the budget legislation as promised. Since the budget was brought down, there has been a substantial fall in the price of wheat, and the Government fully appreciates the consequential difficulties of the wheat-growing industry. During the recent Premiers Conference it took the opportunity to discuss the blatter with the State Premiers. Following upon a full discussion, the Premiers - with the Premier of Tasmania dissenting - passed the following resolution for the consideration of the” Commonwealth Government: -
That, with a view, to assisting the Wheatgrowers of the Commonwealth, favorable consideration bc given by the Commonwealth to the making by the Commonwealth to the States of a grant for the year 1933 of an amount not exceeding £2,250,000 to be allotted among the States on a production basis of the year 1032-33; the money so allocated to be utilized by the States for thu purpose of assisting thu wheat-growers in such manner as each State shall, in its discretion, determine. Provided that nothing herein before contained shall prejudice or affect the legislative powers of any State or the legislation thereof, presently in force, or to be’ hereafter enacted, directly or indirectly relating to wheat,. flour, and bread.
The Government has given these and many other representations that it has received the fullest consideration. It has come to the conclusion that it is unsound to provide assistance to wheat farmers 6ut of loan moneys, and it feels that it is most undesirable to raise a sum to assist the wheat-growers by placing further burdens upon the shoulders of those who provide employment in the community. All our efforts should be directed towards lessening this burden rather than increasing it. The Government, therefore, has decided to provide whatever assistance is in its power, out of the revenues which will be collected this year under existing taxation. In the opinion of the Government, the payment of a bounty on production on Hie basis adopted last year cannot be justified. The position under the payment of a bounty is that the farmer who obtains the higher yield, and enjoys’ the better conditions, reaps the greater benefits, whilst the farmer who works under disadvantages reaps the smaller benefit from the payment of a bounty.
The Government has decided to assist the wheat farmer in two ways. It proposes to make available to the State Governments the sum of £1,250,000, which will be distributed through the States on ft production basis to those wheat farmers who are suffering the greatest hardship under existing conditions: It is .proposed do nsk each State- to establish’ a committee, on which the Commonwealth Govern ment will have two representatives^ to advise the State Governments as to the class of cases in which assistance is to be given.
In addition, the Government proposes to grant a bounty of £1 per ton on all superphosphate purchased and delivered in the time between’ the passage of the bill and the 30th June next An arrangement has been tentatively arrived at with the superphosphate companies to reduce their list prices. This will be finalized at the first possible moment, and a bill will be introduced to provide for the payment of the bounty in all cases in which the price to the consumer is reduced by an amount which will be stated in the bill.
The Government will also approach the governments of the States with a request that they should consider a reduction of freight charges. Such action by the States would be warranted, it is considered, by the increased volume of traffic that would follow the reduction of charges.
This form of assistance has been, adopted* by the Government to aid rural industries, including wheat-growing, because it is directly and definitely reproductive to the industries themselves, and to the community as a whole.
Owing to the lowness of the prices or primary products, the burden of land tax, which is a tax on land without regard to the income derived therefrom, has reached a point at’ which it is almost intolerable, and the Government feels that some relief should be given to landowners, which will al30 enable them to increase the employment which .they can give. In fulfilment of the promise made when I delivered the budget speech, the Government will’ shortly be introducing a. bill to “extend the operation of section 66 of the Land Tax Assessment Act. The proposed alteration of the law will enable the1 Hardship Board to’ grant relief in cases in’ which loss has been occasioned by the fall in the price of primary products. This is not permissible under the existing law. Action will also be taken to expedite a3 far as possible, the hearing of these cases, so that taxpayers may obtain relief at the first possible moment. In addition, the Government proposes to introduce an amending taxation act providing for the reduction of the existing land tax rates by one third. The Government feels that the effect of these two concessions will materially assist not only the wool industry, but also many other enterprises in Australia.
The Government desires to remove the super tax on property income at the first possible moment, but the time has not arrived when, in its opinion, that step is justified. It is proposed, however, to give relief to the extent of about £500,000 by increasing the amount of the statutory exemption from the 10 per cent. super tax on property income. The new exemption will be a fixed amount applicable to all taxpayers who have property income.
– That still has to be fixed ; but it will probably be £300.
The Government also proposes to exempt the following articles from Sales Tax : -
Books, magazines and periodicals.
Fish of Australian origin.
Jams, fruit, pulp, canned fruits and canned vegetables.
Pickles, sauces and vinegar, and cakes which are now taxable.
Primage duty also will be removed in the case of books, magazines and periodicals.
This represents a reduction of taxation by about £200,000 for the remainder of this year, and for a full year it would represent a reduction of £330,000. It will be noted that in the main these exemptions will remove the tax from the manufactured products of the market gardener and the orchardist.
Certain anomalies exist in the Invalid and Old Age Pensions law, and the Government intends to make such adjustments as experience shows to be necessary in this regard. This will involve some additional expenditure in excess of the additional £400,000 of expenditure to which I referred earlier in my statement.
– Will the Prime Minister indicate the nature of the adjustments to be made?
– I cannot give details at the moment; but attention has been directed from time to time to many anomalies and injustices, not only in the amending legislation passed recently, but in the law as it stood previously. The Government intends to remove anomalies and injustices. It is believed that this can be done by administration, but if necessary, legislation will be introduced for the purpose.
When the budget was framed, every effort was made to keep the expenditure down to the lowest possible ‘point, and the Government rejected a number of proposals from the departments for urgent works. A review of the requirements of the departments is being made immediately, and it is proposed to add to the works expenditure for this year an additional £100,000. Every care will be exercised to see that this money is, so far as possible, expended entirely upon reproductive works which will justify themselves by providing the interest on the capital expenditure.
But for the difficulties arising out of the position of the wheat-growers, the Government would have been able to give much greater immediate relief to the general taxpayer. One of the major causes which is maintaining interest rates is our very heavy taxation imposts. It was hoped by the Government that circumstances would enable it so to reduce this burden that a reduction of interest rates on advances would have resulted. As I have said, the assistance the Government fee ls it necessary to extend to the wheat industry makes this course impossible at the moment.
However, I draw attention to the steps the Government has taken to reduce taxation, whilst at the same time keeping expenditure at as low a point as possible. When the budget was introduced, the Government announced remissions of sales tax and primage which would amount to £500,000, when all the remissions granted came fully into force. Nearly the whole of these remissions primarily benefited the man on the land. The further remissions now proposed will give a total relief from taxation of about £2,100,000. Here again the greater share of the proposed remissions will assist citizens engaged in primary industries more than any one else.
In conclusion, I express the hope that this may be only a first instalment of a review of the taxation field which will be more comprehensive later when circumstances permit. Whilst the Government believes that it is proper to grant relief to the taxpayer immediately to the extent it has indicated, it is my duty to emphasize that it can give no guarantee of the permanency of these remissions. Circumstances quite beyond the control of the Government may make it impracticable to continue these remissions in the future.
I have made this statement to convey the intentions of the Government to honorable members and to the country. It is hoped that, at a very early date, legislation will be introduced to deal with the whole of the matters referred to.
– Will the honorable gentleman move that the statement be printed so that we may have an opportunity <o discuss it?
– No. The Government will lose no time in introducing legislation to deal with the whole of the matters to which I have referred, and then honorable members will have an opportunity to debate them.
– Will that bo before the close of the session?
- by have. - I realize that we shall have an opportunity, at an early date, to discuss this second budget speech that the Prime Minister (Mr. Lyons) has delivered. But I feel it necessary to make one or two comments before we reach the general debate.
The Prime Minister has stated that Commonwealth revenue will exceed expectations, and that a surplus of something over £3,000,000 is expected. As a matter of fact, that was obvious to many honorable members when the budget speech was delivered. This is not an i instance of being wise after the event, for quite a number of speeches were delivered in the House at the time, predicting the position that has occurred. In my opinion, the revenue from customs was deliberately under-estimated, which was a wrong thing to do.
– That remark is offensive and a reflection on me, and I ask that it be withdrawn.
– I ask the right honorable the Leader of the Opposition to withdraw the remark.
– As the Prime Minister and Treasurer regards the remark as personally offensive, I withdraw it. I did not desire to be personally offensive. I am entitled to conclude either that the revenue was deliberately under-estimated, a statement which I have withdrawn, or that the estimate made is evidence of great incapacity, for the position was obvious before the budget speech was framed.
– The honorable member’s Government under-estimated the revenue by £22,000,000.
– The honorable member would not get so near the mark as that. His gibe is ill-timed, because, at that time, there was not a Treasurer, either in a government or private capacity, who could arrive at anything near an accurate estimate. But when the last budget speech was delivered, the Commonwealth finances had settled down to a position at least approaching stability, enabling a comparatively accurate estimate to be made. It is on record that private members, without the information at the disposal of the Government, were able to make a much more accurate estimate of the revenue than did the Government.
The under-estimate of revenue, and the picture that was placed before us in the budget, was the alleged justification for an unwarranted attack upon the incomes of poor persons who had already made considerable sacrifices. I should be glad to be able to join heartily in some of the proposals that have been put before us by the Government. I do not deny that taxation is heavy, and that Ave seek relief from it, or that the super tax on income is a burden on the community. Furthermore, our heavy taxation on small incomes is a hardship which I would gladly see lightened. But there is no hardship comparable with that imposed upon our invalid and old-age pensioners. I was a member of a government that proposed reductions in invalid and old-age pensions. But that was done in accordance with a plan -which asked those people to share equitably a burden placed upon other sections of the community. Faced with a deficit of £20,000,000, my Government raised, taxation by £7,000,000, and made a reduction of £8,000,000 in controllable expenditure, out of which invalid and old-age pensioners were asked to provide 12£ per cent., which took 2s. 6d. from the £1 a week they were then receiving. This Government is faced with no such deficit. It inherited a surplus from its predecessor in office, but created an artificial deficit by remitting £1,000,000 in taxation. It took more than £1,000,000 from, the invalid and old-age pensioners. Within three months after the budget was introduced, it is refunding a further £1,000,000 to taxpayers, which is approximately the amount that it has taken from invalid and old-age pensioners.
That is an outrage which will be resented throughout the length and breadth of Australia. ‘ I warn the Government not to dare to call this the carrying out of the Premiers plan. It is a violation of the fundamental principles of that plan, which provided that the sacrifice should be shared by all sections. The Premiers plan was not popular, but earnest efforts were made to apply economies as equitably as possible. This action of the Government destroys the very basis of the plan. The Government is piling burden after burden on the poorest section of the community. It has reduced the wages of the lowest paid officers of the Public Service, refused to pay the basic wage to adults in its employ, and cut the wages and allowances in the naval and military services to such an extent that trouble has been caused in those branches. .
The Government has done nothing worth speaking about to relieve unemployment. It has set aside a mere £100,000, while it is handing back to the taxpayers a further £1,000,000. And wha’t has it done to help wheat-farmers? It refuses to grant a bounty, as was done by my Government, and can advance no sound defence for that attitude. The Government is granting £1,250,000 to the States to relieve hardship. The relief of individual cases of hardship is the responsibility of the States. The only justification, and there is sound justification-, foi” the Commonwealth Government giving assistance to our wheat-growers, is that they may be encouraged to put in- seed for next year’s crop, and so produce wheat to ship overseas, to help to maintain our favorable trade balance, and keep the country solvent. The payment of a subsidy to a number of manufacturers of artificial manures so that they may reduce their prices to primary producers is an inequitable way of assisting wheat-growers.
– Because our soil values vary. Some soils require a large amount, of artificial manure, others require very little.
– On a point of order. The Leader of the Opposition asked leave to make a statement. I submit that he is indulging in a general debate.
– Honorable members gave the Leader of the Opposition permission to make a statement. I have no control over the subject-matter of that statement.
– The Prime Minister’s statement canvassed the merits and demerits of every proposal he put forward. There are wheat-growing areas in Australia that require the use of as much as 1 cwt. of manure to the acre. There are some which require even more, while others need none at all. It is evident, therefore, that the proposal to subsidize the purchase of manure is not equitable from the point of view of the wheatgrowers. We shall discuss this matter in greater detail when the measure providing for this bounty is before the House, and for’ tie time being I desire merely that my opinion shall go out to the people together’ with that of the Prime Minister.
I am a strong believer in land taxation, but I have never objected to section 66 of the Land Tax Act being administered leniently in cases of genuine hardship. I believe that those- who merit it should be’ treated even with generosity, but I strenuously oppose a general reduction in the rate of land tax. The bulk of the tax. is paid by weal’thy city property owners. Sympathetic administration of section 66 of the act will afford all the relief necessary to those rural landowners who are suffering as a result of low prices, droughts, or other disabilities. Under cover of assisting those people, however, it is now proposed to remit onethird of the taxation paid by wealthy city land-owners. It must be remembered that even rural land-owners pay no tax unless the unimproved -value of their property is £5,000, which, in most cases, would mean that the improved value is approximately £8,000. I object to concessions being made to the city land magnates, while the last penny possible is taken from old-age pensioners and the lower paid public servants. That is all I have to say at this stage, but I shall have much more to say later.
– I ask leave to make a statement.
– There will be a general debate when the measures are brought down, which will be as early as possible.
– Does the Prime Minister object to my making a statement ?
– I do.
Debate resumed from the 9th November (vide page 2161), on motion by Mr.
That the bill bc now rc:id a second turn-.
Upon which Mr. Scullin had moved by way of amendment -
That all the words after “That” be omitted with a view to insert in lion thereof the following words: - “the bill be withdrawn and negotiations opened for a new agreement embodying concessions to Australian producers and preferences to Great Britain on specified items without endangering our protective policy or depriving Parliament of its power to give effect to the will of the people on general tariff policy.”
– I wholeheartedly support the bill for the ratification of the Ottawa agreement. I do not believe that there is anybody in any part of the Empire who is entirely satisfied with the agreement, but I support it because it is a step in advance of anything previously achieved. There is no one in this House, not even the Friends of the Soviet Union, who does not favour the idea of mutual co-operation between all parts of the Empire in order to overcome the worst features of the depression. I wish to pay a special tribute to the right honorable member for Flinders (Mr. Bruce), the honorable member for Henty (Mr. Gullett), and the officers and ad visers who accompanied the Australian delegation to Ottawa. All of them rendered the most conspicuous service to their country. Since the conclusion of the conference, there has been a despicable attempt to disparage the achievements of the right honorable member for Flinders. It has been said that he lacked an Australian outlook, and failed to emphasize the Australian point of view. Any one who has worked with the right honorable member must acknowledge the unstinted vigor with which he has always defended Australia’s interests. In this he yields tn no one. He brought to his work at Ottawa extensive experience and outstanding ability as a negotiator. It has been suggested that he should have indulged in a little trickery, that he should have held something back, and haggled in the way in which, it is said, the Prime Ministers of other dominions haggled. Such suggestions are not fair to the Prime Ministers of the other dominions, and I am sure that a great deal of the success of the conference is due to the fine qualities of leadership displayed by the right honorable member for Flinders. As for the honorable member for Henty, every member of this House will extend to him a full measure of sympathy and gratitude. He has given to the cause of Empire consolidation the most valuable gift in his possession, namely, his health, for there is no doubt that his health has broken down through overwork at the conference. The Ottawa agreement as it stands to-day is a tribute to his devotion and ability.
Apart from the sentiment of kinship which induces all of us, I think, without exception, to desire the strengthening of the Empire bonds, there are cogent economic reasons why trade co-operation should be of mutual benefit to all the Empire partners; why in this instance it is as blessed to give as to receive, and why wo, who now cast our bread upon the waters, may look for its return in days to come.
– Not too many days, I hope.
– I hope not. We should welcome co-operation, so that, when trade is expanding and production increasing, we. may ensure, by giving reasonable protection - not enough to raise prices ; but sufficient to help against competition - that the major part of the normal increase in trade and production shall take place among those peoples with whom we usually trade. Take, for example, our trade in canned fruits, which compete on the British market with those from the United States of America. The competition, at times, is fierce. The Australian product competes at certain disadvantages owing to distance, freight, and the necessity of importing some necessary raw materials. Those disadvantages are measured by increased payments for freight to British shipping companies, and payments to the British manufacturers of tin plate, and Empire timber producers. It is clearly to the advantage of the Empire timber producers, of the British shipping companies, and the British tin plate manufacturers, that expansion of this industry should take place within the Empire, where they can build up a market for their products, rather than that the business should go to a foreign country which has never shown itself particularly friendly in matters of trade. This example shows the value to both sides of trade preferences. But to-day our need is not so much a growth of trade within the Empire as the averting of the liquidation of certain forms of production. It is of immense value to allow trade and production to grow inside the Empire faster than elsewhere, but the preferences are immeasurably more important because of the influence they will have in continuing in production many Empire producers who are struggling for an existence. As the Prime Minister explained recently, the price of mutton has fallen so low that it practically does not pay the charges for processing and transport from Australia. The little extra distance and expense mean that in the liquidation, the forcing out of certain settlers, which is facing the world to-day, Empire producers are at great disadvantage as compared with foreign competitors unless they receive a preference. A strong case for granting such a preference can be established. There are certain objections in the United Kingdom to a tax which might increase the price of so essential a food as meat, but when it is a matter of giving help to their own kith and kin in order to enable them to continue producing in competition with foreigners, the consumers of the United Kingdom should not hesitate to face a slightly additional cost, which would be only temporary. The prices will rise in any case if producers are forced out of business, and the preference necessary to keep them in production would not send the prices higher than they are bound to go through economic causes. But the Ottawa agreement went beyond that point. Discouraged by the failure of attempts by the main banking countries of the world to raise price levels by means of currency regulation, the delegates at Ottawa agreed to apply a quota with a view to raising prices within the British Empire. If this quota can be worked - and with goodwill it can - it will mark a new era in the rationalization of production and trade. It will enable Empire producers of meat to continue and expand; if the regulation of supplies is wisely applied it will raise the prices to a figure which will enable the producers to carry on, but not so high that the suppliers would be unfairly exploiting the consumers.
I have briefly summarized the general aims and objects in acordance with which the detailed provisions of the agreement is framed. The contract is twofold - it includes British concessions to Australia and Australian concessions to Great Britain. The British concessions to us are generous; they mean the abandonment by the Mother Country of the fiscal policy to which it has adhered for generations, and acceptance by the United Kingdom of taxes on food, or of schemes to raise food prices. These proposals fall into three classes. Possibly that which gives the least direct benefit is the imposition of a sheltering duty. This should divert trade from foreign countries, and assure the market to Empire ‘producers. It will not increase the total volume of trade, but by keeping Empire trade within the Empire, will make it more secure. Such preference Great Britain has given on the principal base metals and wheat. I do not see that it would have been possible for the British Government to make any concession which would have raised the price of wheat to British consumers. The enormous quantity of Empire grown wheat which must be sold outside the Empire is bound to control the prices of the whole, unless there are elaborate restrictions and regulations to supplement the preference. But the diversion of trade into Empire channels and the securing of the Empire market were particularly desired by many sections of wheat-growers in Australia and Canada, and Great Britain has agreed to -grant to dominions wheat a preference at 3d. per bushel. But of much more value is the similar shelter accorded to the producers of base metals. Large scale production is in the hands of comparatively few producers throughout the world, and international metal groups have done a great deal to share the markets between them. In none of the agreements is there any stipulation regarding prices; all are free of any possibility of the consumers being unfairly mulct, but they enable the various producers to foresee the extent of production which each will be able to maintain. In dividing the markets of the world, the American producers, whose output is great, have always enjoyed a monopoly of the markets of the United States of America, which has never been counted in the general pool. By the Ottawa agreement, the British market for copper, and almost certainly for the other base metals, will be reserved for British producers. These are the least tangible of the benefits of the agreement, but they are very real.
There is also a big list of special preferential duties. Probably the most important of these is 15s. a Cwt. on butter. Nobody can justly say that the price received by the Australian producer of butter is high. The dairyman has to struggle to keep going even with present prices, but in competition with Denmark, Scandinavia, Russia, and other countries, the concession of 15s. a cwt. will be of inestimable value. Many of our competitors have , to buy cereals for the hand-feeding of their stock, and the duty of 15s., even if it does not lead to a corresponding immediate rise in prices, will be of great assistance in enabling Empire producers to hold on, and in making it more difficult for foreign competitors, if they lower their prices by 15s., in order to hold the market, to buy the feed neces sary to maintain the production of their herds.
The meat quota is a most hopeful experiment. It is a real effort to rationalize the trade in meat, and to raise the price to a level which will avert wholesale liquidation. The original request made to Great Britain was for a preferential duty similar to that on fruit and dairy produce; but the British delegates were reluctant to impose a tax on foodstuffs which might become permanent, even after the prices rose. Therefore, they agreed to this quantitative regulation. The progressive reduction of foreign imports will be of greater and more immediate assistance to Empire producers than any preferential duty could be. A preferential duty could not raise prices to Empire producers until it had depressed the production of foreign competitors by reducing their returns and lowering their standards. The certainty that such competition will be immediately reduced by means of this quantitative restriction will be of substantial assistance to Empire producers. A certain amount of criticism has been directed against the agreement of Australia and New Zealand to limit the supplies to be sent to the United Kingdom during the year 1933; objection to that is taken in the circular issued by the Bank of New South Wales, but it is clearly made by somebody who is without a scientific and economic conscience, and has not bothered to ascertain the facts. The limitation of Australian exports during 1933 is entirely unobjectionable, and should not lead to the curtailment of production by one sheep or lamb. There is no stipulation in the agreement as to the months in which the Australian and New Zealand quotas shall be shipped. The Australian export season spreads over the end of each year. If 1933 should be another bumper season with heavy production, and there appears to be any chance of the exports of mutton and lamb exceeding the quota, it will be easy to regulate shipments, and hold a proportion of the kill in Australian freezers for a few weeks, so that it may arrive in’ England in 1934, when there will be no limit on imports from the dominions. The effect of that limitation will be to spread out shipments - if large shipments - over a little longer period, .and thus enable the trade of England to dispose of the glut that has accumulated there. If that glut is not cleared up, as the Prime Minister (Mr. Lyons) explained a day or two ago, prices are so low that there is not the slightest chance of Australia or any of the other dominions producing the quantity allowed for in the quota. It is therefore plain that the meat concession will be of great value to the Australian producers. The concessions, as a whole, have two values. They have a net value to the Commonwealth, because new money will be brought into the country, and the British purchasers will pay higher prices for dominion products. Then they have a much greater value to the extent to which they raise the- price level of products sold both in Australia as well as Great Britain. It is the export parity which determines the price which the producer receives for the whole of his output. If the export parity is raised, even though it may represent only a small fraction of the total production, it has the effect of raising the price over the whole continent. For that reason the meat concession will be of great value to the wool-growing industry, and, to some extent, the wheatgrowing industry. The most important secondary product of both those industries is mutton, and to a greater extent, lamb. If the pastures are relieved of a reasonable surplus of export lamb each year, that will enable better prices to be obtained for store sheep. At present, prices are at a disastrously low level, because our pastures are heavily stocked, and are not being relieved as rapidly as they should be. If we experience a drought under present conditions, we may lose tens of millions of sheep. I do not- think that the numbers would fall as they did in- the ‘nineties, when they fell from 106,000,000 to 53.000,000, but they might easily fall from 110,000,000 to 75,000,000 or S0,000,000. If we are able to find an outlet for a few million lambs and fat sheep each year, that will be a safety valve of great value, and should, and will, help materially to increase the income of practically all the producers in the wool and wheat industries. That is the Only way in which the Australian wool-growing industry can be assisted. A preferential duty on wool might benefit New Zealand, because nearly all the wool, from that dominion is sent to Great Britain. It is wool of a Bradford type, which is produced both in New Zealand and South America. A preferential duty might, therefore, be of benefit to the wool-growers of New Zealand, because it would have placed the South American growers at a disadvantage. But such a duty would have been of no practical help to the Australian wool-growers, because less than one-third of our wool is sent to Great Britain. Australian wool is sought by every country which manufactures woollen goods. We have, therefore, the advantage of world-wide demand for our wool, and the limitation of competition in world-wide markets. But the advantages are much greater than the disadvantages, although they have their limitations. It is only through help to the meat industry that the wool-growing industry - the greatest of all our industries - can be assisted by Great Britain. The Australian concessions have been attacked as being, on the one hand, too effective and, on the other, not effective enough. The first thing that we should do to assist the trade and industries of Great Britain would be in its hour of unemployment and need, to buy immediately more British products. Australia is much poorer than it was a few years ago. We have to maintain the payments of our debt charges, and we can purchase only what we can pay for out of the surplus revenue from our exports. That has placed a decided limit on the new trade that we can give to Great Britain. When our industries revive under the influence of world conditions or ‘agreements such as this, we shall have an additional purchasing power which we can apply for the benefit of Great Britain. But at the moment the only additional trade that we can give to Great Britain is by purchasing from the Mother Country goods which at present we buy from foreign countries. Therefore, the intention of the tariff alterations, made in accordance with the formula, is to divert trade from foreign countries to Great Britain. It is an in- fluence which will endure whether the tariff goes up or down. The formula, of course, has limits in this respect, because many of our. imports from foreign countries are of essential goods, such as oil products, which are not produced in Britain, while we must also import from outside Britain a number of other essential goods, such as jute products, or tea, which, although obtainable in the Empire, come largely from Empire countries which do not take much Australian trade in return. Although the application of the formula in an upward direction is not objected to by the Leader of the Opposition (Mr. Scullin), it has met with much criticism from the members of the Country party. Many of us regret that it was not possible, with conditions as they are to-day, to apply the formula in any other way. The pledge which was. given by certain leaders of this party that the tariff would not be reduced suddenly without full inquiry prevented the formula from being applied in a downward direction. I, personally, was not bound by that pledge; but 1 respected it because it was given by the leaders of my party. It was somewhat similar in phrasing to the policy speech of the Leader of the Country party (Dr. Earle Page), who, if he did not commit himself to the pledge, to some extent, condoned it. Had I remained a member of the Ministry I should have been prepared to accept the decision of the leaders of my party. The effect of the large number of tariff increases has been overstated. If honorable members will examine the list of increases of duties that have beer, circulated, they will find that practically one-quarter of them . are increases of duties on goods which, so far as Great Britain is concerned, come in at the free rate. i It is mainly on those items, which are generally the most important in the new schedule, that the formula can best effect a diversion of trade. The items which affect the greatest quantity of foreign trade are items which come in from Great Britain on the free list, or with a revenue duty only of under 15 pei’ cent. It is substantially on those items that Great Britain can receive additional trade from Australia at the moment. As the British rate on these items is free, the formula can be applied only upwards. If honorable members examine the list they will see, for instance, that the biggest increase of duty is on cream separators, which previously were free in respect of all countries. If Great Britain is giving us a preference of 15 per cent, on dairy produce, it is not unreasonable to expect our producers to buy British dairying machinery. Another large increase of duty is on item 169, relating to typewriters and type-setting machines. In the pa3t, nearly all machines of that type entering Australia have come from the United States of America, a country which does very little trade with us. Another large increase of duty is on mercerized cotton yarn, which also comes from that country. The United States of America obtained a great start in respect of these goods during the war, and although British goods are being made of adequate quality and at a reasonable price, the British manufacturers have not been able to break down the connexion and goodwill that the American firms have established in Australia. Our immediate total purchases from Great Britain could not have been increased in any other way than by the application of the formula. The objection taken by the Labour party is the opposite of that taken by the Country party. The objection of the members of the Opposition is mainly to article 12, and they do not like articles 9, 10 and 11. Those articles were framed to meet a difficulty which has arisen as the result of the welter of tariff-making which was indulged in by those honorable . members when they occupied the treasury bench. They altered hundreds of items in such a wild and indiscriminate manner as to make it impossible for this Government in the time as its disposal to examine all of them and to ascertain what alterations* are necessary. Alteration’s downward are undoubtedly duc and justified, and this was indicated by the Prime Minister in his policy speech, with the pledge to investigate first each item on its merits. The articles- of the agreement to which I have referred were agreed to by the British Government in order to meet the difficulty in which the Australian Government found itself. In addition, they were considered by the British and dominion Governments as so fair and reasonable that they are incorporated not only in the Australian agreement, but also in the treaties with other dominions. The Leader of the Opposition said that no other dominion had bound itself in this way, but both New Zealand and Canada have done so. The point has been taken, that it is an abrogation of the powers of Parliament for it to bind itself to the decisions of an outside body; but these articles will result in a thoroughly useful and valuable reform which any sane Government would have effected in any case. The agreement was made for a five-year period, in the interests of dominion producers. We really wanted a ten-year or fifteen-year period, so that, for example, we could plant fruit trees, with the certainty that a market would bc available when they came into bearing. Continuity is highly necessary in an agreement of this kind. There was no desire in determining the period for which this agreement was fixed to prevent future parliaments from negotiating with the United Kingdom or the other dominions, but a desire to obtain security for our producers. Nearly all the items of produce on which concesssions have been granted take time to produce. The building up of a dairy herd, the raising of stock, and the bringing into production of virgin country all require time. I agree with the honorable member for Maribyrnong (Mr. Fenton) that articles 9 to 12 should be read in conjunction with the previous tariff schedules which have been introduced by this Government.
The provisions which they contain were devised in conformity with the policy speech of the Prime Minister because, as there has not been sufficient time to implement in full a schedule to the treaty, it was necessary to give the British Government some guarantee of future concession along these lines. I entirely disagree with the view that these provisions are valueless. Not only are they a guarantee of the intention of the Commonwealth Government to adhere to the spirit of the conference, but, as some honorable members of the Country party have pointed out, economically they are among the most valuable provisions of the treaty. Through their operation the treaty will result in a reduction of costs in Australia, as well as some raising of the prices of the products on which concessions will be granted by Great Britain. The paragraph in the Prime Minister’s policy speech which relates to tariff reductions after investigation by the Tariff Board reads as follows : -
Where the tariff has been raised to what may be considered excessive levels without reference to the Tariff Board, we would submit cases for hearing as soon as practicable, and we would in broad principle abide by the recommendation of the board.
These articles of the treaty are in absolute conformity with the pledge which the Prime Minister then gave, and which was endorsed by the people of Australia last December.
I have received a circular from the President and Secretary of the Australian Industries Preservation League. The secretary of that organization was himself at Ottawa. This circular raises the question whether these articles are in conformity with the Prime Minister’s undertakings during the election campaign; but obviously that is special pleading. The circular makes it plain that this organization realizes that these articles mean that there will be an effective revision of the tariff. The concessions that Australia is receiving are detailed and specific. Great Britain has slated exactly what she will do. Some of the concessions which Australia is giving are indicated in the formula. The removal of the surcharges and prohibitions is definite, but the carrying-out of some of the articles of the agreement still remains to be done by the Commonwealth Government, and there is a double obligation on both the Government and the people of the Commonwealth really to give effect to the principles of a competitive level tariff upon which they are based.
The suggestion has been made in various quarters that this treaty will damage our trade relations with foreign countries. Looking at this contention from the Australian stand-point it may be said that there is no question but that the giving of trade advantages to Great Britain at the expense of foreign countries will cause some resentment. But a number of foreign countries have for many years consistently dealt harshly with us. We have never, for instance, had any consideration from the United States of America. However, if honorable members will carefully examine the schedules they will see that the most substantial preferences are given to Great Britain on the class of goods which will come either from Great Britain or from countries which have never considered us in the past. The articles indicated in parts II. and III. of schedule F have been described by one honorable member as insignificant, but it will be found that nearly every item of importance which we import from our good customers is included in the schedule. I call particular attention to silk, which has always entered Australia at a relatively low rate of duty compared with those applicable to other luxury goods. But there is provision that where the preference on some items of silk is already very small it need not be increased, and where it is substantial on some items it may be slightly decreased. Another item which is of considerable interest to several of our best customers is glass. Provision is made for substantial reductions on this item in the case of countries with which Australia enters into trade agreements. Such provisions as these have never before been made in Australia’s tariff history. They are a distinct advance and represent a genuine attempt to obtain trade agreements with countries which have been economically friendly towards us. I an. sure that if the Minister for Trade and Customs had been fit and well, he would already have opened negotiations for agreements with foreign countries with which we are on good trading relations.
It has been said that there should have been a preliminary conference of business men before our delegates left for Ottawa. This would have been desirable. We might, with advantage, have formulated a comprehensive Empire economic rationalization policy. An attempt to do so in Canada was not very successful. The representatives of the Australian leather trade did actually come together. I hope that such . conferences will take place in the future. But it would have taken six months at least to arrange and hold satisfactory conferences of this kind before the Ottawa Conference was held, and I do not think that anything effective could have been done in such a short time. I point out, however, that the greatest care was taken to consult practically every section of Australian industry, and I know that the British Government took care to consult different interests in Great Britain. The treaty, as it is, represents the averaging out, the sifting and the sorting of advice and recommendations which were freely and generously given by all sections of Australian business people and producers. Many of our manufacturers were broadminded enough to give all the help they could in pointing out where concessions could be made. It is from a small clique of particularly selfish vested interests that the agitation against this agreement is coming. Mr. McKay and Sir John Vicars gave inestimable help to the Government in recommending and advising along certain lines. They realized that their own prosperity and that of all the secondary industries of Australia would be immensely helped by anything which increased the prosperity of our exporting industries. ‘ [Leave to continue given.~
Let me take one item of the treaty in respect of which there has been bitter opposition ; I refer to the small concession of 40,000 centals of bananas. If prosperity is lifted even a very little in Australia it will make possible the absorption of much more than 40,000 centals of bananas; while if it is not lifted, a large area will have to go out of banana production. It is our farsighted manufacturers as well as our primary producers and exporters who have helped to make this treaty a starting point in real Empire trade reciprocity. The treaty is an attempt to strengthen the Empire on a world basis by mutual help. It will make a new foundation for Empire trade, and will help to lift us out of the depression. The British Empire is the largest unit in the world. Hitherto it lias been subdivided by many local divisions and jealousies, and much shortsightedness. These divisions, not only in the British Empire, but among other nations of the world, have enormously contributed to the bad times from which we are now suffering. The ratification of this treaty will make possible a more freely flowing trade which will be beneficial to every part of the Empire. It will enable us to make satisfactory reciprocal trading arrangements’ with foreign countries that are friendly to us. But it will not do these things unless it is operated in a spirit of give and take. I am sure that the people of Australia will receive it in this spirit, and that they will give short shrift to fractious sections which, for party reasons and from considerations of self-interest, try to obstruct and destroy it. Upon the ratification and amplification of this treaty we shall be able to build a stronger superstructure of the Empire and expand its trade in a new spirit of mutual help and goodwill.
.- I had great hopes that the Ottawa Conference would result in decisions that would be beneficial primarily ‘to Australia, and secondarily to the Homeland ; but I support the view of the honorable member for Maribyrnong (Mr. Fenton) of this agreement. I fear that it may have other results than those intended. For this reason I shall support the amendment of the Leader of the Opposition (Mr. Scullin) which, if it is not carried, may still provoke thought and open the way for subsequent alterations and amendments which experience will show to be necessary. As to the agreement itself, I shall make a quotation from last Friday’s issue of the Age newspaper, which is not only the most powerful journal in Victoria, but is also influential to a lesser degree throughout Australia. It is recognized as having been the means of making Australia a protective community. The majority of honorable members are protectionists. But, once having created the parliament, every three years, the people, its creators, have no further powers, and, too frequently, the real object of true protection is passed by and injured. The following extract is taken from the Age of the 4th November last : -
Australia’s Ottawa delegates usurped plenipotentiary powers, and only now is Parliament being invited to endorse without question what, without authority, they did. If members of Parliament assented to that process representative government would be at an end. Even Ministers render lip service to the truth that to Parliament, belongs the right to accept, amend or reject the agreement. Government supporters, however, -have been given to understand that their right may be exercised only in the direction of acceptance. The people of Australia will proceed to take count of those members who meekly surrender to the threat implicit in the announcement that the agreement is “ vital “.
This, too, is my opinion. I wish to express my regret that, through ill health, the Minister for Trade and Customs (Mr. Gullett) is precluded from being present and taking charge of this bill. Article 9° reads -
His Majesty’s Government in the Commonwealth of Australia undertake that protection by tariffs shall be afforded only to those industries which are reasonably assured of sound opportunities for success.
Who is to be the judge ? A long political life has taught me that arguments are sometimes surreptitiously used by socalled free traders, who occasionally will employ any means to “win, tie, or wrangle “. Splendid ideas £ave been promulgated by those who espouse the principle of the single tax. They are purely free traders. Some years ago, one of the greatest men produced by the United States of America came to Australia to lecture on the single tax system. The lecture was to be given at the Melbourne Town Hall, and several members of parliament were asked to preside. They declined, and finally I accepted the chairmanship. I urged the lecturer to devote 50 per cent, of his remarks to the subject’ of land tenure, and if he chose, 50 per cent, to freetrade. From that time the Single Tax League has tried to block trade protection.
Who is to judge whether these industries have a chance of success? At least two members of the Tariff Board are my personal friends, but I realize that they were appointed by the Bruce-Page Government, a freetrade Administration. The Scullin Government, which later assumed office, and was truly protectionist, made no further appointment’s to the board. I maintain, therefore, that because of its freetrade ideas, the board cannot properly be the judges in this matter. Articles 10 reads -
His Majesty’s Government in the Commonwealth of Australia undertake that during the currency of this agreement the tariff shall be based on the principle that protective duties shall not exceed such a level as will give United Kingdom producers full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production, provided that in the application of such principle special consideration may be given to the case of industries not fully established.
That is wiping out the whole of the power of the Government. Article 11 is as follows : -
His Majesty’s Government in the Commonwealth of Australia undertake that a review shall be made as soon as practicable by the Australian Tariff Board of existing protective duties in accordance with the principles laid down in article 10 hereof, and that after the receipt of the report and recommendation of the Tariff Board the Commonwealth Parliament shall be invited to vary, wherever necessary, the tariff on goods of United Kingdom origin in such manner as to give effect to such principles.
That review is being proceeded with, but it will take a long time to hear evidence from all concerned. Article 12 states -
His Majesty’s Government in the Commonwealth of Australia undertake that no new protective duty shall be imposed and no existing duty shall be increased on United Kingdom goods to an amount in excess of the recommendation of the tariff tribunal.
That contains my principal cause of objection. I have many times voiced the opinion that the created thing should not be more powerful than its creator. Yet the Tariff Board, created by Parliament, is to be more powerful than Parliament itself. If honorable members relinquish their rights in this way the citizens of Australia will certainly remember it. Article 13 reads -
His Majesty’s Government in the Commonwealth of Australia undertake that United Kingdom producers shall be entitled to full rights of audience before the Tariff Board when it has under consideration matters arising under articles 11 and 12 hereof.
I do not know why there is any necessity to specify one particular section, uuless it is to give it a special privilege. It should be provided that all who are interested in this matter will have equal rights.
I remind honorable members of a new protection, which seeks to place matters on a fair and proper basis. It will give to the manufacturers, through the tariff, protection to enable them to compete against the products of England, with its lower wages and perhaps more uptodate machinery. Incidentally, I certainly desire to see Great Britain receive preference over foreign nations. It will give protection to the worker through either the operation of wages boards or a fair arbitration court. I shall refer to a book written by a great American, Henry Demarest Lloyd, entitled A Sovereign People. It describes an ideal court of arbitration, Le Conseil des Prud’hommes - the Court of the Wise Men. This admirable work states that, in Switzerland -
Ten courts of arbitration deal with disputes in these groups of trades -
Earth and building works.
Foodstuffs and liquors.
Paper-making and polygraphic industry.
Retail trade and other callings (banks, insurance, employments connected with literature, art and science).
It also points out that in Switzerland no fewer than 6,141 cases of industrial disagreement were settled at a cost of from 10d.to 25s. Compare that with the cost of arbitration in Australia, where in one instance, £20,000 was spent by a single union to obtain only a modicum of justice. That was a case of the Australian Tramways Employees Association. As a memento of the struggle I and the honorable member for Bourke (Mr. Anstey) carry on our watch chains gold medals presented to us by that union for services rendered. We are the only men so honoured. The new protection would also give protection to the public by having a published list of prices, which could not be exceeded.
– Would that mean the fixation of all prices?
– Whenever possible. I understand that there are difficulties in the way, but there is no difficulty that cannot be overcome if sufficient brains and energy are applied to it. One of the greatest men that . England ever produced, well known and respected in the United States of America and Prance, stated definitely that no man should have the power to make laws that the future must obey. No parliament has the right to make laws to tie down succeeding parliaments, as is proposed in this agreement. Hitherto I have been of the opinion that, in Australia as well as in the Homeland, each parliament had always the absolute right of amending any law made by a predecessor. This agreement introduces a new principle, which is fraught with danger, and which I shall oppose.
– How would the honorable member overcome the difficulty when an agreement has to be approved by a number of parliaments whoso terms may expire at different periods, some, perhaps, within a few months?
– It could easily be overcome. If the operation of an agreement were proved satisfactory during the life of one parliament, its successor would surely be wise enough to continue it. But no agreement should be unchangeable, like the laws of the Medes and Persians.
I shall now quote an extract from a magazine entitled To-day, dated the 1st November, 1932. The document accuses the manufacturers as a body of exercising great influence on the political history of the Commonwealth for their own advantage. The points made are as follow: -
Tl,ey have bought most parties prior to an election with their support, nave been rewarded with a higher tariff and sold each purchased party at the next election.
At the 1901 election they supported the Barton-Deakin Government, received the Kingston tariff of 1001 in return, and forsook the Deakin Government at the 1003 election. In consequence the Deakin Government lost office for a time. At the 1000 election the manufacturers supported the Deakin Government and were rewarded with the Lyne tariff of 1907. But although the manufacturers had arranged the Deakin-Cook fusion, they swung tq Labour at the 1010 election. The Fisher Government rewarded thom with the Tudor tariff of 1911, but was deserted by them at the 1913 election. Cook obtained a majority and formed an administration. At the 1914 election the manufacturers again supported Labour and were rewarded in 1915 with another increase in the tariff. At the 1917 election the manufacturers were not worrying about a tariff, as the war and lack of shipping had brought imports to vanishing point. At the 1919 election the manufacturers supported the Hughes ‘ Government and were rewarded with the Massy Greene tariff. They deserted that Government at the 1922 election and Hughes had to leave office. The manufacturers supported the Bruce-Page Ministry ut the 1925 election and were ‘rewarded with the Pratten tariff of 1920. They deserted that Ministry at the 1028 election and supported Labour at the 1929 election. They were rewarded with the Fenton tariff of 1029, and the Scullin prohibition of 1030. At the 1931 election they supported the Lyons party.
That is the record of a powerful combination, which has been out for its own interests all the time.
The Ottawa agreement is a created thing. It is now being forced upon us; but we as a parliament will be foolish if we do not alter and amend many of the clauses. The method in which this agreement has been presented for our acceptance is dictatorial and undemocratic. The only democratic way of dealing with the agreement would be to permit the people to express their opinion on it, instead of having its fate determined by a chance majority of members of the Parliament. I am sure that the Ministry, courageous as it may be, will not deny that the people should have a voice on this matter. Probably the only really democratic country in the world is Switzerland, and were this agreement before the legislature of that country, it would not be finally dealt with until the people had been afforded an opportunity of expressing their opinion upon it. It might not be necessary to hold a referendum, but if, within 60 days, a petition bearing the required number of signatures were presented, a referendum would have to be held. On the election hustings we boast, when seeking the suffrages of the people, that we favour a democratic system of government, but when an important issue such as this has to be determined, we refuse to consult the people. I have no desire to engage in fractious opposition, but I may be tempted later to move an amendment that, when the bill is passed, it shall be placed before the people for them to vote upon. If this agreement should injure Australia, the chief sufferers will be the people whom we represent. My fears are making me speak in this way. I view the agreement with alarm, seeing in it features dangerous to Australia. Articles 9 to 12 are particularly open to suspicion. If the legal members of this Parliament were invited to express their opinion on those articles, they would, I am sure, be sharply divided. As that sturdy democrat, Thomas Paine, has said, no man has a right to make laws which cannot be altered, amended, or approved. No body of men has the right to make such laws, and no parliament has the right to make laws that future parliaments must obey, without the right of altering, ‘ amending or approving.
– I begin by expressing my regret that the two members of this House who represented Australia at the Ottawa Conference arc not present here to-day. The right honorable member for Flinders (Mr. Bruce) is an international figure, renowned for his ability as a negotiator, and Australia was fortunate in having his services at its disposal. Soon after my entrance into politics, I was, as honorable members may recall, concerned in an issue that brought me almost daily into contact with the Minister for Trade and Customs (Mr. Gullett), and I was greatly impressed at that time with the energy and sincerity with which he discharged his public duties. Undoubtedly, he brought those qualities to bear upon his work at Ottawa in added measure, and consequently returned broken in health through over-exertion. I trust, however, that it will not be long before he is able to resume his place in this House, again to serve his country, which is the main ambition of his life. I desire also to pay a tribute to the fine, work done by the honorable member for Wakefield (Mr. Hawker) before the conference began. He was a member of the sub-committee of Cabinet which prepared Australia’s case for presentation at the conference. His profound knowledge of Australia’s primary industries was of the greatest value to his colleagues on that committee, and to the Australian delegates who represented Australia in Canada.
I listened intently to the speech delivered recently on this bill by the right honorable member for Cowper (Dr. Earle Page). In many respects that was a most extraordinary utterance. The right honorable member not only disagreed with the results of the conference, but he used a strong expression when he said that he condemned them. A little later in his speech he announced to a somewhat startled House, that he intended to support the agreement, because of articles 9, 10, 11 and 12. Later again, however, he said that the presence of those articles in the agreement was unnecessary. One can only assume, therefore, that the right honorable member intends to support the bill because of something which he claims to be unnecessary. That, surely, was an extraordinary attitude for him to adopt. The plain fact which emerges from the right honorable member’s speech is that members of the Country party are reluctant to support the agreement. I am surprised at the attitude of the Country party on this matter. The agreement has been drawn primarily to benefit Australia’s exporting industries, and even the hint from the leader of that party which claims to represent country interests, that he is reluctant to support wholeheartedly the ratification of this agreement, has filled me with astonishment.
Many important measures have been before this Parliament of recent years, measures which, no doubt, will assume historical significance in the future; but I doubt whether any of them will, in days to come, be regarded as of greater historical importance than the agreement we are now considering. For many years the need for evolving some system of reciprocal trade between the various parts of the Empire has been apparent to statesmen in the United Kingdom and the dominions, but it is only now, after a long period of effort, that the ideal has been consummated. We need to go back only a very few years to realize what a great step forward was taken at Ottawa. The Imperial conference of 1930 was almost barren of results so far as trade reciprocity was concerned ; but common adversity has since drawn the British group of nations together, and the advantages to be obtained from trade reciprocity have been made apparent. It is realized, also, that any advantage which may be derived by the peoples of the British Empire from co-operation of this kind will, through them, benefit also the rest of a suffering world.
Of late years many of the old ties of Empire have been severed, and this caused foreign nations to ask whether the eminence of the British Empire had not reached its zenith, and whether it was not now actually in its decline. I have no hesitation in saying that the meeting of the British nations at Ottawa was looked upon by many foreign countries as a testing of Empire solidarity. The most important facts which emerge from the meeting is that the Ottawa Conference has been held, that the nations of the Empire have deliberated, and that the conference has succeeded. A new era opens up before the people of the Empire. Side by side with the ties of kinship and identity of ideals, Ave have now binding the Empire together ties of trade reciprocity. On those foundations I trust that a great and enduring edifice will be erected.
The Australian delegates at Ottawa realized that prosperity could be restored to Australia only by making our export industries prosperous. It is obvious that if the primary industries thrive, the secondary industries will also prosper, because of the improvement in the home market. Therefore, our representatives at Ottawa aimed at securing concessions which would ensure enlarged markets for the exporting industries, assure them of continuity of demand, and offer hope of future prosperity.
The advantages obtained for the primary producers are of two kinds - the concessions granted by the United Kingdom, and the concessions granted by Australia. By the latter, I mean the hopes of a wiser fiscal policy offered by articles 10, 11, and 12 of the agreement. The concessions from the United Kingdom may be divided into two classes (1) the maintenance of existing concessions, and (2) the granting of additional ones. Under the Import Duties Act, the first comprehensive venture of the Mother Country into the realm of tariff protection, valuable preferences were granted to dominions over a wide range, but mainly in respect of agricultural products. Undoubtedly these were considered to be of substantial advantage; although they did not lead to any real rise in prices, they probably prevented a further fall. These preferences would have expired this year, and their extension for five years gives an increased sense of security to our producers.
The second concession by the United Kingdom was the imposition of additional duties on imports from foreign countries, in order to create a margin of preference for the products of the dominions. -In regard to wool and wheat, we .could not expect any substantial benefit. For the disposal of the wool clip, wo depend on the international market. In regard to wheat, Australia now occupies a most favoured position in the British market, but whilst taking every advantage of that, we must look prin- cipally to the markets of the East for’ the enlargement of our sales. That applies also to wool. The imports of frozen meat into the United Kingdom are. to be. progressively curtailed until the restriction reaches 35 per cent, in the second quarter of 1934, and the imports of chilled beef are to be limited to the 1932 quantity, which was the lowest for many years. Side by side with these restrictions an effort will be made by the United Kingdom to raise the price of bacon. It is understood that the collapse of bacon prices was one of the principal causes of the general depression of the English meat market. The extent to which these concessions will benefit Australian producers is difficult to estimate, but Mr. Angliss, who is a leading exporter of meat, and was one of the consultants to the Australian delegation at Ottawa, declared that the concessions gained in regard to meat would mean an increase of at least 2s. 6d. per head in the value of every sheep and lamb in Australia in a good season. He stipulated a good season, because in a year of scarcity we may not be able to export. He continued -
The new meat agreement is going to be n great thing both for Australia and New Zealand. When the restrictions by Britain ou the import of South American meat are in full force they will mean that slightly more than 2,000,000 carcases of sheep and lambs fewer can be shipped from South America to the United Kingdom than at the present time.
That prediction, in conjunction with the opinions of others who are able to speak authoritatively, indicates that our primary producers may expect great advantages from this agreement’. Its main purpose in regard to meat is to raise price levels. The wisdom “ of this procedure has been questioned be* cause of the risk of increasing costs. There might be something in that objection if the endeavour to raise price levels were divorced from the general world aims, but it is not, and I therefore do not expect any evil effects to result from it. If higher price levels can be brought about they will benefit the producer, not only directly by ensuring higher returns for his labour, but also indirectly by enhancing the value of land securities and thereby making possible an extension of credits. In that way the advantages of this agreement will create benefits throughout the community. The concessions granted represent, in respect of butter, nearly the whole cost of marketing, in respect of dried fruits, the whole cost, and in respect of canned fruits, two- thirds of the cost. The value of these preferences cannot be over-estimated. Any primary producer would be grateful for an offer to be relieved- of two-thirds of his marketing costs. If he could even get free transport, that would be of immense advantage. Therefore, I maintain that these ‘concessions, in addition to the preferences granted in respect of wine, eggs, apples, base metals, &c, will immensely improve the economic position of Australia. There is no doubt that the preferences granted by Australia to the United Kingdom and Canada have been substantially helpful to them. It is no exaggeration to say that the preferences to the United Kingdom have been worth millions of pounds annually to the British people, and I believe that the advantages granted by the Old Country to us will prove to be extremely valuable.
The agreements made with the colonies are most important and should not be forgotten. At last we are realizing the enormous potential markets in the British colonies. The fact that there are 55 of these possessions should remind us not only of the. greatness of the British Empire, but also of the immense opportunities that await us in. the colonies for the expansion of our export trade.
The main feature of Australia’s reciprocal concessions to the United Kingdom is, first, a formula which extends the preference to British commodities, and secondly, a guarantee of reasonable chances for British manufacturers to compete in our market. Objection has been, taken that this formula will increase costs in. Australia. Its main purpose is to divert Australian purchases to British goods, and, if that should happen, I cannot see that any increase of Australian production costs should result. By purchasing British goods we shall stimulate trade activity and employment in the United Kingdom. We have to remember that every one of the 2,000,000 unemployed in Great Britain to-day is not only a potential defender of Australia, but also a potential consumer; therefore, anything we can do to provide work for them and restore their purchasing power will react to the benefit of our own people. There are also exceptions to the formula, and in explanation of them the Minister for Trade and Customs (Mr. Gullett) said -
Turning to the exceptions in favour of Australia these were made on obvious grounds which, on the whole, were appreciated by the British delegation. If the application of the formula would have increased foreign rates of duty, we did not apply it in cases where already Britain enjoyed practically the whole of the Australian trade, or again in cases where Britain was not in a position to make a reasonable bid for the Australian market.
In devising the formula, our delegates also bore in mind the need for building up agreements in the interests of foreign trade. The Minister for Trade and Customs continued -
The Australian tariff still presents opportunities for mutually beneficial treaties with foreign countries, and the Government will gladly enter into negotiations to that end.
Taking these statements into consideration the contention that there will be a great increase of costs to the Australian consumer as the result of the application of the formula cannot be substantiated. The provision in the agreement for the opening up of negotiations with foreign countries will, I hope, not remain unexplored.
It is round articles 9 to 12 .that, much of the controversy has raged. Article 9 ‘ provides that only those industries which are reasonably assured of sound opportunities for success shall be afforded protection by tariffs. I interpret that article to mean that we should try to establish in this country, only industries which are capable, at no distant date, of producing goods by mass production at- prices which will not lead to an increase of costs in Australia, and for which our manufacturers will use the raw materials that are here in abundance. If that interpretation is correct, then article 9 is closely connected with article 10, which provides that full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production, should be given to the
Old Country. It is the duty of every Australian government to prevent, so far as possible, the consumers of this country from being exploited by manufacturers either at home or abroad. There have been many instances in which the establishment of local industries has definitely brought about the reduction of costs by preventing the operation of big rings or combines outside Australia, but the Tariff Board has repeatedly drawn attention to the fact that when the tariff level has been at an extreme height, exploitation has taken place by local manufacturers, to the detriment of Australian consumers. Article 10, which seeks to encourage reasonable competition, will have the effect of neutralizing those two effects, and it aims at building up efficient industries which will avoid the evils of over-capitalization and duplication. Articles 9 and 10 are important because they provide a basis for a successful policy of protection in the future. Article 12 provides that no new protective duty shall be imposed, and no existing duty shall be increased on United Kingdom goods to an amount in excess of the recommendation of the Tariff Board. That leads me to ask this question. Which is the most competent body to deal with tariff items - the Parliament, or the Tariff Board? How does the Tariff Board function ? We know that the board is composed of efficient mcn, whose duty it is to travel from place to place, investigating industries, and hearing from both parties to, industry the evidence on which they form their conclusions. I should say that in the majority of instances, the board arrives at sound and logical conclusions. It is not possible for this Parliament to consider the effect of duties on the same lines as the Tariff Board does. It would be impossible, too, for a Minister satisfactorily to perform the functions of the board, because he has his ministerial and public duties, and his duty to his constituents, with which he is fully occupied. The Tariff Board is more, competent to give a decision on tariff matters than is any Minister acting arbitrarily. Another reason why I am inclined to support article 12 is that it places a limit on tariff making. We have to consider the attitude of this House on tariff matters, and the opinion that I am now expressing has been gained as the result of close observance of the work of this Parliament during the time that I have been here. It is quite apparent that the fear of political consequences dominates a great many of the members of this House in regard to tariff legislation. Some honorable members who continually advocate lower tariffs generally, take an entirely different attitude when they are faced with the actual items, particularly when they fear that by advocating a lower tariff on those items they will lower their party prestige, or prejudice their chances at the next elections. When votes are in the air, there is often too great a desire to keep in front of the popular breeze. On such occasions principle and policy are left in the background. If tariff making is to proceed along those lines, I say, God help Australia. The Tariff Board is better qualified than this Parliament to place a limit., on tariffs, and as article 12 permits Parliament to delegate that power to the Tariff Board I am prepared to support it.
There is one function which is almost beyond the powers of the Tariff Board and that is to give effect to part of section 15 of the Tariff Board Act, in which instructions are given to the board to take into consideration the general effect of -the customs and excise tariffs in relation to primary and secondary industries. The Tariff Board deals with merely the granting of protection to individual industries, and has little opportunity to observe the general effect of all duties imposed. There is, and has been, an absence of any definite long-range view in the Australian protection policy as to the effect that the aggregate of all the tariffs will have on the economic life of the nation. That was the main point enunciated by the economists who investigated our tariff in 1927 or 1928. They pointed out that the general effect of our tariff policy was to place on the exporting industries a burden of cost up to 9 per cent. To-day that burden is in the region of from 12 per cent, to 15 per cent. It appears to me that the Tariff Board requires reconstructing in some way or other to enable it to take a long-range view, and to expedite tariff revision.
Better still, perhaps, “would be the creation of an economic advisory board which would be delving all the time into long-range matters of government policy, and with which the Tariff Board would consult. In that way we should provide a much better protective system for this country.
My last point is what world re-action will come about as the result of the Ottawa agreement? There are two alternatives - one retaliation against the Empire, and the other the beginning of trade negotiations with the Empire which will lead to freer trade. Regarding the first alternative, we have to ask ourselves whether the rest of the world can do Avithout British service and goods. The answer to that, I think, is in the negative. A little over 100 years ago, France adopted a policy of retaliation against Great Britain, and came off second best. Ireland is adopting a similar policy to-day and seems to be doing itself more harm than good. Without British services and goods, the other nations, in order to carry on their national life and industries, would have to obtain similar services and goods elsewhere. Most of them have erected tariff barriers against each other, and in order to carry on their industries successfully there would need to be some measure of international co-operation. This I do not think- to be possible. The diversity of interests, politics, and antagonisms extend ing over centuries Will not permit of any real and tangible co-operation between the other nations of the world. It has taken the British group of nations years to come together and to evolve a trade agreement, and that has been made possible largely because of the pressure of adversity. How long would it take nations not bound by common ties to come together? Therefore, we must conclude that reaction against the Empire is not likely to take place, and that negotiations must follow. We already have an example of that. The meat interests of South America are now endeavouring to fall into line Avith the British Empire in respect of raising price levels. Since Ottawa Ave have read of foreign nations sending representatives to Great Britain in an endeavour to open up negotiations for mutual trade treaties. Again, follow- ing Ottawa. a conference of 180 economists and business men in the United States of America definitely urged a scaling down of tariffs. In that country, the democratic party which is pledged to a policy of lower tariffs has now been placed in office, and a move in the direction of reduced tariffs can be expected. Therefore, the conclusion which I have come to is that the Ottawa agreement will lead to a scaling down, in some shape or form, of world tariffs, and a beginning, possibly, of the end of the mad policy of protection that has been adopted by nations since the Avar. If the Ottawa Conference results in a return to sane tariff making, and brings to a head the whole subject of tariffs, it will be an achievement of the first magnitude, not only to the British Com.monwealth of Nations, but to the whole world, for it. may well lead the way to world recovery. I shall support thi3 bill to the utmost. I believe that Ave may expect material advantages from the agreement. I regard it, not only as something from. which Ave can expect material advantages, but also as the consummation of a great ideal : as a foundation upon which this and future parliaments and generations may build the basis of a greater and yet more glorious Empire, which in the future as in the past Wl provide a safeguard, not only for the British people, but for civilization and all that is free and just and noble and great.
.- I congratulate the honorable member for Wakefield (Mr. Hawker) on the excellent speech he delivered this afternoon. It Avas interesting and exceedingly informative from beginning to end. I regret that this honorable gentleman, who has the subjectmatter of the Ottawa Conference at his finger ends, is unable, owing to events which have occurred in the last few weeks temporarily to take the place of the Minister for Trade and Customs in piloting this bill through the House, and I say this without any disrespect to the Minister whose duty it is to do so. I greatly regret the illness of the Minister for Trade and Customs (Mr. Gullett) and hope that before long he may be back in has place among us. With other honorable members I appreciate the literary quality of the- report of the delegation which the honorable gentleman presented to us in the speech which he read a few weeks ago.
In an otherwise capital speech, the honorable member for Indi (Mr. Hutchinson) made several inaccurate references to the policy of the Country party which I feel bound to correct. The Country party wholeheartedly supports the bill for the validation of the Ottawa agreement. Its difference with the Government is in respect to the method that has been adopted to implement the agreement as disclosed in the customs schedules now awaiting consideration. Our disappointment with these schedules must surely be shared by the honorable member for Indi. The honorable gentleman made some reference to the attitude of the Country party towards the tobacco industry. I point out that we supported the Tariff Board’s recommendation for a reduction of the- duty to 3s. Our request to the Government was that there should be a temporary discrimination in the excise duty.
In expressing my wholehearted approval of this bill to validate the Ottawa agreement, I am also stating the view of the Country party. “We gladly support such sane fiscal principles as those enunciated in articles 9, 10, and 12 of this agreement and regard them as worthy of our strongest support. We believe that they will lead to an increase in intraempire two-way trade, and incidentally to the lifting, to some extent, of the tremendous burden imposed on industries by the present customs duties.
The honorable member for Darling Downs (Sir Littleton Groom) and the honorable member for Maribyrnong (Mr. Penton), in the course of their speeches yesterday afternoon, were somewhat reminiscent. I well remember, as a young man, just beginning to take an interest in politics, the time when Mr. Chamberlain first brought forward his proposals for what was then called colonial preference. Tremendous interest was shown in the subject throughout Great Britain ; but Great Britain was not then ripe for such a change in her fiscal policy as was proposed. It may interest honorable members to hear a short quotation from a book on Empire Economic Unity, by the late Lord Melchett, head of Imperial Chemical Industries, who took a prominent part in the movement for the development of this ideal. Lord Melchett referred to the work of Mr. Joseph Chamberlain in the following terms: -
Chamberlain’s appeal on the imperial side always had a great attraction for the younger men among us, of whatever party, and 1 remember myself being captivated with the idea. Unfortunately, all too soon it became confused with the discussion of the purely domestic problem of general protection, for which at that time some of us could not see the real justification from the point of view of British trade and industry during those years. . . .’ One might say that, as with the visions of all prophets, the period of expression of the idea anticipated very considerably the economic conditions under which its advocacy could be proved most fruitful. But since that time there have been such great changes both in the economic position of the world and of this country; the Great War itself has produced such radical dislocations in territories, markets, and financial conditions, that one is entitled to review the situation entirely afresh.
Undoubtedly in the last two years Great Britain has evidenced a very changed outlook on this subject. Only a few years ago, in 1923 to be exact, interest in this subject was revived in Great Britain through the splendid advocacy of it by the then Prime Minister of Australia (Mr. Bruce). The British Conservative party undertook at that time to grant certain concessions to Australia, but its defeat at the polls shortly afterwards indicated clearly that even then Great Britain was not ready for the change which has since occurred. Only two and a half years ago the right honorable member for Cowper (Dr. Earle Page) and I took advantage of private members’ day in this House to direct attention to the subject of intra-empire trade and the necessity for bringing about a greater measure of Imperial economic unity. But the then Acting Minister for Trade and Customs, the present Deputy Leader of the Opposition (Mr. Forde) and the then Minister for Commerce ,(Mr. Parker Moloney) were not sufficiently interested to remain in the chamber to listen to the speeches we delivered. I did not expect that compliment to be.. paid to either my, leader or myself on personal grounds, but I thought that the subject was important enough to cause the honorable gentlemen controlling the two departments to which T have referred to listen to the debate.
Apparently they did not regard this question of increasing trade within the Empire by reciprocal preferences as coming within the range of practical politics. But their uninterested passivity, if I may use that term, was not so surprising as the active opposition to the policy which was shown at that time by” the present Minister for Trade and Customs (Mr. Gullett). But marvellous changes can occur in public opinion within the short space of two years. Although the Minister for Trade and Customs did sterling work- in the interests of Empire reciprocity at Ottawa, some of us remember that, within the last two years, he contributed strongly worded articles to the press in opposition to it. Asserting, among other things, that the policy was thoroughly impracticable, ho threw a wet blanket over it. But his opinion, and the opinions of others, have changed almost incredibly since that time. The British Government, for instance, has, within this period, placed on the Imperial statute-book for the first time a measure granting preferences on a fairly large scale to dominion products. The steps taken recently at Ottawa have greatly increased the range of those preferences.
As another illustration of the extraordinary change that can take place in opinions within two short years, I direct attention to the records of the present Attorney-General (Mr. Latham), the present Minister for Trade and Customs, and the present Postmaster-General (Mr. Parkhill) in this House. These honorable gentlemen went even further than I did - and I went as far as I reasonably could go - in condemning the Scullin Government for elevating our tariff to such appalling heights. Yet, these honorable gentlemen have since then, as members of the Government, approved of the submission to Parliament of a tariff schedule which contains not only most of the items of the Scullin schedule, but some 300 increases above the former high level. Within the last two years those honorable gentlemen who asserted that the height to which duties had been taken by the Soullin Government was most iniquitous, have acquiesced in the tabling of a schedule which makes still further increases.
It is regrettable that our representatives at Ottawa were, to some extent, hamstrung by the far-reaching promise given to manufacturers that the Government would not reduce any of the Scullin duties without first obtaining a report from the Tariff Board. This unfortunate provision was made despite the fact that in most cases the duties had been increased without reference to the board. Undoubtedly that pledge prevented our representatives at Ottawa from going as far as they could otherwise have gone, and from agreeing to specific reductions in certain tariff items in favour of Great Britain. I realize that it is unfair to the Government for critics to keep referring to the fact that increases have been made in more than 400 items in the tariff schedule and decreases in only 21 items, in view of the fact that the schedule introduced by the Government two or three months ago provided for certain reductions in the duties imposed by the Scullin Government. In order to be fair to the Government it is necessary for us to read the memorandum showing the amendments in contrast with the Scullin tariff schedule. I wish to be, scrupulously fair to the Government in this matter and, therefore, in stating the number of increases that have been made in tariff duties, I make it clear that I do not regard as increases any variations in the column of foreign duties if the items are free in the British column. For instance, if an item appeared formerly in the British, intermediate and general columns as free, and now appears as British free, and general 15 per cent., I have not regarded it as an increase, although, technically, it might be: so regarded. Obviously the Government could not go below the ground floor. But even with this qualification, I find, in a comparison of the present duties with those in operation when the Scullin Government went out of office, that increases have been made in 321 and decreases in only 118 items. Actually, therefore, we are in a worse position to-day as regards the burden of high duties than when the Scullin Government laid down the reins of office. But despite the appallingly bad start that the Government has made, I still hope that as effect is given to articles 9, 10, 11, and 12 of the Ottawa agreement, there will be a lowering of the barriers we have raised against both intraEmpire and international trade, barriers which have wrought havoc in the world’s commerce, and have been largely responsible for the devastating unemployment that is manifest throughout the world to-day - unemployment on a scale never before experienced.
One of the big obstacles which, in the past, has faced Great Britain in the granting of imperial preferences has been her not unnatural unwillingness to impose duties on foodstuffs. Until this last twelve months, practically the only items which we exported to Great Britain, on which we had a monetary preference, were wine, dried fruits and sugar. That preference was largely due to the splendid case put forward on our behalf in 1923 by the then Prime Minister, the right honorable member for Flinders (Mr. Bruce). Those three items have now grown to 40. In the speech of the Leader of the Opposition, which I was not privileged to hear, but which I have read carefully, the right honorable gentleman contrasted those 40 items on which we receive preference under the treaty with some 428 itemson which we are to give preference to Great Britain. He seemed to think that the numerical superiority of the 428 entirely outweighed the advantage of the 40. I am rather surprised that a gentleman of the debating capacity of the right honorable gentleman did not realize that for the purposes of his argument, the number of items alone is not much of ;a guide when comparing the relative” advantages enjoyed by Great Britain and Australia. The argument advanced by the right honorable gentleman might, be accepted at Richmond, but it will not carry much weight in this Parliament. Let me take only one of those 40 items, butter, of which 84,000 tons were sent from Australia to Great Britain last year. I make bold to say that the imports of many of those 428 items do not represent as many ounces. We have also to remember that, with a few exceptions, those 40 items go into British ports free, which places us in that respect on an equal footing with British producers. On the contrary, comparatively few of the 428 items on which we give Britain preference come into Australia duty free. In too many cases in which we do grant preference and impose a duty, that duty is so high that trade is rendered practically impossible, so that the preference is more imaginary than real. To use an expression employed by a critic in Huddersfield. “ It is useless to lower a 1-i t. wall to 6 feet to enable a 5-ft. man to see over it.” In our schedule we have not gone even so far as that. We have raised the foreigners’ wall from 8 feet to 9 feet in order that the 7-ft. wall against the Britisher shall appear to be low enough for the 5-ft. man to look over it.
I need hardly say that, while I am wholeheartedly in favour of the bill to validate the agreement, I regard the schedule in an entirely different light. I am as much opposed to the Government’s methods of implementing the treaty as I am in favour of the treaty itself. When we reach the debate on the schedule I intend to move an amendment dealing with the general principle which I believe should have been adopted in that schedule.
I shall devote the remainder of my time to the more congenial task of saying some nice things about the treaty itself. The 40 items upon which the agreement provides preference to Australia include butter, cheese, condensed milk, dried milk and eggs. Those things are of great interest to persons engaged in dairying. Honey and fruit are also included, the latter embracing practically every variety, canned, dried and fresh, including apples, pears and citrus fruits. It is only too true that the price of butter has not yet responded in any way to the influence of this preference. That could not be expected in view of the avalanche of butter supplies to which British consumers have been subjected for some time. Only a few years ago the British market absorbed some 300,000 tons of imported butter. Last year 400,000 tons of butter went to Great Britain, half of which came from within the Empire, New Zealand supplying the largest proportion, with Australia running a good second, and the Irish Free State filling third place. Obviously, that tremendous increase in supplies has influenced prices. There is one thing about it which is particularly gratifying to Australia. I do not know whether it is general, but in Victoria, the producing capacity has increased in a striking fashion in the past few years owing to herd testing, top dressing of pastures, and the employment of. other up-to-date methods. Only the other night, when I happened to be present at the annual gathering of the Herd Testing Association at Traralgon, in my constituency, where there are 76 herds under test, the owners of no fewer than 50 of those herds were presented with certificates from the Royal Agricultural Society for having averages of over 300 lb. of butter fat per cow ! That is double the Australian average. In the last five years our exports of butter have been in round figures, 44,000 tons, 46,000 tons, 48,000 tons, 74,000 tons, and 91,000 tons. New Zealand is going ahead almost as rapidly as we are. Is it any wonder that this output, combined with the depression in Great Britain, has resulted in falling prices? Nevertheless, I agree with other honorable members that the duty of 15s. a cwt., which has been imposed on Danish, Siberian, and other foreign butters, must necessarily be of advantage to us. The cost of transporting and selling our butter is approximately 16s. 2d. a cwt., so that the freedom from the imposition of that 15s. practically covers those costs. Again, apples and pears receive a preference of 4s. 6d. a cwt., which is equal to ls. 3d. a case of apples. The preferences on canned fruits and eggs must undoubtedly become very valuable. Schedule D includes such items as leather, tallow, canned meat, barley, and so forth, which receive a preference of 10 per cent. That, too, must be of considerable advantage to Australia.
Some reference has been made to the preference of 2s. a quarter on wheat. I do not think that the Minister for Commerce (Mr. Stewart) quite understood the purport of the cable which was read yesterday by the honorable member for Wimmera (Mr. McClelland). There appeared to be a difficulty, that in its validating bill, Great Britain intended to preclude from the enjoyment of free entry any wheat not consigned exclusively to Great Britain. As honorable members know, cargoes frequently leave Australia without any specific destination. During transit, cables are forwarded instructing that the wheat shall be delivered in Italy, Prance, or some other country. It was thought that difficulty would arise owing to the terms of the British legislation, and the suggestion was that this Government should get in touch with the British Government in the matter. However, I understand that the difficulty has now been overcome in Great Britain.
This measure does not provide any restriction on chilled meat going to Britain from the Argentine. The restriction was confined to frozen meat, consisting of beef, mutton and lamb, commodities which come more, particularly into competition with our own products. The restriction upon Argentine frozen meat is to grow progressively month by month until it reaches, a 35 per cent, reduction of present supplies. I read in yesterday morning’s press that a voluntary agreement had been reached between Great Britain and big Argentine exporters to limit the export of chilled beef also. That must improve our position. I hope that the absence of provision in this agreement of a definite restriction against chilled meat from the Argentine will not lead the exporters of that country to swing over from frozen to chilled mutton.
Schedule E is very interesting, and about it very little has been said. It enumerates the preferences that are to be given to us by non-self-governing colonies and protectorates. That should be very helpful to our trade. Broadly speaking, Great Britain has given us as much as we could reasonably expect in all the circumstances, particularly when we remember that our quid pro quo is mainly a kind of promissory note contingent upon the carrying out of the pro- visions of articles 9, 10, 11 and 12.
That brings me to what we propose to give to Great Britain. A good deal has’ been said about these articles, and I shall touch briefly upon the more important. Under article 8, we undertake to give Great Britain 15 per cent., 17^ per cent., and 20 per cent, preference ad valorem respectively, dependent upon the height of the duty. Article 9 refers to our giving tariff protection only to those industries which are reasonably assured of sound opportunities for success. That is advisable. But “we have to admit that it is’ somewhat humiliating to have to admit in black and white that in the past we have been guilty of protecting obviously unsound industries. Undoubtedly, that was the policy of the Scullin Government. I hope that it will not prove to be that of this Government. Article 10 provides that our protective duties shall not exceed a level that will give United Kingdom producers full opportunity of reasonable competition. In passing, if the Tariff .Board recom.mends duties to give effect to article 10, and those duties are based on the assumption that primage and exchange do not exist so far as the Tariff Board is concerned, then I can only say that articles 9 -,and 10 must remain a dead letter, unless the Government does something to take into consideration the protective incidence of those two factors. I was delighted with the reply given by the Prime Minister yesterday afternoon, when he said he would submit this matter to the Tariff Board.
I regard article .11 as one of the most important in the agreement. It states -
His Majesty’s Government in the Commonwealth of Australia undertake that a review shall be made as soon as practicable by the Australian Tariff Board of existing protective duties in accordance with the principles laid down in article 1.0 hereof, and that after the receipt of the report and recommendation of the Tariff Board, the ‘Commonwealth Parliament shall be invited to vary, wherever necessary, the tariff on goods of United Kingdom origin in such manner as to give effect to such principles.
It may surprise some honorable members when I say that the best way to avoid delay in giving effect to the recommendations of the Tariff Board for the reduction of duties would be for Parliament to refrain from validating the tariff schedule which accompanies this bill. Duties can be raised merely by tabling a tariff schedule; but they cannot be reduced below the level approved and ratified by Parliament without the consent of both houses of the Parliament’. Therefore, I suggest that the department should continue to collect duties under the authority of the resolution which has just been tabled, and that the schedule should not be validated until such time as the Tariff Board has had the opportunity of considering the various items, and submitting its recommendations.
No item of the Scullin tariff has yet been permanently validated; nothing later than the Pratten tariff has been validated. It is true that when the Scullin Government went to the country on the occasion of the last election, a temporary validating act was passed on the 26th November to enable the department to continue collecting duties, but that measure was operative for only three months. It expired on the 26th February of the following year, and, in order to enable the department to continue collecting, the Lyons Government tabled a tariff schedule which embraced the previous Scullin schedule. Therefore, we are to-day collecting duties under the Scullin tariff by virtue of a resolution tabled by the present Government, which has not been validated. So long as we refrain from validating the schedule the Government may give immediate effect to any recommendations of the Tariff Board for the reduction of duties, merely by introducing an amending tariff schedule. “When this agreement is ratified, the Government will be bound by the terms of article 12 to make whatever reductions in tariff may be recommended by the Tariff Board, because we shall have undertaken not to charge against British goods, duties in excess of the board’s recommendation. That being so, it becomes a question whether we shall give effect as quickly as possible to the recommendations of the board, or shall proceed by methods involving the maximum delay. The Government has here an opportunity of proving the bona fides - which I do not doubt - of its expressed desire to implement the treaty.
I know that a certain amount of criticism has, in the past, been directed against governments for delaying the validation of tariff schedules. The BrucePage Government was blamed for allowing too long a period to elapse, and, under the Scullin Government, duties were imposed in November, 1929, which have not yet been permanently ratified, and were only temporarily ratified two years after their imposition. I have no wish to argue in favour of the continuation of that bad practice.’ The Government, however, has given us reason to regard the present tariff schedule as temporary in its nature, to be altered as soon as the Tariff Board has had time to investigate the various items, and submit its recommendations. We do not wish to burke discussion of the tariff; we welcome it, hut for the reason I have given, we do not think that the schedule ought to be validated until reductions have been made.
Article 12 of the agreement has been a- storm centre of discussion. For my part I regard it as the best thing in the agreement. The Leader of the Opposition said that article 12 made the Australian Government subservient to the Tariff Board, and that statement has been repeated by other honorable members. We might just as well say that article 4 makes the British Government subservient to the Australian Government. The honorable member for Corio (Mr. Casey) made a point with which I agree when he said that the British Government went a great deal further in article 4 than the Australian Government did in article 12. We have reserved to ourselves the right to act independently of Great Britain, subject only to the recommendation of a tariff board of our own creation. Great Britain has undertaken to act only with the consent, not of a body of its own creation, but of the Australian Government. She has agreed not to reduce without our consent the duties which give us preference over foreign countries. I wonder what the Leader of the Opposition would have said, if, instead of merely limiting ourselves by the recommendations of the Tariff Board, we had agreed not to increase duties against Great Britain without the consent of the British Government. Apart from this, however, I cannot understand the objections which have been raised to article 12. In some respects the Tariff Board may be compared with the Commonwealth Bank Board. We have laid it down that the Bank Board is to be free from political control, and we have given it power to manage our note issue and currency. The intelligent members, at least, of this Parliament say that they abhor the idea of political control of banking. We have also appointed a Tariff Board which, although it has at its head a member of the Customs Department, we desire to be as free as possible from political control. Its duty is to advise Parliament on tariff matters. Like the Bank Board, it has access to special information. The Bank Board is in touch with the board of the Bank of England and receives from various sources advice on matters relating to exchange and currency. The Tariff Board is not subject to pressure from the constituency, such as is applied to members of Parliament, and it would be just as improper for Parliament to raise duties above the level recommended by the Tariff Board as it would be to raise the exchange rate against the advice of the Commonwealth Bank Board. If Parliament raises duties above the limit recommended by the board, it must be making a mere guess. I regard the tariff as a somewhat dangerous stimulating tonic which might do good if applied with wise discrimination and reasonable restraint. If, however, I were asked, in the absence of a doctor, to give to a patient a dose of dangerous tonic, I should say that an under-dose would be infinitely safer than an over-dose. Parliament would be wise, therefore, to limit the duties, to those recommended by the Tariff Board.
I trust that the Government will try to carry out in their entirety, and with promptitude,*-the letter and the spirit of the Ottawa provisions. We must show our sincerity by giving effect to our undertakings without further delay. There need have been no delay had it not been for the shackles of the Government’s own forging with which it bound itself, an illogical promise to the manufacturers by a government which pins its faith to the recommendations of the Tariff Board to retain duties imposed without a prior report from that board. If the Government believes that it has bound itself - and the schedule is capable of no other explanation - I hope that it will not validate these duties, but will speed up inquiries by the Tariff Board to enable the barriers to be reduced, and that no petty advantage will be taken of primage and exchange to nullify reductions,, In short,
I hope that we shall stand squarely for the scrupulous carrying out of the agreement in a manner worthy of a member of the British Commonwealth of Nations.
– I wish to pay my tribute to the delegation that represented Australia at Ottawa, and also to the honorable member for Wakefield (Mr. Hawker) who ably assisted in compiling data for the use of our representatives in the important negotiations overseas. Australia is indebted also to the unofficial delegation, the body of experts who accompanied the political delegates, and fortified them, I have no doubt, with much useful information and expert advice. The first question I asked on being elected to this House was whether the Government intended to appoint a delegation of business men to accompany the official party to Ottawa. I felt that our representatives would be seriously handicapped if they ( attempted to negotiate trade treaties with our partners in the British Commonwealth of Nations without full and continuous consultation with the commercial and other interests likely to be directly affected.
Many opinions have been expressed regarding the results of the conference, and no two are alike. Each honorable member seems to have viewed the concessions and agreements through different glasses. The Leader of the official Opposition has declared that the Australian delegation was out-generalled. Yet, Sir Charles Hobhouse, in an article published in The Contemporary Review for October last, declared -
The more one studies these agreements the more one becomes convinced that not only has Great Britain been out-generalled by the dominions, but she has deprived herself of some of her weapons and her armour in her coming contests with foreign governments.
Whilst critics in this Parliament declare that the Australian delegation has been out-generalled by the statesmen of the United Kingdom, so eminent a critic as Sir Charles Hobhouse holds the opposite view. This divergence is noticeable in the opinions expressed by parliamentarians in all the countries concerned in the Ottawa agreements. These critics seem to suffer from Ottawa blindness; their illusions are similar to those of per sons afflicted with colour-blindness. They are unable to view the doings at Ottawa clearly and in proper perspective. The task which confronted the delegates was both important and difficult. They had to have regard to the prejudices existing in the United Kingdom as the result of over 50 years of freetrade, and to reconcile them with the fiscal views of overseas members of the family which had recently acquired dominion status and were jealous of their new rights, and powers. The evolution of a formula which would be mutually satisfactory to all parts of the Empire, was a difficult task. The established rights of our manufacturers and workers had to be maintained, and harmonious trading relations with foreign countries preserved. If possible, the conditions of the primary producers had to be improved by assuring to them increased prices for their commodities and lower costs of the instruments of production. The restrictions of trade, the depression, the economic reactions, and the burdens placed on the people through the erection of excessive tariff barriers since the war had to be taken into account.
The economic conference at Ottawa had its genesis nearly a quarter of a century ago. The preferences which. Australia had given to the United Kingdom prior to the late war were possibly an attempt to express our recognition of the debt we owed to her. She had given us a continent, and supplied us in the infancy of our nation with the wherewithal to lay the foundations of our own destiny. She had protected us and cared for us as a mother protects and cares for her children, and we felt that we should show ourselves not lacking in appreciation of what had been done on our behalf. When, a quarter of a century ago, the overseas dominions sought reciprocal, trade concessions from the United Kingdom, they were refused. The United Kingdom, then at the peak of its commercial prosperity, would not risk the possible loss of valuable foreign markets in order to foster industrial development in a young colony or dominion. Concessions to the dominions meant the scrapping or weakening of the freetrade policy that had been in operation in Great Britain for over 50 years.
But Australia was not lacking in statesmen of wide vision, and Alfred Deakin, particularly, recognized the necessity for reciprocal trade agreements for the building up of the Empire. He saw that stability and progress could be secured only by the co-operation of the units of the Empire. That great Imperialist, Joseph Chamberlain, also appreciated the fact that the dominions were an integral part of the Empire and must be fostered. Replying in 1907 to Mr. Bonar Law, who was explaining the opposition of the British working men to reciprocal trade agreements with the dominions, Mr. Chamberlain said -
I have taken this step because I believe it is the step to secure the real union of the British Empire.
I have no doubt that that sentiment also animated the delegates at Ottawa. The fiscal policy adopted by Australia at that time had a threefold objective. Revenue duties were imposed solely for the benefit of the Treasury; the protective duties were designed to foster infant industries. That was a necessary and healthy policy. Our population was made up largely of migrants, principally from the United Kingdom, including many artisans who had been engaged in the secondary industries overseas. They either sought employment at their callings in Australia, or were desirous of establishing small factories of their own. The Deakin Government, believing that Australia should not continue indefinitely to be a mere exporter of primary products, laid the foundations of a protective policy designed to encourage the establishment of secondary industries.
The preferential duties in favour of Great Britain had not merely a sentimental basis. Australia at that period wa£ being flooded with the trumpery products of foreign countries. German imports wei-e particularly prominent, and a comparison of them with the British articles impressed men of wide vision with the need for a policy which, while fostering empire trade, would ensure the supply of superior goods to our market. Moreover, the advances of modern science called for improved economic organization. Considerable unemployment must have resulted if the Australian Parliament had not been able to evolve a means of increasing production and extending markets. The action of the Deakin Government in granting preferences to the British exporters reveals a breadth of vision, the benefits of which we are now about to enjoy. Mr. Deakin realized that only a long-range policy would be effective. It was not sufficient merely to build high tariff walls to foster secondary industries; there must be a complementary natural growth of trade within the Empire, for with the passage of time the Mother Country would rely increasingly upon her children overseas for the supply of foodstuffs and the raw materials of industry. He realized that every country when it reached its trade peak must seek new markets. He, therefore, laid the foundation of Empire trade. When the Great War broke out, the dominions rushed to the aid of Great Britain. That fact was used as a vital argument by the imperialists of the United Kingdom, who were endeavouring to foster preferential trade among the various parts of the Empire. They argued that the conditions of the war were comparable with the existing conditions of trade. They pointed out the necessity for Empire union, and that that ideal had been consummated to some extent when Australia supported Great Britain during the European war. In 1919, Great Britain gave some consideration to reciprocal preference, but what was achieved at that time was only a shadow of the objective of the other units of the Empire. The small preference then given by the Motherland was mainly on luxuries, and, therefore, of little advantage to the dominions. Great Britain, faced with a big unemployment problem, set out to take lull advantage of what preferences the dominions had given to it, with a view to regaining the markets which it had lost to Japan and the United States pf America. That position, obviously, could not continue. In 1923, the right honorable member for Flinders (Mr. Bruce) pointed out that foodstuffs and agricultural materials were what the dominions produced, and that it was of no use to pass pious resolutions and to talk preference to the dominions, ever dodging , the great issue. He said that the issue was there, and that it was not the slightest use trying to avoid it. He spoke on behalf of Australia in no uncertain way. He pointed out that we could offer to Great Britain only foodstuffs and agriculturalmachinery, and that that country must be prepared to tax its people in respect of those commodities, must scrap its freetrade policy and enter into trade agreements with .the other parts of the Empire. Great Britain refused to do so. Mr. Chamberlain said that what the working man of that country wanted was employment, and that all that the worker could see in the proposal- for reciprocity was the taxing of his foodstuffs. The depression set in, and Great Britain lost many of its markets. It at last realized that it must depend more .upon the commerce and trade of the dominions. As a matter of fact, the existence of the Mother Country depends upon commerce and trade, as 60 per cent, of its products are exported to foreign countries. In 1926 there was a further imperial conference, but it did not deal with Empire reciprocity or Empire trade. In 1930 another conference took place, at which the representatives of Great Britain stated that the interests of that’ country precluded the adoption of any economic policy that would injure its foreign markets and impose a burden upon its people. That was a short-sighted view, because at that time the United Kingdom was faced with the problem of preventing foreign countries from establishing a footing in the markets of the dominions. Great Britain’s wonderful marine service had enabled it to establish its trade with other nations, but the time arrived when it was definitely challenged by other nations. It made every effort to hold the markets of the dominions, and for the protection of its own industries it convened the Ottawa Conference with the idea of fostering Empire trade.
The honorable member for Indi (Mr. Hutchinson) asked whether the United Kingdom had reached it trade peak. I submit that it had, otherwise it would never have conceded to the dominions the concessions set out in the Ottawa agreement. There are two aspects of that agreement that we have to consider. The first relates to Australian imports and the measure of assistance that we can give to Great Britain, and the
Sitting suspended from 6.15 to 8 p.m.
– On the other hand, Australia was not content to produce raw materials only, and had a definite protectionist policy. Here, then, was a definite conflict of opinion that made for furious thinking. The United Kingdom rightly contended that it was necessary for her to protect her primary industries; while Australia took the stand that she must protect her developing secondary industries. It was obvious, therefore, that a common formula was necessary to reconcile these conflicting interests. All the dominions were represented at Ottawa, and, with their new status and new ideas of selfdevelopment, it was natural that they should in some degree run contrary to the United Kingdom, which had 50 years of freetrade behind her. The dominions naturally desired to become as selfcontained as possible on account of their long distance from Great Britain. Bearing in mind their ultimate destiny, they fought for a policy which would allow them to develop on sound lines.
Here let me say definitely that I am a protectionist. I am a moderate tariffist but not a prohibitionist. I do not believe in the high tariffs imposed by the Scullin Government. Secondary industries peculiarly adapted to Australian conditions, and naturally complementary to our great primary industries, should be protected. But I am totally against the building of a high tariff wall round Australia, and the fostering of uneconomic industries which have no relation whatever to our national resources. I am, therefore, reasonably satisfied with the formula adopted at Ottawa. I do not think that the agreement is 100 per cent, perfect; it will need alteration from time to time, but it is only by experience of its shortcomings that we shall be able eventually to evolve an agreement that will be beneficial to the whole of the Empire.
How will this agreement affect the Australian exporters? It is interesting to consider the nature of the market with which we are endeavouring to make contact. I have in mind not only the fields open for immediate exploitation, but also those which will be open to us in the future. It is illuminating to study the figures showing the average annual importations of raw materials into the United Kingdom from 1924 to 1929. In merchandise, imports from British countries totalled £380,000,000, and from foreign countries £866,000,000, making a total of £1,246,000,000 annually. In foodstuffs - and this line is definitely interesting to Australia in view of our huge agricultural interests and the agricultural activities of the United Kingdom - imports from British countries totalled £161,000,000 and from foreign countries £267,000,000, making a total of £428,000,000. In raw textiles, imports from British countries totalled £73,000,000, and from foreign countries £101,000,000, making a total of. £174,000,000. In wood and manufactures . thereof, imports from British countries totalled £6,000,000, and from foreign countries, £58,000,000, making a total of £64,000,000. It will be apparent from these figures that there is an immense market in the United Kingdom awaiting contact by the dominions. When one realizes that blood is thicker than water, and that reciprocity is now the definite policy of the United Kingdom, the outlook is distinctly hopeful for us.
This agreement has been attacked by the Opposition on the assumption that it will jeopardize the interests of our secondary interests. For this reason the Opposition has made threats of the strongest character that when the Labour party is again in occupation of the treasury bench - I do not think that with its fantastic ideas in fiscal matters it will ever again be there - it will do everything possible to destroy this agreement. Honorable members opposite have not stated a reasonable case against this agreement. They seem to forget that the schedules tabled by this Government pro-, vide for increases in foreign duties on over 400 items of the tariff. To me this policy savours more of prohibition than of protection, particularly in view of the fact that the Government has undertaken to review the existing high duties with the object of reducing them. I cannot see that the implementing of this agreement is likely in any way to injure properlyestablished secondary industries in Australia. I do not approve of some of the. increases that have been provided in the tariff schedule that has been tabled. I feel that the problem with which we are faced has not been attacked in the right way. If the consumers in the United Kingdom are to receive any advantage from this agreement, a policy should be adopted which will lower costs, and increase the spending power of the people so that they may be able to purchase larger quantities of our foodstuffs. We should lower the British duties and leave the foreign duties where they are. Notwithstanding that statement, I realize that in accordance with certain articles of the treaty, the items of our tariff schedule will be reviewed from time to time, and adjustments made wherever necessary. I trust that when this is- done the suggestion that I have made will be considered, so that real advantages may flow from this agreement to the people that we are proposing to benefit.
The Minister for Trade and Customs (Mr. Gullett) told us that the changes being made in the tariff would be in the interests of the primary producers. I cannot see that this is so, because an increase in duties must mean an increase in the costs of the primary producer. That being so, then, in the interests of the primary producers it is desirable that, instead of leaving the British duties where they are, and increasing the foreign duties, we should reduce the British duties and leave the foreign duties where they are.
Some objection has been taken to /article 11 of this agreement, which provides that the Tariff Board shall judge our secondary industries on their merits and economic values. The Leader of the Opposition (Mr. Scullin) took the Government to task for having permitted the inclusion’ of this provision. In view of the attitude of the Leader of the Opposition, it is interesting to read certain statements made by him at the Imperial Conference of 1930 which he attended as the Prime Minister of Australia. The right honorable gentleman now desires that Parliament shall have a free hand to give legislative expression to any fantastic ideas it may have for the fostering of industry; at that Imperial Conference he said -
I should like to see methods of consultation evolved between our industrialists with a view to making such allocations of the supply of Australia’s requirements as should benefit both parties. If consultations of the type which I have in mind take place and lead to understandings and agreements, my Government will most sympathetically consider to what extent it can assist to bring the proposed allocations into effect. Australia is firmly determined to encourage her secondary industries and to witness their development.
But the right honorable gentleman also said on that occasion, and I draw particular attention to this remark -
We recognize, however, that there are some types of goods for which the size of our markets does not yet justify the establishment of manufacturing plants. If British industry will co-operate with us in the development of our industries, we, on our part, will do everything in our power to help you to secure tho lion’s share of our import trade.
A writer, commenting on that statement’, observed -
This policy is based on the recognition of the determination of the dominions to maintain manufacturing activities, and yet on. the growing realization in the dominions that it is unsound to foster the production of goods for which economic conditions render the countries definitely unsuited.
Yet the Leader of the Opposition is now desirous of pursuing a policy which, in the past, has led to the coaxing into existence of industries which are of no economic value whatever to Australia. I fail to see how the right honorable member can reconcile this view with his statement that -
There are some types of goods for which the size of our markets does not yet justify the establishment of manufacturing plants.
In the course of their speeches on this bill, the Leader of the Opposition and the honorable member for Darling Downs (Sir Littleton Groom) said that they could not imagine the British Government agreeing to the application of certain of these provisions to Great Britain. Yet Sir Herbert Samuel, the Liberal ex-Minister for Home Affairs in the British Government, said -
It might be claimed that Britain could not make agreements with the dominions and reserve their consideration for some other authority, but that was precisely what was happening in Australia. There were no particular duties in the Australian agreement, because the Commonwealth Government had given a pledge to the Federal Parliament that there would be no tariff alterations without recommendations of the Tariff Board. Why was this possible in Australia and not in Britain 5
Sir Herbert Samuel actually complained that the conditions applicable to Australia had not also been applied to Great Britain.
I welcome the conferring of these additional powers upon the Tariff Board, for that body is qualified to hear evidence, collect data of . all description, review it, an_d make a reliable recommendation. It is far better qualified to do this than is the party opposite, the members of which, in most cases, have no knowledge of even the elementary processes of manufacture of particular industries let alone the ability to understand the effect the full incidence of a tariff would have on those industries. It is a hundred times better for us to be guided by the decisions of the Tariff Board than to be forced to accept the arbitrary decisions of, say, the gentleman who held the portfolio of Trade and Customs in the last Administration. The Scullin Government’ made a farce of our fiscal policy, and miserably failed to take into consideration the economic value of various industries to Australia. In certain cases they increased our duties three, four, and even ‘ tenfold, without considering the effect that this unscientific tariff would have, upon our primary producers.
A high tariff is said to mean increased wages. Really it means high production costs, which react to the disadvantage of the whole community, particularly the primary producers. The economic committee which was set up in 1929, proved that protection cost the wheat-growers 8 per cent, more than the actual cost of production. At that time, the industrial and farm prices were in greater harmony than they are now. This being so, the added cost to the wheatgrower must be greater than 8 per cent. If we are to benefit from this agreement, we shall have to bring down production costs. If we can do that, every primary producer will reap advantage. He must adopt scientific methods of production, and by .conserving water and fodder, seek to overcome seasonal difficulties. If, in addition, the Government goes ahead with a determined attempt to find new markets and to maintain existing markets, we shall be able to take full advantage of the agreement. Every bushel of wheat, every pound of butter produced, adds to our national wealth. Lower tariffs will mean lower costs of production. Consumers in the United Kingdom will have a greater purchasing power, and higher prices for Australian products will result. By assisting our primary industries, we shall make those engaged in them better customers of our secondary industries; and so the benefits will be shared ‘by the whole community. I am glad that this agreement has a term of five years, but like the honorable member for Wakefield (Mr. Hawker), I should have preferred a term of ten, or even fifteen years. A longer period would encourage our primary producers to improve their holdings by planting and incurring other expenditure which would not be justified with a short-term agreement. Moreover, an agreement for a longer term would develop our secondary industries, because both investors and manufacturers would know where they stood. As it is, with the tariff changing at frequent intervals, there is no stability. Manufacturers who take advantage of a high tariff wall to establish industries in this country may find themselves in difficulties if a change of government brings lower duties. The tariff should not be altered at such short intervals.
Out of this agreement will come a number of “ most favoured nation “ treaties. The Sydney Morning Herald of the 5th November, reports Mr. Neville Chamberlain, the British Chancellor of the Exchequer, as having said -
Although it was alleged that Britain was limited in negotiating trade agreements to the extent of the preferences promised to the dominions, the fact remained that, since the Ottawa agreement, foreign countries one after another, for the first time, had come seeking to negotiate agreements.
Honorable members will see that the Ottawa agreement immediately caused foreign countries to seek agreements with the United Kingdom. Eventually some of these countries will seek treaties with the dominions also. With the signing of the Ottawa agreement begins the work of breaking down the tariff barriers that have sprung up since the war. Fortunately, the world is taking a wider view of many matters ; international conferences and committees meet from time to time with a view to solving some of the world’s problems. This agreement will make us realize that. Wasteful competition must be overcome, in favour of economic specialization. Although the Mother Country has granted definite concessions to the dominions,, she must also maintain her foreign markets. The members of the British delegation realized that, and for that reason they have not attempted to cater for 100 per cent, of the dominion markets. The Empire could not live to itself, and refuse to trade with other nations. Nations, like individuals, cannot live to themselves. Therefore, we must not be content to expand empire trade only. Foreign trade must be encouraged, and by so developing our resources we will be contributing to the development of the Empire.
– The honorable member’s time has expired.
.- I support the amendment moved by the Leader of the Opposition (Mr. Seullin), that this agreement be referred back, with a view to further negotiations taking place in order that its conditions may be less one-sided. I do not claim that the agreement is valueless, for I realize that certain sections of the community, particularly the primary producers, will benefit considerably under it. But if, in order to achieve that, the agreement calls on other sections of the people to make undue sacrifices, it is lopsided, and, therefore, if it cannot be rejected, it should be varied as early as possible.
– Does it not suit Broken Hill?
– I am concerned not with the interests of one section of the community alone, but with the development of the Australian nation as a whole. I am desirous that our people shall find employment. It is not sufficient to do something which will be of benefit to the primary producers if at the same time we make it impossible for other sections of the community to purchase what they have for sale. Our primary and secondary industries must develop side by side on sound lines if we are to prosper. Undoubtedly, Australia would benefit by the Ottawa agreement; but the price its people would have to pay for its benefits is too great.
Australia was unfortunate in having in office at this stage in her history a government which made such an unfortunate selection of delegates to represent her at Ottawa. Through long centuries, Britain has produced statesmen renowned for their hard-headed business methods, and, compared with the delegates from Britain, the Australian representatives were like so many lambs among a number of lions. The leader of the Australian delegation, the right honorable member for Flinders (Mr. Bruce), has been referred to in flattering terms by several honorable members. Unfortunately, the right honorable gentleman is more English than Australian. His ultra-patriotic ideal is to place Britain first, and to give little or no consideration to the dominions. When he was Prime Minister he looked at matters from the stand-point of Britain rather than from that of Australia. I am sorry that sickness has prevented the other member of the Australian delegation from participating further in this debate. Yet, without wishing to be offensive, I must say that the Minister for Trade and Customs (Mr. Gullett) was not a good delegate to send to Ottawa. When the Scullin tariff was under discussion, he and the AttorneyGeneral (Mr. Latham) joined with the present Postmaster-General (Mr. Parkhill) in submitting all sorts of foolish arguments in an endeavour to break clown that tariff. In their enthusiasm, they would even have broken down the tariff which they themselves created, had they been able. Australia’s delegates either had their vision clouded, because of their ultra-patriotism, or else they were incapable of bargaining with the hard heads of Britain. We are told that at Ottawa the Australian delegates laid all their cards on the table. How the British delegation must have rejoiced at the display of patriotism and loyalty given by the Australians! How they must have smiled at Australia’s infantile ambassadors, who went to the conference to get something for Australia and left having gained very little ! For every £1 gained by Australia, Britain gained £20 at the conference.
– How does the honorable member work it out?
– Time alone can prove it. I am too modest to be dogmatic when it comes to matters of pounds, shillings and pence. At the slightest provocation, the honorable member would be willing to tell us how many hundreds of thousands, or even millions, of pounds Australia would gain under this agreement. It is impossible for any one to say definitely what Australia will get out of the agreement and what she will lose under it. It is all a matter of opinion. The Ottawa Conference has been responsible for more controversy throughout the British Commonwealth of Nations than any other incident of the century. Consider the attitude of honorable members in this chamber. We have dour freetraders of the type represented by the honorable member for Swan (Mr. Gregory), who says that he will vote for the agreement because, in his opinion, it affords an opportunity of lowering tariffs. Then we have the honorable member for “Wentworth (Mr. E. J. Harrison), who desires to be agreeable at all costs; the honorable member for Indi (Mr. Hutchinson), who would like to be on both sides, if possible; and sturdy protectionists such as the honorable member for Denison (Mr. Hutchin). Thinking that the Government is likely to continue along the path of lower tariffs, the members of the Country party, who are mostly freetraders, except with respect to onions, potatoes, and such commodities, give the agreement their blessing. Incidentally, in doing so, they criticize it from all angles, and with just as great hostility as do honorable members of the Opposition. Outside of Parliament there are various organizations of the producers giving it a critical blessing, and other organizations of employers and of employees subjecting it to drastic criticism. Last, but not least, the Bank of New South Wales enters the lists.
During this debate there has been a tendency on the part of honorable members opposite to lecture the Scullin Government for its alleged lack of patriotism and loyalty to the Mother Country. I am sick to death of what I term the disloyalty of placing another country before that in which one was born and resides. Australia, as the home of a white race, is but 144 years of age - a comparatively young country. Because of the excellence of its pioneer stock which came from the British Isles, it has, during that short time, developed remarkably its railways, harbour schemes, irrigation and other works. Its people are beginning to feel their strength as a nation. Yet it has been termed impudence on our part to lay down dogmatic principles as to the lines along which we should develop. We have been criticized for the audacious policy which demands that this continent shall be reserved for the white race. Such policy at least indicates some spunk on the part of the nation, with its handful of population, numbering only 6,500,000 persons.
Since federation there has been a gradual development of the desire among Australians to build up a nation like England and the United States of America. What is wrong with such an ideal ? There are _some honorable members who believe that we should cling to the i apron strings of the Mother Country for all time. Thank God, during the war the policy of protection became ‘ instilled in the hearts and minds of the majority of the people of Australia. It has stood us in good stead. The time will undoubtedly come when we shall have to develop not only the industries which we are now fostering, but many others, to make our continent self-contained. The honorable member for Wentworth sneers at our new industries, in common with some other honorable members, terming them “ back-yard “ industries. With rare exceptions, until ten or twelve years ago there were few industries in Australia which could not be so designated. The development of concerns with a capital of £500,000 to £2,000,000 is of recent origin. But the “back-yard” industry of 30 years ago has become the great industry of to-day. There is even a big industry which makes shirts on which it affixes imported trochus-shell buttons.
I suppose that every honorable member who came in touch with the British delegation which visited Australia some years ago, discussed with those gentlemen matters affecting the Mother Land and Australia. Most of us referred to the development of Australian industries, with the assistance of British capital, and Australian executives. All of the delegates with whom I conversed agreed that Australia had a right to ‘develop its industries in its own way, and welcomed the opportunity of supplying us with machinery and executives. We have established magnificent industries in Australia which are doing well, but, obviously, they cannot be expected to compete on even equal terms with the industries of England, which have behind them highly-efficient machinery, skilled operatives, and the experience of centuries. The operation of articles 9, 10, 11 and 12 of the agreement will mean that, with a few exceptions, we shall have no hope of developing prosperous industries, or even of keeping in existence many of our present ones.
The Labour party is apprehensive regarding the application of this agreement, and its members speak feelingly upon it. We entirely disagree with the methods and outcome of Ottawa., and say definitely to the. people of Australia that should we be returned to power at the next elections, we shall immediately modify-
– What a joke!
– The honorable member may term it a joke. It would probably be another sort of joke if at the next election he found himself in the cold shades of opposition, or, possibly,, out of Parliament. Honorable members who talk about jokes of that description are politically infantile, with no conception of the brief life of the average parliamentarian. I have mentioned before that the average life of a member of Parliament is eight years. Many are here for appreciably lesser periods. This agreement meets with our disapproval because it is diametrically opposed to the interests of the workers of Australia. There are to-day from 300,000 to 400,000’ persons out of work in Australia. Anything that is done by this Parliament to open our fiscal gates and allow the inrush of cheap goods, irrespective of their place of origin, will throw more people out of work.
– Does not the honorable member think that the operation of this agreement promises to provide more work at Broken Hill?
– I am perfectly certain that the Ottawa agreement will not put one more man into work at Broken Hill. So far as metals are concerned, its provisions cannot be classed as other than pious platitudes. A similar remark is applicable to wheat. The duties provided on metals and other primary products are conditional on our producers “continuing to offer those commodities on first sale in the United Kingdom “, at world’s parity, whatever that might mean.
– With the other fellow shut out.
– When honorable members make such assertions they should not be so dogmatic in their interpretation of the Ottawa agreement. The markets of the Old Country will be almost as free to the metals, wheat and other products of the different countries of the world as they were before this agreement was originated.
– What about meat?
-Order! I strongly resent honorable members offering comments and asking questions while an honorable member is speaking. The honorable member for Darling is entitled to be heard in silence. I insist that that shall be done.
– The so-called concessions given in regard to metals and other primary products from Australia are so much eye-wash. In many cases they arc merely illusory, in others they will benefit only small sections of the community, and will be outweighed by the fact that a tremendous volume of goods will be poured into this country under the terms of the agreement. If their phraseology means anything at all, articles 9, 10, 11 and 12 will definitely allow the importation into Australia of goods which do not now come in. If, following the Tariff Board’s recommendations, goods which at present do not come here, to the value of £500,000, are brought in, large numbers of our citizens will bo thrown- out of work. The gravamen of the charge of the Opposition against the agreement is that instead of helping Australia in times of depression, and placing people in work, it will have exactly the opposite effect. When the full force of the Ottawa agreement is felt, many of our factories will be compelled to close down. Sneers have been cast at those who assisted in framing and in giving effect to the Scullin Government’s fiscal policy. The Labour party is a virile protectionist party. It has faith in Australia, and it earnestly desires a fiscal policy under which Australia can develop.
The Scullin Government, on assuming office, was confronted with an unparalleled financial position. The country was faced with bankruptcy. That Government imposed prohibitions which even the most ardent of protectionists would not have dreamt of, and customs duties sufficiently high to prevent goods from coming into this country. That was done primarily to enable our exports to exceed our imports in sufficient quantity to permit governmental and private commitments overseas, amounting to approximately £38,000,000, to be met. The Government achieved its objective, and when it left office there was a surplus of £8,000,000 in London. Unfortunately, that favorable trade balance has been dissipated by the insane policy pursued by this Government. One would think that the depression through which we are passing has disappeared, and that now all is well. Honorable members heard the speeches of the Prime Minister (Mr. Lyons) a few weeks ago, and that delivered to-day, which show that with a generous hand the Government- is remitting taxation now paid by certain fortunate sections of the community. This generous Government baa now remitted a further £2,200,000 in taxation, one half of which has been contributed by the unfortunate invalid and old-age pensioners. Such generosity suggests that the Commonwealth is again solvent, and that there is nothing’ further to worry about. But the monthly customs returns show that we are drifting badly, and that it will not be long before we are again faced with the position which confronted the Scullin Government when it assumed office in 1929. The favorable trade balance of £8,000,000 left by the Scullin Government has now disappeared, and at tlie end of this financial year there will be an adverse trade balance of between £6,000,000 and £8,000,000. The supporters pf the Government contend that the present position is not permanent. They say that the wholesale houses and the storekeepers, who have allowed their shelves to become empty, are now replenishing their stocks. It is fortunate, indeed, that these traders did not think of re-stocking until the Nationalist Government, with freetrade tendencies, came into power. This has been made possible by lifting prohibitions and reducing customs duties on imports to an unparalleled extent. The Government and its supporters hope that it will not be embarrassed by the flood of imports; but, unless the Government is able to borrow money overseas to pay for the goods, which cannot be paid for by exports, this policy must _ lead to inevitable bankruptcy. How will articles 9 to 12 inclusive operate when we are being overwhelmed with imports? The local market will be swamped, and an adverse trade balance will rapidly develop. That is another reason why the Labour party is strongly opposed to the Ottawa agreement. The honorable member for Wentworth (Mr. E. J. Harrison), repeated a gross misrepresentation of the attitude of the right honorable the Leader of the Opposition (Mr. Scullin), which was also mentioned by the honorable member for Denison (Mr. Hutchin), in an article he contributed to the Sydney Morning Herald. When the present Leader of the Opposition attended . the Imperial conference in London, he made a declaration on behalf of the Government of which he was then the leader, to the effect that Australia was determined to develop those industries which she could naturally develop, and to establish others which it was felt could be established. The right honorable gentleman qualified that statement by saying that there were certain goods which could not be economically produced in Australia. He also said that Australia should obtain from the United Kingdom, all the goods which she could not manufacture, rather than from foreign countries. He not only maintained that attitude at the Imperial conference, but also made a similar public declaration at the manufacturers’ dinner recently held in Sydney. The honorable member for Wentworth grossly misrepresented the right honorable gentleman.
– I quoted from an article ‘ in the Fortnightly -Review, written by a man who had read his speech.
– The honorable member may have unwittingly misrepresented the Leader of the Opposition, but I can assure him that if he reads the blue-book containing the report of the proceedings at the Imperial conference, and other publications available to him, including one containing the speech made before British manufacturers, as well as the recent speech in Sydney, he will see that the views which the right honorable gentleman expressed on those three occasions are not contradictory.
I trust that the honorable member for Wentworth will accept my word for that.
– The article said that he did not believe in fostering uneconomic industries.
– The honorable member believes that the manufacture of pearl shell buttons in Australia is uneconomic.
– I do not agree with the honorable member The MacRobertson confectionery industry in Victoria was started by one man with a small boiler and a bag of sugar.
– With what protection ?
– Without protection that industry would still be conducted as it was in its initial stages.
– What protection does such an industry need?
– The protection afforded to it has enabled it to develop into one of the largest confectionery businesses in the world.. I remember reading, 20 to 25 years ago,” of hardboiled freetraders voicing similar sentiments to those expressed to-night by the honorable member for Wentworth. They said that the time was not ripe to establish Australian industries; that we were not in a position to manufacture economically. We shall never be able to manufacture here unless we are determined to make a start. If we are to be governed by the consideration is an industry economic or uneconomic, we shall trade with the cheapest producers. The patriotism and loyalty of some honorable members opposite is such that they do not care with whom they trade. The honorable member for Wentworth believes in trading with foreign nations, but that may be because British manufacturers cannot offer a suitable commodity. He must have certain goods, and he does not care by whom they are made. The honorable member believes in giving preference to foreigners, rather than to the people of his own country, upon whom he is depending to purchase the goods he manufactures. There are probably several nations which can produce the machinery we require more cheaply than we can make it ourselves. Textiles, hosiery, suits, tweeds, dress materials, hats, tools of trade, can possibly be manufactured in other countries more cheaply than they can be made in Australia. If we are to apply the economic test to all of our industries, some of them will never be able to develop, and we shall have to depend upon primary production. Even the most enthusiastic freetrader does not desire that. It therefore becomes a question how far we shall protect our manufacturers. Some will go one quarter of the way, others one half; but the Labour party is prepared to go the whole distance. This is an excellent opportunity to adopt a reciprocal trade policy between Great Britain and Australia. In a great number of instances British manufacturers have fallen down on the job; they have failed to take advantage of the opportunities afforded to them. The lawn mowers manufactured in Great Britain to-day are of the same type that were made 50 years ago. Until recently, manufacturers of British motor cars refused to produce a motor car suitable to Australian conditions. As soon as the British manufacturers of motor cars developed a little flexibility in their ideas, abandoned low engine power, and developed a car suitable to- Australian conditions, they captured the market. What applies to motor cars applies also to optical goods, scientific instruments, &c. For many years we have been compelled to purchase such articles from foreign countries, while British manufacturers, because of their lack of initiative, have lost the trade. We are prepared to give to Great Britain all that trade which we formerly did with foreign countries; but honorable members opposite claim that, while we ought to make preferential trade agreements with Great Britain, we should also retain our trade with foreign countries. Of course, we cannot have it both ways. Empire preference means nothing unless we are prepared to go the whole way.
The Labour party has made its position clear, and will take the first opportunity of varying this agreement to make it more equitable and less lopsided. We are pre pared to accept a fifty-fifty arrangement, but we are not prepared to accept the one-aided agreement which has been foisted upon us by our representatives at Ottawa.
.[9-4J- - Minimister in charge of the department which will be responsible for the general administration of the commercial part of the agreement between the United Kingdom and Australia, and which deals with such matters affecting primary’ industries as come within the purview of the Commonwealth Government, I have been much interested in the debate on this bill, and have carefully studied the criticism uttered both in this House and outside it by those who oppose the measure. The objections to the bill may be divided into three classes: - (1) Those which are inspired by political motives; (2) Those which emanate from persons and industries which consider that their interests will be damaged by the operation of the agreement; and (3) Criticism of the provisions of the agreement, due to misinterpretation or misconception of its meaning.
One is almost bewildered by the inconsistency of the political opponents of this agreement. We find the Liberal Opposition in Canada protesting against the ratification of the agreement on the ground that it offends their freetrade predilections. The Canadian agreement is on all fours with ours so far as preferences are concerned, yet, while the Canadian Opposition protests because the agreement offends against freetrade, the Leader of the Australian Commonwealth Opposition opposes an identical agreement on the ground that it offends against the doctrine of protection, of which he is the apostle. The Leader of the Opposition also objected to the agreement because of the manner in which the formula is to be applied, as set forth in articles 9 to 12. He vehemently declared that the determination of the fiscal policy of the Commonwealth should be left to the elected representatives of the people. One does not need a very long memory to recall that what is known as the Scullin tariff schedule was never ratified by the elected representatives of the people, so that article 12 of the agreement does not offend in this respect more than did the action of the right honorable member’s own Government.
I was pleased that the honorable member for Gippsland (Mr. Paterson) drew attention this afternoon to article 4 of the agreement. Members of the Opposition have stated that it is unthinkable that the British Parliament would’ allow itself to be bound by any such provision as article 12, but it is a fact that the British Parliament has bound itself by article 4 of the agreement, which allows the British Parliament less latitude than article 12 allows us.
To proceed with my exposition of political inconsistency. The honorable member for West Sydney (Mr. Beasley), and the honorable member for East Sydney (Mr. Ward), stated that the concessions secured for our primary producers were illusory and of no benefit ; that they would not result in better prices being obtained for our produce. Yet their political friends in Great Britain, including Mr. Davies, have denounced the agreement on the ground that it will increase the cost of Australian commodities on the British market. Obviously both statements cannot be correct. The honorable member for Darling (Mr. Blakeley) ventured the opinion - though he admitted that he had not verified his figures - that the advantages gained by the British delegation at Ottawa were as 20 to 1 compared with those gained by our representatives. Encouraged by suggestions from the corner party, he quoted some of the opinions expressed in a document issued by the directors of the Bank of New South Wales, and pointed to that institution as also being opposed to the Ottawa agreement. It is true that politics make strange bedfellows, and when we find the honorable member for Darling, the honorable member for West Sydney, and Mr. Davidson, the general manager of the Bank of Now South Wales, amicably occupying the same political couch it is evident that strange pranks are, indeed, being played. Seeing that members of the Opposition are prepared to accept the support of the directors of the Bank of New South Wales in their opposition to this agreement, I wonder whether they would bc prepared to endorse all the opinions expressed in the circular to which they have referred. The circular, speaking of the Government’s method of applying the formula by retaining the existing preference duty on British goods, and increasing the duty on foreign goods states -
There are two objections to this arrangement. First, to get the largest preferences Britain has to climb thu highest tariff wall, and second, the tariff wall is made much higher generally.
I hardly think that members of the Opposition will say Amen to that. The document continues -
Nevertheless, Britain has been generous in her treatment of dominion claims at Ottawa.
That is not consistent with the statement that the benefits which Australia will derive from the agreement are as 1 to 20 compared with those obtained by Britain. The circular goes on -
Wo receive a duty in our favour in the British market for such important, commodities as butter, cheese and fruit, and it is hoped by the interests concerned to obtain a preferential duty for meat. Though in such circumstances there will be disadvantages in the long run, benefits may accrue to Australia in the immediate future. These benefits, however, will he at the expense of British consumers, and, of course, will ultimately be offset by a shrinkage in the volume of these goods taken by the British consumers at tho higher prices. These facts are constantly overlooked in the propaganda of protectionist groups, who claim that Australia should not give up any of her present tariffs in order to benefit British trade.
I do not think that the general manager of the Bank of New South Wales and the honorable member for Darling will find themselves in accord regarding some of the matter I have quoted.
In his speech the other night, the honorable member for East Sydney said that the Australian representatives had been out-generalled at Ottawa, and he even challenged the sincerity of the advocacy of Australian interests by tho right honorable member for Flinders (Mr. Bruce). The honorable member for Darling repeated the first portion of this charge with even greater emphasis than that employed by the honorable member for East Sydney. While members of the Australian Labour Party are making these charges, members of the British Labour party are saying the same thing about those who represented Great Britain at the conference. They say that Mr. Thomas, Secretary for the Dominions, who attended the conference, should be referred to as the member for Ottawa, and that Mr. Baldwin, the leader of the British delegation, should be known as the honorable member for Brisbane, or Melbourne or Sydney. Surely this is a subject fit for a Gilbert and Sullivan masterpiece. Members of the Country party, generally, have indicated their support of the agreement, because of articles dealing with the method of tariff revision, while Opposition speakers have reserved their most severe condemnation for those very articles. The opposition encountered from these varied and conflicting interests, both in Australia and in Great Britain, suggests that the delegates at Ottawa succeeded in the difficult task of holding the scales of justice evenly and fairly between all the interests involved.
Nor is the bewildering variety of attitude towards the agreement limited to the political field; it is seen even among representative manufacturing associations. While the presidents of the chambers of manufactures of Sydney and Melbourne see in the agreement potential injury to the manufacturing interests of their States, we have the presidents of the Brisbane and Adelaide chambers commending it because they see in it definite advantages to the whole Australian community, and no danger to the manufacturing interests. We also have the unqualified endorsement of Mr. S. Mackay, of Sunshine Harvester fame, and Mr. R. Vicars, of the textile industry, both of whom visited Ottawa as representatives of their respective organizations. Their knowledge of the history of the agreement certainly makes their opinions more valuable than those of the honorable gentlemen who have been acting as self-appointed spokesmen for the manufacturers.
Let. me proceed to examine some of the criticism that is based on a misinterpretation of the agreement. Several honorable members have expressed concern regarding the meaning of article 5. That article reads -
The duties provided in this agreement on foreign wheat in grain, copper, lead and zinc on importation into the United Kingdom are conditional in each case on Empire producers of wheat in grain, copper, lead and zinc respectively continuing to offer those commodities on first sale in the United Kingdom at prices not exceeding the world price.
It has been suggested by the honorable members for Calare (Mr. Thorby) and Riverina (Mr. Nock) that this provision will compel the offering of all our wheat, copper, lead and zinc to the British market before any approach may be made to a foreign market. I give them an official assurance that that interpretation is not correct. Other honorable members have expressed the fear that the article will interfere with the practice now prevalent, of shippers of wheat chartering a vessel, despatching it to a nominal destination, and effecting a sale of the shipment while on the water. They believe that if, in such a case, the shipment is sent to the United Kingdom, article 5 will not apply, because the ship will not be supplied with a definite bill of lading from Australia to London. I give the assurance that, provided the identity of the shipment, as a dominion product, can be established, it is not considered that any difficulty will be experienced in continuing those methods of trading. There is no “catch” in the article, although its meaning might have been more clearly expressed. Its general import is that the British Government is prepared to provide a preferential market’ for these goods by imposing a tariff brake on our competitors; but this brake is only to be perpetuated subject to dominion commodities continuing to be offered at market prices, as they have been in the past. In other words, we are not to use the tariff on foreign commodities to inflate our prices, the preference being a market rather than a financial one. I repeat that the article in no way restricts the freedom of producers to. choose their own market; it applies merely to consignments to the United Kingdom.
Doubt has been expressed by some honorable members regarding the intention of article 6 and its corresponding schedule H, which deals with the regulation of meat imports to Great Britain. It is suggested that these provisions give to the British Government a continuing right to impose restrictions on our supplies of meat to the United Kingdom. [ refer honorable members to - sections 3, 4 and 5 of schedule H. Section 3 is an undertaking given by the British Government to regulate the imports of certain meats purely in order to stabilize the market for the benefit of the producers. Section 4 provides the method by which that regulation is to be given effect. It states that the interests of the producers of meat in the United Kingdom shall first be considered, and that from that stage, expanding orders will be given to dominion meat producers. Section 5 indicates the method to be adopted in applying the previous sections. I draw the attention of honorable members to the consumption of meat in the United Kingdom. The figures are as follow: - Beef 1,400,000 tons, 800,000 tons of which is produced in the United Kingdom itself, and 76,000 tons are imported from the dominions, leaving 524,000 tons to be supplied by foreign interests. There is thus ample opportunity for 100 per cent, preference to be given to the growers of the United Kingdom and the dominions, without in any way impeding shipments from the latter. The same story may be related in regard to mutton and lamb.
It has -.been suggested that under section 3 of this schedule, it will be competent for the British Government, at any time during the currency of the agreement, to vary the arrangement, and to impose restrictions on shipments of meat from the dominions. That is not the case. The section provides very definitely for a restriction against the foreigner, increasing progressively to 35 per cent, by 1934. Meanwhile, efforts are being made to convene a conference of all the meat organizations in the Empire; but even should nothing result from that conference, the provisions which impose these very heavy restrictions on foreign meatgrowers will continue until the end of the five years for which the agreement is being made.
– There is provision under which it may be lifted in certain circumstances.
– It may be lifted if that course is in the interests of either party, but any action taken must be by mutual arrangement.
– It may be lifted in the interests of the consumer, if there is a shortage of supplies.
– I remind honorable s members that the determination of future supplies of meat from the dominions and from South America is based on the transactions of the year ended the 30th June, 1932, and I emphasize the fact that, in the case of Australia, that was a peak year. Even if, as some of our friends of the Opposition would have us believe, the members of our delegation were disposed to sleep on the job, they were certainly wide awake when they made this arrangement. During the year ended the 30th June, 1932, the exports of mutton and lamb from Australia to the United Kingdom totalled 74,500 tons, which equalled the combined totals of the two preceding years. Under this arrangement, all that the Imperial Government asks is that we shall not increase that quota during next year; after that, we may work on an unlimited basis. Similar considerations apply to beef. For the year ended the 30th June, 1932, the quantity of beef exported from Australia to the United Kingdom was 57,000 tons, compared with 45,000 tons and 35,000 tons respectively in the two preceding years. I may be reminded that during the last few days an arrangement has been come to between thu United Kingdom, Australia, New Zealand and South America under which certain restrictions are to be voluntarily imposed on the shipments of meat to the United Kingdom during the months of November and December of this year. That has no connexion - directly, at any rate - with the Ottawa agreement, which so far as meat is concerned does not come into operation until the 1st January, 1933. As a result of the restrictions that are to be placed on the imports of foreign meat into Great Britain after the 1st April, 1.934, the dominions can reasonably expect to secure then an additional market to the extent of 34,000 tons of mutton and “10,000 tons of beef annually.
Before leaving the subject of meat, I wish to draw the attention of the House to the possibility of developing pig products. The exports of those products from Australia to Great Britain have been, 9 tons in 1927-28, 310 tons in 1929-30, 3,732 tons in 1930-31, and 3,142 tons in 1931-32. It is hoped that that trade may be developed on a scale far surpassing anything contemplated in the past, and that many of our dairy and wheat farmers will thus be able to build up a very profitable sideline.
Article 8, and schedule F which is dependent on it, set out the formula for the ‘ preferences which Australia has agreed shall be accorded to goods produced in the United Kingdom, together with certain exceptions in respect of specified commodities. Some honorable members, notably the honorable members for Calare and East Sydney, see in the whole scheme of Imperial reciprocity the danger of retaliatory action being taken by other nations. One would think that fiscal preferences and trade agreements are quite a new development, whereas they are a commonplace. The honorable member for East Sydney spent quite a lot of the time allotted to him in proving, to his own satisfaction at all events, that no advantages are- likely to accrue to primary producers in Australia as a result of the operation of this agreement. He endeavoured to prove that there are so many counteracting, countervailing disadvantages that we shall not obtain better prices for our commodities on the’ other side of the world. He then took a breath, and immediately set out to prove that the other nations of the world would not take this lying down, but that they would immediately adopt retaliatory measures. If the agreement bestows no advantages on the dominions at the expense of foreign nations, what reason have they to retaliate? That is merely another instance of the inconsistency of those who oppose the agreement. As the Minister for Trade and Customs (Mr. Gullett) pointed out when he introduced this measure, Australia has not crippled her capacity for trade with her valuable foreign customers, but; on the contrary, has made important reservations in her preferences to the United Kingdom which leave her free to make treaties with those countries.
The criticism of many honorable members would suggest that they are quite unaware of the real advantages that are likely to accrue to Australia from the agreement. I have therefore prepared a statement setting out the intrinsic value, the possibilities, and the potentialities of the agreement so far as it applies to the items mentioned in the preferential list. In passing, may I point out that the commodities in respect of which those preferences apply represent the major portion of the exports from Australia to the United Kingdom. In 192S-29 they represented 50 per cent., in 1929-30, 62 per cent., and in 1930-31, 67 per cent. Excluding wool - and it ought to be excluded because obviously it cannot be regarded as a preferential item - 91 per cent, of the goods that we exported to Great Britain in 1930-31 are included in the preferential list. The value of those preferences on some of our exports is illustrated by the following table : -
Honorable members will see that the preference to Australian butter is equivalent to more than lid. per lb.; the total production in Australia in 1930-31 was valued at £21,500,000, and the exports to the United Kingdom, £7,200,000, although the total imports by Great Britain amounted to £46,900,000. Obviously, for this commodity, there is a valuable market to be exploited by the Australian producer. The honorable member for East Sydney has advanced as an argument against . the butter preference the fact that prices declined during 1931-32 despite the operation of the 10 per cent. duty. From this he deduced that the duty of 15s. per cwt. would be equally ineffective. The reduction in prices is due to the fact that during the last two years increasing supplies have been unloaded on the British market, mainly because of increased dominion exports and the imposition by continental countries of heavy import duties. The result is that Great Britain’s imports increased from 320,000 tons in 1929, to 400,000 tons in 1931. It is an elementary economic fact that when increasing supplies of any com-
modity are available, particularly in a period of depression, prices are adversely affected. Nevertheless, there is little reason to doubt that tremendous advantage will accrue to the butter producers of the Commonwealth from the British preference of 1-Jd. per lb. Germany has recently imposed what is practically a prohibitive duty on butter, and by that means has reduced imports from other parts of the continent from 131,000 tons in 1930 “to approximately 70,000 tons for the current year. The butter now shut out of Germany will be seeking other outlets, principally in the United Kingdom market, and the preference of 1-Jd. will be of substantial assistance to our exporters in meeting that competition. Not only in respect of butter will the dairying industry profit by the agreement; all the kindred products - cheese, milk, poultry and eggs - are assured of an enlarged and more profitable market. For instance, Australia’s total production of eggs is worth £9,000,000. The value of our exports to the United Kingdom in 1930-31 was only £319,000. It is true that in the current year our exports have surpassed the figures for last year, although considerable shipments have still to go abroad. But the imports of eggs into the United Kingdom in 1930 were valued at £16,400,000, and the preference -which our egg producers will now enjoy will place them in a very advantageous position.
I have already dealt extensively with the meat trade; but, in view of the opinions expressed by some honorable members during this debate, I propose to quote the views of experts, both growers and exporters, regarding the value of the Ottawa agreement to the meat industry. These opinions are at least equal in value to those of some of the New South “Wales metropolitan members, who have tendered their advice so freely. Mr. E. F. Sunners, chairman of tho Meat Industry Board of Queensland; said -
Considering the difficulties involved in the making of an agreement of this nature, the result should bc regarded as satisfactory. It appears to bc of definite value to Australian producers of mutton, lamb and pork, inasmuch as it aims at assuring the market for substantial quantities of mutton and lamb and for an increasing quantity of pork. It is possible that the agreement will ultimately place Australian beef in a better position, particularly if it can be offered in the English market in a condition more comparable with chilled beef, if not as chilled beef. To reach the fullest advantage from such an agreement many improvements must, however, be undertaken throughout the industry.
Mr. F. H. Tout, consultant to the Australian delegation and president of the New South Wales Graziers Association, said -
The agreement made at the Ottawa Conference has placed Australia in a much more favorable position to compete with the Argentine in the meat export trade. Australian produce which he had inspected at Smithfield was of high quality, but the export of meat was better controlled by the interests concerned in the trade of the Argentine. Opportunities had been created by the preferences granted at Ottawa. It was the task of the Australian exporters to realize this. The essentials for a successful export trade were correct growing, correct marketing, and efficient control of supplies.
The opinion of the Victorian Meat Exporters Association is -
After careful study, it was felt that the arrangements made would be of great value to the primary producers and meat exporters of Australia. Whilst it was appreciated that the benefits would not have an immediate effect, it was realized that a step in the right way had been made. Tho exporters felt that the institution of the quota was of greater value to Australia than the imposition by Great Britain of a preferential tariff.
Mr. J. B. Cramsie, who is well known throughout the Australian meat industry and will surely be accepted as an authority on it, said -
It is quite likely that benefits gained from the Ottawa agreement will have a capital value of £100,000,000 to the Australian pastoral industry. British interests should now be attracted to their own dominions as a better field for investment than foreign countries. Any increase in the price of meat on the overseas markets automatically places a higher value on all stock in Australia, at the same time increasing the value of pastoral areas - (.throughout the Commonwealth.
The Graziers Association of New South Wales has expressed itself in similar terms.
In regard to the fruit industry, Australia’s total exports of fresh fruit to the United Kingdom last year slightly exceeded in value £1,000,000; but the United Kingdom imported from all sources £20,000,000 worth. Here again is an immense market for exploitation. The statement has been made during tho debate that no advantage would accrue to Australian fruit-growers from the Ottawa agreement. Honorable members of the Lang group have questioned my right to hold the portfolio of Minister for Commerce because I know something of wireless broadcasting, woollen mills, transport agencies, newspapers, and the other activities with which I am associated. Obviously they consider that the ideal qualification for a parliamentarian is complete ignorance of the subjects in regard to which he is to exercise legislative and administrative power. Perhaps those honorable gentlemen will permit me to express an opinion about the value of the fruit preferences, notwithstanding that I am an orchardist ! I arn convinced that substantial advantages are being given to us, and that view is endorsed by Mr. J. B. Mills, who attended Ottawa as the representative of the Australian fruit industry. He considers that the increased preference on fresh fruit should double the Australian market in the United Kingdom. Mr. Fairley, managing director of the Shepparton Cannery, Victoria, has commended the Commonwealth Government for concluding the agreement, which he is convinced will bring enormous prosperity, not only to the primary industries, but also to a number of secondary industries. He considers that the canned fruit industries will benefit largely.
I conclude by commending to honorable members an unbiased study of the preferences which I have summarized thus briefly. I am sure that the primary producers of this country are under no misapprehension as to the value of the assistance which has been secured for them. They will not be misled by the protests of those who have criticized the agreement, many of whom cannot be said to have the interests of primary producers at heart. The Government looks to Australian farmers to take advantage of these preferences by concentrating upon the improvement of their fanning technique. By the reduction of producing costs through the better use of the lands already settled, primary producers can give the lie to those who consider that one of the results of shelter provided by preference is the encouragement of the inefficient producer. I have the greatest admiration for the contribution made by the producers, both primary and secondary, in Australia’s struggle to maintain her solvency. I regard this agreement in great measure as a recognition of their efforts, in the past and an encouragement to them for the future, and I commend it to the serious consideration of honorable members.
– Honorable members generally appreciate the advantages which increased intra-Empire trade will be to all members of the British Commonwealth of Nations, and are alive to the necessity for adding to the prestige of Great Britain by trade treaties with the dominions. At the same time we must, in the interests of our own people, thoroughly, weigh the concessions we are offering to the United Kingdom.. This is the first attempt to bring about an empire trade agreement, and I am sure that it will not be the last. I hope that we shall not concede all the advantages we may have to offer without receiving reciprocal concessions commensurate with those which we are making. Difficulties that were almost insurmountable confronted the Australian delegation at the Ottawa Conference. I suggest, therefore, that although we are not likely to get from the agreement advantages as great as were expected, this is not because of lack of effort on the part of our representatives, but because the British delegates were properly determined to safeguard her interests and foreign trade, and especially to protect that which is dear to her industrial life - the cheap breakfast table. Naturally enough the Australian delegation, I have no doubt, did all that was humanly possible to safeguard the industries of this country. We set out to make trade concessions to the Mother Country and the sister dominions, and Ave now have to ask ourselves whether Ave have not conceded more than Ave have received. It is our duty to examine the various articles in the agreement, and to ascertain in what way and to what extent they affect the interests of our primary producers, keeping always in mind the fact that our fundamental consideration is the development of this young country. We must, for example, safeguard those foreign markets for our primary products that are of real value to Australia, and Ave must be particularly careful to see that the rights of this Parliament are not entirely abrogated. We must, in short, in our trade concessions keep something in reserve for future use.
For many years Australia has been Britain’s second best customer. In our trade relations with the Homeland Ave have always acted generously. All honorable members will, I think, agree that in trade matters avc should be generous to the Mother Country in return for her protection of our trade routes, and her defence from foreign aggression, thus making possible the development of this country, and enabling us to enjoy privileges which. in other circumstances, would not have been ours. But while Ave should be prepared to grant concessions to Britain, which offers such a wide market for our beef, butter, wool, wheat and mineral resources, we are entitled to analyse this agreement, to see if Ave have secured all that might have been obtained in the interests of our people.
When the Minister for Trade and Customs (Mr. Gullett) left Australia to attend the Ottawa Conference, he intimated that there would be no bargaining with Britain, and upon his return he assured us that our delegates, had not approached the conference table in a bargaining spirit. We do know, however, that Britain and the other dominions and Crown colonies did a certain amount of bargaining which, I suggest, is inseparable from any arrangement or agreement -involving an exchange of values such as trade advantages. In view of the extent of the British market we must, I think, be a little disappointed with our share of trade concessions agreed to at Ottawa. For example, Britain requires approximately 6,000,000 tons of wheat annually, and Australia and Canada between them have an exportable surplus, over and above Britain’s requirements, of 138,000,000 bushels, so we are obliged to look elsewhere for its disposal. In chilled beef, Britain requires 135,000 tons, of which Australia’s share is only 57,000 tons. In chilled mutton, Britain imports 356,000 tons annually and Australia supplies 70,000 tons. Britain’s requirements of bacon total 557,000 tons, of which Denmark alone supplies no less than 367,000 tons. The British market absorbs 42,000 tons of ham, and takes 30,000 tons from the United States of America. Of butter, a commodity in which Australia is vitally interested, the United Kingdom market requires 404,000 tons annually. Australia last year supplied 78,000 tons, and it is estimated that this year our exports have reached 91,000 tons. Dominion delegates at Ottawa set out to secure that market, but were disappointed. Possibly we should have obtained more concessions from Britain if our delegates had bartered some portion of our trade which is enjoyed by the United States of America, a country which hitherto has exported heavily to the Commonwealth but has taken little in return. In 192S-29 our imports from the United States of America totalled £35,000,000, and our exports to that country only £5,831,000. In motor chassis alone our imports from the United States of America in that year were valued at £7,000,000, our imports of petrol and shale spirits totalled £3,250,000, our imports of undressed tim- ber, £2,144,000, and of unmanufactured tobacco £1,827,000. In ten years our adverse trade balance with the United States of America has amounted to £210,000,000, and we have been obliged to make good the difference in gold.
In this agreement we are receiving concessions only equal with those of the other dominions, though we have in the past given to Britain those preferences which made us her second best customer. We have also given away in a wholesale manner valuable concessions covering a considerable number of tariff items, some of which were expected to play an important part in the industrial development of this country. We have, in fact, been much more generous to’ the Mother Country than any other dominion, and in return we are receiving no greater concessions than are given to other parts of the Empire. It would therefore appear, that, in the interests of this country, a critical analysis of ‘the concessions which Australia has given is fully justified. In 1929 Australia purchased British goods to the value of £54,000,000. Canada, in that year, bought British goods to the value of £35,000,000, and New Zealand took £21,000,000 worth. In 1927, when Australian trade was probably at its peak, we imported British goods to the value of £67,750,000, whereas Argentine, which is our strongest competitor in tho meat trade, took only £33,000,000 worth. This trade position certainly justified the hope that Australia would get more out of an inter-Empire conference, as regards the export trade in meat, than has been conceded. Australia has been Britain’s best customer, but out of consideration for the Argentine, Britain has prevented us from securing a very valuable beef concession.
I freely admit that Great Britain is in an awkward position, in that she has to conserve her interests as a manufacturing ‘country; but while we are prepared to make concessions to her, we must not lose sight of those principles which are rightly regarded as essential to the development of this country. We should not lightly ratify an agreement that might be the death warrant of industries which ive believe will play an important part in our industrial progress, and provide remunerative employment for our people. It is important that the agreement should be considered in a non-party spirit. No one could justify support of, or opposition to, it on purely party political grounds. The people generally, and especially the unemployed in this country, will judge it on its potential value to the Commonwealth, and will not be sidetracked by political issues. Therefore, we should endeavour to assess the business value of the concessions exchanged.
The trade concessions obtained for Australia should provide a wider market for our surplus products and more employment for our people, but are we willing to delay development on the industrial side for some five years. We should take a broad view of the situation that is likely to emerge from the Ottawa negotiations. If the remarks of many honorable members representing all the parties in this House may be taken as a guide, I believe they will approve some alteration of the agreement, and it is my intention to provide them with an opportunity to do that. It was generally understood that, prior to the departure of the Australian delegation, the members of this Parliament were to be given an opportunity to discuss the proposals to be submitted at that gathering. In February last the Leader of the Country party (Dr. Earle Page) asked a question on that particular matter. On the 10th May he repeated it, and received the following reply from the Prime Minister: -
I have already indicated to the House that it is the intention of the Government to give honorable members an opportunity before the House goes into recess to discuss in a general way the policy that will be adopted by the delegation that will represent Australia at Ottawa.
In spite of that statement no opportunity was given to this Parliament to discuss the proposals that our delegates were to place before the Ottawa Conference. As a result, we have now before us a treaty to which we are asked to agree, and which we are told cannot be altered. But I submit that, if any part of the treaty is likely to injure Australian industry, it is our duty if possible, to amend it. If the concessions that we have granted to Great Britain are really as valuable as has been said, that country should consider favorably any representations that we make to it for an alteration of the agreement. It has been stated that the concessions cannot be altered because similar concessions arc being granted to the other dominions. I agree that we cannot alter any concessions that we, in common with the other dominions, are receiving from Great Britain. It would be futile to cancel the agreement in an effort to bring about a new one. But Australia has paid a big price for the concessions that it has already received and a still bigger price for the new concessions. As many honorable members have expressed their disappointment with the agreement, we would be perfectly justified in amending it so far as it affects the concessions that we are giving to Great Britain. We are asked to pass the agreement in toto. The Leader of the Opposition (Mr. Scullin) has moved an amendment to delete from the motion - That the bill be now read a second time - all the words after “ That,” with a view to substituting other words. I shall support the omission of the words, but not the motion that the right honorable member intends to move if the amendment is carried, because his object is to cancel this agreement so that a new agreement may be made. If the amendment providing for the deletion of all the words after “ That “ is carried, I propose to move to insert the words -
The bill be postponed to permit of negotiations for a modification of the concussion by Australia under the agreement -
adversely affecting sections of Australian primary production;
affecting the right of the Commonwealth’ Parliament to promote and develop approved secondary industries ;
reserving to Australia many valuable tariff opportunities for mutual beneficial treaties with foreign countries after having conceded to the Empire very generous treatment.
– The honorable member wants a new agreement, lock, stock, and barrel.
– We cannot obtain a new agreement in respect of concessions granted by Great Britain to the dominions, and my motion does not ask for it, but there is no reason why we should not modify the concessions that we are making.
– That would necessitate a new agreement.
– Only in respect of the concessions that we are granting to Great Britain. If those honorable members who have criticized the agreement have serious objections to it, they should be prepared to supportmy proposal. I am not suggesting that we should cancel the concessions that we are receiving from Great Britain. If we cancel the agreement, as is proposed by the Leader of the Opposition, Australia will have no right of entry to the British market for many of its products, including butter, wheat and meat. In fact, we should lose the preference that we have enjoyed in the past, and would soon be in a helpless position. But our hands are tied by the Ottawa agreement, so far as it affects the concessions that Great Britain has granted to us. They are the same as have been granted to the other dominions which, in some instances, have already approved of them. If the amendment of the Leader of the Opposition is not carried, I shall support the second reading of the bill, and again endeavour to amend the agreement at the committee stage. The amendment that I have foreshadowed, if carried, will enable us to deal with the concessions that we have given to the Crown colonies. In order to make those concessions, the Australian delegation at Ottawa has sacrificed two Queensland primary industries. Malaya has been given a concession in respect of pineapples, to tho detriment of the Queeusland producers. The great value of the concession that they enjoyed under the Canadian treaty has now been lost. Before the Canadian treaty was entered into, our exports of canned pineapple amounted to 360,000 lb., but after it had been in operation for three and a half months, those exports increased to 3,300,000 lb. That treaty conferred a wonderful benefit upon the pineapplegrowing industry of Australia. Strange to say, the Australian delegation agreed to forgo that concession in favour of Malaya. The Minister for Trade and Customs (Mr. Gullett), recently stated in this House that “ the Australian delegation undertook to raise no objection if Canada reduced the duty of three centals per lb. against Malayan pineapples, to one cental per lb.” He therefore cannot say that he had no opportunity to object to the cancellation of the concession that we received under the Canadian agreement. He cannot say that Canada took this action against the wish of the people of Australia, and its representatives at. Ottawa. Then again he stated that “ the delegation made the concession with reluctance” and that “ the Malayan product was definitely inferior to the Australian.” Let me point out that this concession is also being made to Fiji, whose product is equal to that of Australia. The American interests there are determined to exploit black labour, to the detriment of the product grown in White Australia by producers who have engaged in this industry because of the prospect of returns as a result of the Canadian agreement. In return for the cancellation of this concession, we are receiving from Malaya a concession on brandy. But that will not compensate for the loss of an industry which is of considerable value to Australia, and provides a livelihood for many people in Queensland. The special banana concession that we are giving Fiji will enable that country to import into Australia 40,000 centals of bananas. The importation of that quantity of bananas into Australia will have a detrimental effect upon the banana-growing industry of Queensland, because of its effect on market prices and particularly in view of the fact that plantings this year enormously exceed all previous plantings. The Australian delegation also conceded to the West Indies a preference of 5s. a gallon on rum. Of the four distilleries in Australia, three are in Queensland, and the Queensland distilleries are using Australian raw materials for the production of rum.- This is claimed not to be a great concession, but let me point out that with the existing excise of 30s., the protection against the West Indian product will now be only 6s. a gallon. These three concessions are detrimental to the producers of Queensland, and my motion provides for their cancellation.
In tho second paragraph of the amendment that I desire to submit, I direct attention to the right of this Parliament to develop approved secondary industries.
The principle is assailed by article 12 of the agreement, which provides /that His Majesty’s Government in the Commonwealth undertakes that no preference shall be imposed, and no existing duty shall be increased, on United Kingdom goods to an amount in excess of that recommended by the Tariff Board. I am not prepared to hand over to the board my rights as a member of this House; I have not sufficient confidence in the board to do so. I’ fear that its recommendations regarding Australian industries thai should be fostered may be similar to those made in its recent report concerning Diesel engines which provided for free entry of engines of 100 horse-power and over from Great Britain. Only two or three years ago, after consultation with the Government of this country, Walkers Limited, of Maryborough, decided to search the world for the best engine to manufacture in Australia. That firm has been manufacturing locomotives for various governments in Australia, and it has established a reputation for excellent work. It built for the Commonwealth Government the only largo trading vessels that have been constructed in Australia. For over 50 years its sugar and mining machinery has been the pride of Australia. The depression having affected its operations, this firm made inquiries with a view to a new line of manufacture. It approached the Commonwealth Ministry for tariff protection, and was promised that it would receive protection when it was ready to manufacture a certain engine. It sent two engineers to Great Britain, and at its own expense, allowed them to remain in the workshops of the parent company for twelve months, and subsequently expended some thousands of pounds on improvements. As soon as the firm began to manufacture in Australia the engine selected by it, the great army of importers in this country came together and determined to kill the enterprise. They advised intending purchasers not to buy these Diesel engines, and succeeded in having their request for a reduced duty referred to the Tariff Board.
Under the 1921-28 tariff, an engine of moi-e than 100 horse-power carried a duty of 45 per cent. British, 55 per cent intermediate, and 60 per cent, general. Under the Scullin tariff, the duties were 55 per cent., 65 per cent., and 75 per cent.; but as the result of the board’s recommendation, these engines have now been placed on the free list, and their manufacture in Australia is doomed. The cost of starting this work has been lost to Walkers Limited, because the Tariff Board has not taken into consideration the need for encouraging young industries.
– On what sound ground did the board base its recommendation ?
– On no sound ground except that the industry had not been fully established. Engines up to 50 horse-power are manufactured in Victoria, and some concession regarding them has been granted, the duties being 45 per cent. British and 60 per cent, general.
– Do not Walkers Limited manufacture smaller engines?
– No; they have always confined their activities to large engines. I congratulate the Victorian manufacturers on having a reasonable amount of protection in the manufacture of engines up to 50 horse-power; but it is manifestly unfair that the Tariff Board should submit a recommendation which wipes out a. young industry in Queensland. I am not prepared to agree to the agreement not to raise a duty against British goods to an amount in excess of the Tariff Board’s recommendation as provided for in article 12. Therefore, I ask the House not to accept the agreement in toto, but to support the Leader of the Opposition in his desire to delete all words after “that”. Then I shall have’ an opportunity to submit the amendment that I have indicated.
In the third paragraph of my amendment, I urge that certain reservations be made for future trade with foreign countries. Under this agreement we practically renounce all our tariff rights, without allowing for the possibility of developing useful trade with other friendly countries. I have shown that Canada and Australia will have a surplus of over 130,000,000 bushels of wheat, apart from the quantity that Great Britain can consume. Where are
Ave to dispose of that and other surpluses unless in foreign countries? I realize that Great Britain has difficulties, and I am prepared to admit that, from the British point of view, the agreement is a reasonable one, but Australia cannot afford to sacrifice its interests by leaving no opportunity for future trading arrangements. . “We must consider the destiny of our young country. Industrial expansion, primary and secondary, must be looked to for the purpose of providing employment for the people, building up the national finances and increasing our population.
– I feel constrained to commence my speech by expressing regret at the attitude of certain honorable members of the Opposition, who seem to imagine that if they cannot convince by logic and reason, their next best course is to abuse their opponents. This, I think, is a particularly reprehensible practice, because the Australian delegates to the Ottawa Conference cannot be present, and are, therefore, unable to defend themselves against the attack that has been made on them. I believe that those members of the Opposition who have indulged in this campaign of vilification and abuse, know in their hearts that what they say is not correct. There is considerable consolation, however, in the knowledge that this abuse is really a measure of the weakness of the case presented in opposition to the bill. The Ottawa agreement is of such a comprehensive nature, and brings within its ambit so wide a range of industries and so vast a field of enterprise, that it is not possible for individual members to deal in detail with more than a fraction of the many and complex phases of the agreement. Therefore, I propose to confine my observations to some of the more important principles to which the bill gives effect, and then to reply to statements made, and to comment on the attitude of certain honorable members regarding the meat industry. I shall then endeavour to deal briefly with the probable effect of the agreement on the scope and diversity of our rural industries generally.
It is well for us to realize, as the Minister for Trade and Customs (Mr. Gullett) pointed out, that this agreement has been fashioned with the object, mainly, of assisting our primary industries, and that our producers have for many months, rightly or wrongly, regarded the Ottawa Conference as the one ray of hope in the gloom which has surrounded the rural industries throughout Australia for the last two or three years. In view of these facts, it is highly desirable that honorable members should estimate, as accurately as possible, the probable effects of the agreement upon rural industries. It has been the habit of primary producers, unfortunately, I think, to make their commitments and to base their calculations on the statements and promises of governments and members of governments. This is a reason why honorable members of this Parliament should take every care not to discuss this agreement on false premises, otherwise, they may “ unintentionally add very greatly to the heavy burdens that our primary producers are carrying.
The Australian delegation at Ottawa did very well by Australia. In my opinion, it was one of the best delegations that ever left our shores on a mission of this character. “Its composition itself showed that it was generally recognized that great difficulties would confront the conference. The difficulties of the Australian delegation were considerably # increased by the fact that such a high tariff Avail had been built round this country, and that our duties are variable only by act of parliament.
The greatest achievement of the
Ottawa Conference Avas the recognition by all parts of the Empire of the necessity for a common basis of agreement on questions of trade and tariffs generally. It Avas realized that this Avas essential, not only to the economic redemption of our people, but also as a vital link in the bond of Empire. That bond is not merely one of racial sentiment and the inspiration of lofty ideals, but also one of mutual material advantage and common protection. The Empire can be held together only by the strengthening of that bond Avith treaties within the Empire for the mutual advantage and protection of its people. The declarations which are the basis in this agreement transcend in importance any advantage that may have been obtained for particular industries. It was essential that a sound foundation should be laid upon which all our industries could stand together. The acceptance of this common basis for trade and industry will make for the solidity of the Empire as an economic unit. After all, the advantages that may be gained by particular industries are merely the adornments of the broad and solid foundation upon which our future statesmen may erect a mighty edifice of intra-empire trade on preferential lines. That task is so colossal that the delegates at the Ottawa Conference could only hope to begin it. The full effects of their work will become apparent only in the course of years. I believe that the experience gained at Ottawa by the delegates of the Commonwealth of Nations will make practicable the formulation of much more satisfactory treaties in the future. The detractors of this agreement should bear in mind that this is the first big venture of the Empire into the sphere of preferential trade. Previous efforts of this kind have invariably failed.; but this effort has been successful to a large degree. This is a great imperial experiment, which aims at the exploration to the fullest possible extent of all trade possibilities within the Empire. Our highest hopes and expectations may not have been realized at Ottawa. Candidly, mine have not been reached. But I do not think any body of men who have done anything really great have been entirely satisfied with the results of their efforts. That this agreement is not what we desired it might be is a reason why we should do everything possible to show that we are prepared to observe its provisions in the hope that we may be able at a later date to improve them.
The Ottawa agreement has been attacked along four main lines. It has been argued, first, that it will restrict, in some measure, the power of Parliament to deal with the tariff ; secondly, that it will give more to Great Britain than she will give to us; thirdly, that it will remain in force for too long a period ; and fourthly, that it will result in the lifting of foreign duties instead of in the reduction of British duties. This last point has been strongly emphasized by the Country party.
The first objection, which has been taken mainly by the members of the
Opposition, would he regarded more seriously perhaps if Parliament in the past had really determined the rates of duty; but that has not been the case. We know very well that the Scullin tariff was validated for three months only as an emergency measure, and that previous tariffs have been validated under similar circumstances. The tendency in recent years has been for Ministers of Customs to express their own fiscal ideas, which have often been extremely bigoted, and then to take every possible precaution to prevent Parliament from tampering with the schedules which they have tabled. This fact greatly weakens the argument that Parliament should not hand its authority over to some other body. Our experiences of recent years in connexion with tariff making have driven the opponents and adherents of high tariffs into two armed camps. Although the power of Parliament to deal with the tariff will be limited to some extent under this agreement, ‘we are assured that rib alterations will be made in the tariff until a thorough investigation has been made and the claims of all parties carefully considered. This is the principle which only those who object to an impartial hearing of a case should take exception to. No sportsman should object to the hearing of a case by an impartial body of men. I believe that this provision of the agreement will cause tariff matters to be removed from’ the arena, of political strife, and enable duties to be determined in an atmosphere untainted by political partisanship. Those who desire to see the secondary industries of Australia efficiently conducted should not object to the fixing of protective duties by an impartial body. I arn glad that the agreement provides that the Tariff Board shall satisfy itself that there is a reasonable measure of efficiency in our industries. It is also satisfactory to know that our industries will meet similar British industries on the basis of fair and reasonable competition. Certain honorable members of the House have objected to this provision, but what exactly do they want? Do they desire to preserve the whole of the Australian market for Australian-made products? Is their ultimate aim the complete exclusion of British manufactures from Australia? That this is their attitude is being shouted from the housetops. These honorable gentlemen will never be satisfied until a take-all and give-nothing treaty has been made.
This brings me to the second point on which the agreement has been attacked. It has been alleged that we have given away too much. It may a’ppear on the face of things that there is justification for this criticism. Roughly speaking, the average preference which we are granting in respect of all the goods we import from Great Britain is l’7j per cent., while the average preference Great Britain is granting in respect of all the goods that she takes from us is 12£ per cent. I suggest that those who are inclined to criticize the treaty on that ground should bc reminded that Britain has never placed any obstacle in the way of the fullest exploitation of the British markets by Australian producers. Her markets have always been open to Australia, without lot or hindrance. But for twenty years, Britain has not had free access to the Australian market. A section of the people of Australia would place every possible obstacle in the way of British goods entering this country. In addition to allowing Australian products free access to the British market, Britain has established the Empire Marketing Board, which she has subsidized to the extent of £100,000 per annum. That body aims at increasing the sale of Empire products in the British market in competition, not only with foreign goods, but also with British goods. As a result of the work of the Empire Marketing Board, and the assistance given by Britain to enable research to be made in various directions to the benefit of Australia, we are to-day on the threshold of a new era in the low temperature transportation of meat, as evidenced by the success of the recent, shipment of chilled meat to England in the Port Fairy. Britain has incurred expense in connexion with the sale of Australian goods in the British market, even in competition with British goods, and there has been little complaint by British producers. With certain sections of the community, it is almost a religion that the Australian home market shall be kept sacred to the Australian manufacturer or producer. When the tariff, primage and other duties, and exchange and transportation costs, are taken into account, many British goods have to face charges equivalent to 100 per cent, of their cost, before they reach the Australian consumer. Should any one complain of that, there is always the so-called patriot who is willing to point a pious finger at the tariff schedule, and say that we give Britain a 15 per cent, preference over the foreigner. Would those who speak in that way like Britain to treat Australian goods in the British market as we treat British goods in our market? If the British Government decided to impose a duty of, say, 50 per cent, on Australian butter, meat, or dried fruits, there would be an outcry by Australian producers even if foreign producers had to meet a much higher tariff barrier.
The Scullin tariff thus stands revealed as an outstanding example of national selfishness - an economic monstrosity. A realization of the difficulties which confronted our delegates at Ottawa should make us appreciate the wonderful work that they did in overcoming them.
The Opposition also objects that this agreement is to be binding for five years. The honorable member for Wakefield (Mr. Hawker), and the honorable member for Wentworth (Mr. E. J. Harrison) made it clear that if we are to obtain any benefits at all from the agreement, there must be stability and continuity in regard to it. .Industries which might be helped by the agreement should bc given sufficient, time to adjust themselves to the new conditions, so that they could take the fullest advantage of the concessions offered. Honorable members on this side appear to have overlooked the fact that a number of industries, particularly our small primary producing industries, will gain much from the agreement, in the future, if not immediately, and, naturally, Opposition members would not mention it even if they realized the fact. The workers in those industries are probably the worst paid, as well as the most hard-working, employees in any industry in the Commonwealth. It is clear, therefore, that, in objecting to this agreement, the Opposition is expressing its objection to better conditions and better pay for men who now, in many cases, live in bark huts, enjoy little society, and are engaged in monotonous labour for long hours each day at small rates of pay. The effect of this agreement will be to make their lot a little easier, and I am surprised that the Opposition should object to an agreement which offers them better conditions. The attitude of the Opposition suggest’-1, that it is concerned only with unionists who contribute money to party funds. In the opinion of many honorable members opposite, a worker who is unable to find the money with which to pay union fees is not entitled to. any consideration at all. Honorable members may not realize it, but that is the effect of their opposition to the provisions of this agreement, which will benefit our minor exporting primary industries.
The Country party objects that the agreement raises the foreign tariff instead of reducing the British tariff. I confess to a great measure of sympathy with the Country party in this connexion. When, about nine months ago, I took my seat in this Parliament, I was full of enthusiasm for a downward revision of the tariff.
– The honorable member made an excellent maiden speech.
– One of the big sorrows of my parliamentary career so far has been that I have been obliged to ‘watch those fires of hope that burned so brightly in my breast, gradually die down, until now there are almost only the ashes of despair. That has been a great disappointment to me, but when I reflect that the Country party joined a previous government with similar hopes, but notwithstanding its strength and its representation in the Ministry itself, wa3 unable to prevent the tariff barriers from rising, I am forced to the conclusion that reforms are not easily obtained. Thus it would seem that should the honorable member for Swan (Mr. Gregory) ever become Minister for Trade and Customs, the fiscal metamorphosis would be wonderful. Because of my strong conviction regarding the tariff, I feel constrained to support the amendment which, I understand, the leader of the Country party (Dr. Earle Page) will bring forward in committee. Neverthe- less, I sympathize with the Government in the difficulties which a downward revision of the tariff present.
Probably the most disappointing feature of the Ottawa agreement is its failure to obtain any real benefit for our major exporting industries. As I understand it, our wool and wheat industries will receive no direct advantage from the agreement. Opposition members have said that direct advantages should have been obtained for those industries by our delegates; but they have not suggested how that could have been achieved. The statement of the Minister for Trade and Customs that the production of wheat within the Empire is some 200,000,000 bushels in excess of requirements makes it evident that any material advantage to our wheat industry from the agreement is impossible. That remark applies with even greater force to our wool industry because, if my memory serves me right, the Empire consumes less than half of the wool which it produces.
The meat industry is in an entirely different category, because the Empire does not produce anything like the amount of meat that it requires. That is proved by the fact thai each year Great Britain is obliged to import approximately 1,250,000 tons of pig meat, mutton, lamb and beef from foreign sources. So that there are tremendous possibilities for the development of a preferential trade in meat with Great Britain. Our meat industry is a key industry. Describing it in cricket parlance, it is the middle stump between the other two major exporting industries, wool and wheat. We all recognize that its stability is essential for the welfare of the wool industry; that unless woolgrowers can get rid of their surplus stock at a reasonable price, the industry cannot survive. But if they are able to dispose of their surplus stock at a reasonable price, costs are reduced, and they can carry on even with lower prices ruling for their wool. The same applies, only in a lesser degree, to the wheat industry.
I have been at some pains to obtain correct statistical information regarding the meat industry, and from it I have formed the conclusion that our chances of obtaining some real benefit from the Ottawa agreement in this respect should have been particularly bright, for Australia offers a much better preferential trade to Great Britain than does the Argentine, the chief source of Britain’s meat supplies. The following figures, which I obtained from the customs officials, convey a correct idea of the respective treatment of Britain by the Argentine and Australia in regard to preferential rates of duty: -
The comparison definitely favours Australia. In addition, this country buys approximately twice as much from Great Britain as does the Argentine. That is proved by the figures quoted by the Minister for Trade and Customs, showing that in 1927 Australia imported from Great Britain goods to the value of £67,000,000, as against Argentine’s £33,000,000 from the same source. I feel, therefore, that Australia has a special claim to a higher measure of preferential treatment than the Argentine. Britain’s annual consumption of meat totals 3,200,000 tons, of which she buys 1,250,000 tons from foreign sources, and from 250,000 tons to 300,000 tons from the dominions, the balance being home grown. When the agreement is operating fully, Britain’s annual importation of foreign meat will be reduced by 144,000 tons, as follows: -
The figures represent estimates made by the Minister for Trade and Customs. That represents a reduction of 4.5 per cent. in the total meat that will be available for consumption in Great Britain. I ask honorable members to view the matter fairly, and say whether they really think that, in view of the glut which exists on the British market, which is unparalleled in the history of the trade, a reduction of 4.5 per cent. in the available supplies will have the effect of increasing prices or in any other way giving a great measure of relief to dominion producers? The arrangement assumes that home con sumption and dominion production will not be increased. I do not think that we are safe in making that assumption. I know that the criticism will be forthcoming that the dominion production has actually decreased. If it is a condition of the rehabilitation of the meat market in Great Britain that dominion supplies shall be considerably curtailed, the meat agreement is most unsatisfactory to dominion growers. There is one thing which we should insist upon above all others, that our industry shall be absolutely unfettered, and allowed to develop to the fullest possible extent. Because of that I cannot find it possible to applaud the provisions of the agreement which relate to meat.
– New arrangements have just been made with the Argentine regarding the supply of meat.
– I have read them. I understand that it is a provisional arrangement applicable only to the last two months of this year. If it should be possible to prolong it for the period of the treaty, one cannot do otherwise than applaud the arrangement, because it is necessary to effect a reduction of from 15 per cent. to 20 per cent. in the supplies of foreign meat made available to Great Britain before there can be any real appreciation in our prices, or extension in our trade.
We must all approve the provisions of the treaty which provide preference for our butter, cheese, eggs, flour, dried fruits, &c., for they are of inestimable benefit to those Australian industries. Their chief value lies, not so much in the possibility of providing higher prices, as in affording stability by providing sure markets for our products. But it should be remembered that while we have attempted to raise the prices of our goods, nothing has been done to increase the purchasing power of the British public. If that is not done, we cannot reasonably hope to obtain higher prices for Australian goods.
The treaty having been signed, it rests with the Commonwealth to uphold the national obligations and the great responsibility which this treaty places upon us, by honouring it in the spirit as well as the letter, and, under its sheltering influence, doing everything possible to encourage the industrial efficiency and national development of Australia.
– I rather disagree with the contention of the honorable member for Macquarie (Mr. John Lawson) that the debate has not been dignified. Speaking generally, it has been of a high order, and I hope that I shall not lower it in any way.
The first thing that appeals to a person approaching the study of a subject of this treaty is its importance, and its possible and far-reaching effects. For it affects the fundamental basis of the future economic well-being of our country. I have never, in my life, read a report of the delegates of any conference that has been received with such general dissatisfaction as this has. In no country has it been received with anything like unanimous satisfaction. I do not suggest for a moment that that is the fault of any of the delegates who attended the conference. They were set a task which was impossible of accomplishment. No one who could visualize the economic position of the world, or who knows anything about its history during the last decade, could imagine any result other than that obtained. For months prior to its assembling it was regularly predicted by leading statesmen of the world that the conference would fail. All fiscal or other efforts to adjust our economic conditions or to relieve the world depression must fail unless there is a release of additional credits to bring the consuming power of the people closer to our total production. It was suggested that there should have been some discussion of the monetary situation before the Ottawa Conference was held. If that is so, it is unfair to criticize the efforts of any of the delegates, even if we regard the results of the conference as almost futile. If they failed, it was due to the almost impossible task they were sent to accomplish.
We should endeavour to analyse the world position before we try to determine the actual results of the Ottawa Conference or decide how we shall vote on the agreement. The honorable member for Gippsland (Mr. Paterson) suggested that the world’s markets are glutted with a surplus of goods of all kinds, and the honorable member for Wentworth (Mr. E. J. Harrison) spoke of the immense increase in productivity as the result of the application of science to industry. These things have to be taken into consideration in discussing the possibility of satisfactorily relieving the world glut of goods that is being attempted under this agreement. The statistics which I have been able to’ gather prove that from 1925 to 1929, there was an enormous yearly increase in the productivity of the industries discussed during this debate. Year after year the development in large primary producing countries increased by leaps and bounds. That wonderful increase in productivity brought in its train the difficulties with which the world is now confronted. Strange to say, this increased productivity has proved to be the whip by which we have been scourged rather than the blessing it should have been. Efforts were made to stem the tide of increased productivity which should have been, of benefit to the world, and from 1929 to 1932, there has been a substantial falling off in the value and quantity of the goods produced. Yet on the other hand, millions of quintals of wheat and huge quantities of all kinds of other primary products have been produced in excess of -our ability to consume them and are now surplus. Output in many directions has been curtailed, but instead of the depression being relieved it has become intensified. In 1932 the world’s economic position was worse than it was in 1930 or 1931. In addition to the successful efforts to reduce the output of all primary production - speaking from a world’s view-point - all kinds of conferences and organizations were called together with a view to regulating output. That was done by allowing plantations to go to ruin, by withholding goods which were not in demand, and releasing those for which there was a market. These organizations met with success in some countries, in some of which penalties were imposed upon those who produced more than was necessary, and compensation was paid to others who were producing goods of which there was an insufficient supply. In spite of all these efforts to adjust trade the position has become worse, and it is now more serious than it was during the last year or two. In spite of the falling off in output of the primary-producing countries during the last two years, the stocks of wheat, meat and other primary products on hand to-day are larger than they have ever been before in the world’s history. The sellers of primary products have to offer their commodities in competition with these stocks and with those which have yet to come in. These are a definite menace to primary producers all over the world. I cannot agree with the members of the Country party and the supporters of the Government who have expressed the hope that some relief will be afforded to the primary producers as a result of this agreement. It seems to me that the efforts to re-arrange the selling of products of all countries which have to be sold in the -open market will not reduce the total quantity to be disposed of or create a greater demand for them. Such a reshuffling may be a temporary benefit to one group, but it will be a disadvantage to others. In view of the atmosphere in which the conference met, one cannot hope that the results will be as beneficial as some think. I direct the attention of honorable members to one of the most arresting statements made by the Minister for Trade and Customs (Mr. Gullett), who, in moving the second reading of the bill, said that one of the striking facts that he and other delegates had learned during their consideration of economic problems when abroad, and especially with respect to primary production, was that the world’s markets have shrunk to a very large extent. He said that the world had become protective in policy, and’ that other countries are surrounding themselves with fiscal barriers. We cannot afford to be out of step with those countries.
Before giving my reasons for opposing the agreement, I should like to refer briefly to the subject of preferences. I have always understood that preferential trade with Great Britain meant that Australia should give preference to British manufactures over foreign manufactures in the goods we purchase from abroad. If we carried out that undertaking to the full we could not do more. I do. not think that the term “ preference “ ever meant - unless some new interpretation has been adopted - that we should allow British manufactured goods to enter Australia to successfully compete with our own manufactures. I am not objecting to preference being given to Britain in the direction I have mentioned, and I hope it will be continued even” to a greater extent. But I do not agree that we should allow the Tariff Board, with the assistance and advice of any other authority, to determine the duties to be imposed to enable British manufacturers to successfully compete with Australian industries. I was pleased to hear the honorable member for Wakefield (Mr. Hawker) say that he believed that every honorable member desired to give preference to Great Britain against foreigners. I have sufficient British sentiment and patriotism to agree with what the honorable member said, but I do not admit that we should allow outside countries, even British countries, to determine our internal policy. I believe that the Australian people have sufficient intelligence to determine what Australia’s economic destiny should be, and the methods by which its development shall be undertaken. In determining whether to vote for the whole or a portion of this agreement, I shall be guided by a consideration of what is best in the interests of Australia and the Australian people. There is no sentiment in trade. The first duty of Australia is to so determine their fiscal policy that this country may speedily become self-contained and self-reliant. In determining our fiscal policy we should also take our geographical situation into consideration. Surely Australia’s geographical position, its isolation, and its distance from the other seats of western civilization are further reasons why we should seek to develop both our primary and secondary industries as quickly as possible so that we may become self-reliant and selfcontained. Our only consideration should be what policy is in the best interests of. the great majority of the Australian people. I qualify that statement by saying that my study of the economic situation, as it affects Australia and the world generally, has led me to the conclusion that the best way of strengthening the Empire, with its many units, and of helping the people not only of Australia but also of every country in the world, is to build up our own industries, to raise the standard of living in our own country, and to make ourselves self-reliant and self-contained so far as we can. In no other way can we become a useful link in the chain of Empire. I make no apology for saying that, when considering this agreement, I keep my mind fixed upon its probable effect on the industrial and social development of Australia. I know that this attitude is not likely to meet with the approval of some members of the rentier class overseas. “We should remember, however, that Australia can import only as much as she can pay for with her exports. That does not apply to Great Britain, which is in a different position from any of the dominions. Great Britain imports goods to the value of hundreds of millions of pounds more than she exports, but she is able to do this because she pays for her imports with the interest received on the enormous sums of money she has lent to the dominions and to other countries. Great Britain is a money lender, and earns hundreds of millions of pounds yearly in this way.
I am in agreement with most other honorable members in thinking that we should do everything possible to assist our primary industries. I do not take a short-sighted view of the value of those industries. I believe that we should continue to develop them, but I suggest to the direct representatives of the primary industries that, in seeking to obtain advantages from international trade agreements, they should not overlook the value of our own home market. There is danger that, in chasing the shadow, they may lose the substance. We should do nothing detrimental to the development of the home market by trying to gain advantages overseas which, after all, may prove illusory. It has been proved that the primary products of Australia can more than successfully compete with those of other countries. Our primary producers will continue to get their share of the overseas markets, but they cannot hope to get anything more than their share. In the long run they must depend largely on the home market.
– Not for wool, surely.
– I am speaking generally now, but, even if. we include wool, half the primary production of Australia - determined by value - is consumed in Australia. If we exclude wool, the proportion is two-thirds, while if we exclude wheat also, nearly all our primary production is consumed locally. Many of the items upon which Britain undertakes to grant us preference are of little significance, because practically all of them are consumed in Australia. It is true that we export, at the present time, a considerable portion of our butter, but that, to some extent, is because home consumption has fallen off during the depression. If honorable members study the figures, they will learn that the home market has suffered as a result of the depression to a greater extent than has the overseas market.
– Measured in value or in volume ?
– In value. I know that fluctuating prices render it difficult to make an effective comparison. In normal times, when our standard of living was much higher than it is now, and the percentage of unemployed was less, the home market was worth more to primary producers’ than it is at present. It is of no use shutting our eyes to the fact that the primary industries cannot hope for a great deal more from the overseas market. The countries of the world are becoming more and more selfcontained. They are erecting tariff barriers against imported goods, and are increasing the volume of their own primary products. They are becoming better able to supply their own wants, due to the mechanization of the means of production, and the application of science to industry. This process has been carried on in other countries as well as in our own, so that there is now less demand than before for our surplus primary products. It is not a matter of sentiment or of price, so much as the absence of demand. In the long run, prices in each individual country are governed by world parity prices, and even the advantages the dominions are supposed to reap from the Ottawa agreement are determined and limited by world parity values. It will probably be found before long that some of the countries with a low standard of living can produce so cheaply that they will be able to sell their goods on Empire markets, notwithstanding the preferences provided for in this agreement. I do not suggestthat we should overlook any chance of increasing our overseas business, but I do say that it would pay us better to concentrate on developing our home market. Other countries are doing this, and we must follow suit. “We cannot hope to determine the conditions under which other countries produce and dispose of their commodities. Every country has the right to decide its own policy in these matters, and we should not abandon our right to do the same. Reference has been made during this debate to what is happening in Russia, and it may be helpful to quote an extract from a recent publication by G. H. D. Cole, entitled Economic Tracts for the Times, in which he discusses the Russian policy of dumping goods on the markets of other countries. He says -
There are many complaints about Russian clumping. Russia, it is said, sells her exports under cost price. Yet the Russians do not go bankrupt, or have to stop producing. Why is this?
Russia’s foreign trade is a public monopoly. This makes it virtually barter. The Russians sell their exports for what they can get for them in foreign money, irrespective of what the costwas in Russian money. They then buy with the foreign money as much as they can afford to buy of the things they need to import, and price these imports in Russia high enough to earn the costs of the exports for which they have been exchanged.
This shocks the rest of the world, but it is sound sense all the same. It is how most countries will have to conduct their foreign trade before long.
It is not necessary to agree with everything the writer says in order to appreciate his contention that every country has the right to determine its own policy in regard to these matters.
Sitting suspended from 11.45 p.m. to 12.15 a.m. (Friday).
Friday, 11 November 1932
– I wish to show by quotation, the impossibility of our making further inroads on the international market. Cole, in his last book, refers to the world glut in the following terms : -
There is a world glut of wheat. Accumulated stocks are the largest ever known, and are being held deliberately off the market. Wheat prices have fallen to a point which threatens ruin to the growers all over the world, and the holding of stocks does not avail to check the fall. Yet in China, where there has been a great famine owing to flood, millions of people are starving, but they cannot afford to buy the world’s surplus wheat. Germany, compelled to find huge sums for reparations and interest on borrowed money, has to restrict imports in order to build up an export surplus. The Germans have to take to rye bread to reduce their imports of wheat. The wheat-growers, getting less for their wheat, have to buy less manufactured goods, whose prices have fallen less, and this creates unemployment in the industrial countries.
The World Economic Survey, 1931-32, which I received from the League of Nations Office, Geneva, only last week, gives the exact figures. Under the heading “World Stocks of Important Agricultural Commodities, 1925-31,” it shows that the stocks of wheat were as follow : -
It was in those years that the attempt was made to reduce the output.
This publication says -
The stock of wheat is the largest in the history of the trade, and represents nearly a fifth of the total world crop in 1930-31.
Other commodities are dealt with, but it is to wheat that I wish particularly to refer. There would seemto be only a very slender hope of getting much more of our wheat, meat, or even wool on the international market, beyond an orthodox increase as the result of an improvement of the world-wide depression. But the position will not be even temporarily rectified merely by arrangements such as that arrived at at Ottawa.
The honorable member for Gwydir (Mr. Abbott) spoke of the. great burden of interest which is breaking the backs of the primary producers of Australia. I agree with his contentions, and suggest that in that burden is to be found the genesis of our troubles. Cole, speaking from the English point of view, - although it also affects Australia - says -
Our policy of deflation had apparentadvantages to us as a great creditor country. It compelled our debtors, Australia and others. who mostly owed us debts reckoned in our own currency, to pay us more in real things as the value of the pound went up. But it had far more serious disadvantages. In order to curry it through, the bankers kept bank rates high, and restricted the amount of credit.
Those who were members of this House when I made my maiden speech in it, may recollect that I then suggested that this action was purposely taken by the banks in Europe with a view to bringing about a period of deflation, so that the prices of commodities might be forced back to pre-war levels. I also argued that if prices were reduced as the result of deflation, the value of the return on money borrowed would be twice as great as it would be if they remained at the same level. At the time, it was suggested that that statement was based upon sinister beliefs and ideals, and that it could not be accepted. But all the world now knows that that actually is the position. The leading writers in England, like Cole, agree that the deflation has had its disadvantages. Cassels warned the Brussels conference in 1920, when deflation was first proposed, that once it was started, “it would grow like a snowball, until its momentum became so great that it would- be very difficult to arrest the downward tendency and induce prices to ascend, and the result would be a great wave of unemployment and depression, which would be most dangerous and harmful. Cole says of it - lt had far more serious disadvantages because in order to carry it through the bankers kept bank rates high and restricted the amount of credit, thus hampering industry and increasing unemployment. Moreover, as the value of the pound went up the burden of the national debt and of all fixed interest charges rose with it, putting a tremendous strain on our system of taxation and burdening productive industry with higher, real charges on all sorts of mortgages and debentures, as well as in bank interest. A huge addition was made by these means to the unearned incomes of the rentier classes and the results are now shown by the unbalanced budgets of all the countries of the world to-day.
The honorable member for Gwydir proved that it is the interest burden which is crippling primary producers and everybody else. Here is what Cole says in connexion with borrowing -
Borrowing is all right up to a certain point, and means always you must pay back what you borrow, and the conditions do not alter.
That is the orthodox view in regard to borrowing; you pay back what you contract to pay. But here, is the sequel, and it is responsible for our troubles to-day -
But to-day it has gone right out of bounds, and has been made impossible as a result of the fall in price levels, which makes the burden 100 per cent, greater than that which was bargained for. The world needs to wipe the slate clean, and the wisest mcn in all the countries are agreeing that although it would inconvenience a few, the needs of the many aro so pressing that such a course is inevitable.
I suggest that before there can be any national restoration in this or any other country, the monetary system must be tackled. We must endeavour to approximate the consuming power of the people with their purchasing power. We must try to bridge the the wide margin between our power to produce and our power to buy what wa produce, which makes stocks lie useless. Unless new credit is provided there is no hope of disposing of these stocks, because there is nodemand for them. The Ottawa agreement must fail because it will create no new demand for the products that we wish to sell abroad. It is hoped that, because of its organization, one group will temporarily gain an advantage over another ; but the totality of the demand will remain the same, and until there is an additional demand which will encroach on surplus stocks, there is no hope of any relief being afforded. I oppose the ratification of this agreement, because it will spell ruin to our Australian industries.
– The honorable member’s time has expired.
, - The honorable member for Melbourne Ports (Mr. Holloway) maintained a high level in his contribution to the debate. One may not agree with all the views he has expressed, but to a new member his speech was both interesting and informative.
It must he admitted that the Ottawa proposals rank among the most important trading proposals that have ever been placed before the people of Australia. This agreement will have a favorable effect upon our primary industries, as well as upon trade generally, and the result of its application will be to increase employment; consequently, its consideration should be approached from a national view-point. All trading arrangements, whether they he between individuals or between firms and governments, must be approached in a co-operative spirit of give and take if they are to be brought to a successful termination. No matter how we might wish it, we cannot have a “ one way “ trading arrangement. In this Parliament, as well as in the British Parliament, and in those of the other dominions, there is a tendency to cloud the virtues of these proposals in the mists of party politics. Analysing the speeches of the delegates to the Ottawa Conference, one realizes the difficulties that were encountered before this agreement was effected. It seems imperative that we should extend our trade overseas if we wish to maintain our progress and prosperity. Australia is particularly favoured by the fact that it is a country in which primary products can be produced in greater volume than in any other country in the world. Our very life as a nation is dependent upon the maintenance of our overseas trade. There are two great fields in which that trade may be developed, that of the Empire, and that of the East. Our Eastern trade is in its infancy; we have only touched its fringe. Yet there are signs which indicate that the people of Australia are beginning to realize what possibilities there are in it. Only last week business men in Melbourne and Sydney agreed to send to the East an advertising show boat containing samples of Australian primary and secondary products - a project that is worthy of our strong support. It is quite possible that in the near future our trade with the East will be of even greater importance than the Empire trade. which is probable as a result of this agreement. The foundation of that Empire trade, however, has already been laid, and we have only to build on it. Doubtless the existing world economic troubles paved the way for an agreement such as this; but a greater factor was the generous preferences that for the last 20 years have been extended by Australia to Great Britain. It is essential to get better prices for our products, and to that end it is most important that we should arrange a trade treaty with Great Britain. The United Kingdom market influences world parity ; its prices have an important bearing upon those in Australia and in foreign markets, and if we succeed in getting better prices in it, the values of primary producing properties in Australia will be enhanced, credits will be extended, and trading generally will benefit. In reviewing the concessions made in the Ottawa agreement, one finds that Australia has benefited to a far greater extent than any other dominion, having regard to the large field of primary production that is covered. In my opinion the Australian manufacturing industries are adequately safeguarded under the agreement. The Government has been criticized for declaring that customs duties will be based on the recommendations of the Tariff Board, but that is the policy on which the ministerial party was elected. The Government’s attitude in regard to preferences is justified; it is in the interests of Australian manufacturers, and in harmony with Australian public opinion. They are better protected by the raising of the duties against foreign importations than they would be by a lowering of duties on - British commodities. I am convinced that, after a reasonable trial of the agreement, the Australian people will find that it will yield many benefits. It will increase the market for our primary products and not lessen the protection of the secondary industries; indeed it will protect them against foreign imports, which are the greatest menace our manufacturers have to contend against. It has been rightly said that the agreement does not unduly clash with trade interests; for the sake of increased trading overseas it is worth a trial. As the Minister for Trade and Customs has said, although the agreement is not perfect it does not involve the sacrifice of any Australian interests.
The honorable member for Calare (Mr. Thorby) indicated last week certain anomalies which might arise out of the Ottawa proposal, and he referred to a combine which he said was operating against Australia by forcing up the prices of dental goods. By interjection I asked for the name of the firm; I did so in the interests of 25 reputable Australian traders and manufacturers engaged in this class of trade. The hon- orable gentleman has assured me that he referred to an overseas concern with foreign interests. I quite agree with the honorable member that high duties are affecting adversely certain goods used in the preservation of public health; that applies particularly to some lines that cannot be manufactured locally. Recently I introduced a deputation to the Minister for Trade and Customs on this matter, and I hope that at an opportune time the honorable member for Calare will support me .in pressing for a reduction of the duties to which he drew attention. The position in regard to dental goods is identical with that of certain other goods used in primary production and not commercially produced in Australia. The honorable member stated that the cost of dental supplies largely influences dental fees. That is not quite correct. On a conservative estimate the materials used represent not more than 10 per cent, of the fees charged by dentists. As a matter of fact such fees are governed mainly by the skill required and the time occupied in attending the patient. The honorable member may be interested to learn that dental fees to-day are lower than they were in 1914. I have that assurance from the Australian Dental Association, the official organization of the profession. This reduction is due to the fact that, owing to the abnormal conditions prevailing, dental attention has been regarded by the public erroneously as a luxury rather than a necessity.
In regard to the dental goods’ referred to by the honorable member for Calare, if he can adduce evidence in support of his statement, I shall be pleased to assist him to investigate the matter, with the experience in and the knowledge I have of the trade in Australia and overseas. His statement was very similar to the rumours that have been repeated frequently during recent years, and I have had an opportunity to investigate some of them. One line regarding which these allegations have been made is artificial teeth, which are made in America and Great Britain, and, to a lesser extent, on the continent. For economic reasons they cannot be made in Australia. The price of the principal line in the United States of America is 30 cents, equal to about ls. 3d. each. The cost of landing this article in Australia is over 100 per cent., including a customs duty of 20 per cent, ad valorem, 10 per cent, primage, 6 per cent, sales tax, and 5 per cent, for freight and shipping charges. To these may be added at least 60 per cent, for exchange - the actual rate to-day is 85 per cent. Yet the selling price is only ls. 9d., only 40 per cent, above the American figure. This is largely due to the competition in Australia, dental traders, as other traders, recognizing that it would be suicidal on their part to force up prices, because they would be put out of business. I shall be interested to hear the further observations of the honorable member for Calare on this subject.
I shall support the bill because I believe that the agreement will advance overseas trade and conduce to the prosperity and progress of Australia.
.- I sincerely regret the illness of the Minister for Trade and Customs (Mr. Gullett). I, too, have suffered a serious illness since I have been a member of this House, and I appreciate the sympathy extended to me at that time by my fellow members. I hope that the honorable gentleman will speedily recover his normal health, and soon resume his place in the House.
I shall oppose the bill because I consider that the agreement embodied in it will place Australia’s secondary industries at the mercy of overseas manufacturers, and will interrupt the advance of this country towards the ideal of being economically self-contained. Both the Prime Minister (Mr. Lyons) and the Minister for Trade and Customs have declared that the Ottawa agreement does not interfere in any way with Australia’s national policy of protection, but a comparison of the duties imposed in accordance with the agreement with those operating previously reveals a marked reduction, and there is an even more noticeable drop from the effective protective duties contained in the Scullin schedule. The British delegates at Ottawa were convinced that the Lyons Government had already slashed the Scullin tariff sufficiently to satisfy the manufacturers of the United Kingdom, and the recent flood of imports, which has swung the trade balance against the Commonwealth, furnishes clear evidence of the calamitous effect of the new fiscal policy. No less than 106 items of tho Ottawa schedule show drastic reductions from the rates imposed by the Scullin Government. These were studiously ignored by the Prime Minister and the Minister for Trade and Customs when explaining the effect of the agreement, but the following comparison speaks for itself : -
Many other items are similarly affected, and as I do not wish to take up the time of the House by referring to the whole of them, I ask for permission to incorporate them in Hansard.
– As it would be irregular at this stage to deal with items in the schedule, it would be quite improper to include any table of figures relating to such items, particularly if the time saved by not dealing with them would enable the honorable member to defeat the purpose of the standing order which limits the time for speeches on the second reading of a bill. There is also the further objection to the inclusion in Hansard of unread matter to which exception may be taken.
– The rates of wages paid in the iron and steel industry in Great Britain, compared with the rates ruling in the Newcastle district, indicate clearly that if the agreement is adopted in its present form, Australian industries will be subjected to unfair competition. I notice, also, a reduction of 5 per cent, in the British preferential tariff on sheet glass. Some time ago, following the protective duties imposed by the Scullin Government, the Australian Glass Company went to considerable expenditure to extend its business, and gave employment to a large number of men; but recently, according to press reports, owing to this Government’s tariff policy, it has been unable to meet competition from cheap-labour countries, and has been forced to close down on that section of its business. We pride ourselves on our high standard of living in Australia, to maintain which we need effective protection for our industries. The Minister for Trade and Customs, when introducing this bill, informed the House that’ the wages paid in many British industries were lower than those paid in similar industries in any other part of the Empire. Does the Minister imply that wages in this country are to be forced down to the same level, so that our industries may retain their hold on the Australian market? In the April issue of the Ministry of Labour Gazette, there appears an interesting article which shows that wages paid in practically all British industries are on the downward grade. I extract the following from the article in question: -
There was a decline during 1931 of tho average level of wage rates, exceeding that recorded in any year since 1922. In all the industries and services for which statistics are available, the changes in rates of wages reported to the department as operating in 1931 resulted in an aggregate net decrease of £406,300 in the weekly full-time rates of wages of 3,010,000 workpeople, and in a net increase of £5,150 in those of 47,000 workpeople.
The net result of all the changes reported was, therefore, a decrease of £401,150 in the wee”kly full-time wages of the workpeople in the industries covered by the statistics. It is estimated that the average decrease for all these industries, including also agriculture, was equivalent to over 2 per cent, of the wagerates in operation at the beginning of the year.
There also appears a table showing the numbers of work-people covered by the statistics who were affected by changes in rates of wages reported to the department as taking effect in each month of 1931, and the effect of the changes upon their weekly wages. It shows that a considerable number of work-people had their wages changed more than once during the year. The table is as follows : -
Another section of the report dealing with the iron and steel industry shows that the reduction of the weekly amount of wages paid in those industries aggregated £309,400 for the year. It also shows that boys from fourteen years to 21 years employed in the agricultural industry are paid at the rate of 8s. 9d., and adults at the rate of 2Ss. 6d. for a week of 48 hours in the winter and 50 hours in the summer. How can
Ave expect our primary industries to market their products against competition of that nature? Boys employed as stockmen, cattlemen, cowmen, horsemen, or bailiffs receive 16s. a week of 60 hours, and the rate increases yearly until adults get 35s. a week. For similar industries in this country, the basic wage for the same period ranged from £3 12s. to £3 18s. for a week of 44 hours.
The wages paid in the iron and steel industry in Great’ Britain are much lower than the Australian standard. Men employed in blast furnaces in England get from 6s. 6d. to 6s. lid. a day ; in the west of Scotland, 5s. 9d. a day; and in Staffordshire, 8s. to 8s. 6d. a day. Millhands are paid from 7s. 7d. to 8s. 2d. a day. In our Newcastle bloom mills, the wages range from lis. lOd. to 18s. 4d. a day, and in the rolling mills the men get 22s. 8d. a day. Surely honorable members can see that if this agreement is adopted, overseas competitiors in the industries to which I have directed attention will have a great advantage over our manufacturers. Freights on British manufactured goods will be comparatively light, as the vessels which bring them out will take back our wheat and wool. It is said that our primary producers Wil] benefit very materially from this agreement. We are already producing more wheat than Great Britain can consume. The surplus will’ have to be sold to other countries at whatever price is offering. The wheat that Ave export to Great Britain is to be sold at world parity price, which is generally accepted as the price prevailing at Liverpool; but Ave have recently had an illustration of how the bottom can be knocked out of the wheat market. I refer to the exporting of Russian wheat to the British and other European markets. At that time the British authorities displayed no Empirepatriotism or sympathy with the dominions. They were prepared to accept Russian wheat in preference to Australian wheat provided that it Avas offering at a lower price. Under the agreement, Great Britain is to buy Australian wheat at world parity price, but there is no saying what that price will he if Russian wheat is once again for sale on the European markets. After Russia has made provision for its home consumption, it Will not hesitate to offer its surplus on the markets of the world at whatever price it can get.
– Under the agreement Russia will be unable to dump wheat into Great Britain.
– Great Britain will be prepared to trade with Russia and to buy the wheat of that country so long as it takes British machinery in return. In 1931, Russia financed the purchase of £8,000,000 worth of machinery from Great Britain from the value of wheat exported during that year. I am not one of those who believe that an agreement arrived at by the representatives of Great Britain and the dominions can make the Empire a sort of watertight compartment among the nations of the world. The Empire is not self-contained. We require for our trade and commerce many commodities which cannot be obtained within the British Commonwealth of Nations, and one of those is motor fuel for transport purposes. We musttrade with nations outside of the Empire. There is, therefore, grave danger of retaliation on the part of countries which suffer as the result of the operations of the agreement. Preferential trade within the Empire will not solve our difficulties. The main problem confronting the world is the mechanization of industry and the consequent displacement of human power. In the United States of America millions of people are unemployed as the result of being displaced by the machine; yet the productivity of that country is to-day 25 per cent, higher than it was when unemployment was practically unknown.
This Government is balancing its budget at the expense of the poorer sections of the community. The Prime Minister (Mr. Lyons), in his financial statement today, showed clearly that the richer sections of the community are to have the benefit of remissions of taxation, and that no effort is to be made to restore to the poorer sections those reductions in wages and social services which have been forced upon them and which they can ill afford to bear. The people have been pulled by political parties this way and that way. They are becoming a confused mass surging and pushing in every direction in the hope of finding employment, peace, and prosperity. We find, as the months and years go by, deeper and deeper flows the tide of human failure, darker and darker gather the clouds of the great world storm which will shortly break against a system of society which permits, among full and plenty for all, humanity to go actually in want, hungry and without shelter. Discontent is seething in every country of the world. I warn this Government that it cannot hold the unemployed much longer in subjection. Many of them are practically without clothing, and they are not likely to remain quiet if no assistance is given to them before the winter sets in.
-The honorable member must discuss the bill.
– The units of the Empire have entered into the Ottawa agreement in an effort to solve our problems, one of which is unemployment. The more unemployment grows the less money is in circulation, fewer people are able to purchase goods and the turnover of the business man is consequently decreased. To balance his budget he has to dismiss some of his employees and thus add to the ranks of the unemployed. I refer honorable members to the ominous words of Mr. Montague Norman, the Governor of the Bank of England, that he “ was lost and knew not what to do.” Yet he is one of the great financiers to whom the world is looking for guidance. Mr. Lloyd George has said that when the pilot can no longer guide the ship it is time for the passengers to leave it. It is well known that the bankers are the real dictators of world policy, and what must be the position when one of the leaders of that gang of international financiers known as the Bank of England admits that he is lost, and knows not what to do?
– I remind the honorable member that he is not discussing the bill.
– If something is not done to relieve unemployment in the British Commonwealth of Nations, serious trouble will arise. We should make a better effort to solve the problem than a mere gesture of Empire reciprocity such as is involved in the Ottawa agreement. In return for a few concessions from Great Britain we are sacrificing our fiscal policy and most of bur secondary industries. That certainly will not solve our problem of unemployment. The promises of the previous Government and of this Government to provide employment for our people have not materialized. The people are still waiting for relief. I urge this Government to grapple seriously with the problem. The members of the party to which I belong have suggested many solutions, one of which is to make available through the Commonwealth Bank, credits to the State Governments and various semi-governmental activities such as shire and municipal councils, which have much work of a developmental and reproductive nature to carry out if funds were provided.
In introducing this hill, the Minister remarked that it must be always borne in mind that the working-class bread-eating millions of Britain are the lowest paid and the poorest white people in the whole of the Empire. Let us consider that statement. In the House of Commons debate on the Ottawa agreement it was contended that the preference given to Australian wheat will mean dearer bread in England. If that be so, how long will the agreement last?
– For five years.
– I doubt whether it will be observed for that period. If the party to which I belong obtains power this agreement, which is truly in accord with the English capitalistic policy for Australia, will be cancelled. The English capitalist desires that primary production in Australia should be encouraged at the expense of secondary production, or, in other words, that we should remain the wood and water-joeys for the manufacturers in the Old Country. We should be patriotic enough to build up Australian industries rather than industries in other parts of the Empire. One honorable member, in his speech in this debate, mentioned the word “ Empire “ on 22 occasions. Let us hear more about Australia, which is one of the finest countries in the world, and worth fighting for.
– The Empire includes Australia.
– Of course it does; but Australia is enough for me. I do not wish to know any other part of the Empire. When Captain Cook landed in this country he did us all a good turn.
– He was an Englishman.
– We are all of British stock, and we have done good service to the Old Country. We have paid for all we have had from Britain, and if it came to a matter of balancing ledgers, Australia could show a balance on the credit side.
The honorable member for Macquarie (Mr. John Lawson) regretted that nothing had been done at Ottawa for the major industries of Australia, such as wool and wheat, but did not the AttorneyGeneral (Mr. Latham) say in Great Britain that Australia was not asking for any preference on wool and wheat? The question was asked in this House whether the Minister had authority for making that declaration, but we could obtain no satisfactory answer.
Although the conference at Ottawa was an Empire gathering, no attention was paid to the important matter of the competition with the Australian shipping companies of the luxurious vessels of the Matson line, which are subsidized by the Government of the United States of America on their outward journey to the extent of ten dollars a mile, and are also protected by the fact that foreign vessels are not permitted to trade between Honolulu and American ports. Something should have been done at Ottawa to retain the trade between Fiji, New Zealind and Australia for our own shipping.
– I join with other honorable members in expressing great regret that the Minister for Trade and Customs (Mr. Gullett) is now paying the price of his devotion to duty during the Ottawa Conference. At the same time, I trust that he may have a speedy return to health, and be in his place again to see the consummation of the work in which he took so great a part. We should all appreciate the great service which his leader (Mr. Bruce) rendered to this country at the conference. Certain things that have been said to-night regarding him are thoroughly ill-deserved, and none more so than the use of the word “ chicanery Mr. Bruce attended the conference as the representative of a free nation amongst free nations. He made plain, frank statements, holding nothing in reserve to be used as a weight in the scales when he saw a chance of making a point or taking advantage of one of our sister dominions. The staff which remained in Australia also deserve a meed of praise, and particularly the honorable member for Wakefield (Mr. Hawker), whose work behind the scenes was invaluable. He laboured as hard on this side of the world as did the two honorable gentlemen who represented us at Ottawa.
The situation prior to the holding of the conference was that Australia had given preference over a series of years to the Old Country amounting in actual value to £1,376,000 in the last recorded year. It is sometimes contended that we have received nothing in return for the preferences granted to Britain over many years; but we have obtained loans amounting to £550,000,000, and under the Colonial Stock Act, those loans were given a preferential position in the stock markets of Britain. They were made “ trustee “ securities, by reason of which they assumed a much higher position on the price lists than they otherwise would have attained. In addition to that, we had the continuous protection of our trade routes, by reason of which we were able to get our exportable products shipped beyond the coasts of Australia. Without that protection we could not have exported one dinghy-load of wheat or wool.
– What happened to the Emden?
– Through the operations of the British fleet in Eastern waters the Emden was forced into such a position that she was destroyed by one of our own cruisers.
– It is well to acknowledge that Australia played some part.
– We have, but we have fallen down on our promise to provide one battle cruiser, four light cruisers, six destroyers and three submarines. The agreement in that connexion has never been altered. If the honorable member for Cook consults the Australian Navy list in his spare time, he will find that we now have but two light cruisers in commission, two obsolete cruisers in reserve, one out-of-date aircraft carrier, and only one destroyer.
– Are the cruisers the Adelaide and the Brisbane already obsolete ?
– Yes; we have definitely adopted the White Australia policy, the maintenance of which has been madepossible entirely by the protective influence of British forces throughout the world. Without that pro tection it would be impossible to uphold that policy for half an hour.
There are also certain more obvious preferences given by Britain in regard to dried fruits, wine, &c. Even with these preferences we still seem to be in a troubled economic position. This is due, largely, I believe, to the effects of the last war, when millions of men were demobilized and employment was needed for them. Tariff walls were raised brick by brick until they reached such a height that it was impossible for countries to trade with one another.
That these lines of fiscal policy were not satisfactory is fairly well illustrated by the figures in the Australian Year-Book, which shows that during the last recorded year, 1,200 factories closed in this country, with the result that 80,000 persons lost their employment, despite the fact that our tariff was higher than it had ever previously been. Australia got into such a condition that it was like the hill sheep of India which, during the snow season, have to live on their own fat. For a little while we were consuming the fat that we had stored up, but when we reached the end of that supply of food we found ourselves gradually slipping back until we reached a position which necessitated desperate action. Added to these troubles, there was the impasse created by war debts, for the discharge of which the nations of the world had not sufficient fluid gold, and in payment of the interest on which other nations would not accept goods. The United States of America was, undoubtedly, the worst offender in that respect, and at her door, I believe may be laid the responsibility for a great number of the ills from which the world has suffered in the last few years. But in the result of the presidential election just concluded we can see a gleam of hope. I believe that we shall now have a chance of, if not cancelling our war debts, at any rate reducing them considerably. There is no doubt that the high tariff wall of the United States of America, which makes her like a watertight compartment so far as trade is concerned, will be lowered, and that will give Australia an opportunity to export goods to that country.
We had an adverse trade balance of £25,000,000 in the last recorded year in respect of the United States of America. The tariff of that country is very high. On wool, for instance, it is 100 per cent, although America is not a woolproducing country.
The war debts, which have caused so much trouble throughout the world, show clearly that war pays neither the victor nor the vanquished, and the sooner we realize that war never pays the better it will be for the peace of the world. The world situation, it seems to me, will ultimately force us to follow the example of Germany in 1887 when, being placed in a similar position to that in which we now find ourselves, she formed with Bavaria, the Zollverein, or Customs Union. That action caused a considerable stir at the time, but eventually it made Germany what we discovered her to be in 1914 and onward. In consequence of that union, she became one of the important manufacturing nations of the world. Her policy enabled her to consume the output of her factories under economic conditions, and keep them working full time.
– So it was a trade war after all!
– I have never said that it was, nor shall I ever say so, The ratification of the Ottawa agreement will place Australia in a much better position than she has been in hitherto to bargain with other countries which have raised ‘tariff walls against our surplus exportable products. That alone is a remarkable achievement.
I believe that we are discussing one of the most epoch-making agreements of our history. Probably the benefits of this agreement will not be apparent for some years, but it will be found, in the course of time, that they will outweigh in good results our most sanguine expectations. I believe that, in consequence of this agreement, the sale of our primary products overseas will be distinctly aided. It has been said by honorable members opposite that our wheat industry will reap no advantage from it; but I dispute that view. In my opinion, we shall hereafter have a definite market for our wheat, and will bc able to get a better price for it in an orderly market than would otherwise be possible. Under this agreement, Australian wheat will have a preference of 2s. per quarter on the London market, and Great Britain will buy our wheat to the extent of her requirements. Hitherto, our farmers have had to take their chance on the world market, but that will not be so in the future. The ready sale of our wheat on the London market should lead to an increase of the price of wheat in England, and this, in turn, should lead to an increase of world prices with a consequent augmentation of the purchasing power of our farmers, which in turn will benefit our secondary industries. The dumping of American and Russian wheat in England will now be stopped. The orderly marketing of our wheat will undoubtedly be of advantage to our farmers.
Australian butter is to be given a preference of 15s. per cwt., which should make it possible for us to land it in England practically clear of all charges, and enable it to meet the product of other countries on an equal footing, which has not been possible up to date. Advantages have also been given to Australian apples, fresh fruits and eggs. Eggs are becoming increasingly important among the exports from this country. The British market requires 550,000,000 dozen eggs per annum, and the most that we can hope to supply, under existing conditions, is 16,000,000 dozen.
The honorable member for Macquarie (Mr. John Lawson) doubted the possibility of our being able to dispose of our meat on the British market; but cablegrams received in Australia within the last few days make the outlook distinctly brighter than it was. I believe that there is a good market available for our meat if we take care to send a good quality product abroad. A cablegram sent from London on the 29th of October, and published in the Australian press, reads -
Dr. E. K. Burgin, Parliamentary Secretary to the Board of Trade, made a statement in answer to a question in the House of Commons to-day, in which he said that the maximum increase of 10 per cent, contemplated in the Ottawa agreement in the case of frozen beef would give an additional quantity of about 105,000 cwt. to Australia in 1033, and 40,000 cwt. to New Zealand for the season ending the 30th September, 1933. The limitation of exports did not apply to 1934.
The glut of meat on the London market within the last month or two was engineered by the Argentine meat interests, and aggravated to some extent by the fact that New Zealand meat was rushed into England. This made the outlook disturbing to Australian mutton and lamb exporters, but the statement of the Prime Minister (Mr. Lyons) in this House yesterday indicated that there wa3 hope, that, by mutual arrangement, the difficulties caused by the glut would be overcome. The steps taken to dispose of this surplus meat had a beneficial effect immediately as shown by the following cablegram which appeared in the Melbourne press yesterday: -
Following yesterday’s rise of three-farthings a pound in the price of mutton and lamb on the London market, further rises took place to-day. The Australian Resident Minister in London (Mr. Bruce) conveyed Australia’s acceptance of the meat restriction plan to the British Cabinet this afternoon.
This message indicates that it is possible to do a good deal at the other end to control the market. I believe that the profitable disposal of Australian meat will be possible in London in the near future in consequence of the Ottawa agreement. It may be said that a restriction has been placed upon our exports for this year, but the position of the industry in Australia is such that it will not be possible for us to export even the quantity of meat which we exported last year, and as the restriction ‘will not become operative until we reach last year’s .figures, we have nothing to fear in that regard. Thanks to the Empire Marketing Board’s experiments in connexion with chilled beef, we have been able to place in the London market beef equal to the best South American chilled beef. The recent shipment of beef by the Port Fairy was so successful that the prospects of increased trade are most encouraging. Australia can look to a trade in chilled beef, and possibly also in chilled mutton and lamb, at greatly increased prices.
It is well that’ we should remember that most of the preferences given to Australia under the agreement will come from the breakfast table of the poor mau. All that he asks in return is a reasonable chance to compete with us in the Australian market. He does not ask for a special preference; but merely for a reasonable chance under the conditions laid down in this agreement - conditions to which no Australian should object. Under the Ottawa agreement the protection afforded to our industries by Britain remains as before; but the foreigner who endeavours to compete with our goods in the British market will be faced with heavier duties.
We claim that any two Australian soldiers in the Great War were equal to at least three soldiers of any other nation ; we claim to excel in every sphere of sport; but, when it comes to doing competitive work, we ask for more than a fair thing. Are we not prepared to show that we are so efficient that, we can compete with other nations, or even with other branches of the British nation?
Articles 9, 10 and 11 have been fully discussed. The protection given to Australian industries by them is such that no reasonable person can take exception. United Kingdom producers are to be given “ full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production.” Surely that is fair enough.
I again record my opinion that the document before us is the most important that has ever been considered in this Parliament. Those of us who are privileged to take part in its discussion may_ state, without fear of contradiction, that we have entered into a new world and a new empire, and that we are now to take our part in that Empire on a basis of equality with our blood brothers.
– While I am prepared to admit that the Australian delegates to the Ottawa Conference did all that they could to bring about an agreement favorable to Australia, I am of the opinion that either they did not know the history of preference as between Australia and Britain, or else that they did not know the people with whom they were dealing. Australia was the first dominion to grant Empire preference. It gave Britain a 10 per cent. preference in respect of all manufactured goods containing 25 per cent. of British manufacture. What did the British workman get under that arrangement? Most of the goods which came to Australia under the preference rates were imported into Britain from the Continent. English manufacturers of metal goods would not patronize British blast furnaces; they bought the blooms on the Continent, and rolled them in Britain, and then sent them to Australia and claimed the benefit of the preferential rates. They imported the bone and the bristles used in the manufacture of toothbrushes, and claimed that the articles were 25 per cent. British because the gum used to fix the bristles to the bone was British. British manufacturers were not fair to their own people. I do not say that the members of the British delegation were not sincere; but they were unduly influenced by an environment which over a century ago was summed up by Napoleon as that of a nation of shopkeepers. We are told that Australia will derive great benefit from this agreement. I venture to predict that after it has been in operation for twelve months, the most disappointed with it will be the primary producers of this country. While I admire their optimism, I am afraid that they will find that they have been sold a “ pup “. Not only do clauses 9 to 12 tie the hands of the Australian Parliament, but provision is made for Britain to limit the quantity of every commodity that she will import from us.
– There will be no restriction in 1934.
– Then what does this mean - 5.In order to co-operate with His Majesty’s Government in the United Kingdom in the carrying out of this policy, His Majesty’s Government in the Commonwealthof Australia agrees to limit the export of frozen mutton and lamb to the United Kingdom for the year 1933 to an amount equivalent to the total imports from Australia during the year ended 30th June, 1932, in consideration of the United Kingdom Government -
) of this declaration.
– That refers to lifting, not imposing, restrictions.
– It states that “ His Majesty’s Government may remove any such restriction until supplies are again adequate “.
– That means until dominion supplies are adequate.
– I should like to see a more united Empire, and an equitable trade agreement in force, not one that gives advantages to the head and nothing to the other sections of the Empire. Take, for instance, that bugbear, bananas. Has the Government considered that by placing an embargo on all but two ports in Australia it is acting contrary to the Constitution? Does it realize the danger of such a procedure?
We have not had a fair deal from the traders of Great Britain, to whom we have given substantial preferences and received nothing in return. In my judgment “ the nation of shopkeepers “ will buy from Hong Kong or anywhere else provided the market is cheap. It is well known that even during the progress of the Ottawa Conference British traders negotiated to import some 500 tons of butter from Russia, simply because it was cheaper than our product.
The honorable member for Bendigo (Mr. E. F. Harrison) talked about Britain paying for the protection of our trade routes, and all that sort of thing. Australia contributed her quota towards the protection of our trade routes during the war and she still continues to do so. But what is done in that regard by Canada, New Zealand or South Africa? Nothing! We have not had a fair deal from Great Britain, and because of that I am not agreeable to the ratifying of a document which ties our hands. We are still paying the bill for sending our boys overseas to help the Empire. Canada simply lent its soldiers and refused to pay for them. We are merely hewers of wood and drawers of water for Great Britain. We hear a great deal about out refusing to do anything for the Mother Country. Certain honorable members do not want us to give protection to any new industry starting in this country, lest it should hurt an industry in Great Britain. If this agreement is ratified, industries already established cannot be given the additional protection until a recommendation to that effect is made by the Tariff Board. If we are to share in the responsibilities associated with trade agreements we should also be permitted to derive some benefit, but under this agreement that is unlikely. Apparently, Great Britain, which is small in area as compared with Australia, does not realize the extent of this continent, and the capital required to develop it effectively. Successful development depends to’ some extent upon sympathetic treatment from Great Britain, both in the matter of trade and in regard to interest payable on money borrowed in that country. Surely, it is not suggested that our secondary industries shall be allowed to languish as a result of unfair competition, and that our energies must be devoted solely to the production of wool and wheat? Some honorable members opposite wish to extend greater consideration to overseas manufacturers than to those in their own country. I have the greatest respect for the country in which my parents were born, but I do not think that in matters of trade we should give to Great Britain greater facilities than she is prepared to extend to us. We shall never be able to satisfactorily develop this country if we are not allowed greater freedom in the matter of trade. All that Great Britain undertakes to do is to advise her people to purchase Australian products. Instead of trying to force this agreement upon the Australian people, the Government should be devoting its attention to more important business, particularly in the direction of finding employment for the hundreds of thousands who are out of work, and generally in lifting the burdens from the shoulders of the people. While the traders of Great Britain continue to buy in the cheapest markets, particularly goods from continental and eastern countries, there is little likelihood of Australian producers extending their trade with the Mother Country. Under this agreement, which, as a prominent banker said, will prove unworkable, Britain assumes the role of a dictator.For the reasons given, I shall support the amendment moved by the Leader of the Opposition (Mr. Scullin).
Debate (on motion by Mr. Dein) adjourned.
Assistance to Wheat-growers.
Motion (by Mr. Mark) proposed -
That the House do now adjourn.
– According to information received by members of the Country party, it appears that wheat-growers in various parts of the Commonwealth are not satisfied with the Government’s proposal for assisting the wheat industry. Before bringing down legislation to give effect to these proposals, will the Prime Minister (Mr, Lyons) meet in Canberra the representatives of the various wheatgrowers’ organizations in the different States in order to ascertain their views?
– I have no doubt that the right honorable the Prime
Minister (Mr. Lyons) will be willing to consider representations from the wheatgrowers, For a considerable time the Government has been in receipt of representations from those engaged in the wheat industry. It is well aware that there is a division of opinion among the wheat-growers on this subject, as there is to a’ considerable extent among other sections of the community on other- subjects and I am not aware that any body can claim to present the unanimous opinion of the wheat-growers on this subject. If I were to give an undertaking that the legislation would be held up until one particular body of opinion had been expressed, I should be obliged to promise that the legislation would be delayed until other opinions had also been separately expressed. All I can say now is that the Government will certainly consider any representation which any one wishes to make. If it is desired that a deputation should wait on the Prime Minister, I suggest that the honorable member for Gippsland (Mr. Paterson) get in touch with the Prime Minister himself.
Question resolved in the affirmative.
House adjourned at 2.11 a.m. (friday).
The following answers to questions were circulated: -
s asked the Minister for the Interior, upon notice -
With reference to the leasing of the Government Hotel at Ainslie, Federal Capital Territory-, will he supply the following information : -
The name of the lessee;
Tlie conditions of the lease, including term unci weekly rental;
Whether leased furnished or unfurnished;
The number nf rooms in the hotel ;
The number of garages on the premises; and
The original cost of the hotel 7
– The answers to the honorable member’s questions are as follow : -
v.’ - Information is being obtained in reply to questions asked upon notice by the honorable member for Melbourne Ports (Mr. Holloway) .in regard to ethyl chloride.
Reduction in Pay of Defence Forces.
asked the Assistant Minister for Defence, upon notice -
s. - The answers to the honorable member’s questions are as follow : -
Emergency Act 1932 have not been applied to naval ratings serving in the Albatross or elsewhere. The reductionhas been applied to air force personnel wherever serving.
Control ofoil Supplies.
asked the Prime Minister, upon notice -
Is he yet in a position to inform the House as to the result ofthe Government’s consideration of the complaint that one of the major oil companies had refused to supply crude oil for the manufacture of an economical spirit knownasRamtree Fuel?
s. - Such information as the Government has been able to obtain regarding this matter is not of a nature that would appear to call for intervention by the Government.
s asked the Treasurer, upon notice -
What amounthas been paid by the Commonwealth, and to what industries and interests, in subsidies and bounties, for the years ended the 30th June, 1931, and the 30th June, 1932, respectively?
– The information is being obtained, and will be furnished as soon as possible.
Cite as: Australia, House of Representatives, Debates, 10 November 1932, viewed 22 October 2017, <http://historichansard.net/hofreps/1932/19321110_reps_13_136/>.