House of Representatives
14 March 1933

13th Parliament · 1st Session

Mr. Speaker (Hon. G. H. Mackay) look the chair at 3 p.m., and read prayers.

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– I ask the Minister for the Interior if the statement is true that his department has made available £50,000 for advances to persons desirous of building homes in Canberra, such advances not to exceed 90 per cent. of the value of the building, subject to a maximum of £1,800? If so, will the Minister arrange that money be available on similar terms to intending builders in other parts of the Commonwealth?

Minister for the Interior · EDEN-MONARO, NEW SOUTH WALES · UAP

– The Government has made available £50,000 for home building in Canberra. The extension of such assistance to other parts of the Commonwealth is a matter to be determined by the Treasurer.

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Motion (by Mr.Paterson) - by leave - agreed to -

That leave of absence for one month be given to the right honorable member for Cowper (Dr. Earle Page) on the ground of urgent private business.

Motion (by Mr. Lyons) - by leave - agreed to -

That leave of absence for two months be given to the right honorable member for Flinders (Mr. Bruce) on the ground of urgent public business.

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– In the Sydney Morning Herald, of the 13th March, the following cablegram from London was published : -

It is understood that the future of the Bay Line of Steamers will come under discussion. There are indications that negotiations for their disposal are proceeding with the Commonwealth.

Is the Prime Minister prepared to make any statement regarding the nature of these negotiations?

Prime Minister · WILMOT, TASMANIA · UAP

– No.

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Embargo on Arms.


– Has the Minister for External Affairs any information to give to the House in reference to the British embargo on the export of arms to Japan and China?

Attorney-General · KOOYONG, VICTORIA · UAP

– I have been advised this morning that as there is no possibility of international agreement for uniform action in this matter, the Government of the United Kingdom removed, as from yesterday, the embargo on the export of arms to China and Japan.

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– Some time ago, the Canberra Times announced that the Minister for the Interior proposed to appoint a committee to re-appraise and classify the lands of Northern and Central Australia. Has such a committee yet been appointed?


– Yes; and its personnel will be announced shortly. The Treasurer has made available money to cover the expenses of the investigation, which is expected to commence at an early date.

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– I ask the Prime Minister whether the Commonwealth Government has reached any decision regarding the request of the British Government for a restriction of the export of butter from Australia? Will the right honorable gentleman lay on the table of the Library all cablegrams relating to the matter, particularly those made available to the Dairy Produce Export Control Board?


– Discussions have taken place between the Government and representatives of the butter industry, and are being continued. I understand that this matter will be discussed to-day on a motion for the adjournment of the House, whenthe Minister for Commerce will announce that a plan to meet the situation has been accepted by the representatives of the Dairy Produce Export Control Board who are in Canberra, and they propose to refer the matter to their absent colleagues for endorsement.


– The right honorable gentleman has failed to answer the second part of my question, namely, whether the Government will lay on the table of the House the cablegrams that have passed between this Government and the British Government with regard to the matter?


– It is not customary to lay on the table of the House copies of cablegrams passing between the Government and its representative in London. We have given every consideration to the question raised by the honorable member, and the fullest information will be supplied to honorable members in the course of the discussion this afternoon. I could not, however, undertake to place the whole of the cablegrams on the table for the perusal of honorable members.

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– I ask the Prime Minister whether the report in the Labor Daily of last Friday is correct, that the Commonwealth Government has been forced by the Labour party to amend the Invalid and Old- Age Pensions Act; or is this statement merely part of the usual propaganda that characterizes this worthy disciple of Ananias?


– The honorable member’s question answers itself.

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Machinery for Bulk Handling of Wheat - Traders’ Bonds


– I ask the right honorable the Prime Minister if the Government has yet come to a decision with regard to the request made for the removal of the sales tax and primage duty on machinery and material required for the installation of the bulk handling system in Australia ?


– The Government has not yet reached a decision in that matter.


– I ask the right honorable the Prime Minister if the Government has considered the advisability of eliminating the necessity for a bond being furnished by traders under the Sales Tax Act. and if so, what decision has been arrived at?


– Some consideration has been given to the matter mentioned, but the Government feels that it is not yet in a position to dispense with the bond. I will, however, undertake to give the matter further consideration.

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Developmental Works : Land Settlement


– Has the attention of the Minister for the Interior been directed to newspaper reports, which appeared during the recess, to the effect that the Government was negotiating with a group of financiers for the carrying out of certain developmental works in the Northern Territory, with money guaranteed by the Commonwealth, in return for which they were to receive large land concessions in the Northern Territory? If so, is the honorable gentleman in a position to tell the House whether negotiations along such lines, or with such interests, are at present being carried on?


– Inquiries have been made by certain influential citizens of the Commonwealth as to the possibility of carrying out such works, but no definite conclusion has yet been arrived at.


– Has the Minister for the Interior given consideration to the advisability of laying on the table of the House or the library, the papers relating to the action taken by the administration in connexion with land held by settlers West and Walker in the Northern Territory, to which I directed attention last week?


– On Friday last, I promised to give the matter consideration, but owing to my absence from Canberra during the week-end, I have not had an opportunity to do so. However, I can promise the honorable member that I will sec what can be done.

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Revenue Effect of New Schedules


– Is the Minister for Trade and Customs in a position to advise the House as to the effect on the revenue of the new customs and excise schedules which were submitted by the honorable gentleman last week ?

Minister for Trade and Customs · BALACLAVA, VICTORIA · UAP

– Matters of excise will be considered at the end of the financial year.


– I am afraid that the honorable gentleman did not fully understand my question. When the first tariff was introduced - I think the practice was -also observed on subsequent occasions - the Government furnished the House with an estimate of the effect upon the revenue of new proposals placed before Parliament. I desire now to know if the Minister is in a position to inform the House of the probable effect upon the revenue of the tariff proposals submitted last week.


– I am sorry if I misunderstood the honorable member. The matter mentioned by him has been considered ; but if, as is probable, he requires detailed information, I shall be glad if he will give notice of his question.

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– I ask the Minister in charge of repatriation if he will consider altering the very harsh regulation which provides that only 10s. a day shall be paid to persons in charge of ex-soldier cot cases appearing before the assessment or entitlement tribunals?

Minister for Health · PARKES, NEW SOUTH WALES · UAP

– The personal representations made by the honorable member are being considered, and I hope to be able to give him. a definite reply in the near future.

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– Can the Assistant Minister for Defence state when the appointment of a Controller of Civil Aviation, in succession to Colonel Brinsmead, will be announced?

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

– Very many applications have been received, and a careful examination is being made of the claims of the respective applicants. It will be some weeks yet before a decision will be arrived at.

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Formal Motion for Adjournment


– I have received from the honorable member for Wide Bay (Mr. Bernard Corser) an intimation that he desires to move the adjournment of the House this afternoon for the purpose of discussing a definitematter of urgent public importance, namely, “ The grave position of the Australian dairying industry.”

Five honorable members having risen in support of the motion,

Question proposed.

Wide Bay

– I offer no apology for submitting this motion to direct attention to the grave economic condition of the dairying industry of Australia. Honorable members are aware of the threatened debacle due not only to the restriction of our exports to Great Britain, but also to the continued fall in world’s prices for butter. It is as well that I should remind the House that ‘ the dairying industry of this country offers a wider field for employment than any other primary industry; that it is conducted on the greatest number of individual holdings, and that it houses more refugees from other industries than any otheras a result of which we must anticipate increased production. The various State governments seek a solution of their unemployment problems by encouraging people to go on the land, and in the majority of cases new land workers enter the dairying industry. The various church organizations and other bodies of citizens who are concernedabout the future of our youth are doing a work of first national importance by their endeavour to find employment for our lads in rural occupations. It, therefore, behoves the Government to realize the seriousness of the position in which those engaged in the dairying industry find themselves. It is true that the exports of the wool industry exceed in monetary value the exports of the dairying industry ; but, as an employer of labour and producer of wealth, the latter occupies a unique position, and merits the immediate attention of the Government. In the wool industry the product is obtained largely from one operation, which gives employment to a considerable number of men once a year. Dairying, which in many cases is a family industry, provides work daily for a considerably larger number of our citizens, who are called upon to work long hours for small monetary returns. Therefore, the claim for consideration now made on their behalf is fully justified. Our immediate concern must be to devise some means to improve the economic position of the industry. It is acknowledged that in some herds the production is too low to be profitable. As the governments of all butter-producing countries arc giving attention to this aspect of the industry with a view to increasing production, it is obvious that, if the future of dairying in Australia is not to be jeopardized, we cannot, at the expense of the dairymen, limit our exports to the British market, to which we claim the right of free entry.

The British Economic Commission realized in 1929 that the dairying industry was in an unfortunate position. In paragraph 40 of its report it stated -

The more intensive use of land already settled, or partially, settled might, at less cost, be productive of a greater increase in wealth and population than extensive schemes involving construction of new railways.

In referring to the dairying industry the commission stated in paragraph 42 of the report that -

There are unlimited opportunities with a view to increase of productivity and the diminution of costs. following upon the receipt of that report, the Commonwealth Government appointed the Federal Dairy Industry Investigation Committee, . which, in its report, stated that -

The benefits accruing to Australia, and to the Empire, must be measured in the greater prosperity and the enhanced national income, which would result from intensified production. Demand for labour and the absorption capacity of Australia would be increased without heavy capital costs.

Later in the report the following observations appeared : -

An increase of only 10 lb. per cow, with butter f.o.b. at1s. 3d. would result in the addition to the income of present farmers of £1,500,000. As far greater increases are practicable, the advantage of the adoption of economic improvements can be visualized.

Ever since that time, as well as earlier, the Governments of the Commonwealth have endeavoured to assist the dairymen of Australia with advice, with the object of increasing the productivity of the industry, improving the herds, and by the storage of fodder stabilizing the conditions generally for the dairymen. One effect of this policy has been that the industry has improved to some extent. In New South Wales in the last five years the productivity of the 600,000 dairy cows has increased by 44£ lb. of commercial butter fat per cow _ per annum. This gives some idea of what can be done by effective and economic methods.

But to-day the industry is threatened in a most serious manner. It has been proposed in effect that production shall be reduced. The British Government, according to press statements, has requested a curtailment of our exports. If this request be acceded to, the outlook of many of the pioneers of this industry and of those who have followed them in developmental work, will be seriously endangered. We know very well that workers in various industrial enterprises, as well as other primary producers, such as wheat-farmers and pastoralists, have engaged in dairying with the object, in some instances, of increasing their income, and in other instances of trying to make a bare living. In these circumstances I submit that it is distressing in the extreme that any Common wealth or State Government, or any other government for that matter, should be asked to curtail production in this great industry, which, I submit, is the chief factor of Australian settlement.

The number of individual dairying holdings in Australia is 127,111; wheat holdings. 62,2S7, and wool holdings, 90.000. ‘ Although the cash value of the products of these three primary producing industries may not be equal, the figures show that the dairying industry is providing work for by far the greatest number of people. The production of our great pastoral industry is valued at £69,498,572 per annum, of which wool ‘ accounts for £34,S03,500, and meat for £24,571,605. Milk products account for production valued at £30,000,000 per annum; but the production of the dairying industry and its allied industries is valued at £43,000,000 per annum. We export £29,304,155 worth of wool per annum, £11,687,069 worth of meat, tallow, skins, and horses, and £9,S12,S27 worth of butter. But the income from the sale of our butter is divided among a great many more families than the income from our exports of wool.

Iii view of these facts it is high time to give close attention to the dairying industry. For that reason, I ask honorable members of this House to indicate whether our dairy farmers who are struggling- to-day, and have been struggling for years to establish this industry on a firm footing, should be called upon to curtail their activities, and, in doing so, I remind them again that the product of the dairy farmers is the result of work which has to be performed twice a day, and on holidays and Sundays, and in all seasons. In spite of droughts, rain, and floods, the dairy farmer must perform his operations twice daily in order to make possible the production of the £30,000,000 per annum to which I have referred. If the dairying industry is to continue to accept recruits from other industries, it must be assisted, and the Government must give an assurance that a sound policy will be pursued. When the Commonwealth Government gave its approval to the findings of the British Economic Commission in respect of the dairying industry, it must have realized that a greater output of milk, cream, and butter was inevitable. Our dairy farmers have increased their production, because they have felt assured of the sympathetic interest and support of the Government. Last season’s figures are not to be taken as a record, because, unquestionably, they will be exceeded when the developmental work now in hand is completed. We are justified in expecting a much greater production when a greater percentage of our dairy farmers discard the crude methods employed in early settlements for the more efficient methods which are being generally applied to this industry. In all the circumstances, we have a right to expect that the Commonwealth and British Governments will assist this industry. There certainly should not be any curtailment of the British market, a market necessary for us to-day and in the future. The Ottawa agreement gave to the dairying industry the right of free entry to the ‘British market for three years.In my opinion, Ave -have every right under the terms of that agreement to resist any attempt to restrict our output. It seems to me that pressure is being brought to bear upon the British Govern- ment by certain British investors in foreign interests, the object of which is to break the Ottawa agreement. A suggestion for the adoption of quotas has been made, not in the interests of the dairy farmers of Great Britain, but in the interests of the financial magnates of the Empire, who have invested their money in certain foreign countries. It must be remembered, too, that Australia is meeting all her commitments in respect of interest, while some of those other countries are not doing so. It is, perhaps, for this very reason that British investors in these foreign countries are endeavouring to force the British Government to keep wide open the British market to the products of the countries in which they are financially interested.

Mr Nairn:

– “Where have British investors any interest in the butter industry?


– They have big interests in Denmark, and also in the Argentine. In 1932, Great Britain imported no less than 16,000 tons of butter from Russia, and in 1931 her imports from that country were 20,000 tons. That country is not endeavouring to meet her commitments as Australia is doing. Last year, Britain imported 129,000 tons of butter from Denmark, and 91,000 tons from Australia. Why not restrict imports of foreign butter?

I do not desire to be drawn further along that line. I simply point out that the interests of the British dairying men are a very small factor in the situation which faces us. If the British dairymen were being considered, the British Government might have been expected to take action of a very different kind from that which it is taking. In 1931, no less than 145,850 tons of preserved milk was imported into Great Britain, and of that total, the British Empire produced only 11,000 tons; but no attack has been made upon the milk imports from foreign countries. Why cannot the British people, in the interests of their own dairymen, place restrictions on the importation of foreign milk?

W e aire co-operating with New Zealand, according to the press, in regard to the quota system. Personally, I have no knowledge of what the Government or the

Dairy Produce Export Control Board proposes, nor has the House been apprised of the details of any cablegrams received from overseas. Although it is proposed that we should work with New Zealand in this matter, I point out that Australia’s requirements are not on all fours with those of that dominion, which is a big exporter of cheese. Of dairy products, Australia exports, practically solely, butter; but New Zealand has a second string to her bow, for she exports to Britain annually86,600 tons of cheese, compared with Australia’s export of only 3,400 tons of that commodity. Thus the dairymen of New Zealand enjoy a great advantage over those of Australia in that respect. We should be very careful what we do in this matter. I ask the Government to give assistance to the industry, irrespective of the proposal for a reduction of exports. This industry has not cost the Commonwealth a great deal. It has not proved a heavy financial drag on the people as a whole. The wool industry, for instance, has been made possible largely from the huge public expenditure on railway construction, which has run into hundreds of millions of pounds. Most of the western railway lines serve pastoral districts, and thus assist the wool industry, which undoubtedly, is deserving of help. In the last two years, the wheat industry has received £5,360,000 in cash, and it has needed the money. The dairying industry has had no public money spent upon it other than that devoted to research work in order to bring about increased production. Yet it is now proposed that production be curtailed. Therefore, it is incumbent upon this Parliament to give consideration to the claims of the industry.

The assistance for which I ask, in the first place, is that the people and the Government of Great Britain be informed that we claim the right to send our butter to the British markets. We import from Britain more than we export to her, and we have been generous to her under the Ottawa agreement, and we should at least be permitted to enjoy the privilges which it confers. It. is claimed that we have the right to inter-Empire preferential trade; but that right is being curtailed. It is essential that primary production in this country be further increased. Dairymen desire to breed further dairy stock, and to increase the productivity of their herds. I ask that the necessary financial provision be made for that purpose. If the Government finds that, owing to pressure, it has to give way in regard to the proposed restriction of imports into Britain - I sincerely hope that that course will not be necessary - I trust that it will relieve the dairymen of Australia from the burden of the loss involved by the arrangement. I believe that the curtailment of imports into Britain from all countries would not relieve the position. Even to-day the scavengers are at work on the market, and are buying butter for speculative purposes. The retail price of 9d. per lb. in Great Britain is a lower one than has ever before been known in the nation’s history since statistics have been compiled. The consumption of this commodity in Great Britain has increased by 30 per cent., and the value of her margarine imports has dropped from £1,836,890 to £150,997 in one year, while in Australia butter consumption has fallen,’ owing, no doubt, to the operation of the dok. In New South Wales, under the dole, only three-quarters of a pound of butter a week is allowed to one person. We might assist the industry by making more generous provision in that regard. I suggest that the Government energetically exploit the eastern and other foreign markets. Let us make trade agreements with countries that are prepared to buy our butter, and -then let us buy goods from them in return, instead of from such a country as the United States of America, which takes little from us. I desire to see an all-Australian organization of the dairying industry.


– The honorable member’s time has expired.


.- I support the motion, because, in my opinion, the dairying industry suffers greater hardship than any other in Australia, and in saying that I speak from personal contact with the industry in my own electorate. There the dairy-farmers suffer as a result of floods, drought and fires. In the Hunter Valley, there are thirteen butter factories, which have an annual output of 9,000 tons of butter and 800 tons of cheese. This information is contained in a telegram that I have received from the Raymond Terrace Dairy Company,’ which, like other butter factories, and like dairy farmers in general, is up in arms against the proposal for the reduction of the butter exports from Australia to Britain by 10 per cent. According to the press, the proposed reduction is 6 per cent. ; but it was suggested by the Imperial Government, through the Resident Minister in London (Mr. Bruce), I understand, that the Commonwealth Government should agree to a reduction of our exports by 10- per cent. New Zealand has been asked to make a similar reduction. That dominion, I believe, undertook to agree to the proposal on the condition that towards the end of the three-years’ period of the Ottawa agreement the balance of butter that had accumulated would be taken. I claim that under the Ottawa agreement Australia has made a great sacrifice of its secondary industries in the interests of overseas manufacturers. It was supposed that our primary industries would benefit under it ; but it would require a powerful microscope to discover what the benefits really are, and now we are asked to forgo some of them. The Government would be entirely in the wrong if it asked the dairying industry to reduce its exports one iota. The butter that we send overseas goes practically to the United Kingdom only. The value of the production of the industry with allied industries in 1931 was about £43,000,000, of which total butter was responsible for £21,000,000, while our cheese and other dairy products - eggs, pig meats, &c - were valued at £22,000,000. It has been suggested that our exports be reduced by 10 per cent, which, together with the reduced prices now obtaining for butter, would bear heavily upon the dairy farmers. Australia, during the war, made great sacrifices on behalf of the Empire, and we are, therefore, surely entitled to somewhat better treatment than that accorded to, say, Russia, which, during the change-over from one political regime to another, repudiated debts to England to the value of millions of pounds. Great Britain is prepared to take 16,000 tons of ‘butter from Russia the quantity she took last year, yet Australia is asked to reduce its exports. Last year she took 19,000 tons of butter from the Argentine, which also repudiated its debts, an increase of 250 tons on the previous year. We should protest against the action of the Imperial Government in this respect. In 1931, Australia exported 78,000 tons of butter, while in 1932, the amount had increased to 91,000 tons. A reduction of 10 per cent, on our exports for 1932 would cost the Australian dairy farmers approximately £800,000. Denmark is now evading the British import duty by sending cream instead of butter to Great Britain, and having it made into butter upon ‘ arrival. The exports of Danish butter to the United Kingdom show an increase from 123,300 tons in 1931 to 129,000 tons in 1932. I have every sympathy with those engaged in the dairying industry. Dairying was the first work in which I engaged, and I know something of it. The people of the Hunter River district are up in arms against the proposal to reduce the quantity of butter exported from Australia. The Commonwealth has stood loyally ;by the Ottawa agreement, although many of us opposed it when it was before Parliament. At the time, we complained that the secondary industries of Australia were being sold lock, stock and barrel, in the interests of the British manufacturers. It is now becoming evident that even our primary producers are to be sold in the interests of the British farmers. I do not know where the Commonwealth Resident Minister in London (Mr. Bruce) stands in this matter. He received the thanks of Parliament for his work in representing Australia’s interests at the Imperial Conference at Ottawa, but the other day, he was holding telephone conversations with Ministers in Australia trying to persuade them to agree to Britain’s proposals for the restriction of exports. Apparently he is prepared, in the interests of British finance, to undo whatever good he may have achieved for Australian primary producers at the Ottawa Conference. One might well ask who is governing Australia, the Commonwealth

Parliament or Mr. Bruce. At the request of his friends in England, he is now seeking to abrogate portions of the Ottawa agreement, from which Australia had little to hope from the beginning, ‘but which will now be of less use than ever.


– The honorable member’s time has expired.

Darling Downs

– This matter arises out of this provision in the Ottawa agreement -

As regards eggs, poultry, butter, cheese, and other milk products, free entry for produce of Australia will be continued for three years certain. His Majesty’s Government in the United Kingdom, however, reserve to themselves the right after the expiration of the three years, if they consider it necessary in the interests of the United Kingdom producer to do so, to review .the basis of preference.

There was a definite agreement between the representatives of the British Government and those of the Commonwealth that this right of free entry should continue for a period of three years certain ; but it was realized when negotiations were proceeding, that the representatives of Great Britain were naturally looking after the interests of their own people, as it was presumed the Australian representatives were looking after ours. On 12th October last, Mr. Neville Chamberlain, the British Chancellor of the Exchequer, made the position clear in the following words : -

Our policy - a policy to which the dominions not only took no exception, but in which I dare say they cordially concurred- was that in all agricultural matters, our first care should be to help our home farmers, and our second to try and give an expanding share of the import market to the dominions.

We are in an unfortunate position in not having before us the correspondence which has passed between the two Governments, and we must, therefore, discuss the matter in its absence. If the British Government is anxious to guard the interests of its own primary producers, at that Ave cannot cavil. We must turn, therefore, to the second point raised by Mr. Chamberlain, namely, that Great Britain would try to give the dominions an expanding share of her import markets. According to the latest returns available from the Statistician’s

Department, the British butter market was supplied as follows: -

It will be seen, therefore, that of the butter imported into Great Britain in 1931, foreign countries supplied about half, and Empire countries the other half. The British Government has, we presume, informed the dominions that her home producers are suffering severely as a result of imports from abroad, and has put forward, for mutual consideration, a proposal for the restriction of future . imports. As the economic agreement was designed to cement the unity of the British Commonwealth of Nations, by promoting an exchange of trade between its component parts, including an extension of the market in the United Kingdom for Australian produce, we are entitled to ask why, if there is to be a restriction of trade, it should not be applied to foreign countries rather than to Australian imports into Great Britain ? I admit that the Minister may have a perfectly satisfactory answer to that question.

Australia is principally concerned about increasing its population and settling on small areas those persons who ultimately will be our backbone in defence. The last Government and the present Government both adopted the policy of increasing land settlement. From information recently supplied to me, I gather that the Queensland Government is making 39,000 acres available in the Innisfail district for dairying purposes. Only a little while ago, I went into the bush areas of my electorate, and saw men undergoing considerable hardships in clearing laud recovered from prickly pear, reclaiming it for dairying purposes. Only recently there were 660 applicants for 47 portions near Millmerran which were thrown open for settlement, the sons of farmers in the district looking forward eagerly to possessing them. The great desire in Queensland is to open up additional country for dairying purposes, so that the output might be increased. If the proposed restriction of our butter exports to the United Kingdom be given effect, it may ultimately mean a restriction of production, which would be a. setback to one of Australia’s most important primary industries. At one time, parts of Queensland were considered unsuitable for dairying, but now that State exports more butter than any other State in the Commonwealth. The report of the Queensland Department of Agriculture and Stock for the year ended June, 1932, shows that there has been a continual expansion of the butter industry in that Stated In 1932, no fewer than 1,694,241 boxes of butter were sold, at a total value of £5,209,593. Unfortunately, this buoyant production has come at an inopportune time, for there has been a disastrous fall in prices. Those engaged in the industry in Queeusland have told me that they are most apprehensive regarding the future. Mr. McRobert, vice-president of the Queensland Council of Agriculture, stated that the price at present obtaining for best quality Australian butter in London is 78s. per cwt., or approximately 8d. per lb. To a certain extent, the Queensland industry looked to an increase in output to make up for the fall in price, and if the exports are to be restricted the result may be disappointing. Mr. James Purcell, chairman of the Queensland Butter Board, who is very well known as an experienced farmer, and Mr. McRobert, said, in an official statement, that the value of the dairying farms and plant in the Commonwealth is estimated at £150,000,000, the value of cows at £2,500,000, the value of factories, plant, buildings and land at £6,250,000, and the total value of the output £40,000,000 per annum. Of course,” a great deal of the butter produced is used for home consumption. It is estimated that there are 120,000 dairy farms in Australia, that 600,000 persons, or approximately one-tenth of our total population, are dependent upon dairy-farming for a livelihood, and that 6,000 persons are employed in the manufacture of dairy products. Those figures give some idea of the importance of the industry. I particularly stress the need of populating Australia with the right class of citizen, by developing our primary industries, and I hope that’ the Minister will give most careful consideration to the representations that have been made this afternoon.


.- Honorable members have been waiting to hear the Minister on this subject.

Mr Stewart:

– I will follow the right honorable gentleman.


– I should like to have heard the Minister before I spoke. Every honorable member who has addressed himself to the motion this afternoon has had to rely upon press statements for his information. The Prime Minister (Mr. Lyons) indicated that some agreement regarding the restriction of butter exports was imminent. “Whatever is to be said to this House should have been said immediately after the mover of the motion had resumed his seat. The issue that has been raised is of the first magnitude. Honorable members are entirely at a disadvantage in debating it. We are given to understand that the British Government has made repeated requests that there should be a restriction of Australian butter exports to the United Kingdom, and that, so far, these have been rejected by the Commonwealth Government. We have read that the Resident Minister in London has supported the requests of the British Government. Yet we have not been told anything by the Minister for Commerce or any other member of the Government, even after the adjournment of the House has been moved to debate the matter. If what Ave have been given to understand is correct, we can only conclude that the unfortunate Ottawa, agreement is already breaking down. If there is to be any review of that signed contract with respect to butter, the whole agreement should be put into the melting pot so far as it affects Australian industries. The honorable member for Darling Downs (Sir Littleton Groom) quoted schedule “ A “ of the agreement, of which I shall repeat only the words “As regards eggs, poultry, butter, cheese and other milk products, free entry for produce of Australia will be continued for three years certain “. There is no qualification about that. , We were told only last week by the Minister for Customs (Mr. White) that the pledge given by the Government to the United Kingdom will be completely and sincerely fulfilled. Surely there are two sides to the bargain? Those on the other side of the world who signed it must stand up to their contract, or bring up for review the many flaws that exist in the agreement to the detriment of Australian industries. The two things which stood out when the Government indulged in such a flourish of trumpets over the Ottawa agreement were the sections relating to meat and butter. How does Australia stand Avith regard to those two commodities now? It is claimed that if the export of butter is restricted, tho price will rise and our producers will receive as much for the smaller as for a great quantity. Sir Henry Gullett, is reported as having favored the restriction of the export of butter, and also a reduction of production. That is nice advice to Australia! Why should there be a reduction of production ! British producers have raised a great amount of agitation against their own government because they are unable to sell their butter at a profitable price, and have advocated a restriction of imports. I agree with the honorable member for Darling Downs that if there is to be any such restriction it should be on foreign imports. When in England I was told that one of Australia’s difficulties -with regard to improving its wheat and meat trade with the United Kingdom was that such a lot of British capital Avas invested in the Argentine. I read recently that there is also a considerable amount of British capital invested in the Danish butter industry. Those who would tear up the Ottawa agreement in the interests of British capitalists who have invested money in wheat, meat, and butter industries in foreign countries, I had better stop talking about Empire. It is proposed to restrict foreign imports by 12 per cent., as against a 6 per cent, reduction of imports from Australia.


– That is the information which has appeared in the newspapers.


– That is the only information that so far we have had, with the exception, of course, of suggestions from unofficial sources. Why not put all the restriction on foreign imports of butter into Great Britain? What influence is at work to nullify to this extent the Ottawa .agreement? The agreement itself is unfair, and there is no need to make it worse from our point of view. I do not stand for preferential trade. I agree that we should give preference in the Australian market to British products as against foreign products. I do not stand for placing the British .manufacturers on an equality with Australian manufacturers in our own market. That equality has been given under the agreement. When I was in power, I did not suggest that our producers should be placed on an equality with British producers in the British markets; I am not asking for that; but I do say that we have a perfect right to ask for a real, and not a paper, preference against foreigners in the British markets. Under this unfortunate agreement, Australia has preference over foreigners respecting those goods with which Great Britain supplies in part in its own markets. But since the ratification of the agreement, our meat exports to that country have been restricted, and now butter exports are to be restricted. Under the agreement, we allow the British manufacturers to compete in Australia on an equal basis with Australian manufacturers.

Mr Paterson:

– Then we imposed a duty of 45 per cent.


– Never mind about that. If the agreement is carried out sincerely, British manufacturers will operate in Australia on an equal basis with the Australian manufacturers, but our producers are not on an equal basis with British producers in respect of the British market, and we do not ask for that concession. But if there is to be a restriction of butter imports into Great Britain, we have a perfect right to ask that country to stand by its own agreement to admit Australian butter, and to restrict foreign butter. That is a simple proposition. I urge the Government’ to stand as squarely to the agreement on behalf of our own producers as it is standing to the agreement on behalf of the British manufacturers.

Mr Archdale Parkhill:

– That will not satisfy the butter producers.


– It will satisfy them if this Government takes effective action. If the Australian butter producer does not want a firmer footing in the British market, I do not know what he wants. If there is no other solution of this problem, the producers may be prepared to agree to some compromise, but before one is entered into I should like to know what it is, because I can see no room for compromise while foreign countries are exporting large supplies of butter to Great Britain. In 1932, Denmark exported to Great Britain about 129,000 tons as against 91,000 tons exported by Australia. I understand that the Australian exports have increased this year. Russia exported 16,000 tons to Great Britain, and a smaller quantity was exported by the Argentine.


– Last year, the Argentine was fourth on the list of butter suppliers to Great Britain.


– My figures do not show quite that position. Each year, from 130,000 to 140,000 tons of foreign butter enter Great Britain; yet, within a few months of ratifying the Ottawa agreement, we are being asked to restrict our exports. I suggest to the Government that instead of tinkering any further with this so-called agreement, it should allow it to be thoroughly reviewed. I repeat that one of the first acts of the Labour party, when it gains office, will be to have the whole of the agreement reviewed from every aspect.


– The honorable memberr’s time has expired.

Minister for Commerce · Parramatta · UAP

– The Leader of the Opposition (Mr. Scullin) and other speakers have complained that, in discussing this matter, they have been somewhat embarrassed because of the lack of information upon it, and I admit that is a natural cause of complaint. But let me say that they are not the only persons embarrassed by the action taken by the honorable member for Wide Bay (Mr. Corser) this afternoon. At this very moment the Government is in consultation with the elected, not the selfappointed, representatives of those engaged in the butter industry, and while negotiations are taking place, it is quite impossible for the details of the proposals before the Government to be publicly broadcast. In view of what has been said, it is necessary that some misapprehensions, which obviously exist in the minds of honorable members, should be removed. The honorable member for Hunter (Mr. James) has suggested that the exports of butter from Australia to England in 1932, which totalled 91,000 tons, were to be taken as the basis of the proposed restriction. That is not correct, because the proposed basis of the restriction, which at this stage is only suggested, is the estimated exports for the year ending next June. Those will be greatly in excess of the exports for 1932, and, therefore, that basis, if accepted, will be more advantageous to the Australian producers. The honorable member for Hunter has suggested that the proposals are adverse to the butter producers of the dominions and in favour of foreign producers. The official statistics shed some light on this question. In 1930, Australia exported to the United Kingdom 47,000 tons of butter. In 1931, we exported 78,000 tons; in 1932, 91,000 tons; and for the year ending June next, it is estimated that the quantity exported will be 106,000 tons. It would be an excellent thing for us if we could continue to increase our output and find a productive and economic market for it overseas.

Mr Scullin:

– Was not that position anticipated when the agreement was signed ?


– Yes; but, as a matter of fact, the exports of butter from Australia to England have, during the last few years, increased by something like 125 per cent.

Mr James:

– What about foreign butter!!


– In 1930, Great Britain imported 188,000 tons of foreign butter. Two years later, the importation of butter from foreign countries had increased to 220,000 tons, while this year the supplies from foreign sources are expected to total 224,000 tons. That represents an increase of only 20 per cent., whereas the importations of Australian butter into the United Kingdom have increased by 125 per cent, during the same period.

Mr Bernard Corser:

– What about the importations of butter from Denmark into the United Kingdom?


– Denmark exported to the United Kingdom 116,000 tons of butter in 1930, and in 1932, 129,000 tons, an increase of about 12 per cent. I ask honorable members to consider what will happen in the case of Danish butter if no action is taken to restrict imports into Great Britain. In 1930, Germany imported about 130,000 tons of butter, but in 1931, as a result of legislation restricting such importations, only 100,000 tons of butter entered Germany. There was a further reduction in 1932 to 75,000 ton3 ; and, in future, the butter imported by Germany will be only 50,000 tons per annum. Denmark is one of Germany’s largest suppliers. What will Denmark do with the great surplus of butter which will result from the German restriction on imports? The Leader of the Opposition (Mr. Scullin) referred to the Ottawa agreement. There has been no suggestion, either by the British Government or by the Commonwealth Government, that any restrictions on the importation of Australian butter into the United Kingdom can be imposed without the consent of Australia. That is clear and definite. Our representatives at Ottawa asked for two things in connexion with butter. They asked, first, for a duty on foreign butter entering the United Kingdom, and were successful in obtaining a duty of 15s. a cwt. Secondly, they asked for a restriction on the importation of foreign butter, but in that they were not successful. Under this proposed arrangement - which, I repeat, is only a proposal - the restriction of foreign imports will be double that which will apply to dominion butter.

As I have indicated, the purpose of the proposal is not to bolster up the interests of certain British magnates in the Argentine; it is defintely to assist the dairymen of the British Empire. It is confidently anticipated that a restriction, such as is proposed, “will have an immediately beneficial effect on the price of our produce overseas. In saying that butter was now at bedrock prices in the United Kingdom, the honorable member for Wide Bay was not strictly correct, because bedrock prices were reached last week. Because the restriction of imports has been suggested, butter in the United Kingdom i3 bringing 3s. per cwt. more to-day than it did last week. Like many others, I am prepared to look with favour on this proposal, because I believe that it will have an immediately beneficial effect on the price of Australian butter in England. One honorable member, at least, seems inclined to demur to that statement. I, therefore, remind him that in 1930, Australia exported 47,000 tons of butter to the United Kingdom, and received for it 158s. per cwt. The following year, when we exported 78,000 tons of butter, we received only 112s. per cwt. for it. In 1932, when 91,000 tons of butter was exported, the price received was only 97s. per cwt. To-day, the price is 74s. per cwt. for an estimated shipment of 106,000 tons for the year ending June next. It may be merely a coincidence that with every 1,000 tons additional of Australian butter exported to the United Kingdom the price has fallen by approximately ls. 6d. per cwt. Those who favour a restriction on exports believe that the effect will be to raise the price of butter. If their hopes are realized, the dairymen of Australia should benefit considerably. Only this morning the Government was negotiating with a sub-committee of the Dairy Export Control Board, which is composed of the elected representatives of those engaged in dairying in Australia.

Mr Forde:

– What States were represented at the conference this morning?


– South Australia, Victoria, and New South Wales were represented in person, and, in addition, representatives of the industry in the other States were communicated with by telephone. At that conference, suggestions were made which, I believe, will prevent the devastating consequences of a restriction on imports which some honorable members have voiced here to-day.

Until the full board has received the report of its sub-committee it is, of course, impossible to discuss publicly the proposals which have been put forward. The full board is being called together immediately to discuss them.

Mr Beasley:

– Did the board initiate these proposals?


– Confidential information was placed before the conference, and the suggestions which were made to it - suggestions which it is hoped will become definite proposals when the board meets - will, I am confident, not only meet all the objections that have been voiced here to-day, but will also prove of benefit to the Australian dairying industry.

Mr Bernard Corser:

– What will happen to the Australian producers?


– If their elected representatives endorse the scheme of which the sub-committee has already approved, the producers will find that their interests have been fully conserved. Surely we can rely on the sub-committee, which is representative of the industry, seeing that no injustice is done to those whom they represent. On behalf of the Federal Government, whose constituents the dairy farmers of Australia are, I can say that no action or inaction on its part will operate to the injury of what it regards as a very important industry.


.- The House is indebted to the honorable member for Wide Bay (Mr. Corser) for having brought this matter before it. During recent years, the Australian dairying industry has made great headway. Dairy farmers in Australia have been urged to improve their methods, and they have responded by top-dressing their pastures, adopting herd-testing methods, culling their stock, breeding better animals, and feeding them better, with the result that they are now getting more cream and more butter from fewer cows. Production has increased enormously as the Minister (Mr. Stewart) has reminded us. For the last five years’ our exports of butter to Great Britain have been 46,000 tons, 48,000 tons, 72,000 tons, 92,000 tons; with an estimate of 106,000 tons for the current year. Until now, ho warning note has been sounded in the ears of those engaged in dairying in Australia. On the contrary, they have received nothing but encouragement^ they have been urged to produce 3till more. Their feeling of stability has been fortified by that passage in the Ottawa agreement guaranteeing to them, a period of three years free from any restrictions on the export of dairy produce to Great Britain. Therefore, the request of the British Government has come as a shock to the dairying industry, notwithstanding that it is accompanied by a promise to impose against foreign countries double the restriction imposed on Australia. As to the extent to which the proposed curtailment of exports will assist the British dairy farmer, unless conditions have changed radically during recent years, comparatively little butter is produced in Great Britain. Great Britain is a densely-populated country, with most of the dairymen within easy reach of the large centres of population. Milk is produced by them mainly to be consumed as such, but those who d.o not live sufficiently close to the cities and large towns to send their milk into direct consumption, convert it into cheese. I believe much of the butter made in Great Britain is produced from milk sent for distribution as milk but unsold and diverted to the churn. Those who produce milk for butter-making are comparatively few, and, in proportion to the total consumption of butter in Great Britain, the local production must be very small. 1 have grave doubts as to the permanency of any price improvement which may result from a restriction of exports from Australia; but on this matter I am not prepared to dogmatize. We have been told that if we restrict the amount of butter sent on to the British market, the price will respond to such an extent that our return will be greater than if we had sent a greater quantity which realized a smaller price. Let us suppose that Australia and New Zealand each agree to withhold 6,000 tons of butter which otherwise would have been sent to the British market, and that foreign producers of butter are required to restrict their exports by twice that quantity, or 24,000 tons, I cannot help believing that, so long as that total of 36,000 ions of butter is in existence, it will affect prices. It will not evaporate, and it cannot be despatched to Mars or any other planet. Whether we temporarily prevent it from being exported to the United Kingdom or not, it will remain in this world as a product awaiting a market. Should this butter be put on other markets, the effect is bound to be felt in Great Britain. If, for instance, a large proportion of the Danish butter that is prevented from being sent to Great Britain is pushed on to other European markets, in addition to the supplies they are taking now from Denmark, continental prices must be depressed, and that depression must, in turn, affect the British market. On the other hand, if the huge quantity of butter now proposed to be withheld from the market is placed in cool store, and production continues unabated during the currency of the restriction, which, if agreed to, I assume, would be for twelve months, as soon as that term expires the stored butter would be released, and would probably swamp the market. Whilst I am not prepared to dogmatize, I believe there is reasonable doubt whether the restriction proposed will be as advantageous to prices as some people imagine. It may cause a temporary increase of prices, but this benefit cannot be permanent unless restriction is accompanied by a reduction of production, which would be a calamity for Australia. Any decision to restrict exports to the United Kingdom should not be made without the concurrence of the Dairy Produce Export Control Board, in whose collective wisdom I have a great deal of faith. Moreover, restriction should be only for a limited time, and on the condition that New Zealand similarly restricts its exports. If the Government adopts that policy, it must recognize its responsibility to meet a portion, if not the whole, of the consequential losses incurred by the dairying industry. We have been told that no losses will result from this policy ; if that prophecy is verified, the Government will have no liability ; ‘but, if loss is caused by a policy deliberately adopted by the Government, this Parliament cannot divest itself of responsibility. The Dairy Produce Export Control Board must be provided with funds to enable it to purchase promptly all butter which would have been exported but for the restriction.

If such butter were allowed to go on the local market, chaos would result. The board has not the necessary funds to-day. The suggestion has been made that the voluntary levy and bounty arrangement, known as the Paterson plan, should be embodied in legislation, and that funds should be drawn from the whole industry, both the local and export trade, to be used in making good any losses incurred as the result of the restriction. I understand that the Government does not look favorably on that proposal. There is another way in which money could be raised to provide the board with funds for the purchase of butter submitted for export, but prevented from being sent abroad, and that is by an amendment of the Dairy Produce Export Charges Act. At present a levy of l-56th of a penny per lb. is imposed ; if the act is amended to increase the amount of the levy, I hope that the Government will be prepared to aid the board by meeting half the cost of any losses that result from the restriction of exports. Unfortunately, local prices must fall to the extent of any export tax imposed. As a last word, I urge the Government to be guided by the advice of the Dairy Produce Export Control Board.


– I am strongly opposed to any compulsory restriction of the export of butter ; but I am amazed that this debate should have been initiated by the honorable member for Wide Bay (Mr. Corser), who belongs to that section of the Country party which believes in high duties, embargoes and prohibitions, to assist Australian primary industries, whether they be economic or uneconomic. The presence of such a section in the Country party makes that organization a complete enigma to all students of Australian politics. Not long ago, the honorable member for Wide Bay conducted with almost barbaric ruthlessness a campaign against the banana-growers of Fiji, who sought to obtain a small share of the Australian market in return for important concessions offered by that colony to Commonwealth trade. In season and out of season, the honorable member has advocated prohibitive duties and embargoes. To-day he has revealed himself as being one of those peculiar and illogical species of politician who believe that Australia should resort to any ‘ extreme to protect its own < industries, whether they be sound or otherwise, but should be immune from similar expedients ‘ adopted by other countries. If countries throughout the world continue to raise tariff barriers higher and higher, and to impose embargoes and prohibitions against international trade, the Ottawa treaty cannot endure, and the free flow of trade and industrial stability will be impossible.

Denmark, which has long been the world’s leading producer of butter, has found in recent years that the outlet for its products has been greatly curtailed through the adoption by continental countries of those embargoes and prohibitions which the honorable member for Wide Bay advocates for the protection of Australian primary industries. Because of the partial closure of its other European markets, it has been obliged to reduce production, and divert to Great Britain a large proportion of the butter which otherwise would have been sold on the Continent. As a result, during the last three years, while the total production of butter in Denmark has greatly declined, the Danish exports of butter to the United Kingdom have increased by 18,982 tons, or about 17 per cent. In the same period New Zealand exports to the United Kingdom increased by 44,327 tons, or 66 per cent., and those of Australia by 53,055 tons, or 137 per cent. As the weekly consumption of butter in Great Britain has increased from approximately 5,000 to over 8,000 tons, it is clear that the consumer is doing his part to create a market for the producers in the dominions and in foreign countries. I cannot subscribe to the statement that a magnanimous and benevolent British Government has suggested the restriction of imports in order to assist dominion producers. This proposal is, in my opinion, the outcome of an endeavour by British dairymen to safeguard for their own benefit, the home market - a policy which has been generally adopted in Australia, and is endorsed by the Leader of the Opposition (Mr. Scullin) and the honorable member for Wide Bay (Mr. Corser). The British producer of butter is awakening to the dangers of outside competition, and for bis own protection is taking a leaf out of the books of his rivals in the dominions. I do not know that we can resent that attitude, but I suggest that we are at least entitled to ask that the foreign exporters of butter shall be required to make the first sacrifice. I find that Argentine purchases annually from the United Kingdom approximately £25,000,000 worth of goods; Denmark purchases £10,000,000 and Australia £54.000,000 worth. These figures show that Australia purchases five times as much in value from Great Britain as Denmark does, and more than twice as much in value from the Mother Country as the Argentine does. Therefore we are justified in contending that, if sacrifices are required to meet the position in Great Britain, they should be made first by foreign countries. Particularly should this be so because we have a definite agreement with the Mother Country for a period of three years, and also because, in recent years, we have waged war against the repudiation or variation of contracts. I, therefore, contend that, if there is to be restrictionof dairy imports into Great Britain it should not be enforced first of all upon foreign imports, and not at all on the imports from Australia except, as the honorable member for Gippsland (Mr. Paterson) has pointed out, with the full concurrence! of the Dairy Export Control Board.


.- The only conclusion we can draw from the speech of the Minister for Commerce (Mr. Stewart) is that this Government favours the restriction of our butter exports to the United Kingdom. It is true that the honorable gentleman admitted that the proposal was still under consideration, but before he resumed his seat he left no doubt in our minds as to where he stands as the responsible Minister controlling the exportation of butter. Those of us who have been keeping in touch with this matter for some weeks past, will remember that the Dairy Export Control Board, when first the proposal was brought under its notice, opposed the proposed restriction of exports, but the Minister for Commerce rushed into print with a defiant statement to the effect that the Dairy Export Control Board, being a body created by the Government, had not the last word to say on the subject.

Mr Stewart:

– When did I say that?


– I saw the statement reported in one of the Sydney newspapers, and I remember reading a leading article in a newspaper published in Castlemaine, Victoria, directing attention to it. I repeat that the Minister, in his speech to-day, certainly left the impression on honorable members’ minds that he favours the restriction of butter exports, and he went on to point out that it would have a beneficial effect on Australian dairyfarmers. The honorable gentleman referred to our increased exports of butter to the United Kingdom over a number of years, and asked how could we expect to gd on expanding our trade in that way. Clearly, he implied that we must expect some restriction by the Mother Country. What a statement to come from the Minister controlling the exportation of the products of one of our most important primary industries - a Minister whose special duty it is to do all that is possible toevelop exportation ! During the last ten or fifteen years the governments of all the States have spent millions of pounds on laud settlement schemes. In this way they have encouraged thousands of returned soldiers to enter the dairying industry, and now the Minister for. Commerce asserts that the time is ripe for the restriction of our exports, declaring that that will be in the interests of our dairy-farmers! I say definitely that the authorities in Great Britain, and also the delegates ofthe dominions, had before them at the Ottawa conference all the figures that were quoted this afternoon by the Minister for Commerce. They were in possession of all the facts when they agreed to schedule A of the agreement, which provides that, as regards eggs, poultry, butter, cheese and other milk products, there shall be free entry for the produce of Australia for a period of three years for certain. Yet, almost before the ink on the Ottawa agreement is dry, there is to be a substantial restriction of the exports of this great primary industry. The leaders of the dairying industry in Australia and New Zealand should now co-operate and present to the Imperial authorities, through their respective governments, a strong case for the restriction of imports from foreign countries if necessary. They should declare that, if the Ottawa agreement is to be a reciprocal arrangement, there must be no curtailment of the exports of dairy products from the dominions into the British market. It is no wonder that the Farmer and Settler, a newspaper representing farmers’ organizations of New South Wales said this recently -

The men who went to Ottawa and left the producers to wallow in the bottomless pit of low prices should make amends and strive to save the industry from the disaster that so blatantly stares it in the face through the short sighted policy of the politicians who talk so glibly of the salvation that Ottawa offered.

The Ottawa Conference was convened because it was realized that the primary industries of the British Empire, including dairying, were facing the greatest crisis in their history. The magnitude of that crisis was advanced as one of the reasons for the summoning of that gathering. Doubtless, honorable members will recall the speeches made by members of the Government and their supporters in which they emphasized how the agreement made at Ottawa would assist our wheat, wool, meat, and other primary industries. The dairying industry, which has made such great strides in Queensland, was then held up as a shining example of an industry that would benefit greatly from the Ottawa agreement. I have before me the statement made by the honorable member for Henty, then Minister for Trade and Customs (Sir Henry Gullett), in this House on the 13th October, 1932. This is what he said -

The importance of Ottawa to the dairy industry is very great . . . This new duty of 15s. per cwt. places our dairymen in an exceptionally advantageous position as against the foreign producers, and cannot fail both to improve the price, and ensure to Australia an expanding position in the British markets.

Will it be contended that the action now being taken will ensure for our dairymen an expansion of their trade with Great Britain? When this latest proposal was under consideration by the Federal Cabinet a few days ago, the honorable member for Henty, who is no longer a member of the Government, was reported, under black headlines in the Melbourne Herald as follows:

page 196


Sir H. Gullett Supports Cut

There appears to be a great deal of mis understanding of the British Government’s proposal to restrict foreign and dominion butter imports for a term of three years. I think that the scheme would work out admirably for the Australian dairy farmer, although the time for which it should operate may be open for question.


– Exactly. Under the Ottawa agreement we are expected to agree to increased imports of British manufactured products, including machinery, textiles, and cotton and woollen piece goods, and now we are asked to accept a proposal to reduce our exports of dairy produce to the Mother Country. The following table of some of the butter imports to the United Kingdom is instructive : -

These figures show that during those years there has been a substantial increase in the imports of butter into the United Kingdom from Denmark, Russia and the Argentine. When under the Ottawa agreement, the duty of 15s. per cwt. was imposed by Britain against foreign butter, we were told that our dairy farmers could expect a much higher price, but for some reason not explainedby the Government, there has been a downward trend in the market since then.


– The honorable member’s time has expired.

Assistant Minister · Moreton · UAP

– The Government is willing to acknowledge that this question is full of difficulties. All proposals have much to commend them, and there is room for differences of opinion among honorable members as to the wisdom of the course that is now being considered. Certain representations having been received from the British Government., a Cabinet committee was appointed to examine, in conjunction with the Dairy Produce Export Control Board, the problem which was thus presented. The Cabinet committee and the board met in Sydney, and after a full day conference agreed co recommend to the Government that, there should not be any restrictions upon the export of butter. The Government accepted this recommendation. The board is composed of men who are elected by the dairymen themselves to represent the dairying industry in the control of the exportation of dairy produce.

Mr Baker:

– The dairymen in the Moreton district -are not enthusiastic about the proposals.


– The dairymen in Moreton can do without any advice which the honorable member may be disposed to offer to them. They are represented on the board by the chairman, Mr. Plunkett, and also by Mr. Jamieson. The Government, a,3 I have stated, has ‘been keeping in close touch with the board in considering this matter. A number of conferences have been held, and the recommendation objecting to the proposed restriction of exports was accepted by the Cabinet sub-committee, and endorsed by the Government. Further representations were received from the British Government, and these, too, were submitted for the consideration of the Dairy Produce Export Control Board.

The honorable member for Richmond (Mr. R. Green) has suggested that there is an air of suspicion about these negotiations between the Government of the United Kingdom and the Commonwealth Government; but the fact is that the representations of the British Government have been made in strict accordance with the Ottawa agreement, which provides inter aiia for the free entry into Great Britain for a period of three years, of eggs, poultry, butter, cheese, and other dominion milk products; but allows for the varying of this arrangement with the consent of the Governments concerned.

In the present instance, the British Government has made it quite clear that it recognizes that the Commonwealth Government may, in the exercise of its discretion, demand the fulfilment of the terms of the Ottawa agreement. That is a matter which has never been in doubt at any stage of the negotiations. Recognized British principles have been followed in the negotiations.

What is the position to-day? The Government referred the whole matter of the original and subsequent proposals to the direct representatives of the industry, the Dairy Produce Export Control Board. The first decision not to restrict exports has been conveyed to the British Government, and in regard to the second proposal an agreement has been reached with the executive of the board which it is prepared to recommend the full board to adopt. The board will meet next Tuesday to consider the report of the subcommittee and to advise the Government of its decisions. We recognize the importance of the export trade to our dairy producers, for we send 95 per cent, of our exports to Great Britain. The British market is therefore vital to our dairying industry. In these circumstances, the Government felt that it was desirable that- the Dairy Export’ Control Board should be consulted.

It is also important that we shall realize that any fall in the overseas price of our dairy produce is reflected in the local price. It is therefore imperative in the interests of the dairy farmers of Australia that we shall get the highest possible price for the dairy produce that we sell overseas. The overseas price is unquestionably the key to the price in Australia. The following table shows clearly how prices are affected by the volume of exports : -

It will be seen that during the period covered by that table, the price of butter dropped S4s. per cwt. In the same period, Australia has increased her exports of butter to Great Britain by 225 per cent., while foreign countries have increased their exports by only 20 per cent., and Denmark has increased hers by only 10 per cent. If the proposals, which the Dairy Export Control Board executive will submit to the full board are agreed to, Australia will still be able to export about 100,000 tons of butter in the twelve months following the date upon which the proposals come into operation, and this will be about 9,000 tons more than our previous record of exports last year when 91,000 tons were exported. This proposal has been made to cover a year of difficulty, and I emphasize that it has been reached in consultation with the executive of the Dairy Export Control Board, which, together with the Cabinet sub-committee, has considered all the facts of the case, and any decision reached is subject to the endorsement of the board.

Another important point’ to be borne in mind is that these proposals are not to became operative unless all the dominions are prepared to make a similar arrangement, and unless the restriction of imports from foreign countries is twice as great as that which the dominions are prepared to accept. I reiterate that the Government, in examining the position of the dairying industry, has obtained the best advice possible, and has co-operated with the Dairy Export Control Board, and again to-day with the executive of that board, which consists of persons elected by the dairy-farmers themselves. We have done everything that we possibly could in the best interests of this industry. I point out also that for a period early in 1926 the Dairy Export Control Board itself imposed a restriction on exports, and during that period of restriction the price of butter rose from between 164s. and 166s. per cwt. to between 174s. and 175s. a cwt.

The proposals of the British Government would reduce its total imports to approximately 400,000 tons. In 1931, the total imports were 403,000 tons, and the price was 112s. a cwt. To-day’s price for butter is only 74s. a cwt.


– The Assistant Minister’s time has expired.


.- It is manifestly impossible for an honorable member to deal with every aspect of this industry in the ten minutes allowed to him under the Standing Orders. I shall therefore, confine my remarks to the statements that have been made this afternoon by the Minister for Commerce (Mr. Stewart) and the Assistant Minister (Mr. Francis). A great deal has been made of the fact that the Government has been acting in consultation with the elected representatives of the dairying industry. I admit that the Dairy Produce Export Control Board was elected by those engaged in the dairying industry of Australia. But it must not be forgotten that a little while ago both the board aud the Government declared against the restriction of exports. However, in consequence of representations made to the Commonwealth Government by the British Government, the subject has been reconsidered, and we are now informed that both the Government and the executive of the Export Control Board have agreed to a measure of restriction. In my opinion, this agreement has been reached because undue pressure has been brought to bear on the board, as stated this afternoon by the Deputy Leader of the Opposition (Mr. Forde). This change of policy has followed certain representations, which indicates clearly to me that pressure must have been brought to bear on the Australian Resident Minister in London (Mr. Bruce). We have been told that the situation is delicate. Some time ago I directed the attention of the Minister for Commerce to the great disparity between the prices in Great Britain o’f Australian and Danish butter, and the honorable gentleman said that this Government could do nothing to correct the position. I suggest that it could do something very definite, for it could insist upon the observance of the terms of the Ottawa agreement which was signed a few months ago. In my opinion, we should demand that the conditions of that agreement should be observed in their entirety, at least for the stipulated three-year period. If Great Britain desires to reduce her imports of butter, let her import less from those countries with which she has made no agreement.

We were told that one of the objects of the Ottawa, agreement was to bring about freer trade between the constituent parts of the Empire, but almost immediately after the ratification of the agreement, the British Government is asking us to restrict our imports, not in the interests of the British dairying industry, but in the interests of certain British capitalists who have foreign investments.

It was said this afternoon that only 10 per cent, of the butter consumed in Great Britain was produced by British dairymen. This indicates that the action which the Government is now asking us to take is not designed to assist the British producers. The honorable member for Gippsland (Mr. Paterson) has told us that the activities of the British dairying industry are chiefly devoted to the production of milk and cheese for home consumption. In 1932, Great Britain imported 31 per cent, of her butter from Denmark, 26 per cent, of it from New Zealand, and 22 per cent, of it from Australia. The Argentine was fourth on the list. In all the circumstances, it is extremely unfortunate that neither the leader of the Australian delegation to Ottawa (Mr. Bruce), who is now Australian Resident Minister in London, nor the’ ex-Minister for Trade and Customs (Sir Henry Gullett), who is away ill, is here to tell us exactly what occurred at Ottawa. In answer to a question which I asked him earlier this afternoon, the Prime Minister (Mr. Lyons) said that, in due course, a. plan would be disclosed by the Minister for Commerce. I listened very intently to the speech of that honorable gentleman. I am deeply interested in this subject, because a greater number of dairymen live in my electorate than in any other electorate in Australia, and more than half the butter produced in New South Wales is produced in my electorate. In spite of my careful attention to the remarks of the Minister for Commerce, I did not hear him say anything about a plan.

Mr Lyons:

– I did not say that the Minister would disclose a plan ; I said that it would be disclosed to the honorable members that a plan had been discussed by the Government and the executive of the Dairy Produce Export Control Board, and that an agreement had been reached.


– If the plan is the proposal of a restriction of imports of butter into Great Britain from Empire countries, and twice such a degree of restriction on imports from foreign countries, I do not think the scheme should be described as any kind of plan.

Mr Stewart:

– There are elements in the arrangement which will please the “ honorable member’s constituents very much.


– If that is so, it is a pity that the Minister did not indicate what they were. This industry is vital to the progress of the people whom I represent. I have learned from a newspaper which reached me only to-day that 600 dairymen met at Murwillumbah last Friday, and carried a motion unanimously against any restriction of imports.

Mr Stewart:

– Their representative was with me this morning.


– It looks to me as if there is something sinister and underhand going on in Great Britain. Certain interested parties are pulling strings to suit their own ends. The suggestion was made this afternoon that this action was being taken in the interests of those who have invested money in the Argentine and Denmark. There has been a heavy drop in the price of butter in Great Britain recently. Last year Great Britain imported 390,000 cwt. of butter from the Argentine. As I have already indicated, Denmark, New Zealand and Australia were ahead of the Argentine in the volume of imports. In September, 1932, the price of Australian butter in London varied from 104s. to 108s. a cwt., while the price of Argentine butter at that time varied from 8Ss. to 90s. per cwt. The difference of 18s. per cwt. was doubtless accounted for by the better quality of Australian butter. The Argentine producing season corresponds with our own producing season. It is significant that in January of this year the price of Australian butter had fallen to between 80s. and 82s. per cwt., while the price of Argentine butter had declined to between 78s. and 80s. per cwt. The difference was then only 2s. per cwt. in favour of Australia, whereas in September last, prior to the ratification of the Ottawa agreement, the difference was 18s. per cwt. in our favour. This looks sinister to me, and is evidence in support of my view that strings are being pulled in Great Britain. If Britain brings this pressure to bear upon the Commonwealth Government, it will be the duty of the Government, as representing the Australian dairymen, to resist any restriction of their exports, particularly as but a short time has elapsed since Britain agreed that there should be no such restriction for at least three years. Some time ago the ex-Minister for Trade and Customs (Sir Henry Gullett) spoke eloquently on the subject of the benefits which the dairying industry would receive from the Ottawa agreement; but if the restriction now proposed may be accepted as a sample of those benefits, I am reluctantly forced to the conclusion that the Ottawa Conference has definitely failed. I have spoken in favour of the agreement; yet if one of the main industries of this country is to be handicapped as now proposed-


– The honorable member’s time has expired.


We are indebted to the honorable member for Wide Bay (Mr. Corser) for having provided, an opportunity to discuss this important matter, and great responsibility rests upon the Government and the Dairy Produce Export Control Board in coming to a decision upon it. Unfortunately, we are in the dark as to what proposals have been submitted to the board, and what arrangement it has accepted, other than that the Assistant Minister for Defence (Mr. Francis) has let the cat out of the bag, to a certain extent, by telling us that the restriction, calculated upon the figures which he gave us, would involve the- withholding of about 6,000 tons of butter. That would be a calamity to the industry. I agree entirely with the honorable member for Macquarie (Mi-. John Lawson), and I cannot see my way clear to say definitely that I would support a scheme that would mean the holding up of immense quantities of butter in Australia and in other parts of the world. As a matter of fact, the proposal cuts right across the Ottawa agreement. I do not know what those of us who have pointed out the advantages of the agreement can say when we go to the country again, and when those engaged in this industry remark to us “ The Ottawa agreement has meant nothing to us at all, since you have restricted our output “. The most scientific methods have been adopted in the industry. Scores of men who formerly confined their attention to wheat-growing have recently been keeping a few cows, and have been getting a little cash by means of dairying operations. The industry has been extended into districts in which practically no dairying had previously been practised. We are now faced with the position that butter production is to be restricted. The proposal submitted to the Dairy Produce Export Control Board is, I understand, that it should make a levy on the industry, and obtain from butter producers generally sufficient money to meet the loss, if any, occasioned by the withholding of 6,000 tons of butter per annum. I think that it would be just as well for the industry itself to bear the first loss by exporting the butter pud taking a lower price, rather than by paying for the loss out of the funds received from butter exports generally. If the Paterson scheme were applied, the general community would sustain some of the loss ; but under the present proposal apparently the dairymen will bear it all. In my opinion, the British Government should say to the Danish and other foreign dairying countries. “ You are exporting 200,000 tons of butter. To reduce that quantity by excluding from Britain 6,000 tons of it would not affect you very much.” The Australian producers of butter would then keep the market in Great Britain that they now have. I agree with the honorable member for Gippsland (Mr. Paterson) that if approximately 40,000 tons of butter is stored in cool chambers in various parts of the world, the fact that so much butter is in reserve will have an immediate effect in reducing the price on the British market. Butter being now as low as 8d. per lb. on the British market, if the quota system is applied to Denmark and Sweden, the competition between those countries for the British trade will be so keen that the price in the British market will be reduced still further. The proposal will have to be gone into, and further pressure should be brought to bear on the British Government to induce it to place a further embargo on imports from foreign countries to the extent of 6,000 tons. That would not mean a great deal to them; but it would give Australian producers the benefit of the Ottawaagreement in its entirety, and they could go on producing as in the past. I feel sure that that action would give greater satisfaction to the industry than asking it to find the money necessary to make good any loss sustained.


.- The Minister said this afternoon that representatives of the dairy farmers were here in Canberra. I have received letters and telegrams and copies of resolutions passed by various organizations throughout Northern Queensland protesting against any restriction of butter exports. When the Ottawa agreement was under discussion in this House, the Prime Minister (Mr. Lyons) pointed out that Queensland would reap greater benefit under it than any other State; but that State has already suffered restrictions under the agreement, upon the export of beef and mutton. The Minister states that Britain is prepared to double its imports from Australia, as against imports from foreign countries; but why show consideration to foreign countries? Only a few days ago, the Minister for Trade and Customs (Mr. White) said that Australia had given Britain preferences that were worth £10,000,000 a year to British manufacturers. Since Australia is the biggest customer that Britain has, why should Britain not observe the Ottawa agreement as faithfully as Australia is honoring it? I hope that the House will have an opportunity this afternoon to take a rote on this matter.

Motion (by Mr. Gander) put -

That the question be now put.

The House divided. (Mr. Speaker - Hon. G. H. Mackay.)

AYES: 16

NOES: 40

Majority . . . . 24



Question so resolved in the negative.

Debate interrupted under Standing Order 257b.

page 201


The following papers were presented : -

Commonwealth Bank Act - Regulations amended - Statutory Rules 1933, Nos. 28, 29.

Defence Act - Regulations amended - Statutory Rules 1933, No. 33.

New Guinea Act-

Ordinances of 1932 -

No. 22 - Public Service.

No. 23 - Judiciary.

No. 24 - Re-organization of Native Affairs Department.

No. 25 - Supplementary Appropriation 1931-32.

No. 26 - Laws Repeal and Adopting (No. 2).

No. 27 - Census.

Ordinances of 1933 -

No. 1 - Mining.

No. 2 - Companies.

No. 3 - Superannuation.

No. 4 -Loan.

Seat of Government Acceptance Act and

Seat of Government (Administration) Act - Nurses Registration Ordinance - Regulations amended.

page 202


Customs Tariff (1932) : Special Duties (No. 4) : Primage Duties (No. 2) : Customs Duties (Canadian Preference, No. 2) : Customs Tariff Amendment (No. 1) : Special Customs Duty (No. 5) : Excise Tariff Amendment (No. 3)

In Committee of Ways and Means: Consideration resumed from the 10th March (vide page 173) on motion by Sir Henry Gullett (vide page 1167, Vol. 135)-

  1. That on and after the fourteenth day of October, One thousand nine hundred and thirty-two, at nine o’clock in the forenoon, reckoned according to standard time in the Territory for the Seat of Government, Duties of Customs at the rates respectively specified in the column of the schedule hereto headed “ British Preferential Tariff “ be imposed ou goods the produce or manufacture of the United Kingdom. . .

Upon which Mr. Paterson had moved by way of amendment -

That after the words “ United Kingdom “ the following words be inserted: - “and that the Government without delay submit a further schedule which will carry out the terms and the spirit of the Ottawa agreement with respect to increased preference to British goods in the following manner: -

Duties against British goods to be reduced to the level of the 1021-1930 tariff in all cases where they have been raised above that level without report by the Tariff Board”.

And on motion by Mr. White (vide page 29)-

  1. That the Schedule to the Customs Tariff Proposals introduced into the House of Representatives on the thirteenth day of October, One thousand nine hundred and thirty-two, be amended as hereunder set out.

.- The committee is indebted to the Minister for Customs for the grouping of items which he has introduced in the presentation of the tariff schedule. This affords honorable members a much better opportunity of understanding the tariff as a whole. I realize that the Government would have an impossible task if it attempted to reconcile the opinions of honorable members on such a subject as the tariff. I also realize, as one who had hoped to see some reductions in duties, what little chance we have of receiving consideration from the protectionist bloc which exists on both sides of the chamber. There has been for years a drift of population from the country to the city, until the cities now have a preponderance of numbers, and are able to control this Parliament. Any government, from whatever side of the House it may be selected is, in effect, under the domination of the city vote. That is more evident in regard to the present Government since the departure of the honorable member for Wakefield (Mr. Hawker) from the ranks of the Government. Since he has gone, there is not one direct representative of the rural industries in the Ministry. The effect of the citi’es’ domination is shown nowhere more clearly than in the tariff, not only as regards the high duties imposed, but in the incidence of the tariff itself. The tariff schedules now before us are definitely loaded against the man on the land. I refer in particular to group 8, which contains a long list of machinery and appliances used principally in connexion with factories. In order to cheapen the cost of production, these machines and appliances are to be admitted duty, free from Britain, and from foreign countries on payment of a duty of from 10 to 15 per cent. The same effect was, to some extent, achieved previously by admitting certain articles under by-law, but it was most unsatisfactory in its operation. Three examples of this have come recently under my oH r notice. The department in these instances refused to admit machinery under by-law, and three promising industries were lost to Western Australia. These incidents occurred, not during the regime of the present Minister for Customs, but during that of his predecessors. The applicants, after having satisfied themselves that it was impossible to get what they wanted in Australia at a suitable price, or of a suitable nature, arranged for machinery to be imported, and applied to the department to have it admitted free under by-law. When applications of this kind are received, the Customs Department sends out to Australian manufacturers an inquiry asking them whether they are prepared to make the articles which are the subject of the application. In all the cases to which I have referred, manufacturers were found who were prepared to make the experiment at the cost, and at the risk, of the proposed importers. The importers were so disgusted at the treatment accorded to them by the department that they declined to go on with the matter, and the industries were not begun. Now, the free list under group 8 of the schedule supersedes that by-law provision, and is an innovation for which I heartily commend the Minister.

If we look at group 8 as a charter for those who are hoping for lower duties, and for reductions in the cost of production, we find that it provides no help for the man on the land; the benefits are granted almost exclusively to the city manufacturers. In group 8, there are 388 items of machinery and appliances which may be admitted free from British countries; of those only three are for use in rural industries, and they are of a comparatively negligible character. They are milk carifiers used in butter factories, &c, horse clippers, and machines used for making honeycomb. However, for the city man who wants to establish a factory, the free list is of considerable advantage. He can import free of duty machinery for making soap, biscuits, textiles, metal work, &c.

Mr White:

– There is a long list of canning machinery in the group such as is used in the rural industries.


– They are almost exclusively factory items, and do not directly benefit the farmers. The city man may even import his typewriters and adding machines free, but the farmer receives no concession for fencing materials and harvesting machinery, which are responsible for a considerable portion of his production costs. We have in Australia a harvesting machinery industry which is very efficient, and lias for a long time had the exclusive right to the Australian market. To-day, as a result of exchange, primage, super charges, &c, that industry enjoys, without any nominal duty at all, protection to the extent of 40 per cent., but in addition to that a nominal duty of 22J per cent, has been imposed. On .barbed wire - another farmer’s item - there is a duty of 63s. a ton; on ordinary wire the duty is 44s. a ton and up to 70s. a ton; on corrugated iron, it is 90s. a ton; while on cast iron pipes the nominal duty is 35 per cent., while the actual duty is 48 per cent. Recently, the Tariff Board had before it an application for an increase in the duties on cast iron pipes. In its report it pointed out that, at the time, of the inquiry, the duty and other charges’ on these pipes amounted to, roughly, 75 per cent. However, after paying those charges, the overseas exporters were able to sell 1-in. black iron pipes in Australia for fi 16s. lid. per 100 feet, while the Australian manufacturers were selling similar products at £2 2s. 5d. per 100 feet. The Australian manufacturers contended that they could not compete on this basis,- and asked that the duty be increased. Nails are in general use, and the duty on ordinary nails is 5s. 6d. per cwt. On horse-shoe nails, however, which are mostly used by farmers, the duty is 12s. per cwt. I have heard some protectionists laugh at the farmers and their complaints, and say that it serves them right to be treated in this way for being such fools as to go on the land. That attitude probably accounts for the discrimination under which the farmers suffer. The duty on orchardists’ spray pumps is 59 per cent. Presses for clothes, and safety pins, are admitted free. The pastoralist must pay 60 per cent, on imported wool presses in addition to exchange and other charges! The timber mills use portable engines, and the duty on them is 40 per cent. On mining machinery, the duties vary from 40 per cent, in respect of particular items, to 54 per cent, n.e.i. To these duties there is one notable exception. The coal-mining industry is one of the sheltered industries of this country, with powerful trade unions always prepared to support its claims. Coal-cutting machines are, therefore, imported free. There is also an exception in the case of farmers engaged in the production of cotton, and cotton gins are admitted free. It is perhaps significant, that the use of cotton gins is confined almost exclusively to the electorate of an ex-Minister for Customs.

The instances I have quoted show that there is marked discrimination against those engaged in rural industry, and that is reflected in the economic condition of country districts in every State, particularly in those States mainly dependent on rural industries. If it is desired to give any assistance to the country areas, there should be a general reduction - I do not advocate freetrade, because Australian industry is entitled to fair protection - on those items used by those engaged in rural industries. At least the same remissions should be given to those engaged in farming as is given” to city manufacturers who import machinery and appliances.

Honorable members representing city constituencies appear to be indifferent to the plight in which the people of the country find themselves to-day, but what will be the position throughout Australia if the great wool, wheat and metal industries should collapse? Conditions in the city would soon become as bad as they are in the country at the present time. The only new capital coming into Australia to-day is received in return for primary products exported. It is futile to disregard the fact that primary industries are in an extremely bad way, and that many farmers are leaving the land. The gold-mining industry, through its special position, is enjoying some measure of prosperity, but mining, generally, is unprofitable, and a great deal of the hardship endured by those engaged in the mining and timber industries may be traced to the special manner in which they are discriminated against under the tariff.

The United States of America was the first country to go in for the policy of high protection. The Americans succeeded in building for themselves a palace of cards, but this is now tumbling as similar edifices have tumbled in every country that has attempted to follow the same economic policy. Peculiarly enough, America is following very closely in the steps of Australia during the last two or three years. In that country, they first incurred a huge public debt. Now they have a. democratic government making cuts in pensions, and in the salaries of public servants, just as a Labour government had to do in Australia. To complete the analogy, the Roosevelt Government is entering upon a policy of inflation by issuing paper money just as was proposed by the Scullin-Theodore Labour .Government in Australia.

Mr Riley:

– Nonsense.


– The suggestion which was advanced by the Labour party for the solution of our problems was the rais ing of price levels to the 1929 standard. It is most popular with the honorable member for Melbourne Ports (Mr. Holloway). The idea is not new, and is merely another and more pleasant method of expressing old proposals for the inflation of prices by the issue of credits through the medium of the Commonwealth Bank. It would be all very well if those who sell our goods abroad preached the doctrine of price-raising, because higher prices abroad would increase the national revenue; but we in Australia cannot afford to indulge in internal price-raising, for every increase in price means a rise in the cost of living, and places a handicap on our exporting industries. The nations have been trying to postpone the inevitable return to something like the normal conditions which existed before the war, and, one by one, the weaker units have gone to the wall, bringing down the stronger financial nations in the process. The United States of America is the latest to succumb. Resort to tariff Avails, arbitration courts, schemes for the extension of credits and the increase of price levels are unavailing. Inevitably Ave must return to the more or less normal standards which Ave knew before the war.

There has been a reduction in wages in Australia which should be reflected in the cost of commodities produced in our factories. The other evening the AttorneyGeneral (Mr. Latham) endeavoured to convince honorable members that many Australian manufacturers were producing articles of good quality as cheap or even cheaper than those obtained abroad. He instanced batteries. No useful results can be gained simply by quoting instances. The only way to obtain an accurate estimate of the effect of prices is to study the records compiled by our statistical department. These indicate that there has been a distinct rise in the cost of industrial commodities during the last few years, and that, even after a slump of nearly three years, the prices of industrial commodities in Australia are higher than they were during boom periods. On the other hand,

Ave find that there has been a fall of about 30 per cent, in the Australian prices for farm necessaries, while the bottom has fallen out of the market for those commodities which Ave export.

The Pratten tariff was generally regarded as the high water mark of tariffmaking by those belonging to other than’ the Labour party. Great indignation was voiced by the honorable gentlemen who now occupy the Government bench when the Scullin Government introduced a much increased tariff in 1931. To-day, the’ same gentlemen are supporting substantially similar increases. In the meantime, additional protection has been afforded our industries by a 10 per cent, primage duty and an exchange of 25 -.per cent. The Attorney-General (Mr. Latham) has been obliged to appear as the apologist of those who condemned the Scullin tariff. Honorable members must have been charmed with the adroit advocacy with which he advanced their cause. Should I ever get into a tight, corner I shall certainly brief the .right honorable gentleman for my defence. Gi ven any reasonably -plausible premises the Attorney-General can demonstrate that any given fallacy is true. ‘ He does not adopt the crude method of stating directly that black is white, but by an ingenious process of suggestion he gradually, and almost imperceptibly, produces the illusion complete, without his listeners perceiving the change. “With all his ability and wit,, on this occasion the honorable gentleman quite failed to convince those who heard the declarations of his clients in 1931’, and their protestations in 1932. Honorable members are acutely aware that the Government has executed a right-about front in the .matter of tariff.

I am afraid that the amendment is destined to the usual fate of such amendments when the tariff bloc, on the Government side joins with its natural enemies, the official Opposition to defeat the object of country, representatives to obtain a reduction of the tariff. Ordinarily, the Government depends for its stability upon the support of - members of the “Country party. Apparently, in tariff matters, it is prepared, for the moment, to kick that- prop away and rest upon the support of those who are usually its opponents. The Attorney-General claimed that the Government was taking a middle course. That cannot be when the Government is adopting substantially the . Scullin Government’s tariff. A middle course would be half-way between the proposals of the official Labour partyarid the requests1 of the Country party; which seeks a -moderate tariff. Again,, a middle course is generally supposed to be a safe one. I am convinced that the course that the Government is ‘pursuing is not ‘ the wisest that could” have been adopted. The Government owes a debt te those States which are dependent for their prosperity on the success pf -our rural industries. That duty is being seriously overlooked simply because there is a protectionist’ bloc ou both sides of the chamber which, by combining temporarily,’ is able to defeat any application for a reduced tariff. While.! am afraid that the amendment will be defeated, I shall support it, for it represents my view. ‘ ‘ ‘


.- I speak on this subject because I believe that the schedule vitally affects not only, those, in ray ^constituency and in the State- of Queeusland, but in Australia generally. During the debate on the Ottawa agreement, I briefly expressed my opposition to it, and the opinion that its adoption meant the death-knell of Australian secondary industries. After bearing the Minister’s introductory speech tothe schedule I am more than ever convinced that, this Government has , bar’tered away Australia’s true fiscal policy. The schedule goes to prove what I and, others on this side have claimed, that practically every it.em on the tariff fixed by the’ Scullin1 Government has been jettisoned or mutilated, against the best interests of our secondary industries and of the .people of Australia. The tariff schedule introduced by’ the. Scullin Government resulted in the establishment of many new industries, which operated successfully, and employment was found for thousands of Australians. Unfortunately, the tariff-slashing policy of this Government has resulted in many of those industries being closed, and thousands ofAustralians thrown into, unemployment. Had the policy of the Scullin Government been adhered to, our unemploymentproblem, would not be nearly so acute as it is. But unfortunately, this Govern-: ment has adopted a freetrade policy which has resulted in increased’ unemployment. The Minister, when presenting this schedule, pointed out that the Tariff Board had acted in accordance with articles 10, 11 and 12 of the Ottawa agreement. While that agreement was under discussion, those articles were strenuously opposed hy honorable members on this side of the chamber, who considered that they were detrimental to the best interests of Australia and of its people. We are still firmly of that opinion. Article 10 gives the Tariff Board full power to fix duties, and to form the fiscal policy of Australia without reference to this Parliament. That is wrong in principle, and is against the best interests of this country. When the full effect of this tariff is felt, practically every manufacturing industry in Australia will be closed, and more and more men will be thrown out of employment. That position will not be tolerated by the people of Australia. This Government, in attacking the secondary industries, is breaking the pledge that it gave to the people at the last election. In Queensland, practically every member of the United Australia Party promised definitely that, if returned to Parliament, he would undertake to protect Australian industries. But as a result of the Ottawa agreement and the tariff legislation of this Government, practically every industry in Queensland has suffered considerably. First of all, this Government attacked the sugar industry, and then the cotton industry, the tobacco industry, the rum industry, and nearly every other industry in Queensland. The Ministry is deserving of severe censure for the measures that it has introduced into this chamber and placed upon the statute-book. I shall have more to say in opposition to the schedule when the items are under discussion.


.- Having regard to the contentious and complicated nature of the tariff and the extent to which it has already been debated in this chamber, I address myself to the subject with a considerable amount of reserve. During the past six months, I have tried to understand it, so as to get into my own mind a logical and reasoned picture of it. I failed completely to do this, and my failure will, I think, be comprehensible to those who have made a similar quixotic attempt. When I began that task, I thought in my innocence that I should discover some logical framework in which corresponding items connected with similar industries would be subjected to somewhat, similar tariff treatment. But this is not the case, and by reason of political expediency in the past, the tariff has developed on unscientific lines, whereas one might have expected to find natural Australian industries given adequate protection, we find in practice that their protection is whittled away in numerous instances by duties on subsidiary industries of lesser importance which do little more than increase the costs of the parent industry.

I shall not be foolish enough to raise the whole issue of protection, because I think it is agreed that our fiscal policy has long since passed out of the realm of academic discussion, and is now a matter of practical politics. Protection is now the settled policy of Australia, and we must apply ourselves to getting the best out of it without it getting the best of us. I have attempted, as I suppose many other honorable members have attempted, to obtain some idea of the height of the tariff wall now and in the past. It is a most difficult thing to gauge. I have adopted the rough and ready method of comparing the percentage that the duty collected bears to the total imports as well as to the dutiable imports. I have taken the last two years of the Bruce-Page tariff, and the two years of the Scullin tariff. I admit that this rough and ready method does not give anything like an exact picture, and that it tells rather against my own argument, because during the Scullin regime the duties were so high that a large quantity of goods was debarred altogether from entering Australia. During the last two years of the Bruce-Page Government the duty collected was 22 per cent, of the value of all imports and 37-J per cent, of the value of the dutiable imports, whereas in the two years of the Scullin Government the respective percentages were 33 and 58.


– Has the honorable member made allowance for the fact that there were prohibitions then in operation ?


– That fact tends to lower the figures relating to the Scullin tariff.


– Would not that raise the percentage?


– I am dealing with a ratio. No duty was collected whore no goods entered. The figures that I have given do not present the true picture, but they furnish a rough guide. They show a heavy increase in the tariff, of which we were aware, though we have not been able to apply a quantitative basis of comparison.

There is one point which I think is relevant: that is, the repeated claim of the Lender of the Opposition that his government, by its action, righted Australia’s trade balance. That was the subject of remarks six months ago. I tried to analyse the figures, and spoke on the subject at that time. It seemed to me that the basic fact stood out that the decline in the dutiable imports and the decline in free imports, following the Scullin fiscal measure, was almost exactly the same, which leads to the obvious conclusion that it was not the fiscal policy of the Scullin Government which did the trick, so much as the reduced purchasing power of the Australian public. I readily admit that the fiscal action of the Scullin Government righted the trade balance possibly six months sooner than it would have been righted in any other event. The right honorable gentleman deserves full credit for the action taken. But I do not think that it was unique action; it was action that would have been taken in similar circumstances by any government that might have been in power, and I think a government of a different political colour might have limited the incidence of the fiscal action to a certain definite lime.

There is another method of comparing the incidence of the tariff at different periods, and it is one which I understand the Statistician’s Department has recently adopted in a rather tentative fashion. It is the analysis of imports under from two to six headings, the simplest classification being into two classes, “ consumers goods “ and “ manufacturers goods “. I suggest that the Government should consider making this a definite part of the Statistician’s task. When the system is once in operation on a card index basis, a systematic and continued analysis of imports under haK a dozen headings would be automatically provided, and one could thus obtain vital and quick information as to the kind of goods entering -our shores and have ready information on which to base the curtailing of imports of goods less’ necessary than others, during periods of extremity. I have tried to divide imports into three different categories; manufacturers’ imports, consumers’ imports, and what might be called unnecessary imports. During 1928-29, when the Bruce-Page Government was in power, the figures under this classification of imports were 52 per cent, manufacturers’ imports, 16 per cent, consumers’ imports, and 32 per cent, unnecessary imports. In 1931-32 the figures were 68 per cent, manufacturers’ imports, 16 per cent, consumers’ imports, and 16 per cent, unnecessary imports.’ During the last twelve months there has been a considerable increase in manufacturers’ imports and a corresponding decrease, in unnecessary imports. The division of items into those three categories is rather arbitrary, and among the unnecessary imports have been included motor cars, motor cycles, tinned fish, arms and ammunition. Therefore, the word “ unnecessary “ is rather a harsh title for the third category of imports. I suggest that this method of compiling the statistics, or something like it, should be seriously undertaken by the Statistician’s office, so that a running check might be kept to determine the tendency of our imports.

If one . might be excused another criticism of the Opposition, it is this: that we hear little now of the fears that were expressed in’ the strongest terms, both in this House and’ in the press, by the Leader of the Opposition arid his colleagues in September, October and November last with regard to the trade balance. In- September it appeared as if the rate of imports and exports .would result in adverse trade figures to the extent of £5,000,000 or £8,000,000; but now the position is different. According to a recent statement of the Prime Minister, in answer to the pregnant comments of the Leader of the Opposition, to-day it looks as if our trade would probably balance, or taking into account sinking fund activities in London, we might be a little’ to the bad. It depends on the amount of the sinking fund operations allocated to the London market. It seemed to me at the time, as it does now, that in making the stricture that he did, the Leader of the Opposition was arguing from the particular to the genera!. Quoting figures relating to only a few months he endeavoured to show what would happen at the end of twelve months.

Mr Scullin:

– I was comparing the figures month by month. The position is still dangerous.


– Our exports in sterling plus gold are likely to amount to about £83,000,000 and our imports to about £58,000,000 per annum. .

Mr Scullin:

– Is not the honorable gentleman adding the gold reserve?


– No; at least not Commonwealth Bank gold, ‘but merchandise gold. Leaving out of our consideration the exports of Commonwealth Bank gold, and sinking fund operations, it would appear that we shall balance our ledger this year.

In a discussion of this kind I am disposed to think almost exclusively in terms of the Tariff Board. I cannot see any other means whereby the business of tariff making can be taken out of the field of party squabbles, and made thescience it should be. By means of a properly constituted tariff board we may redeem our’ tariff from the muddle in which it now Undoubtedly is; and make it reasonably scientific. I regard the Tariff Board asthis country’s sheet anchor in fiscal matters. But it is unreasonable to expect any board to deal with more than 50 or 60, or, at the most, 75 items, in any one year, and I, therefore, suggest to the Minister that serious consideration be given to the question of strengthening the Tariff Board, both in numbers and prestige, and in any other direction possible. If from two to four new members were appointed the board could then work in two groups, each containing three or four members. I also suggest the appointment of an economist to the board’s staff, not to the personnel of the. board itself.

Mr Forde:

– Last year the Minister supported the views of the honorable member.

Mr White:

-But not now.


– The Minister’s . more intimate touch with the work , of the board has possibly given him cogent. reasons for changing his opinion. I hope that in due course we shall hear those reasons.

In a speech on the tariff a day or two ago, the Attorney-General (Mr. Latham) made a remark -with regard to prices, the significance of which probably escaped us at the time. The right honorable gentleman referred to the necessity for keeping in continuous touch with prices throughout the whole of Australia. He admitted the difficulty of doing so.I feel that I am in good company when I stress the necessity for considering and recording prices. Any one who reads the reports of the Tariff Board must be struck by the disabilities under which it labours in respect of prices. Within Australia prices vary considerably; but so much is dependent on them that one wonders how the Tariff Board gets on, in view of the paucity of information available to it. On two occasions within the last twelve months I have suggested that the Government should consider the appointment of a prices board, consisting of two or three individuals, which would work in close co-operation with the Tariff Board, supplying it with a continuous record of prices, in order that that body would be in a position to determine whether or not high duties were being taken advantage of by local manufacturers, or. whether importers were taking, similar advantage of low duties. This question of prices is so important that I have often toyed with the idea of Australian manufacturers being required to accept some measure of responsibility for the prices at which the articles they make reach the actual consuming public. I have inmind the high, even exorbitant, costs of distribution in some instances. I know of industries in which the factory cost of an article bears only a fantastically small relationship to its selling price over the counter. I can think better way of reducing that gap than by the publicity that would result from the activities of a prices board, unless it is provided that the manufacturers themselves shall be made to accept some responsibility for the retail selling prices of the products in return for the tariff protection privilege.

Mr White:

-In almost every instance; the Tariff Board probes the dis- parity between manufacturing cost and selling price.


– The task is a much bigger one than the present board can undertake.

Mr Gregory:

-1 - Price-fixing boards were a failure in war time.


– I have in mind a price- investigating board rather than a price- fixing board.

In determining the duty on specific items, the Tariff Board must often be hampered by its inability to obtain production statistics in relation to articles manufactured and consumed in Australia. In only exceptional cases has the board any exact knowledge along those lines. In order to obtain full and accurate information, a considerable reform of our statistical methods would be necessary because o’f the need for agreement by the authorities in six States. The matter, however is so important that the Commonwealth Government would be justified in approaching the State Governments with a view to obtaining uniformity in their statistical records.

I imagine that the Acting Leader of the Country party (Mr. Paterson) has moved his amendment more as a gesture to emphasize in general rather than in particular terms the attitude of his party towards the tariff. ‘ I cannot support his ‘amendment, because I fear that it would do more harm’ than good if carried. ‘ In attempting to implement the Ottawa agreement, the Government had to’ decide between two alternatives; it had either to reduce’ the’ duty on British goods entering Australia, or increase the duty on foreign goods. As the Minister has told us, prompt action was necessary if the arrangement entered into at Ottawa was to be given effect without undue delay. The Government .did the only possible thing’ in the circumstances; it chose the lesser of two evils, and increased the duties - on foreign goods. ‘ The ‘carrying of “the amendment would have the immediate effect of increasing unemployment, and the consequent distress would not be compensated for by any possible gain to theprimary producers, and -that, after all, is the crux of the matter: Any sudden and considerable’ alteration of a tariff, whether up or down, causes dislocation, anc! to’ that extent is harmful.

The aim of the Government w,as to give the British manufacturer an increased share of the Australian market, not at the expense of the Australian manufacturer, as would be the case if the amendment were agreed to, but at the expense of the foreigner; and, therefore, I claim that it acted .wisely in raising the duty on foreign goods, rather than by lowering the duty on British goods.

Sitting suspended from 6.15 to 8 p.m.


– The honorable member for Melbourne Ports (Mr. Holloway), in his speech a few days ago, questioned whether it was worth while to continue this debate, in view of sinister influences at work which would defeat anything we attempted to do. I propose to analyse the rather sweeping and dogmatic assertions which he made in respect of the adumbrations and conclusions of the, International Financial Conference con,vened -by the League of Nations in Brussels in September, 1920. He made bold to say that sinister influences were at work at that gathering whereby the selfish views of some obscure.- body of international financiers were foisted on” the principal governments of the world,* with the result’ that a process of deflation’ was initiated’ in 1920, which even;tually produced the catastrophic world depression./ No such sinister influences were behind ‘ the Brussels conference. From the records of that gathering contained in ‘the ‘official’ journal of the League, of Nations for October, 1920,’ I have refreshed my recollections of the principal resolutions. Ir find that’ the conference’ stressed : the ‘ urgent need for’ balanced budgets, and the necessity for. imposing ruthless taxa- tion until that was ‘achieved; that’ indebtedness should be ‘funded, and new capital required by ‘governments.f build by, public loans - that is t’o, say: from the real savings- of the people, and not from fictitious and unreal sources ; and’ ‘that artificial and unrestrained expansion pf currency should be stopped. The- conference uttered a stro’ng warning a gain st: “the ‘evils and perils of inflation; and referring to the’ necessity of reversion ‘ to the gold standard said - ;

The reversion to or establishment of 1 an”, effective gold ‘standard by any -other’ means than devaluation, would in many cases demand enormous deflation - and it is certain, that such deflation, if’ and when undertaken, must be- carried OUt gradually “ and frith great cautions- otherwises the disturbance to trade and credit might, prove disastrous.

The conference mentioned the necessity for the establishment’ of a central bank in each country, and inveighed - against all artificial restrictions of trade, particularly by manipulation of the exchange’ rate. , I am unable tq find in those homely and “ bread and butter “ counsels any indication of a sinister influence. The delegates to the conference were appointed by their governments, but not necessarily as spokesmen of official ‘policy; -they attended as experts, and were free to express their own opinions. The recommendations of the conference are mere common sense - a rather staid and conservative’ set of directions that any man connected with finance could have framed without the advice of an international conference of such size and scope”. The names of many of the delegates are known to me. There was a considerable number of civil servants, including treasury officials of’ all countries, a few diplomats, and leading bankers and economists. I fail to find in the names of any of them anything- to create suspicion in my- nain d that sinister influences were at work. They were ‘ regular, normal people, particularly the representatives of the British Government, and I hope there was no evil significance in the fact that Mr. J. R. Collins, .represented the Commonwealth. The resolutions had no binding effect upon governments. They were just good commonsense, free of novelty; and I can well imagine the then British Chancellor of the Exchequer (Mr. Winston Churchill) receiving them with a certain amount of petulance, and saying, “ Oh yes ; we are to* balance our budgets, redeem or fund our floating debt, finance public works from public loans, and not from treasurybills, and . remove all exchange restrictions - the same old stuff “ - and then writing to the British delegation to express his satisfaction with the results of the conference, and adding a rider that it was rather late in the day to teach one’s grandmother to suck eggs. My view is confirmed by the remarks of Mr. R. G.

Hawtrey in his book Monetary Reconstruction -

Surely the. stock of pious platitudes respecting currency must long ago have been exhausted, if not at the Brussels Conference of 1920, at many similar conferences since the war.

If the Brussels Conference was the cause of the commencement of the calamitous deflation, surely we should be able to find some hints in the history of the last twelve years as to how, when and where, the underhand directions of sinister international financiers were implemented: . Did the German people take a hint from the resolutions of the conference ? I hardly think so, because within * a very few years Germany indulged in an Orgy of uncontrolled inflation, the horrors of which are well known to honorable members. Was it America? I think not, because in the succeeding years, except for a setback in 1921-22, America enjoyed exceptional prosperity in which deflation had no place. Was it France? Within a few years after the Brussels Conference, France .had a particularly trying fight against inflation, and only by extraordinary efforts, which would hardly have been possible under any other regime than the dictatorial rule of M. Poincare, was it able to stabilize its currency. There is no hint of deflation in that experience. There is left for consideration then, only Great Britain as the country which was , influenced by international Jews secretly operating at the Brussels Conference. It is a fact that five years after that gathering Great Britain decided to return to the gold standard, and that demanded a degree . of deflation ; but only by a tremendous, stretch of the imagination can we credit that conference with having influenced the decision of the British Government. The reversion to the gold standard benefited the traders in money - the bankers and exchange brokers - but operated to the detriment of the manufacturing sections. The problem was threshed out in Parliament, without restraint of language, and in the public press. Eventually, the general view of the British people was that a return to the gold standard would be to the advantage of British interests as a whole. That decision was open to criticism, and in the light of more recent events it is probably recognized now, even in England, that the reversion to the gold standard in 1925 was premature; but we cannot read into that policy any influence from the Brussels Conference. Eighteen months after the Brussels Conference, the Genoa Conference was held. This was a full-scale governmental gathering, attended by Prime Ministers and Treasurers from the principal countries of Europe, and together with others practically all the recommendations of Brussels were implemented and enshrined in its official conclusions. Therefore, I find it difficult to reconcile the suspicions of the honorable member for Melbourne Ports (Mr. Holloway) with the realities of the situation. The honorable member also hinted that the corralling of gold by America and France was the outcome of the Brussels Conference. The French banking policy, which made inevitable their undue accumulation of gold, was the outcome of the law passed in 1928, eight years after the Brussels Conference, after all the horrors of inflation and the difficulties of stabilizing the currency had been experienced. I venture to say that by 19,28 the recommendations of the Brussels Conference were almost completely forgotten, and had no influence in directing the attention of the French people to the necessity for increasing their store of gold. In regard to America, the storing of gold was the outcome of calculated national policy as expressed in parliament, particularly through the tariff laws. Therefore I do not think that the honorable member for Melbourne Ports can substantiate his statement that the undue accumulation of gold in these two countries, the starving of other countries of gold, and the consequent rise in gold prices and fall in commodity prices, can be connected with the Brussels Conference. I do not forget that he concluded his remarks with a dissertation on a policy of unilateral default against the holders of our bonds in Great Britain. He took care to state that that was his personal opinion, and not necessarily the policy of the party to which he belongs. He said that in his own affairs he would not resort to such tactics ; he no money, but if ,he did he would pay in full.’

Nevertheless, he had no doubt that default should be the accepted national policy of this country. Why did he take care to protect his honour in this manner, and assure the committee that in all circumstances he would pay to the last penny any debt he incurred ? Doubtless, because he values his own reputation and realizes that directly and indirectly he would suffer in a thousand ways if he defaulted without consulting his creditors. Upon the same principles, I suggest, should our national policy be framed. The honorable member possibly overlooked the important fact that since the Brussels Conference about £253’,000,000 of our indebtedness to Great Britain, about half of it, has been incurred at rates of interest which are high compared . with those applying to the remainder of our external debt. Therefore, past governments can hold themselves blameless in that this indebtedness in Great Britain was incurred after the Brussels Conference, when the evil, purpose at which the honorable member for Melbourne Ports hinted could not have had effect. He probably overlooked also the trustee securityship of Australian bonds in Great Britain. If, in a calculated and determined fashion, we defaulted in respect of the £500,000,000 worth of bonds that have the status of trustee securities, a financial panic would be created in the City of London, with reactions in British and Australian finance that one does not care to contemplate.

Earlier this evening, I stressed the importance of the Tariff Board and the necessity for strengthening it. I suggested the creation of a prices board, the function of which would be :to exercise a continuous watch over prices in this country. I suggested further the possibility, at some future time, of our secondary industries being made, in some degree at least, responsible for the prices at which their products eventually reached the consuming public. I also expressed the opinion that our production statistics were susceptible to reform ; that we should attempt, through the Commonwealth Statistician, to get better and quicker statistics, and that we should keep a running analysis of our imports in their principal classifications. I suppose that I, from personal and temperamental’ reasons, lean rather to mechanical and fact-finding bodies for the discovery of economic remedies, than to the adoption of mere political expediencies, which has become more or less our national habit. I believe that we are likely to learn a great deal more about our true economic status a.3 a nation, from a quantitative analysis of our production, particularly with respect to tariff-making.

In conclusion, I would suggest that in all countries those whose preoccupation is public affairs find their task dividedclearly and sharply, in these days at least, into two categories. On the one hand, they have to devise proposals to relieve the domestic condition of their people from the disturbing influences of world-wide chaos which has been upon us for the last three years’, and on the other hand, they find themselves being asked to join in movements which are directed towards the betterment of those world conditions of which our local economy is but a part. It is found, however,, that in most cases, if not in all, these two phases which divide the attention of our public men are nearly always in opposition, if not in actual conflict. The local remedy which we seek to apply, altogether apart from the world situation, is frequently little better than an expedient. The larger aspect of things necessitates a longsightedness and a balanced judgment which the position of governments in each individual country, and in this country in particular, makes it difficult to apply. Particularly is this the case with regard to tariffs, because of their disturbing effects, politically and economically, . especially prohibitory tariffs such as we have been discussing in the last twelve months. It is, I think, not unfair to say that the party in opposition in this House stands for prohibitory tariffs. Without any bandying of words, I suggest that the party opposite is the apotheosis, the incarnation of what is the principal devil in the piece at the present time in the world - economic nationalism - which, I believe, is one of the principal forces tending to destroy the world to-day. I suggest, also, that the policy of this Government and the party on thisside.ofthe House which supports it, is the via media in fiscal matters - the moderate element in this Parliament - as compared with the two sectional parties which make up the balance of this committee. The other two parties, I contend, represent extremism in fiscal policy, and I suggest that in extremes we seldom find the truth.


.- I should like to congratulate the Minister for Trade and Customs (Mr. White) on. the speech with which he introduced the tariff now before the committee, but I regret that I cannot congratulate him on the schedules accompanying it, because they seem to be out. of harmony with the principles enunciated and the sentiments expressedby the honorable gentleman. For some years the accumulating statistics have been demonstrating that prosperity will, not come to Australia. as a result of prohibitions and high protection ; but the trouble seems to be that politicians have failed to pay regard to this fact. Consequently we have been forced to submit to increased taxation through primage and sales tax owing to the lack of revenue due to a lessening of imports, while dearer goods have reduced sales and employment.

As a debtor nation Australia must trade with the rest of the world. In the United States of America we have a recent example of the disastrous effects of a high tariff policy. If that great country, with all its potentialities and a population of. 120,000,000, failed because of its high tariff policy, how can Australia, a debtor nation with a small population, hopeto win through with a similar policy ? For many months the people of Australia have been anxiously awaiting this tariff session, to see how close1 the Ottawa agreement and the Government’s policy could bring us to a tariff that really paid regard to the interests of the whole community, instead of to the interests mainly of manufacturers. There has beenno lack of writing on the wall as to the danger of a high tariff policy. In 1929, when a Labour Government secured control of the Commonwealth Parliament, we had 120,000 persons unemployed, and in spite of its pre-election promises that,by a policy of high protection, it would find employment for an additional 50.000 persons, two years later, when it was defeated, it admitted that there were actually 300,000 persons out of work. Surely it is time to port our helm and abandon such a futile policy. Surely all who have the interests of the country at heart realize that high protection will not mean a return of prosperity. Yet, with the exception of validating in the schedule the free rate for goods covered by item 174, which we approve, little has been done; a reduced tariff on oilmen’s stores and rabbit traps being the main concessions.

The opinion of the public is reflected in the p:.’ess of this country. This being so, I suggest that as press opinion in New South Wales describes these reductions as “ quite inadequate “, as Victoria declares them to be “paltry”, and as Western Australia expresses the hope that “ Parliament would insist on some material relief “, it is surely evident that Australia, as a whole, is genuinely disappointed with the Government’s tariff proposals. Australia will never regain prosperity until there is prosperity in her export industries, and this will not be possible until there is a closer relation between farm and factory prices. The Government is in a position to extend a helping hand to our primary producers, but it is a job that requires courage, and I regret to state that the schedules now before the committee do not reveal it.

In spite of the caustic condemnation by leading members of the Government of the Scullin tariff- criticism considerately resurrected from Hansard by the acting leader of our party (Mr. Paterson) - we find that there are in section 7 over 100 items and sub-items, “ jumped up “ by the last Government without reference to the Tariff Board, which this Government proposes to validate. -It should be noted, also, that since the exceedingly high rates were imposed by the Scullin Government, an increase in exchange and the imposition of primage duties have given the items in question an extra 30 per cent, protection. Yet, until the Tariff Board reviews all these items, the manufacturers are to have it all. This action by the Government is the most remarkable demonstration of political inconsistency that has come under my notice since I have been a member of this Parliament.

Last week, the Minister for Trade and Customs (Mr. White) referred to the pre-election speech of the Prime Minister (Mr. Lyons) in which the right honorable gentleman said -

The party which T lead takes strong exception to the tariff schedules introduced by the last Parliament . . . We object to arbitrary raising of duties by ministerial action.

But what do we find ? In spite of the condemnation of the policy of the Scullin Government, and despite the additional protection given by primage and exchange, this Government has not the courage to revert to the 192S rates. In spite of the Attorney-General’s retort, that the amendment moved by the honorable member for Gippsland (Mr. Paterson) was a rough and ready remedy, I propose to support it. I contend that the method by which this extreme protection was provided was a rough and ready one, and that there are no grounds now for deferring its correction. One wonders how much longer we must wait before Australia has a government strong enough to take the action which is so obviously needed. If we examine the schedule before the committee and omit the free list, we shall find that the tariff, with exchange, primage and transport costs, gives the Australian manufacturer an average protection of 140 per cent, against foreign importations, and almost 300 per cent, against British goods. Does the Government suggest that this is a “ reasonable “ or “ competitive “ basis, allowing for the relative costs of production, according to clause 10 of the Ottawa agreement? If so, it is no wonder that the index figure in November last for farm products was 1160, as against 1919 for factory goods.

We have been told that the Tariff Board has reviewed over 200 of its reports furnished prior to the Ottawa agreement, and has informed the Government that they are in accord with the agreement. But the agreement provides for a- margin of preference, and stipulates that the duties to be imposed by this country on British goods shall be on a reasonable, competitive basis, allowing for the different conditions in the two countries. I accept the statement of the Tariff Board that; as regards the margin of preference, the reports upon which it has commented do conform to the Ottawa agreement, but with an average of 100 per cent. protection against British imports, one cannot imagine that the Tariff Board would say that the “ reasonably competitive “ basis was maintained. We must apply common sense when dealing with this matter. A continuance of the present state of affairs will not be good for either farm or factory, because under existing conditions our primary producers, upon whom we rely for our solvency as a nation - our exporters of wheat, wool, butter, and other products - are unable to buy factory goods at their present prices. It may be news to honorable members to learn that, after the Scullin tariff was put into operation from June, 1929, to June, 1931, no fewer than 1,165 factories in Australia were closed, and 111,000 employees, or 26 per cent, of all persons employed in factories, lost their jobs. Even the help of our prohibitions and our mountainous tariff has not been great enough to bring success to our secondary industries. Those who continue to advocate extreme protection have not a leg to stand on. We have not a sufficiently high purchasing power to make it possible for our primary producers to buy even essential goods.

The plain fact is that Australia has attempted far too much. Instead of selecting and protecting natural and worth-while industries, she has, by her tariff-making habits, established hundreds of “tuppenny ha-penny” industries that have not a sound economic basis, and are a burden on the community. The employment which they have provided is in no sense an adequate compensation for the added cost of the commodities they produce.

The Deputy Leader of the Opposition (Mr. Forde) will probably retort that the backyard industries of to-day are the thriving factories of to-morrow, but statistics do not justify such a statement. Our official returns disclose that the average number of employees in the 22,000 factories in Australia is sixteen. Only 544 of our factories, or 2-£ per cent, of the total, provide employment for over 100 persons each, while 85 per cent, of them provide employment for only 5.55 persons each. For the privilege of employing these workers our people have to carry a high living cost, which demands wage rates of 100 per cent, more than those which rule in Great Britain, and, according to economists, adds 12 per cent, to the cost of producing the primary products which we export, and from the proceeds from the sale of which we have to meet our national commitments. It is futile to attempt to override these figures by the mere statement that they are not accepted, for it is not only the direct effect, but, also, the far greater indirect effect of this policy which hurt our primary producers. Every honorable member of the committee knows that rent is one of the major items in the calculation of the basic wage. It has been calculated by one of the most careful accountants of Sydney that the tariff adds 100 per cent, to the cost of building a house. This means that a house which would cost £500 without the tariff, costs £1,000 with it. Nearly 100 per cent, is thus added to the the cost of rent, which, in turn, affects the wages rate and the costs in all our transport services, all our marketing organizations, and, in fact, all our industrial undertakings except the rural industries. The repercussions of the tariff adversely affect every section of the people. The cost of making and transporting everything we need, and of transporting and marketing everything we have to sell, is increased tremendously by the tariff. The tariff has a snowball effect; it adds to the cost of living, and the cost of government; it increases the cost of our telephones, and adds to our taxation. When one considers the timber duties and the statements made at the recent glass inquiry, that 175 per cent, protection would be needed to maintain that industry, one wonders why some people are still too blind to see the true effect of the tariff. We can hardly calculate the extent to which the tariff affects costs in this country. It is seen in the increasing expenditure on education and the Civil Service, and in every other walk of life, and it is only the high exchange rate and the run of seasons above the average that are deferring the collapse of Australia’s export industries. Although every member of the committee desires to see our secondary industries expand, and to that end would support a moderate degree of protection, some of us cannot support this absurd and futile attempt to make Australia a great manufacturing country overnight. It is high time that we adopted a commonsense tariff policy. Of course, anything can be produced in Australia at a price; but we must recognize the importance of the price. The burden that has been placed on the people in order to establish certain industries is well nigh unbearable. Ir, is ridiculous to provide 100 per cent, protection as a general tiling. The policy of selecting and protecting really valuable industries, and of buying other tilings from those who buy from us, should he adopted without delay.

A year ago in this chamber I referred to the danger of creating undesirable vested manufacturing interests. Since that time, an inquiry has been made into the match industry of Australia, and we have been informed that this industry, which provides a really trifling amount of employment, is costing our people £190,000 a year.’ It has been stated that if the Government withdrew protection from this industry, pensioned off all the employees at £5 a week for life, and allowed matches to come into Australia free, the country would be better off. Good axe handles which to-day are costing 4s. 3d. to 4s. 6d. each, could be bought before the war for lOd. Nearly half of that increase in price is due to tariff and primage. Everybody knows that we have in Australia no hickory which is really suitable for the manufacture of axe handles. A year ago, also, I referred to copper wire, and showed that protection and monopoly control had caused our telephone services to be burdened to the extent of 47 per cent, to provide work and wages to the value of 10 per cent. In these circumstances, we need not be surprised that our telephone service is so costly. Numerous instances of the kind I have referred to have been revealed by the spotlight of the Tariff Board.

Sometimes the tariff protection granted is equal to two or three times the total wages paid. In some instances our manufacturers, suffering from an inferiority complex, have actually produced balancesheets showing an annual profit of from 12^- per cent, to 100 per cent, on the capital invested, and yet have appealed for additional protection. The purchasing power of the people of Australia is not determined, as my friends on my right so frequently assert, by the wages rate, but by the wages fund. The wages fund is the aggregate value of the total production of the people. With no external borrowing, that is the maximum, and we have to depend upon our primary industries for the greater portion of it, and they must not be crushed by the burden of an overbearing tariff. I repeat again that the time is ripe for the exercise of common sense in our tariff-making.

When we see our wire manufacturers charging 50 per cent, more for plain wire and 60 per cent, more for barbed wire than is charged in England, and when we see our galvanized iron manufacturing monopoly charging nearly 100 per cent, more for galvanized iron than the f.o.b. price in England, we must surely appreciate the fact that something is wrong. Whether this high cost is due to excessive profits, or unduly expensive material, or inefficiency - and I do not think that inefficiency is the cause - there is an obligation on the Government to force the manufacturers to make a price adjustment by means of a reduced tariff. Aus1 tralia cannot afford to subsidize her local manufacturing industries to the same extent as she did when she was able to sell her primary products at the high world’s prices of five years ago.

The position in regard to the manufacture of bolts and nuts also warrants review. The rods from which the bolts are made are protected by a tariff of 3s. 6d. per cwt. ; the bolts themselves are protected by a tariff of lis. per cwt.; but the price of these goods, which are almost wholly machine made, is 22s. per cwt., or 100 per cent, more than in England. If we consider the duties on goods manufactured from our great primary products, we find many anomalies. Our maize-growers, for example, receive a protection of less than £d. per lb. on their product, but the manufacturers of corn flour, who have recently engaged in a vigorous publicity compaign through the country press, claiming that it is in the interests of the growers, are requesting a protection on corn flour of 3d. per lb. They want six times more on the corn flour than is granted on the maize ! Wheaten flour is protected to the extent of less than id. per lb., yet the tariff on biscuits is 3d. per lb. The tariff on vegetables is 4d. per lb., but when these same vegetables are eonverted into pickles, the tariff becomes 5d. a pint. The tariff on lemons is id. per lb., but on lemon peel it is 6d. per lb. Goat hides are admitted free, but when they are converted into chamois leather, they carry a tariff of 40 per cent. Other hides can be bought more cheaply in Australia than anywhere else in the world, yet calf leather carries a 25 per cent, duty, glace leather a duty of 2s. 6d. per lb., and patent leather a duty of 2s. per lb. Too little attention has been shown to the effect of the duties on iron and leather on other industries which have to use these articles as their raw materials. A careful examination of the whole of the tariff schedule shows that immediately our primary products, which are being produced at a loss, are touched by the manufacturers, a huge tariff is provided to ensure that their capital will be safeguarded, and that they and their employees get good returns. The statement made the other evening by the honorable member for’ “Wakefield (Mr. Hawker) that Australia is being governed for the greedy few is perfectly true. I recognize that the home price of a few primary products is controlled ; but this is a temporary expedient to compensate them for burdens placed upon them. As the ratio of exports df these products increases, they will lose the advantage, and will then press more strongly than ever for real tariff reform.

Our tariff must be put on a more sensible basis. As tlie honorable member for Gippsland (Mr. Paterson) said the other day, our primary producers would at once agree to a 50 per cent, cut in any protection that they may enjoy if those engaged in secondary industry -would do likewise. The Government’s method of implementing the Ottawa agreement has greatly disappointed country people, who consider that the margin of preference should have been provided in many ‘ instances by reducing the British duty instead of by increasing the foreign duty. “What the

Attorney-General (Mr. Latham) said on Thursday night last, when he “let the cat out of the bag,” is no credit to Australia. If it is a fact, as he stated, that the increases in the tariff affect almost without exception articles for which Great Britain already has the Australian market, then Australia has really given Great Britain nothing. It is no wonder, therefore, that it took so long to get a concession from Great Britain in regard to meat, and that for the purpose of keeping right with Denmark, she is now asking Australia to restrict her exports of butter. It is four months since the Ottawa agreement was dealt with in this chamber, and up to date we have given Great Britain practically nothing. I, therefore, urge the Government to show its bona fides by immediately putting the items in section 7 of the schedule back to the old 1928 rates, pending the receipt of reports from the Tariff Board. I also urge that there should be action in accordance with the speech of the Minister for Trade and Customs (Mr. “White) with the object of putting the tariff on a reasonably competitive basis. If the Government takes a step in this direction, it. will show that it has a real regard for the community as a whole and an honest intention to give effect to the Ottawa agreement.


.- The honorable member for Corio (Mr.’ Casey) gave us a long dissertation this’ evening on the Brussels Conference, in the course of which he dealt with finance, the gold standard and many other subjects; but he touched very lightly upon the effect that high tariffs have had upon, trade. It is true that he quoted from a report of the League of Nations to the effect that high tariffs have caused a sense of injustice to develop in certain communities ; but he did not tell us of the evils of the trade war in which almost all the nations are engaged at present. I will admit, however,’ that in concluding his speech he admitted that high tariffs must be injurious, not only to Australia, but also to the1 world at large, and yet. he favours their imposition here. I hope that the Minister “ for Trade and Customs (Mr. “White) listened to the arguments advanced by the honorable member’ for Riverina. It has been suggested that we ought to have a board to watch prices- I remind the Minister of a letter which he sent to a former Minister for Trade and Customs with regard to barbed wire and wire nails. Certain persons were told by the only drawers of wire in Australia, that unless they undertook not to sell their goods in Queensland and New South Wales, to fix the price in Tasmania, and to raise the price in Victoria £6 a ton, dumping would be continued to their ruin. I obtained a promise from the then Minister thai; the Tariff Board would inquire into the case, but one individual having withdrawn from the matter, the Minister subsequently recalled his direction to the board. What action does the Minister now propose to take to prevent this undue restraint of trade? I am surprised to hear the speeches of those who call themselves protectionists to-day. I should like to quote some of the earlier speeches of the right honorable member for North Sydney (Mr. Hughes). Many persons classed themselves as protectionists in the early days. They believed that infant industries should be built up and assisted to stand upon their own feet. To-day, however, we cannot escape from the fact that their attitude is dictated by a powerful outside influence that is exerted over political parties. I do not intend to say many things that I feel very much inclined to mention. The Minister, in introducing his schedule, referred to extremists on both sides, and I suppose that I shall be classed among them. He said -

The Government’s policy, steers a course midway between these extremes, maintaining a fair and reasonable balance between primary and secondary industries. ‘

Could anybody, after hearing the speech of the honorable member for Riverina, imagine that that statement was justified? Nothing like equilibrium between primary and secondary industries has been maintained. The Minister went oi> to say -

Operating equitably and away from tha extremism of sectional interests, the result (should lie a healthy reaction in both primary and secondary industries, with increased employment in the community as a whole.

Can the Minister show one item in his new tariff that will be of help to the big primary industries?

Mr White:

– It will assist every primary industry.


– The Minister must be speaking with his tongue in his cheek. That the equilibrium between primary and secondary industries has been destroyed was recognized by the ministerial party when in opposition. Let us consider the January report of the National Bank of Australasia. Nobody will say that this institution is anxious to promote the interests of the primary producers in preference to those of our manufacturers ; its ordinary monthly reports rather suggest the reverse. The report gives the index figure representing the price levels of secondary and primary products in the year 1911 as 1000. It shows that in 1929 there was equilibrium between them, secondary products standing at 1825, and primary products at 1862 ; but in 1931, secondary products were 1,953, while primary products had fallen to 1,267. In June, 1932, the figures were 1,926 and 1,189 respectively, while in November, 1932, they were 1,919 and 1,360 respectively. In the face of those figures, how can the Minister for Trade and Customs talk about preserving equilibrium between primary and secondary industries? A graph issued by the Bank of New South Wales shows the rapid fall in the value of primary products, and last year, although wages had fallen by hundreds of thousands of pounds, the price levels of secondary products had increased. It is ridiculous to attempt to hoodwink the people over this matter. In 1929, most extraordinary duties were imposed on socks, stockings, and wearing apparel generally! The report “of the Economic Committee appointed by the Bruce-Page Government showed that the duties were already extraordinarily high ; yet the Scullin Government increased them in many cases by 500 per cent., plus a 50 per cent, surcharge. In some instances, a duty of 10s. a dozen was increased to 50s. a dozen.

We have heard the Minister boasting about the* reductions made under his new schedule. It reminds me of a chemist’s shop-window that is practically empty except for coloured bottles. Item 174 certainly contains a long list of articles imported principally from Great

Britain, but hardly one of which is purchased more .frequently than once in a generation. The manufacturer who buys one of them may never want another. These goods replace goods previously admitted free of duty by by-law. Now, a manufacturer will know that the piece of machinery he requires will be admitted from Great Britain free of duty, and he will no longer find it necessary to get Mr. Hume Cook, or some other individual, to intercede with the Minister to have the article admitted free of duty under by-law. We ought, however, I contend, to amend this schedule by providing that any tariff alteration in future is made, not by by-law, but by regulation, which will enable the House, if it thinks fit, to review the action of the Government. I have in mind a decision of this Parliament which stands to-day, that fertilizers should be admitted free of duty. It was recognized that it was important that fertilizers should be procurable as cheaply as possible. Sulphate of ammonia was formerly classified as a chemical, and not as a fertilizer, but influence was brought to bear to have all fertilizers capable of being used as a substitute for sulphate of ammonia classed as chemicals, and made subject to a duty of 25 per cent. That, in my opinion, was an immoral action. I believe that if those who were called upon to pay that duty had had the courage to dispute the departmental decision, they would have been successful in their action.

Mr White:

– When did that happen ?


– In 1926. But the classification still prevails. It was only four or five months ago that I wrote to the department asking that it be withdrawn. Crude oil from which all values have been extracted and which has been recharged with petrol up to 70 per cent, is admitted duty free as the result of ministerial instruction, and not by the decision of this Parliament, an action resulting in a loss to the revenue of. hundreds of thousands of pounds. I hope that tariff alterations will not be made, as in the past, by means of departmental by-laws, but that the House will insist on the alterations being made by regulations, so that it will be possible to move in this Parliament for their disallowance. If honorable members peruse the weekly notices, they will see under item 174, lists of goods which are admitted under the authority of the Minister at concession rates. I hope that the present Minister will do as was done in 1920, each year laying on the table of this chamber a report stating the occasions on which, and to whom, remissions of duty have been made, and the reasons why the ordinary rates have not been charged.

In view of the declarations made by those who were in opposition two years ago, I am disappointed that something substantial has not been done” to relieve the primary producers of the enormous fiscal charges which they have to bear to-day. Several times in this chamber, I have referred to a speech made in 1929 by the right honorable member for Flinders (Mr. Bruce). It has also been quoted by the Attorney-General (Mr. Latham), who fully endorsed it, and I intend to repeat a passage from it to-day. Mr. Bruce then said -

Two alternatives face Australia to-day. Either we oan resolutely attack this problem of reducing our costs of production, and by so doing reduce our costs of living, expand our avenues of employment, maintain and augment our standards of living, and increase our national wealth; or we can refuse to recognize the needs of the position, and allow our national wealth to diminish, and unemployment to increase until, faced with a national crisis, we are forced to lower our standards of living and reorientate the whole of our national life. Between these two alternatives, can there be any hesitation?-

The present Prime Minister (Mr. Lyons) is one of those who were responsible for the extraordinarily high tariff introduced by the Labour party; I am satisfied that no blame is attachable to the officers of the department regarding it. In one instance, hoods purchased at 2s. 8d. per dozen carried a duty of 60s. a dozen, as well as a surcharge of 50 per cent. I question very much whether the departmental officers had anything to do with framing that tariff.

Mr Forde:

– Invariably they had quite a lot to say, and conducted many investigations.


– The Deputy Leader of the Opposition (Mr. Forde) must have put to very ill use the information he obtained, or the Government would not have imposed an embargo on the importation of galvanized iron just after Lysaght’s had imported 10,400 tons.

I had expected something more as a result of the Ottawa agreement. The British Government has granted concessions to Australia which will result in increasing the cost of living in Great Britain, and the cost of raw material used in British factories. Except for wheat and wool, Australia has to rely almost exclusively on the British market for the disposal of her primary products. If the cost of living and the cost of raw material increase in Great Britain, that country must inevitably lose a considerable portion of her export trade, and will, theref ore, become a less valuable customer to us. In view of the concessions which Great Britain has granted to us, we should have made an endeavour, by means of tariff adjustments, to make the Ottawa agreement of more value to her, Nothing in that direction has been done except to increase the duties on foreign goods entering Australia.

The honorable member for Corio (Mr. Casey)quoted figures regarding the increase in duties. I have here a statement prepared by the Statistician’s department showing the increases in duty which have taken place from 1918-19 up to the present time. The table is as follows: -

For the purpose of ascertaining the amount of duty payable, the Customs Department adds 10 per cent. to the value ofall goods imported, so that the actual value of dutiable goods imported last year may be set down at about £23,200,000. I assume, also, that about £3,000,000 worth of goods come in every year under concession rates, so that import duties were actually paid last year on only about £20,000,000 worth of goods. Nevertheless, the customs revenue for that year were £19,800,000, or very nearly 100 per cent. on the value of the goods imported. These high duties inevitably react against primary industries. In Western Australia there is considerable activity in the mining industry at the present time, and in the gold-mines, owing to the higher prices obtainable for gold, about 8,000 more miners are employed now than during recent years. The Wiluna Gold-mine disburses £28,000. a month in salaries and wages. The mine is situated in the interior of the State, and has to rely on railway communication, but high duties have to he paid on every bit of railway material used in the construction of the line which serves the district. Some time ago the directors of the company forwarded a communication to Mr. Thomas, Secretary for the Dominions, and sent a copy to the Prime Minister (Mr. Lyons), and to myself. In this document they set out how they were oppressed by high charges. They had made every endeavour, they said, to support Australian industry, but had been compelled to buy large quantities of material in Great Britain. Since the commencement of operations, they had paid over £100,000 in duty. Some time ago the Tariff Board presented a report on tools of trade, and it was shown that steel which cost £5 a ton in Great Britain cost £14 a ton in Australia. When one considers the quantity of steel and steel goods in addition to other requirements usedby the Wiluna Gold Mining Company, it is possible that that company has paid £200,000 more in the course of developing its property than it would have had to pay in any country other than Australia. An American mining engineer, after turning down a proposition in Australia, stated that plant which would cost £250,000 in the United States of America would cost £525,000 in this country. It may he true, as has been claimed, that the iron and steel industry should be regarded as a national one, and that we should make sacrifices to enable it to carry on; but assistance should be granted in the form of a bounty, instead of by imposing a duty on imported goods. As a matter of fact, it should not be necessary to afford such a large measure of assistance to the iron and steel industry in Australia. The works are situated right on the coal-fields, and unlimited quantities of ore of the highest quality are available. It is claimed that it takes 2 tons of ore in England, and 2.8 tons in Germany to . make , the same quantity of steel as can be made from one ton of Australian ore.

The harmful effect of our high tariff may be seen in the .cost of agricultural implements. I am proud of the success achieved by the H. V. McKay Harvester Works, hut I do not agree that the industry should have been subsidized to the extent of compelling the farmers to pay such high prices for their machinery. Every now and then advertisements are published by the high tariff interests claiming that Austraiian industry has benefited the primary producers, and comparing prices of agricultural machinery at the present time with those prevailing in 1920-21. Of course, everybody knows that during those years prices soared to unheard of levels. In order to arrive at a fair comparison, we should put presentday prices alongside those of 1914. The prices of primary products have fallen practically to zero. Why, then, should the price of manufactured goods remain so high ? The Sunshine Harvester Works at one time had a fine trade with the Argentine, but lost it owing to the high cost of manufacture in this country. In an effort to regain the trade, the company has sent Australian engineers with Australian patents to Canada, where its implements will be manufactured at a lower cost, although higher wages have to be paid. The honorable member for Forrest (Mr. Prowse) and I, some time ago, produced figures prepared by Mr. Wood, a Perth accountant, comparing farm costs to-day with those of 1914, and it was shown that what would cost £1,000 in 1914, now costs £2,400.

Undoubtedly, we are faced with seriousproblems to-day, and we must consider how best to solve them. The honorable member for Corio quoted an article by the economist, Mr. Keynes, who stated that the only way to relieve the world depression was to issue immediately £1,000,000,000 worth of gold certificates. It is much easier to make that proposal than to give effect to it. We, in Australia, cannot influence such matters, and overseas the situation is complicated by reparations, war debts, and the gold standard, as well as by tariffs, which I regard as the most important factor of all. International animosities are engendered and fostered by tariff barriers. How are we to induce creditor countries such as England, France and the United States of America to put up the gold necessary to back the issue of gold certificates? These suggested remedies take time to put into operation, and, in the meantime, are we to allow our primary producers to be ruined without taking any action to help them? We cannot influence economic policy on the other side of the world, but Ave can do something to help our primary producers by reducing the present absurdly high tariff. The very least that the Government could, and should, do is to return to the 1920 tariff.

In our tariff making we .have got onto the wrong track altogether. We embarked on a high protective policy before we had built up our primary industries, or developed all our virgin country. We must have a larger population before we can make a real success of big, secondary industries. No doubt some are* capable of prospering, even with our present population, but there is always the danger of building up powerful, vested interests behind high tariff walls. Canada has been much more successful in establishing secondary industries than we have been. It can manufacture for export, and compete in the markets of the world. Why has Australia not been able’ to do the same? Australians as a whole are better educated, and are, I believe, a more virile people than the Canadians. Our trouble is that industry has been ruined by the wretched interference of politicians, with their Navigation Act, industrial restrictions, and high tariff. Mr. Bennett, the Prime Minister of Canada, stated this year that Canada was ranked fifth among the nations of the world in the export of secondary products, and that it imported from 700,000 to 800.000 tons of coal from Great Britain. Next to those of Wales, we have the finest coal-mines in the world ; we have magnificent iron, and practically every other mineral deposit needed to build up industries. Why, then, are we so far behind other nations? The Canadian tariff, a copy of which I have before me, shows that our duties are from 400 to 700 per cent. higher than those of the sister dominion. There is something wrong. One cause is that this high tariff wall has been specially built up for a section of the community which is able to demand and obtain that which it requires. If such things go on, there will be a revolution. I have told the people whom I represent in Western Australia that it is high time this legalized robbery ceased. The people of Western Australia are demanding secession, . and there are constant rumblings of discontent in South Australia and Tasmania, which States are not satisfied with the treatment meted out to them by this Parliament. I am aware that protests in. this chamber can do little good;but the result of the referendum in Western Australia will show to the world how a nation can be destroyed by greed and corruption. We are in a minority, for the Government’s natural enemy has come to its aid for the moment.But I warn the Government that there is a movement growing in Australia designed to alter the existing economic conditions and to obviate many of the ills from which the country is now suffering, and which can be attributed only to a careless disregard ofthose economic conditions that have ruled the world for centuries.


.- A visitor to Canberra who listened to sufficient of the debates that took place this afternoon would go away in a kind of maze, and be in a state ofbewilderment as to the outcome. During this and previous tariff debates we have heard speeches coloured with the robust freetrade brand of fiscalism that characterizes the Country party. To-night we listened to two such utterances - one by the honorable member for Riverina (Mr. Nock), and the other by the honorable member for Swan (Mr. Gregory). The honorable member for Riverina quoted the remark of the honorable member for Wakefield (Mr. Hawker), that this tariff is government of the feeble for the greedy. The honorable member should cultivate a wider vision, and ask himself whether such a remark might not aptly be applied to the desires of himself and those who think with him. Is it not greediness for a section of the community - the primary producers - regardless of economic circumstances and the proper development of the nation, to ask, “Let us have freetrade in all those things which we do not grow.”

Mr Nock:

– Who said that?


– With rare exceptions, that is the motif running through the dirge of members of the Country party. They are blatant freetraders. Now and again they slip on bananas, rice or some other primary product; but, generally speaking, they want all the commodities that they use bought in the cheapest market. Such a policy would result in our remaining a primary industry nation. I am confident that that will never become the policy of this Parliament, for, obviously, no party supporting it. would be endorsed by the people.

It might be claimed that the protectionist policy of the Labour party is just as robust and blatant as is that of the Country party. I admit the soft impeachment that I am a protectionist. I have been one all my life.

Mr Prowse:

– The honorable member is biased.


– Possibly I am, but I hope that, at least, I possess vision, and have not an outlook governed by the needs of only one section of the community. I desire to see Australia develop and become a worth-while nation. That cannot be done by encouraging merely primary industries.

The honorable member for Riverina said that there were 22,000 factories in Australia, each of which employed, on an average, sixteen persons. A similar remark could have been applied to the factories of Great Britain, theUnited States of America, France and Germany in the early days of the industrial development of those countries. It is all very well for honorable members who possess freetrade leanings to want Australia to remain behind in the race for existence, while every other country goes ahead with its mechanized development of iron and steel, textiles, and other industries. ‘ It cannot be done. Every other country has paid the price for the protection of its secondary industries, and

Australia cannot establish those industries unless it, too, is prepared to pay the price.

The development in recent years of the mechanism of industry throughout the world is unparalled in history. That which to-day is produced by 70 men took 100 men fo produce but ten years ago. In order to relieve unemployment in the United States of America vast credits were made available for the remaking of roads, much the same as was done on a small scale in the Federal Capital. Old and indifferent roads were pulled up and substituted by first-class roads of a permanent character. Apart from the fiscalism of that country, the Government of the United States of America is on similar lines to that of Australia. Existing administrations in both countries believe that private enterprise should control business, and invariably let out work on contract. When these huge road-making activities began in the United States of America, several of the contractors set their engineers to work to produce special machines for the purpose. They evolved pieces of mechanism which, aided by twelve men, dug up and relaid in concrete, eight miles of road a day. I grant that there was also an army of vehicles conveying the necessary material to the centre of operations, and that men were employed in mines, quarries and cement works to provide the material; but that one machine actually did the work of hundreds of men. There has also been developed in that country a mechanical unit for the making of car bodies, into which the raw material is fed in the form of sheets of steel. It stamps out 8,000 car bodies a day ! I could quote 100 other illustrations of the extraordinary development of machinery and the displacement of labour in the United States of America. If civilization is to continue it will have to protect itself, either by a most drastic reduction in the hour3 of labour or by a complete control of the machines, which, otherwise, will act as a veritable Frankenstein monster to it. Machinery will have to be controlled for the benefit of the people, and not for that of private profit.

This marvellous development in the mechanism, of industry has produced wealth that was undreamed of even 20 years ago. Never was the world richer than it is to-day. Never has it enjoyed greater harvests of foodstuffs, or .produced greater quantities of textiles, raw materials and other utilities. Never was there a more highly developed system of education. Never was any age better provided with all those things which go towards the making of a healthy and happy community. Yet, paradoxical as it may seem, never has the majority of the peoples of the world been poorer id the necessaries of life. Never has there been such suffering, such degradation, such poverty. All of this is directly attributable to the inefficiency and incapacity of the capitalistic machine in failing to provide a medium of exchange between the producer and consumer. It is a position which threatens to overwhelm civilization. According to the records of the International Labour Office at Geneva, there are at least 30,000,000 persons out of work. Assuming that each nas a family of three dependent on him, we calculate that -there are in the world at least 120,000,000 persons on the dole or on the verge of starvation. That is the problem which faces present-day civilization, one created by the greediness of private enterprise. Through the refusal of capitalism to retreat one inch from the old orthodox inefficient and inequitable methods, which it found so profitable in the past, the world is likely to be engulfed in calamity. The cultured and the educated have failed miserably in their efforts to govern the world properly. Out of this horror which has enveloped us emerges clearly the fact that the common people must control finance and price levels. They must control the machine. It is only, by that means that we can hope to save this civilization.

The members of the Country party, whose policy is supported, by some honorable members behind the Government, are anxious to prevent Australia from participating in the great mechanical development which has taken place in other countries. As the Deputy Leader of the Opposition has said, the inclusion of articles 9, 10 and 12 in the Ottawa agreement constitutes one of the greatest political ramps ever perpetrated in Australia. The principles embodied in those three articles are that protection by tariff shall be afforded only to those industries which are reasonably assured of sound opportunity for success; that there shall be full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production, and 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. Those principles are to be observed as the definite and permanent policy of Australia for the next four and a half years. Such a policy must, of course, have a grave and adverse effect on the development of Australian industries. It is certain that those three articles which have been accepted by this Parliament cannot last. Every day attacks are being made upon them. To-day in this chamber an attack was launched, if not at the agreement itself, then most certainly at the principles embodied in it. The ink on the agreement is hardly dry when one party to it has requested an alteration which if agreed, to, will be to the serious detriment of this country. British financiers who have interests in foreign countries are anxious to restrict the flow of goods from Australia to Great Britain. To-day we have had an illustration of that. An agreement such as the Ottawa agreement should be one as between brother and brother. It should have behind it equity, friendship and kinship. Unfortunately, the position to-day is that, in regard to exports to Great Britain, the thick end of the stick is held by foreign countries. The Scullin Government laid down definite tariff principles which were enunciated in this chamber, on various platforms throughout Australia, and in Great Britain, and other countries. It was prepared to enter into a definite reciprocal treaty as between Australia and the Mother Country. It was prepared to give Great Britain, as against the foreigner, every facility for the sale of its manufactures in Australia. Tei in return for the concessions that we have given to Great Britain, that country is actually asking us to accept a restriction of 6 per cent, with regard to our butter export, while foreign countries, which produce the great bulk of the butter consumed in Great Britain, are being asked to accept a restriction of only 12^ per cent. In these circumstances, how can we expect the Australian public to have a feeling of friendship towards Great Britain? The people of Australia are being used by certain sections in Great Britain as hewers of wood and drawers of water. The Labour party, if returned to office at the next election, will immediately review the agreement and ask from Great Britain much more than was obtained by the representatives of Australia at the Ottawa Conference. I can imagine our politically youthful representatives attending the Ottawa Conference with a feeling of trepidation as to how to conduct themselves before hard-headed British statesmen reared in an atmosphere of tradition and diplomacy. There is no doubt that the British statesmen took advantage of the inexperience of our representatives and forced upon them, an agreement which still leaves Australia in the position of a wood and water joey. We have, unfortunately, been in that position too long, mainly because of the actions of such men. as the PostmasterGeneral (Mr. Parkhill) and the Minister for Trade and Customs (Mr. White). 1 have already referred to the robust and more or less blatant free traders among the Country party, and to the just as robust and blatant protectionists of the Labour party. This Government is in an unhappy position because it is trying to assist the freetraders while at the same time’ pandering to the protectionists. While I congratulate the Minister for Trade and Customs upon his elevation to Cabinet rank, I regret his loss to this chamber in the capacity of a private member. He and his colleague the Postmaster-General have become very subdued since their acceptance of ministerial responsibility. I remember that, during the regime of the Scullin Government, when Australia had a proper fiscal policy, those two honorable members fought practically night and day opposing that policy, and, although their cause was forlorn, we could not help but admire their efforts. It is a. tragedy that immediately such virile men take office, they become tame.

Mr Archdale Parkhill:

– We have as yet had little opportunity to fight.


– The PostmasterGeneral will have an excellent opportunity to fight when this country is once more under sound government. I can quite appreciate the fact that, when this tariff schedule was introduced, the people of Australia had grave misgivings regarding it. The only bright spot about it is that it is not half so bad as the one which the Minister for Trade and Customs advocated when a private member, and not a quarter so bad as the one advocated by the Postmaster-General when in a similar position. That is a mercy for which we are truly thankful. I cannot congratulate the Minister upon the introduction of this tariff schedule. It has, unfortunately, had the effect of increasing unemployment and of causing apprehension in the minds of those who are engaged in the industries of this country.

Mr White:

– Where is the unemployment?


– If the honorable the Minister does not know that, I cannot tell him.

Mr White:

– What unemployment has been caused by the introduction of this tariff?


– I am referring to the unemployment caused by this Government’s policy, which is not only ruining many secondary industries, but also preventing others from being established.

Let me refer again to the principle embodied in the Ottawa agreement to the effect that there should be full opportunity of reasonable competition. What chance have Australian industries of developing in the face of reasonable competition from English manufacturers with their greater experience? It will be impossible to establish hew industries in this country under the policy of the Government as set out in the Tariff Schedule laid on the table of this House. The policy of the Labour party is to protect Australian industries. That policy, when put into operation by the Scullin Government, conferred great benefits on this country. The fiscal policy of the present Government has caused unemployment; it has prevented the investment of money in secondary industries in Australia; and it must tend to retard the development of this great land.

South Sydney

– I congratulate you, Mr. Nairn, on your appointment as Temporary Chairman of Committees, as I do also the honorable member for Balaclava (Mr. White) on his elevation to the Ministry as Minister for Trade and Customs. The new Minister’s commercial knowledge and ability will, I feel sure, enable him in this position to render valuable service to the’ people of Australia. I hope that the strain of his arduous duties will not impair his health, and also that his predecessor (Sir Henry Gullett) will soon be back in the chamber to participate in the discussion of the tariff.

All members will recognize that the framing of a tariff in these troublous times is a colossal task. It is no easy matter to consider the interests of the consumers, while attempting to placate both manufacturers and importers. Any Minister for Trade and Customs who could satisfy all sections of the community in these circumstances would indeed be a genius. While in a tariff debate, one is tempted to embark on theories; I prefer to deal with facts. In framing a tariff, we must not lose sight, of our primary industries, whose products have to be sold in the world’s markets. We must consider the position of the buyers of our goods overseas, and be careful that no action of ours will have an adverse effect on our overseas trade. All nations seem to be engaged in erecting tariff walls against the goods of other nations, some of them going so far as to practise prohibition in that connexion. The people of all lands are being advised by their leaders to purchase goods made only by their fellow countrymen, and, as far as possible to keep out imports from foreign countries. Even conservative England has departed from her traditional policy, and has espoused protection. As the old song says, “ Everybody’s doing it.” In. considering the position of Australia, the question arises whether this, the youngest nation in the world, is to lead the nations in framing a low tariff policy, thus altering its economiccondition, or to preserve the status quo. Undoubtedly, the vast majority of the people of Australia are protectionists by sentiment as well as by policy, and for that, reason, we have built up a vast chain of manufacturing industries in this country with plant and property valued at £236,000,000. If to that sum we add the value of the stock and reserves,we reach a total of approximately £500,000,000 invested in manufacturing industries in this country - an amount almost equal to half of our national debt. In the 21,750 manufacturing establishments in Australia, about 338,000 Australians are employed evenin these times of depression. These factories have an annual output valued at approximately £300,000,000, and pay to their employees about £62,500,000 per annum. In considering what duties should be imposed on imported goods, we should bear these figures in mind. [Quorum, formed.’] At one time Australians regarded with a measure of suspicion goods manufactured in this country. It must be admitted that there were grounds for that suspicion, the chief of which was the inferior quality of some of the Australian products marketed. To-day the position’ is different. Australian manufacturers have learned their lesson, and their products now compare with the best that the world can produce: The outlook of the Australian consumer has also changed. The younger generation possesses a protectionist complex. Our young people have before them the history of modern Australia. They have seen their elder brothers earn imperishable fame on the battlefield; they have seen graduates from Australian universities compare more than favorably with those of other universities; and they have seen Australian athletes hold their own against those of other nations on the fields of sport.

Mr Gander:

– Notwithstanding the adoption of leg theory tactics.


– Captain Woodfull interpreted the Australian sentiment on the cricket field when he refused to have anything at all to do with any system likely to destroy the ethics of cricket. These younger people in our midst are asking why we cannot do in the manufacturing realm what we have done in other spheres. The people of Australia believe in a policy of protection, but they do not want a prohibitory tariff. The duties should be so fixed that they will make impossible the . creation of monopolies. However, to use the now famous phrase of the Postmaster-General, monopolies are generally prevented by the “withering blast of competition “. Many traders will say that these withering blasts often develop into fatal gusts which destroy the industry altogether. Goods which cannot be manufactured in Australia should be placed on the free list, having due regard to the necessity for obtaining revenue, and also to the desirability of granting preference to British manufacturers. That principle should apply particularly to goods used in primary production, and in the preservation of health.

As it is impossible for Parliament to analyse every item in a tariff schedule, it is desirable that there should be an independent tribunal to guide it in tariff matters. The Tariff Board, which has been set up for that purpose, should be composed of men with practical experience, otherwise it would be like having, on the cricket Board of Control, men who have never played the game of cricket. In saying that, I make no reflexion on the present members of the board.

In short, the tariff formula should consist of adequate protection to industries that can be conducted on a commercial and economical basis, an independent tribunal should make recommendations as required on tariff proposals for the guidance of Parliament, and goods that cannot be produced here should be placed on the free list- with due regard to revenue and British preference. In that way the tariff would be framed in the best interests of the vast majority, and would maintain the progress and prosperity of the people of Australia.

Progress reported.

page 225


Easter Vacation

Prime Minister and Treasurer · Wilmot · UAP

– I move -

That the House do now adjourn.

In doing so, I. desire to state the Government’s intention in connexion with the Easter vacation in order that honorable members may make their arrangements. It is intended that the House shall adjourn on Thursday the 6th April and resume on “Wednesday, the 26th April, the day after Anzac Day. In that way it is hoped that those honorable members who desire to be present in their own electorates on Anzac Day will be able to do so.


– Such an extended vacation at Easter will be of no use at all to members from Western Australia and Queensland. Honorable members representing constituencies in those States would prefer a vacation of one week or a fortnight at most. It takes a week each way to visit those States.

Mr Latham:

– The adjournment will be for twenty days.


– The trip to and from Western Australia involves a fortnight’s railway travelling, which at this time of the year is tedious, and I would have only one week in my own State. As the Christmas adjournment lasted nearly four months, honorable members from the more distant States would prefer that, after only a short respite at Easter, the House should proceed with the important business now before it.

Question resolved in the affirmative.

House adjourned at 10 p.m.

page 226


The following answers to questions were circulated: -

Cockatoo Island Dockyard


n asked the Prime Minister, upon notice -

  1. Is it a fact that by arbitration the. employees in the Cockatoo Island Dockyard obtained against the Commonwealth Ship Construction Board certain privileges relating to superannuation, furlough, &c. ?
  2. Was the control of the dock then transferred to another government agency, which was ultimately held not to be bound by this award, because not a party to it? 3.In the recent leasing of the dock has any consideration been given to claims of any employees under the heads of superannuation and furlough?
  3. Are many of the employees concerned men of long standing, including a large number of twenty years and over, whose salaries have been reduced on account of these rights ?
  4. Will the Minister give sympathetic consideration to the moral claims of men so situated ?
Mr Lyons:

– The subject of the honorable member’s question is now receiving attention, and a statement on the matter will be made when there has been full examination of the questions which arise.

Monetary Policy of the United States of America.

Mr Holloway:

y asked the Treasurer, upon notice -

In view of the serious nature of the banking crisis in the United States of America, and its possible affect upon Australia and other countries, will he inform the House what percentage of the banking and/or monetary system of the United States of America is in the hands of private enterprise, and what percentage is owned and controlled by the Government of the United States of America?

Mr Lyons:

– Inquiries are being made, and the honorable member will be communicated with as early as possible.

White Australia Ideal

Mr Nelson:

n asked the Prime Minister, upon notice -

  1. Has his attention been drawn to recent news items in reference to opening North Australia to the Japanese for settlement, advocated by Lieutenant-Commander Kenworthy, addressing a rally of the League of Nations Union ?
  2. If so, will he instruct Australia’s delegate at theLeague of Nations to combat such statements made by responsible persons in connexion with Australia’s domestic affairs?
  3. Will he also instruct Australia’s delegate to state that Australia will resist to the fullest extent any suggestion such as that made by Lieutenant-Commander Kenworthy?
  4. In view of certain occurrences in North Australian waters over a period of many months, will the Commonwealth Government push on with a vigorous developmental policy as a checkmate to any unforeseen development ?
Mr Lyons:

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

  1. I have seen such a report. 2 and 3. Lieutenant-Commander Kenworthy was for a time a Labour member of the House of Commons, hut does not occupy an official position. The action proposed would give undue weight to an unofficial expression of opinion, and is therefore undesirable.
  2. The Government will continue to take steps to promote the development of North Australia.

Newnes Shale Oil Deposits

Mr Beasley:

y asked the Prime Minister, upon notice -

Will he lay on the table of the House all the papers in connexion1’ with the winding-up of the agreement between the Commonwealth Government and C. O. Chambers and R. A. Treganowan for the exploitation of the Newnes shale oil-field?

Mr Lyons:

– The papers referred to by the honorable member are being placed on the table of the Library.

Imperial Economic Conference at Ottawa.

Mr Lyons:

s. - On the 9th March, the honorable member for East Sydney (Mr. Ward) asked me a question, upon notice, in regard to the cost of the Australian delegation to the Imperial Economic Conference at Ottawa last year. I am now in a position to state that the cost of the conference to the Commonwealth Government, as brought to account in Australia to this date is £6,586, in respect of which somesmall adjustments have yet to he made. The allocation of the expenditure is as follows: -

The miscellaneous expenditure includes cost of telegrams, transport, printing, and stationery, &c. The official designations of members of the delegation were published in Hansard of the 8th September, 1932, page 324.

Mr White:

– On the 10th March, the honorable member for Maribyrnong (Mr. Fenton) asked the following questions, upon notice: -

  1. Whether on the first shipment of Russian timber a 10s. per 100 super feet “ dumping “ duty was paid in addition to the ordinary duty?
  2. Is it a fact that a shipment of 1,500,000 feet recently arrived, and that only the ordinary duty has been imposed upon it?
  3. Is it a fact that this shipment and its sale and distribution are seriously affecting the timber industry of Australia?

I am now able to furnish the honorable member with the following information : -

  1. A shipment of undressed timber was imported from Russia in June, 1931. Delivery of such timber was allowed upon payment of the ordinary duty, and, in addition thereto, upon deposit of a cash security to cover possible dumping duty, the amount of such security being calculated at the rate of 10s. per 100 super feet. This security was conditional upon the timber not being sold at a dumping price.
  2. A shipment of approximately 1,500,000 super feet of Russian timber was imported about September, 1932. Portion of this shipment, representing approximately 65,000 super feet, was delivered upon payment of the ordinary duty as it was considered that detriment to Australian industry did not result from the importation of such timber. The question of action under the Customs Tariff (Industries Preservation) Act in respect of the balance of this importation has been referred to the Tariff Board for inquiry and report to the Minister. Pending receipt of the Tariff Board’s report, delivery of the latter timber is being allowed only on deposit of cash’ security to cover possible dumping duty, in addition to payment’ of the ordinary duty.
  3. No. It is understood that the timber is not being sold below the price of other comparable imported timber.

Invalid and Old-age Pensions.

Mr Lyons:

s. - On the 10th March, the honorable member for Dalley (Mr. Rosevear) asked the following questions, upon notice: -

  1. Is it a fact that the Invalid and Old-age Pensions Department in Sydney, in relation to the matter of reduction made in pensions because of the receipt of food relief by the pensioner or his wife, interprets the intention of the Government to be that in future, only in cases where “ track “ rations are received, will the pension be restored?
  2. Is it a fact that the recipients of “ track “ rations are only a small proportion of the pensioners affected by the reductions ?
  3. If it is the intention of the Government to restore the amounts deducted on account of food relief, will he see that all Deputy Commissioners are notified at once?

I am now able to inform the honorable member that instructions have been issued to all Deputy Commissioners’ that food relief is not to be taken into account in assessing the rate of pension.

Cite as: Australia, House of Representatives, Debates, 14 March 1933, viewed 22 October 2017, <>.