13th Parliament · 1st Session
Mr.speaker (Hon. G. H. Mackay) took the chair at 3 p.m.,and read prayers.
– Will the Prime Minister inform the House whether South Australia, Western Australia and Tasmania have yet presented to the Commonwealth Grants Commission, for its consideration, claims for grants from the Commonwealth?
– Thethree States mentioned by the honorable member have notified the Commonwealth Grants Commission that they propose to make a claim for a grant from the Commonwealth;but no detailed statement of claim has yet been submitted to the commission, and it is therefore unable to proceed withan investigation of the circumstances of each particular State. If the matter is much longerdelayed, the commission considers that it is doubtful whether it can deal with it and make recommendations with respect to it before April next, when the budget proposals for the ensuing financial year should be considered by the Government. I am, therefore, suggesting to the States concerned that they should hasten the presentation of their case, so that adequate time may be given to the commission to investigate it fully, and submit recommendations that may be considered by the Government when the Estimates for next year are being prepared.
Free Licencesforthe Blind
Mr.MAKIN. - I have received from an inter-State conference of blind persons that is being held in Adelaide, a telegram inquiring if the Postmaster-General can make an announcement immediately with regard to the proposal that free listeners’ licences should be granted to blind persons.
– It is not usual to make statements of policy in reply to questions, but I have already promised that a full pronouncement will be made in regard to this subject when the Estimates of the PostmasterGeneral’s Department are being considered.
Reduction of InterestRates.
Mr. FRANCIS (Moreton - Assistant
Minister in Charge of War Service Homes) [3.4]. - by leave - I desire to make a short statement in regard to the interest to be charged in respect of moneys advanced by the Government in connexion with war service homes.
Since the inception of the war service homes scheme, it has been the desire of all governments to do everything possible to ensure the success of this housing scheme, which was in some measure a reward to returned soldiers for services rendered in the defence of their country.
The original interest charged eligible persons- was 5 per cent., although the funds from which the money was obtained cost about 5$ per cent This, of course, was a valuable concession to returned soldiers-.
The war service homes scheme, under which the Government has provided over 36,000 homes, was a gigantic undertaking, and its success can be appreciated when it is realized that until the unfortunate depression arose a few years ago, the arrears of repayments amounted to only 1 per cent. This is an indication of the liberal conditions that have governed the scheme, and is also a distinct tribute to the way in which returned soldiers have met their obligations.
Following the success of the Conversion Loan, the rate of interest in respect of advances to returned soldiers was reduced from 5 per cent, to 4£ per cent, as from the 1st August, 1931. A reduction of per cent, in the interest rate charged to civilians who had purchased from the commission properties which had been abandoned, was also effected.
The present cost to the Commonwealth of 10 au moneys utilized for the provision of war service homes is 5.2 per cent. However, as honorable members are aware, there has been a general reduction of interest rates, and money is now available on loan to ordinary civilians at as cheap as 4$ per cent.
Having in view the original intention, that returned soldiers should be assisted to obtain homes at a cheaper rate than civilians, and the rates at which money may now be obtained, the Government has given careful consideration to the matter, and has decided to reduce the interest rate on money advanced for the construction of war service homes from 4£ per cent, to 4 per cent, as from the 1st January, 1934. There will also be a reduction of per cent, in the interest charged to civilian purchasers of war service homes, provided, that the” rate payable by them will not be less than 5 per cent. This concession will cost the Commonwealth, in a full year, approximately £92,000, and is equal to a capital reduction of 11 l-9th per cent. For example, a purchaser would pay as much interest in respect of a loan of £400 at per cent, as would a purchaser with a loan of £450 at 4 per cent. The following table will more fully explain the position : -
The sympathetic interest of the Government in the welfare of returned soldiers has already found expression in the liberal scheme that was adopted following an investigation by the War Service Homes Committee of Inquiry. The basis of that- scheme is the ability of the soldier to pay.
The present reduction of the interest rate is a further indication of the Government’s determination to help returned soldiers to complete their contracts, and thus fulfil the intention when- the war service homes scheme was inaugurated; that is, that returned soldiers should be assisted to become the owners of their homes. The reduction of interest .will lighten the burden which many returned soldiers ‘are bearing, and I feel sure that honorable members will share the gratification of the Government and myself that it has been found possible to give this further assistance to returned soldiers.
The “War Service Homes Commission will communicate with purchasers as early as possible, and advise them of the new instalments payable by them under the contract into which they have entered.
– I ask the Assistant Minister (Mr. Francis) . whether the Government has made any arrangements under which purchasers of war service homes through the State Bank of South Australia, which acts on behalf of the Federal Government, will receive the benefit .of the reduction of interest he has just announced?
– I am endeavouring to arrange to meet the Premier of South Australia early next month, when. I shall discuss with him many matters relating to
Avar service homes, including the matter raised by the honorable member. No doubt the concession to be conferred upon, purchasers of war service homes will apply throughout Australia.
– I ask the Assistant, Minister whether the matter of writing off a certain, amount, of the arrears due by occupants of war service homes, which have arisen in consequence of unemployment, has received the consideration of the Government, and whether in future they can hope for a remission of these payments ?
– An unemployed occupier of a war service home is permitted to allow his arrears of instalments to remain in abeyance, but he has to meet his current commitments according to his income. The whole question will be reviewed in 1935, in accordance with the recommendation made by the committee appointed by the Government. The Government is acting upon that recommendation, and occupiers of war service, homes whose cases are not hopeless, and who are meeting their proper payments, have security at least until that date.
REDUCTION rs New South Walks.
– In view of the belief held by many leading business mcn, and students of economics generally, that any further reductions of wages would checkmate business restoration, will tho Prime Minister consider how he may help the Sydney City Council and other business groups in New South Wales to prevent the putting into operation of the recently announced reduction due to a fall in the cost of living?
– The matter referred to by the honorable member is one for tribunals that are specially set up to deal with it. The policy of this Government has always been not to interfere with those tribunals. In the circumstances, therefore, I see no way in which, even if it desired to do so. this Government could interfere.
– Has the Minister for Commerce any further statement, to make to the House in connexion with the policy of the Government concerning its control of the export of wheat for the next two years?
– I have already intimated that a conference of wheat interests is to be held in Canberra next Tuesday. Until that conference has dealt fully with the Government’s scheme for meeting the position this season, it is not proposed to vary in any way the statements that have already been made on the subject.
– In connexion with the conference to be held in Canberra on Tuesday next, has the Minister for Commerce issued invitations to wheatgrowers’ organizations in the different States, including South Australia, and also to flourmillers in that State? If not, will the Minister consider the desirability of inviting representatives of the Wheatgrowers Association, and also of the country millers whose flour may be exported although they may not in all cases be the direct exporters?
– Invitations have been extended to eight direct and indirect representatives of wheat-growers, two of whom will be from South Australia, and will represent, respectively, the Voluntary Wheat Pool, mid the Farmers Cooperative Union. An invitation has also been extended to the Federated Millers Association to send two representatives. Whether either’ of these will be selected from South Australia is a matter for the association itself.
– Is it a fact that the late Resident Minister in London (Mr. Bruce), on the occasion of the last conversion in London, suggested default as an alternative to conversion? In order to place the matter beyond doubt, will the Prime Minister lay on the table of the House copies of any cables or documents that have passed between Loudon and Australia on this subject ?
– The honorable member first ask3 whether it is a fact that
Mr. Bruce, until lately Resident Minister in London, suggested default and in order that what I say in this connexion may be verified he asks that the papers be tabled. I do not propose to table papers of an absolutely confidential nature which have passed between the Cabinet and Australia’s representative in London, particularly as he was a member of the Cabinet. In any case, the documents are confidential to the Government and to the Loan Council. To the statement that Mr. Bruce, now High Commissioner in London, ever suggested default of any part of the Australian commitments I give a flat denial.
– In reference to the recent loan conversions in Great Britain I ask the Treasurer whether it is a fact that about April last representations were made by certain British financiers to supply ample funds for the Government at 3^ per cent, at £96 or £97 per cent.?
– If the honorable member refers to recent conversions I may say that no such proposition was made to the Government by any principals of a responsible financial firm.
– “Will the Prime Minister inform the House what arrangements have been made for shipping facilities to the north-west coast of Tasmania during the coming summer months?
– The Loongana, is being placed in the Melbourne and north-west coast of Tasmania trade for four months of the coming summer, that being additional to the eight weeks provided for under the existing contract, during which time she replaces the Oonah in that service. The Loongana, was temporarily recommissioned last week to run a special trip to Launceston in connexion with the National Christian Endeavour Union Convention. Arrangements have been now made with Tasmanian Steamers Proprietary Limited to keep her in commission, the new arrangement commencing from yesterday, the 23rd October,” and continuing until the 16th April next. This arrangement, it will be noted, will cover the Easter traffic, as Good Friday next vear falls on the 30th March.
– 1 have received tha following telegram from the Dimbulah Tobacco Growers Association : - .
Successive delays in sale of tobacco leaf making bad financial position worse. We request you urge Minister for Customs use his influence to effect improvement.
At the present time the position of the growers in North Queensland is bad. In some cases the growers are drawing relief from the State Government. “Will the Minister endeavour to arrange a buying agreement between the tobacco manufacturers and growers to ensure that tobacco of fair average quality is disposed of.
– I have stated previously that although the tobacco companies would not enter into a buying agreement with the Government this year they undertook to buy all grades of tobacco from bright mahogany upwards, and. also the usual replacement of the darker grades. If the honorable member can inform me of any place in Queensland in which tobacco of bright mahogany or better grades is for sale I shall bring the matter before the notice of the companies. The Government has also placed at the disposal of one of the federal departments a sum for better instruction in tobacco culture, and a conference took place in Canberra yesterday respecting the allocation of that money.
– Has the Minister yet received a report from the North Queensland Tobacco Committee, and, if so, when will he make it available to honorable members?
– I have received an advance copy of the report, but the Government has not yet had time to consider it. When consideration has been given to it, the Government will decide whether to circulate it among honorable members.
– Will the necessary legislation to extend the Commonwealth Dried Fruits Act to include apricots, prunes, peaches, pears, and nectarines, be introduced into the House in time to cover the new season’s harvest which commences in December?
– The legislation to which the honorable member has referred, which regulates the interstate trade in dried fruits, . is involved in the Government’s whole marketing policy. This, unfortunately, has been held up. For this the Commonwealth is not to blame. Until the Government’s policy has been decided, the legislation referred to by the honorable member cannot be introduced.
– Will the Prime Minister ascertain whether it is a fact that conductors on the New South Wales sleeping cars leaving Sydney and Albury conveying members to arrive at Canberra on the first sitting day of each week - usually Tuesday - are compelled to stay in Canberra without pay until this Parliament ‘adjourns the following Friday? If so, will he make representations to the Minister for Railways in that State for the purpose of discontinuing this unfair practice.
– I shall make inquiries into the matter?
– Is the Minister for Commerce aware that, in pursuance of a policy of restricting imports from countries which treat Belgian exports unfavorably, the Belgian Government is withholding licences to Australian barley exporters to land barley at Antwerp which is the only considerable market for- Australian barley in the world ; and if so, is the Government taking any action to try to retain far Australia the market in Belgium, and other countries which are supplied from Belgium?.
– It is true that we have received representations from certain interested quarters suggesting that action along the lines indicated by the honorable member is being taken by Belgium, and as a result a cable has been sent- to the High Commissioner requesting that, investigations be made immediately with a view, to .preventing any action likely tn be prejudicial to the interests of Australian barley-growers.
– I have received a telegram from the school teachers at Darwin in which they complain bitterly of the fact that they have been notified that during the Christmas vacation they will be- no longer eligible for leave> and that they will be drafted into various departments to- perform the work of assistant clerks. I ask the Minister -
– While I am aware of some of the matters referred to by the honorable member, I am quite unaware of the steps that have been taken in the direction indicated in the latter part of his question, but I shall make inquiries, and advise him of the result at the earliest possible opportunity.
– Has the Minister under consideration any proposal to give assistance to Sir Charles Kingsford Smith, and if so, what decision has been arrived at?
– When a decision has been come to,, a definite statement will be made to. the House. That statement will, I hope, be made ‘at an early date.
– Oan the Minister for the Interior inform the House whether appointments have been made for the redistribution of seats, and if not, when are such appointments likely to be made?
– The count of the census has not yet been completed, but is expected within the next few days. Upon receipt of, and advice as to the count, the Government will not delay in making the necessary appointments for carrying out the duties referred to, by the honorable member.
– When speaking on the Financial Relief Bill on Thursday last I referred to the position of the lowerpaid officers in the Public Service. The Postmaster-General interjected that those in receipt of £300 a year or less would have all their deductions restored, with the exception of the cost of living allowance. Can the Postmaster-General confirm that statement?
– If I said £300, which I believe I did, as I spoke on the spur of the moment, I was in error. The amount should have been £252.
– Has the Minister for Commerce any information to give the House concerning the negotiations, which I understand are proceeding between the Commonwealth Government and the Government of the Dominion of New Zealand, with respect to the Matson Shipping Line?
– The Government is still awaiting replies to certain communications sent to the Government of New Zealand in connexion ;with this matter.
– Under existing conditions »a firm or individual wishing to register a telegraphic address has to register in each capital city at a cost of £2 2s. for each registration, which involves an expenditure of £12 12s. In Great Britain, Canada, and New Zealand only one registration is necessary, and I ask if the Postmaster-General will look into this matter to see if the department will agree to one registration for the Commonwealth, and if so, at a considerably reduced rate?
– My impression is that in every postal administration, including Great Britain, a firm or individual is required to register a telegraphic address in whatever post office he requires that registration to have effect. Considering the saving and benefit which firms and individuals derive by adopting this method, I do not think that any reduction can be made, particularly in view of the additional expenditure that would be involved by the suggested alteration. I shall, however, look into the matter.
– I ask the Minister for the Interior if he has instructed industrial officer Gibson to inform workers in the Federal Capital Territory, many of whom are members of the Federal Territory Workers Union, that they must take out a ticket with the Australian Workers Union in order to obtain employment in the Federal Capital Territory ? If he has not issued such an instruction, is it a fact that men doing manual work here must take out a ticket with the Australian Workers Union, although they are already members of another union?
– I have not given any instructions to that effect; it would be unnecessary to do so.. First preference isgiven to returned soldiers; and the second preference to the members of some recognized union in the Federal Capital Territory, such as the Australian WorkersUnion. ‘
-Will the Minister for the Interior inform me whether it is a fact that a member of the Federal Territory Workers Union, now employed by theGovernment, will be dismissed from his employment if he refuses to take out a ticket in the Australian Workers Union?’
– I think I have an idea of the case to which the honorablemember is referring. We cannot dismiss the man I have in mind, because he holds a ticket in the Australian Workers-
Union, though the effective date of it has expired. The Government is required to employ members of registered unions. This person is a member of a registered union - though anunfinancialmember.
-But what is the general rule?
– I have given the general rule. If a man holds a union ticket he is a member of a union, though he may be an unfinancial member of it. I have given this man some friendly advice. I advise him again to protect himself, and serve his own best interests by becoming a financial member of a registered union.
-Will the AttorneyGeneral inform me whether the Government would be liable to prosecution for a breach of an award if it continued to employ a person who refused to take out a ticket in the AustralianWorkers Union?
– Behind the honorable member’s question is the problem as to which unions operating in the Federal Capital Territory should be recognized. The Australian “Workers Union is established here, but with a declining membership; and there is also a larger union, upon a rather different foundation, known as the Federal Capital TerritoryWorkers Union.
– It has not a larger membership.
– Perhaps I was in error in that regard. This union has applied for recognition. The matter has been referred to my department, and I have asked to be supplied with certain information. Upon the receipt of it, the Government will have to consider the basis upon which organizations will be entitled to appear before the Federal Capital Territory Industrial Board. A decision should be reached upon this subject fairly early.
– But may I take it no man can be sacked now because he is not a member of the AustralianWorkers Union ?
– I have nothing to do with the administration in that direction. The whole subject to which the honorable member has referred is at present under consideration.
– In view of the efforts now being made by all sections of the building trade in Victoria to relievo unemployment in that industry, will the Postmaster-General give further consideration to the necessity for completing the Melbourne Post Office’ building, or, at least, renovating the existing building?
– No provision was made in the works and buildings estimates for such a considerable sum as would be necessary to carry out, the work mentioned by the honorable member. I realize, however, the importance of the question, and shall go into the matter, although I can hardly hold out hope of a large expenditure such as is referred to during the current financial year.
Consideration resumed from the 4th October (vide page 3246) on motion by Mr.White (vide page 3225) -
Whenever at the date of exportation of any such goods Australian currency is depreciated to the extent of not less than per centum in relation to the currency of the British country from which those goods are imported, a deduction from the amount of duty payable on those goods in accordance with any law of the Commonwealth for the time being in force imposing duties of customs (other than primage duty), or in accordance with customs tariff proposals shall be made of -
– It is not necessary for me to deal at length with the business now before the committee as I gave honorable members full details of the Government’s intentions in the speech which I delivered in introducing this proposal and others. That speech has been printed and widely circulated and contains a carefully prepared summary of the Tariff Board’ s report and also its premises, reasons, conclusions and recommendations. I think we can agree that our difficulties on account of the present exchange basis, and also our present instability generally, are consequent upon the war andits aftermath. Prior to the war the slight fluctuations of the exchange rate made very little difference to trade, because most countries were on the gold standard; but since the war, imperfect realization of the great economic wastage of that conflict has caused a chaotic condition in world currencies and exchanges. As our future is undoubtedly linked to the stability of exchange and currency it is essential thatwe should take cognizance of what is happening. In. spite of the oscillation of exchange in many countries, sterling remains in the most satisfactory position. It is in best repute among the currencies of the world owing principally to the integrity of the British people and also to the operations of the Exchange Equalization Fund of £150,000,000 which Great Britain has established to counteract the fluctuations of exchange as much as possible. Australia is defini tely linked with sterling, not only sentimentally as a part of the Empire, but, also in consequence of the pegging of exchange at £125 Australian to £100 of sterling. It must be realized, however, that currency depreciation affects costs. This subject was carefully inquired into and voluminously reported upon by the Tariff Board which took all factors into account. I think honorable members will agree that it is impossible to devise a general plan to enable protective duties to be adjusted automatically so as to compensate exactly for the effects of exchange. It thus remains in the general interests to make the best possible partial adjustment on a fair and equitable basis. The Government had to recognize the problems with which the Tariff Board was faced in recommending rates of duty which would give reasonable protection to Australian industries. As I explained in my previous speech, many manufacturing costs are increased by the exchange. This made it necessary to consider exchange in assessing the degree of protection required by such industries. The Tariff Board could not ignore either the anomalies which arose in the case of Australian industries whose costs were increased in consequence of the exchange, or the difficulties due to the fact that costs of many raw materials and also the price of certain imported goods were affected by the exchange. None of these factors has been ignored. The Governmenthas endeavoured to look at them all in their true perspective. Their function is to protect local production and local unemployment from unequal competition. It may be said that they are the differentials and gears that separate our standards from the economic standards of other countries.
Some honorable members have asked that I should re-state the Tariff Board’s recommendations and the decisions of the Government in connexion with this matter, and I shall do so as briefly as possible. Recommendation No. 1 provides that while exchange does not recede below 20 per cent., a deduction shall be made from protective duties of (a) one-quarter of the duty, or (b) one-eighth of the value of the duty; whichever is the less. At a 50 per cent. duty both rates would work out equal, but if the duty is below 50 per cent., one-quarter of the duty is the less and that is what would apply to British goods. That recommendation was accepted by the Government.
RecommendationNo. 2 is a compensatory scheme providing that if at any time the exchange rate should fall 20 per cent, but not lower than 12£ per cent., the deductions from protective duties shall be (a) one-eighth of the duty, or (b) one-sixteenth of the value for duty; whichever is the less. That will operate if there is a sixteen and two-third’s degree of depreciation, which is what we term the 20 per cent, exchange.
In recommendation No. 3, the Tariff. Board urges that no adjustment of duty shall be made in regard to importations from countries with currencies depreciated relative to sterling but less than Australian currency; in other words, a state between sterling and our own currency. The Government has accepted that recommendation in cases where it does not conflict with recommendations Nos. 1 and 2, for there is one colony within the British Empire, namely, Fiji, whose currency at the moment stands between sterling and Australian currency.
Recommendation No. 4 provides for the imposition of a special duty on protected goods which are imported from countries which have a currency that has depreciated more than our own.
– Under recommendation No. 3, we should trade with the countries concerned as though on a sterling basis ?
– Recommendation No. 4 is brought down in a separate resolution and I suggest, Mr. Chairman, that you should allow honorable members to discuss it with the others. That should limit the extent of the debate and save second-reading speeches being made on both items. Regarding recommendation No. 5, the Tariff Board was called upon to make a recommendation concerning primage which, it. pointed out, is a revenue duty which has no protective incidence: Honorable members will recollect that a primage resolution was introduced in which a preferential primage duty system was instituted in favour of Great Britain. That accords also with Australia’s obligation- under the Ottawa agreement, to lift the primage duty so soon as the financial situation allowed. The limitation of the adjustment to certain goods from specified British countries, particularly the United Kingdom, Canada and colonies of less importance, is as far as the Government is prepared to go, for this is legislation of a pioneering nature. If it can be proved that it renders Australian manufacturers vulnerable” to undue competition, the Government will rectify the position. So far the scheme has been subjected to very little criticism.
– That is not borne out by correspondence which I have received on the subject.
– The honorable member’s favorite newspaper, The Age, commends the proposal. It is encouraging to find that, in its negotiations with Japan, India has formulated a scheme which will coyer compensatory arrangements for currency depreciation.
The Government’s proposals should substantially eliminate any tendency towards over-protection. So long as manufacturing industries are overprotected there is a tendency, slight in some instances and pronounced in others, for internal prices to creep up towards the cost of imported goods.
– What happens if there is under-protection ?
– In such instances the Tariff Board will see that a fair degree of protection is afforded to Australian industry. Any one who believes thai trade should be a two-way arrangement and’ not a single way to conform with a single-track mind, will agree that the greater the amount of trade that is done between Australia and Great Britain the better it is for both countries, provided always that it does not create additional unemployment. The United States of America, with all the resources, and the bulk of the world’s gold-, found that to live to itself was impossible. The matter of over-protection would not be of vital importance if dependence on the prosperity of our unsheltered exporting industries for any reasonable measure of national prosperity were not so real. In the interests of our exporting industries, some of which are strongly protected, every possible action must be taken to increase the price of our exports and reduce their cost of production. So long as depressed prices remain for our exportable commodities any disproportionate variation in the prices of secondary products must be held in check. The manner in which the Government’s proposals have been received is a tribute to the soundness of the decisions that have been made. If there are any anomalies or difficulties arising out of , tariff changes, manufacturers never hesitate to draw attention to them promptly. In the present instance there has been little correspondence arising out of the adjustment, and such as there has been is confined principally to the adjustment of primage duty.
I shall now deal with certain criticism that has been levelled at these proposals. Dealing with the subject of the legal necessity for the collection of deposits on duty, in those cases where the exchange adjustment proposals bring the rate of duty lower than the 1921-30 customs tariff rates, I remind honorable members that I have already clearly explained that such duties will not operate immediately.
– They would operate immediately down to that level.
– Exactly. Criticism has come from certain customs agents who have increased their charges because of the additional trouble involved, and the press has taken the matter up wrongly and criticized the Government for not having made the duties operate immediately. This, however, has been the law since the inception of federation. The matter of making the duties law takes only a few weeks and they would be operating now had not the budget been brought down in the interim. Incidentally, the advantage derived by importers and manufacturers, from the fact that they obtain some goods and raw materials at a lower cost, undoubtedly outweighs any slight disability that might be suffered in the meantime.
– They are not slight disabilities.
– I hope that this will satisfy the honorable member, and that in future questions which .lead to a mlsunderstanding of -the position among those who are not acquainted with all the circumstances will not be asked in this chamber. As soon as this passes into law, the full measure of the deductions will become operative.
– But the deposits will not be refunded.
– Certainly not; they have not been in the past. The Govern1 ment undertakes to explore the possibility of making future reductions operate im mediately they are tabled, instead of Waiting until they have been passed into law. Merchants and manufacturers have an exact knowledge of the position, and when goods are arriving can land what they need for immediate requirements, leaving the balance in bond until the new duties become operative.
– That would involve additional expense.
– If we could reach the state of perfection advocated by the honorable member during the many years that he has been in this Parliament, there would be no blemishes on our statute-book. Wc should show ourselves to be a most impatient people if we were not prepared to suffer the few weeks’ delay caused by the presentation of the most popular and welcome Commonwealth budget that has been introduced for many years.
– The Standing Order which imposes, a time limit on debate does not deal definitely with a question such as that now before the Chair; consequently, I propose to treat it as a customs tariff resolution - which it really is. Therefore, the Leader of the Opposition, or a member, deputed by him lo speak first, may speak for 60 minutes, and other members for 45 minutes each.
.- The party of which I am the deputy leader is strongly opposed to the customs tariff exchange adjustment proposals, on the grounds that they will weaken the protectionist policy of Australia, encourage imports, cause a further drift to take place in the trade balance position, and increase the number of unemployed..
I agree with at least one statement of the Minister (Mr. White) ; that is, that the exchange question presented great difficulties to the Government. The reason^ is, that the Government endeavoured to please two sides which, on fiscal questions, are as wide apart as the poles. I believe that it has pleased nobody. I admit that the criticism of the Government in freetrade quarters for its delay in bringing down this schedule consequential on the recommendations of the Tariff Board was largely unjustified. My complaint is, not that there was delay, but that the schedule was brought down at all. There has been a complete change of government policy on this question. When the honorable member for Henty (Sir Henry Gullett) was Minister for Trade and Customs, be admitted having issued to the Tariff Board an instruction not to take exchange and primage into consideration when arriving at recommendations as to what duties were adequate to protect Australian industries. Evidently that was the policy of the Government at that time. “We know, of course, that a good deal of criticism of the Government emanated from so-called tariff reform leagues, members of the United Country party in this Parliament, foreign traders, importing bouses, and big city retail firms. They urged the Government to adopt measures that would have whittled away the protectionist policy put into operation by the previous Government. A number of adjustments and formulae were brought down from week to week by this meddlesome, interfering Government, which, on fiscal issues, does not know where it’ stands. Pleading that obligations were assumed at Ottawa, Ministers proposed re- ductions of duties which made a complete travesty of their pre-election promise, that rough hands would not be laid, on the tariff, and that with them the national policy of protection would be quite safe. We have lived to see all their pre-election promises thrown, overboard, in the hope that one freetrade interest or another might be placated and that the Government’s life might bc prolonged.
In my opinion, the alterations proposed under the exchange adjustment scheme will have a most disturbing effect upon Australian secondary industries, retard their development, and make it more difficult than it has hitherto been for Australian manufacturers te raise capital to extend their factories. Those manufacturers do not know from week to week what the policy of the Government may be. They fear that they may wake up one morning to find that the protection which induced them to invest hundreds of thousands of pounds in an industry, and to place on their payroll hundreds of additional employees has been withdrawn, because the Government is afraid of what the leader of the Country party f Dr. Earle Page), or the Sydney Morning TI Herald, may say in regard to the need for a downward tendency in tariff-making.
– The effect might be to take off the payroll that mythical 50,000 employees to which the honorable member so often referred when he was Minister for Trade and Customs.
– The number of unemployed walking the streets to-day would have been considerably greater than it is had it not been for the high protectionist duties imposed by the . Scullin Government. If that Government erred, it did so on the side of Australian manufacturers and workers, not on the side df foreign traders and importing interests.
– The interjection of the Postmaster-General has lead the Deputy Leader of the Opposition away from the question before the Chair.
– The general effect of this Government’s actions is to whittle away the protectionist policy of Australia. In tariff matters the vacillation and uncertainty of the present Government, which claimed to have come into office to restore confidence, are having a damaging effect on the credit of Australia, and on confidence in its secondary industries, and are retarding its return to prosperity by shaking the confidence of investors.
The Minister for Trade and Customs complained that it has been alleged that the report of the Tariff Board on exchange has proved embarrassing to the Government. That is quite obviousSuch a report would be embarrassing to any government which did not know where it stood on the protectionist policy, but tried to face all ways at the one time. I believe that theultimate, or long-distance, economic result of the Tariff Board’s recommendations, and the Government’s action thereon, will be most damaging to Australiansecondary industries and to employment. Doubtless, employers will advance it as a reason for keeping wages down., on the ground that with barely adequate protection, and, in many cases, inadequate protection, any increase of wages would mean handing over their trade to overseas manufacturers. It is probably iu accordance with the deflationist policy of the Government to provide props here and there for the argument that there should bea reduction of the cost of production - by which is invariably meant a reduction of wages and a lengthening of hours of labour. “While the proposed alterations may not immediately have a disastrous effect, except in the case of the few industries that are dependent on the protective incidence, of exchange, that must be the long-range result. The competition of the British importer will be more acutely felt in the future by Austraiian manufacturers. The alterations can be hailed, as they are by British manufacturers, as a gift to the factories of Great Britain, and this means that they arc disadvantageous to Australian factories. Had the Government introduced a schedule providing for the arbitrary reduction of 839 tariff items, consternation would have been caused in the Australian manufacturing world. The exchange adjustment proposals are sugar-coated. They are linked up with economic jargon and references to Empire preference; and, so that they might be more ambiguous, there is also ‘talk of the introduction of an equitable formula. When the effect of the alterations becomes known, I believe that consternation will be caused in Australian secondary industries, many of which have not yet realized their true significance. The Government has sneaked them in by a back-door method. It has made a large number of reductions which cut right across the protectionist policy of Australia and the pre-election pledge that no tariff alterations would be made by ministerial action without a Tariff Board report based on the individual review of each industry. Is this an individual review? Decidedly not. Hundreds of items are affected, and we are told that we cannot deal with them seriatim, but must take them holus bolus.
– There is to be individual investigation by the Tariff Board in addition to this.
– How long will it take the Tariff Board to make an investigation of all the items affected by this resolution, to see whether the industries concerned are losing the Australian market, and whether hundreds of workmen will have to be thrown out of employment ? It has been said that the Government’s tariff amendments have been well received. Let me cite some of the views of leading manufacturers’ associations in Australia. There is a tendency, when a government introduces tariff amendments, for some of the manufacturers affected to be thankful for small mercies, considering that conditions might have been worse; but the manufacturers’ associations have emphatically declared their opposition to the Government’s tariff amendments. The following statement was made on the 6th October, 1933, by Mr. C. V. Potts, the president of the Chamber of Manufacturers of New South Wales: -
Manufacturers regard most seriously and with grave concern the Government’s action in relation to tariff >and exchange, as it will largely, if not entirely, offset any benefits they would otherwise receive from the budget, and will prove a check to re-employment even if it does not indeed adversely affect many important industries. The Tariff Board has certainly over-estimated the .protective effect of exchange, which has never equalled the reduction in overseas costs.
Mr. F. W. Kitchen, president of the Victorian Chamber of Manufacturers, made the following comment: -
The adjustment to be made in customs duties to offset exchange, as well as the reduced primage duties on manufactured articles, Mr. Kitchen added, were seriously regarded by the manufacturers on account of its effect on tariff protection. What seems to have been entirely overlooked was the fact that the adverse exchange rate was a corrective, or penalty, imposed on Australia for following a policy for many years of excessive importations. As a corrective it had rendered invaluable service to the Commonwealth, and had, in conjunction with increased protective duties, saved Australia from default overseas and enabled her to recover her financial footing in the outside world.
While it had not been possible to thoroughly investigate the effect of the various changes in regard to specific industries, a serious anomaly seemed to have arisen relative to raw materials which were imported by British and Australian manufacturers alike from foreign sources, in so far as the Australian manufacturer would still have to bear the full hurden of exchange and pay the full rate of foreign duties as well as primage, without a.ny allowance for exchange
– The primage was reduced, so Mr. Kitchen is wrong in that respect.
– I admit that the primage was reduced, but it was not withdrawn. He continued - whilst the goods manufactured from the name materials by British manufacturers would receive concessions in respect to both exchange and primage duties when they were landed in Australia.
Those are the opinions of the chief executive officers of two of the largest manufacturers’ associations in Australia. Mr. Hume Cook, secretary of the Australian Industries Protection League and at one time a Liberal member of this House, stated -
The alterations made in relation to exchange . were a concession to clamour.
Of course, a subtle propaganda was carried on and the Government weakly yielded to the requests of freetrade interests, whose policy it was not prepared to espouse on the eve of the last election. These consequential tariff schedules pleased the British manufacturers immensely, as is shown by the following statement which appeared in the Daily Mail : -
Holders of Australian loan stock and British manufacturers will be pleased with such a sound and cheering budget.
Any concession that we give to the advantage of the British manufacturers must prove detrimental to our secondary industries and lead to loss of employment in Australian factories.
– We have the protection of the dumping provisions of the Industries Preservation Act.
– The Minister himself has stated how difficult it is to administer those provisions. Other British newspapers hailed this Government’s tariff amendments as a tariff gift to Great Britain. Lord Beaverbrook, the champion of Empire trade, hailed this Government’s proposals as splendid news from Australia and suggested that it was a step towards Empire freetrade. While that might be a splendid ideal for Lord Beaverbrook it is of no use to Australia at the present time, and I personally consider it to be impossible of achievement. Recently an English manufacturer stated in the Manchester Guardian that large quantities of unfinished continental and Japanese materials are sent to Great Britain, where they are dyed, printed and shipped to Australia as British made. Those goods are being dumped in Australia to the disadvantage of our secondary industries. . s
– The goods cannot be admitted under the preferential tariff unless they have a certain British content.
– They are subject to preference on account of being classed as British-made, and as a result the products of foreign manufacturers are creeping into the Australian market under the cloak of being British-made. That, of course, is having a very damaging effect upon our secondary industries. The formula as set out by the Government fails to meet the case of the textile manufacturers who must purchase their raw materials at a price which represents world price, plus the exchange benefits to the Australian wool-growers. While the exchange functions as a bounty on exports there is no price advantage to the Australian spinners and weavers who operate in this country” side by side with the growers. That fact should be kept in mind by the Minister. The formula also fails to provide for the 10 per cent, reduction of wage3 which must sooner or later be restored to all workers under Federal awards. 1 know that this Government would like to fix arbitrarily the rate of protection to the Australian manufacturer so as to make it more and more difficult for him to compete against the importers, and consequently cause him to apply to the Arbitration Court for a further reduction of wages. That would lead to reduced purchasing power and fewer sales of products from Australian factories. We are all looking forward to an all-round increase in price levels in Australia, which all the leading economists are now convinced must precede a return to prosperity. An increase of prices to the 1929 level would bring about ‘an increase of wages paid in Australian factories, and if that happened how would the manufacturers continue if they did not receive adequate protection against the products of cheap labour countries? The new formula also fails to recognize the need of the automotive industry for protection by the imposition of penal tariffs. Only a penal duty of 3s. a lb. on gear-wheels arrested imports of gear-wheels. The importation of laminated springs was arrested by the same means. When the Scullin Government took office ‘kid glove methods- were useless, and this new scaling down of the tariff will result in an increase of dumping which, as the Minister well knows, is extremely difficult to prove under the Industries Preservation Act. Not only the American and Eastern manufacturers, but also the British and other European manufacturers, are offenders under that law. Their sole object is to make profits regardless of the consequences. I have no wish to examine every item in detail, but I should like the Minister to make a particular note of item 120c - towels and towelling - and to give it further consideration. The towelling industry has been established within the last three or four years. Under the 1921-2S tariff the duty was 20 per cent. British preferential and 35 per cent, general. During the regime of the Scullin Government the rates were increased to 50 per cent, and 65 per cent. Since this Government has been in office the cotton bounty on yarns has been abolished and a duty of 35 per cent, ad valorem and 4£d. per lb. imposed on preparation yarns, equal to 40 per cent, of the yarns used on towels. That was equivalent to a reduction of the protective duty by from 18 per cent, to 20 per cent.
– That item has been referred to the Tariff Board in order to ascertain whether a dumping duty is required and the inquiry is now being made.
– I am glad to have the Minister’s assurance. There was a further 10 per cent, reduction in British preferential and 5 per cent, reduction in general tariff rates in accordance with the Tariff Board’s report, and that left the manufacturers with a protection of 40 per cent, and 60 per cent, which, however, was not effective because of the higher cost of yarn. The effective protection was 22 per cent. British preferential and 42 per cent, general, plus the protective incidence of the exchange which was worth 11 per cent, on the average, because the manufacturers had to pay exchange on 60 per cent, of their raw material, condenser yarn, as against 25£ per cent, exchange on the f.o.b. price of imported towels.
– There has been a complete inquiry into that matter, and the spinners and growers have come to an agreement.
– I hope that the board’s inquiries will be expedited so that the cotton mills and the weaving mills will not go out of existence. One firm has spent -thousands of pounds in purchasing machinery and establishing a spinning mill, but because of the tariff amendments its effective protection has been so reduced that it will not be able to compete with the imported article unless the Government gives it immediate assistance. The manufacturers of towelling never at any time received the full value of the protective incidence of the 25 per cent, exchange because they had to import 60 per cent, of their raw material and pay exchange on it. Another industry which warrants special attention is the tool manufacturing industry which makes tools of trade. Under this schedule the rate will be 35 per cent, on which there will be a reduction of Si per cent. A deposit of that percentage must be made, but when once the rates in this schedule are assented to by Parliament, the 1921-1930 tariff will be repealed, and the industry will be unable to carry on successfully against overseas competition. Similar, comments can also be made concerning a number of other industries, such as that concerned with the manufacture of malleable fittings, which I could mention. Those directly interested should place the facts before the Minister and ask for an immediate inquiry. There has been a great deal of delay by the Tariff Board in inquiring into the position of many of those Australian industries; but that is not the fault of the Board, because it has had an exceptionally large volume of work to handle. In the circumstances, I think that the Minister would be justified in instructing a capable officer of the Trade and Customs Department to inquire into the disabilities under which Australian industries will be operating if these exchange proposals are agreed to. There has been marked variation in price levels overseas since many of the duties now operating were imposed, and the application of this formula will inflict great hardship on a number of Australian industries. The Tariff Board in its annual report states -
To place manufacturers in the United Kingdom and in Australia on exactly the same price level would seriously reduce sales of goods that can be made in Australia and sold at a reasonable cost. This would seriously dislocate industries established for years and lead to an increase in unemployment together with a wastage of the huge amount of capital invested.
That is .exactly the effect which the Ottawa agreement will have upon trade, and in consequence of the adoption of that agreement Australian secondary industries are seriously hampered. The merging of exchange costs with customs duties must encourage imports and may result in a corresponding inflation of the exchange rate, thus further depreciating Australian currency. There is a lot of loose talk by freetrade, tariff reformers who say that the manufacturers have been enjoying an added protection of 25 per cent, owing to the present high exchange rate. Actually, the effective protection recedes from the maximum of 25 per cent, as the proportion of imported material used in the Australian product increases. The Tariff Board in its report on this question, says -
Generally the manufactured (product includes imported or exportable materials: then the protective effect of a duty is not increased by the full amount of exchange payable, but by a proportion of it, dependent upon the relation between the value of the exchange effected materials ‘and the whole. If half the value of duty on an imported article lie represented by materials, an Australian Manufacturer, would have to import, or for which the local manufacturer would have to pay world purity prices - including exchange - if it were produced in Australia, then half only of the exchange costs ‘becomes additional protection and similarly with other ratios.
It is evident that the manufacturers’ costs have been shaded considerably as the result of the present exchange rate, and that the action of the Government will have the effect of increasing importations and seriously imperilling our trade balance. In support of this contention, I quote from the memoranda on our trade position, supplied by the Commonwealth Statistician. He states -
Imports of merchandise (sterling) were valued at £ sterling 4.528.000 in June, 1033, as against £ sterling 4.193.000 in May; and exports of merchandise (sterling) at £ sterling 4.312.000 compared to £ sterling 5,898,000. Imports of merchandise increased 8 per cent, while exports declined 28 per cent. Total imports including bullion and specie were valued in sterling at £ sterling 4,002,000 as against £ sterling 4,274,000 in May, an increase of !l per cent. Total exports in sterling were £ sterling 4,999,000 in June as compared with £ sterling (1,033,000 in May, a decline of 25 per cent. . . . For the month of June 1933, there was a small and favorable commodity balance of £ sterling 216,000 as compared with a similar small balance of £103,000 for the previous June. For the twelve months ending the 30th June, 1933, the favorable commodity balance was £ sterling 21,210,000 compared with £ sterling 30,795,000 for the twelve months ending June,’ 1932. Talcing bullion and specie into consideration the balance was £ sterling 3S.876,000 as against £ sterling 40,289,000 for the year 1931-32. . . For the twelve months ending 30th June, 1933, imports (values in sterling) totalled £57,985,000 (of which merchandise represented £5(i-,S20,000 and bullion and specie £1.105,000) compared with £44,713,000 (merchandise £44,043.000 and bullion and specie £G70,000) for the previous trade year 1931-32. Imports of merchandise showed an increase of 20 per cent.
The Commonwealth Statistician then sets out the items on which this increase occurs. This tinkering with our tariff policy encourages importation and places in jeopardy our trade balance which, during the regime of the Bruce-Page Government, drifted to the extent of £113,000,000 in eight years. The Minister referred to primage as being partly protective, and of a temporary nature, but the effect of exchange on customs duties is totally different. I agree that primage was imposed for revenue purposes. The Tariff Board anticipates that the present level of exchange will be maintained. That is an open question. It has led to revolutionary reductions in tariffs and the introduction of a totally new principle in fiscal matters.
Air. GREGORY - Provision is made to cover reductions of the exchange rate.
– A formula such as this has never been suggested previously.
– lt should have been.
– The previous Minister for Trade and Customs said that it should not be and instructed the Tariff Board accordingly.
– At that time exchange was not stabilized as it is at present.
– It was, and time will tell whether it is now stabilized. The exchange rate is closely associated with our financial position overseas; and its variation is governed, not by the Government, nor by the Tariff Board, but by the Commonwealth Bank, in conjunction with other Australian banks. Under this formula, customs duties .are being reduced, but there is no suggestion that the exchange rate should be lowered. Exchange operations maintain costs at a rate higher than they would otherwise be, and are not limited to the more immediate effect which is seen in the added cost of imported or exportable material. The value of exchange to primary producers or to exporting industries is considerable, but it adds to the cost of government in Australia when remitting moneys overseas to the extent of 7.59 million pounds annually. It is impossible to assess with any degree of accuracy the additional cost due to exchange and primage on account of the increased cost of raw material, wages, taxation and other charges. The increases are cumulative. The depreciated currency places heavy burdens upon manufacturing industries. The exchange factor is noticeable in every phase of production costs. The primary producer benefits, not only from an inflated price for exportable primary products such as wool, wheat and flour, which have a world price level, but also from the fact that the price of his products sold for consumption in Australia is determined by overseas parity plus the premium of exchange. Experts who attended a meeting of Commonwealth and State Ministers estimated the additional cost of exchange to the Commonwealth and State Governments of Australia at 7.59 million pounds per annum. The benefits accruing from the present exchange rate to exporting producers, including gold producers, on exports valued at £83,474,000 arc estimated at £20,868,000 per annum. In addition, the value of a fair percentage of exportable products, such as wool, wheat, butter, and flour, sold on the local market is increased. In speaking of the cost of exchange, some assume that £1 in England is of the same value as £1 in Australia. The variation is ns great as it is between £1 and the dollar or between the French franc and the Swiss franc.
I now direct the attention of the Government to section 137 of the Customs Act, which provides that all duties shall be paid in British currency. Has the Minister given any consideration to this aspect of the subject? Value for duty 13 based, under existing conditions, not on Australian currency, but on sterling. I understand that representations have been made to the Government on this subject.
– An alteration of that kind would be the last straw.
– I should like to hear the views of the Minister on the subject. The provision of the act is definite. An alteration of the basis of calculation would certainly increase the duties.
In my opinion, the Government has made a grave blunder in yielding to the requests of free- trade interests to tinker with the tariff. It is ever ready to subject, the manufacturers of Australia to all kinds of searching investigations. Sometimes manufacturers have 30 per cent, of their staff occupied in preparing data for either the Government or the Tariff Board; and they arc told that all their cards must be placed on the table. But the big importing houses and the banking institutions of this country are not subjected to such searching investigations, nor are the British manufacturers. Those people who are prepared to invest their money in industry in Australia are spoken of by certain Government supporters and also by free- trade members of the Country party as if they were rogues and vagabonds, and they have to fight for their very existence, while overseas manufacturers and their agents are given every consideration. This is deplorable, particularly in view of the fact that 300,000 people are to-day walking the streets of our cities looking for employment. The first duty of the Government is to place these people back in work. It should not heed the clamour made by the free-trade interests of York-street, or the so-called Tariff Reform League, but should stand firmly by the protectionist policy upon which it was elected, lt promised that adequate and effective protection would be given to Australian industries, but it has failed to fulfil its promises. Fiscally the Government is wandering in no-man’s land. To alter the simile, it is like a rudderless ship, drifting from side to side. After every onslaught by members of the Country Party, it changes its front. No heed should be paid to the requests of the right honorable member for Grafton (Dr. Earle Page) or the honorable member for Gippsland (Mr. Paterson), if consideration of them means a departure, to any extent, from the accepted protectionist policy of Australia.
.- The speech of the honorable member for Capricornia (Mr. Forde) was somewhat amusing, though parts of it which he read were also somewhat affecting. I advise the committee to recollect that the honorable gentleman, when he was Minister for Trade and Customs iri the last administration, was responsible for placing most outrageous restrictions and prohibitions on the importers operating in Australia. Although he said at that time that the prohibitions, surcharges and increases of duty for which he was responsible would result in the employment of thousands more people, the number of unemployed in Australia increased month by month and the situation of the country became worse and worse. The honorable member in’ his speech to-day made some reference to the effect of an increase of imports on the balance of trade, but surely even he must realize the absurdity of imagining that goods can be imported into Australia unless goods are exported to pay for them. No doubt a big reduction of imports did take place while the honorable gentleman was in charge of the Customs Department; but this was due, not only to the prohibitions imposed by his Government, but also to the fact that our exports to the other side of the world were not sufficient to create enough credits there to enable us to import more commodities. Reference is made in the report of the Tariff Board which we are now considering, to the effect of imports on the trade balance. I direct the attention of honorable members to the following extract from the report, and ask the attention of the honorable member for Capricornia particularly to the first sentence of the extract :-
The retention of excessive protective duties as a means of securing or maintaining a balance in overseas payments implies confusion of thought. It exposes consumers to the risk of excessively high prices; and as a means to the desired end it is unlikely to be effective. To the extent to which the protective duties are effective, imports will already have been dammed back. The retention of protective duties higher than those necessary to give effective protection can have an ameliorative influence on the balance of payments only by discouraging further the importation of those nominally protected lines which come in over the tariff wall. In 1930-31, such goods amounted in value to only about £11,000,000 out of total imports of merchandise of £61,000,000.
In other words, the greater proportion of the imports of that year consisted of raw materials required by local manufacturers. Does the honorable member for Capricornia realize that it would be absolutely impossible for these manufacturers to obtain their raw materials from overseas unless we export our products to London to create credits there? The honorable gentleman cannot realize this fact or he would not have endeavoured to. crush our import trade while he was in office. The paragraph of the report from which I have already quoted continues as follows : -
Any alteration of the protective duties could at most, therefore, affect only a small proportion of total imports. More important still, the effects on the balance of payments will not be felt indefinitely. In the long run the costs of export industry will be affected, according to the direction of the alteration, and a larger or smaller volume of imports will tend to be followed by a larger or smaller volume of exports. The effects on the balance of payments will cancel out in the long run, though with a different absolute volume of international trade.
Of course our export trade affects the purchasing power of the manufacturers of their raw materials. Manufacturers can only purchase abroad to the value of the credits created by our exports less the amount which, governments have to pay in interest. Two years ago, in discussing this subject in this chamber, I quoted figures to show how imports affected employment in Australia. When imports increased employment increased, and when imports declined employment declined.
The honorable member for Capricornia said that the Government was attempting, by back-door methods, to interfere with the tariff policy of Australia. I fail to see how he can justify such a remark, seeing that the Government has stated clearly, on numerous occasions, that as far as possible, it intends to be guided in its tariff policy by reports of the Tariff Board. At least that is its general attitude. Of course, the Government cannot be absolutely guided by the Tariff Board; I am quite satisfied that honorable members, in dealing with customs duties in the past, have not given adequate consideration to the effects of exchange and primage. It is the intention of the Deputy Leader of the Country party (Mr. Paterson) to move an amendment to provide that recommendation No. 1 of the Tariff Board shall apply to all countries on the gold standard, or whose currency position is not less favorable than that of Great Britain. I regret that the Government has intimated that it intends to limit the effect of the first recommendation of the board to Great Britain. I realize the importance of bringing about a reduction in both the cost of living and the cost of production. This was eloquently advocated by the present Attorney-General (Mr. Latham) in a speech which he delivered at Heidelberg during the last election campaign. The honorable gentleman said that a reduction of excessive costs was essential to the proper development of the country. But in spite of this the Minister, in introducing these proposals, intimated that even after they became effective no duties would be lower than those set out in the 3 928 schedule. When I interjected at that point of the Minister’s speech, I was chiefly concerned about the extra cost that would be imposed on importers by putting goods into bond. I ask the Minister now to give particular attention to this aspect of the subject, and also to the position of importers of glass. In this connexion he would be well advised to pay regard to the question asked to-day respecting the attitude of Belgium.
– Does the honorable member for Swan desire to prevent any new industries from being established here ?
– I wish to see all classes of the community on the same level. The honorable member for Capricornia and his colleagues are interested only in the protection of the local manufacturers. They would not care what price was charged for locallymanufactured goods, so long as the manufacturers and their employees were protected.
It is deplorable to me that, with the exception of the tariff schedule relating to timber duties introduced in 1929, none of the schedules introduced into this
Parliament since 192S have been properly validated. They have been only temporarily validated. If governments had carried out the provision of the Constitution, and held one session of Parliament each year, such a state of affairs could not have arisen. The Customs Act provides that duties shall not be collected after a specified time, unless the schedules tabled in Parliament have been approved. In my opinion it is totally wrong for the Government to impose indirect taxation of this description on the people without giving Parliament an adequate opportunity to approve of it.
I also” complain that, although the report of the Tariff Board on exchange and primage was presented to the Government on the 13th April, 1933, we have not been given an opportunity t6 discuss it until now. Important reports of this character should.be placed before Parliament without^ delay. In my opinion, it should be compulsory for the Government to present all reports of the Tariff Board to Parliament-
– This Government is doing so.
– It would be interesting to know how many reports of the board have never been placed on the table of the House.
– Every report received by this Government has been, or will be, presented to Parliament.
– I was not speaking of this Government particularly, but of preceding governments. I feel satisfied that dozens of Tariff Board reports have not been seen by Parliament. In the report with which we are now dealing, the board clearly points out that when making its recommendations to Parliament it had not given any consideration to the protective incidence of exchange and primage. The board reports -
It is recognized that in many efficient industries the price of the output is fixed by local competition or on production costs, and is much below the price of imported duty-paid goods; in those cases the risk due to overprotection is slight. In others, however, there is a definite tendency for prices to creep towards the cost of imported goods. This may be due to one or more of a number of causes, for example -
Undue profit taking;
A review of the board’s reports over a number of years reveals that the board realized the danger of steadily increasing costs of production necessitating increased duties. Pointed and emphatic warnings have been given from year to year. In spite of this recognition of the danger of excessive duties, the board has, in the past, been reluctantly constrained to recommend higher duties in some instances owing to the steadily increasing Australian costs and prices. These higher duties and prices werecapable of being maintained under the relatively prosperous conditions due to high commodity prices and heavy external borrowing. Suddenly, however, these conditions fell away. Almost simultaneously many duties were still further increased, and in some cases doubled, without inquiry and report by the Tariff Board. Thus duties were increased just when the prosperity which previously supported them no longer remained.
That is the most effective paragraph in the report, clearly demonstrating that duties, plus exchange and primage, are making it impossible for our export industries to carry on. I do not know whether honorable members know or care what is likely to be the result of such a policy, but I doubt whether our primary industries have ever previously been in such a deplorable position. “When speaking in Brisbane recently, Professor Brigden said that even if wool remained at its present price it would be from seven to eight years before growers could recoup the losses that they have sustained during the last four or five years. Consider, too, the position of the wheat-grower with wheat at1s. 8d. or 1s. 9d. a bushel at the siding, and think of his cost of production, which is increased by primage and exchange, and by the policy supported by the Labour party of giving consideration only to manufacturers and employees !
How does the manufacturer expect to buy his raw materials abroad if there is no credit overseas to enable him to do so?
– The great bulk of his raw material is purchased in Australia.
– Had it not beenfor the stupid policy that has been supported by the honorable member and others, Australia would have been progressing steadily towards a population of from 50,000,000 to 100,000,000. There are some who talk a great deal about an adequate defence policy for Australia. Surely the most desirable means of providing adequate defence is to encourage a greater population and to develop the country. Unless Australia produces more wealth, it will be quite impossible for us to maintain the standard of living that has been ours in past years. Our governments have borrowed and earned on under artificial conditions, with the result that when the first cold blast of adversity came in 1929, we promptly had 400,000 of our population unemployed. In its report, the Tariff Board also states -
Then the depreciation of currency took place and primage duty was added. The effect of all these increases in landing charges, together with reductions in wages and interest charges and rent, have been to grossly over-protect many industries.
Surely no honorable member desires that, under such conditions, our industries should be over-protected. The report continues -
The board is of opinion that in the best interests of the Commonwealth this overprotection should not he allowed to remain, but must be rectified insofar as practicability permits.
No one knows what is going to happen to our wheat-growers. I recall that the wheat-growers of Western Australia decided last year not to bring their wheat to the railway sidings. At great political risk to myself, I wired them, urging them to honour their obligations to those who had assisted them in the past. Another year of impoverishment is ahead, with bankruptcy staring the growers in the face. Do honorable members wish to see our farmers emulate the farmers in the United States of America and go on strike as a protest against the greedy exploitation sanctioned by this Parliament? The treatment meted out to them certainly warrants such action. In spite of that, many honorable members argue that consideration should be given only to manufacturers and employees. The honorable member for Capricornia has the idea that manufacturers who go before the Tariff Board should not disclose particulars of their finances. I remember that in 1925 it transpired that a firm manufacturing agricul- tural implements had made sufficient profit to double its capital within two years. Parliament should have the fullest information that the Tariff Board can obtain on such matters.
The honorable member for Gippsland proposes to move that the first recommendation of the Tariff Board shall be accepted. That will mean that the deductions from tariff duties due to exchange and primage according to the formula recommended by the Minister should apply not only to Great Britain, but also to those countries which have a standard equal to or better than ‘ sterling. I have no objection to the Government being given power to increase duties, where currency has depreciated below sterling, but I hope that the Minister will insist that any alterations shall be made by regulation and not by proclamation, for where matters affecting the taxation of the people are to be altered Parliament should have the power to review and, if necessary, annul them.
– The minor bill that was introduced last year and has not yet been debated contains an amendment giving effect to the honorable member’s recommendation.
– No ; the proposed amendment applies only to the Customs Act. This matter relates to the Industries Preservation Act. If these alterations are effected by proclamation, and not by a regulation which can be disallowed by either chamber, the only protest that can be taken is to move in this chamber that the Government no longer has the confidence of honorable members.
Because of high costs the primary industries of Australia are in a dreadful position and I hope that the report of the Tariff Board will cause the Government to reconsider the whole position and ensure that the suggested reductions will apply in the case of all countries where the currency is equal to or greater than sterling.
.- I cannot recall any Tariff Board report to the perusal of which I have looked forward with greater interest than this one dealing with exchange and primage. The Deputy Leader of the Opposition (Mr. Forde) has twitted the Government with having instructed the ‘Tariff Board to make this inquiry because of pressure brought to bear on it by members of the Country party. If the action of this party has been the means of bringing into being these schedules, I am, indeed, proud of it. It will be remembered that towards the end of last year the Country party urged upon the Government the necessity for dealing with the position which has arisen as a result of the protective incidence of primage and exchange. It was then pointed out that, instead of there being only two protective factors, as was normally the case - the natural protection afforded by ocean trade, marine insurance, landing charges and so on, plus that accorded our industries - there were no fewer than four such, the cumulative effect of which was to increase duties to a prohibitive degree. We pointed out that there were, in addition to the natural protection of ocean freight and other charges, and the ordinary lavish protection granted by this Parliament, the protection of primage - imposed, no doubt, for the purpose of obtaining revenue, but having, I think it will be agreed, a most pronounced, protective incidence - and the currency protection of exchange, under which £125, Australian currency, is needed to purchase £100 worth of British goods. We considered that it would be most dangerous to Australia to allow these four protective factors to operate simultaneously for an indefinite period, because the inevitable result would be to build, up unsound industries, which could exist only under these extreme hot-house conditions, and would probably peter out if exchange returned to normal, or primage were no longer charged. We felt also that some- industries would be conducted on inefficient lines, because of the absence of outside competition. We believed that, if such industries were allowed to secure a vested interest, it would be most difficult to get rid of them when they could no longer enjoy this exceptional protection. We argued that, if the Government saw fit, owing to the improvement of the financial position, to remove some portion of the primage duty, industries that had been started under extremely artificial conditions would receive a severe jolt; and that, if the exchange rate became normal, we should have the spectacle of manufacturers imploring the Government or the Tariff Board to increase their protection by 25 per cent, to make up for what they had lost. We further pointed out that Article 10 of the Ottawa agreement must remain a dead letter unless some deduction were made from existing duties, partially to offset the protection of the exchange rate. No one will gainsay the soundness of that contention. By article 10, the Commonwealth Government undertook not to protect Australian industries to an extent greater than would allow of reasonable competition by British manufacturers. Even if duties were imposed which, without the protection of exchange and primage, could reasonably be regarded as competitive, the addition of those two items, totalling 35 per cent., would make the protection absolutely prohibitive. We urged the Government to remedy these defects. It was said that our proposal was impracticable. Some honorable gentlemen, who at the time adorned the treasury bench, said that it was impossible of adoption; and I well remember certain sections of the press referring to us gibingly as “ amateur economists rushing in with proposals, the complexities of which we did not and could not understand.” We replied that some of the difficulties could be surmounte’d more easily than our critics supposed. When it was alleged that, in the general tariff column, deductions could not be made that would be just to half a dozen countries with different exchange rates, we said. that there was no necessity to make alterations in the schedules ; that a special resolution enabling a deduction to be made from existing tariff duties should be brought down, to offset to some extent the protection afforded by the exchange rate. Members of the Country party are particularly pleased at the fact that the recommendation of the Tariff Board almost completely embodies our suggestions.
– It does not. The honorable member moved for a complete reduction to the 1921-28 level, without a Tariff Board inquiry.
– That has absolutely no connexion with the point that I. am now making. The Minister will find in the parliamentary debates confirmation of my statement that we recommended that the tariff schedule be not interfered with, but that special legislation be brought down enabling the Customs Department to deduct from customs duties an amount regarded as fair, partially to offset the protection of the exchange rate. On the 9th November, 1932, the adjournment of the House was moved to discuss the following matter of urgent public importance: -
The necessity (or reducing costs in both primary and secondary industries, and for lightening the intolerable burden due to the cumulative effect on industry of customs duty, primage, and exchange, by amending the Customs Act to provide that when the amount of duty payable upon importation is being assessed, an amount shall he deducted from the rate of duty applicable, equivalent to an agreed upon proportion of the adverse exchange rate operating against the importer concerned.
I say that, in effect, what has been done is substantially what we then suggested. Unfortunately, however, the Government is going only a part of the way recommended by the Tariff Board. That body recommended the removal of primage from all items where it was protectively applied, so soon as the finances permitted such action to be taken. I realize, of course, that the qualification attached is a. substantial one, which leaves the Government free to determine when and to what extent primage charges should he removed; hut it is the Government only which is in a position to say when itconsiders that the country’s finances permit of the complete withdrawal of this charge.
I shall deal now with the recommendation of the Tariff Board with respect to exchange. In this case the board recommends that deductions from duty should be made partially to offset the protection of exchange. This recommendation is absolutely specific; it has not attached to it a tag, as the recommendation in regard to primage has, but definitely recommends that one-quarter of the duty that would be payable at the rates listed under the British preferential tariff, or 12^ per cent, of the value for duty, “whichever is the lower, should be deducted. The recommendation reads -
This recommendation shall apply to goods from any country, the currency of which, on the date of shipment of thu goods, is - (n.) British sterling:
Appreciated relative to sterling;
Nominally on a sterling basis.
J regret that the Government has seen fit to adopt only one-half of that recommendation, making it apply merely to British goods, and, for the time being at any rate, except in certain special, cases,” refusing to apply it to goods from foreign coil [i tries. The only reason given by the Minister for having departed from the Tariff Board’s report is that the wider margin of preference that Great Britain would enjoy as the result of flip reduction of both primage and duty in. the case of British good?,- and of no reduction of the charges on foreign goods would provide a margin for negotiations for reciprocal treaties with foreign, countries.
– That is one reason; but there are several others.
-. L regard that as a particularly weak reason. It is surprising to find a government which sets -such store on Tariff Board recommendations allowing the four protective factors to which I have referred to. pile up an immense barrier against world trade, despite a recommendation of the board. If financial reasons compel the Government to retain primage against foreign countries for some considerable time, that of itself would provide a sufficiently powerful bargaining factor. If we could say to a foreign country, “ We are prepared to reduce the primage duty on goods with which you compete with Great Britain, to the same extent as we have reduced it in thu case of Great Britain, in return for a reciprocal arrangement”, a basis for bargaining would be established.
– The Government has taken off several primages in respect of foreign goods.
– No doubt several primages have been taken off, but, as a general rule, the Government has disregarded the recommendation of the Tariff Board with respect to making reductions of duty as a “partial offset to the exchange- applying to countries which tmi are on a sterling or higher than sterling basis - nearly the gold basis. Had the Government carried out that recommendation, the primage would still have given it a sufficient bargaining point with which to negotiate trade treaties. The Deputy Leader of the Opposition (Mr. Forde) affected a great deal of concern respecting the results which might accrue from the action of the Government to some of our secondary industries. One would think from his remarks that these schedules mean a general scaling down of the duties themselves; but I believe that the manufacturer will be more fully protected with three-quarters of the present British duties, as is now contemplated, plus 25 per cent, exchange, than he would be with the total British duties and exchange at par. Much has been said about the additional cost of exchange to the manufacturing industries in respect of their raw materials. That is a justifiable point, and well worth considering; but, again, I believe that there is no manufacturing industry the costs of which have been increased to the extent of half the exchange rate. The raw materials form only a comparatively small part of the total cost of goods -which are sold by manufacturers; and even if the manufacturers have to pay 25 per cent, exchange on raw materials, in no case will the disability to them amount to half the exchange rate. The deduction from duties will, at its maximum, amount only to half of the exchange rate. It is a quarter of the duty up to a maximum of 12£ per cent. Accordingly, a duty of 10 per cent, will have a deduction of 2£ per cent. A duty of 30 per cent, will have a deduction of 7-£ per cent., making it 22$ per cent’.; a duty of 40 per cent, will be reduced to 30 per cent., and one of 50 per cent, will be reduced by 12£ per cent., which is the maximum deduction. In no case will the- deduction be greater than half of the exchange rate. We are perfectly safe in taking half of the exchange rate as the maximum increase which any manufacturer will bear because of the exchange; therefore, a manufacturer will be a little better off, indeed, in some instances, a great deal better off, with three-quarters of the duty, plus 25 per cent, exchange, than he would be with the full duty and exchange at par.
– Does the honorable member consider that it would be a good thing to have exchange at par?
– No, because, if exchange were at par before the prices of Australia’s exports had increased substantially, this country would be brought to its knees, and could not escape default. What has kept Australia going is the exchange premium which is enjoyed by the ‘ exporter, and which to-day is worth on wool from 2£d. to 3d. per lb., on. butter, about the same, and, on wheat, about 7d. a bushel. I would also point out that if exchange falls from 125 to less than 120, only half of these deductions will be made, so that again the Tariff Board is keeping on the safe side so far as the manufacturers are concerned.
– Exchange would have to fall below 120.
– If it fell to 119^, one-eighth, instead of one-quarter, of the duties would have to be deducted. There is nothing extreme about these proposals; in fact, I consider them exceptionally modest.
– If the exchange is a good thing for Australia why cut it down by. half?
– I do not wish it to be cut down by half.
– That will be the effect in the case of manufacturers.
– The manufac.turers will still enjoy the full exchange. There will merely be a deduction from duties which are unjustifiably high in view of the exchange rate being superimposed upon them.
– What they lose on the swings they gain on the roundabouts?
– Nothing prevents the exporter or the importer from benefiting or otherwise from the exchange rate, because that is a factor with which we cannot deal by legislation. The Tariff Board realizes that to permit the continuance of duties recommended withouthaving taken into consideration exchange and primage would be dangerous, and I fully endorse that view. Some relief has been given in respect of primage, but I regret that it has not been given to a greater extent. The Minister has said that the Govern ment cannot see its way to forgo more than about £585,000, and that it is giving relief to that extent by reducing the 10 per cent, primage to 5 per cent, in the case of British goods, and to 4 per cent, in some instances, also by withdrawing it altogether in other instances, while leaving it as it is at present on foreign goods with the exception of a few items.
I notice that there is at least one item relating to British goods - a protective, and not a revenue duty - where the 10 per cent primage is apparently to remain. I refer to galvanized iron. The board in its original report of April, 1931, made two recommendations to the Government. It said that in view of the exchange, primage and so on, there was really no need for a duty at all ; but realizing that exchange might not last, it recommended that a duty of £4 10s. a ton should apply on condition that the manufacturers agreed to reduce their prices to a certain amount.
– The board took primage into account.
– The board was illogical in suggesting that, because a price arrangement had been entered into between the Government and the manufacturers of galvanized iron, there was no necessity to take exchange or primage into consideration in these proposals. The board proposed as one alternative a sliding scale of duties, rising or falling in accordance with exchange. Had that been adopted the decision to exempt galvanized iron from the deductions in this schedule would have been a common-sense one. That proposal, however, was not adopted, but a substantial duty of £4 10s. was imposed. In these circumstances, to say that in respect of galvanized iron there is no need to give relief to offset exchange on the one hand or primage on the other, is wholly illogical and inconsistent. I cannot follow the reasoning of the Government at all. When the Ottawa treaty was arranged there was no exception made in respect of the terms of the treaty just because some particular manufacturer had made a price arrangement with the Government.
I desire recommendations 1 and 2 of the Tariff Board to be carried out in their entirety, and as the Government has given no sound reason for not carrying them out, I move -
That after the words “ preferential tariff “ the following words be inserted : - “ or from any country the currency of which on the date of shipment of the goods is (a) British sterling; (ft) appreciated relative to sterling; and (c) nominally on a sterling basis.”
If that amendment is carried relief will be given in connexion with duties imposed on such goods to the extent of onequarter of the British duties, even if those duties apply to foreign goods, and the margin of preference between the charge on British goods and that of foreign goods will still be maintained.
– In that case, preference would be given to American goods.
– It would be given to any country, but only as a flat rate recommended by the Tariff Board on the basis of the British duty. The board does not recommend that one-fourth of the foreign duties be deducted. It is careful to ensure that the full margin between the British and foreign countries will be preserved by recommending that a deduction shall be made equal only to one-quarter of the existing British duty, even if the foreign duty be much greater.
– The effect of the amendment would be to benefit the United States of America, and to penalize Japan, because recommendation No. 4 would have to be accepted in its entirety.
– In the case of Japan, it is a matter which comes under recommendation No. 4, rather than of decreasing duties, in order to offset its depreciated currency.
– The amendment would involve the acceptance of the whole of the Tariff Board’s recommendation.
– I am prepared to accept every part of the recommendation which I believe is sound, and I shall support any action of the Government which I believe is sound. The Government’s attitude in connexion with recommendation No. 4 is sound; it is an improvement upon that of the Tariff Board, and I shall support it; but I do. not think that the Government has given any good reason for deviating from the board’s report in connexion with items Nos. 1 and 2. For that .reason I move the amendment.
.–The Government’s tariff proposals now before the committee should be supported by all reasonable protectionists. A majority of the Australian people have adopted a policy of what is usually termed adequate protection, but which in some instances amounts to prohibition. A tariff which was considered ‘adequate by a majority of the people has for some time been increased by the high rate of exchange, and in the circumstances the only reasonable course to follow is to set-off as much as is necessary of the existing high exchange rate. The tariff passed in 1929, which at that time it was considered would afford complete and effective protection for Australian industries. was amended in 1930-31 by the Government then in power without any regard to the recommendations of the Tariff Board. That was a slap-dash tariff, consisting of duties sufficiently high to satisfy all the manufacturers in Australia, but it only served to incite manufacturers to make requests for still higher duties. Generally speaking, Australian manufacturers were delighted with the Scullin tariff which, to a large degree, has been maintained by the present Government. The incidence of exchange now affords an additional 25 per cent, protection on all goods manufactured in Australia from Australian materials, and, to a smaller extent, on articles manufactured from imported materials. In reviewing the items in the schedule the Tariff Board acted on the assumption that exchange was at par, but for two years the rate has been against us at £125. After full inquiry the Tariff Board is now satisfied that the increased rate of exchange is to be more or less permanent. It realizes further that, while Australia is establishing some slight excess of credits in London, the amount is small, and that should bad seasons occur, there might be a shortage instead of an excess of funds in London. Professor Giblin, who assisted the board in its inquiries into this matter, after conferring with other economists, said : -
I think we must regard ourselves as on ti lis £125 basis with comparatively little variation one way or the other, almost indefinitely, certainly indefinitely from the present point of. ‘view.
The present rate of exchange can, therefore, he regarded as permanent; and, if we are to maintain an adequate tariff, we must reduce duties in proportion to the extent by which they have been increased by exchange. The Deputy Leader of the Opposition (Mr. Forde) quoted the opinions of individual manufacturers in Sydney and in Melbourne, and also that of the secretary of the Chamber of Manufactures. I do not think that we should take any notice of the opinions of such persons, because they are directly interested in maintaining present duties at higher than reasonable rates. In giving evidence before the Tariff Board, one witness representing the manufacturers envisaged an increase in local prices. He said -
Exchange prices also inflate the price levels of local goods which are wholly consumed within Australia, for it i* presumed, and it is not a matter for argument, that the depreciation in currency results in a general increase in commodity values, calculated or measured in terms of that currency.
He argued that further protection by way of a high exchange rate should be maintained, because exchange has the effect of .increasing local price values, and should continue to increase them further. That gentleman had in mind a further increase in the price of commodities consumed in Australia, hut such an increase is not justified by costs. According to an estimate of the Tariff Board since the exchange was increased, wages have fallen in Australia by 15 per cent., and, in addition, there has been a substantial reduction of interest. On this subject, Professor Giblin said -
Running costs of production in Australia, apart from raw material imported or exportable, have fallen appreciably more than in Britain.
Although manufacturers’ costs have fallen, the cost of goods of Australian manufacture has not decreased in anything like the same ratio. Manufacturers who contemplate an. increase in price levels have provided the Deputy Leader of’ the Opposition with a brief in support of excessive protection such as would continue if the exchange were disregarded. Such a weapon should not be placed in the hands of manufacturers for use against the public. There is much to be said in favour of the amendment moved by the J/r. Nairn
Deputy Leader of the Country party. There is no more logical reason for giving excessive protection against foreign countries, than there is in maintaining excessive protection against Great Britain. Many foreign countries are excellent customers of ours. “We have a favorable trade balance with Italy, Belgium, Germany, and Japan. The currency of Japan has depreciated more than that of Australia, but the Tariff Board has recommended that in the case of Japan, or other countries in that category, duties should be increased. “We should pay some regard to general trade considerations. “We cannot afford to sacrifice our favorable trade balance with Japan of many million pounds. Australia has already suffered a good deal through the retaliation of other countries which have resented our irritating tariff embargoes. If Japan chose to adopt an unfriendly attitude towards Australia we should lose a great deal of the trade that we at- present enjoy with that country. Tariffs should have regard to the general and not to the particular interests of a country. It is desirable sometimes to sacrifice particular to the general interests. It might bc wise for us to allow a certain quantity of Japanese goods to enter Australia in order to safeguard the substantial trade that we are at present doing with that country. I support the Government’s policy in connexion with exchange and primage and fail to see that there is any reason for opposition to it, for the interests of Australian manufacturers will not be inimicably affected thereby.
.- I congratulate the Government on having introduced this measure, because it will automatically bring about sweeping reductions in the tariff schedule. I wish, however, to direct the attention of the Minister to one or two matters that need rectifying. “When misunderstandings or misapplications of a law occur it is desirable that they should be corrected without delay. In my political experience I have seen good laws well administered with general satisfaction, and other good laws badly administered with general dissatisfaction.- “When a law is twisted or distorted by its administrators to suit particular ends annoyance is bound tooccur. I ask the Minister to give atten- tion to a particular case relating to belt fasteners imported into Australia since the new tariff schedule has come into operation. The duty on this consignment amounted to fi 5s. 9d., but an exchange adjustment of 6s. 5d. was allowed which made the ‘duty payable 19s. 4d. The collector then added 4s. 3d. under the heading of primage, adopting the new rate of 5 per cent., and following this he added 6s. 5d. for deposit. The advantage of the exchange adjustment was, in that case, entirely cancelled. The reason given for adding the 6s. 3d. was that it was necessary in order that the amount of duty payable should not fall below that provided in the 1921-30 schedule, which has been ratified by Parliament. But I ask the Minister to regard primage as a customs duty. Its imposition certainly gives increased protection to locally manufactured, articles. I submit, therefore, that the amount of primage should be added to the duty before the exchange adjustment is made. If that had been done in this case a deposit of only ls. 2d. would have been required to bring the amount of duty payable up to that of the 1921-30 schedule. I maintain, and have always maintained, that primage is, in effect, a customs duty. I strongly contend that the collectors of customs in the various States should be required to take primage into account before making the exchange adjustment. If that is done the amount of deposit required will certainly be very much lower. The belt fasteners to which I have referred were shipped from Liverpool by the SS. Ballarat and landed here early in October. In this and similar cases, the procedure adopted by the department is unfair and unreasonable for it robs importers of the advantage that should accrue to them through the exchange adjustment. Probably by the time consideration of this business has been completed by Parliament, a large amount will have been paid in deposits. If, in the meantime, the Minister could review the procedure as I suggest, he would afford importers the relief which the Government surely intends them to have. I desire a procedure to be adopted which will give those concerned the immediate benefit of any tariff revisions that are made. Tariff schedules sometimes hang fire for years before ratification. If that were to happen in this case, the department would go on collecting deposits from importers, and the money so paid would be lost to them for all time, for no refunds are made in such circumstances. The principle at. present in operation is that at 9 a.m. on the day following the tabling of a tariff schedule by the Minister, the new rates become operative so long as they do not fall below those of the previously ratified tariff. I wish to see a provision incorporated in the tariff law which will provide that a schedule shall become operative immediately, irrespective of whether the rates provided are below those of the last preceding schedule ratified.
Another complaint I desire to see rectified relates to the application of sales tax. In my opinion, this tax also has the effect, in many instances, of a tariff duty. Six per cent, sales tax is payable on certain imported articles, but not on similar articles manufactured in Australia. That should not be so, for it nutans added protection is given to the local industry. The adoption of that practice has the effect of automatically upsetting duties which have been agreed to only after careful consideration. An abuse of the same kind is practised by various State railway departments. Substantial preferential rates are granted to certain locally manufactured articles, whereas imported articles of a similar nature are subject to full rates. This also amounts to additional protection to the local article.
– In how many States except New South Wales does that apply?
–! know definitely that it applies in New South Wales and Queensland, and I believe that it also applies on certain lines in Victoria. It has been suggested in some quarters that the Queensland railway authorities are actually contravening the Constitution by granting differential rates on wheat and flour.
I trust that the Minister will reconsider the present practice in regard to both deposits in consideration of exchange deductions and sales tax.
.- The honorable member for Calare (Mr. Thorby) has congratulated the Government on having introduced this measure, because he says that it will make sweeping reductions of tariff duties on a large number of items. That is the very reason why I cannot support the proposal. The honorable member for Gippsland (Mr. Paterson) emphasized that Australian industries enjoy protection under four headings, namely, freight and landing charges, customs duties, exchange and primage. He then went on to say that if the protection due to exchange were to disappear, certain industries would also disappear. I gather from that remark that those industries are not receiving sufficient tariff protection to enable them to maintain operations* and need the protection afforded them under the other headings mentioned by the honorable member.
– What I meant was that certain industries were of the hothouse variety, and could only carry on operations while protected in the four ways that I specified.
– If those industries have been set up, and given special protection, and yet find the exchange protection necessary for their maintenance, I contend that the innovation which the Government is now proposing is dangerous in the extreme. If, on the other hand, they are industries that are not enjoying adequate protective duties, but which have been built up as the result of protection afforded by exchange and primage plus the natural protection of freight, &c, the honorable member merely proves that they have shown themselves to be efficient, and should not be allowed to go out of existence as the result of this adjustment.
– In such a case there will be no adjustment. It is impossible to reduce a duty that does not exist.
– There is that small margin of duty to which the honorable member referred, which is not considered as a protection. It must be remembered that, even before the introduction of primage, duties were imposed largely for revenue purposes. The honorable member for Gippsland considers that the Government has” not gone far enough, and he has moved an amendment which seeks to apply to foreign as well as British countries the reductions that are embodied in the proposal of the Government.
– To countries whose currency equals sterling or higher.
– Which will mean that all foreign countries doing business with Australia will be embraced under the amendment, with two unimportant and one important exception, the latter being Japan. “ Mr. Paterson. - That is what the Tariff Board recommends.
– I gather that that is so, and I admit that the honorable member is able to throw a pretty heavy brick at the Government, for it has professed to pin its faith to the recommendations of the Tariff Board, hut now has no hesitation in refusing to cany out that policy.
– The honorable member for Gippsland wishes to accept only portion of the board’s report.
– Which indicates that both he and the Government are inconsistent. The Government has definitely declared that its policy is to accept part of the recommendations of the Tariff Board. The proposal before the committee is that there shall be an adjustment of protective duties to compensate the effect of exchange. Primage will be dealt with by another resolution. In this proposal the Government has departed from two principles of its declared policy; the first being its declaration not to interfere with exchange, but to leave it entirely to the banks. If you interfere with the effect of exchange you, in effect, interfere with exchange; and that is what this resolution does - it interferes with the effect of the exchange rate upon importations. That is the first principle the Government has abandoned. The second principle which it has abandoned is its promise not to reduce duties on any item without first making it the subject of inquiry by the Tariff Board. The Tariff Board has not made an investigation into the industries which will be affected by the reductions of duties in this long list of items.
– With the exception of two items, including galvanized iron, the recommendations of the board were based on par, and not on the present rate of exchange.
– I challenge chat statement, and as there are mora than two exceptions, it means that there may be more. There are industries in Australia which have not, in recent years, asked for increased duties, but have been content with whatever protection primage and exchange have given them. They have not been investigated by the Tariff Board, nor have any duties been granted to them after exchange and primage have been operating. This resolution will take from them the protection previously enjoyed as the result of exchange and primage, and will probably involve them in disaster. Those are the two main points of disagreement which I have with the proposals of the Government.
All who have considered the problem of exchange admit that it is most involved and intricate. Yet, after a most perfunctory examination of the matter - I say it without any desire to be offensive - the Tariff Board has presented four recommendations with formulae, and we are asked to legislate on their report. 1 ask honorable members to weigh the position seriously before they tamper with the . question on the meagre information that is contained in the report of the Tariff Board, and that statement is based on sheer guesswork. They are certainly not based on any scientific adjustment or ascertained facts. Their basis is guess* work, just as is the contention of the honorable member for Gippsland that fully half the rate of exchange is an added protection. Neither the honorable member nor anybody else can be sure of this, for nobody has investigated the subject to show to what extent the rate of exchange gives a protective duty. Many hasty conclusions have been arrived at. I have many times heard the honorable member for Gippsland adding to the. 25 per cent, exchange, the 10 per cent, primage and 40 or 50 per cent, ordinary duty, making the total protection 100 per cent. In addition to being misleading, such juggling of figures displays a lack of analytical power, and indicates a lack of investigation into the whole question of the effect of exchange on the importation of goods to Australia.
– That is the way in which some honorable members have been misleading the farmers.
– Undoubtedly. One thing stands out clearly, that the full amount of the 25 per cent, exchange is a subsidy to export.
– Many farmers do not believe even that.
– Probably the reason is that they are represented in this Parliament by persons who have made the protectionist policy a stalking horse to their own political advantage, and the disadvantage of Australian development and of the farmers themselves. It has been stated in this chamber that, as a result of the rate of exchange, the duty on a given item has been increased by 25 per cent. “ After seeing the modifications that have been made in the report of tho Tariff Board, and upon certain facts being brought to light, honorable members of the Country party have modified their statements. Members of my party have contended from the beginning that the rate of exchange cannot fairly be added to the existing duty, and regarded a3 an added protection. The board admits it, as also does the Minister. To-day, even the honorable member for Gippsland admitted, by implication, that at least half of the preference is added protection. But it is only guesswork. When referring to the proportion of exchange, which represents protection, the board is very careful not to give the slightest hint as to what really is that proportion.
Sitting suspended from 6.H to 8 p.m.
– Many industries which for years have not sought increased duties will be adversely affected by this proposal.
– If the right honorable gentleman will name them, I shall have an inquiry made into them.
– I have a list which I shall give to the Minister later. Honorable members are aware that the” position in regard to industries throughout the world has changed within the last few years. When the depression hit other countries, they began to dump their endofseason goods in Australia, which is at the antipodes in relation to the majority of the older countries. Protection which was adequate in normal times was not then sufficient; but that abnormal period was accompanied by abnormal conditions in relation to currency, and the benefit derived from exchange, and more particularly from the 10 per cent, primage duty, enabled Australian industries to carry on. The removal or reduction of that protection will make, their position precarious. We are asked to vote holus bolus for the reduction of protective duties on a large number of industries, without an inquiry having been, made by the Tariff Board as to the effect which such a reduction may have upon them. It has been claimed that these industries receive from exchange protection amounting to 25 per cent. That is a hastily arrived at and false conclusion. Those who make the claim ignore many important factors. The Tariff Board0 itself has admitted this, but in a vague way, It says -
Generally, the manufactured product includes imported or exportable materials: then the protective effect of a duty is not increased by the full amount of exchange payable, but by a proportion of it, dependent upon the relation between the value of the exchange-affected materials, and the whole.
That is illuminating, is it not? I defy any honorable member to glean from that paragraph the slightest conception of what the proportion is.
– It is like the taxation proposals.
– It is worse. With taxation proposals there is a curve, from which a mathematician can work out the exact figure. No mathematician or logician can work out this proportion.
– That is why there is a margin.
– That is why the board jumped to the conclusion that 12-J per cent, should be the maximum extent to which the duty should be reduced because of the effect of exchange. That, however, is nothing more than a guess. The Minister dealt with this matter in a carefully-prepared speech. He said -
The effective protection due to the adverse exchange on sterling recedes from the maximum of 25 per cent, as the proportion of exchange-affected material used in the Australian product increases.
That is true: but what does it prove? Does it give any indication of the proportion? Not the slightest. It is a vague expression, which announces a truism without giving definite facts. Yet, in the absence of anything to guide the Tariff Board, the Ministry, or this
Parliament, as to what proportion of protection is given by exchange, we are asked to agree to certain duties being reduced, and thus to decrease the effective protection by 12-J per cent. The honorable member for Gippsland admitted that, on account of the disability suffered by manufacturers because of exchange, there must be some deduction from the 25 per cent. He said that the disability would be slight, because it would be caused only by the exchange on their imported raw materials. I join issue with him right away. Australian manufacturers have to bear a disability caused by exchange on articles other than imported articles. They have to bear the burden of exchange, not only on every article of raw material that they import, but also on every exportable article of raw material that is worked up in Australia. Let me illustrate my point. The textile industry uses wool as a raw material, and the cost of wool in Australian currency is from 2d. to 3d. per lb. greater than in sterling and from 5d. to 6d. per lb. greater than in gold. I invite honorable members to follow further the ramifications .of exchange, and to see what little regard has been paid to it. The cost in Australian currency of everything exported is increased by reason of exchange. Take wheat, for example. It may be said that, wheat is not a raw material of any industry except the flour-milling industry. I contend, however, that indirectly it is. The price of wheat is raised because of exchange. I am not quarrelling with that; I am glad that exchange enables the growei’3 of wheat and wool to receive a higher price for their product. The point that I make is that the cost of bread is increased, and that that raises the index figure which governs the basie wage; and the basic wage affects the cost of all raw materials, machinery, and manufactured articles generally. Exchange Costs Australia approximately £24,000,000 per annum on exports totalling £96,000,000 sterling. The cost in relation to the export of merchandise alone, which amounts to £’7S,000,000, would bs approximately £20,000,000. The export of gold also must bc added, if it is won during the season, because then it is a primary product. It may, therefore, safely be said that the cost of exchange to Australia is between £20,000,000 and £22,000,000, out of which the governments of the Commonwealth and the States pay approximately £7,000,000 to meet their overseas obligations. Where does that sum come from? It does not come from the air. Every section of the community contributes to it. The primary producers contribute a quota, and to that extent lose some of the advantage which they gain from the higher export price for their product. In taxation and in general charges, as well as by means of a special charge ou raw materials imported and other raw materials that are exportable, the manufacturing industries pay a quota. I a3k the committee: Has the Tariff Board or any other body collected data that give us anything like an accurate estimate of the disability caused to Australian manufacturers by exchange? One .surely could have expected the Government, before tinkering with this big national question of exchange, which has baffled some of the greatest experts within the last few years, to obtain something more than this Tariff Board report, which gives no indication, even in a general way, of what the proportion is, but simply proposes by rule of thumb to reduce duties by onequarter unless the rate of exchange falls below approximately 20 per cent. Yet, from one end of the country to the other, we have been advised not to leave these matters in the hands of Parliament, but to refer them to the expert Tariff Board, so as to obtain an exact mathematical calculation. Here is the result: Nothing definite, nothing tangible; merely a general statement, and a rule-of-thumb method of reducing duties by 12 J per cent. Honorable members may ask whether that represents the full extent of the disabilities to be placed on Australian manufacturers. I say that it does not. We have to bear in mind that, although the benefits given to the manufacturer are reduced, there is to be no reduction of the disabilities suffered by him if exchange should drop from 25 per cent, to 12J per cent. That is a serious position, which ha3 not been given due weight either by the Government or by the Tariff Board. The board has made the definite statement, which was repeated by the Minister to-day, that with the- exception of two items exchange was not taken into consideration when the duties were fixed. I challenge that assertion. I am not in a position to go through the whole list of tariff items, but there is one upon which I have the report of the Tariff Board, which shows that the rate of exchange was taken into consideration ; and at the time it was 30 per cent. No allowance is made for that in this report. The Tariff Board stated in effect that it usually disregarded the exchange because there might be a reduction in the rate of exchange or the proportionate increase of local costs due to exchange might increase. I agree with the board on the first point, but what attempt has it made to meet the second point or to ascertain what that proportion is? It has not attempted, to deal with that matter, and has left it in the air. Exchange is added to meet the costs, but to what extent no one knows. Only one thing is certain, that our depreciated currency or the rate of exchange does increase the cost of manufacture of local industry.
I must admit that the honorable member for Gippsland had some justification for crowing to-day. The Country party has brow-beaten the Government by its constant demands for this method of reducing the protective duties applying to Australian industries. That party stands for low duties and its policy is as near free trade in many respects as anybody, who is not an avowed freetrader, could wish. It objects to anything like effective protection to Australian industries, and in its fight for lower duties has emerged triumphant. It is -entitled to all the credit, if any credit is due, for aiming a smashing blow at Australian industries. The formula recommended by the board and adopted by the Government provides that the duties on British goods shall be reduced by onequarter, but no reduction of duties is being made on foreign goods. The amendment moved by the honorable member for Gippsland would apply to foreign as well as British goods a reduction of the duty by one-quarter, or 12i per cent, of the value, whichever is the lower, and, as the Minister has pointed out, a duty of 50 per cent, is subject to a maximum reduction of12½ per cent. That would apply to goods where the currency is on sterling or where the currency is appreciated in relation to sterling, or is nominally on sterling. A duty of 50 per cent. would be reduced by12½ per cent., and that would also apply if the exchange fell to 20 per cent., and the Australian currency was depreciated by 16&2/3 per cent. If the exchange, which stands at 125, fell to 120, there would still be areduction of duty of 12½ per cent., and that would further reduce whatever advantage the manufacturer receives to 7½ per cent. without removing any of his disabilities. The disability of 20 per cent. in respect of exchange would still remain. I warn the Government that it is sailing very close to the wind in connexion with many of our Australian industries.
-What happens if the exchange rises to 30 per cent.?
– It did, and some of our industries which were afforded protection at that time have not been given additional duties since the exchange has dropped.
– If the exchange drops to 19 per cent., the proposed reduction of the duty is halved.
– Yes; but let me give an illustration to establish the point I am making. The Tariff Board has said in effect that it usually recommends duties as if the exchange did not exist. I have been looking through old reports of the board to ascertain what has actually happened in the past, and I discovered a report on item 219, relating to tools. On pages 14 and 15 of that report, the board says -
As to tools not admissible under by-law on the basis of the present rate of exchange - 30 per cent. - and other charges, no justification can he found for the imposition of duties in excess of duties operating under the tariff 1921-30, 35 per cent. British, and 45 per cent. general.
– I have referred that item to the Tariff Board to ascertain whether exchange was taken into account.
– I have quoted from the actual report of the board.
– It is not clear.
– It is perfectly clear. The board made that statement when the exchange was 30 per cent. To-day the rate is 25 per cent. The present proposal will further reduce the British duty from 35 per cent. to 26¼ per cent. When the board reported on this industry the British tariff was 35 per cent. plus 30 per cent. exchange, making 65 per cent., less local cost of exchange. This proposal will mean that the duty and exchange will be 51¼ per cent. less the local cost of exchange or a reduction of 13¾ per cent. The position of the industry will be worse to that extent than it was when the board reported on it.
– That matter will be considered.
– I am glad to have the Minister’s assurance, but while we are waiting for the board to report on this industry it may be forced out of existence at a time when we should make every provision for the employment of our people. The general assumption upon which this legislation is based, and upon which the congratulations of the Country party are based, is that the reduction of 12½ per cent. or less, will bring about a general cheapening of the costs of production in Australia. It is assumed that a reduction of duty will cheapen the cost of goods in Australia, and that the Australian manufacturer includes to the limit in his charges every fraction of the protective duties. I am sure that the Minister will deny that that is done in Australia.
– It is done in some instances.
– The only instance in which it is done is where the manufacturer is selling so much below cost that he requires the whole of the protective duty to enable him to carry on. But that is the exception which proves the rule. The general rule is that Australian manufacturers do not take full advantage of the protective duties. This legislation will not enable any reduction of prices to take place. On the contrary, it will expose our Australian industries to unfair competition, and cause them to lose some of their trade to British manufacturers.
– The Tariff Board says not.
– It does not.
– The board said that these duties would not leave Australian manufacturers vulnerable.
– The board merely stated that the Australian manufacturers would not lose all their trade.
– What is the difference?
– There is a vast difference. Let me give one illustration, which was placed before the Tariff Board, to show that the manufacturers do not include protective duties in their charges, and that these reduced duties will not bring about lower prices for goods. Let us compare the charges made by British exporters to Australia with those they charged to New Zealand, where there is no local manufacture. It is an important factor which has to be taken into consideration. According to the general statement of United Kingdom trade issued by the British Customs Department - and this evidence was submitted to the Tariff Board on oath - the average f .o.b. prices on the following commodities are : -
– When was that evidence submitted ?
– The honorable member can obtain these figures from the report of the Tariff Board.
– Has the right honorable member any figures showing’ what the costs were before the exchange in New Zealand rose to 20?
– During the tariff debate, I quoted a number of items, and at this stage, it would not be in order for me to refer to them. One of the outstanding features of one of the board’s reports is that when a duty was placed on black No. 8 fencing wire, the industry was established in Australia, and immediately the price of the imported wire fell, but no reduction took place in the price of galvanized fencing wire, because the industry had not then been established. Later, when a duty was imposed upon galvanized wire, and the industry was established in Australia, the price of the imported article was reduced. God help the farmers if they are left to the tender mercies of the importers, without Australian industries being in existence to provide competition. For the reasons that I have given,I oppose the proposals of the Government, and also the amendment of the honorable member for Gippsland.
.- I welcome the proposals of the Government, first, because I believe that they will bring about a reduction of production costs in Australia ; secondly, because they will improve our trade relations with our best customer - the United Kingdom - and also with other good customers when the Government has had time to negotiate agreements with them; and, thirdly, because I believe that they will go a long way towards bridging the unfortunate gap which until recently has been widening between the different non-socialistic groups in Australian politics. I wish to place those facts on record, because in the past, I have, at various times, been an outspoken critic of the Government when I felt that it was falling short of its pledges and commitments.
– What does the honorable member mean by non-socialistic groups ?
– I do not include the honorable member for West Sydney (Mr. Beasley) among them, but if he wishes to shed his socialistic ideas, I should have no objection, because such a step would denote a further division among those different sections of Australian politics which have damaged our credit overseas, and helped to increase enormously our industrial costs.
The Leader of the Opposition (Mr. Scullin) has expressed alarm at what he has described as the rule-of-thumb method which the Tariff Board has adopted for the lowering of duties. Generally speaking, honorable members will be divided into two classes in their view of this report. Those who favour the lowering of duties will welcome the report, while those who believe in practically a prohibitive policy, which permits duties such as those formerly enjoyed by the match industry, and which were abused by that industry, will oppose it. I shall endeavour to deal with the report on its merits, although, as one who considers that industrial costs in Australia have been unnecessarily inflated by high duties, I am naturally disposed to welcome the reduction of duties. I believe that our tariff has been absurdly, extravagantly, and, at times, destructively high. It has, in some instances, adversely affected secondary industries in the market for their goods, and has handicapped our export industries as well. But I do not desire our secondary industries to bc exposed to the risk of ruin and destruction by sudden changes in tariff levels to which they have no chance of adjusting themselves. Any necessary adjustment of the tariff should be made in a manner which will enable secondary industries to submit to a certain amount of extra competition, and check and prevent them from following the easy way to profit by passing on costs and maintaining old plant and following out-of-date- methods. Such a policy must inevitably add to the costs of primary and efficient secondary industries. I have, therefore, read this report very carefully to ascertain what safeguards the board has proposed so that the adoption of its formula shall not subject valuable Australian secondary industries to serious danger or serious competition. I entirely dissent from what the Leader of the Opposition has said about the board in this connexion. On page 7 of the report the following statement is made : -
After reviewing a large number of tariff items embodying protective duties at British preferential tariff rates up to 50 per cent, ad valorem or its equivalent, the board is satisfied that in all the cases subjected to scrutiny a reduction of one-fourth of the duty is reasonable and docs not, in any instance, db more than allow for the net effect of exchange. In many instances it does not sufficiently reduce the protective effect of the exchange - but a scheme to be practicable must be readily workable and cannot accurately and with equal effect deal with all goods.
That statement clearly shows that the board has checked very many reports, and a great deal of evidence in its effort to gauge, generally, the direct effect of costs and, particularly, the effect of duties on the raw material of certain industries, respecting which the Leader of the Opposition gave such a lucid account.
– Some of those reports may have been years old.
– But not even the later reports took into account* the indirect effect on industry of exchange and primage. I believe that the margin allowed by the board is so conservative as to eliminate any risk of unfair competition from British importers with Australian industries which are doing the fair thing. Some Australian industries will, undoubtedly, feel the effect of even this small reduction of the protection that they now enjoy; but such industries are, probably, costing the country far more than they are worth. The board points out that some industries are taking an undue profit from the community, and that others are working inefficient plant by out-of-date methods. I do not think that any honorable member wishes to saddle the primary and secondary industries of Australia with heavy costs in consequence of certain industries being operated by out-of-date methods and plant. We should welcome the infusion into our secondary industries of a little fresh competition which will act as a check upon exploitation, and prevent the Australian public from being penalized by either the sloth or the greed of a minority of industries which are not worth what they are costing the community.
This report brings approximately up to date between 200 and 300 other reports which the board has made during the last three years. I have been criticized by members of the Government party for having supported an amendment moved some time ago on behalf of the Country party to effect a general reduction of tariff duties to approximately the 1921-28 level. Although it may be said that I was elected on an undertaking to revise the tariff in conformity with Tariff Board reports, and was at one time a member of the Government, I wish to make it clear, once more, that in my speeches, and in my own electorate, I reserved to myself a somewhat freer hand to deal with tariff matters. When I joined the Government, I, of course, limited myself to the revision of the tariff in the way proposed by the Prime Minister in his policy speech, and I was willing at that time to give a trial to that method of reducing the excessive costs of industry in Australia. It was only- because of the changed circumstances in the Commonwealth, which had the effect of causing both the Tariff Board and the Government to lose ground, that, eventually, when I was no longer a member of the Government, I gave my support to the amendment of the Country party. When the Government submitted its last tariff schedule to Parliament it intimated, through the Minister for Trade and Customs, that about 214 reports had been made by the Tariff Board, and that the board considered that its recommendations were substantially in line with articles 9, 10 and 11 of the Ottawa agreement. But those reports gave no consideration to the changed condition which had arisen in Australia in consequence of the imposition of exchange and of primage, and the much greater reduction of wages which had taken place in this country than in Great Britain.Those reports were, undoubtedly, out of date on those material and essential points. I consider that if the recommendations of the present report are implemented, we shall do a good deal to bring those 214 reports into conformity with the real facts of the case. We should, therefore, welcome this proposal. But not even these adjustments will, do all that should be done.- The Tariff Board has allowed a margin for possible error, and, in any case, the- reductions are being effected at the top of the tariff. This reduction will, iri many cases, remove . only the ornamental top storey from this fiscal structure. In my opinion a great many of our tariff duties are so excessively high that a reduction of them by a quarter will not have any effect at al!. Some of our industries will not feel these adjustments, because they are already conducted on an efficient basis. The members of the United Australia party, whether they represent rural, or city constituencies, and, I should think, the members of all parties are glad that some Australian secondary industries are able to carry on without using the protection afforded them by the tariff, exchange and primage. It is because we believe that the number of such industries could be very much increased and that primary industries and certain secondary industries which depend on local manufacturers for their equipment or raw material should not be handicapped by having to ‘ pay too heavily for their requirements, that we approve of these proposals of the Government. Valuable secondary industries to Australia should not be handicapped by the granting of undue protection to certain other secondary industries which are worthless. Probably, as the result of the operation of the principles outlined in this report, a few inefficient and inappropriate secondary industries will fail because they arc called upon to meet fresh competition. But our natural and efficient secondary industries will npt suffer by the added competition to which they will be subjected by importers. The Leader of the Opposition referred to fencing wire. I think it is probable that if the whole of the present duty on this article were removed, and not merely the 25 per cent, as is now proposed, wire could still be sold in Australia at a lower price than that at which it could be imported from Great Britain. But the price could be still lower if the cost of certain raw material required in its manufacture were not inflated by the granting of protection to other industries for which Australia is unsuited.
My second reason for welcoming this report is that I believe that it affords evidence, - particularly to our best customer, the United Kingdom, that we are prepared to treat our good customers as friends and neighbours and not enemies. We do not wish to lay the basis of a war of armaments by starting off with a war of trade. This adjustment was not specifically provided for in the Ottawa agreement; it brings up to date a great many reports of the Tariff Board which ignored the protective incidence of primage and exchange, and were, therefore, out of line with the agreement. It is true, as the Prime Minister (Mr. Lyons) has told deputations, that the British representatives, as distinct from the British public, knew perfectly well before they went to Ottawa that the Australian Government considered that it was in honour bound not to concede general tariff reductions without first having an investigation made by the Tariff Board. It is no less true that the British representatives were led to believe that a revision of the tariff could be pressed on a great deal more rapidly than has proved to be practicable if thoroughness is to be observed by the board.
The adoption of a report like this, embracing a great many general circumstances which have arisen since the reports on individual items were submitted to the Government, brings the implementing of articles 9, 10 and 11 of the Ottawa agreement very much more nearly up to date.
The way in which the Government has adopted the report by granting immediate preference to our best customer, the Mother Country, and by indicating that foreign countries which are our good customers may also have the benefit of a similar adjustment if it is possible to make a trade agreement with them, is another definite step in the right direction. It is a fair thing for the Government to reserve to itself the right to put foreign countries on the same favorable tariff rate adjustment as British countries, for this matter really goes beyond the actual terms of the Ottawa agreement, although it is. to some extent, a compensation for the difficulties of obtaining detailed tariff revision. If it is a fair thing for Great Britain, in the matter of quotas, when going beyond the terms of the Ottawa agreement, to give assurances to Denmark, Argentine and other countries, it is a fair thing for this Government to make these reservations in respect of foreign countries. In both respects I welcome that side of the schedule very much indeed.
Politically, the tabling of this resolution is a great relief to those honorable members who feared that the non-socialist parties were fast drifting into a hopelessly divided position which would weaken them considerably. I believe that there has been failure on both sides to make due allowances for existing difficulties. We have heard a good deal from members of the Government about the indecency of being requested to make general adjustments in the tariff, as that would mean breaking the election pledges that were contained in the Prime Minister’s policy speech. No doubt the Government felt that it was bound by those promises and could not go so far as it was asked to go by deputations, the Country party and myself. I call the attention of honorable members to page 13 of the report of the Tariff Board in which it refers to a recommendation made in August of last year, that the primage duty should be removed from protective items in the tariff schedule, and makes other references to its anxiety about the protection of exchange. An opportunity was then afforded to the Government to go a long way towards meeting the requests of the Country party by adopting that recommendation. Certainly when the Minister for Trade and Customs (Mr. White) was resisting the amendment that was moved later by the Country party, he mentioned a huge amount, which, he suggested, would be involved, but other Ministers advanced the argument that the. election pledges of the Government precluded it from taking such a step. The Government failed to meet the Country party; and I, knowing as an ex-Minister the attitude of the Tariff Board which is now made public in this report, in common with many other honorable members, doubted its good faith. The adoption of this report goes a fair way to restore that faith. I hope that this is. the beginning of a general effort really to give effect to the Government’s election pledges. i
When one analyses the extent of these adjustments one can see that they go a fair distance towards’ the tariff level of 1921-28, at any rate so far as the incidence of the tariff on the. exporting industries are concerned. There are over 1700 trade descriptions in the tariff schedule, on approximately 700 of which the present British rate is “ free.” To S49 of the others this exchange adjustment will apply. In a great many cases that; will bring the British rate below the 1921-28 schedule rates; in others it does not go anywhere near them. The big group of specific duties which were amended by the last government - apparently by the simple process of multiplying by two because that was the easiest calculation and Ministers were in a hurry - will not be taken back to anything like the 1921-2S level and will have to wait until the Tariff Board has completed its investigation of the whole schedule. This adjustment, however, should go a substantial way in the direction of reconciling the non-socialist parties as weir as of putting some pressure upon our inefficient protected industries. In that way it should help, if only a little, towards the average reduction of industrial costs in this country. It certainly goes a great way towards making possible better trade relations with Great Britain and other countries.
I do not intend to vote for the amendment that has been moved by the Deputy Leader of the Country party (Mr. Paterson), who claims that the Government is departing from its promise not to alter duties except in accordance with a recommendation of the Tariff Board ; but the Government, which has set such store by those reports, should certainly accept it. The Government has departed from the Tariff Board report on the effect of primage and exchange in two respects. It has applied the downward adjustment in the first instance only to British trade. This is a handsome contribution to Grea t Britain, our best customer, and to the best defence of Australian standards. Honorable members will be glad to see every opportunity taken to better our trade with Great Britain provided that it does not jeopardize the existence of valuable Australian industries. The Government is wise to hold in reserve the right to extend a similar adjustment to foreign countries with which we might enter into a trade agreement. If an adjustment were .effected with foreign countries to-day, it would confer the same concession upon the United States of America, which has always treated our trade as dirt, and upon other countries which have, from time “to time, taken retaliatory measures against Australia.
I regret that there is no provision in the schedule for making the adjustment while Parliament is in recess, should a trade agreement be entered into with another country, but possibly the Government has this matter in mind.
Secondly, the Government is long sighted and sensible in limiting the upward adjustment recommended by the Tariff Board in respect of duties against goods from countries whose currency is more depreciated than our own. In such instances the matter is to be the subject of further investigation and report by the Tariff Board. Some of those countries which have greatly depreciated currencies have been very good customers and good neighbours of Australia. Scares are raised at times as to whether they will remain goo’d neighbours, and it is refreshing to find an Australian Government which will wait to have an inquiry made to ascertain whether their competition is fail- or not before erecting high tariff barriers which may prove to be unnecessary.
I shall oppose the amendment of the Deputy Leader of the Country party and support the adoption of the schedule, which I regard as a most encouraging instalment of the fulfilment of the Government’s election pledges. Other pledges will still remain unfulfilled, but
I shall not now deal with them. I welcome what has been done rather than cry out against what might be done -more rapidly.
– I first ask myself whether this proposal of the Government is in the best interests of the greatest number of people in Australia. I should say that any method would be proper which would stabilize the system of protection in Australia and place it on a scientific basis, so that automatic adjustments in accordance with fluctuations in exchange would preserve its effectiveness. But I disagree with this proposal, on the ground that that is not its object. On the contrary its purpose is to reduce the effectiveness of the present tariff by introducing new elements either now or in the future. If that is not to , bc the result, I cannot imagine why so much real satisfaction has been expressed concerning it by those who have persistently and courageously fought the Government for lower duties. I ask myself whether this ‘Parliament is doing the right thing on behalf of every section of the Australian people in entering into what- the Minister has rightly admitted is a big experiment in relation to a long-established and well-tried fiscal policy. I base my attitude on the debate which took place in the British House of Commons last year, when the first 10 per cent, tariff was introduced and an advisory board was appointed to recommend to the Government when duties should be increased. It was quickly realized that that 10 per cent, protective duty would soon be -whittled away unless currency was stabilized. I believe that what was then aimed at is what the Commonwealth Government is aiming at to-day. The Country party was on perfectly sound ground in suggesting that the effect of exchange, primage, freight and other factors, should be taken into consideration in fixing the tariff. There is no argument against that contention. I believe, however, that those factors should be automatically adjusted so as to preserve the effectiveness of the fiscal policy when properly established. The fear of honorable members who are really protectionists is that, in achieving that object, the effectiveness of the present tariff is likely to bc seriously weakened. That fear would not be felt by the Country party, which holds freetrade views concerning what is not produced by chose whom its members represent. It is a high protectionist party in regard to primary products, but a freetrade party with respect to everything which primary industries do not produce but have to use as tools of trade.. That may be a sound policy from such an isolated point of view, but I disagree with it from the point of view of the best interests of the whole of the people.
The honorable member for Wakefield (Mr. Hawker) made a number of suggestions, and his speech contained several contradictions. He first suggested that the Tariff Board took evidence from representatives of individual industries. The board has not given the slightest indication of having done so. The honorable member’s speech was also punctuated with sentimental reasons for opening up trade relations with other parts of the British Empire. That is all very well, but we cannot live on sentiment. Although he argued, that pacts and agreements, arid the building up of tariff walls against other countries, turned trade wars into military wars, he’ surely did not suggest that there was any likelihood of war between one section of the Empire and another. My reply to him is that the Japanese menace to-day, which every one could see was coming, was the inevitable result of the Ottawa agreement. The more the different sections of the Empire enter into close pacts, and thus cut out some of the trade hitherto done outside the Empire, the more pronounced becomes the menace which the honorable member said we were trying to avoid. On one occasion, in the House of Commons, Lord Chatham made a statement somewhat in the following terms -
When we see the British Colonics entering into manufacturing industries which compete with manufactures in our own country, we must stamp them out in their initial stages. If I had my. way, I would not allow the. settlers in any of our colonics to make even a hob-nail for themselves.
– That is why Great Britain lost America.
– It may lose Australia if it attempts to enforce that, policy upon our people. Although that remark yeas made many years ago, the British manufacturers and their trade representatives hold the same view to-day. That is proved by the fact that, they have an office in No. 2 Secretariat in Canberra, that this Government gives them what they want, and that they have a greater voice than this Parliament in determining what the Tariff Board considers is a fair and reasonable duty to preserve our local industries. At a time when every country is becoming more’ national in outlook, and is frantically endeavouring to build up the local market, we should act contrary to the interests of the Australian people if we weakened our tariff. Why should Australia play a lone hand? Why should it be guided by sentiment, when every other country is building up its tariff? I quote the following from last year’s debate on the tariff in the British House of Commons : -
Sir Robert Horne One of’ the things upon which we may congratulate ourselves is the success of the tariff policy which has been adopted. The speech made by the President of the Board of Trade a few days ago seems to nif to justify all the claims that we on this side of the House have made for years in regard to the benefits to be derived from such a policy. What was the state of affairs with which we were met? We are a manufacturing country, and we must export. Yet in 1931 we imported fl2.000.000 less of raw materials than we imported in 1924. and we imported ?70.000,000 more of manufactures, whilst our manufacturing exports went down between 1924 and 1931 by ?187,000,000 per year.
Honorable members on this side of the House say that the Commonwealth
Government is running the same risk. The honorable gentleman went on to say -
That position, I take it, from the figures given by the President of the Board of Trade, lias been reversed. We are now importing less, and, therefore, saving the country’s money and buying more within our own borders. Our export trade, whilst it has not gone up to any appreciable degree, has nevertheless maintained a higher ratio than that of any other country during recent months. More than all, we are able to say that 250,000 more of our own people are in employment than six months ago. That is a great achievement.
That is the result of Great Britain’s adoption of a protectionist policy. Some honorable members deplore the nationalist point of view, and hope that one of a more international character will be adopted. To them I would say that sentiment will get us nowhere. Every other country is throwing sentimental ideas overboard. At every economic and international conference they refuse to agree to an understanding to reduce tariffs.
– They are getting themselves deeper in the mire.
– We have to face the facts. While this is going on, we propose to experiment with a new formula, the object of which undoubtedly is to weaken the protective incidence of the Australian tariff so that Great Britain and other portions of the British Empire may obtain a larger share of the Australian trade. Surely every other country understands that Australia has the right to be as independent as it can ! The Country party should be careful not to smash the secondary industries of Australia in the hopeless attempt to safeguard its primary industries. The real reason why Australia is in difficulties is the surplus of primary products in the markets of the world. The crushing of our growing secondary industries would not alter that position in the slightest degree. If other countries are adopting a different attitude, surely we are too optimistic if we expect to be able to play a lone hand, to be a Cinderalla among the nations, to be less nationalist than other countries which are frantically trying to extend their markets!
– Can the honorable member mention any industry that has been smashed ?
– I could mention a number of them.
– Name one.
– I shall do so in good time. The honorable member for Gippsland (Mr. Paterson) said that four factors which add to the effectiveness of the Australian tariff should be taken intoconsideration. I point out that, despite the cumulative effect of those factors, the Minister still has to apply the antidumping provisions of the Industries Preservation Act. If it is not scientific to have such a multiplicity of factors, why not scrap them all and make the tariff protection high enough without them ? That could be done quite easily. Repeatedly, when we have mentioned industries that were being slaughtered, the Minister has promised to apply the anti-dumping provisions, if upon inquiry it was found that such action was necessary to prevent the flood of importations, against which local concerns could not compete. While those inquiries were being made, however, the local market was being filled with imported articles, and local industries were stifled. Two concerns in my electorate say that they cannot obtain1 any more orders this year because the requirements are already met. The crippled, partially blind and invalid soldiers say that they will not get a “ sterrick “ of the toy trade this year because of importations from Japan.
– They have been thoroughly misled.
– The cycle trades are in a similar position because of competition from the same source, and, in my electorate, the towel manufacturers have lost a year’s trade. On several occasions I have reported this fact to the Minister. The honorable gentleman was impressed with the information that he received from other quarters, and ordered an inquiry to be made to ascertain if dumping was being indulged in. It is too late to put this machinery into operation. While I agree with the suggestion of the Country party, that all protective factors’ should be taken into consideration, it would be quite wrong to risk the existence of Australian secondary industries by weakening our protective policy. The Minister himself says that this is a great gamble.
– In my humble judgment, the honorable member for Wakefield (Mr. Hawker) was distinctly inaccurate when he said that the Tariff Board had inquired into all these items before making its recommendations. There was no up-to-date inquiry. Up to the present we have had no information as to the way in which Australian industries will be affected by the tariff proposals in relation to exchange. The establishment of local industries tends to protect the consumers. Prior to the establishment of our own manufactories, we had to pay excessive prices for imported articles. In one instance, a certain imported commodity which was sold at £25 a ton prior to the establishment of the Australian industry, is now sold at £15 10s. a. ton. There is plenty of evidence to show that the establishment of industries in this country has protected the rights and the pockets of the consumers. The honorable member for Wakefield seems to think that, the only inefficient people in this community are among the. secondary industries, but let me inform him that many of those engaged in primary industry are far from efficient. He believes that the introduction of these proposals has served to’ bring more closely together two parties in this chamber which are antisocialistic. I recommend him to read what the Attorney-General of Victoria had to say about the Country party in that State. Among other things, he said that that party had put forward some of the greatest socialistic proposals ever advocated by any political party. The members of the Country party in this chamber who are strong in their advocacy of a compulsory wheat pool are really socialists. There is a difference between the Tariff Advisory Board of Great Britain and the Tariff Board of Australia. The British board, established by a protectionist government, has to make inquiries, and if it finds that any’ British industry is suffering unfairly from foreign competition, it recommends an increase of duties, which are given effect by the Treasury under the authority of legislation relating to the protection of British industries. The Treasury publishes in the Gazette a notice of the revised duty, which has the effect of law. There is no reason- why the Tariff Board of Australia should not function in the same way. We should look first to Australian industries, and then to Empire trade. When, as Minister for Trade and Customs, I visited Great Britain, many of the British manufacturers and politicians whom I met there admitted to me that they had not treated Australia fairly, that ‘we had. granted them a liberal preference from 1907 until that time - 1930- and that they had made little or no response to our splendid gesture. That was one of the chief reasons why the British delegation at. Ottawa were prepared to lend an attentive ear to the suggestions of the Australian delegation. The British delegation made no demand for this particular concession which we are now extending to the Old Country. They knew that our exchange stood at 25 per cent. There is some hesitancy on the part, of the Minister himself in regard to these proposals. He realizes that this is a venture into an entirely new field, and that ho may be treading upon dangerous ground.
– I said that the proposals were something new.
– The Minister had no idea of what would happen to Australian industries as a result of giving effect to these proposals. The Attorney-General (Mr. Latham) was more definite in his statement, because he admitted that this subject was bristling with difficulties and dangers. - This committee should, therefore, hesitate before it sanctions this new departure. The Minister has stated that if the proposals relating to exchange aru found to be detrimental to Australian industries, he will at once take action to remedy the position. The matter of exchange should not be dealt with by the Government or the Parliament. In nearly every country of the world it, is controlled by experts who know their business. The. Leader of the Opposition (Mr. Scullin) has truly said, on more than one occasion, and the Prime Minister (Mr. Lyons) has repeated that- this Government will not interfere with the exchange, that it is a matter for the banking authorities. For the most part exchange is under the control of the Commonwealth Bank, and the weekly press publication to the effect that the exchange of 25 per cent, is still in operation is authorized by that bank. Such factors as the exchange, embargoes, surcharges and primage constitute too unstable a foundation upon which to build a tariff structure. Primage was an emergency impost, and was to be abolished when our revenues became more buoyant. The same condition applied to embargoes and surcharges, but it was always considered that exchange was a matter beyond parliamentary control. None of these four factors should enter into what might be termed a permanent tariff schedule, and 1 certainly object to the tariff proposals relating to exchange and their application to Australian industries in the form of reduced protection. The Tariff Board in making these recommendations indulged in a gamble, and the Government, in accepting them, has followed in the footsteps of the board. We do not know to what extent the tariff proposals relating to exchange will affect our manufacturing industries. We have been launched upon a sea that will be full of trouble for this Government and this Parliament. The honorable member for Wakefield, in discussing this subject, seemed to look beyond this chamber to his constituency. I suppose that is a. common practice. If I were looking towards my constituency, however. I should not support a proposition of this kind. 1 think that if the Government looked to the constituencies it would not have introduced this proposal either now or later in the life of this Parliament.
– This is the best thing that the Government has done yet.
– That is the honorable member’s opinion. My view is that it will endanger the life of the Government. I wish to quote two or three statements by gentlemen deeply concerned in both the primary and secondary industries of Australia. It was reported in Monday’s press that Mr. Oscar Seppelt, the retiring president of the Associated Chambers of Commerce of Australia, hae! made the following statement: -
The external debt itself must be reduced substantially from its present staggering total of nearly £000,000,000 on a sterling basis. Only one practical and sure method of attaining that essential objective is open to the Commonwealth. We must insist on rigid adherence to the fundamental commercial principle that a nation should only buy what it can comfortably pay for. International trade on any other footing cannot bc maintained.
To all those who assail us for the erection of adequate fiscal barriers we must make the same answer - that Australia already owes too much to the outside world to incur the risk of adding to that indebtedness by the thoughtless importation of goods which we can and should be making for ourselves. Outside that well-defined commitment, there is a liberal field for overseas trade, and particularly in respect to reciprocal treaties, and a continuance of generous and loyal preference to Britain.
This gentleman has left no doubt at all about his view of the Government’s proposals. The next extract to which I direct attention is from the annual report of a certain manufacturing concern in Geelong, the name of which I am quite willing to give to any honorable member who desires it. The report states -
During the year, the Australian textile industry has been one of the few to enjoy fu;13 employment, thanks principally to the measure of protection received, and to the efficient manner in which the manufacturers as a whole have met the increasing demands for improved production. The Australian woollen manufacturers have proved very definitely that, if they are given an opportunity to meet the growing inquiry for quality goods, Australian textiles will not be found wanting.
We, therefore, view with great alarm the proposed adjustment of the tariff in relation to exchange. One thing is certain - that any curtailment in the volume of production from our local textile manufacturers will place the industry in a very precarious position.
I know that the gentleman whose signature appears at the foot of that report, as a director of the company, is deeply interested in grazing and farming pursuits, as well as in manufacturing.
Although the honorable member for Wakefield and I have had many discussions on tariff matters, and hold different views on many aspects of the subject, I feel sure that he will agree’ with me that it is in the best interests of Australia that all its industries should be kept in efficient working order, and all its people kept in employment. If our industries are to be kept going they must be protected from unfair overseas competition. One of the mast serious subjects engaging attention in both the political and social worlds at present is unemployment. Unless this Parliament takes every possible step to protect the industries of this country, it will be impossible to provide employment for our people. Surely it is the first duty of the Commonwealth Parliament to protect the local market for local manufacturers. I have been amazed at the suggestion that our markets should be thrown open not only to Great Britain, but also to foreign countries! I give place to no one in my regard for the Mother Land. I have said frequently that Great Britain has done more than any other country for the welfare of mankind. We do well to remember that our forefathers, generally speaking, came from the United Kingdom to pioneer this great country. We have every reason, therefore, to do our utmost to promote the interests of the Old Land. But as one of the outposts of the British Empire, Australia should seek so to build its national edifice that it will be able to stand the strain and stress that may come upon it. if certain eventualities, occur. I believe that we can best help the Mother Land by making this country as selfsupporting as possible. No one is more interested *han I in the welfare of the primary producers, but we oan best serve the interests of the primary producers by establishing secondary industries in the Commonwealth. No policy will be so profitable to Australia as one which will make this a highly-industrialized country. The honorable member for Swan (Mr. Gregory) and his colleagues often refer to the need for a large population in Australia. I certainly favour the taking of every reasonable step to increase the population of this continent when times are better. But we shall never be able to have here a strong and virile community unless we do our utmost to establish our secondary industries on fi sound foundation.
The proposal of the Country party that the doors of Australia should be thrown open for trade, without ‘restriction, not only to our kinsmen across the seas, but also to foreigners, should, in my opinion, be strongly resisted. I desire to live in peace and amity with the other peoples of the world. So far as it is possible for us to trade with other countries, we should do so. Undoubtedly they require some of our products, and we could do with some of theirs; but we must first protect our own industries. [ hope that this Parliament will always remember that its first duty is to the people of Australia.
– Ministers are gratified at the reception accorded to their proposals. Generally speaking, they have been well received. Of course, we have heard the usual platitudes from those who believe in prohibition. The Leader of the Opposition (Mr. Scullin), the Deputy Leader of the Opposition (Mr. Forde), and the honorable member for Melbourne Ports (Mr. Holloway) have said that, if the protection accorded our industries by the incidence of exchange is removed, disaster will overtake us, and. we shall again be faced with an adverse trade balance. It has also been said that the endorsement of these proposals will result in an increase of unemployment. But such prophecies were made in connexion with the Ottawa agreement, and proved false. History will repeat itself in this connexion. Admittedly we are embarking upon an experiment.; but I assure the committee that the result of it will be closely watched. There is no likelihood of the direful predictions of honorable members opposite being realized. The Tariff Board has made an exhaustive inquiry into the protective incidence of exchange and primage, and has declared that, if these proposals are implemented, Australian industries will still be quite adequately protected.
– What about towels and towelling?
– An inquiry has been held in respect of those items, but the report is not yet to hand.
– But the goods are coming into Australia all the time.
– In any instances in which undue importations are occurring, the Minister has the power to call for deposits pending an inquiry by the Tariff Board. It was found that deposits were not justified in connexion with towels and towelling. On .the other hand, deposits were required in connexion with gum boots. Honorable members may rest assured that our industries will be safeguarded. It is gratifying to the Government that conditions generally in Australia have improved so greatly during the last few months. This is shown by the fact that our stocks are higher to-day than for many years. It was said some time ago that the Government’s tariff policy would result in default, because an adverse trade balance was inevitable; but this prophecy, like many others, has proved false. I remind honorable members of every shade of fiscal thought that we can import goods only up to the limit of our exports, less the amount which we have to pay in interest and the value of such goods as are brought here in the form of new capital. The prediction that the Government’s tariff policy would cause additional unemployment has proved unsound, for the percentage of unemployment at the end of the last quarter was 25.1, which is lower than that for any quarter since the September quarter of 1930. Our exports are mounting, and our secondary industries are working at full capacity. “We are paying our way. We have also been able to reduce taxation to an extraordinary degree. The proposals in the budget provide for reductions of taxation to the extent, of £7,000,000 in this financial year. In these circumstances, the Government can afford to disregard the warnings just voiced.
The Leader of the Opposition referred to tools of trade. I have received advice from the Tariff Board only this evening that the exchange adjustment will not have any adverse effect on tools of trade. An application has also been made for a new inquiry into this tariff item, with the object of obtaining a higher duty. The Deputy Leader of the Opposition quoted a few sentences from the report of the Tariff Board to the effect that our industries would suffer through the extra overseas competition that they would encounter if the board’s proposal were endorsed. But the honorable gentleman did not read the essential sentences in a later paragraph. In fairness to the board, I shall read them. They are as follow : -
The board considers that a reasonable duty to protect an efficient economic industry should be high enough to raise the landed cost of an overseas product to the level which will -
compensate the local manufacturer for the higher cost (if any) of Australian labour ;
offset the higher costs ( if any ) of raw materials and overhead charges; and
provide a marginal advantage in favour of the Australian manufacturer.
That is perfectly fair.
– What about Ottawa? The British manufacturer claims that he should have “equal opportunities”.
– Not “equal”. Those recommendations are entirely in accord with the Ottawa agreement, and are indicative of the lines on which the Tariff Board carries out its inquiries. Honorable members forget that if we promote reciprocal Empire trade we shall have a greater volume of trade, out of which will come additional employment.
The honorable gentleman also, advocated that we should convert sterling into Australian currency, and charge the duty accordingly. Although his Government introduced prohibitive duties, it did not dare to take action so drastic as that. I am aware that the then Treasurer (Mr. Theodore) hinted’ at such a course, but baulked when he heard the storm of protest that it raised.
The only serious amendment that has been put forward is that moved by the Deputy Leader of the Country party (Mr. Paterson) who asks that recommendation 1 shall also be applied to foreign countries, that it should have an automatic equalizing effect when there was any variation of the exchange below 20 per cent., and that the deduction to foreign countries should be the same as that taken from British invoices. That is a strange proposal to come from the Country party. After all, our greatest and practically our . only market in these days of ‘tariff retaliation is Great Britain. Yet the honorable member suggests that we should reduce foreign duties in ‘favour of, for instance, the United States of America, and so narrow the chances of Great Britain in competition.
– The present preference to Britain would still remain in its entirety.
– That preference is widened by the proposal of the Government, which also opens the door for negotiation with other countries. To show how earnest are those countries to effect reciprocal trade treaties with Australia, I remind honorable members that only last week ho fewer than five of their representatives were in Canberra, pressing for agreements. So soon as this proposal i”s given effect, those negotiations will he the task of the Customs Department, the Commerce Department and the Department of External Affairs. As the result of the preference being widened, there is a proportion of foreign duties available for negotiation which would not otherwise be at our disposal.
– Does not the Minister regard the primage as sufficient to negotiate with ?
– That is another error into which the honorable gentleman has fallen. The Government’s exchange proposal makes a concession of some £310,000 iu revenue; if it were extended to foreign countries it would involve ‘ concessions which can only be guessed at.
– It is all guess work.
– It is not. The British concession has been carefully calculated by the Tariff Board and the department. The Government has also given away approximately £585,000 in a preferential primage concession to Great Britain and to certain foreign countries. If it extended the exchange adjustment as the honorable member suggests to foreign countries, and involved itself in further commitments of about £200,000, the primage concession would not be possible. Further, under the Ottawa agreement, it is an obligation that primage shall be abandoned so soon as the financial position allows that to be done. On that argument alone, the honorable gentleman should allow his amendment to lapse. The Government has not sufficient data to allow for such concessions. The amendment would also cut across the principle that our foreign tariff should apply equally to all nations.
Let me reply now to the honorable member foi’ Melbourne Ports (Mr. Holloway), and others who feel that this proposal is actuated only by sentiment. Sentiment is a splendid cohesive force, but surely those honorable members know that Ottawa and. other ancillary agreements are founded, not only on Empire sentiment, but also on commercial commonsense. The fact that Great Britain has increased its trade with the dominions aud diminished that with foreign countries shows that the Ottawa agree ment is at work, and that the forebodings of its critics were ill-founded.
Australia has done more than any other dominion in observing undertakings given at Ottawa, and is making the quickest recovery. Although the proposal now before the committee has no direct relationship to the Ottawa agreement, it manifests a ready disposition on the partof the Government to open up the channels of reciprocal Empire trade. A greater volume of Empire trade will benefit both the United Kingdom and ourselves, and each individual section of the community in Australia. I urge the committee to accept the Government’s proposal and to reject the amendment submitted by the Country party.
.- We have listened to another diatribe on Ottawa. On the slightest provocation, the Minister and his colleagues will describe the Ottawa agreement as a benefit, to Australia. Possibly, the Government, might have thought that that would be the case, but to date, its promises in this direction have not materialized, The Minister brazenly makes a statement which, apparently, he believes will be accepted as true, if it is repeated a suffi.cient number of times. The Ottawa Conference has definitely failed, and no matter how it is propped up in this chamber by proposals such as that now before the committee, and by other subterfuges, it will not succeed as an instrument for increasing the prosperity of Australia. It would appear that Australian industry is being raped in the name of Ottawa.
As on other’ occasions, we have to-day the extraordinary spectacle of the Government endeavouring to curry favour with the primary producers, by trying to outdo the Country party in the application of freetrade principles. Every time that the “ Oliver Twists “ on my extreme left demand more and still more, this weak and vacillating Government endeavours to placate them. After the “ Oliver Twists “ have got more than they thought would ever be possible, the Government finds them still unsatisfied. This is an impudent attempt on the part of the Country party to kill Australian industry merely for political purposes Its members have adopted as their shibboleth the cry that, to regain prosperity, we must give preference to, and buy goods on, the cheapest market. But their freetrade principles disappear where primary products are concerned, and they are exceptionally strong protectionists when, it comes to rice, wheat, potatoes and the like. The ‘Country party seeks to have the incidence of exchange considered when duties are’ fixed, so that overseas manufacturers may send their goods to Australia and compete on a more than favorable basis with our manufacturers.
During the last thirteen or fourteen years, various governments have afforded protection to Australian industries. It has been left to this Government to bring down a schedule reducing duties, and now, on pressure being exerted from the Country party, it introduces this proposal. It is a great pity that we cannot have a freetrade policy for six months, without sacrificing our secondary industries and workers. I know that bef ore the expiration of that term, those iri the primary industries would demand a return to protection, and that instead of supporting their present representatives, they would use the big stick on them. Under freetrade, the farmer paid more for his. goods than he does now when heis afforded protection by the existence of Australian manufacturers. To-night, the Leader of the Opposition (Mr. Scullin) gave definite evidence taken’ from documents from the British Parliament, that on line after line, the price in New Zealand is higher than it is for similar goods in Australia. For these reasons, I am strongly opposed to the principle embodied in the resolution, and shall vote for the amendment.
.- Apparently, the Government is endeavouring to curry favour with the Country party, not yet having learned that, no matter what concessions are made to it, that party will still remain unsatisfied. Its members are rabid protectionists in regard to anything that affects the primary producers, and just as rabid freetraders when secondary industries are involved. They are consistent only in their inconsistency. The Labour party has no particular reason for going to great lengths in support of Australian manufacturers, because on every conceivable occasion those manufacturers have done all that they could to advance the interests of the present Ministry.
– Order ! The honorable member must deal with the question before the Chair, which is the relation of exchange to the tariff and noi the protectionist policy of any party.
– The Labour party believes in the maintenance of a decent standard of living, and intends to oppose these proposals because they will not assist in that direction. Only by the building up of our own industries can such a standard be assured. We cannot see that, any advantage is to be gained from entering into a poverty competition with other countries whose workers have a lower standard of living .than ours. The Government is adopting the surest means of attacking Australian industries. The Labour party believes that provision, should be made in the tariff for the protection of employees, but under the Constitution that is not possible. When it was proposed years ago, the High Court held on appeal that such action was ultra vires the Constitution.
– Order ! The honorable member is digressing.
– The information that I wished to give was that a so-called captain of industry, who benefited largely from protection, was instrumental in having the case brought before the High Court and frustrating the adoption of the new protection policy fostered by the Labour party. We, therefore, consider that manufacturers deserve the attacks made upon them by this Government. On the eve of the last election Mr. Joshua, who is connected with a big match manufacturing company, went out of -his way to advocate the, cause of; the party which now sits opposite.
– Order ! The honorable member is again digressing from the question before the Chair.
– The Labour party will oppose any proposals that are aimed at the breaking down of Australian industries.
Amendment negatived. Mr. WHITE (Balaclava- Minister for Trade and Customs) [10.5]. - I move -
That the schedule be amended by adding after the word “ proposals “ appearing in the qualifications to Items ll>8 (is) (1), 179 (b) (6), 179 (e), 332, (d), and 376 (e) the words “ or of any law passed to give effect to those proposals. “
This is merely a drafting amendment, which is necessary to provide that the qualifications of the items in relation to customs tariff proposals shall continue to operate when those proposals have been passed into an act.
.- Amendments of this character should be printed and circulated, if possible, or, at least, the leader of each party should be made acquainted with the intentions of the Government and the purport of any amendments that are to be moved. I suggest that consideration ‘ of this amendment be postponed until to-morrow, so that honorable members may have an opportunity to see what effect it will have on the schedule.
– It will have no effect; it merely provides that what applies in the proposal shall apply in the act.
Mr.FORDE. - I do not believe that two honorable members understand what the amendment means. When he was a private member and I was Minister for Trade and Customs, the present Minister frequently put to me the query “Is this something you want to slip through? Why not throw the light of day on it?” The honorable gentleman cannot expect us to accept his assurance that the matter is not controversial; that depends on one’s point of view. He could slip through an amendment that would be acceptable to the honorable member for Gippsland (Mr. Paterson) but might be ruinous to Australian industries. The honorable member for Gippsland would approve of anything that would undermine the protectionist policy of Australia.
– That is not true.
– Order ! The honorable member is entitled to make his protest, but not to attack other honorable members.
– I have no wish to cast personal reflections on the honorable member for Gippsland. I again appeal to the Minister to agree to the postponement of the amendment, so that honorable members may realize its significance. Surely he has no desire to adopt a “ hush “ policy, and to rush amendments through without giving a full explanation of them!
– I assure the committee that these are merely formal drafting amendments, such as were agreed to without debate on many items of the tariff. The object is to ensure that what is contained in the proposals will also be contained in the law. I intend to bring up the bill as soon as the vote is taken.
Amendment agreed to.
Question - That the motion, as amended, be agreed to - put. The committee divided. (Chairman - Mr. Bell.)
Majority . . . . 20
Question so resolved in the affirmative.
Standing Orders suspended ; resolution adopted.
Th.it Mr. White and Mr. Guy do prepare and bring in a bill to carry out “the foregoing resolution.
Bill brought up by Mr. White and passed through all stages without amendment or debate.
– I move -
That the House do now adjourn.
I wish to intimate to honorable members that the Cabinet has to-day decided to ask the Parliament to make a grant of £3.000 to Air-Commodore Sir Charles Kingsford Smith. This grant is to be made in recognition not alone of the aviator’s latest achievement, but of his splendid record of service to aviation in Australia and throughout the world.
– I wish to bring under the the notice of the Minister for the Interior (Mr. Perkins) the serious position that has arisen in connexion with the vacation of school teachers in the Northern Territory. I asked the Minister a question on this subject this afternoon and he told me that he had no information on the subject at the moment. I have since received the following telegram from the teachers concerned : -
On sixteenth October staffs .’Darwin Parap Kahlin schools were advised they were no longer eligible for Christinas school vacation of six weeks and with exception of supervisor were detailed off to various offices for duty during that period. Teachers bitterly deplore fact that no opportunity of protesting to Secretary Brown was allowed them though intention apparently known for over a week to few in administration. Neither supervisor education nor visiting inspector was consulted.
It is universal custom in tropical countries for teachers to be granted special leave in addition to school vacations. South Australia granted this privilege here before Commonwealth took over. Difficulties of education here are mixed nationalities, lack of English vocabulary, mental lassitude of pupils and floating character of population, all occasioning extra drain on teachers vitality. If time for recuperation not allowed teachers standard of educaton must inevitably suffer severely. It will be absolutely impossible to maintain in Darwin” school the standard so highly commended by Inspector Moorhouse in nineteen thirtyone. This will possibly have an effect on development of Territory and will jeopardise the future education of every Territory child. Even if temporary clerks are temporarily dispensed with to make room for teachers little saving would result.
We ask you in interests of Territory to combat this proposal and place these representations before Minister. We consider any interference existing conditions will be detrimental educaton
It is incomprehensible to me that such a drastic and arbitrary alteration of the conditions of these teachers should be made. The existing arrangements have been, in force for two or three decades. I am also surprised that the teachers were not given an opportunity to interview the Secretary of the Department of the Interior, Mr. Brown, while he was in Darwin recently. It is extraordinary that these teachers should be denied privileges which are extended to school teachers in every other part of the Commonwealth. In North Queensland where the climatic conditions are unfavorable the school teachers are granted two weeks’ leave over and above that allowed for recreation. Scientists have declared that in the matter of humidity Darwin is among the worst localities of the earth. This makes the task of the teachers in the Northern Territory much more difficult and trying than that of teachers in other more favoured districts. Other circumstances also make the work of school teaching exceptionally arduous at Darwin. Children of all nationalities attend the school. Some children are taught one language at home and have to go to school to be taught English. It has been admitted by the inspectors of the Queensland Education Department who visit the schools in the Northern Territory that the educational standard of the children is exceedingly high. This undoubtedly indicates that the teachers do their work most efficiently. I know that children who have been educated in the Northern Territory and have subsequently attended schools in the south to finish their education are always regarded as exceedingly bright and intelligent pupils. I should like to know who has “doublecrossed “ these officers who are rendering such valuable service to the community. For what reason should an exception be made in their case to the ordinary vacation rules? School teachers, in my opinion, are rendering invaluable service to the whole community and should be accorded the best possible treatment. A big responsibility rests upon them, for they are training the citizens of to-morrow. Is the move to place these teachers in offices during the period they should be on holidays an effort to oust a few temporary clerical employees in the Northern Territory? Surely it will be admitted by the Minister that the teachers should have been consulted before such a drastic alteration of their condition of employment was made. If the object of the Government is to make the teachers’ conditions unbearable and so get rid of them I suggest that it should take a more direct means of attaining its end. If the policy of denying the teachers their proper vacation is persisted in, it will mean that only those teachers who are unable to find employment in other parts of Australia will accept appointments in Darwin. I urge the Government to improve rather than break down the conditions of the teachers in this far-distant territory. The children in that part of the Commonwealth have enough hardships to bear without having to suffer the drawback of an inferior education. Unless the school teachers of the territory are granted proper recreation facilities, and leave so that they may recuperate, they will become nervous wrecks. The Prime Minister said this afternoon that he believed in arbitration. I suggest that the teachers should be granted the facilities of arbitration in their present unhappy circumstances. The Government should not adopt roughandready methods of this description which must result in spoiling an institution which is of great importance to the rising generation.
– I told the honorable member for the Northern Territory (Mr. Nelson) this afternoon that as I had no information on the subject of the school teachers at Darwin, I was unable to affirm or deny his allegations. If anything of the nature complained of has been done the Administrator has been responsible for it, and I can only assume that he had good reason for what he has done.
– Could the Administrator do this without the knowledge of the Minister?
– Yes; I receive monthly reports from the Administrator. Only urgent matters are communicated to me by telegram. Naturally, the Administrator, working at such a distance from the seat of government, must be given large powers.
– Where does the Minister come in?
– I shall obtain information on this subject. If the honorable member had allowed the matter to remain in abeyance until to-morrow, I should, probably, have been able to make some definite statement on the subject. I find it very difficult to believe that the secretary of the department, Mr. Brown, refused to receive a deputation of school teachers while he was in Darwin, for his object in visiting the territory was to confer with the residents, to hear complaints, and to remedy any grievances that could be remedied by him. Mr. Brown is at present in Brisbane, and I conversed with him by telephone, but he made no reference to any trouble of this nature. However, I promise the honorable member that I shall have full inquiries made, and communicate the result to him as soon as possible.
Question resolved in the affirmative.
House adjourned at 10.42 p.m.
Thefollowinganswers to questions were circulated: -
y asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follow : -
Particulars of duty collected according to country of origin are not available, and even if available the cost involved in collating the desired information would preclude the furnishing thereof.
y asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
y asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
Crude Oil for Royal AustralianNavy.
y asked the Assistant Minister for Defence, upon notice -
Whether he will supply a copy of the analytical report on the crude oil at present used by the Royal Australian Navy, and the price paid for same?
– The oil fuel used at present in the Royal Australian Navy is Persian residual oil of which the following is a representative analysis: -
Flash point 194 degrees Fahrenheit.
Sulphur content . 89 per cent.
Water content .1 per cent.
Acidity .01 per cent.
Viscosity 316 seconds at 32 degrees Fahrenheit.
Specific gravity . 897.
The oil fuel requirements of the Royal Australian Navy are being purchased under a confidential contract, and the price cannot be disclosed.
Development of Aerial comm unica tion s.
n asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow: -
Siu i u . the honorable member’s .attention is invited to the fact that the Government has devoted considerable attention and investigation to the development of regular air communications between” Europe and Australia. In pursuance of the policy adopted in this matter, the Government has invited tenders for the establishment of a weekly air service between Darwin and Singapore (connecting at Singapore with the British service to England), “and also for the operation of important internal services.
Prices of Export Products.
s. - On the 12th October, the honorable member for Riverina (Mr. Nock) asked the following question, without notice: -
Can the Prime Minister state whether the figures in the budget in connexion with the prices of export products refer to the prices in Sydney or London or at country railway sidings?
I desire to inform the honorable member that the average prices for wool and wheat (Australian markets) shown in the budget speech were as follow : -
Wool - Sydney price. Wheat - Melbourne price.
The prices of the remainder of the products quoted were those of London markets.
s. - On the 19th October, the honorable member for Dalley (Mr. Rosevear) asked the following questions, upon notice: -
Has his attention been drawn to the following London message appearing in the Sydney Morning Herald of the 12th October : - “ The naval correspondent of the Daily Tele graph says that the real’ reason why the fleet exercises were cancelled was that nearly all the destroyers were fifteen or sixteen years old and none too robust. It was feared that driving them into heavy seas at speeds of even 25 knots might have entailed costly damage to these old crocks.”?
I am now in a position to inform the honorable member as follows: -
n asked the AttorneyGeneral, upon notice -
– My attention has been directed to reported comments of the character mentioned, which were made by one justice. The comments were, in the strict sense of the term, non-judicial in character, and were, in my opinion, not justified. The- justice subsequently granted the application for leave to appeal, and the case is therefore now sui judice. It would therefore not be strictly in accordance with parliamentary practice to answer the honorable member’s question at, the present stage.
Cite as: Australia, House of Representatives, Debates, 24 October 1933, viewed 22 October 2017, <http://historichansard.net/hofreps/1933/19331024_reps_13_141/>.